UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	March 31, ~~2022~~2023
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ___________ to ___________

Commission File Number: 1-6314

Tutor Perini Corporation

(Exact Name of Registrant as Specified in its Charter)

MASSACHUSETTS


(State or Other Jurisdiction of Incorporation or Organization)

15901 OLDEN STREET, SYLMAR, CALIFORNIA


(Address of Principal Executive Offices)

04-1717070


(I.R.S. Employer Identification No.)

91342-1093


(Zip Code)

(818) 362-8391

(Registrant’s Telephone Number, Including Area Code)

None

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	TPC	The New York Stock Exchange

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

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

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

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

The number of shares of common stock, $1.00 par value per share, of the registrant outstanding at April ~~28, 2022~~27, 2023 was ~~51,200,161.~~51,644,903.

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS


			Page Numbers
Part I.	Financial Information:
	Item 1.	Financial Statements:
		Condensed Consolidated Statements of Operations for the Three Months Ended March 31 , 202 23 and 202 12 (Unaudited)	3
		Condensed Consolidated Statements of Comprehensive Income (Loss) for ~~the~~the Three Months Ended March 31 ~~2022~~, 202 3 and 202 12 (Unaudited)	4
		Condensed Consolidated Balance Sheets as of March 31, ~~2022~~2023 and December 31, 202 12 (Unaudited)	5
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31 ~~2022~~, 202 3 and 202 12 (Unaudited)	6
		Notes to Condensed Consolidated Financial Statements (Unaudited)	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2729
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3437
	Item 4.	Controls and Procedures	3437
Part II.	Other Information:
	Item 1.	Legal Proceedings	3538
	Item 1A.	Risk Factors	3538
	Item 4.	Mine Safety Disclosures	3538
	Item 5.	Other Information	38
	Item 6.	Exhibits	3538
	Signature		3639

Table of Contents

PART I. – FINANCIAL INFORMATION

Item 1. Financial Statements

TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

UNAUDITED


		Three Months Ended March 31,				Three Months Ended March 31,
(in thousands, except per common share amounts)	(in thousands, except per common share amounts)	2022		2021			(in thousands, except per common share amounts)	2023		2022
REVENUE	REVENUE	$	952,154	$	1,207,595		REVENUE	$	776,300	$	952,154
COST OF OPERATIONS	COST OF OPERATIONS	(901,809)		(1,097,140)			COST OF OPERATIONS	(800,469)		(901,809)
GROSS PROFIT		50,345		110,455
GROSS PROFIT (LOSS)							GROSS PROFIT (LOSS)	(24,169)		50,345
General and administrative expenses	General and administrative expenses	(60,252)		(60,751)			General and administrative expenses	(57,776)		(60,252)
INCOME (LOSS) FROM CONSTRUCTION OPERATIONS		(9,907)		49,704
LOSS FROM CONSTRUCTION OPERATIONS							LOSS FROM CONSTRUCTION OPERATIONS	(81,945)		(9,907)
Other income, net	Other income, net	3,697		175			Other income, net	6,417		3,697
Interest expense	Interest expense	(16,492)		(17,810)			Interest expense	(21,513)		(16,492)
INCOME (LOSS) BEFORE INCOME TAXES		(22,702)		32,069
Income tax (expense) benefit		3,889		(6,964)
NET INCOME (LOSS)		(18,813)		25,105
LOSS BEFORE INCOME TAXES							LOSS BEFORE INCOME TAXES	(97,041)		(22,702)
Income tax benefit							Income tax benefit	48,112		3,889
NET LOSS							NET LOSS	(48,929)		(18,813)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	2,821		9,071			LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	267		2,821
NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION		$	(21,634)	$	16,034
BASIC EARNINGS (LOSS) PER COMMON SHARE		$	(0.42)	$	0.31
DILUTED EARNINGS (LOSS) PER COMMON SHARE		$	(0.42)	$	0.31
NET LOSS ATTRIBUTABLE TO TUTOR PERINI CORPORATION							NET LOSS ATTRIBUTABLE TO TUTOR PERINI CORPORATION	$	(49,196)	$	(21,634)
BASIC LOSS PER COMMON SHARE							BASIC LOSS PER COMMON SHARE	$	(0.95)	$	(0.42)
DILUTED LOSS PER COMMON SHARE							DILUTED LOSS PER COMMON SHARE	$	(0.95)	$	(0.42)
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:	WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:						WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:
BASIC	BASIC	51,107		50,913			BASIC	51,551		51,107
DILUTED	DILUTED	51,107		51,348			DILUTED	51,551		51,107

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

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

UNAUDITED

Three Months Ended
March 31,
(in thousands) 2022 2021
NET INCOME (LOSS) $ (18,813) $ 25,105
OTHER COMPREHENSIVE LOSS, NET OF TAX:
Defined benefit pension plan adjustments 458 492
Foreign currency translation adjustments 257 372
Unrealized loss in fair value of investments (4,204) (1,183)
TOTAL OTHER COMPREHENSIVE LOSS, NET OF TAX (3,489) (319)
COMPREHENSIVE INCOME (LOSS) (22,302) 24,786
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 2,442 9,367
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ (24,744) $ 15,419


	Three Months Ended March 31,
(in thousands)	2023		2022
NET LOSS	$	(48,929)	$	(18,813)

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Defined benefit pension plan adjustments	301		458
Foreign currency translation adjustments	250		257
Unrealized gain (loss) in fair value of investments	1,329		(4,204)
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX	1,880		(3,489)

COMPREHENSIVE LOSS	(47,049)		(22,302)
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	420		2,442
COMPREHENSIVE LOSS ATTRIBUTABLE TO TUTOR PERINI CORPORATION	$	(47,469)	$	(24,744)

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

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED


(in thousands, except share and per share amounts)	(in thousands, except share and per share amounts)	As of March 31, 2022		As of December 31, 2021		(in thousands, except share and per share amounts)	As of March 31, 2023		As of December 31, 2022

ASSETS	ASSETS					ASSETS
CURRENT ASSETS:	CURRENT ASSETS:					CURRENT ASSETS:
Cash and cash equivalents ($167,391 and $102,679 related to variable interest entities (“VIEs”))		$	316,499	$	202,197
Cash and cash equivalents ($166,416 and $168,408 related to variable interest entities (“VIEs”))						Cash and cash equivalents ($166,416 and $168,408 related to variable interest entities (“VIEs”))	$	282,695	$	259,351
Restricted cash	Restricted cash	4,870		9,199		Restricted cash	19,946		14,480
Restricted investments	Restricted investments	85,075		84,355		Restricted investments	88,240		91,556
Accounts receivable ($102,702 and $116,415 related to VIEs)		1,413,246		1,454,319
Retention receivable ($169,106 and $162,259 related to VIEs)		542,301		568,881
Costs and estimated earnings in excess of billings ($121,545 and $143,105 related to VIEs)		1,356,607		1,356,768
Other current assets ($42,356 and $43,718 related to VIEs)		216,400		186,773
Accounts receivable ($69,197 and $54,040 related to VIEs)						Accounts receivable ($69,197 and $54,040 related to VIEs)	1,140,592		1,171,085
Retention receivable ($157,729 and $187,615 related to VIEs)						Retention receivable ($157,729 and $187,615 related to VIEs)	563,967		585,556
Costs and estimated earnings in excess of billings ($83,546 and $83,911 related to VIEs)						Costs and estimated earnings in excess of billings ($83,546 and $83,911 related to VIEs)	1,299,786		1,377,528
Other current assets ($29,553 and $33,340 related to VIEs)						Other current assets ($29,553 and $33,340 related to VIEs)	132,321		179,215
Total current assets	Total current assets	3,934,998		3,862,492		Total current assets	3,527,547		3,678,771
PROPERTY AND EQUIPMENT (“P&E”), net of accumulated depreciation of $496,617 and $483,417 (net P&E of $4,595 and $2,203 related to VIEs)		425,966		429,645
PROPERTY AND EQUIPMENT (“P&E”), net of accumulated depreciation of $510,604 and $505,512 (net P&E of $28,773 and $22,133 related to VIEs)						PROPERTY AND EQUIPMENT (“P&E”), net of accumulated depreciation of $510,604 and $505,512 (net P&E of $28,773 and $22,133 related to VIEs)	441,606		435,088
GOODWILL	GOODWILL	205,143		205,143		GOODWILL	205,143		205,143
INTANGIBLE ASSETS, NET	INTANGIBLE ASSETS, NET	79,563		85,068		INTANGIBLE ASSETS, NET	69,983		70,542
OTHER ASSETS	OTHER ASSETS	146,488		142,550		OTHER ASSETS	232,499		153,256
TOTAL ASSETS	TOTAL ASSETS	$	4,792,158	$	4,724,898	TOTAL ASSETS	$	4,476,778	$	4,542,800

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
CURRENT LIABILITIES:	CURRENT LIABILITIES:					CURRENT LIABILITIES:
Current maturities of long-term debt	Current maturities of long-term debt	$	23,285	$	24,406	Current maturities of long-term debt	$	66,228	$	70,285
Accounts payable ($73,743 and $96,097 related to VIEs)		559,152		512,056
Retention payable ($38,461 and $37,007 related to VIEs)		228,690		268,945
Billings in excess of costs and estimated earnings ($390,885 and $355,270 related to VIEs)		844,618		761,689
Accrued expenses and other current liabilities ($10,088 and $8,566 related to VIEs)		199,412		210,017
Accounts payable ($33,540 and $36,484 related to VIEs)						Accounts payable ($33,540 and $36,484 related to VIEs)	471,938		495,345
Retention payable ($44,481 and $44,859 related to VIEs)						Retention payable ($44,481 and $44,859 related to VIEs)	245,972		246,562
Billings in excess of costs and estimated earnings ($471,199 and $480,839 related to VIEs)						Billings in excess of costs and estimated earnings ($471,199 and $480,839 related to VIEs)	978,505		975,812
Accrued expenses and other current liabilities ($3,147 and $5,082 related to VIEs)						Accrued expenses and other current liabilities ($3,147 and $5,082 related to VIEs)	171,604		179,523
Total current liabilities	Total current liabilities	1,855,157		1,777,113		Total current liabilities	1,934,247		1,967,527
LONG-TERM DEBT, less current maturities, net of unamortized discount and debt issuance costs totaling $16,350 and $17,109		979,769		969,248
DEFERRED INCOME TAXES		69,890		70,989
LONG-TERM DEBT, less current maturities, net of unamortized discount and debt issuance costs totaling $13,136 and $13,980						LONG-TERM DEBT, less current maturities, net of unamortized discount and debt issuance costs totaling $13,136 and $13,980	914,454		888,154

OTHER LONG-TERM LIABILITIES	OTHER LONG-TERM LIABILITIES	240,821		233,828		OTHER LONG-TERM LIABILITIES	238,370		245,135
TOTAL LIABILITIES	TOTAL LIABILITIES	3,145,637		3,051,178		TOTAL LIABILITIES	3,087,071		3,100,816
COMMITMENTS AND CONTINGENCIES (NOTE 10)	COMMITMENTS AND CONTINGENCIES (NOTE 10)	0		0		COMMITMENTS AND CONTINGENCIES (NOTE 10)
EQUITY	EQUITY					EQUITY
Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Preferred stock - authorized 1,000,000 shares ($1 par value), none issued	Preferred stock - authorized 1,000,000 shares ($1 par value), none issued	—		—		Preferred stock - authorized 1,000,000 shares ($1 par value), none issued	—		—
Common stock - authorized 112,500,000 shares ($1 par value), issued and outstanding 51,200,161 and 51,095,706 shares		51,200		51,096
Common stock - authorized 112,500,000 shares ($1 par value), issued and outstanding 51,644,903 and 51,521,336 shares						Common stock - authorized 112,500,000 shares ($1 par value), issued and outstanding 51,644,903 and 51,521,336 shares	51,645		51,521
Additional paid-in capital	Additional paid-in capital	1,134,688		1,133,150		Additional paid-in capital	1,142,081		1,140,933
Retained earnings	Retained earnings	492,676		514,310		Retained earnings	255,105		304,301
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(46,745)		(43,635)		Accumulated other comprehensive loss	(45,310)		(47,037)
Total stockholders' equity	Total stockholders' equity	1,631,819		1,654,921		Total stockholders' equity	1,403,521		1,449,718
Noncontrolling interests	Noncontrolling interests	14,702		18,799		Noncontrolling interests	(13,814)		(7,734)
TOTAL EQUITY	TOTAL EQUITY	1,646,521		1,673,720		TOTAL EQUITY	1,389,707		1,441,984
TOTAL LIABILITIES AND EQUITY	TOTAL LIABILITIES AND EQUITY	$	4,792,158	$	4,724,898	TOTAL LIABILITIES AND EQUITY	$	4,476,778	$	4,542,800

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

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED


		Three Months Ended March 31,					Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021		(in thousands)	2023		2022
Cash Flows from Operating Activities:	Cash Flows from Operating Activities:					Cash Flows from Operating Activities:
Net income (loss)		$	(18,813)	$	25,105
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net loss						Net loss	$	(48,929)	$	(18,813)
Adjustments to reconcile net loss to net cash provided by operating activities:						Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	Depreciation	14,733		20,231		Depreciation	9,849		14,733
Amortization of intangible assets	Amortization of intangible assets	5,505		6,643		Amortization of intangible assets	559		5,505
Share-based compensation expense	Share-based compensation expense	3,417		2,448		Share-based compensation expense	3,071		3,417
Change in debt discounts and deferred debt issuance costs	Change in debt discounts and deferred debt issuance costs	901		2,017		Change in debt discounts and deferred debt issuance costs	1,004		901
Deferred income taxes	Deferred income taxes	(52)		95		Deferred income taxes	(86,265)		(52)
(Gain) loss on sale of property and equipment		(132)		20
Gain on sale of property and equipment						Gain on sale of property and equipment	(4,975)		(132)
Changes in other components of working capital	Changes in other components of working capital	112,448		(108,385)		Changes in other components of working capital	148,182		112,448
Other long-term liabilities	Other long-term liabilities	2,489		5,027		Other long-term liabilities	(2,256)		2,489
Other, net	Other, net	251		95		Other, net	1,088		251
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		120,747		(46,704)
NET CASH PROVIDED BY OPERATING ACTIVITIES						NET CASH PROVIDED BY OPERATING ACTIVITIES	21,328		120,747

Cash Flows from Investing Activities:	Cash Flows from Investing Activities:					Cash Flows from Investing Activities:
Acquisition of property and equipment	Acquisition of property and equipment	(12,028)		(9,835)		Acquisition of property and equipment	(17,796)		(12,028)
Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	1,434		457		Proceeds from sale of property and equipment	6,540		1,434
Investments in securities	Investments in securities	(4,657)		(2,910)		Investments in securities	(386)		(4,657)
Proceeds from maturities and sales of investments in securities	Proceeds from maturities and sales of investments in securities	383		6,870		Proceeds from maturities and sales of investments in securities	4,755		383
NET CASH USED IN INVESTING ACTIVITIES	NET CASH USED IN INVESTING ACTIVITIES	(14,868)		(5,418)		NET CASH USED IN INVESTING ACTIVITIES	(6,887)		(14,868)

Cash Flows from Financing Activities:	Cash Flows from Financing Activities:					Cash Flows from Financing Activities:
Proceeds from debt	Proceeds from debt	284,552		74,251		Proceeds from debt	259,500		284,552
Repayment of debt	Repayment of debt	(275,910)		(75,939)		Repayment of debt	(238,101)		(275,910)
Cash payments related to share-based compensation	Cash payments related to share-based compensation	(1,009)		(1,236)		Cash payments related to share-based compensation	(123)		(1,009)
Distributions paid to noncontrolling interests	Distributions paid to noncontrolling interests	(7,500)		—		Distributions paid to noncontrolling interests	(8,500)		(7,500)
Contributions from noncontrolling interests	Contributions from noncontrolling interests	3,961		4,000		Contributions from noncontrolling interests	2,000		3,961

Debt issuance, extinguishment and modification costs						Debt issuance, extinguishment and modification costs	(407)		—
NET CASH PROVIDED BY FINANCING ACTIVITIES	NET CASH PROVIDED BY FINANCING ACTIVITIES	4,094		1,076		NET CASH PROVIDED BY FINANCING ACTIVITIES	14,369		4,094

Net increase (decrease) in cash, cash equivalents and restricted cash		109,973		(51,046)
Net increase in cash, cash equivalents and restricted cash						Net increase in cash, cash equivalents and restricted cash	28,810		109,973
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	211,396		451,852		Cash, cash equivalents and restricted cash at beginning of period	273,831		211,396
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	321,369	$	400,806	Cash, cash equivalents and restricted cash at end of period	$	302,641	$	321,369

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

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

(1)Basis of Presentation

The Condensed Consolidated Financial Statements do not include footnotes and certain financial information normally presented annually under generally accepted accounting principles in the United States (“GAAP”). Therefore, they should be read in conjunction with the audited consolidated financial statements and the related notes included in Tutor Perini Corporation’s (the “Company”) Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. The results of operations for the three months ended March 31, ~~2022~~2023 may not be indicative of the results that will be achieved for the full year ending December 31, ~~2022.~~2023.

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including those of a normal recurring nature, necessary to present fairly the Company’s consolidated financial position as of March 31, ~~2022~~2023 and its consolidated statements of operations and cash flows for the interim periods presented. Intercompany balances and transactions have been eliminated. Certain amounts in the notes to the condensed consolidated financial statements of prior years have been reclassified to conform to the current year presentation.

(2)Revenue

Disaggregation of Revenue

The following tables disaggregate revenue by end market, customer type and contract type, which the Company believes best depict how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


		Three Months Ended March 31,				Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021			(in thousands)	2023		2022
Civil segment revenue by end market:	Civil segment revenue by end market:						Civil segment revenue by end market:
Mass transit (includes certain transportation and tunneling projects)	Mass transit (includes certain transportation and tunneling projects)	$	257,138	$	308,875		Mass transit (includes certain transportation and tunneling projects)	$	188,460	$	257,138
Military defense facilities	Military defense facilities	49,794		49,536			Military defense facilities	85,567		49,794
Bridges	Bridges	41,247		46,167			Bridges	30,645		41,247
Water		20,652		26,810

Commercial and industrial sites							Commercial and industrial sites	22,504		11,910
Other	Other	21,964		44,187			Other	22,694		30,706
Total Civil segment revenue	Total Civil segment revenue	$	390,795	$	475,575		Total Civil segment revenue	$	349,870	$	390,795


		Three Months Ended March 31,				Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021			(in thousands)	2023		2022
Building segment revenue by end market:	Building segment revenue by end market:						Building segment revenue by end market:
Hospitality and gaming		$	76,918	$	100,567
Municipal and government	Municipal and government	75,955		71,909			Municipal and government	$	89,620	$	75,955
Mass transit (includes transportation projects)		60,201		26,535
Commercial and industrial facilities		39,086		130,052
Health care facilities	Health care facilities	35,560		10,409			Health care facilities	50,417		35,560
Education facilities	Education facilities	29,860		38,317			Education facilities	48,077		29,860

Commercial and industrial facilities							Commercial and industrial facilities	38,271		39,086
Mass transit (includes transportation projects)							Mass transit (includes transportation projects)	33,320		60,201
Hospitality and gaming							Hospitality and gaming	19,606		76,918
Sports and entertainment							Sports and entertainment	13,466		4,772
Other(a)	Other(a)	13,068		29,444			Other(a)	(63,124)		8,296
Total Building segment revenue	Total Building segment revenue	$	330,648	$	407,233		Total Building segment revenue	$	229,653	$	330,648

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED


		Three Months Ended March 31,				Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021			(in thousands)	2023		2022
Specialty Contractors segment revenue by end market:	Specialty Contractors segment revenue by end market:						Specialty Contractors segment revenue by end market:
Commercial and industrial facilities							Commercial and industrial facilities	$	54,227	$	29,857
Mass transit (includes certain transportation and tunneling projects)	Mass transit (includes certain transportation and tunneling projects)	$	119,027	$	181,163		Mass transit (includes certain transportation and tunneling projects)	47,545		119,027
Commercial and industrial facilities		29,857		38,749
Multi-unit residential	Multi-unit residential	24,938		42,795			Multi-unit residential	32,796		24,938
Water	Water	21,447		21,154			Water	28,334		21,447
Federal government							Federal government	12,619		6,748
Health care facilities							Health care facilities	9,531		8,574
Education facilities	Education facilities	12,276		13,356			Education facilities	8,253		12,276

Other		23,166		27,570
Other(a)							Other(a)	3,472		7,844
Total Specialty Contractors segment revenue	Total Specialty Contractors segment revenue	$	230,711	$	324,787		Total Specialty Contractors segment revenue	$	196,777	$	230,711


		Three Months Ended March 31, 2022								Three Months Ended March 31, 2021									Three Months Ended March 31, 2023								Three Months Ended March 31, 2022
(in thousands)	(in thousands)	Civil		Building		Specialty Contractors		Total		Civil		Building		Specialty Contractors		Total		(in thousands)	Civil		Building		Specialty Contractors		Total		Civil		Building		Specialty Contractors		Total
Revenue by customer type:	Revenue by customer type:																	Revenue by customer type:
State and local agencies	State and local agencies	$	313,842	$	123,690	$	92,231	$	529,763	$	390,502	$	76,581	$	142,924	$	610,007	State and local agencies	$	213,427	$	136,601	$	85,682	$	435,710	$	313,842	$	123,690	$	92,231	$	529,763
Federal agencies	Federal agencies	50,694		46,098		11,334		108,126		51,633		50,361		21,237		123,231		Federal agencies	95,984		41,735		1,893		139,612		50,694		46,098		11,334		108,126
Private owners(a)	Private owners(a)	26,259		160,860		127,146		314,265		33,440		280,291		160,626		474,357		Private owners(a)	40,459		51,317		109,202		200,978		26,259		160,860		127,146		314,265
Total revenue	Total revenue	$	390,795	$	330,648	$	230,711	$	952,154	$	475,575	$	407,233	$	324,787	$	1,207,595	Total revenue	$	349,870	$	229,653	$	196,777	$	776,300	$	390,795	$	330,648	$	230,711	$	952,154


		Three Months Ended March 31, 2022								Three Months Ended March 31, 2021									Three Months Ended March 31, 2023								Three Months Ended March 31, 2022
(in thousands)	(in thousands)	Civil		Building		Specialty Contractors		Total		Civil		Building		Specialty Contractors		Total		(in thousands)	Civil		Building		Specialty Contractors		Total		Civil		Building		Specialty Contractors		Total
Revenue by contract type:	Revenue by contract type:																	Revenue by contract type:
Fixed price	Fixed price	$	336,993	$	102,518	$	199,063	$	638,574	$	419,156	$	84,449	$	293,468	$	797,073	Fixed price	$	311,373	$	96,116	$	166,155	$	573,644	$	336,993	$	102,518	$	199,063	$	638,574
Guaranteed maximum price(a)	Guaranteed maximum price(a)	293		171,509		5,333		177,135		1,270		270,454		1,130		272,854		Guaranteed maximum price(a)	62		69,778		1,756		71,596		293		171,509		5,333		177,135
Unit price	Unit price	50,510		33		14,822		65,365		52,733		111		28,297		81,141		Unit price	33,012		—		24,064		57,076		50,510		33		14,822		65,365
Cost plus fee and other	Cost plus fee and other	2,999		56,588		11,493		71,080		2,416		52,219		1,892		56,527		Cost plus fee and other	5,423		63,759		4,802		73,984		2,999		56,588		11,493		71,080
Total revenue	Total revenue	$	390,795	$	330,648	$	230,711	$	952,154	$	475,575	$	407,233	$	324,787	$	1,207,595	Total revenue	$	349,870	$	229,653	$	196,777	$	776,300	$	390,795	$	330,648	$	230,711	$	952,154

(a)Includes the negative impact of a non-cash charge in the first quarter of 2023 resulting from an adverse legal ruling. Refer to Note 17, Business Segments, for additional details.

Changes in Contract Estimates that Impact Revenue

Changes to the total estimated contract revenue or cost for a given project, either due to unexpected events or revisions to management’s initial estimates, are recognized in the period in which they are determined. Revenue was negatively impacted during the three months ended March 31, 2023 related to performance obligations satisfied (or partially satisfied) in prior periods by $108.0 million. Refer to Note 17, Business Segments, for additional details on significant adjustments. Revenue was negatively impacted during the three months ended March 31, 2022 related to performance obligations satisfied (or partially satisfied) in prior periods by $48.5 million. ~~Likewise, revenue was negatively impacted during the three months ended March 31, 2021 related to performance obligations satisfied (or partially satisfied) in prior periods by $19.3 million.~~

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and exclude unexercised contract options. As of March 31, 2023, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $4.4 billion, $2.2 billion and $1.2 billion for

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UNAUDITED

the Civil, Building and Specialty Contractors segments, respectively. As of March 31, 2022, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $4.6 billion, $2.2 billion and $1.3 billion for the Civil, Building and Specialty Contractors segments, respectively. As of March 31, 2021, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $4.8 billion, $1.5 billion and $1.7 billion for the Civil, Building and Specialty Contractors segments, respectively. 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.

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~~UNAUDITED~~

(3)Contract Assets and Liabilities

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

Contract assets include amounts due under retention 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:


(in thousands)	(in thousands)	As of March 31, 2022		As of December 31, 2021		(in thousands)	As of March 31, 2023		As of December 31, 2022
Retention receivable	Retention receivable	$	542,301	$	568,881	Retention receivable	$	563,967	$	585,556
Costs and estimated earnings in excess of billings:	Costs and estimated earnings in excess of billings:					Costs and estimated earnings in excess of billings:
Claims	Claims	788,876		833,352		Claims	599,460		677,367
Unapproved change orders	Unapproved change orders	482,945		418,054		Unapproved change orders	619,888		601,681
Other unbilled costs and profits	Other unbilled costs and profits	84,786		105,362		Other unbilled costs and profits	80,438		98,480
Total costs and estimated earnings in excess of billings	Total costs and estimated earnings in excess of billings	1,356,607		1,356,768		Total costs and estimated earnings in excess of billings	1,299,786		1,377,528
Capitalized contract costs	Capitalized contract costs	75,278		69,027		Capitalized contract costs	42,606		49,441
Total contract assets	Total contract assets	$	1,974,186	$	1,994,676	Total contract assets	$	1,906,359	$	2,012,525

Retention receivable represents amounts invoiced to customers where payments have been partially withheld pending the completion of certain milestones, satisfaction of other contractual conditions or the completion of the project. Retention agreements vary from project to project, and balances could be outstanding for several months or years depending on a number of circumstances such as contract-specific terms, project performance and other variables that may arise as the Company makes progress toward completion. As of March 31, ~~2022,~~2023, the amount of retention receivable estimated by management to be collected beyond one year is approximately ~~43%~~55% of the balance.

Costs and estimated earnings in excess of billings represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date and are classified as a current asset. Costs and estimated earnings in excess of billings result when either: (1) the appropriate contract revenue amount has been recognized over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), but a portion of the revenue recorded cannot be billed currently due to the billing terms defined in the contract, or (2) costs are incurred related to certain claims and unapproved change orders. Claims occur when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders occur when a change in the scope of work results in additional work being performed before the parties have agreed on the corresponding change in the contract price. The Company routinely estimates recovery related to claims and unapproved change orders as a form of variable consideration at the most likely amount it expects to receive and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Claims and unapproved change orders are billable upon the agreement and resolution between the contractual parties and after the execution of contractual amendments. Increases in claims and unapproved change orders typically result from costs being incurred against existing or new positions; decreases normally result from resolutions and subsequent billings. As discussed in Note 10, 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. The amount of costs and estimated earnings in excess of billings as of March 31, 2023 estimated by management to be collected beyond one year is approximately $642.6 million.

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UNAUDITED

Capitalized contract costs are included in other current assets and primarily represent costs to fulfill a contract that (1) directly relate to an existing or anticipated contract, (2) generate or enhance resources that will be used in satisfying performance obligations in the future and (3) are expected to be recovered through the contract. Capitalized contract costs are generally expensed to the associated contract over the period of anticipated use on the project. During the three months ended March 31, 2023 and 2022, ~~and 2021, $12.6~~$10.8 million and ~~$11.8~~$12.6 million, respectively, of previously capitalized contract costs were amortized and recognized as expense on the related contracts.

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~~UNAUDITED~~

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


(in thousands)	(in thousands)	As of March 31, 2022		As of December 31, 2021		(in thousands)	As of March 31, 2023		As of December 31, 2022
Retention payable	Retention payable	$	228,690	$	268,945	Retention payable	$	245,972	$	246,562
Billings in excess of costs and estimated earnings	Billings in excess of costs and estimated earnings	844,618		761,689		Billings in excess of costs and estimated earnings	978,505		975,812
Total contract liabilities	Total contract liabilities	$	1,073,308	$	1,030,634	Total contract liabilities	$	1,224,477	$	1,222,374

Retention 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, retention payable is not remitted to subcontractors until the associated retention receivable from customers is collected. As ofof March 31, ~~2022,~~2023, the amount of retention payable estimated by management to be remitted beyond one year is approximately ~~37%~~39% of the balance.

Billings in excess of costs and estimated earnings represent the excess of contract billings to date over the amount of contract costs and profits (or contract revenue) recognized to date. The balance may fluctuate depending on the timing of contract billings and the recognition of contract revenue. Revenue recognized during the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 and included in the opening billings in excess of costs and estimated earnings balances for each period totaled ~~$317.8~~$365.1 million and ~~$306.9~~$317.8 million, respectively.

(4)Cash, Cash Equivalents and Restricted Cash

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


(in thousands)	(in thousands)	As of March 31, 2022		As of December 31, 2021		(in thousands)	As of March 31, 2023		As of December 31, 2022
Cash and cash equivalents available for general corporate purposes	Cash and cash equivalents available for general corporate purposes	$	75,789	$	60,192	Cash and cash equivalents available for general corporate purposes	$	63,928	$	47,711
Joint venture cash and cash equivalents	Joint venture cash and cash equivalents	240,710		142,005		Joint venture cash and cash equivalents	218,767		211,640
Cash and cash equivalents	Cash and cash equivalents	316,499		202,197		Cash and cash equivalents	282,695		259,351
Restricted cash	Restricted cash	4,870		9,199		Restricted cash	19,946		14,480
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	321,369	$	211,396	Total cash, cash equivalents and restricted cash	$	302,641	$	273,831

Cash equivalents include short-term, highly liquid investments with maturities of three months or less when acquired. Cash and cash equivalents consist of amounts available for the Company’s general purposes, the Company’s proportionate share of cash held by the Company’s unconsolidated joint ventures and 100% of amounts held by the Company’s consolidated joint ventures. In both cases, cash held by joint ventures is available only for joint venture-related uses, including future distributions to joint venture partners.

Restricted cash includes amounts primarily held as collateral to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit.

(5)Earnings Per Common Share

Basic earnings per common share (“EPS”) and diluted EPS are calculated by dividing net income (loss) attributable to Tutor Perini Corporation by the following: for basic EPS, the weighted-average number of common shares outstanding during the period; and for diluted EPS, the sum of the weighted-average number of both outstanding common shares and potentially dilutive securities, which for the Company can include restricted stock units and unexercised stock options. Potentially dilutive securities also included the Convertible Notes (as defined in Note 8) prior to their repayment on June 15, 2021; however, the Convertible Notes had no impact on diluted EPS. The Company calculates the effect of the potentially dilutive restricted stock units and stock options using the treasury stock method.

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UNAUDITED

Three Months Ended March 31,
(in thousands, except per common share data) 2022 2021
Net income (loss) attributable to Tutor Perini Corporation $ (21,634) $ 16,034
Weighted-average common shares outstanding, basic 51,107 50,913
Effect of dilutive restricted stock units and stock options — 435
Weighted-average common shares outstanding, diluted 51,107 51,348
Net income (loss) attributable to Tutor Perini Corporation per common share:
Basic $ (0.42) $ 0.31
Diluted $ (0.42) $ 0.31
Anti-dilutive securities not included above 3,431 1,640
dilutive securities, which for the Company can include restricted stock units (“RSUs”) and unexercised stock options. The Company calculates the effect of the potentially dilutive RSUs and stock options using the treasury stock method.


	Three Months Ended March 31,
(in thousands, except per common share data)	2023		2022
Net loss attributable to Tutor Perini Corporation	$	(49,196)	$	(21,634)

Weighted-average common shares outstanding, basic	51,551		51,107
Effect of dilutive RSUs and stock options	—		—
Weighted-average common shares outstanding, diluted	51,551		51,107

Net loss attributable to Tutor Perini Corporation per common share:
Basic	$	(0.95)	$	(0.42)
Diluted	$	(0.95)	$	(0.42)

Anti-dilutive securities not included above	2,857		3,431

For both the three months ended March 31, 2023 and 2022, all outstanding ~~restricted stock units~~RSUs and stock options were excluded from the calculation of weighted-average diluted shares outstanding, as the shares have an anti-dilutive effect due to the net loss for ~~the period.~~both periods.

(6)Income Taxes

The ~~Company’s~~Company recognized an income tax benefit for the three months ended March 31, 2023 of $48.1 million resulting in an effective income tax rate of 49.6%. The effective income tax rate was ~~17.1%~~higher than the 21% federal statutory rate primarily due to the pre-tax loss for the period and projected for the year. In periods reporting pre-tax losses, a tax benefit increases the effective income tax rate because it increases the tax benefit generated from the pre-tax loss. The tax benefits that caused a higher effective tax rate were primarily the earnings attributable to noncontrolling interests (for which income taxes are not the responsibility of the Company) and state income taxes (net of the federal tax benefit), partially offset by non-deductible expenses.

For the three months ended March 31, ~~2022.~~2022, the Company recognized an income tax benefit of $3.9 million with an effective income tax rate of 17.1%. The Company incurred a pre-tax loss for the quarter, but projected a pre-tax profit for the year and, as a result, tax benefits reduced the effective tax rate. The effective income tax rate ~~for the period~~ was lower than the 21% federal statutory rate primarily due to earnings attributable to noncontrolling interests, for which income taxes are not the responsibility of the Company, partially offset by state income taxes (net of the federal tax benefit).

The ~~Company’s effective income~~Company had deferred tax ~~rate for the three months ended~~ assets of $97.4 million and $15.9 million at March 31, ~~2021 was 21.7%. The effective income tax rate for~~2023 and December 31, 2022, respectively, which are included in other assets on the 2021 period was higher than the 21% federal statutory rate primarily due to state income taxes (net of the federal tax benefit) and nondeductible expenses, partially offset by earnings attributable to noncontrolling interests, for which income taxes are not the responsibility of the Company.Condensed Consolidated Balance Sheets.

(7)Goodwill and Intangible Assets

Goodwill

The following table presents the changes in the carrying amount of goodwill since its inception through March 31, ~~2022:~~2023:

(in thousands) Civil Building Specialty
Contractors Total
Gross goodwill as of December 31, 2021 $ 492,074 $ 424,724 $ 156,193 $ 1,072,991
Accumulated impairment as of December 31, 2021 (286,931) (424,724) (156,193) (867,848)
Goodwill as of December 31, 2021 205,143 — — 205,143
Current year activity — — — —
Goodwill as of March 31, 2022 $ 205,143 $ — $ — $ 205,143


(in thousands)	Civil		Building		Specialty Contractors		Total
Gross goodwill as of December 31, 2022	$	492,074	$	424,724	$	156,193	$	1,072,991
Accumulated impairment as of December 31, 2022	(286,931)		(424,724)		(156,193)		(867,848)
Goodwill as of December 31, 2022	205,143		—		—		205,143
Current year activity	—		—		—		—
Goodwill as of March 31, 2023	$	205,143	$	—	$	—	$	205,143

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UNAUDITED

The Company performed its annual impairment test in the fourth quarter of ~~2021~~2022 and concluded goodwill was not 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 more likely than not reduce the fair value of the Civil reporting unit below its carrying amount.

The Company will continue to monitor events and circumstances for changes that indicate the Civil reporting unit goodwill would need to be reevaluated for impairment during future interim periods prior to the annual impairment test. These future

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~~UNAUDITED~~

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

Intangible Assets

Intangible assets consist of the following:


		As of March 31, 2022								Weighted-Average Amortization Period		As of March 31, 2023								Weighted-Average Amortization Period
(in thousands)	(in thousands)	Cost		Accumulated Amortization		Accumulated Impairment Charge		Carrying Value			(in thousands)	Cost		Accumulated Amortization		Accumulated Impairment Charge		Carrying Value
Trade names (non-amortizable)	Trade names (non-amortizable)	$	117,600	$	—	$	(67,190)	$	50,410	Indefinite	Trade names (non-amortizable)	$	117,600	$	—	$	(67,190)	$	50,410	Indefinite
Trade names (amortizable)	Trade names (amortizable)	69,250		(24,209)		(23,232)		21,809		20 years	Trade names (amortizable)	69,250		(26,445)		(23,232)		19,573		20 years
Contractor license	Contractor license	6,000		—		(6,000)		—		N/A	Contractor license	6,000		—		(6,000)		—		N/A
Customer relationships	Customer relationships	39,800		(23,114)		(16,645)		41		12 years	Customer relationships	39,800		(23,155)		(16,645)		—		N/A
Construction contract backlog	Construction contract backlog	149,290		(141,987)		—		7,303		3 years	Construction contract backlog	149,290		(149,290)		—		—		N/A
Total	Total	$	381,940	$	(189,310)	$	(113,067)	$	79,563		Total	$	381,940	$	(198,890)	$	(113,067)	$	69,983


		As of December 31, 2021								Weighted-Average Amortization Period		As of December 31, 2022								Weighted-Average Amortization Period
(in thousands)	(in thousands)	Cost		Accumulated Amortization		Accumulated Impairment Charge		Carrying Value			(in thousands)	Cost		Accumulated Amortization		Accumulated Impairment Charge		Carrying Value
Trade names (non-amortizable)	Trade names (non-amortizable)	$	117,600	$	—	$	(67,190)	$	50,410	Indefinite	Trade names (non-amortizable)	$	117,600	$	—	$	(67,190)	$	50,410	Indefinite
Trade names (amortizable)	Trade names (amortizable)	69,250		(23,650)		(23,232)		22,368		20 years	Trade names (amortizable)	69,250		(25,886)		(23,232)		20,132		20 years
Contractor license	Contractor license	6,000		—		(6,000)		—		N/A	Contractor license	6,000		—		(6,000)		—		N/A
Customer relationships	Customer relationships	39,800		(23,053)		(16,645)		102		12 years	Customer relationships	39,800		(23,155)		(16,645)		—		N/A
Construction contract backlog	Construction contract backlog	149,290		(137,102)		—		12,188		3 years	Construction contract backlog	149,290		(149,290)		—		—		N/A
Total	Total	$	381,940	$	(183,805)	$	(113,067)	$	85,068		Total	$	381,940	$	(198,331)	$	(113,067)	$	70,542

Amortization expense related to amortizable intangible assets for the three months ended March 31, 2023 and 2022 ~~and 2021~~ was ~~$5.5~~$0.6 million and ~~$6.6~~$5.5 million, respectively. As of March 31, ~~2022,~~2023, future amortization expense ~~is estimated~~related to amortizable intangible assets will be ~~$9.0~~approximately $1.7 million for the remainder of ~~2022,~~2023, $2.2 million per year for the years ~~2023~~2024 through ~~2027~~2028 and ~~$9.2~~$6.9 million thereafter.

The Company performed its annual impairment test for non-amortizable trade names during the fourth quarter of ~~2021.~~2022. Based on this assessment, the Company concluded that its non-amortizable trade names were not impaired. In addition, the Company determined that no triggering events occurred and no circumstances changed since the date of our annual impairment test that would indicate impairment of its non-amortizable trade names. Other amortizable intangible assets are reviewed for impairment whenever circumstances indicate that future cash flows generated by the assets might be less than the assets’ net carrying value. The Company had no impairment of intangible assets during the three months ended March 31, 2023 or 2022.

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(8)Financial Commitments

Long-Term Debt

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


(in thousands)	(in thousands)	As of March 31, 2022		As of December 31, 2021		(in thousands)	As of March 31, 2023		As of December 31, 2022
2017 Senior Notes	2017 Senior Notes	$	496,498	$	496,244	2017 Senior Notes	$	497,562	$	497,289
Term Loan B	Term Loan B	405,777		406,335		Term Loan B	403,677		404,169
2020 Revolver		41,000		27,000
Revolver						Revolver	30,000		—
Equipment financing and mortgages	Equipment financing and mortgages	55,700		56,246		Equipment financing and mortgages	45,286		48,681
Other indebtedness	Other indebtedness	4,079		7,829		Other indebtedness	4,157		8,300
Total debt	Total debt	1,003,054		993,654		Total debt	980,682		958,439
Less: Current maturities	Less: Current maturities	23,285		24,406		Less: Current maturities	66,228		70,285
Long-term debt, net	Long-term debt, net	$	979,769	$	969,248	Long-term debt, net	$	914,454	$	888,154

The following table reconciles the outstanding debt balances to the reported debt balances as of March 31, ~~2022~~2023 and December 31, ~~2021:~~2022:


		As of March 31, 2022						As of December 31, 2021							As of March 31, 2023						As of December 31, 2022
(in thousands)	(in thousands)	Outstanding Debt		Unamortized Discounts and Issuance Costs		Debt, as reported		Outstanding Debt		Unamortized Discounts and Issuance Costs		Debt, as reported		(in thousands)	Outstanding Debt		Unamortized Discounts and Issuance Costs		Debt, as reported		Outstanding Debt		Unamortized Discounts and Issuance Costs		Debt, as reported
2017 Senior Notes	2017 Senior Notes	$	500,000	$	(3,502)	$	496,498	$	500,000	$	(3,756)	$	496,244	2017 Senior Notes	$	500,000	$	(2,438)	$	497,562	$	500,000	$	(2,711)	$	497,289
Term Loan B	Term Loan B	418,625		(12,848)		405,777		419,688		(13,353)		406,335		Term Loan B	414,375		(10,698)		403,677		415,438		(11,269)		404,169

The unamortized issuance costs related to the ~~2020~~ Revolver were $1.9 million and ~~$2.1~~$1.6 million as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, and are included in other assets on the Condensed Consolidated Balance Sheets.

2020 Credit Agreement

On August 18, 2020, the Company 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”~~“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 Senior Notes are outstanding on January 30, 2025 (which is 91 days prior to the maturity of the 2017 Senior Notes), in which case, both the Term Loan B and the ~~2020~~ Revolver will mature on January 30, 2025 (subject to certain further exceptions).

The 2020 Credit Agreement permits the Company to repay any or all borrowings outstanding under the 2020 Credit Agreement at any time prior to maturity without penalty. The 2020 Credit Agreement requires the Company to make regularly scheduled payments of principal on the Term Loan B in quarterly installments equal to 0.25% of the initial principal amount of the Term Loan B. The 2020 Credit Agreement also requires the Company to make prepayments on the Term Loan B in connection with certain asset sales, receipts of insurance proceeds, incurrences of ~~unpermitted~~certain indebtedness and annual excess cash flow ~~(subject~~(in each case, subject to certain customary exceptions). At March 31, 2023 and December 31, 2022, included in current maturities of long-term debt in the accompanying Condensed Consolidated Balance Sheets is a $44.0 million prepayment of principal on the Term Loan B, which was paid in April 2023, relating to the mandatory prepayment provision of the 2020 Credit Agreement in respect of annual excess cash flow.

Subject to certain exceptions, at any time prior to maturity, the 2020 Credit Agreement provides the Company with the right to increase the commitments under the ~~2020~~ Revolver and/or to establish one or more term loan facilities in an aggregate amount up to (i) the greater of $173.5 million and 50% LTM EBITDA (as defined in the 2020 Credit Agreement) plus (ii) additional amounts if (A) in the case of pari passu first lien secured indebtedness, the First Lien Net Leverage Ratio (as defined in the 2020 Credit

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Agreement) does not exceed 1.35:1.00, (B) in the case of junior lien secured indebtedness, the Total Net Leverage Ratio (as defined in the 2020 Credit Agreement) does not exceed 3.50:1.00 and (C) in the case of unsecured indebtedness,

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(x) the Total Net Leverage Ratio does not exceed 3.50:1.00 or (y) the Fixed Charge Coverage Ratio (as defined in the 2020 Credit Agreement) is no less than 2.00:1.00.

Borrowings under the 2020 Credit Agreement bear interest, at the Company’s option, at a rate equal to (i) ~~(a) LIBOR~~(A) in the case of the Term Loan B, following the amendment to the 2020 Credit Agreement on May 2, 2023 (as discussed below), (x) the Adjusted Term Secured Overnight Financing Rate (“Adjusted Term SOFR”) (calculated with a 11.448 basis point, 26.161 basis point and 42.826 basis point credit spread adjustment for a 1, 3 and 6 month interest period, respectively) or ~~(b)~~(y) a base rate (determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus 50 basis points and (3) the ~~LIBOR~~Adjusted Term SOFR rate for a one-month interest period plus 100 basis points) and (B) in case of the Revolver, following the amendment to the 2020 Credit Agreement on October 31, 2022 (as discussed below), (x) the Adjusted Term SOFR rate (calculated with a 10 basis point credit spread adjustment for all interest periods) or (y) a base rate (determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus 50 basis points and (3) the Adjusted Term SOFR rate for a one-month interest period plus 100 basis points) plus, in each case, (ii) an applicable margin. The margin applicable to the Term Loan B is between 4.50% and 4.75% for ~~LIBOR~~Adjusted Term SOFR and between 3.50% and 3.75% for base rate, ~~(which was initially 4.75% for LIBOR and 3.75% for base rate),~~ and, in each case, is based on the Total Net Leverage Ratio. The margin applicable to the ~~2020~~ Revolver is between 4.25% and 4.75% for ~~LIBOR~~Adjusted Term SOFR and 3.25% and 3.75% for base rate, ~~(which was initially 4.75% for LIBOR and 3.75% for base rate),~~ and, in each case, is based on the First Lien Net Leverage Ratio. Effective following the amendment to the 2020 Credit Agreement on October 31, 2022, the Company’s original London Interbank Offered Rate (“LIBOR”) option in respect of the Revolver was transitioned to Adjusted Term SOFR. Effective May 2, 2023, the 2020 Credit Agreement was further amended to transition the Company’s original LIBOR option in respect of the Term Loan B to Adjusted Term SOFR. In addition to paying interest on outstanding principal under the 2020 Credit Agreement, the Company will pay a commitment fee to the lenders under the ~~2020~~ Revolver in respect of the unutilized commitments thereunder. The Company will pay customary letter of credit fees. If a payment or bankruptcy event of default occurs and is continuing, the otherwise applicable margin on overdue amounts will be increased by 2% per annum. The ~~agreement~~2020 Credit Agreement includes customary provisions for the replacement of ~~LIBOR~~Adjusted Term SOFR with an alternative benchmark rate upon ~~LIBOR~~Adjusted Term SOFR being discontinued. The weighted-average annual interest rate on borrowings under the ~~2020~~ Revolver was ~~6.55%~~11.58% during the three months ended March 31, ~~2022.~~2023.

The 2020 Credit Agreement ~~requires,~~initially required, solely with respect to the ~~2020~~ Revolver, ~~only,~~ the Company and its restricted subsidiaries to maintain a maximum First Lien Net Leverage Ratio of 2.75:~~1:00,~~1.00, stepping down to 2.25:1.00 beginning the fiscal quarter ending March 31, 2022. On October 31, 2022, the 2020 Credit Agreement was amended to increase the maximum First Lien Net Leverage Ratio covenant level to 2.75:1.00 (from 2.25:1.00), effective the fiscal quarter ending September 30, 2022, and subsequently stepping back down to 2.25:1.00 beginning the fiscal quarter ending June 30, 2023. On March 10, 2023, the 2020 Credit Agreement was further amended to set the maximum First Lien Net Leverage Ratio covenant level to 3.50:1.00, effective the fiscal quarter ended December 31, 2022 and increasing to 3.75:1.00 for the fiscal quarter ending March 31, 2023 and subsequently stepping down to 3.00:1.00 for the fiscal quarter ending June 30, 2023, 2.50:1.00 for the fiscal quarter ending September 30, 2023 and 2.25:1.00 for the fiscal quarter ending December 31, 2023 and each fiscal quarter thereafter. The 2020 Credit Agreement also includes certain customary representations and warranties, affirmative covenants and events of default. Subject to certain exceptions, substantially all of the Company’s existing and future material wholly-owned subsidiaries unconditionally guarantee the obligations of the Company under the 2020 Credit Agreement; additionally, subject to certain exceptions, the obligations are secured by a lien on substantially all of the assets of the Company and its subsidiaries guaranteeing these obligations.

As of March 31, ~~2022, $41~~2023, there was $145 million ~~was outstanding and $134 million was~~ available under the ~~2020~~ Revolver. The Company had not utilized the ~~2020~~ Revolver for letters of credit. The Company was in compliance with the financial ~~covenants~~covenant under the 2020 Credit Agreement for the period ended March 31, ~~2022.~~

~~Repurchase and Repayment of Convertible Notes~~

~~On June 15, 2021, the Company repaid the $69.9 million outstanding principal balance of the 2.875% Convertible Senior Notes (the “Convertible Notes”).~~2023.

2017 Senior Notes

On April 20, 2017, the Company issued $500 million in aggregate principal amount of 6.875% Senior Notes due May 1, 2025 (the “2017 Senior Notes”) in a private placement offering. Interest on the 2017 Senior Notes is payable in arrears semi-annually in May and November of each year, beginning in November 2017.

The Company may redeem the 2017 Senior Notes at specified redemption prices described in the indenture. Upon a change of control, holders of the 2017 Senior Notes may require the Company to repurchase all or part of the 2017 Senior Notes at 101% of the principal amount thereof, plus accrued and unpaid interest to the redemption date.

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The 2017 Senior Notes are senior unsecured obligations of the Company and are guaranteed by substantially all of the Company’s existing and future subsidiaries that also guarantee obligations under the Company’s 2020 Credit Agreement, as defined 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.

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Interest Expense

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


		Three Months Ended March 31,				Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021			(in thousands)	2023		2022
Cash interest expense:	Cash interest expense:						Cash interest expense:
Interest on 2017 Senior Notes	Interest on 2017 Senior Notes	$	8,594	$	8,594		Interest on 2017 Senior Notes	$	8,594	$	8,594
Interest on Term Loan B	Interest on Term Loan B	6,033		6,094			Interest on Term Loan B	9,749		6,033
Interest on 2020 Revolver		503		121
Interest on Convertible Notes		—		503
Interest on Revolver							Interest on Revolver	1,745		503

Other interest	Other interest	461		481			Other interest	421		461
Total cash interest expense	Total cash interest expense	15,591		15,793			Total cash interest expense	20,509		15,591

Non-cash interest expense:(a)	Non-cash interest expense:(a)						Non-cash interest expense:(a)
Amortization of discount and debt issuance costs on Convertible Notes		—		1,099

Amortization of discount and debt issuance costs on Term Loan B	Amortization of discount and debt issuance costs on Term Loan B	505		539			Amortization of discount and debt issuance costs on Term Loan B	571		505
Amortization of debt issuance costs on 2020 Revolver		142		142
Amortization of debt issuance costs on Revolver							Amortization of debt issuance costs on Revolver	160		142
Amortization of debt issuance costs on 2017 Senior Notes	Amortization of debt issuance costs on 2017 Senior Notes	254		237			Amortization of debt issuance costs on 2017 Senior Notes	273		254
Total non-cash interest expense	Total non-cash interest expense	901		2,017			Total non-cash interest expense	1,004		901

Total interest expense	Total interest expense	$	16,492	$	17,810		Total interest expense	$	21,513	$	16,492

(a)The combination of cash and non-cash interest expense produces effective interest rates that are higher than contractual rates. Accordingly, the effective interest rates for the 2017 Senior Notes and Term Loan B were 7.13% and ~~6.43%~~10.44%, respectively, for the three months ended March 31, ~~2022.~~2023.

(9)Leases

The Company leases certain office space, construction and office equipment, vehicles and temporary housing generally under non-cancelable operating leases. Leases with an initial term of one year or less are not recorded on the balance sheet, and the Company generally recognizes lease expense for these leases on a straight-line basis over the lease term. As of March 31, ~~2022,~~2023, the Company’s operating leases have remaining lease terms ranging from less than one year to 1615 years, some of which include options to renew the leases. The exercise of lease renewal options is generally at the Company’s sole discretion. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

The following table presents components of lease expense for the three months ended March 31, ~~2022~~2023 and ~~2021:~~2022:


		Three Months Ended March 31,				Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021			(in thousands)	2023		2022
Operating lease expense	Operating lease expense	$	4,157	$	3,718		Operating lease expense	$	3,474	$	4,157
Short-term lease expense(a)	Short-term lease expense(a)	14,444		21,125			Short-term lease expense(a)	13,919		14,444
		18,601		24,843				17,393		18,601
Less: Sublease income	Less: Sublease income	190		170			Less: Sublease income	194		190
Total lease expense	Total lease expense	$	18,411	$	24,673		Total lease expense	$	17,199	$	18,411

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

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


(dollars in thousands)	(dollars in thousands)	Balance Sheet Line Item	As of March 31, 2022			As of December 31, 2021			(dollars in thousands)	Balance Sheet Line Item	As of March 31, 2023			As of December 31, 2022
Assets	Assets								Assets
Right-of-use assets	Right-of-use assets	Other assets	$	57,453		$	53,462		Right-of-use assets	Other assets	$	49,147		$	50,825
Total lease assets	Total lease assets		$	57,453		$	53,462		Total lease assets		$	49,147		$	50,825
Liabilities	Liabilities								Liabilities
Current lease liabilities	Current lease liabilities	Accrued expenses and other current liabilities	$	7,832		$	7,481		Current lease liabilities	Accrued expenses and other current liabilities	$	6,290		$	6,709
Long-term lease liabilities	Long-term lease liabilities	Other long-term liabilities	53,925			50,057			Long-term lease liabilities	Other long-term liabilities	48,006			49,176
Total lease liabilities	Total lease liabilities		$	61,757		$	57,538		Total lease liabilities		$	54,296		$	55,885
Weighted-average remaining lease term	Weighted-average remaining lease term		11.8 years			12.0 years			Weighted-average remaining lease term		11.0 years
Weighted-average discount rate	Weighted-average discount rate		9.34		%	9.44		%	Weighted-average discount rate		11.81		%	11.77		%

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


		Three Months Ended March 31,					Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021		(in thousands)	2023		2022
Operating cash flow information:	Operating cash flow information:					Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	Cash paid for amounts included in the measurement of lease liabilities	$	(3,927)	$	(3,345)	Cash paid for amounts included in the measurement of lease liabilities	$	(3,446)	$	(3,927)
Non-cash activity:	Non-cash activity:					Non-cash activity:
Right-of-use assets obtained in exchange for lease liabilities	Right-of-use assets obtained in exchange for lease liabilities	$	6,757	$	2,338	Right-of-use assets obtained in exchange for lease liabilities	$	318	$	6,757

The following table presents maturities of operating lease liabilities on an undiscounted basis as of March 31, ~~2022:~~2023:


Year (in thousands)	Year (in thousands)	Operating Leases		Year (in thousands)	Operating Leases
2022 (excluding the three months ended March 31, 2022)		$	9,955
2023		10,936
2023 (excluding the three months ended March 31, 2023)				2023 (excluding the three months ended March 31, 2023)	$	9,198
2024	2024	8,462		2024	10,028
2025	2025	7,570		2025	8,910
2026	2026	6,405		2026	7,478
2027				2027	6,770
Thereafter	Thereafter	65,120		Thereafter	58,094
Total lease payments	Total lease payments	108,448		Total lease payments	100,478
Less: Imputed interest	Less: Imputed interest	46,691		Less: Imputed interest	46,182
Total	Total	$	61,757	Total	$	54,296

(10)Commitments and Contingencies

The Company and certain of its subsidiaries are involved in litigation and other legal proceedings and forms of dispute resolution in the ordinary course of business, including but not limited to disputes over contract payment and/or performance-related issues (such as disagreements regarding delay or a change in the scope of work of a project and/or the price associated with that change) and other matters incidental to the Company’s business. In accordance with ASC 606, the Company makes assessments of these types of matters on a routine basis and, to the extent permitted by ASC 606, estimates and records recovery related to these matters as a form of variable consideration at the most likely amount the Company expects to receive, as discussed further in Note 3. In addition, the Company is contingently liable for litigation, performance guarantees and other commitments arising in the ordinary course of business, which are accounted for in accordance with ASC 450, Contingencies. Management reviews these matters regularly and updates or revises its estimates as warranted by subsequent information and developments. These assessments require judgments concerning matters that are inherently uncertain, such as litigation developments and outcomes, the anticipated outcome of negotiations and the estimated cost of resolving disputes.

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Consequently, these assessments are estimates, and actual amounts may vary from such estimates. In addition, because such matters are typically resolved over long periods of time, the Company’s assets and liabilities may change over time should the circumstances dictate. The description of the legal proceedings listed below include management’s assessment of those proceedings. Management believes that, based on current information and discussions with the Company’s legal counsel, the ultimate resolution of other matters is not expected to have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

A description of the material pending legal proceedings, other than ordinary routine litigation incidental to the business is as follows:

~~Five Star Electric Matter~~

In the third quarter of 2015, Five Star Electric Corp. (“Five Star”), a wholly owned subsidiary of the Company that was acquired in 2011, entered into a tolling agreement (which has since expired) related to an ongoing investigation being conducted by the United States Attorney’s Office for the Eastern District of New York (“USAO EDNY”). Five Star has been cooperating with the USAO EDNY since late June 2014, when it was first made aware of the investigation, and has provided information requested by the government related to its use of certain minority-owned, women-owned, small and disadvantaged business enterprises and certain of Five Star’s employee compensation, benefit and tax practices.

~~As of March 31, 2022, the Company has concluded that the potential for a material adverse financial impact on Five Star or the Company as a result of the investigation is remote.~~

Alaskan Way Viaduct Matter

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

The construction of the large-diameter bored tunnel required the use of a tunnel boring machine (“TBM”). In December 2013, the TBM struck a steel pipe, installed by WSDOT as a well casing for an exploratory well. The TBM was significantly damaged and was required to be repaired. STP has asserted that the steel pipe casing was a differing site condition that WSDOT failed to properly disclose. The Disputes Review Board mandated by the contract to hear disputes issued a decision finding the steel casing was a Type I (material) differing site condition. WSDOT did not accept that finding.

The TBM was insured under a Builder’s Risk Insurance Policy (the “Policy”) with Great Lakes Reinsurance (UK) PLC and a consortium of other insurers (the “Insurers”). STP submitted the claims to the Insurers and requested interim payments under the Policy. The Insurers refused to pay and denied coverage. In June 2015, STP filed a lawsuit in the King County Superior Court, State of Washington seeking declaratory relief concerning contract interpretation, as well as damages as a result of the Insurers’ breach of their obligations under the terms of the Policy. STP is also asserting extra-contractual and statutory claims against the Insurers. STP submitted damages to the Insurers in the King County lawsuit in the amount of $532 million. WSDOT is deemed a plaintiff since WSDOT is an insured under the Policy and had filed its own claim for damages. Hitachi Zosen (“Hitachi”), the manufacturer of the TBM, joined the case as a plaintiff for costs incurred to repair the damages to the TBM.

In April and September 2018, rulings received on pre-trial motions limited some of the potential recoveries under the Policy for STP, WSDOT and Hitachi. On August 2, 2021, the Court of Appeals reversed in part certain of those limitations but affirmed other parts of those rulings. On ~~January 5,~~September 15, 2022, the Washington Supreme Court ~~issued an order granting STP, WSDOT and Hitachi’s requests for discretionary review of~~affirmed the ~~portions~~decision of the Court of ~~Appeals’ decision~~Appeals, which limits recovery of certain damages under the Policy. Based on the rulings of the Court of Appeals, the case will continue for adjudication on the remaining facts and legal issues, including the number of covered occurrences which could increase the amount of available coverage under the Policy and the amount of investigative costs that ~~affirmed~~are subject to the ~~April and September 2018 decisions.~~Policy limits. STP also ~~asserted $532 million of damages from WSDOT related~~has claims for costs, fees, pre-judgment interest and extra-contractual and statutory claims, which are not subject to the ~~pipe-strike by~~Policy limits.

With respect to STP’s direct and indirect claims against the ~~TBM~~Insurers, management has included in ~~a related lawsuit in Thurston County (see following paragraph).~~receivables an estimate of the total anticipated recovery concluded to be probable.

In March 2016, WSDOT filed a complaint against STP in Thurston County Superior Court alleging breach of contract, seeking $57.2 million in delay-related damages and seeking declaratory relief concerning contract interpretation. STP ~~filed its answer to WSDOT’s complaint and~~subsequently filed a counterclaim against WSDOT and Hitachi, as the TBM designer, seeking damages of $667 million. On October 3, 2019, STP and Hitachi entered into a settlement agreement which released and dismissed the claims that STP and Hitachi had against each other.WSDOT. The jury trial between STP and WSDOT commenced on October 7, 2019 and concluded on December 13, 2019, with a jury verdict in favor of WSDOT awarding them $57.2 million in damages.

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Judgment was entered on January 10, 2020, and STP appealed the decision. The appeal was argued on December 10, 2021 and STP is awaiting a decision from the Court of Appeals of the State of Washington, which is expected in the second half of 2022. If STP is successful in its appeal, the case will be remanded to the trial court for a new trial.

The Company recorded the impact of the jury verdict during the fourth quarter of 2019, resulting in a pre-tax charge of $166.8 million, which included $25.7 million for the Company’s 45% proportionate share of the $57.2 million in damages awarded by the jury to WSDOT. Payment of damages will only be made if the adverse verdict is upheld on appeal, as the payment is secured by a bond for the course of the appeal. Other than the possible future cash payment of $25.7 million for damages, theThe charge was 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. STP filed a petition for discretionary review by the Washington Supreme Court on July 12, 2022, which was denied by the Supreme Court on October 10, 2022. On October 18, 2022, STP paid the damages and associated interest from the judgment, which included the Company’s proportionate share of $34.6 million. As a result, the lawsuit between STP and WSDOT has concluded.

~~With respect to STP’s direct and indirect claims against the Insurers, management has included in receivables an estimate~~

Table of ~~the total anticipated recovery concluded to be probable.~~Contents

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George Washington Bridge Bus Station Matter

In August 2013, Tutor Perini Building Corp. (“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~~facility opened to the public on May 16, 2017.

On February 26, 2015, the Developer filed a demand for arbitration, subsequently amended, seeking $30 million in alleged damages and declaratory relief that TPBC’s requests for additional compensation ~~are~~were invalid due to lack of notice. TPBC denied the Developer’s claims and filed a counterclaim in March 2018. TPBC ~~seeks~~was seeking in excess of $113 million in the arbitration, which ~~includes~~included unpaid contract balance claims, the return of $29 million retained by the Developer in alleged damages, as well as extra work claims, pass-through claims and delay claims. The Developer was seeking an additional $4.8 million in damages from TPBC beyond the $29 million it had withheld.

Hearings on the merits commenced on September 24, 2018 before the arbitration panel. On June 4, 2019, the arbitration panel, as confirmed by the U.S. District Court in the Southern District of New York, issued a writ of attachment for $23 million of the $29 million discussed above. On October 7, 2019, the Developer filed for bankruptcy protection in the Southern District of New York under Chapter 11 of the Bankruptcy Code. The filing for bankruptcy stayed the pending arbitration proceedings. TPBC appeared in the bankruptcy proceedings on October 8, 2019 and filed a Proof of Claim in the amount of $113 million on December 13, 2019.

On June 5, 2020, the Developer, secured lenders and the Port Authority announced that they had reached a settlement of their disputes. As part of the settlement, the Port Authority waived the enforcement of its right to seek a “cure” pursuant to its lease agreement with the Developer, which requires construction costs be paid prior to any sale of the leasehold, the sole asset in the Developer’s bankruptcy estate to be distributed in this bankruptcy. On July 14, 2020, the bankruptcy court conducted a hearing to determine (1) whether to approve the settlement agreement between the Developer, secured lenders and the Port Authority; and (2) whether TPBC can assert third-party beneficiary rights to the lease agreement and require that prior to the sale of the leasehold, any outstanding costs owed to contractors for the cost of building the project must be paid pursuant to the lease agreement’s “cure” provisions. On August 12, 2020, the bankruptcy court approved the settlement and denied TPBC’s third-party beneficiary rights under the lease agreement. On August 20, 2020, TPBC filed an appeal with the U.S. District Court for the Southern District of New York seeking to challenge the denial of its third-party beneficiary rights under the lease agreement’s “cure” provisions to avoid being subordinate to the claims of the secured lenders in the bankruptcy proceedings, which was denied by the U.S. District Court on August 4, ~~2021 and is now before~~2021. TPBC filed an appeal with the U.S. Court of Appeals for the Second Circuit ~~Court of Appeals.~~on August 20, 2021, which conducted oral arguments on October 27, 2022. On ~~August 25, 2021,~~April 10, 2023, the Second Circuit affirmed the bankruptcy ~~court approved~~court’s and district court’s denials of TPBC’s third-party beneficiary rights under the ~~sale~~project’s lease agreement’s “cure” provisions and concluded that TPBC’s claims were not otherwise entitled to priority treatment under the Bankruptcy Code and should therefore be treated as unsecured claims that are subordinate to the claims of the ~~leasehold, which was completed on August 31, 2021. On October 1, 2021,~~secured lenders in the Developer’s bankruptcy ~~court converted~~case. As a result of this adverse decision from the ~~case~~Second Circuit, the Company recorded a non-cash, pre-tax charge to income (loss) from ~~a Chapter 11~~construction operations of $83.6 million in the first quarter of 2023.TPBC has no further avenues to ~~a Chapter 7 bankruptcy proceeding.~~recover its costs from the Developer or the bankruptcy-related actions, nor does the Developer have any ability to recover its claims against TPBC, and these lawsuits have now concluded.

Separately, on July 2, 2018, TPBC filed a lawsuit against the Port Authority, as owner of the project, 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. On February 18, 2021, the Appellate Division affirmed in part and reversed in part the trial court's denial of the Port Authority's motion to dismiss TPBC’s causes of action. On April 11, 2022, the court granted the Port Authority’s motion to dismiss on statutory notice grounds. The Company ~~intends to~~filed a notice of appeal ~~this decision. In~~on April 28, 2022, which is pending.

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~~UNAUDITED~~

In addition, on August 11, 2021, TPBC filed a second lawsuit in state court against the Port Authority alleging unjust enrichment and tortious interference with TPBC’s right to recover under the lease agreement’s “cure” provision in the bankruptcy proceeding. The case was removed to the federal bankruptcy court on September 21, 2021. The Port Authority filed

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a motion to dismiss on March 4, 2022, which ~~remains pending before~~ the federal bankruptcy ~~court.~~court granted on September 30, 2022. This lawsuit is now concluded.

On January 27, 2020, TPBC filed separate litigation in the U.S. District Court for the Southern District of New York in which TPBC asserted related claims seeking the same $113 million in damages against the individual owners of the Developer for their wrongful conversion of project funds and against lenders that received interest payments from project funds and other amounts earmarked to pay the contractors. On December 29, 2020, the court granted in part and denied in part the defendants’ motions to dismiss, resulting in the lender defendants being dismissed from the lawsuit and the lawsuit against the individual owners of the Developer continuing. The lawsuit was refiled in New York state court on July 26, ~~2021 and~~2021. On June 8, 2022, the court certified the class under the New York construction trust fund statutes. The case remains pending before the court.

As of March 31, 2022, 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, managementManagement has made an estimate of the total anticipated recovery of TPBC’s claims against the individual owners of the Developer and the Port Authority on this project, and such estimate is included in revenue recorded to date.

(11)Share-Based Compensation

As of March 31, ~~2022,~~2023, there were ~~927,846~~868,622 shares of common stock available for grant under the Tutor Perini Corporation Omnibus Incentive Plan. During the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, the Company granted ~~restricted stock units (“RSUs”)~~the following share-based instruments: (1) RSUs totaling ~~375,769~~590,188 and ~~180,000,~~375,769, respectively, with weighted-average grant date fair values per ~~share~~unit of $8.66 and $10.53, respectively; and ~~$19.30,~~(2) cash-settled performance stock units (“CPSUs”) totaling 901,541 and 315,768, respectively, with weighted-average grant date fair values per unit of $13.78 and $14.89, respectively. During the three months ended March 31, 2023, the Company also granted a cash award with a service-based vesting condition and payout indexed to 90,000 shares of the Company’s common stock, with a weighted-average grant date fair value of $8.98 per share. During the three months ended March 31, 2022, the Company ~~also~~ granted ~~315,768 cash-settled performance stock units (“CPSUs”) with a weighted-average grant date fair value per unit of $14.89, and~~ 7,500 shares of unrestricted stock with a weighted-average grant date fair value of $19.24 per share.

~~For~~As of March 31, 2023 and December 31, 2022, the Company recognized liabilities for CPSUs and ~~certain~~ RSUs ~~granted~~ with guaranteed minimum payouts and certain cash-settled awards on the ~~Company recognized liabilities~~Condensed Consolidated Balance Sheets totaling approximately ~~$4.2~~$3.4 million and ~~$4.8~~$2.1 million, ~~as of~~respectively. During the three months ended March 31, 2022, ~~and December 31, 2021, respectively. The~~the Company paid approximately $2.6 million ~~and $0.3 million~~ to settle certain ~~awards upon vesting during the three month periods ended March 31, 2022 and 2021, respectively.~~awards.

For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, the Company recognized, as part of general and administrative expenses, costs for share-based payment arrangements totaling ~~$3.4~~$3.1 million and ~~$2.4~~$3.4 million, respectively. As of March 31, ~~2022,~~2023, the balance of unamortized share-based compensation expense was ~~$27.1~~$25.3 million, which is expected to be recognized over a weighted-average period of ~~2.2~~2.3 years.

(12)Employee Pension Plans

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

The following table sets forth a summary of the net periodic benefit cost for the three months ended March 31, ~~2022~~2023 and ~~2021:~~2022:


		Three Months Ended March 31,				Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021			(in thousands)	2023		2022
Interest cost	Interest cost	$	646	$	582		Interest cost	$	969	$	646
Service cost	Service cost	240		236			Service cost	255		240
Expected return on plan assets	Expected return on plan assets	(973)		(1,015)			Expected return on plan assets	(978)		(973)
Recognized net actuarial losses	Recognized net actuarial losses	639		683			Recognized net actuarial losses	413		639
Net periodic benefit cost	Net periodic benefit cost	$	552	$	486		Net periodic benefit cost	$	659	$	552

Due to availability of our prefunded pension balance related to the defined benefit pension plan, the Company was not required to make any cash payments during the three months ended March 31, 2023. The Company expects to contribute $1.3 million in cash by the end of 2023. 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, and does not intend to, contribute amounts to the defined benefit pension plan in 2022. The Company contributed $1.0 million to its defined benefit pension plan during the three months ended March 31, 2021.

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on March 11, 2021, the Company was not required to, and did not contribute, amounts to the defined benefit pension plan during the three months ended March 31, 2022.

(13)Fair Value Measurements

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

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

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

•Level 3 inputs are unobservable

The following fair value hierarchy table presents the Company’s assets that are measured at fair value on a recurring basis as of March 31, ~~2022~~2023 and December 31, ~~2021:~~2022:


		As of March 31, 2022								As of December 31, 2021									As of March 31, 2023								As of December 31, 2022
		Fair Value Hierarchy								Fair Value Hierarchy									Fair Value Hierarchy								Fair Value Hierarchy
(in thousands)	(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total		(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents(a)	Cash and cash equivalents(a)	$	316,499	$	—	$	—	$	316,499	$	202,197	$	—	$	—	$	202,197	Cash and cash equivalents(a)	$	282,695	$	—	$	—	$	282,695	$	259,351	$	—	$	—	$	259,351
Restricted cash(a)	Restricted cash(a)	4,870		—		—		4,870		9,199		—		—		9,199		Restricted cash(a)	19,946		—		—		19,946		14,480		—		—		14,480
Restricted investments(b)	Restricted investments(b)	—		85,075		—		85,075		—		84,355		—		84,355		Restricted investments(b)	—		88,240		—		88,240		—		91,556		—		91,556
Investments in lieu of retention(c)	Investments in lieu of retention(c)	25,949		59,610		—		85,559		27,472		58,856		—		86,328		Investments in lieu of retention(c)	23,177		67,299		—		90,476		20,100		68,228		—		88,328
Total	Total	$	347,318	$	144,685	$	—	$	492,003	$	238,868	$	143,211	$	—	$	382,079	Total	$	325,818	$	155,539	$	—	$	481,357	$	293,931	$	159,784	$	—	$	453,715

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

(b)Restricted investments, as of March 31, 2023 and December 31, 2022, consist of ~~investments in corporate~~available-for-sale (“AFS”) debt securities, ~~of $46.0 million, U.S. government agency securities of $38.6 million and corporate certificates of deposits of $0.5 million with maturities of up to five years, and~~which 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~~assets; therefore, they are ~~therefore~~ classified as Level 2 assets. As of December 31, 2021, restricted investments consisted of investments in corporate debt securities of $46.7 million, U.S. government agency securities of $37.1 million and corporate certificates of deposits of $0.6 million with maturities of up to five years. The amortized cost of these available-for-sale securities at March 31, 2022 and December 31, 2021 was not materially different from the fair value.

(c)Investments in lieu of retention are included in retention receivable ~~and~~ as of March 31, 2023 and December 31, 2022, and are comprised of ~~corporate debt securities of $58.6 million,~~ money market funds of ~~$25.9~~$23.2 million and ~~municipal bonds~~$20.1 million, respectively, and AFS debt securities of ~~$1.1 million.~~$67.3 million and $68.2 million, respectively. The fair values of the money market funds are measured using quoted market prices; therefore, they are classified as Level 1 assets. The ~~corporate and municipal bonds have maturity periods up to five years, and their~~ fair values of AFS debt securities are 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

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Investments in AFS debt securities consisted of the following as of March 31, 2023 and December 31, ~~2021, investments~~2022:


	As of March 31, 2023								As of December 31, 2022
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Restricted investments:
Corporate debt securities	$	52,027	$	22	$	(3,045)	$	49,004	$	53,452	$	1	$	(3,550)	$	49,903
U.S. government agency securities	32,099		43		(1,379)		30,763		34,920		13		(1,688)		33,245
Municipal bonds	9,039		—		(1,017)		8,022		9,211		—		(1,257)		7,954
Corporate certificates of deposit	504		—		(53)		451		507		—		(53)		454
Total restricted investments	93,669		65		(5,494)		88,240		98,090		14		(6,548)		91,556

Investments in lieu of retention:
Corporate debt securities	69,458		31		(3,219)		66,270		70,968		1		(3,724)		67,245
Municipal bonds	819		210		—		1,029		818		165		—		983
Total investments in lieu of retention	70,277		241		(3,219)		67,299		71,786		166		(3,724)		68,228

Total AFS debt securities	$	163,946	$	306	$	(8,713)	$	155,539	$	169,876	$	180	$	(10,272)	$	159,784

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UNAUDITED

The following table summarizes the fair value and gross unrealized losses aggregated by category and the length of time that individual securities have been in ~~lieu~~a continuous unrealized loss position as of ~~retention consisted of corporate~~March 31, 2023 and December 31, 2022:


	As of March 31, 2023
	Less than 12 Months				12 Months or Greater				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Restricted investments:
Corporate debt securities	$	11,456	$	(204)	$	32,499	$	(2,841)	$	43,955	$	(3,045)
U.S. government agency securities	13,782		(154)		14,194		(1,225)		27,976		(1,379)
Municipal bonds	737		(23)		7,285		(994)		8,022		(1,017)
Corporate certificates of deposit	—		—		451		(53)		451		(53)
Total restricted investments	25,975		(381)		54,429		(5,113)		80,404		(5,494)

Investments in lieu of retention:
Corporate debt securities	13,065		(146)		46,350		(3,073)		59,415		(3,219)
Total investments in lieu of retention	13,065		(146)		46,350		(3,073)		59,415		(3,219)

Total AFS debt securities	$	39,040	$	(527)	$	100,779	$	(8,186)	$	139,819	$	(8,713)


	As of December 31, 2022
	Less than 12 Months				12 Months or Greater				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Restricted investments:
Corporate debt securities	$	23,559	$	(733)	$	25,842	$	(2,817)	$	49,401	$	(3,550)
U.S. government agency securities	24,834		(939)		5,593		(749)		30,427		(1,688)
Municipal bonds	4,998		(672)		2,956		(585)		7,954		(1,257)
Corporate certificates of deposit	63		(12)		391		(41)		454		(53)
Total restricted investments	53,454		(2,356)		34,782		(4,192)		88,236		(6,548)

Investments in lieu of retention:
Corporate debt securities	34,553		(843)		32,391		(2,881)		66,944		(3,724)
Total investments in lieu of retention	34,553		(843)		32,391		(2,881)		66,944		(3,724)

Total AFS debt securities	$	88,007	$	(3,199)	$	67,173	$	(7,073)	$	155,180	$	(10,272)

The unrealized losses in AFS debt securities as of ~~$57.5 million, money~~March 31, 2023 and December 31, 2022 are primarily attributable to market ~~funds~~interest rate increases and not a deterioration in credit quality of ~~$27.5 million~~the issuers. Management evaluated the unrealized losses in AFS debt securities considering factors including credit ratings and ~~municipal bonds~~other relevant information, which may indicate that contractual cash flows are not expected to occur. Based on the analysis, management determined that credit losses did not exist for AFS debt securities in an unrealized loss position as of ~~$1.3 million.~~ March 31, 2023 and December 31, 2022.

It is not considered likely that the Company will be required to sell the investments before full recovery of the amortized cost basis of the AFS debt securities, which may be at maturity. As a result, consistent with the same period in 2022, the Company has not recognized any impairment losses in earnings during the three months ended March 31, 2023.

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UNAUDITED

The amortized cost and fair value of ~~these available-for-sale~~AFS debt securities atby contractual maturity as of March 31, ~~2022 and December 31, 2021 was not materially different~~2023 are summarized in the table below. Actual maturities may differ from contractual maturities because certain borrowers have the ~~fair value.~~right to call or prepay certain obligations.



(in thousands)	Amortized Cost		Fair Value

Due within one year	$	25,973	$	25,531
Due after one year through five years	127,355		120,639
Due after five years	10,618		9,369
Total	$	163,946	$	155,539

The carrying values of receivables, payables and other amounts arising out of normal contract activities, including retention, which may be settled beyond one year, are estimated to approximate fair value. Of the Company’s long-term debt, the fair value of the 2017 Senior Notes was ~~$476.8~~$352.5 million and ~~$504.9~~$439.7 million as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. The fair ~~value~~values of the 2017 Senior Notes ~~was~~were determined using Level 1 inputs, specifically current observable market prices. The fair value of the Term Loan B was ~~$409.2~~$385.4 million and ~~$419.7~~$389.5 million as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. The fair ~~value~~values of the Term Loan B ~~was~~were determined using Level 2 inputs, specifically third-party quoted market prices. The reported value of the Company’s remaining borrowings approximates fair value as of March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.

(14)Variable Interest Entities (VIEs)

The Company may form joint ventures or partnerships with third parties for the execution of projects. In accordance with ASC 810, Consolidation (“ASC 810”), the Company assesses its partnerships and joint ventures at inception to determine if any meet the qualifications of a VIE. The Company considers a joint venture a VIE if either (a) the total equity investment is not

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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.

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

As of March 31, ~~2022,~~2023, the Company had unconsolidated VIE-related current assets and liabilities of ~~$0.5~~$0.6 million and ~~$0.1~~$0.2 million, respectively, included in the Company’s Condensed Consolidated Balance ~~Sheet.~~Sheets. As of December 31, ~~2021,~~2022, the Company had unconsolidated VIE-related current assets ~~and liabilities~~ of ~~$0.7 million and~~ $0.4 million ~~respectively,~~ included in the Company’s Condensed Consolidated Balance ~~Sheet.~~Sheets. The Company’s maximum exposure to loss as a result of its investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding commitments. There were no future funding requirements for the unconsolidated VIEs as of March 31, ~~2022.~~2023.

As of March 31, ~~2022,~~2023, the Company’s Condensed Consolidated Balance ~~Sheet~~Sheets included current and noncurrent assets of ~~$603.1~~$506.4 million and ~~$5.3~~$28.9 million, respectively, as well as current liabilities of ~~$513.2~~$552.4 million related to the operations of its consolidated VIEs. As of December 31, ~~2021,~~2022, the Company’s Condensed Consolidated Balance ~~Sheet~~Sheets included current and noncurrent assets of ~~$568.2~~$527.3 million and ~~$3.0~~$22.4 million, respectively, as well as current liabilities of ~~$496.9~~$567.3 million related to the operations of its consolidated VIEs.

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

The Company established a joint venture to construct the Purple Line Extension Section 2 (Tunnels and Stations) and Section 3 (Stations) mass-transit projects in Los Angeles, California with an original combined value of approximately $2.8 billion. The Company has a 75% interest in the joint venture with the remaining 25% held by O&G Industries, Inc. The joint venture was initially financed with contributions from the partners and, per the terms of the joint venture agreement, the partners may be required to provide additional capital contributions in the future. The Company has determined that this joint venture is a VIE for which the Company is the primary beneficiary.

The Company also established a joint venture with Parsons Corporation (“Parsons”) to construct the Newark Liberty International Airport Terminal One project, a transportation infrastructure project in Newark, New 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.

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(15)Changes in Equity

A reconciliation of the changes in equity for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 is provided below:


	Three Months Ended March 31, 2023
(in thousands)	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity
Balance - December 31, 2022	$	51,521	$	1,140,933	$	304,301	$	(47,037)	$	(7,734)	$	1,441,984
Net income (loss)	—		—		(49,196)		—		267		(48,929)
Other comprehensive income	—		—		—		1,727		153		1,880
Share-based compensation	—		1,395		—		—		—		1,395
Issuance of common stock, net	124		(247)		—		—		—		(123)
Contributions from noncontrolling interests	—		—		—		—		2,000		2,000
Distributions to noncontrolling interests	—		—		—		—		(8,500)		(8,500)
Balance - March 31, 2023	$	51,645	$	1,142,081	$	255,105	$	(45,310)	$	(13,814)	$	1,389,707


	Three Months Ended March 31, 2022
(in thousands)	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity
Balance - December 31, 2021	$	51,096	$	1,133,150	$	514,310	$	(43,635)	$	18,799	$	1,673,720
Net income (loss)	—		—		(21,634)		—		2,821		(18,813)
Other comprehensive loss	—		—		—		(3,110)		(379)		(3,489)
Share-based compensation	—		1,724		—		—		—		1,724
Issuance of common stock, net	104		(186)		—		—		—		(82)
Contributions from noncontrolling interests	—		—		—		—		961		961
Distributions to noncontrolling interests	—		—		—		—		(7,500)		(7,500)
Balance - March 31, 2022	$	51,200	$	1,134,688	$	492,676	$	(46,745)	$	14,702	$	1,646,521

Three Months Ended March 31, 2021
(in thousands) Common
Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Loss Noncontrolling
Interests Total
Equity
Balance - December 31, 2020 $ 50,827 $ 1,127,385 $ 422,385 $ (46,741) $ (10,911) $ 1,542,945
Net income — — 16,034 — 9,071 25,105
Other comprehensive income (loss) — — — (615) 296 (319)
Share-based compensation — 1,586 — — — 1,586
Issuance of common stock, net 111 (1,347) — — — (1,236)
Contributions from noncontrolling interests — — — — 4,000 4,000
Balance - March 31, 2021 $ 50,938 $ 1,127,624 $ 438,419 $ (47,356) $ 2,456 $ 1,572,081

2224

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(16)Other Comprehensive Income (Loss)

ASC 220, Comprehensive Income, establishes standards for reporting comprehensive income and its components in the consolidated financial statements. The Company reports the change in pension benefit plan assets/liabilities, cumulative foreign currency translation and change in fair value of investments as components of accumulated other comprehensive income (loss) (“AOCI”).

The components of other comprehensive income (loss) and the related tax effects for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 were as follows:


		Three Months Ended March 31, 2022						Three Months Ended March 31, 2021							Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
(in thousands)	(in thousands)	Before-Tax Amount		Tax (Expense) Benefit		Net-of-Tax Amount		Before-Tax Amount		Tax (Expense) Benefit		Net-of-Tax Amount		(in thousands)	Before-Tax Amount		Tax Expense		Net-of-Tax Amount		Before-Tax Amount		Tax (Expense) Benefit		Net-of-Tax Amount
Other comprehensive income (loss):	Other comprehensive income (loss):													Other comprehensive income (loss):
Defined benefit pension plan adjustments	Defined benefit pension plan adjustments	$	639	$	(181)	$	458	$	683	$	(191)	$	492	Defined benefit pension plan adjustments	$	415	$	(114)	$	301	$	639	$	(181)	$	458
Foreign currency translation adjustments	Foreign currency translation adjustments	256		1		257		402		(30)		372		Foreign currency translation adjustments	340		(90)		250		256		1		257
Unrealized loss in fair value of investments		(5,514)		1,310		(4,204)		(1,550)		367		(1,183)
Unrealized gain (loss) in fair value of investments														Unrealized gain (loss) in fair value of investments	1,685		(356)		1,329		(5,514)		1,310		(4,204)
Total other comprehensive income (loss)	Total other comprehensive income (loss)	(4,619)		1,130		(3,489)		(465)		146		(319)		Total other comprehensive income (loss)	2,440		(560)		1,880		(4,619)		1,130		(3,489)
Less: Other comprehensive income (loss) attributable to noncontrolling interests	Less: Other comprehensive income (loss) attributable to noncontrolling interests	(379)		—		(379)		296		—		296		Less: Other comprehensive income (loss) attributable to noncontrolling interests	153		—		153		(379)		—		(379)
Total other comprehensive income (loss) attributable to Tutor Perini Corporation	Total other comprehensive income (loss) attributable to Tutor Perini Corporation	$	(4,240)	$	1,130	$	(3,110)	$	(761)	$	146	$	(615)	Total other comprehensive income (loss) attributable to Tutor Perini Corporation	$	2,287	$	(560)	$	1,727	$	(4,240)	$	1,130	$	(3,110)

The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation and attributable to noncontrolling interests during the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 were as follows:

Three Months Ended March 31, 2022
(in thousands) Defined
Benefit
Pension
Plan Foreign
Currency
Translation Unrealized Gain (Loss) in Fair Value of Investments, Net Accumulated
Other
Comprehensive
Income (Loss)
Attributable to Tutor Perini Corporation:
Balance as of December 31, 2021 $ (37,866) $ (5,787) $ 18 $ (43,635)
Other comprehensive loss before reclassifications — (9) (3,568) (3,577)
Amounts reclassified from AOCI 458 — 9 467
Total other comprehensive income (loss) 458 (9) (3,559) (3,110)
Balance as of March 31, 2022 $ (37,408) $ (5,796) $ (3,541) $ (46,745)
Attributable to Noncontrolling Interests:
Balance as of December 31, 2021 $ — $ 542 $ — $ 542
Other comprehensive income (loss) — 266 (645) (379)
Balance as of March 31, 2022 $ — $ 808 $ (645) $ 163


	Three Months Ended March 31, 2023
(in thousands)	Defined Benefit Pension Plan		Foreign Currency Translation		Unrealized Gain (Loss) in Fair Value of Investments, Net		Accumulated Other Comprehensive Income (Loss)
Attributable to Tutor Perini Corporation:
Balance as of December 31, 2022	$	(32,637)	$	(7,241)	$	(7,159)	$	(47,037)
Other comprehensive income before reclassifications	—		231		1,171		1,402
Amounts reclassified from AOCI	301		—		24		325
Total other comprehensive income	301		231		1,195		1,727
Balance as of March 31, 2023	$	(32,336)	$	(7,010)	$	(5,964)	$	(45,310)
Attributable to Noncontrolling Interests:
Balance as of December 31, 2022	$	—	$	(799)	$	(931)	$	(1,730)
Other comprehensive income	—		19		134		153
Balance as of March 31, 2023	$	—	$	(780)	$	(797)	$	(1,577)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

Three Months Ended March 31, 2021
(in thousands) Defined
Benefit
Pension
Plan Foreign
Currency
Translation Unrealized 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 — 76 (1,060) (984)
Amounts reclassified from AOCI 492 — (123) 369
Total other comprehensive income (loss) 492 76 (1,183) (615)
Balance as of March 31, 2021 $ (43,595) $ (5,246) $ 1,485 $ (47,356)
Attributable to Noncontrolling Interests:
Balance as of December 31, 2020 $ — $ 402 $ — $ 402
Other comprehensive income — 296 — 296
Balance as of March 31, 2021 $ — $ 698 $ — $ 698


	Three Months Ended March 31, 2022
(in thousands)	Defined Benefit Pension Plan		Foreign Currency Translation		Unrealized Gain (Loss) in Fair Value of Investments, Net		Accumulated Other Comprehensive Income (Loss)
Attributable to Tutor Perini Corporation:
Balance as of December 31, 2021	$	(37,866)	$	(5,787)	$	18	$	(43,635)
Other comprehensive loss before reclassifications	—		(9)		(3,568)		(3,577)
Amounts reclassified from AOCI	458		—		9		467
Total other comprehensive income (loss)	458		(9)		(3,559)		(3,110)
Balance as of March 31, 2022	$	(37,408)	$	(5,796)	$	(3,541)	$	(46,745)
Attributable to Noncontrolling Interests:
Balance as of December 31, 2021	$	—	$	542	$	—	$	542
Total other comprehensive income (loss)	—		266		(645)		(379)
Balance as of March 31, 2022	$	—	$	808	$	(645)	$	163

The significant items reclassified out of AOCI and the corresponding location and impact on the Condensed Consolidated Statements of Operations during the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 were as follows:


		Three Months Ended March 31,				Three Months Ended March 31,
(in thousands)	(in thousands)	2022		2021			(in thousands)	2023		2022
Component of AOCI:	Component of AOCI:						Component of AOCI:
Defined benefit pension plan adjustments(a)	Defined benefit pension plan adjustments(a)	$	639	$	683		Defined benefit pension plan adjustments(a)	$	415	$	639
Income tax benefit(b)	Income tax benefit(b)	(181)		(191)			Income tax benefit(b)	(114)		(181)
Net of tax	Net of tax	$	458	$	492		Net of tax	$	301	$	458

Unrealized (gain) loss in fair value of investment adjustments(a)		$	11	$	(156)
Income tax expense (benefit)(b)		(2)		33
Unrealized loss in fair value of investment adjustments(a)							Unrealized loss in fair value of investment adjustments(a)	$	30	$	11
Income tax benefit(b)							Income tax benefit(b)	(6)		(2)
Net of tax	Net of tax	$	9	$	(123)		Net of tax	$	24	$	9

(a)~~Amount~~Amounts included in other income, net on the Condensed Consolidated Statements of Operations.

(b)Amounts included in income tax ~~(expense)~~ benefit on the Condensed Consolidated Statements of Operations.

(17)Business Segments

The Company offers general contracting, pre-construction planning and comprehensive project management services, including planning and scheduling of manpower, equipment, materials and subcontractors required for the timely completion of a project in accordance with the terms and specifications contained in a construction contract. The Company also offers self-performed construction services: site work, concrete forming and placement, steel erection, electrical, mechanical, plumbing, and HVAC (heating, ventilation and air conditioning). As described below, the Company’s business is conducted through 3three segments: Civil, Building and Specialty Contractors. These segments are determined based on how the Company’s Chairman and Chief Executive Officer (chief operating decision maker) aggregates business units when evaluating performance and allocating resources.

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

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

UNAUDITED

The Specialty Contractors segment specializes in electrical, mechanical, plumbing, HVAC and fire protection systems for a full range of civil and building construction projects in the industrial, commercial, hospitality and gaming, and mass-transit end markets. This segment provides the Company with unique strengths and capabilities that allow the Company to position itself as a full-service contractor with greater control over scheduled work, project delivery, and cost and risk management.

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

The following tables set forth certain reportable segment information relating to the Company’s operations for the three months ended March 31, ~~2022~~2023 and ~~2021:~~2022:


		Reportable Segments															Reportable Segments
(in thousands)	(in thousands)	Civil		Building		Specialty Contractors		Total			Corporate			Consolidated Total		(in thousands)	Civil		Building		Specialty Contractors		Total			Corporate			Consolidated Total
Three Months Ended March 31, 2023																Three Months Ended March 31, 2023
Total revenue																Total revenue	$	378,224	$	229,291	$	196,748	$	804,263		$	—		$	804,263
Elimination of intersegment revenue																Elimination of intersegment revenue	(28,354)		362		29		(27,963)			—			(27,963)
Revenue from external customers																Revenue from external customers	$	349,870	$	229,653	$	196,777	$	776,300		$	—		$	776,300
Income (loss) from construction operations																Income (loss) from construction operations	$	18,012	$	(70,209)	$	(12,448)	$	(64,645)	(a)	$	(17,300)	(b)	$	(81,945)
Capital expenditures																Capital expenditures	$	15,065	$	2,017	$	444	$	17,526		$	270		$	17,796
Depreciation and amortization(c)																Depreciation and amortization(c)	$	6,981	$	457	$	619	$	8,057		$	2,351		$	10,408

Three Months Ended March 31, 2022	Three Months Ended March 31, 2022															Three Months Ended March 31, 2022
Total revenue	Total revenue	$	460,742	$	355,978	$	230,864	$	1,047,584		$	—		$	1,047,584	Total revenue	$	460,742	$	355,978	$	230,864	$	1,047,584		$	—		$	1,047,584
Elimination of intersegment revenue	Elimination of intersegment revenue	(69,947)		(25,330)		(153)		(95,430)			—			(95,430)		Elimination of intersegment revenue	(69,947)		(25,330)		(153)		(95,430)			—			(95,430)
Revenue from external customers	Revenue from external customers	$	390,795	$	330,648	$	230,711	$	952,154		$	—		$	952,154	Revenue from external customers	$	390,795	$	330,648	$	230,711	$	952,154		$	—		$	952,154
Income (loss) from construction operations	Income (loss) from construction operations	$	(967)	$	9,464	$	(3,894)	$	4,603	(a)	$	(14,510)	(b)	$	(9,907)	Income (loss) from construction operations	$	(967)	$	9,464	$	(3,894)	$	4,603	(d)	$	(14,510)	(b)	$	(9,907)
Capital expenditures	Capital expenditures	$	11,175	$	2	$	638	$	11,815		$	213		$	12,028	Capital expenditures	$	11,175	$	2	$	638	$	11,815		$	213		$	12,028
Depreciation and amortization(c)	Depreciation and amortization(c)	$	17,000	$	401	$	502	$	17,903		$	2,335		$	20,238	Depreciation and amortization(c)	$	17,000	$	401	$	502	$	17,903		$	2,335		$	20,238

Three Months Ended March 31, 2021
Total revenue		$	583,144	$	457,170	$	324,948	$	1,365,262		$	—		$	1,365,262
Elimination of intersegment revenue		(107,569)		(49,937)		(161)		(157,667)			—			(157,667)
Revenue from external customers		$	475,575	$	407,233	$	324,787	$	1,207,595		$	—		$	1,207,595
Income (loss) from construction operations		$	50,105	$	11,216	$	1,324	$	62,645		$	(12,941)	(b)	$	49,704
Capital expenditures		$	9,564	$	73	$	145	$	9,782		$	53		$	9,835
Depreciation and amortization(c)		$	22,713	$	432	$	959	$	24,104		$	2,770		$	26,874

(a)During the three months ended March 31, ~~2022,~~2023, the Company’s income (loss) from construction operations was negatively impacted by ~~$25.5 million (an after-tax impact of $18.3 million, or $0.36 per diluted share) due to~~ an adverse legal ruling on a ~~dispute related to a Civil segment bridge~~completed mixed-use project in New York, ~~and $17.6~~which resulted in a non-cash, pre-tax charge of $83.6 million ~~(an after-tax impact of $13.9~~($60.1 million, or ~~$0.27~~$1.17 per diluted ~~share) on~~share, after-tax), of which $72.2 million impacted the Building segment and $11.4 million impacted the Specialty Contractors segment, as well as an unfavorable adjustment of $28.0 million ($22.2 million, or $0.43 per diluted share, after tax) for a Civil segment mass-transit project in California, which resulted from the successful negotiation of significant lower margin (and lower risk) change orders that increased the project’s overall estimated profit but reduced the project’s percentage of completion and overall margin ~~percentage.~~percentage as of March 31, 2023.

(b)Consists primarily of corporate general and administrative expenses.

(c)Depreciation and amortization is included in income (loss) from construction operations.

~~A reconciliation of segment results to~~(d)During the ~~consolidated~~three months ended March 31, 2022, the Company’s income (loss) ~~before income taxes is~~from construction operations was negatively impacted by $25.5 million ($18.3 million, or $0.36 per diluted share, after tax) due to an adverse legal ruling on a dispute related to a completed Civil segment bridge project in New York and an adverse impact of $17.6 million ($13.9 million, or $0.27 per diluted share, after tax) for a Civil segment mass-transit project in California, which resulted from the successful negotiation of significant lower margin (and lower risk) change orders that increased the project’s overall estimated profit but reduced the project’s percentage of completion and overall margin percentage as ~~follows:~~

Three Months Ended March 31,
(in thousands) 2022 2021
Income (loss) from construction operations $ (9,907) $ 49,704
Other income, net 3,697 175
Interest expense (16,492) (17,810)
Income (loss) before income taxes $ (22,702) $ 32,069
of March 31, 2022.

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UNAUDITED

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


	Three Months Ended March 31,
(in thousands)	2023		2022
Loss from construction operations	$	(81,945)	$	(9,907)
Other income, net	6,417		3,697
Interest expense	(21,513)		(16,492)
Loss before income taxes	$	(97,041)	$	(22,702)

Total assets by segment were as follows:


(in thousands)	(in thousands)	As of March 31, 2022		As of December 31, 2021		(in thousands)	As of March 31, 2023		As of December 31, 2022
Civil	Civil	$	3,419,911	$	3,310,648	Civil	$	3,368,743	$	3,402,934
Building	Building	969,388		980,989		Building	879,321		898,816
Specialty Contractors	Specialty Contractors	629,886		631,710		Specialty Contractors	385,806		483,535
Corporate and other(a)	Corporate and other(a)	(227,027)		(198,449)		Corporate and other(a)	(157,092)		(242,485)
Total assets	Total assets	$	4,792,158	$	4,724,898	Total assets	$	4,476,778	$	4,542,800

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

Major Customer

Revenue from a single customer with multiple projects, impacting the Civil, Building and Specialty Contractors segments, represented 19.5% of the Company’s consolidated revenue for the three months ended March 31, 2023.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

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

The following ~~discusses~~discussion and analysis of our financial position as of March 31, ~~2022~~2023 and the results of our operations for the three months ended March 31, ~~2022 and~~2023 should be read in conjunction with other information, including the unaudited Condensed Consolidated Financial Statements and notes included in Part I, Item 1, Financial Information, of this Quarterly Report on Form 10‑Q, the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10‑K for the year ended December 31, ~~2021,~~2022, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, ~~2021~~2022 and in Part II, Item 1A below.

Forward-Looking Statements

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

•Revisions of estimates of contract risks, revenue or costs; economic factors such as inflation; the timing of new awards; or the pace of project execution, which has resulted and may continue to result in losses or lower than anticipated profit;

•Unfavorable outcomes of existing or future litigation or dispute resolution proceedings against us or 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;

•A significant slowdown or decline in economic conditions, such as those presented during a recession;

•Increased competition and failure to secure new contracts;

•Contract requirements to perform extra work beyond the initial project scope, which has and in the future could result in disputes or claims and adversely affect our working capital, profits and cash flows;

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

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

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

•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, as well as damage to our reputation;

•Inability to attract and retain our key officers, and to adequately plan for their succession, and hire and retain personnel required to execute and perform on our contracts;

•The COVID-19 pandemic, which has adversely impacted, and could continue to adversely impact, our business, financial condition and results of operations by, among other things, delaying the timing of project bids and/or awards and the timing of dispute resolutions and associated collections;

•Risks related to our international operations, such as uncertainty of U.S. ~~Government~~government funding, as well as economic, political, regulatory and other risks, including risks of loss due to acts of war, ~~civil unrest, security issues,~~ labor conditions ~~corruption~~ and other unforeseeable events in countries where we do business, ~~resulting~~which could adversely affect our revenue and earnings;

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

•An inability to obtain bonding could have a negative impact on our operations and results;

•Possible systems and information technology interruptions and breaches in data security and/or privacy;

•~~Client cancellations of, or reductions in scope under, contracts reported~~Downgrades in our ~~backlog;~~credit ratings;

•Failure to meet our obligations under our debt agreements, especially in a high interest rate environment;

•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 and/or reputational harm;

•The impact of inclement weather conditions on projects;

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

•Risks related to government contracts and related procurement regulations;

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

•Significant fluctuations in the market price of our common stock, which could result in substantial losses for stockholders and potentially subject us to securities litigation;

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•Public health crises, such as the COVID-19 pandemic, have adversely impacted, and could in the future adversely impact, our business, financial condition and results of operations by, among other things, delaying the timing of project bids and/or ~~shareholder activism;~~awards and the timing of dispute resolutions and associated collections;

•Violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws;

•~~Adverse health events, such as an epidemic or another pandemic;~~

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•Physical and regulatory risks related to climate change;

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

•~~Downgrades in our credit ratings;~~

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

•The exertion of influence over the Company by our chairman and chief executive officer due to his position and significant ownership interest.

Executive Overview

COVID-19 Update

~~Since its onset in early~~During 2020 and 2021, the COVID-19 pandemic ~~has~~ caused ~~occasional temporary shortages in available manpower,~~shut-downs or significant reductions in ~~field labor productivity, other inefficiencies, delays to project schedules and deferrals~~the operations of project execution. As a result, we continue to incur incremental costs, much of which we are seeking to recover from our customers as allowed by contractual terms. The relief sought from customers, together with certain incremental project opportunities that resulted from the pandemic, has helped to mitigate the pandemic's negative impact on our financial results. In addition, we have experienced delays in certain legal proceedings, as various courts and ~~arbitrators process a large backlog of cases that were impacted by the pandemic. The COVID-19 pandemic has also~~arbitration offices, which hindered the Company’s ability to resolve disputes related to unapproved work ~~resulting~~and resulted in the need for the Company to temporarily fund certain project costs that historically would have been promptly negotiated, billed to and collected from customers. ~~These delays~~This negative impact from the pandemic lessened in ~~resolving~~2022 and ~~recovering on such claims have adversely affected our liquidity~~remains low in 2023, with certain previously delayed disputes finally resolved and ~~financial results since~~other settlement conferences and trial dates scheduled or being scheduled. Consequently, the ~~onset~~Company expects to make substantial continued progress in the resolution of ~~the pandemic. However,~~various disputes and unapproved change orders in 2023 and beyond.

Through the latter part of 2021, ~~and the first quarter of 2022, we began to see the scheduling of settlement conferences and trial dates and made progress in resolving certain project disputes and change orders.~~

~~Throughout 2020 and much of 2021,~~ the pandemic also ~~adversely~~significantly delayed the bidding and awarding of various large prospective civil projects, which has affected the volume and timing of our new awards. The follow-on impact has been a substantial reduction in our backlog, revenue and income from construction operations over the past three years. For example, the Company’s consolidated backlog had been near a record level at $11.2 billion as of December 31, 2019, just prior to the onset of the COVID-19 pandemic, but has declined in each subsequent year, and was $7.9 billion as of March 31, 2023, a 29% decrease compared to the end of 2019. Similarly, revenue declined 29% from $5.3 billion for 2020 to $3.8 billion for 2022, though there were other factors that contributed to the revenue decline, particularly in 2022, as discussed in the Form 10-K filed for the year ended December 31, 2022. While the current impacts from the pandemic have lessened, the follow-on impact from delayed project bids and large contract awards ~~which has negatively impacted~~continues to limit our backlog and operating results. The resulting negative impact in the first quarter of 2022 is expected to continue due to previously limited bidding and proposal opportunities, as well as the relatively lower volume of new awards in 2020 and much of 2021. In addition, many of our state and local government customers’ revenue sources ~~have been~~were negatively impacted by the pandemic due to a reduction of commuter and business travel, including curtailed ridership on mass-transit systems (buses, subways, trains, etc.), travel on commercial airlines and driving by the general public. These impacts have resulted in reduced fare and toll collections, lower fuel tax receipts and reduced airport and other facility usage fees.travel. The significant revenue reductions experienced by some of our customers have adversely impacted their ability to pay the Company on a timely basis for amounts due, although these impacts have ~~begun~~continued to moderate. The potential for continued or new pandemic-related delays in project bids and awards could result in lower-than-expected revenue and earnings until such time as the substantial funding relating to the recently enacted federal infrastructure legislation is distributed to existing and potential customers.

Due to the continued fluidity of the COVID-19 pandemic, uncertainties as to its scope and duration, and ongoing changes in the way that governments, businesses and individuals 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.

Operating Results

Consolidated revenue for the three months ended March 31, ~~2022~~2023 was ~~$1.0 billion~~$776.3 million compared to ~~$1.2 billion~~$952.2 million for the same period in ~~2021.~~2022. The decrease was ~~primarily~~largely due to reduced project execution activities on a ~~completed technology~~transportation project ~~and a mass-transit project~~in the Northeast that is nearing completion, ~~both in California, as well as the impact~~which impacted all three segments, and an unfavorable adjustment of $83.6 million related to an adverse legal ruling on a ~~dispute related to a~~ completed ~~Civil segment bridge~~mixed-use project in New York, which impacted the Building and ~~the temporary unfavorable impact from the successful negotiation of certain change orders~~Specialty Contractors segments, as previously reported on ~~another Civil segment mass-transit project in California.~~a Form 8-K filed on April 21, 2023. The decrease was also due to ~~lower project execution activities in~~ the Northeast, partially offset by certain projects in California and the Midwest. The COVID-19 pandemic resulted in delays in new awards, which negatively impacted revenue for the first quarter of both 2022 and 2021.

Loss from construction operations for the first quarter of 2022 was $9.9 million compared to income from construction operations of $49.7 million for the same period in 2021. The change was partially attributable to the impacts of the above-mentioned adverse legal ruling, which resulted in a non-cash, pre-tax charge of $25.5 million. The decrease was also driven by a temporary unfavorable impact ~~to current-period earnings of $17.6 million on a Civil segment mass-transit project in California, as a result of~~from the successful negotiation of significant lower margin (and lower risk) change orders ~~that~~on a Civil segment mass-transit project in California. These approved change orders increased the project’s overall estimated profit but reduced the project’s percentage of completion and overall margin ~~percentage.~~percentage as of March 31, 2023. This temporary reduction to earnings is expected to reverse itself over the remaining life of the project. In addition, the ~~decrease~~COVID-19 pandemic-induced customer budgetary constraints, combined with certain political and other factors, resulted in the Company not being awarded certain Civil segment projects over the last few years totaling more than $10.0 billion despite having been the low or preferred bidder. Not being awarded these projects also impacted revenue for the first quarters of both 2023 and 2022, and most of these projects are expected to be re-bid later in 2023 or in 2024. Furthermore, the Company was unsuccessful in its pursuit of certain large prospective Civil segment projects in the second half of 2021, which also unfavorably impacted revenue in both periods.

Loss from construction operations for the three months ended March 31, 2023 was $81.9 million compared to $9.9 million for the same period in 2022. The loss for the first quarter of 2023 was primarily due to the aforementioned unfavorable adjustment related to the adverse legal ruling on a completed mixed-use project in New York, which resulted in a non-cash, pre-tax charge of $83.6 million, of which $72.2 million impacted the Building segment and $11.4 million impacted the Specialty Contractors segment. The loss for the 2023 period was also ~~attributable~~due to the ~~revenue decline discussed above.~~temporary unfavorable impact to current-period earnings of $28.0 million from the successful negotiation of significant lower margin (and lower risk) change orders in the first quarter of 2023 on a Civil segment mass-transit project in California. These approved change orders increased the project’s overall estimated profit but reduced the project’s percentage of completion and overall margin percentage as of March 31, 2023. This temporary

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reduction to earnings is expected to reverse itself over the remaining life of the project. The change between periods also reflected the absence of two prior-year unfavorable adjustments (a $25.5 million charge for an adverse legal ruling on a dispute related to a completed Civil segment bridge project in New York and a temporary unfavorable impact of $17.6 million that resulted from the successful negotiation of significant lower margin and lower risk change orders in the first quarter of 2022 on the same Civil segment mass-transit project in California mentioned above).

The effective tax rate was ~~17.1%~~49.6% for the three months ended March 31, ~~2022~~2023 compared to ~~21.7%~~17.1% for the comparable period in ~~2021.~~2022. See Corporate, Tax and Other Matters below for a discussion of the change in the effective tax rate.

~~The~~Diluted loss per common share for the three months ended March 31, ~~2022~~2023 was ~~$0.42~~$0.95 compared to diluted ~~earnings~~loss per common share of ~~$0.31~~$0.42 for the same period in ~~2021.~~2022. The larger diluted loss per common share ~~for the first quarter of 2022 compared to the earnings per common share for the same period~~ in ~~2021~~2023 was primarily due to the factors discussed above that led to the change in ~~income (loss)~~loss from construction operations.

Consolidated new awards for the three months ended March 31, ~~2022~~2023 totaled ~~$996~~$767 million ~~up modestly~~ compared to ~~$959~~$996 million for the same period in ~~2021.~~2022. The Civil and Building segments were the primary contributors to the new award activity in the first quarter of ~~2022.~~2023. The most significant new awards and contract adjustments in the first quarter of ~~2022~~2023 included ~~a $260 million gas pipeline project in British Columbia, Canada, and $121~~$224 million of additional funding for a mass-transit project in ~~California, both~~California; a $91 million educational facility project in California; a $75 million military facility renovation project in Colorado; a $62 million bridge repair project in Minnesota; and $56 million of additional funding for a healthcare project in California. Subsequently, in the ~~Civil segment;~~second quarter of 2023, the Company was awarded more than $3.2 billion of new projects, including the $2.95 billion Brooklyn Jail design-build project in New York, and ~~four Building segment projects~~a $222 million construction project at Tinian International Airport in ~~California totaling $251 million.~~the Commonwealth of Northern Mariana Islands.

Consolidated backlog as of March 31, ~~2022~~2023 was ~~$8.3~~$7.9 billion, ~~up slightly~~level compared to ~~$8.2 billion~~backlog as of December 31, ~~2021.~~2022. As of March 31, ~~2022,~~2023, the mix of backlog by segment was approximately 56% for Civil, 28% for Building and 16% for Specialty Contractors. The Company expects to report a substantially larger backlog at June 30, 2023, as a result of the significant new second quarter 2023 awards mentioned above.

The following table presents the Company’s backlog by business segment, reflecting changes from December 31, ~~2021~~2022 to March 31, ~~2022:~~2023:


(in millions)	(in millions)	Backlog at December 31, 2021		New Awards(a)		Revenue Recognized		Backlog at March 31, 2022(b)		(in millions)	Backlog at December 31, 2022		New Awards(a)		Revenue Recognized		Backlog at March 31, 2023(b)
Civil	Civil	$	4,553.5	$	447.0	$	(390.9)	$	4,609.6	Civil	$	4,416.3	$	379.1	$	(349.9)	$	4,445.5
Building	Building	2,308.9		325.2		(330.6)		2,303.5		Building	2,223.6		233.5		(229.6)		2,227.5
Specialty Contractors	Specialty Contractors	1,373.2		224.2		(230.7)		1,366.7		Specialty Contractors	1,289.2		154.1		(196.8)		1,246.5
Total	Total	$	8,235.6	$	996.4	$	(952.2)	$	8,279.8	Total	$	7,929.1	$	766.7	$	(776.3)	$	7,919.5

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

(b)Backlog may differ from the transaction prices allocated to the remaining performance obligations as disclosed in Note 2 of the Notes to Condensed Consolidated Financial Statements. Such differences relate to the timing of executing a formal contract or receiving a notice to proceed. More specifically, backlog sometimes may include awards for which a contract has not yet been executed or a notice to proceed has not been issued, but for which there are no remaining major uncertainties that we will proceed with our work on the project ~~will proceed~~ (e.g., adequate funding is in ~~place)~~place, we have received a notice of intent to award a contract, etc.).

The outlook for the Company’s growth over the next several years remains favorable, but ~~the impact of the COVID-19 pandemic could again adversely affect performance and operations, and the amount and timing of new work awarded. In addition, the Company’s growth~~it could be negatively impacted by ~~future~~ project delays or the timing of project bids, awards, commencements, ramp-up activities and ~~completions.~~completions, as well as by continuing adverse follow-on impacts of the COVID-19 pandemic. 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 limited competition for some of the largest project opportunities.

In elections over the past ~~several years,~~decade, voters in ~~numerous~~44 states have approved ~~dozens~~85% of ~~long-term transportation funding~~nearly 3,000 state and local ballot measures, ~~totaling approximately $200~~raising an estimated $342 billion in ~~long-term funding.~~new and renewed revenue funding for transportation investments. The largest of these was in Los Angeles County, where Measure M, a half-cent sales tax increase, was approved in 2016. Funding from this measure is already flowing to some of the Company’s current and prospective projects, and overall the measure is expected to generate $120 billion of funding over 40 years. ~~In addition, California's Senate Bill 1,~~Interest rates have risen over the past year, as anticipated, but are still at levels which was signed into law in 2017, is providing an average of $5.4 billion annually through 2027 for various transportation, mass-transit and bridge projects. Despite recent increases, which had been anticipated, interest rates stillwe believe remain ~~relatively attractive, which may be~~ conducive to continued ~~and increased~~ spending on ~~infrastructure~~various types of projects. However, if borrowing rates continue to increase, ~~significantly,~~

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they could reach levels that may ~~begin to~~ negatively impact ~~infrastructure~~ demand, ~~although this is more likely to impact~~particularly for certain Building segment ~~projects, as those projects~~end markets which tend to be more ~~directly~~closely correlated to economic conditions.

The bipartisan Infrastructure Investment and Jobs Act ~~(“IIJA”~~of 2021 (the “Bipartisan Infrastructure Law” or “BIL”) was enacted into law on November 15, 2021, and it provides for $1.2 trillion of federal infrastructure funding, including $550 billion in new spending for improvements to the country’s surface-transportation network and enhancements to core infrastructure. The ~~IIJA~~law marks the largest federal investment in public transit ever, the single largest dedicated bridge investment since the construction of the interstate highway system and the largest federal investment in passenger rail since the creation of Amtrak, all in addition to providing for regular annual spending for numerous infrastructure projects. This significant incremental funding is anticipated to be spent over the next 10 years, and

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much of it is allocated for investment in end markets that are directly aligned with the Company’s market focus. Accordingly, the Company believes that this significant level of sustained, incremental funding will favorably impact the Company’s current work and prospective opportunities over the next decade, ~~once it begins~~as initial funds have begun flowing to ~~customers.~~

~~The Company had certain large Civil segment projects in~~project owners and substantially increased funding from the ~~Northeast that were completed or were nearing completion in 2021. The Company~~BIL is ~~pursuing several large prospective projects in various locations, including the Northeast, the West Coast and Guam, which are~~ expected to ~~be bid and/or awarded in 2022 and 2023. However,~~occur over the timing and magnitude of revenue contributions from these prospective projects may not fully offset revenue reductions associated with the projects that have been completed or are nearing completion. In addition, as discussed above, the COVID-19 pandemic has resulted in, and could again result in, delays in the bidding and awarding of certain projects that the Company is pursuing, which may further delay large, new revenue streams.next several years.

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

Results of Segment Operations

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

Civil Segment

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


		Three Months Ended March 31,				Three Months Ended March 31,
(in millions)	(in millions)	2022		2021			(in millions)	2023		2022
Revenue	Revenue	$	390.8	$	475.6		Revenue	$	349.9	$	390.8
Income (loss) from construction operations	Income (loss) from construction operations	(1.0)		50.1			Income (loss) from construction operations	18.0		(1.0)

Revenue for the three months ended March 31, ~~2022~~2023 decreased ~~18%~~10% compared to the same period in ~~2021.~~2022. The ~~largest contributing factor to the~~ decrease was primarily due to reduced project execution activities on a transportation project in the Northeast and two mass-transit projects in California, all of which are completed or nearing completion. In addition, the decrease for the three months ended March 31, 2023 reflects the temporary unfavorable impact of the successful negotiation of significant lower margin (and lower risk) change orders on a mass-transit project in ~~California that~~California. These approved change orders increased the project’s overall estimated profit but reduced the project’s percentage of completion and overall margin percentage as of March 31, 2023. This temporary reduction to earnings is ~~nearing completion.~~expected to reverse itself over the remaining life of the project. The decrease ~~was~~in revenue for the first quarter of 2023 also reflected the absence of unfavorable adjustments recognized in the first quarter of 2022 due to ~~the impact of the~~an adverse legal ruling on a dispute related to a bridge project in New York and the temporary unfavorable impact in the first quarter of 2022 from the successful negotiation of ~~certain~~significant lower margin (and lower risk) change orders on ~~another Civil segment~~the same mass-transit project in ~~California.~~California discussed above. Revenue for both periods was also adversely impacted by the follow-on impacts of the COVID-19 pandemic, which delayed bidding activities and awards of certain new projects during 2020 and much of 2021 and negatively impacted revenue for the first quarters of ~~2022~~both 2023 and ~~2021~~2022. Revenue for both periods was also ~~was reduced~~adversely impacted by the ~~aforementioned COVID-19 impacts.~~Company’s lack of success in its pursuit of certain large prospective Civil segment projects in the second half of 2021 and certain projects totaling more than $10.0 billion for which the Company was the low or preferred bidder but no contract was awarded over the last few years due to customer budget constraints.

~~Loss~~Despite the above-mentioned revenue decline, income from construction operations for the three months ended March 31, ~~2022~~2023 was ~~$1.0~~$18.0 million compared to ~~income~~loss from construction operations of ~~$50.1~~$1.0 million for the same period in ~~2021.~~2022. The ~~decrease~~increase was primarily ~~due to~~driven by the ~~impact~~absence of the prior-year pre-tax charge of $25.5 million that resulted from the aforementioned ~~adverse~~ legal ruling on a dispute related to a bridge project in New York, ~~that resulted in a non-cash, pre-tax charge of $25.5 million,~~ as well as the ~~aforementioned temporary~~absence of the prior-year unfavorable pre-tax impact of $17.6 million from the successful negotiation of lower margin (and lower risk) change orders on ~~a Civil segment~~the same mass-transit project in California ~~both~~ as ~~discussed~~mentioned above. The increase was partially offset by the temporary unfavorable pre-tax impact of $28.0 million from the successful negotiation of significant lower margin (and lower risk) change orders in the ~~section entitled~~ ~~Executive Overview. The decrease was also a result~~first quarter of 2023 on the same mass-transit project in California. These approved change orders increased the project’s overall estimated profit but reduced the project’s percentage of completion and overall margin percentage, the impact of which is expected to reverse itself over the remaining life of the ~~revenue reductions discussed above.~~project.

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Operating margin was 5.1% and (0.2)% ~~and 10.5%~~ for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The increase in operating margin ~~decrease~~ was principally due to the above-mentioned factors that drove the changes in revenue and income (loss) from construction operations.

New awards in the Civil segment totaled ~~$447~~$379 million for the first quarter of ~~2022~~2023 compared to ~~$457~~$447 million for the same period in ~~2021.~~2022. The most significant new awards and contract adjustments in the first quarter of ~~2022~~2023 included ~~a $260 million gas pipeline project in British Columbia, Canada, and $121~~$224 million of additional funding for a mass-transit project in ~~California.~~California and a $62 million bridge repair project in Minnesota. The COVID-19 pandemic has ~~resulted in~~caused significant revenue shortfalls for ~~many~~certain state and local government agencies since ~~2020,~~2020. In addition, the timing and ~~it could continue to cause deferrals or cancellations~~magnitude of ~~certain new projects, depending on the allocation and prioritization of~~federal, state and local funding, ~~as well as the availability, timing and magnitude of funding~~including anticipated contributions from the ~~federal government, including anticipated funding from~~BIL, is uncertain, which could result in delays in the ~~recently enacted IIJA.~~bidding and awarding of certain large new projects.

Backlog for the Civil segment was $4.4 billion as of March 31, 2023 compared to $4.6 billion as of March 31, 2022 compared to $4.8 billion as of March 31, 2021, with the modest decline due to revenue that exceeded the volume of new awards over the comparative period, as new awards for the segment have been negatively impacted by the COVID-19 pandemic.2022. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, supported by substantial anticipated funding from various ~~voter-~~

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~~approved~~voter-approved transportation measures and the ~~IIJA,~~BIL, and by public agencies’ long-term spending plans. The Civil segment is well-positioned to capture its share of these prospective projects, but the timing of new awards remains uncertain.

Building Segment

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


		Three Months Ended March 31,				Three Months Ended March 31,
(in millions)	(in millions)	2022		2021			(in millions)	2023		2022
Revenue	Revenue	$	330.6	$	407.2		Revenue	$	229.6	$	330.6
Income from construction operations		9.5		11.2
Income (loss) from construction operations							Income (loss) from construction operations	(70.2)		9.5

Revenue for the three months ended March 31, ~~2022~~2023 decreased ~~19%~~31% compared to the same period in ~~2021,~~2022, primarily due to the aforementioned unfavorable adjustment related to the adverse legal ruling on a completed mixed-use project in New York. The revenue reduction was also due to reduced project execution activities on ~~various~~certain projects in California, Arkansas and the Northeast that are complete or substantially complete, partially offset by contributions from certain newer projects in ~~California.~~California, Oklahoma, Florida and Mississippi. Revenue for ~~the first quarters of 2022 and 2021 also~~both periods was further reduced by the ~~aforementioned~~follow-on impacts of the COVID-19 ~~impacts.~~pandemic, which delayed certain project bids and awards in 2020 and 2021.

~~Income~~Loss from construction operations for the three months ended March 31, ~~2022 decreased 16%~~2023 was $70.2 million compared to income from construction operations of $9.5 million for the same period in ~~2021.~~2022. The decrease was primarily due to the ~~revenue reductions mentioned above.~~aforementioned unfavorable adjustment related to the adverse legal ruling on a completed mixed-use project in New York that resulted in a non-cash, pre-tax charge of $83.6 million, of which $72.2 million impacted the Building segment.

Operating margin was (30.6)% and 2.9% for the three months ended March 31, 2023 and 2022, ~~essentially level compared~~respectively. The change in operating margin was principally due to ~~2.8% for~~ the ~~same period~~aforementioned factors that drove the reductions in ~~2021.~~revenue and income (loss) from construction operations.

New awards in the Building segment totaled ~~$325~~$234 million for the first quarter of ~~2022~~2023 compared to ~~$344~~$325 million for the same period in ~~2021.~~2022. The most significant new awards in the first quarter of ~~2022~~2023 included ~~two~~a $91 million educational facility project in California, a $75 million military facility renovation project in Colorado and $56 million of additional funding for a healthcare project in California. The lingering effects of the COVID-19 pandemic, including the proliferation of remote and hybrid work for many businesses, as well as slowing economic conditions caused by higher inflation and rising interest rates, could continue to result in certain delayed or even canceled Building segment project opportunities, particularly in the corporate office end market. However, other Building segment end markets, such as correctional facilities, health care, ~~projects, an educational project~~education, and ~~an entertainment venue project, all in California, totaling $251 million.~~hospitality and gaming, continue to show strong demand for new and renovated facilities.

Backlog for the Building segment was $2.2 billion as of March 31, 2023, down slightly compared to $2.3 billion as of March 31, ~~2022 compared to $1.6 billion as of March 31, 2021. The increase was primarily driven by two large new awards that were booked into backlog in the third quarter of 2021.~~2022. The Building segment continues to have a large volume of prospective projects across various end markets and geographic ~~locations. We expect continued strong demand~~locations, as economic conditions remain conducive to customer spending on new building facilities and renovations to existing buildings, supported by a still relatively favorable interest rate environment. However, the COVID-19 pandemic has resulted in, and could again result in, reduced demand for our building construction services, as could significantly higher interest rates.noted above.

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Specialty Contractors Segment

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


		Three Months Ended March 31,				Three Months Ended March 31,
(in millions)	(in millions)	2022		2021			(in millions)	2023		2022
Revenue	Revenue	$	230.7	$	324.8		Revenue	$	196.8	$	230.7
Income (loss) from construction operations		(3.9)		1.3
Loss from construction operations							Loss from construction operations	(12.4)		(3.9)

Revenue for the three months ended March 31, ~~2022~~2023 decreased ~~29%~~15% compared to the same period in ~~2021. The decrease was~~2022, principally ~~driven by~~due to reduced project execution activities on ~~various~~the electrical ~~and mechanical projects~~component of a transportation project in the ~~Northeast.~~Northeast that is nearing completion, partially offset by contributions from an industrial facility project in Arizona. The aforementioned adverse legal ruling on a completed mixed-use project in New York also contributed to the revenue decline. Revenue for the ~~first quarters of 2022 and 2021~~period was also ~~was~~ reduced by the ~~aforementioned~~follow-on impacts of the COVID-19 ~~impacts.~~pandemic, which delayed certain project bids and awards in 2020 and 2021.

Loss from construction operations for the three months ended March 31, ~~2022~~2023 was ~~$3.9~~$12.4 million compared to ~~income from construction operations of $1.3~~$3.9 million for the ~~comparable~~same period in ~~2021.~~2022. The ~~change~~larger loss for the first quarter of 2023 was ~~primarily~~principally due to ~~lower profitability and reduced~~the aforementioned unfavorable adjustment related to the adverse legal ruling on a completed mixed-use project ~~execution activities~~ in New York that resulted in a non-cash, pre-tax charge of $83.6 million, of which $11.4 million impacted the ~~Northeast, including the electrical and mechanical components of a transportation project that is nearing completion.~~Specialty Contractors segment.

Operating margin was ~~(1.7)~~(6.3)% and ~~0.4%~~(1.7)% for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The change in operating margin was principally due to the aforementioned factors that drove the changes in revenue and ~~income (loss)~~loss from construction operations.

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New awards in the Specialty Contractors segment totaled ~~$224~~$154 million for the first quarter of ~~2022~~2023 compared to ~~$158~~$224 million for the same period in ~~2021.~~2022. The COVID-19 pandemic has resulted in, and could continue to result in, reduced demand from certain ~~commercial and government~~ customers, particularly in New York, that ~~have been experiencing~~continue to experience funding constraints.

Backlog for the Specialty Contractors segment was $1.2 billion as of March 31, 2023 compared to $1.4 billion as of March 31, 2022 compared to $1.7 billion as of March 31, 2021, with the decline due to revenue that exceeded the volume of new awards over the comparative period, as new awards for the segment have been negatively impacted by the COVID-19 pandemic.2022. The Specialty Contractors segment continues to be increasingly focused on servicing the Company’s ~~backlog of~~current and prospective large Civil and Building segment projects, particularly in the Northeast and California. In addition, the segment 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.

Corporate, Tax and Other Matters

Corporate General and Administrative Expenses

Corporate general and administrative expenses were ~~$14.5~~$16.4 million and ~~$12.9~~$14.5 million during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The increase in the three months ended March 31, ~~2022~~2023 was primarily due to higher compensation-related expenses compared to the same period in ~~2021.~~2022.

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


		Three Months Ended March 31,				Three Months Ended March 31,
(in millions)	(in millions)	2022		2021			(in millions)	2023		2022
Other income, net	Other income, net	$	3.7	$	0.2		Other income, net	$	6.4	$	3.7
Interest expense	Interest expense	(16.5)		(17.8)			Interest expense	(21.5)		(16.5)
Income tax (expense) benefit		3.9		(7.0)
Income tax benefit							Income tax benefit	48.1		3.9

Other income, net ~~improved by $3.5 million~~ for the three months ended March 31, ~~2022~~2023 increased by $2.7 million compared to the same period in ~~2021. The improvement in the~~ 2022, ~~period was~~ primarily due to ~~interest earned~~a gain on ~~federal income tax receivable balances.~~sale of property in the 2023 period.

Interest expense ~~decreased $1.3 million~~ for the three months ended March 31, ~~2022~~2023 increased by $5.0 million compared to the same period in ~~2021.~~2022. The ~~decrease in the 2022 period was primarily due to the absence of amortization of discount and debt issuance costs on convertible notes that were repaid in 2021.~~

~~The effective tax rate was 17.1% and 21.7%~~increase for the three months ended March 31, ~~2022~~2023 was substantially due to higher interest rates on the Term Loan B and ~~2021, respectively.~~ the Revolver, as defined below in Liquidity and Capital Resources.

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The ~~lower~~ effective income tax rate was 49.6% for the three months ended March 31, 2023. The effective income tax rate for the 2023 period was higher than the 21% federal statutory rate primarily due to the pre-tax loss for the period and projected for the year. In periods reporting pre-tax losses, a tax benefit increases the effective income tax rate because it increases the tax benefit generated from the pre-tax loss. The tax benefits that caused a higher effective tax rate were primarily the earnings attributable to noncontrolling interests (for which income taxes are not the responsibility of the Company) and state income taxes (net of the federal tax benefit), partially offset by non-deductible expenses.

The effective income tax rate was 17.1% for the three months ended March 31, 2022. The effective tax rate for the three months ended March 31, 2022, was lower than the 21% federal statutory rate. The Company incurred a pre-tax loss for the quarter, but projected a pre-tax profit for the year and, as a result, tax benefits reduced the effective tax rate. The effective income tax rate was lower than the 21% federal statutory rate primarily due to earnings attributable to ~~non-controlling~~noncontrolling interests, for which income taxes are not the responsibility of the Company, ~~and share-based compensation adjustments in the 2022 period. For a further discussion of~~partially offset by state income taxes ~~refer to Note 6~~(net of the ~~Notes to Condensed Consolidated Financial Statements.~~federal tax benefit).

Liquidity and Capital Resources

Liquidity is provided by available cash and cash equivalents, cash generated from operations, credit facilities and access to capital markets. We have a committed line of credit totaling $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 ~~$134~~$145 million and available cash balances as of March 31, ~~2022,~~2023, will be sufficient to fund ~~any~~ working capital needs and debt maturities for the next 12 months and beyond, ~~provided~~including the prepayment of $44.0 million on the Term Loan B that ~~we are not adversely impacted by unanticipated future events, including further impacts related~~was made, as required, in April 2023 due to a prepayment obligation in the ~~COVID-19 pandemic~~Credit Agreement as a result of the Company generating “excess” cash flow in 2022, as discussed ~~above~~below in ~~Executive Overview~~ - ~~COVID-19 Update~~Debt. ~~Liquidity~~Despite our record operating cash flow in 2022 and relatively strong operating cash flow for the three months ended March 31, 2023 (as discussed below in Cash and Working Capital), liquidity has been and could continue to be ~~adversely impacted~~negatively affected by ~~our inability to collect cash due to~~ the follow-on impacts of the COVID-19 pandemic, which ~~have constrained certain customers’ funding sources~~induced customer budgetary constraints and delayed ~~their ability~~bidding activities and awards of certain large civil projects. We are also still pursuing COVID-19-related cost recoveries from certain customers. Our liquidity was also adversely impacted by the Company’s lack of success in its pursuit of certain large prospective Civil segment projects in the second half of 2021, as well as by instances where the Company was not awarded certain Civil segment projects totaling more than $10.0 billion over the last few years due to ~~make payments on approved contract work.~~customer budget constraints, despite being the low or preferred bidder. In addition, as discussed above in Executive Overview - COVID-19 Update, the COVID-19 pandemic delayed court and arbitration schedules and also hindered the Company’s ability to resolve certain unapproved work. We believe that future funding from the ~~IIJA~~BIL and increasing revenue to government customers as travel and commuting levels rise, as discussed above, could offset or mitigate these and other possible lingering future negative impacts from the COVID-19 pandemic, though it remains difficult to predict any of these factors. Furthermore, the ~~bottleneck~~backlog of accumulated court and arbitration proceedings that ~~has grown during~~grew as a result of the pandemic during 2020 and 2021 has ~~recently~~ begun to ~~alleviate~~recede, with certain disputes having been resolved in 2022 and 2023 with other settlement conferences and trial dates now scheduled or being scheduled. In addition, certain disputes and related collection delays were resolved during the latter part of 2021, as well as during 2022 and 2023. We experienced a record operating cash flow in 2022 and strong operating cash flow for the first quarter of ~~2022. We experienced substantially improved~~2023 (whereas typically the Company’s first quarter operating cash flow is negative due to the seasonality of the business), and we expect strong operating cash flows ~~in the first quarter of 2022, and also anticipate improved operating cash generation~~

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to continue for the remainder of ~~2022 compared to 2021,~~2023, based on projected cash collections, both from project execution activities and the resolution of ~~various other~~additional outstanding claims and unapproved change orders.

Cash and Working Capital

Cash and cash equivalents were ~~$316.5~~$282.7 million as of March 31, ~~2022~~2023 compared to ~~$202.2~~$259.4 million as of December 31, ~~2021.~~2022. Cash immediately available for general corporate purposes was ~~$75.8~~$63.9 million and ~~$60.2~~$47.7 million as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, with the remainder being amounts held by our consolidated joint ventures and also our proportionate share of cash held by our unconsolidated joint ventures. Cash held by our joint ventures ~~was~~is available only for joint venture-related uses, including distributions to joint venture partners. In addition, our restricted cash and restricted investments totaled ~~$89.9~~$108.2 million as of March 31, ~~2022~~2023 compared to ~~$93.6~~$106.0 million as of December 31, ~~2021.~~2022. Restricted cash and restricted investments at March 31, ~~2022~~2023 were primarily held to secure insurance-related contingent obligations.

During the three months ended March 31, 2023, net cash provided by operating activities was $21.3 million. The net cash provided by operating activities was primarily due to a decrease in investments in project working capital, partially offset by cash utilized by earnings sources. The decrease in investments in project working capital was primarily due to a decrease in costs and estimated earnings in excess of billings (“CIE”) and decreases in accounts receivable and retention receivable that resulted from improved collection activity. During the three months ended March 31, 2022, net cash provided by operating activities was $120.7 million, which was the largest ~~first-quarter~~first quarter operating cash flow since the merger between Tutor-Saliba Corporation and Perini Corporation in 2008. This ~~increase~~net cash provided by operating activities was ~~substantially~~primarily due to a decrease in investments in project working capital. The decrease in investments in project working capital was primarily due to an improved

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collection ~~cycle,~~activity, as reflected by increases in ~~billings~~billing in excess of costs and estimated earnings (“BIE”), and decreases in accounts receivable and retention receivable. During the three months ended March 31, 2021, net cash used in operating activities was $46.7 million, due primarily to investments in project working capital partially offset by cash generated from earnings sources. The increase in working capital for the first three months of 2021 primarily reflects a decrease in accounts payable due to timing of payments to suppliers and subcontractors and a decrease in accrued expenses and other current liabilities, partially offset by a decrease in accounts receivable due to the timing of collections.

Cash flow from operating activities ~~increased $167.5~~decreased $99.4 million when comparing the first three months of ~~2022~~2023 with the same period in ~~2021.~~2022. The significant increase was primarily driven by an improved cash collection cycle, including collections associated with the recent resolution of certain project change orders that were previously disputed and that had previously required a use of cash. The increasedecrease in cash flow from operating activities for the first three months of 2023 compared to the first three months of 2022 primarily resulted from cash utilized by earnings sources in the current year compared to cash generated by earnings sources in the prior year, partially offset by a larger current-year decrease in investment in working capital compared to last year. The larger decrease in investment in working capital in the 2023 period was ~~also~~primarily driven by a larger current-year decrease in CIE compared to the prior year, a current-year decrease in other current assets compared to a prior year increase (primarily due to anprepaid income taxes) and a smaller current-year decrease in accounts payable retention compared to the prior year, partially offset by a smaller current-year increase in BIE and a current-year decrease in accounts payable compared to ~~a decrease~~an increase in the prior year due to timing of payments to vendors and subcontractors. ~~Despite the increase~~Both periods were positively impacted by collections associated with previously disputed matters.

Net cash used in ~~accounts payable in~~investing activities during the first ~~quarter~~three months of ~~2022, the balance as of March 31, 2022~~2023 was ~~$157.2~~$6.9 million, ~~lower compared~~primarily due to the ~~balance as~~acquisition of ~~March 31, 2021.~~

property and equipment (i.e., capital expenditures) totaling $17.8 million, partially offset by proceeds from the sale of property and equipment of $6.5 million and net proceeds from investment transactions of $4.4 million. Net cash used in investing activities during the first three months of 2022 was $14.9 million primarily due to the acquisition of property and equipment ~~for projects~~(i.e., capital expenditures) totaling $12.0 million, as well as net cash used in investment transactions of $4.3 million.

Net cash ~~used in investing~~provided by financing activities ~~during~~was $14.4 million for the first three months of ~~2021~~2023, which was ~~$5.4~~primarily driven by $21.4 million ~~primarily due to the acquisition~~ of ~~property and equipment for projects totaling $9.8 million,~~net proceeds from borrowings, partially offset by $6.5 million of net ~~cash provided from investment transactions of $4.0 million.~~

distributions to noncontrolling interests. Net cash provided by financing activities was $4.1 million for the first three months of 2022, which was primarily driven by $8.6 million of net proceeds from borrowings, partially offset by $3.5 million of net distributions to noncontrolling interests. ~~Net cash provided by financing activities for the comparable period in 2021 was $1.1 million.~~

At March 31, ~~2022,~~2023, we had working capital of ~~$2.1~~$1.6 billion, a ratio of current assets to current liabilities of ~~2.12~~1.82 and a ratio of debt to equity of ~~0.61,~~0.71, compared to working capital of ~~$2.1~~$1.7 billion, a ratio of current assets to current liabilities of ~~2.17~~1.87 and a ratio of debt to equity of ~~0.59~~0.66 at December 31, ~~2021.~~2022.

Debt

2020 Credit Agreement

The 2020 Credit Agreement requires the Company to make prepayments on the Term Loan B in connection with certain asset sales, receipts of insurance proceeds, incurrences of certain indebtedness and annual excess cash flow (in each case, subject to certain customary exceptions). Included in current maturities of long-term debt in the accompanying Condensed Consolidated Balance Sheets is a $44.0 million prepayment of principal on the Term Loan B that was made in April 2023. The prepayment resulted from our record operating cash flow in 2022, which produced “excess” cash flow under the terms of the 2020 Credit Agreement, as discussed above.

Borrowings under the 2020 Credit Agreement bear interest at variable rates, which have increased since the latter part of 2022 due to changes in market conditions that resulted in increases in LIBOR, in the case of the Term Loan B, and the administrative agent’s prime lending rate, in the case of the Revolver. Effective May 2, 2023, the 2020 Credit Agreement was amended to transition the Company’s original LIBOR option in respect of the Term Loan B to Adjusted Term SOFR. The average borrowing rates on the Term Loan B and the Revolver for the three months ended March 31, 2023 were approximately 9.4% and 11.6%, respectively. At March 31, 2023, the borrowing rates on the Term Loan B and the Revolver were 9.6% and 11.8%, respectively. For more information regarding the terms of our 2020 Credit Agreement, refer to Note 8 of the Notes to Condensed Consolidated Financial Statements.

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The table below presents our actual and required ~~consolidated~~ first lien net leverage ratio under the 2020 Credit Agreement for the period, which is calculated on a rolling four-quarter basis:


	Trailing Four Fiscal Quarters Ended
	March 31, ~~2022~~2023
	Actual	Required
First lien net leverage ratio	~~1.35~~3.50 to 1.00	≤ ~~2.25~~3.75 : 1.00

On October 31, 2022, the 2020 Credit Agreement was amended to increase the maximum First Lien Net Leverage Ratio covenant level for certain fiscal quarters. On March 10, 2023, the 2020 Credit Agreement was further amended to set the maximum First Lien Net Leverage Ratio covenant level to 3.50:1.00, effective the fiscal quarter ended December 31, 2022, and increasing to 3.75:1.00 for the fiscal quarter ending March 31, 2023 and subsequently stepping down to 3.00:1.00 for the fiscal quarter ending June 30, 2023, 2.50:1.00 for the fiscal quarter ending September 30, 2023 and 2.25:1.00 for the fiscal quarter ending December 31, 2023 and each fiscal quarter thereafter. As of March 31, ~~2022,~~2023, we were in compliance and expect to continue to be in compliance with the covenants under the 2020 Credit Agreement.

Contractual Obligations

There have been no material changes in our contractual obligations from those described in our Annual Report on Form 10‑K for the year ended December 31, ~~2021.~~2022.

Critical Accounting Policies and Estimates

Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10‑K for the year ended December 31, ~~2021.~~2022. Our critical accounting estimates are also identified and discussed in Part II, Item 7 of our Annual Report on Form 10‑K for the year ended December 31, ~~2021.~~2022.

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued by the Financial Accounting Standards Board during the three months ended March 31, ~~2022~~2023 and through the date of filing of this report that had or are expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in our exposure to market risk from that described in Part II, Item 7A of our Annual Report on Form 10‑K for the year ended December 31, ~~2021.~~2022.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

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

Changes in Internal Control Over Financial Reporting

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

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PART II. – OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of our business, we are involved in various legal proceedings. We disclose information about certain pending legal proceedings pursuant to SEC rules and as we otherwise determine to be appropriate. For information on such pending matters, see Part I, Item 3 of our Annual Report on Form 10‑K for the year ended December 31, ~~2021,~~2022, updated by Note 10 of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10‑Q.

Item 1A. Risk Factors

There have been no material changes to our risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Item 4. Mine Safety Disclosures

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

~~For~~to customers in the ~~quarter ended March 31, 2022,~~mining industry. Accordingly, we ~~do not have any~~provide information regarding mine safety violations orand other ~~regulatory~~mining regulation matters in Exhibit 95 to ~~disclose pursuant to Section 1503(a)~~this Form 10-Q.

Item 5.Other Information

On May 2, 2023, Tutor Perini Corporation amended its 2020 Credit Agreement (“the Amendment”). As of the ~~Dodd-Frank Act~~effective date, the Amendment changes the reference interest rate on the Term Loan B from LIBOR to Adjusted Term SOFR. The Amendment does not change the total commitments or the maturity under the 2020 Credit Agreement.

The foregoing description of the Amendment does not constitute a complete summary and ~~Item 104~~is qualified in its entirety by reference to the full text of ~~Regulation S-K.~~the Amendment, a copy of which is filed herewith as Exhibit 10.2.

Item 6. Exhibits


Exhibits			Description
10.1*			~~Amended and Restated Employment~~Letter Agreement, dated ~~August 2, 2021,~~January 23, 2023, by and between Tutor Perini Corporation and ~~Michael Smithson.~~Ghassan Ariqat.
10.2*10.2			~~Form~~Third Amendment to Credit Agreement, dated as of ~~Restricted Stock Unit Award Agreement.~~
10.3*			~~Form of Restricted Stock Unit Award Agreement with Guarantee.~~
10.4*			~~Form of Stock Option Agreement.~~
10.5*			~~Form of Cash-Settled Performance Stock Unit~~ ~~Award Agreement.~~May 2, 2023.
31.1			Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2			Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1			Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2			Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95			Mine Safety Disclosure.
101.INS			XBRL Instance Document – 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 March 31, ~~2022,~~2023, formatted in Inline XBRL (included as Exhibit 101).

* Management contract or compensatory plan or arrangement

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SIGNATURE

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


	Tutor Perini Corporation

Dated: May 4, ~~2022~~2023	By:	/s/ Gary G. Smalley
	Gary G. Smalley
	Executive Vice President and Chief Financial Officer

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