UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON,~~Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2017~~March 31, 2020

☐TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 1-6314

Tutor Perini Corporation

(Exact ~~name~~Name of ~~registrant~~Registrant as ~~specified~~Specified in its ~~charter)~~

Charter)


MASSACHUSETTS		04-1717070
(State or ~~other jurisdiction~~Other Jurisdiction of ~~incorporation~~ Incorporation or ~~organization)~~Organization)		(I.R.S. Employer Identification No.)

15901 OLDEN STREET, SYLMAR, CALIFORNIA		91342-1093
(Address of Principal Executive Offices)		(Zip Code)

~~15901 OLDEN STREET, SYLMAR, CALIFORNIA 91342-1093~~

~~(Address of principal executive offices)~~

~~(Zip code)~~

(818) 362-8391

(Registrant’s ~~telephone number, including area code)~~Telephone Number, Including Area Code)

None

(Former ~~name, former address~~Name, Former Address and ~~former fiscal year,~~Former Fiscal Year, if ~~changed since last report)~~Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 par value

TPC

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting ~~company”~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~


Large accelerated filer ☒		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☐
~~Non-Accelerated filer~~ ☐		~~Smaller reporting company~~ ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange ~~Act~~ Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock, $1.00 par value per share, of the registrant outstanding at ~~November 3, 2017~~April 30, 2020 was ~~49,781,010.~~50,577,111.

PART I. – FINANCIAL INFORMATION

Item 1. – Financial Statements

TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED



	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
(in thousands, except per common share amounts)	2017		2016		2017		2016		2020		2019
REVENUE	$	1,199,505	$	1,332,978	$	3,564,140	$	3,726,477	$	1,250,729	$	958,487
COST OF OPERATIONS		(1,081,254)		(1,208,310)		(3,240,332)		(3,386,947)		(1,139,649)		(870,017)
GROSS PROFIT		118,251		124,668		323,808		339,530		111,080		88,470
General and administrative expenses		(69,179)		(63,749)		(203,674)		(189,660)		(63,853)		(65,557)
INCOME FROM CONSTRUCTION OPERATIONS		49,072		60,919		120,134		149,870		47,227		22,913
Other income, net		967		2,048		42,373		5,214		481		422
Interest expense		(15,643)		(15,041)		(53,726)		(44,655)		(16,436)		(16,425)
INCOME BEFORE INCOME TAXES		34,396		47,926		108,781		110,429		31,272		6,910
Provision for income taxes		(9,096)		(19,125)		(37,084)		(44,868)
Income tax expense										(5,134)		(2,188)
NET INCOME		25,300		28,801		71,697		65,561		26,138		4,722
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(1,716)		��—		(4,253)		—		8,767		5,078
NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION	$	23,584	$	28,801	$	67,444	$	65,561
BASIC EARNINGS PER COMMON SHARE	$	0.47	$	0.59	$	1.36	$	1.33
DILUTED EARNINGS PER COMMON SHARE	$	0.47	$	0.57	$	1.33	$	1.32
NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION									$	17,371	$	(356)
BASIC EARNINGS (LOSS) PER COMMON SHARE									$	0.35	$	(0.01)
DILUTED EARNINGS (LOSS) PER COMMON SHARE									$	0.34	$	(0.01)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:
BASIC		49,775		49,185		49,602		49,132		50,338		50,098
DILUTED		50,587		50,100		50,768		49,649		50,836		50,098

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

UNAUDITED



	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
(in thousands)	2017		2016		2017		2016		2020		2019
NET INCOME	$	25,300	$	28,801	$	71,697	$	65,561	$	26,138	$	4,722

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Defined benefit pension plan adjustments		269		248		806		819		423		330
Foreign currency translation adjustments		726		(411)		1,321		261		(4,013)		348
Unrealized gain (loss) in fair value of investments		12		(79)		(12)		(224)
Unrealized loss in fair value of interest rate swap		—		—		—		(24)
Unrealized gain in fair value of investments										542		673
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX		1,007		(242)		2,115		832		(3,048)		1,351

COMPREHENSIVE INCOME		26,307		28,559		73,812		66,393		23,090		6,073
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(1,716)		—		(4,253)		—		6,747		5,180
COMPREHENSIVE INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION	$	24,591	$	28,559	$	69,559	$	66,393	$	16,343	$	893

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED



	As of March 31,		As of December 31,
(in thousands, except share and per share amounts)	2020		2019

ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($86,126 and $103,850 related to variable interest entities ("VIEs"))	$	198,122	$	193,685
Restricted cash		5,956		8,416
Restricted investments		75,409		70,974
Accounts receivable ($80,794 and $91,090 related to VIEs)		1,501,557		1,354,519
Retainage receivable ($86,033 and $89,132 related to VIEs)		573,151		562,375
Costs and estimated earnings in excess of billings ($30,739 and $22,764 related to VIEs)		1,155,202		1,123,544
Other current assets ($55,458 and $58,128 related to VIEs)		211,501		197,473
Total current assets		3,720,898		3,510,986
PROPERTY AND EQUIPMENT ("P&E"), net of accumulated depreciation of $401,805 and $388,147 (net P&E of $41,474 and $49,919 related to VIEs)		502,611		509,685
GOODWILL		205,143		205,143
INTANGIBLE ASSETS, NET		149,458		155,270
OTHER ASSETS		108,296		104,693
TOTAL ASSETS	$	4,686,406	$	4,485,777

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	184,954	$	124,054
Accounts payable ($78,304 and $93,848 related to VIEs)		744,222		682,699
Retainage payable ($16,333 and $13,967 related to VIEs)		272,533		252,181
Billings in excess of costs and estimated earnings ($421,236 and $422,847 related to VIEs)		891,164		844,389
Accrued expenses and other current liabilities ($16,008 and $25,402 related to VIEs)		197,582		206,533
Total current liabilities		2,290,455		2,109,856
LONG-TERM DEBT, less current maturities, net of unamortized discount and debt issuance costs totaling $20,259 and $23,343		717,379		710,422
DEFERRED INCOME TAXES		37,580		35,686
OTHER LONG-TERM LIABILITIES		198,064		199,288
TOTAL LIABILITIES		3,243,478		3,055,252
COMMITMENTS AND CONTINGENCIES (NOTE 11)
EQUITY
Stockholders' equity:
Preferred stock - authorized 1,000,000 shares ($1 par value), NaN issued		—		—
Common stock - authorized 75,000,000 shares ($1 par value), issued and outstanding 50,541,480 and 50,278,816 shares		50,577		50,279
Additional paid-in capital		1,120,487		1,117,972
Retained earnings		331,362		313,991
Accumulated other comprehensive loss		(43,128)		(42,100)
Total stockholders' equity		1,459,298		1,440,142
Noncontrolling interests		(16,370)		(9,617)
TOTAL EQUITY		1,442,928		1,430,525
TOTAL LIABILITIES AND EQUITY	$	4,686,406	$	4,485,777

As of September 30,

As of December 31,
(in thousands, except share and per share amounts)
2017

2016
ASSETS

CURRENT ASSETS:

Cash and cash equivalents ($79,111 and $0 related to variable interest entities ("VIEs"))
$
221,878

$
146,103
Restricted cash

17,424

50,504
Restricted investments

48,775

—
Accounts receivable ("AR") including retainage of $574,710 and $569,391 (AR of $36,317 and $0 related to VIEs)

1,857,870

1,743,300
Costs and estimated earnings in excess of billings

902,312

831,826
Other current assets

70,781

66,023
Total current assets

3,119,040

2,837,756
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $345,546 and $313,783

447,588

477,626
GOODWILL

585,006

585,006
INTANGIBLE ASSETS, NET

90,340

92,997
OTHER ASSETS

40,811

45,235
TOTAL ASSETS
$
4,282,785

$
4,038,620

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Current maturities of long-term debt
$
30,951

$
85,890
Accounts payable ("AP") including retainage of $267,110 and $258,294 (AP of $4,826 and $0 related to VIEs)

949,675

994,016
Billings in excess of costs and estimated earnings ($91,750 and $0 related to VIEs)

403,635

331,112
Accrued expenses and other current liabilities

124,385

107,925
Total current liabilities

1,508,646

1,518,943
LONG-TERM DEBT, less current maturities, net of unamortized
discounts and debt issuance costs totaling $54,699 and $56,072

855,325

673,629
DEFERRED INCOME TAXES

132,335

131,007
OTHER LONG-TERM LIABILITIES

155,553

162,018
TOTAL LIABILITIES

2,651,859

2,485,597

CONTINGENCIES AND COMMITMENTS (NOTE 7)

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

49,781

49,211
Additional paid-in capital

1,080,371

1,075,600
Retained earnings

541,069

473,625
Accumulated other comprehensive loss

(43,298)

(45,413)
Total Stockholders' Equity

1,627,923

1,553,023
Noncontrolling interests

3,003

—
TOTAL EQUITY

1,630,926

1,553,023

TOTAL LIABILITIES AND EQUITY
$
4,282,785

$
4,038,620

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED



	Nine Months Ended September 30,				Three Months Ended March 31,
(in thousands)	2017		2016		2020		2019
Cash Flows from Operating Activities:
Net income	$	71,697	$	65,561	$	26,138	$	4,722
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		37,806		44,638		16,999		12,831
Amortization of intangible assets		2,657		2,657		5,812		886
Share-based compensation expense		16,057		10,109		4,244		5,506
Excess income tax benefit from share-based compensation		—		(10)
Change in debt discounts and deferred debt issuance costs		14,725		7,124
Change in debt discount and deferred debt issuance costs						3,486		3,174
Deferred income taxes		642		(8,636)		2,474		142
(Gain) loss on sale of property and equipment		(376)		300
Gain on sale of property and equipment						(461)		(107)
Changes in other components of working capital						(90,884)		(154,192)
Other long-term liabilities		(2,876)		(8,555)		1,061		2,177
Other		4,785		(353)
Changes in other components of working capital		(143,213)		(18,669)
NET CASH PROVIDED BY OPERATING ACTIVITIES		1,904		94,166
Other, net						(2,876)		76
NET CASH USED IN OPERATING ACTIVITIES						(34,007)		(124,785)

Cash Flows from Investing Activities:
Acquisition of property and equipment excluding financed purchases		(9,712)		(10,273)
Acquisition of property and equipment						(11,693)		(14,412)
Proceeds from sale of property and equipment		1,440		1,139		583		201
Investments in securities restricted in use		(48,657)		—
Change in restricted cash		33,080		(2,872)
Investment in securities						(9,696)		(8,357)
Proceeds from maturities and sales of investments in securities						6,211		3,324
NET CASH USED IN INVESTING ACTIVITIES		(23,849)		(12,006)		(14,595)		(19,244)

Cash Flows from Financing Activities:
Proceeds from issuance of convertible notes		—		200,000
Proceeds from debt		1,991,457		1,003,092		348,688		394,000
Repayment of debt		(1,866,072)		(1,174,679)		(283,915)		(259,691)
Excess income tax benefit from share-based compensation		—		10
Issuance of common stock and effect of cashless exercise		(11,147)		(423)
Cash payments related to share-based compensation						(694)		(2,364)
Distributions paid to noncontrolling interests		(2,500)		—		(13,500)		(4,000)
Contributions from noncontrolling interests		1,250		—		—		2,798
Debt issuance and extinguishment costs		(15,268)		(14,868)
NET CASH PROVIDED BY FINANCING ACTIVITIES		97,720		13,132		50,579		130,743

Net increase in cash and cash equivalents		75,775		95,292
Cash and cash equivalents at beginning of period		146,103		75,452
Cash and cash equivalents at end of period	$	221,878	$	170,744
Net increase (decrease) in cash, cash equivalents and restricted cash						1,977		(13,286)
Cash, cash equivalents and restricted cash at beginning of period						202,101		119,863
Cash, cash equivalents and restricted cash at end of period					$	204,078	$	106,577

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

(1) Basis of Presentation

The Condensed Consolidated Financial Statements do not include footnotes and certain financial information normally presented annually under generally accepted accounting principles ~~generally accepted~~ in the United States (“GAAP”). Therefore, they should be read in conjunction with the audited consolidated financial statements and the related notes included in ~~the Company’s~~Tutor Perini Corporation’s (the “Company”) Annual Report on Form 10-K for the year ended December 31, ~~2016.~~ 2019. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 may not be indicative of the results that will be achieved for the full year ending December 31, ~~2017.~~2020.

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including those of a normal recurring nature, necessary to present fairly the Company’s consolidated financial position as of ~~September 30, 2017~~March 31, 2020 and its consolidated ~~results~~statements of operations and cash flows for the interim periods presented. ~~All significant intercompany~~Intercompany balances and transactions ~~of consolidated subsidiaries~~ have been eliminated. ~~There were no material events that occurred subsequent to the date of the financial statements up to the filing of this Form 10-Q.~~

(2) Recent Accounting Pronouncements

In ~~May 2014,~~June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~2016-13, Measurement of Credit Losses on Financial Instruments, ~~as amended by~~and issued subsequent ~~ASUs~~amendments to the initial guidance within ASU 2019-04 and ASU 2019-05 (collectively, “ASU ~~2014-09”~~2016-13”). ASU 2014-09 amends the existing accounting standards for revenue recognition and establishes principles for recognizing revenue upon the transfer of promised goods or services to customers based on the expected consideration to be received in exchange for those goods or services. The guidance will be effective for the Company as of January 1, 2018. 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 expects to adopt this new standard using the modified retrospective method. The Company is currently reviewing contracts in order to determine the impact, if any, that the adoption of ASU 2014-09 will have on its consolidated financial statements. Based on the Company’s evaluation of ASU 2014-09, the Company currently does not expect it to have a material impact on its results of operations. The Company is identifying and implementing changes to the Company’s business processes, systems and internal controls to support the adoption of this new standard and the related disclosure requirements. The adoption of the standard is also expected to impact the presentation of the consolidated balance sheet. The impact primarily relates to reclassifications among financial statement accounts to align with the new standard. The Company will continue its evaluation of ASU 2014-09 (including how it may impact future contracts, as well as any new or emerging interpretations of the standard) through the date of adoption.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Classification of Certain Cash Receipts and Cash Payments, 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~~2016-13 replace the ~~classification~~incurred loss impairment methodology with the current expected credit loss model, which requires consideration of ~~debt prepayment~~a broader range of reasonable 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, 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. supportable information to estimate credit losses. The Company adopted this accounting standard during the three months ended September 30, 2017 and has applied the provisions retrospectively to the beginning of the fiscal years presented in the Condensed Consolidated Financial Statements.ASU effective January 1, 2020. The adoption of ~~this guidance~~ASU 2016-13 did not have a material impact on the Company’s ~~consolidated~~ financial ~~statements.~~position, results of operations or cash flows.

New accounting pronouncements requiring implementation in future periods are discussed below.

In ~~May 2017,~~December 2019, the FASB issued ASU ~~2017-09,~~ ~~Compensation—Stock Compensation (Topic 718): Scope of Modification~~2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”), modifying Accounting Standards Codification (“ASC”) 740, Income Taxes (“ASC 740”). ~~This~~The amendments in ASU ~~clarifies the scope of modification accounting under Topic 718 with respect to changes~~2019-12, among other things, remove certain exceptions 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~~general principles in ASC 740 and seek more consistent application by clarifying and amending the ~~total current fair value, vesting conditions or the classification of the award. This guidance will be~~existing guidance. ASU 2019-12 is effective for ~~the Company as of January 1, 2018, with early adoption permitted.~~interim and annual reporting periods beginning after December 15, 2020. The Company ~~does~~is currently evaluating the new standard, which is not ~~expect the adoption of this ASU~~expected to have a material impact on ~~its consolidated~~the Company’s financial ~~statements.~~position, results of operations or cash flows.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide temporary optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions to ease the potential accounting and financial reporting burden associated with transitioning away from reference rates that are expected to be discontinued, including the London Interbank Offered Rate (“LIBOR”). ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the new standard, which is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

(3) Revenue

Disaggregation of Revenue

The 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 three months ended March 31, 2020 and 2019.



	Three Months Ended
	March 31,
(in thousands)	2020		2019
Civil segment revenue by end market:
Mass transit	$	297,143	$	146,250
Bridges		52,184		69,307
Highways		32,582		41,043
Tunneling		25,955		34,940
Water		23,744		9,668
Military defense facilities		23,610		10,281
Other		31,411		22,005
Total Civil segment revenue	$	486,629	$	333,494



	Three Months Ended
	March 31,
(in thousands)	2020		2019
Building segment revenue by end market:
Commercial and industrial facilities	$	133,049	$	109,353
Hospitality and gaming		118,987		69,310
Municipal and government		69,502		61,962
Mass transit		57,847		29,177
Health care facilities		35,889		80,227
Education facilities		31,622		42,528
Mixed use		9,972		15,274
Other		24,896		25,635
Total Building segment revenue	$	481,764	$	433,466



	Three Months Ended
	March 31,
(in thousands)	2020		2019
Specialty Contractors segment revenue by end market:
Mass transit	$	148,671	$	81,394
Commercial and industrial facilities		53,505		44,023
Multi-unit residential		26,493		11,389
Education facilities		16,557		11,580
Mixed use		13,802		10,669
Health care facilities		2,522		11,652
Other		20,786		20,820
Total Specialty Contractors segment revenue	$	282,336	$	191,527

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED



	Three Months Ended March 31, 2020								Three Months Ended March 31, 2019
					Specialty								Specialty
(in thousands)	Civil		Building		Contractors		Total		Civil		Building		Contractors		Total
Revenue by customer type:
State and local agencies	$	396,045	$	146,016	$	132,873	$	674,934	$	257,107	$	144,686	$	97,071	$	498,864
Federal agencies		36,661		31,973		9,756		78,390		23,158		40,151		7,769		71,078
Private owners		53,923		303,775		139,707		497,405		53,229		248,629		86,687		388,545
Total revenue	$	486,629	$	481,764	$	282,336	$	1,250,729	$	333,494	$	433,466	$	191,527	$	958,487



	Three Months Ended March 31, 2020								Three Months Ended March 31, 2019
					Specialty								Specialty
(in thousands)	Civil		Building		Contractors		Total		Civil		Building		Contractors		Total
Revenue by contract type:
Fixed price	$	408,971	$	105,598	$	248,516	$	763,085	$	242,867	$	114,359	$	155,264	$	512,490
Guaranteed maximum price		308		237,773		2,549		240,630		2,233		207,131		3,606		212,970
Unit price		71,358		534		21,151		93,043		84,878		5,228		19,003		109,109
Cost plus fee and other		5,992		137,859		10,120		153,971		3,516		106,748		13,654		123,918
Total revenue	$	486,629	$	481,764	$	282,336	$	1,250,729	$	333,494	$	433,466	$	191,527	$	958,487

Changes in Contract Estimates that Impact Revenue

Changes to the total estimated contract revenue or cost for a given project, either due to unexpected events or revisions to management’s initial estimates, are recognized in the period in which they are determined. Revenue recognized during the three month periods ended March 31, 2020 and 2019 related to performance obligations satisfied (or partially satisfied) in prior periods was immaterial.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and exclude unexercised contract options. As of March 31, 2020, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $5.2 billion, $1.9 billion and $2.2 billion for the Civil, Building and Specialty Contractors segments, respectively. As of March 31, 2019, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $4.5 billion, $2.0 billion and $1.8 billion for the Civil, Building and Specialty Contractors segments, respectively. The Company typically recognizes revenue on Civil segment projects over a period of three to five years, whereas for projects in the Building and Specialty Contractors segments, the Company typically recognizes revenue over a period of one to three years.

(4) Contract Assets and Liabilities

The Company classifies contract assets and liabilities that may be settled beyond one year from the balance sheet date as current, consistent with the length of time of the Company’s project operating cycle.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

Contract assets include amounts due under retainage provisions, costs and estimated earnings in excess of billings and capitalized contract costs. The amounts as included on the Condensed Consolidated Balance Sheets consisted of the following:



	As of March 31,		As of December 31,
(in thousands)	2020		2019
Retainage receivable	$	573,151	$	562,375
Costs and estimated earnings in excess of billings:
Claims		717,409		705,993
Unapproved change orders		356,854		362,264
Other unbilled costs and profits		80,939		55,287
Total costs and estimated earnings in excess of billings		1,155,202		1,123,544
Capitalized contract costs		83,509		80,294
Total contract assets	$	1,811,862	$	1,766,213

Retainage receivable represents amounts invoiced to customers where payments have been partially withheld pending the completion of certain milestones, satisfaction of other contractual conditions or the completion of the project. 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 toward completion.

Costs and estimated earnings in excess of billings represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date and are classified as a current asset. Costs and estimated earnings in excess of billings result when either: (1) the appropriate contract revenue amount has been recognized over time in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), but a portion of the revenue recorded cannot be billed currently due to the billing terms defined in the contract, or (2) costs are incurred related to certain claims and unapproved change orders. Claims occur when there is a dispute regarding both a change in the scope 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. The Company routinely estimates recovery related to claims and unapproved change orders as a form of variable consideration at the most likely amount it expects to receive and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Claims and unapproved change orders are billable upon the agreement and resolution between the contractual parties and after the execution of contractual amendments. Increases in claims and unapproved change orders typically result from costs being incurred against existing or new positions; decreases normally result from resolutions and subsequent billings. As discussed in Note 11, the resolution of these claims and unapproved change orders may require litigation or other forms of dispute resolution proceedings. 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 incremental progress toward contractual requirements or milestones.

Capitalized contract costs primarily represent costs to fulfill a contract that (1) directly relate to an existing or anticipated contract, (2) generate or enhance resources that will be used in satisfying performance obligations in the future and (3) are expected to be recovered through the contract, and are included in other current assets. Capitalized contract costs are generally expensed to the associated contract over the period of anticipated use on the project. During the three months ended March 31, 2020 and 2019, $10.3 million and $5.7 million, respectively, of previously capitalized contract costs were amortized and recognized as expense on the related contracts.

Contract liabilities include amounts owed under retainage provisions and billings in excess of costs and estimated earnings. The amount as reported on the Condensed Consolidated Balance Sheets consisted of the following:



	As of March 31,		As of December 31,
(in thousands)	2020		2019
Retainage payable	$	272,533	$	252,181
Billings in excess of costs and estimated earnings		891,164		844,389
Total contract liabilities	$	1,163,697	$	1,096,570

Retainage payable represents amounts invoiced to the Company by subcontractors where payments have been partially withheld pending the completion of certain milestones, other contractual conditions or upon the completion of the project. Generally, retainage payable is not remitted to subcontractors until the associated retainage receivable from customers is collected.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

Billings in excess of costs and estimated earnings represent the excess of contract billings to date over the amount of contract costs and profits (or contract revenue) recognized to date. The balance may fluctuate depending on the timing of contract billings and the recognition of contract revenue. Revenue recognized during the three months ended March 31, 2020 and 2019 and included in the opening billings in excess of costs and estimated earnings balances for each period totaled $429.5 million and $301.0 million, respectively.

(5) Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the amounts shown in the Condensed Consolidated Statements of Cash Flows:



	As of March 31,		As of December 31,
(in thousands)	2020		2019
Cash and cash equivalents available for general corporate purposes	$	80,904	$	43,760
Joint venture cash and cash equivalents		117,218		149,925
Cash and cash equivalents		198,122		193,685
Restricted cash		5,956		8,416
Total cash, cash equivalents and restricted cash	$	204,078	$	202,101

Cash equivalents include short-term, highly liquid investments with maturities of three months or less when acquired. Cash and cash equivalents consist of amounts available for the Company’s general purposes, the Company’s proportionate share of cash held by the Company’s unconsolidated joint ventures and 100% 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.

Amounts included in restricted cash are primarily held as collateral to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit.

(6) Earnings Per Common Share (EPS)

Basic EPS and diluted EPS are calculated by dividing net income 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, unexercised stock options and the Convertible Notes, as defined in Note ~~6. The Company calculates~~9. In accordance with ASC 260, Earnings Per Share, the ~~effect~~settlement of ~~these potentially dilutive securities using the treasury stock method.~~

Three Months Ended September 30,

Nine Months Ended September 30,
(in thousands, except per common share amounts)
2017

2016

2017

2016
Net income attributable to Tutor Perini Corporation
$
23,584

$
28,801

$
67,444

$
65,561

Weighted-average common shares outstanding, basic

49,775

49,185

49,602

49,132
Effect of dilutive restricted stock units and stock options

812

915

1,166

517
Weighted-average common shares outstanding, diluted

50,587

50,100

50,768

49,649

Earnings per common share:

Basic earnings per common share
$
0.47

$
0.59

$
1.36

$
1.33
Diluted earnings per common share
$
0.47

$
0.57

$
1.33

$
1.32

Anti-dilutive shares not included above

912

610

752

1,339

~~With regard to diluted EPS and the impact 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 Accounting Standards Codification (“ASC”) 260,~~ ~~Earnings Per Share,~~ ~~the settlement of the principal amount~~ has no impact on diluted ~~EPS.~~EPS because the Company has the intent and ability (due to its available liquidity and anticipated collections) to settle the principal amount in cash. See Note 9 for further discussion of the Convertible Notes. The Company calculates the effect of the potentially dilutive restricted stock units and stock options using the treasury stock method.



	Three Months Ended March 31,
(in thousands, except per common share data)	2020		2019
Net income (loss) attributable to Tutor Perini Corporation	$	17,371	$	(356)

Weighted-average common shares outstanding, basic		50,338		50,098
Effect of dilutive restricted stock units and stock options		498		—
Weighted-average common shares outstanding, diluted		50,836		50,098

Net income (loss) attributable to Tutor Perini Corporation per common share:
Basic	$	0.35	$	(0.01)
Diluted	$	0.34	$	(0.01)

Anti-dilutive securities not included above		2,209		4,518

~~(4)~~ 11

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UNAUDITED

For the three months ended March 31, 2019, all outstanding restricted stock units and stock options were excluded from the calculation of weighted-average diluted shares outstanding due to the net loss for the period.

(7) Income Taxes

The Company’s effective income tax rate was 16.4% for the three months ended March 31, 2020 and 31.7% for the three months ended March 31, 2019. The decrease in the effective income tax rate for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 primarily reflects the favorable impact of the 2019 net operating loss (“NOL”), which is allowed to be carried back up to five years as a result of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), enacted on March 27, 2020. Under the CARES Act, the Company’s NOL generated in 2019 may be carried back to tax years when the federal statutory tax rate was ~~26.4% and 34.1%~~35% rather than the current rate of 21%, ~~respectively, compared~~consequently generating a larger tax benefit from the NOL than that recognized prior to ~~39.9% and 40.6%~~the enactment of the CARES Act. The favorable impact resulting from the enactment of the CARES Act was partially offset by the unfavorable impact of the vesting of restricted stock units for which a large portion of the ~~three and nine months ended September 30, 2016, respectively.~~ share-based compensation expense recognized in prior periods will not be deductible for income tax purposes. The effective tax rate for ~~both of~~ the ~~2017 periods~~2019 period was ~~favorably~~ impacted by immaterial unfavorable nonrecurring items recognized during the ~~release~~period. In addition, the effective tax rates for both periods also reflect increases due to state income taxes and decreases due to impacts of ~~tax liabilities as a result of a statute expiration and~~ earnings attributable to noncontrolling interests for which income taxes are not the responsibility of the Company.

(8) Goodwill and Intangible Assets

Goodwill

The ~~effective tax rate~~following table presents the changes in the carrying amount of goodwill since its inception through March 31, 2020:


					Specialty
(in thousands)	Civil			Building	Contractors		Total
Gross goodwill	$	492,074	$	424,724	$	156,193	$	1,072,991
Accumulated impairment		(286,931)		(424,724)		(156,193)		(867,848)
Balance as of December 31, 2019		205,143		—		—		205,143
Current year activity		—		—		—		—
Balance as of March 31, 2020	$	205,143	$	—	$	—	$	205,143

The Company tests the goodwill allocated to its reporting units for impairment annually on October 1, or more frequently if events or circumstances indicate it is more likely than not that the ~~nine months ended September 30, 2017~~fair value of a reporting unit is less than its carrying amount. The Company performed its annual impairment test in the fourth quarter of 2019 using a weighted-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. Based on this assessment, the Company concluded goodwill was ~~also favorably impacted by~~0t impaired since the ~~tax benefits associated with share-based compensation.~~ estimated fair value of the Civil reporting unit exceeded its carrying value. In addition, the Company determined that no triggering events occurred and no circumstances changed since the date of our annual impairment test that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount.

During the first quarter of ~~2017,~~2020, the novel coronavirus (“COVID-19”) pandemic, as well as the actions taken to contain and mitigate its public health effects, caused disruptions in domestic and global economies and financial markets. The vast majority of the Company’s projects, especially in its Civil reporting unit, have been designated as essential business, which allows the Company ~~recognized tax benefits associated with share-based compensation under~~to continue its work on those projects. As such, the ~~provisions~~Company’s and its Civil reporting unit’s operations were not significantly impacted during the three months ended March 31, 2020. However, due to the fluidity of ~~ASU 2016-09,~~ ~~Improvement~~the pandemic, uncertainties as to ~~Employee Share-Based Payment Accounting~~,its scope and duration, and ongoing changes in the way that governments, businesses and individuals react and respond to the COVID-19 pandemic, the Company is unable at this time to accurately predict the pandemic’s future impact on the Company’s business, financial condition or performance. Among other things, governments could prohibit the continuation of certain projects that to date have been designated as ~~discussed~~“essential” or could impose health, safety and other operational requirements on such projects that could result in ~~Note 9. This tax benefit is~~delays to or suspensions of such projects. In addition, employees and contractors working on such projects could be unable or unwilling to continue working on them, perhaps for extended periods. The COVID-19 pandemic also could negatively affect the ability of counterparties or joint venture partners to make required payments on a timely basis or at all.

The Company will continue to monitor events and circumstances for changes that indicate the 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

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UNAUDITED

circumstances include, but are not limited to, changes in the overall financial performance of the Civil reporting unit, impacts to our business as a result of ~~a greater tax deduction~~the COVID-19 pandemic, as well as other quantitative and qualitative factors which could indicate potential triggering events for ~~share-based compensation~~possible impairment.

Intangible Assets

Intangible assets consist of the following:


	As of March 31, 2020								Weighted
					Accumulated				Average
				Accumulated	Impairment		Carrying		Amortization
(in thousands)	Cost			Amortization	Charge		Value		Period
Trade names (non-amortizable)	$	117,600	$	—	$	(67,190)	$	50,410	Indefinite
Trade names (amortizable)		74,350		(21,889)		(23,232)		29,229	20 years
Contractor license		6,000		—		(6,000)		—	N/A
Customer relationships		39,800		(21,311)		(16,645)		1,844	12 years
Construction contract backlog		149,290		(81,315)		—		67,975	3 years
Total	$	387,040	$	(124,515)	$	(113,067)	$	149,458



	As of December 31, 2019								Weighted
					Accumulated				Average
				Accumulated	Impairment		Carrying		Amortization
(in thousands)	Cost			Amortization	Charge		Value		Period
Trade names (non-amortizable)	$	117,600	$	—	$	(67,190)	$	50,410	Indefinite
Trade names (amortizable)		74,350		(21,267)		(23,232)		29,851	20 years
Contractor license		6,000		—		(6,000)		—	N/A
Customer relationships		39,800		(21,048)		(16,645)		2,107	12 years
Construction contract backlog		149,290		(76,388)		—		72,902	3 years
Total	$	387,040	$	(118,703)	$	(113,067)	$	155,270

Amortization expense for ~~awards that vested or were exercised~~each of the quarters ended March 31, 2020 and 2019 was $5.8 million and $0.9 million, respectively. As of March 31, 2020, amortization expense is estimated to be $25.6 million for the remainder of 2020, $26.4 million in 2021, $24.6 million in 2022 and $2.5 million per year for the years 2023 through 2025.

The Company performed an annual impairment assessment of its non-amortizable trade names in the ~~first~~fourth quarter of ~~2017 relative~~2019 using a qualitative approach to determine whether conditions existed to indicate that it is more likely than not that the ~~share-based compensation expense recognized under GAAP for these same awards.~~ ~~The effective tax rate for~~fair value of trade names is less than their carrying values. Based on this assessment, the ~~third quarter~~Company concluded that it was more likely than not that the fair value of ~~2016~~the non-amortizable trade names was ~~favorably impacted by return-to-provision adjustments.~~greater than their carrying values, and therefore a quantitative analysis was not required. In addition, no triggering events occurred and no circumstances changed since the date of our annual impairment test that would indicate any additional impairment of the Company’s non-amortizable trade names.

~~(5)~~ ~~Costs and Estimated Earnings in Excess~~13

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~~Costs and estimated earnings in excess of billings,~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

(9) Financial Commitments

Long-Term Debt

Long-term debt as reported on the Condensed Consolidated Balance Sheets consisted of the following:

As of September 30,

As of December 31,
(in thousands)
2017

2016
Claims
$
505,069

$
477,425
Unapproved change orders

295,204

207,475
Other unbilled costs and profits

102,039

146,926
Total costs and estimated earnings in excess of billings
$
902,312

$
831,826



	As of March 31,		As of December 31,
(in thousands)	2020		2019
2017 Senior Notes	$	494,585	$	494,365
2017 Credit Facility		175,000		114,000
Convertible Notes		185,156		182,292
Equipment financing and mortgages		44,861		39,159
Other indebtedness		2,731		4,660
Total debt		902,333		834,476
Less: Current maturities		184,954		124,054
Long-term debt, net	$	717,379	$	710,422

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

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~~UNAUDITED~~

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.

~~(6)~~ ~~Financial Commitments~~

~~Long-Term Debt~~

~~Long-term debt consisted of the following as of the dates of the Condensed Consolidated Balance Sheets presented:~~

As of September 30,

As of December 31,
(in thousands)
2017

2016
2017 Senior Notes
$
492,545

$
—
2017 Credit Facility

146,942

—
2010 Senior Notes

—

298,120
2014 Revolver

—

147,990
Term Loan

—

54,650
Convertible Notes

159,314

152,668
Equipment financing, mortgages and acquisition-related notes

83,156

101,558
Other indebtedness

4,319

4,533
Total debt

886,276

759,519
Less – current maturities

(30,951)

(85,890)
Long-term debt, net
$
855,325

$
673,629

The following table reconciles the outstanding debt balance to the reported debt balances as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016:~~2019:

As of September 30, 2017

As of December 31, 2016
(in thousands)
Outstanding Long-Term Debt

Unamortized Discounts and Issuance Costs

Long-Term
Debt,
as reported

Outstanding Long-Term Debt

Unamortized Discounts and Issuance Costs

Long-Term
Debt,
as reported
2017 Senior Notes
$
500,000

$
(7,455)

$
492,545

$
—

$
—

$
—
2017 Credit Facility

153,500

(6,558)

146,942

—

—

—
2010 Senior Notes

—

—

—

300,000

(1,880)

298,120
2014 Revolver

—

—

—

152,500

(4,510)

147,990
Term Loan

—

—

—

57,000

(2,350)

54,650
Convertible Notes

200,000

(40,686)

159,314

200,000

(47,332)

152,668



	As of March 31, 2020						As of December 31, 2019
(in thousands)	Outstanding Long-Term Debt		Unamortized Discount and Issuance Costs		Long-Term Debt, as reported		Outstanding Long-Term Debt		Unamortized Discount and Issuance Costs		Long-Term Debt, as reported
2017 Senior Notes	$	500,000	$	(5,415)	$	494,585	$	500,000	$	(5,635)	$	494,365
Convertible Notes		200,000		(14,844)		185,156		200,000		(17,708)		182,292

~~Debt Transactions~~The unamortized issuance costs related to the 2017 Credit Facility were $3.3 million and $3.7 million as of March 31, 2020 and December 31, 2019, respectively, and are included in other assets in the Condensed Consolidated Balance Sheets.

2017 Senior Notes

On April 20, 2017, the Company issued $500 million in aggregate principal amount of 6.875% Senior Notes due 2025 (the “2017 Senior Notes”) in a private ~~placement.~~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~~could have redeemed 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~~also could have redeemed 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~~Since May 1, 2020, the Company may redeem the 2017 Senior Notes at specified redemption prices described in the indenture. Upon a change of control, holders of the 2017 Senior Notes may require the Company to repurchase all or part of the 2017 Senior Notes at 101% of the principal amount thereof, plus accrued and unpaid interest to the redemption date.

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~UNAUDITED~~

The 2017 Senior Notes are senior unsecured obligations of the Company and are guaranteed by substantially all of the Company’s existing and future subsidiaries that also guarantee obligations under the Company’s 2017 Credit Facility, as defined below. 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 Facility

On April 20, 2017, the Company entered into a credit agreement (the “2017 Credit Facility”) with SunTrust Bank, now known as Truist 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

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UNAUDITED

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 “spring-forward provision”), provided however (i) if the Convertible Notes are refinanced in full with the proceeds of permitted refinancing indebtedness in accordance with the terms of the 2017 Credit Facility, the maturity date for the 2017 Credit Facility will remain April 20, 2022 and (ii) if the Company issues “New Convertible Notes” (as defined in the 2017 Credit Facility) and retires the Convertible Notes in full, the maturity date for the 2017 Credit Facility will be the earlier of (x) April 20, 2022 or (y) 90 days prior to the maturity date for such New Convertible Notes. The 2017 Credit Facility also 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”)~~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 ~~Agreement,~~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 ~~3.86%~~4.20% during the ~~first nine~~three months ~~of 2017.~~ended March 31, 2020.

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. On May 7, 2019, certain provisions of the 2017 Credit Facility were amended, including setting the maximum leverage ratio at 3.50:1.00 for the remainder of its term, thus eliminating the step down from 3.50:1:00 to 3.25:1.00. 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 ~~September 30, 2017,~~March 31, 2020, there was ~~$197~~$175 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 ~~September 30, 2017.~~March 31, 2020.

~~Repurchase and Redemption~~As a result of ~~2010 Senior~~the spring-forward provision mentioned above, the facility will mature on December 17, 2020 if the Convertible Notes ~~and Termination of 2014 Credit Facility~~

~~On April 20, 2017,~~remain outstanding at that time. The Company does not have call rights that allow it to unilaterally redeem the Convertible Notes. However, the Company ~~used proceeds~~intends to seek to repurchase the Convertible Notes in 2020 using available liquidity. Subject to certain limitations, the Company is permitted to utilize available credit capacity from the 2017 ~~Senior Notes and 2017 Revolver~~Credit Facility 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~~Convertible Notes. Alternatively, the Company ~~terminated~~may pursue amendment of the ~~2014 Credit Facility.~~

~~2010 Senior Notes~~

~~On 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 Facility~~

On 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~~and/or exchange the ~~issuance of letters of credit up~~Convertible Notes. The Company continues to assess its various alternatives to determine the financial strategy best suited to the ~~aggregate amount of $150 million, all maturing on May 1, 2018. Borrowings under both~~Company’s needs and that will provide the ~~2014 Revolver~~most favorable terms, taking into account the Company’s liquidity requirements and anticipated cash flows. Due to the ~~Term Loan bore interest based either on Bank of America’s prime lending rate or~~spring-forward provision in 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.~~

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~~As discussed above, on April 20,~~ 2017 ~~the Company repaid~~Credit Facility, all borrowings under the ~~2014 Credit Facility and concurrently terminated~~facility are included in “Current maturities of long-term debt” on the ~~facility.~~Condensed Consolidated Balance Sheet as of March 31, 2020.

Convertible Notes

On 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 of the Company 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. If the Convertible Notes remain outstanding at maturity, at the Company’s election, the Company may pay off the notes with cash, shares of its common stock or a combination thereof.

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~~10 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 ~~our~~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

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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,~~with cash, shares of its common stock or a combination ~~of cash and shares of its common stock.~~thereof. As of ~~September 30, 2017,~~March 31, 2020, the conversion provisions of the Convertible Notes have not been triggered.

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Interest Expense

Interest expense as reported in the Condensed Consolidated Statements of Operations ~~consists~~consisted of the following:



	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
(in thousands)	2017		2016		2017		2016		2020		2019
Cash interest expense:
Interest on 2017 Senior Notes	$	8,593	$	—	$	15,373	$	—	$	8,594	$	8,594
Interest on 2017 Credit Facility		2,035		—		3,526		—		2,415		2,645
Interest on 2010 Senior Notes		—		5,719		6,926		17,156
Interest on 2014 Credit Facility		—		3,553		4,455		15,943
Interest on Convertible Notes		1,438		1,438		4,313		1,677		1,437		1,438
Other interest		802		556		2,495		2,755		504		574
Cash portion of loss on extinguishment		—		—		1,913		—
Total cash interest expense		12,868		11,266		39,001		37,531		12,950		13,251

Non-cash interest expense:(a)
Amortization of discount and debt issuance costs on Convertible Notes										2,864		2,608
Amortization of debt issuance costs on 2017 Credit Facility										402		361
Amortization of debt issuance costs on 2017 Senior Notes		185		—		326		—		220		205
Amortization of debt issuance costs on 2017 Credit Facility		322		—		603		—
Amortization of discount and debt issuance costs on 2010 Senior Notes		—		251		308		750
Amortization of debt issuance costs on 2014 Credit Facility		—		1,458		1,703		3,969
Amortization of discount and debt issuance costs on Convertible Notes		2,268		2,066		6,646		2,405
Non-cash portion of loss on extinguishment		—		—		5,139		—
Total non-cash interest expense		2,775		3,775		14,725		7,124		3,486		3,174

Total interest expense	$	15,643	$	15,041	$	53,726	$	44,655	$	16,436	$	16,425

____________________________________________________________________________________________________

(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 the Convertible Notes were 7.13% and 9.39%, respectively, for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2020.

~~(7)~~ ~~Contingencies~~(10) Leases

The Company leases certain office space, construction and ~~Commitments~~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 balance sheet, and the Company generally recognizes lease expense for these leases on a straight-line basis over the lease term. As of March 31, 2020, the Company’s operating leases have remaining lease terms ranging from less than one year to 10 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.

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The following table presents components of lease expense for the three months ended March 31, 2020 and 2019:



	Three Months Ended
	March 31,
(in thousands)	2020		2019
Operating lease expense	$	3,767	$	3,781
Short-term lease expense^(a)		17,265		16,571
		21,032		20,352
Less: Sublease income		329		259
Total lease expense	$	20,703	$	20,093

____________________________________________________________________________________________________

(a)Short-term lease expense includes all leases with lease terms ranging from less than one month to one year. Short-term leases include, among other things, construction equipment rented on an as-needed basis as well as temporary housing.

The following table presents supplemental balance sheet information related to operating leases:



		As of March 31,		As of December 31,
(dollars in thousands)	Balance Sheet Line Item	2020		2019
Assets
ROU assets	Other assets	$	37,262	$	40,156
Total lease assets		$	37,262	$	40,156
Liabilities
Current lease liabilities	Accrued expenses and other current liabilities	$	10,511	$	11,392
Long-term lease liabilities	Other long-term liabilities		29,883		31,900
Total lease liabilities		$	40,394	$	43,292
Weighted-average remaining lease term (in years)			4.9		5.0
Weighted-average discount rate			5.99%		5.96%

The following table presents supplemental cash flow information and non-cash activity related to operating leases:



	Three Months Ended
	March 31,
(in thousands)	2020		2019
Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	(3,770)	$	(3,765)
Non-cash activity:
ROU assets obtained in exchange for lease liabilities	$	132	$	1,798

The following table presents maturities of operating lease liabilities on an undiscounted basis as of March 31, 2020:



Year (in thousands)	Operating Leases
2020 (excluding the three months ended March 31, 2020)	$	9,948
2021		9,438
2022		8,034
2023		6,761
2024		5,093
Thereafter		7,618
Total lease payments		46,892
Less: Imputed interest		6,498
Total	$	40,394

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(11) Commitments and Contingencies

The Company and certain of its subsidiaries are involved in litigation and ~~are~~other 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 4. In addition, the Company is contingently liable for ~~commitments~~litigation, performance guarantees and ~~performance guarantees~~other commitments arising in the ordinary course of ~~business. The Company~~business, which are accounted for in accordance with ASC 450, Contingencies. Management reviews these matters regularly and ~~certain of~~updates 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 pending~~resolving disputes. Consequently, these assessments are estimates, and ~~future claims.~~actual amounts may vary from such estimates. In addition, because ~~most contingencies~~such 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, based on current information and discussions with the Company’s legal counsel, the ultimate resolution of ~~these~~other 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 status~~A description of the ~~more significant matters.~~

~~Long Island Expressway/Cross Island Parkway Matter~~

The 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.~~

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~~In March 2011, the Company filed its claim and complaint with the New York State Court of Claims and served~~than 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 asserted~~is 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.follows:

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 Matter~~

Desert 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.

~~Honeywell Street/Queens Boulevard Bridges Matter~~

In 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.

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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.

~~The Company does not expect ultimate resolution of this matter to have a material effect on its consolidated financial statements.~~

~~Westgate Planet Hollywood Matter~~

Tutor-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.

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 Matter~~

Rudolph 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.

~~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 three and nine months ended September 30, 2017.~~

Five Star Electric Matter

In the third quarter of 2015, Five Star Electric Corp. ("(“Five ~~Star"~~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.

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As of ~~September 30, 2017,~~March 31, 2020, 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.

Alaskan Way Viaduct Matter

In January 2011, Seattle Tunnel Partners (“STP”), a joint venture between Dragados USA, Inc. and the Company, entered into a design-build contract with the Washington State Department of Transportation (“WSDOT”) for the construction of a large diameter bored tunnel in downtown Seattle, King County, Washington to replace the Alaskan Way Viaduct, also known as State Route 99. The Company has a 45% interest in STP.

The construction of the large 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 ~~has~~did not ~~accepted~~accept that finding.

The TBM was insured under a Builder’s Risk Insurance Policy (the “Policy”) with Great Lakes Reinsurance (UK) PLC and a consortium of other insurers (the “Insurers”). STP submitted the claims to the Insurers and requested interim payments under the Policy. The Insurers refused to pay and denied coverage. In June 2015, STP filed a lawsuit in the King County Superior Court, State of Washington ~~(“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. 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. ~~Trial~~

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In September 2018, rulings received on pre-trial motions effectively limited potential recovery under the Policy for STP, WSDOT and Hitachi. However, on December 19, 2018, the Court of Appeal granted the Company’s request for a discretionary appeal of those rulings. The appeal is ~~scheduled for October 2018. Discovery is ongoing.~~expected to be heard in mid to late 2020. STP submitted damages to the Insurers in the King County lawsuit in the amount of $532 million. STP also sought these damages from WSDOT related to the pipe-strike by the TBM in a related lawsuit in Thurston County (see following paragraph).

In March 2016, WSDOT filed a complaint against STP in Thurston County Superior Court ~~for~~alleging breach of contract, ~~alleging STP’s delays~~seeking $57.2 million in delay-related damages and ~~failure to perform and~~seeking declaratory relief concerning contract interpretation. STP filed its answer to WSDOT’s complaint and filed a counterclaim against WSDOT and ~~Hitachi. Trial~~Hitachi, as the TBM designer, seeking damages of $667 million. On October 3, 2019, STP and Hitachi entered into a settlement agreement which released and dismissed the claims that STP and Hitachi had against each other. The jury trial between STP and WSDOT commenced on October 7, 2019 and concluded on December 13, 2019, with a jury verdict in favor of WSDOT awarding them $57.2 million in damages. Judgment was entered on January 10, 2020, and a notice of appeal was filed by STP on January 17, 2020. The appeal is ~~set~~expected to be heard in 2021.

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. The charge includes a pre-tax accrual of $25.7 million (which is the Company’s 45% proportionate share of the $57.2 million in damages awarded by the jury to WSDOT). Payment of damages will only be made if the adverse verdict is upheld on appeal, as the payment is secured by a bond for the course of the appeal. Other than the possible future payment in cash of $25.7 million in damages, the charge is for non-cash write-downs primarily related to the costs and estimated earnings in excess of billings and receivables that the Company previously recorded to reflect its expected recovery in this case.

With respect to STP’s direct and indirect claims against the Insurers, management has included in receivables an estimate of the total anticipated recovery concluded to be probable.

George Washington Bridge Bus Station Matter

In August 2013, Tutor Perini Building Corporation (“TPBC”) entered into a contract with the George Washington Bridge Bus Station Development Venture, LLC (the “Developer”) to renovate the George Washington Bridge Bus Station, a mixed-use facility owned by the Port 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 damages to TPBC and its subcontractors, including WDF and Five Star, wholly owned subsidiaries of the Company. The project reached substantial completion on May 16, 2017.

On February 26, 2015, the Developer filed a demand for arbitration, subsequently amended, seeking $30 million in alleged damages and declaratory relief that TPBC’s requests for additional compensation are invalid due to lack of notice. TPBC denied the Developer’s claims and filed a counterclaim in March 2018. TPBC seeks in excess of $113 million in the arbitration, which includes unpaid contract balance claims, the return of $29 million retained by the Developer in alleged damages, as well as extra work claims, pass-through claims and delay claims.

Hearings on the merits commenced on September 24, 2018 before the arbitration panel. On June ~~2018. Discovery~~4, 2019, the arbitration panel, as confirmed by the U.S. District Court in the Southern District of New York, issued a writ of attachment for $23 million of 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. On May 13, 2020, the bankruptcy court will conduct a hearing to determine whether the lenders or the contractors are entitled to the proceeds of any sale of the leasehold, which is ~~ongoing.~~the only property in the Developer’s bankruptcy estate, according to the bankruptcy filings. However, as of May 1, 2020, the sale of the leasehold has been delayed due to the COVID-19 pandemic.

Separately, on July 2, 2018, TPBC filed a lawsuit against the Port Authority, as owner of the project, and STV Incorporated, as designer, seeking the same $113 million in damages. On August 20, 2018, the Port Authority filed a motion to dismiss, which was denied by the court on July 1, 2019. The Port Authority appealed this decision on July 15, 2019. On December 2, 2019, the Court of Appeal denied the Port Authority’s request to stay the trial court action pending the appeal. As a result, the lawsuit is proceeding against the Port Authority before the trial court. On January 13, 2020, the court dismissed STV Incorporated from the case.

On January 27, 2020, the Company filed separate litigation in the U.S. District Court for the Southern District of New York in which the Company asserted claims against individual owners of the Developer for their wrongful conversion of project funds and against certain lenders that received interest payments from project funds and other amounts earmarked to pay the contractors. On

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UNAUDITED

April 20, 2020, motions to dismiss the case were filed on behalf of the defendants.

As of ~~September 30, 2017,~~March 31, 2020, the Company has concluded that the potential for a material adverse financial impact due to the ~~Insurers’ denial of coverage and WSDOT’s legal actions~~Developer’s claims is ~~neither probable nor remote, and the potential loss or range of loss is not reasonably estimable.~~remote. With respect to ~~STP’s~~TPBC’s claims against the ~~Insurers, WSDOT~~Developer and ~~Hitachi,~~the Port Authority, management has ~~included~~made an estimate of the total anticipated recovery ~~concluded to be both probable~~on this project, and ~~reliably estimable,~~such estimate is included in ~~receivables or costs and estimated earnings in excess of billings~~revenue recorded to date. ~~To the extent new facts become known or the final recoveries vary from the estimate, the impact~~

(12) Share-Based Compensation

As of ~~the change will be reflected in the financial statements at that time.~~

~~(8)~~ ~~Other Income, Net~~

~~On May~~March 31, ~~2017, the Company entered into a settlement agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), as successor in interest to Banc~~2020, there were 1,379,266 shares of America Securities LLC and Bank of America, N.A. (collectively “BofA”), to resolve the pending litigation between the Company and Merrill Lynch. The litigation, which was filed by the Company in 2011, related to the purchase by the Company of certain auction-rate securities from BofA.

On June 6, 2017, the Company received the $37.0 million cash settlement payment agreed to in the settlement agreement, and the pending litigation was dismissed with prejudice. Neither party made any admission of liability or wrongdoing, and the settlement agreement includes mutual releases of all claims and liabilities related to the subject matter of the pending litigation.

~~The Company recognized the settlement as a gain during the second quarter of 2017 and reported it as a component of other income, net in its Condensed Consolidated Statement of Operations~~common stock available for ~~the nine months ended September 30, 2017.~~

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~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~UNAUDITED~~

~~(9)~~ ~~Share-Based Compensation~~

~~On April 3, 2017, the Company adopted~~grant under the Tutor Perini Corporation Omnibus Incentive Compensation Plan (“Compensation Plan”), which was approved by the Company’s shareholders on May 24, 2017. The Compensation Plan provides 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. Stock options give the holder the right to purchase shares of the Company’s common stock at an exercise price equal to 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 September 30, 2017, there were 1,839,364 shares available to be granted under this plan.

The Company’s Amended and Restated Tutor Perini Corporation Long-Term Incentive Plan (“Incentive Plan”) is still active. The Incentive Plan is described, and informational disclosures are provided, in the Notes to Consolidated Financial Statements included in the Form 10-K for the year ended December 31, 2016. As of September 30, 2017, there were 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 these shares. As of September 30, 2017, the Incentive Plan had an aggregate of 4,360,018 of restricted stock units and stock options from outstanding, historical awards that either have not vested or have vested but have not been exercised.

Plan. During the first ~~nine~~three months of ~~2017~~2020 and ~~2016,~~2019, the Company issued ~~in total from both the Compensation Plan and the Incentive Plan,~~ the following share-based instruments: (1) restricted stock units ~~of 1,055,000~~totaling 75,000 and ~~483,387 at~~175,000 with weighted-average fair values per share ~~prices~~ of ~~$30.03~~$13.93 and ~~$19.14,~~$20.41, respectively; and (2) stock options totaling 75,000 and 85,000 with weighted-average fair values per share of ~~530,000~~$3.94 and ~~274,000 at~~$7.57, respectively, and weighted-average per share exercise prices of ~~$24.64~~$25.70 and ~~$16.20, respectively; (3)~~$25.62, respectively.

The fair value of restricted and unrestricted stock units is based on the closing price of ~~99,155~~the Company’s common stock on the New York Stock Exchange on the date of the grant and ~~64,603 at~~the fair value of stock options is based on the Black-Scholes model. The fair value of stock options granted during the first three months of 2020 was determined using the Black-Scholes model based on the following weighted-average ~~per share prices~~assumptions: (i) expected life of ~~$26.26~~6.0 years, (ii) expected volatility of 44.91%, (iii) risk-free rate of 1.56%, and ~~$21.67, respectively.~~(iv) 0 quarterly dividends. Certain performance-based awards contain market condition components and are valued on the date of grant using a Monte Carlo simulation model.

~~Effective January 1, 2017,~~

For the three months ended March 31, 2020 and 2019, the Company ~~prospectively adopted ASU 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting (Topic 718), which simplifies several aspects~~recognized, as part of ~~the accounting~~general and administrative expenses, costs for share-based payment ~~transactions, including~~arrangements totaling $4.5 million and $5.5 million, respectively. As of March 31, 2020, the ~~accounting for the income tax effect~~balance of share-based transactions and the forfeiture of share-based instruments. Upon this adoption, the Company elected an accounting policy requiring forfeitures of share-based instruments to be accounted for upon occurrence. As a result, the Company will recognize the full grant-date fair value of share-based awards throughout the requisite service period, with any adjustments for forfeitures recognized only if and when a forfeiture occurs. This policy notwithstanding, the Company will continue to assess the probability that performance targets will be achieved, and will adjustunamortized share-based compensation expense ~~accordingly. During the nine months ended September 30, 2017, a total of 20,985 performance-based restricted stock units, with~~was $18.1 million, which is expected to be recognized over a weighted-average ~~per share price~~period of $23.91, and 19,466 performance-based stock options, with a weighted-average per share exercise price of $26.56, were forfeited; however, the impact of these forfeitures was not recognized during this period because it was previously recognized in the fourth quarter of 2016 in accordance with the provisions of ASC 718, ~~Compensation-Stock Compensation.~~1.8 years.

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~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~UNAUDITED~~

~~(10)~~ (13) Employee Pension Plans

The Company has a defined benefit pension plan and an unfunded supplemental retirement plan. Effective ~~September~~June 1, 2004, all benefit accruals under these plans were frozen; however, the current vested benefit was preserved. The pension disclosure presented below includes aggregated amounts for both of the Company’s plans.

The following table sets forth a summary of the net periodic benefit cost for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016:~~2019:



	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(in thousands)	2017		2016		2017		2016		2020		2019
Interest cost	$	975	$	1,053	$	2,925	$	3,159	$	758	$	948
Expected return on plan assets		(1,088)		(1,203)		(3,264)		(3,609)		(1,006)		(1,043)
Amortization of net loss		456		427		1,368		1,281		592		463
Other		213		150		639		450		231		225
Net periodic benefit cost	$	556	$	427	$	1,668	$	1,281	$	575	$	593

~~(11)~~ 20

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

(14) Fair Value Measurements

The fair value hierarchy established by ASC 820, Fair Value Measurement, prioritizes the use of inputs used in valuation techniques into the following three levels:

~~Level 1 inputs are observable quoted prices in active markets for identical assets or liabilities~~

~~Level 2 inputs are observable, either directly or indirectly, but are not Level 1 inputs~~

~~Level 3 inputs are unobservable~~

Level 1 inputs are observable quoted prices in active markets for identical assets or liabilities

Level 2 inputs are observable, either directly or indirectly, but are not Level 1 inputs

Level 3 inputs are unobservable

The following fair value hierarchy table presents the Company’s assets that are measured at fair value on a recurring basis as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016:~~2019:



	As of March 31, 2020								As of December 31, 2019
	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)	$	198,122	$	—	$	—	$	198,122	$	193,685	$	—	$	—	$	193,685
Restricted cash^(a)		5,956		—		—		5,956		8,416		—		—		8,416
Restricted investments^(b)		—		75,409		—		75,409		—		70,974		—		70,974
Investments in lieu of retainage^(c)		94,519		1,103		—		95,622		89,572		1,219		—		90,791
Total	$	298,597	$	76,512	$	—	$	375,109	$	291,673	$	72,193	$	—	$	363,866

____________________________________________________________________________________________________

As of September 30, 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)

$
221,878

$
—

$
—

$
221,878

$
146,103

$
—

$
—

$
146,103
Restricted cash (a)

17,424

—

—

17,424

50,504

—

—

50,504
Investments in lieu of retainage (b)

56,102

3,059

—

59,161

46,855

4,411

—

51,266
Total

$
295,404

$
3,059

$
—

$
298,463

$
243,462

$
4,411

$
—

$
247,873

(a)Includes money market funds and short-term investments with ~~original~~ maturity dates of three months or ~~less.~~less when acquired.

(b)Restricted investments, as of March 31, 2020, consist of investments in corporate debt securities of $35.6 million, U.S. government agency securities of $38.3 million and corporate certificates of deposits of $1.5 million with maturities of up to five years, and are valued based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets and are therefore classified as Level 2 assets. As of December 31, 2019, restricted investments consisted of investments in corporate debt securities of $35.8 million, U.S. government agency securities of $33.8 million and corporate certificates of deposits of $1.4 million with maturities of up to five years. The amortized cost of these available-for-sale securities at March 31, 2020 and December 31, 2019 was not materially different from the fair value.

(c)Investments in lieu of ~~customer~~ retainage are included in ~~accounts~~retainage receivable and as of March 31, 2020 are comprised of money market funds of $94.5 million and municipal bonds ~~the majority~~ of ~~which are rated A3 or better.~~$1.1 million. 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 bonds are measured using readily available pricing sources for comparable instruments; therefore, they are classified as Level 2 assets. ~~All~~As of December 31, 2019, investments in lieu of retainage consisted of money market funds of $89.6 million and municipal bonds of $1.2 million. The amortized cost of these available-for-sale securities at March 31, 2020 and December 31, 2019 was not materially different from the ~~above investments are available-for-sale securities.~~fair value.

~~The Company did not have material transfers between Levels 1 and 2 during the nine months ended September 30, 2017 or 2016.~~

The carrying values of receivables, payables and other amounts arising out of normal contract activities, including retainage, which may be settled beyond one year, are estimated to approximate fair value. The Company has restricted investments with an aggregate fair value of $48.7 million as of September 30, 2017, determined using Level 2 inputs. Restricted investments are held as collateral to secure insurance related contingent obligations. They are comprised of various corporate bonds and bank notes that are rated A3 or better and have maturities within the Company’s operating cycle. These restricted investments are held-to-maturity securities carried at amortized cost of $48.8 million as of September 30, 2017. Of the Company’s long-term debt, the fair value of the 2017 Senior Notes was $416.3 million and $485.0 million as of ~~September 30, 2017 was $537.5 million.~~March 31, 2020 and December 31, 2019, respectively. 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 6. The fair value of the~~

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~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~UNAUDITED~~

Convertible Notes was ~~$231.9~~$184.5 million and ~~$228.4~~$193.4 million as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, respectively. The fair values of the 2017 ~~Senior Notes, 2010~~ Senior Notes and Convertible Notes were determined using Level 1 inputs, specifically current observable market prices. The reported value of the Company’s remaining ~~long-term debt at September 30, 2017~~borrowings approximates fair value as of March 31, 2020 and December 31, ~~2016 approximates fair value.~~2019.

~~(12)~~ (15) Variable Interest Entities ~~(“VIE”)~~(VIEs)

~~From time to time the~~The Company may form joint ventures or partnerships with third parties for the execution of ~~single contracts or~~ projects. In accordance with ASC 810, Consolidation(“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 Company reassesses its initial determination of whether the joint venture is a VIE.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

ASC 810 also requires the Company to determine whether it is the primary beneficiary of the VIE. The Company concludes that it is the primary beneficiary and consolidates the VIE if the Company has both (a) the power to direct the economically significant activities of the VIE and (b) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. The Company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining if the Company is the primary beneficiary. The Company also considers all parties that have direct or implicit variable interests when determining whether it is the primary beneficiary. In accordance with ASC 810, management’s assessment of whether the Company is the primary beneficiary of a VIE is performed continuously.

As of ~~September 30, 2017,~~March 31, 2020, the Company had ~~consolidated~~unconsolidated VIE-related current assets ~~of $115.4 million~~ and liabilities of ~~$96.9~~$0.7 million ~~all of which are classified as current~~ and ~~are~~$0.7 million, respectively, included in the Company’s Condensed Consolidated Balance Sheet. As of December 31, 2019, the Company had unconsolidated VIE-related current assets and liabilities of $1.5 million and $1.4 million, respectively, included in the Company’s Condensed Consolidated Balance Sheet. 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 March 31, 2020.

~~One large~~As of March 31, 2020, the Company’s Condensed Consolidated Balance Sheet included current and noncurrent assets of $339.1 million and $43.3 million, respectively, as well as current liabilities of $531.9 million related to the operations of its consolidated VIEs. As of December 31, 2019, the Company’s Condensed Consolidated Balance Sheet included current and noncurrent assets of $365.0 million and $52.0 million, respectively, as well as current liabilities of $556.1 million related to the operations of its consolidated VIEs.

Below is a discussion of some of the Company’s more significant or unique VIEs.

The Company established a joint venture ~~that the Company is consolidating was established~~ to construct the Purple Line ~~Segment~~Extension Section 2 ~~Extension project, a $1.4 billion~~(Tunnels and Stations) and Section 3 (Stations) mass-transit ~~project~~projects in Los Angeles, ~~California.~~California with a 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. 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. The Company has determined that this joint venture is a VIE for which the Company is the primary beneficiary.

~~(13)~~ The Company also established a joint venture with Parsons Corporation (“Parsons”) to construct the Newark Liberty International Airport Terminal One project, a $1.4 billion transportation infrastructure project in Newark, New Jersey. The Company has an 80% interest in the joint venture with the remaining 20% held by Parsons. 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. The Company has determined that this joint venture is a VIE for which the Company is the primary beneficiary.

(16) Changes in Equity

A reconciliation of the changes in equity for the three months ended March 31, 2020 and 2019 is provided below:



	Three Months Ended March 31, 2020
							Accumulated
			Additional				Other
	Common		Paid-in		Retained		Comprehensive		Noncontrolling		Total
(in thousands)	Stock		Capital		Earnings		Loss		Interests		Equity
Balance - December 31, 2019	$	50,279	$	1,117,972	$	313,991	$	(42,100)	$	(9,617)	$	1,430,525
Net income		—		—		17,371		—		8,767		26,138
Other comprehensive loss		—		—		—		(1,028)		(2,020)		(3,048)
Share-based compensation		—		3,507		—		—		—		3,507
Issuance of common stock, net		298		(992)		—		—		—		(694)
Distributions to noncontrolling interests		—		—		—		—		(13,500)		(13,500)
Balance - March 31, 2020	$	50,577	$	1,120,487	$	331,362	$	(43,128)	$	(16,370)	$	1,442,928

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

	Three Months Ended March 31, 2019
							Accumulated
			Additional				Other
	Common		Paid-in		Retained		Comprehensive		Noncontrolling		Total
(in thousands)	Stock		Capital		Earnings		Loss		Interests		Equity
Balance - December 31, 2018	$	50,026	$	1,102,919	$	701,681	$	(45,449)	$	(21,288)	$	1,787,889
Net income (loss)		—		—		(356)		—		5,078		4,722
Other comprehensive income		—		—		—		1,249		102		1,351
Share-based compensation		—		4,783		—		—		—		4,783
Issuance of common stock, net		154		(2,518)		—		—		—		(2,364)
Contributions from noncontrolling interests		—		—		—		—		2,798		2,798
Distributions to noncontrolling interests		—		—		—		—		(4,000)		(4,000)
Balance - March 31, 2019	$	50,180	$	1,105,184	$	701,325	$	(44,200)	$	(17,310)	$	1,795,179

(17) Other Comprehensive Income (Loss)

ASC 220, Comprehensive Income, establishes standards for reporting ~~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 and change in fair value of investments ~~and change in fair value of an interest rate swap~~ as components of accumulated other comprehensive ~~loss~~income (loss) (“AOCI”).

The ~~tax effects of the~~ components of other comprehensive income (loss) and the related tax effects for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016 are~~2019 were as follows:



	Three Months Ended						Three Months Ended						Three Months Ended						Three Months Ended
	September 30, 2017						September 30, 2016						March 31, 2020						March 31, 2019
(in thousands)	Before-Tax Amount		Tax Expense		Net-of-Tax Amount		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
Other comprehensive income (loss):
Defined benefit pension plan adjustments	$	456	$	(187)	$	269	$	427	$	(179)	$	248	$	591	$	(168)	$	423	$	463	$	(133)	$	330
Foreign currency translation adjustments		1,232		(506)		726		(708)		297		(411)		(4,927)		914		(4,013)		479		(131)		348
Unrealized gain (loss) in fair value of investments		21		(9)		12		(145)		66		(79)
Unrealized gain in fair value of investments														757		(215)		542		858		(185)		673
Total other comprehensive income (loss)		1,709		(702)		1,007		(426)		184		(242)		(3,579)		531		(3,048)		1,800		(449)		1,351
Other comprehensive income (loss) attributable to Tutor Perini Corporation	$	1,709	$	(702)	$	1,007	$	(426)	$	184	$	(242)
Less: Other comprehensive income (loss) attributable to noncontrolling interests^(a)														(2,020)		—		(2,020)		102		—		102
Total other comprehensive income (loss) attributable to Tutor Perini Corporation													$	(1,559)	$	531	$	(1,028)	$	1,698	$	(449)	$	1,249

1823

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

~~The tax effects of the components of other comprehensive income (loss) for the nine months ended September 30, 2017 and 2016 are as follows:~~

Nine Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016
(in thousands)
Before-Tax Amount

Tax (Expense) Benefit

Net-of-Tax Amount

Before-Tax Amount

Tax (Expense) Benefit

Net-of-Tax Amount
Other comprehensive income:

Defined benefit pension plan adjustments
$
1,368

$
(562)

$
806

$
1,280

$
(461)

$
819
Foreign currency translation adjustment

2,242

(921)

1,321

500

(239)

261
Unrealized loss in fair value of investments

(20)

8

(12)

(403)

179

(224)
Unrealized loss in fair value of interest rate swap

—

—

—

(45)

21

(24)
Total other comprehensive income

3,590

(1,475)

2,115

1,332

(500)

832
Other comprehensive income attributable to Tutor Perini Corporation
$
3,590

$
(1,475)

$
2,115

$
1,332

$
(500)

$
832

The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation during the three ~~and nine~~ months ended ~~September 30, 2017 are~~March 31, 2020 and 2019 were as follows:



	Three Months Ended September 30, 2017								Three Months Ended March 31, 2020
	Defined				Unrealized		Accumulated		Defined				Unrealized		Accumulated
	Benefit		Foreign		Gain in		Other		Benefit		Foreign		Gain (Loss) in		Other
	Pension		Currency		Fair Value of		Comprehensive		Pension		Currency		Fair Value of		Comprehensive
(in thousands)	Plan		Translation		Investments, Net		Loss		Plan		Translation		Investments, Net		Income (Loss)
Attributable to Tutor Perini Corporation:
Balance as of June 30, 2017	$	(40,328)	$	(4,269)	$	292	$	(44,305)
Other comprehensive gain before reclassifications		—		726		12		738
Balance as of December 31, 2019									$	(37,826)	$	(5,371)	$	1,097	$	(42,100)
Other comprehensive income (loss) before reclassifications										—		(1,993)		546		(1,447)
Amounts reclassified from AOCI										423		—		(4)		419
Total other comprehensive income (loss)										423		(1,993)		542		(1,028)
Balance as of March 31, 2020									$	(37,403)	$	(7,364)	$	1,639	$	(43,128)

Attributable to Tutor Perini Corporation:
Balance as of December 31, 2018									$	(38,670)	$	(6,315)	$	(464)	$	(45,449)
Other comprehensive income before reclassifications										—		246		665		911
Amounts reclassified from AOCI		269		—		—		269		330		—		8		338
Total other comprehensive income		269		726		12		1,007		330		246		673		1,249
Balance as of September 30, 2017	$	(40,059)	$	(3,543)	$	304	$	(43,298)
Balance as of March 31, 2019									$	(38,340)	$	(6,069)	$	209	$	(44,200)

Nine Months Ended September 30, 2017

Defined

Unrealized

Accumulated

Benefit

Foreign

Gain (Loss) in

Other

Pension

Currency

Fair Value of

Comprehensive
(in thousands)
Plan

Translation

Investments, Net

Loss
Attributable to Tutor Perini Corporation:

Balance as of December 31, 2016
$
(40,865)

$
(4,864)

$
316

$
(45,413)
Other comprehensive gain (loss) before reclassifications

—

1,321

(12)

1,309
Amounts reclassified from AOCI

806

—

—

806
Total other comprehensive income (loss)

806

1,321

(12)

2,115
Balance as of September 30, 2017
$
(40,059)

$
(3,543)

$
304

$
(43,298)

~~Table of Contents~~

~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~UNAUDITED~~

~~The changes in AOCI balance by component (after tax) for the three and nine months ended September 30, 2016 are as follows:~~

Three Months Ended September 30, 2016

Unrealized

Defined

Unrealized

Gain (Loss) in

Accumulated

Benefit

Foreign

Gain (Loss) in

Fair Value of

Other

Pension

Currency

Fair Value of

Interest Rate

Comprehensive
(in thousands)
Plan

Translation

Investments, Net

Swap, Net

Loss
Attributable to Tutor Perini Corporation:

Balance as of June 30, 2016
$
(37,671)

$
(3,931)

$
511

$
—

$
(41,091)
Other comprehensive loss before reclassifications

—

(411)

(79)

—

(490)
Amounts reclassified from AOCI

248

—

—

—

248
Total other comprehensive income (loss)

248

(411)

(79)

—

(242)
Balance as of September 30, 2016
$
(37,423)

$
(4,342)

$
432

$
—

$
(41,333)

Nine Months Ended September 30, 2016

Unrealized

Defined

Unrealized

Gain (Loss) in

Accumulated

Benefit

Foreign

Gain (Loss) in

Fair Value of

Other

Pension

Currency

Value of

Interest Rate

Comprehensive
(in thousands)
Plan

Translation

Investments, Net

Swap, Net

Loss
Attributable to Tutor Perini Corporation:

Balance as of December 31, 2015
$
(38,242)

$
(4,603)

$
656

$
24

$
(42,165)
Other comprehensive gain (loss) before reclassifications

—

261

(224)

(24)

13
Amounts reclassified from AOCI

819

—

—

—

819
Total other comprehensive income (loss)

819

261

(224)

(24)

832
Balance as of September 30, 2016
$
(37,423)

$
(4,342)

$
432

$
—

$
(41,333)

~~The significant items reclassified out of AOCI and the corresponding location and impact on the Condensed Consolidated Statement of Operations are as follows:~~

Location in

Three Months Ended

Nine Months Ended

Condensed Consolidated

September 30,

September 30,
(in thousands)

Statements of Operations

2017

2016

2017

2016
Defined benefit pension plan adjustments

Various accounts(a)

$
456

$
427

$
1,368

$
1,280
Income tax benefit

Provision for income taxes

(187)

(179)

(562)

(461)
Net of tax

$
269

$
248

$
806

$
819

~~(a)Defined benefit pension plan adjustments were reclassified to cost of operations and general and administrative expenses.~~

~~Table of Contents~~

~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~UNAUDITED~~

~~(14)~~ (18) Business Segments

The Company offers general contracting, pre-construction planning and comprehensive project management services, including planning and scheduling of manpower, equipment, materials and subcontractors required for the timely completion of a project in accordance with the terms and specifications contained in a construction contract. The Company also offers self-performed construction services: site ~~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, ~~our~~the Company’s business is conducted through ~~three~~3 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.

The Civil segment specializes in public works construction and the replacement and reconstruction of infrastructure. The ~~civil~~ contracting services provided by the Civil segment include construction and rehabilitation of highways, bridges, tunnels, mass-transit systems, and water management and wastewater treatment facilities.

The Building segment has significant experience providing services for private and public works customers in a number of specialized building markets, including: high-rise residential, hospitality and gaming, transportation, health care, commercial and government offices, sports and entertainment, education, correctional facilities, biotech, pharmaceutical, industrial and ~~high-tech.~~technology.

The Specialty Contractors segment specializes in electrical, mechanical, plumbing, HVAC, fire protection systems 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 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.

To the extent that a contract is co-managed and co-executed among segments, the Company allocates the share of revenues and costs of the contract to each segment to reflect the shared responsibilities in the management and execution of the project.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

The following tables set forth certain reportable segment information relating to the Company’s operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016:~~2019:



	Reportable Segments													Reportable Segments
					Specialty							Consolidated						Specialty							Consolidated
(in thousands)	Civil			Building	Contractors		Total		Corporate			Total		Civil			Building	Contractors		Total		Corporate			Total
Three Months Ended September 30, 2017
Three Months Ended March 31, 2020
Total revenue	$	458,487	$	500,420	$	310,137	$	1,269,044	$	—		$	1,269,044	$	580,087	$	505,082	$	282,452	$	1,367,621	$	—		$	1,367,621
Elimination of intersegment revenue		(62,667)		(6,872)		—		(69,539)		—			(69,539)		(93,458)		(23,318)		(116)		(116,892)		—			(116,892)
Revenue from external customers	$	395,820	$	493,548	$	310,137	$	1,199,505	$	—		$	1,199,505	$	486,629	$	481,764	$	282,336	$	1,250,729	$	—		$	1,250,729
Income from construction operations	$	38,144	$	14,058	$	14,575	$	66,777	$	(17,705)	(a)	$	49,072
Income (loss) from construction operations														$	46,121	$	3,516	$	8,279	$	57,916	$	(10,689)	^(a)	$	47,227
Capital expenditures	$	1,248	$	36	$	81	$	1,365	$	164		$	1,529	$	11,192	$	12	$	473	$	11,677	$	16		$	11,693
Depreciation and amortization (b)	$	5,213	$	502	$	1,166	$	6,881	$	2,824		$	9,705	$	18,616	$	427	$	993	$	20,036	$	2,775		$	22,811

Three Months Ended September 30, 2016
Three Months Ended March 31, 2019
Total revenue	$	506,100	$	560,795	$	331,613	$	1,398,508	$	—		$	1,398,508	$	383,622	$	436,243	$	191,527	$	1,011,392	$	—		$	1,011,392
Elimination of intersegment revenue		(47,277)		(18,253)		—		(65,530)		—			(65,530)		(50,128)		(2,777)		—		(52,905)		—			(52,905)
Revenue from external customers	$	458,823	$	542,542	$	331,613	$	1,332,978	$	—		$	1,332,978	$	333,494	$	433,466	$	191,527	$	958,487	$	—		$	958,487
Income from construction operations	$	50,307	$	13,296	$	11,084	$	74,687	$	(13,768)	(a)	$	60,919
Income (loss) from construction operations														$	41,745	$	3,133	$	(7,488)	$	37,390	$	(14,477)	^(a)	$	22,913
Capital expenditures	$	1,342	$	79	$	54	$	1,475	$	117		$	1,592	$	14,012	$	55	$	123	$	14,190	$	222		$	14,412
Depreciation and amortization (b)	$	12,669	$	541	$	1,243	$	14,453	$	2,886		$	17,339	$	9,370	$	503	$	1,064	$	10,937	$	2,780		$	13,717

~~(a)~~

~~Consists principally of cash, equipment, tax-related assets and insurance-related assets, offset by the elimination of assets related to intersegment revenue.~~

TUTOR PERINI CORPORATION AND SUBSIDIARIES

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~UNAUDITED~~

~~Table of Contents~~

~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discusses our financial position as of ~~September 30, 2017~~March 31, 2020 and the results of our operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and should be read in conjunction with other information, including the unaudited Condensed Consolidated Financial Statements and notes ~~contained herein as well as~~included in Part I, Item 1, Financial Information, of this Quarterly Report on Form 10-Q, the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and in Part II, Item 1A below.

Forward-Looking Statements

This Quarterly Report on Form 10-Q, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results, which are intended to be covered by the safe harbor provision for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are statements that could be deemed forward-looking statements. Words such as “achieve,” “anticipate,” “assumes,” “believes,” “continue,” “could,” “estimate,” “expects,” “forecast,” “hope,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “would,” variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Although such statements are based on currently available financial and economic data as well as management’s estimates and expectations, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors potentially contributing to such differences include, among others:

The impact of the COVID-19 pandemic and related events that are beyond our control, including possible effects on our business and operations, customers and suppliers, and employees, contractors and subcontractors, which could affect adversely our projects and the geographic regions in which we conduct business;

A significant slowdown or decline in economic conditions;

Revisions of estimates of contract risks, revenue or costs; the timing of new awards; or the pace of project execution may result in losses or lower than anticipated profit;

Unfavorable outcomes of existing or future litigation or dispute resolution proceedings against customers (project owners, developers, general contractors, etc.), subcontractors or suppliers, as well as failure to promptly recover significant working capital invested in projects subject to such matters;

The requirement to perform extra, or change order, work resulting in disputes or claims or adversely affecting our working capital, profits and cash flows;

Risks and other uncertainties associated with assumptions and estimates used to prepare financial statements;

Inability to retain key members of our management, to hire and retain personnel required to complete projects or implement succession plans for key officers;

Failure to meet contractual schedule requirements, which could result in higher costs and reduced profits or, in some cases, exposure to financial liability for liquidated damages and/or damages to customers;

Failure to meet our obligations under our debt agreements;

Decreases in the level of government spending for infrastructure and other public projects;

Downgrades in our credit ratings;

Failure of our joint venture partners to perform their venture obligations, which could impose additional financial and performance obligations on us, resulting in reduced profits or losses;

Client cancellations of, or reductions in scope under, contracts reported in our backlog;

Increased competition and failure to secure new contracts;

Impairment of our goodwill or other indefinite-lived intangible assets;

The impact of inclement weather conditions on projects;

Possible systems and information technology interruptions, including due to cyberattack, systems failures or other similar events;

Failure to comply with laws and regulations related to government contracts;

Potential dilutive impact of our Convertible Notes in our diluted earnings per share calculation;

Economic, political and other risks, including civil unrest, security issues, labor conditions, corruption and other unforeseeable events in countries where we do business, resulting in unanticipated losses;

Uncertainty from the expected discontinuance of the London Interbank Offered Rate and transition to any other interest rate benchmark; and

~~Inaccurate estimates of contract risks, revenue or costs; the timing of new awards; or the pace of project execution may result in losses or lower than anticipated profits;~~

~~The requirement to perform extra, or change order, work resulting in disputes or claims or adversely affecting our working capital, profits and cash flows;~~

Table of Contents

~~Unfavorable outcomes of legal proceedings and failure to promptly recover significant working capital invested in projects subject to unresolved legal claims;~~

~~Increased competition and failure to secure new contracts;~~

~~Client cancellations of, or reductions in scope under, contracts reported in our backlog;~~

~~A significant slowdown or decline in economic conditions;~~

~~Actual results could differ from the assumptions and estimates used to prepare financial statements;~~

~~Decreases in the level of government spending for infrastructure and other public projects;~~

Failure to meet contractual schedule requirements, which could result in higher costs and reduced profits or, in some cases, exposure to financial liability for liquidated damages and/or damages to customers;

~~Inability to retain key members of our management, to hire and retain personnel required to complete projects or implement succession plans for key officers;~~

~~Possible systems and information technology interruptions;~~

~~Failure of our joint venture partners to perform their venture obligations, which could impose additional financial and performance obligations on us, resulting in reduced profits or losses;~~

~~The impact of inclement weather conditions on projects;~~

~~Failure to meet our obligations under our debt agreements;~~

~~Failure to comply with laws and regulations related to government contracts;~~

~~Conversion of our outstanding Convertible Notes that could dilute ownership interests of existing stockholders and could adversely affect the market price of our common stock;~~

~~Potential dilutive impact of our Convertible Notes in our diluted earnings per share calculation;~~

Economic, political and other risks, including civil unrest, security issues, labor conditions, corruption and other unforeseeable events in countries where we do business, resulting in unanticipated losses; and

~~Impairment of our goodwill or other indefinite-lived intangible assets.~~

Conversion of our outstanding Convertible Notes that could dilute ownership interests of existing stockholders and could adversely affect the market price of our common stock.

Executive Overview

COVID-19 Update

In the first quarter of 2020, a novel strain of coronavirus, COVID-19, was declared a pandemic. Efforts in the United States to prevent the spread of COVID-19 and mitigate its impacts intensified during March 2020. All 50 states in the United States have declared states of emergency, and various countries around the world, including the United States, have taken steps to restrict travel. Many states and cities within the United States have also enacted temporary closures of businesses, issued stay-at-home orders and taken other restrictive measures in response to the pandemic. These actions and measures have been changing frequently, and often on a daily basis.

For the three months ended March 31, 2020, the COVID-19 pandemic did not have a significant impact on our business. The vast majority of our projects have been considered essential business activities, which has allowed our projects to continue while implementing new health and safety requirements. However, some of our projects, primarily for private (commercial) customers in our Building and Specialty Contractors segments, have experienced or continue to experience temporary suspensions or reduced project activities as a result of the COVID-19 pandemic. The greatest financial impact to the Company thus far has been in New York and California, primarily due to temporary suspensions, the impact of new social distancing and other health and safety requirements, and in some cases employee and subcontractor absences.

Due to the fluidity of the COVID-19 pandemic, uncertainties as to its scope and duration, and ongoing changes in the way that governments, businesses and individuals react and respond to the pandemic, the Company is unable at this time to accurately predict the pandemic’s future impact on the Company’s business, results of operations, financial condition or liquidity. Among other things, governments could prohibit the continuation of certain projects that to date have been designated as “essential” or could impose health, safety and other operational requirements on such projects that could result in delays to or suspensions of such projects. In addition, employees and contractors working on such projects could be unable or unwilling to continue working on them, perhaps for extended periods. The COVID-19 pandemic also could negatively affect the ability of counterparties or joint venture partners to make required payments on a timely basis or at all.

Operating Results

Consolidated revenue for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 was ~~$1.2~~$1.3 billion, ~~and $3.6 billion~~up 30% compared to

~~$1.3~~ $1.0 billion ~~and $3.7 billion, respectively,~~ for the same ~~periods~~period in ~~2016.~~ 2019. The ~~decrease for both periods~~strong growth was ~~principally due~~mostly attributable to ~~reduced project execution~~increased activities on various ~~Civil segment~~infrastructure projects in ~~New York, Washington~~the Civil and the Midwest, and certain Building segment projects in California and Florida, all of which are completed or nearing completion. The decrease was partially offset by increased activity on certain mass-transit projects in New York and California, as well as certain hospitality and gaming projects in California and Maryland. Revenue for the third quarter of 2017 was lower than expected, mainly due to certain delays in the timing ofSpecialty Contractors segments.

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~~new awards and project execution activities for previously awarded projects, which are expected to shift the timing of those revenue contributions to 2018.~~

Income from construction operations for the ~~three and nine months ended September 30, 2017~~first quarter of 2020 was ~~$49.1~~$47.2 million, ~~and $120.1 million, a decrease of $11.8 million, or 19%, and $29.7 million, or 20%, respectively,~~more than double when compared to $22.9 million for the same ~~periods~~period in ~~2016.~~ 2019. The decrease for the three months ended September 30, 2017 was principally due to reduced project execution activities on various projects in the Midwest and Washington, which are completed or nearing completion. For the nine months ended September 30, 2017, the decreaseincrease was primarily driven by ~~the impact of unfavorable project adjustments recorded in the second quarter of 2017~~improved performance on ~~certain mechanical~~various projects in New York in the Specialty Contractors segment, ~~none of which were individually material,~~ as well as ~~higher general and administrative expenses primarily due to higher compensation-related expenses in anticipation of a substantially higher~~contributions associated with volume ~~of new work.~~growth across all segments.

The effective tax rate was 16.4% for the three ~~and nine~~ months ended ~~September 30, 2017 was 26.4% and 34.1% respectively,~~March 31, 2020, compared to ~~39.9% and 40.6%~~31.7% for the ~~three and nine months ended September 30, 2016.~~comparable period in 2019. See Corporate, Tax and Other Mattersbelow for a ~~detailed~~ discussion of the changes in the effective tax rate.

~~Earnings~~Diluted earnings per ~~diluted~~ share for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 was ~~$0.47 and $1.33, respectively,~~$0.34 compared to ~~$0.57 and $1.32 for three and nine months ended September 30, 2016. The decrease~~a loss per share of $0.01 for the ~~third~~same quarter of ~~2017~~2019. The increase was primarily due to the factors ~~mentioned~~discussed above that drove ~~changes~~the increases in revenue and income from construction operations partially offset by a lower effective tax rate. The increase for the 2017 nine-month period was primarily due to a gain on a $37.0 million ($0.44 per diluted share) legal settlement in the second quarter of 2017 (see Note 8 of the Notes to the Condensed Consolidated Financial Statements) and a lower effective tax rate for the nine-month period, mostly offset by the projects that resulted in the decreases in revenue and income from construction operations discussed above. .

Consolidated new awards for the three ~~and nine~~ months ended ~~September 30, 2017 were $1.1~~March 31, 2020 totaled $0.6 billion ~~and $4.8 billion, respectively,~~ compared to ~~$0.8 billion and $3.0~~$3.2 billion for the ~~three~~same period in 2019. The lower volume of new awards in the current year period was due to the timing of bidding for and ~~nine months ended September 30, 2016.~~ awards of prospective project opportunities, which the Company expects will occur later in 2020, whereas the prior year period included a record volume of new awards. The ~~Civil segment was~~Specialty Contractors and Building segments were the ~~major contributor~~primary contributors to the new award activity in ~~both periods, with civil awards comprising more than half~~the first quarter of ~~all~~2020. The most significant new awards ~~for the first nine months of 2017.~~ were three military projects in North Carolina and Florida collectively totaling $133 million and a $64 million mining project in Alabama.

Consolidated backlog as of ~~September 30, 2017~~March 31, 2020 was ~~$7.5~~$10.6 billion compared to ~~$6.2~~$11.2 billion at December 31, ~~2016. The significant backlog growth since~~2019. Backlog declined in the ~~end~~first quarter of ~~2016 has been attributable to~~2020 as a ~~large~~result of revenue not being fully offset by the volume of new awards ~~booked during the first nine months of 2017, particularly as a result of continued strong demand for civil construction services.~~. As of ~~September 30, 2017,~~March 31, 2020, the mix of backlog by segment was approximately ~~58%~~54% for Civil, ~~21%~~24% for Building and ~~21%~~22% for Specialty Contractors.

The following table presents the Company’s backlog by business segment, reflecting changes from December 31, ~~2016~~2019 to ~~September 30, 2017:~~March 31, 2020:

Backlog at

New

Revenue

Backlog at
(in millions)
December 31, 2016

Awards(a)

Recognized

September 30, 2017
Civil
$
2,672.1

$
2,808.3

$
(1,173.0)

$
4,307.4
Building

1,981.2

1,101.0

(1,483.5)

1,598.7
Specialty Contractors

1,573.8

929.4

(907.6)

1,595.6
Total
$
6,227.1

$
4,838.7

$
(3,564.1)

$
7,501.7

~~(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.~~



	Backlog at		New		Revenue		Backlog at
(in millions)	December 31, 2019		Awards^(a)		Recognized		March 31, 2020^(b)
Civil	$	6,037.2	$	178.5	$	(486.6)	$	5,729.1
Building		2,790.3		183.0		(481.8)		2,491.5
Specialty Contractors		2,393.6		225.7		(282.3)		2,337.0
Total	$	11,221.1	$	587.2	$	(1,250.7)	$	10,557.6

(a)New awards consist of the original contract price of projects added to backlog plus or minus subsequent changes to the estimated total contract price of existing contracts.

(b)Backlog may differ from the transaction prices allocated to the remaining performance obligations as disclosed in Note 3 of the Notes to Condensed Consolidated Financial Statements. Such differences relate to the timing of executing a formal contract or receiving a notice to proceed. More specifically, backlog sometimes 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 the project will proceed (e.g., adequate funding is in place).

While we did not experience significant adverse impacts to our business related to the COVID-19 pandemic in the first quarter of 2020, the situation remains fluid and uncertain, and therefore, the Company cannot assess the degree to which it might experience future adverse impacts. The ~~growth~~general outlook for the ~~Company~~Company’s growth in 2020 and over the next several years remains ~~very~~ favorable, particularly ~~for~~in the Civil ~~segment.~~and Specialty Contractors segments, but the impact of the COVID-19 pandemic could adversely impact future performance and operations. In addition, the Company’s pace of growth could be impacted by project delays or the timing of project commencements, ramp-up activities and completions, as the Company has experienced in recent years. We anticipate that we will continue to ~~the large current backlog, we expect~~win our share of significant new awards ~~based on~~resulting from long-term capital spending plans by ~~various~~ state, local and federal customers, ~~and typically~~as well as bipartisan support for infrastructure ~~investments.~~investments and limited competition for some of the largest project opportunities. In ~~November 2016,~~recent elections, voters in numerous states approved dozens of long-term transportation funding measures totaling approximately $200 billion ~~which have yet to have a significant impact on the Company’s bidding activities.~~in long-term funding. The largest of these were in Los Angeles County, where Measure M, a half-cent sales tax increase, was approved and is expected to generate $120 billion of funding over ~~the next~~ 40 years, and in Seattle, Washington, where Sound Transit 3 was passed and is expected to generate $54 billion of funding over ~~the next~~ 25 years for regional transportation projects. In addition, in April 2017 California enacted into law a $52 billion, 10-year transportation bill. This new long-term funding measure should lead to various new civil project opportunities in California beginning in 2018. Furthermore, the Trump administration continues to plan a significant infrastructure investment program and is preparing to present its plan for approval and funding. The $305 billion Fixing America’s Surface Transportation Act (FAST Act) is also expected to provideyears. As state and local ~~agencies~~governments respond to the economic burdens of the COVID-19 pandemic, they may delay or cancel planned infrastructure investments. They also may face reduced revenues from income and sales taxes, fuel taxes and tolls. The extent of such effects, their duration, and how state and local governments will respond remains uncertain, just as the scope and duration of the COVID-19 pandemic remains uncertain. The possibility of additional federal financial assistance or stimulus programs directed toward assisting state and local governments or specifically targeting significant investments in infrastructure have been discussed as possible additional pieces of the federal government’s ongoing response to the COVID-19 pandemic. Such additional federal financial assistance or stimulus programs could favorably impact the Company’s current work and prospective opportunities. However, the timing and significance of such additional federal government actions, if any, remain uncertain.In addition, several large, long-duration civil infrastructure programs with ~~federal funding for numerous highway, bridge~~which we are already involved continue to progress. Finally, the COVID-19 pandemic’s dramatic impact on the U.S. economy has led to interest rates that once again are at record low levels and ~~mass-transit projects through 2020. Finally, a~~may be conducive to continued, ~~low interest rate environment should sustain high demand~~ and ~~continued~~potentially increased, spending ~~by private and public customers~~ on infrastructure projects.

For a more detailed discussion of operating performance of each business segment, corporate general and administrative ~~expense~~expenses and other items, see Results of Segment Operations, Corporate, Tax and Other Matters and Liquidity and ~~Financial Condition~~ Capital Resources below.

Results of Segment Operations

The results of our Civil, Building and Specialty Contractors segments are discussed below.

Civil Segment

Revenue and income from construction operations for the Civil segment are summarized as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(in millions)	2017		2016		2017		2016		2020		2019
Revenue	$	395.8	$	458.8	$	1,173.0	$	1,260.4	$	486.6	$	333.5
Income from construction operations		38.1		50.3		128.2		129.0		46.1		41.8

opportunities, which are expected to be awarded later in the year, whereas the first quarter of 2019 included ~~a U.S. embassy renovation~~several sizeable new awards, such as the Choctaw Casino and Resort project in ~~Uruguay valued at $87 million~~Oklahoma, a large hospitality and ~~$49 million of early scope tasks for a new technology office building~~gaming project in California ~~which is eventually anticipated to be worth approximately $500 million once~~and the ~~remaining funding is released.~~Southland Gaming Casino and Hotel project in Arkansas. Significant new awards and contract adjustments in the first quarter of 2020 included three military projects in North Carolina and Florida collectively totaling $133 million.

Backlog for the Building segment was ~~$1.6~~$2.5 billion as of ~~September 30, 2017~~March 31, 2020 compared to ~~$2.2~~$3.0 billion as of ~~September 30, 2016.~~ March 31, 2019. The ~~backlog decline~~decrease was ~~due to~~driven by revenue ~~recognition~~growth for the segment that ~~outpaced~~was not fully offset by new ~~awards since the end of the third quarter of 2016.~~ awards.The Building segment continues to have a large ~~pipeline~~volume of prospective projects ~~some of which are~~across various end markets and geographic locations. Barring any adverse impacts from the COVID-19 pandemic, demand for our building construction services is expected to ~~be selected and awarded by customers later in this year or in early 2018. Sustained demand is expected~~continue due to ongoing customer spendingsupported by a ~~low~~favorable interest rate environment. The Building segment is well positioned to capture its share of prospective projects based on its customer relationships and long-term reputation for excellence in delivering high-quality projects on time and within budget.

Specialty Contractors Segment

Revenue and income (loss) from construction operations for the Specialty Contractors segment are summarized as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(in millions)	2017		2016		2017		2016		2020		2019
Revenue	$	310.1	$	331.6	$	907.7	$	932.3	$	282.3	$	191.5
Income from construction operations		14.6		11.1		15.3		25.9
Income (loss) from construction operations										8.3		(7.5)

Other Income, Net, Interest Expense and ~~Provision for~~ Income ~~Taxes~~Tax Expense



	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(in millions)	2017		2016		2017		2016		2020		2019
Other income, net	$	1.0	$	2.0	$	42.4	$	5.2	$	0.5	$	0.4
Interest expense		(15.6)		(15.0)		(53.7)		(44.7)		(16.4)		(16.4)
Provision for income taxes		(9.1)		(19.1)		(37.1)		(44.9)
Income tax expense										(5.1)		(2.2)

provided by financing activities for the comparable period ~~of 2016~~ in 2019 was ~~$13.1~~$130.7 million, which was ~~principally due to~~primarily driven by increased net borrowings of ~~$28.4 million, partially offset by $14.9 million in debt issuance costs associated with amendments to our 2014 Credit Facility and the issuance of $200.0 million of Convertible Notes in June 2016.~~$134.3 million.

At ~~September 30, 2017,~~March 31, 2020, we had working capital of ~~$1.6~~$1.4 billion, a ratio of current assets to current liabilities of ~~2.07~~1.62 and a ratio of debt to equity of ~~0.54,~~0.63, compared to working capital of ~~$1.3~~$1.4 billion, a ratio of current assets to current liabilities of ~~1.87~~1.66 and a ratio of debt to equity of ~~0.49~~0.58 at December 31, ~~2016.~~2019.

Debt

Summarized below are the key terms of the 2017 Credit Facility as of March 31, 2020. For additional information regarding our outstanding debt, refer to Note 9 of the Notes to Condensed Consolidated Financial Statements, as applicable.

2017 Credit Facility

On April 20, 2017, we entered into a credit agreement (the “2017 Credit Facility”) with SunTrust Bank, now known as Truist 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 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 “spring-forward provision”), provided however (i) if the Convertible Notes are refinanced in full with the proceeds of permitted refinancing indebtedness in accordance with the terms of the 2017 Credit Facility, the maturity date for the 2017 Credit Facility will remain April 20, 2022 and (ii) if the Company issues “New Convertible Notes” (as defined in the 2017 Credit Facility) and retires the Convertible Notes in full, the maturity date for the 2017 Credit Facility will be the earlier of (x) April 20, 2022 or (y) 90 days prior to the maturity date for such New Convertible Notes. The 2017 Credit Facility also 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. On May 7, 2019, certain provisions of the 2017 Credit Facility were amended, including setting the maximum leverage ratio at 3.50:1.00. For additional information regarding the terms of our 2017 Credit Facility, refer to Note 69 of the Notes to Condensed Consolidated Financial Statements.

As a result of the spring-forward provision mentioned above, the facility will mature on December 17, 2020 if the Convertible Notes remain outstanding at that time. The Company does not have call rights that allow it to unilaterally redeem the Convertible Notes. However, the Company intends to seek to repurchase the Convertible Notes in 2020 using available liquidity. Subject to certain limitations, the Company is permitted to utilize available credit capacity from the 2017 Credit Facility to repurchase the Convertible Notes. Alternatively, the Company may pursue amendment of the 2017 Credit Facility and/or exchange the Convertible Notes. The Company continues to assess its various alternatives to determine the financial strategy best suited to the Company’s needs and that will provide the most favorable terms, taking into account the Company’s liquidity requirements and anticipated cash flows. Due to the spring-forward provision in the 2017 Credit Facility, all borrowings under the facility are included in “Current maturities of long-term debt” on the Condensed Consolidated Balance Sheet as of March 31, 2020.

The table below presents our actual and required consolidated fixed charge coverage ratio and consolidated leverage ratio under the 2017 Credit Facility for the period, which are calculated on a rolling four-quarter basis:



	Twelve Months Ended ~~September 30, 2017~~March 31, 2020
	Actual	Required
Fixed charge coverage ratio	~~2.16 :~~3.58 to 1.00	> or = 1.25 : 1.00
Leverage ratio	~~2.99 :~~2.88 to 1.00	< or = ~~4.00~~3.50 : 1.00

As of ~~the filing date of this Form 10-Q,~~March 31, 2020, we ~~are~~were in compliance and expect to continue to be in compliance with the covenants under the 2017 Credit Facility.

~~2017 Senior Notes~~ Contractual Obligations

On April 20, 2017, we issued $500 million in aggregate principal amount of 6.875% Senior Notes due 2025 (the “2017 Senior Notes”) in a private placement. Interest on the 2017 Senior Notes is payable in arrears semi-annually on May 1 and November 1 of each year, beginning on November 1, 2017. For additional information regarding the terms of our 2017 Senior Notes, refer to Note 6 of the Notes to Condensed Consolidated Financial Statements.

~~Repurchase and Redemption of 2010 Senior Notes and Termination of 2014 Credit Facility~~

We 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, and 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.

~~Aside from the discussion above, there~~There have been no ~~significant~~material changes in our contractual obligations from ~~that~~those described in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019.

Off-Balance Sheet Arrangements

None.

~~Off-Balance Sheet Arrangements~~

~~None~~

Critical Accounting Policies

Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019. Our critical accounting policies are also identified and discussed in Item 7 of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019. See Note 8 of the Notes to Condensed Consolidated Financial Statements for a detailed discussion of our accounting policies related to goodwill.

Recently Issued Accounting Pronouncements

See Note 2 of the Notes to Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in our exposure to market risk from that described in Item 7A of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined by Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q 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 the Company’s disclosure controls and procedures (a) were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. – OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of our business, we are involved in various legal proceedings. We ~~disclosed~~disclose information about certain ~~of our~~pending legal proceedings inpursuant to SEC rules and as we otherwise determine to be appropriate. For information on such pending matters, see Part I, Item 3 of our Annual Report on Form 10-K for the year ended December 31, ~~2016. For an update to those disclosures, see Notes 7 and 8~~2019, updated by Note 11 of the Notes to ~~the~~ Condensed Consolidated Financial ~~Statements.~~Statements included in this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

~~There have been no material changes~~The risk factor discussed below is intended to ~~our~~supplement the risk factors aspreviously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~ 2019.

The COVID-19 pandemic could adversely impact our business, financial condition or results of operations.

The COVID-19 pandemic has created volatility, uncertainty and economic disruption for the Company, our customers, subcontractors and suppliers, and the markets in which we do business. The scope and impact of the COVID-19 pandemic changed quickly during the first few months of 2020, and shelter-in-place rules and other limitations on conducting business generally did not come into effect in geographies where we do business until March 2020. Even where such rules and limitations have been implemented, only certain projects, primarily for private (commercial) customers in our Building and Specialty Contractors segments, have experienced temporary delays. The vast majority of the Company’s projects, especially in the Civil segment, have been designated as essential business, which allows the Company to continue work on those projects. Consequently, the Company’s operations were not significantly impacted during the three months ended March 31, 2020. However, health and economic conditions in the United States have continued to change, and in many instances have worsened, and changing conditions as well as the reactions of government and

customers to such changes could adversely affect our business, possibly for a sustained period. It is too early to assess the full impact that the COVID-19 pandemic, and the actions taken in response to it, will have on our employees, our operating segments and practices, our customers, subcontractors and suppliers, and the regions that we serve, or on our financial condition and results of operations as a whole.

The full impact depends on many factors that are uncertain or not yet identifiable, and in many cases are out of our control. These factors could include, among other things: (1) the duration of the COVID-19 pandemic and the types and magnitude of adverse impacts on the U.S. and global economies; (2) the health and welfare of our employees, and those of our customers, subcontractors and suppliers; (3) evolving business and government actions in response to the pandemic, including stay-at-home measures, changes to what are considered “essential” businesses, social distancing measures, travel bans and additional health and safety requirements that we may be required to observe in order to continue working on our projects; (4) the varying impact that the pandemic may have on industries we serve and on government spending for infrastructure projects, including reduced government spending on infrastructure as a result of lower revenues from taxes and tolls; (5) the response of our customers or prospective customers to the pandemic, including delays, stoppages or terminations of existing projects or potential new awards; (6) increases in our receivables if our customers fail to pay, delay making payments, request financial concessions or if we experience delays in resolving claims and disputes (e.g., delays in court proceedings or settlement discussions); (7) limitations and higher costs associated with obtaining financing; (8) potential challenges with suppliers that could limit the availability or cost of materials; (9) potential interruptions to our information systems and technology or breaches in our data security due to increasing use of remote communications and access; and (10) the timing of finding effective treatments, a vaccine or a cure for COVID-19. Such events may result in fewer projects or delays in projects or bidding opportunities. Any of these events and others we have not yet identified could cause or contribute to the risks and uncertainties facing the Company and our customers and could materially adversely affect our business or portions thereof, and our financial condition, results of operations and/or stock price.

Item 4. Mine Safety Disclosures

Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires domestic mine operators to disclose violations and orders issued under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) by the federal Mine Safety and Health Administration. We do not act as the owner of any mines but we may act as a mining operator as defined under the Mine Act where we may be an independent contractor performing services or construction of such mine.

~~Information concerning~~For the quarter ended March 31, 2020, we do not have any mine safety violations or other regulatory matters ~~required by~~to disclose pursuant to Section 1503(a) of the Dodd-Frank Act ~~and~~or Item 104 of Regulation ~~S-K is included in Exhibit 95.~~S-K.

~~Table of Contents~~

Item 5. Other Information

None.

Item 6. Exhibits


Exhibits	Description
10.1	Employment ~~Agreement,~~Offer Letter, dated ~~September 6, 2017,~~July 19, 2019, by and between Tutor Perini Corporation and ~~Gary G. Smalley (incorporated by reference to Exhibit 10.1 to Form 8-K filed on September 8, 2017).~~Jean J. Abiassi.
31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95101.INS	~~Mine Safety Disclosure.~~XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
~~101.INS~~ 101.SCH	~~XBRL Instance Document.~~
~~101.SCH~~	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in Inline XBRL (included as Exhibit 101).

3134

Table of Contents

~~SIGNATURE~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Tutor Perini Corporation


Dated: ~~November 9, 2017~~May 6, 2020	By:By:	/s/Gary G. Smalley
	Gary G. Smalley
	Executive Vice President and Chief Financial Officer

3235


			Page Numbers
Part I.	Financial Information:
	Item 1.	Financial Statements:
		Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 (Unaudited)	3
		Condensed Consolidated Statements of Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 (Unaudited)	4
		Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 (Unaudited)	5
		Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 (Unaudited)	6
		Notes to Condensed Consolidated Financial Statements (Unaudited)	~~7-23~~ 7 - 25
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~24-30~~ 26 - 33
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30 33
	Item 4.	Controls and Procedures	30 33
Part II.	Other Information:
	Item 1.	Legal Proceedings	30 33
	Item 1A.	Risk Factors	30 33
	Item 4.	Mine Safety Disclosures	30 34
	Item 5.	Other Information	30 34
	Item 6.	Exhibits	31 34
	Signature		32 35



	Reportable Segments
					Specialty							Consolidated
(in thousands)	Civil			Building	Contractors		Total		Corporate			Total
Nine Months Ended September 30, 2017
Total revenue	$	1,363,850	$	1,520,356	$	907,690	$	3,791,896	$	—		$	3,791,896
Elimination of intersegment revenue		(190,873)		(36,883)		—		(227,756)		—			(227,756)
Revenue from external customers	$	1,172,977	$	1,483,473	$	907,690	$	3,564,140	$	—		$	3,564,140
Income from construction operations	$	128,176	$	25,035	$	15,330	$	168,541	$	(48,407)	(a)	$	120,134
Capital expenditures	$	8,665	$	184	$	374	$	9,223	$	489		$	9,712
Depreciation and amortization (b)	$	26,767	$	1,533	$	3,551	$	31,851	$	8,612		$	40,463

Nine Months Ended September 30, 2016
Total revenue	$	1,378,531	$	1,594,946	$	932,288	$	3,905,765	$	—		$	3,905,765
Elimination of intersegment revenue		(118,143)		(61,145)		—		(179,288)		—			(179,288)
Revenue from external customers	$	1,260,388	$	1,533,801	$	932,288	$	3,726,477	$	—		$	3,726,477
Income from construction operations	$	129,028	$	38,969	$	25,910	$	193,907	$	(44,037)	(a)	$	149,870
Capital expenditures	$	8,499	$	381	$	798	$	9,678	$	595		$	10,273
Depreciation and amortization (b)	$	33,200	$	1,647	$	3,811	$	38,658	$	8,637		$	47,295



					As of		As of
(in thousands)	September 30, 2017		December 31, 2016		March 31, 2020		December 31, 2019
Civil	$	2,273,486	$	2,152,123	$	2,877,417	$	2,791,402
Building		889,136		917,317		1,094,207		995,298
Specialty Contractors		757,103		813,851		659,629		635,180
Corporate and other (a)		363,060		155,329		55,153		63,897
Total assets	$	4,282,785	$	4,038,620	$	4,686,406	$	4,485,777



	As of September 30,		As of December 31,
(in thousands, except share and per share amounts)	2017		2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($79,111 and $0 related to variable interest entities ("VIEs"))	$	221,878	$	146,103
Restricted cash		17,424		50,504
Restricted investments		48,775		—
Accounts receivable ("AR") including retainage of $574,710 and $569,391 (AR of $36,317 and $0 related to VIEs)		1,857,870		1,743,300
Costs and estimated earnings in excess of billings		902,312		831,826
Other current assets		70,781		66,023
Total current assets		3,119,040		2,837,756
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $345,546 and $313,783		447,588		477,626
GOODWILL		585,006		585,006
INTANGIBLE ASSETS, NET		90,340		92,997
OTHER ASSETS		40,811		45,235
TOTAL ASSETS	$	4,282,785	$	4,038,620

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	30,951	$	85,890
Accounts payable ("AP") including retainage of $267,110 and $258,294 (AP of $4,826 and $0 related to VIEs)		949,675		994,016
Billings in excess of costs and estimated earnings ($91,750 and $0 related to VIEs)		403,635		331,112
Accrued expenses and other current liabilities		124,385		107,925
Total current liabilities		1,508,646		1,518,943
LONG-TERM DEBT, less current maturities, net of unamortized discounts and debt issuance costs totaling $54,699 and $56,072		855,325		673,629
DEFERRED INCOME TAXES		132,335		131,007
OTHER LONG-TERM LIABILITIES		155,553		162,018
TOTAL LIABILITIES		2,651,859		2,485,597

CONTINGENCIES AND COMMITMENTS (NOTE 7)

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		49,781		49,211
Additional paid-in capital		1,080,371		1,075,600
Retained earnings		541,069		473,625
Accumulated other comprehensive loss		(43,298)		(45,413)
Total Stockholders' Equity		1,627,923		1,553,023
Noncontrolling interests		3,003		—
TOTAL EQUITY		1,630,926		1,553,023

TOTAL LIABILITIES AND EQUITY	$	4,282,785	$	4,038,620



	As of September 30, 2017						As of December 31, 2016
(in thousands)	Outstanding Long-Term Debt		Unamortized Discounts and Issuance Costs		Long-Term Debt, as reported		Outstanding Long-Term Debt		Unamortized Discounts and Issuance Costs		Long-Term Debt, as reported
2017 Senior Notes	$	500,000	$	(7,455)	$	492,545	$	—	$	—	$	—
2017 Credit Facility		153,500		(6,558)		146,942		—		—		—
2010 Senior Notes		—		—		—		300,000		(1,880)		298,120
2014 Revolver		—		—		—		152,500		(4,510)		147,990
Term Loan		—		—		—		57,000		(2,350)		54,650
Convertible Notes		200,000		(40,686)		159,314		200,000		(47,332)		152,668



	Location in	Three Months Ended				Nine Months Ended
	Condensed Consolidated	September 30,				September 30,
(in thousands)	Statements of Operations	2017		2016		2017		2016
Defined benefit pension plan adjustments	Various accounts(a)	$	456	$	427	$	1,368	$	1,280
Income tax benefit	Provision for income taxes		(187)		(179)		(562)		(461)
Net of tax		$	269	$	248	$	806	$	819