(State or Other Jurisdiction of (Address of Principal Executive Offices) Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $1.00 par value TPC The New York Stock Exchange ☒ ☐ ☐ 50,827,205. TUTORPERINI CORPORATION AND SUBSIDIARIES PART I. –FINANCIAL INFORMATION Three Months Ended Six Months Ended June 30, June 30, (in thousands, except per common share amounts) 2020 2019 2020 2019 REVENUE $ 1,276,427 $ 1,125,275 $ 2,527,156 $ 2,083,762 COST OF OPERATIONS (1,158,673) (1,024,332) (2,298,322) (1,894,349) GROSS PROFIT 117,754 100,943 228,834 189,413 General and administrative expenses (60,058) (62,797) (123,911) (128,354) Goodwill impairment — (379,863) — (379,863) INCOME (LOSS) FROM CONSTRUCTION OPERATIONS 57,696 (341,717) 104,923 (318,804) Other income (expense) (797) 900 (316) 1,322 Interest expense (16,464) (17,522) (32,900) (33,947) INCOME (LOSS) BEFORE INCOME TAXES 40,435 (358,339) 71,707 (351,429) Income tax (expense) benefit (9,576) 42,900 (14,710) 40,712 NET INCOME (LOSS) 30,859 (315,439) 56,997 (310,717) LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 12,150 5,091 20,917 10,169 NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 18,709 $ (320,530) $ 36,080 $ (320,886) BASIC EARNINGS (LOSS) PER COMMON SHARE $ 0.37 $ (6.38) $ 0.71 $ (6.40) DILUTED EARNINGS (LOSS) PER COMMON SHARE $ 0.37 $ (6.38) $ 0.71 $ (6.40) WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: BASIC 50,667 50,224 50,502 50,161 DILUTED 50,935 50,224 50,885 50,161 TUTOR PERINI CORPORATION AND SUBSIDIARIES Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 NET INCOME (LOSS) $ 30,859 $ (315,439) $ 56,997 $ (310,717) OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: Defined benefit pension plan adjustments 424 331 847 661 Foreign currency translation adjustments 1,655 810 (2,358) 1,158 Unrealized gain in fair value of investments 1,306 686 1,848 1,359 TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX 3,385 1,827 337 3,178 COMPREHENSIVE INCOME (LOSS) 34,244 (313,612) 57,334 (307,539) LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 13,004 5,248 19,751 10,428 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 21,240 $ (318,860) $ 37,583 $ (317,967) TUTOR PERINI CORPORATION AND SUBSIDIARIES As of June 30, As of December 31, (in thousands, except share and per share amounts) 2020 2019 ASSETS ASSETS CURRENT ASSETS: Cash and cash equivalents ($92,056 and $103,850 related to variable interest entities ("VIEs")) $ 182,599 $ 193,685 Restricted cash 8,892 8,416 Restricted investments 75,382 70,974 Accounts receivable ($129,081 and $91,090 related to VIEs) 1,586,560 1,354,519 Retainage receivable ($98,304 and $89,132 related to VIEs) 581,495 562,375 Costs and estimated earnings in excess of billings ($26,392 and $22,764 related to VIEs) 1,149,103 1,123,544 Other current assets ($55,286 and $58,128 related to VIEs) 222,392 197,473 Total current assets 3,806,423 3,510,986 PROPERTY AND EQUIPMENT ("P&E"), net of accumulated depreciation of $417,575 and $388,147 (net P&E of $34,669 and $49,919 related to VIEs) 504,722 509,685 GOODWILL 205,143 205,143 INTANGIBLE ASSETS, NET 140,674 155,270 OTHER ASSETS 106,641 104,693 TOTAL ASSETS $ 4,763,603 $ 4,485,777 LIABILITIES AND EQUITY LIABILITIES AND EQUITY CURRENT LIABILITIES: Current maturities of long-term debt, net of unamortized discount and debt issuance costs totaling $11,911 and $0 $ 320,790 $ 124,054 Accounts payable ($110,676 and $93,848 related to VIEs) 770,515 682,699 Retainage payable ($19,589 and $13,967 related to VIEs) 278,045 252,181 Billings in excess of costs and estimated earnings ($434,608 and $422,847 related to VIEs) 962,446 844,389 Accrued expenses and other current liabilities ($16,212 and $25,402 related to VIEs) 209,576 206,533 Total current liabilities 2,541,372 2,109,856 LONG-TERM DEBT, less current maturities, net of unamortized discount and debt issuance costs totaling $5,190 and $23,343 515,629 710,422 DEFERRED INCOME TAXES 41,329 35,686 OTHER LONG-TERM LIABILITIES 201,132 199,288 TOTAL LIABILITIES 3,299,462 3,055,252 COMMITMENTS AND CONTINGENCIES (NOTE 11) EQUITY Stockholders' equity: Preferred stock - authorized 1,000,000 shares ($1 par value), NaN issued — — Common stock - authorized 75,000,000 shares ($1 par value), issued and outstanding 50,771,288 and 50,278,816 shares 50,771 50,279 Additional paid-in capital 1,124,672 1,117,972 Retained earnings 350,071 313,991 Accumulated other comprehensive loss (40,597) (42,100) Total stockholders' equity 1,484,917 1,440,142 Noncontrolling interests (20,776) (9,617) TOTAL EQUITY 1,464,141 1,430,525 TOTAL LIABILITIES AND EQUITY $ 4,763,603 $ 4,485,777 TUTOR PERINI CORPORATION AND SUBSIDIARIES Six Months Ended June 30, (in thousands) 2020 2019 Cash Flows from Operating Activities: Net income (loss) $ 56,997 $ (310,717) Adjustments to reconcile net income (loss) to net cash provided by (used) in operating activities: Goodwill impairment — 379,863 Depreciation 34,180 26,543 Amortization of intangible assets 14,596 1,771 Share-based compensation expense 8,264 10,078 Change in debt discount and deferred debt issuance costs 7,046 6,442 Deferred income taxes 5,423 (50,321) Loss (gain) on sale of property and equipment 31 (1,479) Changes in other components of working capital (68,471) (177,471) Other long-term liabilities 1,295 3,209 Other, net (1,131) 596 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 58,230 (111,486) Cash Flows from Investing Activities: Acquisition of property and equipment (31,386) (39,346) Proceeds from sale of property and equipment 1,082 3,629 Investment in securities (13,319) (13,660) Proceeds from maturities and sales of investments in securities 10,985 8,131 NET CASH USED IN INVESTING ACTIVITIES (32,638) (41,246) Cash Flows from Financing Activities: Proceeds from debt 752,843 716,139 Repayment of debt (757,141) (527,159) Cash payments related to share-based compensation (994) (2,363) Distributions paid to noncontrolling interests (30,910) (4,000) Contributions from noncontrolling interests — 5,379 Debt modification costs — (504) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (36,202) 187,492 Net increase (decrease) in cash, cash equivalents and restricted cash (10,610) 34,760 Cash, cash equivalents and restricted cash at beginning of period 202,101 119,863 Cash, cash equivalents and restricted cash at end of period $ 191,491 $ 154,623 2020. Certain amounts in the notes to the condensed consolidated financial statements of prior years have been reclassified to conform to the current year presentation. Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (3)Revenue Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 Civil segment revenue by end market: Mass transit (includes transportation and tunneling projects) $ 354,809 $ 243,620 $ 651,952 $ 389,870 Bridges 89,100 86,467 141,284 155,774 Highways 35,591 60,244 68,173 101,287 Military defense facilities 35,042 13,140 58,652 23,421 Water 29,548 4,658 53,292 14,326 Other 24,886 65,529 82,252 122,474 Total Civil segment revenue $ 568,976 $ 473,658 $ 1,055,605 $ 807,152 Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 Building segment revenue by end market: Commercial and industrial facilities $ 106,899 $ 115,193 $ 239,948 $ 224,546 Hospitality and gaming 107,942 53,576 226,929 122,885 Municipal and government 79,223 68,580 148,725 130,542 Mass transit (includes transportation projects) 66,552 41,211 124,399 70,388 Education facilities 47,038 47,062 78,660 89,590 Health care facilities 32,418 60,796 68,307 141,023 Mixed use 13,101 9,316 23,073 24,591 Other 19,848 32,584 44,744 58,219 Total Building segment revenue $ 473,021 $ 428,318 $ 954,785 $ 861,784 Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 Specialty Contractors segment revenue by end market: Mass transit (includes transportation and tunneling projects) $ 118,634 $ 100,016 $ 267,305 $ 181,411 Commercial and industrial facilities 20,499 43,618 74,004 87,641 Multi-unit residential 37,611 19,225 64,104 30,614 Education facilities 10,338 14,036 26,895 25,616 Mixed use 10,536 18,036 24,338 28,705 Health care facilities 4,283 9,248 6,805 20,899 Other 32,529 19,120 53,315 39,940 Total Specialty Contractors segment revenue $ 234,430 $ 223,299 $ 516,766 $ 414,826 Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Specialty Specialty (in thousands) Civil Building Contractors Total Civil Building Contractors Total Revenue by customer type: State and local agencies $ 503,828 $ 157,748 $ 113,623 $ 775,199 $ 381,438 $ 133,798 $ 114,255 $ 629,491 Federal agencies 42,590 34,648 11,292 88,530 26,979 44,396 2,761 74,136 Private owners 22,558 280,625 109,515 412,698 65,241 250,124 106,283 421,648 Total revenue $ 568,976 $ 473,021 $ 234,430 $ 1,276,427 $ 473,658 $ 428,318 $ 223,299 $ 1,125,275 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Specialty Specialty (in thousands) Civil Building Contractors Total Civil Building Contractors Total Revenue by customer type: State and local agencies $ 899,873 $ 303,764 $ 246,496 $ 1,450,133 $ 638,545 $ 278,484 $ 211,326 $ 1,128,355 Federal agencies 79,251 66,621 21,048 166,920 50,137 84,547 10,530 145,214 Private owners 76,481 584,400 249,222 910,103 118,470 498,753 192,970 810,193 Total revenue $ 1,055,605 $ 954,785 $ 516,766 $ 2,527,156 $ 807,152 $ 861,784 $ 414,826 $ 2,083,762 Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Specialty Specialty (in thousands) Civil Building Contractors Total Civil Building Contractors Total Revenue by contract type: Fixed price $ 455,928 $ 114,229 $ 205,531 $ 775,688 $ 349,945 $ 136,250 $ 187,826 $ 674,021 Guaranteed maximum price 281 248,738 4,038 253,057 1,644 185,050 7,315 194,009 Unit price 111,790 629 18,442 130,861 116,285 2,800 20,183 139,268 Cost plus fee and other 977 109,425 6,419 116,821 5,784 104,218 7,975 117,977 Total revenue $ 568,976 $ 473,021 $ 234,430 $ 1,276,427 $ 473,658 $ 428,318 $ 223,299 $ 1,125,275 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Specialty Specialty (in thousands) Civil Building Contractors Total Civil Building Contractors Total Revenue by contract type: Fixed price $ 864,899 $ 219,827 $ 454,047 $ 1,538,773 $ 592,811 $ 250,609 $ 343,090 $ 1,186,510 Guaranteed maximum price 589 486,511 6,587 493,687 3,878 392,182 10,921 406,981 Unit price 183,148 1,163 39,593 223,904 201,163 8,028 39,186 248,377 Cost plus fee and other 6,969 247,284 16,539 270,792 9,300 210,965 21,629 241,894 Total revenue $ 1,055,605 $ 954,785 $ 516,766 $ 2,527,156 $ 807,152 $ 861,784 $ 414,826 $ 2,083,762 Changes in Contract Estimates that Impact Revenue Contract assets include amounts due under retainage provisions, costs and estimated earnings in excess of billings and capitalized contract costs. The amounts as included on the Condensed Consolidated Balance Sheets consisted of the following: As of June 30, As of December 31, (in thousands) 2020 2019 Retainage receivable $ 581,495 $ 562,375 Costs and estimated earnings in excess of billings: Claims 729,170 705,993 Unapproved change orders 348,043 362,264 Other unbilled costs and profits 71,890 55,287 Total costs and estimated earnings in excess of billings 1,149,103 1,123,544 Capitalized contract costs 88,185 80,294 Total contract assets $ 1,818,783 $ 1,766,213 As of June 30, As of December 31, (in thousands) 2020 2019 Retainage payable $ 278,045 $ 252,181 Billings in excess of costs and estimated earnings 962,446 844,389 Total contract liabilities $ 1,240,491 $ 1,096,570 Retainage payable represents amounts invoiced to the Company by subcontractors where payments have been partially withheld pending the completion of certain milestones, other contractual conditions or upon the completion of the project. Generally, retainage payable is not remitted to subcontractors until the associated retainage receivable from customers is collected. As of June 30, As of December 31, (in thousands) 2020 2019 Cash and cash equivalents available for general corporate purposes $ 57,651 $ 43,760 Joint venture cash and cash equivalents 124,948 149,925 Cash and cash equivalents 182,599 193,685 Restricted cash 8,892 8,416 Total cash, cash equivalents and restricted cash $ 191,491 $ 202,101 (6)Earnings Per Common Share Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per common share data) 2020 2019 2020 2019 Net income (loss) attributable to Tutor Perini Corporation $ 18,709 $ (320,530) $ 36,080 $ (320,886) Weighted-average common shares outstanding, basic 50,667 50,224 50,502 50,161 Effect of dilutive restricted stock units and stock options 268 — 383 — Weighted-average common shares outstanding, diluted 50,935 50,224 50,885 50,161 Net income (loss) attributable to Tutor Perini Corporation per common share: Basic $ 0.37 $ (6.38) $ 0.71 $ (6.40) Diluted $ 0.37 $ (6.38) $ 0.71 $ (6.40) Anti-dilutive securities not included above 2,209 4,191 2,209 4,354 federal benefit. Specialty (in thousands) Civil Building Contractors Total Gross goodwill $ 492,074 $ 424,724 $ 156,193 $ 1,072,991 Accumulated impairment (286,931) (424,724) (156,193) (867,848) Balance as of December 31, 2019 205,143 — — 205,143 Current year activity — — — — Balance as of June 30, 2020 $ 205,143 $ — $ — $ 205,143 Intangible Assets As of June 30, 2020 Weighted Accumulated Average Accumulated Impairment Carrying Amortization (in thousands) Cost Amortization Charge Value Period Trade names (non-amortizable) $ 117,600 $ — $ (67,190) $ 50,410 Indefinite Trade names (amortizable) 74,350 (22,511) (23,232) 28,607 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (21,575) (16,645) 1,580 12 years Construction contract backlog 149,290 (89,213) — 60,077 3 years Total $ 387,040 $ (133,299) $ (113,067) $ 140,674 As of December 31, 2019 Weighted Accumulated Average Accumulated Impairment Carrying Amortization (in thousands) Cost Amortization Charge Value Period Trade names (non-amortizable) $ 117,600 $ — $ (67,190) $ 50,410 Indefinite Trade names (amortizable) 74,350 (21,267) (23,232) 29,851 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (21,048) (16,645) 2,107 12 years Construction contract backlog 149,290 (76,388) — 72,902 3 years Total $ 387,040 $ (118,703) $ (113,067) $ 155,270 (9)Financial Commitments As of June 30, As of December 31, (in thousands) 2020 2019 2017 Senior Notes $ 494,810 $ 494,365 2017 Credit Facility 100,000 114,000 Convertible Notes 188,089 182,292 Equipment financing and mortgages 44,917 39,159 Other indebtedness 8,603 4,660 Total debt 836,419 834,476 Less: Current maturities 320,790 124,054 Long-term debt, net $ 515,629 $ 710,422 As of June 30, 2020 As of December 31, 2019 (in thousands) Outstanding Debt Unamortized Discount and Issuance Costs Debt, as reported Outstanding Debt Unamortized Discount and Issuance Costs Debt, as reported 2017 Senior Notes $ 500,000 $ (5,190) $ 494,810 $ 500,000 $ (5,635) $ 494,365 Convertible Notes 200,000 (11,911) 188,089 200,000 (17,708) 182,292 The unamortized issuance costs related to the 2020 Revolver were $2.8 million as of September 30, 2020 and are included in other assets on the Condensed Consolidated Balance Sheets. The unamortized issuance costs related to the 2017 Credit Facility, which was terminated on August 18, 2020 (as discussed below) were 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 December 17, 2020 (the “spring-forward provision”) conversion rate for a holder who elects to convert their Convertible Notes in connection with such a corporate event including customary conversion rate adjustments in connection with a “make-whole fundamental change” described in the indenture. Upon conversion, and at the Company’s election, the Company may satisfy its conversion obligation with cash, shares of its common stock or a combination thereof. As of Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 Cash interest expense: Interest on 2017 Senior Notes $ 8,593 $ 8,594 $ 17,187 $ 17,187 Interest on 2017 Credit Facility 2,338 3,682 4,753 6,327 Interest on Convertible Notes 1,438 1,438 2,875 2,875 Other interest 535 541 1,039 1,116 Total cash interest expense 12,904 14,255 25,854 27,505 Non-cash interest expense:(a) Amortization of discount and debt issuance costs on Convertible Notes 2,933 2,671 5,797 5,279 Amortization of debt issuance costs on 2017 Credit Facility 402 387 804 749 Amortization of debt issuance costs on 2017 Senior Notes 225 209 445 414 Total non-cash interest expense 3,560 3,267 7,046 6,442 Total interest expense $ 16,464 $ 17,522 $ 32,900 $ 33,947 (a)The combination of cash and non-cash interest expense produces effective interest rates that are higher than contractual rates. Accordingly, the effective interest rates for the 2017 Senior Notes, Term Loan B and the Convertible Notes were 7.13%, 6.50% and 9.39%, respectively, for the The following table presents components of lease expense for the three and Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2020 2019 2020 2019 Operating lease expense $ 3,661 $ 3,921 $ 7,428 $ 7,702 Short-term lease expense(a) 23,056 16,486 40,321 33,057 26,717 20,407 47,749 40,759 Less: Sublease income 329 262 658 521 Total lease expense $ 26,388 $ 20,145 $ 47,091 $ 40,238 (a)Short-term lease expense includes all leases with lease terms ranging from less than one month to one As of June 30, As of December 31, (dollars in thousands) Balance Sheet Line Item 2020 2019 Assets ROU assets Other assets $ 38,909 $ 40,156 Total lease assets $ 38,909 $ 40,156 Liabilities Current lease liabilities Accrued expenses and other current liabilities $ 10,255 $ 11,392 Long-term lease liabilities Other long-term liabilities 31,869 31,900 Total lease liabilities $ 42,124 $ 43,292 Weighted-average remaining lease term (in years) 5.0 5.0 Weighted-average discount rate 6.77% 5.96% Six Months Ended June 30, (in thousands) 2020 2019 Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ (7,386) $ (7,622) Non-cash activity: ROU assets obtained in exchange for lease liabilities $ 4,923 $ 6,040 Year (in thousands) Operating Leases 2020 (excluding the six months ended June 30, 2020) $ 7,039 2021 10,588 2022 9,294 2023 7,582 2024 5,701 Thereafter 10,053 Total lease payments 50,257 Less: Imputed interest 8,133 Total $ 42,124 (11)Commitments and Contingencies In September 2018, rulings received on pre-trial motions effectively limited potential recovery under the Policy for STP, WSDOT and Hitachi. However, on December 19, 2018, the Court of Appeal granted the Company’s request for a discretionary appeal of those rulings. The appeal is expected to be heard in late 2020. STP submitted damages to the Insurers in the King County lawsuit in the amount of $532 million. STP also sought these damages from WSDOT related to the pipe-strike by the TBM in a related lawsuit in Thurston County (see following paragraph). Separately, on July 2, 2018, TPBC filed a lawsuit against the Port Authority, as owner of the project, and STV Incorporated, as designer, seeking the same $113 million in damages pursuant to the lease agreement between the Port Authority and the Developer. On August 20, 2018, the Port Authority filed a motion to dismiss, which was denied by the court on July 1, 2019. The Port Authority appealed this decision on July 15, 2019, and the appeal is expected to be decided in 2021. On December 2, 2019, the Court of Appeal denied the Port Authority’s request to stay the trial court action pending the appeal. As a result, the lawsuit is proceeding against the Port Authority before the trial court. On January 13, 2020, the court dismissed STV Incorporated from the case. The following table sets forth a summary of the net periodic benefit cost for the three and Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 Interest cost $ 758 $ 948 $ 1,516 $ 1,896 Expected return on plan assets (1,006) (1,043) (2,012) (2,086) Amortization of net loss 592 463 1,184 926 Other 231 225 462 450 Net periodic benefit cost $ 575 $ 593 $ 1,150 $ 1,186 As of June 30, 2020 As of December 31, 2019 Fair Value Hierarchy Fair Value Hierarchy (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash and cash equivalents(a) $ 182,599 $ — $ — $ 182,599 $ 193,685 $ — $ — $ 193,685 Restricted cash(a) 8,892 — — 8,892 8,416 — — 8,416 Restricted investments(b) — 75,382 — 75,382 — 70,974 — 70,974 Investments in lieu of retainage(c) 98,837 1,208 — 100,045 89,572 1,219 — 90,791 Total $ 290,328 $ 76,590 $ — $ 366,918 $ 291,673 $ 72,193 $ — $ 363,866 (a)Includes money market funds and short-term investments with maturity dates of three months or less when acquired. September 30, 2020 and was determined using Level 2 inputs, specifically third-party quoted market prices. The fair value of the Convertible Notes was (16)Changes in Equity Three Months Ended June 30, 2020 Accumulated Additional Other Common Paid-in Retained Comprehensive Noncontrolling Total (in thousands) Stock Capital Earnings Loss Interests Equity Balance - March 31, 2020 $ 50,577 $ 1,120,487 $ 331,362 $ (43,128) $ (16,370) $ 1,442,928 Net income — — 18,709 — 12,150 30,859 Other comprehensive income — — — 2,531 854 3,385 Share-based compensation — 4,185 — — — 4,185 Issuance of common stock, net 194 — — — — 194 Distributions to noncontrolling interests — — — — (17,410) (17,410) Balance - June 30, 2020 $ 50,771 $ 1,124,672 $ 350,071 $ (40,597) $ (20,776) $ 1,464,141 Six Months Ended June 30, 2020 Accumulated Additional Other Common Paid-in Retained Comprehensive Noncontrolling Total (in thousands) Stock Capital Earnings Loss Interests Equity Balance - December 31, 2019 $ 50,279 $ 1,117,972 $ 313,991 $ (42,100) $ (9,617) $ 1,430,525 Net income — — 36,080 — 20,917 56,997 Other comprehensive income (loss) — — — 1,503 (1,166) 337 Share-based compensation — 7,692 — — — 7,692 Issuance of common stock, net 492 (992) — — — (500) Distributions to noncontrolling interests — — — — (30,910) (30,910) Balance - June 30, 2020 $ 50,771 $ 1,124,672 $ 350,071 $ (40,597) $ (20,776) $ 1,464,141 Three Months Ended June 30, 2019 Accumulated Additional Other Common Paid-in Retained Comprehensive Noncontrolling Total (in thousands) Stock Capital Earnings Loss Interests Equity Balance - March 31, 2019 $ 50,180 $ 1,105,184 $ 701,325 $ (44,200) $ (17,310) $ 1,795,179 Net income (loss) — — (320,530) — 5,091 (315,439) Other comprehensive income — — — 1,670 157 1,827 Share-based compensation — 5,312 — — — 5,312 Issuance of common stock, net 99 — — — — 99 Contributions from noncontrolling interests — — — — 2,581 2,581 Balance - June 30, 2019 $ 50,279 $ 1,110,496 $ 380,795 $ (42,530) $ (9,481) $ 1,489,559 Six Months Ended June 30, 2019 Accumulated Additional Other Common Paid-in Retained Comprehensive Noncontrolling Total (in thousands) Stock Capital Earnings Loss Interests Equity Balance - December 31, 2018 $ 50,026 $ 1,102,919 $ 701,681 $ (45,449) $ (21,288) $ 1,787,889 Net income (loss) — — (320,886) — 10,169 (310,717) Other comprehensive income — — — 2,919 259 3,178 Share-based compensation — 10,095 — — — 10,095 Issuance of common stock, net 253 (2,518) — — — (2,265) Contributions from noncontrolling interests — — — — 5,379 5,379 Distributions to noncontrolling interests — — — — (4,000) (4,000) Balance - June 30, 2019 $ 50,279 $ 1,110,496 $ 380,795 $ (42,530) $ (9,481) $ 1,489,559 Three Months Ended Three Months Ended June 30, 2020 June 30, 2019 (in thousands) Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount Other comprehensive income: Defined benefit pension plan adjustments $ 592 $ (168) $ 424 $ 464 $ (133) $ 331 Foreign currency translation adjustments 1,973 (318) 1,655 1,072 (262) 810 Unrealized gain in fair value of investments 1,602 (296) 1,306 867 (181) 686 Total other comprehensive income 4,167 (782) 3,385 2,403 (576) 1,827 Less: Other comprehensive income attributable to noncontrolling interests(a) 854 — 854 157 — 157 Total other comprehensive income attributable to Tutor Perini Corporation $ 3,313 $ (782) $ 2,531 $ 2,246 $ (576) $ 1,670 Six Months Ended Six Months Ended June 30, 2020 June 30, 2019 (in thousands) Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount Other comprehensive income: Defined benefit pension plan adjustments $ 1,183 $ (336) $ 847 $ 926 $ (265) $ 661 Foreign currency translation adjustment (2,954) 596 (2,358) 1,551 (393) 1,158 Unrealized gain in fair value of investments 2,359 (511) 1,848 1,725 (366) 1,359 Total other comprehensive income 588 (251) 337 4,202 (1,024) 3,178 Less: Other comprehensive income (loss) attributable to noncontrolling interests(a) (1,166) — (1,166) 259 — 259 Total other comprehensive income attributable to Tutor Perini Corporation $ 1,754 $ (251) $ 1,503 $ 3,943 $ (1,024) $ 2,919 The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation during the three and Three Months Ended June 30, 2020 Defined Unrealized Accumulated Benefit Foreign Gain (Loss) in Other Pension Currency Fair Value of Comprehensive (in thousands) Plan Translation Investments, Net Income (Loss) Attributable to Tutor Perini Corporation: Balance as of March 31, 2020 $ (37,403) $ (7,364) $ 1,639 $ (43,128) Other comprehensive income before reclassifications — 801 1,335 2,136 Amounts reclassified from AOCI 424 — (29) 395 Total other comprehensive income 424 801 1,306 2,531 Balance as of June 30, 2020 $ (36,979) $ (6,563) $ 2,945 $ (40,597) Six Months Ended June 30, 2020 Defined Unrealized Accumulated Benefit Foreign Gain (Loss) in Other Pension Currency Fair Value of Comprehensive (in thousands) Plan Translation Investments, Net Income (Loss) Attributable to Tutor Perini Corporation: Balance as of December 31, 2019 $ (37,826) $ (5,371) $ 1,097 $ (42,100) Other comprehensive income (loss) before reclassifications — (1,192) 1,881 689 Amounts reclassified from AOCI 847 — (33) 814 Total other comprehensive income (loss) 847 (1,192) 1,848 1,503 Balance as of June 30, 2020 $ (36,979) $ (6,563) $ 2,945 $ (40,597) The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation during the three and Three Months Ended June 30, 2019 Defined Unrealized Accumulated Benefit Foreign Gain (Loss) in Other Pension Currency Fair Value of Comprehensive (in thousands) Plan Translation Investments, Net Income (Loss) Attributable to Tutor Perini Corporation: Balance as of March 31, 2019 $ (38,340) $ (6,069) $ 209 $ (44,200) Other comprehensive income before reclassifications — 653 714 1,367 Amounts reclassified from AOCI 331 — (28) 303 Total other comprehensive income 331 653 686 1,670 Balance as of June 30, 2019 $ (38,009) $ (5,416) $ 895 $ (42,530) Six Months Ended June 30, 2019 Defined Unrealized Accumulated Benefit Foreign Gain (Loss) in Other Pension Currency Fair Value of Comprehensive (in thousands) Plan Translation Investments, Net Income (Loss) Attributable to Tutor Perini Corporation: Balance as of December 31, 2018 $ (38,670) $ (6,315) $ (464) $ (45,449) Other comprehensive income before reclassifications — 899 1,379 2,278 Amounts reclassified from AOCI 661 — (20) 641 Total other comprehensive income 661 899 1,359 2,919 Balance as of June 30, 2019 $ (38,009) $ (5,416) $ 895 $ (42,530) The following tables set forth certain reportable segment information relating to the Company’s operations for the three and Reportable Segments Specialty Consolidated (in thousands) Civil Building Contractors Total Corporate Total Three Months Ended June 30, 2020 Total revenue $ 644,685 $ 490,317 $ 234,497 $ 1,369,499 $ — $ 1,369,499 Elimination of intersegment revenue (75,709) (17,296) (67) (93,072) — (93,072) Revenue from external customers $ 568,976 $ 473,021 $ 234,430 $ 1,276,427 $ — $ 1,276,427 Income (loss) from construction operations $ 65,398 $ 17,789 $ (11,388) $ 71,799 (a) $ (14,103) (b) $ 57,696 Capital expenditures $ 18,951 $ 186 $ 255 $ 19,392 $ 301 $ 19,693 Depreciation and amortization(c) $ 21,775 $ 428 $ 995 $ 23,198 $ 2,767 $ 25,965 Three Months Ended June 30, 2019 Total revenue $ 541,117 $ 433,559 $ 223,299 $ 1,197,975 $ — $ 1,197,975 Elimination of intersegment revenue (67,459) (5,241) — (72,700) — (72,700) Revenue from external customers $ 473,658 $ 428,318 $ 223,299 $ 1,125,275 $ — $ 1,125,275 Income (loss) from construction operations $ (164,472) $ (3,810) $ (159,795) $ (328,077) (d) $ (13,640) (b) $ (341,717) Capital expenditures $ 24,439 $ 150 $ 110 $ 24,699 $ 235 $ 24,934 Depreciation and amortization(c) $ 10,285 $ 497 $ 1,061 $ 11,843 $ 2,754 $ 14,597 (a)During the three months ended These adverse impacts were mostly offset by $19.6 million (a favorable after-tax impact of $14.1 million, or $0.28 per diluted share) in the third quarter of 2020 as a result of a favorable arbitration decision related to a dispute in the Specialty Contractors segment. Reportable Segments Specialty Consolidated (in thousands) Civil Building Contractors Total Corporate Total Six Months Ended June 30, 2020 Total revenue $ 1,224,771 $ 995,400 $ 516,949 $ 2,737,120 $ — $ 2,737,120 Elimination of intersegment revenue (169,166) (40,615) (183) (209,964) — (209,964) Revenue from external customers $ 1,055,605 $ 954,785 $ 516,766 $ 2,527,156 $ — $ 2,527,156 Income (loss) from construction operations $ 111,519 $ 21,305 $ (3,109) $ 129,715 (a) $ (24,792) (b) $ 104,923 Capital expenditures $ 30,143 $ 198 $ 728 $ 31,069 $ 317 $ 31,386 Depreciation and amortization(c) $ 40,391 $ 855 $ 1,988 $ 43,234 $ 5,542 $ 48,776 Six Months Ended June 30, 2019 Total revenue $ 924,739 $ 869,802 $ 414,826 $ 2,209,367 $ — $ 2,209,367 Elimination of intersegment revenue (117,587) (8,018) — (125,605) — (125,605) Revenue from external customers $ 807,152 $ 861,784 $ 414,826 $ 2,083,762 $ — $ 2,083,762 Income (loss) from construction operations $ (122,727) $ (677) $ (167,283) $ (290,687) (d) $ (28,117) (b) $ (318,804) Capital expenditures $ 38,451 $ 205 $ 233 $ 38,889 $ 457 $ 39,346 Depreciation and amortization(c) $ 19,655 $ 1,000 $ 2,125 $ 22,780 $ 5,534 $ 28,314 A reconciliation of segment results to the consolidated income (loss) before income taxes is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 Income (loss) from construction operations $ 57,696 $ (341,717) $ 104,923 $ (318,804) Other income (expense) (797) 900 (316) 1,322 Interest expense (16,464) (17,522) (32,900) (33,947) Income (loss) before income taxes $ 40,435 $ (358,339) $ 71,707 $ (351,429) Total assets by segment were as As of As of (in thousands) June 30, 2020 December 31, 2019 Civil $ 3,084,528 $ 2,791,402 Building 1,083,421 995,298 Specialty Contractors 664,161 635,180 Corporate and other(a) (68,507) 63,897 Total assets $ 4,763,603 $ 4,485,777 (a)Consists principally of cash, equipment, tax-related assets and insurance-related assets, offset by the elimination of assets related to intersegment revenue. TUTOR PERINI CORPORATION AND SUBSIDIARIES The provision for income taxes was as well as the tax benefits recognized in both periods of 2020. Backlog at New Revenue Backlog at (in millions) December 31, 2019 Awards(a) Recognized June 30, 2020(b) Civil $ 6,037.2 $ 555.3 $ (1,055.6) $ 5,536.9 Building 2,790.3 443.0 (954.8) 2,278.5 Specialty Contractors 2,393.6 306.4 (516.8) 2,183.2 Total $ 11,221.1 $ 1,304.7 $ (2,527.2) $ 9,998.6 toward assisting state and local governments or specifically targeting significant investments in infrastructure have been discussed as possible additional pieces of the federal government’s ongoing response to the COVID-19 pandemic. Such additional federal financial assistance or stimulus programs could favorably impact the Company’s current work and prospective opportunities, though the timing and magnitude of such additional federal government actions, if any, remain uncertain.Meanwhile, several large, long-duration civil infrastructure programs with which we are already involved continue to progress. Finally, the COVID-19 pandemic’s dramatic impact on the U.S. economy has led to interest rates that remain at record low levels and may be conducive to continued, and potentially increased, spending on infrastructure projects. Reconciliation of Non-GAAP Financial Measures Specialty Consolidated (in millions) Civil Building Contractors Corporate Total Three Months Ended June 30, 2019 Income (loss) from construction operations, as reported $ (164.5) $ (3.8) $ (159.8) $ (13.6) $ (341.7) Plus: Goodwill impairment charge 210.2 13.5 156.2 — 379.9 Adjusted income (loss) from construction operations $ 45.7 $ 9.7 $ (3.6) $ (13.6) $ 38.2 Six Months Ended June 30, 2019 Income (loss) from construction operations, as reported $ (122.7) $ (0.7) $ (167.3) $ (28.1) $ (318.8) Plus: Goodwill impairment charge 210.2 13.5 156.2 — 379.9 Adjusted income (loss) from construction operations $ 87.5 $ 12.8 $ (11.1) $ (28.1) $ 61.1 Three Months Ended Six Months Ended June 30, June 30, (in millions, except per common share amounts and percentages) 2020 2019 2020 2019 Net income (loss) attributable to Tutor Perini Corporation, as reported $ 18.7 $ (320.5) $ 36.1 $ (320.9) Plus: Goodwill impairment charge — 379.9 — 379.9 Less: Tax benefit provided on goodwill impairment charge — (50.4) — (50.4) Adjusted net income attributable to Tutor Perini Corporation $ 18.7 $ 9.0 $ 36.1 $ 8.6 Diluted earnings (loss) per common share, as reported $ 0.37 $ (6.38) $ 0.71 $ (6.40) Plus: Goodwill impairment charge — 7.56 — 7.57 Less: Tax benefit provided on goodwill impairment charge — (1.00) — (1.00) Adjusted diluted earnings per common share $ 0.37 $ 0.18 $ 0.71 $ 0.17 Effective income tax rate, as reported 23.7 % (12.0) % 20.5 % (11.6) % Tax effect of goodwill impairment charge — % 46.7 % — % 45.6 % Adjusted effective income tax rate 23.7 % 34.7 % 20.5 % 34.0 % Three Months Ended June 30, Six Months Ended June 30, (in millions) 2020 2019 2020 2019 Revenue $ 569.0 $ 473.7 $ 1,055.6 $ 807.2 Income (loss) from construction operations, as reported 65.4 (164.5) 111.5 (122.7) Plus: Goodwill impairment charge — 210.2 — 210.2 Adjusted income from construction operations $ 65.4 $ 45.7 $ 111.5 $ 87.5 for the nine months ended September 30, 2020. Three Months Ended June 30, Six Months Ended June 30, (in millions) 2020 2019 2020 2019 Revenue $ 473.0 $ 428.3 $ 954.8 $ 861.8 Income (loss) from construction operations, as reported 17.8 (3.8) 21.3 (0.7) Plus: Goodwill impairment charge — 13.5 — 13.5 Adjusted income from construction operations $ 17.8 $ 9.7 $ 21.3 $ 12.8 COVID-19 pandemic, demand for our building construction services is expected to continue due to ongoing customer spending supported by a favorable interest rate environment. Three Months Ended June 30, Six Months Ended June 30, (in millions) 2020 2019 2020 2019 Revenue $ 234.4 $ 223.3 $ 516.8 $ 414.8 Loss from construction operations, as reported (11.4) (159.8) (3.1) (167.3) Plus: Goodwill impairment charge — 156.2 — 156.2 Adjusted loss from construction operations $ (11.4) $ (3.6) $ (3.1) $ (11.1) operations. compensation expenses and lower outside professional service fees compared to the same periods in 2019. Other Income (Expense), Interest Expense and Income Tax (Expense) Benefit Three Months Ended June 30, Six Months Ended June 30, (in millions) 2020 2019 2020 2019 Other income (expense) $ (0.8) $ 0.9 $ (0.3) $ 1.3 Interest expense (16.5) (17.5) (32.9) (33.9) Income tax (expense) benefit (9.6) 42.9 (14.7) 40.7 debt restructuring transactions in August 2020. capital for the first was relatively flat during the period. payable. $66.1 million, partially offset by $21.5 million of cash distributions to noncontrolling interests. Item 1A.Risk Factors Item 4.Mine Safety Disclosures Exhibits Description 10.4 31.2 32.1 32.2 95 101.INS XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document. 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. 101.LAB XBRL Taxonomy Extension Label Linkbase Document. 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. 104 The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended SIGNATURE Tutor Perini Corporation Dated: By: /s/ Gary G. Smalley Gary G. Smalley Executive Vice President and Chief Financial Officer 10-Q(Mark One)☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2020or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193410-Q☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ For the transition period from ___________ to ___________ For the transition period from ___________ to ___________MASSACHUSETTS04-1717070
Incorporation or Organization)(I.R.S. Employer Identification No.)15901 OLDEN STREET, SYLMAR, CALIFORNIA91342-1093(I.R.S. Employer Identification No.) (Zip Code) Large accelerated filer ☒Accelerated filer ☐ Non-accelerated filer ☐Smaller reporting company ☐ Emerging growth company ☐July 22,October 29, 2020 was 50,771,288.OFOF CONTENTSThree Months Ended
September 30,Nine Months Ended
September 30,(in thousands, except per common share amounts) 2020 2019 2020 2019 REVENUE $ 1,442,091 $ 1,189,345 $ 3,969,247 $ 3,273,107 COST OF OPERATIONS (1,317,176) (1,074,282) (3,615,498) (2,968,631) GROSS PROFIT 124,915 115,063 353,749 304,476 General and administrative expenses (41,894) (67,120) (165,805) (195,474) Goodwill impairment 0 0 0 (379,863) INCOME (LOSS) FROM CONSTRUCTION OPERATIONS 83,021 47,943 187,944 (270,861) Other income (expense) (8,048) 1,674 (8,364) 2,996 Interest expense (25,613) (17,305) (58,513) (51,252) INCOME (LOSS) BEFORE INCOME TAXES 49,360 32,312 121,067 (319,117) Income tax (expense) benefit (37) (5,591) (14,747) 35,121 NET INCOME (LOSS) 49,323 26,721 106,320 (283,996) LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 12,504 7,408 33,421 17,577 NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 36,819 $ 19,313 $ 72,899 $ (301,573) BASIC EARNINGS (LOSS) PER COMMON SHARE $ 0.72 $ 0.38 $ 1.44 $ (6.01) DILUTED EARNINGS (LOSS) PER COMMON SHARE $ 0.72 $ 0.38 $ 1.43 $ (6.01) WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: BASIC 50,787 50,279 50,598 50,201 DILUTED 51,241 50,582 51,004 50,201 Three Months Ended
September 30,Nine Months Ended
September 30,(in thousands) 2020 2019 2020 2019 NET INCOME (LOSS) $ 49,323 $ 26,721 $ 106,320 $ (283,996) OTHER COMPREHENSIVE INCOME, NET OF TAX: OTHER COMPREHENSIVE INCOME, NET OF TAX: Defined benefit pension plan adjustments 424 331 1,271 992 Foreign currency translation adjustments 1,102 (450) (1,256) 708 Unrealized (loss) gain in fair value of investments Unrealized (loss) gain in fair value of investments (225) 256 1,623 1,615 TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX 1,301 137 1,638 3,315 COMPREHENSIVE INCOME (LOSS) 50,624 26,858 107,958 (280,681) LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 13,024 7,309 32,775 17,737 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 37,600 $ 19,549 $ 75,183 $ (298,418) (in thousands, except share and per share amounts) As of September 30,
2020As of December 31,
2019ASSETS CURRENT ASSETS: Cash and cash equivalents ($104,955 and $103,850 related to variable interest entities ("VIEs")) Cash and cash equivalents ($104,955 and $103,850 related to variable interest entities ("VIEs")) $ 348,366 $ 193,685 Restricted cash 80,974 8,416 Restricted investments 75,475 70,974 Accounts receivable ($106,085 and $91,090 related to VIEs) Accounts receivable ($106,085 and $91,090 related to VIEs) 1,565,909 1,354,519 Retainage receivable ($110,794 and $89,132 related to VIEs) Retainage receivable ($110,794 and $89,132 related to VIEs) 621,414 562,375 Costs and estimated earnings in excess of billings ($39,147 and $22,764 related to VIEs) Costs and estimated earnings in excess of billings ($39,147 and $22,764 related to VIEs) 1,180,215 1,123,544 Other current assets ($56,504 and $58,128 related to VIEs) Other current assets ($56,504 and $58,128 related to VIEs) 239,614 197,473 Total current assets 4,111,967 3,510,986 485,861 509,685 GOODWILL 205,143 205,143 INTANGIBLE ASSETS, NET 131,391 155,270 OTHER ASSETS 107,894 104,693 TOTAL ASSETS $ 5,042,256 $ 4,485,777 LIABILITIES AND EQUITY CURRENT LIABILITIES: Current maturities of long-term debt, net of unamortized discount and debt issuance costs totaling $3,115 and $0 Current maturities of long-term debt, net of unamortized discount and debt issuance costs totaling $3,115 and $0 $ 99,504 $ 124,054 Accounts payable ($101,034 and $93,848 related to VIEs) Accounts payable ($101,034 and $93,848 related to VIEs) 811,987 682,699 Retainage payable ($22,864 and $13,967 related to VIEs) Retainage payable ($22,864 and $13,967 related to VIEs) 296,200 252,181 Billings in excess of costs and estimated earnings ($413,659 and $422,847 related to VIEs) Billings in excess of costs and estimated earnings ($413,659 and $422,847 related to VIEs) 911,378 844,389 Accrued expenses and other current liabilities ($12,581 and $25,402 related to VIEs) Accrued expenses and other current liabilities ($12,581 and $25,402 related to VIEs) 233,241 206,533 Total current liabilities 2,352,310 2,109,856 921,519 710,422 DEFERRED INCOME TAXES 58,416 35,686 OTHER LONG-TERM LIABILITIES 200,714 199,288 TOTAL LIABILITIES 3,532,959 3,055,252 COMMITMENTS AND CONTINGENCIES (NOTE 11) EQUITY Stockholders' equity: Preferred stock - authorized 1,000,000 shares ($1 par value), none issued Preferred stock - authorized 1,000,000 shares ($1 par value), none issued 0 0 Common stock - authorized 112,500,000 and 75,000,000 shares ($1 par value), issued and outstanding 50,827,205 and 50,278,816 shares Common stock - authorized 112,500,000 and 75,000,000 shares ($1 par value), issued and outstanding 50,827,205 and 50,278,816 shares 50,827 50,279 Additional paid-in capital 1,125,455 1,117,972 Retained earnings 386,890 313,991 Accumulated other comprehensive loss (39,816) (42,100) Total stockholders' equity 1,523,356 1,440,142 Noncontrolling interests (14,059) (9,617) TOTAL EQUITY 1,509,297 1,430,525 TOTAL LIABILITIES AND EQUITY $ 5,042,256 $ 4,485,777 Nine Months Ended September 30, (in thousands) 2020 2019 Cash Flows from Operating Activities: Net income (loss) $ 106,320 $ (283,996) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Adjustments to reconcile net income (loss) to net cash provided by operating activities: Goodwill impairment 0 379,863 Depreciation 55,755 41,884 Amortization of intangible assets 23,879 2,657 Share-based compensation expense 10,722 14,331 Change in debt discount and deferred debt issuance costs 18,960 9,790 Deferred income taxes 22,137 (48,318) Gain on sale of property and equipment Gain on sale of property and equipment (2,609) (1,799) Changes in other components of working capital (107,786) (7,148) Other long-term liabilities 3,899 3,979 Other, net (309) 122 NET CASH PROVIDED BY OPERATING ACTIVITIES NET CASH PROVIDED BY OPERATING ACTIVITIES 130,968 111,365 Cash Flows from Investing Activities: Acquisition of property and equipment (43,396) (62,677) Proceeds from sale of property and equipment 13,320 4,300 Investment in securities (22,692) (18,790) Proceeds from maturities and sales of investments in securities 19,901 11,078 NET CASH USED IN INVESTING ACTIVITIES (32,867) (66,089) Cash Flows from Financing Activities: Proceeds from debt 1,183,012 649,139 Repayment of debt (1,004,259) (583,039) Cash payments related to share-based compensation (1,697) (2,363) Distributions paid to noncontrolling interests (37,217) (21,500) Contributions from noncontrolling interests 0 6,519 Debt issuance, extinguishment and modification costs Debt issuance, extinguishment and modification costs (10,701) (504) NET CASH PROVIDED BY FINANCING ACTIVITIES NET CASH PROVIDED BY FINANCING ACTIVITIES 129,138 48,252 Net increase in cash, cash equivalents and restricted cash Net increase in cash, cash equivalents and restricted cash 227,239 93,528 Cash, cash equivalents and restricted cash at beginning of period 202,101 119,863 Cash, cash equivalents and restricted cash at end of period $ 429,340 $ 213,391 sixnine months ended JuneSeptember 30, 2020 may not be indicative of the results that will be achieved for the full year ending December 31, 2020.JuneSeptember 30, 2020 and its consolidated statements of operations and cash flows for the interim periods presented. Intercompany balances and transactions have been eliminated.newrecent accounting pronouncement requirespronouncements require implementation in future periods.(“(“ASU 2019-12”), modifying Accounting Standards Codification (“ASC”) 740, Income Taxes (“(“ASC 740”). The amendments in ASU 2019-12, among other things, remove certain exceptions to the general principles in ASC 740 and seek more consistent application by clarifying and amending the existing guidance. 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 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.UNAUDITEDsixnine months ended JuneSeptember 30, 2020 and 2019.Three Months Ended
September 30,Nine Months Ended
September 30,(in thousands) 2020 2019 2020 2019 Civil segment revenue by end market: Mass transit (includes transportation and tunneling projects) $ 372,131 $ 265,671 $ 1,024,083 $ 655,541 Bridges 104,722 113,743 246,006 269,517 Military defense facilities Military defense facilities 44,246 16,914 102,898 40,335 Highways 30,086 44,630 98,259 145,917 Water 23,277 7,555 76,569 21,882 Other 37,534 76,033 119,786 198,506 Total Civil segment revenue $ 611,996 $ 524,546 $ 1,667,601 $ 1,331,698 Three Months Ended
September 30,Nine Months Ended
September 30,(in thousands) 2020 2019 2020 2019 Building segment revenue by end market: Commercial and industrial facilities $ 162,364 $ 121,206 $ 402,312 $ 345,752 Hospitality and gaming 119,588 57,672 346,517 180,556 Municipal and government 66,505 62,444 215,230 192,986 Mass transit (includes transportation projects) 50,206 53,384 174,605 123,772 Education facilities 50,425 33,469 129,085 123,059 Health care facilities 26,344 58,323 94,651 199,347 Other 32,708 28,848 100,525 111,658 Total Building segment revenue $ 508,140 $ 415,346 $ 1,462,925 $ 1,277,130 Three Months Ended
September 30,Nine Months Ended
September 30,(in thousands) 2020 2019 2020 2019 Specialty Contractors segment revenue by end market: Mass transit (includes transportation and tunneling projects) $ 179,875 $ 103,710 $ 447,180 $ 285,121 Commercial and industrial facilities 41,378 51,471 115,382 139,112 Multi-unit residential 39,014 25,860 103,118 56,474 Water 20,413 9,706 46,341 26,143 Education facilities 12,236 21,610 39,131 47,226 Other 29,039 37,096 87,569 110,203 Total Specialty Contractors segment revenue $ 321,955 $ 249,453 $ 838,721 $ 664,279 UNAUDITEDThree Months Ended
September 30, 2020Three Months Ended
September 30, 2019(in thousands) Civil Building Specialty
ContractorsTotal Civil Building Specialty
ContractorsTotal Revenue by customer type: State and local agencies $ 526,771 $ 126,448 $ 155,175 $ 808,394 $ 420,839 $ 144,106 $ 136,191 $ 701,136 Federal agencies 48,861 32,392 29,362 110,615 32,852 36,890 4,786 74,528 Private owners 36,364 349,300 137,418 523,082 70,855 234,350 108,476 413,681 Total revenue $ 611,996 $ 508,140 $ 321,955 $ 1,442,091 $ 524,546 $ 415,346 $ 249,453 $ 1,189,345 Nine Months Ended
September 30, 2020Nine Months Ended
September 30, 2019(in thousands) Civil Building Specialty
ContractorsTotal Civil Building Specialty
ContractorsTotal Revenue by customer type: State and local agencies $ 1,426,644 $ 430,212 $ 401,671 $ 2,258,527 $ 1,059,384 $ 422,590 $ 347,517 $ 1,829,491 Federal agencies 128,112 99,013 50,410 277,535 82,989 121,437 15,316 219,742 Private owners 112,845 933,700 386,640 1,433,185 189,325 733,103 301,446 1,223,874 Total revenue $ 1,667,601 $ 1,462,925 $ 838,721 $ 3,969,247 $ 1,331,698 $ 1,277,130 $ 664,279 $ 3,273,107 Three Months Ended
September 30, 2020Three Months Ended
September 30, 2019(in thousands) Civil Building Specialty
ContractorsTotal Civil Building Specialty
ContractorsTotal Revenue by contract type: Fixed price $ 484,851 $ 117,650 $ 284,534 $ 887,035 $ 376,230 $ 144,514 $ 208,689 $ 729,433 Guaranteed maximum price 179 308,299 1,923 310,401 639 159,217 4,405 164,261 Unit price 124,506 254 31,191 155,951 142,253 2,922 25,193 170,368 Cost plus fee and other 2,460 81,937 4,307 88,704 5,424 108,693 11,166 125,283 Total revenue $ 611,996 $ 508,140 $ 321,955 $ 1,442,091 $ 524,546 $ 415,346 $ 249,453 $ 1,189,345 Nine Months Ended
September 30, 2020Nine Months Ended
September 30, 2019(in thousands) Civil Building Specialty
ContractorsTotal Civil Building Specialty
ContractorsTotal Revenue by contract type: Fixed price $ 1,349,750 $ 401,957 $ 743,241 $ 2,494,948 $ 969,041 $ 395,123 $ 551,779 $ 1,915,943 Guaranteed maximum price 768 794,810 3,850 799,428 4,517 551,399 15,326 571,242 Unit price 307,654 1,417 70,784 379,855 343,416 10,950 64,379 418,745 Cost plus fee and other 9,429 264,741 20,846 295,016 14,724 319,658 32,795 367,177 Total revenue $ 1,667,601 $ 1,462,925 $ 838,721 $ 3,969,247 $ 1,331,698 $ 1,277,130 $ 664,279 $ 3,273,107 six-monthnine-month periods ended JuneSeptember 30, 2020 related to performance obligations satisfied (or partially satisfied) in prior periods by $19.8$30.4 million and $35.6$71.3 million, respectively.Likewise, revenue was negatively impacted during the three- and six-monthnine-month periods ended JuneSeptember 30, 2019 related to performance obligations satisfied (or partially satisfied) in prior periods by $14.6$13.8 million and $27.7$46.3 million, respectively.JuneSeptember 30, 2020, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $5.1 billion, $1.7$1.9 billion and $2.2$1.9 billion for the Civil, Building and Specialty Contractors segments, respectively. As of JuneSeptember 30, 2019, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $5.5$5.3 billion, $1.7$1.6 billion and $2.2 billion for the Civil, Building and Specialty Contractors segments, respectively. The Company typically recognizes revenue on Civil segment projects over a period of three to five years, whereas for projects in the Building and Specialty Contractors segments, the Company typically recognizes revenue over a period of one to three years.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED(in thousands) As of September 30,
2020As of December 31,
2019Retainage receivable $ 621,414 $ 562,375 Costs and estimated earnings in excess of billings: Claims 743,057 705,993 Unapproved change orders 372,830 362,264 Other unbilled costs and profits 64,328 55,287 Total costs and estimated earnings in excess of billings 1,180,215 1,123,544 Capitalized contract costs 84,391 80,294 Total contract assets $ 1,886,020 $ 1,766,213 (“ (“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 uncertaintysixnine months ended JuneSeptember 30, 2020, $12.5 million and $35.2 million, respectively, of previously capitalized contract costs were amortized and recognized as expense on the related contracts. During the three and nine months ended September 30, 2019, $8.5 million and $22.8 million, respectively, of previously capitalized contract costs were amortized and recognized as expense on the related contracts.During the three and six months ended June 30, 2019, $8.6 million and $14.3 million, respectively, of previously capitalized contract costs were amortized and recognized as expense on the related contracts.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED(in thousands) As of September 30,
2020As of December 31,
2019Retainage payable $ 296,200 $ 252,181 Billings in excess of costs and estimated earnings 911,378 844,389 Total contract liabilities $ 1,207,578 $ 1,096,570 sixnine months ended JuneSeptember 30, 2020 and included in the opening billings in excess of costs and estimated earnings balances for each period totaled $470.8$461.8 million and $565.9$662.7 million, respectively. Revenue recognized during the three and sixnine months ended JuneSeptember 30, 2019 and included in the opening billings in excess of costs and estimated earnings balances for each period totaled $289.4$322.8 million and $391.9$437.1 million, respectively.(in thousands) As of September 30,
2020As of December 31,
2019Cash and cash equivalents available for general corporate purposes $ 168,986 $ 43,760 Joint venture cash and cash equivalents 179,380 149,925 Cash and cash equivalents 348,366 193,685 Restricted cash 80,974 8,416 Total cash, cash equivalents and restricted cash $ 429,340 $ 202,101 Amounts includedrestricted cash are primarilymore detail in Note 9 along with amounts held as collateral to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED (EPS)Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per common share data) 2020 2019 2020 2019 Net income (loss) attributable to Tutor Perini Corporation $ 36,819 $ 19,313 $ 72,899 $ (301,573) Weighted-average common shares outstanding, basic 50,787 50,279 50,598 50,201 Effect of dilutive restricted stock units and stock options 454 303 406 0 Weighted-average common shares outstanding, diluted 51,241 50,582 51,004 50,201 Net income (loss) attributable to Tutor Perini Corporation per common share: Basic $ 0.72 $ 0.38 $ 1.44 $ (6.01) Diluted $ 0.72 $ 0.38 $ 1.43 $ (6.01) Anti-dilutive securities not included above 1,514 1,665 1,977 3,458 three and sixnine months ended JuneSeptember 30, 2019, all outstanding restricted stock units and stock options were excluded from the calculation of weighted-average diluted shares outstanding due to the net loss for the period.The Company’srate was 23.7%rates of 0.1% and 20.5% for the three and six months ended June 30, 2020,12.2%, respectively. The effective income tax rates were lower than the 21% federal statutory rate for the six months ended June 30, 2020 primarily reflectsdue to the favorable impact oftax rate differential realized on the 2019 net operating loss (“NOL”("NOL"), carryback and earnings attributable to noncontrolling interests for which is allowed to be carried back up to five years as a resultincome taxes are not the responsibility of the Company. Under the Coronavirus Aid, Relief, and Economic Security Act (“("CARES Act”Act"), enacted on March 27, 2020. Under2020, the CARES Act, the Company’s NOL generated in 2019 may be carried back up to five years, whereas under previous rules NOLs were only allowed to be carried forward. This allowed the Company to realize the benefit of the tax rate differential by carrying back the NOL to tax years when the federal statutory tax rate was 35% rather than the current rate of 21%, consequently generating a larger. The majority of the NOL benefit was recorded in the third quarter when final tax benefitreturn information was received from the NOL dueCompany's joint venture partners. These benefits to the enactment of the CARES Act. The favorable impact resulting from the enactment of the CARES Act waseffective tax rates for both periods were partially offset by state income taxes, the unfavorable impact of cancelled stock options and the vestinglower vested amounts or forfeiture of restricted stock units for which a large portionsome or all of the share-based compensation expense recognized in prior periods willis not be deductible for income tax purposes.sixnine months ended June 30, 2020, the effective income tax rates differed from the federal statutory rate also as a result of state income taxes, with the increases partially offset by earnings attributable to noncontrolling interests for which income taxes are not the responsibility of the Company.For the three and six months ended JuneSeptember 30, 2019, the Company recognized income tax benefitsexpense of $42.9$5.6 million and $40.7an income tax benefit of $35.1 million, with effective income tax rates of 12.0%17.3% and 11.6%11.0%, respectively. The Company’s provisionsprovision for income taxes and effective tax ratesrate for the three and sixnine months ended JuneSeptember 30, 2019 were significantly impacted by the goodwill impairment charge of $379.9 million. Of the total goodwill impairment charge, approximately $209.5 millionrates,rate for the nine months ended September 30, 2019 of 25.1%, which exclude the tax benefit resulting fromexcludes the goodwill impairment charge and associated tax benefit, were 34.7%favorably impacted by earnings attributable to noncontrolling interests for which income taxes are not the responsibility of the Company and 34.0% for the three and six monthstax return-to-provision adjustments. The nine-month period ended JuneSeptember 30, 2019 respectively, and primarily reflectedalso included the unfavorable impact of expired stock options for which the share-based compensation expense recognized in prior periods will not be deductible for income taxes. For the three and six months ended June 30, 2019, the adjustedThe effective income tax rates were higherTUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDthan the federal statutory ratefor both periods also as a result ofinclude provisions for state income taxes, with the increases partially offset by earnings attributable to noncontrolling interests for which income taxes are not the responsibilitynet of the Company.JuneSeptember 30, 2020:(in thousands) Civil Building Specialty
ContractorsTotal Gross goodwill $ 492,074 $ 424,724 $ 156,193 $ 1,072,991 Accumulated impairment (286,931) (424,724) (156,193) (867,848) Balance as of December 31, 2019 205,143 0 0 205,143 Current year activity 0 0 0 0 Balance as of September 30, 2020 Balance as of September 30, 2020 $ 205,143 $ 0 $ 0 $ 205,143 halfnine months of 2020, the novel coronavirus (“COVID-19”) pandemic, as well as the actions taken to contain and mitigate its public health effects, caused disruptions in domestic and global economies and financial markets. The vast majority of the Company’s projects, especially in its Civil reporting unit, have been designated as essential business, which allows the Company to continue its work on those projects. As such, the Civil reporting unit’s operations were not0t materially impacted during the three and sixnine months ended JuneSeptember 30, 2020. However, due to the fluidity of the pandemic, uncertainties as to its scope and duration, and ongoing changes in the way that governments, businesses and individuals react and respond to the COVID-19 pandemic, the Company is unable at this time to accurately predict the pandemic’s future impact on the Company’s business, financial condition or performance. Among other things, governments could prohibit the continuation of certain projects that to date have been designated as “essential” or could impose health, safety and other operational requirements on such projects that could result in delays to or suspensions of such projects. In addition, employees and contractors working on such projects could be unable or unwilling to continue working on them, perhaps for extended periods. The COVID-19 pandemic also could negatively affect the ability of counterparties or joint venture partners to make required payments on a timely basis or at all.UNAUDITEDAs of September 30, 2020 Weighted Average Amortization Period (in thousands) Cost Accumulated
AmortizationAccumulated Impairment Charge Carrying Value Trade names (non-amortizable) $ 117,600 $ — $ (67,190) $ 50,410 Indefinite Trade names (amortizable) 74,350 (23,133) (23,232) 27,985 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (21,839) (16,645) 1,316 12 years Construction contract backlog 149,290 (97,610) — 51,680 3 years Total $ 387,040 $ (142,582) $ (113,067) $ 131,391 As of December 31, 2019 Weighted Average Amortization Period (in thousands) Cost Accumulated
AmortizationAccumulated Impairment Charge Carrying Value Trade names (non-amortizable) $ 117,600 $ — $ (67,190) $ 50,410 Indefinite Trade names (amortizable) 74,350 (21,267) (23,232) 29,851 20 years Contractor license 6,000 — (6,000) — N/A Customer relationships 39,800 (21,048) (16,645) 2,107 12 years Construction contract backlog 149,290 (76,388) — 72,902 3 years Total $ 387,040 $ (118,703) $ (113,067) $ 155,270 sixnine months ended JuneSeptember 30, 2020 was $8.8$9.3 million and $14.6$23.9 million, respectively. Amortization expense for the three and sixnine months ended JuneSeptember 30, 2019 was $0.9 million and $1.8$2.7 million, respectively. As of JuneSeptember 30, 2020, amortization expense is estimated to be $19.5$11.6 million for the remainder of 2020, $26.4$36.5 million in 2021, $22.0$10.5 million in 2022 and $2.5 million per year for the years 2023 through 2025.UNAUDITED(in thousands) As of September 30,
2020As of December 31,
20192017 Senior Notes $ 495,039 $ 494,365 Term Loan B 409,027 N/A 2020 Revolver 0 N/A 2017 Credit Facility N/A 114,000 66,803 182,292 Equipment financing and mortgages 43,819 39,159 Other indebtedness 6,335 4,660 Total debt 1,021,023 834,476 Less: Current maturities 99,504 124,054 Long-term debt, net $ 921,519 $ 710,422 (a)The Company will repurchase or retire at or before maturity the remaining Convertible Notes using proceeds from the Term Loan B, $69.9 million of which is currently held in a restricted cash account for this purpose.JuneSeptember 30, 2020 and December 31, 2019:As of September 30, 2020 As of December 31, 2019 (in thousands) Outstanding Debt Unamortized Discount and Issuance Costs Debt,
as reportedOutstanding Debt Unamortized Discount and Issuance Costs Debt,
as reported2017 Senior Notes $ 500,000 $ (4,961) $ 495,039 $ 500,000 $ (5,635) $ 494,365 Term Loan B 425,000 (15,973) 409,027 N/A N/A N/A Convertible Notes 69,918 (3,115) 66,803 200,000 (17,708) 182,292 $2.9 million and $3.7 million as of June 30, 2020 and December 31, 2019 respectively, and arewere included in other assets inon the Condensed Consolidated Balance Sheets.2017 Senior NotesApril 20, 2017, the Company issued $500 million in aggregate principal amount of 6.875% Senior Notes due 2025 (the “2017 Senior Notes”) in a private placement offering. Interest on the 2017 Senior Notes is payable in arrears semi-annually in May and November of each year, beginning in November 2017.Prior to May 1,August 18, 2020, the Company could have redeemedentered into a new credit agreement (the “2020 Credit Agreement”) with BMO Harris Bank N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and other lenders. The 2020 Credit Agreement provides for a $425.0 million term loan B facility (the “Term Loan B”) and a $175.0 million revolving credit facility (the “2020 Revolver”), with sublimits for the 2017 Senior Notes at a redemption price equal to 100%issuance of their principal amount plus a “make-whole” premium described in the indenture. In addition, prior to May 1, 2020, the Company also could have redeemedletters of credit and swing line loans up to 40%the aggregate amounts of $75.0 million and $10.0 million, respectively. The Term Loan B will mature on August 18, 2027 and the original aggregate principal amount of the notes at a redemption price of 106.875% of their principal amount with the proceeds received by the Company from2020 Revolver will mature on August 18, 2025, in each case, unless any offering of the Company’s equity. Since May 1, 2020, the Company may redeem the 2017 Senior Notes at specified redemption prices described in the indenture. Upon a change of control, holders of the 2017 Senior Notes may requireare outstanding on January 30, 2025 (which is 91 days prior to the Company to repurchase all or partmaturity of the 2017 Senior NotesNotes), in which case, both the Term Loan B and the 2020 Revolver will mature on January 30, 2025 (subject to certain further exceptions).101%any time prior to maturity without penalty, except that the Company must pay a 1.00% premium in respect to the Term Loan B in connection with any transactions that reduce the yield applicable to the Term Loan B within the first twelve months after August 18, 2020 (subject to certain further exceptions). The 2020 Credit Agreement requires the Company to make regularly scheduled payments of principal on the Term Loan B in quarterly installments equal to 0.25% of the initial principal amount thereof,of the Term Loan B. The 2020 Credit Agreement also requires the Company to make prepayments on the Term Loan B inaccrued(ii) additional amounts if (A) in the case of pari passu first lien secured indebtedness, the First Lien Net Leverage Ratio (as defined in the 2020 Credit Agreement) does not exceed 1.35:1.00, (B) in the case of junior lien secured indebtedness, the Total Net Leverage Ratio (as defined in the 2020 Credit Agreement) does not exceed 3.50:1.00 and unpaid(C) in the case of unsecured indebtedness, (x) the Total Net Leverage Ratio does not exceed 3.50:1.00 or (y) the Fixed Charge Coverage Ratio (as defined in the 2020 Credit Agreement) is no less than 2.00:1.00.redemption date.2017 Senior Notes are senior unsecured obligationsmargin applicable to the Term Loan B is between 4.50% and 4.75% for LIBOR and between 3.50% and 3.75% for base rate (which is 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 is initially 4.75% for LIBOR and 3.75% for base rate), and, in each case, is based on the First Lien Net Leverage Ratio. In addition to paying interest on outstanding principal under the 2020 Credit Agreement, the Company will pay a commitment fee to the lenders under the 2020 Revolver in respect of the unutilized commitments thereunder. The Company will pay customary letter of credit fees. If a payment or bankruptcy event of default occurs and is continuing, the otherwise applicable margin on overdue amounts will be increased by 2% per annum. The agreement includes provisions for the replacement of LIBOR with an alternative benchmark rate in the event LIBOR is discontinued. The weighted-average annual interest rate on borrowings under the 2020 Revolver was approximately 7.00% during the three months ended September 30, 2020.are guaranteed byits restricted subsidiaries to maintain a maximum First Lien Net Leverage Ratio range of 2.75:1:00, stepping down to 2.25:1.00 beginning the quarter ending March 31, 2022. The 2020 Credit Agreement also includes certain customary representations and warranties, affirmative covenants and events of default. Subject to certain exceptions, substantially all of the Company’s existing and future material wholly-owned subsidiaries that alsounconditionally guarantee the obligations of the Company under the Company’s2020 Credit Agreement; additionally, subject to certain exceptions, the obligations are secured by a lien on substantially all of the assets of the Company and its subsidiaries guaranteeing these obligations. as defined below. In addition, the indenture for the 2017 Senior Notes provides for customary covenants, including events of default and restrictions on the payment of dividends and share repurchases.2017 Credit Facilityprovidesprovided for a $350 million revolving credit facility (the “2017 Revolver”) and a sublimit for the issuance of letters of credit and swinglineswing line 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, arewere outstanding on December 17, 2020, in which case all such borrowings will maturewould have matured onTUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED, provided however (i) if.Convertible Notes are refinanced in full withCompany used proceeds from the proceeds of permitted refinancing indebtedness in accordance with the terms ofTerm Loan B to repay outstanding amounts under the 2017 Credit Facility,Facility. As a result of repaying the maturity date for the 2017 Credit Facility will remain April 20, 2022 and (ii) if the Company issues “New Convertible Notes” (as defined in the 2017 Credit Facility) and retires the Convertible Notes in full, the maturity date for the 2017 Credit Facility will be the earlier of (x) April 20, 2022 or (y) 90 days prior to the maturity date for such New Convertible Notes. The 2017 Credit Facility also permits additional borrowings in an aggregate amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans.Borrowings under the 2017 Revolver bear interest, at the Company’s option, at a rate equal to (a) LIBOR plus a margin of between 1.50% and 3.00% or (b) a base rate (determined by reference to the highest of (i) the administrative agent’s prime lending rate, (ii) the federal funds effective rate plus 50 basis points, (iii) the LIBOR rate for a one-month interest period plus 100 basis points and (iv) 0%), plus a margin of between 0.50% and 2.00%, in each case based on the Consolidated Leverage Ratio (as defined in the 2017 Credit Facility). In addition to paying interest on outstanding principalamounts under the 2017 Credit Facility and entering into the 2020 Credit Agreement, the Company will pay a commitment fee to the lenders underterminated the 2017 Revolver in respectCredit Facility, including its spring-forward provision that would have accelerated the maturity of the unutilized commitments thereunder. The Companyfacility to December 17, 2020.will pay customary letter of credit fees. If an event of default occurs and is continuing, the otherwise applicable margin and letter of credit fees will be increased 2% per annum. 3.66%3.54% during the sixnine months ended JuneSeptember 30, 2020.The 2017 Credit Facility contains customary covenants for credit facilities of this type, including maximum consolidated leverage ratios ranging from 4.00:1.00 to 3.25:1.00 over At December 31, 2019, 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 lienbalance outstanding on all personal property of the Company and its subsidiaries guaranteeing these obligations.As of June 30, 2020, there was $250 million available under the 2017 Revolver and the Company had not utilized the 2017 Credit Facility for letters of credit. The Company$114 million was in compliance with the financial covenants under the 2017 Credit Facility as of June 30, 2020.As a result of the spring-forward provision mentioned above, the facility will mature on December 17, 2020 if the Convertible Notes remain outstanding at that time. The Company does not have call rights that allow it to unilaterally redeem the Convertible Notes. Due to the spring-forward provision in the 2017 Credit Facility, all borrowings under the facility are included in “Current maturities of long-term debt” on the Condensed Consolidated Balance Sheet asSheet.December, and are included in “Current maturities of long-term debt” on the Condensed Consolidated Balance Sheet as of June 30, 2020.December.will beare convertible only under the following circumstances: (1) during the five business day period after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of Convertible Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (2) if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion rate of 33.0579 (or $39.32) on each applicable trading day; or (3)certain circumstances including upon the occurrence of specified corporate events. 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.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDJuneSeptember 30, 2020, the conversion provisions of the Convertible Notes have not been triggered.triggered and none of the notes have been converted.Three Months Ended
September 30,Nine Months Ended
September 30,(in thousands) 2020 2019 2020 2019 Cash interest expense: Interest on 2017 Senior Notes $ 8,594 $ 8,594 $ 25,781 $ 25,781 Interest on Term Loan B 2,919 0 2,919 0 Interest on 2020 Revolver 26 0 26 0 Interest on 2017 Credit Facility 588 3,385 5,341 9,712 Interest on Convertible Notes 995 1,438 3,870 4,313 Other interest 577 540 1,616 1,656 Cash portion of loss on extinguishment 786 0 786 0 Total cash interest expense 14,485 13,957 40,339 41,462 Amortization of discount and debt issuance costs on Convertible Notes 2,073 2,734 7,870 8,013 Amortization of debt issuance costs on Term Loan B 253 0 253 0 Amortization of debt issuance costs on 2020 Revolver 64 0 64 0 Amortization of debt issuance costs on 2017 Credit Facility 198 401 1,002 1,150 Amortization of debt issuance costs on 2017 Senior Notes 229 213 674 627 Non-cash portion of loss on extinguishment 8,311 0 8,311 0 Total non-cash interest expense 11,128 3,348 18,174 9,790 Total interest expense $ 25,613 $ 17,305 $ 58,513 $ 51,252 ____________________________________________________________________________________________________sixnine months ended JuneSeptember 30, 2020.JuneSeptember 30, 2020, the Company’s operating leases have remaining lease terms ranging from less than one year to 10 years, some of which include options to renew the leases. The exercise of lease renewal options is generally at the Company’s sole discretion. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.UNAUDITEDsixnine months ended JuneSeptember 30, 2020 and 2019:Three Months Ended
September 30,Nine Months Ended
September 30,(in thousands) 2020 2019 2020 2019 Operating lease expense $ 3,563 $ 4,047 $ 10,991 $ 11,749 24,502 17,786 64,823 50,843 28,065 21,833 75,814 62,592 Less: Sublease income 193 263 851 784 Total lease expense $ 27,872 $ 21,570 $ 74,963 $ 61,808 ____________________________________________________________________________________________________year.year. Short-term leases include, among other things, construction equipment rented on an as-needed basis as well as temporary housing.(dollars in thousands) Balance Sheet Line Item As of September 30,
2020As of December 31,
2019Assets ROU assets Other assets $ 37,359 $ 40,156 Total lease assets $ 37,359 $ 40,156 Liabilities Current lease liabilities Accrued expenses and other current liabilities $ 9,829 $ 11,392 Long-term lease liabilities Other long-term liabilities 30,668 31,900 Total lease liabilities $ 40,497 $ 43,292 Weighted-average remaining lease term Weighted-average remaining lease term 4.8 years 5.0 years Weighted-average discount rate 6.94 % 5.96 % Nine Months Ended
September 30,(in thousands) 2020 2019 Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ (11,026) $ (11,586) Non-cash activity: ROU assets obtained in exchange for lease liabilities $ 6,251 $ 7,621 JuneSeptember 30, 2020:Operating Leases 2020 (excluding the nine months ended September 30, 2020) 2020 (excluding the nine months ended September 30, 2020) $ 3,612 2021 11,119 2022 9,773 2023 7,833 2024 5,765 Thereafter 10,086 Total lease payments 48,188 Less: Imputed interest 7,691 Total $ 40,497 UNAUDITEDJuneSeptember 30, 2020, the Company cannot predict the ultimate outcome of the investigation and cannot reasonably estimate the potential loss or range of loss that Five Star or the Company may incur or the impact of the results of the investigation on Five Star or the Company.UNAUDITEDAt this hearing,On August 12, 2020, the bankruptcy court indicated that it will issue a formal order approvingapproved the settlement and denyingdenied TPBC’s third-party beneficiary rights under the lease agreement. On August 20, 2020, TPBC plans tofiled an appeal with the decision, once it is formally issued,U.S. District Court forand to avoid being subordinate to the claims of the secured lenders in the bankruptcy proceedings.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDJuneSeptember 30, 2020, the Company has concluded that the potential for a material adverse financial impact due to the Developer’s claims is remote. With respect to TPBC’s claims against the Developer, its owners, certain lenders and the Port Authority, management has made an estimate of the total anticipated recovery on this project, and such estimate is included in revenue recorded to date.JuneSeptember 30, 2020, there were 1,185,0891,616,672 shares of common stock available for grant under the Tutor Perini Corporation Omnibus Incentive Plan. During the first sixnine months of 2020 and 2019, the Company granted the following share-based instruments: (1) restricted stock units totaling 75,000 and 175,000400,000 with weighted-average fair values per share of $13.93 and $20.41,$20.90, respectively; (2) stock options totaling 75,000 and 85,000135,000 with weighted-average fair values per share of $3.94 and $7.57,$6.84, respectively, and weighted-average per share exercise prices of $25.70 and $25.62,$20.94, respectively; and (3) unrestricted stock units totaling 194,177 and 98,591 with weighted-average fair values per share of $8.60 and $15.72, respectively. During the six months ended June 30, 2019, 750,000 stock options with a weighted-average per share exercise price of $20.33 expired.sixnine months of 2020 was determined using the Black-Scholes model based on the following weighted-average assumptions: (i) expected life of 6.0 years, (ii) expected volatility of 44.91%, (iii) risk-free rate of 1.56%, and (iv) 0 quarterly dividends. Certain performance-based awards contain market condition components and are valued on the date of grant using a Monte Carlo simulation model.sixnine months ended JuneSeptember 30, 2020, the Company recognized, as part of general and administrative expenses, costs for share-based payment arrangements totaling $3.8$2.5 million and $8.3$10.7 million, respectively, and $4.6$4.3 million and $10.1$14.3 million for the three and sixnine months ended JuneSeptember 30, 2019, respectively. As of JuneSeptember 30, 2020, the balance of unamortized share-based compensation expense was $14.8$9.6 million, which is expected to be recognized over a weighted-average period of 1.7 years.UNAUDITEDsixnine months ended JuneSeptember 30, 2020 and 2019:Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Interest cost $ 758 $ 948 $ 2,273 $ 2,844 Expected return on plan assets (1,006) (1,043) (3,017) (3,129) Amortization of net loss 592 463 1,775 1,389 Other 231 225 694 675 Net periodic benefit cost $ 575 $ 593 $ 1,725 $ 1,779 $2.2$3.2 million and $2.0$3.3 million to its defined benefit pension plan during each of the six-monthnine-month periods ended JuneSeptember 30, 2020 and 2019, respectively, and expects to contribute an additional $1.9$0.9 million by the end of 2020.•Level 1 inputs are observable quoted prices in active markets for identical assets or liabilities•Level 2 inputs are observable, either directly or indirectly, but are not Level 1 inputs•Level 3 inputs are unobservableJuneSeptember 30, 2020 and December 31, 2019:As of September 30, 2020 As of December 31, 2019 Fair Value Hierarchy Fair Value Hierarchy (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $ 348,366 $ 0 $ 0 $ 348,366 $ 193,685 $ 0 $ 0 $ 193,685 80,974 0 0 80,974 8,416 0 0 8,416 0 75,475 0 75,475 0 70,974 0 70,974 106,068 1,242 0 107,310 89,572 1,219 0 90,791 Total $ 535,408 $ 76,717 $ 0 $ 612,125 $ 291,673 $ 72,193 $ 0 $ 363,866 ____________________________________________________________________________________________________JuneSeptember 30, 2020, consist of investments in U.S. government agency securities of $37.5$40.0 million, corporate debt securities of $36.8$35.1 million and corporate certificates of deposits of $1.1$0.4 million with maturities of up to five years, and are valued based on pricing models, which are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets and are therefore classified as Level 2 assets. As of December 31, 2019, restricted investments consisted of investments in corporate debt securities of $35.8 million, U.S. government agency securities of $33.8 million and corporate certificates of deposits of $1.4 million with maturities of up to five years. The amortized cost of these available-for-sale securities at JuneSeptember 30, 2020 and December 31, 2019 was not materially different from the fair value.JuneSeptember 30, 2020 are comprised of money market funds of $98.8$106.1 million and municipal bonds of $1.2 million. The fair values of the money market funds are measured using quoted market prices; therefore, they are classified as Level 1 assets. The fair values of municipal bonds are measured using readily available pricing sources for comparable instruments; therefore, they are classified as Level 2 assets. As of December 31, 2019, investments in lieu of retainage consisted of money market funds of $89.6 million and municipal bonds of $1.2 million. The amortized cost of these available-for-sale securities at JuneSeptember 30, 2020 and December 31, 2019 was not materially different from the fair value.$484.4$458.8 million and $485.0 million as of JuneSeptember 30, 2020 and December 31, 2019, respectively. The fair value of theTable Term Loan B was $418.6 million as of ContentsTUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED$190.7$69.3 million and $193.4 million as of JuneSeptember 30, 2020 and December 31, 2019, respectively. The fair values of the 2017 Senior Notes and Convertible Notes were determined using Level 1 inputs, specifically current observable market prices. The fair value of the Convertible Notes repurchased on the extinguishment date was used in determining the loss on extinguishment. The fair value on the extinguishment date approximated the face value of the notes and was determined using Level 2 inputs. The reported value of the Company’s remaining borrowings approximates fair value as of JuneSeptember 30, 2020 and December 31, 2019.(“ (“ASC 810”), the Company assesses its partnerships and joint ventures at inception to determine if any meet the qualifications of a VIE. The Company considers a joint venture a VIE if either (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, the Company reassesses its initial determination of whether a joint venture is a VIE.JuneSeptember 30, 2020, the Company had unconsolidated VIE-related current assets and liabilities of $3.4$0.8 million and $3.3$0.7 million, respectively, included in the Company’s Condensed Consolidated Balance Sheet. As of December 31, 2019, the Company had unconsolidated VIE-related current assets and liabilities of $1.5 million and $1.4 million, respectively, included in the Company’s Condensed Consolidated Balance Sheet. The Company’s maximum exposure to loss as a result of its investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding commitments. There were no future funding requirements for the unconsolidated VIEs as of JuneSeptember 30, 2020.JuneSeptember 30, 2020, the Company’s Condensed Consolidated Balance Sheet included current and noncurrent assets of $401.1$417.5 million and $36.4$19.2 million, respectively, as well as current liabilities of $581.1$550.1 million related to the operations of its consolidated VIEs. As of December 31, 2019, the Company’s Condensed Consolidated Balance Sheet included current and noncurrent assets of $365.0 million and $52.0 million, respectively, as well as current liabilities of $556.1 million related to the operations of its consolidated VIEs.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDsixnine months ended JuneSeptember 30, 2020 and 2019 is provided below:Three Months Ended September 30, 2020 (in thousands) Common
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossNoncontrolling
InterestsTotal
EquityBalance - June 30, 2020 Balance - June 30, 2020 $ 50,771 $ 1,124,672 $ 350,071 $ (40,597) $ (20,776) $ 1,464,141 Net income — — 36,819 — 12,504 49,323 Other comprehensive income — — — 781 520 1,301 Share-based compensation — 2,471 — — — 2,471 Convertible note repayment allocated to conversion option Convertible note repayment allocated to conversion option — (929) — — — (929) Issuance of common stock, net 56 (759) — — — (703) Distributions to noncontrolling interests — — — — (6,307) (6,307) Balance - September 30, 2020 Balance - September 30, 2020 $ 50,827 $ 1,125,455 $ 386,890 $ (39,816) $ (14,059) $ 1,509,297 Nine Months Ended September 30, 2020 (in thousands) Common
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossNoncontrolling
InterestsTotal
EquityBalance - December 31, 2019 $ 50,279 $ 1,117,972 $ 313,991 $ (42,100) $ (9,617) $ 1,430,525 Net income — — 72,899 — 33,421 106,320 Other comprehensive income (loss) — — — 2,284 (646) 1,638 Share-based compensation — 10,163 — — — 10,163 Convertible note repayment allocated to conversion option Convertible note repayment allocated to conversion option — (929) — — — (929) Issuance of common stock, net 548 (1,751) — — — (1,203) Distributions to noncontrolling interests — — — — (37,217) (37,217) Balance - September 30, 2020 Balance - September 30, 2020 $ 50,827 $ 1,125,455 $ 386,890 $ (39,816) $ (14,059) $ 1,509,297 Three Months Ended September 30, 2019 (in thousands) Common
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossNoncontrolling
InterestsTotal
EquityBalance - June 30, 2019 $ 50,279 $ 1,110,496 $ 380,795 $ (42,530) $ (9,481) $ 1,489,559 Net income — — 19,313 — 7,408 26,721 Other comprehensive income (loss) — — — 236 (99) 137 Share-based compensation — 3,491 — — — 3,491 Contributions from noncontrolling interests — — — — 1,140 1,140 Distributions to noncontrolling interests — — — — (17,500) (17,500) Balance - September 30, 2019 $ 50,279 $ 1,113,987 $ 400,108 $ (42,294) $ (18,532) $ 1,503,548 UNAUDITEDNine Months Ended September 30, 2019 (in thousands) Common
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossNoncontrolling
InterestsTotal
EquityBalance - December 31, 2018 $ 50,026 $ 1,102,919 $ 701,681 $ (45,449) $ (21,288) $ 1,787,889 Net income (loss) — — (301,573) — 17,577 (283,996) Other comprehensive income — — — 3,155 160 3,315 Share-based compensation — 13,586 — — — 13,586 Issuance of common stock, net 253 (2,518) — — — (2,265) Contributions from noncontrolling interests — — — — 6,519 6,519 Distributions to noncontrolling interests — — — — (21,500) (21,500) Balance - September 30, 2019 $ 50,279 $ 1,113,987 $ 400,108 $ (42,294) $ (18,532) $ 1,503,548 sixnine months ended JuneSeptember 30, 2020 and 2019 were as follows:Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 (in thousands) Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount Other comprehensive income: Defined benefit pension plan adjustments $ 592 $ (168) $ 424 $ 464 $ (133) $ 331 Foreign currency translation adjustments 1,333 (231) 1,102 (590) 140 (450) Unrealized gain (loss) in fair value of investments Unrealized gain (loss) in fair value of investments (281) 56 (225) 328 (72) 256 Total other comprehensive income 1,644 (343) 1,301 202 (65) 137 520 0 520 (99) 0 (99) Total other comprehensive income attributable to Tutor Perini Corporation $ 1,124 $ (343) $ 781 $ 301 $ (65) $ 236 Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 (in thousands) Before-Tax Amount Tax (Expense) Benefit Net-of-Tax Amount Before-Tax Amount Tax Expense Net-of-Tax Amount Other comprehensive income: Defined benefit pension plan adjustments $ 1,775 $ (504) $ 1,271 $ 1,390 $ (398) $ 992 Foreign currency translation adjustment (1,621) 365 (1,256) 961 (253) 708 Unrealized gain in fair value of investments 2,078 (455) 1,623 2,053 (438) 1,615 Total other comprehensive income 2,232 (594) 1,638 4,404 (1,089) 3,315 (646) 0 (646) 160 0 160 Total other comprehensive income attributable to Tutor Perini Corporation $ 2,878 $ (594) $ 2,284 $ 4,244 $ (1,089) $ 3,155 TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDsixnine months ended JuneSeptember 30, 2020 were as follows:Three Months Ended September 30, 2020 (in thousands) Defined
Benefit
Pension
PlanForeign
Currency
TranslationUnrealized Gain (Loss) in Fair Value of Investments, Net Accumulated
Other
Comprehensive
Income (Loss)Attributable to Tutor Perini Corporation: Balance as of June 30, 2020 $ (36,979) $ (6,563) $ 2,945 $ (40,597) Other comprehensive income (loss) before reclassifications 0 582 (3) 579 Amounts reclassified from AOCI 424 0 (222) 202 Total other comprehensive income 424 582 (225) 781 Balance as of September 30, 2020 $ (36,555) $ (5,981) $ 2,720 $ (39,816) Nine Months Ended September 30, 2020 (in thousands) Defined
Benefit
Pension
PlanForeign
Currency
TranslationUnrealized Gain (Loss) in Fair Value of Investments, Net Accumulated
Other
Comprehensive
Income (Loss)Attributable to Tutor Perini Corporation: Balance as of December 31, 2019 $ (37,826) $ (5,371) $ 1,097 $ (42,100) Other comprehensive income (loss) before reclassifications 0 (610) 1,878 1,268 Amounts reclassified from AOCI 1,271 0 (255) 1,016 Total other comprehensive income (loss) 1,271 (610) 1,623 2,284 Balance as of September 30, 2020 $ (36,555) $ (5,981) $ 2,720 $ (39,816) sixnine months ended JuneSeptember 30, 2019 were as follows:TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDThree Months Ended September 30, 2019 (in thousands) Defined
Benefit
Pension
PlanForeign
Currency
TranslationUnrealized Gain in Fair Value of Investments, Net Accumulated
Other
Comprehensive
Income (Loss)Attributable to Tutor Perini Corporation: Balance as of June 30, 2019 $ (38,009) $ (5,416) $ 895 $ (42,530) Other comprehensive income (loss) before reclassifications 0 (351) 254 (97) Amounts reclassified from AOCI 331 0 2 333 Total other comprehensive income (loss) 331 (351) 256 236 Balance as of September 30, 2019 $ (37,678) $ (5,767) $ 1,151 $ (42,294) Nine Months Ended September 30, 2019 (in thousands) Defined
Benefit
Pension
PlanForeign
Currency
TranslationUnrealized Gain (Loss) in Fair Value of Investments, Net Accumulated
Other
Comprehensive
Income (Loss)Attributable to Tutor Perini Corporation: Balance as of December 31, 2018 $ (38,670) $ (6,315) $ (464) $ (45,449) Other comprehensive income before reclassifications 0 548 1,633 2,181 Amounts reclassified from AOCI 992 0 (18) 974 Total other comprehensive income 992 548 1,615 3,155 Balance as of September 30, 2019 $ (37,678) $ (5,767) $ 1,151 $ (42,294) UNAUDITEDsixnine months ended JuneSeptember 30, 2020 and 2019:Reportable Segments (in thousands) Civil Building Specialty
ContractorsTotal Corporate Consolidated
TotalThree Months Ended September 30, 2020 Total revenue $ 723,324 $ 552,823 $ 322,091 $ 1,598,238 $ — $ 1,598,238 Elimination of intersegment revenue (111,328) (44,683) (136) (156,147) — (156,147) Revenue from external customers $ 611,996 $ 508,140 $ 321,955 $ 1,442,091 $ — $ 1,442,091 Income (loss) from construction operations $ 70,237 $ 15,815 $ 9,700 $ 95,752 (a) $ (12,731) (b) $ 83,021 Capital expenditures $ 10,996 $ 438 $ 224 $ 11,658 $ 352 $ 12,010 $ 26,659 $ 419 $ 1,002 $ 28,080 $ 2,778 $ 30,858 Three Months Ended September 30, 2019 Total revenue $ 591,884 $ 421,241 $ 249,453 $ 1,262,578 $ — $ 1,262,578 Elimination of intersegment revenue (67,338) (5,895) 0 (73,233) — (73,233) Revenue from external customers $ 524,546 $ 415,346 $ 249,453 $ 1,189,345 $ — $ 1,189,345 Income (loss) from construction operations $ 50,695 $ 7,580 $ 7,247 $ 65,522 $ (17,579) (b) $ 47,943 Capital expenditures $ 22,497 $ 144 $ 325 $ 22,966 $ 365 $ 23,331 $ 11,953 $ 495 $ 1,018 $ 13,466 $ 2,761 $ 16,227 ____________________________________________________________________________________________________JuneSeptember 30, 2020, income (loss) from construction operations was positively impacted by $19.6 million (a favorable after-tax impact of $14.1 million, or $0.28 per diluted share) as a result of a favorable arbitration decision related to a dispute in the Specialty Contractors segment. This favorable impact was largely offset by an adverse impact of $15.2 million (an unfavorable after-tax impact of $10.9 million, or $0.21 per diluted share) due to an unfavorable legal ruling pertaining to a mechanical project in California in the Specialty Contractors segment.Reportable Segments (in thousands) Civil Building Specialty
ContractorsTotal Corporate Consolidated
TotalNine Months Ended September 30, 2020 Total revenue $ 1,948,095 $ 1,548,223 $ 839,040 $ 4,335,358 $ — $ 4,335,358 Elimination of intersegment revenue (280,494) (85,298) (319) (366,111) — (366,111) Revenue from external customers $ 1,667,601 $ 1,462,925 $ 838,721 $ 3,969,247 $ — $ 3,969,247 Income (loss) from construction operations $ 181,756 $ 37,120 $ 6,591 $ 225,467 (a) $ (37,523) (b) $ 187,944 Capital expenditures $ 41,139 $ 636 $ 952 $ 42,727 $ 669 $ 43,396 $ 67,050 $ 1,274 $ 2,990 $ 71,314 $ 8,320 $ 79,634 Nine Months Ended September 30, 2019 Total revenue $ 1,516,623 $ 1,291,043 $ 664,279 $ 3,471,945 $ — $ 3,471,945 Elimination of intersegment revenue (184,925) (13,913) 0 (198,838) — (198,838) Revenue from external customers $ 1,331,698 $ 1,277,130 $ 664,279 $ 3,273,107 $ — $ 3,273,107 Income (loss) from construction operations $ (72,032) $ 6,903 $ (160,036) $ (225,165) (d) $ (45,696) (b) $ (270,861) Capital expenditures $ 60,948 $ 349 $ 558 $ 61,855 $ 822 $ 62,677 $ 31,608 $ 1,495 $ 3,143 $ 36,246 $ 8,295 $ 44,541 threenine months ended JuneSeptember 30, 2019, the Company recorded a non-cash goodwill impairment charge of $379.9 million in income (loss) from construction operations (an unfavorable after-tax impact of $329.5 million, or $6.56 per diluted share) resulting from an interim impairment test the Company performed as of June 1, 2019.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITED____________________________________________________________________________________________________(a)During the six months ended June 30, 2020, income (loss) from construction operations was impacted by $13.2 million (an unfavorable after-tax impact of $9.5 million, or $0.19 per diluted share) due to an adverse arbitration ruling pertaining to an electrical project in New York in the Specialty Contractors segment.(b)Consists primarily of corporate general and administrative expenses.(c)Depreciation and amortization is included in income (loss) from construction operations.(d)During the six months ended June 30, 2019, the Company recorded a non-cash goodwill impairment charge of $379.9 million in income (loss) from construction operations (an unfavorable after-tax impact of $329.5 million, or $6.57 per diluted share) resulting from an interim impairment test the Company performed as of June 1, 2019.TUTOR PERINI CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)UNAUDITEDThree Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Income (loss) from construction operations $ 83,021 $ 47,943 $ 187,944 $ (270,861) Other income (expense) (8,048) 1,674 (8,364) 2,996 Interest expense (25,613) (17,305) (58,513) (51,252) Income (loss) before income taxes $ 49,360 $ 32,312 $ 121,067 $ (319,117) follows:(in thousands) As of September 30, 2020 As of December 31, 2019 Civil $ 3,168,681 $ 2,791,402 Building 1,086,462 995,298 Specialty Contractors 708,673 635,180 78,440 63,897 Total assets $ 5,042,256 $ 4,485,777 ____________________________________________________________________________________________________JuneSeptember 30, 2020 and the results of our operations for the three and sixnine months ended JuneSeptember 30, 2020 and should be read in conjunction with other information, including the unaudited Condensed Consolidated Financial Statements and notes included in Part I, Item 1, Financial Information, of this Quarterly Report on Form 10-Q, the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the year ended December 31, 2019, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019 and in Part II, Item 1A below.•The impact of the COVID-19 pandemic and related events that are beyond our control, including possible effects on our business and operations, customers and suppliers, and employees, contractors and subcontractors, which could affect adversely our projects and the geographic regions in which we conduct business;•A significant slowdown or decline in economic conditions;•Revisions of estimates of contract risks, revenue or costs; the timing of new awards; or the pace of project execution may result in losses or lower than anticipated profit;•Unfavorable outcomes of existing or future litigation or dispute resolution proceedings against customers (project owners, developers, general contractors, etc.), subcontractors or suppliers, as well as failure to promptly recover significant working capital invested in projects subject to such matters;•The requirement to perform extra, or change order, work resulting in disputes or claims or adversely affecting our working capital, profits and cash flows;•Risks and other uncertainties associated with assumptions and estimates used to prepare financial statements;•Inability to retain key members of our management, to hire and retain personnel required to complete projects or implement succession plans for key officers;•Client cancellations of, or reductions in scope under, contracts reported in our backlog;•Failure to meet contractual schedule requirements, which could result in higher costs and reduced profits or, in some cases, exposure to financial liability for liquidated damages and/or damages to customers;Failure to meet our obligations under our debt agreements;•Decreases in the level of government spending for infrastructure and other public projects;Downgrades in our credit ratings;•Failure of our joint venture partners to perform their venture obligations, which could impose additional financial and performance obligations on us, resulting in reduced profits or losses;•Increased competition and failure to secure new contracts;•Failure to meet our obligations under our debt agreements;•Economic, political and other risks, including civil unrest, security issues, labor conditions, corruption and other unforeseeable events in countries where we do business, resulting in unanticipated losses;•Possible systems and information technology interruptions, including due to cyberattack, systems failures or other similar events;•The impact of inclement weather conditions on projects;•Failure to comply with laws and regulations related to government contracts;•Potential dilutive impact of our Convertible Notes in our diluted earnings per share calculation;•Uncertainty from the expected discontinuance of the London Interbank Offered Rate and transition to any other interest rate benchmark; andDowngrades in our credit ratings;•Conversion of our outstanding Convertible Notes that could dilute ownership interests of existing stockholders and could adversely affect the market price of our common stock.stock; andthe middle to latter part of the second quarter,May 2020, when certain states and cities began easing some restrictions to allow for the gradual re-opening and expansion of business activities and most of our affected projects of significance resumed more normalized operations. The pace of easing and the continued level of restrictions have varied across regions based on the rates of new COVID-19 cases and hospitalizations, and this variability is expected to continue until rates decrease to levels that are more acceptable to public health officials.sixnine months ended JuneSeptember 30, 2020, the Company estimates that the COVID-19 pandemic reduced revenue by $130approximately $40 million and $190$230 million, respectively, income from construction operations by $9approximately $3 million and $12$15 million, respectively, and diluted earnings per common share by $0.13$0.04 and $0.17,$0.21, respectively. TheseDuring the first nine months of 2020, these estimated impacts primarily affected the results of the lower-margin Building and Specialty Contractors segments, as certain projects in the Specialty Contractors segment in New York and certain projects in the Building segment in California and Arkansas experienced reduced project execution activities and productivity primarily due to temporary project suspensions and restarts.restarts, and in some cases a slower pace of project execution. The higher-margin Civil segment was not significantly impacted by the COVID-19 pandemic during the first halfnine months of 2020. The vast majority of our projects have been considered essential business activities, which has allowed projects to continue while implementing new health and safety requirements.Despite the impacts from the COVID-19 pandemic described above, consolidatedsixnine months ended JuneSeptember 30, 2020 was $1.3$1.4 billion and $2.5$4.0 billion, respectively, an increase of 13% and 21%, respectively, for both periods, compared to $1.1$1.2 billion and $2.1$3.3 billion, respectively, for the same periods in 2019. TheThe growth was primarily attributable to increased activities on several infrastructure projects in California Minnesota, and the Northeast, and certain building projects in California and Oklahoma.California. The increases were partially offset by the COVID-19 impacts mentioned above.sixnine months ended JuneSeptember 30, 2020 was $57.7$83.0 million and $104.9$187.9 million, respectively, compared to aincome from construction operations of $47.9 million and loss from construction operations of $341.7 million and $318.8$270.9 million for the same periods in 2019. Adjusted income from construction operations for the three and sixnine months ended JuneSeptember 30, 2019, which is a non-GAAP financial measure and excludes the $379.9 million non-cash goodwill impairment charge incurred in 2019, was $38.2 million and $61.1 million, respectively.$109.0 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 increase for both periods was primarily driven by contributions from the above-mentioned infrastructure projects. For the six-month period of 2020, the increase was also partially driven by the absence of prior year unfavorable adjustments that totaled $20.0million on certain electrical and mechanical projects, in New York, none of which were individually material. The increases for both the second quarter and year-to-date 2020 periods were partially offset by the $13.2million impact of an unfavorable arbitration ruling related to an electrical project in New York, incremental non-cash amortization expense of $7.9$8.4 million and $12.8$21.2 million for the three and sixnine months ended JuneSeptember 30, 2020, respectively, related to the increased equity interest in a joint venture that the Company acquired in the fourth quarter of 2019,2019. In addition, both periods of 2020 were positively impacted by the net result of a favorable arbitration decision and an unfavorable legal ruling in the Specialty Contractors segment. For the nine-month period of 2020, the increase was also partially driven by the absence of prior year net unfavorable adjustments that totaled $26.7 million on certain electrical and mechanical projects in New York, none of which were individually material. The increase for the nine-month period of 2020 was partially offset by the $13.2 million impact of an unfavorable arbitration ruling$9.6 million$37 thousand and $14.7 million for the three and sixnine months ended JuneSeptember 30, 2020, respectively, compared to income tax expense of $5.6 million and an income tax benefit of $42.9 million and $40.7$35.1 million for the same periods in 2019. The effective tax rate was 23.7%0.1% and 20.5% 12.2% for the three and sixnine months ended JuneSeptember 30, 2020, respectively, compared to 12.0%17.3% and 11.6%11.0% for the comparable periods in 2019. TheBoth periods of 2020 primarily reflect tax benefits related to provisions of the CARES Act, whereas the income tax benefits inbenefit for the first nine months of 2019 periods include theincluded a $50.4 million tax benefit recognized as a result of the goodwill impairment charge. See Corporate, Tax and Other Mattersbelow for a discussion of the changes in the effective tax rate.sixnine months ended JuneSeptember 30, 2020 was $0.37$0.72 and $0.71,$1.43, respectively, compared to adiluted earnings per common share of $0.38 and loss per common share of $6.38 and $6.40$6.01 for the same periods in 2019. The COVID-19 pandemic had an estimated negative impact on diluted earnings per common share of $0.13$0.04 and $0.17$0.21 for the three and sixnine months ended JuneSeptember 30, 2020.2020, respectively. Adjusted diluted earnings per common share, which is a non-GAAP financial measure and excludes the goodwill impairment charge (and the associated tax benefit) for the three and sixnine months ended JuneSeptember 30, 2019, was $0.18 and $0.17, respectively.$0.55. The increase in adjusted diluted earnings per common share for both periods was principally due to the factors discussed above that drove the increase in income from construction operations,.sixnine months ended JuneSeptember 30, 2020 totaled $0.7$0.6 billion and $1.3$1.9 billion, respectively, compared to $0.9$0.7 billion and $4.2$4.9 billion for the same periods in 2019. The lower volume of new awards in both current year periods was due to the timing of bidding for and awards of prospective project opportunities, which the Company expects will occur later in 2020 or in 2021. The Civil and Building segments weresegment was the primary contributorscontributor to the new award activity in the secondthird quarter of 2020.2020. The most significant new awards included more than $300$121 million for the Company's share of a joint-venture mass-transit project in Massachusetts, $75 million of additional funding for various mass-transit projects, over $235 million for various building projects in California, the largest of which was a $69$54 million educationmixed-use building project in California, and $67a $47 million for various civil infrastructure projectsmilitary facilities project in the Midwest.Guam. The COVID-19 pandemic has resulted in and could potentially continue to result in delays in the bidding and awarding of certain projects the Company is pursuing due to customer funding constraints and administrative challenges.JuneSeptember 30, 2020 was $10.0$9.2 billion compared to $11.2 billion at December 31, 2019. Backlog declined as a result of the higher current year revenue generated from near-record backlog at the end of 2019 outpacing current year new awards.awards. As of JuneSeptember 30, 2020, the mix of backlog by segment was approximately 55%57% for Civil, 23%21% for Building and 22% for Specialty Contractors.JuneSeptember 30, 2020:(in millions) Backlog at December 31, 2019 Revenue
RecognizedCivil $ 6,037.2 $ 837.5 $ (1,667.6) $ 5,207.1 Building 2,790.3 629.4 (1,462.9) 1,956.8 Specialty Contractors 2,393.6 463.2 (838.7) 2,018.1 Total $ 11,221.1 $ 1,930.1 $ (3,969.2) $ 9,182.0 ofattributable to the COVID-19 pandemic, they may delay or cancel planned infrastructure investments due to reduced revenues from income and sales taxes, fuel taxes and tolls. The extent of such effects, their duration, and how state and local governments will respond remains uncertain, just as the scope and duration of the COVID-19 pandemic remains uncertain. The possibility of additional federal financial assistance or stimulus programs directedmeasures.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.and six months ended JuneSeptember 30, 2019 or the three and nine months ended September 30, 2020; therefore, the non-GAAP financial measures do not differ from GAAP results in those periods.Reconciliation of Non-GAAP Financial Measures (in millions) Civil Building Specialty
ContractorsCorporate Consolidated
TotalNine Months Ended September 30, 2019 Income (loss) from construction operations, as reported $ (72.0) $ 6.9 $ (160.0) $ (45.8) $ (270.9) Plus: Goodwill impairment charge 210.2 13.5 156.2 — 379.9 Adjusted income (loss) from construction operations $ 138.2 $ 20.4 $ (3.8) $ (45.8) $ 109.0 Nine Months Ended
September 30,(in millions, except per common share amounts and percentages) 2020 2019 Net income (loss) attributable to Tutor Perini Corporation, as reported $ 72.9 $ (301.6) Plus: Goodwill impairment charge — 379.9 Less: Tax benefit provided on goodwill impairment charge — (50.4) Adjusted net income attributable to Tutor Perini Corporation $ 72.9 $ 27.9 Diluted earnings (loss) per common share, as reported $ 1.43 $ (6.01) Plus: Goodwill impairment charge — 7.56 Less: Tax benefit provided on goodwill impairment charge — (1.00) Adjusted diluted earnings per common share $ 1.43 $ 0.55 Effective income tax rate, as reported 12.2 % (11.0) % Tax effect of goodwill impairment charge — % 36.1 % Adjusted effective income tax rate 12.2 % 25.1 % Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 Revenue $ 612.0 $ 524.5 $ 1,667.6 $ 1,331.7 Income (loss) from construction operations, as reported 70.2 50.7 181.8 (72.0) Plus: Goodwill impairment charge — — — 210.2 Adjusted income from construction operations $ 70.2 $ 50.7 $ 181.8 $ 138.2 sixnine months ended JuneSeptember 30, 2020 increased 20%17% and 31%25%, respectively, compared to the same periods in 2019. The revenue growth for both periods was primarily due to overall increased project execution activities on various mass-transit projects in California and Minnesota. TheThe COVID-19 pandemic had an insignificant impact on revenue in both periods (anfor the third quarter of 2020 and an estimated $15 million andnegative impact on revenue of $25 million respectively).adjustedadjusted income from construction operations for the three and sixnine months ended JuneSeptember 30, 2020 increased 43%39% and 27%32%, respectively, compared to the same periods in 2019. The increase for both periods was primarily driven by the volume growth mentioned above and improved performance on certain projects, partially offset by the impact of incremental non-cash amortization expense of $7.9$8.4 million and $12.8$21.2 million for the three and sixnine months ended JuneSeptember 30, 2020, respectively, related to the increased equity interest in a joint venture that the Company acquired in the fourth quarter of 2019. TheThe COVID-19 pandemic resulted in insignificant negative impacts on income from construction operations in both current year periodsfor the three and nine months ended September 30, 2020 (an estimated $2$1 million in each period)and $3 million, respectively).10.6%10.9% for the three and sixnine months ended JuneSeptember 30, 2020, respectively, compared to operating margin of (34.7)%9.7% and (15.2)(5.4)% and adjusted operating margin of 9.6%9.7% and 10.8%10.4% for the same periods in 2019, which2019. Adjusted operating margin excludes the impact of the 2019 goodwill impairment charge. The differenceincrease in adjusted operating margin for the second quarterboth periods of 2020 was primarily driven by improved performance on several ongoing projects, partially offset by the aforementioned incremental amortization expense. For the first half of 2020, the difference in adjusted operating margin was principally driven by the same incremental amortization expense.$377$282 million and $555$838 million for the three and sixnine months ended JuneSeptember 30, 2020, respectively, compared to $149$293 million and $1.8$2.1 billion for the same periods in 2019. The increased level of new awards in the second quarter of 2020 was primarily driven by more than $300 million of additional funding for various mass-transit projects, as well as$67 million for various projects in the Midwest. The substantially lower volume of new awards in the first halfnine months of 2020 compared to the same period in 2019 was due to the timing of bidding for and awards offirst-halfnine-month period included the $1.4 billion Purple Line Section 3 Stations project in California. New awards included $121 million for the Company's share of a joint-venture mass-transit project in Massachusetts and a $47 million military facilities project in Guam. Several large Civil segment opportunities are expected to bid andand/or potentially be awarded to the Company later this year and in 2021. However, the COVID-19 pandemic is resulting in revenue shortfalls for many state and local government agencies that could result in the deferral or cancellation of certain new projects, depending on the allocation and prioritization of state and local funding, as well as the availability, timing and magnitude of anticipated supplemental funding from the federal government.$5.5$5.2 billion as of JuneSeptember 30, 2020 compared to $6.2$5.9 billion as of JuneSeptember 30, 2019. The higher backlog in the prior year period was primarily driven by the Purple Line Section 3 Stations project awarded in the first quarter of 2019. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, substantial anticipated funding from various voter-approved transportation measures and public agencies’ long-term spending plans. The Civil segment is well-positioned to continue capturing its share of these prospective projects. (loss) from construction operations and adjusted income from construction operations for the Building segment are summarized as follows:Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 Revenue $ 508.1 $ 415.3 $ 1,462.9 $ 1,277.1 Income from construction operations, as reported Income from construction operations, as reported 15.8 7.6 37.1 6.9 Plus: Goodwill impairment charge — — — 13.5 Adjusted income from construction operations $ 15.8 $ 7.6 $ 37.1 $ 20.4 sixnine months ended JuneSeptember 30, 2020 increased 10%22% and 11%15%, respectively, compared to the same periods in 2019 primarily due to increased project execution activities on various projects in California Oklahoma and the Northeast.Oklahoma. The increases were partially offset by reduced activity on certain projects in California that are completed or nearing completion. Revenue grew in both periods of 2020 despite thethe negative impact of the COVID-19 pandemic, which resulted in delays on certain projects that negatively impacted revenue by approximately $80$35 million and $115$150 million for the three and sixnine months ended JuneSeptember 30, 2020, respectively.sixnine months ended JuneSeptember 30, 2020 increased 84%109% and 66%82%, respectively, compared to the same periods in 2019. The increase for both periods was principally driven by the factors mentioned above that drove the increases in revenue. Therevenue, as well as increased contributions from certain higher-margin projects in the current year. The COVID-19 pandemic resulted in insignificantnegative impacts on income from construction operations in both current year periods (an estimated $2 million and $3$5 million, respectively).3.8%3.1% and 2.2%2.5% for the three and sixnine months ended JuneSeptember 30, 2020, respectively, compared to operating margin of (0.9)%1.8% and (0.1)%0.5% and adjusted operating margin of 2.3%1.8% and 1.5%1.6% for the same periods in 2019, which2019. Adjusted operating margin excludes the impact of the 2019 goodwill impairment charge. The increase in adjusted operating margin for bothboth periods was driven by the factors mentioned above that drove the increases in revenue and income from construction operations.$260$186 million and $443$629 million for the three and sixnine months ended JuneSeptember 30, 2020, respectively, compared to $328$199 million and $1.4$1.6 billion for the same periods in 2019. The lower volume of new awards in both periods of 2020 was due to the timing of prospective project opportunities, which are expected to be awarded later this year or in 2021, whereas the first halfnine months of 2019 included several sizeable new awards, such as the Choctaw Casino and Resort project in Oklahoma, a large hospitalitythe Table Mountain Hotel and gamingCasino project in California and the Southland Gaming Casino and Hotel project in Arkansas. Significant newNew awards in the secondthird quarter of 2020 includedincluded over $235$75 million of additional funding for various building projects in California the largest of which wasand a $69$54 million education building. mixed-use building project in California. The COVID-19 pandemic is negatively impacting demand in certain end markets, such as hospitality and gaming, which has resulted in and could continue to result in reduced project opportunities in those markets.$2.3$2.0 billion as of JuneSeptember 30, 2020 compared to $2.9$2.7 billion as of JuneSeptember 30, 2019. The decrease was driven by revenue growth for the segment that exceeded new awards, which were impacted by thelossincome (loss) from construction operations and adjusted lossincome (loss) from construction operations for the Specialty Contractors segment are summarized as follows:Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 Revenue $ 322.0 $ 249.5 $ 838.7 $ 664.3 Income (loss) from construction operations, as reported Income (loss) from construction operations, as reported 9.7 7.2 6.6 (160.0) Plus: Goodwill impairment charge — — — 156.2 Adjusted income (loss) from construction operations Adjusted income (loss) from construction operations $ 9.7 $ 7.2 $ 6.6 $ (3.8) sixnine months ended JuneSeptember 30, 2020 increased 5%29% and 25%26%, respectively, compared to the same periods in 2019. The increasegrowth for the year-to-date periodboth periods was principally driven by an overall increase indue to increased project execution activities on variousa transportation project in the Northeast and a hospitality and gaming project in California. For the year-to-date period, the growth was also attributable to increased project execution activities on certain electrical and mechanical projects in the Northeast. Revenue grew in both periods of 2020 despite the impact of theNew York. The COVID-19 pandemic which resulted in delays on certain projects that negatively impacted revenue by approximately $35$5 million and $50$55 million for the three and sixnine months ended JuneSeptember 30, 2020, respectively.LossIncome from construction operations for the three and sixnine months ended JuneSeptember 30, 2020 was $11.4$9.7 million and $3.1$6.6 million, respectively, compared to aincome from construction operations of $7.2 million and loss from construction operations of $159.8$160.0 million and $167.3 million for the same periods in 2019. Excluding the impact of the goodwill impairment charge in the second quarter of 2019, adjusted loss from construction operations was $3.6 million and $11.1$3.8 million for the three and sixnine months ended JuneSeptember 30, 2019, respectively. 2019. The increase in adjusted lossincome from construction operations for the second quarterboth periods of 2020 was primarily due to the $13.2increased volume mentioned above, as well as the net positive impact of a $19.6 million favorable arbitration decision and a $15.2 million unfavorable arbitrationlegal ruling pertaining to an electricala mechanical project in New YorkCalifornia, partially offset by various other immaterial adjustments to project forecasts and the negative impact of the COVID-19 pandemic (an estimated $5 million), partially offset by increased activity on various projects in(less than $1 million for the Northeast.third quarter and approximately $7 million for the nine-month period of 2020). For the first halfnine-month period of 2020, the decreased loss from construction operationsincrease was primarily due toalso driven by the absence of the prior year net unfavorable adjustments describedthat totaled $26.7 million, partially offset by the $13.2 million unfavorable arbitration ruling in the second quarter of 2020, both discussed in the Executive Overviewand net increased activity on various projects in the Northeast, partially offset by the $13.2million unfavorable arbitration ruling and the negative impact of the COVID-19 pandemic (an estimated $7 million).(4.9)%3.0% and (0.6)%0.8% for the three and sixnine months ended JuneSeptember 30, 2020, respectively, compared to operating margin of (71.6)%2.9% and (40.3)(24.1)% and adjusted operating margin of (1.6)%2.9% and (2.7)(0.6)% for the same periods in 2019, which2019. Adjusted operating margin excludes the impact of the 2019 goodwill impairment charge. The changes in adjusted operating marginsmargin for both periods were mainly attributable to the aforementioned factors that drove the changes in revenue and adjusted income (loss) from construction operations.$81$157 million and $306$463 million for the three and sixnine months ended JuneSeptember 30, 2020, respectively, compared to $439$199 million and $918 million$1.1 billion for the same periods in 2019. The COVID-19 pandemic has resulted in and could continue to result in reduced demand from certain commercial and government customers that are experiencing funding constraints.$2.2$2.0 billion as of JuneSeptember 30, 2020 compared to $2.3 billion as of JuneSeptember 30, 2019. The Specialty Contractors segment continues to be increasingly focused on servicing the Company’s growing backlog of large Civil and Building segment projects, but it also remains well-positioned to capture its share of new projects for external customers, leveraging the size and scale of our business units that operate in New York, Texas, Florida and California and the strong reputation held by these business units for high-quality work on large, complex projects.$14.1$12.7 million and $24.8$37.5 million during the three and sixnine months ended JuneSeptember 30, 2020, respectively, compared to $13.6$17.6 million and $28.4$46.0 million during the three and sixnine months ended JuneSeptember 30, 2019, respectively. The decrease in the sixthree and nine months ended JuneSeptember 30, 2020 compared to the same period in 2019 was primarily due to lower compensation-related expenses.Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 Other income (expense) $ (8.1) $ 1.7 $ (8.4) $ 3.0 Interest expense (25.6) (17.3) (58.5) (51.3) Income tax (expense) benefit — (5.6) (14.7) 35.1 Interest expense decreased $1.0 million both the three and sixnine months ended JuneSeptember 30, 2020 was a net expense of $8.1 million and $8.4 million, respectively, compared to net other income of $1.7 million and $3.0 million for the comparable prior year periods. The net expense in the 2020 periods was primarily due to a charge related to the unfavorable resolution of a dispute pertaining to a past business acquisition.decreasesincreases in the 2020 periods were non-cash and were primarily due to lower average interest rates onextinguishment costs related to our line of credit.effectiveprovision for income tax ratetaxes was $37 thousand and $14.7 million for the three and sixnine months ended JuneSeptember 30, 2020, was 23.7% and 20.5%, respectively, compared to 12.0%income tax expense of $5.6 million and 11.6%, respectively,an income tax benefit of $35.1 million for the same periods in 2019. The effective tax rate was 0.1% and 12.2% for the three and nine months ended September 30, 2020, respectively, compared to 17.3% and 11.0% for the comparable periods in 2019. The effective income tax raterates for the six months ended June 30, 2020 periods primarily reflectsreflect the favorable impact oftax rate differential realized on the 2019 net operating loss (“NOL”), carryback and earnings attributable to noncontrolling interests for which is allowed to be carried back up to five years as a resultincome taxes are not the responsibility of the Company. Under the Coronavirus Aid, Relief, and Economic Security Act (“("CARES Act”Act"), enacted on March 27, 2020. Under2020, the CARES Act, the Company’s NOL generated in 2019 may be carried back up to five years, whereas under previous rules NOLs were only allowed to be carried forward. This allowed the Company to realize the benefit of the tax rate differential by carrying back the NOL to tax years when the federal statutory tax rate was 35% rather than the current rate of 21%, consequently generating a larger. The majority of the NOL benefit was recorded in the third quarter when final tax benefitreturn information was received from the NOL dueCompany's joint venture partners. These benefits to the enactment of the CARES Act. The favorable impact resulting from the enactment of the CARES Act waseffective tax rates for both periods were partially offset by state income taxes, the unfavorable impact of cancelled stock options and the vestinglower vested amounts or forfeiture of restricted stock units for which a large portionsome or all of the share-based compensation expense recognized in prior periods willis not be deductible for income tax purposes.Company’s provisionsCompany's provision for income taxes and effective tax ratesrate for the nine months ended September 30, 2019 periods were significantly impacted by the goodwill impairment charge. For the threenine months ended JuneSeptember 30, 2019, the Company recognized aan income tax benefit of $42.9 million on a loss before income taxes of $358.3$35.1 million. The lower effective tax ratesrate in the 2019 periodsperiod primarily resulted from the $379.9 million goodwill impairment charge discussed above of which approximately $209.5 million was not deductible for income tax purposes. The Company recognized a tax benefit totaling $50.4 million as a result of the impairment charge.The adjusted effective income tax rates,rate, which excludeexcludes the tax benefit resulting from the goodwill impairment charge, were 34.7% and 34.0%, respectively,was 25.1% for the three and sixnine months ended JuneSeptember 30, 2019. The lower effective rate in the third quarter of 2020 compared to 2019 andis primarily reflecteddue to the unfavorablefavorable impact of expired stock options for which the share-based compensation expense recognizedNOL carryback as described above. The lower adjusted effective rate in prior periods will not be deductible for income taxes. the nine month period of 2020 compared to last year is also primarily due to the favorable impact of the NOL carryback as described above. For a further discussion of income taxes, refer to Note 7 of the Notes to Condensed Consolidated Financial Statements.$350$175 million, which may be used for revolving loans, letters of credit and/or general purposes. We believe that cash generated from operations, along with our unused credit capacity of $250$175 million and available cash balances as of JuneSeptember 30, 2020, will be sufficient to fund any working capitalIn addition, we expect that liquidity will continue to be positively impacted in 2020 by improved cash flow generation from project execution activities, settlements of disputed matters and certain provisions of the CARES Act, which enable the Company to accelerate the collection of tax refunds associated with the 2019 NOL carryback and allow the deferral of certain 2020 Social Security payroll tax liabilities until the end of 2021 and 2022. For a discussion of our 2017 Credit Facilitynew credit agreement and our Convertible Notes,other debt transactions, seethe section entitled Debt below.$182.6$348.4 million as of JuneSeptember 30, 2020 compared to $193.7 million as of December 31, 2019. Cash immediately available for general corporate purposes was $57.7$169.0 million and $43.8 million as of JuneSeptember 30, 2020 and December 31, 2019, 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 and at September 30, 2020 also includes cash held to repurchase the Convertible Notes that remain outstanding, totaled $84.3$156.4 million as of JuneSeptember 30, 2020 compared to $79.4 million as of December 31, 2019.sixnine months ended JuneSeptember 30, 2020, net cash provided by operating activities was $58.2$131.0 million (with $92.2$72.7 million provided in the secondthird quarter), which is a new record high for the first nine months of any year since the merger in 2008, due primarily to cash generated from earnings sources,partially offset by investment in working capital. In the second quarter of 2020, strong cash contributions associated with increased project execution activities on certain, higher-margin projects with favorable billing terms, driven by the Company’s near-record backlog at the end of 2019, were enhanced by the resolution and collection of approximately $40 million of disputed balances and a modest decrease in working capital. For the first half of 2020, the $58.2 million cash provided by operating activities resulted from the strong cash contributions associated with the increased project execution activities mentioned above and the resolution and collection of approximately $40 million of disputed balances noted above, which more than offset an increase of $68.5 million in investment in working capital. The increase in workingsixnine months of 2020 primarily reflects an increase in accounts receivable due to timing of collections, partially offset by increasesan increase in billings in excess of costs and estimated earnings (“BIE”) and accounts payable due to timing of payments to suppliers and subcontractors. During the sixnine months ended JuneSeptember 30, 2019, net cash used inprovided by operating activities was $111.5$111.4 million due primarily to investments in project working capital that exceeded cash generated from earnings sources. The changesources while investment in working capital primarily resulted from an increase in accounts receivable due to timing of collections. $169.7$19.6 million when comparing the first sixnine months of 2020 with the same period of 2019. The substantial increase in cash from operating activities in the first halfthree quarters of 2020 compared to 2019 reflects the significant increase in cash from earnings sources as well as a considerable reductionpartially offset by an increase in investment in working capital primarily as a result of improved collections associated with substantial growtha smaller increase in project billings in excess of costs and toestimated earnings ("BIE"), which was reduced by a lesser degree, increaseslarger increase in accounts payable and accrual balances due to the increased project activity.sixnine months of 2020 and 2019 was $32.6$32.9 million and $41.2 million, respectively, primarily due to the acquisition of property and equipment for projects totaling $43.4 million, partially offset by proceeds from the sale of property and equipment of $13.3 million. Cash used for investing activities during the first nine months of 2019 was $66.1 million, primarily due to the acquisition of property and equipment for projects.sixnine months of 2020, net cash used inprovided by financing activities was $36.2$129.1 million, which was primarily driven by $30.9increased net borrowings of $178.8 million, partially offset by $37.2 million of cash distributions to noncontrolling interests and a $4.3 million net repayment of borrowings.interests. Net cash provided by financing activities for the comparable period in 2019 was $187.5$48.3 million, which was primarily driven bydue to increased net borrowings of $189.0 million.JuneSeptember 30, 2020, we had working capital of $1.3$1.8 billion, a ratio of current assets to current liabilities of 1.501.75 and a ratio of debt to equity of 0.57,0.68, compared to working capital of $1.4 billion, a ratio of current assets to current liabilities of 1.66 and a ratio of debt to equity of 0.58 at December 31, 2019.Summarized below arekey termsCompany entered into a new credit agreement (the "2020 Credit Agreement") with BMO Harris Bank N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and other lenders. The 2020 Credit Agreement provides for a $425.0 million term loan B facility (the “Term Loan B”) and a $175.0 million revolving credit facility (the “2020 Revolver”), with sublimits for the issuance of letters of credit and swing line loans up to the aggregate amounts of $75.0 million and $10.0 million, respectively. The Term Loan B will mature on August 18, 2027 and the 2020 Revolver will mature on August 18, 2025, in each case, unless any of the 2017 Credit Facility asSenior Notes are outstanding on January 30, 2025 (which is 91 days prior to the maturity of Junethe 2017 Senior Notes), in which case, both the Term Loan B and the 2020 Revolver will mature on January 30, 2020.2025 (subject to certain further exceptions). For additionalmore information regarding the terms of our outstanding debt,2020 Credit Agreement, refer to Note 9 of the Notes to Condensed Consolidated Financial Statements, as applicable.Statements.Twelve Months Ended September 30, 2020 Actual Required First lien net leverage ratio 0.85 to 1.00 < or = 2.75 : 1.00 wethe Company entered into a credit agreement (the “2017"2017 Credit Facility”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 providesprovided for a $350 million revolving credit facility (the “2017 Revolver”) and a sublimit for the issuance of letters of credit and swinglineswing line 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, areas defined below, were outstanding on December 17, 2020, in which case all such borrowings will maturewould have matured on December 17, 2020 (the “spring-forward provision”), .provided however (i) ifConvertible Notes are refinanced in full withCompany used proceeds from the proceedsTerm Loan B to repay outstanding amounts under its 2017 Credit Facility. As a result of permitted refinancing indebtedness in accordance withrepaying the terms ofoutstanding amounts under the 2017 Credit Facility and entering into the maturity date for2020 Credit Agreement, the Company terminated the 2017 Credit Facility, will remain April 20, 2022 and (ii) ifincluding its spring-forward provision that would have accelerated the maturity of the facility to December 17, 2020.issues “Newissued $200 million of 2.875% Convertible Senior Notes due June 15, 2021 (the “Convertible Notes” (as defined) in a private placement offering. On August 19, 2020, the 2017 Credit Facility) and retiresCompany used proceeds from the Term Loan B to repurchase $130.1 million aggregate principal amount of its Convertible Notes in full, the maturity date for the 2017 Credit Facility will be the earlieran aggregate purchase price of (x) April 20, 2022 or (y) 90 days prior$132.4 million (including accrued and unpaid interest to the maturity date for such New Convertible Notes. The 2017 Credit Facility also permits additional borrowings in anrepurchase date). Following the repurchases, $69.9 million aggregate principal amount of $150 million, which can be in the form of increased capacity on the 2017 Revolver or the establishment of one or more term loans. On May 7, 2019, certain provisions of the 2017 Credit Facility were amended, including setting the maximum leverage ratio at 3.50:1.00. For additional information regarding the terms of our 2017 Credit Facility, refer to Note 9 of the Notes to Condensed Consolidated Financial Statements.As a result of the spring-forward provision mentioned above, the facility will mature on December 17, 2020 if the Convertible Notes remain outstanding at that time.as of September 30, 2020. The Company does not have call rights that allow it to unilaterally redeemwill repurchase or retire at or before maturity the Convertible Notes. Due to the spring-forward provision in the 2017 Credit Facility, all borrowings under the facility, as well as the outstanding balance for theremaining Convertible Notes due June 15, 2021, are included in “Current maturities of long-term debt” onand repay the Condensed Consolidated Balance Sheet as of June 30, 2020.principal balance using available proceeds from the Term Loan B being held for such purpose.The Company continues to evaluate options to address the spring-forward provision and refinancing or retirement of the outstanding Convertible Notes. New credit arrangements are expected to be finalized in the third quarter of 2020.DebtThe table below presents our actual and required consolidated fixed charge coverage ratio and consolidated leverage ratio under the 2017 Credit Facility for the period, which are calculated on a rolling four-quarter basis:Twelve Months Ended June 30, 2020ActualRequiredFixed charge coverage ratio4.90 to 1.00> or = 1.25 : 1.00Leverage ratio2.33 to 1.00< or = 3.50 : 1.00As of June 30, 2020, we were in compliance and expect to continue to be in compliance with the covenants under the 2017 Credit Facility.Contractual ObligationsThere discussion above, there have been no material changes in our contractual obligations from those described in our Annual Report on Form 10-K for the year ended December 31, 2019.The risk factor discussed below is intendedThere have been no material changes to supplement theour risk factors previouslyas disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019. It updates2019 and replaces the risk factor previously disclosed in Part II, Item 1A of our subsequent Quarterly Report on Form 10-Q for the quarter ended March 31,June 30, 2020.The COVID-19 pandemic has adversely impacted, and could continue to adversely impact, our business, financial condition and results of operations.The World Health Organization declared the COVID-19 outbreak a pandemic and the U.S. Government declared a national emergency in March 2020. The COVID-19 pandemic has created volatility, uncertainty and economic disruption for the Company, our customers, subcontractors and suppliers, and the markets in which we do business. The scope and impact of the COVID-19 pandemic continues to evolve. Extraordinary and wide-ranging actions have been taken by international, federal, state and local public health and governmental authorities to contain and combat the spread of COVID-19, including stay-at-home or shelter-in-place orders, social distancing measures and travel restrictions for individuals and orders for many businesses to cease or curtail normal operations unless their work is deemed essential or critical.While we have not experienced project cancellations as a result of the COVID-19 pandemic, we have experienced disruptions to our business operations as the pandemic has spread through the geographies where we do business. For example, beginning in mid-March of 2020, work on some non-essential construction projects was suspended or curtailed by certain customers, primarily in our Building and Specialty Contractors segments, though the vast majority of our projects in the Civil segment have been designated as essential business, allowing us to continue our work on those projects. In addition, we have modified certain business and workforce practices and implemented new protocols to promote social distancing and enhance health and safety measures on our projects and in our offices to conform to regulatory requirements and best practices encouraged by governmental and regulatory authorities, all of which has negatively affected our operations and resulted in increases in operating expenses. We have also experienced absenteeism due to illness, quarantine or fear by our employees or those of our subcontractors on certain projects, which has resulted in some disruption of our work. The COVID-19 impacts to date have been primarily productivity inefficiencies due to project suspensions or absenteeism on certain projects, as well as additional costs associated with the new health and safety measures implemented in response to the pandemic. Any ongoing project suspensions, personnel absenteeism, or reduced work schedules or shifts required to comply with quarantines or other social distancing measures could continue to adversely affect our operations. In addition, as a result of COVID-19 containment efforts, we have experienced delays in certain bidding activities and also in legal proceedings and settlement discussions where we have claims against project owners for additional costs exceeding the contract price or for amounts not included in the original contract price. Consequently, our ability to resolve and recover on these types of claims may be delayed, which may adversely affect our liquidity and financial results.It remains too early to assess the full impact that the COVID-19 pandemic, and the actions taken in response to it, will have on our employees, our operating segments and practices, our customers, subcontractors and suppliers, and the regions that we serve, or on our financial condition and results of operations as a whole. The full impact depends on many factors that remain uncertain and subject to ongoing volatility, or that are not yet identifiable, and in many cases are out of our control. These factors could include, among other things: (1) the duration of the COVID-19 pandemic and the types and magnitude of adverse impacts on the U.S. and global economies; (2) the health and welfare of our employees, and those of our customers, subcontractors and suppliers; (3) evolving business and government actions in response to the pandemic, including stay-at-home measures, changes to what are considered “essential” businesses, social distancing measures, travel bans and additional health and safety requirements that we may be required to observe in order to continue working on our projects; (4) the varying impact that the pandemic may have on industries we serve and on government spending for infrastructure projects, including reduced government spending on infrastructure as a result of lower revenues from taxes, tolls and fares; (5) the response of our customers or prospective customers to the pandemic, including further delays, stoppages or terminations of existing projects or potential new awards; (6) increases in our receivables if our customers fail to pay, delay making payments, request financial concessions or if we experience delays in resolving claims and disputes (e.g., further delays in court proceedings or settlement discussions); (7) limitations and higher costs associated with obtaining financing; (8) potential challenges with suppliers that could limit the availability or cost of materials; (9) potential interruptions to our information systems and technology or breaches in our data security due to increasing use of remote communications and access; and (10) the timing of finding effective treatments, a vaccine or a cure for COVID-19. Such events may result in fewer or delayed project bidding opportunities or additional or further delays on existing projects.Any of these events or impacts we have experienced or identified could cause or contribute to the risks and uncertainties facing the Company and our customers and could materially and adversely affect our business or portions thereof, and our financial condition and results of operations. The COVID-19 pandemic, and the volatile economic conditions stemming from the pandemic, as well as reactions to future pandemics or resurgences of COVID-19, could also aggravate or heighten the risks posed by other risk factors that we identify in our Annual Report on Form 10-K for the year ended December 31, 2019, which in turn could materially and adversely affect our business, financial condition and results of operations. There may be other adverse consequences to our business, financial condition and results of operations from the spread of COVID-19 that are not presently known or that have not yet become apparent.As a result, we cannot assure you that if COVID-19 continues to spread, it would not have a further adverse impact on our business, financial condition and results of operations.3.110.110.2 10.3 10.5 31.1 JuneSeptember 30, 2020, formatted in Inline XBRL (included as Exhibit 101).July 29,November 4, 2020