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Summary of Significant Accounting Policies | 12 Months Ended
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Dec. 31, 2019
Summary of Significant Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying consolidated financial statements have been prepared in compliance with generally accepted accounting principles in the United States (“GAAP”) as codified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). (b) Principles of Consolidation The consolidated financial statements include the accounts of Tutor Perini Corporation and its wholly owned subsidiaries (the “Company”). The Company occasionally forms joint ventures with unrelated third parties for the execution of single contracts or projects. The Company assesses its joint ventures to determine if they meet the qualifications of a variable interest entity (“VIE”) in accordance with ASC 810, Consolidation (“ASC 810”). If a joint venture is a VIE and the Company is the primary beneficiary, the joint venture is fully consolidated (See Note 14). If a joint venture is not a VIE, it may be consolidated under the voting interest method if the Company holds a controlling financial interest in the joint venture. The Company is considered to hold a controlling financial interest when it is able to exercise control over the joint venture’s operating and financial decisions. For construction joint ventures that do not need to be consolidated, the Company accounts for its interest in the joint ventures using the proportionate consolidation method, whereby the Company’s proportionate share of the joint ventures’ assets, liabilities, revenue and cost of operations are included in the appropriate classifications in the Company’s consolidated financial statements. Intercompany balances and transactions have been eliminated. (c) Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts. These estimates are based on information available through the date of the issuance of the financial statements; therefore, actual results could differ from those estimates. (d) Revenues Revenue Recognition The Company derives revenue from long-term construction contracts with public and private customers primarily in the United States and its territories and in certain other international locations. The Company’s construction contracts are generally each accounted for as a single unit of account (i.e., as a single performance obligation). Throughout the execution of construction contracts, the Company and its affiliated entities recognize revenue with the continuous transfer of control to the customer. The customer typically controls the asset under construction by either contractual termination clauses or by the Company’s rights to payment for work already performed on the asset under construction that does not have an alternative use for the Company. Because control transfers over time, revenue is recognized to the extent of progress towards completion of the performance obligations. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services provided. The Company generally uses the cost-to-cost method for its contracts, which measures progress towards completion for each performance obligation based on the ratio of costs incurred to date to the total estimated costs at completion for the respective performance obligation. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Revenue, including estimated fees or profits, is recorded proportionately as costs are incurred. Cost of operations includes labor, materials, subcontractor costs, and other direct and indirect costs, including depreciation and amortization. Due to the nature of the work required to be performed on many of the Company’s performance obligations, estimating total revenue and cost at completion is complex, subject to many variables and requires significant judgment. Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration, including the impact of change orders, claims, contract disputes and the achievement of contractual performance criteria, and award or other incentive fees are made during the contract performance period. The Company estimates variable consideration at the most likely amount it expects to receive. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to management. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of such cost is probable and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements described above for variable consideration have been satisfied. Changes in Estimates on Construction Contracts The Company’s estimates of contract revenue and cost are highly detailed and many factors change during a contract performance period that result in a change to contract profitability. These factors include, but are not limited to, differing site conditions; availability of skilled contract labor; performance of major material suppliers and subcontractors; on-going subcontractor negotiations and buyout provisions; unusual weather conditions; changes in the timing of scheduled work; change orders; accuracy of the original bid estimate; changes in estimated labor productivity and costs based on experience to date; achievement of incentive-based income targets; and the expected, or actual, resolution terms for claims. The factors that cause changes in estimates vary depending on the maturation of the project within its lifecycle. For example, in the ramp-up phase, these factors typically consist of revisions in anticipated project costs and during the peak and closeout phases, these factors include the impact of change orders and claims, as well as additional revisions in remaining anticipated project costs. Generally, if the contract is at an early stage of completion, the current period impact is smaller than if the same change in estimate is made to the contract at a later stage of completion. Management evaluates changes in estimates on a contract-by-contract basis and discloses significant changes, if material, in the Notes to Consolidated Financial Statements. The cumulative catch-up method is used to account for revisions in estimates. (e) Depreciation of Property and Equipment and Amortization of Long-Lived Intangible Assets Property and equipment and long-lived intangible assets are generally depreciated or amortized on a straight-line basis over their estimated useful lives ranging from three to forty years. (f) Recoverability of Long-Lived Assets Long-lived assets are reviewed for impairment whenever circumstances indicate that the future cash flows generated by the assets might be less than the assets’ net carrying value. In such circumstances, an impairment loss will be recognized by the amount the assets’ net carrying value exceeds their fair value. (g) Recoverability of Goodwill The Company tests goodwill for impairment annually as of October 1 for each reporting unit and between annual tests if events occur or circumstances change which suggest that goodwill should be reevaluated. Such events or circumstances include significant changes in legal factors and business climate, recent losses at a reporting unit, and industry trends, among other factors. The Civil, Building and Specialty Contractors segments each represent a reporting unit, and the Civil reporting unit carried the remaining goodwill balance at December 31, 2019 as a result of the $379.9 million impairment loss recognized in the second quarter of 2019. The Company performs its annual quantitative impairment assessment during the fourth quarter of each year using a weighted-average of an income and a market approach. The income approach is based on estimated present value of future cash flows for each reporting unit carrying a goodwill balance. The market approach is based on assumptions about how market data relates to each reporting unit carrying a goodwill balance. The weighting of these two approaches is based on their individual correlation to the economics of each reporting unit carrying a goodwill balance. The annual quantitative assessment performed in the fourth quarter of 2019 resulted in an estimated fair value that exceeded the net book value of the Civil reporting unit; therefore, no impairment charge was necessary. (h) Recoverability of Non-Amortizable Trade Names Certain trade names have an estimated indefinite life and are not amortized to earnings, but instead are reviewed for impairment annually, or more often if events occur or circumstances change which suggest that the non-amortizable trade names should be reevaluated. The Company performs its annual impairment assessment during the fourth quarter of each year and may assess its non-amortizable trade names for impairment initially using a qualitative approach to determine whether conditions exist to indicate that it is more likely than not that the fair value of a trade name is less than its carrying value. If the Company concludes, based on assessment of relevant events, facts and circumstances, that it is more likely than not that the trade name’s fair value is greater than its carrying value, no further impairment testing through a quantitative assessment is required. The qualitative assessment performed for the Company’s annual impairment assessment in the fourth quarter of 2019 concluded that it was more likely than not that the trade name’s fair value was greater than its carrying value, and therefore a quantitative analysis was not required. (i) Income Taxes Deferred income tax assets and liabilities are recognized for the effects of temporary differences between the financial statement carrying amounts and the income tax basis of assets and liabilities using tax rates expected to be in effect when such differences reverse. Income tax positions must meet a more-likely-than-not threshold to be recognized. The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. (j) Earnings Per Common Share (EPS) Basic EPS and diluted EPS are calculated by dividing net income attributable to Tutor Perini Corporation by the following: for basic EPS, the weighted-average number of common shares outstanding during the period; and for diluted EPS, the sum of the weighted-average number of both outstanding common shares and potentially dilutive securities, which for the Company can include restricted stock units, unexercised stock options and the Convertible Notes, as defined in Note 7. For the year ended December 31, 2019, all potentially dilutive securities were excluded from the calculation of diluted EPS as a result of the net loss for the period. In accordance with ASC 260, Earnings Per Share, the settlement of the principal amount of the Convertible Notes has had no impact on diluted EPS because the Company has had the intent and ability to settle the principal amount in cash. The Company calculates the effect of the potentially dilutive restricted stock units and stock options using the treasury stock method.
| Year Ended December 31,
(in thousands, except per common share data) | 2019 |  | 2018 |  | 2017
Net income (loss) attributable to Tutor Perini Corporation | $ | (387,690) |  | $ | 83,436 |  | $ | 148,382
Weighted-average common shares outstanding, basic |  | 50,220 |  |  | 49,952 |  |  | 49,647
Effect of dilutive restricted stock units and stock options |  | — |  |  | 349 |  |  | 1,112
Weighted-average common shares outstanding, diluted |  | 50,220 |  |  | 50,301 |  |  | 50,759
Net income (loss) attributable to Tutor Perini Corporation per common share: |  |  |  |  |  |  |  |
Basic | $ | (7.72) |  | $ | 1.67 |  | $ | 2.99
Diluted | $ | (7.72) |  | $ | 1.66 |  | $ | 2.92
Anti-dilutive securities not included above |  | 3,640 |  |  | 2,670 |  |  | 798
(k) Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the amounts shown in the Consolidated Statements of Cash Flows:
| As of December 31,
(in thousands) | 2019 |  | 2018
Cash and cash equivalents available for general corporate purposes | $ | 43,760 |  | $ | 51,749
Joint venture cash and cash equivalents |  | 149,925 |  |  | 64,326
Cash and cash equivalents |  | 193,685 |  |  | 116,075
Restricted cash |  | 8,416 |  |  | 3,788
Total cash, cash equivalents and restricted cash | $ | 202,101 |  | $ | 119,863
Cash equivalents include short-term, highly liquid investments with maturities of three months or less when acquired. Cash and cash equivalents, consist of amounts available for the Company’s general purposes, the Company’s proportionate share of cash held by the Company’s unconsolidated joint ventures and 100% of amounts held by the Company’s consolidated joint ventures. In both cases, cash held by joint ventures is available only for joint venture-related uses, including future distributions to joint venture partners. Amounts included in restricted cash are primarily held as collateral to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit. (l) Restricted Investments The Company has restricted investments primarily held as collateral to secure insurance-related contingent obligations, such as insurance claim deductibles, in lieu of letters of credit. Restricted investments are primarily comprised of investments in corporate debt securities and U.S. government agency securities that are rated A3 or better. (m) Share-Based Compensation The Company’s long-term incentive plans allow the Company to grant share-based compensation awards in a variety of forms, including restricted and unrestricted stock units and stock options. Restricted stock units and stock options generally vest subject to service and/or performance requirements, with related compensation expense equal to the fair value of the award on the date of grant and recognized on a straight-line basis over the requisite period. For share-based awards that have a service requirement, the Company accounts for forfeitures upon occurrence, rather than estimating the probability of forfeiture at the date of grant. Accordingly, the Company recognizes the full grant-date fair value of these awards on a straight-line basis throughout the requisite service period, reversing any expense if, and only if, there is a forfeiture. For share-based awards that have a performance-based vesting requirement, the Company evaluates the probability of achieving the performance criteria throughout the performance period, and will adjust share-based compensation expense if it estimates that the achievement of the performance criteria is not probable. Certain performance-based awards contain market condition components and are valued on the date of grant using a Monte Carlo simulation model. The fair value of such awards is expensed ratably over the performance period and is not adjusted for actual achievement. (n) Insurance Liabilities The Company typically utilizes third-party insurance coverage subject to varying deductible levels with aggregate caps on losses retained. The Company assumes the risk for the amount of the deductible portion of the losses and liabilities primarily associated with workers’ compensation and general liability coverage. In addition, on certain projects, the Company assumes the risk for the amount of the deductible portion of losses that arise from any subcontractor defaults. Losses are accrued based upon the Company’s estimates of the aggregate liability for claims incurred using historical experience and certain actuarial assumptions followed in the insurance industry. The estimate of insurance liability within the deductible limits includes an estimate of incurred but not reported claims based on data compiled from historical experience. (o) Other Comprehensive Income (Loss) ASC 220, Comprehensive Income, establishes standards for reporting comprehensive income and its components in the consolidated financial statements. The Company reports the change in pension benefit plan assets/liabilities, cumulative foreign currency translation, and change in fair value of investments as components of accumulated other comprehensive income (loss) (“AOCI”). The components of other comprehensive income (loss) and the related tax effects for the years ended December 31, 2019, 2018 and 2017 were as follows:
| Year Ended December 31,
| 2019 |  | 2018 |  | 2017
(in thousands) | Before-Tax Amount |  | Tax (Expense) Benefit |  | Net-of-Tax Amount |  | Before-Tax Amount |  | Tax (Expense) Benefit |  | Net-of-Tax Amount |  | Before-Tax Amount |  | Tax (Expense) Benefit |  | Net-of-Tax Amount
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Defined benefit pension plan adjustments | $ | 1,180 |  | $ | (336) |  | $ | 844 |  | $ | 1,079 |  | $ | (308) |  | $ | 771 |  | $ | 2,416 |  | $ | (992) |  | $ | 1,424
Foreign currency translation adjustment |  | 1,867 |  |  | (530) |  |  | 1,337 |  |  | (4,067) |  |  | 1,122 |  |  | (2,945) |  |  | 2,159 |  |  | (886) |  |  | 1,273
Unrealized gain (loss) in fair value of investments |  | 1,982 |  |  | (421) |  |  | 1,561 |  |  | (1,005) |  |  | 227 |  |  | (778) |  |  | (4) |  |  | 2 |  |  | (2)
Total other comprehensive income (loss) | $ | 5,029 |  | $ | (1,287) |  | $ | 3,742 |  | $ | (3,993) |  | $ | 1,041 |  | $ | (2,952) |  | $ | 4,571 |  | $ | (1,876) |  | $ | 2,695
Less: Other comprehensive income (loss) attributable to noncontrolling interests(a) |  | 393 |  |  | — |  |  | 393 |  |  | (221) |  |  | — |  |  | (221) |  |  | — |  |  | — |  |  | —
Total other comprehensive income (loss) attributable to Tutor Perini Corporation | $ | 4,636 |  | $ | (1,287) |  | $ | 3,349 |  | $ | (3,772) |  | $ | 1,041 |  | $ | (2,731) |  | $ | 4,571 |  | $ | (1,876) |  | $ | 2,695
_____________________________________________________________________________________________________________ (a)The only component of other comprehensive income (loss) attributable to noncontrolling interests is foreign currency translation. The changes in AOCI balances by component (after tax) attributable to Tutor Perini Corporation during the years ended December 31, 2019, 2018 and 2017 were as follows:
(in thousands) | Defined Benefit Pension Plan |  | Foreign Currency Translation |  | Unrealized Gain (Loss) in Fair Value of Investments |  | Accumulated Other Comprehensive Income (Loss)
Attributable to Tutor Perini Corporation: |  |  |  |  |  |  |  |  |  |  |
Balance as of December 31, 2016 | $ | (40,865) |  | $ | (4,864) |  | $ | 316 |  | $ | (45,413)
Other comprehensive income (loss) before reclassifications |  | 306 |  |  | 1,273 |  |  | (2) |  |  | 1,577
Amounts reclassified from AOCI |  | 1,118 |  |  | — |  |  | — |  |  | 1,118
Balance as of December 31, 2017 | $ | (39,441) |  | $ | (3,591) |  | $ | 314 |  | $ | (42,718)
Other comprehensive loss before reclassifications |  | (695) |  |  | (2,724) |  |  | (835) |  |  | (4,254)
Amounts reclassified from AOCI |  | 1,466 |  |  | — |  |  | 57 |  |  | 1,523
Balance as of December 31, 2018 | $ | (38,670) |  | $ | (6,315) |  | $ | (464) |  | $ | (45,449)
Other comprehensive income (loss) before reclassifications |  | (539) |  |  | 944 |  |  | 1,621 |  |  | 2,026
Amounts reclassified from AOCI |  | 1,383 |  |  | — |  |  | (60) |  |  | 1,323
Balance as of December 31, 2019 | $ | (37,826) |  | $ | (5,371) |  | $ | 1,097 |  | $ | (42,100)
(p) Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), as amended and supplemented by subsequent ASUs (collectively, “ASC 842”). ASC 842 amends the existing guidance in ASC 840, Leases. This ASU requires, among other things, the recognition of lease right-of-use (“ROU”) assets and lease liabilities by lessees for those leases currently classified as operating leases. ASC 842 allowed companies to adopt the new standard by applying either a modified retrospective method to the beginning of the earliest period presented in the financial statements or an optional transition method to initially apply the standard on January 1, 2019 and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the standard using the optional transition method. Under this method, financial results reported in periods prior to 2019 are unchanged. The Company elected the package of practical expedients which provides relief from having to reassess (1) whether any expired or existing contracts contain leases, (2) lease classification (as operating or financing) for any expired or existing leases, and (3) initial direct costs for any existing leases. The Company also elected to separate non-lease components from lease components. Based on the Company’s evaluation of ASC 842, the adoption on January 1, 2019 resulted in an increase of $43.3 million to its assets and liabilities on the Consolidated Balance Sheets with no impact to its results of operations or cash flows. The effects of the changes made to the Company’s January 1, 2019 consolidated balance sheet for the adoption of ASC 842 were as follows:
BALANCE SHEET | Balance as of |  | Adjustments due to |  | Balance as of
(in thousands) | December 31, 2018(a) |  | ASC 842 |  | January 1, 2019
ASSETS |  |  |  |  |  |  |  |
Other assets(b) | $ | 50,523 |  | $ | 43,273 |  | $ | 93,796
LIABILITIES |  |  |  |  |  |  |  |
Accrued expenses and other current liabilities(b) | $ | 174,325 |  | $ | 11,569 |  | $ | 185,894
Other long-term liabilities(b) |  | 151,639 |  |  | 31,704 |  |  | 183,343
_____________________________________________________________________________________________________________ (a)Balance as previously reported on the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. (b)Prior to the adoption of ASC 842, operating lease ROU assets and current and long-term operating lease liabilities were not recorded on the Consolidated Balance Sheets. The following table presents the impacts of adoption of the new leases standard on the Consolidated Balance Sheet:
|  | As of December 31, 2019
|  |  |  | Balance Without |  |
BALANCE SHEET |  |  |  | Adoption of |  | Effect of
(in thousands) |  | As Reported |  | ASC 842 |  | Change
ASSETS |  |  |  |  |  |  |  |  |
Other assets(a) |  | $ | 104,693 |  | $ | 64,598 |  | $ | 40,095
LIABILITIES |  |  |  |  |  |  |  |  |
Accrued expenses and other current liabilities(a) |  | $ | 206,533 |  | $ | 195,341 |  | $ | 11,192
Other long-term liabilities(a) |  |  | 199,288 |  |  | 170,373 |  |  | 28,915
_____________________________________________________________________________________________________________ (a)Prior to the adoption of ASC 842, operating lease ROU assets and current and long-term operating lease liabilities were not recorded on the Consolidated Balance Sheets. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), as amended by subsequent ASUs (collectively, “ASC 606”). The Company adopted this ASU effective January 1, 2018 using the modified retrospective transition method. As such, the 2017 comparative information has not been restated and continues to be reported under the accounting standards in effect for that period. New accounting pronouncements requiring implementation in future periods are discussed below. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, and issued subsequent amendments to the initial guidance within ASU 2019-04 and ASU 2019-05 (collectively, “ASU 2016-13”). The amendments in ASU 2016-13 replace the incurred loss impairment methodology in current practice with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate credit losses. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its financial position, results of operations or cash flows. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”), modifying ASC 740, Income Taxes (“ASC 740”). The amendments in ASU 2019-12, among other things, remove certain exceptions to the general principles in ASC 740 and seek more consistent application by clarifying and amending the existing guidance. ASU 2019-12 is effective for interim and annual reporting periods beginning after December 15, 2020. The Company is currently evaluating the new standard, which is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

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