TPC US Equity☆

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included in Item 15. Exhibits and Financial Statement Schedules in this Annual Report. This discussion contains forward-looking statements, which involve risks and uncertainties. For cautions about relying on such forward-looking statements, please refer to the section entitled Forward-Looking Statements at the beginning of this Annual Report immediately prior to Item 1. Our actual results

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could differ materially from those anticipated in the forward-looking statements as a result of certain factors, including, but not limited to, those discussed in Item 1A. Risk Factors and elsewhere in this Annual Report.

Comparison of 2019 and 2018 Results

For a discussion comparing our 2019 results to our 2018 results, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on February 26, 2020.

Executive Overview

COVID-19 Update

In the first quarter of 2020, the outbreak of a novel strain of coronavirus, COVID-19, was declared a pandemic. Efforts in the United States to prevent the spread of COVID-19 and mitigate its impacts intensified in March 2020. All 50 states in the United States declared states of emergency, and various countries around the world, including the United States, took steps to restrict travel. Many states and cities within the United States also enacted temporary closures of businesses, issued stay-at-home orders and implemented other restrictive measures in response to the pandemic. The pace of easing and the continued level of restrictions have varied across regions based on the rates of new COVID-19 cases and hospitalizations, and this variability is expected to continue until infection rates decrease to levels that are more acceptable to public health officials. Several vaccines have been developed and approved, or are in the process of being approved, and large-scale immunization programs have commenced worldwide, with recipients being offered the vaccine based upon government-approved priority classifications and schedules. These vaccines are highly effective against the original COVID-19 virus strain, but may not be as effective against certain new variants that have recently been discovered nor against other future variants.

In 2020, the COVID-19 pandemic caused a lack of available manpower, a reduction in field labor productivity, other inefficiencies, delays to project schedules, deferral of project execution and, consequently, incremental costs estimated to be in excess of $50 million, much of which we are seeking to recover from our customers as allowed by contractual terms. The relief sought from customers, some of which has already been received, helped reduce the pandemic's negative impact on our revenue for the year to an estimated $290 million and income from construction operations to an estimated $21 million (with much of the revenue and income from construction operations associated with these impacts expected to be recognized in future periods). In addition, the pandemic caused the cancellation of a transaction to sell an office building that would have resulted in other income of approximately $8 million. Altogether, we estimate that the pandemic negatively impacted EPS by $0.41 in 2020, partially offsetting the results for the year.

The vast majority of our projects, especially in the Civil segment, have been and continue to be considered essential business activities, which has allowed projects to continue while implementing new health and safety requirements. However, the COVID-19 pandemic had an adverse effect on the volume of our new awards and, correspondingly, backlog in 2020. Many of our state and local government customers’ revenue sources have been negatively impacted by the pandemic due to severely curtailed ridership on mass-transit systems (buses, subways, trains, etc.), travel on commercial airlines, and driving by the general public, which resulted in reduced fare and toll collections, lower fuel tax receipts and reduced airport and other facility usage fees. Sales and other tax revenues have also been negatively affected by reduced spending, as the retail, travel, hospitality and entertainment industries, among others, have suffered through periodic government-imposed shut-downs or occupancy restrictions. These tax revenue shortfalls led to, and could continue to result in, funding uncertainties that have caused customers to delay bid solicitations and contract awards for many of their planned infrastructure projects. Our reduced backlog combined with the possibility of continued pandemic-related delays in project bids and awards could result in lower-than-expected revenue and earnings until such time as the federal government provides supplemental funding support (should that occur) to our customers or when customers’ funding uncertainties are otherwise resolved.

While the recently commenced COVID-19 vaccination programs offer hope that society and business environments may return to a greater sense of normalcy in the second half of 2021, the timing and pace of such a return to normalcy are difficult to predict. As such, due to the fluidity of the COVID-19 pandemic, uncertainties as to its scope and duration, and ongoing changes in the way that governments, businesses and individuals react and respond to the pandemic, the Company is unable at this time to accurately predict the pandemic’s future impact on the Company’s business, results of operations, financial condition or liquidity. Among other things, governments could prohibit the continuation of certain projects that to date have been designated as “essential” or could impose health, safety and other operational requirements on such projects that could result in delays to or suspensions of such projects. In addition, employees and contractors working on such projects could be unable or unwilling to continue working on them, perhaps for extended periods, because they may be unable or unwilling to be immunized against COVID-19, or for other reasons. The COVID-19 pandemic also could negatively affect the ability of counterparties to make required payments on a timely basis or at all.

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Operating Results

Consolidated revenue for 2020 was $5.3 billion, an increase of 20% compared to $4.5 billion in 2019. The growth was primarily attributable to increased activities on several infrastructure projects in California and the Northeast, and various building projects in California. The revenue growth in 2020 was reduced by the COVID-19 impact mentioned above. Revenue in 2019 was negatively impacted by a $123.9 million reduction associated with the SR 99 charge discussed in the following paragraph.

Income from construction operations in 2020 was $262.3 million compared to a loss from construction operations of $365.0 million in 2019. Adjusted income from construction operations for 2019, which is a non-GAAP financial measure and excludes the $379.9 million non-cash goodwill impairment charge incurred in that year, was $14.9 million. (For a discussion of non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to the most nearly comparable GAAP financial measures, see the section below titled Non-GAAP Financial Measures.) The increase in 2020 was driven by contributions from the above-mentioned infrastructure projects, as well as the absence of a prior-year $166.8 million pre-tax charge related to the adverse SR 99 jury verdict. (The SR 99-related charge in 2019 principally impacted the Civil segment. For additional information, refer to the Alaskan Way Viaduct (SR 99) Matter discussion in Note 8 of the Notes to Consolidated Financial Statements.) The increase was partially offset by the COVID-19 impact mentioned above.

The provision for income taxes was $21.9 million for 2020 compared to an income tax benefit of $65.6 million for 2019. The effective tax rate for 2020 was 12.6% compared to 15.4% for 2019. The effective tax rate in 2020 primarily reflects tax benefits related to provisions of the CARES Act. The income tax benefit in 2019 resulted from the pre-tax loss primarily related to the goodwill impairment and SR 99 charges mentioned above. See Corporate, Tax and Other Matters below for a discussion of the changes in the effective tax rate.

Diluted earnings per share for 2020 was $2.12 compared to diluted loss per share of $7.72 for 2019. The COVID-19 pandemic had an estimated negative impact on diluted earnings per share of $0.41 for 2020. For 2019, adjusted diluted loss per share, which is a non-GAAP financial measure and excludes the goodwill impairment charge (and the associated tax benefit) incurred in that year, was $1.14. The increase in 2020 was principally due to the factors discussed above that drove the increase in income from construction operations, as well as the impact of the favorable income tax rate in 2020.

Consolidated new awards in 2020 were $2.4 billion compared to $6.4 billion in 2019. The lower volume of new awards in 2020 was primarily due to the impacts of the COVID-19 pandemic, which delayed certain customers from moving forward with planned project bid solicitations and contract awards due to budgetary impacts, funding uncertainties and customer staffing challenges. In addition, new awards in 2020 were negatively impacted by the timing of bids and awards for certain large prospective project opportunities, which the Company expects will occur in 2021 and 2022. The Civil and Building segments were the primary contributors to the new award activity in 2020. Significant new awards included approximately $732 million for various mass-transit projects; approximately $615 million for various building projects in California; $286 million for various electrical projects in Texas, California and Florida; $271 million for several government facilities projects nationwide; and $158 million for various electrical projects in New York.

Consolidated backlog as of December 31, 2020 was $8.3 billion compared to $11.2 billion as of December 31, 2019. Backlog declined as a result of the higher current year revenue generated from near-record backlog at the end of 2019 outpacing current year new awards, which were negatively impacted by the COVID-19 pandemic. As of December 31, 2020, the mix of backlog by segment was 57% for Civil, 20% for Building and 23% for Specialty Contractors.

Most projects in the Civil segment’s backlog typically convert to revenue over a period of three to five years and in the Building and Specialty Contractors segments over a period of one to three years. We estimate that approximately $4 billion, or 47%, of our backlog as of December 31, 2020 will be recognized as revenue in 2021.

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The following table presents the changes in backlog in 2020:

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(a)New awards consist of the original contract price of projects added to our backlog plus or minus subsequent changes to the estimated total contract price of existing contracts.

(b)Backlog may differ from the transaction prices allocated to the remaining performance obligations as disclosed in Note 3 of the Notes to Consolidated Financial Statements. Such differences relate to the timing of executing a formal contract or receiving a notice to proceed. More specifically, backlog sometimes may include awards for which a contract has not yet been executed or a notice to proceed has not been issued, but for which there are no remaining major uncertainties that we will proceed with our work on the project (e.g., adequate funding is in place).

Because the COVID-19 pandemic remains fluid and uncertain, the Company cannot assess the degree to which it might experience future adverse impacts. The general outlook for the Company’s growth over the next several years remains favorable, particularly in the Civil and Specialty Contractors segments, but the impact of the COVID-19 pandemic could continue to adversely affect future performance and operations, and the level of new work awarded. In addition, the Company’s growth could continue to be impacted by future project delays or the timing of project commencements, ramp-up activities and completions. We anticipate that we will continue to win our share of significant new awards resulting from long-term capital spending plans by state, local and federal customers, as well as limited competition for some of the largest project opportunities. In recent elections, voters in numerous states approved dozens of long-term transportation funding measures totaling approximately $200 billion in long-term funding. The largest of these were in Los Angeles County, where Measure M, a half-cent sales tax increase, was approved and is expected to generate $120 billion of funding over 40 years, and in Seattle, Washington, where Sound Transit 3 was passed and is expected to generate $54 billion of funding over 25 years. As state and local governments continue responding to the economic burdens attributable to the COVID-19 pandemic, they may delay or cancel planned infrastructure investments due to reduced revenues from income and sales taxes, fuel taxes and tolls. The extent of such effects, their duration, and how state and local governments will respond remains uncertain, just as the scope and duration of the COVID-19 pandemic remain uncertain. However, the COVID-19 pandemic’s dramatic impact on the U.S. economy has caused interest rates to remain at historically low levels, which may be conducive to continued, and potentially increased, spending on infrastructure projects.

There has long been strong, bipartisan support for infrastructure investments in the U.S. Given the lack of substantial federal infrastructure spending over the past two decades, there now appears to be a greater likelihood for additional federal financial assistance or stimulus programs directed toward assisting state and local governments in response to the COVID-19 pandemic and/or a federal program specifically targeting significant investments in infrastructure. Such additional federal financial assistance or stimulus programs could favorably impact the Company’s current work and prospective opportunities, though the timing and magnitude of such additional federal government actions, if any, remain uncertain.

While we anticipate continued revenue growth from our existing backlog of large civil infrastructure projects on the West Coast and other projects in Guam, certain large civil projects in the Northeast are completing or will be nearing completion over the next year. The Company is pursuing several large prospective projects on the West Coast, in the Northeast and in Guam that are expected to be bid and awarded in 2021 and 2022. However, revenue could decline in 2021 because the timing and magnitude of revenue contributions from these prospective projects may not be sufficient to offset revenue reductions associated with the projects that will be completed or nearing completion in 2021. In addition, as discussed earlier, the COVID-19 pandemic has resulted in, and could potentially continue to result in, delays in the bidding and awarding of certain projects the Company is pursuing, which could further delay large new revenue streams.

For a more detailed discussion of operating performance of each business segment, corporate general and administrative expenses and other items, see Results of Segment Operations, Corporate, Tax and Other Matters and Liquidity and Capital Resources below.

Non-GAAP Financial Measures

To supplement our consolidated financial statements presented under generally accepted accounting principles in the United States (“GAAP”), we are presenting certain non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations, and they are among the

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indicators management uses as a basis for evaluating the Company’s financial performance as well as for forecasting future periods. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our business operating results, including underlying trends.

These non-GAAP financial measures, which exclude the non-cash goodwill impairment charge incurred in 2019 (as well as the tax benefit associated with this charge), include adjusted income (loss) from construction operations, adjusted net income (loss) attributable to Tutor Perini Corporation, adjusted diluted earnings (loss) per common share and adjusted effective income tax rate. We also reference adjusted operating margin for each segment, which is a non-GAAP financial measure that we define as adjusted income (loss) from construction operations as a percentage of revenue. These non-GAAP financial measures are not intended to replace the presentation of our financial results in accordance with GAAP, and they may not be comparable to other similarly titled non-GAAP financial measures presented by other companies. Reconciliations of these non-GAAP financial measures to the most nearly comparable GAAP financial measures are presented below. There were no adjustments for 2020; therefore, the non-GAAP financial measures do not differ from GAAP results in that period.

Reconciliation of Non-GAAP Financial Measures

(in millions) Civil Building SpecialtyContractors Corporate ConsolidatedTotal

Year Ended December 31,

(in millions, except per common share amounts and percentages) 2020 2019

Plus: Goodwill impairment charge — 379.9

Less: Tax benefit provided on goodwill impairment charge — (49.4)

Diluted earnings (loss) per common share, as reported $ 2.12 $ (7.72)

Plus: Goodwill impairment charge — 7.56

Less: Tax benefit provided on goodwill impairment charge — (0.98)

Adjusted diluted earnings (loss) per common share $ 2.12 $ (1.14)

Effective income tax rate, as reported 12.6 % 15.4 %

Tax effect of goodwill impairment charge — % 19.9 %

Adjusted effective income tax rate 12.6 % 35.3 %

Results of Segment Operations

The results of our Civil, Building and Specialty Contractors segments are discussed below:

Civil Segment

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

Year Ended December 31,

Income (loss) from construction operations, as reported 245.8 (150.9)

Plus: Goodwill impairment charge — 210.2

Adjusted income from construction operations 245.8 59.3

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Revenue for 2020 increased 24% compared to 2019. The revenue growth was primarily due to overall increased project execution activities on various mass-transit projects in California and Minnesota, as well as the absence of the prior-year revenue reduction associated with the adverse SR 99 jury verdict discussed in the section entitled Executive Overview. We estimate that the COVID-19 pandemic negatively impacted revenue by approximately $45 million in 2020, primarily due to the factors that affected operating results mentioned above in COVID-19Update.

Income from construction operations was $245.8 million in 2020 compared to a loss from construction operations of $150.9 million in 2019. Excluding the impact of the goodwill impairment charge in 2019, adjusted income from construction operations was $59.3 million, reflecting an increase of 314% in 2020 compared to 2019. The increase was primarily driven by the volume growth mentioned above and improved performance on certain projects, as well as the absence of the prior-year SR 99-related charge ($155.8 million of the $166.8 million charge impacted the Civil segment in 2019). The increase was partially offset by the absence of a prior-year $37.8 million reduction in the segment's general and administrative expenses associated with the remeasurement gain that resulted from the Company increasing its ownership interest in a joint venture in 2019, as well as by an increase in non-cash amortization expense of $25.9 million in 2020, also related to that increased ownership interest. We estimate that the COVID-19 pandemic resulted in a negative impact of approximately $6 million on income from construction operations in 2020.

Operating margin was 11.2% for 2020 compared to operating margin of (8.5)% and adjusted operating margin of 3.3% in 2019. Adjusted operating margin excludes the impact of the 2019 goodwill impairment charge. The increase in adjusted operating margin for 2020 was primarily due to the factors discussed above that drove the increases in revenue and income from construction operations.

New awards in the Civil segment totaled $946 million in 2020 compared to $2.7 billion in 2019. The lower volume of new awards in 2020 compared to 2019 was primarily due to the COVID-19 pandemic, which resulted in delays in customers issuing bid solicitations and contract awards for certain planned projects. In addition, new awards in 2020 were negatively impacted by the timing of bids and awards for certain large prospective project opportunities, which the Company expects will occur in 2021 and 2022. New awards in 2020 included more than $732 million of additional funding for various mass-transit projects, the Company’s $121 million share of a joint-venture mass-transit project in Massachusetts, and a $64 million mining project in Alabama. The COVID-19 pandemic has resulted in significant revenue shortfalls for many state and local government agencies in 2020, and may continue to cause the deferrals or cancellations of certain new projects, depending on the allocation and prioritization of state and local funding, as well as the availability, timing and magnitude of anticipated supplemental funding from the federal government.

New awards in 2019 included the $1.4 billion Purple Line Section 3 Stations project and the $432 million Division 20 Portal Widening and Turnback Facility project, both in California; the $253 million Culver Line Communications-Based Train Control project in New York; and a $178 million military facilities project and a $122 million wastewater treatment project, both in Guam.

Backlog for the Civil segment was $4.8 billion as of December 31, 2020, a decrease of 21% compared to $6.0 billion as of December 31, 2019. The decrease was primarily due to strong revenue growth for the segment that exceeded the volume of new awards in 2020. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, substantial anticipated funding from various voter-approved transportation measures and public agencies’ long-term spending plans. The Civil segment is well-positioned to continue capturing its share of these prospective projects.

Building Segment

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

Year Ended December 31,

Income from construction operations, as reported 53.2 23.7

Plus: Goodwill impairment charge — 13.5

Adjusted income from construction operations 53.2 37.2

Revenue for 2020 increased 14% compared to 2019, primarily due to increased project execution activities on various projects in California and Oklahoma. The increase was partially offset by reduced activity on certain projects in California that are completed or nearing completion. Revenue grew in 2020 despite the estimated negative impact of the COVID-19 pandemic of approximately $190 million, primarily due to the factors that affected operating results mentioned above in COVID-19Update.

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Income from construction operation in 2020 was $53.2 million compared to $23.7 million in 2019. Excluding the impact of the goodwill impairment charge in 2019, adjusted income from construction operations was $37.2 million, reflecting an increase of 43% in 2020 compared to 2019. The increase was principally driven by the factors mentioned above that drove the increases in revenue, as well as increased contributions from certain higher-margin projects in 2020. We estimate that the COVID-19 pandemic resulted in a negative impact of approximately $6 million in income from construction operations during 2020.

Operating margin was 2.7% in 2020 compared to operating margin of 1.4% and adjusted operating margin of 2.1% in 2019. Adjusted operating margin excludes the impact of the 2019 goodwill impairment charge. The increase in adjusted operating margin was driven by the factors mentioned above that drove the increases in revenue and income from construction operations.

New awards in the Building segment totaled $897 million in 2020 compared to $2.2 billion in 2019, as the COVID-19 pandemic negatively impacted demand in certain end markets and, correspondingly, the timing of bids and contract awards for certain planned projects. New awards in 2020 included approximately $615 million for various building projects in California and $271 million for several government facilities projects nationwide. The COVID-19 pandemic could continue to result in delayed project opportunities.

New awards in 2019 included the Choctaw Casino and Resort project in Oklahoma; a large hospitality and gaming project in California; a $263 million courthouse project in Florida; a technology campus tenant improvement project in California valued at more than $200 million; and the $200 million Southland Gaming Casino and Hotel project in Arkansas.

Backlog for the Building segment was $1.7 billion as of December 31, 2020, a decrease of 39% compared to $2.8 billion as of December 31, 2019. The decrease was driven by revenue growth for the segment that exceeded the volume of new awards in 2020. The Building segment continues to have a large volume of prospective projects across various end markets and geographic locations. Barring any further adverse impacts from the COVID-19 pandemic, demand for our building construction services is expected to continue due to ongoing customer spending supported by a historically low interest rate environment.

Specialty Contractors Segment

Revenue, income (loss) from construction operations and adjusted income (loss) from construction operations for the Specialty Contractors segment are summarized as follows:

Year Ended December 31,

Income (loss) from construction operations, as reported 17.2 (172.6)

Plus: Goodwill impairment charge — 156.2

Adjusted income (loss) from construction operations 17.2 (16.4)

Revenue for 2020 increased 22% compared to 2019. The growth was principally due to increased project execution activities on certain mechanical and electrical projects in the Northeast and California. We estimate that the COVID-19 pandemic negatively impacted revenue in 2020 by approximately $55 million, primarily due to the factors that affected operating results mentioned above in COVID-19Update.

Income from construction operations in 2020 was $17.2 million compared to a loss from construction operations of $172.6 million in 2019. Excluding the impact of the goodwill impairment charge in 2019, adjusted loss from construction operations was $16.4 million. Income from construction operations increased substantially in 2020 compared to the adjusted loss from construction operations in 2019, primarily due to the increased volume mentioned above and a gain of $25.7 million as a result of a favorable arbitration decision and subsequent settlement of the related employment dispute. The increase was also due to the absence of prior-year net unfavorable adjustments on certain electrical and mechanical projects in New York that totaled $41.5 million, none of which were individually material, and the absence of the prior-year SR 99-related charge ($11.0 million of which impacted the Specialty Contractors segment). The increase in 2020 was partially offset by various net unfavorable adjustments to project forecasts that totaled $29.8 million, none of which were individually material; a charge of $15.2 million due to an unfavorable legal ruling pertaining to a mechanical project in California; a charge of $13.2 million due to an adverse arbitration ruling on an electrical project in New York; and the estimated negative impact of the COVID-19 pandemic of approximately $9 million.

Operating margin was 1.5% in 2020 compared to operating margin of (18.6)% and adjusted operating margin of (1.8)% in 2019. Adjusted operating margin excludes the impact of the 2019 goodwill impairment charge. The changes in adjusted operating margin for both periods were mainly attributable to the aforementioned factors that drove the changes in revenue and adjusted income (loss) from construction operations.

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New awards in the Specialty Contractors segment totaled $600 million in 2020 compared to $1.5 billion in 2019, as the COVID-19 pandemic resulted in, and could continue to result in, reduced demand from certain commercial and government customers that have experienced funding constraints. New awards in 2020 included $286 million for various electrical projects in Texas, California and Florida, and $158 million for various electrical projects in New York.

New awards in 2019 included, among others, electrical and mechanical subcontracts valued at $216 million for the Purple Line Section 3 Stations project and an electrical subcontract valued at $140 million for the Division 20 Portal Widening and Turnback Facility project, both in California; and three mechanical projects collectively valued at $192 million and an electrical subcontract valued at $140 million for a mass-transit project, all in New York.

Backlog for the Specialty Contractors segment was $1.9 billion as of December 31, 2020, a decrease of 22% compared to $2.4 billion as of December 31, 2019. The decrease was primarily due to strong revenue growth for the segment that exceeded the volume of new awards in 2020. The Specialty Contractors segment continues to be increasingly focused on servicing the Company’s backlog of large Civil and Building segment projects, but also remains well-positioned to capture its share of new projects for external customers, leveraging the size and scale of our business units that operate in New York, Texas, Florida and California and the strong reputation held by these business units for high-quality work on large, complex projects.

Corporate, Tax and Other Matters

Corporate General and Administrative Expenses

Corporate general and administrative expenses were $53.9 million in 2020 compared to $65.5 million in 2019. The decrease in corporate general and administrative expenses in 2020 was predominantly due to lower share-based compensation expense, lower outside professional fees, and reduced travel expenses due to the COVID-19 pandemic.

Other Income (Expense), Interest Expense and Income Tax (Expense) Benefit

Year Ended December 31,

Other income (expense) $ (11.9) $ 6.7

Income tax (expense) benefit (21.9) 65.6

Other income (expense) for 2020 was a net expense of $11.9 million compared to net other income of $6.7 million for 2019. The net expense in 2020 was primarily due to charges related to the unfavorable resolutions of certain disputes pertaining to past business acquisitions, which were not material individually or in the aggregate, while the net other income in 2019 was primarily related to a net gain on the sale of property and equipment. The COVID-19 pandemic caused the cancellation of a transaction to sell an office building that would have resulted in other income of approximately $8 million in 2020.

Interest expense increased $8.7 million in 2020 compared to 2019, almost entirely due to non-cash extinguishment costs that resulted from our debt restructuring transactions in August 2020.

The provision for income taxes was $21.9 million for 2020 compared to an income tax benefit of $65.6 million for 2019. The effective income tax rate was 12.6% for 2020 compared to 15.4% for 2019. The effective income tax rate for 2020 primarily reflects the favorable tax rate differential realized on the 2019 net operating loss (“NOL”) carryback and earnings attributable to noncontrolling interests for which income taxes are not the responsibility of the Company. Under the CARES Act, enacted on March 27, 2020, the NOL generated in 2019 may be carried back up to five years, whereas under previous rules NOLs were only allowed to be carried forward. This allowed the Company to realize the benefit of the tax rate differential by carrying back the NOL to tax years when the federal statutory tax rate was 35% rather than the current rate of 21%. These benefits to the effective tax rate were partially offset by state income taxes.

During 2019, the Company recognized a tax benefit of $65.6 million on a loss before income taxes of $425.8 million. As a result of the $379.9 million goodwill impairment charge discussed above, the Company recognized a tax benefit totaling $49.4 million. Approximately $209.5 million of the charge was not deductible for income tax purposes, which significantly reduced the tax benefit and effective income tax rate for 2019. As discussed above, the effective income tax rate for 2019 was 15.4%. The adjusted effective income tax rate for 2019, which excludes the tax benefit from the goodwill impairment charge and which is a non-GAAP financial measure, was 35.3%. The adjusted effective income tax rate for 2019 was higher than the U.S. federal statutory rate primarily due to earnings attributable to noncontrolling interests for which income taxes are not the responsibility

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of the Company, which increased the effective rate due to the pre-tax loss for the period, U.S. federal research and development tax credits, and state income taxes, partially offset by foreign tax impacts.

Liquidity and Capital Resources

Liquidity is provided by available cash and cash equivalents, cash generated from operations, credit facilities and access to capital markets. On August 18, 2020, the Company entered into a new credit agreement that provides for a term loan B facility and a revolving credit facility. We used the net proceeds to repay all borrowings under our 2017 Credit Facility and repurchase a majority of our Convertible Notes, with the remaining notes outstanding to be repaid from cash restricted for such purpose. Under the new credit agreement, we have a committed line of credit totaling $175 million, with sublimits for the issuance of letters of credit and swing line loans up to the aggregate amounts of $75.0 million and $10.0 million, respectively, which may be used for revolving loans, letters of credit and/or general purposes. We believe that cash generated from operations, along with our unused credit capacity of $175 million and available cash balances as of December 31, 2020, will be sufficient to fund any working capital needs and debt maturities for the next 12 months, provided that we are not adversely impacted by unanticipated future events, including a material increase in the negative impact of the COVID-19 pandemic as discussed above in COVID-19 Update. For a discussion of our new credit agreement and other debt transactions, see the section entitled Debt below.

Cash and Working Capital

Cash and cash equivalents were $374.3 million as of December 31, 2020 compared to $193.7 million as of December 31, 2019. Cash immediately available for general corporate purposes was $210.8 million and $43.8 million as of December 31, 2020 and 2019, respectively, with the remainder being amounts held by our consolidated joint ventures and also our proportionate share of cash held by our unconsolidated joint ventures. Cash held by our joint ventures was available only for joint venture-related uses, including distributions to joint venture partners. In addition, our restricted cash and restricted investments totaled $156.5 million as of December 31, 2020 compared to $79.4 million as of December 31, 2019. Restricted cash and restricted investments are primarily held to secure insurance-related contingent obligations. Our restricted cash as of December 31, 2020 also included $69.9 million of cash held to repay the outstanding principal balance of the Convertible Notes.

During the year ended December 31, 2020, net cash provided by operating activities was $172.8 million (which is a new record high for any year since the 2008 merger of Tutor-Saliba and Perini), due primarily to cash generated from earnings sources, partially offset by investment in working capital. The increase in working capital for the year ended December 31, 2020 primarily reflects an increase in costs and estimated earnings in excess of billings and an increase in accounts receivable due to timing of collections, partially offset by an increase in accounts payable due to timing of payments to suppliers and subcontractors. The increase in costs and estimated earnings in excess of billings was driven in part by impacts of the COVID-19 pandemic, which caused delays in the negotiation and resolution of certain claims and unapproved change orders (due to the postponement of certain legal and arbitration proceedings, as well as deferments of certain settlement discussions) and constrained customers’ revenue and funding sources, thereby limiting their budgetary discretion to pay the Company for changes approved in scope but for which pricing is pending. During the year ended December 31, 2019, net cash provided by operating activities was $136.5 million, due primarily to changes in net investment in working capital and cash generated from income sources. Those changes in working capital primarily reflected an increase in billings in excess of costs and estimated earnings (“BIE”), partially offset by increases in accounts receivable and retainage receivable.

The $36.2 million increase in cash provided by operating activities when comparing 2020 with 2019 primarily reflects the significant increase in cash from earnings sources, partially offset by an increase in investment in working capital principally due to a smaller increase in BIE.

During 2020 and 2019, we used $46.4 million and $76.1 million of cash from investing activities, respectively. The net cash used in investing activities for 2020 and 2019 was primarily due to the acquisition of property and equipment for projects, which totaled $54.8 million and $84.2 million, respectively. The majority of our capital expenditures for both years was for project-specific equipment purchased by our joint ventures and funded directly by our customers.

During 2020, net cash provided by financing activities was $123.3 million, which was primarily driven by increased net borrowings of $181.4 million, partially offset by $48.5 million of cash distributions to noncontrolling interests and debt issuance costs of $11.2 million. During 2019, we generated $21.8 million of cash from financing activities principally due to increased net borrowings of $61.3 million and contributions from noncontrolling interests of $9.8 million, partially offset by distributions to noncontrolling interests of $46.5 million.

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As of December 31, 2020, we had working capital of $1.8 billion, a ratio of current assets to current liabilities of 1.80 and a ratio of debt to equity of 0.66 compared to working capital of $1.4 billion, a ratio of current assets to current liabilities of 1.66 and a ratio of debt to equity of 0.58 at December 31, 2019.

Debt

Summarized below are the key terms of our debt as of December 31, 2020. For additional information, refer to Note 7 of the Notes to Consolidated Financial Statements, as applicable.

2020 Credit Agreement

On August 18, 2020, the Company entered into a new credit agreement (the “2020 Credit Agreement”) with BMO Harris Bank N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and other lenders. The 2020 Credit Agreement provides for a $425.0 million term loan B facility (the “Term Loan B”) and a $175.0 million revolving credit facility (the “2020 Revolver”), with sublimits for the issuance of letters of credit and swing line loans up to the aggregate amounts of $75.0 million and $10.0 million, respectively. The Term Loan B will mature on August 18, 2027 and the 2020 Revolver will mature on August 18, 2025, in each case, unless any of the 2017 Senior Notes are outstanding on January 30, 2025 (which is 91 days prior to the maturity of the 2017 Senior Notes), in which case, both the Term Loan B and the 2020 Revolver will mature on January 30, 2025 (subject to certain further exceptions). For more information regarding the terms of our 2020 Credit Agreement, refer to Note 7 of the Notes to Consolidated Financial Statements.

The table below presents our actual and required first lien net leverage ratio under the 2020 Credit Agreement for the period, which is calculated on a rolling four-quarter basis:

Trailing Four Fiscal Quarters Ended

Actual Required

First lien net leverage ratio 0.69 to 1.00 < or = 2.75 : 1.00

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

Termination of 2017 Credit Facility and Repurchase of Convertible Notes

On April 20, 2017, the Company entered into a credit agreement (the “2017 Credit Facility”) with SunTrust Bank, now known as Truist Bank, as Administrative Agent, Swing Line Lender and L/C Issuer and a syndicate of other lenders. The 2017 Credit Facility provided for a $350 million revolving credit facility and a sublimit for the issuance of letters of credit and swing line loans up to the aggregate amount of $150 million and $10 million, respectively, both maturing on April 20, 2022 unless any of the Convertible Notes, as defined below, were outstanding on December 17, 2020, in which case all such borrowings would have matured on December 17, 2020 (the “spring-forward provision”).

On August 18, 2020, the Company used proceeds from the Term Loan B to repay outstanding amounts under its 2017 Credit Facility. As a result of repaying the outstanding amounts under the 2017 Credit Facility and entering into the 2020 Credit Agreement, the Company terminated the 2017 Credit Facility, including its spring-forward provision that would have accelerated the maturity of the facility to December 17, 2020.

On June 15, 2016, the Company issued $200 million of 2.875% Convertible Senior Notes due June 15, 2021 (the “Convertible Notes”) in a private placement offering. On August 19, 2020, the Company used proceeds from the Term Loan B to repurchase $130.1 million aggregate principal amount of its Convertible Notes for an aggregate purchase price of $132.4 million (including accrued and unpaid interest to the repurchase date). At December 31, 2020, $69.9 million ($67.9 million net of unamortized discount and debt issuance costs) remain outstanding and are included in “Current maturities of long-term debt” on the Consolidated Balance Sheet. The Company will repurchase or retire at or before maturity the remaining Convertible Notes and repay the principal balance using available proceeds from the Term Loan B, which are currently held in a restricted cash account for such purpose.

The Convertible Notes are unsecured obligations of the Company and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company. The Convertible Notes bear interest at a rate of 2.875% per year, payable in cash semi-annually in June and December. Upon conversion, and at the Company’s election, the Company may satisfy its conversion obligation with cash, shares of its common stock or a combination thereof. As of December 31, 2020, the conversion provisions of the Convertible Notes have not been triggered.

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2017 Senior Notes

On April 20, 2017, the Company issued $500 million in aggregate principal amount of 6.875% Senior Notes due May 1, 2025 (the “2017 Senior Notes”) in a private placement offering. Interest on the 2017 Senior Notes is payable in arrears semi-annually in May and November of each year, beginning in November 2017.

Equipment Financing and Mortgages

The Company has certain loans entered into for the purchase of specific property, plant and equipment and secured by the assets purchased. The aggregate balance of equipment financing loans was approximately $36.9 million and $27.7 million at December 31, 2020 and 2019, respectively, with interest rates ranging from 2.74% to 3.89% with equal monthly installment payments over periods up to seven years with balloon payments of $12.4 million in 2021 and $6.3 million in 2022. The aggregate balance of mortgage loans was approximately $10.7 million and $11.5 million at December 31, 2020 and 2019, respectively, with interest rates ranging from LIBOR plus 3% to a fixed 3.50% and equal monthly installment payments over periods up to 10 years with balloon payments of $2.9 million in 2021 and $6.8 million in 2023.

Contractual Obligations

Our outstanding contractual obligations as of December 31, 2020 are summarized in the following table:

Payments Due

(in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years

_____________________________________________________________________________________________________________

(a)Debt and interest on debt exclude unamortized debt discounts and deferred debt issuance costs. Amounts for interest on debt are based on interest rates in effect as of December 31, 2020.

(b)The Company utilizes current actuarial assumptions in determining the expected minimum contributions to fund our defined benefit pension and other post-retirement plans. Estimated contributions for periods beyond the scope of the actuarial assumptions have not been included because, in management’s judgment, such estimates may not be reliable.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements. The preparation of the Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Estimates are based on information available through the date of the issuance of the financial statements; accordingly, actual results in future periods could differ from these estimates. Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). See Note 1(d), Note 3 and Note 4 of the Notes to Consolidated Financial Statements for more information. Significant judgments and estimates used in the preparation of the Consolidated Financial Statements apply to the following critical accounting policies:

Method of Accounting for Contracts — Contract revenue is recognized over time using the cost-to-cost method which measures progress towards completion based on the ratio of contract costs incurred to date compared to total estimated costs for each performance obligation. The estimates used in accounting for contracts with customers require judgment and assumptions regarding both future events and the evaluation of contingencies such as the impact of change orders, liability claims, other contract disputes, the achievement of contractual performance standards and potential variances in project schedule and costs. Changes to the total estimated contract cost, either due to unexpected events or revisions to management’s initial estimates, for a given project are recognized in the period in which they are determined.

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In certain instances, we provide guaranteed completion dates and/or achievement of other performance criteria. Failure to meet schedule or performance guarantees could result in unrealized incentive fees and/or liquidated damages. In addition, depending on the type of contract, unexpected increases in contract cost may be unrecoverable, resulting in total cost exceeding revenue realized from the projects. The Company generally provides limited warranties for work performed, with warranty periods typically extending for a limited duration following substantial completion of the Company’s work on a project. Historically, warranty claims have not resulted in material costs incurred.

Claims arising from construction contracts have been made against the Company by customers, and the Company has made claims against customers for costs incurred in excess of current contract provisions. The Company recognizes revenue for claims as variable consideration in accordance with ASC 606. Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration are made during the contract performance period. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to management. Estimated amounts are only included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of such cost is probable and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements described above for variable consideration have been satisfied.

Construction Joint Ventures — Certain contracts are executed through joint ventures. The arrangements are often formed for the execution of single contracts or projects and allow the Company to share risks and secure specialty skills required for project execution.

In accordance with ASC 810, Consolidation (“ASC 810”) the Company assesses its joint ventures at inception to determine if any meet the qualifications of a variable interest entity (“VIE”). The Company considers a joint venture a VIE if either (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, the Company reassesses its initial determination of whether the joint venture is a VIE.

The Company also evaluates whether it is the primary beneficiary of each VIE and consolidates the VIE if the Company has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The Company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining whether it qualifies as the primary beneficiary. The Company also considers all parties that have direct or implicit variable interests when determining whether it is the primary beneficiary. When the Company is determined to be the primary beneficiary, the VIE is consolidated. In accordance with ASC 810, management’s assessment of whether the Company is the primary beneficiary of a VIE is performed continuously.

For construction joint ventures that do not need to be fully consolidated, the Company accounts for its interest in the joint ventures using the proportionate consolidation method, whereby the Company’s proportionate share of the joint ventures’ assets, liabilities, revenue and cost of operations are included in the appropriate classifications in the Company’s consolidated financial statements. Intercompany balances and transactions are eliminated. See Note 1(b) and Note 13 of the Notes to Consolidated Financial Statements for additional discussion regarding VIEs.

Recoverability of Goodwill — Goodwill represents the excess of amounts paid over the fair value of net assets acquired from an acquisition. In order to determine the amount of goodwill resulting from an acquisition, we perform an assessment to determine the value of the acquired company's tangible and identifiable intangible assets and liabilities. In our assessment, we determine whether identifiable intangible assets exist, which typically include backlog, customer relationships and trade names.

We test goodwill for impairment annually as of October 1 of each year. This test requires us to estimate the fair value of each reporting unit carrying goodwill using income and market approaches, and to compare the calculated fair value of each reporting unit to its carrying value, which is equal to the reporting unit’s net assets. If the calculated fair value of a reporting unit is less than its carrying value, we recognize an impairment charge equal to the difference.

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The impairment evaluation process requires assumptions that are subject to a high degree of judgment such as revenue growth rates, profitability levels, discount rates, industry market multiples and weighted-average cost of capital. Changes in these assumptions would impact the results of our impairment tests.

During interim periods, including those subsequent to the Company’s October 1 annual test date, we evaluate events and circumstances, including, but not limited to, an examination of macroeconomic conditions, cost factors, overall financial performance by each reporting unit, other relevant entity-specific events, and trends in the stock prices of our Company and peers to determine if such factors indicate that it is likely that the goodwill for one or more of our reporting units is impaired, thus warranting the performance of a quantitative impairment test sooner than the fourth quarter of the year. The Company performed an interim impairment test as of June 1, 2019 and recognized a non-cash impairment loss totaling $379.9 million, which eliminated the carrying value of goodwill for the Building and Specialty Contractors reporting units. See Note 1(g) and Note 6 of the Notes to Consolidated Financial Statements.

During the fourth quarter of 2020, we conducted our annual goodwill impairment test and determined that goodwill was not impaired since the estimated fair value of the Civil reporting unit exceeded its net book value by a significant amount. As such, there is a risk of goodwill impairment if future events are less favorable than what we assumed or estimated in our impairment analysis.

The Company has considered relevant events and circumstances since the annual goodwill impairment test, including, but not limited to, an examination of macroeconomic conditions, industry and market conditions, impacts from the COVID-19 pandemic, cost factors, overall financial performance by each reporting unit, other relevant entity-specific events, and trends in the stock prices of the Company and its peers. In considering the totality of qualitative factors known as of the reporting date, we determined that no triggering events occurred or circumstances changed since our October 1, 2020 annual test that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount. We will continue to monitor events occurring or circumstances changing which may suggest that goodwill should be reevaluated. These events and circumstances include, but are not limited to, changes in the overall financial performance of the Civil reporting unit, impacts to our business as a result of the COVID-19 pandemic, as well as other quantitative and qualitative factors specific to the Civil reporting unit which indicate potential triggering events that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount.

New Accounting Pronouncements — For discussion of recently adopted accounting standards and updates, see Note 1 of the Notes to Consolidated Financial Statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not enter into derivative financial instruments for trading, speculation or other purposes that would expose the Company to market risk. In the normal course of business, our results of operations are exposed to certain market risks, primarily associated with fluctuations in interest rates. Borrowings under our 2020 Credit Agreement and certain other debt obligations have variable interest rates subject to interest rate risk. See Note 7 of the Notes to Consolidated Financial Statements for further discussion of our 2020 Credit Agreement. We had approximately $431.5 million and $121.9 million of borrowings with variable interest rates as of December 31, 2020 and 2019, respectively. If short-term floating interest rates on these borrowings were to change by 0.50% and our variable indebtedness were to remain unchanged, interest expense would increase or decrease by approximately $2.2 million for the next twelve months.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Report of Independent Registered Public Accounting Firm and Consolidated Financial Statements are set forth in Item 15 in this Annual Report on Form 10-K and are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures — An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined by Rule 13a-15(e) under the Exchange Act, as of December 31, 2020 was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2020, our disclosure controls and procedures were effective, in that they provide reasonable assurance that

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information required to be disclosed in our reports filed or submitted under the Exchange Act were recorded, processed, summarized and reported within the time periods specified in the SEC’s rules. Our disclosure controls and procedures are designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting — Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining an adequate system of internal control over financial reporting as such term is defined in Exchange Act Rules 13a-15(f). In designing and evaluating our system of internal control over financial reporting, we recognize that inherent limitations exist in any control system no matter how well designed and operated, and we can only provide reasonable, not absolute, assurance of achieving the desired control objectives. In making this assessment, management utilized the criteria issued in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, 2020, our internal control over financial reporting was effective based on those criteria.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of the effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Deloitte & Touche LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2020.

Changes in Internal Control over Financial Reporting — There were no changes in our internal control over financial reporting for the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Tutor Perini Corporation

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Tutor Perini Corporation and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated February 24, 2021, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Los Angeles, CA

February 24, 2021

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ITEM 9B. OTHER INFORMATION

None.

PART III.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item 10 is hereby incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of 2020.

We have adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees, including our principal executive, principal financial and principal accounting officers. Our Code of Business Conduct and Ethics is posted on our website located at http://investors.tutorperini.com/corporate-governance/overview/default.aspx. We intend to disclose future amendments to certain provisions of the Code of Business Conduct and Ethics, and waivers of the Code of Business Conduct and Ethics granted to executive officers and directors, on the website within four business days following the date of the amendment or waiver.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item 11 is hereby incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of 2020.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item 12 is hereby incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of 2020.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item 13 is hereby incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of 2020.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item 14 is hereby incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of 2020.

PART IV.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Tutor Perini Corporation and Subsidiaries

(a) List of Documents Filed as a Part of This Report.

1. Financial Statements:

Our Consolidated Financial Statements as of December 31, 2020 and 2019 and for each of the three years in the period ended December 31, 2020 and the Notes thereto, together with the Report of Independent Registered Public Accounting Firm on those Consolidated Financial Statements are hereby filed as part of this Annual Report on Form 10-K, beginning on page F-1.

2. Financial Statement Schedules:

All consolidated financial statement schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the Consolidated Financial Statements and in the Notes thereto.

3. Exhibits:

See exhibits listed under Part (b) below.

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(b) Exhibits.

EXHIBIT INDEX

The following designated exhibits are, as indicated below, either filed herewith or have heretofore been filed with the SEC under the Securities Act or the Exchange Act and are referred to and incorporated herein by reference to such filings.

Exhibit 3. Articles of Incorporation and By-laws

4.7 Description of Securities.

Exhibit 10. Material Contracts

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Exhibit 21 Subsidiaries of Tutor Perini Corporation.

Exhibit 23 Consent of Independent Registered Public Accounting Firm.

Exhibit 95 Mine Safety Disclosure.

Exhibit 101.SCH Inline XBRL Taxonomy Extension Schema Document.

Exhibit 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Exhibit 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.

Exhibit 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Exhibit 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.

_____________________________________________________________________________________________________________

* Management contract or compensatory plan or arrangement

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ITEM 16. FORM 10-K SUMMARY

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Tutor Perini Corporation

(Registrant)

Date: February 24, 2021 By: /s/ Gary G. Smalley

Gary G. Smalley

Executive Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

= Principal Executive Officer and Director

/s/ Ronald N. Tutor

Ronald N. Tutor Chairman and Chief Executive Officer February 24, 2021

= Principal Financial Officer

/s/ Gary G. Smalley

= Principal Accounting Officer

/s/ Ryan J. Soroka

Ryan J. Soroka Vice President and Chief Accounting Officer February 24, 2021

= Other Directors

Peter Arkley )

Sidney J. Feltenstein )

James A. Frost )

Michael F. Horodniceanu ) /s/ Gary G. Smalley

Michael R. Klein ) Gary G. Smalley

Robert C. Lieber ) Attorney in Fact

Dennis D. Oklak )

Raymond R. Oneglia )

Dale A. Reiss )

Dickran M. Tevrizian, Jr. ) Dated: February 24, 2021

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

Page

Consolidated Financial Statements of the Registrant

Report of Independent Registered Public Accounting Firm F-2

Consolidated Statements of Operations F-5

Consolidated Statements of Comprehensive Income (Loss) F-6

Consolidated Balance Sheets F-7

Consolidated Statements of Cash Flows F-8

Consolidated Statements of Changes in Equity F-9

Notes to Consolidated Financial Statements F-10

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REPORT OF INDEPENDENTREGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Tutor Perini Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tutor Perini Corporation and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue, Accounts Receivable, Contract Assets and Liabilities — Accounting for Construction Contracts– Refer to Notes 1, 3, 4, and 8 to the consolidated financial statements

Critical Audit Matter Description

The Company recognizes revenue for construction contracts over the contract term (“over time”) as construction work progresses. The accounting for these contracts involves judgment, particularly as it relates to the process of determining total estimated revenue (transaction price) and estimating total costs to be incurred at contract completion. Costs of operations are typically recognized as incurred, and the Company’s revenues, including estimated profits, are recorded proportionately as costs are incurred based on the ratio of costs incurred to date to the total estimated costs at completion for the respective performance obligations. Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration, including the impact of change orders, claims, contract disputes and the achievement of contractual performance criteria, and award or other incentive fees are made during the contract performance period (collectively referred to as “variable consideration”). The Company estimates variable consideration at the most likely amount it expects to receive, and includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Also, the Company often engages subcontractors, suppliers, or vendors, to provide underlying materials or services, or a combination of both. Judgment

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is involved in determining estimated recoveries from disputes regarding performance under these contracts (“back charges”), which are a reduction in costs and are recorded as a receivable on the consolidated balance sheet.

Given the significant judgment necessary to account for the Company’s construction contracts including the use of estimates, such as total estimated revenue, total costs to be incurred at contract completion, variable consideration and back charges, which are complex and subject to many variables, auditing the corresponding balances and related accounting estimates required extensive audit effort due to the complexity of these estimates, and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s estimates and judgments included within the Company’s total estimated revenues, total costs to be incurred at contract completion, variable consideration, and back charges included the following, among others:

•We tested the effectiveness of controls over revenues, including those over the determination of estimated costs at completion of the contract, total estimated revenue (including the estimated percentage of completion), variable consideration (including significant change orders and claims), and back charges.

•We selected a sample of construction contracts and performed the following:

◦Compared the total estimated revenue (transaction price), including estimated variable consideration, to the consideration expected to be received based on current rights and obligations under the contracts and any modifications that were agreed upon with the customers.

◦We evaluated the reasonableness of the estimated variable consideration by 1) evaluating the information supporting management’s judgment as to the cause and contractual rights and 2) testing the accuracy of the identification of the underlying costs.

◦Tested the accuracy and completeness of costs incurred to date.

◦Evaluated the reasonableness of management’s estimates of total cost and profit at completion for selected contracts by:

•Evaluating management’s ability to achieve the estimates of total cost and profit by performing corroborating inquiries with the Company’s project managers, and comparing the estimates to management’s work plans, engineering specifications, and supplier contracts.

•Comparing management’s estimates to supporting documents for those estimates, when applicable.

•Evaluating management’s ability to accurately estimate total costs and profits at completion by comparing actual costs and profits to management’s historical estimates for performance obligations that have been fulfilled.

•Evaluating trends on changes in estimates and obtaining evidence on timing and amounts supporting these changes in estimates.

◦Tested the mathematical accuracy of management’s calculation of revenue recognized.

•We evaluated selected quarter over quarter changes in contract profit estimates by obtaining explanations from the Company’s project managers regarding timing and amount and corroborating these inquiries by reading documents such as management work plans, customer communications, invoices and supplier communications.

•Performed procedures on recorded back charges to evaluate the reasonableness of the estimated recovery by 1) evaluating the information supporting management’s judgment as to the cause and contractual rights and 2) testing the accuracy of the identification of the underlying costs.

Goodwill – Refer to Notes 1 and 6 to the consolidated financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of the Civil reporting unit (which corresponds with the Company’s Civil operating segment and is the only reporting unit with a goodwill balance) to its carrying value. The Company determines the fair value of the reporting unit using the income approach and market approach. The determination of fair value using the income-based approach requires management to make significant estimates and assumptions related to projected operating margins, cash flows generated from existing work and new awards, and projected investments in working capital (collectively, the “forecasted financial information”), as well as the discount rates and weighted-

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average cost of capital (“WACC”). The determination of fair value using the market-based approach requires management to make significant assumptions, including those related to the forecasted financial information referred to above and the industry-comparable multiples to be used for each of its reporting units. The Company determines the valuation of the reporting unit based upon a weighted-average value of the income approach and market approach. In evaluating the results there are various quantitative and qualitative factors that need to be considered and could involve subjective judgment.

We identified goodwill as a critical audit matter because small changes to valuation assumptions, specifically the forecasted financial information, discount rates, WACC, and industry-comparable multiples, could have a significant impact on the reporting unit concluded value for the annual goodwill impairment test. Auditing these assumptions involved extensive audit effort, including the need to involve our fair value specialists, due to the complexity of these assumptions and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasted financial information, discount rates, WACC, and industry-comparable multiples for the reporting unit included the following, among others:

•We tested the effectiveness of controls within the goodwill impairment test process, including those over the forecasted financial information, the selection of the industry-comparable multiples, WACC, and discount rates, as well as the identification of interim impairment indicators.

•We evaluated management’s historical ability to accurately forecast by comparing actual results to management’s previous forecasted financial information for the same period.

•We evaluated the reasonableness of management’s forecasted financial information by comparing the forecasted financial information to (1) historical results, (2) internal communications to management and the Board of Directors, (3) reporting units’ backlog, and (4) forecasted financial information included in the Company’s press releases, as well as analyst and industry reports of the Company and companies in its peer group.

•We considered the impact of circumstances affecting the industry including, but not limited to, changes in the legal and business environment.

•With the assistance of our fair value specialists, we evaluated the WACC and discount rates, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates of the discount rates and comparing those to the WACC and discount rates selected by management.

•With the assistance of our fair value specialists, we evaluated the industry-comparable multiples, including testing the underlying source information and mathematical accuracy of the calculations, the acceptability of the selected companies within the Company’s peer group, and comparing the multiples selected by management to companies in the engineering and construction industry.

•We evaluated the selected industry-comparable multiples by comparing to those used in the prior year, those used in the Civil reporting unit and to current facts and circumstances affecting the Civil reporting unit.

/s/ Deloitte & Touche LLP

Los Angeles, CA

February 24, 2021

We have served as the Company's auditor since 2002.

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CONSOLIDATED STATEMENTS OFOPERATIONS

Year Ended December 31,

(in thousands, except per common share amounts) 2020 2019 2018

Goodwill impairment — (379,863) —

LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 43,943 27,465 14,345

BASIC EARNINGS (LOSS) PER COMMON SHARE $ 2.14 $ (7.72) $ 1.67

DILUTED EARNINGS (LOSS) PER COMMON SHARE $ 2.12 $ (7.72) $ 1.66

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Year Ended December 31,

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:

Defined benefit pension plan adjustments (6,261) 844 771

Foreign currency translation adjustments 279 1,337 (2,945)

Unrealized gain (loss) in fair value of investments 1,571 1,561 (778)

TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX (4,411) 3,742 (2,952)

The accompanying notes are an integral part of these consolidated financial statements.

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TUTOR PERINI CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of December 31,

(in thousands, except share and per share amounts) 2020 2019

ASSETS

CURRENT ASSETS:

PROPERTY AND EQUIPMENT:

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

COMMITMENTS AND CONTINGENCIES (Note 8)

EQUITY

Stockholders' equity:

Preferred stock – authorized 1,000,000 shares ($1 par value), none issued — —

Accumulated other comprehensive loss (46,741) (42,100)

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,

Cash Flows from Operating Activities:

Goodwill impairment — 379,863 —

Change in debt discounts and deferred debt issuance costs 20,153 13,207 12,072

Gain on remeasurement of investment in joint venture — (37,792) —

(Gain) loss on sale of property and equipment (1,673) (4,688) 402

Cash Flows from Investing Activities:

Business acquisition, cash balance acquired net of cash paid — 6,607 —

Cash Flows from Financing Activities:

Business acquisition related payment — — (15,951)

Cash payments related to share-based compensation (1,397) (2,363) (2,671)

Contributions from noncontrolling interests 3,000 9,813 3,797

Debt issuance, extinguishment and modification costs (11,194) (504) —

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Cumulative effect of accounting change — — (3,762) — (1,714) (5,476)

Contributions from noncontrolling interests — — — — 3,797 3,797

Distributions to noncontrolling interests — — — — (29,000) (29,000)

Contributions from noncontrolling interests — — — — 9,813 9,813

Distributions to noncontrolling interests — — — — (46,500) (46,500)

Other comprehensive income (loss) — — — (4,641) 230 (4,411)

Contributions from noncontrolling interests — — — — 3,000 3,000

Distributions to noncontrolling interests — — — — (48,467) (48,467)

The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying consolidated financial statements have been prepared in compliance with generally accepted accounting principles in the United States (“GAAP”) as codified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). Certain amounts in the notes to the consolidated financial statements of prior years have been reclassified to conform to the current year presentation.

(b) Principles of Consolidation

The consolidated financial statements include the accounts of Tutor Perini Corporation and its wholly owned subsidiaries (the “Company”). The Company occasionally forms joint ventures with unrelated third parties for the execution of single contracts or projects. The Company assesses its joint ventures to determine if they meet the qualifications of a variable interest entity (“VIE”) in accordance with ASC 810, Consolidation (“ASC 810”). If a joint venture is a VIE and the Company is the primary beneficiary, the joint venture is fully consolidated (See Note 13). If a joint venture is not a VIE, it may be consolidated under the voting interest method if the Company holds a controlling financial interest in the joint venture. The Company is considered to hold a controlling financial interest when it is able to exercise control over the joint venture’s operating and financial decisions. For construction joint ventures that do not need to be consolidated, the Company accounts for its interest in the joint ventures using the proportionate consolidation method, whereby the Company’s proportionate share of the joint ventures’ assets, liabilities, revenue and cost of operations are included in the appropriate classifications in the Company’s consolidated financial statements. Intercompany balances and transactions have been eliminated.

(c) Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts. These estimates are based on information available through the date of the issuance of the financial statements; therefore, actual results could differ from those estimates.

(d) Revenues

Revenue Recognition

The Company derives revenue from long-term construction contracts with public and private customers primarily in the United States and its territories and in certain other international locations. The Company’s construction contracts are generally each accounted for as a single unit of account (i.e., as a single performance obligation).

Throughout the execution of construction contracts, the Company and its affiliated entities recognize revenue with the continuous transfer of control to the customer. The customer typically controls the asset under construction by either contractual termination clauses or by the Company’s rights to payment for work already performed on the asset under construction that does not have an alternative use for the Company.

Because control transfers over time, revenue is recognized to the extent of progress towards completion of the performance obligations. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services provided. The Company generally uses the cost-to-cost method for its contracts, which measures progress towards completion for each performance obligation based on the ratio of costs incurred to date to the total estimated costs at completion for the respective performance obligation. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Revenue, including estimated fees or profits, is recorded proportionately as costs are incurred. Cost of operations includes labor, materials, subcontractor costs, and other direct and indirect costs, including depreciation and amortization.

Due to the nature of the work required to be performed on many of the Company’s performance obligations, estimating total revenue and cost at completion is complex, subject to many variables and requires significant judgment. Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration, including the impact of change orders, claims, contract disputes and the achievement of contractual performance criteria, and award or other incentive fees are made during the contract performance period. The Company estimates variable consideration at the most likely amount it expects to receive. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to management. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of such cost is probable and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements described above for variable consideration have been satisfied.

Changes in Estimates on Construction Contracts

The Company’s estimates of contract revenue and cost are highly detailed and many factors change during a contract performance period that result in a change to contract profitability. These factors include, but are not limited to, differing site conditions; availability of skilled contract labor; performance of major material suppliers and subcontractors; on-going subcontractor negotiations and buyout provisions; unusual weather conditions; changes in the timing of scheduled work; change orders; accuracy of the original bid estimate; changes in estimated labor productivity and costs based on experience to date; achievement of incentive-based income targets; and the expected, or actual, resolution terms for claims. The factors that cause changes in estimates vary depending on the maturation of the project within its lifecycle. For example, in the ramp-up phase, these factors typically consist of revisions in anticipated project costs and during the peak and closeout phases, these factors include the impact of change orders and claims, as well as additional revisions in remaining anticipated project costs. Generally, if the contract is at an early stage of completion, the current period impact is smaller than if the same change in estimate is made to the contract at a later stage of completion. Management evaluates changes in estimates on a contract-by-contract basis and discloses significant changes, if material, in the Notes to Consolidated Financial Statements. The cumulative catch-up method is used to account for revisions in estimates.

(e) Depreciation of Property and Equipment and Amortization of Long-Lived Intangible Assets

Property and equipment and long-lived intangible assets are generally depreciated or amortized on a straight-line basis over their estimated useful lives ranging from three to forty years.

(f) Recoverability of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever circumstances indicate that the future cash flows generated by the assets might be less than the assets’ net carrying value. In such circumstances, an impairment loss will be recognized by the amount the assets’ net carrying value exceeds their fair value.

(g) Recoverability of Goodwill

The Company tests goodwill for impairment annually as of October 1 for each reporting unit and between annual tests if events occur or circumstances change which suggest that goodwill should be reevaluated. Such events or circumstances include significant changes in legal factors and business climate, recent losses at a reporting unit, and industry trends, among other factors. The Civil, Building and Specialty Contractors segments each represent a reporting unit, and the Civil reporting unit carried the remaining goodwill balance at December 31, 2020 as a result of the $379.9 million impairment loss recognized in 2019. The Company performs its annual quantitative impairment assessment during the fourth quarter of each year using a weighted average of an income and a market approach. These approaches utilize various valuation assumptions, and small changes to the assumptions could have a significant impact on the concluded fair value. The income approach is based on estimated present value of future cash flows for each reporting unit carrying a goodwill balance. The market approach is based on assumptions about how market data relates to each reporting unit carrying a goodwill balance. The weighting of these two approaches is based on their individual correlation to the economics of each reporting unit carrying a goodwill balance. The annual quantitative assessment performed in the fourth quarter of 2020 resulted in an estimated fair value that exceeded the net book value of the Civil reporting unit; therefore, no impairment charge was necessary.

(h) Recoverability of Non-Amortizable Trade Names

Certain trade names have an estimated indefinite life and are not amortized to earnings, but instead are reviewed for impairment annually, or more often if events occur or circumstances change which suggest that the non-amortizable trade names should be reevaluated. The Company performs its annual quantitative impairment assessment during the fourth quarter of each year using an income approach (relief from royalty method). The assessment performed in the fourth quarter of 2020 resulted in an estimated fair value for the non-amortizable trade names that exceeded their respective net book values; therefore, no impairment charge was necessary.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(i) Income Taxes

Deferred income tax assets and liabilities are recognized for the effects of temporary differences between the financial statement carrying amounts and the income tax basis of assets and liabilities using tax rates expected to be in effect when such differences reverse. Income tax positions must meet a more-likely-than-not threshold to be recognized. The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision.

(j) Earnings Per Common Share (EPS)

Basic EPS and diluted EPS are calculated by dividing net income attributable to Tutor Perini Corporation by the following: for basic EPS, the weighted-average number of common shares outstanding during the period; and for diluted EPS, the sum of the weighted-average number of both outstanding common shares and potentially dilutive securities, which for the Company can include restricted stock units, unexercised stock options and the Convertible Notes, as defined in Note 7. In accordance with ASC 260, Earnings Per Share, the settlement of the principal amount of the Convertible Notes has no impact on diluted EPS because the Company has the intent and ability to settle the principal amount in cash. See Note 7 for further discussion of the Convertible Notes. The Company calculates the effect of the potentially dilutive restricted stock units and stock options using the treasury stock method.

Year Ended December 31,

Effect of dilutive restricted stock units and stock options 421 — 349

Net income (loss) attributable to Tutor Perini Corporation per common share:

Anti-dilutive securities not included above 1,862 3,640 2,670

For the year ended December 31, 2019, all outstanding restricted stock units and stock options were excluded from the calculation of weighted-average diluted shares outstanding due to the net loss for the period.

(k) Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the amounts shown in the Consolidated Statements of Cash Flows:

As of December 31,

Total cash, cash equivalents and restricted cash $ 451,852 $ 202,101

Cash equivalents include short-term, highly liquid investments with maturities of three months or less when acquired. Cash and cash equivalents consist of amounts available for the Company’s general purposes, the Company’s proportionate share of cash held by the Company’s unconsolidated joint ventures and 100% of amounts held by the Company’s consolidated joint ventures. In both cases, cash held by joint ventures is available only for joint venture-related uses, including future distributions to joint venture partners.

As of December 31, 2020, restricted cash consists primarily of $69.9 million held to repay the outstanding principal balance of Convertible Notes described in more detail in Note 7. Restricted cash also includes amounts held as collateral to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(l) Restricted Investments

The Company has restricted investments primarily held as collateral to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit. Restricted investments are primarily comprised of investments in U.S. government agency securities and corporate debt securities that are rated A3 or better.

(m) Share-Based Compensation

The Company’s long-term incentive plans allow the Company to grant share-based compensation awards in a variety of forms, including restricted and unrestricted stock units and stock options. Restricted stock units and stock options generally vest subject to service and/or performance requirements, with related compensation expense equal to the fair value of the award on the date of grant and recognized on a straight-line basis over the requisite period. The Company may grant awards that require liability classification and are remeasured at fair value at the end of each reporting period with the change in fair value recognized as compensation cost.

For share-based awards that have a service requirement, the Company accounts for forfeitures upon occurrence, rather than estimating the probability of forfeiture at the date of grant. Accordingly, the Company recognizes the full grant-date fair value of these awards on a straight-line basis throughout the requisite service period, reversing any expense if, and only if, there is a forfeiture.

For share-based awards that have a performance-based vesting requirement, the Company evaluates the probability of achieving the performance criteria throughout the performance period, and will adjust share-based compensation expense if it estimates that the achievement of the performance criteria is not probable. Certain performance-based awards contain market condition components and are valued on the date of grant using a Monte Carlo simulation model. The fair value of such awards is expensed ratably over the performance period and is not adjusted for actual achievement.

(n) Insurance Liabilities

The Company typically utilizes third-party insurance coverage subject to varying deductible levels with aggregate caps on losses retained. The Company assumes the risk for the amount of the deductible portion of the losses and liabilities primarily associated with workers’ compensation and general liability coverage. In addition, on certain projects, the Company assumes the risk for the amount of the deductible portion of losses that arise from any subcontractor defaults. Losses are accrued based upon the Company’s estimates of the aggregate liability for claims incurred using historical experience and certain actuarial assumptions followed in the insurance industry. The estimate of insurance liability within the deductible limits includes an estimate of incurred but not reported claims based on data compiled from historical experience.

(o) Other Comprehensive Income (Loss)

ASC 220, Comprehensive Income, establishes standards for reporting comprehensive income and its components in the consolidated financial statements. The Company reports the change in pension benefit plan assets/liabilities, cumulative foreign currency translation, and change in fair value of investments as components of accumulated other comprehensive income (loss) (“AOCI”).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of other comprehensive income (loss) and the related tax effects for the years ended December 31, 2020, 2019 and 2018 were as follows:

Year Ended December 31,

Other comprehensive income (loss):

________________________________________________________________________________________

(a)The only component of other comprehensive income (loss) attributable to noncontrolling interests is foreign currency translation.

The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation during the years ended December 31, 2020, 2019 and 2018 were as follows:

Attributable to Tutor Perini Corporation:

Other comprehensive loss before reclassifications (695) (2,724) (835) (4,254)

Other comprehensive income (loss) before reclassifications (539) 944 1,621 2,026

The significant items reclassified out of AOCI and the corresponding location and impact on the Consolidated Statements of Operations during the years ended December 31, 2020, 2019 and 2018 are as follows:

Location in Consolidated Year Ended December 31,

Component of AOCI:

Income tax benefit Income tax expense (benefit) (675) (550) (586)

Income tax expense (benefit) Income tax expense (benefit) 66 16 (15)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(p) Recent Accounting Pronouncements

In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide temporary optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions to ease the potential accounting and financial reporting burden associated with transitioning away from reference rates that are expected to be discontinued, including the London Interbank Offered Rate (“LIBOR”). ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022. The adoption of the new standard has not had and is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, and issued subsequent amendments to the initial guidance within ASU 2019-04 and ASU 2019-05 (collectively, “ASU 2016-13”). The amendments in ASU 2016-13 replace the incurred loss impairment methodology with the current expected credit loss model, which requires consideration of a broader range of reasonable and supportable information to estimate credit losses. The Company adopted this ASU effective January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), as amended and supplemented by subsequent ASUs (collectively, “ASC 842”). The Company adopted this ASU effective January 1, 2019 using the optional transition method. Under this method, financial results reported in periods prior to 2019 are unchanged. As such, the 2018 comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

The following recent accounting pronouncements require implementation in future periods.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The amendments in ASU 2020-06 simplify accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted EPS and the treasury stock method will no longer be available. ASU 2020-06 is effective for interim and annual reporting periods beginning after December 15, 2021, with early adoption permitted. The Company does not expect to early adopt the new standard and does not expect it to have an impact on the Company's financial position, results of operations or cash flows.

In December 2019, the FASB issued ASU 2019-12,Simplifying the Accounting for Income Taxes(“ASU 2019-12”), modifying ASC 740, Income Taxes (“ASC 740”). The amendments in ASU 2019-12, among other things, remove certain exceptions to the general principles in ASC 740 and seek more consistent application by clarifying and amending the existing guidance. ASU 2019-12 is effective for interim and annual reporting periods beginning after December 15, 2020. The Company is currently evaluating the new standard, which is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Consolidated Statements of Cash Flows

Below are the changes in other components of working capital, net of balances related to incremental interest acquired in a Civil segment joint venture during 2019 (see Note 12), as shown in the Consolidated Statements of Cash Flows, the supplemental disclosure of cash paid for interest and income taxes and the supplemental disclosure of non-cash investing activities:

Year Ended December 31,

(Increase) Decrease in:

(Decrease) Increase in:

Cash paid during the year for:

Supplemental disclosure of non-cash investing activities:

Real property acquired in settlement of a receivable $ 11,660 $ — $ —

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Revenue

Disaggregation of Revenue

The following tables disaggregate revenue by end market, customer type and contract type, which the Company believes best depict how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors for the years ended December 31, 2020, 2019 and 2018.

Year Ended December 31,

Civil segment revenue by end market:

Year Ended December 31,

Building segment revenue by end market:

Year Ended December 31,

Specialty Contractors segment revenue by end market:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in thousands) Civil Building SpecialtyContractors Total

Revenue by customer type:

(in thousands) Civil Building SpecialtyContractors Total

Revenue by customer type:

(in thousands) Civil Building SpecialtyContractors Total

Revenue by customer type:

State and local agencies. The Company’s state and local government customers include state transportation departments, metropolitan authorities, cities, municipal agencies, school districts and public universities. Services provided to state and local customers are primarily pursuant to contracts awarded through competitive bidding processes. Construction services for state and local government customers have included mass-transit systems, tunnels, bridges, highways, judicial and correctional facilities, schools and dormitories, health care facilities, convention centers, parking structures and other municipal buildings. The vast majority of the Company’s civil contracting and building construction services are provided in locations throughout the United States and its territories.

Federal agencies. The Company’s federal government customers include the U.S. State Department, the U.S. Navy, the U.S. Army Corps of Engineers, the U.S. Air Force and the National Park Service. Services provided to federal agencies are typically pursuant to competitively bid contracts for specific or multi-year assignments that involve new construction or infrastructure repairs or improvements. A portion of revenue from federal agencies is derived from projects in overseas locations.

Private owners. The Company’s private owners (i.e., customers) include real estate developers, health care companies, technology companies, hospitality and gaming resort owners, Native American sovereign nations, public corporations and private universities. Services are provided to private customers through negotiated contract arrangements, as well as through competitive bids.

Most federal, state and local government contracts contain provisions that permit the termination of contracts, in whole or in part, for the convenience of government customers, among other reasons.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in thousands) Civil Building SpecialtyContractors Total

Revenue by contract type:

(in thousands) Civil Building SpecialtyContractors Total

Revenue by contract type:

(in thousands) Civil Building SpecialtyContractors Total

Revenue by contract type:

Fixed price. Fixed price or lump sum contracts are most commonly used for projects in the Civil and Specialty Contractors segments and generally commit the Company to provide all of the resources required to complete a project for a fixed sum. Usually, fixed price contracts transfer more risk to the Company, but offer the opportunity for greater profits. Billings on fixed price contracts are typically based on estimated progress against predetermined contractual milestones.

Guaranteed maximum price (“GMP”). GMP contracts provide for a cost plus fee arrangement up to a maximum agreed upon price. These contracts place risks on the Company for amounts in excess of the GMP, but may permit an opportunity for greater profits than under cost plus fee contracts through sharing agreements with the owner on any cost savings that may be realized. Services provided by our Building segment to various private customers are often performed under GMP contracts. Billings on GMP contracts typically occur on a monthly basis and are based on actual costs incurred plus a negotiated margin.

Unit price. Unit price contracts are most prevalent for projects in the Civil and Specialty Contractors segments and generally commit the Company to provide an estimated or undetermined number of units or components that comprise a project at a fixed price per unit. This approach shifts the risk of estimating the quantity of units required to the project owner, but the risk of increased cost per unit is borne by the Company, unless otherwise allowed for in the contract. Billings on unit price contracts typically occur on a monthly basis and are based on actual quantity of work performed or completed during the billing period.

Cost plus fee. Cost plus fee contracts are used for many projects in the Building and Specialty Contractors segments. Cost plus fee contracts include cost plus fixed fee contracts and cost plus award fee contracts. Cost plus fixed fee contracts provide for reimbursement of approved project costs plus a fixed fee. Cost plus award fee contracts provide for reimbursement of the project costs plus a base fee, as well as an incentive fee based on cost and/or schedule performance. Cost plus fee contracts serve to minimize the Company’s financial risk, but may also limit profits. Billings on cost plus fee contracts typically occur on a monthly basis based on actual costs incurred plus a negotiated margin.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Changes in Contract Estimates that Impact Revenue

Changes to the total estimated contract revenue or cost for a given project, either due to unexpected events or revisions to management’s initial estimates, are recognized in the period in which they are determined. Revenue was negatively impacted during the year ended December 31, 2020 related to performance obligations satisfied (or partially satisfied) in prior periods by a net $77.0 million for various projects. Revenue was negatively impacted during the year ended December 31, 2019 related to performance obligations satisfied (or partially satisfied) in prior periods by a net $177.5 million for various projects, including a $123.9 million revenue impact that resulted from the charge related to the Alaskan Way Viaduct (SR 99) Matter discussed in Note 8. Revenue was positively impacted during the year ended December 31, 2018 related to performance obligations satisfied (or partially satisfied) in prior periods by a net $19.4 million for various projects.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and exclude unexercised contract options. As of December 31, 2020, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $4.8 billion, $1.5 billion and $1.8 billion for the Civil, Building and Specialty Contractors segments, respectively. As of December 31, 2019, the aggregate amounts of the transaction prices allocated to the remaining performance obligations of the Company’s construction contracts were $5.2 billion, $2.2 billion and $2.2 billion for the Civil, Building and Specialty Contractors segments, respectively. The Company typically recognizes revenue on Civil segment projects over a period of three to five years, whereas for projects in the Building and Specialty Contractors segments, the Company typically recognizes revenue over a period of one to three years.

4. Contract Assets and Liabilities

The Company classifies contract assets and liabilities that may be settled beyond one year from the balance sheet date as current, consistent with the length of time of the Company’s project operating cycle.

Contract assets include amounts due under retainage provisions, costs and estimated earnings in excess of billings and capitalized contract costs. The amounts as included on the Consolidated Balance Sheets consisted of the following:

As of December 31,

Costs and estimated earnings in excess of billings:

Total costs and estimated earnings in excess of billings 1,236,734 1,123,544

Retainage receivable represents amounts invoiced to customers where payments have been partially withheld pending the completion of certain milestones, satisfaction of other contractual conditions or the completion of the project. Retainage agreements vary from project to project and balances could be outstanding for several months or years depending on a number of circumstances, such as contract-specific terms, project performance and other variables that may arise as the Company makes progress toward completion. As of December 31, 2020, the amount of retainage receivable estimated by management to be collected beyond one year is approximately 38% of the balance.

Costs and estimated earnings in excess of billings represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date and are classified as a current asset. Costs and estimated earnings in excess of billings result when either: (1) the appropriate contract revenue amount has been recognized over time in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), but a portion of the revenue recorded cannot be billed currently due to the billing terms defined in the contract, or (2) costs are incurred related to certain claims and unapproved change orders. Claims occur when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders occur when a change in the scope of work results in additional work being performed before the parties have agreed on the corresponding change in the contract price. The Company routinely estimates recovery related to claims and unapproved change orders as a form of variable consideration at the most likely amount it expects to receive and to

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Claims and unapproved change orders are billable upon the agreement and resolution between the contractual parties and after the execution of contractual amendments. Increases in claims and unapproved change orders typically result from costs being incurred against existing or new positions; decreases normally result from resolutions and subsequent billings. As discussed in Note 8, the resolution of these claims and unapproved change orders may require litigation or other forms of dispute resolution proceedings. Other unbilled costs and profits are billable in accordance with the billing terms of each of the existing contractual arrangements and, as such, the timing of contract billing cycles can cause fluctuations in the balance of unbilled costs and profits. Ultimate resolution of other unbilled costs and profits typically involves incremental progress toward contractual requirements or milestones. The amount of costs and estimated earnings in excess of billings as of December 31, 2020 estimated by management to be collected beyond one year is approximately $756.2 million.

Capitalized contract costs primarily represent costs to fulfill a contract that (1) directly relate to an existing or anticipated contract, (2) generate or enhance resources that will be used in satisfying performance obligations in the future and (3) are expected to be recovered through the contract, and are included in other current assets. Capitalized contract costs are generally expensed to the associated contract over the period of anticipated use on the project. During the years ended December 31, 2020, 2019 and 2018, $46.7 million, $33.8 million and $16.3 million, respectively, of previously capitalized contract costs were amortized and recognized as expense on the related contracts.

Contract liabilities include amounts owed under retainage provisions and billings in excess of costs and estimated earnings. The amount as reported on the Consolidated Balance Sheets consisted of the following:

As of December 31,

Billings in excess of costs and estimated earnings 839,222 844,389

Retainage payable represents amounts invoiced to the Company by subcontractors where payments have been partially withheld pending the completion of certain milestones, other contractual conditions or upon the completion of the project. Generally, retainage payable is not remitted to subcontractors until the associated retainage receivable from customers is collected. As of December 31, 2020, the amount of retainage payable estimated by management to be remitted beyond one year is approximately 38% of the balance.

Billings in excess of costs and estimated earnings represent the excess of contract billings to date over the amount of contract costs and profits (or contract revenue) recognized to date. The balance may fluctuate depending on the timing of contract billings and the recognition of contract revenue. Revenue recognized during the years ended December 31, 2020, 2019 and 2018 and included in the opening billings in excess of costs and estimated earnings balances for each period totaled $690.7 million, $479.6 million and $382.7 million, respectively.

5. Income Taxes

Income (loss) before taxes is summarized as follows:

Year Ended December 31,

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