GRANITE CONSTRUCTION INC

Previous wording

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, opportunities, circumstances, strategy, activities, performance, outlook, outcomes, guidance, capital expenditures, committed and awarded projects, results and strategic actions, 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 based on management's current beliefs, assumptions and estimates. 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.

Current wording

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, opportunities, circumstances, strategy, activities, performance, outlook, outcomes, guidance, capital expenditures, committed and awarded projects, results, the redemption and conversions of our 3.75% Convertible Notes and strategic actions, 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 based on management's current beliefs, assumptions and estimates. 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.

Previous wording

Funding for our public work projects, which account for approximately 85% of our Committed and Awarded Projects (“CAP”), is dependent on federal, state, regional and local revenues. At the federal level, the $1.2 trillion Infrastructure Investment and Jobs Act (“IIJA”) has increased federal highway, bridge and transit funding to its highest level in more than six decades with $550 billion in incremental funding over five years. The increased multi-year spending commitment improved the programming visibility for state and local governments and drove an increase in project lettings that started in 2023 and continued through the date of this filing. With the IIJA ending in September of 2026, discussions are ongoing in Congress concerning a replacement bill.

Current wording

Funding for our public work projects, which account for approximately 80% of our Committed and Awarded Projects (“CAP”), is dependent on federal, state, regional and local revenues. At the federal level, the $1.2 trillion Infrastructure Investment and Jobs Act (“IIJA”) has increased federal highway, bridge and transit funding to its highest level in more than six decades with $550 billion in incremental funding over five years. The increased multi-year spending commitment improved the programming visibility for state and local governments and drove an increase in project lettings that started in 2023 and continued through the date of this filing. With the IIJA ending in September of 2026, discussions are ongoing in Congress concerning a replacement bill.

Previous wording

Our CAP balance continues to be strong with $7.2 billion at the end of the first quarter of 2026. Our CAP is supported by a positive public funding environment and strength in the private markets we serve, which we believe will provide further opportunities for continued CAP growth.

Current wording

Our CAP balance continues to be strong with $7.4 billion at the end of the second quarter of 2026. Our CAP is supported by a positive public funding environment and strength in the private markets we serve, which we believe will provide further opportunities for continued CAP growth.

Previous wording

The following table presents a financial summary for the three months ended March 31, 2026 and 2025:

Current wording

The following table presents a financial summary for the three and six months ended June 30, 2026 and 2025:

Previous wording

Construction revenue for the three months ended March 31, 2026 increased by $151.4 million, or 24.6%, when compared to 2025. This increase was primarily driven by higher CAP entering the quarter, along with $43.1 million of construction revenue from our recently acquired businesses, Warren Paving and Papich Construction, during the three months ended March 31, 2026.

Current wording

Construction revenue for the three and six months ended June 30, 2026 increased by $270.1 million and $421.5 million, or 28.8% and 27.2%, when compared to 2025. These increases were primarily driven by higher CAP entering the quarter and year, along with $98.4 million and $141.5 million of construction revenue from our recently acquired businesses, Warren Paving, Papich Construction, and Kenny Seng Construction during the three and six months ended June 30, 2026, respectively.

Previous wording

Materials revenue for the three months ended March 31, 2026 increased $61.5 million, or 72.4%, when compared to 2025. This increase was primarily driven by materials revenue from our recently acquired businesses, Warren Paving, Papich Construction and Cinderlite, which was $50.3 million for the three months ended March 31, 2026.

Current wording

Materials revenue for the three and six months ended June 30, 2026 increased $59.9 million and $121.3 million, or 31.7% and 44.4%, when compared to 2025. This increase was primarily driven by materials revenue from our recently acquired businesses, Warren Paving, Papich Construction, Cinderlite and Kenny Seng Construction, which was $59.9 million and $110.2 million for the three and six months ended June 30, 2026, respectively.

Previous wording

CAP of $7.2 billion at March 31, 2026 was $199.8 million or 2.9% higher than at December 31, 2025. Significant additions to CAP during the three months ended March 31, 2026 included $495 million for a tactical infrastructure project in Texas, $115 million for a reservoir replacement project in California and $114 million for a highway project in California. All of these projects are in the public sector. These CAP additions were partially offset by the cancellation of a $296 million public sector highway project in California for which the project's expanded scope exceeded available funding.

Current wording

CAP of $7.4 billion at June 30, 2026 was $249.6 million or 3.5% higher than at March 31, 2026. Significant additions to CAP during the three months ended June 30, 2026 included $117 million for a highway expansion project in Utah, $62 million for a data center project in Nevada, $50 million for a bridge project in Nevada, $50 million for a dam replacement project in California, $49 million for an airport runway project in California and $41 million for a roadway improvement project in Florida. Of these projects, the data center project in Nevada and the dam replacement project in California are in the private sector, while the remaining projects are in the public sector.

Previous wording

Non-controlling partners’ share of CAP as of March 31, 2026 and December 31, 2025 was $336.9 million and $361.4 million respectively.

Current wording

Non-controlling partners’ share of CAP as of June 30, 2026, March 31, 2026 and December 31, 2025 was $308.7 million, $336.9 million and $361.4 million respectively.

Previous wording

At March 31, 2026, one contract with remaining CAP of $10 million or more per project had total forecasted losses with remaining revenue of $17.3 million, or 0.2%, of total CAP. Provisions are recognized in the consolidated statements of operations for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue.

Current wording

At June 30, 2026, one contract with remaining CAP of $10 million or more had total forecasted losses with remaining revenue of $13.0 million, or 0.2%, of total CAP. Provisions are recognized in the consolidated statements of operations for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue.

Previous wording

Construction gross profit for the three months ended March 31, 2026 increased by $16.7 million, or 19.6%, when compared to 2025 primarily due to higher revenue and improved project execution across our project portfolio. Construction gross profit as a percent of revenue decreased when compared to the first quarter of the prior year as we recognized a net increase from a revision in estimate due to a claim settlement in the prior year which did not recur.

Current wording

Construction gross profit for the three and six months ended June 30, 2026 increased by $45.0 million and $61.8 million, or 29.3% and 25.8%, when compared to 2025 primarily due to higher revenue and improved project execution across our project portfolio. For the six month period, gross profit margin decreased year-over-year primarily due to a reduction in the favorable impact of claim settlements.

Previous wording

Materials gross profit for the three months ended March 31, 2026 was $7.7 million, compared to a gross loss of $1.6 million for the same period in 2025, reflecting an improvement of $9.3 million. The increased gross profit was primarily driven by higher volumes and sales prices in both aggregates and asphalt. The increase was also driven by gross profit from our recently acquired businesses, Warren Paving, Papich Construction and Cinderlite, of $4.9 million for the three months ended March 31, 2026, which included $4.4 million of purchase accounting-related charges such as step-up depreciation and intangible asset amortization. See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for further information about acquisitions.

Current wording

Materials gross profit for the six months ended June 30, 2026 increased $4.0 million when compared to 2025, despite the impact of severe weather in the southeast in the second quarter and higher production costs associated with quarry development activities in the current year. The increased gross profit was primarily driven by gross profit from our recently acquired businesses, Warren Paving, Papich Construction, Cinderlite and Kenny Seng Construction, of $4.4 million for the six months ended June 30, 2026, which included $9.9 million of purchase accounting-related charges such as step-up depreciation and intangible asset amortization.

Previous wording

SG&A 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, materials facility permits, and costs related to our operational offices that are not allocated to direct contract costs and expenses related to our corporate functions. Other SG&A expenses include travel and entertainment, outside services, information technology, depreciation, occupancy, training, office supplies, changes in the fair market value of our non-qualified deferred compensation plan liability and other miscellaneous expenses. SG&A 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. SG&A expenses for the three months ended March 31, 2026 increased $25.0 million compared to the same period in 2025, primarily due to a $12.5 million increase in stock-based compensation, as well as $7.1 million of higher salaries and related expenses due to increased labor costs. SG&A expenses related to our recently acquired businesses, Warren Paving, Papich Construction and Cinderlite, was $4.9 million.

Current wording

SG&A 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, materials facility permits, and costs related to our operational offices that are not allocated to direct contract costs and expenses related to our corporate functions. Other SG&A expenses include travel and entertainment, outside services, information technology, depreciation, occupancy, training, office supplies, changes in the fair market value of our non-qualified deferred compensation plan liability and other miscellaneous expenses. SG&A 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. SG&A expenses for the three months ended June 30, 2026 increased $21.9 million compared to the same period in 2025, primarily due to $7.8 million of higher salaries and related expenses due to increased labor costs and $8.5 million of increased incentive compensation due to improved financial performance. SG&A expenses for the three months ended June 30, 2026 related to our recently acquired businesses, Warren Paving, Papich Construction, Cinderlite, and Kenny Seng Construction were $8.7 million. SG&A expenses for the six months ended June 30, 2026 increased $46.9 million compared to the same period in 2025, primarily due to $15.1 million of higher salaries and related expenses due to increased labor costs, as well as a $12.4 million increase in stock-based compensation and a $10.1 million increase in incentive compensation, both due to improved financial performance. SG&A expenses for the six months ended June 30, 2026 related to our recently acquired businesses, Warren Paving, Papich Construction, Cinderlite, and Kenny Seng Construction were $13.6 million.

Previous wording

Other costs, net mainly consists of acquisition and integration costs and, in the prior year, legal costs related to the defense of a former Company officer in his civil litigation with the SEC. The decrease of $6.4 million for the three months ended March 31, 2026 was primarily driven by a reduction in legal costs following the resolution of our former officer's civil litigation in January 2026. This was partially offset by increased acquisition and integration costs in the current year. See Note 1 and Note 3 of the “Notes to the Condensed Consolidated Financial Statements” for information on our recent acquisitions.

Current wording

Other costs, net mainly consists of acquisition and integration costs and, in the prior year, legal costs related to the defense of a former Company officer in his civil litigation with the SEC. The decrease of $7.8 million and $14.2 million for the three and six months ended June 30, 2026 was primarily driven by a reduction in legal costs following the resolution of our former officer's civil litigation in January 2026. The decreases were also driven by lower acquisition and integration costs in the current year. See Note 1 and Note 3 of the “Notes to the Condensed Consolidated Financial Statements” for information on our recent acquisitions.

Previous wording

The following table presents other expense, net for the respective periods:

Current wording

The following table presents Other (income) expense, net for the respective periods:

Previous wording

The following table presents the benefit from income taxes for the respective periods:

Current wording

The following table presents the provision for income taxes for the respective periods:

Previous wording

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. See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for information on our recent acquisitions. See Note 14 of “Notes to the Condensed Consolidated Financial Statements” for information on the exchange transactions related to our 3.75% Convertible Notes.

Current wording

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. During the three months ended June 30, 2026, we issued $600.0 million aggregate principal amount of our 6.375% Senior Notes and called for redemption all of our 3.75% Convertible Notes. See Note 14 of “Notes to the Condensed Consolidated Financial Statements” for information on the 6.375% Senior Notes, exchange transactions related to our 3.75% Convertible Notes, the redemption of our 3.75% Convertible Notes, the Conversion Election and the related accounting treatment and effects of the Conversion Election. See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for information on our recent acquisitions.

Previous wording

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 also believe our primary sources of liquidity, access to debt and equity capital markets 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.

Current wording

We believe our primary sources of liquidity will be sufficient to meet our expected working capital needs, capital expenditures, financial commitments, including the redemption and conversions of our 3.75% Convertible Notes, cash dividend payments and other liquidity requirements associated with our existing operations for the next twelve months. We also believe our primary sources of liquidity, access to debt and equity capital markets 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.

Previous wording

As of March 31, 2026, the total unused availability under our Revolver was $584.9 million, resulting from $15.1 million in issued and outstanding letters of credit and no amount drawn under the Revolver. As of the date of this report, $170.0 million was drawn under the Revolver, resulting in total unused availability under our Revolver of $414.9 million. See Note 1 and Note 14 of “Notes to the Condensed Consolidated Financial Statements.”

Current wording

As of June 30, 2026, the total unused availability under our Revolver was $584.9 million, resulting from $15.1 million in issued and outstanding letters of credit and no amount drawn under the Revolver. During the second quarter, we borrowed and repaid $170.0 million on the Revolver.

Previous wording

As of March 31, 2026, one of the conditions permitting the holders of the 3.25% Convertible Notes to convert was met. Our common stock traded above 130% of the $77.88 conversion price for at least 20 trading days during the period of 30 consecutive trading days ended on March 31, 2026 (the last trading day of the calendar quarter). The holders of the 3.25% Convertible Notes have the right to convert through June 30, 2026, at which point we will re-evaluate whether the 3.25% Convertible Notes will continue to be convertible in the subsequent calendar quarter. In the event the holders of the 3.25% Convertible Notes elect to convert a portion, or all of their 3.25% Convertible Notes, the principal amount is required to be settled in cash. As a result, the $373.8 million principal amount has been classified as a current liability as of March 31, 2026 in the condensed consolidated balance sheet. Any conversion premium will be satisfied with cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. At current market prices of our common stock, we do not expect holders to elect to convert their notes as the trading price of the notes in the secondary market exceeds the value a holder would receive upon conversion of such notes. In the unlikely event a holder elects to convert, we would use cash on hand or draw on our Revolver as needed.

Current wording

As of June 30, 2026, one of the conditions permitting the holders of the 3.25% Convertible Notes to convert continued to be met. Our common stock traded above 130% of the $77.88 conversion price for at least 20 trading days during the period of 30 consecutive trading days ended on June 30, 2026 (the last trading day of the calendar quarter). The holders of the 3.25% Convertible Notes have the right to convert through September 30, 2026, at which point we will re-evaluate whether the 3.25% Convertible Notes will continue to be convertible in the subsequent calendar quarter. In the event the holders of the 3.25% Convertible Notes elect to convert a portion, or all of their 3.25% Convertible Notes, the principal amount is required to be settled in cash. As a result, the $373.8 million principal amount remains classified as a current liability as of June 30, 2026 in the Condensed Consolidated Balance Sheets. Any conversion premium will be satisfied with cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. At current market prices of our common stock, we do not expect holders to elect to convert their notes as the trading price of the notes in the secondary market exceeds the value a holder would receive upon conversion of such notes. In the unlikely event a holder elects to convert, we would use cash on hand or draw on our Revolver as needed.

Previous wording

Granite’s portion of CCJV cash and cash equivalents was $96.1 million and $90.6 million as of March 31, 2026 and December 31, 2025, respectively. Excluded from the table above is $30.9 million and $35.0 million as of March 31, 2026 and December 31, 2025, respectively, of Granite’s portion of unconsolidated construction joint venture cash and cash equivalents.

Current wording

Granite’s portion of CCJV cash and cash equivalents was $95.9 million and $90.6 million as of June 30, 2026 and December 31, 2025, respectively. Excluded from the table above is $31.2 million and $35.0 million as of June 30, 2026 and December 31, 2025, respectively, of Granite’s portion of unconsolidated construction joint venture cash and cash equivalents.

Previous wording

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. During the three months ended March 31, 2026, we had capital expenditures of $26.1 million, compared to $32.2 million during the three months ended March 31, 2025. We currently anticipate 2026 capital expenditures to be between approximately $140.0 million and $160.0 million, including approximately $50.0 million in planned strategic materials investments.

Current wording

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. During the six months ended June 30, 2026, we had capital expenditures of $55.9 million, compared to $61.0 million during the six months ended June 30, 2025. We currently anticipate 2026 capital expenditures to be between approximately $140.0 million and $160.0 million, including approximately $50.0 million in planned strategic materials investments.

Previous wording

Cash used in operating activities of $30.9 million for the three months ended March 31, 2026 represents a $34.5 million increase in cash used in operating activities when compared to the same period of 2025. The change was primarily attributable to a $69.2 million decrease in cash provided by working capital, which includes receivables, net contract assets, inventories, other assets, accounts payable and accrued expenses and other liabilities. Partially offsetting this was an increase in distributions from, net of contributions to, unconsolidated construction joint ventures and affiliates of $15.3 million when compared to the same period of 2025. Additionally, net income after adjusting for non-cash items increased $19.3 million.

Current wording

Cash provided by operating activities of $141.5 million for the six months ended June 30, 2026 represents a $136.1 million increase in cash provided by operating activities when compared to the same period of 2025. The change was primarily attributable to an $83.4 million increase in cash provided by working capital, which includes receivables, net contract assets, inventories, other assets, accounts payable and accrued expenses and other liabilities. Additionally, net income after adjusting for non-cash items increased $34.5 million and an increase in distributions from, net of contributions to, unconsolidated construction joint ventures and affiliates of $18.2 million when compared to the same period of 2025.

Previous wording

Cash provided by investing activities of $22.5 million for the three months ended March 31, 2026, compared to cash used in investing activities of $156.3 million for the same period in 2025, represents a $178.8 million increase in cash provided by investing activities. The change was primarily due to $166.6 million less purchases of marketable securities net of maturities and $11.3 million less purchases of property and equipment, net of sales.

Current wording

Cash used in investing activities of $114.4 million for the six months ended June 30, 2026, compared to cash used in investing activities of $207.3 million for the same period in 2025, represents an $92.8 million decrease in cash used in investing activities. The change was primarily due to $221.5 million less purchases of marketable securities net of maturities, $25.0 million collection of note receivable and $7.8 million less purchases of property and equipment, net of sales. This was partially offset by $162.1 million of cash used for the acquisition of Kenny Seng Construction.

Previous wording

Cash used in financing activities of $255.1 million for the three months ended March 31, 2026 represents a $208.5 million increase in cash used in financing activities when compared to the same period of 2025. The increase was primarily driven by $288.5 million of repurchases of a portion of our 3.75% Convertible Notes in the current year. The increase was partially offset by $56.7 million in proceeds from the partial unwind of the capped call transactions and decreased net distributions to non-controlling partners of $26.6 million.

Current wording

Cash provided by financing activities of $320.8 million for the six months ended June 30, 2026 represents a $375.3 million increase in cash provided by financing activities when compared to the same period of 2025. The increase was primarily driven by $600.0 million from the issuance of our 6.375% Senior Notes, $170.0 million of proceeds from the Revolver, $56.7 million in proceeds from the partial unwind of the capped call transactions and $25.5 million of decreased net distributions to non-controlling partners. This was partially offset by $288.5 million of repayments of a portion of our 3.75% Convertible Notes and $170.0 million repayment on the Revolver in the current year.

Previous wording

We recognize derivative instruments as either assets or liabilities in the condensed consolidated balance sheets at fair value using Level 2 inputs. See Note 9 to “Notes to the Condensed Consolidated Financial Statements” for further information. The capped call transactions related to the 3.75% Convertible Notes and 3.25% Convertible Notes were recorded to equity on our condensed consolidated balance sheets based on the cash proceeds. See Note 14 to “Notes to the Condensed Consolidated Financial Statements” for further information.

Current wording

We recognize derivative instruments as either assets or liabilities in the Condensed Consolidated Balance Sheets at fair value using Level 2 or Level 3 inputs. See Note 9 to “Notes to the Condensed Consolidated Financial Statements” for further information. The capped call transactions related to the 3.75% Convertible Notes and 3.25% Convertible Notes were recorded to equity on our Condensed Consolidated Balance Sheets based on the cash proceeds. See Note 14 to “Notes to the Condensed Consolidated Financial Statements” for further information.

Previous wording

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. At March 31, 2026, approximately $4.6 billion of our $7.2 billion CAP was bonded. Performance bonds do not have stated expiration dates; rather, we are generally released from the bonds when the obligations of the underlying contract have been fulfilled. The ability to maintain bonding capacity requires that we maintain cash and working capital balances satisfactory to our sureties.

Current wording

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. At June 30, 2026, approximately $4.4 billion of our $7.4 billion CAP was bonded. Performance bonds do not have stated expiration dates; rather, we are generally released from the bonds when the obligations of the underlying contract have been fulfilled. The ability to maintain bonding capacity requires that we maintain cash and working capital balances satisfactory to our sureties.

Previous wording

Our 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 3.25% Convertible Notes and 3.75% Convertible Notes are governed by the terms and conditions of their respective indentures. Our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 3.25% Convertible Notes, our 3.75% Convertible Notes or our Credit Agreement would constitute an event of default under the 3.25% Convertible Notes indenture, the 3.75% 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) the termination of such facility; (iii) the requirement that any letters of credit under such facility be cash collateralized; (iv) the acceleration of amounts owed under the Credit Agreement; and/or (v) the foreclosure on any collateral securing the obligations under such facility. A default under the 3.25% Convertible Notes indenture or the 3.75% Convertible Notes indenture could result in acceleration of the maturity of the notes.

Current wording

Our 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 following any relevant cure periods would constitute an event of default under the Credit Agreement. The indentures governing our 3.25% Convertible Notes, our 3.75% Convertible Notes and our 6.375% Senior Notes also require us to comply with various covenants. Our failure to comply with these covenants following any relevant cure periods would constitute an event of default under the indentures governing our 3.25% Convertible Notes, our 3.75% Convertible Notes and our 6.375% Senior Notes. Additionally, our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 6.375% Senior Notes, 3.25% Convertible Notes, our 3.75% Convertible Notes or our Credit Agreement would constitute an event of default under the 6.375% Senior Notes indenture, the 3.25% Convertible Notes indenture, the 3.75% 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) the termination of such facility; (iii) the requirement that any letters of credit under such facility be cash collateralized; (iv) the acceleration of amounts owed under the Credit Agreement; and/or (v) the foreclosure on any collateral securing the obligations under such facility. A default under the 6.375% Senior Notes indenture, the 3.25% Convertible Notes indenture or the 3.75% Convertible Notes indenture could result in acceleration of the maturity of the notes.

Previous wording

The financial covenants under the terms of the Credit Agreement require the maintenance of a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio. As of March 31, 2026, we were in compliance with the covenants in the Credit Agreement.

Current wording

The financial covenants under the terms of the Credit Agreement require the maintenance of a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio. As of June 30, 2026, we were in compliance with the covenants in the Credit Agreement and in the indentures governing our notes.

Previous wording

As announced on February 3, 2022, on February 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”). There were no shares and 200 shares repurchased under the 2022 authorization in the three months ended March 31, 2026 and 2025, respectively, and $157.6 million remained available under the 2022 authorization as of March 31, 2026.

Current wording

As announced on February 3, 2022, on February 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”). There were no shares repurchased under the 2022 authorization in the six months ended June 30, 2026 and 2025, and $157.6 million remained available under the 2022 authorization as of June 30, 2026.