(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 ☐ ☐ ☐ 51,072,182. 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. (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 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 As of December 31, 2020, restricted cash also included $69.9 million held to repay the outstanding principal balance of Convertible Notes, as defined in Note 9, which matured on June 15, 2021 and were repaid. (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 federal tax benefit) and share-based compensation expense that was not deductible for income tax purposes. 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 Interest Expense 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 six months ended June 30, The following table presents components of lease expense for the three and six months ended June 30, 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 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 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, filed a new motion to dismiss on additional grounds. 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 $2.9 million and $2.4 million as of June 30, 2021 and December 31, 2020, respectively. The Company paid approximately $0.3 million to settle liability classified awards during each of the six month periods ended June 30, 2021 and 2020. The following table sets forth a summary of the net periodic benefit cost for the three and six months ended June 30, 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. 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 (a)The only component of other comprehensive income (loss) attributable to noncontrolling interests is foreign currency translation. The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation during the three and six months ended June 30, 2020 were as follows: 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 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 following tables set forth certain reportable segment information relating to the Company’s operations for the three and six months ended June 30, 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)During the three months ended June 30, 2021, the Company recorded a reduction of $20.1 million in cost of operations (an after-tax impact of $14.6 million, or $0.28 per diluted share) due to a favorable legal judgment on a completed electrical project in New York in the Specialty Contractors segment. The judgment awarded the Company the recovery of certain costs previously incurred. 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 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 COVID-19 2020. Diluted earnings per common share for the three and six months ended June 30, and lower net income attributable to noncontrolling interests for the current-year periods compared to the same periods in 2020. For the three months ended June 30, 2021, the increase in net income attributable to the Company was also due to a lower effective income tax rate as compared to the 2020 period. a significant new health care facility project in California. The decline in backlog as of June 30, 2021 was a result of revenue that solidly outpaced the volume of new awards. The COVID-19 pandemic has negatively impacted the volume and timing of new awards in recent quarters. 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 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 has resulted in, and could continue to result in, reduced demand for our building construction services. 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 (Expense), Interest Expense and Income Tax 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 2020. Restricted cash and restricted investments at June 30, 2021 were primarily held to secure insurance-related contingent obligations. Restricted cash as of December 31, 2020 also included cash held to repay the $69.9 million outstanding principal balance of the Convertible Notes, which were repaid at maturity on June 15, 2021 (see Note 9 of the Notes to Condensed Consolidated Financial Statements). capital for the first six months of 2020 primarily prior year and a larger current-year increase in CIE compared to the prior year, partially offset by a current-year decrease in accounts receivable compared to an increase in the prior year. 2020. Statements. Trailing Four Fiscal Quarters Ended Actual Required As of June 30, Debt 2020. 2020. 10‑Q. Item 1A.Risk Factors Item 4.Mine Safety Disclosures Exhibits Description 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 June 30, 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 June 30, 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 ☐22, 202029, 2021 was 50,771,288.OFOF CONTENTSOPERATIONSThree Months Ended
June 30,Six Months Ended
June 30,(in thousands, except per common share amounts) 2021 2020 2021 2020 REVENUE $ 1,219,243 $ 1,276,427 $ 2,426,838 $ 2,527,156 COST OF OPERATIONS (1,091,754) (1,158,673) (2,188,894) (2,298,322) GROSS PROFIT 127,489 117,754 237,944 228,834 General and administrative expenses (58,736) (60,058) (119,487) (123,911) INCOME FROM CONSTRUCTION OPERATIONS INCOME FROM CONSTRUCTION OPERATIONS 68,753 57,696 118,457 104,923 Other income (expense) 1,431 (797) 1,606 (316) Interest expense (17,938) (16,464) (35,748) (32,900) INCOME BEFORE INCOME TAXES INCOME BEFORE INCOME TAXES 52,246 40,435 84,315 71,707 Income tax expense Income tax expense (10,635) (9,576) (17,599) (14,710) NET INCOME NET INCOME 41,611 30,859 66,716 56,997 LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 10,446 12,150 19,517 20,917 NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 31,165 $ 18,709 $ 47,199 $ 36,080 BASIC EARNINGS PER COMMON SHARE BASIC EARNINGS PER COMMON SHARE $ 0.61 $ 0.37 $ 0.93 $ 0.71 DILUTED EARNINGS PER COMMON SHARE DILUTED EARNINGS PER COMMON SHARE $ 0.61 $ 0.37 $ 0.92 $ 0.71 WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: BASIC 50,999 50,667 50,956 50,502 DILUTED 51,375 50,935 51,362 50,885 (LOSS)Three Months Ended
June 30,Six Months Ended
June 30,(in thousands) 2021 2020 2021 2020 NET INCOME $ 41,611 $ 30,859 $ 66,716 $ 56,997 OTHER COMPREHENSIVE INCOME, NET OF TAX: Defined benefit pension plan adjustments 491 424 983 847 Foreign currency translation adjustments 400 1,655 772 (2,358) Unrealized gain (loss) in fair value of investments 219 1,306 (964) 1,848 TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX 1,110 3,385 791 337 COMPREHENSIVE INCOME 42,721 34,244 67,507 57,334 LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 10,726 13,004 20,093 19,751 COMPREHENSIVE INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 31,995 $ 21,240 $ 47,414 $ 37,583 (in thousands, except share and per share amounts) As of June 30,
2021As of December 31,
2020ASSETS CURRENT ASSETS: Cash and cash equivalents ($91,700 and $105,735 related to variable interest entities (“VIEs”)) Cash and cash equivalents ($91,700 and $105,735 related to variable interest entities (“VIEs”)) $ 231,129 $ 374,289 Restricted cash 2,884 77,563 Restricted investments 85,545 78,912 Accounts receivable ($85,873 and $86,012 related to VIEs) Accounts receivable ($85,873 and $86,012 related to VIEs) 1,372,054 1,415,063 Retainage receivable ($139,617 and $122,335 related to VIEs) Retainage receivable ($139,617 and $122,335 related to VIEs) 683,966 648,441 Costs and estimated earnings in excess of billings ($90,294 and $39,846 related to VIEs) Costs and estimated earnings in excess of billings ($90,294 and $39,846 related to VIEs) 1,346,974 1,236,734 Other current assets ($49,867 and $51,746 related to VIEs) Other current assets ($49,867 and $51,746 related to VIEs) 252,735 249,455 Total current assets 3,975,287 4,080,457 456,693 489,217 GOODWILL 205,143 205,143 INTANGIBLE ASSETS, NET 105,801 123,115 OTHER ASSETS 149,176 147,685 TOTAL ASSETS $ 4,892,100 $ 5,045,617 LIABILITIES AND EQUITY CURRENT LIABILITIES: Current maturities of long-term debt, net of unamortized discount and debt issuance costs totaling $0 and $2,040 Current maturities of long-term debt, net of unamortized discount and debt issuance costs totaling $0 and $2,040 $ 36,941 $ 100,188 Accounts payable ($86,263 and $116,461 related to VIEs) Accounts payable ($86,263 and $116,461 related to VIEs) 692,835 794,611 Retainage payable ($30,681 and $26,439 related to VIEs) Retainage payable ($30,681 and $26,439 related to VIEs) 331,341 315,135 Billings in excess of costs and estimated earnings ($344,239 and $362,427 related to VIEs) Billings in excess of costs and estimated earnings ($344,239 and $362,427 related to VIEs) 764,029 839,222 Accrued expenses and other current liabilities ($7,096 and $9,595 related to VIEs) Accrued expenses and other current liabilities ($7,096 and $9,595 related to VIEs) 200,138 215,207 Total current liabilities 2,025,284 2,264,363 933,303 925,277 DEFERRED INCOME TAXES 85,386 82,966 OTHER LONG-TERM LIABILITIES 237,697 230,066 TOTAL LIABILITIES 3,281,670 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 51,072,182 and 50,827,205 shares Common stock - authorized 112,500,000 shares ($1 par value), issued and outstanding 51,072,182 and 50,827,205 shares 51,072 50,827 Additional paid-in capital 1,130,368 1,127,385 Retained earnings 469,584 422,385 Accumulated other comprehensive loss (46,526) (46,741) Total stockholders' equity 1,604,498 1,553,856 Noncontrolling interests 5,932 (10,911) TOTAL EQUITY 1,610,430 1,542,945 TOTAL LIABILITIES AND EQUITY $ 4,892,100 $ 5,045,617 Six Months Ended June 30, (in thousands) 2021 2020 Cash Flows from Operating Activities: Net income Net income $ 66,716 $ 56,997 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 44,821 34,180 Amortization of intangible assets 17,314 14,596 Share-based compensation expense 5,033 8,264 Change in debt discounts and deferred debt issuance costs Change in debt discounts and deferred debt issuance costs 3,868 7,046 Deferred income taxes 2,213 5,423 Loss on sale of property and equipment Loss on sale of property and equipment 360 31 Changes in other components of working capital (278,943) (68,471) Other long-term liabilities 6,801 1,295 Other, net 515 (1,131) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (131,302) 58,230 Cash Flows from Investing Activities: Acquisition of property and equipment (18,860) (31,386) Proceeds from sale of property and equipment 3,623 1,082 Investments in securities Investments in securities (18,096) (13,319) Proceeds from maturities and sales of investments in securities 10,497 10,985 NET CASH USED IN INVESTING ACTIVITIES (22,836) (32,638) Cash Flows from Financing Activities: Proceeds from debt 308,181 752,843 Repayment of debt (367,007) (757,141) Cash payments related to share-based compensation (1,625) (994) Distributions paid to noncontrolling interests (7,250) (30,910) Contributions from noncontrolling interests 4,000 0 NET CASH USED IN FINANCING ACTIVITIES NET CASH USED IN FINANCING ACTIVITIES (63,701) (36,202) Net decrease in cash, cash equivalents and restricted cash Net decrease in cash, cash equivalents and restricted cash (217,839) (10,610) Cash, cash equivalents and restricted cash at beginning of period 451,852 202,101 Cash, cash equivalents and restricted cash at end of period $ 234,013 $ 191,491 2019. 2020. The results of operations for the three and six months ended June 30, 20202021 may not be indicative of the results that will be achieved for the full year ending December 31, 2020.20202021 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.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)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, 20202021 and 2019.Three Months Ended
June 30,Six Months Ended
June 30,(in thousands) 2021 2020 2021 2020 Civil segment revenue by end market: Mass transit (includes certain transportation and tunneling projects) $ 366,534 $ 354,809 $ 675,409 $ 651,952 Bridges 65,775 89,100 111,942 141,284 Military defense facilities 44,585 35,042 94,121 58,652 Water 24,800 29,548 51,610 53,292 Highways 29,726 35,591 41,052 68,173 Other 23,932 24,886 56,793 82,252 Total Civil segment revenue $ 555,352 $ 568,976 $ 1,030,927 $ 1,055,605 UNAUDITEDThree Months Ended
June 30,Six Months Ended
June 30,(in thousands) 2021 2020 2021 2020 Building segment revenue by end market: Commercial and industrial facilities $ 101,960 $ 106,899 $ 232,012 $ 239,948 Hospitality and gaming 86,145 107,942 186,712 226,929 Municipal and government 74,475 79,223 146,384 148,725 Education facilities 46,143 47,038 84,460 78,660 Mass transit (includes transportation projects) 34,344 66,552 60,879 124,399 Mixed use 16,127 13,101 35,676 23,073 Health care facilities 13,598 32,418 24,007 68,307 Other 9,868 19,848 19,763 44,744 Total Building segment revenue $ 382,660 $ 473,021 $ 789,893 $ 954,785 Three Months Ended
June 30,Six Months Ended
June 30,(in thousands) 2021 2020 2021 2020 Specialty Contractors segment revenue by end market: Mass transit (includes certain transportation and tunneling projects) $ 148,045 $ 118,634 $ 329,208 $ 267,305 Commercial and industrial facilities 36,637 20,499 75,386 74,004 Multi-unit residential 30,649 37,611 73,444 64,104 Water 17,514 16,090 38,668 25,928 Education facilities 18,425 10,338 31,781 26,895 Mixed use 13,940 10,536 23,479 24,338 Other 16,021 20,722 34,052 34,192 Total Specialty Contractors segment revenue $ 281,231 $ 234,430 $ 606,018 $ 516,766 Three Months Ended
June 30, 2021Three Months Ended
June 30, 2020(in thousands) Civil Building Specialty
ContractorsTotal Civil Building Specialty
ContractorsTotal Revenue by customer type: State and local agencies $ 481,333 $ 92,275 $ 124,080 $ 697,688 $ 503,828 $ 157,748 $ 113,623 $ 775,199 Federal agencies 49,335 49,287 5,704 104,326 42,590 34,648 11,292 88,530 Private owners 24,684 241,098 151,447 417,229 22,558 280,625 109,515 412,698 Total revenue $ 555,352 $ 382,660 $ 281,231 $ 1,219,243 $ 568,976 $ 473,021 $ 234,430 $ 1,276,427 Six Months Ended
June 30, 2021Six Months Ended
June 30, 2020(in thousands) Civil Building Specialty
ContractorsTotal Civil Building Specialty
ContractorsTotal Revenue by customer type: State and local agencies $ 871,835 $ 168,856 $ 267,004 $ 1,307,695 $ 899,873 $ 303,764 $ 246,496 $ 1,450,133 Federal agencies 100,968 99,648 26,941 227,557 79,251 66,621 21,048 166,920 Private owners 58,124 521,389 312,073 891,586 76,481 584,400 249,222 910,103 Total revenue $ 1,030,927 $ 789,893 $ 606,018 $ 2,426,838 $ 1,055,605 $ 954,785 $ 516,766 $ 2,527,156 Three Months Ended
June 30, 2021Three Months Ended
June 30, 2020(in thousands) Civil Building Specialty
ContractorsTotal Civil Building Specialty
ContractorsTotal Revenue by contract type: Fixed price $ 461,068 $ 95,349 $ 246,290 $ 802,707 $ 455,928 $ 114,229 $ 205,531 $ 775,688 Guaranteed maximum price 498 247,402 2,563 250,463 281 248,738 4,038 253,057 Unit price 88,516 (1,564) 28,703 115,655 111,790 629 18,442 130,861 Cost plus fee and other 5,270 41,473 3,675 50,418 977 109,425 6,419 116,821 Total revenue $ 555,352 $ 382,660 $ 281,231 $ 1,219,243 $ 568,976 $ 473,021 $ 234,430 $ 1,276,427 Six Months Ended
June 30, 2021Six Months Ended
June 30, 2020(in thousands) Civil Building Specialty
ContractorsTotal Civil Building Specialty
ContractorsTotal Revenue by contract type: Fixed price $ 880,224 $ 179,798 $ 539,758 $ 1,599,780 $ 864,899 $ 219,827 $ 454,047 $ 1,538,773 Guaranteed maximum price 1,768 517,856 3,693 523,317 589 486,511 6,587 493,687 Unit price 141,249 (1,453) 57,000 196,796 183,148 1,163 39,593 223,904 Cost plus fee and other 7,686 93,692 5,567 106,945 6,969 247,284 16,539 270,792 Total revenue $ 1,030,927 $ 789,893 $ 606,018 $ 2,426,838 $ 1,055,605 $ 954,785 $ 516,766 $ 2,527,156 three-three and six-monthsix month periods ended June 30, 2021 related to performance obligations satisfied (or partially satisfied) in prior periods by $8.9 million and $29.0 million, respectively. Likewise, revenue was negatively impacted during the three and six month periods ended June 30, 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.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 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 June 30,
2021As of December 31,
2020Retainage receivable $ 683,966 $ 648,441 Costs and estimated earnings in excess of billings: Claims 821,206 752,783 Unapproved change orders 430,138 415,489 Other unbilled costs and profits 95,630 68,462 Total costs and estimated earnings in excess of billings 1,346,974 1,236,734 Capitalized contract costs 82,625 74,452 Total contract assets $ 2,113,565 $ 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.During the three and six months ended June 30, 2019, $8.6 million and $14.3 million, respectively,Table of previously capitalized contract costs were amortized and recognized as expense on the related contracts.ContentsTUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED(in thousands) As of June 30,
2021As of December 31,
2020Retainage payable $ 331,341 $ 315,135 Billings in excess of costs and estimated earnings 764,029 839,222 Total contract liabilities $ 1,095,370 $ 1,154,357 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 June 30,
2021As of December 31,
2020Cash and cash equivalents available for general corporate purposes $ 103,523 $ 210,841 Joint venture cash and cash equivalents 127,606 163,448 Cash and cash equivalents 231,129 374,289 Restricted cash 2,884 77,563 Total cash, cash equivalents and restricted cash $ 234,013 $ 451,852 Amounts included in restrictedare primarilyincludes 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 had no impact on diluted EPS because the Company has had the intent and ability to settle the principal amount in cash, and upon maturity on June 15, 2021, the Company repaid the remaining principal balance of the Convertible Notes inThree Months Ended June 30, Six Months Ended June 30, (in thousands, except per common share data) 2021 2020 2021 2020 Net income attributable to Tutor Perini Corporation Net income attributable to Tutor Perini Corporation $ 31,165 $ 18,709 $ 47,199 $ 36,080 Weighted-average common shares outstanding, basic 50,999 50,667 50,956 50,502 Effect of dilutive restricted stock units and stock options 376 268 406 383 Weighted-average common shares outstanding, diluted 51,375 50,935 51,362 50,885 Net income attributable to Tutor Perini Corporation per common share: Net income attributable to Tutor Perini Corporation per common share: Basic $ 0.61 $ 0.37 $ 0.93 $ 0.71 Diluted $ 0.61 $ 0.37 $ 0.92 $ 0.71 Anti-dilutive securities not included above 1,810 2,209 1,725 2,209 For the three and six months ended June 30, 2019, all outstanding restricted stock units and stock options were excluded from the calculation of weighted-average diluted shares outstanding due to the net loss for the period.23.7%20.4% and 20.5%20.9% for the three and six months ended June 30, 2020,2021, respectively. The effective income tax rate for the six months ended June 30, 2020 primarily reflects the favorable impact of the 2019 net operating loss (“NOL”), which is allowed to be carried back up to five years as a result of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), enacted on March 27, 2020. Under the CARES Act, the Company’s NOL generated in 2019 may be carried back to tax years when the federal statutory tax rateboth periods was 35% ratherlower than the current rate of 21%, consequently generating a larger tax benefit from the NOL due to the enactment of the CARES Act. The favorable impact resulting from the enactment of the CARES Act was partially offset by the unfavorable impact of the vesting of restricted stock units for which a large portion of the share-based compensation expense recognized in prior periods will 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 also as a result of state income taxes, with the increases partially offset byprimarily due to earnings attributable to noncontrolling interests for which income taxes are not the responsibility of the Company.ForCompany, with the three and six months ended June 30, 2019,decrease mostly offset by state income taxes (net of 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).provisions for income taxes and effective tax ratesrate 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 that2020 was not tax deductible23.7% and yielded permanent differences between book income and taxable income.20.5%, respectively. 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%rate for the three and six months ended June 30, 2019, respectively, and primarily reflected2020 was higher than 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 the21% federal statutory rate also as a result ofprimarily due to state income taxes with(net of the increasesfederal tax benefit), partially offset by earnings attributable to noncontrolling interestsinterests. The effective income tax rate for whichthe six months ended June 30, 2020 was lower than the 21% federal statutory rate primarily due to the favorable tax rate differential realized on the 2019 net operating loss carryback under the Coronavirus Aid, Relief, and Economic Security Act and earnings attributable to noncontrolling interests. These favorable tax rate items for the first half of 2020 were partially offset by state income taxes are not the responsibility(net of the Company.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 June 30, 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 wasDuring 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 June 30, 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 (24,998) (23,232) 26,120 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (22,630) (16,645) 525 12 years Construction contract backlog 149,290 (120,544) — 28,746 3 years Total $ 387,040 $ (168,172) $ (113,067) $ 105,801 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 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, 2020,2021, amortization expense is estimated to be $19.5$18.1 million for the remainder of 2020, $26.42021, $14.9 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 June 30,
2021As of December 31,
20202017 Senior Notes $ 495,749 $ 495,271 Term Loan B 408,414 408,458 2020 Revolver 0 0 0 67,878 Equipment financing and mortgages 48,781 47,594 Other indebtedness 17,300 6,264 Total debt 970,244 1,025,465 36,941 100,188 Long-term debt, net $ 933,303 $ 925,277 balancebalances to the reported debt balances as of June 30, 20202021 and December 31, 2019:2020:As of June 30, 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 $ (4,251) $ 495,749 $ 500,000 $ (4,729) $ 495,271 Term Loan B 422,875 (14,461) 408,414 423,938 (15,480) 408,458 Convertible Notes 0 0 0 69,918 (2,040) 67,878 2017 Credit Facility2020 Revolver were $2.9$2.4 million and $3.7$2.6 million as of June 30, 20202021 and December 31, 2019,2020, respectively, and are included in other assets inon the Condensed Consolidated Balance Sheets.Prior to May 1, 2020, the Company could have redeemed the 2017 Senior Notes at a redemption price equal to 100%Table 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 redeemed up to 40% of the original aggregate principal amount of the notes at a redemption price of 106.875% of their principal amount with the proceeds received by the Company from any offering of the Company’s equity. Since May 1, 2020, theContents20172020 Credit Facility,Agreement, as defined below.above. In addition, the indenture for the 2017 Senior Notes provides for customary covenants, including events of default and restrictions on the payment of dividends and share repurchases.2017 Credit FacilityOn April 20, 2017, the Company entered into a credit agreement (the “2017 Credit Facility”) with SunTrust Bank, 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, in 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 of the 2017 Credit Facility, the maturity date for the 2017 Credit Facility will remain April 20, 2022 and (ii) if the Company issues “New Convertible Notes” (as defined in the 2017 Credit Facility) and retires the Convertible Notes in full, the maturity date for the 2017 Credit Facility will be the earlier of (x) April 20, 2022 or (y) 90 days prior to the maturity date for such New Convertible Notes. The 2017 Credit Facility also permits additional borrowings in an aggregate amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans.Borrowings under the 2017 Revolver bear interest, at the Company’s option, at a rate equal to (a) 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 NotesOn June 15, 2016, the Company issued $200 million of 2.875% Convertible Senior Notes due June 15, 2021 (the “Convertible Notes”) in a private placement offering. The Convertible Notes are unsecured obligations of the Company and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company. The Convertible Notes bear interest at a rate of 2.875% per year, payable in cash semi-annually in June and December, and are included in “Current maturities of long-term debt” on the Condensed Consolidated Balance Sheet as of June 30, 2020.Prior to January 15, 2021, the Convertible Notes will be convertible only under the following circumstances: (1) during the five business day period after any 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) upon the occurrence of specified corporate events. On or after January 15, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.The Convertible Notes will be convertible at an initial conversion rate of 33.0579 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $30.25. The conversion rate will be subject to adjustment for some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, the Company is required to increase, in certain circumstances, theTUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDconversion 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 June 30, 2020, the conversion provisions of the Convertible Notes have not been triggered.OperationsIncome consisted of the following:Three Months Ended
June 30,Six Months Ended
June 30,(in thousands) 2021 2020 2021 2020 Cash interest expense: Interest on 2017 Senior Notes $ 8,593 $ 8,593 $ 17,187 $ 17,187 Interest on Term Loan B 6,115 N/A 12,209 N/A Interest on 2020 Revolver 552 N/A 673 N/A Interest on 2017 Credit Facility N/A 2,338 N/A 4,753 Interest on Convertible Notes 418 1,438 921 2,875 Other interest 409 535 890 1,039 Total cash interest expense 16,087 12,904 31,880 25,854 Amortization of discount and debt issuance costs on Convertible Notes 941 2,933 2,040 5,797 Amortization of discount and debt issuance costs on Term Loan B 527 N/A 1,066 N/A Amortization of debt issuance costs on 2020 Revolver 142 N/A 284 N/A Amortization of debt issuance costs on 2017 Credit Facility N/A 402 N/A 804 Amortization of debt issuance costs on 2017 Senior Notes 241 225 478 445 Total non-cash interest expense 1,851 3,560 3,868 7,046 Total interest expense $ 17,938 $ 16,464 $ 35,748 $ 32,900 ____________________________________________________________________________________________________2020.2021.2020,2021, 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.UNAUDITED20202021 and 2019:Three Months Ended
June 30,Six Months Ended
June 30,(in thousands) 2021 2020 2021 2020 Operating lease expense $ 3,707 $ 3,661 $ 7,425 $ 7,428 18,301 23,056 39,426 40,321 22,008 26,717 46,851 47,749 Less: Sublease income 176 329 346 658 Total lease expense $ 21,832 $ 26,388 $ 46,505 $ 47,091 ____________________________________________________________________________________________________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 June 30,
2021As of December 31,
2020Assets Right-of-use assets Right-of-use assets Other assets $ 57,265 $ 55,897 Total lease assets $ 57,265 $ 55,897 Liabilities Current lease liabilities Accrued expenses and other current liabilities $ 8,332 $ 7,661 Long-term lease liabilities Other long-term liabilities 52,667 51,336 Total lease liabilities $ 60,999 $ 58,997 Weighted-average remaining lease term Weighted-average remaining lease term 11.9 years 12.5 years Weighted-average discount rate 9.39 % 9.22 % Six Months Ended
June 30,(in thousands) 2021 2020 Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ (6,855) $ (7,386) Non-cash activity: Right-of-use assets obtained in exchange for lease liabilities Right-of-use assets obtained in exchange for lease liabilities $ 5,780 $ 4,923 2020:Operating Leases 2021 (excluding the six months ended June 30, 2021) 2021 (excluding the six months ended June 30, 2021) $ 6,803 2022 12,192 2023 9,384 2024 7,518 2025 2025 6,704 Thereafter 66,403 Total lease payments 109,004 Less: Imputed interest 48,005 Total $ 60,999 UNAUDITED2020,2021, 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.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDHowever, on December 19, 2018,On August 2, 2021, the Court of Appeal grantedreversed in part and affirmed in part the Company’s request for a discretionary appeal of those rulings. The appeal is expected to be heard in late 2020. STP submitted damages to the Insurerseffective limitations in the King County lawsuit in the amount of $532 million.September 2018 rulings. STP also sought these$532 million of damages from WSDOT related to the pipe-strike by the TBM in a related lawsuit in Thurston County (see following paragraph). The appeal is expected to be heard in 2021.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 for the Southern District of New York seeking to challenge the denial of its third-party beneficiary rights under the lease agreement’s “cure” provisions and to avoid being subordinate to the claims of the secured lenders in the bankruptcy proceedings.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 againstdismiss TPBC’s causes of action. On March 29, 2021, 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.2020,2021, 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.2020,2021, there were 1,185,0891,307,945 shares of common stock available for grant under the Tutor Perini Corporation Omnibus Incentive Plan. During the first six months of 20202021 and 2019,2020, the Company granted the following share-based instruments: (1) restricted stock units totaling 75,000280,000 and 175,00075,000 with weighted-average fair values per share of $18.59 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$15.21 and $7.57,$3.94, respectively, and weighted-average per share exercise prices of $25.70$19.24 and $25.62,$25.70, respectively; and (3) unrestricted stock units totaling 194,17796,668 and 98,591194,177 with weighted-average fair values per share of $15.62 and $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 six 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.2020,2021, the Company recognized, as part of general and administrative expenses, costs for share-based payment arrangements totaling $2.6 million and $5.0 million, respectively, and $3.8 million and $8.3 million, respectively, and $4.6 million and $10.1 million for the three and six months ended June 30, 2019,2020, respectively. As of June 30, 2020,2021, the balance of unamortized share-based compensation expense was $14.8$13.8 million, which is expected to be recognized over a weighted-average period of 1.72.2 years.UNAUDITED20202021 and 2019:Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2021 2020 2021 2020 Interest cost $ 582 $ 758 $ 1,164 $ 1,516 Service cost Service cost 237 231 473 462 Expected return on plan assets (1,015) (1,006) (2,030) (2,012) Recognized net actuarial losses Recognized net actuarial losses 683 592 1,366 1,184 Net periodic benefit cost $ 487 $ 575 $ 973 $ 1,150 $2.2$1.0 million and $2.0$2.2 million to its defined benefit pension plan during each of the six-month periodssix months ended June 30, 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 unobservable20202021 and December 31, 2019:2020:As of June 30, 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 $ 231,129 $ 0 $ 0 $ 231,129 $ 374,289 $ 0 $ 0 $ 374,289 2,884 0 0 2,884 77,563 0 0 77,563 0 85,545 0 85,545 0 78,912 0 78,912 45,803 55,174 0 100,977 92,609 1,300 0 93,909 Total $ 279,816 $ 140,719 $ 0 $ 420,535 $ 544,461 $ 80,212 $ 0 $ 624,673 ____________________________________________________________________________________________________2020,2021, consist of investments in corporate debt securities of $43.9 million, U.S. government agency securities of $37.5 million, corporate debt securities of $36.8$40.7 million and corporate certificates of deposits of $1.1$0.9 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, 20202021 and December 31, 20192020 was not materially different from the fair value.20202021 are comprised of money market funds of $98.8$45.8 million, corporate debt securities of $53.9 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$89.6$92.6 million and municipal bonds of $1.2$1.3 million. The amortized cost of these available-for-sale securities at June 30, 20202021 and December 31, 20192020 was not materially different from the fair value.$484.4$517.2 million and $485.0$495.0 million as of June 30, 20202021 and December 31, 2019,2020, respectively. The fair value of theTUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED$190.7 million and $193.4$69.1 million as of June 30,December 31, 2020 and December 31, 2019, respectively.the Company repaid the remaining principal balance of the notes at maturity on June 15, 2021. 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 June 30, 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, 20202021 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.2020,2021, the Company had unconsolidated VIE-related current assets and liabilities of $3.4$2.0 million and $3.3$1.9 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.$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)UNAUDITED20202021 and 20192020 is provided below:Three Months Ended June 30, 2021 (in thousands) Common
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossNoncontrolling
InterestsTotal
EquityBalance - March 31, 2021 Balance - March 31, 2021 $ 50,938 $ 1,127,624 $ 438,419 $ (47,356) $ 2,456 $ 1,572,081 Net income — — 31,165 — 10,446 41,611 Other comprehensive income — — — 830 280 1,110 Share-based compensation — 3,171 — — — 3,171 Issuance of common stock, net 134 (427) — — — (293) Distributions to noncontrolling interests — — — — (7,250) (7,250) Balance - June 30, 2021 Balance - June 30, 2021 $ 51,072 $ 1,130,368 $ 469,584 $ (46,526) $ 5,932 $ 1,610,430 Six Months Ended June 30, 2021 (in thousands) Common
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossNoncontrolling
InterestsTotal
EquityBalance - December 31, 2020 Balance - December 31, 2020 $ 50,827 $ 1,127,385 $ 422,385 $ (46,741) $ (10,911) $ 1,542,945 Net income — — 47,199 — 19,517 66,716 Other comprehensive income Other comprehensive income — — — 215 576 791 Share-based compensation — 4,757 — — — 4,757 Issuance of common stock, net 245 (1,774) — — — (1,529) Contributions from noncontrolling interests Contributions from noncontrolling interests — — — — 4,000 4,000 Distributions to noncontrolling interests — — — — (7,250) (7,250) Balance - June 30, 2021 Balance - June 30, 2021 $ 51,072 $ 1,130,368 $ 469,584 $ (46,526) $ 5,932 $ 1,610,430 Three Months Ended June 30, 2020 (in thousands) Common
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossNoncontrolling
InterestsTotal
EquityBalance - 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 UNAUDITEDSix Months Ended June 30, 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 — — 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 20202021 and 20192020 were as follows:
____________________________________________________________________________________________________Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 (in thousands) Before-Tax Amount Tax Expense Net-of-Tax Amount Before-Tax Amount Tax Expense Net-of-Tax Amount Other comprehensive income (loss): Defined benefit pension plan adjustments $ 683 $ (192) $ 491 $ 592 $ (168) $ 424 Foreign currency translation adjustments 446 (46) 400 1,973 (318) 1,655 Unrealized gain in fair value of investments 303 (84) 219 1,602 (296) 1,306 Total other comprehensive income 1,432 (322) 1,110 4,167 (782) 3,385 280 0 280 854 0 854 Total other comprehensive income attributable to Tutor Perini Corporation $ 1,152 $ (322) $ 830 $ 3,313 $ (782) $ 2,531 Six Months Ended June 30, 2021 Six Months Ended June 30, 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 $ 1,366 $ (383) $ 983 $ 1,183 $ (336) $ 847 Foreign currency translation adjustments 848 (76) 772 (2,954) 596 (2,358) Unrealized gain (loss) in fair value of investments (1,247) 283 (964) 2,359 (511) 1,848 Total other comprehensive income 967 (176) 791 588 (251) 337 576 0 576 (1,166) 0 (1,166) Total other comprehensive income attributable to Tutor Perini Corporation $ 391 $ (176) $ 215 $ 1,754 $ (251) $ 1,503 Three Months Ended June 30, 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 March 31, 2021 $ (43,595) $ (5,246) $ 1,485 $ (47,356) Other comprehensive income before reclassifications 0 120 233 353 Amounts reclassified from AOCI 491 0 (14) 477 Total other comprehensive income 491 120 219 830 Balance as of June 30, 2021 $ (43,104) $ (5,126) $ 1,704 $ (46,526) Six Months Ended June 30, 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 0 196 (827) (631) Amounts reclassified from AOCI 983 0 (137) 846 Total other comprehensive income (loss) 983 196 (964) 215 Balance as of June 30, 2021 $ (43,104) $ (5,126) $ 1,704 $ (46,526) UNAUDITEDThree Months Ended June 30, 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 March 31, 2020 $ (37,403) $ (7,364) $ 1,639 $ (43,128) Other comprehensive income before reclassifications 0 801 1,335 2,136 Amounts reclassified from AOCI 424 0 (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 (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, 2019 $ (37,826) $ (5,371) $ 1,097 $ (42,100) Other comprehensive income (loss) before reclassifications 0 (1,192) 1,881 689 Amounts reclassified from AOCI 847 0 (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) changes insignificant items reclassified out of AOCI balances by component (after tax) attributable to Tutor Perini Corporationand the corresponding location and impact on the Consolidated Statements of Income during the three and six months ended June 30, 20192021 and 2020 were as follows:TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDLocation in Consolidated Three Months Ended
June 30,Six Months Ended
June 30,(in thousands) Statements of Income 2021 2020 2021 2020 Component of AOCI: Defined benefit pension plan adjustments Other income, net $ 683 $ 592 $ 1,366 $ 1,183 Income tax benefit Income tax expense (192) (168) (383) (336) Net of tax $ 491 $ 424 $ 983 $ 847 Unrealized gain in fair value of investment adjustments Other income, net $ (17) $ (37) $ (173) $ (42) Income tax expense Income tax expense 3 8 36 9 Net of tax $ (14) $ (29) $ (137) $ (33) 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.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED20202021 and 2019:Reportable Segments (in thousands) Civil Building Specialty
ContractorsTotal Corporate Consolidated
TotalThree Months Ended June 30, 2021 Total revenue $ 643,055 $ 415,801 $ 281,370 $ 1,340,226 $ — $ 1,340,226 Elimination of intersegment revenue (87,703) (33,141) (139) (120,983) — (120,983) Revenue from external customers $ 555,352 $ 382,660 $ 281,231 $ 1,219,243 $ — $ 1,219,243 Income (loss) from construction operations $ 75,073 $ (2,488) $ 9,960 $ 82,545 (a) $ (13,792) (b) $ 68,753 Capital expenditures $ 8,616 $ 51 $ 19 $ 8,686 $ 339 $ 9,025 $ 31,178 $ 424 $ 892 $ 32,494 $ 2,767 $ 35,261 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 (d) $ (14,103) (b) $ 57,696 Capital expenditures $ 18,951 $ 186 $ 255 $ 19,392 $ 301 $ 19,693 $ 21,775 $ 428 $ 995 $ 23,198 $ 2,767 $ 25,965 ____________________________________________________________________________________________________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.Reportable Segments (in thousands) Civil Building Specialty
ContractorsTotal Corporate Consolidated
TotalSix Months Ended June 30, 2021 Total revenue $ 1,226,199 $ 872,971 $ 606,318 $ 2,705,488 $ — $ 2,705,488 Elimination of intersegment revenue (195,272) (83,078) (300) (278,650) — (278,650) Revenue from external customers $ 1,030,927 $ 789,893 $ 606,018 $ 2,426,838 $ — $ 2,426,838 Income (loss) from construction operations $ 125,178 $ 8,728 $ 11,284 $ 145,190 (a) $ (26,733) (b) $ 118,457 Capital expenditures $ 18,180 $ 124 $ 164 $ 18,468 $ 392 $ 18,860 $ 53,891 $ 856 $ 1,851 $ 56,598 $ 5,537 $ 62,135 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 (d) $ (24,792) (b) $ 104,923 Capital expenditures $ 30,143 $ 198 $ 728 $ 31,069 $ 317 $ 31,386 $ 40,391 $ 855 $ 1,988 $ 43,234 $ 5,542 $ 48,776 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, the Company recorded a charge of $13.2 million in 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 June 30, Six Months Ended June 30, (in thousands) 2021 2020 2021 2020 Income from construction operations $ 68,753 $ 57,696 $ 118,457 $ 104,923 Other income (expense) 1,431 (797) 1,606 (316) Interest expense (17,938) (16,464) (35,748) (32,900) Income before income taxes $ 52,246 $ 40,435 $ 84,315 $ 71,707 follows:(in thousands) As of June 30,
2021As of December 31,
2020Civil $ 3,253,753 $ 3,141,991 Building 1,052,374 1,147,649 Specialty Contractors 659,633 673,891 (73,660) 82,086 Total assets $ 4,892,100 $ 5,045,617 ____________________________________________________________________________________________________20202021 and the results of our operations for the three and six months ended June 30, 20202021 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,10‑Q, the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10-K10‑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-K10‑K for the year ended December 31, 20192020 and in Part II, Item 1A below.10-Q,10‑Q, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results, which are intended to be covered by the safe harbor provision for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are statements that could be deemed forward-looking statements. Words such as “achieve,” “anticipate,” “assumes,” “believes,” “continue,” “could,” “estimate,” “expects,” “forecast,” “hope,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “would,” variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Although such statements are based on currently available financial and economic data, as well as management’s estimates and expectations, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors potentially contributing to such differences include, among others:•The impact of the COVID-19 pandemic and related events that are beyond our control, including possible effects on our business and operations, customers and suppliers, and employees, contractors and subcontractors, which could affect adversely our projects and the geographic regions in which we conduct business;A significant slowdown or decline in economic conditions;•Revisions of estimates of contract risks, revenue or costs; the timing of new awards; or the pace of project executionexecution; or economic factors, including inflation, 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;•Increased competition and failure to secure new contracts;•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 cancellations of, or reductions in scope under, contracts reported in our backlog;•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;•FailureClient cancellations of, or reductions in scope under, contracts reported in our backlog;meet our obligations under our debt agreements;cyberattack, systems failures or other similar events;•Decreases in the level of government spending for infrastructure and other public projects;Downgrades in our credit ratings;•Failure of our joint venture partners to perform their venture obligations, which could impose additional financial and performance obligations on us, resulting in reduced profits or losses;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.existing stockholders and could adversely affect the market price of our common stock.Executive OverviewUpdateIn the first quarter ofpandemic in early 2020, the outbreakpandemic has caused occasional shortages in available manpower, reductions in field labor productivity, other inefficiencies, delays to project schedules and deferrals of project execution. As a novel strainresult, we continue to incur incremental costs, much of coronavirus, COVID-19, was declared a pandemic. Efforts inwhich 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, together with certain incremental project opportunities that resulted from the United Statespandemic, has helped to preventmitigate 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. The COVID-19 pandemic did not have anpandemic's negative impact on our business until mid-March 2020. The pandemic continuedfinancial results. In addition, we continue to impactexperience delays in certain projects throughlegal proceedings, as well as delays in certain settlement discussions where we have claims against project owners for additional costs exceeding the middle to latter part of the second quarter, when certain states and cities began easing some restrictions to allowcontract price or 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 and 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 projectsamounts not included in the Specialty Contractors segmentoriginal contract price. These delays in New Yorkresolving and certain projects in the Building segment in Californiarecovering on such 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.DueThe duration of effectiveness of the vaccines, as well as their effectiveness against future variants is uncertain. As such, due to the fluidity of the COVID-19 pandemic, uncertainties as to its scope and duration, and ongoing changes in the way that governments, businesses and individuals react and respond to the pandemic, the Company is unable at this time to accurately predict the pandemic’s future impact on the Company’s business, results of operations, financial condition or liquidity. Among other things, governments could prohibit the continuation of certain projects that to date have been designated as “essential” or could impose health, safety and other operational requirements on such projects that could result in delays to or suspensions of such projects. In addition, employees and contractors working on such projects could be unable or unwilling to continue working on them, perhaps for extended periods. The COVID-19 pandemic also could negatively affect the ability of counterparties or joint venture partners to make required payments on a timely basis or at all.Despite the impacts from the COVID-19 pandemic described above, consolidated20202021 was $1.3$1.22 billion and $2.5$2.43 billion, an increase of 13% and 21%, respectively, compared to $1.1$1.28 billion and $2.1$2.53 billion for the same periods in 2019. The growth was primarily attributable to increased activities on several infrastructure projects in California, Minnesota, and the Northeast, and certain building projects in California and Oklahoma.2020. The increases were partially offset by the COVID-19 impacts mentioned above.Income from construction operations for the 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. Adjusted 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 increaseslight decrease for both periods was primarily driven by contributions fromdue to reduced project execution activities in 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 wereBuilding segment, partially offset by increased volume in the $13.2million impactSpecialty Contractors segment. Revenue for both periods of an unfavorable arbitration ruling related2020 and 2021 was negatively impacted by the COVID-19 pandemic, which has resulted in delays in new awards and the execution of certain projects.an electrical project in New York, incremental non-cash amortization expense of $7.9$68.8 million and $12.8$118.5 million for the three and six months ended June 30, 2020,2021, respectively, relatedcompared to $57.7 million and $104.9 million for the same periods in 2020. The increase for both periods was primarily driven by improved overall results in the Specialty Contractors segment mostly due to the resolution of various contract disputes that had a net favorable impact in 2021 and the absence of the impact of an unfavorable arbitration ruling in 2020, as well as increased equity interest in a joint venture that the Company acquiredprofitability in the fourth quarter of 2019,Civil segment due to a continued shift towards higher-margin projects. The increase was partially offset by unfavorable results in the Building segment.the COVID-19 impacts mentioned above.The provision for income taxes was $9.6 million and $14.7 million20.9% for the three and six months ended June 30, 2020,2021, respectively, compared to an income tax benefit of $42.9 million and $40.7 million for the same periods in 2019. The effective tax rate was 23.7% and 20.5% for the comparable periods in 2020. See Corporate, Tax and Other Matters below for a discussion of the change in the effective tax rate.2020,2021 was $31.2 million and $47.2 million, respectively, compared to 12.0%$18.7 million and 11.6%$36.1 million for the comparablesame periods 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. See Corporate, Tax and Other Matters below for a discussion of the changes in the effective tax rate.20202021 was $0.37$0.61 and $0.71,$0.92, respectively, 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$0.37 and $0.17$0.71 for the three and six months ended June 30,same periods in 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, was $0.18 and $0.17, respectively. The increase in adjusted diluted earnings per common sharenet income attributable to the Company, and correspondingly EPS, for both periods was principallyprimarily due to the factors discussed above that drove the increase in income from construction operations.20202021 totaled $0.6 billion and $1.6 billion, respectively, compared to $0.7 billion and $1.3 billion, respectively, compared to $0.9 billion and $4.2 billion for the same periods in 2019.2020. The lower volume of new awards in both current year periodsBuilding segment 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. The Civil and Building segments were the primary contributorscontributor to the new award activity in the second quarter of 2020.2021. The most significant new awards in the second quarter of 2021 included more than $300a $152 million of additional funding for various mass-transit projects, over $235courthouse project in California and $88 million for various building projects in California, the largest of which was a $69 million education building, and $67 million for various civil infrastructure projects in the Midwest. The COVID-19 pandemic has resulted in and could potentially continue to result in delaysCompany anticipates booking several significant new awards into backlog in the biddingthird quarter of 2021, including the $471 million LAX Airport Metro Connector project, the $220 million I-70 Missouri River Bridge project and awarding of certain projects the Company is pursuing due to customer funding constraints and administrative challenges.20202021 was $10.0$7.5 billion, down 10% 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, 2020,2021, the mix of backlog by segment was approximately 55%58% for Civil, 23%22% for Building and 22%20% for Specialty Contractors.20192020 to June 30, 2020:2021:(in millions) Revenue
RecognizedCivil $ 4,783.6 $ 576.3 $ (1,030.9) $ 4,329.0 Building 1,702.3 730.3 (789.9) 1,642.7 Specialty Contractors 1,859.8 294.9 (606.0) 1,548.7 Total $ 8,345.7 $ 1,601.5 $ (2,426.8) $ 7,520.4 Becauseremains fluiddue to, among other things, the uncertainty of vaccination coverage, infection rates, the duration of effectiveness of vaccinations, their effectiveness against current and uncertain, the Company cannot assess the degreefuture variants and how government entities and our customers respond to which it might experience future adverse impacts.these factors. 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 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 respond to the economic burdens of the COVID-19 pandemic, they may delay or cancel planned infrastructure investments due to reduced revenues from income and sales taxes, fuel taxes and tolls. The extent of such effects, their duration, and how state and local governments will respond remains uncertain, just as the scope and duration of the COVID-19 pandemic remains uncertain. The possibility of additional federal financial assistance or stimulus programs directedtoward assisting state and local governments or specifically targeting significant investments in infrastructureInterest rates have been discussed as possible additional pieces of the federal government’s ongoing response to the COVID-19 pandemic. Such additional federal financial assistance or stimulus programs could favorably impact the Company’s current work and prospective opportunities, 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 to interest rates that remainremained 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 June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Revenue $ 555.4 $ 569.0 $ 1,030.9 $ 1,055.6 Income from construction operations 75.1 65.4 125.2 111.5 2020 increased 20% and 31%, respectively,2021 decreased 2% compared to the same periods in 2019. 2020.Thegrowthdecline for both periods was primarily due to overall increased project execution activities on various mass-transit projects in California and Minnesota. The COVID-19 pandemic had an insignificant impact on revenue in both periods (an estimated $15 million and $25 million, respectively).Excluding the goodwill impairment charge in the second quarter of 2019, adjusted2021, income from construction operations for the three and six months ended June 30, 20202021 increased 43%15% and 27%12%, respectively, compared to the same periods in 2019.2020. The increase for both periods was primarily driven bydue to contributions from certain higher-margin projects. For the volume growth mentioned above and improved performance on certain projects,six-month period of 2021, the increase was partially offset by net volume reductions mostly related to certain projects that have completed or are nearing completion.impactthree and six months ended June 30, 2021, respectively, compared to 11.5% and 10.6% for the same periods in 2020. The margin increases for both periods of incremental non-cash amortization expense of $7.92021 reflect the segment’s continued shift towards higher-margin projects.$12.8$576 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 fourth quarter of 2019. The COVID-19 pandemic resulted in insignificant impacts on 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, 2020,2021, 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.New awards in the Civil segment totaled $377 million and $555 million for the three and six months ended June 30, 2020, respectively, compared to $149 million and $1.8 billion for the same periods in 2019.2020. The increased levelvolume of new awards in the second quarter of 2020 was primarily driven by more than $300 million of additional funding for various mass-transit projects, as well as$67 million for various projects in the Midwest. The substantially lower volume of new awards in the first half of 2020 compared to the same period in 2019 was2021 declined due to the timing of bidding fornew project bids and awards of prospective project opportunities, whichawards. However, the Company expects will occur lateranticipates booking the $220 million I-70 Missouri River Bridge project into backlog in 2020 orthe third quarter of 2021 whereas the prior year first-half period included the $1.4 billion Purple Line Section 3 Stations project in California. Severaland also has several large Civil segment opportunities that 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.2020 compared2020. The decrease has been the result of relatively fewer and smaller new awards over the past six months primarily due to $6.2 billion asthe timing of June 30, 2019. The higher backlog inupcoming bids for large prospective projects and impacts from the prior year period was primarily driven by the Purple Line Section 3 Stations project awarded in the first quarter of 2019. COVID-19 pandemic on new awards. 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. from construction operations and adjusted income from construction operations for the Building segment are summarized as follows:Three Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Revenue $ 382.7 $ 473.0 $ 789.9 $ 954.8 Income (loss) from construction operations (2.5) 17.8 8.7 21.3 2020 increased 10%2021 decreased 19% and 11%17%, respectively, compared to the same periods in 2019 2020, primarily due to increasedreduced project execution activities on various projects in California, Oklahoma and the Northeast. The increases were partially offset by reduced activity on certain projects in California that are completed or nearing completion. Revenue grewcompletion, partially offset by increased activity in both periods of 2020 despite the negative impact ofthe current year related to work that had been deferred by the COVID-19 pandemic which resultedon a technology project in delays on certain projects that impacted revenue by approximately $80California in the prior year.$115income from construction operations for the six months ended June 30, 2021 was $8.7 million, compared to income from construction operations of $17.8 million and $21.3 million for the three and six months ended June 30, 2020, respectively.Excluding the goodwill impairment charge The change for both periods was principally due to unfavorable adjustments on certain projects, which were immaterial individually and in the second quarter of 2019, adjusted income from construction operationsaggregate, as well as the volume reductions mentioned above.2020 increased 84% and 66%,2021, respectively, compared to the same periods in 2019. The increase for both periods was principally driven by the 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 excludes2020. The decreases were due to the impact of the goodwill impairment charge. The increase in adjusted operating margin for both periods was driven by theabove-mentioned factors mentioned above that drove the increaseschanges in revenue and income (loss) from construction operations.$260$386 million and $443$730 million for the three and six months ended June 30, 2020,2021, respectively, compared to $328$260 million and $1.4 billion$443 million for the same periods in 2019.2020. The lower volume of new awards 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 half of 2019 included several sizeable new awards, such as the Choctaw Casino and Resort project in Oklahoma, a large hospitality and gaming project in California and the Southland Gaming Casino and Hotel project in Arkansas. Significantmost significant new awards in the second quarter of 2020 included over $2352021 were a $152 million for various building projectscourthouse project in California and a $43 million government facility project in Mississippi. As mentioned above in Executive Overview, the largestCompany anticipates booking the $471 million LAX Airport Metro Connector project, as well as a significant new health care facility project in California, into backlog in the third quarter of which was a $69 million education building. 2021.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.2020 compared to $2.9 billion as of June 30, 2019. 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 delayspast six months, as a result of the COVID-19 pandemic.pandemic delayed certain new awards for prospective projects. The Building segment continues to have a large volume of prospective projects across various end markets and geographic locations. Barring any further adverse impacts fromWe expect demand to grow as economic conditions improve and customer spending increases, which continue to be supported by a historically low interest rate environment. However, theservices is expected to continue due to ongoing customer spending supported by a favorable interest rate environment.loss from construction operations and adjusted lossincome (loss) from construction operations for the Specialty Contractors segment are summarized as follows:Three Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Revenue $ 281.2 $ 234.4 $ 606.0 $ 516.8 Income (loss) from construction operations 10.0 (11.4) 11.3 (3.1) 20202021 increased 5%20% and 25%17%, respectively, compared to the same periods in 2019.2020. The increasegrowth for the year-to-date periodboth periods was principally driven by an overall increase inincreased project execution activities on various electrical and mechanicalcertain projects in the Northeast.Revenue grew in both periods of 2020 despite the impact 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.Loss20202021 was $11.4$10.0 million and $3.1$11.3 million, respectively, compared to a loss from construction operations of $159.8$11.4 million and $167.3$3.1 million for samethe comparable periods in 2019. Excluding the impact2020. The increase for both periods of the goodwill impairment charge2021 was primarily due to a $20.1 million favorable adjustment related to a legal judgment on a completed electrical project in New York, partially offset by unfavorable adjustments in the second quarter of 2019, adjusted loss2021 related to the resolution of disputes on certain electrical and mechanical projects in New York, which were immaterial individually and in the aggregate. The increase was also driven by the absence of a $13.2 million prior-year second-quarter impact from construction operationsan adverse arbitration ruling related to another electrical project in New York.$3.6 million3.5% and $11.1 million1.9% and 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 due2021, respectively, compared 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, compared to operating margin of (71.6)% and (40.3)% and adjusted operating margin of (1.6)% and (2.7)% for the same periods in 2019, which excludes the impact of the goodwill impairment charge. 2020. The changesincreases in adjusted operating margins for both periodsmargin were mainly attributableprincipally due to the aforementioned factors that drove the changes in revenue and adjusted income (loss) from construction operations.$81$137 million and $306$295 million for the three and six months ended June 30, 2020,2021, respectively, compared to $439$81 million and $918$306 million for the same periods 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.2020 compared2020. The decrease was driven by revenue that exceeded the volume of new awards over the past six months, as new awards have continued to $2.3 billion as of June 30, 2019. be negatively impacted by the COVID-19 pandemic. 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.respectively, compared to $13.6 million and $28.4 million during 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 2019 was primarily due to lower compensation-related expenses.(Expense) BenefitExpenseThree Months Ended June 30, Six Months Ended June 30, (in millions) 2021 2020 2021 2020 Other income (expense) $ 1.4 $ (0.8) $ 1.6 $ (0.3) Interest expense (17.9) (16.5) (35.7) (32.9) Income tax expense Income tax expense (10.6) (9.6) (17.6) (14.7) Interest expense decreased $1.0 million for both the three and six months ended June 30, 2020 compared to the same periods in 2019. The decreases in the 2020 periods were primarily due to lower average interest rates on our line of credit.income tax rate was 20.4% and 20.9% for the three and six months ended June 30, 2020 was2021, respectively, compared to 23.7% and 20.5%, respectively, compared to 12.0% and 11.6%, respectively, for the same periods in 2019.2020, respectively. The higher effective income tax rate for the six months ended June 30, 20202021 is primarily reflectsdue to the absence of the favorable rate impact ofrecognized in the 20192020 period from the net operating loss (“NOL”), which is allowed to be carried back up to five yearscarryback as a result of the Coronavirus Aid, Relief, and Economic Security Act, (“CARES Act”), enacted on March 27, 2020. Under the CARES Act, the Company’s NOL generated in 2019 may be carried back to tax years when the federal statutory tax rate was 35% rather than the current rate of 21%, consequently generating a larger tax benefit from the NOL due to the enactment of the CARES Act. The favorable impact resulting from the enactment of the CARES Actwhich was partially offset by the unfavorable impact of the vesting of restricted stock units for which a large portion of the share-based compensation expense recognized in prior periods will not be deductible for income tax purposes. adjustments. 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 reflected2021 were favorably impacted by lower state income taxes compared to the unfavorable impact of expired stock options for which the share-based compensation expense recognizedsame periods in prior periods will not be deductible for income taxes. 2020. 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, 2020,2021, 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 material increases in the negative impact offurther impacts related to 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.$182.6$231.1 million as of June 30, 20202021 compared to $193.7$374.3 million as of December 31, 2019.2020. Cash immediately available for general corporate purposes was $57.7$103.5 million and $43.8$210.8 million as of June 30, 20202021 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 held primarily to secure insurance-related contingent obligations, totaled $84.3$88.4 million as of June 30, 20202021 compared to $79.4$156.5 million as of December 31, 2019.(with $92.2 million provided in the second quarter)due primarily to 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. The increase in workingreflectsreflected an increase in accounts receivable due to timing of collections, partially offset by increases in billings in excess of costs and estimated earnings (“BIE”)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 $189.5 million when comparing the first six months of 20202021 with the same period of 2019.2020. The substantial increasedecrease in cash from operating activities in the first halfsix 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, a current-year decrease in BIE compared to an increase in the increased project activity.forin investing activities during the first six months of 2020 and 20192021 was $32.6$22.8 million and $41.2 million, respectively, primarily due to the acquisition of property and equipment for projects.Forprojects totaling $18.9 million, as well as net cash used in investment transactions of $7.6 million. Cash used in investing activities during the first six months of 2020 netwas $32.6 million, primarily due to the acquisition of property and equipment for projects. Net cash provided by financing activities for the comparable period in 2019 was $187.5 million, which was primarily driven by increased net borrowings of $189.0 million.2020,2021, we had working capital of $1.3$2.0 billion, a ratio of current assets to current liabilities of 1.501.96 and a ratio of debt to equity of 0.57,0.60, 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 termsCompany entered into a 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 issuance of letters of credit and swing line loans up to the aggregate amounts of $75.0 million and $10.0 million, respectively. The Term Loan B will mature on August 18, 2027 and the 2020 Revolver will mature on August 18, 2025, in each case, unless any of the 2017 Credit Facility asSenior Notes are outstanding on January 30, 2025 (which is 91 days prior to the maturity of Junethe 2017 Senior Notes), in which case, both the Term Loan B and the 2020 Revolver will mature on January 30, 2020.2025 (subject to certain further exceptions). For additionalmore information regarding the terms of our outstanding debt,2020 Credit Agreement, refer to Note 9 of the Notes to Condensed Consolidated Financial Statements, as applicable.2017 Credit FacilityOn April 20, 2017, we entered into a credit agreement (the “2017 Credit Facility”) with SunTrust Bank, now known as Truist Bank, as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicateTable of other lenders. The 2017 Credit Facility provides for a $350 million revolving credit facility (the “2017 Revolver”) and a sublimit for the issuance of letters of credit and swingline loans up to the aggregate amount of $150 million and $10 million, respectively, both maturing on April 20, 2022 unless any of the Convertible Notes are outstanding on December 17, 2020, in which case all such borrowings will mature on December 17, 2020 (the “spring-forward provision”), Contentsprovided however (i) if the Convertible Notes are refinanced in full with the proceeds of permitted refinancing indebtedness in accordance with the terms of the 2017 Credit Facility, the maturity date for the 2017 Credit Facility will remain April 20, 2022 and (ii) if the Company issues “New Convertible Notes” (as defined in the 2017 Credit Facility) and retires the Convertible Notes in full, the maturity date for the 2017 Credit Facility will be the earlier of (x) April 20, 2022 or (y) 90 days prior to the maturity date for such New Convertible Notes. The 2017 Credit Facility also permits additional borrowings in an aggregate amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans. On May 7, 2019, certain provisions of the 2017 Credit Facility were amended, including setting the maximum leverage ratio at 3.50:1.00. For additional information regarding the terms of our 2017 Credit Facility, refer to Note 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, 20202021Fixed charge coverageFirst lien net leverage ratio4.900.94 to 1.00> or = 1.25≤ 2.75 : 1.00Leverage ratio2.33 to 1.00< or = 3.50 : 1.002020,2021, we were in compliance and expect to continue to be in compliance with the covenants under the 20172020 Credit Facility.Agreement.There discussion above, there have been no material changes in our contractual obligations from those described in our Annual Report on Form 10-K10‑K for the year ended December 31, 2019.2020.10-K10‑K for the year ended December 31, 2019.2020. Our critical accounting policies are also identified and discussed in Item 7 of our Annual Report on Form 10-K10‑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.10-K10‑K for the year ended December 31, 2019.10-Q10‑Q was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (a) were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.10-K10‑K for the year ended December 31, 2019,2020, updated by Note 11 of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.discussed below is intended to supplementupdates and replaces the risk factorsfactor under the same heading previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019. It updates2020.replacescosts requires management to make significant estimates and assumptions that may change substantially throughout the risk factorproject lifecycle, which has previously disclosedresulted, and in Part II, Item 1A ofthe future could result, in a material impact to our Quarterly Reportconsolidated financial statements. In addition, cost overruns, including unanticipated cost increases on Form 10-Q forfixed price and guaranteed maximum price contracts, have previously resulted, and in the quarter ended March 31, 2020.The COVID-19 pandemic has adverselyfuture may result, in lower profits or losses. Economic factors, including inflation, could also subject us to higher costs, which we may not be able to fully recover in future projects that we are bidding, and may also decrease profit on our existing contracts, in particular with respect to our fixed price, unit price and guaranteed maximum price contracts. Changes in laws, policies or regulations, including tariffs and taxes, have previously impacted, and 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 continuefuture could impact, the prices for materials or equipment. Further, 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 dependshave historically fluctuated, and may continue to fluctuate, quarterly and annually depending 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 pandemicwhen new awards occur and the typescommencement and magnitudeprogress of adverse impactswork 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.3.131.131.1 2020,2021, formatted in Inline XBRL (included as Exhibit 101).July 29, 2020August 4, 2021