Construction and Line Item Joint Ventures

We participate in various construction joint venture partnerships and a limited liability company of which we are a limited partner or member (“joint ventures”). We also participate in various “line item” joint venture agreements under which each partner is responsible for performing certain discrete items of the total scope of contracted work.

Construction Joint Ventures

Generally, each construction joint venture is formed to complete a specific contract and is jointly controlled by the venture partners. The associated agreements typically provide that our interests in any profits and assets, and our respective share in any losses and liabilities resulting from the performance of the contracts, are limited to our stated percentage interest in the project. We have no significant commitments beyond completion of the contracts. Under our contractual arrangements, we provide capital to these joint ventures in return for an ownership interest. In addition, partners dedicate resources to the ventures necessary to complete the contracts and are reimbursed for their cost. The operational risks of each construction joint venture are passed along to the joint venture partners. As we absorb our share of these risks, our investment in each venture is exposed to potential losses.

We have determined that certain of these joint ventures are consolidated because they are VIEs and we are the primary beneficiary or because they are not VIEs and we hold the majority voting interest.

Based on our initial primary beneficiary analysis for one construction joint venture, we determined that decision making responsibility is shared equally between the venture partners. Therefore, this joint venture did not have an identifiable primary beneficiary and we continue to report the pro rata results. All other joint ventures were assigned one primary beneficiary partner.

We continually evaluate whether there are changes in the status of the VIE’s or changes to the primary beneficiary designation of the VIE. Based on our assessments during the years ended December 31, 2013, 2012 and 2011, we determined no change was required for existing construction joint ventures.

Consolidated Construction Joint Ventures

The carrying amounts and classification of assets and liabilities of construction joint ventures we are required to consolidate are included in our consolidated balance sheets as follows (in thousands):



December 31,	2013		2012
Cash and cash equivalents¹	$	38,800	$	105,865
Receivables, net	38,372		43,902
Other current assets	4,778		4,008
Total current assets	81,950		153,775
Property and equipment, net	22,216		41,114
Noncurrent assets	—		1,700
Total assets²	$	104,166	$	196,589

Accounts payable	$	16,937	$	34,536
Billings in excess of costs and estimated earnings¹	60,185		72,490
Accrued expenses and other current liabilities	11,299		8,312
Total liabilities²	$	88,421	$	115,338

¹The volume and stage of completion of contracts from our consolidated construction joint ventures may cause fluctuations in cash and cash equivalents as well as billings in excess of costs and estimated earnings between periods.

²The assets and liabilities of each joint venture relate solely to that joint venture. The decision to distribute joint venture cash and cash equivalents and assets must generally be made jointly by all of the partners and, accordingly, these cash and cash equivalents and assets generally are not available for the working capital needs of Granite until distributed.

At December 31, 2013, we were engaged in four active consolidated construction joint venture projects with total contract values ranging from $0.4 million to $337.0 million. The total revenue remaining to be recognized on these consolidated joint ventures ranged from $0.1 million to $66.9 million. Our proportionate share of the equity in these joint ventures was between 51.0% and 65.0%. During the years ended December 31, 2013, 2012 and 2011, total revenue from consolidated construction joint ventures was $170.0 million, $222.3 million and $233.0 million, respectively. Total cash provided by consolidated construction joint venture operations was $10.9 million, $25.2 million and $21.6 million during the years ended December 31, 2013, 2012 and 2011 respectively.

Unconsolidated Construction Joint Ventures

We account for our share of construction joint ventures that we are not required to consolidate on a pro rata basis in the consolidated statements of operations and as a single line item on the consolidated balance sheets. As of December 31, 2013, these unconsolidated joint ventures were engaged in eleven active construction joint ventures with total contract values ranging from $40.0 million to $3.1 billion. Our proportionate share of the equity in these unconsolidated joint ventures ranged from 20.0% to 50.0%. As of December 31, 2013, revenue remaining to be recognized on these unconsolidated joint ventures ranged from $0.7 million to $624.8 million.

As of December 31, 2013, one of our unconsolidated construction joint ventures was located in Canada and, therefore, the associated disclosures throughout this footnote include amounts that were translated from Canadian dollars to U.S. dollars using the spot rate in effect as of the reporting date for balance sheet items, and the average rate in effect during the reporting period for the results of operations. The associated foreign currency translation adjustments did not have a material impact on the consolidated financial statements for any of the dates or periods presented.

Following is summary financial information related to unconsolidated construction joint ventures (in thousands):



December 31,	2013		2012
Assets:
Cash and cash equivalents¹	$	385,094	$	244,686
Other assets	523,827		301,412
Less partners’ interest	612,530		342,545
Granite’s interest	296,391		203,553
Liabilities:
Accounts payable	155,985		114,039
Billings in excess of costs and estimated earnings¹	245,341		161,268
Other liabilities	104,152		5,873
Less partners’ interest	371,760		183,432
Granite’s interest	133,718		97,748
Equity in construction joint ventures	$	162,673	$	105,805

¹The volume and stage of completion of contracts from our unconsolidated construction joint ventures may cause fluctuations in cash and cash equivalents as well as billings in excess of costs and estimated earnings between periods. The decision to distribute joint venture cash and cash equivalents and assets must generally be made jointly by all of the partners and, accordingly, these cash and cash equivalents and assets generally are not available for the working capital needs of Granite until distributed.



Years Ended December 31,	2013		2012		2011
Revenue:
Total	$	1,391,190	$	1,042,209	$	938,867
Less partners’ interest¹	982,734		665,782		623,090
Granite’s interest	408,456		376,427		315,777
Cost of revenue:
Total	1,107,533		785,079		765,446
Less partners’ interest¹	772,670		511,840		519,340
Granite’s interest	334,863		273,239		246,106
Granite’s interest in gross profit	$	73,593	$	103,188	$	69,671

¹Partners’ interest represents amounts to reconcile total revenue and total cost of revenue as reported by our partners to Granite’s interest adjusted to reflect our accounting policies.

Line Item Joint Ventures

The revenue for each line item joint venture partner’s discrete items of work is defined in the contract with the project owner and each venture partner bears the profitability risk associated with its own work. There is not a single set of books and records for a line item joint venture. Each partner accounts for its items of work individually as it would for any self-performed contract. We include only our portion of these contracts in our consolidated financial statements. As of December 31, 2013, we had four active line item joint venture construction projects with total contract values ranging from $42.6 million to $84.2 million of which our portions ranged from $23.6 million to $61.9 million. As of December 31, 2013, our share of revenue remaining to be recognized on these line item joint ventures ranged from $0.6 million to $17.7 million.