8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 16, 2005

GRANITE CONSTRUCTION INCORPORATED
(Exact name of registrant as specified in its charter)

Delaware	1-12911	77-0239383
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
585 West Beach Street Watsonville, California		95076
(Address of principal executive offices)		(Zip Code)
(831) 724-1011
Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

          On February 16, 2005, Granite Construction Incorporated (the “Company”) issued a press release with respect to its earnings for the quarter ended December 31, 2004, a copy of which is attached as Exhibit 99.1.

          The information set forth is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition” and shall not be deemed “filed” for purpose of Section 18 of the Securities Exchange Act of 1934, nor shall the information, including the Exhibit, be deemed incorporated by reference in any filing of the Company, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibit

(c) Exhibits.  The following exhibits are attached hereto and furnished herewith:

Exhibit Number	Exhibit Title
99.1	Press Release of Registrant, dated February 16, 2005, its fourth quarter financial results

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GRANITE CONSTRUCTION INCORPORATED
Date:  February 16, 2005	By:	/s/ WILLIAM E. BARTON
		William E. Barton
		Senior Vice President and
		Chief Financial Officer

INDEX TO EXHIBITS

Exhibit Number	Document
99.1	Press Release of Registrant, dated February 16, 2005, its fourth quarter financial results

EX-99.1

Exhibit 99.1

Granite Construction Announces Fourth Quarter and Full Year 2004 Results

          WATSONVILLE, Calif., Feb. 16 /PRNewswire-FirstCall/ -- Granite Construction Incorporated (NYSE: GVA) today announced financial results for the fourth quarter and year ended December 31, 2004.  The Company reported earnings per diluted share of $0.47 for the quarter and $1.39 for the year compared with $0.34 for the fourth quarter 2003 and $1.48 for the twelve months ended December 31, 2003.*

          Revenue for the fourth quarter 2004 totaled $540.6 million compared with $492.7 million a year ago.  Total backlog at December 31, 2004 totaled $2.4 billion compared with $2.0 billion at December 31, 2003.  $25.5 million of revenue for the quarter ended December 31, 2004 and $280.5 million of backlog at December 31, 2004 are a result of consolidating certain construction joint ventures (prospectively beginning on January 1, 2004) as required by new accounting rules.**

          New awards for the fourth quarter 2004 totaled $660.6 million compared with $578.4 million in 2003.  Large projects awarded during the quarter include two highway projects in Texas for $32.7 million and $131.1 million, a Design-Build project in Florida for $147.8 million and a transit project in New York City for $49.8 million.

          "We are pleased that the Branch Division's performance exceeded our expectations despite wet weather early in the quarter and reduced public sector funding in California, our single largest market," said William G. Dorey, president and chief executive officer.  "In particular, we are pleased with the strength of our private development market, which supported our construction business in the West and drove the demand for our construction materials and we look for this to continue in 2005.

          "We are, however, extremely disappointed with the bottom line results from our Heavy Construction Division (HCD).  We are intent on improving our HCD performance and are focusing considerable attention on the basic fundamentals of this business beginning with management oversight, a disciplined bidding philosophy and a commitment to project execution and forecasting.  While we have some underperforming projects yet to complete, I believe we will begin to see our efforts reflected in improved financial results from the division in 2005," said Dorey.

          Operating income for the quarter decreased $5.8 million to $17.2 million compared with $23.0 million for the fourth quarter ended December 31, 2003. Other income totaled $9.7 million in the fourth quarter 2004, an increase of $10.0 million over the same period in 2003.  This increase is primarily due to the investment income from a real estate limited partnership, the planned sale of stock in a non-affiliated company and an increase in interest income.

          Fourth Quarter Results By Segment

          Branch Division operating income for the quarter increased 14.2% to $31.3 million compared with $27.4 million a year ago.  Quarterly revenue for the division totaled $319.3 million, an increase of $15.1 million or 5.0% over the same period in 2003.  Backlog increased 23.1% to $561.9 million compared with $456.4 million at December 31, 2003.  Branch Division gross profit as a percent of revenue was 16.4% for the fourth quarter 2004 compared with 15.7% for the fourth quarter 2003.  Operating income as a percent of revenue in the quarter was 9.8% compared with 9.0% in the fourth quarter of 2003.

          HCD operating income for the quarter was essentially breakeven compared with $7.3 million for the fourth quarter 2003.  HCD revenue for the quarter totaled $221.3 million versus $188.5 million for the same period last year and includes $25.5 million in the 2004 quarter from newly consolidated joint ventures.**  Backlog was $1.9 billion at December 31, 2004 (including $280.5 million from our newly consolidated joint ventures**) compared with $1.5 billion at December 31, 2003.  HCD gross profit as a percent of revenue decreased in the quarter to 3.4% compared with 7.5% for the fourth quarter 2003.   This decrease is due primarily to profit forecasts on several projects that were revised downward as a result of increased estimated costs to complete.

          Full Year 2004 Results

          Revenue for the year totaled $2.1 billion (including $104.3 million from our newly consolidated joint ventures**) as compared with $1.8 billion in 2003.  General and administrative expenses for the year totaled $157.0 million or 7.4% of revenue compared with $151.9 million or 8.2% of revenue for 2003. The $5.2 million increase primarily reflects personnel-related costs associated with increased volume as well as additional expenses associated with pre-bid costs and Sarbanes-Oxley Section 404 compliance.

*

Results in 2003 include $18.4 million in pre-tax income related to the sale of the State Route 91 tollroad franchise by the California Private Transportation Corporation, of which Granite is a 22.2% limited partner.

**

The Company has determined that certain of the construction joint ventures in which it participates are variable interest entities as defined by Interpretation No. 46 (revised December 2003) "Consolidation of Variable Interest Entities" issued by the Financial Accounting Standards Board.  Accordingly, the Company has consolidated those joint ventures where it has determined that the Company is the primary beneficiary prospectively beginning on January 1, 2004.  There was no material effect on the Company's net income as a result of these consolidations for the three or twelve months ended December 31, 2004.

          Fourth Quarter and Fiscal Year 2004 Conference Call

          Granite will conduct a conference call tomorrow, February 17, 2005, at 11:00 a.m. ET/ 8:00 a.m. PT to discuss the results for the quarter and full-year and its outlook for 2005.  The conference call will be Webcast live and can be accessed at http://www.graniteconstruction.com/investor-relations .

          Preliminary Results

          The financial information in this announcement reflects the Company's preliminary results subject to completion of the annual audit. Audited financial results will appear in Granite's Form 10-K, which will be filed on or before March 16, 2005.

          Granite, a member of the S&P 400 Midcap Index, the Domini 400 Social Index and the Russell 2000, is one of the nation's largest diversified heavy civil contractors and construction materials producers. Granite Construction serves public and private sector clients through its offices nationwide. For more information about the company, please visit their website at www.graniteconstruction.com.

          This press release contains forward-looking statements, such as statements related to the existence of bidding opportunities and economic conditions on the Company's future results. Additionally, forward-looking statements include statements that can be identified by the use of forward-looking terminology such as "believes," "expects," "appears," "may," "will," "should," "look for," or "anticipates," or the negative thereof or comparable terminology, or by discussions of strategy.

          All such forward-looking statements are subject to risks and uncertainties that could cause actual results of operations and financial condition and other events to differ materially from those expressed or implied in such forward-looking statements. Specific risk factors include, without limitation, changes in the composition of applicable federal and state legislation appropriation committees; federal and state appropriation changes for infrastructure spending; the general state of the economy; job productivity; accuracy of project estimates; weather conditions; competition and pricing pressures; and state referendums and initiatives.  You should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release.  Granite undertakes no obligation to revise or update publicly any forward-looking statements to conform the statement to actual results or changes in the Company's expectations.

          For further information regarding risks and uncertainties associated with Granite's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operation" and "Quantitative and Qualitative Disclosures About Market Risk" sections of Granite's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Granite's investor relations department at 831-724-1011 or at Granite's website at www.graniteconstruction.com.

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands, except share and per share data)

	December 31, 2004			December 31, 2003
Assets
Current assets
Cash and cash equivalents	$	161,627		$	69,919
Short-term marketable securities		102,237			90,869
Accounts receivable, net		357,842			288,210
Costs and estimated earnings in excess of billings		54,384			31,189
Inventories		31,711			29,878
Deferred income taxes		21,012			22,421
Equity in construction joint ventures		20,895			42,250
Other current assets		75,630			43,915
Total current assets		825,338			618,651
Property and equipment, net		376,197			344,734
Long-term marketable securities		13,828			41,197
Investment in affiliates		10,725			18,295
Other assets		51,866			37,533
	$	1,277,954		$	1,060,410
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of long-term debt	$	15,861		$	8,182
Accounts payable		191,782			135,468
Billings in excess of costs and estimated earnings		144,401			99,337
Accrued expenses and other current liabilities		117,367			100,717
Total current liabilities		469,411			343,704
Long-term debt		148,503			126,708
Other long-term liabilities		40,641			29,938
Deferred income taxes		44,135			44,297
Minority interest in consolidated subsidiaries		24,790			10,872
Stockholders' equity
Preferred stock, $0.01 par value, authorized 3,000,000 shares; none outstanding		—			—
Common stock, $0.01 par value, authorized 100,000,000 shares; issued and outstanding 41,612,319 shares in 2004 and 41,528,317 shares in 2003		416			415
Additional paid-in capital		76,766			73,651
Retained earnings		482,635			442,272
Accumulated other comprehensive income		1,475			76
		561,292			516,414
Unearned compensation		(10,818	)		(11,523	)
		550,474			504,891
	$	1,277,954		$	1,060,410

GRANITE CONSTRUCTION INCORPORATED
REVENUE AND BACKLOG ANALYSIS
(Unaudited - Dollars In Thousands)

BY MARKET SECTOR

	Revenue
	Year Ended December 31,				Variance
	2004		2003		Amount			Percent
Contracts
Federal	$	118,613	$	63,852	$	54,761			85.8
State		709,629		722,055		(12,426	)		(1.7	)
Local		724,855		553,146		171,709			31.0
Total public sector		1,553,097		1,339,053		214,044			16.0
Private sector		318,762		252,693		66,069			26.1
Aggregate sales		264,353		252,745		11,608			4.6
	$	2,136,212	$	1,844,491	$	291,721			15.8

BY MARKET SECTOR

	Backlog
	December 31,				Variance
	2004		2003		Amount			Percent
Contracts
Federal	$	64,348	$	105,397	$	(41,049	)		(38.9	)
State		1,003,614		747,214		256,400			34.3
Local		1,137,821		962,255		175,566			18.2
Total public sector		2,205,783		1,814,866		390,917			21.5
Private sector		232,211		170,922		61,289			35.9
Aggregate sales		—		—		—			—
	$	2,437,994	$	1,985,788	$	452,206			22.8

BY GEOGRAPHIC AREA

	Revenue
	Year Ended December 31,				Variance
	2004		2003		Amount		Percent
California	$	761,365	$	680,597	$	80,768		11.9
West (Excl. CA)		634,206		593,781		40,425		6.8
Midwest		84,587		59,911		24,676		41.2
Northeast		297,423		164,944		132,479		80.3
South		358,631		345,258		13,373		3.9
	$	2,136,212	$	1,844,491	$	291,721		15.8

BY GEOGRAPHIC AREA

	Backlog
	December 31,				Variance
	2004		2003		Amount			Percent
California	$	607,737	$	259,035	$	348,702			****
West (Excl. CA)		369,294		317,520		51,774			16.3
Midwest		120,578		36,096		84,482			****
Northeast		582,780		730,603		(147,823	)		(20.2	)
South		757,605		642,534		115,071			17.9
	$	2,437,994	$	1,985,788	$	452,206			22.8

**** Represents percentages greater than 100%

GRANITE CONSTRUCTION INCORPORATED
COMPARATIVE FINANCIAL SUMMARY
(Unaudited - In Thousands, Except Per Share Data)

	Three Months Ended
	December 31,						Variance
Operations	2004			2003			Amount			Percent
Revenue	$	540,615		$	492,726		$	47,889			9.7
Gross profit	$	56,245		$	58,191		$	(1,946	)		(3.3	)
Gross profit as a percent of revenue		10.4	%		11.8	%		(1.4%	)		—
General and administrative expenses	$	40,570		$	36,401		$	(4,169	)		(11.5	)
G&A expenses as a percent of revenue		7.5	%		7.4	%		(0.1%	)		—
Gain on sales of property and equipment	$	1,489		$	1,168		$	321			27.5
Other income (expense)
Interest income	$	3,894		$	1,789		$	2,105			****
Interest expense	$	(1,779	)	$	(2,000	)	$	221			11.1
Equity in income (loss) of affiliates	$	3,286		$	(431	)	$	3,717			****
Other, net	$	4,285		$	374		$	3,911			****
Total other income (loss)	$	9,686		$	(268	)	$	9,954			****
Income before provision for income taxes and minority interest	$	26,850		$	22,690		$	4,160			18.3
Minority interest	$	(607	)	$	(618	)	$	11			1.8
Net income	$	19,525		$	13,858		$	5,667			40.9
Net income per share:
Basic	$	0.48		$	0.34		$	0.14			41.2
Diluted	$	0.47		$	0.34		$	0.13			38.2
Weighted average shares of common stock:
Basic		40,444			40,222			222			0.6
Diluted		41,200			41,010			190			0.5

	Year Ended December 31,						Variance
		2004			2003			Amount		Percent
Operations
Revenue	$	2,136,212		$	1,844,491		$	291,721		15.8
Gross profit	$	222,021		$	226,450		$	(4,429	)	(2.0	)
Gross profit as a percent of revenue		10.4	%		12.3	%		(1.9	)%	—
General and administrative expenses	$	157,035		$	151,879		$	(5,156	)	(3.4	)
G&A expenses as a percent of revenue		7.4	%		8.2	%		0.8	%	—
Gain on sales of property and equipment	$	18,566		$	4,714		$	13,852		****
Other income (expense)
Interest income	$	7,962		$	6,422		$	1,540		24.0
Interest expense	$	(7,191	)	$	(8,577	)	$	1,386		16.2
Equity in income (loss) of affiliates	$	6,162		$	17,657		$	(11,495	)	(65.1	)
Other, net	$	4,439		$	2,738		$	1,701		62.1
Total other income (loss)	$	11,372		$	18,240		$	(6,868	)	(37.7	)
Income before provision for income taxes and minority interest	$	94,924		$	97,525		$	(2,601	)	(2.7	)
Minority interest	$	(9,440	)	$	(1,717	)	$	(7,723	)	****
Net income	$	57,007		$	60,504		$	(3,497	)	(5.8	)
Net income per share:
Basic	$	1.41		$	1.51		$	(0.10	)	(6.6	)
Diluted	$	1.39		$	1.48		$	(0.09	)	(6.1	)
Weighted average shares of common stock:
Basic		40,390			40,175			215		0.5
Diluted		41,031			40,808			223		0.5

					Variance
Financial Position		Dec. 31, 2004		Dec. 31, 2003		Amount		Percent
Working capital	$	355,927	$	274,947	$	80,980		29.5
Current ratio		1.76		1.80		(0.04	)	(2.2	)
Long-term debt	$	148,503	$	126,708	$	21,795		17.2
Total liabilities to equity ratio		1.32		1.10		0.22		20.0
Stockholders’ equity	$	550,474	$	504,891	$	45,583		9.0
Total assets	$	1,277,954	$	1,060,410	$	217,544		20.5
Book value per common share	$	13.23	$	12.16	$	1.07		8.8
Backlog	$	2,437,994	$	1,985,788	$	452,206		22.8

**** Represents percentages greater than 100%

SOURCE  Granite Construction Incorporated
          -0-                                        02/16/2005
          /CONTACT:  Jacque Underdown of Granite Construction Incorporated, +1-831-761-4741/
          /Web site:  http://www.graniteconstruction.com /