Uncompleted Contracts (Notes)

3 Months Ended

Sep. 30, 2016

Disclosure Customer Contracts Additional Information [Abstract]

Contract terms of the Company’s construction contracts generally provide for progress billings based on project milestones. The excess of costs incurred and estimated earnings over amounts billed on uncompleted contracts is reported as a current asset. The excess of amounts billed over costs incurred and estimated earnings recognized on uncompleted contracts is reported as a current liability. Gross and net amounts on uncompleted contracts are as follows:



	September 30, 2016		June 30, 2016
	(in thousands)
Costs incurred and estimated earnings recognized on uncompleted contracts	$	2,107,546	$	1,875,014
Billings on uncompleted contracts	2,054,834		1,829,340
	$	52,712	$	45,674
Shown in balance sheet as:
Costs and estimated earnings in excess of billings on uncompleted contracts	$	105,094	$	104,001
Billings on uncompleted contracts in excess of costs and estimated earnings	52,382		58,327
	$	52,712	$	45,674

Progress billings in accounts receivable at September 30, 2016 and June 30, 2016 included retentions to be collected within one year of $43.2 million and $29.7 million, respectively. Contract retentions collectible beyond one year are included in other assets in the condensed consolidated balance sheet and totaled $0.3 million at June 30, 2016. There were no retentions collectible beyond one year at September 30, 2016.

Other

Under percentage of completion accounting for fixed-priced contracts, contract revenues and earnings are recognized ratably over the contract term based on the proportion of actual costs incurred to total estimated costs. As of September 30, 2016, the Company is performing work on two previously announced significant multi-year projects that are contracted on a fixed price basis. One of the projects is expected to be complete in fiscal 2017 and the second project is expected to be complete in fiscal 2018.

On the project that is expected to complete in fiscal 2018, which is a contract for the construction of a power generating station, the Company recorded a project charge in the first quarter of fiscal 2017. The charge primarily related to costs incurred that relate to a pending claim for which the Company did not recognize any profit and changes in estimated costs on certain portions of the work. The Company is in active negotiations with the client regarding the recovery of claim related costs and extension of the project completion date. These costs primarily relate to owner provided engineering and equipment, which has resulted in additional work and a delayed project completion date. The outcome of these negotiations is unpredictable and may have a significant financial impact to the Company.

Although there is significant uncertainty surrounding the client negotiations on the power generation project, based on the information currently available, the Company believes that its current estimates relating to these projects are reasonable. However, it is possible that changes to these contract estimates, including those related to project costs, project timelines, and change orders or claims, could occur and have a material positive or negative impact to our results of operations and financial position in subsequent accounting periods.