GRANITE CONSTRUCTION INC Commitments Disclosure
20. Commitments, Contingencies and Guarantees
Leases: Minimum rental commitments and minimum royalty requirements under all noncancellable operating leases, primarily quarry property, in effect at December 31, 2018 were (in thousands):
|
Years Ending December 31, |
|
|
|
|
|
2019 |
|
$ |
20,152 |
|
|
2020 |
|
|
17,798 |
|
|
2021 |
|
|
15,897 |
|
|
2022 |
|
|
13,255 |
|
|
2023 |
|
|
7,707 |
|
|
Later years (through 2046) |
|
|
8,709 |
|
|
Total |
|
$ |
83,518 |
|
Operating lease and equipment rental and royalty expense primarily included in cost of revenue in our consolidated statements of operations was $24.3 million, $16.4 million and $18.2 million in 2018, 2017 and 2016, respectively.
Performance Guarantees
We participate in various joint ventures and line item joint ventures under which each partner is responsible for performing certain discrete items of the total scope of contracted work. See Notes 1, 10 and 14 for further details.
Surety Bonds
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 December 31, 2018, approximately $3.2 billion of our contract backlog 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.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2018 | Feb 22, 2019 | Showing above |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 25, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.