STERLING INFRASTRUCTURE, INC.

Previous wording

General—Sterling Infrastructure, Inc., (“Sterling,” “the Company,” “we,” “our” or “us”) operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and Building Solutions in the United States, primarily across the Southern, Northeastern, Mid-Atlantic and Rocky Mountain regions and the Pacific Islands. E-Infrastructure Solutions provides advanced, large-scale site development services for manufacturing, data centers, e-commerce distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems. Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work and plumbing services for new single-family residential builds. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society’s quality of life. Caring for our people and our communities, our customers and our investors – that is The Sterling Way.

Current wording

General—Sterling operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and Building Solutions in the United States, primarily across the Southern, Northeastern, Mid-Atlantic and Rocky Mountain regions and the Pacific Islands. E-Infrastructure Solutions provides advanced, large-scale site development services for manufacturing, data centers, distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems. Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work, plumbing services, and surveys for new single-family residential builds. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society’s quality of life. Caring for our people and our communities, our customers and our investors – that is The Sterling Way.

Previous wording

We see favorable opportunities for long-term growth across each of our business segments. We remain focused on our strategic objectives which include: 1) growth in our E-Infrastructure Solutions segment, with particular focus on large, high-value projects; 2) risk reduction through a continued shift in our Transportation Solutions business away from low-bid heavy highway work, toward alternative delivery and design-build projects; 3) continuing to grow market share and geographic presence in Building Solutions; and 4) improving our margins in each of our segments.

Current wording

We see favorable opportunities for long-term growth across each of our business segments. We remain focused on our strategic objectives, which include: 1) growth in our E-Infrastructure Solutions segment, with particular focus on large, high-value projects; 2) risk reduction through a continued shift in our Transportation Solutions business away from low-bid heavy highway work, and toward alternative delivery and design-build projects; 3) continuing to grow market share and geographic presence in Building Solutions; and 4) improving our margins in each of our segments.

Previous wording

Transportation Solutions—Our Transportation Solutions business is primarily driven by federal, state and municipal funding. Federal funds, on average, provide 50% of annual State Department of Transportation capital outlays for highway and bridge projects. We benefit from a number of federal, state and local infrastructure investment programs. At the state and local level, the November 2020 elections saw strong support for transportation initiatives with the passage of many ballot measures that secured, and in some cases increased, funding. At the Federal level, the November 2021 Infrastructure Investments and Jobs Act (“IIJA”) includes approximately $643 billion in funding for transportation programs ($432 billion for highways, $109 billion for transportation and $102 billion for rail), of which $284 billion is an increase over historic investment levels that will fund new transportation infrastructure. The IIJA also includes $25 billion of funding for airport modernization. As a result of the IIJA, we had an increase in bid activity and project awards which started in the third quarter of 2022 and continued through the third quarter of 2024. We expect this positive trend to continue for the foreseeable future. Aviation activity, which was slower to emerge following the passage of the IIJA, has begun to accelerate.

Current wording

Transportation Solutions—Our Transportation Solutions business is primarily driven by federal, state and municipal funding. Federal funds, on average, provide 50% of annual State Department of Transportation capital outlays for highway and bridge projects. We benefit from a number of federal, state and local infrastructure investment programs. At the state and local level, the November 2020 elections saw strong support for transportation initiatives with the passage of many ballot measures that secured, and in some cases increased, funding. At the Federal level, the Infrastructure Investments and Jobs Act (“IIJA”), which establishes funding for the 2022 through 2026 time period, drove significant increases in transportation funding relative to the previous five-year law. The IIJA includes approximately $643 billion in funding for transportation programs ($432 billion for highways, $109 billion for transportation and $102 billion for rail), of which $284 billion is an increase over historic investment levels that will fund new transportation infrastructure. The IIJA also includes $25 billion of funding for airport modernization. As a result of the IIJA, we saw an increase in bid activity and project awards which started in the third quarter of 2022 and continued through 2023 and 2024. We expect that the combination of strong state and federal funding will allow the transportation market to remain elevated relative to historical levels in 2025 and 2026.

Previous wording

Building Solutions—Our Building Solutions segment is comprised of our residential slab, residential plumbing, and commercial businesses. The segment is driven by new home starts in Dallas-Fort Worth, the segment’s largest market, and continued expansion in the Houston and Phoenix markets. Building Solutions’ core customer base includes top national, regional and custom home builders. We believe the dynamics in our markets, including population growth and structural housing shortages, support growth opportunities over a multi-year period. In 2024, residential demand has been impacted by a slowdown in activity, particularly in the Dallas market. This lull in demand appears to be a function of prospective homebuyers taking a “wait-and-see” approach to potential additional interest rate cuts. We believe that activity will re-accelerate in 2025. For our commercial business, demand in the multi-family home market increased in the first three quarters of 2023 but slowed late in the year. We expect continued declines in this market in 2024.

Current wording

Building Solutions—Our Building Solutions segment is comprised of our residential and commercial businesses. The segment is driven by new home starts in Dallas-Fort Worth, the segment’s largest market, and continued expansion in the Houston and Phoenix markets. Building Solutions' core customer base includes top national, regional and custom home builders in our areas. In 2022, the residential market experienced significant price volatility and availability for key materials, including concrete, steel and lumber, as well as increases in subcontractor labor costs and decreased labor availability. The Company negotiated with customers to successfully recoup the increases in material and labor costs through price increases. We saw strong, consistent recovery in residential activity through 2023 and experienced volume growth across each geography. While this strength continued into early 2024, in the second quarter of 2024 the combined impact of interest rate uncertainty and affordability challenges drove a decline in the market which continued through the remainder of the year and into early 2025. While we anticipate that demand will remain muted in the near-term, we believe the dynamics in our markets, including population growth and structural housing shortages, support a return to growth over a multi-year time period.

Previous wording

At September 30, 2024, our Backlog was $2.06 billion, as compared to $2.07 billion at December 31, 2023, with a book-to-burn ratio of 1.0X for the nine months ended September 30, 2024. The Company’s margin in Backlog has increased to 16.8% at September 30, 2024 from 15.2% at December 31, 2023, driven by a greater mix of E-Infrastructure Solutions backlog and an improved backlog margin mix within Transportation Solutions.

Current wording

At March 31, 2025, our Backlog was $2.13 billion, as compared to $1.69 billion at December 31, 2024, with a book-to-burn ratio of 2.2X for the three months ended March 31, 2025. The Company’s margin in Backlog has increased to 17.7% at March 31, 2025 from 16.7% at December 31, 2024, driven by a greater mix of E-Infrastructure Solutions backlog and an improved backlog margin mix within Transportation Solutions.

Previous wording

Unsigned Awards were $319.6 million at September 30, 2024 and $303.2 million at December 31, 2023. Combined Backlog totaled $2.37 billion at both September 30, 2024 and December 31, 2023, with a book-to-burn ratio of 1.0X for the nine months ended September 30, 2024.

Current wording

Unsigned Awards were $103.2 million at March 31, 2025 and $137.9 million at December 31, 2024. Combined Backlog totaled $2.23 billion and $1.83 billion at March 31, 2025 and December 31, 2024, respectively, with a book-to-burn ratio of 2.1X for the three months ended March 31, 2025.

Previous wording

Consolidated financial highlights for the three and nine months ended September 30, 2024 and 2023 are as follows:

Current wording

Consolidated financial highlights for the three months ended March 31, 2025 and 2024 are as follows:

Previous wording

Revenues—Revenues were $593.7 million for the third quarter of 2024, an increase of $33.4 million, or 6.0%, compared to the third quarter of 2023. The increase was driven by a $34.3 million increase in Transportation Solutions and a $10.0 million increase in E-Infrastructure Solutions, partly offset by a $10.8 million decrease in Building Solutions.

Current wording

Revenues—Revenues were $430.9 million for the first quarter of 2025, compared to $440.4 million in the first quarter of 2024. Excluding $38.5 million of RHB revenue from the first quarter of 2024, revenues increased $29.1 million, which was driven by a $33.8 million increase in E-Infrastructure Solutions and a $10.2 million increase in Transportation Solutions, partly offset by a $14.9 million decrease in Building Solutions.

Previous wording

Gross profit and margin—Gross profit was $129.8 million for the third quarter of 2024, an increase of $37.9 million, or 41.3%, compared to the third quarter of 2023. The Company’s gross margin as a percentage of revenue increased to 21.9% in the third quarter of 2024, as compared to 16.4% in the third quarter of 2023.

Current wording

Gross profit and margin—Gross profit was $94.8 million for the first quarter of 2025, an increase of $17.9 million, or 23.3%, compared to the first quarter of 2024. The Company’s gross margin as a percentage of revenue increased to 22.0% in the first quarter of 2025, as compared to 17.5% in the first quarter of 2024.

Previous wording

Contracts in progress that were not substantially complete totaled approximately 220 and 230 at September 30, 2024 and 2023, respectively. These contracts are of various sizes, of different expected profitability and in various stages of completion. The nearer a contract progresses toward completion, the more visibility the Company has in refining its estimate of total revenues (including incentives, delay penalties and change orders), costs and gross profit. Thus, gross profit as a percentage of revenues can increase or decrease from comparable and subsequent quarters due to variations among contracts and depending upon the stage of completion of contracts.

Current wording

Contracts in progress that were not substantially complete totaled approximately 210 and 230 at March 31, 2025 and 2024, respectively. These contracts are of various sizes, of different expected profitability and in various stages of completion. The nearer a contract progresses toward completion, the more visibility the Company has in refining its estimate of total revenues (including incentives, delay penalties and change orders), costs and gross profit. Thus, gross profit as a percentage of revenues can increase or decrease from comparable and subsequent quarters due to variations among contracts and the stage of completion of contracts.

Previous wording

General and administrative expense—General and administrative expenses were $30.7 million, or 5.2% of revenue, for the third quarter of 2024, compared to $25.2 million, or 4.5% of revenue, for the third quarter of 2023. General and administrative expenses were $85.8 million, or 5.3% of revenue, for the nine months ended September 30, 2024, compared to $72.6 million, or 4.9% of revenue, for the nine months ended September 30, 2023. The increases reflect incremental G&A from the Texas plumbing business acquired in late 2023, growth, and inflation. The Company anticipates that general and administrative expense will be approximately 5% of revenue for the full year 2024.

Current wording

General and administrative expense—General and administrative expenses were $34.6 million, or 8.0% of revenue, for the first quarter of 2025, compared to $27.3 million, or 6.2% of revenue, for the first quarter of 2024. The increase in expense reflects higher performance based compensation, one-time severance costs, increased headcount to support growth, and inflation in the first quarter of 2025. The Company anticipates that general and administrative expense will be approximately 6.3% of revenue for the full year 2025.

Previous wording

Other operating expense, net—Other operating expense, net, includes 50% of earnings related to members’ interest of our consolidated 50% owned subsidiary, earn-out and other miscellaneous operating income or expense. Members’ interest earnings are treated as an expense and increase the liability account.

Current wording

Other operating income (expense), net—Other operating income (expense), net, includes the 50% portion of earnings related to our 50% owned subsidiary and occasionally other miscellaneous operating income or expense. In 2025, Sterling’s 50% portion of interest earnings are treated as income and increase the investment in unconsolidated subsidiary account. In 2024, the Members’ 50% portion of earnings was treated as an expense and an increase to the liability account. During the first quarter of 2025, Sterling’s 50% portion of interest earnings was $1.9 million, compared to $2.1 million of expense for the Members’ 50% interest portion of earnings in the first quarter of 2024.

Previous wording

Interest, net—Combined interest expense and income was net income of $1.3 million for the third quarter of 2024, compared to net expense of $3.1 million for the third quarter of 2023, and net income of $0.3 million for the nine months ended September 30, 2024, compared to net expense of $14.2 million for the nine months ended September 30, 2023. The three and nine months ended September 30, 2024 decreases in net expense were driven by higher interest income due to increased interest rates in 2024 on our growing cash balance.

Current wording

Interest, net—Combined interest expense and income was net income of $1.6 million for the first quarter of 2025, compared to net expense of $0.8 million for the first quarter of 2024. The higher interest income was due to increased interest rates on our growing cash balance.

Previous wording

Income taxes—The effective income tax rate was 26.4% for the third quarter of 2024 and 24.2% for the nine months ended September 30, 2024. The rates varied from the statutory rate primarily as a result of non-deductible compensation, state income taxes and other permanent differences. The Company incurred a $0.1 million and $3.5 million tax rate benefit for the three and nine months ended September 30, 2024, respectively, for increased tax deductions related to stock compensation. The Company anticipates an effective income tax rate for the full year 2024 of approximately 24%. See Note 11 - Income Taxes for more information.

Current wording

Income taxes—The effective income tax rate was 26.1% for the first quarter of 2025. The rate varied from the statutory rate primarily as a result of non-deductible compensation, state income taxes and other permanent differences. The Company incurred a $0.3 million tax rate benefit for the first quarter of 2025 for increased tax deductions related to stock compensation. The Company anticipates an effective income tax rate for the full year 2025 of approximately 26%. See Note 11 - Income Taxes for more information.

Previous wording

The Company’s operations consist of three reportable segments: E-Infrastructure Solutions, Transportation Solutions and Building Solutions. We incur expenses at the corporate level that relate to our business as a whole. A portion of these expenses are allocated to our business segments by various methods, but primarily on the basis of usage. The unallocated remainder is reported in the “Corporate G&A Expense” line, which is primarily comprised of corporate headquarters facility expense, the cost of the executive management team, and other expenses pertaining to certain centralized functions that benefit the entire Company but are not directly attributable to any specific business segment, such as corporate human resources, legal, governance, compliance and finance functions.

Current wording

The Company’s operations consist of three reportable segments: E-Infrastructure Solutions, Transportation Solutions and Building Solutions. We incur certain expenses at the corporate level that relate to our business as a whole. A portion of these expenses are allocated to our business segments by various methods, but primarily on the basis of usage. The balance of the corporate level expenses are reported in the “Corporate G&A Expense” line, which is primarily comprised of corporate headquarters facility expense, the cost of the executive management team and other expenses pertaining to certain centralized functions that benefit the entire Company, but are not directly attributable to any specific business segment, such as corporate human resources, legal, governance, compliance and finance functions.

Previous wording

Revenues—Revenues were $263.9 million for the third quarter of 2024, an increase of $10.0 million, or 3.9%, compared to the third quarter of 2023. The increase was primarily driven by higher volume from data centers, partly offset by the timing of advanced manufacturing projects and lower volume from warehouses and other small projects.

Current wording

Revenues—Revenues were $218.3 million for the first quarter of 2025, an increase of $33.8 million, or 18.3%, compared to the first quarter of 2024. The increase was primarily driven by higher volume from data centers, partly offset by lower volume from warehouses and distribution centers.

Previous wording

Operating income—Operating income was $68.1 million, or 25.8% of revenue, for the third quarter of 2024, an increase of $32.1 million, compared to $35.9 million, or 14.2% of revenue, for the third quarter of 2023. Operating income was $146.9 million, or 21.3% of revenue, for the nine months ended September 30, 2024, an increase of $43.5 million, compared to $103.4 million, or 14.4% of revenue, for the nine months ended September 30, 2023. The increases in operating income and margin were driven by a mix shift toward large mission-critical projects, partly offset by lower volume from warehouses and other small commercial projects and by the timing of advanced manufacturing projects.

Current wording

Operating income—Operating income was $46.6 million, or 21.4% of revenue, for the first quarter of 2025, an increase of $19.5 million, compared to $27.2 million, or 14.7% of revenue, for the first quarter of 2024. The increases in operating income and margin were driven by a project mix shift toward large mission-critical projects, partly offset by lower volume from warehouses and distribution centers.

Previous wording

Operating Income—Operating income was $18.6 million, or 8.2% of revenue, for the third quarter of 2024, an increase of $4.1 million, compared to $14.5 million, or 7.5% of revenue, for the third quarter of 2023. Operating income was $42.2 million, or 6.9% of revenue, for the nine months ended September 30, 2024, an increase of $12.5 million, compared to $29.6 million, or 6.5% of revenue, for the nine months ended September 30, 2023. The increases in operating income and margin were driven by an improved project margin mix and the aforementioned higher revenue.

Current wording

Operating Income—Operating income was $11.3 million, or 9.3% of revenue, for the first quarter of 2025, an increase of $3.1 million, compared to $8.1 million, or 5.5% of revenue, for the first quarter of 2024. The increases in operating income and margin were driven by an improved project margin mix.

Previous wording

Revenues—Revenues were $102.6 million for the third quarter of 2024, a decrease of $10.8 million, or 9.5%, compared to the third quarter of 2023. The decrease was primarily driven by lower commercial volume and fewer residential slabs completed compared to the third quarter of 2023. Our residential concrete slab and plumbing businesses were impacted by a slowdown in the Dallas market in the quarter, as prospective homebuyers appear to be waiting on the sidelines in expectation of future interest rate reductions. The decrease was partly offset by the inclusion of $14.8 million from the Texas plumbing business acquired in late 2023.

Current wording

Revenues—Revenues were $92.0 million for the first quarter of 2025, a decrease of $14.9 million, or 13.9%, compared to the first quarter of 2024. The decrease was primarily driven by lower commercial volume and fewer residential slabs completed compared to the first quarter of 2024. Our residential concrete slab and plumbing businesses were impacted by a slowdown in all markets in the quarter, driven by unusually severe weather and prospective homebuyers struggling with affordability challenges.

Previous wording

Operating income—Operating income was $11.2 million, or 11.0% of revenue, for the third quarter of 2024, a decrease of $1.6 million, compared to $12.8 million, or 11.3% of revenue, for the third quarter of 2023. The decreases in operating income and margin were driven by builders having a shortage of developed land in the quarter, partly offset by by the inclusion of the Texas plumbing business.

Current wording

Operating income—Operating income was $12.4 million, or 13.4% of revenue, for the first quarter of 2025, a decrease of $3.4 million, compared to $15.8 million, or 14.8% of revenue, for the first quarter of 2024. The decreases in operating income and margin were driven by the aforementioned lower volume.

Previous wording

Operating Activities—During the nine months ended September 30, 2024, net cash provided by operating activities was $322.8 million, compared to net cash provided by operating activities of $331.2 million for the nine months ended September 30, 2023. Cash flows provided by operating activities were primarily driven by higher operating income and changes in our accounts receivable, net contracts in progress and accounts payable balances (collectively, “Contract Capital”), as discussed below.

Current wording

Operating Activities—During the three months ended March 31, 2025, net cash provided by operating activities was $84.9 million, compared to net cash provided by operating activities of $49.6 million for the three months ended March 31, 2024. Cash flows provided by operating activities were primarily driven by higher operating income, the collection of the receivable from affiliate, and changes in our accounts receivable, net contracts in progress and accounts payable balances (collectively, “Contract Capital”), as discussed below.

Previous wording

Changes in Contract Capital—The change in operating assets and liabilities varies due to fluctuations in operating activities and investments in Contract Capital. The changes in components of Contract Capital during the nine months ended September 30, 2024 and 2023 were as follows:

Current wording

Changes in Contract Capital—The change in operating assets and liabilities varies due to fluctuations in operating activities and investments in Contract Capital. The changes in components of Contract Capital during the three months ended March 31, 2025 and 2024 were as follows:

Previous wording

During the nine months ended September 30, 2024, the change in Contract Capital was $76.3 million, which was primarily driven by the E-Infrastructure Solutions segment due to the increased size and duration of its projects in progress. The Company’s Contract Capital fluctuations are impacted by the mix of projects in Backlog, seasonality, the timing of new awards and related payments for work performed and the contract billings to the customer as projects are completed. Contract Capital is also impacted at period-end by the timing of accounts receivable collections and accounts payable payments for projects.

Current wording

During the three months ended March 31, 2025, the change in Contract Capital was $7.3 million, which was primarily driven by the E-Infrastructure Solutions segment due to the increased size and duration of its projects in progress. The Company’s Contract Capital fluctuations are impacted by the mix of projects in Backlog, seasonality, the timing of new awards and related payments for work performed and the contract billings to the customer as projects are completed. Contract Capital is also impacted at period-end by the timing of accounts receivable collections and accounts payable payments for projects.

Previous wording

Investing Activities—During the nine months ended September 30, 2024, net cash used in investing activities was $62.3 million, compared to net cash used of $25.6 million in the nine months ended September 30, 2023. The net cash used during this year was primarily driven by $65.3 million for purchases of capital equipment, partly offset by $7.8 million of cash proceeds from the sale of property and equipment. Capital equipment is acquired as needed to support changing levels of production activities and to replace retiring equipment.

Current wording

Investing Activities—During the three months ended March 31, 2025, net cash used in investing activities was $54.2 million, compared to net cash used of $21.0 million in the three months ended March 31, 2024. The net cash used during the period was primarily driven by $37.9 million for acquisitions (including $25 million for the Drake Acquisition) and $17.9 million for purchases of capital equipment, partly offset by $1.6 million of cash proceeds from the sale of property and equipment. Capital equipment is acquired as needed to support changing levels of production activities and to replace retiring equipment.

Previous wording

Financing Activities—During the nine months ended September 30, 2024, net cash used in financing activities was $84.0 million, compared to net cash used of $81.4 million for the nine months ended September 30, 2023. The financing cash outflow during this year was primarily driven by $50.6 million for the repurchase of common stock, $19.7 million of repayments on the Term Loan Facility, and $13.4 million for withholding taxes paid on the net share settlement of vested equity awards.

Current wording

Financing Activities—During the three months ended March 31, 2025, net cash used in financing activities was $56.2 million, compared to net cash used of $19.7 million for the three months ended March 31, 2024. The financing cash outflow during the period was primarily driven by $43.8 million for the repurchase of common stock, $6.6 million of repayments on the Term Loan Facility, and $5.8 million for withholding taxes paid on the net share settlement of vested equity awards.

Previous wording

Capital Strategy—The Company will continue to explore additional revenue growth and capital alternatives to improve leverage and strengthen its financial position in order to take advantage of trends in the civil infrastructure and E-infrastructure markets. The Company expects to pursue strategic uses of its cash, such as, investing in projects or businesses that meet its gross margin targets and overall profitability, managing its debt balances and repurchasing shares of its common stock.

Current wording

Capital Strategy—The Company will continue to explore additional revenue growth and capital alternatives to improve leverage and strengthen its financial position in order to take advantage of trends in the civil infrastructure and E-infrastructure markets. The Company also expects to continue to pursue strategic uses of its cash, such as investing in projects or businesses that meet its gross margin and overall profitability targets, managing its debt balances and repurchasing shares of its common stock.

Previous wording

We participate in various construction joint venture partnerships in order to share expertise, risk and resources for certain highly complex projects. The joint venture’s contract with the project owner typically requires joint and several liability among the joint venture partners. Although our agreements with our joint venture partners provide that each party will assume and fund its share of any losses resulting from a project, if one of our partners was unable to pay its share, we would be fully liable for such share under our contract with the project owner. Circumstances that could lead to a loss under these guarantee arrangements include a partner’s inability to contribute additional funds to the venture in the event that the project incurred a loss or additional costs that we could incur should the partner fail to provide the services and resources toward project completion to which it committed in the joint venture agreement. See the 2023 Form 10-K under “Part I, Item 1A. Risk Factors.”

Current wording

We participate in various construction joint venture partnerships in order to share expertise, risk and resources for certain highly complex projects. The joint venture’s contract with the project owner typically requires joint and several liability among the joint venture partners. Although our agreements with our joint venture partners provide that each party will assume and fund its share of any losses resulting from a project, if one of our partners is unable to pay its share, we would be fully liable for such share under our contract with the project owner. Circumstances that could lead to a loss under these guarantee arrangements include a partner’s inability to contribute additional funds to the venture in the event that the project incurred a loss or additional costs that we could incur should the partner fail to provide the services and resources toward project completion to which it committed in the joint venture agreement. See the 2024 Form 10-K under “Part I, Item 1A. Risk Factors.”

Previous wording

At September 30, 2024, there was approximately $174 million of construction work to be completed on unconsolidated construction joint venture contracts, of which approximately $85 million represented our proportionate share. Due to the joint and several liability under our joint venture arrangements, if one of our joint venture partners fails to perform, we and the remaining joint venture partners would be responsible for completion of the outstanding work. As of September 30, 2024, we are not aware of any situation that would require us to fulfill responsibilities of our joint venture partners pursuant to the joint and several liability under our contracts.

Current wording

At March 31, 2025, there was approximately $38 million of construction work to be completed on unconsolidated construction joint venture contracts, of which approximately $15 million represented our proportionate share. Due to the joint and several liability under our joint venture arrangements, if one of our joint venture partners fails to perform, we and the remaining joint venture partners would be responsible for completion of the outstanding work. As of March 31, 2025, we are not aware of any situation that would require us to fulfill responsibilities of our joint venture partners pursuant to the joint and several liability under our contracts.