Company: EME
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000105634-25-000015
Chunk: 79

Company: EMCOR Group, Inc.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7
Chunk 79
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. We recognize revenue for such variable consideration when it is probable, in our judgment, that a significant future reversal in the amount of cumulative revenue recognized under the contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company estimates the amount of variable consideration to be included in the transaction price utilizing one of two prescribed methods, depending on which method better predicts the amount of consideration to which the entity will be entitled. 

Due to uncertainties inherent in the estimation process, as well as the significant judgment involved in determining variable consideration, it is possible that estimates of costs to complete a performance obligation, and/or our estimates of transaction prices, will be revised in the near term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, or changes in the estimate of transaction prices, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. 

Based on an evaluation of individual projects that were substantially complete in prior periods but had revisions to total estimated costs or anticipated contract value (inclusive of the settlement of previously outstanding change orders and claims) that resulted in an increase to profitability in excess of $1.0 million, we recognized revenue during the years ended December 31, 2024 and 2023, as summarized in the following table (in thousands):

 20242023United States electrical construction and facilities services$14,006 $3,350 United States mechanical construction and facilities services10,551 13,114 Total impact$24,557 $16,464 

There were no significant amounts of revenue recognized during the year ended December 31, 2022 related to performance obligations satisfied in prior periods.

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Included in our results for the year ended December 31, 2024 was $12.3 million of gross profit recognized on two contracts, which are currently in process, as a result of favorable developments on certain claims. Of this amount, $8.4 million was reported within our United States electrical construction and facilities services segment and $3.9 million was reported within our United States mechanical construction and facilities services segment.

Based on an evaluation of individual projects that had revisions to total estimated costs or anticipated contract value that resulted in a reduction of profitability in excess of $1.0 million, our operating results were negatively impacted during the years ended December 31, 2024, 2023, and