Receivables (in thousands)



December 31,	2011		2010
Construction contracts:
Completed and in progress	$	122,987	$	121,664
Retentions	77,038		96,333
Total construction contracts	200,025		217,997
Construction material sales	30,356		17,674
Other	24,337		11,612
Total gross receivables	254,718		247,283
Less: allowance for doubtful accounts	2,880		3,297
Total net receivables	$	251,838	$	243,986

Receivables include amounts billed and billable for public and private contracts and do not bear interest. The balances billed but not paid by customers pursuant to retainage provisions in construction contracts generally become due upon completion and acceptance of the contract by the owners. Retainage amounts of $77.0 million at December 31, 2011 are expected to be collected as follows: $51.7 million in 2012, $12.3 million in 2013 and $13.0 million in 2014. Included in other receivables at December 31, 2011 and December 31, 2010 were items such as notes receivable, interest receivable, fuel tax refunds and income tax refunds.

Revenue earned by Construction and Large Project Construction from federal, state and local government agencies was approximately $1.7 billion (83.8% of our total revenue) in 2011, $1.5 billion (83.3% of our total revenue) in 2010 and $1.7 billion (85.6% of our total revenue) in 2009. Revenue from the California Department of Transportation represented $264.9 million (13.2% of our total revenue) in 2011, $175.0 million (9.9% of our total revenue) in 2010 and $234.0 million (11.9% of our total revenue) in 2009. Revenue from the Maryland State Highway Administration represented $52.5 million (2.6% of our total revenue) in 2011, $181.0 million (10.3% of our total revenue) in 2010 and $119.8 million (6.1% of our total revenue) in 2009. At December 31, 2011 and 2010, no customer had a receivable balance in excess of 10% of our total net receivables.

Financing receivables consisted of long-term notes receivable and retentions receivable. As of December 31, 2011 and 2010, long-term notes receivable outstanding were $2.0 million and $1.8 million, respectively, and primarily related to loans made to employees and were included in other noncurrent assets on our 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):



December 31,	2011		2010
Escrow	$	43,378	$	43,841
Non-escrow	33,660		52,492
Total retention receivables	$	77,038	$	96,333

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 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):



December 31,	2011		2010
Federal	$	2,811	$	3,080
State	5,453		9,507
Local	14,708		29,451
Private	10,688		10,454
Total	$	33,660	$	52,492

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):



December 31, 2011	Current		0 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,462	$	326	$	23	$	2,811
State	2,751		860		1,842		5,453
Local	12,313		1,326		1,069		14,708
Private	9,599		765		324		10,688
Total	$	27,125	$	3,277	$	3,258	$	33,660



December 31, 2010
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

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 December 31, 2011 and 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.