Unless the context otherwise requires, the terms "Goldfield," "the Company," "we," "our" and "us" as used herein mean The Goldfield Corporation and its consolidated subsidiaries.

Forward-Looking Statements

We make "forward-looking statements" within the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995 throughout this document. You can identify these statements by forward-looking words such as "may," "will," "expect," "anticipate," "believe," "estimate," "plan," and "continue" or similar words. We have based these statements on our current expectations about future events. Although we believe that our expectations reflected in or suggested by our forward-looking statements are reasonable, we cannot assure you that these expectations will be achieved. Our actual results may differ materially from what we currently expect. Factors that may affect the results of our electrical construction operations include, among others: the level of construction activities by public utilities; the concentration of revenue from a limited number of utility customers; the timing and duration of construction projects for which we are engaged; our ability to estimate accurately with respect to fixed price construction contracts; and heightened competition in the electrical construction field, including intensification of price competition. Factors that may affect the results of our real estate development operations include, among others: the continued weakness in the Florida real estate market; the level of consumer confidence; our ability to acquire land; increases in interest rates and availability of mortgage financing to our buyers; and increases in construction and homeowner insurance and the availability of insurance. Factors that may affect the results of all of our operations include, among others:
adverse weather; natural disasters; effects of climate changes; changes in generally accepted accounting principles; ability to obtain necessary permits from regulatory agencies; our ability to maintain or increase historical revenue and profit margins; general economic conditions, both nationally and in our region; adverse legislation or regulations; availability of skilled construction labor and materials and material increases in labor and material costs; and our ability to obtain additional and/or renew financing. Other important factors which could cause our actual results to differ materially from the forward-looking statements in this document include, but are not limited to, those discussed in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," as well as those discussed elsewhere in this report and as set forth from time to time in our other public filings and public statements. In addition to the other information included in this report and our other public filings and releases, a discussion of factors affecting our business is included in our Annual Report on Form 10-K for the year ended December 31, 2011 under "Item 1A. Risk Factors" and should be considered while evaluating our business, financial condition, results of operations, and prospects.

You should read this report in its entirety and with the understanding that our actual future results may be materially different from what we expect. We may not update these forward-looking statements, even in the event that our situation changes in the future, except as required by law. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

We are a provider of electrical construction services throughout much of the United States. We are also, to a much lesser extent, a real estate developer of residential properties on the east coast of Florida. We report our results under two reportable segments, electrical construction and real estate development. For the nine months ended September 30, 2012, our total consolidated revenue was $55.9 million, of which 98% was attributable to the electrical construction segment and 2% to the real estate development segment.

Through our subsidiary, Southeast Power Corporation ("Southeast Power"), we are engaged in the construction and maintenance of electric utility facilities for electric utilities and industrial customers, and the installation of fiber optic cable for fiber optic cable manufacturers, telecommunication companies, and electric utilities. Southeast Power performs electrical contracting services primarily in the southeastern, mid-Atlantic, and western regions of the United States. Southeast Power is headquartered in Titusville, Florida, and has additional offices in Bastrop, Texas, and Spartanburg, South Carolina.

The electrical construction business is highly competitive and fragmented. We compete with other independent contractors, including larger regional and national firms that may have financial, operational, technical, and marketing resources that exceed our own. We also face competition from existing and prospective customers establishing or augmenting in-house service organizations that employ personnel who perform some of the same types of service as those provided by us. In addition, a significant portion of our electrical construction revenue is derived from a small group of customers, several of which account for a substantial portion of our revenue in any given year. The relative revenue contribution by any single customer or group of customers may significantly fluctuate from period to period. For example, for the year ended December 31, 2011 and the nine months ended September 30, 2012, three of our customers accounted for approximately 53% and 60%, respectively, of our consolidated revenue. The loss of, or decrease in current demand from one or more of these customers, would, if not replaced by other business, result in a decrease in revenue, margins, and profits, which could be material.

Through our subsidiary Bayswater Development Corporation and its various subsidiaries ("Bayswater"), we are engaged in the acquisition, development, management, and disposition of land and improved properties. Historically, the primary focus of our real estate operations has been the development of residential condominium projects along the east coast of Central Florida. From time to time, on an opportunistic basis, we also engage in single family homebuilding. Our most recently completed condominium project, Pineapple House, is an eight-story building in Melbourne, Florida, containing thirty-three luxury river-view condominium units, of which all units were sold as of September 30, 2012, compared to two unsold units as of December 31, 2011. It is the first phase of a possible multi-phase development. We currently have no plans for additional construction at Pineapple House. As of September 30, 2012, we had one single family residential property under construction, compared to two such properties as of December 31, 2011.

This discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to fixed price electrical construction contracts, the fair value of real estate properties, and deferred income tax assets. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities, that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our management has discussed the selection and development of our critical accounting policies, estimates, and related disclosure with the Audit Committee of the Board of Directors.

Percentage of Completion - Electrical Construction Segment

We recognize revenue from fixed price contracts on a percentage-of-completion basis, using primarily the cost-to-cost method based on the percentage of total cost incurred to date in proportion to total estimated cost to complete the contract. Total estimated cost, and thus contract income, is impacted by several factors including, but not limited to: changes in productivity, scheduling, the cost of labor, subcontracts, materials, and equipment. Additionally, external factors such as weather, site conditions and scheduling that differ from those assumed in the original bid (to the extent contract remedies are unavailable), client needs, client delays in providing approvals, the availability and skill level of workers in the geographic location of the project, a change in the availability and proximity of materials, and governmental regulation may also affect the progress and estimated cost of a project's completion and thus the timing of income and revenue recognition.

The accuracy of our revenue and profit recognition in a given period is almost solely dependent on the accuracy of our estimates of the cost to complete each project. Due to our experience and our detailed approach in determining our cost estimates for all of our significant projects, we believe our estimates to be highly reliable. However, our projects can be complex, and in almost every case the profit margin estimates for a project will either increase or decrease, to some extent, from the amount that was originally estimated at the time of bid. Because we have a number of projects of varying levels of complexity and size in process at any given time, these changes in estimates can offset each other without materially impacting our overall profitability. If a current estimate of total costs indicates a loss on a contract, the projected loss is recognized in full when determined. Accrued contract losses as of September 30, 2012 and December 31, 2011 were $25,000 and $74,000, respectively. The accrued contract losses for 2012 and 2011 are mainly attributable to transmission projects experiencing either adverse weather conditions or unexpected construction issues. Revenue from change orders, extra work, variations in the scope of work, and claims is recognized when realization is probable.

Deferred Tax Assets

We account for income taxes in accordance with ASC Topic 740, Income Taxes, which establishes the recognition requirements necessary for implementation. Deferred tax assets and liabilities are recognized for the future tax effects attributable to temporary differences and carryforwards between the financial statement carrying amounts of existing assets and liabilities and the respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

As of September 30, 2012, our deferred tax assets were largely comprised of net operating loss ("NOL") carryforwards and alternative minimum tax ("AMT") credit carryforwards (refer to note 8 to the consolidated financial statements). The carrying amounts of deferred tax assets are reduced by a valuation allowance, if based on the available evidence, it is more likely than not such assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the deferred tax assets are expected to be recovered or settled. In the assessment for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with loss carryforwards expiring unused, and tax planning alternatives. If we determine we will not be able to realize all or part of our deferred tax assets, a valuation allowance would be recorded to reduce our deferred tax assets to the amount that is more likely than not to be realized.

We established a full valuation allowance against our net deferred tax assets beginning in 2008 based upon an evaluation of all available evidence at that time. Our cumulative loss position and market conditions over the evaluation period were significant negative evidence in assessing the need for a valuation allowance. However, based on our forecasts of future taxable income and improved earnings this year, we anticipate being able to generate sufficient taxable income to utilize the NOL and AMT credit carryforwards during 2012. Therefore, we reduced the valuation allowance against the deferred tax assets to zero and this reduction resulted in the recognition of a provision for federal income taxes during the period ended June 30, 2012. The minimum amount of future taxable income required to be generated to fully realize the deferred tax assets as of September 30, 2012 is approximately $3.1 million.

RESULTS OF OPERATIONS

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011

Segment Information

The table below is a reconciliation of our operating income attributable to each
of our segments for the nine months ended September 30 as indicated:



                                                        2012              2011
    Electrical construction
    Revenue                                         $ 54,712,899      $ 20,323,263
    Operating expenses
    Cost of goods sold                                39,385,078        17,125,358
    Selling, general and administrative                  206,875           191,265
    Depreciation                                       2,546,306         2,106,801
    (Gain) loss on sale of property and equipment       (154,502 )           5,521

    Total operating expenses                          41,983,757        19,428,945

    Operating income                                $ 12,729,142      $    894,318

    Real estate development
    Revenue                                         $  1,189,810      $  1,082,947
    Operating expenses
    Cost of goods sold                                   780,479           719,335
    Selling, general and administrative                  290,499           269,594
    Depreciation                                           4,763             1,548

    Total operating expenses                           1,075,741           990,477

    Operating income                                $    114,069      $     92,470

Operating income is total operating revenue less operating expenses inclusive of depreciation and selling, general and administrative expenses for each segment. Operating expenses also include any gains or losses on the sale of property and equipment. Operating income excludes interest expense, interest income, other income, and income taxes.

Revenue

Total revenue in the nine months ended September 30, 2012, more than doubled to $55.9 million, an increase of $34.5 million or 161.2%, compared to $21.4 million in the nine months ended September 30, 2011, due to the increase in electrical construction revenue.

Electrical construction revenue increased to $54.7 million from $20.3 million, an increase of $34.4 million or 169.2%, for the nine months ended September 30, 2012, when compared to the nine months ended September 30, 2011. The increase in revenue was largely due to an increase in demand for our electrical construction services, primarily our transmission work, which represents approximately 97.9% of the total increase in electrical construction revenue. Our increase in transmission project revenue includes several large projects throughout Texas, Florida and the Carolinas. This increase in revenue was attributable to segment-wide growth, with the most dramatic increase occurring in Texas.

The varying magnitude and duration of electrical construction projects may result in substantial fluctuations in our backlog from time to time. Backlog represents the uncompleted portion of services to be performed under project-specific contracts and the estimated value of future services that we expect to provide under our existing service agreements, including new contractual agreements on which work has not begun. In many instances, our customers are not contractually committed to specific volumes of services and many of our contracts may be terminated with notice, therefore, we do not consider any portion of our backlog to be firm. However, our customers become obligated once we provide the services they have requested. Our service agreements are typically multi-year agreements, and we include in our backlog the amount of services projected to be performed over the terms of the

contracts based on our historical relationships with these customers. Our estimates of a customer's requirements during a particular future period may not be accurate at any point in time. As of September 30, 2012, the electrical construction operation's backlog was approximately $53.6 million, which included approximately $48.7 million from fixed price contracts, for which revenue is recognized using percentage-of-completion, and approximately $5.0 million from service agreement contracts, for which revenue is recognized as work is performed. Of our total backlog, we expect approximately 45.6% to be completed within the current fiscal year. This compares to a backlog of $7.0 million as of September 30, 2011, of which approximately $6.0 million represented backlog from fixed price contracts and approximately $1.0 million represented service agreement backlog. The increase in backlog was in large part attributable to Southeast Power's expansion during 2011 of its geographical footprint into Texas and establishment of permanent facilities there, with a view to obtaining work associated with the Competitive Renewable Energy Zones ("CREZ") wind generation projects. The $48.7 million fixed price contract backlog as of September 30, 2012 includes $35.0 million from the CREZ project.

Revenue from our real estate development operations increased 9.9% to $1.2 million for the nine months ended September 30, 2012, compared to $1.1 million for the same period in 2011. This increase was mainly due to the type, number, and sales price of the properties sold during the nine months ended September 30, 2012, when compared to the same prior year period. During the nine months ended September 30, 2012, two condominium units from our Pineapple House project and two residential properties were sold, compared to three condominium units for the same nine month period in 2011. As of September 30, 2012, there was one single family residential project under construction, and there was no backlog for the real estate development operation's segment.

Operating Results

Total operating income increased to $10.7 million for the nine months ended September 30, 2012, compared to an operating loss of $677,000 for the same period in 2011, an increase of $11.4 million.

Electrical construction operating income increased by $11.8 million to $12.7 million in the nine months ended September 30, 2012, compared to operating income of $894,000 during the nine months ended September 30, 2011. Operating margins on electrical construction operations increased to 23.3% for the nine months ended September 30, 2012, from 4.4% for the nine months ended September 30, 2011. The increase in operating margins was largely the result of an increase in higher margin transmission construction projects.

Real estate development operations had operating income of $114,000 for the nine months ended September 30, 2012, compared to $92,000 for the nine months ended September 30, 2011, an increase of $22,000. This increase was mainly due to the amount and sales price of the properties sold during the nine months ended September 30, 2012, compared to the same period in the prior year.

Costs and Expenses

Total costs and expenses, and the components thereof, increased to $45.2 million in the nine months ended September 30, 2012, from $22.1 million in the nine months ended September 30, 2011, an increase of $23.1 million.

Electrical construction cost of goods sold increased to $39.4 million in the nine months ended September 30, 2012, from $17.1 million in the nine months ended September 30, 2011, an increase of $22.3 million. The increase in costs corresponds to the aforementioned increase in revenue during the nine months ended September 30, 2012, when compared to the same nine month period in 2011.

Cost of goods sold for real estate development operations increased to $780,000 for the nine months ended September 30, 2012, from $719,000 for the nine months ended September 30, 2011, an increase of 8.5%. The increase in cost of goods sold is primarily attributable to the variance in the type, amount, and carrying costs of the properties sold during the nine months ended September 30, 2012, when compared to the same period in 2011.

The following table sets forth selling, general and administrative ("SG&A") expenses for each segment for the nine months ended September 30 as indicated:

                                             2012            2011
                Electrical construction   $   206,875     $   191,265
                Real estate development       290,499         269,594
                Corporate                   2,125,355       1,637,543

                Total                     $ 2,622,729     $ 2,098,402

SG&A expenses increased 25.0% to $2.6 million in the nine months ended September 30, 2012, from $2.1 million in the nine months ended September 30, 2011. The increase in SG&A expenses was mainly attributable to increases in corporate administrative expenditures, specifically salaries and compensation, during the nine months ended September 30, 2012, when compared to the same period in 2011, mainly attributable to the Company's expansion. Also contributing to the increase in SG&A during the nine month period ended September 30, 2012, was a slight increase in selling expenses within the real estate segment attributable to the variance in the type of properties sold during the nine month period ended September 30, 2012, when compared to the same prior year period. As a percentage of revenue, SG&A expenses decreased to 4.7% for the nine months ended September 30, 2012, from 9.8% in the nine months ended September 30, 2011, primarily due to the increase in revenue in the current period.

The following table sets forth depreciation expense for each segment for the nine months ended September 30 as indicated:

                                             2012            2011
                Electrical construction   $ 2,546,306     $ 2,106,801
                Real estate development         4,763           1,548
                Corporate                      21,976          25,166

                Total                     $ 2,573,045     $ 2,133,515

Depreciation expense increased to $2.6 million during the nine months ended September 30, 2012, from $2.1 million for the nine months ended September 30, 2011, an increase of 20.6%. The increase in depreciation is mainly due to the increase in fixed assets purchases for new equipment, primarily within the electrical construction segment, and attributable to our growth and expansion efforts.

Income Taxes

The following table presents our provision for income tax and effective income
tax rate from continuing operations for the nine months ended September 30 as
indicated:



                                               2012            2011
                Income tax provision        $ 2,821,728      $ 21,836
                Effective income tax rate          26.8 %         2.9 %

Our expected tax rate for the year ending December 31, 2012, which was calculated based on the estimated annual operating results for the year, is 26.8%. Our expected tax rate differs from the federal statutory rate of 34% primarily due to the reversal of the valuation allowance for deferred tax assets.

Our effective tax rate for the nine months ended September 30, 2012 was 26.8%. Our effective tax rate for the nine months ended September 30, 2011 of 2.9% includes only state income tax expense attributable to a subsidiary and does not reflect the federal statutory rate of 34%. Tax benefits are not recognized on anticipated losses when a deferred tax valuation allowance exists.

Discontinued Operations

We were previously engaged in mining activities and ended all such activities approximately nine years ago. For the nine month period ended September 30, 2012, there were no results or activity related to these discontinued operations. All results of these discontinued operations during the nine month period ended September 30, 2011 were related to settlement agreements with the United States Environmental Protection Agency (the "EPA").

Three Months Ended September 30, 2012 Compared to Three Months Ended
September 30, 2011

Segment Information

The table below is a reconciliation of our operating income (loss) attributable
to each of our segments for the three months ended September 30 as indicated:



                                                        2012            2011
    Electrical construction
    Revenue                                         $ 19,127,906     $ 4,708,188
    Operating expenses
    Cost of goods sold                                13,474,473       4,329,817
    Selling, general and administrative                   42,157          10,103
    Depreciation                                         946,100         599,863
    Loss (gain) on sale of property and equipment         42,757            (221 )

    Total operating expenses                          14,505,487       4,939,562

    Operating income (loss)                         $  4,622,419     $  (231,374 )

    Real estate development
    Revenue                                         $    550,510     $   307,175
    Operating expenses
    Cost of goods sold                                   381,956         288,446
    Selling, general and administrative                   99,634          82,033
    Depreciation                                           2,852             487

    Total operating expenses                             484,442         370,966

    Operating income (loss)                         $     66,068     $   (63,791 )

. . .