Receivables, net



(in thousands)	June 30, 2012		December 31, 2011		June 30, 2011
Construction contracts:
Completed and in progress	$	146,509	$	122,987	$	155,807
Retentions	66,265		77,038		79,598
Total construction contracts	212,774		200,025		235,405
Construction material sales	50,205		30,356		39,074
Other	12,624		24,337		12,605
Total gross receivables	275,603		254,718		287,084
Less: allowance for doubtful accounts	3,041		2,880		3,140
Total net receivables	$	272,562	$	251,838	$	283,944

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. Included in other receivables at June 30, 2012, December 31, 2011 and June 30, 2011 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 June 30, 2012, December 31, 2011 and June 30, 2011, long-term notes receivable outstanding were $1.9 million, $2.0 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. The balances in each category were as follows:



(in thousands)	June 30, 2012		December 31, 2011		June 30, 2011
Escrow	$	42,421	$	43,378	$	38,366
Non-escrow	23,844		33,660		41,232
Total retention receivables	$	66,265	$	77,038	$	79,598

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)	June 30, 2012		December 31, 2011		June 30, 2011
Federal	$	2,464	$	2,811	$	3,421
State	4,626		5,453		7,928
Local	9,944		14,708		20,282
Private	6,810		10,688		9,601
Total	$	23,844	$	33,660	$	41,232

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):



June 30, 2012	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	1,746	$	—	$	718	$	2,464
State	3,552		208		866		4,626
Local	7,330		1,326		1,288		9,944
Private	6,363		92		355		6,810
Total	$	18,991	$	1,626	$	3,227	$	23,844



December 31, 2011	Current		1 - 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



June 30, 2011	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	3,025	$	—	$	396	$	3,421
State	6,951		29		948		7,928
Local	16,294		1,432		2,556		20,282
Private	9,028		222		351		9,601
Total	$	35,298	$	1,683	$	4,251	$	41,232

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 June 30, 2012, December 31, 2011 and June 30, 2011, our allowance for doubtful accounts contained no material provision related to non-escrow retention receivables as we determined there were no significant collectibility issues.