Construction Joint Ventures

12 Months Ended

Dec. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

9. Construction Joint Ventures

We participate in various construction joint ventures. As discussed in Note 1, we have determined that certain of these joint ventures are consolidated because they are VIEs and we are the primary beneficiary. We continually evaluate whether there are changes in the status of the VIEs or changes to the primary beneficiary designation of the VIE. Based on our

assessments during the 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). At December 31, 2023, there was $195.6 million of remaining contract value on unconsolidated and line item construction joint venture contracts of which $93.1 million represented our share and the remaining $102.5 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. 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. Our proportionate share of the equity in these joint ventures was between 50.0% and 70.0%. During the years ended December 31, 2023, 2022 and 2021, total revenue from CCJVs was $307.2 million, $437.1 million and $405.1 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.

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, 2023, our share of the revenue remaining to be recognized on these unconsolidated construction joint ventures was $55.7 million and ranged from $1.4 million to $32.3 million by project.

The following is summary financial information related to unconsolidated construction joint ventures:


(in thousands)	December 31, 2023		December 31, 2022
Assets
Cash, cash equivalents and marketable securities	$	117,962	$	130,635
Other current assets (1)	666,536		681,221
Noncurrent assets	52,580		76,204
Less: partners’ interest	574,723		604,741
Granite’s interest (1),(2)	$	262,355	$	283,319
Liabilities
Current liabilities	$	191,175	$	244,411
Less: partners’ interest and adjustments (3)	85,131		130,911
Granite’s interest	$	106,044	$	113,500
Equity in construction joint ventures (4)	$	156,311	$	169,819

(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).

(2)Included in this balance as of December 31, 2023 and 2022 was $66.6 million and $104.3 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.

(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.


Years Ended December 31,	2023		2022		2021
(in thousands)
Revenue
Total	$	66,738	$	330,835	$	820,586
Less: partners’ interest and adjustments (1)	42,230		210,678		526,522
Granite’s interest	$	24,508	$	120,157	$	294,064
Cost of revenue
Total	$	95,448	$	378,237	$	835,899
Less: partners’ interest and adjustments (1)	51,359		238,699		540,854
Granite’s interest	$	44,089	$	139,538	$	295,045
Granite’s interest in gross loss	$	(19,581)	$	(19,381)	$	(981)
Net Loss
Total	$	(24,843)	$	(47,904)	$	(15,533)
Less: partners’ interest and adjustments (1)	(6,226)		(28,228)		(14,765)
Granite’s interest in net loss (2)	$	(18,617)	$	(19,676)	$	(768)

(1)Partners’ interest and adjustments includes amounts to reconcile total revenue and total cost of revenue as reported by our partners to Granite’s interest adjusted to reflect our accounting policies and estimates primarily related to contract forecast and/or actual differences.

(2)These joint ventures' net loss amounts exclude our corporate overhead required to manage the joint ventures and include taxes only to the extent the applicable states have joint venture level taxes.

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. During the years ended December 31, 2023, 2022 and 2021, our portion of revenue from line item joint ventures was $5.3 million, $35.4 million and $67.8 million, respectively.