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Note 4 - Revisions in Estimates | 9 Months Ended
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Sep. 30, 2021
Notes to Financial Statements |
Revisions in Estimates [Text Block] | 4. Revisions in Estimates Our profit recognition related to construction contracts is based on estimates of transaction price and costs to complete each project. These estimates can vary significantly in the normal course of business as projects progress, circumstances develop and evolve, and uncertainties are resolved. Changes in estimates of transaction price and costs to complete may result in the reversal of previously recognized revenue if the current estimate adversely differs from the previous estimate. In addition, the estimated or actual recovery related to estimated costs associated with unresolved affirmative claims and back charges may be recorded in future periods or may be at values below the associated cost, which can cause fluctuations in the gross profit impact from revisions in estimates. When we experience significant changes in our estimates, we undergo a process that includes reviewing the nature of the changes to ensure that there are no material amounts that should have been recorded in a prior period rather than as revisions in estimates for the current period. For revisions in estimates, generally we use the cumulative catch-up method for changes to the transaction price that are part of a single performance obligation. Under this method, revisions in estimates are accounted for in their entirety in the period of change. There can be no assurance that we will not experience further changes in circumstances or otherwise be required to revise our estimates in the future. In our review of these changes for the three and nine months ended September 30, 2021 and 2020, we did not identify any material amounts that should have been recorded in a prior period. There were no increases from revisions in estimates, which individually had an impact of $5.0 million or more on gross profit, for the periods presented. Decreases for all periods presented were in our Transportation segment except for one project in the Water segment during the nine months ended September 30, 2021 and one project in the Specialty segment during each period in 2020 and the nine months ended September 30, 2021. The projects with decreases from revisions in estimates, which individually had an impact of $5.0 million or more on gross profit, are summarized as follows (dollars in millions except per share data):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Number of projects with downward estimate changes |  |  | 2 |  |  |  | 3 |  |  |  | 5 |  |  |  | 6 |
Amount/range of reduction in gross profit from each project, net |  | $ | 5.7 - 10.9 |  |  | $ | 7.2 - 17.8 |  |  | $ | 5.5 - 16.2 |  |  | $ | 6.5 - 37.6 |
Decrease to project profitability |  |  | 16.6 |  |  |  | 32.2 |  |  |  | 48.2 |  |  |  | 107.5 |
Decrease to net income/increase to net loss |  |  | 13.0 |  |  |  | 21.7 |  |  |  | 37.7 |  |  |  | 72.6 |
Amounts attributable to non-controlling interests |  |  | 5.5 |  |  |  | 8.9 |  |  |  | 10.0 |  |  |  | 26.3 |
Decrease to net income/increase to net loss attributable to Granite Construction Incorporated |  |  | 7.5 |  |  |  | 12.8 |  |  |  | 27.7 |  |  |  | 46.3 |
Decrease to net income/increase to net loss per diluted share attributable to common shareholders (1) |  |  | 0.16 |  |  |  | 0.28 |  |  |  | 0.58 |  |  |  | 1.01 |
(1) The prior period amounts have been adjusted to correct an immaterial disclosure error in the previously issued September 30, 2020 condensed consolidated financial statements. The decreases during the three and nine months ended September 30, 2021 were due to additional costs from acceleration of work coupled with lower productivity and higher costs than originally anticipated. The decreases during the nine months ended September 30, 2021 were also due to unfavorable weather and extended project duration. The decreases during the three and nine months ended September 30, 2020 were due to additional costs from differing site conditions, lower productivity than originally anticipated and unfavorable weather.

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