# Tutor Perini Corp: Form 10-Q for the period ended Sep 30, 2023

- Company: [Tutor Perini Corp](/companies/tpc.md) (CIK 77543)
- Form: 10-Q
- Filed: 2023-11-09
- Accepted by EDGAR: Nov 9, 2023, 17:06 ET
- Period: 2023-09-30
- Accession: 0000077543-23-000177
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/77543/000007754323000177/tpc-20230930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/77543/000007754323000177/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-07-01 to 2023-09-30 | $1.06bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2023-01-01 to 2023-09-30 | $2.86bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2023-07-01 to 2023-09-30 | $1.01bn | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2023-01-01 to 2023-09-30 | $2.77bn | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2023-07-01 to 2023-09-30 | $50.9m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2023-01-01 to 2023-09-30 | $91.7m | us-gaap:GrossProfit |
| Operating income | 3 months, 2023-07-01 to 2023-09-30 | −$12.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-01-01 to 2023-09-30 | −$92.1m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-07-01 to 2023-09-30 | $20.3m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2023-01-01 to 2023-09-30 | $63.8m | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-07-01 to 2023-09-30 | −$4.1m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-01-01 to 2023-09-30 | −$52.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | −$36.9m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | −$123.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-07-01 to 2023-09-30 | −$0.71 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-01-01 to 2023-09-30 | −$2.39 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-07-01 to 2023-09-30 | −$0.71 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-01-01 to 2023-09-30 | −$2.39 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-07-01 to 2023-09-30 | 51,994,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-01-01 to 2023-09-30 | 51,784,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | $180.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2023-07-01 to 2023-09-30 | $15.0m | us-gaap:PaymentsToAcquireProductiveAssets |
| Capital expenditure | 9 months, 2023-01-01 to 2023-09-30 | $45.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2023-09-30 | $290.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-09-30 | $3.57bn | us-gaap:AssetsCurrent |
| Total assets | at 2023-09-30 | $4.49bn | us-gaap:Assets |
| Current liabilities | at 2023-09-30 | $2.04bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-09-30 | $3.15bn | us-gaap:Liabilities |
| Long-term debt | at 2023-09-30 | $876.8m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2023-09-30 | $28.0m | us-gaap:DebtCurrent |
| Shareholders' equity | at 2023-09-30 | $1.33bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 54,089 characters.

The following discussion and analysis of our financial position as of September 30, 2023 and the results of our operations for the three and nine months ended September 30, 2023 should be read in conjunction with other information, including the unaudited Condensed Consolidated Financial Statements and notes included in Part I, Item 1, Financial Information, of this Quarterly Report on Form 10‑Q, the audited consolidated financial statements and accompanying notes to our Annual Report on Form 10‑K for the year ended December 31, 2022, and the information contained under the heading “Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, 2022 and in Part II, Item 1A below.

### Forward-Looking Statements

This Quarterly Report on Form 10‑Q, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results, which are intended to be covered by the safe harbor provision for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are statements that could be deemed forward-looking statements. Words such as “achieve,” “anticipate,” “assumes,” “believes,” “continue,” “could,” “estimate,” “expects,” “forecast,” “hope,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “would,” variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Although such statements are based on currently available financial and economic data, as well as management’s estimates and expectations, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors potentially contributing to such differences include, among others:

- Unfavorable outcomes of existing or future litigation or dispute resolution proceedings against us or customers (project owners, developers, general contractors, etc.), subcontractors or suppliers, as well as failure to promptly recover significant working capital invested in projects subject to such matters;
- Revisions of estimates of contract risks, revenue or costs; economic factors such as inflation; the timing of new awards; or the pace of project execution, which has resulted and may continue to result in losses or lower than anticipated profit;
- Increased competition and failure to secure new contracts;
- Contract requirements to perform extra work beyond the initial project scope, which has and in the future could result in disputes or claims and adversely affect our working capital, profits and cash flows;
- Risks and other uncertainties associated with assumptions and estimates used to prepare our financial statements;
- A significant slowdown or decline in economic conditions, such as those presented during a recession;
- Failure to meet contractual schedule requirements, which could result in higher costs and reduced profits or, in some cases, exposure to financial liability for liquidated damages and/or damages to customers, as well as damage to our reputation;
- Failure to meet our obligations under our debt agreements (especially in a high interest rate environment), including the spring-forward maturity on January 30, 2025 of our Term Loan B and Revolver if any of the 2017 Senior Notes remain outstanding as of such date;
- Inability to attract and retain our key officers, and to adequately plan for their succession, and hire and retain personnel required to execute and perform on our contracts;
- Possible systems and information technology interruptions and breaches in data security and/or privacy;
- An inability to obtain bonding could have a negative impact on our operations and results;
- Risks related to our international operations, such as uncertainty of U.S. government funding, as well as economic, political, regulatory and other risks, including risks of loss due to acts of war, labor conditions and other unforeseeable events in countries where we do business, which could adversely affect our revenue and earnings;
- Decreases in the level of government spending for infrastructure and other public projects;
- Downgrades in our credit ratings;
- Failure of our joint venture partners to perform their venture obligations, which could impose additional financial and performance obligations on us, resulting in reduced profits or losses and/or reputational harm;
- The impact of inclement weather conditions on projects;
- Risks related to government contracts and related procurement regulations;
- Significant fluctuations in the market price of our common stock, which could result in substantial losses for stockholders and potentially subject us to securities litigation;
- Client cancellations of, or reductions in scope under, contracts reported in our backlog;
- Violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws;
- Public health crises, such as COVID-19, have adversely impacted, and could in the future adversely impact, our business, financial condition and results of operations by, among other things, delaying the timing of project bids and/or awards and the timing of dispute resolutions and associated collections;
- Physical and regulatory risks related to climate change;
- Impairment of our goodwill or other indefinite-lived intangible assets; and
- The exertion of influence over the Company by our chairman and chief executive officer due to his position and significant ownership interest.

### Executive Overview

### COVID-19 Update

During 2020 and 2021, the COVID-19 pandemic caused shut-downs or significant reductions in the operations of various courts and arbitration offices, which hindered the Company’s ability to resolve disputes related to unapproved work and resulted in the need for the Company to temporarily fund certain project costs that historically would have been promptly negotiated, billed to and collected from customers. This negative impact from the pandemic lessened in 2022 and remains low in 2023, with certain previously delayed disputes finally resolved and other settlement conferences and trial dates scheduled or being scheduled. Consequently, the Company has made and continues to expect to make substantial progress in the resolution of various disputes and unapproved change orders in 2023 and beyond.

Through the latter part of 2021, the pandemic also significantly delayed the bidding and awarding of various large prospective civil projects, which has affected the volume and timing of our new awards. The follow-on impact has been a substantial but temporary reduction in our backlog, revenue and income from construction operations over the past three years. For example, the Company’s consolidated backlog had been near a record level at $11.2 billion as of December 31, 2019, just prior to the onset of the COVID-19 pandemic, but declined in each subsequent year through 2022, and was $7.9 billion as of December 31, 2022, a 29% decrease compared to the end of 2019. Similarly, revenue declined 29% from $5.3 billion for 2020 to $3.8 billion for 2022, though there were other factors that contributed to the revenue decline, particularly in 2022, as discussed in the Form 10-K filed for the year ended December 31, 2022. The current impacts of the pandemic on new project awards have lessened, as evidenced by the recent strong growth in the Company’s backlog to $10.6 billion as of September 30, 2023, due primarily to new awards in 2023, the largest of which has been the $2.95 billion Brooklyn Jail progressive design-build project awarded in the second quarter of 2023. However, the follow-on impact from delayed project bids and large contract awards has continued to have a negative impact on our revenue and profitability. In addition, many of our state and local government customers’ revenue sources were negatively impacted by the pandemic due to a reduction of commuter and business travel. Despite improved commuter and business travel conditions, the significant revenue reductions experienced by these customers have, in some cases, continued to adversely impact their timely payment to the Company for amounts due, although these impacts have been moderating in 2023.

### Operating Results

Consolidated revenue for the three and nine months ended September 30, 2023 was $1.1 billion and $2.9 billion, respectively, level compared to the same periods in 2022. For both periods of 2023, higher revenue in the Civil and Building segments was offset by lower revenue in the Specialty Contractors segment, as discussed in more detail below in *Results of Segment Operations.* In addition, customer budgetary constraints induced by the COVID-19 pandemic, combined with certain political and other factors, resulted in the Company not being awarded certain Civil segment projects over the last few years totaling more than $10.0 billion despite having been the low or preferred bidder. Not being awarded these projects also impacted revenue for the first three quarters of both 2023 and 2022, and most of these projects are currently expected to be re-bid in 2024. Furthermore, the Company was unsuccessful in its pursuit of certain large prospective Civil segment projects in the second half of 2021, which also unfavorably impacted revenue in 2022 and 2023.

Loss from construction operations for the three months ended September 30, 2023 was $12.6 million compared to $6.9 million for the same period in 2022. The change was favorably impacted by the absence of certain prior-year unfavorable adjustments, as discussed further below in *Results of Segment Operations*, as well as an improved project mix, including contributions related to the volume increase on a Civil segment mass-transit project in California. During the third quarter of 2023, the Company reached a settlement that impacted multiple components of another Civil segment mass-transit project in California, which included the resolution of certain ongoing disputes and increased the expected profit from work to be performed in the future. The settlement resulted in an unfavorable non-cash adjustment of $23.2 million to one component of the project that is nearing completion, partially offset by a favorable adjustment of $8.8 million on the other component of the project that has substantial scope of work remaining. As a result of the settlement, the net unfavorable impact to the period from these two adjustments is expected to be mitigated by the increased profit generated from future work on the project. The third quarter of 2023 was also impacted by certain unfavorable adjustments, including $16.9 million due to changes in estimates on the Specialty Contractors segment’s electrical and mechanical scope of a transportation project in the Northeast associated with changes in the expected recovery on certain unapproved change orders resulting from ongoing negotiations, $14.0 million on the same transportation project in the Northeast, split evenly between the Civil and Building segments, primarily due to the settlement of certain change orders, changes in estimates due to recent negotiations and incremental cost incurred during project closeout, and a $9.4 million unfavorable adjustment due to ongoing negotiations and an anticipated settlement on a completed Specialty Contractors segment mass-transit project in California.

Loss from construction operations for the nine months ended September 30, 2023 was $92.1 million compared to $107.4 million for the same period in 2022. The change was primarily due to net favorable adjustments of $25.6 million on a Civil segment mass-transit project in California, which resulted from changes in estimates due to improved performance, as well as contributions related to the volume increase on that same project. The change was also due to the absence of certain prior-year unfavorable adjustments discussed below in *Results of Segment Operations* and an $18.0 million prior-year unfavorable adjustment split evenly between the Civil and Building segments due to changes in estimates on the aforementioned transportation project in the Northeast. The impact from the absence of these prior-year unfavorable adjustments was partially offset by a current-year first-quarter unfavorable adjustment related to an adverse legal ruling on a completed mixed-use project in New York, which resulted in a non-cash, pre-tax charge of $83.6 million in the first quarter of 2023, of which $72.2 million impacted the Building segment and $11.4 million impacted the Specialty Contractors segment. In addition, there were current-year unfavorable adjustments of $57.0 million due to changes in estimates on the Specialty Contractors segment’s electrical and mechanical scope of the transportation project in the Northeast associated with changes in the expected recovery on certain unapproved change orders resulting from ongoing negotiations; $27.5 million on the transportation project in the Northeast, split evenly between the Civil and Building segments, primarily due to the settlement of certain change orders, changes in estimates due to recent negotiations and incremental cost incurred during project closeout; $25.1 million in the second quarter of 2023 that resulted from an adverse court ruling on a Specialty Contractors segment educational facilities project in New York; the net impact of the aforementioned unfavorable adjustment of $23.2 million and related favorable adjustment of $8.8 million; and a $9.4 million unfavorable adjustment due to ongoing negotiations and an anticipated settlement on a completed Specialty Contractors segment mass-transit project in California.

Income tax benefit was $4.1 million and $52.0 million for the three and nine months ended September 30, 2023, respectively. This compares to an income tax expense of $0.6 million and an income tax benefit of $47.0 million for the three and nine months ended September 30, 2022, respectively. See *Corporate, Tax and Other Matters* below for a discussion of the change in the effective tax rate.

Diluted loss per common share for the three and nine months ended September 30, 2023 was $0.71 and $2.39, respectively, compared to diluted loss per common share of $0.63 and $2.28 for the same periods in 2022. The change for both periods of 2023 was primarily due to the factors discussed above that led to the change in income (loss) from construction operations.

Consolidated new awards for the three and nine months ended September 30, 2023 totaled $0.8 billion and $5.6 billion, respectively, compared to $0.9 billion and $3.0 billion for the same periods in 2022. The Civil and Building segments were the primary contributors to the new award activity in the third quarter of 2023. The most significant new awards and contract adjustments in the third quarter of 2023 included $115 million of additional funding for a health care project in California; $95 million and $81 million of additional funding for two different mass-transit projects in California; the $47 million New Everglades National Park Visitor Center project in Florida; a $42 million mining project in Virginia; and the Central District Wastewater Treatment Plant electrical project in Florida, valued at more than $40 million.

Consolidated backlog as of September 30, 2023 was $10.6 billion, up 34% compared to $7.9 billion as of December 31, 2022. As of September 30, 2023, the mix of backlog by segment was approximately 43% for Civil, 41% for Building and 16% for Specialty Contractors.

The following table presents the Company’s backlog by business segment, reflecting changes from December 31, 2022 to September 30, 2023:

*(in millions)*

|  | Backlog at December 31, 2022 | New Awards(a) | Revenue Recognized | Backlog at September 30, 2023(b) |
| --- | ---: | ---: | ---: | ---: |
| Civil | $4,416.3 | $1,537.8 | $(1,424.5) | $4,529.6 |
| Building | 2,223.6 | 3,042.9 | (926.4) | 4,340.1 |
| Specialty Contractors | 1,289.2 | 998.9 | (507.9) | 1,780.2 |
| Total | $7,929.1 | $5,579.6 | $(2,858.8) | $10,649.9 |

(a) New awards consist of the original contract price of projects added to backlog plus or minus subsequent changes to the estimated total contract price of existing contracts.

(b) Backlog may differ from the transaction prices allocated to the remaining performance obligations as disclosed in Note 2 of the Notes to Condensed Consolidated Financial Statements. Such differences relate to the timing of executing a formal contract or receiving a notice to proceed. More specifically, backlog may include awards for which a contract has not yet been executed or a notice to proceed has not been issued, but for which there are no remaining major uncertainties that we will proceed with our work on the project (e.g., adequate funding is in place, we have received a notice of intent to award a contract, etc.). Backlog may also include awards where future scopes of work are subject to additional approval by the customer. These types of awards are included in backlog to the extent such approval is considered probable.

The outlook for the Company’s revenue growth over the next several years remains favorable. However, revenue growth could be negatively impacted by project delays or the timing of project bids, awards, commencements, ramp-up activities and completions. We anticipate that we will continue to win our share of significant new awards resulting from long-term capital spending plans by state, local and federal customers, as well as limited competition for some of the largest project opportunities.

In elections over the past decade, voters in 44 states have approved 85% of nearly 3,000 state and local ballot measures, raising an estimated $342 billion in new and renewed revenue funding for transportation investments. The largest of these was in Los Angeles County, where Measure M, a half-cent sales tax increase, was approved in 2016. Funding from this measure supports some of the Company’s current and prospective projects, and overall the measure is expected to generate $120 billion of funding over 40 years. Interest rates have continued to increase over the past year, as anticipated, but are still at levels which we believe remain conducive to continued spending on certain types of projects that have strong end-market demand with adequate available funding, such as mass transit, transportation, bridges, and health care, educational and correctional facilities, among others. However, if borrowing rates continue to increase, they could reach levels that may negatively impact demand, particularly for certain Building segment end markets which tend to be more closely correlated to economic conditions.

The bipartisan Infrastructure Investment and Jobs Act of 2021 (the “Bipartisan Infrastructure Law” or “BIL”) was enacted into law on November 15, 2021, and it provides for $1.2 trillion of federal infrastructure funding, including $550 billion in new spending for improvements to the country’s surface-transportation network and enhancements to core infrastructure. The law marks the largest federal investment in public transit ever, the single largest dedicated bridge investment since the construction of the interstate highway system and the largest federal investment in passenger rail since the creation of Amtrak, all in addition to providing for regular annual spending for numerous infrastructure projects. This significant incremental funding is anticipated to be spent over the next 10 years, and much of it is allocated for investment in end markets that are directly aligned with the Company’s market focus. Accordingly, the Company believes that this significant level of sustained, incremental funding will favorably impact the Company’s current work and prospective opportunities over the next decade, as initial funds have begun flowing to project owners and substantially increased funding from the BIL is expected to occur over the next several years.

For a more detailed discussion of operating performance of each business segment, corporate general and administrative expenses and other items, see *Results of Segment Operations, Corporate, Tax and Other Matters* and *Liquidity and Capital Resources* below.

### Results of Segment Operations

The results of our Civil, Building and Specialty Contractors segments are discussed below.

### Civil Segment

Revenue and income from construction operations for the Civil segment are summarized as follows:

*(in millions)*

|  | Three Months Ended September 30, 2023 | 2022 | Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $520.5 | $500.9 | $1,424.5 | $1,295.3 |
| Income from construction operations | 46.9 | 22.8 | 170.3 | 12.1 |

Revenue for the three and nine months ended September 30, 2023 increased 4% and 10%, respectively, compared to the same periods in 2022. For the first nine months of 2023, the growth was largely due to the favorable impact of changes in estimates that resulted from improved performance on a mass-transit project in California, as well as the absence of certain prior-year unfavorable adjustments, as further discussed in the paragraph below. Revenue for both periods was also adversely impacted by the follow-on impacts of COVID-19, which delayed bidding activities and awards of certain new projects during 2020 and much of 2021 and negatively impacted revenue for the nine-month periods of both 2022 and 2023. Furthermore, revenue for both periods was adversely impacted by certain projects totaling more than $10.0 billion for which the Company was the low or preferred bidder but no contract was awarded over the last few years due to COVID-19-induced customer budget constraints, as well as the Company’s lack of success in its pursuit of certain large prospective Civil segment projects in the second half of 2021.

Income from construction operations for the three and nine months ended September 30, 2023 was $46.9 million and $170.3 million, respectively, compared to $22.8 million and $12.1 million for the same periods in 2022. For the third quarter of 2023, the increase was primarily due to the absence of a prior-year unfavorable adjustment of $14.3 million on a completed highway project in the Northeast due to the reversal on appeal of a previously favorable lower-court ruling and a $10.1 million prior-year unfavorable adjustment related to a completed mass-transit project in New York. The increase was also due to an improved project mix, including contributions from higher volume on a mass-transit project in California. During the third quarter of 2023, the Company reached a settlement that impacted multiple components of another mass-transit project in California, which included the resolution of certain ongoing disputes and increased the expected profit from work to be performed in the future. The settlement resulted in an unfavorable non-cash adjustment of $23.2 million to one component of the project that is nearing completion, partially offset by a favorable adjustment of $8.8 million on the other component of the project that has substantial scope of work remaining. As a result of the settlement, the net unfavorable impact to the period from these two adjustments is expected to be mitigated by the increased profit generated from future work on the project.

For the first nine months of 2023, the change was favorably impacted by the same factors discussed above for the third quarter, as well as by net favorable adjustments totaling $25.6 million on a mass-transit project in California associated with changes in estimates due to improved performance, partially offset by the Civil segment’s $13.8 million portion of unfavorable adjustments on a transportation project in the Northeast primarily due to the settlement of certain change orders, changes in estimates due to recent negotiations and incremental cost incurred during project close out. The change was also favorably impacted by the absence of prior-year unfavorable adjustments, including a temporary unfavorable impact of $34.6 million from the successful negotiation of significant lower margin (and lower risk) change orders on the mass-transit project in California mentioned above; a $25.5 million non-cash charge from an adverse legal ruling on a dispute related to a bridge project in New York; a $16.2 million unfavorable non-cash impact related to the settlement of a long-disputed, completed project in Maryland; and $13.1 million of unfavorable adjustments related to a mass-transit project in California.

Operating margin was 9.0% and 12.0% for the three and nine months ended September 30, 2023, respectively, compared to 4.5% and 0.9% for the same periods in 2022. The increases in operating margin were principally due to the above-mentioned factors that drove the changes in revenue and income from construction operations.

New awards in the Civil segment totaled $469.0 million and $1.5 billion for the three and nine months ended September 30, 2023, respectively, compared to $225.1 million and $1.4 billion for the same periods in 2022. The most significant new awards and contract adjustments in the third quarter of 2023 included $95 million and $81 million of additional funding for two different mass-transit projects in California and a $42 million mining project in Virginia. COVID-19 has caused significant revenue shortfalls for certain state and local government agencies since 2020, which has resulted in delays in the bidding and awarding of certain large new projects. In addition, the timing and magnitude of federal, state and local funding, including anticipated contributions from the BIL, is uncertain, which could lead to similar delays.

Backlog for the Civil segment was $4.5 billion as of September 30, 2023 compared to $4.7 billion as of September 30, 2022. The segment continues to experience strong demand reflected in a large, multi-year pipeline of prospective projects, supported by substantial anticipated funding from various voter-approved transportation measures and the BIL, and by public agencies’ long-term spending plans. The Civil segment is well-positioned to capture its share of these prospective projects, but the timing of new awards remains uncertain.

### Building Segment

Revenue and income (loss) from construction operations for the Building segment are summarized as follows:

*(in millions)*

|  | Three Months Ended September 30, 2023 | 2022 | Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $365.4 | $318.0 | $926.4 | $915.6 |
| Income (loss) from construction operations | 0.1 | 0.1 | (83.9) | 9.5 |

Revenue for the three months ended September 30, 2023 increased 15% compared to the same period in 2022 primarily due to increased project execution activities on various projects in California with substantial scope of work remaining. Revenue for the nine months ended September 30, 2023 grew slightly compared to the same period in 2022, with the growth driven by increased project execution activities on various projects in California with substantial scope of work remaining, mostly offset by the impact of the aforementioned unfavorable adjustment related to the adverse legal ruling on a completed mixed-use project in New York, the Building’s segment’s portion of unfavorable adjustments on the aforementioned transportation project in the Northeast due to the settlement of certain change orders during project close out, and reduced project execution activities on a completed hospitality and gaming project in Arkansas. As discussed above in *Executive Overview*, revenue for both periods was adversely impacted by the follow-on impacts of COVID-19, which delayed certain project bids and awards in 2020 and 2021.

Income from construction operations for the three months ended September 30, 2023 was $0.1 million and loss from construction operations for the nine months ended September 30, 2023 was $83.9 million, compared to income from construction operations of $0.1 million and $9.5 million for the same periods in 2022. For the third quarter of 2023, income from construction operations was favorably impacted by the absence of a $10.1 million prior-year unfavorable adjustment on a hospitality project in Florida, mostly offset by the Building segment’s current-year $7.0 million portion of unfavorable adjustments on the aforementioned transportation project in the Northeast primarily due to the settlement of certain change orders, changes in estimates due to recent negotiations and incremental cost incurred during project close out. For the first nine months of 2023, the loss was primarily due to the aforementioned first-quarter unfavorable adjustment related to the adverse legal ruling on a completed mixed-use project in New York that resulted in a non-cash, pre-tax charge of $83.6 million, of which $72.2 million impacted the Building segment and $11.4 million impacted the Specialty Contractors segment, as well as the Building segment’s $13.8 million portion of unfavorable adjustments on the aforementioned transportation project in the Northeast. The impact of the current-year unfavorable adjustments was partially offset by the absence of a $10.3 million prior-year unfavorable adjustment on a hospitality project in Florida.

Operating margin was 0.0% and (9.1)% for the three and nine months ended September 30, 2023, respectively, compared to 0.0% and 1.0% for the same periods in 2022. The changes in operating margin were principally due to the aforementioned factors that drove the changes in revenue and income (loss) from construction operations.

New awards in the Building segment totaled $249.0 million and $3.0 billion for the three and nine months ended September 30, 2023, respectively, compared to $415.9 million and $947.8 million for the same periods in 2022. The most significant new awards in the third quarter of 2023 included $115 million of additional funding for a health care project in California and the $47 million New Everglades National Park Visitor Center project in Florida. The lingering effects of COVID-19, including the proliferation of remote and hybrid work for many businesses, as well as slowing economic conditions caused by inflation and rising interest rates, could continue to result in certain delayed or even canceled Building segment project opportunities, particularly in the corporate office end market. However, other Building segment end markets, such as correctional facilities, health care, education, industrial/manufacturing, and hospitality and gaming, continue to show strong demand for new and renovated facilities.

Backlog for the Building segment was $4.3 billion as of September 30, 2023, up 85% compared to $2.3 billion as of September 30, 2022. The strong increase was largely due to the $2.95 billion Brooklyn Jail progressive design-build project that was booked into backlog in the second quarter of 2023. The Building segment continues to experience strong customer demand as reflected by a large volume of prospective projects across various end markets and geographic locations.

### Specialty Contractors Segment

Revenue and loss from construction operations for the Specialty Contractors segment are summarized as follows:

*(in millions)*

|  | Three Months Ended September 30, 2023 | 2022 | Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $174.8 | $252.0 | $507.9 | $673.2 |
| Loss from construction operations | (38.4) | (11.8) | (120.7) | (82.5) |

Revenue for the three and nine months ended September 30, 2023 decreased 31% and 25%, respectively, compared to the same periods in 2022. For both periods of 2023, the decrease was principally due to reduced project execution activities on the electrical and mechanical components of a transportation project in the Northeast that is nearing completion, as well as the aforementioned unfavorable non-cash adjustments due to changes in estimates on the electrical and mechanical scope of this same project associated with changes in the expected recovery on certain unapproved change orders. For the nine-month period of 2023, the decrease was also due to the adverse legal ruling on an educational facilities project in New York. The overall revenue decline was partially offset by the absence of a prior-year unfavorable adjustment on the same transportation project in the Northeast. As discussed above in *Executive Overview*, operating results continue to be adversely impacted by the follow-on impacts of COVID-19, which delayed certain project bids and awards in 2020 and 2021, including projects that would have had considerable components of electrical and mechanical scope in the 2022 and 2023 periods had the projects been awarded and the Company won its share of such projects.

Loss from construction operations for the three and nine months ended September 30, 2023 was $38.4 million and $120.7 million, respectively, compared to $11.8 million and $82.5 million for the same periods in 2022. The change for the third quarter of 2023 was principally due to the current-quarter impact of $16.9 million of unfavorable non-cash adjustments due to changes in estimates on the electrical and mechanical scope of the above-mentioned transportation project associated with changes in the expected recovery on certain unapproved change orders resulting from ongoing negotiations and a $9.4 million unfavorable adjustment due to ongoing negotiations and an anticipated settlement on a completed mass-transit project in California. For the nine-month period of 2023, the change was largely due to the current-year impacts of $57.0 million of unfavorable non-cash adjustments due to changes in estimates on the electrical and mechanical scope of the above-mentioned transportation project associated with changes in the expected recovery on certain unapproved change orders resulting from ongoing negotiations, a non-cash charge of $25.1 million in the second quarter of 2023 on the educational facilities project in New York that resulted from an adverse court ruling, and the above-mentioned $9.4 million unfavorable adjustment due to ongoing negotiations and an anticipated settlement on a completed mass-transit project in California. The current-year unfavorable adjustments were largely offset by the absence of prior-year unfavorable adjustments, including a $36.0 million unfavorable adjustment on the same transportation project related to the unforeseen cost of project close-out issues, remediation work, extended project supervision and associated labor inefficiencies, as well as a non-cash charge of $17.8 million that increased cost of operations associated with an unexpected partial reversal by an appellate court of previously awarded legal damages related to a completed electrical project in New York.

Operating margin was (22.0)% and (23.8)% for the three and nine months ended September 30, 2023, respectively, compared to (4.7)% and (12.2)% for the same periods in 2022. The changes in operating margin were principally due to the aforementioned factors that drove the changes in revenue and loss from construction operations.

New awards in the Specialty Contractors segment totaled $128.5 million and $1.0 billion for the three and nine months ended September 30, 2023, respectively, compared to $244.1 million and $658.4 million for the same periods in 2022. The most significant new award in the third quarter of 2023 was the Central District Wastewater Treatment Plant electrical project in Florida, valued at more than $40 million. COVID-19 has resulted in, and could continue to result in, reduced demand from certain customers, particularly in New York, that continue to experience funding constraints.

Backlog for the Specialty Contractors segment was $1.8 billion as of September 30, 2023 compared to $1.4 billion as of September 30, 2022. The Specialty Contractors segment continues to be increasingly focused on servicing the Company’s current and prospective large Civil and Building segment projects, particularly in the Northeast and California. In addition, the segment remains well-positioned to capture its share of new projects, leveraging the size and scale of our business units that operate in New York, Texas, Florida and California and the strong reputation held by these business units for high-quality work on large, complex projects.

### Corporate, Tax and Other Matters

### Corporate General and Administrative Expenses

Corporate general and administrative expenses were $21.1 million and $56.1 million during the three and nine months ended September 30, 2023, respectively, compared to $16.6 million and $45.1 million for the same periods in 2022. The increase in the three and nine months ended September 30, 2023 was primarily due to higher compensation-related expenses compared to the same periods in 2022.

### Other Income, Net, Interest Expense and Income Tax (Expense) Benefit

*(in millions)*

|  | Three Months Ended September 30, 2023 | 2022 | Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Other income, net | $3.0 | $0.4 | $12.4 | $5.1 |
| Interest expense | (20.3) | (17.0) | (63.8) | (49.7) |
| Income tax (expense) benefit | 4.1 | (0.6) | 52.0 | 47.0 |

Other income, net for the nine months ended September 30, 2023 increased by $7.3 million compared to the same period in 2022, primarily due to a gain on sale of property in the 2023 period.

Interest expense for the three and nine months ended September 30, 2023 increased by $3.3 million and $14.1 million, respectively, compared to the same periods in 2022. The increases in the 2023 periods were substantially due to higher interest rates on the Term Loan B and the Revolver, as discussed below in *Liquidity and Capital Resources.*

The Company recognized an income tax benefit of $4.1 million and $52.0 million for the three and nine months ended September 30, 2023, respectively. The effective income tax rate was 13.7% and 36.2% for the three and nine months ended September 30, 2023, respectively. The effective income tax rate for the three months ended September 30, 2023 was lower than the 21% federal statutory rate primarily due to the impact of a cumulative catch-up adjustment associated with the change in the Company’s projected 2023 effective tax rate that resulted from the revision of the Company’s forecast. The effective income tax rates for both periods were impacted by relatively large tax benefits generated against a forecasted pre-tax loss for the year, which magnified the impact these tax benefits had on the effective income tax rate. In periods with pre-tax losses, tax benefits generated during the period increase the effective income tax rate (and, thus, the income tax benefit to the Company) rather than decreasing the effective rate, as in periods with pre-tax income. The tax benefits that caused a higher effective tax rate were primarily state income taxes (net of the federal tax benefit), earnings attributable to noncontrolling interests (for which income taxes are not the responsibility of the Company) and a reduction in reserves for unrecognized tax benefits, partially offset by non-deductible expenses.

For the three and nine months ended September 30, 2022, the Company recognized income tax expense of $0.6 million and an income tax benefit of $47.0 million, respectively, resulting in an effective income tax rate of (2.4)% and 31.0%, respectively. The Company recognized income tax expense based on a pre-tax loss for the three months ended September 30, 2022, primarily as a result of a change during the quarter to forecasted pre-tax earnings for 2022, the cumulative impact of which offset the tax benefits generated during the quarter. The effective income tax rates for both periods reflected pre-tax losses incurred in the periods and projected for the full year. The tax benefits that increased the income tax rates in both periods were primarily state income taxes (net of the federal tax benefit) and the earnings attributable to noncontrolling interests (for which income taxes are not the responsibility of the Company).

### Liquidity and Capital Resources

Liquidity is provided by available cash and cash equivalents, cash generated from operations, credit facilities and access to capital markets. We have a committed line of credit totaling $175.0 million, which may be used for revolving loans, letters of credit and/or general purposes. We believe that cash generated from operations, along with our unused credit capacity of $175.0 million and available cash balances as of September 30, 2023, will be sufficient to fund working capital needs and debt maturities for the next 12 months and beyond excluding the impact of a spring-forward maturity on the Term Loan B and the Revolver (if that were to occur), as discussed further in *Debt* below. Despite our record operating cash flow in 2022 and strong operating cash flow for the nine months ended September 30, 2023 (as discussed below in *Cash and Working Capital*), liquidity has been and could continue to be negatively affected by the follow-on impacts of COVID-19, which induced customer budgetary constraints and delayed bidding activities and awards of certain large civil projects. We are also still pursuing COVID-19-related cost recoveries from certain customers. Our liquidity was also adversely impacted by the Company’s lack of success in its pursuit of certain large prospective Civil segment projects in the second half of 2021, as well as by instances where the Company was not awarded certain Civil segment projects totaling more than $10.0 billion over the last few years due to COVID-19-induced customer budget constraints, despite being the low or preferred bidder. In addition, as discussed above in

*Executive Overview - COVID-19 Update*, the COVID-19 pandemic delayed court and arbitration schedules and also hindered the Company’s ability to resolve certain unapproved work. We believe that future funding from the BIL and increased revenue to government customers as travel and commuting levels have improved, as discussed above, could offset or mitigate these and other possible lingering future negative impacts from COVID-19, though it remains difficult to predict any of these factors. Furthermore, the backlog of accumulated court and arbitration proceedings that grew as a result of the pandemic during 2020 and 2021 has receded, with certain disputes having been resolved in 2022 and 2023 and other settlement conferences and trial dates now scheduled or being scheduled. We experienced a record operating cash flow in 2022 and strong operating cash flow for the first nine months of 2023, and we expect strong operating cash flows to continue for the remainder of 2023 and into 2024, based on projected cash collections, both from project execution activities and the resolution of additional outstanding claims and unapproved change orders.

### Cash and Working Capital

Cash and cash equivalents were $290.0 million as of September 30, 2023 compared to $259.4 million as of December 31, 2022. Cash immediately available for general corporate purposes was $100.6 million and $47.7 million as of September 30, 2023 and December 31, 2022, respectively, with the remainder being amounts held by our consolidated joint ventures and also our proportionate share of cash held by our unconsolidated joint ventures. Cash held by our joint ventures is available only for joint venture-related uses, including distributions to joint venture partners. In addition, our restricted cash and restricted investments totaled $140.3 million as of September 30, 2023 compared to $106.0 million as of December 31, 2022. Restricted cash and restricted investments at September 30, 2023 were primarily held to secure insurance-related contingent obligations and deposits.

During the nine months ended September 30, 2023, net cash provided by operating activities was $180.8 million, the second-largest result for the first nine months of any year since the merger between Tutor-Saliba Corporation and Perini Corporation in 2008 (the “2008 Merger”). In addition, net cash provided by operating activities was $103.2 million for the third quarter of 2023, an increase of $30.6 million compared to $72.6 million in the third quarter of 2022, and also the second-largest result for any third quarter since the 2008 Merger. The net cash provided by operating activities for the nine-month period of 2023 was primarily due to a decrease in investments in project working capital, partially offset by cash utilized by earnings sources. The decrease in investments in project working capital was primarily due to a decrease in costs and estimated earnings in excess of billings (“CIE”), an increase in accounts payable due to the timing of payments to suppliers and subcontractors and an increase in billings in excess of costs and estimated earnings (“BIE”). During the nine months ended September 30, 2022, net cash provided by operating activities was $251.3 million, which was the largest result for the first nine months of any year since the 2008 Merger. The increase for the nine months of 2022 was primarily due to a decrease in investments in project working capital partially offset by cash utilized by earnings sources. The decrease in investments in project working capital was primarily due to improved collection activity, as reflected by an increase in BIE and a decrease in accounts receivable.

Cash flow from operating activities decreased $70.5 million when comparing the first nine months of 2023 with the same period in 2022. The decrease in cash flow from operating activities for the first nine months of 2023 compared to the first nine months of 2022 primarily resulted from a smaller current-year decrease in investment in working capital as compared to the same period last year. The smaller decrease in investment in working capital in the 2023 period was primarily due to a smaller current-year decrease in accounts receivable compared to the prior-year period and a smaller current-year increase in BIE compared to the same period last year, partially offset by a current-year decrease in CIE compared to an increase last year. Both periods were positively impacted by collections associated with previously disputed matters.

Net cash used in investing activities during the first nine months of 2023 was $43.4 million, primarily due to the acquisition of property and equipment for projects (i.e., capital expenditures) totaling $45.6 million, as well as net cash used in investment transactions of $6.9 million, partially offset by proceeds from the sale of property and equipment of $9.0 million. Net cash used in investing activities during the first nine months of 2022 was $38.9 million primarily due to the acquisition of property and equipment for projects totaling $42.8 million, partially offset by proceeds from the sale of property and equipment of $6.7 million.

Net cash used in financing activities was $79.3 million for the first nine months of 2023, which was primarily driven by a $56.0 million net repayment of debt and $22.0 million of net distributions to noncontrolling interests. Net cash used in financing activities was $78.8 million for the first nine months of 2022, which was primarily driven by a $34.8 million net repayment of debt and $42.5 million of net distributions to noncontrolling interests.

At September 30, 2023, we had working capital of $1.5 billion, a ratio of current assets to current liabilities of 1.75 and a ratio of debt to equity of 0.68, compared to working capital of $1.7 billion, a ratio of current assets to current liabilities of 1.87 and a ratio of debt to equity of 0.66 at December 31, 2022.

### Debt

#### 2020 Credit Agreement

On August 18, 2020, the Company entered into a credit agreement (the “2020 Credit Agreement”) with BMO Harris Bank N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and other lenders. The 2020 Credit Agreement provides for a $425.0 million term loan B facility (the “Term Loan B”) and a $175.0 million revolving credit facility (the “Revolver”), with sub-limits for the issuance of letters of credit and swing line loans up to the aggregate amounts of $75.0 million and $10.0 million, respectively.

Under the terms of the 2020 Credit Agreement, the Term Loan B will mature on August 18, 2027 and the Revolver will mature on August 18, 2025, in each case, unless any of the 2017 Senior Notes are outstanding on January 30, 2025 (which is 91 days prior to the maturity of the 2017 Senior Notes), in which case, both the Term Loan B and the Revolver will mature on January 30, 2025 subject to certain further exceptions (the “spring-forward maturity”). The Company has been exploring its options to address the spring-forward maturity of the Term Loan B and Revolver, including redeeming the 2017 Senior Notes using a combination of available liquidity and new financing. The Company continues to assess its various alternatives to determine the most favorable, available financing strategy, taking into account anticipated cash available for deleveraging, as well as market conditions. Continued strong operating cash flow in the first part of the fourth quarter of 2023 has allowed the Company to begin accumulating cash that is being earmarked for refinancing, with more than $70 million set aside as of the date of this filing for this purpose. This amount is incremental to any required annual excess cash flow prepayment in respect of the Term Loan B.

As of September 30, 2023, the Revolver had unused available borrowing capacity of $175.0 million, and the outstanding balance of the Term Loan B and the 2017 Senior Notes were $368.2 million and $500.0 million, respectively.

The 2020 Credit Agreement requires the Company to make prepayments on the Term Loan B in connection with certain asset sales, receipts of insurance proceeds, incurrences of certain indebtedness and annual excess cash flow (in each case, subject to certain customary exceptions). The Company made a $44.0 million prepayment of principal on the Term Loan B in April 2023. The prepayment resulted from our record operating cash flow in 2022, which produced “excess” cash flow under the terms of the 2020 Credit Agreement, as discussed above.

Borrowings under the 2020 Credit Agreement bear interest at variable rates, which have increased since the latter part of 2022 due to changes in market conditions that resulted in increases in SOFR (and LIBOR prior to the transition to SOFR), in the case of the Term Loan B, and the administrative agent’s prime lending rate, in the case of the Revolver. Effective May 2, 2023, the 2020 Credit Agreement was amended to transition the Company’s original LIBOR option in respect of the Term Loan B to Adjusted Term SOFR. The average borrowing rates on the Term Loan B and the Revolver for the nine months ended September 30, 2023 were approximately 9.9% and 11.8%, respectively. At September 30, 2023, the borrowing rates on the Term Loan B and the Revolver were 10.2% and 12.3%, respectively. For more information regarding the terms of our 2020 Credit Agreement, refer to Note 8 of the Notes to Condensed Consolidated Financial Statements.

The table below presents our actual and required first lien net leverage ratio under the 2020 Credit Agreement for the period, which is calculated on a rolling four-quarter basis:

|  | Trailing Four Fiscal Quarters Ended |  |
| --- | --- | --- |
|  | **September 30, 2023** |  |
|  | **Actual** | **Required** |
| First lien net leverage ratio | 2.01 to 1.00 | ≤ 2.50 : 1.00 |

On October 31, 2022, the 2020 Credit Agreement was amended to increase the maximum First Lien Net Leverage Ratio covenant level for certain fiscal quarters. On March 10, 2023, the 2020 Credit Agreement was further amended to set the maximum First Lien Net Leverage Ratio covenant level to 3.50:1.00, effective the fiscal quarter ended December 31, 2022, and increasing to 3.75:1.00 for the fiscal quarter ending March 31, 2023 and subsequently stepping down to 3.00:1.00 for the fiscal quarter ending June 30, 2023, 2.50:1.00 for the fiscal quarter ending September 30, 2023 and 2.25:1.00 for the fiscal quarter ending December 31, 2023 and each fiscal quarter thereafter. As of September 30, 2023, we were in compliance and expect to continue to be in compliance with the covenants under the 2020 Credit Agreement.

### Contractual Obligations

There have been no material changes in our contractual obligations from those described in our Annual Report on Form 10‑K for the year ended December 31, 2022.

### Critical Accounting Policies and Estimates

Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10‑K for the year ended December 31, 2022. Our critical accounting estimates are also identified and discussed in Part II, Item 7 of our Annual Report on Form 10‑K for the year ended December 31, 2022.

### Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued by the Financial Accounting Standards Board during the three and nine months ended September 30, 2023 and through the date of filing of this report that had or are expected to have a material impact on the Company’s financial position, results of operations or cash flows.

## Market risk

As filed, 176 characters.

There has been no material change in our exposure to market risk from that described in Part II, Item 7A of our Annual Report on Form 10‑K for the year ended December 31, 2022.

## Controls and procedures

As filed, 1,542 characters.

### Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined by Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10‑Q was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (a) were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

### Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 3,940 characters.

There have been no material changes to our risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, other than as set forth below.

***As a result of the “spring-forward” maturity provision in our Revolver and Term Loan B facility, we will need to repay, refinance, or obtain amendments or waivers with respect to some or all of our substantial outstanding indebtedness before January 30, 2025. If we are unsuccessful, the maturity of our Revolver and Term Loan B facility will accelerate, and a failure to repay then-outstanding amounts would cause us to be in default, which would materially and adversely affect our business and our financial condition.***

As previously disclosed, under the terms of our 2020 Credit Agreement, if any of the 2017 Senior Notes are outstanding on January 30, 2025 (which is 91 days prior to the maturity of the 2017 Senior Notes), the maturity of both the Term Loan B and the Revolver will accelerate to January 30, 2025, subject to certain further exceptions. We refer to this as the “spring-forward maturity” provision of our 2020 Credit Agreement. Absent the applicability of the spring-forward maturity provision, the maturity date of the Term Loan B is August 18, 2027 and of the Revolver is August 18, 2025.

As a result of the spring-forward maturity provision, after January 30, 2024, all outstanding indebtedness under our 2020 Credit Agreement will be reclassified as current indebtedness and we will need to repay, refinance, or obtain amendments or waivers with respect to some or all of our substantial outstanding indebtedness before January 30, 2025.

While our cash collections have improved significantly since 2021 and are expected to remain strong, we do not currently have available cash and borrowings sufficient to repay the 2017 Senior Notes. We are actively exploring a range of potential financing and refinancing transactions to address our near-term liquidity requirements, including potential debt refinancings and amendments, waivers or consents under our 2020 Credit Agreement, among other potential alternatives. There can be no assurance as to which, if any, of these alternatives we may be able to pursue. The choices available to us will depend upon numerous factors, such as market conditions, our credit rating, our liquidity, our debt profile, our financial performance and the limitations applicable to such transactions under our existing financing agreements and any consents we may need to obtain under the relevant documents. In light of our debt profile, as well as high interest rates and continued volatility in the financial markets, various financing options may not be available to us on commercially reasonable terms, terms that are acceptable to us, or at all, and we may not be able to obtain amendments, waivers, or consents on reasonable terms or at all. Moreover, any future indebtedness or amendments to our existing indebtedness may impose additional restrictions and covenants on us that could limit our ability to respond to market conditions, to make capital investments or to take advantage of business opportunities. Refinancing debt at a higher cost would negatively impact our liquidity and financial condition.

If we are unable to pay down and/or refinance the 2017 Senior Notes prior to January 30, 2025, on favorable terms or at all, or to otherwise address the acceleration of outstanding indebtedness under our 2020 Credit Agreement under the spring-forward maturity provision, our liquidity, business, operations and financial condition will be materially and adversely affected. In this event, we may not have sufficient funds available for timely repayment of our indebtedness, and we may not have the ability to borrow or obtain sufficient funds to replace the indebtedness on terms acceptable to us, or at all, in which case an event of default would occur under our 2020 Credit Agreement.

Filed Nov 9, 2023.
Source: SEC EDGAR, the filing index for accession 0000077543-23-000177. Last ingested by Listed: Nov 9, 2026, 22:55 ET. No prices; not investment advice.