Revisions in Estimates

Our profit recognition related to construction contracts is based on estimates of costs to complete each project. These estimates can vary in the normal course of business as projects progress and uncertainties are resolved. We do not recognize revenue on contract change orders or claims until we have a signed agreement; however, we do recognize costs as incurred and revisions to estimated total costs as soon as the obligation to perform is determined. Approved change orders and claims, as well as changes in related estimates of costs to complete, are considered revisions in estimates. We use the cumulative catch-up method applicable to construction contract accounting to account for revisions in estimates. Under this option, revisions in estimates are accounted for in their entirety in the period of change. As of June 30, 2011, we had no revisions in estimates that are reasonably certain to impact future periods.

Construction

The net change in project profitability from revisions in estimates, both increases and decreases, that individually had an impact of $1.0 million or more on gross profit were net increases of $1.4 million and $2.9 million for the three and six months ended June 30, 2011, respectively. There were no revisions in estimates, either increases or decreases, that individually had an impact of $1.0 million or more on gross profit during the three months ended June 30, 2010. The net change in project profitability from revisions in estimates, both increases and decreases, that individually had an impact of $1.0 million or more on gross profit was a net decrease of $1.6 million for the six months ended June 30, 2010. The projects are summarized as follows:

Increases



	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in millions)	2011		2010		2011		2010
Number of projects with upward estimate changes	1		—		2		—
Range of increase in gross profit from each project, net	$	1.4	$	—	$ 1.4 - 1.5		$	—
Increase on project profitability	$	1.4	$	—	$	2.9	$	—

The increases during the three and six months ended June 30, 2011 were due to the settlement of outstanding cost issues and owner directed scope changes.

Decreases



	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in millions)	2011		2010		2011		2010
Number of projects with downward estimate changes	—		—		—		1
Range of reduction in gross profit from each project, net	$	—	$	—	$	—	$	1.6
Decrease on project profitability	$	—	$	—	$	—	$	1.6

The decrease during the six months ended June 30, 2010 was due to rework costs to satisfy contract specifications.

Large Project Construction

The net changes in project profitability from revisions in estimates, both increases and decreases, that individually had an impact of $1.0 million or more on gross profit was a net decrease of $0.3 million and a net increase of $5.2 million for the three and six months ended June 30, 2011, respectively. The net changes for the three and six months ended June 30, 2010 were net increases of $6.3 million and $5.9 million, respectively. Amounts attributable to noncontrolling interests were $0.4 million of the net increase for the six months ended June 30, 2011 and $0.5 million and $1.9 million of the net increases for the three and six months ended June 30, 2010, respectively. There were no amounts attributable to noncontrolling interests for the three months ended June 30, 2011. The projects are summarized as follows:

Increases



	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in millions)	2011		2010		2011		2010
Number of projects with upward estimate changes	1		3		4		4
Range of increase in gross profit from each project, net	$	1.3	$ 1.1 - 4.0		$ 1.0 - 4.2		$ 1.0 - 4.2
Increase on project profitability	$	1.3	$	6.3	$	11.0	$	10.6

The increases during the three and six months ended June 30, 2011 were due to construction costs lower than anticipated and the resolution of a project claim. The increases during the three and six months ended June 30, 2010 were due to settlement of design issues with a subcontractor, construction costs lower than anticipated and improved productivity.

Decreases



	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in millions)	2011		2010		2011		2010
Number of projects with downward estimate changes	1		—		2		2
Range of reduction in gross profit from each project, net	$	1.6	$	—	$ 2.6 - 3.2		$ 1.8 - 2.9
Decrease on project profitability	$	1.6	$	—	$	5.8	$	4.7

The downward estimate changes during the three and six months ended June 30, 2011 were due to lower productivity than originally anticipated. The decreases during the six months ended June 30, 2010 were due to owner directed scope changes as well as site conditions that were different than anticipated.

On a large highway project in mountainous terrain in Oregon, unanticipated ground movement was observed at several hillsides beginning in 2010. In some locations, the ground movements have caused damage to completed portions of bridge structures. Although work on the project is continuing, the corrective work required to complete the project has not yet been determined. The Company and the project owner (Oregon Department of Transportation) are engaged in the contractual dispute resolution process to determine the parties’ responsibilities for design issues and which party bears the financial responsibility for the corrective work. At this time, the Company cannot predict the timing of the resolution or reasonably estimate the impact, if any, on the projected financial results for this project. If the required corrective work is determined to be substantial, and the Company is determined to bear the financial responsibility for the corrective work, the Company’s results of operations and cash flows for one or more future periods could be materially and adversely affected. Due to the uncertainties described above, no revisions in estimates were made during the three and six months ended June 30, 2011 related to this project.