Construction Contracts

12 Months Ended

Dec. 31, 2023

Contractors [Abstract]

Construction Contracts

Construction Contracts

Construction contract costs and estimated earnings in excess of billings represent reimbursable costs and amounts earned under contracts in progress as of the balance sheet date. Such amounts become billable according to contract terms, which usually consider the passage of time, achievement of certain milestones, or completion of the project. The Company expects to bill and collect substantially all construction contract costs and estimated earnings in excess of billings as of December 31, 2023 during the year ending December 31, 2024.  

Billings in excess of construction contract costs and estimated earnings represent billings or collections on contracts made in advance of revenue recognized.

The following table summarizes the changes to the balances in the Company’s construction contract costs and estimated earnings in excess of billings account and the billings in excess of construction contract costs and estimated earnings account for the years ended December 31, 2023 and 2022 (in thousands):

	Year ended December 31, 2023				Year ended December 31, 2022
	Construction contract costs and estimated earnings in excess of billings		Billings in excess of construction contract costs and estimated earnings		Construction contract costs and estimated earnings in excess of billings		Billings in excess of construction contract costs and estimated earnings
Beginning balance	$	342	$	17,515	$	243	$	4,881
Revenue recognized that was included in the balance at the beginning of the period	—		(17,515)		—		(4,881)
Increases due to new billings, excluding amounts recognized as revenue during the period	—		23,309		—		18,238
Transferred to receivables	(394)		—		(965)		—
Construction contract costs and estimated earnings not billed during the period	104		—		342		—
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion	52		(1,895)		722		(723)
Ending balance	$	104	$	21,414	$	342	$	17,515

The Company defers pre-contract costs when such costs are directly associated with specific anticipated contracts and their recovery is probable. Pre-contract costs of $1.9 million and $1.3 million were deferred as of December 31, 2023 and 2022, respectively. Amortization of pre-contract costs for the years ended December 31, 2023 and 2022 was $0.2 million and $1.1 million, respectively.

Construction receivables and payables include retentions, which are amounts that are generally withheld until the completion of the contract or the satisfaction of certain restrictive conditions such as fulfillment guarantees. As of December 31, 2023 and 2022, construction receivables included retentions of $28.7 million and $8.3 million, respectively. The Company expects to collect substantially all construction receivables as of December 31, 2023 during the year ending December 31, 2024. As of December 31, 2023 and 2022, construction payables included retentions of $38.2 million and $24.7 million, respectively. The Company expects to pay substantially all construction payables as of December 31, 2023 during the year ending December 31, 2024.

The Company’s net position on uncompleted construction contracts comprised the following as of December 31, 2023 and 2022 (in thousands):

	December 31,
	2023		2022
Costs incurred on uncompleted construction contracts	$	718,571	$	571,465
Estimated earnings	26,089		22,162
Billings	(765,970)		(610,800)
Net position	$	(21,310)	$	(17,173)
Construction contract costs and estimated earnings in excess of billings	$	104	$	342
Billings in excess of construction contract costs and estimated earnings	(21,414)		(17,515)
Net position	$	(21,310)	$	(17,173)

The Company's balances and changes in construction contract price allocated to unsatisfied performance obligations (backlog) for each of the three years ended December 31, 2023, 2022 and 2021 were as follows (in thousands):

	Years Ended December 31,
	2023		2022		2021
Beginning backlog	$	665,565	$	215,519	$	71,258
New contracts/change orders	221,473		685,753		236,077
Work performed	(414,868)		(235,707)		(91,816)
Ending backlog	$	472,170	$	665,565	$	215,519

The Company expects to complete a majority of the uncompleted contracts as of December 31, 2023 during the next 12 to 24 months.