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What changed in TUTOR PERINI CORP's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of TUTOR PERINI CORP's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+264 added−239 removedSource: 10-K (2024-02-28) vs 10-K (2023-03-15)

Top changes in TUTOR PERINI CORP's 2023 10-K

264 paragraphs added · 239 removed · 182 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

35 edited+1 added−4 removed65 unchanged
Biggest changeOur backlog by segment, end market, customer type and contract type is presented in the following tables: As of December 31, (in thousands) 2022 2021 Backlog by business segment: Civil $ 4,416,340 56 % $ 4,553,539 55 % Building 2,223,601 28 % 2,308,930 28 % Specialty Contractors 1,289,172 16 % 1,373,167 17 % Total backlog $ 7,929,113 100 % $ 8,235,636 100 % As of December 31, (in thousands) 2022 2021 Civil segment backlog by end market: Mass transit (includes certain transportation and tunneling projects) $ 2,891,711 65 % $ 3,256,556 71 % Military defense facilities 778,318 18 % 627,407 14 % Bridges 298,203 7 % 448,416 10 % Power and energy 233,768 5 % 2,016 * Commercial and industrial facilities 149,316 3 % 85,825 2 % Other 65,024 2 % 133,319 3 % Total Civil segment backlog $ 4,416,340 100 % $ 4,553,539 100 % _____________________________________________________________________________________________________________ * Less than 1%. 6 Table of Contents As of December 31, (in thousands) 2022 2021 Building segment backlog by end market: Municipal and government $ 755,095 34 % $ 824,173 36 % Health care facilities 565,899 25 % 575,006 25 % Education facilities 389,978 18 % 140,822 6 % Mass transit (includes transportation projects) 299,837 13 % 476,454 21 % Commercial and industrial facilities 66,745 3 % 164,878 7 % Hospitality and gaming 43,130 2 % 94,732 4 % Other 102,917 5 % 32,865 1 % Total Building segment backlog $ 2,223,601 100 % $ 2,308,930 100 % As of December 31, (in thousands) 2022 2021 Specialty Contractors segment backlog by end market: Mass transit (includes certain transportation and tunneling projects) $ 631,999 49 % $ 730,480 53 % Municipal and government 154,868 12 % 158,614 12 % Multi-unit residential 142,516 11 % 137,824 10 % Water 122,169 9 % 164,653 12 % Commercial and industrial facilities 121,305 9 % 96,686 7 % Health care facilities 62,133 5 % 19,750 1 % Other 54,182 5 % 65,160 5 % Total Specialty Contractors segment backlog $ 1,289,172 100 % $ 1,373,167 100 % As of December 31, 2022 2021 Backlog by customer type: State and local agencies 65 % 71 % Private owners 20 % 16 % Federal agencies 15 % 13 % Total backlog 100 % 100 % As of December 31, 2022 2021 Backlog by contract type: Fixed price 74 % 77 % Guaranteed maximum price 14 % 12 % Unit price 4 % 4 % Cost plus fee and other 8 % 7 % Total backlog 100 % 100 % Fixed price contracts, particularly with federal, state and local government customers, are expected to continue to represent a sizeable percentage of total backlog.
Biggest changeOur backlog by segment, end market, customer type and contract type is presented in the following tables: As of December 31, (in thousands) 2023 2022 Backlog by business segment: Civil $ 4,240,684 42 % $ 4,416,340 56 % Building 4,177,452 41 % 2,223,601 28 % Specialty Contractors 1,740,311 17 % 1,289,172 16 % Total backlog $ 10,158,447 100 % $ 7,929,113 100 % As of December 31, (in thousands) 2023 2022 Civil segment backlog by end market: Mass transit (includes certain transportation and tunneling projects) $ 2,744,006 64 % $ 2,891,711 65 % Military facilities 793,477 19 % 778,318 18 % Bridges 282,467 7 % 298,203 7 % Power and energy 199,639 5 % 233,768 5 % Commercial and industrial sites 182,703 4 % 149,316 3 % Other 38,392 1 % 65,024 2 % Total Civil segment backlog $ 4,240,684 100 % $ 4,416,340 100 % 6 Table of Contents As of December 31, (in thousands) 2023 2022 Building segment backlog by end market: Government $ 2,819,078 67 % $ 755,095 34 % Health care facilities 785,657 19 % 565,899 25 % Education facilities 344,962 8 % 389,978 18 % Mass transit (includes transportation projects) 153,665 4 % 299,837 13 % Other 74,090 2 % 212,792 10 % Total Building segment backlog $ 4,177,452 100 % $ 2,223,601 100 % As of December 31, (in thousands) 2023 2022 Specialty Contractors segment backlog by end market: Government $ 783,653 45 % $ 154,868 12 % Mass transit (includes certain transportation and tunneling projects) 626,826 36 % 631,999 49 % Multi-unit residential 90,843 5 % 142,516 11 % Commercial and industrial facilities 78,682 5 % 121,305 9 % Water 64,329 4 % 122,169 9 % Health care facilities 60,272 3 % 62,133 5 % Other 35,706 2 % 54,182 5 % Total Specialty Contractors segment backlog $ 1,740,311 100 % $ 1,289,172 100 % As of December 31, 2023 2022 Backlog by customer type: State and local agencies 76 % 65 % Private owners 13 % 20 % Federal agencies 11 % 15 % Total backlog 100 % 100 % As of December 31, 2023 2022 Backlog by contract type: Fixed price 56 % 74 % Guaranteed maximum price 36 % 14 % Unit price 4 % 4 % Cost plus fee and other 4 % 8 % Total backlog 100 % 100 % Fixed price contracts, particularly with federal, state and local government customers, are expected to continue to represent a sizeable percentage of total backlog.
We have been active in civil construction since 1894 and believe we have a particular expertise in large, complex civil construction projects. We have completed, or are currently working on, some of the most significant civil construction projects in the United States.
We have been active in civil construction since 1894 and believe we have a particular expertise in large, complex civil construction projects. We are currently working on or have completed some of the most significant civil construction projects in the United States.
We have completed, or are currently working on, various large private and public building projects across a wide array of end markets.
We are currently working on or have completed various large private and public building projects across a wide array of end markets.
The Specialty Contractors segment has also supported, or is currently supporting, several large projects in our Civil and Building segments, including the SR 99 project in Seattle; the San Francisco Central Subway extension to Chinatown; the Purple Line Segments 2 and 3 expansion projects in Los Angeles; Newark Airport Terminal A; the California High Speed Rail project in central California; McCarran International Airport Terminal 3 in Las Vegas; and several marquee hospitality and gaming projects in Las Vegas, including CityCenter, the Cosmopolitan Resort and Casino, and the Wynn Encore Hotel.
The Specialty Contractors segment is also currently supporting or has supported several large projects in our Civil and Building segments, including the Purple Line Segments 2 and 3 subway expansion projects in Los Angeles; Newark Airport Terminal A; the California High Speed Rail project in central California; the SR 99 project in Seattle; the San Francisco Central Subway extension to Chinatown; McCarran International Airport Terminal 3 in Las Vegas; and several marquee hospitality and gaming projects in Las Vegas, including the CityCenter complex, the Cosmopolitan Resort and Casino, and the Wynn Encore Hotel.
In our Building segment, we compete with a variety of national and regional contractors, including (alphabetically) AECOM (through its acquisitions of Tishman Construction and Hunt Construction Group); Balfour Beatty Construction; Clark Construction Group; DPR Construction; Gilbane, Inc.; Hensel Phelps Construction Co.; Lendlease Corporation; McCarthy Building Companies, Inc.; M. A.
In our Building segment, we compete with a variety of national and regional contractors, including (alphabetically) AECOM (through its past acquisitions of Tishman Construction and Hunt Construction Group); Balfour Beatty Construction; Clark Construction Group; DPR Construction; Gilbane, Inc.; Hensel Phelps Construction Co.; Lendlease Corporation; McCarthy Building Companies, Inc.; M. A.
Civil Segment Our Civil segment specializes in public works construction and the replacement and reconstruction of infrastructure across several major geographic regions of the United States. Our civil contracting services include construction and rehabilitation of highways, bridges, tunnels, mass-transit systems, military defense facilities, and water management and wastewater treatment facilities.
Civil Segment Our Civil segment specializes in public works construction and the replacement and reconstruction of infrastructure across several major geographic regions of the United States. Our civil contracting services include construction and rehabilitation of highways, bridges, tunnels, mass-transit systems, military facilities, and water management and wastewater treatment facilities.
Building Segment Our Building segment has significant experience providing services to several specialized building markets for private and public works customers, including hospitality and gaming, transportation, health care, commercial offices, government facilities, sports and entertainment, education, correctional facilities, biotech, pharmaceutical, industrial and technology.
Building Segment Our Building segment has significant experience providing services to several specialized building markets for private and public works customers, including hospitality and gaming, transportation, health care, commercial offices, government facilities, sports and entertainment, education, correctional and detention facilities, biotech, pharmaceutical, industrial and technology.
As a result of our reputation and track record, we were previously awarded and completed contracts for several marquee hospitality and gaming projects in Las Vegas, including CityCenter, the Cosmopolitan Resort and Casino and the Wynn Encore Hotel.
As a result of our reputation and track record, we were previously awarded and completed contracts for several marquee hospitality and gaming projects in Las Vegas, including the CityCenter complex, the Cosmopolitan Resort and Casino and the Wynn Encore Hotel.
We believe that our reputation for completing projects on time is a significant competitive advantage in this market, as any delay in project completion could result in significant loss of revenue for the customer. The Building segment is comprised of several operating units that provide general contracting, design-build, preconstruction and construction services in various regions of the United States.
We believe that our reputation for completing projects on time is a significant competitive advantage in this market, as any delay in project completion could result in significant loss of revenue for the customer. The Building segment is composed of several operating units that provide general contracting, design-build, preconstruction and construction services in various regions of the United States.
Racial and ethnic minorities represented about half of our U.S. construction workforce as of December 31, 2022, which is generally in line with BLS data. Union Workforce. We are signatory to numerous local and regional collective bargaining agreements, both directly and through trade associations, as a union contractor.
Racial and ethnic minorities represented about half of our U.S. construction workforce as of December 31, 2023, which is generally in line with BLS data. Union Workforce. We are signatory to numerous local and regional collective bargaining agreements, both directly and through trade associations, as a union contractor.
Kennedy International Airport in New York, Los Angeles International Airport and Fort Lauderdale-Hollywood International Airport, among others. We believe the Civil segment provides us with significant opportunities for growth due to the condition of existing infrastructure coupled with large government funding sources dedicated to the replacement and reconstruction of aging U.S. infrastructure.
Kennedy International Airport in New York, Los Angeles International Airport and Fort Lauderdale-Hollywood International Airport. We believe the Civil segment provides us with significant opportunities for growth due to the condition of existing infrastructure coupled with large government funding sources dedicated to the replacement and reconstruction of aging U.S. infrastructure.
Our Specialty Contractors business units have completed, or are currently working on, various portions of the East Side Access project in New York City, various projects at the World Trade Center and at Hudson Yards in New York City, and upgrades and rehabilitations at various New York City public housing facilities.
Our Specialty Contractors business units are currently working on or have completed various components of the East Side Access project in New York City, upgrades and rehabilitations at various New York City public housing facilities, and various projects at the World Trade Center and at Hudson Yards in New York City.
We believe price, experience, reputation, responsiveness, customer relationships, project completion track record, schedule control, risk management and quality of work are key factors customers consider when awarding contracts. 7 Table of Contents In our Civil segment, we compete principally with large civil construction firms, including (alphabetically) Dragados USA; Fluor Corporation; Granite Construction; Kiewit Corporation; OHL USA; Skanska USA; and The Walsh Group.
We believe price, experience, reputation, responsiveness, customer relationships, project completion track record, schedule control, risk management and quality of work are key factors customers consider when awarding contracts. 7 Table of Contents In our Civil segment, we compete principally with large civil construction firms, including (alphabetically) Dragados USA; Ferrovial S.E.; Fluor Corporation; Granite Construction; Kiewit Corporation; OHL USA; Skanska USA; and The Walsh Group.
The BIL 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.
The BIL initiated 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.
Black Construction is the largest contractor in Guam and provides a variety of heavy civil, building, mechanical and electrical construction services throughout the Western Pacific region and in other strategic military locations.
Black Construction is the largest contractor in Guam and provides a variety of heavy civil, building, mechanical and electrical construction services throughout the Asia-Pacific region and in other strategic military locations.
In addition, infrastructure programs generally garner popular, bipartisan support from the public and elected officials due to their favorable long-term economic impacts, including significant job creation.
In addition, infrastructure programs generally garner popular, bipartisan support from the public and elected officials due to their favorable long-term economic benefits, including significant job creation.
Our strengths and expertise in the construction of civil and building infrastructure projects have been augmented by our vertical integration capabilities, which we established more than 10 years ago through the acquisitions of various business entities specializing in electrical, mechanical, plumbing, HVAC and other services that enhanced our market capabilities and expanded our geographic presence.
Our strengths and expertise in the construction of civil and building infrastructure projects have been augmented by our vertical integration capabilities, which we established more than a decade ago through the acquisitions of various business entities specializing in electrical, mechanical, plumbing, HVAC and other services that enhanced our market capabilities and expanded our geographic presence.
As a result, we believe our backlog is firm, and although cancellations or scope adjustments may occur, historically they have not been material. We estimate that approximately $4 billion, or 45%, of our backlog as of December 31, 2022 will be recognized as revenue in 2023.
As a result, we believe our backlog is firm, and although cancellations or scope adjustments may occur, historically they have not been material. We estimate that approximately $4 billion, or approximately 40%, of our backlog as of December 31, 2023 will be recognized as revenue in 2024.
We are recognized as one of the leading civil contractors in the United States, as evidenced by our performance on several of the country’s largest mass-transit and transportation projects, such as Newark Liberty International Airport Terminal A (“Newark Airport Terminal A”), the East Side Access project in New York City, the California High-Speed Rail System, the Alaskan Way Viaduct Replacement (the “SR 99”) project in Seattle, major portions of the Red Line and Purple Line segments of the Los Angeles Metro subway system, and the San Francisco Central Subway extension to Chinatown.
We are recognized as one of the leading civil contractors in the United States, as evidenced by our performance on several of the country’s largest mass-transit and transportation projects, such as Newark Liberty International Airport Terminal A (“Newark Airport Terminal A”), various components of the East Side Access project in New York City, the Minneapolis Southwest Light Rail project (also known as the METRO Green Line Extension), the California High-Speed Rail System, the Alaskan Way Viaduct Replacement (the “SR 99”) project in Seattle, major portions of the Red Line and Purple Line subway segments of the Los Angeles Metro system, and the San Francisco Central Subway extension to Chinatown.
Our principal asset is our employees, many of whom have technical and professional backgrounds and undergraduate and/or advanced degrees. As of December 31, 2022, we had approximately 8,100 employees (including union employees), of which approximately 1,900 were salaried and 6,200 were hourly employees.
Our principal asset is our employees, many of whom have technical and professional backgrounds and undergraduate and/or advanced degrees. As of December 31, 2023, we had approximately 8,200 employees (including union employees), of which approximately 1,900 were salaried and 6,300 were hourly employees.
Revenue derived from federal, state and local government customers was 68%, 66% and 63% of our total revenue for each of the years ended December 31, 2022, 2021 and 2020, respectively. Environmental, Health and Safety Regulations Environmental, health and safety regulations and requirements materially affect our business.
Revenue derived from federal, state and local government customers was 74%, 68% and 66% of our total revenue for each of the years ended December 31, 2023, 2022 and 2021, respectively. Environmental, Health and Safety Regulations Environmental, health and safety regulations and requirements materially affect our business.
Accordingly, we believe that this significant level of sustained, incremental funding will favorably impact our current work and prospective opportunities over the next decade.
Accordingly, we believe that this significant level of sustained, incremental funding has and will continue to favorably impact our current work and prospective opportunities over the next decade.
On November 15, 2021, the bipartisan Infrastructure Investment and Jobs Act of 2021 (the “Bipartisan Infrastructure Law” or “BIL”) was enacted into law, providing $1.2 trillion of federal infrastructure funding, including $550 billion in new spending 4 Table of Contents for improvements to the country’s surface-transportation network and enhancements to core infrastructure.
In November 2021, the bipartisan Infrastructure Investment and Jobs Act of 2021 (the “Bipartisan Infrastructure Law” or “BIL”) was enacted into law, providing $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 Specialty Contractors segment is comprised of several operating units that provide unique services in various regions of the United States. Five Star Electric Corp. (“Five Star”) is an industry leader and one of the largest electrical contractors in New 5 Table of Contents York City.
The Specialty Contractors segment is composed of several operating units that provide unique services in various regions of the United States. Five Star Electric Corp. (“Five Star”) is an industry leader and one of the largest electrical contractors in New York City.
This sometimes presents challenges, as well as opportunities, in attracting and recruiting women to our workforce. Women made up 11.3% of our U.S. workforce as of December 31, 2022, which is in line with the representation of women in the U.S. construction workforce at large of 10.9%, according to data from the U.S. Bureau of Labor Statistics (“BLS”).
This sometimes presents challenges, as well as opportunities, in attracting and recruiting women to our workforce. Women made up 11.1% of our U.S. workforce as of December 31, 2023, which is in line with the representation of women in the U.S. construction workforce at large of 10.8%, according to data from the U.S. Bureau of Labor Statistics (“BLS”).
These agreements cover all necessary union crafts and are subject to various renewal dates. As of December 31, 2022, our workforce included a total of approximately 3,700 union employees.
These agreements cover all necessary union crafts and are subject to various renewal dates. As of December 31, 2023, our workforce included a total of approximately 3,600 union employees.
Despite the widespread adverse supply chain impacts that resulted from the coronavirus (“COVID-19”) pandemic, we did not experience significant supply chain issues broadly across our portfolio of projects, but we cannot be certain that such issues may not arise in the future if there are new outbreaks or variants of COVID-19 or other public health crises.
Despite the widespread adverse supply chain impacts that previously resulted from the coronavirus pandemic (“COVID-19”), we have not experienced significant supply chain issues broadly across our portfolio of projects, but we cannot be certain that such issues may not arise in the future if there are new outbreaks or other public health crises.
The Civil segment is comprised of the heavy civil construction operations of our predecessors, Tutor-Saliba Corporation, its subsidiary Black Construction, and Perini, as well as our acquired companies, Frontier-Kemper, Lunda Construction and Becho.
The Civil segment is composed of the heavy civil construction operations of our predecessors, Tutor-Saliba Corporation, its subsidiary Black Construction, and Perini, as well as our acquired companies, Frontier-Kemper Constructors (“Frontier-Kemper”), Lunda Construction and Becho.
This significant incremental funding is already being allocated to numerous major projects and is anticipated to be spent over approximately 10 years from the BIL’s passage, with much of it targeted toward end markets that are directly aligned with our market focus.
This significant incremental funding has been and continues to be allocated to numerous major projects and is anticipated to be spent over approximately 10 years from the BIL’s 4 Table of Contents passage, with much of it targeted toward end markets that are directly aligned with our market focus.
Specific projects include Newark Airport Terminal A; the LAX Airport Metro Connector Transit Station in Los Angeles, California; three large corporate office buildings in northern California for distinct confidential technology customers; a commercial office tower and a multi-unit residential tower, both at Hudson Yards in New York City; the new Cedars-Sinai Hospital in Marina Del Rey, California; Kaiser Hospital buildings in San Leandro, Redwood City and Roseville, California; the Choctaw Casino and Resort in Durant, Oklahoma; the Pechanga Resort and Casino expansion in Temecula, California; the O Street Government Office Building in Sacramento, California; and courthouses in San Bernardino and San Diego, California and Broward County, Florida.
Specific projects include the Brooklyn Jail project in New York City; Newark Airport Terminal A; the LAX Airport Metro Connector Transit Station in Los Angeles, California; three large corporate office buildings in northern California for prominent technology companies; a commercial office tower and a multi-unit residential tower, both at Hudson Yards in New York City; the Cedars-Sinai Replacement Hospital in Marina Del Rey, California; various Kaiser Permanente hospital buildings throughout California; the Choctaw Casino and Resort in Durant, Oklahoma; the Pechanga Resort and Casino expansion in Temecula, California; the O Street Government Office Building in Sacramento, California; and courthouses in San Bernardino and San Diego, California and Broward County, Florida.
ITEM 1. BUSINESS General Tutor Perini Corporation (together with its consolidated subsidiaries, “Tutor Perini,” the “Company,” “we,” “us,” and “our,” unless the context indicates otherwise) is a leading construction company, based on revenue as ranked by Engineering News-Record (“ENR”), offering diversified general contracting, construction management and design-build services to private customers and public agencies throughout the world.
ITEM 1. BUSINESS General Tutor Perini Corporation (together with its consolidated subsidiaries, “Tutor Perini,” the “Company,” “we,” “us,” and “our,” unless the context indicates otherwise) is a leading construction company offering diversified general contracting, construction management and design-build services to private customers and public agencies throughout the world.
We are also recognized as one of the major building contractors in the United States, as evidenced by our performance on several of the country’s largest building development projects, including Hudson Yards in New York City and CityCenter and the Cosmopolitan Resort and Casino, both in Las Vegas.
We are also recognized as one of the major building contractors in the United States, as evidenced by our performance on several of the country’s largest building development projects, including Hudson Yards in New York City, the CityCenter complex and the Cosmopolitan Resort and Casino, both in Las Vegas, and several major corporate office buildings in northern California for prominent technology companies.
Additionally, we are working on the first phase of the California High-Speed Rail project, the Purple Line Segments 2 and 3 expansion projects in Los Angeles and the Minneapolis Southwest Light Rail Transit project.
For example, we are continuing to work on the first phase of the California High-Speed Rail project, the Purple Line Segments 2 and 3 subway expansion projects in Los Angeles and the Minneapolis Southwest Light Rail project.
Fisk’s expertise is in the design and development of electrical and technology systems for major projects spanning a broad variety of project types, including commercial office buildings, sports arenas, hospitals, research laboratories, hotels and casinos, convention centers, manufacturing plants, refineries, and water and wastewater treatment facilities.
Fisk Electric (“Fisk”) covers many of the major commercial, transportation and industrial electrical construction markets in California and the southern United States, with the ability to cover other attractive markets nationwide. 5 Table of Contents Fisk’s expertise is in the design and development of electrical and technology systems for major projects spanning a broad variety of project types, including commercial office buildings, sports arenas, hospitals, research laboratories, hotels and casinos, convention centers, manufacturing plants, refineries, and water and wastewater treatment facilities.
We have also completed other major projects such as the SR 99 project in Seattle; the platform over the eastern rail yard at Hudson Yards in New York City; the rehabilitation of the Verrazano-Narrows Bridge in New York; and multiple runway reconstruction projects at the John F.
In addition, we have completed other major projects, including various components of the East Side Access project in New York City; the Newark Airport Terminal A project; the San Francisco Central Subway extension to Chinatown; the SR 99 project in Seattle; the platform over the eastern rail yard at Hudson Yards in New York City; the rehabilitation of the Verrazano-Narrows Bridge in New York; and runway reconstruction projects at the John F.
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During 2022, we performed work on more than 1,300 construction projects. In 2022, ENR ranked Tutor Perini as the 13th largest domestic contractor.
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During 2023, we performed work on approximately 1,500 construction projects.
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In its 2022 rankings, ENR ranked us as the nation’s third largest contractor in the transportation market and third largest domestic heavy contractor.
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For example, we are currently nearing completion on the Newark Airport Terminal A project and the East Side Access project in New York City, and we have substantially completed the San Francisco Central Subway extension to Chinatown.
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Fisk Electric (“Fisk”) covers many of the major commercial, transportation and industrial electrical construction markets in California and the southern United States, with the ability to cover other attractive markets nationwide.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

47 edited+22 added−1 removed52 unchanged
Biggest changeOur participation in construction joint ventures exposes us to liability and/or harm to our reputation for failures by our partners. As part of our business, we enter into joint venture arrangements typically to jointly bid on and execute particular projects, thereby reducing our risk profile while enhancing execution capabilities and increasing surety bonding capacity.
Biggest changeAs part of our business, we enter into joint venture arrangements typically to jointly bid on and execute particular projects, thereby reducing our risk profile while enhancing execution capabilities and increasing surety bonding capacity. Success on these joint projects depends in large part on whether our joint venture partners satisfy their contractual obligations and comply with all applicable regulatory requirements.
Any significant decline in economic conditions, such as those presented during a recession, in any of the markets we serve or uncertainty regarding the economic outlook has resulted and in the future could result in a decline in demand for infrastructure projects and commercial building developments.
A significant decline in economic conditions, such as those presented during a recession, in any of the markets we serve or uncertainty regarding the economic outlook has resulted and in the future could result in a decline in demand for infrastructure projects and commercial building developments.
Our actual results could differ from the assumptions and estimates used to prepare our financial statements. In preparing our financial statements, we are required under generally accepted accounting principles in the United States (“GAAP”) to make estimates and assumptions as of the date of the financial statements.
Our actual results could differ from the estimates and assumptions used to prepare our financial statements. In preparing our financial statements, we are required under generally accepted accounting principles in the United States (“GAAP”) to make estimates and assumptions as of the date of the financial statements.
Economic factors, including inflation, have also previously, and could in the future, subject us to higher costs, which we may not be able to fully recover in future projects that we are bidding, and may also decrease profit on our existing contracts, in particular with respect to our fixed price, unit price and guaranteed maximum price contracts.
Economic factors, including inflation, have also previously subjected us, and could in the future subject us, to higher costs, which we may not be able to fully recover in future projects that we are bidding, and may also decrease profit on our existing contracts, in particular with respect to our fixed price, unit price and guaranteed maximum price contracts.
While our policies mandate compliance with these anti-bribery laws, there is no assurance that our policies and procedures will protect us from circumstances or actions that could result in possible criminal penalties or other sanctions, including contract cancellations or debarment and loss of reputation, any of which could have a material adverse impact on our business, financial condition, and results of operations.
While our policies mandate compliance with these anti-bribery laws, there is no assurance that our policies and procedures will protect us from circumstances or actions that could result in possible criminal penalties or other sanctions, including contract cancellations or debarment, and harm to our reputation, any of which could have a material adverse impact on our business, financial condition, and results of operations.
Compliance with evolving data privacy laws and regulations may cause us to incur additional costs, and any violation could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data, which could have a material adverse impact on our financial results.
Compliance with evolving data privacy laws and regulations may cause us to incur additional costs, and any violation could result in damage to our reputation 12 Table of Contents and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data, which could have a material adverse impact on our financial results.
If we are unable to obtain reasonably priced surety bonds in the future, it could significantly affect our ability to be awarded new contracts and could, consequently, have a material adverse effect on our business, results of operations and financial condition.
If we are unable to obtain reasonably priced surety bonds in the future, it could 15 Table of Contents significantly affect our ability to be awarded new contracts and could, consequently, have a material adverse effect on our business, results of operations and financial condition.
We are involved in a significant number of legal proceedings which, if determined unfavorable to us, could adversely affect our financial results and/or cash flows, harm our reputation and/or preclude us from bidding on future projects. We also may invest significant working capital on projects while legal proceedings are being settled.
Risks Related to Our Business and Operations We are involved in a significant number of legal proceedings which, if determined unfavorable to us, could adversely affect our financial results and/or cash flows, harm our reputation and/or preclude us from bidding on future projects. We also may invest significant working capital on projects while legal proceedings are being settled.
Tutor could exert 15 Table of Contents influence over the outcome of a range of corporate matters, including the election of directors and the approval or rejection of other extraordinary transactions, such as a takeover attempt or sale of the Company or its assets.
Tutor could exert influence over the outcome of a range of corporate matters, including the election of directors and the approval or rejection of other extraordinary transactions, such as a takeover attempt or sale of the Company or its assets.
Risks Related to Our Capital Structure Downgrades in our credit ratings could have a material adverse effect on our business and financial condition. The credit ratings assigned to us and our debt are subject to ongoing evaluation by credit rating agencies and could change based upon, among other things, our results of operations and financial condition.
Downgrades in our credit ratings could have a material adverse effect on our business and financial condition. The credit ratings assigned to us and our debt are subject to ongoing evaluation by credit rating agencies and could change based upon, among other things, our results of operations and financial condition.
In addition, any instability in the financial and credit markets has negatively impacted and in the future could negatively impact our customers’ ability to pay us on a timely basis, or at all, for work on projects already under construction, has caused and in the future could cause our customers to delay or cancel construction projects in our backlog and could create difficulties for customers to obtain adequate financing to fund new construction projects.
In addition, instability in the financial and credit markets has negatively impacted and in the future could negatively impact our customers’ ability to pay us on a timely basis, or at all, for work on 11 Table of Contents projects already under construction, has caused and in the future could cause our customers to delay or cancel construction projects in our backlog and could create difficulties for customers to obtain adequate financing to fund new construction projects.
Our decision during 2022 to prioritize efforts to seek faster resolution of certain disputed matters, primarily in the Specialty Contractors segment in New York, and convert related balances to cash more quickly has resulted, and may in the future result, in other situations in which amounts that we collect are lower than estimated amounts, even where our estimates take account of the recent shift in our operational priorities.
Our decision in 2022 to prioritize efforts to seek faster resolution of certain disputed matters, primarily in the Specialty Contractors segment in New York, and convert related balances to cash more quickly has resulted, and may in the future result, in other situations where amounts that we collect are lower than estimated amounts, even in cases where our estimates have taken into account the recent shift in our operational priorities.
A loss of liquidity could adversely impact our ability to execute projects in our backlog, obtain new projects, engage subcontractors, and attract and retain key employees. Furthermore, we had approximately $422.4 million of outstanding borrowings at December 31, 2022 with variable interest rates. Higher market interest rates could also negatively impact our liquidity and financial condition.
A loss of liquidity could adversely impact our ability to execute projects in our backlog, obtain new projects, engage subcontractors, and attract and retain key employees. Furthermore, we had approximately $373.5 million of outstanding borrowings at December 31, 2023 with variable interest rates. Higher market interest rates could also negatively impact our liquidity and financial condition.
These factors may materially harm the market price of our common stock and potentially expose us to securities class-action litigation, which, even if unsuccessful, could result in substantial costs and divert management’s attention and resources from our business and have a material adverse effect on our financial condition, results of operations and cash flows. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
These factors may materially harm the market price of our common stock and potentially expose us to securities class-action litigation, which, even if unsuccessful, could result in substantial costs and divert management’s attention and resources from our business and have a material adverse effect on our financial condition, results of operations and cash flows. 16 Table of Contents ITEM 1B.
Risks Related to Our Business and Operations If we are unable to accurately estimate contract risks, revenue or costs, economic factors such as inflation, the timing of new awards, or the pace of project execution, we may incur a loss or achieve lower than anticipated profit.
If we are unable to accurately estimate contract risks, revenue or costs, economic factors such as inflation, the timing of new awards, or the pace of project execution, we may incur a loss or achieve lower than anticipated profit.
Areas requiring significant estimates by our management include, but are not limited to: • recognition of contract revenue, costs, profits or losses in applying the principles of revenue accounting; • recognition of revenue related to project incentives or awards we expect to receive; • recognition of recoveries under unapproved change orders or claims; • estimated amounts for expected project losses, warranty costs, contract closeout or other costs; • collectability of billed and unbilled accounts receivable; • asset valuations; • income tax provisions and related valuation allowances; • determination of expense and potential liabilities under pension and other post-retirement benefit programs; and • accruals for other estimated liabilities, including litigation and insurance reserves. 11 Table of Contents Our actual business and financial results could differ from our estimates of such results.
Areas requiring significant estimates by our management include, but are not limited to: • recognition of contract revenue, costs, profits or losses in applying the principles of revenue accounting; • recognition of revenue related to project incentives or awards we expect to receive; • recognition of recoveries under unapproved change orders or claims; • estimated amounts for expected project losses, warranty costs, contract closeout or other costs; • collectability of billed and unbilled accounts receivable; • asset valuations; • income tax provisions and related valuation allowances; • determination of expense and potential liabilities under pension and other post-retirement benefit programs; and • accruals for other estimated liabilities, including litigation and insurance reserves.
As of December 31, 2022, our backlog of uncompleted construction work was approximately $7.9 billion. The revenue currently projected in our backlog may not be fully realized and, in some cases, if realized, may not result in profits or may be less profitable than expected.
As of December 31, 2023, our backlog of uncompleted construction work was approximately $10.2 billion. The revenue currently projected in our backlog may not be fully realized and, in some cases, if realized, may not result in profits or may be less profitable than expected.
Further, any future volatile economic conditions resulting from the pandemic, as well as reactions to future resurgences of COVID-19 or outbreaks of other public health crises, could also aggravate or heighten the risks posed by other risk factors that we have identified in this Annual Report on Form 10-K, which in turn could materially and adversely affect our business, financial condition and results of operations.
Further, any future volatile economic conditions resulting from public health crises could also aggravate or heighten the risks posed by other risk factors that we have identified in this Annual Report on Form 10-K, which in turn could materially and adversely affect our business, financial condition and results of operations.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws. The U.S. Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010, and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business.
Foreign Corrupt Practices Act and similar worldwide anti-bribery laws. The U.S. Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010, and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business.
Such policy changes, including any enactment of increasingly stringent emissions or other environmental regulations, could increase the costs of projects for us and for our clients and, in some cases, delay or even prevent a project from going forward, thereby potentially reducing demand for our services. Consequently, this could result in a material adverse impact on our business.
Such policy changes, including any enactment of increasingly stringent emissions or other environmental regulations, could increase the costs of projects for us and for our clients and, in some cases, delay or even prevent a project from going forward, thereby potentially reducing demand for our services.
Volatility or lack of positive performance in our stock price may adversely affect our ability to retain key individuals to whom we have provided share-based compensation.
Volatility or lack of positive performance in our stock price may adversely affect our ability to retain key individuals to whom we have provided share-based compensation. We have experienced changes in senior management in the past.
These systems have been and may, in the future, be subject to interruptions or damage by a variety of factors including, but not limited to, cyber-attacks, natural disasters, power loss, telecommunications failures, acts of war, computer viruses, email phishing, obsolescence and physical damage.
These systems are subject to interruptions or damage by a variety of factors including, but not limited to, cyber-attacks, natural disasters, power loss, telecommunications failures, acts of war, computer viruses, email phishing, obsolescence and physical damage.
Tutor (the “Tutor Group”) owned approximately 14% of the outstanding shares of our common stock. Additionally, one of our current directors was appointed by Mr. Tutor pursuant to Mr. Tutor’s right to nominate one member to our Board of Directors, so long as the Tutor Group owns at least 11.25% of the outstanding shares of our common stock. Accordingly, Mr.
Tutor’s right to nominate one member to our Board of Directors, so long as the Tutor Group owns at least 11.25% of the outstanding shares of our common stock. Accordingly, Mr.
This may include requiring us to record an expense or reduce revenue that we previously recorded based on our expectations or estimates, requiring us to pay damages or reducing cash collections that we had expected to receive.
This may include requiring us to record an expense or reduce revenue that we previously recorded based on our expectations or estimates, requiring us to pay damages or reducing cash collections that we had expected to receive. For example, in April 2023, we received an adverse decision from the U.S.
Further, if we are unable to adequately address our partner’s performance issues, the customer may terminate the project, which could result in legal liability to us, harm our reputation, reduce our profit on a project or, in some cases, result in a loss. Weather can significantly affect our revenue and profitability.
Further, if we are unable to adequately address our partner’s performance issues, the customer may terminate the project, which could result in legal liability to us, harm our reputation, reduce our profit on a project or, in some cases, result in a loss. We could be adversely affected by violations of the U.S.
While the adverse effects of the COVID-19 pandemic have largely subsided, should future negative developments occur, such as the emergence of new strains or outbreaks of COVID-19, this could have a further adverse impact on our business, financial condition and results of operations.
While the adverse effects of COVID-19 have largely subsided, should future public health crises occur, this could have a further adverse impact on our business, financial condition and results of operations.
We rely on computer, information and communication technology and other related systems, some of which are hosted by third party providers, for various business processes and activities, including project management, accounting, financial reporting and business development.
Systems and information technology interruption and breaches in data security and/or privacy could adversely impact our ability to operate and negatively impact our operating results. We rely on computer, information and communication technology and other related systems, some of which are hosted by third-party providers, for various business processes and activities, including project management, accounting, financial reporting and business development.
A failure to promptly recover on these types of claims has had and could continue to have a material adverse effect on our liquidity and financial results and could result in further legal proceedings. A significant slowdown or decline in economic conditions, such as those presented during a recession, could adversely affect our operations.
A failure to promptly recover on these types of claims has had and could continue to have a material adverse effect on our liquidity and financial results and could result in further legal proceedings.
In addition, if future events are less favorable than what we assumed or estimated in our impairment analysis, we may be required to record an impairment charge, which could have a material adverse impact on our consolidated financial statements. We have, in the past, recorded significant asset impairment charges and could have additional such charges in the future.
The use of different assumptions or estimates could materially affect the determination as to whether or not an impairment has occurred. In addition, if future events are less favorable than what we assumed or estimated in our impairment analysis, we may be required to record an impairment charge, which could have a material adverse impact on our consolidated financial statements.
Assessing whether impairment has occurred requires us to make significant judgments and assumptions about the future, which are inherently subject to risks and uncertainties, and if actual events turn out to be materially less favorable than the judgments we make and the assumptions we use, we may be required to record impairment charges in the future. 14 Table of Contents We had $255.6 million of goodwill and indefinite-lived intangible assets recorded on our Consolidated Balance Sheets as of December 31, 2022.
Assessing whether impairment has occurred requires us to make significant judgments and assumptions about the future, which are inherently subject to risks and uncertainties, and if actual events turn out to be materially less favorable than the judgments we make and the assumptions we use, we may be required to record impairment charges in the future.
In connection with mergers and acquisitions, we have recorded goodwill and other intangible assets that could become impaired and adversely affect our operating results.
Consequently, this could result in a material adverse impact on our business. 14 Table of Contents In connection with mergers and acquisitions, we have recorded goodwill and other intangible assets that could become impaired and adversely affect our operating results.
Negative changes in our credit ratings could also result in more stringent covenants and higher interest rates with regard to any new or refinanced debt. We have a substantial amount of indebtedness which could adversely affect our financial position and prevent us from fulfilling our obligations under our debt agreements, especially in a high interest rate environment.
We have a substantial amount of indebtedness with restrictive covenants which could adversely affect our financial position and prevent us from fulfilling our obligations under our debt agreements, especially in a high interest rate environment. We currently have, and expect to continue to have, a substantial amount of indebtedness.
In addition, cost overruns, including unanticipated cost increases on fixed price contracts (including contracts performed under the design-build project delivery method, in which we assume the risks associated with the design of the project) and guaranteed maximum price contracts, have previously resulted, and in the future may result, in lower profits or losses.
In addition, cost overruns, including unanticipated cost increases on fixed price contracts and guaranteed maximum price contracts, have previously resulted, and in the future may result, in lower profits or 10 Table of Contents losses.
The COVID-19 pandemic also caused delays in certain bidding activities and contract awards, particularly for large civil projects, as well as delays in legal proceedings and settlement discussions where we have claims against project owners for additional costs exceeding the contract price or for amounts not included in the original contract price.
We also faced substantial postponements and other delays in legal proceedings and settlement discussions where we have claims against project owners for additional costs exceeding the contract price or for amounts not included in the original contract price.
We require substantial personnel, including construction and project managers and specialty subcontractor resources, to execute and perform on our contracts in backlog. The successful execution of our business strategies is also dependent upon our ability to attract and retain our key officers, as well as adequately plan for their succession.
The successful execution of our business strategies is also dependent upon our ability to attract and retain our key officers, as well as adequately plan for their succession.
An inability to obtain bonding could have a negative impact on our operations and results. We are often required to provide surety bonds securing our performance under our contracts. Our ability to obtain surety bonds primarily depends on our working capital, past performance, capitalization, credit rating, management expertise, overall capacity of the surety market and other factors.
Our ability to obtain surety bonds primarily depends on our working capital, past performance, capitalization, credit rating, management expertise, overall capacity of the surety market and other factors.
We assess these assets for impairment annually, or more often if required. Our assessments involve a number of estimates and assumptions that are inherently subjective, require significant judgment and involve highly uncertain matters that are subject to change. The use of different assumptions or estimates could materially affect the determination as to whether or not an impairment has occurred.
We had $255.6 million of goodwill and indefinite-lived intangible assets recorded on our Consolidated Balance Sheet as of December 31, 2023. We assess these assets for impairment annually, or more often if required. Our assessments involve a number of estimates and assumptions that are inherently subjective, require significant judgment and involve highly uncertain matters that are subject to change.
Pandemics, epidemics or other public health crises can adversely impact our business or the business of our suppliers, subcontractors or customers. For example, the recent COVID-19 pandemic created volatility, uncertainty and economic disruption for the Company, our customers, subcontractors and suppliers, and the markets in which we do business.
For example, particularly in 2020 and 2021, COVID-19 created volatility, uncertainty and economic disruption for the Company, our customers, subcontractors and suppliers, and the markets in which we do business, and certain of the impacts of this disruption have continued.
The cancellation or reduction in scope of significant projects included in our backlog could have a material adverse effect on our financial condition, results of operations and cash flows. Public health crises, such as the COVID-19 pandemic, have adversely impacted, and could in the future adversely impact, our business, financial condition and results of operations.
The cancellation or reduction in scope of significant projects included in our backlog could have a material adverse effect on our financial condition, results of operations and cash flows. We are subject to risks related to government contracts and related procurement regulations.
For example, during December 2022, we received an adverse appellate court decision involving the electrical component of a completed mass-transit project in New 10 Table of Contents York in the Specialty Contractors segment, which resulted in a non-cash charge of $43.2 million. In addition, any future adverse judgments could harm our reputation and preclude us from bidding on future projects.
Court of Appeals for the Second Circuit involving a long-standing dispute on a completed mixed-use project in New York, which resulted in a non-cash charge of $83.6 million. In addition, any future adverse judgments could harm our reputation and preclude us from bidding on future projects.
In addition, most of these contracts provide for 13 Table of Contents termination or renegotiation by the government at any time, without cause, which could have an adverse effect on our business and operations. We may not fully realize the revenue value reported in our backlog due to cancellations or reductions in scope.
In addition, most of these contracts provide for termination or renegotiation by the government at any time, without cause, which could have an adverse effect on our business and operations. The percentage of our business coming from government entities has continued to increase in recent years, and as of December 31, 2023 accounted for nearly 90% of our backlog.
Success on these joint projects depends in large part on whether our joint venture partners satisfy their contractual obligations and comply with all applicable regulatory requirements. Generally, we and our joint venture partners are jointly and severally liable for all liabilities and obligations of our joint ventures.
Generally, we and our joint venture partners are jointly and severally liable for all liabilities and obligations of our joint ventures.
Failure to meet contractual schedule requirements has subjected us, and in the future could subject us, to liquidated damages, liability for our customer’s actual cost arising out of our delay and damage to our reputation. Systems and information technology interruption and breaches in data security and/or privacy could adversely impact our ability to operate and negatively impact our operating results.
Failure to meet contractual schedule requirements has subjected us, and in the future could subject us, to liquidated damages, liability for our customer’s actual cost arising out of our delay and damage to our reputation. We require substantial personnel, including construction and project managers and specialty subcontractor resources, to execute and perform on our contracts in backlog.
Risk Related to Our Stock Ownership Our chairman and chief executive officer could exert influence over the Company due to his position and significant ownership interest. As of December 31, 2022, our chairman and chief executive officer, Ronald N. Tutor, and three trusts controlled by Mr.
As of December 31, 2023, our chairman and chief executive officer, Ronald N. Tutor, and three trusts controlled by Mr. Tutor (the “Tutor Group”) owned approximately 14% of the outstanding shares of our common stock. Additionally, one of our current directors was appointed by Mr. Tutor pursuant to Mr.
We currently have, and expect to continue to have, a substantial amount of indebtedness. As of December 31, 2022, our total debt was $958.4 million, with $70.3 million classified as current debt.
As of December 31, 2023, our total debt was $899.7 million, with $117.4 million classified as current debt.
For the year ended December 31, 2022, we derived $366.2 million of revenue from our work on projects located outside of the United States.
Our international operations expose us to economic, political, regulatory and other risks, as well as uncertainty related to U.S. government funding, which could adversely affect our revenue and earnings. For the year ended December 31, 2023, we derived $442.3 million of revenue from our work on projects located outside of the United States.
Inclement weather conditions, such as significant storms and unusual temperatures, can impact our ability to perform work. Adverse weather conditions can cause delays and increases in project costs, resulting in variability in our revenue and profitability. We are subject to risks related to government contracts and related procurement regulations.
Weather conditions and other events outside our control can significantly affect our revenue and profitability. Inclement weather conditions, such as significant storms and unusual temperatures, as well as natural or man-made disasters or other catastrophic events, can impact or prevent our ability to perform work.
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We have experienced changes in senior management in the past, and if we lose any key officer due to voluntary or involuntary termination, including as a result of death or disability, and we do not have qualified successors in place, our operating results could be harmed. 12 Table of Contents Our international operations expose us to economic, political, regulatory and other risks, as well as uncertainty related to U.S. government funding, which could adversely affect our revenue and earnings.
Added
Our actual business and financial results could differ from our estimates of such results.
Added
A significant slowdown or decline in economic conditions, such as those presented during a recession, could adversely affect our operations.
Added
Our long-time Chairman and CEO has agreed to transition to the role of Executive Chairman at the end of 2024, and we will have a new CEO.
Added
Changes in management, including as a result of succession or voluntary or involuntary termination, including as a result of retirement, death or disability, could adversely affect our business and financial results, particularly if we are not able to identify, engage, and retain qualified successors or if our business, customers, or employees do not respond positively to such changes.
Added
These conditions and events have caused, and may in the future cause, delays or terminations and increases in project costs, resulting in variability in our revenue and profitability. We may not fully realize the revenue value reported in our backlog due to cancellations or reductions in scope.
Added
As a result, the risks of adverse consequences related to government contracting and procurement are increasingly fundamental to our business. 13 Table of Contents Our participation in construction joint ventures exposes us to liability and/or harm to our reputation for failures by our partners.
Added
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. Pandemics, epidemics or other public health crises can adversely impact our business or the business of our suppliers, subcontractors or customers.
Added
COVID-19 also caused delays in certain bidding activities and contract awards, particularly for large civil projects, which adversely affected both our revenue and our backlog.
Added
We have, in the past, recorded significant asset impairment charges and could have additional such charges in the future.
Added
Risks Related to Our Capital Structure 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.
Added
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.
Added
Under the terms of our 2020 Credit Agreement, as amended, 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 date of 10.2% of the outstanding Term Loan B principal and any amounts outstanding under the Revolver would accelerate to January 30, 2025, and the commitments available under the Revolver would be reduced to zero on January 30, 2025.
Added
The maturity of the remaining 89.8% of the outstanding Term Loan B principal would accelerate to April 21, 2025 (which is 10 days prior to the maturity of the 2017 Senior Notes), if any of the 2017 Senior Notes are outstanding as of this date. We refer to this as the “spring-forward maturity” provision of our 2020 Credit Agreement.
Added
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.
Added
As a result of the spring-forward maturity provision, after January 30, 2024, any outstanding indebtedness under the Revolver and 10.2% of outstanding indebtedness under the Term Loan B will be reclassified as current indebtedness. After April 21, 2024, the remaining 89.8% of outstanding indebtedness under the Term Loan B will be reclassified as current indebtedness.
Added
We will need to repay, refinance, or obtain amendments or waivers with respect to our indebtedness related to the 2020 Credit Agreement and/or the 2017 Senior Notes before the January 30, 2025 and, if applicable, April 21, 2025 acceleration dates.
Added
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, which have an outstanding balance of $500.0 million as of December 31, 2023.
Added
If we are unable to pay off or refinance the 2017 Senior Notes prior to the above-mentioned acceleration dates, or to otherwise address the acceleration of outstanding indebtedness under our 2020 Credit Agreement due to the spring-forward maturity provision, our liquidity, business, operations and financial condition will be materially and adversely affected.
Added
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.
Added
We are working to refinance the 2017 Senior Notes and anticipate that we will complete a refinancing transaction by the end of April 2024, although there can be no assurance that we will be able to complete a refinancing on terms that we consider acceptable.
Added
We expect the terms of any refinanced debt to include interest rates that are higher than those of our current issuances under the 2017 Senior Notes. An inability to obtain bonding could have a negative impact on our operations and results. We are often required to provide surety bonds securing our performance under our contracts.
Added
Negative changes in our credit ratings could also result in more stringent covenants and higher interest rates with regard to any new or refinanced debt. Risk Related to Our Stock Ownership Our chairman and chief executive officer could exert influence over the Company due to his position and significant ownership interest.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES We have office facilities and equipment yards in the following locations, which we believe are suitable and adequate for our current needs: Offices Owned or Leased by Tutor Perini Business Segment(s) Los Angeles (Sylmar), CA Owned & Leased Corporate, Civil & Specialty Contractors Barrigada, Guam Owned Civil Black River Falls, WI Owned Civil Evansville, IN Owned Civil Fort Lauderdale, FL Leased Building & Specialty Contractors Framingham, MA Owned Building Gulfport, MS Owned Building Henderson, NV Owned Building & Specialty Contractors Houston, TX Owned Specialty Contractors Jessup, MD Owned Civil Mount Vernon, NY Leased Specialty Contractors New Rochelle, NY Owned Civil Ozone Park, NY Owned Specialty Contractors San Carlos, CA Leased Building Equipment Yards Owned or Leased by Tutor Perini Business Segment(s) Black River Falls, WI Owned Civil Evansville, IN Owned Civil Fontana, CA Leased Civil Hilbert, WI Owned Civil Rosemount, MN Owned Civil Stockton, CA Owned Building Waukesha, WI Owned Civil
Biggest changePROPERTIES We have office facilities and equipment yards in the following locations, which we believe are suitable and adequate for our current needs: Offices Owned or Leased by Tutor Perini Business Segment(s) Los Angeles (Sylmar), CA Owned & Leased Corporate, Civil & Specialty Contractors Barrigada, Guam Owned Civil Black River Falls, WI Owned Civil Evansville, IN Owned Civil Fort Lauderdale, FL Leased Building & Specialty Contractors Framingham, MA Owned Building Gulfport, MS Owned Building Henderson, NV Owned Building & Specialty Contractors Houston, TX Owned Specialty Contractors Jessup, MD Owned Civil Menlo Park, CA Leased Building Mount Vernon, NY Leased Specialty Contractors New Rochelle, NY Owned Civil Ozone Park, NY Owned Specialty Contractors Equipment Yards Owned or Leased by Tutor Perini Business Segment(s) Black River Falls, WI Owned Civil Evansville, IN Owned Civil Fontana, CA Leased Civil Hilbert, WI Owned Civil Rosemount, MN Owned Civil Stockton, CA Owned Building Waukesha, WI Owned Civil ITEM 3.
Added
LEGAL PROCEEDINGS Legal proceedings are discussed in Note 8 of the Notes to Consolidated Financial Statements and are incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the New York Stock Exchange under the symbol “TPC.” Holders At March 8, 2023, there were 317 holders of record of our common stock, including holders of record on behalf of an indeterminate number of beneficial owners.
Biggest changeMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the New York Stock Exchange under the symbol “TPC.” Holders At February 22, 2024, there were 298 holders of record of our common stock, including holders of record on behalf of an indeterminate number of beneficial owners. 18 Table of Contents Dividends and Issuer Purchases of Equity Securities We did not repurchase any of our common stock during the fourth quarter of 2023.
The comparison of total return on investment, defined as the change in year-end stock price plus reinvested dividends, for each of the periods assumes that $100 was invested on December 31, 2017 in each of our common stock, the NYSE Composite Index and the Dow Jones U.S.
The comparison of total return on investment, defined as the change in year-end stock price plus reinvested dividends, for each of the periods assumes that $100 was invested on December 31, 2018 in each of our common stock, the NYSE Composite Index and the Dow Jones U.S. Heavy Construction Index, with investment weighted on the basis of market capitalization.
Heavy Construction Index because we believe the index reflects the market conditions within the industry in which we primarily operate.
We selected the Dow Jones U.S. Heavy Construction Index because we believe the index reflects the market conditions within the industry in which we primarily operate.
Heavy Construction Index, with investment weighted on the basis of market capitalization. 17 Table of Contents The comparisons in the following graph are based on historical data and are not intended to forecast the possible future performance of our common stock. ITEM 6. [RESERVED]
The comparisons in the following graph are based on historical data and are not intended to forecast the possible future performance of our common stock. ITEM 6. [RESERVED]
Performance Graph The following graph compares the cumulative five-year total return to shareholders on our common stock relative to the cumulative total returns of the NYSE Composite Index and the Dow Jones U.S. Heavy Construction Index. We selected the Dow Jones U.S.
We have not historically paid dividends on our common stock and have no immediate plans to do so. Issuance of Unregistered Securities None. Performance Graph The following graph compares the cumulative five-year total return to shareholders on our common stock relative to the cumulative total returns of the NYSE Composite Index and the Dow Jones U.S. Heavy Construction Index.
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Dividends and Issuer Purchases of Equity Securities We did not repurchase any of our common stock during the fourth quarter of 2022. We have not historically paid dividends on our common stock and have no immediate plans to do so. Issuance of Unregistered Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe volume reduction mentioned above also contributed to the increase in loss from construction operations, as did the absence of a $20.1 million prior-year favorable adjustment that resulted from damages awarded by the trial court’s ruling on the same completed electrical project in New York that resulted in a $17.8 million non-cash charge (due to a partial appellate court reversal) in 2022, partially offset by the unfavorable prior-year impact of $16.2 million from changes in estimates on an electrical mass-transit project in New York.
Biggest changeThe impact from the absence of these prior-year adjustments was mostly offset by unfavorable adjustments in 2023 including $62.2 million of unfavorable non-cash adjustments due to changes in estimates on the electrical and mechanical scope of the above-mentioned completed transportation project in the Northeast associated with changes in the expected recovery on certain unapproved change orders resulting from ongoing negotiations; a non-cash charge of $24.7 million on the educational facilities project in New York that resulted from an adverse court ruling; an unfavorable adjustment of $16.9 million on a multi-unit residential project in New York due to changes in estimates resulting from incremental costs to complete the project and ongoing negotiations on unapproved change orders; and a $9.4 million unfavorable adjustment due to a settlement on a completed mass-transit project in California.
Other settlements in 2022 included a $16.2 million unfavorable non-cash impact related to a long-disputed, completed Civil segment project in Maryland, a $13.4 million unfavorable non-cash impact (split evenly between the Civil and Building segments) related to a transportation project in the Northeast, an $11.6 million unfavorable non-cash impact related to a Civil segment mass-transit project in California, as well as the unfavorable impact of various other settlements that were individually immaterial, partially offset by a $12.7 million favorable impact related to a Civil segment bridge project in the Midwest.
Other settlements in 2022 included a $16.2 million unfavorable non-cash impact related to a long-disputed, completed Civil segment project in Maryland, a $13.4 million unfavorable non-cash impact (split evenly between the Civil and Building segments) related to a completed transportation project in the Northeast, an $11.6 million unfavorable non-cash impact related to a Civil segment mass-transit project in California, as well as the unfavorable impact of various other settlements that were individually immaterial, partially offset by a $12.7 million favorable impact related to a Civil segment bridge project in the Midwest.
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.
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.
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.
We anticipate that we will continue to win our share of significant new project awards resulting from long-term, well-funded capital spending plans by state, local and federal customers, as well as limited competition for some of the largest project opportunities.
The decrease in investments in project working capital was primarily due to improved collection activity, as reflected by a decrease in accounts receivable and an increase in billings in excess of costs and estimated earnings.
The decrease in investments in project working capital was primarily due to improved collection activity, as reflected by a decrease in costs and estimated earnings in excess of billings and accounts receivable, and an increase in billings in excess of costs and estimated earnings (“BIE”).
During interim periods, including those subsequent to the Company’s October 1 annual test date, we evaluate events and circumstances, including, but not limited to, an examination of macroeconomic conditions, cost factors, overall financial performance by each reporting unit, other relevant entity-specific events, and trends in the stock prices of our Company and peers to determine if such factors indicate that it is likely that the goodwill for one or more of our reporting units is impaired, thus warranting the performance of a quantitative impairment test sooner than the fourth quarter of the year.
During interim periods, including those subsequent to the Company’s October 1 annual test date, we evaluate events and circumstances, including, but not limited to, an examination of macroeconomic conditions, cost factors, overall financial performance by each reporting unit, other relevant entity-specific events, and trends in the stock prices of our Company and 31 Table of Contents peers to determine if such factors indicate that it is likely that the goodwill for one or more of our reporting units is impaired, thus warranting the performance of a quantitative impairment test sooner than the fourth quarter of the year.
As of December 31, 2022, we were in compliance and expect to continue to be in compliance with the covenants under the 2020 Credit Agreement. 2017 Senior Notes On April 20, 2017, the Company issued $500 million in aggregate principal amount of 6.875% Senior Notes due May 1, 2025 (the “2017 Senior Notes”) in a private placement offering.
As of December 31, 2023, we were in compliance and expect to continue to be in compliance with the covenants under the 2020 Credit Agreement. 2017 Senior Notes On April 20, 2017, the Company issued $500 million in aggregate principal amount of 6.875% Senior Notes due May 1, 2025 (the “2017 Senior Notes”) in a private placement offering.
In considering the totality of qualitative factors known as of the reporting date, we determined that no triggering events occurred or circumstances changed since our October 1, 2022 annual test that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount.
In considering the totality of qualitative factors known as of the reporting date, we determined that no triggering events occurred or circumstances changed since our October 1, 2023 annual test that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount.
(b) Backlog may differ from the transaction prices allocated to the remaining performance obligations as disclosed in Note 3 of the Notes to Consolidated Financial Statements. Such differences relate to the timing of executing a formal contract or receiving a notice to proceed.
(b) Backlog may differ from the transaction prices allocated to the remaining performance obligations as disclosed in Note 2 of the Notes to Consolidated Financial Statements. Such differences relate to the timing of executing a formal contract or receiving a notice to proceed.
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.
The law initiated 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.
During the fourth quarter of 2022, we conducted our annual goodwill impairment test and determined that goodwill was not impaired since the estimated fair value of the Civil reporting unit exceeded its net book value by a significant amount.
During the fourth quarter of 2023, we conducted our annual goodwill impairment test and determined that goodwill was not impaired since the estimated fair value of the Civil reporting unit exceeded its net book value by a significant amount.
The arrangements are often formed for the execution of single contracts or projects and allow the Company to share risks and secure specialty skills required for project execution. 28 Table of Contents In accordance with ASC 810, Consolidation (“ASC 810”) the Company assesses its joint ventures at inception to determine if any meet the qualifications of a variable interest entity (“VIE”).
The arrangements are often formed for the execution of single contracts or projects and allow the Company to share risks and secure specialty skills required for project execution. In accordance with ASC 810, Consolidation (“ASC 810”) the Company assesses its joint ventures at inception to determine if any meet the qualifications of a variable interest entity (“VIE”).
These included a $36.1 million charge due to unfavorable adjustments related to the unforeseen cost of project close-out issues, remediation work, extended project supervision and associated labor inefficiencies on the electrical (Specialty Contractors segment) component of a transportation project in the Northeast; an $18.0 million charge related to similar project close-out issues (split evenly between the Civil and Building segments) on the same transportation project in the Northeast; a $13.1 million charge due to inefficiencies and cost overruns on a Civil segment mass-transit project in California; and $11.1 million of charges related to close-out discussions for a mechanical project in New York in the Specialty Contractors segment, as well as the net unfavorable impact of changes in estimates on numerous other projects that were individually immaterial.
Significant project charges in 2022 of $96.8 million included a $36.1 million charge due to unfavorable adjustments related to the unforeseen cost of project close-out issues, remediation work, extended project supervision and associated labor inefficiencies on the electrical (Specialty Contractors segment) component of a transportation project in the Northeast; an $18.0 million charge related to similar project close-out issues (split evenly between the Civil and Building segments) on the same transportation project in the Northeast; a $13.1 million charge due to inefficiencies and cost overruns on a Civil segment mass-transit project in California; and $11.1 million of charges related to close-out discussions for a mechanical project in New York in the Specialty Contractors segment, as well as the net unfavorable impact of changes in estimates on numerous other projects that were individually immaterial.
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 has declined in each subsequent year and was $7.9 billion as of December 31, 2022, a 29% decrease compared to the end of 2019.
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 COVID-19, 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.
These events and circumstances include, but are not limited to, changes in the overall financial performance of the Civil reporting unit and other quantitative and qualitative factors specific to the Civil reporting unit which indicate potential triggering events that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount. 29 Table of Contents
These events and circumstances include, but are not limited to, changes in the overall financial performance of the Civil reporting unit and other quantitative and qualitative factors specific to the Civil reporting unit which indicate potential triggering events that would more likely than not reduce the fair value of the Civil reporting unit below its carrying amount.
Claims arising from construction contracts have been made against the Company by customers, and the Company has made claims against customers for costs incurred in excess of current contract provisions. The Company recognizes revenue for claims as variable consideration in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”).
Claims arising from construction contracts have been made against the Company by customers, and the Company has made claims against customers for costs incurred in excess of current contract provisions. The Company recognizes revenue for claims as variable consideration in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts 30 Table of Contents with Customers (“ASC 606”).
More specifically, backlog sometimes 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 21 Table of Contents 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.).
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 for the Civil segment was $4.4 billion as of December 31, 2022, down slightly compared to $4.6 billion as of December 31, 2021. 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.
Backlog for the Civil segment was $4.2 billion as of December 31, 2023, down slightly compared to $4.4 billion as of December 31, 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.
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.
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 29 Table of Contents 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.
In certain cases, the changes in facts and circumstances resulted in changes in estimates to the expected recoveries for certain disputed matters, which were identified as part of the implementation of the new collections strategy and were primarily related to the Specialty Contractors segment in New York.
In certain cases, the changes in facts and circumstances resulted in changes in estimates to the expected recoveries for certain disputed matters, which were identified as part of the implementation of a new collections strategy in the latter part of 2022 and were primarily related to the Specialty Contractors segment in New York.
The 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 BIL was enacted into law in November 2021, and 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.
Most projects in the Civil segment’s backlog typically convert to revenue over a period of three to five years and in the Building and Specialty Contractors segments over a period of one to three years. We estimate that approximately $4 billion, or 45%, of our backlog as of December 31, 2022 will be recognized as revenue in 2023.
Most projects in the Civil segment’s backlog typically convert to revenue over a period of three to five years and in the Building and Specialty Contractors segments over a period of one to three years. We estimate that approximately $4 billion, or approximately 40%, of our backlog as of December 31, 2023 will be recognized as revenue in 2024.
For construction joint ventures that do not need to be fully consolidated, the Company accounts for its interest in the joint ventures using the proportionate consolidation method, whereby the Company’s proportionate share of the joint ventures’ assets, liabilities, revenue and cost of operations are included in the appropriate classifications in the Company’s consolidated financial statements.
For construction joint ventures that do not need to be fully consolidated but qualify for the equity method of accounting, the Company accounts for its interest in the joint ventures using the proportionate consolidation method, whereby the Company’s proportionate share of the joint ventures’ assets, liabilities, revenue and cost of operations are included in the appropriate classifications in the Company’s consolidated financial statements.
The operating cash flow for 2022 was the largest result for any year since the merger between Tutor-Saliba Corporation and Perini Corporation in 2008. The record operating cash flow in 2022 was primarily due to a decrease in investments in project working capital partially offset by cash utilized by earnings sources.
The operating cash flow for 2023 was the largest result for any year since the merger between Tutor-Saliba Corporation and Perini Corporation in 2008, exceeding the previous record achieved in 2022. The record operating cash flow in 2023 was primarily due to a decrease in investments in project working capital partially offset by cash utilized by earnings sources.
The aggregate balance of equipment financing loans was approximately $37.0 million and $41.7 million at December 31, 2022 and 2021, respectively, with interest rates ranging from 2.54% to 7.32% with equal monthly installment payments over periods up to 5 years.
The aggregate balance of equipment financing loans was approximately $26.4 million and $37.0 million at December 31, 2023 and 2022, respectively, with interest rates ranging from 2.54% to 7.32% with equal monthly installment payments over periods up to 5 years.
These unfavorable impacts were partially offset by the favorable impact of a project close-out adjustment of $12.7 million on a bridge project in the Midwest.
These prior-year unfavorable impacts were partially offset by a prior-year favorable project close-out adjustment of $12.7 million on a bridge project in the Midwest.
In 2022, the Company began to implement changes to its business strategy, primarily with respect to collections and operations in its Specialty Contractors segment in New York.
In 2022, the Company implemented changes to its business strategy, primarily with respect to collections and operations in its Specialty Contractors segment in New York.
However, other building end markets, such as correctional facilities, health care, education, and hospitality and gaming, continue to show strong demand for new and renovated facilities.
However, other Building segment end markets, such as correctional and detention facilities, health care, education, industrial/manufacturing, and hospitality and gaming, continue to show strong demand for new and renovated facilities.
Cash immediately available for general corporate purposes was $47.7 million and $60.2 million as of December 31, 2022 and 2021, 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 immediately available for general corporate purposes was $145.1 million and $47.7 million as of December 31, 2023 and 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.
The 2022 temporary aggregate negative project adjustments of $119.7 million referred to above included a temporary unfavorable non-cash impact of $38.8 million resulting from the successful negotiation of significant lower margin (and lower risk) change orders on a Civil segment mass-transit project in California.
The 2022 temporary aggregate negative project adjustments of $119.7 million referred to above included a temporary unfavorable non-cash impact of $38.8 million resulting from the successful negotiation of significant lower margin (and lower risk) change orders on the same Civil segment project on the West Coast.
As of December 31, 2022, the mix of backlog by segment was 56% for Civil, 28% for Building and 16% for Specialty Contractors, compared to 55% for Civil, 28% for Building and 17% for Specialty Contractors at the end of 2021.
As of December 31, 2023, the mix of backlog by segment was 42% for Civil, 41% for Building and 17% for Specialty Contractors, compared to 56% for Civil, 28% for Building and 16% for Specialty Contractors at the end of 2022.
Restricted cash and restricted investments at December 31, 2022 were primarily held to secure insurance-related contingent obligations. During the year ended December 31, 2022, net cash provided by operating activities was $207.0 million, compared to net cash used in operating activities of $148.5 million in 2021, representing an increase of $355.5 million compared to 2021.
Restricted cash and restricted investments at December 31, 2023 were primarily held to secure insurance-related contingent obligations and deposits. During the year ended December 31, 2023, net cash provided by operating activities was $308.5 million, compared to $207.0 million in 2022, representing an increase of $101.5 million.
Operating margin was 1.2% for 2022 compared to 12.7% in 2021. The decrease in operating margin for 2022 was primarily due to the factors discussed above that drove the decrease in income from construction operations. New awards in the Civil segment totaled $1.6 billion in 2022 compared to $1.9 billion in 2021.
The increase in operating margin for 2023 was primarily due to the factors discussed above that drove the increase in income from construction operations. New awards in the Civil segment totaled $1.7 billion in 2023 compared to $1.6 billion in 2022.
See Note 7 of the Notes to Consolidated Financial Statements for further detail of our debt and the timing of expected future principal and interest payments. • Operating lease obligations of $103.5 million (of which $12.4 million are due in 2023).
See Note 7 of the Notes to Consolidated Financial Statements for further detail of our debt and the timing of expected future principal and interest payments. • Operating lease obligations of $97.2 million (of which $12.0 million are due in 2024).
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 $106.0 million as of December 31, 2022 compared to $93.6 million as of December 31, 2021.
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 27 Table of Contents $144.4 million as of December 31, 2023 compared to $106.0 million as of December 31, 2022.
The decrease in operating margin was driven by the factors mentioned above that drove the lower revenue and income from construction operations. 23 Table of Contents New awards in the Building segment totaled $1.2 billion in 2022 compared to $2.0 billion in 2021.
Operating margin was (7.0)% in 2023 compared to 0.6% in 2022. The decrease in operating margin was driven by the factors mentioned above that drove the lower revenue and income (loss) from construction operations. New awards in the Building segment totaled $3.3 billion in 2023 compared to $1.2 billion in 2022.
The largest of these was in Los Angeles County, where Measure M, a half-cent sales tax increase, was approved in 2016 and is expected to generate $120 billion of funding over 40 years.
The largest of these was in Los Angeles County, where Measure M, a half-cent sales tax increase, was approved in 2016 and is expected to generate $120 billion of funding over 40 years. Funding from this measure is supporting and is expected to continue to support several of the Company’s current and prospective projects.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors, including, but not limited to, those discussed in Item 1A. Risk Factors and elsewhere in this Annual Report. Comparison of 2021 to 2020 Results For a discussion comparing our 2021 results to our 2020 results, refer to Item 7.
Our actual results 19 Table of Contents could differ materially from those anticipated in the forward-looking statements as a result of certain factors, including, but not limited to, those discussed in Item 1A. Risk Factors and elsewhere in this Annual Report.
Income from construction operations for 2022 decreased 92% compared to 2021 due to various factors, including the lower profitability associated with the temporary unfavorable impact of $38.8 million resulting from the successful negotiation of significant lower margin (and lower risk) change orders on a mass-transit project in California (where the temporary reduction to earnings is expected to reverse itself over the remaining life of the project), the $26.2 million unfavorable non-cash impact related to a completed highway project in the Northeast due to the reversal on appeal of a previously favorable lower-court 22 Table of Contents ruling, the $25.5 million unfavorable non-cash impact related to the adverse legal judgment on a dispute related to a completed bridge project in New York, the $16.2 million unfavorable non-cash impact related to the settlement of a long-disputed, completed project in Maryland, the $13.1 million c harge due to inefficiencies and cost overruns and the $11.6 million unfavorable non-cash settlement impact, both related to another mass-transit project in California and the $10.0 million non-cash impact related to an unfavorable adjustment resulting from an adverse legal decision on a mass-transit project in the Northeast.
Also contributing to the favorable change was the absence of significant prior-year unfavorable adjustments including the temporary unfavorable impact of $38.8 million resulting from the successful negotiation of significant lower margin (and lower risk) change orders on the same project on the West Coast (where the temporary reduction to earnings is expected to reverse itself over the remaining life of the project); the $26.2 million unfavorable non-cash impact related to a completed highway project in the Northeast due to the reversal on appeal of a previously favorable lower-court ruling; the $25.5 million unfavorable non-cash impact related to the adverse legal judgment on a dispute related to a completed bridge project in New York; the $16.2 million unfavorable non-cash impact related to the settlement of a long-disputed, completed project in Maryland; the $13.1 million charge due to inefficiencies and cost overruns and the unfavorable non-cash settlement impact of $11.6 million, both related to another mass-transit project in California; and the $10.0 million non-cash impact related to an unfavorable adjustment resulting from an adverse legal decision on a mass-transit project in the Northeast.
During 2021, net cash used in financing activities was $54.7 million, which was primarily driven by net repayment of borrowings of $37.0 million and $22.7 million of cash distributions to noncontrolling interests, partially offset by $7.0 million of cash contributions from noncontrolling interests.
During 2023, net cash used in financing activities was $109.4 million, which was primarily driven by net repayment of borrowings of $61.7 million and $46.5 million of cash distributions to noncontrolling interests, partially offset by $2.0 million of cash contributions from noncontrolling interests.
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 December 31, 2022 Actual Required First lien net leverage ratio 3.36 to 1.00 On October 31, 2022, the 2020 Credit Agreement was amended to set the maximum First Lien Net Leverage Ratio covenant level to 2.75:1.00 (from 2.25:1.00), effective the fiscal quarter ending September 30, 2022, and subsequently stepping back down to 2.25:1.00 beginning the fiscal quarter ending June 30, 2023.
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 December 31, 2023 Actual Required First Lien Net Leverage Ratio 2.07 to 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.
The Civil segment is well-positioned to capture its share of these prospective projects, but the timing of new awards remains uncertain.
The Civil segment is well-positioned to capture its share of these prospective projects.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the year ended December 31, 2021, as filed with the SEC on February 24, 2022.
Comparison of 2022 to 2021 Results For a discussion comparing our 2022 results to our 2021 results, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 15, 2023.
Adverse legal judgments or decisions during 2022 included a $43.2 million non-cash impact related to the electrical component of a completed mass-transit project in New York in the Specialty Contractors segment, a $26.2 million unfavorable non-cash impact due to the reversal on appeal of a previously favorable lower-court ruling related to a completed Civil segment highway project in the Northeast, a $25.5 million non-cash impact related to a completed Civil segment bridge project in New York, a $17.8 million non-cash impact associated with the partial reversal by an appellate court of previously awarded legal damages related to a completed electrical project in New York in the Specialty Contractors segment, an $11.3 million impact related to a Building segment hospitality project in Florida and a $10.0 million non-cash impact related to a Civil segment mass-transit project in New York. 19 Table of Contents Settlements during 2022 had an aggregate net negative impact of $85.4 million, as referred to above, which included unfavorable impacts related to certain Specialty Contractors segment projects in New York that collectively totaled $32.9 million, one of which negatively impacted profitability by $11.3 million, with the remainder of the negative impacts in the Specialty Contractors segment comprised of unfavorable settlements that were individually immaterial.
Adverse legal judgments or decisions during 2022 included a $43.2 million non-cash impact related to the electrical component of a completed mass-transit project in New York in the Specialty Contractors segment, a $26.2 million unfavorable non-cash impact due to the reversal on appeal of a previously favorable lower-court ruling related to a completed Civil segment highway project in the Northeast, a $25.5 million non-cash impact related to a completed Civil segment bridge project in New York, a $17.8 million non-cash impact associated with the partial reversal by an appellate court of previously awarded legal damages related to a completed electrical project in New York in the Specialty Contractors segment, an $11.3 million impact related to a Building segment hospitality project in Florida and a $10.0 million non-cash impact related to a Civil segment mass-transit project in New York.
The aggregate balance of mortgage loans was approximately $11.6 million and 27 Table of Contents $14.6 million at December 31, 2022 and 2021, respectively, with interest rates ranging from a fixed 2.25% to Secured Overnight Financing Rate (“SOFR”) plus 2.00% and monthly installment payments over periods up to 10 years.
The aggregate balance of mortgage loans was approximately $8.4 million and $11.6 million at December 31, 2023 and 2022, respectively, with interest rates r anging from a fixed 2.25% to SOFR plus 2.00% and monthly installment payments over periods up to 10 years.
Contractual Obligations Our contractual obligations and commitments as of December 31, 2022 include: • Debt obligations of $972.4 million (of which $70.3 million are due in 2023) and interest payments of $240.8 million (of which $71.3 million are due in 2023) based on rates in effect as of December 31, 2022.
Contractual Obligations Our contractual obligations and commitments as of December 31, 2023 include: • Debt obligations of $910.7 million (of which $117.4 million are due in 2024) and interest payments of $151.3 million (of which $66.4 million are due in 2024) based on rates in effect as of December 31, 2023.
Borrowings under the 2020 Credit Agreement bear interest at variable rates, which increased during 2022 due to changes in market conditions that resulted in increases in LIBOR, in the case of the Term Loan B, and the administrative agent’s prime lending rate in the case of the Revolver.
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 the Secured Overnight Financing Rate (“SOFR”) (and the London Interbank Offered Rate (“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.
Operating margin was (20.7)% in 2022 compared to (0.9)% in 2021. The decrease in operating margin was mainly attributable to the aforementioned factors that drove the larger loss from construction operations in 2022. New awards in the Specialty Contractors segment totaled $729 million in 2022 compared to $631 million in 2021.
Operating margin was (20.9)% in 2023 compared to (20.7)% in 2022. The change in operating margin was mainly attributable to the aforementioned factors that drove the lower loss from construction operations in 2023. 26 Table of Contents New awards in the Specialty Contractors segment totaled $1.1 billion in 2023 compared to $729.3 million in 2022.
The following table presents the changes in backlog in 2022: (in millions) Backlog at December 31, 2021 New Awards in 2022 (a) Revenue Recognized in 2022 Backlog at December 31, 2022 (b) Civil $ 4,553.5 $ 1,597.7 $ (1,734.9) $ 4,416.3 Building 2,308.9 1,157.3 (1,242.6) 2,223.6 Specialty Contractors 1,373.2 729.3 (813.3) 1,289.2 Total $ 8,235.6 $ 3,484.3 $ (3,790.8) $ 7,929.1 _____________________________________________________________________________________________________________ (a) New awards consist of the original contract price of projects added to our backlog plus or minus subsequent changes to the estimated total contract price of existing contracts.
The following table presents the changes in backlog in 2023: (in millions) Backlog at December 31, 2022 New Awards in 2023 (a) Revenue Recognized in 2023 Backlog at December 31, 2023 (b) Civil $ 4,416.3 $ 1,708.2 $ (1,883.9) $ 4,240.6 Building 2,223.6 3,256.4 (1,302.5) 4,177.5 Specialty Contractors 1,289.2 1,144.9 (693.8) 1,740.3 Total $ 7,929.1 $ 6,109.5 $ (3,880.2) $ 10,158.4 _____________________________________________________________________________________________________________ (a) New awards consist of the original contract price of projects added to our backlog plus or minus subsequent changes to the estimated total contract price of existing contracts.
During the year ended December 31, 2021, net cash used in operating activities was $148.5 million due primarily to investments in project working capital, partially offset by cash generated from earnings sources.
During the year ended December 31, 2022, net cash provided by operating activities was $207.0 million primarily due to a decrease in investments in project working capital partially offset by cash utilized by earnings sources.
We believe that cash generated from operations, along with our unused credit capacity of $175 million and available cash balances as of December 31, 2022, will be sufficient to fund any working capital needs and debt maturities for the next 12 months and beyond, including the expected prepayment of $44.0 million on the Term Loan B in the second quarter of 2023 due to a prepayment requirement in the Credit Agreement as a result of the Company generating “excess” cash flow in 2022, as discussed below in Debt .
We believe that cash generated from operations, along with our unused credit capacity of $175 million and available cash balances as of December 31, 2023, will be sufficient to fund working capital needs and debt maturities for the next 12 months and beyond, as discussed further in Debt below.
The COVID-19 pandemic also previously hindered the Company’s ability to resolve disputes related to unapproved work, which 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.
Executive Overview COVID-19 Update During 2020 and 2021, COVID-19 caused shut-downs or significant reductions in the operations of various courts and arbitrations, 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.
Other Income, Net, Interest Expense and Income Tax (Expense) Benefit Year Ended December 31, (in millions) 2022 2021 Other income, net $ 6.7 $ 2.0 Interest expense (69.6) (69.0) Income tax (expense) benefit 75.1 (25.6) Other income, net increased by $4.7 million in 2022 compared to 2021 primarily due to interest earned on federal income tax receivable balances.
Other Income, Net, Interest Expense and Income Tax Benefit Year Ended December 31, (in millions) 2023 2022 Other income, net $ 17.2 $ 6.7 Interest expense (85.2) (69.6) Income tax benefit 55.0 75.1 Other income, net increased by $10.5 million in 2023 compared to 2022 primarily due to a gain on sale of property in 2023.
The tax benefits in 2022 that increased the tax rate compared to 2021 were primarily earnings attributable to noncontrolling interests (for which income taxes are not the responsibility of the Company) and state income taxes (net of federal benefits).
The items that caused a higher effective tax rate in 2023 as compared to 2022 were primarily higher earnings attributable to noncontrolling interests (for which income taxes are not the responsibility of the Company), partially offset by lower state income taxes (net of the federal tax benefit).
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.
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.
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 Revolver will mature on August 18, 2025, unless any of the 2017 Senior Notes are outstanding on January 30, 2025, in which case any extensions of credit under the Revolver will mature and the commitments available under the Revolver will be reduced to zero, in each case, on January 30, 2025, subject to certain further exceptions.
As of December 31, 2022, we had 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 compared to working capital of $2.1 billion, a ratio of current assets to current liabilities of 2.17 and a ratio of debt to equity of 0.59 at December 31, 2021. 26 Table of Contents Debt Summarized below are the key terms of our debt as of December 31, 2022.
As of December 31, 2023, we had working capital of $1.4 billion, a ratio of current assets to current liabilities of 1.66 and a ratio of debt to equity of 0.70 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.
The change in loss from construction operations was due to various factors discussed above in the section titled Operating Results , including the $43.2 million non-cash impact from an unfavorable adjustment related to an adverse appellate court decision involving the electrical component of a completed mass-transit project in New York, the $17.8 million unfavorable impact associated with the partial reversal by an appellate court of previously awarded legal damages related to a completed electrical project in New York, the $11.3 million non-cash impact related to settlement negotiations on a mechanical project in New York and the $11.1 million charge related to another mechanical project in New York.
The unfavorable prior-year adjustments included a $46.2 million unfavorable adjustment on the aforementioned transportation project in the Northeast related to the unforeseen cost of project close-out issues, remediation work, extended project supervision and associated labor inefficiencies; the $43.2 million non-cash impact from an unfavorable adjustment related to an adverse appellate court decision involving the electrical component of a completed mass-transit project in New York; a non-cash charge of $17.8 million that increased cost of operations associated with the partial reversal by an appellate court of previously awarded legal damages related to a completed electrical project in New York; the $11.3 million non-cash impact related to settlement negotiations on a mechanical project in New York; and the $11.1 million unfavorable non-cash adjustment related to another mechanical project in New York.
The outlook for the Company’s growth over the next several years remains favorable, but it could be negatively impacted by future project delays or the timing of project bids, awards, commencements, ramp-up activities and completions, as well as by any adverse follow-on consequences of the COVID-19 pandemic.
The outlook for the Company’s revenue growth over the next several years remains favorable. However, revenue growth could be hampered by unanticipated project delays or the timing of project bids, awards, commencements, ramp-up activities and completions.
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 million, which may be used for revolving loans, letters of credit and/or general purposes.
We have a committed line of credit totaling $175 million, which may be used for revolving loans, letters of credit and/or general purposes.
Corporate, Tax and Other Matters Corporate General and Administrative Expenses Corporate general and administrative expenses were $62.2 million in 2022 compared to $58.0 million in 2021. The increase in corporate general and administrative expenses in 2022 compared to 2021 was predominantly due to higher compensation-related expenses.
Corporate, Tax and Other Matters Corporate General and Administrative Expenses Corporate general and administrative expenses were $75.2 million in 2023 compared to $62.2 million in 2022.
Backlog for the Specialty Contractors segment was $1.3 billion as of December 31, 2022, down modestly compared to $1.4 billion as of December 31, 2021. 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.
The Specialty Contractors segment continues to be primarily focused on servicing the Company’s current and prospective large Civil and Building segment projects, particularly in the Northeast and California.
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 the lowest bidder but no contract was awarded due to customer budget constraints.
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.
In addition, there was $119.7 million of temporary aggregate negative project adjustments in 2022 due to increases in unapproved work on various projects, as well as the successful negotiation of significant lower margin (and lower risk) change orders on a Civil segment mass-transit project in California, all of which are expected to reverse themselves over the remaining lives of the projects.
Also contributing to the change between 2023 and 2022 were temporary aggregate negative project adjustments of $79.2 million in 2023 compared to $119.7 million in 2022 due to increases in unapproved work on various projects, all of which are expected to reverse themselves over the remaining lives of the projects.
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: Year Ended December 31, (in millions) 2022 2021 Revenue $ 1,734.9 $ 2,095.8 Income from construction operations 21.1 266.2 Revenue for 2022 decreased 17% compared to 2021, primarily due to reduced project execution activities on certain mass-transit, transportation and bridge projects in California, the Northeast and the Midwest, respectively, that are completed or nearing completion, partially offset by increased activities on certain projects in the Midwest and California.
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: Year Ended December 31, (in millions) 2023 2022 Revenue $ 1,883.9 $ 1,734.9 Income from construction operations 198.6 21.1 Revenue for 2023 increased 9% compared to 2022, primarily due to the absence of certain prior-year unfavorable adjustments, as further discussed below, partially offset by the unfavorable impacts in 2023 from various project adjustments, also discussed below.
As noted above, cash flow from operating activities increased $355.5 million when comparing 2022 with 2021. Th e significant increase was primarily driven by a decrease in investment in working capital in 2022 compared to an increase in 2021.
The decrease in investments in project working capital was primarily due to improved collection activity, as reflected by a decrease in accounts receivable and an increase in BIE. As noted above, cash flow from operating activities increased $101.5 million when comparing 2023 with 2022.
Ultimately, the Company agreed to settle these disputes for amounts less than what had previously been estimated and might have been obtained if the disputes had been litigated to conclusion. This shift in collections strategy contributed to the significant decline in income from construction operations in 2022 and most of the resulting cash is expected to be collected in 2023.
In implementing this change in collections strategy, management concluded that significant concessions would be required in a number of disputes to facilitate settlements. Ultimately, the Company agreed to settle these disputes for amounts less than what had previously been estimated and might have been obtained if the disputes had been litigated to conclusion.
The decrease was primarily due to the following net impacts in 2022 that also reduced revenue: 1) certain adverse legal judgments or decisions of $147.8 million in the aggregate; 2) various settlements that had a net negative impact of $85.4 million in the aggregate; and 3) various changes in estimates for project charges, net of positive impacts from improved productivity and efficiencies on certain projects, which had an aggregate net negative impact of $96.8 million.
The improvement was partially offset by higher net unfavorable impacts in 2023 related to various changes in estimates for project charges, net of positive impacts from improved productivity and efficiencies on certain projects, which had an aggregate net negative impact of $117.2 million in 2023 compared to $96.8 million in 2022.
At December 31, 2022, included in current maturities of long-term debt in the accompanying Consolidated Balance Sheets is an expected $44.0 million prepayment of principal on the Term Loan B that will become due in the second quarter of 2023.
At December 31, 2023 and 2022, current maturities of long-term debt in the accompanying Consolidated Balance Sheets included $91.0 million and $44.0 million, respectively, of principal on the Term Loan B, relating to the mandatory prepayment provision of the 2020 Credit Agreement in respect of annual excess cash flow.
The significant revenue reductions experienced by some of our customers have adversely impacted their ability to pay the Company on a timely basis for amounts due, although these impacts have continued to moderate. Operating Results Consolidated revenue for 2022 was $3.8 billion compared to $4.6 billion for 2021.
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 moderated in 2023. Operating Results Consolidated revenue for 2023 was $3.9 billion, up slightly compared to $3.8 billion for 2022.
For more information regarding the terms of our 2020 Credit Agreement, refer to Note 7 of the Notes to Consolidated Financial Statements.
At December 31, 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 7 of the Notes to Consolidated Financial Statements.
The impact of the pandemic combined with certain political and other factors resulted in the Company not being awarded certain Civil segment projects totaling more than $10.0 billion despite having been the low or preferred bidder. Most of these projects impacted revenue in 2022 and are expected to be re-bid in 2023 or 2024.
In addition, customer budgetary constraints previously induced by COVID-19, 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.
In addition, the income from construction operations for both 2022 and 2021 were similarly unfavorably impacted by adjustments due to changes in estimates on the same transportation project in the Northeast ($15.7 million in 2022 and $13.3 million in 2021). Operating margin was 0.6% in 2022 compared to 2.0% in 2021.
In addition, income from construction operations for both 2023 and 2022 was similarly unfavorably impacted by adjustments due to changes in estimates on the Civil segment’s portion of a completed 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 closeout ($14.2 million in 2023 and $15.7 million in 2022).
Backlog for the Building segment was $2.2 billion as of December 31, 2022, down slightly compared to $2.3 billion as of December 31, 2021. The Building segment continues to have a large volume of prospective projects across various end markets and geographic locations.
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.
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.
Accordingly, the Company believes that this significant level of sustained, incremental funding has benefited, and will continue to favorably impact, the Company’s current work and prospective opportunities over the next decade. 23 Table of Contents 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.
Similarly, revenue declined 29% from $5.3 billion for 2020 to $3.8 billion for 2022, though there are other factors which contributed to the revenue decline, as discussed below. While the current impacts from the pandemic have lessened in 2022, the follow-on impact continues to limit our backlog and operating results.
Similarly, revenue declined from $5.3 billion in 2020 to $3.8 billion and $3.9 billion in 2022 and 2023, respectively, though there were other factors that contributed to the revenue decline since 2020 as discussed below.
Specialty Contractors Segment Revenue and loss from construction operations for the Specialty Contractors segment are summarized as follows: Year Ended December 31, (in millions) 2022 2021 Revenue $ 813.3 $ 1,118.0 Loss from construction operations (168.0) (10.0) Revenue for 2022 decreased 27% compared to 2021, primarily due to reduced project execution activities on the electrical and mechanical components of a transportation project in the Northeast that is nearing completion, reduced project execution activities on various other electrical and mechanical projects in the Northeast and California that are completed or nearing completion, as well as revenue reductions associated with the various unfavorable impacts discussed in the paragraph below.
Specialty Contractors Segment Revenue and loss from construction operations for the Specialty Contractors segment are summarized as follows: Year Ended December 31, (in millions) 2023 2022 Revenue $ 693.8 $ 813.3 Loss from construction operations (144.8) (168.0) Revenue for 2023 decreased 15% compared to 2022, principally due to reduced project execution activities on the electrical and mechanical components of a completed transportation project in the Northeast, 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 resulting from ongoing negotiations and the adverse legal ruling on an educational facilities project in New York.
We experienced substantially improved operating cash flows in 2022 compared to 2021 and expect strong operating cash flows to continue into 2023, based on projected cash collections, both from project execution activities and the resolution of additional outstanding claims and unapproved change orders .
We expect strong operating cash flow to continue in 2024, based on projected cash collections, both from project execution activities and the resolution of additional outstanding claims and unapproved change orders, including COVID-19-related cost recoveries from certain customers. We expect to benefit from the utilization of net operating loss carryforwards to reduce our cash outflows for income taxes.
The decrease in 2022 was principally due to the factors discussed above that drove the decrease in income (loss) from construction operations. Consolidated new awards in 2022 were $3.5 billion compared to $4.5 billion in 2021. The Civil and Building segments were the primary contributors to the new award activity in 2022.
Diluted loss per common share for 2023 was $3.30 compared to diluted loss per common share of $4.09 for 2022. The change in 2023 was primarily due to the factors discussed above that led to the change in loss from construction operations. Consolidated new awards in 2023 were $6.1 billion compared to $3.5 billion in 2022.
In addition, the income from construction operations for both 2022 and 2021 were similarly unfavorably impacted by adjustments due to changes in estimates on a transportation project in the Northeast ($15.7 million in 2022 and $13.3 million in 2021). Income from construction operations in 2022 was also negatively impacted due to the reduced revenue volume discussed above.
In addition, income (loss) from construction operations for both 2023 and 2022 was similarly unfavorably impacted by adjustments due to changes in estimates on the Building segment’s portion of the aforementioned completed 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 closeout ($14.2 million in 2023 and $15.7 million in 2022).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBorrowings under our 2020 Credit Agreement and certain other debt obligations have variable interest rates subject to interest rate risk. See Note 7 of the Notes to Consolidated Financial Statements for further discussion of our 2020 Credit Agreement. We had approximately $422.4 million and $453.9 million of borrowings with variable interest rates as of December 31, 2022 and 2021, respectively.
Biggest changeBorrowings under our 2020 Credit Agreement and certain other debt obligations have variable interest rates subject to interest rate risk. See Note 7 of the Notes to Consolidated Financial Statements for further discussion of our 2020 Credit Agreement. We had approximately $373.5 million and $422.4 million of borrowings with variable interest rates as of December 31, 2023 and 2022, respectively.
If short-term floating interest rates on these borrowings were to change by 0.50% and our variable indebtedness were to remain unchanged, interest expense would increase or decrease by approximately $2.1 million for the next twelve months. ITEM 8.
If short-term floating interest rates on these borrowings were to change by 0.50% and our variable indebtedness were to remain unchanged, interest expense would increase or decrease by approximately $1.9 million for the next twelve months. ITEM 8.

Other TPC 10-K year-over-year comparisons