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Summary of Significant Accounting Policies | 12 Months Ended
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Dec. 31, 2020
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | 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”). Certain amounts in the notes to the consolidated financial statements of prior years have been reclassified to conform to the current year presentation. (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 13). 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, 2020 as a result of the $379.9 million impairment loss recognized in 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. These approaches utilize various valuation assumptions, and small changes to the assumptions could have a significant impact on the concluded fair value. 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 2020 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 quantitative impairment assessment during the fourth quarter of each year using an income approach (relief from royalty method). The assessment performed in the fourth quarter of 2020 resulted in an estimated fair value for the non-amortizable trade names that exceeded their respective net book values; therefore, no impairment charge was necessary. (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. In accordance with ASC 260, Earnings Per Share, the settlement of the principal amount of the Convertible Notes has no impact on diluted EPS because the Company has the intent and ability to settle the principal amount in cash. See Note 7 for further discussion of the Convertible Notes. 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) | 2020 | 2019 | 2018
Net income (loss) attributable to Tutor Perini Corporation | $ | 108,394 |  | $ | (387,690) |  | $ | 83,436 |
Weighted-average common shares outstanding, basic | 50,656 |  | 50,220 |  | 49,952 |
Effect of dilutive restricted stock units and stock options | 421 |  | — |  | 349 |
Weighted-average common shares outstanding, diluted | 51,077 |  | 50,220 |  | 50,301 |
Net income (loss) attributable to Tutor Perini Corporation per common share: |  |  |
Basic | $ | 2.14 |  | $ | (7.72) |  | $ | 1.67 |
Diluted | $ | 2.12 |  | $ | (7.72) |  | $ | 1.66 |
Anti-dilutive securities not included above | 1,862 |  | 3,640 |  | 2,670 |
For the year ended December 31, 2019, all outstanding restricted stock units and stock options were excluded from the calculation of weighted-average diluted shares outstanding due to the net loss for the period. (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) | 2020 | 2019
Cash and cash equivalents available for general corporate purposes | $ | 210,841 |  | $ | 43,760 |
Joint venture cash and cash equivalents | 163,448 |  | 149,925 |
Cash and cash equivalents | 374,289 |  | 193,685 |
Restricted cash | 77,563 |  | 8,416 |
Total cash, cash equivalents and restricted cash | $ | 451,852 |  | $ | 202,101 |
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. As of December 31, 2020, restricted cash consists primarily of $69.9 million held to repay the outstanding principal balance of Convertible Notes described in more detail in Note 7. Restricted cash also includes amounts 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 U.S. government agency securities and corporate debt securities that are rated A 3 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. The Company may grant awards that require liability classification and are remeasured at fair value at the end of each reporting period with the change in fair value recognized as compensation cost. 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, 2020, 2019 and 2018 were as follows:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
(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 | $ | (8,700) |  | $ | 2,439 |  | $ | (6,261) |  |  | $ | 1,180 |  | $ | (336) |  | $ | 844 |  |  | $ | 1,079 |  | $ | (308) |  | $ | 771 |
Foreign currency translation adjustment | 178 |  | 101 |  | 279 |  |  | 1,867 |  | (530) |  | 1,337 |  |  | (4,067) |  | 1,122 |  | (2,945) |
Unrealized gain (loss) in fair value of investments | 2,015 |  | (444) |  | 1,571 |  |  | 1,982 |  | (421) |  | 1,561 |  |  | (1,005) |  | 227 |  | (778) |
Total other comprehensive income (loss) | $ | (6,507) |  | $ | 2,096 |  | $ | (4,411) |  |  | $ | 5,029 |  | $ | (1,287) |  | $ | 3,742 |  |  | $ | (3,993) |  | $ | 1,041 |  | $ | (2,952) |
Less: Other comprehensive income (loss) attributable to noncontrolling interests(a) | 230 |  | — |  | 230 |  |  | 393 |  | — |  | 393 |  |  | (221) |  | — |  | (221) |
Total other comprehensive income (loss) attributable to Tutor Perini Corporation | $ | (6,737) |  | $ | 2,096 |  | $ | (4,641) |  |  | $ | 4,636 |  | $ | (1,287) |  | $ | 3,349 |  |  | $ | (3,772) |  | $ | 1,041 |  | $ | (2,731) |
________________________________________________________________________________________ (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, 2020, 2019 and 2018 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, 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) |
Other comprehensive income (loss) before reclassifications | (7,993) |  | 49 |  | 1,820 |  | (6,124) |
Amounts reclassified from AOCI | 1,732 |  | — |  | (249) |  | 1,483 |
Balance as of December 31, 2020 | $ | (44,087) |  | $ | (5,322) |  | $ | 2,668 |  | $ | (46,741) |
The significant items reclassified out of AOCI and the corresponding location and impact on the Consolidated Statements of Operations during the years ended December 31, 2020, 2019 and 2018 are as follows:
| Location in Consolidated | Year Ended December 31,
(in thousands) | Statements of Operations | 2020 | 2019 | 2018
Component of AOCI: |  |  |  |
Defined benefit pension plan adjustments | Other income (expense) | $ | 2,407 |  | $ | 1,933 |  | $ | 2,052 |
Income tax benefit | Income tax expense (benefit) | (675) |  | (550) |  | (586) |
Net of tax |  | $ | 1,732 |  | $ | 1,383 |  | $ | 1,466 |
Unrealized (gain) loss in fair value of investment adjustments | Other income (expense) | $ | (315) |  | $ | (76) |  | $ | 72 |
Income tax expense (benefit) | Income tax expense (benefit) | 66 |  | 16 |  | (15) |
Net of tax |  | $ | (249) |  | $ | (60) |  | $ | 57 |
(p) Recent Accounting Pronouncements In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide temporary optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions to ease the potential accounting and financial reporting burden associated with transitioning away from reference rates that are expected to be discontinued, including the London Interbank Offered Rate (“LIBOR”). ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022. The adoption of the new standard has not had and is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. 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 with the current expected credit loss model, which requires consideration of a broader range of reasonable and supportable information to estimate credit losses. The Company adopted this ASU effective January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), as amended and supplemented by subsequent ASUs (collectively, “ASC 842”). The Company adopted this ASU effective January 1, 2019 using the optional transition method. Under this method, financial results reported in periods prior to 2019 are unchanged. As such, the 2018 comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The following recent accounting pronouncements require implementation in future periods. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The amendments in ASU 2020-06 simplify accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted EPS and the treasury stock method will no longer be available. ASU 2020-06 is effective for interim and annual reporting periods beginning after December 15, 2021, with early adoption permitted. The Company does not expect to early adopt the new standard and does not expect it to have an impact on the Company's 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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