Receivables, net



(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Construction contracts:
Completed and in progress	$	228,865	$	122,987	$	223,292
Retentions	68,590		77,038		74,795
Total construction contracts	297,455		200,025		298,087
Construction material sales	59,396		30,356		52,157
Other	9,029		24,337		10,177
Total gross receivables	365,880		254,718		360,421
Less: allowance for doubtful accounts	2,425		2,880		2,614
Total net receivables	$	363,455	$	251,838	$	357,807

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 September 30, 2012, December 31, 2011 and September 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 September 30, 2012, December 31, 2011 and September 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)	September 30, 2012		December 31, 2011		September 30, 2011
Escrow	$	42,297	$	43,378	$	38,517
Non-escrow	26,293		33,660		36,278
Total retention receivables	$	68,590	$	77,038	$	74,795

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, 2012		December 31, 2011		September 30, 2011
Federal	$	2,569	$	2,811	$	2,148
State	3,595		5,453		6,046
Local	12,003		14,708		17,666
Private	8,126		10,688		10,418
Total	$	26,293	$	33,660	$	36,278

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, 2012	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,012	$	—	$	557	$	2,569
State	3,177		239		179		3,595
Local	11,141		555		307		12,003
Private	7,495		321		310		8,126
Total	$	23,825	$	1,115	$	1,353	$	26,293



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



September 30, 2011	Current		1 - 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

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, 2012, December 31, 2011 and September 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.