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

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 in the United States (“GAAP”). Therefore, they should be read in conjunction with the audited consolidated financial statements and the related notes included in Tutor Perini Corporation’s (the “Company”) Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018. The results of operations for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 may not be indicative of the results that will be achieved for the full year ending December 31, ~~2018~~2019.

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~~June 30, 2018~~ March 31, 2019 and its consolidated statements of ~~income~~operations and cash flows for the interim periods presented. ~~All significant intercompany~~Intercompany balances and transactions ~~of consolidated subsidiaries~~ have been eliminated.

(2) Recent Accounting Pronouncements

New accounting pronouncements ~~implemented~~adopted by the Company during the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 are discussed below.

In ~~May 2014,~~August 2018, the ~~Financial Accounting Standards Board~~Securities and Exchange Commission (“~~FASB”~~SEC”) ~~issued Accounting Standards~~adopted the final rule under SEC Release No. 33-10532, “Disclosure Update ~~(“ASU”) 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606), as amended by subsequent ASUs (collectively, “ASC 606”). ASC 606 amends~~and Simplification,” adopting amendments to certain disclosure rules that were redundant, duplicative, overlapping, outdated, or superseded, in light of other SEC disclosure requirements, GAAP or changes in the ~~existing accounting standards~~information environment. The amendments expanded the disclosure requirements relating to the analysis of equity for ~~revenue recognition~~interim financial statements. Under the amendments, an analysis of the changes in each caption of stockholders’ equity and ~~establishes principles~~noncontrolling interests presented in the balance sheet must be provided in a note or separate statement. The analysis must present a reconciliation of the beginning balance to the ending balance of each period for ~~recognizing revenue upon the transfer~~which a statement of ~~promised goods or services to customers based on the expected consideration~~earnings is required to be ~~received in exchange for those goods or services.~~filed. The final rule was effective on November 5, 2018. The Company adopted ~~this ASU~~the final rule effective January 1, 2018 using the modified retrospective transition method. The Company recognized the cumulative effect of initially applying the new revenue standard to all contracts not yet completed or substantially completed as of January 1, 2018 as an immaterial reduction to beginning retained earnings. The impact of adoption on the Company’s opening balance sheet was primarily related to the deferral of costs incurred to fulfill certain contracts that were previously recorded in income in the period incurred, but under the new standard will be capitalized and amortized over the period of contract performance. The prior year comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods; however, certain balances have been reclassified to conform to the current year presentation.

~~The effect of the changes made to the Company’s consolidated January 1, 2018 balance sheet~~ for the ~~adoption~~first quarter of ~~ASC 606 were as follows:~~

Adjustments

BALANCE SHEET
Balance as of

due to

Balance as of
(in thousands)
December 31, 2017(a)

ASC 606

January 1, 2018
ASSETS

Accounts receivable(b)
$
1,801,656

$
(535,939)

$
1,265,717
Retainage receivable(b)

—

535,939

535,939
Other current assets

89,316

32,773

122,089

LIABILITIES

Accounts payable(b)

961,791

(261,820)

699,971
Retainage payable(b)

—

261,820

261,820
Billings in excess of costs and estimated earnings

456,869

39,785

496,654
Deferred income taxes

108,504

(1,537)

106,967

EQUITY

Retained earnings

622,007

(3,762)

618,245
Noncontrolling interests

(8,495)

(1,714)

(10,209)

~~(a)~~

~~Balances as previously reported on the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.~~

~~(b)~~

~~Prior to the adoption of ASC 606, retainage receivable and payable balances were included within accounts receivable and accounts payable, respectively.~~

~~Table of Contents~~

~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

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

~~UNAUDITED~~

In accordance with the new revenue standard requirements, the disclosure of the impacts of adoption on the Condensed Consolidated Statement of Income and Condensed Consolidated Balance Sheet were as follows:

Three Months Ended June 30, 2018

Balance Without

STATEMENT OF INCOME

Adoption of

Effect of
(in thousands)

As Reported

ASC 606

Change
REVENUE

$
1,120,085

$
1,126,925

$
(6,840)
COST OF OPERATIONS

(1,001,445)

(1,007,258)

5,813
GROSS PROFIT

118,640

119,667

(1,027)
General and administrative expenses

(63,825)

(63,825)

—
INCOME FROM CONSTRUCTION OPERATIONS

54,815

55,842

(1,027)
Other income, net

1,050

1,050

—
Interest expense

(15,998)

(15,998)

—
INCOME BEFORE INCOME TAXES

39,867

40,894

(1,027)
Provision for income taxes

(11,971)

(12,211)

240
NET INCOME

27,896

28,683

(787)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

3,013

3,213

(200)
NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION

$
24,883

$
25,470

$
(587)

Six Months Ended June 30, 2018

Balance Without

STATEMENT OF INCOME

Adoption of

Effect of
(in thousands)

As Reported

ASC 606

Change
REVENUE

$
2,148,241

$
2,157,193

$
(8,952)
COST OF OPERATIONS

(1,962,533)

(1,970,113)

7,580
GROSS PROFIT

185,708

187,080

(1,372)
General and administrative expenses

(131,818)

(131,818)

—
INCOME FROM CONSTRUCTION OPERATIONS

53,890

55,262

(1,372)
Other income, net

1,830

1,830

—
Interest expense

(31,063)

(31,063)

—
INCOME BEFORE INCOME TAXES

24,657

26,029

(1,372)
Provision for income taxes

(7,703)

(8,055)

352
NET INCOME

16,954

17,974

(1,020)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

4,195

4,355

(160)
NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION

$
12,759

$
13,619

$
(860)

~~Table of Contents~~

~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

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

~~UNAUDITED~~

As of June 30, 2018

Balance Without

BALANCE SHEET

Adoption of

Effect of
(in thousands)

As Reported

ASC 606

Change
ASSETS

Accounts receivable(a)

$
1,272,932

$
1,762,442

$
(489,510)
Retainage receivable(a)

490,751

—

490,751
Costs and estimated earnings in excess of billings

1,044,233

1,044,395

(162)
Other current assets

141,472

101,119

40,353

LIABILITIES

Accounts payable(a)

$
625,436

$
861,981

$
(236,545)
Retainage payable(a)

236,545

—

236,545
Billings in excess of costs and estimated earnings

574,392

524,576

49,816
Accrued expenses and other current liabilities

134,264

134,896

(632)
Deferred income taxes

106,284

107,540

(1,256)

EQUITY

Retained earnings

$
631,004

$
635,626

$
(4,622)
Noncontrolling interests

(17,618)

(15,744)

(1,874)

~~(a)~~

~~Prior to the adoption of ASC 606, retainage receivable and payable balances were included within accounts receivable and payable, respectively.~~

2019. The adoption of ~~ASC 606 had no impact on~~ the ~~cash flows used in operating activities in the Company’s Condensed Consolidated Statement of Cash Flows.~~

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash~~, which requires restricted cash to be included with cash and cash equivalent balances in the statement of cash flows. The Company retrospectively adopted this ASU effective January 1, 2018. The adoption of this ASU resulted in a decrease of net cash used in investing activities of $1.5 million for the six months ended June 30, 2017.

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting~~. This ASU clarifies the scope of modification accounting under Topic 718 with respect to changes to the terms or conditions of a share-based payments award. Under this new guidance, modification accounting would not apply if a change to an award does not affect the total current fair value, vesting conditions or the classification of the award. The Company adopted this ASU effective January 1, 2018. The adoption of this ASUfinal rule did not have ~~a material~~an impact on the Company’s consolidated financial ~~statements.~~

~~In March 2018, the FASB issued ASU 2018-05,~~position or results of operations. See Note 15, ~~Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118~~Changes in Equity~~. This ASU provides guidance for companies that may not have completed their accounting~~, for the income tax effects of the Tax Cut and Jobs Act of 2017 (the “Tax Act”) in the period of enactment. Staff Accounting Bulletin (“SAB”) No. 118 provides for a provisional one year measurement period to finalize the accounting for certain income tax effects related to the Tax Act and requires disclosure of the reasons for incomplete accounting. The Company applied the guidance provided in SAB No. 118 in 2017 and adopted this ASU effective January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.new required disclosures.

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

In February 2016, the ~~FASB~~Financial Accounting Standards Board issued ~~ASU~~Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), as amended and supplemented by subsequent ASUs (collectively, ~~“ASU 2016-02”~~“ASC 842”). ~~ASU 2016-02~~ASC 842 amends the existing guidance in Accounting Standards Codification (“ASC”) 840, Leases. This ASU requires, among other things, the recognition of lease right-of-use (“ROU”) assets and lease liabilities by lessees for those leases currently classified as operating leases. ~~ASU 2016-02 allows~~ASC 842 allowed companies to adopt the new standard by applying either ~~applying~~ a modified retrospective method to the beginning of the earliest period presented in the financial statements or an optional transition method to initially apply the standard on January 1, 2019 and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company ~~expects to adopt~~adopted the standard using the optional transition method. Under this method, financial results reported in periods prior to 2019 are unchanged. The Company elected the package of practical expedients which provides relief from having to reassess (1) whether any expired or existing contracts contain leases, (2) lease classification (as operating or financing) for any expired or existing leases, and (3) initial direct costs for any existing leases. The Company also elected to separate non-lease components from lease components. Based on the Company’s evaluation of ASC 842, the adoption on January 1, 2019 resulted in an increase of $43.3 million to its assets and liabilities on the Condensed Consolidated Balance Sheets with no impact to its results of operations or cash flows.

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

The effects of the changes made to the Company’s January 1, 2019 consolidated balance sheet for the adoption of ASC 842 were as follows:



BALANCE SHEET	Balance as of		Adjustments due to		Balance as of
(in thousands)	December 31, 2018(a)		ASC 842		January 1, 2019
ASSETS
Other assets(b)	$	50,523	$	43,273	$	93,796

LIABILITIES
Accrued expenses and other current liabilities(b)	$	174,325	$	11,569	$	185,894
Other long-term liabilities(b)		151,639		31,704		183,343

(a)

Balance as previously reported on the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

(b)

Prior to the adoption of ASC 842, operating lease ROU assets and current and long-term operating lease liabilities were not recorded on the Condensed Consolidated Balance Sheets.

In accordance with the new lease standard requirements, the impacts of adoption on the Condensed Consolidated Balance Sheet were as follows:



	As of March 31, 2019
			Balance Without
BALANCE SHEET			Adoption of		Effect of
(in thousands)	As Reported		ASC 842		Change
ASSETS
Other assets(a)	$	91,804	$	49,916	$	41,888

LIABILITIES
Accrued expenses and other current liabilities(a)	$	173,827	$	162,383	$	11,444
Other long-term liabilities(a)		184,999		154,555		30,444

(a)

Prior to the adoption of ASC 842, operating lease ROU assets and current and long-term operating lease liabilities were not recorded on the Condensed Consolidated Balance Sheets.

For the three months ended March 31, 2019, the new requirements of ASC 842 did not have an impact on the Company’s results of operations or cash flows.

(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, 2019 and 2018.



	Three Months Ended
	March 31,
(in thousands)	2019		2018
Civil segment revenue by end market:
Mass transit	$	146,250	$	150,126
Bridges		69,307		62,811
Highways		41,043		17,257
Tunneling		34,940		8,701
Other		41,954		24,219
Total Civil segment revenue	$	333,494	$	263,114

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED



	Three Months Ended
	March 31,
(in thousands)	2019		2018
Building segment revenue by end market:
Commercial and industrial facilities	$	109,353	$	173,747
Health care facilities		80,227		75,081
Municipal and government		61,962		50,452
Hospitality and gaming		47,957		81,765
Education facilities		42,528		32,482
Mixed use		36,627		41,777
Mass transit		29,177		—
Other		25,635		34,937
Total Building segment revenue	$	433,466	$	490,241



	Three Months Ended
	March 31,
(in thousands)	2019		2018
Specialty Contractors segment revenue by end market:
Mass transit	$	81,394	$	75,182
Commercial and industrial facilities		44,023		39,339
Health care facilities		11,652		16,365
Education facilities		11,580		25,304
Multi-unit residential		11,389		23,089
Mixed use		10,669		47,857
Transportation		6,435		33,985
Other		14,385		13,680
Total Specialty Contractors segment revenue	$	191,527	$	274,801



	Three Months Ended March 31, 2019
					Specialty
(in thousands)	Civil		Building		Contractors		Total
Revenue by customer type:
State and local agencies	$	257,107	$	144,686	$	97,071	$	498,864
Federal agencies		23,158		40,151		7,769		71,078
Private owners		53,229		248,629		86,687		388,545
Total revenue	$	333,494	$	433,466	$	191,527	$	958,487



	Three Months Ended March 31, 2018
					Specialty
(in thousands)	Civil		Building		Contractors		Total
Revenue by customer type:
State and local agencies	$	226,351	$	115,986	$	106,320	$	448,657
Federal agencies		9,855		44,311		18,723		72,889
Private owners		26,908		329,944		149,758		506,610
Total revenue	$	263,114	$	490,241	$	274,801	$	1,028,156

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements but expects the adoption to result in a material increase to its assets and liabilities. The Company does not expect this ASU to have a material impact on its consolidated statements of income or cash flows.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~ ~~(“ASU 2017-04”). This ASU simplifies the calculation of goodwill impairment by eliminating Step 2 of the impairment test prescribed by ASC 350,~~ ~~Intangibles—Goodwill and Other~~. Step 2 requires companies to calculate the implied fair value of their goodwill by estimating the fair value of their assets, other than goodwill, and liabilities, including unrecognized assets and liabilities, following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. The calculated net fair value of the assets would then be compared to the fair value of the reporting unit to determine the implied fair value of goodwill, and to the extent that the carrying value of goodwill was less than the implied fair value, a loss would be recognized. Under ASU 2017-04, however, goodwill is impaired when the calculated fair value of a reporting unit is less than its carrying value, and the impairment charge will equal that difference (i.e., impairment will be calculated at the reporting unit level and there will be no need to estimate the fair value of individual assets and liabilities). This guidance will be effective for any goodwill impairment tests performed in fiscal years beginning after December 15, 2019; however, early adoption is permitted for tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

~~In February 2018, the FASB issued ASU 2018-02,~~ ~~Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from the Accumulated Other Comprehensive Income.~~ This ASU gives entities the option to reclassify to retained earnings tax effects related to items in accumulated other comprehensive income that the FASB refers to as having been stranded in accumulated other comprehensive income as a result of the Tax Act. Entities can apply the provisions of this ASU either in the period of adoption or retrospectively. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. ~~The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.~~

~~(3)~~ ~~Revenue~~

~~Revenue Recognition~~

The Company derives revenue from long-term construction contracts with public and private customers primarily in the United States and its territories and in certain other international locations. The Company’s construction contracts are generally each accounted for as a single unit of account (i.e., as a single performance obligation).

Throughout the execution of construction contracts, the Company and its affiliated entities recognize revenue with the continuous transfer of control to the customer. The customer typically controls the asset under construction by either contractual termination clauses or by the Company’s rights to payment for work already performed on the asset under construction that does not have an alternative use for the Company.

Because control transfers over time, revenue is recognized to the extent of progress towards completion of the performance obligations. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services provided. The Company generally uses the cost-to-cost method for its contracts, which measures progress towards completion for each performance obligation based on the ratio of costs incurred to date to the total estimated costs at completion for the respective performance obligation. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Revenue, including estimated fees or profits, is recorded proportionately as costs are incurred. Cost of operations includes labor, materials, subcontractor costs, and other direct and indirect costs, including depreciation and amortization.

Due to the nature of the work required to be performed on many of the Company’s performance obligations, estimating total revenue and cost at completion is complex, subject to many variables and requires significant judgment. The estimates used during the contract performance period require judgment and making assumptions as to the occurrence of future events and the likelihood of variable consideration, including the impact of change orders, claims, contract disputes and the achievement of contractual performance criteria, and award or other incentive fees. The Company estimates variable consideration at the most likely amount it expects to receive. The Company includes estimated amounts in the transaction price 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. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an

~~Table of Contents~~

~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

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

~~UNAUDITED~~

~~assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to management.~~

~~Disaggregation of Revenue~~

The following tables disaggregate revenue by end market, customer type and contract type, which the Company believes best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.

Three Months

Six Months

Ended June 30,

Ended June 30,
(in thousands)

2018

2018
Civil segment revenue by end market:

Mass transit

$
158,096

$
308,222
Bridges

120,929

183,739
Highways

65,809

83,066
Tunneling

23,931

32,632
Other

33,708

57,928
Total Civil segment revenue

$
402,473

$
665,587



	Three Months Ended March 31, 2019
					Specialty
(in thousands)	Civil		Building		Contractors		Total
Revenue by contract type:
Fixed price	$	242,867	$	114,359	$	155,264	$	512,490
Guaranteed maximum price		2,233		207,131		3,606		212,970
Unit price		84,878		5,228		19,003		109,109
Cost plus fee and other		3,516		106,748		13,654		123,918
Total revenue	$	333,494	$	433,466	$	191,527	$	958,487

Three Months

Six Months

Ended June 30,

Ended June 30,
(in thousands)

2018

2018
Building segment revenue by end market:

Health care facilities

$
118,116

$
193,197
Office

39,237

186,559
Hospitality and gaming

79,490

161,255
Municipal and government

70,528

120,981
Mixed use

38,814

80,590
Education facilities

32,876

65,358
Industrial and commercial

20,081

46,507
Other

47,837

82,773
Total Building segment revenue

$
446,979

$
937,220



	Three Months Ended March 31, 2018
					Specialty
(in thousands)	Civil		Building		Contractors		Total
Revenue by contract type:
Fixed price	$	183,904	$	79,001	$	247,424	$	510,329
Guaranteed maximum price		5,072		262,028		15,579		282,679
Unit price		68,754		8,816		6,658		84,228
Cost plus fee and other		5,384		140,396		5,140		150,920
Total revenue	$	263,114	$	490,241	$	274,801	$	1,028,156

Three Months

Six Months

Ended June 30,

Ended June 30,
(in thousands)

2018

2018
Specialty Contractors segment revenue by end market:

Mass transit

$
78,169

$
153,351
Mixed use

51,976

99,833
Industrial and commercial

36,540

75,878
Transportation

22,019

56,004
Education facilities

26,298

51,602
Condominiums

22,761

45,850
Health care facilities

14,623

30,988
Other

18,247

31,928
Total Specialty Contractors segment revenue

$
270,633

$
545,434

~~Table of Contents~~

~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

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

~~UNAUDITED~~

Three Months Ended June 30, 2018

Specialty

(in thousands)

Civil

Building

Contractors

Total
Revenue by customer type:

State and local agencies

$
327,195

$
159,556

$
106,308

$
593,059
Federal agencies

30,772

52,263

14,988

98,023
Private owners

44,506

235,160

149,337

429,003
Total revenue

$
402,473

$
446,979

$
270,633

$
1,120,085

Six Months Ended June 30, 2018

Specialty

(in thousands)

Civil

Building

Contractors

Total
Revenue by customer type:

State and local agencies

$
553,546

$
275,541

$
212,628

$
1,041,715
Federal agencies

40,627

96,574

33,712

170,913
Private owners

71,414

565,105

299,094

935,613
Total revenue

$
665,587

$
937,220

$
545,434

$
2,148,241

~~State and local agencies~~. The Company’s state and local government customers include state transportation departments, metropolitan authorities, cities, municipal agencies, school districts and public universities. Services provided to state and local customers are primarily pursuant to contracts awarded through competitive bidding processes. Construction services for state and local government customers have included mass-transit systems, bridges, highways, judicial and correctional facilities, schools and dormitories, health care facilities, convention centers, parking structures and other municipal buildings. The vast majority of the Company’s civil contracting and building construction services are provided in locations throughout the United States and its territories.

~~Federal agencies~~. The Company’s federal government customers include the U.S. State Department, the U.S. Navy, the U.S. Army Corps of Engineers, the U.S. Air Force and the National Park Service. Services provided to federal agencies are typically pursuant to competitively bid contracts for specific or multi-year assignments that involve new construction or infrastructure repairs or improvements. A portion of revenue from federal agencies is derived from projects in overseas locations.

~~Private owners~~. The Company’s private customers include real estate developers, health care companies, technology companies, hospitality and gaming resort owners, Native American sovereign nations, public corporations and private universities. Services are provided to private customers through negotiated contract arrangements, as well as through competitive bids.

~~Most federal, state and local government contracts contain provisions that permit the termination of contracts, in whole or in part, for the convenience of the government, among other reasons.~~

Three Months Ended June 30, 2018

Specialty

(in thousands)

Civil

Building

Contractors

Total
Revenue by contract type:

Fixed price

$
259,927

$
96,657

$
234,495

$
591,079
Guaranteed maximum price

3,103

270,440

17,462

291,005
Unit price

121,447

10,771

7,233

139,451
Cost plus fee and other

17,996

69,111

11,443

98,550
Total revenue

$
402,473

$
446,979

$
270,633

$
1,120,085

~~Table of Contents~~

~~TUTOR PERINI CORPORATION AND SUBSIDIARIES~~

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

~~UNAUDITED~~

Six Months Ended June 30, 2018

Specialty

(in thousands)

Civil

Building

Contractors

Total
Revenue by contract type:

Fixed price

$
443,830

$
175,658

$
481,919

$
1,101,407
Guaranteed maximum price

8,175

532,468

33,042

573,685
Unit price

190,201

19,588

13,890

223,679
Cost plus fee and other

23,381

209,506

16,583

249,470
Total revenue

$
665,587

$
937,220

$
545,434

$
2,148,241

~~Fixed price~~. Fixed price or lump sum contracts are most commonly used for projects in the Civil and Specialty Contractors segments and generally commit the Company to provide all of the resources required to complete a project for a fixed sum. Usually, fixed price contracts transfer more risk to the Company, but offer the opportunity for greater profits. Billings on fixed price contracts are typically based on estimated progress against predetermined contractual milestones.

~~Guaranteed maximum price (“GMP”).~~ GMP contracts provide for a cost plus fee arrangement up to a maximum agreed upon price. These contracts place risks on the Company for amounts in excess of the GMP, but may permit an opportunity for greater profits than under cost plus fee contracts through sharing agreements with the owner on any cost savings that may be realized. Services provided by our Building segment to various private customers are often performed under GMP contracts. Billings on GMP contracts typically occur on a monthly basis and are based on actual costs incurred plus a negotiated margin.

~~Unit price.~~ Unit price contracts are most prevalent for projects in the Civil and Specialty Contractors segments and generally commit the Company to provide an estimated or undetermined number of units or components that comprise a project at a fixed price per unit. This approach shifts the risk of estimating the quantity of units required to the project owner, but the risk of increased cost per unit is borne by the Company, unless otherwise allowed for in the contract. Billings on unit price contracts typically occur on a monthly basis and are based on actual quantity of work performed or completed during the billing period.

~~Cost plus fee.~~ Cost plus fee contracts are used for many projects in the Building and Specialty Contractors segments. Cost plus fee contracts include cost plus fixed fee contracts and cost plus award fee contracts. Cost plus fixed fee contracts provide for reimbursement of approved project costs plus a fixed fee. Cost plus award fee contracts provide for reimbursement of the project costs plus a base fee, as well as an incentive fee based on cost and/or schedule performance. Cost plus fee contracts serve to minimize the Company’s financial risk, but may also limit profits. Billings on cost plus fee contracts typically occur on a monthly basis based on actual costs incurred plus a negotiated margin.

Changes in Contract Estimates that Impact Revenue

Changes to the total estimated contract revenue or cost, either due to unexpected events or revisions to management’s initial estimates, for a given project are recognized in the period in which they are determined. Net revenue recognized during the three ~~and six months~~month periods ended ~~June 30,~~March 31, 2019 and 2018 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 ~~excludes~~exclude unexercised contract options. As of ~~June 30,~~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. As of March 31, 2018, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts ~~are $4.3~~were $4.5 billion, ~~$2.0~~$2.2 billion and ~~$1.6~~$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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Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

~~(4)~~ ~~Contract Assets and Liabilities~~

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 ~~consist~~consisted of the following:



	As of June 30,		As of January 1,		As of March 31,		As of December 31,
(in thousands)	2018		2018		2019		2018
Retainage receivable	$	490,751	$	535,939	$	490,132	$	478,744
Costs and estimated earnings in excess of billings:
Claims		646,262		549,849		740,844		698,274
Unapproved change orders		334,777		296,591		362,273		354,000
Other unbilled costs and profits		63,194		86,318		65,558		90,021
Total costs and estimated earnings in excess of billings		1,044,233		932,758		1,168,675		1,142,295
Capitalized contract costs		41,434		32,773		41,973		37,404
Total contract assets	$	1,576,418	$	1,501,470	$	1,700,780	$	1,658,443

Retainage ~~receivables represent~~receivable represents amounts invoiced to customers where payments have been partially withheld pending the completion of certain milestones, satisfaction of other contractual conditions or ~~upon~~ 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 towards 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 9,10, Commitments and Contingencies, 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 associatedcontract over the period of anticipated use on the project.During the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018, $5.7 million and $4.1 million, ~~and $8.2 million~~respectively, of previously capitalized contract costs were amortized and recognized as expense on the related ~~contracts, respectively.~~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 ~~consist~~consisted of the following:

Retainage ~~payables represent~~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 ~~payables are~~payable is not remitted to subcontractors until the associated retainage ~~receivables~~receivable from customers ~~are~~is collected.

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 ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018 and included in the opening billings in excess of costs and estimated earnings balances for each period totaled ~~$262.3~~$301.0 million and ~~$303.4~~$222.9 million, respectively.

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:

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.

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 8, Financial Commitments. In accordance with ASC 260, Earnings Per Share (“ASC 260”), the settlement of the principal amount of the Convertible Notes has no impact on diluted EPS because the Company has the intent and ability to settle the principal amount in cash.The Company calculates the effect of ~~these~~the potentially dilutive ~~securities using the treasury stock method for~~ restricted stock units and stock ~~options.~~options using the treasury stock method.

~~With regard to~~All restricted stock units and stock options that were outstanding during the three months ended March 31, 2019 and 2018 were excluded from weighted-average diluted ~~EPS and~~shares outstanding for the ~~impact of~~periods, as the ~~Convertible Notes~~shares would have an anti-dilutive effect on the ~~diluted EPS calculation, because~~net losses. Since the Company has the intent and ability to settle the principal amount of the Convertible Notes in cash, per ASC 260, ~~Earnings Per Share,~~the settlement of the principal amount ~~has no impact on~~was excluded from the calculation of diluted EPS.

The Company’s effective income tax rate was 31.7% for the three ~~and six~~ months ended ~~June 30, 2018 was 30.0%~~March 31, 2019 and ~~31.2%, respectively, compared to 37.9% and 37.6%~~28.1% for the three ~~and six~~ months ended ~~June 30, 2017, respectively.~~March 31, 2018. The effective tax rate for the 2019 period was impacted by immaterial unfavorable nonrecurring items recognized during the period. In addition, the effective tax rates for ~~the 2018~~both periods primarily reflect ~~the reduction in the federal statutory~~increases due to state income ~~tax rate from 35%~~taxes and decreases due to ~~21% effective January 1, 2018 as a result~~impacts of ~~the Tax Act and were favorably impacted by~~ earnings attributable to noncontrolling interests for which income taxes are not the responsibility of the Company, partially offset by non-deductible expenses and a change in the New York State tax law related to the treatment of foreign income under the Tax Act. The effective tax rates for the three and six months ended June 30, 2017 were favorably impacted by earnings attributable to noncontrolling interests, while the effective rate for the six-month period was also favorably impacted by reductions in estimated non-deductible expenses and tax benefits associated with share-based compensation. For the three and six months ended June 30, 2018 and 2017, the effective tax rates were higher than the federal statutory rates primarily due to state income taxes.Company.

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

The following table reconciles the outstanding debt balance to the reported debt balances as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017:~~2018:

The unamortized issuance costs related to the 2017 Credit Facility were ~~$5.5~~$4.4 million and ~~$6.2~~$4.8 million as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively, and are included in other assets in the Condensed Consolidated Balance Sheets.

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 the 2017 Senior Notes at a redemption price equal to 100% of their principal amount plus a “make-whole” premium described in the indenture. In addition, prior to May 1, 2020, the Company may redeem up to 40% of the original aggregate principal amount of the notes at a redemption price of 106.875% of their principal amount with the proceeds

received by the Company from any offering of the Company’s equity. After May 1, 2020, 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.

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.

On April 20, 2017, the Company entered into a credit agreement (the “2017 Credit Facility”) with SunTrust Bank as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 2017 Credit Facility provides for a $350 million revolving credit facility (the “2017 Revolver”) and a sublimit for the issuance of letters of credit and swingline loans up to the aggregate amount of $150 million and $10 million, respectively, both maturing on April 20, 2022, unless any of the Convertible Notes, as defined below, are outstanding on December 17, 2020, in which case all such borrowings will mature on December 17, 2020 (subject to certain further exceptions). In addition, the 2017 Credit Facility permits additional borrowings in an aggregate amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans.

Borrowings under the 2017 Revolver bear interest, at the Company’s option, at a rate equal to ~~a margin over~~ (a) the London Interbank Offered Rate (“LIBOR”) plus a margin of between 1.50% and 3.00% or (b) a base rate (determined by reference to the highest of (i) the administrative agent’s prime lending rate, (ii) the federal funds effective rate plus 50 basis points, (iii) the LIBOR rate for a one-month interest period plus 100 basis points and (iv) 0%), plus a margin of between 0.50% and 2.00%, in each case based on the Consolidated Leverage Ratio (as defined in the 2017 Credit Facility). In addition to paying interest on outstanding principal under the 2017 Credit Facility, the Company will pay a commitment fee to the lenders under the 2017 Revolver in respect of the unutilized commitments thereunder. The Company will 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 ~~4.55%~~5.28% during the ~~six~~three months ended ~~June 30, 2018.~~March 31, 2019.

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 ~~June 30, 2018,~~March 31, 2019, there was ~~$258~~$169 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 ~~June 30, 2018.~~

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

On April 20, 2017, the Company used proceeds from the 2017 Senior Notes and 2017 Revolver to repurchase or redeem its 2010 Senior Notes ($300 million of 7.625% Senior Notes due November 1, 2018), to pay off its 2014 Credit Facility ($300 million revolving credit facility and a $250 million term loan, both maturing on May 1, 2018), and to pay accrued but unpaid interest and fees. In addition, the indenture governing the 2010 Senior Notes was satisfied and discharged, and the Company terminated the 2014 Credit Facility.March 31, 2019.

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 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.

Prior to January 15, 2021, the Convertible Notes will be convertible only under the following circumstances: (1) during the five business day period after any ten consecutive trading day period in which the trading price per $1,000 principal amount of Convertible

Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (2) if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion rate of 33.0579 (or $39.32) on each applicable trading day; or (3) upon the occurrence of specified corporate events. On or after January 15, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

The Convertible Notes will be convertible at an initial conversion rate of 33.0579 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $30.25. The conversion rate will be subject to adjustment for some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, the Company is required to increase, in certain circumstances, the conversion rate for a holder who elects to convert their Convertible Notes in connection with such a corporate event including customary conversion rate adjustments in connection with a “make-whole fundamental change” described in the indenture. Upon conversion, and at the Company’s election, the Company may satisfy its conversion obligation ~~by paying or delivering, as applicable,~~with cash, shares of its common stock or a combination ~~of cash and shares of its common stock.~~thereof. As of ~~June 30, 2018,~~March 31, 2019, the conversion provisions of the Convertible Notes have not been triggered.

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

The Company leases certain office space, construction and office equipment, vehicles and temporary housing generally under non-cancelable operating leases. Leases with an initial term of one year or less are not recorded on the 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, 2019, 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.

The Company determines if an arrangement is a lease at inception. Operating lease ROU assets are included in other assets, while current and long-term operating lease liabilities are included in accrued expenses and other current liabilities, and other long-term liabilities, respectively, on the Condensed Consolidated Balance Sheet as of March 31, 2019. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The present value of future lease payments are discounted using either the implicit rate in the lease, if known, or the Company’s incremental borrowing rate for the specific lease as of the lease commencement date. The ROU asset is also adjusted for any prepayments made or incentives received. The lease terms include options to extend or terminate the lease only to the extent it is reasonably certain any of those options will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company accounts for lease components (e.g., fixed payments) separate from the non-lease components (e.g., common-area maintenance costs).The Company does not have any material financing leases.

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

The following table presents supplemental balance sheet information related to operating leases as of March 31, 2019:

The following table presents supplemental cash flow information and non-cash activity related to operating leases for the three months ended March 31, 2019:

The following table presents maturities of operating lease liabilities on an undiscounted basis as of March 31, 2019:

As of December 31, 2018, future minimum lease payments under long-term non-cancelable operating leases as classified under ASC 840 were as follows:

The Company and certain of its subsidiaries are involved in litigation and ~~various~~other legal proceedings and forms of dispute resolution ~~and are contingently liable for commitments and performance guarantees arising~~ in the ordinary course of ~~business. In addition, other activities inherent~~business, including but not limited to ~~the Company’s business may result in litigation~~ disputes over contract payment and/or ~~dispute resolution proceedings when there is a disagreement~~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.~~change) and other matters incidental to the Company’s business. In accordance with ASC 606, the Company makes assessments of these types of ~~disputes~~matters on a routine basis and, to the extent permitted by ASC 606, estimates and records recovery related to these ~~disputes~~matters as a form of variable consideration at the most likely amount itthe Company expects to receive, as discussed further in Note 3, ~~Revenue, and Note~~ 4, Contract Assets and Liabilities. In addition, the Company is contingently liable for litigation, performance guarantees and other commitments arising in the ordinary course of business, which are accounted for in accordance with ASC 450, Contingencies. Management reviews these matters regularly and updates or revises its estimates from time to time as warranted by subsequent information and developments. These assessments require judgments concerning matters that are inherently uncertain, such as litigation developments and outcomes, the anticipated outcome of negotiations and the estimated cost of resolving disputes. Consequently, these assessments are estimates, and actual amounts may vary from such ~~disputes.~~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. Management believes that, based on current information and discussions with the Company’s legal counsel, the ultimate resolution of these matters is not expected to have a material ~~adverse~~ effect on the Company’s consolidated financial ~~position, results of operations or cash flows.~~position.

Several matters are in the litigation and dispute resolution processes that include characteristics which management consider to be other than ordinary routine contract performance related issues. The following discussion provides a background and current status of such material matters.

The Company reconstructed the Long Island Expressway/Cross Island Parkway Interchange (“LIE Project”) for the New York State Department of Transportation (“NYSDOT”). The $130 million project was substantially completed in January 2004 and was accepted by 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 and other interferences for which the Company believes NYSDOT is responsible.

In March 2011, the Company opened a case with the New York State Court of Claims against NYSDOT related to the LIE Project. In May 2011, 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 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. In March 2012, the Company filed its formal Verified Claim seeking $50.7 million in damages. In May 2012, NYSDOT served its answer and asserted counterclaims in the amount of $151 million alleging fraud in the inducement and punitive damages related to alleged violations of the disadvantaged business enterprise (“DBE”) requirements for the project. The Court subsequently ruled that NYSDOT’s counterclaims may only be asserted 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 NYSDOT’s affirmative counterclaims. OnIn June ~~11,~~ 2018, following additional summary judgment motions, the Court granted the Company’s motion to dismiss NYSDOT’s affirmative defenses, which eliminated the use of NYSDOT’s ~~counterclaim~~counterclaims of $151 million as a defense to the claims of the Company. In October 2018, NYSDOT ~~is likely to~~filed a notice of appeal. A trial date for the appeal ~~this dismissal; however, an appeal does~~has not ~~stay the proceedings from continuing. Discovery was completed during 2017, and the Company is currently awaiting an assignment to a trial judge and the setting of a trial date.~~been set.

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. As of March 31, 2019, the Company has also concluded that the potential for a material adverse financial impact due to NYSDOT’s counterclaims is remote.

Desert Mechanical, Inc. (“DMI”) and Fisk Electric Company (“Fisk”), wholly owned subsidiaries of the Company, were subcontractors on the Fontainebleau ~~Project~~project located in Las Vegas, ~~(“Fontainebleau”),~~Nevada, a hotel/casino complex with approximately 3,800 ~~rooms.~~rooms (the “Project”). In June 2009, ~~Fontainebleau~~the owners of the Project filed for bankruptcy protection, under Chapter 11 of the U.S. Bankruptcy Code, in the Southern District of Florida.

DMI and Fisk ~~filed~~recorded mechanic’s liens ~~in Nevada for~~against the Project totaling approximately $44 million, ~~representing unreimbursed costs~~for unpaid labor, materials and equipment it furnished to ~~date and lost profits, including anticipated profits.~~the Project. Other unaffiliated contractors, subcontractors ~~have~~and suppliers also ~~filed liens.~~recorded mechanic’s liens against the Project, subjecting the property to approximately $550 million in total lien claims by the various lien claimants who furnished labor, materials and equipment to the Project (the “Statutory Lienholders”). In June 2009, DMI filed suit against Turnberry West Construction, Inc., the general contractor, in the ~~8th~~Eighth 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~~Property to Icahn Nevada Gaming Acquisition, LLC ~~and this transaction closed~~for approximately $150 million. Certain Project lenders (the “Lenders”) who had recorded deeds of trust as security interests 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~~the property which far exceeded the 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~~proceeds, filed suit against the ~~mechanic’s lien claimants,~~Statutory Lienholders, including DMI and Fisk, alleging that ~~certain mechanic’s liens are invalid and that~~ all mechanic’s liens ~~are~~were subordinate to the ~~lender’s claims~~Lenders’ deeds of trust against the property. The Nevada Supreme Court ruled in October 2012 ~~in an advisory opinion at~~that under Nevada Law, the ~~request~~mechanic’s lien claims had priority over a portion of the ~~Bankruptcy Court that lien priorities would be determined in favor~~deeds of ~~the mechanic lien holders under Nevada law.~~trust, but not all of them.

In October 2013, a comprehensive settlement agreement was reached by and among the Statutory Lienholders and the ~~other interested parties.~~Lenders to divide the Sale Proceeds such that the Statutory Lienholders would receive approximately $85 million of the sale proceeds (the “Net Statutory Lienholder Proceeds”) and the Lenders would receive the balance. The Bankruptcy Court appointed a mediator to facilitate a settlement between the ~~execution of that settlement agreement,~~Statutory Lienholders as to how the Net Statutory Lienholder Proceeds would be distributed, but after engaging in numerous mediation sessions spanning several years, the parties were unable to ~~settle. During the third quarter of 2017,~~reach a resolution. DMI filed a motion seeking permission from the Bankruptcy Court to file an action in Nevada to enforce its lien rights against the ~~Company’s lien rights;~~Net Statutory Lienholder Proceeds, and the motion was ~~granted by~~granted. Pursuant to that order, litigation involving all Statutory Lienholders was commenced at the end of November 2017 (the “Nevada Action”).

On April 25, 2019, DMI and Fisk agreed to a settlement in the Nevada Action with another Statutory Lienholder, who has guaranteed payment on account of their claims. The settlement amount will be paid when the Bankruptcy ~~Court.~~

~~Management has made an estimate of~~Court distributes the ~~total anticipated recovery~~Net Statutory Lienholder Proceeds to the Statutory Lienholders, which is expected to occur later in 2019. The settlement had no material impact 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.~~

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 of which the Company collected more than $16 million in 2017. In December 2017 and in January 2018, the Court issued several post-appeal orders confirming its previous rulings. Some of those matters are subject to a current further appeal. Once resolved, TSC will seek an order from the Court seeking a remaining $4 million in interest and fees associated with the matter.

~~The Company does not expect the ultimate resolution of this matter to have a 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.

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.

As of ~~June 30, 2018,~~March 31, 2019, 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.

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 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 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 differing site condition. WSDOT has not accepted 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~~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~~expected to be heard in the second half of 2019. STP submitted damages to the Insurers in the King County lawsuit in the amount of $532 million. STP is ~~ongoing.~~also seeking these damages from WSDOT and Hitachi 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 breach of contract alleging STP’s delays and failure to perform, seeking $57.2 million in damages and seeking declaratory relief concerning contract interpretation. STP filed its answer to WSDOT’s complaint and filed a counterclaim against WSDOT and ~~Hitachi.~~Hitachi seeking damages of $667 million. Trial is ~~set~~scheduled for ~~April~~October 2019.

As of ~~June 30, 2018,~~March 31, 2019, 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 is neither probable nor remote, and the potential loss or range of loss is not reasonably estimable. With respect to STP’s claims against the Insurers, WSDOT and Hitachi, management has included an estimate of the total anticipated recovery, concluded to be both probable and reliably estimable, in receivables or costs and estimated earnings in excess of billings recorded to date. To the extent new facts become known or the final recoveries vary from the estimate, the impact of the change will be reflected in the financial statements at that time.

During the second quarter of 2018, the Company adopted the Tutor Perini Corporation Omnibus Incentive Plan (the “Plan”), which effected the merger of the Company’s previous incentive compensation plans. Similar to its previous plans, the Plan provides for various types of share-based grants, including restricted and unrestricted stock units and stock options. As of ~~June 30, 2018,~~March 31, 2019, there were ~~684,598~~901,834 shares of common stock available for grant under the ~~Company’s~~Tutor Perini Corporation Omnibus Incentive Plan. During the first ~~six~~three months of ~~2018~~2019 and ~~2017,~~2018, the Company issued the following share-based instruments: (1) restricted stock units ~~of 614,000~~totaling 175,000 and ~~665,000~~514,000 with weighted-average fair values per share of ~~$25.19~~$20.41 and ~~$30.48,~~$26.49, respectively; (2) stock options ~~of 579,000~~totaling 85,000 and ~~265,000~~479,000 with weighted-average fair values per share of ~~$11.45~~$7.57 and ~~$13.70,~~$11.82, respectively, and weighted-average per share exercise prices of ~~$23.73~~$25.62 and ~~$23.47,~~$24.53, respectively. ~~In addition, during the six months ended June 30, 2018 and 2017, the~~The Company issued ~~115,420 and 99,155~~10,000 unrestricted stock units with a weighted-average fair value per share of ~~$21.26 and $26.26, respectively.~~$25.40 during the three months ended March 31, 2018; no unrestricted stock units were issued in the first quarter of 2019.

The fair value of restricted and unrestricted stock units is based on the closing price of the Company’s common stock on the New York Stock Exchange on the date of the grant and the fair value of stock options is based on the Black-Scholes model. The fair value of ~~certain performance-based awards are estimated taking into account the features of such awards. The fair value of~~ stock options granted during the first ~~six~~three months of ~~2018~~2019 was determined using the Black-Scholes model based on the following weighted-average assumptions: (i) expected life of ~~5.1~~5.4 years, (ii) expected volatility of ~~42.31%~~36.63%, (iii) risk-free rate of ~~2.57%~~2.66%, and (iv) no quarterly dividends. For certain performance-based awards containing market condition components, the fair value on the grant date is determined using a Monte Carlo simulation model.

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018, the Company recognized, as part of general and administrative expenses, costs for share-based payment arrangements totaling ~~$6.0~~$5.5 million ~~and $12.1 million, respectively,~~ and $6.1 million, ~~and $10.4~~respectively. As of March 31, 2019, the balance of unamortized share-based compensation expense was $26.7 million, ~~for the~~which is expected to be recognized over a weighted-average period of 2.0 years.

three and six months ended June 30, 2017, respectively. As of June 30, 2018, the balance of unamortized share-based compensation expense was $36.4 million, which will be recognized over a weighted-average period of 2.2 years.

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 six~~ months ended ~~June 30, 2018~~March 31, 2019 and ~~2017:~~2018:

The Company contributed ~~$1.4~~$0.7 million and $0.8 million to its defined benefit pension plan during ~~each of~~ the ~~six-month~~three-month periods ended ~~June 30,~~March 31, 2019 and 2018, ~~and 2017,~~respectively, and expects to contribute an additional ~~$1.3~~$3.9 million by the end of ~~2018.~~2019.

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:

The following fair value hierarchy table presents the Company’s assets that are measured at fair value on a recurring basis as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017:~~2018:

~~The Company did not have material transfers between Levels 1 and 2 during the six months ended June 30, 2018 or 2017.~~

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. Of the Company’s long-term debt, the fair value of the 2017 Senior Notes was ~~$500.7~~$501.5 million and ~~$537.5~~$466.8 million as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively. The fair value of the Convertible Notes was ~~$202.2~~$191.9 million and ~~$222.2~~$184.4 million as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively. The fair values of the 2017 Senior Notes and Convertible Notes were determined using Level 1 inputs, specifically current observable market prices. The reported value of the Company’s remaining borrowings approximates fair value as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017 approximates fair value.~~2018.

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~~Company reassesses its initial determination of whether the joint venture is a VIE.

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 ~~June 30, 2018,~~March 31, 2019, the Company had unconsolidated VIE-related current assets and liabilities of ~~$2.9~~$0.8 million and ~~$2.8~~$0.5 million, respectively, included in the Company’s Condensed Consolidated Balance Sheet. As of December 31, ~~2017,~~2018, the Company had unconsolidated VIE-related current assets and liabilities of ~~$0.8~~$4.0 million and ~~$0.8~~$3.8 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 ~~June 30, 2018.~~March 31, 2019.

As of ~~June 30,~~March 31, 2019, the Company’s Condensed Consolidated Balance Sheet included current and noncurrent assets of $172.6 million and $53.6 million, respectively, as well as current liabilities of $314.3 million related to the operations of its consolidated VIEs. As of December 31, 2018, the Company’s Condensed Consolidated Balance Sheet included current and noncurrent assets of ~~$170.5~~$173.9 million and ~~$41.1~~$51.5 million, respectively, as well as current liabilities of $288.3 million, related to the operations of its consolidated VIEs. As of December 31, 2017, the Company’s Condensed Consolidated Balance Sheet included current and noncurrent assets of $95.5 million and $11.6 million, respectively, as well as current liabilities of $140.7$319.9 million related to the operations of its consolidated VIEs.

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

~~One large~~The Company established a joint venture ~~that the Company is consolidating was established~~ to construct the Purple Line ~~Segment~~Section 2 Extension project, a $1.4 billion mass-transit project in Los Angeles, California. 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.

The Company also established a joint venture with Parsons Corporation (“Parsons”) to construct the Newark Liberty International Airport Terminal One ~~Design-Build~~ 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.

A reconciliation of the changes in equity for the three months ended March 31, 2019 and 2018 is provided below:

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 as components of accumulated other comprehensive income (loss) (“AOCI”).

The tax effects of the components of other comprehensive income (loss) for the three months ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017 are~~were as follows:

~~The tax effects of the components of other comprehensive income (loss) for the six months ended June 30, 2018 and 2017 are as follows:~~

The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation during the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018 ~~are~~were as follows:

~~The changes in AOCI balance by component (after tax) for the three and six months ended June 30, 2017 are as follows:~~

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, the Company’s business is conducted through three segments: Civil, Building and Specialty Contractors. These segments are determined based on how the Company’s Chairman and Chief Executive Officer (chief operating decision maker) aggregates business units when evaluating performance and allocating resources.

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.

The following tables set forth certain reportable segment information relating to the Company’s operations for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 and ~~2017:~~2018:

During the six months ended June 30, 2018, the Company recorded a charge of $17.8 million in income from construction operations (an after-tax impact of $12.7 million, or $0.25 per diluted share), which was primarily non-cash, as a result of the unexpected outcome of an arbitration decision related to a subcontract back charge dispute on a Civil segment project in New York that was completed in 2013.

A reconciliation of segment results to the consolidated income (loss) before income taxes is as follows:

Raymond R. Oneglia, Vice Chairman of O&G Industries, Inc. (“O&G”), is a director of the Company. The Company occasionally forms construction project joint ventures with O&G. Currently, the Company has a 75% interest in a joint venture with O&G (as the 25% interest holder) for a project in Los Angeles, California. O&G may provide equipment and services to these joint ventures on customary trade terms; there were no material payments made by the joint venture to O&G during the three and six months ended June 30, 2018 and 2017.

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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 ~~June 30, 2018~~March 31, 2019 and the results of our operations for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 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 1, 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, ~~2017.~~2018, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018 and in our Quarterly Reports.

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:

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 ~~profits;~~profit;

Unfavorable outcomes of existing or future litigation or dispute resolution proceedings against project owners, 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;

A significant slowdown or decline in economic conditions;

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

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

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;

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

Failure to meet our obligations under our debt agreements;

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;

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

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

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

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

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

The impact of inclement weather conditions on projects;

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

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

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; and

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.~~losses.

Table of Contents

Executive Overview

Consolidated revenue for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 was ~~$1.1 billion and $2.1 billion~~$958.5 million compared to ~~$1.2~~$1.0 billion ~~and $2.4 billion, respectively,~~ for the same ~~periods~~period in ~~2017.~~2018. The decrease ~~for both periods~~ was ~~principally~~primarily driven by reduced project execution activities on certain Building segment projects in California, including a large technology project that completed in 2018, and ~~Florida that are completed and a net reduction in project execution activities~~ on ~~various Civil segment mass-transit~~certain electrical projects in California, New York and ~~California. Revenue for both 2018 periods was~~Washington within the Specialty Contractors segment that are complete or nearing completion. Adverse weather that impacted certain projects primarily in California and the Midwest also ~~lower due~~contributed to the ~~timing of project execution~~revenue decrease. The decrease was partially offset by increased activities ~~for~~on certain newer Civil segment projects and ~~continuing delays on~~ a ~~large mass-transit~~Building segment technology project in ~~California.~~California that are ramping up.

~~Table of Contents~~

Income from construction operations for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 was ~~$54.8~~$22.9 million ~~and $53.9 million, respectively,~~ compared to ~~$34.0 million and $71.1~~a loss of $0.9 million for the same ~~periods~~period in ~~2017. For the three months ended June 30, 2018, the~~2018. The increase was ~~primarily because~~principally due to the ~~prior-year period included unfavorable adjustments in the Specialty Contractors segment, none~~absence of which were individually material. In comparing the six-month periods, the unfavorable adjustments in the prior year were approximately offset by reduced project contributions associated with the lower volume discussed above on certain Civil and Building segment projects. The six-month period of 2018 also included a prior-year pre-tax charge ~~in the first quarter of 2018~~ totaling $17.8 million, which was attributable to the unexpected outcome of an arbitration decision on a completed Civil segment project in New York.

~~The~~Income tax expense was $2.2 million reflecting an effective tax rate of 31.7% for the three months ended March 31, 2019 compared to an income tax benefit of $4.3 million and an effective tax rate of 28.1% for the ~~three and six months ended June 30, 2018 was 30.0% and 31.2% respectively, compared to 37.9% and 37.6% for the three and six months ended June 30, 2017.~~comparable period in 2018. See Corporate, Tax and Other Mattersbelow for a detailed discussion of the changes in the effective tax rate.

~~Earnings~~The loss per ~~diluted~~ share ~~(“diluted EPS”)~~ for the three ~~and six~~ months ended ~~June 30, 2018 were $0.49 and $0.25, respectively,~~March 31, 2019 was $0.01 compared to ~~$0.59 and $0.86~~$0.24 for the three ~~and six~~ months ended ~~June 30, 2017.~~March 31, 2018. The ~~prior year~~reduction in loss per share was ~~favorably impacted by a gain associated with a $37.0 million cash settlement ($0.43 of diluted EPS) received during the second quarter for litigation related~~primarily due to the ~~Company’s purchase of auction-rate securities nearly a decade earlier.~~ factors discussed above that resulted in increased income from construction operations.

Consolidated new awards for the three ~~and six~~ months ended ~~June 30, 2018 were $1.3~~March 31, 2019 totaled $3.2 billion ~~and $3.6 billion, respectively,~~ compared to ~~$1.6 billion and $3.7~~$2.2 billion for the same ~~periods~~period in ~~2017.~~2018. The ~~Civil segment was the major contributor to the new award activity in the second quarter of 2018, and the~~ Civil and Building segments were ~~both major~~the primary contributors to the new award activity in the first ~~half~~quarter of ~~2018.~~2019.

Consolidated backlog as of ~~June 30, 2018~~March 31, 2019 was ~~$8.7~~$11.6 billion, an increase of ~~19%~~25%, compared to ~~$7.3~~$9.3 billion at December 31, ~~2017.~~2018. The ~~significant~~ backlog growth ~~experienced since the end of 2017~~ was attributable to a large volume of new ~~Building~~Civil and ~~Civil~~Building segment awards, including the $1.4 billion ~~Newark Liberty International Airport Terminal One~~Purple Line Section 3 Stations project in California, the Choctaw Casino and Resort project in Oklahoma, a large hospitality and gaming project in California, the $253 million Culver Line Communications-Based Train Control project in New ~~Jersey,~~York and the ~~$410~~$200 million ~~Purple Line Extension Section 3 Tunneling~~Southland Gaming Casino and Hotel project in ~~California and a $215 million office building project, also in California.~~Arkansas. As of ~~June 30, 2018,~~March 31, 2019, the mix of backlog by segment was approximately ~~55%~~56% for Civil, ~~24%~~26% for Building and ~~21%~~18% for Specialty Contractors.

The following table presents the Company’s backlog by business segment, reflecting changes from December 31, ~~2017~~2018 to ~~June 30, 2018:~~March 31, 2019:



	Backlog at		New		Revenue		Backlog at		Backlog at		New		Revenue		Backlog at
(in millions)	December 31, 2017		Awards(a)		Recognized		June 30, 2018(b)		December 31, 2018		Awards(a)		Recognized		March 31, 2019(b)
Civil	$	4,118.2	$	1,284.8	$	(665.6)	$	4,737.4	$	5,141.9	$	1,697.5	$	(333.5)	$	6,505.9
Building		1,701.4		1,321.4		(937.2)		2,085.6		2,333.1		1,069.3		(433.5)		2,968.9
Specialty Contractors		1,463.8		949.9		(545.4)		1,868.3		1,821.7		479.3		(191.5)		2,109.5
Total	$	7,283.4	$	3,556.1	$	(2,148.2)	$	8,691.3	$	9,296.7	$	3,246.1	$	(958.5)	$	11,584.3

The outlook for ~~the~~our Company’s growth over the next several years isremains favorable, particularly in the Civil and Specialty Contractors ~~segments.~~segments, although the pace of growth could be moderated by project delays or the timing of project completions and project ramp-up activities. We anticipate that ~~additional~~we will continue to win our share of significant new awards ~~may benefit these segments based on~~resulting from long-term capital spending plans by state, local and federal customers, as well as bipartisan support for infrastructure ~~investments. Voters~~investments and limited competition for some of the largest project opportunities. In recent years, voters in numerous states approved dozens of long-term transportation funding measures ~~in recent elections~~ totaling approximately $200 billion 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 40 years and in Seattle, Washington, where Sound Transit 3 was passed and is expected to generate $54 billion of funding over 25 years. In addition, the Trump Administration ~~has proposed~~and various congressional leaders continue to propose a significant federal infrastructure investment ~~program.~~program, which is now estimated to be $2 trillion. Furthermore, several large, long-duration civil infrastructure programs with which we are already involved are progressing, such as ~~California’s High-Speed Rail system~~the Purple Line Extension projects in Los Angeles. Finally, while interest

rates have climbed modestly from their historical low levels, they remain relatively low and New York City’s East Side Access project. Planning and permitting activities continue on Amtrak’s Northeast Corridor Improvements, including the Gateway Program, which is expected to eventually bring new rail tunnels beneath the Hudson River to connect service between New Jersey and New York’s Penn Station. Finally,generally favorable ~~interest rates and capital costs are anticipated~~ to sustain ~~strong~~continued demand and ~~continued~~ spending by ~~public and private customers on infrastructure projects.~~customers.

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

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

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

Revenue for the three ~~and six~~ months ended ~~June 30, 2018 decreased 15% and 14%, respectively,~~March 31, 2019 increased 27% compared to the same ~~periods~~period in ~~2017.~~2018. The ~~decrease for both periods was primarily due to a net reduction in project execution activities on various mass-transit projects in New York and California and a tunnel project in Washington.~~

Income from construction operations for the three and six months ended June 30, 2018 decreased 15% and 42%, respectively, compared to the same periods in 2017. For the second quarter of 2018, the decreasegrowth was primarily due to the ~~volume changes mentioned above. For~~ramp-up of project execution activities on several newer projects, partially offset by a net reduction of activities on certain mass-transit projects in New York.

Income from construction operations increased substantially for the ~~six-month~~three months ended March 31, 2019 compared to the same period ~~of 2018, the decrease~~in 2018. The increase was ~~principally~~primarily due to the absence of the above-mentioned prior-year pre-tax charge totaling $17.8 million, ~~charge~~the factors mentioned above that drove the revenue increase and improved contributions from a project in ~~the first quarter of 2018 discussed above in the~~ ~~Executive Overview, as well as reduced project contributions primarily associated with the lower volume discussed above.~~California.

Operating margin was ~~12.3% and 7.9%, respectively,~~12.5% for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 compared to ~~12.3% and 11.6%~~1.1% for the same ~~periods~~period in ~~2017.~~2018. The margin ~~decrease for the six-month period~~increase was primarily attributable to the factors mentioned above that drove the ~~changes~~change in ~~revenue and~~ income from construction operations.

New awards in the Civil segment totaled ~~$664 million and $1.3~~$1.7 billion for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 compared to ~~$847~~$620 million ~~and $2.3 billion, respectively,~~ for the same ~~periods~~period in ~~2017.~~2018. New awards in the ~~second~~first quarter of ~~2018~~2019 included ~~a $410 million mass-transit~~the $1.4 billion Purple Line Section 3 Stations project in California and ~~a $93~~the $253 million ~~bridge~~Culver Line Communications-Based Train Control project in New York.

Backlog for the Civil segment was ~~$4.7~~$6.5 billion as of ~~June 30, 2018,~~March 31, 2019, up ~~$497 million, or 12%,~~45% compared to ~~the backlog~~$4.5 billion as of ~~June 30, 2017.~~March 31, 2018. The increase was driven primarily by the two new awards mentioned above, which highlight the strong market demand for investments in mass-transit infrastructure. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, ~~and~~ substantial anticipated funding from various voter-approved transportation ~~measures; the Trump Administration’s considerable proposed infrastructure investment program;~~measures and public agencies’ long-term spending plans. The Civil segment is well-positioned to ~~capture~~continue capturing its share of these prospective projects. ~~The segment, however, continues to face considerable competition, including occasional aggressive bids from competitors.~~

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

Revenue for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 decreased ~~9% and 5%, respectively,~~12% compared to the same ~~periods~~period in ~~2017.~~2018. The decrease ~~for both periods~~ was ~~predominantly attributable~~primarily due to reduced project execution activities on certain completed projects in California, ~~and Florida~~with the biggest contributor being a large technology project that ~~were recently completed,~~was finished in 2018. The decrease was partially offset by ~~increased activities~~the ramp-up and progress towards completion of another technology project in California, though the ramp-up and progress on ~~certain health care, mixed-use and technology projects~~this project, as well as on another project also in ~~California.~~California, was limited by adverse weather.

Income from construction operations for the three ~~and six~~ months ended ~~June 30, 2018 increased 119% and 73%, respectively,~~March 31, 2019 decreased 52% compared to the same ~~periods~~period in ~~2017.~~2018. The ~~increases were largely~~decrease was primarily due to ~~improved profitability on projects~~the factors mentioned above that drove the change in ~~California and certain higher-margin projects in Texas and New Jersey, as well as contract close-out adjustments in the prior year related to~~volume, along with positive contributions from a project in ~~California.~~California that was nearing completion in 2018.

Operating margin was 0.7% for the three months ended March 31, 2019 compared to 1.3% for the same period in 2018. The ~~increases were partially offset by~~margin decrease was mostly attributable to the ~~impact of~~above-mentioned factors that drove the ~~volume reductions mentioned above.~~

Operating margin was 2.8% and 2.0% for the three and six months ended June 30, 2018, respectively, compared to 1.2% and 1.1% for the same periods in 2017. The margin increases for both periods were mostly attributable to the above-mentioned factors that drove the changes in income from construction operations.

New awards in the Building segment totaled ~~$296 million and $1.3~~$1.1 billion for the three ~~and six~~ months ended ~~June 30, 2018, respectively, compared to $551 million and $817 million for~~March 31, 2019, up slightly from the same ~~periods~~period in ~~2017.~~2018. New awards in the ~~second~~first quarter of ~~2018~~2019 included ~~a $59 million military building~~the Choctaw Casino and Resort project in ~~South Carolina~~Oklahoma, a large hospitality and ~~various other smaller awards~~gaming project in California and ~~contract adjustments.~~the $200 million Southland Gaming Casino and Hotel project in Arkansas.

Backlog for the Building segment was ~~$2.1~~$3.0 billion as of ~~June 30, 2018,~~March 31, 2019, up ~~$277 million, or 15%,~~33% compared to ~~$1.8~~$2.2 billion as of ~~June 30, 2017.~~March 31, 2018. The increase was driven by the awards of above-mentioned projects, which reflect customer confidence in investments in new hospitality and gaming developments. ~~The backlog growth was primarily due to the award of the Newark Airport Terminal One project in the first quarter of 2018.~~ The Building segment continues to have a large volume of prospective projects, some of which have already been bid and are expected to be selected and awarded by customers in ~~2018. Elevated~~2019. Strong demand is expected to continue due to ongoing customer spending supported by a still favorable interest rate environment. The Building segment is well-positioned to capture its share of prospective projects based on its strong customer relationships and long-term reputation for excellence in delivering high-quality projects on time and within budget.

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

Revenue for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 decreased ~~4% and 9%, respectively,~~30% compared to the same ~~periods~~period in ~~2017.~~2018. The decrease ~~for both periods~~ was ~~predominantly~~primarily due to reduced project execution activities on ~~various~~certain electrical and mechanical projects in California, Washington and New York that are complete or nearing completion.

A loss from construction operations of $7.5 million was reported in the first quarter of 2019 compared to $7.2 million of income from construction operations in the same quarter of 2018. The decrease in income from construction operations was primarily driven by unfavorable closeout adjustments on certain electrical and mechanical projects in New York totaling $13.6 million, none of which were individually material. Lower contributions associated with the volume reduction mentioned above were mostly offset by favorable performance on other electrical and mechanical projects in New York.

~~Income from construction operations increased significantly~~Operating margin was (3.9)% for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 compared to the same periods in 2017. The absence of prior-year unfavorable adjustments on various projects in New York, none of which were individually material, more than offset the reduced volume for both periods in 2018.

~~Operating margin was 2.8% and 2.7% for the three and six months ended June 30, 2018, respectively, compared to -5.0% and 0.1%~~2.6% for the same ~~periods~~period in ~~2017.~~2018. The margin ~~increases for both periods were largely~~change was mainly attributable to the aforementioned reasons that caused the changes in revenue and income (loss) from construction operations.

New awards in the Specialty Contractors segment totaled ~~$374 million and $950~~$479 million for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 compared to ~~$239~~$576 million ~~and $535 million, respectively,~~ for the three ~~and six~~ months ended ~~June 30, 2017.~~March 31, 2018. New awards in the ~~second~~first quarter of ~~2018~~2019 included ~~a $172 million~~three mechanical ~~project~~projects in New York collectively valued at $192 million and an electrical subcontract valued at $140 million for a ~~$53 million tunnel systems installation~~mass-transit project, also in New York.

Backlog for the Specialty Contractors segment was ~~$1.9~~$2.1 billion as of ~~June 30, 2018,~~March 31, 2019, up ~~$357 million, or 24%,~~20% compared to ~~$1.5~~$1.8 billion as of ~~June 30, 2017.~~March 31, 2018, driven by the new awards mentioned above. The Specialty Contractors segment continues to have a substantial volume of prospective projects with demand increasing because of strong public and private sector spending on civil and building projects. The Specialty Contractors segment is increasingly focused on servicing the Company’s growing backlog of large Civil and Building segment projects, but remains well-positioned to capture its share of new projects for external ~~prospective projects based on~~customers, leveraging the size and scale of our business units that operate in New York, Texas, Florida and California and the strong reputation held by these business units for high-quality work on large, complex projects.

Corporate general and administrative expenses were ~~$14.4 million and $31.8~~$14.8 million during the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 compared to ~~$15.8 million and $30.7~~$17.4 million during the three ~~and six~~ months ended ~~June 30, 2017.~~March 31, 2018. The decrease was primarily due to lower compensation-related expenses.

Other Income, Net, Interest Expense and Income Tax (Expense) Benefit ~~(Provision)~~

~~Other income, net decreased $39.9 million and $39.6~~Interest expense increased $1.3 million for the three ~~and six~~ months ended ~~June 30, 2018, respectively,~~March 31, 2019 compared to the same ~~periods~~period in ~~2017.~~2018. The ~~decreases were primarily because~~increase in the prior-year periods included a $37.0 million gain associated with a cash settlement received during the second quarter of 2017 for litigation related to the Company’s purchase of auction-rate securities nearly a decade earlier.

~~Interest expense decreased $6.5 million and $7.0 million for the three and six months ended June 30, 2018, respectively, compared to the same periods in 2017. The decreases were~~2019 period was primarily due to ~~extinguishment costs recorded in the second quarter~~a higher average balance and interest rate on our line of ~~2017 related to our April 2017 debt restructuring transactions.~~credit.

The ~~Company’s~~ effective income tax rate for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 was ~~30.0% and 31.2%, respectively,~~31.7% compared to ~~37.9% and 37.6%~~28.1% for the ~~three and six months ended June 30, 2017.~~same period in 2018. The effective tax rates for the 2018 periods were favorably impacted by the reduction in the federal statutory income tax rate from 35% to 21% effective January 1, 2018 as a result of the Tax Cut and Jobs Act of 2017 (the “Tax Act”). The effective tax rates for the three and six months ended June 30, 2018 also reflect an unfavorable change in the New York State tax law in the second quarter related to the treatment of foreign income under the Tax Act. This change had a greater impact on the effective taxhigher rate in the ~~six-month~~2019 period ~~in 2018 compared to~~primarily resulted from the ~~three-month period in 2018 because the six-month period included a pre-tax loss in the first quarter.~~recognition of immaterial unfavorable nonrecurring items. For a further discussion of ~~the impact of the Tax Act,~~income taxes, refer to Note 7 of the Notes to ~~the~~ Condensed Consolidated Financial Statements.

Liquidity is provided by available cash and cash equivalents, cash generated from operations, credit facilities and access to capital markets. We have a committed line of credit totaling $350 million, which may be used for revolving loans, letters of credit and/or general purposes. We believe that cash generated from operations, along with our unused credit capacity of ~~$258~~$169 million and cash position, iswill be sufficient to fund any working capital needs for the ~~significant number of project opportunities that we see over the~~ next ~~several years, especially in our Civil segment.~~12 months.

Cash and cash equivalents were ~~$138.6~~$101.5 million as of ~~June 30, 2018~~March 31, 2019 compared to ~~$192.9~~$116.1 million as of December 31, ~~2017.~~2018. Cash immediately available for general corporate purposes was ~~$51.4~~$37.3 million and ~~$94.7~~$51.7 million as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively, with the remainder being our proportionate share of cash held by our unconsolidated joint ventures and also amounts held by our consolidated joint ventures, which in both cases were available only for joint venture-related uses, including distributions to joint venture partners. In addition, our restricted cash and restricted investments, held primarily to secure insurance-related contingent obligations, totaled ~~$56.3~~$69.0 million as of ~~June 30, 2018~~March 31, 2019 compared to ~~$57.8~~$61.9 million as of December 31, ~~2017.~~2018.

During the ~~six~~three months ended ~~June 30, 2018,~~March 31, 2019, net cash used in operating activities was ~~$62.4~~$124.8 million due primarily to investments in project working capital that exceeded cash generated from earnings sources. The change in working capital primarily reflects an increase in ~~costs and estimated earnings~~accounts receivable due to timing of collections. During the three months ended March 31, 2018, net cash used in ~~excess of billings and~~operating activities was $73.4 million due primarily to investments in project working capital. The change in project working capital primarily reflected a decrease in accounts payable due to the timing of payments to vendors and subcontractors ~~partially offset by~~and an increase in billings in excess of cost and estimated earnings and a decrease in retainage receivable. For the six months ended June 30, 2017, net cash used in operating activities was $34.6 million due primarily to investments in project working capital and payments for incentive compensation that exceeded cash generated from earnings sources.

~~The $27.8 million increase in cash used in operating activities for the six months ended June 30, 2018 compared to the six months ended June 30, 2017 primarily reflects unfavorable changes~~ in costs and estimated earnings in excess of ~~billings, accrued liabilities and retainage payable, as well as a decrease~~billings.

The $51.4 million change resulting from the comparison of cash used in ~~earnings sources (the~~operating activities for the three months ended March 31, 2019 with the cash flow for the comparable period in ~~2017 included the gain from the $37.0 million cash settlement~~2018 primarily reflects unfavorable timing of ~~the litigation discussed above), mostly offset by favorable changes in~~collections affecting accounts ~~receivable, retainage receivable and billings in excess of costs and estimated earnings.~~receivable.

During the first ~~six~~three months of ~~2018,~~2019, we used ~~$44.8~~$19.2 million of cash for investing activities principally due ~~primarily~~ to the acquisition of property and equipment for projects and investments in securities, compared to the use of cash of ~~$16.1~~$16.9 million for the same period in ~~2017,~~2018, primarily resulting from ~~investments in securities and~~ the acquisition of property and equipment for projects.

For the first ~~half~~three months of ~~2018,~~2019, net cash provided by financing activities was ~~$51.5~~$130.7 million, which was primarily due to increased net borrowings of ~~$81.4 million, partially offset by a $16.0 million earn-out payment related to an acquisition in a prior year and $12.5~~

~~million of cash distributions to noncontrolling interests.~~$134.3 million. Net cash provided by financing activities for the comparable period in ~~2017~~2018 was ~~$79.1~~$71.1 million, which was ~~principally~~primarily due to increased net borrowings ~~partially offset by debt issuance costs related to the debt restructuring transactions in April 2017, as well as tax payments associated with the net settlement~~ of ~~share-based compensation.~~$78.4 million.

At ~~June 30, 2018,~~March 31, 2019, we had working capital of ~~$1.5~~$1.7 billion, a ratio of current assets to current liabilities of ~~1.97~~2.09 and a ratio of debt to equity of ~~0.48,~~0.50, compared to working capital of ~~$1.5~~$1.6 billion, a ratio of current assets to current liabilities of ~~1.94~~1.99 and a ratio of debt to equity of 0.43 at December 31, ~~2017.~~2018.

Summarized below are the key terms of the 2017 Credit Facility as of ~~June 30, 2018.~~March 31, 2019. For additional information regarding our outstanding debt, refer to Note 8 of the Notes to Condensed Consolidated Financial Statements.

On April 20, 2017, we entered into a credit agreement (the “2017 Credit Facility”) with SunTrust Bank as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 2017 Credit Facility provides for a $350 million revolving credit facility (the “2017 Revolver”) and a sublimit for the issuance of letters of credit and swingline loans up to the aggregate amount of $150 million and $10 million, respectively, both maturing on April 20, 2022 unless any of the Convertible Notes are outstanding on December 17, 2020, in which case all such borrowings will mature on December 17, 2020 (subject to certain further exceptions). In addition, the 2017 Credit Facility permits additional borrowings in an aggregate amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans. On May 7, 2019, certain provisions of the 2017 Credit Facility were amended, including, among other things, 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. For additional information regarding the terms of our 2017 Credit Facility, refer to Note 8 of the Notes to Condensed Consolidated Financial Statements.

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:

As of ~~June 30, 2018,~~March 31, 2019, we were in compliance and expect to continue to be in compliance with the covenants under the 2017 Credit Facility.

There have been no material changes in our contractual obligations from those described in our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018.

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, ~~2017.~~2018. 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, ~~2017. Effective January 1, 2018,~~2018.

The Company tests goodwill for impairment annually for each reporting unit as of October 1st, and between annual tests if events occur or circumstances change which suggest that goodwill should be reevaluated. We determined that no triggering events occurred or circumstances changed since the date of our last annual test that would more likely than not reduce the fair value of the Company’s reporting units below their carrying amounts. Accordingly, an interim impairment test since the date of our last annual impairment test was not required. However, we will continue to monitor circumstances such as a sustained decline in our stock price and market capitalization or other factors, as well as consider entity specific quantitative and qualitative factors to identify potential triggering events that would more likely than not reduce the fair value of the Company’s reporting units below their carrying amounts. For a further discussion of how the Company ~~adopted~~ ~~Accounting Standards Codification~~ ~~606,~~ ~~Revenue from Contracts with Customers. See Notes 3~~considers these and 4other factors in our annual goodwill impairment test, please see the discussion included in Item 7 of our Annual Report on Form 10-K for the ~~Notes to Condensed Consolidated Financial Statements for more information.~~year ended December 31, 2018.

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, ~~2017.~~2018.

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.

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.

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, ~~2017. For an update to those disclosures, see~~2018, updated by Note 910 of the Notes to ~~the~~ Condensed Consolidated Financial ~~Statements.~~Statements included in this Quarterly Report on Form 10-Q.

There have been no material changes to our risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018.

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 mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 Regulation S-K is included in Exhibit 95.

~~None.~~On May 7, 2019 Tutor Perini Corporation amended its 2017 Credit Facility (“the Amendment”). The Amendment does not change the total revolving commitments or the maturity under the 2017 Credit Facility. The Amendment modified certain provisions of the 2017 Credit Facility, including, among other things, setting the maximum leverage ratio at 3.50:1.00 for the remainder of its term, effective March 31, 2019. Other usual and customary covenants for credit facilities of this type remained consistent with those of the 2017 Credit Facility (subject to certain definitional adjustments made in the Amendment).

The foregoing description of the Amendment does not constitute a complete summary and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed herewith as Exhibit 10.1.

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.


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


Large accelerated filer ☒		Accelerated filer ☐

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

Emerging growth company ☐


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


			Page Numbers
Part I.	Financial Information:
	Item 1.	Financial Statements:
		Condensed Consolidated Statements of ~~Income~~Operations for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~ (Unaudited)	3
		Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~ (Unaudited)	4
		Condensed Consolidated Balance Sheets as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 (Unaudited)	5
		Condensed Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~ (Unaudited)	6
		Notes to Condensed Consolidated Financial Statements (Unaudited)	~~7-28~~7-25
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~29-34~~26-31
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3432
	Item 4.	Controls and Procedures	3532
Part II.	Other Information:
	Item 1.	Legal Proceedings	3532
	Item 1A.	Risk Factors	3532
	Item 4.	Mine Safety Disclosures	3532
	Item 5.	Other Information	3532
	Item 6.	Exhibits	3633
	Signature		3734



	Three Months Ended				Six Months Ended				Three Months Ended
	June 30,				June 30,				March 31,
(in thousands, except per common share amounts)	2018		2017		2018		2017		2019		2018
REVENUE	$	1,120,085	$	1,247,274	$	2,148,241	$	2,364,635	$	958,487	$	1,028,156
COST OF OPERATIONS		(1,001,445)		(1,144,436)		(1,962,533)		(2,159,078)		(870,017)		(961,088)
GROSS PROFIT		118,640		102,838		185,708		205,557		88,470		67,068
General and administrative expenses		(63,825)		(68,793)		(131,818)		(134,495)		(65,557)		(67,993)
INCOME FROM CONSTRUCTION OPERATIONS		54,815		34,045		53,890		71,062
INCOME (LOSS) FROM CONSTRUCTION OPERATIONS										22,913		(925)
Other income, net		1,050		40,990		1,830		41,406		422		780
Interest expense		(15,998)		(22,519)		(31,063)		(38,083)		(16,425)		(15,065)
INCOME BEFORE INCOME TAXES		39,867		52,516		24,657		74,385
Provision for income taxes		(11,971)		(19,883)		(7,703)		(27,988)
NET INCOME		27,896		32,633		16,954		46,397
INCOME (LOSS) BEFORE INCOME TAXES										6,910		(15,210)
Income tax (expense) benefit										(2,188)		4,268
NET INCOME (LOSS)										4,722		(10,942)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		3,013		2,537		4,195		2,537		5,078		1,182
NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION	$	24,883	$	30,096	$	12,759	$	43,860
BASIC EARNINGS PER COMMON SHARE	$	0.50	$	0.61	$	0.26	$	0.89
DILUTED EARNINGS PER COMMON SHARE	$	0.49	$	0.59	$	0.25	$	0.86
NET LOSS ATTRIBUTABLE TO TUTOR PERINI CORPORATION									$	(356)	$	(12,124)
BASIC LOSS PER COMMON SHARE									$	(0.01)	$	(0.24)
DILUTED LOSS PER COMMON SHARE									$	(0.01)	$	(0.24)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:
BASIC		49,946		49,735		49,880		49,510		50,098		49,814
DILUTED		50,440		50,755		50,127		50,853		50,098		49,814



	Six Months Ended June 30,				Three Months Ended March 31,
(in thousands)	2018		2017		2019		2018
Cash Flows from Operating Activities:
Net income	$	16,954	$	46,397
Adjustments to reconcile net income to net cash used in operating activities:
Net income (loss)					$	4,722	$	(10,942)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		19,393		28,987		12,831		9,301
Amortization of intangible assets		1,771		1,771		886		886
Share-based compensation expense		12,063		10,420		5,506		6,081
Change in debt discounts and deferred debt issuance costs		5,914		11,950		3,174		2,927
Deferred income taxes		116		(1)		142		186
Loss (gain) on sale of property and equipment		1,474		(349)
(Gain) loss on sale of property and equipment						(107)		1,471
Changes in other components of working capital		(113,887)		(132,779)		(154,192)		(84,272)
Other long-term liabilities		(5,276)		(2,801)		2,177		1,139
Other, net		(902)		1,785		76		(180)
NET CASH USED IN OPERATING ACTIVITIES		(62,380)		(34,620)		(124,785)		(73,403)

Cash Flows from Investing Activities:
Acquisition of property and equipment		(48,303)		(8,183)		(14,412)		(19,970)
Proceeds from sale of property and equipment		4,120		1,336		201		3,303
Investment in securities		(8,549)		(9,297)		(8,357)		(3,288)
Proceeds from maturities and sales of investments in securities		7,982		—		3,324		3,007
NET CASH USED IN INVESTING ACTIVITIES		(44,750)		(16,144)		(19,244)		(16,948)

Cash Flows from Financing Activities:
Proceeds from debt		1,246,677		1,276,457		394,000		665,000
Repayment of debt		(1,165,283)		(1,171,954)		(259,691)		(586,559)
Business acquisition related payment		(15,951)		—
Issuance of common stock and effect of cashless exercise		(2,458)		(10,809)
Cash payments related to share-based compensation						(2,364)		(2,308)
Distributions paid to noncontrolling interests		(12,500)		(2,500)		(4,000)		(5,000)
Contributions from noncontrolling interests		1,000		1,250		2,798		—
Debt issuance and extinguishment costs		—		(13,309)
NET CASH PROVIDED BY FINANCING ACTIVITIES		51,485		79,135		130,743		71,133

Net increase (decrease) in cash, cash equivalents and restricted cash		(55,645)		28,371
Net decrease in cash, cash equivalents and restricted cash						(13,286)		(19,218)
Cash, cash equivalents and restricted cash at beginning of period		197,648		196,607		119,863		197,648
Cash, cash equivalents and restricted cash at end of period	$	142,003	$	224,978	$	106,577	$	178,430



			Adjustments
BALANCE SHEET	Balance as of		due to		Balance as of
(in thousands)	December 31, 2017(a)		ASC 606		January 1, 2018
ASSETS
Accounts receivable(b)	$	1,801,656	$	(535,939)	$	1,265,717
Retainage receivable(b)		—		535,939		535,939
Other current assets		89,316		32,773		122,089

LIABILITIES
Accounts payable(b)		961,791		(261,820)		699,971
Retainage payable(b)		—		261,820		261,820
Billings in excess of costs and estimated earnings		456,869		39,785		496,654
Deferred income taxes		108,504		(1,537)		106,967

EQUITY
Retained earnings		622,007		(3,762)		618,245
Noncontrolling interests		(8,495)		(1,714)		(10,209)



	Three Months Ended June 30, 2018
			Balance Without
STATEMENT OF INCOME			Adoption of		Effect of
(in thousands)	As Reported		ASC 606		Change
REVENUE	$	1,120,085	$	1,126,925	$	(6,840)
COST OF OPERATIONS		(1,001,445)		(1,007,258)		5,813
GROSS PROFIT		118,640		119,667		(1,027)
General and administrative expenses		(63,825)		(63,825)		—
INCOME FROM CONSTRUCTION OPERATIONS		54,815		55,842		(1,027)
Other income, net		1,050		1,050		—
Interest expense		(15,998)		(15,998)		—
INCOME BEFORE INCOME TAXES		39,867		40,894		(1,027)
Provision for income taxes		(11,971)		(12,211)		240
NET INCOME		27,896		28,683		(787)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		3,013		3,213		(200)
NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION	$	24,883	$	25,470	$	(587)



	Six Months Ended June 30, 2018
			Balance Without
STATEMENT OF INCOME			Adoption of		Effect of
(in thousands)	As Reported		ASC 606		Change
REVENUE	$	2,148,241	$	2,157,193	$	(8,952)
COST OF OPERATIONS		(1,962,533)		(1,970,113)		7,580
GROSS PROFIT		185,708		187,080		(1,372)
General and administrative expenses		(131,818)		(131,818)		—
INCOME FROM CONSTRUCTION OPERATIONS		53,890		55,262		(1,372)
Other income, net		1,830		1,830		—
Interest expense		(31,063)		(31,063)		—
INCOME BEFORE INCOME TAXES		24,657		26,029		(1,372)
Provision for income taxes		(7,703)		(8,055)		352
NET INCOME		16,954		17,974		(1,020)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		4,195		4,355		(160)
NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION	$	12,759	$	13,619	$	(860)



	As of June 30, 2018
			Balance Without
BALANCE SHEET			Adoption of		Effect of
(in thousands)	As Reported		ASC 606		Change
ASSETS
Accounts receivable(a)	$	1,272,932	$	1,762,442	$	(489,510)
Retainage receivable(a)		490,751		—		490,751
Costs and estimated earnings in excess of billings		1,044,233		1,044,395		(162)
Other current assets		141,472		101,119		40,353

LIABILITIES
Accounts payable(a)	$	625,436	$	861,981	$	(236,545)
Retainage payable(a)		236,545		—		236,545
Billings in excess of costs and estimated earnings		574,392		524,576		49,816
Accrued expenses and other current liabilities		134,264		134,896		(632)
Deferred income taxes		106,284		107,540		(1,256)

EQUITY
Retained earnings	$	631,004	$	635,626	$	(4,622)
Noncontrolling interests		(17,618)		(15,744)		(1,874)



	Three Months		Six Months
	Ended June 30,		Ended June 30,
(in thousands)	2018		2018
Civil segment revenue by end market:
Mass transit	$	158,096	$	308,222
Bridges		120,929		183,739
Highways		65,809		83,066
Tunneling		23,931		32,632
Other		33,708		57,928
Total Civil segment revenue	$	402,473	$	665,587



	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
(in thousands, except per common share data)	2018		2017		2018		2017		2019		2018
Net income attributable to Tutor Perini Corporation	$	24,883	$	30,096	$	12,759	$	43,860
Net loss attributable to Tutor Perini Corporation									$	(356)	$	(12,124)

Weighted-average common shares outstanding, basic		49,946		49,735		49,880		49,510		50,098		49,814
Effect of dilutive restricted stock units and stock options		494		1,020		247		1,343		—		—
Weighted-average common shares outstanding, diluted		50,440		50,755		50,127		50,853		50,098		49,814

Net income attributable to Tutor Perini Corporation per common share:
Net loss attributable to Tutor Perini Corporation per common share:
Basic	$	0.50	$	0.61	$	0.26	$	0.89	$	(0.01)	$	(0.24)
Diluted	$	0.49	$	0.59	$	0.25	$	0.86	$	(0.01)	$	(0.24)

Anti-dilutive securities not included above		1,682		353		3,095		672		4,518		4,507



	As of June 30, 2018						As of December 31, 2017						As of March 31, 2019						As of December 31, 2018
(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		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	$	(6,879)	$	493,121	$	500,000	$	(7,266)	$	492,734	$	500,000	$	(6,274)	$	493,726	$	500,000	$	(6,479)	$	493,521
Convertible Notes		200,000		(33,558)		166,442		200,000		(38,365)		161,635		200,000		(25,911)		174,089		200,000		(28,519)		171,481



	Three Months Ended
(in thousands)	March 31, 2019
Operating lease expense	$	3,781
Short-term lease expense(a)		16,571
		20,352
Less: Sublease income		259
Total lease expense	$	20,093



		As of March 31,
(dollars in thousands)	Balance Sheet Line Item	2019
Assets
ROU assets	Other assets	$	41,977
Total lease assets		$	41,977
Liabilities
Current lease liabilities	Accrued expenses and other current liabilities	$	11,598
Long-term lease liabilities	Other long-term liabilities		33,341
Total lease liabilities		$	44,939
Weighted-average remaining lease term (in years)			5.1
Weighted-average discount rate			5.82%



Year (in thousands)	Operating Leases
2019 (excluding the three months ended March 31, 2019)	$	10,513
2020		10,871
2021		7,636
2022		6,567
2023		5,587
Thereafter		11,662
Total lease payments		52,836
Less: Imputed interest		7,897
Total	$	44,939



							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



	Six Months Ended						Six Months Ended
	June 30, 2018						June 30, 2017
(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	$	1,026	$	(291)	$	735	$	912	$	(375)	$	537
Foreign currency translation adjustment		(2,553)		745		(1,808)		1,009		(414)		595
Unrealized loss in fair value of investments		(1,295)		281		(1,014)		(42)		18		(24)
Total other comprehensive income (loss)		(2,822)		735		(2,087)		1,879		(771)		1,108
Total other comprehensive income (loss) attributable to Tutor Perini Corporation	$	(2,822)	$	735	$	(2,087)	$	1,879	$	(771)	$	1,108



	Three Months Ended June 30, 2018
	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 March 31, 2018	$	(39,060)	$	(4,765)	$	229	$	(43,596)
Other comprehensive income (loss) before reclassifications		—		(634)		(929)		(1,563)
Amounts reclassified from AOCI		354		—		—		354
Total other comprehensive income (loss)		354		(634)		(929)		(1,209)
Balance as of June 30, 2018	$	(38,706)	$	(5,399)	$	(700)	$	(44,805)



	Three Months Ended June 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 March 31, 2017	$	(40,597)	$	(4,918)	$	295	$	(45,220)
Other comprehensive income (loss) before reclassifications		—		649		(3)		646
Amounts reclassified from AOCI		269		—		—		269
Total other comprehensive income (loss)		269		649		(3)		915
Balance as of June 30, 2017	$	(40,328)	$	(4,269)	$	292	$	(44,305)



	Six Months Ended June 30, 2017
	Defined				Unrealized		Accumulated
	Benefit		Foreign		Gain (Loss) in		Other
	Pension		Currency		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 income (loss) before reclassifications		—		595		(24)		571
Amounts reclassified from AOCI		537		—		—		537
Total other comprehensive income (loss)		537		595		(24)		1,108
Balance as of June 30, 2017	$	(40,328)	$	(4,269)	$	292	$	(44,305)



	Reportable Segments
					Specialty							Consolidated
(in thousands)	Civil			Building	Contractors		Total		Corporate			Total
Three Months Ended March 31, 2019
Total revenue	$	383,622	$	436,243	$	191,527	$	1,011,392	$	—		$	1,011,392
Elimination of intersegment revenue		(50,128)		(2,777)		—		(52,905)		—			(52,905)
Revenue from external customers	$	333,494	$	433,466	$	191,527	$	958,487	$	—		$	958,487
Income (loss) from construction operations	$	41,745	$	3,133	$	(7,488)	$	37,390	$	(14,477)	(a)	$	22,913
Capital expenditures	$	14,012	$	55	$	123	$	14,190	$	222		$	14,412
Depreciation and amortization(b)	$	9,370	$	503	$	1,064	$	10,937	$	2,780		$	13,717

Three Months Ended March 31, 2018
Total revenue	$	325,400	$	490,617	$	274,801	$	1,090,818	$	—		$	1,090,818
Elimination of intersegment revenue		(62,286)		(376)		—		(62,662)		—			(62,662)
Revenue from external customers	$	263,114	$	490,241	$	274,801	$	1,028,156	$	—		$	1,028,156
Income (loss) from construction operations(c)	$	2,839	$	6,425	$	7,235	$	16,499	$	(17,424)	(a)	$	(925)
Capital expenditures	$	19,196	$	278	$	419	$	19,893	$	77		$	19,970
Depreciation and amortization(b)	$	5,756	$	481	$	1,112	$	7,349	$	2,838		$	10,187



	As of		As of		As of		As of
(in thousands)	June 30, 2018		December 31, 2017		March 31, 2019		December 31, 2018
Civil	$	2,507,912	$	2,452,108	$	2,606,842	$	2,574,326
Building		913,031		909,207		936,099		913,746
Specialty Contractors		751,174		767,807		744,509		745,313
Corporate and other(a)		185,648		135,001		268,820		154,367
Total assets	$	4,357,765	$	4,264,123	$	4,556,270	$	4,387,752



	Twelve Months Ended ~~June 30, 2018~~March 31, 2019
	Actual	Required
Fixed charge coverage ratio	~~2.62~~3.51 to 1.00	> or = 1.25 : 1.00
Leverage ratio	~~3.35~~2.87 to 1.00	< or = 3.50 : 1.00


Exhibits	Description
10.1	~~Tutor Perini Corporation Omnibus Incentive Plan (incorporated by reference~~First Amendment to ~~Exhibit 10.1 to Form 8-K filed on~~Credit Agreement dated as of May ~~25, 2018).~~7, 2019.
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.
95	Mine Safety Disclosure.
101.INS	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.


	Tutor Perini Corporation


Dated: ~~August 7, 2018~~May 8, 2019	By:	/s/ Gary G. Smalley
	Gary G. Smalley
	Executive Vice President and Chief Financial Officer