Delaware
|
77-0239383
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
585 West Beach Street
|
|
Watsonville, California
|
95076
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
New York Stock Exchange
|
EXHIBIT 10.18 | ||
EXHIBIT 10.19 | ||
EXHIBIT 10.20 | ||
EXHIBIT 10.21 | ||
EXHIBIT 101.INS | ||
EXHIBIT 101.SCH | ||
EXHIBIT 101.CAL | ||
EXHIBIT 101.DEF | ||
EXHIBIT 101.LAB | ||
EXHIBIT 101.PRE |
December 31,
|
2010
|
2009
|
||||||
Heavy construction equipment
|
2,104 |
2,362
|
||||||
Trucks, truck-tractors, trailers and vehicles
|
4,560 |
5,254
|
Name
|
Age
|
Position
|
James H. Roberts
|
54
|
President and Chief Executive Officer
|
Laurel J.
Krzeminski
|
56 |
Vice President and Chief Financial Officer
|
Michael F. Donnino
|
56 |
Senior Vice President and
Group
Manager
|
John A. Franich | 54 | Vice President and Group Manager |
Thomas S. Case | 48 | Vice President and Group Manager |
●
|
Unfavorable economic conditions have had and are expected to continue to have an adverse impact on our business
.
The recent recession and credit crisis and related turmoil in the global financial system has had and is expected to continue to have an adverse impact on our business, financial position, results of operations, cash flows and liquidity. In particular, declining tax revenues, budget deficits, financing constraints and competing priorities have resulted in, and are expected to continue to result in, cutbacks in new infrastructure projects in the public sector and could have an adverse impact on collectibility of receivables from government agencies. In addition, levels of new commercial and residential construction projects have declined significantly due to oversupply of existing inventories of commercial and residential properties, declining property values and a restrictive financing environment. This reduction in demand for construction and construction materials in both the public and private sector has resulted in intensified competition in both sectors, which has had an adverse impact on both our revenues and profit margins and could impact growth opportunities. These factors have also had an adverse impact on the levels of activity and financial position, results of operations, cash flows and liquidity of our real estate investment and development business
.
|
●
|
We work in a highly competitive marketplace.
We have multiple competitors in all of the areas in which we work, and some of our competitors are larger than we are and may have greater resources than we do. During economic down cycles or times of lower government funding for public works projects, competition for the fewer available public projects typically intensifies and this increased competition may result in a decrease in new awards at acceptable profit margins. In addition, downturns in residential and commercial construction activity increases the competition for available public sector work, further impacting our revenue, contract backlog and profit margins.
|
●
|
Accounting for our revenues and costs involves significant estimates.
As further described in “Critical Accounting Policies and Estimates” under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” 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 believe we have sufficient experience and processes to enable us to formulate appropriate assumptions and produce reasonably dependable estimates, these assumptions and estimates may change significantly in the future and could result in the reversal of previously recognized revenue and profit. Such changes could have a material adverse effect on our financial position, results of operations, cash flows and liquidity.
|
●
|
Our success depends on attracting and retaining qualified personnel in a competitive environment.
The success of our business is dependent on our ability to attract, develop and retain qualified personnel. Changes in general or local economic conditions and the resulting impact on the labor market may make it difficult to attract or retain qualified individuals in the geographic areas where we perform our work. If we are unable to provide competitive compensation packages, high-quality training programs or attractive work environments, our ability to profitably execute our work could be adversely impacted.
|
●
|
Fixed price and fixed unit price contracts subject us to the risk of increased project cost.
As more fully described in “Contract Provisions and Subcontracting” under “Item 1. Business,” the profitability of our fixed price and fixed unit price contracts can be adversely affected by a number of factors that can cause our actual costs to materially exceed the costs estimated at the time of our original bid.
|
●
|
Many of our contracts have penalties for late completion.
In some instances, including many of our fixed price contracts, we guarantee that we will complete a project by a certain date. If we subsequently fail to complete the project as scheduled we may be held responsible for costs resulting from the delay, generally in the form of contractually agreed-upon liquidated damages. To the extent these events occur, the total cost of the project could exceed our original estimate and we could experience reduced profits or a loss on that project.
|
●
|
Weather can significantly affect our quarterly revenues and profitability.
Our ability to perform work is significantly affected by weather conditions such as precipitation and temperature. Changes in weather conditions can cause delays and otherwise significantly affect our project costs. The impact of weather conditions can result in variability in our quarterly revenues and profitability, particularly in the first and fourth quarters of the year.
|
●
|
Design/build contracts subject us to the risk of design errors and omissions.
Design/build is increasingly being used as a method of project delivery as it provides the owner with a single point of responsibility for both design and construction. We generally subcontract design responsibility to architectural and engineering firms. However, in the event of a design error or omission causing damages, there is risk that the subcontractor or their errors and omissions insurance would not be able to absorb the liability. In this case we may be responsible, resulting in a potentially material adverse effect on our financial position, results of operations, cash flows and liquidity.
|
●
|
Failure of our subcontractors to perform as anticipated could have a negative impact on our results.
As further described in “Contract Provisions and Subcontracting” under “Item 1. Business,” we subcontract portions of many of our contracts to specialty subcontractors, but we are ultimately responsible for the successful completion of their work. Although we seek to require bonding or other forms of guarantees, we are not always successful in obtaining those bonds or guarantees from our higher risk subcontractors. In this case we may be responsible for the failures on the part of our subcontractors to perform as anticipated, resulting in a potentially adverse impact on our cash flows and liquidity. In addition, the total costs of a project could exceed our original estimates and we could experience reduced profits or a loss for that project, which could have an adverse impact on our financial position, results of operations, cash flows and liquidity.
|
●
|
We may be unable to identify qualified Disadvantaged Business Enterprise (“DBE”) contractors to perform as subcontractors.
Certain of our government agency projects contain minimum DBE participation clauses. If we subsequently fail to complete these projects with the minimum DBE participation, we may be held responsible for breach of contract damages which may include restrictions on our ability to bid on future projects as well as monetary damages. To the extent we are responsible for monetary damages, the total costs of the project could exceed our original estimates, we could experience reduced profits or a loss for that project and there could be an adverse impact to our financial position, results of operations, cash flows and liquidity.
|
●
|
Government contracts generally have strict regulatory requirements.
Approximately 83.3% of our consolidated revenue in 2010 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. Claims for civil or criminal fraud may be brought for violations of regulations, requirements or statutes. We may also be subject to qui tam (“Whistle Blower”) litigation brought by private individuals on behalf of the government under the Federal Civil False Claims Act, which could include claims for up to treble damages. Further, if we fail to comply with any of the regulations, requirements or statutes
or if we have a substantial number of accumulated Occupational Safety and Health Administration,
Mine Safety and Health Administration
or other workplace safety violations,
our existing government contracts could be terminated and we could be suspended from government contracting or subcontracting, including federally funded projects at the state level. Should one or more of these events occur, it could have a material adverse effect on our financial position, results of operations, cash flows and liquidity.
|
●
|
We are subject to environmental and other regulation.
As more fully described in “Environmental Regulations” under “Item 1. Business,” we are subject to a number of federal, state and local laws and regulations relating to the environment, workplace safety and a variety of socioeconomic requirements. Noncompliance with such laws and regulations can result in substantial penalties, or termination or suspension of government contracts as well as civil and criminal liability. In addition, some environmental laws and regulations impose liability and responsibility on present and former owners, operators or users of facilities and sites for contamination at such facilities and sites without regard to causation or knowledge of contamination. We occasionally evaluate various alternatives with respect to our facilities, including possible dispositions or closures. Investigations undertaken in connection with these activities may lead to discoveries of contamination that must be remediated, and closures of facilities may trigger compliance requirements that are not applicable to operating facilities. While compliance with these laws and regulations has not materially adversely affected our operations in the past, there can be no assurance that these requirements will not change and that compliance will not adversely affect our operations in the future. Furthermore, we cannot provide assurance that existing or future circumstances or developments with respect to contamination will not require us to make significant remediation or restoration expenditures.
|
●
|
A change in tax laws or regulations of any federal or state jurisdiction in which we operate could increase our tax burden and otherwise adversely affect our financial position, results of operations, cash flows and liquidity
.
We continue to assess the impact of various U.S. federal and state legislative proposals that could result in a material increase to our U.S. federal and state taxes. We cannot predict whether any specific legislation will be enacted or the terms of any such legislation. However, if such proposals were to be enacted, or if modifications were to be made to certain existing regulations, the consequences could have a materially 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
.
|
●
|
Strikes or work stoppages could have a negative impact on our operations and results.
We are party to collective bargaining agreements covering a portion of our craft workforce. 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.
|
●
|
We may be required to contribute cash to meet our unfunded pension obligations in certain multi-employer plans
.
Two of our wholly owned subsidiaries, Granite Construction Company and Granite Construction Northeast, Inc. (formerly Granite Halmar Construction Company, Inc.) participate in various 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 are required to make contributions to the plans in amounts established under collective bargaining agreements. Pension expense is recognized as contributions are made. Under the Employee Retirement Income Security Act, a contributor to a multi-employer plan is liable, upon termination or withdrawal from a plan, for its proportionate share of a plan’s unfunded vested liability. While we currently have no intention of withdrawing from a plan and unfunded pension obligations have not significantly affected our operations in the past, there can be no assurance that we will not be required to make material cash contributions to one or more of these plans to satisfy certain underfunded benefit obligations in the future
.
|
●
|
Unavailability of insurance coverage could have a negative effect on our operations and results.
We maintain insurance coverage as part of our overall risk management strategy and pursuant to requirements to maintain specific coverage that are contained in our financing agreements and in most of our construction contracts. Although we have been able to obtain reasonably priced insurance coverage to meet our requirements in the past, there is no assurance that we will be able to do so in the future, and our inability to obtain such coverage could have an adverse impact on our ability to procure new work, which could have a material adverse effect on our financial position, results of operations, cash flows and liquidity.
|
●
|
An inability to obtain bonding could have a negative impact on our operations and results.
As more fully described in “Insurance and Bonding” under “Item 1. Business,” we generally are required to provide surety bonds securing our performance under the majority of our public and private sector contracts. Our inability to obtain reasonably priced surety bonds in the future could significantly affect our ability to be awarded new contracts, which could have a material adverse effect on our financial position, results of operations, cash flows and liquidity.
|
●
|
Our joint venture contracts with project owners subject us to joint and several liability
.
As further described in “Joint Ventures; Off-Balance Sheet Arrangements” under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we participate in various construction joint venture partnerships in connection with complex construction projects. If our joint venture partner fails to perform under one of these contracts, we could be liable for completion of the entire contract. If the contract were unprofitable, this could have a material adverse effect on our financial position, results of operations, cash flows and liquidity.
|
●
|
Our contract backlog is subject to unexpected adjustments and cancellations and could be an uncertain indicator of our future earnings.
We cannot guarantee that the revenues projected in our contract backlog will be realized or, if realized, will be profitable. Projects reflected in our contract backlog may be affected by project cancellations, scope adjustments, time extensions or other changes. Such changes may adversely affect the revenue and profit we ultimately realize on these projects.
|
●
|
We use certain commodity products that are subject to significant price fluctuations.
Diesel fuel, liquid asphalt and other petroleum-based products are used to fuel and lubricate our equipment and fire our asphalt concrete processing plants. In addition, they constitute a significant part of the asphalt paving materials that are used in many of our construction projects and are sold to third parties. 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. We pre-purchase commodities, enter into supply agreements or enter into financial contracts to secure pricing. We have not been significantly adversely affected by price fluctuations in the past; however, there is no guarantee that we will not be in the future.
|
●
|
An inability to secure and permit aggregate reserves could negatively affect our future operations and results.
Tighter
regulations for the protection of the environment and the finite nature of property containing suitable aggregate reserves are making it increasingly challenging and costly to secure and permit aggregate reserves. Although we have thus far been able to secure and permit 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.
|
●
|
Granite Land Company is greatly affected by the strength of the real estate industry.
Our real estate investment and development activities are subject to numerous factors beyond our control including local real estate market conditions; substantial existing and potential competition; general national, regional and local economic conditions; fluctuations in interest rates and mortgage availability and changes in demographic conditions. If our outlook for a project’s forecasted profitability deteriorates, we may find it necessary to curtail our development activities and evaluate our real estate assets for possible impairment. Our evaluation includes a variety of estimates and assumptions and future changes in these estimates and assumptions could affect future impairment analyses. If our real estate assets are determined to be impaired, the impairment would result in a write-down of the asset in the year of the impairment. See Notes 7 and 11 of “Notes to the Consolidated Financial Statements” for additional information on impairment charges.
Our decision in October 2010 to orderly divest of our real estate investment business resulted in changes to the business plans of certain of our real estate affiliates and the recognition of impairment charges in the fourth quarter of 2010. The business plans of our real estate affiliates include estimates of our ability to obtain certain development rights, our ability to obtain financing, the future condition of the real estate and financial markets, and the timing of cash flows. A continued decline in the residential and/or commercial real estate markets may decrease, or lengthen the timing of, expected cash flow of certain development projects to the point that we would be required to recognize additional valuation impairments in the future
.
|
●
|
Our real estate investments are subject to mortgage financing and may require additional funding.
Granite Land Company’s real estate investments generally utilize short-term debt financing for their development activities. Such financing is subject to the terms of the applicable debt or credit agreement and generally is secured by mortgages on the applicable real property. GLC’s failure to comply with the covenants applicable to such financing or to pay principal, interest or other amounts when due thereunder would constitute an event of default under the applicable agreement and could have the effects described in the following risk factor relating to our debt and credit agreements. Due to the tightening of the credit markets, banks have required lower loan-to-value ratios often resulting in the need to pay a portion of the debt when short-term financing is renegotiated. If our real estate investment partners are unable to make their proportional share of a required repayment, GLC may elect to provide the additional funding which could materially affect our financial position, cash flows and liquidity. Also, if we determine we are the primary beneficiary, as defined by the applicable accounting guidance, we may be required to consolidate additional real estate investments in our financial statements.
|
●
|
Failure to remain in compliance with covenants under our debt and credit agreements, service our indebtedness, or fund our other liquidity needs could adversely impact our business
.
The current recession and credit crisis and related turmoil in the global financial system has had and is expected to continue to have an adverse impact on our business, financial position, results of operations, cash flows and liquidity. Our debt and credit agreements and related restrictive covenants are more fully described in Note 12 of “Notes to the Consolidated Financial Statements.”
Our failure to comply with any of these covenants, or to pay principal, interest or other amounts when due thereunder, would constitute an event of default under the applicable agreements. Under certain circumstances, the occurrence of an event of default under one of our debt or credit agreements (or the acceleration of the maturity of the indebtedness under one of our agreements) may constitute an event of default under one or more of our other debt or credit agreements. Default under our debt and credit agreements could result in (1) us no longer being entitled to borrow under the agreements, (2) termination of the agreements, (3) the requirement that any letters of credit under the agreements be cash collateralized, (4) acceleration of the maturity of outstanding indebtedness under the agreements and (5) foreclosure on any collateral securing the obligations under the agreements
.
If we are unable to service our debt obligations 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.
|
●
|
As a part of our growth strategy we may make future acquisitions and acquisitions involve many risks.
These risks include difficulties integrating the operations and personnel of the acquired companies, diversion of management’s attention from ongoing operations, potential difficulties and increased costs associated with completion of any assumed construction projects, insufficient revenues to offset increased expenses associated with acquisitions and the potential loss of key employees or customers of the acquired companies. Acquisitions may also cause us to increase our liabilities, record goodwill or other non-amortizable intangible assets that will be subject to subsequent impairment testing and potential impairment charges, as well as amortization expenses related to certain other intangible assets. Failure to manage and successfully integrate acquisitions could harm our financial position, results of operations, cash flows and liquidity.
|
Type
|
Permitted | Unpermitted |
Three-Year
Annual Average |
||||||||
Quarry Properties
|
Sand & Gravel
|
Hard Rock
|
Aggregate Reserves (tons)
|
Aggregate Reserves (tons)
|
Production Rate (tons)
|
Average Reserve Life
|
|||||
Owned quarry properties
|
36 | 7 |
423.4 million
|
504.8 million
|
7.4 million
|
47 years
|
|||||
Leased quarry properties
1
|
30 | 17 |
331.0 million
|
363.6 million
|
5.0 million
|
36 years
|
Permitted Reserves
for Each Product Type (tons)
|
Percentage of Permitted Reserves Owned and Leased
|
|||||||||||||||||||
State
|
Number of Properties
|
Sand & Gravel
|
Hard Rock
|
Owned
|
Leased
|
|||||||||||||||
California
|
51
|
225.5 million
|
264.2 million
|
53
|
%
|
47
|
%
|
|||||||||||||
Non-California
|
39
|
172.4 million
|
92.3 million
|
63
|
%
|
37
|
%
|
December 31,
|
2010
|
2009
|
||||||
Aggregate crushing plants
|
50 |
52
|
||||||
Asphalt concrete plants
|
66 |
69
|
||||||
Portland cement concrete batch plants
|
21 |
22
|
||||||
Asphalt rubber plants
|
5 |
5
|
||||||
Lime slurry plants
|
9
|
9
|
Land Area (acres)
|
Building Square Feet
|
|
Office and shop space (owned and leased)
|
1,700
|
1,100,000
|
Real estate held for development and sale and use
|
3,600
|
52,000
|
Market Price and Dividends of Common Stock
|
|
|
||||||||||||||
2010 Quarters Ended
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
||||||||||||
High
|
$ | 29.73 | $ | 25.09 | $ | 34.58 | $ | 36.00 | ||||||||
Low
|
$ | 22.51 | $ | 21.22 | $ | 23.53 | $ | 27.14 | ||||||||
Dividends per share |
$
|
0.13 | $ | 0.13 | $ | 0.13 |
$
|
0.13 | ||||||||
2009 Quarters Ended | December 31, |
September 30,
|
June 30,
|
March 31,
|
||||||||||||
High | $ | 34.58 | $ | 36.39 | $ | 45.94 | $ | 45.82 | ||||||||
Low | $ | 27.14 | $ | 29.41 | $ | 32.29 | $ | 30.14 | ||||||||
Dividends per share | $ | 0.13 | $ | 0.13 | $ | 0.13 | $ | 0.13 |
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 through October 31, 2010
|
2,166 | $ | 22.97 |
-
|
$
|
64,065,401
|
||||||||||
November 1 through November 30, 2010
|
2,405
|
$
|
25.71 |
-
|
$
|
64,065,401
|
||||||||||
December 1 through December 31, 2010
|
1,265
|
$
|
25.62 |
-
|
$
|
64,065,401
|
||||||||||
Total
|
5,836
|
$ | 24.67 |
-
|
|
2005
|
2006
|
2007
|
2008
|
2009
|
2010
|
||||||||||||||||||
Granite Construction Incorporated
|
$ | 100.00 | $ | 141.29 | $ | 102.47 | $ | 126.27 | $ | 98.21 | $ | 81.64 | ||||||||||||
S&P 500
|
100.00 | 115.80 | 122.16 | 76.96 | 97.33 | 111.99 | ||||||||||||||||||
Dow Jones U.S. Heavy Construction
|
100.00 | 124.74 | 236.96 | 106.34 | 121.55 | 156.07 |
Selected Consolidated Financial Data
|
|||||||||||||||||||||
Years Ended December 31,
|
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Operating Summary
|
(Dollars In Thousands, Except Per Share Data)
|
||||||||||||||||||||
Revenue
|
$ | 1,762,965 | $ | 1,963,479 | $ | 2,674,244 | $ | 2,737,914 | $ | 2,969,604 | |||||||||||
Gross profit
|
177,784 | 349,509 | 471,949 | 410,744 | 295,720 | ||||||||||||||||
As a percent of revenue
|
10.1 | % | 17.8 | % | 17.6 | % | 15.0 | % | 10.0 | % | |||||||||||
Selling, general and administrative expenses
|
191,593 | 228,046 | 260,761 | 246,202 | 199,481 | ||||||||||||||||
As a percent of revenue
|
10.9 | % | 11.6 | % | 9.8 | % | 9.0 | % | 6.7 | % | |||||||||||
Restructuring charges 1 | 109,279 | 9,453 | - | - | - | ||||||||||||||||
Goodwill impairment charge
2
|
- | - | - | - | 18,011 | ||||||||||||||||
Net (loss) income | (62,448 | ) | 100,201 | 165,738 | 132,924 | 74,339 | |||||||||||||||
Amount attributable to noncontrolling interests
3
|
3,465 | (26,701 | ) | (43,334 | ) | (20,859 | ) | 6,170 | |||||||||||||
Net (loss) income attributable to Granite
|
(58,983 | ) | 73,500 | 122,404 | 112,065 | 80,509 | |||||||||||||||
As a percent of revenue
|
-3.3 | % | 3.7 | % | 4.6 | % | 4.1 | % | 2.7 | % | |||||||||||
Net (loss) income per share attributable to
common
shareholders
4
:
|
|||||||||||||||||||||
Basic
|
$ | (1.56 | ) | $ | 1.91 | $ | 3.19 | $ | 2.69 | $ | 1.93 | ||||||||||
Diluted
|
$ | (1.56 | ) | $ | 1.90 | $ | 3.18 | $ | 2.68 | $ | 1.92 | ||||||||||
Weighted average shares of common stock:
|
|||||||||||||||||||||
Basic
|
37,820 | 37,566 | 37,606 | 40,866 | 40,874 | ||||||||||||||||
Diluted
|
37,820 | 37,683 | 37,709 | 40,909 | 40,920 | ||||||||||||||||
Dividends per common share
|
$ | 0.52 | $ | 0.52 | $ | 0.52 | $ | 0.43 | $ | 0.40 | |||||||||||
Consolidated Balance Sheet
|
|||||||||||||||||||||
Total assets
|
$ | 1,535,533 | $ | 1,709,575 | $ | 1,743,455 | $ | 1,786,418 | $ | 1,632,838 | |||||||||||
Cash, cash equivalents and marketable securities
|
395,728 | 458,341 | 520,402 | 485,348 | 394,878 | ||||||||||||||||
Working capital
|
475,079 | 500,605 | 475,942 | 397,568 | 319,762 | ||||||||||||||||
Current maturities of long-term debt
|
38,119 | 58,978 | 39,692 | 28,696 | 28,660 | ||||||||||||||||
Long-term debt
|
242,351 | 244,688 | 250,687 | 268,417 | 78,576 | ||||||||||||||||
Other long-term liabilities
|
47,996 | 48,998 | 43,604 | 46,441 | 58,419 | ||||||||||||||||
Granite shareholders’ equity
|
761,031 | 830,651 | 767,509 | 700,199 | 694,544 | ||||||||||||||||
Book value per share
|
19.64 | 21.50 | 20.06 | 17.75 | 16.60 | ||||||||||||||||
Common shares outstanding
|
38,746 | 38,635 | 38,267 | 39,451 | 41,834 | ||||||||||||||||
Contract backlog
|
$ | 1,899,170 | $ | 1,401,988 | $ | 1,699,396 | $ | 2,084,545 | $ | 2,256,587 |
●
|
the completeness and accuracy of the original bid;
|
●
|
costs associated with added scope changes;
|
●
|
extended overhead due to owner, weather and other delays;
|
●
|
subcontractor performance issues;
|
●
|
changes in productivity expectations;
|
●
|
site conditions that differ from those assumed in the original bid (to the extent contract remedies are unavailable);
|
●
|
the availability and skill level of workers in the geographic location of the project; and
|
●
|
a change in the availability and proximity of equipment and materials.
|
●
|
significant decreases in the market price of the asset
;
|
●
|
significant adverse changes in legal factors or the business climate
;
|
●
|
significant changes to the development or business plans of a project
;
|
●
|
accumulation of costs significantly in excess of the amount originally expected for the acquisition, development or construction of the asset
; and
|
●
|
current period cash flow or operating losses combined with a history of losses, or a forecast of continuing losses associated with the use of the asset.
|
Comparative Financial Summary
|
||||||||||
Years Ended December 31,
|
2010
|
2009
|
2008
|
|||||||
(in thousands)
|
||||||||||
Total revenue
|
$
|
1,762,965 |
$
|
1,963,479
|
$
|
2,674,244
|
||||
Gross profit
|
177,784 |
349,509
|
471,949
|
|||||||
Selling, general and administrative expenses | 191,593 | 228,046 | 260,761 | |||||||
Restructuring charges | 109,279 | 9,453 | - | |||||||
Net (loss) income
|
(62,448 | ) |
100,201
|
165,738
|
||||||
Amount attributable to noncontrolling interests
|
3,465
|
(26,701
|
) |
(43,334
|
) | |||||
Net (loss) income attributable to Granite
|
(58,983 | ) |
73,500
|
122,404
|
Total Revenue by Segment
|
|||||||||||||||||||
Years Ended December 31,
|
2010
|
2009
|
2008
|
||||||||||||||||
(dollars in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
Construction
|
$ | 943,245 | 53.5 | $ | 1,151,743 | 58.7 | $ | 1,484,861 | 55.6 | ||||||||||
Large Project Construction
|
|
584,406
|
33.1
|
|
603,517
|
30.7
|
|
827,255
|
30.9
|
||||||||||
Construction Materials
|
222,058 |
12.6
|
205,945
|
10.5
|
353,115
|
13.2
|
|||||||||||||
Real Estate
|
13,256 | 0.8 |
2,274
|
0.1
|
9,013
|
0.3
|
|||||||||||||
Total
|
$
|
1,762,965 |
100.0
|
$
|
1,963,479
|
100.0
|
$
|
2,674,244
|
100.0
|
Construction Revenue
|
|||||||||||||||||||
Years Ended December 31,
|
2010
|
2009
|
2008
|
||||||||||||||||
(dollars in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
California:
|
|||||||||||||||||||
Public sector
|
$
|
358,723 |
38.0
|
$
|
438,392
|
38.1
|
$
|
597,238
|
40.2
|
||||||||||
Private sector
|
32,139 | 3.4 |
35,311
|
3.1
|
98,810
|
6.7
|
|||||||||||||
Northwest:
|
|||||||||||||||||||
Public sector
|
|
421,397 | 44.7 |
|
521,447
|
45.3
|
|
486,613
|
32.8
|
||||||||||
Private sector
|
24,334 | 2.6 |
32,487
|
2.8
|
92,740
|
6.2
|
|||||||||||||
East:
|
|||||||||||||||||||
Public sector
|
|
103,398 |
11.0
|
|
117,991
|
10.2
|
|
183,575
|
12.4
|
||||||||||
Private sector
|
3,254 | 0.3 |
6,115
|
0.5
|
25,885
|
1.7
|
|||||||||||||
Total
|
$
|
943,245
|
100.0
|
$
|
1,151,743
|
100.0
|
$
|
1,484,861
|
100.0
|
Large Project Construction Revenue
1
|
|||||||||||||||||||
Years Ended December 31,
|
2010
|
2009
|
2008
|
||||||||||||||||
(dollars in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
California
|
$ | 49,408 | 8.5 | $ | 52,885 | 8.8 | $ | 100,133 | 12.1 | ||||||||||
Northwest
|
|
52,510
|
9.0
|
|
55,457
|
9.2
|
|
98,334
|
11.9
|
||||||||||
East
|
482,488
|
82.5
|
495,175
|
82.0
|
628,788
|
76.0
|
|||||||||||||
Total
|
$
|
584,406 |
100.0
|
$
|
603,517
|
100.0
|
$
|
827,255
|
100.0
|
Construction Materials Revenue
|
|||||||||||||||||||
Years Ended December 31,
|
2010
|
2009
|
2008
|
||||||||||||||||
(dollars in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
California
|
$ | 136,314 | 61.4 | $ | 127,649 | 62.0 | $ | 224,736 | 63.6 | ||||||||||
Northwest
|
|
64,966
|
29.2
|
|
63,171
|
30.7
|
|
96,340
|
27.3
|
||||||||||
East
|
20,778
|
9.4
|
15,125
|
7.3
|
32,039
|
9.1
|
|||||||||||||
Total
|
$
|
222,058 |
100.0
|
$
|
205,945
|
100.0
|
$
|
353,115
|
100.0
|
Total Contract Backlog by Segment
|
|||||||||||||
December 31,
|
2010
|
2009
|
|||||||||||
(dollars in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||
Construction
|
$ | 465,271 | 24.5 | $ | 359,359 | 25.6 | |||||||
Large Project Construction
|
|
1,433,899 | 75.5 |
|
1,042,629
|
74.4
|
|||||||
Total
|
$
|
1,899,170 |
100.0
|
$
|
1,401,988
|
100.0
|
Construction Contract Backlog
|
|||||||||||||
December 31,
|
2010
|
2009
|
|||||||||||
(dollars in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||
California:
|
|||||||||||||
Public sector
|
$
|
185,115 |
39.9
|
$
|
149,212
|
41.6
|
|||||||
Private sector
|
15,054 | 3.2 |
7,608
|
2.1
|
|||||||||
Northwest:
|
|||||||||||||
Public sector
|
|
181,996 |
39.1
|
|
125,439
|
34.9
|
|||||||
Private sector
|
13,941 | 3.0 |
4,562
|
1.3
|
|||||||||
East:
|
|||||||||||||
Public sector
|
|
68,508 | 14.7 |
|
70,562
|
19.6
|
|||||||
Private sector
|
657 |
0.1
|
1,976
|
0.5
|
|||||||||
Total
|
$
|
465,271 |
100.0
|
$
|
359,359
|
100.0
|
Large Project Construction Contract Backlog
1
|
|||||||||
December 31,
|
2010
|
2009
|
|||||||
(dollars in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
California
|
$ | 166,084 | 11.6 | $ | 50,755 | 4.9 | |||||||
Northwest
|
|
501,297 | 34.9 |
|
62,250
|
6.0
|
|||||||
East
|
766,518 | 53.5 |
929,624
|
89.1
|
|||||||||
Total
|
$
|
1,433,899 |
100.0
|
$
|
1,042,629
|
100.0
|
Years Ended December 31,
|
2010
|
2009
|
2008
|
|||||||||||
(dollars in thousands)
|
||||||||||||||
Construction
|
$
|
95,709 |
$
|
209,487
|
$
|
270,868
|
||||||||
Percent of segment revenue
|
10.1 |
|
%
|
18.2
|
|
% |
18.2
|
|
%
|
|||||
Large Project Construction
|
$
|
67,307 |
$
|
120,100
|
$
|
153,571
|
|
|||||||
Percent of segment revenue
|
11.5 |
|
% |
19.9
|
|
% |
18.6
|
|
% | |||||
Construction Materials
|
$
|
12,018
|
$
|
21,240
|
$
|
49,033
|
||||||||
Percent of segment revenue
|
5.4
|
|
%
|
10.3
|
|
% |
13.9
|
|
% | |||||
Real Estate
|
$ | 2,750 | $ | (1,318 | ) | $ | (1,523 | ) | ||||||
Percent of segment revenue
|
20.7 | % | -58.0 | % | -16.9 | % | ||||||||
Total gross profit
|
$
|
177,784
|
$
|
349,509
|
$
|
471,949
|
||||||||
Percent of total revenue
|
10.1 |
|
% |
17.8
|
|
% |
17.6
|
|
% |
Years Ended December 31,
|
2010
|
2009
|
2008
|
|||||||||||
(in thousands)
|
||||||||||||||
Construction
|
$
|
13,697 |
$
|
5,729
|
$
|
24,148
|
||||||||
Large Project Construction
|
142,965 |
63,033
|
1,674
|
|||||||||||
Total revenue from contracts with deferred profit
|
$
|
156,662 |
$
|
68,762
|
$
|
25,822
|
Years ended December 31,
|
2010
|
2009
|
2008
|
||||||||
(dollars in thousands)
|
|||||||||||
Selling | |||||||||||
Salaries and related expenses
|
$ | 40,332 | $ | 44,672 | $ | 40,497 | |||||
Other selling expenses
|
12,944 | 14,009 | 15,757 | ||||||||
Total selling
|
53,276 | 58,681 | 56,254 | ||||||||
General and administrative | |||||||||||
Salaries and related expenses
|
65,127 | 76,333 | 90,052 | ||||||||
Incentive compensation and discretionary profit sharing
|
9,534
|
24,253
|
30,991
|
||||||||
Restricted stock amortization
|
12,130 | 10,349 | 6,716 | ||||||||
Provision for (recovery of) doubtful accounts, net
|
368 | (4,404 | ) | 10,958 | |||||||
Other general and administrative expenses
|
51,158
|
62,834
|
65,790
|
||||||||
Total general and administrative
|
138,317 | 169,365 | 204,507 | ||||||||
Total selling, general and administrative
|
$
|
191,593
|
$
|
228,046
|
$
|
260,761
|
|||||
Percent of revenue
|
10.9
|
%
|
11.6
|
%
|
9.8
|
%
|
Years ended December 31,
|
2010
|
2009
|
2008
|
|||||||
(in thousands) | ||||||||||
Impairment charges associated with our real estate investments | $ | 86,341 | $ | - | $ | - | ||||
Severance costs
|
12,635 | 6,943 | - | |||||||
Impairment charges on assets held-for-sale or abandoned | 7,521 | 1,449 | - | |||||||
Lease termination costs, net of estimated sublease income
|
|
2,782
|
|
1,061
|
|
-
|
||||
Total
|
$
|
109,279
|
$
|
9,453
|
$
|
-
|
|
Workforce Reduction Severance
|
Facility Consolidation / Closure
|
Real Estate |
Total
|
|||||||||
Balance at December 31, 2009
|
$
|
1,910
|
$
|
1,061
|
$ | - |
$
|
2,971
|
|||||
Costs incurred and charged to expense
|
12,635
|
10,303
|
86,341 |
109,279
|
|||||||||
Cash paid
|
(13,644
|
)
|
(639
|
) | - |
|
(14,283
|
)
|
|||||
Impairment charges
|
-
|
(7,521
|
) | (86,341 |
)
|
(93,862
|
)
|
||||||
Balance at December 31, 2010
|
$
|
901
|
$
|
3,204
|
$ | - |
$
|
4,105
|
|
Workforce Reduction Severance
|
Facility Consolidation / Closure
|
Real Estate |
Total
|
|||||||||
Balance at December 31, 2008
|
$
|
-
|
$
|
-
|
$ | - |
$
|
-
|
|||||
Costs incurred and charged to expense
|
6,943
|
2,510
|
- |
9,453
|
|||||||||
Cash paid
|
(5,033
|
)
|
-
|
- |
(5,033
|
)
|
|||||||
Impairment charges
|
-
|
(1,449
|
)
|
- |
(1,449
|
)
|
|||||||
Balance at December 31, 2009
|
$
|
1,910
|
$
|
1,061
|
$ | - |
$
|
2,971
|
Years Ended December 31,
|
2010
|
2009
|
2008
|
|||||||
(in thousands)
|
||||||||||
Interest income
|
$
|
4 ,980 |
$
|
5,049
|
$
|
18,445
|
||||
Interest expense
|
(9,740
|
) |
(15,756
|
)
|
(16,001
|
)
|
||||
Equity in income (loss) of affiliates
|
756
|
7,696
|
(1,058
|
) | ||||||
Other income, net
|
6,968 |
12,683
|
15,353
|
|||||||
Total other income
|
$
|
2,964 |
$
|
9,672
|
$
|
16,739
|
Years Ended December 31,
|
2010
|
2009
|
2008
|
||||||||
(dollars in thousands)
|
|||||||||||
(Benefit from) provision for income taxes
|
$
|
(43,928 | ) |
$
|
38,650
|
$
|
67,692
|
||||
Effective tax rate
|
41.3 |
%
|
27.8
|
%
|
29.0
|
%
|
Years Ended December 31,
|
2010
|
2009
|
2008
|
|||||||
(in thousands)
|
||||||||||
Amount attributable to noncontrolling interests
|
$
|
3,465
|
$
|
(26,701
|
)
|
$
|
(43,334
|
) |
December 31,
|
2010
|
2009
|
|||||
(in thousands)
|
|||||||
Cash and cash equivalents excluding consolidated joint ventures
|
$
|
142,642 |
$
|
216,518
|
|||
Consolidated joint venture cash and cash equivalents
1
|
109,380 |
122,438
|
|||||
Total consolidated cash and cash equivalents
|
252,022 |
338,956
|
|||||
Short-term and long-term marketable securities 2 | 143,706 |
119,385
|
|||||
Total cash, cash equivalents and marketable securities
|
$ | 395,728 | $ |
458,341
|
Years Ended December 31,
|
2010
|
2009
|
2008
|
|||||||
(
in thousands
)
|
||||||||||
Net cash provided by (used in):
|
||||||||||
Operating activities
|
$
|
29,318 |
$
|
64,301
|
$ |
257,336
|
||||
Investing activities
|
(60,435
|
) |
(129,879
|
)
|
(18,257
|
) | ||||
Financing activities
|
(55,817
|
) |
(56,309
|
) |
(
130,670
|
) |
Payments Due by Period
|
||||||||||||||||
(in thousands)
|
Total
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
|||||||||||
Long-term debt - principal
|
$
|
280,470 |
$
|
38,119 |
$
|
33,473 |
$
|
44,252 |
$
|
164,626 | ||||||
Long-term debt - interest 1 |
105,761
|
15,383 |
27,135
|
25,514 | 37,729 | |||||||||||
Operating leases 2 | 37,330 | 6,681 | 7,860 | 5,150 | 17,639 | |||||||||||
Other purchase obligations
3
|
11,426 |
8,165
|
2,610 | 651 |
-
|
|||||||||||
Deferred compensation obligations
4
|
28,371
|
4,798 | 6,632 | 4,885 | 12,056 | |||||||||||
Total
|
$
|
463,358
|
$
|
73,146 |
$
|
77,710 |
$
|
80,452 |
$
|
232,050 |
●
|
approximately $5.7
million
associated with uncertain tax positions filed on our tax returns were excluded because we cannot estimate the timing of potential payments relative to such reserves
;
|
●
|
asset retirement obligations of $22.9 million associated with our owned and leased quarry properties were excluded because they are performance obligations (see Note
8
of “Notes to the Consolidated Financial Statements”)
; and
|
●
|
purchase commitments for purchases of materials and subcontract services in the ordinary course of business related to our current contract backlog were excluded as they are generally settled in less than one year.
|
December 31, | 2010 | |||
Principal payments due in nine equal installments
that began in 2005, 6.96%
|
$ |
25.0
|
|
|
Principal payments due in five equal installments
beginning in 2015, 6.11%
|
200.0 | |||
Total | $ | 225.0 |
2011
|
2012
|
2013
|
2014
|
2015
|
Thereafter
|
Total
|
|||||||||||||||||
Assets
|
|||||||||||||||||||||||
Cash, cash equivalents, held-to-maturity and trading investments
|
$
|
361,469
|
$
|
32,646
|
$
|
1,613
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
395,728
|
|||||||||
Weighted average interest rate
|
0.6
|
%
|
1.30
|
%
|
1.58
|
%
|
-
|
%
|
-
|
%
|
-
|
%
|
0.66 |
%
|
|||||||||
Liabilities
|
|||||||||||||||||||||||
Fixed rate debt
|
|||||||||||||||||||||||
Senior notes payable
|
$
|
8,333
|
$
|
8,333
|
$
|
8,334
|
$
|
-
|
$
|
40,000 |
$
|
160,000
|
$
|
225,000 | |||||||||
Weighted average interest rate
|
6.96
|
%
|
6.96
|
%
|
6.96
|
%
|
-
|
%
|
6.11
|
%
|
6.11
|
%
|
6.20 |
%
|
(dollars in thousands) |
Three Months Ended
December 31,
2010
|
Year Ended
December 31, 2010
|
|||||||||||||||||||
Name of Mine
|
Section 104
1
|
Section 104(d)
2
|
Proposed Assessments
3
|
Section 104
1
|
Section 104(d) 2 | Proposed Assessments 3 | |||||||||||||||
Arvin Pit | 1 | - | $ | 1.7 | 2 | - | $ | 3.3 | |||||||||||||
Axton Wash Plant | - | - | - | 1 | - | 0.2 | |||||||||||||||
Birchwood | - | - | - | 1 | - | 0.9 | |||||||||||||||
Bradshaw Pit
|
-
|
-
|
|
-
|
2 | - | 1.8 | ||||||||||||||
Capay Facilities | 3 | - | - | 16 | - | 2.1 | |||||||||||||||
Coalinga Pit | - | - | 1.2 | 1 | - | 3.2 | |||||||||||||||
Felton Quarry
|
-
|
-
|
0.1
|
3 | 1 | 21.7 | |||||||||||||||
Ford Gravel | 3 | 1 | 0.9 | 4 | 1 | 1.6 | |||||||||||||||
Fountain Springs
|
-
|
-
|
-
|
6 | - | 4.0 | |||||||||||||||
Freeman Quarry | 2 | - | 0.6 | 3 | - | 1.3 | |||||||||||||||
Gardner Pit | 2 | - | 0.8 | 2 | - | 0.8 | |||||||||||||||
Handley Ranch | - | - | 0.8 | 1 | - | 4.0 | |||||||||||||||
Highway 175 Aggregate
|
-
|
-
|
-
|
2 | - | 0.3 | |||||||||||||||
Indio Plant | - | - | - | 1 | - | 1.2 | |||||||||||||||
Lockwood Quarry
|
-
|
-
|
-
|
2 | 1 | 2.7 | |||||||||||||||
Pacific Heights Pit | - | - | - | 2 | - | 0.9 | |||||||||||||||
Alaska Portable Crusher #1
|
-
|
-
|
-
|
2 | - | - | |||||||||||||||
Sacramento Portable Crusher #1
|
-
|
-
|
-
|
1 | - | 0.5 | |||||||||||||||
Rosemary | - | - | - | 2 | - | 0.4 | |||||||||||||||
Santa Barbara Portable | - | - | - | 3 | - | 1.1 | |||||||||||||||
Smith River Pit | - | - | - | 1 | - | 0.3 | |||||||||||||||
Swan Pit | - | - | - | 3 | - | 1.2 | |||||||||||||||
Tangerine Pit | - | - | 0.1 | 3 | - | 1.1 | |||||||||||||||
Vernalis Plant | 5 | - | 1.5 | 5 | - | 1.5 | |||||||||||||||
Wade Sand Pit
|
-
|
-
|
-
|
1 | - | 0.2 | |||||||||||||||
Other | - | - | 0.3 | - | - | 1.7 | |||||||||||||||
Total
|
16
|
1
|
$
|
8.0
|
70 | 3 | $ | 58.0 |
Financial Statements
|
Page
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
Consolidated Balance Sheets at December 31, 2010 and 2009
|
F-2
|
Consolidated Statements of Operations for the Years Ended December 31, 2010, 2009 and 2008
|
F-3
|
Consolidated Statements of Shareholders’ Equity and Comprehensive Income (Loss) for the Years Ended December 31, 2010, 2009 and 2008
|
F-4
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008
|
F-5 to F-6
|
Notes to the Consolidated Financial Statements
|
F-7 to
F-47
|
Quarterly Financial Data |
F-48
|
Schedule
|
Page
|
Schedule II - Schedule of Valuation and Qualifying Accounts
|
S-1
|
GRANITE CONSTRUCTION INCORPORATED
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
(in thousands, except share and per share data)
|
||||||||
December 31,
|
2010
|
2009
|
||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
252,022 |
$
|
338,956
|
||||
Short-term marketable securities
|
109,447 |
42,448
|
||||||
Receivables, net
|
243,986 |
280,252
|
||||||
Costs and estimated earnings in excess of billings
|
10,519 |
10,619
|
||||||
Inventories
|
51,018 |
45,800
|
||||||
Real estate held for development and sale
|
75,716 |
139,449
|
||||||
Deferred income taxes
|
53,877 |
31,034
|
||||||
Equity in construction joint ventures
|
74,716 |
67,693
|
||||||
Other current assets
|
42,555 |
50,467
|
||||||
Total current assets
|
913,856 |
1,006,718
|
||||||
Property and equipment, net
|
473,607 |
520,778
|
||||||
Long-term marketable securities
|
34,259 |
76,937
|
||||||
Investments in affiliates
|
31,410 |
24,644
|
||||||
Other noncurrent assets
|
82,401 |
80,498
|
||||||
Total assets
|
$
|
1,535,533 |
$
|
1,709,575
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities
|
||||||||
Current maturities of long-term debt
|
$
|
8,359 |
$
|
15,017
|
||||
Current maturities of non-recourse debt
|
29,760 | 43,961 | ||||||
Accounts payable
|
129,700
|
131,251
|
||||||
Billings in excess of costs and estimated earnings
|
120,185
|
156,041
|
||||||
Accrued expenses and other current liabilities
|
150,773
|
159,843
|
||||||
Total current liabilities
|
438,777 |
506,113
|
||||||
Long-term debt
|
217,014
|
225,203
|
||||||
Long-term non-recourse debt
|
25,337 | 19,485 | ||||||
Other long-term liabilities
|
47,996 |
48,998
|
||||||
Deferred income taxes
|
10,774 |
27,220
|
||||||
Commitments and contingencies
|
||||||||
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 in 2010 and 2009; issued and outstanding 38,745,542 shares as of December 31, 2010 and 38,635,021 shares as of December 31, 2009
|
387
|
386
|
||||||
Additional paid-in capital
|
104,232 |
94,633
|
||||||
Retained earnings
|
656,412 |
735,632
|
||||||
Total Granite Construction Incorporated shareholders’ equity
|
761,031 |
830,651
|
||||||
Noncontrolling interests | 34,604 | 51,905 | ||||||
Total equity | 795,635 | 882,556 | ||||||
Total liabilities and equity
|
$
|
1,535,533 |
$
|
1,709,575
|
GRANITE CONSTRUCTION INCORPORATED
|
|||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||
(in thousands, except per share data)
|
|||||||||||||
Years Ended December 31,
|
2010
|
2009
|
2008
|
||||||||||
Revenue
|
|||||||||||||
Construction
|
$ | 943,245 | $ | 1,151,743 | $ | 1,484,861 | |||||||
Large project construction
|
584,406 | 603,517 | 827,255 | ||||||||||
Construction materials
|
222,058 | 205,945 | 353,115 | ||||||||||
Real estate
|
13,256 | 2,274 | 9,013 | ||||||||||
Total revenue
|
1,762,965 | 1,963,479 | 2,674,244 | ||||||||||
Cost of revenue
|
|||||||||||||
Construction
|
847,536 | 942,256 | 1,213,993 | ||||||||||
Large project construction
|
517,099 | 483,417 | 673,684 | ||||||||||
Construction materials
|
210,040 | 184,705 | 304,082 | ||||||||||
Real estate
|
10,506 | 3,592 | 10,536 | ||||||||||
Total cost of revenue
|
1,585,181 | 1,613,970 | 2,202,295 | ||||||||||
Gross profit
|
177,784 | 349,509 | 471,949 | ||||||||||
Selling, general and administrative expenses
|
191,593 | 228,046 | 260,761 | ||||||||||
Restructuring charges | 109,279 | 9,453 | - | ||||||||||
Gain on sales of property and equipment
|
13,748 | 17,169 | 5,503 | ||||||||||
Operating (loss) income
|
(109,340 | ) | 129,179 | 216,691 | |||||||||
Other income (expense)
|
|||||||||||||
Interest income
|
4,980 | 5,049 | 18,445 | ||||||||||
Interest expense
|
(9,740 | ) | (15,756 | ) | (16,001 | ) | |||||||
Equity in income (loss) of affiliates
|
756 | 7,696 | (1,058 | ) | |||||||||
Other income, net
|
6,968 | 12,683 | 15,353 | ||||||||||
Total other income
|
2,964 | 9,672 | 16,739 | ||||||||||
(Loss) income before (benefit from) provision for income taxes
|
(106,376 | ) | 138,851 | 233,430 | |||||||||
(Benefit from) provision for income taxes
|
(43,928 | ) | 38,650 | 67,692 | |||||||||
Net (loss) income
|
(62,448 | ) | 100,201 | 165,738 | |||||||||
Amount attributable to noncontrolling interests
|
3,465 | (26,701 | ) | (43,334 | ) | ||||||||
Net (loss) income attributable to Granite Construction Incorporated
|
$ | (58,983 | ) | $ | 73,500 | $ | 122,404 | ||||||
Net (loss) income per share attributable to common shareholders
(see Note
15
)
|
|||||||||||||
Basic
|
$ | (1.56 | ) | $ | 1.91 | $ | 3.19 | ||||||
Diluted
|
$ | (1.56 | ) | $ | 1.90 | $ | 3.18 | ||||||
Weighted average shares of common stock
|
|||||||||||||
Basic
|
37,820 | 37,566 | 37,606 | ||||||||||
Diluted
|
37,820 | 37,683 | 37,709 | ||||||||||
Dividends per common share
|
$ | 0.52 | $ | 0.52 | $ | 0.52 |
GRANITE CONSTRUCTION INCORPORATED
|
|||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||||||||||||
(in thousands, except share data)
|
|||||||||||||||||||||||||
|
Outstanding Shares
|
Common Stock
|
Additional Paid-in Capital
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Total Granite Shareholders
’
Equity
|
Noncontrolling Interests |
Total Equity
|
|||||||||||||||||
Balances at December 31, 2007
|
39,450,923
|
$
|
395
|
$
|
79,007
|
$
|
619,699
|
$
|
1,098
|
$
|
700,199
|
|
$ | 23,471 |
$
|
723,670
|
|||||||||
Comprehensive income (see Note
17
):
|
|||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
122,404
|
-
|
122,404
|
43,334 |
|
|||||||||||||||||
Changes in net unrealized losses on investments
|
-
|
-
|
-
|
-
|
(1,244
|
) |
(1,244
|
) | - |
|
|||||||||||||||
Total comprehensive income
|
164,494
|
||||||||||||||||||||||||
Stock issued for services, net of forfeitures
|
247,094
|
2
|
459
|
|
-
|
-
|
461
|
- |
461
|
||||||||||||||||
Amortized restricted stock
|
-
|
-
|
7,002
|
-
|
-
|
7,002
|
- |
7,002
|
|||||||||||||||||
Purchase of common stock
|
(1,440,869
|
)
|
(14
|
)
|
(5,561
|
)
|
(39,965
|
) |
-
|
(45,540
|
) | - |
(45,540
|
)
|
|||||||||||
Cash dividends on common stock
|
-
|
-
|
-
|
(19,901
|
)
|
-
|
(19,901
|
) | - |
(19,901
|
)
|
||||||||||||||
Net tax on stock-based compensation
|
-
|
-
|
851
|
-
|
-
|
851
|
- |
851
|
|||||||||||||||||
Non-qualified deferred compensation plan stock units
|
- | - | 3,237 | - | - | 3,237 | - | 3,237 | |||||||||||||||||
Transactions with noncontrolling interests, net
|
- | - | - | - | - | - | (30,032 | ) | (30,032 | ) | |||||||||||||||
Stock options exercised and other
|
9,643
|
-
|
40
|
-
|
-
|
40
|
- |
40
|
|||||||||||||||||
Balances at December 31, 2008
|
38,266,791
|
383
|
85,035
|
682,237
|
(146
|
) |
767,509
|
36,773 |
804,282
|
||||||||||||||||
Comprehensive income:
|
|||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
73,500
|
-
|
73,500
|
26,701 | ||||||||||||||||||
Changes in net unrealized gains on investments
|
-
|
-
|
-
|
-
|
146
|
|
146
|
- | |||||||||||||||||
Total comprehensive income
|
100,347
|
||||||||||||||||||||||||
Stock
issued
for services, net of forfeitures
|
437,594
|
4
|
1,900
|
|
-
|
-
|
1,904
|
- |
1,904
|
||||||||||||||||
Amortized restricted stock
|
-
|
-
|
10
,765
|
-
|
-
|
10,765
|
- |
10,765
|
|||||||||||||||||
Purchase of common stock
|
(93,763
|
)
|
(1
|
)
|
(3,430
|
)
|
-
|
|
-
|
(3,431
|
) | - |
(3,431
|
)
|
|||||||||||
Cash dividends on common stock
|
-
|
-
|
-
|
(20,105
|
)
|
-
|
(20,105
|
) | - |
(20,105
|
)
|
||||||||||||||
Net tax on stock-based compensation
|
-
|
-
|
632
|
-
|
-
|
632
|
- |
632
|
|||||||||||||||||
Transactions with noncontrolling
interests, net
|
- | - | - | - | - | - | (11,569 | ) | (11,569 | ) | |||||||||||||||
Stock options exercised and other
|
24,399
|
-
|
(269
|
) |
-
|
-
|
(269
|
) | - |
(
269
|
) | ||||||||||||||
Balances at December 31, 2009
|
38,635,021
|
|
386
|
|
94,633
|
|
735,632
|
|
-
|
|
830,651
|
51,905 |
|
882,556
|
|||||||||||
Comprehensive loss:
|
|||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(58,983 | ) |
-
|
(58,983 | ) | (3,465 | ) | |||||||||||||||
Total comprehensive loss
|
(62,448 | ) | |||||||||||||||||||||||
Stock issued for services, net of forfeitures
|
214,128 |
2
|
1,003
|
-
|
-
|
1,005
|
- |
1,005
|
|||||||||||||||||
Amortized restricted stock
|
-
|
-
|
13,040 |
-
|
-
|
13,040
|
- | 13,040 | |||||||||||||||||
Purchase of common stock
|
(132,093
|
)
|
(1
|
) |
(3,640
|
) |
-
|
-
|
(3,641
|
) | - |
(3,641
|
) | ||||||||||||
Cash dividends on common stock
|
-
|
-
|
-
|
(20,165
|
) |
-
|
(20,165
|
) | - |
(20,165
|
) | ||||||||||||||
Net tax on stock-based compensation
|
-
|
-
|
(815 | ) |
-
|
-
|
(815 | ) | - | (815 | ) | ||||||||||||||
Transactions with noncontrolling
interests, net
|
- | - | - | - | - | - | (13,836 | ) | (13,836 | ) | |||||||||||||||
Stock options exercised and other
|
28,486 |
-
|
11
|
(72
|
) |
-
|
(61
|
) | - |
(61
|
) | ||||||||||||||
Balances at December 31, 2010
|
38,745,542 |
$
|
387 |
$
|
104,232 |
$
|
656,412 |
$
|
-
|
$
|
761,031 | $ | 34,604 |
$
|
795,635 |
GRANITE CONSTRUCTION INCORPORATED
|
|||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||||||||||||||||
(in thousands)
|
|||||||||||||||||||||||
Years Ended December 31,
|
2010
|
2009
|
2008
|
||||||||
Operating activities
|
|||||||||||
Net (loss) income
|
$
|
(62,448 | ) |
$
|
100,201
|
$
|
165,738
|
||||
Adjustments to reconcile net (loss) income to net cash provided by operating
activities:
|
|||||||||||
Restructuring impairment charges
|
93,862 |
1,449
|
-
|
||||||||
Other impairment charges
|
821 | 4,110 | 4,500 | ||||||||
Inventory written down
|
2,846 |
3,097
|
12,848
|
||||||||
Depreciation, depletion and amortization
|
74,435 |
80,195
|
87,311
|
||||||||
Provision for (recovery of) doubtful accounts
|
368 |
(4,404
|
) |
10,958
|
|||||||
Gain on sales of property and equipment
|
(13,748
|
) |
(17,169
|
)
|
(5,503
|
)
|
|||||
Change in deferred income taxes
|
(39,289 | ) |
21,107
|
|
1,190
|
|
|||||
Stock-based compensation
|
13,040
|
10,765
|
7,463
|
||||||||
Loss (gain) from marketable securities
|
680 | (485 | ) | 10,939 | |||||||
Gain on company owned life insurance
|
(3,321 | ) | (2,551 | ) | (70 | ) | |||||
Equity in (income) loss of affiliates
|
(756 | ) |
(7,696
|
)
|
1,058
|
|
|||||
Acquisition of noncontrolling interest
|
-
|
-
|
(16,617
|
) | |||||||
Gain on sale of investment in affiliate
|
-
|
-
|
(14,416
|
) | |||||||
Gain on early extinguishment of debt
|
-
|
- |
(1,150
|
) | |||||||
Changes in assets and liabilities, net of the effects of acquisition and consolidations:
|
|||||||||||
Receivables
|
38,702 |
35,706
|
100,533
|
|
|||||||
Inventories
|
(8,214
|
) |
6,326
|
|
(10,812
|
)
|
|||||
Real estate held for development and sale
|
(14,743
|
) |
(17,263
|
) |
(15,225
|
)
|
|||||
Equity in construction joint ventures
|
(8,230
|
) |
(23,012
|
)
|
(10,341
|
)
|
|||||
Other assets, net
|
9,749 |
5,141
|
|
40,940
|
|
||||||
Accounts payable
|
(1,871
|
) |
(43,480
|
)
|
(38,956
|
) | |||||
Accrued expenses and other liabilities, net
|
(16,809
|
)
|
(19,089
|
)
|
(29,229
|
) | |||||
Billings in excess of costs and estimated earnings, net
|
(35,756
|
) |
(68,647
|
) |
(43,823
|
) | |||||
Net cash provided by operating activities
|
29,318 |
64,301
|
257,336
|
||||||||
Investing activities
|
|||||||||||
Purchases of marketable securities
|
(121,626
|
) |
(99,011
|
)
|
(71,630
|
)
|
|||||
Maturities of marketable securities
|
74,000 | 36,970 | 108,090 | ||||||||
Proceeds from sale of marketable securities
|
15,000 | 7,966 | 22,499 | ||||||||
Purchase of company owned life insurance
|
(8,195 | ) |
(8,000
|
) |
(8,000
|
) | |||||
Proceeds from company owned life insurance
|
2,078 | - | - | ||||||||
Release of funds for acquisition of noncontrolling interest
|
-
|
-
|
28,332
|
||||||||
Additions to property and equipment
|
(37,004
|
) |
(87,645
|
)
|
(94,135
|
)
|
|||||
Proceeds from sales of property and equipment
|
21,148 |
23,020
|
14,539
|
||||||||
Purchase of private preferred stock
|
(6,400 | ) | - | - | |||||||
Acquisition of businesses
|
-
|
-
|
|
(14,022
|
) | ||||||
Contributions to affiliates, net
|
(1,658
|
) |
(4,969
|
)
|
(4,158
|
)
|
|||||
Issuance of notes receivable
|
(1,313 | ) | (11,314 | ) | - | ||||||
Collection of notes receivable
|
3,126 | 13,104 | 728 | ||||||||
Other investing activities
|
409
|
-
|
(500
|
) | |||||||
Net cash used in investing activities
|
(60,435
|
) |
(129,879
|
)
|
(18,257
|
)
|
|||||
Financing activities
|
|||||||||||
Proceeds from long-term debt
|
1,918 |
10,750
|
3,725
|
||||||||
Long-term debt principal payments
|
(19,829
|
) |
(18,856
|
)
|
(17,092
|
)
|
|||||
Cash dividends paid
|
(20,150 | ) |
(20,057
|
) | (20,055 | ) | |||||
Purchase of common stock
|
(3,641
|
) |
(3,431
|
)
|
(45,540
|
)
|
|||||
Contributions from noncontrolling partners
|
7,321 | 420 | 5,026 | ||||||||
Distributions to noncontrolling partners
|
(21,498
|
) |
(26,019
|
)
|
(45,909
|
)
|
|||||
Acquisition of noncontrolling interest
|
-
|
-
|
(11,716
|
) | |||||||
Other financing activities, net
|
62
|
884
|
891
|
||||||||
Net cash used in financing activities
|
(55,817
|
) |
(56,309
|
) |
(130,670
|
)
|
|||||
(Decrease) increase in cash and cash equivalents
|
$
|
(86,934 | ) |
$
|
(121,887
|
) |
$
|
108,409
|
|||
Cash and cash equivalents at beginning of year
|
338,956 |
460,843
|
352,434
|
||||||||
Cash and cash equivalents at end of year
|
$
|
252,022 |
$
|
338,956
|
$
|
460,843
|
GRANITE CONSTRUCTION INCORPORATED
|
|||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
|
|||||||||||||||||||||||
(in thousands)
|
Years Ended December 31, | 2010 | 2009 | 2008 | |||||||
Supplementary Information
|
||||||||||
Cash paid during the period for:
|
||||||||||
Interest
|
$
|
15,715 |
$
|
22,783
|
$
|
12,700
|
||||
Income taxes
|
3,861 |
54,082
|
68,492
|
|||||||
Non-cash investing and financing activities:
|
||||||||||
Stock issued for services, net of forfeitures
|
$
|
5,735 |
$
|
18,405
|
$
|
6,961
|
||||
Restricted stock units issued
|
3,457 |
52
|
3,237
|
|||||||
Accrued cash
dividends
|
5,038
|
5,023
|
4,975
|
|||||||
Debt payments from sale of assets
|
6,064
|
-
|
2,652
|
|||||||
Settlement of debt from release of assets
|
-
|
-
|
5,250
|
●
|
determination of the VIE’s primary beneficiary using a qualitative approach based on:
|
i)
|
the power to direct the activities that most significantly impact the economic performance of the VIE; and
|
ii)
|
the obligation to absorb losses or right to receive benefits of the VIE that could be significant.
|
●
|
ongoing evaluation of the VIE’s primary beneficiary; and |
●
|
disclosures about a company’s involvement with the VIE including separate presentation on the consolidated balance sheets
of a consolidated VIE’s non-recourse debt.
|
●
|
the completeness and accuracy of the original bid;
|
●
|
costs associated with added scope changes;
|
●
|
extended overhead due to owner, weather and other delays;
|
●
|
subcontractor performance issues;
|
●
|
changes in productivity expectations;
|
●
|
site conditions that differ from those assumed in the original bid (to the extent contract remedies are unavailable);
|
●
|
the availability and skill level of workers in the geographic location of the project; and
|
●
|
a change in the availability and proximity of equipment and materials.
|
●
|
significant decreases in the market price of the asset
;
|
●
|
significant adverse changes in legal factors or the business climate
;
|
●
|
significant changes to the development or business plans of a project
;
|
●
|
accumulation of costs significantly in excess of the amount originally expected for the acquisition, development or construction of the asset
; and
|
●
|
current period cash flow or operating losses combined with a history of losses, or a forecast of continuing losses associated with the use of the asset.
|