The following discusses our financial position as of
Forward-Looking Statements
This Quarterly Report on Form 10-Q, including the "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements regarding future events and our future results, which are intended to be covered by the safe harbor provision for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are statements that could be deemed forward-looking statements. Words such as "achieve," "anticipate," "assumes," "believes," "continue," "could," "estimate," "expects," "forecast," "hope," "intend," "may," "plan," "potential," "predict," "should," "will," "would," variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Although such statements are based on currently available financial and economic data as well as management's estimates and expectations, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors potentially contributing to such differences include, among others:
?The impact of the COVID-19 pandemic and related events that are beyond our control, including possible effects on our business and operations, customers and suppliers, and employees, contractors and subcontractors, which could affect adversely our projects and the geographic regions in which we conduct business;
?A significant slowdown or decline in economic conditions;
?Revisions of estimates of contract risks, revenue or costs; the timing of new awards; or the pace of project execution may result in losses or lower than anticipated profit;
?Unfavorable outcomes of existing or future litigation or dispute resolution proceedings against customers (project owners, developers, general contractors, etc.), subcontractors or suppliers, as well as failure to promptly recover significant working capital invested in projects subject to such matters;
?The requirement to perform extra, or change order, work resulting in disputes or claims or adversely affecting our working capital, profits and cash flows;
?Risks and other uncertainties associated with assumptions and estimates used to prepare financial statements;
?Inability to retain key members of our management, to hire and retain personnel required to complete projects or implement succession plans for key officers;
?Client cancellations of, or reductions in scope under, contracts reported in our backlog;
?Failure to meet contractual schedule requirements, which could result in higher costs and reduced profits or, in some cases, exposure to financial liability for liquidated damages and/or damages to customers;
?Failure to meet our obligations under our debt agreements;
?Decreases in the level of government spending for infrastructure and other public projects;
?Downgrades in our credit ratings;
?Failure of our joint venture partners to perform their venture obligations, which could impose additional financial and performance obligations on us, resulting in reduced profits or losses;
?Increased competition and failure to secure new contracts;
?Impairment of our goodwill or other indefinite-lived intangible assets;
?Economic, political and other risks, including civil unrest, security issues, labor conditions, corruption and other unforeseeable events in countries where we do business, resulting in unanticipated losses;
?Possible systems and information technology interruptions, including due to cyberattack, systems failures or other similar events;
?The impact of inclement weather conditions on projects;
?Failure to comply with laws and regulations related to government contracts;
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?Potential dilutive impact of our Convertible Notes in our diluted earnings per share calculation;
?Uncertainty from the expected discontinuance of the London Interbank Offered Rate and transition to any other interest rate benchmark; and
?Conversion of our outstanding Convertible Notes that could dilute ownership interests of existing stockholders and could adversely affect the market price of our common stock.
Executive Overview COVID-19 Update
In the first quarter of 2020, the outbreak of a novel strain of coronavirus,
COVID-19, was declared a pandemic. Efforts in
For the three and six months ended
Due to the fluidity of the COVID-19 pandemic, uncertainties as to its scope and duration, and ongoing changes in the way that governments, businesses and individuals react and respond to the pandemic, the Company is unable at this time to accurately predict the pandemic's future impact on the Company's business, results of operations, financial condition or liquidity. Among other things, governments could prohibit the continuation of certain projects that to date have been designated as "essential" or could impose health, safety and other operational requirements on such projects that could result in delays to or suspensions of such projects. In addition, employees and contractors working on such projects could be unable or unwilling to continue working on them, perhaps for extended periods. The COVID-19 pandemic also could negatively affect the ability of counterparties or joint venture partners to make required payments on a timely basis or at all.
Operating Results
Despite the impacts from the COVID-19 pandemic described above, consolidated
revenue for the three and six months ended
Income from construction operations for the three and six months ended
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The provision for income taxes was
Diluted earnings per common share for the three and six months ended
Consolidated new awards for the three and six months ended
Consolidated backlog as of
The following table presents the Company's backlog by business segment,
reflecting changes from
Backlog at New Revenue Backlog at (in millions) December 31, 2019 Awards(a) Recognized June 30, 2020(b) Civil $ 6,037.2$ 555.3 $ (1,055.6) $ 5,536.9 Building 2,790.3 443.0 (954.8) 2,278.5 Specialty Contractors 2,393.6 306.4 (516.8) 2,183.2 Total $ 11,221.1$ 1,304.7 $ (2,527.2) $ 9,998.6
(a)New awards consist of the original contract price of projects added to backlog plus or minus subsequent changes to the estimated total contract price of existing contracts.
(b)Backlog may differ from the transaction prices allocated to the remaining performance obligations as disclosed in Note 3 of the Notes to Condensed Consolidated Financial Statements. Such differences relate to the timing of executing a formal contract or receiving a notice to proceed. More specifically, backlog sometimes may include awards for which a contract has not yet been executed or a notice to proceed has not been issued, but for which there are no remaining major uncertainties that the project will proceed (e.g., adequate funding is in place).
Because the COVID-19 pandemic remains fluid and uncertain, the Company cannot
assess the degree to which it might experience future adverse impacts. The
general outlook for the Company's growth over the next several years remains
favorable, particularly in the Civil and Specialty Contractors segments, but the
impact of the COVID-19 pandemic could adversely affect future performance and
operations. In addition, the Company's growth could be impacted by project
delays or the timing of project commencements, ramp-up activities and
completions. We anticipate that we will continue to win our share of significant
new awards resulting from long-term capital spending plans by state, local and
federal customers, as well as bipartisan support for infrastructure investments
and limited competition for some of the largest project opportunities. In recent
elections, voters in numerous states approved dozens of long-term transportation
funding measures totaling approximately
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toward assisting state and local governments or specifically targeting
significant investments in infrastructure have been discussed as possible
additional pieces of the federal government's ongoing response to the COVID-19
pandemic. Such additional federal financial assistance or stimulus programs
could favorably impact the Company's current work and prospective opportunities,
though the timing and magnitude of such additional federal government actions,
if any, remain uncertain. Meanwhile, several large, long-duration civil
infrastructure programs with which we are already involved continue to progress.
Finally, the COVID-19 pandemic's dramatic impact on the
For a more detailed discussion of operating performance of each business segment, corporate general and administrative expenses and other items, see Results of Segment Operations, Corporate, Tax and Other Matters and Liquidity and Capital Resources below.
Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial statements
presented under generally accepted accounting principles in
These non-GAAP financial measures, which exclude the non-cash goodwill
impairment charge incurred in the second quarter of 2019 (as well as the tax
benefit associated with that charge), include adjusted income (loss) from
construction operations, adjusted net income attributable to
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