UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-6314
Perini Corporation
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1717070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
73 MT. WAYTE AVENUE, FRAMINGHAM, MASSACHUSETTS 01701-9160
(Address of principal executive offices)
(Zip code)
(508)-628-2000
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Number of shares of common stock of registrant outstanding at May 11, 1999:
5,680,485
Page 1 of 17
PERINI CORPORATION & SUBSIDIARIES
INDEX
Page Number
-----------
Part I. - Financial Information:
Item 1. Financial Statements
Consolidated Condensed Balance Sheets - 3
March 31, 1999 and December 31, 1998
Consolidated Condensed Statements of Income - 4
Three Months ended March 31, 1999 and 1998
Consolidated Condensed Statements of Cash Flows - 5
Three Months ended March 31, 1999 and 1998
Notes to Consolidated Condensed Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of the Consolidated 8 - 11
Financial Condition and Results of Operations
Part II. - Other Information:
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12 - 16
Signatures 17
2
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
MARCH 31, 1999 AND DECEMBER 31, 1998
(In Thousands)
ASSETS
MARCH 31, DEC. 31,
1999 1998
-------------- -------------
Cash $ 22,611 $ 46,507
Accounts and Notes Receivable 138,308 113,855
Unbilled Work 20,115 19,585
Construction Joint Ventures 71,695 67,100
Real Estate Inventory, at the lower of cost or market 10,837 10,069
Deferred Tax Assets 1,076 1,076
Other Current Assets 3,752 1,332
-------------- -------------
Total Current Assets $ 268,394 $ 259,524
-------------- -------------
Land Held for Sale or Development $ 13,530 $ 15,541
Investments in and Advances to Real Estate Joint Ventures 89,641 89,499
-------------- -------------
Total Real Estate Development Investments $ 103,171 $ 105,040
-------------- -------------
Other Assets $ 4,194 $ 4,169
-------------- -------------
Property and Equipment, less Accumulated Depreciation of $16,678 in 1999 and
$16,378 in 1998 $ 9,872 $ 9,858
-------------- -------------
$ 385,631 $ 378,591
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Maturities of Long-Term Debt $ 15,153 $ 2,956
Accounts Payable 115,916 127,774
Advances from Construction Joint Ventures 13,344 17,300
Deferred Contract Revenue 17,570 14,350
Accrued Expenses 37,761 39,479
-------------- -------------
Total Current Liabilities $ 199,744 $ 201,859
-------------- -------------
Deferred Income Taxes and Other Liabilities $ 17,124 $ 15,713
-------------- -------------
Long-Term Debt, less current maturities included above $ 80,292 $ 75,857
-------------- -------------
Minority Interest $ 1,064 $ 1,064
-------------- -------------
Redeemable Convertible Series B Preferred Stock $ 34,542 $ 33,540
-------------- -------------
Stockholder's Equity:
Preferred Stock $ 100 $ 100
Series A Junior Participating Preferred Stock --- ---
Stock Purchase Warrants 2,233 2,233
Common Stock 5,506 5,506
Paid-In Surplus 47,357 49,219
Retained Earnings (1,218) (3,642)
ESOT Related Obligations (120) (1,381)
-------------- -------------
$ 53,858 $ 52,035
Less - Treasury Stock 993 1,477
-------------- -------------
Total Stockholders' Equity $ 52,865 $ 50,558
-------------- -------------
$ 385,631 $ 378,591
============== =============
The accompanying notes are an integral part of these financial statements.
3
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(In Thousands, Except Per Share Data)
THREE MONTHS
ENDED MARCH 31,
1999 1998
--------------- ----------------
REVENUES FROM OPERATIONS (Note 6):
Construction $ 251,819 $ 219,202
Real Estate 4,732 10,180
--------------- ----------------
TOTAL REVENUES FROM OPERATIONS $ 256,551 $ 229,382
--------------- ----------------
COST AND EXPENSES:
Cost of Operations $ 245,551 $ 216,914
General, Administrative and Selling Expenses 6,375 6,944
--------------- ----------------
$ 251,926 $ 223,858
--------------- ----------------
INCOME FROM OPERATIONS (Note 6) $ 4,625 $ 5,524
Other Income (Expense), Net (408) (333)
Interest Expense (1,593) (2,782)
--------------- ----------------
Income before Income Taxes $ 2,624 $ 2,409
Provision for Income Taxes (Note 3) 200 190
--------------- ----------------
NET INCOME $ 2,424 $ 2,219
=============== ================
BASIC AND DILUTED EARNINGS PER COMMON SHARE (Note 4) $ 0.16 $ 0.15
=============== ================
DIVIDENDS PER COMMON SHARE (Note 5) $ --- $ ---
=============== ================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 4) 5,436,419 5,161,394
=============== ================
The accompanying notes are an integral part of these financial statements.
4
PERINI CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(In Thousands)
THREE MONTHS
ENDED MARCH 31,
1999 1998
------------- ------------
Cash Flows from Operating Activities:
Net Income $ 2,424 $ 2,219
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization 764 548
Noncurrent deferred taxes and other liabilities 1,411 398
Distributions greater (less) than earnings of joint ventures and affiliates 1,867 (1,522)
Cash provided from (used by) changes in components of working capital other
than cash and current maturities of long-term debt (42,196) (18,015)
Real estate development investments other than joint ventures 1,115 6,133
Other non-cash items, net --- (891)
------------- ------------
NET CASH USED BY OPERATING ACTIVITIES $ (34,615) $ (11,130)
------------- ------------
Cash Flows from Investing Activities:
Proceeds from sale of property and equipment $ 36 $ 221
Cash distributions of capital from unconsolidated joint ventures 450 2,700
Acquisition of property and equipment (429) (227)
Improvements to land held for sale or development (3) (126)
Capital contributions to unconsolidated joint ventures (7,180) (747)
Advances (to) from real estate joint ventures, net 75 (1,500)
Investments in other activities (223) 179
------------- ------------
NET CASH PROVIDED FROM (USED BY) INVESTING ACTIVITIES $ (7,274) $ 500
------------- ------------
Cash Flows from Financing Activities:
Proceeds of long-term debt $ 17,838 $ 3,162
Repayment of long-term debt --- (5,108)
Treasury Stock issued 155 151
------------- ------------
NET CASH PROVIDED FROM (USED BY) FINANCING ACTIVITIES $ 17,993 $ (1,795)
------------- ------------
Net Increase (Decrease) in Cash $ (23,896) $ (12,425)
Cash at Beginning of Year 46,507 31,305
------------- ------------
Cash at End of Period $ 22,611 $ 18,880
============= ============
Supplemental Disclosures of Cash paid during the period for:
Interest $ 1,945 $ 2,288
============= ============
Income tax payments $ 47 $ 167
============= ============
Supplemental Disclosures of Non-cash Transactions:
Dividends paid in shares of Series B Preferred Stock (Note 4) $ 907 $ 822
============= ============
The accompanying notes are an integral part of these financial statements.
5
PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(1) Basis of Presentation
The unaudited consolidated condensed financial statements presented
herein have been prepared in accordance with the instructions to Form
10-Q and do not include all of the information and note disclosures
required by generally accepted accounting principles. These statements
should be read in conjunction with the financial statements and notes
thereto included in the Company's Form 10-K for the year ended December
31, 1998. In the opinion of management, the accompanying unaudited
condensed financial statements include all adjustments, consisting only
of normal recurring adjustments, necessary to present fairly the
Company's financial position as of March 31, 1999 and results of
operations and cash flows for the three month periods ended March 31,
1999 and 1998. The results of operations for the three month period
ended March 31, 1999 may not be indicative of the results that may be
expected for the year ending December 31, 1999 because the Company's
results generally consist of a limited number of large transactions in
both construction and real estate. Therefore, such results can vary
depending on the timing of transactions and the profitability of
projects being reported.
(2) Significant Accounting Policies
The significant accounting policies followed by the Company and its
subsidiaries in preparing its consolidated financial statements are set
forth in Note (1) to such financial statements included in Form 10-K for
the year ended December 31, 1998. The Company has made no significant
change in these policies during 1999.
(3) Provision For Income Taxes
The lower-than-normal tax rate in 1999 and 1998 reflects the realization
of a portion of the tax benefit not recognized in prior years due to
certain accounting limitations.
(4) Per Share Data
Computations of basic and diluted earnings per common share amounts are
based on the weighted average number of the Company's common shares
outstanding during the periods presented. Earnings available for common
shares are calculated as follows (in thousands, except per share
amounts):
1999 1998
--------------- ----------------
Net Income $ 2,424 $ 2,219
--------------- ----------------
Less:
- Accrued dividends on $21.25 Senior Preferred Stock $ (531) $ (531)
- Dividends declared on Series B Preferred Stock (907) (822)
- Accretion deduction required to reinstate mandatory
redemption value of Series B Preferred Stock over a
period of 8-10 years (95) (91)
--------------- ----------------
$ (1,533) $ (1,444)
=============== ================
Earnings available for Common Stockholders $ 891 $ 775
=============== ================
Weighted average shares outstanding 5,436 5,161
--------------- ----------------
Basic and diluted earnings per Common Share $ 0.16 $ 0.15
=============== ================
6
PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)
(4) Per Share Data (continued)
Basic EPS equals diluted EPS for the periods presented due to the
immaterial effect of stock options and the antidilutive effect of
conversion of the Company's Senior Preferred Stock, Series B Preferred
Stock and Stock Purchase Warrants into common stock.
(5) Dividends
There were no cash dividends on common stock declared or paid during the
periods presented in the consolidated condensed financial statements
presented herein.
As previously disclosed, in conjunction with the covenants of the
Company's Amended Revolving Credit Agreement as well as the New Credit
Agreement, effective January 17, 1997, the Company is required to
suspend the payment of quarterly dividends on its $21.25 preferred stock
("Senior Preferred Stock") until certain financial criteria are met.
Therefore, the dividends on the Senior Preferred Stock have not been
declared since 1995 (although they have been fully accrued due to the
"cumulative" feature of the Senior Preferred Stock). The aggregate
amount of dividends in arrears is approximately $7,437,000 at March 31,
1999 which represents approximately $74.37 per share of Preferred Stock
or approximately $7.44 per Depositary Share and is included in "Other
Liabilities" (long-term) in the accompanying Consolidated Condensed
Balance Sheet. Under the terms of the Preferred Stock, the holders of
the Depositary Shares were entitled to elect two additional Directors
since dividends had been deferred for more than six quarters and they
did so at the May 14, 1998 Annual Meeting.
Quarterly In-kind dividends (based on an annual rate of 10%) were paid
on March 15, 1999 on the Series B Preferred Stock to the stockholders of
record on March 1, 1999. The dividend was paid in the form of
approximately 4,534 additional shares of Series B Preferred Stock valued
at $200.00 per share for a total of $906,783.
(6) Business Segments
The following tables set forth certain updated business segment
information relating to the Company's operations for the three months
ended March 31, 1999 and 1998 (in thousands):
1999: Reportable Segments
----------------------------------------------------
Real Consolidated
Building Civil Estate Totals Corporate Totals
---------- --------- --------- ------------ ----------- ------------
Revenues $182,965 $ 68,854 $ 4,732 $256,551 $ - $256,551
Income (Loss) from Ops. $ 4,622 $ 1,971 $ (272) $ 6,321 $ (1,696)* $ 4,625
Assets $140,082 $104,885 $115,293 $360,260 $ 25,371 $385,631
1998: Reportable Segments
----------------------------------------------------
Real Consolidated
Building Civil Estate Totals Corporate Totals
---------- --------- ---------- ---------- ----------- ------------
Revenues $156,160 $ 63,042 $ 10,180 $229,382 $ - $229,382
Income (Loss) from Ops. $ 4,760 $ 2,825 $ (262) $ 7,323 $ (1,799)* $ 5,524
Assets $148,006 $108,971 $114,597 $371,574 $ 21,770 $393,344
* In all periods, consists of corporate general and administrative
expenses.
7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
Results of Operations
- ---------------------
Comparison of the First Quarter of 1999 with the First Quarter of 1998
Revenues increased $27.2 million (or 11.9%), from $229.4 in 1998 to $256.6
million in 1999. This increase resulted from increased construction revenues of
$32.7 million (or 14.9%), from $219.2 million in 1998 to $251.9 million in 1999,
due primarily to an increase in building construction operations of $26.8
million or (17.2%), from $156.2 million in 1998 to $183.0 million in 1999, and
to a lesser degree, an increase in revenues from civil operations of $5.9
million (or 9.4%), from $63.0 million in 1998 to $68.9 million in 1999.
Increased building construction revenues were due primarily to the start-up of
several new fast-track hotel/casino projects by the Company's western building
operations which was partially offset by a decrease in revenues from
correctional facilities projects in the Northeast that have been completed.
Increased civil construction revenues were due primarily to the favorable impact
of several large infrastructure projects in the Northeast. The decline of real
estate revenues of $5.5 million, from $10.2 million in 1998 to $4.7 million in
1999 is due to non-recurring revenues related to the 1998 sale of two buildings
in Massachusetts.
In spite of the increase in total revenues described above, income from
operations of the Company's business segments decreased by $1.0 million, from
$7.3 million in 1998 to $6.3 million in 1999 - see Note 6. The decrease was
primarily due to a $0.8 million decrease in operating income from civil
operations, from $2.8 million in 1998 to $2.0 million in 1999, that resulted
from a lower average margin on the civil construction backlog going into 1999.
Although revenues from building construction operations increased by over 17%
during the quarter, income from operations decreased slightly to $4.6 million in
1999 from $4.8 million in 1998 because of the favorable close out of certain
contracts during the first quarter of 1998. The operating loss from real estate
remained constant at approximately $0.3 million during both periods.
Interest expense decreased by $1.2 million, from $2.8 million in 1998 to $1.6
million in 1999 due primarily to a reduction in the average amount borrowed
under the Company's Revolving Credit Agreement.
The lower than normal tax rate in 1999 and 1998 is due to the utilization of tax
loss carryforwards from prior years. Because of certain accounting limitations,
the Company was not able to recognize a portion of the tax benefit related to
the operating losses experienced in fiscal 1996 and 1995.
Financial Condition
- -------------------
Working capital increased $11.0 million, from $57.7 million at the end of 1998
to $68.7 million at March 31, 1999. The current ratio increased from 1.29:1 to
1.34:1 during this same period.
During the first three months of 1999, the Company used $23.9 million in cash
and $18.0 million of additional borrowings under the Company's Revolving Credit
Agreement to fund $34.6 million used by operating activities, primarily for
changes in working capital, and $7.3 million for investing activities, primarily
to fund construction joint ventures.
Long-term debt at March 31, 1999 was $80.3 million, an increase of $4.4 million
from December 31, 1998. The long-term debt to equity ratio at March 31, 1999 of
1.52 to 1 approximated the 1.50 to 1 at December 31, 1998.
Effective March 23, 1999, the Company finalized certain changes to its Revolving
Credit Agreement with its Bank Group, including extending the Revolving Credit
Agreement from January 3, 2000 to January 3, 2001. Other changes to the
Revolving Credit Agreement include, among other things, a scheduled
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(Continued)
mandatory reduction in the maximum commitment of $20.0 million in 1999 and $15.0
million in 2000, with the balance in 2001, additional permanent mandatory
reductions, as defined, from the net proceeds from real estate sales, an
interest rate increase of 1/2 of 1% in 1999 and an additional 1/4 of 1% increase
in 2000, and a one-time bank fee of $483,000. At March 31, 1999, the Company had
$7.3 million available to borrow under its $96.0 million Revolving Credit
Agreement. Management believes that cash generated from operations, existing
credit lines and additional borrowings should be adequate to meet the Company's
funding requirements for at least the next twelve months.
Outlook
- -------
o General - The statements contained in this Outlook that are not purely
historical are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including statements regarding the Company's
expectations, hopes, beliefs, intentions or strategies regarding the
future. All forward-looking statements included in this Outlook are
based on information available to the Company on the date hereof. It is
important to note that the Company's actual results could differ
materially from those in such forward-looking statements, whether as a
result of new information, future events or otherwise.
o Operations - Looking ahead, we must consider the Company's construction
backlog and remaining portfolio of real estate projects. The overall
construction backlog at March 31, 1999 was at $1.029 billion, a 16.5%
decrease from the backlog at December 31, 1998, which primarily reflects
the timing in finalizing certain construction contracts currently under
negotiations. Project awards with a combined value in excess of $700
million are currently pending, including the previously announced
construction management services contract for the $650 million Mohegan
Sun Phase II Expansion Project in Uncasville, CT. While approximately
40% of the current backlog relates to building construction projects
which generally represent lower risk, lower margin work, approximately
60% of the current backlog relates to heavy construction projects which
generally represent higher risk, but correspondingly higher margin work.
Since several of the remaining real estate projects have been written
down to net realizable value in the past, future gross profit from real
estate sales will be minimal.
o Rincon Center - As previously reported in Note 11 of the December 31,
1998 Consolidated Financial Statements included in the Company's 1998
Form 10-K, the Company's Real Estate subsidiary, Perini Land and
Development Company ("PL&D"), the managing general partner of Rincon
Center Associates ("RCA"), has reached a nonbinding agreement with the
lenders and lessor in Rincon Center, a mixed-use property in San
Francisco, subject to final documentation and final approval of several
parties, with regard to restructuring certain financial obligations and
ownership interests. While the process of completing further
documentation and obtaining final approval by the various parties
involved is ongoing, the Company has received the appropriate waivers or
assurances to date that (i) the Lessor on Rincon I will continue to
defer enforcement of the purchase requirement provisions under the
Master Lease, and (ii) while the $33 million loan to the Lessor on
Rincon I has matured and the $14 million loan on Rincon II has matured,
the lenders have deferred enforcement of any remedies pending completion
of the restructuring agreement. It continues to be the opinion of
management that the final documentation of these negotiations and
restructure of certain financial obligations will not have a material
impact on the results of operations or financial condition as reported
in the financial statements included in this Form 10-Q.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(Continued)
- On September 10, 1998 the Company through Spear Land
LLC ("Spear"), a newly formed affiliated company, entered into
an agreement with the U.S. Postal Service to acquire the land,
including certain ground leases ("the land") under Rincon
Center, subject to the Company obtaining the necessary financing
and approvals. Effective March 30, 1999, Spear assigned the
agreement to an affiliate of the Blackstone Group ("Blackstone")
that purchased the land on that date. Although Spear has no
rights with respect to the management or operations related to
the land, Spear does have a residual interest in the future net
proceeds, if any, from any sale or refinancing after Blackstone
has received a return of its invested capital and a return on
its invested capital resulting in a 12% internal rate of return.
- In connection with the above transactions (the
restructuring of Rincon Center and the purchase of the related
land from the U.S. Postal Service), the Company and PL&D are
involved in litigation with Pacific Gateway Properties (PL&D's
co-general partner in RCA). The Company does not anticipate that
this litigation will materially impact the Rincon restructuring.
o Year 2000 Readiness Disclosures - Since many computers, related software
and certain devices with embedded microchips record only the last two
digits of a year, they may not be able to recognize that January 1, 2000
(or subsequent dates) comes after December 31, 1999. This situation
could cause erroneous calculations or system shutdowns, causing problems
that could range from merely inconvenient to significant.
As previously reported, the Company began a project to review all of its
computer systems in 1995. One factor, among many, to consider was what
impact, if any, would the Year 2000 have on computer systems. As a
result of this project, the Company implemented new fully integrated
online construction specific financial systems during the first quarter
of 1998 which are Year 2000 compliant. The cost of these new systems,
including the hardware, software and implementation costs, approximated
$1.5 million which was capitalized and is being amortized over ten years
on a straight-line basis.
The Company recognizes the Year 2000 issue could be an overall business
problem, not just a technical problem. Therefore, it established a Year
2000 Committee early in 1998 to identify all of the other potential Year
2000 problems that could impact the Company, including readiness issues
for its computer applications and business processes, non-information
technology systems such as those of its facilities and equipment, along
with relationships with third parties, such as our customers, vendors,
subcontractors, joint ventures, and other business partners; develop
plans to evaluate the significance of the potential problem; develop
plans to remedy or minimize the potential problem; assign appropriate
resources; and monitor the implementation of the plans. During the third
quarter of 1998, the Committee, which included both the Company's
Chairman and CEO, designated the Year 2000 Project Manager. The Project
Manager has organized a Year 2000 Team, consisting of specific
individuals assigned from each operating unit and each corporate
department. In addition, the Company developed, published and commenced
implementation of its Year 2000 Readiness Plan which has as its overall
objective "to eliminate or minimize the potential internal and external
impact of the Year 2000 issue on the normal business operations of the
Company, its subsidiaries, and joint ventures in a timely and cost
effective manner". In addition to addressing its own computer
applications, facilities, and construction equipment, the Plan includes
communication with critical third parties as stated above.
10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(Continued)
The Year 2000 Plan includes the following phases: (1) potential problem
identification, (2) resource commitment, (3) inventory, (4) assessment,
(5) prioritization, (6) remediation and (7) testing. While the Company
completed the problem identification, resource commitment and
prioritization phases during 1998, and inventory phase during the first
quarter of 1999, it is currently in various stages of the "assessment",
"testing", and "remediation" phases as of March 31, 1999. As part of the
Plan, the Company is evaluating alternative solutions and developing
contingency plans for handling certain critical areas in the event
remediation is unsuccessful. Completion of the Year 2000 Plan, including
final testing and development of final contingency plans, is currently
on schedule and should be completed by its October 1999 targeted
completion date. The Company currently estimates that costs related to
the Year 2000 Plan, over and above the cost of the new financial systems
referred to above, will approximate $0.3 million which are being
expensed currently.
The Company, as a general contractor, generally provides its
construction services in accordance with detailed contracts and
specifications provided by its clients. Also, the Company recently
installed all new mission critical financial system software on new
hardware, all of which are Year 2000 compliant. In light of the above,
the Company has defined its most reasonable likely worse case scenario
at this stage of implementing its Year 2000 Plan to include last minute
inquiries and requests for assistance in determining Year 2000
compliance by some limited number of clients who have not properly
prepared for this event. In addition, the possible filing of frivolous
lawsuits against the Company, among others, by a party or parties that
claim they were adversely impacted by a Year 2000 issue related to one
of the many projects with which the Company was associated is also a
concern. The Company currently plans to have a Year 2000 Urgent Response
Team defined and available to respond to last minute Year 2000 issues
raised by clients or others in a timely, proactive and cost effective
manner. In addition, the Company currently plans to develop prepackaged
legal defenses in advance assuming various types of complaints.
11
PART II. - OTHER INFORMATION
Item 1. - Legal Proceedings - None
Item 2. - Changes in Securities
(a) None
(b) None
(c) None
Item 3. - Defaults Upon Senior Securities
(a) None
(b) In accordance with the provisions of the 1995 Amended Revolving Credit
Agreement and the Credit Agreement which became effective on January 17,
1997, the Company suspended payment of quarterly dividends on its $21.25
Convertible Exchangeable Preferred Stock ("Senior Preferred Stock")
commencing with the dividend that normally would have been declared
during December 1995 through the dividend that would normally have been
declared during March 1999 for a total arrearage of $74.37 per share (or
$7.44 per depositary share) which aggregates $7,437,000 to date. While
these dividends have not been declared or paid, they have been fully
accrued in accordance with the "cumulative" feature of the stock.
Item 4. - Submission of Matters to a Vote of Security Holders - None
Item 5. - Other Information - None
Item 6. - Exhibits and Reports on Form 8-K
(a) The following designated exhibits are, as indicated below, either filed
herewith or have heretofore been filed with the Securities and Exchange
Commission under the Securities Act of 1933 or the Securities Act of
1934 and are referred to and incorporated herein by reference to such
filings:
Exhibit 3. Articles of Incorporation and By-laws
Incorporated herein by reference:
3.1 Restated Articles of Organization - As amended
through January 17, 1997 - Exhibit 3.1 to 1996
Form 10-K filed March 31, 1997.
3.2 By-laws - As amended and restated as of January
17, 1997 - Exhibit 3.2 to Form 8-K filed on
February 14, 1997.
Exhibit 4. Instruments Defining the Rights of Security Holders,
Including Indentures
Incorporated herein by reference:
4.1 Certificate of Vote of Directors Establishing a
Series of a Class of Stock determining the
relative rights and preferences of the $21.25
Convertible Exchangeable Preferred Stock -
Exhibit 4(a) to Amendment No. 1 to Form S-2
Registration Statement filed June 19, 1987; SEC
Registration No. 33-14434.
12
Part II. - Other Information (Continued)
4.2 Form of Deposit Agreement, including form of
Depositary Receipt - Exhibit 4(b) to Amendment
No. 1 to Form S-2 Registration Statement filed
June 19, 1987; SEC Registration No. 33-14434.
4.3 Form of Indenture with respect to the 8 1/2%
Convertible Subordinated Debentures Due June 15,
2012, including form of Debenture - Exhibit 4(c)
to Amendment No. 1 to Form S-2 Registration
Statement filed June 19, 1987; SEC Registration
No. 33-14434.
4.4 Shareholder Rights Agreement dated as of
September 23, 1988, as amended and restated as
of May 17, 1990, as amended and restated as of
January 17, 1997, between Perini Corporation and
State Street Bank and Trust Company, as Rights
Agent - Exhibit 4.4 to Amendment No. 1 to
Registration Statement on Form 8-A/A filed on
January 29, 1997.
4.5 Stock Purchase and Sale Agreement dated as of
July 24, 1996 by and among the Company, PB
Capital and RCBA, as amended - Exhibit 4.5 to
the Company's Quarterly Report on Form 10-Q/A
for the fiscal quarter ended September 30, 1996
filed on December 11, 1996.
4.8 Certificate of Vote of Directors Establishing a
Series of Preferred Stock determining the
relative rights and preferences of the Series B
Cumulative Convertible Preferred Stock, dated
January 16, 1997 - Exhibit 4.8 to Form 8-K filed
on February 14, 1997.
4.9 Stock Assignment and Assumption Agreement dated
as of December 13, 1996 by and among the
Company, PB Capital and ULLICO (filed as Exhibit
4.1 to the Schedule 13D filed by ULLICO on
December 16, 1996 and incorporated herein by
reference).
4.10 Stock Assignment and Assumption Agreement dated
as of January 17, 1997 by and among the Company,
RCBA and The Common Fund - Exhibit 4.10 to Form
8-K filed on February 14, 1997.
4.11 Voting Agreement dated as of January 17, 1997 by
and among PB Capital, David B. Perini, Perini
Memorial Foundation, David B. Perini
Testamentary Trust, Ronald N. Tutor, and
Tutor-Saliba Corporation - Exhibit 4.11 to Form
8-K filed on February 14, 1997.
4.12 Registration Rights Agreement dated as of
January 17, 1997 by and among the Company, PB
Capital and ULLICO - Exhibit 4.12 to Form 8-K
filed on February 14, 1997.
Exhibit 10. Material Contracts
Incorporated herein by reference:
10.1 1982 Stock Option and Long Term Performance
Incentive Plan - Exhibit A to Registrant's Proxy
Statement for Annual Meeting of Stockholders
dated April 15, 1992.
13
Part II. - Other Information (Continued)
10.2 Perini Corporation Amended and Restated General
Incentive Compensation Plan - Exhibit 10.2 to
1997 Form 10-K filed on March 30, 1998.
10.3 Perini Corporation Amended and Restated
Construction Business Unit Incentive
Compensation Plan - Exhibit 10.3 to 1997 Form
10-K filed on March 30, 1998.
10.4 $125 million Credit Agreement dated as of
December 6, 1994 among Perini Corporation, the
Banks listed herein, Morgan Guaranty Trust
Company of New York, as Agent, and Shawmut Bank,
N.A., Co-Agent - Exhibit 10.4 to 1994 Form 10-K,
as filed.
10.5 Amendment No. 1 as of February 26, 1996 to the
Credit Agreement dated as of December 6, 1994
among Perini Corporation, the Banks listed
herein, Morgan Guaranty Trust Company of New
York, as Agent, and Fleet National Bank of
Massachusetts (f/k/a Shawmut Bank, N.A.), as
Co-Agent - Exhibit 10.5 to 1995 Form 10-K, as
filed.
10.6 Bridge Credit Agreement dated as of February 26,
1996 among Perini Corporation, the Bridge Banks
listed herein, Morgan Guaranty Trust Company of
New York, as Agent, and Fleet National Bank of
Massachusetts (f/k/a Shawmut Bank, N.A.) as
Co-Agent - Exhibit 10.6 to 1995 Form 10-K, as
filed.
10.7 Amendment No. 2 as of July 30, 1996 to the
Credit Agreement dated as of December 6, 1994
and Amendment No. 1 as of July 30, 1996 to the
Bridge Credit Agreement dated February 26, 1996
among Perini Corporation, the Banks listed
herein, Morgan Guaranty Trust Company of New
York, as Agent, and Fleet National Bank of
Massachusetts, as Co-Agent - Exhibit 10.7 to
Perini Corporation's Form 10-Q/A for the fiscal
quarter ended September 30, 1996 filed on
December 11, 1996.
10.8 Amendment No. 2 as of September 30, 1996 to the
Bridge Credit Agreement dated as of February 26,
1996 among Perini Corporation, the Banks listed
herein, Morgan Guaranty Trust Company of New
York, as Agent, and Fleet National Bank of
Massachusetts, as Co-Agent - Exhibit 10.8 to
Perini Corporation's Form 10-Q/A for the fiscal
quarter ended September 30, 1996 filed on
December 11, 1996.
10.9 Amendment No. 3 as of October 2, 1996 to the
Bridge Credit Agreement dated as of February 26,
1996 among Perini Corporation, the Banks listed
herein, Morgan Guaranty Trust Company of New
York, as Agent, and Fleet National Bank of
Massachusetts, as Co-Agent - Exhibit 10.9 to
Perini Corporation's Form 10-Q/A for the fiscal
quarter ended September 30, 1996 filed on
December 11, 1996.
10.10 Amendment No. 4 as of October 15, 1996 to the
Bridge Credit Agreement dated as of February 26,
1996 among Perini Corporation, the Banks listed
herein, Morgan Guaranty Trust Company of New
York, as Agent, and Fleet National Bank of
Massachusetts, as Co-Agent - Exhibit 10.10 to
Perini Corporation's Form 10-Q/A for the fiscal
quarter ended September 30, 1996 filed on
December 11, 1996.
14
Part II. - Other Information (Continued)
10.11 Amendment No. 5 as of October 21, 1996 to the
Bridge Credit Agreement dated as of February 26,
1996 among Perini Corporation, the Banks listed
herein, Morgan Guaranty Trust Company of New
York, as Agent, and Fleet National Bank of
Massachusetts, as Co-Agent - Exhibit 10.11 to
Perini Corporation's Form 10-Q/A for the fiscal
quarter ended September 30, 1996 filed on
December 11, 1996.
10.12 Amendment No. 6 as of October 24, 1996 to the
Bridge Credit Agreement dated as of February 26,
1996 among Perini Corporation, the Banks listed
herein, Morgan Guaranty Trust Company of New
York, as Agent, and Fleet National Bank of
Massachusetts, as Co-Agent - Exhibit 10.12 to
Perini Corporation's Form 10-Q/A for the fiscal
quarter ended September 30, 1996 filed on
December 11, 1996.
10.13 Amendment No. 7 as of November 1, 1996 to the
Bridge Credit Agreement dated as of February 26,
1996 among Perini Corporation, the Banks listed
herein, Morgan Guaranty Trust Company of New
York, as Agent, and Fleet National Bank of
Massachusetts, as Co-Agent - Exhibit 10.13 to
Perini Corporation's Form 10-Q/A for the fiscal
quarter ended September 30, 1996 filed on
December 11, 1996.
10.14 Amendment No. 8 as of November 4, 1996 to the
Bridge Credit Agreement dated as of February 26,
1996 and Amendment No. 3 as of November 4, 1996
to the Credit Agreement dated December 6, 1994
among Perini Corporation, the Banks listed
herein, Morgan Guaranty Trust Company of New
York, as Agent, and Fleet National Bank of
Massachusetts, as Co-Agent - Exhibit 10.14 to
Perini Corporation's Form 10-Q/A for the fiscal
quarter ended September 30, 1996 filed on
December 11, 1996.
10.15 Amendment No. 9 as of November 12, 1996 to the
Bridge Credit Agreement dated as of February 26,
1996 and Amendment No. 4 as of November 12, 1996
to the Credit Agreement dated December 6, 1994
among Perini Corporation, the Banks listed
herein, Morgan Guaranty Trust Company of New
York, as Agent, and Fleet National Bank of
Massachusetts, as Co-Agent - Exhibit 10.15 to
Perini Corporation's Form 10-Q/A for the fiscal
quarter ended September 30, 1996 filed on
December 11, 1996.
10.16 Management Agreement dated as of January 17,
1997 by and among the Company, Ronald N. Tutor
and Tutor-Saliba Corporation - Exhibit 10.16 to
Form 8-K filed on February 14, 1997.
10.17 Amended and Restated Credit Agreement dated as
of January 17, 1997 among Perini Corporation,
the Banks listed herein and Morgan Guaranty
Trust Company of New York, as Agent, and Fleet
National Bank, as Co-Agent - Exhibit 10.17 to
1996 Form 10-K - as filed.
10.18 Amendment No. 1 as of November 10, 1997 to the
Amended and Restated Credit Agreement dated as
of January 17, 1997 among Perini Corporation,
the Banks listed herein and Morgan Guaranty
Trust Company of New York, as Agent, and Fleet
National Bank, as Co-Agent - Exhibit 10.18 to
1998 Form 10-K - as filed.
15
Part II. - Other Information (Continued)
10.19 Amendment No. 2 as of August 31, 1998 to the
Amended and Restated Credit Agreement dated as
of January 17, 1997 among Perini Corporation,
the Banks listed herein and Morgan Guaranty
Trust Company of New York, as Agent, and Fleet
National Bank, as Co-Agent - Exhibit 10.19 to
1998 Form 10-K - as filed.
10.20 Amendment No. 3 as of September 9, 1998 to the
Amended and Restated Credit Agreement dated as
of January 17, 1997 among Perini Corporation,
the Banks listed herein and Morgan Guaranty
Trust Company of New York, as Agent, and Fleet
National Bank, as Co-Agent - Exhibit 10.20 to
1998 Form 10-K - as filed.
10.21 Amendment No. 4 as of September 30, 1998 to the
Amended and Restated Credit Agreement dated as
of January 17, 1997 among Perini Corporation,
the Banks listed herein and Morgan Guaranty
Trust Company of New York, as Agent, and Fleet
National Bank, as Co-Agent - Exhibit 10.21 to
1998 Form 10-K - as filed.
10.22 Amendment No. 5 as of November 16, 1998 to the
Amended and Restated Credit Agreement dated as
of January 17, 1997 among Perini Corporation,
the Banks listed herein and Morgan Guaranty
Trust Company of New York, as Agent, and Fleet
National Bank, as Co-Agent - Exhibit 10.22 to
1998 Form 10-K - as filed.
10.23 Amendment No. 6 as of December 1, 1998 to the
Amended and Restated Credit Agreement dated as
of January 17, 1997 among Perini Corporation,
the Banks listed herein and Morgan Guaranty
Trust Company of New York, as Agent, and Fleet
National Bank, as Co-Agent - Exhibit 10.23 to
1998 Form 10-K - as filed.
10.24 Amendment No. 7 as of March 23, 1999 to the
Amended and Restated Credit Agreement dated as
of January 17, 1997 among Perini Corporation,
the Banks listed herein and Morgan Guaranty
Trust Company of New York, as Agent, and Fleet
National Bank, as Co-Agent - filed herewith.
(b) Reports on Form 8-K - None.
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Perini Corporation
Registrant
Date: May 14, 1999 /s/ Robert Band
---------------
Robert Band, Executive Vice President,
Chief Financial Officer
Date: May 14, 1999 /s/ Barry R. Blake
------------------
Barry R. Blake, Vice President and
Controller
17