(State or Other Jurisdiction of (Address of Principal Executive Offices) 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 ☐ ☐ ☐ 50,937,607. TUTORPERINI CORPORATION AND SUBSIDIARIES PART I. –FINANCIAL INFORMATION INCOME Three Months Ended Six Months Ended June 30, June 30, (in thousands, except per common share amounts) 2020 2019 2020 2019 REVENUE $ 1,276,427 $ 1,125,275 $ 2,527,156 $ 2,083,762 COST OF OPERATIONS (1,158,673) (1,024,332) (2,298,322) (1,894,349) GROSS PROFIT 117,754 100,943 228,834 189,413 General and administrative expenses (60,058) (62,797) (123,911) (128,354) Goodwill impairment — (379,863) — (379,863) INCOME (LOSS) FROM CONSTRUCTION OPERATIONS 57,696 (341,717) 104,923 (318,804) Other income (expense) (797) 900 (316) 1,322 Interest expense (16,464) (17,522) (32,900) (33,947) INCOME (LOSS) BEFORE INCOME TAXES 40,435 (358,339) 71,707 (351,429) Income tax (expense) benefit (9,576) 42,900 (14,710) 40,712 NET INCOME (LOSS) 30,859 (315,439) 56,997 (310,717) LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 12,150 5,091 20,917 10,169 NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 18,709 $ (320,530) $ 36,080 $ (320,886) BASIC EARNINGS (LOSS) PER COMMON SHARE $ 0.37 $ (6.38) $ 0.71 $ (6.40) DILUTED EARNINGS (LOSS) PER COMMON SHARE $ 0.37 $ (6.38) $ 0.71 $ (6.40) WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: BASIC 50,667 50,224 50,502 50,161 DILUTED 50,935 50,224 50,885 50,161 TUTOR PERINI CORPORATION AND SUBSIDIARIES Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 NET INCOME (LOSS) $ 30,859 $ (315,439) $ 56,997 $ (310,717) OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: Defined benefit pension plan adjustments 424 331 847 661 Foreign currency translation adjustments 1,655 810 (2,358) 1,158 Unrealized gain in fair value of investments 1,306 686 1,848 1,359 TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX 3,385 1,827 337 3,178 COMPREHENSIVE INCOME (LOSS) 34,244 (313,612) 57,334 (307,539) LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 13,004 5,248 19,751 10,428 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 21,240 $ (318,860) $ 37,583 $ (317,967) TUTOR PERINI CORPORATION AND SUBSIDIARIES As of June 30, As of December 31, (in thousands, except share and per share amounts) 2020 2019 ASSETS ASSETS CURRENT ASSETS: Cash and cash equivalents ($92,056 and $103,850 related to variable interest entities ("VIEs")) $ 182,599 $ 193,685 Restricted cash 8,892 8,416 Restricted investments 75,382 70,974 Accounts receivable ($129,081 and $91,090 related to VIEs) 1,586,560 1,354,519 Retainage receivable ($98,304 and $89,132 related to VIEs) 581,495 562,375 Costs and estimated earnings in excess of billings ($26,392 and $22,764 related to VIEs) 1,149,103 1,123,544 Other current assets ($55,286 and $58,128 related to VIEs) 222,392 197,473 Total current assets 3,806,423 3,510,986 PROPERTY AND EQUIPMENT ("P&E"), net of accumulated depreciation of $417,575 and $388,147 (net P&E of $34,669 and $49,919 related to VIEs) 504,722 509,685 GOODWILL 205,143 205,143 INTANGIBLE ASSETS, NET 140,674 155,270 OTHER ASSETS 106,641 104,693 TOTAL ASSETS $ 4,763,603 $ 4,485,777 LIABILITIES AND EQUITY LIABILITIES AND EQUITY CURRENT LIABILITIES: Current maturities of long-term debt, net of unamortized discount and debt issuance costs totaling $11,911 and $0 $ 320,790 $ 124,054 Accounts payable ($110,676 and $93,848 related to VIEs) 770,515 682,699 Retainage payable ($19,589 and $13,967 related to VIEs) 278,045 252,181 Billings in excess of costs and estimated earnings ($434,608 and $422,847 related to VIEs) 962,446 844,389 Accrued expenses and other current liabilities ($16,212 and $25,402 related to VIEs) 209,576 206,533 Total current liabilities 2,541,372 2,109,856 LONG-TERM DEBT, less current maturities, net of unamortized discount and debt issuance costs totaling $5,190 and $23,343 515,629 710,422 DEFERRED INCOME TAXES 41,329 35,686 OTHER LONG-TERM LIABILITIES 201,132 199,288 TOTAL LIABILITIES 3,299,462 3,055,252 COMMITMENTS AND CONTINGENCIES (NOTE 11) EQUITY Stockholders' equity: Preferred stock - authorized 1,000,000 shares ($1 par value), NaN issued — — Common stock - authorized 75,000,000 shares ($1 par value), issued and outstanding 50,771,288 and 50,278,816 shares 50,771 50,279 Additional paid-in capital 1,124,672 1,117,972 Retained earnings 350,071 313,991 Accumulated other comprehensive loss (40,597) (42,100) Total stockholders' equity 1,484,917 1,440,142 Noncontrolling interests (20,776) (9,617) TOTAL EQUITY 1,464,141 1,430,525 TOTAL LIABILITIES AND EQUITY $ 4,763,603 $ 4,485,777 TUTOR PERINI CORPORATION AND SUBSIDIARIES Six Months Ended June 30, (in thousands) 2020 2019 Cash Flows from Operating Activities: Net income (loss) $ 56,997 $ (310,717) Adjustments to reconcile net income (loss) to net cash provided by (used) in operating activities: Goodwill impairment — 379,863 Depreciation 34,180 26,543 Amortization of intangible assets 14,596 1,771 Share-based compensation expense 8,264 10,078 Change in debt discount and deferred debt issuance costs 7,046 6,442 Deferred income taxes 5,423 (50,321) Loss (gain) on sale of property and equipment 31 (1,479) Changes in other components of working capital (68,471) (177,471) Other long-term liabilities 1,295 3,209 Other, net (1,131) 596 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 58,230 (111,486) Cash Flows from Investing Activities: Acquisition of property and equipment (31,386) (39,346) Proceeds from sale of property and equipment 1,082 3,629 Investment in securities (13,319) (13,660) Proceeds from maturities and sales of investments in securities 10,985 8,131 NET CASH USED IN INVESTING ACTIVITIES (32,638) (41,246) Cash Flows from Financing Activities: Proceeds from debt 752,843 716,139 Repayment of debt (757,141) (527,159) Cash payments related to share-based compensation (994) (2,363) Distributions paid to noncontrolling interests (30,910) (4,000) Contributions from noncontrolling interests — 5,379 Debt modification costs — (504) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (36,202) 187,492 Net increase (decrease) in cash, cash equivalents and restricted cash (10,610) 34,760 Cash, cash equivalents and restricted cash at beginning of period 202,101 119,863 Cash, cash equivalents and restricted cash at end of period $ 191,491 $ 154,623 2021. Certain amounts in the notes to the condensed consolidated financial statements of prior years have been reclassified to conform to the current year presentation. Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The amendments in ASU 2020-06 simplify accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted EPS and the treasury stock method will no longer be available. ASU 2020-06 is effective for interim and annual reporting periods beginning after December 15, 2021, with early adoption permitted. The Company does not expect to early adopt the new standard and does not expect it to have an impact on the Company's financial position, results of operations or cash flows. (3)Revenue 2020. Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 Civil segment revenue by end market: Mass transit (includes transportation and tunneling projects) $ 354,809 $ 243,620 $ 651,952 $ 389,870 Bridges 89,100 86,467 141,284 155,774 Highways 35,591 60,244 68,173 101,287 Military defense facilities 35,042 13,140 58,652 23,421 Water 29,548 4,658 53,292 14,326 Other 24,886 65,529 82,252 122,474 Total Civil segment revenue $ 568,976 $ 473,658 $ 1,055,605 $ 807,152 Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 Building segment revenue by end market: Commercial and industrial facilities $ 106,899 $ 115,193 $ 239,948 $ 224,546 Hospitality and gaming 107,942 53,576 226,929 122,885 Municipal and government 79,223 68,580 148,725 130,542 Mass transit (includes transportation projects) 66,552 41,211 124,399 70,388 Education facilities 47,038 47,062 78,660 89,590 Health care facilities 32,418 60,796 68,307 141,023 Mixed use 13,101 9,316 23,073 24,591 Other 19,848 32,584 44,744 58,219 Total Building segment revenue $ 473,021 $ 428,318 $ 954,785 $ 861,784 Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 Specialty Contractors segment revenue by end market: Mass transit (includes transportation and tunneling projects) $ 118,634 $ 100,016 $ 267,305 $ 181,411 Commercial and industrial facilities 20,499 43,618 74,004 87,641 Multi-unit residential 37,611 19,225 64,104 30,614 Education facilities 10,338 14,036 26,895 25,616 Mixed use 10,536 18,036 24,338 28,705 Health care facilities 4,283 9,248 6,805 20,899 Other 32,529 19,120 53,315 39,940 Total Specialty Contractors segment revenue $ 234,430 $ 223,299 $ 516,766 $ 414,826 Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Specialty Specialty (in thousands) Civil Building Contractors Total Civil Building Contractors Total Revenue by customer type: State and local agencies $ 503,828 $ 157,748 $ 113,623 $ 775,199 $ 381,438 $ 133,798 $ 114,255 $ 629,491 Federal agencies 42,590 34,648 11,292 88,530 26,979 44,396 2,761 74,136 Private owners 22,558 280,625 109,515 412,698 65,241 250,124 106,283 421,648 Total revenue $ 568,976 $ 473,021 $ 234,430 $ 1,276,427 $ 473,658 $ 428,318 $ 223,299 $ 1,125,275 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Specialty Specialty (in thousands) Civil Building Contractors Total Civil Building Contractors Total Revenue by customer type: State and local agencies $ 899,873 $ 303,764 $ 246,496 $ 1,450,133 $ 638,545 $ 278,484 $ 211,326 $ 1,128,355 Federal agencies 79,251 66,621 21,048 166,920 50,137 84,547 10,530 145,214 Private owners 76,481 584,400 249,222 910,103 118,470 498,753 192,970 810,193 Total revenue $ 1,055,605 $ 954,785 $ 516,766 $ 2,527,156 $ 807,152 $ 861,784 $ 414,826 $ 2,083,762 Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Specialty Specialty (in thousands) Civil Building Contractors Total Civil Building Contractors Total Revenue by contract type: Fixed price $ 455,928 $ 114,229 $ 205,531 $ 775,688 $ 349,945 $ 136,250 $ 187,826 $ 674,021 Guaranteed maximum price 281 248,738 4,038 253,057 1,644 185,050 7,315 194,009 Unit price 111,790 629 18,442 130,861 116,285 2,800 20,183 139,268 Cost plus fee and other 977 109,425 6,419 116,821 5,784 104,218 7,975 117,977 Total revenue $ 568,976 $ 473,021 $ 234,430 $ 1,276,427 $ 473,658 $ 428,318 $ 223,299 $ 1,125,275 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Specialty Specialty (in thousands) Civil Building Contractors Total Civil Building Contractors Total Revenue by contract type: Fixed price $ 864,899 $ 219,827 $ 454,047 $ 1,538,773 $ 592,811 $ 250,609 $ 343,090 $ 1,186,510 Guaranteed maximum price 589 486,511 6,587 493,687 3,878 392,182 10,921 406,981 Unit price 183,148 1,163 39,593 223,904 201,163 8,028 39,186 248,377 Cost plus fee and other 6,969 247,284 16,539 270,792 9,300 210,965 21,629 241,894 Total revenue $ 1,055,605 $ 954,785 $ 516,766 $ 2,527,156 $ 807,152 $ 861,784 $ 414,826 $ 2,083,762 Changes in Contract Estimates that Impact Revenue immaterial. Contract assets include amounts due under retainage provisions, costs and estimated earnings in excess of billings and capitalized contract costs. The amounts as included on the Condensed Consolidated Balance Sheets consisted of the following: As of June 30, As of December 31, (in thousands) 2020 2019 Retainage receivable $ 581,495 $ 562,375 Costs and estimated earnings in excess of billings: Claims 729,170 705,993 Unapproved change orders 348,043 362,264 Other unbilled costs and profits 71,890 55,287 Total costs and estimated earnings in excess of billings 1,149,103 1,123,544 Capitalized contract costs 88,185 80,294 Total contract assets $ 1,818,783 $ 1,766,213 As of June 30, As of December 31, (in thousands) 2020 2019 Retainage payable $ 278,045 $ 252,181 Billings in excess of costs and estimated earnings 962,446 844,389 Total contract liabilities $ 1,240,491 $ 1,096,570 Retainage payable represents amounts invoiced to the Company by subcontractors where payments have been partially withheld pending the completion of certain milestones, other contractual conditions or upon the completion of the project. Generally, retainage payable is not remitted to subcontractors until the associated retainage receivable from customers is collected. As of June 30, As of December 31, (in thousands) 2020 2019 Cash and cash equivalents available for general corporate purposes $ 57,651 $ 43,760 Joint venture cash and cash equivalents 124,948 149,925 Cash and cash equivalents 182,599 193,685 Restricted cash 8,892 8,416 Total cash, cash equivalents and restricted cash $ 191,491 $ 202,101 (6)Earnings Per Common Share Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per common share data) 2020 2019 2020 2019 Net income (loss) attributable to Tutor Perini Corporation $ 18,709 $ (320,530) $ 36,080 $ (320,886) Weighted-average common shares outstanding, basic 50,667 50,224 50,502 50,161 Effect of dilutive restricted stock units and stock options 268 — 383 — Weighted-average common shares outstanding, diluted 50,935 50,224 50,885 50,161 Net income (loss) attributable to Tutor Perini Corporation per common share: Basic $ 0.37 $ (6.38) $ 0.71 $ (6.40) Diluted $ 0.37 $ (6.38) $ 0.71 $ (6.40) Anti-dilutive securities not included above 2,209 4,191 2,209 4,354 (8)Goodwill and Intangible Assets March 31, 2021: Specialty (in thousands) Civil Building Contractors Total Gross goodwill $ 492,074 $ 424,724 $ 156,193 $ 1,072,991 Accumulated impairment (286,931) (424,724) (156,193) (867,848) Balance as of December 31, 2019 205,143 — — 205,143 Current year activity — — — — Balance as of June 30, 2020 $ 205,143 $ — $ — $ 205,143 Intangible Assets As of June 30, 2020 Weighted Accumulated Average Accumulated Impairment Carrying Amortization (in thousands) Cost Amortization Charge Value Period Trade names (non-amortizable) $ 117,600 $ — $ (67,190) $ 50,410 Indefinite Trade names (amortizable) 74,350 (22,511) (23,232) 28,607 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (21,575) (16,645) 1,580 12 years Construction contract backlog 149,290 (89,213) — 60,077 3 years Total $ 387,040 $ (133,299) $ (113,067) $ 140,674 As of December 31, 2019 Weighted Accumulated Average Accumulated Impairment Carrying Amortization (in thousands) Cost Amortization Charge Value Period Trade names (non-amortizable) $ 117,600 $ — $ (67,190) $ 50,410 Indefinite Trade names (amortizable) 74,350 (21,267) (23,232) 29,851 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (21,048) (16,645) 2,107 12 years Construction contract backlog 149,290 (76,388) — 72,902 3 years Total $ 387,040 $ (118,703) $ (113,067) $ 155,270 2026 and $12.4 million thereafter. (9)Financial Commitments As of June 30, As of December 31, (in thousands) 2020 2019 2017 Senior Notes $ 494,810 $ 494,365 2017 Credit Facility 100,000 114,000 Convertible Notes 188,089 182,292 Equipment financing and mortgages 44,917 39,159 Other indebtedness 8,603 4,660 Total debt 836,419 834,476 Less: Current maturities 320,790 124,054 Long-term debt, net $ 515,629 $ 710,422 As of June 30, 2020 As of December 31, 2019 (in thousands) Outstanding Debt Unamortized Discount and Issuance Costs Debt, as reported Outstanding Debt Unamortized Discount and Issuance Costs Debt, as reported 2017 Senior Notes $ 500,000 $ (5,190) $ 494,810 $ 500,000 $ (5,635) $ 494,365 Convertible Notes 200,000 (11,911) 188,089 200,000 (17,708) 182,292 The unamortized issuance costs related to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus 50 basis points and (3) the LIBOR rate for a one-month interest period plus 100 basis points) plus, (ii) an applicable margin. 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 with cash, shares of its common stock or a combination thereof. As of Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 Cash interest expense: Interest on 2017 Senior Notes $ 8,593 $ 8,594 $ 17,187 $ 17,187 Interest on 2017 Credit Facility 2,338 3,682 4,753 6,327 Interest on Convertible Notes 1,438 1,438 2,875 2,875 Other interest 535 541 1,039 1,116 Total cash interest expense 12,904 14,255 25,854 27,505 Non-cash interest expense:(a) Amortization of discount and debt issuance costs on Convertible Notes 2,933 2,671 5,797 5,279 Amortization of debt issuance costs on 2017 Credit Facility 402 387 804 749 Amortization of debt issuance costs on 2017 Senior Notes 225 209 445 414 Total non-cash interest expense 3,560 3,267 7,046 6,442 Total interest expense $ 16,464 $ 17,522 $ 32,900 $ 33,947 (a)The combination of cash and non-cash interest expense produces effective interest rates that are higher than contractual rates. Accordingly, the effective interest rates for the 2017 Senior Notes, Term Loan B and the Convertible Notes were 7.13%, 6.49% and 9.39%, respectively, for the The following table presents components of lease expense for the three Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 Operating lease expense $ 3,661 $ 3,921 $ 7,428 $ 7,702 Short-term lease expense(a) 23,056 16,486 40,321 33,057 26,717 20,407 47,749 40,759 Less: Sublease income 329 262 658 521 Total lease expense $ 26,388 $ 20,145 $ 47,091 $ 40,238 (a)Short-term lease expense includes all leases with lease terms ranging from less than one month to one As of June 30, As of December 31, (dollars in thousands) Balance Sheet Line Item 2020 2019 Assets ROU assets Other assets $ 38,909 $ 40,156 Total lease assets $ 38,909 $ 40,156 Liabilities Current lease liabilities Accrued expenses and other current liabilities $ 10,255 $ 11,392 Long-term lease liabilities Other long-term liabilities 31,869 31,900 Total lease liabilities $ 42,124 $ 43,292 Weighted-average remaining lease term (in years) 5.0 5.0 Weighted-average discount rate 6.77% 5.96% Six Months Ended June 30, (in thousands) 2020 2019 Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ (7,386) $ (7,622) Non-cash activity: ROU assets obtained in exchange for lease liabilities $ 4,923 $ 6,040 March 31, 2021: Year (in thousands) Operating Leases 2020 (excluding the six months ended June 30, 2020) $ 7,039 2021 10,588 2022 9,294 2023 7,582 2024 5,701 Thereafter 10,053 Total lease payments 50,257 Less: Imputed interest 8,133 Total $ 42,124 (11)Commitments and Contingencies is remote. 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 discretionary appeal The appeal was heard on March 12, 2021, and a decision remains pending with the District Court. Separately, on July 2, 2018, TPBC filed a lawsuit against the Port Authority, as owner of the project, dismiss TPBC’s causes of action. lawsuit and the lawsuit against the individual owners of the Developer continuing. Certain restricted stock unit grants are classified as liabilities because they contain a guaranteed minimum payout. The Company recognized liabilities for these awards totaling approximately $2.5 million and $2.4 million as of March 31, 2021 and December 31, 2020, respectively. The Company paid approximately $0.3 million to settle liability classified awards during each of the three month periods ended March 31, 2021 and 2020. The following table sets forth a summary of the net periodic benefit cost for the three 2020: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 Interest cost $ 758 $ 948 $ 1,516 $ 1,896 Expected return on plan assets (1,006) (1,043) (2,012) (2,086) Amortization of net loss 592 463 1,184 926 Other 231 225 462 450 Net periodic benefit cost $ 575 $ 593 $ 1,150 $ 1,186 2021. As of June 30, 2020 As of December 31, 2019 Fair Value Hierarchy Fair Value Hierarchy (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents(a) $ 182,599 $ — $ — $ 182,599 $ 193,685 $ — $ — $ 193,685 Restricted cash(a) 8,892 — — 8,892 8,416 — — 8,416 Restricted investments(b) — 75,382 — 75,382 — 70,974 — 70,974 Investments in lieu of retainage(c) 98,837 1,208 — 100,045 89,572 1,219 — 90,791 Total $ 290,328 $ 76,590 $ — $ 366,918 $ 291,673 $ 72,193 $ — $ 363,866 (a)Includes money market funds and short-term investments with maturity dates of three months or less when acquired. Convertible Notes was 2020. March 31, 2021. (16)Changes in Equity Three Months Ended June 30, 2020 Accumulated Additional Other Common Paid-in Retained Comprehensive Noncontrolling Total (in thousands) Stock Capital Earnings Loss Interests Equity Balance - March 31, 2020 $ 50,577 $ 1,120,487 $ 331,362 $ (43,128) $ (16,370) $ 1,442,928 Net income — — 18,709 — 12,150 30,859 Other comprehensive income — — — 2,531 854 3,385 Share-based compensation — 4,185 — — — 4,185 Issuance of common stock, net 194 — — — — 194 Distributions to noncontrolling interests — — — — (17,410) (17,410) Balance - June 30, 2020 $ 50,771 $ 1,124,672 $ 350,071 $ (40,597) $ (20,776) $ 1,464,141 Six Months Ended June 30, 2020 Accumulated Additional Other Common Paid-in Retained Comprehensive Noncontrolling Total (in thousands) Stock Capital Earnings Loss Interests Equity Balance - December 31, 2019 $ 50,279 $ 1,117,972 $ 313,991 $ (42,100) $ (9,617) $ 1,430,525 Net income — — 36,080 — 20,917 56,997 Other comprehensive income (loss) — — — 1,503 (1,166) 337 Share-based compensation — 7,692 — — — 7,692 Issuance of common stock, net 492 (992) — — — (500) Distributions to noncontrolling interests — — — — (30,910) (30,910) Balance - June 30, 2020 $ 50,771 $ 1,124,672 $ 350,071 $ (40,597) $ (20,776) $ 1,464,141 Three Months Ended June 30, 2019 Accumulated Additional Other Common Paid-in Retained Comprehensive Noncontrolling Total (in thousands) Stock Capital Earnings Loss Interests Equity Balance - March 31, 2019 $ 50,180 $ 1,105,184 $ 701,325 $ (44,200) $ (17,310) $ 1,795,179 Net income (loss) — — (320,530) — 5,091 (315,439) Other comprehensive income — — — 1,670 157 1,827 Share-based compensation — 5,312 — — — 5,312 Issuance of common stock, net 99 — — — — 99 Contributions from noncontrolling interests — — — — 2,581 2,581 Balance - June 30, 2019 $ 50,279 $ 1,110,496 $ 380,795 $ (42,530) $ (9,481) $ 1,489,559 Six Months Ended June 30, 2019 Accumulated Additional Other Common Paid-in Retained Comprehensive Noncontrolling Total (in thousands) Stock Capital Earnings Loss Interests Equity Balance - December 31, 2018 $ 50,026 $ 1,102,919 $ 701,681 $ (45,449) $ (21,288) $ 1,787,889 Net income (loss) — — (320,886) — 10,169 (310,717) Other comprehensive income — — — 2,919 259 3,178 Share-based compensation — 10,095 — — — 10,095 Issuance of common stock, net 253 (2,518) — — — (2,265) Contributions from noncontrolling interests — — — — 5,379 5,379 Distributions to noncontrolling interests — — — — (4,000) (4,000) Balance - June 30, 2019 $ 50,279 $ 1,110,496 $ 380,795 $ (42,530) $ (9,481) $ 1,489,559 Three Months Ended Three Months Ended June 30, 2020 June 30, 2019 (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 $ 592 $ (168) $ 424 $ 464 $ (133) $ 331 Foreign currency translation adjustments 1,973 (318) 1,655 1,072 (262) 810 Unrealized gain in fair value of investments 1,602 (296) 1,306 867 (181) 686 Total other comprehensive income 4,167 (782) 3,385 2,403 (576) 1,827 Less: Other comprehensive income attributable to noncontrolling interests(a) 854 — 854 157 — 157 Total other comprehensive income attributable to Tutor Perini Corporation $ 3,313 $ (782) $ 2,531 $ 2,246 $ (576) $ 1,670 (a)The only component of other comprehensive income (loss) attributable to noncontrolling interests is foreign currency translation. Six Months Ended Six Months Ended June 30, 2020 June 30, 2019 (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 $ 1,183 $ (336) $ 847 $ 926 $ (265) $ 661 Foreign currency translation adjustment (2,954) 596 (2,358) 1,551 (393) 1,158 Unrealized gain in fair value of investments 2,359 (511) 1,848 1,725 (366) 1,359 Total other comprehensive income 588 (251) 337 4,202 (1,024) 3,178 Less: Other comprehensive income (loss) attributable to noncontrolling interests(a) (1,166) — (1,166) 259 — 259 Total other comprehensive income attributable to Tutor Perini Corporation $ 1,754 $ (251) $ 1,503 $ 3,943 $ (1,024) $ 2,919 The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation during the three Three Months Ended June 30, 2020 Defined Unrealized Accumulated Benefit Foreign Gain (Loss) in Other Pension Currency Fair Value of Comprehensive (in thousands) Plan Translation Investments, Net Income (Loss) Attributable to Tutor Perini Corporation: Balance as of March 31, 2020 $ (37,403) $ (7,364) $ 1,639 $ (43,128) Other comprehensive income before reclassifications — 801 1,335 2,136 Amounts reclassified from AOCI 424 — (29) 395 Total other comprehensive income 424 801 1,306 2,531 Balance as of June 30, 2020 $ (36,979) $ (6,563) $ 2,945 $ (40,597) Six Months Ended June 30, 2020 Defined Unrealized Accumulated Benefit Foreign Gain (Loss) in Other Pension Currency Fair Value of Comprehensive (in thousands) Plan Translation Investments, Net Income (Loss) Attributable to Tutor Perini Corporation: Balance as of December 31, 2019 $ (37,826) $ (5,371) $ 1,097 $ (42,100) Other comprehensive income (loss) before reclassifications — (1,192) 1,881 689 Amounts reclassified from AOCI 847 — (33) 814 Total other comprehensive income (loss) 847 (1,192) 1,848 1,503 Balance as of June 30, 2020 $ (36,979) $ (6,563) $ 2,945 $ (40,597) The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation during the three Three Months Ended June 30, 2019 Defined Unrealized Accumulated Benefit Foreign Gain (Loss) in Other Pension Currency Fair Value of Comprehensive (in thousands) Plan Translation Investments, Net Income (Loss) Attributable to Tutor Perini Corporation: Balance as of March 31, 2019 $ (38,340) $ (6,069) $ 209 $ (44,200) Other comprehensive income before reclassifications — 653 714 1,367 Amounts reclassified from AOCI 331 — (28) 303 Total other comprehensive income 331 653 686 1,670 Balance as of June 30, 2019 $ (38,009) $ (5,416) $ 895 $ (42,530) Six Months Ended June 30, 2019 Defined Unrealized Accumulated Benefit Foreign Gain (Loss) in Other Pension Currency Fair Value of Comprehensive (in thousands) Plan Translation Investments, Net Income (Loss) Attributable to Tutor Perini Corporation: Balance as of December 31, 2018 $ (38,670) $ (6,315) $ (464) $ (45,449) Other comprehensive income before reclassifications — 899 1,379 2,278 Amounts reclassified from AOCI 661 — (20) 641 Total other comprehensive income 661 899 1,359 2,919 Balance as of June 30, 2019 $ (38,009) $ (5,416) $ 895 $ (42,530) The significant items reclassified out of AOCI and the corresponding location and impact on the Consolidated Statements of Income during the three months ended March 31, 2021 and 2020 were as follows: The following tables set forth certain reportable segment information relating to the Company’s operations for the three Reportable Segments Specialty Consolidated (in thousands) Civil Building Contractors Total Corporate Total Three Months Ended June 30, 2020 Total revenue $ 644,685 $ 490,317 $ 234,497 $ 1,369,499 $ — $ 1,369,499 Elimination of intersegment revenue (75,709) (17,296) (67) (93,072) — (93,072) Revenue from external customers $ 568,976 $ 473,021 $ 234,430 $ 1,276,427 $ — $ 1,276,427 Income (loss) from construction operations $ 65,398 $ 17,789 $ (11,388) $ 71,799 (a) $ (14,103) (b) $ 57,696 Capital expenditures $ 18,951 $ 186 $ 255 $ 19,392 $ 301 $ 19,693 Depreciation and amortization(c) $ 21,775 $ 428 $ 995 $ 23,198 $ 2,767 $ 25,965 Three Months Ended June 30, 2019 Total revenue $ 541,117 $ 433,559 $ 223,299 $ 1,197,975 $ — $ 1,197,975 Elimination of intersegment revenue (67,459) (5,241) — (72,700) — (72,700) Revenue from external customers $ 473,658 $ 428,318 $ 223,299 $ 1,125,275 $ — $ 1,125,275 Income (loss) from construction operations $ (164,472) $ (3,810) $ (159,795) $ (328,077) (d) $ (13,640) (b) $ (341,717) Capital expenditures $ 24,439 $ 150 $ 110 $ 24,699 $ 235 $ 24,934 Depreciation and amortization(c) $ 10,285 $ 497 $ 1,061 $ 11,843 $ 2,754 $ 14,597 (a) Reportable Segments Specialty Consolidated (in thousands) Civil Building Contractors Total Corporate Total Six Months Ended June 30, 2020 Total revenue $ 1,224,771 $ 995,400 $ 516,949 $ 2,737,120 $ — $ 2,737,120 Elimination of intersegment revenue (169,166) (40,615) (183) (209,964) — (209,964) Revenue from external customers $ 1,055,605 $ 954,785 $ 516,766 $ 2,527,156 $ — $ 2,527,156 Income (loss) from construction operations $ 111,519 $ 21,305 $ (3,109) $ 129,715 (a) $ (24,792) (b) $ 104,923 Capital expenditures $ 30,143 $ 198 $ 728 $ 31,069 $ 317 $ 31,386 Depreciation and amortization(c) $ 40,391 $ 855 $ 1,988 $ 43,234 $ 5,542 $ 48,776 Six Months Ended June 30, 2019 Total revenue $ 924,739 $ 869,802 $ 414,826 $ 2,209,367 $ — $ 2,209,367 Elimination of intersegment revenue (117,587) (8,018) — (125,605) — (125,605) Revenue from external customers $ 807,152 $ 861,784 $ 414,826 $ 2,083,762 $ — $ 2,083,762 Income (loss) from construction operations $ (122,727) $ (677) $ (167,283) $ (290,687) (d) $ (28,117) (b) $ (318,804) Capital expenditures $ 38,451 $ 205 $ 233 $ 38,889 $ 457 $ 39,346 Depreciation and amortization(c) $ 19,655 $ 1,000 $ 2,125 $ 22,780 $ 5,534 $ 28,314 A reconciliation of segment results to the consolidated income Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 Income (loss) from construction operations $ 57,696 $ (341,717) $ 104,923 $ (318,804) Other income (expense) (797) 900 (316) 1,322 Interest expense (16,464) (17,522) (32,900) (33,947) Income (loss) before income taxes $ 40,435 $ (358,339) $ 71,707 $ (351,429) Total assets by segment were as As of As of (in thousands) June 30, 2020 December 31, 2019 Civil $ 3,084,528 $ 2,791,402 Building 1,083,421 995,298 Specialty Contractors 664,161 635,180 Corporate and other(a) (68,507) 63,897 Total assets $ 4,763,603 $ 4,485,777 (a)Consists principally of cash, equipment, tax-related assets and insurance-related assets, offset by the elimination of assets related to intersegment revenue. TUTOR PERINI CORPORATION AND SUBSIDIARIES operations. 2021. Backlog at New Revenue Backlog at (in millions) December 31, 2019 Awards(a) Recognized June 30, 2020(b) Civil $ 6,037.2 $ 555.3 $ (1,055.6) $ 5,536.9 Building 2,790.3 443.0 (954.8) 2,278.5 Specialty Contractors 2,393.6 306.4 (516.8) 2,183.2 Total $ 11,221.1 $ 1,304.7 $ (2,527.2) $ 9,998.6 (a)New awards consist of the original contract price of projects added to backlog plus or minus subsequent changes to the estimated total contract price of existing contracts. Reconciliation of Non-GAAP Financial Measures Specialty Consolidated (in millions) Civil Building Contractors Corporate Total Three Months Ended June 30, 2019 Income (loss) from construction operations, as reported $ (164.5) $ (3.8) $ (159.8) $ (13.6) $ (341.7) Plus: Goodwill impairment charge 210.2 13.5 156.2 — 379.9 Adjusted income (loss) from construction operations $ 45.7 $ 9.7 $ (3.6) $ (13.6) $ 38.2 Six Months Ended June 30, 2019 Income (loss) from construction operations, as reported $ (122.7) $ (0.7) $ (167.3) $ (28.1) $ (318.8) Plus: Goodwill impairment charge 210.2 13.5 156.2 — 379.9 Adjusted income (loss) from construction operations $ 87.5 $ 12.8 $ (11.1) $ (28.1) $ 61.1 Three Months Ended Six Months Ended June 30, June 30, (in millions, except per common share amounts and percentages) 2020 2019 2020 2019 Net income (loss) attributable to Tutor Perini Corporation, as reported $ 18.7 $ (320.5) $ 36.1 $ (320.9) Plus: Goodwill impairment charge — 379.9 — 379.9 Less: Tax benefit provided on goodwill impairment charge — (50.4) — (50.4) Adjusted net income attributable to Tutor Perini Corporation $ 18.7 $ 9.0 $ 36.1 $ 8.6 Diluted earnings (loss) per common share, as reported $ 0.37 $ (6.38) $ 0.71 $ (6.40) Plus: Goodwill impairment charge — 7.56 — 7.57 Less: Tax benefit provided on goodwill impairment charge — (1.00) — (1.00) Adjusted diluted earnings per common share $ 0.37 $ 0.18 $ 0.71 $ 0.17 Effective income tax rate, as reported 23.7 % (12.0) % 20.5 % (11.6) % Tax effect of goodwill impairment charge — % 46.7 % — % 45.6 % Adjusted effective income tax rate 23.7 % 34.7 % 20.5 % 34.0 % Results of Segment Operations Three Months Ended June 30, Six Months Ended June 30, (in millions) 2020 2019 2020 2019 Revenue $ 569.0 $ 473.7 $ 1,055.6 $ 807.2 Income (loss) from construction operations, as reported 65.4 (164.5) 111.5 (122.7) Plus: Goodwill impairment charge — 210.2 — 210.2 Adjusted income from construction operations $ 65.4 $ 45.7 $ 111.5 $ 87.5 operations. Three Months Ended June 30, Six Months Ended June 30, (in millions) 2020 2019 2020 2019 Revenue $ 473.0 $ 428.3 $ 954.8 $ 861.8 Income (loss) from construction operations, as reported 17.8 (3.8) 21.3 (0.7) Plus: Goodwill impairment charge — 13.5 — 13.5 Adjusted income from construction operations $ 17.8 $ 9.7 $ 21.3 $ 12.8 COVID-19 pandemic, demand for our building construction services is expected to Three Months Ended June 30, Six Months Ended June 30, (in millions) 2020 2019 2020 2019 Revenue $ 234.4 $ 223.3 $ 516.8 $ 414.8 Loss from construction operations, as reported (11.4) (159.8) (3.1) (167.3) Plus: Goodwill impairment charge — 156.2 — 156.2 Adjusted loss from construction operations $ (11.4) $ (3.6) $ (3.1) $ (11.1) operations. Other Income, Three Months Ended June 30, Six Months Ended June 30, (in millions) 2020 2019 2020 2019 Other income (expense) $ (0.8) $ 0.9 $ (0.3) $ 1.3 Interest expense (16.5) (17.5) (32.9) (33.9) Income tax (expense) benefit (9.6) 42.9 (14.7) 40.7 Condensed Consolidated Financial Statements). capital for the first prior year, partially offset by a current-year decrease in accounts receivable compared to an increase in the prior year. $64.8 million, partially offset by $13.5 million of cash distributions to noncontrolling interests. 2020. Trailing Four Fiscal Quarters Ended March 31, 2021 Actual Required As of Agreement. Debt 2020. 2020. Item 1A.Risk Factors Item 4.Mine Safety Disclosures Exhibits Description 31.1 31.2 32.1 32.2 95 101.INS XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document. 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. 101.LAB XBRL Taxonomy Extension Label Linkbase Document. 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. 104 The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended SIGNATURE Tutor Perini Corporation Dated: By: /s/ Gary G. Smalley Gary G. Smalley Executive Vice President and Chief Financial Officer 10-Q(Mark One)☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2020or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193410-Q☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ For the transition period from ___________ to ___________ For the transition period from ___________ to ___________MASSACHUSETTS04-1717070
Incorporation or Organization)(I.R.S. Employer Identification No.)15901 OLDEN STREET, SYLMAR, CALIFORNIA91342-1093(I.R.S. Employer Identification No.) (Zip Code) Large accelerated filer ☒Accelerated filer ☐☒ Non-accelerated filer ☐Smaller reporting company ☐ Emerging growth company ☐July 22, 2020April 29, 2021 was 50,771,288.OFOF CONTENTSOPERATIONSThree Months Ended
March 31,(in thousands, except per common share amounts) 2021 2020 REVENUE $ 1,207,595 $ 1,250,729 COST OF OPERATIONS (1,097,140) (1,139,649) GROSS PROFIT 110,455 111,080 General and administrative expenses (60,751) (63,853) INCOME FROM CONSTRUCTION OPERATIONS INCOME FROM CONSTRUCTION OPERATIONS 49,704 47,227 Other income, net Other income, net 175 481 Interest expense (17,810) (16,436) INCOME BEFORE INCOME TAXES INCOME BEFORE INCOME TAXES 32,069 31,272 Income tax expense Income tax expense (6,964) (5,134) NET INCOME NET INCOME 25,105 26,138 LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 9,071 8,767 NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 16,034 $ 17,371 BASIC EARNINGS PER COMMON SHARE BASIC EARNINGS PER COMMON SHARE $ 0.31 $ 0.35 DILUTED EARNINGS PER COMMON SHARE DILUTED EARNINGS PER COMMON SHARE $ 0.31 $ 0.34 WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: BASIC 50,913 50,338 DILUTED 51,348 50,836 (LOSS)Three Months Ended
March 31,(in thousands) 2021 2020 NET INCOME $ 25,105 $ 26,138 OTHER COMPREHENSIVE LOSS, NET OF TAX: Defined benefit pension plan adjustments 492 423 Foreign currency translation adjustments 372 (4,013) Unrealized (loss) gain in fair value of investments (1,183) 542 TOTAL OTHER COMPREHENSIVE LOSS, NET OF TAX (319) (3,048) COMPREHENSIVE INCOME 24,786 23,090 LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 9,367 6,747 COMPREHENSIVE INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 15,419 $ 16,343 (in thousands, except share and per share amounts) As of March 31,
2021As of December 31,
2020ASSETS CURRENT ASSETS: Cash and cash equivalents ($91,768 and $105,735 related to variable interest entities (“VIEs”)) Cash and cash equivalents ($91,768 and $105,735 related to variable interest entities (“VIEs”)) $ 318,720 $ 374,289 Restricted cash 82,086 77,563 Restricted investments 74,062 78,912 Accounts receivable ($78,924 and $86,012 related to VIEs) Accounts receivable ($78,924 and $86,012 related to VIEs) 1,368,892 1,415,063 Retainage receivable ($129,050 and $122,335 related to VIEs) Retainage receivable ($129,050 and $122,335 related to VIEs) 661,382 648,441 Costs and estimated earnings in excess of billings ($55,315 and $39,846 related to VIEs) Costs and estimated earnings in excess of billings ($55,315 and $39,846 related to VIEs) 1,255,992 1,236,734 Other current assets ($49,182 and $51,746 related to VIEs) Other current assets ($49,182 and $51,746 related to VIEs) 236,943 249,455 Total current assets 3,998,077 4,080,457 478,338 489,217 GOODWILL 205,143 205,143 INTANGIBLE ASSETS, NET 116,472 123,115 OTHER ASSETS 147,977 147,685 TOTAL ASSETS $ 4,946,007 $ 5,045,617 LIABILITIES AND EQUITY CURRENT LIABILITIES: Current maturities of long-term debt, net of unamortized discount and debt issuance costs totaling $941 and $2,040 Current maturities of long-term debt, net of unamortized discount and debt issuance costs totaling $941 and $2,040 $ 101,020 $ 100,188 Accounts payable ($81,694 and $116,461 related to VIEs) Accounts payable ($81,694 and $116,461 related to VIEs) 716,326 794,611 Retainage payable ($28,027 and $26,439 related to VIEs) Retainage payable ($28,027 and $26,439 related to VIEs) 318,692 315,135 Billings in excess of costs and estimated earnings ($332,704 and $362,427 related to VIEs) Billings in excess of costs and estimated earnings ($332,704 and $362,427 related to VIEs) 818,757 839,222 Accrued expenses and other current liabilities ($6,838 and $9,595 related to VIEs) Accrued expenses and other current liabilities ($6,838 and $9,595 related to VIEs) 176,264 215,207 Total current liabilities 2,131,059 2,264,363 924,651 925,277 DEFERRED INCOME TAXES 82,950 82,966 OTHER LONG-TERM LIABILITIES 235,266 230,066 TOTAL LIABILITIES 3,373,926 3,502,672 COMMITMENTS AND CONTINGENCIES (NOTE 11) 0 0 EQUITY Stockholders' equity: Preferred stock - authorized 1,000,000 shares ($1 par value), NaN issued 0 0 Common stock - authorized 112,500,000 shares ($1 par value), issued and outstanding 50,937,607 and 50,827,205 shares Common stock - authorized 112,500,000 shares ($1 par value), issued and outstanding 50,937,607 and 50,827,205 shares 50,938 50,827 Additional paid-in capital 1,127,624 1,127,385 Retained earnings 438,419 422,385 Accumulated other comprehensive loss (47,356) (46,741) Total stockholders' equity 1,569,625 1,553,856 Noncontrolling interests 2,456 (10,911) TOTAL EQUITY 1,572,081 1,542,945 TOTAL LIABILITIES AND EQUITY $ 4,946,007 $ 5,045,617 Three Months Ended March 31, (in thousands) 2021 2020 Cash Flows from Operating Activities: Net income Net income $ 25,105 $ 26,138 Adjustments to reconcile net income to net cash used in operating activities: Adjustments to reconcile net income to net cash used in operating activities: Depreciation 20,231 16,999 Amortization of intangible assets 6,643 5,812 Share-based compensation expense 2,448 4,244 Change in debt discounts and deferred debt issuance costs Change in debt discounts and deferred debt issuance costs 2,017 3,486 Deferred income taxes 95 2,474 (Gain) loss on sale of property and equipment (Gain) loss on sale of property and equipment 20 (461) Changes in other components of working capital (108,385) (90,884) Other long-term liabilities 5,027 1,061 Other, net 95 (2,876) NET CASH USED IN OPERATING ACTIVITIES NET CASH USED IN OPERATING ACTIVITIES (46,704) (34,007) Cash Flows from Investing Activities: Acquisition of property and equipment (9,835) (11,693) Proceeds from sale of property and equipment 457 583 Investments in securities Investments in securities (2,910) (9,696) Proceeds from maturities and sales of investments in securities 6,870 6,211 NET CASH USED IN INVESTING ACTIVITIES (5,418) (14,595) Cash Flows from Financing Activities: Proceeds from debt 74,251 348,688 Repayment of debt (75,939) (283,915) Cash payments related to share-based compensation (1,236) (694) Distributions paid to noncontrolling interests 0 (13,500) Contributions from noncontrolling interests 4,000 0 NET CASH PROVIDED BY FINANCING ACTIVITIES NET CASH PROVIDED BY FINANCING ACTIVITIES 1,076 50,579 Net increase (decrease) in cash, cash equivalents and restricted cash (51,046) 1,977 Cash, cash equivalents and restricted cash at beginning of period 451,852 202,101 Cash, cash equivalents and restricted cash at end of period $ 400,806 $ 204,078 2019. 2020. The results of operations for the three and six months ended June 30, 2020March 31, 2021 may not be indicative of the results that will be achieved for the full year ending December 31, 2020.June 30, 2020March 31, 2021 and its consolidated statements of operationsincome and cash flows for the interim periods presented. Intercompany balances and transactions have been eliminated.June 2016,December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, 2019-12,Measurement of Credit Losses on Financial Instruments, and issued subsequent amendments to the initial guidance within ASU 2019-04 and ASU 2019-05 (collectively, “ASU 2016-13”). The amendments in ASU 2016-13 replace the incurred loss impairment methodology with the current expected credit loss model, which requires consideration of a broader range of reasonable and supportable information to estimate credit losses. The Company adopted this ASU effective January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position, results of operations or cash flows.In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide temporary optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions to ease the potential accounting and financial reporting burden associated with transitioning away from reference rates that are expected to be discontinued, including the London Interbank Offered Rate (“LIBOR”). ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022. The adoption of the new standard has not had and is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. The following new accounting pronouncement requires implementation in future periods.In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (“(“ASU 2019-12”), modifying Accounting Standards Codification (“ASC”) 740, Income Taxes (“ASC 740”). The amendments in ASU 2019-12, among other things, remove certain exceptions to the general principles in ASC 740 and seek more consistent application by clarifying and amending the existing guidance. The Company adopted this ASU effective January 1, 2021. The adoption of ASU 2019-12 is effective for interim and annual reporting periods beginning after December 15, 2020. The Company is currently evaluating the new standard, which isdid not expected to have a material impact on the Company’s financial position, results of operations or cash flows.UNAUDITEDdepictdepicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors for the three and six months ended June 30, 2020March 31, 2021 and 2019.Three Months Ended
March 31,(in thousands) 2021 2020 Civil segment revenue by end market: Mass transit (includes certain transportation and tunneling projects) Mass transit (includes certain transportation and tunneling projects) $ 308,875 $ 297,143 Military defense facilities Military defense facilities 49,536 23,610 Bridges 46,167 52,184 Water Water 26,810 23,744 Highways 11,326 32,582 Other 32,861 57,366 Total Civil segment revenue $ 475,575 $ 486,629 Three Months Ended
March 31,(in thousands) 2021 2020 Building segment revenue by end market: Commercial and industrial facilities $ 130,052 $ 133,049 Hospitality and gaming 100,567 118,987 Municipal and government 71,909 69,502 Education facilities Education facilities 38,317 31,622 Mass transit (includes transportation projects) 26,535 57,847 Mixed Use Mixed Use 19,549 9,972 Health care facilities 10,409 35,889 Other 9,895 24,896 Total Building segment revenue $ 407,233 $ 481,764 Three Months Ended
March 31,(in thousands) 2021 2020 Specialty Contractors segment revenue by end market: Mass transit (includes certain transportation and tunneling projects) $ 181,163 $ 148,671 Multi-unit residential 42,795 26,493 Commercial and industrial facilities 38,749 53,505 Water 21,154 9,838 Education facilities 13,356 16,557 Mixed use 9,539 13,802 Other 18,031 13,470 Total Specialty Contractors segment revenue $ 324,787 $ 282,336 UNAUDITEDThree Months Ended
March 31, 2021Three Months Ended
March 31, 2020(in thousands) Civil Building Specialty
ContractorsTotal Civil Building Specialty
ContractorsTotal Revenue by customer type: State and local agencies $ 390,502 $ 76,581 $ 142,924 $ 610,007 $ 396,045 $ 146,016 $ 132,873 $ 674,934 Federal agencies 51,633 50,361 21,237 123,231 36,661 31,973 9,756 78,390 Private owners 33,440 280,291 160,626 474,357 53,923 303,775 139,707 497,405 Total revenue $ 475,575 $ 407,233 $ 324,787 $ 1,207,595 $ 486,629 $ 481,764 $ 282,336 $ 1,250,729 Three Months Ended
March 31, 2021Three Months Ended
March 31, 2020(in thousands) Civil Building Specialty
ContractorsTotal Civil Building Specialty
ContractorsTotal Revenue by contract type: Fixed price $ 419,156 $ 84,449 $ 293,468 $ 797,073 $ 408,971 $ 105,598 $ 248,516 $ 763,085 Guaranteed maximum price 1,270 270,454 1,130 272,854 308 237,773 2,549 240,630 Unit price 52,733 111 28,297 81,141 71,358 534 21,151 93,043 Cost plus fee and other 2,416 52,219 1,892 56,527 5,992 137,859 10,120 153,971 Total revenue $ 475,575 $ 407,233 $ 324,787 $ 1,207,595 $ 486,629 $ 481,764 $ 282,336 $ 1,250,729 three- and six-monththree months ended March 31, 2021 related to performance obligations satisfied (or partially satisfied) in prior periods by $19.3 million. Revenue recognized during the three months ended June 30,March 31, 2020 related to performance obligations satisfied (or partially satisfied) in prior periods by $19.8 million and $35.6 million, respectively.Likewise, revenue was negatively impacted during the three- and six-month periods ended June 30, 2019 related to performance obligations satisfied (or partially satisfied) in prior periods by $14.6 million and $27.7 million, respectively.June 30,March 31, 2021, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $4.8 billion, $1.5 billion and $1.7 billion for the Civil, Building and Specialty Contractors segments, respectively. As of March 31, 2020, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $5.1$5.2 billion, $1.7 billion and $2.2 billion for the Civil, Building and Specialty Contractors segments, respectively. As of June 30, 2019, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $5.5 billion, $1.7$1.9 billion and $2.2 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.UNAUDITED(in thousands) As of March 31,
2021As of December 31,
2020Retainage receivable $ 661,382 $ 648,441 Costs and estimated earnings in excess of billings: Claims 806,534 752,783 Unapproved change orders 369,411 415,489 Other unbilled costs and profits 80,047 68,462 Total costs and estimated earnings in excess of billings 1,255,992 1,236,734 Capitalized contract costs 73,898 74,452 Total contract assets $ 1,991,272 $ 1,959,627 (“ (“ASC 606”), but a portion of the revenue recorded cannot be billed currently due to the billing terms defined in the contract, or (2) costs are incurred related to certain claims and unapproved change orders. Claims occur when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders occur when a change in the scope of work results in additional work being performed before the parties have agreed on the corresponding change in the contract price. The Company routinely estimates recovery related to claims and unapproved change orders as a form of variable consideration at the most likely amount it expects to receive and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Claims and unapproved change orders are billable upon the agreement and resolution between the contractual parties and after the execution of contractual amendments. Increases in claims and unapproved change orders typically result from costs being incurred against existing or new positions; decreases normally result from resolutions and subsequent billings. As discussed in Note 11, the resolution of these claims and unapproved change orders may require litigation or other forms of dispute resolution proceedings. Other unbilled costs and profits are billable in accordance with the billing terms of each of the existing contractual arrangements and, as such, the timing of contract billing cycles can cause fluctuations in the balance of unbilled costs and profits. Ultimate resolution of other unbilled costs and profits typically involves incremental progress toward contractual requirements or milestones.and six months ended June 30,March 31, 2021 and 2020, $12.5$11.8 million and $22.8$10.3 million, respectively, of previously capitalized contract costs were amortized and recognized as expense on the related contracts.During the three and six months ended June 30, 2019, $8.6 million and $14.3 million, respectively, of previously capitalized contract costs were amortized and recognized as expense on the related contracts.(in thousands) As of March 31,
2021As of December 31,
2020Retainage payable $ 318,692 $ 315,135 Billings in excess of costs and estimated earnings 818,757 839,222 Total contract liabilities $ 1,137,449 $ 1,154,357 UNAUDITEDand six months ended June 30,March 31, 2021 and 2020 and included in the opening billings in excess of costs and estimated earnings balances for each period totaled $470.8$306.9 million and $565.9$429.5 million, respectively.Revenue recognized during the three and six months ended June 30, 2019 and included in the opening billings in excess of costs and estimated earnings balances for each period totaled $289.4 million and $391.9 million, respectively.(in thousands) As of March 31,
2021As of December 31,
2020Cash and cash equivalents available for general corporate purposes $ 176,763 $ 210,841 Joint venture cash and cash equivalents 141,957 163,448 Cash and cash equivalents 318,720 374,289 Restricted cash 82,086 77,563 Total cash, cash equivalents and restricted cash $ 400,806 $ 451,852 Amounts included inareconsists primarily of $69.9 million held to repay the outstanding principal balance of Convertible Notes described in more detail in Note 9. Restricted cash also includes amounts held as collateral to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED (EPS)EPSearnings per common share (“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 9. In accordance with ASC 260, Earnings Per Share, 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. See Note 9 for further discussion of the Convertible Notes. The Company calculates the effect of the potentially dilutive restricted stock units and stock options using the treasury stock method.For the three and six months ended June 30, 2019, all outstanding restricted stock units and stock options were excluded from the calculationTable of weighted-average diluted shares outstanding due to the net loss for the period.ContentsThree Months Ended March 31, (in thousands, except per common share data) 2021 2020 Net income attributable to Tutor Perini Corporation $ 16,034 $ 17,371 Weighted-average common shares outstanding, basic 50,913 50,338 Effect of dilutive restricted stock units and stock options 435 498 Weighted-average common shares outstanding, diluted 51,348 50,836 Net income attributable to Tutor Perini Corporation per common share: Basic $ 0.31 $ 0.35 Diluted $ 0.31 $ 0.34 Anti-dilutive securities not included above 1,640 2,209 23.7% and 20.5%21.7% for the three and six months ended June 30, 2020, respectively.March 31, 2021 and 16.4% for the three months ended March 31, 2020. The effective income tax rate for the six2021 period was higher than the 21% federal statutory rate primarily due to state income taxes (net of the federal tax benefit) and nondeductible expenses, partially offset by earnings attributable to noncontrolling interests for which income taxes are not the responsibility of the Company.June 30,March 31, 2020, the effective income tax rate was lower than the 21% federal statutory rate primarily reflectsdue to the favorable impact oftax rate differential realized on the 2019 net operating loss (“NOL”NOL”), carryback and also to earnings attributable to noncontrolling interests for which is allowed to be carried back up to five years as a resultincome taxes are not the responsibility of the Company. Under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”Act”), enacted on March 27, 2020. Under2020, the CARES Act, the Company’s NOL generated in 2019 may be carried back up to five years, whereas under previous rules NOLs were only allowed to be carried forward. This allowed the Company to realize the benefit of the tax rate differential by carrying back the NOL to tax years when the federal statutory tax rate was 35% rather than the current rate of 21%, consequently generating a larger tax benefit from the NOL duethan that recognized prior to the enactment of the CARES Act. The favorable tax rate impact resulting from the enactment of the CARES Act was partially offset by the unfavorable impact of the vesting of restricted stock unitsunit vesting, for which a large portion of the share-based compensation expense recognized in prior periods willwas not be deductible for income tax purposes. For the three and six months ended June 30, 2020, the effective income tax rates differed from the federal statutory rate alsopurposes, as a result ofwell as state income taxes with the increases partially offset by earnings attributable to noncontrolling interests for which income taxes are not the responsibility(net of the Company.For the three and six months ended June 30, 2019, the Company recognized incomefederal tax benefits of $42.9 million and $40.7 million, with effective income tax rates of 12.0% and 11.6%, respectively. benefit).The Company’s provisions for income taxes and effective tax rates for the three and six months ended June 30, 2019 were significantly impacted by the goodwill impairment charge of $379.9 million. Of the total goodwill impairment charge, approximately $209.5 million pertained to goodwill that was not tax deductible and yielded permanent differences between book income and taxable income. The Company recognized a tax benefit totaling $50.4 million as a result of the impairment charge. The adjusted effective income tax rates, which exclude the tax benefit resulting from the goodwill impairment charge, were 34.7% and 34.0% for the three and six months ended June 30, 2019, respectively, and primarily reflected the unfavorable impact of expired stock options for which the share-based compensation expense recognized in prior periods will not be deductible for income taxes. For the three and six months ended June 30, 2019, the adjusted effective income tax rates were higherTUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDthan the federal statutory rate also as a result of state income taxes, with the increases partially offset by earnings attributable to noncontrolling interests for which income taxes are not the responsibility of the Company.June 30, 2020:(in thousands) Civil Building Specialty
ContractorsTotal Gross goodwill as of December 31, 2020 $ 492,074 $ 424,724 $ 156,193 $ 1,072,991 Accumulated impairment as of December 31, 2020 (286,931) (424,724) (156,193) (867,848) Goodwill as of December 31, 2020 205,143 0 0 205,143 Current year activity 0 0 0 0 Goodwill as of March 31, 2021 $ 205,143 $ 0 $ 0 $ 205,143 unitsunit for impairment annually on October 1, or more frequently if events or circumstances indicate it is more likely than not that the fair value of athe reporting unit is less than its carrying amount. The Company performed its annual impairment test in the fourth quarter of 20192020 using a weighted-average of an income and a market approach. These approaches utilize various valuation assumptions, and small changes to the assumptions could have a significant impact on the concluded fair value. Based on this assessment, the Company concluded goodwill was 0t impaired since the estimated fair value of the Civil reporting unit exceeded its carrying value. In addition, the CompanyDuring the first half of 2020, the novel coronavirus (“COVID-19”) pandemic, as well as the actions taken to contain and mitigate its public health effects, caused disruptions in domestic and global economies and financial markets. The vast majority of the Company’s projects, especially in its Civil reporting unit, have been designated as essential business, which allows the Company to continue its work on those projects. As such, the Civil reporting unit’s operations were not materially impacted during the three and six months ended June 30, 2020. However, due to the fluidity of the pandemic, uncertainties as to its scope and duration, and ongoing changes in the way that governments, businesses and individuals react and respond to the COVID-19 pandemic, the Company is unable at this time to accurately predict the pandemic’s future impact on the Company’s business, financial condition or performance. Among other things, governments could prohibit the continuation of certain projects that to date have been designated as “essential” or could impose health, safety and other operational requirements on such projects that could result in delays to or suspensions of such projects. In addition, employees and contractors working on such projects could be unable or unwilling to continue working on them, perhaps for extended periods. The COVID-19 pandemic also could negatively affect the ability of counterparties or joint venture partners to make required payments on a timely basis or at all.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDAs of March 31, 2021 Weighted Average Amortization Period (in thousands) Cost Accumulated
AmortizationAccumulated Impairment Charge Carrying Value Trade names (non-amortizable) $ 117,600 $ — $ (67,190) $ 50,410 Indefinite Trade names (amortizable) 74,350 (24,377) (23,232) 26,741 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (22,366) (16,645) 789 12 years Construction contract backlog 149,290 (110,758) — 38,532 3 years Total $ 387,040 $ (157,501) $ (113,067) $ 116,472 As of December 31, 2020 Weighted Average Amortization Period (in thousands) Cost Accumulated
AmortizationAccumulated Impairment Charge Carrying Value Trade names (non-amortizable) $ 117,600 $ — $ (67,190) $ 50,410 Indefinite Trade names (amortizable) 74,350 (23,754) (23,232) 27,364 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (22,103) (16,645) 1,052 12 years Construction contract backlog 149,290 (105,001) — 44,289 3 years Total $ 387,040 $ (150,858) $ (113,067) $ 123,115 threequarters ended March 31, 2021 and six months ended June 30, 2020 was $8.8$6.6 million and $14.6$5.8 million, respectively. Amortization expense for the three and six months ended June 30, 2019 was $0.9 million and $1.8 million, respectively. As of June 30, 2020,March 31, 2021, amortization expense is estimated to be $19.5$25.7 million for the remainder of 2020, $26.42021, $18.0 million in 2021, $22.0 million in 2022, and $2.5 million per year for the years 2023 through 2025.anits annual impairment assessment of itstest for non-amortizable trade names induring the fourth quarter of 2019 using a qualitative approach to determine whether conditions existed to indicate that it was more likely than not that the fair value of non-amortizable trade names is less than their carrying values.2020. Based on this assessment, the Company concluded that it was more likely than not that the fair value of theits non-amortizable trade names was greater than their carrying values, and therefore a quantitative analysis waswere not required.impaired. In addition, the Company determined that no triggering events occurred and no circumstances changed since the date of our annual impairment test that would indicate impairment of the Company’sits non-amortizable trade names.UNAUDITED(in thousands) As of March 31,
2021As of December 31,
20202017 Senior Notes $ 495,508 $ 495,271 Term Loan B 407,889 408,458 2020 Revolver 0 0 68,977 67,878 Equipment financing and mortgages 49,783 47,594 Other indebtedness 3,514 6,264 Total debt 1,025,671 1,025,465 Less: Current maturities 101,020 100,188 Long-term debt, net $ 924,651 $ 925,277 balancebalances to the reported debt balances as of June 30, 2020March 31, 2021 and December 31, 2019:2020:As of March 31, 2021 As of December 31, 2020 (in thousands) Outstanding Debt Unamortized Discounts and Issuance Costs Debt,
as reportedOutstanding Debt Unamortized Discounts and Issuance Costs Debt,
as reported2017 Senior Notes $ 500,000 $ (4,492) $ 495,508 $ 500,000 $ (4,729) $ 495,271 Term Loan B 422,875 (14,986) 407,889 423,938 (15,480) 408,458 Convertible Notes 69,918 (941) 68,977 69,918 (2,040) 67,878 2017 Credit Facility2020 Revolver were $2.9$2.5 million and $3.7$2.6 million as of June 30, 2020March 31, 2021 and December 31, 2019,2020, respectively, and are included in other assets inon the Condensed Consolidated Balance Sheets.2017 Senior NotesApril 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 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,August 18, 2020, the Company could have redeemedentered into a new credit agreement (the “2020 Credit Agreement”) with BMO Harris Bank N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and other lenders. The 2020 Credit Agreement provides for a $425.0 million term loan B facility (the “Term Loan B”) and a $175.0 million revolving credit facility (the “2020 Revolver”), with sublimits for the 2017 Senior Notes at a redemption price equal to 100%issuance of their principal amount plus a “make-whole” premium described in the indenture. In addition, prior to May 1, 2020, the Company also could have redeemedletters of credit and swing line loans up to 40%the aggregate amounts of $75.0 million and $10.0 million, respectively. The Term Loan B will mature on August 18, 2027 and 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 from2020 Revolver will mature on August 18, 2025, in each case, unless any offering of the Company’s equity. Since May 1, 2020, the Company may redeem the 2017 Senior Notes at specified redemption prices described in the indenture. Upon a change of control, holders of the 2017 Senior Notes may requireare outstanding on January 30, 2025 (which is 91 days prior to the Company to repurchase all or partmaturity of the 2017 Senior NotesNotes), in which case, both the Term Loan B and the 2020 Revolver will mature on January 30, 2025 (subject to certain further exceptions).101%any time prior to maturity without penalty, except that the Company must pay a 1.00% premium in respect to the Term Loan B in connection with any transactions that reduce the yield applicable to the Term Loan B within the first twelve months after August 18, 2020 (subject to certain further exceptions). The 2020 Credit Agreement requires the Company to make regularly scheduled payments of principal on the Term Loan B in quarterly installments equal to 0.25% of the initial principal amount thereof,of the Term Loan B. The 2020 Credit Agreement also requires the Company to make prepayments on the Term Loan B in connection with certain asset sales, receipts of insurance proceeds, incurrences of unpermitted indebtedness and annual excess cash flow (subject to certain exceptions).accrued(ii) additional amounts if (A) in the case of pari passu first lien secured indebtedness, the First Lien Net Leverage Ratio (as defined in the 2020 Credit Agreement) does not exceed 1.35:1.00, (B) in the case of junior lien secured indebtedness, the Total Net Leverage Ratio (as defined in the 2020 Credit Agreement) does not exceed 3.50:1.00 and unpaid(C) in the case of unsecured indebtedness, (x) the Total Net Leverage Ratio does not exceed 3.50:1.00 or (y) the Fixed Charge Coverage Ratio (as defined in the 2020 Credit Agreement) is no less than 2.00:1.00.redemption date.2017 Senior Notes are senior unsecured obligationsmargin applicable to the Term Loan B is between 4.50% and 4.75% for LIBOR and between 3.50% and 3.75% for base rate (which was initially 4.75% for LIBOR and 3.75% for base rate), and, in each case, is based on the Total Net Leverage Ratio. The margin applicable to the 2020 Revolver is between 4.25% and 4.75% for LIBOR and 3.25% and 3.75% for base rate (which was initially 4.75% for LIBOR and 3.75% for base rate), and, in each case, is based on the First Lien Net Leverage Ratio. In addition to paying interest on outstanding principal under the 2020 Credit Agreement, the Company will pay a commitment fee to the lenders under the 2020 Revolver in respect of the unutilized commitments thereunder. The Company will pay customary letter of credit fees. If a payment or bankruptcy event of default occurs and is continuing, the otherwise applicable margin on overdue amounts will be increased by 2% per annum. The agreement includes provisions for the replacement of LIBOR with an alternative benchmark rate in the event LIBOR is discontinued. The weighted-average annual interest rate on borrowings under the 2020 Revolver was 6.50% during the three months ended March 31, 2021.are guaranteed byits restricted subsidiaries to maintain a maximum First Lien Net Leverage Ratio of 2.75:1:00, stepping down to 2.25:1.00 beginning the quarter ending March 31, 2022. The 2020 Credit Agreement also includes certain customary representations and warranties, affirmative covenants and events of default. Subject to certain exceptions, substantially all of the Company’s existing and future material wholly-owned subsidiaries that alsounconditionally guarantee the obligations of the Company under the Company’s2020 Credit Agreement; additionally, subject to certain exceptions, the obligations are secured by a lien on substantially all of the assets of the Company and its subsidiaries guaranteeing these obligations. as defined below. In addition, the indenture for the 2017 Senior Notes provides for customary covenants, including events of default and restrictions on the payment of dividends and share repurchases.2017 Credit FacilityApril 20, 2017,August 18, 2020, the Company entered into aused proceeds from the Term Loan B to repay outstanding amounts under its credit agreement (the “2017 Credit Facility”) with SunTrust Bank, now known as Truist Bank, as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 2017 Credit Facility provides for a $350 million revolving credit facility (the “2017 Revolver”) and a sublimit for the issuance of letters of credit and swingline loans up to the aggregate amount of $150 million and $10 million, respectively, both maturing on April 20, 2022 unless any of the Convertible Notes, as defined below, are outstanding on December 17, 2020, inlenders, at which case all such borrowings will mature onTUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDDecember 17, 2020 (the “spring-forward provision”), provided however (i) if the Convertible Notes are refinanced in full with the proceeds of permitted refinancing indebtedness in accordance with the terms oftime the 2017 Credit Facility the maturity date for the 2017 Credit Facility will remain April 20, 2022 and (ii) if the Company issues “New Convertible Notes” (as defined in the 2017 Credit Facility) and retires the was terminated. in full, the maturity date for the 2017 Credit Facility will be the earlier of (x) April 20, 2022 or (y) 90 days prior to the maturity date for such New Convertible Notes. The 2017 Credit Facility also permits additional borrowings in an aggregate amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans.Borrowings under the 2017 Revolver bear interest, at the Company’s option, at a rate equal to (a) LIBOR plus a margin of between 1.50% and 3.00% or (b) a base rate (determined by reference to the highest of (i) the administrative agent’s prime lending rate, (ii) the federal funds effective rate plus 50 basis points, (iii) the LIBOR rate for a one-month interest period plus 100 basis points and (iv) 0%), plus a margin of between 0.50% and 2.00%, in each case based on the Consolidated Leverage Ratio (as defined in the 2017 Credit Facility). In addition to paying interest on outstanding principal under the 2017 Credit Facility, the Company will pay a commitment fee to the lenders under the 2017 Revolver in respect of the unutilized commitments thereunder. The Companywill pay customary letter of credit fees. If an event of default occurs and is continuing, the otherwise applicable margin and letter of credit fees will be increased 2% per annum. The weighted-average annual interest rate on borrowings under the 2017 Revolver was approximately 3.66% during the six months ended June 30, 2020.The 2017 Credit Facility contains customary covenants for credit facilities of this type, including maximum consolidated leverage ratios ranging from 4.00:1.00 to 3.25:1.00 over the life of the facility and a minimum consolidated fixed charge coverage ratio of 1.25:1.00. On May 7, 2019, certain provisions of the 2017 Credit Facility were amended, including setting the maximum leverage ratio at 3.50:1.00 for the remainder of its term, thus eliminating the step down from 3.50:1:00 to 3.25:1.00. Substantially all of the Company’s subsidiaries unconditionally guarantee the obligations of the Company under the 2017 Credit Facility; additionally, the obligations are secured by a lien on all personal property of the Company and its subsidiaries guaranteeing these obligations.As of June 30, 2020, there was $250 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, 2020.As a result of the spring-forward provision mentioned above, the facility will mature on December 17, 2020 if the Convertible Notes remain outstanding at that time. The Company does not have call rights that allow it to unilaterally redeem the Convertible Notes. Due to the spring-forward provision in the 2017 Credit Facility, all borrowings under the facility are included in “Current maturities of long-term debt” on the Condensed Consolidated Balance Sheet as of June 30, 2020. The Company continues to evaluate options to address the spring-forward provision and refinancing or retirement of the outstanding Convertible Notes.Convertible NotesDecember, and are included in “Current maturitiesDecember.will bewere convertible only under the following circumstances: (1) during the five business day period after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of Convertible Notes for such trading day was less than 98% of the product of the last reported sale price of 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)certain circumstances including upon the occurrence of specified corporate events. The holders did not convert any of the Convertible Notes prior to January 15, 2021. 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.will beare 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, theTUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDJune 30,March 31, 2021, none of the notes have been converted.conversion provisionsCompany could have redeemed the 2017 Senior Notes under certain conditions described in the agreement. Since May 1, 2020, the Company may redeem the 2017 Senior Notes at specified redemption prices described in the indenture. Upon a change of control, holders of the Convertible2017 Senior Notes have not been triggered.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.OperationsIncome consisted of the following:Three Months Ended
March 31,(in thousands) 2021 2020 Cash interest expense: Interest on 2017 Senior Notes $ 8,594 $ 8,594 Interest on Term Loan B 6,094 N/A Interest on 2020 Revolver 121 N/A Interest on 2017 Credit Facility N/A 2,415 Interest on Convertible Notes 503 1,437 Other interest 481 504 Total cash interest expense 15,793 12,950 Amortization of discount and debt issuance costs on Convertible Notes 1,099 2,864 Amortization of discount and debt issuance costs on Term Loan B 539 N/A Amortization of debt issuance costs on 2020 Revolver 142 N/A Amortization of debt issuance costs on 2017 Credit Facility N/A 402 Amortization of debt issuance costs on 2017 Senior Notes 237 220 Total non-cash interest expense 2,017 3,486 Total interest expense $ 17,810 $ 16,436 ____________________________________________________________________________________________________sixthree months ended June 30, 2020.March 31, 2021.June 30, 2020,March 31, 2021, the Company’s operating leases have remaining lease terms ranging from less than one year to 1017 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.UNAUDITEDand six months ended June 30, 2020March 31, 2021 and 2019:Three Months Ended
March 31,(in thousands) 2021 2020 Operating lease expense $ 3,718 $ 3,767 21,125 17,265 24,843 21,032 Less: Sublease income 170 329 Total lease expense $ 24,673 $ 20,703 ____________________________________________________________________________________________________year.year. Short-term leases include, among other things, construction equipment rented on an as-needed basis as well as temporary housing.(dollars in thousands) Balance Sheet Line Item As of March 31,
2021As of December 31,
2020Assets Right-of-use assets Right-of-use assets Other assets $ 56,043 $ 55,897 Total lease assets $ 56,043 $ 55,897 Liabilities Current lease liabilities Accrued expenses and other current liabilities $ 7,827 $ 7,661 Long-term lease liabilities Other long-term liabilities 51,751 51,336 Total lease liabilities $ 59,578 $ 58,997 Weighted-average remaining lease term Weighted-average remaining lease term 12.3 years 12.5 years Weighted-average discount rate 9.28 % 9.22 % Three Months Ended
March 31,(in thousands) 2021 2020 Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ (3,345) $ (3,770) Non-cash activity: Right-of-use assets obtained in exchange for lease liabilities Right-of-use assets obtained in exchange for lease liabilities $ 2,338 $ 132 June 30, 2020:Operating Leases 2021 (excluding the three months ended March 31, 2021) 2021 (excluding the three months ended March 31, 2021) $ 9,720 2022 11,215 2023 8,424 2024 6,641 2025 2025 5,862 Thereafter 66,047 Total lease payments 107,909 Less: Imputed interest 48,331 Total $ 59,578 UNAUDITEDJune 30, 2020,March 31, 2021, the Company cannot predict the ultimate outcome of the investigation and cannot reasonably estimatehas concluded that the potential loss or range of loss thatfor a material adverse financial impact on Five Star or the Company may incur or the impact of the resultsas a result of the investigation on Five Star or the Company.UNAUDITEDis expected to bewas heard in late 2020.on February 23, 2021 and a decision remains pending with the Court of Appeal. STP submitted damages to the Insurers in the King County lawsuit in the amount of $532 million. STP also sought these damages from WSDOT related to the pipe-strike by the TBM in a related lawsuit in Thurston County (see following paragraph).iswas for non-cash write-downs primarily related to the costs and estimated earnings in excess of billings and receivables that the Company previously recorded to reflect its expected recovery in this case.CorporationCorp. (“TPBC”) entered into a contract with the George Washington Bridge Bus Station Development Venture, LLC (the “Developer”) to renovate the George Washington Bridge Bus Station, a mixed-use facility owned by the Port Authority of New York and New Jersey (the “Port Authority”) that serves as a transit facility and retail space. The $100 million project experienced significant design errors and associated delays, resulting in damages to TPBC and its subcontractors, including WDF and Five Star, wholly owned subsidiaries of the Company. The project reached substantial completion on May 16, 2017.At this hearing,On August 12, 2020, the bankruptcy court indicated that it will issue a formal order approvingapproved the settlement and denyingdenied TPBC’s third-party beneficiary rights under the lease agreement. On August 20, 2020, TPBC plans tofiled an appeal with the decision, once it is formally issued,U.S. District Court forand to avoid being subordinate to the claims of the secured lenders in the bankruptcy proceedings.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED and STV Incorporated, as designer, seeking the same $113 million in damages pursuant to the lease agreement between the Port Authority and the Developer. On August 20, 2018, the Port Authority filed a motion to dismiss all causes of action, which was denied by the court on July 1, 2019. The Port Authority appealed this decision on July 15, 2019,2019. On February 18, 2021, the Appellate Division affirmed in part and reversed in part the appeal is expected to be decided in 2021. On December 2, 2019, the Courttrial court's denial of Appeal denied the Port Authority’s requestAuthority's motion to stay the trial court action pending the appeal. As a result, the lawsuit is proceeding against the Port Authority before the trial court. On January 13, 2020, the court dismissed STV Incorporated from the case.certain lenders that received interest payments from project funds and other amounts earmarked to pay the contractors. On June 1, 2020, the defendants filed motions to dismiss, which were granted in part and a decision remains pendingdenied in part, resulting in the lender defendants being dismissed from the court.June 30, 2020,March 31, 2021, the Company has concluded that the potential for a material adverse financial impact due to the Developer’s claims is remote. With respect to TPBC’s claims against the Developer, its owners, certain lenders and the Port Authority, management has made an estimate of the total anticipated recovery on this project, and such estimate is included in revenue recorded to date.June 30, 2020,March 31, 2021, there were 1,185,0891,405,020 shares of common stock available for grant under the Tutor Perini Corporation Omnibus Incentive Plan. During the first sixthree months of 20202021 and 2019,2020, the Company granted the following share-based instruments: (1) restricted stock units totaling 75,000180,000 and 175,00075,000 with weighted-average fair values per share of $19.30 and $13.93, respectively; and $20.41, respectively; (2) stock options totaling 75,000100,000 and 85,00075,000 with weighted-average fair values per share of $3.94$13.67 and $7.57,$3.94, respectively, and weighted-average per share exercise prices of $19.24 and $25.70, and $25.62, respectively; and (3) unrestricted stock units totaling 194,177 and 98,591 with weighted-average fair values per share of $8.60 and $15.72, respectively. During the six months ended June 30, 2019, 750,000 stock options with a weighted-average per share exercise price of $20.33 expired. 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 stock options granted during the first sixthree months of 20202021 was determined using the Black-Scholes model based on the following weighted-average assumptions: (i) expected life of 6.06.5 years, (ii) expected volatility of 44.91%73.74%, (iii) risk-free rate of 1.56%1.44%, and (iv) 0 quarterly dividends. Certain performance-based awards contain market condition components and are valued on the date of grant using a Monte Carlo simulation model.and six months ended June 30,March 31, 2021 and 2020, the Company recognized, as part of general and administrative expenses, costs for share-based payment arrangements totaling $3.8$2.4 million and $8.3$4.5 million, respectively, and $4.6 million and $10.1 million for the three and six months ended June 30, 2019, respectively. As of June 30, 2020,March 31, 2021, the balance of unamortized share-based compensation expense was $14.8$14.1 million, which is expected to be recognized over a weighted-average period of 1.72.4 years.UNAUDITEDand six months ended June 30, 2020March 31, 2021 and 2019:Three Months Ended March 31, (in thousands) 2021 2020 Interest cost $ 582 $ 758 Service cost Service cost 236 231 Expected return on plan assets (1,015) (1,006) Recognized net actuarial losses Recognized net actuarial losses 683 592 Net periodic benefit cost $ 486 $ 575 $2.2$1.0 million and $2.0$1.3 million to its defined benefit pension plan during each of the six-monththree-month periods ended June 30,March 31, 2021 and 2020, and 2019, respectively, and expectsrespectively. Due to the election of certain options provided under the American Rescue Plan Act of 2021, enacted on March 11, 2021, the Company is not required to contribute an additional $1.9 million byamounts to the enddefined benefit pension plan for the remainder of 2020.•Level 1 inputs are observable quoted prices in active markets for identical assets or liabilities•Level 2 inputs are observable, either directly or indirectly, but are not Level 1 inputs•Level 3 inputs are unobservableJune 30, 2020March 31, 2021 and December 31, 2019:2020:As of March 31, 2021 As of December 31, 2020 Fair Value Hierarchy Fair Value Hierarchy (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $ 318,720 $ 0 $ 0 $ 318,720 $ 374,289 $ 0 $ 0 $ 374,289 82,086 0 0 82,086 77,563 0 0 77,563 0 74,062 0 74,062 0 78,912 0 78,912 45,284 51,397 0 96,681 92,609 1,300 0 93,909 Total $ 446,090 $ 125,459 $ 0 $ 571,549 $ 544,461 $ 80,212 $ 0 $ 624,673 ____________________________________________________________________________________________________June 30, 2020,March 31, 2021, consist of investments in U.S. government agency securities of $37.5$40.5 million, corporate debt securities of $36.8$32.7 million and corporate certificates of deposits of $1.1$0.8 million with maturities of up to five years, and are valued based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets and are therefore classified as Level 2 assets. As of December 31, 2019,2020, restricted investments consisted of investments in corporate debt securities of $35.8 million, U.S. government agency securities of $33.8$40.5 million, corporate debt securities of $37.5 million, and corporate certificates of deposits of $1.4$0.9 million with maturities of up to five years. The amortized cost of these available-for-sale securities at June 30, 2020March 31, 2021 and December 31, 20192020 was not materially different from the fair value.June 30, 2020March 31, 2021 are comprised of money market funds of $98.8$45.3 million, corporate debt securities of $50.1 million and municipal bonds of $1.2$1.3 million. The fair values of the money market funds are measured using quoted market prices; therefore, they are classified as Level 1 assets. The fair values of corporate and municipal bonds have maturity periods up to five years, and are measured using readily available pricing sources for comparable instruments;determined from a compilation of primarily observable market information, third-party quoted market prices, broker quotes in non-active markets or similar assets; therefore, they are classified as Level 2 assets. As of December 31, 2019,2020, investments in lieu of retainage consisted of money market funds of $89.6$92.6 million and municipal bonds of $1.2$1.3 million. The amortized cost ofJune 30, 2020March 31, 2021 and December 31, 20192020 was not materially different from the fair value.$484.4$518.3 million and $485.0$495.0 million as of June 30, 2020March 31, 2021 and December 31, 2019,2020, respectively. The fair value of theTUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED$190.7$69.2 million and $193.4$69.1 million as of June 30, 2020March 31, 2021 and December 31, 2019,2020, respectively. The fair values of the 2017 Senior Notes and Convertible Notes were determined using Level 1 inputs, specifically current observable market prices. The fair value of the Term Loan B was $427.1 million and $425.0 million as of March 31, 2021 and December 31, 2020, respectively. The fair value of the Term Loan B was determined using Level 2 inputs, specifically third-party quoted market prices. The reported value of the Company’s remaining borrowings approximates fair value as of June 30, 2020March 31, 2021 and December 31, 2019.(“ (“ASC 810”), the Company assesses its partnerships and joint ventures at inception to determine if any meet the qualifications of a VIE. The Company considers a joint venture a VIE if either (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, the Company reassesses its initial determination of whether a joint venture is a VIE.June 30, 2020,March 31, 2021, the Company had unconsolidated VIE-related current assets and liabilities of $3.4$0.9 million and $3.3$0.8 million, respectively, included in the Company’s Condensed Consolidated Balance Sheet. As of December 31, 2019,2020, the Company had unconsolidated VIE-related current assets and liabilities of $1.5$0.6 million and $1.4$0.5 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, 2020.June 30,March 31, 2021, the Company’s Condensed Consolidated Balance Sheet included current and noncurrent assets of $404.2 million and $9.7 million, respectively, as well as current liabilities of $449.3 million related to the operations of its consolidated VIEs. As of December 31, 2020, the Company’s Condensed Consolidated Balance Sheet included current and noncurrent assets of $401.1$405.7 million and $36.4$14.2 million, respectively, as well as current liabilities of $581.1$514.9 million related to the operations of its consolidated VIEs. As of December 31, 2019, the Company’s Condensed Consolidated Balance Sheet included current and noncurrent assets of $365.0 million and $52.0 million, respectively, as well as current liabilities of $556.1 million related to the operations of its consolidated VIEs.aan original combined value of approximately $2.8 billion. The Company has a 75% interest in the joint venture with the remaining 25% held by O&G Industries, Inc. 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.$1.4 billion transportation infrastructure project in Newark, New Jersey.Jersey with an original value of approximately $1.4 billion. 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.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDand six months ended June 30,March 31, 2021 and 2020 and 2019 is provided below:TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDThree Months Ended March 31, 2021 (in thousands) Common
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossNoncontrolling
InterestsTotal
EquityBalance - December 31, 2020 $ 50,827 $ 1,127,385 $ 422,385 $ (46,741) $ (10,911) $ 1,542,945 Net income — — 16,034 — 9,071 25,105 Other comprehensive income (loss) — — — (615) 296 (319) Share-based compensation — 1,586 — — — 1,586 Issuance of common stock, net 111 (1,347) — — — (1,236) Contributions from noncontrolling interests — — — — 4,000 4,000 Balance - March 31, 2021 $ 50,938 $ 1,127,624 $ 438,419 $ (47,356) $ 2,456 $ 1,572,081 Three Months Ended March 31, 2020 (in thousands) Common
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossNoncontrolling
InterestsTotal
EquityBalance - December 31, 2019 $ 50,279 $ 1,117,972 $ 313,991 $ (42,100) $ (9,617) $ 1,430,525 Net income — — 17,371 — 8,767 26,138 Other comprehensive loss — — — (1,028) (2,020) (3,048) Share-based compensation — 3,507 — — — 3,507 Issuance of common stock, net 298 (992) — — 0 (694) Distributions to noncontrolling interests — — — — (13,500) (13,500) Balance - March 31, 2020 $ 50,577 $ 1,120,487 $ 331,362 $ (43,128) $ (16,370) $ 1,442,928 and six months ended June 30,March 31, 2021 and 2020 and 2019 were as follows:Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 (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 (loss): Defined benefit pension plan adjustments $ 683 $ (191) $ 492 $ 591 $ (168) $ 423 Foreign currency translation adjustments 402 (30) 372 (4,927) 914 (4,013) Unrealized (loss) gain in fair value of investments (1,550) 367 (1,183) 757 (215) 542 Total other comprehensive income (loss) (465) 146 (319) (3,579) 531 (3,048) 296 0 296 (2,020) 0 (2,020) Total other comprehensive income (loss) attributable to Tutor Perini Corporation $ (761) $ 146 $ (615) $ (1,559) $ 531 $ (1,028) (a)The only component of other comprehensive income (loss) attributable to noncontrolling interests is foreign currency translation.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDand six months ended June 30, 2020March 31, 2021 were as follows:Three Months Ended March 31, 2021 (in thousands) Defined
Benefit
Pension
PlanForeign
Currency
TranslationUnrealized Gain (Loss) in Fair Value of Investments, Net Accumulated
Other
Comprehensive
Income (Loss)Attributable to Tutor Perini Corporation: Balance as of December 31, 2020 $ (44,087) $ (5,322) $ 2,668 $ (46,741) Other comprehensive income (loss) before reclassifications 0 76 (1,060) (984) Amounts reclassified from AOCI 492 0 (123) 369 Total other comprehensive income (loss) 492 76 (1,183) (615) Balance as of March 31, 2021 $ (43,595) $ (5,246) $ 1,485 $ (47,356) and six months ended June 30, 2019March 31, 2020 were as follows:Three Months Ended March 31, 2020 (in thousands) Defined
Benefit
Pension
PlanForeign
Currency
TranslationUnrealized Gain (Loss) in Fair Value of Investments, Net Accumulated
Other
Comprehensive
Income (Loss)Attributable to Tutor Perini Corporation: Balance as of December 30, 2019 $ (37,826) $ (5,371) $ 1,097 $ (42,100) Other comprehensive income (loss) before reclassifications 0 (1,993) 546 (1,447) Amounts reclassified from AOCI 423 0 (4) 419 Total other comprehensive income (loss) 423 (1,993) 542 (1,028) Balance as of March 31, 2020 $ (37,403) $ (7,364) $ 1,639 $ (43,128) UNAUDITEDLocation in Consolidated Three Months Ended
March 31,(in thousands) Statements of Income 2021 2020 Component of AOCI: Defined benefit pension plan adjustments Other income, net $ 683 $ 591 Income tax benefit Income tax expense (191) (168) Net of tax $ 492 $ 423 Unrealized gain in fair value of investment adjustments Other income, net $ (156) $ (5) Income tax expense Income tax expense 33 1 Net of tax $ (123) $ (4) high-rise residential, hospitality and gaming, transportation, health care, commercial andoffices, government offices,facilities, sports and entertainment, education, correctional facilities, biotech, pharmaceutical, industrial and technology.UNAUDITEDand six months ended June 30, 2020March 31, 2021 and 2019:Reportable Segments (in thousands) Civil Building Specialty
ContractorsTotal Corporate Consolidated
TotalThree Months Ended March 31, 2021 Total revenue $ 583,144 $ 457,170 $ 324,948 $ 1,365,262 $ — $ 1,365,262 Elimination of intersegment revenue (107,569) (49,937) (161) (157,667) — (157,667) Revenue from external customers $ 475,575 $ 407,233 $ 324,787 $ 1,207,595 $ 0 $ 1,207,595 Income (loss) from construction operations $ 50,105 $ 11,216 $ 1,324 $ 62,645 $ (12,941) (a) $ 49,704 Capital expenditures $ 9,564 $ 73 $ 145 $ 9,782 $ 53 $ 9,835 $ 22,713 $ 432 $ 959 $ 24,104 $ 2,770 $ 26,874 Three Months Ended March 31, 2020 Total revenue $ 580,087 $ 505,082 $ 282,452 $ 1,367,621 $ — $ 1,367,621 Elimination of intersegment revenue (93,458) (23,318) (116) (116,892) — (116,892) Revenue from external customers $ 486,629 $ 481,764 $ 282,336 $ 1,250,729 $ — $ 1,250,729 Income (loss) from construction operations $ 46,121 $ 3,516 $ 8,279 $ 57,916 $ (10,689) (a) $ 47,227 Capital expenditures $ 11,192 $ 12 $ 473 $ 11,677 $ 16 $ 11,693 $ 18,616 $ 427 $ 993 $ 20,036 $ 2,775 $ 22,811 ____________________________________________________________________________________________________During the three months ended June 30, 2020, income (loss) from construction operations was impacted by $13.2 million (an unfavorable after-tax impact of $9.5 million, or $0.19 per diluted share) due to an adverse arbitration ruling pertaining to an electrical project in New York in the Specialty Contractors segment.(b)Consists primarily of corporate general and administrative expenses.(c)(b)Depreciation and amortization is included in income (loss) from construction operations.(d)During the three months ended June 30, 2019, the Company recorded a non-cash goodwill impairment charge of $379.9 million in income (loss) from construction operations (an unfavorable after-tax impact of $329.5 million, or $6.56 per diluted share) resulting from an interim impairment test the Company performed as of June 1, 2019.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED____________________________________________________________________________________________________(a)During the six months ended June 30, 2020, income (loss) from construction operations was impacted by $13.2 million (an unfavorable after-tax impact of $9.5 million, or $0.19 per diluted share) due to an adverse arbitration ruling pertaining to an electrical project in New York in the Specialty Contractors segment.(b)Consists primarily of corporate general and administrative expenses.(c)Depreciation and amortization is included in income (loss) from construction operations.(d)During the six months ended June 30, 2019, the Company recorded a non-cash goodwill impairment charge of $379.9 million in income (loss) from construction operations (an unfavorable after-tax impact of $329.5 million, or $6.57 per diluted share) resulting from an interim impairment test the Company performed as of June 1, 2019.(loss) before income taxes is as follows:TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDThree Months Ended March 31, (in thousands) 2021 2020 Income from construction operations $ 49,704 $ 47,227 Other income, net 175 481 Interest expense (17,810) (16,436) Income before income taxes $ 32,069 $ 31,272 follows:(in thousands) As of March 31,
2021As of December 31,
2020Civil $ 3,225,802 $ 3,141,991 Building 1,032,928 1,147,649 Specialty Contractors 658,982 673,891 28,295 82,086 Total assets $ 4,946,007 $ 5,045,617 ____________________________________________________________________________________________________June 30, 2020March 31, 2021 and the results of our operations for the three and six months ended June 30, 2020March 31, 2021 and should be read in conjunction with other information, including the unaudited Condensed Consolidated Financial Statements and notes included in Part I, Item 1, Financial Information, of this Quarterly Report on Form 10-Q, the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the year ended December 31, 2019,2020, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 20192020 and in Part II, Item 1A below.•The impact of the COVID-19 pandemic and related events that are beyond our control, including possible effects on our business and operations, customers and suppliers, and employees, contractors and subcontractors, which could affect adversely our projects and the geographic regions in which we conduct business;A significant slowdown or decline in economic conditions;•Revisions of estimates of contract risks, revenue or costs; the timing of new awards; or the pace of project execution may result in losses or lower than anticipated profit;•Unfavorable outcomes of existing or future litigation or dispute resolution proceedings against customers (project owners, developers, general contractors, etc.), subcontractors or suppliers, as well as failure to promptly recover significant working capital invested in projects subject to such matters;•The requirement to perform extra, or change order, work resulting in disputes or claims or adversely affecting our working capital, profits and cash flows;•A significant slowdown or decline in economic conditions;•Inability to retain key members of our management, to hire and retain personnel required to complete projects or implement succession plans for key officers;•Client cancellationsIncreased competition and failure to secure new contracts;or reductions in scope under, contracts reported in our backlog;government spending for infrastructure and other public projects;•Failure to meet contractual schedule requirements, which could result in higher costs and reduced profits or, in some cases, exposure to financial liability for liquidated damages and/or damages to customers;•Failure to meet our obligationsClient cancellations of, or reductions in scope under, our debt agreements;Decreases in the level of government spending for infrastructure and other public projects;Downgradescontracts reported in our credit ratings;backlog;•Possible systems and information technology interruptions, including due to cyberattack, systems failures or other similar events;losses;Increased competition and failure to secure new contracts;Impairment of our goodwill losses and/or other indefinite-lived intangible assets;reputational harm;•Economic, political, regulatory 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;Possible systems and information technology interruptions, including due to cyberattack, systems failures or other similar events;•The impact of inclement weather conditions on projects;•Risks related to government contracts and related procurement regulations;comply with laws and regulations related to government contracts;meet our obligations under our debt agreements;•Potential dilutive impactImpairment of our Convertible Notes in our diluted earnings per share calculation;goodwill or other indefinite-lived intangible assets; and•Uncertainty from the expected discontinuance of the London Interbank Offered Rate (“LIBOR”) and transition to any other interest rate benchmark; andbenchmark.In the first quarter of 2020, the outbreak of a novel strain of coronavirus, COVID-19, was declared a pandemic. Efforts in the United States to prevent the spread of COVID-19 and mitigate its impacts intensified in March 2020. All 50 states in the United States declared states of emergency, and various countries around the world, including the United States, took steps to restrict travel. Many states and cities within the United States also enacted temporary closures of businesses, issued stay-at-home orders and implemented other restrictive measures in response to the pandemic. did not have anhas caused a lack of available manpower, a reduction in field labor productivity, other inefficiencies, delays to project schedules and a deferral of project execution. As a result, we continue to incur incremental costs, much of which we are seeking to recover from our customers as allowed by contractual terms. The relief sought from customers, some of which has already been received, helped reduce the pandemic's negative impact on our business until mid-March 2020. The pandemic continued to impact certain projects through the middle to latter part of the second quarter, when certain states and cities began easing some restrictions to allowfinancial results for the gradual re-opening and expansion of business activities and most of our affected projects of significance resumed more normalized operations. The pace of easing andcurrent period. In addition, we continue to experience delays in legal proceedings, as well as delays in settlement discussions where we have claims against project owners for additional costs exceeding the continued level of restrictions have varied across regions based on the rates of new COVID-19 cases and hospitalizations, and this variability is expected to continue until rates decrease to levels that are more acceptable to public health officials.For the three and six months ended June 30, 2020, the Company estimates that the COVID-19 pandemic reduced revenue by $130 million and $190 million, respectively, income from construction operations by $9 million and $12 million, respectively, and diluted earnings per common share by $0.13 and $0.17, respectively. These estimated impacts primarily affected the results of the lower-margin Building and Specialty Contractors segments, as certain projectscontract price or for amounts not included in the Specialty Contractors segmentoriginal contract price. Delays in New Yorkresolving and certain projects in the Building segment in Californiarecovering on these claims continue to adversely affect our liquidity and Arkansas experienced reduced project execution activities and productivity primarily due to temporary project suspensions and restarts. The higher-margin Civil segment was not significantly impacted by the COVID-19 pandemic during the first half of 2020. financial results.Due However, the COVID-19 pandemic has had an adverse effect on the volume of our new awards and, correspondingly, our backlog. Many of our state and local government customers’ revenue sources have been and continue to be negatively impacted by the pandemic due to severely curtailed ridership on mass-transit systems (buses, subways, trains, etc.), travel on commercial airlines, and driving by the general public, which resulted in reduced fare and toll collections, lower fuel tax receipts and reduced airport and other facility usage fees. Sales and other tax revenues have also been negatively affected by reduced spending, as the retail, travel, hospitality and entertainment industries, among others, have suffered through periodic government-imposed shut-downs or occupancy restrictions that now appear to be easing. These tax revenue shortfalls led to, and could continue to result in, funding uncertainties that have caused customers to delay bid solicitations and contract awards for many of their planned infrastructure projects. Our reduced backlog combined with the possibility of continued pandemic-related delays in project bids and awards could result in lower-than-expected revenue and earnings until such time as the federal government provides supplemental funding support (should that occur) to our customers or when customers’ funding uncertainties are otherwise resolved. Among other things, governments could prohibit the continuation of certain projects that to date have been designated as “essential” or could impose health, safety and other operational requirements on such projects that could result in delays to or suspensions of such projects. In addition, employees and contractors working on such projects could be unable or unwilling to continue working on them, perhaps for extended periods. The COVID-19 pandemic also could negatively affect the ability of counterparties or joint venture partners to make required payments on a timely basis or at all.Despite the impacts from the COVID-19 pandemic described above, consolidatedand six months ended June 30, 2020March 31, 2021 was $1.3$1.21 billion and $2.5 billion, an increase of 13% and 21%, respectively, compared to $1.1 billion and $2.1$1.25 billion for the same periodsperiod in 2019. The growth was2020, primarily attributabledue to increasedreduced project execution activities on several infrastructure projects in California, Minnesota, and the Northeast, and certain building projects in California and Oklahoma. The increases were partiallyBuilding segment, mostly offset by increased volume in the COVID-19 impacts mentioned above.Income from construction operations forSpecialty Contractors segment.three and six months ended June 30, 2020 was $57.7 million and $104.9 million, respectively, compared to a loss from construction operations of $341.7 million and $318.8 million for the same periods in 2019. Adjustedslight revenue decline, income from construction operations for the three and six months ended June 30, 2019, which is a non-GAAP financial measure and excludes the $379.9 million non-cash goodwill impairment charge, was $38.2 million and $61.1 million, respectively. (For a discussion of non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to the most nearly comparable GAAP financial measures, see the section below titled Non-GAAP Financial Measures.) The increase for both periods was primarily driven by contributions from the above-mentioned infrastructure projects. For the six-month period of 2020, the increase was also partially driven by the absence of prior year unfavorable adjustments that totaled $20.0million on certain electrical and mechanical projects in New York, none of which were individually material. The increases for both the second quarter and year-to-date 2020 periods were partially offset by the $13.2million impact of an unfavorable arbitration ruling related to an electrical project in New York, incremental non-cash amortization expense of $7.9 million and $12.8 million for the three and six months ended June 30, 2020, respectively, related to the increased equity interest in a joint venture that the Company acquired in the fourthfirst quarter of 2019, and the COVID-19 impacts mentioned above.The provision for income taxes2021 was $9.6$49.7 million and $14.7 million for the three and six months ended June 30, 2020, respectively, compared to an income tax benefit of $42.9 million and $40.7$47.2 million for the same periodsperiod in 2019. 2020, with the increase primarily driven by a shift toward higher-margin projects within the Civil segment, including favorable contributions from projects in California and Guam. Improved performance in the Building segment was largely offset by underperformance in the Specialty Contractors segment.23.7% and 20.5% 21.7% for the three and six months ended June 30, 2020, respectively,March 31, 2021, compared to 12.0% and 11.6%16.4% for the comparable periodsperiod in 2019. The income tax benefits in the 2019 periods include the $50.4 million tax benefit recognized as a result of the goodwill impairment charge.2020. See Corporate, Tax and Other Mattersbelow for a discussion of the changeschange in the effective tax rate.and six months ended June 30, 2020March 31, 2021 was $0.37 and $0.71, respectively,$0.31 compared to a loss per share of $6.38 and $6.40 for the same periods in 2019. The COVID-19 pandemic had an estimated negative impact on diluted earnings per common share of $0.13 and $0.17$0.34 for the threesame period in 2020. The decrease in net income attributable to the Company, and six months ended June 30, 2020. Adjusted diluted earnings per common share, which is a non-GAAP financial measure and excludes the goodwill impairment charge (and the associated tax benefit) for the three and six months ended June 30, 2019,correspondingly EPS, was $0.18 and $0.17, respectively. Theprimarily due to an increase in adjusted diluted earnings per common share for both periods was principally due to the factors discussed above that drove the increase ineffective tax rate and higher interest expense, partially offset by improved income from construction operations.and six months ended June 30, 2020March 31, 2021 totaled $0.7$1.0 billion and $1.3 billion, respectively, compared to $0.9 billion and $4.2$0.6 billion for the same periodsperiod in 2019. The lower volume of new awards in both current year periods was due to the timing of bidding for and awards of prospective project opportunities, which the Company expects will occur later in 2020 or in 2021. 2020. The Civil and Building segments were the primary contributors to the new award activity in the secondfirst quarter of 2020.2021. The most significant new awards included a $269 million government building facility in California, more than $300variousa mass-transit projects, over $235project in California. The Company now anticipates booking the previously announced $478 million for various building projects in California, the largest of which was a $69 million education building, and $67 million for various civil infrastructure projectsLAX Airport Metro Connector project into backlog in the Midwest. The COVID-19 pandemic has resulted in and could potentially continue to result in delays in the bidding and awardingsecond quarter of certain projects the Company is pursuing due to customer funding constraints and administrative challenges.June 30, 2020March 31, 2021 was $10.0$8.1 billion, down modestly compared to $11.2$8.3 billion at December 31, 2019. Backlog declined as a result of the higher current year revenue generated from near-record backlog at the end of 2019 outpacing current year new awards.2020. As of June 30, 2020,March 31, 2021, the mix of backlog by segment was approximately 55%59% for Civil, 23%20% for Building and 22%21% for Specialty Contractors.20192020 to June 30, 2020:March 31, 2021:(in millions) Backlog at December 31, 2020 Revenue
RecognizedCivil $ 4,783.6 $ 457.0 $ (475.6) $ 4,765.0 Building 1,702.3 344.2 (407.2) 1,639.3 Specialty Contractors 1,859.8 157.5 (324.8) 1,692.5 Total $ 8,345.7 $ 958.7 $ (1,207.6) $ 8,096.8 Becauseuncertain,uncertain. Accordingly, the Company cannot assess the degree to which it might experience future adverse impacts. The general outlook for the Company’s growth over the next several years remains favorable, particularly in the Civil and Specialty Contractors segments, but the impact of the COVID-19 pandemic could still continue to adversely affect future performance and operations.operations, and the amount and timing of new work awarded. In addition, the Company’s growth could continue to be impacted by future project delays or the timing of project commencements, ramp-up activities and completions. We anticipate that we will continue to win our share of significant new awards resulting from long-term capital spending plans by state, local and federal customers, as well as bipartisan support for infrastructure investments and limited competition for some of the largest project opportunities. In recent elections over the past several years, voters in numerous states approved dozens of long-term transportation funding measures totaling approximately $200 billion in long-term funding. The largest of these werewas 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 inyears. In Seattle, Washington, where Sound Transit 3 was passed and is expected to generate $54 billion of funding over 25 years. As state and local governments respondcontinue responding to the economic burdens ofattributable to the COVID-19 pandemic, they may delay or even cancel planned infrastructure investments due to reduced revenues from income and sales taxes, fuel taxes and tolls. The extent and duration of such effects, their duration, and how state and local governments will respond remains uncertain, just as the scope and duration of the COVID-19 pandemic remainsremain highly uncertain. The possibility of additional federal financial assistance or stimulus programs directedtoward assisting state and local governments or specifically targeting significant investments in infrastructure have been discussed as possible additional pieces of the federal government’s ongoing response toHowever, the COVID-19 pandemic. Such additional federal financial assistance or stimulus programs could favorably impact the Company’s current work and prospective opportunities, though the timing and magnitude of such additional federal government actions, if any, remain uncertain.Meanwhile, several large, long-duration civil infrastructure programs with which we are already involved continue to progress. Finally, the COVID-19 pandemic’s dramatic impact on the U.S. economy has led tocaused interest rates thatto remain at recordhistorically low levels, andwhich may be conducive to continued, and potentially increased, spending on infrastructure projects.below.Non-GAAP Financial MeasuresTo supplement our unaudited condensed consolidated financial statements presented under generally accepted accounting principles in the United States (“GAAP”), we are presenting certain non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations, and they are among the indicators management uses as a basis for evaluating the Company’s financial performance as well as for forecasting future periods. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our business operating results, including underlying trends.below.These non-GAAP financial measures, which exclude the non-cash goodwill impairment charge incurred in the second quarter of 2019 (as well as the tax benefit associated with that charge), include adjusted income (loss) from construction operations, adjusted net income attributable to Tutor Perini Corporation, adjusted diluted earnings per common share and adjusted effective income tax rate. We also reference adjusted operating margin for each segment, which is a non-GAAP financial measure that we define as adjusted income (loss) from construction operations as a percentage of revenue. These non-GAAP financial measures are not intended to replace the presentation of our financial results in accordance with GAAP, and they may not be comparable to other similarly titled non-GAAP financial measures presented by other companies. Reconciliations of these non-GAAP financial measures to the most nearly comparable GAAP financial measures are presented below. There were no adjustments for the three and six months ended June 30, 2020; therefore, the non-GAAP financial measures do not differ from GAAP results in those periods.income (loss) from construction operations and adjusted income from construction operations for the Civil segment are summarized as follows:Three Months Ended March 31, (in millions) 2021 2020 Revenue $ 475.6 $ 486.6 Income from construction operations 50.1 46.1 and six months ended June 30, 2020 increased 20% and 31%, respectively,March 31, 2021 decreased slightly compared to the same periodsperiod in 2019. The revenue growth for both periods was primarily due to overall increased2020. Reduced project execution activities on certain projects in the Northeast were mostly offset by increased activities on various mass-transit projects in California and Minnesota. TGuam.he COVID-19 pandemic had an insignificant impact onin both periods (an estimated $15 million and $25 million, respectively).Excluding the goodwill impairment charge in the second quarter of 2019, adjusteddecline, income from construction operations for the three and six months ended June 30, 2020March 31, 2021 increased 43% and 27%9%, respectively, compared to the first quarter of 2020, primarily due to contributions from certain higher-margin projects in California and Guam.periodsperiod in 2019.2020. The increase was primarily driven by the volume growth mentioned above and improved performance on certain projects, partially offset by the impact of incremental non-cash amortization expense of $7.9 million and $12.8 million for the three and six months ended June 30, 2020, respectively, relateddue to the increased equity interestabove-mentioned factors that drove the changes in a joint venture that the Company acquired in the fourth quarter of 2019. The COVID-19 pandemic resulted in insignificant impacts onrevenue and income from construction operations in both current year periods (an estimated $2 million in each period).Operating margin was 11.5% and 10.6% for the three and six months ended June 30, 2020, respectively, compared to operating margin of (34.7)% and (15.2)% and adjusted operating margin of 9.6% and 10.8% for the same periods in 2019, which excludes the impact of the goodwill impairment charge. The difference in adjusted operating margin for the second quarter of 2020 was primarily driven by improved performance on several ongoing projects, partially offset by the aforementioned incremental amortization expense. For the first half of 2020, the difference in adjusted operating margin was principally driven by the same incremental amortization expense.$377 million and $555$457 million for the three and six months ended June 30, 2020, respectively,March 31, 2021 compared to $149$179 million and $1.8 billion for the same periodsperiod in 2019. The increased level of2020. Significant new awards in the secondfirst quarter of 2020 was primarily driven by2021 included more than $300 million of additional funding for various mass-transit projects, as well as$67$220 million for various projects in the Midwest. The substantially lower volumeMidwest and $120 million of new awards in the first half of 2020 compared to the same period in 2019 was due to the timing of biddingadditional funding for and awards of prospective project opportunities, which the Company expects will occur later in 2020 or 2021, whereas the prior year first-half period included the $1.4 billion Purple Line Section 3 Stationsa mass-transit project in California. Several large Civil segment opportunities are expected to bid andand/or potentially be awarded to the Company later this year and in 2021. However, the2022. The COVID-19 pandemic is resultinghas resulted in significant revenue shortfalls for many state and local government agencies that could result insince 2020, and may continue to cause the deferraldeferrals or cancellationcancellations of certain new projects, depending on the allocation and prioritization of state and local funding, as well as the availability, timing and magnitude of anticipated supplemental funding from the federal government.$5.5$4.8 billion as of June 30, 2020March 31, 2021 compared to $6.2$5.7 billion as of June 30, 2019.March 31, 2020. The decrease has been the result of relatively fewer and smaller new awards over the past year primarily due to impacts from the COVID-19 pandemic and comparatively higher backlog inrevenue over the prior year period was primarily driven by the Purple Line Section 3 Stations project awarded in the first quarter of 2019. same period. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, substantial anticipated funding from various voter-approved transportation measures and public agencies’ long-term spending plans. The Civil segment is well-positioned to continue capturing its share of these prospective projects.income (loss) from construction operations and adjusted income from construction operations for the Building segment are summarized as follows:Three Months Ended March 31, (in millions) 2021 2020 Revenue $ 407.2 $ 481.8 Income from construction operations 11.2 3.5 and six months ended June 30, 2020 increased 10% and 11%, respectively,March 31, 2021 decreased 15% compared to the same periodsperiod in 2019 2020, primarily due to increasedreduced project execution activities on various projects in California, Oklahomaa hospitality and the Northeast. The increases were partially offset by reduced activity on certain projects in California that are completed or nearing completion. Revenue grew in both periods of 2020 despite the negative impact of the COVID-19 pandemic, which resulted in delays on certain projects that impacted revenue by approximately $80 million and $115 million for the three and six months ended June 30, 2020, respectively.Excluding the goodwill impairment chargegaming project in the second quarterSoutheast, an airport facility project that was recently completed, also in the Southeast, and a project in the Northeast that is nearing completion.2019, Contentsadjustedand six months ended June 30, 2020March 31, 2021 increased 84% and 66%, respectively, compared to the first quarter of 2020, largely due to the absence of an immaterial unfavorable project close-out adjustment recognized in the same periodsperiod in 2019.2020, as well as lower operating costs associated with the aforementioned revenue reduction.for both periods was principally driven bydue to the above-mentioned factors mentioned above that drove the increases in revenue. The COVID-19 pandemic resulted in insignificant impacts on income from construction operations in both current year periods (an estimated $2 million and $3 million, respectively).Operating margin was 3.8% and 2.2% for the three and six months ended June 30, 2020, respectively, compared to operating margin of (0.9)% and (0.1)% and adjusted operating margin of 2.3% and 1.5% for the same periods in 2019, which excludes the impact of the goodwill impairment charge. The increase in adjusted operating margin for both periods was driven by the factors mentioned above that drove the increaseschanges in revenue and income from construction operations.$260$344 million and $443in 2021 compared to $183 million for the three and six months ended June 30, 2020, respectively, compared to $328 million and $1.4 billion for the same periodsperiod in 2019.2020. The lower volume ofmost significant new awardsaward in both periods of 2020 was due to the timing of prospective project opportunities, which are expected to be awarded later this year or in 2021, whereas the first halfquarter of 2019 included several sizeable new awards, such as the Choctaw Casino and Resort2021 was a $269 million government facility project in Oklahoma, a large hospitality and gamingCalifornia. As mentioned above in Executive Overview, the Company now anticipates booking the previously announced $478 million LAX Airport Metro Connector project in California and the Southland Gaming Casino and Hotel project in Arkansas. Significant new awardsinto backlog in the second quarter of 2020 i2021.ncluded over $235 million for various building projects in California, the largest of which was a $69 million education building. The COVID-19 pandemic is impacting demand in certain end markets, such as hospitality and gaming, which has resulted in and could continue to result in reduced project opportunities in those markets.$2.3$1.6 billion as of June 30, 2020March 31, 2021 compared to $2.9$2.5 billion as of June 30, 2019. March 31, 2020. The decrease was driven by revenue growth for the segment that exceeded the volume of new awards which were impacted byover the timing of bidding and award activities, including in some instances delays as a result of the COVID-19 pandemic.past year. The Building segment continues to have a large volume of prospective projects across various end markets and geographic locations. Barring any further adverse impacts from thecontinue due to ongoinggrow as economic conditions improve and as customer spending increases, which continue to be supported by a favorablehistorically low interest rate environment.loss from construction operations and adjusted lossincome from construction operations for the Specialty Contractors segment are summarized as follows:Three Months Ended March 31, (in millions) 2021 2020 Revenue $ 324.8 $ 282.3 Income from construction operations 1.3 8.3 and six months ended June 30, 2020March 31, 2021 increased 5% and 25%, respectively,15% compared to the same periodsperiod in 2019.2020. The increase for the year-to-date periodgrowth was principally driven by an overall increase inincreased electrical and mechanical project execution activities on various electrical and mechanical projectsa project in the Northeast.Revenue grew in both periods of 2020 despiteimpact of the COVID-19 pandemic, which resulted in delays on certain projects that negatively impacted revenue by approximately $35 million and $50 million for the three and six months ended June 30, 2020, respectively.Lossincrease, income from construction operations for the three and six months ended June 30, 2020 was $11.4March 31, 2021 decreased $7.0 million and $3.1 million, respectively, compared to a loss from construction operations of $159.8 millionthe same period in 2020, primarily due to unfavorable adjustments on two mechanical projects that were immaterial individually and $167.3 million for same periods in 2019. Excluding the impact of the goodwill impairment charge in the second quarter of 2019, adjusted loss from construction operationsaggregate.$3.6 million and $11.1 million0.4% for the three and six months ended June 30, 2019, respectively. The increase in adjusted loss from construction operations for the second quarter of 2020 was primarily due to the $13.2million unfavorable arbitration ruling pertaining to an electrical project in New York and the negative impact of the COVID-19 pandemic (an estimated $5 million), partially offset by increased activity on various projects in the Northeast. For the first half of 2020, the decreased loss from construction operations was primarily due to the absence of the prior year unfavorable adjustments described in the Executive Overview and net increased activity on various projects in the Northeast, partially offset by the $13.2million unfavorable arbitration ruling and the negative impact of the COVID-19 pandemic (an estimated $7 million).Operating margin was (4.9)% and (0.6)% for the three and six months ended June 30, 2020, respectively,March 31, 2021 compared to operating margin of (71.6)% and (40.3)% and adjusted operating margin of (1.6)% and (2.7)%2.9% for the same periodsperiod in 2019, which excludes the impact of the goodwill impairment charge. 2020. The changes in adjusted operating margins for both periods were mainly attributabledecrease was principally due to the aforementioned factors that drove the changes in revenue and adjusted income (loss) from construction operations.$81 million and $306$158 million for the three and six months ended June 30, 2020, respectively,March 31, 2021 compared to $439 million and $918$226 million for the same periodsperiod in 2019.2020. The COVID-19 pandemic has resulted in, and could continue to result in, reduced demand from certain commercial and government customers that arehave been experiencing funding constraints.$2.2$1.7 billion as of June 30, 2020March 31, 2021 compared to $2.3 billion as of June 30, 2019. March 31, 2020. The Specialty Contractors segment continues to be increasingly focused on servicing the Company’s growing backlog of large Civil and Building segment projects, but it also remains well-positioned to capture its share of new projects for external 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.$14.1$12.9 million and $24.8$10.7 million during the three and six months ended June 30,March 31, 2021 and 2020, respectively, compared to $13.6 million and $28.4 million duringrespectively. The increase in the three and six months ended June 30, 2019, respectively. The decrease in the six months ended June 30, 2020 compared to the same period in 2019March 31, 2021 was primarily due to lowerhigher compensation-related expenses.(Expense),Net, Interest Expense and Income Tax (Expense) BenefitExpenseThree Months Ended March 31, (in millions) 2021 2020 Other income, net Other income, net $ 0.2 $ 0.5 Interest expense (17.8) (16.4) Income tax expense Income tax expense (7.0) (5.1) Interest expense decreased $1.0 million both the three and six months ended June 30,March 31, 2021 and 2020, compared to the same periods in 2019.respectively. The decreases in the 2020 periods were primarily due to lower average interest rates on our line of credit.Thehigher effective income tax rate for the three and six months ended June 30, 2020 was 23.7% and 20.5%, respectively, compared to 12.0% and 11.6%, respectively, for the same periods in 2019. The effective income tax rate for the six months ended June 30, 20202021 period primarily reflects the absence of the favorable impact ofrecognized in the 2019 net operating loss (“NOL”), which is allowed to be carried back up to five years as a result2020 period associated with the enactment of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), enacted on March 27, 2020. Under the CARES Act, the Company’s NOLnet operating loss (“NOL”) generated in 2019 maywas allowed to be carried back to tax years when the federal statutory tax rate was 35% rather than the current rate of 21%, consequently generating a larger tax benefit from the NOL duethan the benefit recognized prior to the enactment of the CARES Act. The favorable impact to the tax rate resulting from the enactment of the CARES Act was partially offset by the unfavorable impact of the vesting of restricted stock unitsunit vesting, for which a large portion of the share-based compensation expense recognized in prior periods will not be deductible for income tax purposes. The Company’s provisions for income taxes and effective tax rates for the 2019 periods were significantly impacted by the goodwill impairment charge. For the three months ended June 30, 2019, the Company recognized a tax benefit of $42.9 million on a loss before income taxes of $358.3 million. The lower effective tax rates in the 2019 periods primarily resulted from the $379.9 million goodwill impairment charge discussed above of which approximately $209.5 million was not deductible for income tax purposes. The Company recognized a tax benefit totaling $50.4 million as a result of the impairment charge.The adjusted effective income tax rates, which exclude the tax benefit resulting from the goodwill impairment charge, were 34.7% and 34.0%, respectively, for the three and six months ended June 30, 2019 and primarily reflected the unfavorable impact of expired stock options for which the share-based compensation expense recognized in prior periods will not be deductible for income taxes. For a further discussion of income taxes, refer to Note 7 of the Notes to Condensed Consolidated Financial Statements.$350$175 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 $250$175 million and available cash balances as of June 30, 2020,March 31, 2021, will be sufficient to fund any working capital needs and debt maturities for the next 12 months, provided that we are not adversely impacted by unanticipated future events, including a material increasesincrease in the negative impact of the COVID-19 pandemic as discussed above in COVID-19 Update above. In addition, we expect that liquidity will continue to be positively impacted in 2020 by improved cash flow generation from project execution activities, settlements of disputed matters and certain provisions of the CARES Act, which enable the Company to accelerate the collection of tax refunds associated with the 2019 NOL carryback and allow the deferral of certain 2020 Social Security payroll tax liabilities until the end of 2021 and 2022. For a discussion of our 2017 Credit Facility and our Convertible Notes, see the section entitled Debt below.$182.6$318.7 million as of June 30, 2020March 31, 2021 compared to $193.7$374.3 million as of December 31, 2019.2020. Cash immediately available for general corporate purposes was $57.7$176.8 million and $43.8$210.8 million as of June 30, 2020March 31, 2021 and December 31, 2019,2020, respectively, with the remainder being amounts held by our consolidated joint ventures and also our proportionate share of cash held by our unconsolidated joint ventures. Cash held by our joint ventures was available only for joint venture-related uses, including distributions to joint venture partners. In addition, our restricted cash and restricted investments totaled $156.1 million as of March 31, 2021 compared to $156.5 million as of December 31, 2020. Restricted cash and restricted investments are primarily held primarily to secure insurance-related contingent obligations totaled $84.3 million asand to repay the outstanding principal balance of June 30, 2020 comparedthe Convertible Notes (see Note 9 of the Notes to $79.4 million as of December 31, 2019.sixthree months ended June 30, 2020,March 31, 2021, net cash provided byused in operating activities was $58.2$46.7 million, (with $92.2 million provided in the second quarter) due primarily to investments in project working capital partially offset by cash generated from earnings sources,partially offset by investment in working capital. In the second quarter of 2020, strong cash contributions associated with increased project execution activities on certain, higher-margin projects with favorable billing terms, driven by the Company’s near-record backlog at the end of 2019, were enhanced by the resolution and collection of approximately $40 million of disputed balances and a modest decrease in working capital. For the first half of 2020, the $58.2 million cash provided by operating activities resulted from the strong cash contributions associated with the increased project execution activities mentioned above and the resolution and collection of approximately $40 million of disputed balances noted above, which more than offset an increase of $68.5 million in investment in working capital.sources. The increase in workingsixthree months of 20202021 primarily reflects a decrease in accounts payable due to timing of payments to suppliers and subcontractors and a decrease in accrued expenses and other current liabilities, partially offset by a decrease in accounts receivable due to the timing of collections. During the three months ended March 31, 2020, net cash used in operating activities was $34.0 million due primarily to investments in project working capital partially offset by cash generated from earnings sources. The change in working capital primarily reflected an increase in accounts receivable due to timing of collections, partially offset by increasesan increase in billings in excess of costs and estimated earnings (“BIE”) and accounts payable due to timing of payments to suppliers and subcontractors. During the six months ended June 30, 2019, net cash used in operating activities was $111.5 million due primarily to investments in project working capital that exceeded cash generated from earnings sources. The change in working capital primarily resulted from an increase in accounts receivable due to timing of collections. increased $169.7decreased $12.7 million when comparing the first sixthree months of 20202021 with the same period of 2019.2020. The substantial increasedecrease in cash from operating activities in the first halfthree months of 20202021 compared to 20192020 substantially reflects the significantan increase in cash from earnings sources as well as a considerable reduction in investment in working capital primarily as a result of improved collections associated with substantial growth in project billings and, to a lesser degree, increasescurrent-year decrease in accounts payable and accrual balancescompared to an increase in the prior year due to timing of payments to vendors and subcontractors and a current-year decrease in billings in excess of costs and estimated earnings compared to an increase in the increased project activity.forin investing activities during the first sixthree months of 2020 and 20192021 was $32.6$5.4 million and $41.2 million, respectively, primarily due to the acquisition of property and equipment for projects.Forprojects totaling $9.8 million, partially offset by net cash provided from investment transactions of $4.0 million. Cash used in investing activities during the first sixthree months of 2020 netwas $14.6 million, primarily due to the acquisition of property and equipment for projects and investment in securities.used inprovided by financing activities was $36.2$1.1 million which was primarily driven by $30.9and $50.6 million, for the first three months of cash distributions to noncontrolling interests2021 and a $4.3 million net repayment of borrowings.2020, respectively. Net cash provided by financing activities for the comparable2020 period in 2019 was $187.5 million, which was primarily driven by increased net borrowings of $189.0 million.June 30, 2020,March 31, 2021, we had working capital of $1.3$1.9 billion, a ratio of current assets to current liabilities of 1.501.88 and a ratio of debt to equity of 0.57,0.65, compared to working capital of $1.4$1.8 billion, a ratio of current assets to current liabilities of 1.661.80 and a ratio of debt to equity of 0.580.66 at December 31, 2019.Summarized below arekey terms of the 2017 Credit Facility as of June 30, 2020. For additional information regarding our outstanding debt, refer to Note 9 of the Notes to Condensed Consolidated Financial Statements, as applicable.2017 Credit FacilityOn April 20, 2017, weCompany entered into a credit agreement (the “2017“2020 Credit Facility”Agreement”) with SunTrustBMO Harris Bank now known as Truist Bank,N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 20172020 Credit FacilityAgreement provides for a $350$425.0 million term loan B facility (the “Term Loan B”) and a $175.0 million revolving credit facility (the “2017“2020 Revolver”) and a sublimit, with sublimits for the issuance of letters of credit and swinglineswing line loans up to the aggregate amountamounts of $150$75.0 million and $10$10.0 million, respectively, both maturingrespectively. The Term Loan B will mature on April 20, 2022August 18, 2027 and the 2020 Revolver will mature on August 18, 2025, in each case, unless any of the Convertible2017 Senior Notes are outstanding on December 17, 2020, in which case all such borrowings will mature on December 17, 2020 (the “spring-forward provision”), provided however (i) if the Convertible Notes are refinanced in full with the proceeds of permitted refinancing indebtedness in accordance with the terms of the 2017 Credit Facility, the maturity date for the 2017 Credit Facility will remain April 20, 2022 and (ii) if the Company issues “New Convertible Notes” (as defined in the 2017 Credit Facility) and retires the Convertible Notes in full, the maturity date for the 2017 Credit Facility will be the earlier of (x) April 20, 2022 or (y) 90January 30, 2025 (which is 91 days prior to the maturity date for such New Convertible Notes. The 2017 Credit Facility also permits additional borrowings in an aggregate amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans. On May 7, 2019, certain provisions of the 2017 Credit Facility were amended, including settingSenior Notes), in which case, both the maximum leverage ratio at 3.50:1.00. Term Loan B and the 2020 Revolver will mature on January 30, 2025 (subject to certain further exceptions). For additionalmore information regarding the terms of our 20172020 Credit Facility,Agreement, refer to Note 9 of the Notes to Condensed Consolidated Financial Statements.As a result of the spring-forward provision mentioned above, the facility will mature on December 17, 2020 if the Convertible Notes remain outstanding at that time. The Company does not have call rights that allow it to unilaterally redeem the Convertible Notes. Due to the spring-forward provision in the 2017 Credit Facility, all borrowings under the facility, as well as the outstanding balance for the Convertible Notes due June 15, 2021, are included in “Current maturities of long-term debt” on the Condensed Consolidated Balance Sheet as of June 30, 2020. The Company continues to evaluate options to address the spring-forward provision and refinancing or retirement of the outstanding Convertible Notes. New credit arrangements are expected to be finalized in the third quarter of 2020.fixed charge coverage ratio and consolidatedfirst lien net leverage ratio under the 20172020 Credit FacilityAgreement for the period, which areis calculated on a rolling four-quarter basis:Twelve Months Ended June 30, 2020Fixed charge coverageFirst lien net leverage ratio4.900.75 to 1.00> or = 1.25≤ 2.75 : 1.00Leverage ratio2.33 to 1.00< or = 3.50 : 1.00June 30, 2020,March 31, 2021, we were in compliance and expect to continue to be in compliance with the covenants under the 20172020 Credit Facility.There discussion above, 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, 2019.2020.2019.2020. 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, 2019. See Note 8 of the Notes to Condensed Consolidated Financial Statements for a detailed discussion of our accounting policies related to goodwill.2019.2019,2020, updated by Note 11 of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.The risk factor discussed below is intendedThere have been no material changes to supplement theour risk factors previouslyas disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019. It updates and replaces the risk factor previously disclosed in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.The COVID-19 pandemic has adversely impacted, and could continue to adversely impact, our business, financial condition and results of operations.The World Health Organization declared the COVID-19 outbreak a pandemic and the U.S. Government declared a national emergency in March 2020. The COVID-19 pandemic has created volatility, uncertainty and economic disruption for the Company, our customers, subcontractors and suppliers, and the markets in which we do business. The scope and impact of the COVID-19 pandemic continues to evolve. Extraordinary and wide-ranging actions have been taken by international, federal, state and local public health and governmental authorities to contain and combat the spread of COVID-19, including stay-at-home or shelter-in-place orders, social distancing measures and travel restrictions for individuals and orders for many businesses to cease or curtail normal operations unless their work is deemed essential or critical.While we have not experienced project cancellations as a result of the COVID-19 pandemic, we have experienced disruptions to our business operations as the pandemic has spread through the geographies where we do business. For example, beginning in mid-March of 2020, work on some non-essential construction projects was suspended or curtailed by certain customers, primarily in our Building and Specialty Contractors segments, though the vast majority of our projects in the Civil segment have been designated as essential business, allowing us to continue our work on those projects. In addition, we have modified certain business and workforce practices and implemented new protocols to promote social distancing and enhance health and safety measures on our projects and in our offices to conform to regulatory requirements and best practices encouraged by governmental and regulatory authorities, all of which has negatively affected our operations and resulted in increases in operating expenses. We have also experienced absenteeism due to illness, quarantine or fear by our employees or those of our subcontractors on certain projects, which has resulted in some disruption of our work. The COVID-19 impacts to date have been primarily productivity inefficiencies due to project suspensions or absenteeism on certain projects, as well as additional costs associated with the new health and safety measures implemented in response to the pandemic. Any ongoing project suspensions, personnel absenteeism, or reduced work schedules or shifts required to comply with quarantines or other social distancing measures could continue to adversely affect our operations. In addition, as a result of COVID-19 containment efforts, we have experienced delays in certain bidding activities and also in legal proceedings and settlement discussions where we have claims against project owners for additional costs exceeding the contract price or for amounts not included in the original contract price. Consequently, our ability to resolve and recover on these types of claims may be delayed, which may adversely affect our liquidity and financial results.It remains too early to assess the full impact that the COVID-19 pandemic, and the actions taken in response to it, will have on our employees, our operating segments and practices, our customers, subcontractors and suppliers, and the regions that we serve, or on our financial condition and results of operations as a whole. The full impact depends on many factors that remain uncertain and subject to ongoing volatility, or that are not yet identifiable, and in many cases are out of our control. These factors could include, among other things: (1) the duration of the COVID-19 pandemic and the types and magnitude of adverse impacts on the U.S. and global economies; (2) the health and welfare of our employees, and those of our customers, subcontractors and suppliers; (3) evolving business and government actions in response to the pandemic, including stay-at-home measures, changes to what are considered “essential” businesses, social distancing measures, travel bans and additional health and safety requirements that we may be required to observe in order to continue working on our projects; (4) the varying impact that the pandemic may have on industries we serve and on government spending for infrastructure projects, including reduced government spending on infrastructure as a result of lower revenues from taxes, tolls and fares; (5) the response of our customers or prospective customers to the pandemic, including further delays, stoppages or terminations of existing projects or potential new awards; (6) increases in our receivables if our customers fail to pay, delay making payments, request financial concessions or if we experience delays in resolving claims and disputes (e.g., further delays in court proceedings or settlement discussions); (7) limitations and higher costs associated with obtaining financing; (8) potential challenges with suppliers that could limit the availability or cost of materials; (9) potential interruptions to our information systems and technology or breaches in our data security due to increasing use of remote communications and access; and (10) the timing of finding effective treatments, a vaccine or a cure for COVID-19. Such events may result in fewer or delayed project bidding opportunities or additional or further delays on existing projects.Any of these events or impacts we have experienced or identified could cause or contribute to the risks and uncertainties facing the Company and our customers and could materially and adversely affect our business or portions thereof, and our financial condition and results of operations. The COVID-19 pandemic, and the volatile economic conditions stemming from the pandemic, as well as reactions to future pandemics or resurgences of COVID-19, could also aggravate or heighten the risks posed by other risk factors that we identify in our Annual Report on Form 10-K for the year ended December 31, 2019, which in turn could materially and adversely affect our business, financial condition and results of operations. There may be other adverse consequences to our business, financial condition and results of operations from the spread of COVID-19 that are not presently known or that have not yet become apparent.As a result, we cannot assure you that if COVID-19 continues to spread, it would not have a further adverse impact on our business, financial condition and results of operations.3.110.1June 30, 2020,March 31, 2021, formatted in Inline XBRL (included as Exhibit 101).July 29, 2020May 5, 2021