Contract Assets and Liabilities

3 Months Ended

Mar. 31, 2024

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. These contracts 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 March 31, 2024 and December 31, 2023, respectively.

Contract assets consisted of the following:

(in thousands)	March 31, 2024		December 31, 2023		Change
Unbilled revenue, net	$	232,565	$	217,083	$	15,482
Contract retainages, net	218,176		203,533		14,643
Contract assets, net	$	450,741	$	420,616	$	30,125

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)	March 31, 2024		December 31, 2023		Change
Deferred revenue	$	262,871	$	231,604	$	31,267
Accrued loss provision	8,093		8,807		(714)
Contract liabilities	$	270,964	$	240,411	$	30,553

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

(in thousands)	March 31, 2024		December 31, 2023		Change
Contract assets, net	$	450,741	$	420,616	$	30,125
Contract liabilities	(270,964)		(240,411)		(30,553)
Net contract assets	$	179,777	$	180,205	$	(428)

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 $28.6 million for the three months ended March 31, 2024. The amounts of revenue recognized in the period that were included in the opening contract liability balances were $60.2 million for the three months ended March 31, 2023. This revenue consists primarily of work performed on previous billings to customers.

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

(in thousands)	March 31, 2024		December 31, 2023
Costs and estimated earnings on uncompleted contracts	$	6,667,250	$	6,716,990
Less: billings to date	6,697,556		6,731,511
	$	(30,306)	$	(14,521)

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)	March 31, 2024		December 31, 2023
Unbilled revenue	$	232,565	$	217,083
Deferred revenue	(262,871)		(231,604)
	$	(30,306)	$	(14,521)