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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to
Commission file number: 1-08325
_____________________________________________________________
MYR GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware36-3158643
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
12150 East 112th Avenue
Henderson,CO80640
(Address of principal executive offices)(Zip Code)
(303) 286-8000
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)
_____________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueMYRGThe Nasdaq Stock Market, LLC
(Nasdaq Global Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No x
As of July 22, 2022, there were 16,656,698 outstanding shares of the registrant’s $0.01 par value common stock.



Table of Contents

INDEX
Page
Throughout this report, references to “MYR Group,” the “Company,” “we,” “us” and “our” refer to MYR Group Inc. and its consolidated subsidiaries, except as otherwise indicated or as the context otherwise requires.
1

Table of Contents
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
MYR GROUP INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)June 30,
2022
December 31,
2021
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents$22,057 $82,092 
Accounts receivable, net of allowances of $2,337 and $2,441, respectively
409,497 375,353 
Contract assets, net of allowances of $452 and $385, respectively
280,718 225,075 
Current portion of receivable for insurance claims in excess of deductibles9,755 11,078 
Refundable income taxes9,650 9,228 
Prepaid expenses and other current assets52,733 45,564 
Total current assets784,410 748,390 
Property and equipment, net of accumulated depreciation of $336,347 and $322,128, respectively
212,055 196,092 
Operating lease right-of-use assets32,675 20,971 
Goodwill108,405 66,065 
Intangible assets, net of accumulated amortization of $22,729 and $16,779, respectively
98,746 49,054 
Receivable for insurance claims in excess of deductibles21,262 32,443 
Investment in joint ventures3,155 3,978 
Other assets3,661 4,099 
Total assets$1,264,369 $1,121,092 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt$1,065 $1,039 
Current portion of operating lease obligations9,405 7,765 
Current portion of finance lease obligations1,318  
Accounts payable251,646 200,744 
Contract liabilities203,163 167,931 
Current portion of accrued self-insurance23,526 24,242 
Accrued income taxes2,669 2,021 
Other current liabilities72,614 94,857 
Total current liabilities565,406 498,599 
Deferred income tax liabilities24,613 24,620 
Long-term debt54,381 3,464 
Accrued self-insurance39,666 50,816 
Operating lease obligations, net of current maturities23,272 13,230 
Finance lease obligations, net of current maturities3,026  
Other liabilities22,923 11,261 
Total liabilities733,287 601,990 
Commitments and contingencies
Stockholders’ equity:
Preferred stock—$0.01 par value per share; 4,000,000 authorized shares; none issued and outstanding at June 30, 2022 and December 31, 2021
  
Common stock—$0.01 par value per share; 100,000,000 authorized shares; 16,723,583 and 16,870,636 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
167 168 
Additional paid-in capital158,691 163,754 
Accumulated other comprehensive income (loss)(1,653)173 
Retained earnings373,877 355,007 
Total stockholders’ equity531,082 519,102 
Total liabilities and stockholders’ equity$1,264,369 $1,121,092 
The accompanying notes are an integral part of these consolidated financial statements.
2

Table of Contents
MYR GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Three months ended
June 30,
Six months ended
June 30,
(in thousands, except per share data)2022202120222021
Contract revenues$708,114 $649,573 $1,344,738 $1,242,059 
Contract costs627,252 568,551 1,183,391 1,084,084 
Gross profit80,862 81,022 161,347 157,975 
Selling, general and administrative expenses52,016 51,890 105,580 101,537 
Amortization of intangible assets3,253 578 6,020 1,156 
Gain on sale of property and equipment(652)(1,111)(1,400)(1,794)
Income from operations26,245 29,665 51,147 57,076 
Other income (expense):
Interest income6 15 14 28 
Interest expense(650)(678)(1,101)(1,153)
Other income, net2,277 80 2,262 121 
Income before provision for income taxes27,878 29,082 52,322 56,072 
Income tax expense8,194 7,863 11,950 14,925 
Net income$19,684 $21,219 $40,372 $41,147 
Income per common share:
—Basic$1.17 $1.26 $2.39 $2.45 
—Diluted$1.15 $1.24 $2.36 $2.41 
Weighted average number of common shares and potential common shares outstanding:
—Basic16,894 16,854 16,904 16,807 
—Diluted17,070 17,125 17,141 17,093 
Net income$19,684 $21,219 $40,372 $41,147 
Other comprehensive income (loss):
Foreign currency translation adjustment(3,477)413 (1,826)666 
Other comprehensive income (loss)(3,477)413 (1,826)666 
Total comprehensive income$16,207 $21,632 $38,546 $41,813 
The accompanying notes are an integral part of these consolidated financial statements.
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Table of Contents
MYR GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

PreferredCommon StockAdditional
Paid-In
Accumulated
Other
Comprehensive
RetainedMYR
Group Inc.
Stockholders’
Noncontrolling
(in thousands)StockSharesAmountCapitalIncome (Loss)EarningsEquityInterestTotal
Balance at December 31, 2020$ 16,734 $167 $158,618 $23 $270,480 $429,288 $4 $429,292 
Net income— — — — — 19,928 19,928 — 19,928 
Stock issued under compensation plans, net— 123 1 109 — — 110 — 110 
Stock-based compensation expense— — — 1,487 — — 1,487 — 1,487 
Shares repurchased related to tax withholding for stock-based compensation— (41)— (2,231)— (387)(2,618)— (2,618)
Other comprehensive income— — — — 253 — 253 — 253 
Stock issued - other— 1 — 12 — — 12 — 12 
Balance at March 31, 2021 16,817 168 157,995 276 290,021 448,460 4 448,464 
Net income— — — — — 21,219 21,219 — 21,219 
Stock issued under compensation plans, net— 60 1 318 — — 319 — 319 
Stock-based compensation expense — — — 1,948 — — 1,948 — 1,948 
Shares repurchased related to tax withholding for stock-based compensation— (10)(1)(637)— (96)(734)— (734)
Other comprehensive income— — — — 413 — 413 — 413 
Balance at June 30, 2021$ 16,867 $168 $159,624 $689 $311,144 $471,625 $4 $471,629 
Balance at December 31, 2021$ 16,871 $168 $163,754 $173 $355,007 $519,102 $ $519,102 
Net income— — — — — 20,688 20,688 — 20,688 
Stock issued under compensation plans, net— 193 2 2 — — 4 — 4 
Stock-based compensation expense— — — 1,624 — — 1,624 — 1,624 
Shares repurchased related to tax withholding for stock-based compensation— (69)— (6,124)— (667)(6,791)— (6,791)
Other comprehensive income— — — — 1,651 — 1,651 — 1,651 
Balance at March 31, 2022 16,995 170 159,256 1,824 375,028 536,278  536,278 
Net income— — — — — 19,684 19,684 — 19,684 
Stock issued under compensation plans, net— 9 — — — — — — — 
Stock-based compensation expense — — — 2,064 — — 2,064 — 2,064 
Settlement of stock repurchase program— (280)(3)(2,629)— (20,835)(23,467)— (23,467)
Other comprehensive loss— — — — (3,477)— (3,477)— (3,477)
Balance at June 30, 2022$ 16,724 $167 $158,691 $(1,653)$373,877 $531,082 $ $531,082 
The accompanying notes are an integral part of these consolidated financial statements.
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MYR GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
June 30,
(in thousands)20222021
Cash flows from operating activities:
Net income$40,372 $41,147 
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization of property and equipment24,043 22,172 
Amortization of intangible assets6,020 1,156 
Stock-based compensation expense3,688 3,435 
Deferred income taxes(1)481 
Gain on sale of property and equipment(1,400)(1,794)
Other non-cash items581 1,370 
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable, net(20,457)(10,098)
Contract assets, net(43,413)(10,855)
Receivable for insurance claims in excess of deductibles12,504 304 
Other assets(4,939)10,389 
Accounts payable42,763 47,772 
Contract liabilities33,619 (21,433)
Accrued self-insurance(11,861)1,869 
Other liabilities(21,400)2,647 
Net cash flows provided by operating activities60,119 88,562 
Cash flows from investing activities:
Proceeds from sale of property and equipment1,237 1,637 
Cash paid for acquired business, net of cash acquired(110,576) 
Purchases of property and equipment(30,421)(20,997)
Net cash flows used in investing activities(139,760)(19,360)
Cash flows from financing activities:
Net borrowings under revolving lines of credit51,395  
Payment of principal obligations under equipment notes(516)(20,635)
Payment of principal obligations under finance leases(880)(376)
Proceeds from exercise of stock options4 429 
Repurchase of common stock(23,467) 
Payments related to tax withholding for stock-based compensation(6,791)(3,352)
Other financing activities607 12 
Net cash flows provided by (used in) financing activities20,352 (23,922)
Effect of exchange rate changes on cash(746)374 
Net increase (decrease) in cash and cash equivalents(60,035)45,654 
Cash and cash equivalents:
Beginning of period82,092 22,668 
End of period$22,057 $68,322 
The accompanying notes are an integral part of these consolidated financial statements.
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MYR GROUP INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization, Business and Basis of Presentation
Organization and Business
MYR Group Inc. (the “Company”) is a holding company of specialty electrical construction service providers and is currently conducting operations through wholly owned subsidiaries. The Company performs construction services in two business segments: Transmission and Distribution (“T&D”), and Commercial and Industrial (“C&I”). T&D customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. T&D provides a broad range of services on electric transmission, distribution networks, substation facilities and clean energy projects include design, engineering, procurement, construction, upgrade, maintenance and repair services. C&I customers include general contractors, commercial and industrial facility owners, government agencies and developers. C&I provides a broad range of services, which include the design, installation, maintenance and repair of commercial and industrial wiring. Typical C&I contracts cover electrical contracting services for airports, hospitals, data centers, hotels, stadiums, commercial and industrial facilities, clean energy projects, manufacturing plants, processing facilities, water/waste-water treatment facilities, mining facilities, intelligent transportation systems, roadway lighting and signalization.
Basis of Presentation
Interim Consolidated Financial Information
The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The Company believes that the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations, comprehensive income, stockholders’ equity and cash flows with respect to the interim consolidated financial statements, have been included. Certain reclassifications were made to prior year amounts to conform to the current year presentation. The consolidated balance sheet as of December 31, 2021 has been derived from the audited financial statements as of that date. The results of operations and comprehensive income are not necessarily indicative of the results for the full year or the results for any future periods. These financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on February 23, 2022 (the "2021 Annual Report").
Joint Ventures and Noncontrolling Interests
The Company accounts for investments in joint ventures using the proportionate consolidation method for income statement reporting and under the equity method for balance sheet reporting, unless the Company has a controlling interest causing the joint venture to be consolidated with equity owned by other joint venture partners recorded as noncontrolling interests. Under the proportionate consolidation method, joint venture activity is allocated to the appropriate line items found on the consolidated statements of operations in proportion to the percentage of participation the Company has in the joint venture. Under the equity method the net investment in joint ventures is stated as a single item on the Company’s consolidated balance sheets. If an investment in a joint venture contains a recourse or unfunded commitments to provide additional equity, distributions and/or losses in excess of the investment, a liability is recorded in other current liabilities on the Company’s consolidated balance sheets.
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For joint ventures in which the Company does not have a controlling interest, the Company’s share of any profits and assets and its share of any losses and liabilities are recognized based on the Company’s stated percentage partnership interest in the joint venture, and are normally recorded by the Company one month in arrears. The investments in joint ventures are recorded at cost and the carrying amounts are adjusted to recognize the Company’s proportionate share of cumulative income or loss, additional contributions made and dividends and capital distributions received. The Company records the effect of any impairment or any other-than-temporary decrease in the value of the joint venture investment as incurred, which may or may not be one month in arrears, depending on when the Company obtains the joint venture activity information. Additionally, the Company continually assesses the fair value of its investment in unconsolidated joint ventures despite using information that is one month in arrears for regular reporting purposes. The Company includes only its percentage ownership of each joint venture in its backlog.
Foreign Currency
The functional currency for the Company’s Canadian operations is the Canadian dollar. Assets and liabilities denominated in Canadian dollars are translated into U.S. dollars at the end-of-period exchange rate. Revenues and expenses are translated using average exchange rates for the periods reported. Equity accounts are translated at historical rates. Cumulative translation adjustments are included as a separate component of accumulated other comprehensive income in shareholders’ equity. Foreign currency transaction gains and losses, arising primarily from changes in exchange rates on short-term monetary assets and liabilities, and ineffective long-term monetary assets and liabilities are recorded in the “other income (expense), net” line on the Company’s consolidated statements of operations. Foreign currency losses, recorded in other income, net, for the six months ended June 30, 2022 were not significant. Foreign currency losses, recorded in other income, net, for the six months ended June 30, 2021 were $0.1 million. Effective foreign currency transaction gains and losses, arising primarily from long-term monetary assets and liabilities, are recorded in the foreign currency translation adjustment line on the Company’s consolidated statements of comprehensive income.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Actual results could differ from those estimates.
The most significant estimates are related to estimates of costs to complete contracts, pending change orders and claims, shared savings, insurance reserves, income tax reserves, estimates surrounding stock-based compensation, acquisition-related contingent earn-out consideration liabilities, the recoverability of goodwill and intangibles and allowance for doubtful accounts. The Company estimates a cost accrual every quarter that represents costs incurred but not invoiced for services performed or goods delivered during the period, and estimates revenue from the contract cost portion of these accruals based on current gross margin rates to be consistent with its cost method of revenue recognition.
As of June 30, 2022 and 2021, the Company had recognized revenues of $12.5 million and $6.0 million, respectively, related to large change orders and/or claims that had been included as contract price adjustments on certain contracts, some of which are multi-year projects. These change orders and/or claims are in the process of being negotiated in the normal course of business, and a portion of these recognized revenues had been included in multiple periods.
The cost-to-cost method of accounting requires the Company to make estimates about the expected revenue and gross profit on each of its contracts in process. During the three months ended June 30, 2022, changes in estimates pertaining to certain projects decreased consolidated gross margin by 0.1%, which resulted in decreases in operating income of $0.5 million, net income of $0.3 million and diluted earnings per common share of $0.02. During the six months ended June 30, 2022, changes in estimates pertaining to certain projects increased consolidated gross margin by 0.3%, which resulted in increases in operating income of $3.7 million, net income of $2.5 million and diluted earnings per common share of $0.15.
During the three months ended June 30, 2021, changes in estimates pertaining to certain projects increased consolidated gross margin by 0.8%, which resulted in increases in operating income of $5.1 million, net income of $3.6 million and diluted earnings per common share of $0.21. During the six months ended June 30, 2021, changes in estimates pertaining to certain projects increased consolidated gross margin by 0.3%, which resulted in increases in operating income of $3.9 million, net income of $2.7 million and diluted earnings per common share of $0.16.
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Recent Accounting Pronouncements
Changes to U.S. GAAP are typically established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs. The Company, based on its assessment, determined that any recently issued or proposed ASUs not listed below are either not applicable to the Company or adoption will have minimal impact on its consolidated financial statements.
Recently Issued Accounting Pronouncements
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. Under the new guidance the acquirer is required to recognize contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if the acquirer had originated the contracts. The update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in an interim period, for any period for which financial statements have not yet been issued. However, adoption in an interim period other than the first fiscal quarter requires an entity to apply the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the new guidance is adopted. The Company is currently evaluating the adoption date and impact, if any, this update will have on its financial position and results of operations.
2. Acquisition
Powerline Plus Ltd
On January 4, 2022, the Company acquired all issued and outstanding shares of capital stock of Powerline Plus Ltd. and its affiliate PLP Redimix Ltd. (collectively, the “Powerline Plus Companies"), a full-service electrical distribution construction company based in Toronto, Ontario. Consideration paid, funded through a combination of cash on hand and borrowings under the Facility (as defined below), was $110.6 million, net of cash acquired, and is subject to working capital and net asset adjustments. Additionally, the acquisition includes contingent earn-out consideration that may be payable if the Powerline Plus Companies achieve certain performance targets over a three-year post-acquisition period. As of the acquisition date, the fair value of the contingent earn-out consideration was $10.6 million. The future payout of the contingent earn-out consideration, if any, is unlimited and could be significantly higher than the acquisition date fair value. If the minimum thresholds of the performance targets are achieved the contingent earn-out consideration payment will be approximately $17.7 million. There were no changes in contingent earn-out consideration, subsequent to the acquisition, for the three and six months ended June 30, 2022. The results of the Powerline Plus Companies is included in the Company’s consolidated financial statements beginning on the transaction date. Approximately $0.2 million of acquisition-related costs associated with this acquisition were expensed by the Company during the three and six months ended June 30, 2022.
The purchase agreement also includes contingent consideration provisions for down-side margin guarantee adjustments based upon certain contract performance subsequent to the acquisition. The contracts were valued at fair value at the acquisition date, causing no margin guarantee estimate or adjustments for fair value. Unfavorable changes in contract estimates, such as modified costs to complete or change order recognition, will result in changes to these margin guarantee estimates. Changes in margin guarantee adjustments on contracts, subsequent to the acquisition, were recorded in other income and were not significant for the three and six months ended June 30, 2022. Future margin guarantee adjustments, if any, are expected to be recognized through 2022 and possibly in early 2023.
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The following table summarizes the allocation of the opening balance sheet as of the date of the Powerline Plus Companies acquisition through June 30, 2022:
(in thousands)(as of acquisition date) January 4, 2022Measurement
Period
Adjustments
Acquisition Allocation June 30, 2022
Cash paid$114,429 $ $114,429 
Contingent consideration - fair value at acquisition date10,608  10,608 
Preliminary estimated net asset adjustments563 (564)(1)
Total consideration, net of estimated net asset adjustments125,600 (564)125,036 
Less: Acquired cash(3,853) (3,853)
Total consideration less cash acquired, net of estimated net asset adjustments$121,747 $(564)$121,183 
Cash and cash equivalents$3,853 $ $3,853 
Accounts receivable, net12,131 (52)12,079 
Contract assets, net12,443 148 12,591 
Refundable income taxes394 280 674 
Prepaid expenses and other current assets1,233 (121)1,112 
Property and equipment10,366  10,366 
Operating lease right-of-use assets6,631  6,631 
Accounts payable(8,095)(466)(8,561)
Contract liabilities(1,597)(95)(1,692)
Accrued income taxes(686)(37)(723)
Current portion of operating lease obligations(1,224) (1,224)
Current portion of finance lease obligations(1,492) (1,492)
Deferred income tax liabilities(672)(221)(893)
Operating lease obligations, net of current maturities(4,897) (4,897)
Finance lease obligations, net of current maturities(3,243) (3,243)
Net identifiable assets and liabilities25,145 (564)24,581 
Unallocated intangible assets56,650 791 57,441 
Total acquired assets and liabilities81,795 227 82,022 
Goodwill$43,805 $(791)$43,014 
The Company has developed preliminary estimates of fair value of the assets acquired and liabilities assumed for the purposes of allocating the purchase price. During the three months ended June 30, 2022, the Company recorded certain measurement period adjustments related to various working capital and deferred tax accounts determined during our purchase price allocation procedures. The goodwill to be recognized, which represents the excess of the purchase price over the net amount of the fair values assigned to assets acquired and liabilities assumed, is primarily attributable to the value of an assembled workforce and other non-identifiable assets. No synergies were anticipated in the acquisition as the Powerline Plus Companies will function as an individual business within the Company’s operating structure. Further adjustments are expected to the allocation as third party valuations of contingent earn-out consideration, acquired right-of-use assets and lease liabilities and identifiable intangible assets, including backlog, customer relationships, trade name and off-market component, are determined, and as net asset adjustments are finalized. Additionally, the Company is currently performing an analysis of the purchase price allocation and will make appropriate adjustments based on the analysis. A portion of the goodwill and identifiable intangible assets are expected to be tax deductible per applicable Canadian Revenue Authority regulations.
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3. 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 $0.5 million as of June 30, 2022 and $0.4 million as of December 31, 2021.
Contract assets consisted of the following:
(in thousands)June 30,
2022
December 31,
2021
Change
Unbilled revenue, net$165,839 $134,187 $31,652 
Contract retainages, net114,879 90,888 23,991 
Contract assets, net$280,718 $225,075 $55,643 
The Company’s consolidated balance sheets present contract liabilities which contain deferred revenue and an accrual for contracts in a loss provision.
Contract liabilities consisted of the following:
(in thousands)June 30,
2022
December 31,
2021
Change
Deferred revenue$200,929 $165,699 $35,230 
Accrued loss provision2,234 2,232 2 
Contract liabilities$203,163 $167,931 $35,232 
The following table provides information about contract assets and contract liabilities from contracts with customers:
(in thousands)June 30,
2022
December 31,
2021
Change
Contract assets, net$280,718 $225,075 $55,643 
Contract liabilities(203,163)(167,931)(35,232)
Net contract assets (liabilities)$77,555 $57,144 $20,411 
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 $25.8 million and $58.6 million for the three and six months ended June 30, 2022, respectively. The amounts of revenue recognized in the period that were included in the opening contract liability balances were $22.3 million and $73.9 million for the three and six months ended June 30, 2021, respectively.
The net asset position for contracts in process consisted of the following:
(in thousands)June 30,
2022
December 31,
2021
Costs and estimated earnings on uncompleted contracts$4,492,937 $4,130,621 
Less: billings to date4,528,027 4,162,133 
$(35,090)$(31,512)
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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,
2022
December 31,
2021
Unbilled revenue $165,839 $134,187 
Deferred revenue (200,929)(165,699)
$(35,090)$(31,512)

4. Lease Obligations
From time-to-time, the Company enters into non-cancelable leases for some of our facility, vehicle and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. The Company’s leases have remaining terms ranging from one to seven years, some of which may include options to extend the leases for up to five years, and some of which may include options to terminate the leases within one year. Currently, all the Company’s leases contain fixed payment terms. The Company may decide to cancel or terminate a lease before the end of its term, in which case we are typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of the Company's month-to-month leases are cancelable, by the Company or the lessor, at any time and are not included in our right-of-use asset or liability. At June 30, 2022, the Company had several leases with residual value guarantees. Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements. The Company may exercise some of these purchase options when the need for equipment is on-going and the purchase option price is attractive. Leases are accounted for as operating or finance leases, depending on the terms of the lease.
The following is a summary of the lease-related assets and liabilities recorded:
June 30,
2022
December 31,
2021
(in thousands)Classification on the Consolidated Balance Sheet
Assets
Operating lease right-of-use assetsOperating lease right-of-use assets$32,675 $20,971 
Finance lease right-of-use assetsProperty and equipment, net of accumulated depreciation4,965  
Total right-of-use lease assets$37,640 $20,971 
Liabilities
Current
Operating lease obligationsCurrent portion of operating lease obligations$9,405 $7,765 
Finance lease obligationsCurrent portion of finance lease obligations1,318  
Total current obligations10,723 7,765 
Non-current
Operating lease obligationsOperating lease obligations, net of current maturities23,272 13,230 
Finance lease obligationsFinance lease obligations, net of current maturities3,026  
Total non-current obligations26,298 13,230 
Total lease obligations$37,021 $20,995 
The following is a summary of the lease terms and discount rates:
June 30,
2022
December 31,
2021
Weighted-average remaining lease term - finance leases2.2 years0.0 years
Weighted-average remaining lease term - operating leases3.9 years2.9 years
Weighted-average discount rate - finance leases2.5 % %
Weighted-average discount rate - operating leases3.9 %3.9 %
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The following is a summary of certain information related to the lease costs for finance and operating leases:
(in thousands)Three months ended
June 30,
Six months ended
June 30,
2022202120222021
Lease cost:
Finance lease cost:
Amortization of right-of-use assets$218 $186 $656 $375 
Interest on lease liabilities47 1 75 3 
Operating lease cost3,265 2,469 6,388 4,955 
Variable lease costs102 78 211 156 
Total lease cost$3,632 $2,734 $7,330 $5,489 
The following is a summary of other information and supplemental cash flow information related to finance and operating leases:
Six months ended June 30,
(in thousands)20222021
Other information: