XML 21 R24.htm IDEA: XBRL DOCUMENT v2.4.0.6
Related Party Transactions
 12 Months Ended
Dec. 31, 2011
Related Party Transactions [Abstract]  
Related Party Transactions
17.  Related Party Transactions
 
RLW has historically performed construction contracts for entities owned by its noncontrolling interest owners.  These noncontrolling interest owners are also executive managers of RLW, including Mr. Kip Wadsworth who is a member of the board of directors of the Company.  During 2011, the Company recognized approximately $283,000 in revenue and $46,000 in gross profit from a few smaller projects owned by the noncontrolling interest owners' privately-owned entities.  These related party contracts had a total contract value of $3.2 million. Collections on account related to these projects during 2011 approximated $525,000. During 2011, one of these contractors filed for bankruptcy and as a result $24,000 billed to such entity was deemed uncollectible.
 
The noncontrolling interest owners are also majority owners of a company with which RLW has a service agreement to provide monthly professional and other services (accounting, payroll, reimbursement, computer and postage) for which RLW is reimbursed on a monthly basis. Billings for these services totaled $615,000 in 2011.  The Company leases its main office for its Utah operations from a second company which is 98% owned by these owners for $228,500 annually plus common area maintenance charges of $80,800 per year.  The office lease expires in 2022.  In addition, the Company leases its equipment maintenance shop for its Utah operations from a third company, which is 98% owned by those owners, for $178,300 annually, plus common area maintenance charges of $71,700 per year.  The shop lease expires in 2022.  The Company also leases field housing for its Utah operations from a company owned by the noncontrolling interest owners for $47,000 annually.  This lease expires in 2014.  During 2011, the Company also paid $72,300 for aircraft services to a company owned 100% by the noncontrolling interest owners.  Management and the Audit Committee of the Board of Directors have reviewed each of these transactions and believe the prices being charged to or by RLW are competitive with what third parties would charge or pay.
 
During 2010, one of the Company's subsidiaries began purchasing materials for specific contracts of that subsidiary from a company owned by a member of management of that subsidiary.  There were no purchases made in 2011 and purchases in 2010 amounted to approximately $4.5 million.  A deposit of $1.6 million made at December 31, 2009, is included in the $4.5 million of purchases of such material in 2010.
 
During 2011, the Company paid approximately $274,000 to businesses owned by family members of management for services and material.  An independent member of senior management of the Company reviewed all related party purchases before they were transacted.
 
JBC leases office and shop space from the former owner who has continued as an employee of JBC. Monthly rent is approximately $8,000, and the leases expire in August 2016. Rentals under these leases totaled $40,000 in 2011.