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This amount represents employee tax withholding for RSUs vested under our 2012 and 2021 Equity Incentive Plans in 2022 and 2023 and stock repurchased under the Board approved repurchase plan in 2022.
This balance is primarily related to local bank debt for equipment purchases and debt associated with our real estate investments.
All marketable securities as of March 31, 2023 and December 31, 2022 were classified as held-to-maturity and consisted of U.S. Government and agency obligations and corporate commercial paper maturing in two months to three years.
The fair value of our 2.75% convertible senior notes due 2024 (the "2.75% Convertible Notes") is based on the median price of the notes in an active market. The fair value of the Fourth Amended and Restated Credit Agreement (the "Credit Agreement") is based on borrowing rates available to us for long-term loans with similar terms, average maturities, and credit risk. See Note 14 for more information about the 2.75% Convertible Notes and the Credit Agreement.
During the three months ended March 31, 2023 and 2022, we did not record any fair value adjustments related to nonfinancial assets and liabilities measured at fair value on a nonrecurring basis.
Partners’ interest and adjustments includes amounts to reconcile total net assets as reported by our partners to Granite’s interest adjusted to reflect our accounting policies and estimates primarily related to contract forecast differences.
These joint venture net income/(loss) amounts exclude our corporate overhead required to manage the joint ventures and include taxes only to the extent the applicable states have joint venture level taxes.
Included in this balance as of March 31, 2023 and December 31, 2022 was $104.3 million and $104.3 million, respectively, related to Granite’s share of estimated cost recovery of customer affirmative claims. In addition, this balance included $2.6 million and $2.7 million related to Granite’s share of estimated
recovery of back charge claims as of March 31, 2023 and December 31, 2022, respectively.
Included in this balance and in accrued expenses and other current liabilities on the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 was $58.2 million and $64.7 million, respectively, related to performance guarantees (see Note 13).
Partners’ interest and adjustments includes amounts to reconcile total revenue and total cost of revenue as reported by our partners to Granite’s interest adjusted to reflect our accounting policies and estimates primarily related to contract forecast and/or actual differences.
Included in this balance and in accrued expenses and other current liabilities on our condensed consolidated balance sheets was $14.5 million, and $14.0 million as of March 31, 2023 and December 31, 2022, respectively, related to deficits in unconsolidated construction joint ventures, which includes
provisions for losses.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
| For the quarterly period ended March 31, 2023 |
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
| For the transition period from ___________ to ___________ |
| |
| Commission File Number: 1-12911 |
GRANITE CONSTRUCTION INCORPORATED
State of Incorporation: | I.R.S. Employer Identification Number: |
Delaware | 77-0239383 |
Address of principal executive offices:
585 W. Beach Street
Watsonville, California 95076
(831) 724-1011
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, $0.01 par value | GVA | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ | Accelerated filer ☐ | Non-accelerated filer ☐ | Smaller reporting company ☐ | Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of April 26, 2023.
Class | | Outstanding |
Common stock, $0.01 par value | | 43,880,771 |
TABLE OF CONTENTS
EXHIBIT 101.PRE |
EXHIBIT 104 |
EXPLANATORY NOTE
As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022 filed on February 21, 2023, the restatement of our unaudited quarterly financial information for the first three quarters in the year ended December 31, 2022 is necessary to correct for (a) errors related to deferred taxes and the calculation of income tax expense in connection with the sale of the Company’s trenchless and pipe rehabilitation services business (“Inliner”), which was completed in the first quarter of 2022 and was classified within discontinued operations in the Company’s condensed consolidated statement of operations during the first and second quarters of 2022 and (b) other immaterial errors, including certain errors that had previously been adjusted for as out of period corrections.
The financial information for the three months ended March 31, 2022 presented herein also includes adjustments to retrospectively reclassify the results of the former Water and Mineral Services businesses from discontinued operations to continuing operations.
We have reflected the impact of the restatement and reclassification of discontinued operations on our unaudited condensed consolidated financial information as of and for the three months ended March 31, 2022 herein. See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for additional information.
PART I. FINANCIAL INFORMATION
Item 1. |
FINANCIAL STATEMENTS |
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousands, except share and per share data)
| | March 31, 2023 | | | December 31, 2022 | |
ASSETS | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents ($112,340 and $102,547 related to consolidated construction joint ventures (“CCJVs”)) | | $ | 199,751 | | | $ | 293,991 | |
Short-term marketable securities | | | 39,754 | | | | 39,374 | |
Receivables, net ($25,488 and $39,281 related to CCJVs) | | | 397,231 | | | | 463,987 | |
Contract assets ($86,027 and $80,306 related to CCJVs) | | | 288,146 | | | | 241,916 | |
Inventories | | | 97,893 | | | | 86,809 | |
Equity in construction joint ventures | | | 182,063 | | | | 183,808 | |
Other current assets ($3,145 and $5,694 related to CCJVs) | | | 41,397 | | | | 37,411 | |
Total current assets | | | 1,246,235 | | | | 1,347,296 | |
Property and equipment, net ($7,540 and $7,834 related to CCJVs) | | | 531,457 | | | | 509,210 | |
Long-term marketable securities | | | 16,575 | | | | 26,569 | |
Investments in affiliates | | | 83,335 | | | | 80,725 | |
Goodwill | | | 73,703 | | | | 73,703 | |
Right of use assets | | | 43,886 | | | | 49,079 | |
Deferred income taxes, net | | | 22,080 | | | | 22,208 | |
Other noncurrent assets | | | 60,116 | | | | 59,143 | |
Total assets | | $ | 2,077,387 | | | $ | 2,167,933 | |
| | | | | | | | |
LIABILITIES AND EQUITY | | | | | | | | |
Current liabilities | | | | | | | | |
Current maturities of long-term debt | | $ | 1,456 | | | $ | 1,447 | |
Accounts payable ($43,009 and $57,534 related to CCJVs) | | | 295,125 | | | | 334,392 | |
Contract liabilities ($46,943 and $62,675 related to CCJVs) | | | 160,245 | | | | 173,286 | |
Accrued expenses and other current liabilities ($7,570 and $8,451 related to CCJVs) | | | 266,541 | | | | 288,469 | |
Total current liabilities | | | 723,367 | | | | 797,594 | |
Long-term debt | | | 287,000 | | | | 286,934 | |
Long-term lease liabilities | | | 27,934 | | | | 32,170 | |
Deferred income taxes, net | | | 1,678 | | | | 1,891 | |
Other long-term liabilities | | | 64,997 | | | | 64,199 | |
Commitments and contingencies (see Note 17) | | | | | | | | |
Equity | | | | | | | | |
Preferred stock, $0.01 par value, authorized 3,000,000 shares, none outstanding | | | — | | | | — | |
Common stock, $0.01 par value, authorized 150,000,000 shares; issued and outstanding: 43,880,224 shares as of March 31, 2023 and 43,743,907 shares as of December 31, 2022 | | | 439 | | | | 437 | |
Additional paid-in capital | | | 471,782 | | | | 470,407 | |
Accumulated other comprehensive income | | | 653 | | | | 788 | |
Retained earnings | | | 452,583 | | | | 481,384 | |
Total Granite Construction Incorporated shareholders’ equity | | | 925,457 | | | | 953,016 | |
Non-controlling interests | | | 46,954 | | | | 32,129 | |
Total equity | | | 972,411 | | | | 985,145 | |
Total liabilities and equity | | $ | 2,077,387 | | | $ | 2,167,933 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share data)
|
|
|
|
As Restated and Recast |
Three Months Ended March 31, |
|
2023 |
|
|
2022 |
|
Revenue |
|
|
|
|
|
|
|
|
Construction |
|
$ |
503,416 |
|
|
$ |
578,266 |
|
Materials |
|
|
56,652 |
|
|
|
75,620 |
|
Total revenue |
|
|
560,068 |
|
|
|
653,886 |
|
Cost of revenue |
|
|
|
|
|
|
|
|
Construction |
|
|
466,711 |
|
|
|
519,787 |
|
Materials |
|
|
60,998 |
|
|
|
74,007 |
|
Total cost of revenue |
|
|
527,709 |
|
|
|
593,794 |
|
Gross profit |
|
|
32,359 |
|
|
|
60,092 |
|
Selling, general and administrative expenses |
|
|
73,122 |
|
|
|
70,120 |
|
Other costs, net |
|
|
4,523 |
|
|
|
6,279 |
|
Gain on sales of property and equipment, net |
|
|
(2,037 |
) |
|
|
(598 |
) |
Operating loss |
|
|
(43,249 |
) |
|
|
(15,709 |
) |
Other (income) expense |
|
|
|
|
|
|
|
|
Interest income |
|
|
(3,762 |
) |
|
|
(570 |
) |
Interest expense |
|
|
2,891 |
|
|
|
3,585 |
|
Equity in income of affiliates, net |
|
|
(5,187 |
) |
|
|
(1,289 |
) |
Other (income) expense, net |
|
|
(1,950 |
) |
|
|
1,308 |
|
Total other (income) expense, net |
|
|
(8,008 |
) |
|
|
3,034 |
|
Loss before income taxes |
|
|
(35,241 |
) |
|
|
(18,743 |
) |
Provision for (benefit from) income taxes |
|
|
(9,469 |
) |
|
|
6,352 |
|
Net loss |
|
|
(25,772 |
) |
|
|
(25,095 |
) |
Amount attributable to non-controlling interests |
|
|
2,749 |
|
|
|
(1,638 |
) |
Net loss attributable to Granite Construction Incorporated |
|
$ |
(23,023 |
) |
|
$ |
(26,733 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common shareholders (see Note 15): |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.53 |
) |
|
$ |
(0.58 |
) |
Diluted |
|
$ |
(0.53 |
) |
|
$ |
(0.58 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
43,764 |
|
|
|
45,730 |
|
Diluted |
|
|
43,764 |
|
|
|
45,730 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited - in thousands)
|
|
|
|
As Restated |
|
Three Months Ended March 31, |
|
2023 |
|
|
2022 |
|
Net loss |
|
$ |
(25,772 |
) |
|
$ |
(25,095 |
) |
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
Net unrealized gain (loss) on cash flow hedges, net of tax |
|
$ |
(192 |
) |
|
$ |
2,436 |
|
Less: reclassification for net gains included in interest expense, net of tax |
|
|
— |
|
|
|
1,760 |
|
Net change |
|
$ |
(192 |
) |
|
$ |
4,196 |
|
Foreign currency translation adjustments, net |
|
|
57 |
|
|
|
736 |
|
Other comprehensive income (loss), net of tax |
|
$ |
(135 |
) |
|
$ |
4,932 |
|
Comprehensive loss, net of tax |
|
$ |
(25,907 |
) |
|
$ |
(20,163 |
) |
Non-controlling interests in comprehensive income, net of tax |
|
|
2,749 |
|
|
|
(1,638 |
) |
Comprehensive loss attributable to Granite Construction Incorporated, net of tax |
|
$ |
(23,158 |
) |
|
$ |
(21,801 |
) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited - in thousands, except share data)
| | Outstanding Shares | | | Common Stock | | | Additional Paid-In Capital | | | Accumulated Other Comprehensive Income (Loss) | | | Retained Earnings | | | Total Granite Shareholders’ Equity | | | Non-controlling Interests | | | Total Equity | |
Balances at December 31, 2022 | | | 43,743,907 | | | $ | 437 | | | $ | 470,407 | | | $ | 788 | | | $ | 481,384 | | | $ | 953,016 | | | $ | 32,129 | | | $ | 985,145 | |
Net loss | | | — | | | | — | | | | — | | | | — | | | | (23,023 | ) | | | (23,023 | ) | | | (2,749 | ) | | | (25,772 | ) |
Other comprehensive loss | | | — | | | | — | | | | — | | | | (135 | ) | | | — | | | | (135 | ) | | | — | | | | (135 | ) |
Repurchases of common stock (1) | | | (87,260 | ) | | | — | | | | (3,523 | ) | | | — | | | | — | | | | (3,523 | ) | | | — | | | | (3,523 | ) |
RSUs vested | | | 223,967 | | | | 2 | | | | (2 | ) | | | — | | | | — | | | | — | | | | — | | | | — | |
Dividends on common stock ($0.13 per share) | | | — | | | | — | | | | 74 | | | | — | | | | (5,778 | ) | | | (5,704 | ) | | | — | | | | (5,704 | ) |
Transactions with non-controlling interests | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,574 | | | | 17,574 | |
Stock-based compensation expense and other | | | (390 | ) | | | — | | | | 4,826 | | | | — | | | | — | | | | 4,826 | | | | — | | | | 4,826 | |
Balances at March 31, 2023 | | | 43,880,224 | | | $ | 439 | | | $ | 471,782 | | | $ | 653 | | | $ | 452,583 | | | $ | 925,457 | | | $ | 46,954 | | | $ | 972,411 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balances at December 31, 2021 | | | 45,840,260 | | | $ | 458 | | | $ | 559,752 | | | $ | (3,359 | ) | | $ | 410,831 | | | $ | 967,682 | | | $ | 27,881 | | | $ | 995,563 | |
Cumulative effect of newly adopted accounting standard | | | — | | | | — | | | | (26,961 | ) | | | — | | | | 10,543 | | | | (16,418 | ) | | | — | | | | (16,418 | ) |
Balances at January 1, 2022 | | | 45,840,260 | | | | 458 | | | | 532,791 | | | | (3,359 | ) | | | 421,374 | | | | 951,264 | | | | 27,881 | | | | 979,145 | |
Net income (loss) (as restated) | | | — | | | | — | | | | — | | | | — | | | | (26,733 | ) | | | (26,733 | ) | | | 1,638 | | | | (25,095 | ) |
Other comprehensive income | | | — | | | | — | | | | — | | | | 4,932 | | | | — | | | | 4,932 | | | | — | | | | 4,932 | |
Repurchases of common stock (1) | | | (665,880 | ) | | | (6 | ) | | | (20,206 | ) | | | — | | | | — | | | | (20,212 | ) | | | — | | | | (20,212 | ) |
RSUs vested | | | 190,170 | | | | 2 | | | | (2 | ) | | | — | | | | — | | | | — | | | | — | | | | — | |
Dividends on common stock ($0.13 per share) | | | — | | | | — | | | | 69 | | | | — | | | | (5,885 | ) | | | (5,816 | ) | | | — | | | | (5,816 | ) |
Transactions with non-controlling interests | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 6,325 | | | | 6,325 | |
Stock-based compensation expense and other | | | (413 | ) | | | — | | | | 2,610 | | | | — | | | | — | | | | 2,610 | | | | — | | | | 2,610 | |
Balances at March 31, 2022 (as restated) | | | 45,364,137 | | | $ | 454 | | | $ | 515,262 | | | $ | 1,573 | | | $ | 388,756 | | | $ | 906,045 | | | $ | 35,844 | | | $ | 941,889 | |
(1) This amount represents employee tax withholding for restricted stock units ("RSUs") vested under our equity incentive plans in 2022 and 2023 and stock repurchased in 2022 under the Board approved repurchase plan. During the three months ended March 31, 2023 and 2022, there were 87,260 shares and 54,880 shares, respectively, withheld related to employee taxes for RSUs. During the three months ended March 31, 2022, we also repurchased 611,000 shares under the share repurchase program.
The accompanying notes are an integral part of these condensed consolidated financial statements.
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
| | | | As Restated | |
Three Months Ended March 31, | | | 2023 | | | | 2022 | |
Operating activities | | | | | | | | |
Net loss | | $ | (25,772 | ) | | $ | (25,095 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | |
Depreciation, depletion and amortization | | | 19,733 | | | | 16,737 | |
Amortization related to long-term debt | | | 472 | | | | 652 | |
Gain on sale of business | | | — | | | | (3,278 | ) |
Gain on sales of property and equipment, net | | | (2,037 | ) | | | (598 | ) |
Deferred income taxes | | | — | | | | 2,545 | |
Stock-based compensation | | | 4,828 | | | | 2,614 | |
Equity in net (income) loss from unconsolidated joint ventures | | | (911 | ) | | | 3,627 | |
Net income from affiliates | | | (5,187 | ) | | | (1,289 | ) |
Other non-cash adjustments | | | (151 | ) | | | (299 | ) |
Changes in assets and liabilities: | | | | | | | | |
Receivables | | | 66,800 | | | | 85,957 | |
Contract assets, net | | | (59,307 | ) | | | (69,819 | ) |
Inventories | | | (11,083 | ) | | | (13,805 | ) |
Contributions to unconsolidated construction joint ventures | | | (3,350 | ) | | | (12,840 | ) |
Distributions from unconsolidated construction joint ventures and affiliates | | | 2,478 | | | | 250 | |
Other assets, net | | | (5,724 | ) | | | 9,652 | |
Accounts payable | | | (42,955 | ) | | | (44,028 | ) |
Accrued expenses and other liabilities, net | | | (14,522 | ) | | | (1,163 | ) |
Net cash used in operating activities | | $ | (76,688 | ) | | $ | (50,180 | ) |
Investing activities | | | | | | | | |
Purchases of marketable securities | | | — | | | | (19,940 | ) |
Maturities of marketable securities | | | 10,000 | | | | — | |
Purchases of property and equipment | | | (40,461 | ) | | | (31,269 | ) |
Proceeds from sales of property and equipment | | | 4,518 | | | | 2,483 | |
Proceeds from company owned life insurance | | | 1,545 | | | | — | |
Proceeds from the sale of business | | | — | | | | 142,571 | |
Issuance of notes receivable | | | — | | | | (4,560 | ) |
Collection of notes receivable | | | 62 | | | | 111 | |
Net cash provided by (used in) investing activities | | $ | (24,336 | ) | | $ | 89,396 | |
Financing activities | | | | | | | | |
Debt principal repayments | | | (256 | ) | | | (63,059 | ) |
Cash dividends paid | | | (5,687 | ) | | | (5,959 | ) |
Repurchases of common stock | | | (3,523 | ) | | | (20,212 | ) |
Contributions from non-controlling partners | | | 17,600 | | | | 6,325 | |
Distributions to non-controlling partners | | | (1,350 | ) | | | — | |
Other financing activities, net | | | — | | | | 1 | |
Net cash provided by (used in) financing activities | | $ | 6,784 | | | $ | (82,904 | ) |
Net decrease in cash, cash equivalents and restricted cash | | | (94,240 | ) | | | (43,688 | ) |
Cash, cash equivalents and $0 and $1,512 in restricted cash at beginning of period | | | 293,991 | | | | 413,655 | |
Cash, cash equivalents and $0 and $1,512 in restricted cash at end of period | | $ | 199,751 | | | $ | 369,967 | |
| | | | | | | | |
Supplementary Information | | | | | | | | |
Right of use assets obtained in exchange for lease obligations | | $ | 3,388 | | | $ | 3,502 | |
Cash paid during the period for: | | | | | | | | |
Operating lease liabilities | | $ | 5,824 | | | $ | 5,862 | |
Interest | | $ | 1,012 | | | $ | 2,090 | |
Income taxes | | $ | 166 | | | $ | 2 | |
Other non-cash operating activities: | | | | | | | | |
Performance guarantees | | $ | (6,513 | ) | | $ | — | |
Non-cash investing and financing activities: | | | | | | | | |
RSUs issued, net of forfeitures | | $ | 9,552 | | | $ | 6,606 | |
Dividends declared but not paid | | $ | 5,704 | | | $ | 5,897 | |
Contributions from non-controlling partners | | $ | 1,324 | | | $ | — | |
Accrued equipment purchases | | $ | 3,693 | | | $ | 5,511 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
GRANITE CONSTRUCTION INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General
Basis of Presentation: The condensed consolidated financial statements included herein have been prepared by Granite Construction Incorporated (“we,” “us,” “our,” the “Company” or “Granite”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), are unaudited and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 (“Annual Report”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. Further, the condensed consolidated financial statements reflect, in the opinion of management, all normal recurring adjustments necessary to state fairly our financial position at March 31, 2023 and 2022 and the results of our operations and cash flows for the periods presented. The December 31, 2022 condensed consolidated balance sheet data included herein was derived from audited consolidated financial statements but does not include all disclosures required by U.S. GAAP.
Seasonality: 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. Therefore, the results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year.
Subsequent Event: On April 24, 2023, we completed the purchase of Coast Mountain Resources (2020) Ltd. (“CMR”) for approximately $27 million, subject to certain adjustments. CMR is a construction aggregate producer based in British Columbia, Canada operating on Malahat First Nation land. This acquisition is not expected to have a material impact on our results of operations.
2. Recently Issued and Adopted Accounting Pronouncements
We closely monitor all Accounting Standards Updates issued by the Financial Accounting Standards Board and other authoritative guidance. There are currently no recently issued accounting pronouncements that are expected to have a material impact on our financial statements. No new accounting pronouncements were adopted in the three months ended March 31, 2023 that had a material impact on our financial statements.
GRANITE CONSTRUCTION INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
3. Restatement and Recast
Restatement and Recast Background
As disclosed in our Annual Report, we identified errors during the preparation of the Annual Report related to deferred taxes and the calculation of income tax expense of $12.3 million in connection with the sale of Inliner, which was completed in the first quarter of 2022 and was classified within discontinued operations in the Company's condensed consolidated financial statements during the first and second quarters of 2022 and in Other costs, net and Provision for income taxes during the third quarter of 2022. As a result, our previously issued unaudited quarterly financial information for each interim period within the nine months ended September 30, 2022 require restatement. The restated financial information also includes adjustments to correct other immaterial errors in the first three quarters of 2022, including certain errors (primarily in revenue and cost of revenue, including the associated tax impact) that had previously been adjusted for as out of period corrections in the periods identified.
During the fourth quarter of 2021, we concluded that the assets and liabilities of our former Water and Mineral Services operating group (“WMS”) met the criteria for classification as held for sale and the results of operations were presented as discontinued operations. This included: our trenchless and pipe rehabilitation services business (“Inliner”); our water supply, treatment, delivery and maintenance business (“Water Resources”); and our mineral exploration drilling business (“Mineral Services”). During the first quarter of 2022, we completed the sale of Inliner. In September 2022, we announced our decision to retain the Water Resources and Mineral Services businesses that were previously classified as held for sale and reported in discontinued operations. In connection with the reclassification of the WMS businesses from discontinued operations to continuing operations, the condensed consolidated statement of operations for the period ended March 31, 2022, as previously reported, has been recast to include Inliner through the date of sale, as well as the ongoing operations of Water Resources and Mineral Services in continuing operations.
Description of Restatement and Recast Tables
We have presented below a reconciliation from the previously reported to the restated and recast amounts for the quarter ended March 31, 2022. The amounts labeled “As Previously Reported” were derived from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 filed on April 28, 2022.
The impacts to the condensed consolidated statements of shareholders’ equity and comprehensive income (loss) as a result of the restatement were due to the changes in net loss for the three months ended March 31, 2022. In addition, there was no impact to net cash provided by (used in) investing and financing activities for the three months ended March 31, 2022 as a result of the restatement or recast.
The effects of the prior-period errors and the discontinued operations reclassification impacts on our condensed consolidated financial statements are as follows (in thousands, except per share data):
GRANITE CONSTRUCTION INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended March 31, 2022 | | | As Previously Reported | | | | Restatement Impacts | | | | As Restated | | | | Discontinued Operations Reclassification Impacts | | | | As Restated and Recast | |
Revenue | | | | | | | | | | | | | | | | | | | | |
Construction | | $ | 474,935 | | | $ | 1,893 | | | $ | 476,828 | | | $ | 101,438 | | | $ | 578,266 | |
Materials | | | 72,651 | | | | - | | | | 72,651 | | | | 2,969 | | | | 75,620 | |
Total revenue | | | 547,586 | | | | 1,893 | | | | 549,479 | | | | 104,407 | | | | 653,886 | |
Cost of revenue | | | | | | | | | | | | | | | | | | | | |
Construction | | | 426,743 | | | | 6,019 | | | | 432,762 | | | | 87,025 | | | | 519,787 | |
Materials | | | 71,068 | | | | - | | | | 71,068 | | | | 2,939 | | | | 74,007 | |
Total cost of revenue | | | 497,811 | | | | 6,019 | | | | 503,830 | | | | 89,964 | | | | 593,794 | |
Gross profit | | | 49,775 | | | | (4,126 | ) | | | 45,649 | | | | 14,443 | | | | 60,092 | |
Selling, general and administrative expenses | | | 58,501 | | | | - | | | | 58,501 | | | | 11,619 | | | | 70,120 | |
Other costs, net | | | 8,214 | | | | - | | | | 8,214 | | | | (1,935 | ) | | | 6,279 | |
Gain on sales of property and equipment, net | | | (332 | ) | | | - | | | | (332 | ) | | | (266 | ) | | | (598 | ) |
Operating loss | | | (16,608 | ) | | | (4,126 | ) | | | (20,734 | ) | | | 5,025 | | | | (15,709 | ) |
Other (income) expense | | | | | | | | | | | | | | | | | | | | |
Interest income | | | (623 | ) | | | - | | | | (623 | ) | | | 53 | | | | (570 | ) |
Interest expense | | | 3,575 | | | | - | | | | 3,575 | | | | 10 | | | | 3,585 | |
Equity in income (loss) of affiliates | | | 306 | | | | - | | | | 306 | | | | (1,595 | ) | | | (1,289 | ) |
Other income, net | | | 1,382 | | | | - | | | | 1,382 | | | | (74 | ) | | | 1,308 | |
Total other expense, net | | | 4,640 | | | | - | | | | 4,640 | | | | (1,606 | ) | | | 3,034 | |
Loss from continuing operations before income taxes | | | (21,248 | ) | | | (4,126 | ) | | | (25,374 | ) | | | 6,631 | | | | (18,743 | ) |
Provision for (benefit from) income taxes on continuing operations | | | (5,331 | ) | | | (958 | ) | | | (6,289 | ) | | | 12,641 | | | | 6,352 | |
Net loss from continuing operations | | | (15,917 | ) | | | (3,168 | ) | | | (19,085 | ) | | | (6,010 | ) | | | (25,095 | ) |
Net Income (loss) from discontinued operations | | | 6,096 | | | | (12,106 | ) | | | (6,010 | ) | | | 6,010 | | | | - | |
Net loss | | | (9,821 | ) | | | (15,274 | ) | | | (25,095 | ) | | | - | | | | (25,095 | ) |
Amount attributable to non-controlling interests | | | (3,118 | ) | | | 1,480 | | | | (1,638 | ) | | | - | | | | (1,638 | ) |
Net loss attributable to Granite Construction Incorporated from continuing operations | | | (19,035 | ) | | | (1,688 | ) | | | (20,723 | ) | | | (6,010 | ) | | | (26,733 | ) |
Net income (loss) attributable to Granite Construction Incorporated from discontinued operations | | | 6,096 | | | | (12,106 | ) | | | (6,010 | ) | | | 6,010 | | | | - | |
Net loss attributable to Granite Construction Incorporated | | $ | (12,939 | ) | | $ | (13,794 | ) | | $ | (26,733 | ) | | $ | - | | | $ | (26,733 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) per share attributable to common shareholders | | | | | | | | | | | | | | | | | | | | |
Basic continuing operations per share | | $ | (0.42 | ) | | $ | (0.03 | ) | | $ | (0.45 | ) | | $ | (0.13 | ) | | $ | (0.58 | ) |
Basic discontinued operations per share | | | 0.13 | | | | (0.26 | ) | | | (0.13 | ) | | | 0.13 | | | | - | |
Basic loss per share | | $ | (0.29 | ) | | $ | (0.29 | ) | | $ | (0.58 | ) | | $ | - | | | $ | (0.58 | ) |
| | | | | | | | | | | | | | | | | | | | |
Diluted continuing operations per share | | $ | (0.42 | ) | | $ | (0.03 | ) | | $ | (0.45 | ) | | $ | (0.13 | ) | | $ | (0.58 | ) |
Diluted discontinued operations per share | | | 0.13 | | | | (0.26 | ) | | | (0.13 | ) | | | 0.13 | | | | - | |
Diluted loss per share | | $ | (0.29 | ) | | $ | (0.29 | ) | | $ | (0.58 | ) | | $ | - | | | $ | (0.58 | ) |
Weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | |
Basic | | | 45,730 | | | | - | | | | 45,730 | | | | - | | | | 45,730 | |
Diluted | | | 45,730 | | | | - | | | | 45,730 | | | | - | | | | 45,730 | |
GRANITE CONSTRUCTION INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Three months ended March 31, 2022 | | As Previously Reported | | | Restatement Impacts | | | As Restated | |
Operating activities | | | | | | | | | | | | |
Net loss | | $ | (9,821 | ) | | $ | (15,274 | ) | | $ | (25,095 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | |
Depreciation, depletion and amortization | | | 16,737 | | | | - | | | | 16,737 | |
Amortization related to long-term debt | | | 652 | | | | - | | | | 652 | |
Gain on sale of business | | | (6,234 | ) | | | 2,956 | | | | (3,278 | ) |
Gain on sales of property and equipment, net | | | (598 | ) | | | - | | | | (598 | ) |
Deferred income taxes | | | 2,545 | | | | - | | | | 2,545 | |
Stock-based compensation | | | 2,614 | | | | - | | | | 2,614 | |
Equity in net loss from unconsolidated joint ventures | | | 3,627 | | | | - | | | | 3,627 | |
Net income from affiliates | | | (1,289 | ) | | | - | | | | (1,289 | ) |
Other non-cash adjustments | | | (299 | ) | | | - | | | | (299 | ) |
Changes in assets and liabilities: | | | | | | | | | | | | |
Receivables | | | 85,957 | | | | - | | | | 85,957 | |
Contract assets, net | | | (72,632 | ) | | | 2,813 | | | | (69,819 | ) |
Inventories | | | (13,805 | ) | | | - | | | | (13,805 | ) |
Contributions to unconsolidated construction joint ventures | | | (12,840 | ) | | | - | | | | (12,840 | ) |
Distributions from unconsolidated construction joint ventures and affiliates | | | 250 | | | | - | | | | 250 | |
Other assets, net | | | 1,264 | | | | 8,388 | | | | 9,652 | |
Accounts payable | | | (44,028 | ) | | | - | | | | (44,028 | ) |
Accrued expenses and other liabilities, net | | | (2,280 | ) | | | 1,117 | | | | (1,163 | ) |
Net cash used in operating activities | | $ | (50,180 | ) | | $ | - | | | $ | (50,180 | ) |
GRANITE CONSTRUCTION INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
4. Revisions in Estimates
Our profit recognition related to construction contracts is based on estimates of transaction price and costs to complete each project. These estimates can vary significantly in the normal course of business as projects progress, circumstances develop and evolve, and uncertainties are resolved. Changes in estimates of transaction price and costs to complete may result in the reversal of previously recognized revenue if the current estimate adversely differs from the previous estimate. In addition, the estimated or actual recovery related to estimated costs associated with unresolved affirmative claims and back charges may be recorded in future periods or may be at values below the associated cost, which can cause fluctuations in the gross profit impact from revisions in estimates.
When we experience significant revisions in our estimates, we undergo a process that includes reviewing the nature of the changes to ensure that there are no material amounts that should have been recorded in a prior period rather than as revisions in estimates for the current period. For revisions in estimates, generally we use the cumulative catch-up method for changes to the transaction price that are part of a single performance obligation. Under this method, revisions in estimates are accounted for in their entirety in the period of change. There can be no assurance that we will not experience further changes in circumstances or otherwise be required to revise our estimates in the future.
In our review of these changes for the three months ended March 31, 2023 and 2022, we did not identify any material amounts that should have been recorded in a prior period.
There were no increases from revisions in estimates, which individually had an impact of $5.0 million or more on gross profit for the three months ended March 31, 2023 and 2022.
There were no decreases from revisions in estimates, which individually had an impact of $5.0 million or more on gross profit for the three months ended March 31, 2022.
The projects with decreases from revisions in estimates during the three months ended March 31, 2023, which individually had an impact of $5.0 million or more on gross profit, are summarized as follows (dollars in millions, except per share data):
Three Months Ended March 31, | | 2023 | |
Number of projects with downward estimate changes | | | 2 | |
Range of reduction in gross profit from each project, net | | $ | 6.2 - 11.4 | |
Decrease to project profitability, net | | $ | 17.6 | |
Decrease to net income/increase to net loss | | $ | 13.1 | |
Amounts attributable to non-controlling interests | | $ | 5.7 | |
Decrease to net income/increase to net loss attributable to Granite Construction Incorporated | | $ | 7.5 | |
Decrease to net income/increase to net loss per diluted share attributable to common shareholders | | $ | 0.17 | |
The decreases during the three months ended March 31, 2023 were due to additional costs related to changes in project duration, increased labor and materials costs, lower productivity than originally anticipated and unfavorable weather.
GRANITE CONSTRUCTION INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
5. Disaggregation of Revenue
We disaggregate our revenue based on our reportable segments (see Note 18) and operating groups as these are the formats that are regularly reviewed by management. Our reportable segments are: Construction and Materials. In alphabetical order, our operating groups are: California, Central and Mountain. The following tables present our disaggregated revenue by operating group (in thousands):
Three Months Ended March 31,
2023 | | Construction | | | Materials | | | Total | |
California | | $ | 148,947 | | | $ | 30,138 | | | $ | 179,085 | |
Central | | | 171,002 | | | | 11,556 | | | | 182,558 | |
Mountain | | | 183,467 | | | | 14,958 | | | | 198,425 | |
Total | | $ | 503,416 | | | $ | 56,652 | | | $ | 560,068 | |
2022 (As Restated and Recast) | | Construction | | | Materials | | | Total | |
California | | $ | 146,309 | | | $ | 45,687 | | | $ | 191,996 | |
Central | | | 219,894 | | | | 10,362 | | | | 230,256 | |
Mountain | | | 212,063 | | | | 19,571 | | | | 231,634 | |
Total | | $ | 578,266 | | | $ | 75,620 | | | $ | 653,886 | |
6. Unearned Revenue
The following table presents our unearned revenue as of the respective periods:
(in thousands) | | March 31, 2023 | | | December 31, 2022 | |
California | | $ | 1,011,489 | | | $ | 945,971 | |
Central | | | 1,437,759 | | | | 1,444,983 | |
Mountain | | | 714,320 | | | | 486,524 | |
Total | | $ | 3,163,568 | | | $ | 2,877,478 | |
All unearned revenue is in the Construction segment. Approximately $2.1 billion of the March 31, 2023 unearned revenue is expected to be recognized within the next twelve months and the remaining amount will be recognized thereafter.
GRANITE CONSTRUCTION INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
7. Contract Assets and Liabilities
As a result of changes in contract transaction price related to performance obligations that were satisfied or partially satisfied prior to the end of the periods, we recognized revenue of $44.2 million and $35.2 million during the three months ended March 31, 2023 and 2022, respectively. The changes in contract transaction price for the three months ended March 31, 2023 and 2022 were from items such as executed or estimated change orders and unresolved contract modifications and claims.
As of March 31, 2023 and December 31, 2022, the aggregate claim recovery estimates included in contract asset and liability balances were $74.0 million and $75.8 million, respectively.
The components of the contract asset balances as of the respective dates were as follows:
(in thousands) | | March 31, 2023 | | | December 31, 2022 | |
Costs in excess of billings and estimated earnings | | $ | 125,918 | | | $ | 80,357 | |
Contract retention | | | 162,228 | | | | 161,559 | |
Total contract assets | | $ | 288,146 | | | $ | 241,916 | |
As of March 31, 2023 and December 31, 2022, contract retention receivable from Brightline Trains Florida LLC represented 10.0% and 11.7%, respectively, of total contract assets. No other contract retention receivable individually exceeded 10% of total contract assets at any of the presented dates. The majority of the contract retention balance is expected to be collected within one year.
As work is performed, revenue is recognized and the corresponding contract liabilities are reduced. We recognized revenue of $123.0 million and $166.6 million during the three months ended March 31, 2023, and 2022, respectively, that was included in the contract liability balances at December 31, 2022 and 2021, respectively.
The components of the contract liability balances as of the respective dates were as follows:
(in thousands) | | March 31, 2023 | | | December 31, 2022 | |
Billings in excess of costs and estimated earnings, net of retention | | $ | 141,702 | | | $ | 152,294 | |
Provisions for losses | | | 18,543 | | | | 20,992 | |
Total contract liabilities | | $ | 160,245 | | | $ | 173,286 | |
8. Receivables, net
Receivables include billed and unbilled amounts for services provided to clients for which we have an unconditional right to payment as of the end of the applicable period and generally do not bear interest. The following table presents major categories of receivables:
(in thousands) | | March 31, 2023 | | | December 31, 2022 | |
Contracts completed and in progress: | | | | | | | | |
Billed | | $ | 190,635 | | | $ | 220,809 | |
Unbilled | | | 108,931 | | | | 120,348 | |
Total contracts completed and in progress | | | 299,566 | | | | 341,157 | |
Materials sales | | | 31,955 | | | | 52,182 | |
Other | | | 66,807 | | | | 71,790 | |
Total gross receivables | | | 398,328 | | | | 465,129 | |
Less: allowance for credit losses | | | 1,097 | | | | 1,142 | |
Total net receivables | | $ | 397,231 | | | $ | 463,987 | |
Included in other receivables at March 31, 2023 and December 31, 2022 were items such as estimated recovery from back charge claims, notes receivable, insurance receivable, fuel tax refunds and income tax refunds. Other receivables at March 31, 2023 and December 31, 2022 also included $24.9 million of working capital contributions in the form of a loan to a partner in one of our unconsolidated joint ventures that bears interest at prime plus 3.0% per annum. None of our customers had a receivable balance in excess of 10% of our total net receivables as of March 31, 2023 or December 31, 2022.
GRANITE CONSTRUCTION INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
9. Fair Value Measurement
The following tables summarize significant assets and liabilities measured at fair value in the condensed consolidated balance sheets on a recurring basis for each of the fair value levels (in thousands):
| | Fair Value Measurement at Reporting Date Using | |
March 31, 2023 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Cash equivalents | | | | | | | | | | | | | | | | |
Money market funds | | $ | 42,821 | | | $ | — | | | $ | — | | | $ | 42,821 | |
Total assets | | $ | 42,821 | | | $ | — | | | $ | — | | | $ | 42,821 | |
Accrued and other current liabilities | | | | | | | | | | | | | | | | |
Diesel collars | | $ | — | | | $ | 934 | | | $ | — | | | $ | 934 | |
Commodity swaps | | | — | | | | 138 | | | | — | | | | 138 | |
Total liabilities | | $ | — | | | $ | 1,072 | | | $ | — | | | $ | 1,072 | |
December 31, 2022 | | | | | | | | | | | | | | | | |
Cash equivalents | | | | | | | | | | | | | | | | |
Money market funds | | $ | 99,806 | | | $ | — | | | $ | — | | | $ | 99,806 | |
Other current assets | | | | | | | | | | | | | | | | |
Commodity swaps | | | — | | | | 121 | | | | — | | | | 121 | |
Total assets | | $ | 99,806 | | | $ | 121 | | | $ | — | | | $ | 99,927 | |
Commodity Derivatives
As of March 31, 2023 and December 31, 2022, we held commodity swaps for crude oil designated as cash flow hedges with a total outstanding notional amount of $14.0 million and $7.0 million, respectively, all maturing by October 31, 2023. The realized and unrealized losses associated with commodity swaps for the three months ended March 31, 2023 were immaterial. The realized gain associated with commodity swaps for the three months ended March 31, 2022 was immaterial and the unrealized gain was $3.3 million.
During the three months ended March 31, 2023, we entered into collar contracts to reduce our price exposure on diesel consumption. The collars were not designated as hedges and will be treated as a mark-to-market derivative instruments through the September 2024 maturity dates. The financial statement impact for the three months ended March 31, 2023 was an unrealized loss of $0.9 million.
GRANITE CONSTRUCTION INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
Other Assets and Liabilities
The carrying values and estimated fair values of financial instruments that are not required to be recorded at fair value in the condensed consolidated balance sheets were as follows:
| | | March 31, 2023 | | | December 31, 2022 | |
(in thousands) | Fair Value Hierarchy | | Carrying Value | | | Fair Value | | | Carrying Value | | | Fair Value | |
Assets: | | | | | | | | | | | | | | | | | |
Held-to-maturity marketable securities (1) | Level 1 | | $ | 56,329 | | | $ | 55,272 | | | $ | 65,943 | | | $ | 64,584 | |
Liabilities (including current maturities): | | | | | | | | | | | | | | | | | |
2.75% Convertible Notes (2) | Level 2 | | $ | 230,000 | | | $ | 311,880 | | | $ | 230,000 | | | $ | 281,365 | |
Credit Agreement - revolver (2) | Level 3 | | $ | 50,000 | | | $ | 49,110 | | | $ | 50,000 | | | $ | 49,536 | |
(1) All marketable securities as of March 31, 2023 and December 31, 2022 were classified as held-to-maturity and consisted of U.S. Government and agency obligations and corporate commercial paper maturing in two months to three years.
(2) The fair value of our 2.75% convertible senior notes due 2024 (the "2.75% Convertible Notes") is based on the median price of the notes in an active market. The fair value of the Fourth Amended and Restated Credit Agreement (the "Credit Agreement") is based on borrowing rates available to us for long-term loans with similar terms, average maturities, and credit risk. See Note 14 for more information about the 2.75% Convertible Notes and the Credit Agreement.
During the three months ended March 31, 2023 and 2022, we did not record any fair value adjustments related to nonfinancial assets and liabilities measured at fair value on a nonrecurring basis.
10. Construction Joint Ventures
We participate in various construction joint ventures. We have determined that certain of these joint ventures are consolidated because they are variable interest entities (“VIEs”) and we are the primary beneficiary. We continually evaluate whether there are changes in the status of the VIEs or changes to the primary beneficiary designation of the VIE. Based on our assessments during the three months ended March 31, 2023, we determined no change was required for existing joint ventures.
Due to the joint and several nature of the performance obligations under the related owner contracts, if any of our partners fail to perform, we and the remaining partners, if any, would be responsible for performance of the outstanding work (i.e., we provide a performance guarantee). At March 31, 2023, there was $245.2 million of remaining contract value on unconsolidated and line item construction joint venture contracts of which $109.4 million represented our share and the remaining $135.8 million represented our partners’ share. We are not able to estimate amounts that may be required beyond the current remaining forecasted cost of the work to be performed. These forecasted costs could be offset by billings to the customer or by proceeds from our partners’ corporate and/or other guarantees. See Note 13 for disclosure of the performance guarantee amounts recorded in the condensed consolidated balance sheets.
Consolidated Construction Joint Ventures (“CCJVs”)
At March 31, 2023, we were engaged in eleven active CCJV projects with total contract values ranging from $6.1 million to $432.5 million for a combined total of $1.7 billion of which our share was $1.0 billion. As of March 31, 2023, our share of revenue remaining to be recognized on these CCJVs was $181.3 million and ranged from $0.9 million to $85.1 million by project. Our proportionate share of the equity in these joint ventures was between 50.0% and 70.0%. During the three months ended March 31, 2023 and 2022, total revenue from CCJVs was $61.3 million and $104.3 million, respectively. During the three months ended March 31, 2023 and 2022, CCJVs used $24.8 million and $7.6 million of operating cash flows, respectively.
GRANITE CONSTRUCTION INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
Unconsolidated Construction Joint Ventures
As of March 31, 2023, we were engaged in seven active unconsolidated joint venture projects with total contract values ranging from $12.3 million to $3.8 billion for a combined total of $7.9 billion of which our share was $2.3 billion. Our proportionate share of the equity in these unconsolidated construction joint ventures ranged from 23.0% to 50.0%. As of March 31, 2023, our share of the revenue remaining to be recognized on these unconsolidated construction joint ventures was $72.4 million and ranged from $3.2 million to $34.4 million by project.
The following is summary financial information related to unconsolidated construction joint ventures:
(in thousands) | | March 31, 2023 | | | December 31, 2022 | |
Assets | | | | | | | | |
Cash, cash equivalents and marketable securities | | $ | 110,403 | | | $ | 130,635 | |
Other current assets (1) | | | 689,945 | | | | 681,221 | |
Noncurrent assets | | | 71,603 | | | | 76,204 | |
Less partners’ interest | | | 596,487 | | | | 604,741 | |
Granite’s interest (1),(2) | | $ | 275,464 | |