GRANITE CONSTRUCTION INCORPORATED The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the year endedDecember 31, 2021 (our "Annual Report") and the unaudited condensed consolidated financial statements and the accompanying notes thereto included herein.
Forward-Looking Disclosure
From time to time, Granite makes certain comments and disclosures in reports and statements, including in this Quarterly Report on Form 10-Q, or statements made by its officers or directors, that are not based on historical facts, including statements regarding future events, occurrences, circumstances, strategy, activities, performance, outlook, outcomes, guidance, capital expenditures, committed and awarded projects, and results, that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by words such as "future," "outlook," "assumes," "believes," "expects," "estimates," "anticipates," "intends," "plans," "appears," "may," "will," "should," "could," "would," "continue," and the negatives thereof or other comparable terminology or by the context in which they are made. In addition, other written or oral statements that constitute forward-looking statements have been made and may in the future be made by or on behalf of Granite. These forward-looking statements are estimates reflecting the best judgment of senior management and reflect our current expectations regarding future events, occurrences, circumstances, strategy, activities, performance, outlook, outcomes, guidance, capital expenditures, committed and awarded projects, and results. These expectations may or may not be realized. Some of these expectations may be based on beliefs, assumptions or estimates that may prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity. Such risks and uncertainties include, but are not limited to, those more specifically described in our Annual Report under "Item 1A. Risk Factors." Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place undue reliance on them. The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this Quarterly Report on Form 10-Q and, except as required by law, we undertake no obligation to revise or update any forward-looking statements for any reason.
Overview
We deliver infrastructure solutions for public and private clients primarily inthe United States . We are one of the largest diversified infrastructure companies inthe United States . Within the public sector, we primarily concentrate on infrastructure projects, including the construction of streets, roads, highways, mass transit facilities, airport infrastructure, bridges, dams, power-related facilities, utilities, tunnels and other infrastructure-related projects. Within the private sector, we perform site preparation, mining services and infrastructure services for residential development, energy development, commercial and industrial sites, and other facilities, as well as provide construction management professional services. During the fourth quarter of 2021, we updated our strategy to focus on our core business capabilities, to leverage our current geographic based home markets in the civil construction and materials business and to target expansion based upon that combined strategy. Also related to our new strategic plan, during the fourth quarter of 2021, we reorganized our operating groups to improve operating efficiencies and better position the Company for long-term growth. In alphabetical order, our continuing business operating groups areCalifornia , Central and Mountain. In addition, we revised the financial information our chief operating decision maker, or decision-making group (our "CODM"), regularly reviews to allocate resources and assess our performance. This change is consistent with our strategic plan update and better aligns with our continuing civil construction and materials business. Our CODM now regularly reviews financial information regarding our two primary product lines, construction and materials, as well as our operating groups. We identified our CODM as our Chief Executive Officer and our Chief Operating Officer. As a result of these changes, in accordance withFinancial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 280, Segment Reporting, our reportable segments, which are the same as our operating segments, were changed to two reportable segments: Construction and Materials (see Note 19 of "Notes to the Condensed Consolidated Financial Statements"). The five primary economic drivers of our business are (i) the overall health of theU.S. economy; (ii) federal, state and local public funding levels; (iii) population growth resulting in public and private development; (iv) the need to build, replace or repair aging infrastructure; and (v) the pricing of certain commodity related products. Changes in these drivers can either reduce our revenues and/or gross profit margins or provide opportunities for revenue growth and gross profit margin improvement. 20
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Current Economic Environment and Outlook
Funding for our public work projects, which accounts for approximately 75% of our portfolio, is dependent on federal, state, regional and local revenues. At the federal level,President Biden signed the$1.2 trillion Infrastructure Investment and Jobs Act ("IIJA") onNovember 15, 2021 . The five-year IIJA provides the largest increase in federal highway, bridge and transit funding in more than six decades and includes$550 billion in incremental funding. With the 2022 federal spending bill passed byCongress and signed byPresident Biden inMarch 2022 , the first installment of IIJA can begin to be appropriated to infrastructure spending programs. We believe the increased multi-year spending commitment will improve the programming visibility for state and local governments and bring meaningful impact to project lettings starting in late 2022 and then growing in 2023 and beyond. At state, regional and local levels, voter-approved state and local transportation measures continue to support infrastructure spending. In theNovember 2021 elections, voters in 17 states approved 89% of state and local ballot initiatives that will provide an additional$6.9 billion in one-time and recurring revenue for transportation improvements. InCalifornia , our top revenue-generating state, a significant part of the state infrastructure spend is funded through Senate Bill 1 (SB-1), the Road Repair and Accountability Act of 2017, which is a 10-year,$54.2 billion program without any sunset provisions. Revenue collected through SB-1 is on track to increase over the next five years and supports our expected growth in the state. Over the past year, segments of the construction industry were adversely affected by inflation as well as supply chain and labor constraints. Inflation has impacted the cost of inputs such as oil related items, concrete and steel. We continually monitor the expected movement of our construction input costs and apply strategies to mitigate the impacts including adjusting the pricing of our contracts. One of the most significant impacts to our results of operations has been the increase in price of diesel fuel and liquid asphalt. The conflict inUkraine has further increased oil prices since lateFebruary 2022 . While we actively work to mitigate the impacts of oil price inflation, further price increases may adversely impact us in the future. Granite's Committed and Awarded Projects ("CAP") continues to be strong. During 2021, we saw increased interest in best-value or alternative delivery procurement work by state departments of transportation, such asCalifornia andUtah , along with other state agencies. This shift in delivery procurement methodology creates a delay in certain project bookings and project start times in the short term, but we believe will give us the opportunity for larger future work with more sustainable margins and less inherent risk. While we are encouraged by the growth outlook, the COVID-19 pandemic continues to create uncertainties to the economy and the normal cadence of project bids, and could adversely impact our operations and financial results in future periods. Strategic Actions The planned divestitures of the businesses in our former Water and Mineral Services operating group ("WMS") reflects our new strategy to focus on our core civil construction and materials businesses by using sale proceeds to invest in these two businesses. The divestitures also create opportunities to streamline operational support functions, improve overhead efficiency and better leverage efficiencies of scale. The current and projected strong demand for civil construction supports the decision to grow our vertically integrated business. Through our newly reorganized operational structure, our focus is to pursue opportunities in markets where our operating groups' presence, capabilities and resources provide strategic advantages, with improved and consistent margin expectations. The sale of our trenchless and pipe rehabilitation services business ("Inliner") was completed onMarch 16, 2022 for a purchase price of$159.7 million , and we received cash proceeds of$142.6 million based on preliminary post-closing adjustments (see Note 3 of "Notes to the Condensed Consolidated Financial Statements"). We ended the first quarter of 2022 with a strong balance sheet and liquidity providing flexibility to invest to strengthen and expand our home market footprint.
Litigation Matter
As further discussed in Note 18 of "Notes to the Condensed Consolidated Financial Statements," in earlyFebruary 2022 , our wholly-owned subsidiary,Layne Christensen Company ("Layne"), was sued for$70 million and Granite received an arbitration demand for$30 million relating to Layne's work on theSalesforce Tower foundation. Layne was a subcontractor on this project and potential liability for this project remained with Layne in connection with our acquisition of Layne inJune 2018 . See Note 18 and "In connection with acquisitions or divestitures, we may become subject to liabilities" and "We are involved in lawsuits and legal proceedings in the ordinary course of our business and may in the future be subject to other litigation and legal proceedings, and, if any of these are resolved adversely against us, it could harm our business, financial condition and results of operations" in Item 1A. Risk Factors in our Annual Report for additional information. 21
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Results of Operations
Our operations are typically affected more by weather conditions during the first and fourth quarters of our fiscal year which may alter our construction schedules and can create variability in our revenues and profitability. Therefore, the results of operations of a given quarter are not indicative of the results to be expected for the full year. The following table presents a financial summary for the three months endedMarch 31, 2022 and 2021: Three Months Ended March 31, (in thousands) 2022 2021 Total revenue$ 547,586 $ 566,332 Gross profit$ 49,775 $ 53,712 Selling, general and administrative expenses$ 58,501
$ 8,214 $ 74,309 Operating loss$ (16,608 ) $ (79,513 ) Total other expense, net$ 4,640 $ 4,645 Net loss from continuing operations$ (15,917 )
$ 6,096
$ (3,118 ) $ (872 ) Net loss attributable to Granite Construction Incorporated$ (12,939 ) $ (66,195 ) Revenue Total Revenue by Segment Three Months Ended March 31, (dollars in thousands) 2022 2021 Construction$ 474,935 86.7 %$ 506,971 89.5 % Materials 72,651 13.3 59,361 10.5 Total$ 547,586 100.0 %$ 566,332 100.0 % Construction Revenue Three Months Ended March 31, (dollars in thousands) 2022 2021 California$ 144,387 30.4 %$ 159,266 31.4 % Central 224,093 47.2 253,293 50.0 Mountain 106,455 22.4 94,412 18.6 Total$ 474,935 100.0 %$ 506,971 100.0 % Construction revenue for the three months endedMarch 31, 2022 decreased by$32.0 million , or 6.3%, when compared to 2021. These decreases were primarily driven by lower Committed and Awarded Projects ("CAP") and progression on existing projects in the Central operating group and less favorable weather conditions in the current year in theCalifornia operating group. These decreases were partially offset by increased revenue in the Mountain operating group. During the three months endedMarch 31, 2022 and 2021, the majority of revenue earned in the Construction segment was from the public sector. Materials Revenue Three Months Ended March 31, (dollars in thousands) 2022 2021 California$ 45,687 62.8 %$ 41,956 70.7 % Central 10,362 14.3 8,380 14.1 Mountain 16,602 22.9 9,025 15.2 Total$ 72,651 100.0 %$ 59,361 100.0 %
Materials revenue for the three months ended
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Committed and Awarded Projects
Effective during the three months endedJune 30, 2021 , on a retroactive basis, we renamed contract backlog to CAP and added the general construction portion of construction management/general contractor ("CM/GC") contracts. This is the same presentation used in our quarterly reports, earnings calls and press releases. Prior period amounts have been revised to reflect this change. In line with the revised reportable segments, all CAP is now in the Construction segment. CAP consists of two components: (1) unearned revenue and (2) other awards. Unearned revenue includes the revenue we expect to record in the future on executed contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts. We generally include a project in unearned revenue at the time a contract is awarded, the contract has been executed and to the extent we believe funding is probable. Contract options and task orders are included in unearned revenue when exercised or issued, respectively. Certain government contracts where funding is appropriated on a periodic basis are included in unearned revenue at the time of the award when it is probable the contract value will be funded and executed. Other awards include the general construction portion of CM/GC contracts and awarded contracts with unexercised contract options or unissued task orders. The general construction portion of CM/GC contracts are included in other awards to the extent contract execution and funding is probable. Contracts with unexercised contract options or unissued task orders are included in other awards to the extent option exercise or task order issuance is probable. (dollars in thousands) March 31, 2022 December 31, 2021 March 31, 2021
Unearned revenue
1,443,190 36.7 1,414,979 35.3 1,000,380 24.0
Total $ 3,934,727 100.0 % $ 4,010,064 100.0 % $ 4,171,932 100.0 %
(dollars in thousands) March 31, 2022 December 31, 2021 March 31, 2021
California $ 1,480,950 37.7 % $ 1,476,066 36.8 % $ 1,349,272 32.3 %
Central 1,426,255 36.2 1,585,309 39.5 2,057,790 49.4
Mountain 1,027,522 26.1 948,689 23.7 764,870 18.3
Total $ 3,934,727 100.0 % $ 4,010,064 100.0 %
CAP of$3.9 billion atMarch 31, 2022 remained relatively unchanged when compared toDecember 31, 2021 . Significant new awards during the three months endedMarch 31, 2022 included a$32 million highway realignment project in theCalifornia operating group, a$22 million train station track and platform expansion project in theCalifornia operating group and a$20 million road improvement contract inArizona for the Central operating group. Non-controlling partners' share of CAP as ofMarch 31, 2022 ,December 31, 2021 andMarch 31, 2021 was$177.1 million ,$214.3 million and$321.3 million , respectively. AtMarch 31, 2022 , four contracts had total forecasted losses with remaining revenue of$176.4 million , or 4.5%, of total CAP.
Gross Profit
The following table presents gross profit by reportable segment for the
respective periods:
Three Months Ended March 31,
(dollars in thousands) 2022 2021
Construction $ 48,192 $ 52,769
Percent of segment revenue 10.1 % 10.4 %
Materials 1,583 943
Percent of segment revenue 2.2 1.6
Total gross profit $ 49,775 $ 53,712
Percent of total revenue 9.1 % 9.5 %
Construction gross profit for the three months ended March 31, 2022 decreased by
$4.6 million , or 8.7%, when compared to 2021 primarily due to lower revenue and
progression of lower margin work early in the year.
Materials gross profit for the three months ended March 31, 2022 increased by
$0.6 , or 67.9% when compared to 2021 due to increases in aggregate and asphalt
volumes as well as price increases and oil price mitigation efforts such as bulk
purchases and forward contracts that offset the impact of higher fuel and liquid
asphalt costs.
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Selling, General and Administrative Expenses
The following table presents the components of selling, general and administrative expenses for the respective periods:
Three Months Ended March 31,
(dollars in thousands) 2022 2021
Selling
Salaries and related expenses $ 15,148 $ 15,624
Restricted stock unit amortization 633 653
Other selling expenses 1,475 1,066
Total selling 17,256 17,343
General and administrative
Salaries and related expenses 24,145 23,278
Restricted stock unit amortization 1,655 1,065
Other general and administrative expenses 15,445
19,475
Total general and administrative 41,245
43,818
Total selling, general and administrative$ 58,501 $ 61,161 Percent of revenue 10.7 % 10.8 % Selling Expenses Selling expenses include the costs for estimating and bidding including offsetting customer reimbursements for portions of our selling/bid submission expenses (i.e., stipends), business development and materials facility permits. Selling expenses can vary depending on the volume of projects in process and the number of employees assigned to estimating and bidding activities. As projects are completed or the volume of work slows down, we temporarily redeploy project employees to bid on new projects, moving their salaries and related costs from cost of revenue to selling expenses. Selling expenses for the three months endedMarch 31, 2022 remained relatively unchanged when compared to 2021.
General and Administrative Expenses
General and administrative expenses include costs related to our operational offices that are not allocated to direct contract costs and expenses related to our corporate functions. Other general and administrative expenses include travel and entertainment, outside services, information technology, depreciation, occupancy, training, office supplies, incentive compensation, changes in the fair market value of our Non-Qualified Deferred Compensation plan liability and other miscellaneous expenses. Total general and administrative expenses for the three months endedMarch 31, 2022 decreased by$2.6 million , or 5.9%, when compared to 2021, primarily due to decreases in the fair market value of our Non-Qualified Deferred Compensation plan liability, which is offset in other (income) expense, net, through our own company-owned life insurance policy. Other Costs
The following table presents other costs for the respective periods:
Three Months Ended March 31,
(dollars in thousands) 2022 2021
Other costs $ 8,214 $ 74,309
Other costs (see Note 7 of "Notes to the Condensed Consolidated Financial
Statements") for the three months ended March 31, 2022 decreased $66 million
when compared to 2021, primarily due to the legal settlement charge during the
three months ended March 31, 2021 .
Income Taxes
The following table presents the benefit from income taxes on continuing operations for the respective periods:
Three Months Ended March 31 ,
(dollars in thousands) 2022 2021
Benefit from income taxes on continuing operations
$ (21,757 ) Effective tax rate 25.1 % 25.9 % We calculate our income tax provision for continuing operations at the end of each interim period by estimating our annual effective tax rate and applying that rate to our loss before benefit from income taxes. The effect of changes in enacted tax laws, tax rates or tax status is recognized in the interim period in which the change occurs. See Note 17 of "Notes to the Condensed Consolidated Financial Statements" for more information.
Amount Attributable to Non-controlling Interests
The following table presents the amount attributable to non-controlling interests in consolidated subsidiaries for the respective periods:
Three Months Ended March 31 ,
(in thousands) 2022 2021
Amount attributable to non-controlling interests
(872 )
The amount attributable to non-controlling interests represents the non-controlling owners' share of the income or loss of our consolidated construction joint ventures. The amount for the three months endedMarch 31, 2022 increased$2.2 million , primarily due to net negative impacts from revisions in estimates on two projects in the prior year, neither of which had an impact of$5 million or more on gross profit.
Net Income (Loss) from Discontinued Operations
Net income (loss) from discontinued operations for the three months endedMarch 31, 2022 increased$9.0 million when compared to 2021 primarily due to the gain on sale of Inliner as well as ceasing depreciation and amortization on WMS property, plant and equipment, finite-lived intangible assets and right-of-use lease assets in the current year due to the classification of these assets as held-for-sale beginningDecember 31, 2021 (see Note 3 of "Notes to the Condensed Consolidated Financial Statements"). 24
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Liquidity and Capital Resources
Our primary sources of liquidity are cash and cash equivalents, investments, available borrowing capacity and cash generated from operations. We may also from time to time issue and sell equity, debt or hybrid securities or engage in other capital markets transactions or sell one or more business units, divisions or assets including the WMS businesses. Our material cash requirements include paying the costs and expenses associated with our operations, servicing outstanding indebtedness, making capital expenditures and paying dividends on our capital stock. We may also from time to time prepay or repurchase outstanding indebtedness, repurchase shares of our common stock or acquire assets or businesses that are complementary to our operations. We believe our primary sources of liquidity will be sufficient to meet our expected working capital needs, capital expenditures, financial commitments, cash dividend payments and other liquidity requirements associated with our existing operations for the next twelve months. We believe our primary sources of liquidity, access to debt and equity capital markets, proceeds from the sales of the WMS businesses and cash expected to be generated from operations will be sufficient to meet our long-term requirements and plans. However, there can be no assurance that sufficient capital will continue to be available or that it will be available on terms acceptable to us. As ofMarch 31, 2022 , our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions and marketable securities consisting primarily ofU.S. Government and agency obligations and corporate commercial paper. Our credit facility consists of a term loan and a revolving credit facility. During the three months endedMarch 31, 2022 ,$60.9 million of the term loan was repaid prior to its stated maturity. Of the$275.0 million revolving credit facility capacity,$242.1 million was available for borrowing atMarch 31, 2022 . See Note 15 of "Notes to the Condensed Consolidated Financial Statements" for further discussion regarding the credit agreement. In evaluating our liquidity position and needs, we also consider cash and cash equivalents held by our consolidated construction joint ventures ("CCJVs"). The following table presents our cash, cash equivalents and marketable securities, including amounts from our CCJVs, for continuing operations as of the respective dates: December 31, (in thousands) March 31, 2022 2021 March 31, 2021
Cash and cash equivalents excluding CCJVs
100,080 92,783 110,486
Total consolidated cash and cash equivalents 360,911 395,647 440,833
Short-term and long-term marketable
securities (2) 36,728 15,600 11,300
Total cash, cash equivalents and marketable
securities $ 397,639 $
411,247
(1) The volume and stage of completion of contracts from our CCJVs may cause fluctuations in joint venture cash and cash equivalents between periods. The assets of each consolidated and unconsolidated construction joint venture relate solely to that joint venture. The decision to distribute joint venture assets must generally be made jointly by a majority of the members and, accordingly, these assets, including those associated with estimated cost recovery of customer affirmative claims and back charge claims, are generally not available for the working capital needs of Granite until distributed. (2) All marketable securities were classified as held-to-maturity and consisted ofU.S. and agency obligations and corporate commercial paper as of all periods presented.
Granite's portion of
•
of unconsolidated construction joint venture cash and cash equivalents
•
current assets held-for-sale
Capital Expenditures
During the three months endedMarch 31, 2022 , we had capital expenditures of$ 31.3 million , including$ 3.4 million related to discontinued operations, compared t o$18.8 million , including$ 3.3 million related to discontinued operations during the three months endedMarch 31, 2021 . Major capital expenditures are typically for aggregate and asphalt production facilities, aggregate reserves, construction equipment, buildings and leasehold improvements and investments in our information technology systems. The timing and amount of such expenditures can vary based on the progress of planned capital projects, the type and size of construction projects, changes in business outlook and other factors. We currently anticipate 2022 capital expenditures for continuing operations to be between approximately$100 million and$115 million . 25
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Cash Flows
Three months ended March 31,
(in thousands) 2022 2021
Net cash provided by (used in):
Operating activities $ (50,180 ) $ 38,087
Investing activities $ 89,396 $ (16,303 )
Financing activities $ (82,904 ) $ (4,992 )
Operating activities
As a large infrastructure contractor and construction materials producer, our
revenue, gross profit and the resulting operating cash flows can differ
significantly from period to period due to a variety of factors,
including project progression toward completion, outstanding contract change
orders and affirmative claims, and the payment terms of our
contracts. Additionally, operating cash flows are impacted by the timing related
to funding construction joint ventures and the resolution of uncertainties
inherent in the complex nature of the work that we perform, including claim and
back charge settlements. Our working capital assets result from both public and
private sector projects. Customers in the private sector can be slower paying
than those in the public sector; however, private sector projects generally have
higher gross profit as a percentage of revenue. While we typically invoice our
customers on a monthly basis, our contracts frequently provide for retention
that is a specified percentage withheld from each payment by our customers until
the contract is completed and the work accepted by the customer.
Cash used in operating activities of $ 50.2 million for the three months ended
March 31, 2022 represents an $ 88.3 million increase in cash used when compared
to cash provided in the same period of 2021. This change was primarily due
to an increase in cash used of $ 80.9 million due to changes in working capital
(excluding the $66.0 million net decrease in working capital related to the
securities litigation settlement), partially offset by a decrease in cash
used of $ 50.7 million (including the $66.0 million in net securities litigation
settlement charges) due to lower net loss and adjustments for non-cash items and
a decrease of $ 7.9 million in contributions, net of distributions, to
unconsolidated joint ventures and affiliates. The decrease in cash used in
working capital was primarily due to increases of receivables and contract
assets, net.
Related to the securities litigation settlement discussed in Note 18 of "Notes
to the Condensed Consolidated Financial Statements," we have separately
presented the $129.0 million liability and the associated $63.0 million
insurance receivable in the condensed consolidated statement of cash flows for
the three months ended March 31, 2021 . The liability was paid and the receivable
was collected in October 2021 ; therefore, the impact on operating cash flow
occurred in the fourth quarter of 2021 and there was no impact during the three
months ended March 31, 2022 or 2021.
Investing activities
Cash provided by investing activities of
Financing activities
Cash used in financing activities of$82.9 million for the three months endedMarch 31, 2022 represents a$77.9 million increase when compared to 2021. The change was primarily due to the prepayment of$60.9 million of our term loan as well as repurchases of common stock of$20.2 million . 26
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Derivatives
We recognize derivative instruments as either assets or liabilities in the condensed consolidated balance sheets at fair value using Level 2 inputs. See Note 10 to "Notes to the Condensed Consolidated Financial Statements" for further information. The hedge option and warrant derivative transactions related to the 2.75% Convertible Notes were recorded to equity on our condensed consolidated balance sheets based on the cash proceeds.
Surety Bonds and Real Estate Mortgages
We are generally required to provide various types of surety bonds that provide an additional measure of security under certain public and private sector contracts. AtMarch 31, 2022 , approximately$2.2 billion of our$3.9 billion CAP was bonded. Performance bonds do not have stated expiration dates; rather, we are generally released from the bonds after the owner accepts the work performed under contract. The ability to maintain bonding capacity to support our current and future level of contracting requires that we maintain cash and working capital balances satisfactory to our sureties. Our investments in real estate affiliates are subject to mortgage indebtedness. This indebtedness is non-recourse to Granite but is recourse to the real estate entities. The terms of this indebtedness are typically renegotiated to reflect the evolving nature of the real estate projects as they progress through acquisition, entitlement and development. Modification of these terms may include changes in loan-to-value ratios requiring the real estate entity to repay portions of the debt. The debt associated with our unconsolidated non-construction entities is included in Note 12 of "Notes to the Condensed Consolidated Financial Statements."
Covenants and Events of Default
Our Third Amended and Restated Credit Agreement datedMay 18, 2021 , as subsequently amended (the "Credit Agreement") requires us to comply with various affirmative, restrictive and financial covenants, including the financial covenants described below. Our failure to comply with these covenants would constitute an event of default under the Credit Agreement. Additionally, the 2.75% Convertible Notes are governed by the terms and conditions of the indenture. Our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 2.75% Convertible Notes or our Credit Agreement would constitute an event of default under the 2.75% Convertible Notes indenture or the Credit Agreement. A default under our Credit Agreement could result in (i) us no longer being entitled to borrow under such facility; (ii) termination of such facility; (iii) the requirement that any letters of credit under such facility be cash collateralized; (iv) acceleration of amounts owed under the Credit Agreement; and/or (v) foreclosure on any lien securing the obligations under such facility. A default under the 2.75% Convertible Notes indenture could result in acceleration of the maturity of the notes. The most significant financial covenants under the terms of our Credit Agreement require the maintenance of a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio. As ofMarch 31, 2022 , the Consolidated Leverage Ratio was 2.58, which did not exceed the maximum of 3.00. Our Consolidated Interest Coverage Ratio was 6.07, which was above the minimum of 4.00. Share Repurchase Program As announced onApril 29, 2016 , onApril 7, 2016 , the Board of Directors authorized us to repurchase up to$200.0 million of our common stock at management's discretion (the "2016 authorization"). As part of the 2016 authorization, we established a plan to facilitate common stock repurchases. As announced onFebruary 3, 2022 , onFebruary 1, 2022 , the Board of Directors authorized us to purchase up to$300.0 million of our common stock at management's discretion (the "2022 authorization"). The 2022 authorization replaced the 2016 authorization, including the amount available for repurchase, and no further repurchases will take place under the 2016 authorization. During the three months endedMarch 31, 2022 , we repurchased 611,000 shares under the 2022 authorization. As ofMarch 31, 2022 ,$281.5 million of the authorization remained available. The specific timing and amount of any future repurchases will vary based on market conditions, securities law limitations and other factors.
Website Access
Our website address is www.graniteconstruction.com. On our website we make available, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to theSecurities and Exchange Commission ("SEC"). The information on our website is not incorporated into, and is not part of, this report. These reports, and any amendments to them, are also available at the website of theSEC , www.sec.gov.
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