Related Party Transactions

3 Months Ended

Mar. 31, 2014

Related Party Transactions

Related Party Transactions

(14) Related Party Transactions

The Company leases certain facilities from Ronald N. Tutor, the Company’s Chairman and Chief Executive Officer, and an affiliate owned by Mr. Tutor under non-cancelable operating lease agreements with current monthly payments of $0.2 million, which increase at 3% per annum beginning August 1, 2009 and expiring on July 31, 2016. Lease expense for these leases, recorded on a straight-line basis, was $0.6 million for the three months ended March 31, 2014 and 2013. On April 18, 2014, the Company and Ronald N. Tutor entered into two separate lease agreements, replacing these current leases. Each of the new leases is effective June 1, 2014 with new monthly payments of $0.2 million, and an increase at the rate of the greater of 3% per annum or the Consumer Price Index (“CPI”) for the Los Angeles metropolitan area beginning with June 1, 2015. Both new leases provide for purchase/sell options beginning on June 1, 2021 and June 1, 2025, respectively. Also under both leases, the fair market value shall be agreed upon by both parties, or shall be determined by a consensus of independent qualified appraisers.

Raymond R. Oneglia, who is the Vice Chairman of O&G Industries, Inc. (“O&G”), is a director of the Company. Currently the Company has a 30% interest in a joint venture with O&G as the sponsor involving a highway construction project for the State of Connecticut, with an estimated total contract value of approximately $369 million, scheduled for completion in 2017. Under this arrangement, O&G provides project-related equipment and services directly to the customer (on customary trade terms). In accordance with the joint venture agreement, payments to O&G for equipment and services for each of the quarters ended March 31, 2014 and March 31, 2013 were $1.5 and $1.4 million, respectively. O&G’s cumulative holdings of the Company’s stock were 500,000 shares at March 31, 2014 and 600,000 shares at March 31, 2013, or 1.03% and 1.26%, respectively, of total common shares outstanding.