Receivables (in thousands)



December 31,	2012		2011
Construction contracts:
Completed and in progress	$	195,244	$	122,987
Retentions	93,800		77,038
Total construction contracts	289,044		200,025
Construction material sales	26,918		30,356
Other	12,316		24,337
Total gross receivables	328,278		254,718
Less: allowance for doubtful accounts	2,749		2,880
Total net receivables	$	325,529	$	251,838

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 $93.8 million at December 31, 2012 are expected to be collected as follows: $71.0 million in 2013, $15.5 million in 2014 and $7.3 million in 2015. Included in other receivables at December 31, 2012 and December 31, 2011 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 (80.6% of our total revenue) in 2012, $1.7 billion (83.8% of our total revenue) in 2011 and $1.5 billion (83.3% of our total revenue) in 2010. During the years ended December 31, 2012 and 2011, our largest volume customer was the California Department of Transportation (“Caltrans”). Revenue from Caltrans represented $272.9 million (13.1% of our total revenue) in 2012, $264.9 million (13.2% of our total revenue) in 2011 and $175.0 million (9.9% of our total revenue) in 2010. Revenue from the Maryland State Highway Administration represented $181.0 million (10.3% of our total revenue) in 2010. At December 31, 2012 and 2011, 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, 2012 and 2011, long-term notes receivable outstanding were $2.0 million . The balance primarily related to loans made to employees and was 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,	2012		2011
Escrow	$	41,494	$	43,378
Non-escrow	52,306		33,660
Total retention receivables	$	93,800	$	77,038

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,	2012		2011
Federal	$	3,234	$	2,811
State	2,971		5,453
Local	31,559		14,708
Private	14,542		10,688
Total	$	52,306	$	33,660

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, 2012	Current		0 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	3,116	$	72	$	46	$	3,234
State	2,148		502		321		2,971
Local	25,743		1,082		4,734		31,559
Private	13,310		716		516		14,542
Total	$	44,317	$	2,372	$	5,617	$	52,306



December 31, 2011
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

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, 2012 and 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.