What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-07-30 compared with 2026-04-30 · 110 added, 94 removed, 193 unchanged (51% of the section changed)

2 unchanged sentences

Forward-Looking Disclosure

From time to time, Granite makes certain comments and disclosures in reports and statements, including in this Quarterly Report on Form 10-Q, or statements made by its officers or directors, that are not based on historical facts, including statements regarding future events, occurrences, opportunities, circumstances, strategy, activities, performance, outlook, outcomes, guidance, capital expenditures, committed and awarded projects, results and strategic actions, that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

From time to time, Granite makes certain comments and disclosures in reports and statements, including in this Quarterly Report on Form 10-Q, or statements made by its officers or directors, that are not based on historical facts, including statements regarding future events, occurrences, opportunities, circumstances, strategy, activities, performance, outlook, outcomes, guidance, capital expenditures, committed and awarded projects, results, the redemption and conversions of our 3.75% Convertible Notes and strategic actions, that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are identified by words such as “future,” “outlook,” “assumes,” “believes,” “expects,” “estimates,” “anticipates,” “intends,” “plans,” “appears,” “may,” “will,” “should,” “could,” “would,” “continue,” and the negatives thereof or other comparable terminology or by the context in which they are made.

28 unchanged sentences

In California, our top revenue-generating state, despite overall budgetary concerns, a significant part of the state infrastructure spend is funded through Senate Bill 1 (SB-1), the Road Repair and Accountability Act of 2017, a program without any sunset provisions that may only be used for transportation-related purposes.

Our CAP balance continues to be strong with $7.2 billion at the end of the first quarter of 2026.

Our CAP balance continues to be strong with $7.4 billion at the end of the second quarter of 2026.

Our CAP is supported by a positive public funding environment and strength in the private markets we serve, which we believe will provide further opportunities for continued CAP growth.

5 unchanged sentences

Kenny Seng Construction Acquisition

On April 23, 2026, we completed the acquisition of KSC Utah Investments, Inc.

("Kenny Seng Construction") and related assets for $164.1 million in cash, subject to customary closing adjustments.

We purchased all of the issued and outstanding common stock of Kenny Seng Construction, which is a provider of construction services and materials in Utah.

This acquisition aligns with our strategy of enhancing our vertical integration by strengthening our existing home markets.

The results of Kenny Seng Construction will be included in our consolidated results beginning in the second quarter of 2026.

On April 22, 2026, we drew $170.0 million on our senior secured revolving credit facility (the “Revolver”), which was used, in part, to fund the Kenny Seng Construction acquisition.

We acquired KSC Utah Investments, Inc.

(“Kenny Seng Construction”) on April 23, 2026.

The results of operations of Kenny Seng Construction are included in our consolidated financial statements from the date of acquisition, which impacts comparability to the applicable prior periods.

See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for further information.

Results of Operations

1 unchanged sentence

Therefore, the results of operations of a given quarter are not indicative of the results to be expected for the full year.

The following table presents a financial summary for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

The following table presents a financial summary for the three and six months ended June 30, 2026 and 2025:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2026 2025 2026 2025

Total revenue $ 912,465 $ 699,547

Revenue $ 1,455,872 $ 1,125,964 $ 2,368,337 $ 1,825,511

Gross profit $ 238,771 $ 199,099 $ 348,676 $ 282,948

1 unchanged sentence

Other costs, net $ 5,406 $ 13,253 $ 8,443 $ 22,679

Operating loss $ (31,133) $ (39,751)

Total other expense, net $ 17,375 $ 332

Operating income $ 126,808 $ 103,565 $ 95,675 $ 63,814

Other (income) expense, net $ 366,144 $ (3,994) $ 383,519 $ (3,662)

Amount attributable to non-controlling interests $ (6,578) $ (8,645) $ (11,888) $ (13,974)

Net loss attributable to Granite Construction Incorporated $ (41,699) $ (33,656)

Total Revenue by Segment

Three Months Ended March 31,

Net income (loss) attributable to Granite Construction Incorporated $ (278,162) $ 71,700 $ (319,861) $ 38,044

Revenue by Segment

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands) 2026 2025 2026 2025

3 unchanged sentences

Construction Revenue

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands) 2026 2025 2026 2025

2 unchanged sentences

Total $ 1,207,479 100.0 % $ 937,426 100.0 % $ 1,973,533 100.0 % $ 1,552,044 100.0 %

Construction revenue for the three months ended March 31, 2026 increased by $151.4 million, or 24.6%, when compared to 2025.

This increase was primarily driven by higher CAP entering the quarter, along with $43.1 million of construction revenue from our recently acquired businesses, Warren Paving and Papich Construction, during the three months ended March 31, 2026.

Construction revenue for the three and six months ended June 30, 2026 increased by $270.1 million and $421.5 million, or 28.8% and 27.2%, when compared to 2025.

These increases were primarily driven by higher CAP entering the quarter and year, along with $98.4 million and $141.5 million of construction revenue from our recently acquired businesses, Warren Paving, Papich Construction, and Kenny Seng Construction during the three and six months ended June 30, 2026, respectively.

Materials Revenue

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands) 2026 2025 2026 2025

3 unchanged sentences

Total $ 248,393 100.0 % $ 188,538 100.0 % $ 394,804 100.0 % $ 273,467 100.0 %

Materials revenue for the three months ended March 31, 2026 increased $61.5 million, or 72.4%, when compared to 2025.

This increase was primarily driven by materials revenue from our recently acquired businesses, Warren Paving, Papich Construction and Cinderlite, which was $50.3 million for the three months ended March 31, 2026.

Materials revenue for the three and six months ended June 30, 2026 increased $59.9 million and $121.3 million, or 31.7% and 44.4%, when compared to 2025.

This increase was primarily driven by materials revenue from our recently acquired

businesses, Warren Paving, Papich Construction, Cinderlite and Kenny Seng Construction, which was $59.9 million and $110.2 million for the three and six months ended June 30, 2026, respectively.

Committed and Awarded Projects

9 unchanged sentences

All CAP is in the Construction segment.

(dollars in thousands) March 31, 2026 December 31, 2025

(dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025

Unearned revenue $ 5,056,462 68.2 % $ 4,930,788 68.8 % $ 4,123,113 59.2 %

1 unchanged sentence

Total $ 7,418,830 100.0 % $ 7,169,182 100.0 % $ 6,969,372 100.0 %

(dollars in thousands) March 31, 2026 December 31, 2025

(dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025

Customer type:

2 unchanged sentences

Total $ 7,418,830 100.0 % $ 7,169,182 100.0 % $ 6,969,372 100.0 %

CAP of $7.2 billion at March 31, 2026 was $199.8 million or 2.9% higher than at December 31, 2025.

Significant additions to CAP during the three months ended March 31, 2026 included $495 million for a tactical infrastructure project in Texas, $115 million for a reservoir replacement project in California and $114 million for a highway project in California.

All of these projects are in the public sector.

These CAP additions were partially offset by the cancellation of a $296 million public sector highway project in California for which the project's expanded scope exceeded available funding.

Non-controlling partners’ share of CAP as of March 31, 2026 and December 31, 2025 was $336.9 million and $361.4 million respectively.

At March 31, 2026, one contract with remaining CAP of $10 million or more per project had total forecasted losses with remaining revenue of $17.3 million, or 0.2%, of total CAP.

CAP of $7.4 billion at June 30, 2026 was $249.6 million or 3.5% higher than at March 31, 2026.

Significant additions to CAP during the three months ended June 30, 2026 included $117 million for a highway expansion project in Utah, $62 million for a data center project in Nevada, $50 million for a bridge project in Nevada, $50 million for a dam replacement project in California, $49 million for an airport runway project in California and $41 million for a roadway improvement project in Florida.

Of these projects, the data center project in Nevada and the dam replacement project in California are in the private sector, while the remaining projects are in the public sector.

Non-controlling partners’ share of CAP as of June 30, 2026, March 31, 2026 and December 31, 2025 was $308.7 million, $336.9 million and $361.4 million respectively.

At June 30, 2026, one contract with remaining CAP of $10 million or more had total forecasted losses with remaining revenue of $13.0 million, or 0.2%, of total CAP.

Provisions are recognized in the consolidated statements of operations for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue.

The following table presents gross profit by reportable segment for the respective periods:

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

(dollars in thousands) 2026 2025 2026 2025

5 unchanged sentences

Percent of total revenue 16.4 % 17.7 % 14.7 % 15.5 %

Construction gross profit for the three months ended March 31, 2026 increased by $16.7 million, or 19.6%, when compared to 2025 primarily due to higher revenue and improved project execution across our project portfolio.

Construction gross profit as a percent of revenue decreased when compared to the first quarter of the prior year as we recognized a net increase from a revision in estimate due to a claim settlement in the prior year which did not recur.

Materials gross profit for the three months ended March 31, 2026 was $7.7 million, compared to a gross loss of $1.6 million for the same period in 2025, reflecting an improvement of $9.3 million.

The increased gross profit was primarily driven by higher volumes and sales prices in both aggregates and asphalt.

The increase was also driven by gross profit from our recently acquired businesses, Warren Paving, Papich Construction and Cinderlite, of $4.9 million for the three months ended March 31, 2026, which included $4.4 million of purchase accounting-related charges such as step-up depreciation and intangible asset amortization.

Construction gross profit for the three and six months ended June 30, 2026 increased by $45.0 million and $61.8 million, or 29.3% and 25.8%, when compared to 2025 primarily due to higher revenue and improved project execution across our project portfolio.

For the six month period, gross profit margin decreased year-over-year primarily due to a reduction in the favorable impact of claim settlements.

Materials gross profit for the three months ended June 30, 2026 decreased $5.4 million when compared to 2025.

The decreased gross profit was primarily due to the impact of severe weather in the southeast and higher production costs associated with quarry development activities in the current year.

The decrease was also driven by increased purchase accounting-related charges such as step-up depreciation and intangible asset amortization from our recently acquired businesses.

Materials gross profit for the six months ended June 30, 2026 increased $4.0 million when compared to 2025, despite the impact of severe weather in the southeast in the second quarter and higher production costs associated with quarry development activities in the current year.

The increased gross profit was primarily driven by gross profit from our recently acquired businesses, Warren Paving, Papich Construction, Cinderlite and Kenny Seng Construction, of $4.4 million for the six months ended June 30, 2026, which included $9.9 million of purchase accounting-related charges such as step-up depreciation and intangible asset amortization.

See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for further information about acquisitions.

1 unchanged sentence

The following table presents the components of selling, general and administrative (“SG&A”) expenses for the respective periods:

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

(dollars in thousands) 2026 2025 2026 2025

Salaries and related expenses $ 53,771 $ 45,992 $ 116,488 $ 101,408

Incentive compensation 14,893 6,397 17,194 7,065

Stock-based compensation 2,208 2,126 44,600 32,179

6 unchanged sentences

As projects are completed or the volume of work slows down, we temporarily redeploy project employees to bid on new projects, moving their salaries and related costs from cost of revenue to selling expenses.

SG&A expenses for the three months ended March 31, 2026 increased $25.0 million compared to the same period in 2025, primarily due to a $12.5 million increase in stock-based compensation, as well as $7.1 million of higher salaries and related expenses due to increased labor costs.

SG&A expenses related to our recently acquired businesses, Warren Paving, Papich Construction and Cinderlite, was $4.9 million.

SG&A expenses for the three months ended June 30, 2026 increased $21.9 million compared to the same period in 2025, primarily due to $7.8 million of higher salaries and related expenses due to increased labor costs and $8.5 million of increased incentive compensation due to improved financial performance.

SG&A expenses for the three months ended June 30, 2026 related to our recently acquired businesses, Warren Paving, Papich Construction, Cinderlite, and Kenny Seng Construction were $8.7 million.

SG&A expenses for the six months ended June 30, 2026 increased $46.9 million compared to the same period in 2025, primarily due to $15.1 million of higher salaries and related expenses due to increased labor costs, as well as a $12.4 million increase in stock-based compensation and a $10.1 million increase in incentive compensation, both due to improved financial performance.

SG&A expenses for the six months ended June 30, 2026 related to our recently acquired businesses, Warren Paving, Papich Construction, Cinderlite, and Kenny Seng Construction were $13.6 million.

Other Costs, net

The following table presents other costs, net for the respective periods:

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

(in thousands) 2026 2025 2026 2025

1 unchanged sentence

Other costs, net mainly consists of acquisition and integration costs and, in the prior year, legal costs related to the defense of a former Company officer in his civil litigation with the SEC.

The decrease of $6.4 million for the three months ended March 31, 2026 was primarily driven by a reduction in legal costs following the resolution of our former officer's civil litigation in January 2026.

This was partially offset by increased acquisition and integration costs in the current year.

The decrease of $7.8 million and $14.2 million for the three and six months ended June 30, 2026 was primarily driven by a reduction in legal costs following the resolution of our former officer's civil litigation in January 2026.

The decreases were also driven by lower acquisition and integration costs in the current year.

See Note 1 and Note 3 of the “Notes to the Condensed Consolidated Financial Statements” for information on our recent acquisitions.

Other Expense, net

The following table presents other expense, net for the respective periods:

Three Months Ended March 31,

Other (Income) Expense, net

The following table presents Other (income) expense, net for the respective periods:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2026 2025 2026 2025

Loss on convertible debt transactions, net $ 359,719 $ — $ 369,423 $ —

Interest income (5,147) (5,761) (10,996) (12,029)

1 unchanged sentence

Equity in income of affiliates, net (5,697) (3,698) (9,170) (4,792)

Other (income) expense, net 10,365 (63)

Total other expense, net $ 17,375 $ 332

During the three months ended March 31, 2026, total other expense, net increased $17.0 million, primarily due to expenses associated with the repurchase of a portion of our 3.75% Convertible Notes (see Note 14).

We incurred $2.9 million of inducement expense and $6.8 million of related charges, which were included in Other (income) expense, net in the condensed consolidated statements of operations.

There was also an increase of $8.6 million in interest expense primarily related to increased borrowings under our credit agreement (see Note 14).

The following table presents the benefit from income taxes for the respective periods:

Three Months Ended March 31,

Other income, net (4,492) (2,462) (3,831) (2,525)

Total other (income) expense, net $ 366,144 $ (3,994) $ 383,519 $ (3,662)

During the three and six months ended June 30, 2026, total other expense, net increased $370.1 million and $387.2 million, respectively, compared to 2025.

The increase was primarily due to losses on convertible debt transactions of $359.7 million and $369.4 million during the three and six months ended June 30, 2026, respectively (see Note 14 of “Notes to the Condensed Consolidated Financial Statements”).

Interest expense increased by $13.8 million and $22.4 million for the three and six months periods, respectively, primarily due to increased borrowings under our credit agreement and the issuance of $600.0 million of our 6.375% senior notes due 2034 (the “6.375% Senior Notes”) during the second quarter and also included $3.5 million of interest expense related to the amortization of the debt discount associated with the 3.75% Convertible Notes (see Note 14 of “Notes to the Condensed Consolidated Financial Statements”).

The following table presents the provision for income taxes for the respective periods:

Three Months Ended

June 30, Six Months Ended

(dollars in thousands) 2026 2025 2026 2025

Benefit from income taxes $ (12,119) $ (11,756)

Provision for income taxes $ 32,248 $ 27,214 $ 20,129 $ 15,458

Effective tax rate (13.5 %) 25.3 % (7.0 %) 22.9 %

8 unchanged sentences

We may also from time to time prepay or repurchase outstanding indebtedness, repurchase shares of our common stock or acquire assets or businesses that are complementary to our operations.

During the three months ended June 30, 2026, we issued $600.0 million aggregate principal amount of our 6.375% Senior Notes and called for redemption all of our 3.75% Convertible Notes.

See Note 14 of “Notes to the Condensed Consolidated Financial Statements” for information on the 6.375% Senior Notes, exchange transactions related to our 3.75% Convertible Notes, the redemption of our 3.75% Convertible Notes, the Conversion Election and the related accounting treatment and effects of the Conversion Election.

See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for information on our recent acquisitions.

See Note 14 of “Notes to the Condensed Consolidated Financial Statements” for information on the exchange transactions related to our 3.75% Convertible Notes.

We believe our primary sources of liquidity will be sufficient to meet our expected working capital needs, capital expenditures, financial commitments, cash dividend payments and other liquidity requirements associated with our existing operations for the next twelve months.

We believe our primary sources of liquidity will be sufficient to meet our expected working capital needs, capital expenditures, financial commitments, including the redemption and conversions of our 3.75% Convertible Notes, cash dividend payments and other liquidity requirements associated with our existing operations for the next twelve months.

We also believe our primary sources of liquidity, access to debt and equity capital markets and cash expected to be generated from operations will be sufficient to meet our long-term requirements and plans.

However, there can be no assurance that sufficient capital will continue to be available or that it will be available on terms acceptable to us.

As of March 31, 2026, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions and marketable securities consisting of commercial paper, corporate notes and bonds, Municipal notes and bonds and U.S.

As of June 30, 2026, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions and marketable securities consisting of commercial paper, corporate notes and bonds, Municipal notes and bonds and U.S.

Government and agency obligations.

As of March 31, 2026, the total unused availability under our Revolver was $584.9 million, resulting from $15.1 million in issued and outstanding letters of credit and no amount drawn under the Revolver.

As of the date of this report, $170.0

million was drawn under the Revolver, resulting in total unused availability under our Revolver of $414.9 million.

See Note 1 and Note 14 of “Notes to the Condensed Consolidated Financial Statements.”

As of March 31, 2026, one of the conditions permitting the holders of the 3.25% Convertible Notes to convert was met.

Our common stock traded above 130% of the $77.88 conversion price for at least 20 trading days during the period of 30 consecutive trading days ended on March 31, 2026 (the last trading day of the calendar quarter).

The holders of the 3.25% Convertible Notes have the right to convert through June 30, 2026, at which point we will re-evaluate whether the 3.25% Convertible Notes will continue to be convertible in the subsequent calendar quarter.

As of June 30, 2026, the total unused availability under our Revolver was $584.9 million, resulting from $15.1 million in issued and outstanding letters of credit and no amount drawn under the Revolver.

During the second quarter, we borrowed and repaid $170.0 million on the Revolver.

As of June 30, 2026, one of the conditions permitting the holders of the 3.25% Convertible Notes to convert continued to be met.

Our common stock traded above 130% of the $77.88 conversion price for at least 20 trading days during the period of 30 consecutive trading days ended on June 30, 2026 (the last trading day of the calendar quarter).

The holders of the 3.25% Convertible Notes have the right to convert through September 30, 2026, at which point we will re-evaluate whether the 3.25% Convertible Notes will continue to be convertible in the subsequent calendar quarter.

In the event the holders of the 3.25% Convertible Notes elect to convert a portion, or all of their 3.25% Convertible Notes, the principal amount is required to be settled in cash.

As a result, the $373.8 million principal amount has been classified as a current liability as of March 31, 2026 in the condensed consolidated balance sheet.

As a result, the $373.8 million principal amount remains classified as a current liability as of June 30, 2026 in the Condensed Consolidated Balance Sheets.

Any conversion premium will be satisfied with cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

1 unchanged sentence

In the unlikely event a holder elects to convert, we would use cash on hand or draw on our Revolver as needed.

As of March 31, 2026, one of the conditions permitting the holders of the 3.75% Convertible Notes to convert was met.

Our common stock traded above 130% of the $46.12 conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on March 31, 2026 (the last trading day of the calendar quarter).

The holders of the 3.75% Convertible Notes have the right to convert through June 30, 2026, at which point we will re-evaluate whether the 3.75% Convertible Notes will continue to be convertible in the subsequent calendar quarter.

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.

On the Call Notice Date, we called the outstanding $273.7 million aggregate principal amount of 3.75% Convertible Notes for redemption on August 10, 2026.

We expect that all or substantially all of the holders of the 3.75% Convertible Notes will elect to convert their notes in connection with the notice of redemption.

We expect to settle such conversion requests on August 12, 2026 in cash up to approximately $716.5 million, or $2,617.40 per each $1,000 principal amount of the 3.75% Convertible Notes (which, on an as-converted basis, corresponds to approximately $120.00 per share of our common stock), with any remaining conversion consideration to be paid in shares of our common stock.

The actual amount of consideration that we will be required to pay to settle such conversion requests will depend on our stock price during the relevant observation period and therefore remains subject to change.

If our stock price during the observation period declines, or if not all holders of the 3.75% Convertible Notes elect to convert their notes in connection with the notice of redemption, the amount of cash (and number of shares, if applicable) we would use to settle such conversion requests would be correspondingly reduced.

Net proceeds from the issuance of the 6.375% Senior Notes are expected to fund cash settlements associated with conversions and redemption of the 3.75% Convertible Notes.

As a result of calling the 3.75% Convertible Notes, we have classified the 3.75% Convertible Notes as a current liability as of June 30, 2026 in the Condensed Consolidated Balance Sheets.

See Note 14 of “Notes to the Condensed Consolidated Financial Statements” for information regarding the redemption of the 3.75% Convertible Notes.

Additionally, in connection with the redemption and conversions of the 3.75% Convertible Notes, we expect to unwind and terminate the capped call transactions we entered into in connection with the offering of the 3.75% Convertible Notes (the “2023 capped call transactions”).

In such unwind and termination, we expect to receive an amount from the financial institutions that are counterparties to the 2023 capped call transactions equal to the fair value of such transactions, with such amount and the form of consideration determined at the time of the unwind and termination.

The 2023 capped call transactions were entered into to reduce dilution and/or offset cash payments we are required to make in excess of the principal amount of any converted 3.75% Convertible Notes up to a cap price of $79.83 per share of our common stock.

In evaluating our liquidity position and needs, we also consider cash and cash equivalents held by our consolidated construction joint ventures (“CCJVs”).

The following table presents our cash, cash equivalents and marketable securities, including amounts from our CCJVs, as of the respective dates:

(in thousands) March 31, 2026 December 31, 2025

(in thousands) June 30, 2026 December 31, 2025

Cash and cash equivalents excluding CCJVs $ 722,584 $ 383,636

8 unchanged sentences

(2) All marketable securities were classified as held-to-maturity and consisted of commercial paper, corporate notes and bonds, Municipal notes and bonds and U.S.

Government and agency obligations as of March 31, 2026 and December 31, 2025.

Granite’s portion of CCJV cash and cash equivalents was $96.1 million and $90.6 million as of March 31, 2026 and December 31, 2025, respectively.

Excluded from the table above is $30.9 million and $35.0 million as of March 31, 2026 and December 31, 2025, respectively, of Granite’s portion of unconsolidated construction joint venture cash and cash equivalents.

Government and agency obligations as of June 30, 2026 and December 31, 2025.

Granite’s portion of CCJV cash and cash equivalents was $95.9 million and $90.6 million as of June 30, 2026 and December 31, 2025, respectively.

Excluded from the table above is $31.2 million and $35.0 million as of June 30, 2026 and December 31, 2025, respectively, of Granite’s portion of unconsolidated construction joint venture cash and cash equivalents.

Capital Expenditures

1 unchanged sentence

The timing and amount of such expenditures can vary based on the progress of planned capital projects, the type and size of construction projects, changes in business outlook and other factors.

During the three months ended March 31, 2026, we had capital expenditures of $26.1 million, compared to $32.2 million during the three months ended March 31, 2025.

During the six months ended June 30, 2026, we had capital expenditures of $55.9 million, compared to $61.0 million during the six months ended June 30, 2025.

We currently anticipate 2026 capital expenditures to be between approximately $140.0 million and $160.0 million, including approximately $50.0 million in planned strategic materials investments.

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2026 2025

10 unchanged sentences

While we typically invoice our customers on a monthly basis, our construction contracts frequently provide for retention that is a specified percentage withheld from each payment by our customers until the contract is completed and the work accepted by the customer.

Cash used in operating activities of $30.9 million for the three months ended March 31, 2026 represents a $34.5 million increase in cash used in operating activities when compared to the same period of 2025.

The change was primarily attributable to a $69.2 million decrease in cash provided by working capital, which includes receivables, net contract assets, inventories, other assets, accounts payable and accrued expenses and other liabilities.

Partially offsetting this was an increase in distributions from, net of contributions to, unconsolidated construction joint ventures and affiliates of $15.3 million when compared to the same period of 2025.

Additionally, net income after adjusting for non-cash items increased $19.3 million.

Cash provided by operating activities of $141.5 million for the six months ended June 30, 2026 represents a $136.1 million increase in cash provided by operating activities when compared to the same period of 2025.

The change was primarily attributable to an $83.4 million increase in cash provided by working capital, which includes receivables, net contract assets, inventories, other assets, accounts payable and accrued expenses and other liabilities.

Additionally, net income after

adjusting for non-cash items increased $34.5 million and an increase in distributions from, net of contributions to, unconsolidated construction joint ventures and affiliates of $18.2 million when compared to the same period of 2025.

Investing activities

Cash provided by investing activities of $22.5 million for the three months ended March 31, 2026, compared to cash used in investing activities of $156.3 million for the same period in 2025, represents a $178.8 million increase in cash provided by investing activities.

The change was primarily due to $166.6 million less purchases of marketable securities net of maturities and $11.3 million less purchases of property and equipment, net of sales.

Cash used in investing activities of $114.4 million for the six months ended June 30, 2026, compared to cash used in investing activities of $207.3 million for the same period in 2025, represents an $92.8 million decrease in cash used in investing activities.

The change was primarily due to $221.5 million less purchases of marketable securities net of maturities, $25.0 million collection of note receivable and $7.8 million less purchases of property and equipment, net of sales.

This was partially offset by $162.1 million of cash used for the acquisition of Kenny Seng Construction.

Financing activities

Cash used in financing activities of $255.1 million for the three months ended March 31, 2026 represents a $208.5 million increase in cash used in financing activities when compared to the same period of 2025.

The increase was primarily driven by $288.5 million of repurchases of a portion of our 3.75% Convertible Notes in the current year.

The increase was partially offset by $56.7 million in proceeds from the partial unwind of the capped call transactions and decreased net distributions to non-controlling partners of $26.6 million.

We recognize derivative instruments as either assets or liabilities in the condensed consolidated balance sheets at fair value using Level 2 inputs.

Cash provided by financing activities of $320.8 million for the six months ended June 30, 2026 represents a $375.3 million increase in cash provided by financing activities when compared to the same period of 2025.

The increase was primarily driven by $600.0 million from the issuance of our 6.375% Senior Notes, $170.0 million of proceeds from the Revolver, $56.7 million in proceeds from the partial unwind of the capped call transactions and $25.5 million of decreased net distributions to non-controlling partners.

This was partially offset by $288.5 million of repayments of a portion of our 3.75% Convertible Notes and $170.0 million repayment on the Revolver in the current year.

We recognize derivative instruments as either assets or liabilities in the Condensed Consolidated Balance Sheets at fair value using Level 2 or Level 3 inputs.

See Note 9 to “Notes to the Condensed Consolidated Financial Statements” for further information.

3 unchanged sentences

We are generally required to provide various types of surety bonds that provide an additional measure of security under certain public and private sector contracts.

At March 31, 2026, approximately $4.6 billion of our $7.2 billion CAP was bonded.

At June 30, 2026, approximately $4.4 billion of our $7.4 billion CAP was bonded.

Performance bonds do not have stated expiration dates;

4 unchanged sentences

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

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

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

Our equity-method investments in our foreign affiliates are subject to local bank debt primarily for equipment purchases.

3 unchanged sentences

Our Credit Agreement requires us to comply with various affirmative, restrictive and financial covenants, including the financial covenants described below.

Our failure to comply with these covenants would constitute an event of default under the Credit Agreement.

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

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.

Our failure to comply with these covenants following any relevant cure periods would constitute an event of default under the Credit Agreement.

The indentures governing our 3.25% Convertible Notes, our 3.75% Convertible Notes and our 6.375% Senior Notes also require us to comply with various covenants.

Our failure to comply with these covenants following any relevant cure periods would constitute an event of default under the indentures governing our 3.25% Convertible Notes, our 3.75% Convertible Notes and our 6.375% Senior Notes.

Additionally, our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 6.375% Senior Notes, 3.25% Convertible Notes, our 3.75% Convertible Notes or our Credit Agreement would constitute an event of default under the 6.375% Senior Notes indenture, 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;

3 unchanged sentences

and/or (v) the 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.

A default under the 6.375% Senior Notes indenture, the 3.25% Convertible Notes indenture or the 3.75% Convertible Notes indenture could result in acceleration of the maturity of the notes.

The financial covenants under the terms of the Credit Agreement require the maintenance of a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio.

As of March 31, 2026, we were in compliance with the covenants in the Credit Agreement.

As of June 30, 2026, we were in compliance with the covenants in the Credit Agreement and in the indentures governing our notes.

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”).

There were no shares and 200 shares repurchased under the 2022 authorization in the three months ended March 31, 2026 and 2025, respectively, and $157.6 million remained available under the 2022 authorization as of March 31, 2026.

There were no shares repurchased under the 2022 authorization in the six months ended June 30, 2026 and 2025, and $157.6 million remained available under the 2022 authorization as of June 30, 2026.

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

5 unchanged sentences

These reports, and any amendments to them, are also available at the website of the SEC, www.sec.gov.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of March 31, 2026, there has been no material change in our exposure to market risk from what was previously disclosed in our Annual Report.

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-Q

Item 2. Management’s Discussion and Analysis