Note 4 - Revisions in Estimates

6 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Revisions in Estimates [Text Block]

4.  Revisions in Estimates

Our profit recognition related to construction contracts is based on estimates of transaction price and costs to complete each project. These estimates can vary significantly in the normal course of business as projects progress, circumstances develop and evolve, and uncertainties are resolved. Changes in estimates of transaction price and costs to complete may result in the reversal of previously recognized revenue if the current estimate adversely differs from the previous estimate. When we experience significant changes in our estimates, we undergo a process that includes reviewing the nature of the changes to ensure that there are no material amounts that should have been recorded in a prior period rather than as revisions in estimates for the current period. For revisions in estimates, generally we use the cumulative catch-up method for changes to the transaction price that are part of a single performance obligation. Under this method, revisions in estimates are accounted for in their entirety in the period of change. There can be no assurance that we will not experience further changes in circumstances or otherwise be required to revise our estimates in the future. In our review of these changes for the three and six months ended June 30, 2021 and 2020, we did not identify any material amounts that should have been recorded in a prior period. 

In the normal course of business, we have revisions in estimates, including estimated costs some of which are associated with unresolved affirmative claims and back charges. The estimated or actual recovery related to these estimated costs may be recorded in future periods or may be at values below the associated cost, which can cause fluctuations in the gross profit impact from revisions in estimates.

There were no increases from revisions in estimates, which individually had an impact of $5.0 million or more on gross profit, for the periods presented.

The projects with decreases from revisions in estimates, which individually had an impact of $5.0 million or more on gross profit, are summarized as follows (dollars in millions except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Number of projects with downward estimate changes		—		3		2		5
Amount/range of reduction in gross profit from each project, net	$	—	$	5.8 - 16.1	$	5.3 - 6.1	$	7.4 - 19.8
Decrease to project profitability		—		30.9		11.4		69.8
Increase to net loss		—		22.9		8.9		51.8
Increase to net loss per diluted share		—		0.50		0.20		1.14

The decreases during the six months ended June 30, 2021 were in our Transportation segment and were due to additional costs from acceleration of work coupled with lower productivity than originally anticipated and unfavorable weather. Other than one project in our Specialty segment during the three and six months ended  June 30, 2020, all decreases were in our Transportation segment and were due to additional costs and lower productivity than originally anticipated as well as weather related costs.