<SEC-DOCUMENT>0001171843-16-008762.txt : 20160324
<SEC-HEADER>0001171843-16-008762.hdr.sgml : 20160324
<ACCEPTANCE-DATETIME>20160324100015
ACCESSION NUMBER:		0001171843-16-008762
CONFORMED SUBMISSION TYPE:	ARS
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20151231
FILED AS OF DATE:		20160324
DATE AS OF CHANGE:		20160324
EFFECTIVENESS DATE:		20160324

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			STERLING CONSTRUCTION CO INC
		CENTRAL INDEX KEY:			0000874238
		STANDARD INDUSTRIAL CLASSIFICATION:	HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600]
		IRS NUMBER:				251655321
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		ARS
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31993
		FILM NUMBER:		161525910

	BUSINESS ADDRESS:	
		STREET 1:		2751 CENTERVILLE RD.
		STREET 2:		SUITE 3131
		CITY:			WILMINGTON
		STATE:			DE
		ZIP:			19803
		BUSINESS PHONE:		3024789170

	MAIL ADDRESS:	
		STREET 1:		20810 FERNBUSH LANE
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77073

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	OAKHURST CO INC
		DATE OF NAME CHANGE:	19950831

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	OAKHURST CAPITAL INC
		DATE OF NAME CHANGE:	19931130
</SEC-HEADER>
<DOCUMENT>
<TYPE>ARS
<SEQUENCE>1
<FILENAME>ars_032116.htm
<DESCRIPTION>FORM ARS
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in"><img src="logo.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in"><FONT STYLE="font-variant: small-caps"><B>Annual
Report for the Year Ended December 31, 2015</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><B>Dear Fellow Shareholders,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">2015 was a year of rebuilding
for Sterling Construction during which we accomplished many of the goals we set for ourselves when we began executing the turnaround.
While we still have work ahead of us to deliver the kind of performance we know this Company is capable of achieving, we have taken
a number of important steps to ensure improved performance and consistent profitability. One of those steps involved significantly
strengthening the senior management team. With our team now firmly in place, we have leadership with the experience, commitment
and successful track record to deliver positive results in 2016 and beyond.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">Safety performance is one of
the most critical measures of management&rsquo;s effectiveness, and we are pleased to report that our safety performance improved
throughout 2015. Our Lost Time and Recordable Injuries were down by more than 13% compared to 2014. We continue to put substantial
focus on safety not only because it is the right thing to do for our employees, but also because it ultimately leads to a stronger
company and markedly improved financial performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">During 2015 we focused less
on top line growth and more on improving bottom line profitability. The first step involved tightening our procedures and controls
for project selection, estimating, execution and contract administration. As a result, we experienced significantly improved gross
margins and earnings for the second half of the year in spite of a decrease of approximately $50 million in revenue compared to
2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">Our more stringent requirements
for new project selection and estimating also led to materially higher gross margins in projects added to backlog during the second
half of the year. Our backlog at the end of 2015, along with new awards earned between the beginning of 2016 and the date of this
letter totaled a record high of more than $950 million with an average margin of 8%. As a result, we anticipate significantly improved
earnings in 2016 and 2017 relative to recent years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">As to our capitalization and
liquidity, in May 2015 we replaced our conventional line of credit with an Asset Based Lending (ABL) facility, freeing us from
the debt covenants of our previous facility and allowing us to better focus on our operational turnaround efforts. The 12% interest
rate on the new ABL was a disappointing consequence of that effort; however, with improved financial performance in 2016, we hope
to progress to a more traditional banking facility. During the past year we monetized surplus assets including equipment and real
estate, to strengthen our balance sheet and provide improved liquidity and greater financial flexibility. These changes provide
a more solid foundation to grow our Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">We have additional opportunities
for balance sheet improvement, including optimizing our equipment fleet and material procurement, and better management of working
capital invested in our contracts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">With regard to our business
environment and industry, we are greatly encouraged by the much increased investments being made at the federal, state and municipal
levels to restore our nation&rsquo;s vital infrastructure. These long overdue investments are critical to the economic development
of our country, and have created a tailwind of growth for our industry. Sterling is now very well positioned to capitalize on the
many project opportunities expected to arise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">We are pleased that our stock
price has rebounded from its low of $2.41 in early in 2015 to its current pricing, reflecting the progress we have made. We are
committed to realizing the financial potential of our business in the years to come, and expect this to drive increasing value
for our shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">We wish to take this opportunity
to thank our shareholders, our committed employees, customers, lenders, surety and other stakeholders for their continued support
as we continue to build on our business turnaround. We look forward to producing meaningful financial results in 2016 and beyond.
While 2015 was certainly a transitional year, we are confident that we have built a foundation for sustained earnings growth well
into the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">Sincerely,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%">Paul J. Varello</TD>
    <TD STYLE="width: 50%">Milton L.
Scott</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>Chief Executive Officer</TD>
    <TD>Chairman
of the Board</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">The Woodlands, Texas</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">March 24, 2016</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>



<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 2pt 0.25in"></P>

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<table cellspacing="0" cellpadding="0" style="font-size: 10pt; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td colspan="3">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 3pt 0.25in"><b>UNITED STATES</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>SECURITIES AND EXCHANGE COMMISSION</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>Washington, D.C. 20549</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 2pt 0.25in"><b>FORM 10-K</b></P></td></tr>
<tr style="vertical-align: top">
    <td colspan="3">
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 3pt 0.25in"><b>[X] <font style="font-variant: small-caps">annual
        report pursuant to section 13 or 15(</font>d<font style="font-variant: small-caps">) of the securities exchange act of
        1934</font></b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>For the fiscal year ended: December
        31, 2015</b></P></td></tr>
<tr style="vertical-align: top">
    <td colspan="3">
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 3pt 0.25in"><font style="font-variant: small-caps"><b>[ &nbsp;]
        transition         report pursuant to section 13 or 15(</b></font><b>d<font style="font-variant: small-caps">) of the
        securities exchange act of 1934</font></b></P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">For the transition period from _______________________to
        ________________________________</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="3" style="font-size: 10pt; layout-grid-mode: both">Commission file number <b>1-31993</b></td></tr>
<tr style="vertical-align: top">
    <td colspan="3">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 5pt 0 0 0.25in"><b>STERLING CONSTRUCTION COMPANY,
        INC.</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">(Exact name of registrant as specified
        in its charter)</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="2">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>Delaware</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">State or other jurisdiction of</P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">incorporation or organization</P></td>
    <td>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>25-1655321</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">(I.R.S. Employer</P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">Identification No.)</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="2">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>1800 Hughes Landing Blvd. </b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>The Woodlands, Texas</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 3pt 0.25in">(Address of principal executive offices)</P></td>
    <td>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>&nbsp;</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>77380</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 3pt 0.25in">(Zip Code)</P></td></tr>
<tr>
    <td colspan="3" style="text-align: center; font-size: 10pt; layout-grid-mode: both">Registrant&rsquo;s telephone number, including area code <b>(281) 214-0800</b></td></tr>
<tr style="vertical-align: top">
    <td>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Securities registered pursuant to Section 12(b) of the Act:</P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 2pt 0.25in">Title of each class</P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>Common Stock, $0.01 par value per
        share</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 2pt 0.25in">(Title of Class)</P></td>
    <td colspan="2">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 2pt 0.25in">Name of each exchange on which registered</P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>The NASDAQ Stock Market LLC</b></P></td></tr>
<tr style="vertical-align: top">
    <td colspan="3">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">Securities registered pursuant to section
        12(g) of the Act:</P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">None</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="3">
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 2pt 0.25in">Indicate by check mark if the registrant is a well-known
        seasoned issuer, as defined in Rule 405 of the Securities Act.</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 2pt 0.25in">[ ] Yes [<b>&radic;</b>] No</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="3">
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 2pt 0.25in">Indicate by check mark if the registrant is not required
        to file reports pursuant to Section 13 or Section 15(d) of the Act.</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 2pt 0.25in">[ ] Yes [<b>&radic;</b>] No</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="3">
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Indicate by check mark whether the registrant (1) has filed
        all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
        for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
        for the past 90 days.</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">[<b>&radic;</b>] Yes [ ] No</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="3">
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Indicate by check mark whether the registrant has submitted
        electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant
        to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter prior that the registrant was required to submit
        and post such files).</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">[<b>&radic;</b>] ] Yes [ ] No</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Indicate by check mark if disclosure of delinquent filers
        pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant&rsquo;s knowledge,
        in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
        Form 10-K [<b>&radic; </b>]</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="3">
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Indicate by check mark whether the registrant is a large
        accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of &ldquo;large
        accelerated filer,&rdquo; &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo; in Rule 12b-2 of the Exchange
        Act.</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Large accelerated filer [ ] Accelerated filer [<font style="font-size: 10pt"><b>&radic;</b></font>]</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Non-accelerated filer [ ] <font style="font-size: 10pt">(Do
        not check if a smaller reporting company) </font>Smaller reporting company [<font style="font-size: 10pt"><b> </b></font>]</P></td></tr>
<tr style="vertical-align: top">
    <td colspan="3" style="font-size: 10pt; layout-grid-mode: both"><font style="font-size: 10pt">Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Act). [&nbsp;&nbsp;&nbsp;] Yes&nbsp;&nbsp;[<b>&radic;</b>] No</font></td></tr>
<tr style="vertical-align: top">
    <td colspan="3" style="font-size: 10pt; layout-grid-mode: both"><font style="font-size: 10pt">Aggregate market value of the voting and non-voting common equity held by non-affiliates at June 30, 2015: $74,202,960.</font></td></tr>
<tr style="vertical-align: top">
    <td colspan="3" style="font-size: 10pt; layout-grid-mode: both"><FONT STYLE="font-size: 10pt">At March
4, 2016, the registrant had 19,773,170 shares of common stock outstanding.</FONT>


</td></tr>
<tr>
    <td style="width: 47%">&nbsp;</td>
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 52%">&nbsp;</td></tr>
</table>
<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">DOCUMENTS INCORPORATED BY REFERENCE</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 2pt 0.25in">Portions of the Company&rsquo;s definitive Proxy Statement
to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of
Stockholders to be held on May 6, 2016 are incorporated by reference into Part III of this Form 10-K.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 2pt 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 2pt 0.25in"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 2pt 0.25in"></P>

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<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 2pt 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 2pt 0.25in"><FONT STYLE="font-variant: small-caps"><B>Sterling
Construction Company, Inc.</B></FONT></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 2pt 0.25in"><FONT STYLE="font-variant: small-caps"><B>Annual
Report on Form 10-K</B></FONT></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><FONT STYLE="font-variant: small-caps"><B>Table
of Contents</B></FONT></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><FONT STYLE="font-variant: small-caps"></FONT></P>

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<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><FONT STYLE="font-variant: small-caps">&nbsp;</FONT></P>



<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%">
<TR STYLE="text-align: left; vertical-align: bottom; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase">
    <TD STYLE="width: 90%; text-align: left; text-indent: -31.5pt; padding-top: 0.25in; padding-bottom: 0pt; padding-left: 31.5pt">PART I</TD>
    <TD STYLE="width: 10%; text-align: right; padding-top: 0.25in; padding-bottom: 0pt">&nbsp;</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i1">Item 1. Business</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i1">4</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i1a">Item 1A. Risk Factors</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i1a">11</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i1b">Item 1B. Unresolved Staff Comments</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i1b">18</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i2">Item 2. Properties</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i2">18</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i3">Item 3. Legal Proceedings</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i3">19</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i4">Item 4. Mine Safety Disclosures</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i4">19</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 0.25in; padding-bottom: 0pt; padding-left: 31.5pt">PART II</TD>
    <TD STYLE="text-align: right; padding-top: 0.25in; padding-bottom: 0pt">&nbsp;</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i5">Item 5. Market for the Registrant&rsquo;s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i5">21</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i6">Item 6. Selected Financial Data</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i6">23</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i7">Item 7. Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i7">24</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i7a">Item 7A. Quantitative and Qualitative Disclosures about Market Risk</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i7a">36</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i8">Item 8. Financial Statements and Supplementary Data</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i8">36</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i9">Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i9">36</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i9a">Item 9A. Controls and Procedures</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i9a">37</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i9b">Item 9B. Other Information</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i9b">38</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 0.25in; padding-bottom: 0pt; padding-left: 31.5pt">PART III</TD>
    <TD STYLE="text-align: right; padding-top: 0.25in; padding-bottom: 0pt">&nbsp;</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i10">Item 10. Directors, Executive Officers and Corporate Governance of the Registrant</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i10">39</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i11">Item 11. Executive Compensation</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i11">39</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i12">Item 12. Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i12">39</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i13">Item 13. Certain Relationships and Related Transactions, and Director Independence</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i13">39</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i14">Item 14. Principal Accountant Fees and Services</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i14">39</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 0.25in; padding-bottom: 0pt; padding-left: 31.5pt">PART IV</TD>
    <TD STYLE="text-align: right; padding-top: 0.25in; padding-bottom: 0pt">&nbsp;</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#i15">Item 15. Exhibits and Financial Statement Schedules</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#i15">40</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#finsc">Financial Statement Schedules</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#finsc">40</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#exh">Exhibits</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#exh">40</A></TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -31.5pt; padding-top: 6pt; padding-bottom: 0pt; padding-left: 31.5pt"><A HREF="#sign">Signatures</A></TD>
    <TD STYLE="text-align: right; padding-top: 6pt; padding-bottom: 0pt"><A HREF="#sign">43</A></TD></TR>
</TABLE>
<P STYLE="font-size: 10pt; text-align: justify; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in"></P>

<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"><FONT STYLE="font-variant: small-caps">PART I</FONT></P>

<P STYLE="font-size: 10pt; text-indent: -9pt; margin: 0 0 0 9pt"><B>Cautionary Comment Regarding Forward-Looking Statements</B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">This Report includes statements that are,
or may be considered to be, &ldquo;forward-looking statements&rdquo; within the meaning of Section 27A of the Securities Act of
1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
These forward-looking statements are included throughout this Report, including in the sections entitled &ldquo;Business,&rdquo;
&ldquo;Risk Factors,&rdquo; and &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo;
and relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations,
margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. We
have used the words &ldquo;anticipate,&rdquo; &ldquo;assume,&rdquo; &ldquo;believe,&rdquo; &ldquo;budget,&rdquo; &ldquo;continue,&rdquo;
&ldquo;could,&rdquo; &ldquo;estimate,&rdquo; &ldquo;expect,&rdquo; &ldquo;forecast,&rdquo; &ldquo;future,&rdquo; &ldquo;intend,&rdquo;
&ldquo;may,&rdquo; &ldquo;plan,&rdquo; &ldquo;potential,&rdquo; &ldquo;predict,&rdquo; &ldquo;project,&rdquo; &ldquo;should,&rdquo;
&ldquo;will,&rdquo; &ldquo;would&rdquo; and similar terms and phrases to identify forward-looking statements in this Report.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Forward-looking statements reflect our
current expectations as of the date of this Report regarding future events, results or outcomes. These expectations may or may
not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition,
our business and operations involve numerous risks and uncertainties, many of which are beyond our control, that could result in
our expectations not being realized or otherwise could materially affect our financial condition, results of operations and cash
flows.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Actual events, results and outcomes may
differ materially from our expectations due to a variety of factors. Although it is not possible to identify all of these factors,
they include, among others, the following:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">changes in general economic conditions, including recessions, reductions in federal, state and
local government funding for infrastructure services and changes in those governments&rsquo; budgets, practices, laws and regulations;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">delays or difficulties related to the completion of our projects, including additional costs, reductions
in revenues or the payment of liquidated damages, or delays or difficulties related to obtaining required governmental permits
and approvals;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">actions of suppliers, subcontractors, design engineers, joint venture partners, customers, competitors,
banks, surety companies and others which are beyond our control, including suppliers&rsquo;, subcontractors&rsquo; and joint venture
partners&rsquo; failure to perform;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">factors that affect the accuracy of estimates inherent in our bidding for contracts, estimates
of backlog, percentage-of-completion accounting policies, including onsite conditions that differ materially from those assumed
in our original bid, contract modifications, mechanical problems with our machinery or equipment and effects of other risks discussed
in this document;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">design/build contracts which subject us to the risk of design errors and omissions;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">cost escalations associated with our contracts, including changes in availability, proximity and
cost of materials such as steel, cement, concrete, aggregates, oil, fuel and other construction materials, and cost escalations
associated with subcontractors and labor;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our dependence on a limited number of significant customers;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">adverse weather conditions; although we prepare our budgets and bid contracts based on historical
rain and snowfall patterns, the incidence of rain, snow, hurricanes, etc., may differ materially from these expectations;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the presence of competitors with greater financial resources or lower margin requirements than
ours, and the impact of competitive bidders on our ability to obtain new backlog at reasonable margins acceptable to&nbsp;us;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our ability to successfully identify, finance, complete and integrate acquisitions;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">citations issued by any governmental authority, including the Occupational Safety and Health Administration;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">federal, state and local environmental laws and regulations where non-compliance can result in
penalties and/or termination of contracts as well as civil and criminal liability;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">adverse economic conditions in our markets; and</TD></TR></TABLE>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the other factors discussed in more detail in Item 1A. &mdash;Risk Factors.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In reading this Report, you should consider
these factors carefully in evaluating any forward-looking statements and you are cautioned not to place undue reliance on any forward-looking
statements. Although we believe that our plans, intentions and expectations reflected in, or suggested by, the forward-looking
statements that we make in this Report are reasonable, we can provide no assurance that they will be achieved.</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"><I>The forward-looking statements included
in this Report are made only as of the date of this Report, and we undertake no obligation to update any information contained
in this Report or to publicly release the results of any revisions to any forward-looking statements to reflect events or circumstances
that occur, or that we become aware of after the date of this Report, except as may be required by applicable securities laws.</I></P>

<P STYLE="font-size: 10pt; font-weight: bold; margin: 6pt 0pt"></P>

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<P STYLE="font-size: 10pt; font-weight: bold; margin: 6pt 0pt"><A NAME="i1"></A>Item 1. Business.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Overview of the Company&rsquo;s Business. </I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Sterling Construction Company, Inc. was
founded in 1991 as a Delaware corporation. Our principal executive offices are located at 1800 Hughes Landing Boulevard, Suite
250, The Woodlands, Texas 77380, and our telephone number at this address is (281) 214-0800. Our construction business was founded
in 1955 by a predecessor company in Michigan and is now conducted through our subsidiaries which primarily include: Texas Sterling
Construction Co., a Delaware corporation, or &ldquo;TSC&rdquo;; Road and Highway Builders, LLC, a Nevada limited liability company,
or &ldquo;RHB&rdquo;; Road and Highway Builders of California, Inc., a California corporation, or &ldquo;RHBCa&rdquo;; Ralph L.
Wadsworth Construction Company, LLC, a Utah limited liability company, or &ldquo;RLW&rdquo;; J. Banicki Construction, Inc., an
Arizona corporation, or &ldquo;JBC&rdquo;;&nbsp;and Myers &amp; Sons Construction, L.P., a California limited partnership, or &ldquo;Myers&rdquo;.
The terms &ldquo;Company,&rdquo; &ldquo;Sterling,&rdquo; and &ldquo;we&rdquo; refer to Sterling Construction Company, Inc. and
its subsidiaries except when it is clear that those terms mean only the parent company or a particular subsidiary.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Sterling is a leading heavy civil construction
company that specializes in the building and reconstruction of transportation and water infrastructure projects in Texas, Utah,
Nevada, Colorado, Arizona, California, Hawaii and other states in which there are construction opportunities. Its transportation
infrastructure projects include highways, roads, bridges, airfields, ports and light rail. Its water infrastructure projects include
water, wastewater and storm drainage systems.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Although we describe our business in this
Report in terms of the services we provide, our base of customers and the geographic areas in which we operate, we have concluded
that our operations consist of one reportable segment, one operating segment and one reporting unit component, which is heavy civil
construction. In making this determination, the Company considered the discrete financial information used by our Chief Operating
Decision Maker (&ldquo;CODM&rdquo;). Based on this approach, the Company noted that the CODM organizes, evaluates and manages the
financial information around each heavy civil construction project when making operating decisions and assessing the Company&rsquo;s
overall performance. Furthermore, we considered that each heavy civil construction project has similar characteristics, includes
similar services, has similar types of customers and is subject to similar economic and regulatory environments.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Sterling has grown its service profile
and geographic reach both organically and through acquisitions. Expansions into Utah, Arizona and California were achieved with
the 2009 acquisition of RLW and the 2011 acquisitions of JBC and Myers, respectively. These acquisitions also extended Sterling&rsquo;s
service profiles.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Recent Developments.</I></B></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Financial Results for 2015, Operational Issues and
Outlook for 2016 Financial Results.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0 0 2pt">In 2015, the Company had an operating loss
of $14.4 million and net loss attributable to Sterling common stockholders of $20.4 million. Our gross margins have decreased to
4.6% in 2015 from 4.8% in 2014 and increased from (5.4)% in 2013. In 2015, particularly in the first quarter, our gross margins
were adversely impacted by downward revisions to estimated profitability on projects primarily awarded in Texas. These downward
revisions were primarily related to projects which are now substantially complete.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The majority of our revenues and backlog
is derived from fixed unit price contracts. Some of our revenues are derived from lump sum contracts. Fixed unit price contracts
require us to provide materials and services at a fixed unit price based on approved quantities irrespective of our actual per
unit costs. Lump sum contracts require that the total amount of work be performed for a single price irrespective of our actual
costs. As discussed in &ldquo;Item 1A. Risk Factors,&rdquo; we realize a profit on our contracts only if we accurately estimate
our costs and then successfully control actual costs and avoid cost overruns, and our revenues exceed actual costs. If our cost
estimates for a contract are inaccurate, or if we do not execute the contract within our cost estimates, then cost overruns may
cause the contract not to be as profitable as we expected or result in a loss, negatively affecting our cash flow, earnings and
financial position.</P>

<P STYLE="margin: 5pt 0 2pt; font-size: 10pt; text-align: justify; text-indent: 0.25in">While the risks of cost overruns and changes
in estimated contract revenues are an inherent part of the construction business, we continue to implement the following to improve
the profitability of our projects, reduce the variability in profitability of our projects in the future and strengthen our internal
control environment:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">We continue to change roles and responsibilities
to improve functional support and controls when needed.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">We continue to hire senior management with expertise
and experience in the construction industry.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">We continue to develop management tools designed
to improve the estimating process and increase the oversight of that process where needed and continue to refine existing tools.</FONT></TD>
</TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">We continue to implement processes designed to better
identify, evaluate and quantify risks for individual projects where needed and continue to refine existing processes.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">We continue to improve the methodologies for allocating
overhead, indirect costs and equipment costs to individual projects in order to provide more accurate job costs and future bidding
estimates.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">We continue to improve the timeliness and content
of reporting available to operations management.</FONT></TD>
</TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In addition to the factors discussed above
which impact the profitability on individual projects, there are other factors which have adversely affected our ability to secure
construction projects at favorable margins. Our highway and related bridge work is generally funded through federal and state
authorizations. In recent years, federal and state legislation related to infrastructure spending has been slow to pass. Funding
for federal highway projects primarily originate from the Highway Trust Fund where federal motor fuel taxes are the major source
of income into the fund. Additional income is provided from the General fund and certain other funds to maintain the solvency
of the fund as finding sources of income have historically been challenging. In the later part of 2015, this trend improved as
we saw the passage of federal, and several state, infrastructure funding plans. <FONT STYLE="font-size: 10pt">Refer to the section
below entitled, &ldquo;Our Markets and Customers,&rdquo; for additional information on the federal and state funding initiatives
in our markets. Our backlog has remained essentially flat: $764 million at December 31, 2014 to $761 million at December 31, 2015,
representing sufficient work to be bid on within our markets with acceptable gross margins. Additionally, we experienced an increase
in low bid awards that are not officially awarded as contracts (&ldquo;Unsigned Low-bid Awards&rdquo;), which were $197 million
at the end of 2015 compared to $24 million at the end of 2014. We expect substantially all of the $197 million of Unsigned Low-bid
Awards to be signed and included in backlog in the first quarter of 2016. In addition to highway and related bridge work, we continually
look for projects that diversify our book of projects to relieve the continued pressure on our gross margins related to new contract
awards from local, state and federal authorities.</FONT></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Our Markets and Customers</I></B><I>. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Currently, all of our operations, which
resulted in $624 million of revenues in 2015, are performed under our heavy civil construction segment and within the United States
(&ldquo;U.S.&rdquo;). As such, we rely heavily on federal and state infrastructure spending. Within the U.S., our principal markets
are Texas, California, Utah, Nevada, Colorado, Arizona and Hawaii. Within our principal markets, our core customers are the departments
of transportation in various states (&ldquo;DOTs&rdquo;), regional transit authorities, airport authorities, port authorities,
water authorities and railroads. Refer to Note 16 to the consolidated financial statements (references to &ldquo;Note&rdquo; or
&ldquo;Notes&rdquo; refer to the Notes to the consolidated financial statements for the year ended December&nbsp;31, 2015, included
in this document), for the Company&rsquo;s major customers that represent a concentration of risk due to their significant revenue
contributions.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The U.S. transportation construction market
is forecasted to grow from $200.5 billion in 2015 to $208.3 billion in 2016. This increase is largely driven by the federal &ldquo;Fixing
Americas Surface Transportation Act&rdquo; (&ldquo;Fast Act&rdquo;). The Fast Act is the first law enacted in over ten years that
provides long-term funding for transportation, meaning states can move forward with critical projects with confidence as they
will now have a Federal partner over the long term. During this period, spending on highways, streets and related work is forecasted
to grow from $55.9 billion to $58.1 billion; bridges and tunnels will grow from $33.3 billion to $34.6 billion; airports and runways
are forecasted to grow from $12.9 billion to $14.3 billion; ports and waterways will remain flat at $2.3 billion; and rail/light
rail will decline slightly from $21.3 billion to $21.1 billion. In addition to the Fast Act, Texas has passed two constitutional
amendments (Proposition 1 and Proposition 7) that will increase its transportation spend by $4.0 to $4.5 billion annually. Utah
has passed a gas tax increase of five cents/gallon in 2016 with an additional one cent per gallon increase over the next four
years. This represents a 20% increase and is expected to generate $75 to $85 million in additional spending per year.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 5pt 0 2pt"><B><I>Competition.</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our competition ranges from small local
contractors to large international construction companies. We traditionally try to position ourselves to bid on work that is too
large for the small local contractors yet too small for the large international construction companies. However, if market conditions
became less favorable, we tend to see migration from both the small local contractors and large international players into our
bids. This in return reduces both revenue growth and margins.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Seasonality.</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our operations are typically affected
by weather conditions during the first and fourth quarters of our fiscal year, which may alter construction schedules and can
create variability in our revenues, profitability and the required number of employees.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"></P>

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<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Backlog</I></B><I>.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Backlog is the revenue we expect to earn
in future periods on our construction projects. However, Unsigned Low-bid Awards are excluded from backlog until the contract is
executed by our customer. As the construction on our projects progresses, we increase or decrease backlog to take into account
our estimates of the effects of changes in estimated quantities, changed conditions, change orders and other variations from initially
anticipated contract revenues, including completion penalties and incentives. At December 31, 2015, our backlog was $761 million
and our Unsigned Low-bid Awards were $197 million.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Substantially all of the contracts in our
contract backlog may be canceled at the election of the customer; however, we have not been materially adversely affected by contract
cancellations or modifications in the past. See the section below entitled, &ldquo;Contracts&nbsp;&mdash; Contract Management Process.&rdquo;</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Construction Delivery Methods</I></B><I>.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Alternative construction delivery methods
describe different contractual and responsibility relationships among the owner, the builder and the designer of a project. There
are three primary construction delivery methods: design-bid-build, design-build and construction management.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The traditional method by which the majority
of our projects have historically been completed is design-bid-build. Under this type of construction delivery, the owner hires
a design engineer to design the project and then solicits bids from construction firms and typically awards the contract to build
the pre-designed project to the lowest qualifying bidder. The contractor to whom the project is awarded becomes the general contractor
and is responsible for completing the project in accordance with the owner&rsquo;s designs using the contractor&rsquo;s own employees
or resources, or subcontractors. Projects under this method are typically fixed unit price contracts.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Design-build is sometimes used by public
entities as a method of project delivery. Unlike traditional projects where the owner first hires a design firm or designs a project
itself and then puts the project out to bid for construction, design-build projects provide the owner with a single point of responsibility
and a single contact for both final design and construction. The owner selects a builder who hires the design team as required
and construction typically starts before the design is complete. This project delivery method is typically undertaken through either
fixed unit price contracts or lump sum contracts, and price is not the only determining factor used by the owner when selecting
a particular contractor.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Construction management is a newer method
of delivering a project whereby a contractor agrees to manage a project for the owner for an agreed-upon fee, which may be fixed
or may vary based upon negotiated factors. The owner of the project typically hires the contractor as a construction manager early
in the design phase of the project. The construction manager works with the design team to help ensure that the design is something
that can in fact be built within the owner&rsquo;s desired cost and other parameters and that the ultimate construction contractor
will be able to understand the design drawings and specifications. There are two basic types of construction management: construction
manager as advisor and construction manager at risk. In the construction manager as advisor type of arrangement, the construction
manager acts as a technical consultant to the owner of the project and has no legal responsibility for the performance of the actual
construction work. In the construction manager at risk type of arrangement, the construction manager becomes the prime contractor
during the construction phase and makes a determination as to which portions of the work will be self-performed and which will
be performed through subcontracts. In either type of construction management process, portions of a project are often submitted
for bid during the course of the construction manager relationship, with the construction manager bidding, and oftentimes having
the first right to bid, on portions of the project.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Contracts.</I></B></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Types of Contracts.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We provide our services primarily by using
traditional general contracting arrangements, including fixed-unit price contracts, lump sum contracts and cost-plus contracts.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Fixed unit price contracts are generally
used in competitively-bid public civil construction contracts. Contractors under fixed unit price contracts are generally committed
to provide all of the resources required to complete the contract for a fixed price per unit. These contracts are generally subject
to negotiated change orders, frequently due to differences in site conditions from those initially anticipated or asserted by the
customer. Some fixed unit price contracts provide for penalties, if the contract is not completed on time, or incentives, if it
is completed ahead of schedule.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Under a lump sum contract, the contractor
typically agrees to deliver a completed project in accordance with the contract&rsquo;s requirements for a specific price, and
the customer agrees to pay the price according to a negotiated payment schedule. In developing a lump sum bid, the contractor estimates
the costs of labor, subcontracts and materials and adds an amount for overhead and profit. The amount of the profit included in
the bid is based on the contractor&rsquo;s assessment of risk and other factors such as availability of resources. If the actual
costs of labor, subcontracts, materials and overhead are higher than the contractor&rsquo;s estimate, the profit will be reduced
or become a loss; if the actual costs are lower, the contractor may earn more profit.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In a cost plus contract, the owner of a
project generally agrees to pay the cost of all of the contractor&rsquo;s labor, subcontracts and materials plus an amount for
contractor overhead and profit (usually as a percentage of the labor, subcontracts and material cost). If actual costs are lower
than the estimate, the owner benefits from the cost savings. If actual costs are higher than the estimate, the owner bears the
economic burden of the additional costs.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Contract Management Process.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We identify potential contracts from a
variety of sources, including through subscriber services that notify us of contracts out for bid; through advertisements by federal,
state and local governmental entities; through our business development efforts; through contacts at government agencies; and through
meetings with other participants in the construction industry. After determining which contracts are available, we decide which
contracts to pursue based on such factors as the relevant skills required, the contract size and duration, the availability of
our personnel and equipment, the size and makeup of our current backlog, our competitive advantages and disadvantages, prior experience,
the contracting agency or customer, the source of contract funding, geographic location, likely competition, construction risks,
gross margin opportunities, penalties or incentives and the type of contract.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">As a condition to pursuing some contracts,
we are required to complete a prequalification process with the applicable agency or customer. Some customers, such as state departments
of transportation, require yearly prequalification, and some other customers have experience requirements specific to the contract.
The prequalification process generally limits bidders to those companies with the operational experience and financial capability
to effectively complete the particular contract in accordance with the plans, specifications and construction schedule.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">There are several factors that can create
variability in contract performance and financial results compared to our bid assumptions on a contract. The most significant of
these include the completeness and accuracy of our original bid analysis, recognition of costs associated with added scope changes,
extended overhead due to customer and weather delays, subcontractor availability and performance issues, changes in productivity
expectations, site conditions that differ from those assumed in the original bid, and changes in the availability and proximity
of materials. In addition, our original bids for some contracts are based on the contract customer&rsquo;s estimates of the quantities
needed to complete a contract. If the quantities ultimately needed are different, our backlog and financial performance on the
contract will change. All of these factors can lead to inefficiencies in contract performance, which can increase costs and lower
profits. Conversely, if any of these or other factors is more favorable than the assumptions in our bid, contract profitability
can improve. Design-build projects carry additional risks such as design error risk and the risk associated with estimating quantities
and prices before the project design is completed. Design errors may result in higher than anticipated construction costs and additional
liability to the contract owner. Although we manage this additional risk by adding contingencies to our bid amounts, obtaining
errors and omissions insurance and obtaining indemnifications from our design consultants where possible, there is no guarantee
that these risk management strategies will always be successful. Generally, gross margins included in bids on design-build contracts
are higher than for other types of contracts due to the higher risks involved.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The estimating process for our traditional
fixed unit price competitive bid contracts typically involves three phases. Initially, we consider the level of anticipated competition
and our available resources for the prospective project. If we then decide to continue considering a project, we undertake the
second phase of the contract process and spend several weeks performing a detailed review of the plans and specifications, summarizing
the various types of work involved and related estimated quantities, determining the contract duration and schedule and highlighting
the unique and riskier aspects of the contract. Concurrent with this process, we estimate the cost and availability of labor, material,
equipment, subcontractors and the project team required to complete the contract on time and in accordance with the plans and specifications.
Substantially all of our estimates are made on a per-unit basis for each line item, and it is not unusual for an estimate to contain
over 300 line items. The final phase consists of a detailed review of the estimate by management, including, among other things,
assumptions regarding cost, approach, means and methods, productivity, risk and the estimated profit margin. This profit amount
will vary according to management&rsquo;s perception of the degree of difficulty of the contract, the current competitive climate
and the size, availability of resources and makeup of our backlog. Our project managers are intimately involved throughout the
estimating and construction process so that contract issues, and risks, can be understood and addressed generally on a timely basis.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Although the factors described above are
relevant in determining the appropriate amount to bid, the contracting process is managed differently if the project is to be performed
on a design-build basis or a CM/GC basis. For design-build projects, we assemble a team that may include project managers, engineers,
quality managers and surveyors, to learn about a project that we have identified as one on which we may desire to bid. For some
projects, pre-qualification for the project is required where each contractor and/or contracting team prepares a description of
financial strengths, past experience on similar types of projects, safety record and the persons who will be on the project management
and design team, after which, the customer will usually announce a short list of three to five contractors to respond to a request
for proposal, generally within three months. Utilizing the limited design specifications provided by the customer, we generally
meet weekly over a two to three month period with design engineers to generate a bid containing quantities, prices, timing and
a description of our approach for completing the project. The customer then reviews the bids and selects the one that has the best
value, and considers factors such as contractor qualifications, the time estimated to complete the project and the price bid.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">For our CM/GC projects, the customer typically
sends out a request for proposal to general contractors for a project. The customer scores each contractor that submits a bid based
on the unit prices submitted for five to twenty items that comprise approximately 10% to 20% of the project design, the profit
margin proposed, the experience of the contractor for similar types of projects, the contractor&rsquo;s approach to completing
the specific project and whether the contractor understands the CM/GC process. A committee reviews each bid and determines the
best value winner to be the general contractor. If we are the winning general contractor, we work with the customer and the engineer
to design the project. As various phases of the project are designed, we usually submit bids to construct phases of the project
for which we are qualified. In some situations, we also solicit bids from other construction contractors. If we are the lower bidder,
we are awarded a contract for that phase. In other situations, if our bid is close to the cost estimates determined by the customer
and the engineer, then we will generally be awarded the contract for a particular phase; otherwise, the customer negotiates with
us on an appropriate contract price; and if those negotiations are not successful, then the customer can terminate our contract.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">To manage risks of changes in material
prices and subcontracting costs used in tendering bids for construction contracts, we generally obtain firm price quotations from
our suppliers and subcontractors, except for fuel and trucking, before submitting a bid. For fixed unit price contracts, these
quotations do not include any quantity guarantees, and we have no obligation for materials or subcontract services beyond those
required to complete the respective contracts that we are awarded for which quotations have been provided. For design-build and
CM/GC projects, lump sum subcontracts are often executed with subcontractors.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During the construction phase of a contract,
we monitor our progress by comparing actual costs incurred and quantities completed to date with budgeted amounts and the contract
schedule, and periodically prepare an updated estimate of total forecasted revenue, cost and expected profit for the contract.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During the normal course of most contracts,
the customer, and sometimes the contractor, initiates modifications or changes to the original contract to reflect, among other
things, changes in quantities, specifications or design, method or manner of performance, facilities, materials, site conditions
and the period for completion of the work. In many cases, final contract quantities may differ from those specified by the customer.
Generally, the scope and price of these modifications are documented in a &ldquo;change order&rdquo; to the original contract and
reviewed, approved and paid in accordance with the normal change order provisions of the contract. We are often required to perform
extra or change order work under our fixed unit price contracts as directed by the customer even if the customer has not agreed
in advance on the scope or price of the work to be performed. This process may result in disputes over whether the work performed
is beyond the scope of the work included in the original contract plans and specifications or, even if the customer agrees that
the work performed qualifies as extra work, the price that the customer is willing to pay for the extra work. These disputes may
not be settled to our satisfaction. Even when the customer agrees to pay for the extra work, we may be required to fund the cost
of the work for a lengthy period of time until the change order is approved and funded by the customer. In addition, any delay
caused by the extra work may adversely impact the timely scheduling of other work on the contract (or on other contracts) and our
ability to meet contract milestone dates.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The process for resolving contract claims
varies from one contract to another but, in general, we attempt to resolve claims at the project supervisory level through the
normal change order process or, if necessary, with higher levels of management within our organization and the customer&rsquo;s
organization. Regardless of the process, when a potential claim arises on a contract, we typically have the contractual obligation
to perform the work and must incur the related costs. We do not recoup the costs unless and until the claim is resolved, which
could take a significant amount of time.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Most of our construction contracts provide
for termination of the contract for the convenience of the customer, with provisions to pay us only for work performed through
the date of termination. Our backlog and results of operations have not been materially adversely affected by these provisions
in the past.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We act as the prime contractor on the majority
of the construction contracts that we undertake. We generally complete the majority of the work on our contracts with our own resources,
and we typically subcontract only specialized activities, such as traffic control, electrical systems, signage, trucking and earthmoving.
As the prime contractor, we are responsible for the performance of the entire contract, including subcontract work. Thus, we are
subject to increased costs associated with the failure of one or more subcontractors to perform as anticipated. We manage this
risk by reviewing the size of the subcontract, the financial stability of and prior experience with the subcontractor and other
factors. Although we generally do not require that our subcontractors furnish a bond or other type of security to guarantee their
performance, we require performance and payment bonds on some specialized or large subcontract portions of our contracts. Disadvantaged
business enterprise regulations require us to use our best efforts to subcontract a specified portion of contract work performed
for governmental entities to certain types of subcontractors, including minority- and women-owned businesses.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B></B></P>

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<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Joint Ventures</I></B><I>.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We participate in joint ventures with other
large construction companies and other partners, typically for large, technically complex projects, including design-build projects,
when it is desirable to share risk and resources in order to seek a competitive advantage or when the project is too large for
us to obtain sufficient bonding. Joint venture partners typically provide independently prepared estimates, furnish employees and
equipment, enhance bonding capacity and often also bring local knowledge and expertise. We select our joint venture partners based
on our analysis of their construction and financial capabilities, expertise in the type of work to be performed and past working
relationships with us, among other criteria.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Under a joint venture agreement, one partner
is typically designated as the sponsor or manager. The sponsoring partner typically provides all administrative, accounting and
most of the project management support for the project and generally receives a fee from the joint venture for these services.
We have been designated as the sponsoring partner in certain of our current joint venture projects and are a non-sponsoring partner
in others.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Joint venture contracts with project owners
typically impose joint and several liability on the joint venture partners. Although our agreements with our joint venture partners
provide that each party will assume and pay its share of any losses resulting from a project, if one of our partners is unable
to pay its share, we would be fully liable under our contract with the project owner. Circumstances that could lead to a loss under
these guarantee arrangements include a partner&rsquo;s inability to contribute additional funds to the venture in the event that
the project incurs a loss or additional costs that we could incur should the partner fail to provide the services and resources
toward project completion that had been committed to in the joint venture agreement.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Insurance and Bonding</I></B><I>.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">All of our buildings and equipment are
covered by insurance, at levels which our management believes to be adequate. In addition, we maintain general liability and excess
liability insurance, workers&rsquo; compensation insurance and auto insurance all in amounts consistent with our risk of loss and
industry practice.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">As a normal part of the construction business,
we are generally required to provide various types of surety and payment bonds that provide an additional measure of security for
our performance under the contract. Typically, a bidder for a contract must post a bid bond, generally for 5% to 10% of the amount
bid, and on winning the bid, must post a performance and payment bond for 100% of the contract amount. Usually, upon posting of
the performance bond, a contractor must also post a maintenance bond for generally 1% of the contract amount for one to two years.
Our ability to obtain surety bonds depends upon our capitalization, working capital, aggregate contract size, past performance,
management expertise and external factors, including the capacity of the overall surety market. Surety companies consider such
factors in light of the amount of our backlog that we have currently bonded and their current underwriting standards, which may
change from time to time. As is customary, we have agreed to indemnify our bonding company for all losses incurred by it in connection
with bonds that are issued, and we have granted our bonding company a security interest in certain assets, including accounts receivable,
as collateral for such obligation.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Government and Environmental Regulations.</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our operations are subject to compliance
with numerous regulatory requirements of federal, state and local agencies and authorities, including regulations concerning safety,
wage and hour, and other labor issues, immigration controls, vehicle and equipment operations and other aspects of our business.
For example, our construction operations are subject to the requirements of the Occupational Safety and Health Act (&ldquo;OSHA&rdquo;)
and comparable state laws directed toward the protection of employees. In addition, most of our construction contracts are entered
into with public authorities, and these contracts frequently impose additional governmental requirements, including requirements
regarding labor relations and subcontracting with designated classes of disadvantaged businesses.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">All of our operations are also subject
to federal, state and local laws and regulations relating to the environment, including those relating to discharges into air,
water and land, climate change, the handling and disposal of solid and hazardous waste, the handling of underground storage tanks
and the cleanup of properties affected by hazardous substances. For example, we must apply water or chemicals to reduce dust on
road construction projects and to contain contaminants in storm run-off water at construction sites. In certain circumstances,
we may also be required to hire subcontractors to dispose of hazardous wastes encountered on a project in accordance with a plan
approved in advance by the customer. Certain environmental laws impose substantial penalties for non-compliance and others, such
as the federal Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, impose strict and retroactive joint
and several liability upon persons responsible for releases of hazardous substances.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">CERCLA and comparable state laws impose
liability, without regard to fault or the legality of the original conduct, on certain classes of persons that contributed to the
release of a &ldquo;hazardous substance&rdquo; into the environment. These persons include the owner or operator of the site where
the release occurred and companies that disposed or arranged for the disposal of the hazardous substances found at the site. Under
CERCLA, these persons may be subject to joint and several liability for the costs of cleaning up the hazardous substances that
have been released into the environment, for damages to natural resources and for the costs of certain health studies. CERCLA also
authorizes the federal Environmental Protection Agency, or EPA, and, in some instances, third parties, to act in response to threats
to the public health or the environment and to seek to recover from the responsible classes of persons the costs they incur.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Solid wastes, which may include hazardous
wastes, are subject to the requirements of the Federal Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, referred to as RCRA, and comparable state statutes. Although we do not generate solid waste, we occasionally dispose of solid
waste on behalf of customers. From time to time, the EPA considers the adoption of stricter disposal standards for non-hazardous
wastes. Moreover, it is possible that additional wastes will in the future be designated as &ldquo;hazardous wastes.&rdquo; Hazardous
wastes are subject to more rigorous and costly disposal requirements than are non-hazardous wastes.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We continually evaluate whether we must
take additional steps at our locations to ensure compliance with environmental laws. While compliance with applicable regulatory
requirements has not materially adversely affected our operations in the past, there can be no assurance that these requirements
will not change and that compliance will not adversely affect our operations in the future. In addition, tighter regulation for
the protection of the environment and other factors may make it more difficult to obtain new permits and renewal of existing permits
may be subject to more restrictive conditions than currently exist.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Employees.</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">As of December 31, 2015, the Company had
approximately 1,565 employees, including 1,269 field personnel. Of our 1,269 field employees, 326 were union members in Nevada,
Arizona, California and Hawaii, and these union employees are represented by 14 unions.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our business is dependent upon a readily
available supply of management, supervisory and field personnel. Substantially all of our employees are hired on a full-time basis;
however, as is typical in the construction industry, we experience a high degree of turnover as a result of construction projects
being completed. In the past, we have been able to attract sufficient numbers of personnel to support the growth of our operations.
However, we continue to face intense competition for experienced workers in all our markets.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">We focus on our safety
processes which have allowed us to maintain a high level of safety at our worksites.&nbsp; All employees receive hazard specific
training and our newly-hired employees undergo an initial safety orientation and receive follow-up trainings during their first
90 days of employment.&nbsp; Our&nbsp;project managers and superintendents work closely with the Safety Department to ensure safety
is planned into all of our operations before they begin.&nbsp; Daily, the Foremen are required to conduct safety briefings and
stretch with employees.&nbsp; Regular safety walkthroughs are conducted by our managers, supervisors and safety staff to evaluate
project conditions and observe employee safety behavior.</P>


<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Access to Company&rsquo;s Filings.</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company maintains a website at www.strlco.com
on which our latest Annual Report on Form 10-K, recent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, any
amendments to those filings, and other filings may be accessed free of charge; some directly on the website and others through
a link to the Securities and Exchange Commission&rsquo;s (&ldquo;SEC&rdquo;) website (www.sec.gov) where those reports are filed.
Our website also has recent press releases, the Company&rsquo;s Code of Business Conduct &amp; Ethics, the charters of the Audit
Committee, Compensation Committee, and Corporate Governance &amp; Nominating Committee of the Board of Directors and information
on the Company&rsquo;s &ldquo;whistle-blower&rdquo; procedures. Our website content is made available for information purposes
only. It should not be relied upon for investment purposes, and none of the information on the website is incorporated into this
Report by this reference to it.</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"><A NAME="i1a"></A>Item 1A. Risk Factors.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The risks described below are those we
believe to be the material risks we face. Any of the risk factors described below could significantly and adversely affect our
business, prospects, financial condition, results of operations and cash flows.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Risks Relating to Our Business</I></B><I>. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>If we are unable to accurately
estimate the overall risks, requirements or costs when we bid on or negotiate a contract that is ultimately awarded to us, we may
achieve a lower than anticipated profit or incur a loss on the contract.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The majority of our revenues and backlog
are derived from fixed unit price contracts. Some of our revenues are derived from lump sum contracts. Fixed unit price contracts
require us to provide materials and services at a fixed unit price based on approved quantities irrespective of our actual per
unit costs. Lump sum contracts require that the total amount of work be performed for a single price irrespective of our actual
per unit costs. We realize a profit on our contracts only if we accurately estimate our costs and then successfully control actual
costs and avoid cost overruns, and our revenues exceed actual costs. If our cost estimates for a contract are inaccurate, or if
we do not execute the contract within our cost estimates, then cost overruns may cause us to incur losses or cause the contract
not to be as profitable as we expected. The final results under these types of contracts could negatively affect our cash flow,
earnings and financial position.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The costs incurred and gross profit realized
on our contracts can vary, sometimes substantially, from our original projections due to a variety of factors, including, but not
limited to:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">onsite conditions that differ from those assumed in the original bid or contract;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">failure to include required materials or work in a bid, or the failure to estimate properly the
quantities or costs needed to complete a lump sum contract;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">delays caused by weather conditions;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">contract or project modifications creating unanticipated costs not covered by change orders;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">changes in availability, proximity and costs of materials, including steel, concrete, aggregates
and other construction materials (such as stone, gravel, sand and oil for asphalt paving), as well as fuel and lubricants for our
equipment;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">inability to predict the costs of accessing and producing aggregates and purchasing oil required
for asphalt paving projects;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">availability and skill level of workers in the geographic location of a project;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">failure by our suppliers, subcontractors, designers, engineers, joint venture partners or customers
to perform their obligations;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">fraud, theft or other improper activities by our suppliers, subcontractors, designers, engineers,
joint venture partners, customers or our own personnel;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">mechanical problems with our machinery or equipment;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">citations issued by any governmental authority, including OSHA;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">difficulties in obtaining required governmental permits or approvals;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">changes in applicable laws and regulations;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">delays in quickly identifying and taking measures to address issues which arise during production;&nbsp;and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">claims or demands from third parties for alleged damages arising from the design, construction
or use and operation of a project of which our work is part.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Many of our contracts with public sector
customers contain provisions that purport to shift some or all of the above risks from the customer to us, even in cases where
the customer is partly at fault. Our experience has often been that public sector customers have been willing to negotiate equitable
adjustments in the contract compensation or completion time provisions if unexpected circumstances arise. However, public sector
customers may seek to impose contractual risk-shifting provisions more aggressively, which could increase risks and adversely affect
our cash flow, earnings and financial position.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>We may be unable to grow our revenues and increase
our profitability.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our revenue has fluctuated in recent years,
in part through market conditions and, in 2007, 2009 and 2011, acquisitions that expanded our geographical footprint. We may be
unable to grow our revenues for a variety of reasons, including decreased government funding for infrastructure projects, limits
on additional growth in our current markets, reduced spending by our customers, an increased number of competitors, less success
in competitive bidding for contracts, limitations on access to necessary working capital and investment capital to sustain growth,
limitations on access to bonding to support increased contracts and operations, inability to hire and retain essential personnel
and to acquire equipment to support growth, and inability to identify acquisition candidates and successfully acquire and integrate
them into our business. A substantial decline in our revenue could have a material adverse effect on our financial condition and
results of operations if we are unable to also reduce our operating expenses. See &ldquo;Recent Developments &#8213; Financial
Results for 2015, Operational Issues and Outlook for 2016 Financial Results&rdquo; above for further discussion of the impact on
our financial results.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"></P>

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<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Economic downturns or reductions in government funding
of infrastructure projects could reduce our revenues and profits and have a material adverse effect on our results of operations.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our business is highly dependent on the
amount and timing of infrastructure work funded by various governmental entities, which, in turn, depends on the overall condition
of the economy, the need for new or replacement infrastructure, the priorities placed on various projects funded by governmental
entities and federal, state or local government spending levels. Spending on infrastructure could decline for numerous reasons,
including decreased revenues received by state and local governments for spending on such projects, including federal funding.
The most recent recession caused a nationwide decline in home sales and an increase in foreclosures, which correspondingly resulted
in decreases in property taxes and some other local taxes, which are among the sources of funding for municipal road, bridge and
water infrastructure construction. State spending on highway and other projects can be adversely affected by decreases or delays
in, or uncertainties regarding, federal highway funding, which could adversely affect us. We are reliant upon contracts with state
transportation departments for a significant portion of our revenues.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">See &ldquo;Business&minus;Our Markets and
Customers&rdquo; above for a more detailed discussion of our markets and their funding sources.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>We operate in Texas, Utah, Nevada, Colorado, Arizona,
California, Hawaii and to a lesser extent in other states, and adverse changes to the economy and business environment in those
states have had an adverse effect on, and could continue to adversely affect, our operations, which could lead to lower revenues
and reduced profitability.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Because of this concentration in specific
geographic locations, we are susceptible to fluctuations in our business caused by adverse economic or other conditions in these
regions, including natural or other disasters. The stagnant or depressed economy, to varying degrees, in Texas, Utah, Nevada, Colorado,
Arizona, California and Hawaii have adversely affected, and could continue to adversely effect, our business and results of operations.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>The cancellation of significant contracts or our
disqualification from bidding for new contracts could reduce our revenues and profits and have a material adverse effect on our
results of operations.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Contracts that we enter into with governmental
entities can usually be canceled at any time by them with payment only for the work already completed. In addition, we could be
prohibited from bidding on certain governmental contracts if we fail to maintain qualifications required by those entities. A cancellation
of an unfinished contract or our debarment from the bidding process could cause our equipment and work crews to be idled for a
significant period of time until other comparable work becomes available, which could have a material adverse effect on our business
and results of operations.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Our industry is highly competitive, with a variety
of companies competing against us, and our failure to compete effectively could reduce the number of new contracts awarded to us
or adversely affect our margins on contracts awarded.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In the past, a majority of the contracts
on which we bid were awarded through a competitive bid process, with awards generally being made to the lowest bidder, but sometimes
recognizing other factors, such as shorter contract schedules or prior experience with the customer. For our design-build, CM/GC
and other alternative methods of delivering projects, reputation, marketing efforts, quality of design and minimizing public inconvenience
are also significant factors considered in awarding contracts, in addition to cost. Within our markets, we compete with many international,
national, regional and local construction firms. Some of these competitors have achieved greater market penetration than we have
in the markets in which we compete, and some may have greater financial and other resources than we do. In addition, there are
a number of international and national companies in our industry that are larger than we are and that, if they so desire, could
establish a presence in our markets and compete with us for contracts.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In some markets where residential and commercial
projects have significantly diminished, the bidding environment in our markets has been much more competitive as construction companies
that lack available work in those markets have begun bidding on projects in our markets, sometimes at bid levels below our break-even
pricing. In addition, traditional competitors on larger transportation and water infrastructure projects also appear to have been
bidding at less than normal margins, and in some cases at below our break-even pricing, in order to replenish their backlogs. As
a result, we may need to accept lower contract margins in order to compete against competitors that have the ability to accept
awards at lower prices or have a pre-existing relationship with a customer.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In addition, if the use of design-build,
CM/GC and other alternative project delivery methods continues to increase and we are not able to further develop our capabilities
and reputation in connection with these alternative delivery methods, we will be at a competitive disadvantage, which may have
a material adverse effect on our financial position, results of operations, cash flows and prospects. If we are unable to compete
successfully in our markets, our relative market share and profits could also be reduced.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"></P>

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<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Our dependence on subcontractors and suppliers of
materials (including petroleum-based products) could increase our costs and impair our ability to complete contracts on a timely
basis or at all, which would adversely affect our profits and cash flow.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We rely on third-party subcontractors to
perform some of the work on many of our contracts. We generally do not bid on contracts unless we have the necessary subcontractors
committed for the anticipated scope of the contract and at prices that we have included in our bid, except in some instances for
trucking arrangements. Therefore, to the extent that we cannot engage subcontractors, our ability to bid for contracts may be impaired.
In addition, if a subcontractor is unable to deliver its services according to the negotiated terms for any reason, including the
deterioration of its financial condition, we may suffer delays and be required to purchase the services from another source at
a higher price or incur other unanticipated costs. This may reduce the profit to be realized, or result in a loss, on a contract.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We also rely on third-party suppliers to
provide most of the materials (including aggregates, cement, asphalt, concrete, steel, pipe, oil and fuel) for our contracts, except
in Utah and Nevada where we source and produce some of the aggregates we use from quarries in which we have mining rights. We do
not own or operate any quarries in Texas, Arizona, California, or Hawaii. We normally do not bid on contracts unless we have commitments
from suppliers for the materials and subcontractors for certain of the services required to complete the contract and at prices
that we have included in our bid, except for some construction projects in Utah and Nevada where we use aggregates from quarries
in which we have mining rights. Thus, to the extent that we cannot obtain commitments from our suppliers for materials and subcontractors
for certain of the services, our ability to bid for contracts may be impaired. In addition, if a supplier or subcontractor is unable
to deliver materials or services according to the negotiated terms of a supply/services agreement for any reason, including the
deterioration of its financial condition, we may suffer delays and be required to purchase the materials/services from another
source at a higher price or incur other unanticipated costs. This may reduce the profit to be realized, or result in a loss, on
a contract.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Diesel fuel and other petroleum-based products
are utilized to operate the plants and equipment on which we rely to perform our construction contracts. In addition, our asphalt
plants and suppliers use oil in combination with aggregates to produce asphalt used in our road and highway construction projects.
Decreased supplies of such products relative to demand, unavailability of petroleum supplies due to refinery turnarounds, higher
prices charged for petroleum based products and other factors can increase the cost of such products. Future increases in the costs
of fuel and other petroleum-based products used in our business, particularly if a bid has been submitted for a contract and the
costs of such products have been estimated at amounts less than the actual costs thereof, could result in a lower profit, or a
loss, on a contract.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>We may not accurately assess the quality, and we
may not accurately estimate the quantity, availability and cost, of aggregates we plan to produce, particularly for projects in
rural areas, which could have a material adverse effect on our results of operations.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Particularly for projects in rural areas,
we typically estimate the quality, quantity, availability and cost for anticipated aggregate sources that we have not previously
used to produce aggregates, which increases the risk that our estimates may be inaccurate. Inaccuracies in our estimates regarding
aggregates could result in significantly higher costs to supply aggregates needed for our projects, as well as potential delays
and other inefficiencies. As a result, our failure to accurately assess the quality, quantity, availability and cost of aggregates
could cause us to incur losses, which could materially adversely affect our results of operations.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>If we are unable to attract and retain key personnel
and skilled labor, or if we encounter labor difficulties, our ability to bid for and successfully complete contracts may be negatively
impacted.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our ability to attract and retain reliable,
qualified personnel is a significant factor that enables us to successfully bid for and profitably complete our work. This includes
members of our management, project managers, estimators, supervisors, foremen, equipment operators and laborers. The loss of the
services of any of our management could have a material adverse effect on us. Our future success will also depend on our ability
to hire and retain, or to attract when needed, highly-skilled personnel. If competition for these employees is intense, we could
experience difficulty hiring and retaining the personnel necessary to support our business. If we do not succeed in retaining our
current employees and attracting, developing and retaining new highly-skilled employees, our reputation may be harmed and our operations
and future earnings may be negatively impacted.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We rely heavily on immigrant labor. We
have taken steps that we believe are sufficient and appropriate to ensure compliance with immigration laws. However, we cannot
provide assurance that we have identified, or will identify in the future, all illegal immigrants who work for us. Our failure
to identify illegal immigrants who work for us may result in fines or other penalties being imposed upon us, which could have a
material adverse effect on our operations, results of operations and financial condition.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In Nevada, Arizona, California and Hawaii,
a substantial number of our equipment operators and laborers are unionized. Any work stoppage or other labor dispute involving
our unionized workforce, or inability to renew contracts with the unions, could have a material adverse effect on our operations
and operating results.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Our contracts may require us to perform extra or
change order work, which can result in disputes and adversely affect our working capital, profits and cash flows.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our contracts often require us to perform
extra or change order work as directed by the customer even if the customer has not agreed in advance on the scope or price of
the extra work to be performed. This process may result in disputes over whether the work performed is beyond the scope of the
work included in the original project plans and specifications or, if the customer agrees that the work performed qualifies as
extra work, the price that the customer is willing to pay for the extra work. These disputes may not be settled to our satisfaction.
Even when the customer agrees to pay for the extra work, we may be required to fund the cost of such work for a lengthy period
of time until the change order is approved by the customer and we are paid by the customer.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">To the extent that actual recoveries with
respect to change orders or amounts subject to contract disputes or claims are less than the estimates used in our financial statements,
the amount of any shortfall will reduce our future revenues and profits, and this could have a material adverse effect on our reported
working capital and results of operations. In addition, any delay caused by the extra work may adversely impact the timely scheduling
of other project work and our ability to meet specified contract milestone dates.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Our failure to meet schedule or performance requirements
of our contracts could adversely affect us.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In most cases, our contracts require completion
by a scheduled acceptance date. Failure to meet any such schedule could result in additional costs, penalties or liquidated damages
being assessed against us, and these could exceed projected profit margins on the contract. Performance problems on existing and
future contracts could cause actual results of operations to differ materially from those anticipated by us and could cause us
to suffer damage to our reputation within the industry and among our customers.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>The design-build project delivery method subjects
us to the risk of design errors and omissions.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In the event of a design error or omission
causing damages with respect to one of our design-build projects, we could be liable. Although we pass design responsibility on
to the engineering firms that we engage to perform design services on our behalf for these projects, in the event of a design error
or omission causing damages, there is risk that the engineering firm, its professional liability insurance, and the errors and
omissions insurance that they and we purchase will not fully protect us from costs or liabilities. Any liabilities resulting from
an asserted design defect with respect to our construction projects may have a material adverse effect on our financial position,
results of operations and cash flows.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Adverse weather conditions may cause delays, which
could slow completion of our contracts and negatively affect our revenues and cash flow.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Because all of our construction projects
are built outdoors, work on our contracts is subject to unpredictable weather conditions, which could become more frequent or severe
if general climatic changes occur. For example, evacuations in Texas due to hurricanes along the U.S. Gulf of Mexico coastal areas
can result in our inability to perform work on all Houston-area contracts for several days. Lengthy periods of wet or cold winter
weather will generally interrupt construction, and this can lead to under-utilization of crews and equipment, resulting in less
efficient rates of overhead recovery. Extreme heat can prevent us from performing certain types of operations. During the late
fall to the early spring months of each year, our work on construction projects in Nevada and Utah may also be curtailed because
of snow and other work-limiting weather. While revenues can be recovered following a period of bad weather, it is generally impossible
to recover the cost of inefficiencies, and significant periods of bad weather typically reduce profitability of affected contracts
both in the current period and during the future life of affected contracts. Such reductions in contract profitability negatively
affect our results of operations in current and future periods until the affected contracts are completed.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Timing of the award and performance of new contracts
could have an adverse effect on our operating results and cash flow.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">It is generally very difficult to predict
whether and when new contracts will be offered for tender, as these contracts frequently involve a lengthy and complex design and
bidding process, which is affected by a number of factors, such as market conditions, funding arrangements and governmental approvals.
Because of these factors, our results of operations and cash flows may fluctuate from quarter to quarter and year to year, and
the fluctuation may be substantial.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The uncertainty of the timing of contract
awards may also present difficulties in matching the size of our equipment fleet and work crews with contract needs. In some cases,
we may maintain and bear the cost of more equipment and ready work crews than are currently required, in anticipation of future
needs for existing contracts or expected future contracts. If a contract is delayed or an expected contract award is not received,
we would incur costs that could have a material adverse effect on our anticipated profit.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In addition, the timing of the revenues,
earnings and cash flows from our contracts can be delayed by a number of factors, including adverse weather conditions, such as
prolonged or intense periods of rain, snow, storms or flooding; delays in receiving material and equipment from suppliers and services
from subcontractors; and changes in the scope of work to be performed. Such delays, if they occur, could have adverse effects on
our operating results for current and future periods until the affected contracts are completed.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Our participation in construction joint ventures
exposes us to liability and/or harm to our reputation for failures of our partners.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">As part of our business, we are a party
to joint venture arrangements, pursuant to which we typically jointly bid on and execute particular projects with other companies
in the construction industry. Success on these joint projects depends upon managing the risks discussed in the various risks described
in these &ldquo;Risk Factors&rdquo; and on whether our joint venture partners satisfy their contractual obligations.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We and our joint venture partners are generally
jointly and severally liable for all liabilities and obligations of our joint ventures. If a joint venture partner fails to perform
or is financially unable to bear its portion of required capital contributions or other obligations, including liabilities stemming
from lawsuits, we could be required to make additional investments, provide additional services or pay more than our proportionate
share of a liability to make up for our partner&rsquo;s shortfall. Furthermore, if we are unable to adequately address our partner&rsquo;s
performance issues, the customer may terminate the project, which could result in legal liability to us, harm to our reputation
and reduction to our profit on a project.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In connection with acquisitions, certain
counterparties to joint venture arrangements, which may include our historical direct competitors, may not desire to continue such
arrangements with us and may terminate the joint venture arrangements or not enter into new arrangements. Any termination of a
joint venture arrangement could cause us to reduce our backlog and could materially and adversely affect our business, results
of operations and financial condition.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Our dependence on a limited number of customers could
adversely affect our business and results of operations.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Due to the size and nature of our construction
contracts, one or a few customers have in the past and may in the future represent a substantial portion of our consolidated revenues
and gross profits in any one year or over a period of several consecutive years. For example, in 2015, approximately 13.5% of our
revenue was generated from Texas Department of Transportation (&ldquo;TXDOT&rdquo;) and approximately 15.5% was generated by the
California Department of Transportation (&ldquo;Caltrans&rdquo;). Similarly, our backlog frequently reflects multiple contracts
for certain customers; therefore, one customer may comprise a significant percentage of backlog at a certain point in time. Examples
of this are TXDOT, Caltrans and Nevada Department of Transportation which comprised 25.7%, 14.1% and 11.4% of our backlog at December
31, 2015, respectively. The loss of business from any one of such customers could have a material adverse effect on our business
or results of operations. Also, a default or delay in payment on a significant scale by a customer could materially adversely affect
our business, results of operations, cash flows and financial condition.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>We may incur higher costs to lease, acquire and maintain
equipment necessary for our operations, and the market value of our owned equipment may decline.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">A significant portion of our contracts
is built with our own construction equipment rather than leased or rented equipment. To the extent that we are unable to buy construction
equipment necessary for our needs, either due to a lack of available funding or equipment shortages in the marketplace, we may
be forced to rent equipment on a short-term basis, which could increase the costs of performing our contracts.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The equipment that we own or lease requires
continuous maintenance, for which we maintain our own repair facilities. If we are unable to continue to maintain the equipment
in our fleet, we may be forced to obtain third-party repair services, which could increase our costs. In addition, the market
value of our equipment may unexpectedly decline at a faster rate than anticipated.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"></P>

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<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>An inability to obtain bonding could limit the aggregate
dollar amount of contracts that we are able to pursue.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">As is customary in the construction business,
we are required to provide surety bonds to our customers to secure our performance under construction contracts. Our ability to
obtain surety bonds primarily depends upon our capitalization, working capital, past performance, management expertise and reputation
and certain external factors, including the overall capacity of the surety market. Surety companies consider such factors in relationship
to the amount of our backlog and their underwriting standards, which may change from time to time. Events that adversely affect
the insurance and bonding markets generally may result in bonding becoming more difficult to obtain in the future, or being available
only at a significantly greater cost. Our inability to obtain adequate bonding would limit the amount that we can bid on new contracts
and could have a material adverse effect on our future revenues and business prospects.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Our operations are subject to hazards that may cause
personal injury or property damage, thereby subjecting us to liabilities and possible losses, which may not be covered by insurance.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our workers are subject to the usual hazards
associated with providing construction and related services on construction sites, plants and quarries. Operating hazards can cause
personal injury and loss of life, damage to or destruction of property, plant and equipment and environmental damage. We maintain
general liability and excess liability insurance, workers&rsquo; compensation insurance, auto insurance and other types of insurance
all in amounts consistent with our risk of loss and industry practice, but this insurance may not be adequate to cover all losses
or liabilities that we may incur in our operations.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Insurance liabilities are difficult to
assess and quantify due to unknown factors, including the severity of an injury, the determination of our liability in proportion
to other parties, the number of incidents not reported and the effectiveness of our safety program. If we were to experience insurance
claims or costs above our estimates, we might be required to use working capital to satisfy these claims rather than to maintain
or expand our operations. To the extent that we experience a material increase in the frequency or severity of accidents or workers&rsquo;
compensation and health claims, or unfavorable developments on existing claims, our operating results and financial condition could
be materially and adversely affected.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Environmental and other regulatory matters could
adversely affect our ability to conduct our business and could require expenditures that could have a material adverse effect on
our results of operations and financial condition.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our operations are subject to various environmental
laws and regulations relating to the management, disposal and remediation of hazardous substances, climate change and the emission
and discharge of pollutants into the air and water. We could be held liable for such contamination created not only from our own
activities but also from the historical activities of others on our project sites or on properties that we acquire or lease. Our
operations are also subject to laws and regulations relating to workplace safety and worker health, which, among other things,
regulate employee exposure to hazardous substances. Immigration laws require us to take certain steps intended to confirm the legal
status of our immigrant labor force, but we may nonetheless unknowingly employ illegal immigrants. Violations of such laws and
regulations could subject us to substantial fines and penalties, cleanup costs, third-party property damage or personal injury
claims. In addition, these laws and regulations have become, and enforcement practices and compliance standards are becoming, increasingly
stringent. Moreover, we cannot predict the nature, scope or effect of legislation or regulatory requirements that could be imposed,
or how existing or future laws or regulations will be administered or interpreted, with respect to products or activities to which
they have not been previously applied. Compliance with more stringent laws or regulations, as well as more vigorous enforcement
policies of the regulatory agencies, could require us to make substantial expenditures for, among other things, pollution control
systems and other equipment that we do not currently possess, or the acquisition or modification of permits applicable to our activities.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our aggregate quarry leases in Utah and
Nevada could subject us to costs and liabilities. As lessee and operator of the quarries, we could be held responsible for any
contamination or regulatory violations resulting from activities or operations at the quarries. Any such costs and liabilities
could be significant and could materially and adversely affect our business, operating results and financial condition.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Force majeure events, such as terrorist attacks or
natural disasters, have impacted, and could continue to negatively impact, the U.S. economy and the markets in which we operate.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Force majeure events, such as terrorist
attacks or natural disasters, have contributed to economic instability in the United States in the past, and further acts of terrorism,
violence, war, or natural disasters could affect the markets in which we operate, our business and our expectations. Armed hostilities
may increase, or terrorist attacks, or responses from the United States, may lead to further acts of terrorism and civil disturbances
in the United States or elsewhere, which may further contribute to economic instability in the United States. These force majeure
events may affect our operations or those of our customers or suppliers and could impact our revenues, our production capability
and our ability to complete contracts in a timely manner.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"></P>

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<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>We rely on information technology systems to conduct
our business, and disruption, failure or security breaches of these systems could adversely affect our business and results of
operations.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We rely on information technology (&ldquo;IT&rdquo;)
systems in order to achieve our business objectives. &nbsp;We also rely upon industry accepted security measures and technology
to securely maintain confidential information maintained on our IT systems. However, our portfolio of hardware and software products,
solutions and services and our enterprise IT systems may be vulnerable to damage or disruption caused by circumstances beyond our
control such as catastrophic events, power outages, natural disasters, computer system or network failures, computer viruses, cyber-attacks
or other malicious software programs.&nbsp; The failure or disruption of our IT systems to perform as anticipated for any reason
could disrupt our business and result in decreased performance, significant remediation costs, transaction errors, loss of data,
processing inefficiencies, downtime, litigation and the loss of suppliers or customers. &nbsp;A significant disruption or failure
could have a material adverse effect on our business operations, financial performance and financial condition.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Risks Related to Our Financial Results and Financing
Plans</I></B><I>.</I></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Actual results could differ from the estimates and
assumptions that we use to prepare our financial statements.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">To prepare financial statements in conformity
with accounting principles generally accepted in the United States (&ldquo;GAAP&rdquo;), management is required to make estimates
and assumptions, as of the date of the financial statements, which affect the reported values of assets and liabilities, revenues
and expenses, and disclosures of contingent assets and liabilities. Areas requiring significant estimates by our management include:
contract costs and profits; application of percentage-of-completion accounting and revenue recognition of contract change order
claims; provisions for uncollectible receivables and customer claims and recoveries of costs from subcontractors, suppliers and
others; impairment of long-term assets; valuation of assets acquired and liabilities assumed in connection with business combinations;
accruals for estimated liabilities, including litigation and insurance reserves; and stock-based compensation. Our actual results
could differ from, and could require adjustments to, those estimates.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In particular, as is more fully discussed
in &ldquo;Item 7. Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&nbsp;&mdash; Critical
Accounting Policies,&rdquo; we recognize contract revenue using the percentage-of-completion method. Under this method, estimated
contract revenue is recognized by applying the percentage of completion of the contract for the period (based on the ratio of costs
incurred to total estimated costs of a contract) to the total estimated revenue for the contract. Estimated contract losses are
recognized in full when determined. Contract revenue and total cost estimates are reviewed and revised on a continuous basis as
the work progresses and as change orders are initiated or approved, and adjustments based upon the percentage of completion are
reflected in contract revenue in the accounting period when these estimates are revised. To the extent that these adjustments result
in an increase, a reduction or an elimination of previously reported contract profit, we recognize a credit or a charge against
current earnings, which could be material.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>We may need to raise additional capital in the future
for working capital, capital expenditures and/or acquisitions, and we may not be able to do so on favorable terms or at all, which
would impair our ability to operate our business or achieve our growth objectives.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our ability to obtain additional financing
in the future will depend in part upon prevailing credit and equity market conditions, as well as conditions in our business and
our operating results; such factors may adversely affect our efforts to arrange additional financing on terms satisfactory to us.
We have pledged the proceeds and other rights under our construction contracts to our bond surety, and we have pledged substantially
all of our other assets as collateral in connection with our equipment-based credit facility. As a result, we may have difficulty
in obtaining additional financing in the future if such financing requires us to pledge assets as collateral. In addition, under
our equipment-based credit facility, we must obtain the consent of our lenders to incur any amount of additional debt from other
sources (subject to certain exceptions). If future financing is obtained by the issuance of additional shares of common stock,
our stockholders may suffer dilution. If adequate funds are not available, or are not available on acceptable terms, we may not
be able to make future investments, take advantage of acquisitions or other opportunities, or respond to competitive challenges.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: -0.25in; margin: 5pt 0 2pt 0.25in"><I>We are subject to certain covenants
under our equipment-based credit facility that could limit our flexibility in managing our business.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We have an equipment-based credit facility
that restricts us from engaging in certain activities, including our ability (subject to certain exceptions) to:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">incur liens or encumbrances;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">incur further indebtedness;</TD></TR></TABLE>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">dispose of a material portion of assets or merge with a third party;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">make acquisitions; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">make investments in securities.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our credit facility bears interest at
an initial annual rate of 12%, which is subject to (i) a decrease of up to two percentage points based on the Company's fixed
charge coverage ratio for each of the most recently ended four quarters beginning with the four quarterly period ended June 30,
2016; and (ii) an increase of up to two percentage points beginning December 31, 2015 based on the fixed charge coverage ratio
at the end of the following four quarters. To the extent that the fixed charge ratio calculation described above results in an
interest rate increase, the increase in interest expense could have a material adverse effect on our business operations, financial
performance and financial condition.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: -0.25in; margin: 5pt 0 2pt 0.25in"><I>We are subject to a limitation
on the amount that we can borrow under our equipment-based credit facility based on the value of our collateralized equipment.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our equipment-based credit facility is
secured by all of the Company&rsquo;s personal property except accounts receivable, including all of its construction equipment,
which forms the basis of our borrowing capacity under our credit facility. This facility is also secured by one-half of the equipment
of the Company&rsquo;s 50%-owned affiliates. The sum of the amount borrowed may not exceed the lesser of $40 million or 65% of
the appraised value of the collateral pledged for the facility. At December 31, 2015, the Company had approximately $29.6 million
of borrowing base which was the result of calculating 65% of the appraised value of the Company&rsquo;s collateral. Based on market
conditions, which includes the amount of construction work available and the demand for construction equipment, the appraised value
of our equipment may be subject to fluctuating values. If these market conditions are unfavorable, we may see a decline in our
borrowing availability that could result in liquidity constraints, which could materially and adversely affect our business, results
of operations and financial condition.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 5pt 0 2pt"><I>We must manage our liquidity carefully to fund our working capital.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The need for working capital for our business
varies due to fluctuations in the following amounts, among other factors:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">contract receivables and contract retentions;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">costs and estimated earnings in excess of billings;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">billings in excess of costs and estimated earnings;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the size and status of contract mobilization payments and progress billings; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the amounts owed to suppliers and subcontractors.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We have limited cash on hand and the timing
of payments on our contract receivables are difficult to predict. If the timing of payments on our receivables is delayed or the
amount of such payments is less than expected, our liquidity and ability to fund working capital could be materially and adversely
affected.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>If we were required to write down all or part of
our goodwill, our net earnings and net worth could be materially and adversely affected.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We had $54.8&nbsp;million of goodwill recorded
on our consolidated balance sheet at December 31, 2015. Goodwill represents the excess of cost over the fair value of net assets
acquired in business combinations reduced by any impairments recorded subsequent to the date of acquisition. A shortfall in our
revenues or net income or changes in various other factors from that expected by securities analysts and investors could significantly
reduce the market price of our common stock. If our market capitalization drops significantly below the amount of net equity recorded
on our balance sheet, it might indicate a decline in our fair value and would require us to further evaluate whether our goodwill
has been impaired. We perform an annual test of our goodwill to determine if it has become impaired. On an interim basis, we also
review the factors that have or may affect our operations or market capitalization for events that may trigger impairment testing.
Write downs of goodwill may be substantial. If we were required to write down all or a significant part of our goodwill in future
periods our net earnings and equity could be materially and adversely affected.</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"><A NAME="i1b"></A>Item 1B. Unresolved Staff Comments.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">None</P>


<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"><A NAME="i2"></A>Item 2. Properties.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our corporate headquarters are located
in The Woodlands, Texas, in 12,340 square feet of office space leased with a seven year term. Our executive, finance and accounting
offices are located at this facility. We also have an office located in Lafayette, Colorado where we lease a small office for our
information technology professionals.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our TSC office building is located in Houston,
Texas, which houses TSC&rsquo;s executive management, project management and finance and accounting offices. The building is located
on a seven-acre parcel of land on which the TSC Houston division&rsquo;s equipment repair center is also located. We also own land,
have repair facilities and have constructed offices in San Antonio and Dallas.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our Utah operations leases office space
in Draper, Utah, near Salt Lake City, and also repair facilities in West Jordan City, Utah from entities owned primarily by certain
officers of RLW. Refer to Note 17 to the consolidated financial statements for additional information regarding related party transactions.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our Nevada operations lease office space
in Sparks, Nevada, and we own our office and repair facilities located on a forty-five acre parcel of land in Lovelock, Nevada.
We also lease the right to mine stone and sand at four quarry sites in Nevada. In Nevada, we generally source and produce our own
aggregates, either from our own quarries or from other sources near job sites where we enter into short-term leases to acquire
the aggregates necessary for the job.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our Arizona, California and Hawaii operations
lease office space in Tempe, Sacramento and Honolulu, respectively. We have also constructed a repair facility in Sacramento, California.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In order to complete most contracts, we
also lease small parcels of real estate near the site of a contract job site to store materials, locate equipment, and provide
offices for the contracting customer, its representatives and our employees.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><A NAME="i3"></A><B>Item 3. Legal Proceedings.</B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We are and may in the future be involved
as a party to various legal proceedings that are incidental to the ordinary course of business. We regularly analyze current information
about these proceedings and, as necessary, provide accruals for probable liabilities on the eventual disposition of these matters.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In the opinion of management, after consultation
with legal counsel, there are currently no threatened or pending legal matters that would reasonably be expected in the future
to have a material adverse impact on our consolidated results of operations, financial position or cash flows.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><A NAME="i4"></A><B>Item 4. Mine Safety Disclosures.</B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The information concerning mine safety
violations and other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection
Act and Item 104 of Regulation S-K is included in Exhibit 95.1 of this Annual Report on Form 10-K, which is incorporated by reference.</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 6pt 0"><FONT STYLE="font-variant: small-caps"><B>Executive
Officers of the Registrant</B></FONT></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0pt 0">(At March 14, 2016)</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0">The following is a list of the Company's three
executive officers, their ages, positions, offices and the year they became executive officers together with a brief description
of their business experience.</P>

<TABLE CELLSPACING="0" CELLPADDING="3" STYLE="font-size: 10pt; width: 100%; border-collapse: collapse">
<tr>
    <TD STYLE="vertical-align: bottom; width: 30%; border: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both"><b>Name</b></td>
    <TD STYLE="vertical-align: bottom; width: 8%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both"><b>Age</b></td>
    <TD STYLE="vertical-align: bottom; width: 43%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both"><b>Position/Offices</b></td>
    <TD STYLE="vertical-align: top; width: 19%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>Executive </b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>Officer Since</b></P></td></tr>
<tr>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font-size: 10pt; layout-grid-mode: both">Paul J. Varello</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both">72</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font-size: 10pt; layout-grid-mode: both">Chief Executive Officer</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both">2015</td></tr>
    <TR>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font-size: 10pt; layout-grid-mode: both">Con L. Wadsworth

</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both">55</TD>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font-size: 10pt; layout-grid-mode: both">Executive Vice President &amp; Chief Operating Officer

</TD>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both">2016</TD></TR>
<tr>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font-size: 10pt; layout-grid-mode: both">Ronald A. Ballschmiede</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both">60</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; font-size: 10pt; layout-grid-mode: both">Executive Vice President &amp; Chief Financial Officer, Treasurer, Chief Accounting Officer</td>
    <td style="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both">2015</td></tr>


<tr>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; font-size: 10pt; layout-grid-mode: both">Roger M. Barzun</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both">74</td>
    <td style="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; font-size: 10pt; layout-grid-mode: both">Senior Vice President &amp; General Counsel, Secretary</td>
    <td style="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; font-size: 10pt; layout-grid-mode: both">2006</td></tr>

</table>
<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0">Each executive officer is elected by the Board
of Directors and, subject to the terms of any employment agreement he may have with the Company, holds office for such term as
the Board of Directors may prescribe, or until his death, disqualification, resignation or removal.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0">Mr. Varello, who has been a director of the
Company since January 2014, was elected Chief Executive Officer on February 1, 2015, initially in an interim capacity. Mr. Varello
is the Founder and President of Commonwealth Projects, LLC, a project development company specializing in developing LNG projects
in the Caribbean Basin and Bermuda. He is the former Founder and Chairman of Commonwealth Engineering &amp; Construction, LLC (CEC),
an engineering and construction management company specializing in the design and construction of major capital projects for the
oil &amp; gas, refining, alternative fuels, power, and related energy industries, which he sold in 2014. Prior to founding CEC
in May 2003, Mr. Varello was Senior Partner of Varello &amp; Associates, a company that provided technical assessments, economic
evaluations, estimates and constructability reviews to project lenders, plant operators and engineering companies from September
2001 to May 2003. From May 1990 to September 2001, Mr. Varello was Chairman of the Board and Chief Executive Officer of American
Ref-Fuel Company of Houston, Texas. The company was formed as a joint venture of two publicly-traded companies to develop, own
and operate plants that convert solid municipal waste into energy. For the eighteen years prior to 1990, Mr. Varello was with Fluor
Corporation, a Fortune 500 company that provides engineering, procurement, construction, maintenance, and project management services
to a wide range of global clients. Mr. Varello started with Fluor as a project construction manager and rose to President of the
Process Sector. Mr. Varello is a Registered Professional Engineer in California, Texas and Louisiana, and holds a Bachelor of Civil
Engineering from Villanova University. He is also a graduate of Harvard Business School's Advanced Management Program.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0">Mr. Wadsworth has been at Ralph L. Wadsworth
Construction Company, LLC (RLW) since 1976 serving in various capacities.&nbsp; The Company acquired 80% of RLW in 2009 and the
remaining 20% in 2012.&nbsp; In 2009, Mr. Wadsworth was General manager of RLW and in August 2011 he was elected President, reporting
to RLW's Chief Executive Officer, his brother, Kip Wadsworth.&nbsp; With the retirement of Kip Wadsworth as Chief Executive Officer
in January 2014, the CEO title was eliminated, and Mr. Wadsworth as President became the chief executive of RLW.&nbsp; While he
remained President of RLW, Mr.&nbsp;Wadsworth served as a Senior Vice President of the Company from June 2014 to mid&mdash;February
2015 when he voluntarily gave up that position.&nbsp; Mr. Wadsworth was elected Executive Vice President &amp; Chief Operating
Officer of the Company on March 10, 2016.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0">Mr.&nbsp;Ballschmiede, was elected to his current position on November 9, 2015. From June 2006 until
his retirement in March 2015, Mr. Ballschmiede was Executive Vice President &amp; Chief Financial Officer of Chicago Bridge &amp;
Iron Company N.V. (CB&amp;I). Based in The Hague, Netherlands, CB&amp;I is a leading engineering, procurement and construction
contractor with approximately $13 billion in sales and 54,000 employees. Prior to that, from July 2002 to June 2006 he was a partner
of Deloitte &amp; Touche LLP, and from June 1977 to July 2002, he was at Arthur Andersen LLP where he became a partner in 1989.
Mr. Ballschmiede joined the Board of Directors of SemGroup Corporation of Tulsa, Oklahoma in November 2009, and served as Chairman
of its Audit Committee from November 2009 to May, 2015. In addition to continuing to serve on its Audit Committee, since May 2015,
Mr. Ballschmiede has served as Chairman of its Nominating and Governance Committee. SemGroup is a New York Stock Exchange company
that moves energy through a network of pipelines, terminals and storage tanks, primarily for independent oil and natural gas producers
in the United States, Canada, Mexico, and the United Kingdom. Mr. Ballschmiede holds a B.S. in Accounting from Northern Illinois
University and is a Certified Public Accountant.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0">Mr. Barzun has been an officer of the Company
for more than the last five years and also serves as general counsel to other companies from time to time on a part-time basis.
He is a member of the bar of New York and Massachusetts.</P>

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<P STYLE="font-size: 10pt; margin: 6pt 0; text-indent: 0in"><B>PART II</B></P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0"><A NAME="i5"></A><B>Item 5. Market for the Registrant&rsquo;s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities.</B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s common stock is traded
on the NASDAQ Global Select Market (&ldquo;NGS&rdquo;). The table below shows the market high and low closing sales prices of the
common stock for 2014 and 2015 by quarter.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; padding-left: 20pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center">High</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center">Low</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: 0.4pt; padding-left: 0pt">Year Ended December 31, 2014</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left; text-indent: 0in; padding-left: 20pt">First Quarter&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">11.63</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">8.67</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in; padding-left: 20pt">Second Quarter&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9.60</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6.78</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in; padding-left: 20pt">Third Quarter&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9.88</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7.46</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in; padding-left: 20pt">Fourth Quarter&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9.15</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5.67</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: 0in; padding-left: 0pt">Year Ended December 31, 2015</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in; padding-left: 20pt">First Quarter&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">6.41</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">2.41</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in; padding-left: 20pt">Second Quarter&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4.80</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3.26</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0.7pt; padding-left: 20pt">Third Quarter&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5.50</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3.72</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0.7pt; padding-left: 20pt">Fourth Quarter&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6.40</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3.87</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On February 29, 2016, there were 863 holders
of record of our common stock.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Dividend Policy</I></B><I>. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We have never paid any cash dividends
on our common stock. For the foreseeable future, we intend to retain any earnings in our business, and we do not anticipate paying
any cash dividends. Whether or not we declare any dividends will be at the discretion of the Board of Directors considering then-existing
conditions, including the Company&rsquo;s financial condition and results of operations, capital requirements, bonding prospects,
contractual restrictions (including those under the Company&rsquo;s equipment-based credit facility), business prospects and other
factors that our Board of Directors considers relevant.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0"><B><I>Equity Compensation Plan Information</I></B>.<B><I> </I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 13.5pt; margin: 5pt 0 2pt">Certain information about the Company's
equity compensation plans is incorporated into <I>Item 12. &mdash; Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters </I>from the Company's proxy statement for its 2016 Annual Meeting of Stockholders.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Performance Graph</I></B><I>. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The following graph compares the percentage
change in the Company&rsquo;s cumulative total stockholder return on its common stock for the last five years with the <I>Dow Jones
US Total Return Index</I>, a broad market index, and the <I>Dow Jones US Heavy Construction Index,</I> a group of companies whose
marketing strategy is focused on a limited product line, such as civil construction. Both indices are published in <I>The</I> <I>Wall
Street Journal.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The returns are calculated assuming that
an investment with a value of $100 was made in the Company&rsquo;s common stock and in each index at the end of 2010 and that all
dividends were reinvested in additional shares of common stock; however, the Company has paid no dividends during the periods shown.
The graph lines merely connect the measuring dates and do not reflect fluctuations between those dates. The stock performance shown
on the graph is not intended to be indicative of future stock performance.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

<P STYLE="font-size: 10pt; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B></B></P>

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<P STYLE="font-size: 10pt; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B></B></P>

<P STYLE="font-size: 10pt; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;<IMG SRC="return5yr.jpg" ALT=""></P>

<P STYLE="font-size: 10pt; margin: 0pt 0"></P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>



<P STYLE="font-size: 10pt; margin: 0pt 0"></P>

<P STYLE="font-size: 10pt; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse; font-size: 10pt">
<tr>
    <td nowrap style="vertical-align: bottom; width: 40%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-indent: 0in; layout-grid-mode: both">&nbsp;</td>
    <td nowrap style="vertical-align: bottom; width: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>December</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>2010 </b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>($)</b></P></td>
    <td nowrap style="vertical-align: bottom; width: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>December</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>2011 </b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>($)</b></P></td>
    <td nowrap style="vertical-align: bottom; width: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>December</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>2012 </b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>($)</b></P></td>
    <td style="vertical-align: top; width: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>December</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>2013 </b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>($)</b></P></td>
    <td style="vertical-align: top; width: 10%; border-top: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>December</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>2014 </b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>($)</b></P></td>
    <td style="vertical-align: top; width: 10%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>December</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>2015</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><b>($)</b></P></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td nowrap style="border-left: Black 1pt solid; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">Sterling Construction Company, Inc.&#9;</font></td>
    <td nowrap style="text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">100.00</font></td>
    <td nowrap style="text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">82.59</font></td>
    <td nowrap style="text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">76.23</font></td>
    <td style="text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">89.95</font></td>
    <td style="text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">49.00</font></td>
    <td style="border-right: Black 1pt solid; text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">46.63</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td nowrap style="border-left: Black 1pt solid; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">Dow Jones US Total Return Index&#9;</font></td>
    <td nowrap style="text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">100.00</font></td>
    <td nowrap style="text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">101.34</font></td>
    <td nowrap style="text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">117.89</font></td>
    <td style="text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">156.76</font></td>
    <td style="text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">177.06</font></td>
    <td style="border-right: Black 1pt solid; text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">178.18</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td nowrap style="border-bottom: Black 1pt solid; border-left: Black 1pt solid; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">Dow Jones US Heavy Construction Index&#9;</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">100.00</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">82.45</font></td>
    <td nowrap style="border-bottom: Black 1pt solid; text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">100.11</font></td>
    <td style="border-bottom: Black 1pt solid; text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">131.42</font></td>
    <td style="border-bottom: Black 1pt solid; text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">97.88</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; text-indent: 0in; layout-grid-mode: both"><font style="font-size: 10pt">86.60</font></td></tr>
</table>


<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Issuer Purchases of Equity Securities.</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In October 2008, the Company announced
a share-repurchase program to purchase up to $5 million in shares of common stock. In August 2010, the Company announced an increase
to the share-repurchase program to purchase an additional $5 million in shares of common stock, for a total up to $10 million.
The specific timing and amount of repurchase will vary based on market conditions, securities law limitations and other factors.
There were no repurchases of shares during the three months ended December 31, 2015.</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"><A NAME="i6"></A>Item 6. Selected Financial Data.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The following table sets forth selected
financial and other data of the Company and its subsidiaries and should be read in conjunction with both &ldquo;Item 7. Management&rsquo;s
Discussion and Analysis of Financial Condition and Results of Operations,&rdquo; which follows, and &ldquo;Item 8. Financial Statements
and Supplementary Data.&rdquo; Amounts are in thousands, except per share data:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="19" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 45%; font-size: 10pt; padding-bottom: 2.25pt">Revenues&#9;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">623,595</TD><TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">672,230</TD><TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">556,236</TD><TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">630,507</TD><TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">501,156</TD><TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">(Loss) income before income taxes and earnings attributable to noncontrolling interests&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(17,179</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(4,593</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(68,804</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">17,133</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(51,716</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Income tax (expense) benefit&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(7</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(632</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,222</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">579</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">17,012</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Net (loss) income</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(17,186</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,225</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(70,026</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">17,712</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(34,704</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Noncontrolling owners&rsquo; interests in earnings of subsidiaries&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,216</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(4,556</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,903</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(18,009</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,196</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Net loss attributable to Sterling common stockholders&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(20,402</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(9,781</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(73,929</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(297</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(35,900</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Net loss per share attributable to Sterling common stockholders:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Basic and diluted</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(2.02</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(0.54</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(4.91</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(0.26</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(2.24</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">Weighted average number of common shares outstanding used in computing per share amounts:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Basic and diluted</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">19,375</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,063</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,635</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,421</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,396</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Cash dividends declared&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Balance sheet:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Total assets&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">267,284</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">306,451</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">273,018</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">331,510</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">303,831</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Long-term debt&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">16,107</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">37,021</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">8,331</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">24,201</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">263</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Equity attributable to Sterling common stockholders&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">95,845</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">133,686</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">128,893</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">210,148</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">213,311</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Book value per share of outstanding common stock attributable to Sterling common stockholders&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">4.85</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">7.11</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">7.74</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">12.74</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">13.07</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">Shares outstanding&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">19,753</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,803</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,658</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,495</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,321</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>&nbsp;</B></P>

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<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><A NAME="i7"></A><B>Item 7. Management&rsquo;s Discussion and Analysis
of Financial Condition and Results of Operations</B>.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Overview</I></B><I>.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We are a company that operates in one segment,
heavy civil construction, through our subsidiaries, and which specializes in the building and reconstruction of transportation
and water infrastructure in Texas, Utah, Nevada, Colorado, Arizona, California, Hawaii and other states in which there are profitable
construction opportunities. Its transportation infrastructure projects include highways, roads, bridges, airfields, ports and light
rail. Its water infrastructure projects include water, wastewater and storm drainage systems. We have strategically expanded our
operations, either by establishing an office in a new market, often after having successfully bid on and completed a project in
that market, or by acquiring a company that gives us an immediate entry into a market.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Critical Accounting Policies</I></B><I>.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On an ongoing basis, the Company evaluates
the critical accounting policies used to prepare its consolidated financial statements, including, but not limited to, those related
to:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 5pt; margin-bottom: 2pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Revenue recognition</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 5pt; margin-bottom: 2pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Contracts receivable, including retainage</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 5pt; margin-bottom: 2pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Valuation of long-lived assets and goodwill</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 5pt; margin-bottom: 2pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Income taxes</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 5pt; margin-bottom: 2pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Segment reporting</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our significant accounting policies are
described in Note&nbsp;1 to the consolidated financial statements, and conform to the Financial Accounting Standards Board&rsquo;s
Accounting Standards Codification (or GAAP or ASC).</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Use of Estimates.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The preparation of financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Certain of the Company&rsquo;s accounting policies require higher degrees of judgment
than others in their application. These include the recognition of revenue and earnings from construction contracts under the percentage-of-completion
method, the valuation of long-lived assets (including goodwill), and income taxes. Management continually evaluates all of its
estimates and judgments based on available information and experience; however, actual amounts could differ from those estimates.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><I>Revenue Recognition.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The majority of our construction contracts
with our customers are &ldquo;fixed unit price.&rdquo; Under such contracts, we are committed to providing materials or services
required by a contract at fixed unit prices (for example, dollars per cubic yard of concrete poured or per cubic yard of earth
excavated). Most of our state and municipal contracts provide for termination of the contract for the convenience of the owner,
with provisions to pay us only for work performed through the date of termination.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Revenue from these construction contracts
is recognized using the percentage-of-completion accounting method. Under this method, revenue is recognized as costs are incurred
in an amount equal to cost plus the related expected profit based on the ratio of costs incurred to estimated final costs. This
cost to cost measure is used because management considers it to be the best available measure of progress on these contracts. Contract
costs consist of direct costs on contracts, including labor, materials, amounts payable to subcontractors and those indirect costs
related to contract performance, such as indirect salaries and wages, equipment maintenance, repairs, fuel and depreciation, insurance
and payroll taxes. Contract cost is recorded as incurred, and revisions in contract revenue and cost estimates are reflected in
the accounting period when known. Provisions for estimated losses on uncompleted contracts are made in the period in which such
losses are determined. Changes in job performance, job conditions and estimated profitability, including those changes arising
from contract change orders, penalty provisions and final contract settlements may result in revisions to costs and income and
are recognized in the period in which the revisions are determined.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Change orders are modifications of an original
contract that effectively change the existing provisions of the contract without adding new scope or terms. Change orders may include
changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of
the work. Either we or our customers may initiate change orders.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company considers unapproved change
orders to be contract variations for which we have customer approval for a change of scope but a price change associated with the
scope change has not yet been agreed upon. Costs associated with unapproved change orders are included in the estimated cost to
complete the contracts and are treated as project costs as incurred. The Company recognizes revenue equal to costs incurred on
unapproved change orders when realization of price approval is probable. Unapproved change orders involve the use of estimates,
and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting
periods to reflect changes in estimates or final agreements with customers. Change orders that are unapproved as to both price
and scope are evaluated as claims.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company considers claims to be amounts
in excess of agreed contract prices that we seek to collect from our customers or others for customer-caused delays, errors in
specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope
and price, or other causes of unanticipated additional contract costs. Claims are included in the calculation of revenue when realization
is probable and amounts can be reliably determined. To support these requirements, the existence of the following items must be
satisfied: 1. The contract or other evidence provides a legal basis for the claim; or a legal opinion has been obtained, stating
that under the circumstances there is a reasonable basis to support the claim; 2. Additional costs are caused by circumstances
that were unforeseen at the contract date and are not the result of deficiencies in the contractor&rsquo;s performance; 3. Costs
associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work performed; and 4. The
evidence supporting the claim is objective and verifiable, not based on management&rsquo;s feel for the situation or on unsupported
representations. Revenues in excess of contract costs incurred on claims are recognized when an agreement is reached with customers
as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated
with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our contracts generally take 12 to 36 months
to complete. The Company generally provides a one to two-year warranty for workmanship under its contracts when completed. Warranty
claims historically have been insignificant.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The accuracy of our revenue and profit
recognition in a given period is dependent on the accuracy of our estimates of the revenues and costs to finish uncompleted contracts.
Our estimates for all of our significant contracts use a highly detailed &ldquo;bottom up&rdquo; approach. However, our projects
can be highly complex, and in almost every case, the profit margin estimates for a contract will either increase or decrease to
some extent from the amount that was originally estimated at the time of bid. Because we have a large number of projects of varying
levels of size and complexity in process at any given time, these changes in estimates can sometimes offset each other without
materially impacting our overall profitability. However, large changes in revenue or cost estimates can have a significant effect
on profitability. There are a number of factors that can contribute to changes in estimates of contract cost and profitability.
The most significant of these include the completeness and accuracy of the original bid, recognition of costs associated with scope
changes, extended overhead due to customer-related and weather-related delays, subcontractor and supplier performance issues, site
conditions that differ from those assumed in the original bid (to the extent contract remedies are unavailable), the availability
and skill level of workers in the geographic location of the project and changes in the availability and proximity of materials.
The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins,
may cause fluctuations in gross profit between periods, and these fluctuations may be significant. Results for 2015, 2014 and 2013
were adversely affected by revisions to estimated profitability on a number of construction projects. See &ldquo;Recent Developments
&#8213; Financial Results for 2015, Operational Issues and Outlook for 2016 Financial Results&rdquo; above and &ldquo;Results of
Operations &#8213; Fiscal Year Ended December 31, 2015 Compared with Fiscal Year Ended December 31, 2014&rdquo; for further discussion
of the impact on our financial results.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 5pt 0 2pt"><I>Contracts Receivable, Including Retainage.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Contracts receivable are generally based
on amounts billed to the customer and currently due in accordance with our contracts. Many of the contracts under which the Company
performs work contain retainage provisions. Retainage refers to that portion of billings made by the Company but held for payment
by the customer pending satisfactory completion of the project. Retainage on active contracts is classified as a current asset
regardless of the term of the contract and is generally collected within one year of the completion of a contract. At December
31, 2015 and 2014, contracts receivable included $19.8 million and $16.4 million of retainage, respectively, which is being contractually
withheld by customers until completion of the contracts.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">There are certain contracts that are completed
in advance of full payment. When the receivable will not be collected within our normal operating cycle, we consider it a long-term
contract receivable and it is recorded in &ldquo;Other assets, net&rdquo; in our balance sheet. At December 2015 and 2014, there
was zero and $5.0 million recorded, respectively. We considered the credit quality of the borrower to assess the appropriate discount
rate to apply and continuously monitor the borrower&rsquo;s credit quality.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">As the majority of our construction contracts
are entered into with state or municipal government customers, credit risk is minimal. The Company ascertains that funds have been
appropriated by the governmental project owner prior to commencing work on such projects. While most public contracts are subject
to termination at the election of the government entity, in the event of termination the Company is entitled to receive the contract
price for completed work and reimbursement of termination-related costs. Credit risk with private owners is minimized because of
statutory mechanics liens, which give the Company high priority in the event of lien foreclosures following financial difficulties
of private owners.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Contracts receivable are written off based
on individual credit evaluation and specific circumstances of the customer, when such treatment is warranted. There was minimal
bad debt expense recorded in 2015 and no bad debt expense recoded in 2014. In 2013, the Company wrote off $1.8 million of contracts
receivable to bad debt expense which was recorded in &ldquo;Other operating (expense) income, net.&rdquo; During 2014, we recovered
$1.0 million of this $1.8 million.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Based upon a review of outstanding contracts
receivable, historical collection information and existing economic conditions, management has determined that substantially all
of contracts receivable at December 31, 2015 are fully collectible, and accordingly, an immaterial allowance for doubtful accounts
against contracts receivable was recorded.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Valuation of Long-Lived Assets and Goodwill.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Long-lived assets, which include property,
equipment and acquired intangible assets, including goodwill, are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Impairment evaluations involve fair values and management
estimates of useful asset lives and future cash flows. Actual useful lives and cash flows could be different from those estimated
by management, and this could have a material effect on operating results and financial position. For the year ended December 31,
2015, there were no events or changes in circumstances that would indicate a material impairment of our long-lived assets. For
the year ended December 31, 2014, there was no impairment of our long-lived assets.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Goodwill must be tested for impairment
at least annually, and we performed our most recent annual impairment test of historical goodwill on October 1, 2015. Based on
our one reporting unit, our test indicated there was no impairment of goodwill. See &ldquo;Segment Reporting&rdquo; below for further
information regarding the determination of our reporting unit. Note 8 to the consolidated financial statements discusses the two
valuation approaches used by the Company to determine the fair value of the Company&rsquo;s equity for purposes of evaluating whether
there is an indication of goodwill impairment. These valuation approaches are impacted by a number of factors but the key factors
are the Company&rsquo;s stock price, the estimated control premium and our estimated forecast of future cash flows. The valuation
approaches contain uncertainty regarding the estimates used. One of the largest uncertainties relates to local, state and government
spending which management expects to increase in the upcoming years. There are a number of other uncertainties with respect to
our future financial performance that could impact estimated future cash flows. These are discussed in a number of places including
&ldquo;Item 1A. Risk Factors.&rdquo; We determined that the fair value of the Company&rsquo;s equity was approximately 21% and
13% above the carrying value of the Company&rsquo;s equity at December 31, 2015 and 2014, respectively. At December 31, 2015, we
had goodwill with a remaining carrying amount of approximately $54.8 million.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Income Taxes.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Deferred tax assets and liabilities are
recognized based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities.
We regularly review our deferred tax assets for recoverability and, where necessary, establish a valuation allowance.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Valuation allowances are established to
reduce deferred tax assets if we determine that it is more likely than not (e.g., a likelihood of more than 50%) that some or all
of the deferred tax assets will not be realized in future periods. To assess the likelihood, we use estimates and judgment regarding
our future taxable income, as well as the jurisdiction in which this taxable income is generated, to determine whether a valuation
allowance is required. Such evidence can include our current financial position, our results of operations, both actual and forecasted
results, the reversal of deferred tax liabilities, and tax planning strategies as well as the current and forecasted business economics
of our industry. Additionally, we record uncertain tax positions at their net recognizable amount, based on the amount that management
deems is more likely than not to be sustained upon ultimate settlement with the tax authorities in the domestic and international
tax jurisdictions in which we operate. On the basis of our evaluations, at December 31, 2015 and 2014, a full valuation allowance
was recorded on our net deferred tax assets and we had no material uncertain tax positions.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">If our estimates or assumptions regarding
our current and deferred tax items are inaccurate or are modified, these changes could have potentially material impacts on our
earnings.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><I>Segment Reporting.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We operate in one segment and have only
one reportable segment and one reporting unit component, which is heavy civil construction. In making this determination, the Company
considered the discrete financial information used by our Chief Operating Decision Maker (&ldquo;CODM&rdquo;). Based on this approach,
the Company noted that the CODM organizes, evaluates and manages the financial information around each heavy civil construction
project when making operating decisions and assessing the Company&rsquo;s overall performance. The service provided by the Company,
in all instances of our construction projects, is heavy civil construction. Furthermore, we considered that each heavy civil construction
project has similar characteristics, includes similar services, has similar types of customers and is subject to similar economic
and regulatory environments which would allow aggregation of individual operating segments into one reportable segment if multiple
operating segments existed.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In addition, the Company noted that even
if our local offices were to be considered separate components of our heavy civil construction operating segment, those components
could be aggregated into a single reporting unit for purposes of testing goodwill for impairment because our local offices all
have similar economic characteristics and are similar in all of the following areas:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The nature of the products and services&nbsp;&mdash; each of our local offices perform similar
construction projects&nbsp;&mdash; they build, reconstruct and repair roads, highways, bridges, airfields, ports, light rail and
water, waste water and storm drainage systems.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The nature of the production processes&nbsp;&mdash; our heavy civil construction services rendered
in the construction process for each of our construction projects performed by each local office is the same&nbsp;&mdash; they
excavate dirt, remove existing pavement and pipe, lay aggregate or concrete pavement, pipe and rail and build bridges and similar
large structures in order to complete our projects.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The type or class of customer for products and services&nbsp;&mdash; substantially all of our customers
are state departments of transportation, cities, counties, and regional water, rail and toll-road authorities. A substantial portion
of the funding for the state departments of transportation to finance the projects we construct is furnished by the federal government.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The methods used to distribute products or provide services&nbsp;&mdash; the heavy civil construction
services rendered on our projects are performed primarily with our own field work crews (laborers, equipment operators and supervisors)
and equipment (backhoes, loaders, dozers, graders, cranes, pug mills, crushers, and concrete and asphalt plants).</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The nature of the regulatory environment&nbsp;&mdash; we perform substantially all of our projects
for federal, state and municipal governmental agencies, and all of the projects that we perform are subject to substantially similar
regulation under U.S.&nbsp;and state department of transportation rules, including prevailing wage and hour laws; codes established
by the federal government and municipalities regarding water and waste water systems installation; and laws and regulations relating
to workplace safety and worker health of the U.S.&nbsp;Occupational Safety and Health Administration and to the employment of immigrants
of the U.S.&nbsp;Department of Homeland Security.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">While profit margin objectives included
in contract bids have some variability from contract to contract, our profit margin objectives are not differentiated by our CODM
or our office management based on local office location. Instead, the projects undertaken by each local office are primarily competitively-bid,
fixed unit or negotiated lump sum price contracts, all of which are bid based on achieving gross margin objectives that reflect
the relevant skills required, the contract size and duration, the availability of our personnel and equipment, the makeup and level
of our existing backlog, our competitive advantages and disadvantages, prior experience, the contracting agency or customer, the
source of contract funding, anticipated start and completion dates, construction risks, penalties or incentives and general economic
conditions.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Results of Operations</I></B><I>.<B> </B></I></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Backlog at December 31, 2015.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At December 31, 2015, our backlog of construction
projects was $761 million, as compared to $764 million at December 31, 2014. Our contracts are typically completed in 12 to 36&nbsp;months.
At December 31, 2015 and 2014, there was approximately $197&nbsp;million and $24 million, respectively, excluded from our consolidated
backlog where we were the apparent low bidder, but had not yet been formally awarded the contract or the contract price had not
been finalized. Backlog includes $12 million attributable to our share of estimated revenues related to joint ventures where we
are a noncontrolling joint venture partner<FONT STYLE="font-size: 10pt">. </FONT></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We expect that our markets will continue
to improve, driven by the conditions discussed in &ldquo;Item 1. Business.&rdquo; Furthermore, we believe that the Company is well-established
in our particular markets and has management depth and experience which gives us the ability to perform a broad range of work that
will allow us to succeed in current market conditions and to continue to compete successfully for projects as they become available
at acceptable profit margin levels. See &ldquo;Item 1. Business&nbsp;&mdash; Our Markets and Customers&rdquo; for a more detailed
discussion of our markets and their funding sources.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0 0 0.25in"><I></I></P>

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<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0 0 0.25in"><I>Fiscal Year Ended December 31, 2015 Compared with Fiscal
Year Ended December 31, 2014</I></P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0 0 0.25in"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; border-bottom: Black 1pt solid; text-align: center">% Change</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; text-align: center">(Dollar amounts in thousands)</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; font-size: 10pt; padding-bottom: 2.25pt">Revenues&#9;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">623,595</TD><TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">672,230</TD><TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; padding-bottom: 2.25pt; font-size: 10pt; text-align: right">(7.2</TD><TD STYLE="width: 1%; padding-bottom: 2.25pt; font-size: 10pt; text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Gross profit&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">28,953</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">32,421</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(10.7</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">General and administrative expenses&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(41,880</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(36,897</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">13.5</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0in">Other operating (expense) income, net&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,460</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">252</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Operating loss&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(14,387</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,224</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Interest income&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">460</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">754</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(39.0</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Interest expense&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,012</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,123</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Loss on extinguishment of debt&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(240</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Loss before income taxes and earnings attributable to noncontrolling interests&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(17,179</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,593</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Income tax expense&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(7</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(632</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">(98.9</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Net loss&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(17,186</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,225</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Noncontrolling owners&rsquo; interests in earnings of subsidiaries&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,216</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(4,556</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">(29.4</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Net loss attributable to Sterling common stockholders&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(20,402</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(9,781</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Gross margin&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">4.6</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">4.8</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">(4.2</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Operating margin (deficit)&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(2.3</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)%</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(0.6</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)%</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Contract backlog, end of year</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">761,000</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">764,000</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">(0.4</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt"><I>NM &ndash; Not meaningful.</I></FONT></P>


<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Revenues. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Revenues for 2015 decreased 7.2% compared with
the prior year. This decrease is primarily attributable to the downward percent-complete revisions made to certain projects in
the first quarter of 2015, largely related to construction projects in Texas, combined with the completion of certain large projects
in Texas which were ongoing in 2014 and a $2.8 million out-of-period decrease in revenue that was recorded in the first quarter
of 2015 as a result of our first quarter review of projects.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Gross profit. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Gross profit decreased $3.5 million in 2015
compared with the prior year. Gross margin also decreased to 4.6% in 2015 from 4.8% in 2014 primarily as a result of the downward
percent-complete revisions made to certain projects in the first quarter of 2015, largely related to construction projects in Texas.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">While there are a number of factors which cause
the costs incurred and gross profit realized on our contracts to vary, sometimes substantially, from our original projections,
the primary factors which resulted in downward revisions in estimates in 2015 were:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 35pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">conditions or contract requirements that differed
from those assumed in the original bid or contract;</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 35pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">delays in taking measures to address issues which
arose during construction; and</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 35pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">subcontractor performance issues and vendor material
spot shortages which caused project progress delays.</FONT></TD>
</TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We may be entitled to claim proceeds related
to customer-caused delays, errors in specification and designs or other causes of unanticipated additional costs related to certain
projects; however, we cannot predict the amount of claim proceeds or the timing of the receipt of such proceeds. Claims are included
in the calculation of revenue when realization is probable and amounts can be reliably determined to the extent costs are incurred.
Revenues in excess of contract costs incurred on claims are recognized when an agreement is reached with customers as to the value
of the claims, which in some instances may not occur until after completion of work under the contract.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">At December 31, 2015, we had approximately
104 contracts-in-progress which were less than 90% complete of various sizes, of different expected profitability and in various
stages of completion. The nearer a contract progresses toward completion, the more visibility we have in refining our estimate
of total revenues (including incentives, delay penalties and change orders), costs and gross profit. Thus gross profit as a percent
of revenues can increase or decrease from comparable and sequential quarters due to variations among contracts and depending upon
the stage of completion of contracts.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><I>Other operating (expense) income, net.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0pt 0">Other operating (expense) income, net, includes
50% of earnings and losses related to members&rsquo; interests, gains and losses from sales of property, plant and equipment, and
other miscellaneous operating income or expense. Members&rsquo; interest earnings are treated as an expense while losses are treated
as income as earnings would increase the amount in our liability account &ldquo;Members&rsquo; interest subject to mandatory redemption
and undistributed earnings,&rdquo; and losses would decrease this liability. The decrease of $1.8 million, to other operating expense
of $1.5 million in 2015 from other operating income of $0.3 million in 2014, is primarily the result of an increase in Members&rsquo;
interest earnings.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0"><I>General and administrative expenses. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0pt 0">General and administrative expenses increased
$5.0 million during 2015 to $41.9 million from $36.9 million in 2014. This increase is primarily the result of certain non-recurring
costs related to consulting services performed and employee severance payments of $1.2 million and $2.9 million, respectively,
recognized in 2015.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0">As a percentage of revenues, general and administrative expenses increased to 6.7% in 2015 from 5.5%
in 2014. The increases in general and administrative expenses, as a percentage of revenue, are primarily the result of the non-recurring
consulting services and employee severance costs paid during 2015 and the decline in revenue mentioned above. Excluding these
non-recurring costs, general and administrative expenses would have been 6.0% in 2015.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Income taxes. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Our effective income tax rates for 2015 and
2014 were minimal and (13.8)%, respectively. In 2015 and in 2014, our effective income tax rate varied from the statutory rate
primarily as a result of our deferred tax asset valuation allowance.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">In order to determine that a valuation allowance
was necessary, management assessed the available positive and negative evidence to estimate whether sufficient future taxable income
would be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the
cumulative loss incurred over the three-year period ended December 31, 2015. The cumulative three-year period loss that ended in
the fourth quarter of 2015 was the result of the write-downs recorded during the past three years. Such objective evidence limits
the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as
of December 31, 2015, a full valuation allowance of $56.4 million has been recorded on our net deferred tax assets including federal
and state net operating loss carryforwards as they are not likely to be realized. The amount of the deferred tax asset considered
realizable could be adjusted if objective negative evidence is no longer present and additional weight may be given to subjective
evidence such as our projections for growth.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Net income attributable to noncontrolling interests.
</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">The decrease of $1.4 million to $3.2 million
from $4.6 million in net income attributable to noncontrolling interest owners for the year ended December 31, 2015 compared with
same period in 2014 is primarily related to net income attributable to the 50% noncontrolling interest in Myers. Approximately
$0.5 million of the $1.4 million decrease related to the accounting treatment which was the result of entering into a new agreement
in November 2015. The accounting treatment now requires noncontrolling interest earnings of certain members to flow through &ldquo;Other
(expense) income, net&rdquo; in our consolidated statement of operations, (refer to Note 2 in our consolidated financial statements),
and the remaining $0.9 million was primarily related to a slight decline in gross profits for the year.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0 0 0 0.25in"></P>

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<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0 0 0 0.25in"><I>Fiscal Year Ended December 31, 2014 Compared with Fiscal
Year Ended December 31, 2013</I></P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0 0 0 0.25in">&nbsp;</P>


<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">% Change</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; text-align: center">(Dollar amounts in thousands)</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; font-size: 10pt; padding-bottom: 2.25pt; text-indent: -0.25in; padding-left: 0.25in">Revenues</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">672,230</TD><TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">556,236</TD><TD STYLE="width: 1%; border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; padding-bottom: 2.25pt; font-size: 10pt; text-align: right">20.9</TD><TD STYLE="width: 1%; padding-bottom: 2.25pt; font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Gross profit (loss)&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">32,421</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(29,944</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -0.25in; padding-left: 0.25in">General and administrative expenses&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(36,897</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(40,951</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(9.9</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in">Other operating income, net&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">252</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,737</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">(85.5</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Operating loss&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,224</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(69,158</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(93.9</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Gains on sale of securities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">91</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Interest income&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">754</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">879</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(14.2</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in">Interest expense&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,123</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(616</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">82.3</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Loss before income taxes and earnings attributable to noncontrolling interests&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,593</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(68,804</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(93.3</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in">Income tax expense&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(632</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,222</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">(48.3</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Net loss&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,225</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(70,026</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(92.5</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in">Noncontrolling owners&rsquo; interests in earnings of subsidiaries and joint ventures&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(4,556</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,903</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">16.7</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: -12.5pt; padding-left: 12.5pt">Net loss attributable to Sterling common stockholders&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(9,781</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(73,929</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">(86.8</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: -12.5pt; padding-left: 12.5pt">Gross margin (deficit)&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">4.8</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(5.4</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)%</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">&nbsp;NM</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: -0.25in; padding-left: 0.25in">Operating deficit&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(0.6</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)%</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(12.5</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)%</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">(95.2</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: -13.8pt; padding-left: 13.8pt">Contract backlog, end of year</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">764,000</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">687,000</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">11.2</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt"><I>NM &ndash; Not meaningful.</I></FONT></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Revenues. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Revenues for 2014 increased 20.9% compared
with prior year. This increase is primarily attributable to an increase in the number of projects in progress, largely in our Texas
and California markets. However, this increase in revenue was weaker than we anticipated, primarily in our California, Utah and
Hawaii markets. The 2013 revenues were adversely affected by the completion of large projects in Utah and to a lesser extent the
completion of significant projects in Arizona.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Gross profit. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Gross profit increased $62.4 million in 2014
compared with the prior year. Gross margin also increased to 4.8% in 2014 from (5.4)% in 2013 primarily due to net downward revisions
of estimated revenues and gross margins on construction projects in Texas and Arizona in the prior year. In 2014, timing and weather
issues impacted some large projects in our Hawaii and California operations, while spot shortages of commodities, over-stretched
sub-contractors and vendors, and intense competition for craft labor continued to pressure our Texas operations which led to a
less than anticipated gross profit.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">While there are a number of factors which cause
the costs incurred and gross profit realized on our contracts to vary, sometimes substantially, from our original projections,
the primary factors which resulted in downward revisions in estimates in 2014 were:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">conditions or contract requirements that differed
from those assumed in the original bid or contract;</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">delays in taking measures to address issues which
arose during construction;</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">subcontractors performance issues and vendor material
spot shortages which caused project progress delays; and</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">shortage of skilled labor, particularly in our Texas
market.</FONT></TD>
</TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We may be entitled to claim proceeds related
to customer-caused delays, errors in specification and designs or other causes of unanticipated additional costs related to certain
projects; however, we cannot predict the amount of claim proceeds or the timing of the receipt of such proceeds. Claims are included
in the calculation of revenue when realization is probable and amounts can be reliably determined to the extent costs are incurred.
Revenue in excess of contract costs incurred on claims are recognized when an agreement is reached with customers as to the value
of the claims, which in some instances may not occur until after completion of work under the contract.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">At December 31, 2014, we had approximately
116 contracts-in-progress which were less than 90% complete of various sizes, of different expected profitability and in various
stages of completion. The nearer a contract progresses toward completion, the more visibility we have in refining our estimate
of total revenues (including incentives, delay penalties and change orders), costs and gross profit. Thus gross profit as a percent
of revenues can increase or decrease from comparable and sequential quarters due to variations among contracts and depending upon
the stage of completion of contracts.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><I>General and administrative expenses. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">General and administrative expenses decreased
$4.1 million during 2014 to $36.9 million from $41.0 million in 2013. This decrease is due to certain non-recurring costs in 2013
related to employee benefit costs, as well as costs associated with the evaluation and pursuit of potential acquisition opportunities.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">As a percentage of revenues, general and administrative
expenses decreased to 5.5% in 2014 from 7.4% in 2013. The decrease in the 2014 percentage as compared to 2013 percentage is the
result of the decrease in expenses mentioned above and the result of investments made in 2013 in our information systems infrastructure
and operational and financial process improvements which allowed us to increase our efficiency without a significant increase in
general and administrative expenses.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Income taxes. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Our effective income tax rates for 2014 and
2013 were (13.8)% and (1.8)%, respectively. In 2014 and in 2013, our effective income tax rate varied from the statutory rate primarily
as a result of our deferred tax asset valuation allowance.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">In order to determine that a valuation allowance
was necessary, management assessed the available positive and negative evidence to estimate whether sufficient future taxable income
would be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the
cumulative loss incurred over the three-year period ended December 31, 2014. The cumulative three-year period loss that ended in
the fourth quarter of 2014 was the result of the write-downs recorded during the past three years. Such objective evidence limits
the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as
of December 31, 2014, a full valuation allowance of $37.8 million has been recorded on our net deferred tax assets including federal
and state net operating loss carryforwards as they are not likely to be realized. The amount of the deferred tax asset considered
realizable could be adjusted if objective negative evidence is no longer present and additional weight may be given to subjective
evidence such as our projections for growth.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Net income attributable to noncontrolling interests.
</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">The increase of $0.7 million to $4.6 million
from $3.9 million in net income attributable to noncontrolling interest owners for the year ended December 31, 2014 compared with
same period in 2013 is primarily related to net income attributable to the 50% noncontrolling interest in Myers. Operations at
the Myers subsidiary are conducted primarily in California where Myers has seen significant growth.</P>

<P STYLE="margin: 6pt 0; font-size: 10pt; font-weight: bold; text-indent: 0in"></P>

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<P STYLE="margin: 6pt 0; font-size: 10pt; font-weight: bold; text-indent: 0in"><I>Liquidity and Sources of Capital.</I></P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 5pt 0 0">The following table sets forth information about our cash flows and
liquidity (amounts in thousands):</P>

<P STYLE="font-size: 10pt; text-indent: 0.5in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-indent: 0.5in; margin: 0 0 0 0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Net cash (used in) provided by:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Operating activities&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">8,969</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(10,513</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Investing activities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,488</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,431</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in">Financing activities&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(22,898</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">38,915</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: -0.25in; padding-left: 30pt">Total (decrease) increase in cash and cash equivalents&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(18,417</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">20,971</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="font-size: 10pt; text-indent: 0.5in; margin: 0 0 0 0.25in"></P>





<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left; text-indent: 0in">Cash and cash equivalents&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">4,426</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">22,843</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Working capital&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">30,274</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">52,324</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Operating Activities.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During 2015, net cash provided by operating
activities was $9.0 million. The drivers of operating activities cash flows were primarily the result of our net loss discussed
above, non-cash items, the change in our accounts receivable, inventory, net contracts in progress and accounts payable balances
(collectively, &ldquo;Contract Capital&rdquo;), and the change in other assets as discussed below.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The significant non-cash items included
in operating activities include depreciation and amortization expense which was $16.5 million in 2015 and $18.3 million in 2014.
Depreciation expense has decreased from 2014 to 2015 as a result of our efforts to maintain our current fleet of equipment and
supplement it as necessary with more economical project specific leased equipment.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The need for working capital for our business
varies due to fluctuations in operating activities and investments in our Contract Capital. The Components of Contract Capital
at December 31, 2015 and 2014 and changes during 2015 were as follows (amounts in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31,</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Change</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; font-size: 10pt; text-align: left">Costs and estimated earnings in excess of billings on uncompleted contracts&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">26,905</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">33,403</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">6,498</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Billings in excess of costs and estimated earnings on uncompleted contracts&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(30,556</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(25,649</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">4,907</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Contracts in progress, net <BR></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,651</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,754</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">11,405</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Contracts receivable, including retainage&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">82,112</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">78,896</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,216</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Receivables from and equity in construction joint ventures&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,930</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,153</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,777</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Inventories&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,535</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,401</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,866</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Accounts payable&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(58,959</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(66,792</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(7,833</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; padding-left: 10pt">Contract Capital, net&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">34,967</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">36,412</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">1,445</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The 2015 change in Contract Capital increased
liquidity by $1.4 million. Fluctuations in our Contract Capital balance, and its components, are not unusual in our business and
are impacted by the size of our projects and changing type and mix of projects in our backlog. Our Contract Capital is particularly
impacted by the timing of new awards and related payments of performing work, and the contract billings to the customer as we
complete our projects. Contract Capital is also impacted at period-end by the timing of accounts receivable collections and accounts
payable payments for our projects.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Other assets decreased $8.1 million and $3.7
million, excluding the change in inventories, in 2015 and 2014, respectively. The decrease during 2015 is primarily the result
of the sale of our long-term receivable which we sold for $7.1 million with a loss of $1.4 million (refer to Note 1 in our consolidated
financial statements).</P>



<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Investing Activities.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During 2015, net cash used in investing activities
was $4.5 million. The drivers of investing activities cash flows were due to investments in capital equipment and restricted cash
as discussed below.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Capital equipment is acquired as needed to support changing levels of production activities and to replace
retiring equipment. Expenditures for the replacement of certain equipment and to expand our construction fleet totaled $10.8 million
in 2015 which includes $2.7 million of financed capital expenditures. Proceeds from the sale of property and equipment totaled
<FONT STYLE="font-size: 10pt">$8.5 million for 2015 with an associated net gain of $1.5 million. For the year ended December 31,
2014, capital expenditures totaled $16.7 million, which included $3.2 million of financed capital expenditures, respectively,
while proceeds from the sale of property and equipment totaled $6.1 million with an associated net gain of $1.0 million. The level
of expenditures in 2015 decreased by $5.9 million from 2014 as a result of management&rsquo;s efforts to optimize utilization
of our existing fleet of equipment based on current and projected workloads while supplementing our fleet with leased and financed
equipment as needed.</FONT></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0pt 0">Restricted cash of approximately $3.0 million
is designated as collateral for a standby letter of credit in the same amount in accordance with contractual agreements and restricted
cash of approximately $2.0 million represents cash deposited by a customer, for the benefit of the Company, in an escrow account
which is restricted until the customer releases the restriction upon the completion of the job.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Financing Activities.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During 2015, net cash used in financing activities
was $22.9 million. The drivers of financing activities cash flows were primarily due to the change of our prior credit facility
with Comerica Bank, N.A. (&ldquo;Prior Credit Facility&rdquo;), usage and repayment of our equipment-based revolver and distributions
to owners as discussed below.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Financing activities in 2015 consisted
of <FONT STYLE="font-size: 10pt">the net repayments on our Prior Credit Facility of $34.6 million and cumulative drawdowns and
repayments on our equipment-based revolver of $14.6 million and cash received from our equipment-based term loan of $18.0 million,
net of repayments, both of which were used to fund our operating activities and replace our Prior Credit Facility. Distributions
to noncontrolling interest owners were $3.4 million for the year. Financing activities in 2014 consisted of net proceeds from
our common stock offering of $14.0 million, which was used for working capital purposes. In addition, the net drawdown on our
Prior Credit Facility of $26.8 million was used to fund our operating activities. Distributions to noncontrolling interest owners
were $1.2 million for the year.</FONT></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"><FONT STYLE="font-size: 10pt"></FONT></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0pt 0"><I>Cash and Working Capital.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Cash at December 31, 2015, was $4.4 million
which decreased based on the items mentioned above. Our working capital decreased $22.0 million to $30.3 million from $52.3 million
at December 31, 2015 and 2014, respectively, primarily due to our $20.4 million net loss attributable to Sterling common stockholders
in 2015.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0pt 0 0pt 0.25in"><I>Credit Facility and Other Sources of Capital</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In addition to our available cash, cash equivalents
and cash provided by operations, from time to time, we use borrowings under our available credit or equipment-based credit facilities
to finance our capital expenditures and working capital needs.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In May 2015, the Company and its wholly-owned
subsidiaries entered into a $40.0 million loan and security agreement with Nations Equipment Finance, LLC (&ldquo;Nations&rdquo;),
consisting of a $20.0 million term loan and a $20.0 million Revolving Loan (combined, the &ldquo;Equipment-based Facility&rdquo;),
which replaced the Company&rsquo;s Prior Credit Facility. The amount of the Revolving Loan that may be borrowed from time to time
is determined quarterly and may not exceed $20.0 million. In addition, the sum of the outstanding balances of the Equipment-based
Facility may not exceed the lesser of $40.0 million or 65% of the appraised value of the collateral pledged for the loans. At December
31, 2015, the Company had approximately a borrowing base of $29.6 million, which was the result of calculating 65% of the appraised
value (where appraised value equals net operating liquidated value) of the Company&rsquo;s collateral. The Revolving Loan may be
utilized to provide ongoing working capital and for other general corporate purposes. At December 31, 2015, we had $18.0 million
outstanding on the Term Loan, zero drawn on the Revolving Loan, and $11.6 million of borrowings available.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Equipment-based Facility bears interest
at an initial fixed annual rate of 12%, which is subject to (i) a decrease of up to two percentage points based on the Company's
fixed charge coverage ratio for each of the most recently ended four quarters beginning with the four quarters ending June 30,
2016; and (ii) an increase of up to two percentage points beginning December 31, 2015 based on the fixed charge coverage ratio
at the end of the following four quarters. Principal on the Term Loan is payable in 47 monthly installments (with accrued interest)
with a final payment of the then outstanding principal amount on May 29, 2019. Up to $5.0 million of the Term Loan may be prepaid
in any year, but subject to a pre-payment fee that declines as the Term Loan nears maturity. Outstanding Revolving Loans are payable
in full thirty days before the maturity date of the Term Loan.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Equipment-based Facility is secured by
all of the Company's personal property except accounts receivable, including all of its construction equipment, which forms the
basis of availability under the Revolving Loan. The Equipment-based Facility is also secured by one-half of the equipment of the
Company's 50%-owned affiliates, Road and Highway Builders, LLC and Myers &amp; Sons Construction, L.P. pursuant to a separate security
agreement with those entities. If a default occurs, Nations may exercise the Company's rights in the collateral, with all of the
rights of a secured party under the Uniform Commercial Code, including, among other things, the right to sell the collateral at
public or private sale.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The proceeds of the Term Loan of $20.0 million
and our initial draw of $14.6 million under the Revolving Loan were utilized by the Company to repay the balance outstanding and
terminate the Prior Credit Facility and for other general corporate purposes. In addition, in connection with incurring this debt,
we recorded $1.3 million in deferred debt issuance costs, which are included in &ldquo;Other assets, net&rdquo; in our consolidated
balance sheet and are being amortized on a straight line basis over the term of the Equipment-based Facility. In order to extinguish
the Prior Credit Facility debt, the Company incurred costs of $0.2 million, which is included in the Company&rsquo;s consolidated
statement of operations.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s Equipment-based Facility
has no financial covenants; however, it contains restrictions on the Company&rsquo;s ability to:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Incur liens and encumbrances on equipment;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Incur further indebtedness;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Dispose of a material portion of assets or merge with a third party;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Make acquisitions; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Make investments in securities.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Due to this new Equipment-based Facility
agreement, the Company&rsquo;s Letter of Credit, which under our Prior Credit Facility reduced the Company&rsquo;s borrowing availability,
is now collateralized with cash.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 0">Average combined borrowings under the Prior
Credit Facility and the Equipment-based Facility for the 2015 fiscal year were $25.9 million, and the largest amount of borrowings
was under the Equipment-based Facility of $34.6 million from June 5, 2015 to June 30, 2015. Average combined borrowings under the
Prior Credit Facility for the 2014 fiscal year were $16.9 million, and the largest amount of borrowings under the Prior Credit
Facility was $36.8 million on April 21, 2014.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 0">Interest expense was $3.0 million for the
2015 fiscal year compared to $1.1 million in the 2014 fiscal year. This increase in interest expense in 2015 was driven by the
increased interest rate on the new Equipment-based Facility, as described above.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Based on our average borrowings for 2015 and
our 2016 forecasted cash needs, we continue to believe that the Company has sufficient liquid financial resources to fund our requirements
for the next twelve months of operations, including our bonding requirements. Furthermore, the Company is continually assessing
ways to increase revenues and reduce costs to improve liquidity. However, in the event of a substantial cash constraint and if
we were unable to secure adequate debt financing, or we continue to incur losses, our working capital could be materially and adversely
affected. Refer to &ldquo;Item 1A. Risk Factors&rdquo; for further discussion of liquidity related risks.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">The Company is continually
assessing ways to increase revenues and reduce costs to improve liquidity as mentioned above. During the fiscal year 2015, we scrutinized
our fleet of equipment in order to identify underutilized and non-core assets. At December 31, 2015, $1.1 million of underutilized
and non-core assets were held with the intent to sell within the next twelve months. Additionally, we experienced an increase in
our fourth quarter 2015 backlog along with several large project wins which we announced in early 2016. We will be exploring additional
capital alternatives to further strengthen our financial position in order to take advantage of this improving transportation infrastructure
market. We expect to use proceeds from these initiatives to reduce a portion of our debt and for other working capital needs.</P>



<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"></P>

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<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Contractual Obligations.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The following table sets forth our fixed,
non-cancelable obligations at December 31, 2015:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="19" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Payments due by period</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">&lt; 1 <BR>Year</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">1 - 3 <BR>Years</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">4 &ndash; 5 <BR>Years</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">&gt; 5 <BR>Years</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="19" STYLE="font-size: 10pt; text-align: center">(Amounts in thousands)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 45%; font-size: 10pt; text-align: left; text-indent: 0in">Equipment-based term loan&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">17,957</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">4,085</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">8,170</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">5,702</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">--</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Equipment-based term loan - interest<font style="font-size: 10pt">*</font>&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,611</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,930</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,390</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">291</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Operating leases<font style="font-size: 10pt">**</font>&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,890</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,160</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,032</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,943</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">755</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Notes payable for equipment&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,341</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,107</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,690</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">544</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Members&rsquo; interest subject to mandatory redemption and undistributed earnings<font style="font-size: 10pt">***</font>&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">50,438</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">50,438</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.25pt; text-indent: 0in">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">82,237</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">8,282</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">14,282</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">8,480</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">51,193</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Our obligation for interest on our equipment-based term
loan is calculated using a 12% interest rate. This rate may increase or decrease by 2% based on the calculated results of our
earnings to fixed charge ratio as noted in our agreement. Refer to Note 9 in the footnotes to our consolidated financial statements
for further information.</FONT></TD>
</TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: -7.55pt; margin: 0pt 3.55pt 0pt 7.55pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">**</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Operating leases are stated at minimum annual rentals for all operating leases having
initial non-cancelable lease terms in excess of one year.</TD>
</TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: -7.55pt; margin: 0pt 3.55pt 0pt 7.55pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">***</TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify">Mandatory redemption is based on the death or disability of the interest holders which
is not expected to occur within the next five years. Undistributed earnings can be distributed upon unanimous consent from the
members and for tax distributions. At this time we cannot predict when such distributions will be made. Refer to Note 2 in the
footnotes to our consolidated financial statements for further information.</TD>
</TR></TABLE>

<P STYLE="margin: 0pt 0"></P>



<P STYLE="margin: 0"></P>





<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our obligations for interest related to
our Revolving Loan are not included in the table above as these amounts vary according to the levels of debt outstanding at any
time. Interest on our Equipment-based Facility is paid monthly in accordance with our Term Loan payment schedule and fluctuates
with the balances outstanding on our Revolving Loan during the year. In 2015, interest paid on the Equipment-based Facility and
Prior Credit Facility was approximately $2.9 million.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">To manage risks of changes in the material
prices and subcontracting costs used in submitting bids for construction contracts, we generally obtain firm quotations from our
suppliers and subcontractors before submitting a bid. These quotations do not include any quantity guarantees, and we have no obligation
for materials or subcontract services beyond those required to complete the contracts that we are awarded for which quotations
have been provided.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">As is customary in the construction business,
we are required to provide surety bonds to secure our performance under construction contracts. Our ability to obtain surety bonds
primarily depends upon our capitalization, working capital, past performance, management expertise and reputation and certain external
factors, including the overall capacity of the surety market. Surety companies consider such factors in relationship to the amount
of our backlog and their underwriting standards, which may change from time to time. We have pledged all proceeds and other rights
under our construction contracts to our bond surety company. Events that affect the insurance and bonding markets may result in
bonding becoming more difficult to obtain in the future, or being available only at a significantly greater cost. To date, we have
not encountered difficulties or material cost increases in obtaining new surety bonds.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Capital Expenditures.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Capital equipment is acquired as needed by
increased levels of production and to replace retiring equipment. Management expects capital expenditures in 2016 to be similar
to the $10.8 million incurred in 2015; however, the award of a project requiring significant purchases of equipment or other factors
could result in increased expenditures.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><B><I>Inflation</I></B><I>.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Inflation generally has not had a material
impact on our financial results; however, from time to time increases in oil, fuel, and steel prices have affected our cost of
operations. Anticipated cost increases and reductions are considered in our bids to customers on proposed new construction projects.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In order to mitigate our exposure to increases
in fuel prices, we have historically engaged in a program to hedge our exposure to increases in diesel fuel prices by entering
into swap contracts for diesel fuel. Due to the decline in oil and fuel prices, we did not enter into any new derivative instruments
for 2015. In addition, we retired this program when our last swap contract was settled in August 2015.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Where we are the successful bidder on a
project, we execute purchase orders with material suppliers and contracts with subcontractors covering the prices of most materials
and services, other than oil and fuel products, thereby mitigating future price increases and supply disruptions. These purchase
orders and contracts do not contain quantity guarantees, and we have no obligation for materials and services beyond those required
to complete the contracts with our customers. There can be no assurance that increases in prices of oil and fuel used in our business
will be adequately covered by the estimated escalation we have included in our bids, and there can be no assurance that all of
our vendors will fulfill their pricing and supply commitments under their purchase orders and contracts with the Company. We adjust
our total estimated costs on our projects when we believe it is probable that we will have cost increases which will not be recovered
from customers, vendors or re-engineering.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Off-Balance Sheet Arrangements and Joint Ventures</I></B><I>.
</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We participate in various construction
joint venture partnerships in order to share expertise, risk and resources for certain highly complex projects. The venture&rsquo;s
contract with the project owner typically requires joint and several liability among the joint venture partners. Although our agreements
with our joint venture partners provide that each party will assume and fund its share of any losses resulting from a project,
if one of our partners was unable to pay its share, we would be fully liable for such share under our contract with the project
owner. Circumstances that could lead to a loss under these guarantee arrangements include a partner&rsquo;s inability to contribute
additional funds to the venture in the event that the project incurred a loss or additional costs that we could incur should the
partner fail to provide the services and resources toward project completion that had been committed to in the joint venture agreement.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At December 31, 2015, there was approximately
$35 million of construction work to be completed on unconsolidated construction joint venture contracts, of which $12 million represented
our proportionate share. Due to the joint and several liability under our joint venture arrangements, if one of our joint venture
partners fails to perform, we and the remaining joint venture partners would be responsible for completion of the outstanding work.
As of December 31, 2015, we are not aware of any situation that would require us to fulfill responsibilities of our joint venture
partners pursuant to the joint and several liability under our contracts.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Off-balance sheet arrangements related
to the operating leases are included in the table in &ldquo;Contractual Obligations&rdquo; above.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>New Accounting Pronouncements</I></B><I>. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Refer to &ldquo;Recent Accounting Pronouncements&rdquo;
in Note 1 to the consolidated financial statements for a discussion of new accounting pronouncements. To the extent known, we expect
the effect of these recent accounting pronouncements on future periods to be in line with what is stated in Note 1.</P>

<P STYLE="font-size: 10pt; text-indent: -45.35pt; margin: 6pt 0 6pt 45.35pt"><A NAME="i7a"></A><B>Item 7A. Quantitative and Qualitative Disclosures
about Market Risk</B>.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0 0.05in 6pt 0">Changes in interest rates are one
of our sources of market risks. Outstanding indebtedness under our Prior Credit Facility incurred interest at floating rates. There
were no borrowings under this facility at December 31, 2015. As the new Equipment-based Facility does not bear interest at floating
rates, we are not subject to an impact on our results of operations from a change in interest rates. However, our interest rate
could increase by 2% based on our fixed charge coverage ratio as noted above in Item 7. Management&rsquo;s Discussion and Analysis
of Financial Condition and Results of Operations &ndash; Liquidity and Sources of Capital.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0 0.05in 6pt 0">We are exposed to market risk from
changes in commodity prices. In the normal course of business, we historically entered into derivative transactions, specifically
cash flow hedges, to mitigate our exposure to diesel fuel commodity price movements. We did not participate in these transactions
for trading or speculative purposes. While the use of these arrangements may have limited the benefit to us of decreases in the
prices of diesel fuel, it also limited the risk of adverse price movements. Due to the recent decline in oil and fuel prices, we
have not entered into any new derivative instruments, and we retired our hedging program when our last swap contract was settled
in August 2015. As such, there are no outstanding contracts at December 31, 2015.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0">See &ldquo;Inflation&rdquo; above regarding risks
associated with materials and fuel purchases required to complete our construction contracts.</P>

<P STYLE="font-size: 10pt; text-indent: -45.35pt; margin: 6pt 0 6pt 45.35pt"><A NAME="i8"></A><B>Item 8. Financial Statements and Supplementary
Data</B>.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Financial statements start on page F1.</P>

<P STYLE="font-size: 10pt; text-indent: -45.35pt; margin: 6pt 0 6pt 45.35pt"><A NAME="i9"></A><B>Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.</B>&#9;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">None</P>

<P STYLE="font-size: 10pt; text-indent: -45.35pt; margin: 6pt 0 6pt 45.35pt"></P>

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<P STYLE="font-size: 10pt; text-indent: -45.35pt; margin: 6pt 0 6pt 45.35pt"><A NAME="i9a"></A><B>Item 9A. Controls and Procedures</B>.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Evaluation of Disclosure Controls and Procedures.
</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Disclosure controls and procedures include,
but are not limited to, controls and procedures designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer&rsquo;s
management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s principal executive
officer and principal financial officer reviewed and evaluated the Company&rsquo;s disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of December 31, 2015.&nbsp;&nbsp;Based on that evaluation,
the Company&rsquo;s principal executive officer and principal financial officer concluded that the Company&rsquo;s disclosure controls
and procedures were effective at December 31, 2015 to ensure that the information required to be disclosed by the Company in this
Report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission&rsquo;s
rules and forms and is accumulated and communicated to the Company's management including the principal executive and principal
financial officers, as appropriate to allow timely decisions regarding required disclosure.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0"><B><I>Remediation of Previously Reported Material Weaknesses.</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During the quarter ended September 30,
2015, management identified a material weakness in internal controls over financial reporting. Specifically, the Company did not
adequately review and challenge the inputs to its valuation model, including giving sufficient consideration to current experience
which differed from historical assumptions. This control deficiency could have resulted in a material adjustment to goodwill and
related disclosures in the condensed consolidated financial statements for the quarter ended September 30, 2015. Unless remediated,
this control deficiency could have resulted in a material misstatement of the Company&rsquo;s condensed consolidated financial
statements that would not be prevented or detected.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In response to the material weakness identified
above, management formed a new team which included and received input from the Company&rsquo;s senior operational and financial
management, and its outside advisors to review and challenge the various inputs to the revised valuation model. These inputs included,
among other things, historical actual results versus forecasted data, recent performance, backlog, and near term projects, recent
developments, strategic actions and management&rsquo;s outlook for the future. The forecast and growth assumptions included, among
other things, improved project performance, continuation of a strong base market, and margin improvements driven by incremental
margin product opportunities and pursuing work in adjacent markets.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s management believes
that this additional and enhanced procedure and internal control is appropriate. As of December 31, 2015, this procedure and control
was successfully tested and the material weakness was deemed remediated.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During the quarter ended March 31, 2015,
management identified a material weakness in internal controls over financial reporting. Specifically, the Company identified a
material weakness in internal control over financial reporting as it related to the operation of our processes and controls to
review the status of our construction projects (i.e., work-in-progress review) in terms of both job costs and revenues at our Texas
subsidiary.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In order to remediate the material weakness
in internal control over financial reporting, management executed a plan which included, among other things, the following actions:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0.05in"><FONT STYLE="font-weight: normal">Personnel changes at our Texas subsidiary
have been made to ensure an adequate number of competent project managers are on staff to increase the precision of monthly project
reviews.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 0.05in"><FONT STYLE="font-weight: normal">New procedures have been put in place
to provide for a more detailed evaluation of the work-in-progress report for all on-going projects.</FONT></TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0 0 6pt">As of December 31, 2015, these new procedures
have been successfully tested and the material weakness was deemed remediated.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><B><I>Management&rsquo;s Report on Internal Control
over Financial Reporting. </I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s management is responsible
for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities
Exchange Act of 1934). Under the supervision and with the participation of the Company&rsquo;s management, including the principal
executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of internal control
over financial reporting at December 31, 2015. In making this assessment, management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in the 2013 Internal Control-Integrated Framework. The Company&rsquo;s
management has concluded that, at December 31, 2015, the Company&rsquo;s internal control over financial reporting is effective
based on these criteria.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0"><B><I>Changes in Internal Control over Financial Reporting</I>.</B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0">We maintain a system of internal control over financial
reporting that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.
Based on the most recent evaluation we have concluded that no significant changes in our internal control over financial reporting
occurred during the three months ended December 31, 2015, other than the inclusion of creating a management team and its outside
advisors to review and challenge the various inputs to the Company&rsquo;s valuation model, that have materially affected or are
reasonably likely to materially affect, our internal control over financial reporting.<B> </B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><B><I>Inherent Limitations on Effectiveness of
Controls</I></B><I>. </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Internal control over financial reporting
may not prevent or detect all errors and all fraud. Also, projections of any evaluation of effectiveness of internal control to
future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.</P>

<P STYLE="font-size: 10pt; text-indent: -45.35pt; margin: 6pt 0 6pt 45.35pt"><A NAME="i9b"></A><B>Item 9B. Other Information</B>.&#9;</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0 0 6pt 0.25in">None.<BR CLEAR="ALL">
</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0">PART III&#9;</P>

<P STYLE="font-size: 10pt; text-indent: -45.35pt; margin: 6pt 0 6pt 45.35pt"><A NAME="i10"></A><B>Item 10. Directors, Executive Officers and Corporate
Governance</B>.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The information required in this item is
contained in the Company&rsquo;s proxy statement for its Annual Meeting of Stockholders to be held on May 6, 2016 and is incorporated
herein by reference. The information can be found under the following headings in the proxy statement:</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse; font-size: 10pt">
<tr>
    <td style="vertical-align: bottom; width: 53%; border-bottom: Black 1pt solid; text-align: center; layout-grid-mode: both"><b>Item 10 Information</b></td>
    <td style="vertical-align: top; width: 3%; text-align: center; layout-grid-mode: both">&nbsp;</td>
    <td style="vertical-align: bottom; width: 44%; border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>Location or Heading</b></P>
        <P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><b>in the Proxy Statement</b></P></td></tr>
<tr>
    <td style="vertical-align: bottom; layout-grid-mode: both">Directors&#9;</td>
    <td style="vertical-align: top; layout-grid-mode: both">&nbsp;</td>
    <td style="vertical-align: bottom; layout-grid-mode: both">Election of Directors (Proposal 1) Board Operations</td></tr>
<tr>
    <td style="vertical-align: bottom; layout-grid-mode: both">Compliance With Section 16(a) of the Exchange Act&#9;</td>
    <td style="vertical-align: top; layout-grid-mode: both">&nbsp;</td>
    <td style="vertical-align: bottom; layout-grid-mode: both">Stock Ownership Information</td></tr>
<tr>
    <td style="vertical-align: bottom; layout-grid-mode: both">Code of Ethics&#9;</td>
    <td style="vertical-align: top; layout-grid-mode: both">&nbsp;</td>
    <td style="vertical-align: bottom; layout-grid-mode: both">The Corporate Governance &amp; Nominating Committee</td></tr>
<tr>
    <td style="vertical-align: bottom; layout-grid-mode: both">Communication with the Board; nominations; Board and committee meetings; committees of the Board; Board leadership and risk oversight; and director compensation.&#9;</td>
    <td style="vertical-align: top; layout-grid-mode: both">&nbsp;</td>
    <td style="vertical-align: bottom; layout-grid-mode: both">The Board of Directors</td></tr>
</table>
<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Information relating to the Company&rsquo;s
executive officers is set forth at the end of Part I of this Report under the caption &ldquo;<I>Executive Officers of the Registrant</I>&rdquo;
and is incorporated herein by reference.</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"><A NAME="i11"></A>Item 11. Executive Compensation.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The information required in this item is
contained in the Company's proxy statement for its Annual Meeting of Stockholders to be held on May 6, 2016 and is incorporated
herein by reference. The information can be found under the headings Executive Compensation and Board Operations in the proxy statement.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0"><A NAME="i12"></A><B>Item 12. Security Ownership of Certain Beneficial Owners and Management,
and Related Stockholder Matters</B>.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The information required in this item is
contained in the Company&rsquo;s proxy statement for its Annual Meeting of Stockholders to be held on May 6, 2016 and is incorporated
herein by reference.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Equity Compensation Plan Information can be found in the proxy statement under the heading <I>Executive
Compensation</I>.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Information regarding the ownership of the Company&rsquo;s common stock can be found in the proxy
statement under the heading <I>Stock Ownership Information</I>.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-indent: -45.35pt; margin: 6pt 0 6pt 45.35pt"><A NAME="i13"></A><B>Item 13. Certain Relationships and Related Transactions,
and Director Independence</B>.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The information required in this item is
contained in the Company&rsquo;s proxy statement for its Annual Meeting of Stockholders to be held on May 6, 2016 and is incorporated
herein by reference.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Information regarding any relationships between directors and officers and the Company can be found
in the proxy statement under the heading <I>Transactions with Related Persons</I>.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Information about director independence can be found in the proxy statement under the heading <I>Election
of Directors (Proposal 1)</I>.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><A NAME="i14"></A><B>Item 14. Principal Accountant Fees and Services</B>.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0">The information required in this item is contained
in the Company&rsquo;s proxy statement for its Annual Meeting of Stockholders to be held on May 6, 2016 and is incorporated herein
by reference. The information can be found in the proxy statement under the heading <I>Information about Audit Fees and Audit
Services</I>.</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0">PART IV</P>

<P STYLE="font-size: 10pt; text-indent: -45.35pt; margin: 6pt 0 6pt 45.35pt"><A NAME="i15"></A><B>Item 15. Exhibits and Financial Statement Schedules</B>.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The following Financial Statements and
Financial Statement Schedules are filed with this Report:</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Financial Statements:</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Reports of the Company&rsquo;s Independent
Registered Public Accounting Firm</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Consolidated Balance Sheets as of December
31, 2015 and 2014</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Consolidated Statements of Operations for
the years ended December 31, 2015, 2014 and 2013</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: -22.5pt; margin: 5pt 0 2pt 40.5pt">Consolidated Statements of Comprehensive
Loss for the years ended December 31, 2015, 2014 and 2013</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Consolidated Statements of Cash Flows for
the years ended December 31, 2015, 2014 and 2013</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Consolidated Statements of Stockholders&rsquo;
Equity for the years ended December 31, 2015, 2014 and 2013</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"><A NAME="finsc"></A><FONT STYLE="font-weight: normal"><I>Financial Statement
Schedules</I></FONT>.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">None.</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-indent: 0in; margin: 6pt 0"><A NAME="exh"></A><FONT STYLE="font-weight: normal"><I>Exhibits</I></FONT>.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 5pt 0 2pt 17.25pt">The following exhibits are filed with this Report.</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0 0 6pt"><B>Explanatory Note</B></P>

<P STYLE="font-size: 10pt; text-indent: 0.25in; margin: 0">Prior to changing its name to Sterling Construction Company, Inc. in
November 2001, the Company&rsquo;s name was Oakhurst Company, Inc. References in the following exhibit list use the name of the
Company in effect at the date of the exhibit.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: top">
    <td style="width: 11%; border: Black 1pt solid; layout-grid-mode: both"><b>Number</b></td>
    <td style="width: 89%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both"><b>Exhibit Title</b></td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">2.1.1</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Purchase Agreement, dated as of December 3, 2009, by and among Kip Wadsworth, Ty Wadsworth, Con Wadsworth, Tod Wadsworth and Sterling Construction Company, Inc. (incorporated by reference to Exhibit 2.1 to Sterling Construction Company, Inc.'s Current Report on Form 8-K, filed on December 3, 2009 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">3.1</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Certificate of Incorporation of Sterling Construction Company, Inc. as amended through May 9, 2014 (incorporated by reference to Exhibit 3 to Sterling Construction Company, Inc.'s Current Report on Form 8-K, filed on May 13, 2014 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">3.2*</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Bylaws of Sterling Construction Company, Inc. as amended through March 10, 2016.</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">4.1</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Form of Common Stock Certificate of Sterling Construction Company, Inc. (incorporated by reference to Exhibit 4.5 to Sterling Construction Company, Inc.'s Form 8-A, filed on January 11, 2006 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.1</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">&nbsp;Separation &amp; Release Agreement executed on July 3, 2015 between Thomas R. Wright and Sterling Construction Company, Inc.</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.1.1#</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">The Sterling Construction Company, Inc. Stock Incentive Plan as amended through May 9, 2014 (incorporated by reference to Exhibit 10.2 to Sterling Construction Company, Inc.'s. Current Report on Form 8-K, filed on May 13, 2014 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.1.1</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Call Option Agreement, dated as of May 29, 2015, by and among Clinton W. Myers, Clinton Charles Myers, Trustee, and Sterling Construction Company, Inc.</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.1.2#</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">2014 Sterling Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Sterling Construction Company, Inc.&rsquo;s Current Report on Form 8-K, filed on May 13, 2014 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.1.2</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Call Option Agreement, dated as of May 29, 2015, by and between Richard H. Buenting and Sterling Construction Company, Inc.</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.2#</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Forms of Stock Option Agreement under the Oakhurst Company, Inc. 2001 Stock Incentive Plan (now known as The Sterling Construction Company, Inc. Stock Incentive Plan) (incorporated by reference to Exhibit 10.52 to Sterling Construction Company, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 29, 2005 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.3*#


</td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Standard
compensation arrangements for non-employee directors of Sterling Construction Company, Inc. adopted by the Board of Directors
to be effective March 1, 2016.


</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both"></TD></TR></TABLE>

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<TR STYLE="vertical-align: top">
    <TD STYLE="border: Black 1pt solid; layout-grid-mode: both; width: 11%">10.4.9</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both; width: 89%; border-top: Black 1pt solid">Loan and Security Agreement dated as of May 29, 2015 between Nations Fund I, LLC, Nations Equipment Finance, LLC, as administrative and collateral agent, Sterling Construction Company, Inc. and its wholly-owned subsidiaries (incorporated by reference to Exhibit 10.1 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on June 3, 2015 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.4.10</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Term Loan Promissory Note dated May 29, 2015 in the amount of $20,000,000 (incorporated by reference to Exhibit 10.2 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on June 3, 2015 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.4.11</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Revolving Loan Promissory Note dated May 29, 2015 in the amount of $20,000,000 (incorporated by reference to Exhibit 10.3 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on June 3, 2015 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.4.12</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Security Agreement dated as of May 29, 2015 between Nations Fund I, LLC, Nations Equipment Finance, LLC, as administrative and collateral agent, Road and Highway Builders, LLC, and Myers &amp; Sons Construction, L.P. (incorporated by reference to Exhibit 10.4 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on June 3, 2015 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.4.13</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Real Property Waiver dated May 29, 2015 between Nations Equipment Finance, LLC as administrative and collateral agent, and Texas Sterling Construction Co. relating to 3475 High River Road, Fort Worth Texas (incorporated by reference to Exhibit 10.5 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on June 3, 2015 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.4.14</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Real Property Waiver dated May 29, 2015 between Nations Equipment Finance, LLC as administrative and collateral agent, and Texas Sterling Construction Co. relating to 5638 FM 1346, San Antonio, Texas (incorporated by reference to Exhibit 10.6 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on June 3, 2015 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.4.15</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Real Property Waiver dated May 29, 2015 between Nations Equipment Finance, LLC as administrative and collateral agent and Texas Sterling Construction Co. relating to 20810 Fernbush Ln., Houston, Texas (incorporated by reference to Exhibit 10.7 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on June 3, 2015 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.4.16</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Intercreditor Agreement dated as of May 29, 2015 among Nations Equipment Finance, LLC, as administrative and collateral agent, Nations Fund I, LLC, and Sterling Construction Company, Inc. and its wholly-owned subsidiaries (incorporated by reference to Exhibit 10.8 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on June 3, 2015 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.5.1#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Employment Agreement dated as of March 17, 2006 between Sterling Construction Company, Inc. and Roger M. Barzun (incorporated by reference to Exhibit 10.11 to Sterling Construction Company, Inc.'s Annual Report on Form 10-K/A for the year ended December 31, 2009, filed on March 18, 2010 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.5.2#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Amendment dated January 18, 2012 of the Employment Agreement dated as of March 17, 2006 between Sterling Construction Company, Inc. and Roger M. Barzun (incorporated by reference to Exhibit 10.7.1 to Sterling Construction Company, Inc.'s Annual Report on Form 10-K filed on March 17, 2014 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.6#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Employment Agreement dated December 28, 2012 between Ralph L. Wadsworth Construction Company, LLC and Con L. Wadsworth (incorporated by reference to Exhibit 10.9 to Sterling Construction Company, Inc.'s Annual Report on Form 10-K filed on March 17, 2014 (SEC File No. 1-31993)). </td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.8.1#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Employment Agreement dated as of September 25, 2013 between Sterling Construction Company, Inc. and Thomas R. Wright (incorporated by reference to Exhibit 10.1 to Sterling Construction Company, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, filed on November 8, 2013 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.8.2#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Amendment to the Employment Agreement of Thomas R. Wright dated September 26, 2014 (incorporated by reference to Exhibit 10.1 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on September 29, 2014 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.8.3#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Separation &amp; Release Agreement executed on July 3, 2015 between Thomas R. Wright and Sterling Construction Company, Inc. (incorporated by reference to Exhibit 10.1 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on July 7, 2015 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both"></TD></TR></TABLE>

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<TR STYLE="vertical-align: top">
    <TD STYLE="border: Black 1pt solid; layout-grid-mode: both; width: 11%">10.8.4#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both; width: 89%; border-top: Black 1pt solid">Employment arrangement of Ronald A. Ballschmiede (incorporated by reference to the description contained in Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on November 11, 2015 (SEC File No. 1-31993)).&nbsp;&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.9.1#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Program Description &mdash; 2015 Short-Term Incentive Compensation Program &amp; 2015 Long-Term Incentive Compensation Program (incorporated by reference to Exhibit 10.1 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on December 17, 2014 (SEC File No. 1-31993))</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.9.2#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Form of Long-Term Incentive Program Award Agreement (incorporated by reference to Exhibit 10.2 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on December 17, 2014 (SEC File No. 1-31993)). </td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.9.3#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Amended form of Long-Term Incentive Program Award Agreement (incorporated by reference to Exhibit 10.9.3 to Sterling Construction Company, Inc.'s Annual Report on Form 10-K filed on March 16, 2015 (SEC File No. 1-31993)). </td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.10#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Employment Agreement dated as of March 9, 2015 between Sterling Construction Company, Inc. and Paul J. Varello (incorporated by reference to Exhibit 10.10 to Sterling Construction Company, Inc.'s Annual Report on Form 10-K filed on March 16, 2015 (SEC File No. 1-31993)).</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.11#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Program Description &mdash; 2016 Executive Incentive Compensation Program (incorporated by reference to Exhibit 10.1 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on February 26, 2016 (SEC File No. 1-31993))</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">10.12#</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Form of 2016 Executive Incentive Compensation Program Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 to Sterling Construction Company, Inc.'s Current Report on Form 8-K filed on February 26, 2016 (SEC File No. 1-31993))</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">21</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Subsidiaries of Sterling Construction Company, Inc.:</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 2pt 0.25in"><u>Name &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State of Incorporation or
        Organization</u></P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Texas Sterling Construction Co. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delaware</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Texas Sterling &ndash; Banicki, JV LLC &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Texas</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Road and Highway Builders, LLC &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nevada</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Road and Highway Builders Inc. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nevada</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">RHB Properties, LLC &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nevada</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Road and Highway Builders of California, Inc.
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;California</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Sterling Hawaii Asphalt, LLC &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hawaii</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Ralph L. Wadsworth Construction Company, LLC
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Utah</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Ralph L. Wadsworth Construction Co. LP &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;California</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">J. Banicki Construction, Inc. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arizona</P>
        <P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">Myers &amp; Sons Construction, L.P. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;California</P></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">23.1*</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Consent of Grant Thornton LLP.</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">31.1*</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Certification of Paul J. Varello, Chief Executive Officer of Sterling Construction Company, Inc.</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">31.2*</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Certification of Ronald A. Ballschmiede, Executive Vice President &amp; Chief Financial Officer of Sterling Construction Company, Inc.</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">32.1*</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) of Paul J. Varello Chief Executive Officer, and Ronald A. Ballschmiede, Executive Vice President &amp; Chief Financial Officer of Sterling Construction Company, Inc.</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">95.1*</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">Mine Safety Disclosure.</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">101.INS</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">XBRL Instance Document</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">101.SCH</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">XBRL Taxonomy Extension Schema Document</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">101.CAL</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">XBRL Extension Calculation Linkbase Document</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">101.DEF</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">XBRL Taxonomy Extension Definition LInkbase Document</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">101.LAB</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">XBRL Taxonomy Extension Label Linkbase Document</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; layout-grid-mode: both">101.PRE</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; layout-grid-mode: both">XBRL Taxonomy Extension Presentation Linkbase Document</td></tr>
</table>
<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0 0"># Management contract or compensatory plan or arrangement.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in">* Filed herewith.</P>

<P STYLE="font-size: 10pt; font-weight: bold; text-align: center; text-indent: 0in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; font-weight: bold; text-align: center; text-indent: 0in; margin: 6pt 0"><A NAME="sign"></A>SIGNATURES</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">&nbsp;</P>

<P STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 20pt">  <FONT STYLE="font-variant: small-caps"><B>Sterling Construction Company, Inc</B></FONT>.</P>

<P STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>



<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 2pt 0.25in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">Date: March 14, 2016</TD>
    <TD STYLE="width: 5%">By: </TD>
    <TD STYLE="width: 45%; border-bottom: Black 1pt solid">/s/ Paul J. Varello</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD ><P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0pt 0 0pt 0.25in">Paul J. Varello, Chief Executive Officer</P>


</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>(duly authorized officer)</TD></TR>
</TABLE>


<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 2pt 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Pursuant to the requirements of the Securities
Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: top">
    <TD STYLE="width: 30%; text-align: center; layout-grid-mode: both"><b>Signature</b></td>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 30%; text-align: center; layout-grid-mode: both"><b>Title</b></td>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 30%; text-align: center; layout-grid-mode: both"><b>Date</b></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt">/s/ Milton L. Scott</P></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-indent: 0in; layout-grid-mode: both; text-align: center">Chairman of the Board of Directors</td>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">March 14, 2016</td></tr>
<TR STYLE="vertical-align: top">
    <TD>Milton L. Scott</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-indent: 0in; layout-grid-mode: both; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-indent: 0in; layout-grid-mode: both; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt">/s/ Paul J. Varello</P></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-indent: 0in; layout-grid-mode: both; text-align: center"><P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0pt 0">Director</P>


Chief Executive Officer (principal executive officer)</td>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">March 14, 2016</td></tr>
<TR STYLE="vertical-align: top">
    <TD>Paul J. Varello</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-indent: 0in; layout-grid-mode: both; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-indent: 0in; layout-grid-mode: both; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt">/s/ Ronald A. Ballschmiede</P></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in; layout-grid-mode: both">Executive Vice President &amp; Chief Financial</td>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">
        <P STYLE="font-size: 10pt; text-align: center">March 14, 2016</P></td></tr>
<TR STYLE="vertical-align: top">
    <TD>Ronald A. Ballschmiede</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in; layout-grid-mode: both"> Officer (principal financial officer and principal <BR>
accounting officer)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in; layout-grid-mode: both">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt">/s/ Marian M. Davenport</P></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">Director</td>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">March 14, 2016</td></tr>
<TR STYLE="vertical-align: top">
    <TD>Marian M. Davenport</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt">/s/Maarten D. Hemsley</P></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">Director</td>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">March 14, 2016</td></tr>
<TR STYLE="vertical-align: top">
    <TD>Maarten D. Hemsley</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt">/s/ Charles R. Patton</P></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">Director</td>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">March 14, 2016</td></tr>
<TR STYLE="vertical-align: top">
    <TD>Charles R. Patton</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font-size: 10pt">/s/ Richard O. Schaum</P></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">Director</td>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">March 14, 2016</td></tr>
<TR STYLE="vertical-align: top">
    <TD>Richard O. Schaum</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; layout-grid-mode: both">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></TR>
</table>
<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0 0 6pt">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0 0 6pt"></P>

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<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0 0 6pt"><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0 0 6pt">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">Board of Directors and Stockholders</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">Sterling Construction Company, Inc.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">We have audited the accompanying consolidated balance
sheets of Sterling Construction Company, Inc. (a Delaware corporation) and subsidiaries (the &ldquo;Company&rdquo;) as of December
31, 2015 and 2014, and the related consolidated statements of operations, comprehensive loss, stockholders&rsquo; equity, and cash
flows for each of the three years in the period ended December 31, 2015. These financial statements are the responsibility of the
Company&rsquo;s management. Our responsibility is to express an opinion on these financial statements based on our audits.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">We conducted our audits in accordance with the standards
of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the financial position of Sterling Construction Company, Inc. and subsidiaries
as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period
ended December 31, 2015 in conformity with accounting principles generally accepted in the United States of America.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">We also have audited, in accordance with the standards
of the Public Company Accounting Oversight Board (United States), the Company&rsquo;s internal control over financial reporting
as of December 31, 2015, based on criteria established in the 2013 <I>Internal Control&mdash;Integrated Framework</I> issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 14, 2016 expressed an unqualified
opinion.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0 0 6pt">&nbsp;</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0 0 6pt">/s/ GRANT THORNTON LLP</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">Houston, Texas</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">March 14, 2016</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0 0 6pt"><B>&nbsp;</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0 0 6pt"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0 0 6pt"><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">Board of Directors and Stockholders</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">Sterling Construction Company, Inc.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">We have audited the internal control over financial
reporting of Sterling Construction Company, Inc. (a Delaware corporation) and subsidiaries (the &ldquo;Company&rdquo;) as of December
31, 2015, based on criteria established in the 2013<I> Internal Control&mdash;Integrated Framework</I> issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). The Company&rsquo;s management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting,
included in the accompanying Management&rsquo;s Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Company&rsquo;s internal control over financial reporting based on our audit.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">We conducted our audit in accordance with the standards
of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">A company&rsquo;s internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles. A company&rsquo;s internal
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company&rsquo;s assets that could have a material effect on the financial statements.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in the 2013
<I>Internal Control&mdash;Integrated Framework </I>issued by COSO.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 0">We also have audited, in accordance with the standards
of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of the Company as of and
for the year ended December 31, 2015, and our report dated March 14, 2016 expressed an unqualified opinion on those financial statements.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">/s/ GRANT THORNTON LLP</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">Houston, Texas</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">March 14, 2016</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"></P>

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<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><B>STERLING CONSTRUCTION COMPANY, INC. &amp; SUBSIDIARIES</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><B>CONSOLIDATED BALANCE SHEETS</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>As of December 31, 2015 and 2014</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>(Amounts in thousands, except share
and per share data)</B></P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; text-indent: 0.25in">ASSETS</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Current assets:&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left; text-indent: 0.25in">Cash and cash equivalents &#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">4,426</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">22,843</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0.25in">Contracts receivable, including retainage&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">82,112</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">78,896</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0.25in">Costs and estimated earnings in excess of billings on uncompleted contracts&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">26,905</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">33,403</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: 0.25in">Inventories&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,535</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,401</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0.25in">Receivables from and equity in construction joint ventures&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,930</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,153</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0.25in">Other current assets&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">6,013</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,278</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 30.4pt">Total current assets&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">134,921</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">156,974</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Property and equipment, net&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">73,475</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">87,098</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: 0in">Goodwill&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">54,820</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">54,820</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0in">Other assets, net&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">4,068</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">7,559</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 30.4pt">Total assets&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">267,284</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">306,451</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; text-indent: 0.25in">LIABILITIES AND EQUITY</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Current liabilities:&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 16.9pt">Accounts payable&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">58,959</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">66,792</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 16.9pt">Billings in excess of costs and estimated earnings on uncompleted contracts&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">30,556</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">25,649</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 16.9pt">Current maturities of long-term debt&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,192</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">965</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 16.9pt">Income taxes payable&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">67</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,868</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 16.9pt">Accrued compensation&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,977</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,169</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 16.9pt">Other current liabilities&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,896</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">4,207</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 30.4pt">Total current liabilities&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">104,647</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">104,650</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Long-term liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 16.9pt">Long-term debt, net of current maturities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,107</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">37,021</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 16.9pt">Members&rsquo; interest subject to mandatory redemption and undistributed earnings&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">50,438</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">22,879</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 16.9pt">Other long-term liabilities&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">338</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">753</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 30.4pt">Total long-term liabilities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">66,883</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">60,653</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Commitments and contingencies (Note 11)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: 0in">Equity:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0.1in">Sterling stockholders&rsquo; equity:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 30pt">Preferred stock, par value $0.01 per share; 1,000,000 shares authorized, none issued&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 30pt">Common stock, par value $0.01 per share; 28,000,000 shares authorized, 19,753,170 and 18,802,679 shares issued&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">198</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">188</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 30pt">Additional paid in capital&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">188,147</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">205,697</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 30pt">Retained deficit&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(92,500</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(72,098</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 30pt">Accumulated other comprehensive loss&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(101</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 13.5pt; padding-left: 20pt">Total Sterling common stockholders&rsquo; equity&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">95,845</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">133,686</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 6.3pt">Noncontrolling interests&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(91</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">7,462</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 13.5pt; padding-left: 20pt">Total equity&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">95,754</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">141,148</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 13.5pt; padding-left: 20pt">Total liabilities and equity&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">267,284</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">306,451</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><I>The accompanying notes are an integral
part of these consolidated financial statements.</I></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 12pt 0 0"><B></B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 12pt 0 0"><B>STERLING CONSTRUCTION COMPANY, INC. &amp;
SUBSIDIARIES</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>CONSOLIDATED STATEMENTS OF OPERATIONS</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>For the years ended December 31,
2015, 2014 and 2013</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>(Amounts in thousands, except per
share data)</B></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; font-size: 10pt">Revenues&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">623,595</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">672,230</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">556,236</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt">Cost of revenues&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(594,642</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(639,809</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(586,180</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Gross profit (loss)&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">28,953</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">32,421</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(29,944</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">General and administrative expenses&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(41,880</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(36,897</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(40,951</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Other operating (expense) income, net &#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,460</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">252</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,737</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Operating loss&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(14,387</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,224</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(69,158</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Gain on sale of securities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">91</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Interest income&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">460</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">754</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">879</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Interest expense&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,012</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,123</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(616</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Loss on extinguishment of debt&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(240</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Loss before income taxes and earnings attributable to noncontrolling interests &#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(17,179</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,593</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(68,804</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Income tax expense&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(7</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(632</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,222</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Net loss&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(17,186</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,225</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(70,026</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Noncontrolling owners&rsquo; interests in earnings of subsidiaries&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,216</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(4,556</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,903</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Net loss attributable to Sterling common stockholders&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(20,402</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(9,781</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(73,929</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Net loss per share attributable to Sterling common stockholders:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Basic and diluted&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(2.02</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(0.54</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(4.91</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Weighted average number of common shares outstanding used in computing per share amounts:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Basic and diluted&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">19,375,213</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,063,466</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,635,179</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><I>The accompanying notes are an integral
part of these consolidated financial statements.</I></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
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<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>STERLING CONSTRUCTION COMPANY, INC.
&amp; SUBSIDIARIES</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>For the years ended December 31,
2015, 2014 and 2013</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>(Amounts in thousands)</B></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; font-size: 10pt; text-align: left; text-indent: 0in">Net loss attributable to Sterling common stockholders&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(20,402</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(9,781</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(73,929</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Net income attributable to noncontrolling interest included in equity&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,216</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,556</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,879</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Net income attributable to noncontrolling interest included in liabilities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,024</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Add / (deduct) other comprehensive income, net of tax:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Realized gain from available-for-sale securities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(90</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Change in unrealized holding loss on available-for-sale securities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(601</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt">Realized loss (gain) from settlement of derivatives&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">107</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">137</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(48</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 30pt">Change in the effective portion of unrealized (loss) gain in fair market value of derivatives&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(6</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(355</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">160</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 0in">Comprehensive loss&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(17,085</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(5,443</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(70,605</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>



<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><I>The accompanying notes are an integral
part of these consolidated financial statements.</I>
</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>STERLING CONSTRUCTION COMPANY, INC.
&amp; SUBSIDIARIES</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>CONSOLIDATED STATEMENT OF STOCKHOLDERS&rsquo;
EQUITY</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>For the years ended December 31,
2015, 2014 and 2013</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>(Amounts in thousands)</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="19" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">STERLING CONSTRUCTION COMPANY, INC. STOCKHOLDERS</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Common Stock</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt">Addi- <BR>tional <BR>Paid in</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt">Retained Earnings</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt">Accu- <BR>mulated <BR>Other <BR>Compre- <BR>hensive <BR>Income</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt">Noncon- <BR>trolling</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Capital</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(Deficit)</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(Loss)</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Interests</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 44%; font-size: 10pt; text-indent: 0in">Balance at January 1, 2013&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">16,495</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">165</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">197,067</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">12,220</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">696</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">2,438</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">212,586</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Net (loss) income&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(73,929</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,879</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(72,050</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Other comprehensive loss&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(579</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(579</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Stock issued upon option exercises&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">26</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">26</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Tax impact from exercise of stock options&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(15</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(15</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Stock-based compensation&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">154</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">926</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">928</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Revaluation of noncontrolling interest and other&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,078</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(608</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,686</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Distribution to owners&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(416</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(416</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: 0in">Balance at December 31, 2013&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,658</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">167</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">190,926</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(62,317</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">117</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,901</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">132,794</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Net (loss) income&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(9,781</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,556</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,225</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Other comprehensive loss&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(218</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(218</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Stock issued upon option exercises&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Stock-based compensation&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">41</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">849</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">849</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Distribution to owners&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(994</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(994</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Stock issued in equity offering, net of expense&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,100</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">21</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">14,025</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">14,046</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; padding-left: 10pt">Other&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(115</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(116</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: 0in">Balance at December 31, 2014&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,803</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">188</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">205,697</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(72,098</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(101</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,462</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">141,148</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Net (loss) income&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(20,402</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,216</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(17,186</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Other comprehensive income&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">101</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">101</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Stock-based compensation&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,046</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">11</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,593</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,604</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Reclassification and revaluation of noncontrolling interest&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(18,774</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,367</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(26,141</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Distribution to owners&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,402</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,402</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; padding-left: 10pt">Other&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(96</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(369</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(370</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.25pt; text-indent: 0in">Balance at December 31, 2015&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">19,753</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">198</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">188,147</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(92,500</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(91</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">95,754</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><I>The accompanying notes are an integral
part of these consolidated financial statements.</I></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"></P>

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<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>STERLING CONSTRUCTION COMPANY, INC.
&amp; SUBSIDIARIES</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>For the years ended December 31,
2015, 2014 and 2013</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>(Amounts in thousands)</B></P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Cash flows from operating activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 55%; font-size: 10pt; text-align: left">Net loss attributable to Sterling common stockholders&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(20,402</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(9,781</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(73,929</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Plus: Noncontrolling owners&rsquo; interests in earnings of subsidiaries&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,216</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">4,556</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,903</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Net loss&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(17,186</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,225</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(70,026</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Adjustments to reconcile net loss to net cash provided by (used in) operating activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Depreciation and amortization&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,529</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,348</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,650</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Gain on disposal of property and equipment&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,479</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(995</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,837</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Deferred tax expense&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,150</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Stock-based compensation expense&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,604</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">849</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">928</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Gain on sale of securities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(91</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Tax impact from exercise of stock options and restricted stock&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">15</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Loss on extinguishment of debt&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">240</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Changes in operating assets and liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Contracts receivable&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,216</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,651</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(6,430</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Costs and estimated earnings in excess of billings on uncompleted contracts&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,498</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(21,719</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,908</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Receivables from and equity in construction joint ventures&#9;&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,777</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,035</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,887</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Income tax receivable&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,419</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,784</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(6,011</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Other assets&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,993</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,480</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(6,722</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Accounts payable&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,834</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,192</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">13,794</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Billings in excess of costs and estimated earnings on uncompleted contracts&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,907</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,927</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,658</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Accrued compensation and other liabilities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,147</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(2,504</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,055</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 20pt; text-indent: -10pt">Members&rsquo; interest subject to mandatory redemption and undistributed earnings&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,418</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,110</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Net cash provided by (used in) operating activities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,969</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(10,513</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(22,072</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Cash flows from investing activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Additions to property and equipment&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(8,086</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(13,509</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(14,390</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Proceeds from sale of property and equipment&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,543</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,078</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,787</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Purchases of short-term securities, available-for-sale&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,638</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Sales of short-term securities, available-for-sale&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">49,874</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Restricted cash&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(4,945</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Net cash (used in) provided by investing activities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,488</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,431</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">40,633</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Cash flows from financing activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Cumulative daily drawdowns &ndash; Credit Facility&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">126,970</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">330,338</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">219,026</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Cumulative daily repayments &ndash; Credit Facility&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(161,571</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(303,545</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(235,230</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Cumulative drawdowns &ndash; equipment-based revolver&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">14,550</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Cumulative repayments &ndash; equipment-based revolver&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(14,550</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Cash received from equipment-based term loan&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">20,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt; text-indent: -10pt">Repayments under long-term obligations &ndash; equipment-based term loan and other&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,217</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Distributions to noncontrolling interest owners&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,402</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,191</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,565</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Net proceeds from stock issued&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">14,046</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Issuance of common stock pursuant to warrants and options exercised&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">26</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Tax impact from exercise of stock options&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(15</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Deferred loan costs&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,309</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; padding-left: 10pt">Other&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(369</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(745</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(73</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Net cash used in financing activities&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(22,898</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">38,915</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(19,831</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Net (decrease) increase in cash and cash equivalents&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(18,417</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">20,971</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,270</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Cash and cash equivalents at beginning of period&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">22,843</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,872</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,142</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Cash and cash equivalents at end of period&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">4,426</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">22,843</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">1,872</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Supplemental disclosures of cash flow information:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Cash paid during the period for interest&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">2,889</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">1,075</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">595</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Cash paid during the period for income taxes&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">547</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">1</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">170</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Non-cash items:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Revaluation of noncontrolling interests&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(26,141</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(7,686</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 20pt; text-indent: -10pt">Transportation and construction equipment acquired through financing arrangements&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">2,662</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">3,159</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">510</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 0in; margin: 0"><I>The accompanying notes are an integral part of these
consolidated financial statements.</I></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 13.5pt; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: 13.5pt; margin: 0"></P>

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<P STYLE="font-size: 10pt; text-align: center; text-indent: 13.5pt; margin: 0"><B>STERLING CONSTRUCTION COMPANY, INC. &amp; SUBSIDIARIES</B></P>

<P STYLE="font-size: 10pt; text-align: center; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">1.</TD><TD>Summary of Business and Significant Accounting Policies</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Business Summary</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Sterling Construction Company, Inc. (&ldquo;Sterling&rdquo;
or &ldquo;the Company&rdquo;), a Delaware corporation, is a leading heavy civil construction company that specializes in the building
and reconstruction of transportation and water infrastructure projects in Texas, Utah, Nevada, Colorado, Arizona, California, Hawaii
and other states in which there are construction opportunities. Its transportation infrastructure projects include highways, roads,
bridges, airfields, ports and light rail. Its water infrastructure projects include water, wastewater and storm drainage systems.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Sterling owns equity interests in the following
subsidiaries: Texas Sterling Construction Co. (&ldquo;TSC&rdquo;); Road and Highway Builders, LLC (&ldquo;RHB&rdquo;); Road and
Highway Builders Inc. (&ldquo;RHB Inc&rdquo;); Road and Highway Builders of California, Inc. (&ldquo;RHBCa&rdquo;); RHB Properties,
LLC (&ldquo;RHBP&rdquo;); Ralph L. Wadsworth Construction Company, LLC (&ldquo;RLW&rdquo;); Ralph L. Wadsworth Construction Co.,
LP (&ldquo;RLWLP&rdquo;); J. Banicki Construction, Inc.(&ldquo;JBC&rdquo;); Myers &amp; Sons Construction, L.P. (&ldquo;Myers&rdquo;);
and Sterling Hawaii Asphalt (&ldquo;SHA&rdquo;). TSC, RHB, RHBCa, RLW, JBC and Myers perform construction contracts, RHB Inc. produces
aggregates from a leased quarry, primarily for use by RHB, and SHA produces asphalt for use by RHB and has minimal sales to third
parties. RHBP and RLWLP are dormant entities.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Significant Accounting Policies</I></B></P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Principles of Consolidation</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The accompanying consolidated financial
statements include the accounts of subsidiaries and construction joint ventures in which the Company has a greater than 50% ownership
interest or otherwise controls such entities. For investments in subsidiaries and construction joint ventures that are not wholly-owned,
but where the Company exercises control, the equity held by the remaining owners and their portions of net income (loss) are reflected
in the balance sheet line item &ldquo;Noncontrolling interests&rdquo; in &ldquo;Equity&rdquo; and the statement of operations line
item &ldquo;Noncontrolling owners&rsquo; interests in earnings of subsidiaries,&rdquo; respectively. All significant intercompany
accounts and transactions have been eliminated in consolidation. For all years presented, the Company had no subsidiaries where
its ownership interests were less than 50%.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Where the Company is a noncontrolling joint
venture partner, and otherwise not required to consolidate the joint venture entity, its share of the operations of such construction
joint venture is accounted for on a pro rata basis in the consolidated statements of operations and as a single line item (&ldquo;Receivables
from and equity in construction joint ventures&rdquo;) in the consolidated balance sheets. This method is an acceptable modification
of the equity method of accounting which is a common practice in the construction industry. Refer to Note 6<FONT STYLE="color: red">
</FONT>for further information regarding the Company&rsquo;s construction joint ventures.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Under accounting principles generally accepted
in the United States (&ldquo;GAAP&rdquo;), the Company must determine whether each entity, including joint ventures in which it
participates, is a variable interest entity (&ldquo;VIE&rdquo;). This determination focuses on identifying which owner or joint
venture partner, if any, has the power to direct the activities of the entity and the obligation to absorb losses of the entity
or the right to receive benefits from the entity disproportionate to its interest in the entity, which could have the effect of
requiring the Company to consolidate the entity in which we have a noncontrolling variable interest. Refer to Note 3 for further
information regarding the Company&rsquo;s consolidated VIE.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Use of Estimates</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The preparation of financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Certain of the Company&rsquo;s accounting policies require higher degrees of judgment
than others in their application. These include the recognition of revenue and earnings from construction contracts under the percentage-of-completion
method, the valuation of long-term assets (including goodwill), and income taxes. Management continually evaluates all of its estimates
and judgments based on available information and experience; however, actual results could differ from these estimates.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><I>Revenue Recognition</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company is a general contractor which
engages in various types of heavy civil construction projects principally for public (government) owners. Credit risk is minimal
with public owners since the Company ascertains that funds have been appropriated by the governmental project owner prior to commencing
work on such projects. While most public contracts are subject to termination at the election of the government entity, in the
event of termination the Company is entitled to receive the contract price for completed work and reimbursement of termination-related
costs. Credit risk with private owners is minimized because of statutory mechanics liens, which give the Company high priority
in the event of lien foreclosures following financial difficulties of private owners. Refer to Note 16 for further information
regarding the Company&rsquo;s concentration of risk.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Revenues are recognized on the percentage-of-completion
method, measured by the ratio of costs incurred up to a given date to estimated total costs for each contract. This cost to cost
measure is used because management considers it to be the best available measure of progress on these contracts. Contract costs
include all direct material, labor, subcontract and other costs and those indirect costs related to contract performance, such
as indirect salaries and wages, equipment repairs and depreciation, insurance and payroll taxes. Administrative and general expenses
are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such
losses are determined. Changes in job performance, job conditions and estimated profitability, including those changes arising
from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized
in the period in which the revisions are determined.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Changes in estimated revenues and gross
margin during the year ended December 31, 2015 resulted in a net charge of $9.7 million included in operating loss, or $0.50 per
diluted share attributable to Sterling common stockholders, included in net loss attributable to Sterling common stockholders.
Changes in estimated revenues and gross margin during the year ended December 31, 2014 resulted in a net charge of $9.1 million
included in operating loss, or $0.50 per diluted share attributable to Sterling common stockholders, included in net loss attributable
to Sterling common stockholders. Changes in estimated revenues and gross margin during the year ended December 31, 2013 resulted
in a net charge of $57.6 million included in operating loss, or $3.46 per diluted share attributable to Sterling common stockholders,
included in net loss attributable to Sterling common stockholders.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Change orders are modifications of an original
contract that effectively change the existing provisions of the contract without adding new scope or terms. Change orders may include
changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of
the work. Either we or our customers may initiate change orders.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company considers unapproved change
orders to be contract variations for which we have customer approval for a change of scope but a price change associated with the
scope change has not yet been agreed upon. Costs associated with unapproved change orders are included in the estimated cost to
complete the contracts and are treated as project costs as incurred. The Company recognizes revenue equal to costs incurred on
unapproved change orders when realization of price approval is probable. Unapproved change orders involve the use of estimates,
and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting
periods to reflect changes in estimates or final agreements with customers. Change orders that are unapproved as to both price
and scope are evaluated as claims.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company considers claims to be amounts
in excess of agreed contract prices that we seek to collect from our customers or others for customer-caused delays, errors in
specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both scope
and price, or other causes of unanticipated additional contract costs. Claims are included in the calculation of revenue when realization
is probable and amounts can be reliably determined to the extent costs are incurred. To support these requirements, the existence
of the following items must be satisfied: 1. The contract or other evidence provides a legal basis for the claim; or a legal opinion
has been obtained, stating that under the circumstances there is a reasonable basis to support the claim; 2. Additional costs are
caused by circumstances that were unforeseen at the contract date and are not the result of deficiencies in the contractor&rsquo;s
performance; 3. Costs associated with the claim are identifiable or otherwise determinable and are reasonable in view of the work
performed; and 4. The evidence supporting the claim is objective and verifiable, not based on management&rsquo;s feel for the situation
or on unsupported representations. Revenues in excess of contract costs incurred on claims is recognized when an agreement is reached
with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract.
Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when
incurred.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">There were $1.6 million in costs and estimated
earnings in excess of billings at December 31, 2015 and $3.5 million in costs and estimated earnings in excess of billing at December
31, 2014, for contract change orders not approved by the customer. In addition, the Company recorded $5.2 million in revenues
related to claims during the year ended December 31, 2015, and did not record revenues related to claims during the years ended
December 31, 2014 and 2013.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Our contracts generally take 12 to 36 months
to complete. The Company generally provides a one to two-year warranty for workmanship under its contracts when completed. Warranty
claims historically have been insignificant.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The asset, &ldquo;Costs and estimated earnings
in excess of billings on uncompleted contracts&rdquo; represents revenues recognized in excess of amounts billed on these contracts
and will be billed at a later date, usually due to contract terms. In addition, revenue associated with unapproved change orders
and claims is also included when realization is probable and amounts can be reliably determined. The liability, &ldquo;Billings
in excess of costs and estimated earnings on uncompleted contracts&rdquo; represents billings in excess of revenues recognized
on these contracts.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Reclassification</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Certain amounts in prior years&rsquo; financial
statements have been reclassified to conform to the presentation used in the year ended December 31, 2015.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Financial Instruments </I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The fair value of financial instruments
is the amount at which the instrument could be exchanged in a current transaction between willing parties. The Company&rsquo;s
financial instruments are cash and cash equivalents, restricted cash used as collateral for a letter of credit and restricted cash
maintained in an escrow account, short-term and long-term contracts receivable, accounts payable, notes payable, a revolving loan
(the &ldquo;Revolving Loan&rdquo;) with Nations Fund I, LLC and Nations Equipment Finance, LLC, as administrative agent and collateral
agent for the lender (&ldquo;Nations&rdquo;), a term loan (the &ldquo;Term Loan&rdquo;) with Nations (combined, the &ldquo;Equipment-based
Facility&rdquo;), and an earn-out liability related to the acquisition of JBC.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The recorded values of cash and cash equivalents,
restricted cash, short-term contracts receivable and accounts payable approximate their fair values based on their liquidity and/or
short-term nature. The recorded value of the long-term contract receivable was based on the amount of future cash flows discounted
using the creditor&rsquo;s borrowing rate and such recorded value approximated fair value.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company provides credit in the normal
course of business, principally to public (government) owners, and performs ongoing credit evaluations, as deemed necessary, but
generally does not require collateral to support such receivables.&nbsp; In an effort to reduce its credit exposure, as well as
accelerate its cash flows, in August 2015, the Company completed the sale, on a non-recourse basis, of its only long-term contract
receivable pursuant to a factoring agreement with a related party. The Company received approximately $7.1&nbsp;million upon the
closing of this transaction and recorded a loss of approximately $1.4 million in &ldquo;Other operating (expense) income, net.&rdquo;&nbsp;
As such, we did not have a long-term contract receivable at December 31, 2015.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Refer to Note 2 regarding the fair value
of an earn-out liability along with the most current amendments, and Note 9 regarding the fair value of the Revolving Loan and
the Term Loan. The Company also has long-term notes payable of $2.2 million related to machinery and equipment purchased which
have payment terms ranging from 3 to 5 years and associated interest rates ranging from 3.12% to 6.29%. The fair value of these
notes payable approximates their book value. The Company does not have any off-balance sheet financial instruments other than operating
leases (Refer to Note 12).</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In order to assess the fair value of the
Company&rsquo;s financial instruments, the Company uses the fair value hierarchy established by GAAP which prioritizes the inputs
used in valuation techniques into the following three levels:</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt 0.25in">Level 1 Inputs &ndash; Based upon
quoted prices for identical assets in active markets that the Company has the ability to access at the measurement date.<FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt 0.25in">Level 2 Inputs &ndash; Based upon
quoted prices (other than Level 1) in active markets for similar assets, quoted prices for identical or similar assets in markets
that are not active, inputs other than quoted prices that are observable for the asset such as interest rates, yield curves, volatilities
and default rates and inputs that are derived principally from or corroborated by observable market data.<FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt 0.25in">Level 3 Inputs &ndash; Based on
unobservable inputs reflecting the Company&rsquo;s own assumptions about the assumptions that market participants would use in
pricing the asset based on the best information available.<FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">For each financial instrument, the Company
uses the highest priority level input that is available in order to appropriately value that particular instrument. In certain
instances, Level 1 inputs are not available and the Company must use Level 2 or Level 3 inputs. In these cases, the Company provides
a description of the valuation techniques used and the inputs used in the fair value measurement.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0"><I>Contracts Receivable</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Contracts receivable are generally based
on amounts billed to the customer. At December 31, 2015 and 2014, contracts receivable included $19.8 million and $16.4 million
of retainage, respectively, discussed below, which is being withheld by customers until completion of the contracts, and at December
31, 2015, and 2014, there were no unbilled receivables on contracts completed or substantially complete at that date. All contracts
receivable include only balances approved for payment by the customer.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Many of the contracts under which the Company
performs work contain retainage provisions. Retainage refers to that portion of billings made by the Company but held for payment
by the customer pending satisfactory completion of the project. Unless reserved, the Company assumes that all amounts retained
by customers under such provisions are fully collectible. Retainage on active contracts is classified as a current asset regardless
of the term of the contract and is generally collected within one year of the completion of a contract.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">There are certain contracts that are completed
in advance of full payment. When the receivable will not be collected within our normal operating cycle, we consider it a long-term
contract receivable and it is recorded in &ldquo;Other assets, net&rdquo; in our balance sheet. In August 2015, the Company completed
the sale, on a non-recourse basis, of its only long-term contract receivable pursuant to a factoring agreement with a related party.
As such, there was no outstanding long-term contract receivable at December 31, 2015. At December 31, 2014, there was $5.0 million
recorded. We considered the credit quality of the borrower to assess the appropriate discount rate applied and continuously monitored
the borrower&rsquo;s credit quality. The long-term contract receivable was historically discounted at 4.25% and recorded at fair
value. Interest income related to this receivable was $0.2 million, $0.4 million and $0.3 million for the years ended December
31, 2015, 2014 and 2013, respectively.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Contracts receivable are written off based
on individual credit evaluation and specific circumstances of the customer, when such treatment is warranted. There was an immaterial
amount of bad debt expense recorded in 2015 and no bad debt expense recorded in 2014. In 2013, the Company wrote off $1.8 million
of contracts receivable to bad debt expense which was recorded in &ldquo;Other operating (expense) income, net.&rdquo; During 2014,
we recovered $1.0 million of this $1.8 million.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At year-end, the Company performs a review
of outstanding contracts receivable, historical collection information and existing economic conditions to determine if there
are potential uncollectible receivables. At December 31, 2015 and 2014, our allowance for doubtful accounts against contracts
receivable was immaterial and zero, respectively.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">As is customary, we have agreed to indemnify
our bonding company for all losses incurred by it in connection with bonds that are issued, and we have granted our bonding company
a security interest in certain assets, including accounts receivable, as collateral for such obligation.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Inventories</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s inventories are stated
at the lower of cost or market as determined by the average cost method. Inventories at December 31, 2015 and 2014 were $2.5 million
and $7.4 million, respectively. Inventories consist primarily of concrete, aggregate and millings which are primarily expected
to be utilized on construction projects in the future. A small portion is sold to third parties. The cost of inventory includes
labor, trucking and other equipment costs.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Property and Equipment</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Property and equipment are stated at cost.
Depreciation and amortization are computed using the straight-line method. The estimated useful lives used for computing depreciation
and amortizations are as follows:</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin-right: 0pt; margin-left: 0pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 80%; border-collapse: collapse; font-size: 10pt">
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="layout-grid-mode: both">Buildings (years)</td>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">39</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">&nbsp;</TD></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="layout-grid-mode: both">Construction equipment (years)</td>
    <TD STYLE="layout-grid-mode: both; text-align: center">5</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">-</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">15</TD></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="layout-grid-mode: both">Land improvements (years)</td>
    <TD STYLE="layout-grid-mode: both; text-align: center">5</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">-</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">15</TD></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="layout-grid-mode: both">Office furniture and fixtures (years)</td>
    <TD STYLE="layout-grid-mode: both; text-align: center">3</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">-</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">10</TD></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="layout-grid-mode: both">Leasehold improvements (years or lease period, if shorter)</td>
    <TD STYLE="layout-grid-mode: both; text-align: center">3</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">-</TD>
    <TD STYLE="layout-grid-mode: both; text-align: center">10</TD></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="layout-grid-mode: both; width: 70%">Transportation equipment (years)</td>
    <TD STYLE="layout-grid-mode: both; width: 10%; text-align: center">&nbsp;</TD><TD STYLE="layout-grid-mode: both; width: 10%; text-align: center">5</TD>
    <TD STYLE="layout-grid-mode: both; width: 10%; text-align: center">&nbsp;</TD></tr>
</table>
<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Depreciation expense was $16.2 million,
$18.2 million and $18.6 million in 2015, 2014 and 2013, respectively.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Leases</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 4.5pt 0 0">We lease property and equipment in the
ordinary course of our business. Our leases have varying terms. Some may include renewal options, escalation clauses, restrictions,
penalties or other obligations that we consider in determining minimum lease payments. The leases are classified as either operating
leases or capital leases, as appropriate.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Equipment under Capital Leases</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s policy is to account
for capital leases, which transfer substantially all the benefits and risks incident to the ownership of the leased property to
the Company, as the acquisition of an asset and the incurrence of an obligation. Under this method of accounting, the recorded
value of the leased asset is amortized principally using the straight-line method over its estimated useful life and the obligation,
including interest thereon, is reduced through payments over the life of the lease. Depreciation expense on equipment subject to
capital leases and the related accumulated depreciation is included with that of owned equipment. The Company had one capital lease
at December 31, 2015 of $0.5 million recorded in &ldquo;Long-term debt, net of current maturities&rdquo; and &ldquo;Current maturities
of long-term debt,&rdquo; as applicable, in our consolidated balance sheet and had no capital leases during the years ended December
31, 2014 and 2013.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"></P>

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<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Deferred Loan Costs</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Deferred loan costs represent loan origination
fees paid to the lender and related professional fees such as legal fees related to drafting of loan agreements. During 2015, the
Company capitalized an additional $1.3 million in loan fees paid to Nations in connection with incurring the new debt, discussed
further in Note 9. These capitalized fees are amortized on a straight-line basis over the term of the Equipment-based Facility.
Unamortized costs were $1.1 million and $0.2 million at December 31, 2015 and 2014 and are attributable to the Equipment-based
Facility and Prior Credit Facility, respectively (Refer to Note 9). Loan cost amortization expense for the years ended December
31, 2015, 2014, and 2013 was $0.3 million, $0.2 million, and $0.1 million, respectively.</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 6pt 0"><I>Goodwill and Intangibles</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Goodwill represents the excess of the cost
of companies acquired over the fair value of their net assets at the dates of acquisition. GAAP requires that: (1) goodwill and
indefinite lived intangible assets not be amortized, (2) goodwill is to be tested for impairment at least annually at the reporting
unit level and (3) intangible assets deemed to have an indefinite life are to be tested for impairment at least annually by comparing
the fair value of these assets with their recorded amounts. Refer to Note 8 for our disclosure regarding goodwill impairment testing.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Evaluating Impairment of Long-Lived Assets</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">When events or changes in circumstances
indicate that long-lived assets may be impaired, an evaluation is performed. The evaluation would be based on estimated undiscounted
cash flows associated with the assets as compared to the asset&rsquo;s carrying amount to determine if a write-down to fair value
is required. There was an immaterial impairment in 2015 related to assets held for sale, and no impairment in 2014 and 2013, and
management believes that there are no additional events or changes in circumstances which have indicated that other long-lived
assets may be impaired. See Note 7 for more information regarding our assets held for sale and immaterial impairment charge in
2015.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Segment reporting</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We operate in one segment and have only
one reportable segment and one reporting unit component, which is heavy civil construction. In making this determination, the Company
considered the discrete financial information used by our Chief Operating Decision Maker (&ldquo;CODM&rdquo;). Based on this approach,
the Company noted that the CODM organizes, evaluates and manages the financial information around each heavy civil construction
project when making operating decisions and assessing the Company&rsquo;s overall performance. The service provided by the Company,
in all instances of our construction projects, is heavy civil construction. Furthermore, we considered that each heavy civil construction
project has similar characteristics, includes similar services, has similar types of customers and is subject to similar economic
and regulatory environments which would allow aggregation of individual operating segments into one reportable segment if multiple
operating segments existed.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company noted that even if our local
offices were to be considered separate components of our heavy civil construction operating segment, those components could be
aggregated into a single reporting unit for purposes of testing goodwill for impairment under Accounting Standards Codification
280 and EITF D-101 because our local offices all have similar economic characteristics and are similar in all of the following
areas:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The nature of the products and services &mdash; each of our local offices perform similar construction
projects &mdash; they build, reconstruct and repair roads, highways, bridges, airfields, ports, light rail and water, waste water
and storm drainage systems.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The nature of the production processes &mdash; our heavy civil construction services rendered in
the construction process for each of our construction projects performed by each local office is the same &mdash; they excavate
dirt, remove existing pavement and pipe, lay aggregate or concrete pavement, pipe and rail and build bridges and similar large
structures in order to complete our projects.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The type or class of customer for products and services &mdash; substantially all of our customers
are federal and state departments of transportation, cities, counties, and regional water, rail and toll-road authorities. A substantial
portion of the funding for the state departments of transportation to finance the projects we construct is furnished by the federal
government.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The methods used to distribute products or provide services &mdash; the heavy civil construction
services rendered on our projects are performed by our hired sub-contractors or with our own field work crews (laborers, equipment
operators and supervisors) and equipment (backhoes, loaders, dozers, graders, cranes, pug mills, crushers, and concrete and asphalt
plants).</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The nature of the regulatory environment &mdash; we perform substantially all of our projects for
federal, state and municipal governmental agencies, and all of the projects that we perform are subject to substantially similar
regulation under U.S. and state department of transportation rules, including prevailing wage and hour laws; codes established
by the federal government and municipalities regarding water and waste water systems installation; and laws and regulations relating
to workplace safety and worker health of the U.S. Occupational Safety and Health Administration and to the employment of immigrants
of the U.S. Department of Homeland Security.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">While profit margin objectives included
in contract bids have some variability from contract to contract, our profit margin objectives are not differentiated by our CODM
or our office management based on local office location. Instead, the projects undertaken by each local office are primarily competitively-bid,
fixed unit or negotiated lump sum price contracts, all of which are bid based on achieving gross margin objectives that reflect
the relevant skills required, the contract size and duration, the availability of our personnel and equipment, the makeup and level
of our existing backlog, our competitive advantages and disadvantages, prior experience, the contracting agency or customer, the
source of contract funding, anticipated start and completion dates, construction risks, penalties or incentives and general economic
conditions.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><I>Federal and State Income Taxes</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We determine deferred income tax assets
and liabilities using the balance sheet method. Under this method, the net deferred tax asset or liability is determined based
on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities
and gives current recognition to changes in tax rates and laws. Valuation allowances are established when necessary to reduce deferred
tax assets to the amount expected to be realized. We recognize the financial statement benefit of a tax position only after determining
that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the
more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than
50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Refer to Note 10 for further
information regarding our federal and state income taxes.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Stock-Based Compensation</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">The Company&rsquo;s stock-based incentive plan
is administered by the Compensation Committee of the Board of Directors. The Compensation Committee may reward employees and non-employees
with various types of awards including, but not limited to, warrants, stock options, common stock, and unvested common stock (or
restricted stock) vesting on service, performance or market criteria. The Company recognizes expense based on the grant-date fair
value of the service award and amortizes the award based on accelerated or straight line methods. Awards based on performance vesting
are subsequently remeasured at each reporting date through the settlement date. Awards that vest based on market criteria are valued
using a valuation model that incorporates the probability of the Company meeting the stated criteria, such as the Monte-Carlo simulation,
and the expense is amortized on a straight line basis over the term of the agreement.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Upon the vesting of unvested common stock the
Company may withhold shares, based on the employee&rsquo;s election, in order to satisfy federal tax withholdings. The shares held
by the Company are considered constructively retired and are retired shortly after withholding. The Company then remits the withholding
taxes required. Refer to Note 14 for further information regarding the stock-based incentive plans.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Recent Accounting Pronouncements&#9;</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In February 2016, the Financial Accounting
Standards Board (&ldquo;FASB&rdquo;) issued its new lease accounting guidance in Accounting Standards Update (&ldquo;ASU&rdquo;)
No. 2016-02, Leases (Topic 842).&nbsp; Under the new guidance, lessees will be required to recognize for all leases (with the exception
of short-term leases) a lease liability, which is a lessee&rsquo;s obligation to make lease payments arising from a lease, measured
on a discounted basis and a right-of-use asset, which is an asset that represents the lessee&rsquo;s right to use, or control the
use of, a specified asset for the lease term.&nbsp; The new standard is effective for annual periods beginning after December 15,
2018, including interim periods within those fiscal years.&nbsp; The Company is currently evaluating the impact of the adoption
of this ASU to the Company&rsquo;s consolidated financial statements and related disclosures.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In November 2015, the FASB issued ASU 2015-17,
&ldquo;Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.&rdquo; Under ASU 2015-17, a reporting entity is
required to classify deferred tax assets and liabilities as noncurrent in a classified statement of financial position. The update
is effective for public business entities issuing financial statements for the annual periods beginning after December 15, 2015,
and interim periods within those annual periods. The Company retrospectively adopted the provisions of this ASU at December 31,
2015. Accordingly, $1.2 million of net deferred tax assets have been reclassified from current to non-current in the accompanying
consolidated balance sheet as of December 31, 2014. The net deferred tax assets include an offsetting valuation allowance; therefore,
there was no change to the consolidated balance sheet as of December 31. Refer to Note 10.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In August 2015, FASB issued ASU 2015-15,
&ldquo;Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.&rdquo; The guidance,
which incorporates the SEC Staff Announcement at the June 18, 2015 EITF meeting and is effective upon announcement, provides clarification
related to the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. The
guidance states that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently
amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there
are any outstanding borrowings on the line-of-credit arrangement. The Company is currently accounting for its debt issuance costs
for its Term Loan and line-of-credit Revolver Loan in this manner and would only expect a change in presentation of the deferred
amounts related to the Term Loan upon adoption as required by ASU 2015-03. See below for the discussion related to ASU 2015-03.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In July 2015, the FASB issued ASU 2015-11,
&ldquo;Inventory (Topic 330): Simplifying the Measurement of Inventory.&rdquo; The guidance, which is effective for annual reporting
periods beginning after December 15, 2016 and interim periods within those fiscal years, requires an entity to measure in scope
inventory at the lower of cost and net realizable value. Early adoption is permitted as of the beginning of an interim or annual
reporting period. Although early adoption is permitted, the Company expects to adopt this guidance as required and does not expect
a material impact to the Company&rsquo;s consolidated financial statements.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In April 2015, the FASB issued ASU 2015-03,
&ldquo;Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs.&rdquo; The guidance, which is effective
for annual reporting periods beginning after December 15, 2015 and interim periods within annual periods beginning after December
15, 2015, requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct
deduction from the carrying amount of that debt liability, consistent with debt discounts. The adoption of this ASU requires retrospective
application to all periods presented. Although early adoption is permitted, the Company expects to adopt this guidance as required
and expects a change in the presentation of our consolidated balance sheets and related disclosures. The Company does not expect
any impact to the consolidated statements of operations when the guidance is adopted in the first quarter of 2016.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In February 2015, the FASB issued ASU 2015-02,
&ldquo;Consolidation: Amendments to the Consolidation Analysis.&rdquo; The guidance, which is effective for annual reporting periods
beginning after December 15, 2015 and interim periods within annual periods beginning after December 15, 2015, modifies the analysis
that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. Early adoption
is permitted. The Company does not expect a material impact to the Company&rsquo;s consolidated financial statements and related
disclosures when the guidance is adopted in the first quarter of 2016.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In August 2014, the FASB issued ASU 2014-14,
&ldquo;Presentation of Financial Statement &ndash; Going Concern.&rdquo; The guidance, which is effective for annual reporting
periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016, requires management
to evaluate whether there is substantial doubt about the entity&rsquo;s ability to continue as a going concern and to provide related
footnote disclosures. Early adoption is permitted. Although early adoption is permitted, the Company expects to adopt this guidance
as required and does not expect a material impact to our financial statements.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In May 2014, the FASB issued ASU 2014-09,
&ldquo;Revenue from Contracts with Customers.&rdquo; The guidance defines the steps to recognize revenue for entities that have
contracts with customers. In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 by one year.
As a result, the amendments in ASU 2014-09 are effective for public companies for annual reporting periods beginning after December
15, 2017, including interim periods within that reporting period. Entities would be permitted to adopt this ASU as early as the
original public entity effective date, which were annual reporting periods beginning after December 15, 2016 and interim periods
therein. Early adoption prior to that date would not be permitted.&nbsp; The Company is currently evaluating the impact of the
adoption of this ASU to the Company&rsquo;s consolidated financial statements and related disclosures.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">2.</TD><TD>Acquisitions and Subsidiaries and Joint Ventures with Noncontrolling Owners&rsquo; Interests</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 5pt 0 2pt"><I>RHB</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On December 30, 2013, the Company and Richard
Buenting revised the Second Amended and Restated Operating Agreement entered into on April 27, 2012 and their Management Agreement
entered into on February 1, 2012. The Third Amended and Restated Operating Agreement and the amended Management Agreement eliminated
the buy/sell option and instead included the obligation for the Company to purchase Mr. Buenting&rsquo;s interest upon his death
or permanent disability for $20 million or $18 million (subsequently increased to $20 million), respectively. In the event of Mr.
Buenting&rsquo;s death or permanent disability, his estate representative, trustee or designee shall become the selling representative
and sell his 50% interest to the Company. In order to fund the purchase of Mr. Buenting&rsquo;s interest, the Company has purchased
term life insurance with a payout of $20 million in the event of Mr. Buenting&rsquo;s death. The Company will be the beneficiary
and will also pay the premiums related to this life insurance contract. The life insurance proceeds of $20 million shall be used
as full payment for Mr. Buenting&rsquo;s interest in the occurrence of his death. On June 2, 2015, the Company purchased an insurance
policy with a five-year term on Mr. Buenting that provides a lump sum disability benefit in the principal sum of $20 million. &nbsp;In
the event of Mr. Buenting&rsquo;s permanent total disability, the principal sum becomes payable to the Company, and in turn the
Company is obligated to use the proceeds of the policy to purchase Mr. Buenting&rsquo;s 50% member&rsquo;s interest in RHB in accordance
with the terms of the amended agreements. No other transfer of member&rsquo;s interest is permitted other than to the selling representative
in the event of Mr. Buenting&rsquo;s death or permanent disability. The amended agreements were entered into in order to eliminate
the earnings-per-share volatility caused by the buy/sell option.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The amended agreements resulted in an obligation
to purchase Mr. Buenting&rsquo;s 50% member&rsquo;s interest that the Company is certain to incur because of Mr. Buenting&rsquo;s
death; therefore, the Company has classified the noncontrolling interest as mandatorily redeemable and has recorded a liability
in &ldquo;Members&rsquo; interest subject to mandatory redemption and undistributed earnings&rdquo; on the consolidated balance
sheets. The liability consists of the following (amounts in thousands):</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left">Member&rsquo;s interest subject to mandatory redemption&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">20,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">20,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Undistributed earnings attributable to this interest&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,836</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,079</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Earnings distributed&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(6,014</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,200</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; padding-left: 10pt">Total liability&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">23,822</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">22,879</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Undistributed earnings increased by $3.8
million and $2.1 million for the years ended December 31, 2015 and 2014, respectively, and were included in &ldquo;Other operating
(expense) income, net&rdquo; on the Company&rsquo;s consolidated statements of operations. Distributions for the years ended December
31, 2015 and 2014 were $2.8 million and $3.2 million, respectively.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 5pt 0 2pt"><I>Myers</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On November 28, 2015, Myers LP entered
into its Second Amended and Restated Limited Partnership Agreement, which replaced the Amended and Restated Limited Partnership
Agreement. This amendment included the obligation for the Company to purchase Myers&rsquo; interest, which includes all members&rsquo;
interest other than Sterling&rsquo;s 50% interest, upon the death or permanent disability of Clinton Wallace Myers for $20 million.
In the event of Mr. Myers&rsquo; death or permanent disability, his estate representative, trustee or designee shall become the
selling representative and sell Myers&rsquo; 50% interest to the Company. In order to fund the purchase of Myers&rsquo; interest,
the Company will purchase a term life insurance and disability insurance with a payout of $20 million, which is required to be
purchased within 120 days from the date of the executed agreement, in the event of Mr. Myers&rsquo; death or permanent disability.
The Company will be the beneficiary and will also pay the premiums related to these insurance contracts. The life insurance proceeds
of $20 million shall be used as full payment for Myers&rsquo; interest upon the occurrence of his death or permanent disability.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The amended agreements resulted in an obligation
to purchase Myers&rsquo; 50% interest that the Company is certain to incur because of Mr. Myers&rsquo; death; therefore, the Company
has classified the noncontrolling interest as mandatorily redeemable and has recorded a liability in &ldquo;Members&rsquo; interest
subject to mandatory redemption and undistributed earnings&rdquo; on the consolidated balance sheets. The liability consists of
the following (amounts in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left">Member&rsquo;s interest subject to mandatory redemption&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">20,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">--</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Undistributed earnings attributable to this interest&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">6,616</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; padding-left: 10pt">Total liability&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">26,616</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In order to reclassify the initial $26.1
million liability, $18.8 million was reclassified to the liability account and reduced &ldquo;Additional paid in capital&rdquo;
(&ldquo;APIC&rdquo;) on the Company&rsquo;s consolidated balance sheets. This $18.8 million represented the portion of the revaluation
of Myers&rsquo; noncontrolling interest that was above the $7.3 million held as Myers&rsquo; Noncontrolling interest in Equity
when the agreement was executed. According to GAAP, this reduction to APIC is treated similarly to a dividend to a preferred shareholder,
and would reduce earnings per share. Therefore, this $18.8 million reduction in APIC was included as a reduction to earnings per
share attributable to Sterling common stockholders. Refer to Note 13.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Undistributed earnings included $6.1 million
of accumulated earnings through November 30, 2015. An additional $0.5 million was included in undistributed earnings for December
2015 and was included in &ldquo;Other operating (expense) income, net&rdquo; on the Company&rsquo;s consolidated statement of operations.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 5pt 0 2pt"><I>RHB Inc.</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On June 20, 2014, the Company sold to Mr.
Buenting a 50% interest in RHB Inc. RHB Inc. is currently an ancillary company that provides certain services for RHB LLC. RHB
Inc. is run as a cost center with a financial goal to break-even, and has an immaterial amount of assets. The purchase price and
the accounting effects of the total transaction were immaterial to the Company.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 5pt 0 2pt"><I>JBC</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On January 23, 2014, RLW, the former owner
of JBC and the Company agreed to amend the above mentioned earn-out agreement in order to reduce the Company&rsquo;s recorded liability
at that time, while providing the former owner, who at the time was the chief executive officer of JBC, a greater incentive to
meet earnings benchmarks. The amendment resulted in a reduction of $0.6 million in the Company&rsquo;s earn-out liability, thereby
reducing the total earn-out liability to $1.4 million on December 31, 2013. As part of the amendment, a payment of $0.8 million
was made during the first quarter of 2014. The amendment increased the total available earn-out from $5.0 million to $10.0 million
if certain EBITDA benchmarks are met. The amendment extended the earn-out period through December 31, 2017 and reduced the benchmark
EBITDA for 2014 and 2015 to $1.5 million and increased it to $2.0 million in 2016 and 2017. This earn-out liability continues to
be classified as a Level 3 fair value measurement and the unobservable inputs continue to be the forecasted EBITDA for the periods
after the period being reported on through December 31, 2017. There was no yearly excess forecasted EBITDA in our calculation at
December 31, 2015 of the minimum EBITDA benchmarks for the years 2016 through 2017. The discounted present value of the additional
purchase price was estimated to be $0.3 million as of December 31, 2014. The undiscounted earn-out liability as of December 31,
2015 is minimal and could increase by $9.3 million if EBITDA during the earn-out period increases $18.5 million or more and could
decrease by the full amount of the liability for the year if EBITDA does not exceed the minimum threshold for that year. Each year
is considered a discrete earnings period and future losses by JBC, if any, would not reduce the Company&rsquo;s liability in years
in which JBC has exceeded its earnings benchmark. Any significant increase or decrease in actual EBITDA compared to the forecasted
amounts would result in a significantly higher or lower fair value measurement of the additional purchase price. This liability
is included in other long-term liabilities on the accompanying consolidated balance sheets. As part of recording the present value
of this liability, the Company incurs accreted interest expense for the passage of time until the time of settlement. The Company
incurred accreted interest expense of $0.3 million for the year ended December 31, 2014. As part of the updated EBITDA forecast,
the Company reduced its liability to zero and recorded interest income of $0.3 million in the first quarter of 2015. There has
been minimal change in the value of this liability; therefore, the interest income was $0.3 million for the year ended December
31, 2015.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Noncontrolling Interests&rsquo; &ndash; Call Options</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During the year ended December 31, 2015,
the Company entered into several agreements, with RHB and with Myers, which gives the 50% owners of these entities the option to
buy the Company&rsquo;s 50% interest in these entities for $10,000 should the Company ever become subject to the repossession or
disposition of its collateral as defined in the Company&rsquo;s new debt agreement with Nations or if the Company dissolves or
becomes insolvent. Based on these agreements, the Company does not believe that it is likely that the exercise of these options
would ever transpire; therefore, there has been no value placed on these options which resulted in no impact to our consolidated
financial statements. Refer to Note 9 for more information about the debt agreement with Nations.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Changes in Noncontrolling Interests</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The following table summarizes the changes
in the noncontrolling owners&rsquo; interests in subsidiaries and consolidated joint ventures for the years ended December 31,
2013 through 2015 (amounts in thousands):</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; font-size: 10pt; text-align: justify; text-indent: 0in">Balance, beginning of period&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">7,462</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">4,097</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">20,046</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Net income attributable to noncontrolling interest included in liabilities&#9;&#9;&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,024</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Net income attributable to noncontrolling interest included in equity&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,216</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,556</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,879</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Change in fair value of RLW put/call&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(59</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Change in fair value of RHB put/call&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,875</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Change due to the Myers amendment&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,367</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Change due to the RHB amendment</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(18,103</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Distributions to noncontrolling interests owners&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,402</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,191</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,056</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Acquisition of RLW noncontrolling interest&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(509</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; text-indent: 0in">Balance, end of period&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(91</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">7,462</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">4,097</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0 2pt">Noncontrolling owners&rsquo; interest in
earnings of subsidiaries for the year ended December 31, 2015 shown in the accompanying consolidated statement of operations is
$3.2 million, which the Company includes in &ldquo;Equity&rdquo;, &ldquo;Noncontrolling interests&rdquo; in the accompanying consolidated
balance sheet. There were distributions of $3.4 million to certain noncontrolling interest members during the year ended December
31, 2015.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0 2pt">Noncontrolling owners&rsquo; interest in
earnings of subsidiaries for the year ended December 31, 2014 shown in the accompanying consolidated statement of operations is
$4.6 million, which the Company includes in &rdquo;Equity&rdquo;, &ldquo;Noncontrolling interests&rdquo; in the accompanying consolidated
balance sheet. There were distributions of $1.2 million to certain noncontrolling interest members during the year ended December
31, 2014.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0 2pt">Noncontrolling owners&rsquo; interest in
earnings of subsidiaries and joint ventures for the year ended December 31, 2013 shown in the accompanying consolidated statement
of operations of $3.9 million includes income of $2.0 million attributable to noncontrolling interest owners, which the Company
includes in liabilities and $1.9 million which the Company includes in equity. Of the $2.0 million included in liabilities, less
than $0.1 million of net loss was reflected in &ldquo;Current obligations for noncontrolling owners&rsquo; interests in subsidiaries
and joint ventures,&rdquo; and $2.1 million of net income has been reclassified from &ldquo;Obligations for noncontrolling owners&rsquo;
interests in subsidiaries and joint ventures,&rdquo; leaving the Company with a zero balance in this account, to &ldquo;Members&rsquo;
interest subject to mandatory redemption&rdquo; in the accompanying consolidated balance sheet. The remaining $1.9 million was
attributable to noncontrolling interest owners which the Company includes in equity and was reflected in equity in &ldquo;Noncontrolling
interests&rdquo; in the accompanying consolidated balance sheet.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">3.</TD><TD>Variable Interest Entities</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 13.7pt; margin: 6pt 0">Under GAAP, the Company must determine whether
each entity, including joint ventures in which it participates, is a VIE. This determination focuses on identifying which owner
or joint venture partner, if any, has the power to direct the activities of the entity and the obligation to absorb losses of the
entity or the right to receive benefits from the entity disproportionate to its interest in the entity, which could have the effect
of requiring the Company to consolidate the entity in which we have a noncontrolling variable interest. Where the Company has determined
that it is appropriate to consolidate a VIE which it owns a 50% or less interest, the equity held by the remaining owners and their
portions of net income (loss) are reflected in the balance sheet line item &ldquo;Noncontrolling interests&rdquo; in &ldquo;Equity&rdquo;
and the statement of operations line item &ldquo;Noncontrolling owners&rsquo; interests in earnings of subsidiaries,&rdquo; unless
the equity interest is deemed to be mandatorily redeemable. Refer to Note 2 regarding the Company&rsquo;s mandatorily redeemable
obligations.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 13.7pt; margin: 6pt 0">On August 1, 2011, the Company purchased a
50% limited partner interest in Myers. Myers is a construction limited partnership located in California and was acquired in order
to expand the geographic scope of the Company&rsquo;s operations into California. The Company has determined that Myers is a VIE
for which the Company is the primary beneficiary and has consolidated Myers into the Company&rsquo;s financial statements.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 13.7pt; margin: 6pt 0">The determination that Myers is a VIE and
that the Company is the primary beneficiary is primarily due to the following factors. The partnership agreement requires that
Sterling provide funding as needed, when available, to the limited partnership. In addition, the partnership is relying on the
Company&rsquo;s surety bonding capacity in order to bid and perform large construction jobs resulting in the Company having joint
and several liability for completion of such jobs, and the Company will provide management to the partnership to oversee bidding
and management of larger projects. Although the Company will receive 50% of the income from the partnership, it may suffer more
than 50% of any losses as a result of its obligation to provide funding and its obligations under the surety bonds. Because the
Company exercises primary control over activities of the partnership and it is exposed to the majority of potential losses of
the partnership, the Company consolidated Myers within the Company&rsquo;s financial statements from August 1, 2011, the date
of acquisition.</P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 13.7pt; margin: 6pt 0">The financial information of Myers, which
is reflected in our consolidated balance sheets and statements of operations, is as follows (amounts in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: 0in">Assets:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Current assets:&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left; text-indent: 18.9pt">Cash and cash equivalents &#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">3,226</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">148</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 18.9pt">Contracts receivable, including retainage&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">19,941</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">21,327</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 18.9pt">Other current assets&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">15,887</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">7,656</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in; padding-left: 30pt">Total current assets&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">39,054</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">29,131</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Property and equipment, net&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">10,080</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,303</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; text-indent: 0in">Goodwill&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,501</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,501</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 0.45in">Total assets&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">50,635</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">39,935</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: 0in">Liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Current liabilities:&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 18.9pt">Accounts payable&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">20,596</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">15,795</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 18.9pt">Other current liabilities&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">10,986</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">9,000</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 13.5pt; padding-left: 20pt">Total current liabilities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">31,582</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">24,795</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Long-term liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 18.9pt">Other long-term liabilities&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,370</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">16</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 14.45pt; padding-left: 20pt">Total liabilities&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">34,952</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">24,811</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; font-size: 10pt">Revenues&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">175,691</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">144,837</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">82,421</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Operating income&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,371</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,319</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,764</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Net income attributable to Sterling common stockholders&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,681</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,657</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,879</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">4.</TD><TD>Cash and Cash Equivalents and Short-term Investments</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company considers all highly liquid
investments with original or remaining maturities of three months or less at the time of purchase to be cash equivalents. Cash
and cash equivalents include cash balances held by our wholly-owned subsidiaries and less than wholly-owned subsidiaries as well
as the Company&rsquo;s VIE. Refer to Note 3 for more information regarding the Company&rsquo;s consolidated VIE.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Restricted cash of approximately $3.0 million
is included in &ldquo;other assets, net&rdquo; on the consolidated balance sheet as of December 31, 2015, and represents cash deposited
by the Company into a separate account and designated as collateral for a standby letter of credit in the same amount in accordance
with contractual agreements.&nbsp; Refer to Notes 9 and 11 for more information about our standby letter of credit. In addition,
restricted cash of approximately $2.0 million is included in &ldquo;Other current assets&rdquo; on the consolidated balance sheet
as of December 31, 2015, and represents cash deposited by a customer, for the benefit of the Company, in an escrow account which
is restricted until the customer releases the restriction upon the completion of the job. <FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company holds cash on deposit in U.S.
banks, at times, in excess of federally insured limits. Management does not believe that the risk associated with keeping cash
deposits in excess of federal deposit insurance limits represents a material risk.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At December 31, 2015 and 2014, the Company
had no short-term investments.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At December 31, 2015 and 2014, there were
no cash and cash equivalents belonging to majority-owned joint ventures that are consolidated in these financial statements.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Gains and losses realized on short-term
investment securities are included in &ldquo;Gains on sale of securities&rdquo; in the accompanying statements of operations. Unrealized
gains (losses) on short-term investments are included in accumulated other comprehensive income in stockholders&rsquo; equity,
net of tax, as the gains and losses may be temporary. For the year ended December 31, 2013, total proceeds from sales of short-term
investments were $49.9 million, with gross realized gains of $0.7 million, and gross realized losses of $0.6 million. Accumulated
other comprehensive income at December 31, 2013 included no unrealized gains on short-term investments. Upon the sale of short-term
investments, the cost basis used to determine the gain or loss based on the specific identification of the security sold. All items
included in accumulated other comprehensive income are at the corporate level, and no portion is attributable to noncontrolling
interests.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company earned no interest income for
the years ended December 31, 2014 and 2015, respectively, and earned interest income of $0.6 million for the year ended December
31, 2013 on its cash, cash equivalents and short-term investments. These amounts are recorded in &ldquo;interest income&rdquo;
in the Company&rsquo;s consolidated statement of operations.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">5.</TD><TD>Costs and Estimated Earnings and Billings on Uncompleted Contracts</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Billing practices for our contracts are
governed by the contract terms of each project based on progress toward completion approved by the owner, achievement of milestones
or pre-agreed schedules. Billings do not necessarily correlate with revenue recognized under the percentage-of-completion method
of accounting. The current liability, &ldquo;Billings in excess of costs and estimated earnings on uncompleted contracts,&rdquo;
represents billings in excess of revenues recognized. The current asset, &ldquo;Costs and estimated earnings in excess of billings
on uncompleted contracts,&rdquo; represents revenues recognized in excess of amounts billed to the customer, which are usually
billed during normal billing processes following achievement of contractual requirements. In addition, revenue associated with
unapproved change orders and claims is also included when realization is probable and amounts can be reliably determined.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">The two tables below set forth the costs incurred
and earnings accrued on uncompleted contracts (revenues) compared with the billings on those contracts through December 31, 2015
and 2014 and reconcile the net excess billings to the amounts included in the consolidated balance sheets at those dates (amounts
in thousands).</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left">Costs incurred and estimated earnings on uncompleted &nbsp;contracts&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">1,741,070</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">1,566,831</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Billings on uncompleted contracts&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,744,721</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1,559,077</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; padding-left: 10pt; text-indent: -10pt">(Excess of billings over costs incurred and estimated earnings) excess of costs incurred and estimated earnings over billings on uncompleted contracts&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(3,651</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">7,754</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Included in the accompanying balance sheets
under the following captions:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left">Costs and estimated earnings in excess of billings on uncompleted contracts&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">26,905</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">33,403</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Billings in excess of costs and estimated earnings on uncompleted contracts&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(30,556</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(25,649</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Net amount of costs and estimated earnings on uncompleted contracts (below) above billings&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(3,651</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">7,754</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Revenues recognized and billings on uncompleted
contracts include cumulative amounts recognized as revenues and billings in prior years.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">6.</TD><TD>Construction Joint Ventures</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We participate in joint ventures with other
large construction companies and other partners, typically for large, technically complex projects, including design-build projects,
when it is desirable to share risk and resources in order to seek a competitive advantage or when the project is too large for
us to obtain sufficient bonding. Joint venture partners typically provide independently prepared estimates, furnish employees and
equipment, enhance bonding capacity and often also bring local knowledge and expertise. We select our joint venture partners based
on our analysis of their construction and financial capabilities, expertise in the type of work to be performed and past working
relationships with us, among other criteria.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We participate in various construction
joint venture partnerships. Generally, each construction joint venture is formed to accomplish a specific project and is jointly
controlled by the joint venture partners. The joint venture agreements typically provide that our interests in any profits and
assets, and our respective share in any losses and liabilities that may result from the performance of the contract are limited
to our stated percentage interest in the venture. We have no significant commitments beyond completion of the contract with the
customer.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Joint venture contracts with project owners
typically impose joint and several liability on the joint venture partners. Although our agreements with our joint venture partners
provide that each party will assume and pay its share of any losses resulting from a project, if one of our partners is unable
to pay its share, we would be fully liable under our contract with the project owner. Circumstances that could lead to a loss under
these guarantee arrangements include a partner&rsquo;s inability to contribute additional funds to the venture in the event that
the project incurs a loss or additional costs that we could incur should the partner fail to provide the services and resources
toward project completion that had been committed to in the joint venture agreement. Historically, the Company has not incurred
a liability related to the nonperformance of a joint venture partner.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Under a joint venture agreement, one partner
is typically designated as the sponsor or manager. The sponsoring partner typically provides all administrative, accounting and
most of the project management support for the project and generally receives a fee from the joint venture for these services.
We have been designated as the sponsoring partner in certain of our current joint venture projects and are a non-sponsoring partner
in others.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Under GAAP, the Company must determine
whether each joint venture in which it participates is a variable interest entity. This determination focuses on identifying which
joint venture partner, if any, has the power to direct the activities of a joint venture and the obligation to absorb losses of
the joint venture or the right to receive benefits from the joint venture in excess of their ownership interests and could have
the effect of requiring us to consolidate joint ventures in which we have a noncontrolling variable interest. At December 31, 2015,
we had no participation in a joint venture where we had a material non-majority variable interest.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Where we are a noncontrolling venture partner,
we account for our share of the operations of such construction joint ventures on a pro rata basis using proportionate consolidation
on our consolidated statements of operations and as a single line item (&ldquo;Receivables from and equity in construction joint
ventures&rdquo;) in the consolidated balance sheets. This method is an acceptable modification of the equity method of accounting
which is a common practice in the construction industry. Combined financial amounts of joint ventures in which the Company has
a noncontrolling interest and the Company&rsquo;s share of such amounts which are included in the Company&rsquo;s consolidated
financial statements are shown below (amounts in thousands):</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Total combined:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left; padding-left: 10pt">Current assets&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">17,312</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">18,132</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Less current liabilities&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(49,371</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(49,035</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 0in; padding-left: 20pt">Net assets&#9;&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(32,059</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(30,903</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: 0in; padding-left: 10pt">Backlog&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">35,113</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">55,063</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Total combined:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 55%; font-size: 10pt; padding-left: 10pt">Revenues&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">60,289</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">51,015</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">135,699</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Income before tax&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,909</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,606</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(20,758</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Sterling&rsquo;s noncontrolling interest:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 10pt">Share of revenues&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">23,778</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">20,243</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">54,096</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 10pt">Share of income before tax&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,502</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,111</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(11,088</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left; text-indent: 0in">Sterling&rsquo;s noncontrolling interest in backlog&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">11,748</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">15,889</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Sterling&rsquo;s receivables from and equity in construction joint ventures&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,930</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,153</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Approximately $12 million of the Company&rsquo;s
backlog at December 31, 2015 was attributable to projects performed by joint ventures. The majority of this amount is attributable
to the Company&rsquo;s joint venture with Shimmick Construction Company, where the Company has a 30% interest.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The caption &ldquo;Receivables from and
equity in construction joint ventures,&rdquo; includes undistributed earnings and receivables owed to the Company. Undistributed
earnings are typically released to the joint venture partners after the customer accepts the project as completed and any warranty
period, if any, has passed.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">7.</TD><TD>Property and Equipment</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Property and equipment are summarized as
follows (amounts in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: justify; text-indent: 0in">Construction equipment&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">114,724</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">129,150</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Transportation equipment&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,056</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,205</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Buildings&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">10,860</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">10,777</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Office equipment&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,810</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,761</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Leasehold improvement&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">894</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">878</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Construction in progress&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,986</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">387</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Land&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,257</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,530</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: 0in">Water rights&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">200</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">200</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">153,787</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">167,888</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: 0in">Less accumulated depreciation&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(80,312</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(80,790</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.25pt; text-indent: 0in">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">73,475</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">87,098</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"></P>

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<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Asset Sold - Land</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On August 24, 2015, the Company completed
the sale of a parcel of land located in Harris County, Texas to Joseph P. Harper, Sr., former President and Chief Operating Officer
of the Company. Proceeds received were approximately $2.4 million. Upon completion of the sale, the Company recognized a gain of
approximately $1.4 million included in &ldquo;Other operating (expense) income, net&rdquo; on the consolidated statement of operations.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><I>Assets Held for Sale &ndash; Construction and Transportation
Equipment</I></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company intends to sell certain construction
and transportation equipment during the next twelve months. At December 31, 2015, the Company&rsquo;s consolidated balance sheet
included assets held for sale with a carrying value of approximately $1.1 million, net of an immaterial impairment charge, which
have been reclassified out of &ldquo;Property and equipment, net,&rdquo; and into &ldquo;Other current assets.&rdquo;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">8.</TD><TD>Goodwill</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Goodwill represents the excess of the cost
of companies acquired over the fair value of their net assets at the dates of acquisition. GAAP requires that goodwill not be amortized
and that goodwill is to be tested for impairment at least annually at the reporting unit level. The Company tests for goodwill
impairment annually on October 1<SUP>st</SUP> unless impairment triggers exist at interim periods. There are two steps involved
in the testing of goodwill, excluding a qualitative analysis. The first step compares the book value of the Company&rsquo;s stock
(stockholders&rsquo; equity or net assets) to the adjusted fair market value of those shares. If the adjusted fair value of the
stock is greater than the calculated book value of the stock, goodwill is deemed not to be impaired and no further testing is required.
If the adjusted fair value is less than the calculated book value, then step two of determining the fair value of net assets must
be taken to determine the impairment amount.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">To determine the fair value of the Company&rsquo;s
net assets, the Company used the weighted average of the following valuation techniques: the market approach, which uses market
capitalization information plus a control premium and an income approach, which uses a discounted cash flow methodology. The market
approach includes level one fair value inputs, such as the Company&rsquo;s stock price, at the date of our test, and level two
fair value inputs, such as the control premiums based on prior year sales transactions of construction contractors and engineering
services, similar sized transactions based on the Company&rsquo;s market capitalization, and all-inclusive total industries transactions.
The income approach includes level three inputs such as the Company&rsquo;s calculated weighted average cost of capital and future
income projections that include assumptions about revenue and gross profit growth, along with other assumptions.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During the first and third quarters of
2015, the Company noted there was an impairment trigger present during these interim periods and performed step one of the impairment
test discussed above. Based on the results of our goodwill impairment tests, we concluded that there was not an impairment of goodwill
during these periods. In addition, as part of our 2015 and 2014 annual tests, we determined that the fair value of the Company&rsquo;s
equity continues to be more than the carrying value of the Company&rsquo;s equity by approximately 21% and 19%, respectively.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At December 31, 2015, we had goodwill with
a remaining carrying amount of approximately $54.8 million. Testing under step one in 2014 and 2013 also did not indicate that
the adjusted fair value of the Company&rsquo;s stock was less than its book value.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">9.</TD><TD>Line of Credit and Long-Term Debt</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Long-term debt consists of the following
(in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: justify; text-indent: 0in">Equipment-based Facility&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">17,957</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">--</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Credit Facility&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">34,601</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Notes payable for transportation and construction equipment and other&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,342</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,385</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">21,299</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">37,986</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: 0in">Less current maturities of long-term debt&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(5,192</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(965</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; text-indent: 0in">Total long-term debt&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">16,107</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">37,021</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Equipment-based Facility</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In May 2015, the Company and its wholly-owned
subsidiaries entered into a $40.0 million loan and security agreement with Nations, consisting of a $20.0 million Term Loan and
a $20.0 million Revolving Loan (combined, the &ldquo;Equipment-based Facility&rdquo;), which replaced its Prior Credit Facility.
The amount of the Revolving Loan that may be borrowed from time to time is determined quarterly and may not exceed $20.0 million.
In addition, the sum of the outstanding balances of the Equipment-based Facility may not exceed the lesser of $40.0 million or
65% of the appraised value of the collateral pledged for the loans. At December 31, 2015, the Company had approximately a borrowing
base of $29.6 million, which was the result of calculating 65% of the appraised value (where appraised value equals net operating
liquidated value) of the Company&rsquo;s collateral. The Revolving Loan may be utilized by the Company to provide ongoing working
capital and for other general corporate purposes.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Equipment-based Facility bears interest
at an initial fixed annual rate of 12%, which is subject to (i) a decrease of up to two percentage points based on the Company's
fixed charge coverage ratio for each of the most recently ended four quarters beginning with the four quarters ending June 30, 2016;
and (ii) an increase of up to two percentage points beginning December 31, 2015 based on the fixed charge coverage ratio at the
end of the following four quarters. Principal on the Term Loan is payable in 47 monthly installments (with accrued interest) with
a final payment of the then outstanding principal amount on May 29, 2019. Up to $5.0 million of the Term Loan may be prepaid in
any year, but subject to a pre-payment fee that declines as the Term Loan nears maturity. Outstanding Revolving Loans are payable
in full thirty days before the maturity date of the Term Loan.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Equipment-based Facility is secured
by all of the Company's personal property except accounts receivable, including all of its construction equipment, which forms
the basis of availability under the Revolving Loan. The Equipment-based Facility is also secured by one-half of the equipment of
the Company's 50%-owned affiliates, Road and Highway Builders, LLC and Myers &amp; Sons Construction, L.P. pursuant to a separate
security agreement with those entities. If a default occurs, Nations may exercise the Company's rights in the collateral, with
all of the rights of a secured party under the Uniform Commercial Code, including, among other things, the right to sell the collateral
at public or private sale.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The proceeds of the Term Loan of $20.0
million and our initial draw of $14.6 million under the Revolving Loan were utilized by the Company to repay the balance outstanding
and terminate the Prior Credit Facility and for other general corporate purposes. In addition, in connection with incurring this
debt, we recorded $1.3 million in deferred debt issuance costs which are included in &ldquo;Other assets, net&rdquo; in our consolidated
balance sheet, which is being amortized on a straight line basis over the term of the Equipment-based Facility.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s Equipment-based Facility
has no financial covenants; however, it contains restrictions on the Company&rsquo;s ability to:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Incur liens and encumbrances on equipment;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Incur further indebtedness;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Dispose of a material portion of assets or merge with a third party;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Make acquisitions; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Make investments in securities.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Due to this new Equipment-based Facility
agreement, the Company&rsquo;s Letter of Credit, which under our Prior Credit Facility reduced the Company&rsquo;s borrowing availability,
is now collateralized with cash. The aggregate amount of letters of credit outstanding under the Prior Credit Facility was $3.0
million at December 31, 2014, which reduced availability under the Prior Credit Facility. Refer to Note 4 for more information
regarding the Company&rsquo;s cash and cash equivalents including restricted cash used as collateral.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 0">Interest expense related to our Equipment-based
Facility was $2.9 million for the 2015 fiscal year compared to $1.0 million in the 2014 fiscal year. This increase in interest
expense in 2015 was driven by the increased interest rate on the new Equipment-based Facility agreement, as described above.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At December 31, 2015, the Company had
zero drawn on the Revolving Loan, $18.0 million Term Loan outstanding and $11.6 million of borrowings available. At December 31,
2014, the Company had $34.6 million outstanding under the Prior Credit Facility and $2.4 million of borrowings available.</P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0.05in 6pt 0"><B><I>Fair Value</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 0">The Company&rsquo;s debt is recorded at the
carrying amount in the consolidated balance sheets. The Company uses an income approach to determine the fair value of its 12%
Equipment-based Term Loan due May 29, 2019 using estimated cash flows, which is a Level&nbsp;3 fair value measurement. As of December
31, 2015, the carrying values and fair values are as follows (amounts in thousands):</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31, &nbsp;2015</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Carrying Value</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Equipment-based revolving loan</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: 0in">Equipment-based term loan&#9;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">17,957</TD><TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">17,957</TD><TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; text-indent: 0in">Total Equipment-based Facility debt&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">17,957</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">17,957</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0.05in 2pt 0">The Equipment-based revolving loan&rsquo;s
fair value was not practicable to estimate as the timing of cash drawdowns and repayments cannot be determined. The effective interest
rate of the Equipment-based revolving loan was 12.17% at December 31, 2015.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0.05in 2pt 0">As of December 31, 2014, the recorded
value of the Company&rsquo;s Prior Credit Facility approximated its fair value, as the amount outstanding at any given point in
time was the principal amount due and interest was paid based on this amount considering the duration outstanding. In order to
extinguish this Prior Credit Facility debt, the Company incurred costs of $0.2 million which is included in the Company&rsquo;s
consolidated statement of operations.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Notes Payable for Transportation and Construction
Equipment</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company has purchased and financed
various transportation and construction equipment to enhance the Company&rsquo;s fleet of equipment. The total long-term notes
payable related to the purchase of financed equipment was $3.3 million at both December 31, 2015 and 2014. The purchases have payment
terms ranging from 3 to 5 years and the associated interest rates range from 3.12% to 6.29%.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Maturities of Debt</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s long-term obligations
mature in future years as follows (amounts in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ending December 31,</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: right; border-bottom: Black 1pt solid">Amount</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 85%; font-size: 10pt; text-align: left">2016</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">5,192</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">2017</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,993</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">2018</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,868</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">2019</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,196</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">2020</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">50</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; text-align: left">Thereafter&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; text-indent: 0in; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">21,299</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; margin: 6pt 0; text-indent: 0.25in"><FONT STYLE="font-weight: normal">The long-term obligations above
include $0.5 million related to a capital lease outstanding as of December 31, 2015.&nbsp; See Note 1 for more information regarding
our capital lease.</FONT></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">10.</TD><TD>Income Taxes and Deferred Tax Asset/Liability</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Current income tax expense represents federal
and state income tax paid or expected to be payable for the years shown in the consolidated statements of operations. The income
tax expense (benefit) in the accompanying consolidated financial statements consists of the following (amounts in thousands):</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; font-size: 10pt; text-align: left; text-indent: 0in">Current tax expense (benefit)&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">7</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">632</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(3,928</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0in">Deferred tax expense &#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,150</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 0in">Total tax expense&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">7</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">632</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">1,222</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Deferred tax assets and liabilities consist of the following
(amounts in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Long Term</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Assets related to:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left; padding-left: 10pt">Accrued compensation and other&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">2,084</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">1,868</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Amortization and impairment of goodwill &#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6,705</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,489</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Noncontrolling interest&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,247</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,326</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Deferred revenue&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">688</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">125</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Revaluation of put/call liabilities&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,638</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,471</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Net operating loss carryforwards&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">39,317</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">30,822</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Valuation allowance for deferred tax assets&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(56,399</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(37,774</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Liabilities related to:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Depreciation of property and equipment&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(11,766</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(14,186</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Receivables from and equity in construction joint ventures</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,494</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,126</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; padding-left: 10pt">Other&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(20</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(15</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Net asset&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-indent: 0in; margin-top: 0pt; margin-right: 0pt; margin-left: 0pt"></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 0">The income tax provision differs from the
amount using the statutory federal income tax rate of 35% for the following reasons (amounts in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="23" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 34%; font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Tax benefit at the U.S. federal statutory rate&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">(6,013</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">35.0</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">(1,608</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">35.0</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">(24,081</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">35.0</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">State tax based on income, net of refunds and federal benefits&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(740</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4.3</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(155</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3.4</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,280</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1.8</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Taxes on subsidiaries&rsquo; and joint ventures&rsquo; earnings allocated to noncontrolling interests owners&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(2,620</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">15.3</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(2,365</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">51.5</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,375</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2.0</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Valuation allowance&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,404</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(54.7</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,152</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(90.4</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">28,215</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(41.0</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Reduction of tax receivable&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">524</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(11.4</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Non-taxable interest income&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(195</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.3</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Other permanent differences&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(24</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">0.1</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">84</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(1.9</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(62</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">0.1</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Income tax expense &#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">7</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">632</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(13.8</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)%</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">1,222</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(1.8</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)%</TD></TR>
</TABLE>



<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We have federal and state income
tax net operating loss (&ldquo;NOL&rdquo;) carryforwards of $105.4 million and $48.4 million, which will expire at various
dates in the next 20 years for U.S. federal income tax and in the next 5 to 20 years for the various state jurisdictions
where we operate. Such NOL carryforwards expire as follows (in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 89%; font-size: 10pt; text-align: left; text-indent: 0in">2020</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">15</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">2021</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">2028</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,748</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">2029</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,480</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">2033</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">73,102</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">2034</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">40,026</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0in">2035</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">28,465</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 0in">Total&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">153,841</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Management assesses the available positive
and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.
A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended
December 31, 2015. The cumulative three-year period loss that remained at December 31, 2015 was the result of write-downs recorded
during the past three years. Such objective evidence limits the ability to consider other subjective evidence such as our projections
for future growth. On the basis of this evaluation, as of December 31, 2015, a valuation allowance of $56.4 million has been recorded
on the net deferred tax assets including federal and state net operating losses as they are not likely to be realized. The amount
of the deferred tax asset considered realizable, however, could be adjusted in the future if objective negative evidence or cumulative
losses are no longer present and additional weight may be given to subjective evidence such as our projections for growth.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">If our assumptions change and we determine
we will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred
tax assets as of December 31, 2015, will be accounted for as follows: approximately $46.8 million will be recognized as a reduction
of income tax expense and $9.6 million will be recorded as an increase in equity.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On September 13, 2013, the U.S. Treasury
Department and the I.R.S. issued final regulations that address costs incurred in acquiring, producing, or improving tangible property
(the &quot;tangible property regulations&quot;). The tangible property regulations are generally effective for tax years beginning
on or after January 1, 2014. The Company intends to adopt the tax treatment of expenditures to improve tangible property and the
capitalization of inherently facilitative costs to acquire tangible property as of January 1, 2014. The tangible property regulations
will require the Company to make additional tax accounting method changes as of January 1, 2014; however, management does not anticipate
the impact of these changes to be material to the Company&rsquo;s consolidated financial position, its results of operations, or
both.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">As a result of the Company&rsquo;s analysis,
management has determined that the Company does not have any material uncertain tax positions. The Company&rsquo;s policy is to
recognize interest related to any underpayment of taxes as interest expense, and penalties as administrative expenses. No interest
or penalties have been accrued at December 31, 2015 or 2014. The Company&rsquo;s U.S. federal income tax returns for 2012 and later
years are open and subject to examination by the I.R.S. In addition, the Company&rsquo;s state income tax returns for 2011 and
later years are open and subject to examination.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">11.</TD><TD>Commitments and Contingencies</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Employment Agreements&#9;</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At December 31, 2015, the Company&rsquo;s
Chief Executive Officer, one other officer and certain officers of its subsidiaries had employment agreements which provided for
payments of annual salary, incentive compensation and, for certain of the officers, benefits if their employment is terminated
without cause.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Self-Insurance</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company is self-insured for employee
health claims. Its policy is to accrue the estimated liability for known claims and for estimated claims that have been incurred
but not reported as of each reporting date. In order to reduce the Company&rsquo;s exposure to large health claims, it has obtained
stop-loss coverage for the policy period as follows:</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Coverage for medical and prescription drug claim amounts in excess of $55,000 for RLW and JBC,
and $125,000 for all other entities, for each insured person within a plan year.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Combined coverage for medical and prescription drug claim amounts in excess of $5.2 million within
a plan year.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">For the years ended December 31, 2015,
2014 and 2013, the Company incurred $2.0 million, $2.2 million, and $2.4 million, respectively, in claim expenses related to this
plan.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company and its subsidiaries are also
self-insured for workers&rsquo; compensation, general liability, and auto claims up to $350,000, $250,000 and $50,000 per occurrence,
respectively, with a maximum aggregate liability of $4.0 million combined casualty losses per year.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s policy is to accrue
the estimated liability for known claims and for estimated workers compensation, employee health, general liability and other claims
that have been incurred but not reported as of each reporting date. At December 31, 2015 and 2014, the Company has recorded an
estimated liability of $2.9 million and $2.8 million, respectively, which it believes is adequate for such claims based on its
claims history and actuarial studies. The Company has a safety and training program in place to help prevent accidents and injuries
and works closely with its employees and the insurance company to monitor all claims.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company is required by our insurance
provider to obtain and hold a standby letter of credit. This letter of credit serves as a guarantee by the banking institution
to pay our insurance provider the incurred claim costs attributable to our general liability, workers compensation and automobile
liability claims, up to the amount stated in the standby letter of credit, in the event that these claims were not paid by the
Company. Due to our new Equipment-based Facility, we have now cash collateralized the letter of credit, resulting in the cash being
designated as restricted. Historically, this standby letter of credit has not been drawn upon. Refer to Note 4 for more information
on our restricted cash and Note 9 for more information on our new Equipment-based Facility, including the amount held in our standby
letter of credit at December 31, 2015 and 2014.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Guarantees</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company obtains bonding on construction
contracts through Travelers Casualty and Surety Company of America (&ldquo;Travelers&rdquo;). As is customary in the construction
industry, the Company indemnifies Travelers for any losses incurred by it in connection with bonds that are issued. The Company
has granted Travelers a security interest in accounts receivable and contract rights for that obligation.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company typically indemnifies contract
owners for claims arising during the construction process and carries insurance coverage for such claims, which in the past have
not been material.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s Certificate of Incorporation
provides for indemnification of its officers and directors. The Company has a directors and officers insurance policy that limits
their exposure to litigation against them in their capacities as such.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Litigation</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company is the subject of certain other
claims and lawsuits occurring in the normal course of business. Management, after consultation with legal counsel, does not believe
that the outcome of these other actions will have a material impact on the financial statements of the Company. There are no significant
unresolved legal issues as of December 31, 2015 and 2014.</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 6pt 0 6pt 0.25in"><B><I>Purchase Commitments</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">To manage the risk of changes in material
prices and subcontracting costs used in tendering bids for construction contracts, most of the time, we obtain firm quotations
from suppliers and subcontractors before submitting a bid. These quotations do not include any quantity guarantees. As soon as
we are advised that our bid is the lowest, we enter into firm contracts with most of our materials suppliers and sub-contractors,
thereby mitigating the risk of future price variations affecting the contract costs.</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top"><TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">12.</TD><TD>Operating Leases</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company leases certain property and
equipment under cancelable and non-cancelable agreements including office space.</P>



<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Minimum annual rentals for all operating
leases having initial non-cancelable lease terms in excess of one year are as follows (amounts in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ending December 31,</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 85%; font-size: 10pt; text-align: left; text-indent: 0in">2016</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">1,160</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">2017</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,007</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">2018</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,025</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">2019</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">978</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">2020</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">965</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; text-indent: 0in">Thereafter&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">755</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 7.9pt">Total future minimum rental payments</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">5,890</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Total rent expense for operating leases amounted
to approximately $1.5 million, $1.6 million and $0.9 million during 2015, 2014 and 2013, respectively.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">13.</TD><TD>Net Loss Per Share Attributable to Sterling Common Stockholders</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Basic net loss per share attributable to
Sterling common stockholders is computed by dividing net loss attributable to Sterling common stockholders by the weighted average
number of common shares outstanding during the period. Diluted net loss per common share attributable to Sterling common stockholders
is the same as basic net loss per share attributable to Sterling common stockholders but assumes the exercise of dilutive unvested
common stock and stock options using the treasury stock method. The following table reconciles the numerators and denominators
of the basic and diluted per common share computations for net loss attributable to Sterling common stockholders for 2015, 2014
and 2013 (amounts in thousands, except per share data):</P>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">Numerator:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 20pt; text-indent: -10pt; width: 55%">Net loss attributable to Sterling common stockholders&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(20,402</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(9,781</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(73,929</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-left: 20pt; text-indent: -10pt">Revaluation of noncontrolling interest due to a new agreement or a put/call liability reflected in additional paid in capital or retained earnings, net of tax&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(18,774</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(7,686</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(39,176</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(9,781</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(81,615</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">Denominator:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 20pt; text-indent: -10pt">Weighted average common shares outstanding &mdash; basic&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">19,375</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,063</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,635</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 20pt; text-indent: -10pt">Shares for dilutive unvested stock and stock options&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">--</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; padding-left: 20pt; text-indent: -10pt">Weighted average common shares outstanding and assumed <BR>conversions&mdash; diluted&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">19,375</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">18,063</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">16,635</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; padding-left: 20pt; text-indent: -10pt">Basic and diluted net loss per share attributable to Sterling common stockholders&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(2.02</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(0.54</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(4.91</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>


<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0 0 2pt">The Company had no options outstanding but
considered antidilutive due to the option exercise price exceeding the average share market price at December 31, 2015, 2014 and
2013, respectively. In addition, approximately 0.4 million, 0.2 million and 0.2 million shares of unvested stock and stock options
were excluded from the diluted weighted average common shares outstanding in 2015, 2014 and 2013, respectively, as the Company
incurred a loss in these years and the impact of such shares would have been antidilutive.</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 10pt; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">14.</TD><TD>Stockholders&rsquo; Equity</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0">Holders of common stock are entitled to one
vote for each share on all matters voted upon by the stockholders, including the election of directors, and do not have cumulative
voting rights. Subject to the rights of holders of any then outstanding shares of preferred stock, common stockholders are entitled
to receive ratably any dividends that may be declared by the Board of Directors out of funds legally available for that purpose.
Holders of common stock are entitled to share ratably in net assets upon any dissolution or liquidation after payment of provision
for all liabilities and any preferential liquidation rights of our preferred stock then outstanding. Common stock shares are not
subject to any redemption provisions and are not convertible into any other shares of capital stock. The rights, preferences and
privileges of holders of common stock are subject to those of the holders of any shares of preferred stock that may be issued in
the future.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Board of Directors may authorize the
issuance of one or more classes or series of preferred stock without stockholder approval and may establish the voting powers,
designations, preferences and rights and restrictions of such shares. No preferred shares have been issued.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><B><I>Treasury and Forfeited Shares</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In October 2008, the Company announced
a share-repurchase program to purchase up to $5 million in shares of common stock. In August 2010, the Company announced an increase
to the share-repurchase program to purchase an additional $5 million in shares of common stock, for a total up to $10 million.
The specific timing and amount of repurchase will vary based on market conditions, securities law limitations and other factors.
There were no shares repurchases in 2015 and 2014 related to the share-repurchase program.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company accounts for the repurchase
of treasury shares under the cost method. When shares are repurchased, cash is paid and the treasury stock account is debited for
the price paid. Under the cost method, retirement of treasury stock would result in a debit to the common stock account for the
original par value, a debit to additional paid-in capital for the excess between the par value and the original sales price, a
debit to retained earnings for any excess amounts paid above the original sales price and a credit to the treasury stock account
for the price paid.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Forfeited shares are generally the result
of an employee&rsquo;s separation from the Company. Forfeitures of our service-, performance- and market-based share awards are
discussed below. Such stock is held briefly as treasury stock and canceled during the year. At December 31, 2015 and 2014, there
was no treasury stock held by the Company.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">Upon the vesting of unvested common stock
(or restricted stock) the Company may withhold shares, based on the employee&rsquo;s election, in order to satisfy federal tax
withholdings. The shares held by the Company are considered constructively retired and are retired shortly after withholding. The
Company then remits the withholding taxes required by the taxing agencies. During 2015 and 2014, there were 96,076 and 8,120 shares
withheld for tax purposes and retired.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><B><I>Stock-based Compensation and Grants</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company has a stock-based incentive
plan that is administered by the Compensation Committee of the Board of Directors (the &ldquo;2001 Plan&rdquo;). The 2001 Plan
is in effect until May 2021 as a result of a May 2011 amendment to extend its term for an additional ten years. The 2001 Plan provides
for the issuance of stock awards for up to 1,900,000 shares of the Company&rsquo;s common stock. The Compensation Committee may
reward employees and non-employees with various types of awards including but not limited to warrants, stock options, common stock,
and unvested common stock (or restricted stock) vesting on service, performance or market criteria.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At December 31, 2015, there were 614,921
shares of common stock available under the 2001 Plan. All shares under the plan are available for issuance pursuant to future stock-based
compensation awards.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">There were no options outstanding at December
31, 2015 and 2014 and no shares are, or will be, available for grant under the Company&rsquo;s other option plans, all of which
have been terminated.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"></P>

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<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><B><I>Common Stock Awards</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The following table summarizes the Company&rsquo;s
service-based share compensation awards:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Shares</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average Fair Value Per Share</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left">Nonvested at January 1, 2013&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">186,630</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">11.03</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Granted&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">60,032</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9.74</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Vested&#9;&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(56,602</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">10.57</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Forfeited&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(8,944</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">13.57</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Nonvested at December 31, 2013&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">181,116</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">10.61</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Granted&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">61,957</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9.05</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Vested&#9;&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(73,190</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6.88</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Forfeited&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(20,412</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">11.66</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Nonvested at December 31, 2014&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">149,471</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">11.65</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Granted&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">978,526</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4.53</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt">Vested&#9;&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(166,622</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8.56</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Forfeited&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(47,552</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">6.91</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Nonvested at December 31, 2015&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">913,823</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">4.83</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In 2015, 2014 and 2013, several key employees
were granted an aggregate total of 917,851, 18,536 and 25,207 shares of unvested common stock, respectively, with a weighted average
fair value per share of $4.55, $11.38 and $9.30 per share, respectively, resulting in compensation expense of $4.4 million, $0.2
million and $0.2 million, respectively, expected to be recognized ratably over a three- or five-year restriction period. Of the
917,851 shares awarded and the $4.4 million expense, $2.5 million, and 600,000 shares, is related to the award granted to the
Company&rsquo;s CEO in May 2015 which vests ratably over three years.</P>



<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The 2001 plan provides for unvested (or
restricted) and vested common stock grants, and pursuant to non-employee director compensation arrangements, non-employee directors
of the Company were awarded unvested stock with one-year vesting as follows:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; font-size: 10pt; text-align: justify; text-indent: 0in">Shares awarded to each non-employee director&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">12,135</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">6,203</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">4,975</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Total shares awarded&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">60,675</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">43,421</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">34,825</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Average grant-date market price per share&#9;&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">4.12</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">8.06</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">10.06</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in">Total compensation cost attributable to shares awarded&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">250,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">350,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">350,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Compensation cost recognized related to current and prior year awards&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">266,667</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">316,750</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">333,499</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During the year ended December 31, 2014,
a director of the Company retired and forfeited 6,203 unvested shares. The amortized expense was adjusted for this forfeiture.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In addition to the service based compensation
awards discussed above, the Company also awarded performance-based awards. In 2013, the Company issued 100,000 shares of unvested
common stock to the Company&rsquo;s former CEO which were accelerated and distributed to him upon his separation in January 2015.
In 2014 and 2015, there were a total of 7,500 and 10,000 performance-based shares issued, respectively. In 2015, 13,750 of performance
based shares were forfeited. In order to recognize compensation expense for these performance based shares, the Company must assess,
at each reporting period, whether it is probable that the performance condition will be met. These shares must also be re-valued
at each reporting period until they vest. At December 31, 2015 and 2014, the Company assessed that it would not be probable that
the performance conditions would be met, as such; no expense was incurred during either year.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On January 1, 2015, the Company launched
a long- and short-term incentive program for certain employees.&nbsp;&nbsp;The short-term incentive plan is paid in cash if certain
short-term achievements are met and the long-term incentive plan is paid with the Company&rsquo;s stock if certain long-term achievements
are met.&nbsp;&nbsp;The stock-based awards are awarded based in two parts; 50% is based on completing a service period of three
years and 50% is based on the level of achievement of the Company&rsquo;s total shareholder return (&ldquo;TSR&rdquo;) compared
to the TSR of a designated peer group over a three-year period or a market based stock award.&nbsp;&nbsp;The service based awards
are recorded as usual; however, the market-based awards of 86,483 shares were valued using a Monte Carlo simulation and their expense
was included in the $1.2 million of total unvested and market-based awards discussed below. During the year ended December 31,
2015, 55,419 of these shares were forfeited and amortization expense was adjusted.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At December 31, 2015, total unrecognized
compensation cost related to unvested common and market-based stock was $3.1 million. This cost is expected to be recognized over
a weighted average period of 1.6 years. Compensation expense for unvested common stock (or restricted stock) and market-based grants
were $1.2 million in 2015, and $0.8 million in each of 2014 and 2013. There were no proceeds received by the Company from the exercise
of options in 2015 as there were no options outstanding in 2015, and in 2014 and 2013, the proceeds received were less than $0.1
million for each of these years.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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    <!-- Field: /Page -->

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company also awards common stock as
part of its incentive plan with no service or performance vesting requirements. There were 119,343 shares with a grant date fair
value of $0.5 million awarded in 2015 which was treated as compensation expense in 2015, no such shares were awarded in 2014 and
9,521 shares with a grant date fair value of $0.1 million were awarded in 2013 and recorded as compensation expense in 2013.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0in; margin: 6pt 0"><B><I>Stock Option Awards</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The following tables summarize the stock
option activity under the 2001 Plan and previously active plans:</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2001 Plan</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average Exercise Price</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt">Outstanding at December 31, 2013&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">7,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">3.10</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 10pt">Exercised&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,000</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3.10</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; padding-left: 10pt">Expired/forfeited&#9;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,500</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">3.10</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Outstanding at December 31, 2014&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">--</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">At December 31, 2014, there were no outstanding
options remaining and there was no unrecognized stock-based compensation expense related to stock options.</P>



<P STYLE="font-size: 10pt; text-align: justify; text-indent: -0.25in; margin: 5pt 0 2pt 0.25in"><B><I>Stock Offering</I></B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On April 29, 2014, an amended &ldquo;shelf&rdquo;
registration statement filed by the Company with the SEC became effective. Under the amended shelf registration statement, the
Company may offer from time to time any combination of securities described in the prospectus in one or more offerings up to a
total of $80 million. The securities described in the prospectus include common and preferred stock, depository shares, debt securities,
warrants entitling the holders to purchase one or more classes or series of these securities or units consisting of two or more
of these issuances, classes or series of securities. Net proceeds from the sales of the offered securities may be used for working
capital needs, capital expenditures and other expenditures related to general corporate purposes, including future acquisitions.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">On May 6, 2014, the Company closed a public
offering with D.A. Davidson &amp; Co. as sole underwriter (the &ldquo;Underwriter&rdquo;), pursuant to which the Underwriter purchased
from the Company 2,100,000 shares of the Company&rsquo;s common stock at a price of $6.90 per share. The net proceeds of $14.0
million from the offering, after deducting underwriting discounts and offering expenses, was used to repay a portion of the indebtedness
outstanding under our Prior Credit Facility.</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; font-weight: bold; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">15.</TD><TD>Employee Benefit Plans</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company maintains two defined contribution
profit-sharing plans (401(k) plans) covering substantially all non-union persons employed by the Company, whereby employees may
contribute a percentage of compensation, limited to maximum allowed amounts under the Internal Revenue Code. The Plans provide
for discretionary employer contributions, the level of which, if any, may vary by subsidiary and is determined annually by each
company&rsquo;s board of directors. The Company made aggregate matching contributions of $1.8 million, $1.3 million and $1.1 million
for the years ended December 31, 2015, 2014 and 2013, respectively.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt"></P>

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    <!-- Field: /Page -->

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company contributes to a number of
multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented
employees. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 13.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Assets contributed to the multiemployer plan by one employer may be used to provide benefits to
employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations
of the plan may be borne by the remaining participating employers.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font-size: 10pt; margin-top: 6pt; margin-bottom: 6pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 13.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">If the Company chooses to stop participating in some of its multiemployer plans, the Company may
be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-indent: 0.25in; margin: 5pt 0 2pt">The following table presents our participation in these plans
(amounts in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt">Pension Trust</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt">Pension Plan <BR> Employer <BR> Identification</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Pension Protection Act (&ldquo;PPA&rdquo;) Certified Zone Status<SUP>1</SUP></B></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt">FIP / RP Status Pending /</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Contributions</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt">Surcharge</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt">Expiration Date of Collective Bargaining</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fund</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Implemented<SUP>2</SUP></TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Imposed</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Agreement<SUP>3</SUP></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; font-size: 10pt; text-align: left; text-indent: 0in">Pension Trust Fund for Operating Engineers Pension Plan&#9;&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 5%; font-size: 10pt; text-align: center">94-6090764</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font-size: 10pt; text-align: right">Red</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font-size: 10pt; text-align: right">Red</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 5%; font-size: 10pt; text-align: center">Yes</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 3%; font-size: 10pt; text-align: right">2,151</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 3%; font-size: 10pt; text-align: right">1,757</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 3%; font-size: 10pt; text-align: right">1,654</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font-size: 10pt; text-align: right">No</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 5%; font-size: 10pt; text-align: center">Various</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Laborers Pension Trust for Northern California&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">94-6277608</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">Yellow</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">Yellow</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">Yes</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">966</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,447</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">897</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">No</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">Various</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Carpenter Funds Administrative Office&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">94-6050970</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">Red</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">Red</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">Yes</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">842</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,015</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">759</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">No</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">Various</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: 0in">Cement Mason Pension Trust Fund For Northern California&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">94-6277669</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">Yellow</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">Yellow</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">Yes</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">371</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">322</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">517</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">No</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">Various</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0in">All other funds</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">10,204</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">6,267</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,608</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 1pt">Various</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; padding-left: 20pt">Total Contributions:</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 2.25pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 2.25pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">14,533</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">10,808</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">6,435</TD><TD STYLE="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.25pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.25pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 2.25pt">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font-size: 10pt; text-indent: -4.5pt; margin: 0 0 0 0.25in">&nbsp;</P>



<P STYLE="font-size: 10pt; text-align: justify; text-indent: -4.5pt; margin: 0 0 0 9pt"><SUP>1</SUP>The most recent PPA zone status
available in 2015 and 2014 is for the plan&rsquo;s year-end during 2014 and 2013, respectively. The zone status is based on information
that we received from the plan and is certified by the plan&rsquo;s actuary. Among other factors, plans in the red zone are generally
less than 65 percent funded, plans in the orange zone are less than 80 percent funded and have an Accumulated Funding Deficiency
in the current year or projected into the next six years, plans in the yellow zone are less than 80 percent funded, and plans in
the green zone are at least 80 percent funded.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: -4.5pt; margin: 0 0 0 9pt"><SUP>2</SUP>Indicates whether the plan
has a financial improvement plan (&ldquo;FIP&rdquo;) or a rehabilitation plan (&ldquo;RP&rdquo;) which is either pending or has
been implemented.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: -4.5pt; margin: 0 0 0 9pt"><SUP>3</SUP>Lists the expiration date(s)
of the collective-bargaining agreement(s) to which the plans are subject.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: -4.3pt; margin: 0 0 0 8.6pt"><SUP>4</SUP>These funds include multiemployer
plans for pensions and other employee benefits. The total individually insignificant multiemployer pension costs contributed were
$1.5 million, $0.9 million and $0.6 million for 2015, 2014 and 2013, respectively, and are included in the contributions to all
other funds along with contributions to other types of benefit plans. Other employee benefits include certain coverage for medical,
prescription drug, dental, vision, life and accidental death and dismemberment, disability and other benefit costs.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">We currently have no intention of withdrawing
from any of the multi-employer pension plans in which we participate.</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">16.</TD><TD>Concentration of Risk and Enterprise Wide Disclosures</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The following table shows contract revenues
generated from the Company&rsquo;s customers that accounted for more than 10% of revenues (amounts in thousands):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="23" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; font-size: 10pt; text-align: left">Texas Department of Transportation (&ldquo;TXDOT&rdquo;)&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">84,129</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">13.5</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">*</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">*</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right"> *</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font-size: 10pt; text-align: right">*</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">California Department of Transportation (&ldquo;Caltrans&rdquo;)&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">96,470</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">15.5</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">97,637</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">14.5</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">92,159</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16.6</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>






<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt">*Represents less than 10% of revenues</FONT></P>


<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 6pt 0 2pt">At December 31, 2015, there were no customers
who owed the Company greater than 10% of contract receivables. At December 31, 2014, Foursquare Properties Inc. owed $8.5 million
and TXDOT owed $7.6 million to the Company, which were amounts greater than 10% of contract receivables.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s revenue and receivables
are entirely derived from the construction of U.S. projects and all of the Company&rsquo;s assets are held domestically within
the U.S.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">A portion of our labor force is subject
to collective bargaining agreements. Refer to Note 15 for further information regarding this concentration of risk.</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">17.</TD><TD>Related Party Transactions</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company has limited related party transactions.
The most material transactions relate to the Company&rsquo;s RLW subsidiary and its executive management who own or have an ownership
interest in certain real estate and other companies. RLW has historically performed construction contracts, leased properties,
or has provided professional and other services for entities owned by the executive managers of RLW. The total RLW related party
revenue related to construction contracts totaled $3.7 million, $0.5 million and $0.2 million in 2015, 2014 and 2013, respectively.
The total RLW related party billings for professional and other services, which include accounting, payroll, reimbursement for
computer and postage usage, provided by RLW was $0.9 million in 2013. RLW leases its main office and equipment maintenance shop
for its Utah operations for an annual cost of approximately $0.5 million. The office and shop leases expire in 2022. RLW had other
miscellaneous related party transactions which aggregated to $0.2 million, $0.1 million, and $0.2 million in 2015, 2014 and 2013,
respectively.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company had other individually immaterial
miscellaneous transactions with related parties that totaled $0.2 million in 2015 and $0.4 million during each year 2014 and 2013.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In August 2015, the Company completed
the sale, on a non-recourse basis, of its only long-term contract receivable pursuant to a factoring agreement with a related
party. The Company received approximately $7.1&nbsp;million upon the closing of this transaction and recorded a loss of approximately
$1.4 million in &ldquo;Other operating (expense) income, net.&rdquo; See Note 1 for more information regarding this sale.</P>



<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">In addition, in August 2015, the Company
completed the sale of a parcel of land located in Harris County, Texas to Joseph P. Harper, Sr., former President and Chief Operating
Officer of the Company. Proceeds received were approximately $2.4 million. See Note 7 for more information regarding this sale.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">An independent member of senior management
of the Company reviewed all related party sales and purchases before they were transacted.</P>


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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">18.</TD><TD>Quarterly Financial Information</TD></TR></TABLE>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 0 0 6pt">The following table summarizes the unaudited
quarterly results of operations for 2015 and 2014 (amounts in thousands, except per share data):</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015 Quarters Ended (unaudited)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">March 31</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">June 30</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">September 30</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">December 31</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 45%; font-size: 10pt">Revenues&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">117,682</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">177,425</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">176,000</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">152,488</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">623,595</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Gross profit&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(6,836</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,111</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">14,458</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,220</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">28,953</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">(Loss) income before income taxes and earnings attributable to noncontrolling interests&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(16,697</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(967</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,326</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(841</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(17,179</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Net (loss) income attributable to Sterling common stockholders&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(16,992</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(2,542</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">256</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,124</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(20,402</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Net (loss) income per share attributable to Sterling common stockholders:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: 0in; padding-left: 10pt">Basic&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(0.90</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(0.13</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">0.01</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(1.01</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(2.02</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: 0in; padding-left: 10pt">Diluted&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(0.90</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(0.13</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.01</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1.01</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(2.02</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="15" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014 Quarters Ended (unaudited)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">March 31</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">June 30</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; border-bottom: Black 1pt solid">September 30</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">December 31</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Total</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 45%; font-size: 10pt">Revenues&#9;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">134,538</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">194,806</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">189,275</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">153,611</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">672,230</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Gross profit&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7,869</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,499</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,356</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,697</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">32,421</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Income (loss) before income taxes and earnings attributable to noncontrolling interests&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">480</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,473</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,671</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,875</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,593</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Net income (loss) attributable to Sterling common stockholders&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">205</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,200</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(3,935</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,251</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(9,781</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 10pt; text-indent: -10pt">Net income (loss) per share attributable to Sterling common stockholders:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: 0in; padding-left: 10pt">Basic&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">0.01</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">0.07</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(0.21</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(0.39</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(0.54</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: 0in; padding-left: 10pt">Diluted&#9;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.01</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.07</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(0.21</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(0.39</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(0.54</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font-size: 10pt; text-indent: 0in; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company&rsquo;s operating revenues
tend to be somewhat higher in the summer months which are typically due to warmer and dryer weather conditions. Our second and
third quarter revenues and results of operations typically reflect these seasonal trends. However, from time to time, the Company&rsquo;s
operating results are significantly affected by certain transactions or events that management believes are not indicative or representative
of our results.</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">The Company recorded downward percent-complete
revisions to certain projects in the first quarter of 2015, largely related to construction projects in Texas, and there was unseasonably
more rainfall during second quarter of 2015, also in Texas, which caused declines in productivity and unanticipated delays during
this quarter.&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: justify; text-indent: 0.25in; margin: 5pt 0 2pt">During the third and fourth quarters of
2014, the Company recorded changes in estimated revenues and gross margin which resulted in net charges of $4.5 million and $9.5
million, respectively. Gross profit was depressed by downward revisions of gross profit on problem projects, the majority of which
are being constructed in Texas, primarily due to spot shortages of commodities, over-stretched sub-contractors and vendors, and
intense competition for craft labor.&nbsp;</P>

<P STYLE="font-size: 10pt; text-indent: -0.25in; margin: 0 0 0 0.25in"><B>&nbsp;</B></P>

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<P STYLE="font-size: 10pt; text-align: center; margin-top: 0; margin-bottom: 0"><img src="logo_sm.jpg"></P>

<P STYLE="font-size: 10pt; text-align: center; margin-top: 0; margin-bottom: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt; color: #282324">1800
Hughes Landing Blvd &middot;The Woodlands, Texas 77380 &bull; 281-214-0800</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt; color: #282324">www.strlco. com&nbsp;</P>

<P STYLE="font-size: 10pt; text-align: center; margin-top: 0; margin-bottom: 0"></P>

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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
