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Revisions in Estimates | 3 Months Ended
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Mar. 31, 2024
Quarterly Financial Information Disclosure [Abstract] |
Revisions in Estimates | 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 revisions 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 months ended March 31, 2024 and 2023, we did not identify any material amounts that should have been recorded in a prior period. During the three months ended March 31, 2024, there was one project with an increase from revisions in estimates which had an impact to gross profit of $7.4 million and a reduction of net loss of $5.6 million, none of which was attributable to non-controlling interests. The revision decreased the net loss per diluted share attributable to common shareholders by $0.13. The increase was due to changes in the estimated transaction price related to unresolved contract modifications resulting from revisions to project work plans, permitting and schedule. There were no increases from revisions in estimates, which individually had an impact of $5.0 million or more on gross profit, for the three months ended March 31, 2023. 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 March 31, |  |
|  |  | 2024 |  |  | 2023 |  |  |  |  |  |
Number of projects with downward estimate changes |  |  | 1 |  |  |  | 2 |  |  |  |  |  |  |
Range of reduction in gross profit from each project, net |  | $ | 7.7 |  |  | $ | 6.2 - 11.4 |  |  |  |  |  |
Decrease to project profitability, net |  | $ | 7.7 |  |  | $ | 17.6 |  |  |  |  |  |  |
Increase to net loss |  | $ | 5.8 |  |  | $ | 13.1 |  |  |  |  |  |  |
Amounts attributable to non-controlling interests |  | $ | — |  |  | $ | 5.7 |  |  |  |  |  |  |
Increase to net loss attributable to Granite Construction Incorporated |  | $ | 5.8 |  |  | $ | 7.5 |  |  |  |  |  |  |
Increase to net loss per diluted share attributable to common shareholders |  | $ | 0.13 |  |  | $ | 0.17 |  |  |  |  |  |  |
The decrease during the three months ended March 31, 2024 was due to additional costs related to changes in project duration, lower productivity than originally anticipated and increased labor and materials costs. The decreases during the three months ended March 31, 2023 were due to additional costs related to extended project duration, increased labor and materials costs, lower productivity than originally anticipated and unfavorable weather.

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