Granite Construction Profile
Granite Construction Incorporated (Granite) delivers infrastructure solutions for public and private clients primarily in the United States.
The company is one of the largest diversified construction and construction materials companies in the United States. Within the public sector, the company primarily concentrates on infrastructure projects, including the construction of streets, roads, highways, mass transit facilities, airport infrastructure, bridges, dams, power-related facilities, utilities, tunnels, water well drilling and other infrastructure-related projects. Within the private sector, the company performs various services such as site preparation, mining services and infrastructure services for commercial and industrial sites, railways, residential development, energy development, as well as provide construction management professional services.
Segments
The company's reportable segments are Construction and Materials.
The Construction segment focuses on construction and rehabilitation of roads, pavement preservation, bridges, rail lines, airports, marine ports, dams, reservoirs, aqueducts, infrastructure and site development for use by the general public and water-related construction for municipal agencies, commercial water suppliers, industrial facilities and energy companies. It also provides construction of various complex projects including infrastructure and site development, mining, public safety, tunnel, solar, battery storage and other power-related projects.
The Materials segment focuses on production of aggregates, asphalt concrete, liquid asphalt and recycled materials for internal use in the company's construction projects and for sale to third parties.
In addition to reportable segments, the company reviews its business by operating groups. In alphabetical order, the company's operating groups are as follows:
California, which is consisted of vertically integrated businesses in home markets across the state;
Central, which includes the vertically integrated Arizona region and regional civil construction businesses in Illinois, Florida and Texas. The Central group also includes the Federal division which performs civil construction across the continental United States and Guam, and the Tunnel division; and
Mountain, which is consisted of vertically integrated regional businesses in Alaska, Washington, Oregon, Utah and Nevada. The Mountain Group also includes national businesses in the Industrial & Energy division, which primarily focuses on commercial solar construction projects, Water Resources, which performs water well drilling and rehabilitation services and Mineral Services, which performs mineral exploration services for mining clients.
Customers
Customers in the company's Construction segment are predominantly in the public sector and include certain federal agencies, state departments of transportation, local transit authorities, county and city public works departments, school districts and developers, utilities and private owners of industrial, commercial and residential sites. Customers of the company's Materials segment include internal usage by the company's own construction projects, as well as third-party customers. The company's third-party Materials segment customers include, but are not limited to, contractors, landscapers, manufacturers of products requiring aggregate materials, retailers, homeowners, farmers and brokers. The majority of both the company's public and private customers are located in the United States.
During the year ended December 31, 2023, the company's largest volume customer, including both prime and subcontractor arrangements, was the California Department of Transportation ('Caltrans').
Business Strategy
Granite exists to satisfy society's needs for mobility, power, water and other essential services that sustain living conditions and improve quality of life. Across the company's footprint of regional offices, the company provides horizontal civil infrastructure construction services and construction materials products to a diverse base of public, industrial and commercial clients. These clients benefit from the company's home market strategy which includes local relationships, market intelligence and the resources and expertise of one of the oldest and most respected U.S. contractors and materials producers.
Government Regulations
The company's operations are subject to various statutes and executive orders including the Davis-Bacon Act (which regulates wages and benefits), the Walsh-Healy Act (which prescribes a minimum wage and regulates overtime and working conditions), Executive Order 11246 (which establishes equal employment opportunity and affirmative action requirements), Executive Order 14063 (which requires project labor agreements on federal construction projects over $35 million), the Drug-Free Workplace Act, the Federal Acquisition Regulation and the Federal Civil False Claims Act. The company is also subject to the rules and regulations promulgated by OSHA and the Mine Safety and Health Administration. In addition, certain of the company's contracts with government agencies contain minimum Disadvantaged Business Enterprise ('DBE') participation clauses.
The company is subject to the Foreign Corrupt Practices Act ('FCPA'). The FCPA prohibits U.S. and other business entities from making improper payments to foreign government officials, political parties or political party officials. The company is also subject to the applicable anti-corruption laws in the jurisdictions in which the company operates, thus potentially exposing the company to liability and potential penalties in multiple jurisdictions. The anti-corruption provisions of the FCPA are enforced by the Department of Justice while other state or federal agencies may seek recourse against the company for issues related to the FCPA.
Equipment
The company's portfolio of equipment includes backhoes, barges, bulldozers, cranes, excavators, loaders, motor graders, pavers, rollers, scrapers, trucks, drilling rigs and tunnel boring machines that are used in both of its segments. The company pools certain equipment to maximize utilization. The company continually monitors and adjusts its fleet size so that it is consistent with the size of its business, considering both existing and expected future work. The company leases or rents equipment to supplement its portfolio of equipment in response to construction activity cycles.
Seasonality
The company's operations are typically affected more by weather conditions during the first and fourth quarters of the company's fiscal year (year ended December 2023).
History
Granite Construction Incorporated was founded in 1922. The company was incorporated in 1922.
