What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-14 compared with 2024-02-23 · 487 added, 442 removed, 1184 unchanged (44% of the section changed)

10 unchanged sentences

Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024.

The scope of our assessment of the effectiveness of our internal control over financial reporting did not include LRC/MSG as we acquired them on November 30, 2023.

The tangible assets acquired from LRC/MSG were 5% of consolidated assets as of December 31, 2023 and revenues were less than 1% of consolidated revenue during the year ended December 31, 2023.

We excluded LRC/MSG from the scope of our assessment in accordance with the Securities and Exchange Commission’s guidance that allows a recently acquired business to be omitted from the scope of the assessment for one year from the date of its acquisition.

PricewaterhouseCoopers LLP, our independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2024.

4 unchanged sentences

Trading Arrangements

During the three months ended December 31, 2023, none of our directors or officers, as defined in Rule 16a-1(f) of the Exchange Act, adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

During the three months ended December 31, 2024, the following directors or officers, as defined in Rule 16a-1(f) of the Exchange Act, adopted , modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K ("Item 408").

On November 5, 2024 , Mr.

Larkin ’s Rule 10b5-1 trading arrangement, as such term is defined in Item 408, that he entered into on August 6, 2024 that provided for the sale of 30,000 shares automatically terminated pursuant to its terms.

Larkin is the Company’s President and Chief Executive Officer .

On November 13, 2024 , Mr.

Radich , the Company's Executive Vice President and Chief Operating Officer , adopted a Rule 10b5-1 trading arrangement, as such term is defined in Item 408.

The aggregate number of shares which may be sold under the plan is 10,000 .

The plan will terminate upon the earlier of February 6, 2026 or the completion of all the sales under the plan.

On November 19, 2024 , Mr.

Dowd , the Company’s Senior Vice President, Construction , adopted a Rule 10b5-1 trading arrangement, as such term is defined in Item 408.

The aggregate number of shares which may be sold under the plan is 6,075 .

The plan will terminate upon the earlier of December 31, 2025 or the completion of all the sales under the plan.

On December 12, 2024 , Mr.

Larkin adopted a Rule 10b5-1 trading arrangement, as such term is defined in Item 408.

The aggregate number of shares which may be sold under the plan is equal to 80% of the net shares Mr.

Larkin will receive upon vesting of his TSR award that will be paid out in March 2025 and 80% of the net shares Mr.

Larkin will receive upon vesting of his time-based restricted stock unit awards that will vest on March 14, 2025, including dividend equivalents.

The plan will terminate upon the earlier of December 31, 2025 or the completion of all the sales under the plan.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

27 unchanged sentences

Exhibit Description

2.1 * Purchase Agreement, dated February 2, 2022, by and among Layne Heavy Civil, Inc., Granite Construction International, Granite Construction Incorporated, Inland Pipe Rehabilitation LLC and 1000097155 Ontario Inc.

[Exhibit 2.1 to the Company’s Form 8-K filed on February 3, 2022]

Equity Purchase Agreement by and among Granite Construction Incorporated, Roberts Family Companies, Inc., Lehman-Roberts Company, Memphis Stone & Gravel Company, Patrick Nelson, as sellers’ representative, and the entities and individuals party thereto [Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on December 5, 2023]

1 unchanged sentence

Certificate of Amendment to the Certificate of Incorporation of Granite Construction Incorporated [Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 9, 2023]

3.3 * Amended and R estated Bylaws of Granite Construction Incorporated [Exhibit 3.1 to the Company’s Form 8-K filed on April 7, 2023 ]

4.1 * Indenture (including Form of Note) with respect to Granite Construction Incorporated’s 2.75% Convertible Senior Notes due 2024, dated November 1, 2019, by and between Granite Construction Incorporated and Wilmington Trust, National Association, as trustee [Exhibit 4.1 to the Company’s Form 8-K filed on November 1, 2019]

3.3 * Amended and Restated Bylaws of Granite Construction Incorporated [Exhibit 3.1 to the Company’s Form 8-K filed on April 7, 2023]

Indenture (including Form of Note) with respect to Granite Construction Incorporated’s 3.75% Convertible Senior Notes due 2028, dated May 11, 2023, by and between Granite Construction Incorporated and Wilmington Trust, National Association, as trustee [Exhibit 4.1 to the Company’s Form 8-K filed on May 11, 2023]

Indenture (including Form of Note) with respect to Granite Construction Incorporated’s 3.25% Convertible Senior Notes due 2030, dated June 11, 2024, by and between Granite Construction Incorporated and Wilmington Trust, National Association, as trustee [Exhibit 4.1 to the Company’s Form 8-K filed on June 12, 2024]

4.3 * Description of Common Stock [Exhibit 4.2 to the Company’s Form 10-K for the year ended December 31, 2019]

Key Management Deferred Compensation Plan II, as amended

Key Management Deferred Compensation Plan II, as amended [Exhibit 10.1 to the Company's Form 10-K filed on February 23, 20 2 4 ]

Form of Amended and Restated Director and Officer Indemnification Agreement [Exhibit 10.10 to the Company’s Form 10-K for the year ended December 31, 2002]

1 unchanged sentence

Form of Annual Incentive Plan Participation Agreement [Exhibit 10.2 to the Company’s Form 8-K filed on April 1, 2022]

Granite Construction Incorporated 2012 Equity Incentive Plan [Exhibit 10.1 to the Company’s Form 8-K filed on May 25, 2012]

10.5 * Fourth Amended and Restated Credit Agreement, dated June 2, 2022, by and among Granite Construction Incorporated, Granite Construction Company, GILC Incorporated, Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer, and the lenders and other parties thereto [Exhibit 10.1 to the Company’s Form 8-K filed on June 6, 2022]

4 unchanged sentences

10.8 * Fourth Amended and Restated Guaranty Agreement, dated June 2, 2022, by and among Granite Construction Incorporated, the guarantors party thereto and Bank of America, N.A., as Administrative Agent [Exhibit 10.2 to the Company’s Form 8-K filed on June 6, 2022]

10.10 * Form of Bond Hedge Confirmation [Exhibit 10.1 to the Company’s Form 8-K filed on November 1, 2019]

10.11 * Form of Warrant Confirmation [Exhibit 10.2 to the Company’s Form 8-K filed on November 1, 2019]

Form of 2023 Capped Call Confirmation [Exhibit 10.1 to the Company’s Form 8-K filed on May 11, 2023]

Executive Retention and Severance Plan III and Participation Agreement , as amended

Exhibit Description

10.10 * Form of 2024 Capped Call Confirmation [Exhibit 10.1 to the Company’s Form 8-K filed on June 12, 2024]

Executive Retention and Severance Plan III and Participation Agreement, as amended [Exhibit 10.13 to the Company's Form 10-K filed on February 23, 2024]

Long Term Incentive Plan, effective January 1, 2020 [Exhibit 10.2 to the Company's Form 8-K filed on March 30, 2020]

LTIP Award Agreement (2020 Long Term Incentive Plan) [Exhibit 10.3 to the Company's Form 8-K filed on March 30, 2020]

Form of Long Term Incentive Plan Award Agreement

Exhibit Description

Granite Construction Incorporated 2021 Equity Incentive Plan [Exhibit 10.2 to the Company’s Form 8-K filed on June 4, 2021]

Form of Non-Employee Director Restricted Stock Unit Agreement (2021 Equity Incentive Plan) [Exhibit 10.3 to the Company’s Form 8-K filed on June 4, 2021]

Form of Employee Service Award Restricted Stock Unit Agreement (2021 Equity Incentive Plan) [Exhibit 10.4 to the Company’s Form 8-K filed on June 4, 2021]

Form of Employee TSR Award Restricted Stock Unit Agreement (2021 Equity Incentive Plan) [Exhibit 10.5 to the Company’s Form 8-K filed on June 4, 2021]

Form of Employee TSR Award Restricted Stock Unit Agreement (2021 Equity Incentive Plan) [Exhibit 10.

5 to the Company’s Form 8-K filed on June 4, 2021]

Form of Executive Officer Acknowledgement & Agreement Pertaining to the Granite Construction Incorporated Clawback Policy [Exhibit 10.2 to the Company’s Form 8-K filed on October 13, 2023]

10.21 * Notice of Pendency and Proposed Settlement of Actions [Exhibit 99.1 to the Company's Form 8-K filed on June 9, 2022]

I nsider Trading Policy

Granite Construction Incorporated 2024 Equity Incentive Plan [Exhibit 10.2 to the Company’s Form 8-K filed on June 6, 2024]

Form of Non-Employee Director Restricted Stock Unit Agreement [Exhibit 10.3 to the Company’s Form 8-K filed on June 6, 2024]

Form of Employee Service Award Restricted Stock Unit Agreement [Exhibit 10.4 to the Company’s Form 8-K filed on June 6, 2024]

Form of Employee LTIP Award Restricted Stock Unit Agreement [Exhibit 10.5 to the Company’s Form 8-K filed on June 6, 2024]

Separation and Transition Agreement dated September 16, 2024 by and between the Company and Ms.

Curtis [Exhibit 10.1 to the Company's Form 8-K filed on September 16, 2024]

Insider Trading Policy [Exhibit 19 to the Company's Form 10- K filed on February 23, 2024]

21 † List of Subsidiaries of Granite Construction Incorporated

19 unchanged sentences

GRANITE CONSTRUCTION INCORPORATED

/s/ Elizabeth L.

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

(Principal Financial Officer and Principal Accounting Officer)

February 13, 2025

5 unchanged sentences

Larkin, President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ Elizabeth L.

Curtis February 22, 2024

Curtis, Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Woolsey February 13, 2025

Woolsey, Chief Accounting Officer (Principal Accounting Officer)

Woolsey, Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Caldera February 13, 2025

4 unchanged sentences

Darnell, Director

/s/ Patricia D.

Galloway February 22, 2024

Galloway, Director

/s/ Carlos M.

February 13, 2025

Hernandez, Director

Krusi February 13, 2025

13 unchanged sentences

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management’s report referred to above..

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

16 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Lehman-Roberts Company (“LRC”) and Memphis Stone and Gravel Company (“MSG”) from its assessment of internal control over financial reporting as of December 31, 2023, because it was acquired by the Company in a purchase business combination during 2023.

We have also excluded LRC and MSG from our audit of internal control over financial reporting.

LRC and MSG are wholly-owned subsidiaries whose total tangible assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 5% and less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition - Estimates of the Forecasted Revenue and Costs to Complete for Multi-Year Fixed Price Contracts in the Construction Segment

As described in Notes 1, 3, and 4 to the consolidated financial statements, the revenue for the construction segment for the year ended December 31, 2023 was $2,992.3 million, a portion of which related to multi-year fixed price contracts.

As described in Notes 1, 3, and 4 to the consolidated financial statements, the revenue for the construction segment for the year ended December 31, 2024 was $3.415 billion, a portion of which related to multi-year fixed price contracts.

Revenue in the Construction segment is ordinarily recognized over time as control is transferred to the customers by measuring the progress toward complete satisfaction of the performance obligation(s) using an input (i.e., cost to cost) method.

7 unchanged sentences

Under this method, revisions in estimates are accounted for in their entirety in the period of change.

and revisions in those estimates and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s estimates of forecasted revenue and costs to complete for multi-year fixed price contracts in the Construction segment, and revisions in those estimates.

The principal considerations for our determination that performing procedures relating to estimates of the forecasted revenue and costs to complete for multi-year fixed price contracts in the Construction segment is a critical audit matter are (i) the significant judgment by management when determining the estimates of forecasted revenue and costs to complete, and revisions in those estimates and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s estimates of forecasted revenue and costs to complete for multi-year fixed price contracts in the Construction segment, and revisions in those estimates.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

1 unchanged sentence

These procedures also included, among others, for a sample of multi-year fixed price contracts, testing management’s process for determining the estimates of forecasted revenue and costs to complete, which included (i) assessing management’s ability to reasonably estimate the forecasted revenue and costs to complete by evaluating management’s methodology and assessing the consistency of management’s approach over the life of the contract and (ii) evaluating the timely identification of circumstances that may warrant a modification to estimated forecasted revenue and costs to complete.

Acquisition of LRC/MSG – Valuation of the Customer Relationships Intangible Asset

As described in Note 2 to the consolidated financial statements, on November 30, 2023, the Company completed the acquisition of LRC/MSG for $278.0 million, subject to customary closing adjustments, plus an estimated amount related to tax make-whole agreements with the seller.

Of the acquired intangible assets, $83.9 million of customer relationships were recorded.

The fair value of customer relationships was estimated as of the acquisition date utilizing the multi-period excess earnings method.

This method discounts to present value the projected cash flows attributable to the customer relationships.

The significant estimates and assumptions used in determining the fair value included discount rates, revenue growth rates, projected EBITDA margins and customer revenue attrition rates.

The principal considerations for our determination that performing procedures relating to the valuation of the customer relationships intangible asset acquired in the acquisition of LRC/MSG is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer relationships intangible asset acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the discount rate, revenue growth rates, projected EBITDA margins, and customer revenue attrition rate;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to acquisition accounting, including controls over management’s valuation of the customer relationships intangible asset acquired.

These procedures also included, among others (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimate of the customer relationships intangible asset acquired;

(iii) evaluating the appropriateness of the multi-period excess earnings method;

(iv) testing the completeness and accuracy of the underlying data used in the multi-period excess earnings method;

and (v) evaluating the reasonableness of the significant assumptions used by management related to the discount rate, revenue growth rates, projected EBITDA margins, and customer revenue attrition rate.

Evaluating the reasonableness of management’s assumptions related to revenue growth rates and projected EBITDA margins involved considering (i) the current and past performance of the acquired business;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings method and (ii) the reasonableness of the discount rate and customer revenue attrition rate assumptions.

/s/ PricewaterhouseCoopers LLP

21 unchanged sentences

716,184 662,864

Long-term marketable securities — 26,569

Investments in affiliates 94,031 92,910

25 unchanged sentences

Additional paid-in capital 410,739 474,134

Accumulated other comprehensive income 881 788

Accumulated other comprehensive income (loss) ( 582 ) 881

Retained earnings 604,635 501,844

8 unchanged sentences

Years Ended December 31, 2024 2023 2022

Construction $ 2,992,254 $ 2,803,935 $ 3,076,190

Materials 516,884 497,321 425,675

Total revenue 3,509,138 3,301,256 3,501,865

Revenue $ 4,007,574 $ 3,509,138 $ 3,301,256

Cost of revenue 3,434,877 3,112,739 2,931,762

Construction 2,667,199 2,500,054 2,772,962

Materials 445,540 431,708 366,258

Total cost of revenue 3,112,739 2,931,762 3,139,220

Gross profit 572,697 396,399 369,494

28 unchanged sentences

Net income $ 140,443 $ 29,587 $ 78,857

Other comprehensive income, net of tax

Net unrealized gain (loss) on cash flow hedges, net of tax $ ( 184 ) $ 275 $ ( 108 )

Other comprehensive income (loss), net of tax

Net realized and unrealized gain (loss) on cash flow hedges, net of tax $ 93 $ ( 184 ) $ 275

reclassification for net gains included in interest expense, net of tax — — 3,042

1 unchanged sentence

Foreign currency translation adjustments, net ( 1,556 ) 277 830

Other comprehensive income, net of tax $ 93 $ 4,147 $ 1,676

Other comprehensive income (loss), net of tax $ ( 1,463 ) $ 93 $ 4,147

Comprehensive income, net of tax $ 138,980 $ 29,680 $ 83,004

Non-controlling interests in comprehensive income, net of tax 14,012 4,445 7,682

Non-controlling interests in comprehensive (income) loss, net of tax ( 14,097 ) 14,012 4,445

Comprehensive income attributable to Granite Construction Incorporated, net of tax $ 124,883 $ 43,692 $ 87,449

5 unchanged sentences

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 (see Note 1)

— — ( 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 — — — — 83,302 83,302 ( 4,445 ) 78,857

Other comprehensive income — — — 4,147 — 4,147 — 4,147

RSUs vested 235,234 2 ( 2 ) — — — — —

Repurchases of common stock (1) ( 2,376,020 ) ( 24 ) ( 70,877 ) — — ( 70,901 ) — ( 70,901 )

RSUs vested 262,748 3 ( 3 ) — — — — —

Dividends on common stock ($ 0.52 per share)

3 unchanged sentences

Balances at December 31, 2022 43,743,907 $ 437 $ 470,407 $ 788 $ 481,384 $ 953,016 $ 32,129 $ 985,145

Cumulative effect of newly adopted accounting standard (see Note 1) — — ( 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 — $ — $ — $ — $ 43,599 $ 43,599 $ ( 14,012 ) $ 29,587

4 unchanged sentences

— $ — $ 301 $ — $ ( 23,139 ) $ ( 22,838 ) $ — $ ( 22,838 )

Capped call transactions — $ — $ ( 39,641 ) $ — $ — $ ( 39,641 ) $ — $ ( 39,641 )

Redemption of warrants — $ — $ ( 13,201 ) $ — $ — $ ( 13,201 ) $ — $ ( 13,201 )

Common stock issued in debt extinguishment 1,390,500 $ 14 $ 49,321 $ — $ — $ 49,335 $ — $ 49,335

Exercise of bond hedge ( 1,390,516 ) $ ( 14 ) $ 14 $ — $ — $ — $ — $ —

Transactions with non-controlling interests, net — $ — $ — $ — $ — $ — $ 31,551 $ 31,551

6 unchanged sentences

Net income — — — — 126,346 126,346 14,097 140,443

Other comprehensive income — — — 93 — 93 — 93

Other comprehensive loss — — — ( 1,463 ) — ( 1,463 ) — ( 1,463 )

Repurchases of common stock (1) ( 676,842 ) ( 6 ) ( 50,120 ) — ( 505 ) ( 50,631 ) — ( 50,631 )

4 unchanged sentences

Redemption of warrants — — 466 — — 466 — 466

Common stock issued in debt extinguishment 1,390,500 14 49,321 — — 49,335 — 49,335

Common stock issued in debt redemption 11,665 0 (0) — — — — —

Exercise of bond hedge ( 260,883 ) ( 3 ) 3 — — — — —

Transactions with non-controlling interests, net — — — — — — 31,551 31,551

Transactions with non-controlling interests — — — — — — 372 372

Stock-based compensation expense and other 8,078 — 20,191 — — 20,191 — 20,191

Balances at December 31, 2024 43,424,646 $ 434 $ 410,739 $ ( 582 ) $ 604,635 $ 1,015,226 $ 64,137 $ 1,079,363

(1) Amounts represent shares withheld for employee taxes for RSUs vested under our equity incentive plans.

During the year ended December 31, 2023, we did not repurchase any shares under the Board-approved share repurchase program.

(1) During the year ended December 31, 2024, there were 152,042 shares withheld related to employee taxes for RSUs vested under our equity incentive plans and 524,800 shares repurchased under the Board approved share repurchase program.

The accompanying notes are an integral part of these consolidated financial statements.

8 unchanged sentences

Amortization related to long-term debt 4,501 2,390 2,366

Non-cash loss on debt extinguishment 51,052 — —

Loss on debt extinguishment 27,552 51,052 —

Gain on sales of property and equipment, net ( 8,764 ) ( 28,346 ) ( 12,617 )

19 unchanged sentences

Maturities of marketable securities 38,000 40,000 45,000

Proceeds from called marketable securities — 6 —

Purchases of property and equipment ( 136,405 ) ( 140,384 ) ( 121,612 )

Proceeds from sales of property and equipment 13,852 38,109 26,064

Proceeds from company-owned life insurance 1,545 — —

Proceeds from the sale of business (see Note 1)

Acquisition of businesses, net of cash acquired (see Note 2) ( 294,018 ) — —

Proceeds from the sale of business

Acquisitions of businesses, net of cash acquired (see Note 2) ( 121,178 ) ( 294,018 ) —

Cash paid for purchase price adjustments on business acquisition (see Note 2) ( 13,183 ) — —

Issuance of notes receivable — — ( 7,560 )

Collection of notes receivable — 5,198 630

Other investing activities

1,335 1,545 6

Net cash used in investing activities $ ( 228,556 ) $ ( 359,290 ) $ ( 11,000 )

Financing activities:

Proceeds from debt 305,000 50,000 —

Proceeds from issuance of convertible notes 373,750 373,750 —

Proceeds from long-term debt — 305,000 50,000

Debt principal repayments ( 310,498 ) ( 305,118 ) ( 125,164 )

1 unchanged sentence

Redemption of warrants ( 497 ) ( 13,201 ) —

Proceeds from issuance of 3.75 % Convertible Notes

Debt issuance costs ( 10,474 ) ( 10,865 ) —

9 unchanged sentences

417,663 293,991 413,655

Cash, cash equivalents and $ 0 , $ 0 and $ 1,512 in restricted cash at end of period

Cash, cash equivalents and no restricted cash at end of any period

$ 578,330 $ 417,663 $ 293,991

6 unchanged sentences

Other non-cash operating activities:

Performance guarantees $ ( 6,854 ) $ ( 17,409 ) $ ( 167 )

Deferred taxes related to capped call transactions $ 11,818 $ 13,394 $ —

3 unchanged sentences

Contributions from non-controlling partners $ 1,959 $ 2,475 $ 4,110

Accrued equipment purchases $ 152 $ 5,745 $ ( 4,714 )

The accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

Description of Business :

Granite Construction Incorporated is one of the largest diversified construction and construction materials companies in the United States, engaged in infrastructure projects including the construction of streets, roads, highways, mass transit facilities, airport infrastructure, bridges, dams, power-related facilities, utilities, tunnels, water well drilling and other infrastructure-related projects, site preparation, mining services and infrastructure services for commercial and industrial sites, railways, residential development, energy development, as well as construction management professional services.

Our operations have primary offices located in Alaska, Arizona, California, Canada, Colorado, Florida, Guam, Illinois, Nevada, Tennessee, Texas, Utah and Washington.

Granite Construction Incorporated is one of the largest diversified, vertically integrated civil contractors and construction materials producers in the United States, engaged in infrastructure projects including the construction of streets, roads, highways, mass transit facilities, airport infrastructure, bridges, dams, power-related facilities, utilities, tunnels, water well drilling and other infrastructure-related projects, site preparation, mining services and infrastructure services for commercial and industrial sites, railways, residential development, energy development, as well as construction management professional services.

We own and lease aggregate reserves and own processing plants that are vertically integrated into our construction operations and we also produce construction materials for sale to third parties.

Our operations have primary offices located in Alaska, Arizona, California, Canada, Colorado, Florida, Guam, Illinois, Mississippi, Nevada, Tennessee, Texas, Utah and Washington.

Unless otherwise indicated, the terms “we,” “us,” “our,” “Company” and “Granite” refer to Granite Construction Incorporated and its wholly-owned and consolidated subsidiaries.

In addition to reportable segments, we also review our business by operating groups.

In alphabetical order, our operating groups are as follows:

• California, which is comprised of vertically integrated businesses in home markets across the state;

• Central, which includes the vertically integrated Arizona region and regional civil construction businesses in Illinois, Florida and Texas.

The Central group also includes the Federal division which performs civil construction across the continental United States and Guam, and the Tunnel division;

• Mountain, which is comprised of vertically integrated regional businesses in Alaska, Washington, Oregon, Utah and Nevada.

The Mountain Group also includes national businesses in the Industrial & Energy division, which primarily focuses on commercial solar construction projects, Water Resources, which performs water well drilling and rehabilitation services and Mineral Services, which performs mineral exploration services for mining clients.

During the first quarter of 2022, we completed the sale of our trenchless and pipe rehabilitation services business (“Inliner”) to Inland Pipe Rehabilitation LLC (“IPR”) and 1000097155 Ontario Inc.

(“Ontario” and together with IPR, the “Purchasers”), investment affiliates of J.F.

Lehman & Company, for a purchase price of $ 159.7 million, subject to certain adjustments.

As a result of the sale and post-closing adjustments, we received cash proceeds of $ 140.6 million and recognized a gain of $ 1.8 million.

This gain is included in Other costs, net in the consolidated statements of operations for the year ended December 31, 2022.

On April 24, 2023, we completed the purchase of Coast Mountain Resources (2020) Ltd.

CMR is a construction aggregate producer based in British Columbia, Canada operating on Malahat First Nation land.

This acquisition did not have a material impact on our results of operations.

Basis of Presentation:

During the first quarter of 2024, we reorganized our operational structure to more closely align with our two reportable segments, Construction and Materials.

Previously, leaders within our three operating groups of California, Central and Mountain managed both Construction and Materials operations within each group.

This change will allow us to better leverage our expertise within each reportable segment with leadership having direct oversight of their respective segment operations.

As a result of the reorganization, we will no longer disclose financial information by operating group.

There were no material impacts to our consolidated financial statements and no changes to our reportable segments.

Acquisitions and Divestitures:

On August 9, 2024, we acquired Dickerson & Bowen, Inc.

D&B is an aggregates, asphalt, and highway construction company serving central and southern Mississippi.

See Note 2 for more information.

On November 30, 2023, we completed the acquisition of Lehman-Roberts Company and Memphis Stone & Gravel Company (collectively, "LRC/MSG").

The acquired businesses are longstanding asphalt paving and asphalt and aggregates producers and suppliers.

On November 30, 2023, we acquired Lehman-Roberts Company and Memphis Stone & Gravel Company (collectively, "LRC/MSG").

LRC/MSG operates strategically located asphalt plants and sand and gravel mines serving the greater Memphis area and northern Mississippi.

See Note 2 for more information.

On April 24, 2023, we acquired Coast Mountain Resources (2020) Ltd.

which changed its name to Granite Infrastructure Canada, Ltd.

("Granite Canada") on May 13, 2024.

Granite Canada is a construction aggregate producer based in British Columbia, Canada operating on Malahat First Nation land.

See Note 2 for more information.

On March 16, 2022, we sold our trenchless and pipe rehabilitation services business, Inliner, for a purchase price of $ 159.7 million, subject to certain adjustments.

As a result of the sale and post-closing adjustments, we received cash proceeds of $ 140.6 million and recognized a gain of $ 1.8 million.

This gain is included in Other costs, net in the consolidated statements of operations for the year ended December 31, 2022.

Principles of Consolidation :

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Although not applicable for any of the years presented, if we determine that the power to direct the significant activities is shared equally by two or more joint venture parties, then there is no primary beneficiary and no party consolidates the VIE.

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If we have determined we are not the primary beneficiary of a joint venture but do exercise significant influence, we account for our share of the operations of the unconsolidated construction joint ventures on a pro rata basis in revenue and cost of revenue in the consolidated statements of operations.

cost of revenue in the consolidated statements of operations.

We record the corresponding investment balance in equity in construction joint ventures in the consolidated balance sheets except when a project is in a loss position, the investment balance is recorded as a deficit in unconsolidated construction joint ventures and is included in accrued expenses and other current liabilities in the consolidated balance sheets.

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Subsequent to the inception of a contract in our Construction segment, the transaction price could change for various reasons, including executed or unapproved change orders, and unresolved contract modifications and/or affirmative claims.

Changes that are accounted for as an adjustment to existing performance obligations are allocated on the same basis at

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contract inception.

Changes that are accounted for as an adjustment to existing performance obligations are allocated on the same basis at contract inception.

Otherwise, changes are accounted for as separate performance obligation(s) and the separate transaction price is allocated as discussed above.

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Costs to obtain our contracts (“pre-bid costs”) that are not expected to be recovered from the customer are expensed as incurred and included in selling, general and administrative expenses in our consolidated statements of operations.

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Although unusual, pre-bid costs that are explicitly chargeable to the customer even if the contract is not obtained are included in accounts receivable in our consolidated balance sheets when we are notified that we are not the low bidder with a corresponding reduction to selling, general and administrative expenses in our consolidated statements of operations.

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Contract options and task orders are included in unearned revenue when exercised or issued, respectively.

As of December 31, 2023 and 2022, unearned revenue was $ 3.6 billion and $ 2.9 billion, respectively.

As of December 31, 2024 and 2023, unearned revenue was $ 3.6 billion.

Approximately $ 2.6 billion of the December 31, 2024 unearned revenue is expected to be recognized within the next twelve months and the remaining amount will be recognized thereafter.

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We do not enter into derivative instruments for speculative or trading purposes.

The derivative transactions related to the 2.75 % senior convertible notes due 2024 (the " 2.75 % Convertible Notes") and the Capped Call Transactions related to the 3.75 % convertible senior notes due 2028 (the " 3.75 % Convertible Notes") were

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recorded to equity in our consolidated balance sheets based on the cash proceeds and will not be remeasured as long as they continue to meet the conditions for equity classification.

The 2023 capped call transactions associated with the 3.75 % convertible senior notes due 2028 (the " 3.75 % Convertible Notes") and the 2024 capped call transactions associated with the 3.25 % convertible senior notes due 2030 (the " 3.25 % Convertible Notes") are indexed to our stock and meet the equity classification requirements per ASC Topic 815, Derivatives and Hedging .

These capped call transactions were recorded to equity in our consolidated balance sheets and are

not accounted for as a bifurcated derivative.

They will not be remeasured as long as they continue to meet the conditions for equity classification.

Fair Value of Financial Assets and Liabilities:

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Revenue recognized from contracts with Caltrans during the years ended December 31, 2024, 2023 and 2022 represented $ 567.6 million ( 14.2 % of total revenue), $ 458.2 million ( 13.1 % of total revenue), and $ 348.0 million ( 10.5 % of total revenue), respectively, which was primarily in the Construction segment.

Other than Caltrans, none of our customers, including both prime and subcontractor arrangements, had revenue that individually exceeded 10% of total revenue during the year ended December 31, 2023 and December 31, 2022.

During the year ended December 31, 2021, none of our customers had revenue that individually exceeded 10% of total revenue.

The majority of our receivables are from customers concentrated in the United States.

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We account for foreign currency exchange transactions and translation in accordance with ASC Topic 830, Foreign Currency Matters .

In the third quarter of 2023 we began the wind down of our international Minerals Services operations which operated in Mexico and Canada.

In the third quarter of 2023, we began the wind down of our international mineral services operations which operated in Mexico and Canada.

Our Materials Segment continues to have international operations in Canada.

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Foreign currency transactions are remeasured into the functional currency with gains and losses included in other income, net in the consolidated statements of operations.

The impact from

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foreign currency transactions was immaterial for 2023, 2022 and 2021.

Assets and liabilities in functional currency are translated into U.S.

The impact from foreign currency transactions was immaterial for 2024, 2023 and 2022.

Assets and liabilities in functional currency are

translated into U.S.

dollars at exchange rates prevailing at the balance sheet date.

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We account for our share of the operating results of the equity method investments in equity in income from affiliates, net in the consolidated statements of operations and as a single line item in the consolidated balance sheets as investments in affiliates.

Our investments in affiliates include foreign entities, real estate entities and an asphalt terminal entity.

Our investments in affiliates include foreign entities, real estate ventures and an asphalt terminal entity.

These investments are evaluated for impairment using the other-than-temporary impairment model, which requires an impairment charge to be recognized if our investment’s carrying amount exceeds its fair value, and the decline in fair value is deemed to be other than temporary.

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• 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.

In addition, events or changes in circumstances specifically related to our real estate entities, include:

In addition, events or changes in circumstances specifically related to our real estate ventures, include:

• significant decreases in the market price of the asset;

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Future undiscounted cash flows and fair value assessments for our foreign entities and for the asphalt terminal entity are estimated based on market conditions and the political climate.

Future undiscounted cash flows and fair value assessments for our real estate entities are estimated based on entitlement status, market conditions, cost of construction, debt load, development schedules, status of joint venture partners and other factors applicable to the specific project.

Future undiscounted cash flows and fair value assessments for our real estate ventures are estimated based on entitlement status, market conditions, cost of construction, debt load, development schedules, status of joint venture partners and other factors applicable to the specific project.

Fair value is estimated based on the expected future cash flows attributable to the asset or group of assets and on other assumptions that market participants would use in determining fair value, such as market discount rates, transaction prices for other comparable assets, and other market data.

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Property and equipment are stated at cost.

Depreciation for construction and other equipment is primarily provided using accelerated methods over lives ranging from three to ten years , and the straight-line method over lives from two to twenty years for the remaining depreciable assets.

Depreciation for construction and other equipment is calculated using accelerated methods over lives ranging from three to ten years , and the straight-line method over lives from two to twenty years for the remaining depreciable assets.

We believe that accelerated methods best approximate the service provided by the construction and other equipment.

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Costs incurred during the application development stage are capitalized.

These costs consist

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primarily of software, hardware and consulting fees, as well as salaries and related costs.

Amounts capitalized are reported as a component of office furniture and equipment within property and equipment in the consolidated balance sheets.

These costs consist primarily of software, hardware and consulting fees, as well as salaries and related costs.

Amounts capitalized are reported

as a component of office furniture and equipment within property and equipment in the consolidated balance sheets.

Capitalized software costs are depreciated using the straight-line method over the estimated useful life of the related software, which ranges from three to seven years .

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Long-lived Assets:

We review property and equipment and amortizable intangible assets for impairment at an asset group level whenever events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable.

We review property and equipment and identifiable intangible assets for impairment at an asset group level whenever events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable.

Recoverability of these asset groups is measured by comparison of their carrying amounts to the future undiscounted cash flows the asset groups are expected to generate.

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When an individual asset or group of assets is determined to no longer contribute to its vertically integrated construction and plant equipment asset group, it is assessed for impairment independently.

As of December 31, 2023, amortizable intangible assets, which primarily include customer relationships, trademarks/trade names and permits, are being amortized over remaining terms from one to thirty years .

All intangible assets are amortized on a straight-line basis.

We account for business combinations using the acquisition method, under which the purchase price of an acquired company is allocated to the tangible and intangible assets acquired and the liabilities assumed on the basis of their fair values at the date of acquisition.

Any excess of purchase price over the fair value of tangible and intangible assets acquired and liabilities assumed is allocated to goodwill.

The determination of fair values of assets acquired and liabilities assumed requires us to make estimates and use valuation techniques when a market value is not readily available.

As of December 31, 2023 , we had seven reporting units in which goodwill was recorded as follows:

• Central Group Construction

• Central Group Materials

• Mountain Group Construction

• Mountain Group Materials

• California Group Construction

• LRC/MSG Construction

• LRC/MSG Materials

As of December 31, 2024, identifiable intangible assets, which primarily include customer relationships, trademarks/trade names and permits, are being amortized over useful lives of one to thirty years .

All identifiable intangible assets are amortized on a straight-line basis.

During the first quarter of 2024, we reorganized our operational structure to more closely align with our two reportable segments, Construction and Materials.

We performed quantitative goodwill impairment tests on the affected reporting units immediately before and after the reorganization.

These reporting units previously aligned with our operating group structure, but have now been combined into two legacy reporting units, Construction and Materials.

For each of the affected reporting units, we calculated the estimated fair value consistent with the annual impairment assessment using the discounted cash flows and market multiple methods.

These tests indicated that the estimated fair values of the affected reporting units exceeded their carrying amounts.

The LRC/MSG reporting units were not impacted by the reorganization.

The newly acquired D&B business has been combined with LRC/MSG to form the Granite Southeast reporting units.

As of December 31, 2024 , we had four reporting units in which goodwill was recorded as follows:

• Legacy Construction

• Legacy Materials

• Granite Southeast Construction

• Granite Southeast Materials

We perform our goodwill impairment tests annually as of November 1 and more frequently when events and circumstances occur that indicate a possible impairment of goodwill.

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• the testing for recoverability of a significant asset group within the segment.

In the third quarter of 2023, in connection with our decision to wind down our international Mineral Services operations, we performed an interim goodwill impairment test on the Mountain Group Construction reporting unit, which resulted in a $ 4.5 million non-cash impairment charge.

This charge is included in Other costs, net in the consolidated statements of operations.

In accordance with ASC Topic 350, Intangibles – Goodwill and Other, we can elect to perform a qualitative assessment to test a reporting unit’s goodwill for impairment or perform a quantitative impairment test.

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If the fair value of the reporting unit is less than its carrying amount, goodwill is impaired and the excess of the reporting unit’s carrying amount over the fair value is recognized as a non-cash impairment charge.

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Judgments inherent in these methods include the determination of appropriate discount rates, the amount and timing of expected future cash flows, revenue and margin growth rates, and appropriate benchmark companies.

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To assess for reasonableness, we compare the estimated fair values of the reporting units to our current market capitalization.

For our 2024 annual goodwill impairment test, we elected to perform a qualitative assessment on our Legacy Construction and Legacy Materials reporting units and it was determined that no impairment indicators existed and it was more likely than not that the fair values were greater than the carrying amounts;

therefore, no quantitative goodwill impairment test was performed for these reporting units.

Factors we considered in our qualitative assessment were macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in management or key personnel, changes in strategy, changes in customers and changes in the composition or carrying amount of the reporting unit’s net assets.

We performed quantitative goodwill impairment tests on both of our Granite Southeast reporting units.

We calculated the estimated fair value using the discounted cash flows and market multiple methods.

These tests indicated that the estimated fair values of these reporting units exceeded their carrying amounts and we concluded that goodwill was not impaired.

For our 2023 annual goodwill impairment test, we elected to perform a qualitative assessment on each of our reporting units and we determined that it was more likely than not that the fair values were greater than the carrying amounts;

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In the third quarter of 2023, in connection with our decision to wind down our international mineral services operations, we performed an interim goodwill impairment test on the former Mountain Group Construction reporting unit, which resulted in a $ 4.5 million non-cash impairment charge.

This charge is included in Other costs, net in the consolidated statements of operations.

Right of use Assets and Lease Liabilities:

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Many of our construction contracts contain warranty provisions covering defects in equipment, materials, design or workmanship that generally run for less than two years after our customer accepts the contract.

Because of the nature of our projects, including contract owner inspections of the work both during construction and prior to acceptance, we have not experienced material warranty costs for these short-term warranties and, therefore, do not believe an accrual for these costs is necessary.

for these costs is necessary.

Certain construction contracts carry longer warranty periods, ranging from two to ten years , for which we have accrued an estimate of warranty cost.

The warranty liability is estimated based on our experience with the type of work and any known risks relative to the project and was not material as of December 31, 2023 and 2022.

Our warranty liability is estimated based on our experience with the type of work and any known risks relative to the project.

Total warranty liability was not material as of December 31, 2024 and 2023.

Accrued Insurance Costs:

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We accrue for probable losses, both reported and unreported, that are reasonably estimable using actuarial methods based on historic trends, modified, if necessary, by recent events.

The establishment of accruals for estimated

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losses associated with our insurance policies are based on actuarial studies that include known facts and interpretations of circumstances, including our experience with similar cases and historical trends involving claim payment patterns, pending levels of unpaid claims, claim severity, frequency patterns and changing regulatory and legal environments.

The establishment of accruals for estimated losses associated with our insurance policies are based on actuarial studies that include known facts and interpretations of circumstances, including our experience with similar cases and historical trends involving claim payment patterns, pending levels of unpaid claims, claim severity, frequency patterns and changing regulatory and legal environments.

Changes in our loss assumptions caused by changes in actual experience would affect our assessment of the ultimate liability and could have an effect on our operating results and financial position.

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Stock-based compensation is included in selling, general and administrative expenses and cost of revenue on our consolidated statements of operations.

Other costs, net in the consolidated statements of operations are expensed as they are incurred and relate to settlements of certain legal matters and investigations, investigation-related legal fees and net acquisition and divestiture costs.

In addition, these net costs included non-cash impairment charges associated with the wind down of our international Mineral Services operations in 2023, a gain on sale of a business in 2022 and personnel costs incurred in connection with our operating group reorganization during 2021 .

Other costs, net in the consolidated statements of operations are expensed as they are incurred and include legal fees for the defense of a former Company officer in his ongoing civil litigation with the Securities and Exchange Commission, reorganization costs, strategic acquisition and divestiture expenses and non-cash impairment charges.

In addition to the aforementioned costs, 2023 also included a litigation charge and 2022 included a gain on sale of a business .

Income Taxes :

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets and liabilities in the consolidated financial statements and their respective tax bases.

Temporary differences are the differences between the reported amounts of assets and liabilities in the

consolidated financial statements and their respective tax bases.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred tax assets will not be realized.

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Disproportionate income tax effects which are stranded in accumulated other comprehensive income will be released using the item-by-item approach.

We report a liability in accrued expenses and other current liabilities and in other long-term liabilities in the consolidated balance sheets for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax

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We recognize interest and penalties, if any, related to unrecognized tax benefits in interest expense and other income, net in the consolidated statements of operations.

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Diluted net income per share is computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period.

Dilutive potential common shares include common share equivalents under the equity incentive plans and common share equivalents issuable under our 3.75 % Convertible Notes and 2.75 % Convertible Notes using the if-converted method.

Dilutive potential common shares also include common share equivalents issuable under the terms of our warrants assuming the share price of our common stock was in excess of $ 53.44 , the exercise price of warrants.

See Note 14 for further discussion related to the 3.75 % Convertible Notes, 2.75 % Convertible Notes and warrants.

Dilutive potential common shares include common share equivalents under the equity incentive plans and common share equivalents issuable under our 3.25 % Convertible Notes, 3.75 % Convertible Notes and 2.75 % Convertible Notes using the if-converted method.

See Note 14 for further discussion of the convertible notes.

Convertible Notes :

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Upon adoption of this new accounting guidance, the 2.75 % Convertible Notes were accounted for entirely as a liability, and the issuance costs were accounted for wholly as debt issuance costs.

Recently Issued and Adopted Accounting Pronouncements:

Recently Issued Accounting Pronouncements:

We closely monitor all ASUs issued by the FASB and other authoritative guidance.

There are currently no recently issued accounting pronouncements that are expected to have a material impact on our financial statements.

In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60):

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This ASU is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025.

We plan to adopt this ASU in the first quarter of 2025, but do not expect the adoption to have a material impact on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures, which enhances the disclosures regarding an entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detailed information about a reportable segment’s expenses.

This ASU is effective retrospectively commencing with our annual report for the year ending December 31, 2024, and quarterly periods thereafter.

We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

We do not expect this ASU to have a material impact on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

On November 30, 2023 (“acquisition date”), we completed the acquisition of LRC/MSG for $ 278.0 million, subject to customary closing adjustments, plus an estimated amount related to tax make-whole agreements with the seller.

We purchased all of the outstanding equity interests in LRC/MSG and the purchase price was funded by our new $ 150.0 million senior secured term loan, as described further in Note 14, a draw of $ 100 million under our existing revolver and the remainder from cash on hand.

The acquired businesses are longstanding asphalt paving and asphalt and aggregates producers and suppliers.

LRC/MSG operates strategically located asphalt plants and sand and gravel mines serving the greater Memphis area and northern Mississippi.

The buyer of LRC/MSG, Granite Southeast, is a wholly-owned subsidiary of Granite Construction Incorporated.

LRC/MSG's results are reported in the Central operating group in both the Construction and Materials segments.

The Central operating group is most similar in geography, and LRC/MSG's 2023 operating results were not material.

LRC/MSG’s customers are in both the public and private sector.

We have accounted for this transaction in accordance with ASC Topic 805, Business Combinations (“ASC 805”).

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We have included LRC/MSG's operating results in our consolidated statements of operations since the acquisition date.

Revenue attributable to LRC/MSG for the year ended December 31, 2023 was $ 7.7 million and the loss before taxes for the year ended December 31, 2023 was $ 2.3 million.

In November 2024, the FASB issued ASU 2024-03 , Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which requires public companies to disclose additional information about certain expenses in the notes to financial statements, enhancing transparency and providing more detailed insights for investors and other stakeholders.

This ASU is effective commencing with our annual report for the year ending December 31, 2027, and quarterly periods thereafter.

We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04 , Induced Conversions of Convertible Debt Instruments .

The new guidance clarifies the assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt when changes are made to conversion features as part of an offer to settle the instrument.

The guidance is effective for fiscal years beginning after December 15, 2025, with early adoption permitted, and it can be adopted either on a prospective or retrospective basis.

We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements:

We adopted this ASU retrospectively for the year ended December 31, 2024.

See Note 21 for more information.

Dickerson & Bowen, Inc.

On August 9, 2024, we completed the acquisition of Dickerson & Bowen, Inc.

("D&B") for $ 125.5 million in cash, subject to customary closing adjustments.

D&B is an aggregates, asphalt and highway construction company serving central and southern Mississippi which expands our footprint in that region.

D&B’s customers are in both the public and private sectors.

We have accounted for this transaction in accordance with Accounting Standards Codification ("ASC") Topic 805, Business Combinations (“ASC 805”).

D&B's results have been included in the Construction and Materials segments since the acquisition date.

Revenue and gross profit attributable to D&B for the year ended December 31, 2024 were $ 37.8 million and $ 9.5 million, respectively.

Pro Forma Financial Information (Unaudited)

The unaudited pro forma financial information in the table below summarizes the combined results of operations of Granite and D&B as though the companies had been combined as of January 1, 2023.

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2023, nor does it intend to be a projection of future results.

Years Ended December 31, 2024 2023

(unaudited, in thousands, except per share amounts)

Revenue $ 4,062,791 $ 3,614,443

Net income attributable to Granite Construction Incorporated

$ 134,470 $ 41,119

Basic net income per share attributable to common shareholders $ 3.07 $ 0.94

Diluted net income per share attributable to common shareholders $ 2.56 $ 0.78

These amounts have been calculated after applying Granite’s accounting policies and adjusting the results of D&B to reflect the additional depreciation and amortization that would have been recorded assuming the fair value adjustments to property and equipment and intangible assets had been applied starting on January 1, 2023.

Acquisition and integration expenses related to D&B that were incurred during the year ended December 31, 2024 are reflected in the year ended December 31, 2023 due to the assumed timing of the transaction.

The statutory tax rate of 26% was used for both 2024 and 2023 for the pro forma adjustments.

During the year ended December 31, 2024, we incurred $ 2.5 million of acquisition and integration expenses included in Other costs, net associated with the D&B acquisition which were primarily related to professional services.

Preliminary Purchase Price Allocation

In accordance with ASC 805, the total purchase price and assumed liabilities were allocated to the net tangible and identifiable intangible assets based on their estimated fair values as of November 30, 2023, as presented in the table below.

These estimates are subject to revision, which may result in adjustments to the values presented below.

There are certain provisional estimates that are subject to finalization, one of which is related to tax make-whole agreements with the seller of approximately $ 22.0 million, which will be finalized upon the former owners of LRC/MSG paying their personal tax burden related to the sale of the businesses.

As we continue to integrate the acquired business, we may obtain additional information on the acquired tangible and identifiable intangible net assets which, if significant, may require revisions to preliminary valuation assumptions, estimates and resulting fair values.

In accordance with ASC 805, the preliminary purchase price was allocated to assets acquired and liabilities assumed based on their estimated fair values as of August 9, 2024.

These estimates are subject to revision, which may result in adjustments to the values disclosed below.

There are certain provisional estimates that are subject to finalization.

As we continue to integrate the acquired business, we may obtain additional information which may result in revisions to preliminary valuation assumptions, estimates and the resulting fair values presented herein.

We expect to finalize these amounts within 12 months from the acquisition date.

For the purpose of this allocation, the contractual purchase price has been adjusted to exclude cash acquired and include closing adjustments, resulting in a preliminary purchase price of $ 121.2 million.

The tangible and identifiable intangible assets acquired, net of liabilities assumed, were $ 25.4 million and $ 27.9 million, respectively.

This generated acquired goodwill of $ 67.9 million, none of which is tax deductible.

The most significant assets acquired were $ 38.1 million of property and equipment and a $ 18.2 million customer relationship intangible asset.

Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets.

Of the acquired goodwill, $ 47.2 million is in the Materials segment and $ 20.7 million is in the

Construction segment.

The factors that contributed to the recognition of goodwill from this acquisition include strengthening and expanding our vertically integrated southeast home market as well as expected synergies.

Identifiable Intangible Assets

The following table lists identifiable intangible assets from the D&B acquisition that are included in intangible assets in the consolidated balance sheets as of December 31, 2024 (in thousands):

Useful Lives (Years) Gross Value Accumulated Amortization Net Value

Customer relationships 20 $ 18,200 $ ( 379 ) $ 17,821

Backlog 1 600 ( 231 ) 369

Trademarks/trade name 10 7,500 ( 312 ) 7,188

Permits 10 1,600 ( 58 ) 1,542

Total intangible assets $ 27,900 $ ( 980 ) $ 26,920

The fair value of customer relationships was estimated as of the acquisition date utilizing the multi-period excess earnings method.

This method discounts to present value the projected cash flows attributable to the customer relationships.

The significant estimates and assumptions used in determining the fair value included discount rates, revenue growth rates, projected earnings before interest, taxes, depreciation and amortization ("EBITDA") margins and customer revenue attrition rates.

The amortization expense related to the acquired identifiable intangible assets for the year ended December 31, 2024 was included in cost of revenue and selling, general and administrative expenses in the consolidated statements of operations.

All of the acquired identifiable intangible assets will be amortized on a straight-line basis.

Amortization expense related to the acquired identifiable intangible asset balances at December 31, 2024 is expected to be recorded in the future as follows:

$ 2.2 million in 2025;

$ 1.8 million in each year from 2026 to 2029;

and $ 17.5 million thereafter.

On November 30, 2023, we completed the acquisition of LRC/MSG for $ 278.0 million, subject to customary closing adjustments, plus an estimated amount related to tax make-whole agreements with the seller.

We purchased all of the outstanding equity interests in LRC/MSG and the purchase price was funded by a new $ 150.0 million senior secured term loan, a draw of $ 100 million under our existing revolver and the remainder from cash on hand.

Both the senior secured term loan and the draw under the revolver were fully repaid during the first half of 2024.

The acquired businesses are longstanding asphalt paving and asphalt and aggregates producers and suppliers.

LRC/MSG operates strategically located asphalt plants and sand and gravel mines serving the greater Memphis area and northern Mississippi.

LRC/MSG's results have been included in the Construction and Materials segments since the acquisition date.

LRC/MSG’s customers are in both the public and private sectors.

Revenue attributable to LRC/MSG for the years ended December 31, 2024 and 2023 was $ 147.3 million and $ 7.7 million, respectively.

Gross profit (loss) attributable to LRC/MSG for the years ended December 31, 2024 and 2023 was a profit of $ 8.7 million and loss of $ 1.5 million, respectively.

Pro Forma Financial Information (Unaudited)

The unaudited pro forma financial information in the table below summarizes the combined results of operations of Granite and LRC/MSG as though the companies had been combined as of January 1, 2022.

The Granite Canada acquisition discussed below is not included in the pro forma financial information as the effects of the business would not have a material impact.

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2022, nor does it intend to be a projection of future results.

Years Ended December 31, 2023 2022

(unaudited, in thousands, except per share amounts)

Revenue $ 3,720,449 $ 3,485,186

Net income $ 55,025 $ 72,219

Basic net income per share attributable to common shareholders $ 1.25 $ 1.62

Diluted net income per share attributable to common shareholders $ 1.19 $ 1.49

These amounts have been calculated after applying Granite’s accounting policies and adjusting the results of LRC/MSG to reflect the additional depreciation and amortization that would have been recorded assuming the fair value adjustments to property and equipment and intangible assets had been applied starting on January 1, 2022.

Additionally, these amounts reflect adjustment for additional interest that would have been incurred as a result of incurring debt for the acquisition over the periods in the pro forma financial information.

Acquisition and integration expenses related to LRC/MSG that were incurred during the year ended December 31, 2023 are reflected in the year ended December 31, 2022 due to the assumed timing of the transaction.

The statutory tax rate of 26% was used for both 2023 and 2022 for the pro forma adjustments.

During the year ended December 31, 2023, we incurred $ 5.0 million of acquisition and integration expenses included in Other costs, net associated with the LRC/MSG and Granite Canada acquisitions which were primarily related to professional services.

Purchase Price Allocation

In accordance with ASC 805, the total purchase price and assumed liabilities were allocated to the net tangible and identifiable intangible assets based on their estimated fair values as of the acquisition date, as presented in the table below.

We recorded a $ 22.0 million provisional estimate related to tax make-whole agreements with the seller at the time of the acquisition.

In the second quarter of 2024, the former owners of LRC/MSG determined their personal tax burden related to the sale of the businesses which allowed us to finalize our tax make-whole obligation.

Our obligation was $ 7.1 million, which was paid in June 2024.

During 2024, we made measurement period adjustments to reflect facts and circumstances in existence as of the acquisition date.

These adjustments included a $ 4.6 million net increase from net working capital adjustments and a $ 2.2 million net decrease in the value of the net tangible and identifiable intangible assets acquired, offset by a $ 14.9 million decrease in the estimated obligation associated with the tax make-whole agreements noted above.

The impact of these adjustments was a decrease in goodwill of $ 8.1 million.

We paid $ 13.2 million during the 2024 associated with the acquisition of LRC/MSG, which includes $ 6.1 million for working capital adjustments and $ 7.1 million for the tax make-whole obligation.

We finalized the purchase price allocation during the third quarter of 2024.

The following table presents the final purchase price allocation:

(in thousands)

November 30, 2023

Cash and cash equivalents $ 12,798

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Goodwill 72,744

Estimated purchase price $ 303,778

In addition, on April 24, 2023, we completed the purchase of Coast Mountain Resources (2020) Ltd.

(“CMR”) for $ 26.6 million.

CMR is a construction aggregate producer based in British Columbia, Canada operating on Malahat First Nation land.

This acquisition did not have a material impact on our results of operations.

The tangible assets acquired and liabilities assumed were approximately $ 28.5 million and $ 7.1 million, respectively, resulting in acquired goodwill of $ 5.1 million.

The tangible assets balance consists primarily of equipment, vehicles and the right-to-mine which are reported in Property and equipment, net.

CMR results are reported in the Mountain operating group in the Materials segment.

Intangible assets

The following table lists amortized intangible assets from the LRC/MSG acquisition that are included in intangible assets in the consolidated balance sheets as of December 31, 2023 (in thousands):

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Purchase price $ 293,416

The primary factor that contributed to the recognition of goodwill from the acquisition of LRC/MSG was expansion of our vertically integrated home market strategy into the southeastern United States.

For the LRC/MSG acquisition, we recorded $ 72.7 million of goodwill which will be deductible for tax purposes.

$ 46.7 million and $ 26.0 million were allocated to our Construction and Materials segments, respectively.

Identifiable Intangible assets

The following table lists identifiable intangible assets from the LRC/MSG acquisition that are included in intangible assets in the consolidated balance sheets as of December 31, 2024 (in thousands):

Useful Lives (Years) Gross Value Accumulated Amortization Net Value

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The significant estimates and assumptions used in determining the fair value included discount rates, revenue growth rates, projected EBITDA margins and customer revenue attrition rates.

The net amortization expense related to the acquired amortized intangible assets for the year ended December 31, 2023 was included in cost of revenue and selling, general and administrative expenses in the consolidated statements of operations .

All of the acquired intangible assets will be amortized on a straight-line basis.

Amortization expense related to the acquired amortized intangible asset balances at December 31, 2023 is expected to be recorded in th e future as follows:

$ 13.3 million in 2024;

$ 6.1 million in 2025;

$ 6.1 million in 2026;

$ 6.1 million in 2027;

$ 6.1 million in 2028;

All of the acquired identifiable intangible assets will be amortized on a straight-line basis.

Amortization expense related to

the acquired identifiable intangible asset balances is expected to be recorded in the future as follows:

$ 6.2 million in each year from 2025 to 2029;

and $ 63.5 million thereafter.

Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets.

The factors that contributed to the recognition of goodwill from the acquisitions of LRC/MSG and CMR include strengthening and expanding our vertically integrated home markets.

For the LRC/MSG acquisition, we recorded $ 80.8 million of goodwill which is expected to be deductible for tax purposes.

$ 63.0 million and $ 17.8 million were allocated to our Construction and Materials segments, respectively.

For the CMR acquisition, we rec orded $ 5.1 million in goodwill that was allocated to our Materials segment and is not expected to be deductible for income tax purposes.

Pro Forma Financial Information

The unaudited pro forma financial information in the table below summarizes the combined results of operations of Granite and LRC/MSG as though the companies had been combined as of January 1, 2022.

The CMR acquisition is not included in the pro forma financial information as the effects of the business would not have a material impact.

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2022, nor does it intend to be a projection of future results.

Years Ended December 31, 2023 2022

(unaudited, in thousands, except per share amounts)

Revenue $ 3,720,449 $ 3,485,186

Net income $ 55,025 $ 72,219

Basic net income per share attributable to common shareholders $ 1.25 $ 1.62

Diluted net income per share attributable to common shareholders $ 1.19 $ 1.49

The statutory tax rate of 26% was used for both 2023 and 2022 for the pro forma adjustments.

During the year ended December 31, 2023, we incurred $ 5.0 million of acquisition and integration expenses associated with the LRC/MSG and CMR acquisitions which were primarily related to professional services.

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Coast Mountain Resources

On April 24, 2023, we acquired Coast Mountain Resources (2020) Ltd.

which changed its name to Granite Infrastructure Canada, Ltd.

("Granite Canada") on May 13, 2024.

Granite Canada is a construction aggregate producer based in British Columbia, Canada operating on Malahat First Nation land.

Granite Canada results are reported in the Materials segment.

This acquisition did not have a material impact on our financial statements.

The primary factor that contributed to the recognition of goodwill from the acquisition of Granite Canada was strengthening our existing vertically integrated home markets in the western United States.

For the Granite Canada acquisition, we recorded $ 5.1 million in goodwill that was allocated to our Materials segment and will not be tax deductible for income tax purposes.

Revisions in Estimates

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In our review of these changes for the years ended December 31, 2024, 2023 and 2022, we did not identify any material amounts that should have been recorded in a prior period.

The projects with increases from revisions in estimates, 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):

The projects with increases and decreases from revisions in estimates, 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):

Years Ended December 31, 2024 2023 2022

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Increase to net income per diluted share attributable to common shareholders $ 0.35 $ 0.07 $ 0.13

The increases during the year ended December 31, 2024 were due to changes in the estimated amount of probable recovery on outstanding claims, production at a higher rate than anticipated and changes in the estimated transaction price related to contract modifications resulting from revisions to project work plans, permitting and scheduling.

The increase during the year ended December 31, 2023 was due to decreases in estimated costs from mitigated risks.

The increases during the year ended December 31, 2022 were due to production at a higher rate than anticipated and a decrease in estimated cost from mitigated risks.

The increases during the year ended December 31, 2021 were due to production at a higher rate than anticipated and a decrease in estimated cost from mitigated risks as well as settlement of outstanding customer affirmative claims.

There were no amounts attributable to non-controlling interests during the year ended December 31, 2021.

Years Ended December 31, 2024 2023 2022

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Decrease to net income per diluted share attributable to common shareholders $ 0.63 $ 0.95 $ 1.00

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originally anticipated, increased labor and materials costs and disputed work being performed where there are ongoing legal claims.

The decreases during the year ended December 31, 2024 were due to additional costs related to changes in project duration, lower productivity than originally anticipated and increased labor and materials costs.

The decreases during the year ended December 31, 2023 were due to a change in the estimated amount of probable recovery on an outstanding claim, additional costs related to changes in project durations, lower productivity than originally anticipated, increased labor and materials costs and disputed work being performed where there are ongoing legal claims.

The decreases during the year ended December 31, 2022 were due to additional costs related to extended project duration, increased labor and materials costs, and disputed work being performed where there are ongoing legal claims.

The decreases during the year ended December 31, 2021, were primarily due to additional costs from acceleration of work coupled with lower productivity and higher costs than originally anticipated, unfavorable weather and extended project duration.

Disaggregation of Revenue

We disaggregate our revenue based on our reportable segments and operating groups as it is the format that is 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 (in thousands):

As discussed in Note 1, during the first quarter of 2024, we reorganized our operational structure to more closely align with our two reportable segments, Construction and Materials.

Previously, leaders within our three former operating groups of California, Central and Mountain managed both Construction and Materials operations within each group.

As a result of the reorganization, we will no longer disclose financial information by operating group and we have updated our presentation of disaggregated revenue.

The prior years' disaggregation of revenue amounts have been recast to conform with the current period presentation.

Revenue is disaggregated by reportable segment (see Note 21) and customer type, which we believe best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Customer Type

Customers in our Construction segment are predominantly in the public sector which includes certain federal agencies, state departments of transportation, local transit authorities, county and city public works departments and school districts.

Our private sector customers include, but are not limited to, developers, utilities and private owners of industrial, commercial and residential sites.

Customers of our Materials segment include internal usage by our own construction projects, as well as third-party customers.

Based on the nature of the Materials business, it is not meaningful to disaggregate revenue by customer type.

The following table presents our revenue disaggregated by reportable segment and by customer type for the Construction segment:

Years ended December 31,

2023 Construction Materials Total

California $ 1,029,410 $ 258,725 $ 1,288,135

Central 765,560 55,125 820,685

Mountain 1,197,284 203,034 1,400,318

Total $ 2,992,254 $ 516,884 $ 3,509,138

2022 Construction Materials Total

California $ 811,623 $ 273,314 $ 1,084,937

Central 851,779 46,531 898,310

Mountain 1,140,533 177,476 1,318,009

Total $ 2,803,935 $ 497,321 $ 3,301,256

2021 Construction Materials Total

California $ 822,448 $ 242,552 $ 1,065,000

Central 1,058,448 33,270 1,091,718

Mountain 1,195,294 149,853 1,345,147

Total $ 3,076,190 $ 425,675 $ 3,501,865

(in thousands) 2024 2023 2022

Construction segment revenue:

Public $ 2,531,379 $ 2,064,078 $ 1,891,338

Private 883,846 928,176 912,597

Total Construction segment revenue 3,415,225 2,992,254 2,803,935

Materials segment revenue 592,349 516,884 497,321

Total revenue $ 4,007,574 $ 3,509,138 $ 3,301,256

Unearned Revenue

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(in thousands) December 31, 2024 December 31, 2023

California $ 1,220,772 $ 945,971

Central 1,486,288 1,444,983

Mountain 889,616 486,524

Public $ 2,801,273 $ 2,892,255

Private 783,105 704,421

Total $ 3,584,378 $ 3,596,676

All unearned revenue is in the Construction segment.

Approximately $ 2.6 billion of the December 31, 2024 unearned revenue is expected to be recognized within the next twelve months and the remaining amount will be recognized thereafter.

Contract Assets and Liabilities

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As of December 31, 2024 and 2023, the aggregate claim recovery estimates included in contract asset and liability balances were approximately $ 46.6 million and $ 77.9 million, respectively.

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The components of the contract asset balances as of the respective dates were as follows:

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Total contract assets $ 328,353 $ 262,987

The increase in contract assets is primarily due to increasing costs in excess of billings and estimated earnings balances from unresolved disputed work related to certain ongoing projects.

As of December 31, 2023 and 2022, contract retention receivable from Brightline Trains Florida LLC represented 11.1 %, 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 increase in contract assets is primarily due to increasing costs in excess of billings and estimated earnings balances from unresolved disputed work related to certain ongoing projects and increased retention balances from ongoing projects.

As of December 31, 2024, no contract retention receivable individually exceeded 10% of total contract assets.

As of December 31, 2023, contract retention receivable from Brightline Trains Florida LLC represented 11.1 % of total contract assets and no other contract retention receivable individually exceeded 10% of total contract assets.

The majority of the contract retention balance is expected to be collected within one year.

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Included in other receivables at December 31, 2024 and 2023 were items such as estimated recovery from back charge claims, notes receivable, fuel tax refunds and income tax refunds.

Other receivables at both December 31, 2023 and 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, plus accrued interest at prime plus 3.0 % per annum.

Other receivables at both December 31, 2024 and 2023 also included $ 25.0 million of working capital contributions in the form of a loan to a partner in one of our unconsolidated joint ventures, plus accrued interest.

No receivable individually exceeded 10 % of total net receivables at any of these dates.

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Fair Value Measurement

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Accrued and other current liabilities:

Interest rate swap $ — $ 126 $ — $ 126

Commodity swaps — 153 — 153

Heating oil swaps $ — $ 531 $ — $ 531

Diesel collars — 177 — 177

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Money market funds $ 101,275 $ — $ — $ 101,275

Other current assets

Commodity swaps $ — $ 121 $ — $ 121

Total assets $ 101,275 $ — $ — $ 101,275

Accrued and other current liabilities:

Interest rate swap $ — $ 126 $ — $ 126

Heating oil swaps — 153 — 153

Diesel collars — 802 — 802

Total liabilities $ — $ 1,081 $ — $ 1,081

Interest Rate Swap

In connection with entering into Amendment No.

2 of the Fourth Amended and Restated Credit Agreement in November 2023, we entered into an interest rate swap designated as a cash flow hedge with an initial notional amount of $ 75.0 million and an effective date of December 2023 and a maturity date of June 2027.

In conjunction with the payoff of our term loan in June 2024, the interest rate swap was terminated resulting in an immaterial gain.

Commodity Derivatives

In 2023, we entered into collar contracts and commodity swaps to reduce our price exposure on diesel consumption and heating oil consumption, respectively.

In 2023 and 2024, we entered into collar contracts and commodity swaps to reduce our price exposure on diesel consumption and heating oil consumption, respectively.

The collars and swaps were not designated as hedges and will be treated as a mark-to-market derivative instruments through their maturity dates.

The financial statement impact of the collar contracts and commodity swaps for the year ended December 31, 2023 was immaterial .

In December 2022, we entered into a commodity swap designed as a cash flow hedge for crude oil with a notional amount of $ 7.0 million and a maturity date of October 31, 2023.

The financial statement impacts of this swap during the years ended December 31, 2023 and 2022 were immaterial .

In December, 2021, we entered into two commodity swaps designed as cash flow hedges for crude oil covering the period from April 2022 to October 2022 with a total notional amount of $ 8.1 million.

The financial statement impact during the year ended December 31, 2022 was a realized gain of $ 4.1 million and an immaterial unrealized gain.

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The financial statement impact of the collar contracts and commodity swaps was immaterial for the years ended December 31, 2024 and 2023.

In April 2024 and December 2022, we entered into commodity swaps designated as cash flow hedges to reduce our price exposure on crude oil with maturity dates of October 31, 2024 and October 31, 2023, respectively.

The financial statement impact of these swaps was immaterial during the years ended December 31, 2024, 2023 and 2022.

Other Assets and Liabilities

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Level 2 $ 373,750 $ 491,582 $ — $ —

Fourth Amended and Restated Credit Agreement - Term Loan (2) Level 3 $ 150,000 $ 153,585 $ — $ —

Fourth Amended and Restated Credit Agreement - Revolver (2) Level 3 $ 100,000 $ 102,317 $ 50,000 $ 49,536

2.75 % Convertible Notes (2)

Level 2 $ — $ — $ 31,338 $ 51,045

Credit Agreement - Term Loan (2) Level 3 $ — $ — $ 150,000 $ 153,585

Credit Agreement - Revolver (2) Level 3 $ — $ — $ 100,000 $ 102,317

(1) All marketable securities were classified as held-to-maturity and consisted of U.S.

Government and agency obligations as of December 31, 2024 and 2023.

(2) The fair values of our 2.75 % Convertible Notes and 3.75 % Convertible Notes are 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 definitions of, and more information about the 2.75 % Convertible Notes, 3.75 % Convertible Notes and Credit Agreement.

(2) The fair values of our our 3.25 % convertible senior notes due 2030 (the " 3.25 % Convertible Notes"), our 3.75 % convertible senior notes due 2028 (the " 3.75 % Convertible Notes") and our 2.75 % convertible senior notes due 2024 (the " 2.75 % Convertible Notes") are based on the median price of the notes in an active market.

The fair value of 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 our convertible notes and the Credit Agreement.

The carrying value of marketable securities approximates their fair value as determined by market quotes.

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See Note 11 for details of the asset retirement obligation balances.

We estimate our liability for performance guarantees for our unconsolidated construction joint ventures and line item joint ventures using estimated partner bond rates, which are Level 2 inputs, and include them in accrued expenses and other current liabilities (see Note 13) with a corresponding increase in equity in construction joint ventures in the consolidated balance sheets.

current liabilities (see Note 13) with a corresponding increase in equity in construction joint ventures in the consolidated balance sheets.

See Note 1 for further discussion of performance guarantees.

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We continually evaluate whether there are changes in the status of the VIEs or changes to the primary beneficiary designation of the VIE.

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assessments during the years ended December 31, 2023, 2022 and 2021, 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 the 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).

Based on our assessments during the years ended December 31, 2024, 2023 and 2022, 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 December 31, 2024, there was $ 100.6 million of remaining contract value on unconsolidated and line item construction joint venture contracts of which $ 35.6 million represented our share and the remaining $ 65.0 million represented our partners’ share.

We are not able to estimate amounts that may be required beyond the remaining cost of the work to be performed.

These costs could be offset by billings to the customer or by proceeds from our partners’ corporate and/or other guarantees.

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 consolidated balance sheets and Note 1 for additional discussion regarding performance guarantees.

Consolidated Construction Joint Ventures

At December 31, 2023, we were engaged in ten active CCJV projects with total contract values ranging from $ 47.7 million to $ 426.5 million for a combined total of $ 2.0 billion of which our share was $ 1.2 billion.

As of December 31, 2023, our share of revenue remaining to be recognized on these CCJVs was $ 345.5 million and ranged from $ 1.3 million to $ 133.1 million by project.

At December 31, 2024, we were engaged in nine active CCJV projects.

Our proportionate share of the equity in these joint ventures was between 50.0 % and 70.0 %.

During the years ended December 31, 2024, 2023 and 2022, total revenue from CCJVs was $ 349.5 million, $ 307.2 million and $ 437.1 million, respectively.

During the years ended December 31, 2023, 2022 and 2021, CCJVs used $ 38.1 million, $ 5.7 million and $ 4.1 million of operating cash flows, respectively.

During the years ended December 31, 2024, 2023 and 2022, CCJVs provided $ 69.8 million, and used $ 38.1 million and $ 5.7 million of operating cash flows, respectively.

As of December 31, 2024, our share of revenue remaining to be recognized on these CCJVs was $ 337.7 million and ranged from $ 1.9 million to $ 132.9 million by project.

Unconsolidated Construction Joint Ventures

As discussed in Note 1, where we have determined we are not the primary beneficiary of a joint venture but do exercise significant influence, we account for our share of the operations of unconsolidated construction joint ventures on a pro rata basis in revenue and cost of revenue in the consolidated statements of operations and in equity in construction joint ventures or accrued expenses and other current liabilities in the consolidated balance sheets.

As of December 31, 2023, we were engaged in seven active unconsolidated joint venture projects with total contract values ranging from $ 6.0 million to $ 3.7 billion for a combined total of $ 7.9 billion of which our share was $ 2.2 billion.

Our proportionate share of the equity in these unconsolidated joint ventures ranged from 23.3 % to 50.0 %.

As of December 31, 2024, we were engaged in five active unconsolidated construction joint venture projects.

Our proportionate share of the equity in these unconsolidated construction joint ventures ranged from 30.0 % to 50.0 %.

As of December 31, 2024, our share of the revenue remaining to be recognized on these unconsolidated construction joint ventures was $ 26.1 million and ranged from $ 0.4 million to $ 21.3 million by project.

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Equity in construction joint ventures (4) $ 137,277 $ 156,311

(1) Included in this balance and in accrued and other current liabilities on the consolidated balance sheets as of December 31, 2023 and 2022 was $ 57.8 million and $ 64.7 million, respectively, related to performance guarantees (see Note 13).

(1) Included in this balance and in accrued expenses and other current liabilities on the consolidated balance sheets as of December 31, 2024 and 2023 was $ 55.5 million and $ 57.8 million, respectively, related to performance guarantees (see Note 13).

(2) Included in this balance as of December 31, 2024 and 2023 was $ 66.9 million and $ 66.6 million, respectively, related to Granite’s share of estimated cost recovery of customer affirmative claims.

In addition, this balance included $ 1.7 million and $ 2.7 million related to Granite’s share of estimated recovery of back charge claims as of December 31, 2023 and 2022, respectively.

In addition, this balance included $ 1.7 million related to Granite’s share of estimated recovery of back charge claims as of December 31, 2024 and 2023.

(3) 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.

(4) Included in this balance and in accrued expenses and other current liabilities on the consolidated balance sheets was $ 14.9 million and $ 14.0 million as of December 31, 2023 and 2022, respectively, related to deficits in unconsolidated construction joint ventures which includes provisions for losses.

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(4) Included in this balance and in accrued expenses and other current liabilities on our consolidated balance sheets was $ 3.7 million and $ 14.9 million as of December 31, 2024 and 2023, respectively, related to deficits in unconsolidated construction joint ventures which includes provisions for losses.

Years Ended December 31, 2024 2023 2022

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Line Item Joint Ventures

As of December 31, 2023, we were engaged in four active line item joint venture construction projects with a total contract value of $ 334.9 million of which our portion was $ 212.0 million.

As of December 31, 2023, our share of revenue remaining to be recognized on these line item joint ventures was $ 37.4 million.

As of December 31, 2024, we were engaged in one active line item joint venture construction project with an immaterial total contract value.

During the years ended December 31, 2024, 2023 and 2022, our portion of revenue from line item joint ventures was $ 7.4 million, $ 5.3 million and $ 35.4 million, respectively.

Investments in Affiliates

Our investments in affiliates balance is related to our investments in unconsolidated non-construction entities that we account for using the equity method of accounting, including investments in foreign affiliates, real estate entities and an asphalt terminal entity.

The foreign affiliates in which we are invested are engaged in mineral drilling services and the manufacture and supply of drilling equipment, parts and supplies in Latin America.

The real estate entities were formed to accomplish specific real estate development projects in which our wholly owned subsidiary, Granite Land Company, participates with third-party partners.

The real estate ventures were formed to accomplish specific real estate development projects in which our wholly owned subsidiary, Granite Land Company, participates with third-party partners.

The asphalt terminal entity is a 50 % interest in a limited liability company which owns and operates an asphalt terminal and operates an emulsion plant in Nevada.

We have determined that the real estate entities are not consolidated because although they are VIEs, we are not the primary beneficiary.

We have determined that the real estate ventures are not consolidated because although they are VIEs, we are not the primary beneficiary.

We have determined that the foreign affiliates and the asphalt terminal entity are not consolidated because they are not VIEs and we do not hold the majority voting interest.

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Total investments in affiliates $ 94,031 $ 92,910

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The following table provides summarized balance sheet information for our affiliates accounted for under the equity method on a combined basis:

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(1) This balance is primarily related to local bank debt for equipment purchases, working capital in our foreign affiliates and debt associated with our real estate investments.

Of the $ 364.6 million in total assets as of December 31, 2023, we had investments in two real estate entities with total assets of $ 30.5 million and $ 25.8 million, our foreign affiliates had total assets of $ 265.0 million, and the asphalt terminal entity had total assets of $ 43.2 million.

As of December 31, 2023 and 2022, all of the equity method investments in real estate affiliates were in residential real estate in Texas.

As of December 31, 2023, our percent ownership in the real estate entities ranged from 10 % to 25 %.

Of the $ 335.7 million in total assets as of December 31, 2024, we had investments in two real estate ventures with total assets of $ 29.9 million and $ 5.3 million, our foreign affiliates had total assets of $ 258.3 million, and the asphalt terminal entity had total assets of $ 42.2 million.

As of December 31, 2024 and 2023, all of the equity method investments in real estate ventures were in residential real estate in Texas and California.

As of December 31, 2024, our percent ownership in the real estate ventures ranged from 10 % to 25 %.

We have direct and indirect investments in our foreign affiliates, and our percent ownership in foreign affiliates ranged from 25 % to 50 % as of December 31, 2024.

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As discussed in Note 1, we have asset retirement obligations, which are liabilities associated with our legally required obligations to reclaim owned and leased quarry property and related facilities.

As of December 31, 2023 and 2022, $ 5.8 million and $ 1.8 million, respectively, of our asset retirement obligations were included in accrued expenses and other

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current liabilities and $ 32.7 million and $ 27.4 million, respectively, were included in other long-term liabilities in the consolidated balance sheets.

As of December 31, 2024 and 2023, $ 6.6 million and $ 5.8 million, respectively, of our asset retirement obligations were included in accrued expenses and other current liabilities and $ 37.8 million and $ 32.7 million, respectively, were included in other long-term liabilities in the consolidated balance sheets.

Of the amount included in other long-term liabilities as of December 31, 2024, $ 5.9 million is expected to be settled in 2026, $ 8.2 million in 2027, $ 1.2 million in 2028, $ 3.4 million in 2029 and the remaining $ 19.1 million is expected to be settled thereafter.

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Total goodwill $ 214,465 $ 155,004

Amortized Intangible Assets

As of December 31, 2023 and 2022, net amortized intangible assets were $ 117.2 million and $ 9.1 million, respectively, net of accumulated amortization of $ 24.8 million and $ 24.1 million, respectively.

During 2024, total goodwill increased by approximately $ 67.9 million related to the acquisition of D&B.

This increase was partially offset by a decrease of $ 8.1 million in goodwill as a result of our finalization of the LRC/MSG acquisition purchase price allocation in the third quarter of 2024.

See Note 2 for additional information.

Identifiable Intangible Assets

As of December 31, 2024 and 2023, net identifiable intangible assets were $ 127.9 million and $ 117.2 million, respectively, net of accumulated amortization of $ 38.9 million and $ 24.8 million, respectively.

The intangible assets balances in the consolidated balance sheets as of December 31, 2024 and 2023 also included an immaterial amount of indefinite-lived intangible assets.

The increase in the 2023 amortized intangible assets balance was primarily related to the LRC/MSG acquisition (see Note 2) which contributed $ 110.7 million of amortized intangible assets.

The increase in the 2024 identifiable intangible assets balance was primarily related to the D&B acquisition (see Note 2) which contributed $ 27.9 million of identifiable intangible assets.

Of this, $ 18.2 million were customer relationship intangibles.

The net amortization expense related to amortized intangible assets for each of the years ended December 31, 2023, 2022 and 2021 was $ 2.3 million, $ 2.0 million and $ 10.1 million, respectively, and was primarily included in cost of revenue in the consolidated statements of operations.

Amortization expense based on the amortized intangible assets balance at December 31, 2023 is expected to be $ 14.3 million in 2024, $ 7.1 million in 2025, $ 7.1 million in 2026, $ 6.7 million in 2027, $ 6.5 million in 2028 and $ 75.4 million thereafter.

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The net amortization expense related to identifiable intangible assets for each of the years ended December 31, 2024, 2023 and 2022 was $ 14.1 million, $ 2.3 million and $ 2.0 million, respectively, and was primarily included in cost of revenue in the consolidated statements of operations.

Amortization expense based on the identifiable intangible assets balance at December 31, 2024 is expected to be $ 9.4 million in 2025, $ 9.0 million in 2026, $ 8.6 million in 2027, $ 8.4 million in 2028, $ 8.4 million in 2029 and $ 84.1 million thereafter.

Accrued Expenses and Other Current Liabilities

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Total $ 323,956 $ 337,740

Other includes dividends payable, warranty reserves, asset retirement obligations, remediation reserves, the LRC/MSG tax make-whole liability (see Note 2) and other miscellaneous accruals, none of which are greater than 5% of total current liabilities.

Other includes dividends payable, warranty reserves, asset retirement obligations, remediation reserves, taxes payable and other miscellaneous accruals, none of which are greater than 5% of total current liabilities.

At December 31, 2023, the "other" balance above included the estimated LRC/MSG tax make-whole liability (see Note 2) which was finalized and paid in June 2024.

Long-Term Debt

(in thousands) December 31, 2024 December 31, 2023

3.75 % Convertible Notes

$ 373,750 $ —

3.25% Convertible Notes due 2030 $ 373,750 $ —

3.75% Convertible Notes due 2028 373,750 373,750

2.75% Convertible Notes — 31,338

31,338 230,000

Credit Agreement - Term Loan — 150,000

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Total long-term debt $ 737,939 $ 614,781

The aggregate minimum principal maturities of long-term debt related to balances at December 31, 2023, excluding debt issuance costs, and including current maturities are as follows:

$ 40.3 million in 2024;

$ 8.6 million in 2025;

$ 14.3 million in 2026;

$ 227.5 million in 2027 and $ 373.8 million in 2028.

Credit Agreement

During the first half of 2022, we prepaid 100 % of our outstanding term loan and replaced the Third Amended and Restated Credit Agreement dated May 31, 2018 with the Fourth Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) maturing June 2, 2027.

The Credit Agreement consisted of a $ 350.0 million senior secured, five-year revolving credit facility (the “Revolver”), including an accordion feature allowing us to increase borrowings up to the greater of (a) $ 200.0 million and (b) 100 % of twelve-month trailing EBITDA, subject to lender approval.

The Credit Agreement included a $ 150.0 million sublimit for letters of credit ($ 75.0 million for financial letters of credit) and a $ 20.0 million sublimit for swingline loans.

In June 2022, we entered into the Credit Agreement which matures on June 2, 2027.

The Credit Agreement includes a $ 150.0 million sublimit for letters of credit ($ 75.0 million for financial letters of credit) and a $ 20.0 million sublimit for swingline loans.

In May 2023, we entered into Amendment No.

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2 to the Credit Agreement ("Amendment No.

2") which amended it to, among other things, provide for a $ 150 million senior secured term loan (the “Term Loan”), which was fully drawn on closing to fund the LRC/MSG acquisition.

Borrowings under the Term Loan bear interest at term Secured Overnight Financing Rate (“SOFR”) with an interest period of one, three or six months (at our option), or such other period that is twelve months or less and consented to by all lenders subject to a credit spread adjustment of 0.1 % for one-month and three-month daily simple SOFR and term SOFR and 0.25 % for six-month term SOFR, or a base rate (at our option), in each case, plus an applicable margin of between 1.25 % and 2.25 % for term SOFR loans and 0.25 % and 1.25 % for base rate loans, in each case, based on the our Consolidated Leverage Ratio (as defined in our Credit Agreement).

The Term Loan will mature on June 2, 2027 and will amortize 5 % per year payable in quarterly installments beginning in the first quarter of 2024.

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We may borrow on the Revolver, at our option, at either (a) the SOFR term rate plus a credit adjustment spread plus applicable margin ranging from 1.0 % to 2.0 %, or (b) a base rate plus an applicable margin ranging from 0.0 % to 1.0 %.

2") which amended the Credit Agreement to, among other things, provide for a $ 150.0 million senior secured term loan (the “Term Loan”), which was fully drawn on closing to fund the LRC/MSG acquisition.

The Term Loan was scheduled to mature on June 2, 2027 and amortize 5 % per year, payable in quarterly installments beginning in the first quarter of 2024.

The Term Loan was fully repaid with the net proceeds from our 3.25 % Convertible Notes in the second quarter of 2024.

We may borrow on the Revolver, at our option, at either (a) the Secured Overnight Financing Rate (“SOFR”) term rate plus a credit adjustment spread plus applicable margin ranging from 1.0 % to 2.0 %, or (b) a base rate plus an applicable margin ranging from zero to 1.0 %.

The applicable margin is based on our Consolidated Leverage Ratio (as defined in our Credit Agreement), calculated quarterly.

As of December 31, 2023, the total unused availability under the Revolver was $ 230.7 million, resulting from $ 19.3 million in issued and outstanding letters of credit and $ 100.0 million drawn under the Revolver.

The letters of credit had expiration dates between June 2024 and December 2027.

As of December 31, 2024, the total unused availability under the Credit Agreement was $ 333.7 million, resulting from $ 16.3 million in issued and outstanding letters of credit and no amount drawn under the Revolver.

The letters of credit had expiration dates between March 2025 and November 2025.

3.25% Convertible Notes

On June 11, 2024, we issued $ 373.8 million aggregate principal amount of our 3.25 % Convertible Notes.

The 3.25 % Convertible Notes bear interest at a rate of 3.25 % per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024.

The 3.25 % Convertible Notes mature on June 15, 2030, unless earlier converted, redeemed or repurchased.

Prior to the close of business on the business day immediately preceding December 15, 2029, the 3.25 % Convertible Notes will be convertible at the option of the holders only upon the occurrence of certain events and during certain periods.

Thereafter, the 3.25 % Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding their maturity date.

The 3.25 % Convertible Notes have an initial conversion rate of 12.8398 shares of our common stock per $1,000 principal amount of the 3.25 % Convertible Notes, which is equivalent to an initial conversion price of approximately $ 77.88 per share of our common stock, subject to adjustment if certain events occur.

Upon conversion, we will settle the principal amount of the 3.25 % Convertible Notes in cash, and any conversion premium in excess of the principal amount in cash, or a combination of cash and shares of common stock, at our election.

In addition, upon the occurrence of a “fundamental change” as defined in the indenture governing the 3.25 % Convertible Notes, holders may require us to repurchase for cash all or any portion of their 3.25 % Convertible Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the 3.25 % Convertible Notes to be repurchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

If certain corporate events that

constitute a “make-whole fundamental change” as set forth in the indenture governing the 3.25 % Convertible Notes occur prior to the maturity date of the 3.25 % Convertible Notes or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 3.25 % Convertible Notes in connection with such event or notice of redemption.

We will not be able to redeem the 3.25 % Convertible Notes prior to June 21, 2027.

On or after June 21, 2027, we will be able to redeem for cash all or any portion of the 3.25 % Convertible Notes, at our option, if the last reported sale price of Granite’s common stock is equal to or greater than 130 % of the conversion price for a specified period of time at a redemption price equal to 100 % of the principal amount of the 3.25 % Convertible Notes to be redeemed, plus accrued but unpaid interest to, but excluding, the redemption date.

The indenture governing the 3.25 % Convertible Notes contains customary events of default.

In the case of an event of default arising from certain events of bankruptcy, insolvency or reorganization, with respect to us or our significant subsidiaries, all outstanding 3.25 % Convertible Notes will become due and payable immediately without further action or notice.

If any other event of default occurs and is continuing, then the trustee or the holders of at least 25% in aggregate principal amount of the 3.25 % Convertible Notes then outstanding may declare the 3.25 % Convertible Notes due and payable immediately.

The net proceeds from the sale of the 3.25 % Convertible Notes were approximately $ 365.0 million, after deducting the initial purchasers’ discount.

We used approximately $ 46.0 million of the net proceeds from the 3.25 % Convertible Notes offering to pay the cost of entering into capped call transactions in connection with the 3.25 % Convertible Notes.

In addition, we paid approximately $ 57.6 million of the net proceeds from the 3.25 % Convertible Notes offering to repurchase approximately $ 30.2 million in aggregate principal amount of our 2.75 % Convertible Notes in separate and individually negotiated transactions entered into concurrently with the pricing of the offering;

repaid amounts outstanding under our Term Loan of $ 148.1 million;

repurchased $ 13.3 million of shares under our authorized share repurchase program;

with the remainder of the net proceeds available for general corporate purposes, which may include acquisitions.

2024 Capped Call Transactions

In June 2024, we entered into privately negotiated capped call transactions in connection with the offering of the 3.25 % Convertible Notes (the "2024 capped call transactions").

The 2024 capped call transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of the 3.25 % Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 3.25 % Convertible Notes, as the case may be.

If, however, the market price per share of our common stock, as measured under the terms of the 2024 capped call transactions, exceeds the cap price of $ 119.82 of the 2024 capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the 2024 capped call transactions.

3.75 % Convertible Notes

On May 11, 2023, we issued $ 373.8 million aggregate principal amount of our 3.75 % Convertible Notes.

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Thereafter, the 3.75 % Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

The initial conversion rate applicable to the 3.75 % Convertible Notes is 21.6807 shares of Granite common stock per $1,000 principal amount of the 3.75 % Convertible Notes, which is equivalent to an initial conversion price of approximately $ 46.12 per share of Granite common stock, subject to adjustment if certain events occur.

Upon conversion, we will pay or deliver, as the case may be, cash, shares of Granite common stock or a combination of cash and shares of Granite common stock, at our election.

The initial conversion rate applicable to the 3.75 % Convertible Notes is 21.6807 shares of our common stock per $1,000 principal amount of the 3.75 % Convertible Notes, which is equivalent to an initial conversion price of approximately $ 46.12 per share of our common stock, subject to adjustment if certain events occur.

Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

In addition, upon the occurrence of a “fundamental change” as defined in the indenture governing the 3.75 % Convertible Notes, holders may require us to repurchase for cash all or any portion of their 3.75 % Convertible Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the 3.75 % Convertible Notes to be repurchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

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We will not be able to redeem the 3.75 % Convertible Notes prior to May 20, 2026.

On or after May 20, 2026, we have the option to redeem for cash all or any portion of the 3.75 % Convertible Notes if the last reported sale price of our common stock is equal to or greater than 130 % of the conversion price for a specified period of time at a redemption price equal to 100 % of the principal amount of the 3.75 % Convertible Notes to be redeemed, plus any accrued but unpaid interest to, but excluding, the redemption date.

On or after May 20, 2026, we have the option to redeem for cash all or any portion of the 3.75 % Convertible Notes if the last reported sale price of our common

stock is equal to or greater than 130 % of the conversion price for a specified period of time at a redemption price equal to 100 % of the principal amount of the 3.75 % Convertible Notes to be redeemed, plus any accrued but unpaid interest to, but excluding, the redemption date.

The indenture governing the 3.75 % Convertible Notes contains customary events of default.

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In addition, we used approximately $ 198.8 million of the net proceeds and issued 1,390,500 shares of Granite common stock in exchange for approximately $ 198.7 million aggregate principal amount of our 2.75 % Convertible Notes concurrent with the offering in separate and individually negotiated transactions (the "Exchange Transaction").

In connection with the Exchange Transaction, we entered into partial unwind agreements (the “Unwind Agreements”) with certain financial institutions to unwind a portion of the convertible note hedge and warrant transactions entered into in connection with the offering of the 2.75 % Convertible Notes (the “Unwind Transactions”).

Pursuant to the Unwind Agreements, we received 1,390,516 shares of our common stock (and cash in lieu of any fractional shares) in respect of the unwind of the portion of the existing convertible note hedge transactions that correspond to the 2.75 % Convertible Notes that were exchanged in the Exchange Transaction described above and paid $ 13.2 million in cash in respect of the unwind of the portion of the existing warrant transactions that correspond to the 2.75 % Convertible Notes that were exchanged in the Exchange Transaction described above.

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The 2023 capped call transactions are expected generally to reduce the potential dilution to our common stock upon conversion of the 3.75 % Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 3.75 % Convertible Notes, as the case may be.

If, however, the market price

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per share of our common stock, as measured under the terms of the Capped Call Transactions, exceeds the cap price ($ 79.83 ) of the Capped Call Transactions, there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the Capped Call Transactions.

If, however, the market price per share of our common stock, as measured under the terms of the 2023 capped call transactions, exceeds the cap price of $ 79.83 of the 2023 capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the 2023 capped call transactions.

2.75 % Convertible Notes

The 2.75 % Convertible Notes were issued in November 2019 in an aggregate principal amount of $ 230.0 million, with an interest rate of 2.75 % and a maturity date of November 1, 2024, unless earlier converted, redeemed or repurchased.

The 2.75 % Convertible Notes are convertible at the option of the holders prior to the close of business on the business day before May 1, 2024 only during certain periods and upon the occurrence of certain events.

After May 1, 2024, the 2.75 % Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

The conversion rate applicable to the 2.75 % Convertible Notes is 31.7776 shares of Granite common stock per $1,000 principal amount of 2.75 % Convertible Notes, which is equivalent to a conversion price of approximately $ 31.47 per share of Granite common stock.

Upon conversion, we will pay or deliver, as the case may be, cash, shares of Granite common stock or a combination of cash and shares of Granite common stock, at our election.

In addition, upon the occurrence of a “make-whole fundamental change” as defined in the indenture governing the 2.75 % Convertible Notes prior to the maturity date of the 2.75 % Convertible Notes or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder that elects to convert its 2.75 % Convertible Notes in connection with such a make-whole fundamental change or notice of redemption.

We have the option to redeem for cash all or any portion of the 2.75 % Convertible Notes if the last reported sale price of our common stock is equal to or greater than 130 % of the conversion price for a specified period of time at a redemption price equal to 100 % of the principal amount of the 2.75 % Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Upon the occurrence of a “fundamental change” as defined in the indenture governing the 2.75 % Convertible Notes, holders may require us to repurchase for cash all or any portion of their 2.75 % Convertible Notes at a price equal to 100 % of the principal amount of the 2.75 % Convertible Notes to be repurchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The indenture governing the 2.75 % Convertible Notes contains customary events of default.

In the case of an event of default arising from certain events of bankruptcy, insolvency or reorganization, with respect to us or our significant subsidiaries, all outstanding 2.75 % Convertible Notes will become due and payable immediately without further action or notice.

If any other event of default occurs and is continuing, then the trustee or the holders of at least 25 % in aggregate principal amount of the 2.75 % Convertible Notes then outstanding may declare the notes due and payable immediately.

In June 2024, we called the 2.75 % Convertible Notes for redemption.

As of December 31, 2024, no 2.75 % Convertible Notes remained outstanding.

Real Estate Indebtedness

Our unconsolidated investments in real estate entities are subject to mortgage indebtedness.

This indebtedness is non-recourse to Granite but is recourse to the real estate entity.

The terms of this indebtedness are typically renegotiated to reflect the evolving nature of the real estate project as it progresses through acquisition, entitlement and development.

Modification of these terms may include changes in loan-to-value ratios requiring the real estate entity to repay portions of the debt.

Our unconsolidated investments in real estate ventures are subject to mortgage indebtedness.

This indebtedness is non-recourse to Granite but is recourse to the real estate venture.

The terms of this indebtedness are typically renegotiated to reflect the evolving nature of the real estate project as it progresses through acquisition, entitlement, development and leasing.

Modification of these terms may include changes in loan-to-value ratios requiring the real estate venture to repay portions of the debt.

The debt associated with our unconsolidated non-construction entities is disclosed in Note 10.

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Additionally, the 3.25 % Convertible Notes and 3.75 % Convertible Notes are governed by the terms and conditions of their respective indentures.

Our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 2.75 % Convertible Notes, our 3.75 % Convertible Notes or our Credit Agreement would constitute an event of default under the 2.75 % Convertible Notes indenture, the 3.75 % Convertible Note indenture or the Credit Agreement.

Our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 3.25 % Convertible Notes, our 3.75 % Convertible Notes or our Credit Agreement would constitute an event of default under the 3.25 % Convertible Notes indenture, the 3.75 % Convertible Notes indenture or the Credit Agreement.

A default under our Credit Agreement could result in (i) us no longer being entitled to borrow under such facility;

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(iv) acceleration of amounts owed under the Credit Agreement;

and/or (v) foreclosure on any collateral securing the obligations under such facility.

and/or (v) foreclosure on any collateral

securing the obligations under such facility.

A default under the 3.25 % Convertible Notes indenture or the 3.75 % Convertible Notes indenture could result in acceleration of the maturity of the notes.

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As of December 31, 2024, we were in compliance with all covenants contained in the Credit Agreement.

We are not aware of any non-compliance by any of our unconsolidated real estate entities with the covenants contained in their debt agreements.

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We are not aware of any non-compliance by any of our unconsolidated real estate ventures with the covenants contained in their debt agreements.

Debt Issuance Costs

During the year ended December 31, 2023, we capitalized $ 10.9 million in third party offering costs related to the issuance of the 3.75 % Convertible Notes and the Term Loan.

These debt issuance costs will be amortized over the expected life of the 3.75 % Convertible Notes and the Term Loan, respectively.

During the years ended December 31, 2024 and December 31, 2023, we capitalized $ 10.5 million and $ 10.9 million, respectively, in third party offering costs related to the issuance of the 3.25 % Convertible Notes, 3.75 % Convertible Notes and the Term Loan.

Capitalized issuance costs are amortized over the life of the related debt.

During the years ended December 31, 2024, 2023 and 2022, we recorded $ 3.9 million, $ 3.5 million and $ 2.5 million, respectively, of amortization related to debt issuance costs.

The year ended December 31, 2023 includes $ 1.7 million of accelerated amortization of debt issuance costs associated with the 2.75 % Convertible Notes that were repaid and are included in the loss on debt extinguishment.

The years ended December 31, 2024 and 2023 included an immaterial amount and $ 1.7 million, respectively, of accelerated amortization of debt issuance costs associated with the 2.75 % Convertible Notes that were repaid and are included in the loss on debt extinguishment.

We have leases for office and shop space, as well as for equipment primarily utilized in our construction projects.

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Employee Benefit Plans

Profit Sharing and 401(k) Plan:

The Profit Sharing and 401(k) Plan (the “401(k) Plan”) is a defined contribution plan covering all employees except employees covered by collective bargaining agreements and certain employees of our CCJVs.

Granite Construction Profit Sharing and 401(k) Plan:

The Granite Construction Profit Sharing and 401(k) Plan (the “401(k) Plan”) is a defined contribution plan covering all employees except employees covered by collective bargaining agreements and certain employees of our CCJVs, LRC/MSG and D&B.

Our 401(k) matching contributions can be up to 6 % of an employee’s gross pay at the discretion of the Board of Directors.

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We made no profit sharing contributions during the years ended December 31, 2024, 2023 and 2022.

Lehman-Roberts/Memphis Stone & Gravel 401(k) Retirement Plan:

The Lehman-Roberts Company sponsors a defined contribution plan for the benefit of its employees.

Matching contributions to this plan were immaterial for the year ended December 31, 2024, as well as the period between our acquisition of LRC/MSG (see Note 2) and December 31, 2023.

This plan also covers the employees of D&B.

Non-Qualified Deferred Compensation Plan :

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Our NQDC Plan obligations are funded through a Rabbi Trust which was fully funded as of December 31, 2024.

The assets held by the Rabbi Trust at

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December 31, 2023 and 2022 are substantially in the form of Company-owned life insurance and are included in other noncurrent assets in the consolidated balance sheets.

The assets held by the Rabbi Trust at December 31, 2024 and 2023 are substantially in the form of Company-owned life insurance and are included in other noncurrent assets in the consolidated balance sheets.

As of December 31, 2024, there were 68 active participants in the NQDC Plan.

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Pension Trust Fund Pension Plan Employer Identification Number 2024 2023 FIP / RP Status Pending / Implemented (2) 2024 2023 2022 Surcharge Imposed Expiration Date of Collective Bargaining Agreement (3)

Operating Engineers Pension Trust Fund 95-6032478 Green Yellow No $ 5,357 $ 4,768 $ 5,266 No 6/30/2025

Pension Trust Fund for Operating Engineers 94-6090764 Green Yellow Yes $ 10,972 $ 10,434 $ 9,783 No 3/31/2025 3/31/2026 6/30/2026 9/30/2026

Locals 302 and 612 IUOE-Employers Construction Industry Retirement Plan 91-6028571 Green Green No 6,976 6,520 5,204 No 3/31/2026 5/31/2028

Pension Trust Fund for Operating Engineers 94-6090764 Yellow Yellow Yes 10,434 9,783 10,095 No 6/30/2024 10/31/2024 3/31/2025 3/31/2026 6/30/2026 9/30/2026

Operating Engineers Pension Trust Fund 95-6032478 Green Green No 5,759 5,357 4,768 No 6/30/2025

All other funds (44 as of December 31, 2024) 22,105 20,466 18,270

20,466 18,270 21,517

Total contributions:

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In addition, we do not have any significant future obligations or funding requirements related to these plans other than the ongoing contributions that are paid as hours are worked by plan participants.

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Shareholders’ Equity

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The 2021 Plan provides for the issuance of restricted stock, RSUs and stock options to eligible employees and to members of our Board of Directors.

A total of 2,507,814 shares of our common stock were reserved for issuance under the 2021 Plan of which 1,940,149 remained available as of December 31, 2023.

During the years ended December 31, 2024, 2023 and 2022, we did not grant any stock options or restricted stock awards and as of December 31, 2024, there were no stock options or restricted stock awards outstanding.

On June 5, 2024, our stockholders approved the 2024 Equity Incentive Plan (the "2024 Plan"), which replaced the 2021 Plan and no further awards may be granted under the 2021 Plan.

The 2024 Plan provides for the issuance of restricted stock, RSUs and stock options to eligible employees and to members of our Board of Directors.

During the year ended December 31, 2024, we did not grant any stock options or restricted stock awards and as of December 31, 2024, there were no stock options or restricted stock awards outstanding.

A total of 2,249,883 shares of our common stock were reserved for issuance under the 2024 Plan of which 2,211,325 remained available as of December 31, 2024.

Restricted Stock Units:

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RSU stock compensation cost is recognized ratably over the shorter of the vesting period (generally ranging from immediate vesting to three years ) or the period from grant date to the first date after the holder reaches age 62 and has completed certain specified years of service, when all RSUs become fully vested.

Vesting of RSUs is not subject to any market or performance conditions and vesting provisions are at the discretion of the Compensation Committee.

Vesting of RSUs is not subject to any

market or performance conditions and vesting provisions are at the discretion of the Compensation Committee.

A recipient of RSUs may not sell or otherwise transfer unvested RSUs and, in the event a recipient’s employment or board service is terminated prior to the end of the vesting period, any unvested RSUs are surrendered to us, subject to limited exceptions.

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Share Repurchase Program:

As announced on February 3, 2022, on February 1, 2022, the Board of Directors authorized us to purchase up to $ 300.0 million of our common stock at management’s discretion (the “2022 authorization”).

As of December 31, 2023, $ 231.5 million of the 2022 authorization remained available with no purchases in 2023 and purchases of 2,298,353 shares for $ 68.5 million in 2022.

As announced on February 3, 2022, on February 1, 2022, the Board of Directors authorized us to purchase up to $ 300.0 million of our common stock at management’s discretion.

During the year ended December 31, 2024, we repurchased 524,800 shares for $ 42.0 million under this authorization.

As of December 31, 2024, $ 189.5 million of the authorization remained available.

The specific timing and amount of any future repurchases will vary based on market conditions, securities law limitations and other factors.

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Weighted Average Shares Outstanding and Net Income Per Share

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Interest expense, net of tax, related to Convertible Notes (1) 11,472 7,622 5,890

7,622 5,890 —

Net income attributable to common shareholders for diluted earnings per share $ 137,818 $ 51,221 $ 89,192

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Dilutive effect of Convertible Notes (1) 8,103 8,103 7,309

8,103 7,309 1,279

Weighted average common shares outstanding, diluted 52,514 52,565 52,326

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Net income per share, diluted $ 2.62 $ 0.97 $ 1.70

(1) Beginning in 2022, with the adoption of ASU 2020-06, we have applied the if-converted method for calculating diluted earnings per share.

(2) Interest expense, net of tax, related to the 2.75 % Convertible Notes of $ 2.5 million and the potential dilution from the 2.75 % Convertible Notes converting into 995,847 shares of common stock for the year ended December 31, 2023 have been excluded from the calculation of diluted earnings per share, as their inclusion would have been antidilutive.

(3) In connection with the issuance of the 3.75 % Convertible Notes in May 2023, we entered into Capped Calls Transactions, which were not included for purposes of calculating the number of diluted shares outstanding at December 31, 2023, as their effect would have been anti-dilutive.

(1) The dilutive effect of the convertible notes was determined using the if-converted method.

As the 3.75 % Convertible Notes will be convertible into cash, shares of our common stock or a combination thereof at our election, the 3.75 % Convertible Notes are assumed to be converted into common stock at the beginning of the reporting period, and the resulting shares are included in the denominator of the calculation.

In addition, interest charges, net of any income tax effects are added back to the numerator of the calculation.

For the 3.25 % Convertible Notes, we are required to settle the principal amount in cash and any conversion premium in excess of the principal amount in cash, shares of common stock, or a combination of cash and shares of common stock, at our election.

As such, the 3.25 % Convertible Notes only have an impact on diluted earnings per share when the average share price of our common stock exceeds the conversion price.

The 2.75 % Convertible Notes will be convertible into cash, shares of our common stock or a combination thereof at our election.

The shares associated with the 2.75 % Convertible Notes were not included in our calculation of diluted net income per share for the year ended December 31, 2023 because their effect would have been anti-dilutive.

The number of shares used in calculating diluted net income per share for the year ended December 31, 2022 includes the dilutive effect of the 2.75 % Convertible Notes.

In connection with the issuance of the 3.25 % Convertible Notes and 3.75 % Convertible Notes, we entered into the 2024 capped call transactions and 2023 capped call transactions, respectively, which were not included for purposes of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive.

The following is a summary of income before income taxes (in thousands):

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Total income before income taxes $ 196,192 $ 59,854 $ 91,817

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The following is a summary of the provision for income taxes (in thousands):

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Federal statutory tax $ 41,200 21.0 % $ 12,569 21.0 % $ 19,282 21.0 %

Non-deductible debt extinguishment costs 10,360 17.3 — — — —

State taxes, net of federal tax benefit 9,693 4.9 5,171 8.6 2,761 3.0

Foreign taxes ( 3,473 ) ( 5.8 ) ( 2,695 ) ( 2.9 ) 1,912 8.6

Percentage depletion deduction ( 1,119 ) ( 1.9 ) ( 1,062 ) ( 1.2 ) ( 1,015 ) ( 4.6 )

Non-controlling interests ( 2,960 ) ( 1.5 ) 2,942 4.9 933 1.0

Nondeductible expenses 2,699 4.5 3,744 4.1 1,398 6.3

Company-owned life insurance ( 466 ) ( 0.8 ) 902 1.0 ( 736 ) ( 3.3 )

Stock-based compensation ( 685 ) ( 1.2 ) ( 330 ) ( 0.4 ) ( 664 ) ( 3.0 )

Changes in uncertain tax positions ( 96 ) ( 0.2 ) ( 54 ) ( 0.1 ) — —

Equity in income of affiliates ( 2,490 ) ( 1.2 ) ( 3,419 ) ( 5.7 ) ( 2,629 ) ( 2.9 )

Change in valuation allowance, net 1,855 0.9 3,163 5.3 ( 3,212 ) ( 3.5 )

Assets held for sale — — ( 14,427 ) ( 15.7 ) 10,089 45.6

Nondeductible debt extinguishment costs 5,537 2.8 10,360 17.3 — —

Nondeductible executive compensation 2,314 1.2 790 1.3 801 0.9

Nondeductible meals and entertainment 1,408 0.7 1,407 2.4 972 1.1

Percentage depletion deduction ( 1,304 ) ( 0.7 ) ( 1,119 ) ( 1.9 ) ( 1,062 ) ( 1.2 )

Nondeductible goodwill — — 945 1.6 8,212 8.9

Assets held for sale — — — — ( 14,427 ) ( 15.7 )

Return to provision adjustments 1,288 0.7 ( 1,250 ) ( 2.1 ) ( 1,102 ) ( 1.2 )

Other ( 493 ) ( 0.8 ) 8 — ( 78 ) ( 0.3 )

Other nontaxable / nondeductible items ( 792 ) ( 0.4 ) ( 1,292 ) ( 2.2 ) 2,431 2.7

Total $ 55,749 28.4 % $ 30,267 50.6 % $ 12,960 14.1 %

The variance from the statutory tax rate in 2023 is due primarily to the tax expense associated with non-deductible debt extinguishment costs and state and local income taxes.

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The variance from the U.S.

federal statutory tax rate in 2024 is due primarily to the tax expense associated with nondeductible debt extinguishment costs and state and local income taxes.

The following is a summary of the deferred tax assets and liabilities:

(in thousands) December 31, 2024 December 31, 2023

Long-term deferred tax assets:

Deferred tax assets:

Receivables $ 1,270 $ 1,328

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Deferred compensation 11,884 10,424

Convertible debt - call option amortization 11,963 3,832

Convertible debt - capped call amortization 19,852 11,963

Accrued compensation 5,048 3,811

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Other 4,199 3,587

Total long-term deferred tax assets 96,579 86,440

Long-term deferred tax liabilities:

Total deferred tax assets 101,865 96,579

Deferred tax liabilities:

Property and equipment 96,908 76,067

Right of use assets 18,831 16,041

Total long-term deferred tax liabilities 92,108 66,123

Net long-term deferred tax assets $ 4,471 $ 20,317

Total deferred tax liabilities 115,739 92,108

Net deferred tax assets (liabilities) $ ( 13,874 ) $ 4,471

The following is a summary of the net operating loss carryforwards at December 31, 2024:

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Foreign tax loss carryforwards 2025-2044 $ 54,135 15,910

Total net operating loss carryforwards at December 31, 2023 $ 40,541

The federal, state and foreign net operating loss carryforwards above included unrecognized tax benefits taken in prior years and the net operating loss carryforward deferred tax asset is presented net of these unrecognized tax benefits in accordance with ASC Topic 740, Income Taxes .

The federal and state net operating losses acquired during the Layne acquisition in 2018 are subject to Internal Revenue Code Section 382 limitations and may be limited in future periods and a portion may expire unused.

Total net operating loss carryforwards $ 29,182

The federal, state and foreign net operating loss carryforwards above include unrecognized tax benefits taken in prior years and the net operating loss carryforward deferred tax asset is presented net of these unrecognized tax benefits in accordance with ASC Topic 740, Income Taxes .

The federal and state net operating losses acquired during the Layne Christensen Company acquisition in 2018 are subject to Internal Revenue Code Section 382 limitations and may be limited in future periods and a portion may expire unused.

As we expect to use the federal net operating loss carryforwards prior to expiration we believe that it is more likely than not that these deferred tax assets will be realized and no valuation allowance was deemed necessary.

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Ending balance $ 23,450 $ 24,569

The change in the valuation allowance in 2023 is mainly due to the increase in losses and other net deferred tax assets associated with our foreign operations which we do not believe are more likely than not to be used in future years.

The change in the valuation allowance in 2024 is mainly due to the reversal of valuation allowances related to the utilization of state and local net operating loss carryforwards and a decrease in net deferred tax assets associated with our foreign operations which we do not believe are more likely than not to be used in future years.

We intend to indefinitely reinvest certain earnings of our foreign subsidiaries and affiliates.

There are generally no federal income taxes on dividends from foreign subsidiaries therefore we would only be subject to other taxes, such as withholding

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and local taxes, upon distribution of these earnings.

There are generally no federal income taxes on dividends from foreign subsidiaries therefore we would only be subject to other taxes, such as withholding and local taxes, upon distribution of these earnings.

We have $ 54.4 million of accumulated undistributed earnings that we consider indefinitely reinvested as of December 31, 2024.

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We are no longer subject to U.S.

federal examinations by tax authorities for years before 2017.

federal examinations by tax authorities for years before 2021 except for the 2018 tax year.

With few exceptions, as of December 31, 2024, we are no longer subject to state examinations by taxing authorities for years before 2018.

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We had approximately $ 22.4 million and $ 22.6 million of total gross unrecognized tax benefits as of December 31, 2024 and 2023, respectively.

There were approximately $ 5.5 million of unrecognized tax benefits that would affect the effective tax rate in any future period at both December 31, 2023 and 2022.

It is reasonably possible that our unrecognized tax benefit could decrease by approximately $ 1.5 million in 2024, of which $ 1.3 million would impact our effective tax rate in 2024.

There were approximately $ 5.2 million and $ 5.5 million of unrecognized tax benefits that would affect the effective tax rate in any future period at December 31, 2024 and 2023, respectively.

It is reasonably possible that our unrecognized tax benefit could decrease by approximately $ 1.2 million in 2025, which would impact our effective tax rate in 2025.

The decrease relates to anticipated statute expirations and anticipated resolution of outstanding unrecognized tax benefits.

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Settlements with taxing authorities/lapse of statute of limitations ( 70 ) ( 242 ) ( 60 )

Reclassification of balances from (to) held for sale — 518 ( 518 )

Reclassification of balances from held for sale — — 518

Ending balance $ 22,359 $ 22,591 $ 22,756

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Ordinary Course Legal Proceedings

In the ordinary course of business, we and our affiliates are involved in various legal proceedings alleging, among other things, liability issues or breach of contract or tortious conduct in connection with the performance of services and/or

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materials provided, the various outcomes of which often cannot be predicted with certainty.

For information on our accounting policies regarding affirmative claims and back charges that we are party to in the ordinary course of business, see Note 1.

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While any of our pending legal proceedings may be subject to early resolution as a result of our ongoing efforts to resolve the proceedings, whether or when any legal proceeding will be resolved is neither predictable nor guaranteed.

Salesforce Tower Matter

Our wholly-owned subsidiary, Layne Christensen Company ("Layne"), was a subcontractor on the foundation for the Salesforce Tower office building in San Francisco in 2013 and 2014.

Certain anomalies were discovered in March 2014 in the foundation’s structural concrete, which were remediated by the general contractor during 2015.

Layne assigned any insurance claims it may have had under the project’s builder’s risk insurance policy to the general contractor.

During 2014, the project owner and the general contractor submitted a claim to the project’s builder’s risk insurers to cover the cost of remedial work and related damages.

The claim was denied by the builder’s risk insurers.

The project owner and the general contractor subsequently filed a legal proceeding against the insurers seeking coverage under the builder’s risk insurance policy, which proceeding was then transferred by agreement to arbitration.

On July 20, 2021, we were informed of an arbitration award denying insurance coverage for claims related to the remedial measures undertaken by the general contractor of the Salesforce Tower and related damages.

On February 3, 2022 , a lawsuit titled Steadfast Insurance Company ( “ Steadfast ” ), a subrogee of Clark/Hathaway Dinwiddie, a Joint Venture ( “ CHDJV ” ) v.

Layne Christensen Company ( “ Layne ” ) , was filed in the Superior Court of the State of California, County of San Francisco, seeking damages of approximately $ 70.0 million for costs incurred by Steadfast on behalf of CHDJV to cure Layne’s allegedly defective work on the foundation of the Salesforce Tower.

On February 4, 2022, CHDJV submitted an arbitration demand with the American Arbitration Association against Granite Construction Incorporated seeking to recover approximately $ 30.0 million for costs incurred by CHDJV to cure Layne’s allegedly defective work on the foundation of the Salesforce Tower.

CHDJV subsequently dismissed Granite and added Layne as a respondent to the arbitration.

On May 6, 2022, CHDJV consolidated its claims with those of Steadfast and joined as a plaintiff in the Steadfast lawsuit, and on May 16, 2022, the arbitration was stayed.

The parties attended mediation on August 4, 2023, and, on October 11, 2023, entered into a settlement agreement to resolve the matters in the Steadfast lawsuit and arbitration.

Pursuant to the terms of the settlement agreement, Steadfast and CHDJV agreed to release the Company and Layne from any and all claims, rights, causes of action, liabilities, actions, suits, damages or demands of any kind whatsoever, that arose out of or are based upon or related to the facts alleged in the Steadfast lawsuit and arbitration.

The settlement agreement contained no admission of liability, wrongdoing or responsibility by any of the parties.

The settlement amount was paid on December 8, 2023 and on December 19, 2023 the Steadfast lawsuit and arbitration were dismissed with prejudice.

We recorded a pre-tax charge of $ 20.0 million, net of insurance recovery, which is reflected in other costs on the condensed consolidated statements of operations for the year ended December 31, 2023.

Reportable Segment Information

Our reportable segments are the same as our operating segments and correspond with how our CODM regularly reviews financial information to allocate resources and assess performance.

Our reportable segments are:

Construction and Materials.

We manage our operations under two reportable segments, Construction and Materials, which are distinguished by differences in business activities.

Our reportable segments are the same as our operating segments and correspond with how our chief operating decision maker, or decision-making group (our “CODM”) regularly reviews financial information to allocate resources and assess performance.

We identified our CODM as our Chief Executive Officer and our Chief Operating Officer.

The Construction segment focuses on construction and rehabilitation of roads, pavement preservation, bridges, rail lines, airports, marine ports, dams, reservoirs, aqueducts, infrastructure and site development for use by the general public and water-related construction for municipal agencies, commercial water suppliers, industrial facilities and energy companies.

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The Materials segment focuses on production of aggregates, asphalt concrete, liquid asphalt and recycled materials production for internal use in our construction projects and for sale to third parties.

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The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies (see Note 1).

We evaluate segment performance based on gross profit, and do not include selling, general and administrative expenses or non-operating income or expense.

In connection with our adoption of ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (see Note 1), we have enhanced our segment disclosures about significant segment expenses.

Our CODM evaluates segment performance and makes business decisions based on operating income, which excludes non-operating income or expense.

Segment assets include property and equipment, intangibles, goodwill, inventory and equity in construction joint ventures.

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Elimination of intersegment revenue — ( 246,827 ) ( 246,827 )

Revenue from external customers $ 2,992,254 $ 516,884 $ 3,509,138

Revenue 3,415,225 592,349 4,007,574

Cost of revenue 2,924,223 510,654 3,434,877

Gross profit 491,002 81,695 572,697

Selling, general and administrative expenses 189,078 29,205 218,283

Gain on sales of property and equipment, net ( 9,206 ) ( 835 ) ( 10,041 )

Operating income from reportable segments $ 311,130 $ 53,325 $ 364,455

Depreciation, depletion and amortization $ 71,634 $ 45,036 $ 116,670

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Elimination of intersegment revenue — ( 200,485 ) ( 200,485 )

Revenue from external customers $ 2,803,935 $ 497,321 $ 3,301,256

Revenue 2,992,254 516,884 3,509,138

Cost of revenue 2,667,199 445,540 3,112,739

Gross profit 325,055 71,344 396,399

Selling, general and administrative expenses 177,040 12,730 189,770

Gain on sales of property and equipment, net ( 24,913 ) ( 3,274 ) ( 28,187 )

Operating income from reportable segments $ 172,928 $ 61,888 $ 234,816

Depreciation, depletion and amortization $ 43,828 $ 29,718 $ 73,546

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Elimination of intersegment revenue — ( 174,107 ) ( 174,107 )

Revenue from external customers $ 3,076,190 $ 425,675 $ 3,501,865

Revenue 2,803,935 497,321 3,301,256

Cost of revenue 2,500,054 431,708 2,931,762

Gross profit 303,881 65,613 369,494

Selling, general and administrative expenses 179,147 10,133 189,280

Gain on sales of property and equipment, net ( 12,820 ) ( 926 ) ( 13,746 )

Operating income from reportable segments $ 137,554 $ 56,406 $ 193,960

Depreciation, depletion and amortization $ 41,836 $ 26,500 $ 68,336

As of December 31, 2023, 2022 and 2021 segment assets included $ 25.1 million, $ 4.7 million and $ 10.3 million, respectively, of property and equipment located in foreign countries (primarily Canada and Mexico).

As of December 31, 2024, 2023 and 2022 segment assets included $ 18.8 million, $ 25.1 million and $ 4.7 million, respectively, of property and equipment located in foreign countries (primarily Canada).

During the years ended December 31, 2024, 2023 and 2022 less than 5 % of our revenue was derived from foreign operations.

A reconciliation of segment gross profit to consolidated income before income taxes is as follows (in thousands):

A reconciliation of operating income from reportable segments to consolidated income before income taxes is as follows (in thousands):

Years Ended December 31, 2024 2023 2022

Total gross profit from reportable segments $ 396,399 $ 369,494 $ 362,645

Selling, general and administrative expenses 294,466 272,610 303,015

Total operating income from reportable segments

$ 364,455 $ 234,816 $ 193,960

Corporate selling, general and administrative expenses

115,879 104,696 83,330

Corporate (gain) loss on sales of property and equipment, net 1,277 ( 159 ) 1,129

Other costs, net 39,936 50,217 24,120

Gain on sales of property and equipment, net ( 28,346 ) ( 12,617 ) ( 66,439 )

Total operating income

207,363 80,062 85,381

Total other (income) expense, net 11,171 20,208 ( 6,436 )

Income before income taxes $ 196,192 $ 59,854 $ 91,817

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A reconciliation of segment assets to consolidated total assets is as follows:

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Property and equipment, net, excluding segment assets 30,654 72,709

Short-term and long-term marketable securities 35,863 65,943

Short-term marketable securities 7,311 35,863

Investments in affiliates 94,031 92,910

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures