x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
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ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934
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MASSACHUSETTS
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04-1717070
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer o
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Accelerated filer x
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Non-Accelerated filer o
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Smaller reporting company o
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Page Number
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Part I. -
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Financial Information:
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Item 1.
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Financial Statements
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3
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4
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5
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6
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7 – 45
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Item 2.
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46 – 55
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Item 3.
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55
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Item 4.
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55 – 56
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Part II. -
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Other Information:
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Item 1.
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56
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||
Item 1A.
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56
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Item 2.
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56
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Item 3.
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56
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Item 4.
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56
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Item 5.
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56
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Item 6.
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56 – 58
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59
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SEPTEMBER 30,
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DECEMBER 31,
|
|||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Cash and Cash Equivalents
|
$ | 273,321 | $ | 471,378 | ||||
Restricted Cash
|
35,817 | 23,550 | ||||||
Accounts Receivable, including retainage
|
1,312,360 | 880,614 | ||||||
Costs and Estimated Earnings in Excess of Billings
|
374,325 | 139,449 | ||||||
Deferred Income Taxes
|
18,559 | 3,737 | ||||||
Other Current Assets
|
93,767 | 42,314 | ||||||
Total Current Assets
|
2,108,149 | 1,561,042 | ||||||
Long-term Investments
|
67,061 | 88,129 | ||||||
Property and Equipment (net of Accumulated Depreciation of $95,164 in 2011 and $79,942 in 2010)
|
472,528 | 362,437 | ||||||
Other Assets:
|
||||||||
Goodwill
|
881,538 | 621,920 | ||||||
Intangible Assets, net
|
203,075 | 132,551 | ||||||
Other
|
21,386 | 13,141 | ||||||
$ | 3,753,737 | $ | 2,779,220 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Maturities of Long-term Debt
|
$ | 73,836 | $ | 21,334 | ||||
Accounts Payable, including retainage
|
766,771 | 653,542 | ||||||
Billings in Excess of Costs and Estimated Earnings
|
381,464 | 199,750 | ||||||
Accrued Expenses and Other Current Liabilities
|
204,085 | 93,488 | ||||||
Total Current Liabilities
|
1,426,156 | 968,114 | ||||||
Long-term Debt, less current maturities
|
758,970 | 374,350 | ||||||
Deferred Income Taxes
|
94,445 | 79,082 | ||||||
Other Long-term Liabilities
|
92,971 | 44,680 | ||||||
Contingencies and Commitments
|
||||||||
Stockholders’ Equity:
|
||||||||
Common Stock - $1 par value: 75,000,000 shares authorized; Shares issued and outstanding: 47,315,050 and 47,089,593, respectively
|
47,315 | 47,090 | ||||||
Additional Paid-in Capital
|
991,884 | 985,413 | ||||||
Retained Earnings
|
378,631 | 316,531 | ||||||
Accumulated Other Comprehensive Loss
|
(36,635 | ) | (36,040 | ) | ||||
Total Stockholders' Equity
|
1,381,195 | 1,312,994 | ||||||
$ | 3,753,737 | $ | 2,779,220 |
The accompanying notes are an integral part of these consolidated condensed financial statements.
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THREE MONTHS ENDED | NINE MONTHS ENDED | |||||||||||||||
SEPTEMBER 30, | SEPTEMBER 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues
|
$ | 1,166,410 | $ | 731,806 | $ | 2,601,557 | $ | 2,511,257 | ||||||||
Cost of Operations
|
1,046,055 | 641,136 | 2,331,529 | 2,245,542 | ||||||||||||
Gross Profit
|
120,355 | 90,670 | 270,028 | 265,715 | ||||||||||||
General and Administrative Expenses
|
58,319 | 40,710 | 152,444 | 125,747 | ||||||||||||
INCOME FROM CONSTRUCTION OPERATIONS
|
62,036 | 49,960 | 117,584 | 139,968 | ||||||||||||
Other Income (Expense), net
|
5,863 | 358 | 6,648 | (399 | ) | |||||||||||
Interest Expense
|
(11,566 | ) | (1,589 | ) | (25,973 | ) | (6,354 | ) | ||||||||
Income before Income Taxes
|
56,333 | 48,729 | 98,259 | 133,215 | ||||||||||||
Provision for Income Taxes
|
(20,856 | ) | (17,796 | ) | (36,159 | ) | (48,624 | ) | ||||||||
NET INCOME
|
$ | 35,477 | $ | 30,933 | $ | 62,100 | $ | 84,591 | ||||||||
BASIC EARNINGS PER COMMON SHARE
|
$ | 0.75 | $ | 0.65 | $ | 1.32 | $ | 1.75 | ||||||||
DILUTED EARNINGS PER COMMON SHARE
|
$ | 0.74 | $ | 0.65 | $ | 1.30 | $ | 1.73 | ||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
|
||||||||||||||||
BASIC
|
47,291 | 47,357 | 47,192 | 48,455 | ||||||||||||
Effect of Dilutive Stock Options and Restricted Stock Units Outstanding
|
473 | 539 | 670 | 498 | ||||||||||||
DILUTED
|
47,764 | 47,896 | 47,862 | 48,953 |
Accumulated
|
||||||||||||||||||||
Additional
|
Other
|
|||||||||||||||||||
Common
|
Paid-in
|
Retained
|
Comprehensive
|
|||||||||||||||||
Stock
|
Capital
|
Earnings
|
Loss
|
Total
|
||||||||||||||||
Balance - December 31, 2010
|
$ | 47,090 | $ | 985,413 | $ | 316,531 | $ | (36,040 | ) | $ | 1,312,994 | |||||||||
Net Income
|
- | - | 62,100 | - | 62,100 | |||||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||
Foreign currency translation
|
- | - | - | (1,190 | ) | (1,190 | ) | |||||||||||||
Change in fair value of investments
|
- | - | - | 595 | 595 | |||||||||||||||
Total comprehensive income
|
61,505 | |||||||||||||||||||
Tax effect of stock-based compensation
|
- | (80 | ) | - | - | (80 | ) | |||||||||||||
Stock-based compensation expense
|
- | 6,820 | - | - | 6,820 | |||||||||||||||
Issuance of Common Stock, net
|
225 | (269 | ) | - | - | (44 | ) | |||||||||||||
Balance - September 30, 2011
|
$ | 47,315 | $ | 991,884 | $ | 378,631 | $ | (36,635 | ) | $ | 1,381,195 |
NINE MONTHS ENDED
|
||||||||
SEPTEMBER 30,
|
||||||||
2011
|
2010
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net Income
|
$ | 62,100 | $ | 84,591 | ||||
Adjustments to reconcile Net Income to net cash from operating activities:
|
||||||||
Depreciation and amortization
|
29,594 | 23,328 | ||||||
Stock-based compensation expense
|
6,820 | 10,168 | ||||||
Excess income tax benefit from stock-based compensation
|
(18 | ) | - | |||||
Adjustment of investments to fair value
|
- | 25 | ||||||
Deferred Income Taxes
|
412 | (3,059 | ) | |||||
(Gain) loss on sale of equipment
|
(896 | ) | 350 | |||||
Gain on bargain purchase
|
(4,000 | ) | - | |||||
Other Long-term Liabilities
|
(6,823 | ) | (3,677 | ) | ||||
Other non-cash items
|
(3,251 | ) | - | |||||
Changes in other components of working capital
|
(207,854 | ) | (147,675 | ) | ||||
NET CASH USED IN OPERATING ACTIVITIES
|
(123,916 | ) | (35,949 | ) | ||||
Cash Flows from Investing Activities:
|
||||||||
Acquisitions, net of cash balance acquired
|
(337,873 | ) | - | |||||
Business acquisition related payments
|
(3,000 | ) | (6,734 | ) | ||||
Acquisition of Property and Equipment
|
(39,694 | ) | (16,135 | ) | ||||
Proceeds from sale of Property and Equipment
|
6,526 | 1,856 | ||||||
Proceeds from sale of available-for-sale securities
|
7,388 | 6,918 | ||||||
Change in Restricted Cash
|
(7,196 | ) | (23,541 | ) | ||||
Investment in other activities
|
- | 53 | ||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(373,849 | ) | (37,583 | ) | ||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from Debt
|
567,782 | 8,724 | ||||||
Repayment of Debt
|
(263,059 | ) | (28,803 | ) | ||||
Common Stock repurchased under share repurchase program
|
- | (39,391 | ) | |||||
Excess income tax benefit from stock-based compensation
|
18 | - | ||||||
Issuance of Common Stock and effect of cashless exercise
|
(44 | ) | (325 | ) | ||||
Debt issuance costs
|
(4,989 | ) | (1,905 | ) | ||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
299,708 | (61,700 | ) | |||||
Net Decrease in Cash and Cash Equivalents
|
(198,057 | ) | (135,232 | ) | ||||
Cash and Cash Equivalents at Beginning of Year
|
471,378 | 348,309 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 273,321 | $ | 213,077 | ||||
Supplemental Disclosure of Cash Paid During the Period For:
|
||||||||
Interest
|
$ | 17,714 | $ | 4,215 | ||||
Income taxes
|
$ | 40,225 | $ | 35,705 | ||||
Supplemental Disclosure of Non-cash Transactions:
|
||||||||
Property and Equipment acquired through financing arrangements
|
$ | 1,604 | $ | 6,054 | ||||
Grant date fair value of Common Stock issued for services
|
$ | 5,061 | $ | 19,673 |
(1)
|
Basis of Presentation
|
(2)
|
Significant Accounting Policies
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Unbilled costs and profits incurred to date*
|
$ | 131,038 | $ | 14,285 | ||||
Unapproved change orders
|
139,298 | 49,949 | ||||||
Claims
|
103,989 | 75,215 | ||||||
$ | 374,325 | $ | 139,449 |
*
|
Represents the excess of contract costs and profits recognized to date on the percentage of completion accounting method over the amount of contract billings to date on certain contracts.
|
(2)
|
Significant Accounting Policies (continued)
|
(3)
|
Acquisitions
|
(3)
|
Acquisitions (continued)
|
(3)
|
Acquisitions (continued)
|
Amount
|
||||
(In thousands)
|
||||
Cash consideration
|
$ | 228,626 | ||
Fair value of contingent consideration
|
9,700 | |||
Total purchase price consideration
|
$ | 238,326 |
(3)
|
Acquisitions (continued)
|
Weighted Average
|
|||||
Amount
|
Useful Life
|
||||
(in thousands)
|
|||||
Identifiable assets acquired and liabilities assumed:
|
|||||
Cash and Cash Equivalents
|
$ | 105,672 | |||
Accounts Receivable
|
197,556 | ||||
Other Assets
|
75,309 | ||||
Property and Equipment
|
54,129 | ||||
Identifiable Intangible Assets:
|
|||||
Customer relationships
|
7,600 |
11 years
|
|||
Contract backlog
|
11,200 |
3 years
|
|||
Trade name
|
32,000 | ||||
Goodwill
|
67,676 | ||||
Total assets acquired
|
551,142 | ||||
Current liabilities
|
235,373 | ||||
Deferred tax liabilities
|
22,236 | ||||
Long-term Liabilities
|
51,207 | ||||
Total liabilities assumed:
|
308,816 | ||||
Frontier-Kemper Bargain Purchase Gain:
|
|||||
Other Income (Expense), net
|
4,000 | ||||
Total purchase price
|
$ | 238,326 |
(3)
|
Acquisitions (continued)
|
Revenues
|
Income from
Construction
Operations
|
|||||||
(in thousands)
|
||||||||
Three months ended September 30, 2011
|
$ | 230,620 | $ | 12,550 | ||||
Nine months ended September 30, 2011
|
$ | 484,479 | $ | 18,731 |
Pro Forma (unaudited)
|
Three Months Ended
|
|||||||
September 30,
2011
|
September 30,
2010
|
|||||||
(in thousands, except per share data)
|
||||||||
Revenues
|
$ | 1,167,862 | $ | 933,833 | ||||
Income from Construction Operations
|
$ | 63,166 | $ | 60,363 | ||||
Net Income
|
$ | 36,330 | $ | 33,743 | ||||
Basic earnings per common share
|
$ | 0.77 | $ | 0.71 | ||||
Diluted earnings per common share
|
$ | 0.76 | $ | 0.70 |
Pro Forma (unaudited)
|
Nine Months Ended
|
|||||||
September 30,
2011
|
September 30,
2010
|
|||||||
(in thousands, except per share data)
|
||||||||
Revenues
|
$ | 2,780,107 | $ | 3,031,353 | ||||
Income from Construction Operations
|
$ | 126,737 | $ | 157,635 | ||||
Net Income
|
$ | 63,395 | $ | 88,098 | ||||
Basic earnings per common share
|
$ | 1.34 | $ | 1.82 | ||||
Diluted earnings per common share
|
$ | 1.32 | $ | 1.80 |
(3)
|
Acquisitions (continued)
|
(3)
|
Acquisitions (continued)
|
Amount
|
||||
(In thousands)
|
||||
Cash consideration
|
$ | 100,000 | ||
GreenStar Seller Note
|
74,869 | |||
GreenStar Indemnity Holdbacks
|
33,500 | |||
Fair value of contingent consideration
|
19,632 | |||
Total purchase price consideration
|
$ | 228,001 |
Amount
|
||||
(in thousands)
|
||||
Identifiable assets acquired and liabilities assumed:
|
||||
Cash and Cash Equivalents
|
$ | 67,613 | ||
Accounts Receivable
|
222,153 | |||
Other Assets
|
112,753 | |||
Property and Equipment
|
6,858 | |||
Goodwill
|
76,769 | |||
Total assets acquired
|
486,146 | |||
Current liabilities
|
257,882 | |||
Long-term Liabilities
|
263 | |||
Total liabilities assumed:
|
258,145 | |||
Total purchase price
|
$ | 228,001 |
(3)
|
Acquisitions (continued)
|
Revenues
|
Income from
Construction
Operations
|
||||||
(in thousands)
|
|||||||
$ | 249,089 | $ | 28,126 |
Pro Forma (unaudited)
|
Three Months Ended
|
|||||||
September 30,
2011
|
September 30,
2010
|
|||||||
(in thousands, except per share data)
|
||||||||
Revenues
|
$ | 1,166,410 | $ | 882,101 | ||||
Income from Construction Operations
|
$ | 62,372 | $ | 55,387 | ||||
Net Income
|
$ | 35,740 | $ | 33,344 | ||||
Basic earnings per common share
|
$ | 0.76 | $ | 0.70 | ||||
Diluted earnings per common share
|
$ | 0.75 | $ | 0.70 |
Pro Forma (unaudited)
|
Nine Months Ended
|
|||||||
September 30,
2011
|
September 30,
2010
|
|||||||
(in thousands, except per share data)
|
||||||||
Revenues
|
$ | 2,954,044 | $ | 2,929,159 | ||||
Income from Construction Operations
|
$ | 155,667 | $ | 147,377 | ||||
Net Income
|
$ | 83,909 | $ | 86,329 | ||||
Basic earnings per common share
|
$ | 1.78 | $ | 1.78 | ||||
Diluted earnings per common share
|
$ | 1.75 | $ | 1.76 |
(3)
|
Acquisitions (continued)
|
Amount
|
||||
(In thousands)
|
||||
Cash consideration
|
$ | 149,935 | ||
Lunda Seller Notes
|
21,750 | |||
Fair value of contingent consideration
|
20,800 | |||
Total purchase price consideration
|
$ | 192,485 |
(3)
|
Acquisitions (continued)
|
Weighted Average
|
|||||
Amount
|
Useful Life
|
||||
(in thousands)
|
|||||
Identifiable assets acquired and liabilities assumed:
|
|||||
Cash and Cash Equivalents
|
$ | 13,432 | |||
Accounts Receivable
|
47,473 | ||||
Other Assets
|
15,062 | ||||
Property and Equipment
|
34,379 | ||||
Identifiable Intangible Assets:
|
|||||
Contract Backlog
|
3,900 |
3 years
|
|||
Trade name
|
22,700 | ||||
Goodwill
|
115,173 | ||||
Total assets acquired
|
252,119 | ||||
Current liabilities
|
59,634 | ||||
Long-term Liabilities
|
- | ||||
Total liabilities assumed:
|
59,634 | ||||
Total purchase price
|
$ | 192,485 |
(3)
|
Acquisitions (continued)
|
Revenues
|
Income from
Construction
Operations
|
||||||
(in thousands)
|
|||||||
$ | 86,209 | $ | 5,423 |
Pro Forma (unaudited)
|
Three Months Ended
|
|||||||
September 30,
2011
|
September 30,
2010
|
|||||||
(in thousands, except per share data)
|
||||||||
Revenues
|
$ | 1,166,410 | $ | 842,112 | ||||
Income from Construction Operations
|
$ | 62,136 | $ | 68,460 | ||||
Net Income
|
$ | 35,539 | $ | 41,536 | ||||
Basic earnings per common share
|
$ | 0.75 | $ | 0.88 | ||||
Diluted earnings per common share
|
$ | 0.74 | $ | 0.87 |
Pro Forma (unaudited)
|
Nine Months Ended
|
|||||||
September 30,
2011
|
September 30,
2010
|
|||||||
(in thousands, except per share data)
|
||||||||
Revenues
|
$ | 2,757,934 | $ | 2,782,129 | ||||
Income from Construction Operations
|
$ | 139,481 | $ | 200,857 | ||||
Net Income
|
$ | 73,602 | $ | 119,900 | ||||
Basic earnings per common share
|
$ | 1.56 | $ | 2.47 | ||||
Diluted earnings per common share
|
$ | 1.54 | $ | 2.45 |
(4)
|
Cash, Cash Equivalents and Restricted Cash
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Corporate Cash and Cash Equivalents
|
$ | 193,290 | $ | 455,464 | ||||
Company's share of joint venture Cash and Cash Equivalents
|
80,031 | 15,914 | ||||||
Total Cash and Cash Equivalents
|
$ | 273,321 | $ | 471,378 | ||||
Restricted Cash
|
$ | 35,817 | $ | 23,550 |
(5)
|
Fair Value Measurements
|
|
Level 1 – inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
|
|
Level 2 – inputs are other than quoted prices in active markets that are either directly or indirectly observable through market corroboration.
|
|
Level 3 – inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions based on the best information available in the circumstances.
|
(5)
|
Fair Value Measurements (continued)
|
Fair Value Measurements at September 30, 2011 Using | ||||||||||||||||
Total
Carrying
Value at
September 30,
2011
|
Quoted
prices in
active
markets
(Level 1)
|
Significant
other
observable
inputs
(Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
|||||||||||||
Cash and Cash Equivalents (1)
|
$ | 273,321 | $ | 273,321 | $ | - | $ | - | ||||||||
Restricted Cash (1)
|
35,817 | 35,817 | - | - | ||||||||||||
Short-term investments (2)
|
25,147 | 1,554 | 2,525 | 21,068 | ||||||||||||
Bonds substituted for retainage (3)
|
11,737 | - | 11,737 | - | ||||||||||||
Long-term Investments –Auction rate securities (4)
|
67,061 | - | - | 67,061 | ||||||||||||
Total
|
$ | 413,083 | $ | 310,692 | $ | 14,262 | $ | 88,129 |
Fair Value Measurements at December 31, 2010 Using | ||||||||||||||||
Total
Carrying
Value at
December 31,
2010
|
Quoted
prices in
active
markets
(Level 1)
|
Significant
other
observable
inputs
(Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
|||||||||||||
Cash and Cash Equivalents (1)
|
$ | 471,378 | $ | 471,378 | $ | - | $ | - | ||||||||
Restricted Cash (1)
|
23,550 | 23,550 | - | - | ||||||||||||
Short-term investments (2)
|
28 | 28 | - | - | ||||||||||||
Bonds substituted for retainage (3)
|
- | - | - | - | ||||||||||||
Long-term Investments –Auction rate securities (4)
|
88,129 | - | - | 88,129 | ||||||||||||
Total
|
$ | 583,085 | $ | 494,956 | $ | - | $ | 88,129 |
|
(1)
|
Cash, Cash Equivalents and Restricted Cash consist primarily of money market funds with original maturity dates of three months or less, for which fair value is determined through quoted market prices.
|
|
(2)
|
Short-term Investments are classified as Other Current Assets and are comprised of certificates of deposit, and municipal bonds, an S&P 500 index mutual fund, and a portion of the Company’s investments in auction rate securities (“ARS”). The fair values of the certificates of deposit and the mutual fund are determined through quoted market prices, and as such, the Company has classified these assets as Level 1. The fair values of the municipal bonds are obtained from readily-available pricing sources for comparable instruments, and as such, the Company has classified these assets as Level 2. The Company also classified approximately $21.1 million of ARS from Long-term Investments to Short-term Investments as this portion of the ARS was redeemed at par subsequent to September 30, 2011.
|
|
(3)
|
Bonds substituted for retainage are classified as Account Receivables, including retainage and are comprised of U.S. Treasury Notes and other municipal bonds, the majority of which are rated AAA. The fair values of these assets are obtained from readily-available pricing sources for comparable instruments, and as such, the Company has classified these assets as Level 2.
|
(4)
|
At September 30, 2011 the Company had an additional $67.1 million invested in ARS which the Company considers as available-for-sale Long-term Investments. The majority of the Long-term Investments ARS held by the Company at September 30, 2011 are in securities collateralized by student loan portfolios, totaling $54.8 million, which are guaranteed by the U.S. government. Additional amounts totaling $12.2 million are invested in securities collateralized by student loan portfolios, which are privately insured. At September 30, 2011 most of the Company’s ARS are rated AAA or AA. The Company estimated the fair value of its ARS utilizing an income approach valuation model which considered, among other items, the following inputs: (i) the underlying structure of each security; (ii) the present value of future principal and interest payments discounted at rates considered to reflect current market conditions; and (iii) consideration of the probabilities of default or repurchase at par for each period.
|
(5)
|
Fair Value Measurements (continued)
|
Auction Rate
|
||||
Securities
|
||||
Balance at December 31, 2010
|
$ | 88,129 | ||
Purchases
|
- | |||
Settlements
|
- | |||
Balance at March 31, 2011
|
88,129 | |||
Purchases
|
- | |||
Settlements
|
- | |||
Balance at June 30, 2011
|
88,129 | |||
Purchases
|
- | |||
Settlements
|
- | |||
Balance at September 30, 2011
|
$ | 88,129 |
Auction Rate
|
||||
Securities
|
||||
Balance at December 31, 2009
|
$ | 101,201 | ||
Purchases
|
- | |||
Settlements
|
(375 | ) | ||
Balance at March 31, 2010
|
100,826 | |||
Purchases
|
- | |||
Settlements
|
(150 | ) | ||
Impairment charge included in Other Income (Expense), net
|
(360 | ) | ||
Balance at June 30, 2010
|
100,316 | |||
Settlements
|
(6,725 | ) | ||
Reversal of impairment charge included in Other Income (Expense), net
|
432 | |||
Balance at September 30, 2010
|
$ | 94,023 |
(6)
|
Goodwill and Intangible Assets
|
Management
|
Specialty
|
|||||||||||||||||||
Building
|
Civil
|
Services
|
Contractors
|
Total
|
||||||||||||||||
Gross Goodwill
|
$ | 402,926 | $ | 319,254 | $ | 66,638 | $ | - | $ | 788,818 | ||||||||||
Accumulated impairment
|
(146,847 | ) | - | (20,051 | ) | - | (166,898 | ) | ||||||||||||
Balance at December 31, 2010
|
256,079 | 319,254 | 46,587 | - | 621,920 | |||||||||||||||
Goodwill recorded in connection with the acquisitions of Fisk, Anderson, Lunda, GreenStar and Becho
|
140,078 | 119,540 | - | - | 259,618 | |||||||||||||||
Reallocation based on relative fair value
|
(126,837 | ) | (18,267 | ) | - | 145,104 | - | |||||||||||||
Balance at September 30, 2011
|
$ | 269,320 | $ | 420,527 | $ | 46,587 | $ | 145,104 | $ | 881,538 |
(6)
|
Goodwill and Intangible Assets (continued)
|
As of September 30, 2011
|
||||||||||||
Gross Carrying
Amount
|
Accumulated
Amortization
|
Carrying
Value
|
||||||||||
Trade names
|
$ | 155,950 | $ | - | $ | 155,950 | ||||||
Contractor license
|
5,320 | - | 5,320 | |||||||||
Customer relationships
|
39,300 | (9,681 | ) | 29,619 | ||||||||
Construction contract backlog
|
49,640 | (37,454 | ) | 12,186 | ||||||||
Total
|
$ | 250,210 | $ | (47,135 | ) | $ | 203,075 |
As of December 31, 2010
|
||||||||||||
Gross Carrying
Amount
|
Accumulated
Amortization
|
Carrying
Value
|
||||||||||
Trade names
|
$ | 101,250 | $ | - | $ | 101,250 | ||||||
Contractor license
|
5,320 | - | 5,320 | |||||||||
Customer relationships
|
31,700 | (7,113 | ) | 24,587 | ||||||||
Construction contract backlog
|
34,540 | (33,146 | ) | 1,394 | ||||||||
Total
|
$ | 172,810 | $ | (40,259 | ) | $ | 132,551 |
(7)
|
Contingencies and Commitments
|
(7)
|
Contingencies and Commitments (continued)
|
(7)
|
Contingencies and Commitments (continued)
|
(7)
|
Contingencies and Commitments (continued)
|
(7)
|
Contingencies and Commitments (continued)
|
(7)
|
Contingencies and Commitments (continued)
|
(7)
|
Contingencies and Commitments (continued)
|
(7)
|
Contingencies and Commitments (continued)
|
(8)
|
Common Stock Repurchase Program
|
(9)
|
Stock-Based Compensation
|
Weighted Average
|
Aggregate
|
|||||||||||
Number
|
Grant Date
|
Intrinsic
|
||||||||||
of Shares
|
Fair Value
|
Value
|
||||||||||
Granted and Unvested - January 1, 2011
|
1,220,833 | $ | 21.62 | $ | 26,138,035 | |||||||
Vested
|
(233,333 | ) | 20.59 | 4,462,992 | ||||||||
Granted
|
517,498 | 19.03 | 5,946,052 | |||||||||
Forfeited
|
(125,000 | ) | 26.19 | - | ||||||||
Cancelled
|
(107,500 | ) | 26.19 | - | ||||||||
Total Granted and Unvested
|
1,272,498 | 19.92 | 14,621,002 | |||||||||
Approved for grant
|
431,669 |
(a)
|
4,959,877 | |||||||||
Total Awarded and Unvested - September 30, 2011
|
1,704,167 |
n.a.
|
19,580,879 |
|
(a)
|
Grant date fair value cannot be determined currently because the related performance targets for future years have not yet been established by the Compensation Committee.
|
(9)
|
Stock-Based Compensation (continued)
|
Number
|
||||
Vesting Date
|
of Awards
|
|||
2012
|
294,998 | |||
2013
|
950,000 | |||
2014
|
459,169 | |||
Total
|
1,704,167 |
Weighted Average
|
||||||||||||
Number
|
Grant Date
|
Exercise
|
||||||||||
of Shares
|
Fair Value
|
Price
|
||||||||||
Total Awarded and Outstanding - January 1, 2011
|
1,040,000 | $ | 11.18 | $ | 20.50 | |||||||
Granted
|
360,465 | 9.31 | 15.44 | |||||||||
Forfeited
|
(80,000 | ) | 14.84 | 26.19 | ||||||||
Cancelled
|
(95,000 | ) | 14.84 | 26.19 | ||||||||
Total Granted and Outstanding
|
1,225,465 | 10.11 | 18.19 | |||||||||
Approved for grant
|
300,000 |
(a)
|
20.33 | |||||||||
Total Awarded and Outstanding - September 30, 2011
|
1,525,465 |
n.a.
|
18.61 |
|
(a)
|
Grant date fair value cannot be determined currently because the related performance targets for future years have not yet been established by the Compensation Committee.
|
(9)
|
Stock-Based Compensation (continued)
|
Risk-free interest rate
|
2.74 | % | ||
Expected life of options
|
6.5 yearss
|
|||
Expected volatility of underlying stock
|
46.94 | % | ||
Expected quarterly dividends (per share)
|
$ | 0.00 |
Risk-free interest rate
|
1.25 | % | ||
Expected life of options
|
6.5 yearss
|
|||
Expected volatility of underlying stock
|
48.70 | % | ||
Expected quarterly dividends (per share)
|
$ | 0.00 |
Risk-free interest rate
|
0.89 | % | ||
Expected life of options
|
5.0 yearss
|
|||
Expected volatility of underlying stock
|
51.62 | % | ||
Expected quarterly dividends (per share)
|
$ | 0.00 |
(10)
|
Financial Commitments
|
(10)
|
Financial Commitments (continued)
|
(10)
|
Financial Commitments (continued)
|
(10)
|
Financial Commitments (continued)
|
(11)
|
Earnings per Common Share
|
(12)
|
Business Segments
|
Three Months Ended September 30, 2011
|
Three Months Ended September 30, 2010
|
|||||||||||||||
Revenues
|
Income from
Construction
Operations
|
Revenues
|
Income from
Construction
Operations
|
|||||||||||||
Building
|
$ | 567,676 | $ | 8,876 | $ | 511,233 | $ | 28,510 | ||||||||
Civil
|
281,355 | 23,805 | 171,223 | 27,298 | ||||||||||||
Specialty Contractors
|
335,921 | 33,132 | 24,088 | (336 | ) | |||||||||||
Management Services
|
85,482 | 5,383 | 41,544 | 2,934 | ||||||||||||
Eliminations
|
(104,024 | ) | - | (16,282 | ) | - | ||||||||||
1,166,410 | 71,196 | 731,806 | 58,406 | |||||||||||||
Corporate *
|
- | (9,160 | ) | - | (8,446 | ) | ||||||||||
Total
|
$ | 1,166,410 | $ | 62,036 | $ | 731,806 | $ | 49,960 |
Nine Months Ended September 30, 2011
|
Nine Months Ended September 30, 2010
|
|||||||||||||||
Revenues
|
Income from
Construction
Operations
|
Revenues
|
Income from
Construction
Operations
|
|||||||||||||
Building
|
$ | 1,463,386 | $ | 43,704 | $ | 1,849,295 | $ | 79,410 | ||||||||
Civil
|
558,307 | 51,732 | 493,314 | 65,308 | ||||||||||||
Specialty Contractors
|
514,809 | 35,812 | 93,892 | 10,761 | ||||||||||||
Management Services
|
209,956 | 14,541 | 158,838 | 12,874 | ||||||||||||
Eliminations
|
(144,901 | ) | - | (84,082 | ) | - | ||||||||||
2,601,557 | 145,789 | 2,511,257 | 168,353 | |||||||||||||
Corporate *
|
- | (28,205 | ) | - | (28,385 | ) | ||||||||||
Total
|
$ | 2,601,557 | $ | 117,584 | $ | 2,511,257 | $ | 139,968 |
(12)
|
Business Segments (continued)
|
Total Assets as of
|
||||||||
September 30, 2011
|
December 31, 2010
|
|||||||
Building
|
$ | 1,118,714 | $ | 1,152,439 | ||||
Civil
|
1,082,509 | 626,397 | ||||||
Specialty Contractors
|
555,334 | 72,286 | ||||||
Management Services
|
160,958 | 147,921 | ||||||
2,917,515 | 1,999,043 | |||||||
Corporate *
|
836,222 | 780,177 | ||||||
Total
|
$ | 3,753,737 | $ | 2,779,220 |
(13)
|
Employee Pension Plans
|
Three Months
|
Nine Months
|
|||||||||||||||
Ended September 30,
|
Ended September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Interest cost
|
$ | 1,108 | $ | 1,139 | $ | 3,323 | $ | 3,418 | ||||||||
Expected return on plan assets
|
(1,254 | ) | (1,241 | ) | (3,763 | ) | (3,724 | ) | ||||||||
Amortization of net loss
|
992 | 612 | 2,976 | 1,836 | ||||||||||||
Net periodic benefit cost
|
$ | 846 | $ | 510 | $ | 2,536 | $ | 1,530 |
(14)
|
Related Party Transactions
|
(14)
|
Related Party Transactions (continued)
|
(15)
|
Separate Financial Information of Subsidiary Guarantors of Indebtedness
|
Tutor Perini
Corporation
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
Consolidated
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$ | 162,129 | $ | 87,130 | $ | 24,062 | $ | - | $ | 273,321 | ||||||||||
Restricted Cash
|
26,975 | 8,842 | - | - | 35,817 | |||||||||||||||
Accounts Receivable
|
108,630 | 1,317,863 | 7,275 | (121,408 | ) | 1,312,360 | ||||||||||||||
Costs and Estimated Earnings in Excess of Billings
|
109,542 | 264,631 | 152 | - | 374,325 | |||||||||||||||
Deferred Income Taxes
|
3,442 | 15,117 | - | - | 18,559 | |||||||||||||||
Other Current Assets
|
48,818 | 53,428 | 5,789 | (14,268 | ) | 93,767 | ||||||||||||||
Total Current Assets
|
459,536 | 1,747,011 | 37,278 | (135,676 | ) | 2,108,149 | ||||||||||||||
Long-term Investments
|
67,061 | - | - | - | 67,061 | |||||||||||||||
Property and Equipment, net
|
31,880 | 435,461 | 5,187 | - | 472,528 | |||||||||||||||
Intercompany Notes and Receivables
|
25,119 | 553,179 | (4,894 | ) | (573,404 | ) | - | |||||||||||||
Other Assets:
|
||||||||||||||||||||
Goodwill
|
- | 881,538 | - | - | 881,538 | |||||||||||||||
Intangible Assets, net
|
- | 203,075 | - | - | 203,075 | |||||||||||||||
Investment in Subsidiaries
|
2,398,136 | (8,438 | ) | 50 | (2,389,748 | ) | - | |||||||||||||
Other
|
17,602 | 9,168 | 375 | (5,759 | ) | 21,386 | ||||||||||||||
$ | 2,999,334 | $ | 3,820,994 | $ | 37,996 | $ | (3,104,587 | ) | $ | 3,753,737 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||
Current Maturities of Long-term Debt
|
$ | 33,529 | $ | 40,307 | $ | - | $ | - | $ | 73,836 | ||||||||||
Accounts Payable
|
37,550 | 850,327 | 302 | (121,408 | ) | 766,771 | ||||||||||||||
Billings in Excess of Costs and Estimated Earnings
|
31,199 | 350,231 | 34 | - | 381,464 | |||||||||||||||
Accrued Expenses and Other Current Liabilities
|
55,802 | 144,737 | 17,814 | (14,268 | ) | 204,085 | ||||||||||||||
Total Current Liabilities
|
158,080 | 1,385,602 | 18,150 | (135,676 | ) | 1,426,156 | ||||||||||||||
Long-term Debt, less current maturities
|
628,366 | 136,363 | - | (5,759 | ) | 758,970 | ||||||||||||||
Deferred Income Taxes
|
87,246 | 7,199 | - | - | 94,445 | |||||||||||||||
Other Long-term Liabilities
|
86,434 | 6,537 | - | - | 92,971 | |||||||||||||||
Contingencies and Commitments
|
||||||||||||||||||||
Intercompany Notes and Advances Payable
|
658,013 | (92,365 | ) | 7,756 | (573,404 | ) | - | |||||||||||||
Stockholders’ Equity
|
1,381,195 | 2,377,658 | 12,090 | (2,389,748 | ) | 1,381,195 | ||||||||||||||
$ | 2,999,334 | $ | 3,820,994 | $ | 37,996 | $ | (3,104,587 | ) | $ | 3,753,737 |
Tutor Perini
Corporation
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
Consolidated
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$ | 222,156 | $ | 220,086 | $ | 29,136 | $ | - | $ | 471,378 | ||||||||||
Restricted Cash
|
23,550 | - | - | - | 23,550 | |||||||||||||||
Accounts Receivable
|
116,718 | 802,059 | 643 | (38,806 | ) | 880,614 | ||||||||||||||
Costs and Estimated Earnings in Excess of Billings
|
83,337 | 55,960 | 152 | - | 139,449 | |||||||||||||||
Deferred Income Taxes
|
3,515 | 222 | - | - | 3,737 | |||||||||||||||
Other Current Assets
|
9,833 | 22,784 | 9,993 | (296 | ) | 42,314 | ||||||||||||||
Total Current Assets
|
459,109 | 1,101,111 | 39,924 | (39,102 | ) | 1,561,042 | ||||||||||||||
Long-term Investments
|
88,129 | - | - | - | 88,129 | |||||||||||||||
Property and Equipment, net
|
44,065 | 312,965 | 5,407 | - | 362,437 | |||||||||||||||
Intercompany Notes and Receivables
|
(4,331 | ) | 565,701 | (5,196 | ) | (556,174 | ) | - | ||||||||||||
Other Assets:
|
||||||||||||||||||||
Goodwill
|
- | 621,920 | - | - | 621,920 | |||||||||||||||
Intangible Assets, net
|
- | 132,551 | - | - | 132,551 | |||||||||||||||
Investment in Subsidiaries
|
1,696,321 | - | - | (1,696,321 | ) | - | ||||||||||||||
Other
|
8,015 | 4,751 | 375 | - | 13,141 | |||||||||||||||
$ | 2,291,308 | $ | 2,738,999 | $ | 40,510 | $ | (2,291,597 | ) | $ | 2,779,220 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||
Current Maturities of Long-term Debt
|
$ | 6,198 | $ | 15,136 | $ | - | $ | - | $ | 21,334 | ||||||||||
Accounts Payable
|
48,139 | 643,462 | 747 | (38,806 | ) | 653,542 | ||||||||||||||
Billings in Excess of Costs and Estimated Earnings
|
20,424 | 179,293 | 33 | - | 199,750 | |||||||||||||||
Accrued Expenses and Other Current Liabilities
|
17,880 | 60,267 | 15,637 | (296 | ) | 93,488 | ||||||||||||||
Total Current Liabilities
|
92,641 | 898,158 | 16,417 | (39,102 | ) | 968,114 | ||||||||||||||
Long-term Debt, less current maturities
|
316,113 | 58,237 | - | - | 374,350 | |||||||||||||||
Deferred Income Taxes
|
78,525 | 557 | - | - | 79,082 | |||||||||||||||
Other Long-term Liabilities
|
36,121 | 8,559 | - | - | 44,680 | |||||||||||||||
Contingencies and Commitments
|
||||||||||||||||||||
Intercompany Notes and Advances Payable
|
454,914 | 86,188 | 15,072 | (556,174 | ) | - | ||||||||||||||
Stockholders’ Equity
|
1,312,994 | 1,687,300 | 9,021 | (1,696,321 | ) | 1,312,994 | ||||||||||||||
$ | 2,291,308 | $ | 2,738,999 | $ | 40,510 | $ | (2,291,597 | ) | $ | 2,779,220 |
Tutor Perini
Corporation
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
Consolidated
|
||||||||||||||||
Revenues
|
$ | 72,632 | $ | 1,197,802 | $ | - | $ | (104,024 | ) | $ | 1,166,410 | |||||||||
Cost of Operations
|
63,235 | 1,091,167 | (4,323 | ) | (104,024 | ) | 1,046,055 | |||||||||||||
Gross Profit
|
9,397 | 106,635 | 4,323 | - | 120,355 | |||||||||||||||
General and Administrative Expenses
|
14,892 | 42,993 | 434 | - | 58,319 | |||||||||||||||
INCOME (LOSS) FROM CONSTRUCTION OPERATIONS
|
(5,495 | ) | 63,642 | 3,889 | - | 62,036 | ||||||||||||||
Equity in Earnings of Subsidiaries
|
42,116 | - | - | (42,116 | ) | - | ||||||||||||||
Other Income (Expense), net
|
5,536 | 323 | 4 | - | 5,863 | |||||||||||||||
Interest Expense
|
(10,634 | ) | (932 | ) | - | - | (11,566 | ) | ||||||||||||
Income before Income Taxes
|
31,523 | 63,033 | 3,893 | (42,116 | ) | 56,333 | ||||||||||||||
(Provision) Credit for Income Taxes
|
3,954 | (23,363 | ) | (1,447 | ) | - | (20,856 | ) | ||||||||||||
NET INCOME
|
$ | 35,477 | $ | 39,670 | $ | 2,446 | $ | (42,116 | ) | $ | 35,477 |
Tutor Perini
Corporation
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
Consolidated
|
||||||||||||||||
Revenues
|
$ | 115,062 | $ | 633,026 | $ | - | $ | (16,282 | ) | $ | 731,806 | |||||||||
Cost of Operations
|
87,484 | 574,303 | (4,369 | ) | (16,282 | ) | 641,136 | |||||||||||||
Gross Profit
|
27,578 | 58,723 | 4,369 | - | 90,670 | |||||||||||||||
General and Administrative Expenses
|
12,159 | 28,298 | 253 | - | 40,710 | |||||||||||||||
INCOME FROM CONSTRUCTION OPERATIONS
|
15,419 | 30,425 | 4,116 | - | 49,960 | |||||||||||||||
Equity in Earnings of Subsidiaries
|
21,040 | - | - | (21,040 | ) | - | ||||||||||||||
Other Income (Expense), net
|
1,049 | (697 | ) | 6 | - | 358 | ||||||||||||||
Interest Expense
|
(771 | ) | (724 | ) | (94 | ) | - | (1,589 | ) | |||||||||||
Income before Income Taxes
|
36,737 | 29,004 | 4,028 | (21,040 | ) | 48,729 | ||||||||||||||
Provision for Income Taxes
|
(5,804 | ) | (10,522 | ) | (1,470 | ) | - | (17,796 | ) | |||||||||||
NET INCOME
|
$ | 30,933 | $ | 18,482 | $ | 2,558 | $ | (21,040 | ) | $ | 30,933 |
Tutor Perini
Corporation
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
Consolidated
|
||||||||||||||||
Revenues
|
$ | 225,619 | $ | 2,520,839 | $ | - | $ | (144,901 | ) | $ | 2,601,557 | |||||||||
Cost of Operations
|
191,888 | 2,294,167 | (9,625 | ) | (144,901 | ) | 2,331,529 | |||||||||||||
Gross Profit
|
33,731 | 226,672 | 9,625 | - | 270,028 | |||||||||||||||
General and Administrative Expenses
|
45,456 | 105,801 | 1,187 | - | 152,444 | |||||||||||||||
INCOME (LOSS) FROM CONSTRUCTION OPERATIONS
|
(11,725 | ) | 120,871 | 8,438 | - | 117,584 | ||||||||||||||
Equity in Earnings of Subsidiaries
|
80,459 | - | - | (80,459 | ) | - | ||||||||||||||
Other Income (Expense), net
|
6,639 | (14 | ) | 23 | - | 6,648 | ||||||||||||||
Interest Expense
|
(23,963 | ) | (2,010 | ) | - | - | (25,973 | ) | ||||||||||||
Income before Income Taxes
|
51,410 | 118,847 | 8,461 | (80,459 | ) | 98,259 | ||||||||||||||
(Provision) Credit for Income Taxes
|
10,690 | (43,735 | ) | (3,114 | ) | - | (36,159 | ) | ||||||||||||
NET INCOME
|
$ | 62,100 | $ | 75,112 | $ | 5,347 | $ | (80,459 | ) | $ | 62,100 |
Tutor Perini
Corporation
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
Consolidated
|
||||||||||||||||
Revenues
|
$ | 360,386 | $ | 2,234,953 | $ | - | $ | (84,082 | ) | $ | 2,511,257 | |||||||||
Cost of Operations
|
288,943 | 2,051,882 | (11,201 | ) | (84,082 | ) | 2,245,542 | |||||||||||||
Gross Profit
|
71,443 | 183,071 | 11,201 | - | 265,715 | |||||||||||||||
General and Administrative Expenses
|
39,898 | 85,136 | 713 | - | 125,747 | |||||||||||||||
INCOME FROM CONSTRUCTION OPERATIONS
|
31,545 | 97,935 | 10,488 | - | 139,968 | |||||||||||||||
Equity in Earnings of Subsidiaries
|
64,209 | - | - | (64,209 | ) | - | ||||||||||||||
Other Income (Expense), net
|
3,022 | (3,428 | ) | 7 | - | (399 | ) | |||||||||||||
Interest Expense
|
(2,364 | ) | (3,652 | ) | (338 | ) | - | (6,354 | ) | |||||||||||
Income before Income Taxes
|
96,412 | 90,855 | 10,157 | (64,209 | ) | 133,215 | ||||||||||||||
Provision for Income Taxes
|
(11,821 | ) | (33,101 | ) | (3,702 | ) | - | (48,624 | ) | |||||||||||
NET INCOME
|
$ | 84,591 | $ | 57,754 | $ | 6,455 | $ | (64,209 | ) | $ | 84,591 |
Tutor Perini
Corporation
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
Consolidated
|
||||||||||||||||
Cash Flows from Operating Activities:
|
||||||||||||||||||||
Net income
|
$ | 62,100 | $ | 75,112 | $ | 5,347 | $ | (80,459 | ) | $ | 62,100 | |||||||||
Adjustments to reconcile net income to net cash from operating activities:
|
||||||||||||||||||||
Depreciation and amortization
|
3,911 | 25,463 | 220 | - | 29,594 | |||||||||||||||
Equity in earnings of subsidiaries
|
(80,459 | ) | - | - | 80,459 | - | ||||||||||||||
Stock-based compensation expense
|
6,820 | - | - | - | 6,820 | |||||||||||||||
Excess income tax benefit from stock-based compensation
|
(18 | ) | - | - | - | (18 | ) | |||||||||||||
Deferred income taxes
|
(161 | ) | 573 | - | - | 412 | ||||||||||||||
Loss on sale of equipment
|
- | (896 | ) | - | - | (896 | ) | |||||||||||||
Gain on bargain purchase
|
(4,000 | ) | - | - | - | (4,000 | ) | |||||||||||||
Other long-term liabilities
|
(4,819 | ) | (2,004 | ) | - | - | (6,823 | ) | ||||||||||||
Other non-cash items
|
(659 | ) | (2,592 | ) | - | - | (3,251 | ) | ||||||||||||
Changes in other components of working capital
|
(19,612 | ) | (187,547 | ) | (695 | ) | - | (207,854 | ) | |||||||||||
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
|
$ | (36,897 | ) | $ | (91,891 | ) | $ | 4,872 | $ | - | $ | (123,916 | ) | |||||||
Cash Flows from Investing Activities:
|
||||||||||||||||||||
Acquisitions, net of cash balance acquired
|
(337,873 | ) | - | - | - | (337,873 | ) | |||||||||||||
Business acquisition related payments
|
(3,000 | ) | - | - | - | (3,000 | ) | |||||||||||||
Acquisition of property and equipment
|
(4,284 | ) | (35,410 | ) | - | - | (39,694 | ) | ||||||||||||
Proceeds from sale of property and equipment
|
22 | 6,504 | - | - | 6,526 | |||||||||||||||
Proceeds from sale of available-for-sale securities
|
- | 7,388 | - | - | 7,388 | |||||||||||||||
Change in restricted cash
|
(3,425 | ) | (3,771 | ) | - | - | (7,196 | ) | ||||||||||||
Investment in other activities
|
- | - | - | - | - | |||||||||||||||
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES
|
$ | (348,560 | ) | $ | (25,289 | ) | $ | - | $ | - | $ | (373,849 | ) | |||||||
Cash Flows from Financing Activities:
|
||||||||||||||||||||
Proceeds from debt
|
466,659 | 101,123 | - | - | 567,782 | |||||||||||||||
Repayment of debt
|
(217,056 | ) | (46,003 | ) | - | - | (263,059 | ) | ||||||||||||
Excess income tax benefit from stock-based compensation
|
18 | - | - | - | 18 | |||||||||||||||
Issuance of Common Stock and effect of cashless exercise
|
(44 | ) | - | - | - | (44 | ) | |||||||||||||
Debt issuance costs
|
(4,989 | ) | - | - | - | (4,989 | ) | |||||||||||||
Increase (decrease) in intercompany advances
|
80,842 | (70,896 | ) | (9,946 | ) | - | - | |||||||||||||
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES
|
$ | 325,430 | $ | (15,776 | ) | $ | (9,946 | ) | $ | - | $ | 299,708 | ||||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
(60,027 | ) | (132,956 | ) | (5,074 | ) | - | (198,057 | ) | |||||||||||
Cash and Cash Equivalents at Beginning of Year
|
222,156 | 220,086 | 29,136 | - | 471,378 | |||||||||||||||
Cash and Cash Equivalents at End of Period
|
$ | 162,129 | $ | 87,310 | $ | 24,062 | $ | - | $ | 273,321 |
Tutor Perini
Corporation
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
|
Total
Consolidated
|
||||||||||||||||
Cash Flows from Operating Activities:
|
||||||||||||||||||||
Net income
|
$ | 84,591 | $ | 57,754 | $ | 6,455 | $ | (64,209 | ) | $ | 84,591 | |||||||||
Adjustments to reconcile net income to net cash from operating activities:
|
||||||||||||||||||||
Depreciation and amortization
|
3,836 | 19,254 | 238 | - | 23,328 | |||||||||||||||
Equity in earnings of subsidiaries
|
(64,209 | ) | - | - | 64,209 | - | ||||||||||||||
Stock-based compensation expense
|
10,168 | - | - | - | 10,168 | |||||||||||||||
Adjustment of investments to fair value
|
25 | - | - | - | 25 | |||||||||||||||
Deferred income taxes
|
(2,957 | ) | (102 | ) | - | - | (3,059 | ) | ||||||||||||
Loss on sale of equipment
|
2 | 348 | - | - | 350 | |||||||||||||||
Other long-term liabilities
|
(1,166 | ) | (2,511 | ) | - | - | (3,677 | ) | ||||||||||||
Other non-cash items
|
- | - | - | - | - | |||||||||||||||
Changes in other components of working capital
|
(32,552 | ) | (109,994 | ) | (5,129 | ) | - | (147,675 | ) | |||||||||||
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
|
$ | (2,262 | ) | $ | (35,251 | ) | $ | 1,564 | $ | - | $ | (35,949 | ) | |||||||
Cash Flows from Investing Activities:
|
||||||||||||||||||||
Business acquisition related payments
|
(3,000 | ) | (3,734 | ) | - | - | (6,734 | ) | ||||||||||||
Acquisition of property and equipment
|
(1,178 | ) | (14,724 | ) | (233 | ) | - | (16,135 | ) | |||||||||||
Proceeds from sale of property and equipment
|
92 | 1,764 | - | - | 1,856 | |||||||||||||||
Proceeds from sale of available-for-sale securities
|
6,865 | 53 | - | - | 6,918 | |||||||||||||||
Increase in Restricted Cash
|
(23,541 | ) | - | - | - | (23,541 | ) | |||||||||||||
Investment in other activities
|
- | 53 | - | - | 53 | |||||||||||||||
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES
|
$ | (20,762 | ) | $ | (16,588 | ) | $ | (233 | ) | $ | - | $ | (37,583 | ) | ||||||
Cash Flows from Financing Activities:
|
||||||||||||||||||||
Proceeds from debt
|
5,786 | 2,938 | - | - | 8,724 | |||||||||||||||
Repayment of debt
|
(10,392 | ) | (12,851 | ) | (5,560 | ) | - | (28,803 | ) | |||||||||||
Common stock repurchased under share repurchase program
|
(39,391 | ) | - | - | - | (39,391 | ) | |||||||||||||
Issuance of common stock and effect of cashless exercise
|
(325 | ) | - | - | - | (325 | ) | |||||||||||||
Debt issuance costs
|
(1,905 | ) | - | - | - | (1,905 | ) | |||||||||||||
Increase (decrease) in intercompany advances
|
(93,511 | ) | 84,434 | 9,077 | - | - | ||||||||||||||
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES
|
$ | (139,738 | ) | $ | 74,521 | $ | 3,517 | $ | - | $ | (61,700 | ) | ||||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
(162,762 | ) | 22,682 | 4,848 | - | (135,232 | ) | |||||||||||||
Cash and Cash Equivalents at Beginning of Year
|
266,171 | 58,388 | 23,750 | - | 348,309 | |||||||||||||||
Cash and Cash Equivalents at End of Period
|
$ | 103,409 | $ | 81,070 | $ | 28,598 | $ | - | $ | 213,077 |
(dollars in millions)
|
Backlog at
December 31,
2010
|
New Business
Awarded (1)
|
Revenues
Recognized
|
Backlog at
September 30,
2011
|
||||||||||||
Building
|
$ | 2,642.9 | $ | 1,302.6 | $ | (1,463.4 | ) | $ | 2,482.1 | |||||||
Civil
|
1,397.6 | 1,499.3 | (558.3 | ) | 2,338.6 | |||||||||||
Specialty Contractors
|
69.4 | 1,775.4 | (514.8 | ) | 1,330.0 | |||||||||||
Management Services
|
260.9 | 288.3 | (210.0 | ) | 339.2 | |||||||||||
Eliminations
|
(86.5 | ) | (98.5 | ) | 144.9 | (40.1 | ) | |||||||||
Total
|
$ | 4,284.3 | $ | 4,767.1 | $ | (2,601.6 | ) | $ | 6,449.8 |
|
(1)
|
New business awarded consists of the original contract price of projects added to our backlog plus or minus subsequent changes to the estimated total contract price of existing changes, plus the value of uncompleted contract work of businesses acquired.
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Unbilled costs and profits incurred to date*
|
$ | 131,038 | $ | 14,285 | ||||
Unapproved change orders
|
139,298 | 49,949 | ||||||
Claims
|
103,989 | 75,215 | ||||||
$ | 374,325 | $ | 139,449 |
*
|
Represents the excess of contract costs and profits recognized to date on the percentage of completion accounting method over the amount of contract billings to date on certain contracts.
|
Revenues for the
|
||||||||||||||||
Three Months Ended September 30,
|
||||||||||||||||
(dollars in millions)
|
2011
|
2010
|
$ Change
|
% Change
|
||||||||||||
Building
|
$ | 567.7 | $ | 511.2 | $ | 56.5 | 11.1 | % | ||||||||
Civil
|
281.3 | 171.2 | 110.1 | 64.3 | % | |||||||||||
Specialty Contractors
|
335.9 | 24.1 | 311.8 |
*NM
|
||||||||||||
Management Services
|
85.5 | 41.5 | 44.0 | 106.0 | % | |||||||||||
Eliminations
|
(104.0 | ) | (16.2 | ) | (87.8 | ) |
*NM
|
|||||||||
Total
|
$ | 1,166.4 | $ | 731.8 | $ | 434.6 | 59.4 | % |
*NM – Not Meaningful
|
Income (Loss) from Construction
|
|||||||||||||||||
Operations for the
|
|||||||||||||||||
Three Months Ended September 30,
|
|||||||||||||||||
(dollars in millions)
|
2011
|
2010
|
$ Change
|
% Change
|
|||||||||||||
Building
|
$ | 8.9 | $ | 28.5 | $ | (19.6 | ) | (68.8 | %) | ||||||||
Civil
|
23.8 | 27.3 | (3.5 | ) | (12.8 | %) | |||||||||||
Specialty Contractors
|
33.1 | (0.3 | ) | 33.4 |
*NM
|
||||||||||||
Management Services
|
5.4 | 2.9 | 2.5 | 86.2 | % | ||||||||||||
Corporate
|
(9.2 | ) | (8.4 | ) | (0.8 | ) | 9.5 | % | |||||||||
Total
|
$ | 62.0 | $ | 50.0 | $ | 12.0 | 24.0 | % |
*NM – Not Meaningful
|
(dollars in millions)
|
September 30,
2011
|
September 30,
2010
|
$ Change
|
% Change
|
||||||||||||
Three months ended
|
||||||||||||||||
Other Income (Expense), net
|
$ | 5.9 | $ | 0.4 | $ | 5.5 |
*NM
|
|||||||||
Interest Expense
|
11.6 | 1.6 | 10.0 |
*NM
|
||||||||||||
Provision for Income Taxes
|
20.9 | 17.8 | 3.1 | 17.4 | % |
*NM – Not Meaningful
|
Revenues for the
|
||||||||||||||||
Nine Months Ended September 30,
|
||||||||||||||||
(dollars in millions)
|
2011
|
2010
|
$ Change
|
% Change
|
||||||||||||
Building
|
$ | 1,463.4 | $ | 1,849.3 | $ | (385.9 | ) | (20.9 | )% | |||||||
Civil
|
558.3 | 493.3 | 65.0 | 13.2 | % | |||||||||||
Specialty Contractors
|
514.8 | 93.9 | 420.9 |
*NM
|
||||||||||||
Management Services
|
210.0 | 158.8 | 51.2 | 32.2 | % | |||||||||||
Eliminations
|
(144.9 | ) | (84.0 | ) | (60.9 | ) |
*NM
|
|||||||||
Total
|
$ | 2,601.6 | $ | 2,511.3 | $ | 90.3 | 3.6 | % |
*NM – Not Meaningful
|
Income from Construction
|
||||||||||||||||
Operations for the
|
||||||||||||||||
Nine Months Ended September 30,
|
||||||||||||||||
(dollars in millions)
|
2011
|
2010
|
$ Change
|
% Change
|
||||||||||||
Building
|
$ | 43.7 | $ | 79.4 | $ | (35.7 | ) | (45.0 | )% | |||||||
Civil
|
51.7 | 65.3 | (13.6 | ) | (20.8 | )% | ||||||||||
Specialty Contractors
|
35.8 | 10.8 | 25.0 |
*NM
|
||||||||||||
Management Services
|
14.5 | 12.9 | 1.6 | 12.4 | % | |||||||||||
Corporate
|
(28.1 | ) | (28.4 | ) | 0.3 | (1.1 | )% | |||||||||
Total
|
$ | 117.6 | $ | 140.0 | $ | (22.4 | ) | (16.0 | )% |
(dollars in millions)
|
September 30,
2011
|
September 30,
2010
|
$ Change
|
% Change
|
||||||||||||
Nine Months ended
|
||||||||||||||||
Other Income (Expense), net
|
$ | 6.6 | $ | (0.4 | ) | $ | 7.0 |
*NM
|
||||||||
Interest Expense
|
26.0 | 6.4 | 19.6 |
*NM
|
||||||||||||
Provision for Income Taxes
|
36.2 | 48.6 | (12.4 | ) | (25.5 | )% |
*NM – Not Meaningful
|
Nine Months Ended September 30,
|
||||||||
(dollars in millions)
|
2011
|
2010
|
||||||
Cash flows from:
|
||||||||
Operating activities
|
$ | (123.9 | ) | $ | (35.9 | ) | ||
Investing activities
|
(373.9 | ) | (37.6 | ) | ||||
Financing activities
|
299.7 | (61.7 | ) | |||||
Net (decrease) increase in cash
|
(198.1 | ) | (135.2 | ) | ||||
Cash at beginning of year
|
471.4 | 348.3 | ||||||
Cash at end of period
|
$ | 273.3 | $ | 213.1 |
|
·
|
our ability to win new contracts and convert backlog into revenue;
|
|
·
|
our ability to successfully and timely complete construction projects;
|
|
·
|
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 international or domestic political, social, economic, business, industry, market and regulatory conditions or circumstances;
|
|
·
|
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, 2010 filed with the Securities and Exchange Commission on March 4, 2011.
|
Exhibit 2.1
|
Stock Purchase Agreement dated July 1, 2011 by and among Tutor Perini Corporation, Lunda Construction Company, and each of the Shareholders of Lunda Construction Company (incorporated by reference to Exhibit 2.1 to Form 8-K filed on July 6, 2011). Exhibits, schedules (or similar attachments) to the Stock Purchase Agreement are not filed. The Company will furnish supplementally a copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request.
|
Exhibit 2.2
|
Agreement and Plan of Merger dated July 1, 2011 by and among Tutor Perini Corporation, GreenStar Services Corporation, Galaxy Merger, Inc., and GreenStar IH Rep LLC (incorporated by reference to Exhibit 2.2 to Form 8-K filed on July 6, 2011). Exhibits, schedules (or similar attachments) to the Agreement and Plan of Merger are not filed. The Company will furnish supplementally a copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request.
|
Exhibit 3.1
|
Restated Articles of Organization (incorporated by reference to Exhibit 4 to Form S-2 (File No. 33-28401) filed on April 28, 1989).
|
Exhibit 3.2
|
Articles of Amendment to the Restated Articles of Organization of Perini Corporation (incorporated by reference to Exhibit 3.2 to Form S-1 (File No. 333-111338) filed on December 19, 2003).
|
Exhibit 3.3
|
Articles of Amendment to the Restated Articles of Organization of Perini Corporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed on April 12, 2000).
|
Exhibit 3.4
|
Articles of Amendment to the Restated Articles of Organization of Perini Corporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed on September 11, 2008).
|
Exhibit 3.5
|
Articles of Amendment to the Restated Articles of Organization of Perini Corporation (incorporated by reference to Exhibit 3.5 to Form 10-Q filed on August 10, 2009).
|
Exhibit 3.6
|
Second Amended and Restated By-laws of Tutor Perini Corporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed on November 24, 2009).
|
Exhibit 4.1
|
Shareholders Agreement, dated as of April 2, 2008, by and among Tutor Perini Corporation, Ronald N. Tutor and the shareholders of Tutor-Saliba Corporation signatory thereto (incorporated by reference to Exhibit 4.1 to Form 8-K filed on April 7, 2008).
|
Exhibit 4.2
|
Amendment No. 1 to the Shareholders Agreement, dated as of September 17, 2010, by and between Tutor Perini Corporation and Ronald N. Tutor, as shareholder representative (incorporated by reference to Exhibit 4.1 to Form 8-K filed on September 20, 2010).
|
Exhibit 4.3
|
Amendment No. 2 to the Shareholders Agreement, dated as of June 2, 2011, by and between Tutor Perini Corporation and Ronald N. Tutor, as shareholder representative (incorporated by reference to Exhibit 4.1 to Form 8-K filed on September 6, 2011).
|
Exhibit 4.4
|
Amendment No. 3 to the Shareholders Agreement, dated as of September 13, 2011, by and between Tutor Perini Corporation and Ronald N. Tutor, as shareholder representative (incorporated by reference to Exhibit 4.1 to Form 8-K filed on September 16, 2011).
|
Exhibit 4.5
|
Indenture, dated October 20, 2010, by and among Tutor Perini Corporation, certain subsidiary guarantors named therein and Wilmington Trust FSB, as trustee (incorporated by reference to Exhibit 4.1 to Form 8-K filed on October 21, 2010).
|
Exhibit 4.6
|
Registration Rights Agreement dated October 20, 2010, by and among Tutor Perini Corporation, certain subsidiary guarantors named therein and the initial purchasers named therein (incorporated by reference to Exhibit 4.2 to Form 8-K filed on October 21, 2010).
|
Exhibit 10.1
|
Fifth Amended and Restated Credit Agreement, dated as of August 3, 2011, among Tutor Perini Corporation, the subsidiaries of Tutor Perini named therein, and Bank of America, N.A., and the other lenders that are parties thereto (incorporated by reference to Exhibit 10.3 to Form 10-Q filed on August 4, 2011).
|
Exhibit 10.2
|
Promissory Note, dated July 1, 2011, issued by Tutor Perini Corporation to GreenStar IH Rep LLC, in its capacity as the Interest Holder Representative on behalf of certain equity holders of GreenStar (incorporated by reference to Exhibit 10.1 to Form 8-K filed on July 6, 2011).
|
Exhibit 31.1
|
Certification of Principal Executive Officer Pursuant to Section 302 of the 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.
|
**Exhibit 101
|
The following materials from Tutor Perini Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (1) Consolidated Condensed Statements of Operations for the three and Nine Months ended September 30, 2011 and 2010, (2) Consolidated Condensed Balance Sheets as of September 30, 2011 and December 31, 2010, (3) Consolidated Condensed Statements of Stockholders’ Equity for the Nine Months ended September 30, 2011, (4) Consolidated Condensed Statements of Cash Flows for the Nine Months ended September 30, 2011 and 2010 and (5) Notes to Consolidated Condensed Financial Statements, tagged as blocks of text.
|
* These certifications are being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are not being filed as part of this Quarterly Report on Form 10-Q or as a separate disclosure document.
|
** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
Tutor Perini Corporation
|
|
Registrant
|
|
Date: November 4, 2011
|
/s/Michael J. Kershaw
|
Michael J. Kershaw, Executive Vice President and Chief Financial Officer
|
|
Duly Authorized Officer and Principal Financial Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Tutor Perini Corporation (the “registrant”);
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date: November 4, 2011
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/s/Ronald N. Tutor
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Ronald N. Tutor
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||
Chairman and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Tutor Perini Corporation (the “registrant”);
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2.
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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;
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3.
|
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;
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|
4.
|
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
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5.
|
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):
|
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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
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|
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.
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Date: November 4, 2011
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/s/Michael J. Kershaw
|
|
Michael J. Kershaw
|
||
Executive Vice President and Chief Financial Officer
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: November 4, 2011
|
/s/Ronald N. Tutor
|
Ronald N. Tutor
|
|
Chairman and Chief Executive Officer
|
|
(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: November 4, 2011
|
/s/Michael J. Kershaw
|
Michael J. Kershaw
|
|
Executive Vice President and Chief Financial Officer
|
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $) In Thousands, except Share data | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
ASSETS | ||
Property and Equipment, Accumulated Depreciation | $ 95,164 | $ 79,942 |
Stockholders' Equity | ||
Common Stock, par value (in dollars per share) | $ 1 | $ 1 |
Common Stock , shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common Stock , shares issued (in shares) | 47,315,050 | 47,089,593 |
Common Stock , shares outstanding (in shares) | 47,315,050 | 47,089,593 |
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) In Thousands, except Per Share data | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) [Abstract] | ||||
Revenues | $ 1,166,410 | $ 731,806 | $ 2,601,557 | $ 2,511,257 |
Cost of Operations | 1,046,055 | 641,136 | 2,331,529 | 2,245,542 |
Gross Profit | 120,355 | 90,670 | 270,028 | 265,715 |
General and Administrative Expenses | 58,319 | 40,710 | 152,444 | 125,747 |
INCOME FROM CONSTRUCTION OPERATIONS | 62,036 | 49,960 | 117,584 | 139,968 |
Other Income (Expense), net | 5,863 | 358 | 6,648 | (399) |
Interest Expense | (11,566) | (1,589) | (25,973) | (6,354) |
Income before Income Taxes | 56,333 | 48,729 | 98,259 | 133,215 |
Provision for Income Taxes | (20,856) | (17,796) | (36,159) | (48,624) |
NET INCOME | $ 35,477 | $ 30,933 | $ 62,100 | $ 84,591 |
BASIC EARNINGS PER COMMON SHARE (in dollars per share) | $ 0.75 | $ 0.65 | $ 1.32 | $ 1.75 |
DILUTED EARNINGS PER COMMON SHARE (in dollars per share) | $ 0.74 | $ 0.65 | $ 1.30 | $ 1.73 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
BASIC (in shares) | 47,291 | 47,357 | 47,192 | 48,455 |
Effect of Dilutive Stock Options and Restricted Stock Units Outstanding (in shares) | 473 | 539 | 670 | 498 |
DILUTED (in shares) | 47,764 | 47,896 | 47,862 | 48,953 |
Document And Entity Information (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Nov. 02, 2011 | Jun. 30, 2010 | |
Entity Registrant Name | TUTOR PERINI Corp | ||
Entity Central Index Key | 0000077543 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 434,565,224 | ||
Entity Common Stock, Shares Outstanding | 47,329,275 | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q3 | ||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2011 |
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Goodwill and Intangible Assets | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets |
During the third quarter of 2011, the Company completed a reorganization which resulted in the formation of the Specialty Contractors reporting unit and reportable segment. The Specialty Contractors reporting unit consists of the following subsidiary companies: GreenStar, Fisk, Powerco Electric Corporation (“Powerco”), Desert Mechanical, Inc (“DMI”) (all previously included in the Building reporting unit), and Superior Gunite (previously included in the Civil reporting unit). The reorganization enables the Company to focus on vertical integration through increased self-performed work capabilities, while maintaining the specialty contractors business with third parties, and it will strengthen the Company's position as a full-service contractor with greater control over scheduled delivery and risk management. The Company reallocated Goodwill between its reorganized reporting units based on a relative fair value assessment in accordance with the guidance on segment reporting. Changes in the carrying amount of Goodwill during the nine months ended September 30, 2011 associated with the reorganization and in connection with the acquisitions of Fisk, Anderson, Frontier, GreenStar, Lunda and Becho are shown in the tables below (in thousands):
Intangible Assets consist of the following (in thousands):
Amortization expense for the three and nine month periods ended September 30, 2011 was $2.9 million and $6.9 million, respectively. Amortization expense for the three and nine month periods ended September 30, 2010 was $1.9 million and $6.2 million, respectively. As of September 30, 2011, amortization expense is estimated to be $2.5 million for the remainder of 2011, $8.2 million in 2012, $6.5 million in 2013, $5.7 million in 2014, $3.5 million in 2015 and $15.4 million thereafter. |
Earnings per Common Share | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | |||
Earnings per Common Share [Abstract] | |||
Earnings per Common Share |
Basic earnings per common share were computed by dividing Net Income 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 and restricted stock awards outstanding on the weighted average number of common shares outstanding. The computations of diluted earnings per common share for the three and nine months ended September 30, 2011 exclude 247,500 restricted stock units and 920,465 stock options because the awards would have an antidilutive effect. The computations of diluted earnings per common share for the three and nine months ended September 30, 2010 exclude 585,000 stock options because the awards would have an antidilutive effect. |
Significant Accounting Policies | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2010. The Company has made no significant changes to these policies during the nine months ended September 30, 2011. In accordance with normal practice in the construction industry, the Company includes in current assets and current liabilities amounts related to construction contracts realizable and payable over a period in excess of one year. Costs and estimated earnings in excess of billings related to the Company's contracts and joint venture contracts at September 30, 2011 and December 31, 2010, consisted of the following (in thousands):
Of the balance of “Unapproved change orders” and “Claims” included above in costs and estimated earnings in excess of billings at September 30, 2011 and December 31, 2010, approximately $87.2 million and $74.1 million, respectively, are amounts subject to pending litigation or dispute resolution proceedings as described in Note 7. These amounts are management's estimate of the probable cost recovery from the disputed claims considering such factors as evaluation of entitlement, settlements reached to date and experience with the customer. In the event that future facts and circumstances, including the resolution of disputed claims, cause a reduction in the aggregate amount of the estimated probable cost recovery from the disputed claims, the amount of such reduction will be recorded against earnings in the relevant future period. In May 2011, the Financial Accounting Standard Board (“FASB”) issued a staff position amending existing guidance for fair value measurements and disclosures in both interim and annual financial statements. This update expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This update will be effective for the Company with the interim and annual reporting periods for fiscal years beginning after December 15, 2011. Other than requiring additional disclosures, adoption of this update will not have a material effect on the Company's consolidated financial statements. In June 2011, the FASB issued a staff position which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. This update eliminates the option to present components of other comprehensive income as part of the statement of equity. This update will be effective for the Company with the interim and annual reporting periods for fiscal years beginning after December 15, 2011. The adoption of this update will not have a material effect on the Company's consolidated financial statements. In September 2011, the FASB issued a staff position that gives an entity the option to make a qualitative evaluation about the likelihood of Goodwill impairment. An entity will be required to perform the two-step impairment test only if it concludes that the fair value of a reporting unit is more likely than not less than its carrying value. This update is effective for annual and interim Goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. This update will be effective for the Company with the interim and annual reporting periods for fiscal years beginning after December 15, 2011. The adoption of this update will not have a material effect on the Company's consolidated financial statements. In September 2011, the FASB issued a staff position that revises the way in which entities disclose participation in a multiemployer plan. This update will be effective for the Company with the annual reporting period for the fiscal year ending after December 15, 2011. Other than requiring additional disclosures, adoption of this update will not have a material effect on the Company's consolidated financial statements. |
Common Stock Repurchase Program | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | |||
Common Stock Repurchase Program [Abstract] | |||
Common Stock Repurchase Program |
The Company's Common Stock repurchase program expired on March 31, 2011. There were no repurchases of Common Stock made under the program during the three and nine months ended September 30, 2011. During the three and nine months ended September 30, 2010, the Company repurchased 1,547,749 and 2,164,840 shares, respectively, under the program for aggregate purchase prices of $28.2 million and $39.4 million, respectively. On a cumulative basis during 2009 and 2010, the Company repurchased 4,168,238 shares under the program for an aggregate purchase price of $71.2 million, or an average purchase price per share of $17.08. |
Employee Pension Plans | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Pension Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Pension Plans |
The Company has a defined benefit pension plan and an unfunded supplemental retirement plan. Effective September 1, 2004, all benefit accruals under the Company's pension plan were frozen; however, the current vested benefit was preserved. The pension disclosure presented below includes aggregated amounts for both of the Company's plans. The following table sets forth the net periodic benefit cost by component for the three and nine months ended September 30, 2011 and 2010 (in thousands):
The Company contributed $3.8 million and $5.2 million to its defined benefit pension plan during the three and nine months ended September 30, 2011, respectively and $1.2 million and $2.3 million during the three and nine months ended September 30, 2010, respectively. The Company expects to contribute an additional $0.8 million to its defined benefit pension plan during the remainder of fiscal year 2011. |
Stock-Based Compensation | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation |
The Company recognized a $0.3 million credit in General and Administrative Expenses related to stock-based compensation awards for the three months ended September 30, 2011, and $6.8 million of total compensation expense for the nine months ended September 30, 2011. For the three and nine months ended September 30, 2010 the Company recognized total compensation expense of $2.7 million and $10.2 million, respectively, related to stock-based compensation awards. Restricted Stock Awards Restricted stock awards vest subject to the satisfaction of service requirements or the satisfaction of both service requirements and achievement of certain pre-established pre-tax income performance targets. Upon vesting, each award is exchanged for one share of the Company's Common Stock. As of September 30, 2011, the Compensation Committee has approved the grant of an aggregate of 4,092,500 restricted stock awards to eligible participants. In March 2011, the Compensation Committee established the 2011 pre-tax income performance targets for 269,998 restricted stock units awarded in 2009 and 2010. In September 2011, the Compensation Committee cancelled 107,500 restricted stock unit awards and replaced these with 145,000 new restricted stock unit awards, and also approved the grant of 102,500 new restricted stock unit awards. Of the September 2011 restricted stock unit awards approved, 138,750 of the restricted stock unit awards will vest in 2014 subject only to the satisfaction of service requirements and 108,750 of the restricted stock unit awards will vest in 2014 subject to the satisfaction of both service requirements and achievement of certain pre-established pre-tax income targets. The Compensation Committee has established the applicable pre-tax income performance targets for these awards, and the grant date fair value for these shares was determined based on the closing price of the Company's Common Stock on the date the performance criteria were established. Additionally, 95,000 restricted stock unit awards were forfeited during September 2011. For the three and nine months ended September 30, 2011, the Company recognized a $0.9 million credit and compensation expense of $4.5 million, respectively, related to restricted stock awards. As of September 30, 2011 there was $12.2 million of unrecognized compensation cost related to the unvested awards which, absent significant forfeitures in the future, is expected to be recognized over a weighted average period of approximately 2.4 years. A summary of restricted stock awards activity under the plan for the nine months ended September 30, 2011 is as follows:
____________________________________________
The outstanding unvested awards at September 30, 2011 are scheduled to vest as follows, subject where applicable to the achievement of performance targets. As described above, certain performance targets are not yet established.
Approximately 238,750 of the unvested awards will vest based on the satisfaction of service requirements and 1,465,417 will vest based on the satisfaction of both service requirements and the achievement of pre-tax income performance targets. In March 2011, the Compensation Committee established the 2011 pre-tax income performance target for 150,000 stock options awarded in 2009 and 2010. In September 2011, the Compensation Committee cancelled 95,000 stock option awards and replaced these with 140,000 stock option awards, and also approved the grant of 70,465 new stock option awards. Of the September 2011 stock option awards approved, 85,000 of the stock option awards will vest in 2014 subject only to the satisfaction of service requirements, 85,000 of the stock option awards will vest in 2014 subject to the satisfaction of both service requirements and achievement of certain pre-established pre-tax income targets, and 40,465 of the stock option awards vested immediately at the grant date. The exercise price of the options is equal to the closing price of the Company's Common Stock on the date the awards were approved by the Compensation Committee. The Compensation Committee has established the applicable pre-tax income performance targets for these awards. The stock option awards approved in 2009 and 2011 expire in May 2019 and May 2021, respectively. Additionally, 50,000 stock option awards were forfeited during September 2011. For the three and nine month periods ended September 30, 2011, the Company recognized compensation expense of $0.6 million and $2.3 million, respectively, related to stock option awards. As of September 30, 2011, there was $4.6 million of unrecognized compensation expense related to the outstanding options which, absent significant forfeitures in the future, is expected to be recognized over a weighted average period of approximately 2.5 years. A summary of stock option activity under the plan for the nine months ended September 30, 2011 is as follows:
There were 340,465 options that have vested and were exercisable at September 30, 2011 at a weighted average exercise price of $19.55 per share. Of the remaining options outstanding, approximately 650,000 of the outstanding options will vest based on the satisfaction of service requirements and 535,000 will vest based on the satisfaction of both service requirements and the achievement of pre-tax income performance targets. The outstanding options had no intrinsic value and a weighted average remaining contractual life of 7.8 years at September 30, 2011. The fair value of the third tranche of the 2009 awards, amounting to 150,000 options, was determined using the Black-Scholes option pricing model using the following key assumptions:
The fair value of 30,000 of the new awards granted in September 2011 was determined using the Black-Scholes option pricing model using the following key assumptions:
The fair value of 40,465 of the new awards granted in September 2011 was determined using the Black-Scholes option pricing model using the following key assumptions:
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Contingencies and Commitments | 9 Months Ended | ||
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Sep. 30, 2011 | |||
Contingencies and Commitments [Abstract] | |||
Contingencies and Commitments |
The Company and certain of its subsidiaries are involved in litigation and are contingently liable for commitments and performance guarantees arising in the ordinary course of business. The Company and certain of its clients have made claims arising from the performance under its contracts. The Company recognizes certain significant claims for recovery of incurred cost when it is probable that the claim will result in additional contract revenue and when the amount of the claim can be reliably estimated. Several matters are in the litigation and dispute resolution process. The following discussion provides a background and current status of these matters. Tutor-Saliba-Perini Joint Venture vs. Los Angeles MTA Matter During 1995 Tutor-Saliba-Perini (“Joint Venture”) 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 (“LAMTA”), seeking to recover costs for extra work required by LAMTA in connection with the construction of certain tunnel and station projects. In 1999, LAMTA countered with civil claims under the California False Claims Act (“CFCA”) against the Joint Venture, Tutor-Saliba and the Company jointly and severally (together, “TSP”). Between 2005 and 2010, the court granted certain Joint Venture motions and LAMTA capitulated on others which reduced the number of false claims LAMTA may seek and limited LAMTA's claims for damages and penalties. In September 2010, LAMTA dismissed its remaining claims and agreed to pay the entire amount of the Joint Venture's remaining claims plus interest. The Court subsequently entered judgment in favor of TSP and against LAMTA in the amount of $3 million. This amount is after deducting the amount of $0.5 million, representing the tunnel handrail verdict plus accrued interest against TSP. The parties filed post-trial motions for costs and fees. The Court ruled TSP's Sureties could recover costs, MTA could recover costs for the tunnel handrail trial, and no party could recover attorneys' fees. In April 2011, TSP filed a notice of appeal regarding the false claims jury verdict on the tunnel handrail claim and other issues, and LAMTA subsequently filed its notice of cross-appeal. TSP will appeal the Court's order denying TSP and its Sureties' request for attorneys' fees. The appeal of this case is expected to take at least a year. The Company does not expect this matter to have any material adverse effect on its consolidated financial statements. Perini/Kiewit/Cashman Joint Venture-Central Artery/Tunnel Project Matter Perini/Kiewit/Cashman Joint Venture (“PKC”), a joint venture in which the Company holds a 56% interest and is the managing partner, is currently pursuing a series of claims, instituted at different times over the course of the past ten years, for additional contract time and/or compensation against the Massachusetts Highway Department (“MHD”) for work performed by PKC on a portion of the Central Artery/Tunnel (“CA/T”) 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. MHD has asserted counterclaims for liquidated damages and backcharges. Certain of PKC's claims have been presented to a Disputes Review Board (“DRB”) which consists of three construction experts chosen by the parties. To date, four DRB panels have issued twelve awards and several interim decisions in favor of PKC's claims, amounting to total awards to PKC in excess of $127 million, of which $109 million were binding awards. In December 2010, the Suffolk County Superior Court granted MHD's motion for summary judgment to vacate the Third DRB Panel's award to PKC for approximately $55 million. The Court granted the motion on the grounds that the arbitrators do not have authority to decide whether particular claims are subject to the arbitration provision of the contract. PKC also filed a motion for reconsideration in the trial court which was denied. MHD has also moved to vacate approximately $12 million of the Fourth DRB Panel's total awards to PKC on the same arbitrability basis that the Third DRB's awards were vacated. In April 2011, PKC filed a notice of appeal regarding the Court's ruling. Subject to the results of further proceedings as a result of the Court's decision with respect to the Third DRB Panel's award to PKC, it is PKC's position that the remaining claims to be decided by the DRB on a binding and non-binding basis have an anticipated value of approximately $3.0 million, plus interest. Hearings before the DRB are scheduled to continue through 2011. Management has made an estimate of the anticipated recovery on this project and it is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the financial statements at that time. Long Island Expressway/Cross Island Parkway Matter The Company reconstructed the Long Island Expressway/Cross Island Parkway Interchange (the “Project”) for the New York State Department of Transportation (the “NYSDOT”). The $130 million project was substantially completed in January 2004 and was accepted by the NYSDOT as finally complete in February 2006. The Company incurred significant added costs in completing its work and suffered extended schedule costs due to numerous design errors, undisclosed utility conflicts, lack of coordination with local agencies and other interferences for which the Company believes that the NYSDOT is responsible. In April 2009, the Company made a presentation of its position to the NYSDOT regarding additional relief it seeks from the NYSDOT. In June 2010, the Company requested that NYSDOT close-out the Project, after which the NYSDOT notified the Company that it will conduct an audit of the Company's costs under the project. In September 2011, the Company reached agreement on final payment with the Comptroller's Office on behalf of the NYSDOT. The final agreement amount resulted in an amount of $0.5 million payable to the Company and formally closes out the project. The Company will re-file its claim in the New York State Court of Claims, in the amount of $53.8 million by the end of 2011. Management has made an estimate of the total anticipated recovery on this project and it is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the financial statements at that time. Queensridge Matter Perini Building Company, Inc. (“PBC”) was the general contractor for the construction of One Queensridge Place, a condominium project in Las Vegas, Nevada. The developer of the project, Queensridge Towers, LLC / Executive Home Builders, Inc. (“Queensridge”), has failed to pay PBC for work which PBC and its subcontractors performed on the project. Subcontractors have brought claims against PBC and have outstanding liens on the property in the amount of approximately $19 million. PBC also has an outstanding lien on the property in the amount of approximately $24 million, representing unpaid contract balances and additional work; $19 million of PBC's $24 million lien amount would be paid to subcontractors. Queensridge has alleged that PBC and its subcontractors are not due amounts sought and that it has back charges from incomplete and defective work. PBC filed an arbitration demand, asserting $35 million in claims against Queensridge, including $25 million for contract damages and $10 million for punitive damages. The arbitration process is proceeding. Queensridge simultaneously filed a motion for reconsideration of the Supreme Court's denial of Queensridge's appeal relating to the resolved spoliation issue. The Nevada Supreme Court denied Queensridge's appeal. In March 2011, Queensridge filed a motion for an en banc hearing on this matter. The Nevada Supreme Court denied Queensridge's motion in July 2011. In April 2011, the American Arbitration Association granted PBC's request for consolidation of claims. All claims will be arbitrated. The arbitration hearing schedule was set and will commence in February 2012, after interim hearings on specific issues which are scheduled to begin in November 2011. Management has made an estimate of the total anticipated recovery on this project and it is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the financial statements at that time. Gaylord Hotel and Convention Center Matter In 2005, Gaylord National, LLC (“Gaylord”), as Owner, and Perini Building Company, Inc. / Tompkins Builders, Joint Venture (“PTJV”), as Construction Manager, entered into a contract to construct the Gaylord National Resort and Convention Center (the “Project”) in Maryland. The Project is complete and as part of its settlement with Gaylord reached in November 2008, PTJV agreed to pay all subcontractors and defend all claims and lien actions by them relating to the Project. PTJV has closed out most subcontracts. Resolution of the issues with the remaining subcontractors may require mediation, arbitration and/or trial. PTJV is pursuing an insurance claim for approximately $40 million related to work performed by Banker Steel Company, Inc. (“Banker Steel”), a subcontractor, including $11 million for business interruption costs incurred by Gaylord which have effectively been assigned to PTJV. In November 2009, PTJV filed suit against Factory Mutual Insurance Co. (“FM”) in the Maryland federal district court alleging FM breached the insurance contracts and for declaratory judgment with respect to the insurance coverage. In December 2010, PTJV filed suit against ACE American Insurance Company (“ACE”) in Maryland federal district court alleging ACE breached the general liability insurance contract, requesting a declaratory judgment with respect to the insurance coverage and for bad faith. The court assigned an April 2012 trial date; however, the parties are still participating in settlement discussions. Management has made an estimate of the total anticipated recovery on this project and it is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the financial statements at that time. Fontainebleau Matter DMI and Fisk, wholly owned subsidiaries of the Company, were subcontractors on the Fontainebleau Project in Las Vegas (“Fontainebleau”), a hotel/casino complex with approximately 3,800 rooms. In June 2009, Fontainebleau filed for bankruptcy protection, under Chapter 11 of the U.S. Bankruptcy Code, in the Southern District of Florida. Fontainebleau is headquartered in Miami, Florida. DMI and Fisk filed liens in Nevada for approximately $44 million, representing unreimbursed costs to date and lost profits, including anticipated profits. Other unaffiliated subcontractors have also filed liens. In June 2009, DMI filed suit against Turnberry West Construction, Inc. (“Turnberry”), the general contractor, in the 8th Judicial District Court, Clark County, Nevada, seeking damages based on contract theories. In April 2010, the court entered a default judgment in favor of DMI and against Turnberry for Turnberry's failure to answer the DMI complaint and in May 2010, the court entered an order on the default judgment in favor of DMI for approximately $45 million. DMI is uncertain as to Turnberry's present financial condition. In January 2010, the Bankruptcy Court approved the sale of the property to Icahn Nevada Gaming Acquisition, LLC and this transaction closed in February 2010. As a result of a July 2010 ruling relating to certain priming liens there is now approximately $125 million set aside from this sale, which is available for distribution to satisfy the creditor claims based on seniority. The total estimated sustainable lien amount is approximately $350 million. The project lender filed suit against the mechanic's lien claimants, including DMI and Fisk, alleging that certain mechanic's liens are invalid and that all mechanic's liens are subordinate to the lender's claims against the property. Mediation efforts to resolve lien priority have been unsuccessful. The Nevada Supreme Court has agreed to hear the case and rule on the issue of lien priority, which once received will be referred to the Bankruptcy Court for further proceedings. Management has made an estimate of the total anticipated recovery on this project and it is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the financial statements at that time. MGM CityCenter Matter Perini Building Company, Inc., a wholly owned subsidiary of the Company, contracted with MGM MIRAGE Design Group (“MGM”) in March 2005 to construct the CityCenter project in Las Vegas, Nevada (the “Project”). The Project, which encompasses nineteen separate contracts, is a 66-acre urban mixed use development consisting of hotels, condominiums, retail space and a casino. The Company achieved substantial completion of the Project in December 2009, and MGM opened the Project to the public on the same date. In March 2010, the Company filed suit against MGM and certain other property owners in the Clark County District Court alleging (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) tortious breach of the implied covenant of good faith and fair dealing, (4) unjust enrichment, (5) fraud and intentional misrepresentation, (6) foreclosure of mechanic's lien, and (7) claim of priority. In March 2010, the Company also filed a $491 million mechanic's lien against the Project. In a Current Report on Form 8-K filed by MGM in March 2010, and in subsequent communications issued, MGM has asserted that it believes it owes substantially less than the claimed amount and that it has claims for losses in connection with the construction of the Harmon Hotel and is entitled to unspecified offsets for other work on the Project. According to MGM, the total of the offsets and the Harmon Hotel claims exceed the amount claimed by the Company. MGM's filing and subsequent communications do not specify in any detail the basis for MGM's belief that it has such claims against the Company. In May 2010, MGM filed a counterclaim and third party complaint against the Company and its subsidiary Perini Building Company. In June 2010, MGM filed its First Amended Third Party Complaint in which MGM removed certain causes of actions against the Company. The court granted the Company and MGM's joint motion to consolidate all subcontractor initiated actions into the main CityCenter lawsuit. Trial was scheduled for September 2011, but has been postponed since the Nevada Supreme Court stayed the case in November 2010, in response to MGM's request after an adverse ruling against MGM to disqualify MGM's local counsel. The stay was lifted in October 2011. A trial date has been set for February 2013. MGM informed the Court in its subsequent status conference statement that MGM will seek Court permission to demolish the Harmon Tower, one of the CityCenter buildings. The Company's carrier filed a separate lawsuit in federal court for declaratory relief asking the Court to find it has no duty to defend and indemnify the Company from MGM's claims. The Company filed a motion to dismiss this suit and later, in October 2011, a motion for abstention because the issues could be decided in Nevada State Court where the underlying action is pending. In public statements, MGM asserted its intent to enter into settlement discussions directly with subcontractors under contract with the Company. As of September 2011, MGM has reached agreements with subcontractors to settle at a discount $268 million of amounts previously billed to MGM. The Company has reduced amounts included in revenues, cost of construction operations, accounts receivable and accounts payable for the reduction in subcontractor pass-through billings. At September 30, 2011, the Company had approximately $222 million recorded as contract receivables for amounts due and owed to the Company and its subcontractors. Included in the Company's receivables are pass-through subcontractor billings for contract work and retention, and other requests for equitable adjustment for additional work in the amount of $85 million. As pass-through subcontractor billings are settled, the Company will reduce its mechanic's lien as appropriate. As of September 30, 2011, the Company's mechanic's lien has been reduced to $313 million. In the event MGM reaches additional settlements with subcontractors for amounts less than currently due and the settlement is agreed to by the Company, the Company will reduce amounts included in revenues, cost of construction operations, accounts receivable and accounts payable for the reduction in subcontractor pass-through billings, which the Company would not expect to have an impact on recorded profit. With respect to alleged losses at the Harmon Hotel, the Company has contractual indemnities from the responsible subcontractor, as well as existing insurance coverage that it expects will be available and sufficient to cover any liability that may be associated with this matter. The Company is not aware of a basis for other claims that would amount to material offsets against what MGM owes to the Company. The Company does not expect this matter to have any material adverse effect on its consolidated financial statements. Management has made an estimate of the total anticipated recovery on this project and it is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the financial statements at that time. Honeywell Street/Queens Boulevard Bridges Matter In 1999, the Company was awarded a contract for reconstruction of the Honeywell Street/Queens Boulevard Bridges (the “Project”) for the City of New York (the “City”). In June 2003, after substantial completion of the Project, the Company initiated an action to recover $8.75 million in claims from the City on behalf of itself and its subcontractors. In February 2010, the Company initiated a second action in the Supreme Court of the State of New York to recover an additional $0.7 million in claims against the City for unpaid retention. In March 2010, the City filed counterclaims for $74.6 million and other relief, alleging fraud in connection with the DBE requirements for the Project. In May 2010, the Company served the City with its response to the City's counterclaims and affirmative defenses. Parties are discussing settlement possibilities. No trial date has been set. The Company does not expect this matter to have any material adverse effect on its consolidated financial statements. Westgate Planet Hollywood Matter Tutor-Saliba Corporation (“TSC”), a wholly owned subsidiary of the Company, contracted to construct a time share development in Las Vegas (the “Project”) which was substantially completed in December 2009. The Company's claims against the owner, Westgate Planet Hollywood Las Vegas, LLC (“WPH”), relate to unresolved owner change orders and other claims. The Company filed a lien on the project in April 2010 in the amount of $19.3 million, and filed its complaint in May 2010 with the District Court, Clark County, Nevada. Included in the Company's receivables are pass-through subcontractor billings for contract work and retention of approximately $12 million. Several subcontractors have also recorded liens, some of which have been released by bonds and some of which have been released as a result of subsequent payment. Westgate has posted a mechanic's lien release bond for $22.3 million. WPH filed a cross-complaint alleging non-conforming and defective work for approximately $51 million, primarily related to alleged defects, misallocated costs, and liquidated damages. Some or all of the allegations will be defended by counsel appointed by TSC's insurance carrier. TSC filed an amended complaint in May 2011, which increases TSC's claim to $22.3 million, and replaces the cause of action to foreclose its mechanic's lien with an action against WPH's lien release bond. The Court entered an order setting this case for mediation in October 2011, and the case did not settle at this mediation. The Court set trial for September 2012. The Company does not expect this matter to have any material adverse effect on its consolidated financial statements. Management has made an estimate of the total anticipated recovery on this project and it is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the financial statements at that time. 100th Street Bus Depot Matter The Company constructed the 100th Street Bus Depot for the New York City Transit Authority (“NYCTA”) in New York. Prior to receiving notice of final acceptance from the NYCTA, this project experienced a failure of the brick façade on the building due to faulty subcontractor work. The Company has not yet received notice of final acceptance of this project from the NYCTA. The Company contends defective structural installation by the Company's steel subcontractor caused or was a causal factor of the brick façade failure. The Company has tendered its claim to the NYCTA Owner Controlled Insurance Program (“OCIP”) and to Chartis Claims, Inc. (“Chartis”), its insurance carrier. Coverage was denied in January 2011. The OCIP and general liability carriers have filed a declaratory relief action against the Company seeking court determination that no coverage is afforded under their policies. The Company believes it has legal entitlement to recover costs under the policies and intends to defend and pursue its claim against the carriers for breach of contract and appropriate associated causes of action. The Company filed a lawsuit against certain underwriters at Lloyds, London, the excess carrier, Illinois National Insurance Company, the insurance company of the state of Pennsylvania, and National Union Fire Insurance Company of Pittsburgh, Pennsylvania, with respect to this claim in the Commonwealth of Massachusetts, Suffolk County Superior Court, in June 2011. Management has made an estimate of the total anticipated recovery on this project and it is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the financial statements at that time. Brightwater Matter In 2006, the Department of Natural Resources and Parks Wastewater Treatment Division of King County (“King County”), as Owner, and Vinci Construction Grands Projects/Parsons RCI/Frontier-Kemper, Joint Venture (“VPFK”), as Contractor, entered into a contract to construct the Brightwater Conveyance System and tunnel sections (the “Project”) in Washington State. Frontier-Kemper, a wholly owned subsidiary of the Company, is a 20% minority partner in the joint venture. In April 2010, King County filed a lawsuit alleging damages in the amount of $74 million, plus costs, for VPFK's failure to complete specified components of the project in the King County Superior Court, State of Washington. Shortly thereafter, VPFK filed a counterclaim in the amount of approximately $75 million, seeking reimbursement for additional costs incurred as a result of differing site conditions, King County's defective specifications, for damages sustained on VPFK's tunnel boring machines (“TBM”), and increased costs as a result of hyperbaric interventions. VPFK's claims related to differing site conditions, defective design specifications, and damages to the TBM were presented to a Dispute Resolution Board (“DRB”). The DRB recommendations, dated August 1, 2011, generally found that King County was liable to VPFK for VPFK's claims for encountering differing site conditions, including damages to the TBM, but not on VPFK's alternative theory of defective specifications. King County has proposed the parties mediate the hyperbaric work claim. VPFK agreed to this request. Discovery is expected to continue through June 2012. The original trial date was continued by stipulation to September 2012. The ultimate financial impact of King County's lawsuit is not yet determinable. Management has made an estimate of the total anticipated recovery on the submitted claims and it is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the financial statements at that time. 156 Stations Matter In December 2003, Five Star Electric Corporation (“FSE”), a wholly owned subsidiary of the Company, entered into an agreement with the Prime Contractor Transit Technologies, L.L.C (“Transit”), a Consortium member of Siemens Transportation Transit Technologies, L.L.C (“Siemens”), to assist in the installation of new public address and customer information screens system for each of the 156 stations for the New York City Transit Authority (“NYCTA”) as the owner. Work on the project commenced in early 2004 and is substantially complete. In June 2007, FSE submitted a Demand for Arbitration against Transit to terminate its subcontract due to the execution of a Cure Agreement between the NYCTA, Siemens and Transit which severely amended FSE's rights under the Prime Contract, due to Transit's failure to provide information and equipment in a manner which would allow work to progress according to the approved baseline schedule, and for failure to tender payment in excess of a year. This arbitration demand also sought $18 million in damages caused by subcontract breaches on the part of Transit. On July 17, 2009, FSE unilaterally terminated its contract with Transit and amended its claim to include all costs incurred through the date it ceased work following its termination. This claim is for approximately $25 million. In August 2007, FSE commenced action against the Federal Insurance Company and St. Paul Fire and Marine Insurance Company, the payment bond sureties for the Consortium, in the Supreme Court of the State of New York. FSE's action was amended in November 2009, to include all costs incurred through the date work ceased following its termination. This claim, like the underlying arbitration, alleges damages of $25 million. In response, Transit notified Travelers Casualty and Surety Company of America (“Travelers”), FSE's surety, of its intent to default FSE from the contract for failure to perform. Transit filed a suit against Travelers in May 2011, in the Supreme Court of the State of New York, seeking compensation for damages allegedly suffered by Transit as a result of the actions of FSE and Travelers. The cause and amount of the damages are not specified in the suit; however, are for an amount in excess of $25 million up to the contract amount of $36 million. By an agreement executed in June 2011, Travelers tendered defense to FSE. The ultimate financial impact of Transit's lawsuit is not yet determinable. Management has made an estimate of the total anticipated recovery on the submitted claims and it is included in revenue recorded to date. To the extent new facts become known or the final recovery included in the claim settlement varies from the estimate, the impact of the change will be reflected in the financial statements at that time. Additionally, pursuant to the terms of the merger agreement with the former shareholders of GreenStar, the Company has contractual indemnities for claim losses allowed for by the GreenStar Indemnity Holdbacks as described in Note 3 above. |
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Acquisitions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions |
(a) Information regarding acquisitions that are material in the aggregate Acquisition of Fisk Electric Company On January 3, 2011, the Company completed the acquisition of Fisk Electric Company (“Fisk”), a privately held electrical construction company based in Houston, Texas. Under the terms of the transaction, the Company acquired 100% of Fisk's stock for $105 million in cash paid at closing and additional contingent consideration fair valued at $4.2 million that may become payable under the terms of the agreement based upon Fisk's operating results over the next three years. The transaction was financed using proceeds from the offering of senior unsecured notes which was completed in October 2010 (see Note 10). Fisk covers many of the major commercial and industrial electrical construction markets in southwestern and southeastern United States locations with the ability to cover other attractive markets nationwide. Fisk's expertise in the design development of electrical and technology systems for major projects spans a broad variety of project types including: commercial office buildings, sports arenas, hospitals, research laboratories, hospitality and casinos, convention centers, and industrial facilities. Fisk had approximately $190 million of backlog as of the date of acquisition. Fisk was acquired because the Company believes that it is a strong strategic fit enabling the Company to expand its nationwide electrical construction capabilities and to realize significant synergies and opportunities in support of the Company's non-residential building and civil operations. The acquisition was effective as of January 1, 2011 for accounting purposes and, accordingly, Fisk's financial results are included in the Company's consolidated results of operations and financial position beginning January 1, 2011. Fisk's operating results were not material to the Company's consolidated results for the three and nine months ended September 30, 2011. Fisk's operating results are included in the Company's newly formed Specialty Contractors segment. See Note 12 for disclosure of the completion of the Company's 2011 reorganization and the formation of the Specialty Contractors reportable segment. Acquisition of Anderson Companies On April 1, 2011, the Company acquired 100% ownership of Anderson Companies (“Anderson”), the privately held parent company of Roy Anderson Corporation, Harrell Contracting Group, LLC and Brice Building Company, LLC. Under the terms of the transaction, the Company acquired 100% of Anderson's stock for $61.9 million in cash and additional contingent consideration fair valued at $5.5 million that may become payable under the terms of the agreement based upon Anderson's operating results over the next three years. The transaction was financed using proceeds from the offering of senior unsecured notes which was completed in October 2010 (see Note 10). Anderson provides general contracting, design-build, preconstruction, and construction management services to its public and private clients throughout the southeastern United States and has expertise in gaming, hospitality, commercial, government, health care, industrial and educational facilities. Headquartered in Gulfport, Mississippi, Anderson has offices in Birmingham, Alabama; Jackson, Mississippi; New Orleans, Louisiana; and Pensacola, Florida. Anderson had approximately $475 million of backlog as of the date of acquisition. Anderson was acquired because the Company believes that it is a strong strategic fit for the Company's building business and strengthens the Company's position in the southeastern United States. The acquisition was effective as of April 1, 2011 for accounting purposes and, accordingly, Anderson's financial results are included in the Company's consolidated results of operations and financial position beginning April 1, 2011. Anderson's operating results were not material to the Company's consolidated results for the three and nine months ended September 30, 2011. Anderson's operating results are included in the Company's Building segment. Acquisition of Frontier-Kemper Constructors, Inc. On June 1, 2011, the Company acquired 100% ownership of Frontier-Kemper Constructors, Inc. (“Frontier-Kemper”), a privately held Indiana-based corporation. Under the terms of the transaction, the Company acquired 100% of Frontier-Kemper's stock for a purchase price of approximately $61.7 million in cash. In addition, the Company assumed approximately $52 million of debt, of which approximately $35 million was paid off at closing. The transaction was financed using proceeds from the offering of senior unsecured notes which was completed in October 2010 (see Note 10). Headquartered in Evansville, Indiana, Frontier-Kemper builds tunnels for highways, railroads, subways, rapid transit systems as well as shafts and other facilities for water supply and wastewater transport. It also develops and equips mines with innovative hoisting, elevator and vertical conveyance systems for the mining industry. Frontier-Kemper had approximately $300 million of backlog as of the date of acquisition. Frontier-Kemper was acquired because the Company believes that it is a strong strategic fit for the Company's civil business, bolstering the Company's tunneling business in the United States and expanding the Company's geographic reach into Canada. The acquisition was effective as of June 1, 2011 for accounting purposes and, accordingly, Frontier-Kemper's financial results are included in the Company's consolidated results of operations and financial position beginning June 1, 2011. Frontier-Kemper's operating results were not material to the Company's consolidated results for the three and nine months ended September 30, 2011. Frontier-Kemper's operating results are included in the Company's Civil segment. Acquisition of Becho, Inc. On August 18, 2011, the Company acquired 100% ownership of Becho, Inc. (“Becho”), a privately held Utah-based corporation. Under the terms of the transaction, the Company acquired 100% of Becho's stock for contingent consideration that may become payable under the terms of the agreement based upon Becho's operating results and financial position over the next three years. Headquartered in Salt Lake City, Utah, Becho specializes in drilling, foundation, and excavation support for shoring, bridges, piers, roads and highway projects primarily in the southwestern United States. Becho had 2010 annual revenues of approximately $10 million and a backlog of approximately $36 million as of the date of acquisition. Becho was acquired because the Company believes that it is a strong strategic fit for the Company's civil business, bolstering the Company's drilling capabilities in the southwestern United States. The acquisition was effective as of August 1, 2011 for accounting purposes and, accordingly, Becho's financial results are included in the Company's consolidated results of operations and financial position beginning August 1, 2011. Becho's operating results were not material to the Company's consolidated results for the three and nine months ended September 30, 2011. Becho's operating results are included in the Company's Civil segment. Aggregated Purchase Price Analysis The operating results generated by each of these four newly acquired businesses were not material individually to the Company's consolidated results for the three and nine months ended September 30, 2011. However, on an aggregate basis, the operating results of these four newly acquired businesses collectively did have a material impact on the Company's consolidated results for the three and nine months ended September 30, 2011. In accordance with the accounting guidance on business combinations, the following disclosures provide information on an aggregate basis with respect to the four newly acquired businesses. The aggregate total purchase consideration related to the acquisitions consisted of the following:
The following table summarizes the aggregate preliminary estimates of the fair values of identifiable assets acquired and liabilities assumed in the acquisitions and the resulting Goodwill as of the acquisition dates. The Company has not yet completed the final allocation of the purchase price to the tangible and Intangible Assets for these acquisitions, and is in the process of finalizing the valuations of Property and Equipment for Frontier-Kemper and Becho and Deferred Taxes for each of these acquisitions. Pending the outcome of further analysis, the preliminary purchase price allocation could change.
Intangible Assets – Of the total purchase price, $50.8 million has been allocated to customer relationships, contract backlog and trade names. The fair value of the customer relationships and contract backlog Intangible Assets will be amortized based on the period over which the economic benefits of these assets are expected to be realized. During the period from the acquisition dates through September 30, 2011, the Company recorded $3.1 million of amortization of Intangible Assets related to these acquisitions. Goodwill – Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and Intangible Assets. The factors that contributed to the recognition of Goodwill included talented management teams in place and established market positions that contribute to future cash flow generation. These acquisitions generated $67.7 million of Goodwill, of which $33.8 million is allocated to the Company's Building segment, $29.5 million is allocated to the Company's Specialty Contractors segment, and $4.4 million is allocated to the Company's Civil segment. Approximately $63.3 million of Goodwill acquired is expected to be deductible for tax purposes. Frontier-Kemper Bargain Purchase Gain – The acquisition of Frontier-Kemper resulted in a bargain purchase gain recorded in Other Income (Expense), net which was based on the estimated fair value of the assets acquired and liabilities assumed. The Company recognized $0.1 million and $0.6 million of acquisition related expenses for these acquisitions for the three and nine months ended September 30, 2011, respectively, which are included in General and Administrative Expenses in the Consolidated Condensed Statements of Operations. These expenses included legal fees, bank fees, consultation fees, travel expenses, and other miscellaneous direct and incremental administrative expenses associated with the acquisitions. Collectively, the amount of revenues and income from construction operations recorded in 2011 related to these acquisitions is as follows:
Unaudited pro forma results of operations The following pro forma financial information presents the results of the Company assuming the acquisitions of Fisk, Anderson, Frontier-Kemper, and Becho all took place on January 1, 2010.
The pro forma results have been prepared for comparative purposes only and include certain adjustments such as (i) interest expense on acquisition debt; (ii) adjustments to depreciation expense resulting from the adjustment of fixed asset bases to fair value at acquisition; (iii) additional amortization expense related to identifiable Intangible Assets arising from the acquisitions; (iv) elimination of acquisition related expenses incurred; and (v) to reflect a statutory income tax rate on the pretax income of Fisk, Anderson, Frontier-Kemper and Becho, as well as on the applicable pro forma adjustments made. The pro forma results are not necessarily indicative either of the results of operations that actually would have resulted had the acquisitions been in effect on January 1, 2010 or of future results. (b) Acquisition of GreenStar Services Corporation On July 1, 2011, the Company completed the acquisition of GreenStar Services Corporation (“GreenStar”). GreenStar is primarily comprised of three operating entities: Five Star Electric Corporation and WDF, Inc., which are located in New York, and Nagelbush Mechanical, which is located in Florida. GreenStar has served a range of clients in a wide variety of markets including transportation, infrastructure, commercial, school and university, residential, and specialty construction. Under the terms of the transaction, the Company acquired GreenStar through a merger with a wholly-owned subsidiary of the Company for a purchase price of $208.4 million, consisting of $100.0 million in cash, subject to post-close adjustments, a $74.9 million promissory note issued at closing which was paid in full on August 3, 2011, and $33.5 million of holdbacks to secure certain indemnification obligations and deferred management incentive payments (“GreenStar Indemnity Holdbacks”), $8 million of which were paid during the three months ended September 30, 2011. In addition to the amounts above, there is contingent consideration fair valued at $19.6 million that may become payable under the terms of the agreement based upon GreenStar's operating results over the next five years. The Company financed the transaction with available cash and borrowings under its revolving credit facility (see Note 10). In connection with the acquisition of GreenStar, the Company issued to the interest holder representative, on behalf of certain of GreenStar's former equity holders (the “Interest Holders”), a promissory note in the amount of approximately $74.9 million (the “GreenStar Seller Note”). Interest under the GreenStar Seller Note accrued at the rate of 8% per annum with all accrued but unpaid interest payable on August 1, September 1 and October 1, 2011. The GreenStar Seller Note and all accrued interest was paid off on August 3, 2011. GreenStar was acquired because it is one of the largest specialty contractors in the United States and it will provide an opportunity to expand the Company's presence in the northeastern markets. GreenStar had a backlog of approximately $1.2 billion as of the date of the acquisition. The acquisition was effective as of July 1, 2011 for accounting purposes and, accordingly, GreenStar's financial results are included in the Company's consolidated results of operations and financial position beginning July 1, 2011. GreenStar's operating results are included in the Company's newly formed Specialty Contractors segment. See Note 12 for disclosure of the completion of the Company's 2011 reorganization and the formation of the Specialty Contractors reportable segment. The Company has evaluated the materiality of the financial impact of the GreenStar acquisition and has deemed it to be material to the Company's consolidated results for the three and nine months ended September 30, 2011. In accordance with the accounting guidance on business combinations, the Company has also provided the following required disclosures for the GreenStar acquisition. Purchase Price Analysis The aggregate total purchase consideration related to the GreenStar acquisition consisted of the following:
The following table summarizes the aggregate preliminary estimates of the fair values of identifiable assets acquired and liabilities assumed in the GreenStar acquisition and the resulting Goodwill as of the acquisition date. The Company has not yet completed the final fair value assessment of contingent consideration or the allocation of the purchase price to the tangible and Intangible Assets for the GreenStar acquisition. Pending the outcome of further analysis, the preliminary purchase price allocation could change.
Goodwill – Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and Intangible Assets for which the fair value assessment has not yet been completed. The factors that contributed to the recognition of Goodwill included talented management teams in place and established market positions and geographic presence that will contribute to future cash flow generation. The GreenStar acquisition generated $76.8 million of Goodwill which was allocated to the Company's Specialty Contractors segment. Goodwill recorded relating to the GreenStar acquisition is not expected to be deductible for tax purposes. The Company recognized $0.4 million and $0.7 million of acquisition related expenses for the three and nine months ended September 30, 2011, respectively, which are included in General and Administrative Expenses in the Consolidated Condensed Statements of Operations. These expenses included legal fees, bank fees, consultation fees, travel expenses, and other miscellaneous direct and incremental administrative expenses associated with the GreenStar acquisition. Collectively, the amount of revenues and income from construction operations recorded in the three and nine months ended September 30, 2011 related to the GreenStar acquisition is as follows:
Unaudited pro forma results of operations The following pro forma financial information presents the results of the Company assuming the GreenStar acquisition took place on January 1, 2010.
The pro forma results have been prepared for comparative purposes only and include certain adjustments such as (i) interest expense on acquisition debt; (ii) adjustments to depreciation expense resulting from the adjustment of fixed asset bases to fair value at acquisition; (iii) additional amortization expense related to identifiable Intangible Assets arising from the acquisitions; (iv) elimination of acquisition related expenses incurred; and (v) to reflect a statutory income tax rate on GreenStar's pretax income, as well as on the applicable pro forma adjustments made. 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, 2010 or of future results. (c) Acquisition of Lunda Construction Company On July 1, 2011, the Company completed the acquisition of Lunda Construction Company (“Lunda”). Headquartered in Black River Falls, Wisconsin, and with offices in Wisconsin and Minnesota, Lunda is a heavy civil contractor engaged in the construction, rehabilitation and maintenance of bridges, railroads, and other civil structures in the Midwest and throughout the United States. Under the terms of the transaction, the Company acquired 100% of the stock of Lunda for a purchase price of $171.7 million, consisting of $149.9 million in cash, which includes post-close adjustments, and $21.7 million in notes payable in five years. In addition to the amounts above, there is contingent consideration fair valued at $20.8 million that may become payable under the terms of the agreement based upon Lunda's operating results over the next three years. The Company financed the transaction with the balance of proceeds available from the offering of senior unsecured notes which was completed in October 2010, as well as available cash and borrowings under its Revolving Facility (see Note 10). In connection with the acquisition of Lunda, the Company issued to the former Lunda shareholders promissory notes in an aggregate amount of approximately $21.7 million (the “Lunda Seller Notes”). Interest under the Lunda Seller Notes accrues at the rate of 5% per annum with all accrued but unpaid interest payable annually. The Lunda Seller Notes mature on July 1, 2016. The Company may prepay all or any portion of the Lunda Seller Notes at any time without premium or penalty. To the extent that the Company prepays all or any portion of its outstanding Senior Notes, it is also required to repay a pro rata portion (based upon the amount being prepaid under the Senior Notes and the total amount outstanding under the Senior Notes) of the Lunda Seller Notes. The Lunda Seller Notes are guaranteed by Lunda, which, as a result of the acquisition, is a wholly owned subsidiary of the Company. Lunda was acquired because the Company believes it is a strong strategic fit for its civil business and will provide the Company with the opportunity to expand its civil business into the midwestern United States. Lunda had a backlog of approximately $400 million as of the date of the acquisition. The acquisition was effective as of July 1, 2011 for accounting purposes and, accordingly, Lunda's financial results are included in the Company's consolidated results of operations and financial position beginning July 1, 2011. Lunda's operating results are included in the Company's Civil segment. The Company has evaluated the materiality of the financial impact of the Lunda acquisition and has deemed it to be material to the Company's consolidated results for the three and nine months ended September 30, 2011. In accordance with the accounting guidance on business combinations, the Company has also provided the following required disclosures for the Lunda acquisition. Purchase Price Analysis The aggregate total purchase consideration related to the Lunda acquisition consisted of the following:
The following table summarizes the aggregate preliminary estimates of the fair values of identifiable assets acquired and liabilities assumed in the Lunda acquisition and the resulting Goodwill as of the acquisition date. The Company has not yet completed the final allocation of the purchase price to the tangible and Intangible Assets for the Lunda acquisition. Pending the outcome of further analysis, the preliminary purchase price allocation could change.
Intangible Assets – Of the total purchase price, $26.6 million has been allocated to contract backlog and trade names. The fair value of contract backlog Intangible Asset will be amortized based on the period over which the economic benefits of the asset is expected to be realized. During the period from the acquisition date through September 30, 2011, the Company recorded $0.3 million of amortization of Intangible Assets related to the Lunda acquisition. Goodwill – Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and Intangible Assets. The factors that contributed to the recognition of Goodwill included talented management teams in place and established market positions that contribute to future cash flow generation. The Lunda acquisition generated $115.2 million of Goodwill which was allocated to the Company's Civil segment. Approximately $115.2 million of Goodwill acquired is expected to be deductible for tax purposes. The Company recognized $0.1 million and $0.2 million of acquisition related expenses, respectively, for the three and nine months ended September 30, 2011, which are included in General and Administrative Expenses in the Consolidated Condensed Statements of Operations. These expenses included legal fees, bank fees, consultation fees, travel expenses, and other miscellaneous direct and incremental administrative expenses associated with the Lunda acquisition. Collectively, the amount of revenues and income from construction operations recorded in the three and nine months ended September 30, 2011 related to the Lunda acquisition is as follows:
Unaudited pro forma results of operations The following pro forma financial information presents the results of the Company assuming the Lunda acquisition took place on January 1, 2010.
The pro forma results have been prepared for comparative purposes only and include certain adjustments such as (i) interest expense on acquisition debt; (ii) adjustments to depreciation expense resulting from the adjustment of fixed asset bases to fair value at acquisition; (iii) additional amortization expense related to identifiable Intangible Assets arising from the acquisitions; (iv) elimination of acquisition related expenses incurred; and (v) to reflect a statutory income tax rate on Lunda's pretax income, as well as on the applicable pro forma adjustments made. 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, 2010 or of future results. |
Cash, Cash Equivalents and Restricted Cash | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash |
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, including future distributions to joint venture partners. Restricted Cash is primarily held to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit. At September 30, 2011 and December 31, 2010, Cash and Cash Equivalents and Restricted Cash consisted of the following (in thousands):
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