Investments in Affiliates

12 Months Ended

Dec. 31, 2023

Investments in and Advances to Affiliates [Abstract]

Investments in Affiliates

10. 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 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 foreign affiliates and the asphalt terminal entity are not consolidated because they are not VIEs and we do not hold the majority voting interest. As such, these entities are accounted for using the equity method.

Our investments in affiliates balance consists of equity method investments in the following types of entities:

(in thousands)	December 31, 2023		December 31, 2022
Foreign	$	68,407	$	58,579
Real estate	7,136		8,517
Asphalt terminal	17,367		13,629
Total investments in affiliates	$	92,910	$	80,725

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

(in thousands)	December 31, 2023		December 31, 2022
Current assets	$	204,897	$	194,210
Noncurrent assets	159,694		172,560
Total assets	$	364,591	$	366,770
Current liabilities	$	81,899	$	106,780
Long-term liabilities (1)	54,591		59,356
Total liabilities	$	136,490	$	166,136
Net assets	$	228,101	$	200,634
Granite’s share of net assets	$	92,910	$	80,725

(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%. 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, 2023.

The following table provides summarized statements of operations information for our affiliates accounted for under the equity method on a combined basis (in thousands):

Years Ended December 31,	2023		2022		2021
(in thousands)
Revenue	$	476,361	$	377,256	$	302,084
Gross profit	$	142,139	$	95,816	$	74,939
Income before taxes	$	99,108	$	60,513	$	38,261
Net income	$	86,124	$	47,331	$	33,864
Granite’s interest in affiliates’ net income	$	25,748	$	13,571	$	12,586