UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-6314 Perini Corporation (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-1717070 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 73 MT. WAYTE AVENUE, FRAMINGHAM, MASSACHUSETTS 01701-9160 (Address of principal executive offices) (Zip code) (508)-628-2000 (Registrant's telephone number, including area code) NONE (Former name, former address and former fiscal year, if changed since last report) 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. Yes X No Number of shares of common stock of registrant outstanding at May 11, 1999: 5,680,485 Page 1 of 17
<TABLE> <CAPTION> PERINI CORPORATION & SUBSIDIARIES INDEX Page Number ----------- <S> <C> Part I. - Financial Information: Item 1. Financial Statements Consolidated Condensed Balance Sheets - 3 March 31, 1999 and December 31, 1998 Consolidated Condensed Statements of Income - 4 Three Months ended March 31, 1999 and 1998 Consolidated Condensed Statements of Cash Flows - 5 Three Months ended March 31, 1999 and 1998 Notes to Consolidated Condensed Financial Statements 6 - 7 Item 2. Management's Discussion and Analysis of the Consolidated 8 - 11 Financial Condition and Results of Operations Part II. - Other Information: Item 1. Legal Proceedings 12 Item 2. Changes in Securities 12 Item 3. Defaults Upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 - 16 Signatures 17 </TABLE> 2
<TABLE> <CAPTION> PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) MARCH 31, 1999 AND DECEMBER 31, 1998 (In Thousands) ASSETS MARCH 31, DEC. 31, 1999 1998 -------------- ------------- <S> <C> <C> Cash $ 22,611 $ 46,507 Accounts and Notes Receivable 138,308 113,855 Unbilled Work 20,115 19,585 Construction Joint Ventures 71,695 67,100 Real Estate Inventory, at the lower of cost or market 10,837 10,069 Deferred Tax Assets 1,076 1,076 Other Current Assets 3,752 1,332 -------------- ------------- Total Current Assets $ 268,394 $ 259,524 -------------- ------------- Land Held for Sale or Development $ 13,530 $ 15,541 Investments in and Advances to Real Estate Joint Ventures 89,641 89,499 -------------- ------------- Total Real Estate Development Investments $ 103,171 $ 105,040 -------------- ------------- Other Assets $ 4,194 $ 4,169 -------------- ------------- Property and Equipment, less Accumulated Depreciation of $16,678 in 1999 and $16,378 in 1998 $ 9,872 $ 9,858 -------------- ------------- $ 385,631 $ 378,591 ============== ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current Maturities of Long-Term Debt $ 15,153 $ 2,956 Accounts Payable 115,916 127,774 Advances from Construction Joint Ventures 13,344 17,300 Deferred Contract Revenue 17,570 14,350 Accrued Expenses 37,761 39,479 -------------- ------------- Total Current Liabilities $ 199,744 $ 201,859 -------------- ------------- Deferred Income Taxes and Other Liabilities $ 17,124 $ 15,713 -------------- ------------- Long-Term Debt, less current maturities included above $ 80,292 $ 75,857 -------------- ------------- Minority Interest $ 1,064 $ 1,064 -------------- ------------- Redeemable Convertible Series B Preferred Stock $ 34,542 $ 33,540 -------------- ------------- Stockholder's Equity: Preferred Stock $ 100 $ 100 Series A Junior Participating Preferred Stock --- --- Stock Purchase Warrants 2,233 2,233 Common Stock 5,506 5,506 Paid-In Surplus 47,357 49,219 Retained Earnings (1,218) (3,642) ESOT Related Obligations (120) (1,381) -------------- ------------- $ 53,858 $ 52,035 Less - Treasury Stock 993 1,477 -------------- ------------- Total Stockholders' Equity $ 52,865 $ 50,558 -------------- ------------- $ 385,631 $ 378,591 ============== ============= </TABLE> The accompanying notes are an integral part of these financial statements. 3
<TABLE> <CAPTION> PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) (In Thousands, Except Per Share Data) THREE MONTHS ENDED MARCH 31, 1999 1998 --------------- ---------------- <S> <C> <C> REVENUES FROM OPERATIONS (Note 6): Construction $ 251,819 $ 219,202 Real Estate 4,732 10,180 --------------- ---------------- TOTAL REVENUES FROM OPERATIONS $ 256,551 $ 229,382 --------------- ---------------- COST AND EXPENSES: Cost of Operations $ 245,551 $ 216,914 General, Administrative and Selling Expenses 6,375 6,944 --------------- ---------------- $ 251,926 $ 223,858 --------------- ---------------- INCOME FROM OPERATIONS (Note 6) $ 4,625 $ 5,524 Other Income (Expense), Net (408) (333) Interest Expense (1,593) (2,782) --------------- ---------------- Income before Income Taxes $ 2,624 $ 2,409 Provision for Income Taxes (Note 3) 200 190 --------------- ---------------- NET INCOME $ 2,424 $ 2,219 =============== ================ BASIC AND DILUTED EARNINGS PER COMMON SHARE (Note 4) $ 0.16 $ 0.15 =============== ================ DIVIDENDS PER COMMON SHARE (Note 5) $ --- $ --- =============== ================ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 4) 5,436,419 5,161,394 =============== ================ </TABLE> The accompanying notes are an integral part of these financial statements. 4
<TABLE> <CAPTION> PERINI CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (In Thousands) THREE MONTHS ENDED MARCH 31, 1999 1998 ------------- ------------ <S> <C> <C> Cash Flows from Operating Activities: Net Income $ 2,424 $ 2,219 Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization 764 548 Noncurrent deferred taxes and other liabilities 1,411 398 Distributions greater (less) than earnings of joint ventures and affiliates 1,867 (1,522) Cash provided from (used by) changes in components of working capital other than cash and current maturities of long-term debt (42,196) (18,015) Real estate development investments other than joint ventures 1,115 6,133 Other non-cash items, net --- (891) ------------- ------------ NET CASH USED BY OPERATING ACTIVITIES $ (34,615) $ (11,130) ------------- ------------ Cash Flows from Investing Activities: Proceeds from sale of property and equipment $ 36 $ 221 Cash distributions of capital from unconsolidated joint ventures 450 2,700 Acquisition of property and equipment (429) (227) Improvements to land held for sale or development (3) (126) Capital contributions to unconsolidated joint ventures (7,180) (747) Advances (to) from real estate joint ventures, net 75 (1,500) Investments in other activities (223) 179 ------------- ------------ NET CASH PROVIDED FROM (USED BY) INVESTING ACTIVITIES $ (7,274) $ 500 ------------- ------------ Cash Flows from Financing Activities: Proceeds of long-term debt $ 17,838 $ 3,162 Repayment of long-term debt --- (5,108) Treasury Stock issued 155 151 ------------- ------------ NET CASH PROVIDED FROM (USED BY) FINANCING ACTIVITIES $ 17,993 $ (1,795) ------------- ------------ Net Increase (Decrease) in Cash $ (23,896) $ (12,425) Cash at Beginning of Year 46,507 31,305 ------------- ------------ Cash at End of Period $ 22,611 $ 18,880 ============= ============ Supplemental Disclosures of Cash paid during the period for: Interest $ 1,945 $ 2,288 ============= ============ Income tax payments $ 47 $ 167 ============= ============ Supplemental Disclosures of Non-cash Transactions: Dividends paid in shares of Series B Preferred Stock (Note 4) $ 907 $ 822 ============= ============ </TABLE> The accompanying notes are an integral part of these financial statements. 5
PERINI CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (1) Basis of Presentation The unaudited consolidated condensed financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included in the Company's Form 10-K for the year ended December 31, 1998. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company's financial position as of March 31, 1999 and results of operations and cash flows for the three month periods ended March 31, 1999 and 1998. The results of operations for the three month period ended March 31, 1999 may not be indicative of the results that may be expected for the year ending December 31, 1999 because the Company's results generally consist of a limited number of large transactions in both construction and real estate. Therefore, such results can vary depending on the timing of transactions and the profitability of projects being reported. (2) Significant Accounting Policies The significant accounting policies followed by the Company and its subsidiaries in preparing its consolidated financial statements are set forth in Note (1) to such financial statements included in Form 10-K for the year ended December 31, 1998. The Company has made no significant change in these policies during 1999. (3) Provision For Income Taxes The lower-than-normal tax rate in 1999 and 1998 reflects the realization of a portion of the tax benefit not recognized in prior years due to certain accounting limitations. (4) Per Share Data Computations of basic and diluted earnings per common share amounts are based on the weighted average number of the Company's common shares outstanding during the periods presented. Earnings available for common shares are calculated as follows (in thousands, except per share amounts): <TABLE> 1999 1998 --------------- ---------------- <S> <C> <C> Net Income $ 2,424 $ 2,219 --------------- ---------------- Less: - Accrued dividends on $21.25 Senior Preferred Stock $ (531) $ (531) - Dividends declared on Series B Preferred Stock (907) (822) - Accretion deduction required to reinstate mandatory redemption value of Series B Preferred Stock over a period of 8-10 years (95) (91) --------------- ---------------- $ (1,533) $ (1,444) =============== ================ Earnings available for Common Stockholders $ 891 $ 775 =============== ================ Weighted average shares outstanding 5,436 5,161 --------------- ---------------- Basic and diluted earnings per Common Share $ 0.16 $ 0.15 =============== ================ </TABLE> 6
PERINI CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) (4) Per Share Data (continued) Basic EPS equals diluted EPS for the periods presented due to the immaterial effect of stock options and the antidilutive effect of conversion of the Company's Senior Preferred Stock, Series B Preferred Stock and Stock Purchase Warrants into common stock. (5) Dividends There were no cash dividends on common stock declared or paid during the periods presented in the consolidated condensed financial statements presented herein. As previously disclosed, in conjunction with the covenants of the Company's Amended Revolving Credit Agreement as well as the New Credit Agreement, effective January 17, 1997, the Company is required to suspend the payment of quarterly dividends on its $21.25 preferred stock ("Senior Preferred Stock") until certain financial criteria are met. Therefore, the dividends on the Senior Preferred Stock have not been declared since 1995 (although they have been fully accrued due to the "cumulative" feature of the Senior Preferred Stock). The aggregate amount of dividends in arrears is approximately $7,437,000 at March 31, 1999 which represents approximately $74.37 per share of Preferred Stock or approximately $7.44 per Depositary Share and is included in "Other Liabilities" (long-term) in the accompanying Consolidated Condensed Balance Sheet. Under the terms of the Preferred Stock, the holders of the Depositary Shares were entitled to elect two additional Directors since dividends had been deferred for more than six quarters and they did so at the May 14, 1998 Annual Meeting. Quarterly In-kind dividends (based on an annual rate of 10%) were paid on March 15, 1999 on the Series B Preferred Stock to the stockholders of record on March 1, 1999. The dividend was paid in the form of approximately 4,534 additional shares of Series B Preferred Stock valued at $200.00 per share for a total of $906,783. (6) Business Segments The following tables set forth certain updated business segment information relating to the Company's operations for the three months ended March 31, 1999 and 1998 (in thousands): <TABLE> 1999: Reportable Segments ---------------------------------------------------- Real Consolidated Building Civil Estate Totals Corporate Totals ---------- --------- --------- ------------ ----------- ------------ <S> <C> <C> <C> <C> <C> <C> Revenues $182,965 $ 68,854 $ 4,732 $256,551 $ - $256,551 Income (Loss) from Ops. $ 4,622 $ 1,971 $ (272) $ 6,321 $ (1,696)* $ 4,625 Assets $140,082 $104,885 $115,293 $360,260 $ 25,371 $385,631 1998: Reportable Segments ---------------------------------------------------- Real Consolidated Building Civil Estate Totals Corporate Totals ---------- --------- ---------- ---------- ----------- ------------ Revenues $156,160 $ 63,042 $ 10,180 $229,382 $ - $229,382 Income (Loss) from Ops. $ 4,760 $ 2,825 $ (262) $ 7,323 $ (1,799)* $ 5,524 Assets $148,006 $108,971 $114,597 $371,574 $ 21,770 $393,344 </TABLE> * In all periods, consists of corporate general and administrative expenses. 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS Results of Operations - --------------------- Comparison of the First Quarter of 1999 with the First Quarter of 1998 Revenues increased $27.2 million (or 11.9%), from $229.4 in 1998 to $256.6 million in 1999. This increase resulted from increased construction revenues of $32.7 million (or 14.9%), from $219.2 million in 1998 to $251.9 million in 1999, due primarily to an increase in building construction operations of $26.8 million or (17.2%), from $156.2 million in 1998 to $183.0 million in 1999, and to a lesser degree, an increase in revenues from civil operations of $5.9 million (or 9.4%), from $63.0 million in 1998 to $68.9 million in 1999. Increased building construction revenues were due primarily to the start-up of several new fast-track hotel/casino projects by the Company's western building operations which was partially offset by a decrease in revenues from correctional facilities projects in the Northeast that have been completed. Increased civil construction revenues were due primarily to the favorable impact of several large infrastructure projects in the Northeast. The decline of real estate revenues of $5.5 million, from $10.2 million in 1998 to $4.7 million in 1999 is due to non-recurring revenues related to the 1998 sale of two buildings in Massachusetts. In spite of the increase in total revenues described above, income from operations of the Company's business segments decreased by $1.0 million, from $7.3 million in 1998 to $6.3 million in 1999 - see Note 6. The decrease was primarily due to a $0.8 million decrease in operating income from civil operations, from $2.8 million in 1998 to $2.0 million in 1999, that resulted from a lower average margin on the civil construction backlog going into 1999. Although revenues from building construction operations increased by over 17% during the quarter, income from operations decreased slightly to $4.6 million in 1999 from $4.8 million in 1998 because of the favorable close out of certain contracts during the first quarter of 1998. The operating loss from real estate remained constant at approximately $0.3 million during both periods. Interest expense decreased by $1.2 million, from $2.8 million in 1998 to $1.6 million in 1999 due primarily to a reduction in the average amount borrowed under the Company's Revolving Credit Agreement. The lower than normal tax rate in 1999 and 1998 is due to the utilization of tax loss carryforwards from prior years. Because of certain accounting limitations, the Company was not able to recognize a portion of the tax benefit related to the operating losses experienced in fiscal 1996 and 1995. Financial Condition - ------------------- Working capital increased $11.0 million, from $57.7 million at the end of 1998 to $68.7 million at March 31, 1999. The current ratio increased from 1.29:1 to 1.34:1 during this same period. During the first three months of 1999, the Company used $23.9 million in cash and $18.0 million of additional borrowings under the Company's Revolving Credit Agreement to fund $34.6 million used by operating activities, primarily for changes in working capital, and $7.3 million for investing activities, primarily to fund construction joint ventures. Long-term debt at March 31, 1999 was $80.3 million, an increase of $4.4 million from December 31, 1998. The long-term debt to equity ratio at March 31, 1999 of 1.52 to 1 approximated the 1.50 to 1 at December 31, 1998. Effective March 23, 1999, the Company finalized certain changes to its Revolving Credit Agreement with its Bank Group, including extending the Revolving Credit Agreement from January 3, 2000 to January 3, 2001. Other changes to the Revolving Credit Agreement include, among other things, a scheduled 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) mandatory reduction in the maximum commitment of $20.0 million in 1999 and $15.0 million in 2000, with the balance in 2001, additional permanent mandatory reductions, as defined, from the net proceeds from real estate sales, an interest rate increase of 1/2 of 1% in 1999 and an additional 1/4 of 1% increase in 2000, and a one-time bank fee of $483,000. At March 31, 1999, the Company had $7.3 million available to borrow under its $96.0 million Revolving Credit Agreement. Management believes that cash generated from operations, existing credit lines and additional borrowings should be adequate to meet the Company's funding requirements for at least the next twelve months. Outlook - ------- o General - The statements contained in this Outlook that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the Company's expectations, hopes, beliefs, intentions or strategies regarding the future. All forward-looking statements included in this Outlook are based on information available to the Company on the date hereof. It is important to note that the Company's actual results could differ materially from those in such forward-looking statements, whether as a result of new information, future events or otherwise. o Operations - Looking ahead, we must consider the Company's construction backlog and remaining portfolio of real estate projects. The overall construction backlog at March 31, 1999 was at $1.029 billion, a 16.5% decrease from the backlog at December 31, 1998, which primarily reflects the timing in finalizing certain construction contracts currently under negotiations. Project awards with a combined value in excess of $700 million are currently pending, including the previously announced construction management services contract for the $650 million Mohegan Sun Phase II Expansion Project in Uncasville, CT. While approximately 40% of the current backlog relates to building construction projects which generally represent lower risk, lower margin work, approximately 60% of the current backlog relates to heavy construction projects which generally represent higher risk, but correspondingly higher margin work. Since several of the remaining real estate projects have been written down to net realizable value in the past, future gross profit from real estate sales will be minimal. o Rincon Center - As previously reported in Note 11 of the December 31, 1998 Consolidated Financial Statements included in the Company's 1998 Form 10-K, the Company's Real Estate subsidiary, Perini Land and Development Company ("PL&D"), the managing general partner of Rincon Center Associates ("RCA"), has reached a nonbinding agreement with the lenders and lessor in Rincon Center, a mixed-use property in San Francisco, subject to final documentation and final approval of several parties, with regard to restructuring certain financial obligations and ownership interests. While the process of completing further documentation and obtaining final approval by the various parties involved is ongoing, the Company has received the appropriate waivers or assurances to date that (i) the Lessor on Rincon I will continue to defer enforcement of the purchase requirement provisions under the Master Lease, and (ii) while the $33 million loan to the Lessor on Rincon I has matured and the $14 million loan on Rincon II has matured, the lenders have deferred enforcement of any remedies pending completion of the restructuring agreement. It continues to be the opinion of management that the final documentation of these negotiations and restructure of certain financial obligations will not have a material impact on the results of operations or financial condition as reported in the financial statements included in this Form 10-Q. 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) - On September 10, 1998 the Company through Spear Land LLC ("Spear"), a newly formed affiliated company, entered into an agreement with the U.S. Postal Service to acquire the land, including certain ground leases ("the land") under Rincon Center, subject to the Company obtaining the necessary financing and approvals. Effective March 30, 1999, Spear assigned the agreement to an affiliate of the Blackstone Group ("Blackstone") that purchased the land on that date. Although Spear has no rights with respect to the management or operations related to the land, Spear does have a residual interest in the future net proceeds, if any, from any sale or refinancing after Blackstone has received a return of its invested capital and a return on its invested capital resulting in a 12% internal rate of return. - In connection with the above transactions (the restructuring of Rincon Center and the purchase of the related land from the U.S. Postal Service), the Company and PL&D are involved in litigation with Pacific Gateway Properties (PL&D's co-general partner in RCA). The Company does not anticipate that this litigation will materially impact the Rincon restructuring. o Year 2000 Readiness Disclosures - Since many computers, related software and certain devices with embedded microchips record only the last two digits of a year, they may not be able to recognize that January 1, 2000 (or subsequent dates) comes after December 31, 1999. This situation could cause erroneous calculations or system shutdowns, causing problems that could range from merely inconvenient to significant. As previously reported, the Company began a project to review all of its computer systems in 1995. One factor, among many, to consider was what impact, if any, would the Year 2000 have on computer systems. As a result of this project, the Company implemented new fully integrated online construction specific financial systems during the first quarter of 1998 which are Year 2000 compliant. The cost of these new systems, including the hardware, software and implementation costs, approximated $1.5 million which was capitalized and is being amortized over ten years on a straight-line basis. The Company recognizes the Year 2000 issue could be an overall business problem, not just a technical problem. Therefore, it established a Year 2000 Committee early in 1998 to identify all of the other potential Year 2000 problems that could impact the Company, including readiness issues for its computer applications and business processes, non-information technology systems such as those of its facilities and equipment, along with relationships with third parties, such as our customers, vendors, subcontractors, joint ventures, and other business partners; develop plans to evaluate the significance of the potential problem; develop plans to remedy or minimize the potential problem; assign appropriate resources; and monitor the implementation of the plans. During the third quarter of 1998, the Committee, which included both the Company's Chairman and CEO, designated the Year 2000 Project Manager. The Project Manager has organized a Year 2000 Team, consisting of specific individuals assigned from each operating unit and each corporate department. In addition, the Company developed, published and commenced implementation of its Year 2000 Readiness Plan which has as its overall objective "to eliminate or minimize the potential internal and external impact of the Year 2000 issue on the normal business operations of the Company, its subsidiaries, and joint ventures in a timely and cost effective manner". In addition to addressing its own computer applications, facilities, and construction equipment, the Plan includes communication with critical third parties as stated above. 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) The Year 2000 Plan includes the following phases: (1) potential problem identification, (2) resource commitment, (3) inventory, (4) assessment, (5) prioritization, (6) remediation and (7) testing. While the Company completed the problem identification, resource commitment and prioritization phases during 1998, and inventory phase during the first quarter of 1999, it is currently in various stages of the "assessment", "testing", and "remediation" phases as of March 31, 1999. As part of the Plan, the Company is evaluating alternative solutions and developing contingency plans for handling certain critical areas in the event remediation is unsuccessful. Completion of the Year 2000 Plan, including final testing and development of final contingency plans, is currently on schedule and should be completed by its October 1999 targeted completion date. The Company currently estimates that costs related to the Year 2000 Plan, over and above the cost of the new financial systems referred to above, will approximate $0.3 million which are being expensed currently. The Company, as a general contractor, generally provides its construction services in accordance with detailed contracts and specifications provided by its clients. Also, the Company recently installed all new mission critical financial system software on new hardware, all of which are Year 2000 compliant. In light of the above, the Company has defined its most reasonable likely worse case scenario at this stage of implementing its Year 2000 Plan to include last minute inquiries and requests for assistance in determining Year 2000 compliance by some limited number of clients who have not properly prepared for this event. In addition, the possible filing of frivolous lawsuits against the Company, among others, by a party or parties that claim they were adversely impacted by a Year 2000 issue related to one of the many projects with which the Company was associated is also a concern. The Company currently plans to have a Year 2000 Urgent Response Team defined and available to respond to last minute Year 2000 issues raised by clients or others in a timely, proactive and cost effective manner. In addition, the Company currently plans to develop prepackaged legal defenses in advance assuming various types of complaints. 11
PART II. - OTHER INFORMATION Item 1. - Legal Proceedings - None Item 2. - Changes in Securities (a) None (b) None (c) None Item 3. - Defaults Upon Senior Securities (a) None (b) In accordance with the provisions of the 1995 Amended Revolving Credit Agreement and the Credit Agreement which became effective on January 17, 1997, the Company suspended payment of quarterly dividends on its $21.25 Convertible Exchangeable Preferred Stock ("Senior Preferred Stock") commencing with the dividend that normally would have been declared during December 1995 through the dividend that would normally have been declared during March 1999 for a total arrearage of $74.37 per share (or $7.44 per depositary share) which aggregates $7,437,000 to date. While these dividends have not been declared or paid, they have been fully accrued in accordance with the "cumulative" feature of the stock. Item 4. - Submission of Matters to a Vote of Security Holders - None Item 5. - Other Information - None Item 6. - Exhibits and Reports on Form 8-K (a) The following designated exhibits are, as indicated below, either filed herewith or have heretofore been filed with the Securities and Exchange Commission under the Securities Act of 1933 or the Securities Act of 1934 and are referred to and incorporated herein by reference to such filings: Exhibit 3. Articles of Incorporation and By-laws Incorporated herein by reference: 3.1 Restated Articles of Organization - As amended through January 17, 1997 - Exhibit 3.1 to 1996 Form 10-K filed March 31, 1997. 3.2 By-laws - As amended and restated as of January 17, 1997 - Exhibit 3.2 to Form 8-K filed on February 14, 1997. Exhibit 4. Instruments Defining the Rights of Security Holders, Including Indentures Incorporated herein by reference: 4.1 Certificate of Vote of Directors Establishing a Series of a Class of Stock determining the relative rights and preferences of the $21.25 Convertible Exchangeable Preferred Stock - Exhibit 4(a) to Amendment No. 1 to Form S-2 Registration Statement filed June 19, 1987; SEC Registration No. 33-14434. 12
Part II. - Other Information (Continued) 4.2 Form of Deposit Agreement, including form of Depositary Receipt - Exhibit 4(b) to Amendment No. 1 to Form S-2 Registration Statement filed June 19, 1987; SEC Registration No. 33-14434. 4.3 Form of Indenture with respect to the 8 1/2% Convertible Subordinated Debentures Due June 15, 2012, including form of Debenture - Exhibit 4(c) to Amendment No. 1 to Form S-2 Registration Statement filed June 19, 1987; SEC Registration No. 33-14434. 4.4 Shareholder Rights Agreement dated as of September 23, 1988, as amended and restated as of May 17, 1990, as amended and restated as of January 17, 1997, between Perini Corporation and State Street Bank and Trust Company, as Rights Agent - Exhibit 4.4 to Amendment No. 1 to Registration Statement on Form 8-A/A filed on January 29, 1997. 4.5 Stock Purchase and Sale Agreement dated as of July 24, 1996 by and among the Company, PB Capital and RCBA, as amended - Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 4.8 Certificate of Vote of Directors Establishing a Series of Preferred Stock determining the relative rights and preferences of the Series B Cumulative Convertible Preferred Stock, dated January 16, 1997 - Exhibit 4.8 to Form 8-K filed on February 14, 1997. 4.9 Stock Assignment and Assumption Agreement dated as of December 13, 1996 by and among the Company, PB Capital and ULLICO (filed as Exhibit 4.1 to the Schedule 13D filed by ULLICO on December 16, 1996 and incorporated herein by reference). 4.10 Stock Assignment and Assumption Agreement dated as of January 17, 1997 by and among the Company, RCBA and The Common Fund - Exhibit 4.10 to Form 8-K filed on February 14, 1997. 4.11 Voting Agreement dated as of January 17, 1997 by and among PB Capital, David B. Perini, Perini Memorial Foundation, David B. Perini Testamentary Trust, Ronald N. Tutor, and Tutor-Saliba Corporation - Exhibit 4.11 to Form 8-K filed on February 14, 1997. 4.12 Registration Rights Agreement dated as of January 17, 1997 by and among the Company, PB Capital and ULLICO - Exhibit 4.12 to Form 8-K filed on February 14, 1997. Exhibit 10. Material Contracts Incorporated herein by reference: 10.1 1982 Stock Option and Long Term Performance Incentive Plan - Exhibit A to Registrant's Proxy Statement for Annual Meeting of Stockholders dated April 15, 1992. 13
Part II. - Other Information (Continued) 10.2 Perini Corporation Amended and Restated General Incentive Compensation Plan - Exhibit 10.2 to 1997 Form 10-K filed on March 30, 1998. 10.3 Perini Corporation Amended and Restated Construction Business Unit Incentive Compensation Plan - Exhibit 10.3 to 1997 Form 10-K filed on March 30, 1998. 10.4 $125 million Credit Agreement dated as of December 6, 1994 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Shawmut Bank, N.A., Co-Agent - Exhibit 10.4 to 1994 Form 10-K, as filed. 10.5 Amendment No. 1 as of February 26, 1996 to the Credit Agreement dated as of December 6, 1994 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts (f/k/a Shawmut Bank, N.A.), as Co-Agent - Exhibit 10.5 to 1995 Form 10-K, as filed. 10.6 Bridge Credit Agreement dated as of February 26, 1996 among Perini Corporation, the Bridge Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts (f/k/a Shawmut Bank, N.A.) as Co-Agent - Exhibit 10.6 to 1995 Form 10-K, as filed. 10.7 Amendment No. 2 as of July 30, 1996 to the Credit Agreement dated as of December 6, 1994 and Amendment No. 1 as of July 30, 1996 to the Bridge Credit Agreement dated February 26, 1996 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts, as Co-Agent - Exhibit 10.7 to Perini Corporation's Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 10.8 Amendment No. 2 as of September 30, 1996 to the Bridge Credit Agreement dated as of February 26, 1996 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts, as Co-Agent - Exhibit 10.8 to Perini Corporation's Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 10.9 Amendment No. 3 as of October 2, 1996 to the Bridge Credit Agreement dated as of February 26, 1996 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts, as Co-Agent - Exhibit 10.9 to Perini Corporation's Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 10.10 Amendment No. 4 as of October 15, 1996 to the Bridge Credit Agreement dated as of February 26, 1996 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts, as Co-Agent - Exhibit 10.10 to Perini Corporation's Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 14
Part II. - Other Information (Continued) 10.11 Amendment No. 5 as of October 21, 1996 to the Bridge Credit Agreement dated as of February 26, 1996 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts, as Co-Agent - Exhibit 10.11 to Perini Corporation's Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 10.12 Amendment No. 6 as of October 24, 1996 to the Bridge Credit Agreement dated as of February 26, 1996 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts, as Co-Agent - Exhibit 10.12 to Perini Corporation's Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 10.13 Amendment No. 7 as of November 1, 1996 to the Bridge Credit Agreement dated as of February 26, 1996 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts, as Co-Agent - Exhibit 10.13 to Perini Corporation's Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 10.14 Amendment No. 8 as of November 4, 1996 to the Bridge Credit Agreement dated as of February 26, 1996 and Amendment No. 3 as of November 4, 1996 to the Credit Agreement dated December 6, 1994 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts, as Co-Agent - Exhibit 10.14 to Perini Corporation's Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 10.15 Amendment No. 9 as of November 12, 1996 to the Bridge Credit Agreement dated as of February 26, 1996 and Amendment No. 4 as of November 12, 1996 to the Credit Agreement dated December 6, 1994 among Perini Corporation, the Banks listed herein, Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank of Massachusetts, as Co-Agent - Exhibit 10.15 to Perini Corporation's Form 10-Q/A for the fiscal quarter ended September 30, 1996 filed on December 11, 1996. 10.16 Management Agreement dated as of January 17, 1997 by and among the Company, Ronald N. Tutor and Tutor-Saliba Corporation - Exhibit 10.16 to Form 8-K filed on February 14, 1997. 10.17 Amended and Restated Credit Agreement dated as of January 17, 1997 among Perini Corporation, the Banks listed herein and Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank, as Co-Agent - Exhibit 10.17 to 1996 Form 10-K - as filed. 10.18 Amendment No. 1 as of November 10, 1997 to the Amended and Restated Credit Agreement dated as of January 17, 1997 among Perini Corporation, the Banks listed herein and Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank, as Co-Agent - Exhibit 10.18 to 1998 Form 10-K - as filed. 15
Part II. - Other Information (Continued) 10.19 Amendment No. 2 as of August 31, 1998 to the Amended and Restated Credit Agreement dated as of January 17, 1997 among Perini Corporation, the Banks listed herein and Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank, as Co-Agent - Exhibit 10.19 to 1998 Form 10-K - as filed. 10.20 Amendment No. 3 as of September 9, 1998 to the Amended and Restated Credit Agreement dated as of January 17, 1997 among Perini Corporation, the Banks listed herein and Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank, as Co-Agent - Exhibit 10.20 to 1998 Form 10-K - as filed. 10.21 Amendment No. 4 as of September 30, 1998 to the Amended and Restated Credit Agreement dated as of January 17, 1997 among Perini Corporation, the Banks listed herein and Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank, as Co-Agent - Exhibit 10.21 to 1998 Form 10-K - as filed. 10.22 Amendment No. 5 as of November 16, 1998 to the Amended and Restated Credit Agreement dated as of January 17, 1997 among Perini Corporation, the Banks listed herein and Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank, as Co-Agent - Exhibit 10.22 to 1998 Form 10-K - as filed. 10.23 Amendment No. 6 as of December 1, 1998 to the Amended and Restated Credit Agreement dated as of January 17, 1997 among Perini Corporation, the Banks listed herein and Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank, as Co-Agent - Exhibit 10.23 to 1998 Form 10-K - as filed. 10.24 Amendment No. 7 as of March 23, 1999 to the Amended and Restated Credit Agreement dated as of January 17, 1997 among Perini Corporation, the Banks listed herein and Morgan Guaranty Trust Company of New York, as Agent, and Fleet National Bank, as Co-Agent - filed herewith. (b) Reports on Form 8-K - None. 16
SIGNATURES Pursuant to the requirements 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. Perini Corporation Registrant Date: May 14, 1999 /s/ Robert Band --------------- Robert Band, Executive Vice President, Chief Financial Officer Date: May 14, 1999 /s/ Barry R. Blake ------------------ Barry R. Blake, Vice President and Controller 17