-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ULqQTXC4ZAMKhYITqq6zYeIQru0Fz0iIN053S+MRW5hwDGyVZUHg1yI7S0D+mej2 AotKExOrjLQ7aPPw8gy9fg== 0000077543-05-000062.txt : 20050805 0000077543-05-000062.hdr.sgml : 20050805 20050805142530 ACCESSION NUMBER: 0000077543-05-000062 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050805 DATE AS OF CHANGE: 20050805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERINI CORP CENTRAL INDEX KEY: 0000077543 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL BUILDING CONTRACTORS - NONRESIDENTIAL BUILDINGS [1540] IRS NUMBER: 041717070 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06314 FILM NUMBER: 051002204 BUSINESS ADDRESS: STREET 1: 73 MT WAYTE AVE CITY: FRAMINGHAM STATE: MA ZIP: 01701 BUSINESS PHONE: 5086282000 10-Q 1 form10q_2q05.htm 2ND QUARTER 2005 FORM 10-Q 2005 2nd Quarter Form 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005

OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-6314

Perini Corporation
(Exact name of registrant as specified in its charter)

MASSACHUSETTS                                                                                                    04-1717070
(State or other jurisdiction of                                                                                     (I.R.S. Employer
incorporation or organization)                                                                                     Identification No.)

73 MT. WAYTE AVENUE, FRAMINGHAM, MASSACHUSETTS 01701-9160
(Address of principal executive offices)
(Zip code)

(508) 628-2000
(Registrant's telephone number, including area code)

NONE
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X No ___

The number of shares of Common Stock, $1.00 par value per share, of registrant outstanding at July 29, 2005 was 25,488,128.

Page 1 of 32

                                         PERINI CORPORATION & SUBSIDIARIES

                                                        INDEX


                                                                                                        Page Number

Part I. -      Financial Information:

               Item 1.    Financial Statements (Unaudited)

                          Consolidated Condensed Balance Sheets -                                            3
                          June 30, 2005 and December 31, 2004

                          Consolidated Condensed Statements of Income -                                      4
                          Three Months and Six Months ended June 30, 2005 and 2004

                          Consolidated Condensed Statement of Stockholders' Equity -                         5
                          Six Months Ended June 30, 2005

                          Consolidated Condensed Statements of Cash Flows  -                                 6
                          Six Months ended June 30, 2005 and 2004

                          Notes to Consolidated Condensed Financial Statements                               7 - 17

               Item 2.    Management's Discussion and Analysis of Financial Condition and Results of
                          Operations                                                                        18 - 27

               Item 3.    Quantitative and Qualitative Disclosures About Market Risk                         27

               Item 4.    Controls and Procedures                                                            27 - 28

Part II. -     Other Information:

               Item 1.     Legal Proceedings                                                                 29

               Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds                       30

               Item 3.     Defaults Upon Senior Securities                                                   30

               Item 4.     Submission of Matters to a Vote of Security Holders                               30 - 31

               Item 5.     Other Information                                                                 31

               Item 6.     Exhibits                                                                          31

               Signatures                                                                                    32

Part I. – Financial Information

Item 1. Financial Statements (Unaudited)

                                         PERINI CORPORATION AND SUBSIDIARIES
                                  CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
                                   JUNE 30, 2005 (UNAUDITED) AND DECEMBER 31, 2004
                                                    (In Thousands)

                                          ASSETS                                              JUNE 30,       DEC. 31,
                                                                                                2005           2004
                                                                                            -------------   -----------

Cash and Cash Equivalents (Note 3)                                                             $  94,573     $ 136,305
Accounts Receivable, including retainage                                                         344,005       372,909
Unbilled Work                                                                                     95,765        90,280
Deferred Tax Asset                                                                                     -         4,110
Other Current Assets                                                                               7,465         4,112
                                                                                            -------------   -----------
     Total Current Assets                                                                      $ 541,808     $ 607,716
                                                                                            -------------   -----------

Property and Equipment, less Accumulated Depreciation of $23,487 in 2005 and
$21,286 in 2004                                                                                $  52,726     $  17,486
                                                                                            -------------   -----------

Goodwill                                                                                       $  12,678     $  12,678
                                                                                            -------------   -----------

Other Assets                                                                                   $  12,214     $  16,385
                                                                                            -------------   -----------

                                                                                               $ 619,426     $ 654,265
                                                                                            =============   ===========
                           LIABILITIES AND STOCKHOLDERS' EQUITY

Current Maturities of Long-term Debt                                                           $  11,565     $     759
Accounts Payable, including retainage                                                            285,378       344,684
Deferred Contract Revenue                                                                         54,436        57,111
Accrued Expenses                                                                                  18,202        27,133
                                                                                            -------------   -----------
     Total Current Liabilities                                                                 $ 369,581     $ 429,687
                                                                                            -------------   -----------

Long-term Debt, less current maturities included above                                         $  18,497     $   8,608
                                                                                            -------------   -----------

Other Long-term Liabilities (Note 8)                                                           $  42,583     $  41,936
                                                                                            -------------   -----------

Contingencies and Commitments (Note 5)

Stockholders' Equity:
  Preferred Stock                                                                              $      56     $      56
  Series A Junior Participating Preferred Stock                                                        -             -
  Stock Purchase Warrants                                                                            461           965
  Common Stock                                                                                    25,448        25,233
  Additional Paid-in Capital                                                                     113,662       110,058
  Retained Earnings                                                                               76,242        64,826
                                                                                            -------------   -----------
                                                                                               $ 215,869     $ 201,138
  Accumulated Other Comprehensive Loss                                                           (27,104)      (27,104)
                                                                                            -------------   -----------
     Total Stockholders' Equity                                                                $ 188,765     $ 174,034
                                                                                            -------------   -----------

                                                                                               $ 619,426     $ 654,265
                                                                                            =============   ===========

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

                                                       PERINI CORPORATION AND SUBSIDIARIES
                                             CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
                                                 (In Thousands, Except Share and Per Share Data)


                                                                                           THREE MONTHS                        SIX MONTHS
                                                                                          ENDED JUNE 30,                     ENDED JUNE 30,
                                                                                   ------------------------------     -----------------------------

                                                                                       2005             2004              2005            2004
                                                                                   -------------    -------------     -------------   -------------

Revenues (Note 9)                                                                     $ 378,384        $ 495,808         $ 749,937       $ 976,112

Cost of Operations                                                                      353,775          472,077           702,598         928,853
                                                                                   -------------    -------------     -------------   -------------

Gross Profit                                                                          $  24,609        $  23,731         $  47,339       $  47,259

General and Administrative Expenses                                                      12,939            9,065            26,272          18,808
                                                                                   -------------    -------------     -------------   -------------

INCOME FROM CONSTRUCTION OPERATIONS (Note 9)                                          $  11,670        $  14,666         $  21,067       $  28,451

Other Expense, Net                                                                         (524)          (1,407)             (667)         (3,251)
Interest Expense                                                                           (299)            (117)             (673)           (308)
                                                                                   -------------    -------------     -------------   -------------

Income before Income Taxes                                                            $  10,847        $  13,142         $  19,727       $  24,892

Provision for Income Taxes (Note 6)                                                      (4,387)            (966)           (7,717)         (1,495)
                                                                                   -------------    -------------     -------------   -------------

NET INCOME                                                                            $   6,460        $  12,176         $  12,010       $  23,397
                                                                                   =============    =============     =============   =============

Less:  Accrued Dividends on $21.25 Preferred Stock (Note 8)                                (297)            (297)             (594)           (594)
                                                                                   -------------    -------------     -------------   -------------

NET INCOME AVAILABLE FOR COMMON STOCKHOLDERS                                          $   6,163        $  11,879         $  11,416       $  22,803
                                                                                   =============    =============     =============   =============

BASIC EARNINGS PER COMMON SHARE (Note 7)                                              $    0.24        $    0.51         $    0.45       $    0.99
                                                                                   =============    =============     =============   =============

DILUTED EARNINGS PER COMMON SHARE (Note 7)                                            $    0.24        $    0.48         $    0.44       $    0.91
                                                                                   =============    =============     =============   =============


WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 7):
   BASIC                                                                              25,345,396       23,202,323        25,316,216      23,108,128
   Effect of Dilutive Stock Options, Warrants and Restricted Stock Units Outstanding     624,893        1,766,154           687,545       1,822,774
                                                                                   -------------    -------------     -------------   -------------
   DILUTED                                                                            25,970,289       24,968,477        26,003,761      24,930,902
                                                                                   -------------    -------------     -------------   -------------

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

                                                                   PERINI CORPORATION AND SUBSIDIARIES
                                                  CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
                                                                 FOR THE SIX MONTHS ENDED JUNE 30, 2005
                                                                               (In Thousands)

                                                                                                                                          Accumulated
                                                                           Stock                        Additional                           Other
                                                          Preferred       Purchase        Common         Paid-in        Retained         Comprehensive
                                                            Stock         Warrants        Stock          Capital        Earnings             Loss                Total
                                                         ------------    -----------    -----------     -----------    -----------     ------------------     ------------

Balance - December 31, 2004                                   $   56         $  965        $25,233       $ 110,058       $ 64,826          $    (27,104)        $ 174,034


Net income                                                         -              -              -               -         12,010                      -           12,010


Preferred stock dividends accrued                                  -              -              -               -          (594)                      -            (594)
($10.625 per share*)

Common stock options and stock purchase

warrants exercised                                                 -          (504)            125             720              -                      -              341

Income tax benefit attributable to nonqualified

stock options exercised                                            -              -              -             321              -                      -              321


Restricted stock compensation expense                              -              -              -           2,434              -                      -            2,434


Common Stock issued                                                -              -             90             129              -                      -              219

                                                         ------------    -----------    -----------     -----------    -----------     ------------------     ------------
Balance - June 30, 2005                                       $   56         $  461        $25,448       $ 113,662       $ 76,242          $    (27,104)        $ 188,765
                                                         ============    ===========    ===========     ===========    ===========     ==================     ============

  *Equivalent to $1.0625 per Depositary Share

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

                                      PERINI CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                                (In Thousands)

                                                                                            SIX MONTHS
                                                                                          ENDED JUNE 30,
                                                                                    ----------------------------
                                                                                       2005            2004
                                                                                    ------------   -------------

Cash Flows from Operating Activities:
  Net income                                                                          $  12,010        $ 23,397
  Adjustments to reconcile net income to net cash from operating activities:
       Depreciation and amortization                                                      2,798           2,838
       Restricted stock compensation expense                                              2,434               -
       Income tax benefit from stock options exercised                                      321               -
       Deferred income taxes                                                              4,768             238
       Gain on sale of equipment                                                            (70)           (615)
       Gain on sale of marketable securities                                               (427)              -
       Unrealized loss on marketable securities                                             478               -
       Other items, net                                                                     407              79
       Cash used by changes in components of working capital other
         than cash, current maturities of long-term debt and deferred tax asset         (41,020)         (5,652)
                                                                                    ------------   -------------

    NET CASH (USED BY) PROVIDED FROM OPERATING ACTIVITIES                             $ (18,301)       $ 20,285
                                                                                    ------------   -------------

Cash Flows from Investing Activities:
  Acquisition of Cherry Hill Construction, Inc., net of cash balance acquired (Note 4)$ (19,970)       $      -
  Acquisition of property and equipment                                                  (6,380)         (2,792)
  Proceeds from sale of property and equipment                                              926             858
  Proceeds from sale of marketable securities                                             4,452               -
  Proceeds from other investing activities                                                  227             531
                                                                                    ------------   -------------

    NET CASH USED BY INVESTING ACTIVITIES                                             $ (20,745)       $ (1,403)
                                                                                    ------------   -------------

Cash Flows from Financing Activities:
  Proceeds from long-term debt                                                        $   4,870        $  2,247
  Reduction of long-term debt                                                            (7,957)           (241)
  Proceeds from exercise of common stock options and stock purchase warrants                341           1,463
  Issuance of common stock                                                                  219               -
  Expenditure for stock registration                                                       (159)           (847)
                                                                                    ------------   -------------

    NET CASH (USED BY) PROVIDED FROM FINANCING ACTIVITIES                             $  (2,686)       $  2,622
                                                                                    ------------   -------------

Net (Decrease) Increase in Cash                                                       $ (41,732)       $ 21,504
Cash at Beginning of Year                                                               136,305          67,823
                                                                                    ------------   -------------

Cash at End of Period                                                                 $  94,573        $ 89,327
                                                                                    ============   =============



Supplemental Disclosure of Cash Paid During the Period For:
  Interest                                                                            $     674        $    307
                                                                                    ============   =============
  Income taxes                                                                        $     823        $  1,280
                                                                                    ============   =============

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

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(1) Basis of Presentation
The unaudited consolidated condensed financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2004. In the opinion of management, the accompanying unaudited consolidated condensed financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of June 30, 2005 and December 31, 2004, results of operations for the three month and six month periods ended June 30, 2005 and 2004, and cash flows for the six month periods ended June 30, 2005 and 2004. The results of operations for the six months ended June 30, 2005 may not be indicative of the results that may be expected for the year ending December 31, 2005 because the Company’s results are primarily generated from a limited number of significant active construction contracts. Therefore, such results can vary depending on the timing of progress achieved and changes in estimated profitability of projects being reported.

(2) Significant Accounting Policies
The significant accounting policies followed by the Company and its subsidiaries in preparing its consolidated financial statements are set forth in Note (1) to such financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. The Company has made no significant change in these policies during 2005.

In conjunction with the finalization of the purchase price allocation for the acquisition of Cherry Hill, the Company adjusted the estimated useful lives and estimated salvage values of the Cherry Hill fixed assets. Additionally, effective May 1, 2005, the Company prospectively changed its method of calculating depreciation for construction and computer-related equipment from accelerated methods to the straight-line method. As a result of these changes, the Cherry Hill fixed assets and fixed assets acquired by the Company on or after May 1, 2005 will have depreciation provided based on estimated useful lives ranging from five to twenty years and estimated salvage values ranging from ten to forty percent of the acquisition cost. Cherry Hill’s previous policy, which continued to be applied by the Company up until the finalization of the purchase price allocation, was to provide depreciation on a straight-line basis over lives ranging from five to thirty-nine years with no provision for estimated salvage values. The Company’s previous policy, which will continue to apply to fixed assets acquired prior to May 1, 2005 (except for the Cherry Hill fixed assets), was to provide depreciation on construction and computer-related equipment primarily using accelerated methods over lives ranging from three to seven years and the straight-line method for remaining depreciable property over lives ranging from three to thirty years with no provision for estimated salvage values. These changes were adopted to recognize a more realistic periodic charge to income based on the Company’s historical experience as well as to enhance financial statement comparability with most other public construction companies.

The effect of the change in depreciation policy in 2005 was to increase net income for the six months ended June 30, 2005 by approximately $0.3 million (all of which relates to the Cherry Hill fixed assets acquired effective January 1, 2005) and to increase basic and diluted earnings per common share by $0.01. Since the new depreciation policy was applied on a prospective basis and fixed assets acquired prior to May 1, 2005 have continued to be depreciated under the policy previously in effect, the cumulative effect of a change in accounting principle or pro forma effects of retroactive application disclosure is not required in accordance with the provisions of Accounting Principles Board Opinion No. 20, “Accounting Changes”.

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)

(3) Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with original maturities of three months or less.

Cash and cash equivalents as reported in the accompanying Consolidated Condensed Balance Sheets consist of amounts held by the Company that are available for general corporate purposes and the Company’s proportionate share of amounts held by construction joint ventures that are available only for joint venture-related uses. Cash held by construction joint ventures is distributed from time to time to the Company and to the other joint venture participants in accordance with their percentage interest after the joint venture partners determine that a cash distribution is prudent. Cash distributions received by the Company from its construction joint ventures are then available for general corporate purposes. At June 30, 2005 and December 31, 2004, cash and cash equivalents consisted of the following (in thousands):

                                                               June 30,           Dec. 31,
                                                                2005               2004
                                                            --------------    ---------------

Corporate cash and cash equivalents (available
  for general corporate purposes)                                $ 43,574           $ 81,024

Company's share of joint venture cash and
  cash equivalents (available only for joint venture
  purposes, including future distributions)                        50,999             55,281
                                                            --------------    ---------------
                                                                 $ 94,573           $136,305
                                                            ==============    ===============

(4) Acquisition of Cherry Hill Construction, Inc.
On January 21, 2005, the Company completed the acquisition of 100% of the outstanding capital stock of Cherry Hill Construction, Inc. ("Cherry Hill"), a privately held construction company based in Jessup, Maryland, for approximately $22 million in cash. Cherry Hill is an established civil contractor operating in the Mid-Atlantic and Southeast regions specializing in excavation, foundations, paving and construction of civil infrastructure. The acquisition is effective as of January 1, 2005 and, accordingly, Cherry Hill's financial results are included in the Company's consolidated results of operations and financial position beginning in the first quarter of 2005.

The transaction was accounted for using the purchase method of accounting as required by FASB Statement No. 141, "Business Combinations". The cost to acquire Cherry Hill, which consists of $22 million cash consideration referred to above and $400,000 of estimated other direct acquisition costs, was less than the estimated fair value of the assets acquired less the liabilities assumed. The resulting excess of the fair value of acquired net assets over cost was generally allocated as a pro rata reduction of the estimated fair value of the non-current assets acquired in accordance with SFAS No. 141. The following table summarizes estimated fair value of the assets acquired and liabilities assumed as of January 1, 2005 after the allocation described above (in thousands):

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)

(4) Acquisition of Cherry Hill Construction, Inc. (continued)

          Current assets                                        $ 46,920
          Property and equipment, net                             32,155
          Other long-term assets                                     376
          Intangible assets                                          790
                                                            ------------
          Total assets acquired                                 $ 80,241
          Current liabilities                                    (39,604)
          Long-term debt                                         (12,167)
          Long-term deferred tax liabilities                      (6,023)
                                                             ------------

          Total Acquisition Costs                               $ 22,447
                                                             ============

The amount assigned to intangible assets primarily represents the Company's estimate of the fair value of contract backlog acquired as of January 1, 2005 and was based on an independent appraisal. The intangible assets will be amortized using the straight-line method over an approximate 2.5-year period based on the estimated durations of the contracts acquired.

Since the acquisition was effective as of January 1, 2005, the Company's actual 2005 year to date results include Cherry Hill for the total period. Therefore, the following pro forma financial information is only presented for the comparative three month and six month periods ended June 30, 2004 (in thousands, except per share data):

                                                Three Months Ended                Six Months Ended
                                                  June 30, 2004                    June 30, 2004
                                           -----------------------------    ------------------------------
                                              Actual        Pro forma          Actual        Pro forma
                                           -------------   -------------    -------------  ---------------

Revenues                                      $ 495,808       $ 533,967        $ 976,112       $1,052,430
Gross profit                                  $  23,731       $  29,191        $  47,259       $   58,178
Net income                                    $  12,176       $  13,476        $  23,397       $   25,997

Basic earnings per common share               $    0.51       $    0.57        $    0.99       $     1.10
Diluted earnings per common share             $    0.48       $    0.53        $    0.91       $     1.02

The pro forma results have been prepared for comparative purposes only and include certain adjustments such as increased interest expense on acquisition debt, reduced depreciation expense related to the reduction of the fixed asset carrying values due the application of purchase accounting (as described above), and additional amortization expenses related to intangible assets arising from the acquisition. The pro forma results are not necessarily indicative either of the results of operations that actually would have resulted had the acquisition been in effect on January 1, 2004 or of future results.

(5) Contingencies and Commitments

(a) Mergentime - Perini Joint Ventures vs. WMATA Matter
On May 11, 1990, contracts with two joint ventures in which Perini Corporation, or Perini, held a 40% interest were terminated by the Washington Metropolitan Area Transit Authority, or WMATA, on two subway construction projects in the District of Columbia. The contracts were

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)

(5) Contingencies and Commitments (continued)

(a) Mergentime - Perini Joint Ventures vs. WMATA Matter (continued)
awarded to the joint ventures in 1985 and 1986. However, Perini and Mergentime Corporation, or Mergentime, the 60% managing partner, entered into an agreement in 1987 under which Perini withdrew from the joint ventures and Mergentime assumed complete control over the performance of both projects. This agreement did not relieve Perini of its responsibilities to WMATA as a joint venture partner. After Perini withdrew from the joint ventures, Mergentime and WMATA had a dispute regarding progress on the projects. After both construction contracts were terminated, WMATA retained Perini, acting independently, to complete both projects.

Subsequently, the joint ventures brought an action in the United States District Court for the District of Columbia against WMATA, seeking damages for delays, unpaid extra work and wrongful termination and WMATA brought an action against the joint ventures seeking damages for additional costs to complete the projects. After a bench trial, the District Court found the joint ventures liable to WMATA for damages in the amount of approximately $16.5 million and WMATA liable to the joint ventures for damages in the amount of approximately $4.3 million.

The joint ventures appealed the judgment to the United States Court of Appeals for the District of Columbia, and on February 16, 1999, the Court of Appeals vacated the District Court's final judgment and ordered the District Court to review its prior findings and hold further hearings in regard to the joint venture's affirmative claims. In addition, the Court of Appeals held that statutory interest on any of the claims will not accrue until final judgment is entered sometime in the future.

On February 28, 2001, a successor District Court Judge informed the parties that he could not certify adequate familiarity with the record to complete the remaining proceedings; therefore, he granted the joint ventures' motion for a new trial. The joint ventures are seeking $28.9 million, plus interest, from WMATA, and WMATA is seeking $29.3 million from the joint ventures. A new trial was completed in January 2002 and a decision is still pending. The ultimate financial impact of the Judge's pending decision is not yet determinable; therefore, no provision for loss, if any, has been recorded in the financial statements.

(b) Tutor-Saliba-Perini Joint Venture vs. Los Angeles MTA Matter
During 1995, a joint venture, Tutor-Saliba-Perini, or the Joint Venture, in which Perini Corporation, or Perini, is the 40% minority partner and Tutor-Saliba Corporation, or Tutor-Saliba, of Sylmar, California is the 60% managing partner, filed a complaint in the Superior Court of the State of California for the County of Los Angeles against the Los Angeles County Metropolitan Transportation Authority, or the LAMTA, seeking to recover costs for extra work required by the LAMTA in connection with the construction of certain tunnel and station projects. In February 1999, the LAMTA countered with civil claims under the California False Claims Act against the Joint Venture, Tutor-Saliba and Perini jointly and severally (together, TSP). Ronald N. Tutor, the Chairman and Chief Executive Officer of Perini since March 2000, is also the chief executive officer and the sole stockholder of Tutor-Saliba.

Claims concerning the construction of the LAMTA projects were tried before a jury in 2001. During trial, the Judge ruled that the Joint Venture had failed to comply with the Court's prior discovery orders and the Judge penalized TSP for the alleged non-compliance by dismissing

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)

(5) Contingencies and Commitments (continued)

(b) Tutor-Saliba-Perini Joint Venture vs. Los Angeles MTA Matter (continued)
the Joint Venture's claims and by ruling, without a jury finding, that TSP was liable to the LAMTA for damages on the LAMTA's counterclaims. The Judge then instructed the jury that TSP was liable to the LAMTA and charged the jury with the responsibility of determining the amount of the damages based on the Judge's ruling. The jury awarded the LAMTA approximately $29.6 million in damages.

On March 26, 2002, the Judge amended the award, ordering TSP to pay the LAMTA an additional $33.4 million in costs and attorney fees, with the aggregate $63.0 million award subject to interest at an annual rate of 10% from the date of the award.

TSP appealed the Judge's discovery sanction, the subsequent judgment and the amended judgment.

On January 25, 2005, the State of California Court of Appeal issued an opinion in which it reversed the entire $63.0 million trial court's judgment and found that the trial court judge had abused his discretion and violated TSP's due process rights and imposed an impermissibly overbroad sanction in issuing terminating sanctions that prevented the Joint Venture from presenting its claims and severely limited TSP in defending itself against the LAMTA's lawsuit. The Court of Appeal also directed the trial court to dismiss LAMTA's claims that TSP had violated the Unfair Competition Law and remanded the Joint Venture's claims against LAMTA for extra work required by LAMTA and LAMTA's counterclaim under the California False Claim Act against TSP to the trial court for further proceedings, including a new trial. The LAMTA petitioned the Court of Appeal for rehearing and the California Supreme Court for review. Both petitions were denied and the case was remanded and has been reassigned for a new trial.

The ultimate financial impact of the lawsuit is not yet determinable. Therefore, no provision for loss, if any, has been recorded in the financial statements.

(c) City of San Francisco vs. Tutor-Saliba, Perini & Buckley Joint Venture Matter
In November 2002, the San Francisco City Attorney, on behalf of the City and County of San Francisco and the citizens of California, filed a civil action with a demand for a jury trial against the Tutor-Saliba, Perini & Buckley Joint Venture, or the Joint Venture, Perini Corporation, or Perini, Tutor-Saliba Corporation, or Tutor-Saliba, Buckley & Company, Inc., or Buckley, and their bonding companies in the United States District Court in San Francisco relating to seven projects for work on the expansion of the San Francisco International Airport. A second amended complaint was filed in July 2003 which, among other things, added Ronald N. Tutor as a defendant. The Joint Venture was established by Tutor-Saliba, Perini and Buckley through two joint venture agreements dated October 28, 1996 and February 11, 1997. The Joint Venture had agreements with the Owner to perform work ("Contracts") on only two of the above projects ("Projects") and, as part of those Contracts, the Joint Venture provided performance and payment bonds to the Owner ("Bonds").

On or about May 24, 2004, the Court granted substantial portions of the defendants' motion to dismiss the plaintiffs' second amended complaint with leave to amend certain causes of action. On June 21, 2004, the plaintiffs filed their third amended complaint. In the third amended complaint, the plaintiffs allege, among other things, various overcharges, bidding

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)

(5) Contingencies and Commitments (continued)

(c) City of San Francisco vs. Tutor-Saliba, Perini & Buckley Joint Venture Matter (continued)
violations, violations of minority contracting regulations, civil fraud, violation of the California False Claims and Unfair Competition Acts and breach of contract. In addition, the plaintiffs allege that the defendants have violated the United States Racketeer Influenced Corrupt Organizations Act ("RICO"). The plaintiffs have asserted approximately $45 million in actual damages against the Joint Venture and each of its partners as well as substantial liquidated damages, treble damages, punitive and exemplary damages, various civil penalties and a declaration that Tutor-Saliba and the Joint Venture are irresponsible bidders.

The defendants filed a Motion to Dismiss the Third Amended Complaint in August, 2004. Recently, the Court ruled on the Motion To Dismiss, granting it in part, and denying it in part. Specifically, the Court dismissed one of the two bases Plaintiffs' alleged to establish a RICO action; the breach of contract claim against Tutor-Saliba and the Joint Venture for their alleged violations of minority contracting regulations; and the request that the Court declare Tutor-Saliba and the Joint Venture to be irresponsible bidders.

Tutor-Saliba is the managing partner of the Joint Venture and, in December 1997, Perini sold its entire 20% interest in the Joint Venture to Tutor-Saliba. As part of that sale agreement, Tutor-Saliba agreed to indemnify Perini from any liability that Perini is required to pay by reason of or arising out of any event or occurrence subsequent to the date of the sale of Perini's interest in the Joint Venture in any way connected with the joint venture agreements, the Contracts, the Projects and the Bonds. It is unclear based on the plaintiff's current complaint whether the claims against the Joint Venture arise out of events that occurred subsequent to the date of the sale of Perini's interest. The ultimate financial impact of this action is not yet determinable.

(d) Redondo/Perini Joint Venture vs. Siemens Transportation Matter
This is a binding arbitration proceeding arising out of a contract between the Redondo/Perini Joint Venture, or RPJV, a joint venture in which Perini and Redondo Construction Corp., or Redondo, each have a 50% interest and the Siemens Transportation Partnership, S.E., Puerto Rico, or STP. STP is constructing a public metropolitan passenger rail transportation project for the Commonwealth of Puerto Rico and RPJV is responsible for the design and construction of a portion of the project.

On March 19, 2002, Redondo filed a petition for reorganization under 11 U.S.C. Chapter 11 in U.S. Bankruptcy Court for the District of Puerto Rico. On December 23, 2002, RPJV filed an arbitration demand against STP seeking the recovery of additional costs related to design changes and the late completion of the design. On January 31, 2003, STP filed a counter-demand against RPJV seeking the recovery of damages allegedly related to defects in design and construction and the late completion of RPJV's work along with the repayment for alleged advances previously paid to RPJV. Arbitration evidentiary hearings commenced and are continuing.

On October 7, 2004, STP filed suit against Perini in New York State court seeking enforcement against Perini of a Guaranty Agreement that allegedly guarantees the performance and payment obligations of the subject RPJV/Siemens Contract in an amount to be determined at trial, but not less than $27 million. This action has been stayed pending the arbitration.

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)

(5) Contingencies and Commitments (continued)

(d) Redondo/Perini Joint Venture vs. Siemens Transportation Matter (continued)
On December 3, 2004, the Arbitrators dismissed RPJV's claims for general delay damages, and general conditions, its claim for damages under cardinal change theory and the claim amount of a subcontractor. RPJV's remaining claims are for $46.7 million. STP's revised claim is now approximately $26 million, including its claim for alleged advances already paid.

Management has made an estimate of the anticipated total cost recovery on this project and it is included in revenue recorded to date. To the extent new facts become known or the final cost recovery included in the claim settlement varies from this estimate, the impact of the change will be reflected in the financial statements at that time.

(e) Perini/Kiewit/Cashman Joint Venture-Central Artery/Tunnel Project Matter
Perini/Kiewit/Cashman Joint Venture, or PKC, a joint venture in which Perini holds a 56% interest and is the managing partner, is currently pursuing a series of claims for additional contract time and/or compensation against the Massachusetts Highway Department, or MHD, for work performed by PKC on a portion of the Central Artery/Tunnel project in Boston, Massachusetts. During construction, MHD ordered PKC to perform changes to the work and issued related direct cost changes with an estimated value, excluding time delay and inefficiency costs, in excess of $100 million. In addition, PKC encountered a number of unforeseen conditions during construction that greatly increased PKC's cost of performance.

Certain of PKC's claims have been presented to a Disputes Review Board, or the DRB, which consists of three construction experts chosen by the parties. To date, the DRB has ruled on a binding basis that PKC is entitled to additional compensation for its contract time delay claim in the amount of $17.4 million. On March 20, 2002, the Superior Court of the Commonwealth of Massachusetts approved PKC's request to confirm the DRB's $17.4 million award. The MHD has appealed the Superior Court decision to the Appeals Court of the Commonwealth of Massachusetts and the appeal is pending.

The DRB has also ruled on a binding basis that PKC is entitled to three additional compensation awards totaling $27.8 million for impacts and inefficiencies caused by MHD to certain of PKC's work. MHD has filed actions in the Massachusetts Superior Court seeking to vacate these awards, and PKC has answered, seeking to confirm them. PKC is awaiting a decision from the Court on cross-motions in two of these actions, which were argued in February 2005. The third action has not yet been heard.

Under the Dispute Resolution Rules of the contract, either party may periodically terminate the services of some or all of the DRB members, provided that members who are removed under this provision will remain on the DRB through the completion of any then pending claims. The MHD removed the "Second DRB" members under this provision, although those members have continued to hear claims that were pending when it was terminated. Replacement ("Third") DRB members have been agreed upon. The issue of which claims are "pending" before which DRB has been the subject of rulings by the Second DRB and extensive litigation, some of which is still ongoing.

Over the past several months, the MHD has refused to pay the Second DRB for its services, and it contends that PKC may not pay MHD's share of those expenses. PKC has nevertheless paid the Second DRB for both parties' share. This issue is currently the subject

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)

(5) Contingencies and Commitments (continued)

(e) Perini/Kiewit/Cashman Joint Venture-Central Artery/Tunnel Project Matter (continued)
of litigation by the MHD to halt the Second DRB proceedings or overturn its decisions.

The pending claims yet to be decided by the Second DRB on a binding basis total $103.6 million (exclusive of interest). The remaining claims to be decided by the Third DRB on a binding basis total $22.8 million (exclusive of interest).

Management has made an estimate of the total anticipated cost recovery on this project and it is included in revenue recorded to date. To the extent new facts become known or the final cost recovery included in the claim settlement varies from this estimate, the impact of the change will be reflected in the financial statements at that time.

On August 14, 2002, the Massachusetts Attorney General's office, pursuant to its authority under the Massachusetts False Claims Act, served a Civil Investigative Demand ("CID") on Perini and the other joint venture partners. The CID sought the production of certain construction claims documentation in connection with the Central Artery/Tunnel Contract No. C11A1. In September 2004, the Attorney General's office presented a list of items that it believed constitute possible false claims. PKC made a responsive presentation to the Attorney General's office in January 2005. PKC vigorously denies that it submitted any false claims and is cooperating with the Attorney General's office in the ongoing investigation.

(f) $21.25 Preferred Shareholders Class Action Lawsuit
On October 15, 2002, Frederick Doppelt, Arthur I. Caplan and Leland D. Zulch filed a lawsuit individually, and as representatives of a class of holders of the $2.125 Depositary Convertible Exchangeable Preferred Shares, representing 1/10 Share of $21.25 Convertible Exchangeable Preferred Stock ("Depositary Shares") against certain current and former directors of Perini. This lawsuit is captioned Doppelt, et al. v. Tutor, et al., and is pending before the United States District Court for the District of Massachusetts. Mr. Doppelt is a current director of Perini and Mr. Caplan is a former director of Perini. Specifically, the original complaint alleged that the defendants breached their fiduciary duties owed to the holders of the Depositary Shares and to Perini. The plaintiffs principally alleged that the defendants improperly authorized the exchange of Series B Preferred Stock for common stock while simultaneously refusing to pay accrued dividends due on the Depositary Shares.

In July 2003, the plaintiffs filed an amended complaint. The amended complaint added an allegation that the defendants had further breached their fiduciary duties by authorizing a tender offer for the purchase of up to 90% of the Depositary Shares and an allegation that the collective actions of the defendants constitute unfair and deceptive business practices under the provisions of the Massachusetts Consumer Protection Act. The amended complaint withdrew the allegation of a breach of fiduciary duty owed to Perini, but retained the allegation with respect to a breach of those duties owed to the holders of the Depositary Shares.

On April 12, 2004, pursuant to Defendants' Motions to Dismiss, the Court dismissed the claim under the Massachusetts Consumer Protection Act. The Court did not dismiss the claim for breach of fiduciary duty, except as such claim relates to the tender offer for the purchase the Company's Depositary Shares. Pursuant to the Court's April 12, 2004 Order, in May 2004 the plaintiffs filed a third amended complaint and a motion for class certification. Defendants filed an answer denying any and all claims of wrongdoing and asserting affirmative defenses.

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)

(5) Contingencies and Commitments (continued)

(f) $21.25 Preferred Shareholders Class Action Lawsuit (continued)
On November 30, 2004, Perini announced that the parties had reached an agreement for settlement of the Action. Under the terms of the settlement, Perini would purchase all of the Depositary Shares submitted in the settlement for consideration per share of $19.00 in cash and one share of Perini common stock.

On April 19, 2005, the District Court of Massachusetts conditionally certified a class of holders of Depositary Shares for purposes of settlement only. On May 5, 2005, the Court preliminarily approved the settlement as being fair, just, reasonable and adequate, pending a final hearing.

As of July 25, 2005, of the 559,273 Depositary Shares outstanding, 357,285 shares were participating in the settlement and 201,988 shares were the subject of requests for exclusion from the settlement. No one has objected to the settlement. The proposed settlement and the final determination of which shares will participate in the settlement remain subject to approval of the Court and a hearing before the Court for that purpose will be scheduled. Frederick Doppelt will resign from his position as a director of Perini upon Court approval of the settlement.

(6) Provision For Income Taxes
The provision for income taxes reflects a lower-than-normal tax rate in 2004 due to the realization of a portion of the federal tax benefit not recognized in prior years due to certain accounting limitations.

(7) Earnings per Common Share
Basic earnings per common share was computed by dividing net income less dividends accrued on the $21.25 Preferred Stock during the period (see Note 8) by the weighted average number of common shares outstanding. Diluted earnings per common share was similarly computed after giving consideration to the dilutive effect of stock options, warrants and restricted stock units outstanding on the weighted average number of common shares outstanding.

There were no options or stock purchase warrants whose exercise price exceeded the average market price of the Common Stock at June 30, 2005 and 2004. The effect of the assumed conversion of the Company's outstanding $21.25 Preferred Stock into Common Stock was antidilutive for all periods presented.

(8) Dividends
(a) Common Stock
There were no cash dividends declared or paid on the Company's outstanding Common Stock during the periods presented in the consolidated condensed financial statements included herein.

(b) $21.25 Preferred Stock
The covenants of the Company's prior credit agreements required the Company to suspend the payment of quarterly dividends on its $21.25 Preferred Stock until certain financial criteria were met. While quarterly dividends on the $21.25 Preferred Stock have not been paid since 1995, they have been fully accrued due to the "cumulative" feature of the $21.25 Preferred Stock. Accordingly, the aggregate amount of dividends in arrears at June 30, 2005 is approximately $11.6 million, which represents approximately $207.19 per share of $21.25

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)

(8) Dividends (continued)
(b) $21.25 Preferred Stock (continued)
Preferred Stock or approximately $20.72 per Depositary Share and is included in "Other Long-term Liabilities" in the Consolidated Condensed Balance Sheets. Under the terms of the $21.25 Preferred Stock, the holders of Depositary Shares are entitled to elect two additional Directors when dividends have been deferred for more than six quarters, and they did so at each of the last eight annual meetings of stockholders.

(9) Business Segments
The following tables set forth certain business segment information relating to the Company's operations for the six month and three month periods ended June 30, 2005 and 2004 (in thousands):

Six months ended June 30, 2005
                                                                   Reportable Segments
                                               ------------------------------------------------------------
                                                                                Management                                          Consolidated
                                                 Building         Civil         Services         Totals           Corporate             Total
                                               --------------  -------------  -------------   -------------    ----------------    ----------------

Revenues                                           $ 472,439      $ 114,096     $ 163,402        $ 749,937            $      -           $ 749,937
Income from Construction Operations                $  10,934      $   4,564     $  12,143        $  27,641            $ (6,574) *        $  21,067
Assets                                             $ 240,785      $ 272,453     $  49,318        $ 562,556            $ 56,870  **       $ 619,426

Six months ended June 30, 2004
                                                                   Reportable Segments
                                               ------------------------------------------------------------
                                                                                Management                                          Consolidated
                                                 Building         Civil         Services         Totals           Corporate             Total
                                               --------------  -------------  -------------   -------------    ----------------    ----------------

Revenues                                           $ 661,510      $  63,805     $ 250,797        $ 976,112            $      -           $ 976,112
Income from Construction Operations                $  14,682      $  1,229      $  17,067        $  32,978            $ (4,527) *        $  28,451
Assets                                             $ 314,719      $ 212,139     $  23,242        $ 550,100            $ 82,737  **       $ 632,837


Three months ended June 30, 2005
                                                                   Reportable Segments
                                               ------------------------------------------------------------
                                                                                Management                                          Consolidated
                                                 Building         Civil         Services         Totals           Corporate             Total
                                               --------------  -------------  -------------   -------------    ----------------    ----------------

Revenues                                           $ 231,467       $ 63,379     $ 83,538         $ 378,384            $      -           $ 378,384
Income from Construction Operations                $   6,210       $  3,025     $  5,552         $  14,787            $ (3,117) *        $  11,670

Three months ended June 30, 2004
                                                                   Reportable Segments
                                               ------------------------------------------------------------
                                                                                Management                                          Consolidated
                                                 Building         Civil         Services         Totals           Corporate             Total
                                               --------------  -------------  -------------   -------------    ----------------    ----------------

Revenues                                           $ 370,072       $ 36,348     $ 89,388         $ 495,808            $      -           $ 495,808
Income from Construction Operations                $   9,209       $  1,032     $  6,585         $  16,826            $ (2,160) *        $  14,666

* In all periods, consists of corporate general and administrative expenses.

** In all periods, corporate assets consist principally of cash and cash equivalents, net deferred tax asset, land held for sale and other investments available for general corporate purposes.

PERINI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Continued)

(10) Employee Pension Plans
The Company has a defined benefit pension plan that covers its executive, professional, administrative and clerical employees, subject to certain specified service requirements. The Company also has an unfunded supplemental retirement plan for certain employees whose benefits under the defined benefit plan are reduced because of compensation limitations under federal tax laws. In accordance with SFAS No. 132R, “Employers’ Disclosures About Pensions and Other Post-Retirement Benefits”, the pension disclosure presented below includes aggregated amounts for both of the Company’s plans. The following table sets forth the net pension cost by component for the three month and six month periods ended June 30, 2005 and 2004 (in thousands):

                                                             Three Months                 Six Months
                                                            Ended June 30,             Ended June 30,
                                                       -------------------------  --------------------------
                                                          2005          2004         2005           2004
                                                       ----------   ------------  ----------    ------------

Service cost - benefits earned during the period*        $     -        $   536     $     -         $ 1,071
Interest cost on projected benefit obligation              1,071          1,196       2,142           2,392
Expected return on plan assets                              (962)          (968)     (1,924)         (1,935)
Amortization of prior service costs                            -              9           -              18
Recognized actuarial loss                                    445            462         890             925
                                                       ----------   ------------  ----------    ------------

Net Pension Cost                                         $   554        $ 1,235     $ 1,108         $ 2,471
                                                       ==========   ============  ==========    ============

On April 1, 2005, the Company made a $9.0 million contribution to its defined benefit pension plan and does not expect to make further contributions to the pension plan in 2005.

*Effective June 1, 2004, all benefit accruals under the Company’s pension plan were frozen; however, the current vested benefit will be preserved. In accordance with SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits”, a one-time charge of $0.2 million was recorded in 2004.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Perini Corporation is a leading construction services company, based on revenues, as ranked by Engineering News-Record, offering diversified general contracting, construction management and design-build services to private clients and public agencies throughout the world. We have provided construction services since 1894 and 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, preconstruction 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 and steel erection.

Our business is conducted through three primary segments: building, civil, and management services. Our building segment focuses on large, complex projects in the hospitality and gaming, sports and entertainment, educational, transportation and healthcare markets. Our civil segment is involved in public works construction primarily in the northeast and mid-Atlantic regions of the United States, including the repair, replacement and reconstruction of the United States public infrastructure such as highways, bridges and mass transit systems. Our management services segment provides diversified construction, design-build and maintenance services to the U.S. military and government agencies as well as power producers, surety companies and multi-national corporations.

Significant Accounting Policies

Our significant accounting policies are described in Note 1 of Notes to Consolidated Financial Statements included in Item 15 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2004. Our critical accounting policies are also identified and discussed in Item 7 of said Annual Report on Form 10-K. We have made no significant change in these policies during 2005.

Recent Developments

Acquisition of Cherry Hill Construction, Inc.

On January 21, 2005, we completed the acquisition of 100% of the outstanding capital stock of Cherry Hill Construction, Inc. (“Cherry Hill”), a privately held construction company based in Jessup, Maryland, for approximately $20 million in cash, net of cash balance acquired. Cherry Hill is an established civil contractor operating in the Mid-Atlantic and Southeast regions specializing in excavation, foundations, paving and construction of civil infrastructure. The acquisition is effective as of January 1, 2005. At January 1, 2005, Cherry Hill had a firm backlog of approximately $128 million.

Receipt of a Partial Stop Work Order for Work in Iraq

In January 2005, we received a partial stop work order relating to ten partially funded task orders for work in Iraq under our five-year cost-plus-award-fee contract with the U.S. Department of State’s Project and Contracting Office (“PCO”). Since then, we have negotiated and received approval to proceed with the design and construction of five task orders for certain electrical distribution facilities in Iraq. The remaining five task orders were cancelled and we have been reimbursed by the PCO for costs incurred and fees for work performed prior to the cancellation of those task orders. It is estimated that the backlog of remaining uncompleted work under the PCO contract at June 30, 2005 is $54.8 million.

Las Vegas Project CityCenter

In May 2005, we announced that we have been selected for a multi-billion construction contract from MGM MIRAGE to build a major portion of Project CityCenter in Las Vegas, Nevada. The estimated value of our construction contract is in excess of $3 billion, and has not been included in our $1.82 billion backlog at June 30, 2005 pending finalization of contract scope, terms and conditions. MGM MIRAGE has stated it plans to complete the entire project by the end of 2009.

Preferred Stock Class Action Lawsuit

On July 21, 2005, we announced that we expect approximately 357,285 shares of outstanding $2.125 Depositary Convertible Exchangeable Preferred Shares (the “Depositary Shares”) to participate in the previously announced settlement of the class action lawsuit filed by holders of our Depositary Shares. The settlement and the final number of Depositary Shares participating in the settlement remain subject to Court approval. A hearing before the Court to consider approval of the settlement will be scheduled. Under the terms of the settlement, we would purchase all of the participating Depositary Shares that are submitted for $19.00 in cash and one share of our common stock for each Depositary Share. As of June 30, 2005, there were a total of 559,273 Depositary Shares outstanding.

Backlog Analysis for 2005

The following table provides an analysis of our backlog by business segment for the six month period ended June 30, 2005:

                                      Backlog at         New Business              Revenue               Backlog at
                                  December 31, 2004        Awarded               Recognized            June 30, 2005
                                  -----------------   ------------------     -------------------     ------------------
                                                                    (In thousands)
Building                               $   570.1              $ 1,080.5                 $ 472.4              $ 1,178.2
Civil                                      230.7                  335.0                   114.1                  451.6
Management Services                        350.7                    2.5                   163.4                  189.8
                                -----------------     ------------------     -------------------     ------------------
Total                                  $ 1,151.5              $ 1,418.0                 $ 749.9              $ 1,819.6
                                =================     ==================     ===================     ==================

Results of Operations

Comparison of the Second Quarter of 2005 with the Second Quarter of 2004

Although 2005 revenues decreased by $117.4 million as the timing of new work awards was slower than anticipated, gross profit in 2005 increased by $0.8 million, from $23.8 million in 2004 to $24.6 million in 2005, due primarily to the impact of the Cherry Hill acquisition completed in January 2005. Both the building segment and the civil segment experienced improved gross margins in 2005 while the gross margin in the management services segment in 2005 was unchanged from that experienced in 2004. However, income before income taxes decreased by $2.3 million (or 18%), from $13.1 million in 2004 to $10.8 million in 2005, due primarily to an increase in general and administrative expenses of $3.8 million (or 42%) due to the inclusion of expenses of Cherry Hill in 2005 and an increase in compensation expense relating to the amortization of certain restricted stock awards granted in the second half of 2004. The increase in general and administrative expenses was partly offset by a $0.9 million decrease in other expense. In addition, the provision for income taxes increased by $3.4 million, from $1.0 million in 2004 to $4.4 million in 2005, due to the realization in 2004 of a portion of the federal tax benefit not recognized in prior years due to certain accounting limitations. As a result, net income decreased by $5.7 million (or 47%), from $12.2 million in 2004 to $6.5 million in 2005. Basic earnings per common share were $0.24 for the three months ended June 30, 2005, compared to $0.51 for the three months ended June 30, 2004. Diluted earnings per common share were $0.24 for the three months ended June 30, 2005, compared to $0.48 for the three months ended June 30, 2004.

                                     Revenues for the
                                 Three Months Ended June 30,
                            --------------------------------------      Increase           %
                                2005                   2004            (Decrease)       Change
                            --------------        ----------------   --------------   -----------
                                                (In millions)

Building                          $ 231.5                 $ 370.1         $(138.6)       (37.4)%
Civil                                63.4                    36.3            27.1         74.7 %
Management Services                  83.5                    89.4            (5.9)        (6.6)%
                            --------------        ----------------   -------------
Total                             $ 378.4                 $ 495.8         $(117.4)       (23.7)%
                            ==============        ================   =============

Overall revenues decreased by $117.4 million (or 23.7%), from $495.8 million in 2004 to $378.4 million in 2005. This decrease was due primarily to a decrease in building construction revenues of $138.6 million (or 37.4%), from $370.1 million in 2004 to $231.5 million in 2005, due primarily to the timing of the start-up of new work in the hospitality and gaming market as the timing of new work awards was slower than anticipated. Management services revenues decreased by $5.9 million (or 6.6%), from $89.4 million in 2004 to $83.5 million in 2005 due primarily to a decreased volume of work related to the rebuilding of Iraq. These decreases were partly offset by an increase in civil construction revenues of $27.1 million (or 74.7%), from $36.3 million in 2004 to $63.4 million in 2005, due primarily to the impact of the Cherry Hill acquisition.

                                     Income from Construction
                                         Operations for the
                                Three Months Ended June 30,                  Increase
                                --------------------------------------      (Decrease)           %
                                      2005                 2004             In Income          Change
                                -----------------    -----------------    ---------------   -------------
                                                     (In millions)

Building                              $  6.2               $  9.2             $ (3.0)          (32.6)%
Civil                                    3.0                  1.0                2.0           200.0 %
Management Services                      5.6                  6.6               (1.0)          (15.2)%
                                -----------------    -----------------    ---------------
Subtotal                              $ 14.8               $ 16.8             $ (2.0)          (11.9)%

Less:  Corporate                        (3.1)                (2.1)              (1.0)          (47.6)%
                                -----------------    -----------------    ---------------
Total                                 $ 11.7               $ 14.7             $ (3.0)          (20.4)%
                                =================    =================    ===============

Income from operations (excluding corporate) decreased by $2.0 million (or 11.9%), from $16.8 million in 2004 to $14.8 million in 2005. Building construction income from operations decreased by $3.0 million (or 32.6%), from $9.2 million in 2004 to $6.2 million in 2005, due primarily to the decrease in revenues discussed above. Partly offsetting the negative impact of the decrease in building construction revenues was a higher gross profit margin, largely due to profit increases recognized upon the completion and close-out of several hospitality and gaming market projects. Management services income from operations decreased by $1.0 million (or 15.2%), from $6.6 million in 2004 to $5.6 million in 2005, also due primarily to the decrease in revenues discussed above. Civil construction income from operations increased by $2.0 million (or 200.0%), from $1.0 million in 2004 to $3.0 million in 2005, due primarily to the impact of the Cherry Hill acquisition. Partly offsetting the higher civil construction gross profit in 2005 was a $1.5 million increase in civil construction-related general and administrative expenses, due primarily to the addition of Cherry Hill. In addition, income from operations was negatively impacted by a $1.0 million increase in corporate general and administrative expenses, from $2.1 million in 2004 to $3.1 million in 2005, due primarily to a $0.8 million increase in compensation expense relating to the amortization of certain restricted stock awards granted in the second half of 2004.

Other (income) expense decreased by $0.9 million, from an expense of $1.4 million in 2004 to an expense of $0.5 million in 2005, due primarily to $0.6 million of expenses recorded in the second quarter of 2004 related to a public stock offering, as well as a $0.2 million one-time charge recorded in the second quarter of 2004 due to the decision to freeze all benefit accruals under our defined benefit pension plan effective June 1, 2004.

Interest expense increased by $0.2 million, from $0.1 million in 2004 to $0.3 million in 2005, due to interest expense on mortgage debt and equipment financing debt assumed in conjunction with the Cherry Hill acquisition.

The provision for income taxes increased by $3.4 million in 2005, from $1.0 million in 2004 to $4.4 million in 2005. The second quarter of 2004 results reflect a lower than normal tax rate due to the realization of a portion of the federal tax benefit not recognized in prior years due to certain accounting limitations.

Pro Forma Net Income for the Second Quarter of 2004

As mentioned above, our reported net income was $6.5 million and $12.2 million for the three months ended June 30, 2005 and 2004, respectively. Our reported basic earnings per common share were $0.24 and $0.51 for the three months ended June 30, and 2005 and 2004, respectively. Our reported diluted earnings per common share were $0.24 and $0.48 for the three months ended June 30, 2005 and 2004, respectively. Assuming an effective income tax rate of 39%, pro forma net income for the three months

ended June 30, 2004 would have been $8.0 million, as compared to reported net income of $12.2 million for the three months ended June 30, 2004. Similarly, pro forma basic earnings per common share for the three months ended June 30, 2004 would have been $0.33, as compared to reported basic earnings per common share of $0.51 for the three months ended June 30, 2004. Pro forma diluted earnings per common share for the three months ended June 30, 2004 would have been $0.31, as compared to reported diluted earnings per common share of $0.48 for the three months ended June 30, 2004. The reconciliation of reported net income to pro forma net income for the three months ended June 30, 2004 is set forth below under "Reconciliation of Reported Net Income to Pro Forma Net Income for the Three Month and Six Month Periods Ended June 30, 2004."

Comparison of the Six Months Ended June 30, 2005 with the Six Months Ended June 30, 2004

Although 2005 revenues decreased by $226.2 million as the timing of new work awards was slower than anticipated, gross profit in 2005 was equal to the $47.3 million recorded in 2004 due primarily to the impact of the Cherry Hill acquisition completed in January 2005. Moreover, all of the Company's business segments experienced improved gross margins in 2005. However, income before income taxes decreased by $5.2 million (or 21%), from $24.9 million in 2004 to $19.7 million in 2005, due primarily to an increase in general and administrative expenses of $7.5 million (or 40%) due to the inclusion of expenses of Cherry Hill in 2005 and an increase in compensation expense related to the amortization of certain restricted stock awards granted in the second half of 2004. The increase in general and administrative expenses was partly offset by a $2.6 million decrease in other expense. In addition, the provision for income taxes increased by $6.2 million, from $1.5 million in 2004 to $7.7 million in 2005, due to the realization in 2004 of a portion of the federal tax benefit not recognized in prior years due to certain accounting limitations. As a result, net income decreased by $11.4 million (or 49%), from $23.4 million in 2004 to $12.0 million in 2005. Basic earnings per common share were $0.45 for the six months ended June 30, 2005, compared to $0.99 for the six months ended June 30, 2004. Diluted earnings per common share were $0.44 for the six months ended June 30, 2005, compared to $0.91 for the six months ended June 30, 2004.

                                        Revenues for the
                                   Six Months Ended June 30,
                             --------------------------------------    Increase             %
                                   2005                2004           (Decrease)          Change
                             -----------------   ------------------  --------------    -------------
                                                     (In millions)

Building                           $ 472.4              $ 661.5        $ (189.1)           (28.6)%
Civil                                114.1                 63.8        $   50.3             78.8%
Management Services                  163.4                250.8        $  (87.4)           (34.8)%
                             -----------------   ------------------  --------------
Total                              $ 749.9              $ 976.1        $ (226.2)           (23.2)%
                             =================   ==================  ==============

Overall revenues decreased by $226.2 million (or 23.2%), from $976.1 million in 2004 to $749.9 million in 2005. This decrease was due primarily to a decrease in building construction revenues of $189.1 million (or 28.6%), from $661.5 million in 2004 to $472.4 million in 2005, due primarily to the timing of the start-up of new work in the hospitality and gaming market as the timing of new work awards was slower than anticipated. Management services revenues decreased by $87.4 million (or 34.8%), from $250.8 million in 2004 to $163.4 million in 2005 due primarily to a decreased volume of work related to the rebuilding of Iraq. These decreases were partly offset by an increase in civil construction revenues of $50.3 million (or 78.8%), from $63.8 million in 2004 to $114.1 million in 2005, due primarily to the impact of the Cherry Hill acquisition.

                                 Income from Construction
                                    Operations for the
                                Six Months Ended June 30,            Increase
                            -----------------------------------     (Decrease)           %
                                2005                 2004            In Income         Change
                            --------------      ---------------    --------------   -------------
                                                     (In millions)

Building                        $ 10.9               $ 14.7            $ (3.8)          (25.9)%
Civil                              4.6                  1.2               3.4           283.3 %
Management Services               12.1                 17.1              (5.0)          (29.2)%
                            --------------      ---------------    --------------
Subtotal                        $ 27.6               $ 33.0            $ (5.4)          (16.4)%

Less:  Corporate                  (6.5)                (4.5)             (2.0)          (44.4)%
                            --------------      ---------------    --------------
Total                           $ 21.1               $ 28.5            $ (7.4)          (26.0)%
                            ==============      ===============    ==============

Income from operations (excluding corporate) decreased by $5.4 million (or 16.4%), from $33.0 million in 2004 to $27.6 million in 2005. Building construction income from operations decreased by $3.8 million (or 25.9%), from $14.7 million in 2004 to $10.9 million in 2005, due primarily to the decrease in revenues discussed above. Partly offsetting the negative impact of the decrease in building construction revenues was a higher gross profit margin, largely due to profit increases recognized upon the completion and close-out of several hospitality and gaming market projects. Management services income from operations decreased by $5.0 million (or 29.2%), from $17.1 million in 2004 to $12.1 million in 2005, also due primarily to the decrease in revenues discussed above. Partly offsetting the negative impact of the decrease in management services revenues was a higher gross profit margin, largely due to profit increases recognized upon the completion and close-out of two overseas projects. Civil construction income from operations increased by $3.4 million (or 283.3%), from $1.2 million in 2004 to $4.6 million in 2005, due primarily to the impact of the Cherry Hill acquisition. Partly offsetting the higher civil construction gross profit in 2005 was a $3.7 million increase in civil construction-related general and administrative expenses, due primarily to the addition of Cherry Hill. In addition, income from operations was negatively impacted by a $2.0 million increase in corporate general and administrative expenses, from $4.5 million in 2004 to $6.5 million in 2005, due primarily to a $1.6 million increase in compensation expense related to the amortization of certain restricted stock awards granted in the second half of 2004.

Other (income) expense decreased by $2.6 million, from an expense of $3.3 million in 2004 to an expense of $0.7 million in 2005, due primarily to $1.3 million of expenses recorded in 2004 related to a public stock offering, as well as a $1.1 million decrease in the amortization of the intangible asset established in conjunction with the acquisition of Cummings in January 2003 (which is now fully amortized), and a $0.2 million one-time charge recorded in the second quarter of 2004 due to the decision to freeze all benefit accruals under our defined benefit pension plan effective June 1, 2004.

Interest expense increased by $0.4 million, from $0.3 million in 2004 to $0.7 million in 2005, due to interest expense on mortgage debt and equipment financing debt assumed in conjunction with the Cherry Hill acquisition.

The provision for income taxes increased by $6.2 million, from $1.5 million in 2004 to $7.7 million in 2005. The results for the six months ended June 30, 2004 reflect a lower than normal tax rate due to the realization of a portion of the federal tax benefit not recognized in prior years due to certain accounting limitations.

Reconciliation of Reported Net Income to Pro Forma Net Income for the Three Month and Six Month Periods Ended June 30, 2004

As mentioned above, our reported net income was $12.0 million and $23.4 million for the six months ended June 30, 2005 and 2004, respectively. Our reported basic earnings per common share were $0.45 and $0.99 for the six months ended June 30, 2005 and 2004, respectively. Our reported diluted earnings per share were $0.44 and $0.91 for the six months ended June 30, 2005 and 2004, respectively. Assuming an effective income tax rate of 39%, pro forma net income for the six months ended June 30, 2004 would have been $15.2 million, as compared to reported net income of $23.4 million for the six months ended June 30, 2004. Similarly, pro forma basic earnings per common share for the six months ended June 30, 2004 would have been $0.63, as compared to reported basic earnings per common share of $0.99 for the six months ended June 30, 2004. Pro forma diluted earnings per common share for the six months ended June 30, 2004 would have been $0.59, as compared to reported diluted earnings per common share of $0.91 for the six months ended June 30, 2004. The reconciliation of reported net income to pro forma net income for the three month and six month periods ended June 30, 2004 is set forth below:

                                                                                            Three Months             Six Months
                                                                                                Ended                   Ended
                                                                                            June 30, 2004           June 30, 2004
                                                                                           ----------------      --------------------
                                                                                               (in thousands, except per share data)
Reported net income                                                                             $ 12,176               $ 23,397
Plus:  Provision for income taxes                                                                    966                  1,495
                                                                                           ----------------      --------------------
Income before income taxes                                                                        13,142                 24,892
Provision for income taxes assuming 39% effective rate                                             5,125                  9,708
                                                                                           ----------------      --------------------
Pro forma net income                                                                            $  8,017               $ 15,184

Less: Dividends accrued on Preferred Stock                                                          (297)                  (594)
                                                                                           ----------------      --------------------
Pro forma total available for common stockholders                                               $  7,720               $ 14,590
                                                                                           ================      ====================


Pro forma basic earnings per common share                                                       $   0.33               $   0.63
                                                                                           ================      ====================

Pro forma diluted earnings per common share                                                     $   0.31               $   0.59
                                                                                           ================      ====================

Weighted average common shares outstanding:
   Basic                                                                                          23,202                 23,108
   Effect of dilutive stock options, warrants and restricted stock units outstanding               1,766                  1,823
                                                                                           ----------------      --------------------
   Diluted                                                                                        24,968                 24,931
                                                                                           ----------------      --------------------

No reconciliation of reported net income to pro forma net income for the three month and six month periods ended June 30, 2005 is provided since the actual effective tax rate approximates the pro forma tax rate of 39%; therefore, there would be no difference between actual results and pro forma results for the three month and six month periods ended June 30, 2005.

To supplement our unaudited consolidated financial statements presented on a generally accepted accounting principles (GAAP) basis, we sometimes use non-GAAP measures of net income, earnings per share and other measures that we believe are appropriate to enhance an overall understanding of our historical financial performance and future prospects. The non-GAAP results, which are adjusted to exclude certain costs, expenses, gains and losses from the comparable GAAP measures, are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. These non-GAAP results are among the indicators management uses as a basis for evaluating our financial performance as well as for forecasting future periods. For these reasons, management believes these non-GAAP measures can be useful to investors, potential investors and others. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or earnings per share prepared in accordance with GAAP.

Liquidity and Capital Resources

Cash and Working Capital
We have a $50 million revolving credit facility (the “Credit Facility”) which is scheduled to expire in June 2007. The terms of the Credit Facility provide that we can choose from interest rate alternatives including a prime-based rate, as well as options based on LIBOR (London inter-bank offered rate). Management believes that the Credit Facility provides us with the flexibility to provide the working capital needed to support the anticipated growth of our construction activities. At June 30, 2005, we had $47.2 million available to borrow under the Credit Facility.

The Credit Facility requires, among other things, maintaining a minimum tangible net worth, fixed charge coverage and operating profit levels as well as a minimum working capital ratio. The terms of our Credit Facility also prohibit us from incurring additional indebtedness without the consent of our lenders, other than financing for our corporate headquarters, insurance premiums and construction equipment, and impose limitations on the level of capital expenditures that we may make, as well as the purchase and sale of assets outside of the normal course of business. Our obligations under our Credit Facility are guaranteed by substantially all of our current and future subsidiaries, and secured by substantially all of our and our subsidiaries’ assets, including a pledge of all of the capital stock of our subsidiaries.

Cash and cash equivalents as reported in the accompanying consolidated condensed financial statements consist of amounts held by us as well as our proportionate share of amounts held by construction joint ventures. Cash held by us is available for general corporate purposes while cash held by construction joint ventures is available only for joint venture-related uses. Cash held by construction joint ventures is distributed from time to time to us and to the other joint venture participants in accordance with our respective percentage interest after the joint venture partners determine that a cash distribution is prudent. Cash distributions received by us from our construction joint ventures are then available for general corporate purposes. At June 30, 2005 and December 31, 2004, cash held by us and available for general corporate purposes was $43.6 million and $81.0 million, respectively, and our proportionate share of cash held by joint ventures and available only for joint venture-related uses was $51.0 million and $55.3 million, respectively.

A summary of cash flows for each of the six month periods ended June 30, 2005 and 2004 is set forth below:

                                                  Six Months
                                                 Ended June 30,
                                           ----------------------------
                                               2005            2004
                                           ------------    ------------
                                                  (In millions)
Cash flows from:
   Operating activities                        $ (18.3)         $ 20.3
   Investing activities                          (20.7)           (1.4)
   Financing activities                           (2.7)            2.6
                                           ------------    ------------
Net increase (decrease) in cash                $ (41.7)         $ 21.5
Cash at beginning of year                        136.3            67.8
                                           ------------    ------------
Cash at end of period                          $  94.6         $  89.3
                                           ============    ============

During the first six months of 2005, we used $41.7 million of cash on hand to fund $18.3 million in cash flow used by operating activities, principally to fund working capital requirements; $20.7 million to fund cash flow used by investing activities, principally to fund the January 2005 acquisition of Cherry Hill; and $2.7 million to fund cash flow used by financing activities, which was primarily used to pay down a portion of the debt assumed in conjunction with the acquisition of Cherry Hill. As a result, our consolidated cash balance decreased by $41.7 million, from $136.3 million at December 31, 2004 to $94.6 million at June 30, 2005.

Working capital decreased from $178.0 million at the end of 2004 to $172.2 million at June 30, 2005. The current ratio increased from 1.41x at December 31, 2004 to 1.47x at June 30, 2005.

On April 1, 2005, we made a $9.0 million contribution to our defined benefit pension plan and do not expect to make further contributions to the pension plan in 2005.

The amount of unbilled work increased by $5.5 million, from $90.3 million at December 31, 2004 to $95.8 million at June 30, 2005, due primarily to the addition of Cherry Hill and to the timing of certain contract billings.

Long-term Debt
Long-term debt at June 30, 2005 was $18.5 million, an increase of $9.9 million from December 31, 2004, due to mortgage debt and equipment financing debt assumed in conjunction with the Cherry Hill acquisition. Accordingly, the long-term debt to equity ratio increased from .05x at December 31, 2004 to .10x at June 30, 2005.

Dividends
There were no cash dividends declared or paid on our outstanding Common Stock during the periods presented herein.

The covenants in our prior credit agreements required us to suspend the payment of quarterly dividends on our $21.25 Preferred Stock until certain financial criteria were met. While quarterly dividends on the $21.25 Preferred Stock have not been paid since 1995, they have been fully accrued due to the "cumulative" feature of the $21.25 Preferred Stock. The aggregate amount of dividends in arrears is approximately $11.6 million as of June 30, 2005.

In November 2004, an agreement was reached to settle the class action lawsuit filed by the holders of the $21.25 Preferred Stock. (See Note 5(f) of Notes to Consolidated Condensed Financial Statements). On July 21, 2005, we announced that we expect holders of approximately 357,285 shares of outstanding Depositary Shares to participate in the settlement. The settlement and the final number of Depositary Shares participating in the settlement remain subject to Court approval. A hearing before the Court to consider approval of the settlement will be scheduled. Under the terms of the settlement, we would purchase all of the participating Depositary Shares that are submitted for $19.00 in cash and one share of our common stock for each Depositary Share. As of June 30, 2005, there were a total of 559,273 Depositary Shares outstanding.

Our Board of Directors has not decided that our working capital and other conditions warrant the resumption of payment of the regular dividend or any of the dividends in arrears on the $21.25 Preferred Stock. We do not have any plans or target date for resuming the dividend, given the following circumstances:

A strong working capital position provides us with the option of performing large projects without a joint venture partner or to assume the sponsoring partner position resulting in a larger proportionate interest and a greater share of joint venture profits.
A significant amount of working capital is dedicated to the funding requirements of our construction backlog, including collection of receivables and the resolution of unapproved change orders and contract claims, and to obtaining surety bonds required by our business.
We are pursuing a strategy of expanding our construction business internally and through acquisitions, both of which will likely require additional capital. In January 2005, we completed the acquisition of Cherry Hill for $20 million in cash, net of the cash balance acquired.

Forward-looking Statements

The statements contained in this Management's Discussion and Analysis of the Consolidated Condensed Financial Statements and other sections of this Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including without limitation, statements regarding our expectations, hopes, beliefs, intentions or strategies regarding the future. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the potential delay, suspension, termination or reduction in scope of a construction project; the continuing validity of the underlying assumptions and estimates of total forecasted project revenues, costs and profits and project schedules; the outcomes of pending or future litigation, arbitration or other dispute resolution proceedings; the availability of borrowed funds on terms acceptable to us; the ability to retain certain members of management; the ability to obtain surety bonds to secure our performance under certain construction contracts; possible labor disputes or work stoppages within the construction industry; changes in federal and state appropriations for infrastructure projects; possible changes or developments in worldwide or domestic political, social, economic, business, industry, market and regulatory conditions or circumstances; and actions taken or not taken by third parties including our customers, suppliers, business partners, and competitors and legislative, regulatory, judicial and other governmental authorities and officials; and other risks and uncertainties discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2004 filed with the Securities and Exchange Commission on March 4, 2005. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in the Company's exposure to market risk from that described in the Company's annual report on Form 10-K, Item 7A., since December 31, 2004.

Item 4. Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as of the end of the period covered by this report, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. The effectiveness of our disclosure controls and procedures is necessarily limited by the staff and other resources available to us and, although we have designed our disclosure controls and procedures to address the geographic diversity of our operations, this diversity inherently may limit the effectiveness of those controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal

control over financial reporting. In making its assessment of changes in internal control over financial reporting as of June 30, 2005, management has excluded Cherry Hill Construction, Inc. ("Cherry Hill") because this company was acquired in January 2005. The assets and revenues of Cherry Hill as of and for the six months ended June 30, 2005 represent approximately 10% and 7.5%, respectively, of our consolidated assets and revenues as of and for the six months ended June 30, 2005. As part of our integration of Cherry Hill, we are in the process of incorporating our controls and procedures into the operations of Cherry Hill.

In connection with these rules, we will continue to review and document our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

Part II. - Other Information

Item 1. Legal Proceedings
$21.25 Preferred Shareholders Class Action Lawsuit
On October 15, 2002, Frederick Doppelt, Arthur I. Caplan and Leland D. Zulch filed a lawsuit individually,
and as representatives of a class of holders of the $2.125 Depositary Convertible Exchangeable Preferred
Shares, representing 1/10 Share of $21.25 Convertible Exchangeable Preferred Stock ("Depositary Shares")
against certain current and former directors of Perini. This lawsuit is captioned Doppelt, et al. v. Tutor,
et al., and is pending before the United States District Court for the District of Massachusetts. Mr.
Doppelt is a current director of Perini and Mr. Caplan is a former director of Perini. Specifically, the
original complaint alleged that the defendants breached their fiduciary duties owed to the holders of the
Depositary Shares and to Perini. The plaintiffs principally allege that the defendants improperly authorized
the exchange of Series B Preferred Stock for common stock while simultaneously refusing to pay accrued
dividends due on the Depositary Shares.

In July 2003, the plaintiffs filed an amended complaint. The amended complaint added an allegation that the
defendants had further breached their fiduciary duties by authorizing a tender offer for the purchase of up
to 90% of the Depositary Shares and an allegation that the collective actions of the defendants constitute
unfair and deceptive business practices under the provisions of the Massachusetts Consumer Protection Act.
The amended complaint withdrew the allegation of a breach of fiduciary duty owed to Perini, but retained the
allegation with respect to a breach of those duties owed to the holders of the Depositary Shares.

On April 12, 2004, pursuant to Defendants' Motions to Dismiss, the Court dismissed the claim under the
Massachusetts Consumer Protection Act. The Court did not dismiss the claim for breach of fiduciary duty,
except as such claim relates to the tender offer for the purchase the Company's Depositary Shares. Pursuant
to the Court's April 12, 2004 Order, in May 2004 the plaintiffs filed a third amended complaint and a motion
for class certification. Defendants filed an answer denying any and all claims of wrongdoing and asserting
affirmative defenses.

On November 30, 2004, Perini announced that the parties had reached an agreement for settlement of the
Action. Under the terms of the settlement, Perini would purchase all of the Depositary Shares submitted in
the settlement for consideration per share of $19.00 in cash and one share of Perini common stock.

On April 19, 2005, the District Court of Massachusetts conditionally certified a class of holders of
Depositary Shares for purposes of settlement only. On May 5, 2005, the Court preliminarily approved the
settlement as being fair, just, reasonable and adequate, pending a final hearing.

As of July 25, 2005, of the 559,273 Depositary Shares outstanding, 357,285 shares were participating in the
settlement and 201,988 shares were the subject of requests for exclusion from the settlement. No one has
objected to the settlement. The proposed settlement and the final determination of which shares will
participate in the settlement remain subject to approval of the Court and a hearing before the Court for
that purpose will be scheduled. Frederick Doppelt will resign from his position as a director of Perini
upon Court approval of the settlement.

Part II. - Other Information (continued)


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)     None

(b)     Not applicable

(c)     Not applicable

Item 3. Defaults Upon Senior Securities

(a)     None

(b)     In accordance with the covenants of certain prior credit agreements, the Company was required to
        suspend the payment of quarterly dividends on its $21.25 Convertible Exchangeable Preferred Stock
        ("$21.25 Preferred Stock") until certain financial criteria were met.  Although the financial criteria
        were satisfied as of December 31, 2000, the Company has not paid dividends on the $21.25
        Preferred Stock since 1995.  While the Company's most recent Credit Facility does not currently
        restrict such dividends, the Board of Directors does not believe that it is proper or prudent to pay or
        commit to pay dividends on the $21.25 Preferred Stock for the foreseeable future based on the
        Company's other working capital requirements. See additional comments under "Liquidity and
        Capital Resources" on pages 25 and 26 of this Quarterly Report.  As of June 30, 2005, the
        aggregate amount of dividends in arrears is approximately $11.6 million, which represents
        approximately $207.19 per share of $21.25 Preferred Stock or approximately $20.72 per
        Depositary Share.  While these dividends have not been declared or paid, they have been fully
        accrued in accordance with the "cumulative" feature of the $21.25 Preferred Stock.

Item 4. Submission of Matters to a Vote of Security Holders

(a)     The Company's Annual Meeting of Stockholders was held on May 19, 2005.

(b)     Not applicable

(c)     Results of voting at the 2005 Annual Meeting of Stockholders were as follows:

        (1)    Each of the following persons was elected by the holders of Common Stock as a Class III
               Director to hold office for a three-year term expiring in 2008 and until their successors are
               chosen and qualified:

                                                                         Number of Votes
                                                               -------------------------------------
                                                                                      Authority
                             Class III Director                     For                Withheld
                             ------------------                ---------------     -----------------

               Peter Arkley                                     18,002,315            5,978,058
               James A. Cummings                                23,917,344               63,029
               Raymond R. Oneglia                               23,581,769              398,604

        (2)    Two nominees for Preferred Directors (the "Preferred Directors") to hold office until the earlier
               of (i) the 2006 Annual Meeting of Stockholders and until their successors are chosen and
               qualified, or (ii) all dividends in arrears on the Preferred Stock have been paid or declared and
               funds therefor set apart for payment, were elected by the Depositary, based on the two
               nominees who received the greatest number of votes as indicated by the holders of the
               Depositary Shares.  A summary of the voting results follows:

Part II. - Other Information (continued)

Number of Votes
---------------------------------
Nominees for Authority
Preferred Directors For Withheld
------------------- ------------- ----------------

Frederick Doppelt 300,716 1,750
Martin Shubik 234,389 3,100
Leland D. Zulch 63,883 1,000

(d) Not applicable

Item 5. Other Information

(a) None

(b) None

Item 6. Exhibits

Exhibit 10.1 Fifth Amendment dated March 31, 2005 to Credit Agreement among Perini Corporation,
Fleet National Bank, as Administrative Agent, and the Lenders - filed herewith.

Exhibit 31.1 Certification of Principal Executive Officer Pursuant to Section 302 of Sarbanes-Oxley
Act of 2002 - filed herewith.

Exhibit 31.2 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 - filed herewith.

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 - filed herewith.

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 - filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

                                                                                        Perini Corporation
                                                                                                                     Registrant

Date: August 5, 2005                                                                                /s/Michael E. Ciskey
                                                                                                                     Michael E. Ciskey, Vice President and Chief Financial Officer
                                                                                                                     Duly Authorized Officer and Principal Accounting Officer

EX-10 2 fifthamndmnt.htm EXHIBIT 10.1 Fifth Amendment to Credit Agreement

Exhibit 10.1

Execution Version

PERINI CORPORATION
FIFTH AMENDMENT

THIS FIFTH AMENDMENT (this “Amendment”) is entered into as of March 31, 2005 by and among PERINI CORPORATION, a Massachusetts corporation (the “Borrower”), with its chief executive office at 73 Mt. Wayte Avenue, Framingham, Massachusetts 01701, FLEET NATIONAL BANK, as Administrative Agent (the “Agent”), and the Lenders under the Credit Agreement, as defined below. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement, as defined below.

R E C I T A L S

WHEREAS, the Borrower, the Agent and the Lenders have previously entered into a Credit Agreement dated as of January 23, 2002, as amended by a First Amendment and Waiver dated as of February 14, 2003, a Second Amendment dated as of November 5, 2003, a Third Amendment dated as of January 31, 2004 and a Fourth Amendment and Waiver dated as of August 25, 2004 (collectively, the “Credit Agreement”);

WHEREAS, the Borrower has advised the Agent that the Borrower has entered into a Stock Purchase Agreement dated January 20, 2005 among the Borrower, Cherry Hill Construction, Inc., a Maryland corporation (“Cherry Hill”) and the Shareholders named therein pursuant to which the Borrower has purchased all of the outstanding stock in Cherry Hill (the “Acquisition Transaction”) and has requested that the Lenders consent to the Acquisition Transaction and waive any restrictions contained in the Credit Agreement that may have resulted from the Acquisition Transaction, and the Lenders have agreed to grant such consent on the terms and conditions set forth herein;

WHEREAS, the Borrower has advised the Agent that the Borrower has executed a certain Memorandum of Understanding dated as of October 28, 2004 providing for a settlement of the litigation referenced therein, and has requested that the Lenders permit the Borrower to make the Restricted Payments contemplated thereby, and the Lenders have agreed to permit such payments on the terms and conditions set forth herein;

WHEREAS, the Borrower has requested that the Lenders consent to Amendment Number 5 to Management Agreement dated as of December 31, 2002, Amendment Number 6 to Management Agreement dated as of January 1, 2004, Amendment Number 7 to Management Agreement dated as of September 15, 2004, and Amendment Number 8 to Management Agreement dated as of September 15, 2004 and executed on December 15, 2004 (each a “Management Agreement Amendment”, collectively the “Management Agreement Amendments”), and the Lenders have agreed to provide such consent on the terms and conditions set forth herein;

WHEREAS, the Borrower has requested that certain other modifications be made to the Credit Agreement, and the Lenders have agreed to permit such modifications to the Credit Agreement on the terms and conditions set forth herein;

-2-

NOW THEREFORE, in consideration of the foregoing premises and the mutual benefits to be derived by the Borrower, the Agent and the Lenders from a continuing relationship under the Credit Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged:

A. Consent to Cherry Hill Acquisition. The Lenders hereby consent to the Acquisition Transaction and waive any restrictions or prohibitions on or against the Acquisition Transaction contained in the Credit Agreement, including, without limitation, the restrictions and prohibitions contained in Section 5.14 of the Credit Agreement, such consent to be deemed effective as of the effective date of the Acquisition Transaction.

B. Consent to Management Agreement Amendments. The Lenders hereby consent to the Management Agreement Amendments and waive the restrictions contained in Section 5.17 of the Credit Agreement to the Management Agreement Amendments, each such consent to be deemed effective as of the date of each Management Agreement Amendment.

C. Amendments to Credit Agreement. The parties hereto agree to amend the Credit Agreement as follows:

1. The defined terms "Cash Management Letter", "Consolidated Capital Expenditures", "Management Agreement" and "Permitted Accounts" appearing in Section 1.01 of the Credit Agreement are hereby amended in their entirety to read as follows:

“Cash Management Letter” means a letter from the Borrower to the Agent dated January 15, 2002 describing the cash management system of the Borrower and its Subsidiaries, in form and detail reasonably satisfactory to the Lenders.

“Consolidated Capital Expenditures” means, for any period, the aggregate amount of expenditures by the Borrower and its Consolidated Subsidiaries for plant, property and equipment during such period (including (1) any such expenditure by way of acquisition of a Person or by way of assumption of indebtedness or other obligations of a Person, to the extent reflected as plant, property and equipment and (2) capitalized equipment leases), but excluding any such expenditures made for the replacement or restoration of assets to the extent financed by condemnation awards or proceeds of insurance received with respect to the loss or taking of or damage to the asset or assets being replaced or restored.

“Management Agreement” means the Management Agreement dated as of January 17, 1997 among the Borrower, Tutor Saliba Corporation and Tutor, as amended by Amendment No. 1 (effective as of December 10, 1998) Amendment Number 2 To Management Agreement dated as of December 31, 1999, Amendment Number 3 To Management Agreement dated as of December 31, 2000, Amendment Number 4 To Management Agreement dated as of December 31, 2001, Amendment Number 5 to Management Agreement dated as of December 31, 2002, by Amendment Number 6 to Management Agreement dated as of January 1, 2004, by Amendment Number 7 to Management

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Agreement dated as of September 15, 2004, and by Amendment Number 8 to Management Agreement dated as of December 15, 2004, and as further amended from time to time hereafter in accordance with the terms hereof.

“Permitted Accounts” means, collectively, (i) until August 31, 2005, all accounts maintained by Cherry Hill with Branch Banking and Trust Company of Virginia (the “BB&T Accounts”) listed on Schedule 4.15, (ii) other than the BB&T Accounts, the deposit, checking, operating, investment and other bank accounts listed on Schedule 4.15, (iii) payroll and petty cash accounts opened in the ordinary course of business with imprest balances not to exceed $7,500 for each such account, (iv) all other deposit, checking, operating, investment and other bank accounts established after the Effective Date with any Lender, or, with the prior written consent of the Required Lenders, any other depositary institution or securities intermediary provided that, at the request of the Required Lenders, the Borrower will deliver to the Agent an Account Control Agreement, in form and substance satisfactory to the Agent, duly executed by the owner of such account (either the Borrower or the Borrower’s Subsidiary, as the case may be) and such depositary institution or securities intermediary, as the case may be, and (v) the Cash Collateral Account established pursuant to the Security Agreement.

2. Section 1.01 of the Credit Agreement is hereby further amended by the addition of the following new defined terms:

"Cherry Hill" means Cherry Hill Construction, Inc., a Maryland corporation.

“Cherry Hill Acquisition” means the acquisition by the Borrower of all of the issued and outstanding capital stock of Cherry Hill pursuant to that certain Stock Purchase Agreement dated as of January 20, 2005 among the Borrower, Cherry Hill and the Shareholder named therein.

“District Court” has the meaning set forth in Section 5.12(c).

“MOU” has the meaning set forth in Section 5.12(c).

3. Section 5.01 of the Credit Agreement is hereby amended by deleting the "and" at the end of Section 5.01(p), renumbering Section 5.01(q) as Section 5.01(r), and adding the following new Section 5.01(q) immediately following Section 5.01(p) of the Credit Agreement:

(q) prompt written notice of any election by the Borrower to terminate the settlement contemplated by the MOU pursuant to numbered Paragraph 9 thereof; and

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4. Section 5.08(e) of the Credit Agreement is hereby amended its entirety to read as follows:

(e) Debt incurred or assumed by the Borrower or one of its Subsidiaries for the purpose of financing all or any part of the cost of acquiring any equipment of the Borrower or one of its Subsidiaries (including through capital leases); and

5. Section 5.08 of the Credit Agreement is hereby further amended to add the following new subsections 5.08(h), 5.08(i), 5.08(j), and 5.08(k) immediately following existing subsection 5.08(g):

(h) Debt incurred in connection with the acquisition of any Real Property used in the conduct of the Construction Business in an aggregate amount not to exceed $750,000 and any refinancing, extension, renewal or refunding thereof, provided that any refinancing, extension, renewal or refunding of any such Debt shall not increase the principal amount of such Debt outstanding at the time of such refinancing, extension, renewal or refunding.

(i) Debt owing to Branch Banking and Trust Company of VA in an amount not to exceed $2,305,000 with respect to the mortgage financing for the property located at 8211 Washington Boulevard, Jessup, Maryland, and any refinancing, extension, renewal or refunding thereof, provided that any refinancing, extension, renewal or refunding of any such Debt shall not increase the principal amount of such Debt outstanding at the time of such refinancing, extension, renewal or refunding.

(j) Debt owing to Colonial Bank in an amount not to exceed $300,000 with respect to the mortgage financing for the property located at3538 U.S. Highway 17 North, Barton, Florida, and any refinancing, extension, renewal or refunding thereof, provided that any refinancing, extension, renewal or refunding of any such Debt shall not increase the principal amount of such Debt outstanding at the time of such refinancing, extension, renewal or refunding.

(k) Debt owing to Citizens National Bank N.A. in an amount not to exceed:

(1) $436,000 with respect to the mortgage financing for the property located at 7407 and 7381 Montevideo Road, Jessup, Maryland,

(2) $860,000 with respect to the mortgage financing for the property located at 7053 Brookdale Drive, Elkridge, Maryland, and

(3) $446,000 with respect to the mortgage financing for the property located at 8900 Corridor Road, Annapolis Junction, Maryland,

and any refinancing, extension, renewal or refunding thereof, provided that any refinancing, extension, renewal or refunding of any such Debt shall not increase the principal amount of such Debt outstanding at the time of such refinancing, extension, renewal or refunding.

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6. Section 5.09(b) of the Credit Agreement is hereby amended to add new subsection 5.09(b)(viii) immediately following subsection 5.09(b)(vii):

(viii) Dispositions of any Equipment owned by Cherry Hill at the time of the Cherry Hill Acquisition.

7. Section 5.10(b) of the Credit Agreement is hereby amended its entirety to read as follows:

(b) any Lien on any equipment securing Debt incurred or assumed for the purpose of financing all or any part of the cost of acquiring such equipment (including through capital leases), provided that (i) such Lien attaches to such equipment concurrently with or within 90 days after the acquisition thereof and (ii) such Lien secures only such Debt;

8. Section 5.10 of the Credit Agreement is hereby further amended by deleting the "and" at the end of Section 5.10(g), renumbering Section 5.10(h) as Section 5.10(i), and adding the following new Section 5.01(h) immediately following Section 5.10(g) of of the Credit Agreement:

(h) Liens on any real property securing Debt of the Borrower or a Consolidated Subsidiary permitted by Section 5.08(g), Section 5.08(h), Section 5.08(i), Section 5.08(j), or Section 5.08(k) provided that such Lien secures only such Debt.

9. Section 5.12 of the Credit Agreement is hereby amended by deleting the "and" at the end of Section 5.12(b), renumbering Section 5.12(c) as Section 5.12(d), and adding the following new Section 5.12(c) immediately following Section 5.12(b) of the Credit Agreement:

(c) so long as the Borrower has not elected to terminate the settlement contemplated by the Stipulation of Settlement dated as of February 5, 2005 (the "Stipulation") pursuant to numbered paragraph 4 thereof, the purchase of Senior Depositary Preferred Stock, as defined in the Stipulation, pursuant to the terms thereof, provided that on or before the effective date of any such purchases, the Borrower shall have delivered to the Agent a certificate from the Borrower confirming (i) entry of final order or judgment by the District Court of Massachusetts (the "Court") approving the settlement contemplated by the Stipulation; and (ii) dismissal by the Court of the litigation described in the Stipulation with prejudice; and

10. Section 5.13 of the Credit Agreement is hereby amended its entirety to read as follows:

Section 5.13. Real Estate Investments. The Borrower will not, and will not permit any Consolidated Subsidiary to, make any Real Estate Investment; other than:

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(i) the Peekskill Facility, and (ii) incurring reasonable costs associated with the Peekskill Facility and any other real property owned by the Borrower or any Consolidated Subsidiary on the date hereof in accordance with the Real Estate Plan.

11. Section 5.19 of the Credit Agreement is hereby amended its entirety to read as follows:

Section 5.19. Cash Management System. Without the prior written consent of the Required Lenders, the Borrower will not modify the cash management system of the Borrower and its Subsidiaries from that described in the Cash Management Letter. Neither the Borrower nor any Subsidiary Guarantor shall maintain any deposit, checking, operating, investment or other bank accounts other than the Permitted Accounts.

12. Section 5.21 of the Credit Agreement is hereby deleted and intentionally omitted.

13. The Borrower represents and warrants that after giving effect to the Acquisition Transaction, the information set forth in Schedule 4.09 ("Subsidiaries of Perini Corporation") and Schedule 4.15 ("Schedule Of Bank Accounts") attached to this Amendment is complete and correct as of the date of this Amendment.

D. Representations and Warranties. The Borrower represents and warrants to the Agent and the Lenders that: (a) the Borrower has the full power and authority to execute, deliver and perform its respective obligations under, the Credit Agreement, as amended by this Amendment, (b) the execution and delivery of this Amendment has been duly authorized by all necessary action of the Board of Directors of the Borrower; (c) after giving effect to this Amendment, including without limitation the Schedules attached hereto, the representations and warranties contained or referred to in Article IV of the Credit Agreement are true and accurate in all material respects as if such representations and warranties were being made as of the date of this Amendment without giving effect to any earlier date referenced therein with respect thereto; and (d) after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

E. Other.

1. This Amendment shall take effect upon receipt by the Agent of:

(i) this Amendment duly executed and delivered by the Borrower;

(ii) new Annex A to the Borrower Pledge Agreement executed by the Borrower, together with original stock certificates #21 and #22 evidencing 3,300 shares of Class B common stock of Cherry Hill and 330 shares of Class A common stock of Cherry Hill, respectively, outstanding in the name of the Borrower and executed and undated stock powers with respect to such shares;

-7-

(iii) the Joinder Agreement, substantially in the form of Exhibit A to Subsidiary Guarantee Agreement, executed by Cherry Hill;

(iv) the Joinder Agreement, substantially in the form of Exhibit A to Security Agreement, executed by Cherry Hill;

(v) a Clerk's Certificate executed by the Clerk of the Borrower with regard to resolutions, organizational matters and officer incumbencies;

(vi) Legal Existence/Good Standing Certificate issued by the Massachusetts Secretary of the Commonwealth for the Borrower;

(vii) a Secretary's Certificate executed by the Secretary of Cherry Hill with regard to resolutions, organizational matters and officer incumbencies;

(viii) Certified copies of organizational documents for Cherry Hill on file with the Maryland Secretary of State;

(ix) Legal Existence/Good Standing Certificate issued by the Maryland Secretary of State for Cherry Hill;

(x) evidence of all filings made with all appropriate recording and governmental offices as the Agent shall deem necessary to perfect the security interests granted by Cherry Hill under the Security Agreement, including without limitation, a UCC-1 naming Cherry Hill, as Debtor, and the Agent, as Secured Party, to be filed with the Maryland Department of Assessments and Taxation (the "MD Financing Statement"), together with all appropriate fees and taxes, if any;

(xi) evidence of the termination of the UCC-1 filed on May 13, 2004 with the Maryland Department of Assessments and Taxation as Work Order: 0000895561 naming Cherry Hill, as Debtor, and Branch Banking and Trust Company of VA, as Secured Party;

(xii) (a) an opinion of counsel for the Borrower addressed to the Agent and dated the date of this Amendment which opinion meets the Agent's reasonable legal opinion requirements, and (b) an opinion of counsel for Cherry Hill addressed to the Agent and dated the date of this Amendment which opinion meets the Agent's reasonable legal opinion requirements, including, without limitation, an opinion that no recordation tax will be due upon the filing of the MD Financing Statement; and

(xiii) Payment of all costs and expenses (including, without limitation, the reasonable costs and expenses of the Agent's counsel) incurred by the Agent in connection with this Amendment.

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2. This Amendment is executed as an instrument under seal and shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts without regard to its conflicts of law rules. All parts of the Credit Agreement, the Financing Documents and the Fee Letter not affected by this Amendment are hereby ratified and affirmed in all respects, provided that if any provision of the Credit Agreement shall conflict or be inconsistent with this Amendment, the terms of this Amendment shall supersede and prevail. Upon the execution of this Amendment, all references to the Credit Agreement in that document, or in any related document, shall mean the Credit Agreement as amended by this Amendment. Except as expressly provided in this Amendment, the execution and delivery of this Amendment does not and will not amend, modify or supplement any provision of, or constitute a consent to or a waiver of any noncompliance with the provisions of the Credit Agreement, and, except as specifically provided in this Amendment, the Credit Agreement shall remain in full force and effect. This Amendment may be executed in one or more counterparts with the same effect as if the signatures hereto and thereto were upon the same instrument.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, each of the Borrower, the Agent and the Lenders in accordance with Section 9.05 of the Credit Agreement, has caused this Amendment to be executed and delivered by their respective duly authorized officers as of the date set forth in the preamble on page one of this Amendment.

                                                      BORROWER:

WITNESSED:                                            PERINI CORPORATION


/s/Tammi Rice                                         By: /s/Susan C. Mellace
Tammi Rice                                                   Susan C. Mellace
Print Name                                                   Treasurer

                                                      AGENT:

                                                      FLEET NATIONAL BANK, as Agent


                                                      By: /s/Thomas F. Brennan
                                                             Thomas F. Brennan
                                                             Senior Vice President

                                                      LENDERS:

                                                      FLEET NATIONAL BANK


                                                      By: /s/Thomas F. Brennan
                                                             Thomas F. Brennan
                                                             Senior Vice President


                                                      BANKNORTH, N.A.


                                                      By: /s/Jon R. Sundstrom
                                                             Jon R. Sundstrom
                                                             Senior Vice President

EX-31 3 ex311_rnt2q05.htm RONALD N. TUTOR CERTIFICATION Exhibit 31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I, Ronald N. Tutor, certify that:

I have reviewed this quarterly report on Form 10-Q of Perini Corporation (the "registrant");
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 5, 2005                                                                                                           /s/Ronald N. Tutor
                                                                                                                                               Ronald N. Tutor
                                                                                                                                               Chairman and Chief Executive Officer

EX-31 4 ex312_mec2q05.htm MICHAEL E. CISKEY CERTIFICATION Exhibit 31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

I, Michael E. Ciskey, certify that:

I have reviewed this quarterly report on Form 10-Q of Perini Corporation (the "registrant");
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 5, 2005                                                                                                                      /s/Michael E. Ciskey
                                                                                                                                                          Michael E. Ciskey
                                                                                                                                                          Vice President and Chief Financial Officer

EX-32 5 ex321_rnt2q05.htm RONALD N. TUTOR CERTIFICATION Exhibit 32.1

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

In connection with the Quarterly Report of Perini Corporation (the “Company”) on Form 10-Q for the period ending June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ronald N. Tutor, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 5, 2005                                                                                                                 /s/Ronald N. Tutor
                                                                                                                                                     Ronald N. Tutor
                                                                                                                                                     Chairman and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Perini Corporation and will be retained by Perini Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32 6 ex322_mec2q05.htm MICHAEL E. CISKEY CERTIFICATION Exhibit 32.2

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

In connection with the Quarterly Report of Perini Corporation (the “Company”) on Form 10-Q for the period ending June 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael E. Ciskey, Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 5, 2005                                                                                                              /s/Michael E. Ciskey
                                                                                                                                                  Michael E. Ciskey
                                                                                                                                                  Vice President and Chief Financial Officer

-----END PRIVACY-ENHANCED MESSAGE-----

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q

Part I. – Financial Information

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Significant Accounting Policies

Recent Developments

Results of Operations

Liquidity and Capital Resources

SIGNATURES

PERINI CORPORATION FIFTH AMENDMENT

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

PERINI CORPORATION
FIFTH AMENDMENT

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002