-----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, GAp6EVBEvajU8CHvpBhqaZ01O9Cjuen0tkc2HQ5KldmqINit2Mp9AbLGyrnX0sgt hd5yOzdz+wgNuDJYx5xugA== 0000077543-98-000008.txt : 19980814 0000077543-98-000008.hdr.sgml : 19980814 ACCESSION NUMBER: 0000077543-98-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980813 SROS: AMEX 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: SEC FILE NUMBER: 001-06314 FILM NUMBER: 98685928 BUSINESS ADDRESS: STREET 1: 73 MT WAYTE AVE CITY: FRAMINGHAM STATE: MA ZIP: 01701 BUSINESS PHONE: 5086282000 10-Q 1 PERINI CORPORATION 1998 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, 1998 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 At August 12, 1998 5,413,647 shares of common stock of the registrant were outstanding. Page 1 of 15
PERINI CORPORATION & SUBSIDIARIES INDEX Page Number Part I. - Financial Information: Item 1. Financial Statements Consolidated Condensed Balance Sheets - 3 June 30, 1998 and December 31, 1997 Consolidated Condensed Statements of Income - 4 Three Months and Six Months ended June 30, 1998 and 1997 Consolidated Condensed Statements of Cash Flows - 5 Six Months ended June 30, 1998 and 1997 Notes to Consolidated Condensed Financial Statements 6 - 7 Item 2. Management's Discussion and Analysis of the Consolidated 8 - 10 Financial Condition and Results of Operations Part II. - Other Information: Item 1. Legal Proceedings 11 Item 2. Changes in Securities 11 Item 3. Defaults Upon Senior Securities 11 Item 4. Submission of Matters to a Vote of Security Holders 11 - 12 Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 - 14 Signatures 15
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PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS JUNE 30, 1998 (UNAUDITED) AND DECEMBER 31, 1997 (In Thousands) ASSETS JUNE 30, DEC. 31, 1998 1997 ---------------- ---------------- Cash $ 47,846 $ 31,305 Accounts and Notes Receivable 109,830 139,221 Unbilled Work 20,728 36,574 Construction Joint Ventures 70,160 71,056 Real Estate Inventory, at the lower of cost or market 17,257 25,145 Deferred Tax Asset 986 1,067 Other Current Assets 4,912 1,808 ---------------- ---------------- Total Current Assets $ 271,719 $ 306,176 ---------------- ---------------- Land Held for Sale or Development $ 13,383 $ 7,093 Investments in and Advances to Real Estate Joint Ventures 84,779 86,598 ---------------- ---------------- Total Real Estate Development Investments $ 98,162 $ 93,691 ---------------- ---------------- Other Assets $ 4,111 $ 4,581 ---------------- ---------------- Property and Equipment, less Accumulated Depreciation of $17,866 in 1998 and $19,406 in 1997 $ 9,672 $ 10,476 ---------------- ---------------- $ 383,664 $ 414,924 ================ ================ LIABILITIES AND STOCKHOLDERS' EQUITY ================ ================ Current Maturities of Long-Term Debt $ 3,376 $ 11,873 Accounts Payable 128,123 145,118 Advances from Construction Joint Ventures 24,101 29,801 Deferred Contract Revenue 28,824 17,117 Accrued Expenses 38,456 30,296 ---------------- ---------------- Total Current Liabilities $ 222,880 $ 234,205 ---------------- ---------------- Deferred Income Taxes and Other Liabilities $ 14,565 $ 24,101 ---------------- ---------------- Long-Term Debt, including real estate development debt of $322 in 1998 and $322 in 1997 $ 66,434 $ 84,898 ---------------- ---------------- Minority Interest $ 1,064 $ 1,064 ---------------- ---------------- Redeemable Convertible Series B Preferred Stock $ 31,605 $ 29,756 ---------------- ---------------- Stockholders' Equity: Preferred Stock $ 100 $ 100 Series A Junior Participating Preferred Stock --- --- Stock Purchase Warrants 2,233 2,233 Common Stock 5,506 5,267 Paid-In Surplus 52,216 53,012 Retained Earnings (9,961) (15,294) ESOT Related Obligations (1,501) (2,663) ---------------- ---------------- $ 48,593 $ 42,655 Less - Treasury Stock 1,477 1,755 ---------------- ---------------- Total Stockholders' Equity $ 47,116 $ 40,900 ---------------- ---------------- $ 383,664 $ 414,924 ================ ================
The accompanying notes are an integral part of these financial statements. 3
PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) (In Thousands, Except Per Share Data) THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, 1998 1997 1998 1997 --------------- --------------- --------------- --------------- REVENUES FROM OPERATIONS: Construction $ 273,761 $ 361,651 $ 492,963 $ 679,168 Real Estate 4,450 27,273 14,630 36,975 --------------- --------------- --------------- --------------- TOTAL REVENUES FROM OPERATIONS $ 278,211 $ 388,924 $ 507,593 $ 716,143 --------------- --------------- --------------- --------------- COST AND EXPENSES: Cost of Operations $ 265,853 $ 375,712 $ 482,767 $ 690,799 General, Administrative and Selling Expenses 7,420 8,116 14,364 14,936 --------------- --------------- --------------- --------------- $ 273,273 $ 383,828 $ 497,131 $ 705,735 --------------- --------------- --------------- --------------- INCOME FROM OPERATIONS $ 4,938 $ 5,096 $ 10,462 $ 10,408 Other Income (Expense), Net (105) (327) (438) (925) Interest Expense (1,519) (2,321) (4,301) (5,059) --------------- --------------- --------------- --------------- Income Before Income Taxes $ 3,314 $ 2,448 $ 5,723 $ 4,424 Provision for Income Taxes (Note 2) 200 115 390 230 --------------- --------------- --------------- --------------- NET INCOME $ 3,114 $ 2,333 $ 5,333 $ 4,194 =============== =============== =============== =============== BASIC AND DILUTED EARNINGS PER SHARE (Note 3) $ 0.31 $ 0.19 $ 0.46 $ 0.34 =============== =============== =============== =============== DIVIDENDS PER COMMON SHARE (Note 4) $ --- $ --- $ --- $ --- =============== =============== =============== =============== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 3) 5,294,042 5,033,462 5,235,329 4,975,685 =============== =============== =============== ===============
The accompanying notes are an integral part of these financial statements. 4
PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997 (In Thousands) SIX MONTHS ENDED JUNE 30, 1998 1997 -------------- -------------- Cash Flows from Operating Activities: Net Income $ 5,333 $ 4,194 Adjustments to reconcile net income to net cash provided from operating activities: Depreciation and amortization 1,127 1,293 Noncurrent deferred taxes and other liabilities 480 (136) Distributions greater (less) than earnings of joint ventures and affiliates 964 (6,563) Cash provided from (used by) changes in components of working capital other than cash and current maturities of long-term debt 26,515 (6,826) Sale of interest in real estate joint venture --- 17,149 Real estate development investments other than joint ventures 6,534 (377) Other non-cash items, net (947) (600) -------------- -------------- NET CASH PROVIDED FROM OPERATING ACTIVITIES $ 40,006 $ 8,134 -------------- -------------- Cash Flows from Investing Activities: Proceeds from sale of property and equipment $ 509 $ 400 Cash distributions of capital from unconsolidated joint ventures 2,153 16,904 Acquisition of property and equipment (428) (840) Improvements to land held for sale or development (158) (90) Capital contributions to unconsolidated joint ventures (677) (1,948) Advances to real estate joint ventures, net (1,766) (4,072) Investments in other activities 440 885 -------------- -------------- NET CASH PROVIDED FROM INVESTING ACTIVITIES $ 73 $ 11,239 -------------- -------------- Cash Flows from Financing Activities: Series B preferred stock issued, net $ --- $ 26,558 Proceeds of long-term debt 3,162 --- Repayment of long-term debt (29,333) (15,564) Common stock issued 2,482 1,701 Treasury Stock Issued 151 165 -------------- -------------- NET CASH (USED BY) PROVIDED FROM FINANCING ACTIVITIES $ (23,538) $ 12,860 -------------- -------------- Net Increase in Cash $ 16,541 $ 32,233 Cash at Beginning of Period 31,305 9,745 -------------- -------------- Cash at End of Period $ 47,846 $ 41,978 ============== ============== Supplemental Disclosures of Cash paid during the period for: Interest $ 3,331 $ 5,013 ============== ============== Income tax payments $ 261 $ 253 ============== ============== Supplemental Disclosures of Non-cash Transactions: Dividends paid in shares of Series B Preferred Stock (Note 4) $ 1,664 $ 1,246 ============== ==============
The accompanying notes are an integral part of these financial statements. 5 PERINI CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (1) 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 Form 10-K for the year ended December 31, 1997. The Company has made no significant change in these policies during 1998. (2) Provision For Income Taxes The lower-than-normal tax rate in 1998 and 1997 reflects the realization of a portion of the tax benefit not recognized in prior years due to certain accounting limitations. (3) Per Share Data Computations of basic and diluted earnings per common share ("EPS") amounts are based on the weighted average number of the Company's common shares outstanding during the periods presented. Earnings available for common shares are calculated as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, ------------------------------ ------------------------------ 1998 1997 1998 1997 ------------ ------------ ------------ ------------ Net Income $ 3,114 $ 2,333 $ 5,333 $ 4,194 ------------ ------------ ------------ ------------ Less: Accrued dividends on Senior Preferred Stock (531) (531) (1,062) (1,062) Dividends declared on Series B Preferred Stock (842) (762) (1,664) (1,246) Accretion deduction required to reinstate mandatory redemption value of Series B Preferred Stock over a period of 8-10 years (92) (95) (187) (184) ------------ ------------ ------------ ------------ $(1,465) $(1,388) $(2,913) $(2,492) ------------ ------------ ------------ ------------ Earnings Available for Common Shares $ 1,649 $ 945 $ 2,420 $ 1,702 ============ ============ ============ ============
Basic EPS equals diluted EPS for the periods presented due to the immaterial effect of stock options and the antidilutive effect of conversion of the Company's depositary convertible exchangeable preferred shares into common stock. (4) Dividends There were no cash dividends on common stock declared or paid during the periods presented in the consolidated condensed financial statements presented herein. As previously disclosed, in conjunction with the covenants of the Company's Amended Revolving Credit Agreement as well as the New Credit Agreement, effective January 17, 1997, the Company is required to suspend the payment of quarterly dividends on its $21.25 preferred stock ("Senior Preferred Stock") until certain financial criteria are met. Therefore, the dividends on the Senior Preferred Stock have not been declared since 1995 (although they have been fully accrued due to the "cumulative" feature of the Senior Preferred Stock). The aggregate amount of dividends in arrears is approximately $5,843,000 at June 30, 1998 which represents approximately $58.43 per share of Preferred Stock or approximately $5.84 per Depositary Share and is included in Long 6 PERINI CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) (4) Dividends (continued) Term Other Liabilities in the accompanying Consolidated Balance Sheet. Under the terms of the Preferred Stock, the holders of the Depositary Shares were entitled to elect two additional Directors since dividends have been deferred for more than six quarters and such directors were elected at the May 14, 1998 Annual Meeting. Quarterly In-kind dividends (based on an annual rate of 10%) were paid on March 16, 1998 on the Series B Preferred Stock to the stockholders of record on March 2, 1998. The dividend was paid in the form of approximately 4,108 additional shares of Series B Preferred Stock valued at $200.00 per share for a total of $821,501. In-kind dividends for the second quarter were paid on June 15, 1998 to stockholders of record on June 1, 1998. The dividend was paid in the form of approximately 4,210 additional shares of Series B Preferred Stock valued at $200.00 per share for a total of $842,039. (5) 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 generally accepted accounting principles. 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, 1997. In the opinion of management, the accompanying unaudited 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, 1998 and December 31, 1997 and results of operations and cash flows for the three month and six month periods ended June 30, 1998 and 1997. The results of operations for the six month period ended June 30, 1998 may not be indicative of the results that may be expected for the year ending December 31, 1998 because the Company's results generally consist of a limited number of large transactions in both construction and real estate. Therefore, such results can vary depending on the timing of transactions and the profitability of projects being reported. (6) Impact of Recently Issued Accounting Standards During the quarter ended March 31, 1998, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 130 "Reporting Comprehensive Income". There was no impact to the accompanying consolidated condensed financial statements due to the adoption of this statement, therefore no additional disclosure is required. In June 1998 the Financial Accounting Standards Board issued SFAS No. 133, Accounting for Derivative Financial Instruments and Hedging Activities. The statement establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. The Statement requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative's gains and losses to offset related results on the hedged item in the income statement, and requires that the company must formally document, designate, and assess the effectiveness of transactions that receive hedge accounting. Statement No. 133 is effective for fiscal years beginning after June 15, 1999. A company may also implement the Statement as of the beginning of any fiscal quarter after issuance. Statement No. 133 cannot be applied retroactively. The Company does not hold any significant derivative instruments or engage in significant hedging activities and therefore the impact of adopting Statement No. 133 is expected to be immaterial. The Company plans to adopt Statement No. 133 on January 1, 1999, the start of the next fiscal year. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Results of Operations - --------------------- Comparison of the Second Quarter of 1998 with the Second Quarter of 1997 Revenues decreased $110.7 million (or 28.4%), from $388.9 million in 1997 to $278.2 million in 1998. This decrease resulted from decreased construction revenues of $87.9 million (or 24.3%), from $361.6 million in 1997 to $273.7 million in 1998, due primarily to decreases in revenues from both building and civil construction operations. Revenues from building operations decreased $54.2 million (or 22.3%), from $243.5 million in 1997 to $189.3 million in 1998 due primarily to a decrease in revenues from correctional facility projects in the East. Revenues from civil operations decreased $33.7 million (or 28.5%) from $118.1 million in 1997 to $84.4 million in 1998 due primarily to the timing in the start up of new infrastructure projects in the Northeast. In addition, the decision to phase out two construction divisions in the Midwest also contributed to the decrease in revenues from both the building and civil operations. The decline in real estate revenues of $22.8 million (or 83.7%) is primarily due to the non-recurring revenues related to the 1997 sale of the Company's interest in the Resort at Squaw Creek in California. In spite of the overall 28% decrease in total revenues described above, total gross profit of $12.4 million only decreased by $.8 million (or 6%) due primarily to improved margins on both the building and civil construction work performed in 1998. General, administrative and selling expenses decreased $.7 million (or 8.6%) from $8.1 million in 1997 to $7.4 million in 1998 due primarily to phasing out of the two construction divisions in the Midwest as well as efficiencies achieved by combining certain other divisions. Other income (expense), net decreased by $.2 million from a net expense of $.3 million in 1997 to a net expense of $.1 million in 1998 due to a decrease in bank financing fees and a decrease in amortization of deferred debt expense. Interest expense decreased by $.8 million, from $2.3 million in 1997 to $1.5 million in 1998 due primarily to lower averge levels of borrowing in 1998. The lower than normal tax rate in 1998 and 1997 for all periods presented is due to the utilization of tax loss carryforwards from prior years. Because of certain accounting limitations, the Company was not able to recognize a portion of the tax benefit related to the operating losses experienced in fiscal 1996 and 1995. Comparison of the Six Months Ended June 30, 1998 and the Six Months Ended June 30, 1997 Revenues decreased $208.5 million (or 29.1%) from $716.1 million in 1997 to $507.6 million in 1998. This decrease resulted from decreased construction revenues of $186.2 million (or 27.4%) from $679.2 million in 1997 to $493.0 million in 1998, due primarily to decrease in revenues from building construction operations of $143.2 million (or 29.3%) from $488.8 million in 1997 to $345.6 million in 1998. Decreased building construction revenues were due primarily to the timing in the start of new hotel/casino projects in Las Vegas and, to a lesser degree, a decrease in revenues from correctional facility projects in the East. Civil construction revenues also decreased by $43.0 million (or 22.6%), from $190.4 million in 1997 to $147.4 million in 1998 due to the timing in the start up of new infrastructure projects in the Northeast. The phasing out of two construction divisions in the Midwest contributed to the decrease in revenues from both the building and civil operations. The decline in real estate revenues of $22.3 million (or 60.4%) is primarily due to non-recurring revenues related to the 1997 sale of the Company's interest in the Resort at Squaw Creek. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) In spite of the decrease in revenues, the total gross profit only decreased slightly, from $25.3 million in 1997 to $24.8 million in 1998, primarily due to improved margin on both the building and civil work performed in 1998. General administrative and selling expenses decreased slightly from $14.9 million in 1997 to $14.4 million in 1998 due primarily to the phasing out of two construction divisions in the Midwest which was partially offset by an increase in selling expenses incurred by the real estate operations in the first quarter of 1998. Other income (expense) net decreased by $.5 million from a net expense of $.9 million in 1997 to a net expense of $.4 million in 1998 due primarily to a decrease in bank financing fees and a decrease in amortization of deferred debt expense. Interest expense decreased by $.8 million, from $5.1 million in 1997 to $4.3 million in 1998 due primarily to lower levels of borrowing in 1998. Financial Condition - ------------------- Working capital decreased $23.2 million, from $72.0 million at the end of 1997 to $48.8 million at June 30, 1998. The primary reason for the decrease in working capital was the reclassificiation of certain items between current and long-term during the first quarter of 1998, because of a change in real estate strategy and a certain long-term liability becoming current. The current ratio decreased from 1.31:1 to 1.22:1 during this same period. During the first six months of 1998, the Company generated $40.0 million from operating activities, primarily from changes in working capital, which was used to fund financing activities ($23.5 million), primarily to paydown debt, and to increase cash by $16.5 million. Long-term debt at June 30, 1998 was $66.4 million, a decrease of $18.5 million from December 31, 1997 due to the reduction in borrowing under the Company's Revolving Credit Facility. The long-term debt to equity ratio at June 30, 1998 was 1.41 to 1, compared to 2.08 to 1 at December 31, 1997. At June 30, 1998, the Company had $47.8 million available under its line of credit facilities. Management believes that cash generated from operations and its existing credit lines should be adequate to meet the Company's funding requirements for at least the next twelve months. Outlook - ------- General - The statements contained in this Outlook 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 statements regarding the Company's expectations, hopes, beliefs, intentions or strategies regarding the future. All forward-looking statements included in this Outlook are based on information available to the Company on the date hereof. It is important to note that the Company's actual results could differ materially from those in such forward-looking statements. Construction - Looking ahead, we must consider the Company's construction backlog and remaining portfolio of real estate projects. The overall construction backlog at June 30, 1998 was at $1.490 billion which represented a slight decrease over the backlog at December 31, 1997. While approximately 47% of the current backlog relates to building construction projects which generally represent lower risk, lower margin work, approximately 53% of the current backlog relates to heavy construction projects which 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) generally represent higher risk, but correspondingly higher margin work. Rincon Center - As previously reported in Note 11 of the December 31, 1997 Consolidated Financial Statements included in the Company's 1997 Form 10-K, the Company's Real Estate subsidiary, Perini Land and Development Company, the managing general partner of Rincon Center Associates, has reached a preliminary agreement with the parties in Rincon Center, a mixed-use property in San Francisco, subject to various approvals and further negotiations, with regard to restructuring certain financial obligations and ownership interests. These negotiations are continuing and include the possible acquisition of the property known as Rincon I, previously sold in 1988 under a sale leaseback transaction. While further negotiations with and final approval by the various parties involved are ongoing, the Company has received the appropriate waivers or assurances to date that (i) the Lessor on Rincon I will continue to defer enforcement of the purchase requirement provisions under the Master Lease, and (ii) while the $33 million loan to the Lessor on Rincon I has matured, the lenders have deferred enforcement of any remedies pending completion of the restructuring discussions. It continues to be the opinion of management that the final resolution of these negotiations and restructure of certain financial obligations will not have a material impact on the results of operations or financial condition as reported in the financial statements included in this Form 10-Q. Year 2000 - Since many computers, related software and certain devices with embedded microchips record only the last two digits of a year, they may not be able to recognize that January 1, 2000 (or subsequent dates) comes after December 31, 1999. This situation could cause erroneous calculations or system shutdowns, causing problems that could range from merely inconvenient to significant. As previously reported in the Company's 1997 Form 10-K, the Company began a project to review all of its computer systems in 1995. One factor, among many, to consider was what impact, if any, would the Year 2000 have on computer systems. As a result of this project, the Company implemented new fully integrated online construction specific financial systems during the first quarter of 1998 which are Year 2000 compliant. The Company recognizes the Year 2000 issue could be an overall business problem, not just a technical problem, therefore it recently established a Year 2000 Committee to identify all of the other potential Year 2000 problems that could impact the Company, including readiness issues for its computer applications and business processes, those of its facilities, equipment and joint ventures, along with relationships with third parties, such as our customers, vendors, subcontractors and other business partners; develop plans to evaluate the significance of the potential problem; develop plans to remedy or minimize the potential problem; assign appropriate resources; and monitor the implementation of the plans. Since the Company is generally in the identification phase of this project, except for its recently implemented new financial systems, the Company is unable to estimate the total cost to achieve Year 2000 readiness. While the Company currently does not anticipate any material disruption in its operations as a result of any failure by the Company to be in compliance, the Company does not currently have any information concerning the Year 2000 compliance status of its suppliers and customers. In the event that any of the Company's significant suppliers or customers does not successfully and timely achieve Year 2000 compliance, the Company's business or operations could be adversely affected. 10 PART II. - OTHER INFORMATION Item 1. - Legal Proceedings - None Item 2. - Changes in Securities (a) None (b) None (c) None Item 3. - Defaults Upon Senior Securities (a) None (b) In accordance with the provisions of the 1995 Amended Revolving Credit Agreement and the Credit Agreement which became effective on January 17, 1997, the Company suspended payment of quarterly dividends on its $21.25 Convertible Exchangeable Preferred Stock ("Senior Preferred Stock") commencing with the dividend that normally would have been declared during December, 1995 through the dividend that would normally have been declared during June, 1998 for a total arrearage of $58.43 per share (or $5.84 per depositary share) which aggregates $5,843,000 to date. While these dividends have not been declared or paid, they have been fully accrued in accordance with the "cumulative" feature of the stock. Item 4. - Submission of Matters to a Vote of Security Holders (a) May 14, 1998 - Annual Meeting of Shareholders (b) Not applicable (c) (1) Nominees for Class II Directors as listed in the proxy statement, to hold office for a three year term, expiring in 2001 and until their successors are chosen and qualified, were elected by holders of Common Stock and Series B Preferred Stock with the following vote: Number of Votes -------------------------------------------------------------------- Class I Director For Against Abstain - -------------------------------- ------------------ --------------------- ----------------- Richard J. Boushka 7,879,747 --- 28,876 Roger J. Ludlam 7,878,847 --- 29,776 Jane E. Newman 7,879,622 --- 29,001 Ronald N. Tutor 7,887,960 --- 20,663
(2) Two nominees for Preferred Directors (the "Preferred Directors") as listed in a separate information statement, prepared by the Depositary for the Company's $21.25 Convertible Exchangeable Preferred Stock (the "Preferred Stock", each $2.125 Depositary Receipt equals 1/10 share of the Preferred Stock), to hold office until the earlier of (i) payment in full by the Company of any dividends owed on the Preferred Stock or (ii) the next annual meeting of stockholders and their successors are chosen and qualified, were elected by 11 the Depositary, based on the two nominees who receive the greatest number of votes as indicated by the holders of the Depositary Receipts. A summary of the voting results follows: Number of Votes -------------------------------------------------------------- Nominees for Authority Preferred Directors For Against Withheld - ---------------------------------------- ---------------- ------------------ --------------- Robert L. Ball 9,205 --- 414,956 Arthur I. Caplan (Elected) 215,100 --- 209,061 John A. Donaho 4,681 --- 419,480 Frederick Doppelt (Elected) 265,386 --- 158,775 Bennett Feinsilber 2,670 --- 421,491 Reid W. Goyert 5,450 --- 418,711 Edward P. Hoffer, M.D. 11,240 --- 412,921 Arthur J. Lempert 19,600 --- 404,561 Linton S. Marshall III 29,756 --- 394,405 Tony Eugene Pittsey 10,552 --- 413,609 Martin Shubik 114,011 --- 310,150 Joseph Silvestro 4,864 --- 419,297 Ben Warman 47,535 --- 376,626 Albert Olaf Wilson, Jr. 62,011 --- 362,150 Leland D. Zulch 38,670 --- 385,491
(d) Not applicable Item 5. - Other Information - None Item 6. - Exhibits and Reports on Form 8-K (a) The following designated exhibits are, as indicated below, either filed herewith or have heretofore been filed with the Securities and Exchange Commission under the Securities Act of 1933 or the Securities Act of 1934 and are referred to and incorporated herein by reference to such filings. Exhibit 3. Articles of Incorporation and By-laws Incorporated herein by reference: 3.1 Restated Articles of Organization - As amended through January 17, 1997 - Exhibit 3.1 to 1996 Form 10-K filed March 31, 1997. 3.2 By-laws - As amended and restated as of January 17, 1997 - Exhibit 3.2 to Form 8-K filed on February 14, 1997. 12 Part II. - Other Information (Continued) Exhibit 4. Instruments Defining the Rights of Security Holders, Including Indentures Incorporated herein by reference: 4.1 Certificate of Vote of Directors Establishing a Series of a Class of Stock determining the relative rights and preferences of the $21.25 Convertible Exchangeable Preferred Stock - Exhibit 4(a) to Amendment No. 1 to Form S- 2 Registration Statement filed June 19, 1987; SEC Registration No. 33- 14434. 4.2 Form of Deposit Agreement, including form of Depositary Receipt - Exhibit 4(b) to Amendment No. 1 to Form S-2 Registration Statement filed June 19, 1987; SEC Registration No. 33-14434. 4.3 Form of Indenture with respect to the 8 1/2% Convertible Subordinated Debentures Due June 15, 2012, including form of Debenture - Exhibit 4(c) to Amendment No. 1 to Form S-2 Registration Statement filed June 19, 1987; SEC Registration No. 33-14434. 4.4 Shareholder Rights Agreement dated as of September 23, 1988, as amended and restated as of May 17, 1990, as amended and restated as of January 17, 1997, between Perini Corporation and State Street Bank and Trust Company, as Rights Agent - Exhibit 4.4 to Amendment No. 1 to Registration Statement on Form 8-A/A filed on January 29, 1997. 4.5 Stock Purchase and Sale Agreement dated as of July 24, 1996 by and among the Company, PB Capital and RCBA, as amended - Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 4.8 Certificate of Vote of Directors Establishing a Series of Preferred Stock determining the relative rights and preferences of the Series B Cumulative Convertible Preferred Stock, dated January 16, 1997 - Exhibit 4.8 to Form 8- K filed on February 14, 1997. 4.9 Stock Assignment and Assumption Agreement dated as of December 13, 1996 by and among the Company, PB Capital and ULLICO (filed as Exhibit 4.1 to the Schedule 13D filed by ULLICO on December 16, 1996 and incorporated herein by reference). 4.10 Stock Assignment and Assumption Agreement dated as of January 17, 1997 by and among the Company, RCBA and The Common Fund - Exhibit 4.10 to Form 8-K filed on February 14, 1997. 4.11 Voting Agreement dated as of January 17, 1997 by and among PB Capital, David B. Perini, Perini Memorial Foundation, David B. Perini Testamentary Trust, Ronald N. Tutor, and Tutor-Saliba Corporation - Exhibit 4.11 to Form 8-K filed on February 14, 1997. 13 Part II. - Other Information (Continued) 4.12 Registration Rights Agreement dated as of January 17, 1997 by and among the Company, PB Capital and ULLICO - Exhibit 4.12 to Form 8-K filed on February 14, 1997. Exhibit 10. Material Contracts Incorporated herein by reference: 10.1 1982 Stock Option and Long Term Performance Incentive Plan - Exhibit A to Registrant's Proxy Statement for Annual Meeting of Stockholders dated April 15, 1992. 10.2 Perini Corporation Amended and Restated General Incentive Compensation Plan - Exhibit 10.2 to 1997 Form 10-K, as filed. 10.3 Perini Corporation Amended and Restated Construction Business Unit Incentive Compensation Plan - Exhibit 10.3 to 1997 Form 10-K, as filed. 10.4 Management Agreement dated as of January 17, 1997 by and among the Company, Ronald N. Tutor and Tutor-Saliba Corporation - Exhibit 10.16 to Form 8-K filed on February 14, 1997. 10.5 Amended and Restated Credit Agreement dated as of January 17, 1997 among Perini Corporation, the Banks listed herein and Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank, as Co- Agent - Exhibit 10.17 to Form 10-K filed March 31, 1997. 14 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 13, 1998 /s/ Robert Band Robert Band, Executive Vice President, Chief Financial Officer Date: August 13, 1998 /s/ Barry R. Blake Barry R. Blake, Vice President and Controller 15 EX-27 2 06/30/98 FINANCIALS
5 This schedule containes summary financial information extracted from Consolidated Balance Sheets as of June 30, 1998 and the Consolidated Statements of Operations for the three months and six months ended June 30, 1998 as qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1998 JUN-30-1998 47,846 0 109,830 0 17,257 271,719 27,538 (17,866) 383,664 222,880 66,434 31,605 100 5,506 0 383,664 0 507,593 0 482,767 (438) 0 (4,301) 5,723 390 5,333 0 0 0 5,333 .46 .46 Includes Equity in Construction Joint Ventures of $70,160, Unbilled Work of $20,728, and Other Short-Term Assets of $5,898, not currently reflected in this tag list. Includes investments in and advances to Real Estate Joint Ventures of $84,779, Land Held for Sale or Development of $13,383, and Other Long-Term Assets of $4,111, not currently reflected in this tag list. Includes Deferred Income Taxes and Other Liabilities of $14,565, Minority Interest of $1,064, Paid-In Surplus of $52,216, Retained Deficit of $(9,961), ESOT Related Obligations of $(1,501), Treasury Stock of $(1,477), and Stock Purchase Warrants of $2,233. Includes General, Administrative and Selling Expenses of $(14,364), not currently reflected on this tag list.
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