Construction Contracts

9 Months Ended

Sep. 30, 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 September 30, 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 nine months ended September 30, 2024 and 2023 (in thousands):

	Nine Months Ended  September 30, 2024				Nine Months Ended  September 30, 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	—		14,318		—		24,570
Transferred to receivables	(106)		—		(342)		—
Construction contract costs and estimated earnings not billed during the period	315		—		440		—
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion	2		(2,437)		—		(1,443)
Ending balance	$	315	$	11,881	$	440	$	23,127

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 $1.6 million and $1.9 million were deferred as of September 30, 2024 and December 31, 2023, respectively. Amortization of pre-contract costs for the nine months ended September 30, 2024 and 2023 was $0.1 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 September 30, 2024 and December 31, 2023, construction receivables included retentions of $41.3 million and $28.7 million, respectively. The Company expects to collect substantially all construction receivables outstanding as

of September 30, 2024 during the next 12 to 24 months. As of September 30, 2024 and December 31, 2023, construction payables included retentions of $45.1 million and $38.2 million, respectively. The Company expects to pay substantially all construction payables outstanding as of September 30, 2024 during the next 12 to 24 months.

The Company’s net position on uncompleted construction contracts comprised the following as of September 30, 2024 and December 31, 2023 (in thousands):

	September 30, 2024		December 31, 2023
Costs incurred on uncompleted construction contracts	$	931,153	$	718,571
Estimated earnings	33,585		26,089
Billings	(976,304)		(765,970)
Net position	$	(11,566)	$	(21,310)
Construction contract costs and estimated earnings in excess of billings	$	315	$	104
Billings in excess of construction contract costs and estimated earnings	(11,881)		(21,414)
Net position	$	(11,566)	$	(21,310)

The above table reflects the net effect of projects closed as of September 30, 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 September 30, 2024 and 2023 were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Beginning backlog	$	302,850	$	592,787	$	472,169	$	665,564
New contracts/change orders	4,886		20,646		80,067		135,414
Work performed	(114,614)		(99,855)		(359,114)		(287,400)
Ending backlog	$	193,122	$	513,578	$	193,122	$	513,578

The Company expects to complete a majority of the uncompleted contracts in place as of September 30, 2024 during the next 12 to 24 months.