TUTOR PERINI CORP

Previous wording

The following discussion and analysis of our financial position as of March 31, 2026 and the results of our operations for the three months ended March 31, 2026 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, 2025, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, 2025 and in Part II, Item 1A below.

Current wording

The following discussion and analysis of our financial position as of June 30, 2026 and the results of our operations for the three and six months ended June 30, 2026 should be read in conjunction with other information, including the unaudited Condensed Consolidated Financial Statements and notes included in Part I, Item 1, Financial Statements, 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, 2025, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, 2025 and in Part II, Item 1A below.

Previous wording

Consolidated revenue for the three months ended March 31, 2026 was $1.4 billion, up 11.5% compared to $1.2 billion for the same period in 2025. The Company's revenue for the first quarter of 2026 was the highest of any first quarter since 2009, and the Civil segment's revenue was the highest of any first quarter ever. The Company experienced growth in all three segments through the first three months of 2026 compared to the same period last year, primarily driven by increased project execution activities on certain newer, larger and higher-margin projects that have significant scope of work remaining. These projects are in the early stages and are expected to ramp up substantially over the next several years.

Current wording

Consolidated revenue for the three and six months ended June 30, 2026 was $1.6 billion and $3.0 billion, up 19.2% and 15.5% respectively, compared to $1.4 billion and $2.6 billion for the same periods in 2025. The Company's revenue for the second quarter of 2026 was the highest of any quarter ever, and revenue for the first six months of 2026 also set a new record for the first half of any year. The Civil segment's revenue also set records for these same periods. The Company experienced strong growth across all three segments in the second quarter and through the first six months of 2026 compared to the same periods last year, primarily driven by increased project execution activities on certain newer, larger and higher-margin projects that have significant scope of work remaining. These projects are in the early stages and are expected to ramp up substantially over the next few years.

Previous wording

Income tax expense was $17.0 million for the three months ended March 31, 2026 compared to $12.9 million for the same period in 2025. See Corporate, Tax and Other Matters below for a discussion of the change in the effective tax rate.

Current wording

Income tax expense was $30.8 million and $47.8 million for the three and six months ended June 30, 2026, respectively, compared to $22.0 million and $34.9 million for the same periods in 2025. See Corporate, Tax and Other Matters below for a discussion of the change in the effective tax rate.

Previous wording

Diluted earnings per common share for the three months ended March 31, 2026 was $0.48 compared to $0.53 for the same period in 2025. Adjusted diluted earnings per common share, which is a non-GAAP financial measure and excludes share-based compensation expense (and the associated tax benefit), for the three months ended March 31, 2026 was $1.03 compared to $0.65 for the same period in 2025. The change in diluted earnings per common share was primarily due to the factors discussed above that resulted in the change in income from construction operations. The increase in adjusted diluted earnings per common share reflects the same factors discussed above, excluding the impact of share-based compensation expense. Refer to the Non-GAAP Financial Measures section below for further information and a reconciliation of the Company's financial results reported under generally accepted accounting principles in the United States (“GAAP”) to the reported adjusted results.

Current wording

Diluted earnings per common share for the three and six months ended June 30, 2026 was $1.23 and $1.71, respectively, compared to $0.38 and $0.90 for the same periods in 2025. Adjusted diluted earnings per common share, which is a non-GAAP financial measure and excludes share-based compensation expense (and the associated tax benefit), for the three and six months ended June 30, 2026 was $1.74 and $2.77, respectively, compared to $1.41 and $2.06 for the same periods in 2025. The strong increase in diluted earnings per common share for both periods was primarily due to the factors discussed above that resulted in the change in income from construction operations. The strong increase in adjusted diluted earnings per common share reflects the same factors discussed above, excluding the impact of share-based compensation expense. Refer to the Non-GAAP Financial Measures section below for further information and a reconciliation of the Company's financial results reported under generally accepted accounting principles in the United States (“GAAP”) to the reported adjusted results.

Previous wording

$38 million for three bridge projects in the Midwest; and $25 million of additional funding for an energy project in British Columbia. The Company has been successful in winning its share of major new project opportunities over the past several years due to a combination of its strategic bidding approach and favorable market dynamics, including limited competition in select markets for some of the larger projects. This environment, which is supported by strong public funding and demand, has allowed the Company to differentiate itself and deliver compelling proposals that align with the customer’s goals and expectations. The Company expects that this environment will continue for the foreseeable future.

Current wording

Consolidated new awards for the three and six months ended June 30, 2026 totaled $1.7 billion and $2.3 billion, respectively, compared to $3.1 billion and $5.0 billion for the same periods in 2025. The decrease was merely due to the timing of project awards, as the Company continues to see strong customer demand and a robust pipeline of bidding opportunities across its end markets. The Civil segment was the primary contributor to the new awards activity in the second quarter of 2026. The most significant new awards and contract adjustments in the second quarter of 2026 included a $652 million military facilities project in Guam; two military facility projects in Alaska collectively valued at $143 million; $130 million of additional funding for a healthcare facility project in Texas; a $114 million education facility project in Mississippi; and a $106 million bridge project in Minnesota. The Company has been successful in winning its share of major new project opportunities over the past several years due to a combination of its strategic bidding approach and favorable market dynamics, including limited competition in select markets for some of the larger projects. This environment, which is supported by strong public funding and demand, has allowed the Company to differentiate itself and deliver compelling proposals that align with the customer’s goals and expectations. The Company expects that this environment will continue for the foreseeable future.

Previous wording

Consolidated backlog as of March 31, 2026 was $19.8 billion, down slightly compared to $20.6 billion at the end of 2025, but up slightly compared to the backlog at the end of the first quarter of 2025. As of March 31, 2026, the mix of backlog by segment was approximately 49% for Civil, 36% for Building and 15% for Specialty Contractors.

Current wording

Consolidated backlog as of June 30, 2026 was $19.9 billion, up slightly compared to $19.8 billion at the end of the first quarter of 2026, and down 6% compared to $21.1 billion at the end of the second quarter of 2025. As of June 30, 2026, the mix of backlog by segment was approximately 50% for Civil, 35% for Building and 15% for Specialty Contractors.

Previous wording

With respect to potential concerns regarding the U.S. government’s scrutiny and curtailment of federal funding for certain projects, as well as varying new tariff policies that have been and may continue to be implemented, the Company does not currently anticipate any significant impacts to its business related to these factors. Most of the Company’s major projects are funded at the state or local level, or with some combination of federal, state and local funding. For projects that are wholly or partially funded with federal dollars, the funding for those projects has already been committed and/or those projects are strategically important to the United States. Despite this, there have recently been, and there may in the future be, occasions where even previously authorized and committed funding is withheld by the government, which could delay the progress of certain projects or the awards of new projects. The Company currently does not anticipate any material adverse impacts to its financial results as the result of such temporary project delays.

Current wording

With respect to potential concerns regarding the U.S. government’s scrutiny of federal funding for certain projects, as well as varying tariff policies that have been and may continue to be implemented, the Company does not anticipate any significant impacts to its business related to these factors. Most of the Company’s major projects are funded at the state or local level, or with some combination of federal, state and local funding. For projects that are wholly or partially funded with federal dollars, the funding for those projects has already been committed and/or those projects are strategically important to the United States. Despite this, there have been, and there may in the future be, occasions where even previously authorized and committed funding is withheld by the government, which could delay the progress of certain projects or the awards of new projects. The Company does not anticipate any material adverse impacts to its financial results as the result of such temporary project delays.

Previous wording

The outlook for the Company’s revenue growth over the next several years remains highly favorable due to strong new award bookings of large, long-duration projects over the past two years, as well as other new awards that are expected to be booked in the future. For example, the Company has certain building projects in California, mostly in the healthcare, education, and hospitality and gaming sectors, that are in the preconstruction phase. These projects are expected to transition from preconstruction to construction over the next few years, and they include a large, multi-billion-dollar healthcare project in California that is anticipated to be incrementally added to backlog over the next two years. Many of the Company’s newer projects are design-build projects that have an initial six-to-eighteen-month design phase 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. 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 various 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 highly favorable due to strong new award bookings of large, long-duration projects over the past several years, as well as other new awards that are expected to be booked in the future. The Company continues to have significant project bidding opportunities this year and beyond, particularly in the Indo-Pacific region, as well as in California, the Midwest, and the Northeast, and remains well positioned to continue winning its share of new projects. Overall, the Company's pipeline of potential projects over the next three to four years totals more than $200 billion, which is approximately three times larger than the pipeline from just a couple of years ago. Many of these prospects are expected to bid over the next one to two years. Furthermore, the Company has certain building projects, mostly in the healthcare, education, and hospitality and gaming sectors, that are in the preconstruction phase. These projects are expected to transition from preconstruction to construction over the next few years, and they include a large, multi-billion-dollar healthcare project in California that is anticipated to be incrementally added to backlog over the next two years. Many of the Company’s newer projects are design-build projects that have an initial six- to eighteen-month design phase 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. 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 various state, local and federal customers, as well as limited competition for many of the larger project opportunities.

Previous wording

The Bipartisan Infrastructure Law was enacted into law in November 2021 and provided 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 Bipartisan Infrastructure 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 our market focus. Accordingly, we believe that this significant funding has benefited, and will continue to favorably impact, our current work and prospective opportunities over the next decade. While the current funding window for the Bipartisan Infrastructure Law closes on September 30, 2026, we believe that Congress recognizes the long-term nature of infrastructure work and is already engaged in the legislative process to secure future funding beyond that date, although the amount and composition of such future funding is yet to be determined. In addition, various existing projects and future project opportunities in Guam and the Indo-Pacific region are being funded by the U.S. government’s Pacific Deterrence Initiative, which provides substantial multi-year funding to support significant improvements that enhance the U.S. military’s infrastructure and readiness. Finally, there are various large infrastructure projects across the U.S. for which future funding may be provided, in part or entirely, through public-private partnership (P3) arrangements, which would include mostly private capital investments.

Current wording

The Bipartisan Infrastructure Law was enacted into law in November 2021 and provided 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 Bipartisan Infrastructure 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 our market focus. Accordingly, we believe that this significant funding has benefited, and will continue to favorably impact, our current work and prospective opportunities over the next several years. While the current funding window for the Bipartisan Infrastructure Law closes on September 30, 2026, we believe that Congress recognizes the long-term nature of infrastructure projects. Congress is currently engaged in the legislative process to secure future funding beyond that date through the BUILD America 250 Act (H.R. 8870), a major $580 billion bipartisan surface transportation reauthorization bill. The final amount and composition of future funding from this bill is yet to be determined. Overall, our major projects are less reliant on federal funding provided by the Bipartisan Infrastructure Law (and its successors) than on the more substantial state and local funding that has historically supported, and is expected to continue supporting, such projects. In addition, various existing projects and future project opportunities in Guam and the Indo-Pacific region are being funded by the U.S. government’s Pacific Deterrence Initiative, which provides substantial multi-year funding to support significant improvements that enhance the U.S. military’s infrastructure and readiness. Finally, there are various large infrastructure projects across the U.S. for which future funding may be provided, in part or entirely, through public-private partnership (P3) arrangements, which would include mostly private capital investments.

Previous wording

To supplement our unaudited Condensed Consolidated Financial Statements presented under GAAP, we are presenting certain non-GAAP financial measures. These non-GAAP financial measures are intended to provide additional insights that facilitate the comparison of our past and present performance, and they are among the indicators management uses to assess the Company’s financial performance and to forecast future performance. By presenting these non-GAAP financial measures, we aim to provide investors and stakeholders with a clearer understanding of our operating results and enhance transparency with respect to the key financial metrics used by our management in its financial and operational decision-making.

Current wording

To supplement our unaudited Condensed Consolidated Financial Statements presented under GAAP, we are presenting certain non-GAAP financial measures. These non-GAAP financial measures exclude items that are not reflective of ongoing business operations, including share-based compensation expense for the three and six months ended June 30, 2026 and 2025 (as well as the associated tax benefit), and for the second half of 2026, adjustments will also include certain pension settlement, debt extinguishment and refinancing costs (as well as the associated tax impacts). These non-GAAP financial measures are intended to provide additional insights that facilitate the comparison of our past and present performance, and they are among the indicators management uses to assess the Company’s financial performance and to forecast future performance. By presenting these non-GAAP financial measures, we aim to provide investors and stakeholders with a clearer understanding of our operating results and enhance transparency with respect to the key financial metrics used by our management in its financial and operational decision-making.

Previous wording

These non-GAAP financial measures, which exclude share-based compensation expense for the three months ended March 31, 2026 and 2025 (as well as the associated tax benefit), consist of adjusted net income attributable to the Company and adjusted earnings per share. We exclude share-based compensation expense because this expense could result in significant volatility in our reported earnings, driven primarily by fluctuations in the expense recognized for certain long-term incentive compensation awards with payouts that are indexed to the Company’s common stock. By adjusting for share-based compensation, our non-GAAP measures present a supplemental depiction of our operational performance and financial health. This approach allows stakeholders to focus on our core operational efficiency and profitability without the variable impact to earnings caused by significant changes in our stock price. Our non-GAAP measures are intended to offer a consistent basis for evaluating the Company’s performance, which management believes is meaningful to stakeholders.

Current wording

These non-GAAP financial measures consist of adjusted net income attributable to the Company and adjusted diluted earnings per share. We exclude share-based compensation expense because this expense could result in significant volatility in our reported earnings, driven primarily by fluctuations in the expense recognized for certain long-term incentive compensation awards with payouts that are indexed to the Company’s common stock. By adjusting for share-based compensation, our non-GAAP measures present a supplemental depiction of our operational performance and financial health. This approach allows stakeholders to focus on our core operational efficiency and profitability without the variable impact to earnings caused by significant changes in our stock price. Our non-GAAP measures are intended to offer a consistent basis for evaluating the Company’s performance, which management believes is meaningful to stakeholders.

Previous wording

(a)The amount represents share-based compensation expense recorded during the three months ended March 31, 2026 and 2025. This includes expense associated with certain long-term incentive compensation awards that have payouts indexed to the Company’s common stock. As such, significant fluctuations in the price of the Company’s common stock during any reporting period have caused and could continue to cause significant fluctuations in the reported expense. The increase in the expense for the three months ended March 31, 2026 as compared to the prior-year period was driven bythe Company’s stock price being substantially higher in 2026 as compared to the same period of 2025.

Current wording

(a)The amount represents share-based compensation expense recorded during the three and six months ended June 30, 2026 and 2025. This includes expense associated with certain long-term incentive compensation awards that have payouts indexed to the Company’s common stock. As such, significant fluctuations in the price of the Company’s common stock during any reporting period have caused and could continue to cause significant fluctuations in the reported expense.

Previous wording

Revenue for the three months ended March 31, 2026 increased 14.4% compared to the same period in 2025 and set a new first-quarter record for the segment. The growth was primarily due to increased project execution activities on two large mass-transit projects in the Northeast, both of which have substantial scope of work remaining.

Current wording

Revenue for the three and six months ended June 30, 2026 set all-time records for each respective period and increased 11.2% and 12.6%, respectively, compared to the same periods in 2025. For both periods of 2026, the growth was primarily due to increased project execution activities on two large mass-transit projects and a tunneling project in the Northeast, all of which have substantial scope of work remaining.

Previous wording

Income from construction operations for the three months ended March 31, 2026 was $87.7 million compared to $79.6 million for the same period in 2025, and also set a new first-quarter record for the segment. The increase was primarily due to contributions associated with the increased project execution activities discussed above, as well as contributions from various other projects that are ramping up. The improvement was partially offset by an unfavorable adjustment in the first quarter of 2026 on a mass-transit project in California of $16.4 million primarily due to changes in estimates resulting from ongoing negotiations of change orders with the owner and subcontractors, as well as other temporary impacts related to unapproved change orders.

Current wording

Income from construction operations for the six months ended June 30, 2026 was $212.3 million compared to $219.7 million for the same period in 2025. The six-month period of 2026 was impacted by the same factors discussed above for the second quarter of 2026, including strong contributions associated with the aforementioned increased project execution activities. The first six months of 2026 was also impacted by an unfavorable adjustment of $16.4 million in the first quarter of 2026 on a mass-transit project in California, primarily due to changes in estimates resulting from ongoing negotiations of change orders with the owner and subcontractors, as well as other temporary impacts related to unapproved change orders.

Previous wording

Operating margin was 12.6% for the three months ended March 31, 2026 compared to 13.0% for the same period in 2025. The change in operating margin was principally due to the above-mentioned factors that drove the changes in revenue and income from construction operations.

Current wording

Operating margin was 15.3% and 14.0%, respectively, for the three and six months ended June 30, 2026 compared to 19.1% and 16.3% for the same periods in 2025. The change in operating margins was principally due to the above-mentioned factors that drove the changes in revenue and income from construction operations.

Previous wording

Backlog for the Civil segment was $9.7 billion as of March 31, 2026, level compared to the backlog as of March 31, 2025. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, and supported by substantial anticipated funding from various voter-approved state and local transportation measures, the Bipartisan Infrastructure Law, and by public agencies’ long-term spending plans. We believe that the Civil segment is well-positioned to continue capturing its share of these prospective projects later this year and over the next several years, with the majority of near-term opportunities on the West Coast, in the Midwest, the Northeast, and the Indo-Pacific region.

Current wording

Backlog for the Civil segment was $9.8 billion as of June 30, 2026, down 11.9% compared to$11.2 billion as of June 30, 2025. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, and supported by substantial anticipated funding from various voter-approved state and local transportation measures, the Bipartisan Infrastructure Law, and by public agencies’ long-term spending plans. We believe that the Civil segment is well-positioned to continue capturing its share of these prospective projects later this year and over the next several years, with the majority of near-term opportunities in the Indo-Pacific region, as well as in California, the Midwest, and the Northeast.

Previous wording

Operating margin was 3.5% for the three months ended March 31, 2026 compared to 2.3% for the same period in 2025. The increased operating margin was principally due to the above-mentioned factors that drove the increase in income from construction operations.

Current wording

Operating margin was 5.6% and 4.6% for the three and six months ended June 30, 2026, respectively, compared to 4.9% and 3.6% for the same periods in 2025. The increased operating margins were principally due to the above-mentioned factors that drove the increase in income from construction operations.

Previous wording

Backlog for the Building segment was $7.2 billion as of March 31, 2026, up 8% compared to $6.7 billion as of March 31, 2025. The Building segment continues to experience strong customer demand as reflected by a large volume of prospective projects across various end markets, including healthcare, education, transportation, industrial/manufacturing, and hospitality and gaming. In addition, there are certain healthcare, education, and hospitality and gaming projects underway in California that are in the preconstruction phase, with only a small portion of their full anticipated value included in our reported backlog. These projects are expected to transition from preconstruction to construction over the next few years, and they include a large, multi-billion-dollar healthcare project in California that is anticipated to be incrementally added to backlog over the next two years.

Current wording

Backlog for the Building segment was $7.0 billion as of June 30, 2026 compared to $6.9 billion as of June 30, 2025. The Building segment continues to experience strong customer demand as reflected by a large volume of prospective projects across various end markets, including healthcare, education, transportation, industrial/manufacturing, and hospitality and gaming. In addition, there are certain healthcare, education, and hospitality and gaming projects underway that are in the preconstruction phase, with only a small portion of their full anticipated value included in our reported backlog. These projects are expected to transition from preconstruction to construction over the next few years, and they include a large, multi-billion-dollar healthcare project in California that is anticipated to be incrementally added to backlog over the next two years.

Previous wording

Revenue for the three months ended March 31, 2026 increased 23.7% compared to the same period in 2025. The Specialty Contractors segment continues to experience strong revenue growth across diverse end markets, including in its role supporting the electrical and mechanical components of several of the Company's newer megaprojects, most of which are in the early stages and ramping up.

Current wording

Revenue for the three and six months ended June 30, 2026 increased 47.3% and 35.5%, respectively, compared to the same periods in 2025. The strong growth for both periods of 2026 was primarily due to increased project execution activities on various newer projects across diverse end markets, including the segment’s role in supporting the electrical and mechanical components of several of the Company's newer megaprojects and a healthcare facility in Texas. Many of these projects are in the early stages and are expected to ramp up substantially over the next few years.

Previous wording

Income from construction operations for the three months ended March 31, 2026 was $0.6 million compared to a loss from construction operations of $7.1 million for the same period of 2025. The improvement for 2026 was primarily due to contributions related to the increased project execution activities discussed above. Many of these projects are in the early stages and are expected to ramp up substantially over the next several years.

Current wording

Income from construction operations for the three and six months ended June 30, 2026 was $5.7 million and $6.3 million, respectively, compared to a loss from construction operations of $18.0 million and $25.1 million for the same periods of 2025. The significant improvement for both periods of 2026 was primarily due to contributions related to the increased project execution activities discussed above, as well as the absence of certain prior-year unfavorable adjustments totaling $14.6 million related to the settlement of certain legacy claims in the Northeast in the second quarter of 2025, none of which were individually material.

Previous wording

Operating margin was 0.3% for the three months ended March 31, 2026 compared to (4.0)% for the same period in 2025. The increased operating margin was principally due to the aforementioned factors that drove the increase in revenue and income (loss) from construction operations.

Current wording

Operating margin was 2.2% and 1.3% for the three and six months ended June 30, 2026, respectively, compared to (10.2)% and (7.1)% for the same periods in 2025. The operating margin improvements were principally due to the aforementioned factors that drove the increases in revenue and income (loss) from construction operations.

Previous wording

Backlog for the Specialty Contractors segment was $3.0 billion as of March 31, 2026, essentially level with the backlog as of March 31, 2025. 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 continue capturing its share of other new projects, leveraging the strong reputation held by the business units in this segment for high-quality work on large, complex projects.

Current wording

Backlog for the Specialty Contractors segment was $3.0 billion as of June 30, 2026, level with $3.0 billion as of June 30, 2025. 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. Approximately two-thirds of the segment’s backlog represents electrical and mechanical projects that are being performed for the Civil and Building segments. We believe that the segment remains well-positioned to continue capturing its share of other new projects.

Previous wording

Corporate general and administrative expenses were $45.5 million during the three months ended March 31, 2026, compared to $17.6 million for the same period in 2025. The increase in corporate general and administrative expenses in 2026 compared to 2025 was primarily due to higher share-based compensation expense as a result of the Company’s stock price being substantially higher in 2026 compared to the same period of 2025, which impacted the fair value of liability-classified awards. The Company currently projects a decrease in share-based compensation expense over the remainder of 2026 as compared to 2025, and a much more significant decrease in 2027 as certain such awards have vested and most of the remaining liability-classified awards will vest by the end of 2026. After the Company’s shareholders approved additional shares under the Plan in May 2025, the Company stopped awarding liability-classified, long-term incentive compensation awards, which will help to reduce future earnings volatility.

Current wording

Corporate general and administrative expenses were $41.7 million and $87.2 million during the three and six months ended June 30, 2026, respectively, compared to $68.1 million and $85.7 million for the same periods in 2025. The decrease in corporate general and administrative expenses in the second quarter of 2026 compared to 2025 was primarily due to lower share-based compensation expense. The decrease in share-based compensation expense was primarily driven by the absence of certain liability-classified awards that vested at the end of 2025. Liability-classified awards are remeasured at fair value at the end of each reporting period with the change in fair value recognized in earnings. The Company currently projects a decrease in share-based compensation expense over the remainder of 2026 as compared to 2025, and a much more significant decrease in 2027 as certain such awards have vested and most of the remaining liability-classified awards will vest by the end of 2026. After the Company’s shareholders approved additional shares under the Plan in May 2025, the Company stopped awarding liability-classified, long-term incentive compensation awards, which will help to reduce future earnings volatility.

Previous wording

Other income, net, for the three months ended March 31, 2026 increased $6.0 million, compared to the same period in 2025.

Current wording

Other income, net, for the three and six months ended June 30, 2026 increased $4.6 million and $10.7 million, respectively, compared to the same periods in 2025.

Previous wording

The Company recognized income tax expense of $17.0 million for the three months ended March 31, 2026 resulting in an effective income tax rate of 30.1%. The effective income tax rate for the three months ended March 31, 2026 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), partially offset by earnings attributable to noncontrolling interests (for which income taxes are not the responsibility of the Company) and federal income tax credits.

Current wording

The Company recognized income tax expense of $30.8 million and $47.8 million for the three and six months ended June 30, 2026 resulting in an effective income tax rate of 26.8% and 27.9%, respectively. The effective income tax rate for the three and six months ended June 30, 2026 was higher than the 21.0% federal statutory income tax rate primarily due to non-deductible expenses and state income taxes (net of federal tax benefit), partially 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

The Company recognized income tax expense of $12.9 million for the three months ended March 31, 2025 resulting in an effective income tax rate of 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 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.

Current wording

The Company recognized income tax expense of $22.0 million and $34.9 million for the three and six months ended June 30, 2025 resulting in an effective income tax rate of 31.8% and 28.0%, respectively. The effective income tax rate for the three and six months ended June 30, 2025 was higher than the 21.0% federal statutory income tax rate primarily due to non-deductible expenses and state income taxes (net of federal tax benefit), partially 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 March 31, 2026, will be sufficient to fund working capital needs, dividends, share repurchases, and debt maturities for the next 12 months and beyond, as discussed further in Debt below. We generated a record amount of operating cash in the first three months of 2026, as discussed below in Cash and Working Capital. We expect strong annual operating cash flow to continue in 2026 and beyond, both from project execution activities and the resolution of outstanding claims and change orders. In addition, we expect to continue to benefit from the utilization of available net operating loss carryforwards to reduce our cash outflows for income taxes. We also explore repayments or refinancings of our outstanding indebtedness and share repurchases from time to time based on our cash needs, credit strength and market conditions.

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 as of June 30, 2026 (increased to $350.0 million effective July 2, 2026, as discussed further below in Debt), 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 June 30, 2026, will be sufficient to fund working capital needs, dividends, share repurchases, and debt maturities for the next 12 months and beyond. We generated a record amount of operating cash in the first six months of 2026, as discussed below in Cash and Working Capital. We expect strong operating cash flow to continue in the second half of 2026 and beyond, both from project execution activities and the resolution of outstanding claims and change orders. In addition, over the next two years we expect to continue to benefit from the utilization of available net operating loss carryforwards to reduce our cash outflows for income taxes. We also explore repayments or refinancings of our outstanding indebtedness and share repurchases from time to time based on our cash needs, credit strength and market conditions.

Previous wording

Cash and cash equivalents were $803.0 million as of March 31, 2026 compared to $734.6 million as of December 31, 2025. Cash immediately available for general corporate purposes was $320.9 million and $270.7 million as of March 31, 2026 and December 31, 2025, 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 $279.7 million as of March 31, 2026 compared to $264.6 million as of December 31, 2025. Restricted cash and restricted investments at March 31, 2026 were primarily held to secure insurance-related contingent obligations and deposits.

Current wording

Cash and cash equivalents were $938.2 million as of June 30, 2026 compared to $734.6 million as of December 31, 2025. Cash immediately available for general corporate purposes was $423.5 million and $270.7 million as of June 30, 2026 and December 31, 2025, 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 $277.8 million as of June 30, 2026 compared to $264.6 million as of December 31, 2025. Restricted cash and restricted investments at June 30, 2026 were primarily held to secure insurance-related contingent obligations and deposits.

Previous wording

During the three months ended March 31, 2026, net cash provided by operating activities was $146.9 million, the largest result for the first three months of any year. The record operating cash flow for the first three months of 2026 was largely driven by collections from newer and ongoing projects, reflecting a significant increase in project execution and improved working capital management, with only an immaterial amount attributable to the resolution of disputes. 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 collections from newer projects for mobilization and other initial project costs.

Current wording

During the six months ended June 30, 2026, net cash provided by operating activities was $334.1 million, the largest result for the first six months of any year. The record operating cash flow for the first six months of 2026 was driven by higher volume and strong execution and collections on profitable projects. During the six months ended June 30, 2025, net cash provided by operating activities was $285.3 million. The net cash provided by operating activities for the 2025 period was primarily due to advanced payments on newer projects for mobilization and other initial project costs and collections related to dispute resolutions.

Previous wording

Cash flow from operating activities for the first three months of 2026 increased $124.0 million compared to the same period in 2025. The increase in cash flow from operating activities for the first three months of 2026 compared to 2025 primarily reflects a decrease in net project working capital in the current period compared to an increase in the prior-year period. The decrease in net project working capital in the 2026 period was primarily due to a current-year decrease in accounts receivable compared to an increase last year, partially offset by a current-year decrease in accounts payable compared to an increase in the prior-year period and a smaller current-year increase in billings in excess of costs and estimated earnings compared to the prior-year period.

Current wording

Cash flow from operating activities for the first six months of 2026 increased $48.9 million compared to the same period in 2025. The increase in cash flow from operating activities for the first six months of 2026 compared to 2025 primarily reflects a larger decrease in net project working capital in the current period compared to the prior-year period, as well as higher cash provided by earnings sources in the 2026 period. The decrease in net project working capital in the 2026 period was primarily due to current-year decreases in accounts receivable and other current assets compared to increases last year, partially offset by a smaller current-year increase in billings in excess of costs and estimated earnings compared to the prior-year period and a slight increase in costs and estimated earnings in excess of billings in the current-year period compared to a decrease last year.

Previous wording

Net cash used in investing activities during the first three months of 2026 was $43.8 million primarily due to net cash used in investment transactions of $28.4 million and the acquisition of property and equipment for projects (i.e., capital expenditures) totaling $18.0 million. 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 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.

Current wording

Net cash used in investing activities during the first six months of 2026 was $91.7 million primarily due to the acquisition of property and equipment for projects (i.e., capital expenditures) totaling $51.7 million and net cash used in investment transactions of $44.2 million. Net cash used in investing activities during the first six months of 2025 was $67.7 million primarily due to the acquisition of property and equipment for projects totaling $56.9 million and other net cash used in investment transactions of $15.0 million.

Previous wording

Net cash used in financing activities was $46.5 million for the first three months of 2026, which was primarily driven by payments of$20.0 million for the repurchase of common stock and$9.6 million for the repayment of debt. 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, and $11.8 million of net distributions to noncontrolling interests.

Current wording

Net cash used in financing activities was $67.5 million for the first six months of 2026, which was primarily driven by payments of$30.0 million for the repurchase of common stock and$13.2 million for the repayment of debt. Net cash used in financing activities was $134.7 million for the first six months of 2025, which was primarily driven by a $116.7 million net repayment of debt.

Previous wording

At March 31, 2026, we had working capital of $0.9 billion, a ratio of current assets to current liabilities of 1.28 and a ratio of debt to equity of 0.32, compared to working capital of $0.9 billion, a ratio of current assets to current liabilities of 1.27 and a ratio of debt to equity of 0.32 at December 31, 2025.

Current wording

At June 30, 2026, we had working capital of $1.0 billion, a ratio of current assets to current liabilities of 1.29 and a ratio of debt to equity of 0.30, compared to working capital of $0.9 billion, a ratio of current assets to current liabilities of 1.27 and a ratio of debt to equity of 0.32 at December 31, 2025.

Previous wording

On April 22, 2024, the Company issued $400.0 million in aggregate principal amount of 11.875% Senior Notes due April 30, 2029 (the “2024 Senior Notes”) in a private placement offering. Interest on the 2024 Senior Notes is payable in arrears semi-annually in April and October of each year.

Current wording

On July 2, 2026, the Company issued $400.0 million in aggregate principal amount of 6.625% Senior Notes due July 15, 2033 (the “2026 Senior Notes”) in a private placement offering. Interest on the 2026 Senior Notes is payable in arrears semi-annually in January and July of each year, beginning in January 2027.

Previous wording

The Company may redeem the 2024 Senior Notes at redemption prices during the twelve-month periods beginning on April 30, 2026, April 30, 2027 and April 30, 2028 of 108.906%, 104.453% and 100.0%, respectively, of the principal amount being redeemed. If the Company experiences certain change of control events, holders of the 2024 Senior Notes may require the Company to repurchase all or part of the 2024 Senior Notes at 101% of the principal amount thereof, plus accrued and unpaid interest to the redemption date.

Current wording

Prior to July 15, 2029, the Company may redeem the 2026 Senior Notes at a redemption price equal to 100% of the principal amount plus a “make-whole” premium described in the indenture. In addition, prior to July 15, 2029, the Company may redeem up to 40% of the original aggregate principal amount of the notes at a redemption price of 106.625% of their principal amount with the proceeds received by the Company from any offering of the Company’s equity. The Company may redeem the 2026 Senior Notes at redemption prices during the twelve-month periods beginning on July 15, 2029, July 15, 2030 and July 15, 2031 and thereafter of 103.313%, 101.656% and 100.0%, respectively, of the principal amount being redeemed. Upon a change of control, holders of the 2026 Senior Notes may require the Company to repurchase all or part of the 2026 Senior Notes at 101% of the principal amount thereof, plus accrued and unpaid interest to the repurchase date.

Previous wording

The 2024 Senior Notes are senior unsecured obligations of the Company and are guaranteed by the Company’s existing and future subsidiaries that also guarantee obligations under the Company’s 2020 Credit Agreement. In addition, the indenture for the 2024 Senior Notes provides for customary covenants and includes customary events of default.

Current wording

The 2026 Senior Notes are senior unsecured obligations of the Company and are guaranteed by the Company’s existing and future subsidiaries that also guarantee obligations under the Company’s 2026 Credit Agreement, as defined below. In addition, the indenture for the 2026 Senior Notes provides for customary covenants on restricting certain payments and includes customary events of default.

Previous wording

On August 18, 2020, the Company entered into a credit agreement (as amended, the “2020 Credit Agreement”) with BMO Bank N.A. (f/k/a 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 $170.0 million revolving credit facility (the “Revolver”), which matures on August 18, 2027, with sub-limits 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 2020 Credit Agreement also originally provided for a $425.0 million term loan B facility (the “Term Loan B”), which was set to mature on August 18, 2027. During the first quarter of 2025, the Company voluntarily repaid the remaining $121.9 million outstanding balance of the Term Loan B.

Current wording

On August 18, 2020, the Company entered into a credit agreement (as amended, the “2020 Credit Agreement”) with BMO Bank N.A. (f/k/a BMO Harris Bank N.A.), as Administrative Agent, Swing Line Lender and L/C Issuer and other lenders. The 2020 Credit Agreement provided for a $170.0 million (which was increased to $350.0 million following the effectiveness of the 2026 Credit Agreement on July 2, 2026, as described in further detail below) revolving credit facility (the “Revolver”), which was set to mature on August 18, 2027, with sub-limits 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 2020 Credit Agreement also originally provided for a $425.0 million term loan B facility (the “Term Loan B”), which was set to mature on August 18, 2027. During the first quarter of 2025, the Company voluntarily repaid the remaining $121.9 million outstanding balance of the Term Loan B.

Previous wording

Subject to certain exceptions, at any time prior to maturity, the 2020 Credit Agreement provides the Company with the right to increase the commitments under the Revolver and/or to establish one or more term loan facilities in an aggregate amount up to (i) the greater of $173.5 million and 50% LTM EBITDA (as defined in the 2020 Credit Agreement) plus (ii) additional amounts if (A) in the case of pari passu first lien secured indebtedness, the First Lien Net Leverage Ratio (as defined in the 2020 Credit Agreement) does not exceed 1.35:1.00, (B) in the case of junior lien secured indebtedness, the Total Net Leverage Ratio (as defined in the 2020 Credit Agreement) does not exceed 3.50:1.00, and (C) in the case of unsecured indebtedness, (x) the Total Net Leverage Ratio does not exceed 3.50:1.00 or (y) the Fixed Charge Coverage Ratio (as defined in the 2020 Credit Agreement) is no less than 2.00:1.00. The balances of indebtedness used in the calculations of the First Lien Net Leverage Ratio and the Total Net Leverage Ratio include offsets for cash and cash equivalents available for general corporate purposes.

Current wording

Subject to certain exceptions, at any time prior to maturity, the 2020 Credit Agreement provided the Company with the right to increase the commitments under the Revolver and/or to establish one or more term loan facilities in an aggregate amount up to (i) the greater of $173.5 million and 50% LTM EBITDA (as defined in the 2020 Credit Agreement) plus (ii) additional amounts if (A) in the case of pari passu first lien secured indebtedness, the First Lien Net Leverage Ratio (as defined in the 2020 Credit Agreement) did not exceed 1.35 to 1.00, (B) in the case of junior lien secured indebtedness, the Total Net Leverage Ratio (as defined in the 2020 Credit Agreement) did not exceed 3.50 to 1.00, and (C) in the case of unsecured indebtedness, (x) the Total Net Leverage Ratio did not exceed 3.50 to 1.00 or (y) the Fixed Charge Coverage Ratio (as defined in the 2020 Credit Agreement) was no less than 2.00 to 1.00. The balances of indebtedness used in the calculations of the First Lien Net Leverage Ratio and the Total Net Leverage Ratio included offsets for cash and cash equivalents available for general corporate purposes.

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 administrative agent’s prime lending rate. The Company had no borrowings under the Revolver during the three months ended March 31, 2026. At March 31, 2026, the borrowing rate on the Revolver was 10.0%. For more information regarding the terms of our 2020 Credit Agreement, refer to Note 10 of the Notes to Condensed Consolidated Financial Statements.

Current wording

Borrowings under the 2020 Credit Agreement bore 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 administrative agent’s prime lending rate. The Company had no borrowings under the Revolver during the six months ended June 30, 2026. At June 30, 2026, the borrowing rate on the Revolver was 10.0%.

Previous wording

As of March 31, 2026, we were in compliance and expect to continue to be in compliance with the covenants under the 2020 Credit Agreement.

Current wording

As of June 30, 2026, we were in compliance with the covenants under the 2020 Credit Agreement. As discussed below, effective July 2, 2026, this covenant was replaced with two new financial maintenance covenants. The Company is currently in compliance with these covenants and expects to remain in compliance.