EDGAR 10-K Filing

Company CIK: 77543
Filing Year: 2021
Filename: 77543_10-K_2021_0000077543-21-000020.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
General
Tutor Perini Corporation (together with its consolidated subsidiaries, “Tutor Perini,” the “Company,” “we,” “us,” and “our,” unless the context indicates otherwise) is a leading construction company, based on revenue as ranked by Engineering News-Record (“ENR”), offering diversified general contracting, construction management and design-build services to private customers and public agencies throughout the world. The Company was formed as a result of the 2008 merger between Tutor-Saliba Corporation and Perini Corporation (“Perini”) and our legacy dates back to 1894, when Perini's predecessor businesses began providing construction services. Our corporate headquarters are in Los Angeles (Sylmar), California, and we have various other principal offices throughout the United States and its territories (see Item 2. Properties for a listing of our major facilities). Our common stock is listed on the New York Stock Exchange under the symbol “TPC.” We are incorporated in the Commonwealth of Massachusetts.
We have established a strong reputation within our markets for executing large, complex projects on time and within budget while adhering to strict quality control measures. We offer general contracting, pre-construction planning and comprehensive project management services, including the planning and scheduling of the manpower, equipment, materials and subcontractors required for a project. We also offer self-performed construction services including site work; concrete forming and placement; steel erection; electrical; mechanical; plumbing; heating, ventilation and air conditioning (HVAC); and fire protection. During 2020, we performed work on approximately 1,200 construction projects.
In 2020, ENR ranked Tutor Perini as the 14th largest domestic contractor. We are recognized as one of the leading civil contractors in the United States, as evidenced by our performance on several of the country’s largest mass-transit and transportation projects, such as Newark Liberty International Airport Terminal One (“Newark Airport Terminal One”), the East Side Access project in New York City, the California High-Speed Rail System, the Alaskan Way Viaduct Replacement (SR 99) project in Seattle, major portions of the Red Line and Purple Line segments of the Los Angeles Metro subway system, and the San Francisco Central Subway extension to Chinatown. We are also recognized as one of the leading building contractors in the United States, as evidenced by our performance on several of the country’s largest building development projects, including CityCenter and the Cosmopolitan Resort and Casino in Las Vegas, and Hudson Yards in New York City.
Our strengths and expertise in the construction of civil and building infrastructure projects have been augmented by our vertical integration capabilities, which we established more than 10 years ago through the acquisitions of various business entities specializing in electrical, mechanical, plumbing, HVAC and other services that enhanced our market capabilities and expanded our geographic presence. Our vertical integration is a competitive advantage that allows us to self-perform a greater amount of work than our competitors. It also increases our competitiveness in bidding and our efficiency in managing and executing large, complex projects, and provides us with significant cross-selling opportunities across a broad geographic footprint.
Business Segment Overview
Our business is conducted through three segments: Civil, Building and Specialty Contractors.
Civil Segment
Our Civil segment specializes in public works construction and the replacement and reconstruction of infrastructure across several major geographic regions of the United States. Our civil contracting services include construction and rehabilitation of highways, bridges, tunnels, mass-transit systems, military defense facilities, and water management and wastewater treatment facilities.
The Civil segment is comprised of the heavy civil construction operations of our predecessors, Tutor-Saliba Corporation, its subsidiary Black Construction, and Perini, as well as our acquired companies, Frontier-Kemper, Lunda Construction and Becho. Our heavy civil units operate primarily on the West and East Coasts of the United States and are engaged in a variety of large mass-transit, tunneling, bridge and highway projects. Black Construction is the largest contractor in Guam and provides a variety of heavy civil, building, mechanical and electrical construction services throughout the Western Pacific region and in other strategic military locations. Frontier-Kemper is a heavy civil contractor engaged in the construction of tunnels for highways, railroads, subways and rapid transit systems; the construction of shafts and other facilities for water supply, wastewater transport and hydroelectric projects; and the development and equipping of mines with innovative hoisting, elevator and vertical conveyance systems. Lunda Construction is a heavy civil contractor specializing in the construction, rehabilitation and maintenance of bridges, railroads and other civil structures throughout the United States. Becho is engaged in drilling, foundation and excavation support for shoring, bridges, piers, roads and highway projects, primarily in the southwestern United States.
In its 2020 rankings, ENR ranked us as the nation’s second largest contractor in the transportation market and third largest domestic heavy contractor.
Our Civil segment’s customers primarily award contracts through one of two methods: the traditional public “competitive bid” method, in which price is the major determining factor, or through a best value proposal, where contracts are awarded based on a combination of technical qualifications, proposed project team, schedule, past performance on similar projects and price.
Traditionally, our Civil segment’s customers require each contractor to pre-qualify for construction business by meeting criteria that include technical capabilities and financial strength. Our financial strength, outstanding record of performance on challenging civil works projects, and vertical integration capabilities often enable us to pre-qualify for projects in situations where smaller, less diversified contractors are unable to meet the qualification requirements. We believe this is a competitive advantage that allows us to self-perform a greater amount of work and makes us an ideal lead contractor for the largest, most complex infrastructure projects and on prestigious design-build, design-build-operate-maintain and public-private partnership projects.
We believe the Civil segment provides us with significant opportunities for growth due to the condition of existing infrastructure coupled with large government funding sources dedicated to the replacement and reconstruction of aging U.S. infrastructure. In addition, infrastructure programs generally garner popular, bipartisan support from the public and elected officials due to their favorable long-term economic impacts, including significant job creation. Funding for major civil infrastructure projects is typically provided through a combination of one or more of the following: local, regional, state and federal loans and grants; other direct allocations sourced through tax revenue; bonds; user fees; and, for certain projects, private capital.
We have been active in civil construction since 1894 and believe we have a particular expertise in large, complex civil construction projects. We have completed, or are currently working on, some of the most significant civil construction projects in the United States. For example, we are currently working on Newark Airport Terminal One, the East Side Access project in New York City, the first phase of the California High-Speed Rail project, the Purple Line Segments 2 and 3 expansion projects in Los Angeles, the San Francisco Central Subway extension to Chinatown and the Minneapolis Southwest Light Rail Transit project. We have also completed major projects such as the Alaskan Way Viaduct Replacement (SR 99) in Seattle; the platform over the eastern rail yard at Hudson Yards in New York City; the rehabilitation of the Verrazano-Narrows Bridge in New York; and multiple runway reconstruction projects at the John F. Kennedy International Airport in New York, Los Angeles International Airport and Fort Lauderdale-Hollywood International Airport, among others.
Building Segment
Our Building segment has significant experience providing services to a number of specialized building markets for private and public works customers, including hospitality and gaming, transportation, health care, commercial offices, government facilities, sports and entertainment, education, correctional facilities, biotech, pharmaceutical, industrial and high-tech. We believe the success of the Building segment results from our proven ability to manage and perform large, complex projects with aggressive fast-track schedules, elaborate designs, and advanced mechanical, electrical and life safety systems, while providing accurate budgeting and strict quality control. Although price is a key competitive factor, we believe our strong reputation, long-standing customer relationships and significant level of repeat and referral business have enabled us to achieve a leading position in the marketplace.
In its 2020 rankings, ENR ranked us as the 19th largest domestic building contractor. We are a recognized leader in the hospitality and gaming market, specializing in the construction of high-end resorts and casinos. We work with hotel operators, Native American tribal councils, developers and architectural firms to provide diversified construction services to meet the challenges of new construction and renovation of hotel and resort properties. We believe that our reputation for completing projects on time is a significant competitive advantage in this market, as any delay in project completion could result in significant loss of revenue for the customer.
The Building segment is comprised of several operating units that provide general contracting, design-build, preconstruction and construction services in various regions of the United States. Tutor Perini Building Corp. focuses on large, complex building projects nationwide, including significant projects in the hospitality and gaming, commercial office, education, government facilities, and multi-unit residential markets. Rudolph and Sletten focuses on large, complex projects in California in the health care, commercial office, technology, industrial, education, and government facilities markets. Roy Anderson Corp. provides general contracting services, including major disaster response and reconstruction support, to public and private customers primarily throughout the southeastern United States. Perini Management Services provides diversified construction and design-build services internationally to U.S. government agencies, as well as to surety companies and multi-national corporations.
We have recently completed, or are currently working on, various large private and public building projects across a wide array of end markets. Specific projects include Newark Airport Terminal One; three large corporate office buildings in northern California for distinct confidential technology customers; a commercial office tower at 10 Hudson Yards and a multi-unit residential tower at 15 Hudson Yards in New York City; the El Camino Hospital Integrated Medical Office Building in El Camino, California; Kaiser Hospital buildings in San Leandro, Redwood City and Roseville, California; the Choctaw Casino and Resort in Durant, Oklahoma; the Pechanga Resort and Casino expansion in Temecula, California; the O Street Government Office Building in Sacramento, California; and courthouses in San Bernardino and San Diego, California and Broward County, Florida. As a result of our reputation and track record, we were previously awarded and completed contracts for several marquee hospitality and gaming projects in Las Vegas, including CityCenter, the Cosmopolitan Resort and Casino and the Wynn Encore Hotel. These projects span a wide array of building end markets and illustrate our Building segment’s résumé of successfully completed large-scale public and private projects.
Specialty Contractors Segment
Our Specialty Contractors segment specializes in electrical, mechanical, plumbing, HVAC, fire protection systems and pneumatically placed concrete for a full range of civil and building construction projects in the industrial, commercial, hospitality and gaming, and mass-transit end markets. This segment provides unique strengths and vertically integrated service capabilities that position us as a full-service contractor with greater control over project bids and costs, scheduled work, project delivery and risk management. The majority of work performed by the Specialty Contractors segment is contracted directly with state and local municipal agencies, real estate developers, school districts and other commercial and industrial customers. A significant portion of the segment's work has been, and is expected to continue to be, performed for our Civil and Building segments.
The Specialty Contractors segment is comprised of several operating units that provide unique services in various regions of the United States. Five Star Electric has established itself as an industry leader and is one of the largest electrical contractors in New York City. Five Star Electric provides construction services, including power, lighting, fire alarm, security, telecommunications, low voltage and wireless systems to both the public and private sectors. These services are provided across end markets that include multi-unit residential, hotels, commercial offices, industrial, mass transit, education, retail, sports and entertainment, health care and water treatment. Fisk Electric (“Fisk”) covers many of the major commercial, transportation and industrial electrical construction markets in California and the southern United States, with the ability to cover other attractive markets nationwide. Fisk’s expertise is in the design and development of electrical and technology systems for major projects spanning a broad variety of project types, including commercial office buildings, sports arenas, hospitals, research laboratories,
hotels and casinos, convention centers, manufacturing plants, refineries, and water and wastewater treatment facilities. WDF, Nagelbush and Desert Mechanical each provide mechanical, plumbing, HVAC and fire protection services to a range of customers in a wide variety of markets, including transportation, commercial/industrial, schools and universities and residential. WDF is one of the largest mechanical contractors serving the New York City metropolitan region. Nagelbush operates primarily in Florida and Desert Mechanical operates primarily in the western United States. Superior Gunite specializes in pneumatically placed structural concrete utilized in infrastructure projects nationwide, such as bridges, dams, tunnels and retaining walls.
Our Specialty Contractors business units have completed, or are currently working on, various portions of the East Side Access project in New York City, various projects at the World Trade Center and at Hudson Yards in New York City, and upgrades and rehabilitations at various New York City public housing facilities. The Specialty Contractors segment has also supported, or is currently supporting, several large projects in our Civil and Building segments, including the Alaskan Way Viaduct Replacement (SR 99) project in Seattle; the San Francisco Central Subway extension to Chinatown; the Purple Line Segments 2 and 3 expansion projects in Los Angeles; Newark Airport Terminal One; the California High Speed Rail project in central California; McCarran International Airport Terminal 3 in Las Vegas; and several marquee hospitality and gaming projects in Las Vegas, including CityCenter, the Cosmopolitan Resort and Casino, and the Wynn Encore Hotel.
For information regarding the breakdown of our revenue by segment, end market, customer type and contract type, see Note 3 of the Notes to Consolidated Financial Statements. In addition, financial information about geographic areas is discussed in Note 14 of the Notes to Consolidated Financial Statements.
Backlog
Backlog in our industry is a measure of the total value of work that is remaining to be performed on projects that have been awarded. We include a construction project in our backlog when a contract is awarded or when we have otherwise received written definitive notice that the project has been awarded to us and there are no remaining major uncertainties that the project will proceed (e.g., adequate funding is in place). As a result, we believe our backlog is firm, and although cancellations or scope adjustments may occur, historically they have not been material. We estimate that approximately $4 billion, or 47%, of our backlog as of December 31, 2020 will be recognized as revenue in 2021. Our backlog by segment, end market and customer type is presented in the following tables:
As of December 31,
(in thousands) 2020 2019
Backlog by business segment:
Civil $ 4,783,564 57 % $ 6,037,195 54 %
Building 1,702,305 20 % 2,790,289 25 %
Specialty Contractors 1,859,848 23 % 2,393,626 21 %
Total backlog $ 8,345,717 100 % $ 11,221,110 100 %
As of December 31,
(in thousands) 2020 2019
Civil segment backlog by end market:
Mass transit (includes certain transportation and tunneling projects) $ 3,885,275 81 % $ 4,628,664 77 %
Military defense facilities 318,389 7 % 369,647 6 %
Bridges 244,385 5 % 364,992 6 %
Water 130,274 3 % 218,517 4 %
Other 205,241 4 % 455,375 7 %
Total Civil segment backlog $ 4,783,564 100 % $ 6,037,195 100 %
As of December 31,
(in thousands) 2020 2019
Building segment backlog by end market:
Municipal and government $ 556,726 33 % $ 584,444 21 %
Commercial and industrial facilities 350,012 21 % 578,852 21 %
Hospitality and gaming 333,315 20 % 793,624 28 %
Education facilities 165,766 10 % 233,551 8 %
Mass transit (includes transportation projects) 144,019 8 % 345,462 12 %
Health care facilities 49,655 3 % 92,913 3 %
Other 102,812 5 % 161,443 7 %
Total Building segment backlog $ 1,702,305 100 % $ 2,790,289 100 %
As of December 31,
(in thousands) 2020 2019
Specialty Contractors segment backlog by end market:
Mass transit (includes certain transportation and tunneling projects) $ 1,058,479 57 % $ 1,406,047 59 %
Multi-unit residential 219,139 12 % 307,009 13 %
Water 214,717 12 % 278,788 12 %
Commercial and industrial facilities 122,687 7 % 163,921 7 %
Other 244,826 12 % 237,861 9 %
Total Specialty Contractors segment backlog $ 1,859,848 100 % $ 2,393,626 100 %
As of December 31,
2020 2019
Backlog by customer type:
State and local agencies 72 % 69 %
Private owners 20 % 25 %
Federal agencies 8 % 6 %
Total backlog 100 % 100 %
Fixed price contracts are expected to continue to represent a sizeable percentage of total backlog. The composition of backlog by type of contract for 2020 and 2019 is as follows:
As of December 31,
2020 2019
Backlog by contract type:
Fixed price 76 % 76 %
Guaranteed maximum price 11 % 11 %
Unit price 4 % 5 %
Cost plus fee and other 9 % 8 %
Total backlog 100 % 100 %
Competition
While the construction markets include numerous competitors, especially for small to mid-sized projects, much of the work that we target is for larger, more complex projects where there are typically fewer active market participants due to the greater capabilities and resources required to perform the work. In addition to domestic competitors, we have seen certain foreign competitors attempting to grow their presence in the United States over the past several years, particularly through the pursuit of large civil projects. In recent years, however, we have observed a diminished presence from some of these foreign competitors in the bidding for several of the larger U.S. project opportunities. We believe price, experience, reputation, responsiveness, customer relationships, project completion track record, schedule control, risk management and quality of work are key factors customers consider when awarding contracts.
In our Civil segment, we compete principally with large civil construction firms, including (alphabetically) Dragados USA; Fluor Corporation; Granite Construction; Kiewit Corporation; Skanska USA; Traylor Bros., Inc.; and The Walsh Group. In our Building segment, we compete with a variety of national and regional contractors, including (alphabetically) AECOM (through
its acquisitions of Tishman Construction and Hunt Construction Group); Balfour Beatty Construction; Clark Construction Group; DPR Construction; Gilbane, Inc.; Hensel Phelps Construction Co.; McCarthy Building Companies, Inc.; Skanska USA; Suffolk Construction; and Turner Construction Company. In our Specialty Contractors segment, we compete principally with various regional and local electrical, mechanical and plumbing subcontractors.
Construction Costs
If prices for materials, labor or equipment increase excessively, provisions in certain types of contracts often shift all or a major portion of any adverse impact to the customer. In our fixed price contracts, we attempt to insulate ourselves from the unfavorable effects of inflation, when possible, by incorporating escalating wage and price assumptions into our construction cost estimates, by obtaining firm fixed price quotes from major subcontractors and material suppliers, and by securing purchase commitments for materials early in the project schedule. Construction and other materials used in our construction activities are generally available locally from multiple sources and have been in adequate supply during recent years. Labor resources for our domestic projects are largely obtained through various labor unions. We have not experienced significant labor shortages in recent years, nor do we expect to in the near future, although a significant, rapid growth in our backlog may lead to situations in which labor resources become constrained. We employ expatriate and local labor in selected overseas areas.
Seasonality
We experience seasonal trends in our business. Our revenue and operating income are typically higher in the second half of the year. Our first fiscal quarter of the year is typically our lowest revenue quarter, as the harsher winter weather conditions that often occur during this period can negatively impact our ability to execute work and our productivity in parts of North America. Our revenue typically increases during the high construction seasons of the summer and fall months in the United States. Within the United States, as well as in other parts of the world, our business generally benefits from milder weather conditions during our third fiscal quarter, which allows for more productivity from our on-site construction operations. For these reasons, coupled with the number and significance of customer contracts commenced and completed during a particular period, it is not unusual for us to experience seasonal changes or fluctuations in our quarterly operating results.
Government Contracts
Most of our federal, state and local government customers can terminate, renegotiate, or modify any of their contracts with us at their election, and many of our federal government contracts are subject to renewal or extension periodically. Revenue derived from federal, state and local government customers was approximately 60% of our total revenue for each of the years ended December 31, 2020, 2019 and 2018.
Environmental, Health and Safety Regulations
Environmental, health and safety regulations and requirements materially affect our business. We are firmly committed to providing a safe and healthy work environment for our employees and to working in a manner that ensures the safety of our subcontractors, customers and the general public, as well as the protection of facilities, equipment and the environment. Compliance with Occupational Safety and Health Administration (“OSHA”) and other health and safety regulations, in particular, is essential to procure business and to attract and retain our workforce. Accordingly, we make considerable investments in our environmental, health and safety programs, and we factor costs associated with compliance into our project bids and proposals.
We provide construction and construction management services at various project sites, and sometimes perform work in and around sensitive environmental areas, such as rivers, lakes and wetlands. We also handle small quantities of hazardous materials on occasion. Significant fines, penalties and other sanctions may be imposed for non-compliance with environmental and health and safety laws and regulations, and some laws provide for joint and several strict liabilities for remediation of releases of hazardous substances.
Contaminants have been detected at some of the sites that we own and where we have worked as a contractor in the past, and we have incurred costs for the investigation and remediation of hazardous substances. However, we do not own the job sites upon which we perform our work. We have pollution liability insurance coverage for such matters, and if applicable, we seek indemnification from customers to cover the risks associated with environmental remediation. Accordingly, we believe that our environmental liabilities are not material. In addition, we continually evaluate our compliance with all applicable environmental laws and regulations, and believe that we are in substantial compliance with those laws and regulations.
Insurance and Bonding
All of our properties and equipment, as well as those of our joint ventures, are covered by insurance in amounts that we believe are consistent with our risk of loss and industry practice. Our wholly owned subsidiary, PCR Insurance Company, issues policies for default insurance for our subcontractors, automobile liability, general liability and workers’ compensation insurance, allowing us to centralize our claims and risk management functions to reduce our insurance-related costs.
As a normal part of the construction business, we are often required to provide various types of surety bonds as an additional level of security for our performance. We also require many of our higher-risk subcontractors to provide surety bonds as security for payment of subcontractors and suppliers and to guarantee their performance. As an alternative to traditional surety bonds, we also have purchased subcontractor default insurance for certain construction projects to insure against the risk of subcontractor default.
Human Capital Resources
The foundation of our continuing success as a leading construction services business is our ability to attract and retain the industry’s best talent by providing a culture of opportunity, development, accountability and empowerment. This understanding guides our approach to managing our human capital resources.
Employees. Our principal asset is our employees, many of whom have technical and professional backgrounds and undergraduate and/or advanced degrees. As of December 31, 2020, we had approximately 8,700 employees (including union employees), of which approximately 2,100 were salaried and 6,600 were hourly employees. The number of employees at any given time depends on the volume and types of active projects in progress, as well as our position within the lifecycle of those projects. We believe that we have strong relationships with our employees and that the quality and level of service that our employees deliver to our customers are among the highest in our industry.
Union Workforce. We are signatory to numerous local and regional collective bargaining agreements, both directly and through trade associations, as a union contractor. These agreements cover all necessary union crafts and are subject to various renewal dates. As of December 31, 2020, our workforce included a total of approximately 4,500 union employees. Estimated amounts for wage escalation related to the expiration of union contracts are included in our bids on various projects; accordingly, the expiration of any union contract in the next year is not expected to have any material impact on us. During the past several years, we have not experienced any significant work stoppages caused by our union employees.
Talent Recruitment, Training and Retention. Our business relies upon an adequate supply of management, supervisory and field personnel. Recruiting, training and retaining key personnel has been and will remain primary goals of our human capital initiative. Through the use of management information systems, on-the-job training and educational seminars, employees are trained to understand the importance of project execution. We place a strong emphasis on training employees in accurate and comprehensive project estimating, project management and project cost control. As is common in our industry, we experience some recurring employee turnover each year, which we believe is comparable to the industry average. Historically, we have successfully attracted and retained sufficient numbers of personnel, including union personnel, to support our operational needs. We strive to ensure a fully competent project management team that includes long-term successors to our current project leaders by investing significant resources to build strong and highly competent project managers. We regularly hire construction management and engineering staff, including interns and recent graduates, and provide them with engaging projects and development programs. On the occasion when we have a need for senior project executives, the broad professional network of our leadership team often provides strong candidates to fill those needs. We also utilize internal and external recruiting specialists to help fill our open job positions. To support retention and motivation of our top talent, we provide very competitive compensation, which may include performance incentives.
Workplace Safety. We place a strong emphasis on the safety of our employees, our customers and the public. Accordingly, we conduct extensive safety training programs that have allowed us to maintain a high safety level at our worksites. All newly hired employees that will be working at project job sites undergo an initial safety orientation, and for certain types of projects or processes we conduct specific hazard training programs. Our project supervisors regularly conduct on-site safety meetings and our safety managers make random site safety inspections and perform daily assessments. In addition, operational employees are required to complete an OSHA 30-hour training program and project-specific courses on various safety topics. Moreover, we promote a culture of safety by encouraging employees to recognize, immediately correct and report all unsafe conditions.
Available Information
Our investor website address is http://investors.tutorperini.com. In the “Financial Reports” portion of our investor website, under the subsection “SEC Filings,” you may obtain free electronic copies of our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and any amendments to these reports. These reports, and any amendments to them, are made available on our website as soon as reasonably practicable after we electronically file them with the Securities and Exchange Commission (“SEC”).

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
We are subject to a number of known and unknown risks and uncertainties that could have a material adverse effect on our operations. Set forth below, and elsewhere in this report, are descriptions of the material risks and uncertainties that could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this report and could have a material adverse effect on our financial condition, results of operations and cash flows.
Risks Related to Our Business and Operations
The novel coronavirus (“COVID-19”) pandemic has adversely impacted, and could continue to adversely impact, our business, financial condition and results of operations.
The World Health Organization declared the COVID-19 outbreak a pandemic and the U.S. Government declared a national emergency in March 2020. The COVID-19 pandemic has created volatility, uncertainty and economic disruption for the Company, our customers, subcontractors and suppliers, and the markets in which we do business. The scope and impact of the COVID-19 pandemic continues to evolve, and new strains of the COVID-19 virus have recently been discovered, including some that may have a higher degree of transmission. Extraordinary and wide-ranging actions have been taken by international, federal, state and local public health and governmental authorities to contain and combat the spread of COVID-19, including stay-at-home or shelter-in-place orders, social distancing measures and travel restrictions for individuals, orders for many businesses to cease or curtail normal operations unless their work is deemed essential or critical and, recently, the approvals of various vaccines and subsequent roll-outs of large-scale vaccination programs worldwide. Some of these vaccines, while highly effective against the original virus strain, may be less effective against some of the newer and more contagious variants.
While we have not experienced project cancellations as a result of the COVID-19 pandemic, we have experienced disruptions to our business operations as the pandemic has spread through the geographies where we do business. For example, beginning in mid-March of 2020, work on some non-essential construction projects was suspended or curtailed by certain customers, primarily in our Building and Specialty Contractors segments, though the vast majority of our projects in the Civil segment have been designated as essential business, allowing us to continue our work on those projects. In addition, we have modified certain business and workforce practices and implemented new protocols to promote social distancing and enhance health and safety measures on our projects and in our offices to conform to regulatory requirements and best practices encouraged by governmental and regulatory authorities, all of which has negatively affected our operations and resulted in increases in operating expenses. We have also experienced absenteeism due to illness, quarantine or fear by our employees or those of our subcontractors on certain projects, which has resulted in some disruption of our work. The COVID-19 pandemic's impacts to date have been primarily productivity inefficiencies due to project suspensions or absenteeism on certain projects, as well as additional costs associated with the new health and safety measures implemented in response to the pandemic. Any ongoing project suspensions, personnel absenteeism, or reduced work schedules or shifts required to comply with quarantines or other social distancing measures could continue to adversely affect our operations. In addition, as a result of COVID-19 containment efforts, we have experienced delays in certain bidding activities and also in legal proceedings and settlement discussions where we have claims against project owners for additional costs exceeding the contract price or for amounts not included in the original contract price. Consequently, our ability to resolve and recover on these types of claims has been and may continue to be delayed, which may adversely affect our liquidity and financial results. For further discussion regarding the impact of COVID-19 to our business, see Management's Discussion and Analysis of Financial Condition and Results of Operations contained in Item 7.
It remains too early to assess the full impact that the COVID-19 pandemic, and the actions taken in response to it, will have on our employees, our operating segments and practices, our customers, subcontractors and suppliers, and the regions that we serve, or on our financial condition and results of operations as a whole. The full impact depends on many factors that remain uncertain and subject to ongoing volatility, or that are not yet identifiable, and in many cases are out of our control. These factors could include, among other things: (1) the duration of the COVID-19 pandemic and the types and magnitude of adverse impacts on the U.S. and global economies; (2) the health and welfare of our employees, and those of our customers, subcontractors and suppliers; (3) evolving business and government actions in response to the pandemic, including stay-at-home measures, changes to what are considered “essential” businesses, social distancing measures, travel bans and additional health and safety requirements that we may be required to observe in order to continue working on our projects; (4) the varying impact that the pandemic may have on industries we serve and on government spending for infrastructure projects, including reduced government spending on infrastructure as a result of lower revenues from taxes, tolls and fares; (5) the response of our customers or prospective customers to the pandemic, including further delays, stoppages or terminations of existing projects or
potential new awards; (6) delays in the settlement of receivables if customers are unable to pay, fail to make timely payments, request financial concessions or if we continue to experience delays in resolving claims and disputes (e.g., further delays in court proceedings or settlement discussions); (7) limitations and higher costs associated with obtaining financing; (8) potential challenges with suppliers that could limit the availability or cost of materials; (9) potential interruptions to our information systems and technology or breaches in our data security due to increasing use of remote communications and access; and (10) the extent to which and timing of when individuals become vaccinated against COVID-19 (which would contribute to the point at which “herd immunity” may be achieved), as well as the extent to which such vaccines are effective against the various current and future virus strains. Such factors may continue to result in fewer or delayed project bidding opportunities or additional or further delays on existing projects.
Any of these events or impacts we have experienced or identified could cause or contribute to the risks and uncertainties facing the Company and our customers and could materially and adversely affect our business or portions thereof, and our financial condition and results of operations. The COVID-19 pandemic and the volatile economic conditions stemming from the pandemic, as well as reactions to future pandemics or resurgences of COVID-19, could also aggravate or heighten the risks posed by other risk factors that we have identified in this Annual Report on our Form 10-K for the year ended December 31, 2020, which in turn could materially and adversely affect our business, financial condition and results of operations. There may be other adverse consequences to our business, financial condition and results of operations from the spread of COVID-19 that are not presently known or that have not yet become apparent. As a result, we cannot assure you that if COVID-19 continues to spread, it would not have a further adverse impact on our business, financial condition and results of operations.
We are involved in a significant number of legal proceedings which, if determined unfavorable to us, could adversely affect our financial results and/or cash flows, harm our reputation and/or preclude us from bidding on future projects. We also may invest significant working capital on projects while legal proceedings are being settled.
We are involved in various lawsuits, including the legal proceedings described under Note 8 of the Notes to Consolidated Financial Statements. Litigation is inherently uncertain, and it is not possible to accurately predict what the final outcome will be of any legal proceeding. We must make certain assumptions and rely on estimates, which are inherently subject to risks and uncertainties, regarding potential outcomes of legal proceedings in order to determine an appropriate contingent liability and charge to income. Any result that is materially different from our expectations and estimates could have a material adverse effect on our financial condition, results of operations and cash flows. This may include requiring us to record an expense or reduce revenue that we previously recorded based on our expectations or estimates, requiring us to pay damages or reducing cash collections that we had expected to receive. For example, on December 13, 2019, we received an adverse jury verdict in the case related to the construction of the Alaskan Way Viaduct Replacement Project (“SR 99”) by a joint venture for which the Company holds a 45% share as a minority partner. As a result of the unexpected adverse jury verdict, we recorded a pre-tax charge of $166.8 million in 2019. Refer to the Alaskan Way Viaduct (SR 99) Matter in Note 8 of the Notes to Consolidated Financial Statements for further discussion. In addition, any adverse judgments could harm our reputation and preclude us from bidding on future projects.
We may bring claims against project owners for additional cost exceeding the contract price or for amounts not included in the original contract price. When these types of events occur and unresolved claims are pending, we may invest significant working capital in projects to cover cost overruns pending the resolution of the relevant claims. A failure to promptly recover on these types of claims could have a material adverse effect on our liquidity and financial results.
If we are unable to accurately estimate contract risks, revenue or costs, the timing of new awards, or the pace of project execution, we may incur a loss or achieve lower than anticipated profit.
Accounting for contract-related revenue and costs requires management to make significant estimates and assumptions that may change substantially throughout the project lifecycle, which has previously resulted, and in the future could result, in a material impact to our consolidated financial statements. In addition, cost overruns, including unanticipated cost increases on fixed price and guaranteed maximum price contracts, have previously resulted, and in the future may result, in lower profits or losses. Changes in laws, policies or regulations, including tariffs and taxes, have previously impacted, and in the future could impact, the prices for materials or equipment. Further, our results of operations have historically fluctuated, and may continue to fluctuate, quarterly and annually depending on when new awards occur and the commencement and progress of work on projects already awarded.
Our contracts require us to perform extra, or change order, work which can result in disputes or claims and adversely affect our working capital, profits and cash flows.
Our contracts generally require us to perform extra, or change order, work as directed by the customer even if the customer has not agreed in advance on the scope and/or price of the work to be performed. This process may result in disputes or claims over
whether the work performed is beyond the scope of work directed by the customer and/or exceeds the price the customer is willing to pay for the work performed. To the extent we do not recover our costs for this work or there are delays in the recovery of these costs, our working capital, profits and cash flows could be adversely impacted.
Our actual results could differ from the assumptions and estimates used to prepare our financial statements.
In preparing our financial statements, we are required under generally accepted accounting principles in the United States (“GAAP”) to make estimates and assumptions as of the date of the financial statements. These estimates and assumptions affect the reported values of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Areas requiring significant estimates by our management include, but are not limited to:
• recognition of contract revenue, costs, profits or losses in applying the principles of revenue accounting;
• recognition of revenue related to project incentives or awards we expect to receive;
• recognition of recoveries under contract change orders or claims;
• estimated amounts for expected project losses, warranty costs, contract closeout or other costs;
• collectability of billed and unbilled accounts receivable;
• asset valuations;
• income tax provisions and related valuation allowances;
• determination of expense and potential liabilities under pension and other post-retirement benefit programs; and
• accruals for other estimated liabilities, including litigation and insurance reserves.
Our actual business and financial results could differ from our estimates of such results, which could have a material adverse impact on our financial condition and reported results of operations.
A significant slowdown or decline in economic conditions could adversely affect our operations.
Any significant decline in economic conditions in any of the markets we serve or uncertainty regarding the economic outlook (apart from the COVID-19 related impacts discussed above) could result in a decline in demand for infrastructure projects and commercial building developments. In addition, any instability in the financial and credit markets could negatively impact our customers’ ability to pay us on a timely basis, or at all, for work on projects already under construction, could cause our customers to delay or cancel construction projects in our backlog or could create difficulties for customers to obtain adequate financing to fund new construction projects. Such consequences could have an adverse impact on our future operating results. Lastly, we are more susceptible to adverse economic conditions in New York and California, as a significant portion of our operations are concentrated in those states.
The level of federal, state and local government spending for infrastructure and other public projects could adversely affect the number of projects available to us in the future.
The civil construction and public-works building markets are dependent on the amount of work funded by various government agencies, which depends on many factors, including the condition of the existing infrastructure and buildings; the need for new or expanded infrastructure and buildings; and federal, state and local government spending levels. As a result, our future operating results could be negatively impacted by any decrease in demand for public projects or decrease or delay in government funding, which could result from a variety of factors, including extended government shutdowns, delays in the sale of voter-approved bonds, budget shortfalls, credit rating downgrades or long-term impairment in the ability of state and local governments to raise capital in the municipal bond market. In 2020, some of our customers experienced budget shortfalls due to COVID-19 impacts, which resulted in delayed revenue, a lower volume of new awards and reduced backlog for the Company.
We require substantial personnel, including construction and project managers and specialty subcontractor resources, to execute and perform on our contracts in backlog. The successful execution of our business strategies is also dependent upon our ability to attract and retain our key officers, as well as adequately plan for their succession.
Our ability to execute and perform on our contracts in backlog depends in large part upon our ability to hire and retain highly skilled personnel, including project and construction management and trade labor resources, such as carpenters, masons and other skilled workers. In the event we are unable to attract, hire and retain the requisite personnel and subcontractors necessary to execute and perform on our contracts in backlog, we may experience delays in completing projects in accordance with project schedules or an increase in expected costs, both of which could have a material adverse effect on our financial results, our reputation and our relationships. In addition, if we lack the personnel and specialty subcontractors necessary to perform on our current contract backlog, we may find it necessary to curtail our pursuit of new projects. A significant, rapid growth in our backlog may lead to situations in which labor resources become constrained.
The execution of our business strategies also substantially depends on our ability to retain several key members of our management. Losing any of these individuals could adversely affect our business. The majority of these key individuals are not bound by employment agreements. Volatility or lack of positive performance in our stock price may adversely affect our ability to retain key individuals to whom we have provided share-based compensation. Additionally, because a substantial portion of our key officers' compensation is placed “at risk” and linked to the performance of our business, when our operating results are negatively impacted, we are at greater risk of employee turnover. If we lose any key officer due to voluntary or involuntary termination, including as a result of death or disability, and we do not have qualified successors in place, our operating results could be harmed.
The construction services industry is highly schedule driven, and our failure to meet the schedule requirements of our contracts could adversely affect our reputation and/or expose us to financial liability.
Many of our contracts are subject to specific completion schedule requirements. Failure to meet contractual schedule requirements has subjected us, and in the future could subject us, to liquidated damages, liability for our customer’s actual cost arising out of our delay and damage to our reputation.
We may not fully realize the revenue value reported in our backlog due to cancellations or reductions in scope.
As of December 31, 2020, our backlog of uncompleted construction work was approximately $8.3 billion. The revenue projected in our backlog may not be fully realized and, in some cases, if realized, may not result in profits or may be less profitable than expected. The cancellation or reduction in scope of significant projects included in our backlog could have a material adverse effect on our financial condition, results of operations and cash flows.
Systems and information technology interruption and breaches in data security could adversely impact our ability to operate and negatively impact our operating results.
We rely on computer, information and communication technology and other related systems, some of which are hosted by third party providers, for various business processes and activities, including project management, accounting, financial reporting and business development. These systems have been and may, in the future, be subject to interruptions or damage by a variety of factors including, but not limited to, cyber-attacks, natural disasters, power loss, telecommunications failures, acts of war, computer viruses, obsolescence and physical damage. Such interruptions can result in a loss of critical data, a delay in operations, damage to our reputation or an unintentional disclosure of customer confidential or personally identifiable information, any of which could have a material adverse impact on us and our consolidated financial statements.
In addition, various privacy and security laws require us to protect sensitive and confidential information from disclosure. We dedicate considerable attention and resources to the safeguarding of our information technology systems. Nevertheless, our systems are at risk for cyber-attacks. Consequently, we may need to engage significant resources in the future to remediate the impact of, or further mitigate the risk of, such an attack. Any successful cyber-attack can result in the criminal, or otherwise illegitimate use of, confidential data, including our data or third-party data for which we have the responsibility for safekeeping. Additionally, such an attack could adversely affect our operations, reputation and financial results.
Competition for new project awards is intense, and our failure to compete effectively could reduce our market share and profits.
New project awards are determined through either a competitive bid basis or on a negotiated basis. Projects may be awarded based solely upon price, but often take into account other factors, such as technical qualifications, proposed project team, schedule and past performance on similar projects. Within our industry, we compete with many international, regional and local construction firms. Some of these competitors have achieved greater market penetration than we have in the markets in which we compete, and some have greater resources than we do. If we are unable to compete successfully in such markets, our relative market share and profits could be reduced.
Our participation in construction joint ventures exposes us to liability and/or harm to our reputation for failures by our partners.
As part of our business, we enter into joint venture arrangements typically to jointly bid on and execute particular projects, thereby reducing our risk profile while enhancing the execution capability and financial reward of project teams. Success on these joint projects depends in large part on whether our joint venture partners satisfy their contractual obligations. Generally, we and our joint venture partners are jointly and severally liable for all liabilities and obligations of our joint ventures. If a joint venture partner fails to perform or is financially unable to bear its portion of required capital contributions or other obligations, including liabilities stemming from lawsuits, we could be required to make additional investments, provide additional services
or pay more than our proportionate share of a liability to make up for our partner’s shortfall. Further, if we are unable to adequately address our partner’s performance issues, the customer may terminate the project, which could result in legal liability to us, harm our reputation, reduce our profit on a project or, in some cases, result in a loss.
Our international operations expose us to economic, political, regulatory and other risks, as well as uncertainty related to U.S. Government funding, which could adversely affect our revenue and earnings.
For the year ended December 31, 2020, we derived $365.7 million of revenue from our work on projects located outside of the United States. Our international operations expose us to risks inherent in doing business in certain hostile regions outside the United States, including political risks; risks of loss due to acts of war; unstable economic, financial and market conditions; potential incompatibility with foreign subcontractors and vendors; foreign currency controls and fluctuations; trade restrictions; logistical challenges; variations in taxes; and changes in labor conditions, labor strikes and difficulties in staffing and managing international operations. Failure to successfully manage risks associated with our international operations could result in higher operating costs than anticipated or could delay or limit our ability to generate revenue and income from construction operations in key international markets.
The U.S. federal government has approved various spending bills for the construction of defense- and diplomacy-related projects and has allocated significant funds to the defense of U.S. interests around the world from the threat of terrorism. The federal government has also approved funds for development in conjunction with the relocation of military personnel into Guam. However, federal government funding levels for construction projects in the Middle East have decreased significantly over the past several years as the U.S. government has reduced the number of military troops and support personnel in the region. As a result, we have seen a decrease in the number and size of federal government projects available to us in this region. Any decrease in U.S. federal government funding for projects in Guam or in other U.S. Territories or countries in which we are pursuing work may result in project delays or cancellations, which could reduce our revenue and earnings.
Weather can significantly affect our revenue and profitability.
Inclement weather conditions, such as significant storms and unusual temperatures, can impact our ability to perform work. Adverse weather conditions can cause delays and increases in project costs, resulting in variability in our revenue and profitability.
We are subject to risks related to government contracts and related procurement regulations.
Our contracts with U.S. federal, as well as state, local and foreign, government entities are subject to various procurement regulations and other requirements relating to their formation, administration and performance. We are subject to audits and investigations relating to our government contracts, and any violations could result in various civil and criminal penalties and administrative sanctions, including termination of contract, refunding or suspending of payments, forfeiture of profits, payment of fines and suspension or debarment from future government business. In addition, most of these contracts provide for termination or renegotiation by the government at any time, without cause, which could have an adverse effect on our business and operations.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.
The U.S. Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010, and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business. While our policies mandate compliance with these anti-bribery laws, there is no assurance that our policies and procedures will protect us from circumstances or actions that could result in possible criminal penalties or other sanctions, including contract cancellations or debarment and loss of reputation, any of which could have a material adverse impact on our business, financial condition, and results of operations.
In connection with mergers and acquisitions, we have recorded goodwill and other intangible assets that could become impaired and adversely affect our operating results. Assessing whether impairment has occurred requires us to make significant judgments and assumptions about the future, which are inherently subject to risks and uncertainties, and if actual events turn out to be materially less favorable than the judgments we make and the assumptions we use, we may be required to record impairment charges in the future.
We had $255.5 million of goodwill and indefinite-lived intangible assets recorded on our Consolidated Balance Sheet as of December 31, 2020. We assess these assets for impairment annually, or more often if required. Our assessments involve a number of estimates and assumptions that are inherently subjective, require significant judgment and involve highly uncertain
matters that are subject to change. The use of different assumptions or estimates could materially affect the determination as to whether or not an impairment has occurred. In addition, if future events are less favorable than what we assumed or estimated in our impairment analysis, we may be required to record an impairment charge, which could have a material adverse impact on our consolidated financial statements.
Adverse health events, such as an epidemic or a pandemic, could adversely impact our business.
From time to time, various diseases have spread across the globe, such as the recent COVID-19. If a disease spreads sufficiently to cause an epidemic or a pandemic, our business or the business of our suppliers, subcontractors or customers could be adversely impacted.
Risks Related to Our Capital Structure
We have a substantial amount of indebtedness which could adversely affect our financial position and prevent us from fulfilling our obligations under our debt agreements.
We currently have, and expect to continue to have, a substantial amount of indebtedness. As of December 31, 2020, our total debt was $1.0 billion, with $100.2 million classified as current debt. If we are unable to meet the terms of the financial covenants or fail to comply with any of the other restrictions contained in the agreements governing our indebtedness, an event of default could occur, causing the debt related to such agreements to become immediately due. If such acceleration occurs, we may not be able to repay such indebtedness as required. Since indebtedness under our credit agreement entered into on August 18, 2020 (the “2020 Credit Agreement”) with BMO Harris Bank N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and other lenders is secured by substantially all of our assets, acceleration of this debt could result in foreclosure of those assets and a negative impact on our operations. In addition, a failure to meet the terms of our 2020 Credit Agreement could result in a reduction of future borrowing capacity under the 2020 Credit Agreement, causing a loss of liquidity. A loss of liquidity could adversely impact our ability to execute projects in our backlog, obtain new projects, engage subcontractors, and attract and retain key employees.
Downgrades in our credit ratings could have a material adverse effect on our business and financial condition.
The Company’s debt rating was downgraded by a major credit rating agency on March 23, 2020. The credit ratings assigned to us and our debt are subject to ongoing evaluation by credit rating agencies and could change based upon, among other things, our results of operations and financial condition. Actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade, could have a material adverse effect on our costs and availability of capital, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations. Negative changes in our credit ratings could also result in more stringent covenants and higher interest rates with regard to any new or refinanced debt.
The phase-out of the London Interbank Offered Rate (“LIBOR”), or the replacement of LIBOR with a different reference rate, may adversely affect interest rates paid on some of our loans and, consequently, our earnings and cash flows.
Borrowings under our 2020 Credit Agreement and the variable portion of our equipment financing and mortgages use interest rates in relation to LIBOR. In 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if LIBOR will cease to exist at that time or if new methods of calculating LIBOR will be established such that it continues to exist after 2021. The expected phase out of LIBOR could cause market volatility or disruption and may adversely affect our access to the capital markets and cost of funding.
Risk Related to Our Stock Ownership
Our chairman and chief executive officer could exert influence over the Company due to his position and significant ownership interest.
As of December 31, 2020, our chairman and chief executive officer, Ronald N. Tutor, and three trusts controlled by Mr. Tutor (the “Tutor Group”) owned approximately 16% of the outstanding shares of our common stock. Additionally, one of our current directors was appointed by Mr. Tutor pursuant to his right to nominate one member to our Board of Directors, so long as the Tutor Group owns at least 11.25% of the outstanding shares of our common stock. Accordingly, Mr. Tutor could exert influence over the outcome of a range of corporate matters, including the election of directors and the approval or rejection of other extraordinary transactions, such as a takeover attempt or sale of the Company or its assets.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
We have office facilities and equipment yards in the following locations, which we believe are suitable and adequate for our current needs:
Offices Owned or Leased by Tutor Perini Business Segment(s)
Los Angeles (Sylmar), CA Owned and Leased Corporate, Civil & Specialty Contractors
Barrigada, Guam Owned Civil
Black River Falls, WI Owned Civil
Evansville, IN Owned Civil
Fort Lauderdale, FL Leased Building & Specialty Contractors
Framingham, MA Owned Building
Gulfport, MS Owned Building
Henderson, NV Owned Building & Specialty Contractors
Houston, TX Owned Specialty Contractors
Jessup, MD Owned Civil
Lakeview Terrace, CA Leased Specialty Contractors
Mount Vernon, NY Leased Specialty Contractors
New Rochelle, NY Owned Civil
Ozone Park, NY Owned Specialty Contractors
Philadelphia, PA Leased Building
San Carlos, CA Leased Building
Equipment Yards Owned or Leased by Tutor Perini Business Segment(s)
Black River Falls, WI Owned Civil
Evansville, IN Owned Civil
Fontana, CA Leased Civil
Hilbert, WI Owned Civil
Lakeview Terrace, CA Leased Specialty Contractors
Rosemount, MN Owned Civil
Stockton, CA Owned Building
Waukesha, WI Owned Civil

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
Legal proceedings are discussed in Note 8 of the Notes to Consolidated Financial Statements and are incorporated herein by reference.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
We do not own or operate any mines; however, we may be considered a mine operator under the Federal Mine Safety and Health Act of 1977 because we provide construction services to customers in the mining industry. Accordingly, we provide information regarding mine safety violations and other mining regulation matters in Exhibit 95 to this Form 10-K.
PART II.

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is traded on the New York Stock Exchange under the symbol “TPC.”
Holders
At February 19, 2021, there were 354 holders of record of our common stock, including holders of record on behalf of an indeterminate number of beneficial owners.
Dividends and Issuer Purchases of Equity Securities
We did not repurchase any of our common stock during the fourth quarter of 2020. We have not historically paid dividends on our common stock and have no immediate plans to do so.
Issuance of Unregistered Securities
None.
Performance Graph
The following graph compares the cumulative five-year total return to shareholders on our common stock relative to the cumulative total returns of the NYSE Composite Index and the Dow Jones U.S. Heavy Construction Index. We selected the Dow Jones U.S. Heavy Construction Index because we believe the index reflects the market conditions within the industry in which we primarily operate. The comparison of total return on investment, defined as the change in year-end stock price plus reinvested dividends, for each of the periods assumes that $100 was invested on December 31, 2015 in each of our common stock, the NYSE Composite Index and the Dow Jones U.S. Heavy Construction Index, with investment weighted on the basis of market capitalization.
The comparisons in the following graph are based on historical data and are not intended to forecast the possible future performance of our common stock.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED FINANCIAL DATA
Selected Consolidated Financial Information
The following tables present selected financial data for the last five years. This selected financial data should be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 15. Exhibits and Financial Statement Schedules, and the other information included elsewhere in this Annual Report.
CONSOLIDATED OPERATING RESULTS Year Ended December 31,
(in thousands, except per common share data) 2020 2019 2018 2017 2016
Revenue:
Civil $ 2,199,899 $ 1,779,352 $ 1,586,093 $ 1,602,175 $ 1,668,963
Building 1,984,641 1,742,040 1,861,699 1,941,325 2,069,841
Specialty Contractors 1,134,223 929,440 1,006,870 1,213,708 1,234,272
Total 5,318,763 4,450,832 4,454,662 4,757,208 4,973,076
Cost of operations (4,832,610) (4,209,060) (4,000,209) (4,302,803) (4,515,886)
Gross profit(a)
486,153 241,772 454,453 454,405 457,190
General and administrative expenses(b)
(223,809) (226,916) (262,577) (274,928) (255,270)
Goodwill impairment(c)
- (379,863) - - -
Income (loss) from construction operations 262,344 (365,007) 191,876 179,477 201,920
Other income (expense)(d)
(11,853) 6,667 4,256 43,882 6,977
Interest expense (76,212) (67,494) (63,519) (69,384) (59,782)
Income (loss) before income taxes 174,279 (425,834) 132,613 153,975 149,115
Income tax (expense) benefit(e)
(21,942) 65,609 (34,832) 569 (53,293)
Net income (loss) 152,337 (360,225) 97,781 154,544 95,822
Less: Net income attributable to noncontrolling interests 43,943 27,465 14,345 6,162 -
Net income (loss) attributable to Tutor Perini Corporation $ 108,394 $ (387,690) $ 83,436 $ 148,382 $ 95,822
Earnings (loss) per common share:(a)(b)(c)(d)(e)
Basic $ 2.14 $ (7.72) $ 1.67 $ 2.99 $ 1.95
Diluted $ 2.12 $ (7.72) $ 1.66 $ 2.92 $ 1.92
Weighted-average common shares outstanding:
Basic 50,656 50,220 49,952 49,647 49,150
Diluted 51,077 50,220 50,301 50,759 49,864
_____________________________________________________________________________________________________________
(a)During the year ended December 31, 2020, the Company recorded a charge of $15.2 million in gross profit ($0.22 per diluted share) due to an unfavorable legal ruling pertaining to a mechanical project in California in the Specialty Contractors segment, as well as a charge of $13.2 million ($0.19 per diluted share) due to an adverse arbitration ruling pertaining to an electrical project in New York in the Specialty Contractors segment.
During the year ended December 31, 2019, the Company recorded a charge of $166.8 million in gross profit ($2.38 per diluted share) as a result of the adverse jury verdict in the case related to the construction of SR 99 by a joint venture for which the Company holds a 45% share as a minority partner. Refer to the Alaskan Way Viaduct (SR 99) Matter discussion in Note 8 of the Notes to Consolidated Financial Statements for further discussion of this item.
During the year ended December 31, 2018, the Company recorded a charge of $17.8 million in gross profit ($0.25 per diluted share), which was primarily non-cash, as a result of the unexpected adverse outcome of an arbitration decision related to a subcontract back charge dispute on a Civil segment project in New York that was completed in 2013.
(b)During the year ended December 31, 2020, the Company recognized a gain of $25.7 million ($0.36 per diluted share) as a result of a favorable arbitration decision and subsequent settlement of the related employment dispute in the Specialty Contractors segment.
During the year ended December 31, 2019, the Company recognized a one-time gain of $37.8 million ($0.54 per diluted share) related to the Company’s acquisition of an additional 25% interest in a Civil segment joint venture for which the Company gained a controlling financial interest. The gain resulted from the remeasurement to fair value of the Company’s existing investment in the joint venture. For further discussion on the acquisition and the related remeasurement, see Note 12 of the Notes to Consolidated Financial Statements.
(c)During the year ended December 31, 2019, the Company recorded a non-cash goodwill impairment charge of $379.9 million in income (loss) from construction operations ($6.58 per diluted share) resulting from an interim impairment test the Company performed as of June 1, 2019. For further information and breakdown of the goodwill impairment charge by segment, see Note 6 of the Notes to Consolidated Financial Statements.
(d)On June 6, 2017, the Company received $37.0 million ($0.43 per diluted share) in a cash settlement with Merrill Lynch, Pierce, Fenner & Smith Incorporated, as successor in interest to Banc of America Securities LLC and Bank of America, N.A. (collectively “BofA”). The settlement pertained to litigation, which was filed by the Company in 2011, and related to the purchase by the Company of certain auction-rate securities from BofA.
(e)Income tax expense for the year ended December 31, 2020 includes a federal tax benefit of $14.5 million ($0.28 per diluted share) arising from the carryback of net operating losses to years with a 35% statutory rate due to enactment of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (see Note 5 of the Notes to Consolidated Financial Statements).
As mentioned above in footnote (c), the Company recorded a $379.9 million goodwill impairment charge during 2019, of which approximately $209.5 million was not deductible for income tax purposes. The Company recognized a tax benefit totaling $49.4 million ($0.98 per diluted share) as a result of the impairment charge.
In December 2017, the Tax Cuts and Jobs Act of 2017 (“TCJA”) was enacted reducing the U.S. corporate income tax rate from 35% to 21%, effective in 2018. As a result, tax expense in 2018 through 2020 was positively impacted and in 2017 the Company recognized a favorable tax adjustment of $53.3 million ($1.05 per diluted share) primarily due to a one-time revaluation of its deferred tax assets and liabilities in connection with the adoption of the TCJA.
As of and For the Year Ended December 31,
(in thousands, except ratios and percentages) 2020 2019 2018 2017 2016
CONSOLIDATED FINANCIAL POSITION
Current assets $ 4,080,457 $ 3,510,986 $ 3,175,643 $ 3,074,392 $ 2,837,756
Current liabilities 2,264,363 2,109,856 1,597,966 1,581,846 1,518,943
Working capital $ 1,816,094 $ 1,401,130 $ 1,577,677 $ 1,492,546 $ 1,318,813
Current ratio 1.80 1.66 1.99 1.94 1.87
Property and equipment, net of accumulated depreciation $ 489,217 $ 509,685 $ 490,669 $ 467,499 $ 477,626
Total assets 5,045,617 4,485,777 4,387,752 4,264,123 4,038,620
Capitalization:
Total debt 1,025,465 834,476 761,504 736,276 759,519
Stockholders’ equity 1,553,856 1,440,142 1,809,177 1,713,275 1,553,023
Total capitalization $ 2,579,321 $ 2,274,618 $ 2,570,681 $ 2,449,551 $ 2,312,542
Total debt as a percentage of total capitalization 40 % 37 % 30 % 30 % 33 %
Ratio of debt to equity 0.66 0.58 0.42 0.43 0.49
Stockholders' equity per common share $ 30.57 $ 28.64 $ 36.16 $ 34.42 $ 31.56
OTHER DATA
Backlog at year end $ 8,345,717 $ 11,221,110 $ 9,296,691 $ 7,283,434 $ 6,227,137
New awards 2,443,370 6,375,262 6,467,918 5,813,505 3,735,084
Capital expenditures 54,781 84,196 77,069 30,280 15,743
Net cash provided by operating activities 172,772 136,530 21,402 163,550 113,336
Net cash used in investing activities (46,358) (76,055) (70,208) (87,133) (13,844)
Net cash provided by (used in) financing activities 123,337 21,763 (28,979) (75,376) (24,190)
_____________________________________________________________________________________________________________

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
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
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.
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.
The following table presents the changes in backlog in 2020:
(in millions) Backlog at December 31, 2019 New Awards
in 2020(a)
Revenue
Recognized
in 2020
Backlog at December 31, 2020(b)
Civil $ 6,037.2 $ 946.3 $ (2,199.9) $ 4,783.6
Building 2,790.3 896.7 (1,984.7) 1,702.3
Specialty Contractors 2,393.6 600.4 (1,134.2) 1,859.8
Total $ 11,221.1 $ 2,443.4 $ (5,318.8) $ 8,345.7
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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
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 Specialty
Contractors Corporate Consolidated
Total
Year Ended December 31, 2019
Income (loss) from construction operations, as reported $ (150.9) $ 23.7 $ (172.6) $ (65.2) $ (365.0)
Plus: Goodwill impairment charge 210.2 13.5 156.2 - 379.9
Adjusted income (loss) from construction operations $ 59.3 $ 37.2 $ (16.4) $ (65.2) $ 14.9
Year Ended December 31,
(in millions, except per common share amounts and percentages) 2020 2019
Net income (loss) attributable to Tutor Perini Corporation, as reported $ 108.4 $ (387.7)
Plus: Goodwill impairment charge - 379.9
Less: Tax benefit provided on goodwill impairment charge - (49.4)
Adjusted net income (loss) attributable to Tutor Perini Corporation $ 108.4 $ (57.2)
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,
(in millions) 2020 2019
Revenue $ 2,199.9 $ 1,779.4
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
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-19 Update.
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,
(in millions) 2020 2019
Revenue $ 1,984.6 $ 1,742.0
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-19 Update.
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,
(in millions) 2020 2019
Revenue $ 1,134.2 $ 929.4
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-19 Update.
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.
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,
(in millions) 2020 2019
Other income (expense) $ (11.9) $ 6.7
Interest expense (76.2) (67.5)
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
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.
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
December 31, 2020
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.
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
Debt(a)
$ 1,047,714 $ 102,228 $ 29,104 $ 513,654 $ 402,728
Interest on debt(a)
313,225 61,293 118,409 93,599 39,924
Operating leases 107,891 12,512 18,251 11,495 65,633
Pension benefit payments(b)
5,263 4,265 998 - -
Other 10,937 1,504 752 - 8,681
Total $ 1,485,030 $ 181,802 $ 167,514 $ 618,748 $ 516,966
_____________________________________________________________________________________________________________
(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.
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.
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.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
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
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.
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
ITEM 9B. OTHER INFORMATION
None.
PART III.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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.

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ITEM 11. EXECUTIVE COMPENSATION
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.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
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.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
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.

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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.
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.
(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
3.1 Amended and Restated Articles of Organization of Tutor Perini Corporation, as filed with the Secretary of the Commonwealth of Massachusetts on July 8, 2020 (incorporated by reference to Exhibit 3.1 to Form 10-Q filed on July 29, 2020).
3.2 Third Amended and Restated By-laws of Tutor Perini Corporation (incorporated by reference to Exhibit 3.5 to Form 10-Q filed on August 2, 2016).
Exhibit 4. Instruments Defining the Rights of Security Holders, Including Indentures
4.1 Shareholders Agreement, dated April 2, 2008, by and among Tutor Perini Corporation, Ronald N. Tutor and the shareholders of Tutor-Saliba Corporation signatory thereto (incorporated by reference to Exhibit 4.1 to Form 8-K filed on April 7, 2008).
4.2 Amendment No. 1 to the Shareholders Agreement, dated September 17, 2010, by and between Tutor Perini Corporation and Ronald N. Tutor, as shareholder representative (incorporated by reference to Exhibit 4.1 to Form 8-K filed on September 20, 2010).
4.3 Amendment No. 2 to the Shareholders Agreement, dated June 2, 2011, by and between Tutor Perini Corporation and Ronald N. Tutor, as shareholder representative (incorporated by reference to Exhibit 4.1 to Form 8-K filed on June 6, 2011).
4.4 Amendment No. 3 to the Shareholders Agreement, dated September 13, 2011, by and between Tutor Perini Corporation and Ronald N. Tutor, as shareholder representative (incorporated by reference to Exhibit 4.1 to Form 8-K filed on September 16, 2011).
4.5 Indenture, dated June 15, 2016, by and between Tutor Perini Corporation and Wilmington Trust, National Association (incorporated by reference to Exhibit 4.1 to Form 8-K filed on June 16, 2016).
4.6 Indenture, dated April 20, 2017, among Tutor Perini Corporation, the guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Form 8-K filed on April 25, 2017).
4.7 Description of Securities.
Exhibit 10. Material Contracts
10.1* Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.19 to Amendment No. 1 to Form S-1 (File No. 333-111338) filed on February 10, 2004).
10.2* 2009 General Incentive Compensation Plan (incorporated by reference to Annex B to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 17, 2009).
10.3* Amended and Restated Tutor Perini Corporation Long-Term Incentive Plan (as amended on October 2, 2014) (incorporated by reference to Exhibit A to the Company’s Definitive Proxy Statement on Schedule 14A filed on October 2, 2014).
10.4* Tutor Perini Corporation Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed on May 26, 2017).
10.5* Tutor Perini Corporation Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed on May 25, 2018).
10.6* Amended and Restated Employment Agreement, dated December 22, 2014, by and between Tutor Perini Corporation and Ronald N. Tutor (incorporated by reference to Exhibit 10.1 to Form 8-K filed on December 24, 2014).
10.7* Amendment No. 1 to Amended and Restated Employment Agreement, dated January 5, 2018, by and between Tutor Perini Corporation and Ronald N. Tutor (incorporated by reference to Exhibit 10.1 to Form 8-K filed on January 8, 2018).
10.8 Commercial Lease Agreement, dated April 18, 2014, by and among Tutor Perini Corporation and Ronald N. Tutor (incorporated by reference to Exhibit 10.1 to Form 10-Q filed on May 7, 2014).
10.9 Fontana Property Lease Agreement, dated April 18, 2014, by and among Tutor Perini Corporation and Kristra Investments, Ltd. (incorporated by reference to Exhibit 10.2 to Form 10-Q filed on May 7, 2014).
10.10 Assignment and Assumption Agreement, dated January 15, 2015, by and among Ronald N. Tutor and the Ronald N. Tutor Separate Property Trust (incorporated by reference to Exhibit 10.1 to Form 10-Q filed on November 4, 2020).
10.11 Assignment and Assumption Agreement, dated March 3, 2015, by and among the Ronald N. Tutor Separate Property Trust and Kristra Investments, Ltd. (incorporated by reference to Exhibit 10.2 to Form 10-Q filed on November 4, 2020).
10.12 First Amendment to Commercial Lease Agreement, dated October 7, 2020, by and among Tutor Perini Corporation and Aliaron Investments, Ltd. (incorporated by reference to Exhibit 10.3 to Form 10-Q filed on November 4, 2020).
10.13 First Amendment to Fontana Property Lease Agreement, dated October 7, 2020, by and among Tutor Perini Corporation and Aliaron Investments, Ltd. (incorporated by reference to Exhibit 10.4 to Form 10-Q filed on November 4, 2020).
10.14 Second Amendment to Commercial Lease Agreement, dated December 28, 2020, by and among Tutor Perini Corporation and Aliaron Investments, Ltd.
10.15 Second Amendment to Fontana Property Lease Agreement, dated December 28, 2020, by and among Tutor Perini Corporation and Aliaron Investments, Ltd.
10.16 Third Amendment to Commercial Lease Agreement, dated February 19, 2021, by and among Tutor Perini Corporation and Aliaron Investments, Ltd.
10.17 Third Amendment to Fontana Property Lease Agreement, dated February 19, 2021, by and among Tutor Perini Corporation and Aliaron Investments, Ltd.
10.18* Amended and Restated Employment Agreement, dated November 1, 2016, by and between James A. Frost and Tutor Perini Corporation (incorporated by reference to Exhibit 10.1 to Form 10-Q filed on November 2, 2016).
10.19* Employment Agreement, dated September 6, 2017, by and between Tutor Perini Corporation and Gary G. Smalley (incorporated by reference to Exhibit 10.1 to Form 8-K filed on September 8, 2017).
10.20* Employment Offer Letter, dated June 12, 2018, by and between Tutor Perini Corporation and Wendy A. Hallgren (incorporated by reference to Exhibit 10.1 to Form 10-Q filed on November 7, 2018).
10.21* Separation Benefits Agreement, dated September 17, 2019, by and between Tutor Perini Corporation and Wendy A. Hallgren (incorporated by reference to Exhibit 10.1 to Form 8-K filed on September 20, 2019).
10.22* Employment Offer Letter, dated July 19, 2019, by and between Tutor Perini Corporation and Jean J. Abiassi (incorporated by reference to Exhibit 10.1 to Form 10-Q filed on May 6, 2020).
10.23* Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to Form 10-Q filed on November 6, 2019).
10.24* Form of Restricted Stock Unit Award Agreement with Guarantee (incorporated by reference to Exhibit 10.3 to Form 10-Q filed on November 6, 2019).
10.25* Form of Stock Option Agreement (incorporated by reference to Exhibit 10.4 to Form 10-Q filed on November 6, 2019).
10.26 Credit Agreement, dated as of August 18, 2020, among Tutor Perini Corporation, BMO Harris Bank N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to Form 8-K filed on August 19, 2020).
Exhibit 21 Subsidiaries of Tutor Perini Corporation.
Exhibit 23 Consent of Independent Registered Public Accounting Firm.
Exhibit 24 Power of Attorney executed by members of the Company’s Board of Directors allowing Management to sign the Company’s Form 10-K on their behalf.
Exhibit 31.1 Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 95 Mine Safety Disclosure.
Exhibit 101.INS Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
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.
Exhibit 104 Cover Page Interactive Data File - The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Inline XBRL (included as Exhibit 101).
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* Management contract or compensatory plan or arrangement