Contract Assets and Liabilities

6 Months Ended

Jun. 30, 2023

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract]

Contract Assets and Liabilities

Contract Assets and Liabilities

Contracts with customers usually stipulate the timing of payment, which is defined by the terms found within the various contracts under which work was performed during the period. Therefore, contract assets and liabilities are created when the timing of costs incurred on work performed does not coincide with the billing terms, which frequently include retention provisions contained in each contract.

The Company’s consolidated balance sheets present contract assets, which contain unbilled revenue and contract retainages associated with contract work that has been completed and billed but not paid by customers, pursuant to retainage provisions, that are generally due once the job is completed and approved. The allowance for doubtful accounts associated with contract assets was $0.6 million as of June 30, 2023 and $0.5 million as of December 31, 2022.

Contract assets consisted of the following:

(in thousands)	June 30, 2023		December 31, 2022		Change
Unbilled revenue, net	$	210,466	$	156,266	$	54,200
Contract retainages, net	171,940		144,349		27,591
Contract assets, net	$	382,406	$	300,615	$	81,791

The Company’s consolidated balance sheets present contract liabilities that contain deferred revenue and an accrual for contracts in a loss provision.

Contract liabilities consisted of the following:

(in thousands)	June 30, 2023		December 31, 2022		Change
Deferred revenue	$	225,842	$	223,654	$	2,188
Accrued loss provision	2,976		3,401		(425)
Contract liabilities	$	228,818	$	227,055	$	1,763

The following table provides information about contract assets and contract liabilities from contracts with customers:

(in thousands)	June 30, 2023		December 31, 2022		Change
Contract assets, net	$	382,406	$	300,615	$	81,791
Contract liabilities	(228,818)		(227,055)		(1,763)
Net contract assets	$	153,588	$	73,560	$	80,028

The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing of the Company’s billings in relation to its performance of work. The amounts of revenue recognized in the period that were included in the opening contract liability balances were $17.3 million and $107.0 million for the three and six months ended June 30, 2023, respectively. The amounts of revenue recognized in the period that were included in the opening contract liability balances were $25.8 million and $58.6 million for the three and six months ended June 30, 2022, respectively.

The net asset position for contracts in process consisted of the following:

(in thousands)	June 30, 2023		December 31, 2022
Costs and estimated earnings on uncompleted contracts	$	5,713,213	$	5,390,535
Less: billings to date	5,728,589		5,457,923
	$	(15,376)	$	(67,388)

The net asset position for contracts in process is included within the contract asset and contract liability in the accompanying consolidated balance sheets as follows:

(in thousands)	June 30, 2023		December 31, 2022
Unbilled revenue	$	210,466	$	156,266
Deferred revenue	(225,842)		(223,654)
	$	(15,376)	$	(67,388)