Good morning. I'm Bill Powell, Chairman of the Board and Director of Granite Construction Incorporated. Welcome to Granite's 2014 Annual Shareholders Meeting, and I now call the meeting to order. During the meeting, we will address the three proposals on your ballot. Mr. James H. Roberts, our President and CEO, will then review the company's business and answer questions from shareholders and bona fide proxy holders. To allow time for all shareholders and proxy holders who may wish to speak during the Q&A period, we have adopted certain ground rules. You will find these procedures on the back of today's agenda, which was on your chair when you came in. Mr. Richard Watts has been appointed Secretary of this meeting to present the proposals to be voted upon and to record the minutes. Mr. Watts is Senior Vice President, General Counsel, and Secretary of the company.
I'd like to also introduce Mr. Andrew M. Wilcox, representing Broadridge Financial Solutions, who has been appointed Inspector of Elections for the meeting. He has signed this customary oath of inspector and will be made part of the minutes of this meeting. If any shareholders or proxy holders present have not registered their presence, please go to the registration desk in the lobby to do so at this time. The Inspector of Elections will determine the number of shares present at the meeting.
While Mr. Wilcox is determining the number of common shares of common stock present at this meeting, I would like to introduce a number of persons at the meeting. Present today are members of the Board of Directors of the company, Mr. Claes Bjork, Mr. James Bradford, Mr. Gary Cusumano, Mr. Bill Dorey, Mr. David Kelsey, Ms. Rebecca MacDonald, Mr. James Roberts, and Mr. Gaddi Vasquez. Also present is Mr. John Eilers of PricewaterhouseCoopers LLP, Granite's independent registered accounting firm. I'll now turn the meeting over to Mr. Watts.
Thank you, Mr. Chairman. A notice of the meeting or a notice regarding the availability of proxy materials was mailed to shareholders beginning April 25th of this year. The notices and the list of registered shareholders of the company at the close of business on April 11th, 2014, which is the record date for this meeting, are available for examination by any shareholder present and by any proxy representing a shareholder. Only holders of common stock on the record date are entitled to vote at this meeting. I'm advised by the Inspector of Elections, Mr. Wilcox, that the holders of no less than 36,400,000 shares, or 93.2% of the stock eligible to vote, are present at the meeting in person and by proxy, filed at or before the meeting.
Therefore, more than the majority of the outstanding common stock is present or represented here today, and a quorum is present. The meeting is authorized to transact business. It is now 10:33 A.M., June 5th, 2014, and the polls are now open for our items of business. They will remain open until all items of business have been presented and discussed. If you have already voted by proxy, you do not need a ballot to vote at this meeting unless you wish to change your vote. If you do need a ballot, please raise your hand at this time. Okay, we will collect and tally the ballots after all the proposals have been presented. At this time, I would like to turn to the business items in the agenda to be voted upon today.
The first order of business is the election of directors, who will hold the office for the ensuing three-year term until their successors are elected and qualified. The Board of Directors consists of nine directors. Today, we will elect three directors, who will hold office until the end of the three-year term in 2017. The Nominating and Corporate Governance Committee, in accordance with its charter, has recommended to the Board of Directors, and the Board of Directors has nominated the following nominees to be directors of the company to serve for the ensuing three-year term: Mr. Gary M. Cusumano, Mr. James H. Roberts, and Mr. Gaddi H. Vasquez. Since there have been no further nominations as provided for in Article Two, Section Seven of Granite's bylaws, nominations are now closed. Ballots have been distributed to those of you who requested them.
Please indicate your votes on the nominees for directors in the space opposite the name of the director or directors you wish to vote for. If you're voting as a proxy for a particular shareholder, please write in the shareholder's name and sign your name as proxy. I will announce the results of the voting after the ballots have been collected and tallied. The next item of business is to consider the proposal to approve, on an advisory basis, the compensation of the named executive officers. Information regarding the compensation of the named executive officers has been presented in our proxy statement, and the proposal is described on page 43 of our proxy statement. Please indicate your vote on the proposal to approve, on an advisory basis, the compensation of the Granite Construction Incorporated named executive officers, as disclosed in our proxy statement.
The next item of business is to ratify the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31st, 2014. Please indicate your vote for ratification of the appointment of PricewaterhouseCoopers to audit the company for the 2014 fiscal year. For those of you who have completed ballots at this meeting, please sign them and pass your ballots to the outside of the aisles for collection.
I believe we've done that. It is now 10:36 A.M., June 5th, 2014, and the polls are now closed for all items of business. We will now hear the report regarding the preliminary results of the elections. Mr. Chairman, based on the preliminary report, Mr. Cusumano, Mr. Roberts, and Mr. Vasquez have received more than the required votes to be elected as the directors of the company to hold office for a three-year term and until their successors are elected and qualified.
Based on this preliminary report, more than the majority of shareholders voted to approve the compensation of the named executive officers, as disclosed in the proxy. Finally, Mr. Chairman, based on the preliminary report, the ratification of the appointment of PricewaterhouseCoopers, LLP, as the company's independent registered public accounting firm, has received more than the required number of votes to be approved. Mr. Chairman, that concludes the report of the preliminary voting results. The final results will be available to all shareholders in a Form 8-K, which will be filed with the SEC no later than June 11th, 2014. With that, I'd like to turn the meeting back over to Mr. Powell.
Thank you, Mr. Watts. Well done. Final matter before us today is to conclude the meeting. All those in favor of concluding the meeting signify as such by saying, "Aye.
Aye.
It carries. Those opposed, say, "No." Meeting is concluded. I'd now like to invite Mr. Roberts to review the company's business, and after his presentation, he and I will be very happy to answer any questions you have about the company business. Mr. Roberts.
Thank you, Bill. Okay, I would like to spend a few minutes, and this will be a very short presentation today. I'm gonna cover more of our vision of where the company's going and some of our strategic themes of strategically what we're trying to do in order to meet our vision. You're gonna hear today some forward-looking statements. Certainly, forward-looking statements are always based on facts that we know today, and they're involved in every one of our presentations. Our foundation is solid. Granite was established in 1922. You're gonna see this podium in front of us here, up on the screen, our nine core values. One thing that's very interesting is the last couple of years, we added a ninth core value, safety.
It's kind of interesting how it took that long to realize that that is one of the core components of our company. I say that because everything begins with safety. In a construction company like ours, we have people exposed to serious potential incidents in the field day-to-day, and our belief is that we want every employee to come home safe from work every single day. We make it personal, we take it personal. When somebody gets hurt in Granite or gets exposed to an environment that potentially they could get hurt, everybody in Granite is informed of it, and we personally approach the subject as if they were just part of our immediate family. We are very proud, five years in a row, one of the world's most ethical companies, as depicted by the Ethisphere Institute.
We are the only U.S.-domiciled construction company to be on that list in 2014. Absolutely proud, five years in a row, and I can tell you our intent is to be on that going into the future as well. So our vision. Our vision is very clear. Our vision is to be one of America's leading infrastructure companies. And when we say infrastructure, that's different than being a construction company. We produce materials, we do construction management work, we do construction work. We do lots of different things in order to build a stronger infrastructure for the Americas. And this is why that is the overriding vision for the company. Some of the major components of that vision is to be the employer and of choice, to be the company of choice for owners, and the company of choice for partners. It starts with your employees.
If you are not the company of choice for your employees, you will not be successful in this business. It comes down to the people that you have working for your company. And if you are not the company of choice for your owners, if they don't want you to work for them, you're not gonna work for them. They have a choice to make, and we want Granite to be their choice. We also want to be the company of choice for our partners, and that includes our joint venture partners on our large work that we do. That includes our vendors, our suppliers. We have to be the best, and we have to be the choice of people who have choices. And in this case, our partners are very important to the success of the company going forward. We want to be the leading U.S. transportation contractor.
Today, we are in the top five. We believe we have the ability to be the top, number one, U.S. transportation contractor. We want to expand our presence into multiple end markets. I'm gonna talk a little bit about that when I talk about our four themes in just a minute. To expand into other markets, what you have up here is a picture of a substation. Expanding into power, expanding into rail, water, wastewater, oil, and gas. That is part of our vision to expand and diversify the company going forward. And to establish a meaningful presence in Canada and the U.S. territories. Currently, we have work north of the border. We are in Toronto, building a large tunnel project. We are in Newfoundland, doing power work. We are in Guam, helping relocate the troops from Okinawa to Guam. We wanna do more of that work.
We believe those are good places for us to do work, good contractual relationships, good owners to work for. And we want to lead the construction industry in sustainability. We are the only horizontal civil contractor in the U.S. that has a defined sustainability plan with metrics of which we judge ourselves how well we are doing on an annual basis. We established our plan in 2010, we revamped it in 2012, and we are updating it significantly in 2014. This is a difference maker. To focus on the sustainability of our company while we focus on sustainability in general, is imperative for the future of the company. Four themes, four strategic themes that will allow us to reach that vision, the four main components of our strategic plan. Transform and grow our vertically integrated business. This is the business where we have aggregates.
We campaign a geographic region, very strong part of our business. The transformational part of it is to be a little more asset light, focus on being able to operate a geographic region without having to overinvest in the assets, to keep yourself a little more agile and mobile. And then the growing part is to take that model further east, grow it geographically. Number two, grow the large projects business. This is our projects in Granite that are $75 million or greater. We have been methodically growing it year to year over the last five years. It is a very strong part of our business. It is in a good, robust market environment, and we want to grow that business as fast as we can do with the growth of our people. What you don't want to do is outpace that business with the capabilities of your people.
You want to keep them in alignment. Number three, diversify. I mentioned earlier, oil and gas, rail, power, water, wastewater. These are things we want to diversify because they have a different funding mechanism with different end markets. I'm gonna talk about funding and transportation in just a minute, because what happens when you have all of your eggs in one basket is you are susceptible to the funding mechanisms, whether they're good or bad, and we've certainly seen some of that in a rocky road over the last decade. And then finally, optimize our business. And that is just darn doing better at what we do every day. And we have started a significant program inside of Granite. It is how we operate our company, and it is through continuous improvement using Six Sigma techniques.
We are focused on doing what we do better and better every single day and challenging ourselves that the status quo is unacceptable. That is done more through a formalized process today than ever before. Instead of being words, it is done through actions and a very methodical process that is data-driven. Our footprint is growing. We are, as you can see here, these are our offices and our plants and our aggregate facilities across the U.S. If you would have looked at this many years ago, you would have focused strictly on the West Coast. You can see how we are over on the East, we're in the Southeast and Northeast as well. Then you couple that with large projects that we have going on around the country, and these are projects that are $75 million or greater.
And then overall, you look at where we are in the U.S. today. Our acquisition of Kenny last year helped us fill out some of the Midwest. We are growing. We believe the geographical diversification is a key play to really balancing our business in the long run. We are growing, we are growing geographically, and we are growing in revenue as well. Last couple of items I want to talk about is long-term funding. Transportation. We are a major transportation contractor in the U.S. We have a highway bill that will expire on September 30th of this year. We have a Highway Trust Fund that is basically insolvent, and this is where your federal gas taxes go to supply the Highway Trust Fund. It will most likely become insolvent by the end of July. Most likely, there will be some kind of a bailout of the general fund.
We'll have to be, we'll have to borrow money from the general fund to fulfill the needs of the Highway Trust Fund. On September 30th, we need a new Highway Bill. Chances are, as we see today, that a new Highway Bill probably will not take place by then. There'll probably be what we call a continuing resolution. The downside to that is that our cities and our states can't plan with a continuing resolution because they'll have short 30-day, 90-day, 120-day windows of which to understand what kind of funding they have from the federal government. As we go forward and we do get a new Highway Bill, there are several things that we need. We need funding at levels equivalent or higher than where they're at today.
We need a long-term bill so people can plan, so our agencies and the people that are delivering the transportation systems can plan long term and create capacity and maintenance issues. And number three, we need a financing mechanism. We need a combination of the private and public working together to finance jobs that may not be funded through our typical funding mechanisms. This is coming. It's right around the corner. You're gonna hear more about it. You're gonna see it in the paper. You're gonna see the Highway Trust Fund's in trouble, and you're probably gonna see the federal government bail them out. And I encourage people that have an interest in the transportation business to stay focused on the Highway Bill. It is something we need in this country. Last slide, guidance.
We gave guidance at the end of the first quarter as to financially where the company is going to be in 2014. Revenue from $2.4 billion-$2.8 billion. Segment profit significantly improving across the board, and with an EBITDA range of margin of 5%-7% of our overall revenue. Slow, steady improvement. As we talk to our investors and our shareholders, as we talk today, the key ingredient to our success is slow, steady improvement, focus on our work every single day, do what we're gonna do, plan our work, and work our plan. That's how you build a strong company that grows methodically over time.
And lastly, you challenge yourself every day through continuous improvement. You challenge yourself that the status quo is unacceptable in an environment that is very dynamic today. We need to stay one step ahead of the competition, and we need to challenge ourselves to do better every day. Thank you, and I will be happy to take questions. Bill is up here. He can take questions, and certainly, we have some board members and experts in the audience here that would be happy to answer your questions as well.
Who has the first question? I'll handle anything on governance. He'll handle the operational stuff.
No questions.
Okay.
Yeah, I'll ask a question. I, when I came on fiscal year, in the past, you talked about projects that were ongoing, in particular, in the transit, and locally, the Carmel River is a big issue. Can you tell me about, want to say anything about what's happening with Carmel River and San Clemente Dam?
Absolutely. I'd be happy to do that. In fact, we just visited yesterday with our Board, or day before yesterday with our Board. The San Clemente Dam reroute, we are doing the work for several agencies in Cal Am, and that is tearing down the San Clemente Dam. That's been in there since the 1920s. The job has started. We're rerouting the San Clemente and Carmel River into one, and then next year we will demolish and remove the San Clemente Dam, and by the end of 2015, beginning of 2016, it will be a common flow, and the river will be rerouted at that time.
We've had a lot of the community up there visiting the job. It's a job that is really well thought out. The community is behind it, and it will take about another two and a half years to complete the project. Does that answer your question okay?
Yeah, pretty much.
Okay.
Any other questions? Yes, please.
Can you comment briefly on whether or not competitors and how they are doing or the current economic situation?
Well, first of all, the question is, can we comment on our competitors? Yes and no. I can certainly give you my opinion of the type of competitors that we have. I can't tell you specifically how well they're doing. Really, we run into several different buckets of competitors. Our large projects business, $75 million or greater, our competitors have changed in structure a little bit. More international players today than we've seen historically. The projects are getting bigger, and therefore, they are really global companies that we're competing with on $400 million-$500 million jobs. The U.S. market is pretty robust in that environment. We have our local business, which is our vertically integrated business, and we deal mostly with regional players as our competitors there.
Jobs $75 million or less, you take this community here, you take the Bay Area, which you might know since you're in Monterey here, there's probably a half a dozen players that we compete with every day that are regional players. And how well they're doing, I think, is dependent upon the market in which they live in. Certain markets are more robust than others. They've had a better time through the economy over the last five years than others. So I think it's really variable. We have 19 business units throughout the U.S., and every time I listen to our group vice presidents, what I hear from them is that every market is different.
So I would tell you that our competitors in those markets are all faring quite differently. Now, the other competitors that we have is in the materials business. That is a business where we take the aggregate out of the ground. We produce specific aggregates, asphalt, and that business has been slow in most of our markets over the last couple of years with a depressed economy, and we're starting to see that pick up. That is a market that feeds really the public and the private sector. So as we see private sector expansion, that materials business will fare better as well.
Again, small local competitors, and then only maybe less than a handful of national-level players in the materials business. Dramatically different portfolios, types of companies. I think the national players have done a little better than the local players. Certainly, if you're in a market that's robust, you've done well, but in most of the materials markets, it's been a struggle over the last couple of years.
Thank you.
Yes?
What is the scourge about the global performance of the industry? It's easy to say if you look right on the industry, but long term, grapples with your argument.
That is correct. Thank you. Great comment. Another question.
Just to follow, I thought it was very interesting what you said about the water project. Can you flesh that out a little bit?
Well, if you think about it, the markets throughout the world have been depressed as well as just the U.S. markets. And so you look at the European competitors, they're considering the U.S. to be a fairly robust environment compared to what they've had over the last five years. And they have capabilities to do a lot of the things that the U.S. wants to do right now. A little more mature environment than the U.S., different types of contractual methods going on today. If you follow Granite over the years, you've seen design-build type, where no longer does the owner just provide you a set of plans, we actually are designing projects now.
We're getting into design-build finance, and this has been going on globally outside of the U.S. for a long time, where now our teams are actually financing projects as well. A lot of the global companies have been doing this for a long time, and so the maturity of the U.S. business is starting to really come in sync with the rest of the world. As that happens, you're gonna see more global players come into the U.S.
You bet.
Any other questions? Yes, sir.
You mentioned two things, data-driven problem solutions and metrics that you use to measure sustainability. Where could a shareholder find reports that demonstrate that data, the results of that data? How could we see the business and the sustainability?
Yeah, you bet. So the question was, with the six core elements of our sustainability plan, and when we set metrics and guidelines, and we measure ourselves against those metrics, where could a shareholder find that? You can find it on our website. So our sustainability plan is available to our shareholders on our website. I can't tell you specifically which buttons to push to get there, but it is on our website, and it is measured annually, and you should be able to do that at any point in time.
I would comment to you that, you know, many industries have been involved in sustainability for quite a number of years. Granite is really leading this construction industry in their efforts in sustainability, and we hope it's gonna be a genuine differentiator for us in a number of places and, projects, as we're selected in the future.
I think it has already. I think it is making a big difference. But please go onto the website and work your way through it, and the sustainability plan is on there, and it's updated annually. And it's actually going through a revision again, so by the end of the year, you're gonna see a more robust sustainability plan as versus what you're gonna see on the website today.
Other questions? If not, that concludes our presentation, question and answer, question and answer session. I'd like to thank all of you for your attendance here today at this meeting and your interest in the company. Thank you very much.
Thank you.