UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

þ☒

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2019

2021

or

o☐

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ -to-

 __________

Commission File No.Number: 1-6314

Tutor Perini Corporation

(Exact name of registrant as specified in its charter)

 Massachusetts (Exact name of registrant as specified in its charter)

 04-1717070 

Massachusetts

04-1717070
(State or Other Jurisdiction of Incorporation or Organization)

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

15901 Olden Street, Sylmar, California

91342

(Address of principal executive offices)

(Zip Code)

(818) 362-8391

(Registrant’s telephone number, including area code)

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 

Securities registered pursuant to Section 12(g) of the Act:None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þYes☒  No o

☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o☐ No  þ

☒

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 þ☒ No o

☐

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 þ☒ No o

☐

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 oþ

Accelerated filer o

☒

Non-accelerated filer o

Smaller reporting company o

☐

Emerging growth company o

☐

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 ActAct. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐  No ☒þ

The aggregate market value of voting Common Stock held by non-affiliates of the registrant was $549,519,663$573,656,973 as of June 28, 2019,30, 2021, the last business day of the registrant’s most recently completed second fiscal quarter.

The number of shares of Common Stock, $1.00 par value per share, outstanding at February 21, 202017, 2022 was 50,298,607.

51,095,706.

Documents Incorporated by Reference

The information required by Part III of this Annual Report on Form 10-K, to the extent not set forth herein, is incorporated herein by reference to the registrant’s definitive proxy statement relating to the Annual Meeting of Shareholders to be held in 2020,2022, which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates.



TUTOR PERINI CORPORATION

2019

2021 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

CONTENTS

PAGE

3

910

1316

1417

1417

1417

1517

1718

18

28

2829

2829

29

31

31

PART III.

31

31

31

31

31

3132

3334

3435

2

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Table of Contents

PARTPART I.

Forward-Looking Statements

The statements contained in this Annual Report on Form 10-K that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), including without limitation, statements regarding our management’s expectations, hopes, beliefs, intentions or strategies regarding the future and statements regarding future guidance or estimates and non-historical performance. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effects on us. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. These material risks and uncertainties are listed and discussed in Item 1A. Risk Factors,below. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

ITEM 1. BUSBUSINESS
General
INESS

General

Tutor Perini Corporation, formerly known as Perini Corporation (“Perini”), was incorporated in 1918 as a successor to businesses that had been engaged in providing construction services since 1894. Tutor Perini Corporation (together with its consolidated subsidiaries, “Tutor Perini,” the “Company,” “we,” “us,” and “our,” unless the context indicates otherwise) is a leading construction company, based on revenue as ranked by Engineering News-Record (“ENR”), offering diversified general contracting, construction management and design-build services to private customers and public agencies throughout the world. The Company was formed as a result of the 2008 merger between Tutor-Saliba Corporation and Perini Corporation (“Perini”) and our legacy dates back to 1894, when Perini's predecessor businesses began providing construction services. Our corporate headquarters are in Los Angeles (Sylmar), California, and we have various other principal offices throughout the United States and its territories (see Item 2. Propertiesfor a listing of our major facilities). Our common stock is listed on the New York Stock Exchange under the symbol “TPC.” We are incorporated in the Commonwealth of Massachusetts.

We have established a strong reputation within our markets for executing large, complex projects on time and within budget while adhering to strict quality control measures. We offer general contracting, pre-construction planning and comprehensive project management services, including the planning and scheduling of the manpower, equipment, materials and subcontractors required for a project. We also offer self-performed construction services including site work; concrete forming and placement; steel erection; electrical, mechanical, plumbing,electrical; mechanical; plumbing; heating, ventilation and air conditioning (HVAC),; and fire protection. During 2019,2021, we performed work on approximately 1,300more than 1,600 construction projects.

In 2019,2021, ENR ranked Tutor Perini as the 12thseventh largest domestic contractor. We are recognized as one of the leading civil contractors in the United States, as evidenced by our performance on several of the country’s largest mass-transit and transportation projects, such as Newark Liberty International Airport Terminal One (“Newark Airport Terminal One”), the East Side Access project in New York City, the California High-Speed Rail System, the Alaskan Way Viaduct Replacement (SR 99)(the “SR 99”) project in Seattle, major portions of the Red Line and Purple Line segments of the Los Angeles Metro subway system, and the San Francisco Central Subway extension to Chinatown. We are also recognized as one of the leadingmajor building contractors in the United States, as evidenced by our performance on several of the country’s largest building development projects, including Hudson Yards in New York City and CityCenter and the Cosmopolitan Resort and Casino, both in Las Vegas,Vegas.
Our strengths and Hudson Yardsexpertise in New York City.

As a resultthe construction of the 2008 merger between our predecessor companies, Tutor-Saliba Corporation (“Tutor-Saliba”)civil and Perini, and the subsequent acquisitions that we made in 2010 and 2011, webuilding infrastructure projects have experienced growth supportedbeen augmented by our increased size, scale, bonding capacity, access to broadervertical integration capabilities, which we established more than 10 years ago through the acquisitions of various business entities specializing in electrical, mechanical, plumbing, HVAC and other services that enhanced our market capabilities and expanded our geographic regions, expanded management capabilities, complementary assets and particular expertise in large, complex projects. presence. Our acquisitions have enabled us to provide customers with a vertically integrated service offering. This vertical integration is a unique capability and competitive advantage that allows us to self-perform a greater amount of work than our competitors. Our vertical integrationIt also increases our competitiveness in bidding and our efficiency in managing and executing large, complex projects. It alsoprojects, and provides us with significant cross-selling opportunities across a broad geographic footprint.

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Business Segment Overview

Our business is conducted through three segments: Civil, Building and Specialty Contractors.

Civil Segment

Our Civil segment specializes in public works construction and the replacement and reconstruction of infrastructure across most of theseveral major geographic regions of the United States. Our civil contracting services include construction and rehabilitation of highways, bridges, tunnels, mass-transit systems, military defense facilities, and water management and wastewater treatment facilities.

The Civil segment is comprised of the Company’s legacy heavy civil construction operations (civil operations of our predecessors, Tutor-Saliba Corporation, its subsidiary Black Construction, and Perini),Perini, as well as our acquired companies, Frontier-Kemper, Lunda Construction and Becho. The Company’s legacyOur heavy civil units operate primarily on the West and East Coasts of the United States and are engaged in a variety of large mass-transit, tunneling, bridge and highway projects. Black Construction is the largest contractor in Guam and provides a variety of heavy civil, building, mechanical and electrical construction services throughout the Western Pacific region and in other strategic military locations. Frontier-Kemper is a heavy civil contractor engaged in the construction of tunnels for highways, railroads, subways and rapid transit systems; the construction of shafts and other facilities for water supply, wastewater transport and hydroelectric projects; and the development and equipping of mines with innovative hoisting, elevator and vertical conveyance systems. Lunda Construction is a heavy civil contractor specializing in the construction, rehabilitation and maintenance of bridges, railroads and other civil structures throughout the United States. Becho is engaged in drilling, foundation and excavation support for shoring, bridges, piers, roads and highway projects, primarily in the southwestern United States. We believe that
In its 2021 rankings, ENR ranked us as the Company has benefitted from these acquisitions by an expanded geographic presence, enhanced civil construction capabilitiesnation’s largest contractor in the transportation market and the addition of experienced management with proven, successful track records.third largest domestic heavy contractor.

Our Civil segment’s customers primarily award contracts through one of two methods: the traditional public “competitive bid” method, in which price is the major determining factor, or through a request forbest value proposal, where contracts are awarded based on a combination of technical qualifications, proposed project team, schedule, past performance on similar projects and price.

Traditionally, our Civil segment’s customers require each contractor to pre-qualify for construction business by meeting criteria that include technical capabilities and financial strength. Our financial strength, and outstanding record of performance on challenging civil works projects, and vertical integration capabilities often enable us to pre-qualify for projects in situations where smaller, less diversified contractors are unable to meet the qualification requirements. We believe this is a competitive advantage that allows us to self-perform a greater amount of work and makes us an attractive partner onideal lead contractor for the largest, most complex infrastructure projects and on prestigious design-build, design-build-operate-maintain and public-private partnership projects.

In its 2019 rankings, ENR ranked us as the nation’s third largest contractor in the transportation market and fifth largest domestic heavy contractor.

We believe the Civil segment provides us with significant opportunities for growth due to the age and condition of existing infrastructure coupled with large government funding sources dedicated to the replacement and reconstruction of aging U.S. infrastructure. In addition, infrastructure improvement programs frequently enjoy popular, bipartisan support from the public and elected officials. Funding for major civil infrastructure projects is typically provided through a combination of one or more of the following: local, regional, state and federal loans and grants; other direct allocations sourced through tax revenue; bonds; user fees; and, for certain projects, private capital.

We have been active in civil construction since 1894 and believe we have a particular expertise in large, complex civil construction projects. We have completed, or are currently working on, some of the most significant civil construction projects in the United States. For example, we are currently working on Newark Airport Terminal One, the East Side Access project in New York City, the first phase of the California High-Speed Rail project, the Purple Line Segments 2 and 3 expansion projects in Los Angeles, the San Francisco Central Subway extension to Chinatown and the Minneapolis Southwest Light Rail Transit project. We have also completed major projects such as the Alaskan Way Viaduct Replacement (SR 99)SR 99 project in Seattle; the platform over the eastern rail yard at Hudson Yards in New York City; the rehabilitation of the Verrazano-Narrows Bridge in New York; and multiple runway reconstruction projects includingat the John F. Kennedy International Airport in New York, Los Angeles International Airport and Fort Lauderdale-Hollywood International Airport.Airport, among others.
We believe the Civil segment provides us with significant opportunities for growth due to the condition of existing infrastructure coupled with large government funding sources dedicated to the replacement and reconstruction of aging U.S. infrastructure. In addition, infrastructure programs generally garner popular, bipartisan support from the public and elected officials due to their favorable long-term economic impacts, including significant job creation. Funding for major Civil segment infrastructure projects is typically provided through a combination of one or more of the following: local, regional, state and federal loans and grants; other direct allocations sourced through tax revenue; bonds; user fees; and, for certain projects, private capital.
On November 15, 2021, the bipartisan Infrastructure Investment and Jobs Act of 2021 (the “IIJA”) was enacted into law. The IIJA 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 marks the largest federal
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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 much of it will be invested in end markets that are directly aligned with our market focus. Accordingly, we believe that this significant level of sustained, incremental funding will favorably impact our current work and prospective opportunities over the next decade.
Building Segment

Our Building segment has significant experience providing services to a number of specialized building markets for private and public works customers, including hospitality and gaming, transportation, health care, commercial offices, government facilities, sports and entertainment, education, correctional facilities, biotech, pharmaceutical, industrial and high-tech.technology. We believe the success of the Building segment results from our proven ability to manage and perform large, complex projects with aggressive fast-track schedules, elaborate designs, and advanced mechanical, electrical and life safety systems, while providing accurate budgeting and strict quality

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control. Although price is a key competitive factor, we believe our strong reputation, long-standing customer relationships and significant level of repeat and referral business have enabled us to achieve a leading position in the marketplace.

In its 20192021 rankings, ENR ranked us as the 17th largest domestic building contractor. We are a recognized leader in the hospitality and gaming market, specializing in the construction of high-end resorts and casinos. We work with hotel operators, Native American tribal councils, developers and architectural firms to provide diversified construction services to meet the challenges of new construction and renovation of hotel and resort properties. We believe that our reputation for completing projects on time is a significant competitive advantage in this market, as any delay in project completion could result in significant loss of revenue for the customer.

The Building segment is comprised of several operating units that provide general contracting, design-build, preconstruction and construction services in various regions of the United States. Rudolph and Sletten focuses on large, complex projects in California in the health care, commercial office, technology, industrial, education, and government facilities markets. Tutor Perini Building CorporationCorp. focuses on large, complex building projects nationwide, including significant projects in the hospitality and gaming, commercial office, education, government facilities, and multi-unit residential markets. Rudolph and Sletten focuses on large, complex projects in California in the health care, commercial office, technology, industrial, education, and government facilities markets. Roy Anderson Corp. provides general contracting services, including major disaster response and reconstruction support, to public and private customers primarily throughout the southeastern United States. Perini Management Services provides diversified construction and design-build services internationally to U.S. government agencies, as well as to surety companies and multi-national corporations.

We have recently completed, or are currently working on, various large private and public building projects across a wide array of building end markets, including commercial offices, multi-unit residential, health care, hospitality and gaming, transportation, education and entertainment.markets. Specific projects include Newark Airport Terminal One in Newark, New Jersey;One; three large corporate office buildings in northern California for distinct confidential technology customers; a commercial office tower at 10 Hudson Yards and a multi-unit residential tower, both at 15 Hudson Yards in New York City; the El Camino Hospital Integrated Medical Office Building in El Camino, California; Kaiser Hospital Buildingsbuildings in San Leandro, Redwood City and Roseville, California; the Choctaw Casino and Resort in Durant, Oklahoma; the Pechanga Resort and Casino expansion in Temecula, California; the O Street Government Office Building in Sacramento, California; and courthouses in San Bernardino and San Diego, California and Broward County, Florida. As a result of our reputation and track record, we were previously awarded and completed contracts for several marquee hospitality and gaming projects in Las Vegas, including CityCenter, the Cosmopolitan Resort and Casino and the Wynn Encore Hotel. These projects span a wide array of building end markets and illustrate our Building segment’s résumé of successfully completed large-scale public and private projects.

Specialty Contractors Segment

Our Specialty Contractors segment specializes in electrical, mechanical, plumbing, HVAC and fire protection systems and pneumatically placed concrete for a full range of civil and building construction projects in the industrial, commercial, hospitality and gaming, and mass-transit end markets. This segment provides unique strengths and vertically integrated service capabilities that position us as a full-service contractor with greater control over project bids and costs, scheduled work, project delivery and risk management. The majority of work performed by the Specialty Contractors segment is contracted directly with state and local municipal agencies, real estate developers, school districts and other commercial and industrial customers. A significantportion of itsthe segment's work has been, and is expected to continue to be, performed for our Civil and Building segments in future years.

segments.

The Specialty Contractors segment is comprised of several operating units that provide unique services in various regions of the United States. Five Star Electric has established itself asCorp. (“Five Star”) is an industry leader and is one of the largest electrical contractors in New York City. Five Star Electric provides construction services, in the electrical sector, including power, lighting, fire alarm, security, telecommunications, low
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voltage and wireless systems to both the public and private sectors. These services are provided across end markets that include multi-unit residential, hotels, commercial offices, industrial, mass transit, education, retail, sports and entertainment, health care and water treatment. Fisk Electric (“Fisk”) covers many of the major commercial, transportation and industrial electrical construction markets in California and the southern United States, with the ability to cover other attractive markets nationwide. Fisk’s expertise is in technologythe design and the development of electrical and technology systems for major projects spanning a broad variety of project types, including commercial office buildings, sports arenas, hospitals, research laboratories, hotels and casinos, convention centers, manufacturing plants, refineries, and water and wastewater treatment facilities. WDF, Nagelbush and Desert Mechanical each provide mechanical, plumbing, HVAC and fire protection services to a range of customers in a wide variety of markets, including transportation, commercial/industrial, schools and universities and residential. WDF is one of the largest mechanical contractors servicingserving the New York City metropolitan region. Nagelbush operates primarily in Florida and Desert Mechanical operates primarily in the western United States. Superior Gunite specializes in pneumatically placed structural concrete utilized in infrastructure projects nationwide, such as bridges, dams, tunnels and retaining walls.

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In its 2019 rankings, ENR ranked us as the 13th largest electrical contractor1, 18th largest mechanical contractor1 and 18th largest specialty contractor1 in the United States. Through Five Star Electric and WDF, collectively, we are also the largest specialty contractor in the New York City metropolitan area.

Our Specialty Contractors business units have completed, or are currently working on, various portions of the East Side Access project in New York City, various projects at the World Trade Center and at Hudson Yards in New York City, and upgrades and rehabilitations at various New York City public housing facilities, and electrical work for the new hospital at the University of Texas Southwestern Medical Center in Dallas.facilities. The Specialty Contractors segment has also supported, or is currently supporting, several large projects in our Civil and Building segments, including the Alaskan Way Viaduct Replacement (SR 99)SR 99 project in Seattle; the San Francisco Central Subway extension to Chinatown; the Purple Line Segments 2 and 3 expansion projects in Los Angeles; Newark Airport Terminal OneOne; the California High Speed Rail project in Newark, New Jersey;central California; McCarran International Airport Terminal 3 in Las Vegas; and several marquee hospitality and gaming projects in Las Vegas, including CityCenter, the Cosmopolitan Resort and Casino, and the Wynn Encore Hotel.

For information regarding the breakdown of our revenue by segment, end market, customer type and contract type, see Note 3 of the Notes to Consolidated Financial Statements. In addition, financial information about geographic areas is discussed in Note 14 of the Notes to Consolidated Financial Statements.
Backlog

Backlog in our industry is a measure of the total value of work that is remaining to be performed on projects that have been awarded. We include a construction project in our backlog when a contract is awarded or when we have otherwise received written definitive notice that the project has been awarded to us and there are no remaining major uncertainties that the project will proceed (e.g., adequate funding is in place). As a result, we believe our backlog is firm, and although cancellations or scope adjustments may occur, historically they have not been material. We estimate that approximately $5$4 billion, or 44%46%, of our backlog as of December 31, 20192021 will be recognized as revenue in 2020.2022. Our backlog by segment, end market, customer type and customercontract type is presented in the following tables:

As of December 31,

As of December 31,

(in thousands)

2019

2018

(in thousands)20212020

Backlog by business segment:

Backlog by business segment:

Civil

$

6,037,195

54

%

$

5,141,863

55

%

Civil$4,553,539 55 %$4,783,564 57 %

Building

2,790,289

25

%

2,333,127

25

%

Building2,308,930 28 %1,702,305 20 %

Specialty Contractors

2,393,626

21

%

1,821,701

20

%

Specialty Contractors1,373,167 17 %1,859,848 23 %

Total backlog

$

11,221,110

100

%

$

9,296,691

100

%

Total backlog$8,235,636 100 %$8,345,717 100 %

As of December 31,

(in thousands)

2019

2018

Civil segment backlog by end market:

Mass transit

$

4,628,664

77

%

$

3,710,354

72

%

Military defense facilities

369,647

6

%

189,004

4

%

Bridges

364,992

6

%

513,839

10

%

Highways

229,851

4

%

348,589

7

%

Tunneling

83,551

1

%

168,113

3

%

Other

360,490

6

%

211,964

4

%

Total Civil segment backlog

$

6,037,195

100

%

$

5,141,863

100

%

As of December 31,

(in thousands)

2019

2018

Building segment backlog by end market:

Hospitality and gaming

$

793,624

28

%

$

26,866

1

%

Municipal and government

584,444

21

%

499,288

21

%

Commercial and industrial facilities

578,852

21

%

518,880

22

%

Mass transit

345,462

12

%

678,371

29

%

Education facilities

233,551

8

%

177,402

8

%

Health care facilities

92,913

3

%

280,354

12

%

Other

161,443

7

%

151,966

7

%

Total Building segment backlog

$

2,790,289

100

%

$

2,333,127

100

%

1This ranking represents the collective revenue of the Company’s specialty contracting subsidiaries as reported to ENR.

As of December 31,
(in thousands)20212020
Civil segment backlog by end market:
Mass transit (includes certain transportation and tunneling projects)$3,256,556 71 %$3,885,275 81 %
Military defense facilities627,407 14 %318,389 7 %
Bridges448,416 10 %244,385 5 %
Water119,707 3 %130,274 3 %
Other101,453 2 %205,241 4 %
Total Civil segment backlog$4,553,539 100 %$4,783,564 100 %

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As of December 31,
(in thousands)20212020
Building segment backlog by end market:
Municipal and government$824,173 36 %$556,726 33 %
Health care facilities575,006 25 %49,655 3 %
Mass transit (includes transportation projects)476,454 21 %144,019 8 %
Commercial and industrial facilities164,878 7 %350,012 21 %
Education facilities140,822 6 %165,766 10 %
Hospitality and gaming94,732 4 %333,315 20 %
Other32,865 1 %102,812 5 %
Total Building segment backlog$2,308,930 100 %$1,702,305 100 %

As of December 31,

As of December 31,

(in thousands)

2019

2018

(in thousands)20212020

Specialty Contractors segment backlog by end market:

Specialty Contractors segment backlog by end market:

Mass transit

$

1,406,047

59

%

$

1,132,158

62

%

Mass transit (includes certain transportation and tunneling projects)Mass transit (includes certain transportation and tunneling projects)$730,480 53 %$1,058,479 57 %
WaterWater164,653 12 %214,717 12 %
Municipal and governmentMunicipal and government158,614 12 %92,749 5 %

Multi-unit residential

307,009

13

%

278,602

15

%

Multi-unit residential137,824 10 %219,139 12 %

Water

278,788

12

%

69,373

4

%

Commercial and industrial facilities

115,742

5

%

100,163

6

%

Commercial and industrial facilities96,686 7 %122,687 7 %

Education facilities

48,741

2

%

95,360

5

%

Other

237,299

9

%

146,045

8

%

Other84,910 6 %152,077 7 %

Total Specialty Contractors segment backlog

$

2,393,626

100

%

$

1,821,701

100

%

Total Specialty Contractors segment backlog$1,373,167 100 %$1,859,848 100 %

As of December 31,

As of December 31,

2019

2018

20212020

Backlog by customer type:

Backlog by customer type:

State and local agencies

69

%

72

%

State and local agencies71 %72 %

Private owners

25

%

20

%

Private owners16 %20 %

Federal agencies

6

%

8

%

Federal agencies13 %8 %

Total backlog

100

%

100

%

Total backlog100 %100 %

As of December 31,
20212020
Backlog by contract type:
Fixed price77 %76 %
Guaranteed maximum price12 %11 %
Unit price4 %4 %
Cost plus fee and other7 %9 %
Total backlog100 %100 %
Fixed price contracts, particularly with federal, state and local government customers, are expected to continue to represent a sizeable percentage of total backlog. The composition of backlog by type of contract for 2019 and 2018 is as follows:

As of December 31,

2019

2018

Backlog by contract type:

Fixed price

76

%

80

%

Guaranteed maximum price

11

%

5

%

Unit price

5

%

8

%

Cost plus fee and other

8

%

7

%

Total backlog

100

%

100

%

Competition

For additional information on customer types and contract types, see Note 3of the Notes to Consolidated Financial Statements.

Competition

While the construction markets include numerous competitors, especially for small to mid-sized projects, much of the work that we target is for larger, more complex projects where there are typically fewer active market participants due to the greater capabilities and resources required to perform the work. In addition to domestic competitors, we have seen certain foreign competitors attempting to grow their presence in the United States over the past several years, particularly through the pursuit of large civilCivil segment projects. In recent years, however, we have observed a diminished presence from some of these foreign competitorsEvolving changes in the bidding for severalconstruction industry, such as the trend toward an increased use of the larger U.S.progressive design-build project opportunities.delivery method that may reduce project risks for both owners and contractors, could result in increased competition and potentially lower margins on certain projects in the future. We believe price, experience, reputation, responsiveness, customer relationships, project completion track record, schedule control, risk management and quality of work are key factors customers consider when awarding contracts.
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In our Civil segment, we compete principally with large civil construction firms, including (alphabetically) Dragados USA; Fluor Corporation; Granite Construction; Kiewit Corporation; OHL USA; Skanska USA; Traylor Bros., Inc.; and The Walsh Group. In our Building segment, we compete with a variety of national and regional contractors, including (alphabetically) AECOM (through its acquisitions of Tishman Construction and Hunt Construction Group); Balfour Beatty Construction; Clark Construction Group; DPR Construction; Gilbane, Inc.; Hensel Phelps Construction Co.; Lendlease Corporation; McCarthy Building Companies, Inc.; Skanska USA; Suffolk Construction; and Turner Construction Company. In our Specialty Contractors segment, we compete principally with various regional and local electrical, mechanical and plumbing subcontractors.

Construction Costs

If

We strive to eliminate or minimize exposure to labor and material price increases in our project bids and the manner in which we execute our work. Generally, if prices for materials, labor or equipment increase excessively, provisions in certain types of contracts often shift all or a major portion of any adverse impact to the customer. In our fixed price contracts, we attempt to insulate ourselves from the unfavorable effects of inflation, when possible, by incorporating escalating wage and price assumptions into our construction cost estimates, by

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obtaining firm fixed price quotes from major subcontractors and material suppliers, and by entering intosecuring purchase commitments for materials early in the project schedule.schedule and by including contingency for these risks in our bid price. Construction and other materials used in our construction activities are generally available locally from multiple sources andsources. Despite the widespread adverse supply chain impacts related to the effects of the COVID-19 pandemic, we have beennot yet experienced significant supply chain issues, but we cannot be certain that such issues may not arise in adequate supply during recent years.the future. Labor resources for our domestic projects are largely obtained through various labor unions. We have not experienced significant labor shortages in recent years, nor do we expect to in the near future, although afuture. However, longer-term, the anticipated significant rapid growthincrease in demand for large complex projects driven by the IIJA could lead to labor shortages.

Seasonality
We experience seasonal trends in our backlog may leadbusiness. Our revenue and operating income are typically higher in the second half of the year. Our first fiscal quarter of the year is typically our lowest revenue quarter, as the harsher winter weather conditions that often occur during this period can negatively impact our ability to situationsexecute work and our productivity in parts of North America. Our revenue typically increases during the high construction seasons of the summer and fall months in the United States. Within the United States, as well as in other parts of the world, our business generally benefits from milder weather conditions during our third fiscal quarter, which labor resources become constrained. We employ expatriateallows for more productivity from our on-site construction operations. For these reasons, it is not unusual for us to experience seasonal changes or fluctuations in our quarterly operating results.
Government Contracts
Most of our federal, state and local labor in selected overseas areas.

Environmental Matters

Our propertiesgovernment customers can terminate, renegotiate, or modify any of their contracts with us at their election, and operationsmany of our federal government contracts are subject to renewal or extension periodically. Revenue derived from federal, state and municipal lawslocal government customers was 66%, 63% and 62% of our total revenue for each of the years ended December 31, 2021, 2020 and 2019, respectively.

Environmental, Health and Safety Regulations
Environmental, health and safety regulations relatingand requirements materially affect our business. We are firmly committed to providing a safe and healthy work environment for our employees and to working in a manner that ensures the safety of our subcontractors, customers and the general public, as well as the protection of the environment, including requirements for water discharges; air emissions; the use, management and disposal of solid or hazardous materials or wastes;facilities, equipment and the cleanup of contamination. In certain circumstances,environment. Compliance with Occupational Safety and Health Administration (“OSHA”) and other health and safety regulations, in particular, is essential to procure business and to attract and retain our workforce. Accordingly, we maymake considerable investments in our environmental, health and safety programs, and we factor costs associated with compliance into our project bids and proposals.
We provide construction and construction management services at various project sites, and sometimes perform work in and around sensitive environmental areas, such as rivers, lakes and wetlands. We also be required to hire subcontractors to disposehandle small quantities of hazardous materials encountered on a project in accordanceoccasion. Significant fines, penalties and other sanctions may be imposed for non-compliance with a plan approved in advance by the owner. We continually evaluate our compliance with all applicable environmental and health and safety laws and regulations, and believe that we are in substantial compliance with thosesome laws provide for joint and regulations. However, future requirements or amendments to current laws or regulations imposing more stringent requirements could require us to incur additional costs to maintain or achieve compliance.

In addition, some environmental laws, such as the U.S. federal “Superfund” law and similar state statutes, can impose liabilityseveral strict liabilities for the entire costremediation of cleanupreleases of contaminated sites upon any of the current or former owners or operators or upon parties who generated waste at, or sent waste to, these sites, regardless of who owned the site at the time of the release or the lawfulness of the original disposal activity. hazardous substances.

Contaminants have been detected at some of the sites that we own and where we have worked as a contractor in the past, and we have incurred costs for the investigation and remediation of hazardous substances. We believe thatHowever, we do not own the job sites upon which we perform our liabilities for these sites are not material, either individually or in the aggregate.work. We have pollution liability insurance coverage for such matters, and if applicable, we seek
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indemnification from customers to cover the risks associated with environmental remediation.

Accordingly, we believe that our environmental liabilities are not material. In addition, we continually evaluate our compliance with all applicable environmental laws and regulations, and believe that we are in substantial compliance with those laws and regulations.

Insurance and Bonding

All of our properties and equipment, as well as those of our joint ventures, are covered by insurance in amounts that we believe are consistent with our risk of loss and industry practice. Our wholly owned subsidiary, PCR Insurance Company, issues policies for default insurance for our subcontractors, autoautomobile liability, general liability and workers’ compensation insurance, allowing us to centralize our claims and risk management functions to reduce our insurance-related costs.

As a normal part of the construction business, we are often required to provide various types of surety bonds as an additional level of security for our performance. We also require many of our higher-risk subcontractors to provide surety bonds as security for payment of subcontractors and suppliers and to guarantee their performance. As an alternative to traditional surety bonds, we also have purchased subcontractor default insurance for certain construction projects to insure against the risk of subcontractor default.
Human Capital Resources
The foundation of our continuing success as a leading construction services business is our ability to attract and retain the industry’s best talent by providing a culture of opportunity, development, accountability and empowerment. This understanding guides our approach to managing our human capital resources.
Employees.

Employees

Our principal asset is our employees, many of whom have technical and professional backgrounds and undergraduate and/or advanced degrees. As of December 31, 2021, we had approximately 7,800 employees (including union employees), of which approximately 1,900 were salaried and 5,900 were hourly employees. The number of our employees varies basedat any given time depends on the numbervolume and types of active projects the type and magnitude of those projects,in progress, as well as our position within the lifecycle of those projects. Our total numberWe believe that we have strong relationships with our employees and that the quality and level of service that our employees as of December 31, 2019 was approximately 9,100.deliver to our customers are among the highest in our industry.

Union Workforce.

We are signatory to numerous local and regional collective bargaining agreements, both directly and through trade associations, as a union contractor. These agreements cover all necessary union crafts and are subject to various renewal dates. As of December 31, 2021, our workforce included a total of approximately 3,900 union employees. Estimated amounts for wage escalation related to the expiration of union contracts are included in our bids on various projects; accordingly, the expiration of any union contract in the next year is not expected to have any material impact on us. During the past several years, we have not experienced any significant work stoppages caused by our union employees.

Talent Recruitment, Training and Retention.

Financial Our business relies upon an adequate supply of management, supervisory and field personnel. Recruiting, training and retaining key personnel has been and will remain primary goals of our human capital initiative. Through the use of management information about geographic areassystems, on-the-job training and educational seminars, employees are trained to understand the importance of project execution. We place a strong emphasis on training employees in accurate and comprehensive project estimating, project management and project cost control. As is discussedcommon in Note 15our industry, we experience some recurring employee turnover each year, which we believe is comparable to the Consolidated Financial Statements underindustry average. Historically, we have successfully attracted and retained sufficient numbers of personnel, including union personnel, to support our operational needs. We strive to ensure a fully competent project management team that includes long-term successors to our current project leaders by investing significant resources to build strong and highly competent project managers. We regularly hire construction management and engineering staff, including interns and recent graduates, and provide them with engaging projects and development programs. On the heading “Geographic Information.”occasion when we have a need for senior project executives, the broad professional network of our leadership team often provides strong candidates to fill those needs. We also utilize internal and external recruiting specialists to help fill our open job positions. To support retention and motivation of our top talent, we provide very competitive compensation, which may include performance incentives.

Workplace Safety.

We place a strong emphasis on the safety of our employees, our customers and the public. Accordingly, we conduct extensive safety training programs that have allowed us to maintain a high safety level at our worksites. All newly hired employees that will be working at project job sites undergo an initial safety orientation, and for certain types of projects or processes we conduct specific hazard training programs. Our project supervisors regularly conduct on-site safety meetings and our safety managers make random site safety inspections and perform daily assessments. In addition, operational employees are required to complete an OSHA 30-hour training program and project-specific courses on various safety topics. Moreover, we promote a culture of safety by encouraging employees to recognize, immediately correct and report all unsafe conditions. To underscore the importance of safety, a portion of annual performance bonus compensation for certain executive management is

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directly linked to the achievement of a key safety metric. Our strong overall safety performance also helps to reduce our insurance-related costs.
Available Information

Our investor website address is http://investors.tutorperini.com. In the “Financial Reports” portion of our investor website, under the subsection “SEC Filings,” you may obtain free electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q,10-Q, current reports on Form 8-K, and any amendments to these reports. These reports, and any amendments to them, are made available on our website as soon as reasonably practicable after we electronically file them with the Securities and Exchange Commission (“SEC”).

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ITEM 1A. RISKRISK FACTORS

We are subject to a number of known and unknown risks and uncertainties that could have a material adverse effect on our operations. Set forth below, and elsewhere in this report, are descriptions of the material risks and uncertainties that could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this report and could have a material adverse effect on our financial condition, results of operations and cash flows.

Risks Related to Our Business and Operations
If we are unable to accurately estimate contract risks, revenue or costs, economic factors such as inflation, the timing of new awards, or the pace of project execution, we may incur a loss or achieve lower than anticipated profit.

Accounting for contract-related revenue and costs requires management to make significant estimates and assumptions that may change significantlysubstantially throughout the project lifecycle, which has previously resulted, and in the future could result, in a material impact to our consolidated financial statements. In addition, cost overruns, including unanticipated cost increases on fixed price contracts (including contracts performed under the design-build project delivery method, in which we assume the risks associated with the design of the project) and guaranteed maximum price contracts, have previously resulted, and in the future may result, in lower profits or losses. Economic factors, including inflation, could also subject us to higher costs, which we may not be able to fully recover in future projects that we are bidding, and may also decrease profit on our existing contracts, in particular with respect to our fixed price, unit price and guaranteed maximum price contracts. Changes in laws, policies or regulations, including tariffs and taxes, have previously impacted, and in the future could impact, the prices for materials or equipment. Further, our results of operations canhave historically fluctuated, and may continue to fluctuate, quarterly and annually depending on when new awards occur and the commencement and progress of work on projects already awarded.

We are involved in a significant number of legal proceedings which, if determined adverselyunfavorable to us, could adversely affect our financial results and/or cash flows, harm our reputation and/or preclude us from bidding on future projects. We also may invest significant working capital on projects while legal proceedings are being settled.

We are involved in various lawsuits, including the legal proceedings described under Note 8 of the Notes to Consolidated Financial Statements. Litigation is inherently uncertain, and it is not possible to accurately predict what the final outcome will be of any legal proceeding. We must make certain assumptions and rely on estimates, which are inherently subject to risks and uncertainties, regarding potential outcomes of legal proceedings in order to determine an appropriate contingent liability and charge to income. Any resultadverse legal proceeding outcome or settlement that is materially different from our expectations and estimates could have a material adverse effect on our financial condition, results of operations and cash flows. This may include requiring us to record an expense or reduce revenue that we previously recorded based on our expectations or estimates, requiring us to pay damages or reducing cash collections that we had expected to receive. For example, on December 13, 2019, we received an adverse jury verdict in the case related to the construction of the Alaskan Way Viaduct Replacement Project (“SR 99”)99 project by a joint venture for which the Company holds a 45% share as a minority partner. As a result of the unexpected adverse jury verdict, we recorded in a pre-tax charge of $166.8 million in 2019. Refer to the Alaskan Way Viaduct Matter in Note 8 of the Notes to Consolidated Financial Statements for further discussion. In addition, any adverse judgments could harm our reputation and preclude us from bidding on future projects.

We may bring claims against project owners for additional cost exceeding the contract price or for amounts not included in the original contract price. When these types of events occur and unresolved claims are pending, we may invest significant working capital in projects to cover cost overruns pending the resolution of the relevant claims. A failure to promptly recover on these types of claims has had and could continue to have a material adverse effect on our liquidity and financial results.results and could result in further legal proceedings.
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Our contracts often require us to perform extra or change order, work beyond the initial project scope, which can result in disputes or claims and adversely affect our working capital, profits and cash flows.

Our contracts generallyoften require us to perform extra or change order, work beyond the initial project scope as directed by the customer even if the customer has not agreed in advance on the scope and/or price of the work to be performed. This process mayhas resulted and in the future could result in disputes or claims over whether the work performed is beyond the scope of work directed by the customer and/or exceeds the price the customer is willing to pay for the work performed. To the extent we do not recover our costs for this work or there are delays in the recovery of these costs, our working capital, profits and cash flows could continue to be adversely impacted.

Our actual results

Competition for new project awards is intense, and our failure to compete effectively could differ from the assumptionsreduce our market share and estimates used to prepareprofits.
New project awards are determined through either a competitive bid basis or on a negotiated basis. Projects may be awarded based solely upon price, but often take into account other factors, such as technical qualifications, proposed project team, schedule and past performance on similar projects. Within our financial statements.

In preparing our financial statements,industry, we compete with many international, regional and local construction firms. If we are required under generally accepted accounting principlesunable to compete successfully in such markets, our relative market share and profits could be reduced.

The coronavirus (“COVID-19”) pandemic has adversely impacted, and could continue to adversely impact, our business, financial condition and results of operations.
The COVID-19 pandemic has created volatility, uncertainty and economic disruption for the Company, our customers, subcontractors and suppliers, and the markets in which we do business. The scope and impact of the COVID-19 pandemic continues to evolve, and new strains of the COVID-19 virus have emerged. As a result of the COVID-19 pandemic, we have experienced delays in certain bidding activities and also in legal proceedings and settlement discussions where we have claims against project owners for additional costs exceeding the contract price or for amounts not included in the United States (“GAAP”)original contract price. Consequently, our ability to make estimatesresolve and assumptions asrecover on these types of claims has been and may continue to be delayed, which may adversely affect our liquidity and financial results.
It remains difficult to assess the datefull impact that the COVID-19 pandemic may have on our business, including the impact of actions that may continue to be taken in response to the financial statements. These estimates and assumptions affect the reported values of assets, liabilities, revenue and expenses,pandemic and the disclosure of contingent assetsimpacts that the pandemic will have on our employees, our operating segments and liabilities. Areas requiring significant estimates bypractices, our management include, but are not limited to:

• recognition of contract revenue, costs, profitscustomers, subcontractors and suppliers, and the regions that we serve, or losses in applying the principles of revenue accounting;

• recognition of revenue related to project incentives or awards we expect to receive;

• recognition of recoveries under contract change orders or claims;

• estimated amounts for expected project losses, warranty costs, contract closeout or other costs;

• collectability of billed and unbilled accounts receivable;

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• asset valuations;

• income tax provisions and related valuation allowances;

• determination of expense and potential liabilities under pension and other post-retirement benefit programs; and

• accruals for other estimated liabilities, including litigation and insurance revenue/reserves.

Our actual business and financial results could differ from our estimates of such results, which could have a material negative impact on our financial condition and reportedresults of operations as a whole. The full impact depends on many factors that remain uncertain and subject to ongoing volatility, or that are not yet identifiable, and in many cases are out of our control. These factors could include, among other things: (1) the duration of the COVID-19 pandemic and the types and magnitude of adverse impacts on the U.S. and global economies; (2) the health and welfare, and general availability, of our employees, and those of our customers, subcontractors and suppliers; (3) evolving business and government actions in response to the pandemic, including, but not limited to, social distancing measures, new or increased COVID-19 testing and/or vaccination requirements, and additional health and safety requirements that we may be required to observe in order to continue working on our projects; (4) the varying impact that the pandemic may have on industries we serve and on government spending for infrastructure projects, including reduced government spending on infrastructure as a result of lower revenues from taxes, tolls and fares; (5) the response of our customers or prospective customers to the pandemic, including potential future delays, stoppages or terminations of existing projects or potential new awards; (6) delays in the settlement of receivables if customers are unable to pay, fail to make timely payments, request financial concessions or if we continue to experience delays in resolving claims and disputes (e.g., further delays in court proceedings or settlement discussions); (7) limitations and higher costs associated with obtaining financing; (8) the impact of higher inflation that has resulted, at least in part, from market and government responses to the COVID-19 pandemic, and how long elevated inflation levels may persist, which may increase the cost of labor and materials; (9) supply chain and related logistical challenges that could further limit the availability or increase the cost of materials; (10) potential interruptions to our information systems and technology or breaches in our data security due to increasing use of remote communications and access; and (11) the extent to which COVID-19 vaccines and vaccine boosters are effective against the various current and future virus strains. Such factors may continue to result in fewer or delayed project bidding opportunities or additional or further delays on existing projects.

Any of these events or impacts we have experienced or identified have caused or contributed to, and could continue to cause or contribute to, the risks and uncertainties facing the Company and our customers and could continue to materially and adversely affect our business or portions thereof, and our financial condition and results of operations.

We require substantial personnel, including construction The COVID-19 pandemic and project managers and specialty subcontractor resources to execute and perform our contracts in backlog. The successful execution of our business strategies is also dependent upon our ability to attract and retain our key officers,the volatile economic conditions stemming from the pandemic, as well as adequately plan for their succession.

Our abilityreactions to executefuture pandemics or resurgences of COVID-19, could also aggravate or heighten the risks posed by other risk factors that we have identified in this Annual Report on Form 10-K, which in turn could materially and perform on our contracts in backlog depends in large part upon our ability to hire and retain highly skilled personnel, including project and construction management and trade labor resources, such as carpenters, masons and other skilled workers. In the event we are unable to attract, hire and retain the requisite personnel and subcontractors necessary to execute and perform our backlog, we may experience delays in completing projects in accordance with project schedules or an increase in expected costs, both of which could have a material adverse effect on our financial results, our reputation and our relationships. In addition, if we lack the personnel and specialty subcontractors necessary to perform on our current contract backlog, we may find it necessary to curtail our pursuit of new projects. A significant, rapid growth in our backlog may lead to situations in which labor resources become constrained.

The execution of our business strategies also substantially depends on our ability to retain several key members of our management. Losing any of these individuals could adversely affect our business. The majoritybusiness, financial condition and results of these key individualsoperations.

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There may be other adverse consequences to our business, financial condition and results of operations from the spread of COVID-19 that are not bound by employment agreements. Volatilitypresently known or lack of positive performance in our stock price may adversely affect our ability to retain key individuals to whomthat have not yet become apparent. As a result, we cannot assure you that if the COVID-19 pandemic continues, it would not have provided share-based compensation. Additionally, because a substantial portion of our key officers' compensation is placed "at risk" and linked to the performance offurther adverse impact on our business, when our operatingfinancial condition and results are negatively impacted, we are at greater risk of employee turnover. If we lose our key officers and do not have qualified successors in place, our operating results would likely be harmed.

The construction services industry is highly schedule driven, and our failure to meet the schedule requirements of our contracts could adversely affect our reputation and/or expose us to financial liability.

Many of our contracts are subject to specific completion schedule requirements. Any failure to meet contractual schedule requirements could subject us to liquidated damages, liability for our customer’s actual cost arising out of our delay and damage to our reputation.

operations.

A significant slowdown or decline in economic conditions could adversely affect our operations.

Any significant decline in economic conditions in any of the markets we serve or uncertainty regarding the economic outlook could result in a decline in demand for infrastructure projects and commercial building developments. In addition, any instability in the financial and credit markets could negatively impact our customers’ ability to pay us on a timely basis, or at all, for work on projects already under construction, could cause our customers to delay or cancel construction projects in our backlog or could create difficulties for customers to obtain adequate financing to fund new construction projects. Such consequences could have an adverse impact on our future operating results. Lastly, we are more susceptible to adverse economic conditions in New York and California, as a significant portion of our operations are concentrated in those states.

We

Our actual results could differ from the assumptions and estimates used to prepare our financial statements.
In preparing our financial statements, we are required under generally accepted accounting principles in the United States (“GAAP”) to make estimates and assumptions as of the date of the financial statements. These estimates and assumptions affect the reported values of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Areas requiring significant estimates by our management include, but are not limited to:
• recognition of contract revenue, costs, profits or losses in applying the principles of revenue accounting;
• recognition of revenue related to project incentives or awards we expect to receive;
• recognition of recoveries under unapproved change orders or claims;
• estimated amounts for expected project losses, warranty costs, contract closeout or other costs;
• collectability of billed and unbilled accounts receivable;
• asset valuations;
• income tax provisions and related valuation allowances;
• determination of expense and potential liabilities under pension and other post-retirement benefit programs; and
• accruals for other estimated liabilities, including litigation and insurance reserves.
Our actual business and financial results could differ from our estimates of such results, which could have a substantial amountmaterial adverse impact on our financial condition and reported results of indebtedness whichoperations.
The construction services industry is highly schedule driven, and our failure to meet the schedule requirements of our contracts could adversely affect our reputation and/or expose us to financial positionliability.
Many of our contracts are subject to specific completion schedule requirements. Failure to meet contractual schedule requirements has subjected us, and preventin the future could subject us, from fulfillingto liquidated damages, liability for our obligations undercustomer’s actual cost arising out of our debt agreements.

delay and damage to our reputation.

We currently have, and expectmay not fully realize the revenue value reported in our backlog due to continue to have, a substantial amount of indebtedness. cancellations or reductions in scope.
As of December 31, 2019,2021, our total debtbacklog of uncompleted construction work was $834.5 million, with $124.1 million classifiedapproximately $8.2 billion. The revenue projected in our backlog may not be fully realized and, in some cases, if realized, may not result in profits or may be less profitable than expected. The cancellation or reduction in scope of significant projects included in our backlog could have a material adverse effect on our financial condition, results of operations and cash flows.
We require substantial personnel, including construction and project managers and specialty subcontractor resources, to execute and perform on our contracts in backlog. The successful execution of our business strategies is also dependent upon our ability to attract and retain our key officers, as current debt. Ifwell as adequately plan for their succession.
Our ability to execute and perform on our contracts in backlog depends in large part upon our ability to hire and retain highly skilled personnel, including project and construction management and trade labor resources, such as carpenters, masons and other skilled workers. In the event we are unable to meetattract, hire and retain the termsrequisite personnel and subcontractors necessary to execute and perform on our contracts in backlog, we may experience delays in completing projects in accordance with project schedules or an increase in expected costs, both of which could have a material adverse effect on our financial results, our reputation and our relationships. In addition, if we lack the personnel and specialty subcontractors necessary to perform on our current contract backlog, we may find it necessary to curtail our pursuit of new projects. A significant, rapid growth in our backlog has led, and could continue to lead, to situations in which labor resources become constrained.
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The execution of our business strategies also substantially depends on our ability to retain several key members of our management. Losing any of these individuals could adversely affect our business. The majority of these key individuals are not bound by employment agreements. Volatility or lack of positive performance in our stock price may adversely affect our ability to retain key individuals to whom we have provided share-based compensation. If we lose any key officer due to voluntary or involuntary termination, including as a result of death or disability, and we do not have qualified successors in place, our operating results could be harmed.
The level of federal, state and local government spending for infrastructure and other public projects could adversely affect the number of projects available to us in the future.
The civil construction and public-works building markets are dependent on the amount of work funded by various government agencies, which depends on many factors, including the condition of the financial covenantsexisting infrastructure and buildings; the need for new or fail to complyexpanded infrastructure and buildings; and federal, state and local government spending levels. As a result, our future operating results could be negatively impacted by any decrease in demand for public projects or decrease or delay in government funding (even with anythe passage of the other restrictions containedIIJA), which could result from a variety of factors, including extended government shutdowns, delays in the agreements governing our indebtedness, an eventsale of default could occur, causingvoter-approved bonds, budget shortfalls, credit rating downgrades or long-term impairment in the debt relatedability of state and local governments to such agreements to become immediately due. If such acceleration occurs, we may not be able to repay such indebtedness as required. Since indebtedness under our credit agreement entered into on April 20, 2017 (the “2017 Credit Facility”) with SunTrust Bank, now known as Truist Bank, as Administrative Agent, Swing Line Lenderraise capital in the municipal bond market.
Systems and L/C Issuerinformation technology interruption and a syndicate of other lenders is secured by substantially all of our assets, acceleration of this debt could resultbreaches in foreclosure of those assets and a negative impact on our operations. In addition, a failure to meet the terms of our 2017 Credit Facility could result in a reduction of future borrowing capacity under the 2017 Credit Facility, causing a loss of liquidity. A loss of liquiditydata security and/or privacy could adversely impact our ability to execute projectsoperate and negatively impact our operating results.
We rely on computer, information and communication technology and other related systems, some of which are hosted by third party providers, for various business processes and activities, including project management, accounting, financial reporting and business development. These systems have been and may, in the future, be subject to interruptions or damage by a variety of factors including, but not limited to, cyber-attacks, natural disasters, power loss, telecommunications failures, acts of war, computer viruses, email phishing, obsolescence and physical damage. Such interruptions can result in a loss of critical data, a delay in operations, damage to our backlog, obtain new projects,reputation or an unintentional disclosure of customer confidential or personally identifiable information, any of which could have a material adverse impact on us and our consolidated financial statements.
Cybersecurity risks include potential attacks on both our information technology infrastructure and those of third parties (both on premises and in the cloud) attempting to gain unauthorized access to our confidential or other proprietary information, classified information, or information relating to our employees, customers and other third parties. We dedicate considerable attention and resources to the safeguarding of our information technology systems. Nevertheless, due to the evolving nature, persistence, sophistication and volume of cyber-attacks, we may not be successful in defending our systems against all such attacks. Consequently, we have engaged, and may again need to engage, subcontractors,significant resources to remediate the impact of, or further mitigate the risk of, such an attack. Any successful cyber-attack can result in the criminal, or otherwise illegitimate use of, confidential data, including our data or third-party data for which we have the responsibility for safekeeping. Additionally, such an attack could have a material adverse impact on our operations, reputation and attractfinancial results.
In addition, various privacy and retain key employees. Lastly, the 2017 Credit Facility includes a spring-forward provision whereby the facility will mature on December 17, 2020 if the 2.875% Convertible Senior Notes due June 15, 2021 (the “Convertible Notes”) remain outstanding at that time. While we do not have call rights that allowsecurity laws and regulations requiring us to unilaterally redeem the Convertible Notes, we intendprotect sensitive and confidential information from disclosure continue to repurchase or exchange the Convertible Notes and/or modify or replace

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the 2017 Credit Facility during 2020. Various alternatives are under considerationevolve and pose increasingly complex compliance challenges. Compliance with evolving data privacy laws and regulations may cause us to determine the financing arrangement that is best suitedincur additional costs, and any violation could result in damage to our needsreputation and/or subject us to fines, payment of damages, lawsuits and provides the most favorable terms. We are currently in discussions with lenders regarding our options. As a result of the aforementioned spring-forward provision in the 2017 Credit Facility, all borrowings under the facility are included in current debtrestrictions on our balance sheet asuse of December 31, 2019. If we are unable to repurchase or exchange the Convertible Notes in 2020 and/or modify or replace the 2017 Credit Facility, all outstanding borrowings underdata, which could have a material adverse impact on our 2017 Credit Facility will mature and become immediately due and payable on December 17, 2020.

Weather can significantly affect our revenue and profitability.

Inclement weather conditions, such as significant storms and unusual temperatures, can impact our ability to perform work. Adverse weather conditions can cause delays and increases in project costs, resulting in variability in our revenue and profitability.

financial results.

Our participation in construction joint ventures exposes us to liability and/or harm to our reputation for failures by our partners.

As part of our business, we enter into joint venture arrangements typically to jointly bid on and execute particular projects, thereby reducing our risk profile while enhancing the execution capabilitycapabilities and financial reward of project teams.increasing surety bonding capacity. Success on these joint projects depends in large part on whether our joint venture partners satisfy their contractual obligations. Generally, we and our joint venture partners are jointly and severally liable for all liabilities and obligations of our joint ventures. If a joint venture partner fails to perform or is financially unable to bear its portion of required capital contributions or other obligations, including liabilities stemming from lawsuits, we could be required to make additional investments, provide additional services or pay more than our proportionate share of a liability to make up for our partner’s shortfall. Further, if we are unable to adequately address our partner’s performance issues, the customer may terminate the project, which could result in legal liability to us, harm our reputation, reduce our profit on a project or, in some cases, result in a loss.

We may not fully realize the revenue value reported in our backlog due to cancellations or reductions in scope.

As of December 31, 2019, our backlog of uncompleted construction work was approximately $11.2 billion. The revenue projected in our backlog may not be fully realized and, in some cases, if realized, may not result in profits or may be less profitable than expected. The cancellation or reduction in scope of significant projects included in our backlog could have a material adverse effect on our financial condition, results of operations and cash flows.

The level of federal, state and local government spending for infrastructure and other public projects could adversely affect the number of projects available to us in the future.

The civil construction and public-works building markets are dependent on the amount of work funded by various government agencies, which depends on many factors, including the condition of the existing infrastructure and buildings; the need for new or expanded infrastructure and buildings; and federal, state and local government spending levels. As a result, our future operating results could be negatively impacted by any decrease in demand for public projects or decrease or delay in government funding, which could result from a variety of factors, including extended government shutdowns, delays in the sale of voter-approved bonds, budget shortfalls, credit rating downgrades or long-term impairment in the ability of state and local governments to raise capital in the municipal bond market.

Competition for new project awards is intense, and our failure to compete effectively could reduce our market share and profits.

New project awards are determined through either a competitive bid basis or on a negotiated basis. Projects may be awarded based solely upon price, but often take into account other factors, such as technical qualifications, proposed project team, schedule and past performance on similar projects. Within our industry, we compete with many international, regional and local construction firms. Some of these competitors have achieved greater market penetration than we have in the markets in which we compete, and some have greater resources than we do. If we are unable to compete successfully in such markets, our relative market share and profits could be reduced.

In connection with mergers and acquisitions, we have recorded goodwill and other intangible assets that could become impaired and adversely affect our operating results. Assessing whether impairment has occurred requires us to make significant judgments and assumptions about the future, which are inherently subject to risks and uncertainties, and if actual events turn out to be materially less favorable than the judgments we make and the assumptions we use, we may be required to record impairment charges in the future.

We had $255.5 million of goodwill and indefinite-lived intangible assets recorded on our Consolidated Balance Sheet as of December 31, 2019. We assess these assets for impairment annually, or more often if required. Our assessments involve a number of estimates

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and assumptions that are inherently subjective, require significant judgment and involve highly uncertain matters that are subject to change. The use of different assumptions or estimates could materially affect the determination as to whether or not an impairment has occurred. In addition, if future events are less favorable than what we assumed or estimated in our impairment analysis, we may be required to record an impairment charge, which could have a material impact on our consolidated financial statements.

Systems and information technology interruption and breaches in data security could adversely impact our ability to operate and negatively impact our operating results.

We rely on computer, information and communication technology and other related systems, some of which are hosted by third party providers, for various business processes and activities, including project management, accounting, financial reporting and business development. These systems may be subject to interruptions or damage by a variety of factors including, but not limited to, cyber-attacks, natural disasters, power loss, telecommunications failures, acts of war, computer viruses, obsolescence and physical damage. Such interruptions could result in a loss of critical data, a delay in operations or an unintentional disclosure of client confidential or personally identifiable information, any of which could have a material impact to us and our consolidated financial statements.

In addition, various privacy and security laws require us to protect sensitive and confidential information from disclosure. We dedicate considerable attention and resources to the safeguarding of our information technology systems. Our systems may, nevertheless, continue to be at risk for cyber-attacks. Consequently, we may need to engage significant resources in the future to remediate the impact of, or further mitigate the risk of, such an attack. Any successful cyber-attack could result in the criminal, or otherwise illegitimate use of, confidential data, including our data or third-party data for which we have the responsibility for safekeeping. Additionally, such an attack could adversely affect our operations, reputation and financial results.

We are subject to risks related to government contracts and related procurement regulations.

Our contracts with U.S. federal, as well as state, local and foreign, government entities are subject to various procurement regulations and other requirements relating to their formation, administration and performance. We are subject to audits and investigations relating to our government contracts, and any violations could result in various civil and criminal penalties and administrative sanctions, including termination of contract, refunding or suspending of payments, forfeiture of profits, payment of fines and suspension or debarment from future government business. In addition, some of these contracts provide for termination by the government at any time, without cause.

We may need to include the potential dilutive impact of our Convertible Notes in our diluted earnings per share calculation.

We currently intend to pay the principal amount of our Convertible Notes in cash; therefore, we have not included the potential dilutive effect of our Convertible Notes in our diluted earnings per share calculations. If, however, there is a change in future circumstances as a result of a decline in our projected cash flow, available cash/liquidity or other reasons, we may conclude at such time that it will be preferable to use shares to satisfy the Convertible Notes. Such a change in our intentions would result in the inclusion of the potential dilutive impact of the Convertible Notes in our diluted earnings per share calculation, which would result in a decrease in our diluted earnings per share.

Our international operations expose us to economic, political, regulatory and other risks, as well as uncertainty related to U.S. Government funding, which could adversely affect our revenue and earnings. In addition, we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.

For the year ended December 31, 2019,2021, we derived $377.1$374.1 million of revenue from our work on projects located outside of the United States. Our international operations expose us to risks inherent in doing business in certain hostile regions outside the United States, including political risks; risks of loss due to acts of war; unstable economic, financial and market conditions; potential incompatibility with foreign subcontractors and vendors; foreign currency controls and fluctuations; trade restrictions; logistical challenges; variations in taxes; and changes in labor conditions, labor strikes and difficulties in staffing and managing international operations. Failure to successfully manage risks associated with our international operations could result in higher operating costs than anticipated or could delay or limit our ability to generate revenue and income from construction operations in key international markets.

The U.S. federal government has approved various spending bills for the construction of defense- and diplomacy-related projects and has allocated significant funds to the defense of U.S. interests around the world from the threat of terrorism. The federal government has also approved funds for development in conjunction with the relocation of military personnel into Guam. However, federal government funding levels for construction projects in the Middle East have decreased significantly over the past several years as the U.S. government has reduced the number of military troops and support personnel in the region. As a result, we have seen a decrease in the number and size of federal government projects available to us in this region. Any decrease in U.S. federal government funding for projects in Guam or in other U.S. Territories or countries in which we are pursuing work may result in project delays or cancellations, which could reduce our revenue and earnings.

Weather can significantly affect our revenue and profitability.
Inclement weather conditions, such as significant storms and unusual temperatures, can impact our ability to perform work. Adverse weather conditions can cause delays and increases in project costs, resulting in variability in our revenue and profitability.
We are subject to risks related to government contracts and related procurement regulations.
Our contracts with U.S. federal, as well as state, local and foreign, government entities are subject to various procurement regulations and other requirements relating to their formation, administration and performance. We are subject to audits and investigations relating to our government contracts, and any violations could result in various civil and criminal penalties and administrative sanctions, including termination of contract, refunding or suspending of payments, forfeiture of profits, payment of fines and suspension or debarment from future government business. In addition, most of these contracts provide for termination or renegotiation by the government at any time, without cause, which could have an adverse effect on our business and operations.
Our business and operations could be negatively affected if we become subject to any securities litigation or shareholder activism, which could cause us to incur significant expense, hinder execution of our business and growth strategy, impact our stock price and adversely affect our reputation.
There have been several instances in the past of shareholder activism targeted at some of our peers, as well as at other companies in the broader engineering and construction industry, with activists often seeking board representation and/or advocating for changes to the target company’s operating structure or business strategy. Additionally, following periods of volatility in the market price of companies’ securities, securities class action litigation has often been brought against such companies.
Shareholder activism, which could take many forms and arise in a variety of situations, has been increasing recently, and new universal proxy rules set to take effect later in 2022 could significantly lower the cost and further increase the ease and likelihood of shareholder activism. Volatility in our stock price or other reasons may in the future cause us to become the target of securities litigation or shareholder activism. Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs, including significant legal fees and other expenses, and divert our management and Board of Directors’ attention and resources from our business. Additionally, securities litigation and shareholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with customers and business partners, adversely affect our reputation, and make it more difficult to attract and retain qualified personnel. Our stock price could also be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and shareholder activism.

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Finally,We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.

The U.S. Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010, and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business. While our policies mandate compliance with these anti-bribery laws, there is no assurance that our policies and procedures will protect us from circumstances or actions that could result in possible criminal penalties or other sanctions, including contract cancellations or debarment and loss of reputation, any of which could have a material adverse impact on our business, financial condition, and results of operations.

Adverse health events, such as an epidemic or a pandemic, could adversely impact our business.

From time to time, various diseases have spread across the globe, such as the recent coronavirus.COVID-19. If a disease spreads sufficiently to cause an epidemic or a pandemic, our business or the businessesbusiness of our suppliers, subcontractors or customers could be adversely impacted.
Physical and regulatory risks related to climate change could have a material adverse impact on our business, financial condition and results of operations.
As a business that builds new infrastructure and improves existing infrastructure for customers around the world, physical risks related to climate change, such as rising sea levels and temperatures, severe storms, and energy and technological disruptions, could cause delays and increases in project costs, resulting in variability in our revenue and profitability, as well as potentially adverse impacts to our operating results and financial condition. In addition, growing public concern about climate change has resulted in the increased focus of local, state, regional, national and international regulatory bodies on greenhouse gas emissions and climate change issues. Legislation to regulate greenhouse gas emissions has periodically been introduced in the U.S. Congress and in the legislatures of various states in which we operate, and there has been a wide-ranging policy debate, both in the United States and internationally, regarding the impact of these gases and possible means for their regulation. Such policy changes, including any enactment of increasingly stringent emissions or other environmental regulations, could increase the costs of projects for us and for our clients and, in some cases, delay or even prevent a project from going forward, thereby potentially reducing demand for our services. Consequently, this could result in a material adverse impact on our business.
In connection with mergers and acquisitions, we have recorded goodwill and other intangible assets that could become impaired and adversely affect our operating results. Assessing whether impairment has occurred requires us to make significant judgments and assumptions about the future, which are inherently subject to risks and uncertainties, and if actual events turn out to be materially less favorable than the judgments we make and the assumptions we use, we may be required to record impairment charges in the future.
We had $255.6 million of goodwill and indefinite-lived intangible assets recorded on our Consolidated Balance Sheet as of December 31, 2021. We assess these assets for impairment annually, or more often if required. Our assessments involve a number of estimates and assumptions that are inherently subjective, require significant judgment and involve highly uncertain matters that are subject to change. The use of different assumptions or estimates could materially affect the determination as to whether or not an impairment has occurred. In addition, if future events are less favorable than what we assumed or estimated in our impairment analysis, we may be required to record an impairment charge, which could have a material adverse impact on our consolidated financial statements.
Risks Related to Our Capital Structure
We have a substantial amount of indebtedness which could adversely affect our financial position and prevent us from fulfilling our obligations under our debt agreements.
We currently have, and expect to continue to have, a substantial amount of indebtedness. As of December 31, 2021, our total debt was $1.0 billion, with $24.4 million classified as current debt. If we are unable to meet the terms of the financial covenants or fail to comply with any of the other restrictions contained in the agreements governing our indebtedness, an event of default could occur, causing the debt related to such agreements to become immediately due. If such acceleration occurs, we may not be able to repay such indebtedness as required. Since indebtedness under our credit agreement entered into on August 18, 2020 (the “2020 Credit Agreement”) with BMO Harris Bank N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and other lenders is secured by substantially all of our assets, acceleration of this debt could result in foreclosure of those assets and a negative impact on our operations. In addition, a failure to meet the terms of our 2020 Credit Agreement could result in a reduction of future borrowing capacity under the 2020 Credit Agreement, causing a loss of liquidity. A loss of liquidity could
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adversely impact our ability to execute projects in our backlog, obtain new projects, engage subcontractors, and attract and retain key employees.
Downgrades in our credit ratings could have a material adverse effect on our business and financial condition.

The Company’s debt rating was downgraded by a major credit rating agency on May 17, 2019.March 23, 2020. The credit ratings assigned to us and our debt are subject to ongoing evaluation by credit rating agencies and could change based upon, among other things, our results of operations and financial condition. Actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade, could have a material adverse effect on our costs and availability of capital, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations. Negative changes in our credit ratings could also result in more stringent covenants and higher interest rates with regard to any new debt.

The phase-out of the London Interbank Offered Rate (“LIBOR”), or the replacement of LIBOR with a different reference rate, may adversely affect interest rates paid on some of our loans and consequently, our earnings and cash flows.

Borrowings under our revolving credit facility and the variable portion of our equipment financing and mortgages use interest rates in relationrefinanced debt.

Risk Related to LIBOR. In 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if LIBOR will cease to exist at that time or if new methods of calculating LIBOR will be established such that it continues to exist after 2021. The expected phase out of LIBOR could cause market volatility or disruption and may adversely affect our access to the capital markets and cost of funding.

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

Based on the terms of the indenture for our Convertible Notes, we may redeem the Convertible Notes in cash, shares of our common stock or a combination thereof. Should we redeem the Convertible Notes for shares of our common stock, the ownership interests of existing stockholders may be diluted and any subsequent sales in the public market of our common stock issued upon such conversion could cause the price of our common stock to decline. In addition, the existence of the Convertible Notes may encourage short selling by market participants because a conversion of the Convertible Notes could depress the price of our common stock.

Our Stock Ownership

Our chairman and chief executive officer could exert influence over the Company due to his position and significant ownership interest.

As of December 31, 2019,2021, our chairman and chief executive officer, Ronald N. Tutor, and three trusts controlled by Mr. Tutor (the “Tutor Group”) owned approximately 16%15% of the outstanding shares of our common stock. Additionally, one of our current directors was appointed by Mr. Tutor pursuant to his right to nominate one member to our Board of Directors, so long as the Tutor Group owns at least 11.25% of the outstanding shares of our common stock. Accordingly, Mr. Tutor could exert influence over the outcome of a range of corporate matters, including the election of directors and the approval or rejection of other extraordinary transactions, such as a takeover attempt or sale of the Company or its assets.

ITEM 1B. UNRESOLVEDUNRESOLVED STAFF COMMENTS

None.

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ITEM 2. PROPERTIES

PROPERTIES

We have office facilities and equipment yards in the following locations, which we believe are suitable and adequate for our current needs:

Offices

Owned or Leased by Tutor Perini

Business Segment(s)

Los Angeles (Sylmar), CA

Owned and Leased

Corporate, Civil & Specialty Contractors

Barrigada, Guam

Owned

Civil

Black River Falls, WI

Owned

Civil

Evansville, IN

Owned

Civil

Fort Lauderdale, FL

Leased

Building & Specialty Contractors

Framingham, MA

Owned

Building

Gulfport, MS

Owned

Building

Henderson, NV

Owned

Building & Specialty Contractors

Houston, TX

Owned

Specialty Contractors

Jessup, MD

Owned

Civil

Lakeview Terrace, CA

Leased

Specialty Contractors

Mount Vernon, NY

Leased

Specialty Contractors

New Rochelle, NY

Owned

Civil

Ozone Park, NY

LeasedOwned

Specialty Contractors

Philadelphia, PA

Leased

Building

San Carlos, CA

Leased

Building

Equipment Yards

Owned or Leased by Tutor Perini

Business Segment(s)

Black River Falls, WI

Owned

Civil

Evansville, IN

Owned

Civil

Fontana, CA

Leased

Civil

Jessup, MDHilbert, WI

Owned

Civil

Lakeview Terrace, CARosemount, MN

LeasedOwned

Specialty ContractorsCivil

Stockton, CA

Owned

Building

Waukesha, WIOwnedCivil

ITEM 3. LEGALLEGAL PROCEEDINGS

Legal Proceedingsproceedings are set forthdiscussed in Note 8 of the Notes to Consolidated Financial Statements and are incorporated herein by reference.

ITEM 4. MINEMINE SAFETY DISCLOSURES

We do not own or operate any mines; however, we may be considered a mine operator under the Federal Mine Safety and Health Act of 1977 because we provide construction services to customers in the mining industry. Accordingly, we provide information regarding mine safety violations and other mining regulation matters in Exhibit 95 to this Form 10-K.

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PARTPART II.

ITEM 5. MARKETMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is traded on the New York Stock Exchange under the symbol “TPC.”

Holders

At February 21, 2020,17, 2022, there were 363340 holders of record of our common stock, including holders of record on behalf of an indeterminate number of beneficial owners.
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Dividends and Issuer Purchases of Equity Securities

We did not repurchase any of our common stock during the fourth quarter of 2019.2021. We have not historically paid dividends on our common stock and have no immediate plans to do so.

Issuance of Unregistered Securities

None.

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None.

Performance Graph

The following graph compares the cumulative five-year total return to shareholders on our common stock relative to the cumulative total returns of the NYSE Composite Index and the Dow Jones U.S. Heavy Construction Index. We selected the Dow Jones U.S. Heavy Construction Index because we believe the index reflects the market conditions within the industry in which we primarily operate. The comparison of total return on investment, defined as the change in year-end stock price plus reinvested dividends, for each of the periods assumes that $100 was invested on December 31, 20142016 in each of our common stock, the NYSE Composite Index and the Dow Jones U.S. Heavy Construction Index, with investment weighted on the basis of market capitalization.

The comparisons in the following graph are based on historical data and are not intended to forecast the possible future performance of our common stock.

Picture 1

COMPARISON OF CUMULATIVE TOTAL RETURN

Tutor Perini Corp NYSE Composite Index Dow Jones U.S. Heavy Construction Index

$225 $220 $175 $150 $125 $100 $75 $50 $25 $0

2012 2013 2014 2015 20

16 2017

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tpc-20211231_g1.jpg

ITEM 6. SELE[RESERVED]CTED FINANCIAL DATA

Selected Consolidated Financial Information

The following tables present selected financial data for the last five years. This selected financial data should be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 15. Exhibits andFinancial Statement Schedules, and the other information included elsewhere inthis Annual Report.

CONSOLIDATED OPERATING RESULTS

Year Ended December 31,

(In thousands, except per common share data)

2019

2018

2017

2016

2015

Revenue:

Civil

$

1,779,352 

$

1,586,093 

$

1,602,175 

$

1,668,963 

$

1,889,907 

Building

1,742,040 

1,861,699 

1,941,325 

2,069,841 

1,802,535 

Specialty Contractors

929,440 

1,006,870 

1,213,708 

1,234,272 

1,228,030 

Total

4,450,832 

4,454,662 

4,757,208 

4,973,076 

4,920,472 

Cost of operations

(4,209,060)

(4,000,209)

(4,302,803)

(4,515,886)

(4,564,219)

Gross profit(a)

241,772 

454,453 

454,405 

457,190 

356,253 

General and administrative expenses(b)

(226,916)

(262,577)

(274,928)

(255,270)

(250,840)

Goodwill impairment(c)

(379,863)

—

—

—

—

Income (loss) from construction operations

(365,007)

191,876 

179,477 

201,920 

105,413 

Other income, net(d)

6,667 

4,256 

43,882 

6,977 

13,569 

Interest expense

(67,494)

(63,519)

(69,384)

(59,782)

(45,143)

Income (loss) before income taxes

(425,834)

132,613 

153,975 

149,115 

73,839 

Income tax benefit (expense)(e)

65,609 

(34,832)

569 

(53,293)

(28,547)

Net income (loss)

(360,225)

97,781 

154,544 

95,822 

45,292 

Less: Net income attributable to noncontrolling interests

27,465 

14,345 

6,162 

—

—

Net income (loss) attributable to Tutor Perini Corporation

$

(387,690)

$

83,436 

$

148,382 

$

95,822 

$

45,292 

Earnings (loss) per common share:(a)(b)(c)(d)(e)

Basic

$

(7.72)

$

1.67 

$

2.99 

$

1.95 

$

0.92 

Diluted

$

(7.72)

$

1.66 

$

2.92 

$

1.92 

$

0.91 

Weighted-average common shares outstanding:

Basic

50,220 

49,952 

49,647 

49,150 

48,981 

Diluted

50,220 

50,301 

50,759 

49,864 

49,666 

_____________________________________________________________________________________________________________

(a)During the year ended December 31, 2019, the Company recorded a charge of $166.8 million in gross profit ($2.38 per diluted share) as a result of the adverse jury verdict in the case related to the construction of SR 99 by a joint venture for which the Company holds a 45% share as a minority partner. Refer to the Alaskan Way Viaduct Matter discussion in Note 8 of the Notes to Consolidated Financial Statements for further discussion of this item.

During the year ended December 31, 2018, the Company recorded a charge of $17.8 million in gross profit ($0.25 per diluted share), which was primarily non-cash, as a result of the unexpected adverse outcome of an arbitration decision related to a subcontract back charge dispute on a Civil segment project in New York that was completed in 2013.

During the year ended December 31, 2015, the Company recorded unfavorable adjustments totaling $45.6 million to gross profit ($0.53 per diluted share) for various Five Star Electric projects in the Specialty Contractors segment. In addition, that same year there was a decrease of $24.3 million in gross profit ($0.28 per diluted share) due to unfavorable adjustments to the estimated cost to complete a Building segment project in New York. The Company’s 2015 results were also impacted by an unfavorable adjustment for an adverse legal decision related to a long-standing litigation matter in the Civil segment, which resulted in a decrease of $23.9 million in gross profit ($0.28 per diluted share). Furthermore, the Company recorded favorable adjustments for a Civil segment runway reconstruction project, which resulted in an increase of $13.7 million in gross profit ($0.16 per diluted share) in 2015.

(b)During the year ended December 31, 2019, the Company recognized a one-time gain of $37.8 million ($0.54 per diluted share) related to the Company’s acquisition of an additional 25% interest in a Civil segment joint venture for which the Company gained a controlling financial interest. The gain resulted from the remeasurement to fair value of the Company’s existing investment in the joint venture. For further discussion on the acquisition and the related remeasurement, see Note 13 of the Notes to Consolidated Financial Statements.

(c)During the year ended December 31, 2019, the Company recorded a non-cash goodwill impairment charge of $379.9 million in income (loss) from construction operations ($6.58 per diluted share) resulting from an interim impairment test the Company

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performed as of June 1, 2019. For further information and breakdown of the goodwill impairment charge by segment, see Note 6 of the Notes to Consolidated Financial Statements.

(d)On June 6, 2017, the Company received $37.0 million ($0.43 per diluted share) in a cash settlement with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), as successor in interest to Banc of America Securities LLC and Bank of America, N.A. (collectively “BofA”). The settlement pertained to litigation, which was filed by the Company in 2011, and related to the purchase by the Company of certain auction-rate securities from BofA. The Company recognized the settlement as a gain during the second quarter of 2017. For additional information, see Note 10 of the Notes to Consolidated Financial Statements.

(e)As mentioned above in footnote (c), the Company recorded a $379.9 million goodwill impairment charge during 2019, of which approximately $209.5 million is not deductible for income tax purposes. The Company recognized a tax benefit totaling $49.4 million ($0.98 per diluted share) as a result of the impairment charge.

In December 2017, the Tax Cuts and Jobs Act of 2017 (“TCJA”) was enacted reducing the U.S. corporate income tax rate from 35% to 21%, effective in 2018. As a result, tax expense in 2019 and 2018 was positively impacted and in 2017 the Company recognized a favorable tax adjustment of $53.3 million ($1.05 per diluted share) primarily due to a one-time revaluation of its deferred tax assets and liabilities in connection with the adoption of the TCJA. For a further discussion of the effect of the TCJA, see Note 5 of the Notes to Consolidated Financial Statements.

As of and For the Year Ended December 31,

(In thousands, except ratios and percentages)

2019

2018

2017

2016

2015

CONSOLIDATED FINANCIAL POSITION

Current assets

$

3,510,986 

$

3,175,643 

$

3,074,392 

$

2,837,756 

$

2,608,939 

Current liabilities

2,109,856 

1,597,966 

1,581,846 

1,518,943 

1,448,819 

Working capital

$

1,401,130 

$

1,577,677 

$

1,492,546 

$

1,318,813 

$

1,160,120 

Current ratio

1.66 

1.99 

1.94 

1.87 

1.80 

Property and equipment, net of accumulated depreciation

$

509,685 

$

490,669 

$

467,499 

$

477,626 

$

523,525 

Total assets

4,485,777 

4,387,752 

4,264,123 

4,038,620 

3,861,300 

Capitalization:

Total debt

834,476 

761,504 

736,276 

759,519 

817,684 

Stockholders’ equity

1,440,142 

1,809,177 

1,713,275 

1,553,023 

1,420,227 

Total capitalization

$

2,274,618 

$

2,570,681 

$

2,449,551 

$

2,312,542 

$

2,237,911 

Total debt as a percentage of total capitalization

37 

%

30 

%

30 

%

33 

%

37 

%

Ratio of debt to equity

0.58 

0.42 

0.43 

0.49 

0.58 

Stockholders' equity per common share

$

28.64 

$

36.16 

$

34.42 

$

31.56 

$

28.94 

OTHER DATA

Backlog at year end

$

11,221,110 

$

9,296,691 

$

7,283,434 

$

6,227,137 

$

7,465,129 

New awards

6,375,262 

6,467,918 

5,813,505 

3,735,084 

4,553,877 

Capital expenditures

84,196 

77,069 

30,280 

15,743 

35,912 

Net cash provided by operating activities

136,530 

21,402 

163,550 

113,336 

14,072 

Net cash used in investing activities

(76,055)

(70,208)

(87,133)

(13,844)

(30,932)

Net cash provided by (used in) financing activities

21,763 

(28,979)

(75,376)

(24,190)

(41,788)

_____________________________________________________________________________________________________________

ITEM 7. MANAGEMENT’SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included in Item 15. Exhibits and Financial Statement Schedules in this Annual Report. This discussion contains forward-looking statements, which involve risks and uncertainties. For cautions about relying on such forward-looking statements, please refer to the section entitled Forward-Looking Statements at the beginning of this Annual Report immediately prior to Item 1. Our actual results
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could differ materially from those anticipated in the forward-looking statements as a result of certain factors, including, but not limited to, those discussed in Item 1A.Risk Factors and elsewhere in this Annual Report.

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Comparison of Fiscal Years 2018 and 2017

2020 to 2019 Results

For a discussion comparing our fiscal 20182020 results to fiscal 2017,our 2019 results, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the fiscal year ended December 31, 2018,2020, as filed with the Securities and Exchange Commission on February 27, 2019.24, 2021.

Executive Overview

Consolidated revenue forOur 2019 was $4.5 billion, which is comparable to revenue in 2018. Revenue in 2019 was favorablyresults of operations were negatively impacted by higher volume on certain Civil segment projects, which was mostly offset by a $123.9 million reduction in revenue associated with the SR 99-related charge discussed in the following paragraph.

For the year ended December 31, 2019, the Company reported a loss from construction operations of $365.0 million compared to income from construction operations of $191.9 million in 2018. The loss was primarily driven by the $379.9 million pre-tax, non-cash goodwill impairment charge recorded in 2019 (see Note 6 of the Notes to Consolidated Financial Statements). Adjusted income from construction operations for 2019, which is a non-GAAP financial measure and excludes the non-cash goodwill impairment charge, was $14.9 million. (For a discussion of non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to the most nearly comparable GAAP financial measures, see the section below titled Non-GAAP Financial Measures.) The decrease in adjusted income from construction operations was primarily due to a $166.8 million pre-tax charge related to the adverse SR 99 jury verdict. The goodwill impairment charge reduced income from construction operations for the Civil, Building and Specialty Contractors segments by $210.2 million, $13.5 million and $156.2 million, respectively, for the year ended December 31, 2019. The SR 99-related99-related charge principally impactedreduced revenue and income from construction operations in the Civil segment. For additional information on the goodwill impairment charge, refer to the Second Quarter of 2019 Goodwill Impairment discussion in Note 6 of the Notes to Consolidated Financial Statements. For additional information on the SR 99-related charge, refer to the Alaskan Way Viaduct Matter discussion in Note 8 of the Notes to Consolidated Financial Statements.

Executive Overview
COVID-19 Update
Since its onset in early 2020, the COVID-19 pandemic has caused occasional temporary shortages in available manpower, reductions in field labor productivity, other inefficiencies, delays to project schedules and deferrals 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 hindered the Company’s ability to resolve unapproved work, resulting in the need for the Company to temporarily fund certain project costs that would normally be more promptly negotiated, billed to and collected from customers, which has largely contributed to an increase in costs and estimated earnings in excess of billings (“CIE”). These delays in resolving and recovering on such claims adversely affected our liquidity and financial results in 2021. However, we anticipate a significant improvement in the pace and magnitude of dispute resolutions and corresponding cash recoveries in 2022, assuming there is no worsening of the pandemic.
Throughout 2020 and much of 2021, the pandemic also adversely affected the volume and timing of our new awards, which has negatively impacted our backlog and operating results, and the negative impact on operating results in 2022 is expected to continue due to previously limited bidding and proposal opportunities. In addition, many of our state and local government customers’ revenue sources have been negatively impacted by the pandemic due to curtailed ridership on mass-transit systems (buses, subways, trains, etc.), travel on commercial airlines, and driving by the general public, which resulted in reduced fare and toll collections, lower fuel tax receipts and reduced airport and other facility usage fees. The significant revenue reductions experienced by some of our customers have adversely impacted their ability to pay the Company timely for amounts due. The revenue reductions have also led to, and could continue to result in, customers delaying bid solicitations and contract awards for some of their planned infrastructure projects. 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 our 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 2021 was $4.6 billion compared to $5.3 billion for 2020. The decrease was primarily due to reduced project execution activities in the Building segment, as various projects have completed or are nearing completion, while newer projects that have been recently awarded are yet to contribute meaningfully to revenue. Revenue for both 2020 and 2021 was negatively impacted by the COVID-19 pandemic, which resulted in delays in new awards. The pandemic also caused delays in the execution of certain projects, which negatively impacted revenue for both years.
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Income from construction operations for 2021 was $226.8 million compared to $262.3 million for 2020. The decrease was primarily due to the revenue decline discussed above, as well as various unfavorable impacts due to changes in estimates totaling $63.1 million on a transportation project in the Northeast that affected all three segments and a separate $16.2 million impact due to a change in estimate on a Specialty Contractors segment mass-transit project. These changes in estimates reflected the temporary negative impact to earnings from growth in unapproved change orders, which resulted in a reduction in the projects’ percentage of completion (and, correspondingly, a reduction in the percentage of estimated profit recognized for the year ended December 31, 2021 for these projects), and, to a lesser degree, project charges. The temporary reduction to earnings is expected to reverse itself as the projects progress toward completion and the negotiation and settlement of the unapproved change orders could result in additional profit for the incremental work. The decrease was partially offset by favorable impacts due to changes in estimates totaling $45.3 million on certain Civil segment mass-transit projects and a $20.1 million favorable adjustment related to a legal judgment on a completed project in the Specialty Contractors segment. Further details are provided below in the Results of Segment Operations section.
The effective income tax rate for 2021 was 16.0% compared to 12.6% for 2020. The lower effective tax rate for 2019 was 15.4% comparedin 2020 primarily reflects one-time tax benefits related to 26.3% for 2018. During 2019, the Company recognized an income tax benefit of $65.6 million as a resultprovisions of the pre-tax loss primarily related to the goodwill impairmentCoronavirus Aid, Relief, and SR 99 charges mentioned above. The goodwill impairment charge was not fully deductibleEconomic Security Act (the “CARES Act”). See Corporate, Tax and Other Matters below for income taxes, which significantly reduced the tax benefit and effective tax rate for the year. For a further discussion of the effect ofchanges in the goodwill impairment charge, see Note 5 of the Notes to Consolidated Financial Statements.effective tax rate.

Diluted lossearnings per share for 20192021 was $7.72$1.79 compared to diluted earnings per share of $1.66$2.12 for 2018.2020. The substantially reduced earningsdecrease in 2019 were primarily attributable2021 was principally due to the above-mentioned goodwill impairment ($6.58 per diluted share) and SR 99-related ($2.38 per diluted share) charges.

factors discussed above that drove the decrease in income from construction operations, as well as the higher effective tax rate in 2021 compared to 2020.

Consolidated new awards in 20192021 were $6.4$4.5 billion compared to $6.5$2.4 billion in 2018.2020. The Civilincrease in new awards in 2021 was primarily due to the impacts of the COVID-19 pandemic in 2020, which delayed certain customers from moving forward with planned project bid solicitations and contract awards until 2021 and beyond, due to budgetary impacts, funding uncertainties and customer staffing challenges. The Building and Civil segments were the predominantprimary contributors ofto the new award activity in 2021. Significant new awards during 2019included the Cedars-Sinai Marina del Rey Hospital in California (contract value was not publicly announced); the $471 million LAX Airport Metro Connector project; $434 million for various Civil segment projects in the Midwest; more than $385 million of additional funding for certain mass-transit projects in California; the $269 million Yountville Veterans Home in California; the $220 million I-70 Missouri River Bridge project; the $162 million Tinian International Airport aircraft parking apron and 2018.

taxiway project in the Northern Mariana Islands; the $152 million Santa Rosa Courthouse project in California; and a $122 million military range project and a $98 million military housing project, both in Guam.

Consolidated backlog as of December 31, 20192021 was $11.2$8.2 billion, essentially level compared to $9.3$8.3 billion as of December 31, 2018. The Company experienced backlog growth2020. Backlog for both 2020 and 2021 was negatively impacted by the COVID-19 pandemic due to reduced bidding and proposal activity. In addition, the Company’s lack of 21%success in 2019, driven by variousits pursuit of certain large awardsprospective Civil segment projects in the Civil and Building segments.second half of 2021 also negatively impacted backlog. As of December 31, 2019,2021, the mix of backlog by segment was 54%55% for Civil, 25%28% for Building and 21%17% for Specialty Contractors.

Contractors, compared to 57% for Civil, 20% for Building and 23% for Specialty Contractors at the end of 2020. Importantly, Building segment backlog, which carries a substantially lower margin, increased $607 million year-over-year, whereas backlog for the higher-margin Civil and Specialty Contractors segments declined $230 million and $487 million, respectively, year-over-year.

Most projects in the Civil segment’s backlog typically convert to revenue over a period of three to five years and in the Building and Specialty Contractors segments over a period of one to three years. We estimate that approximately $5$4 billion, or 44%46%, of our backlog as of December 31, 20192021 will be recognized as revenue in 2020.2022. As a result of the changes in the backlog mix and the rate of conversion from backlog to revenue discussed above, we anticipate that in 2022 the Building segment will contribute proportionately higher revenue at a lower operating margin relative to contributions from the Civil and Specialty Contractors segments.
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The following table presents the changes in backlog in 2019:

2021:
(in millions)Backlog at December 31, 2020
New Awards
in 2021(a)
Revenue
Recognized
in 2021
Backlog at December 31, 2021(b)
Civil$4,783.6 $1,865.7 $(2,095.8)$4,553.5 
Building1,702.3 2,034.7 (1,428.1)2,308.9 
Specialty Contractors1,859.8 631.3 (1,117.9)1,373.2 
Total$8,345.7 $4,531.7 $(4,641.8)$8,235.6 

Backlog at

Revenue

Backlog at

December 31,

New Awards

Recognized

December 31,

(in millions)

2018

in 2019 (a)

in 2019

2019(b)

Civil

$

5,141.9

$

2,674.7

$

(1,779.4)

$

6,037.2

Building

2,333.1

2,199.2

(1,742.0)

2,790.3

Specialty Contractors

1,821.7

1,501.3

(929.4)

2,393.6

Total

$

9,296.7

$

6,375.2

$

(4,450.8)

$

11,221.1

_____________________________________________________________________________________________________________

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

(b)Backlog may differ from the transaction prices allocated to the remaining performance obligations as disclosed in Note 3 of the Notes to 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).

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The outlook for the Company’s growth over the next several years remains favorable, particularly inbut the Civilimpact of the COVID-19 pandemic could continue to adversely affect performance and Specialty Contractors segments, althoughoperations, and the paceamount and timing of new work awarded. In addition, the Company’s growth could continue to be impacted by future project delays or the timing of project commencements, ramp-up activities and completions. We anticipate that we will continue to win our share of significant new awards resulting from long-term capital spending plans by state, local and federal customers, as well as bipartisan support for infrastructure investments and limited competition for some of the largest project opportunities.

In recentelections over the past several years, voters in numerous states approved dozens of long-term transportation funding measures totaling approximately $200 billion in long-term funding. The largest of these werewas in Los Angeles County, where Measure M, a half-cent sales tax increase, was approved and is expected to generate $120 billion of funding over 40 years, and in Seattle, Washington, where Sound Transit 3 was passed and is expected to generate $54 billion of funding over 25 years. Recently, there has been renewed interest at the federal government level in passing budgetary measures that would provide significant long-term funding for infrastructure investments. In addition, several large, long-duration civil infrastructure programs withCalifornia's Senate Bill 1, which we are already involved are progressing, such as the Purple Line Extension projectswas signed into law in Los Angeles. Finally, interest2017, is providing an average of $5.4 billion annually through 2027 for various transportation, mass-transit and bridge projects. Interest rates remain relativelyhave remained near historically low andlevels, which may be conducive to continued, customer spending.

and potentially increased, spending on infrastructure projects if borrowing rates remain at relatively low levels following anticipated interest rate increases by the Federal Reserve in 2022.

As discussed above, the IIJA 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 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 much of it will be invested 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.
The Company has certain large Civil segment projects in the Northeast that completed or were nearing completion in 2021. The Company is pursuing several large prospective projects on the West Coast, in the Northeast and in Guam that are expected to be bid and/or awarded in 2022 and 2023. However, the timing and magnitude of revenue contributions from these prospective projects may not fully offset revenue reductions associated with the projects that have completed or are progressing toward completion in 2021. 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 the Company is pursuing, which may further delay large, new revenue streams.
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.

Non-GAAP Financial Measures

To supplement our consolidated financial statements presented under generally accepted accounting principles in the United States (“GAAP”), we are presenting certain non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations, and they are among the indicators management uses as a basis for evaluating the Company’s financial performance as well as for forecasting future periods. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our business operating results, including underlying trends.

These non-GAAP financial measures, which exclude the non-cash goodwill impairment charge (as well as the tax benefit associated with this charge), include adjusted income (loss) from construction operations, adjusted net income (loss) attributable to Tutor Perini Corporation, adjusted diluted earnings (loss) per common share and adjusted effective income tax rate. We also reference adjusted operating margin for each segment, which is a non-GAAP financial measure that we define as adjusted income (loss) from construction operations as a percentage of revenue. These non-GAAP financial measures are not intended to replace the presentation of our financial results in accordance with GAAP, and they may not be comparable to other similarly titled non-GAAP financial measures presented by other companies. Reconciliations of these non-GAAP financial measures to the most nearly comparable GAAP financial measures are presented below. For the year ended December 31, 2018, there are no non-GAAP financial measures presented or included in the reconciliation tables below because the non-GAAP financial measures, as defined by the Company, do not differ from GAAP results in those periods, as the only adjustment occurred in 2019.

Reconciliation of Non-GAAP Financial Measures

Specialty

Consolidated

(in millions)

Civil

Building

Contractors

Corporate

Total

Year Ended December 31, 2019

Income (loss) from construction operations, as reported

$

(150.9)

$

23.7

$

(172.6)

$

(65.2)

$

(365.0)

Plus: Goodwill impairment charge

210.2

13.5

156.2

—

379.9

Adjusted income (loss) from construction operations

$

59.3

$

37.2

$

(16.4)

$

(65.2)

$

14.9

Year Ended December 31,

(in millions, except per common share amounts and percentages)

2019

2018

Net income (loss) attributable to Tutor Perini Corporation, as reported

$

(387.7)

$

83.4

Plus: Goodwill impairment charge

379.9

—

Less: Tax benefit provided on goodwill impairment charge

(49.4)

—

Adjusted net income (loss) attributable to Tutor Perini Corporation

$

(57.2)

$

83.4

Diluted earnings (loss) per common share, as reported

$

(7.72)

$

1.66

Plus: Goodwill impairment charge

7.56

—

Less: Tax benefit provided on goodwill impairment charge

(0.98)

—

Adjusted diluted earnings (loss) per common share

$

(1.14)

$

1.66

Effective income tax rate, as reported

15.4

%

26.3

%

Tax effect of goodwill impairment charge

19.9

%

—

%

Adjusted effective income tax rate

35.3

%

26.3

%

20

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Results of Segment Operations

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

Civil Segment

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

Year Ended December 31,

(in millions)

2019

2018

Revenue

$

1,779.4

$

1,586.1

Income (loss) from construction operations, as reported

(150.9)

168.3

Plus: Goodwill impairment charge

210.2

—

Adjusted income from construction operations

59.3

168.3

Year Ended December 31,
(in millions)20212020
Revenue$2,095.8 $2,199.9 
Income from construction operations266.2 245.8 

Revenue for 2019 increased 12%2021 decreased 5% compared to 2018.2020. The growthdecrease was principally driven by increasedprimarily due to reduced project execution activities on certain mass-transitvarious completed or nearly completed projects in the Northeast, partially offset by increased activities on various projects in California and Minnesota that are earlyGuam. Revenue for both 2020 and 2021 was reduced by the aforementioned COVID-19 impacts.
Income from construction operations for 2021 increased 8% compared to 2020. Despite the modest revenue decline, income from construction operations increased primarily due to $29.0 million of favorable adjustments on a mass‐transit project and $16.3 million of favorable adjustments on another mass-transit project, both reflecting improved profitability as a result of the negotiation and settlement of certain change orders in their project life cycles, as well as increased activities on the Newark Airport Terminal One project.2021. The growthincrease was partially offset by the revenue reduction associated with the adverse SR 99 jury verdict discusseda $13.3 million negative impact due to changes in estimates on a transportation project in the section entitled Executive Overview.

Income (loss)Northeast that included a charge and the temporary negative impact to earnings from construction operations decreased significantlygrowth in 2019unapproved change orders.

Operating margin was 12.7% for 2021 compared to 2018, mainly due to the goodwill impairment charge. Despite the strong revenue growth, adjusted income from construction operations11.2% in 2020. The increase in operating margin for 2019 decreased 65% compared to 2018,2021 was primarily due to the impact of the SR 99-related charge ($155.8 million of the $166.8 million impacted the Civil segment), partially offset by the $37.8 million reduction in general and administrative expenses associated with the remeasurement gain that resulted from the Company increasing its ownership interest in a joint venture (see Note 13 of the Notes to Consolidated Financial Statements) and income contributions related to the volume increase mentioned above.

Operating margin was (8.5)% and adjusted operating margin was 3.3% for 2019 compared to 10.6% in 2018. The reduction in operating margin for 2019 was driven by the goodwill impairment and SR 99 charges mentioned above. The decrease in adjusted operating margin for 2019 was principally due to the factors mentioneddiscussed above that drove the changes to revenue and adjustedincrease in income from construction operations.

New awards in the Civil segment totaled $2.7$1.9 billion in 20192021 compared to $2.6 billion$946 million in 2018.2020. As discussed earlier, the larger volume of new awards in 2021 was primarily due to the impacts of the COVID-19 pandemic, which delayed the bidding and awards for various projects until 2021 and beyond. In spite of the improvement in new award activity in 2021, the level of new awards was negatively impacted by the Company’s lack of success in its pursuit of certain large Civil segment projects in the second half of 2021. New awards in 20192021 included $434 million for various Civil segment projects in the $1.4 billion Purple Line Section 3 Stations project and the $432Midwest; more than $385 million Division 20 Portal Widening and Turnback Facility project, bothof additional funding for certain mass-transit projects in California; the $253$220 million Culver Line Communications-Based Train ControlI-70 Missouri River Bridge project; the $162 million Tinian International Airport aircraft parking apron and taxiway project in New York; and a $178 million military facilities projectthe Northern Mariana Islands; and a $122 million wastewater treatmentmilitary range project and a $98 million military housing project, both in Guam.

Guam. The COVID-19 pandemic has resulted in significant revenue shortfalls for many state and local government agencies since 2020, and could continue to cause deferrals or cancellations of certain new projects, depending on the allocation and prioritization of state and local funding, as well as the availability, timing and magnitude of anticipated funding from the federal government, including funding from the recently enacted IIJA.

New awards in 20182020 included more than $732 million of additional funding for various mass-transit projects, the $800Company’s $121 million Minneapolis Southwest Light Rail Transit project in Minnesota; the Civil segment’s 50% share of the $1.4 billion Newark Airport Terminal One project, net of subcontracts awarded to Five Star Electric and WDF in the Specialty Contractors segment (with the remaining 50% share of the project booked in the Building segment’s backlog); a $410 millionjoint-venture mass-transit project in California;Massachusetts, and a $121$64 million water tunnelmining project in California; a $93 million bridge project in New York; and an $82 million aircraft maintenance facility and hangar project in Guam.

Alabama.

Backlog for the Civil segment was $6.0$4.6 billion as of December 31, 2019, an increase2021, a modest decrease of 17%5% compared to $5.1$4.8 billion as of December 31, 2018. The strong backlog growth was driven by the significant new award activity discussed above.2020. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, that are supported by substantial anticipated funding from various voter-approved transportation measures and the IIJA, and by public agencies’ long-term spending plans. The Civil segment is well-positioned to continue capturingcapture its share of these prospective projects.

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Building Segment

Revenue income from construction operations and adjusted income from construction operations for the Building segment are summarized as follows:
Year Ended December 31,
(in millions)20212020
Revenue$1,428.1 $1,984.6 
Income from construction operations28.7 53.2 
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Year Ended December 31,

(in millions)

2019

2018

Revenue

$

1,742.0

$

1,861.7

Income from construction operations, as reported

23.7

43.9

Plus: Goodwill impairment charge

13.5

—

Adjusted income from construction operations

37.2

43.9

Revenue for 20192021 decreased 6%28% compared to 20182020, primarily due to a reduction inreduced project execution activities on health carecertain projects in California and hospitalityOklahoma that are completed or nearing completion. Revenue for both 2020 and gaming projects in various states. The decrease2021 was partially offsetreduced by increased activities on the Newark Airport Terminal One project and an industrial revitalization project in Mississippi.

aforementioned COVID-19 impacts.

Income from construction operations for 2021 decreased 46% in 2019 compared to 2018, 2020, primarily due to the goodwill impairment charge recorded in 2019. Adjusted income from construction operations for 2019 decreased 15% compared to 2018 mainlyvolume reductions mentioned above, as well as a $13.3 million negative impact due to the absence of prior-yearchanges in estimates on a transportation project closeout adjustments, none of which were individually material, partially offset by increased project contributions from other projects, including Newark Airport Terminal One, in the current year.

Northeast that included a charge and the temporary negative impact to earnings from growth in unapproved change orders.

Operating margin was 1.4% and adjusted2.0% in 2021 compared to 2.7% in 2020. The decrease in operating margin was 2.1% in 2019 compared to 2.4% in 2018. The reduction in operating margin for 2019 was driven by the aforementioned goodwill impairment charge recorded. The slight reduction in adjusted operating margin for 2019 was primarily driven by the factors mentioned above that drove the changes inlower revenue and adjusted income from construction operations.

New awards in the Building segment totaled $2.2$2.0 billion in 20192021 compared to $2.5 billion$897 million in 2018.2020. The substantially increased level of new awards in 2021 was due to delays of certain new awards in 2020 that resulted from impacts of the COVID-19 pandemic. New awards in 20192021 included the Choctaw CasinoCedars-Sinai Marina del Rey Hospital in California (contract value was not publicly announced); the $471 million LAX Airport Metro Connector project; the $269 million Yountville Veterans Home in California; and Resortthe $152 million Santa Rosa Courthouse project in Oklahoma; a large hospitality and gamingCalifornia. The COVID-19 pandemic could continue to result in certain delayed project in California; a $263 million courthouse project in Florida; a technology campus tenant improvement project in California valued at more than $200 million; and the $200 million Southland Gaming Casino and Hotel project in Arkansas.

opportunities.

New awards in 20182020 included the Building segment’s 50% share of the $1.4 billion Newark Airport Terminal One project, net of subcontracts awarded to Five Star Electric and WDF in the Specialty Contractors segment; $311approximately $615 million of additional funding for a technology project in California; a government officevarious building projectprojects in California valued at $215 million; a $100and $271 million military facility project in Saudi Arabia; an $88 million airport parking garage project in South Carolina; and incremental funding of $90 million and $82 million, respectively, for another technology office project and a health care project, both in California.

several government facilities projects nationwide.

Backlog for the Building segment was $2.8 billion as of December 31, 2019, an increase of 20% compared to $2.3 billion as of December 31, 2018.2021, an increase of 36% compared to $1.7 billion as of December 31, 2020. The strong backlog growthincrease was driven by the heightened new award activity discussedmentioned above. The Building segment continues to have a large volume of prospective projects across various end markets and geographic locations. StrongWe expect demand to grow as economic conditions remain conducive to increased customer spending on new building facilities and renovations to existing buildings, supported by what has been and is expected to continue due to ongoing customer spending supported byremain a favorable, economic environment andrelatively low interest rate environment despite the prospect of higher interest rates that have persisted.

in 2022. However, the COVID-19 pandemic has resulted in, and could continue to result in, reduced demand for our building construction services.

Specialty Contractors Segment

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

Year Ended December 31,

(in millions)

2019

2018

Revenue

$

929.4

$

1,006.9

Income (loss) from construction operations, as reported

(172.6)

43.4

Plus: Goodwill impairment charge

156.2

—

Adjusted income (loss) from construction operations

(16.4)

43.4

Year Ended December 31,
(in millions)20212020
Revenue$1,118.0 $1,134.2 
Income (loss) from construction operations(10.0)17.2 

Revenue for 2019 decreased 8%2021 declined slightly compared to 20182020. Revenue for 2020 and 2021 was reduced by the aforementioned COVID-19 impacts.
Loss from construction operations for 2021 was $10.0 million compared to income from construction operations of $17.2 million for 2020. The change was due to reducednegative impacts of $19.0 million and $17.6 million on the mechanical and electrical components, respectively, of a transportation project execution activitiesin the Northeast and $16.2 million on certain completedan electrical and mechanical projectsmass-transit project also in California, Washington and New York.the Northeast, all of which were due to changes in estimates that included charges and/or the temporary negative impact to earnings from growth in unapproved change orders. The decrease was partially offset by increased activitya $20.1 million favorable adjustment related to a legal judgment on a completed electrical project in New York, as well as the absence of the following largely offsetting items that had a net negative impact on the Company’s results in 2020: a $25.7 million prior-year gain as a result of a favorable arbitration decision and subsequent settlement of the related employment dispute, a $15.2 million prior-year unfavorable legal ruling pertaining to a mechanical project in New YorkCalifornia and a $13.2 million prior-year impact from an adverse arbitration ruling related to another electrical project in California.

Income (loss) from construction operations decreased substantially in 2019 compared to 2018, mainly due to the goodwill impairment charge mentioned above. Adjusted income (loss) from construction operations for 2019 also decreased substantially due primarily to

New York.

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net unfavorable adjustments totaling $41.5 million on certain electrical and mechanical projects in New York, none of which were individually material. The Specialty Contractors segment was also impacted by $11.0 million of the $166.8 million SR 99 charge in 2019.

Operating margin was (18.6)(0.9)% and adjustedin 2021 compared to 1.5% in 2020. The decrease in operating margin was (1.8)% in 2019 comparedmainly attributable to 4.3% in 2018. The reduction in operating margin for 2019 was driven by the aforementioned goodwill impairment charge. The reduction in adjusted operating margin for 2019 was primarily driven by the factors mentioned above that drove the changes in revenue and adjustedlower income (loss) from construction operations.

New awards in the Specialty Contractors segment totaled $1.5 billion$631 million in 20192021 compared to $1.4 billion$600 million in 2018.2020. New awards in 2019 included, among others, 2021 were mostly comprised of $370 million for various electrical and mechanical subcontracts valued at $216projects in the Northeast, and $260 million for the Purple Line Section 3 Stations projectvarious electrical and an electrical subcontract valued at $140 million for the Division 20 Portal Widening and Turnback Facility project, both in California; and three mechanical projects collectively valued at $192 millionin Florida, Texas and an electrical subcontract valued at $140 million for a mass-transit project, allCalifornia. The COVID-19 pandemic has resulted in, New York.and could continue to result in, reduced demand from certain commercial and government customers that have been experiencing funding constraints.
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New awards in 20182020 included $364$286 million offor various electrical projects in Texas, California and mechanical subcontracts for the Newark Airport Terminal One project; $294Florida, and $158 million for various electrical projects in New York; $248 million for various electrical projects in the southern United States and California; and $243 million for two large mechanical projects in New York.

Backlog for the Specialty Contractors segment was $2.4$1.4 billion as of December 31, 2019, an increase2021, a decrease of 31%26% compared to $1.8$1.9 billion as of December 31, 2018.2020. The robustdecrease corresponds with the reduction in Civil segment backlog, growth was driven by strongas certain large Civil segment projects that were not awarded to the Company would have included substantial amounts of subcontract work for the Specialty Contractors segment. The decrease is also due to lower demand from certain customers, particularly in New York, that have experienced adverse budgetary impacts as evidenced by publica result of the COVID-19 pandemic and private customer spending on numerous civil and building projects.that have consequently delayed and/or reduced certain spending. The Specialty Contractors segment continues to be increasingly focused on servicing the Company’s growing backlog of large Civil and Building segment projects, but it also remains well-positioned to capture its share of new projects for external customers, leveraging the size and scale of our business units that operate in New York, Texas, Florida and California and the strong reputation held by these business units for high-quality work on large, complex projects.

Corporate, Tax and Other Matters

Corporate General and Administrative Expenses

Corporate general and administrative expenses were $65.5$58.0 million in 20192021 compared to $63.8$53.9 million in 2018.

2020. The increase in corporate general and administrative expenses in 2021 was predominantly due to higher travel-related expenses compared to 2020, when the COVID-19 pandemic caused significant travel reductions.

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

Expense

Year Ended December 31,

Year Ended December 31,

(in millions)

2019

2018

(in millions)20212020

Other income, net

$

6.7

$

4.3

Other income (expense)Other income (expense)$2.0 $(11.9)

Interest expense

(67.5)

(63.5)

Interest expense(69.0)(76.2)

Income tax benefit (expense)

65.6

(34.8)

Income tax expenseIncome tax expense(25.6)(21.9)

Other

Net other income net, increased $2.4for 2021 was $2.0 million in 2019 compared to 2018,net other expense of $11.9 million for 2020. The improvement in 2021 was primarily due to a net gain on the saleabsence of property and equipmentcharges incurred in 2019.

2020 related to the unfavorable resolutions of certain disputes pertaining to past business acquisitions, which were not material.

Interest expense increased $4.0decreased $7.2 million in 20192021 compared to 2018, principally2020. The decrease in 2021 was primarily due to the absence of extinguishment costs recognized in 2020 related to debt refinancing.
The effective income tax rate was 16.0% for 2021 compared to 12.6% for 2020. The 2021 effective income tax rate reflects an $8.2 million benefit related to a higher average balance on our linefederal claim of right tax credit,.

which resulted in a tax rate adjustment associated with an adverse 2019 jury verdict that rendered certain income recognized in 2016 to be uncollectible.

The effective income tax rate for 2020 primarily reflected the favorable tax rate differential realized on the 2019 was 15.4% comparednet operating loss (“NOL”) carryback. Under the CARES Act, enacted on March 27, 2020, the NOL generated in 2019 may be carried back up to 26.3% for 2018. During 2019,five years, whereas under previous rules NOLs were only allowed to be carried forward. This allowed the Company recognized a taxto realize the benefit of $65.6 million onthe tax rate differential by carrying back the NOL to tax years when the federal statutory tax rate was 35% rather than the current rate of 21%. For a loss beforefurther discussion of income taxes, of $425.8 million. As a resultrefer to Note 5 of the $379.9 million goodwill impairment charge discussed above, the Company recognized a tax benefit totaling $49.4 million. Approximately $209.5 million of the charge is not deductible for income tax purposes, which significantly reduced the tax benefit andNotes to Consolidated Financial Statements.
The effective income tax raterates for the year. The adjusted effective2021 and 2020 were unfavorably impacted by state income tax rate for 2019, which excludes the tax benefit from the goodwill impairment chargetaxes and which is a non-GAAP financial measure, was 35.3%. The adjusted effective income tax rate for 2019 was higher than the U.S. federal statutory rate primarily due tofavorably impacted by earnings attributable to noncontrolling interests, for which income taxes are not the responsibility of the Company, which increased the effective rate due to the pre-tax loss for the period, U.S. federal research and development tax credits, and state income taxes, partially offset by foreign tax impacts. The 2018 effective tax rate was higher than the U.S. federal rate primarily due to state income taxes.

Company.

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 $350$175 million, 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, 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 $236$148 million and available

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cash balances as of December 31, 2019,2021, will be sufficient to fund any working capital needs and debt maturities for the next 12 months.months and beyond, provided that we are not adversely impacted by unanticipated future events, including further impacts related to the COVID-19 pandemic as discussed above in COVID-19 Update. Liquidity has been, and could continue to be, adversely impacted by our inability to collect cash due to the follow-on impacts of

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COVID-19, which have constrained certain customers’ funding sources and delayed their ability to make payments on approved contract work. As discussed above in COVID-19 Update, the section entitled Debt below,COVID-19 pandemic has delayed court and arbitration schedules and also hindered the Company’s ability to resolve unapproved work, which has largely contributed to an increase in CIE. We believe that the follow-on impacts of COVID-19 could be alleviated with the anticipated funding from the IIJA, as discussed above, and the relief of customers’ revenue and funding constraints as travel and commuting continue to resume, providing higher fare, toll and fuel tax revenue. Furthermore, the bottleneck of accumulated court and arbitration proceedings that grew during 2020 and 2021 due to the pandemic has recently begun to alleviate, although the timing of resolution and collection of amounts due to the Company intendsrelated to modify or replacesuch matters remains uncertain. We anticipate substantially improved operating cash generation in 2022 compared to 2021, as a result of projected cash collections, both from project execution activities and the 2017 Credit Facility and/or repurchase or exchange the Convertible Notes in 2020.resolution of various outstanding claims and change orders.

Cash and Working Capital

Cash and cash equivalents were $193.7$202.2 million as of December 31, 20192021 compared to $116.1$374.3 million as of December 31, 2018.2020. Cash immediately available for general corporate purposes was $43.8$60.2 million and $51.7$210.8 million as of December 31, 20192021 and 2018,2020, respectively, with the remainder being amounts held by our consolidated joint ventures and also our proportionate share of cash held by our unconsolidated joint ventures. Cash held by our joint ventures was available only for joint venture-related uses, including distributions to joint venture partners. In addition, our restricted cash and restricted investments held primarily to secure insurance-related contingent obligations, totaled $79.4$93.6 million as of December 31, 20192021 compared to $61.9$156.5 million as of December 31, 2018.

2020. Restricted cash and restricted investments are primarily held to secure insurance-related contingent obligations. Restricted cash as of December 31, 2020 also included $69.9 million of cash held to repay the outstanding principal balance of the Convertible Notes, which were repaid at maturity on June 15, 2021 (see Note 7 of the Notes to Consolidated Financial Statements).

During the year ended December 31, 2019,2021, net cash used in operating activities was $148.5 million due primarily to investments in project working capital, partially offset by cash generated from earnings sources. The increase in working capital in 2021 primarily reflects a decrease in accounts payable due to timing of payments to suppliers and subcontractors and an increase in CIE. The increase in CIE was primarily due to the follow-on impacts of the COVID-19 pandemic, which has caused delays in the negotiation and resolution of certain claims and unapproved change orders (due to the postponement or deferrals of certain legal and arbitration proceedings and settlement discussions, which have recently begun to resume), and constrained customers’ revenue and funding sources, thereby limiting their budgetary discretion to pay the Company for changes approved in scope but for which pricing is pending. As discussed above, we expect the follow-on impacts of COVID-19 to ease as a result of anticipated funding from the IIJA and improved customer revenue and funding sources. During the year ended December 31, 2020, net cash provided by operating activities was $136.5 million (with $248.0 million provided in the second half of 2019), due primarily to changes in net investment in working capital and cash generated from income sources. The change in working capital primarily reflects an increase in billings in excess of costs and estimated earnings (“BIE”), partially offset by increases in accounts receivable and retainage receivable. During the year ended December 31, 2018, net cash provided by operating activities was $21.4$172.8 million due primarily to cash generated from incomeearnings sources, mostlypartially offset by changes in net investment in working capital.
The change in working capital primarily reflected an increase in costs and estimated earnings in excess of billings (“CIE”), which was partially offset by an increase in BIE.

The $115.1$321.3 million increasedecrease in cash provided by operating activities when comparing 20192021 with 2018 primarily2020 substantially reflects an increased investment in working capital principally as a current yearresult of a current-year decrease in CIEaccounts payable compared to an increase in the prior year due to timing of payments to vendors and subcontractors, partially offset by a larger increasecurrent-year decrease in BIE in the current year andretainage receivable compared to an increase in accounts payable compared to a decrease in the prior year. These current year improvements were partially offset by increases in retainage receivable

During 2021 and accounts receivable in 2019 compared to decreases in 2018.

During 2019 and 2018,2020, we used $76.1$37.3 million and $70.2$46.4 million of cash from investing activities, respectively. The net cash used in investing activities in 2019for 2021 and 2020 was primarily due to $84.2 million of expenditures for the acquisition of property and equipment.equipment for projects, which totaled $38.6 million and $54.8 million, respectively. The majority of ourdecrease in capital expenditures in 2021 was forprimarily due to higher capital expenditures in 2020 related to project-specific equipment purchased by our joint ventures and funded directly by our customers. The

During 2021, net cash used in investing activities in 2018 was primarily due to $77.1 million of expenditures for the acquisition of property and equipment.

During 2019, we generated $21.8 million of cash from financing activities principally due to increased net borrowings of $61.3 million and contributions from noncontrolling interests of $9.8 million, partially offset by distributions to noncontrolling interests of $46.5 million. Net cash used in financing activities for 2018 was $29.0$54.7 million, which was primarily due todriven by net repayment of borrowings of $37.0 million and $22.7 million of cash distributions to noncontrolling interests, of $29.0 million and an earn-out payment related to a 2011 acquisition of $16.0 million, partially offset by $7.0 million of cash contributions from noncontrolling interests. During 2020, net cash provided by financing activities was $123.3 million, which was primarily driven by increased net borrowings of $14.8$181.4 million, partially offset by $48.5 million of cash distributions to noncontrolling interests and debt issuance costs of $11.2 million.

As of December 31, 2019,2021, we had working capital of $1.4$2.1 billion, a ratio of current assets to current liabilities of 1.662.17 and a ratio of debt to equity of 0.580.59 compared to working capital of $1.6$1.8 billion, a ratio of current assets to current liabilities of 1.991.80 and a ratio of debt to equity of 0.430.66 at December 31, 2018.2020.
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Debt

Summarized below are the key terms of our debt as of December 31, 2019.2021. For additional information, refer to Note 7 of the Notes to Consolidated Financial Statements, as applicable.

2017

2020 Credit Facility

Agreement

On April 20, 2017,August 18, 2020, the Company entered into the 2017a credit agreement (the “2020 Credit FacilityAgreement”) with SunTrustBMO Harris Bank now known as Truist Bank,N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 20172020 Credit FacilityAgreement provides for a $350$425.0 million term loan B facility (the “Term Loan B”) and a $175.0 million revolving credit facility (the “2017“2020 Revolver”) and a sublimit, with sublimits for the issuance of letters of credit and swinglineswing line loans up to the aggregate amountamounts of $150$75.0 million and $10$10.0 million, respectively, both maturingrespectively. The Term Loan B will mature on April 20, 2022August 18, 2027 and the 2020 Revolver will mature on August 18, 2025, in each case, unless any of the Convertible2017 Senior Notes are outstanding on December 17, 2020, in which case all such borrowings will mature on December 17, 2020, provided that (i) if the Convertible Notes are refinanced in full with the proceeds of permitted refinancing indebtedness in accordance with the terms of the 2017 Credit Facility, the maturity date for the 2017 Credit Facility will remain April 20, 2022 and (ii) if the Company issues “New Convertible Notes” (as defined in the 2017 Credit Facility), the maturity date for the 2017 Credit Facility will be the earlier of (x) April 20, 2022 or December 17, 2020 if Convertible Notes are outstanding on December 17, 2020 and (y) 90January 30, 2025 (which is 91 days prior to the maturity date for such New Convertible Notes. In addition, the 2017 Credit Facility permits additional borrowings in an aggregate amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans. On May 7, 2019, certain provisions of the 2017 Credit Facility were amended, including settingSenior Notes), in which case, both the maximum leverage ratio at 3.50:1.00

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forTerm Loan B and the remainder of its term, thus eliminating the step down from 3.50:1.002020 Revolver will mature on January 30, 2025 (subject to 3.25:1.00.certain further exceptions). For additionalmore information regarding the terms of our 20172020 Credit Facility,Agreement, refer to Note 7 of the Notes to Consolidated Financial Statements.

The table below presents our actual and required consolidated fixed charge coverage ratio and consolidatedfirst lien net leverage ratio under the 20172020 Credit FacilityAgreement for the period, which areis calculated on a rolling four-quarter basis:

Trailing Four Fiscal Quarters Ended

Twelve Months Ended December 31, 20192021

Actual

Required

Fixed charge coverageFirst lien net leverage ratio

3.571.23 to 1.00

> or = 1.25 : 1.00

Leverage ratio

2.60 to 1.00

< or = 3.502.75 : 1.00

As of December 31, 2019,2021, we were in compliance and expect to continue to be in compliance with the covenants under the 20172020 Credit Facility.

AsAgreement.

Repurchase and Repayment of Convertible Notes
On June 15, 2016, the Company issued $200 million of 2.875% Convertible Senior Notes due June 15, 2021 (the “Convertible Notes”) in a resultprivate placement offering. On August 19, 2020, the Company used proceeds from the Term Loan B to repurchase $130.1 million aggregate principal amount of the aforementioned provision in the 2017 Credit Facility whereby the maturity date of the 2017 Credit Facility may be moved forward from April 20, 2022, the facility will mature on December 17, 2020 if the Convertible Notes remain outstanding at that time (the “spring-forward” provision)for an aggregate purchase price of $132.4 million (including accrued and unpaid interest to the repurchase date). WhileThe Company repaid the Company does not have call rights that allow it to unilaterally redeemremaining principal balance of the Convertible Notes it intends to repurchase or exchangeat maturity on June 15, 2021 using proceeds from the Term Loan B, which were held in a restricted cash account for this purpose. None of the Convertible Notes and/or modify or replace the 2017 Credit Facility during 2020. Various alternatives are under consideration to determine the financing arrangement that is best suited to the Company’s needs and provides the most favorable terms. The Company is currently in discussions with lenders regarding its options. Due to the spring-forward provision in the 2017 Credit Facility, all borrowings under the facility are included in “Current maturities of long-term debt” on the Consolidated Balance Sheetremained outstanding as of December 31, 2019.

2021.

2017 Senior Notes

On April 20, 2017, wethe 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.

Convertible Notes

On June 15, 2016, the Company issued $200 million of our Convertible Notes in a private placement offering. The Convertible Notes are unsecured obligations of the Company and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company. The Convertible Notes bear interest at a rate of 2.875% per year, payable in cash semi-annually in June and December. Upon conversion, and at the Company’s election, the Company may satisfy its conversion obligation with cash, shares of its common stock or a combination thereof. As of December 31, 2019, the conversion provisions of our Convertible Notes have not been triggered.

Equipment Financing and Mortgages

The Company has certain loans entered into for the purchase of specific property, plant and equipment and secured by the assets purchased. The aggregate balance of equipment financing loans was approximately $27.7$41.7 million and $38.6$36.9 million at December 31, 20192021 and 2018,2020, respectively, with interest rates ranging from 2.62%2.54% to 3.89% with equal monthly installment payments over periods up to ten years with additional balloon payments of $12.4 million in 2021 and $6.3 million in 2022 on the remaining loans outstanding at December 31, 2019.five years. The aggregate balance of mortgage loans was approximately $11.5$14.6 million and $12.3$10.7 million at December 31, 20192021 and 2018,2020, respectively, with interest rates ranging from a fixed 3.50%2.25% to LIBOR plus 3% and equal monthly installment payments over periods up to ten10 years, as well as one loan with additionala balloon paymentspayment of $2.9$6.8 million in 2021 and $7.0 milliondue in 2023.

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Contractual Obligations

Our outstanding contractual obligations and commitments as of December 31, 2019 are summarized in the following table:

2021 include:

Payments Due

(in thousands)

Total

Less than 1 year

1-3 years

3-5 years

More than 5 years

Debt(a)

$

857,819

$

124,054

$

226,513

$

7,252

$

500,000

Interest on debt(a)

200,107

47,040

72,743

68,866

11,458

Operating leases

50,379

13,564

17,344

11,853

7,618

Pension benefit payments(b)

5,322

4,387

935

—

—

Other

8,064

1,353

1,043

17

5,651

Total

$

1,121,691

$

190,398

$

318,578

$

87,988

$

524,727

_____________________________________________________________________________________________________________

(a)•Debt obligations of $1.0 billion (of which $24.4 million are due in 2022) and interest on debt exclude unamortized debt discount and deferred debt issuance costs. Amounts for interest on debtpayments of $259.5 million (of which $62.1 million are due in 2022) based on interest rates in effect as of December 31, 2019.

(b)The Company utilizes current actuarial assumptions in determining the expected minimum contributions to fund our defined benefit pension and other post-retirement plans. Estimated contributions for periods beyond the scope2021. See Note 7 of the actuarial assumptions have not been included because,Notes to Consolidated Financial Statements for further detail of our debt and the timing of expected future principal and interest payments.

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•Operating lease obligations of $102.9 million (of which $12.4 million are due in management’s judgment, such estimates may not be reliable.2022). See Note 9 of the Notes to Consolidated Financial Statements for further detail of our lease obligations and the timing of expected future payments.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements. The preparation of the Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Estimates are based on information available through the date of the issuance of the financial statements; accordingly, actual results in future periods could differ from these estimates. Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). See Note 1(d), Note 3 and Note 4 of the Notes to Consolidated Financial Statements for more information. Significant judgments and estimates used in the preparation of the Consolidated Financial Statements apply to the following critical accounting policies:

Method of Accounting for Contracts — Contract revenue is recognized over time using the cost-to-cost method which measures progress towards completion based on the ratio of contract costs incurred to date compared to total estimated costs for each performance obligation. The estimates used in accounting for contracts with customers require judgment and assumptions regarding both future events and the evaluation of contingencies such as the impact of change orders, liability claims, other contract disputes, the achievement of contractual performance standards and potential variances in project schedule and costs. Changes to the total estimated contract cost, either due to unexpected events or revisions to management’s initial estimates, for a given project are recognized in the period in which they are determined.

In certain instances, we provide guaranteed completion dates and/or achievement of other performance criteria. Failure to meet schedule or performance guarantees could result in unrealized incentive fees and/or liquidated damages. In addition, depending on the type of contract, unexpected increases in contract cost may be unrecoverable, resulting in total cost exceeding revenue realized from the projects. The Company generally provides limited warranties for work performed, with warranty periods typically extending for a limited duration following substantial completion of the Company’s work on a project. Historically, warranty claims have not resulted in material costs incurred.

Claims arising from construction contracts have been made against the Company by customers, and the Company has made claims against customers for costs incurred in excess of current contract provisions. The Company recognizes revenue for claims as variable consideration in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606.606”). Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration are made during the contract performance period. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to management. Estimated amounts are only included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of such cost is probable and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements described above for variable consideration have been satisfied.

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Construction Joint Ventures — Certain contracts are executed through joint ventures. The arrangements are often formed for the execution of single contracts or projects and allow the Company to share risks and secure specialty skills required for project execution.

In accordance with ASC 810, Consolidation (“ASC 810”) the Company assesses its joint ventures at inception to determine if any meet the qualifications of a variable interest entity (“VIE”). The Company considers a joint venture a VIE if either (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, the Company reassesses its initial determination of whether the joint venture is a VIE.

The Company also evaluates whether it is the primary beneficiary of each VIE and consolidates the VIE if the Company has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity 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
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rights and board representation of the respective parties in determining whether it qualifies as the primary beneficiary. The Company also considers all parties that have direct or implicit variable interests when determining whether it is the primary beneficiary. When the Company is determined to be the primary beneficiary, the VIE is consolidated. In accordance with ASC 810, management’s assessment of whether the Company is the primary beneficiary of a VIE is performed continuously.

For construction joint ventures that do not need to be fully consolidated, the Company accounts for its interest in the joint ventures using the proportionate consolidation method, whereby the Company’s proportionate share of the joint ventures’ assets, liabilities, revenue and cost of operations are included in the appropriate classifications in the Company’s consolidated financial statements. Intercompany balances and transactions have beenare eliminated. See Note 1(b) and Note 1413 of the Notes to Consolidated Financial Statements for additional discussion regarding VIEs.

Recoverability of Goodwill — Goodwill represents the excess of amounts paid over the fair value of net assets acquired from an acquisition. In order to determine the amount of goodwill resulting from an acquisition, we perform an assessment to determine the value of the acquired company's tangible and identifiable intangible assets and liabilities. In our assessment, we determine whether identifiable intangible assets exist, which typically include backlog, customer relationships and trade names.

We test goodwill for impairment annually as of October 1 of each year. This test requires us to estimate the fair value of each reporting unit carrying goodwill using income and market approaches, and to compare the calculated fair value of each reporting unit to its carrying value, which is equal to the reporting unit’s net assets. If the calculated fair value of a reporting unit is less than its carrying value, we recognize an impairment charge equal to the difference.

The impairment evaluation process requires assumptions that are subject to a high degree of judgment such as revenue growth rates, profitability levels, discount rates, industry market multiples and weighted-average cost of capital (“WACC”).capital. Changes in these assumptions would impact the results of our impairment tests.

During interim periods, including those subsequent to the Company’s October 1 annual test date, we evaluate events and circumstances, including, but not limited to, an examination of macroeconomic conditions, cost factors, overall financial performance by each reporting unit, other relevant entity-specific events, and trends in the stock prices of our Company and peers to determine if such factors indicate that it is likely that the goodwill for one or more of our reporting units is impaired, thus warranting the performance of a quantitative impairment test sooner than the fourth quarter of the year. The Company performed an interim impairment test as of June 1, 2019 and recognized a non-cash impairment loss totaling $379.9 million, which eliminated the carrying value of goodwill for the Building and Specialty Contractors reporting units. See Note 1(g) and Note 6 of the Notes to Consolidated Financial Statements.

During the fourth quarter of 2019,2021, we conducted our annual goodwill impairment test and determined that goodwill was not impaired since the estimated fair value of the Civil reporting unit exceeded its net book value but not by a significant amount. As such, there is a risk of goodwill impairment if future events are less favorable than what we assumed or estimated in our impairment analysis.

The Company has considered relevant events and circumstances since the annual goodwill impairment test, including, but not limited to, an examination of macroeconomic conditions, industry and market conditions, impacts from the COVID-19 pandemic, cost factors, overall financial performance by each reporting unit, other relevant entity-specific events, and trends in the stock prices of the Company and its peers. The Company has continued to observe significant opportunities in a robust marketplace which have led to sizable new awards and significant growth in backlog for the Civil reporting unit. In considering the totality of qualitative factors known as of the reporting date, we determined that

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no triggering events occurred or circumstances changed since the date of our October 1, 2021 annual test that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount. We will continue to monitor events occurring or circumstances changing which may suggest that goodwill should be reevaluated. These 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 sustained decline in our stock price and market capitalization,result of the COVID-19 pandemic, as well as other quantitative and qualitative factors specific to the Civil reporting unit which indicate potential triggering events that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount.

New Accounting Pronouncements— For a discussion of recently adopted accounting standards and updates, see Note 11(p) of the Notes to Consolidated Financial Statements.

ITEM 7A. QUANTITATIVEQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not enter into derivative financial instruments for trading, speculation or other purposes that would expose the Company to market risk. In the normal course of business, our results of operations are exposed to certain market risks, primarily associated with fluctuations in interest rates. Borrowings under our 20172020 Credit FacilityAgreement and certain other debt obligations have variable interest rates subject to interest rate risk. See Note 7 of the Notes to Consolidated Financial Statements for further
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discussion of our 20172020 Credit Facility.Agreement. We had approximately $121.9$453.9 million and $49.1$431.5 million of net borrowings with variable interest rates as of December 31, 20192021 and 2018.2020, respectively. If short-term floating interest rates on these borrowings were to change by 0.50% and our variable indebtedness were to remain unchanged, interest expense would increase or decrease by approximately $610,000$2.3 million for the next twelve months.

ITEM 8. FINANCIALFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Report of Independent Registered Public Accounting Firm and Consolidated Financial Statements are set forth in Item 15 in this Annual Report on Form 10-K and are incorporated herein by reference.

ITEM 9. CHANGESCHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.


‎

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None.

ITEM 9A. CONTROLSCONTROLS AND PROCEDURES

Evaluation of 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 Exchange Act, as of December 31, 20192021 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, as of December 31, 2019,2021, our disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act were recorded, processed, summarized and reported within the time periods specified in the SEC’s rules. Our disclosure controls and procedures are designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting— Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining an adequate system of internal control over financial reporting as such term is defined in Exchange Act Rules 13a-15(f). In designing and evaluating our system of internal control over financial reporting, we recognize that inherent limitations exist in any control system no matter how well designed and operated, and we can only provide reasonable, not absolute, assurance of achieving the desired control objectives. In making this assessment, management utilized the criteria issued in Internal Control — Integrated Framework (2013)issued issued by the Committee of Sponsoring Organizations of the Treadway Commission.Based on this assessment, management concluded that, as of December 31, 2019,2021, our internal control over financial reporting was effective based on those criteria.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of the effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Deloitte & Touche LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2019.

2021.

Changes in Internal Control over Financial Reporting— There were no changes in our internal control over financial reporting for the quarter ended December 31, 20192021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Tutor Perini Corporation

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Tutor Perini Corporation and subsidiaries (the “Company”) as of December 31, 2019,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2019,2021, of the Company and our report dated February 26, 2020,24, 2022, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Los Angeles, CA

California

February 26, 2020

24, 2022

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ITEM 9B. OTHEROTHER INFORMATION

None.

PART

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III.

ITEM 10. DIRECTORS,DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item 10 is hereby incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of 2019.

2021.

We have adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees, including our principal executive, principal financial and principal accounting officers. Our Code of Business Conduct and Ethics is posted on our website located at http://investors.tutorperini.com/corporate-governance/corporate-governance/overview/default.aspx. We intend to disclose future amendments to certain provisions of the Code of Business Conduct and Ethics, and waivers of the Code of Business Conduct and Ethics granted to executive officers and directors, on the website within four business days following the date of the amendment or waiver.

ITEM 11. EXECUTIVEEXECUTIVE COMPENSATION

The information required by this Item 11 is hereby incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of 2019.

2021.

ITEM 12. SECURITYSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The

Equity Compensation Plan Information for 2021
As of December 31, 2021, the Company’s share-based compensation plan had outstanding securities and securities available to be awarded as follows:
(a)(b)(c)
Plan categoryNumber of securities to be issued upon exercise of outstanding options, warrants and rightsWeighted-average
exercise price
of outstanding
options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders3,356,616 $20.11 1,243,070 
Equity compensation plans not approved by security holders— — — 
Total3,356,616 $20.11 1,243,070 
Additional information required by this Item 12 is hereby incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of 2019.

2021.

ITEM 13. CERTAINCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item 13 is hereby incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of 2019.

2021.

ITEM 14. PRINCIPAL ACCOUNTINGPRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item 14 is hereby incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of 2019.2021.
31
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PART

PART IV.

ITEM 15. EXHIBITSEXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Tutor Perini Corporation and Subsidiaries

(a) List of Documents Filed as a Part of This Report.

1.           Financial Statements:

Our consolidated financial statementsConsolidated Financial Statements as of December 31, 20192021 and 20182020 and for each of the three years in the period ended December 31, 20192021 and the Notes thereto, together with the reportReport of the independent registered public accounting firmIndependent Registered Public Accounting Firm (PCAOB ID No. 34) on those consolidated financial statementsConsolidated Financial Statements are hereby filed as part of this Annual Report on Form 10-K, beginning on page F-1.

2.           Financial Statement Schedules:

All consolidated financial statement schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the Consolidated Financial Statements and in the Notes thereto.

3.           Exhibits:

See exhibits listed under Part (b) below.

31

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(b) Exhibits.

EXHIBIT INDEX

The following designated exhibits are, as indicated below, either filed herewith or have heretofore been filed with the SEC under the Securities Act or the Exchange Act and are referred to and incorporated herein by reference to such filings.

Exhibit 3.

Articles of Incorporation and By-laws

3.1

3.2

Articles of Amendment to the Restated Articles of Organization of Tutor Perini Corporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed on April 12, 2000).

3.3

Articles of Amendment to the Restated Articles of Organization of Tutor Perini Corporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed on September 11, 2008).

3.4

Articles of Amendment to the Restated Articles of Organization of Tutor Perini Corporation (incorporated by reference to Exhibit 3.5 to Form 10-Q filed on August 10, 2009)July 29, 2020).

3.53.2

Exhibit 4.

Instruments Defining the Rights of Security Holders, Including Indentures

4.1

4.2

4.3

4.4

4.5

4.6

Indenture, dated June 15, 2016, by and between Tutor Perini Corporation and Wilmington Trust, National Association (incorporated by reference to Exhibit 4.1 to Form 8-K filed on June 16, 2016).

4.74.6

4.84.7

Exhibit 10.

Material Contracts

10.110.1**

10.210.2**

32
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10.310.3**

10.410.4**

10.510.5**

10.6*
10.7*

10.610.8**

10.710.9*

10.10

10.810.11

32

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10.12

10.9*

10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20*

10.1010.21**

10.1110.22*

10.12*

Employment Offer Letter, dated May 9, 2017, by and between Tutor Perini Corporation and Leonard J. Rejcek (incorporated by reference to Exhibit 10.1 to Form 10-Q filed on May 9, 2018).

10.13*

Amendment to Employment Offer Letter, dated August 11, 2017, by and between Tutor Perini Corporation and Leonard J. Rejcek (incorporated by reference to Exhibit 10.2 to Form 10-Q filed on May 9, 2018).

10.14*

Tutor Perini Corporation Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed on May 25, 2018).

10.15*

Employment Offer Letter, dated June 12, 2018, by and between Tutor Perini Corporation and Wendy A. Hallgren (incorporated by reference to Exhibit 10.1 to Form 10-Q filed on November 7, 2018).

10.1610.23*

10.17*

Separation Benefits Agreement, dated September 17, 2019, by and between Tutor Perini Corporation and Wendy A. Hallgren (incorporated by reference to Exhibit 10.1 to Form 8-K filed on September 20, 2019).

10.1810.24*

10.1910.25*

10.2010.26*

33
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10.27*

10.28
Exhibit 21

Exhibit 23

Exhibit 24

Exhibit 31.1

Exhibit 31.2

Exhibit 32.1

Exhibit 32.2

Exhibit 95

Exhibit 101.INS

Inline 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.

Exhibit 101.SCH

Inline XBRL Taxonomy Extension Schema Document.

Exhibit 101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Exhibit 101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

Exhibit 101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Exhibit 101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Exhibit 104

Cover Page Interactive Data File - The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2019,2021, formatted in Inline XBRL (included as Exhibit 101).

_________________________________________________________________________________________

*Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(a)(3) of Form 10-K

ITEM 16. FORM 10-K SUMMARY

SUMMARY

None.

33

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SIGNATURES

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Companyregistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Tutor Perini Corporation

(Registrant)

Dated:Date: February 26, 202024, 2022

By:

/s/ Gary G. Smalley

Gary G. Smalley

Executive Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Companyregistrant and in the capacities and on the dates indicated.

Signature

Title

Date

=Principal Executive Officer and Director

/s/ Ronald N. Tutor

Ronald N. Tutor

Chairman and Chief Executive Officer

February 26, 202024, 2022

=Principal Financial Officer

/s/ Gary G. Smalley

Gary G. Smalley

Executive Vice President and Chief Financial Officer

February 26, 202024, 2022

=Principal Accounting Officer

/s/ Ryan J. Soroka

Ryan J. Soroka

Vice President and Chief Accounting Officer

February 26, 202024, 2022

= Other Directors

Peter Arkley

)

Jigisha Desai

)
Sidney J. Feltenstein

)

James A. Frost

)

Michael F. Horodniceanu

)

/s/ Gary G. Smalley

Michael R. Klein

)

Gary G. Smalley

Robert C. Lieber

)

Attorney in Fact

Dennis D. Oklak

)

Raymond R. Oneglia

)

Dale A. Reiss

)

Dickran M. Tevrizian, Jr.

)

Dated: February 26, 202024, 2022

35

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

Page

Page
Consolidated Financial Statements of the Registrant

F-2F-2

F-5F-4

F-6F-5

F-7F-6

F-8F-7

F-9F-8

F-10F-9

F-1

F-1

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REPORT OF INDEPENDENTREGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Tutor Perini Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tutor Perini Corporation and subsidiaries (the "Company"“Company”) as of December 31, 20192021 and 2018,2020, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows, for each of the three years in the period ended December 31, 2019,2021, and the related notes (collectively referred to as the "financial statements"“financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20192021 and 2018,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019,2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2020,24, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Matter

The critical audit mattersmatter communicated below are mattersis a matter arising from the current-period audit of the financial statements that werewas communicated or required to be communicated to the audit committee and that (1) relaterelates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit mattersmatter below, providing a separate opinionsopinion on the critical audit mattersmatter or on the accounts or disclosures to which they relate.

it relates.

Revenue, Accounts Receivable, Contract Assets and Liabilities — Accounting for Construction Contracts–Contracts – Refer to Notes 1, 3, 4, and 8 to the consolidated financial statements

Critical Audit Matter Description

The Company recognizes revenue for construction contracts over the contract term (“over time”) as construction work progresses. The accounting for these contracts involves judgment, particularly as it relates to the process of determining total estimated revenue (transaction price) and estimating total costs to be incurred at contract completion. Costs of operations are typically recognized as incurred, and the Company’s revenues, including estimated profits, are recorded proportionately as costs are incurred based on the ratio of costs incurred to date to the total estimated costs at completion for the respective performance obligations. Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration, including the impact of change orders, claims, contract disputes and the achievement of contractual performance criteria, and award or other incentive fees are made during the contract performance period (collectively referred to as “variable consideration”). The Company estimates variable consideration at the most likely amount it expects to receive and includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Also, the Company often engages subcontractors, suppliers, or vendors, to provide underlying materials or services, or a combination of both. Judgment
F-2
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is involved in determining estimated recoveries from disputes regarding performance under these contracts (“back charges”), which are a reduction in costs and are recorded as a receivable on the consolidated balance sheet.

Given the significant judgment necessary to account for the Company’s construction contracts including the use of estimates, such as total estimated revenue, total costs to be incurred at contract completion, variable consideration and back charges, which are complex

F-2

Table of Contents

and subject to many variables, auditing the corresponding balances and related accounting estimates required extensive audit effort due to the complexity of these estimates, and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s estimates and judgments included within the Company’s total estimated revenues, total costs to be incurred at contract completion, variable consideration, and back charges included the following, among others:

•We tested the effectiveness of controls over revenues, including those over the determination of estimated costs at completion of the contract, total estimated revenue (including the estimated percentage of completion), variable consideration (including significant change orders and claims), and back charges.

•We selected a sample of construction contracts and performed the following:

o◦Compared the total estimated revenue (transaction price), including estimated variable consideration, to the consideration expected to be received based on current rights and obligations under the contracts and any modifications that were agreed upon with the customers.

o◦We evaluated the reasonableness of the estimated variable consideration by 1) evaluating the information supporting management’s judgment as to the cause and contractual rights and 2) testing the accuracy of the identification of the underlying costs.

o◦Tested the accuracy and completeness of costs incurred to date.

o◦Evaluated the reasonableness of management’s estimates of total cost and profit at completion for selected contracts by:

•Evaluating management’s ability to achieve the estimates of total cost and profit by performing corroborating inquiries with the Company’s project managers, and comparing the estimates to management’s work plans, engineering specifications, and supplier contracts.

•Comparing management’s estimates to supporting documents for those estimates, when applicable.

•Evaluating management’s ability to accurately estimate total costs and profits at completion by comparing actual costs and profits to management’s historical estimates for performance obligations that have been fulfilled.

•Evaluating trends on changes in estimates and obtaining evidence on timing and amounts supporting these changes in estimates.

o◦Tested the mathematical accuracy of management’s calculation of revenue recognized.

•We evaluated selected quarter over quarter changes in contract profit estimates by obtaining explanations from the Company’s project managers regarding timing and amount and corroborating these inquiries by reading documents such as management work plans, customer communications, invoices and supplier communications.

•Performed procedures on recorded back charges to evaluate the reasonableness of the estimated recovery by 1) evaluating the information supporting management’s judgment as to the cause and contractual rights and 2) testing the accuracy of the identification of the underlying costs.

Goodwill – Refer to Notes 1 and 6 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit (which correspond to the Company’s operating segments) to its carrying value. The Company determines the fair value of its reporting units using the income approach and market approach valuation methodologies. The determination of fair value using the income-based approach requires management to make significant estimates and assumptions related to projected operating margins, cash flows generated from existing work and new awards, and projected investments in working capital (collectively, the “forecasted financial information”), as well as the discount rates and weighted-average cost of capital (“WACC”). The determination of fair value using the market-based approach requires management to make significant assumptions, including those related to the forecasted financial information referred to above and the industry-comparable multiples to be used for each of its reporting units. The Company determines the valuation of each reporting unit based upon a weighted-average value of the income approach and market approach valuation methods. As appropriate, the Company also assesses the reasonableness of the estimated fair value of the reporting units by comparing the sum of the reporting units’ fair values to the Company’s market capitalization and calculating an implied control premium (the excess of the aggregate fair values of the reporting units over the Company’s market capitalization). In evaluating the results there are various quantitative and qualitative factors that need to be considered and could involve subjective judgment. During the second quarter of 2019, the Company identified an interim impairment indicator in its goodwill balance. The Company performed an interim impairment test and determined that the fair value of each of the reporting units was below the carrying value, leading to a pre-tax impairment charge of $379.9 million and leaving a $205.1 million post-impairment goodwill balance solely attributable to the Civil reporting unit.

We identified goodwill as a critical audit matter because small changes to valuation assumptions, specifically the forecasted financial information, discount rates, WACC, and industry-comparable multiples, could have a significant impact on the reporting unit concluded value for both the interim and annual impairment tests, and changes to the reporting unit concluded value impacts the implied control premium calculated from the reconciliation between the reporting unit’s fair values and the Company’s market

F-3

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capitalization, which was performed during the interim impairment test. Auditing these assumptions involved extensive audit effort, including the need to involve our fair value specialists, due to the complexity of these assumptions and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasted financial information, discount rates, WACC, and industry-comparable multiples for the reporting units, for both the interim and the annual impairment tests, included the following, among others:

We tested the effectiveness of controls within the goodwill impairment test process, including those over the forecasted financial information, the selection of the industry-comparable multiples, WACC, and discount rates, as well as the identification of interim impairment indicators.

We evaluated management’s historical ability to accurately forecast by comparing actual results to management’s previous forecasted financial information for the same period.

We evaluated the reasonableness of management’s forecasted financial information by comparing the forecasted financial information to (1) historical results, (2) internal communications to management and the Board of Directors, (3) reporting units’ backlog, and (4) forecasted financial information included in the Company’s press releases, as well as analyst and industry reports of the Company and companies in its peer group.

We considered the impact of circumstances affecting the industry including, but not limited to, changes in the legal and business environment.

With the assistance of our fair value specialists, we evaluated the WACC and discount rates, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates of the discount rates and comparing those to the WACC and discount rates selected by management.

With the assistance of our fair value specialists, we evaluated the industry-comparable multiples, including testing the underlying source information and mathematical accuracy of the calculations, the acceptability of the selected companies within the Company’s peer group, and comparing the multiples selected by management to companies in the engineering and construction industry.

With the assistance of our fair value specialists, we evaluated the reasonableness of the quantitative and qualitative factors considered in the reconciliation between the reporting units’ fair values and the Company’s market capitalization and implied control premium as of the interim impairment test date. We evaluated factors such as implied control premiums in other mergers and acquisition transactions in the industry, ownership of the Company’s common stock, market trends, and vertical-integration between reporting units.

We evaluated the selected industry-comparable multiples by comparing to those used in the prior year, those used in the different reporting units and to current facts and circumstances affecting the reporting unit.

/s/ Deloitte & Touche LLP

Los Angeles, CA

California

February 26, 2020

24, 2022

We have served as the Company's auditor since 2002.

F-4

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OFOPERATIONS

Year Ended December 31,

Year Ended December 31,

(in thousands, except per common share amounts)

2019

2018

2017

(in thousands, except per common share amounts)202120202019

REVENUE

$

4,450,832

$

4,454,662

$

4,757,208

REVENUE$4,641,830 $5,318,763 $4,450,832 

COST OF OPERATIONS

(4,209,060)

(4,000,209)

(4,302,803)

COST OF OPERATIONS(4,175,439)(4,832,610)(4,209,060)

GROSS PROFIT

241,772

454,453

454,405

GROSS PROFIT466,391 486,153 241,772 

General and administrative expenses

(226,916)

(262,577)

(274,928)

General and administrative expenses(239,587)(223,809)(226,916)

Goodwill impairment

(379,863)

—

—

Goodwill impairment— — (379,863)

INCOME (LOSS) FROM CONSTRUCTION OPERATIONS

(365,007)

191,876

179,477

INCOME (LOSS) FROM CONSTRUCTION OPERATIONS226,804 262,344 (365,007)

Other income, net

6,667

4,256

43,882

Other income (expense)Other income (expense)2,004 (11,853)6,667 

Interest expense

(67,494)

(63,519)

(69,384)

Interest expense(69,026)(76,212)(67,494)

INCOME (LOSS) BEFORE INCOME TAXES

(425,834)

132,613

153,975

INCOME (LOSS) BEFORE INCOME TAXES159,782 174,279 (425,834)

Income tax benefit (expense)

65,609

(34,832)

569

Income tax (expense) benefitIncome tax (expense) benefit(25,632)(21,942)65,609 

NET INCOME (LOSS)

(360,225)

97,781

154,544

NET INCOME (LOSS)134,150 152,337 (360,225)

LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

27,465

14,345

6,162

LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS42,225 43,943 27,465 

NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION

$

(387,690)

$

83,436

$

148,382

NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION$91,925 $108,394 $(387,690)

BASIC EARNINGS (LOSS) PER COMMON SHARE

$

(7.72)

$

1.67

$

2.99

BASIC EARNINGS (LOSS) PER COMMON SHARE$1.80 $2.14 $(7.72)

DILUTED EARNINGS (LOSS) PER COMMON SHARE

$

(7.72)

$

1.66

$

2.92

DILUTED EARNINGS (LOSS) PER COMMON SHARE$1.79 $2.12 $(7.72)

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:

BASIC

50,220

49,952

49,647

BASIC51,017 50,656 50,220 

DILUTED

50,220

50,301

50,759

DILUTED51,369 51,077 50,220 

The accompanying notes are an integral part of these consolidated financial statements.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Year Ended December 31,

Year Ended December 31,

(in thousands)

2019

2018

2017

(in thousands)202120202019

NET INCOME (LOSS)

$

(360,225)

$

97,781

$

154,544

NET INCOME (LOSS)$134,150 $152,337 $(360,225)

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:

Defined benefit pension plan adjustments

844

771

1,424

Defined benefit pension plan adjustments6,221 (6,261)844 

Foreign currency translation adjustments

1,337

(2,945)

1,273

Foreign currency translation adjustments(325)279 1,337 

Unrealized gain (loss) in fair value of investments

1,561

(778)

(2)

Unrealized gain (loss) in fair value of investments(2,650)1,571 1,561 

TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

3,742

(2,952)

2,695

TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX3,246 (4,411)3,742 

COMPREHENSIVE INCOME (LOSS)

(356,483)

94,829

157,239

COMPREHENSIVE INCOME (LOSS)137,396 147,926 (356,483)

LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

27,858

14,124

6,162

LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS42,365 44,173 27,858 

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION

$

(384,341)

$

80,705

$

151,077

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION$95,031 $103,753 $(384,341)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

F-5

Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONSOLIDATED

CONSOLIDATED BALANCE SHEETS

As of December 31,

(in thousands, except share and per share amounts)

2019

2018

ASSETS

CURRENT ASSETS:

Cash and cash equivalents ($103,850 and $43,131 related to VIEs)

$

193,685

$

116,075

Restricted cash

8,416

3,788

Restricted investments

70,974

58,142

Accounts receivable ($91,090 and $62,482 related to VIEs)

1,354,519

1,261,072

Retainage receivable ($89,132 and $36,724 related to VIEs)

562,375

478,744

Costs and estimated earnings in excess of billings ($22,764 and $0 related to VIEs)

1,123,544

1,142,295

Other current assets ($58,128 and $30,185 related to VIEs)

197,473

115,527

Total current assets

3,510,986

3,175,643

PROPERTY AND EQUIPMENT:

Land

39,047

41,599

Building and improvements

115,041

125,193

Construction equipment

560,547

486,034

Other equipment

183,197

181,578

897,832

834,404

Less accumulated depreciation

(388,147)

(343,735)

Total property and equipment, net ($49,919 and $51,508 related to VIEs)

509,685

490,669

GOODWILL

205,143

585,006

INTANGIBLE ASSETS, NET

155,270

85,911

OTHER ASSETS

104,693

50,523

TOTAL ASSETS

$

4,485,777

$

4,387,752

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Current maturities of long-term debt

$

124,054

$

16,767

Accounts payable ($93,848 and $18,070 related to VIEs)

682,699

621,728

Retainage payable ($13,967 and $0 related to VIEs)

252,181

211,956

Billings in excess of costs and estimated earnings ($422,847 and $263,764 related to VIEs)

844,389

573,190

Accrued expenses and other current liabilities ($25,402 and $34,828 related to VIEs)

206,533

174,325

Total current liabilities

2,109,856

1,597,966

LONG-TERM DEBT, less current maturities, net of unamortized discount and debt issuance costs totaling $23,343 and $34,998

710,422

744,737

DEFERRED TAX LIABILITIES

35,686

105,521

OTHER LONG-TERM LIABILITIES

199,288

151,639

TOTAL LIABILITIES

3,055,252

2,599,863

COMMITMENTS AND CONTINGENCIES (Note 8)

 

 

EQUITY

Stockholders' equity:

Preferred stock – authorized 1,000,000 shares ($1 par value), NaN issued

—

—

Common stock – authorized 75,000,000 shares ($1 par value), issued and outstanding 50,278,816 and 50,025,996 shares

50,279

50,026

Additional paid-in capital

1,117,972

1,102,919

Retained earnings

313,991

701,681

Accumulated other comprehensive loss

(42,100)

(45,449)

Total stockholders' equity

1,440,142

1,809,177

Noncontrolling interests

(9,617)

(21,288)

TOTAL EQUITY

1,430,525

1,787,889

TOTAL LIABILITIES AND EQUITY

$

4,485,777

$

4,387,752

The accompanying notes are an integral part of these consolidated financial statements. 

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Table of Contents

As of December 31,
(in thousands, except share and per share amounts)20212020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($102,679 and $105,735 related to VIEs)$202,197 $374,289 
Restricted cash9,199 77,563 
Restricted investments84,355 78,912 
Accounts receivable ($116,415 and $86,012 related to VIEs)1,454,319 1,415,063 
Retainage receivable ($162,259 and $122,335 related to VIEs)568,881 648,441 
Costs and estimated earnings in excess of billings ($143,105 and $39,846 related to VIEs)1,356,768 1,236,734 
Other current assets ($43,718 and $51,746 related to VIEs)186,773 249,455 
Total current assets3,862,492 4,080,457 
PROPERTY AND EQUIPMENT:
Land40,175 44,167 
Building and improvements116,146 116,422 
Construction equipment580,909 570,675 
Other equipment175,832 192,247 
913,062 923,511 
Less accumulated depreciation(483,417)(434,294)
Total property and equipment, net ($2,203 and $12,840 related to VIEs)429,645 489,217 
GOODWILL205,143 205,143 
INTANGIBLE ASSETS, NET85,068 123,115 
OTHER ASSETS142,550 147,685 
TOTAL ASSETS$4,724,898 $5,045,617 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt, net of unamortized discount and debt issuance costs totaling $0 and $2,040$24,406 $100,188 
Accounts payable ($96,097 and $116,461 related to VIEs)512,056 794,611 
Retainage payable ($37,007 and $26,439 related to VIEs)268,945 315,135 
Billings in excess of costs and estimated earnings ($355,270 and $362,427 related to VIEs)761,689 839,222 
Accrued expenses and other current liabilities ($8,566 and $9,595 related to VIEs)210,017 215,207 
Total current liabilities1,777,113 2,264,363 
LONG-TERM DEBT, less current maturities, net of unamortized discount and debt issuance costs totaling $17,109 and $20,209
969,248 925,277 
DEFERRED INCOME TAXES70,989 82,966 
OTHER LONG-TERM LIABILITIES233,828 230,066 
TOTAL LIABILITIES3,051,178 3,502,672 
COMMITMENTS AND CONTINGENCIES (Note 8)00
EQUITY
Stockholders' equity:
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 51,095,706 and 50,827,205 shares51,096 50,827 
Additional paid-in capital1,133,150 1,127,385 
Retained earnings514,310 422,385 
Accumulated other comprehensive loss(43,635)(46,741)
Total stockholders' equity1,654,921 1,553,856 
Noncontrolling interests18,799 (10,911)
TOTAL EQUITY1,673,720 1,542,945 
TOTAL LIABILITIES AND EQUITY$4,724,898 $5,045,617 

TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,

(in thousands)

2019

2018

2017

Cash Flows from Operating Activities:

Net income (loss)

$

(360,225)

$

97,781

$

154,544

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Goodwill impairment

379,863

—

—

Depreciation

58,818

43,724

48,387

Amortization of intangible assets

6,226

3,543

3,543

Share-based compensation expense

19,143

22,782

21,174

Change in debt discount and deferred debt issuance costs

13,207

12,072

17,595

Deferred income taxes

(71,609)

(449)

(23,096)

Gain on remeasurement of investment in joint venture

(37,792)

—

—

(Gain) loss on sale of property and equipment

(4,688)

402

1,131

Changes in other components of working capital, net of balances acquired

131,257

(156,844)

(60,214)

Other long-term liabilities

1,863

(2,007)

3,656

Other, net

467

398

(3,170)

NET CASH PROVIDED BY OPERATING ACTIVITIES

136,530

21,402

163,550

Cash Flows from Investing Activities:

Business acquisition, cash balance acquired net of cash paid

6,607

—

—

Acquisition of property and equipment

(84,196)

(77,069)

(30,280)

Proceeds from sale of property and equipment

12,581

6,387

2,744

Investments in securities

(35,167)

(20,848)

(60,967)

Proceeds from maturities and sales of investments in securities

24,120

21,322

1,370

NET CASH USED IN INVESTING ACTIVITIES

(76,055)

(70,208)

(87,133)

Cash Flows from Financing Activities:

Proceeds from debt

931,594

1,753,160

2,161,384

Repayment of debt

(870,277)

(1,738,314)

(2,195,068)

Business acquisition related payment

—

(15,951)

—

Cash payments related to share-based compensation

(2,363)

(2,671)

(11,769)

Distributions paid to noncontrolling interests

(46,500)

(29,000)

(17,499)

Contributions from noncontrolling interests

9,813

3,797

2,842

Debt issuance and extinguishment costs

(504)

—

(15,266)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

21,763

(28,979)

(75,376)

Net increase (decrease) in cash, cash equivalents and restricted cash

82,238

(77,785)

1,041

Cash, cash equivalents and restricted cash at beginning of year

119,863

197,648

196,607

Cash, cash equivalents and restricted cash at end of year

$

202,101

$

119,863

$

197,648

The accompanying notes are an integral part of these consolidated financial statements.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Accumulated

Additional

Other

Common

Paid-in

Retained

Comprehensive

Noncontrolling

(in thousands)

Stock

Capital

Earnings

Loss

Interests

Total

Balance - December 31, 2016

$

49,211

$

1,075,600

$

473,625

$

(45,413)

$

—

$

1,553,023

Net income

—

—

148,382

—

6,162

154,544

Other comprehensive income

—

—

—

2,695

—

2,695

Share-based compensation

—

20,877

—

—

—

20,877

Issuance of common stock, net

570

(12,272)

—

—

—

(11,702)

Contributions from noncontrolling interests

—

—

—

—

2,842

2,842

Distributions to noncontrolling interests

—

—

—

—

(17,499)

(17,499)

Balance - December 31, 2017

$

49,781

$

1,084,205

$

622,007

$

(42,718)

$

(8,495)

$

1,704,780

Cumulative effect of accounting change

—

—

(3,762)

—

(1,714)

(5,476)

Net income

—

—

83,436

—

14,345

97,781

Other comprehensive loss

—

—

—

(2,731)

(221)

(2,952)

Share-based compensation

—

21,544

—

—

—

21,544

Issuance of common stock, net

245

(2,830)

—

—

—

(2,585)

Contributions from noncontrolling interests

—

—

—

—

3,797

3,797

Distributions to noncontrolling interests

—

—

—

—

(29,000)

(29,000)

Balance - December 31, 2018

$

50,026

$

1,102,919

$

701,681

$

(45,449)

$

(21,288)

$

1,787,889

Net income (loss)

—

—

(387,690)

—

27,465

(360,225)

Other comprehensive income

—

—

—

3,349

393

3,742

Share-based compensation

—

17,571

—

—

—

17,571

Issuance of common stock, net

253

(2,518)

—

—

—

(2,265)

Contributions from noncontrolling interests

—

—

—

—

9,813

9,813

Distributions to noncontrolling interests

—

—

—

—

(46,500)

(46,500)

Recognized fair value of noncontrolling interest in joint venture upon consolidation

—

—

—

—

20,500

20,500

Balance - December 31, 2019

$

50,279

$

1,117,972

$

313,991

$

(42,100)

$

(9,617)

$

1,430,525

The accompanying notes are an integral part of these consolidated financial statements.

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Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
(in thousands)202120202019
Cash Flows from Operating Activities:
Net income (loss)$134,150 $152,337 $(360,225)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Goodwill impairment— — 379,863 
Depreciation82,732 74,879 58,818 
Amortization of intangible assets35,497 32,155 6,226 
Share-based compensation expense11,642 11,833 19,143 
Change in debt discounts and deferred debt issuance costs5,756 20,153 13,207 
Deferred income taxes(13,887)48,253 (71,609)
Gain on remeasurement of investment in joint venture— — (37,792)
(Gain) loss on sale of property and equipment2,639 (1,673)(4,688)
Changes in other components of working capital, net of balances acquired(422,227)(169,976)131,257 
Other long-term liabilities14,766 4,352 1,863 
Other, net478 459 467 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES(148,454)172,772 136,530 
Cash Flows from Investing Activities:
Business acquisition, cash balance acquired net of cash paid— — 6,607 
Acquisition of property and equipment(38,594)(54,781)(84,196)
Proceeds from sale of property and equipment7,245 14,550 12,581 
Investments in securities(30,761)(31,331)(35,167)
Proceeds from maturities and sales of investments in securities24,771 25,204 24,120 
NET CASH USED IN INVESTING ACTIVITIES(37,339)(46,358)(76,055)
Cash Flows from Financing Activities:
Proceeds from debt740,743 1,301,282 931,594 
Repayment of debt(777,762)(1,119,887)(870,277)
Cash payments related to share-based compensation(1,989)(1,397)(2,363)
Distributions paid to noncontrolling interests(22,655)(48,467)(46,500)
Contributions from noncontrolling interests7,000 3,000 9,813 
Debt issuance, extinguishment and modification costs— (11,194)(504)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES(54,663)123,337 21,763 
Net increase (decrease) in cash, cash equivalents and restricted cash(240,456)249,751 82,238 
Cash, cash equivalents and restricted cash at beginning of year451,852 202,101 119,863 
Cash, cash equivalents and restricted cash at end of year$211,396 $451,852 $202,101 
The accompanying notes are an integral part of these consolidated financial statements.
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TUTOR PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands)Common
Stock		Additional
Paid-in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total
Balance - December 31, 2018$50,026 $1,102,919 $701,681 $(45,449)$(21,288)$1,787,889 
Net income (loss)— — (387,690)— 27,465 (360,225)
Other comprehensive income— — — 3,349 393 3,742 
Share-based compensation— 17,571 — — — 17,571 
Issuance of common stock, net253 (2,518)— — — (2,265)
Contributions from noncontrolling interests— — — — 9,813 9,813 
Distributions to noncontrolling interests— — — — (46,500)(46,500)
Recognized fair value of noncontrolling interest in joint venture upon consolidation— — — — 20,500 20,500 
Balance - December 31, 2019$50,279 $1,117,972 $313,991 $(42,100)$(9,617)$1,430,525 
Net income— — 108,394 — 43,943 152,337 
Other comprehensive income (loss)— — — (4,641)230 (4,411)
Share-based compensation— 11,928 — — — 11,928 
Reacquisition of equity component from convertible note repurchase, net of taxes— (764)— — — (764)
Issuance of common stock, net548 (1,751)— — — (1,203)
Contributions from noncontrolling interests— — — — 3,000 3,000 
Distributions to noncontrolling interests— — — — (48,467)(48,467)
Balance - December 31, 2020$50,827 $1,127,385 $422,385 $(46,741)$(10,911)$1,542,945 
Net income— — 91,925 — 42,225 134,150 
Other comprehensive income— — — 3,106 140 3,246 
Share-based compensation— 8,848 — — — 8,848 
Issuance of common stock, net269 (3,083)— — — (2,814)
Contributions from noncontrolling interests— — — — 10,000 10,000 
Distributions to noncontrolling interests— — — — (22,655)(22,655)
Balance - December 31, 2021$51,096 $1,133,150 $514,310 $(43,635)$18,799 $1,673,720 
The accompanying notes are an integral part of these consolidated financial statements.
F-8
Table of Contents
TUTOR PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying consolidated financial statements have been prepared in compliance with generally accepted accounting principles in the United States (“GAAP”) as codified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”).

Certain amounts in the notes to the consolidated financial statements of prior years have been reclassified to conform to the current year presentation.

(b) Principles of Consolidation

The consolidated financial statements include the accounts of Tutor Perini Corporation and its wholly owned subsidiaries (the “Company”). The Company occasionally forms joint ventures with unrelated third parties for the execution of single contracts or projects. The Company assesses its joint ventures to determine if they meet the qualifications of a variable interest entity (“VIE”) in accordance with ASC 810, Consolidation (“ASC 810”). If a joint venture is a VIE and the Company is the primary beneficiary, the joint venture is fully consolidated (See Note 14)13). If a joint venture is not a VIE, it may be consolidated under the voting interest method if the Company holds a controlling financial interest in the joint venture. The Company is considered to hold a controlling financial interest when it is able to exercise control over the joint venture’s operating and financial decisions. For construction joint ventures that do not need to be consolidated, the Company accounts for its interest in the joint ventures using the proportionate consolidation method, whereby the Company’s proportionate share of the joint ventures’ assets, liabilities, revenue and cost of operations are included in the appropriate classifications in the Company’s consolidated financial statements. Intercompany balances and transactions have been eliminated.

(c) Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts. These estimates are based on information available through the date of the issuance of the financial statements; therefore, actual results could differ from those estimates.

(d) Revenues

Revenue Recognition

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

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

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

Due to the nature of the work required to be performed on many of the Company’s performance obligations, estimating total revenue and cost at completion is complex, subject to many variables and requires significant judgment. Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration, including the impact of change orders, claims, contract disputes and the achievement of contractual performance criteria, and award or other incentive fees are made during the contract performance period. The Company estimates variable consideration at the most likely amount it expects to receive. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal
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TUTOR PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

performance and all information (historical, current and forecasted) that is reasonably available to management. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of such cost is probable and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements described above for variable consideration have been satisfied.

Changes in Estimates on Construction Contracts

The Company’s estimates of contract revenue and cost are highly detailed and many factors change during a contract performance period that result in a change to contract profitability. These factors include, but are not limited to, differing site conditions; availability of skilled contract labor; performance of major material suppliers and subcontractors; on-going subcontractor negotiations and buyout provisions; unusual weather conditions; changes in the timing of scheduled work; change orders; accuracy of the original bid estimate; changes in estimated labor productivity and costs based on experience to date; achievement of incentive-based income targets; and the expected, or actual, resolution terms for claims. The factors that cause changes in estimates vary depending on the maturation of the project within its lifecycle. For example, in the ramp-up phase, these factors typically consist of revisions in anticipated project costs and during the peak and closeout phases, these factors include the impact of change orders and claims, as well as additional revisions in remaining anticipated project costs. Generally, if the contract is at an early stage of completion, the current period impact is smaller than if the same change in estimate is made to the contract at a later stage of completion. Management evaluates changes in estimates on a contract-by-contract basis and discloses significant changes, if material, in the Notes to Consolidated Financial Statements. The cumulative catch-up method is used to account for revisions in estimates.

(e) Depreciation of Property and Equipment and Amortization of Long-Lived Intangible Assets

Property and equipment and long-lived intangible assets are generally depreciated or amortized on a straight-line basis over their estimated useful lives ranging from three to forty years.

(f) Recoverability of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever circumstances indicate that the future cash flows generated by the assets might be less than the assets’ net carrying value. In such circumstances, an impairment loss will be recognized by the amount the assets’ net carrying value exceeds their fair value.

(g) Recoverability of Goodwill

The Company tests goodwill for impairment annually as of October 1 for each reporting unit and between annual tests if events occur or circumstances change which suggest that goodwill should be reevaluated. Such events or circumstances include significant changes in legal factors and business climate, recent losses at a reporting unit, and industry trends, among other factors. The Civil, Building and Specialty Contractors segments each represent a reporting unit, and the Civil reporting unit carried the remaining goodwill balance at December 31, 20192021 as a result of the $379.9 million impairment loss recognized in the second quarter of 2019. The Company performs its annual quantitative impairment assessment during the fourth quarter of each year using a weighted-averageweighted average of an income and a market approach. These approaches utilize various valuation assumptions, and small changes to the assumptions could have a significant impact on the concluded fair value. The income approach is based on estimated present value of future cash flows for each reporting unit carrying a goodwill balance. The market approach is based on assumptions about how market data relates to each reporting unit carrying a goodwill balance. The weighting of these two approaches is based on their individual correlation to the economics of each reporting unit carrying a goodwill balance. The annual quantitative assessment performed in the fourth quarter of 20192021 resulted in an estimated fair value that exceeded the net book value of the Civil reporting unit; therefore, no impairment charge was necessary.

(h) Recoverability of Non-Amortizable Trade Names

Certain trade names have an estimated indefinite life and are not amortized to earnings, but instead are reviewed for impairment annually, or more often if events occur or circumstances change which suggest that the non-amortizable trade names should be reevaluated. The Company performs its annual quantitative impairment assessment during the fourth quarter of each year and may assess its non-amortizable trade names for impairment initially using a qualitativean income approach to determine whether conditions exist to indicate that it is more likely than not that the fair value of a trade name is less than its carrying value. If the Company concludes, based on assessment of relevant events, facts and circumstances, that it is more likely than not that the trade name’s fair value is greater than its carrying value, no further impairment testing through a quantitative assessment is required. (relief from royalty method). The qualitative assessment performed for the Company’s annual impairment assessment in the fourth quarter of 2019 concluded that it was more likely than not that the trade name’s2021 resulted in an estimated fair value for the non-amortizable trade names that exceeded their respective net book values; therefore, no impairment charge was greater than its carrying value, and therefore a quantitative analysis was not required.

necessary.

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Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(i) Income Taxes

Deferred income tax assets and liabilities are recognized for the effects of temporary differences between the financial statement carrying amounts and the income tax basis of assets and liabilities using tax rates expected to be in effect when such differences reverse. Income tax positions must meet a more-likely-than-not threshold to be recognized. The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision.

(j) Earnings Per Common Share (EPS)

Basic EPSearnings per common share (“EPS”) and diluted EPS are calculated by dividing net income attributable to Tutor Perini Corporation by the following: for basic EPS, the weighted-average number of common shares outstanding during the period; and for diluted EPS, the sum of the weighted-average number of both outstanding common shares and potentially dilutive securities, which for the Company can include restricted stock units and unexercised stock options andoptions. Potentially dilutive securities also included the Convertible Notes as(as defined in Note 7. For the year ended December 31, 2019, all potentially dilutive securities were excluded from the calculation of diluted EPS as a result of the net loss for the period. In accordance with ASC 260, Earnings Per Share, the settlement of the principal amount of7) prior to their repayment on June 15, 2021; however, the Convertible Notes has had no impact on diluted EPS because the Company has had the intent and ability to settle the principal amount in cash.EPS. The Company calculates the effect of the potentially dilutive restricted stock units and stock options using the treasury stock method.

Year Ended December 31,

Year Ended December 31,

(in thousands, except per common share data)

2019

2018

2017

(in thousands, except per common share data)202120202019

Net income (loss) attributable to Tutor Perini Corporation

$

(387,690)

$

83,436

$

148,382

Net income (loss) attributable to Tutor Perini Corporation$91,925 $108,394 $(387,690)

Weighted-average common shares outstanding, basic

50,220

49,952

49,647

Weighted-average common shares outstanding, basic51,017 50,656 50,220 

Effect of dilutive restricted stock units and stock options

—

349

1,112

Effect of dilutive restricted stock units and stock options352 421 — 

Weighted-average common shares outstanding, diluted

50,220

50,301

50,759

Weighted-average common shares outstanding, diluted51,369 51,077 50,220 

Net income (loss) attributable to Tutor Perini Corporation per common share:

Net income (loss) attributable to Tutor Perini Corporation per common share:

Basic

$

(7.72)

$

1.67

$

2.99

Basic$1.80 $2.14 $(7.72)

Diluted

$

(7.72)

$

1.66

$

2.92

Diluted$1.79 $2.12 $(7.72)

Anti-dilutive securities not included above

3,640

2,670

798

Anti-dilutive securities not included above1,892 1,862 3,640 

For the year ended December 31, 2019, all outstanding restricted stock units and stock options were excluded from the calculation of weighted-average diluted shares outstanding due to the net loss for the period.
(k) Cash, Cash Equivalents and Restricted Cash

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

As of December 31,

As of December 31,

(in thousands)

2019

2018

(in thousands)20212020

Cash and cash equivalents available for general corporate purposes

$

43,760

$

51,749

Cash and cash equivalents available for general corporate purposes$60,192 $210,841 

Joint venture cash and cash equivalents

149,925

64,326

Joint venture cash and cash equivalents142,005 163,448 

Cash and cash equivalents

193,685

116,075

Cash and cash equivalents202,197 374,289 

Restricted cash

8,416

3,788

Restricted cash9,199 77,563 

Total cash, cash equivalents and restricted cash

$

202,101

$

119,863

Total cash, cash equivalents and restricted cash$211,396 $451,852 

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

Amounts included in restricted

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

As of December 31, 2020, restricted cash also included $69.9 million held to repay the outstanding principal balance of Convertible Notes, which matured and were repaid on June 15, 2021.

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Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(l) Restricted Investments

The Company has restricted investments primarily held as collateral to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit. Restricted investments are primarily comprised of investments in corporate debt securities and U.S. government agency securities and corporate debt securities that are rated A3A3 or better.

(m) Share-Based Compensation

The Company’s long-term incentive plans allow the Company to grant share-based compensation awards in a variety of forms, including restricted stock units, stock options, cash-settled performance stock units (“CPSUs”) and unrestricted stock units and stock options. stock.
Restricted stock units andgive the holder the right to exchange their stock optionsunits for shares of the Company’s common stock on a one-for-one basis. These awards generally vest subject to service, and/performance or performance requirements,market conditions, with related compensation expense equal to the fair value of the award on the date of grant and recognized on a straight-line basis over the requisite period. The fair value of restricted stock units with service or performance-vesting conditions is generally based on the closing price of the Company’s common stock on the New York Stock Exchange (“NYSE”). Certain restricted stock units are classified as liabilities because they contain guaranteed minimum payouts.
Stock options give the holder the right to purchase shares of the Company’s common stock subsequent to the vesting date at a defined exercise price. A stock option exercise price must be equal to or greater than the fair value of the Company’s common stock on the date of the award. The term for stock options is limited to 10 years from the award date. Stock options generally vest subject to certain service, performance or market conditions, with related compensation expense equal to the fair value of the award on the date of grant and recognized on a straight-line basis over the requisite period. The fair value of stock options with service or performance-vesting conditions is generally based on the Black-Scholes model.
CPSUs give the holder the right to exchange their stock units for cash based on the value of the Company’s common stock on the vesting date. These awards vest subject to service and market or performance conditions. CPSUs are classified as liability awards and are remeasured at fair value at the end of each reporting period with the change in fair value recognized in earnings. The fair value of performance-based CPSUs is generally based on the closing price of the Company’s common stock on the NYSE at the measurement date. Since CPSUs are settled in cash and no shares are issued, these awards do not dilute equity.
Certain restricted stock unit, stock option and CPSU awards contain market condition components tied to the Company’s total shareholder return in relation to its peer companies, as calculated over a multi-year performance period (“TSR awards”).The fair value of the market-based awards is estimated using a Monte Carlo simulation model. Significant assumptions used in this simulation model include the Company’s expected volatility, a risk-free rate based on U.S. Treasury yield curve rates with maturities consistent with the performance period, and the volatilities for each of the Company’s peers.
Unrestricted stock awards vest immediately upon grant with related compensation expense equal to the fair value of the award on the date of grant.

The fair value of unrestricted stock is based on the closing price of the Company’s common stock on the NYSE.

For share-basedall awards that havewith only a service requirement,service-based vesting condition, the Company accounts for forfeitures upon occurrence, rather than estimating the probability of forfeiture at the date of grant. Accordingly, the Company recognizes the full grant-date fair value of these awards on a straight-line basis throughout the requisite service period, reversing any expense if, and only if, there is a forfeiture.

For share-basedall awards that have a performance-based vesting requirement,condition, the Company evaluates the probability of achieving the performance criteria quarterly throughout the performance period, and will adjust share-based compensation expense if it estimates that the achievement of the performance criteria is not probable. CertainIn addition, liability awards with a performance-based vesting condition are remeasured at fair value at each reporting period and the compensation expense is adjusted accordingly.
For equity awards containwith a market-based vesting condition, compensation expense is recognized regardless of whether the market condition components andis satisfied, provided that the requisite service period has been completed. Conversely, liability awards with market-based vesting requirements are valued on the date of grantremeasured at fair value at each reporting period using a Monte Carlo simulation model. The fair valuemodel and the compensation expense is adjusted accordingly.
F-12
Table of such awards is expensed ratably over the performance period and is not adjusted for actual achievement.Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(n) Insurance Liabilities

The Company typically utilizes third-party insurance coverage subject to varying deductible levels with aggregate caps on losses retained. The Company assumes the risk for the amount of the deductible portion of the losses and liabilities primarily associated with workers’ compensation and general liability coverage. In addition, on certain projects, the Company assumes the risk for the amount of the deductible portion of losses that arise from any subcontractor defaults. Losses are accrued based upon the Company’s estimates of the aggregate liability for claims incurred using historical experience and certain actuarial assumptions followed in the insurance industry. The estimate of insurance liability within the deductible limits includes an estimate of incurred but not reported claims based on data compiled from historical experience.

(o) 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 years ended December 31, 2019, 20182021, 2020 and 20172019 were as follows:

Year Ended December 31,
202120202019
(in thousands)Before-Tax AmountTax (Expense) BenefitNet-of-Tax AmountBefore-Tax AmountTax (Expense) BenefitNet-of-Tax AmountBefore-Tax AmountTax (Expense) BenefitNet-of-Tax Amount
Other comprehensive income (loss):
Defined benefit pension plan adjustments$8,665 $(2,444)$6,221 $(8,700)$2,439 $(6,261)$1,180 $(336)$844 
Foreign currency translation adjustment(508)183 (325)178 101 279 1,867 (530)1,337 
Unrealized gain (loss) in fair value of investments(3,440)790 (2,650)2,015 (444)1,571 1,982 (421)1,561 
Total other comprehensive income (loss)$4,717 $(1,471)$3,246 $(6,507)$2,096 $(4,411)$5,029 $(1,287)$3,742 
Less: Other comprehensive income attributable to noncontrolling interests(a)
140 — 140 230 — 230 393 — 393 
Total other comprehensive income (loss) attributable to Tutor Perini Corporation$4,577 $(1,471)$3,106 $(6,737)$2,096 $(4,641)$4,636 $(1,287)$3,349 

Year Ended December 31,

2019

2018

2017

(in thousands)

Before-Tax Amount

Tax (Expense) Benefit

Net-of-Tax Amount

Before-Tax Amount

Tax (Expense) Benefit

Net-of-Tax Amount

Before-Tax Amount

Tax (Expense) Benefit

Net-of-Tax Amount

Other comprehensive income (loss):

Defined benefit pension plan adjustments

$

1,180 

$

(336)

$

844 

$

1,079 

$

(308)

$

771 

$

2,416 

$

(992)

$

1,424 

Foreign currency translation adjustment

1,867 

(530)

1,337 

(4,067)

1,122 

(2,945)

2,159 

(886)

1,273 

Unrealized gain (loss) in fair value of investments

1,982 

(421)

1,561 

(1,005)

227 

(778)

(4)

2 

(2)

Total other comprehensive income (loss)

$

5,029 

$

(1,287)

$

3,742 

$

(3,993)

$

1,041 

$

(2,952)

$

4,571 

$

(1,876)

$

2,695 

Less: Other comprehensive income (loss) attributable to noncontrolling interests(a)

393 

—

393 

(221)

—

(221)

—

—

—

Total other comprehensive income (loss) attributable to Tutor Perini Corporation

$

4,636 

$

(1,287)

$

3,349 

$

(3,772)

$

1,041 

$

(2,731)

$

4,571 

$

(1,876)

$

2,695 

_____________________________________________________________________________________________________________

(a)The only component of other comprehensive income (loss) attributable to noncontrolling interests is foreign currency translation.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation during the years ended December 31, 2019, 20182021, 2020 and 20172019 were as follows:

(in thousands)

Defined Benefit Pension Plan

Foreign Currency Translation

Unrealized Gain (Loss) in Fair Value of Investments

Accumulated Other Comprehensive Income (Loss)

Attributable to Tutor Perini Corporation:

Balance as of December 31, 2016

$

(40,865)

$

(4,864)

$

316 

$

(45,413)

Other comprehensive income (loss) before reclassifications

306 

1,273 

(2)

1,577 

Amounts reclassified from AOCI

1,118 

��

—

1,118 

Balance as of December 31, 2017

$

(39,441)

$

(3,591)

$

314 

$

(42,718)

Other comprehensive loss before reclassifications

(695)

(2,724)

(835)

(4,254)

Amounts reclassified from AOCI

1,466 

—

57 

1,523 

Balance as of December 31, 2018

$

(38,670)

$

(6,315)

$

(464)

$

(45,449)

Other comprehensive income (loss) before reclassifications

(539)

944 

1,621 

2,026 

Amounts reclassified from AOCI

1,383 

—

(60)

1,323 

Balance as of December 31, 2019

$

(37,826)

$

(5,371)

$

1,097 

$

(42,100)

(p) Recent Accounting Pronouncements

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

(in thousands)Defined Benefit Pension PlanForeign Currency TranslationUnrealized Gain (Loss) in Fair
Value of Investments		Accumulated Other Comprehensive
Income (Loss)
Attributable to Tutor Perini Corporation:
Balance as of December 31, 2018$(38,670)$(6,315)$(464)$(45,449)
Other comprehensive income (loss) before reclassifications(539)944 1,621 2,026 
Amounts reclassified from AOCI1,383 — (60)1,323 
Balance as of December 31, 2019$(37,826)$(5,371)$1,097 $(42,100)
Other comprehensive income (loss) before reclassifications(7,993)49 1,820 (6,124)
Amounts reclassified from AOCI1,732 — (249)1,483 
Balance as of December 31, 2020$(44,087)$(5,322)$2,668 $(46,741)
Other comprehensive income (loss) before reclassifications4,167 (465)(2,372)1,330 
Amounts reclassified from AOCI2,054 — (278)1,776 
Balance as of December 31, 2021$(37,866)$(5,787)$18 $(43,635)

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The effectssignificant items reclassified out of AOCI and the changes made to the Company’s January 1, 2019 consolidated balance sheet for the adoption of ASC 842 were as follows:

BALANCE SHEET

Balance as of

Adjustments due to

Balance as of

(in thousands)

December 31, 2018(a)

ASC 842

January 1, 2019

ASSETS

Other assets(b)

$

50,523

$

43,273

$

93,796

LIABILITIES

Accrued expenses and other current liabilities(b)

$

174,325

$

11,569

$

185,894

Other long-term liabilities(b)

151,639

31,704

183,343

_____________________________________________________________________________________________________________

(a)Balance as previously reportedcorresponding location and impact on the Company’s Annual Report on Form 10-K forConsolidated Statements of Operations during the yearyears ended December 31, 2018.

(b)Prior to the adoption of ASC 842, operating lease ROU assets2021, 2020 and current and long-term operating lease liabilities were not recorded on the Consolidated Balance Sheets.

The following table presents the impacts of adoption of the new leases standard on the Consolidated Balance Sheet:

As of December 31, 2019

Balance Without

BALANCE SHEET

Adoption of

Effect of

(in thousands)

As Reported

ASC 842

Change

ASSETS

Other assets(a)

$

104,693

$

64,598

$

40,095

LIABILITIES

Accrued expenses and other current liabilities(a)

$

206,533

$

195,341

$

11,192

Other long-term liabilities(a)

199,288

170,373

28,915

_____________________________________________________________________________________________________________

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

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606),2019 are as amended by subsequent ASUs (collectively, “ASC 606”). The Company adopted this ASU effective January 1, 2018 using the modified retrospective transition method. As such, the 2017 comparative information has not been restated and continues to be reported under the accounting standards in effect for that period.

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

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, and issued subsequent amendments to the initial guidance within ASU 2019-04 and ASU 2019-05 (collectively, “ASU 2016-13”). The amendments in ASU 2016-13 replace the incurred loss impairment methodology in current practice with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate credit losses. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its financial position, results of operations or cash flows.

follows:

Location in ConsolidatedYear Ended December 31,
(in thousands)Statements of Operations202120202019
Component of AOCI:
Defined benefit pension plan adjustmentsOther income (expense)$2,861 $2,407 $1,933 
Income tax benefitIncome tax expense (benefit)(807)(675)(550)
Net of tax$2,054 $1,732 $1,383 
Unrealized gain in fair value of investment adjustmentsOther income (expense)$(352)$(315)$(76)
Income tax expenseIncome tax expense (benefit)74 66 16 
Net of tax$(278)$(249)$(60)
(p) Recent Accounting Pronouncements
In December 2019, the FASBFinancial Accounting Standards Board (“FASB”) issued ASUAccounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”), modifying ASCAccounting Standards Codification (“ASC”) 740, Income Taxes (“ASC 740”). The amendments in ASU 2019-12, among other things, remove certain exceptions to the general principles in ASC 740 and seek more consistent application by clarifying and amending the existing guidance. The Company adopted this ASU effective January 1, 2021. The adoption of ASU 2019-12 is effective for interim and annual reporting periods beginning after December 15, 2020. The Company is currently evaluating the new standard, which isdid not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

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Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.    Consolidated Statements of Cash Flows

Below are the changes in other components of working capital, net of balances related to incremental interest acquired in a Civil segment joint venture during 2019 (see Note 13)6), as shown in the Consolidated Statements of Cash Flows, andas well as the supplemental disclosuredisclosures of cash paid for interest, income taxes and income taxes:non-cash investing activities:
Year Ended December 31,
(in thousands)202120202019
(Increase) Decrease in:
Accounts receivable$(31,972)$(104,901)$(81,983)
Retainage receivable78,618 (85,769)(78,520)
Costs and estimated earnings in excess of billings(120,034)(113,190)18,751 
Other current assets62,371 (49,468)(76,146)
(Decrease) Increase in:
Accounts payable(283,482)111,912 53,999 
Retainage payable(46,190)62,954 35,013 
Billings in excess of costs and estimated earnings(77,533)(5,168)245,292 
Accrued expenses and other current liabilities(4,005)13,654 14,851 
Changes in other components of working capital$(422,227)$(169,976)$131,257 
Supplemental disclosures:
Interest paid$63,762 $57,038 $56,137 
Income taxes paid (refunded), net$(8,299)$11,204 $43,374 
Non-cash investing activities:
Real property acquired in settlement of a receivable$— $11,660 $— 
Receivable recognized from sale of subsidiary$4,163 $— $— 
F-14
Table of Contents

Year Ended December 31,

(in thousands)

2019

2018

2017

(Increase) Decrease in:

Accounts receivable

$

(81,983)

$

3,899

$

(91,062)

Retainage receivable

(78,520)

56,754

33,453

Costs and estimated earnings in excess of billings

18,751

(209,537)

(100,932)

Other current assets

(76,146)

15,398

(19,718)

(Decrease) Increase in:

Accounts payable

53,999

(78,243)

(35,751)

Retainage payable

35,013

(49,864)

3,526

Billings in excess of costs and estimated earnings

245,292

76,703

125,757

Accrued expenses and other current liabilities

14,851

28,046

24,513

Changes in other components of working capital

$

131,257

$

(156,844)

$

(60,214)

Cash paid during the year for:

Interest

$

56,137

$

51,063

$

50,443

Income taxes

$

43,374

$

13,652

$

39,776

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3.    Revenue

Disaggregation of Revenue

The following tables disaggregate revenue by end market, customer type and contract type, which the Company believes best depict how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors for the years ended December 31, 20192021, 2020 and 2018.

2019.

Year Ended December 31,

Year Ended December 31,

(in thousands)

2019

2018

(in thousands)202120202019

Civil segment revenue by end market:

Civil segment revenue by end market:

Mass transit

$

992,755

$

702,614

Mass transit (includes certain transportation and tunneling projects)Mass transit (includes certain transportation and tunneling projects)$1,417,196 $1,367,412 $992,755 

Bridges

334,117

431,202

Bridges238,345 306,161 334,117 

Tunneling

128,229

103,980

Military defense facilitiesMilitary defense facilities194,701 146,969 59,082 
WaterWater98,739 101,705 33,370 

Highways

86,747

202,423

Highways55,666 122,254 86,747 

Other

237,504

145,874

Other91,113 155,398 273,281 

Total Civil segment revenue

$

1,779,352

$

1,586,093

Total Civil segment revenue$2,095,760 $2,199,899 $1,779,352 

Year Ended December 31,

Year Ended December 31,

(in thousands)

2019

2018

(in thousands)202120202019

Building segment revenue by end market:

Building segment revenue by end market:

Commercial and industrial facilities

$

459,806

$

374,312

Commercial and industrial facilities$352,265 $580,297 $459,806 

Hospitality and gaming

297,700

301,871

Hospitality and gaming338,998 474,329 297,700 

Municipal and government

254,736

261,496

Municipal and government291,629 287,337 254,736 
Education facilitiesEducation facilities159,929 173,472 143,382 
Mass transit (includes transportation projects)Mass transit (includes transportation projects)130,923 218,930 201,400 

Health care facilities

239,299

428,819

Health care facilities64,042 117,968 239,299 

Mass transit

201,400

67,588

Education facilities

143,382

145,147

Mixed use

31,685

150,549

Other

114,032

131,917

Other90,316 132,308 145,717 

Total Building segment revenue

$

1,742,040

$

1,861,699

Total Building segment revenue$1,428,102 $1,984,641 $1,742,040 

Year Ended December 31,
(in thousands)202120202019
Specialty Contractors segment revenue by end market:
Mass transit (includes certain transportation and tunneling projects)$588,162 $592,430 $419,402 
Commercial and industrial facilities139,751 152,868 186,819 
Multi-unit residential133,085 139,924 83,903 
Water90,887 73,769 37,403 
Education facilities50,572 44,762 70,229 
Mixed use44,660 47,022 64,302 
Other70,851 83,448 67,382 
Total Specialty Contractors segment revenue$1,117,968 $1,134,223 $929,440 
Year Ended December 31, 2021
(in thousands)CivilBuildingSpecialty
Contractors		Total
Revenue by customer type:
State and local agencies$1,791,531 $363,686 $481,255 $2,636,472 
Federal agencies205,080 189,508 47,724 442,312 
Private owners99,149 874,908 588,989 1,563,046 
Total revenue$2,095,760 $1,428,102 $1,117,968 $4,641,830 

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Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 2020
(in thousands)CivilBuildingSpecialty
Contractors		Total
Revenue by customer type:
State and local agencies$1,875,653 $534,449 $533,768 $2,943,870 
Federal agencies175,933 143,327 75,067 394,327 
Private owners148,313 1,306,865 525,388 1,980,566 
Total revenue$2,199,899 $1,984,641 $1,134,223 $5,318,763 

Year Ended December 31,

(in thousands)

2019

2018

Specialty Contractors segment revenue by end market:

Mass transit

$

419,402

$

296,092

Commercial and industrial facilities

186,819

189,632

Multi-unit residential

83,903

81,023

Education facilities

70,229

99,214

Mixed use

64,302

163,308

Health care facilities

29,519

52,392

Transportation

7,756

83,551

Other

67,510

41,658

Total Specialty Contractors segment revenue

$

929,440

$

1,006,870

Year Ended December 31, 2019
(in thousands)CivilBuildingSpecialty
Contractors		Total
Revenue by customer type:
State and local agencies$1,401,001 $573,049 $496,195 $2,470,245 
Federal agencies116,869 153,467 11,326 281,662 
Private owners261,482 1,015,524 421,919 1,698,925 
Total revenue$1,779,352 $1,742,040 $929,440 $4,450,832 

Year Ended December 31, 2019

Year Ended December 31, 2018

Specialty

Specialty

(in thousands)

Civil

Building

Contractors

Total

Civil

Building

Contractors

Total

Revenue by customer type:

State and local agencies

$

1,401,001 

$

573,049 

$

496,195 

$

2,470,245 

$

1,294,630 

$

617,133 

$

406,782 

$

2,318,545 

Federal agencies

116,869 

153,467 

11,326 

281,662 

95,567 

201,745 

53,335 

350,647 

Private owners

261,482 

1,015,524 

421,919 

1,698,925 

195,896 

1,042,821 

546,753 

1,785,470 

Total revenue

$

1,779,352 

$

1,742,040 

$

929,440 

$

4,450,832 

$

1,586,093 

$

1,861,699 

$

1,006,870 

$

4,454,662 

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

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

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

Most federal, state and local government contracts contain provisions that permit the termination of contracts, in whole or in part, for the convenience of government customers, among other reasons.
Year Ended December 31, 2021
(in thousands)CivilBuildingSpecialty
Contractors		Total
Revenue by contract type:
Fixed price$1,815,079 $336,128 $988,941 $3,140,148 
Guaranteed maximum price2,854 888,345 14,505 905,704 
Unit price268,377 (1,373)96,782 363,786 
Cost plus fee and other9,450 205,002 17,740 232,192 
Total revenue$2,095,760 $1,428,102 $1,117,968 $4,641,830 
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Table of Contents

Year Ended December 31, 2019

Year Ended December 31, 2018

Specialty

Specialty

(in thousands)

Civil

Building

Contractors

Total

Civil

Building

Contractors

Total

Revenue by contract type:

Fixed price

$

1,315,195 

$

561,831 

$

769,410 

$

2,646,436 

$

1,054,473 

$

377,538 

$

857,742 

$

2,289,753 

Guaranteed maximum price

6,951 

752,110 

21,291 

780,352 

15,709 

1,040,093 

62,132 

1,117,934 

Unit price

436,015 

12,063 

91,803 

539,881 

469,305 

32,468 

32,562 

534,335 

Cost plus fee and other

21,191 

416,036 

46,936 

484,163 

46,606 

411,600 

54,434 

512,640 

Total revenue

$

1,779,352 

$

1,742,040 

$

929,440 

$

4,450,832 

$

1,586,093 

$

1,861,699 

$

1,006,870 

$

4,454,662 

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Year Ended December 31, 2020
(in thousands)CivilBuildingSpecialty
Contractors		Total
Revenue by contract type:
Fixed price$1,792,765 $508,655 $1,010,973 $3,312,393 
Guaranteed maximum price1,829 1,136,782 15,417 1,154,028 
Unit price392,548 867 83,257 476,672 
Cost plus fee and other12,757 338,337 24,576 375,670 
Total revenue$2,199,899 $1,984,641 $1,134,223 $5,318,763 
Year Ended December 31, 2019
(in thousands)CivilBuildingSpecialty
Contractors		Total
Revenue by contract type:
Fixed price$1,315,195 $561,831 $769,410 $2,646,436 
Guaranteed maximum price6,951 752,110 21,291 780,352 
Unit price436,015 12,063 91,803 539,881 
Cost plus fee and other21,191 416,036 46,936 484,163 
Total revenue$1,779,352 $1,742,040 $929,440 $4,450,832 
Fixed price. Fixed price or lump sum contracts are most commonly used for projects in the Civil and Specialty Contractors segments and generally commit the Company to provide all of the resources required to complete a project for a fixed sum. Usually, fixed price contracts transfer more risk to the Company, but offer the opportunity for greater profits. Billings on fixed price contracts are typically based on estimated progress against predetermined contractual milestones.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

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

Changes in Contract Estimates that Impact Revenue

Changes to the total estimated contract revenue or cost 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 year ended December 31, 2021 related to performance obligations satisfied (or partially satisfied) in prior periods by a net $37.5 million for various projects. Revenue was negatively impacted during the year ended December 31, 2020 related to performance obligations satisfied (or partially satisfied) in prior periods by a net $77.0 million for various projects. Revenue was negatively impacted during the year ended December 31, 2019 related to performance obligations satisfied (or partially satisfied) in prior periods by a net $177.5 million for various projects, none of which was individually material, except forincluding a $123.9 million revenue impact that resulted from the charge related to the Alaskan Way Viaduct matterMatter discussed in Note 8. Revenue recognized during the year ended December 31, 2018 related to performance obligations satisfied (or partially satisfied) in prior periods was $19.4 million for various projects, none
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Table of which was individually material.Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 December 31, 2019, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $5.2 billion, $2.2 billion and $2.2 billion for the Civil, Building and Specialty Contractors segments, respectively. As of December 31, 2018,2021, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $4.6 billion, $2.3$2.2 billion and $1.7$1.3 billion for the Civil, Building and Specialty Contractors segments, respectively. As of December 31, 2020, 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 $1.8 billion for the Civil, Building and Specialty Contractors segments, respectively. The Company typically recognizes revenue on Civil segment projects over a period of three to five years, whereas for projects in the Building and Specialty Contractors segments, the Company typically recognizes revenue over a period of one to three years.

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Table of Contents

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4.    Contract Assets and Liabilities

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

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

As of December 31,

As of December 31,

(in thousands)

2019

2018

(in thousands)20212020

Retainage receivable

$

562,375

$

478,744

Retainage receivable$568,881 $648,441 

Costs and estimated earnings in excess of billings:

Costs and estimated earnings in excess of billings:

Claims

705,993

698,274

Claims833,352 752,783 

Unapproved change orders

362,264

354,000

Unapproved change orders418,054 415,489 

Other unbilled costs and profits

55,287

90,021

Other unbilled costs and profits105,362 68,462 

Total costs and estimated earnings in excess of billings

1,123,544

1,142,295

Total costs and estimated earnings in excess of billings1,356,768 1,236,734 

Capitalized contract costs

80,294

37,404

Capitalized contract costs69,027 74,452 

Total contract assets

$

1,766,213

$

1,658,443

Total contract assets$1,994,676 $1,959,627 

Retainage receivable represents amounts invoiced to customers where payments have been partially withheld pending the completion of certain milestones, satisfaction of other contractual conditions or the completion of the project. Retainage agreements vary from project to project and balances could be outstanding for several months or years depending on a number of circumstances, such as contract-specific terms, project performance and other variables that may arise as the Company makes progress towardstoward completion. As of December 31, 2019,2021, the amount of retainage receivable estimated by management to be collected beyond one year is approximately 39%31% 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 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 8, 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
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TUTOR PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
earnings in excess of billings as of December 31, 20192021 estimated by management to be collected beyond one year is approximately $572.1$795.2 million.

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, and are included in other current assets.contract. Capitalized contract costs are generally expensed to the associated contract over the period of anticipated use on the project. During the yearyears ended December 31, 2021, 2020 and 2019, and 2018, $33.8$47.3 million, $46.7 million and $16.3$33.8 million, respectively, of previously capitalized contract costs were amortized and recognized as expense on the related contracts.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

As of December 31,

As of December 31,

(in thousands)

2019

2018

(in thousands)20212020

Retainage payable

$

252,181

$

211,956

Retainage payable$268,945 $315,135 

Billings in excess of costs and estimated earnings

844,389

573,190

Billings in excess of costs and estimated earnings761,689 839,222 

Total contract liabilities

$

1,096,570

$

785,146

Total contract liabilities$1,030,634 $1,154,357 

Retainage payable represents amounts invoiced to the Company by subcontractors where payments have been partially withheld pending the completion of certain milestones, other contractual conditions or upon the completion of the project. Generally, retainage payable is not remitted to subcontractors until the associated retainage receivable from customers is collected. As of December 31, 2019,2021, the amount of retainage payable estimated by management to be remitted beyond one year is approximately 28%24% 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 yearyears ended December 31, 20192021, 2020 and 20182019 and included in the opening billings in excess of costs and estimated earnings balances for each period totaled $638.7 million, $690.7 million and $479.6 million, and $382.7 million, respectively.

5.    Income Taxes

Income (loss) before income taxes is summarized as follows:

Year Ended December 31,

(in thousands)

2019

2018

2017

United States operations

$

(456,403)

$

106,222

$

135,177

Foreign and U.S. territory operations

30,569

26,391

18,798

Total

$

(425,834)

$

132,613

$

153,975

The income tax (benefit) expense is as follows:

Year Ended December 31,

(in thousands)

2019

2018

2017

Current expense:

Federal

$

(2,884)

$

21,055

$

12,329

State

3,585

8,676

6,763

Foreign and U.S. territories

5,299

5,550

3,435

Total current expense

6,000

35,281

22,527

Deferred (benefit) expense:

Federal

(43,579)

(1,773)

(30,021)

State

(27,566)

1,278

5,560

Foreign and U.S. territories

(464)

46

1,365

Total deferred (benefit) expense

(71,609)

(449)

(23,096)

Total (benefit) expense

$

(65,609)

$

34,832

$

(569)

Year Ended December 31,
(in thousands)202120202019
United States operations$118,749 $138,426 $(456,403)
Foreign and U.S. territory operations41,033 35,853 30,569 
Total$159,782 $174,279 $(425,834)

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The income tax expense (benefit) is as follows:

Year Ended December 31,
(in thousands)202120202019
Current expense (benefit):
Federal$20,052 $(36,159)$(2,884)
State7,899 (1,282)3,585 
Foreign and U.S. territories11,568 11,130 5,299 
Total current expense (benefit):39,519 (26,311)6,000 
Deferred expense (benefit):
Federal(13,667)38,667 (43,579)
State36 10,608 (27,566)
Foreign and U.S. territories(256)(1,022)(464)
Total deferred expense (benefit):(13,887)48,253 (71,609)
Total expense (benefit):$25,632 $21,942 $(65,609)
The following table is a reconciliation of the Company’s income tax provision at the statutory ratesfederal tax rate to the income tax (benefit) expense at the Company’s effective tax rate:

Year Ended December 31,

Year Ended December 31,

2019

2018

2017

202120202019

(dollars in thousands)

Amount

Rate

Amount

Rate

Amount

Rate

(dollars in thousands)AmountRateAmountRateAmountRate

Federal income tax (benefit) expense at statutory tax rate

$

(89,425)

21.0

%

$

27,849

21.0

%

$

53,892

35.0

%

Federal income tax expense (benefit) at statutory tax rateFederal income tax expense (benefit) at statutory tax rate$33,554 21.0 %$36,599 21.0 %$(89,425)21.0 %

State income taxes, net of federal tax benefit

(18,442)

4.3

9,011

6.8

7,753

5.0

State income taxes, net of federal tax benefit8,301 5.2 8,518 4.9 (18,442)4.3 

Stock based compensation

1,706

(0.4)

—

—

—

—

Stock based compensation87 0.1 3,185 1.8 1,706 (0.4)

Impact of federal tax law change

—

—

211

0.2

(53,348)

(34.6)

Impact of federal tax law changesImpact of federal tax law changes— — (14,476)(8.3)— — 

Officers' compensation

2,938

(0.7)

3,078

2.3

2,622

1.7

Officers' compensation3,664 2.3 2,486 1.4 2,938 (0.7)

Goodwill impairment

43,990

(10.3)

—

—

—

—

Goodwill impairment— — — — 43,990 (10.3)

Domestic production activities deduction

—

—

—

—

(2,668)

(1.7)

Noncontrolling interests

(6,064)

1.4

(3,232)

(2.4)

(2,137)

(1.4)

Noncontrolling interests(8,872)(5.6)(9,799)(5.6)(6,064)1.4 

Federal R&D credits

(3,998)

0.9

(2,658)

(2.0)

(470)

(0.4)

Federal R&D credits(1,105)(0.7)(3,007)(1.7)(3,998)0.9 

Reversal of reserve for uncertain tax positions and taxes payable due to statute expirations

(773)

0.2

(1,958)

(1.5)

(4,337)

(2.8)

Foreign tax differences

4,940

(1.2)

(19)

—

(389)

(0.3)

Foreign tax rate differencesForeign tax rate differences(625)(0.4)1,491 0.9 4,940 (1.2)
Federal claim of right creditFederal claim of right credit(8,191)(5.1)— — — — 

Other

(481)

0.2

2,550

1.9

(1,487)

(0.9)

Other(1,181)(0.8)(3,055)(1.8)(1,254)0.4 

Income tax (benefit) expense

$

(65,609)

15.4

%

$

34,832

26.3

%

$

(569)

(0.4)

%

Income tax expense (benefit)Income tax expense (benefit)$25,632 16.0 %$21,942 12.6 %$(65,609)15.4 %

The Company’s provision for income taxes and effective tax rate for the year ended December 31, 2021 was favorably impacted by a federal claim of right tax credit resulting in a tax rate adjustment associated with an adverse 2019 jury verdict that rendered certain income recognized in 2016 to be uncollectible.
The Company's provision for income taxes and effective tax rate for the year ended December 31, 2020 was significantly impacted by a change in tax law. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. A major provision of the CARES Act allows net operating losses from the 2018, 2019 and 2020 tax years to be carried back up to five years. As a result, for the year ended December 31, 2020, the Company was able to recognize tax benefits in excess of the current federal statutory rate of 21% due to the effects of carrying back its net operating loss arising in 2019 to tax years in which the federal statutory rate was 35%.
The Company’s provision for income taxes and effective tax rate for the year ended December 31, 2019 was significantly impacted by the goodwill impairment charge discussed in Note 6. Of the total goodwill impairment charge of $379.9 million, approximately $209.5 million pertained to goodwill that iswas not tax deductible and yielded permanent differences between
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TUTOR PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
book income and taxable income. For the year ended December 31, 2019, the Company recognized U.S. federal and state tax benefits totaling $49.4 million as a result of the impairment charge.

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act of 2017 (“TCJA”) which made broad and complex changes to the U.S. tax code that impact the Company’s financial statements, including, but not limited to, a permanent decrease in the corporate federal statutory income tax rate from 35% to 21%, effective January 1, 2018, and a one-time transition tax from the inclusion of foreign earnings. Future distributions from foreign subsidiaries, however, are no longer subject to federal income tax.

As a result of the TCJA, the Company recognized an income tax benefit of $53.3 million in 2017, primarily due to the remeasurement of deferred tax assets and liabilities based on the reduced corporate federal statutory income tax rate of 21%.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following is a summary of the significant components of the deferred tax assets and liabilities:

As of December 31,

As of December 31,

(in thousands)

2019

2018

(in thousands)20212020

Deferred tax assets:

Deferred tax assets:

Timing of expense recognition

$

44,761

$

20,832

Timing of expense recognition$28,710 $24,470 

Net operating losses

23,711

8,611

Net operating losses15,824 19,968 

Goodwill

26,658

—

Goodwill11,698 19,315 

Other, net

17,098

18,828

Other, net13,125 10,155 

Deferred tax assets

112,228

48,271

Deferred tax assets69,357 73,908 

Valuation allowance

(2,212)

(1,150)

Net deferred tax assets

110,016

47,121

Deferred tax liabilities:

Deferred tax liabilities:

Intangible assets, due primarily to purchase accounting

(15,309)

(36,862)

Intangible assets, due primarily to purchase accounting(16,453)(15,212)

Fixed assets, due primarily to purchase accounting

(75,461)

(75,998)

Fixed assetsFixed assets(70,128)(76,567)

Construction contract accounting

(13,464)

(9,435)

Construction contract accounting(9,196)(9,769)

Joint ventures

(24,331)

(9,853)

Joint ventures(26,764)(41,669)

Other

(16,567)

(20,411)

Other(15,672)(11,962)

Deferred tax liabilities

(145,132)

(152,559)

Deferred tax liabilities(138,213)(155,179)

Net deferred tax liabilities

$

(35,116)

$

(105,438)

Net deferred tax liabilities$(68,856)$(81,271)

As of December 31, 2019,2021, the Company had federal and various state net operating loss carryforwards for income tax purposes of $29.3in various states totaling $166.0 million and $184.8 million, respectively. Federal net operating loss carryforwards do not have expiration dates, whereas the state net operating loss carryforwards havewith expiration dates ranging from 2022 to 2038.2040. As of December 31, 2019,2020, the Company hashad net operating loss carryforwards in various states totaling $196.5 million. As of December 31, 2021, the Company had federal and state tax credit carryforwards for income tax purposes of approximately $6.0$0.1 million and $1.2$2.6 million, respectively.

The netdeferred As of December 31, 2020, the Company had federal and state taxliabilities credit carryforwards of approximately $1.4 million and $2.0 million, respectively.

The net deferred tax liabilities are presented intheConsolidatedBalancein the Consolidated Balance Sheets as follows:

As of December 31,

As of December 31,

(in thousands)

2019

2018

(in thousands)20212020

Deferred tax assets

$

570

$

83

Deferred tax assets$2,133 $1,695 

Deferred tax liabilities

(35,686)

(105,521)

Deferred tax liabilities(70,989)(82,966)

Net deferred tax liabilities

$

(35,116)

$

(105,438)

Net deferred tax liabilities$(68,856)$(81,271)

Since the enactment of the TCJA, the Company no longer intends to permanently reinvest in its foreign subsidiaries. Consequently, the Company now provides deferred income taxes and foreign withholding taxes related to its foreign subsidiaries.

The Company’s policy is to record interest and penalties on unrecognized tax benefits as an element of income tax expense. The cumulative amounts related to interest and penalties are added to the total unrecognized tax liabilities on the balance sheet. The total amount of gross unrecognized tax benefits as of December 31, 20192021 that, if recognized, would affectimpact the effective tax rate is $5.7$7.5 million. The Company does not expect any significant release of unrecognized tax benefits within the next twelve months.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company accounts for its uncertain tax positions in accordance with GAAP. The following is a reconciliation of the beginning and ending amounts of these unrecognized tax benefits for the three years ended December 31, 2019:

2021:

As of December 31,

As of December 31,

(in thousands)

2019

2018

2017

(in thousands)202120202019

Beginning balance

$

4,998

$

6,495

$

7,574

Beginning balance$8,681 $5,682 $4,998 

Change in tax positions of prior years

351

(302)

(1,207)

Change in tax positions of prior years(1,319)2,286 351 

Change in tax positions of current year

1,106

763

128

Change in tax positions of current year1,000 1,202 1,106 

Reduction in tax positions for statute expirations

(773)

(1,958)

—

Reduction in tax positions for statute expirations(823)(489)(773)

Ending Balance

$

5,682

$

4,998

$

6,495

Ending balanceEnding balance$7,539 $8,681 $5,682 

The Company conducts business internationally and, as a result, one or more of its subsidiaries files income tax returns in U.S. federal, U.S. state and certain foreign jurisdictions. Accordingly, in the normal course of business, the Company is subject to examination by taxing authorities principally throughout the United States, Guam and Canada. The Company is subject toCompany's open tax years for a U.S. federal income tax

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

audit for fiscal years 2016are 2018 and later, although therelater. The 2018 federal income tax return is currently nounder audit being conducted by the Internal Revenue Service. The Company has various years open to audit in a number of state and local jurisdictions and is currently under audit by certainvarious state and local taxing authorities.

6.    Goodwill and Intangible Assets

Goodwill

The following table presents the changes in the carrying amount of goodwill since its inception through December 31, 2019:

2021:
(in thousands)CivilBuildingSpecialty
Contractors		Total
Gross goodwill as of December 31, 2019$492,074 $424,724 $156,193 $1,072,991 
Accumulated impairment as of December 31, 2019(286,931)(424,724)(156,193)(867,848)
Goodwill as of December 31, 2019205,143 — — 205,143 
2020 activity— — — — 
Goodwill as of December 31, 2020205,143 — — 205,143 
Current year activity— — — — 
Goodwill as of December 31, 2021(a)
$205,143 $— $— $205,143 

Specialty

(in thousands)

Civil

Building

Contractors

Total

Gross goodwill

$

492,074

$

424,724

$

156,193

$

1,072,991

Accumulated impairment

(76,716)

(411,269)

—

(487,985)

Balance as of December 31, 2018

415,358

13,455

156,193

585,006

Second quarter 2019 impairment

(210,215)

(13,455)

(156,193)

(379,863)

Balance as of December 31, 2019(a)

$

205,143

$

—

$

—

$

205,143

_____________________________________________________________________________________________________________

(a)As of December 31, 2019,2021, accumulated impairment was $867.8 million.

The net changeCompany performed its annual impairment test in the fourth quarter of 2021 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 amountamount.
The Company will continue to monitor events and circumstances for changes that indicate the Civil reporting unit goodwill would need to be reevaluated for impairment during future interim periods prior to the annual impairment test. These future events and circumstances include, but are not limited to, changes in the overall financial performance of goodwillthe 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 the year ended December 31,possible impairment.
Second Quarter of 2019 was primarily due to a goodwill impairment charge of $379.9 million recorded inGoodwill Impairment
In the second quarter of 2019. In connection with the preparation of its quarterly financial statements during the second quarter of 2019,, the Company assessedrecognized a non-cash impairment loss totaling $379.9 million, of which $210.2 million, $13.5 million and $156.2 million was in the changes in circumstances that occurred during the quarter to determine whether it was more likely than not that the fair values of any of its reporting units were below their carrying amounts.Civil, Building and Specialty Contractors segments, respectively. While there was no single determinative event or factor, potential triggering events identified in the accounting guidance (ASC 350, Intangibles – Goodwill and Other) developed during the second quarter of 2019, which led to the Company to conclude that, when considering the events and factors in totality, it was more likely than not that the fair values of each of its reporting units were below their carrying amounts. The triggering factorsimpairment conclusion included:

•The Company faced a declining stock price and observed a sustained decrease subsequent to the filing of the Company’s first quarter Form 10-Q on May 8, 2019, in both absolute terms and relative to its peers. Consistent with the average stock prices of companies in its peer group, the Company’s stock price had been trending lower over

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TUTOR PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
several prior periods; however, during the second quarter of 2019, the Company’s stock price dropped to a 52-week low while the average stock price of companies in its peer group increased. The Company believesbelieved that delays experienced in resolving certain claims and unapproved change orders, which when combined with the increased working capital needs and significant negative operating cash flows in the first quarter of 2019, hashad contributed significantly to the sustained decrease in the Company’s stock price;

•The Company experienced significant negative operating cash flows from each of its reporting units in the first quarter of 2019, and that trend continued at the beginning of the second quarter; and

•The Company’s debt rating was downgraded by a major credit rating agency on May 17, 2019.

As

When performing the Company determined that it was more likely than not that the fair values of its reporting units were below their carrying amounts, the Company performed an interim goodwill impairment test as of June 1, 2019 (the “Interim Test”) and, as described below, recognized a non-cash impairment loss totaling $379.9 million.

The decrease in the Company’s stock price reduced its total market capitalization and increased the implied control premium to a level beyond observable market-comparable data. As a result, when performing the Interim Test, the Company increased the discount rates and the projected investments in working capital compared to the assumptions used in the previous October 1, 2018 test, which extended the timing of certain expected future cash flows in the calculation of fair value under the income-based approach. The Company believes these changes were consistent with market participant inputs as reflected in the decrease in the Company’s market valuation at that time.

Consistent with the previous October 1, 2018 test,, the Company utilized a weighted-averageweighted average of (1) an income approach and (2) a market approach to determine the fair value of the Company and each of its reporting units for the Interim Test. The income approach was based on estimated present value of future cash flows for each reporting unit. The market approach was based on assumptions about how market data relates to each reporting unit. The weighting of these two approaches was based on their individual correlation to the economics of each reporting unit as impacted by factors such as the availability of comparable market data for each reporting unit.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Assessing impairment inherently involves management judgments as to the assumptions used to calculate fair value of the reporting units and the impact of market conditions on those assumptions. The key inputs that the Company uses in its assumptions to estimate the fair value of its reporting units under the income-based approach are as follows:

•Weighted-average cost of capital (“WACC”), the risk-adjusted rate used to discount the projected cash flows;

•Cash flows generated from existing work and new awards; and

•Projected operating margins.

Expected future after-tax operating cash flows of each reporting unit are discounted to a present value using a risk-adjusted discount rate. Estimates of future cash flows require management to make significant assumptions concerning future operating performance including cash flows generated from existing work and new awards, projected operating margins, variations in the amount and timing of cash flows and the probability of achieving the estimated cash flows, as well as future economic conditions, which may differ from actual future cash flows. The discount rate, which is intended to reflect the risks inherent in future cash flow projections, used in estimating the present value of future cash flows, is based on estimates of the WACC of market participants relative to the reporting units. Financial and credit market volatility can directly impact certain inputs and assumptions used to develop the WACC.

To develop the cash flows generated from new awards and future operating margins, the Company tracks known prospects of significance for each of its reporting units and considers the estimated timing of when the work is expected to be bid, started and completed. The Company also gives consideration to its relationships with the prospective owners; the pool of competitors that are capable of performing large, complex work; business strategy; and the Company’s history of success in winning new work in each reporting unit. With regard to operating margins, the Company gives consideration to its historical reporting unit operating margins in the end markets that the prospective work opportunities are most significant, expected margins from existing work, current market trends in recent new work procurement, and business strategy.

The Company also estimated the fair value of its reporting units under a market-based approach by applying industry-comparable multiples of revenues and operating earnings to its reporting units’ revenues and operating earnings. The conditions and prospects of companies in the engineering and construction industry depend on common factors such as overall demand for services.

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The Company believes that the discount rates, timingTable of cash flows and other inputs and assumptions used in the Interim Test were consistent with those that a market participant would use based on the events described above which occurred during the second quarter of 2019 and were reflectiveContents

TUTOR PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Intangible Assets
Intangible assets consist of the market assessment of the fair value of its reporting units at that time. following:
As of December 31, 2021Weighted-Average Amortization Period
(in thousands)CostAccumulated
Amortization		Accumulated Impairment ChargeCarrying Value
Trade names (non-amortizable)$117,600 $— $(67,190)$50,410 Indefinite
Trade names (amortizable)(a)
69,250 (23,650)(23,232)22,368 20 years
Contractor license6,000 — (6,000)— N/A
Customer relationships39,800 (23,053)(16,645)102 12 years
Construction contract backlog149,290 (137,102)— 12,188 3 years
Total$381,940 $(183,805)$(113,067)$85,068 
___________________________________________________________________________________________________________
(a)In addition,2021, the Company believes that its estimates and assumptions about future revenues and margin projections in the Interim Test were reasonable and consistent with the estimates and assumptions used in the annual goodwill impairment test as of October 1, 2018. Assold an additional step to corroborate the Interim Test results, the Company compared its implied control premium with those of recent comparable market transactions and concluded that the implied control premium was within the range of control premiums observed in prior industry-specific M&A transactions.

The assumption changes described above were relatively larger in the Specialty Contractors reporting unit than in the Civil or Building reporting units, as Specialty Contractorsimmaterial subsidiary, which had not met recent market expectations at the time of the Interim Test.

Subsequent to the Interim Test, the Company performed its annual impairment test in the fourth quarter of 2019 using a weighted-average of an income and a market approach. These approaches utilize various valuation assumptions, and small changes to the assumptions could have a significant impact on the concluded fair value. Based on this assessment, the Company concluded goodwill was not impaired since the estimated fair value of the Civil reporting unit exceeded its carrying value; therefore, no further adjustment to goodwill was necessary. In addition, no events or circumstances have occurred since the annual test that would indicate any additional impairment of goodwill.

Intangible Assets

As of December 31, 2019 and 2018, the Company had the following: (1) non-amortizable trade names with a carrying value of $50.4 million; (2) amortizable trade names with a gross cost of $5.1 million and a carrying value of $51.1$2.6 million and accumulated amortization asat the time of December 31, 2019 and 2018 of $21.3 million and $18.8 million, respectively; (3) amortizable customer relationships with a gross carrying value of $23.2 million and accumulated amortization as of December 31, 2019 and 2018 of $21.0 million and $sale.20.0 million, respectively; and (4) amortizable construction contract backlog with a gross carrying value as of December 31, 2019 and 2018 of $149.3 million and $73.7 million, respectively, and accumulated amortization as of December 31, 2019 and 2018 of $76.4 million and $73.7, respectively. The increase in amortizable construction contract backlog of $75.6 million is due to the acquisition of an additional interest in a joint venture, as discussed in Note 13.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2020Weighted-Average Amortization Period
(in thousands)CostAccumulated
Amortization		Accumulated Impairment ChargeCarrying Value
Trade names (non-amortizable)$117,600 $— $(67,190)$50,410 Indefinite
Trade names (amortizable)74,350 (23,754)(23,232)27,364 20 years
Contractor license6,000 — (6,000)— N/A
Customer relationships39,800 (22,103)(16,645)1,052 12 years
Construction contract backlog149,290 (105,001)— 44,289 3 years
Total$387,040 $(150,858)$(113,067)$123,115 

Amortization expense related to amortizable intangible assets was $6.2$35.5 million, $32.2 million and $3.5$6.2 million for the years ended December 31, 2021, 2020 and 2019, respectively. The increase in amortization expense in 2021 and 2020, compared to 2019, was due to the acquisition of an additional 25% interest in a Civil segment joint venture during the fourth quarter of 2019, which increased the Company’s ownership interest from 50% to 75% and gave it a controlling financial interest in the joint venture, thereby requiring consolidation by the Company. The transaction was accounted for as a business combination achieved in stages, and under ASC 805, Business Combinations, the previously held equity interest in the joint venture was remeasured at the acquisition date fair value. The transaction resulted in a gain of $37.8 million recognized in earnings, which was included in general and administrative expenses in the Company’s Consolidated Statement of Operations in 2019, and 2018, respectively. in the recording of an intangible asset for construction contract backlog of $75.6 million, which is amortized as the related contract backlog is recognized as revenue.

Future amortization expense related to amortizable intangible assets for the years 2020, 2021 and 2022 will be approximately $31.2$14.5 million $31.1for 2022, $2.2 million and $20.2 million, respectively, and $2.5 millionper year for the years 2023 through 2026, and 2024.

The weighted-average amortization period for amortizable trade names, customer relationships and construction contract backlog is approximately 20 years, 12 years and 3 years, respectively.

In conjunction with its Interim Test for goodwill during the second quarter of 2019, the Company also evaluated its non-amortizable trade names for potential impairment due to the second quarter triggering factors related to goodwill mentioned above. $11.4 million thereafter.

The Company performed its interimannual impairment test by comparing the carrying value of its indefinite-lived intangible assets to their calculated fair value, which is determined by the income approach (relief from royalty method). This income-based valuation approach involves similar key assumptions to the goodwill impairment analysis discussed above. The interim impairment test performed in the second quarter of 2019 resulted in an estimated fair value for the non-amortizable trade names that substantially exceeded their respective net book values; therefore, no impairment charge was necessary for the second quarter. While the key assumptions used in the impairment test of the non-amortizable trade names are similar to those used in the evaluation of goodwill, historically, the headroom (the excess of calculated fair value over carrying value) has been relatively higher for non-amortizable trade names than for goodwill. Unlike goodwill, trade names possess inherent value based on market perception which is valued considering the cost savings available through ownership and the avoidance of paying royalties associated with revenue generation. The discounted value is not impacted by cash flow related assumptions such as working capital investment. Consequently, goodwill was impaired while the non-amortizable trade name intangible assets were not.

The Company also performed an annual impairment assessment of its non-amortizable trade names induring the fourth quarter of 2019 using a qualitative approach to determine whether conditions existed to indicate that it is more likely than not that the fair value of trade names is less than their carrying values.2021. Based on this assessment, the Company concluded that it was more likely than not that the fair value of theits non-amortizable trade names was greaterwere 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 the future cash flows generated by the assets might be less than theirthe assets’ net carrying values, and therefore a quantitative analysis was not required.value. The Company had no impairment of intangible assets during the years ended December 31, 2021, 2020 or 2019.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7.    Financial Commitments

Long-Term Debt

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

As of December 31,
(in thousands)20212020
2017 Senior Notes$496,244 $495,271 
Term Loan B406,335 408,458 
2020 Revolver27,000 — 
Convertible Notes(a)
— 67,878 
Equipment financing and mortgages56,246 47,594 
Other indebtedness7,829 6,264 
Total debt993,654 1,025,465 
Less: Current maturities24,406 100,188 
Long-term debt, net$969,248 $925,277 

As of December 31,

(in thousands)

2019

2018

2017 Senior Notes

$

494,365

$

493,521

2017 Credit Facility

114,000

41,000

Convertible Notes

182,292

171,481

Equipment financing and mortgages

39,159

50,904

Other indebtedness

4,660

4,598

Total debt

834,476

761,504

Less: Current maturities

124,054

16,767

Long-term debt, net

$

710,422

$

744,737

(a)The Company repaid the remaining principal balance of the Convertible Notes at maturity on June 15, 2021. As of December 31, 2020, the balance of the Convertible Notes was included in current maturities on the Consolidated Balance Sheet.

The following table reconciles the outstanding debt balancebalances to the reported debt balances as of December 31, 20192021 and 2018:

2020:

As of December 31, 2019

As of December 31, 2018

As of December 31, 2021As of December 31, 2020

(in thousands)

Outstanding Long-Term Debt

Unamortized Discount and Issuance Costs

Long-Term

Debt,

as reported

Outstanding Long-Term Debt

Unamortized Discount and Issuance Costs

Long-Term Debt,
‎as reported

(in thousands)Outstanding DebtUnamortized Discounts and Issuance Costs
Debt,
as reported		Outstanding DebtUnamortized Discounts and Issuance Costs
 Debt,
as reported

2017 Senior Notes

$

500,000

$

(5,635)

$

494,365

$

500,000

$

(6,479)

$

493,521

2017 Senior Notes$500,000 $(3,756)$496,244 $500,000 $(4,729)$495,271 
Term Loan BTerm Loan B419,688 (13,353)406,335 423,938 (15,480)408,458 

Convertible Notes

200,000

(17,708)

182,292

200,000

(28,519)

171,481

Convertible Notes— — — 69,918 (2,040)67,878 

The unamortized issuance costs related to the 2017 Credit Facility2020 Revolver were $3.7$2.1 million and $4.8$2.6 million as of December 31, 20192021 and 2018,2020, respectively, and are included in other assets inon the 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”), 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 indebtedness and annual excess cash flow (subject to certain exceptions).
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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2017 Senior Notes

On April 20, 2017,2020 Credit Agreement) does not exceed 1.35:1.00, (B) in the case of junior lien secured indebtedness, the Total Net Leverage Ratio (as defined in the 2020 Credit Agreement) does not exceed 3.50:1.00 and (C) in the case of unsecured indebtedness, (x) the Total Net Leverage Ratio does not exceed 3.50:1.00 or (y) the Fixed Charge Coverage Ratio (as defined in the 2020 Credit Agreement) is no less than 2.00:1.00.

Borrowings under the 2020 Credit Agreement bear interest, at the Company’s option, at a rate equal to (i) (a) LIBOR or (b) 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 rate for a one-month interest period plus 100 basis points) plus, (ii) an applicable margin. The margin applicable to the Term Loan B is between 4.50% and 4.75% for LIBOR and between 3.50% and 3.75% for base rate (which was initially 4.75% for LIBOR and 3.75% for base rate), and, in each case, is based on the Total Net Leverage Ratio. The margin applicable to the 2020 Revolver is between 4.25% and 4.75% for LIBOR and 3.25% and 3.75% for base rate (which was initially 4.75% for LIBOR and 3.75% for base rate), and, in each case, is based on the First Lien Net Leverage Ratio. In addition to paying interest on outstanding principal under the 2020 Credit Agreement, the Company issued $500 millionwill pay a commitment fee to the lenders under the 2020 Revolver in aggregate principal amount of 6.875% Senior Notes due 2025 (the “2017 Senior Notes”) in a private placement offering. Interest on the 2017 Senior Notes is payable in arrears semi-annually in May and November of each year, beginning in November 2017.

Prior to May 1, 2020, the Company may redeem the 2017 Senior Notes at a redemption price equal to 100% of their principal amount plus a “make-whole” premium described in the indenture. In addition, prior to May 1, 2020, the Company may redeem up to 40%respect of the original aggregate principal amountunutilized commitments thereunder. The Company will pay customary letter of credit fees. If a payment or bankruptcy event of default occurs and is continuing, the notes at a redemption priceotherwise applicable margin on overdue amounts will be increased by 2% per annum. The agreement includes provisions for the replacement of 106.875% of their principal amountLIBOR with an alternative benchmark rate upon LIBOR being discontinued. The weighted-average annual interest rate on borrowings under the proceeds received by2020 Revolver was 6.5% during the Company from any offering of the Company’s equity. After May 1,year ended December 31, 2021.

The 2020 the Company may redeem the 2017 Senior Notes at specified redemption prices described in the indenture. Upon a change of control, holders of the 2017 Senior Notes may require the Company to repurchase all or part of the 2017 Senior Notes at 101% of the principal amount thereof, plus accrued and unpaid interestCredit Agreement requires, with respect to the redemption date.

The 2017 Senior Notes are senior unsecured obligations of2020 Revolver only, the Company and are guaranteed byits restricted subsidiaries to maintain a maximum First Lien Net Leverage Ratio of 2.75:1:00, stepping down to 2.25:1.00 beginning the quarter ending March 31, 2022. The 2020 Credit Agreement also includes certain customary representations and warranties, affirmative covenants and events of default. Subject to certain exceptions, substantially all of the Company’s existing and future material wholly-owned subsidiaries that alsounconditionally guarantee the obligations of the Company under the Company’s2020 Credit Agreement; additionally, subject to certain exceptions, the obligations are secured by a lien on substantially all of the assets of the Company and its subsidiaries guaranteeing these obligations.

As of December 31, 2021, $27 million was outstanding and $148 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 under the 2020 Credit Agreement for the period ended December 31, 2021.
Termination of 2017 Credit Facility as defined below. In addition, the indenture for the 2017 Senior Notes provides for customary covenants, including events of default and restrictions on the payment of dividends and share repurchases.

2017 Credit Facility

On April 20, 2017,August 18, 2020, the Company entered into aused proceeds from the Term Loan B to repay outstanding amounts under its credit agreement (the “2017 Credit Facility”) with SunTrust Bank, now known as Truist Bank, as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 2017 Credit Facility provides for a $350 million revolving credit facility (the “2017 Revolver”) and a sublimit for the issuance of letters of credit and swingline loans up to the aggregate amount of $150 million and $10 million, respectively, both maturing on April 20, 2022 unless any of the Convertible Notes, as defined below, are outstanding on December 17, 2020, inlenders, at which case all such borrowings will mature on December 17, 2020, provided that (i) if the Convertible Notes are refinanced in full with the proceeds of permitted refinancing indebtedness in accordance with the terms oftime the 2017 Credit Facility the maturity date for the 2017 Credit Facility will remain April 20, 2022was terminated.
Repurchase and (ii) if the Company issues “NewRepayment of Convertible Notes” (as defined in the 2017 Credit Facility), the maturity date for the 2017 Credit Facility will be the earlier of (x) April 20, 2022 or December 17, 2020 if Convertible Notes are outstanding on December 17, 2020 and (y) 90 days prior to the maturity date for such New Convertible Notes. The 2017 Credit Facility also permits additional borrowings in an aggregate amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans.

Borrowings under the 2017 Revolver bear interest, at the Company’s option, at a rate equal to (a) the London Interbank Offered Rate (“LIBOR”) plus a margin of between 1.50% and 3.00% or (b) a base rate (determined by reference to the highest of (i) the administrative agent’s prime lending rate, (ii) the federal funds effective rate plus 50 basis points, (iii) the LIBOR rate for a one-month interest period plus 100 basis points and (iv) 0%), plus a margin of between 0.50% and 2.00%, in each case based on the Consolidated Leverage Ratio (as defined in the 2017 Credit Facility). In addition to paying interest on outstanding principal under the 2017 Credit Facility, the Company will pay a commitment fee to the lenders under the 2017 Revolver in respect of the unutilized commitments thereunder. The Companywill pay customary letter of credit fees. If an event of default occurs and is continuing, the otherwise applicable margin and letter of credit fees will be increased 2% per annum. The weighted-average annual interest rate on borrowings under the 2017 Revolver was approximately 4.96% during the year ended December 31, 2019.

The 2017 Credit Facility contains customary covenants for credit facilities of this type, including maximum consolidated leverage ratios ranging from 4.00:1.00 to 3.25:1.00 over the life of the facility and a minimum consolidated fixed charge coverage ratio of 1.25:1.00. On May 7, 2019, certain provisions of the 2017 Credit Facility were amended, including setting the maximum leverage ratio at 3.50:1.00 for the remainder of its term, thus eliminating the step down from 3.50:1:00 to 3.25:1.00. Substantially all of the Company’s subsidiaries unconditionally guarantee the obligations of the Company under the 2017 Credit Facility; additionally, the obligations are secured by a lien on all personal property of the Company and its subsidiaries guaranteeing these obligations.

As of December 31, 2019, there was $236 million available under the 2017 Revolver, and the Company had not utilized the 2017 Credit Facility for letters of credit. The Company was in compliance with the financial covenants under the 2017 Credit Facility as of December 31, 2019.

As a result of the aforementioned provision in the 2017 Credit Facility whereby the maturity date of the 2017 Credit Facility may be moved forward from April 20, 2022, the facility will mature on December 17, 2020 if the Convertible Notes remain outstanding at that time (the “spring-forward” provision). While the Company does not have call rights that allow it to unilaterally redeem the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Convertible Notes, it intends to repurchase or exchange the Convertible Notes and/or modify or replace the 2017 Credit Facility during 2020. Various alternatives are under consideration to determine the financing arrangement that is best suited to the Company’s needs and provides the most favorable terms. The Company is currently in discussions with lenders regarding its options. Due to the spring-forward provision in the 2017 Credit Facility, all borrowings under the facility are included in “Current maturities of long-term debt” on the Consolidated Balance Sheet as of December 31, 2019.

Convertible Notes

On June 15, 2016, the Company issued $200 million of 2.875% Convertible Senior Notes due June 15, 2021 (the “Convertible Notes”) in a private placement offering. TheOn August 19, 2020, the Company used proceeds from the Term Loan B to repurchase $130.1 million aggregate principal amount of the Convertible Notes are unsecured obligationsfor an aggregate purchase price of $132.4 million (including accrued and unpaid interest to the repurchase date). As a result of the repurchase, the Company and do not contain any financial covenants or restrictionsrecognized a $7.1 million loss on extinguishment of debt in 2020, which is included in interest expense in the paymentsConsolidated Statements of dividends,Operations. The Company repaid the incurrenceremaining $69.9 million principal balance of indebtedness or the issuance or repurchase of securities by the Company. The Convertible Notes bear interest at maturity on June 15, 2021 using proceeds from the Term Loan B, which were held in a raterestricted cash account for this purpose. As of 2.875% per year, payable in cash semi-annually in June 15, 2021, the discount and December.

deferred debt costs associated with the Convertible Notes were fully amortized, the principal balance of the Convertible Notes was equal to their fair value and there was no gain or loss on extinguishment at maturity. None of the Convertible Notes remained outstanding as of December 31, 2021.

To account for the Convertible Notes, the Company applied the provisions of ASC 470-20, Debt with Conversion and Other Options(“ (“ASC 470-20”). ASC 470-20 requires issuers of certain convertible debt instruments that may be settled in cash upon conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate. This is done by allocating the proceeds from issuance to the liability component based on the fair value of the debt instrument excluding the conversion feature, with the residual allocated to the equity component and classified in additional paid in capital. The $46.8 million difference between the initial principal amount of the Convertible Notes ($200.0 million) and the proceeds initially allocated to the liability component ($153.2 million) iswas treated as a discount on the Convertible Notes. This difference is beingwas amortized as non-cash interest expense
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using the interest method, as shown below under Interest Expense. The equity component, however, is not subject to amortization nor subsequent remeasurement.

In addition, ASC 470-20 requires that the debt issuance costs associated with a convertible debt instrument be allocated between the liability and equity components in proportion to the allocation of the debt proceeds between these two components. The debt issuance costs attributable to the liability component of the Convertible Notes ($5.1 million) are also treated as a discount on the Convertible Notes and amortized as non-cash interest expense. The debt issuance costs attributable to the equity component ($1.5 million) were netted with the equity component and are not amortized.

The following table presents information related to the liability and equity components of the Convertible Notes:

(in thousands)

December 31,

2019

December 31,

2018

Liability component:

Principal

$

200,000

$

200,000

Conversion feature

(46,800)

(46,800)

Allocated debt issuance costs

(5,051)

(5,051)

Amortization of discount and debt issuance costs (non-cash interest expense)

34,143

23,332

Net carrying amount

$

182,292

$

171,481

Equity component:

Conversion feature

$

46,800

$

46,800

Allocated debt issuance costs

(1,543)

(1,543)

Deferred taxes

(18,815)

(18,815)

Net carrying amount

$

26,442

$

26,442

(in thousands)December 31, 2020
Liability component:
Principal$69,918 
Conversion feature(46,800)
Allocated debt issuance costs(5,051)
Amortization and extinguishment of discount and debt issuance costs (non-cash interest expense)49,811 
Net carrying amount$67,878 
Equity component:
Conversion feature$46,800 
Reacquisition of conversion option from repurchase of notes, net of tax(764)
Allocated debt issuance costs(1,543)
Deferred taxes(18,815)
Net carrying amount$25,678 

Prior to January 15, 2021,

2017 Senior Notes
On April 20, 2017, the Convertible Notes will be convertible only under the following circumstances: (1) during the five business day period after any 10 consecutive trading day periodCompany issued $500 million in which the trading price per $1,000aggregate principal amount of Convertible6.875% Senior Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (2) if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) duringdue May 1, 2025 (the “2017 Senior Notes”) in a period of 30 consecutive trading days endingprivate placement offering. Interest on the last trading day2017 Senior Notes is payable in arrears semi-annually in May and November of each year, beginning in November 2017.
The Company may redeem the immediately preceding calendar quarter is greater than or equal to 130% of the conversion rate of 33.0579 (or $39.32) on each applicable trading day; or (3) upon the occurrence of2017 Senior Notes at specified corporate events. On or after January 15, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

The Convertible Notes will be convertible at an initial conversion rate of 33.0579 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $30.25. The conversion

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rate will be subject to adjustment for some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, the Company is required to increase, in certain circumstances, the conversion rate for a holder who elects to convert their Convertible Notes in connection with such a corporate event including customary conversion rate adjustments in connection with a “make-whole fundamental change”redemption prices described in the indenture. Upon conversion,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 atunpaid interest to the redemption date.

The 2017 Senior Notes are senior unsecured obligations of the Company and are guaranteed by substantially all of the Company’s election,existing and future subsidiaries that also guarantee obligations under the Company may satisfy its conversion obligation with cash, sharesCompany’s 2020 Credit Agreement, as defined above. In addition, the indenture for the 2017 Senior Notes provides for customary covenants, including events of its common stock or a combination thereof. Asdefault and restrictions on the payment of December 31, 2019, the conversion provisions of the Convertible Notes have not been triggered.

dividends and share repurchases.

Equipment Financing and Mortgages

The Company has certain loans entered into for the purchase of specific property, plant and equipment and secured by the assets purchased. The aggregate balance of equipment financing loans was approximately $27.7$41.7 million and $38.6$36.9 million at December 31, 20192021 and 2018,2020, respectively, with interest rates ranging from 2.62%2.54% to 3.89% with equal monthly installment payments over periods up to ten years with additional balloon payments of $12.4 million in 2021 and $6.3 million in 2022 on the remaining loans outstanding at December 31, 2019.5 years. The aggregate balance of mortgage loans was approximately $11.5$14.6 million and $12.3$10.7 million at December 31, 20192021 and 2018,2020, respectively, with interest rates ranging from a fixed 3.50%2.25% to LIBOR plus 3% and equal monthly installment payments over periods up to ten10 years, as well as one loan with additionala balloon paymentspayment of $2.9 $6.8 million in 2021 and $7.0 milliondue in 2023.
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The following table presents the future principal payments required under all of the Company’s debt obligations, discussed above:

Year (in thousands)

Year (in thousands)

2020

$

124,054

2021

218,967

2022

7,546

2022$24,406 

2023

7,164

202323,187 

2024

88

202416,137 
20252025539,888 
202620268,578 

Thereafter

500,000

Thereafter398,567 

857,819

1,010,763 

Less: Unamortized discount and issuance costs

23,343

Less: Unamortized discounts and issuance costsLess: Unamortized discounts and issuance costs17,109 

Total

$

834,476

Total$993,654 

Interest Expense

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

For the year ended December 31,
(in thousands)202120202019
Cash interest expense:
Interest on 2017 Senior Notes$34,375 $34,375 $34,375 
Interest on Term Loan B24,590 9,028 — 
Interest on 2020 Revolver1,479 77 — 
Interest on 2017 Credit Facility— 5,341 11,990 
Interest on Convertible Notes921 4,373 5,750 
Other interest1,905 2,079 2,172 
Cash portion of loss on extinguishment— 786 — 
Total cash interest expense63,270 56,059 54,287 
Non-cash interest expense(a):
Amortization of discount and debt issuance costs on Convertible Notes2,040 8,944 10,811 
Amortization of discount and debt issuance costs on Term Loan B2,175 784 — 
Amortization of debt issuance costs on 2020 Revolver568 206 — 
Amortization of debt issuance costs on 2017 Credit Facility— 1,001 1,552 
Amortization of debt issuance costs on 2017 Senior Notes973 906 844 
Non-cash portion of loss on extinguishment— 8,312 — 
Total non-cash interest expense5,756 20,153 13,207 
Total interest expense$69,026 $76,212 $67,494 

For the year ended December 31,

(in thousands)

2019

2018

2017

Cash interest expense:

Interest on 2017 Senior Notes

$

34,375

$

34,375

$

23,967

Interest on 2017 Credit Facility

11,990

8,575

5,517

Interest on Convertible Notes

5,750

5,750

5,750

Interest on 2010 Senior Notes

—

—

6,926

Interest on 2014 Credit Facility

—

—

4,455

Other interest

2,172

2,747

3,261

Cash portion of loss on extinguishment

—

—

1,913

Total cash interest expense

54,287

51,447

51,789

Non-cash interest expense(a):

Amortization of discount and debt issuance costs on Convertible Notes

10,811

9,846

8,967

Amortization of debt issuance costs on 2017 Credit Facility

1,552

1,439

962

Amortization of debt issuance costs on 2017 Senior Notes

844

787

516

Amortization of debt issuance costs on 2014 Credit Facility

—

—

1,703

Amortization of discount and debt issuance costs on 2010 Senior Notes

—

—

308

Non-cash portion of loss on extinguishment

—

—

5,139

Total non-cash interest expense

13,207

12,072

17,595

Total interest expense

$

67,494

$

63,519

$

69,384

_____________________________________________________________________________________________________________

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(a)   The combination of cash and non-cash interest expense produces effective interest rates that are higher than contractual rates. Accordingly, the effective interest rates for the 2017 Senior Notes, Term Loan B and the Convertible Notes were 7.13%, 6.48% and 9.39%, respectively, for the year ended December 31, 20192021..

8.    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
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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 1(d) and Note 4. 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. 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 December 31, 2019,2021, the Company cannot predict the ultimate outcome of the investigation and cannot reasonably estimatehas concluded that the potential loss or range of loss thatfor a material adverse financial impact on Five Star or the Company may incur or the impact of the resultsas a result of the investigation on Five Star or the Company.

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 diameterlarge-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 diameterlarge-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 hasdid not acceptedaccept 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, has also joined the case as a plaintiff for costs incurred to repair the damages to the TBM.

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In April and September 2018, rulings received on pre-trial motions effectively limited some of the potential recoveryrecoveries under the Policy for STP, WSDOT and Hitachi. However, on December 19, 2018,On August 2, 2021, the Court of Appeal granted the Company’s request for a discretionary appealAppeals reversed in part certain of those limitations but affirmed other parts of those rulings. The appeal is expected to be heard in mid to late 2020.On January 5, 2022, the Washington Supreme Court issued an order granting STP, submitted damages toWSDOT and Hitachi’s requests for discretionary review of the Insurers inportions of the King County lawsuit inCourt of Appeals’ decision that affirmed the amountApril and September 2018 decisions. STP also asserted $532 million of $532 million. STP is also seeking these damages from WSDOT related to the pipe-strike by the TBM in a related lawsuit in Thurston County (see following paragraph).

In March 2016, WSDOT filed a complaint against STP in Thurston County Superior Court foralleging breach of contract, alleging STP’s delays and failure to perform, seeking $57.2 million in delay-related damages and seeking declaratory relief concerning contract interpretation. STP filed its answer to
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WSDOT’s complaint and 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 causedreleased and dismissed the release and dismissal of claims that STP and Hitachi had against each other. The jury trial between STP and WSDOT commenced on October 7, 2019 and concluded on December 13, 2019, with a jury verdict in favor of WSDOT awarding them $57.2 million in damages. Judgment was entered on January 10, 2020, and a notice ofSTP appealed the decision. The appeal was filed byargued on December 10, 2021 and STP on January 17, 2020.

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. The charge includes a pre-tax accrual ofmillion, which included $25.7 million (which isfor the Company’s 45% proportionate share of the $57.2 million in damages awarded by the jury to WSDOT).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 in cash of $25.7 million infor damages, the charge iswas for non-cash write-downs primarily related to the costs and estimated earnings in excess of billings and receivables that the Company previously recorded to reflect its expected recovery in this case.

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

George Washington Bridge Bus Station Matter

In August 2013, Tutor Perini Building CorporationCorp. (“TPBC”) entered into a contract with the George Washington Bridge Bus Station Development Venture, LLC (the “Developer”) to renovate the George Washington Bridge Bus Station, a mixed-use facility owned by the Port Authority of New York and New Jersey (the “Port Authority”) that serves as a transit facility and retail space. The $100 million project experienced significant design errors and associated delays, resulting in damages to TPBC and its subcontractors, including WDF and Five Star, wholly owned subsidiaries of the Company. The project reached substantial completion on May 16, 2017.

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

Hearings on the merits commenced on September 24, 2018 before the arbitration panel, and were expected to continue over various weeks through March 2020. On April 15, 2019, the counsel for the Developer withdrew from the case, which resulted in further delays to the proceedings.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 the Second Circuit Court of Appeals. On August 25, 2021, the bankruptcy court approved the sale of the leasehold, which was completed on August 31, 2021. On October 1, 2021, the bankruptcy court converted the case from a Chapter 11 to a Chapter 7 bankruptcy proceeding.
Separately, on July 2, 2018, TPBC filed a lawsuit against the Port Authority, of New York and New Jersey, as owner of the project, and STV Incorporated, as designer, seeking the same $113 million in damages.damages pursuant to the lease agreement between the Port Authority and the Developer. On January 13, 2020,August 20, 2018, the Court dismissed STV Incorporated fromPort Authority filed a motion to dismiss all causes of action, which was denied by the case. Thatcourt on July 1, 2019. The Port
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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 March 29, 2021, the Port Authority filed a new motion to dismiss on additional grounds. In addition, on August 11, 2021, TPBC filed a second lawsuit is proceedingin state court against the Port Authority of New York and New Jersey.

alleging tortious interference with TPBC’s right to recover under the lease agreement’s “cure” provision in the bankruptcy proceeding, which was removed to federal court.

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

On June 1, 2020, the defendants filed motions to dismiss, which were granted in part and denied in part on December 29, 2020, 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.

As of December 31, 2019,2021, the Company has concluded that the potential for a material adverse financial impact due to the Developer’s claims is remote. With respect to TPBC’s claims against the Developer, its owners, certain lenders and the Port Authority, of New York and New Jersey, management has made an estimate of the total anticipated recovery on this project, and such estimate is included in revenue recorded to date.

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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 December 31, 2019,2021, the Company’s operating leases have remaining lease terms ranging from less than one year to 1017 years, some of which include options to renew the leases. The exercise of lease renewal options is generally at the Company’s sole discretion. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

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

The following table presents components of lease expense for the yearyears ended December 31, 2019:

2021 and 2020:

Year Ended

(in thousands)

December 31, 2019

Operating lease expense

$

15,854

Short-term lease expense(a)

72,562

88,416

Less: Sublease income

1,077

Total lease expense

$

87,339

For the year ended December 31,
(in thousands)20212020
Operating lease expense$14,733 $14,547 
Short-term lease expense(a)
72,047 87,969 
86,780 102,516 
Less: Sublease income697 1,026 
Total lease expense$86,083 $101,490 

(a)Short-term lease expense includes all leases with lease terms ranging from less than one month to one year.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 as of December 31, 2019:

As of December 31,

(dollars in thousands)

Balance Sheet Line Item

2019

Assets

ROU assets

Other assets

$

40,156

Total lease assets

$

40,156

Liabilities

Current lease liabilities

Accrued expenses and other current liabilities

$

11,392

Long-term lease liabilities

Other long-term liabilities

31,900

Total lease liabilities

$

43,292

Weighted-average remaining lease term (in years)

5.0

Weighted-average discount rate

5.96%

leases:

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As of December 31,
(dollars in thousands)Balance Sheet Line Item20212020
Assets
ROU assetsOther assets$53,462$55,897
Total lease assets$53,462$55,897
Liabilities
Current lease liabilitiesAccrued expenses and other current liabilities$7,481$7,661
Long-term lease liabilitiesOther long-term liabilities50,05751,336
Total lease liabilities$57,538$58,997
Weighted-average remaining lease term12.0 years12.5 years
Weighted-average discount rate9.44 %9.22 %

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

leases:

Year Ended

(in thousands)

December 31, 2019

Operating cash flow information:

Cash paid for amounts included in the measurement of lease liabilities

$

(15,658)

Non-cash activity:

ROU assets obtained in exchange for lease liabilities

$

9,784

As of December 31,
(in thousands)20212020
Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities$(13,799)$(14,591)
Non-cash activity:
ROU assets obtained in exchange for lease liabilities$6,979 $29,244 

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

Year (in thousands)

Operating Leases

2020

$

13,572

2021

9,372

2022

7,971

2023

6,761

2024

5,093

Thereafter

7,618

Total lease payments

50,387

Less: Imputed interest

7,095

Total

$

43,292

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

Year (in thousands)

Operating Leases

2019

$

14,039

2020

10,706

2021

7,464

2022

6,567

2023

5,587

Thereafter

11,662

56,025

Less: Sublease rental agreements

1,398

Total

$

54,627

10.     Other Income, Net

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

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

The Company recognized the settlement as a gain and reported it as a component of other income, net in its Consolidated Statement of Operations for the year ended December 31, 2017.

2021:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year (in thousands)
Operating Leases
2022$12,372 
20239,622 
20247,673 
20256,803 
20265,640 
Thereafter60,833 
Total lease payments102,943 
Less: Imputed interest45,405 
Total$57,538 

11.

10.    Share-Based Compensation

On April 10, 2018, the Company adopted the Tutor Perini Corporation Omnibus Incentive Plan (the “Current Plan”), which was approved by the Company’s shareholders on May 23, 2018. The Current Plan effected the merger of the Company’s Amended and Restated Tutor Perini Corporation Long-Term Incentive Plan, as amended and restated on October 2, 2014 (the “2014 Plan”) and the Tutor Perini Corporation Incentive Compensation Plan adopted on April 3, 2017 (the “2017 Plan,” together with the 2014 Plan and the Current Plan, the “Plans”). The Current Plan provides for various types of share-based grants, including restricted and unrestricted stock units and stock options. Restricted and unrestricted stock units give the holder the right to exchange their stock units for shares of the Company’s common stock on a one-for-one basis. Stock options give the holder the right to purchase shares of the Company’s common stock subsequent to the vesting date at a defined exercise price. A stock option exercise price must be equal to or greater than the fair value of the Company’s common stock on the date of the award. Restricted stock units and stock options are usually subject to certain service and performance conditions as well as other restrictions. The term for stock options is limited to 10 years from the award date. As of December 31, 2019,2021, there were 1,241,8791,243,070 shares of common stock available for grant under the Company’s Current Plan. As of December 31, 2019,2021, the Plans had an aggregate of 4,144,015 of3,356,616 restricted stock units and stock options from outstanding, historical awards that either have not vested or have vested but have not been exercised. Any awards that were granted under the 2014 Plan or the 2017 PlanPlans that are forfeited, cancelled or held back for net settlement will become available to be issued under the Current Plan.

The terms of the Plans give the Company the right to settle the vesting of share-based grants in cash or shares. During the years ended December 31, 2019 and 2018, the Company did 0t settle any awards in cash. During the year ended December 31, 2017, the Company paid approximately $0.6 million to settle share-based awards.

Many of the awards issued under the Plans contain separate tranches, each for a separate performance period and each with a performance target to be established subsequent to the award date; accordingly, the tranches are accounted for under ASC 718,
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TUTOR PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Stock Compensation (“ASC 718”) as separate grants, with the grant date being the date the performance targets for a given tranche are established and communicated to the grantee. Similarly, for these awards, compliance with the requirements of the Plans is also based on the number of units granted in a given year, as determined by ASC 718, rather than the number of units awarded in a given year. As a result, as of December 31, 2019, the Company had outstanding awards with 75,000 restricted stock units and 75,000 stock options that had not been granted yet. These units will be granted in 2020 when the performance targets for those respective years are established.

The following table summarizes restricted stock unit, and stock option and CPSU activity:

Restricted Stock Units

Stock Options

Weighted-

Weighted-

Average

Average

Grant Date

Exercise/

Fair Value

(Strike) Price

Number

Per Share

Number

Per Share

Outstanding as of December 31, 2016

1,156,484

$

22.64

2,174,500

$

19.50

Granted

1,064,000

30.02

539,000

24.54

Expired or cancelled

(20,985)

23.91

(19,466)

26.56

Vested/exercised

(801,515)

19.38

(140,000)

21.41

Outstanding as of December 31, 2017

1,397,984

$

30.11

2,554,034

$

20.45

Granted

699,000

24.21

664,000

23.20

Expired or cancelled

(240,289)

32.76

(274,990)

22.82

Vested/exercised

(387,695)

28.67

—

—

Outstanding as of December 31, 2018

1,469,000

$

27.27

2,943,044

$

20.89

Granted

530,000

20.23

220,000

19.66

Expired or cancelled

(104,029)

28.98

(884,029)

21.03

Vested/exercised

(179,971)

25.39

—

—

Outstanding as of December 31, 2019

1,715,000

$

25.19

2,279,015

$

20.62

Restricted Stock UnitsStock OptionsCPSUs
NumberWeighted-
Average
Grant Date
Fair Value
Per Share		NumberWeighted-
Average
Exercise/
(Strike) Price
Per Share		NumberWeighted-
Average Grant Date
Fair Value
Per Unit
Outstanding as of December 31, 20181,469,000 $27.27 2,943,044 $20.89 — $— 
Granted530,000 20.23 220,000 19.66 — — 
Expired or cancelled(104,029)28.98 (884,029)21.03 — — 
Vested/exercised(179,971)25.39 — — — — 
Outstanding as of December 31, 20191,715,000 $25.19 2,279,015 $20.62 — $— 
Granted245,000 20.67 165,000 19.24 — — 
Expired or cancelled(403,750)25.52 (168,750)25.87 — — 
Vested/exercised(521,250)29.44 — — — — 
Outstanding as of December 31, 20201,035,000 $21.85 2,275,265 $20.13 — $— 
Granted678,851 16.26 100,000 19.24 398,852 20.39 
Expired or cancelled(155,000)15.37 (202,500)20.07 — — 
Vested/exercised(370,000)23.53 (5,000)13.32 — — 
Outstanding as of December 31, 20211,188,851 $18.98 2,167,765 $20.11 398,852 $20.39 

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the Company's stock, cash or a combination thereof, at the Company's discretion. As of December 31, 2021 and 2020, there were 260,000 and 270,000 restricted stock units with guaranteed minimum payouts outstanding, with weighted-average grant date fair values per share of $27.53 and $27.80, respectively.

The Company recognized liabilities for CPSUs and restricted stock units with guaranteed minimum payouts totaling approximately $4.8 million and $2.4 million as of December 31, 2021 and 2020, respectively. The Company paid approximately $0.3 million in each of 2021 and 2020 to settle liability-classified awards, and there were no cash settlements in 2019.

The following table summarizes unrestricted stock units,awards, which are generally issued to the non-employee members of the Company’s Board of Directors as part of their annual retainer fees:

Unrestricted Stock Units

Weighted-Average

Grant Date

Year

Number

Fair Value Per Share

2017

99,155

$

26.26

2018

115,420

21.26

2019

98,591

15.72

Unrestricted Stock Awards
YearNumberWeighted-Average
Grant Date
Fair Value Per Share
201998,591 $15.72 
2020194,177 8.60 
2021101,894 15.47 

Unrestricted stock units vest immediately upon grant and are converted to shares of the Company’s stock on a one-for-one basis.

The fair value of unrestricted stock unitsawards issued during 2019, 20182021, 2020 and 20172019 was approximately $1.6 million, $1.7 million and $1.5 million, $2.5 million and $2.6 million, respectively.

The fair value of restricted stock units that vested during 2019, 20182021, 2020 and 20172019 was approximately $5.3 million, $4.1 million and $3.1 million, $7.9 million and $25.3 million, respectively. There were 0 stock options exercised during 2019 or 2018. The aggregate intrinsic value, representing the difference between the market value on the date of exercise and the option price of the stock options exercised during 2017 was $1.3 million, with a corresponding tax benefit of $0.6 million. As of December 31, 2019,2021, the balance of unamortized restricted stock, and stock option and CPSU expense was $17.3$12.9 million, $2.0 million and $3.6$6.8 million, respectively, which is expected to be recognized over weighted-average periods of 2.01.9 years for restricted stock units, and 1.81.9 years for stock options.options and 2.0 years for CPSUs.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The 2,279,0152,167,765 outstanding stock options as of December 31, 20192021 had an intrinsic value of $0.9$0.6 million and a weighted-average remaining contractual life of 5.53.8 years. Of those outstanding options: (1) 1,509,0151,842,765 were exercisable with an intrinsic value of $0.9$0.6 million, a weighted-average exercise price of $19.69$20.77 per share and a weighted-average remaining contractual life of 4.13.0 years; (2) 770,000 have been granted but325,000 have not vested withand have no intrinsic value, a weighted-average exercise price of $22.44$16.37 per share and a weighted-average remaining contractual life of 8.48.5 years. Of the granted butThe 325,000 unvested stock options 770,000,include 187,500 with time-based or market-based vesting conditions that are expected to vest.

The fair value of restricted and unrestricted stock units is based on the closing price of the Company’s common stock on the New York Stock Exchange on the date of the grant and the fair value of stock options is based on the Black-Scholes model. Certain performance-based awards contain market condition components tiedvest, as well as 137,500 with market-based vesting conditions that are not expected to the Company’s total shareholder return in relation to its peer companies, as calculated over a multi-year performance period (“TSR awards”). The fair value of the TSR awards is determined using a Monte Carlo simulation model. Significant assumptions used in this simulation model include the Company’s expected volatility, a risk-free rate based on U.S. Treasury yield curve rates with maturities consistent with the performance period, and the volatilities for each of the Company’s peers. The ultimate payout on TSR awards is determined at the end of the performance period and will vary based on actual total shareholder return performance results. Compensation expense related to the TSR awards is recognized regardless of whether the market condition is satisfied, provided that the requisite service period has been completed.

vest.

The fair value on the grant date and the significant assumptions used in the Black-Scholes option-pricing model are as follows:

Year Ended December 31,
202120202019
Total stock options granted100,000 165,000 220,000 
Weighted-average grant date fair value$15.21 $7.67 $7.59 
Weighted-average assumptions:
Risk-free rate1.4 %1.2 %2.1 %
Expected life of options(a)
6.5 years6.3 years6.1 years
Expected volatility(b)
73.7 %60.7 %39.4 %
Expected quarterly dividends$— $— $— 

Year Ended December 31,

2019

2018

2017

Total stock options granted

220,000

664,000

539,000

Weighted-average grant date fair value

$

7.59

$

11.09

$

13.11

Weighted-average assumptions:

Risk-free rate

2.1

%

2.6

%

1.8

%

Expected life of options(a)

6.1

5.8

4.8

Expected volatility(b)

39.4

%

42.2

%

43.1

%

Expected quarterly dividends

$

—

$

—

$

—

_____________________________________________________________________________________________________________

(a)Calculated using the simplified method due to the terms of the stock options and the limited pool of grantees.

(b)Calculated using historical volatility of the Company’s common stock over periods commensurate with the expected life of the option.

For the respective years ended December 31, 2019, 20182021, 2020 and 2017,2019, the Company recognized, as part of general and administrative expenses, costs for share-based payment arrangements for employees of $17.5$10.0 million, $21.1$10.2 million and $19.6$17.5 million. Additionally for the same periods, the Company recognized as part of general and administrative expenses, costs for share-based awards to non-employee directors of $1.6 million $1.7 million and $1.6 million, respectively.for each of the three years. The aggregate tax benefits for these awards were approximately $2.9$1.2 million, $3.8$1.3 million and $8.7$2.9 million, for the respective periods.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12.11.    Employee Benefit Plans

Defined Benefit Pension Plan

The Company has a defined benefit pension plan that covers certain of its executive, professional, administrative and clerical employees, subject to certain specified service requirements. The pension plan is noncontributory and benefits are based on an employee’s years of service and “final average earnings,” as defined by the pension plan. The pension plan provides reduced benefits for early retirement and takes into account offsets for social security benefits. The Company also has an unfunded supplemental retirement plan (“Benefit Equalization Plan”) for certain employees whose benefits under the defined benefit pension plan were reduced because of compensation limitations under federal tax laws. Effective June 1, 2004, all benefit accruals under the Company’s pension plan and Benefit Equalization Plan were frozen; however, the current vested benefit was preserved. Pension disclosure as presented below includes aggregated amounts for both of the Company’s plans, except where otherwise indicated.

The Company historically has used the date of its year-end as its measurement date to determine the funded status of the pension plan.

The long-term investment goals of the Company’s pension plan are to manage the assets in accordance with the legal requirements of all applicable laws; produce investment returns which maximize return within reasonable and prudent levels of risks; and achieve a fully funded status with regard to current pension liabilities. Some risk must be assumed in order to achieve the investment goals. Investments with the ability to withstand short and intermediate term variability are considered and some interim fluctuations in market value and rates of return are tolerated in order to achieve the pension plan’s longer-term objectives.

The pension plan’s assets are managed by a third-party investment manager. The Company monitors investment performance and risk on an ongoing basis.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table sets forth a summary of net periodic benefit cost for the years ended December 31, 2019, 20182021, 2020 and 2017:

2019:

Year Ended December 31,

Year Ended December 31,

(in thousands)

2019

2018

2017

(in thousands)202120202019

Interest cost

$

3,801

$

3,496

$

3,919

Interest cost$2,349 $3,032 $3,801 

Service cost

900

875

850

Service cost935 925 900 

Expected return on plan assets

(4,170)

(4,302)

(4,358)

Expected return on plan assets(3,976)(4,022)(4,170)

Recognized net actuarial losses

1,933

2,067

1,897

Recognized net actuarial losses2,860 2,407 1,933 

Net periodic benefit cost

$

2,464

$

2,136

$

2,308

Net periodic benefit cost$2,168 $2,342 $2,464 

Actuarial assumptions used to determine net cost:

Actuarial assumptions used to determine net cost:

Discount rate

4.12

%

3.45

%

3.90

%

Discount rate2.24 %3.07 %4.12 %

Expected return on assets

5.75

%

6.00

%

6.00

%

Expected return on assets5.75 %5.75 %5.75 %

Rate of increase in compensation

N/A

N/A

N/A

Rate of increase in compensationN/AN/AN/A

The target asset allocation for the Company’s pension plan by asset category for 20202022 and the actual asset allocation as of December 31, 20192021 and 20182020 by asset category are as follows:

Percentage of Plan Assets as of December 31,

Target

Allocation

Actual Allocation

Asset Category

2020

2019

2018

Cash

5

%

4

%

3

%

Equity funds:

Domestic

45

47

50

International

18

18

27

Fixed income funds

32

31

20

Total

100

%

100

%

100

%

Percentage of Plan Assets as of December 31,
Target
Allocation
2022
Actual Allocation
Asset Category20212020
Cash5 %4 %5 %
Equity funds:
Domestic47 47 34 
International15 16 17 
Fixed income funds33 33 44 
Total100 %100 %100 %

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Thecertain options provided under the American Rescue Plan Act of 2021, enacted on March 11, 2021, the Company expectsis not required to contribute approximately $4.1 millionadditional amounts to itsthe defined benefit pension plan in 2020.

2022.

Future benefit payments under the plans are estimated as follows:
(in thousands)
Year ended December 31,
2022$6,881 
20236,795 
20246,747 
20256,657 
20266,580 
2027-203130,545 
Total$64,205 
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(in thousands)

Year ended December 31,

2020

$

6,822

2021

6,789

2022

6,724

2023

6,637

2024

6,611

2025-2029

31,183

Total

$

64,766

TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following tables provide a reconciliation of the changes in the fair value of plan assets and plan benefit obligations during 20192021 and 2018,2020, and a summary of the funded status as of December 31, 20192021 and 2018:

2020:

Year Ended December 31,

Year Ended December 31,

(in thousands)

2019

2018

(in thousands)20212020

Change in Fair Value of Plan Assets

Change in Fair Value of Plan Assets

Balance at beginning of year

$

63,109

$

71,541

Balance at beginning of year$71,940 $73,357 

Actual return on plan assets

12,123

(4,758)

Actual return on plan assets6,844 899 

Company contribution

4,793

2,975

Company contribution1,235 4,408 

Benefit payments

(6,668)

(6,649)

Benefit payments(6,644)(6,724)

Balance at end of year

$

73,357

$

63,109

Balance at end of year$73,375 $71,940 

Year Ended December 31,

Year Ended December 31,

(in thousands)

2019

2018

(in thousands)20212020

Change in Benefit Obligations

Change in Benefit Obligations

Balance at beginning of year

$

95,869

$

106,218

Balance at beginning of year$107,824 $102,607 

Interest cost

3,801

3,496

Interest cost2,349 3,032 

Service cost

900

875

Service cost935 925 

Assumption change loss (gain)

8,373

(7,056)

Actuarial loss (gain)

332

(1,014)

Assumption change (gain) lossAssumption change (gain) loss(3,921)7,902 
Actuarial lossActuarial loss983 81 

Benefit payments

(6,668)

(6,650)

Benefit payments(6,644)(6,723)

Balance at end of year

$

102,607

$

95,869

Balance at end of year$101,526 $107,824 

As of December 31,

As of December 31,

(in thousands)

2019

2018

(in thousands)20212020

Funded status

$

(29,250)

$

(32,760)

Funded status$(28,151)$(35,884)

Net unfunded amounts recognized in Consolidated Balance Sheets consist of:

Net unfunded amounts recognized in Consolidated Balance Sheets consist of:

Current liabilities

$

(279)

$

(262)

Current liabilities$(292)$(293)

Long-term liabilities

(28,971)

(32,498)

Long-term liabilities(27,859)(35,591)

Total net unfunded amount recognized in Consolidated Balance Sheets

$

(29,250)

$

(32,760)

Total net unfunded amount recognized in Consolidated Balance Sheets$(28,151)$(35,884)

Amounts not yet recognized in net periodic benefit cost and included in accumulated other comprehensive loss consist of net actuarial losses before income taxes of $56.5 million and $57.6$65.2 million as of December 31, 20192021 and 2018,2020, respectively.

In 2019, net other comprehensive income of $1.2 million consisted of reclassification adjustments for the amortization of previously existing actuarial losses and net actuarial losses arising during the period. In 2018, net other comprehensive income of $1.1 million consisted of reclassification adjustments for the amortization of previously existing actuarial losses and net actuarial gains arising during the period. In 2017, net other comprehensive income of $2.4 million consisted of reclassification adjustments for the amortization of previously existing actuarial losses and net actuarial gains arising during the period.

The estimated amount of the net accumulated loss (consisting of net actuarial losses) that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2020 is $2.4 million.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The discount rate used in determining the accumulated post-retirement benefit obligation was 3.1%2.7% as of December 31, 20192021 and 4.1%2.2% as of December 31, 2018.2020. The discount rate used for the accumulated post-retirement obligation was derived using a blend of U.S. Treasury and high-quality corporate bond discount rates.

The expected long-term rate of return on assets assumption was 5.8% for 2019both 2021 and 6.0% for 2018.2020. The expected long-term rate of return on assets assumption was developed considering forward looking capital market assumptions and historical return expectations for each asset class assuming the plans’ target asset allocation and full availability of invested assets.

Closely held fund strategies seek to capitalize on inefficiencies identified across different asset classes or markets and include long-shortinvestments in both long and short equity and long equity, event-driven, multi-strategy and distressed credit.

securities.

Plan assets were measured at fair value. Registered investment companiesMutual funds are public investment vehicles valued using the Net Asset Value (“NAV”) of shares held by the pension plan at year-end. Equity partnerships and fixed income funds are valued based on quoted market prices in active markets. Closely held funds, held by the pension plan, which are only available through private offerings, do not have readily determinable fair values. Estimates of fair value of these funds were determined using the information provided by the fund managers and are generally based on the NAV per share or its equivalent.
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TUTOR PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table sets forth the pension plan assets at fair value in accordance with the fair value hierarchy described in Note 13:

12:
As of December 31, 2021As of December 31, 2020
Fair Value HierarchyFair Value Hierarchy
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash and cash equivalents$2,533 $— $— $2,533 $1,582 $— $— $1,582 
Fixed income funds— 3,057 — 3,057 2,000 3,086 — 5,086 
Mutual funds54,966 — — 54,966 54,671 — — 54,671 
$57,499 $3,057 $— $60,556 $58,253 $3,086 $— $61,339 
Closely held funds(a)
Equity partnerships4,259 3,700 
Hedge fund investments8,560 6,901 
Total closely held funds(a)
12,819 10,601 
Total$57,499 $3,057 $— $73,375 $58,253 $3,086 $— $71,940 

As of December 31, 2019

As of December 31, 2018

Fair Value Hierarchy

Fair Value Hierarchy

(in thousands)

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

Cash and cash equivalents

$

2,867

$

—

$

—

$

2,867

$

7,587

$

—

$

—

$

7,587

Fixed income funds

—

2,861

—

2,861

—

2,585

—

2,585

Mutual funds

54,085

—

—

54,085

36,436

—

—

36,436

$

56,952

$

2,861

$

—

$

59,813

$

44,023

$

2,585

$

—

$

46,608

Closely held funds(a)

Equity partnerships

3,660

5,580

Hedge fund investments

9,884

10,921

Total closely held funds(a)

13,544

16,501

Total

$

56,952

$

2,861

$

—

$

73,357

$

44,023

$

2,585

$

—

$

63,109

_____________________________________________________________________________________________________________

(a)CloselyThe pension plan’s investments in closely held funds in private investment were comprised of a combination of Level 1, 2 and 3 investments, but wereare not categorized in the fair value hierarchy because they wereare measured at NAV using the practical expedient under ASC 820, Fair Value Measurement (“ASC 820”). The underlying holdings of closely held funds were comprised of a combination of Level 1, 2 and 3 investments, and in some cases, may also include investments not categorized in the fair value hierarchy because they are measured at NAV using the practical expedient, as described above.

As of December 31, 20192021 and 2018,2020, pension plan assets included approximately $13.5$12.8 million and $16.5$10.6 million, respectively, of investments in hedge funds and equity partnerships which do not have readily determinable fair values. The underlying holdings of the funds were comprised of a combination of assets for which the estimate of fair value is determined using information provided by fund managers.

The plans have benefit obligations in excess of the fair value of each plan’s assets as follows:

As of December 31, 2019

As of December 31, 2018

Benefit

Benefit

Pension

Equalization

Pension

Equalization

As of December 31, 2021As of December 31, 2020

(in thousands)

Plan

Plan

Total

Plan

Plan

Total

(in thousands)Pension
Plan		Benefit
Equalization
Plan		TotalPension
Plan		Benefit
Equalization
Plan		Total

Projected benefit obligation

$

99,515

$

3,092

$

102,607

$

92,816

$

3,053

$

95,869

Projected benefit obligation$98,570 $2,956 $101,526 $104,657 $3,167 $107,824 

Accumulated benefit obligation

$

99,515

$

3,092

$

102,607

$

92,816

$

3,053

$

95,869

Accumulated benefit obligation$98,570 $2,956 $101,526 $104,657 $3,167 $107,824 

Fair value of plans' assets

73,357

—

73,357

63,109

—

63,109

Fair value of plans' assets73,375 — 73,375 71,940 — 71,940 

Projected benefit obligation greater than fair value of plans' assets

$

26,158

$

3,092

$

29,250

$

29,707

$

3,053

$

32,760

Projected benefit obligation greater than fair value of plans' assets$25,195 $2,956 $28,151 $32,717 $3,167 $35,884 

Accumulated benefit obligation greater than fair value of plans' assets

$

26,158

$

3,092

$

29,250

$

29,707

$

3,053

$

32,760

Accumulated benefit obligation greater than fair value of plans' assets$25,195 $2,956 $28,151 $32,717 $3,167 $35,884 

Section 401(k) Plan

The Company has a contributory Section 401(k) plan which covers its executive, professional, administrative and clerical employees, subject to certain specified service requirements. The cost recognized by the Company for its 401(k) plan was $4.4 million in 2021, $4.3 million in 2020 and $4.1 million in 2019

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and $4.2 million in both 2018 and 2017.2019. The Company’s contribution is based on a non-discretionary match of employees’ contributions, as defined by the plan.

Multiemployer Plans

In addition to the Company’s defined benefit pension and contribution plans discussed above, the Company participates in multiemployer pension plans for its union construction employees. Contributions are based on the hours worked by employees covered under various collective bargaining agreements. Under the Employee Retirement Income Security Act, a contributor to a multiemployer plan is only liable for its proportionate share of a plan’s unfunded vested liability upon termination, or withdrawal from a plan. The Company currently has no intention of withdrawing from any of the multiemployer pension plans
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
in which it participates and, therefore, has not recognized a liability for its proportionate share of any unfunded vested liabilities associated with these plans.

The following table summarizes key information for the plans that the Company made significant contributions to during the three years ended December 31, 2019:

2021:
Pension Protections Act
Zone Status
FIP/RP
Status
Pending or
Implemented(a)
Company Contributions
(amounts in millions)		Expiration
Date of
Collective
Bargaining
Agreement
Pension FundEIN/Pension
Plan Number		20212020
2021(b)
20202019Surcharge
Imposed
The Pension, Hospitalization and Benefit Plan of the Electrical Industry - Pension Trust Fund13-6123601/001GreenGreenN/A$9.5 $10.1 (c)$9.3 (c)No4/13/2022
Joint Pension Fund, Local Union 164 IBEW22-6031199GreenYellowImplemented6.8 2.5 0.8 No6/2/2025
Excavators Union Local 731 Pension Fund13-1809825/002GreenGreenN/A4.0 4.8 5.1 No4/30/2026
Carpenters Pension Trust Fund for Northern California94-6050970RedRedImplemented2.9 4.6 (d)4.0 No6/30/2023
Northern California Electrical Workers Pension Plan94-6062674GreenGreenN/A2.8 3.5 (c)3.0 No5/31/2022

Expiration

FIP/RP

Date of

Pension Protections Act

Status

Company Contributions

Collective

EIN/Pension

Zone Status

Pending Or

(amounts in millions)

Surcharge

Bargaining

Pension Fund

Plan Number

2019

2018

Implemented

2019(b)

2018(b)

2017

Imposed

Agreement

The Pension, Hospitalization and Benefit Plan of the Electrical Industry - Pension Trust Fund

13-6123601/001

Green

Green

N/A

$

9.3

$

12.2

$

16.0

(a)

No

4/13/2022

Carpenters Pension Trust Fund for Northern California

94-6050970

Red

Red

Implemented

4.0

4.9

8.2

No

6/30/2023

Excavators Union Local 731 Pension Fund

13-1809825/002

Green

Green

N/A

5.1

4.1

4.3

No

4/30/2022

Northern California Electrical Workers Pension Plan

94-6062674

Green

Green

N/A

3.0

4.1

5.2

No

5/31/2022

Laborers Pension Trust Fund for Northern California

94-6277608

Green

Green

N/A

3.4

3.8

6.6

No

6/30/2023

Steamfitters Industry Pension Fund

13-6149680/001

Green

Green

N/A

1.7

3.5

3.9

(a)

No

6/30/2020

_____________________________________________________________________________________________________________

(a)These amounts exceeded 5% of the respective totalThe “FIP/RP Status Pending or Implemented” column indicates plans for which a funding improvement plan contributions.(“FIP”) or a rehabilitation plan (“RP”) is either pending or implemented.

(b)The Company's contributions as a percentage of total plan contributions were not available for the 2019 and 20182021 plan yearsyear for any of the above pension funds, excluding Excavators Union Local 731funds.
(c)These amounts exceeded 5% of the respective total plan contributions.
(d)The Company’s contributions as a percentage of total plan contributions were not available for the 2020 plan year for the Carpenters Pension Fund, Northern California Electrical Workers Pension Plan and Steamfitters Industry PensionTrust Fund for the 2018 plan year.Northern California.

In addition to the individually significant plans described above, the Company also contributed approximately $31.4$43.6 million in 2019, $29.32021, $44.3 million in 20182020 and $27.8$35.7 million in 20172019 to other multiemployer pension plans. Funding for these payments is principally provided for in the contracts with our customers.

13.

12.    Fair Value Measurements

The fair value hierarchy established by ASC 820 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

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The following fair value hierarchy table presents the Company’s assets that are measured at fair value on a recurring basis as of December 31, 20192021 and 2018:

2020:
As of December 31, 2021As of December 31, 2020
Fair Value HierarchyFair Value Hierarchy
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash and cash equivalents(a)
$202,197 $— $— $202,197 $374,289 $— $— $374,289 
Restricted cash(a)
9,199 — — 9,199 77,563 — — 77,563 
Restricted investments(b)
— 84,355 — 84,355 — 78,912 — 78,912 
Investments in lieu of retainage(c)
27,472 58,856 — 86,328 92,609 1,300 — 93,909 
Total$238,868 $143,211 $— $382,079 $544,461 $80,212 $— $624,673 

As of December 31, 2019

As of December 31, 2018

Fair Value Hierarchy

Fair Value Hierarchy

(in thousands)

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

Cash and cash equivalents(a)

$

193,685

$

—

$

—

$

193,685

$

116,075

$

—

$

—

$

116,075

Restricted cash(a)

8,416

—

—

8,416

3,788

—

—

3,788

Restricted investments(b)

—

70,974

—

70,974

—

58,142

—

58,142

Investments in lieu of retainage(c)

89,572

1,219

—

90,791

62,858

1,190

—

64,048

Total

$

291,673

$

72,193

$

—

$

363,866

$

182,721

$

59,332

$

—

$

242,053

_____________________________________________________________________________________________________________

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

(b)Restricted investments, as of December 31, 2019,2021, consist of investments in corporate debt securities of $35.8$46.7 million, U.S. government agency securities of $33.8$37.1 million and corporate certificates of deposits of $1.4$0.6 million, all with maturities of up to five years, and are valued based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets and are therefore classified as Level 2 assets. As of December 31, 2018,2020, restricted investments consisted of investments in corporate debt securities of $30.4 million and U.S. government agency securities of $27.7$40.5 million, corporate debt securities of $37.5 million and corporate certificates of deposits of $0.9 million, all with maturities
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
of up to five years. The amortized cost of these available-for-sale securities at December 31, 20192021 and 20182020 was not materially different from the fair value.

(c)Investments in lieu of retainage are included in retainage receivable and as of December 31, 20192021 are comprised of corporate debt securities of $57.5 million, money market funds of $89.6$27.5 million and municipal bonds of $1.2$1.3 million. The fair values of the money market funds are measured using quoted market prices; therefore, they are classified as Level 1 assets. The corporate and municipal bonds have maturity periods up to five years, and their fair values are determined from a compilation of municipal bonds are measured using readily available pricing sources for comparable instruments;primarily observable market information, third-party quoted market prices, broker quotes in non-active markets or similar assets; therefore, they are classified as Level 2 assets. As of December 31, 2018,2020, investments in lieu of retainage consisted of money market funds of $62.9$92.6 million and municipal bonds of $1.2$1.3 million. The amortized cost of these available-for-sale securities at December 31, 20192021 and 20182020 was not materially different from the fair value.

The Company did not have material transfers between Levels 1 and 2 during the years ended December 31, 2019 and 2018.

The carrying values of receivables, payables and other amounts arising out of normal contract activities, including retainage, which may be settled beyond one year, are estimated to approximate fair value. Of the Company’s long-term debt, the fair value of the 2017 Senior Notes was $485.0$504.9 million and $466.8$495.0 million as of December 31, 20192021 and 2018,2020, respectively. The fair value of the Convertible Notes was $193.4 million and $184.4$69.1 million as of December 31, 20192020 and 2018, respectively.the Company repaid the remaining principal balance of the notes at maturity on June 15, 2021. The fair values of the 2017 Senior Notes and Convertible Notes were determined using Level 1 inputs, specifically current observable market prices. The fair value of the Term Loan B was $419.7 million and $425.0 million as of December 31, 2021 and 2020, respectively, and was determined using Level 2 inputs, specifically third-party quoted market prices. The reported value of the Company’s remaining borrowings approximates fair value as of December 31, 20192021 and 2018.

During the year ended December 31, 2019, the Company acquired an additional 25% interest in a Civil segment joint venture. The Company’s 50% ownership interest prior to the acquisition was accounted for under the proportionate consolidation method and had a carrying value of $3.2 million. Through this acquisition, the Company’s interest increased from 50% to 75%, and it obtained a controlling financial interest in the joint venture, thereby requiring consolidation by the Company. The transaction was accounted for as a business combination achieved in stages, and under ASC 805, Business Combinations, the previously held equity interest in the joint venture was remeasured at the acquisition date fair value with the resulting gain of $37.8 million recognized in earnings, which was included in general and administrative expenses in the Company’s Consolidated Statement of Operations. The fair value of the joint venture and the Company’s existing investment therein was determined based on the fair value of the underlying assets and liabilities acquired by applying an income approach that used discounted future estimated cash flows based on projected revenues, expenses and weighted-average cost of capital. The fair value of the assets and liabilities of the joint venture was recognized in the Company’s consolidated financial statements as of the acquisition date with the 25% interest not owned by the Company recorded as a noncontrolling interest. The acquisition resulted in the recording of an intangible asset for construction contract backlog of $75.6 million. The fair values of the other assets acquired and liabilities assumed were not material. Pro forma results of operations for this acquisition of additional interest in the joint venture have not been presented because they are not material to the Company’s results of operations.

14.2020.

13.    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, the Company assesses its partnerships and joint ventures at inception to determine if any meet the qualifications of a VIE. The Company considers a joint venture a VIE if either (a) the total equity investment is not sufficient to permit the entity to finance its

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 thea 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 December 31, 2019,2021, the Company had unconsolidated VIE-related current assets and liabilities of $1.5$0.7 million and $1.4$0.4 million, respectively, included in the Company’s Consolidated Balance Sheet. As of December 31, 2018,2020, the Company had unconsolidated VIE-related current assets and liabilities of $4.0$0.6 million and $3.8$0.5 million, respectively, included in the Company’s Consolidated Balance Sheet. The Company’s maximum exposure to loss as a result of its investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding commitments. There were no future funding requirements for the unconsolidated VIEs as of December 31, 2019.

2021.

As of December 31, 2019,2021, the Company’s Consolidated Balance Sheet included current and noncurrent assets of $365.0$568.2 million and $52.0$3.0 million, respectively, as well as current liabilities of $556.1$496.9 million related to the operations of its consolidated VIEs. As of December 31, 2018,2020, the Company’s Consolidated Balance Sheet included current and noncurrent assets of $173.9$405.7 million and $51.5$14.2 million, respectively, as well as current liabilities of $319.9$514.9 million related to the operations of its consolidated VIEs.

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

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 aan original combined value of approximately $2.8 billion. The
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Company has a 75% interest in the joint venture with the remaining 25% held by O&G Industries, Inc. (“O&G”). 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 $1.4 billion transportation infrastructure project in Newark, New Jersey.Jersey with an original value of approximately $1.4 billion. The Company has an 80% interest in the joint venture with the remaining 20% held by Parsons. The joint venture was initially financed with contributions from the partners and, per the terms of the joint venture agreement, the partners may be required to provide additional capital contributions in the future. The Company has determined that this joint venture is a VIE for which the Company is the primary beneficiary.

15.

14.    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 3 segments: Civil, Building and Specialty Contractors. These segments are determined based on how the Company’s Chairman and Chief Executive Officer (chief operating decision maker) aggregates business units when evaluating performance and allocating resources.

The Civil segment specializes in public works construction and the replacement and reconstruction of infrastructure. The 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.

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

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

To the extent that a contract is co-managed and co-executed among segments, the Company allocates the share of revenues and costs of the contract to each segment to reflect the shared responsibilities in the management and execution of the project.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following tables set forth certain reportable segment information relating to the Company’s operations for the years ended December 31, 2019, 20182021, 2020 and 2017:2019:
Reportable Segments
(in thousands)CivilBuildingSpecialty
Contractors		TotalCorporateConsolidated
Total
Year ended December 31, 2021
Total revenue$2,443,828 $1,574,759 $1,120,115 $5,138,702 $— $5,138,702 
Elimination of intersegment revenue(348,068)(146,657)(2,147)(496,872)— (496,872)
Revenue from external customers$2,095,760 $1,428,102 $1,117,968 $4,641,830 $— $4,641,830 
Income (loss) from construction operations(a)
$266,214 $28,721 $(9,961)$284,974 $(58,170)(b)$226,804 
Capital expenditures$37,067 $359 $476 $37,902 $692 $38,594 
Depreciation and amortization(c)
$102,723 $1,677 $3,316 $107,716 $10,513 $118,229 
Year ended December 31, 2020
Total revenue$2,565,210 $2,114,459 $1,135,018 $5,814,687 $— $5,814,687 
Elimination of intersegment revenue(365,311)(129,818)(795)(495,924)— (495,924)
Revenue from external customers$2,199,899 $1,984,641 $1,134,223 $5,318,763 $— $5,318,763 
Income (loss) from construction operations(d)
$245,835 $53,158 $17,203 $316,196 $(53,852)(b)$262,344 
Capital expenditures$51,044 $878 $1,917 $53,839 $942 $54,781 
Depreciation and amortization(c)
$90,250 $1,703 $3,983 $95,936 $11,098 $107,034 
Year ended December 31, 2019
Total revenue$2,054,097 $1,764,753 $929,738 $4,748,588 $— $4,748,588 
Elimination of intersegment revenue(274,745)(22,713)(298)(297,756)— (297,756)
Revenue from external customers$1,779,352 $1,742,040 $929,440 $4,450,832 $— $4,450,832 
Income (loss) from construction operations(e)
$(150,837)$23,655 $(172,637)$(299,819)$(65,188)(b)$(365,007)
Capital expenditures$82,156 $518 $688 $83,362 $834 $84,196 
Depreciation and amortization(c)
$47,905 $1,934 $4,136 $53,975 $11,069 $65,044 

Reportable Segments

Specialty

Segment

Consolidated

(in thousands)

Civil

Building

Contractors

Total

Corporate

Total

Year ended December 31, 2019

Total revenue

$

2,054,097

$

1,764,753

$

929,738

$

4,748,588

$

—

$

4,748,588

Elimination of intersegment revenue

(274,745)

(22,713)

(298)

(297,756)

—

(297,756)

Revenue from external customers

$

1,779,352

$

1,742,040

$

929,440

$

4,450,832

$

—

$

4,450,832

Income (loss) from construction operations(a)

$

(150,837)

$

23,655

$

(172,637)

$

(299,819)

$

(65,188)

(b)

$

(365,007)

Capital expenditures

$

82,156

$

518

$

688

$

83,362

$

834

$

84,196

Depreciation and amortization(c)

$

47,905

$

1,934

$

4,136

$

53,975

$

11,069

$

65,044

Year ended December 31, 2018

Total revenue

$

1,810,232

$

1,866,902

$

1,006,870

$

4,684,004

$

—

$

4,684,004

Elimination of intersegment revenue

(224,139)

(5,203)

—

(229,342)

—

(229,342)

Revenue from external customers

$

1,586,093

$

1,861,699

$

1,006,870

$

4,454,662

$

—

$

4,454,662

Income (loss) from construction operations(d)

$

168,256

$

43,939

$

43,430

$

255,625

$

(63,749)

(b)

$

191,876

Capital expenditures

$

73,866

$

1,655

$

777

$

76,298

771

77,069

Depreciation and amortization(c)

$

29,685

$

1,956

$

4,358

$

35,999

$

11,268

$

47,267

Year ended December 31, 2017

Total revenue

$

1,856,164

$

1,982,857

$

1,213,708

$

5,052,729

$

—

$

5,052,729

Elimination of intersegment revenue

(253,989)

(41,532)

—

(295,521)

—

(295,521)

Revenue from external customers

$

1,602,175

$

1,941,325

$

1,213,708

$

4,757,208

$

—

$

4,757,208

Income (loss) from construction operations

$

192,207

$

34,199

$

18,938

$

245,344

$

(65,867)

(b)

$

179,477

Capital expenditures

$

27,694

$

267

$

721

$

28,682

$

1,598

$

30,280

Depreciation and amortization(c)

$

33,767

$

2,021

$

4,699

$

40,487

$

11,443

$

51,930

_____________________________________________________________________________________________________________

(a)During the year ended December 31, 2021, the Company recognized favorable adjustments in income (loss) from construction operations in the Civil segment of $29.0 million (an after-tax impact of $20.9 million, or $0.41 per diluted share) and $16.3 million (an after-tax impact of $13.5 million, or $0.26 per diluted share) on two mass-transit projects, reflecting improved profitability as a result of the negotiation and settlement of certain change orders and the associated mitigation of certain risks in 2021 as the projects progressed towards completion. The Company’s income (loss) from construction operations was negatively impacted by $13.3 million (an after-tax impact of $10.3 million, or $0.20 per diluted share) due to changes in estimates on a Civil segment transportation project in the Northeast that reflected a charge and the negative impact to earnings from growth in unapproved change orders, which resulted in a reduction in the project’s percentage of completion (and, correspondingly, a reduction in the percentage of estimated profit recognized for the year ended December 31, 2021 for this project).


The Company’s income (loss) from construction operations was also negatively impacted by $13.3 million (an after-tax impact of $10.2 million, or $0.20 per diluted share) due to changes in estimates on a Building segment transportation project in the Northeast that included a charge and the negative impact to earnings from growth in unapproved change orders.

In addition, in the Specialty Contractors segment, the Company recorded a reduction of $20.1 million in cost of operations during 2021 (a favorable after-tax impact of $14.5 million, or $0.28 per diluted share) due to a favorable legal judgment on a completed electrical project. The judgment awarded the Company the recovery of certain costs previously incurred. The Company’s income (loss) from construction operations for the year ended December 31, 2021 was also negatively impacted by $19.0 million (an after-tax impact of $13.7 million, or $0.27 per diluted share) and $17.6 million (an after-tax impact of $12.7 million, or $0.25 per diluted share) on the mechanical and electrical components, respectively, of a transportation project in the Northeast and $16.2 million (an after-tax impact of $11.7 million, or $0.23 per diluted share) on an electrical mass-transit project also in the Northeast, all of which were due to changes in estimates that included charges and/or the negative impact to earnings from growth in unapproved change orders.
(b)Consists primarily of corporate general and administrative expenses.
(c)Depreciation and amortization is included in income (loss) from construction operations.
(d)During the year ended December 31, 2020, the Company recorded a charge of $15.2 million in income (loss) from construction operations (an after-tax impact of $11.0 million, or $0.22 per diluted share) due to an unfavorable legal ruling pertaining to a mechanical project in California in the Specialty Contractors segment, as well as a charge of $13.2 million (an after-tax impact of $9.6 million, or $0.19 per diluted share) due to an adverse arbitration ruling pertaining to an electrical project in New York in the Specialty Contractors segment. The Company also recorded a gain of $25.7 million in
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Specialty Contractors segment general and administrative expenses (an after-tax impact of $18.6 million, or $0.36 per diluted share) as a result of a favorable arbitration decision and subsequent settlement of the related employment dispute.
(e)During the year ended December 31, 2019, the Company recorded a non-cash goodwill impairment charge of $379.9 million in income (loss) from construction operations (an after-tax impact of $330.5 million, or $6.58 per diluted share) resulting from an interim impairment test the Company performed as of June 1, 2019. For further information and breakdown of the goodwill impairment charge by segment, see Note 6. In addition, during the year ended December 31, 2019 the Company recorded a charge of $166.8 million in income (loss) from construction operations (an after-tax impact of $119.4 million, or $2.38 per diluted share), which principally impacted the Civil segment, as a result of the adverse jury verdict on the Alaskan Way Viaduct Matter, as discussed in Note 8. Lastly, the Company recognized a one-time gain of $37.8 million (an after-tax impact of $27.1 million, or $0.54 per diluted share) in Civil segment general and administrative expenses related to a remeasurement of its investment in a joint venture (see Note 13)6).

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

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

(d)During the year ended December 31, 2018, the Company recorded a charge of $17.8 million in income (loss) from construction operations (an after-tax impact of $12.8 million, or $0.25 per diluted share), which was primarily non-cash, as a result of the unexpected adverse outcome of an arbitration decision related to a subcontract back charge dispute on a Civil segment project in New York that was completed in 2013.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The above were the only changes in estimates considered material to the Company’s results of operations during the periods presented herein.

Total assets by segment were as follows:
As of December 31,
(in thousands)20212020
Civil$3,310,648 $3,141,991 
Building980,989 1,147,649 
Specialty Contractors631,710 673,891 
Corporate and other(a)
(198,449)82,086 
Total assets$4,724,898 $5,045,617 

As of December 31,

(in thousands)

2019

2018

Civil

$

2,791,402

$

2,574,326

Building

995,298

913,746

Specialty Contractors

635,180

745,313

Corporate and other(a)

63,897

154,367

Total assets

$

4,485,777

$

4,387,752

_____________________________________________________________________________________________________________

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

Geographic Information

Information concerning principal geographic areas is as follows:
Year Ended December 31,
(in thousands)202120202019
Revenue:
United States$4,267,734 $4,953,045 $4,073,691 
Foreign and U.S. territories374,096 365,718 377,141 
Total revenue$4,641,830 $5,318,763 $4,450,832 
As of December 31,
(in thousands)20212020
Assets:
United States$4,479,873 $4,836,735 
Foreign and U.S. territories245,025 208,882 
Total assets$4,724,898 $5,045,617 

Year Ended December 31,

(in thousands)

2019

2018

2017

Revenue:

United States

$

4,073,691

$

4,180,206

$

4,613,644

Foreign and U.S. territories

377,141

274,456

143,564

Total revenue

$

4,450,832

$

4,454,662

$

4,757,208

As of December 31,

(in thousands)

2019

2018

Assets:

United States

$

4,271,722

$

4,225,143

Foreign and U.S. territories

214,055

162,609

Total assets

$

4,485,777

$

4,387,752

Reconciliation of Segment Information to Consolidated Amounts

A reconciliation of segment results to the consolidated income (loss) before income taxes is as follows:
Year Ended December 31,
(in thousands)202120202019
Income (loss) from construction operations$226,804 $262,344 $(365,007)
Other income (expense)2,004 (11,853)6,667 
Interest expense(69,026)(76,212)(67,494)
Income (loss) before income taxes$159,782 $174,279 $(425,834)
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Year Ended December 31,

(in thousands)

2019

2018

2017

Income (loss) from construction operations

$

(365,007)

$

191,876

$

179,477

Other income, net

6,667

4,256

43,882

Interest expense

(67,494)

(63,519)

(69,384)

Income (loss) before income taxes

$

(425,834)

$

132,613

$

153,975

TUTOR PERINI CORPORATION AND SUBSIDIARIES

16.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15.    Related Party Transactions

The Company leases, at market rates, certain facilities from an entity owned by Ronald N. Tutor, the Company’s Chairman and Chief Executive Officer. Under these leases, the Company paid $3.6 million in 2021, $3.2 million in 2020 and $3.1 million in 2019, $3.0 million in 2018 and $2.8 million in 2017, and recognized expense of $4.6 million in 2021 and $3.2 million in each of the three years.

both 2020 and 2019.

Raymond R. Oneglia, Vice Chairman of O&G, is a director of the Company. The Company occasionally forms construction project joint ventures with O&G. During the three years ended December 31,, 2019, 2021, the Company had active joint ventures with O&G including two2 infrastructure projects in the northeastern United States that were completed in 2017 and 2two mass-transit projects in Los Angeles, California to construct the Purple Line Extension Section 2 (Tunnels and Stations) and Section 3 (Stations), in which the Company’s and O&G’s joint venture interests are 75% and 25%, respectively. O&G may provide equipment and services to these

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

joint ventures on customary trade terms; there were no material paymentspayments made by these joint ventures to O&G for services and equipment during the years ended December 31, 2019, 20182021, 2020 and 2017.2019.

Peter Arkley, Senior Managing Director, Construction Services Group, of Alliant Insurance Services, Inc. (“Alliant”), is a director of the Company. The Company uses Alliant for various insurance-related services. The associated expenses for services provided for the years ended December 31, 2021, 2020 and 2019 2018 and 2017 were $18.4$16.4 million, $14.7$16.0 million and $17.6$18.4 million, respectively. The Company owed Alliant $2.7$1.5 million and $4.1$2.7 million as of December 31, 20192021 and 2018,2020, respectively, for services rendered.

17.     Unaudited Quarterly Financial Data

The following table presents selected unaudited quarterly financial data for each full quarterly period of 2019 and 2018:

(in thousands, except per common share amounts)

First

Second

Third

Fourth

Year Ended December 31, 2019

Quarter

Quarter

Quarter

Quarter

Revenue

$

958,487

$

1,125,275

$

1,189,345

$

1,177,725

Gross profit (loss)

88,470

100,943

115,063

(62,704)

Income (loss) from construction operations

22,913

(341,717)

47,943

(94,146)

Income (loss) before income taxes

6,910

(358,339)

32,312

(106,717)

Net income (loss)

4,722

(315,439)

26,721

(76,229)

Net income (loss) attributable to Tutor Perini Corporation

(356)

(320,530)

19,313

(86,117)

Earnings (loss) per common share:

Basic

$

(0.01)

$

(6.38)

$

0.38

$

(1.71)

Diluted

$

(0.01)

$

(6.38)

$

0.38

$

(1.71)

(in thousands, except per common share amounts)

First

Second

Third

Fourth

Year Ended December 31, 2018

Quarter

Quarter

Quarter

Quarter

Revenue

$

1,028,156

$

1,120,085

$

1,123,137

$

1,183,284

Gross profit

67,068

118,640

111,124

157,621

Income (loss) from construction operations

(925)

54,815

47,306

90,680

Income (loss) before income taxes

(15,210)

39,867

32,804

75,152

Net income (loss)

(10,942)

27,896

25,436

55,391

Net income (loss) attributable to Tutor Perini Corporation

(12,124)

24,883

21,272

49,405

Earnings (loss) per common share:

Basic

$

(0.24)

$

0.50

$

0.43

$

0.99

Diluted

$

(0.24)

$

0.49

$

0.42

$

0.98

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