CORRECTING and REPLACING Granite Reports Third Quarter 2008 Financial Results

WATSONVILLE, Calif.--(BUSINESS WIRE)--

In the release dated October 29, 2008 in the table"CONDENSED CONSOLIDATED BALANCE SHEETS" under the header "Liabilitiesand Shareholders’ Equity," the eighth row should read: Other long-termliabilities (sted Other long-term debt). Also insert after the 11throw in the same section of the same table: Preferred stock, $0.01 parvalue, authorized 3,000,000 shares; none outstanding

    The corrected release reads:    GRANITE REPORTS THIRD QUARTER 2008 FINANCIAL RESULTS

Granite Construction Incorporated (NYSE:GVA) today announced netincome for the third quarter ended September 30, 2008 of $51.7 millionor $1.36 per diluted share, compared with net income of $53.3 million,or $1.28 per diluted share for the same period last year. Gross profitas a percent of revenue for the three months ended September 30, 2008was 16.1%, flat compared to a year ago. Operating income for thequarter was $74.4 million, compared with $76.0 million a year ago.Total revenues for the quarter were $897.8 million compared with$846.3 million a year ago.

"Our team has delivered another impressive quarter," saidPresident and Chief Executive Officer William G. Dorey. "I am verypleased with how our business is performing in the face of the currenteconomic environment. Our results this year reflect the experience anddetermination of our workforce and the value of our business model.The diversity of our customer base, project portfolio and geographicmarkets is enabling us to successfully confront today’s challengingmarket conditions."

General and administrative expenses for the quarter totaled $71.9million or 8.0% of revenue compared with $63.7 million or 7.5% ofrevenue in 2007. The Company continues to focus on reducing generaland administrative expenses and is instituting several programs,including controlling discretionary spending, headcount reductions anda process improvement initiative. These efforts are expected toimprove efficiency and effectiveness throughout the organization. TheCompany expects to see a reduction in general and administrativeexpenses on an absolute dollar basis in 2009.

Total Company backlog at September 30, 2008 was $1.8 billioncompared with $2.3 billion a year ago. Since September 30, 2008,Granite West has been awarded approximately $100.0 million in newprojects. Also not included in September 30, 2008 backlog are threelarge projects in Granite East and one in Granite West totalingapproximately $500.0 million that are pending award by the projectowner.

Minority interest for the quarter ended September 30, 2008 was$0.6 million compared with $6.5 million in the third quarter of 2007.The $5.9 million decrease primarily reflects continued progression andthe effect of changes in estimates related to certain joint ventureprojects.

For the nine-month period ended September 30, 2008, total companyrevenues were $2.0 billion, essentially flat compared to the prioryear. Gross profit as a percent of revenue for the nine months endedSeptember 30, 2008 increased to 17.2% compared with 14.8% last year.Operating income for the total company increased to $158.2 millioncompared with $137.2 million in 2007.

At September 30, 2008, cash and marketable securities totaled$412.4 million and includes approximately $135.0 million of cash andcash equivalents from the Company’s consolidated joint ventures.Historically, the Company has operated under a conservative investmentpolicy and has recently elected to invest even more conservatively inlight of current market conditions. Given the Company’s strong cashposition and approximately $145.6 million available under the existingcredit facility, the Company does not anticipate the need to borrowfunds in the current environment.

    Operating Results by Segment    Granite West

Revenue for the quarter totaled $749.5 million compared with$642.4 million for the same period in 2007. Gross profit as a percentof revenue for the quarter ended September 30, 2008 was 17.8% comparedwith 19.4% last year. Operating income increased $3.6 million for thequarter to $93.4 million compared with $89.8 million for the thirdquarter last year. The increase in operating income for the quarterreflects improved project forecasts and higher than estimatedproductivity.

For the nine-month period ended September 30, 2008, Granite Westrevenues totaled $1.5 billion, essentially flat compared to the prioryear. Gross profit as a percent of revenue for the nine months endedSeptember 30, 2008 was 17.7% compared with 19.3% last year. Operatingincome for Granite West decreased to $155.3 million for the sameperiod compared with $186.5 million in 2007. Year to date operatingresults for the segment were affected by a highly competitive biddingenvironment for construction services and lower demand forhigher-margin construction materials.

Granite East

Revenue for the quarter was $146.9 million compared with $182.6million for the same period last year. Gross profit as a percent ofrevenue for the quarter ended September 30, 2008 increased to 6.6%compared with 1.1% in the same period last year. Operating income forthe quarter increased to $3.7 million compared with an operating lossof $3.2 million for the same period in 2007.

For the nine-month period ended September 30, 2008, Granite Eastrevenue totaled $531.8 million compared with $585.3 million for thesame period last year. Gross margin as a percent of revenue for thenine months ended September 30, 2008 was 16.5% compared with 1.4% lastyear. Operating income for Granite East totaled $67.8 million for thenine-month period compared with an operating loss of $13.4 million forthe same period in 2007. The significant year over year gross marginimprovement and increase in operating income is largely due toimproved performance on several large projects.

Granite Land Company ("GLC")

GLC revenue for the quarter was $1.4 million compared with $21.2million for the same period last year. Gross profit as a percent ofrevenue for the period was 35.2% compared with 45.1% last year.Operating loss for the quarter was $0.2 million compared withoperating income of $8.2 million in the third quarter of 2007.

For the nine-month period ended September 30, 2008, GLC revenuewas $8.1 million compared with $36.6 million in 2007. Gross loss as apercent of revenue for the period was 20.9% compared with a grossprofit of 46.8% last year. Operating loss was $3.8 million for thenine-month period compared with operating income of $14.1 million forthe same period in 2007. The 2008 operating loss reflects a $4.5million pre-tax impairment charge in the second quarter. The 2007results were positively affected by the sale of certain real estatedevelopment projects in the first and third quarter last year.

Outlook

Our expectations for 2008 have improved. We now expect GraniteWest revenue for the year to be in the range of $1.95 to $2.05 billionwith a corresponding gross profit margin percentage between 17.0% and18.0%. Granite East 2008 revenue is now expected to be in the range of$650.0 to $700.0 million with a corresponding gross profit marginpercentage between 17.0% and 18.0%. Minority interest for the companyis expected to be between $38.0 and $43.0 million for the year. Ourlonger term expectation for Granite East gross profit as a percent ofrevenue continues to be in the mid-teens.

Conference Call

Granite will conduct a conference call tomorrow, October 30, 2008,at 11:00 a.m. ET/ 8:00 a.m. PT to discuss the results for the thirdquarter ended September 30, 2008. Access to a live audio webcast isavailable at www.graniteconstruction.com/investor-relations. The liveconference call may be accessed by calling (877) 864-2735 in the U.S.and Canada and (706) 634-7039 for international listeners. Theconference ID for the call is 65146265. The conference call will berecorded and available for replay from approximately two hours afterthe live call through November 15, 2008 by calling (800) 642-1687 or(706) 645-9291. The conference ID for the recording is 65146265.

About Granite

Granite Construction Incorporated is a member of the S&P 400Midcap Index, the Domini 400 Social Index and the Russell 2000.Granite Construction Company, a wholly owned subsidiary, is one of thenation’s largest diversified heavy civil contractors and constructionmaterials producers. Granite Construction Company serves public andprivate sector clients through its offices and subsidiariesnationwide. For the 5th straight year, Granite was named to FORTUNE’SList of 100 Best Companies to Work For. For more information aboutGranite, please visit their website at www.graniteconstruction.com.

Forward-Looking Statements

This press release contains forward-looking statements, within themeaning of Section 27A of the Securities Act of 1933, as amended, andSection 21E of the Securities Exchange Act of 1934, as amended, whichrepresents our management’s beliefs and assumptions concerning futureevents such as statements related to the existence of biddingopportunities and economic conditions on the Company’s future results.In addition, statements in this press release that are not historicalare "forward-looking statements" as in the Private SecuritiesLitigation Reform Act of 1995. Additionally, forward-lookingstatements include statements that can be identified by the use offorward-looking terminology such as "believes," "expects," "appears,""may," "will," "should," "look for," or "anticipates," or the negativethereof or comparable terminology, or by discussions of strategy.

All such forward-looking statements are subject to risks anduncertainties that could cause actual results of operations andfinancial condition and other events, as well as the timing thereof,to differ materially from those expressed or implied in suchforward-looking statements. Specific risk factors include, withoutlimitation, changes in the composition of applicable federal and statelegislation appropriation committees; federal and state appropriationchanges for infrastructure spending; the general state of the economy;job productivity; accuracy of project estimates; weather conditions;competition and pricing pressures; and state referendums andinitiatives. You should not place undue reliance on theseforward-looking statements, which speak only as of the date of thisnews release. You should also understand that many important factorsin addition to those discussed, referred to or incorporated byreference in this press release, could cause our results to differmaterially from those expressed in the forward-looking statements. Inlight of these risks and uncertainties, it is important to be awarethat the forward-looking events discussed in this release may notoccur. We undertake no obligation to revise or update publicly anyforward-looking statements to conform the statement to actual resultsor changes in the Company’s expectations.

For further information regarding risks and uncertainties, pleaserefer to the "Management’s Discussion and Analysis of FinancialCondition and Results of Operation" and "Risk Factors" sections ofGranite’s SEC filings, including, but not limited to, its annualreport on Form 10-K and quarterly reports on Form 10-Q, copies ofwhich may be obtained by contacting Granite’s investor relationsdepartment at (831) 724-1011 or at Granite’s website atwww.graniteconstruction.com.

----------------------------------------------------------------------                  GRANITE CONSTRUCTION INCORPORATED             CONDENSED CONSOLIDATED STATEMENTS OF INCOME          (Unaudited - In Thousands, Except Per Share Data)----------------------------------------------------------------------                           Three Months Ended     Nine Months Ended                              September 30,         September 30,                             2008      2007       2008        2007----------------------------------------------------------------------Revenue  Construction             $771,941  $701,622  $1,755,457  $1,778,638  Material sales            124,478   123,453     283,321     289,655  Real estate                 1,369    21,238       8,142      36,556----------------------------------------------------------------------     Total revenue          897,788   846,313   2,046,920   2,104,849----------------------------------------------------------------------Cost of revenue  Construction              643,531   601,880   1,437,093   1,543,960  Material sales            109,068    96,130     247,959     229,116  Real estate                   887    11,666       9,846      19,466----------------------------------------------------------------------     Total cost of revenue  753,486   709,676   1,694,898   1,792,542----------------------------------------------------------------------Gross profit                144,302   136,637     352,022     312,307General and administrative expenses                    71,933    63,666     198,344     183,133Gain on sales of property and equipment                2,008     2,994       4,564       8,053----------------------------------------------------------------------Operating income             74,377    75,965     158,242     137,227Other income (expense)  Interest income             5,439     7,514      15,087      20,796  Interest expense           (5,303)   (1,884)    (12,871)     (4,998)  Equity in (loss) income   of affiliates             (1,257)    4,037      (1,436)      4,359  Other, net                    549      (391)      9,196      (1,057)----------------------------------------------------------------------     Total other (expense)      income                   (572)    9,276       9,976      19,100----------------------------------------------------------------------Income before provision for income taxes and minority interest           73,805    85,241     168,218     156,327Provision for income tax     21,473    25,437      46,681      47,680----------------------------------------------------------------------Income before minority interest                    52,332    59,804     121,537     108,647Minority interest in consolidated subsidiaries     (594)   (6,504)    (31,058)    (13,750)----------------------------------------------------------------------Net income                 $ 51,738  $ 53,300  $   90,479  $   94,897======================================================================Net income per share:  Basic                    $   1.38  $   1.30  $     2.40  $     2.31  Diluted                  $   1.36  $   1.28  $     2.37  $     2.28Weighted average shares of common stock:  Basic                      37,430    41,106      37,664      41,065  Diluted                    37,975    41,640      38,138      41,587======================================================================

                  GRANITE CONSTRUCTION INCORPORATED                CONDENSED CONSOLIDATED BALANCE SHEETS          (Unaudited - In Thousands, Except Per Share Data)----------------------------------------------------------------------                                            September 30, December 31,                                                2008          2007----------------------------------------------------------------------                                AssetsCurrent assets  Cash and cash equivalents                 $    281,046  $    352,434  Short-term marketable securities               101,112        77,758  Accounts receivable, net                       480,315       397,097  Costs and estimated earnings in excess of   billings                                       34,759        17,957  Inventories, net                                61,342        55,557  Real estate held for sale                       52,165        51,688  Deferred income taxes                           46,233        43,713  Equity in construction joint ventures           45,219        34,340  Other current assets                            65,182        96,969----------------------------------------------------------------------    Total current assets                       1,167,373     1,127,513Property and equipment, net                      522,733       502,901Long-term marketable securities                   30,209        55,156Investment in affiliates                          27,518        26,475Other assets                                      73,696        74,373----------------------------------------------------------------------        Total assets                        $  1,821,529  $  1,786,418======================================================================                 Liabilities and Shareholders’ EquityCurrent liabilities  Current maturities of long-term debt      $     34,886  $     28,696  Accounts payable                               234,126       213,135  Billings in excess of costs and estimated   earnings                                      251,402       275,849  Accrued expenses and other current   liabilities                                   227,611       212,265----------------------------------------------------------------------    Total current liabilities                    748,025       729,945Long-term debt                                   246,487       268,417Other long-term liabilities                       46,178        46,441Deferred income taxes                             18,733        17,945Minority interest in consolidated subsidiaries                                     26,729        23,471Shareholders’ equity:  Preferred stock, $0.01 par value,   authorized   3,000,000 shares; none outstanding                  -             -  Common stock, $0.01 par value, authorized   150,000,000    shares in 2008 and 2007;   issued and outstanding 38,264,058 shares    in   2008 and 39,450,923 shares in 2007                383           395  Additional paid-in capital                      83,041        79,007  Retained earnings                              655,287       619,699  Accumulated other comprehensive (loss)   income                                         (3,334)        1,098----------------------------------------------------------------------    Total shareholders’ equity                   735,377       700,199----------------------------------------------------------------------        Total liabilities and shareholders’         equity                             $  1,821,529  $  1,786,418======================================================================----------------------------------------------------------------------                                            September 30, December 31,Financial Position                              2008          2007----------------------------------------------------------------------  Working capital                           $    419,348  $    397,568  Current ratio                                     1.56          1.54  Debt to total capitalization                      0.28          0.30  Total liabilities to equity ratio                 1.48          1.55======================================================================

----------------------------------------------------------------------                  GRANITE CONSTRUCTION INCORPORATED           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                      (Unaudited - In Thousands)----------------------------------------------------------------------Nine Months Ended September 30,                     2008       2007----------------------------------------------------------------------Operating activities  Net income                                     $  90,479  $  94,897  Adjustments to reconcile net income to net   cash provided by operating activities:    Impairment of real estate held for     development and sale                            4,500          -    Depreciation, depletion and amortization        64,036     60,621    Provision for doubtful accounts                  8,914      1,119    Gain on sales of property and equipment         (4,564)    (8,053)    Change in deferred income taxes                  1,116        (11)    Stock-based compensation                         5,135      4,600    Excess tax benefit on stock-based     compensation                                     (743)    (3,042)    Minority interest in consolidated     subsidiaries                                   31,058     13,750    Equity in loss (income) of affiliates            1,436     (4,359)    Acquisition of minority interest               (16,616)         -  Changes in assets and liabilities, net of the   effects of acquisitions                         (79,854)   (21,955)----------------------------------------------------------------------      Net cash provided by operating activities    104,897    137,567----------------------------------------------------------------------Investing activities  Purchases of marketable securities               (68,732)  (126,464)  Maturities of marketable securities               64,090    140,225  Release of funds for acquisition of minority   interest                                         28,332          -  Additions to property and equipment              (76,098)   (82,744)  Proceeds from sales of property and equipment     12,253     12,765  Acquisition of businesses                        (14,022)   (76,313)  Contributions to affiliates                       (5,345)    (3,772)  Other investing activities                           626      3,459----------------------------------------------------------------------      Net cash used in investing activities        (58,896)  (132,844)----------------------------------------------------------------------Financing activities  Proceeds from long-term debt                       2,660    111,634  Long-term debt principal payments                (15,748)   (49,376)  Cash dividends paid                              (15,081)   (12,572)  Purchase of common stock                         (45,489)    (5,083)  Contributions from minority partners               4,955     30,436  Distributions to minority partners               (37,713)   (22,458)  Acquisition of minority interest                 (11,716)         -  Excess tax benefit on stock-based compensation       743      3,042  Other financing, net                                   -        366----------------------------------------------------------------------      Net cash (used in) provided by financing       activities                                 (117,389)    55,989----------------------------------------------------------------------(Decrease) Increase in cash and cash equivalents   (71,388)    60,712Cash and cash equivalents at beginning of period   352,434    204,893----------------------------------------------------------------------Cash and cash equivalents at end of period       $ 281,046  $ 265,605======================================================================

----------------------------------------------------------------------                  GRANITE CONSTRUCTION INCORPORATED                     Business Segment Information                      (Unaudited - In Thousands)----------------------------------------------------------------------                                  Three Months Ended September 30,                                                        Granite Land                              Granite West Granite East     Company----------------------------------------------------------------------2008Revenue                       $   749,487  $   146,932  $       1,369Gross profit (loss)           $   133,738  $     9,750  $         482Gross profit (loss) as a percent of revenue                  17.8%         6.6%          35.2%Operating income (loss)       $    93,404  $     3,653  $        (191)Operating income (loss) as a percent of revenue                  12.5%         2.5%         -14.0%2007Revenue                       $   642,428  $   182,647  $      21,238Gross profit                  $   124,656  $     2,075  $       9,571Gross profit as a percent of revenue                             19.4%         1.1%          45.1%Operating income (loss)       $    89,755  $    (3,174) $       8,241Operating income (loss) as a percent of revenue                  14.0%        -1.7%          38.8%======================================================================----------------------------------------------------------------------                                  Nine Months Ended September 30,                                                        Granite Land                              Granite West Granite East     Company----------------------------------------------------------------------2008Revenue                       $ 1,506,952  $   531,826  $       8,142Gross profit (loss)           $   267,057  $    87,868  $      (1,704)Gross profit (loss) as a percent of revenue                  17.7%        16.5%         -20.9%Operating income (loss)       $   155,284  $    67,795  $      (3,795)Operating income (loss) as a percent of revenue                  10.3%        12.7%         -46.6%2007Revenue                       $ 1,482,969  $   585,324  $      36,556Gross profit                  $   286,394  $     8,478  $      17,090Gross profit as a percent of revenue                             19.3%         1.4%          46.8%Operating income (loss)       $   186,476  $   (13,359) $      14,120Operating income (loss) as a percent of revenue                  12.6%        -2.3%          38.6%======================================================================----------------------------------------------------------------------                  GRANITE CONSTRUCTION INCORPORATED                               Backlog                      (Unaudited - In Thousands)----------------------------------------------------------------------Backlog by Division  September 30, 2008     June 30, 2008    September 30, 2007----------------------------------------------------------------------  Granite   West    $  915,472    50.3% $1,188,948    55.5% $  950,833    40.7%  Granite   East       906,116    49.7%    952,700    44.5%  1,385,688    59.3%----------------------------------------------------------------------  Total    $1,821,588   100.0% $2,141,648   100.0% $2,336,521   100.0%======================================================================

Source: Granite Construction Incorporated