Variable Interest Entities

9 Months Ended

Sep. 30, 2011

Variable Interest Entities [Abstract]

8.	Variable Interest Entities

We own a 50% interest in Myers of which we are the primary beneficiary and have consolidated Myers into our financial statements. Further see Note 7 above for additional information on the acquisition of this limited partnership.

The partnership agreement requires that Sterling provide a $3 million line of credit to the limited partnership. In addition the partnership is relying on the Company’s surety bonding capacity in order to bid and perform large construction jobs resulting in the Company having joint and several liability for completion of such jobs, and the Company will provide management to the partnership to oversee bidding and management of larger projects. Although the Company will receive 50% of the income from the partnership, it may suffer more than 50% of any losses as a result of its obligation to provide the $3 million line of credit and its obligations under the surety bonds. Because the Company exercises primary control over activities of the partnership and it is exposed to the majority of potential losses of the partnership, the Company consolidated Myers within the Company’s financial statements from August 1, 2011, the date of acquisition.

The condensed financial information of Myers which is reflected in our condensed consolidated balance sheets and statements of operations is as follows (in thousands):

	September 30, 2011
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	533
Contracts receivable, including retainage		4,288
Other current assets		201
Total current assets		5,022
Property and equipment, net		758
Total assets	$	5,780
LIABILITIES
Current liabilities:
Accounts payable	$	3,030
Other current liabilities		1,639
Total current liabilities		4,669
Long-term liabilities:
Other long-term liabilities		--
Total long-term liabilities		--
Total liabilities	$	4,669

	Period from August 1, 2011 (acquisition date) to September 30, 2011
Revenues	$	3,515
Operating income		162
Net income attributable to Sterling common stockholders		52

Other current liabilities shown in the table above includes $500,000 in demand notes payable that are due to one of the noncontrolling interest owners.