Receivables, net



(in thousands)	March 31, 2014		December 31, 2013		March 31, 2013
Construction contracts:
Completed and in progress	$	142,289	$	193,538	$	145,511
Retentions	69,574		73,103		87,451
Total construction contracts	211,863		266,641		232,962
Construction material sales	23,790		36,813		20,782
Other	12,212		12,657		9,486
Total gross receivables	247,865		316,111		263,230
Less: allowance for doubtful accounts	2,584		2,513		2,999
Total net receivables	$	245,281	$	313,598	$	260,231

Receivables include amounts billed and billable to clients for services provided and/or according to contract terms as of the end of the applicable period and do not bear interest. Certain contracts include provisions that permit us to submit invoices in advance of providing services and, to the extent not collected, they are included in receivables. Other contracts include provisions that permit us to submit invoices based on the passage of time, achievement of milestones or completion of the project. To the extent the related costs have not been billed, the contract balance is included in costs and estimated earnings in excess of billings on the condensed consolidated balance sheets. Included in other receivables at March 31, 2014, December 31, 2013 and March 31, 2013 were items such as notes 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 March 31, 2014, December 31, 2013, and March 31, 2013 long-term notes receivable outstanding were $1.2 million, $1.3 million and $1.8 million, respectively. The balance primarily related to loans made to employees and was included in other noncurrent assets in our condensed consolidated balance sheets.

Certain construction contracts include retainage provisions. The balances billed but not paid by customers pursuant to these provisions generally become due upon completion and acceptance of the contract by the owners. No such receivables individually exceeded 10% of total net receivables at any of the presented dates. As of March 31, 2014, the majority of the retentions receivable are expected to be collected within one year.

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



(in thousands)	March 31, 2014		December 31, 2013		March 31, 2013
Escrow	$	25,603	$	25,124	$	39,290
Non-escrow	43,971		47,979		48,161
Total retention receivables	$	69,574	$	73,103	$	87,451

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 are to be paid upon owner acceptance of contract completion. We evaluate our non-escrow retention receivables for collectibility 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 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)	March 31, 2014		December 31, 2013		March 31, 2013
Federal	$	2,108	$	2,878	$	2,926
State	4,275		5,579		2,440
Local	28,587		31,122		30,991
Private	9,001		8,400		11,804
Total	$	43,971	$	47,979	$	48,161

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):



March 31, 2014	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,054	$	36	$	18	$	2,108
State	3,234		438		603		4,275
Local	22,744		836		5,007		28,587
Private	7,309		1,177		515		9,001
Total	$	35,341	$	2,487	$	6,143	$	43,971



December 31, 2013	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,843	$	13	$	22	$	2,878
State	4,919		326		334		5,579
Local	24,705		1,024		5,393		31,122
Private	6,817		287		1,296		8,400
Total	$	39,284	$	1,650	$	7,045	$	47,979



March 31, 2013	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,660	$	156	$	110	$	2,926
State	1,388		397		655		2,440
Local	23,003		2,541		5,447		30,991
Private	9,744		1,609		451		11,804
Total	$	36,795	$	4,703	$	6,663	$	48,161

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/or obtaining proper agency approvals rather than lack of funds, which was the case with the majority of local agencies with past due balances as of March 31, 2014. We generally receive payment within one year of owner acceptance. As of March 31, 2014, December 31, 2013 and March 31, 2013, our allowance for doubtful accounts contained no material provision related to non-escrow retention receivables as we determined there were no significant collectibility issues.