Receivables, Net



(in thousands)	September 30, 2011		December 31, 2010		September 30, 2010
Construction contracts:
Completed and in progress	$	223,292	$	121,664	$	226,192
Retentions	74,795		96,333		92,614
Total construction contracts	298,087		217,997		318,806
Construction material sales	52,157		17,674		51,114
Other	10,177		11,612		9,325
Total gross receivables	360,421		247,283		379,245
Less: allowance for doubtful accounts	2,614		3,297		3,331
Total net receivables	$	357,807	$	243,986	$	375,914

Included in other receivables at September 30, 2011, December 31, 2010 and September 30, 2010 were items such as notes receivable, interest receivable, fuel tax refunds and income tax refunds. No such receivables individually exceeded 10% of total net receivables at any of these dates.

Financing receivables consisted of long-term notes receivable and retentions receivable. As of September 30, 2011, December 31, 2010 and September 30, 2010, long-term notes receivable outstanding were $2.1 million, $1.8 million and $2.1 million, respectively, and primarily related to loans made to employees and were included in other noncurrent assets in our condensed consolidated balance sheets.

We segregate our retention receivables into two categories: escrow and non-escrow and the balances in each category were as follows:



(in thousands)	September 30, 2011		December 31, 2010		September 30, 2010
Escrow	$	38,517	$	43,841	$	38,312
Non-escrow	36,278		52,492		54,302
Total retention receivables	$	74,795	$	96,333	$	92,614

The escrow receivables include amounts due to Granite which have been deposited into an escrow account and bear interest. Typically, escrow retention receivables are held until work on a project is complete and has been accepted by the owner who then releases those funds, along with accrued interest, to us. There is minimal risk of not collecting on these amounts.

Non-escrow retention receivables are amounts that the project owner has contractually withheld that will be paid upon owner acceptance of contract completion. We evaluate our non-escrow retention receivables for collectability using certain customer information that includes the following:


•	Federal - includes federal agencies such as the Bureau of Reclamation, the Army Corp of Engineers, and the Bureau of Indian Affairs. The obligations of these agencies are backed by the federal government. Consequently there is minimal risk of not collecting the amounts we are entitled to receive.


•	State - primarily state departments of transportation. The risk of not collecting on these accounts is small; however, we have experienced occasional delays in payment as states have struggled with budget issues.


•	Local - these customers include local agencies such as cities, counties and other local municipal agencies. The risk of not collecting on these accounts is small; however, we have experienced occasional delays in payment as some local agencies have struggled to deal with budget issues.

•

Private - includes individuals, developers and corporations. The majority of our collection risk is associated with these customers. We perform ongoing credit evaluations of our customers and generally do not require collateral, although the law provides us certain remedies, including, but not limited to, the ability to file mechanics’ liens on real property improved for private customers in the event of non-payment by such customers.

The following table summarizes the amount of our non-escrow retention receivables within each category:



(in thousands)	September 30, 2011		December 31, 2010		September 30, 2010
Federal	$	2,148	$	3,080	$	2,175
State	6,046		9,507		10,792
Local	17,666		29,451		30,409
Private	10,418		10,454		10,926
Total	$	36,278	$	52,492	$	54,302

We regularly review our accounts receivable, including past due amounts, to determine their probability of collection. If it is probable that an amount is uncollectible, it is charged to bad debt expense and a corresponding reserve is established in allowance for doubtful accounts. If it is deemed certain that an amount is uncollectible, the amount is written off. Based on contract terms, non-escrow retention receivables are typically due within 60 days of owner acceptance of contract completion. We consider retention amounts beyond 60 days of owner acceptance of contract completion to be past due. The following tables present the aging of our non-escrow retention receivables (in thousands):



September 30, 2011	Current		0 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	1,976	$	77	$	95	$	2,148
State	3,880		1,397		769		6,046
Local	13,801		1,465		2,400		17,666
Private	9,911		108		399		10,418
Total	$	29,568	$	3,047	$	3,663	$	36,278



December 31, 2010	Current		0 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,587	$	174	$	319	$	3,080
State	4,443		628		4,436		9,507
Local	22,641		2,800		4,010		29,451
Private	9,243		175		1,036		10,454
Total	$	38,914	$	3,777	$	9,801	$	52,492



September 30, 2010	Current		0 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	1,921	$	22	$	232	$	2,175
State	9,227		131		1,434		10,792
Local	23,850		2,489		4,070		30,409
Private	9,689		243		994		10,926
Total	$	44,687	$	2,885	$	6,730	$	54,302

Federal, state and local agencies generally require several approvals to release payments, and these approvals often take over 90 days past contractual due dates to obtain. Amounts past due from government agencies primarily result from delays caused by paperwork processing and obtaining proper agency approvals rather than lack of funds. As of September 30, 2011, December 31, 2010 and September 30, 2010, our allowance for doubtful accounts contained no material provision related to non-escrow retention receivables as we determined there were no significant collectibility issues.