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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☑
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Smaller reporting company ☐ | Emerging growth company ☐ |
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☒ 52,025,497. Item 1A. presence. Our public transit ever, the single largest dedicated bridge investment since the construction of the interstate highway system and the largest federal investment in passenger rail since the creation of Amtrak, all in addition to providing for regular annual spending for numerous infrastructure projects. This significant incremental funding has been and continues to be allocated to numerous major projects and is anticipated to be spent over approximately 10 years from the BIL’s control. Although price is a key competitive factor, we believe our strong reputation, long-standing customer relationships and significant level of repeat and referral business have enabled us to achieve a leading position in the marketplace. The majority of work performed by the Specialty Contractors segment is contracted directly with state and local municipal agencies, real estate developers, school districts and other commercial and industrial customers. A significant portion of the segment's work has been, and is expected to continue to be, performed for our Civil and Building segments. Our Specialty Contractors business units Revenue by Business Segment Year Ended December 31, (in thousands) 2017 2016 2015 Civil $ $ $ Building Specialty Contractors Total $ $ $ Civil Segment Revenue by End Market Year Ended December 31, (in thousands) 2017 2016 2015 Mass Transit $ $ $ Bridges Highways Other Total $ $ $ Building Segment Revenue by End Market Year Ended December 31, (in thousands) 2017 2016 2015 Office $ $ $ Hospitality and Gaming Health Care Facilities Mixed Use Municipal and Government Education Facilities Condominiums Industrial and Commercial Other Total $ $ $ Specialty Contractors Segment Revenue by End Market Year Ended December 31, (in thousands) 2017 2016 2015 Mass Transit $ $ $ Mixed Use Industrial and Commercial Education Facilities Condominiums Transportation Health Care Facilities Wastewater Treatment Other Total $ $ $ Year Ended December 31, Revenue by Customer Type 2017 2016 2015 State and Local Agencies % % % Private Owners % % % Federal Agencies % % % Total % % % Backlog by Business Segment As of December 31, (in thousands) 2017 2016 Civil $ % $ % Building % % Specialty Contractors % % Total $ % $ % We estimate that approximately Civil Segment Backlog by End Market As of December 31, (in thousands) 2017 2016 Mass Transit $ % $ % Bridges % % Highways % % Other % % Total $ % $ % Building Segment Backlog by End Market As of December 31, (in thousands) 2017 2016 Health Care Facilities $ % $ % Municipal and Government % % Industrial and Commercial % % Hospitality and Gaming % % Mixed Use % % Education Facilities % % Office % % Condominiums % % Other % % Total $ % $ % Specialty Contractors Segment Backlog by End Market As of December 31, (in thousands) 2017 2016 Mass Transit $ % $ % Mixed Use % % Condominiums % % Industrial and Commercial % % Education Facilities % % Health Care Facilities % % Transportation % % Other % % Total $ % $ % As of December 31, Backlog by Customer Type 2017 2016 State and Local Agencies % % Private Owners % % Federal Agencies % % Total % % Year Ended December 31, Revenue 2017 2016 2015 Fixed price % % % Guaranteed maximum price % % % Unit price % % % Cost plus fee and other % % % % % % As of December 31, Backlog 2017 2016 Fixed price % % Guaranteed maximum price % % Unit price % % Cost plus fee and other % % % % While the construction markets include numerous competitors, especially for small to mid-sized projects, much of the work that we target is for larger, more complex projects where Accordingly, we believe that our environmental liabilities are not material. In addition, we continually evaluate our compliance with all applicable environmental laws and regulations, and we believe that we are in substantial compliance with those laws and regulations. 2023, which is in line with the representation of women in the U.S. construction workforce at large of 10.8%, according to data from the U.S. Bureau of Labor Statistics (“BLS”). Racial and ethnic minorities represented about half of our U.S. construction workforce as of December 31, 2023, which is generally in line with BLS data. occasion when we have a need for senior project executives, the broad professional network of our leadership team often provides strong candidates to fill those needs. We also utilize internal and external operations and cash flows. This may include requiring us to record an expense or reduce revenue that we previously recorded based on our expectations or estimates, requiring us to pay damages or reducing cash collections that we had expected to receive. For example, in April 2023, we received an adverse decision from the U.S. Court of Appeals for the Second Circuit involving a long-standing dispute on a completed mixed-use project in New York, which resulted in a non-cash charge of $83.6 million. In addition, any future adverse judgments could harm our reputation and preclude us from bidding on future projects. awarded. flows have been and could continue to be adversely impacted. Our decision in 2022 to prioritize efforts to seek faster resolution of certain disputed matters, primarily in the Specialty Contractors segment in New York, and convert related balances to cash more quickly has resulted, and may in the future result, in other situations where amounts that we collect are lower than estimated amounts, even in cases where our estimates have taken into account the recent shift in our operational priorities. We require substantial personnel, including construction and project managers and specialty subcontractor resources, to execute and perform on our contracts in backlog. The successful execution of our business strategies is also dependent upon our ability to attract and retain our key officers, as well as adequately plan for their succession. We have, in the past, recorded significant asset impairment charges and could have additional such charges in the future. Owned or Leased by Tutor Perini Business Segment(s) Los Angeles (Sylmar), CA Corporate, Civil & Specialty Contractors Barrigada, Guam Civil Black River Falls, WI Civil Evansville, IN Civil Fort Lauderdale, FL Building & Specialty Contractors Framingham, MA Building Gulfport, MS Building Henderson, NV Building & Specialty Contractors Houston, TX Specialty Contractors Jessup, MD Civil Mount Vernon, NY Specialty Contractors New Rochelle, NY Civil Ozone Park, NY Specialty Contractors Equipment Yards Owned or Leased by Tutor Perini Business Segment(s) Black River Falls, WI Civil Evansville, IN Civil Fontana, CA Civil Civil 2017 2016 High Low High Low Quarter Ended March 31 $ $ $ $ June 30 $ $ $ $ September 30 $ $ $ $ December 31 $ $ $ $ Performance Graph CONSOLIDATED OPERATING RESULTS Year Ended December 31, (In thousands, except per common share data) 2017 2016 2015 2014 2013 Revenue: Civil $ $ $ $ $ Building Specialty Contractors Total Cost of operations Gross profit General and administrative expenses Income from construction operations(c) Other income (expense), net(b) Interest expense Income before income taxes Income tax benefit (provision)(a) Net income Less: Net income attributable to noncontrolling interests — — — — Net income attributable to Tutor Perini Corporation $ $ $ $ $ Earnings per common share:(a)(b)(c) Basic $ $ $ $ $ Diluted $ $ $ $ $ Weighted-average common shares outstanding: Basic Diluted As of and For the Year Ended December 31, (In thousands, except ratios and percentages) 2017 2016 2015 2014 2013 CONSOLIDATED FINANCIAL POSITION Current assets $ $ $ $ $ Current liabilities Working capital $ $ $ $ $ Current ratio Property and equipment, net $ $ $ $ $ Total assets Capitalization: Total debt Stockholders’ equity Total capitalization $ $ $ $ $ Total debt as a percentage of total capitalization % % % % % Ratio of debt to equity Stockholders' equity per common share $ $ $ $ $ OTHER DATA Backlog at year end $ $ $ $ $ New awards Capital expenditures Net cash provided by (used in) operating activities Net cash used in investing activities Net cash (used in) provided by financing activities ITEM 7. The remaining amount of temporary negative project adjustments were individually immaterial and were due to growth in unapproved change orders on various projects that reduced the projects’ percentage of completion and profit margin, which are also expected to reverse over the remaining lives of the projects. construction operations. additional funding for certain mass-transit projects in California; $287 million of additional funding for two large health care projects in California; a $222 million military facilities project at Tinian International Airport in the Commonwealth of the Northern Mariana Islands; and $127 million of additional funding for a mass-transit project in Minnesota. 2022. 2024. Backlog at Revenue Backlog at December 31, New Awards Recognized December 31, (in millions) 2016 in 2017 (a) in 2017 2017 Civil $ $ $ $ Building Specialty Contractors Total $ $ $ $ our Civil, Building and Specialty Contractors segments are discussed below: Year Ended December 31, (in millions) 2017 2016 2015 Revenue $ $ $ Income from construction operations Building Segment Year Ended December 31, (in millions) 2017 2016 2015 Revenue $ $ $ Income (Loss) from construction operations 2022). California. geographic locations. Year Ended December 31, (in millions) 2017 2016 2015 Revenue $ $ $ Income from construction operations 2023 was $144.8 million compared to $168.0 million for 2022, a decrease of $23.2 million. The reduced loss from construction operations was primarily due to the absence of certain prior-year unfavorable adjustments, mostly offset by unfavorable adjustments in 2023. The unfavorable prior-year adjustments included a $46.2 million unfavorable adjustment on the aforementioned transportation project in the Northeast related to the unforeseen cost of project close-out issues, remediation work, extended project supervision and associated labor inefficiencies; the $43.2 million non-cash impact from an unfavorable adjustment related to an adverse appellate court decision involving the electrical component of a completed mass-transit project in New York; a non-cash charge of $17.8 million that increased cost of operations associated with the partial reversal by an appellate court of previously awarded legal damages related to a completed electrical project in New York; the $11.3 million non-cash impact related to settlement negotiations on a mechanical project in New York; and the $11.1 million unfavorable non-cash adjustment related to another mechanical project in New York. The impact from the absence of these prior-year adjustments was mostly offset by unfavorable adjustments in 2023 including $62.2 million of unfavorable non-cash adjustments due to changes in estimates on the electrical and mechanical scope of the above-mentioned completed transportation project in the Northeast associated with changes in the expected recovery on certain unapproved change orders resulting from ongoing negotiations; a non-cash charge of $24.7 million on the educational facilities project in New York that resulted from an adverse court ruling; an unfavorable adjustment of $16.9 million on a multi-unit residential project in New York due to changes in estimates resulting from incremental costs to complete the project and ongoing negotiations on unapproved change orders; and a $9.4 million unfavorable adjustment due to a settlement on a completed mass-transit project in California. more than $40 million. outside professional fees. Year Ended December 31, (in millions) 2017 2016 2015 Other income, net $ $ $ Interest expense Income tax benefit (provision) Capital Resources utilization of net operating loss carryforwards to reduce our cash outflows for income taxes. deposits. cash distributions to noncontrolling interests, partially offset by $2.0 million of cash contributions from noncontrolling interests. During 2022, net cash used in financing activities was $78.9 million, which was primarily driven by net repayment of borrowings of $38.3 million and $47.4 million of cash distributions to noncontrolling interests, partially offset by $8.7 million of cash contributions from noncontrolling interests. 2022. Agreement credit facility (the our 2020 Credit Agreement, refer to Note 7 of the Notes to Consolidated Financial Statements. < or = Agreement. Payments Due (in thousands) Total 1 year or less 2-3 years 4-5 years Over 5 years Debt(a) $ $ $ $ $ Interest on debt(a) Operating leases Pension benefit payments(b) — — Other — — Total $ $ $ $ $ Estimates project charges. receive the expected residual returns of the entity and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, the Company reassesses its initial determination of whether the joint venture is a VIE. performed continuously. names. the Civil reporting unit which indicate potential triggering events that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount. $1.9 million for the next twelve months. 2023. Tutor Perini Corporation 2023 under the sections entitled 2023 under the sections entitled 2023 under the sections entitled 2023 under the sections entitled Exhibit 3. Articles of Incorporation and By-laws 3.1 3.2 Exhibit 4. Instruments Defining the Rights of Security Holders, Including Indentures 4.1 4.2 4.3 4.4 4.5 10.34* Exhibit 23 Exhibit 24 Exhibit 31.1 Exhibit 31.2 Exhibit 32.1 Exhibit 32.2 Exhibit 95 Exhibit 97 Inline XBRL Instance Exhibit 101.SCH Inline XBRL Taxonomy Extension Schema Document. Exhibit 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. Exhibit 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. Exhibit 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. Exhibit 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. Tutor Perini Corporation (Registrant) /s/ Ronald N. Tutor Ronald N. Tutor Chairman and Chief Executive Officer February February Robert C. Lieber Attorney in Fact Raymond R. Oneglia ) Dale A. Reiss ) Dated: February Tutor Perini Corporation 28, 2024 Year Ended December 31, 2017 2016 2015 REVENUE $ $ $ COST OF OPERATIONS GROSS PROFIT General and administrative expenses INCOME FROM CONSTRUCTION OPERATIONS Other income, net Interest expense INCOME BEFORE INCOME TAXES Income tax benefit (provision) NET INCOME $ $ $ LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS — — NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION BASIC EARNINGS PER COMMON SHARE $ $ $ DILUTED EARNINGS PER COMMON SHARE $ $ $ WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: BASIC DILUTED Year Ended December 31, 2017 2016 2015 NET INCOME $ $ $ OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: Defined benefit pension plan adjustments Foreign currency translation adjustments Unrealized gain (loss) in fair value of investments Unrealized loss in fair value of interest rate swap — TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX COMPREHENSIVE INCOME LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS — — COMPREHENSIVE INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ $ $ As of December 31, 2017 2016 ASSETS CURRENT ASSETS: Cash, including cash equivalents of $1,481 and $15,302 ($53,067 and $0 related to VIEs) $ $ Restricted cash Restricted investments — Accounts receivable, including retainage of $535,939 and $569,391 (AR of $42,413 and $0 related to VIEs) Costs and estimated earnings in excess of billings Other current assets Total current assets PROPERTY AND EQUIPMENT: Land Building and improvements Construction equipment Other equipment Less accumulated depreciation Total property and equipment, net ($11,641 and $0 related to VIEs) GOODWILL INTANGIBLE ASSETS, NET OTHER ASSETS TOTAL ASSETS $ $ LIABILITIES AND EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ $ Accounts payable, including retainage of $261,820 and $258,294 (AP of $19,243 and $0 related to VIEs) Billings in excess of costs and estimated earnings ($120,952 and $0 related to VIEs) Accrued expenses and other current liabilities Total current liabilities LONG-TERM DEBT, less current maturities, net of unamortized discounts and debt issuance costs totaling $45,631 and $56,072 DEFERRED TAX LIABILITIES OTHER LONG-TERM LIABILITIES TOTAL LIABILITIES CONTINGENCIES AND COMMITMENTS (Note 6) EQUITY Stockholders' equity: Preferred stock – authorized 1,000,000 shares ($1 par value), none issued — — Common stock – authorized 75,000,000 shares ($1 par value), issued and outstanding 49,781,010 and 49,211,353 shares Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders' equity Noncontrolling interests — TOTAL EQUITY TOTAL LIABILITIES AND EQUITY $ $ Year Ended December 31, 2017 2016 2015 Cash Flows from Operating Activities: Net income $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Amortization of intangible assets Share-based compensation expense Excess income tax benefit from share-based compensation — Change in debt discounts and deferred debt issuance costs Deferred income taxes Loss (gain) on sale of property and equipment Changes in other components of working capital Other long-term liabilities Other, net NET CASH PROVIDED BY OPERATING ACTIVITIES Cash Flows from Investing Activities: Acquisition of property and equipment Proceeds from sale of property and equipment Investments in securities, restricted — — Investments in securities — — Proceeds from maturities of investments in securities — — Change in restricted cash NET CASH USED IN INVESTING ACTIVITIES Cash Flows from Financing Activities: Proceeds from debt Repayment of debt Debt issuance and extinguishment costs — Issuance of convertible notes — — Cash payments related to share-based compensation Excess income tax benefit from share-based compensation — Distributions paid to noncontrolling interests — — Contributions from noncontrolling interests — — NET CASH USED IN FINANCING ACTIVITIES Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ $ $ Accumulated Additional Other Common Paid-in Retained Comprehensive Noncontrolling Stock Capital Earnings Loss Interests Total Balance - December 31, 2014 $ $ $ $ $ — $ Net income — — — — Other comprehensive loss — — — — Tax effect of share-based compensation — — — — Share-based compensation expense — — — — Issuance of common stock, net — — — Balance - December 31, 2015 $ $ $ $ $ — $ Net income — — — — Other comprehensive loss — — — — Tax effect of share-based compensation — — — — Share-based compensation expense — — — — Issuance of common stock, net — — — Convertible note proceeds allocated to conversion option, net — — — — Balance - December 31, 2016 $ $ $ $ $ — $ Net income — — — Other comprehensive income — — — — Share-based compensation expense — — — — Issuance of common stock, net — — — Contributions from noncontrolling interests — — — — Distributions to noncontrolling interests — — — — Balance - December 31, 2017 $ $ $ $ $ $ The accompanying notes are an integral part of these consolidated financial statements. Certain amounts in the consolidated financial statements and notes thereto of prior years have been reclassified to conform to the current year presentation. eliminated. Revenues contract disputes and the achievement of contractual performance criteria, and award or other incentive fees are made during the contract performance period. The Company As of December 31, (in thousands) 2017 2016 Claims $ $ Unapproved change orders Other unbilled costs and profits Total costs and estimated earnings in excess of billings $ $ quantitative impairment assessment during the fourth quarter of each year using a Year Ended December 31, (in thousands, except per common share data) 2017 2016 2015 Net income attributable to Tutor Perini Corporation $ $ $ Weighted-average common shares outstanding, basic Effect of dilutive stock options and unvested restricted stock Weighted-average common shares outstanding, diluted Net income attributable to Tutor Perini Corporation per common share: Basic $ $ $ Diluted $ $ $ Anti-dilutive securities not included above Flows: As of December 31, (in thousands) 2017 2016 Cash and cash equivalents $ $ Joint venture cash and cash equivalents Total cash and cash equivalents $ $ Year Ended December 31, 2017 2016 2015 (in thousands) Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount Before-Tax Amount Tax Benefit Net-of-Tax Amount Before-Tax Amount Tax Benefit (Expense) Net-of-Tax Amount Other comprehensive income (loss): Defined benefit pension plan adjustments $ $ $ $ $ $ $ $ $ Foreign currency translation adjustment Unrealized (loss) gain in fair value of investments Unrealized loss in fair value of interest rate swap — — — Total other comprehensive income (loss) $ $ $ $ $ $ $ $ $ Total other comprehensive income (loss) attributable to Tutor Perini Corporation $ $ $ $ $ $ $ $ $ (in thousands) Defined Benefit Pension Plan Foreign Currency Translation Unrealized (Loss) Gain in Fair Value of Investments Unrealized Gain (Loss) in Fair Value of Interest Rate Swap Accumulated Other Comprehensive Loss Attributable to Tutor Perini Corporation: Balance as of December 31, 2014 $ $ $ $ $ Other comprehensive income (loss) Balance as of December 31, 2015 $ $ $ $ $ Other comprehensive loss before reclassifications Amounts reclassified from AOCI — — — Balance as of December 31, 2016 $ $ $ $ — $ Other comprehensive income (loss) before reclassifications — Amounts reclassified from AOCI — — — Balance as of December 31, 2017 $ $ $ $ — $ Location in Consolidated Year Ended December 31, (in thousands) Statements of Income 2017 2016 2015 Defined benefit pension plan adjustments Various accounts(a) $ $ $ — Income tax benefit Income tax benefit (provision) — Net of tax $ $ $ — statements and disclosures. Year Ended December 31, (in thousands) 2017 2016 2015 (Increase) Decrease in: Accounts receivable $ $ $ Costs and estimated earnings in excess of billings Other current assets (Decrease) Increase in: Accounts payable Billings in excess of costs and estimated earnings Accrued expenses Changes in other components of working capital $ $ $ Cash paid during the year for: Interest $ $ $ Income taxes $ $ $ Year Ended December 31, (in thousands) 2017 2016 2015 United States operations $ $ $ Foreign operations Total $ $ $ Year Ended December 31, (in thousands) 2017 2016 2015 Current expense: Federal $ $ $ State Foreign Total current Deferred (benefit) expense: Federal State Foreign — Total deferred Total (benefit) provision $ $ $ Year Ended December 31, 2017 2016 2015 (dollars in thousands) Amount Rate Amount Rate Amount Rate Federal income tax expense at statutory tax rate $ % $ % $ % State income taxes, net of federal tax benefit Impact of federal tax law change — — — — Officers' compensation Domestic production activities deduction Noncontrolling interest — — — — Reversal of taxes payable due to statute expiration — — — — Other Income tax (benefit) provision $ % $ % $ % The following is a summary of the significant components of the deferred tax assets and liabilities: As of December 31, (in thousands) 2017 2016 Deferred tax assets: Timing of expense recognition $ $ Net operating losses Other, net Deferred tax assets Valuation allowance Net deferred tax assets Deferred tax liabilities: Intangible assets, due primarily to purchase accounting Fixed assets, due primarily to purchase accounting Construction contract accounting Joint ventures Other Deferred tax liabilities Net deferred tax liabilities $ $ As of December 31, (in thousands) 2017 2016 Deferred tax assets $ $ Deferred tax liabilities Net deferred tax liabilities $ $ As of December 31, (in thousands) 2017 2016 2015 Beginning balance $ $ $ Change in tax positions of prior years Change in tax positions of current year Reduction in tax positions for statute expirations — — Ending Balance $ $ $ As of December 31, (in thousands) 2017 2016 2017 Senior Notes $ $ — 2017 Credit Facility — — 2010 Senior Notes — 2014 Revolver — Term Loan — Convertible Notes Equipment financing and mortgages Other indebtedness Total debt Less: Current maturities Long-term debt, net $ $ As of December 31, 2017 As of December 31, 2016 (in thousands) Outstanding Long-Term Debt Unamortized Discount and Issuance Costs Long-Term Debt, as reported Outstanding Long-Term Debt Unamortized Discounts and Issuance Costs Long-Term Debt, 2017 Senior Notes $ $ $ $ — $ — $ — 2010 Senior Notes — — — 2014 Revolver — — — Term Loan — — — Convertible Notes (in thousands) December 31, December 31, Liability component: Principal $ $ Conversion feature Allocated debt issuance costs Amortization of discount and debt issuance costs (non-cash interest expense) Net carrying amount $ $ Equity component: Conversion feature $ $ Allocated debt issuance costs Deferred taxes Net carrying amount $ $ Equipment Financing and Mortgages Year (in thousands) 2018 $ 2019 2020 2021 2022 Thereafter Less: Unamortized discount and issuance costs Total $ For the year ended December 31, (in thousands) 2017 2016 2015 Cash interest expense: Interest on 2017 Senior Notes $ $ — $ — Interest on 2017 Credit Facility — — Interest on 2010 Senior Notes Interest on 2014 Credit Facility Interest on Convertible Notes — Other interest Cash portion of loss on extinguishment — — Total cash interest expense Non-cash interest expense(a): Amortization of debt issuance costs on 2017 Senior Notes — — Amortization of debt issuance costs on 2017 Credit Facility — — Amortization of discount and debt issuance costs on 2010 Senior Notes Amortization of debt issuance costs on 2014 Credit Facility Amortization of discount and debt issuance costs on Convertible Notes — Non-cash portion of loss on extinguishment — — Total non-cash interest expense Total interest expense $ $ $ (a)The combination of cash and non-cash interest expense produces effective interest rates that are higher than contractual rates. Accordingly, the effective interest rates for the 2017 Senior Notes and Year (in thousands) 2018 $ 2019 2020 2021 2022 Thereafter Less: Sublease rental agreements Total $ The Company and certain of its subsidiaries are involved in litigation and based on current information and discussions with the Company’s legal counsel, the ultimate resolution of Alaskan Way Viaduct Matter The Company has a 45% interest in STP. trial to commence on April 27, 2025. before the court. Any awards that were granted under the Plans that are forfeited, cancelled or held back for net settlement will become available to be issued under the Current Plan. CPSU and DCA grants must only be settled in cash. Restricted Stock Units Stock Options Weighted- Weighted- Average Average Grant Date Exercise/ Fair Value (Strike) Price Number Per Share Number Per Share Outstanding as of December 31, 2014 $ $ Granted Expired or forfeited Vested/exercised — — Outstanding as of December 31, 2015 $ $ Granted Vested/exercised Outstanding as of December 31, 2016 $ $ Granted Expired or cancelled Vested/exercised Outstanding as of December 31, 2017 $ $ Unrestricted Stock Units Weighted-Average Grant Year Number Date Fair Value Per Share 2015 68,160 $ 2016 64,603 2017 99,155 option expense was immaterial. 2022 Year Ended December 31, 2017 2016 2015 Total stock options granted Weighted-average grant date fair value $ $ $ Weighted-average assumptions: Risk-free rate % % % Expected life of options(a) Expected volatility(b) % % % Expected quarterly dividends $ — $ — $ — Year Ended December 31, (in thousands) 2017 2016 2015 Interest cost $ $ $ Service cost — Expected return on plan assets Recognized net actuarial losses Net periodic benefit cost $ $ $ Actuarial assumptions used to determine net cost: Discount rate % % % Expected return on assets % % % Rate of increase in compensation N/A N/A N/A �� Percentage of Plan Assets as of December 31, Target Allocation Actual Allocation Asset Category 2018 2017 2016 Cash % % % Equity funds: Domestic International Fixed income funds Total % % % 2024. (in thousands) Year ended December 31, 2018 $ 2019 2020 2021 2022 2023-2027 Total $ Year Ended December 31, (in thousands) 2017 2016 Change in Fair Value of Plan Assets Balance at beginning of year $ $ Actual return on plan assets Company contribution Benefit payments Balance at end of year $ $ Year Ended December 31, (in thousands) 2017 2016 Change in Benefit Obligations Balance at beginning of year $ $ Interest cost Service cost Assumption change (gain) loss Actuarial (gain) loss Benefit payments Balance at end of year $ $ As of December 31, (in thousands) 2017 2016 Funded status $ $ Net unfunded amounts recognized in Consolidated Balance Sheets consist of: Current liabilities $ $ Long-term liabilities Total net unfunded amount recognized in Consolidated Balance Sheets $ $ securities. values. Estimates of fair value of these funds were determined using the information provided by the fund managers and As of December 31, 2017 As of December 31, 2016 Fair Value Hierarchy Fair Value Hierarchy (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ $ — $ — $ $ $ — $ — $ Fixed income funds — — — — Equity funds — — — — $ $ — $ — $ $ $ — $ — $ Closely held funds(a) Equity partnerships Hedge fund investments Total closely held funds(a) Total $ $ — $ — $ $ $ — $ — $ As of December 31, 2017 As of December 31, 2016 Benefit Benefit Pension Equalization Pension Equalization (in thousands) Plan Plan Total Plan Plan Total Projected benefit obligation $ $ $ $ $ $ Accumulated benefit obligation $ $ $ $ $ $ Fair value of plans' assets — — Projected benefit obligation greater than fair value of plans' assets $ $ $ $ $ $ Accumulated benefit obligation greater than fair value of plans' assets $ $ $ $ $ $ The following table Expiration FIP/RP Date of Pension Protections Act Status Company Contributions Collective EIN/Pension Zone Status Pending Or (amounts in millions) Surcharge Bargaining Pension Fund Plan Number 2017 2016 Implemented 2017 (b) 2016 2015 Imposed Agreement The Pension, Hospitalization and Benefit Plan of the Electrical Industry - Pension Trust Fund 13-6123601/001 Green Green N/A $ 16.0 $ 15.8 (a) $ 13.6 (a) No 4/30/2019 Carpenters Pension Trust Fund for Northern California 94-6050970 Red Red Implemented No 6/30/2019 Laborers Pension Trust Fund for Northern California 94-6277608 Yellow Yellow Implemented No 6/30/2019 Northern California Electrical Workers Pension Plan 94-6062674 Green Green N/A No 5/31/2018 Steamfitters Industry Pension Fund 13-6149680/001 Green Green N/A (a) (a) No 6/30/2020 As of December 31, 2017 As of December 31, 2016 Fair Value Hierarchy Fair Value Hierarchy (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents(a) $ $ — $ — $ $ $ — $ — $ Restricted cash(a) — — — — Investments in lieu of retainage(b) — — Total $ $ $ — $ $ $ $ — $ (a)Includes money market funds and short-term investments with less when acquired. 2022: technology. Reportable Segments Specialty Segment Consolidated (in thousands) Civil Building Contractors Total Corporate Total Year ended December 31, 2017 Total revenue $ $ $ $ $ — $ Elimination of intersegment revenue — — Revenue from external customers $ $ $ $ $ — $ Income from construction operations $ $ $ $ $ (a) $ Capital expenditures $ $ $ $ $ $ Depreciation and amortization(b) $ $ $ $ $ $ Year ended December 31, 2016 Total revenue $ $ $ $ $ — $ Elimination of intersegment revenue — — Revenue from external customers $ $ $ $ $ — $ Income from construction operations $ $ $ $ $ (a) $ Capital expenditures $ $ $ $ $ $ Depreciation and amortization(b) $ $ $ $ $ $ Year ended December 31, 2015 Total revenue $ $ $ $ $ — $ Elimination of intersegment revenue — — Revenue from external customers $ $ $ $ $ — $ Income from construction operations $ $ $ $ $ (a) $ Capital expenditures $ $ $ $ $ $ Depreciation and amortization(b) $ $ $ $ $ $ share, after tax) on a multi-unit residential project in New York due to changes in estimates resulting from incremental costs to complete the project and ongoing negotiations on unapproved change orders; and a $9.4 million ($6.9 million, or $0.13 per diluted share, after tax) unfavorable adjustment due to a settlement on a mass-transit project in California. Total assets by segment As of December 31, (in thousands) 2017 2016 Civil $ $ Building Specialty Contractors Corporate and other(a) Total assets $ $ (a) Consists principally of cash, equipment, tax-related assets and insurance-related assets, offset by the elimination of assets related to intersegment revenue. Year Ended December 31, (in thousands) 2017 2016 2015 Revenue: United States $ $ $ Foreign and U.S. territories Total revenue $ $ $ As of December 31, (in thousands) 2017 2016 Assets: United States $ $ Foreign and U.S. territories Total assets $ $ Year Ended December 31, (in thousands) 2017 2016 2015 Income from construction operations $ $ $ Other income, net Interest expense Income before income taxes $ $ $ the existing lease, which runs through July 2038). 2021. (in thousands, except per share amounts) First Second Third Fourth Year Ended December 31, 2017 Quarter Quarter Quarter Quarter Revenue $ $ $ $ Gross profit Income from construction operations Income before income taxes Net income Net income attributable to Tutor Perini Corporation Earnings per common share: Basic $ $ $ $ Diluted $ $ $ $ (in thousands, except per share amounts) First Second Third Fourth Year Ended December 31, 2016 Quarter Quarter Quarter Quarter Revenue $ $ $ $ Gross profit Income from construction operations Income before income taxes Net income Net income attributable to Tutor Perini Corporation Earnings per common share: Basic $ $ $ $ Diluted $ $ $ $Exchange Act). Yes ☐ No ☑$1,116,725,095$262,626,779 as of June 30, 2017,2023, the last business day of the registrant’s most recently completed second fiscal quarter.21, 201822, 2024 was 49,791,010.Portions of the definitive proxy statement relating to the registrant’s annual meeting of stockholders are incorporated reference into Part III of this Annual Report on Form 10-K.10-K, to the extent not set forth herein, is incorporated herein by reference to the registrant’s definitive proxy statement relating to the Annual Meeting of Shareholders to be held in 2024, which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates.2017PAGE PAGEPART I.Item 1.3 11 15 16 16 16 17 20 28 28 28 29 31 31 31 31 31 31 32 34 2Tutor Perini Corporation, formerly known as Perini Corporation, was incorporated in 1918 as a successor to businesses that had been engaged in providing construction services since 1894. based on revenue as ranked by Engineering News-Record (“ENR”),offering diversified general contracting, construction management and design-build services to private customers and public agencies throughout the world. The Company was formed through the 2008 merger between Tutor-Saliba Corporation and Perini Corporation (“Perini”) and our legacy dates to 1894, when Perini's predecessor businesses began providing construction services. Our corporate headquarters are in Los Angeles (Sylmar), California, and we have various other principal offices throughout the United States and its territories (see Item 2. Propertiesfor a listing of our major facilities). Our common stock (“Common Stock”) is listed on the New York Stock Exchange under the symbol “TPC.” We are incorporated in the Commonwealth of Massachusetts.2017,2023, we performed work on approximately 1,500 construction projects.In 2017, ENR ranked Tutor Perini as the ninth largest domestic contractor. past and current performance on several of the country’s largest mass-transit and transportation projects, such as Newark Liberty International Airport Terminal A (“Newark Airport Terminal A”), various components of the East Side Access project in New York City, the Minneapolis Southwest Light Rail project (also known as the METRO Green Line Extension), the California High-Speed Rail System, the Alaskan Way Viaduct Replacement (SR 99)(the “SR 99”) project in Seattle, McCarran International Airport Terminal 3 in Las Vegas, major portions of the Red Line and Purple Line subway segments of the Los Angeles subwayMetro system, and the San Francisco Central Subway extension to Chinatown. We are also recognized as one of the leadingmajor building contractors in the United States, as evidenced by our performance on several of the country’s largest building development projects, including CityCenter and the Cosmopolitan in Las Vegas and Hudson Yards in New York City.SinceCity, the 2008 merger between our predecessor companies, Tutor-Saliba Corporation (“Tutor-Saliba”)CityCenter complex and Perini Corporation, wethe Cosmopolitan Resort and Casino, both in Las Vegas, and several major corporate office buildings in northern California for prominent technology companies.experienced significant growth supportedbeen augmented by our increased size, scale, bonding capacity, access to broader geographic regions, expanded managementvertical integration capabilities, complementary assets and particular expertise in large, complex projects. In 2010 and 2011,which we expanded vertically and geographicallyestablished more than a decade ago through the strategic acquisitions of seven companies with demonstrated successvarious business entities specializing in their respective markets. These acquisitions further strengthenedelectrical, mechanical, plumbing, HVAC and other services that enhanced our market capabilities and expanded our geographic presence in our Building and Civil segments and also significantly increased our specialty contracting capabilities. In 2011, we completed an internal reorganization of our reporting segments with the creation of the Specialty Contractors segment, which we describe below. acquisitions have enabled us to provide customers with a vertically integrated service offering. This vertical integration is a unique capability and competitive advantage that allows us to self-perform a greater amount of work than our competitors. Our vertical integrationIt also increases our competitiveness in bidding and our efficiency in managing and executing large, complex projects. It alsoprojects, and provides us with significant cross-selling opportunities across a broad geographic footprint.most of theseveral major geographic regions of the United States. Our civil contracting services include construction and rehabilitation of highways, bridges, tunnels, mass-transit systems, military facilities, and water management and wastewater treatment facilities.comprisedcomposed of the Company’s legacy heavy civil construction operations (civil operations of our predecessors, Tutor-Saliba Corporation, its subsidiary Black Construction, and Perini, Corporation), as well as our acquired companies, Frontier-Kemper Constructors (“Frontier-Kemper”), Lunda Construction and Becho. The Company’s legacyOur heavy civil units operate primarily on the West Coast and East CoastCoasts of the United States and are engaged in a variety of large mass-transit, transportation,tunneling, bridge and highway projects. Black Construction is the largest contractor in Guam and provides a variety of heavy civil, building, mechanical and electrical construction services throughout the Asia-Pacific region and in other strategic military locations. Frontier-Kemper is a heavy civil contractor engaged in the construction of tunnels for highways, railroads, subways and rapid transit systems; the construction of shafts and other facilities for water supply, wastewater transport and hydroelectric projects; and the development and equipping of mines with innovative hoisting, elevator and vertical conveyance systems. Lunda Construction is a heavy civil contractor specializing in the construction, rehabilitation and maintenance of bridges, railroads and other civil structures throughout the United States. Becho is engaged in drilling, foundation and excavation support for shoring, bridges, piers, roads and highway projects, primarily in the southwestern United States. We believe that the Company has benefitted from these acquisitions by an expanded geographic presence, enhanced civil construction capabilities and the addition of experienced management with proven, successful track records.request forbest value proposal, where contracts are awarded based on a combination of technical qualifications, proposed project team, schedule, past performance on similar projects and price.and outstanding record of performance on challenging civil works projects, and vertical integration capabilities often enable us to pre-qualify for projects in situations where smaller, less diversified contractors are unable to meet the qualification requirements. We believe this is a competitive advantage that allows us to self-perform a greater amount of work and makes us an attractive partner onideal lead contractor for the largest, most complex infrastructure projects and on prestigious design-build, or DBOM (design-build-operate-maintain) or P3 (public-private partnership)design-build-operate-maintain and public-private partnership projects.In its 2017 rankings, ENR ranked us as the nation’s third largest domestic heavy contractor and fourth largest contractor in the transportation market.We believe the Civil segment provides us with significant opportunities for growth due to the age and condition of existing infrastructure coupled with large government funding sources aimed at the replacement and reconstruction of aging U.S. infrastructure and popular, often bipartisan, support from the public and elected officials for infrastructure improvement programs. Funding for major civil infrastructure projects is typically provided through a combination of one or more of the following: local, regional, state and federal loans; grants; other direct allocations sourced through tax revenue; bonds; user fees; and, for certain projects, private capital.have completed or are currently working on or have completed some of the most significant civil construction projects in the United States. For example, we are currently workingcontinuing to work on various portions of the East Side Access project in New York City, the first phase of the California High-Speed Rail project, the Alaskan Way Viaduct Replacement (SR 99)Purple Line Segments 2 and 3 subway expansion projects in Los Angeles and the Minneapolis Southwest Light Rail project. In addition, we have completed other major projects, including various components of the East Side Access project in Seattle,New York City; the Purple Line Segment 2 expansion project in Los Angeles,Newark Airport Terminal A project; the San Francisco Central Subway extension to Chinatown,Chinatown; the SR 99 project in Seattle; the platform over the eastern rail yard and the Amtrak tunnel at Hudson Yards in New York City, andCity; the rehabilitation of the Verrazano-Narrows Bridge in New York. We have also completedYork; and runway reconstruction projects at the John F. Kennedy International Airport in New York, the Los Angeles International Airport theand Fort Lauderdale-Hollywood International Airport,Airport.New Irvington TunnelCivil segment provides us with significant opportunities for growth due to the condition of existing infrastructure coupled with large government funding sources dedicated to the replacement and reconstruction of aging U.S. infrastructure. In addition, infrastructure programs generally garner popular, bipartisan support from the public and elected officials due to their favorable long-term economic benefits, including significant job creation. Funding for major Civil segment infrastructure projects is typically provided through a combination of one or more of the following: local, regional, state and federal loans and grants; other direct allocations sourced through tax revenue; bonds; user fees; and, for certain projects, private capital.Fremont, California,new spending for improvements to the Caldecott Tunnel Fourth Bore project near Oakland, Californiacountry’s surface-transportation network and express toll lanes along I-95enhancements to core infrastructure. The BIL initiated the largest federal investment in Maryland.a number ofseveral specialized building markets for private and public works customers, including hospitality and gaming, transportation, health care, commercial offices, government facilities, sports and entertainment, education, correctional and detention facilities, biotech, pharmaceutical, industrial and high-tech.technology. We believe the success of the Building segment results from our proven ability to manage and perform large, complex projects with aggressive fast-track schedules;schedules, elaborate designs;designs, and advanced mechanical, electrical and life safety systems, while providing accurate budgeting and strict quality4The Building segment is comprised of several operating units that provide general contracting, design-build, preconstruction and construction services in various regions of the United States. Tutor Perini Building Corp. focuses on large, complex building projects nationwide, including significant projects in the hospitality and gaming, commercial office, education, government facilities, and multi-unit residential markets. Rudolph and Sletten focuses on large, complex projects in California in the health care, commercial office, technology, industrial, education, and government facilities markets. Roy Anderson Corp. provides its services, including disaster rapid response services, to public and private customers primarily throughout the southeastern United States. Perini Management Services provides diversified construction and design-build services internationally to U.S. government agencies, as well as to surety companies and multi-national corporations. We believe that our expertise and strong résumé of notable projects positions us well to win additional large, complex building projects.In its 2017 rankings, ENR ranked us as the ninth largest domestic building contractor. have recently completed, or are currently working on or have completed various large private and public building projects across a wide array of building end markets, including commercial offices, multi-unit residential, health care, hospitality and gaming, transportation, education, and entertainment.markets. Specific projects include athe Brooklyn Jail project in New York City; Newark Airport Terminal A; the LAX Airport Metro Connector Transit Station in Los Angeles, California; three large corporate office buildingbuildings in northern California for prominent technology companies; a confidential technology customer; Tower C (commercial)commercial office tower and Tower D (multi-unit residential)a multi-unit residential tower, both at Hudson Yards in New York City; the WashingtonCedars-Sinai Replacement Hospital expansion in Fremont,Marina Del Rey, California; various Kaiser Permanente hospital buildings throughout California; the Graton RancheriaChoctaw Casino and Resort and Casino in Rohnert Park, California;Durant, Oklahoma; the Pechanga Resort and Casino expansion in Temecula, California; the Maryland Live! Casino expansionO Street Government Office Building in Hanover, Maryland; the Broadway Plaza retail development in Walnut Creek, California; Kaiser Hospital Buildings in San Leandro and Redwood City,Sacramento, California; and courthouses in San Bernardino and San Diego, California and Broward County, Florida. As a result of our reputation and track record, we were previously awarded and completed contracts for several marquee projects in the hospitality and gaming market,projects in Las Vegas, including the Resorts World New YorkCityCenter complex, the Cosmopolitan Resort and Casino in Jamaica, New York, as well as CityCenter, the Cosmopolitan,and the Wynn Encore Hotel, Trump International Hotel and Tower, Paris Las Vegas and Planet Hollywood in Las Vegas. The aboveHotel. These projects span a wide array of building end markets and illustrate our Building segment’s résumé of successfully completed large-scale public and private projects. and pneumatically placed concrete for a full range of civil and building construction projects in the industrial, commercial, hospitality and gaming, and mass-transit end markets. This segment provides unique strengths and vertically integrated service capabilities that position us as a full-service contractor with greater control over project bids and costs, scheduled work, project delivery and risk management.comprisedcomposed of several operating units that provide unique services in various regions of the United States. Five Star Electric has established itself asCorp. (“Five Star”) is an industry leader and is one of the largest electrical contractors in New York City. Five Star Electric provides construction services, in the electrical sector, including power, lighting, fire alarm, security, telecommunications, low voltage and wireless systems to both the public and private sectors. These services are provided across end markets that include multi-unit residential, hotels, commercial offices, industrial, mass transit, education, retail, sports and entertainment, health care and water treatment. Fisk Electric (“Fisk”) covers many of the major commercial, transportation and industrial electrical construction markets in California and the southern United States, with the ability to cover other attractive markets nationwide.technologythe design and the development of electrical and technology systems for major projects spanning a broad variety of project types, including commercial office buildings, sports arenas, hospitals, research laboratories, hotels and casinos, convention centers, manufacturing plants, refineries, and water and wastewater treatment facilities. WDF, Nagelbush and Desert Mechanical each provide mechanical, plumbing, HVAC and fire protection services to a range of customers in a wide variety of markets, including transportation, commercial/industrial, schools and universities and residential. WDF is one of the largest mechanical contractors servicingserving the New York City metropolitan region. Nagelbush operates primarily in Florida and Desert Mechanical operates primarily in the western United States. Superior Gunite specializes in pneumatically placed structural concrete utilized in infrastructure projects nationwide, such as bridges, dams, tunnels and retaining walls.In its 2017 rankings, ENR ranked us as the fifth largest electrical contractor1, twelfth largest mechanical contractor1 and tenth largest specialty contractor1 in the United States. Through Five Star Electric and WDF, collectively, we are also the largest specialty contractor in the New York City metropolitan area.1This ranking represents the collective revenue of the Company’s specialty contracting subsidiaries as reported to ENR.5 have recently completed, or are currently working on or have completed various portionscomponents of the East Side Access project in New York City, upgrades and rehabilitations at various New York City public housing facilities, and various projects at the World Trade Center and at Hudson Yards in New York City, two signal system modernization projects in New York City and electrical work for the new hospital at the University of Texas Southwestern Medical Center in Dallas. ThisCity. The Specialty Contractors segment hasis also supported, or is currently supporting or has supported several large projects in our Civil and Building segments, including the Alaskan Way Viaduct Replacement (SR 99)Purple Line Segments 2 and 3 subway expansion projects in Los Angeles; Newark Airport Terminal A; the California High Speed Rail project in central California; the SR 99 project in Seattle; the San Francisco Central Subway extension to Chinatown; McCarran International Airport Terminal 3 in Las Vegas; the Resorts World New York Casino in Jamaica, New York; the Caldecott Tunnel Fourth Bore project near Oakland, California; and several marquee projects in the hospitality and gaming market,projects in Las Vegas, including the CityCenter complex, the Cosmopolitan Resort and Casino, and the Wynn Encore Hotel, Trump International Hotel and Tower, and Planet Hollywood in Las Vegas.The majority of work performed byHotel.Specialty Contractors segment is contracted directly with state and local municipal agencies, real estate developers, general contractors, school districts and commercial and industrial customers. A smaller, but growing, component of its work is performed for our Civil and Building segments.Markets and CustomersWe provide diversified construction services to a variety of end markets and customers. The following tables set forth certain reportable segment information relating to the Company’s operations for the years ended December 31, 2017, 2016 and 2015.1,602,175 1,668,963 1,889,907 1,941,325 2,069,841 1,802,535 1,213,708 1,234,272 1,228,030 4,757,208 4,973,076 4,920,472 733,059 547,913 450,436 432,177 533,762 662,553 250,850 290,745 388,963 186,089 296,543 387,955 1,602,175 1,668,963 1,889,907 470,017 441,591 226,928 430,757 216,224 250,757 264,403 235,005 164,963 156,497 163,454 112,737 149,225 262,022 335,762 142,784 157,808 186,944 106,513 193,755 125,949 70,747 271,480 266,921 150,382 128,502 131,574 1,941,325 2,069,841 1,802,535 6279,524 204,398 107,120 212,780 159,286 96,072 177,605 186,769 164,480 131,606 80,476 195,647 123,152 239,937 266,648 96,715 164,468 149,971 80,456 60,233 40,228 26,709 58,479 73,094 85,161 80,226 134,770 1,213,708 1,234,272 1,228,030 47 49 55 46 45 40 7 6 5 100 100 100 State and Local Agencies. Our state and local government customers include state transportation departments, metropolitan authorities, cities, municipal agencies, school districts and public universities. We provide services to our state and local customers primarily pursuant to contracts awarded through competitive bidding processes. Our building construction services for state and local government customers have included judicial and correctional facilities, schools and dormitories, health care facilities, convention centers, parking structures and other municipal buildings. The vast majority of our civil contracting and building construction services are provided in locations throughout the United States and its territories.Private Owners. Our private customers include real estate developers, health care companies, technology companies, hospitality and gaming resort owners, Native American sovereign nations, public corporations and private universities. We provide services to our private customers through negotiated contract arrangements, as well as through competitive bids.Federal Agencies. Our federal government customers include the U.S. State Department, the U.S. Navy, the U.S. Army Corps of Engineers, the U.S. Air Force and the National Park Service. We provide services to federal agencies primarily pursuant to contracts for specific or multi-year assignments that involve new construction or infrastructure repairs or improvements. A portionbreakdown of our revenue from federal agencies is derived from projects in overseas locations, which we expect to continue for the foreseeable future as a result of our experienceby segment, end market, customer type and strong relationships with federal agencies, together with anticipated expenditures for defense, diplomatic and security-related construction work.Most federal, state and local government contracts contain provisions that permit the termination of contracts, in whole or in part, for the convenience of the government, among other reasons.For additional information on revenue and total assets by geographic location,contract type, see Note 123 of the Notes to Consolidated Financial Statements.7Table In addition, financial information about geographic areas is discussed in Note 14 of Contentswe believe adequate funding is in place). As a result, we believe our backlog is firm, and although cancellations or scope adjustments may occur, historically they have not been material. Our backlog by segment, end market and customer type is presented in the following tables:4,118,243 57 2,672,126 43 1,701,378 23 1,981,193 32 1,463,813 20 1,573,818 25 7,283,434 100 6,227,137 100 $3.6$4 billion, or 49%approximately 40%, of our backlog as of December 31, 20172023 will be recognized as revenue in 2018.2,562,725 62 1,853,117 69 617,084 15 297,810 11 480,918 12 379,630 14 457,516 11 141,569 6 4,118,243 100 2,672,126 100 As of December 31, (in thousands) 2023 2022 Backlog by business segment: Civil $ 4,240,684 42 % $ 4,416,340 56 % Building 4,177,452 41 % 2,223,601 28 % Specialty Contractors 1,740,311 17 % 1,289,172 16 % Total backlog $ 10,158,447 100 % $ 7,929,113 100 % 377,768 22 192,280 10 332,073 20 206,164 10 252,081 15 74,787 4 229,220 13 517,017 26 162,291 10 249,088 13 105,585 6 168,634 9 101,306 6 342,034 17 49,427 3 169,366 9 91,627 5 61,823 2 1,701,378 100 1,981,193 100 As of December 31, (in thousands) 2023 2022 Civil segment backlog by end market: Mass transit (includes certain transportation and tunneling projects) $ 2,744,006 64 % $ 2,891,711 65 % Military facilities 793,477 19 % 778,318 18 % Bridges 282,467 7 % 298,203 7 % Power and energy 199,639 5 % 233,768 5 % Commercial and industrial sites 182,703 4 % 149,316 3 % Other 38,392 1 % 65,024 2 % Total Civil segment backlog $ 4,240,684 100 % $ 4,416,340 100 % 780,457 53 612,688 39 128,669 9 239,763 15 115,612 8 153,354 10 107,927 7 130,028 8 96,533 7 83,897 5 66,537 5 101,494 6 58,819 4 105,990 7 109,259 7 146,604 10 1,463,813 100 1,573,818 100 866 57 26 36 8 7 100 100 Types of ContractsThe contracting and management services we provide consist of planning and scheduling the manpower, equipment, materials and subcontractors required for the timely completion of a project in accordance with the terms, plans and specifications contained in a construction contract. We provide these services by entering into traditional contracting arrangements as follows:·Fixed price or lump sum contracts are most commonly used for projects in the Civil and Specialty Contractors segments and generally commit the Company to provide all of the resources required to complete a project for a fixed sum. Usually, fixed price contracts transfer more risk to the Company, but offer the opportunity for greater profits.As of December 31, (in thousands) 2023 2022 Building segment backlog by end market: Government $ 2,819,078 67 % $ 755,095 34 % Health care facilities 785,657 19 % 565,899 25 % Education facilities 344,962 8 % 389,978 18 % Mass transit (includes transportation projects) 153,665 4 % 299,837 13 % Other 74,090 2 % 212,792 10 % Total Building segment backlog $ 4,177,452 100 % $ 2,223,601 100 % ·Guaranteed maximum price (“GMP”) contracts provide for a cost plus fee arrangement up to a maximum agreed upon price. These contracts place risks on the Company for amounts in excess of the GMP, but may permit an opportunity for greater profits than under cost plus fee contracts through sharing agreements with the owner on any cost savings that may be realized. Services provided by our Building segment to various private customers are often performed under GMP contracts.·Unit price contracts are most prevalent for projects in the Civil and Specialty Contractors segments and generally commit the Company to provide an undetermined number of units or components that comprise a project at a fixed price per unit. This approach shifts the risk of estimating the quantity of units required to the project owner, but the risk of increased cost per unit is borne by the Company, unless otherwise allowed for in the contract.As of December 31, (in thousands) 2023 2022 Specialty Contractors segment backlog by end market: Government $ 783,653 45 % $ 154,868 12 % Mass transit (includes certain transportation and tunneling projects) 626,826 36 % 631,999 49 % Multi-unit residential 90,843 5 % 142,516 11 % Commercial and industrial facilities 78,682 5 % 121,305 9 % Water 64,329 4 % 122,169 9 % Health care facilities 60,272 3 % 62,133 5 % Other 35,706 2 % 54,182 5 % Total Specialty Contractors segment backlog $ 1,740,311 100 % $ 1,289,172 100 % ·Cost plus fee contracts are used for many projects in the Building and Specialty Contractors segments. Cost plus fee contracts include cost plus fixed fee contracts and cost plus award fee contracts. Cost plus fixed fee contracts provide for reimbursement of approved project costs plus a fixed fee. Cost plus award fee contracts provide for reimbursement of the project costs plus a base fee, as well as an incentive fee based on cost and/or schedule performance. Cost plus fee contracts serve to minimize the Company’s financial risk, but may also limit profits.As of December 31, 2023 2022 Backlog by customer type: State and local agencies 76 % 65 % Private owners 13 % 20 % Federal agencies 11 % 15 % Total backlog 100 % 100 % As of December 31, 2023 2022 Backlog by contract type: Fixed price 56 % 74 % Guaranteed maximum price 36 % 14 % Unit price 4 % 4 % Cost plus fee and other 4 % 8 % Total backlog 100 % 100 % account for a substantial portion of our revenueparticularly with federal, state and local government customers, are expected to continue to represent a sizeable percentage of both total revenue and backlog. The composition of revenue and backlog by type of contract for 2017, 2016 and 2015 is as follows:51 47 44 24 28 32 10 11 12 15 14 12 100 100 100 67 63 12 21 13 6 8 10 100 100 9Competitiontypically, there are typically fewer active market participants due to the greater capabilities and resources required to perform the work. Despite this,In addition to domestic competitors, we have seen certain foreign competitors attempting to grow their presence in the United States over the past several years, we have seenparticularly through the pursuit of large Civil segment projects. Evolving changes in the construction industry, such as the trend toward an increased use of the progressive design-build project delivery method that may reduce project risks for both owners and contractors, could result in increased competition particularly from foreign competitors that have been pursuing majorand potentially lower margins on certain projects in the United States due to the relatively larger size and significant number of U.S. opportunities. We anticipate that the increased level of foreign competition will persist for the foreseeable future.In our Civil segment, we compete principally with large civil construction firms, including (alphabetically) Dragados USA; Fluor Corporation; Granite Construction; Kiewit Corporation; Skanska USA; Traylor Bros., Inc.; and The Walsh Group. In our Building segment, we compete with a variety of national and regional contractors. Our primary competitors are (alphabetically) AECOM (through its acquisitions of Tishman Construction and Hunt Construction Group); Balfour Beatty Construction; Clark Construction Group; DPR Construction; Gilbane, Inc.; Hensel Phelps Construction Co.; McCarthy Building Companies, Inc.; Skanska USA; Suffolk Construction; and Turner Construction Company. In our Specialty Contractors segment, we compete principally with various regional and local electrical, mechanical and plumbing subcontractors. We believe price, experience, reputation, responsiveness, customer relationships, project completion track record, schedule control, risk management and quality of work are key factors customers consider when awarding contracts.Ifand by entering intosecuring purchase commitments for materials early in the project schedule.schedule and by including contingency for these risks in our bid price. Construction and other materials used in our construction activities are generally available locally from multiple sources andsources. Despite the widespread adverse supply chain impacts that previously resulted from the coronavirus pandemic (“COVID-19”), we have beennot experienced significant supply chain issues broadly across our portfolio of projects, but we cannot be certain that such issues may not arise in adequate supply during recent years.the future if there are new outbreaks or other public health crises. Labor resources for our domestic projects are largely obtained through various labor unions. We have not experienced significant labor shortages in recent years, nor do we expect to in the near future, though afuture. However, longer-term, the anticipated significant rapid growthincrease in demand for large complex projects driven by the BIL could lead to labor shortages.backlog may leadbusiness. Our revenue and operating income are typically higher in the second half of the year. Our first fiscal quarter of the year is typically our lowest revenue quarter, as the harsher winter weather conditions that often occur during this period can negatively impact our ability to situationsexecute work and our productivity in parts of North America. Our revenue typically increases during the high construction seasons of the summer and fall months in the United States. Within the United States, as well as in other parts of the world, our business generally benefits from milder weather conditions during our third fiscal quarter, which labor resources become constrained. We employ expatriateallows for more productivity from our on-site construction operations. For these reasons, it is not unusual for us to experience seasonal changes or fluctuations in our quarterly operating results.labor in selected overseas areas.Environmental MattersOur propertiesgovernment customers can terminate, renegotiate, or modify any of their contracts with us at their election, and operationsmany of our federal government contracts are subject to renewal or extension periodically. Revenue derived from federal, state and municipal lawslocal government customers was 74%, 68% and 66% of our total revenue for each of the years ended December 31, 2023, 2022 and 2021, respectively.relatingand requirements materially affect our business. We are firmly committed to providing a safe and healthy work environment for our employees and to working in a manner that ensures the safety of our subcontractors, customers and the general public, as well as the protection of the environment, including requirements for water discharges; air emissions; the use, management and disposal of solid or hazardous materials or wastes;facilities, equipment and the cleanup of contamination. In certain circumstances,environment. Compliance with Occupational Safety and Health Administration (“OSHA”) and other health and safety regulations, in particular, is essential to procure business and to attract and retain our workforce. Accordingly, we maymake considerable investments in our environmental, health and safety programs, and we factor costs associated with compliance into our project bids and proposals.be required to hire subcontractors to disposehandle small quantities of hazardous materials encountered on a project in accordanceoccasion. Significant fines, penalties and other sanctions may be imposed for non-compliance with a plan approved in advance by the owner. We continually evaluate our compliance with all applicable environmental and health and safety laws and regulations, and believe that we are in substantial compliance with thosesome laws provide for joint and regulations. However, future requirements or amendments to current laws or regulations imposing more stringent requirements could require us to incur additional costs to maintain or achieve compliance.In addition, some environmental laws, such as the U.S. federal “Superfund” law and similar state statutes, can impose liabilityseveral strict liabilities for the entire costremediation of cleanupreleases of contaminated sites upon any of the current or former owners or operators or upon parties who generated waste at, or sent waste to, these sites, regardless of who owned the site at the time of the release or the lawfulness of the original disposal activity. hazardous substances.We believe thatHowever, we do not own the job sitesliabilities for these sites are not material, either individually or in the aggregate.work. We have pollution liability insurance coverage for such matters, and if applicable, we seek indemnification from customers to cover the risks associated with environmental remediation.subcontractor default insurance autofor our subcontractors, automobile liability, general liability and workers’ compensation insurance, allowing us to centralize our claims and risk management functions to reduce our insurance-related costs.offor our performance. We also require many of our higher-risk subcontractors to provide surety bonds as security for payment of subcontractors and suppliers and to guarantee their performance. As an alternative to traditional surety bonds, we also have purchased subcontractor default insurance for certain construction projects to insure against the risk of subcontractor default.10Employeesour employees varies basedat any given time depends on the numbervolume and types of active projects the type and magnitude of those projects,in progress, as well as our position within the lifecycle of those projects. We believe that we have strong relationships with our employees and that the quality and level of service that our employees deliver to our customers are among the highest in our industry.total numberculture is to always treat people with respect, dignity and fairness. Historically, women have represented a small percentage of employeesworkers in the construction industry. This sometimes presents challenges, as well as opportunities, in attracting and recruiting women to our workforce. Women made up 11.1% of our U.S. workforce as of December 31, 2017 was 10,061.Financialabout geographic areassystems, on-the-job training and educational seminars, employees are trained to understand the importance of project execution. We place a strong emphasis on training employees in accurate and comprehensive project estimating, project management and project cost control. As is discussedcommon in Note 12our industry, we experience some recurring employee turnover each year, which we believe is comparable to the Consolidated Financial Statements underindustry average. Historically, we have successfully attracted and retained sufficient numbers of personnel, including union personnel, to support our operational needs. We strive to ensure a fully competent project management team that includes long-term successors to our current project leaders by investing significant resources to build strong and highly competent project managers. We regularly hire construction management and engineering staff, including interns and recent graduates, and provide them with engaging projects and development programs. On the heading “Geographic Information.”www.tutorperini.com.http://investors.tutorperini.com. In the “Investor Relations”“Financial Reports” portion of our investor website, under “Financial Reports,”the subsection “SEC Filings,” you may obtain free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10‑Q,10-Q, current reports on Form 8-K, and allany amendments to thosethese reports. These reports, as well as reports under Section 16 of the Exchange Act of transactions in our stock by our directors and executive officers. These reportsany amendments to them, are made available on our website as soon as reasonably practicable after we electronically file them with the Securities and Exchange Commission (“SEC”). These reports, and any amendments to them, are also available at the Internet website of the SEC, www.sec.gov. The public may also read and copy any materials we file with the SEC at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. In order to obtain information about the operation of the Public Reference Room, you may call 1-800-732-0330. We also maintain various documents, including our Code of Business Conduct and Ethics, Corporate Governance Guidelines and the charters of the Committees of our Board of Directors in the “Corporate Governance” portion of our website.If weunable to accurately estimate contract risks, revenue or costs, the timing of new awards, or the pace of project execution, we may incur a loss or achieve lower than anticipated profit.Accounting for contract-related revenue and costs requires management to make significant estimates and assumptions that may change significantly throughout the project lifecycle, which could resultinvolved in a material impact to our consolidated financial statements. In addition, cost overruns on fixed price and GMP contracts may result in lower profits or losses.Our resultssignificant number of operations can also fluctuate quarterly and annually depending on when new awards occur and the commencement and progress of work on projects already awarded.Our contracts require us to perform extra, or change order, work, which can result in disputes or claims and adversely affect our working capital, profits and cash flows.Our contracts generally require us to perform extra, or change order, work as directed by the customer even if the customer has not agreed in advance on the scope and/or price of the work to be performed. This process may result in disputes or claims over whether the work performed is beyond the scope of work directed by the customer and/or exceeds the price the customer is willing to pay for the work performed. To the extent we do not recover our costs for this work or there are delays in the recovery of these costs, our cash flows and working capital could be adversely impacted.We are subject to significant legal proceedings which, if determined adverselyunfavorable to us, could adversely affect our financial results and/or cash flows, harm our reputation and/or preclude us from bidding on future projects and/or have a material effect on us.projects. We also may invest significant working capital on projects while legal proceedings are being settled.68 of the Notes to Consolidated Financial Statements. Litigation is inherently uncertain, and it is not possible to accurately predict what the final outcome will be of any legal proceeding. We must make certain assumptions and rely on estimates, which are inherently subject to risks and uncertainties, regarding potential outcomes of legal proceedings in order to determine an appropriate contingent liability and charge to income. Any resultadverse legal proceeding outcome or settlement that is materially different thanfrom our expectations and estimates could have a material adverse effect on our financial condition, results of11occasionallymay bring claims against project owners for additional cost exceeding the contract price or for amounts not included in the original contract price. When these types of events occur and unresolved claims are pending, we may invest significant working capital in projects to cover cost overruns pending the resolution of the relevant claims. A failure to promptly recover on these types of claims has had and could continue to have a material adverse effect on our liquidity and financial results.Aresults and could result in further legal proceedings.slowdown or declineestimates and assumptions that may change substantially throughout the project lifecycle, which has previously resulted, and in economic conditions could adversely affect our operations.Any significant decline in economic conditions in any of the markets we serve or uncertainty regarding the economic outlook,future could result, in a decline in demand for infrastructure projects and commercial building developments.material impact to our consolidated financial statements. In addition, any instabilitycost overruns, including unanticipated cost increases on fixed price contracts and guaranteed maximum price contracts, have previously resulted, and in the financialfuture may result, in lower profits orcredit markets could negativelyin the future subject us, to higher costs, which we may not be able to fully recover in future projects that we are bidding, and may also decrease profit on our existing contracts, in particular with respect to our fixed price, unit price and guaranteed maximum price contracts. Changes in laws, policies or regulations, including tariffs and taxes, have previously impacted, and in the future could impact, the prices for materials or equipment. Further, our customers’ abilityresults of operations have historically fluctuated, and may continue to pay usfluctuate, quarterly and annually depending on a timely basis, or at all, forwhen new awards occur and the commencement and progress of work on projects already under construction, could cause our customers to delay or cancel construction projects in our backlog or could create difficulties for customers to obtain adequate financing to fund new construction projects. Such consequences could have an adverse impact on our future operating results. Lastly, we are more susceptible to adverse economic conditions in New York and California, as a significant portion of our operations are concentrated in those states.Some of these competitors have achieved greater market penetration than we have in the markets in which we compete, and some have greater resources than we do. If we are unable to compete successfully in such markets, our relative market share and profits could be reduced.We may not fully realizerevenue value reported in our backlog due to cancellations or reductions in scope.As of December 31, 2017, our backlog of uncompleted construction work was approximately $7.3 billion. The revenue projected in our backlog may not be realized or, if realized, may notinitial project scope, which can result in profits. For example,disputes or claims and adversely affect our working capital, profits and cash flows.cancellation initial project scope as directed by the customer even if the customer has not agreed in advance on the scope and/or reductionprice of the work to be performed. This process has resulted and in the future could result in disputes or claims over whether the work performed is beyond the scope of certain projectswork directed by the customer and/or exceeds the price the customer is willing to pay for the work performed, which has resulted in significant cash flow constraints in the past. To the extent we do not recover our backlog could havecosts for this work or there are delays in the recovery of these costs, whether as a material adverse effect onresult of an unfavorable outcome in a litigation or arbitration or as a result of a settlement in which we agree to accept less than we had expected, our financial condition, results of operationsworking capital, profits and cash flows.assumptionsestimates and estimatesassumptions used to prepare our financial statements. generally accepted in the United States (“GAAP”) to make estimates and assumptions as of the date of the financial statements. These estimates and assumptions affect the reported values of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Areas requiring significant estimates by our management include, but are not limited to:percentage-of-completionrevenue accounting;contractunapproved change orders or claims;close-outcloseout or other costs;revenue/reserves.results,results. These differences, including those which have resulted, and in the future could result, from unfavorable litigation or arbitration outcomes and settlements in which we agree to accept less than previously estimated amounts, have had and could continue to have a material negativeadverse impact on our financial condition and reported results of operations.Any failureFailure to meet contractual schedule requirements has subjected us, and in the future could subject us, to liquidated damages, liability for our customer’s actual cost arising out of our delay and damage to our reputation.the execution capabilitycapabilities and financial reward of project teams.increasing surety bonding capacity. Success on these joint projects depends in large part on whether our joint venture partners satisfy their contractual obligations.obligations and comply with all applicable regulatory requirements. Generally, we and our joint venture partners are jointly and severally liable for all liabilities and obligations of our joint ventures. If a joint venture partner fails to perform or is financially unable to bear its portion of required capital contributions or other obligations, including liabilities stemming from lawsuits, we could be required to make additional investments, provide additional services or pay more than our proportionate share of a liability to make up for our partner’s shortfall. Further, if we are unable to adequately address our partner’s performance issues, the customer may terminate the project, which could result in legal liability to us, harm our reputation, reduce our profit on a project or, in some cases, result in a loss. require substantial personnel, including construction and project managers and specialty subcontractor resources to execute and perform our contracts in backlog. The successful execution of our business strategies is also dependent upon our ability to attract and retain our key officers, as well as adequately plan for their succession.Our ability to execute and perform on our contracts in backlog depends in large part upon our ability to hire and retain highly skilled personnel, including project and construction management and trade labor resources, such as carpenters, masons and other skilled workers. In the event we are unable to attract, hire and retain the requisite personnel and subcontractors necessary to execute and perform our backlog, we may experience delays in completing projects in accordance with project schedules or an increase in expected costs, both of which could have a material adverse effect on our financial results, our reputation and our relationships. In addition, if we lack the personnel and specialty subcontractors necessary to perform on our current contract backlog, we may find it necessary to curtail our pursuit of new projects. A significant, rapid growth in our backlog may lead to situations in which labor resources become constrained.The execution of our business strategies also substantially depends on our ability to retain several key members of our management. Losing any of these individuals could adversely affect our business. The majority of these key officers are not bound by employment agreements. Volatility or lack of positive performance in our stock price may adversely affect our ability to retain key staff to whom we have provided share-based compensation. Additionally, because a substantial portion of our key executives' compensation is placed "at risk" and linked to the performance of our business, when our operating results are negatively impacted, we are at greater risk of employee turnover. If we lose our key executives and do not have qualified successors in place, our operating results would likely be harmed.Systems and information technology interruption and breaches in data security could adversely impact our ability to operate and negatively impact our operating results.We are reliant on computer and other information technology that could be interrupted or damaged by a variety of factors including, but not limited to, cyber-attacks, natural disasters, power loss, telecommunications failures, acts of war, computer viruses and physical damage. The resulting consequences could include a loss of critical data, a delay in operations or an unintentional disclosure of confidential information, any of which could have a material impact to our Company and its consolidated financial statements.We dedicate considerable attention and resources to the safeguarding of our information technology systems. Our systems may, nevertheless, continue to be at risk for cyber-attacks. Consequently, we may need to engage significant resources in the future to remediate the impact of, or further mitigate the risk of, such an attack. Any successful cyber-attack could result in the criminal, or otherwise illegitimate use of, confidential data, including the Company’s data or third-party data for which the Company has the responsibility for safekeeping. Additionally, such an attack could adversely affect our operations, reputation and financial results.13We are subject to a number of risks as a U.S. government contractor, which could harm our reputation, result in fines or penalties against us and/or adversely impact our financial condition.Failure to comply with laws and regulations related to government contracts could result in contract termination, suspension or debarment from contracting with the U.S. government, civil fines and criminal prosecution, any of which could have a material impact on our consolidated financial statements and future financial condition and performance.We have a substantial amount of indebtedness which could adversely affect our financial position and prevent us from fulfilling our obligations under our debt agreements.We currently have, and expect to continue to have, a substantial amount of indebtedness. As of December 31, 2017, we had total debt of $736.3 million. If we are unable to meet the terms of the financial covenants or fail to comply with any of the other restrictions contained in the agreements governing our indebtedness, an event of default could occur, causing the debt related to such agreement to become immediately due. If such acceleration occurs, we may not be able to repay such indebtedness as required. Since indebtedness under our 2017 Credit Facility is secured by substantially all of our assets, acceleration of this debt could result in foreclosure of those assets and a negative impact on our operations. In addition, a failure to meet the terms of our 2017 Credit Facility could result in a reduction of future borrowing capacity under the 2017 Credit Facility, causing a loss of liquidity. A loss of liquidity could adversely impact our ability to execute projects in our backlog, obtain new projects, engage subcontractors, and attract and retain key employees.Conversion of our outstanding Convertible Notes could dilute ownership interests of existing stockholders and could adversely affect the market price of our Common Stock.Based on the terms of the indenture for the Convertible Notes, we may redeem the Convertible Notes in cash, shares of our Common Stock or a combination of the two. As a result, a conversion of some or all of the Convertible Notes may dilute the ownership interests of existing stockholders. Any sales in the public market of our Common Stock issuable upon such conversion of the Convertible Notes could cause the price of our Common Stock to decline. In addition, the existence of the Convertible Notes may encourage short selling by market participants because a conversion of the Convertible Notes could depress the price of our Common Stock.We may need to include the potential dilutive impact of our Convertible Notes in our diluted earnings per share calculation.We currently intend to pay the principal amount of our Convertible Notes in cash; therefore, we have not included the potential dilutive effect of our Convertible Notes in our diluted earnings per share calculations. If, however, there is a change in future circumstances as a result of a decline in our projected cash flow, available cash/liquidity or other reasons, we may conclude at such time that it will be preferable to use shares to satisfy the Convertible Notes. Such a change in our intentions would result in the inclusion of the potential dilutive impact of the Convertible Notes in our diluted earnings per share calculation, which would result in a decrease in our diluted earnings per share.Weather can significantly affect our revenue and profitability.Inclement weather conditions, such as significant storms and unusual temperatures, can impact our ability to perform work. Adverse weather conditions can cause delays and increases in project costs, resulting in variability in our revenue and profitability.Our international operations expose us to economic, political and other risks, as well as uncertainty related to U.S. Government funding, which could adversely affect our revenue and earnings. In addition, we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.For the year ended December 31, 2017, we derived approximately $143.6 million of revenue from our work on projects located outside of the United States. Our international operations expose us to risks inherent in doing business in certain hostile regions outside the United States, including political risks; risks of loss due to acts of war; unstable economic, financial and market conditions; potential incompatibility with foreign subcontractors and vendors; foreign currency controls and fluctuations; trade restrictions; logistical challenges; variations in taxes; and changes in labor conditions, labor strikes and difficulties in staffing and managing international operations. Failure to successfully manage risks associated with our international operations could result in higher operating costs than anticipated or could delay or limit our ability to generate revenue and income from construction operations in key international markets. U.S. federal government has approved various spending bills for the construction of defense- and diplomacy-related projects and has allocated significant funds to the defense of U.S. interests around the world from the threat of terrorism. The federal government has also approved funds for development in conjunction with the relocation of military personnel into Guam. However, federal government funding levels for construction projects in the Middle East have decreased significantly over the past several years as the14U.S. government has reduced the number of military troops and support personnel in the region. As a result, we have seen a decrease in the number and size of federal government projects available to us in this region. Any decrease in U.S. federal government funding for projects in Guam or in other U.S. Territories or countries in which we are pursuing work may result in project delays or cancellations, which could reduce our revenue and earnings.Finally, the U.S. Foreign Corrupt Practices Act (“FCPA”),of 1977, the U.K. Bribery Act of 2010, and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business. While our policies mandate compliance with these anti-bribery laws, there is no assurance that our internal control policies and procedures will protect us from circumstances or actions that could result in possible criminal penalties or other sanctions, including contract cancellations or debarment, and loss ofharm to our reputation, any of which could have a material adverse impact on our business, financial condition, and results of operations.Our chairmanchief executive officer could exert influence overin the future adversely impact, our business, financial condition and results of operations.due to his positionour customers, subcontractors and significant ownership interest.As of December 31, 2017, our chairmansuppliers, and chief executive officer, Ronald N. Tutor,the markets in which we do business, and three trusts controlled by Mr. Tutor (the “Tutor Group”) owned approximately 18%certain of the outstanding sharesimpacts of this disruption have continued. COVID-19 also caused delays in certain bidding activities and contract awards, particularly for large civil projects, which adversely affected both our Common Stock. Additionally, onerevenue and our backlog. We also faced substantial postponements and other delays in legal proceedings and settlement discussions where we have claims against project owners for additional costs exceeding the contract price or for amounts not included in the original contract price. Consequently, our ability to resolve and recover on these types of claims has been and may continue to be delayed, which may adversely affect our current directors was appointedliquidity and financial resultsMr. Tutor pursuantother risk factors that we have identified in this Annual Report on Form 10-K, which in turn could materially and adversely affect our business, financial condition and results of operations.his rightclimate change could have a material adverse impact on our business, financial condition and results of operations.nominate one memberclimate change, such as rising sea levels and temperatures, severe storms, and energy and technological disruptions, could cause delays and increases in project costs, resulting in variability in our revenue and profitability, as well as potentially adverse impacts to our Boardoperating results and financial condition. In addition, growing public concern about climate change has resulted in the increased focus of Directors, so long aslocal, state, regional, national and international regulatory bodies on greenhouse gas emissions and climate change issues. Legislation to regulate greenhouse gas emissions has periodically been introduced in the Tutor Group owns at least 11.25%U.S. Congress and in the legislatures of various states in which we operate, and there has been a wide-ranging policy debate, both in the outstanding sharesUnited States and internationally, regarding the impact of these gases and possible means for their regulation. Such policy changes, including any enactment of increasingly stringent emissions or other environmental regulations, could increase the costs of projects for us and for our Common Stock. Accordingly, Mr. Tutorclients and, in some cases, delay or even prevent a project from going forward, thereby potentially reducing demand for our services. Consequently, this could exert influence over the outcomeresult in a material adverse impact on our business.approximately $635.4$255.6 million of goodwill and indefinite-lived intangible assets recorded on our Consolidated Balance Sheet as of December 31, 2017.2023. We assess these assets for impairment annually, or more often if required. Our assessments involve a number of estimates and assumptions that are inherently subjective, require significant judgment and regardinvolve highly uncertain matters that are subject to change. The use of different assumptions or estimates could materially affect the determination as to whether or not an impairment has occurred. In addition, if future events are less favorable than what we assumed or estimated in our impairment analysis, we may be required to record an impairment charge, which could have a material adverse impact on our consolidated financial statements.15Offices OfficesOwned & Leased LeasedOwned OwnedOwned OwnedOwned OwnedLeased LeasedOwned OwnedOwned OwnedOwned OwnedOwned OwnedOwned OwnedLakeview Terrace,Menlo Park, CALeased LeasedSpecialty ContractorsLeased LeasedOwned OwnedOwned LeasedPhiladelphia, PALeasedBuildingSan Carlos, CALeasedBuildingOwned OwnedOwned OwnedLeased LeasedJessup, MDOwned OwnedLakeview Terrace, CAOwned LeasedSpecialty ContractorsPeekskill, NYOwned OwnedCivilSan Leandro, CAOwned LeasedSpecialty ContractorsStockton, CAOwnedBuildingProceedingsproceedings are set forthdiscussed in Note 68 of the Notes to Consolidated Financial Statements and are incorporated herein by reference.Federal Mine Safety and Health Act of 1977 because we provide construction services to customers in the mining industry. Accordingly, we provide information regarding mine-safetymine safety violations and other mining-regulationmining regulation matters in Exhibit 95 to this Form 10-K.16MARKETMARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESCommon Stockcommon stock is traded on the New York Stock Exchange under the symbol “TPC.” The quarterly high and low prices for our Common Stock in 2017 and 2016 were as follows:33.00 26.75 16.64 10.16 32.70 25.35 24.17 14.35 29.65 23.30 25.98 19.80 29.90 22.60 30.20 18.05 Holders21, 2018,22, 2024, there were 401298 holders of record of our Common Stock,common stock, including holders of record on behalf of an indeterminate number of beneficial owners.payrepurchase any of our common stock during the fourth quarter of 2023. We have not historically paid dividends or repurchaseon our Common Stock during 2017, nor do we common stock and have anyno immediate plans to do so. Furthermore, some of our debt agreements restrict us from paying dividends or repurchasing stock.17Common Stockcommon stock relative to the cumulative total returns of the NYSE Composite Index and the Dow Jones U.S. Heavy Construction Index. We selected the Dow Jones U.S. Heavy Construction Index because we believe the index reflects the market conditions within the industry in which we primarily operate. The comparison of total return on investment, defined as the change in year-end stock price plus reinvested dividends, for each of the periods assumes that $100 was invested on December 31, 20122018 in each of our Common Stock,common stock, the NYSE Composite Index and the Dow Jones U.S. Heavy Construction Index, with investment weighted on the basis of market capitalization.Common Stock.
COMPARISON OF CUMULATIVE TOTAL RETURNTutor Perini Corp NYSE Composite Index Dow Jones U.S. Heavy Construction Index$225 $220 $175 $150 $125 $100 $75 $50 $25 $02012 2013 2014 2015 2016 201718
SELECTED FINANCIAL DATASelected Consolidated Financial InformationThe following selected financial data should be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 15. Exhibits andFinancial Statement Schedules inthis Annual Report. The following tables present selected financial data for the last five years. This selected financial data should be read in conjunction with the consolidated financial statements and related notes included in Item 15. Exhibits and Financial Statement Schedules.1,602,175 1,668,963 1,889,907 1,687,144 1,441,416 1,941,325 2,069,841 1,802,535 1,503,837 1,551,979 1,213,708 1,234,272 1,228,030 1,301,328 1,182,277 4,757,208 4,973,076 4,920,472 4,492,309 4,175,672 (4,302,803) (4,515,886) (4,564,219) (3,986,867) (3,708,768) 454,405 457,190 356,253 505,442 466,904 (274,928) (255,270) (250,840) (263,752) (263,082) 179,477 201,920 105,413 241,690 203,822 43,882 6,977 13,569 (8,217) (16,692) (69,384) (59,782) (45,143) (46,035) (47,515) 153,975 149,115 73,839 187,438 139,615 569 (53,293) (28,547) (79,502) (52,319) 154,544 95,822 45,292 107,936 87,296 (6,162) 148,382 95,822 45,292 107,936 87,296 2.99 1.95 0.92 2.22 1.82 2.92 1.92 0.91 2.20 1.80 49,647 49,150 48,981 48,562 47,851 50,759 49,864 49,666 49,114 48,589 (a)In December 2017, the Tax Cuts and Jobs Act of 2017 was enacted reducing the U.S. corporate income tax rate from 35% to 21%, effective in 2018. As a result, the Company recognized a favorable tax adjustment of $53.3 million ($1.05 per diluted share) primarily due to the revaluation of its deferred tax assets and liabilities.(b)On June 6, 2017, the Company received $37.0 million ($0.43 per diluted share) in a cash settlement with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), as successor in interest to Banc of America Securities LLC and Bank of America, N.A. (collectively “BofA”). The settlement pertained to litigation, which was filed by the Company in 2011, and related to the purchase by the Company of certain auction-rate securities from BofA. The Company recognized the settlement as a gain during the second quarter of 2017. For additional information, see Note 7 of the Notes to Consolidated Financial Statements.(c)During the year ended December 31, 2015, the Company had a decrease of $45.6 million in income from construction operations ($0.53 per diluted share) due to unfavorable adjustments on various Five Star Electric projects in the Specialty Contractors segment. In addition, that same year there was a decrease of $24.3 million in income from construction operations ($0.28 per diluted share) due to unfavorable adjustments to the estimated cost to complete a Building segment project in New York. The Company’s 2015 results were also impacted by an unfavorable adjustment for an adverse legal decision related to a long-standing litigation matter in the Civil segment, which resulted in a decrease of $23.9 million in income from construction operations ($0.28 per diluted share). Furthermore, the Company recorded favorable adjustments for a Civil segment runway reconstruction project, which resulted in an increase of $13.7 million in income from construction operations ($0.16 per diluted share) in 2015.The Company's results for the year ended December 31, 2014 included a positive impact related to changes in the estimated recoveries for two Civil segment projects and a Building segment hospitality and gaming project. With respect to the two Civil segment projects, there was an increase of $25.9 million in income from construction operations ($0.30 per diluted share) and a $9.4 million decrease in income from construction operations ($0.11 per diluted share). The Building project change in estimate resulted in an $11.4 million increase in income from construction operations ($0.14 per diluted share).19The Company's income from construction operations during the year ended December 31, 2013 was positively impacted by $13.8 million ($0.18 per diluted share) because of changes in the estimated recovery for the above-mentioned hospitality and gaming project.3,074,392 2,837,756 2,608,939 2,454,594 2,077,680 1,581,846 1,518,943 1,448,819 1,344,447 1,288,235 1,492,546 1,318,813 1,160,120 1,110,147 789,445 1.94 1.87 1.80 1.83 1.61 467,499 477,626 523,525 527,602 498,125 4,264,123 4,038,620 3,861,300 3,711,450 3,358,663 736,276 759,519 817,684 857,791 726,171 1,713,275 1,553,023 1,420,227 1,365,505 1,247,535 2,449,551 2,312,542 2,237,911 2,223,296 1,973,706 30 33 37 39 37 0.43 0.49 0.58 0.63 0.58 34.42 31.56 28.94 28.06 25.76 7,283,434 6,227,137 7,465,129 7,831,725 6,954,287 5,813,505 3,735,084 4,553,877 5,369,747 5,526,335 30,280 15,743 35,912 75,829 59,049 163,550 113,336 14,072 (56,678) 50,728 (41,409) (18,495) (32,415) (26,957) (43,574) (75,376) (24,190) (41,788) 99,295 (55,287) MANAGEMENT’SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS15.15. Exhibits and Financial Statement Schedules in this Annual Report. This discussion contains forward-looking statements, which involve risks and uncertainties. For cautions about relying on such forward-looking statements, please refer to the section entitled “Forward-Looking Statements”Forward-Looking Statements at the beginning of this Annual Report immediately prior to Item 1. Our actual results20172023 was $4.8$3.9 billion, up slightly compared to $5.0$3.8 billion for 2016.2022. Higher revenue in the Civil and Building segments was offset by lower revenue in the Specialty Contractors segment, as discussed in more detail below in Results of Segment Operations. In addition, customer budgetary constraints previously induced by COVID-19, combined with certain political and other factors, resulted in the Company not being awarded certain Civil segment projects over the last few years totaling more than $10.0 billion despite having been the low or preferred bidder. Not being awarded these projects also impacted revenue for both 2022 and 2023, and most of these projects are now expected to be re-bid in 2024. Furthermore, the Company was unsuccessful in its pursuit of certain large prospective Civil segment projects in the second half of 2021, which also unfavorably impacted revenue in 2022 and 2023.slight reductionstrong cash collections in 2023 enabled the Company to pay down certain debt, and the Company believes that its improved liquidity will be beneficial to its ability to refinance the 2017 Senior Notes (and possibly other outstanding indebtedness).decreased volumea lower amount of net unfavorable impacts in our Building2023 as compared to 2022, including: 1) certain adverse legal judgments or decisions that had net unfavorable impacts totaling $122.2 million in 2023 compared to $147.8 million in 2022; and Civil segments attributed2) various settlements that had a net favorable impact of $8.4 million in 2023 compared to various projects that are completed or nearing completion.a net unfavorable impact of $85.4 million in 2022. The decreaseimprovement was partially offset by higher volumenet unfavorable impacts in 2023 related to various changes in estimates for project charges, net of positive impacts from improved productivity and efficiencies on certain Civil segment projects, which had an aggregate net negative impact of $117.2 million in California2023 compared to $96.8 million in 2022. Also contributing to the change between 2023 and 2022 were temporary aggregate negative project adjustments of $79.2 million in 2023 compared to $119.7 million in 2022 due to increases in unapproved work on various projects, all of which are expected to reverse themselves over the remaining lives of the projects. The material project adjustments associated with these factors are discussed below.as well as certainwhich resulted in a non-cash charge of $83.6 million, of which $72.2 million impacted the Building segment projectsand $11.4 million impacted the Specialty Contractors segment, and a $24.7 million non-cash charge that resulted from an adverse court ruling on a Specialty Contractors segment educational facilities project in California and Maryland. In addition, revenue in 2017 was negatively impacted by the timing of certain Building and Civil projects that are in ramp-up stages.Consolidated revenue for 2016 was $5.0 compared to $4.9 billion for 2015. The modest improvement was attributable to higher volume in our Building segment, driven by various Building projects primarily in California.Income from construction operations for 2017 was $179.5New York.compared to $201.9 million for 2016. The decrease was driven by net unfavorable adjustments primarilynon-cash impact related to certain mechanical projects, none of which were individually material, the above-mentioned volume changes, and higher compensation-related general and administrative expenses in anticipationelectrical component of a greater volume of new work. The decrease was partially offset by work performed on certain higher margin Civil and Building projects.Income from construction operations for 2016 was $201.9 million compared to $105.4 million for 2015. The increase was primarily due to significantly improved operating performance in all segments, as income from construction operations in 2015 included the impact of significantcompleted mass-transit project charges recorded for various Five Star Electric projects in New York in the Specialty Contractors20decreased activitycomposed of unfavorable settlements that were individually immaterial. Other settlements in 2022 included a $16.2 million unfavorable non-cash impact related to a long-disputed, completed Civil segment project in Maryland, a $13.4 million unfavorable non-cash impact (split evenly between the Civil and Building segments) related to a completed transportation project in the Northeast, an $11.6 million unfavorable non-cash impact related to a Civil segment mass-transit project in California, as well as the unfavorable impact of various other settlements that were individually immaterial, partially offset by a $12.7 million favorable impact related to a Civil segment bridge project in the Midwest.higher-margin civilunapproved change orders resulting from ongoing negotiations; an unfavorable adjustment of $16.9 million on a Specialty Contractors segment multi-unit residential project in New York due to changes in estimates resulting from incremental costs to complete the project and ongoing negotiations on unapproved change orders; a $14.9 million unfavorable adjustment due to changes in estimates due to recent negotiations and incremental cost incurred during project closeout (split evenly between the Civil and Building segments) on the same completed transportation project in the Northeast discussed above; a $14.6 million unfavorable adjustment on a Building segment government building project in Florida primarily due to increased costs associated with an external subcontractor; unfavorable adjustments of $12.8 million on a completed Civil segment highway project in Virginia due to changes in estimates that resulted from progress in the dispute resolution process; and the net favorable impact of changes in estimates on various other projects that were individually immaterial. All of the project charges were due to changes in facts and circumstances that were identified in 2023.estimateunforeseen cost of costsproject close-out issues, remediation work, extended project supervision and associated labor inefficiencies on the electrical (Specialty Contractors segment) component of a transportation project in the Northeast; an $18.0 million charge related to complete an office buildingsimilar project close-out issues (split evenly between the Civil and Building segments) on the same transportation project in the Northeast; a $13.1 million charge due to inefficiencies and cost overruns on a Civil segment mass-transit project in California; and $11.1 million of charges related to close-out discussions for a mechanical project in New York in the Specialty Contractors segment, as well as the net unfavorable impact of changes in estimates on numerous other projects that were individually immaterial. In certain cases, the changes in facts and circumstances resulted in changes in estimates to the adverse Brightwater litigation-related chargeexpected recoveries for certain disputed matters, which were identified as part of the implementation of a legacy civilnew collections strategy in the latter part of 2022 and were primarily related to the Specialty Contractors segment in New York. All of the project charges were due to changes in facts and circumstances that were identified in 2022.tax rate was (0.4)%, 35.7% and 38.7% for 2017, 2016 and 2015, respectively. The effectiveincome tax rate for 20172023 was positively impacted by the enactment30.1% compared to 28.1% for 2022. See Corporate, Tax and Other Matters below for a discussion of the Tax Cuts and Jobs Actchange in the effective tax rate.2017 (the “TCJA”), which$4.09 for 2022. The change in 2023 was signed into law on December 22, 2017. The TCJA includes a number of provisions, including the lowering of the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018. As a result of the TCJA, we recognized an income tax benefit of $53.3 million related primarily due to the adjustments resultingfactors discussed above that led to the change in loss from the remeasurement of deferred tax assets and liabilities. The 2016 rate was favorably impacted by rate changes associated with a shift in revenue mix between states affecting state apportionment, as well as various return-to-provision and deferred tax adjustments related to depreciation. The 2015 rate was favorably impacted by the resolution of certain state tax matters.Earnings per diluted share was $2.92, $1.92 and $0.91 in 2017, 2016 and 2015, respectively. Earnings per diluted share in 2017 included the above-mentioned tax benefit of $53.3 million ($1.05 per diluted share), as well as a gain on a $37.0 million ($0.43 per diluted share) legal settlement (see Note 7 of the Notes to Consolidated Financial Statements). The substantial earnings growth in 2016 was due to significantly improved operating performance in all segments, as discussed above.Cash flow from operations was $163.6 million in 2017 (a record high for the Company since the 2008 merger) compared to $113.1 million in 2016, and compared to a cash flow from operations of $14.1 million in 2015. The record operating cash generated in 2017 was due to continued improvements in the Company’s billing and collection cycle as a result of management’s intense focus on working capital management.20172023 were $5.8$6.1 billion compared to $3.7$3.5 billion in 20162022. The Building and $4.6 billionCivil segments were the primary contributors to the new award activity in 2015. The Civil segment was the predominant contributor of2023. Significant new awards during 2017. The Civil and Building segments were both major contributorcontract adjustments in 2023 includedprimary contributor$2.95 billion Brooklyn Jail project in New York; $788 million of new awards during 2015.$7.3$10.2 billion, $6.2 billion and $7.5up 28% compared to $7.9 billion as of December 31, 2017, 2016 and 2015, respectively. The Company experienced backlog growth of 17% in 2017, driven by the Civil segment.2022. As of December 31, 2017,2023, the mix of backlog by segment was 57%42% for Civil, 23%41% for Building and 20%17% for Specialty Contractors. The reduced level of backlogContractors, compared to 56% for Civil, 28% for Building and 16% for Specialty Contractors at the end of 2016 was the result of revenue burn during the year that outpaced new awards in the Building and Specialty Contractors segments. The relatively higher backlog at the end of 2015 was primarily due to significant new awards in the Building segment, partially offset by revenue burn that outpaced new awards in the Civil and Specialty Contractors segments.$3.6$4 billion, or 49%approximately 40%, of our backlog as of December 31, 20172023 will be recognized as revenue in 2018.2017:2023:(in millions) Backlog at December 31, 2022 Civil $ 4,416.3 $ 1,708.2 $ (1,883.9) $ 4,240.6 Building 2,223.6 3,256.4 (1,302.5) 4,177.5 Specialty Contractors 1,289.2 1,144.9 (693.8) 1,740.3 Total $ 7,929.1 $ 6,109.5 $ (3,880.2) $ 10,158.4 2,672.1 3,048.3 (1,602.2) 4,118.2 1,981.2 1,661.5 (1,941.3) 1,701.4 1,573.8 1,103.7 (1,213.7) 1,463.8 6,227.1 5,813.5 (4,757.2) 7,283.4
(b)Backlog may differ from the transaction prices allocated to the remaining performance obligations as disclosed in Note 2 of the Notes to Consolidated Financial Statements. Such differences relate to the timing of executing a formal contract or receiving a notice to proceed. More specifically, backlog may include awards for which a contract has not yet been executed or a notice to proceed has not been issued, but for which there are no remaining major uncertainties that we will proceed with our work on the project (e.g., adequate funding is in place, we have received a notice of intent to award a contract, etc.).(a)New awards consist of the original contract price of projects added to our backlog plus or minus subsequent changes to the estimated total contract price of existing contracts.ourthe Company’s revenue growth over the next several years continuesremains favorable. However, revenue growth could be hampered by unanticipated project delays or the timing of project bids, awards, commencements, ramp-up activities and completions. We anticipate that we will continue to be the most favorable it has been in many years, particularly in the Civil segment. In addition towin our substantial backlog, we expectshare of significant new award activity based onproject awards resulting from long-term, well-funded capital spending plans by state, local and federal customers, as well as bipartisan supportlimited competition for infrastructure investments. some of the largest project opportunities.recent U.S. elections over the past decade, voters in numerous44 states have approved dozens85% of long-term transportation fundingnearly 3,000 state and local ballot measures, totaling approximately $200raising an estimated $342 billion in long-term funding.new and renewed revenue funding for transportation investments. The largest of these werewas in Los Angeles County, where Measure M, a half-cent sales tax increase, was approved in 2016 and is expected to generate $120 billion of funding over 40 years and in Seattle, Washington, where Sound Transit 3 was passedyears. Funding from this measure is supporting and is expected to generate $54 billioncontinue to support several of funding over 25 years. In addition, the Trump Administration has proposed a significant infrastructure investment program. Also, several large, long-duration civil infrastructure programsCompany’s current and prospective projects. Despite numerous increases since March 2022, interest rates are still at levels that we believe are conducive to continued spending on certain types of projects that have strong end-market demand with which we are already involved are progressing,adequate available funding, such as California’s High-Speed Railmass transit, transportation, bridges, and health care, educational, and correctional and detention facilities, among others. Many economists believe that interest rates will begin falling sometime during 2024. Lower interest rates would likely support additional demand for continued infrastructure spending. In contrast, should interest rates climb further, they could reach levels that may negatively impact demand, especially for certain types of Building segment projects that tend to be more economically sensitive, such as commercial offices and tenant improvement projects.New York City’s East Side Access project. Planning and permitting activities continue on Amtrak’s Northeast Corridor Improvements, including the Gateway Program, whichlargest federal investment in passenger rail since the creation of Amtrak, all in addition to providing for regular annual spending for numerous infrastructure projects. This significant incremental funding is expected to eventually bring new rail tunnels beneath the Hudson River to connect service between New Jersey and New York’s Penn Station. Finally, sustained low interest rates and capital costs are anticipated to drive high demandbe spent over the next 10 years, and continued spending by privatemuch of it is allocated for investment in end markets that are directly aligned with the Company’s market focus. Accordingly, the Company believes that this significant level of sustained, incremental funding has benefited, and public customers on infrastructure projects.will continue to favorably impact, the Company’s current work and prospective opportunities over the next decade.21“Results of Segment Operations,” “Corporate, Tax and Other Matters” and “Liquidity and Financial Condition” below.Results of Segment Operations, Corporate, Tax and Other Matters and Liquidity and Capital Resources below. following presents the Company’s results of operations by segment:Year Ended December 31, Year Ended December 31, (in millions) 2023 2022 1,602.2 1,669.0 1,889.9 192.2 172.7 145.2 2017 decreased a modest 4%2023 increased 9% compared to 2016.2022, primarily due to the absence of certain prior-year unfavorable adjustments, as further discussed below, partially offset by the unfavorable impacts in 2023 from various project adjustments, also discussed below. In addition, revenue growth was also impacted by increased project execution activities on a mass-transit project in California and various projects in Guam and the Northern Mariana Islands, largely offset by reduced project execution activities on the tunneling portion of another mass-transit project in California that is substantially complete. Revenue for both years was also adversely impacted by the follow-on impacts of COVID-19, which delayed bidding activities and awards of certain new projects during 2020 and much of 2021 and continued to negatively impact revenue for both 2022 and 2023. Furthermore, revenue for both periods was adversely impacted by certain projects totaling more than $10.0 billion for which the Company was the low or preferred bidder but no contract was awarded over the last few years due to COVID-19-induced customer budget constraints, as well as the Company’s lack of success in its pursuit of certain large prospective Civil segment projects in the second half of 2021.decreasechange was favorably impacted by current-year net favorable adjustments totaling $19.0 million for a project on the West Coast, primarily resulting from the favorable impact of $58.1 million on the settlement of change orders and changes in estimates due to improved performance, partially offset by a temporary unfavorable non-cash impact of $40.7 million resulting from the successful negotiation of significant lower margin (and lower risk) change orders which increased the project’s overall estimated profit but reduced the project’s percentage of completion and overall margin percentage. The change was also favorably impacted by contributions from higher volume from this project and the other projects discussed in the paragraph above. Also contributing to the favorable change was the absence of significant prior-year unfavorable adjustments including the temporary unfavorable impact of $38.8 million resulting from the successful negotiation of significant lower margin (and lower risk) change orders on the same project on the West Coast (where the temporary reduction to earnings is expected to reverse itself over the remaining life of the project); the $26.2 million unfavorable non-cash impact related to a completed highway project in the Northeast due to the reversal on appeal of a previously favorable lower-court ruling; the $25.5 million unfavorable non-cash impact related to the adverse legal judgment on a dispute related to a completed bridge project in New York; the $16.2 million unfavorable non-cash impact related to the settlement of a long-disputed, completed project in Maryland; the $13.1 million charge due to inefficiencies and cost overruns and the unfavorable non-cash settlement impact of $11.6 million, both related to another mass-transit project in California; and the $10.0 million non-cash impact related to an unfavorable adjustment resulting from an adverse legal decision on a mass-transit project in the Northeast. These prior-year unfavorable impacts were partially offset by a prior-year favorable project close-out adjustment of $12.7 million on a bridge project in the Midwest. In addition, income from construction operations for both 2023 and 2022 was similarly unfavorably impacted by adjustments due to changes in estimates on the Civil segment’s portion of a completed transportation project in the Northeast primarily due to the settlement of certain change orders, changes in estimates due to recent negotiations and incremental cost incurred during project closeout ($14.2 million in 2023 and $15.7 million in 2022).impact of certain projectsfactors discussed above that drove the increase in New York, Washington and the Midwest that are completed or nearing completion. The decrease was partially offset by increased activity on certain mass-transit projects in California and New York that are ramping up. Revenue for 2016 decreased 12% compared to 2015, principally due to the prior-year completion of a large runway reconstruction project in New York and reduced activity in 2016 on a platform project at Hudson Yards in New York, which is nearing completion. The decrease was partially offset by increased activity on various projects, including a large tunnel project in Seattle, Washington and a large mass-transit project in California.Despite the revenue reduction mentioned above, income from construction operations increased 11% in 2017 compared to 2016, principally due to increased project execution activity on certain higher-margin projects in California and New York. Income from construction operations increased 19% in 2016 compared to 2015, due to improved operating performance and because the 2015 results included the Brightwater litigation-related charge of $23.9 million. The increase was partially offset by the impact of the reduced volume discussed above.Operating margin was 12.0% in 2017 compared to 10.3% in 2016 and 7.7% in 2015. The operating margin increases in 2017 and 2016 were primarily due to the reasons discussed above that impacted revenue and income from construction operations.$3.0$1.7 billion in 2017,2023 compared to $1.6 billion in 20162022. Significant new awards and $1.1 billioncontract adjustments in 2015. New awards in 20172023 included a $1.4 billion joint venture$788 million of additional funding for certain mass-transit projectprojects in California; a bridge$222 million military facilities project at Tinian International Airport in Iowa valued at $323 million; a mass-transit project in New York worth $292 million; a joint venture tunnel project for a hydroelectric generating station in British Columbia, Canada, valued at $274 million; a bridge project in New York valued at $189 million; $97the Commonwealth of the Northern Mariana Islands; and $127 million of additional scope for a platform project in New York; a joint venture bridge project in Minnesota, for which the Company’s portion is valued at $90 million; a bridge project in New York valued at $82 million; a highway project in Maryland worth $78 million; and a military training range project in Guam worth $78 million.New awards in 2016 included a $663 million mass-transit project in New York, approximately $277 million of new bridge projects in the Midwest, the Company’s share of $244 million of additional contract scopefunding for a mass-transit project in California, a $107 million highway project in Virginia and a $97 million airport terminal expansion project in Guam. Minnesota.20152022 included $466 million of additional funding for a mass-transit project in New YorkCalifornia; the $260 million Eagle Mountain - Woodfibre Gas Pipeline project in British Columbia, Canada; $118 million of additional funding for a mass-transit project in the Midwest; and several projects in Guam, including a $107 million military housing project, an $84 million wharf improvement project and two other military facilities projects valued at $80 million; highway projects in Delaware, Maryland and Pennsylvania valued at $70 million, $60$73 million and $58 million, respectively; and a tunnel extension project in New York worth $56$49 million.$4.1$4.2 billion as of December 31, 2017,2023, down slightly compared to $2.7$4.4 billion as of both December 31, 2016 and 2015. Civil segment backlog grew 54% year-over-year in 2017 as a result of significant new award activity, including the above-mentioned $1.4 billion mass-transit project in California.2022. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, andsupported by substantial anticipated funding from various voter-approved transportation measures;measures and the Trump Administration’s considerable proposed infrastructure investment program;BIL, and by public agencies’ long-term spending plans. The Civil segment is well-positioned to capture its share of these prospective projects. The segment, however, continues to face considerable competition, including occasional aggressive bids from foreign competitors.22Year Ended December 31, Year Ended December 31, (in millions) 2023 2022 1,941.3 2,069.8 1,802.5 34.2 51.6 (1.2) Income (loss) from construction operations 2017 decreased slightly2023 increased 5% compared to 2016, principally due to decreased2022, with the growth driven by increased project execution activityactivities on certainvarious projects in California and Florida that are substantially complete, partiallya detention facility project in New York, all with substantial scope of work remaining, mostly offset by increased activitythe impact of the aforementioned unfavorable adjustment related to the adverse legal ruling on certaina completed mixed-use project in New York, and reduced project execution activities on substantially completed projects, including two commercial and industrial facilities in California and two hospitality and gaming projects in Arkansas and a large technology project. RevenueCalifornia. As discussed above in Executive Overview, revenue for 2016 increased 15%both years was adversely impacted by the follow-on impacts of COVID-19, which delayed certain project bids and awards in 2020 and 2021.2015, principallyincome from construction operations of $7.2 million for 2022. For 2023, the loss was primarily due to the aforementioned unfavorable adjustment related to the adverse legal ruling on a completed mixed-use project in New York that resulted in a non-cash, pre-tax charge of $83.6 million, of which $72.2 million impacted the Building segment and $11.4 million impacted the Specialty Contractors segment, and an unfavorable adjustment of $14.6 million on a government building project in Florida primarily due to increased activity on various commercial office, technology, health care, hospitality and gaming, and retail building projects in California. This increasecosts associated with an external subcontractor. The impact of these unfavorable adjustments was partially offset by the completion in 2015absence of a prior-year unfavorable adjustment of $11.3 million related to an adverse legal decision on a hospitality and gaming project in Mississippi.IncomeFlorida. In addition, income (loss) from construction operations decreased 34%for both 2023 and 2022 was similarly unfavorably impacted by adjustments due to changes in 2017 compared to 2016,estimates on the Building segment’s portion of the aforementioned completed transportation project in the Northeast primarily due to favorable close-out activitiesthe settlement of certain change orders, changes in 2016 on two projects in New York and the volume changes mentioned above. The decrease was partially offset by improved performance on a large technology project in California that is nearing completion. Income from construction operations increased considerably in 2016 compared to 2015estimates due to improved operating performancerecent negotiations and the above-mentioned favorable close-out activities on the two New York projects, as well as unfavorable adjustmentsincremental cost incurred during project closeout ($14.2 million in 2015, totaling $24.32023 and $15.7 million to the estimated cost to complete an office building project in New York.1.8%(7.0)% in 20172023 compared to 2.5%0.6% in 2016 and (0.1)%2022. The decrease in 2015. The operating margin changes in 2017 and 2016 were due towas driven by the factors mentioned above that drove the changes inlower revenue and income (loss) from construction operations.$1.7$3.3 billion in 2017, $1.32023 compared to $1.2 billion in 20162022. Significant new awards and $2.4contract adjustments in 2023 included the $2.95 billion Brooklyn Jail project in 2015. New awards in 2017 included fourYork (which includes more than $630 million of electrical and mechanical subcontract work to be performed by the Specialty Contractors segment) and $287 million of additional funding for two large health care projects in California collectively worth $328 million; $250California.initialadditional funding for a new technology office building in California, which is eventually anticipated to be worth approximately $500 million; additional scope of work valued at $121 million for a technology office projecttwo educational facility projects in California; a U.S. embassy renovation project in Uruguay valued at $87 million; and an $80$126 million military facility project in Saudi Arabia. New awards in 2016 includedPuerto Rico; a hospitality and gaming$95 million educational facility project in California and another in Maryland, collectively valued at $372 million; a hospitalityCalifornia; an $85 million military housing project in California valued at $120 million;Alaska; and a multi-unit residential$78 million health care project in Florida valued at $72 million. New awards in 2015 included a technology research and development office project valued at $800 million and $230 million of incremental funding for a biotechnology project, both in California, and a hospitality project in Pennsylvania worth $239 million.$1.7$4.2 billion as of December 31, 2017,2023, up 88% compared to $2.0$2.2 billion as of December 31, 2016 and $2.8 billion as2022, with the increase largely driven by the award of December 31, 2015.the Brooklyn Jail project mentioned above. The decline in backlog for both 2017 and 2016 was due to revenue burn that outpaced new awards during each year. Building segment backlog is anticipated to grow in 2018, as the segment continues to haveexperience strong customer demand as reflected by a large volume of prospective projects some of which have already been bidacross various end markets and are expected to be selected and awarded by customers during the first half of 2018. Elevated demand is expected to continue due to ongoing customer spending supported by a low interest rate environment. The Building segment is well-positioned to capture its share of prospective projects based on its strong customer relationships and long-term reputation for excellence in delivering high-quality projects on time and within budget.incomeloss from construction operations for the Specialty Contractors segment are summarized as follows:Year Ended December 31, Year Ended December 31, (in millions) 2023 2022 1,213.7 1,234.3 1,228.0 18.9 37.9 15.7 Loss from construction operations 20172023 decreased modestly15% compared to 2016. Decreased activity2022, principally due to reduced project execution activities on variousthe electrical projectsand mechanical components of a completed transportation project in the Northeast, as well as the aforementioned unfavorable non-cash adjustments due to changes in estimates on the electrical and mechanical scope of this same project associated with changes in the expected recovery on certain unapproved change orders resulting from ongoing negotiations and the adverse legal ruling on an educational facilities project in New York. The overall revenue decline was partially offset by the absence of prior-year unfavorable adjustments on the same transportation project in the Northeast, a prior-year unfavorable adjustment related to an adverse appellate court decision involving the electrical component of a completed mass-transit project in New York, was largely offset by increased activity on various electrical projects in the southern U.S. and California. Revenue for 2016 was virtually level with 2015.Income from construction operations decreased 50% in 2017 compared to 2016, principally due to the impact ofas well as unfavorable project adjustments on certaintwo separate mechanical projects in New York, discussed below. As discussed above in California, noneawards in 2020 and 2021, including projects that would have had considerable components of which were individually material. The decrease was partially offset by improved profitability on various electrical projects in New York and increased activity on various electrical projectsmechanical scope in the southern U.S.2022 and California. Income from construction operations increased 141% in 2016 because 2015 included23Table2023 periods had the projects been awarded and the Company won its share of Contentsunfavorable adjustments totaling $45.6 million for several Five Star Electric projects in New York, none of which were individually material.Operating margin was 1.6% in 2017 compared to 3.1% in 2016 and 1.3% in 2015. The margin changes in 2017 and 2016 were due to the factors mentioned above that impacted incomeboth years.2017, $8672023 compared to $729.3 million in 2016 and $1.1 billion in 2015. New2022. The most significant new awards in 20172023 included approximately $426more than $630 million for variousof electrical projects inand mechanical subcontract work to be performed on the southern U.S. and California, two electrical subcontracts for mass-transit projects in New York collectively valued at $158 million, and four mechanical contracts in New York with a total value of $131 million. New awards in 2016 included various mechanical projects in New York collectively valued at approximately $146 million, several electrical projects in the southern United States totaling approximately $93 million and an electrical subcontract for a mass-transitBrooklyn Jail project in New York valued at $86 million. New awards in 2015 included an electrical subcontract valued at $90York; a $67 million for a mass-transitcommunications systems integration project in New YorkYork; and anthe Central District Wastewater Treatment Plant electrical subcontractproject in Florida, valued at $73 million for a Hudson Yards office tower in New York.$1.5$1.7 billion as of December 31, 20172023, up 35% compared to $1.6$1.3 billion as of December 31, 2016 and $1.9 billion2022, with the increase largely driven by the significant amount of subcontract work booked as part of December 31, 2015.the Brooklyn Jail project mentioned above. The Specialty Contractors segment continues to have a substantial volume ofbe primarily focused on servicing the Company’s current and prospective large Civil and Building segment projects, with demand for its services supported by sustained spending on civilparticularly in the Northeast and building projects.California. The Specialty Contractors segment isremains well-positioned to capture its share of prospectivenew projects, based onleveraging the size and scale of our business units that operate in New York, Texas, Florida and California and the strong reputation held by these business units for high-quality work on large, complex projects.$65.9$75.2 million in 2017, $60.22023 compared to $62.2 million in 2016 and $54.2 million in 2015.2022. The increase in 2017corporate general and administrative expenses in 2023 compared to 2022 was primarily due to higher compensation-related expenses pertainingincluding certain employee separation costs and higher salaries associated with additional headcount primarily due to transfers of employees to the employment and retention of certain key executives. In 2016, the increase in corporate general and administrative expenses compared to 2015 was predominantly due togroup, as well as increased compensation expense attributable to improved financial results and the hiring of several key executives. (Provision)Year Ended December 31, Year Ended December 31, (in millions) 2023 2022 43.9 7.0 13.6 (69.4) (59.8) (45.1) 0.6 (53.3) (28.5) Income tax benefit $36.9$10.5 million in 20172023 compared to 2016, and decreased $6.62022 primarily due to a gain on sale of property in 2023.20162023 compared to 2015.2022. The increase in 20172023 compared to 2022 was substantially due to a $37.0 million legal settlement,higher interest rates on the Term Loan B and the Revolver, as discussed below in Liquidity and Capital Resources.75 of the Notes to Consolidated Financial Statements. Other income in 2015 included adjustments to decrease contingent earn-out liabilities related to prior business acquisitions.Interest expense increased $9.6 million in 2017 compared to the prior year, principally due to non-cash extinguishment costs related to our debt restructuring transactions in April 2017, as well as increased non-cash interest charges from the amortization of debt discount and issuance costs. Interest expense in 2016 increased $14.7 million compared to 2015 primarily due to cash and non-cash interest expense related to the Convertible Notes issued in June 2016, as well as an increase in non-cash interest expense associated with fees related to two amendments to the Company’s 2014 Credit Facility. The year ended December 31, 2016 was also impacted by higher net borrowing rates.The effective income tax rate was (0.4)% for 2017, 35.7% for 2016 and 38.7% for 2015. As discussed in the Executive Overview, we recognized an income tax benefit of $53.3 million in 2017 related primarily to the adjustments resulting from the remeasurement of deferred tax assets and liabilities due to the enactment of the TCJA. Excluding the benefit resulting from the enactment of the TCJA, the effective income tax rate for 2017 would have been 34.3%. The effective tax rate for 2016 compared to 2015 was favorably impacted by rate changes associated with a shift in revenue mix between states affecting state apportionment, as well as various return-to-provision and depreciation adjustments.Financial ConditionOn April 20, 2017, we issued $500We have a committed line of credit totaling $175 million, of senior notes and entered into a new credit facility with a $350 million revolver.24Wewhich may be used the net proceeds to repurchase or redeem our 7.625% Senior Notes due 2018, (the “2010 Senior Notes”) in full and repay all borrowings under our Sixth Amended and Restated Credit Agreement (with subsequent amendments, the “2014 Credit Facility”, with Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 2014 Credit Facility provides for a $300 million revolving credit facility (the “2014 Revolver”), a $250 million term loan (the “Term Loan”) and a sublimit for the issuance ofloans, letters of credit up to the aggregate amount of $150 million, all maturing on May 1, 2018.and/or general purposes. We believe that the increased liquidity that resultedcash generated from this refinancingoperations, along with our unused credit capacity of $175 million and available cash balances as of December 31, 2023, will helpbe sufficient to fund any working capital needs and debt maturities for the significant numbernext 12 months and beyond, as discussed further in project opportunities that we see overadditional outstanding claims and unapproved change orders, including COVID-19-related cost recoveries from certain customers. We expect to benefit from the next several years.$192.9$380.6 million as of December 31, 20172023 compared to $146.1$259.4 million as of December 31, 2016.2022. Cash immediately available for general corporate purposes was $94.7$145.1 million and $49.5$47.7 million as of December 31, 20172023 and 2016,2022, respectively, with the remainder being amounts held by our consolidated joint ventures and also our proportionate share of cash held by our unconsolidated joint ventures and also amountsventures. Cash held by our consolidated joint ventures which, in both cases, wereis available only for joint venture-related uses, including distributions to joint venture partners of $98.2 million and $96.6 million, respectively.partners. In addition, our restricted cash and restricted investments totaled primarily to secure insurance-related contingent obligations were $4.8 million and $53.0 million, respectively, as of December 31, 2017 compared to restricted cash of $50.5 million as of December 31, 2016.2017,2023, net cash provided by operating activities was $163.6$308.5 million, compared to $207.0 million in 2022, representing an increase of $101.5 million. The operating cash flow for 2023 was the largest result for any year since the merger between Tutor-Saliba Corporation and Perini Corporation in 2008, exceeding the previous record achieved in 2022. The record operating cash flow in 2023 was primarily due primarily to cash generated from income sourcesa decrease in investments in project working capital partially offset by changescash utilized by earnings sources. The decrease in net investmentinvestments in working capital. The change inproject working capital was primarily reflects an increasedue to improved collection activity, as reflected by a decrease in accounts receivable and costs and estimated earnings in excess of billings which was mostly offset byand accounts receivable, and an increase in billings in excess of costs and estimated earnings.earnings (“BIE”). During the year ended December 31, 2016, $113.32022, net cash provided by operating activities was $207.0 million primarily due to a decrease in investments in project working capital partially offset by cash utilized by earnings sources. The decrease in investments in project working capital was providedprimarily due to improved collection activity, as reflected by a decrease in accounts receivable and an increase in BIE.duedriven by higher collections in 2023 compared to favorable operating results, somewhat offset by changes2022, as well as a larger decrease in net investment in working capital. The changeinvestments in working capital primarily reflected increases in accounts receivable (both trade accounts receivable and retention) related to billing activity, offset by a reduction of costs and estimated earnings in excess of billings. Cash flow from operations for 2017 was a record high for the Company since the 2008 merger. In addition, for the second consecutive year the Company’s cash flow from operations exceeded its net income. The $50.2 million improvement in cash flow from operations for 20172023 compared to 2016 was due to a lower net investmentthe prior year. Both periods generated significant cash from decreased investments in working capital as collection activities were strong in both 2023 and 2022, which reflects management’s continued focus on improvingincluded the Company’s billing and collection cycle. Cash flow from operations for 2016 increased $99.3 million compared to 2015. The increase reflected improved year-over-year profitability and lowerpositive impacts of collections associated with previously disputed matters. investment in working capital resulting from a significant reduction in costs and estimated earnings in excess of billings. The improvement in cash generation in 2016 compared to 2015 was even more pronounced when considering there were significant collections by the Company in the first quarter of 2015 related to the settlements of past disputes over the CityCenter project in Las Vegas, Nevada and a hospital project in Santa Monica, California.During 2017 and 2016, we used $41.4 million and $18.5 million of cash from investing activities, respectively. Net cash used in both yearsinvesting activities was $78.2 million, which was primarily due to the acquisition of property and equipment.During 2017, we utilized $75.4equipment (i.e., capital expenditures), which totaled $53.0 million, of cash from financing activities, primarily due to theas well as net paydown of debt, $17.5 million distributions paid to noncontrolling interests and the payment of $15.3 million in debt issuance and extinguishment costs related to the debt restructuring transactions. Net cash used in financinginvestment transactions of $35.4 million, partially offset by proceeds from the sale of property and equipment of $10.1 million. During 2022, net cash used in investing activities for 2016 was $24.2$65.6 million, which was primarily due to the acquisition of property and equipment of $59.8 million, as well as net pay downcash used in investment transactions of debt$14.5 million, partially offset by proceeds from the sale of property and the paymentequipment of $15.1$8.6 million.in debt issuance costs associated with two amendments to the 2014 Credit Facilitywhich was primarily driven by net repayment of borrowings of $61.7 million and the issuance of $200.0$46.5 million of Convertible Notes.2017,2023, we had working capital of $1.5$1.4 billion, a ratio of current assets to current liabilities of 1.941.66 and a ratio of debt to equity of 0.430.70 compared to working capital of $1.3$1.7 billion, a ratio of current assets to current liabilities of 1.87 and a ratio of debt to equity of 0.490.66 at December 31, 2016.Due to the enactment of the TCJA, as discussed in Corporate, Tax and Other Matters, we expect that our future cash requirements for income taxes will decrease as a result of the reduction of the U.S. corporate tax rate from 35% to 21% that became effective January 1, 2018.2017.2023. For additional information, refer to Note 57 of the Notes to Consolidated Financial Statements, as applicable.2017FacilityApril 20, 2017, weAugust 18, 2020, the Company entered into a credit agreement (the “2017“2020 Credit Facility”Agreement”) with SunTrustBMO Harris Bank N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 20172020 Credit FacilityAgreement provides for a $350$425.0 million term loan B facility (the “Term Loan B”) and a $175.0 million revolving25“2017 Revolver”“Revolver”) and a sublimit, with sub-limits for the issuance of letters of credit and swinglineswing line loans up to the aggregate amountamounts of $150$75.0 million and $10$10.0 million, respectively, both maturingrespectively.20, 202221, 2025, any of the 2017 Senior Notes remain outstanding, the maturity date for another tranche of the Term Loan B (representing 89.8% of the principal balance) shall be April 21, 2025 (which is 10 days prior to the maturity of the 2017 Senior Notes), subject to certain further exceptions. The Revolver will mature on August 18, 2025, unless any of the Convertible2017 Senior Notes are outstanding on December 17, 2020,January 30, 2025, in which case all such borrowingsany extensions of credit under the Revolver will mature and the commitments available under the Revolver will be reduced to zero, in each case, on December 17, 2020 (subjectJanuary 30, 2025, subject to certain further exceptions). In addition,exceptions.Facility permits additional borrowingsAgreement requires the Company to make prepayments on the Term Loan B in an aggregate amountconnection with certain asset sales, receipts of $150 million, which can beinsurance proceeds, incurrences of certain indebtedness and annual excess cash flow (in each case, subject to certain customary exceptions). At December 31, 2023 and 2022, current maturities of long-term debt in the formaccompanying Consolidated Balance Sheets included $91.0 million and $44.0 million, respectively, of increased capacityprincipal on the 2017Term Loan B, relating to the mandatory prepayment provision of the 2020 Credit Agreement in respect of annual excess cash flow. The $91.0 million principal prepayment, which was due by the first week of April 2024, was paid in February 2024, and the $44.0 million principal prepayment was made in April 2023. After the February 2024 prepayment, the Company still has significant cash available, which is anticipated to be used for further debt reduction in conjunction with the expected refinancing.orfor the establishmentyear ended December 31, 2023 were approximately 10.1% and 11.8%, respectively. At December 31, 2023, the borrowing rates on the Term Loan B and the Revolver were 10.2% and 12.3%, respectively. For more information regarding the terms of one or more term loans.consolidated fixed charge coverage ratio and consolidated leverage ratioFirst Lien Net Leverage Ratio under the 20172020 Credit FacilityAgreement for the period, which areis calculated on a rolling four-quarter basis:Trailing Four Fiscal Quarters Ended December 31, 2023 Actual Twelve Months Ended December 31, 2017First Lien Net Leverage Ratio ActualRequiredFixed charge coverage ratio2.632.07 to 1.00> or = 1.25 : 1.00Leverage ratio2.45 to 1.004.002.25 : 1.00the filing date of this Form 10-K,December 31, 2023, we arewere in compliance and expect to continue to be in compliance with the financial covenants under the 20172020 Credit Facility.wethe Company issued $500 million in aggregate principal amount of 6.875% Senior Notes due May 1, 2025 (the “2017 Senior Notes”) in a private placement.placement offering. Interest on the 2017 Senior Notes is payable in arrears semi-annually onin May 1 and November 1 of each year, beginning onin November 1, 2017.RepurchaseRedemption of 2010 Senior Notes and Termination of 2014 Credit FacilityWe used proceeds from the 2017 Senior Notes and 2017 Revolver to repurchase or redeem our 2010 Senior Notes, to pay off our Term Loan and 2014 Revolver, as well as to pay accrued but unpaid interest and fees. In addition, we satisfied and discharged the indenture governing the 2010 Senior Notes and terminated the 2014 Credit Facility.Convertible NotesOn June 15, 2016, we completed an offering of $200 million of 2.875% Convertible Senior Notes due June 15, 2021 (the “Convertible Notes”). MortgagesConvertible Notes are senior unsecured obligations of the Company. Interest on the Convertible Notes is payable on June 15 and December 15 of each year, commencing on December 15, 2016, until the maturity date. As of December 31, 2017, none of the conversion provisions of our Convertible Notes have been triggered.Equipment financing and mortgagesWe haveCompany has certain loans entered into for the purchase of specific property, plant and equipment and secured by the assets purchased. The aggregate balance of equipment financing loans was approximately $61.1$26.4 million and $84.9$37.0 million at December 31, 20172023 and 2016,2022, respectively, with interest rates ranging from 1.90%2.54% to 5.93%7.32% with equalten years with additional balloon payments of $12.4 million in 2021 and $6.3 million in 2022 on the remaining loans outstanding at December 31, 2017.5 years. The aggregate balance of mortgage loans was approximately $15.7$8.4 million and $16.7$11.6 million at December 31, 20172023 and 2016,2022, respectively, with interest rates rangingranging from a fixed 2.50%2.25% to LIBORSOFR plus 3%2.00% and equal monthly installment payments over periods up to seven years with additional balloon payments of $2.6 million in 2018, $2.9 million in 202110 years.$7.0 million in 2023.Off-Balance Sheet ArrangementsNone26Contractual ObligationsOur outstanding contractual obligationscommitments as of December 31, 20172023 include:summarizeddue in 2024) and interest payments of $151.3 million (of which $66.4 million are due in 2024) based on rates in effect as of December 31, 2023. See Note 7 ofthe following table:781,907 30,748 17,515 226,325 507,319 478,045 42,279 83,143 272,307 80,316 66,486 18,420 21,404 11,764 14,898 3,569 2,899 670 9,612 5,666 3,946 1,339,619 100,012 126,678 510,396 602,533
•Operating lease obligations of $97.2 million (of which $12.0 million are due in 2024). See Note 9 of the Notes to Consolidated Financial Statements for further detail of our lease obligations and the timing of expected future payments.(a)Debt and interest on debt exclude unamortized debt discount and deferred debt issuance costs. Amounts for interest on debt are based on interest rates in effect as of December 31, 2017.(b)The Company utilizes current actuarial assumptions in determining the expected minimum contributions to fund our defined benefit pension and other post-retirement plans. Estimated contributions for periods beyond the scope of the actuarial assumptions have not been included because, in management’s judgment, such estimates may not be reliable.Policiespercentage-of-completion method based onratio of contract costcosts incurred to date compared to total estimated contract cost.costs for each performance obligation. The estimates used in the percentage-of-completion method during the contract performance periodaccounting for contracts with customers require judgment and assumptions regarding both future events and the evaluation of contingencies such as the impact of change orders, liability claims, other contract disputes, the achievement of contractual performance standards and potential variances in project schedule and costs. Changes to the total estimated contract cost, either due to unexpected events or revisions to management’s initial estimates, for a given project are recognized in the period in which they are determined.��costcosts incurred in excess of current contract provisions. The Company recognizes revenue butfor claims as variable consideration in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contractsprofit, for claimsoccur when the uncertainty associated with the variable consideration is resolved. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of incurredsuch cost is probable and the amounts can be reliably estimated. These requirementsDisputed back charges are satisfied under GAAP’s Accounting Standards Codification (“ASC”) 605-35, Construction-Type and Production-Type Contracts,recognized when the contractsame requirements described above for variable consideration have been satisfied.evidence provides a legal basis for the claim, additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in the Company’s performance, claim-related costs are identifiable and considered reasonable in view of the work performed, and evidence supporting the claim is objective and verifiable.business purpose of executing a specific projectcontracts or projects and allow the Company to share risks and secure specialty skills required for project execution.27As required byIn accordance with ASC 810, management’s assessment of whether the Company is the primary beneficiary of a VIE is continuously performed.All intercompanyIntercompany balances and transactions and balances have been eliminated in consolidation.are eliminated. See Note 1(b) and Note 1113 of the Notes to Consolidated Financial Statements for additional discussion regarding VIEs.name.in the fourth quarteras of the fiscal year forOctober 1 of each of our Civil, Building and Specialty Contractors operating segments, which are the same as our reporting units for goodwill impairment analysis.year. This test requires us to estimate the fair value of each reporting unit carrying goodwill using income and market approaches, and to compare the calculated fair value of each reporting unit to its carrying value, which is equal to the reporting unit’s net assets. If the calculated fair value of a reporting unit is less than its carrying value, we perform a second step involving a hypothetical purchase allocation for that reporting unit resulting in an implied fair value of the reporting unit’s goodwill. If the implied fair value is less than the carrying value of goodwill,recognize an impairment charge equal to the difference is recognized. Additionally,difference.quarters precedingresults of our impairment tests.fourth quarter,Company’s October 1 annual test date, we evaluate events and circumstances, such as changesincluding, but not limited to, an examination of macroeconomic conditions, cost factors, overall financial performance by each reporting unit, other relevant entity-specific events, and trends in the legal environmentstock prices of our Company and business climate, the operating performancethe annuala quantitative impairment test sooner than the fourth quarter of the year.2017,2023, we conducted our annual goodwill impairment test and determined that our goodwill was not impaired. Theimpaired since the estimated fair value of the Civil reporting unit exceeded its net book value by a significant amount. However, there is a risk of goodwill impairment evaluation process requires assumptions thatif future events are subject to a high degree of judgement about variables such as revenue growth rates, profitability levels, discount rates, industry market multiples and weighted average cost of capital (WACC). Changesless favorable than what we assumed or estimated in these variables would impact the results of our impairment tests. For example,analysis.2017, changes of 0.5% in the WACC2023 annual test that would have resulted in changes inmore likely than not reduce the fair value of the Civil reporting units ranging from $(30.0) millionunit below its carrying amount. We will continue to $40.0 million,monitor events occurring or circumstances changing which wouldmay suggest that goodwill should be reevaluated. These events and circumstances include, but are not have changedlimited to, changes in the conclusions reached in our annual goodwill impairment test.New Accounting Pronouncements — For discussion of recently adopted accounting standards and updates, see Note 1overall financial performance of the NotesCivil reporting unit and other quantitative and qualitative factors specific to Consolidated Financial Statements.QUANTITATIVEQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInterest rate risk isprimaryresults of operations are exposed to certain market risk exposure. Borrowingrisks, primarily associated with fluctuations in interest rates. Borrowings under our 20172020 Credit FacilityAgreement and certain other debt obligations have variable interest rates subject to interest rate risk. AsSee Note 7 of December 31, 2017, wethe Notes to Consolidated Financial Statements for further discussion of our 2020 Credit Agreement. We had approximately $8.4$373.5 million and $422.4 million of net borrowings with variable interest rates.rates as of December 31, 2023 and 2022, respectively. If short-term floating interest rates were to increase by 0.50%, the change in interest on these borrowings were to change by 0.50% and our variable indebtedness were to remain unchanged, interest expense would increase or decrease by approximately $50,000. and Supplementary Schedules are set forth in Item 15 in this Annual Report on Form 10-K and are incorporated herein by reference.28Securities Exchange Act, of 1934, as amended (“Exchange Act”), as of December 31, 20172023 was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2017,2023, our disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act were recorded, processed, summarized and reported within the time periods specified in the SEC’s rules. Our disclosure controls and procedures are designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.2017,2023, our internal control over financial reporting was effective based on those criteria.2017.20172023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.29Sylmar, California2017,2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.2017,2023, of the Company and our report dated February 27, 2018,28, 2024, expressed an unqualified opinion on those financial statements.27, 201828, 202430DirectorOn February 21, 2018, Thomas C. Leppert notified the Board of Directors (the “Board”) of Tutor Perini Corporation of his decision to resign from the Board, effective immediately.Concurrent with Mr. Leppert’s departure, the Board approved a reduction in the size of the Board from twelve to eleven members.2017.2017.SECURITYSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSThe(a) (b) (c) Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average
exercise price
of outstanding
options, warrants and rightsNumber of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 2,682,894 $ 23.33 987,001 Equity compensation plans not approved by security holders — — — Total 2,682,894 $ 23.33 987,001 2017.2017.2017.2023 under the section entitled Fees Paid to Audit Firm.31EXHIBITSEXHIBITS AND FINANCIAL STATEMENT SCHEDULESTUTOR PERINI CORPORATION AND SUBSIDIARIESconsolidated financial statementsConsolidated Balance Sheets as of December 31, 20172023 and 20162022 and our Consolidated Statements of Operations, Comprehensive Income (Loss), Cash Flows, and Changes in Equity for each of the three years in the period ended December 31, 20172023 and the notesNotes thereto, together with the reportReport of the independent registered public accounting firmIndependent Registered Public Accounting Firm (PCAOB ID No. 34) on those consolidated financial statementsConsolidated Financial Statements are hereby filed as part of this Annual Report on Form 10-K, beginning on page F-1.of 1933 or the SecuritiesExchange Act of 1934 and are referred to and incorporated herein by reference to such filings.3.33.43.54.64.7Exhibit 10.Material Contracts10.1*10.2*Material Contracts 3210.3*10.4*10.5*10.6*10.710.5 10.6 10.810.9*10.10*10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17* 10.18* 10.19* 10.20* 10.21* 10.22* 10.23* 10.24* 10.25* 10.26* 10.27* 10.1110.29* 10.30* 10.31* 10.32* 10.33* 10.35* Exhibit 21 Exhibit 101.INS Document.Exhibit 104 Cover Page Interactive Data File - The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL (included as Exhibit 101). required to be filed as an exhibit pursuant to Item 15(a)(3)Companyregistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.5Date: February 28, 2024 /s/ Ryan J. Soroka Dated: February 27, 2018By:/s/ Gary G. SmalleyGary G. SmalleyExecutiveSenior Vice President and Chief Financial OfficerCompanyregistrant and in the capacities and on the dates indicated.Signature Title Date SignatureTitleDate27, 2018/s/ Ryan J. Soroka /s/ Gary G. SmalleyGary G. SmalleyExecutiveSenior Vice President and Chief Financial Officer27, 2018Principal Accounting OfficerPeter Arkley ) Jigisha Desai ) Sidney J. Feltenstein ) Michael R. Klein ) /s/ Ryan J. Soroka ) Ryan J. Soroka Vice President and Chief Accounting OfficerFebruary 27, 2018Other Directors) Peter Arkley)Sidney J. Feltenstein)James A. Frost)/s/ Gary G. SmalleyMichael R. Klein)Gary G. SmalleyRobert C. Lieber)Dennis D. Oklak)Donald D. Snyder)Dickran M. Tevrizian, Jr.)27, 201834F-1Sylmar, California"Company"“Company”) as of December 31, 20172023 and 2016,2022, the related consolidated statements of income,operations, comprehensive income (loss), changes in equity, and cash flows, for each of the three years in the period ended December 31, 2017,2023, and the related notes (collectively referred to as the "financial statements"“financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172023 and 2016,2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017,2023, in conformity with accounting principles generally accepted in the United States of America.2017,2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2018,28, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.27, 2018F-2 INCOME(in thousands, except per common share data)Year Ended December 31, Year Ended December 31, (in thousands, except per common share amounts) (in thousands, except per common share amounts) 2023 2022 2021 4,757,208 4,973,076 4,920,472 (4,302,803) (4,515,886) (4,564,219) 454,405 457,190 356,253 (274,928) (255,270) (250,840) 179,477 201,920 105,413 INCOME (LOSS) FROM CONSTRUCTION OPERATIONS INCOME (LOSS) FROM CONSTRUCTION OPERATIONS INCOME (LOSS) FROM CONSTRUCTION OPERATIONS 43,882 6,977 13,569 (69,384) (59,782) (45,143) 153,975 149,115 73,839 569 (53,293) (28,547) 154,544 95,822 45,292 INCOME (LOSS) BEFORE INCOME TAXES Income tax (expense) benefit NET INCOME (LOSS) (6,162) 148,382 95,822 45,292 2.99 1.95 0.92 2.92 1.92 0.91 NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION BASIC EARNINGS (LOSS) PER COMMON SHARE DILUTED EARNINGS (LOSS) PER COMMON SHARE 49,647 49,150 48,981 BASIC BASIC 50,759 49,864 49,666 F-3(in thousands)154,544 95,822 45,292 Year Ended December 31, Year Ended December 31, (in thousands) (in thousands) 2023 2022 2021 NET INCOME (LOSS) OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: Defined benefit pension plan adjustments Defined benefit pension plan adjustments 1,424 (2,623) 2,026 1,273 (261) (3,214) (2) (340) 766 (24) (125) 2,695 (3,248) (547) 157,239 92,574 44,745 COMPREHENSIVE INCOME (LOSS) COMPREHENSIVE INCOME (LOSS) COMPREHENSIVE INCOME (LOSS) (6,162) 151,077 92,574 44,745 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION F-4(in thousands, except share data)As of December 31, As of December 31, (in thousands, except share and per share amounts) (in thousands, except share and per share amounts) 2023 2022 ASSETS 192,868 146,103 Cash and cash equivalents ($173,118 and $168,408 related to VIEs) Cash and cash equivalents ($173,118 and $168,408 related to VIEs) Cash and cash equivalents ($173,118 and $168,408 related to VIEs) 4,780 50,504 53,014 1,801,656 1,743,300 932,758 831,826 89,316 66,023 Accounts receivable ($84,014 and $54,040 related to VIEs) Retention receivable ($161,187 and $187,615 related to VIEs) Costs and estimated earnings in excess of billings ($58,089 and $83,911 related to VIEs) Other current assets ($26,725 and $33,340 related to VIEs) 3,074,392 2,837,756 Land Land 41,382 41,382 125,029 124,157 477,988 444,153 182,288 181,717 826,687 791,409 975,462 (359,188) (313,783) 467,499 477,626 Total property and equipment, net ($35,135 and $22,133 related to VIEs) 585,006 585,006 89,454 92,997 DEFERRED INCOME TAXES 47,772 45,235 4,264,123 4,038,620 LIABILITIES AND EQUITY 30,748 85,890 961,791 994,016 456,869 331,112 132,438 107,925 Current maturities of long-term debt Current maturities of long-term debt Accounts payable ($24,160 and $36,484 related to VIEs) Retention payable ($22,841 and $44,859 related to VIEs) Billings in excess of costs and estimated earnings ($439,759 and $480,839 related to VIEs) Accrued expenses and other current liabilities ($18,206 and $5,082 related to VIEs) 1,581,846 1,518,943 705,528 673,629 108,504 131,007 DEFERRED INCOME TAXES 163,465 162,018 2,559,343 2,485,597 COMMITMENTS AND CONTINGENCIES (Note 8) COMMITMENTS AND CONTINGENCIES (Note 8) Stockholders' equity: Stockholders' equity: 49,781 49,211 Preferred stock – authorized 1,000,000 shares ($1 par value), none issued Preferred stock – authorized 1,000,000 shares ($1 par value), none issued Common stock – authorized 112,500,000 shares ($1 par value), issued and outstanding 52,025,497 and 51,521,336 shares 1,084,205 1,075,600 622,007 473,625 (42,718) (45,413) 1,713,275 1,553,023 (8,495) 1,704,780 1,553,023 4,264,123 4,038,620 The accompanying notes are an integral part of these consolidated financial statements. F-5TUTOR PERINI CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)154,544 95,822 45,292 48,387 63,759 37,919 3,543 3,543 3,715 21,174 13,423 9,477 (269) (186) 17,595 10,968 2,095 (23,096) (10,169) 22,214 1,131 453 (2,909) (60,214) (90,530) (128,777) 3,656 28,210 28,912 (3,170) (1,874) (3,680) 163,550 113,336 14,072 (30,280) (15,743) (35,912) 2,744 1,899 4,980 (54,504) (6,463) 1,370 45,724 (4,651) (1,483) (41,409) (18,495) (32,415) 2,161,384 1,353,895 1,013,205 (2,195,068) (1,562,684) (1,054,371) (15,266) (15,086) 200,000 (11,769) (584) (808) 269 186 (17,499) 2,842 (75,376) (24,190) (41,788) 46,765 70,651 (60,131) 146,103 75,452 135,583 192,868 146,103 75,452 The accompanying notes are an integral part of these consolidated financial statements.F-6TUTOR PERINI CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(in thousands)48,671 1,025,941 332,511 (41,618) 1,365,505 45,292 45,292 (547) (547) (186) (186) 9,477 9,477 402 284 686 49,073 1,035,516 377,803 (42,165) 1,420,227 95,822 95,822 (3,248) (3,248) (457) (457) 13,423 13,423 138 676 814 26,442 26,442 49,211 1,075,600 473,625 (45,413) 1,553,023 148,382 6,162 154,544 2,695 2,695 20,877 20,877 570 (12,272) (11,702) 2,842 2,842 (17,499) (17,499) 49,781 1,084,205 622,007 (42,718) (8,495) 1,704,780 F-7Year Ended December 31, (in thousands) 2023 2022 2021 Cash Flows from Operating Activities: Net income (loss) $ (127,597) $ (192,572) $ 134,150 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation 42,992 49,838 82,732 Amortization of intangible assets 2,237 14,526 35,497 Share-based compensation expense 12,259 9,065 11,642 Change in debt discounts and deferred debt issuance costs 5,458 3,697 5,756 Deferred income taxes (64,820) (79,449) (13,887) (Gain) loss on sale of property and equipment (5,016) 145 2,639 Changes in other components of working capital 428,910 390,424 (422,227) Other long-term liabilities 3,754 14,317 14,766 Other, net 10,294 (3,020) 478 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 308,471 206,971 (148,454) Cash Flows from Investing Activities: Acquisition of property and equipment (52,953) (59,780) (38,594) Proceeds from sale of property and equipment 10,062 8,599 7,245 Investments in securities (48,351) (23,948) (30,761) Proceeds from maturities and sales of investments in securities 12,997 9,493 24,771 NET CASH USED IN INVESTING ACTIVITIES (78,245) (65,636) (37,339) Cash Flows from Financing Activities: Proceeds from debt 712,324 693,757 740,743 Repayment of debt (773,999) (732,101) (777,762) Cash payments related to share-based compensation (969) (1,734) (1,989) Distributions paid to noncontrolling interests (46,500) (47,386) (22,655) Contributions from noncontrolling interests 2,000 8,688 7,000 Debt issuance, extinguishment and modification costs (2,233) (124) — NET CASH USED IN FINANCING ACTIVITIES (109,377) (78,900) (54,663) Net increase (decrease) in cash, cash equivalents and restricted cash 120,849 62,435 (240,456) Cash, cash equivalents and restricted cash at beginning of year 273,831 211,396 451,852 Cash, cash equivalents and restricted cash at end of year $ 394,680 $ 273,831 $ 211,396 (in thousands) Common
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossNoncontrolling
InterestsTotal Balance - December 31, 2020 $ 50,827 $ 1,127,385 $ 422,385 $ (46,741) $ (10,911) $ 1,542,945 Net income — — 91,925 — 42,225 134,150 Other comprehensive income — — — 3,106 140 3,246 Share-based compensation — 8,848 — — — 8,848 Issuance of common stock, net 269 (3,083) — — — (2,814) Contributions from noncontrolling interests — — — — 10,000 10,000 Distributions to noncontrolling interests — — — — (22,655) (22,655) Balance - December 31, 2021 $ 51,096 $ 1,133,150 $ 514,310 $ (43,635) $ 18,799 $ 1,673,720 Net income (loss) — — (210,009) — 17,437 (192,572) Other comprehensive loss — — — (3,402) (2,272) (5,674) Share-based compensation — 8,227 — — — 8,227 Issuance of common stock, net 425 (444) — — — (19) Contributions from noncontrolling interests — — — — 5,688 5,688 Distributions to noncontrolling interests — — — — (47,386) (47,386) Balance - December 31, 2022 $ 51,521 $ 1,140,933 $ 304,301 $ (47,037) $ (7,734) $ 1,441,984 Net income (loss) — — (171,155) — 43,558 (127,597) Other comprehensive income — — — 7,250 999 8,249 Share-based compensation — 6,442 — — — 6,442 Issuance of common stock, net 504 (1,171) — — — (667) Contributions from noncontrolling interests — — — — 2,000 2,000 Distributions to noncontrolling interests — — — — (46,500) (46,500) Balance - December 31, 2023 $ 52,025 $ 1,146,204 $ 133,146 $ (39,787) $ (7,677) $ 1,283,911 generally accepted in the United States of America (“GAAP”) as codified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”).at inception to determine if they meet the qualifications of a variable interest entity (“VIE”) in accordance with ASC 810, Consolidation (“ASC 810”). If a joint venture is a VIE and the Company is the primary beneficiary, the joint venture is fully consolidated (See(see Note 11 below)13). If a joint venture is not a VIE, it may be consolidated under the voting interest method if the Company holds a controlling financial interest in the joint venture. The Company is considered to hold a controlling financial interest when it is able to exercise control over the joint venture’s operating and financial decisions. For construction joint ventures that do not need to be consolidated but qualify for the equity method of accounting, the Company accounts for its interest in the joint ventures using the proportionate consolidation method, whereby the Company’s proportionate share of the joint ventures’ assets, liabilities, revenue and cost of operations are included in the appropriate classifications in the Company’s consolidated financial statements. All intercompanyIntercompany balances and transactions and balances have been eliminated in consolidation.Construction Contractscontractby either contractual termination clauses or by the Company’s rights to payment for work already performed on the asset under construction that does not have an alternative use for the Company.usingis recognized to the percentage-of-completionextent of progress towards completion of the performance obligations. The selection of the method to measure progress towards completion requires judgment and is based primarily on contract costthe nature of the products or services provided. The Company generally uses the cost-to-cost method for its contracts, which measures progress towards completion for each performance obligation based on the ratio of costs incurred to date compared to the total estimated contract cost.costs at completion for the respective performance obligation. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Revenue, including estimated fees or profits, is recorded proportionately as costs are incurred. Cost of revenueoperations includes an allocation oflabor, materials, subcontractor costs, and other direct and indirect costs, including depreciation and amortization. Pre-contract costs are expensed as incurred. Changestotal estimated contract cost or losses, if any, are recognized in the period in which they are determined.The Company generally provides limited warranties fornature of the work required to be performed under its construction contracts with periods typically extending for a limited duration following substantial completionon many of the Company’s work on a project. Historically, warrantyperformance obligations, estimating total revenue and cost at completion is complex, subject to many variables and requires significant judgment. Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration, including the impact of change orders, claims, have not resulted in material costs incurred.classifies as current construction-related assets and liabilitiesestimates variable consideration at the most likely amount it expects tomay be settled beyond one year froma significant reversal of cumulative revenue recognized will not occur when the balance sheet date, consistentuncertainty associated with the lengthvariable consideration is resolved. Estimates of timevariable consideration and determination of the Company’s project operating cycle. Included in these balances are the following: costs andwhether to include estimated earnings in excess of billings, which represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date; billings in excess of costs and estimated earnings, which represent the excess of contract billings to date over the amount of contract costs and profits (or contract revenue) recognized to date; and contract retainage receivables and payables, which represent amounts invoiced to customers and amounts invoiced to the Company by subcontractors where payments have been withheld pending the completion of certain milestones, other contractual conditions or upon the completion of the project.Costs and estimated earnings in excess of billings result when either: 1) the appropriate contract revenue amount has been recognized in accordance with the percentage-of-completion accounting method, but a portion of the revenue recorded cannot be billed currently due to the billing terms defined in the contract,transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to management. Back charges to suppliers or 2) costssubcontractors are incurred related to certain claims and unapproved change orders. Claims occur when there isrecognized as a dispute regarding both a change in the scopereduction of work and the price associated with that change. Unapproved change orders occur when a change in the scope of work results in additional work being performed before the parties have agreed on the corresponding change in the contract price. For both claims and unapproved change orders, the Company recognizes revenue, but not profit,cost when it is determined that recovery of incurredsuch cost is probable and the amounts can be reliably estimated. For claims, these requirementsDisputed back charges are satisfied under ASC 605-35, Construction-Type and Production-Type Contracts,recognized when the contract or other evidence provides a legal basissame requirements described above for the claim, additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in the Company’s performance, claim-related costs are identifiable and considered reasonable in view of the work performed, and evidence supporting the claim or change order is objective and verifiable.F-8TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Costs and estimated earnings in excess of billings, as reported on the Balance Sheet, consisted of the following:549,849 477,425 296,591 207,475 86,318 146,926 932,758 831,826 Claims and unapproved change orders are billable upon the resolution of any disputed or open items between the contractual parties and the execution of contractual amendments. Increases in claims and unapproved change orders typically result from costs being incurred against existing or new positions where recovery is concluded to be both probable and reliably estimable; decreases normally result from resolutions and subsequent billings. For both claims and unapproved change orders, the Company recognizes revenue, but not profit. Other unbilled costs and profits are billable in accordance with the billing terms of each of the existing contractual arrangements and, as such, the timing of contract billing cycles can cause fluctuations in the balance of unbilled costs and profits. Ultimate resolution of other unbilled costs and profits typically involves the passage of time and, often, incremental progress toward contractual requirements or milestones. The amount of costs and estimated earnings in excess of billings as of December 31, 2017 estimated by management to be collected beyond one year is approximately $443.7 million.Retainage agreements vary from project to project and balances could be outstanding for several months or years depending on a number of circumstances, such as contract-specific terms, project performance and other variables that may arise as the Company makes progress towards completion. Generally, retainage payables are not remitted to the Company’s subcontractors until the associated retainage receivables from the customer are collected. As of December 31, 2017, the amount of retainage receivables and payables estimated by management to be collected or remitted beyond one year is approximately 30% and 19% of the balances, respectively.(e) Changes in Estimates on Construction Contractsclose-outcloseout phases, these factors include the impact of change orders and claims, as well as additional revisions in remaining anticipated project costs. Generally, if the contract is at an early stage of completion, the current period impact is smaller than if the same change in estimate is made to the contract at a later stage of completion. Management evaluates changes in estimates on a contract by contractcontract-by-contract basis and discloses significant changes, if material, in the notesNotes to the consolidated financial statements.Consolidated Financial Statements. The cumulative catch-up method is used to account for revisions in estimates.(f)(g)(h) in the fourth quarter of the fiscal year, and between annual tests if events occur or circumstances change which suggest that goodwill should be reevaluated. Such events or circumstances include significant changes in legal factors and business climate, recent losses at a reporting unit, and industry trends, among other factors. The Civil, Building and Specialty Contractors segments each represent a reporting unit.unit, and the Civil reporting unit carried the remaining goodwill balance at December 31, 2023. The Company performs its annualF-9TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)weighted-averageweighted average of an income and a market approach. These approaches utilize various valuation assumptions, and small changes to the assumptions could have a significant impact on the concluded fair value. The income approach is based on the estimated present value of future cash flows for each reporting unit.unit carrying a goodwill balance. The market approach is based on assumptions about how market data relates to the Company.each reporting unit carrying a goodwill balance. The weighting of these two approaches is based on their individual correlation to the economics of each reporting unit.unit carrying a goodwill balance. The annual quantitative assessment performed in 2017the fourth quarter of 2023 resulted in an estimated fair value for eachthat exceeded the net book value of the Company’sCivil reporting units that exceeded their respective net book values;unit; therefore, no impairment charge was necessary for 2017.(i)necessary.quantitative assessment performed in 2017the fourth quarter of 2023 resulted in an estimated fair value for the non-amortizable trade names that exceeded their respective net book values; therefore, no impairment charge was necessary for 2017.(j)necessary.(k)EPSearnings per common share (“EPS”) and diluted EPS are calculated by dividing net income (loss) attributable to Tutor Perini Corporation by the following: for basic EPS, the weighted-average number of common shares outstanding during the period; and for diluted EPS, the sum of the weighted-average number of both outstanding common shares and potentially dilutive securities, which for the Company can include restricted stock units (“RSUs”) and unexercised stock options andoptions. Potentially dilutive securities also included previously outstanding convertible notes prior to their repayment on June 15, 2021; however, the Convertible Notes, as defined in Note 5.convertible notes had no impact on diluted EPS. The Company calculates the effect of thesethe potentially dilutive securitiesRSUs and stock options using the treasury stock method.Year Ended December 31, Year Ended December 31, (in thousands, except per common share data) 2023 2022 2021 148,382 95,822 45,292 Net income (loss) attributable to Tutor Perini Corporation 49,647 49,150 48,981 1,112 714 685 Weighted-average common shares outstanding, basic Weighted-average common shares outstanding, basic Effect of dilutive RSUs and stock options 50,759 49,864 49,666 Net income (loss) attributable to Tutor Perini Corporation per common share: Net income (loss) attributable to Tutor Perini Corporation per common share: Net income (loss) attributable to Tutor Perini Corporation per common share: Basic Basic 2.99 1.95 0.92 2.92 1.92 0.91 798 1,132 1,372 With regarddiluted EPSthe net loss for the periods.impactConsolidated Balance Sheets to the amounts shown in the Consolidated Statements of the Convertible Notes on the diluted EPS calculation, because the Company has the intent and ability to settle the principal amount of the Convertible Notes in cash, per ASC 260, Earnings Per Share, the settlement of the principal amount has no impact on diluted EPS.(l) Cash and Cash EquivalentsAs of December 31, (in thousands) 2023 2022 Cash and cash equivalents available for general corporate purposes $ 145,055 $ 47,711 Joint venture cash and cash equivalents 235,509 211,640 Cash and cash equivalents 380,564 259,351 Restricted cash 14,116 14,480 Total cash, cash equivalents and restricted cash $ 394,680 $ 273,831 as reported in the accompanying Consolidated Balance Sheets, consist of amounts available for the Company’s general purposes, as well as the Company’s proportionate share of cash held by the Company’s unconsolidated joint ventures and also100% of amounts held by the Company’s consolidated joint ventures. In both cases, cash held by joint ventures is available only for joint venture-related uses, including future distributions to joint venture partners.F-10Cash and cash equivalents consisted of the following:94,713 49,539 98,155 96,564 192,868 146,103 (m) Restricted Cash and Restricted Investmentsrestricted cash andinvestments consisting of 1) restricted investments primarily held as collateral to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit. Restrictedcredit and insurance-related deposits; and 2) investments in lieu of retention. Investments in lieu of retention are comprisedrecorded as a component of various corporateretention receivable on the accompanying Consolidated Balance Sheets.bank notescorporate debt securities that areare rated A3 or better (see Note 12). The Company’s AFS debt securities are recorded at fair value with unrealized gains and have maturities withinlosses included in accumulated other comprehensive income (loss) (“AOCI”), net of applicable taxes. Realized gains and losses from sales of AFS debt securities are included in other income (expense) in our Consolidated Statements of Operations.Company’s operating cycle. These restrictedunrealized losses in AFS debt securities as of December 31, 2023 and 2022 to determine the existence of credit losses considering factors including credit ratings and other relevant information, which may indicate that contractual cash flows are not expected to occur. The results of this evaluation indicated that the unrealized losses on AFS debt securities are primarily attributable to market interest rate increases and not a deterioration in credit quality of the issuers. Based on the analysis, management determined that credit losses did not exist for AFS debt securities in an unrealized loss position as of December 31, 2023 and 2022.are held-to-maturitybefore full recovery of the amortized cost basis of the AFS debt securities, carriedwhich may be at amortized cost.(n)maturity. As a result, the Company has not recognized any impairment losses in earnings for the years ended December 31, 2023 and 2022.restricted andRSUs, stock options, cash-settled performance stock units (“CPSUs”), unrestricted stock units and stock options. Restrictedcertain deferred cash awards (“DCAs”) that are indexed to the Company’s common stock.andfor shares of the Company’s common stock optionson a one-for-one basis. These awards generally vest subject to service, and/performance or performance requirements,market conditions, with related compensation expense equal to the fair value of the award on the date of grant and recognized on a straight-line basis over the requisite period. The fair value of RSUs with service or performance-vesting conditions is generally based on the closing price of the Company’s common stock on the New York Stock Exchange (“NYSE”). Certain RSUs are classified as liabilities because they contain guaranteed minimum payouts.units vest immediately andawards are generally issuedfully vested upon issuance with related compensation expense equal to the directors as partfair value of their annual retainer fees, in which case they are expensed overthe award on the date of grant.The fair value of unrestricted stock is based on the closing price of the Company’s common stock on the NYSE.12-month service period.For share-based awards that have a service requirement,service-based vesting condition, the Company accounts for forfeitures upon occurrence, rather than estimating the probability of forfeiture at the date of grant. Accordingly, the Company recognizes the full grant-date fair value of these awards on a straight-line basis throughout the requisite service period, reversing any expense if, and only if, there is a forfeiture.share-basedall awards that have a performance-based vesting requirement,condition, the Company evaluates the probability of achieving the performance criterioncriteria quarterly throughout the performance period and will adjust share-based compensation expense if it estimates that the achievement of the performance criterion, the achievement of which is ultimately determined by the Compensation Committee,criteria is not probable.(o) In addition, liability awards with a performance-based vesting condition are remeasured at fair value at each reporting period and the compensation expense is adjusted accordingly.(p) and displaying comprehensive income and its components in the consolidated financial statements. The Company reports the change in pension benefit plan assets/liabilities, cumulative foreign currency translation, change in fair valueand the unrealized gain (loss) of investments and change in fair value of an interest rate swap as components of accumulated other comprehensive loss (“AOCI”).AOCI.F-11 tax effects of the components of other comprehensive income (loss) areand the related tax effects for the years ended December 31, 2023, 2022 and 2021 were as follows:Year Ended December 31, Year Ended December 31, 2023 2023 2022 2021 (in thousands) Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount 2,416 (992) 1,424 (4,452) 1,829 (2,623) 31 1,995 2,026 Defined benefit pension plan adjustments Defined benefit pension plan adjustments 2,159 (886) 1,273 (439) 178 (261) (5,897) 2,683 (3,214) (4) 2 (2) (576) 236 (340) 1,123 (357) 766 (45) 21 (24) (37) (88) (125) Unrealized gain (loss) in fair value of investments 4,571 (1,876) 2,695 (5,512) 2,264 (3,248) (4,780) 4,233 (547) Less: Other comprehensive income (loss) attributable to noncontrolling interests 4,571 (1,876) 2,695 (5,512) 2,264 (3,248) (4,780) 4,233 (547) for each ofattributable to Tutor Perini Corporation and noncontrolling interests during the three years ended December 31, 2017 are2023, 2022 and 2021 were as follows:(40,268) (1,389) (110) 149 (41,618) 2,026 (3,214) 766 (125) (547) (38,242) (4,603) 656 24 (42,165) (3,722) (261) (340) (24) (4,347) 1,099 1,099 (40,865) (4,864) 316 (45,413) 306 1,273 (2) 1,577 1,118 1,118 (39,441) (3,591) 314 (42,718) (in thousands) Defined Benefit Pension Plan Foreign Currency Translation Unrealized Gain (Loss) in Fair
Value of InvestmentsAccumulated Other Comprehensive
Income (Loss)Attributable to Tutor Perini Corporation: Balance as of December 31, 2020 $ (44,087) $ (5,322) $ 2,668 $ (46,741) Other comprehensive income (loss) before reclassifications 4,167 (465) (2,372) 1,330 Amounts reclassified from AOCI 2,054 — (278) 1,776 Balance as of December 31, 2021 $ (37,866) $ (5,787) $ 18 $ (43,635) Other comprehensive income (loss) before reclassifications 3,370 (1,454) (7,273) (5,357) Amounts reclassified from AOCI 1,859 — 96 1,955 Balance as of December 31, 2022 $ (32,637) $ (7,241) $ (7,159) $ (47,037) Other comprehensive income before reclassifications 2,036 348 3,528 5,912 Amounts reclassified from AOCI 1,247 — 91 1,338 Balance as of December 31, 2023 $ (29,354) $ (6,893) $ (3,540) $ (39,787) (in thousands) Defined Benefit Pension Plan Foreign Currency Translation Accumulated Other Comprehensive
Income (Loss)Attributable to Noncontrolling Interests: Balance as of December 31, 2020 $ — $ 402 $ — $ 402 Other comprehensive income — 140 — 140 Balance as of December 31, 2021 $ — $ 542 $ — $ 542 Other comprehensive loss — (1,341) (931) (2,272) Balance as of December 31, 2022 $ — $ (799) $ (931) $ (1,730) Other comprehensive income — 487 512 999 Balance as of December 31, 2023 $ — $ (312) $ (419) $ (731) IncomeOperations during the years ended December 31, 2023, 2022 and 2021 are as follows:Year Ended December 31, Year Ended December 31, (in thousands) (in thousands) 2023 2022 2021 Component of AOCI: Net of tax 1,897 1,745 (779) (646) 1,118 1,099 DefinedAmount included in other income, net on the Consolidated Statements of Operations.pension plan adjustments were reclassified to coston the Consolidated Statements of operations and general and administrative expenses.(q) NewOperations.May 2014,November 2023, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606)2023-07, Segment Reporting (“Topic 280”): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), as amended by subsequent ASUs (collectively, “ASU 2014-09”). ASU 2014-09 amends the existing accounting standards for revenue recognition and establishes principles for recognizing revenue upon the transferwhich requires disclosure of promised goods or services to customers basedincremental segment information on the expected consideration to be received in exchange for those goods or services. The guidance is effective foran interim and annual reporting periods beginning after December 15, 2017. The amendments may be applied retrospectively to each prior period presented or with the cumulative effect recognized as of the date of initial application (modified retrospective method). The Company will adopt this new standard using the modified retrospective method. The Company has reviewed its contract portfolio in order to determine the impact that the adoption ofbasis. ASU 2014-09 will have on its consolidated financial statements. Based on the Company’s evaluation of ASU 2014-09, the Company expects an immaterial reduction to beginning retained earnings, with an immaterial impact to net income on an ongoing basis. The Company has implemented changes to its business processes, systems and internal controls to support the adoption of this new standard and the related disclosure requirements. The adoption of the standard2023-07 is also expected to impact the presentation of the consolidated balance sheet. The impact primarily relates to reclassifications among project working capital financial statement accounts to align with the new standard.F-12TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which amends the existing guidance in ASC 840, Leases. This amendment requires the recognition of lease assets and lease liabilities by lessees for those leases currently classified as operating leases. Other significant provisions of the amendment include (i) defining the “lease term” to include the non-cancellable period together with periods for which there is a significant economic incentive for the lessee to extend or not terminate the lease; (ii) defining the initial lease liability to be recorded on the balance sheet to contemplate only those variable lease payments that depend on an index or that are in substance “fixed”; and (iii) a dual approach for determining whether lease expense is recognized on a straight-line or accelerated basis, depending on whether the lessee is expected to consume more than an insignificant portion of the leased asset’s economic benefits. This guidance will be effective for interim and annual reporting periods beginning after December 15, 2018 and will be applied using the modified retrospective transition method for existing leases. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718):Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which simplifies several aspects of the accounting for share-based payment transactions, including the accounting for the income tax effect of share-based transactions and the forfeiture of share-based instruments. The Company prospectively adopted this ASU effective January 1, 2017. Upon this adoption, the Company changed its accounting policy for share-based awards that have service requirements such that the impact for failure to meet service requirements will only be recognized upon occurrence. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), seeking to eliminate diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues including the classification of debt prepayment and extinguishment costs in the cash flow statement. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017,2023, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period provided any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. The Company adopted this accounting standard in 2017 and has applied the provisions retrospectively to the beginning of the fiscal years presented in the Consolidated Financial Statements. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be included with cash and cash equivalent balances in the statement of cash flows. The guidance is effective for interim and annual reporting periods beginning after December 15, 2017.2024, and requires retrospective application to all prior periods presented in the financial statements. The adoptionCompany is currently evaluating the impact of this ASU will result in an increase of net cash used in investing activities of $45.7 million for the year endedguidance on the consolidated financial statements and disclosures.31, 2017 and a decrease of net cash used in investing activities of $4.7 million and $1.5 million for the years ended December 31, 2016 and 2015.In January 2017,2023, the FASB issued ASU 2017-04, Intangibles—Goodwill2023-09, Other (Topic 350): Simplifying the Test for Goodwill Impairment (“disaggregated information about significant reconciling items by jurisdiction and by nature. ASU 2017-04”). This ASU simplifies the calculation2023-09 also requires entities to disclose their income tax payments (net of goodwill impairment by eliminating Step 2 of the impairment test prescribed by ASC 350. Step 2 requires companiesrefunds) to calculate the implied fair value of their goodwill by estimating the fair value of their assets, other than goodwill,international, federal, and liabilities, including unrecognized assetsstate and liabilities, following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. The calculated net fair value of the assets would then be compared to the fair value of the reporting unit to determine the implied fair value of goodwill, and to the extent that the carrying value of goodwill was less than the implied fair value, a loss would be recognized. Under ASU 2017-04, however, goodwill is impaired when the calculated fair value of a reporting unit is less than its carrying value, and the impairment charge will equal that difference (i.e., impairment will be calculated at the reporting unit level and there will be no need to estimate the fair value of individual assets and liabilities).local jurisdictions. This guidance will beis effective for any goodwill impairment tests performed in fiscal years beginning after December 15, 2019; however, early2024, and requires prospective application with the option to apply it retrospectively. Early adoption is permitted for tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. This ASU clarifies the scope of modification accounting under Topic 718 with respect to changes to the terms or conditions of a share-based payments award. Under this new guidance, modification accounting would not apply if a change to an award does not affect the total current fair value, vesting conditions or the classification of the award. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from the Accumulated Other Comprehensive Income. This ASU gives entities the option toF-13TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)reclassify to retained earnings tax effects related to items in accumulated other comprehensive income that the FASB refers to as having been stranded in accumulated other comprehensive income as a result of tax reform. Entities can apply the provisions of this ASU either in the period of adoption or retrospectively. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect that the adoptionimpact of this ASU will haveguidance on itsthe consolidated financial statements.StatementStatements of Cash Flowsandas well as the supplemental disclosuredisclosures of cash paid for interest, income taxes and income taxes:non-cash investing activities:Year Ended December 31, Year Ended December 31, (in thousands) 2023 2022 2021 (57,609) (269,900) 4,734 Accounts receivable Accounts receivable Retention receivable (100,932) 73,349 (178,774) (19,718) 39,480 (38,616) (32,225) 56,552 139,290 Accounts payable Accounts payable Retention payable 125,757 42,926 (30,985) 24,513 (32,937) (24,426) Accrued expenses and other current liabilities (60,214) (90,530) (128,777) 50,443 47,403 45,055 39,776 26,908 35,299 Supplemental disclosures: Supplemental disclosures: Supplemental disclosures: Interest paid Interest paid Interest paid Income taxes paid (refunded), net Non-cash investing activities: Non-cash investing activities: Non-cash investing activities: Receivable recognized from sale of subsidiary Receivable recognized from sale of subsidiary Receivable recognized from sale of subsidiary Income TaxesIncome before taxes is summarized as follows:135,177 128,072 69,822 18,798 21,043 4,017 153,975 149,115 73,839 income tax (benefit) provision is as follows:following tables disaggregate revenue by end market, customer type and contract type, which the Company believes best depict how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors for the years ended December 31, 2023, 2022 and 2021.12,329 43,850 5,465 6,763 13,039 (362) 3,435 6,573 1,126 22,527 63,462 6,229 (30,021) (3,054) 19,583 5,560 (5,302) 2,735 1,365 (1,813) (23,096) (10,169) 22,318 (569) 53,293 28,547 Year Ended December 31, (in thousands) 2023 2022 2021 Civil segment revenue by end market: Mass transit (includes certain transportation and tunneling projects) $ 1,079,629 $ 1,026,589 $ 1,417,196 Military facilities 348,133 258,028 194,701 Bridges 204,029 265,130 238,345 Commercial and industrial sites 118,880 70,708 70,099 Other 133,194 114,427 175,419 Total Civil segment revenue $ 1,883,865 $ 1,734,882 $ 2,095,760 F-14Year Ended December 31, (in thousands) 2023 2022 2021 Building segment revenue by end market: Government $ 424,130 $ 329,661 $ 291,629 Health care facilities 294,667 178,997 64,042 Education facilities 226,335 140,514 159,929 Mass transit (includes transportation projects) 188,335 132,836 130,923 Commercial and industrial facilities 77,118 251,849 352,265 Hospitality and gaming 59,771 137,640 338,998 Sports and entertainment 55,668 27,774 24,315 (23,485) 43,300 66,001 Total Building segment revenue $ 1,302,539 $ 1,242,571 $ 1,428,102 Year Ended December 31, (in thousands) 2023 2022 2021 Specialty Contractors segment revenue by end market: Commercial and industrial facilities $ 213,003 $ 166,286 $ 139,751 Mass transit (includes certain transportation and tunneling projects) 119,760 350,005 588,162 Multi-unit residential 114,516 112,944 133,085 Government 89,031 61,424 18,476 Water 85,176 79,553 90,887 Health care facilities 57,292 23,001 29,567 15,045 20,089 118,040 Total Specialty Contractors segment revenue $ 693,823 $ 813,302 $ 1,117,968 Year Ended December 31, 2023 (in thousands) Civil Building Specialty
ContractorsTotal Revenue by customer type: State and local agencies $ 1,250,740 $ 718,106 $ 316,473 $ 2,285,319 Federal agencies 400,782 187,199 (14,306) 573,675 232,343 397,234 391,656 1,021,233 Total revenue $ 1,883,865 $ 1,302,539 $ 693,823 $ 3,880,227 Year Ended December 31, 2022 (in thousands) Civil Building Specialty
ContractorsTotal Revenue by customer type: State and local agencies $ 1,273,639 $ 461,193 $ 332,176 $ 2,067,008 Federal agencies 313,791 168,307 22,705 504,803 Private owners 147,452 613,071 458,421 1,218,944 Total revenue $ 1,734,882 $ 1,242,571 $ 813,302 $ 3,790,755
___________________________________________________________________________________________________Year Ended December 31, 2021 (in thousands) Civil Building Specialty
ContractorsTotal Revenue by customer type: State and local agencies $ 1,791,531 $ 363,686 $ 481,255 $ 2,636,472 Federal agencies 205,080 189,508 47,724 442,312 Private owners 99,149 874,908 588,989 1,563,046 Total revenue $ 2,095,760 $ 1,428,102 $ 1,117,968 $ 4,641,830 Year Ended December 31, 2023 (in thousands) Civil Building Specialty
ContractorsTotal Revenue by contract type: Fixed price $ 1,618,081 $ 532,950 $ 577,144 $ 2,728,175 (3,184) 532,538 783 530,137 Unit price 235,085 — 91,992 327,077 Cost plus fee and other 33,883 237,051 23,904 294,838 Total revenue $ 1,883,865 $ 1,302,539 $ 693,823 $ 3,880,227 Year Ended December 31, 2022 (in thousands) Civil Building Specialty
ContractorsTotal Revenue by contract type: Fixed price $ 1,441,547 $ 349,318 $ 675,461 $ 2,466,326 Guaranteed maximum price 1,142 595,907 15,875 612,924 Unit price 274,293 33 85,574 359,900 Cost plus fee and other 17,900 297,313 36,392 351,605 Total revenue $ 1,734,882 $ 1,242,571 $ 813,302 $ 3,790,755
____________________________________________________________________________________________________Year Ended December 31, 2021 (in thousands) Civil Building Specialty
ContractorsTotal Revenue by contract type: Fixed price $ 1,815,079 $ 336,128 $ 988,941 $ 3,140,148 Guaranteed maximum price 2,854 888,345 14,505 905,704 Unit price 268,377 (1,373) 96,782 363,786 Cost plus fee and other 9,450 205,002 17,740 232,192 Total revenue $ 2,095,760 $ 1,428,102 $ 1,117,968 $ 4,641,830 As of December 31, (in thousands) 2023 2022 Retention receivable $ 580,926 $ 585,556 Costs and estimated earnings in excess of billings: Claims 562,646 677,367 Unapproved change orders 512,831 601,681 Other unbilled costs and profits 68,369 98,480 Total costs and estimated earnings in excess of billings 1,143,846 1,377,528 Capitalized contract costs 117,913 49,441 Total contract assets $ 1,842,685 $ 2,012,525 As of December 31, (in thousands) 2023 2022 Retention payable $ 223,138 $ 246,562 Billings in excess of costs and estimated earnings 1,103,530 975,812 Total contract liabilities $ 1,326,668 $ 1,222,374 Year Ended December 31, (in thousands) 2023 2022 2021 United States operations $ (232,512) $ (288,954) $ 118,749 Foreign and U.S. territory operations 49,958 21,284 41,033 Total $ (182,554) $ (267,670) $ 159,782 Year Ended December 31, (in thousands) 2023 2022 2021 Current expense (benefit): Federal $ (178) $ (1,653) $ 20,052 State 1,888 930 7,899 Foreign and U.S. territories 8,153 5,074 11,568 Total current expense: 9,863 4,351 39,519 Deferred expense (benefit): Federal (48,634) (54,526) (13,667) State (17,612) (25,395) 36 Foreign and U.S. territories 1,426 472 (256) Total deferred benefit: (64,820) (79,449) (13,887) Total expense (benefit): $ (54,957) $ (75,098) $ 25,632 ratesfederal tax rate to the income tax (benefit) provision at the Company’s effective tax rate:53,892 35.0 52,190 35.0 25,844 35.0 7,753 5.0 4,614 3.1 3,685 5.0 (53,348) (34.6) 2,622 1.7 3,807 2.6 2,900 3.9 (2,668) (1.7) (4,018) (2.7) (1,499) (2.0) (2,137) (1.4) (4,337) (2.8) (2,346) (1.6) (3,300) (2.3) (2,383) (3.2) (569) (0.4) 53,293 35.7 28,547 38.7 Year Ended December 31, 2023 2022 2021 (dollars in thousands) Amount Rate Amount Rate Amount Rate Federal income tax expense (benefit) at statutory tax rate $ (38,336) 21.0 % $ (56,211) 21.0 % $ 33,554 21.0 % State income taxes, net of federal tax benefit (10,556) 5.8 (21,784) 8.1 8,301 5.2 Share-based compensation 446 (0.2) 1,227 (0.5) 87 0.1 Officers' compensation 5,129 (2.8) 2,840 (1.1) 3,664 2.3 Noncontrolling interests (9,795) 5.4 (3,861) 1.4 (8,872) (5.6) Federal R&D credits (493) 0.3 128 — (1,105) (0.7) Foreign tax rate differences (297) 0.2 (1,438) 0.5 (625) (0.4) Federal claim of right credit — — — — (8,191) (5.1) Valuation allowance 347 (0.2) 7,991 (3.0) — — Other (1,402) 0.6 (3,990) 1.7 (1,181) (0.8) Income tax expense (benefit) $ (54,957) 30.1 % $ (75,098) 28.1 % $ 25,632 16.0 % On22, 2017, the U.S. government enacted significant31, 2021 was favorably impacted by a federal claim of right tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “TCJA”). The TCJA makes broad and complex changes to the U.S.credit resulting in a tax coderate adjustment associated with an adverse 2019 jury verdict that will impact the Company’s financial statements, including but not limited torendered certain income recognized in 2016 at a permanent decrease in the corporate35% federal statutory income tax rate from 35% to 21%, effective January 1, 2018, andbe reversed in 2019 at a one-time transition tax from the inclusion of foreign earnings, which the Company can elect to pay over eight years. Future distributions from foreign subsidiaries, however, will no longer be subject to federal income tax.As a result of the TCJA, the Company recognized an income tax benefit of $53.3 million in 2017, primarily due to the remeasurement of deferred tax assets and liabilities based on the reduced corporate21% federal statutory income tax rate of 21%.The Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting under ASC 740, Income Taxes (“ASC 740”). In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the TCJA is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the TCJA.The one-time transition tax is based on the Company’s total post-1986 earnings and profits (“E&P”) that it previously deferred from U.S. income taxes. The Company recorded a provisional amount for its one-time transition tax liability for its foreign subsidiaries, resulting in an increase in income tax expense of $0.5 million. The Company has not yet completed its calculation of the total post-1986 E&P for these foreign subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when the Company finalizes the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalizes the amounts held in cash or other specified assets.F-15TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)As of December 31, As of December 31, (in thousands) 2023 2022 22,730 36,055 Timing of expense recognition Timing of expense recognition 8,590 10,140 Goodwill 15,618 33,507 46,938 79,702 (381) (460) 46,557 79,242 Deferred tax liabilities: Deferred tax liabilities: (30,019) (34,679) (73,833) (107,081) Intangible assets, due primarily to purchase accounting Intangible assets, due primarily to purchase accounting Fixed assets (17,539) (12,564) (11,343) (29,609) (22,263) (24,970) (154,997) (208,903) (108,440) (129,661) Net deferred tax assets Net deferred tax assets Net deferred tax assets liabilitiesassets are presented in the Consolidated Balance Sheets as follows:As of December 31, As of December 31, (in thousands) 2023 2022 64 1,346 (108,504) (131,007) (108,440) (129,661) Net deferred tax assets Prior to 2017, the Company did not provide for deferred income taxes or foreign withholding tax on basis differences in its non-U.S. subsidiaries that result from undistributed earnings which the Company had the intent and the ability to reinvest in its foreign operations. Due to the enactment of the TCJA, the Company no longer intends to permanently reinvest in its foreign subsidiaries. Any tax on future distributions will be limited to certain state taxes, which would be immaterial.20172023 that, if recognized, would affectimpact the effective tax rate is $6.5$4.8 million. During 2017, the Company recognized a net decrease of $1.1 million in liabilities. The amount of gross unrecognized tax benefits as of December 31, 2016 was $7.6 million. During 2016, the Company recognized a net increase of $4.0 million in liabilities. The amount of gross unrecognized tax benefits as of December 31, 2015 was $3.6 million. During 2015, the Company recognized a net decrease of $4.0 million in liabilities. The Company does not expect any significant release of unrecognized tax benefits within the next twelve months.AThe following is a reconciliation of the beginning and ending amounts of these unrecognized tax benefits for the three years ended December 31, 2017 is as follows:2023:As of December 31, As of December 31, (in thousands) 2023 2022 2021 7,574 3,612 7,636 (1,207) 3,543 (3,073) 128 419 169 (1,120) 6,495 7,574 3,612 Ending balance CompanyCompany's open tax years for a U.S. federal income tax audit are 2018 and later. The 2018 federal income tax return is no longercurrently under examinationaudit by the Internal Revenue Service. The Company has various years open to audit in a number of state and local jurisdictions and is currently under audit by various state and local taxing authorities.(in thousands) Civil Building Specialty
ContractorsTotal Gross goodwill as of December 31, 2021 $ 492,074 $ 424,724 $ 156,193 $ 1,072,991 Accumulated impairment as of December 31, 2021 (286,931) (424,724) (156,193) (867,848) Goodwill as of December 31, 2021 205,143 — — 205,143 2022 activity — — — — Goodwill as of December 31, 2022 205,143 — — 205,143 Current year activity — — — — $ 205,143 $ — $ — $ 205,143 F-16taxing authority regarding any U.S. federal income tax returns for years before 2011 whileyears open for examination under various statefourth quarter of 2023 and local jurisdictions vary.4. Goodwill and Other Intangible AssetsAs of December 31, 2017, 2016 and 2015,concluded goodwill was not impaired. In addition, the Company had $585.0 milliondetermined that no triggering events occurred and no circumstances changed since the date of goodwill allocated to its reporting units as follows: Civil, $415.3 million; Building, $13.5 million; and Specialty Contractors, $156.2 million. The balances presented include historical accumulatedour annual impairment test that would more likely than not reduce the fair value of $76.7 million for the Civil segmentreporting unit below its carrying amount.$411.3 millioncircumstances for changes that indicate the Building segment.In addition,Civil reporting unit goodwill would need to be reevaluated for impairment during future interim periods prior to the annual impairment test. These future events and circumstances include, but are not limited to, changes in the overall financial performance of the Civil reporting unit, as of December 31, 2017well as other quantitative and 2016, the Company hadqualitative factors which could indicate potential triggering events for possible impairment. (1) non-amortizable trade names with a carrying value of $50.4 million; (2) amortizable trade names with a gross carrying value of $51.1 million and accumulated amortization as of December 31, 2017 and 2016 of $16.3 million and $13.8 million, respectively; and (3) amortizable customer relationships with a gross carrying value of $23.2 million and accumulated amortization as of December 31, 2017 and 2016 of $18.9 million and $17.9 million, respectively.As of December 31, 2023 Weighted-Average Amortization Period (in thousands) Cost Accumulated
AmortizationAccumulated Impairment Charge Carrying Value Trade names (non-amortizable) $ 117,600 $ — $ (67,190) $ 50,410 Indefinite Trade names (amortizable) 69,250 (28,123) (23,232) 17,895 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (23,155) (16,645) — N/A Construction contract backlog 149,290 (149,290) — — N/A Total $ 381,940 $ (200,568) $ (113,067) $ 68,305 As of December 31, 2022 Weighted-Average Amortization Period (in thousands) Cost Accumulated
AmortizationAccumulated Impairment Charge Carrying Value Trade names (non-amortizable) $ 117,600 $ — $ (67,190) $ 50,410 Indefinite Trade names (amortizable) 69,250 (25,886) (23,232) 20,132 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (23,155) (16,645) — N/A Construction contract backlog 149,290 (149,290) — — N/A Total $ 381,940 $ (198,331) $ (113,067) $ 70,542 2017, 20162023, 2022 and 2015 totaled $3.5 million, $3.5 million and $3.7 million,2021, respectively. Future amortization expense related to amortizable intangible assets will be approximately $3.5$2.2 million per year for the years 20182024 through 20212028, and $2.6$6.9 million thereafter.the year 2022.The weighted-average amortization period for amortizablenon-amortizable trade names during the fourth quarter of 2023. Based on this assessment, the Company concluded that its non-amortizable trade names were not impaired. In addition, the Company determined that no triggering events occurred and customer relationships is 20no circumstances changed since the date of our annual impairment test that would indicate impairment of its non-amortizable trade names. Other amortizable intangible assets are reviewed for impairment whenever circumstances indicate that the future cash flows generated by the assets might be less than the assets’ net carrying value. The Company had no impairment of intangible assets during the years and 12 years, respectively.5.ended December 31, 2023, 2022 or 2021.consisted of the following as of the dates ofreported on the Consolidated Balance Sheets presented:consisted of the following:As of December 31, As of December 31, (in thousands) 2023 2022 492,734 298,120 147,990 54,650 161,635 152,668 Term Loan B Revolver 76,820 101,558 5,087 4,533 736,276 759,519 (30,748) (85,890) 705,528 673,629 balancebalances to the reported debt balances as of December 31, 20172023 and 2016:2022:
as reported500,000 (7,266) 492,734 300,000 (1,880) 298,120 152,500 (4,510) 147,990 57,000 (2,350) 54,650 200,000 (38,365) 161,635 200,000 (47,332) 152,668 As of December 31, 2023 As of December 31, 2022 (in thousands) Outstanding Debt Unamortized Discounts and Issuance Costs
Debt,
as reportedOutstanding Debt Unamortized Discounts and Issuance Costs 2017 Senior Notes $ 500,000 $ (1,590) $ 498,410 $ 500,000 $ (2,711) $ 497,289 Term Loan B 367,154 (9,410) 357,744 415,438 (11,269) 404,169 costcosts related to the 2017 Credit Facility was $6.2Revolver were $1.4 million and $1.6 million as of December 31, 20172023 and is2022, respectively, and are included in other assets inon the Consolidated Balance Sheet.Sheets.F-17placement.placement offering. Interest on the 2017 Senior Notes is payable in arrears semi-annually in May and November of each year, beginning in November 2017.Prior to May 1, 2020, the Company may redeem the 2017 Senior Notes at a redemption price equal to 100% of their principal amount plus a “make-whole” premium described in the indenture. In addition, prior to May 1, 2020, the Company may redeem up to 40% of the original aggregate principal amount of the notes at a redemption price of 106.875% of their principal amount with the proceeds received by the Company from any offering of the Company’s equity. After May 1, 2020, the20172020 Credit Facility,Agreement, as defined below.above. In addition, the indenture for the 2017 Senior Notes provides for customary covenants, including events of default and restrictions on the payment of dividends and share repurchases.2017 Credit FacilityOn April 20, 2017, the Company entered into a credit agreement (the “2017 Credit Facility”) with SunTrust Bank as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 2017 Credit Facility provides for a $350 million revolving credit facility (the “2017 Revolver”) and a sublimit for the issuance of letters of credit and swingline loans up to the aggregate amount of $150 million and $10 million, respectively, both maturing on April 20, 2022, unless any of the Convertible Notes, as defined below, are outstanding on December 17, 2020, in which case all such borrowings will mature on December 17, 2020 (subject to certain further exceptions). In addition, the 2017 Credit Facility permits additional borrowings in an aggregate amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans.Borrowings under the 2017 Revolver bear interest, at the Company’s option, at a rate equal to a margin over (a) the London Interbank Offered Rate (“LIBOR”) plus a margin of between 1.50% and 3.00% or (b) a base rate (determined by reference to the highest of (i) the administrative agent’s prime lending rate, (ii) the federal funds effective rate plus 50 basis points, (iii) the LIBOR rate for a one-month interest period plus 100 basis points and (iv) 0%), plus a margin of between 0.50% and 2.00%, in each case based on the Consolidated Leverage Ratio (as defined in the 2017 Credit Facility). In addition to paying interest on outstanding principal under the 2017 Credit Facility, the Company will pay a commitment fee to the lenders under the 2017 Revolver in respect of the unutilized commitments thereunder. The Companywill pay customary letter of credit fees. If an event of default occurs and is continuing, the otherwise applicable margin and letter of credit fees will be increased by 2% per annum. The weighted-average annual interest rate on borrowings under the 2017 Revolver was approximately 3.89% during the year ended December 31, 2017.The 2017 Credit Facility contains customary covenants for credit facilities of this type, including maximum consolidated leverage ratios ranging from 4.00:1.00 to 3.25:1.00 over the life of the facility and a minimum consolidated fixed charge coverage ratio of 1.25:1.00. Substantially all of the Company’s subsidiaries unconditionally guarantee the obligations of the Company under the 2017 Credit Facility; additionally, the obligations are secured by a lien on all personal property of the Company and its subsidiaries guaranteeing these obligations.As of December 31, 2017, there was $350.0 million available under the 2017 Revolver, and the Company had not utilized the 2017 Credit Facility for letters of credit. The Company was in compliance with the financial covenants under the 2017 Credit Facility as of December 31, 2017.Repurchase and Redemption of 2010 Senior Notes and Termination of 2014 Credit FacilityOn April 20, 2017, the Company used proceeds from the 2017 Senior Notes and 2017 Revolver to repurchase or redeem its 2010 Senior Notes, to pay off its Term Loan and 2014 Revolver, and to pay accrued but unpaid interest and fees. In addition, the indenture governing the 2010 Senior Notes was satisfied and discharged, and the Company terminated the 2014 Credit Facility.F-18TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)2010 Senior NotesOn October 20, 2010, the Company issued $300 million of 7.625% Senior Notes due November 1, 2018 (the “2010 Senior Notes”) in a private placement offering. As discussed above, on April 20, 2017, the Company repurchased or redeemed the 2010 Senior Notes in full and the related indenture was satisfied and discharged.2014 Credit FacilityOn June 5, 2014, the Company entered into a Sixth Amended and Restated Credit Agreement, as amended (the “2014 Credit Facility”), with Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 2014 Credit Facility provided for a $300 million revolving credit facility (the “2014 Revolver”), a $250 million term loan (the “Term Loan”) and a sublimit for the issuance of letters of credit up to the aggregate amount of $150 million, all maturing on May 1, 2018. Borrowings under both the 2014 Revolver and the Term Loan bore interest based either on Bank of America’s prime lending rate or the London Interbank Offered Rate (“LIBOR”), each plus an applicable margin ranging from 1.25% to 3.00%, contingent upon the latest Consolidated Leverage Ratio.As discussed above, on April 20, 2017, the Company repaid all borrowings under the 2014 Credit Facility and concurrently terminated the facility.Convertible NotesOn June 15, 2016, the Company issued $200 million of 2.875% Convertible Senior Notes due June 15, 2021 (the “Convertible Notes”) in a private placement offering. The Convertible Notes are unsecured obligations and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company. The Convertible Notes bear interest at a rate of 2.875% per year, payable in cash semi-annually in June and December.To account for the Convertible Notes, the Company applied the provisions of ASC 470-20, Debt with Conversion and Other Options (“ASC 470-20”). ASC 470-20 requires issuers of certain convertible debt instruments that may be settled in cash upon conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate. This is done by allocating the proceeds from issuance to the liability component based on the fair value of the debt instrument excluding the conversion feature, with the residual allocated to the equity component and classified in additional paid in capital. The $46.8 million difference between the principal amount of the Convertible Notes ($200.0 million) and the proceeds initially allocated to the liability component ($153.2 million) is treated as a discount on the Convertible Notes. This difference is being amortized as non-cash interest expense using the interest method, as discussed below under Interest Expense. The equity component, however, is not subject to amortization nor subsequent remeasurement.In addition, ASC 470-20 requires that the debt issuance costs associated with a convertible debt instrument be allocated between the liability and equity components in proportion to the allocation of the debt proceeds between these two components. The debt issuance costs attributable to the liability component of the Convertible Notes ($5.1 million) are also treated as a discount on the Convertible Notes and amortized as non-cash interest expense. The debt issuance costs attributable to the equity component ($1.5 million) were netted with the equity component and will not be amortized.The following table presents information related to the liability and equity components of the Convertible Notes:
2017
2016200,000 200,000 (46,800) (46,800) (5,051) (5,051) 13,486 4,519 161,635 152,668 46,800 46,800 (1,543) (1,543) (18,815) (18,815) 26,442 26,442 F-19TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Prior to January 15, 2021, the Convertible Notes will be convertible only under the following circumstances: (1) during the five business day period after any ten consecutive trading day period in which the trading price per $1,000 principal amount of Convertible Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s Common Stock and the conversion rate on each such trading day; (2) if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion rate of 33.0579 (or $39.32) on each applicable trading day; or (3) upon the occurrence of specified corporate events. On or after January 15, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.The Convertible Notes will be convertible at an initial conversion rate of 33.0579 shares of the Company’s Common Stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $30.25. The conversion rate will be subject to adjustment for some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, the Company is required to increase, in certain circumstances, the conversion rate for a holder who elects to convert their Convertible Notes in connection with such a corporate event including customary conversion rate adjustments in connection with a “make-whole fundamental change” described in the indenture. Upon conversion, and at the Company’s election, the Company may satisfy its conversion obligation by paying or delivering, as applicable, cash, shares of its Common Stock or a combination of cash and shares of its Common Stock. As of December 31, 2017, the conversion provisions of the Convertible Notes have not been triggered.$61.1$26.4 million and $84.9$37.0 million at December 31, 20172023 and 2016,2022, respectively, with interest rates ranging from 1.90%from 2.54% to 5.93%7.32% with equal monthly installment payments over periods up to ten5 years with additional balloon payments of $12.4 million in 2021 and $6.3 million in 2022 on the remaining loans outstanding at December 31, 2017.. The aggregate balance of mortgage loans was approximately $15.7$8.4 million and $16.7$11.6 million at December 31, 20172023 and 2016,2022, respectively, with interest rates ranging from a fixed 2.50% 2.25% to LIBORSOFR plus 3%2.00% and equal monthly installment payments over periods up to seven10 years with additional balloon payments of $2.6 million in 2018, $2.9 million in 2021 and $7.0 million in 2023..30,748 12,194 5,321 218,868 7,457 507,319 781,907 (45,631) 736,276 2024 $ 117,431 2025 514,444 2026 10,336 2027 264,778 2028 747 Thereafter 3,009 910,745 Less: Unamortized discounts and issuance costs 11,000 Total $ 899,745 F-20Expenseexpense as reported in the Consolidated Statements of Income consistsOperations consisted of the following:For the year ended December 31, (in thousands) 2023 2022 2021 Cash interest expense: Interest on Term Loan B $ 38,266 $ 27,880 $ 24,590 Interest on 2017 Senior Notes 34,375 34,375 34,375 Interest on Revolver 4,924 1,642 1,479 Interest on convertible notes — — 921 Other interest 2,134 2,044 1,905 Total cash interest expense 79,699 65,941 63,270 Amortization of discount and debt issuance costs on Term Loan B 3,592 2,084 2,175 Amortization of debt issuance costs on 2017 Senior Notes 1,121 1,045 973 Amortization of debt issuance costs on Revolver 745 568 568 Amortization of discount and debt issuance costs on convertible notes — — 2,040 Total non-cash interest expense 5,458 3,697 5,756 Total interest expense $ 85,157 $ 69,638 $ 69,026 23,967 5,517 6,926 22,875 22,875 4,455 19,201 14,368 5,750 3,115 3,261 3,623 5,805 1,913 51,789 48,814 43,048 516 962 308 1,002 979 1,703 5,447 1,116 8,967 4,519 5,139 17,595 10,968 2,095 69,384 59,782 45,143 the Convertible NotesTerm Loan B were 7.13% and 9.39%11.16%, respectively, for the year ended December 31, 2017.LeasesThe Company leases certain construction equipment, vehicles2023.office space under non-cancellable operating leases, with future minimum rent payments as of December 31, 2017 as follows:Contingencies18,420 12,424 8,980 6,240 5,524 14,898 66,486 (2,291) 64,195 Rental expense under operating leases of construction equipment, vehicles and office space was $27.4 million in 2017, $28.2 million in 2016 and $17.4 million in 2015.6. Contingencies and Commitmentsareother legal proceedings and forms of dispute resolution in the ordinary course of business, including but not limited to disputes over contract payment and/or performance-related issues (such as disagreements regarding delay or a change in the scope of work of a project and/or the price associated with that change) and other matters incidental to the Company’s business. In accordance with ASC 606, the Company makes assessments of these types of matters on a routine basis and, to the extent permitted by ASC 606, estimates and records recovery related to these matters as a form of variable consideration at the most likely amount the Company expects to receive, as discussed further in Note 1(d) and Note 4. In addition, the Company is contingently liable for commitmentslitigation, performance guarantees and performance guaranteesother commitments arising in the ordinary course of business. The Companybusiness, which are accounted for in accordance with ASC 450, Contingencies. Management reviews these matters regularly and certain ofupdates or revises its customers have made claims arising from the performance under their contracts. The Company recognizes certain significant claims for recovery of incurred cost when it is probable that the claim will result in additional contract revenueestimates as warranted by subsequent information and when the amount of the claim can be reliably estimated.developments. These assessments require judgments concerning matters that are inherently uncertain, such as litigation developments and outcomes, the anticipated outcome of negotiations the number of future claims, and the estimated cost of both pendingresolving disputes. Consequently, these assessments are estimates, and future claims.actual amounts may vary from such estimates. In addition, because most contingenciessuch matters are typically resolved over long periods of time, the Company’s assets and liabilities may change inover time should the future due to various factors.circumstances dictate. The description of the legal proceedings listed below include management’s assessment of those proceedings. Management believes that,F-21TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)theseother matters is not expected to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.Several matters are in the litigation and dispute resolution process. The following discussion provides a background and current statusmore significant matters.Long Island Expressway/Cross Island Parkway MatterThe Company reconstructed the Long Island Expressway/Cross Island Parkway Interchange for the New York State Department of Transportation (the “NYSDOT”). The $130 million project was substantially completed in January 2004 and was accepted by the NYSDOT as complete in February 2006. The Company incurred significant added costs in completing its work and suffered extended schedule costs due to numerous design errors, undisclosed utility conflicts, lack of coordination with local agencies andmaterial pending legal proceedings, other interferences for which the Company believes the NYSDOT is responsible.In March 2011, the Company filed its claim and complaint with the New York State Court of Claims and servedthan ordinary routine litigation incidental to the New York State Attorney General’s Office, seeking damages in the amount of $53.8 million. In May 2011, the NYSDOT filed a motion to dismiss the Company’s claim on the grounds that the Company had not provided required documentation for project closeout and filing of a claim. In September 2011, the Company reached agreement on final payment with the Comptroller’s Office on behalf of the NYSDOT, which resulted in an amount of $0.5 million payable to the Company and formally closed out the project allowing the Company to re-file its claim. The Company re-filed its claim in the amount of $53.8 million with the NYSDOT in February 2012 and with the Court of Claims in March 2012. In May 2012, the NYSDOT served its answer and counterclaims in the amount of $151 million alleging fraud in the inducement and punitive damages related to disadvantaged business enterprise (“DBE”) requirements for the project. The Court subsequently ruled that NYSDOT’s counterclaims may only be assertedis as a defense and offset to the Company’s claims and not as affirmative claims. In November 2014, the Appellate Division First Department affirmed the dismissal of the City’s affirmative defenses and affirmative counterclaims based on DBE fraud. The Company does not expect the counterclaims to have any material effect on its consolidated financial statements. Discovery was completed during 2017 and the Company is currently awaiting the establishment of a trial date.Management has made an estimate of the total anticipated recovery on this project, and such estimate is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the consolidated financial statements at that time.Fontainebleau MatterDesert Mechanical, Inc. (“DMI”) and Fisk Electric Company (“Fisk”), wholly owned subsidiaries of the Company, were subcontractors on the Fontainebleau Project in Las Vegas (“Fontainebleau”), a hotel/casino complex with approximately 3,800 rooms. In June 2009, Fontainebleau filed for bankruptcy protection, under Chapter 11 of the U.S. Bankruptcy Code, in the Southern District of Florida.DMI and Fisk filed liens in Nevada for approximately $44 million, representing unreimbursed costs to date and lost profits, including anticipated profits. Other unaffiliated subcontractors have also filed liens. In June 2009, DMI filed suit against Turnberry West Construction, Inc., the general contractor, in the 8th Judicial District Court, Clark County, Nevada (the “District Court”), and in May 2010, the court entered an order in favor of DMI for approximately $45 million.In January 2010, the Bankruptcy Court approved the sale of the property to Icahn Nevada Gaming Acquisition, LLC, and this transaction closed in February 2010. As a result of a July 2010 ruling relating to certain priming liens, there was approximately $125 million set aside from this sale that is available for distribution to satisfy the creditor claims based on seniority. At that time, the total estimated sustainable lien amount was approximately $350 million. The project lender filed suit against the mechanic’s lien claimants, including DMI and Fisk, alleging that certain mechanic’s liens are invalid and that all mechanic’s liens are subordinate to the lender’s claims against the property. The Nevada Supreme Court ruled in October 2012 in an advisory opinion at the request of the Bankruptcy Court that lien priorities would be determined in favor of the mechanic lien holders under Nevada law.In October 2013, a settlement was reached by and among the Statutory Lienholders and the other interested parties. The Bankruptcy Court appointed a mediator to facilitate the execution of that settlement agreement, but the parties were unable to settle. During the third quarter of 2017, DMI filed a motion seeking permission to file an action in Nevada; the motion was granted by the Bankruptcy Court.F-22TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Management has made an estimate of the total anticipated recovery on this project, and such estimate is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the consolidated financial statements at that time.Honeywell Street/Queens Boulevard Bridges MatterIn 1999, the Company was awarded a contract for reconstruction of the Honeywell Street/Queens Boulevard Bridges project for the City of New York (the “City”). In June 2003, after substantial completion of the project, the Company initiated an action to recover $8.8 million in claims against the City on behalf of itself and its subcontractors. In March 2010, the City filed counterclaims for $74.6 million and other relief, alleging fraud in connection with the DBE requirements for the project. In May 2010, the Company served the City with its response to the City’s counterclaims and affirmative defenses. In August 2013, the Court granted the Company’s motion to dismiss the City’s affirmative defenses and counterclaims relating to fraud.In January 2017, the Court granted the City’s motion for summary judgment and dismissed the Company’s claim against the City. The Company has filed a notice of appeal. The Court also granted the Company’s motion for summary judgment for release of retention plus interest from 2010 for an aggregate amount of approximately $1.2 million, which the City paid during the fourth quarter of 2017.The Company does not expect ultimate resolution of this matter to have a material effect on its consolidated financial statements.Westgate Planet Hollywood MatterTutor-Saliba Corporation (“TSC”), a wholly owned subsidiary of the Company, was contracted to construct a timeshare development project in Las Vegas, which was substantially completed in December 2009. The Company’s claims against the owner, Westgate Planet Hollywood Las Vegas, LLC (“WPH”), relate to unresolved owner change orders and other claims. The Company filed a lien on the project in the amount of $23.2 million and filed its complaint with the District Court, Clark County, Nevada. Several subcontractors have also recorded liens, some of which have been released by bonds and some of which have been released as a result of subsequent payment. WPH has posted a mechanic’s lien release bond for $22.3 million.WPH filed a cross-complaint alleging non-conforming and defective work for approximately $51 million, primarily related to alleged defects, misallocated costs and liquidated damages. WPH revised the amount of their counterclaims to approximately $45 million.Following multiple post-trial motions, final judgment was entered in this matter on March 20, 2014. TSC was awarded total judgment in the amount of $19.7 million on its breach of contract claim, which includes an award of interest up through the date of judgment, plus attorney’s fees and costs. WPH was awarded total judgment in the amount of $3.1 million on its construction defect claims, which includes interest up through the date of judgment. WPH and its Sureties have filed a notice of appeal. TSC has filed a notice of appeal on the defect award. In July 2014, the Court ordered WPH to post an additional supersedeas bond on appeal, in the amount of $1.7 million, in addition to the lien release bond of $22.3 million, which increases the security up to $24.0 million. In May 2017, the Nevada Supreme Court issued its ruling on the appeal by WPH and its Sureties. With only minor adjustments, the Nevada Supreme Court affirmed the lower district court’s judgment, and following further proceedings in the lower district court, the anticipated final recovery to the Company is estimated to exceed $20 million, including interest and recovery of certain attorneys’ fees and costs, of which the Company collected more than $16 million in 2017. In December 2017 and in January 2018, the Court issued several post-appeal orders confirming its previous rulings.The Company does not expect ultimate resolution of this matter to have any material effect on its consolidated financial statements. Management has made an estimate of the total anticipated recovery on this project and such estimate is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the consolidated financial statements at that time.U.S. Department of Commerce, National Oceanic and Atmospheric Administration MatterRudolph and Sletten, Inc. (“R&S”), a wholly owned subsidiary of the Company, entered into a contract with the United States Department of Commerce, National Oceanic and Atmospheric Administration (“NOAA”) for the construction of a 287,000 square-foot facility for NOAA’s Southwest Fisheries Science Center Replacement Headquarters and Laboratory in La Jolla, California. The contract work began on May 24, 2010 and was substantially completed in September 2012. R&S incurred significant additional costs as a result of design errors and omissions, NOAA’s unwillingness to correct design flaws in a timely fashion and a refusal to negotiate the time and pricing associated with change order work. R&S filed claims against NOAA for contract adjustments related to the unresolved owner change orders, delays, design deficiencies and other claims.F-23TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)In March 2017, the parties agreed to a proposed settlement, which was subsequently approved and paid by the government in the third quarter of 2017. The settlement did not have a material impact on the Company’s financial results for the year ended December 31, 2017.Five Star Electric MatterIn the third quarter of 2015, Five Star Electric Corp. ("Five Star"), a wholly owned subsidiary of the Company that was acquired in 2011, entered into a tolling agreement (which has since expired) related to an ongoing investigation being conducted by the United States Attorney’s Office for the Eastern District of New York (“USAO EDNY”). Five Star has been cooperating with the USAO EDNY since late June 2014, when it was first made aware of the investigation, and has provided information requested by the government related to its use of certain minority-owned, women-owned, small and disadvantaged business enterprises and certain of Five Star’s employee compensation, benefit and tax practices.As of December 31, 2017, the Company cannot predict the ultimate outcome of the investigation and cannot reasonably estimate the potential loss or range of loss that Five Star or the Company may incur or the impact of the results of the investigation on Five Star or the Company.large large-large diameterlarge-diameter bored tunnel required the use of a tunnel boring machine (“TBM”). In December 2013, the TBM struck a steel pipe, installed by WSDOT as a well casing for an exploratory well. The TBM was significantly damaged and was required to be shut down for repair.repaired. STP has asserted that the steel pipe casing was a differing site condition that WSDOT failed to properly disclose. The Disputes Review Board mandated by the contract to hear disputes issued a decision finding the steel casing was a Type I (material) differing site condition. WSDOT hasdid not acceptedaccept that finding.(“Washington Superior Court”) seeking declaratory relief concerning contract interpretation, as well as damages as a result of the Insurers’ breach of their obligations under the terms of the Policy. STP is also asserting extra-contractual and statutory claims against the Insurers. STP submitted damages to the Insurers in the King County lawsuit in the amount of $532 million. WSDOT is deemed a plaintiff since WSDOT is an insured under the Policy and had filed its own claim for damages. Hitachi Zosen (“Hitachi”), the manufacturer of the TBM, has also joined the case as a plaintiff for costs incurred to repair the damages to the TBM. TrialOctober 2018. Discovery is ongoing.foralleging breach of contract, alleging STP’s delaysseeking $57.2 million in delay-related damages and failure to perform andseeking declaratory relief concerning contract interpretation. STP filed its answer to WSDOT’s complaint andsubsequently filed a counterclaim against WSDOT. The jury trial between STP and WSDOT commenced on October 7, 2019 and Hitachi. Trial is setconcluded on December 13, 2019, with a jury verdict in favor of WSDOT awarding them $57.2 million in damages. The Company recorded the impact of the jury verdict during the fourth quarter of 2019, resulting in a pre-tax charge of $166.8 million, which included $25.7 million for April 2019. Discovery is ongoing.Asthe Company’s 45% proportionate share of December 31, 2017, the Company has concluded that$57.2 million in damages awarded by the potentialjury to WSDOT. The charge was for a material adverse financial impact duenon-cash write-downs primarily related to the Insurers’ denial of coverage and WSDOT’s legal actions is neither probable nor remote, and the potential loss or range of loss is not reasonably estimable. With respect to STP’s claims against the Insurers, WSDOT and Hitachi, management has included an estimate of the total anticipated recovery, concluded to be both probable and reliably estimable, in receivables or costs and estimated earnings in excess of billings and receivables that the Company previously recorded to date. Toreflect its expected recovery in this case.extent new facts become known orWashington Supreme Court on July 12, 2022, which was denied by the final recoveries varySupreme Court on October 10, 2022. On October 18, 2022, STP paid the damages and associated interest from the estimate,judgment, which included the impactCompany’s proportionate share of $34.6 million. As a result, the change will be reflected in the financial statements at that time.7. Other Income, NetOn May 31, 2017, the Companylawsuit between STP and WSDOT has concluded.settlement agreementcontract with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”the George Washington Bridge Bus Station Development Venture, LLC (the “Developer”), as successor in interest to Banc of America Securities LLC and Bank of America, N.A. (collectively “BofA”), to resolverenovate the pending litigation between the Company and Merrill Lynch. The litigation, which was filedGeorge Washington Bridge Bus Station, a mixed-use facility owned by the CompanyPort Authority of New York and New Jersey (the “Port Authority”) that serves as a transit facility and retail space. The $100 million project experienced significant design errors and associated delays, resulting in 2011, relateddamages to TPBC and its subcontractors, including WDF and Five Star, wholly owned subsidiaries of the Company. The facility opened to the purchase by the Company of certain auction-rate securities from BofA.public on May 16, 2017.F-246, 2017,4, 2019, the Company receivedarbitration panel, as confirmed by the $37.0U.S. District Court in the Southern District of New York, issued a writ of attachment against Developer for $23 million cashof the $29 million discussed above. On October 7, 2019, the Developer filed for bankruptcy protection in the Southern District of New York under Chapter 11 of the Bankruptcy Code. The filing for bankruptcy stayed the pending arbitration proceedings. TPBC appeared in the bankruptcy proceedings on October 8, 2019 and filed a Proof of Claim in the amount of $113 million on December 13, 2019.payment agreedof their disputes. As part of the settlement, the Port Authority waived the enforcement of its right to seek a “cure” pursuant to its lease agreement with the Developer, which requires construction costs be paid prior to any sale of the leasehold, the sole asset in the Developer’s bankruptcy estate to be distributed in this bankruptcy. On July 14, 2020, the bankruptcy court conducted a hearing to determine (1) whether to approve the settlement agreement between the Developer, secured lenders and the pending litigationPort Authority; and (2) whether TPBC can assert third-party beneficiary rights to the lease agreement and require that prior to the sale of the leasehold, any outstanding costs owed to contractors for the cost of building the project must be paid pursuant to the lease agreement’s “cure” provisions. On August 12, 2020, the bankruptcy court approved the settlement and denied TPBC’s third-party beneficiary rights under the lease agreement. On August 20, 2020, TPBC filed an appeal with the U.S. District Court for the Southern District of New York seeking to challenge the denial of its third-party beneficiary rights under the lease agreement’s “cure” provisions to avoid being subordinate to the claims of the secured lenders in the bankruptcy proceedings, which was dismisseddenied by the U.S. District Court on August 4, 2021. TPBC filed an appeal with prejudice. Neither party madethe U.S. Court of Appeals for the Second Circuit on August 20, 2021, which conducted oral argument on October 27, 2022. On April 10, 2023, the Second Circuit affirmed the bankruptcy court’s and district court’s denials of TPBC’s third-party beneficiary rights under the project’s lease agreement’s “cure” provisions and concluded that TPBC’s claims were not otherwise entitled to priority treatment under the Bankruptcy Code and should therefore be treated as unsecured claims that are subordinate to the claims of the secured lenders in the Developer’s bankruptcy case. As a result of this adverse decision from the Second Circuit, the Company recorded a non-cash, pre-tax charge to income (loss) from construction operations of $83.6 million in the first quarter of 2023.TPBC has no further avenues to recover its costs from the Developer or the bankruptcy-related actions, nor does the Developer have any admissionability to recover its claims against TPBC, and these lawsuits have now concluded.liability or wrongdoing,the project, seeking the same $113 million in damages pursuant to the lease agreement between the Port Authority and the settlement agreement includes mutual releasesDeveloper. On August 20, 2018, the Port Authority filed a motion to dismiss all causes of all claimsaction, which was denied by the court on July 1, 2019. The Port Authority appealed this decision on July 15, 2019. On February 18, 2021, the Appellate Division affirmed in part and liabilities relatedreversed in part the trial court's denial of the Port Authority's motion to dismiss TPBC’s causes of action. On April 11, 2022, the court granted the Port Authority’s motion to dismiss on statutory notice grounds. The Company filed a notice of appeal on April 28, 2022, which was fully briefed, and was argued on September 21, 2023. On November 14, 2023, the Appellate Division affirmed the dismissal of the lawsuit. This lawsuit is now concluded.subject matterfederal bankruptcy court on September 21, 2021. The Port Authority filed a motion to dismiss on March 4, 2022, which the federal bankruptcy court granted on September 30, 2022. This lawsuit is now concluded.litigation.recognizedleases certain office space, construction and office equipment, vehicles and temporary housing generally under non-cancelable operating leases. Leases with an initial term of one year or less are not recorded on the settlement asbalance sheet, and the Company generally recognizes lease expense for these leases on a gain duringstraight-line basis over the second quarterlease term. As of 2017December 31, 2023, the Company’s operating leases have remaining lease terms ranging from less than one year to 15 years, some of which include options to renew the leases. The exercise of lease renewal options is generally at the Company’s sole discretion. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.reported it as a component oflong-term operating lease liabilities are included in accrued expenses and other income, net in itscurrent liabilities, and other long-term liabilities, respectively, on the Consolidated Statement of IncomeBalance Sheets. ROU assets represent the Company’s right to use an underlying asset for the yearlease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The present value of future lease payments are discounted using either the implicit rate in the lease, if known, or the Company’s incremental borrowing rate for the specific lease as of the lease commencement date. The ROU asset is also adjusted for any prepayments made or incentives received. The lease terms include options to extend or terminate the lease only to the extent it is reasonably certain any of those options will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company accounts for lease components (e.g., fixed payments) separate from the non-lease components (e.g., common-area maintenance costs).The Company does not have any material financing leases.2017.2023 and 2022:For the year ended December 31, (in thousands) 2023 2022 Operating lease expense $ 14,416 $ 15,278 54,451 57,713 68,867 72,991 Less: Sublease income 788 766 Total lease expense $ 68,079 $ 72,225 8.As of December 31, (dollars in thousands) Balance Sheet Line Item 2023 2022 Assets ROU assets Other assets $ 48,878 $ 50,825 Total lease assets $ 48,878 $ 50,825 Liabilities Current lease liabilities Accrued expenses and other current liabilities $ 6,275 $ 6,709 Long-term lease liabilities Other long-term liabilities 47,781 49,176 Total lease liabilities $ 54,056 $ 55,885 Weighted-average remaining lease term 10.3 years 11.0 years Weighted-average discount rate 12.13 % 11.77 % As of December 31, (in thousands) 2023 2022 Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ (14,733) $ (14,247) Non-cash activity: ROU assets obtained in exchange for lease liabilities $ 6,465 $ 16,349 Operating Leases 2024 $ 11,975 2025 10,622 2026 8,785 2027 7,349 2028 7,229 Thereafter 51,213 Total lease payments 97,173 Less: Imputed interest 43,117 Total $ 54,056 3, 2017,10, 2018, the Company adopted the Tutor Perini Corporation Omnibus Incentive Compensation Plan (“Compensation(the “Current Plan”), which was approved by the Company’s shareholders on May 24, 2017. Additionally,23, 2018. The Current Plan effected the merger of the Company’s Amended and Restated Tutor Perini Corporation Long-Term Incentive Plan, (“as amended and restated on October 2, 2014 (the “2014 Plan”) and the Tutor Perini Corporation Incentive Plan”Compensation Plan adopted on April 3, 2017 (the “2017 Plan,” together with Compensationthe 2014 Plan and the Current Plan, the “Plans”) is still active. The Plans provide for various types of share-based grants, including restricted and unrestricted stock units and stock options. Restricted and unrestricted stock units give the holder the right to exchange their stock units for shares of the Company’s Common Stock on a one-for-one basis. Per the Plans, stock options give the holder the right to purchase shares of the Company’s Common Stock subsequent to the grant date at an defined exercise price equal to or greater than the fair value of the Company’s Common Stock on the date of the stock option’s award. Restricted stock units and stock options are usually subject to certain service and performance conditions and may not be sold or otherwise transferred until those restrictions have been satisfied; however, unrestricted stock units have no such restrictions. The term for stock options is limited to 10 years from the date of grant. The Compensation Plan allows for 2,335,000 shares of the Company’s Common Stock to be issued.. As of December 31, 2017,2023, there were 1,554,364987,001 shares of common stock available to be grantedfor grant under the Compensation Plan and 405,529 shares authorized to be issued under the Incentive Plan; however, as discussed in the Company’s Definitive Proxy Statement (Schedule 14A) filed on April 13, 2017, the Company will not issue the 405,529 shares remaining in the IncentiveCurrent Plan. As of December 31, 2017,2023, the Incentive PlanPlans had an aggregate of 4,360,018 of restricted stock units2,682,894 RSUs and stock options from outstanding, historical awards that either have not vested or have vested but have not been exercised.share-basedRSU grants in cash or shares. During the year ended December 31, 2017, the Company paid approximately $0.6 million to settle share-based awards.PlanPlans is also based on the number of units granted in a given year, as determined by ASC 718, rather than the number of units awarded in a given year. As a result, as of December 31, 2017, the Company had outstanding awards with 214,000 restricted stock units and 194,000 stock options that had not been granted yet. These units will be granted in 2018 and 2019 when the performance targets for those respective years are established. F-25restricted stock unit andRSU, stock option, CPSU and DCA activity:1,056,597 26.54 1,989,000 19.63 321,500 23.07 259,000 16.07 (281,560) 23.89 (250,000) 15.97 (370,940) 27.07 725,597 25.28 1,998,000 19.62 483,387 19.14 274,000 16.20 (52,500) 18.74 (97,500) 12.72 1,156,484 22.64 2,174,500 19.50 RSUs RSUs Stock Options CPSUs DCAs Number Number Weighted-
Average
Grant Date
Fair Value
Per ShareNumber Weighted-
Average
Exercise/
(Strike) Price
Per ShareNumber Number Outstanding as of December 31, 2020 1,064,000 30.02 539,000 24.54 (20,985) 23.91 (19,466) 26.56 (801,515) 19.38 (140,000) 21.41 1,397,984 30.11 2,554,034 20.45 Outstanding as of December 31, 2021 Granted Expired or cancelled Vested/exercised Outstanding as of December 31, 2022 Granted Expired or cancelled Vested/exercised Outstanding as of December 31, 2023 Vested and expected to vest at December 31, 2023 units,awards, which are generally issued to the non-employee members of the Company’s Board of Directors as part of their annual retainer fees:21.93 21.67 26.26 Unrestricted Stock Awards Year Number Weighted-Average
Grant Date
Fair Value Per Share2021 101,894 $ 15.47 2022 165,030 10.63 2023 302,112 5.66 unitsawards issued during 2017, 20162023, 2022 and 20152021 was approximately $2.6$1.7 million, $1.4$1.8 million and $1.5$1.6 million, respectively.restricted stock unitsRSUs that vested during 2017, 20162023, 2022 and 20152021 was approximately $25.3$4.1 million, $1.0$5.7 million and $8.0$5.3 million, respectively. The aggregate intrinsicfair value representing the difference between the market value on the date of exerciseCPSUs and the option price of the stock options exercisedDCAs that vested during 2017 and 20162023 was $1.3approximately $1.1 million and $1.1$0.2 million, with a corresponding tax benefit of $0.6 million and $0.5 million, respectively. There were no CPSUs or DCAs that vested during 2022 or 2021. As of December 31, 2017,2023, the balance of unamortized restricted stockRSU, CPSU and stock optionDCA expense was $22.5$7.2 million, $4.4 million and $3.7$1.6 million, respectively, which willis expected to be recognized over weighted-average periods of 2.61.6 years for restricted stock units and 2.2RSUs, 1.9 years for CPSUs and 2.3 years for DCAs. As of December 31, 2023, the remaining balance of unamortized stock options. 2,554,0341,435,265 outstanding stock options as of December 31, 20172023 had an intrinsic value of $13.6 millionzero and a weighted-average remaining contractual life of 4.42.9 years. Of those outstanding options: a) 1,988,034(1) 1,335,265 were exercisable with an intrinsic value of $12.8 million,zero, a weighted-average exercise price of $19.31$23.64 per share and a weighted-average remaining contractual life of 3.32.6 years; b) 566,000, with an(2) 100,000 have not vested and have no intrinsic value, of $0.7 million, a weighted-average exercise price of $24.27$19.24 per share and a weighted-average remaining contractual life of 8.2 years, have been7.2 years.but have not vested;in either 2023 and c) of the 566,000 granted but unvested options, 527,816 are expected to vest.F-26TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)arefor grants made in the year ended December 31, 2021 were as follows:539,000 274,000 259,000 13.11 5.31 12.48 1.81 1.2 1.3 4.8 4.2 4.7 43.09 40.6 45.5 Year Ended December 31, (a)2021 Calculated using the simplified method due to the terms of theTotal stock options and the limited pool of grantees.100,000 Weighted-average grant date fair value $ 15.21 Weighted-average assumptions: Risk-free rate 1.4 % (b)Calculated using historical volatility of the Company’s Common Stock over periods commensurate with the expectedthe option.options(a)6.5 years 73.7 % Expected quarterly dividends $ — respective years ended December 31, 2017, 20162023, 2022 and 2015,2021, the Company recognized, as part of general and administrative expenses, costs for share-based payment arrangements for employees of $19.6$10.5 million $13.4, $7.4 million and $9.5 million.$10.0 million, respectively. Additionally for the same periods, the Company also recognized as part of general and administrative expenses, costs for share-based awards to non-employee directors of $1.7 million, $1.6 million $1.4 million and $1.5$1.6 million, respectively. The aggregate tax benefits for these awards were approximately $8.7$0.3 million $6.1, $0.9 million and $4.6$1.2 million, for the respective periods.9. During the year ended F-27TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)AThe following table sets forth a summary of net periodic benefit cost is as follows:Year Ended December 31, Year Ended December 31, (in thousands) 2023 2022 2021 3,919 4,153 4,055 850 600 (4,358) (4,803) (5,021) 1,897 1,745 1,869 2,308 1,695 903 3.90 4.10 3.75 Discount rate Discount rate 5.16 % 2.65 % 2.24 % 6.00 6.00 6.50 Expected return on assets 6.25 % 5.75 % 5.75 % Rate of increase in compensation N/A N/A 20182024 and the actual asset allocation as of December 31, 20172023 and 20162022 by asset category are as follows:Percentage of Plan Assets as of December 31, Percentage of Plan Assets as of December 31, Actual Allocation Actual Allocation Actual Allocation Asset Category 2023 2022 5 3 4 Cash 5 % 6 % 5 % 37 41 47 Domestic Domestic 28 31 28 30 25 21 100 100 100 Total 100 % 100 % 100 % As of December 31, 2017 and 2016, plan assets included approximately $30.7 million and $39.1 million, respectively, of investments in hedge funds and equity partnerships which do not have readily determinable fair values. The underlying holdings of the funds were comprised of a combination of assets for which the estimate of fair value is determined using information provided by fund managers.$2.8$2.4 million to itsits defined benefit pension plan in 2018.6,748 6,798 6,781 6,785 6,721 32,410 66,243 (in thousands) Year ended December 31, 2024 $ 6,806 2025 6,726 2026 6,652 2027 6,531 2028 6,382 2029-2033 28,923 Total $ 62,020 F-2820172023 and 2016,2022, and a summary of the funded status as of December 31, 20172023 and 2016:2022:Year Ended December 31, Year Ended December 31, (in thousands) 2023 2022 Balance at beginning of year Balance at beginning of year 66,057 72,296 9,224 (1,909) 2,838 2,025 (6,578) (6,355) 71,541 66,057 Year Ended December 31, Year Ended December 31, (in thousands) 2023 2022 Balance at beginning of year Balance at beginning of year 103,681 105,942 3,919 4,153 850 600 3,854 308 492 (967) (6,578) (6,355) 106,218 103,681 As of December 31, As of December 31, (in thousands) 2023 2022 (34,677) (37,624) (279) (271) Current liabilities Current liabilities (34,398) (37,353) (34,677) (37,624) $58.7$44.8 million and $61.1$49.3 million for the years endedas of December 31, 20172023 and 2016,2022, respectively.In 2017, net other comprehensive income of $2.4 million consisted of reclassification adjustments for the amortization of previously existing actuarial losses and net actuarial gains arising during the period. In 2016 and 2015, net actuarial losses arising during the years were partially offset by reclassification adjustments for the amortization of previously existing actuarial losses and resulted in net other comprehensive losses of $4.3 and $0.7 million, respectively.The estimated amount of the net accumulated loss (consisting of net actuarial losses) that will be amortized from accumulated other comprehensive loss into net period benefit cost in 2018 is $2.1 million.3.5%5.0% and 5.2% as of December 31, 20172023 and 3.9% as of December 31, 2016.2022, respectively. The discount rate used for the accumulated post-retirement obligation was derived using a blend of U.S. Treasury and high-quality corporate bond discount rates.6.0%6.3% for 2017both 2023 and 2016.2022. The expected long-term rate of return on assets assumption was developed considering forward looking capital market assumptions and historical return expectations for each asset class assuming the plans’ target asset allocation and full availability of invested assets.Fundmarkets. Hedge fund strategy typesmarkets and include long-short, event-driven, multi-strategy,investments in both long and short equity partnerships and distressed credit.Registered investment companiesMutual funds are public investment vehicles valued using the Net Asset Value (NAV)(“NAV”) of shares held by the pension plan at year-end. Equity and fixedFixed income funds are valued based on quoted market prices in active markets. Closely held funds, held by the plan, which are only available through private offerings, do not have readily determinable fairF-29TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)it isare generally based on the net asset valueNAV per share or its equivalent.10:12:As of December 31, 2023 As of December 31, 2022 Fair Value Hierarchy Fair Value Hierarchy (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,464 $ — $ — $ 3,464 $ 2,757 $ — $ — $ 2,757 Fixed income funds 1,520 3,063 — 4,583 1,564 2,872 — 4,436 Mutual funds 41,687 — — 41,687 37,364 — — 37,364 $ 46,671 $ 3,063 $ — $ 49,734 $ 41,685 $ 2,872 $ — $ 44,557 Equity partnerships 3,826 4,078 Hedge fund investments 4,322 7,522 8,148 11,600 Total $ 46,671 $ 3,063 $ — $ 57,882 $ 41,685 $ 2,872 $ — $ 56,157 2,390 2,390 2,437 2,437 18,031 18,031 14,023 14,023 20,372 20,372 10,489 10,489 40,793 40,793 26,949 26,949 8,711 6,931 22,037 32,177 30,748 39,108 40,793 71,541 26,949 66,057
As of December 31, 2023 and 2022, pension plan assets included approximately $8.1 million and $11.6 million, respectively, of investments in hedge funds and equity partnerships which do not have readily determinable fair values. The underlying holdings of the funds were composed of a combination of assets for which the estimate of fair value is determined using information provided by fund managers.(a)Closely held funds in private investment were measured at fair value using NAV and were not categorized in the fair value hierarchy. Although the investments were not categorized within the fair value hierarchy, the holdings of these private investment funds were comprised of a combination of Level 1, 2 and 3 investments, but were not categorized in the fair value hierarchy because they were measured at NAV using the practical expedient under ASC 820, Fair Value Measurement (“ASC 820”).detailed as follows:As of December 31, 2023 As of December 31, 2023 As of December 31, 2022 (in thousands) Pension
PlanBenefit
Equalization
PlanTotal Pension
PlanBenefit
Equalization
PlanTotal 102,806 3,412 106,218 100,336 3,345 103,681 102,806 3,412 106,218 100,336 3,345 103,681 71,541 71,541 66,057 66,057 31,265 3,412 34,677 34,279 3,345 37,624 31,265 3,412 34,677 34,279 3,345 37,624 $4.2 million in 2017 and $4.0$4.1 million in both 20162023 and 2015.2022 and $4.4 million in 2021. The Company’s contribution is based on a non-discretionary match of employees’ contributions, as defined by the plan.F-30TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)summarizesummarizes key information for the plans that the Company hadmade significant involvement withcontributions to during the three years ended December 31, 2017, 2016 and 2015:Pension Protections Act
Zone StatusCompany Contributions
(amounts in millions)Expiration
Date of
Collective
Bargaining
AgreementPension Fund EIN/Pension
Plan Number2023 2022 2022 2021 Surcharge
ImposedThe Pension, Hospitalization and Benefit Plan of the Electrical Industry - Pension Trust Fund 13-6123601/001 Green Green N/A $ 4.2 $ 6.7 $ 9.5 (c) No 4/15/2025 Carpenters Pension Trust Fund for Northern California 94-6050970 Red Red Implemented 2.5 2.4 2.9 No 6/30/2027 Excavators Union Local 731 Pension Fund 13-1809825/002 Green Green N/A 2.4 4.0 4.0 No 4/30/2026 Operating Engineers Pension Trust 95-6032478 Green Yellow N/A 2.4 3.4 2.4 No 6/30/2025 Construction Laborers Pension Trust for Southern California 95-6031812 Green Green N/A 2.1 3.4 2.8 No 6/30/2026 Joint Pension Fund, Local Union 164 IBEW 22-6031199 Green Green N/A 1.4 6.4 (c) 6.8 (c) No 4/30/2026 8.2 4.4 2.7 6.6 5.6 2.8 5.2 1.5 0.3 3.9 3.9 6.2
(b)The Company's contributions as a percentage of total plan contributions were not available for the 2023 plan year for any of the above pension funds.(a)These amounts exceeded 5% of the respective total plan contributions.
(c)These amounts exceeded 5% of the respective total plan contributions.(b)The Company's contributions as a percentage of total plan contributions were not available for any of its plans.$32.1$33.8 million in 2017, $52.52023, $32.3 million in 20162022 and $55.8$41.2 million in 20152021 to other multiemployer pension plans.10. Funding for these payments is principally provided for in the contracts with our customers.20172023 and 2016:2022:As of December 31, 2023 As of December 31, 2022 Fair Value Hierarchy Fair Value Hierarchy (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $ 380,564 $ — $ — $ 380,564 $ 259,351 $ — $ — $ 259,351 14,116 — — 14,116 14,480 — — 14,480 — 130,287 — 130,287 — 91,556 — 91,556 19,988 86,961 — 106,949 20,100 68,228 — 88,328 Total $ 414,668 $ 217,248 $ — $ 631,916 $ 293,931 $ 159,784 $ — $ 453,715 192,868 192,868 146,103 146,103 4,780 4,780 50,504 50,504 69,891 2,405 72,296 46,855 4,411 51,266 267,539 2,405 269,944 243,462 4,411 247,873 original maturity dates of three months or less.retainageretention are included in accountsretention receivable as of December 31, 2023 and 2022, and are comprisedcomposed of money market funds of $20.0 million and municipal bonds, the majority$20.1 million, respectively, and AFS debt securities of which are rated A3 or better.$87.0 million and $68.2 million, respectively. The fair values of the money market funds are measured using quoted market prices; therefore, they are classified as Level 1 assets. The fair values of municipal bondsAFS debt securities are measured using readily available pricing sources for comparable instruments;determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets; therefore, they are classified as Level 2 assets. Allabove investments are available-for-sale securities.The Company did not have material transfers between Levels 1 and 2 during the years endedfollowing as of December 31, 20172023 and 2016.As of December 31, 2023 As of December 31, 2022 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Amortized Cost Unrealized Gains Unrealized Losses Fair Value Restricted investments: Corporate debt securities $ 95,903 $ 762 $ (2,202) $ 94,463 $ 53,452 $ 1 $ (3,550) $ 49,903 U.S. government agency securities 29,082 18 (1,054) 28,046 34,920 13 (1,688) 33,245 Municipal bonds 8,227 5 (914) 7,318 9,211 — (1,257) 7,954 Corporate certificates of deposit 498 — (38) 460 507 — (53) 454 Total restricted investments 133,710 785 (4,208) 130,287 98,090 14 (6,548) 91,556 Investments in lieu of retention: Corporate debt securities 87,601 246 (1,950) 85,897 70,968 1 (3,724) 67,245 Municipal bonds 823 241 — 1,064 818 165 — 983 Total investments in lieu of retention 88,424 487 (1,950) 86,961 71,786 166 (3,724) 68,228 Total AFS debt securities $ 222,134 $ 1,272 $ (6,158) $ 217,248 $ 169,876 $ 180 $ (10,272) $ 159,784 As of December 31, 2023 Less than 12 Months 12 Months or Greater Total (in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Restricted investments: Corporate debt securities $ 4,971 $ (3) $ 40,649 $ (2,199) $ 45,620 $ (2,202) U.S. government agency securities 1,280 (4) 22,858 (1,050) 24,138 (1,054) Municipal bonds 99 (2) 7,038 (912) 7,137 (914) Corporate certificates of deposit — — 460 (38) 460 (38) Total restricted investments 6,350 (9) 71,005 (4,199) 77,355 (4,208) Investments in lieu of retention: Corporate debt securities 11,398 (55) 49,726 (1,895) 61,124 (1,950) Total investments in lieu of retention 11,398 (55) 49,726 (1,895) 61,124 (1,950) Total AFS debt securities $ 17,748 $ (64) $ 120,731 $ (6,094) $ 138,479 $ (6,158) As of December 31, 2022 Less than 12 Months 12 Months or Greater Total (in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Restricted investments: Corporate debt securities $ 23,559 $ (733) $ 25,842 $ (2,817) $ 49,401 $ (3,550) U.S. government agency securities 24,834 (939) 5,593 (749) 30,427 (1,688) Municipal bonds 4,998 (672) 2,956 (585) 7,954 (1,257) Corporate certificates of deposit 63 (12) 391 (41) 454 (53) Total restricted investments 53,454 (2,356) 34,782 (4,192) 88,236 (6,548) Investments in lieu of retention: Corporate debt securities 34,553 (843) 32,391 (2,881) 66,944 (3,724) Total investments in lieu of retention 34,553 (843) 32,391 (2,881) 66,944 (3,724) Total AFS debt securities $ 88,007 $ (3,199) $ 67,173 $ (7,073) $ 155,180 $ (10,272) (in thousands) Amortized Cost Fair Value Due within one year $ 32,586 $ 32,241 Due after one year through five years 179,451 175,907 Due after five years 10,097 9,100 Total $ 222,134 $ 217,248 retainage,retention, which may be settled beyond one year, are estimated to approximate fair value. The Company’s restricted investments carried at amortized cost have an aggregate fair value of $52.5 million as of December 31, 2017, determined using Level 2 inputs. Of the Company’s long-term debt, the fair valuesvalue of the 2017 Senior Notes as of December 31, 2017 was $537.5 million. The fair value of the 2010 Senior Notes as of December 31, 2016 was $302.6 million; the 2010 Senior Notes were redeemed in the second quarter of 2017, as discussed in Note 5. The fair value of the Convertible Notes was $222.2$490.9 million and $228.4$439.7 million as of December 31, 20172023 and 2016,2022, respectively. The fair Notes, 2010 Senior Notes and Convertible Notes were determined using Level 1 inputs, specifically current observable market prices. The fair value of the Term Loan B was $358.9 million and $389.5 million as of December 31, 2023 and 2022, respectively. The fair values of the Term Loan B were determined using Level 2 inputs, specifically third-party quoted market prices. The reported value of the Company’s remaining borrowings approximates fair value as of December 31, 20172023 and 2016 approximates fair value.2022.F-31TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)11.13. Variable Interest EntitiesFrom time to time the (VIEs) single contracts or projects. In accordance with ASC 810, the Company assesses its partnerships and joint ventures at inception to determine if any meet the qualifications of a VIE. The Company considers a joint venture a VIE if either (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, the companyCompany reassesses its initial determination of whether thea joint venture is a VIE.2017,2023, the Company had unconsolidated VIE-related current assets and liabilities of $0.5 million and $0.1 million, respectively, included in the Company’s Consolidated Balance SheetSheets. As of December 31, 2022, the Company had unconsolidated VIE-related current assets of $0.4 million included in the Company’s Consolidated Balance Sheets. The Company’s maximum exposure to loss as a result of its investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding commitments. There were no future funding requirements for the unconsolidated VIEs as of December 31, 2023.$95.5$503.1 million and $11.6$35.1 million, respectively, as well as current liabilities of $140.7$505.0 million related to the operations of its consolidated VIEs.One large As of December 31, 2022, the Company’s Consolidated Balance Sheets included current and noncurrent assets of $527.3 million and $22.4 million, respectively, as well as current liabilities of $567.3 million related to the operations of its consolidated VIEs. that the Company is consolidating was established to construct the Purple Line SegmentExtension Section 2 Extension project, a $1.4 billion(Tunnels and Stations) and Section 3 (Stations) mass-transit projectprojects in Los Angeles, California.California with an original combined value of approximately $2.8 billion. The Company has a 75% interest in the joint venture with the remaining 25% held by O&G Industries, Inc. (“O&G”). The joint venture was initially financed with contributions from the partners and, per the terms of the joint venture agreement, the partners may be required to provide additional capital contributions in the future.12. The Company has determined that this joint venture is a VIE for which the Company is the primary beneficiary.work;work, concrete forming and placement;placement, steel erection; electrical; mechanical; plumbing;erection, electrical, mechanical, plumbing, and heating,HVAC (heating, ventilation and air conditioning (HVAC)conditioning). As described below, the Company’s business is conducted through three segments: Civil, Building and Specialty Contractors. These segments are determined based on how the Company’s Chairman and Chief Executive Officer (chief operating decision maker) aggregates business units when evaluating performance and allocating resources.civil contracting services provided by the Civil segment include construction and rehabilitation of highways, bridges, tunnels, mass-transit systems, military facilities, and water management and wastewater treatment facilities.high-rise residential, hospitality and gaming, transportation, health care, commercial andoffices, government offices,facilities, sports and entertainment, education, correctional and detention facilities, biotech, pharmaceutical, industrial and high-tech. and pneumatically placed concrete for a full range of Civilcivil and Buildingbuilding construction projects in the industrial, commercial, hospitality and gaming, and mass-transit end markets. This segment provides the Company with unique strengths and capabilities that allow the Company to position itself as a full-service contractor with greater control over scheduled work, project delivery, and cost and risk management.F-32TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)2017, 20162023, 2022 and 2015: 2021:Reportable Segments (in thousands) Civil Building Specialty
ContractorsTotal Corporate Consolidated
TotalYear ended December 31, 2023 Total revenue $ 1,971,194 $ 1,302,636 $ 694,038 $ 3,967,868 $ — $ 3,967,868 Elimination of intersegment revenue (87,329) (97) (215) (87,641) — (87,641) Revenue from external customers $ 1,883,865 $ 1,302,539 $ 693,823 $ 3,880,227 $ — $ 3,880,227 $ 198,609 $ (91,206) $ (144,822) $ (37,419) $ (77,178) (b) $ (114,597) Capital expenditures $ 41,318 $ 3,932 $ 1,250 $ 46,500 $ 6,453 $ 52,953 $ 31,685 $ 2,227 $ 2,445 $ 36,357 $ 8,872 $ 45,229 Year ended December 31, 2022 Total revenue $ 1,956,968 $ 1,305,468 $ 813,531 $ 4,075,967 $ — $ 4,075,967 Elimination of intersegment revenue (222,086) (62,897) (229) (285,212) — (285,212) Revenue from external customers $ 1,734,882 $ 1,242,571 $ 813,302 $ 3,790,755 $ — $ 3,790,755 $ 21,123 $ 7,166 $ (168,019) $ (139,730) $ (65,034) (b) $ (204,764) Capital expenditures $ 49,819 $ 2,333 $ 2,545 $ 54,697 $ 5,083 $ 59,780 $ 51,123 $ 1,713 $ 2,098 $ 54,934 $ 9,430 $ 64,364 Year ended December 31, 2021 Total revenue $ 2,443,828 $ 1,574,759 $ 1,120,115 $ 5,138,702 $ — $ 5,138,702 Elimination of intersegment revenue (348,068) (146,657) (2,147) (496,872) — (496,872) Revenue from external customers $ 2,095,760 $ 1,428,102 $ 1,117,968 $ 4,641,830 $ — $ 4,641,830 $ 266,214 $ 28,721 $ (9,961) $ 284,974 $ (58,170) (b) $ 226,804 Capital expenditures $ 37,067 $ 359 $ 476 $ 37,902 $ 692 $ 38,594 $ 102,723 $ 1,677 $ 3,316 $ 107,716 $ 10,513 $ 118,229 1,856,164 1,982,857 1,213,708 5,052,729 5,052,729 (253,989) (41,532) (295,521) (295,521) 1,602,175 1,941,325 1,213,708 4,757,208 4,757,208 192,207 34,199 18,938 245,344 (65,867) 179,477 27,694 267 721 28,682 1,598 30,280 33,767 2,021 4,699 40,487 11,443 51,930 1,830,857 2,146,747 1,234,272 5,211,876 5,211,876 (161,894) (76,906) (238,800) (238,800) 1,668,963 2,069,841 1,234,272 4,973,076 4,973,076 172,668 51,564 37,908 262,140 (60,220) 201,920 13,541 516 1,005 15,062 681 15,743 48,561 2,186 5,035 55,782 11,520 67,302 2,005,193 1,900,492 1,228,030 5,133,715 5,133,715 (115,286) (97,957) (213,243) (213,243) 1,889,907 1,802,535 1,228,030 4,920,472 4,920,472 145,213 (1,240) 15,682 159,655 (54,242) 105,413 8,383 2,877 1,193 12,453 23,459 35,912 22,601 2,728 5,507 30,836 10,798 41,634 (a)Consists primarily of corporate general and administrative expenses.(b)Depreciation and amortization is included in income from construction operations.20162023, the Company recordedCompany’s income (loss) from construction operations in the Civil segment was impacted by net unfavorable adjustments related to a settlement that impacted multiple components of a mass-transit project in California. The settlement resolved certain ongoing disputes and increased the expected profit from work to be performed in the future. The settlement resulted in an unfavorable non-cash adjustment of $23.2 million ($17.0 million, or $0.33 per diluted share, after tax) to one component of the project that is nearing completion, partially offset by a favorable adjustment of $8.8 million ($7.1 million, or $0.14 per diluted share, after tax) on the other component of the project that has substantial scope of work remaining. As a result of the settlement, the net unfavorable impact to the period from these two adjustments is expected to be mitigated by the increased profit generated from future work on the project. The Civil segment was also adversely impacted by unfavorable adjustments of $12.8 million ($9.4 million, or $0.18 per diluted share, after tax) on a completed highway project in Virginia due to changes in estimates that resulted from progress in the dispute resolution process, partially offset by net favorable adjustments totaling $3.0of $19.0 million in income from construction operations ($0.0415.2 million, or $0.29 per diluted share)share, after tax) for various Five Star Electric projectsa project on the West Coast that primarily resulted from a favorable impact of $58.1 million on the settlement of change orders and changes in New Yorkestimates due to improved performance, partially offset by a temporary unfavorable non-cash impact of $40.7 million resulting from the successful negotiation of significant lower margin (and lower risk) change orders which increased the project’s overall estimated profit but reduced the project’s percentage of completion and overall margin percentage.segment. The net impact included materialsegment was adversely impacted by $62.2 million ($45.7 million, or $0.88 per diluted share, after tax) of unfavorable non-cash adjustments relateddue to twochanges in estimates on the electrical subcontract projects: a favorable adjustmentand mechanical scope of $14.0 million for a completed transportation project in the Northeast associated with changes in the expected recovery on certain unapproved change orders resulting from ongoing negotiations; a non-cash charge of $24.7 million ($0.1718.1 million, or $0.35 per diluted share) andshare, after tax) that resulted from an adverse legal ruling on an educational facilities project in New York; an unfavorable adjustment of $13.8$16.9 million for a project that was nearly complete ($0.1612.4 million, or $0.24 per diluted share).2015,2022, the Company recordedCompany’s income (loss) from construction operations in the Civil segment was adversely impacted by $38.8 million ($30.7 million, or $0.60 per diluted share, after tax) for a project on the West Coast, which resulted from the successful negotiation of significant lower margin (and lower risk) change orders that increased the project’s overall estimated profit but reduced the project’s percentage of completion and overall margin percentage; $26.2 million ($18.9 million, or $0.37 per diluted share, after tax) of unfavorable non-cash adjustments on a completed highway project in the Northeast due to the reversal on appeal of a previously favorable lower-court ruling; a non-cash charge of $25.5 million ($18.4 million, or $0.36 per diluted share, after tax) due to an adverse legal ruling on a dispute related to a completed bridge project in New York; $24.7 million ($17.9 million, or $0.35 per diluted share, after tax) of unfavorable adjustments on a mass-transit project in California; a $16.2 million ($11.7 million, or $0.23 per diluted share, after tax) unfavorable non-cash impact related to the settlement of a long-disputed, completed project in Maryland; and an unfavorable non-cash adjustment of $10.0 million ($7.2 million, or $0.14 per diluted share, after tax) due to a ruling in ongoing dispute resolution proceedings on a mass-transit project in the Northeast. The Company’s income (loss) from construction operations was favorably impacted by a project close-out adjustment of $12.7 million ($9.1 million, or $0.18 per diluted share, after tax) on a bridge project in the Midwest.totaling $45.6was adversely impacted by $46.2 million ($33.5 million, or $0.65 per diluted share, after tax) due to unfavorable adjustments related to the unforeseen cost of project close-out issues, remediation work, extended project supervision and associated labor inefficiencies, as well as growth in unapproved change orders on the electrical component of a transportation project in the Northeast; an unfavorable non-cash impact of $43.2 million ($31.4 million, or $0.61 per diluted share, after tax) related to an adverse appellate court decision involving the electrical component of a completed mass-transit project in New York; a non-cash charge of $17.8 million ($12.9 million, or $0.25 per diluted share, after tax) that increased cost of operations associated with the partial reversal by an appellate court of previously awarded legal damages related to a completed electrical project in New York; an $11.3 million ($8.2 million, or $0.16 per diluted share, after tax) unfavorable non-cash adjustment on a mechanical project in the Northeast as a result of settlements on previously disputed items and $11.1 million ($8.0 million, or $0.16 per diluted share, after tax) of unfavorable non-cash adjustments on another mechanical project, also in the Northeast. ($0.53 per diluted share) related to various Five Star Electric projects in New York, none of which were individually material. Most of these projects are complete or nearing completion. In addition, there were unfavorable adjustments to the estimated cost to complete a Building segment project, which has been completed and resulted in a decrease of $24.3 million in income from construction operations ($0.28 per diluted share). Furthermore, the Company recorded an unfavorable adjustment totaling $23.9 million ($0.28 per diluted share) in the Civil segment for an adverse legal decision relatedof $29.0 million ($20.9 million, or $0.41 per diluted share, after tax) and $16.3 million ($13.5 million, or $0.26 per diluted share, after tax) on two mass-transit projects, reflecting improved profitability as a result of the negotiation and settlement of certain change orders and the associated mitigation of certain risks in 2021 as the projects progressed towards completion.long-standing litigation matter, for whichtransportation project in the Company assumed liability as part of an acquisitionNortheast that reflected a charge and the negative impact to earnings from growth in 2011. Finally, the Company recorded favorable adjustments for a Civil segment runway reconstruction project,unapproved change orders, which resulted in an increasea reduction in the project’s percentage of $13.7completion (and, correspondingly, a reduction in the percentage of estimated profit recognized for the year ended December 31, 2021 for this project).0.1613.7 million, or $0.27 per diluted share)share, after tax) and $17.6 million ($12.7 million, or $0.25 per diluted share, after tax) on the mechanical and electrical components, respectively, of a transportation project in the Northeast. Lastly, there was an impact of $16.2 million ($11.7 million, or $0.23 per diluted share, after tax) on an electrical project in New York that included unfavorable adjustments and the negative impact to the period associated with increases to project forecasts due to growth in unapproved change orders (expected to be negotiated in future periods).F-33TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)arewere as follows:As of December 31, (in thousands) 2023 2022 Civil $ 3,539,608 $ 3,402,934 Building 898,902 898,816 Specialty Contractors 307,171 483,535 (315,825) (242,485) Total assets $ 4,429,856 $ 4,542,800 2,452,108 2,152,123 909,207 917,317 767,807 813,851 135,001 155,329 4,264,123 4,038,620 4,613,644 4,802,393 4,694,165 143,564 170,683 226,307 4,757,208 4,973,076 4,920,472 4,093,673 3,911,865 170,450 126,755 4,264,123 4,038,620 Year Ended December 31, (in thousands) 2023 2022 2021 Revenue: United States $ 3,437,971 $ 3,424,574 $ 4,267,734 Foreign and U.S. territories 442,256 366,181 374,096 Total revenue $ 3,880,227 $ 3,790,755 $ 4,641,830 As of December 31, (in thousands) 2023 2022 Assets: United States $ 3,998,470 $ 4,199,604 Foreign and U.S. territories 431,386 343,196 Total assets $ 4,429,856 $ 4,542,800 Year Ended December 31, Year Ended December 31, (in thousands) 2023 2022 2021 179,477 201,920 105,413 Income (loss) from construction operations 43,882 6,977 13,569 (69,384) (59,782) (45,143) 153,975 149,115 73,839 Income (loss) before income taxes F-34TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)13.15. Related Party Transactions$2.8$3.9 million in both 20172023, $3.8 million in 2022 and 2016, and $2.7$3.6 million for 2015,in 2021, and recognized expense of $3.2$4.1 million in each2023, and $4.6 million in both 2022 and 2021. In addition, on November 4, 2022, the Company purchased a property from another entity owned by Mr. Tutor. The Company paid $4.1 million for this property, which is the amount that Mr. Tutor paid to acquire the property from an unrelated third party shortly before the Company decided that it wanted to own and operate the property. The Company is currently developing the property into an equipment yard. When this new equipment yard is ready to be used by the Company, the Company will terminate its existing lease for another equipment yard that it currently leases from an entity owned by Mr. Tutor. Mr. Tutor has agreed that the Company will be entitled to terminate the existing lease at no incremental cost to the Company (and without having to pay rent for the unused, remaining term of those same years. Industries, Inc. (“O&G”), is a director of the Company. The Company occasionally forms construction project joint ventures with O&G, in which each partner may provide services and equipment to these joint ventures on customary trade terms.&G. During the three years ended December 31, 2017,2023, the Company had three active joint ventures with O&G including two infrastructure projects in the northeastern United States that are both complete,were completed in 2017 and one for a projecttwo mass-transit projects in Los Angeles, California to construct the Purple Line Extension Section 2 (Tunnels and Stations) and Section 3 (Stations), in which the Company’s and O&G’s joint venture interests are 75% and 25%, respectively. PaymentsO&G may provide equipment and services to these joint ventures on customary trade terms; there were no material payments made by these joint ventures to O&G for services and equipment during the years ended December 31, 2017, 20162023, 2022 and 2015 were immaterial.Senior Managing Director, Construction Services Group,President of Alliant Retail Property and Casualty for Alliant Insurance Services, Inc. (“Alliant”), is a director of the Company. The Company uses Alliant for various insurance-related services. The associated expenses for services provided2017, 20162023, 2022 and 2015 were $17.62021 were $15.3 million, $8.9$11.4 million and $9.8$16.4 million, respectively. The Company owed Alliant $0.5$0.3 million and $5.2and $1.6 million as of December 31, 20172023 and 2016,2022, respectively, for services rendered.14. Unaudited Quarterly Financial DataThe following table presents selected unaudited quarterly financial data for each full quarterly period of 2017 and 2016:1,117,361 1,247,274 1,199,505 1,193,068 102,720 102,838 118,251 130,596 37,017 34,045 49,072 59,343 21,870 52,516 34,396 45,193 13,764 32,633 25,300 82,847 13,764 30,096 23,584 80,938 0.28 0.61 0.47 1.63 0.27 0.59 0.47 1.60 1,085,369 1,308,130 1,332,978 1,246,599 105,092 109,770 124,668 117,660 40,122 48,829 60,919 52,050 26,724 35,780 47,926 38,685 15,400 21,361 28,801 30,260 15,400 21,361 28,801 30,260 0.31 0.43 0.59 0.62 0.31 0.43 0.57 0.60 F-35