TUTOR PERINI CORP

Previous wording

The following discussion and analysis of our financial position as of September 30, 2024 and the results of our operations for the three and nine months ended September 30, 2024 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, 2023, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, 2023 and in Part II, Item 1A below.

Current wording

The following discussion and analysis of our financial position as of March 31, 2025 and the results of our operations for the three months ended March 31, 2025 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, 2024, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, 2024 and in Part II, Item 1A below.

Previous wording

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

Current wording

This Quarterly Report on Form 10‑Q, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results, which are intended to be covered by the safe harbor provision for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are statements that could be deemed forward-looking statements. Words such as “achieve,” “anticipate,” “assumes,” “believes,” “continue,” “could,” “estimate,” “expects,” “forecast,” “hope,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “would,” variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statement that refers to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events, outcomes or circumstances, or the timing of those events, outcomes or circumstances, are forward-looking statements. Although such statements are based on currently available financial and economic data, as well as management’s estimates and expectations, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable security laws. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors potentially contributing to such differences include, but are not limited to, the following:

Previous wording

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

Current wording

•Economic factors, such as inflation, tariffs, the timing of new awards, or the pace of project execution, which have resulted and may continue to result in losses or lower than anticipated profit;

Previous wording

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

Current wording

•Client cancellations of, delays in, or reductions in scope under contracts reported in our backlog, as well as prospective project opportunities, including as a result of potential impacts from recently implemented tariffs or other government-related mandates;

Previous wording

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

Current wording

•The exertion of influence over the Company by our executive chairman due to his position and significant ownership interests; and

Previous wording

Income tax benefit was $33.9 million and $19.4 million for the three and nine months ended September 30, 2024, respectively, compared to $4.1 million and $52.0 million for the same periods in 2023. See Corporate, Tax and Other Matters below for a discussion of the changes in the effective tax rate.

Current wording

Income tax expense was $12.9 million for the three months ended March 31, 2025 compared to $7.3 million for the same period in 2024. See Corporate, Tax and Other Matters below for a discussion of the changes in the effective tax rate.

Previous wording

Diluted loss per common share for the three and nine months ended September 30, 2024 was $1.92 and $1.61, respectively, compared to diluted loss per common share of $0.71 and $2.39, respectively, for the same periods in 2023. The change for both periods in 2024 was primarily due to the factors discussed above that resulted in the change in loss from construction operations for such periods.

Current wording

Diluted earnings per common share for the three months ended March 31, 2025 was $0.53 compared to diluted earnings per common share of $0.30 for the same period in 2024. The improvement for the first quarter of 2025 as compared to the same quarter last year was primarily due to the factors discussed above that resulted in the change in income from construction operations.

Previous wording

Consolidated new awards for the three and nine months ended September 30, 2024 totaled $4.7 billion and $7.1 billion, respectively, compared to $0.8 billion and $5.6 billion for the same periods in 2023. The Civil and Building segments were the primary contributors to the new awards activity in the third quarter of 2024. The most significant new awards and contract adjustments in the third quarter of 2024 included a $1.66 billion mass-transit project in Hawaii; a $1.1 billion water conveyance tunnel project in New York; a healthcare campus project in California valued at more than $1 billion; $138 million of additional funding for certain mass-transit projects in California; and a $113 million military facility project in Guam.

Current wording

Consolidated new awards for the three months ended March 31, 2025 totaled $2.0 billion compared to $873 million for the same period in 2024. The Civil segment was the primary contributor to the new awards activity in the first quarter of 2025. The most significant new awards and contract adjustments in the first quarter of 2025 included the $1.18 billion Manhattan Tunnel project in New York; $241 million of additional funding for the Apra Harbor Waterfront Repairs project in Guam; $111 million of additional funding for certain healthcare facility projects in California; an electrical project in Texas valued at more than $100 million; and $99 million of additional funding for an existing electrical project, also in Texas.

Previous wording

The outlook for the Company’s revenue growth over the next several years remains favorable, especially due to strong new award bookings in the third quarter of 2024, as well as other significant awards that could potentially be booked over the next few months. Many of these newer projects will be executed over a longer timeframe compared to other projects booked in recent years. However, revenue growth could be hampered by unanticipated project delays or the timing of project bids, awards, commencements, ramp-up activities and completions. We anticipate that we will continue to win our share of significant new project awards resulting from long-term, well-funded capital spending plans by state, local and federal customers, as well as limited competition for many of the larger project opportunities.

Current wording

The outlook for the Company’s revenue growth over the next several years remains favorable, particularly due to strong new award bookings in 2024 and through the first quarter of 2025, as well as other significant new awards that could be booked over the remainder of 2025. For example, the Company recently bid the multi-billion-dollar Midtown Bus Terminal Replacement project in New York and is awaiting contractor selection by the owner. Many of the Company’s newer projects are design-build projects that have an initial design phase over the first six to eighteen months during which smaller revenue and earnings are generated prior to the start of a multi-year construction phase that generates substantially larger revenue and earnings. Revenue growth could be impacted by unanticipated project delays or the timing of project bids, awards, commencements, ramp-up activities and completions. We anticipate that we will continue to win our share of significant new project awards resulting from long-term, well-funded capital spending plans by state, local and federal customers, as well as limited competition for many of the larger project opportunities.

Previous wording

Since 2014, voters in 43 states have approved 85 percent of over 3,000 state and local ballot measures, raising an estimated $342 billion in new and renewed revenue funding for transportation investments. The largest of these was in Los Angeles County, where Measure M, a half-cent sales tax increase, was approved in 2016 and is expected to generate $120 billion of funding over 40 years. Funding from this measure is supporting, and is expected to continue to support, several of the Company’s current and prospective projects. More recently, there were more than $50 billion in various state and local transit funding measures on the ballots for elections in November 2024. Despite numerous interest rate increases since March 2022, rates remain at levels that we believe are conducive to continued spending on certain types of projects that have strong end-market demand with adequate available funding, such as mass transit, transportation, bridges, and healthcare, education, and correctional and detention facilities, among others. For the first time in four years, interest rates were lowered in September 2024, and many economists expect further rate reductions over the remainder of 2024 and in 2025, though the actual timing and extent of any future rate reductions remains uncertain. Lower interest rates could support additional demand for continued infrastructure spending. In contrast, should interest rates rise, they could reach levels that may negatively impact demand, especially for certain types of Building segment projects that have already been experiencing such impacts, such as commercial offices and tenant improvement projects, which tend to be more economically sensitive than projects handled by our Civil segment.

Current wording

Nationally, support for transportation-related ballot measures has remained high over the last decade. Since 2014, voters in 43 states approved 84 percent of nearly 3,000 state and local measures on general election ballots. The largest of these was in Los Angeles County, where in 2016 Measure M, a half-cent sales tax increase, was approved and is expected to generate $120 billion of funding over 40 years. Funding from this measure is supporting, and is expected to continue to support, several of the Company’s current and prospective projects. More recently, in the November 2024 elections, voters approved 77 percent of 370 transportation funding measures on state and local ballots throughout the country. These measures are expected to generate an estimated $41.4 billion in new and renewed funding for roads, bridges, rail and other infrastructure. Additionally, interest rates were lowered in September 2024, and some economists expect further rate reductions in 2025, though the actual timing and extent of any future rate reductions remains uncertain. Lower interest rates could support additional demand for continued infrastructure spending. In contrast, should interest rates rise, they could reach levels that may negatively impact demand, especially for certain types of Building segment projects that have already been experiencing such impacts, such as commercial offices and tenant improvement projects, which tend to be more economically sensitive than projects handled by our Civil segment.

Previous wording

The bipartisan Infrastructure Investment and Jobs Act (the “Bipartisan Infrastructure Law” or “BIL”), enacted into law in November 2021, provides for $1.2 trillion of federal infrastructure funding, including $550 billion in new spending for improvements to the country’s surface-transportation network and enhancements to core infrastructure. The law initiated the largest federal investment in public transit ever, the single largest dedicated bridge investment since the construction of the interstate highway system and the largest federal investment in passenger rail since the creation of Amtrak, all in addition to providing for regular annual spending for numerous infrastructure projects. This significant incremental funding is anticipated to be spent over the 10 years from its enactment through 2031, and much of it is allocated for investment in end markets that are directly aligned with the Company’s market focus. Accordingly, the Company believes that this significant level of sustained, incremental funding has benefited, and will continue to favorably impact, the Company’s current work and prospective opportunities over the next decade.

Current wording

The bipartisan Infrastructure Investment and Jobs Act (enacted in 2021) provides for $1.2 trillion of federal infrastructure funding, including $550 billion in new spending for improvements to the country’s surface-transportation network and enhancements to core infrastructure. The law initiated the largest federal investment in public transit ever, the single largest dedicated bridge investment since the construction of the interstate highway system and the largest federal investment in passenger rail since the creation of Amtrak, all in addition to providing for regular annual spending for numerous infrastructure projects. The Company anticipates that this significant incremental funding will continue to be allocated through the end of 2026 with the funds spent over the 10 years from the law’s enactment (through 2031), and much of the funding is allocated for investments in end markets that are directly aligned with the Company’s market focus. Accordingly, the Company believes that this significant level of sustained, incremental funding has benefited, and will continue to favorably impact, the Company’s current work and prospective opportunities over the next decade.

Previous wording

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

Current wording

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

Previous wording

Operating margin was (2.3)% and 8.6% for the three and nine months ended September 30, 2024, respectively, compared to 9.0% and 12.0% for the same periods in 2023. The changes in operating margin were principally due to the above-mentioned factors that drove the changes in revenue andincome (loss) from construction operations.

Current wording

Operating margin was 13.0% for the three months ended March 31, 2025 compared to 15.0% for the same period in 2024. The change in operating margin was principally due to the above-mentioned factors that drove the changes in revenue and income from construction operations.

Previous wording

New awards in the Civil segment totaled $3.1 billion and $4.2 billion for the three and nine months ended September 30, 2024, respectively, compared to $469.0 million and $1.5 billion for the same periods in 2023. The most significant new awards and contract adjustments in the third quarter of 2024 included a $1.66 billion mass-transit project in Hawaii; a $1.1 billion water conveyance tunnel project in New York; $138 million of additional funding for certain mass-transit projects in California; and a $113 million military facility project in Guam.

Current wording

New awards in the Civil segment totaled $1.5 billion for the three months ended March 31, 2025 compared to $328.2 million for the same period in 2024. The most significant new awards and contract adjustments in the first quarter of 2025 included the $1.18 billion Manhattan Tunnel project in New York and $241 million of additional funding for the Apra Harbor Waterfront Repairs project in Guam.

Previous wording

Backlog for the Civil segment was $6.9 billion as of September 30, 2024, up 52% compared to $4.5 billion as of September 30, 2023. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, supported by substantial anticipated funding from various voter-approved transportation measures, the BIL, and by public agencies’ long-term spending plans. We believe that the Civil segment is well-positioned to capture its share of these prospective projects.

Current wording

Backlog for the Civil segment was $9.7 billion as of March 31, 2025, up 136% compared to $4.1 billion as of March 31, 2024, and set a new all-time record for the segment. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, supported by substantial anticipated funding from various voter-approved transportation measures, the Bipartisan Infrastructure Law, and by public agencies’ long-term spending plans. We believe that the Civil segment is well-positioned to capture its share of these prospective projects.

Previous wording

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

Current wording

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

Previous wording

Operating margin was (0.9)% and 1.4% for the three and nine months ended September 30, 2024, respectively, compared to 0.0% and (9.1)% for the same periods in 2023. The changes in operating margin were principally due to the aforementioned factors that drove the changes in revenue and income (loss) from construction operations.

Current wording

Operating margin was 2.3% for the three months ended March 31, 2025 compared to 3.9% for the same period in 2024. The change in operating margin was principally due to the aforementioned factors that drove the changes in revenue and income from construction operations.

Previous wording

New awards in the Building segment totaled $1.4 billion and $2.2 billion for the three and nine months ended September 30, 2024, respectively, compared to $249.0 million and $3.0 billion for the same periods in 2023. The nine-month period of 2023 included the award of the Brooklyn Jail project in New York. The most significant new awards and contract adjustments in the third quarter of 2024 included more than $1 billion of additional funding for a healthcare campus project in California. Certain Building segment end markets, such as correctional and detention facilities, healthcare, education, industrial/manufacturing, and hospitality and gaming, continue to show strong demand for new and renovated facilities. However, the proliferation of remote and hybrid work settings at many companies, along with continued higher interest rates, could continue to result in delayed or even canceled Building segment project opportunities, particularly in the corporate office end market.

Current wording

Certain Building segment end markets, such as healthcare, education, industrial/manufacturing, and hospitality and gaming, continue to show strong demand for new and renovated facilities. However, continued elevated interest rates and potential increases in materials and equipment costs due to recently implemented tariff policies could negatively impact this demand.

Previous wording

Backlog for the Building segment was $5.1 billion as of September 30, 2024, the highest backlog for the segment since 2008, and up 18% compared to $4.3 billion as of September 30, 2023. We believe that the Building segment continues to experience strong customer demand as reflected by a large volume of prospective projects across various end markets and geographic locations. In addition, there are various healthcare and education projects underway in California that are in the pre-construction phase, with only a relatively modest amount of our current backlog represented by those projects. Over the next one to two years, these projects are expected to advance into the construction phase, and subsequently we anticipate that we will book significant additional backlog for these projects as a result.

Current wording

Backlog for the Building segment was $6.7 billion as of March 31, 2025 up 61% compared to $4.2 billion as of March 31, 2024. The Building segment continues to experience strong customer demand as reflected by a large volume of prospective projects across various end markets and geographic locations. In addition, there are various healthcare and education projects underway in California that are in the preconstruction phase, with only a modest amount of current backlog recorded for them. Most of these projects are expected to advance into the construction phase this year, and we anticipate that we will book significant additional backlog for these projects in 2025 as a result.

Previous wording

Operating margin was (56.2)% and (19.4)% for the three and nine months ended September 30, 2024, respectively, compared to (22.0)% and (23.8)% for the same periods in 2023. The changes in operating margin were principally due to the aforementioned factors that drove the changes in revenue and loss from construction operations.

Current wording

Operating margin was (4.0)% for the three months ended March 31, 2025 compared to (11.1)% for the same period in 2024. The change in operating margin was principally due to the aforementioned factors that drove the changes in revenue and loss from construction operations.

Previous wording

Backlog for the Specialty Contractors segment was $2.0 billion as of September 30, 2024, up 12% compared to $1.8 billion as of September 30, 2023. The Specialty Contractors segment continues to be primarily focused on servicing the Company’s current and prospective large Civil and Building segment projects, particularly in the Northeast and California. We believe that the segment remains well-positioned to capture its share of new projects, 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.

Current wording

Backlog for the Specialty Contractors segment was $3.0 billion as of March 31, 2025, up 75% compared to $1.7 billion as of March 31, 2024, and set a new all-time record for the segment. The Specialty Contractors segment continues to be primarily focused on servicing the Company’s current and prospective large Civil and Building segment projects, particularly in the Northeast and California. We believe that the segment remains well-positioned to capture its share of new projects, 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.

Previous wording

Other Income, Net, Interest Expense and Income Tax Benefit

Current wording

Other Income, Net, Interest Expense and Income Tax Expense

Previous wording

Other income, net for the three and nine months ended September 30, 2024 increased $1.5 million and $3.2 million, respectively, compared to the same periods in 2023.

Current wording

Other income, net for the three and three months ended March 31, 2025 was essentially flat when compared to the same period in 2024.

Previous wording

Interest expense for the three months ended September 30, 2024 increased by $0.9 million compared to the same period in 2023. Interest expense for the nine months ended September 30, 2024 decreased by $0.2 million compared to the same period in 2023. With the anticipated prepayment of a portion of the outstanding Term Loan B in the fourth quarter of 2024 and the first quarter of 2025, as discussed further in Liquidity and Capital Resources, the Company expects interest expense to decrease in 2025 and beyond.

Current wording

Interest expense for the three months ended March 31, 2025 decreased $4.9 million compared to the same period in 2024 primarily due to lower outstanding debt driven by the payoff of the Term Loan B in the first quarter of 2025, as discussed further in Liquidity and Capital Resources. The Company expects interest expense to decrease over the remainder of 2025 and beyond.

Previous wording

The effective income tax rate for both the three and nine months ended September 30, 2024 was higher than the 21.0% federal statutory income tax rate primarily due to earnings attributable to noncontrolling interests (for which income taxes are not the responsibility of the Company) and state income taxes (net of the federal tax benefit), partially offset by non-deductible expenses.

Current wording

The Company recognized an income tax expense of $12.9 million for the three months ended March 31, 2025 resulting in an effective income tax rate was 23.2%. The effective income tax rate for the three months ended March 31, 2025 was higher than the 21.0% federal statutory income tax rate primarily due to non-deductible expenses and state income taxes (net of the federal tax benefit) substantially offset by earnings attributable to noncontrolling interests (for which income taxes are not the responsibility of the Company) and federal income tax credits.

Previous wording

Liquidity is provided by available cash and cash equivalents, cash generated from operations, credit facilities and access to capital markets. We have a committed line of credit totaling $170.0 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 and available cash balances as of September 30, 2024, will be sufficient to fund working capital needs and debt maturities for the next 12 months and beyond, as discussed further below in Debt. We generated significant cash from operations in the first nine months of 2024 as discussed below in Cash and Working Capital. As discussed above in Operating Results, we expect cash generated from operations ranging from $250 million to $400 million in the fourth quarter of 2024 (and, consequently, $425 million to $575 million of cash generated from operations for the full year of 2024), expected to be driven by collections of approximately $180 million related to the resolution of the aforementioned third-quarter 2024 settlements, as well as cash generation related to project execution activities for new and existing projects. The wide range in the estimated generation of operating cash in the fourth quarter of 2024 is due to the uncertainty as to the precise timing of when certain large payments will be collected, though any amounts in this range that are not collected in the fourth quarter of 2024 are expected to be collected in the first quarter of 2025. We intend to utilize some of the cash flow from operations expected in the fourth quarter of 2024 to prepay $100 million to $150 million of our outstanding Term Loan B debt by the end of 2024, of which $50 million has already been prepaid subsequent to the third quarter of 2024. Further estimated prepayments of $50 million to $75 million of the Term Loan B debt are anticipated in the first quarter of 2025. In addition, we expect to benefit from the utilization of available net operating loss carryforwards to reduce our cash outflows for income taxes.

Current wording

Liquidity is provided by available cash and cash equivalents, cash generated from operations, credit facilities and access to capital markets. We have a committed line of credit totaling $170.0 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 and available cash balances as of March 31, 2025, will be sufficient to fund working capital needs and debt maturities for the next 12 months and beyond, as discussed further below in Debt below. During the first quarter of 2025, we voluntarily repaid the remaining $121.9 million outstanding balance of the Term Loan B. We expect strong operating cash flow to continue in 2025 based on projected cash collections, both from project execution activities and the resolution of outstanding claims and change orders. In addition, we expect to benefit from the utilization of available net operating loss carryforwards to reduce our cash outflows for income taxes.

Previous wording

Cash and cash equivalents were $287.4 million as of September 30, 2024 compared to $380.6 million as of December 31, 2023. Cash immediately available for general corporate purposes was $118.4 million and $145.1 million as of September 30, 2024 and December 31, 2023, 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 is available only for joint venture-related uses, including distributions to joint venture partners. In addition, our restricted cash and restricted investments totaled $149.5 million as of September 30, 2024 compared to $144.4 million as of December 31, 2023. Restricted cash and restricted investments at September 30, 2024 were primarily held to secure insurance-related contingent obligations and deposits.

Current wording

Cash and cash equivalents were $276.5 million as of March 31, 2025 compared to $455.1 million as of December 31, 2024. The decrease in cash and cash equivalents during the period was primarily due to the early payoff of the Term Loan B. Cash immediately available for general corporate purposes was $64.2 million and $265.6 million as of March 31, 2025 and December 31, 2024, 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 is available only for joint venture-related uses, including distributions to joint venture partners. In addition, our restricted cash and restricted investments totaled $175.9 million as of March 31, 2025 compared to $149.1 million as of December 31, 2024. Restricted cash and restricted investments at March 31, 2025 were primarily held to secure insurance-related contingent obligations and deposits.

Previous wording

During the nine months ended September 30, 2024, net cash provided by operating activities was $174.0 million. The net cash provided by operating activities for the 2024 period was primarily due to cash generated by earnings sources and a reduction in net project working capital. The reduction in net project working capital was primarily due to an increase in accounts payable, as a result of the timing of payments to subcontractors and vendors, and a decrease in costs and estimated earnings in excess of billings (“CIE”), partially offset by an increase in accounts receivable and a decrease in billings in excess of costs and estimated earnings (“BIE”). As of September 30, 2024, BIE of $1.05 billion exceeded CIE of $966.3 million resulting in a net BIE position for the first time since 2011. During the nine months ended September 30, 2023, net cash provided by operating activities was $180.8 million, which was the second-largest result for the first nine months of any year since the merger between Tutor-Saliba Corporation and Perini Corporation in 2008. The net cash provided by operating activities for the nine-month period of 2023 was primarily due to a decrease in investments in project working capital, partially offset by cash utilized by earnings sources. The decrease in investments in project working capital was primarily due to a decrease in CIE, an increase in accounts payable due to the timing of payments to suppliers and subcontractors and an increase in BIE.

Current wording

During the three months ended March 31, 2025, net cash provided by operating activities was $22.9 million. The net cash provided by operating activities for the 2025 period was primarily due to cash generated by earnings sources, partially offset by an increase in net project working capital. The increase in net project working capital was primarily due to an increase in accounts receivable, partially offset by an increase in billings in excess of costs and estimated earnings (“BIE”) primarily due to advanced payments on newer projects for mobilization and other initial project costs, and an increase in accounts payable, as a result of the timing of payments to subcontractors and vendors. As of March 31, 2025, BIE of $1.4 billion exceeded costs and estimated earnings in excess of billings of $947.5 million resulting in a net BIE position. During the three months ended March 31, 2024, net cash provided by operating activities was $98.3 million. The net cash provided by operating activities for the 2024 period was primarily due to cash generated by earnings sources and a decrease in investment in project working capital. The decrease in investment in project working capital was primarily due to an increase in accounts payable, as a result of the timing of payments to subcontractors and vendors, partially offset by a decrease in BIE.

Previous wording

Cash flow from operating activities for the first nine months of 2024 decreased $6.8 million compared to the same period in 2023. The decrease in cash flow from operating activities for the first nine months of 2024 compared to 2023 primarily reflects a smaller reduction in net project working capital in the current period compared to the prior-year period, mostly offset by cash generated by earning sources in the current period compared to cash used by earnings sources in the same period last year. The smaller reduction in net project working capital in the 2024 period was primarily due to a current-year increase in accounts receivable compared to a decrease last year, a current-year decrease in BIE compared to an increase last year, and a smaller current-year decrease in CIE compared to last year, partially offset by a larger current-year increase in accounts payable compared to last year. Both periods were positively impacted by collections associated with previously disputed matters.

Current wording

Cash flow from operating activities for the first three months of 2025 decreased $75.4 million compared to the same period in 2024. The decrease in cash flow from operating activities for the first three months of 2025 compared to 2024 primarily reflects an increase in net project working capital in the current period compared to a decrease in the prior-year period, partially offset by higher cash generated by earning sources in the current period compared to the prior-year period. The increase in net project working capital in the 2025 period was primarily due to a larger current-year increase in accounts receivable compared to last year, and a current-year increase in retention receivable compared to a decrease last year. The increase in net project working capital was partially offset by current-year increases in BIE and accrued expenses compared to decreases last year. While both periods were positively impacted by collections associated with previously disputed matters, such collections in the 2024 period were significant whereas such collections in the 2025 period were immaterial.

Previous wording

Net cash used in investing activities during the first nine months of 2024 was $27.3 million primarily due to the acquisition of property and equipment for projects (i.e., capital expenditures) totaling $28.3 million and net cash used in investment transactions of $2.0 million, partially offset by proceeds from the sale of property and equipment of $2.9 million. Net cash used in investing activities during the first nine months of 2023 was $43.4 million primarily due to the acquisition of property and equipment for projects totaling $45.6 million, as well as net cash used in investment transactions of $6.9 million, partially offset by proceeds from the sale of property and equipment of $9.0 million.

Current wording

Net cash used in investing activities during the first three months of 2025 was $23.9 million primarily due to the acquisition of property and equipment for projects (i.e., capital expenditures) totaling $30.1 million, partially offset by net cash provided by investment transactions of $5.7 million and proceeds from the sale of property and equipment of $0.5 million. Net cash used in investing activities during the first three months of 2024 was $10.3 million primarily due to the acquisition of property and equipment for projects totaling $10.4 million.

Previous wording

Net cash used in financing activities was $240.0 million for the first nine months of 2024, which was primarily driven by a $199.3 million net repayment of debt (including the 2024 Senior Notes issuance of $400.0 million and the 2017 Senior Notes redemption of $500.0 million, as well as the $91.0 million principal prepayment on the Term Loan B, all of which are discussed below in Debt), $25.1 million of payments for debt issuance costs related to debt transactions during the period and $12.3 million of net distributions to noncontrolling interests. Net cash used in financing activities was $79.3 million for the first nine months of 2023, which was primarily driven by a $56.0 million net repayment of debt and $22.0 million of net distributions to noncontrolling interests.

Current wording

Net cash used in financing activities was $146.4 million for the first three months of 2025, which was primarily driven by a $129.5 million net repayment of debt (including the $121.9 million repayment of the remaining balance on the Term Loan B discussed below in Debt), and $11.8 million of net distributions to noncontrolling interests. Net cash used in financing activities was $109.6 million for the first three months of 2024, which was primarily driven by a $100.2 million net repayment of debt and $7.4 million of distributions to noncontrolling interests.

Previous wording

At September 30, 2024, we had working capital of $1.2 billion, a ratio of current assets to current liabilities of 1.55 and a ratio of debt to equity of 0.55, 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 0.70 at December 31, 2023.

Current wording

At March 31, 2025, we had working capital of $0.9 billion, a ratio of current assets to current liabilities of 1.33 and a ratio of debt to equity of 0.34, compared to working capital of $1.0 billion, a ratio of current assets to current liabilities of 1.41 and a ratio of debt to equity of 0.46 at December 31, 2024.

Previous wording

As of September 30, 2024, the Revolver had unused available borrowing capacity of $170.0 million, and the outstanding balance of the Term Loan B and the 2024 Senior Notes were $272.9 million and $400.0 million, respectively.

Current wording

As of March 31, 2025, the Revolver had unused available borrowing capacity of $170.0 million, and the outstanding balance of the 2024 Senior Notes was $400.0 million. During the first quarter of 2025, the Company voluntarily repaid the remaining $121.9 million outstanding balance of the Term Loan B.

Previous wording

Borrowings under the 2020 Credit Agreement bear interest at variable rates, which have increased since the latter part of 2022 due to changes in market conditions that resulted in increases in the Secured Overnight Financing Rate (“SOFR”) (and the London Interbank Offered Rate (“LIBOR”) prior to the transition to SOFR), in the case of the Term Loan B, and the administrative agent’s prime lending rate, in the case of the Revolver. Effective May 2, 2023, the 2020 Credit Agreement was amended to transition the Company’s original LIBOR option in respect of the Term Loan B to Adjusted Term SOFR. The average borrowing rates on the Term Loan B and the Revolver for the nine months ended September 30, 2024 were approximately 10.2% and 12.0%, respectively. At September 30, 2024, the borrowing rates on the Term Loan B and the Revolver were 9.7% and 11.5%, respectively. For more information regarding the terms of our 2020 Credit Agreement, refer to Note 9 of the Notes to Condensed Consolidated Financial Statements.

Current wording

Borrowings under the 2020 Credit Agreement bear interest at variable rates, which have increased since the latter part of 2022 due to changes in market conditions that resulted in increases in the Secured Overnight Financing Rate (“SOFR”) (and the London Interbank Offered Rate (“LIBOR”) prior to the transition to SOFR), in the case of the Term Loan B, and the administrative agent’s prime lending rate, in the case of the Revolver. Effective May 2, 2023, the 2020 Credit Agreement was amended to transition the Company’s original LIBOR option in respect of the Term Loan B to Adjusted Term SOFR. The average borrowing rates on the Term Loan B and the Revolver for the three months ended March 31, 2025 were approximately 9.2% and 10.8%, respectively. At March 31, 2025, the borrowing rate on the Revolver was 10.8%. For more information regarding the terms of our 2020 Credit Agreement, refer to Note 9 of the Notes to Condensed Consolidated Financial Statements.

Previous wording

The 2020 Credit Agreement requires, solely with respect to the Revolver, the Company and its restricted subsidiaries to maintain a maximum First Lien Net Leverage Ratio of 3.50:1.00, effective the fiscal quarter ended December 31, 2022 and increasing to 3.75:1.00 for the fiscal quarter ending March 31, 2023 and subsequently stepping down to 3.00:1.00 for the fiscal quarter ending June 30, 2023, 2.50:1.00 for the fiscal quarter ending September 30, 2023 and 2.25:1.00 for the fiscal quarter ending December 31, 2023 and each fiscal quarter thereafter. As of September 30, 2024, we were in compliance and expect to continue to be in compliance with the covenants under the 2020 Credit Agreement.

Current wording

As amended, the 2020 Credit Agreement requires, solely with respect to the Revolver, the Company and its restricted subsidiaries to maintain a maximum First Lien Net Leverage Ratio of 3.50:1.00, effective the fiscal quarter ended December 31, 2022 and increasing to 3.75:1.00 for the fiscal quarter ending March 31, 2023 and subsequently stepping down to 3.00:1.00 for the fiscal quarter ending June 30, 2023, 2.50:1.00 for the fiscal quarter ending September 30, 2023 and 2.25:1.00 for the fiscal quarter ending December 31, 2023 and each fiscal quarter thereafter. As of March 31, 2025, we were in compliance and expect to continue to be in compliance with the covenants under the 2020 Credit Agreement.

Previous wording

Other than the issuance of the 2024 Senior Notes and redemption of our 2017 Senior Notes, as discussed above in Debt, 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, 2023.

Current wording

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, 2024.