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Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2011
Derivative Financial Instruments [Abstract]  
Derivative Financial Instruments
9.  Derivative Financial Instruments
 
During the quarter ended June 30, 2011, the Company began entering into various fixed rate commodity swap contracts in an effort to manage its exposure to price volatility of diesel fuel.  Historically, fuel prices have been volatile because of supply and demand factors, worldwide political factors and general economic conditions.  The objective of the Company in executing the hedge is to mitigate the fuel price volatility that could adversely affect forecasted cash flows and earnings related to construction contracts.  Swaps are designed so that the Company receives or makes payments based on a differential between fixed and variable prices for off-road ultra-low sulfur diesel (“ULSD”).  The Company has designated its commodity derivative contracts as cash flow hedges designed to achieve more predictable cash flows, as well as to reduce its exposure to price volatility.  While the use of derivative instruments limits the downside risk of adverse price movements, they also limit future benefits from reductions in costs as a result of favorable price movements.
 
All of the Company's outstanding derivative financial instruments are recognized in the balance sheet at their fair values.  All changes in the fair value of outstanding derivatives, except any ineffective portion, are recorded in accumulated other comprehensive income (loss) until earnings are impacted by the hedged transaction.  Amounts in accumulated other comprehensive income (loss) are reclassified to earnings when the related hedged items affect earnings or the anticipated transactions are no longer probable.  All items included in accumulated other comprehensive income (loss) are at the corporate level, and no portion is attributable to noncontrolling interests.
 
At December 31, 2011, pre-tax accumulated other comprehensive income (loss), excluding taxes of $78,000, consisted of unrecognized losses of $223,000 representing the inception to date unrealized change in mark-to-market value of the effective portion of the Company's commodity contracts, designated as cash flow hedges, as of the balance sheet date.  For the year ended December 31, 2011, the Company recognized pre-tax net realized cash settlement losses on commodity contracts of $111,000.
 
At December 31, 2011, the Company had hedged its exposure to the variability in future cash flows from forecasted diesel fuel purchases totaling 790,000 gallons.  The monthly volumes hedged range from 10,000 gallons to 30,000 gallons over the period from January 2012 to December 2013 at fixed prices per gallon ranging from $2.99 to $3.34.
 
The derivative instruments are recorded on the consolidated balance sheet at fair value and include $18,000 in other current liabilities for the December 2011 contract which settled in January 2012.  The fair values, excluding the $18,000 settled in January 2012, are as follows (in thousands):

Derivative Assets
 
Derivative Liabilities
 
Balance Sheet Location
December 31, 2011
 
Balance Sheet Location
December 31, 2011
 
Deposits and other current assets
 $-- 
Other current liabilities
 $147 
Other assets, net
  -- 
Other long-term liabilities
  76 
   $--    $223 
 
The following table summarizes the effects of commodity derivative instruments on the consolidated statements of operations and comprehensive income for twelve months ended December 31, 2011 and 2010 (in thousands):
 
 
December 31,
 
December 31,
 
 
2011
 
2010
 
Increase (decrease) in fair value of derivatives included in other comprehensive income (effective portion)
 $(223) $-- 
Realized gain (loss) included in cost of revenues (effective portion)
  (111 )  -- 
Increase (decrease) in fair value of derivatives included in cost of revenues (ineffective portion)
  --   -- 
 
The Company's derivative instruments contain certain credit-risk-related contingent features which apply both to the Company and to the counterparties.  The counterparty to the Company's derivative contracts is a high credit quality financial institution.
 
Fair Value
 
Derivative financial instruments are carried at fair value.  Commodity derivative instruments consist of fixed rate commodity swaps to hedge the price risk associated with changes in the price of diesel fuel.  The Company's swaps are valued based on a discounted future cash flow model.  The primary input for the model is the forecasted prices for ULSD.  The Company's model is validated by the counterparty's mark-to-market statements.  The swaps are designated as Level 2 within the valuation hierarchy.  Refer to Note 4 for a description of the inputs used to value the information shown above.
 
At December 31, 2011, the Company did not have any derivative assets or liabilities measured at fair value on a recurring basis that meet the definition of Level 1 or Level 3.