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Table of Contents
<br />AMERESCO, INC.
<br />NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<br />(In thousands, except per share amounts)
<br />Contract Balances
<br />The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:
<br />Accounts receivable, net
<br />Accounts receivable retainage
<br />Contract Assets
<br />Costs and estimated earnings in excess of billings
<br />Contract Liabilities
<br />Billings in excess of cost and estimated earnings
<br />December 31, 2023
<br />December 31, 2022
<br />153,362 $ 174,009
<br />33,826 38,057
<br />636,163 576,363
<br />52,903 34,796
<br />Billings in excess of cost and estimated earnings, non -current(')
<br />18,393 7,617
<br />Total contract liabilities $ 71,296 $ 42,413
<br />(1) Performance obligations that are expected to be completed beyond the next twelve months and are included in other liabilities in the consolidated balance sheets.
<br />The increase in contract assets for the year ended December 31, 2023 was primarily due to revenue recognized of 940,317, offset in part by billings of $886,788. Contract
<br />assets also increased due to reclassifications, primarily from contract liabilities as a result of timing of customer payments. The increase in contract liabilities was primarily
<br />driven by the receipt of advance payments from customers, and related billings, as well as reclassifications from contract assets as a result of timing of customer payments. The
<br />advance payments and reclassifications exceeded the recognition of revenue as performance obligations were satisfied. For the year ended December 31, 2023, we recognized
<br />revenue of $160,713 and billed $184,174 to customers that had balances which were included in contract liabilities at December 31, 2022.
<br />The increase in contract assets for the year ended December 31, 2022 was primarily due to revenue recognized of 3,371,455, offset in part by billings of $1,103,926. Contract
<br />assets also increased due to reclassifications, primarily from contract liabilities as a result of timing of customer payments. The increase in contract liabilities was primarily
<br />driven by the receipt of advance payments from customers, and related billings, as well as reclassifications from contract assets as a result of timing of customer payments. The
<br />advance payments and reclassifications exceeded the recognition of revenue as performance obligations were satisfied. For the year ended December 31, 2022, we recognized
<br />revenue of $135,506, and billed $129,749 to customers that had balances which were included in contract liabilities at December 31, 2021.
<br />Performance Obligations
<br />Our remaining performance obligations ("fully -contracted backlog") represent the unrecognized revenue value of our contract commitments. Our backlog may vary significantly
<br />each reporting period based on the timing of major new contract commitments and the fully -contracted backlog may fluctuate with currency movements. In addition, our
<br />customers have the right, under some circumstances, to terminate contracts or defer the timing of our services and their payments to us. At December 31, 2023, we had fully -
<br />contracted backlog of $2,545,403 and approximately 32% of our fully -contracted backlog is anticipated to be recognized as revenue in the nexttwelve months. The remaining
<br />performance obligations primarily relate to the energy efficiency and renewable energy construction projects, including long-term O&M services related to these projects. The
<br />long-term services have varying initial contract terms, up to 25 years.
<br />We applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for (i) contracts with an original expected term of one
<br />year or less or (ii) contracts for which we recognize revenue in proportion to the amount we have the right to invoice for services performed.
<br />Contract Acquisition Costs
<br />As of December 31, 2023 and 2022, we had capitalized commission costs of $1,735, related to contracts that were not completed, which were included in other assets in the
<br />accompanying consolidated balance sheets. For contracts that have a duration of less than one year, we follow a practical expedient and expense these costs when incurred.
<br />During the years ended December 31, 2023 and 2022, the amortization of commission costs related to contracts was not material and have been included in the accompanying
<br />consolidated statements of income.
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