Note 10 - Investments in Affiliates

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Investments in and Advances to Affiliates, Schedule of Investments [Text Block]

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 real estate entities and an asphalt terminal entity.

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 asphalt terminal entity is not consolidated because it is not VIE and we do not hold the majority voting interest. As such, this entity is 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,	2021		2020
Real estate	$	9,619	$	12,777
Asphalt terminal		13,749		14,860
Total investments in affiliates	$	23,368	$	27,637

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,	2021		2020
Current assets	$	34,374	$	28,367
Noncurrent assets		78,829		72,005
Total assets	$	113,203	$	100,372
Current liabilities	$	23,685	$	12,517
Long-term liabilities (1)		48,104		35,786
Total liabilities	$	71,789	$	48,303
Net assets	$	41,414	$	52,069
Granite’s share of net assets	$	23,368	$	27,637

(1) The balance primarily related to local bank debt for equipment purchases and debt associated with our real estate investments. 

Of the $113.2 million in total assets as of December 31, 2021, we had investments in two real estate entities with total assets of $30.0 million and $51.2 million and the asphalt terminal entity had total assets of $32.0 million. As of December 31, 2021 and 2020, all of the equity method investments in real estate affiliates were in residential real estate in Texas. As of December 31, 2021, our percent ownership in the real estate entities ranged from 10% to 25%.

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,	2021		2020		2019
Revenue	$	57,838	$	49,707	$	70,439
Gross profit	$	16,944	$	21,563	$	23,418
Income before taxes	$	11,584	$	15,653	$	20,761
Net income	$	11,584	$	15,653	$	20,761
Granite’s interest in affiliates’ net income	$	3,465	$	5,191	$	6,991