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What changed in GRANITE CONSTRUCTION INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of GRANITE CONSTRUCTION INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+287 added−302 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-23)

Top changes in GRANITE CONSTRUCTION INC's 2024 10-K

287 paragraphs added · 302 removed · 238 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

64 edited+6 added−14 removed85 unchanged
Biggest changeAcross our footprint of regional offices, we provide horizontal civil infrastructure construction services and construction materials products to a diverse base of public, industrial and commercial clients. These clients benefit from our home market strategy which includes local relationships, market intelligence and the resources and expertise of one of the oldest and most respected U.S. contractors and materials producers.
Biggest changeThese clients benefit from our home market strategy which includes local relationships, market intelligence and the resources and expertise of one of the oldest and most respected U.S. contractors and materials producers. Local market knowledge, relationships, and project management expertise, supported by the financial strength of a publicly traded company with a strong balance sheet, provide a sustainable competitive advantage.
DBE regulations require us to use our good faith efforts to subcontract a specified portion of contract work done for governmental agencies to certain types of disadvantaged contractors or suppliers. As with all of our subcontractors, some may not be able to obtain surety bonds or other types of performance security.
DBE regulations may require us to use our good faith efforts to subcontract a specified portion of contract work done for governmental agencies to certain types of disadvantaged contractors or suppliers. As with all of our subcontractors, some may not be able to obtain surety bonds or other types of performance security.
For climate-related issues, we also utilize the recommendations from the Task Force on Climate-related Financial Disclosures. Within these frameworks, we have selected industry-specific metrics that align with stakeholder expectations, are relevant to our business, and will have the most significant impact. We publish annual Sustainability Reports, which update stakeholders on our ESG performance.
For climate-related issues, we also utilize the recommendations from the Task Force on Climate-related Financial Disclosures. Within these frameworks, we have selected industry-specific metrics that align with stakeholder expectations, are relevant to our business, and will have the most significant impact. We publish annual Sustainability Reports, which update stakeholders on our performance.
Our Board of Directors oversees our sustainability program, including how we manage sustainability and ESG-related risks in conjunction with our overall Enterprise Risk Management process. We utilize the Global Reporting Initiative and Sustainability Accounting Standards Board standards as frameworks to support performance, tracking and reporting, and responsible business behavior.
Our Board of Directors oversees our sustainability program, including how we manage sustainability-related risks in conjunction with our overall Enterprise Risk Management process. We utilize the Global Reporting Initiative and Sustainability Accounting Standards Board standards as frameworks to support performance, tracking and reporting, and responsible business behavior.
Under the CM/GC and CMAR delivery methods, we contract with owners to assist the owner during the design phase of the contract with construction efficiencies and risk mitigation, with the understanding that we will negotiate a contract on the construction phase when the collective design nears completion.
Under the CM/GC and CMAR delivery methods, we contract with owners to assist during the design phase of the contract with construction efficiencies and risk mitigation, with the understanding that we will negotiate a contract on the construction phase when the collective design nears completion.
The most significant of these include: • changes in costs of labor and/or materials; • subcontractor costs, availability and/or performance issues; • extended overhead and other costs due to owner, weather and other delays; • changes in productivity expectations; • changes from original design on design-build projects; • our ability to fully and promptly recover on affirmative claims and back charges for additional contract costs; • a change in the availability and proximity of equipment and materials; • complexity in original design; • length of time to complete the project; • the availability and skill level of workers in the geographic location of the project; 8 Table of Contents • site conditions that differ from those assumed in the original bid; • costs associated with scope changes; and • the customer’s ability to properly administer the contract.
The most significant of these include: • changes in costs of labor and/or materials; • subcontractor costs, availability and/or performance issues; • extended overhead and other costs due to owner, weather and other delays; • changes in productivity expectations; • changes from original design on design-build projects; • our ability to fully and promptly recover on affirmative claims and back charges for additional contract costs; • a change in the availability and proximity of equipment and materials; • complexity in original design; • length of time to complete the project; • the availability and skill level of workers in the geographic location of the project; • site conditions that differ from those assumed in the original bid; • costs associated with scope changes; and • the customer’s ability to properly administer the contract.
As of December 31, 2023, three of our wholly-owned subsidiaries, Granite Construction Company, Layne Christensen Company and Granite Industrial, Inc., were parties to craft collective bargaining agreements in many areas in which they operate (see Note 16 of the “Notes to the Consolidated Financial Statements”).
As of December 31, 2024, three of our wholly-owned subsidiaries, Granite Construction Company, Layne Christensen Company and Granite Industrial, Inc., were parties to craft collective bargaining agreements in many areas in which they operate (see Note 16 of the “Notes to the Consolidated Financial Statements”).
While it is impossible to fully eliminate the impact of these factors, we have applied proactive measures such as fixed forward purchase contracts of oil related inputs, energy surcharges, and adjustment of project schedules for constraints related to construction materials such as concrete.
While it is impossible to fully eliminate the impact of these factors, where practicable, we have applied proactive measures such as fixed forward purchase contracts of oil related inputs, energy surcharges, and adjustment of project schedules for constraints related to construction materials such as concrete.
We envision Granite as the leading provider of sustainable infrastructure solutions, differentiated by our pursuit of social, environmental and financial excellence. To attain our objectives, we have a Sustainability department that develops, coordinates and communicates our environmental, social and governance (“ESG”) initiatives across the Company.
We envision Granite as the leading provider of sustainable infrastructure solutions, differentiated by our pursuit of social, environmental and financial excellence. To attain our objectives, we have a Sustainability department that develops, coordinates and communicates our initiatives across the Company.
By contrast, larger projects typically require larger amounts of capital that may make entry into the market by future competitors more difficult. Also, aggregate mining and asphalt production require significant capital investment to purchase and maintain the necessary property and equipment which presents a significant barrier to entry into the construction materials market.
By contrast, larger projects typically require larger amounts of capital that may make entry into the market by future competitors more difficult. Also, 6 Table of Contents aggregate mining and asphalt production require significant capital investment to purchase and maintain the necessary property and equipment which presents a significant barrier to entry into the construction materials market.
Based on our analysis of their construction and financial capabilities, among other criteria, we may require the subcontractor to furnish a bond or other type of security to guarantee their performance and/or we retain payments, or some portion thereof, in accordance with contract terms until their performance is complete.
Based on our analysis of their construction and financial capabilities, among other criteria, we may require the subcontractor to furnish a bond or other 8 Table of Contents type of security to guarantee their performance and/or we retain payments, or some portion thereof, in accordance with contract terms until their performance is complete.
Diversification: To mitigate the risks inherent in the construction business as the result of general economic factors, we pursue projects: (1) in both the public and private sectors; (2) in diverse end markets such as federal, rail, power, water and renewable energy; (3) for a wide range of clients from the federal government to small municipalities and from large corporations to small private customers; (4) in diverse geographic markets; (5) with procurement methods that include construction management/general contractor (“CM/GC”), bid-build and design-build; (6) that are executed according to a fixed price, time and materials, cost reimbursable and fixed unit price; and (7) of various size, duration and complexity.
Diversification: To mitigate the risks inherent in the construction business as the result of general economic factors, we pursue projects: (1) in both the public and private sectors; (2) in diverse end markets such as federal, rail, power and water; (3) for a wide range of clients from the federal government to small municipalities and from large corporations to small private customers; (4) in diverse geographic markets; (5) with procurement methods that include construction management/general contractor (“CM/GC”), construction management at-risk (“CMAR”), progressive design-build, bid-build and design-build; (6) that are executed according to a fixed price, time and materials, cost reimbursable and fixed unit price; and (7) of various size, duration and complexity.
We select our joint venture partners (“partner(s)”) based on our analysis of their construction and financial capabilities, expertise in the type of work to be performed and past working relationships, among other criteria. Under each joint venture agreement, one partner is designated as the sponsor.
We select our joint venture partners based on our analysis of their construction and financial capabilities, expertise in the type of work to be performed and past working relationships, among other criteria. Under each joint venture agreement, one partner is designated as the sponsor.
During the years ended December 31, 2023, 2022 and 2021, our largest volume customer, including both prime and subcontractor arrangements, was the California Department of Transportation (“Caltrans”).
During the years ended December 31, 2024, 2023 and 2022, our largest volume customer, including both prime and subcontractor arrangements, was the California Department of Transportation (“Caltrans”).
Approximat ely $2.3 billion of the December 31, 2023 unearned revenue is expected to be completed during 2024. Competition and Market Trends In both our Construction and Materials segments, we have competitors within the individual markets and geographic areas in which we operate, ranging from small, local companies to larger regional, national and international companies.
Approximat ely $2.6 billion of the December 31, 2024 unearned revenue is expected to be completed during 2025. Competition and Market Trends In both our Construction and Materials segments, we have competitors within the individual markets and geographic areas in which we operate, ranging from small, local companies to larger regional, national and international companies.
Government Procurement: Approximately 70% of our Construction Segment revenue in 2023 was derived from contracts funded by federal, state and local government agencies and authorities. Government contracts are subject to specific procurement regulations, contract provisions and a variety of socioeconomic requirements relating to their formation, administration, performance and accounting and often include express or implied certifications of compliance.
Government Procurement: Approximately 75% of our Construction Segment revenue in 2024 was derived from contracts funded by federal, state and local government agencies and authorities. Government contracts are subject to specific procurement regulations, contract provisions and a variety of socioeconomic requirements relating to their formation, administration, performance and accounting and often include express or implied certifications of compliance.
Although the construction business is highly competitive, there are few, if any, companies which compete in all of our market areas. The degree and type of competition is influenced by the type and scope of construction projects within the 6 Table of Contents individual markets.
Although the construction business is highly competitive, there are few, if any, companies which compete in all of our market areas. The degree and type of competition is influenced by the type and scope of construction projects within the individual markets.
He also served as Senior Vice President and Group Manager from January 2020 to January 2024, Vice President and Valley Region Manager from 2014 to 2019, Northern California Area Manager from 2012 to 2014, Design Build Project Executive from 2010 to 2012, Group Construction Manager from 2007 to 2010, Arizona Operations Manager from 2005 to 2007, Arizona Construction Manager from 2001 to 2005, Plants Manager from 1999 to 2001, Estimator/Project Manager from 1995 to 1999 and Project Engineer from 1993 to 1995.
He also served as Senior Vice President and Group Manager from January 2020 to January 2024, Vice President and Valley Region Manager from 2014 to 2019, Northern California Area Manager from 2012 to 2014, Design Build Project Executive from 11 Table of Contents 2010 to 2012, Group Construction Manager from 2007 to 2010, Arizona Operations Manager from 2005 to 2007, Arizona Construction Manager from 2001 to 2005, Plants Manager from 1999 to 2001, Estimator/Project Manager from 1995 to 1999 and Project Engineer from 1993 to 1995.
Environmental, Social and Governance Matters Sustainability is one of our core values and we are committed to contributing to the development of a more sustainable future. We are a participating member of the United Nations Global Compact. Our sustainability objectives encompass corporate social responsibility, environmental stewardship, dependable governance and the creation of enduring economic value.
Sustainability Sustainability is one of our core values and we are committed to contributing to the development of a more sustainable future. We are a participating member of the United Nations Global Compact. Our sustainability objectives encompass 5 Table of Contents corporate social responsibility, environmental stewardship, dependable governance and the creation of enduring economic value.
Radich served Granite as Project Engineer from 1980 to 1983, Project Manager from 1985 to 1990 for the Heavy Civil and 11 Table of Contents Vertical Divisions and Chief Estimator from 1990 to 1993 in the Vertical Division. He received a B.S.C.E. from Santa Clara University and is a Registered Civil Engineer. Mr.
Radich served Granite as Project Engineer from 1980 to 1983, Project Manager from 1985 to 1990 for the Heavy Civil and Vertical Divisions and Chief Estimator from 1990 to 1993 in the Vertical Division. He received a B.S.C.E. from Santa Clara University and is a Registered Civil Engineer. Mr.
The information on our website is not incorporated into, and is not part of, this report. These reports, and any amendments to them, are also available on the SEC’s website, www.sec.gov. Information About Executive Officers Information regarding our executive officers as of February 1, 2024 is set forth below. Name Age Position Kyle T.
The information on our website is not incorporated into, and is not part of, this report. These reports, and any amendments to them, are also available on the SEC’s website, www.sec.gov. 10 Table of Contents Information About Executive Officers Information regarding our executive officers as of February 1, 2025 is set forth below. Name Age Position Kyle T.
Many projects are added to CAP and completed within the same fiscal year and, therefore, may not be reflected in our beginning or year-end CAP. Our CAP wa s $5.5 billion and $4.5 billion a s of December 31, 2023 and 2022, respectively.
Many projects are added to CAP and completed within the same fiscal year and, therefore, may not be reflected in our beginning or year-end CAP. Our CAP wa s $5.3 billion and $5.5 billion a s of December 31, 2024 and 2023, respectively.
Performance-Based Incentives: Our incentive compensation plans align with the key objectives outlined in our strategic plan. Managers are incentivized with cash compensation and equity awards, payable upon the attainment of pre-established annual financial and non-financial metrics, including capital efficiency and cash flow generation.
Performance-Based Incentives: Our incentive compensation plans align with the key objectives outlined in our strategic plan. Managers are incentivized with cash compensation and equity awards payable upon the attainment of pre-established annual financial and non-financial metrics.
Revenue recognized from contracts with Caltrans during the years ended December 31, 2023, 2022 and 2021 represented $458.2 million (13.1% of total revenue), $348.0 million (10.5% of total revenue) and $337.1 million (9.6% of total revenue), respectively, which was primarily in the Construction segment.
Revenue recognized from contracts with Caltrans during the years ended December 31, 2024, 2023 and 2022 represented $567.6 million (14.2% of total revenue), $458.2 million (13.1% of total revenue) and $348.0 million (10.5% of total revenue), respectively, which was primarily in the Construction segment.
Other than Caltrans, none of our customers, including both prime and subcontractor arrangements, had revenue that individually exceeded 10% of total revenue during the years ended December 31, 2023 and December 31, 2022.
Other than Caltrans, none of our customers, including both prime and 3 Table of Contents subcontractor arrangements, had revenue that individually exceeded 10% of total revenue during the years ended December 31, 2024, 2023 or 2022.
Equipment At December 31, 2023 and 2022, we owned the following number of construction equipment and vehicles: December 31, 2023 2022 Heavy construction equipment 2,457 2,471 Trucks, truck-tractors, trailers and vehicles 4,686 5,059 10 Table of Contents Our portfolio of equipment includes backhoes, barges, bulldozers, cranes, excavators, loaders, motor graders, pavers, rollers, scrapers, trucks, drilling rigs and tunnel boring machines that are used in both of our segments.
Equipment At December 31, 2024 and 2023, we owned the following number of construction equipment and vehicles: December 31, 2024 2023 Heavy construction equipment 2,645 2,457 Trucks, truck-tractors, trailers and vehicles 4,725 4,686 Our portfolio of equipment includes backhoes, barges, bulldozers, cranes, excavators, loaders, motor graders, pavers, rollers, scrapers, trucks, drilling rigs and tunnel boring machines that are used in both of our segments.
Within our Construction segment, we utilize several methods of project delivery including, but not limited to, bid-build, design-build, CM/GC, construction management at-risk (“CMAR”) and progressive design-build.
Within our Construction segment, we utilize several methods of project delivery including, but not limited to, bid-build, design-build, CM/GC, CMAR and progressive design-build.
In 2023, we employed 238 interns from 105 colleges and universities. We remain fully committed to fairness and nondiscrimination in our employment practices by ensuring that the decision on who to hire and promote are based purely on merit and made without consideration of race, gender or other protected characteristic.
We remain fully committed to fairness and nondiscrimination in our employment practices by ensuring that the decision on who to hire and promote are based purely on merit and made without consideration of race, gender or other protected characteristic.
The structure of our compensation programs balances guaranteed base pay with incentive compensation opportunities. Additionally, all employees are eligible for health insurance, physical, mental and financial wellness programs, paid and unpaid leave, a retirement plan, life insurance and disability/accident coverage. We also offer a variety of voluntary benefits that allow employees to select the options that meet their needs.
Additionally, all employees are eligible for health insurance, physical, mental and financial wellness programs, paid and unpaid leave, a retirement plan, life insurance and disability/accident coverage. We also offer a variety of voluntary benefits that allow employees to select the options that meet their needs.
We deliver infrastructure solutions for public and private clients primarily in the United States. We are one of the largest diversified construction and construction materials companies in the United States.
We deliver infrastructure solutions for public and private clients primarily in the United States. We are one of the largest diversified, vertically integrated civil contractors and construction materials producers in the United States.
The percentage of fixed unit price contracts in our unearned revenue was 63.5% and 72.7% at December 31, 2023 and 2022, respectively.
The percentage of fixed unit price contracts in our unearned revenue was 59.1% and 63.5% at December 31, 2024 and 2023, respectively.
Williams 63 Senior Vice President, Construction Staci M. Woolsey 47 Chief Accounting Officer Mr. Larkin joined Granite in 1996, has served as President since September 2020 and as Chief Executive Officer since June 2021.
Williams 64 Senior Vice President, Construction Mr. Larkin joined Granite in 1996, has served as President since September 2020 and as Chief Executive Officer since June 2021.
At December 31, 2023, there was $195.6 million of remaining contract value on unconsolidated and line item construction joint venture contracts, of which $93.1 million represented our share and is included in our CAP and the remaining $102.5 million represented our partners’ share. See Note 9 of “Notes to the Consolidated Financial Statements” for more information.
At December 31, 2024, there was $100.6 million of remaining contract value on unconsolidated and line item construction joint venture contracts, of which $35.6 million represented our share and is included in our CAP and the remaining $65.0 9 Table of Contents million represented our partners’ share. See Note 9 of “Notes to the Consolidated Financial Statements” for more information.
Prior to joining the Company, Ms. Woolsey was the Vice President and Corporate Controller from December 2018 to August 2020 and Vice President, Corporate Controller and Chief Accounting Officer from August 2020 to June 2021 of MDC Holdings, Inc. From February 2016 to December 2018, Ms.
Woolsey was the Vice President and Corporate Controller from December 2018 to August 2020 and Vice President, Corporate Controller and Chief Accounting Officer from August 2020 to June 2021 of MDC Holdings, Inc. From February 2016 to December 2018, Ms. Woolsey was the Vice President and Controller of the Energy, Infrastructure and Industrial Construction division of AECOM. Ms.
We are also subject to the rules and regulations promulgated by OSHA and the Mine Safety and Health Administration. In addition, certain of our contracts with government agencies contain minimum Disadvantaged Business Enterprise (“DBE”) participation clauses.
Our operations are subject to various statutes and certain executive orders, as well as the rules and regulations promulgated by the Occupational Safety and Health Administration and the Mine Safety and Health Administration. In addition, certain of our contracts with government agencies contain minimum Disadvantaged Business Enterprise (“DBE”) participation clauses.
The percentage of fixed price contracts in our unearned revenue was 30.5% and 23.5% at December 31, 2023 and 2022, respectively. All other contract types represented 6.0% and 3.8% of our unearned revenue at December 31, 2023 and 2022, respectively.
The 7 Table of Contents percentage of fixed price contracts in our unearned revenue was 33.2% and 30.5% at December 31, 2024 and 2023, respectively. All other contract types represented 7.7% and 6.0% of our unearned revenue at December 31, 2024 and 2023, respectively.
Risk Factors” for additional information. Our annual sustainability reports, along with additional information about our sustainability program, can be found on our website at https://www.graniteconstruction.com/company/building-better-future-today. The information on our website and Granite’s Sustainability Report are not incorporated into, and are not part of, this report.
Our annual sustainability reports, along with additional information about our sustainability program, can be found on our website at https://www.graniteconstruction.com/company/building-better-future-today. The information on our website and Granite’s Sustainability Report are not incorporated into, and are not part of, this report. Committed and Awarded Projects Committed and Awarded Projects ("CAP") consists of two components: (1) unearned revenue and (2) other awards.
These include corporate culture assessments, as well as real-time feedback on employee engagement and on employee well-being which includes physical, emotional, social and financial health.
Employee Engagement: We routinely engage independent third parties to conduct cultural and employee engagement surveys. These include corporate culture assessments, as well as real-time feedback on employee engagement and on employee well-being which includes physical, emotional, social and financial health.
Curtis began her career in public accounting with Deloitte and graduated from Texas A&M University with B.S. degrees in Accounting and Finance and is a Certified Public Accountant. Mr. Radich first joined Granite in 1980 and rejoined the Company in 2011. He has served as Executive Vice President and Chief Operating Officer since December 2020.
Woolsey received a B.S. degree in Accounting from the University of Idaho and is a Certified Public Accountant. Mr. Radich first joined Granite in 1980 and rejoined the Company in 2011. He has served as Executive Vice President and Chief Operating Officer since December 2020.
Committed and Awarded Projects Committed and Awarded Projects ("CAP") consists of two components: (1) unearned revenue and (2) other awards. Unearned revenue includes the revenue we expect to record in the future on executed contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts.
Unearned revenue includes the revenue we expect to record in the future on executed contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts.
Within the private sector, we perform various services such as site preparation, mining services and infrastructure services for commercial and industrial sites, railways, residential development, energy development, as well as provide construction management professional services.
Within the private sector, we perform various services such as site preparation, mining services and infrastructure services for commercial and industrial sites, railways, residential development, energy development, as well as provide construction management professional services. We own and lease aggregate reserves, and we own processing plants that are vertically integrated into our construction operations.
We have a robust talent and succession planning process and have established specialized programs to accelerate the development of our talent pipeline for critical roles in general management, engineering, project management and operations.
We have a robust talent and succession planning process and have established specialized programs to accelerate the development of our talent pipeline for critical roles in general management, engineering, project management and operations. On an annual basis, we conduct succession planning reviews with senior leaders focusing on our high performing and high potential talent and succession for critical roles.
The December 31, 2023 equipment count includes 202 pieces of heavy construction equipment and 111 vehicles from the LRC/MSG acquisition. In 2023 and 2022, we purchased $71.9 million and $73.9 million, respectively, of construction equipment and vehicles.
The December 31, 2024 equipment count includes 189 pieces of heavy construction equipment and 206 vehicles from the D&B acquisition. In 2024 and 2023, we purchased $59.2 million and $71.9 million, respectively, of construction equipment and vehicles.
Larkin 52 President and Chief Executive Officer Elizabeth L. Curtis 57 Executive Vice President and Chief Financial Officer James A. Radich 65 Executive Vice President and Chief Operating Officer Brian A. Dowd 60 Senior Vice President, Construction Bradly J. Estes 45 Senior Vice President, Construction Materials Michael G. Tatusko 59 Senior Vice President, Construction Bradley J.
Larkin 53 President and Chief Executive Officer Staci M. Woolsey 48 Executive Vice President and Chief Financial Officer James A. Radich 66 Executive Vice President and Chief Operating Officer Brian A. Dowd 61 Senior Vice President, Construction Bradly J. Estes 46 Senior Vice President, Construction Materials Michael G. Tatusko 60 Senior Vice President, Construction Bradley J.
Inclusive Diversity: Our culture is underpinned by our core values, including an unwavering commitment to inclusive diversity as exemplified by strategies that address our guiding belief that diverse backgrounds, perspectives, and experiences enhance creativity and innovation.
A core part of our mission will always be to provide a safe and healthy work environment for all our employees. Inclusion: Our culture is underpinned by our core values, including an unwavering commitment to inclusion as exemplified by strategies that address our guiding belief that diverse backgrounds, perspectives and experiences enhance creativity and innovation.
We have established employee resource groups that serve employees from a variety of backgrounds, and we have designated October as Inclusion month throughout our Company. We periodically conduct pay equity analyses to support our commitment to pay equity for similar job functions, regardless of race, gender, ethnicity or sexual orientation.
We have established employee resource groups that serve employees from a variety of backgrounds and we periodically conduct pay analyses to support our commitment to legally-compliant pay practices for similar job functions.
We devote resources to the development, maintenance, communication and enforcement of our Code of Conduct, our anti-bribery compliance policies, our internal control processes and compliance related policies. We strive to conduct timely internal investigations of potential violations and take appropriate action depending upon the outcome of the investigation.
We strive to conduct timely internal investigations of potential violations and take appropriate action depending upon the outcome of the investigation.
The majority of both our salaried and hourly personnel were located in the United States during 2023.
During 2024, the number of hourly employees ranged from approximately 2,100 to 4,300. The majority of both our salaried and hourly personnel were located in the United States during 2024.
In 2023, we conducted a company-wide employee engagement survey and the results reflect improved engagement. 5 Table of Contents Compensation and Benefits: Our compensation programs are designed to align the compensation of our employees with our financial and safety performance and their individual performance to provide proper incentives to attract, retain and motivate employees to achieve superior results.
Compensation and Benefits: Our compensation programs are designed to align the compensation of our employees with our financial and safety performance and their individual performance to provide proper incentives to attract, retain and motivate employees to achieve superior results. The structure of our compensation programs balances guaranteed base pay with incentive compensation opportunities.
We account for our portion of these contracts as revenue and cost of revenue in the consolidated statements of operations and in relevant balances in the consolidated balance sheets. 9 Table of Contents The agreements with our partner(s) for both construction joint ventures and line-item joint ventures define each partner’s management role and financial responsibility in the project.
The agreements with our partner(s) for both construction joint ventures and line-item joint ventures define each partner’s management role and financial responsibility in the project.
We are also subject to the applicable anti-corruption laws in the jurisdictions in which we operate, thus potentially exposing us to liability and potential penalties in multiple jurisdictions.
We are also subject to the applicable anti-corruption laws in the jurisdictions in which we operate, thus potentially exposing us to liability and potential penalties in multiple jurisdictions. The anti-corruption provisions of the FCPA are enforced by the Department of Justice while other state or federal agencies may seek recourse against us for issues related to the FCPA.
The Mountain Group also includes national businesses in the Industrial & Energy division, which primarily focuses on commercial solar construction projects, Water Resources, which performs water well drilling and rehabilitation services and Mineral Services, which performs mineral exploration services for mining clients.
Our Construction segment also operates national businesses within the Tunnel division, the Rail division, the Federal division, which performs civil construction across the continental United States and Guam, the Industrial & Energy division, which primarily focuses on commercial solar construction projects, and the Layne division, which performs water well drilling, rehabilitation services and mineral exploration services.
In 2023, we continued to make progress towards our 2025 goals through broadening the diversity of our pool of potential qualified applicants and identifying and addressing any impediments to employment opportunity that may exist. Representation of women throughout the organization was maintained and representation of women and minorities in leadership increased in 2023.
In 2024, we continued to make progress through broadening the diversity of our pool of potential qualified applicants and identifying and addressing any impediments to employment opportunity that may exist. We also increased the number of colleges and universities we are targeting for our pool of qualified applicants. In 2024, we employed 241 interns from 108 colleges and universities.
Our people are the foundation of our success, and we encourage every employee to actively participate in their own career growth and development. We offer a wide variety of training opportunities to ensure our employees are supplementing their on-the-job learning with in-person and online courses needed to promote performance and growth.
We offer a wide variety of training opportunities to ensure our employees are supplementing their on-the-job learning with in-person and online courses needed to promote performance and growth. In 2024, our employees completed over 30,000 training courses and more than 300 employees ranging from emerging leaders to senior leaders graduated from our multi-level leadership development program.
We continued to execute on our inclusive diversity five-year strategic plan, which was established in 2020, with the following key goals: • increase representation of women throughout the organization by 2025; • increase women in leadership by 2025; • increase representation of minorities in leadership throughout the organization by 2025; and • increase diversity and inclusion index survey results from 71% in 2020 to 80% by 2025.
We continued to execute on our five-year strategic plan regarding inclusion, which was established in 2020, working toward increased representation of women and minorities throughout the organization (including in leadership) to be reflective of the communities in which we operate.
Mr. Williams holds a B.S. in Civil Engineering from Ohio Northern University. Ms. Woolsey joined Granite in June 2021 and was appointed Chief Accounting Officer on January 1, 2022. Prior to this appointment and since joining the Company in June 2021, Ms. Woolsey served in a non-officer role with accounting responsibilities and reported directly to Ms. Curtis.
Woolsey joined Granite in June 2021 and has served as Executive Vice President and Chief Financial Officer since September 2024. Ms. Woolsey also served as Chief Accounting Officer from January 2022 to September 2024 and served in a non-officer role with accounting responsibilities since joining the Company in June 2021. Prior to joining the Company, Ms.
Each partner accounts for its items of work individually as it would for any self-performed contract.
Each partner accounts for its items of work individually as it would for any self-performed contract. We account for our portion of these contracts as revenue and cost of revenue in the consolidated statements of operations and in relevant balances in the consolidated balance sheets.
Local market knowledge, relationships, and project management expertise, supported by the financial strength of a publicly traded company with a strong balance sheet provide a sustainable competitive advantage. By diversifying our revenue channels across geographies and clients, and by taking measured risks within our construction capabilities, we simultaneously grow our business and mitigate risk.
By diversifying our revenue channels across geographies and clients, and by taking measured risks within our construction capabilities, we simultaneously grow our business and mitigate risk.
Our managerial and supervisory personnel have an average tenure of 12 years with Granite, which demonstrates our workforce's strong dedication to, and great pride in, our company. 4 Table of Contents On December 31, 2023, we employed approximately 2,100 salaried employees who work in project, functional and business unit management, estimating and administrative capacities, plus approximately 2,000 hourly employees.
Our focus on an inclusive work environment, talent development, talent acquisition, and succession planning has allowed us to build a bench of talented employees. Our 4 Table of Contents managerial and supervisory personnel have an average tenure of 12 years with Granite, which demonstrates our workforce's strong dedication to, and great pride in, our company.
A core part of our mission will always be to provide a safe and healthy work environment for all our employees. Employee Development and Training: The development of our employees is critical to our success and is a key factor in our ability to attract and retain talent.
Employee Development and Training: The development of our employees is critical to our success and is a key factor in our ability to attract and retain talent. Our people are the foundation of our success, and we encourage every employee to actively participate in their own career growth and development.
See Note 21 of “Notes to the Consolidated Financial Statements” for additional information about our reportable segments. In addition to reportable segments, we also review our business by operating groups.
See Note 21 of “Notes to the Consolidated Financial Statements” for additional information about our reportable segments. During the first quarter of 2024, we reorganized our operational structure to more closely align with our two reportable segments, Construction and Materials.
The anti-corruption provisions of the FCPA are enforced by the Department of Justice while other state or federal agencies may seek recourse against us for issues related 7 Table of Contents to the FCPA. In addition, the Securities and Exchange Commission (“SEC”) requires strict compliance with certain accounting and internal control standards set forth under the FCPA.
In addition, the Securities and Exchange Commission (“SEC”) requires strict compliance with certain accounting and internal control standards set forth under the FCPA. Failure to comply with the FCPA and other laws can expose us and/or individual employees to potentially severe criminal and civil penalties.
These totals do not include employees of unconsolidated joint ventures or employees of the newly acquired LRC/MSG businesses (see Note 2 of the “Notes to the Consolidated Financial Statements”). The total number of hourly personnel fluctuates with the volume of construction in progress and is seasonal. During 2023, the number of hourly employees ranged from approximately 1,800 to 4,000.
On December 31, 2024, we employed approximately 2,300 salaried employees who work in project, functional and business unit management, estimating and administrative capacities, plus approximately 2,100 hourly employees. These totals do not include employees of unconsolidated joint ventures. The total number of hourly personnel fluctuates with the volume of work in progress and is seasonal.
Failure to comply with the FCPA and other laws can expose us and/or individual employees to potentially severe criminal and civil penalties. Such penalties may have a material adverse effect on our business, results of operations and financial condition.
Such penalties may have a material adverse effect on our business, results of operations and financial condition. We devote resources to the development, maintenance, communication and enforcement of our Code of Conduct, our anti-bribery compliance policies, our internal control processes and compliance related policies.
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In alphabetical order, our operating groups are as follows: • California, which is comprised of vertically integrated businesses in home markets across the state; • Central, which includes the vertically integrated Arizona region and regional civil construction businesses in Illinois, Florida and Texas.
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We also produce construction materials for sale to third parties. We have vertically integrated operations across Alaska, Arizona, California, Mississippi, Nevada, Oregon, Tennessee, Utah and Washington in addition to regional civil construction home markets in Illinois, Florida and Texas.
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The Central group also includes the Federal division which performs civil construction across the continental United States and Guam, and the Tunnel division; and • Mountain, which is comprised of vertically integrated regional businesses in Alaska, Washington, Oregon, Utah and Nevada.
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Previously, leaders within our three former operating groups of California, Central and Mountain managed both Construction and Materials operations within each group. This change allows us to better leverage our expertise within each reportable segment with leadership having direct oversight of their respective segment operations.
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None of our customers had revenue that individually exceeded 10% of total revenue during the year ended December 31, 2021. 3 Table of Contents Business Strategy Granite exists to satisfy society’s needs for mobility, power, water and other essential services that sustain living conditions and improve quality of life.
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As a result of the reorganization, we will no longer disclose financial information by operating group. There were no material impacts to our consolidated financial statements and no changes to our reportable segments.
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In 2023, we strengthened and expanded our vertically integrated home markets with acquisitions of the Brunswick Canyon quarry and asphalt plant in Nevada; Coast Mountain Resources (2020) Ltd.
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Business Strategy As America's Infrastructure Company (TM), Granite satisfies society’s needs for mobility, power, water and other essential services that sustain living conditions and improve quality of life. Across our footprint of regional offices, we provide horizontal civil infrastructure construction services and construction materials products to a diverse base of public, industrial and commercial clients.
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("CMR"), a construction aggregate producer in British Columbia, Canada; and Lehman-Roberts Company and Memphis Stone & Gravel Company (collectively, "LRC/MSG"), asphalt paving and asphalt and aggregate producers and suppliers operating in the Memphis metropolitan market.
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We expanded our vertically integrated home markets with the 2024 acquisition of Dickerson & Bowen, Inc. ("D&B"), an aggregates, asphalt and highway construction company serving central and southern Mississippi.
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Our focus on inclusive diversity, talent development, talent acquisition, and succession planning has allowed us to build a bench of talented employees.
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Mr. Williams holds a B.S. in Civil Engineering from Ohio Northern University. 12 Table of Contents
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Our 2022 diversity and inclusion index survey result was 74%. Survey results represent employee responses to questions regarding our diversity and inclusion practices. Our next survey will be completed in 2024. We were also successful with our targeted talent acquisition plan to increase the participation of diverse colleges and universities.
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In 2023, our employees completed over 35,000 training courses and more than 300 employees ranging from emerging leaders to senior leaders graduated from our multi-level leadership development program.
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On an annual basis, we conduct succession planning reviews with senior leaders focusing on our high performing and high potential talent, diverse talent and succession for critical roles. Employee Engagement: We routinely engage independent third parties to conduct cultural and employee engagement surveys.
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We are committed to addressing the effects of climate change and currently have a priority target to reduce scope 1 greenhouse gas emissions by 25% by 2030 from a 2020 baseline. However, achievement of our sustainability commitments and targets is subject to risks and uncertainties, many of which are outside of our control. See “Item 1A.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

63 edited+21 added−8 removed115 unchanged
Biggest changeWe may not be able to accurately and timely report our financial results and/or we may not be able to detect errors on a timely basis if in the future we: (1) identify one or more material weaknesses in our internal control over financial reporting; (2) are unable to successfully remediate any future material weaknesses; (3) are unable to comply with the requirements of Section 404 in a timely manner; or (4) are unable to assert, or our independent registered public accounting firm is unable to attest, that our internal control over financial reporting is effective.This could result in: (i) our financial statements being materially misstated; (ii) investors losing confidence in the accuracy and completeness of our financial reports; (iii) the market price of our common stock decreasing; (iv) our liquidity and access to the capital markets being adversely affected; and (v) our inability to maintain compliance with applicable stock exchange listing requirements and debt covenants.
Biggest changeWe may not be able to accurately and timely report our financial results and/or we may not be able to detect errors on a timely basis if in the future we: (1) identify one or more material weaknesses in our internal control over financial reporting; (2) are unable to successfully remediate any future material weaknesses; (3) are unable to comply with the requirements of Section 404 in a timely manner; or (4) are unable to assert, or our independent registered public accounting firm is unable to attest, that our internal control over financial reporting is effective.
Such factors, which include the following, could have a material adverse effect on our business, financial condition and results of operations or the timing of contract payments from government agencies or authorities: • the failure of the U.S. government to complete its budget and appropriations process before its fiscal year-end; • changes in and delays or cancellations of government programs, procurements, requirements or appropriations; • budget constraints or policy changes resulting in delay or curtailment of expenditures related to the services we provide; • re-competes of government contracts; • the timing and amount of tax revenue received by federal, state and local governments, and the overall level of government expenditures; • curtailment in the use of government contracting firms; • delays associated with insufficient numbers of government staff to oversee contracts; • the increasing preference by government agencies for contracting with small and disadvantaged businesses; • competing political priorities and changes in the political climate regarding the funding or operation of the services we provide; • the adoption of new laws or regulations affecting our contracting relationships with the federal, state or local governments; • unsatisfactory performance on government contracts by us or one of our subcontractors, negative government audits or other events that may impair our relationship with federal, state or local governments; • a dispute with or improper activity by any of our subcontractors; and • general economic or political conditions. • Our U.S. federal government contracts may give government agencies the right to modify, delay, curtail, renegotiate or terminate existing contracts at their convenience at any time prior to their completion, which 13 Table of Contents could have a material adverse effect on our business, financial condition and results of operations.
Such factors, which include the following, could have a material adverse effect on our business, financial condition and results of operations or the timing of contract payments from government agencies or authorities: • the failure of the U.S. government to complete its budget and appropriations process before its fiscal year-end; • changes in and delays or cancellations of government programs, procurements, requirements or appropriations; • budget constraints or policy changes resulting in delay or curtailment of expenditures related to the services we provide; 13 Table of Contents • re-competes of government contracts; • the timing and amount of tax revenue received by federal, state and local governments, and the overall level of government expenditures; • curtailment in the use of government contracting firms; • delays associated with insufficient numbers of government staff to oversee contracts; • the preference by government agencies for contracting with small and disadvantaged businesses; • competing political priorities and changes in the political climate regarding the funding or operation of the services we provide; • the adoption of new laws or regulations affecting our contracting relationships with the federal, state or local governments; • unsatisfactory performance on government contracts by us or one of our subcontractors, negative government audits or other events that may impair our relationship with federal, state or local governments; • a dispute with or improper activity by any of our subcontractors; and • general economic or political conditions. • Our U.S. federal government contracts may give government agencies the right to modify, delay, curtail, renegotiate or terminate existing contracts at their convenience at any time prior to their completion, which could have a material adverse effect on our business, financial condition and results of operations.
Business,” the profitability of our fixed price and fixed unit price contracts can be adversely affected by a number of factors, including, among others, inflation, inefficiency and incorrect estimates or assumptions, that can cause our actual costs to materially exceed the costs estimated at the time of our original bid.
Business,” the profitability of our fixed price and fixed unit price contracts can be adversely affected by a number of factors, including, among others, inflation, tariffs, inefficiency and incorrect estimates or assumptions, that can cause our actual costs to materially exceed the costs estimated at the time of our original bid.
These risks and uncertainties include: • our ability to locate suitable acquirers for our divestitures; 16 Table of Contents • our ability to complete the divestitures in accordance with our expected plans or anticipated time frame, or at all; • our ability to complete the divestitures on terms and conditions acceptable to us; • difficulties separating the assets and personnel related to businesses that we expect to divest from the businesses we expect to retain; • that divestitures involve significant costs and require the time and attention of our management, which may divert management’s attention from ongoing operations; • our ability to successfully cause a buyer of a divested business to assume the liabilities of that business, or even if such liabilities are assumed, we may have difficulties enforcing our rights, contractual or otherwise against the buyer; • the need to obtain regulatory approvals and other third-party consents, which potentially could disrupt customer and vendor relationships; • potential additional tax obligations or the loss of tax benefits; • the divestiture could negatively impact our profitability because of losses that may result from a sale, the loss of revenue or a decrease in cash flows; and • following the completion of a divestiture, we may have less diversity in our business and in the markets we serve as well as our client base.
These risks and uncertainties include: • our ability to locate suitable acquirers for our divestitures; • our ability to complete the divestitures in accordance with our expected plans or anticipated time frame, or at all; • our ability to complete the divestitures on terms and conditions acceptable to us; • difficulties separating the assets and personnel related to businesses that we expect to divest from the businesses we expect to retain; • that divestitures involve significant costs and require the time and attention of our management, which may divert management’s attention from ongoing operations; • our ability to successfully cause a buyer of a divested business to assume the liabilities of that business, or even if such liabilities are assumed, we may have difficulties enforcing our rights, contractual or otherwise against the buyer; • the need to obtain regulatory approvals and other third-party consents, which potentially could disrupt customer and vendor relationships; • potential additional tax obligations or the loss of tax benefits; • the divestiture could negatively impact our profitability because of losses that may result from a sale, the loss of revenue or a decrease in cash flows; and • following the completion of a divestiture, we may have less diversity in our business and in the markets we serve as well as our client base.
Upon conversion of the 2.75% Convertible Notes and the 3.75% Convertible Notes, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.
Upon conversion of the 3.75% Convertible Notes, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.
If we are unable to service our debt obligations as a result of rising or higher interest rates or any other reason or fund our other liquidity needs, we could be forced to curtail our operations, reorganize our capital structure (including through bankruptcy proceedings) or liquidate some or all of our assets in a manner that could cause holders of our securities to experience a partial or total loss of their investment in us.
If we are unable to service our debt obligations as a result of rising or high interest rates or any other reason or fund our other liquidity needs, we could be forced to curtail our operations, reorganize our capital structure (including through bankruptcy proceedings) or liquidate some or all of our assets in a manner that could cause holders of our securities to experience a partial or total loss of their investment in us.
Our costs were and may continue to be subject to significant inflationary pressures, and we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could have a material adverse effect on our financial position, results of operations, cash flows and liquidity.
Our costs were and may continue to be subject to significant inflationary pressures and may be subject to tariff-related price increases, and we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could have a material adverse effect on our financial position, results of operations, cash flows and liquidity.
As of December 31, 2023, three of our wholly-owned subsidiaries, Granite Construction Company, Layne Christensen Company and Granite Industrial, Inc., participate in various domestic multi-employer pension plans on behalf of union employees. Union employee benefits generally are based on a fixed amount for each year of service.
As of December 31, 2024, three of our wholly-owned subsidiaries, Granite Construction Company, Layne Christensen Company and Granite Industrial, Inc., participate in various domestic multi-employer pension plans on behalf of union employees. Union employee benefits generally are based on a fixed amount for each year of service.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. • Conversion of our 2.75% Convertible Notes and our 3.75% Convertible Notes may dilute the ownership interest of existing stockholders and may affect the trading price of our common stock.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. • Conversion of our 3.25% Convertible Notes and our 3.75% Convertible Notes may dilute the ownership interest of existing stockholders and may affect the trading price of our common stock.
Such changes or impairment charges could have a material adverse effect on our financial position and results of operations. • A change in tax laws or regulations of any federal, state or international jurisdiction in which we operate could increase our tax burden and otherwise adversely affect our financial position, results of operations, cash flows and liquidity.
Such changes could have a material adverse effect on our financial position and results of operations. • A change in tax laws or regulations of any federal, state or international jurisdiction in which we operate could increase our tax burden and otherwise adversely affect our financial position, results of operations, cash flows and liquidity.
Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including our 2.75% Convertible Notes and our 3.75% Convertible Notes and the obligations under our Credit Agreement, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including our 3.25% Convertible Notes and our 3.75% Convertible Notes and the obligations under our Credit Agreement, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
In addition, increases in or sustained higher interest rates will result in higher interest expense related to borrowings under our Fourth Amended and Restated Credit Agreement, as amended (the “Credit Agreement”), which could have a material adverse effect on our business, results of operations and financial condition. • As part of our growth strategy, we have made and may make future acquisitions, and acquisitions involve many risks and uncertainties.
In addition, increases in or sustained higher interest rates will result in higher interest expense related to borrowings under our Fourth Amended and Restated Credit Agreement, as 16 Table of Contents amended (the “Credit Agreement”), which could have a material adverse effect on our business, results of operations and financial condition. • As part of our growth strategy, we have made and may make future acquisitions, and acquisitions involve many risks and uncertainties.
See definition of 2.75% Convertible Notes and 3.75% Convertible Notes in Note 14 to “Notes to the Consolidated Financial Statements.” • Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt.
See definition of 3.25% Convertible Notes and 3.75% Convertible Notes in Note 14 to “Notes to the Consolidated Financial Statements.” • Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt.
In addition, the Federal Acquisition Regulation 19 Table of Contents and various state statutes provide for discretionary suspension and/or debarment in certain circumstances that might call into question a contractor’s willingness or ability to act responsibly, including as a result of being convicted of, or being found civilly liable for, fraud or a criminal offense in connection with obtaining, attempting to obtain or performing a public contract or subcontract.
In addition, the Federal Acquisition Regulation and various state statutes provide for discretionary suspension and/or debarment in certain circumstances that might call into question a contractor’s willingness or ability to act responsibly, including as a result of being convicted of, or being found civilly liable for, fraud or a criminal offense in connection with obtaining, attempting to obtain or performing a public contract or subcontract.
Our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 2.75% Convertible Notes, our 3.75% Convertible Notes or our Credit Agreement would constitute an event of default under the indenture governing our 2.75% Convertible Notes, the indenture governing our 3.75% Convertible Notes or the Credit Agreement.
Our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 3.25% Convertible Notes, our 3.75% Convertible Notes or our Credit Agreement would constitute an event of default under the indenture governing our 3.25% Convertible Notes, the indenture governing our 3.75% Convertible Notes or the Credit Agreement.
In connection with any acquisitions, we may acquire liabilities or defects such as legal claims, including but not limited to, third party liability and other tort claims; claims for breach of contract; employment-related claims; environmental, health and safety liabilities, conditions or damage; permitting, regulatory or other compliance with law issues; or tax liabilities.
In connection with any acquisitions, we may acquire liabilities or defects such as legal claims, including but not limited to, 17 Table of Contents third party liability and other tort claims; claims for breach of contract; employment-related claims; environmental, health and safety liabilities, conditions or damage; permitting, regulatory or other compliance with law issues; or tax liabilities.
Such policy changes, including any enactment of increasingly stringent emissions or other environmental regulations, could increase the costs of supplies or projects for us and for our clients and, in some cases, delay or even prevent a project from going 23 Table of Contents forward, thereby potentially reducing demand for our services.
Such policy changes, including any enactment of increasingly stringent emissions or other environmental regulations, could increase the costs of supplies or projects for us and for our clients and, in some cases, delay or even prevent a project from going forward, thereby potentially reducing demand for our services.
The effect, if any, of these transactions and activities on the market price of our common stock will depend in part on market conditions and cannot be ascertained at this time, but these activities could adversely affect the market price of our common stock. • We are subject to counterparty risk with respect to the capped call transactions and the convertible note hedge transactions.
The effect, if any, of these transactions and activities on the market price of our common stock will depend in part on market conditions and cannot be ascertained at this time, but these activities could adversely affect the market price of our common stock. • We are subject to counterparty risk with respect to the capped call transactions.
Although strikes or work stoppages have not had 17 Table of Contents a significant impact on our operations or results in the past, such labor actions could have a significant impact on our operations and results if they occur in the future. • Failure of our subcontractors to perform as anticipated could have a negative impact on our results.
Although strikes or work stoppages have not had a significant impact on our operations or results in the past, such labor actions could have a significant impact on our operations and results if they occur in the future. • Failure of our subcontractors to perform as anticipated could have a negative impact on our results.
The option counterparties are financial institutions or affiliates of financial institutions, and we are subject to the risk that one or more of such option counterparties may default under the capped call transactions or convertible note hedge transactions. Our exposure to the credit risk of the option counterparties is not secured by any collateral.
The option counterparties are financial institutions or affiliates of financial institutions, and we are subject to the risk that one or more of such option counterparties may default under the capped call transactions. Our exposure to the credit risk of the option counterparties is not secured by any collateral.
Finally, the winding down or completion of work on significant projects that were active in previous periods will reduce our revenue and earnings if such significant projects have not been replaced in the current period.
Finally, the winding down or completion of work on significant projects that were active in 14 Table of Contents previous periods will reduce our revenue and earnings if such significant projects have not been replaced in the current period.
We could also become subject to stockholder or other third-party litigation as well as investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources and could result in fines, penalties, trading suspensions or other remedies.
We could also become subject to 21 Table of Contents stockholder or other third-party litigation as well as investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources and could result in fines, penalties, trading suspensions or other remedies.
The issuance of shares of our common stock upon conversion of our 2.75% Convertible Notes and our 3.75% Convertible Notes may dilute the ownership interests of existing stockholders.
The issuance of shares of our common stock upon conversion of our 3.25% Convertible Notes and our 3.75% Convertible Notes may dilute the ownership interests of existing stockholders.
The convertible note hedge transactions and the capped call transactions are expected generally to reduce the potential dilution to our common stock upon conversion of the 2.75% Convertible Notes and the 3.75% Convertible Notes and/or offset any cash payments we elect or are required to make in excess of the principal amount of converted notes, as the case may be.
The capped call transactions are expected generally to reduce the potential dilution to our common stock upon conversion of the 3.25% Convertible Notes and the 3.75% Convertible Notes and/or offset any cash payments we elect or are required to make in excess of the principal amount of converted notes,as the case may be.
Consequently, this could have a material adverse effect on our business, financial condition and results of operations. • We may be unable to achieve our sustainability commitments and targets which could result in the loss of investors and customers, a negative impact to our stock price and damage to our reputation.
Consequently, this could have a material adverse effect on our business, financial condition and results of operations. • We may be unable to achieve our sustainability commitments and targets which could result in the loss of investors and customers, a negative impact to our stock price and damage to our reputation. We are committed to advancing our sustainability strategy.
For the year ended December 31, 2023, approximately 70% of our construction revenue was funded by federal, state and local government agencies and authorities. A significant amount of this revenue is derived under multi-year contracts, many of which are appropriated on an annual basis.
For the year ended December 31, 2024, approximately 75% of our construction revenue was funded by federal, state and local government agencies and authorities. A significant amount of this revenue is derived under multi-year contracts, many of which are appropriated on an annual basis.
Such changes may adversely affect the revenue and profit we ultimately realize on these projects. • Rising or high inflation and/or interest rates could have an adverse effect on our business, financial condition and results of operations. Economic factors, including inflation and rising and/or high interest rates, could have a negative impact on our business.
Such changes may adversely affect the revenue and profit we ultimately realize on these projects. • Economic factors, including inflation, rising and/or high interest rates and tariffs could have an adverse effect on our business, financial condition and results of operations.
A default under the indenture governing our 2.75% Convertible Notes or the indenture governing our 3.75% Convertible Notes could result in acceleration of the maturity of the notes.
A default under the indenture governing our 3.25% Convertible Notes or the indenture governing our 3.75% Convertible Notes could result in acceleration of the maturity of the notes.
If any option counterparty becomes subject to bankruptcy or other insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transaction or convertible note hedge transaction with such option counterparty, respectively.
If any option counterparty becomes subject to bankruptcy or other insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transaction with such option counterparty.
Although we have thus far been able to secure reserves to support our business, our financial position, results of operations, cash flows and liquidity may be adversely affected by an increasingly difficult permitting process. • Accounting for our revenues, costs, goodwill and acquired intangible assets involves significant estimates. As further described in “Critical Accounting Estimates” under “Item 7.
Although we have thus far been able to secure reserves to support our business, our financial position, results of operations, cash flows and liquidity may be adversely affected by an increasingly difficult permitting process. • Accounting for our revenues and cost involves significant estimates. As further described in “Critical Accounting Estimates” under “Item 7.
These factors could have a material adverse effect on the financial market and economic conditions in the United States as well as throughout the world, which may limit our ability and the ability of our customers to obtain financing and/or could impair our ability to execute our strategy.
These factors could have a material adverse effect on the financial market and economic conditions in the United States as well as throughout the world, which may limit our ability and the ability of our customers to obtain financing and/or could impair our ability to execute our strategy. • We work in a highly competitive marketplace.
Volatility in the global financial system, deterioration in general economic activity, inflation, rising or high interest rates, supply chain issues, the War in Ukraine, the Israel-Hamas War, other political, social or economic uncertainties, and fiscal, monetary and other policies that federal, state and local governments may enact, including infrastructure spending or deficit reduction measures, may have an adverse impact on our business, financial position, results of operations, cash flows and liquidity.
Volatility in the global financial system, deterioration in general economic activity, inflation, rising or high interest rates, tariffs, supply chain issues, wars or other geopolitical tensions, other political, social or economic uncertainties, and fiscal, monetary and other policies that federal, state and local governments may enact, including infrastructure spending or deficit reduction measures, may have an adverse impact on our business, financial position, results of operations, cash flows and liquidity.
Approximately 70% of our construction-related revenue in 2023 was derived from contracts funded by federal, state and local government agencies and authorities. Government contracts are subject to specific procurement regulations, contract provisions and a variety of socioeconomic requirements relating to their formation, administration, performance and accounting and often include express or implied certifications of compliance.
Approximately 75% of our construction-related revenue in 2024 was derived from contracts funded by federal, state and local 19 Table of Contents government agencies and authorities. Government contracts are subject to specific procurement regulations, contract provisions and a variety of socioeconomic requirements relating to their formation, administration, performance and accounting and often include express or implied certifications of compliance.
Any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. • The convertible note hedge and warrant transactions related to our 2.75% Convertible Notes and the capped call transactions related to our 3.75% Convertible Notes may affect the value of our common stock.
Any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. • The capped call transactions related to our 3.25% Convertible Notes and our 3.75% Convertible Notes may affect the value of our common stock.
Management’s Discussion and Analysis of 20 Table of Contents Financial Condition and Results of Operations,” and in "Use of Estimates in Preparation of Financial Statements," "Revenue Recognition" and "Goodwill" within Note 1 of the "Notes to the Consolidated Financial Statements," accounting for our contract-related revenues and costs, as well as other expenses, goodwill and acquired intangible assets requires management to make a variety of significant estimates and assumptions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in "Use of Estimates in Preparation of Financial Statements," and "Revenue Recognition" within Note 1 of the "Notes to the Consolidated Financial Statements," accounting for our contract-related revenues and costs, as well as other expenses requires management to make a variety of significant estimates and assumptions.
Although we are partially protected by asphalt or fuel price escalation clauses in some of our contracts, many contracts provide no such protection. We also use steel and other commodities in our construction projects that can be subject to significant price fluctuations.
Although we are partially protected by asphalt or fuel price escalation clauses in some of our contracts, many contracts provide no such protection. We also use steel and other commodities in our construction projects that can be subject to significant price fluctuations due to a number of factors, including inflation and tariffs.
If a failure of our safeguarding measures were to occur, or if software or third-party vendors that support our information technology environment are compromised, it could have a negative impact to our business and result in business interruptions, remediation costs and/or legal claims, which could have a material adverse effect on our financial position, results of operations, cash flows and liquidity.
If a failure of our cybersecurity defense measures were to occur, or if software or third-party vendors that support our information technology environment are compromised, it could have a negative impact to our business and result in business interruptions, remediation costs and/or legal claims, which could have a material adverse effect on our financial position, results of operations, cash flows and liquidity. • Artificial intelligence presents risks and challenges that could have a material adverse effect on our business, results of operations and financial condition.
Violations of FCPA laws, allegations of such violations and/or disclosure related to any relevant investigation could have a material adverse impact on our financial position, results of operations, cash flows and liquidity for reasons including, but not limited to, an adverse effect on our reputation, our ability to obtain new business or retain existing business, to attract and retain employees, to access the capital markets and/or could give rise to an event of default under the agreements governing our debt instruments.
Violations of FCPA laws, allegations of such violations and/or disclosure related to any relevant investigation could have a material adverse impact on our financial position, results of operations, cash flows and liquidity for reasons including, but not limited to, an adverse effect on our reputation, our ability to obtain new business or retain existing business, to attract and retain employees, to access the capital markets and/or could give rise to an event of default under the agreements governing our debt instruments. • We restated our consolidated financial statements for certain prior periods, which affected and may continue to affect our business, results of operations and financial condition.
The ability of our Board of Directors to create and issue a new series of preferred stock and certain provisions of Delaware law and our certificate of incorporation and bylaws could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce potential increases in the market price of our common stock.
The ability of our Board of Directors to create and issue a new series of preferred stock and certain provisions of Delaware law and our certificate of incorporation and bylaws could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce potential increases in the market price of our common stock. • Our bylaws include a forum selection clause, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Further, if the market price per share of our common stock exceeds the cap price ($79.83) of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.
Further, if the market price per share of our common stock exceeds the cap price of the capped call transactions ($79.83 for the capped call transactions related to the 3.75% Convertible Notes and $119.82 for the capped call transactions related to our 3.25% Convertible Notes), there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.
Our inability to obtain reasonably priced surety bonds in the future and, while we monitor the financial health of our insurers and the insurance market, catastrophic events could reduce available limits or the breadth of coverage, both of which could significantly affect our ability to be awarded new contracts and could, therefore, have a material adverse effect on our business, results of operations and financial condition. • We use certain commodity products that are subject to significant price fluctuations.
Our inability to obtain reasonably priced surety bonds in the future and, while we monitor the financial health of our insurers and the insurance market, catastrophic events could reduce available limits or the breadth of coverage, both of which could significantly affect our ability to be awarded new 15 Table of Contents contracts and could, therefore, have a material adverse effect on our business, results of operations and financial condition.
Additionally, in connection with establishing their initial hedge of the convertible note hedge and warrant transactions and the capped call transactions, the option counterparties may have entered into various derivative transactions with respect to our common stock.
Additionally, in connection with establishing the capped call transactions, the option counterparties may have entered into various derivative transactions with respect to our common stock.
The 2.75% Convertible Notes and the 3.75% Convertible Notes are convertible into shares of our common stock at the option of the holders upon the occurrence of certain events and/or during certain periods.
The 3.25% Convertible Notes and the 3.75% Convertible Notes are convertible at the option of the holders upon the occurrence of certain events and/or during certain periods.
We are committed to advancing our environmental, social and governance strategy. However, achievement of our sustainability commitments and targets is subject to risks and uncertainties, many of which are outside of our control.
However, achievement of our sustainability commitments and targets is subject to risks and uncertainties, many of which are outside of our control.
We remain obligated to perform our services after most extraordinary events subject to relief that may be available pursuant to a force majeure clause. 15 Table of Contents If we are not able to react quickly to force majeure events, our operations may be affected, which could have a material adverse effect on our business, results of operations and financial condition. • Public health events, including health epidemics or pandemics or other contagious outbreaks, could negatively impact our business, financial condition and results of operations.
If we are not able to react quickly to force majeure events, our operations may be affected, which could have a material adverse effect on our business, results of operations and financial condition. • Public health events, including health epidemics or pandemics or other contagious outbreaks, could negatively impact our business, financial condition and results of operations.
Additionally, we previously restated certain periods in 2019 and prior to correct misstatements associated with project forecasts in our former 18 Table of Contents Heavy Civil operating group, which is now part of our Central operating group.
Additionally, we previously restated certain periods in 2019 and prior to correct misstatements associated with project forecasts in our former Heavy Civil operating group.
However, if such proposals were to be enacted, or if modifications were to be made to certain existing regulations, the consequences could have a material adverse impact on us, including increasing our tax burden, increasing our cost of tax compliance or otherwise adversely affecting our financial position, results of operations, cash flows and liquidity.
However, if such proposals were to be enacted, or if modifications were to be made to certain existing regulations, the consequences could have a material adverse impact on us, including increasing our tax burden, increasing our cost of tax compliance or otherwise adversely affecting our financial position, results of operations, cash flows and liquidity. 20 Table of Contents • We may be exposed to liabilities under the FCPA and any determination that we or any of our subsidiaries has violated the FCPA could have a material adverse effect on our business.
The potential gross profit impact of recoveries for affirmative claims may be material in future periods when they, or a portion of them, become probable and estimable or are settled.
For additional information, see "—Accounting for our revenues and costs involve significant estimates" risk factor below. The potential gross profit impact of recoveries for affirmative claims may be material in future periods when they, or a portion of them, become probable and estimable or are settled.
The foregoing list is not all-inclusive. There can be no assurance that we have correctly identified and appropriately assessed all factors affecting our business or that the publicly available and other information with respect to these matters is complete and correct.
There can be no assurance that we have correctly identified and appropriately assessed all factors affecting our business or that the publicly available and other information with respect to these matters is complete and correct. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect us.
In addition, if our partners are not able or willing to provide their share of capital investment to fund the operations of the venture, there could be unanticipated costs to complete the projects, financial penalties or liquidated damages. These situations could have a material adverse effect on our financial position, results of operations, cash flows and liquidity.
In addition, if our partners are not able or willing to provide their share of capital investment to fund the operations of the venture, there could be 18 Table of Contents unanticipated costs to complete the projects, financial penalties or liquidated damages.
In connection with our 2.75% Convertible Notes offering, we entered into convertible note hedge transactions and warrant transactions with option counterparties. Additionally, in connection with our 3.75% Convertible Notes offering, we entered into capped call transactions with option counterparties.
In connection with our 3.25% Convertible Notes offering 23 Table of Contents and our 3.75% Convertible Notes offering, we entered into capped call transactions with option counterparties.
If we are unable to meet our commitments and targets and appropriately address sustainability enhancement, we may lose investors, customers or partners, our stock price may be negatively impacted, our reputation may be negatively affected and it may be more difficult for us to compete effectively, all of which could have an adverse effect on our business, financial condition and results of operations, as well as on the price of our common stock.
If we are unable to meet our commitments and targets and appropriately address sustainability enhancement, we may lose investors, customers or partners, our stock price may be negatively impacted, our reputation may be negatively affected and it may be more difficult for us to compete effectively, all of which could have an adverse effect on our business, financial condition and results of operations, as well as on the price of our common stock. 25 Table of Contents In addition, new laws, regulations and policies relating to matters such as sustainability, climate change, human capital and diversity, are being developed and formalized in the United States, which may entail specific, target-driven frameworks and/or disclosure requirements.
In certain circumstances, we assert affirmative claims to which we believe we are entitled against project owners, engineers, consultants, subcontractors or others involved in a project for additional costs exceeding the contract price or for amounts not included in the original contract price. 14 Table of Contents These types of affirmative claims occur due to matters such as delays or changes from the initial project scope, both of which may result in additional costs.
In certain circumstances, we assert affirmative claims to which we believe we are entitled against project owners, engineers, consultants, subcontractors or others involved in a project for additional costs exceeding the contract price or for amounts not included in the original contract price.
If negative market conditions arise, or if we fail to secure adequate financial arrangements or the required government approval, we may not be able to pursue certain projects, which could have a material adverse effect on our business, financial condition and results of operations. • The timing of new contracts and termination of existing contracts may result in unpredictable fluctuations in our cash flows and financial results.
If negative market conditions arise, or if we fail to secure adequate financial arrangements or the required government approval, we may not be able to pursue certain projects, which could have a material adverse effect on our business, financial condition and results of operations. • The U.S. government may adopt new contract rules and regulations or revise its procurement practices in a manner adverse to us at any time.
We typically negotiate contract language where we are allowed certain relief from force majeure events in private client contracts and review and attempt to mitigate force majeure events in both public and private client contracts.
We typically negotiate contract language where we are allowed certain relief from force majeure events in private client contracts and review and attempt to mitigate force majeure events in both public and private client contracts. We remain obligated to perform our services after most extraordinary events subject to relief that may be available pursuant to a force majeure clause.
Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect us. These developments could have material adverse effects on our business, financial condition, results of operations and liquidity. For these reasons, the reader is cautioned not to place undue reliance on our forward-looking statements. Item 1B.
These developments could have material adverse effects on our business, financial condition, results of operations and liquidity. For these reasons, the reader is cautioned not to place undue reliance on our forward-looking statements. 26 Table of Contents Item 1B. UNRESOLVED STAFF COMMENTS None.
To the extent we are not the controlling partner, we have limited control over many of the decisions made with respect to the related construction projects. These joint ventures may not be subject to the same compliance requirements, including those related to internal control over financial reporting.
These joint ventures may not be subject to the same compliance requirements, including those related to internal control over financial reporting.
In addition, while clients and subcontractors may be obligated to indemnify us against certain liabilities, such third parties may refuse or be unable to pay us. • Our financial position could be impacted by worse than anticipated results in our Central operating group.
In addition, while clients and subcontractors may be obligated to indemnify us against certain liabilities, such third parties may refuse or be unable to pay us. • Unavailability of insurance coverage could have a negative effect on our operations and results.
We have been and may in the future be subject to cybersecurity incidents, which may be through the use of ransomware and other forms of unauthorized access of our digital data with the intent to misappropriate information, corrupt data or cause operational disruptions. 21 Table of Contents Additionally, the increased prevalence and use of artificial intelligence may heighten the risk that we may be subject to cybersecurity incidents in the future.
We have experienced and may continue to face cybersecurity incidents, including ransomware and unauthorized access, aimed at misappropriating information, corrupting data or causing operational disruptions. Additionally, the increased prevalence and use of artificial intelligence may heighten the risk that we may be subject to cybersecurity incidents in the future.
Also see "Intangible assets" within Note 2 of the "Notes to the Consolidated Financial Statements." These assumptions and estimates may change significantly in the future and could result in the reversal of previously recognized revenue and profit or material impairment charges.
These assumptions and estimates may change significantly in the future and could result in the reversal of previously recognized revenue and profit.
Often, these affirmative claims can be the subject of lengthy arbitration or litigation proceedings, and it is difficult to accurately predict when and on what terms they will be fully resolved. For additional information, see "—Accounting for our revenues and costs involve significant estimates" risk factor below.
These types of affirmative claims occur due to matters such as delays or changes from the initial project scope, both of which may result in additional costs. Often, these affirmative claims can be the subject of lengthy arbitration or litigation proceedings, and it is difficult to accurately predict when and on what terms they will be fully resolved.
Various statutes to which our operations are subject, including, among others, the Davis-Bacon Act (which regulates wages and benefits), the Walsh-Healy Act (which prescribes a minimum wage and regulates overtime and working conditions), Executive Order 11246 (which establishes equal employment opportunity and affirmative action requirements) and the Drug-Free Workplace Act, provide for mandatory suspension and/or debarment of contractors in certain circumstances involving statutory violations.
Various statutes and executive orders to which our operations are subject provide for mandatory suspension and/or debarment of contractors in certain circumstances involving statutory violations.
Underperformance in our Central operating group could have a material adverse effect on our business, results of operations and financial condition. • Unavailability of insurance coverage could have a negative effect on our operations and results.
If we are unable to adopt and implement these tools in a cost-effective, timely manner or at all, it could cause competitive harm and/or have a material adverse effect on our business, results of operations and financial condition.
Removed
In addition, levels of new commercial and residential construction 12 Table of Contents projects could be adversely affected by oversupply of existing inventories of commercial and residential properties, low property values and a restrictive financing environment. • We work in a highly competitive marketplace.
Added
From time to time, new laws and regulations are enacted, and government agencies adopt new interpretations and enforcement priorities relative to laws and regulations already in effect.
Removed
In 2020, we completed a strategic review of our former Heavy Civil operating group, which is now part of our Central operating group, and have taken actions that we believe will be beneficial to us and our stockholders. However, the results of our planned actions, and the timing of expected benefits, remain uncertain.
Added
Legislation, regulations and initiatives dealing with procurement reform as well as any resulting shifts in the buying practices of U.S. government agencies could have adverse effects on government contractors, including us. • The timing of new contracts and termination of existing contracts may result in unpredictable fluctuations in our cash flows and financial results.
Removed
RISKS RELATED TO RESTATEMENTS • We have restated our consolidated financial statements for certain prior periods, which has affected and may continue to affect our business, results of operations and financial condition.
Added
If we are not able to maintain a sufficient level of bonding capacity in the future, it could preclude our ability to bid for certain contracts or successfully contract with some customers.
Removed
For example, the OECD (Organisation for Economic Co-operation and Development) has proposed a global minimum tax of 15% of reported profits (Pillar 2) that has been agreed upon in principle by over 140 countries. During 2023, many countries took steps to incorporate Pillar 2 model rule concepts into their domestic laws.
Added
Additionally, even if we continue to be able to access bonding capacity to sufficiently bond future work, we may be required to post collateral to secure bonds, which would decrease the liquidity we would have available for other purposes. • We use certain commodity products that are subject to significant price fluctuations.
Removed
Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar 2.
Added
These situations could have a material adverse effect on our financial position, results of operations, cash flows and liquidity. To the extent we are not the controlling partner, we have limited control over many of the decisions made with respect to the related construction projects.
Removed
Accordingly, we still are evaluating the potential consequences of Pillar 2 on our longer-term financial position. • We may be exposed to liabilities under the FCPA and any determination that we or any of our subsidiaries has violated the FCPA could have a material adverse effect on our business.
Added
This could result in: (i) our financial statements being materially misstated; (ii) investors losing confidence in the accuracy and completeness of our financial reports; (iii) the market price of our common stock decreasing; (iv) our liquidity and access to the capital markets being adversely affected; and (v) our inability to maintain compliance with applicable stock exchange listing requirements and debt covenants.
Removed
However, the warrant transactions could separately have a dilutive effect on our common stock to the extent that the market price per share of our common stock exceeds the strike price of the warrants ($53.44 per share) 22 Table of Contents and we deliver shares of our common stock upon exercise of such warrants instead of paying cash.
Added
As of the date of this filing, we have developed pilot programs to implement certain third-party generative artificial intelligence (“AI”) and predictive analytics tools into our systems for specific purposes. These tools presently include, without limitation, (i) a knowledge retention tool, (ii) a risk detection tool and (iii) a virtual assistant tool.
Removed
There is no assurance that we will be able to successfully implement our strategies and achieve our targets. Investors have recently increased their focus on environmental, social and governance matters, including practices related to greenhouse gas emissions and climate change. Additionally, an increasing percentage of the investment community considers sustainability factors in making investment decisions.
Added
There is a risk that such AI tools (or AI tools used without Company approval) will be used in a manner that does not adhere to our AI policy and/or may be misused by our employees, vendors, or other third parties engaged by us.
Added
This, in turn, could result in the loss of confidential or proprietary information and subject us to competitive or reputational harm, as well as potential regulatory investigations/actions and/or legal liability.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+2 added−0 removed13 unchanged
Biggest changeTechnical Safeguards: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. 24 Table of Contents Incident Response Planning: We have established and maintain an incident response plan that outlines our response in the event of a cybersecurity incident.
Biggest changeTechnical Safeguards: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
The Cybersecurity Committee reports to our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), Chief Operating Officer (“COO”), Senior Vice President, Human Resources ("SVP HR") and Senior Vice President and General Counsel.
The Cybersecurity Committee reports to our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), Chief Operating Officer (“COO”), Senior Vice President, 27 Table of Contents Human Resources ("SVP HR") and Senior Vice President and General Counsel.
The Cybersecurity team (including the CIO) have a combined 80+ years of cybersecurity experience and hold multiple certifications across the cybersecurity landscape. Our CEO, CFO, COO, SVP HR and Senior Vice President and General Counsel each hold undergraduate degrees, graduate degrees or professional certifications in their respective fields, and each have significant experience managing risk.
The Cybersecurity team (including the CIO) has extensive cybersecurity experience and hold multiple certifications across the cybersecurity landscape. Our CEO, CFO, COO, SVP HR and Senior Vice President and General Counsel each hold undergraduate degrees, graduate degrees or professional certifications in their respective fields, and each have significant experience managing risk.
Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect our business strategy, results of operations or financial condition. See "Risks Related to Information Technology" in Item 1A. Risk Factors.
Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected, and we do not believe are reasonably likely to materially affect, us, including our business strategy, results of operations or financial condition.
Third-Party Assessments: We periodically assess and test our policies, standards, processes and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability testing and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability testing and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
Added
Incident Response Planning: We have established and maintain an incident response plan that outlines our response in the event of a cybersecurity incident. Third-Party Assessments: We periodically assess and test our policies, standards, processes and practices that are designed to address cybersecurity threats and incidents.
Added
However, due to evolving cybersecurity threats, it may not be possible to anticipate, prevent or stop future cybersecurity incidents, including attacks on our information systems and data or those of our relevant business partners. See "Risks Related to Information Technology" in Item 1A. Risk Factors.

Item 2. Properties

Properties — owned and leased real estate

20 edited+3 added−0 removed14 unchanged
Biggest changeThe following table presents information about mineral reserves at December 31, 2023 (tons in millions): Proven Mineral Reserves Probable Mineral Reserves Total Mineral Reserves Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Sand and Gravel: California Coalinga 116.8 Sand and Gravel — — 116.8 Sand and Gravel All other California 232.6 Sand and Gravel 7.6 Sand and Gravel 240.2 Sand and Gravel Total California 349.4 — 7.6 — 357.0 — Utah 113.3 Sand and Gravel 0.1 Sand and Gravel 113.4 Sand and Gravel All other states/provinces 151.8 Sand and Gravel 15.2 Sand and Gravel 167.0 Sand and Gravel Total 614.5 — 22.9 — 637.4 — Hard Rock: California Handley Quarry 144.3 Hard Rock — — 144.3 Hard Rock All other California 59.1 Hard Rock — — 59.1 Hard Rock Total California 203.4 — — — 203.4 — Utah 27.8 Hard Rock — — 27.8 Hard Rock All other states/provinces 78.5 Hard Rock 65.6 Hard Rock 144.1 Hard Rock Total 309.7 — 65.6 — 375.3 — Grand Total 924.2 — 88.5 — 1,012.7 — (1) The grade of product produced is contingent on market needs.
Biggest changeThe following table presents information about mineral reserves at December 31, 2024 (tons in millions): Proven Mineral Reserves Probable Mineral Reserves Total Mineral Reserves Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Sand and Gravel: California Coalinga 115.5 Sand and Gravel — — 115.5 Sand and Gravel Solari 106.4 Sand and Gravel 8.2 Sand and Gravel 114.6 Sand and Gravel All other California 148.1 Sand and Gravel 8.8 Sand and Gravel 156.9 Sand and Gravel Total California 370.0 — 17.0 — 387.0 — Utah Grantsville 99.0 Sand and Gravel — — 99.0 Sand and Gravel All other Utah 12.8 Sand and Gravel 0.1 Sand and Gravel 12.9 Sand and Gravel Total Utah 111.8 — 0.1 — 111.9 — All other states/provinces 130.6 Sand and Gravel 56.1 Sand and Gravel 186.7 Sand and Gravel Total 612.4 — 73.2 — 685.6 — Hard Rock: California Handley Quarry 144.0 Hard Rock — — 144.0 Hard Rock All other California 58.2 Hard Rock — — 58.2 Hard Rock Total California 202.2 — — — 202.2 — Utah 27.1 Hard Rock — — 27.1 Hard Rock Lockwood Mustang (Nevada) 17.7 Hard Rock 32.0 Hard Rock 49.7 Hard Rock Bamberton Quarry (Canada) 39.8 Hard Rock — — 39.8 Hard Rock All other states/provinces 20.6 Hard Rock 32.4 Hard Rock 53.0 Hard Rock Total 307.4 — 64.4 — 371.8 — Grand Total 919.8 — 137.6 — 1,057.4 — (1) The grade of product produced is contingent on market needs.
The risk that these estimates would be unreasonable based on the known information is mitigated by the following internal controls that we use in our exploration and mineral resource and mineral reserve estimation efforts: • quality control and quality assurance programs including management identifying the qualified person(s) with the appropriate background and qualifications to prepare the information used for disclosure purposes; • verification of analytical procedures including management reviewing the mineral resource and reserve report information for completeness, accuracy and appropriateness, such as categorization, inclusion of technical, economic and operational factors, discounted cash flow analysis inputs, assumptions and calculations, and mining, metallurgical, legal, environmental, social and governmental modifying factors as well as comparison of estimates to historic production and prior period estimates; and • review of disclosures to ensure compliance with requirements.
The risk that these estimates would be unreasonable based on the known information is mitigated by the following internal controls that we use in our exploration and mineral resource and mineral reserve estimation efforts: • quality control and quality assurance programs including management identifying the qualified person(s) with the appropriate background and qualifications to prepare the information used for disclosure purposes; • verification of analytical procedures including management reviewing the mineral resource and reserve report information for completeness, accuracy and appropriateness, such as categorization, inclusion of technical, economic and operational factors, discounted cash flow analysis inputs, assumptions and calculations, and mining, metallurgical, legal, environmental compliance and governmental modifying factors as well as comparison of estimates to historic production and prior period estimates; and • review of disclosures to ensure compliance with requirements.
Additional subsurface work may be needed prior to mining the reserve. The modifying factors applied in the conversion of measured and indicated mineral resources to proven and probable mineral reserves during the year ended December 31, 2023 included various relevant technical and economic factors, including site infrastructure, mine design and planning, processing plant and environmental compliance and permitting.
Additional subsurface work may be needed prior to mining the reserve. The modifying factors applied in the conversion of measured and indicated mineral resources to proven and probable mineral reserves during the year ended December 31, 2024 included various relevant technical and economic factors, including site infrastructure, mine design and planning, processing plant and environmental compliance and permitting.
As of December 31, 2023, we had open pit quarry properties available for the extraction of sand, gravel and hard rock. Our Materials segment uses these quarry properties to extract and process sand, gravel and hard rock into construction material for internal use in our construction projects and for sale to third parties.
As of December 31, 2024, we had open pit quarry properties available for the extraction of sand, gravel and hard rock. Our Materials segment uses these quarry properties to extract and process sand, gravel and hard rock into construction material for internal use in our construction projects and for sale to third parties.
As of December 31, 2023, we had all the permits necessary to mine and process sand, gravel and hard rock at our active quarry properties. As of December 31, 2023, no individual mining operation was considered material to our business or financial condition.
As of December 31, 2024, we had all the permits necessary to mine and process sand, gravel and hard rock at our active quarry properties. As of December 31, 2024, no individual mining operation was considered material to our business or financial condition.
The basis of determining the modifying factors was a combination of historical experience mining aggregates and observation. As of December 31, 2023, our qualified persons estimated our proven and probable reserves to be approximately 1.0 billion tons. Waste factors for proven and probable reserves range up to 44% depending on the deposit type, market characteristics and extraction feasibility.
The basis of determining the modifying factors was a combination of historical experience mining aggregates and observation. As of December 31, 2024, our qualified persons estimated our proven and probable reserves to be approximately 1.1 billion tons. Waste factors for proven and probable reserves range up to 44% depending on the deposit type, market characteristics and extraction feasibility.
Sites typically sell base products that range from low to high grades including fill materials, base aggregates, hot mix aggregates and concrete aggregates. Internal controls Mining operations include risk in estimation of mineral reserves and mineral resources that could be impacted by unforeseen geologic circumstances, changes in regulation or changes in sales and customers.
Sites typically sell base products that range from low to high grades including fill materials, base aggregates, hot mix aggregates and concrete aggregates. 31 Table of Contents Internal controls Mining operations include risk in estimation of mineral reserves and mineral resources that could be impacted by unforeseen geologic circumstances, changes in regulation or changes in sales and customers.
The following map shows the approximate locations of our permitted quarry properties as of December 31, 2023: 26 Table of Contents California and Utah are the only states/provinces that individually comprise more than 10% of our total mining operations.
The following map shows the approximate locations of our permitted quarry properties as of December 31, 2024: 28 Table of Contents California and Utah are the only states/provinces that individually comprise more than 10% of our total mining operations.
As of December 31, 2023, our qualified persons estimated our measured, indicated and inferred resources to be approximately 277.0 million tons. As of December 31, 2023, California and Utah were the only individual states/provinces that comprised more than 10% of our total mining operations.
As of December 31, 2024, our qualified persons estimated our measured, indicated and inferred resources to be approximately 494.9 million tons. As of December 31, 2024, California and Utah were the only individual states/provinces that comprised more than 10% of our total mining operations.
Annual production of aggregates for all mining properties was 17.5 million tons, 16.3 million tons, and 16.0 million tons during the years ended December 31, 2023, 2022 and 2021, respectively.
Annual production of aggregates for all mining properties was 18.7 million tons, 17.5 million tons, and 16.3 million tons during the years ended December 31, 2024, 2023 and 2022, respectively.
Our leases have terms which range from month-to-month to 50 years with most including an option to renew. The life cycle of mining sand, gravel and hard rock begins with exploration and continues through development and production. After a sand, gravel and hard rock deposit has been identified through exploration, the mine is developed before production begins.
Our leases have terms which range from month-to-month to 50 years with most including an option to renew. The life cycle of mining sand, gravel and hard rock begins with exploration and continues through development and production.
The Wine Group and Aerojet North White Rock were the only mines that comprised 10% or more of our combined measured and indicated mineral resources for sand and gravel and the Euer Ranch was the only mine that comprised 10% or more of our combined measured and indicated mineral 27 Table of Contents resources for hard rock.
The Wine Group, Aerojet North White Rock and Coalinga Section 30 were the only mines that comprised 10% or more of our combined measured and indicated mineral resources for sand and gravel and the Euer Ranch and Bamberton Quarry were the only mines that comprised 10% or more of our combined measured and indicated mineral resources for hard rock.
Item 3. LEGAL PROCEEDINGS The description of the matters set forth in Note 20 of “Notes to the Consolidated Financial Statements” is incorporated herein by reference.
These plants are used by both of our reportable segments. Item 3. LEGAL PROCEEDINGS The description of the matters set forth in Note 20 of “Notes to the Consolidated Financial Statements” is incorporated herein by reference.
The following table presents the number of properties in each respective stage as of December 31, 2023 for all mining properties: State/Province Exploration Development Production California 8 3 20 Utah 1 2 7 All other states/provinces 11 7 39 Total 20 12 66 Mineral Resources The table below presents information on measured, indicated and inferred mineral resources.
The following table presents the number of properties in each respective stage as of December 31, 2024 for all mining properties: State/Province Exploration Development Production California 5 4 22 Utah 1 2 7 All other states/provinces 6 9 47 Total 12 15 76 Mineral Resources The table below presents information on measured, indicated and inferred mineral resources.
As of December 31, 2023, California and Utah were the only individual states/provinces that comprised more than 10% of our total mining operations, Coalinga was the only mine that comprised 10% or more of our mineral reserves for sand and gravel and Handley Quarry was the only mine that comprised 10% or more of our mineral 28 Table of Contents reserves for hard rock.
As of December 31, 2024, California and Utah were the only individual states/provinces that comprised more than 10% of our total mining operations, Coalinga, Solari and Grantsville were the only mines that comprised 10% or more of our mineral reserves for sand and gravel and Handley Quarry, Lockwood Mustang and Bamberton Quarry were the only mines that comprised 10% or more of our mineral reserves for hard rock.
The following table presents information about our mineral resources at December 31, 2023 (tons in millions): Measured Mineral Resources Indicated Mineral Resources Measured + Indicated Mineral Resources Inferred Mineral Resources Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Sand and Gravel: California The Wine Group — — 51.4 Sand and Gravel 51.4 Sand and Gravel — — Aerojet North White Rock 32.0 Sand and Gravel — — 32.0 Sand and Gravel — — All other California 15.4 Sand and Gravel 19.5 Sand and Gravel 34.9 Sand and Gravel — — Total California 47.4 — 70.9 — 118.3 — — — Utah 3.9 Sand and Gravel — — 3.9 Sand and Gravel — — All other states/provinces 9.0 Sand and Gravel 3.0 Sand and Gravel 12.0 Sand and Gravel 8.4 Sand and Gravel Total 60.3 — 73.9 — 134.2 — 8.4 — Hard Rock: California Euer Ranch 71.7 Hard Rock — — 71.7 Hard Rock — — All other California 9.9 Hard Rock — — 9.9 Hard Rock — — Total California 81.6 — — — 81.6 — — — Utah 9.6 Hard Rock — — 9.6 Hard Rock — — All other states/provinces 10.2 Hard Rock — — 10.2 Hard Rock 33.0 Hard Rock Total 101.4 — — — 101.4 — 33.0 — Grand Total 161.7 — 73.9 — 235.6 — 41.4 — (1) The grade of product produced is contingent on market needs.
The following table presents information about our mineral resources at December 31, 2024 (tons in millions): Measured Mineral Resources Indicated Mineral Resources Measured + Indicated Mineral Resources Inferred Mineral Resources Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Amount (tons) Grades / qualities (1) Sand and Gravel: California The Wine Group — — 51.4 Sand and Gravel 51.4 Sand and Gravel — — Aerojet North White Rock 32.0 Sand and Gravel — — 32.0 Sand and Gravel — — Coalinga Section 30 — — 18.0 Sand and Gravel 18.0 Sand and Gravel — — All other California 15.4 Sand and Gravel 1.6 Sand and Gravel 17.0 Sand and Gravel — — Total California 47.4 — 71.0 — 118.4 — — — All other states/provinces 12.6 Sand and Gravel 8.6 Sand and Gravel 21.2 Sand and Gravel 0.7 Sand and Gravel Total 60.0 — 79.6 — 139.6 — 0.7 — Hard Rock: California Euer Ranch 218.1 Hard Rock — — 218.1 Hard Rock — — All other California 9.9 Hard Rock — — 9.9 Hard Rock — — Total California 228.0 — — — 228.0 — — — Utah 9.6 Hard Rock — — 9.6 Hard Rock — — Bamberton Quarry (Canada) 42.4 Hard Rock 2.3 Hard Rock 44.7 Hard Rock 39.3 Hard Rock All other states/provinces — — — — — — 33.0 Hard Rock Total 280.0 — 2.3 — 282.3 — 72.3 — Grand Total 340.0 — 81.9 — 421.9 — 73.0 — (1) The grade of product produced is contingent on market needs.
Sites typically sell base products that range from low to high grades including fill materials, base aggregates, hot mix aggregates and concrete aggregates. Mineral Reserves Mineral reserves are divided into proven and probable mineral reserves. Proven mineral reserves are the economically mineable part of a measured mineral resource and can only result from the conversion of a measured mineral resource.
Sites typically sell base products that range from low to high grades including fill materials, base aggregates, hot mix aggregates and concrete aggregates. 30 Table of Contents Mineral Reserves Mineral reserves are divided into proven and probable mineral reserves.
A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. 25 Table of Contents As defined by the SEC, mineral reserves are an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of a qualified person, as defined by the SEC, can be the basis of an economically viable project.
A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable.
The following tables present information about our quarry properties as of December 31, 2023 (tons in millions): Resources and Reserves for Each Product Type (tons) Percentage of Resources and Reserves Owned and Leased State/Province Number of Properties Sand & Gravel Hard Rock Owned (1) Leased (2) Acreage California 31 475.3 285.0 58 % 42 % 10,498 Utah 10 117.3 37.4 64 % 36 % 1,497 All other states/provinces 57 187.4 187.3 53 % 47 % 14,712 Total 98 780.0 509.7 61 % 39 % 26,707 (1) Owned properties are properties we own or in which we have, or it is probable that we will have, a direct or indirect economic interest.
The following tables present information about our quarry properties as of December 31, 2024 (tons in millions): Resources and Reserves for Each Product Type (tons) Percentage of Resources and Reserves Owned and Leased State/Province Number of Properties Sand & Gravel Hard Rock Owned (1) Leased (2) Acreage California 31 505.4 430.2 63 % 37 % 10,352 Utah 10 111.9 36.7 67 % 33 % 1,497 All other states/provinces 62 208.6 259.5 45 % 55 % 17,349 Total 103 825.9 726.4 58 % 42 % 29,198 (1) Owned properties are properties we own or in which we have, or it is probable that we will have, a direct or indirect economic interest.
The following table presents the number of plants we owned as of the respective dates: December 31, 2023 2022 Aggregate crushing plants 35 28 Asphalt concrete plants 59 48 Cement concrete batch plants 6 5 Asphalt rubber plants 4 5 Lime slurry plants 6 6 These plants are used by both of our reportable segments. 29 Table of Contents Other Properties The following table provides our estimate of certain information about other properties as of December 31, 2023: Land Area (acres) Buildings (square feet) Office and shop space (owned and leased) 1,217 1,617,556 The office and shop space is used by both of our reportable segments.
The following table presents the number of plants we owned and leased as of the respective dates: December 31, 2024 2023 Aggregate crushing plants 40 35 Asphalt concrete plants(1) 59 59 Cement concrete batch plants 10 6 Asphalt rubber plants 4 4 Lime slurry plants 6 6 (1) Three of our asphalt concrete plants were operated under lease agreements for the years ended December 31, 2024 and 2023.
Added
As defined by the SEC, mineral reserves are an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of a qualified person, as defined by the SEC, can be the basis of an economically viable project.
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After a sand, gravel and hard rock deposit has been identified through exploration, the mine is developed 29 Table of Contents before production begins.
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Proven mineral reserves are the economically mineable part of a measured mineral resource and can only result from the conversion of a measured mineral resource.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table sets forth information regarding the repurchase of shares of our common stock during the three months ended December 31, 2023: Period Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (2) October 1, 2023 through October 31, 2023 3,454 $ 36.26 — $ 231,535,405 November 1, 2023 through November 30, 2023 572 $ 45.63 — $ 231,535,405 December 1, 2023 through December 31, 2023 1,451 $ 50.08 — $ 231,535,405 5,477 $ 40.90 — (1) The number of shares purchased was in connection with employee tax withholding for restricted stock units vested under our equity incentive plans.
Biggest changeWe have paid quarterly cash dividends since the second quarter of 1990, and we expect to continue to do so. 32 Table of Contents The following table sets forth information regarding the repurchase of shares of our common stock during the three months ended December 31, 2024: Period Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (2) October 1, 2024 through October 31, 2024 2,946 $ 82.05 — $ 218,187,374 November 1, 2024 through November 30, 2024 66,405 $ 96.69 65,625 $ 211,834,376 December 1, 2024 through December 31, 2024 237,378 $ 95.13 234,175 $ 189,545,664 306,729 $ 95.34 299,800 (1) Includes 2,946, 780 and 3,203 shares purchased during October, November and December, respectively, in connection with employee tax withholding for restricted stock units vested under our equity incentive plans.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Granite Construction Incorporated, the S&P 500 Index and the Dow Jones US Heavy Construction Index * $100 invested on 12/31/18 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Item 6. RESERVED
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Granite Construction Incorporated, the S&P 500 Index and the Dow Jones US Heavy Construction Index * $100 invested on 12/31/19 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Item 6. RESERVED
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the New York Stock Exchange under the ticker symbol GVA. As of February 16, 2024, 43,972,294 shares of our common stock were outstanding and held by 636 shareholders of record.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the New York Stock Exchange under the ticker symbol GVA. As of February 7, 2025, 43,434,583 shares of our common stock were outstanding and held by 595 shareholders of record.
(2) As announced on February 3, 2022, on February 1, 2022, the Board of Directors authorized us to purchase up to $300.0 million of our common stock at management’s discretion. The specific timing and amount of any future purchases will vary based on market conditions, securities law limitations and other factors.
(2) As announced on February 3, 2022, on February 1, 2022, the Board of Directors authorized us to purchase up to $300.0 million of our common stock at management’s discretion.
Performance Graph The following graph compares the cumulative five-year total return provided to Granite Construction Incorporated’s common stockholders relative to the cumulative total returns of the S&P 500 index and the Dow Jones U.S. Heavy Construction index. The Dow Jones U.S.
The specific timing and amount of any future purchases will vary based on market conditions, securities law limitations and other factors. 33 Table of Contents Performance Graph The following graph compares the cumulative five-year total return provided to Granite Construction Incorporated’s common stockholders relative to the cumulative total returns of the S&P 500 index and the Dow Jones U.S.
Heavy Construction index includes the following companies: AECOM, APi Group Corporation, EMCOR Group Inc, MDU Resources Group Inc, MasTec Inc, Quanta Services Inc, Valmont Industries Inc and Willscot Mobile Mini Holdings Corp. Certain of these companies differ from Granite in that they derive more revenue and profit from non-U.S. operations and have customers in different markets.
Heavy Construction index. The Dow Jones U.S. Heavy Construction index includes the following companies: AECOM, APi Group Corporation, EMCOR Group Inc, MDU Resources Group Inc, MasTec Inc, Quanta Services Inc, Valmont Industries Inc and Willscot Mobile Mini Holdings Corp.
The graph tracks the 30 Table of Contents performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2018 through December 31, 2023.
Certain of these companies differ from Granite in that they derive more revenue and profit from non-U.S. operations and have customers in different markets. The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2019 through December 31, 2024.
Removed
We have paid quarterly cash dividends since the second quarter of 1990, and we expect to continue to do so.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOther (Income) Expense The following table presents the components of other (income) expense, net for the respective periods: Years Ended December 31, 2023 2022 2021 (in thousands) Loss on debt extinguishment $ 51,052 $ — $ — Interest income (17,538) (6,528) (1,176) Interest expense 18,462 12,624 20,739 Equity in income of affiliates, net (25,748) (13,571) (12,586) Other (income) expense, net (6,020) 1,039 (4,386) Total other (income) expense, net $ 20,208 $ (6,436) $ 2,591 We incurred a $51.1 million loss on debt extinguishment in the second quarter of 2023 related to the refinancing of a portion of our 2.75% Convertible Notes.
Biggest changeGain on Sales of Property and Equipment, net The following table presents the gain on sales of property and equipment, net for the respective periods: Years Ended December 31, 2024 2023 2022 (in thousands) Gain on sales of property and equipment, net $ (8,764) $ (28,346) $ (12,617) Gain on sales of property and equipment, net for the year ended December 31, 2024 decreased by $19.6 million when compared to 2023 primarily due to the sale of a property in Texas in 2023. 39 Table of Contents Other (Income) Expense The following table presents the components of other (income) expense, net for the respective periods: Years Ended December 31, 2024 2023 2022 (in thousands) Loss on debt extinguishment $ 27,552 $ 51,052 $ — Interest income (24,349) (17,538) (6,528) Interest expense 29,188 18,462 12,624 Equity in income of affiliates, net (16,982) (25,748) (13,571) Other (income) expense, net (4,238) (6,020) 1,039 Total other (income) expense, net $ 11,171 $ 20,208 $ (6,436) During 2024, we repurchased approximately $30.2 million in aggregate principal amount of our 2.75% Convertible Notes and incurred a $27.6 million loss on debt extinguishment, which was $23.5 million less than the 2023 extinguishment charge.
See Note 1 and Note 2 of “Notes to the Consolidated Financial Statements” for further information. Results of Operations Our operations are typically affected more by weather conditions during the first and fourth quarters of our fiscal year which may alter our construction schedules and can create variability in our revenues and profitability.
See Note 1 and Note 2 of “Notes to the Consolidated Financial Statements” for further information. Results of Operations Our operations are typically affected more by inclement weather conditions during the first and fourth quarters of our fiscal year which may alter our construction schedules and can create variability in our revenues and profitability.
Additionally, operating cash flows are impacted by the timing related to funding construction joint ventures and the resolution of uncertainties inherent in the complex nature of the work that we perform, including claim and back charge settlements. Our working capital assets result from both public and private sector projects.
Additionally, operating cash flows are impacted by the timing related to funding construction joint ventures and the resolution of uncertainties inherent in the complex nature of the construction work we perform, including claim and back charge settlements. Our working capital assets result from both public and private sector projects.
The general construction portion of CM/GC contracts are included in other awards to the extent contract execution and funding is probable. Contracts with unexercised contract options or unissued task orders are included in other awards to the extent option exercise or task order issuance is probable, respectively. All CAP is in the Construction segment.
The general construction portion of CM/GC contracts are included in other awards to the extent contract execution and funding is probable. Contracts with unexercised contract options or unissued task orders are included in other awards to the extent option exercise or task order issuance is probable. All CAP is in the Construction segment.
While we typically invoice our customers on a monthly basis, our contracts frequently provide for retention that is a specified percentage withheld from each payment by our customers until the contract is completed and the work accepted by the customer.
While we typically invoice our customers on a monthly basis, our construction contracts frequently provide for retention that is a specified percentage withheld from each payment by our customers until the contract is completed and the work accepted by the customer.
The most significant of these include: • changes in costs of labor and/or materials; • subcontractor costs, availability and/or performance issues; • extended overhead and other costs due to owner, weather and other delays; • changes in productivity expectations; • changes from original design on design-build projects; • our ability to fully and promptly recover on affirmative claims and back charges for additional contract costs; • a change in the availability and proximity of equipment and materials; • complexity in original design; • length of time to complete the project; • the availability and skill level of workers in the geographic location of the project; 32 Table of Contents • site conditions that differ from those assumed in the original bid; • costs associated with scope changes; and • the customer’s ability to properly administer the contract.
The most significant of these include: • changes in costs of labor and/or materials; • subcontractor costs, availability and/or performance issues; • extended overhead and other costs due to owner, weather and other delays; • changes in productivity expectations; • changes from original design on design-build projects; • our ability to fully and promptly recover on affirmative claims and back charges for additional contract costs; • a change in the availability and proximity of equipment and materials; • complexity in original design; • length of time to complete the project; • the availability and skill level of workers in the geographic location of the project; • site conditions that differ from those assumed in the original bid; • costs associated with scope changes; and • the customer’s ability to properly administer the contract.
We believe our primary sources of liquidity, access to the debt and equity capital markets and cash expected to be generated from operations will be sufficient to meet our long-term requirements and plans. However, there can be no assurance that sufficient capital will continue to be available or that it will be available on terms acceptable to us.
We also believe our primary sources of liquidity, access to debt and equity capital markets and cash expected to be generated from operations will be sufficient to meet our long-term requirements and plans. However, there can be no assurance that sufficient capital will continue to be available or that it will be available on terms acceptable to us.
While it is impossible to fully eliminate the impact of these factors, we have applied proactive measures such as fixed forward purchase contracts of oil related inputs, energy surcharges, and adjustment of project schedules for constraints related to construction materials such as concrete.
While it is impossible to fully eliminate the impact of these factors, where practicable, we have applied proactive measures such as fixed forward purchase contracts of oil related inputs, energy surcharges, and adjustment of project schedules for constraints related to construction materials such as concrete.
Certain government contracts where funding is appropriated on a periodic basis are included in unearned revenue at the time of the award when it is probable the contract value will be funded and executed. Other awards include the general construction portion of construction management/general contractor ("CM/GC") contracts and awarded contracts with unexercised contract options or unissued task orders.
Certain government contracts where funding is appropriated on a periodic basis are included in unearned revenue at the time of the award when it is probable the contract value will be funded and executed. 37 Table of Contents Other awards include the general construction portion of construction management/general contractor ("CM/GC") contracts and awarded contracts with unexercised contract options or unissued task orders.
In addition to meeting our liquidity requirements listed above, our increased cash balances are expected to be used to invest in our business through strategic capital expenditures in 2024 and we will continue to explore acquisition opportunities in alignment with our strategic plan.
In addition to meeting our liquidity requirements listed above, our increased cash balances are expected to be used to invest in our business through strategic capital expenditures in 2025 and we will continue to explore acquisition opportunities in alignment with our strategic plan.
Our failure to comply with these covenants would constitute an event of default under the Credit Agreement. Additionally, the 2.75% Convertible Notes and 3.75% Convertible Notes are governed by the terms and conditions of their respective indentures.
Our failure to comply with these covenants would constitute an event of default under the Credit Agreement. Additionally, the 3.25% Convertible Notes and 3.75% Convertible Notes are governed by the terms and conditions of their respective indentures.
It also provides construction of various complex projects including infrastructure / site development, mining, public safety, tunnel, solar, battery storage and other power-related projects. The Materials segment focuses on production of aggregates, asphalt concrete, liquid asphalt and recycled materials production 31 Table of Contents for internal use in our construction projects and for sale to third parties.
It also provides construction of various complex projects including infrastructure / site development, mining, public safety, tunnel, solar, battery storage and other power-related projects. The Materials segment focuses on production of aggregates, asphalt concrete, liquid asphalt and recycled materials production for internal use in our construction projects and for sale to third parties.
Our material cash requirements include paying the costs and expenses associated with our operations, servicing outstanding indebtedness, making capital expenditures and paying dividends on our capital stock. We may also from time to time prepay or repurchase outstanding indebtedness and acquire assets or businesses that are complementary to our operations.
Our material cash requirements include paying the costs and expenses associated with our operations, servicing outstanding indebtedness, making capital expenditures and paying dividends on our capital stock. We may also from time to time prepay or repurchase outstanding indebtedness, repurchase shares of our common stock or acquire assets or businesses that are complementary to our operations.
Our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 2.75% Convertible Notes, our 3.75% Convertible Notes or our Credit Agreement would constitute an event of default under the 2.75% Convertible Notes indenture, the 3.75% Convertible Note indenture or the Credit Agreement.
Our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 3.25% Convertible Notes, our 3.75% Convertible Notes or our Credit Agreement would constitute an event of default under the 3.25% Convertible Notes indenture, the 3.75% Convertible Notes indenture or the Credit Agreement.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K filed with the SEC on February 21, 2023. Liquidity and Capital Resources Our primary sources of liquidity are cash and cash equivalents, investments, available borrowing capacity under our credit facility and cash generated from operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K filed with the SEC on February 23, 2024. Liquidity and Capital Resources Our primary sources of liquidity are cash and cash equivalents, investments, available borrowing capacity under our credit facility and cash generated from operations.
While we actively work to mitigate the impacts of oil price inflation, further price increases may adversely impact us in the future. Our Committed and Awarded Projects (“CAP”) continues to be strong with $5.5 billion at the end of the fourth quarter of 2023.
While we actively work to mitigate the impacts of oil price inflation, further price increases may adversely impact us in the future. Our Committed and Awarded Projects (“CAP”) balance continues to be strong at $5.3 billion at the end of the fourth quarter of 2024.
The debt associated with our unconsolidated non-construction entities is included in Note 10 of “Notes to the Consolidated Financial Statements.” 41 Table of Contents Covenants and Events of Default Our Credit Agreement requires us to comply with various affirmative, restrictive and financial covenants, including the financial covenants described below.
The debt associated with our unconsolidated non-construction entities is included in Note 9 of “Notes to the Consolidated Financial Statements.” Covenants and Events of Default Our Credit Agreement requires us to comply with various affirmative, restrictive and financial covenants, including the financial covenants described below.
Our investments in real estate affiliates are subject to mortgage indebtedness. This indebtedness is non-recourse to Granite but is recourse to the real estate entities. The terms of this indebtedness are typically renegotiated to reflect the evolving nature of the real estate projects as they progress through acquisition, entitlement and development.
Our investments in real estate ventures are subject to mortgage indebtedness. This indebtedness is non-recourse to Granite but is recourse to the real estate venture. The terms of this indebtedness are typically renegotiated to reflect the evolving nature of the real estate projects as they progress through acquisition, entitlement, development and leasing.
Excluded from the table above is $34.2 million and $40.4 million as of December 31, 2023 and 2022, respectively, in Granite’s portion of unconsolidated construction joint venture cash and cash equivalents. Capital Expenditures Major capital expenditures are typically for aggregate and asphalt production facilities, aggregate reserves, construction equipment, buildings and leasehold improvements and investments in our information technology systems.
Excluded from the table above is $28.7 million and $34.2 million as of December 31, 2024 and 2023, respectively, of Granite’s portion of unconsolidated construction joint venture cash and cash equivalents. 41 Table of Contents Capital Expenditures Major capital expenditures are typically for aggregate and asphalt production facilities, aggregate reserves, construction equipment, buildings and leasehold improvements and investments in our information technology systems.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General We deliver infrastructure solutions for public and private clients primarily in the United States. We are one of the largest diversified construction and construction materials companies in the United States.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General We deliver infrastructure solutions for public and private clients primarily in the United States. We are one of the largest diversified, vertically integrated civil contractors and construction materials producers in the United States.
Our primary contractual obligations are as follows and are further discussed in the referenced “Notes to the Consolidated Financial Statements:” • Asset retirement obligations - see Note 11, Property and Equipment, net • Long-term debt and the associated interest payments – see Note 14, Long-Term Debt • Operating lease and royalty future minimum payments – see Note 15, Leases • Non-Qualified Deferred Compensation Plan obligations – see Note 16, Employee Benefit Plans In addition to the obligations referenced above, as of December 31, 2023 we had $18.6 million of purchase commitments for equipment and other goods and services not directly connected with our construction contracts, which are individually greater than $50,000 and have an expected fulfillment date after December 31, 2023.
See Note 2 and Note 17 of the "Notes to the Consolidated Financial Statements" for information on our acquisitions and share repurchases, respectively. 40 Table of Contents Our primary contractual obligations are as follows and are further discussed in the referenced “Notes to the Consolidated Financial Statements:” • Asset retirement obligations - see Note 11, Property and Equipment, net • Long-term debt and the associated interest payments – see Note 14, Long-Term Debt • Operating lease and royalty future minimum payments – see Note 15, Leases • Non-Qualified Deferred Compensation Plan obligations – see Note 16, Employee Benefit Plans In addition to the obligations referenced above, as of December 31, 2024 we had $16.4 million of purchase commitments for equipment and other goods and services not directly connected with our construction contracts, which are individually greater than $50,000 and have an expected fulfillment date after December 31, 2024.
We believe that the increased multi-year spending commitment has improved the programming visibility for state and local governments and drove an increase in project lettings starting in 2023 that will continue in 2024 and beyond. At state, regional and local levels, voter-approved state and local transportation measures continue to support infrastructure spending.
The increased multi-year spending commitment has improved the programming visibility for state and local governments and has driven an increase in project lettings that started in 2023, continued in 2024 and we believe will carry into 2025 and beyond. At state, regional and local levels, voter-approved state and local transportation measures continue to support infrastructure spending.
We may also from time to time issue and sell equity, debt or hybrid securities or engage in other capital markets transactions or sell one or more business units or assets. See Note 14 of the "Notes to the Consolidated Financial Statements" for information on our 2.75% Convertible Notes, our 3.75% Convertible Notes and our Credit Agreement.
We may also from time to time issue and sell equity, debt or hybrid securities or engage in other capital markets transactions or sell one or more business units or assets. See Note 14 of the "Notes to the Consolidated Financial Statements" for information on our long-term debt.
(2) All marketable securities were classified as held-to-maturity and consisted of U.S. and agency obligations as of all periods presented. Granite’s portion of CCJV cash and cash equivalents was $73.1 million and $62.5 million as of December 31, 2023 and 2022, respectively.
(2) All marketable securities were classified as held-to-maturity and consisted of U.S. Government and agency obligations as of all periods presented. Granite’s portion of CCJV cash and cash equivalents was $106.0 million and $73.1 million as of December 31, 2024 and 2023, respectively.
At December 31, 2023 and 2022, six and five contracts with remaining CAP of $10.0 million or more per project had total forecasted losses with remaining revenue of $188.9 million, or 3.4% of total CAP, and $134.2 million, of 3.0% of total CAP, respectively.
At December 31, 2024 and 2023, one and six contracts with remaining CAP of $10.0 million or more per project had total forecasted losses with remaining revenue of $64.4 million, or 1.2% of total CAP, and $188.9 million, or 3.4% of total CAP, respectively.
However, even these can be temporarily at risk as federal, state and local governments take actions to balance their budgets. Conversely, increased levels of public funding as well as an expanding or robust economy will generally increase demand for our services and provide opportunities for revenue growth and margin improvement. Critical Accounting Estimates The financial statements included in “Item 8.
However, even these can be temporarily at risk as federal, state and local governments take actions to balance their budgets. Conversely, increased levels of public funding as well as an expanding or robust economy will generally increase demand for our services and products and provide opportunities for revenue growth and margin improvement.
Cash Flows Years Ended December 31, 2023 2022 2021 (in thousands) Net cash provided by (used in): Operating activities $ 183,707 $ 55,647 $ 21,931 Investing activities $ (359,290) $ (11,000) $ (21,478) Financing activities $ 299,255 $ (164,311) $ (24,446) 40 Table of Contents Operating activities As a large infrastructure contractor and construction materials producer, our revenue, gross profit and the resulting operating cash flows can differ significantly from period to period due to a variety of factors, including seasonal cycles, project progression toward completion, outstanding contract change orders and affirmative claims, and the payment terms of our contracts.
Cash Flows Years Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by (used in): Operating activities $ 456,343 $ 183,707 $ 55,647 Investing activities $ (228,556) $ (359,290) $ (11,000) Financing activities $ (67,120) $ 299,255 $ (164,311) Operating activities As a large infrastructure contractor and construction materials producer, our revenue, gross profit and the resulting operating cash flows can differ significantly from period to period due to a variety of factors, including project progression toward completion, outstanding contract change orders and affirmative claims, and the payment terms of our contracts.
Selling expenses can vary depending on the volume of projects in process and the number of employees assigned to estimating and bidding activities. As projects are completed or the volume of work slows down, we temporarily redeploy project employees to bid on new projects, moving their salaries and related costs from cost of revenue to selling expenses.
As projects are completed or the volume of work slows down, we temporarily redeploy project employees to bid on new projects, moving their salaries and related costs from cost of revenue to selling expenses.
The timing and amount of such expenditures can vary based on the progress of planned capital projects, the type and size of construction projects, changes in business outlook and other factors. During the year ended December 31, 2023, we had capital expenditures of $140.4 million, compared to $121.6 million during 2022, an increase of $18.8 million.
The timing and amount of such expenditures can vary based on the progress of planned capital projects, the type and size of construction projects, changes in business outlook and other factors. During the year ended December 31, 2024, we had capital expenditures of $136.4 million, compared to $140.4 million during 2023, a decrease of $4.0 million.
Of this, approximately $16.1 million and $2.5 million will be paid in 2024 and 2025, respectively. There are no material purchase commitments in the periods thereafter.
Of this, approximately $15.0 million, $1.0 million and $0.4 million will be paid in 2025, 2026 and 2027, respectively. There are no material purchase commitments in the periods thereafter.
The following table presents our cash, cash equivalents and marketable securities, including amounts from our CCJVs, as of the respective dates: December 31, 2023 2022 (in thousands) Cash and cash equivalents excluding CCJVs $ 297,439 $ 191,444 CCJV cash and cash equivalents (1) 120,224 102,547 Total consolidated cash and cash equivalents 417,663 293,991 Short-term and long-term marketable securities (2) 35,863 65,943 Total cash, cash equivalents and marketable securities $ 453,526 $ 359,934 (1) The volume and stage of completion of contracts from our CCJVs may cause fluctuations in joint venture cash and cash equivalents between periods.
The following table presents our cash, cash equivalents and marketable securities, including amounts from our CCJVs, as of the respective dates: December 31, 2024 2023 (in thousands) Cash and cash equivalents excluding CCJVs $ 404,436 $ 297,439 CCJV cash and cash equivalents (1) 173,894 120,224 Total consolidated cash and cash equivalents 578,330 417,663 Short-term marketable securities (2) 7,311 35,863 Total cash, cash equivalents and marketable securities $ 585,641 $ 453,526 (1) The volume and stage of completion of contracts from our CCJVs may cause fluctuations in joint venture cash and cash equivalents between periods.
Cash, cash equivalents and marketable securities as of December 31, 2023 increased $93.6 million to $453.5 million from the prior year end.
Cash, cash equivalents and marketable securities as of December 31, 2024 increased $132.1 million to $585.6 million from the prior year end.
Committed and Awarded Projects CAP consists of two components: (1) unearned revenue and (2) other awards. Unearned revenue includes the revenue we expect to record in the future on executed contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts.
Unearned revenue includes the revenue we expect to record in the future on executed contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts.
As of December 31, 2023, we had $2.0 million of receivables and $29.1 million of contract retention receivables from Brightline Trains Florida LLC ("Brightline") (see Note 6 of “Notes to the Consolidated Financial Statements”). As of the date of this report, $1.9 million of the receivables outstanding at year-end have been collected.
See Note 14 of “Notes to the Consolidated Financial Statements.” As of December 31, 2024, we had $1.3 million of receivables and $29.2 million of contract retention receivables from Brightline Trains Florida LLC ("Brightline") (see Note 6 of “Notes to the Consolidated Financial Statements”), all of which has been collected as of the date of this report.
The decrease in year-over-year income before income taxes was primarily due to the loss in the current year related to debt extinguishment. 38 Table of Contents Amount Attributable to Non-controlling Interests The following table presents the amount attributable to non-controlling interests in consolidated subsidiaries for the respective periods: Years Ended December 31, 2023 2022 2021 (in thousands) Amount attributable to non-controlling interests $ 14,012 $ 4,445 $ 7,682 The amount attributable to non-controlling interests represents the non-controlling owners’ share of the net loss of our consolidated construction joint ventures.
Amount Attributable to Non-controlling Interests The following table presents the amount attributable to non-controlling interests in consolidated subsidiaries for the respective periods: Years Ended December 31, 2024 2023 2022 (in thousands) Amount attributable to non-controlling interests $ (14,097) $ 14,012 $ 4,445 The amount attributable to non-controlling interests represents the non-controlling owners’ share of the net (income) loss of our consolidated construction joint ventures.
Additionally, distributions from, net of contributions to, unconsolidated joint ventures and affiliates increased $42.6 million from 2022. Investing activities Cash used in investing activities of $359.3 million during 2023 represents a $348.3 million increase in cash used in investing activities when compared to 2022.
Additionally, distributions from, net of contributions to, unconsolidated construction joint ventures and affiliates increased $18.1 million from 2023. Investing activities Cash used in investing activities of $228.6 million during 2024 represents a $130.7 million decrease in cash used in investing activities when compared to 2023.
Share Purchase Program As announced on February 3, 2022, on February 1, 2022, the Board of Directors authorized us to purchase up to $300.0 million of our common stock at management’s discretion (the “2022 authorization”). We did not purchase shares under the share purchase program in 2023. As of December 31, 2023, $231.5 million of the 2022 authorization remained available.
As of December 31, 2024, we were in compliance with the covenants in the Credit Agreement. Share Repurchase Program As announced on February 3, 2022, on February 1, 2022, the Board of Directors authorized us to purchase up to $300.0 million of our common stock at management’s discretion (the “2022 authorization”).
Other general and administrative expenses include travel and entertainment, outside services, information technology, depreciation, occupancy, training, office supplies, changes in the fair market value of our Non-Qualified Deferred Compensation plan liability and other miscellaneous expenses.
Other SG&A expenses include travel and entertainment, outside services, information technology, depreciation, occupancy, training, office supplies, changes in the fair market value of our Non-Qualified Deferred Compensation plan liability and other miscellaneous expenses. SG&A expenses can vary depending on the volume of projects in process and the number of employees assigned to estimating and bidding activities.
As of December 31, 2023, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions and marketable securities consisting primarily of U.S. Government and agency obligations. In June 2022, we entered into the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) maturing June 2, 2027.
As of December 31, 2024, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions and marketable securities consisting primarily of U.S. Government and agency obligations.
The hedge option and warrant derivative transactions related to the 2.75% Convertible Notes and the Capped Call transactions related to the 3.75% Convertible Notes were recorded to equity on our condensed consolidated balance sheets based on the cash proceeds. See Note 14 to “Notes to the Consolidated Financial Statements” for further information.
The capped call transactions related to the 3.75% Convertible Notes and 3.25% Convertible Notes were recorded to equity on our consolidated balance sheets based on the cash proceeds.
There are a number of factors that can contribute to changes in estimates of contract cost and profitability.
Cost estimates for all of our significant projects use a detailed “bottom up” 35 Table of Contents approach. There are a number of factors that can contribute to changes in estimates of contract cost and profitability.
The change during 2023 was primarily due to increased losses due to downward revisions in estimates from an existing joint venture, partially offset by increased profits from new joint ventures. (see Note 3 of “Notes to the Consolidated Financial Statements”). Prior Years Comparison (2022 to 2021) See Item 7.
The increase during 2024 was primarily due to the impact of less negative revisions in estimates related to consolidated construction joint ventures (see Note 3 of “Notes to the Consolidated Financial Statements”). Prior Years Comparison (2023 to 2022) See Item 7.
As of December 31, 2023, the total unused availability under our Credit Agreement was $230.7 million, resulting from $19.3 million in issued and outstanding letters of credit and $100.0 million drawn on the Revolver. See Note 14 of “Notes to the Consolidated Financial Statements” for further discussion regarding the Revolver.
As of December 31, 2024, the total unused availability under our Credit Agreement was $333.7 million, resulting from $16.3 million in issued and outstanding letters of credit and nothing drawn on the Revolver.
Cash provided by operating activities of $183.7 million during 2023 represents a $128.1 million increase in cash provided by operating activities when compared to 2022. The change was primarily due to a $73.6 million increase in cash provided by working capital, which includes receivables, net contract assets, inventories, other assets, accounts payable and accrued expenses and other liabilities.
The change was primarily attributable to a $132.8 million increase in net income after adjusting for non-cash items and a $121.7 million increase in cash provided by working capital, which includes receivables, net contract assets, inventories, other assets, accounts payable and accrued expenses and other liabilities.
Performance bonds do not have stated expiration dates; rather, we are generally released from the bonds after the owner accepts the work performed under contract. The ability to maintain bonding capacity to support our current and future level of contracting requires that we maintain cash and working capital balances satisfactory to our sureties.
At December 31, 2024, approximately $3.2 billion of our $5.3 billion CAP was bonded. Performance bonds do not have stated expiration dates; rather, we are generally released from the bonds when the obligations of the underlying contract have been fulfilled. The ability to maintain bonding capacity requires that we maintain cash and working capital balances satisfactory to our sureties.
Income Taxes The following table presents the provision for income taxes for the respective periods: Years Ended December 31, 2023 2022 2021 (in thousands) Provision for income taxes $ 30,267 $ 12,960 $ 19,713 Effective tax rate 50.6 % 14.1 % 89.1 % Our effective tax rate increased from 14.1% to 50.6% when compared to 2022 due to increases in our provision for income taxes relative to lower income before income taxes.
Income Taxes The following table presents the provision for income taxes for the respective periods: Years Ended December 31, 2024 2023 2022 (in thousands) Provision for income taxes $ 55,749 $ 30,267 $ 12,960 Effective tax rate 28.4 % 50.6 % 14.1 % Our effective tax rate decreased from 50.6% to 28.4% when compared to 2023 primarily due to a decrease in nondeductible debt extinguishment costs along with a favorable adjustment for non-controlling interest in the current year.
In California, our top revenue-generating state, a significant part of the state infrastructure spend is funded through Senate Bill 1 (SB-1), the Road Repair and Accountability Act of 2017, which is a 10-year, $54.2 billion program without any sunset provisions. 33 Table of Contents Over the recent years, inflation, supply chain and labor constraints have had a significant impact on the global economy including the construction industry in the United States.
In California, our top revenue-generating state, despite overall budgetary concerns, a significant part of the state infrastructure spend is funded through Senate Bill 1 (SB-1), the Road Repair and Accountability Act of 2017, a 10-year, $54.2 billion program, which may only be used for transportation-related purposes, without any sunset provisions.
The Mountain Group also includes national businesses in the Industrial & Energy division, which primarily focuses on commercial solar construction projects, Water Resources, which performs water well drilling and rehabilitation services and Mineral Services, which performs mineral exploration services for mining clients.
Our Construction segment also operates national businesses within the Tunnel division, the Rail division, the Federal division, which performs civil construction across the continental United States and Guam, the Industrial & Energy division, which primarily focuses on commercial solar construction projects, and the Layne division, which performs water well drilling, rehabilitation services and mineral exploration services.
The specific timing and amount of any future repurchases will vary based on market conditions, securities law limitations and other factors. Recently Issued and Adopted Accounting Pronouncements See Note 1 of “Notes to the Consolidated Financial Statements” under the caption Recently Issued and Adopted Accounting Pronouncements.
Recently Issued and Adopted Accounting Pronouncements See Note 1 of “Notes to the Consolidated Financial Statements” under the caption Recently Issued and Adopted Accounting Pronouncements.
Current Economic Environment and Outlook Funding for our public work projects, which accounts for approximately 80% of our portfolio, is dependent on federal, state, regional and local revenues.
However, Note 3 of “Notes to the Consolidated Financial Statements” presents the impact material revisions in estimates had on the periods covered by this report. Current Economic Environment and Outlook Funding for our public work projects, which account for approximately 80% of our portfolio, is dependent on federal, state, regional and local revenues.
Financial Statements and Supplementary Data” have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these financial statements requires management to make estimates that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.
Critical Accounting Estimate The financial statements included in “Item 8. Financial Statements and Supplementary Data” have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Our estimates and related judgments and assumptions are continually evaluated based on available information and experiences; however, actual amounts could differ from those estimates. The following are our most critical accounting estimates that involve management judgment and can have significant effects on our reported results of operations.
The preparation of these financial statements requires management to make estimates that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Our estimates and related judgments and assumptions are continually evaluated based on available information and experiences; however, actual amounts could differ from those estimates.
Surety Bonds and Real Estate Mortgages We are generally required to provide various types of surety bonds that provide an additional measure of security for our performance under certain public and private sector contracts. At December 31, 2023, approximately $3.2 billion of our $5.5 billion CAP was bonded.
See Note 14 to “Notes to the Consolidated Financial Statements” for further information. 42 Table of Contents Surety Bonds and Real Estate Mortgages We are generally required to provide various types of surety bonds that provide an additional measure of security under certain public and private sector contracts.
Years Ended December 31, 2023 2022 2021 (in thousands) Total revenue $ 3,509,138 $ 3,301,256 $ 3,501,865 Gross profit $ 396,399 $ 369,494 $ 362,645 Selling, general and administrative expenses $ 294,466 $ 272,610 $ 303,015 Other costs, net (see Note 1 of “Notes to the Consolidated Financial Statements”) $ 50,217 $ 24,120 $ 101,351 Gain on sales of property and equipment, net $ (28,346) $ (12,617) $ (66,439) Operating income $ 80,062 $ 85,381 $ 24,718 Total other (income) expense, net $ 20,208 $ (6,436) $ 2,591 Amount attributable to non-controlling interests $ 14,012 $ 4,445 $ 7,682 Net income attributable to Granite Construction Incorporated $ 43,599 $ 83,302 $ 10,096 Revenue Total Revenue by Segment Years Ended December 31, 2023 2022 2021 (dollars in thousands) Construction $ 2,992,254 85.3 % $ 2,803,935 84.9 % $ 3,076,190 87.8 % Materials 516,884 14.7 497,321 15.1 425,675 12.2 Total $ 3,509,138 100.0 % $ 3,301,256 100.0 % $ 3,501,865 100.0 % 34 Table of Contents Construction Revenue Years Ended December 31, 2023 2022 2021 (dollars in thousands) California $ 1,029,410 34.4 % $ 811,623 28.9 % $ 822,448 26.7 % Central 765,560 25.6 851,779 30.4 1,058,448 34.4 Mountain 1,197,284 40.0 1,140,533 40.7 1,195,294 38.9 Total $ 2,992,254 100.0 % $ 2,803,935 100.0 % $ 3,076,190 100.0 % Construction revenue in 2023 increased by $188.3 million, or 6.7%, compared to 2022.
Years Ended December 31, 2024 2023 2022 (in thousands) Total revenue $ 4,007,574 $ 3,509,138 $ 3,301,256 Gross profit $ 572,697 $ 396,399 $ 369,494 Selling, general and administrative expenses $ 334,162 $ 294,466 $ 272,610 Other costs, net (see Note 1 of “Notes to the Consolidated Financial Statements”) $ 39,936 $ 50,217 $ 24,120 Gain on sales of property and equipment, net $ (8,764) $ (28,346) $ (12,617) Operating income $ 207,363 $ 80,062 $ 85,381 Total other (income) expense, net $ 11,171 $ 20,208 $ (6,436) Amount attributable to non-controlling interests $ (14,097) $ 14,012 $ 4,445 Net income attributable to Granite Construction Incorporated $ 126,346 $ 43,599 $ 83,302 Revenue Total Revenue by Segment Years Ended December 31, 2024 2023 2022 (dollars in thousands) Construction $ 3,415,225 85.2 % $ 2,992,254 85.3 % $ 2,803,935 84.9 % Materials 592,349 14.8 516,884 14.7 497,321 15.1 Total $ 4,007,574 100.0 % $ 3,509,138 100.0 % $ 3,301,256 100.0 % Construction Revenue Years Ended December 31, 2024 2023 2022 (dollars in thousands) Public $ 2,531,379 74.1 % $ 2,064,078 69.0 % $ 1,891,338 67.5 % Private 883,846 25.9 928,176 31.0 912,597 32.5 Total $ 3,415,225 100.0 % $ 2,992,254 100.0 % $ 2,803,935 100.0 % Construction revenue in 2024 increased by $423.0 million, or 14.1%, compared to 2023, primarily due to a higher level of CAP to start the year, more favorable weather conditions early in 2024 and increased revenue from acquired businesses of $114.7 million due to the timing of the acquisition of LRC/MSG in 2023 and the acquisition of D&B in 2024.
Interest expense for 2023 increased by $5.8 million when compared to 2022 as a result of increased borrowings in 2023. Equity in income of affiliates increased by $12.2 million when compared to 2022 due to overall increases in net income of our affiliates driven by increases in sales and margins.
During 2024, interest expense, net of interest income, increased $3.9 million, as a result of increased borrowings, partially offset by higher interest income due to higher cash balances. Equity in income of affiliates, net decreased by $8.8 million when compared to 2023 primarily due to lower net income of our affiliates.
Revenue Recognition Our revenue is primarily derived from construction contracts that can span several quarters or years in our Construction segment and from sales of construction related materials in our Materials segment. We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, and subsequently issued additional related ASUs.
We consider revenue recognition a critical accounting estimate. It involves significant management judgment and can significantly affect our reported results of operations. Revenue Recognition Our revenue is primarily derived from construction contracts that can span several quarters or years in our Construction segment and from sales of construction related materials in our Materials segment.
A default under the 2.75% Convertible Notes indenture or the 3.75% Convertible Notes indenture could result in acceleration of the maturity of the notes. The Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default.
A default under the 3.25% Convertible Notes indenture or the 3.75% Convertible Notes indenture could result in acceleration of the maturity of the notes. The most significant financial covenants under the terms of our Credit Agreement require the maintenance of a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio.
Materials gross profit for the year ended December 31, 2023 increased by $5.7 million, or 8.7%, when compared to 2022 and gross profit margin increased to 13.8% in the current year from 13.2% in the prior year. These improvements were primarily due to price increases as well as normalized fuel and energy costs in 2023.
Materials gross profit for the year ended December 31, 2024 increased by $10.4 million, or 14.5%, when compared to 2023 and gross profit margin remained consistent at 13.8%. The improvement in gross profit was primarily due to the results of acquired businesses as well as higher revenue.
Gross Profit The following table presents gross profit by reportable segment for the respective periods: Years Ended December 31, 2023 2022 2021 (dollars in thousands) Construction $ 325,055 $ 303,881 $ 303,228 Percent of segment revenue 10.9 % 10.8 % 9.9 % Materials 71,344 65,613 59,417 Percent of segment revenue 13.8 13.2 14.0 Total gross profit $ 396,399 $ 369,494 $ 362,645 Percent of total revenue 11.3 % 11.2 % 10.4 % Construction gross profit for the year ended December 31, 2023 increased by $21.2 million, or 7.0%, when compared to 2022, primarily driven by strong performance in the vertically integrated Mountain operating group, partially offset by a decrease in the estimated amount of probable recovery on an outstanding claim in our Central operating group, as well as the impact of other downward revisions in estimates (see Note 3 of “Notes to the Consolidated Financial Statements”).
Gross Profit The following table presents gross profit by reportable segment for the respective periods: Years Ended December 31, 2024 2023 2022 (dollars in thousands) Construction $ 491,002 $ 325,055 $ 303,881 Percent of segment revenue 14.4 % 10.9 % 10.8 % Materials 81,695 71,344 65,613 Percent of segment revenue 13.8 13.8 13.2 Total gross profit $ 572,697 $ 396,399 $ 369,494 Percent of total revenue 14.3 % 11.3 % 11.2 % Construction gross profit for the year ended December 31, 2024 increased by $165.9 million, or 51.1%, when compared to 2023, primarily due to higher revenue and improved project execution across our project portfolio resulting in net increases from revisions in estimates in the current period compared to net decreases in the prior period.
The accuracy of our revenue and profit recognition in a given period depends on the accuracy of our estimates of the forecasted revenue and cost to complete each project. Cost estimates for all of our significant projects use a detailed “bottom up” approach.
We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, and subsequently issued additional related ASUs. The accuracy of our revenue and profit recognition in a given period depends on the accuracy of our estimates of the forecasted revenue and cost to complete each project.
Brightline has experienced delays in securing additional funding in the past, therefore the timing and probability of future payments may be affected, and our liquidity impacted if Brightline faces future funding difficulties. In evaluating our liquidity position and needs, we also consider cash and cash equivalents held by our consolidated construction joint ventures (“CCJVs”).
In evaluating our liquidity position and needs, we also consider cash and cash equivalents held by our consolidated construction joint ventures (“CCJVs”).
Financing activities Cash provided by financing activities of $299.3 million during 2023 represents a $463.6 million increase in cash provided by financing activities when compared to 2022. The change was primarily due to a $150.0 million increase in cash provided by our Revolver and Term Loan.
Cash provided by operating activities of $456.3 million during 2024 represents a $272.6 million increase in cash provided by operating activities when compared to 2023.
See Note 14 to “Notes to the Consolidated Financial Statements” for further information about our long-term debt transactions and our credit facility. The year over year increase in cash provided by financing activities was also due to $66.8 million less cash used for repurchases of common stock and higher contributions from non-controlling partners, net of distributions, of $24.5 million.
The year over year increase in cash used in financing activities was also due to $46.5 million increase in repurchases of common stock as well as a decrease in contributions from non-controlling partners, net of distributions, of $30.7 million.
See Note 21 of “Notes to the Consolidated Financial Statements” for additional information about our reportable segments. In addition to reportable segments, we also review our business by operating groups.
See Note 21 of “Notes to the Consolidated Financial Statements” for additional information about our reportable segments. During the first quarter of 2024, we reorganized our operational structure to more closely align with our two reportable segments, Construction and Materials.
Modification of these terms may include changes in loan-to-value ratios requiring the real estate entity to repay portions of the debt.
Modification of these terms may include changes in loan-to-value ratios requiring the real estate venture to repay portions of the debt. Our unconsolidated investments in our foreign affiliates are subject to local bank debt primarily for equipment purchases and working capital. This debt is non-recourse to Granite, but it is recourse to the affiliates.
Other Costs, net The following table presents other costs for the respective periods: Years Ended December 31, 2023 2022 2021 (in thousands) Other costs, net $ 50,217 $ 24,120 $ 101,351 Other costs for the year ended December 31, 2023 increased by $26.1 million when compared to 2022 primarily due to the settlement of the Salesforce Tower matter in October 2023.
Other Costs, net The following table presents other costs, net for the respective periods: Years Ended December 31, 2024 2023 2022 (in thousands) Other costs, net $ 39,936 $ 50,217 $ 24,120 Other costs for the year ended December 31, 2024 decreased by $10.3 million when compared to 2023 primarily due to a $20.0 million litigation charge in the prior year that did not recur in the current year, partially offset by an increase in costs in the current year associated with the defense of a former Company officer in his ongoing civil litigation with the Securities and Exchange Commission.
Our newly acquired operations produced a gross loss of $3.6 million, including the impact of purchase accounting primarily related to LRC/MSG. 36 Table of Contents Selling, General and Administrative Expenses The following table presents the components of selling, general and administrative expenses for the respective periods: Years Ended December 31, 2023 2022 2021 (dollars in thousands) Selling Salaries and related expenses $ 58,617 $ 57,921 $ 65,758 Incentive compensation 5,784 4,316 5,160 Stock-based compensation 1,595 1,277 1,415 Other selling expenses 5,964 8,627 4,632 Total selling 71,960 72,141 76,965 General and administrative Salaries and related expenses 98,622 103,161 111,149 Incentive compensation 23,580 12,108 8,908 Stock-based compensation 8,158 5,084 3,792 Other general and administrative expenses 92,146 80,116 102,201 Total general and administrative 222,506 200,469 226,050 Total selling, general and administrative $ 294,466 $ 272,610 $ 303,015 Percent of revenue 8.4 % 8.3 % 8.7 % Selling Expenses Selling expenses include the costs for estimating and bidding, including offsetting customer reimbursements for portions of our selling/bid submission expenses (i.e., stipends), business development and materials facility permits.
Selling, General and Administrative Expenses The following table presents the components of selling, general and administrative expenses for the respective periods: Years Ended December 31, 2024 2023 2022 (dollars in thousands) Salaries and related expenses $ 171,835 $ 157,239 $ 161,082 Incentive compensation 32,094 29,364 16,424 Stock-based compensation 17,826 9,753 6,361 Other selling, general and administrative expenses 112,407 98,110 88,743 Total selling, general and administrative expenses $ 334,162 $ 294,466 $ 272,610 Percent of revenue 8.3 % 8.4 % 8.3 % Selling, general and administrative ("SG&A") expenses include the costs for estimating and bidding, including offsetting customer reimbursements for portions of our selling/bid submission expenses (i.e., stipends), business development, materials facility permits, and costs related to our operational offices that are not allocated to direct contract costs and expenses related to our corporate functions.
Our CAP is supported by a positive public funding environment and resilient private market which we believe will provide further opportunities for continued CAP growth in 2024. Strategic Actions On March 16, 2022, we sold our trenchless and pipe rehabilitation services business (“Inliner”) for a purchase price of $159.7 million, subject to certain adjustments.
Our CAP is supported by a positive public funding environment and resilient private market which we believe will provide further opportunities for continued CAP growth in 2025. Acquisitions On August 9, 2024, we acquired Dickerson & Bowen, Inc. ("D&B"). D&B is an aggregates, asphalt, and highway construction company serving central and southern Mississippi.
The most significant new addition to CAP during the fourth quarter of 2023 was $344.5 million related to a private rail facility project in California. Non-controlling partners’ share of CAP as of December 31, 2023 and 2022 was $243.8 million and $85.0 million, respectively.
Non-controlling partners’ share of CAP as of December 31, 2024 and 2023 was $331.1 million and $243.8 million, respectively.
December 31, 2023 2022 (dollars in thousands) Unearned revenue $ 3,596,676 64.9 % $ 2,877,478 64.2 % Other awards 1,949,078 35.1 1,607,661 35.8 Total $ 5,545,754 100.0 % $ 4,485,139 100.0 % 35 Table of Contents December 31, 2023 2022 (dollars in thousands) California $ 2,436,521 43.9 % $ 1,747,163 39.0 % Central 1,707,862 30.8 1,661,613 37.0 Mountain 1,401,371 25.3 1,076,363 24.0 Total $ 5,545,754 100.0 % $ 4,485,139 100.0 % CAP of $5.5 billion at December 31, 2023 was $1.1 billion, or 24% higher than 2022 primarily due to higher award volume throughout 2023, specifically in our California and Mountain operating groups which increased $689.4 million and $325.0 million, respectively, between December 31, 2022 and 2023.
December 31, 2024 2023 (dollars in thousands) Unearned revenue $ 3,584,378 67.7 % $ 3,596,676 64.9 % Other awards 1,711,689 32.3 1,949,078 35.1 Total $ 5,296,067 100.0 % $ 5,545,754 100.0 % December 31, 2024 2023 (dollars in thousands) Public $ 4,120,821 77.8 % $ 4,368,904 78.8 % Private 1,175,246 22.2 1,176,850 21.2 Total $ 5,296,067 100.0 % $ 5,545,754 100.0 % CAP of $5.3 billion at December 31, 2024 was $0.2 billion, or 5% lower than December 31, 2023 due to higher revenue in 2024 and lower additions to CAP in 2024.
The increase year over year is primarily due to acquisitions of materials reserves in 2023. We currently anticipate 2024 capital expenditures to be between approximately $130 million and $150 million, including approximately $50 million in planned strategic materials investments in land, reserves and an aggregate plant. This range also includes approximately $20 million related to a project-specific tunnel boring machine.
We currently anticipate 2025 capital expenditures to be between approximately $140 million and $160 million, including approximately $50 million in planned strategic materials investments.
Removed
In alphabetical order, our operating groups are as follows: • California, which is comprised of vertically integrated businesses in home markets across the state; • Central, which includes the vertically integrated Arizona region and regional civil construction businesses in Illinois, Florida and Texas.
Added
We own and lease aggregate reserves and own processing plants that are vertically integrated into our construction operations and we also produce construction materials for sale to third parties. 34 Table of Contents We have vertically integrated operations across Alaska, Arizona, California, Mississippi, Nevada, Oregon, Tennessee, Utah and Washington in addition to regional civil construction home markets in Illinois, Florida and Texas.
Removed
The Central group also includes the Federal division which performs civil construction across the continental United States and Guam, and the Tunnel division; and • Mountain, which is comprised of vertically integrated regional businesses in Alaska, Washington, Oregon, Utah and Nevada.
Added
Previously, leaders within our three former operating groups of California, Central and Mountain managed both Construction and Materials operations within each group. This change allows us to better leverage our expertise within each reportable segment with leadership having direct oversight of their respective segment operations.
Removed
However, Note 3 of “Notes to the Consolidated Financial Statements” presents the impact material revisions in estimates had on the periods covered by this report. Goodwill and Acquired Intangible Assets Goodwill represents the excess of amounts paid over the fair value of net assets acquired from an acquisition.
Added
As a result of the reorganization, we will no longer disclose financial information by operating group. There were no material impacts to our consolidated financial statements and no changes to our reportable segments.
Removed
In order to determine the amount of goodwill resulting from an acquisition, we perform an assessment to determine the value of the acquired company’s tangible and identifiable intangible assets and liabilities. In our assessment, we determine whether identifiable intangible assets exist, which typically include customer relationships, backlog and trademarks/trade names.
Added
Over the last several years, inflation, supply chain and labor constraints have had a significant impact on the global economy including the construction industry in the United States.
Removed
The determination of fair values of assets acquired and liabilities assumed requires us to make estimates and use valuation techniques when a market value is not readily available. We test goodwill for impairment annually, as of November 1, for each reporting unit and more frequently when events occur or circumstances change which suggest that goodwill should be evaluated.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe table below presents principal amounts due by year and related weighted average interest rates for our cash and cash equivalents, held-to-maturity investments and significant debt obligations, excluding debt issuance costs, as of December 31, 2023 (dollars in thousands): 2024 2025 2026 2027 2028 Thereafter Total Assets Cash, cash equivalents, held-to-maturity investments $ 453,526 $ — $ — $ — $ — $ — $ 453,526 Weighted average interest rate 4.89 % — % — % — % — % — % 4.89 % Liabilities Debt Credit Agreement Revolver Loan $ — $ — $ — $ 100,000 $ — $ — $ 100,000 Effective interest rate (1) 7.46 % 7.46 % 7.46 % 7.46 % — % — % 7.46 % Credit Agreement Term Loan $ 7,500 $ 7,500 $ 7,500 $ 127,500 $ — $ — $ 150,000 Effective interest rate (2) 6.65 % 6.65 % 6.65 % 6.65 % — % — % 6.65 % 3.75% Convertible Notes $ — $ — $ — $ — $ 373,750 $ — $ 373,750 Coupon rate 3.75 % 3.75 % 3.75 % 3.75 % 3.75 % — % 3.75 % 2.75% Convertible Notes $ 31,338 $ — $ — $ — $ — $ — $ 31,338 Coupon rate 2.75 % — % — % — % — % — % 2.75 % (1) The effective interest rate was calculated using one-month SOFR plus 10 basis points plus the applicable margin.
Biggest changeThe table below presents principal amounts due by year and related weighted average interest rates for our cash and cash equivalents, held-to-maturity investments and significant debt obligations, excluding debt issuance costs, as of December 31, 2024 (dollars in thousands): 2025 2026 2027 2028 2029 Thereafter Total Assets Cash, cash equivalents, held-to-maturity investments $ 585,641 $ — $ — $ — $ — $ — $ 585,641 Weighted average interest rate 4.34 % — % — % — % — % — % 4.34 % Liabilities Debt 3.75% Convertible Notes $ — $ — $ — $ 373,750 $ — $ — $ 373,750 Coupon rate 3.75 % 3.75 % 3.75 % 3.75 % — % — % 3.75 % 3.25% Convertible Notes $ — $ — $ — $ — $ — $ 373,750 $ 373,750 Coupon rate 3.25 % 3.25 % 3.25 % 3.25 % 3.25 % 3.25 % 3.25 % The estimated fair value of our cash and cash equivalents approximates the principal amounts reflected above based on the generally short maturities of these financial instruments.
The applicable margin is based on our Consolidated Leverage Ratio (as defined in our Credit Agreement), calculated quarterly. As of December 31, 2023, there was $100 million drawn on the Revolver. See Note 14 of “Notes to the Consolidated Financial Statements” for further discussion on the 2.75% Convertible Notes, 3.75% Convertible Notes and Credit Agreement.
The applicable margin is based on our Consolidated Leverage Ratio (as defined in our Credit Agreement), calculated quarterly. As of December 31, 2024, there was nothing drawn on the Revolver. See Note 14 of “Notes to the Consolidated Financial Statements” for further discussion on the 3.25% Convertible Notes, 3.75% Convertible Notes and Credit Agreement.
If the volume of our international operations increases and foreign currency exchange rates change, the impact to our consolidated statements of operations could be significant and may affect year-to-year comparability of operating results.
If the volume of our international operations increases and foreign currency exchange rates change, the impact to our consolidated statements of operations could be significant and may affect year-to-year comparability of operating results. The impact from foreign currency transactions during 2024, 2023 and 2022 was immaterial.
We maintain our cash and cash equivalents and our marketable securities with several financial institutions. Given the short-term nature of certain investments, the related income is subject to the general level of interest rates in the United States at the time of maturity and reinvestment. We manage investment interest rate market risk primarily by managing portfolio maturity.
We maintain our cash and cash equivalents and our marketable securities with several financial institutions. 43 Table of Contents Given the short-term nature of certain investments, the related income is subject to the general level of interest rates in the United States at the time of maturity and reinvestment.
Our Materials Segment continues to have international operations in Canada. We also have affiliates that operate in Latin America (see Note 10 of “Notes to the Consolidated Financial Statements”). As of December 31, 2023, we do not have any outstanding foreign currency option contracts.
Our Materials Segment has an insignificant amount of operations in Canada and we also have affiliates that operate in Latin America (see Note 10 of “Notes to the Consolidated Financial Statements” for further information on our affiliates). As of December 31, 2024, we do not have any outstanding foreign currency option contracts.
The impact from foreign currency transactions during 2023, 2022 and 2021 was immaterial. 42 Table of Contents We may borrow on the Revolver, at our option, at either (a) the SOFR term rate plus a credit adjustment spread plus applicable margin ranging from 1.0% to 2.0%, or (b) a base rate plus an applicable margin ranging from 0.0% to 1.0%.
We may borrow on the Revolver, at our option, at either (a) the SOFR term rate plus a credit adjustment spread plus applicable margin ranging from 1.0% to 2.0%, or (b) a base rate plus an applicable margin ranging from 0.0% to 1.0%.
The fair value of 2.75% Convertible Notes was approximately $51.0 million and $281.4 million as of December 31, 2023 and 2022, respectively. 43 Table of Contents
The fair value of the 3.75% Convertible Notes was approximately $738.7 million and $475.6 million as of December 31, 2024 and 2023, respectively. The fair value of 3.25% Convertible Notes was approximately $491.6 million as of December 31, 2024. 44 Table of Contents
The fair value of our long-term held-to-maturity investment portfolio may be affected by changes in interest rates. Operating in international markets involves exposure to possible volatile movements in currency exchange rates. In the third quarter of 2023 we began the wind down of our international Minerals Services operations which operated in Mexico and Canada.
We manage investment interest rate market risk primarily by managing portfolio maturity. Operating in international markets involves exposure to possible volatile movements in currency exchange rates.
Removed
(2) The effective interest rate was calculated using a blended rate based on the fixed rate associated with the cash flow hedge (see Note 8 of “Notes to the Consolidated Financial Statements”) of 3.73% plus 10 basis points plus applicable margin and the one-month SOFR plus 10 basis points plus the applicable margin for the remaining amount of the Term Loan not covered by the hedge.
Removed
The estimated fair value of our cash and cash equivalents approximates the principal amounts reflected above based on the generally short maturities of these financial instruments. The fair value of the 3.75% Convertible Notes was approximately $475.6 million as of December 31, 2023.

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