Construction Contracts

3 Months Ended

Mar. 31, 2024

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 March 31, 2024 during the next 12 to 24 months.  

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 three months ended March 31, 2024 and 2023 (in thousands):

	Three Months Ended  March 31, 2024				Three Months Ended  March 31, 2023
	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	$	104	$	21,414	$	342	$	17,515
Revenue recognized that was included in the balance at the beginning of the period	—		(21,414)		—		(17,515)
Increases due to new billings, excluding amounts recognized as revenue during the period	—		22,493		—		17,150
Transferred to receivables	(107)		—		(347)		—
Construction contract costs and estimated earnings not billed during the period	26		—		1,206		—
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion	3		(765)		5		(414)
Ending balance	$	26	$	21,728	$	1,206	$	16,736

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 $2.1 million and $1.9 million were deferred as of March 31, 2024 and December 31, 2023, respectively. Amortization of pre-contract costs for the three months ended March 31, 2024 and 2023 was $0.2 million and $0.3 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 March 31, 2024 and December 31, 2023, construction receivables included retentions of $31.1 million and $28.7 million, respectively. The Company expects to collect substantially all construction receivables outstanding as of March 31, 2024 during the next 12 to 24 months. As of March 31, 2024 and December 31, 2023, construction payables included

retentions of $40.7 million and $38.2 million, respectively. The Company expects to pay substantially all construction payables outstanding as of March 31, 2024 during the next 12 to 24 months.

The Company’s net position on uncompleted construction contracts comprised the following as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024		December 31, 2023
Costs incurred on uncompleted construction contracts	$	707,665	$	718,571
Estimated earnings	25,318		26,089
Billings	(754,685)		(765,970)
Net position	$	(21,702)	$	(21,310)
Construction contract costs and estimated earnings in excess of billings	$	26	$	104
Billings in excess of construction contract costs and estimated earnings	(21,728)		(21,414)
Net position	$	(21,702)	$	(21,310)

The above table reflects the net effect of projects closed as of March 31, 2024 and December 31, 2023, as applicable.

The Company’s balances and changes in construction contract price allocated to unsatisfied performance obligations (backlog) as of March 31, 2024 and 2023 were as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Beginning backlog	$	472,169	$	665,564
New contracts/change orders	(1,404)		70,792
Work performed	(127,359)		(84,516)
Ending backlog	$	343,406	$	651,840

The Company expects to complete a majority of the uncompleted contracts in place as of March 31, 2024 during the next 12 to 24 months.