| 8. | Construction Contracts |
Construction contract costs and estimated earnings in excess of billings represent reimbursable costs and amounts earned under contracts in progress as of the balance sheet date. Such amounts become billable according to contract terms, which usually consider the passage of time, achievement of certain milestones or completion of the project. Billings of $16.2 million and $78.3 million are netted against construction contract costs and estimated earnings as of December 31, 2013 and 2012, respectively. The Company expects to bill and collect substantially all construction contract costs incurred as of December 31, 2013 during the year ending December 31, 2014.
Armada Hoffler defers precontract costs when such costs are directly associated with specific anticipated contracts and their recovery is probable. Precontract costs of $0.8 million and $0.6 million were deferred as of December 31, 2013 and 2012, respectively.
Billings in excess of construction contract costs and estimated earnings represent billings or collections on contracts made in advance of revenue recognized.
Construction receivables and payables include retentions—amounts that are generally withheld until the completion of the contract or the satisfaction of certain restrictive conditions such as fulfillment guarantees. As of December 31, 2013 and 2012, construction receivables included retentions of $3.2 million and $3.0 million, respectively. The Company expects to collect substantially all construction receivables as of December 31, 2013 during the year ending December 31, 2014. As of December 31, 2013 and 2012, construction payables included retentions of $2.1 million and $2.5 million, respectively. The Company expects to pay substantially all construction payables as of December 31, 2013 during the year ending December 31, 2014.
Armada Hoffler’s net position on uncompleted construction contracts comprised the following as of December 31, 2013 and 2012 (in thousands):
| December 31, | ||||||||
| 2013 | 2012 | |||||||
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Costs incurred on uncompleted construction contracts |
$ | 97,372 | $ | 542,994 | ||||
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Estimated earnings |
4,584 | 22,526 | ||||||
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Billings |
(102,319 | ) | (568,550 | ) | ||||
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Net position |
$ | (363 | ) | $ | (3,030 | ) | ||
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| December 31, | ||||||||
| 2013 | 2012 | |||||||
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Construction contract costs and estimated earnings in excess of billings |
$ | 1,178 | $ | 1,206 | ||||
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Billings in excess of construction contract costs and estimated earnings |
(1,541 | ) | (4,236 | ) | ||||
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Net position |
$ | (363 | ) | $ | (3,030 | ) | ||
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The Company expects to complete all uncompleted contracts as of December 31, 2013 during the years ending December 31, 2014 and 2015.