Perini Corporation
Annual Report 2002
Financial Highlights
2002
2001
Total Revenues
$1,085,041
$1,553,396
Net Income
$
$
(In thousands, except per share data)
James A. Cummings, Inc.
23,074
26,418
Income from Continuing Operations
(dollars in millions)
26.4
24.4
Perini Corporation extends a warm welcome to the employees of James A.
Cummings, Inc., as they join the Perini organization. Acquired early in 2003,
Basic Earnings per Common Share
$
0.92
$
1.07
Diluted Earnings per Common Share
$
0.91
$
1.04
New Contracts Awarded
$ 861,681
$ 978,200
Backlog at Year-End
$ 990,175
$1,213,535
16.0
16.4
98
99
23.1
Ocoee Middle School
Cummings shares with Perini the core philosophy of delivering quality projects
on time and within budget while building positive relationships with clients
through quality performance.
$100 million in annual revenues, specializing in the construction of schools,
01
02
Total Debt
James A. Cummings, Inc. is an established building construction and
construction management company in South Florida, with approximately
00
(dollars in millions)
Book Value per Common Share
$
Weighted Average Number of Common
Shares Outstanding
2.72
$
22,664
2.40
77.9
73.2
22,623
municipal buildings, and commercial facilities. James A. Cummings will
Hibiscus Parking Garage at the Fort
Lauderdale/Hollywood International Airport
27.6
continue to serve as CEO of the new wholly owned subsidiary and will join
17.8
12.5
Perini’s Board of Directors.
Market Range per Common Share:
Quarter Ended
98
High
Low
High
Low
March 31
7.28
5.75
7.35
2.94
June 30
6.40
3.40
10.00
5.90
September 30
4.58
3.50
9.40
5.45
99
00
01
02
Net Worth
(dollars in millions)
79.4
86.6
60.6
50.6
December 31
Florida International University
Management Advanced Research Center
4.44
3.00
7.60
6.10
98
99
00
01
02
(36.6)
1
Letter to Shareholders
The following major new contract awards were obtained during the year:
■
Glendale Arena, Phoenix, AZ — A 560,000 s.f., 17,500-seat state-of-the-art, multi-purpose arena for use by the Phoenix
Coyotes professional hockey team.
■
Resorts Hotel/Casino Expansion, Atlantic City, NJ — A new 28-story hotel tower with 51 luxury suites and presidential
suites, in addition to 13,700 s.f. of new gaming space and a retail shopping promenade.
■
Seminole Hard Rock Hotels — Florida
Tampa — A new 10-story hotel with restaurants, lounges and a live entertainment venue as well as retail space
and a spa complex.
Hollywood — A new 13-story Mediterranean style hotel with 64 suites and a lagoon-style pool, retail space and
For Perini Corporation, 2002 was a successful year of building and expansion, and looking ahead to the future:
restaurants, along with a parking structure for 1,600 cars.
■
Net Income for the year was a healthy $23.1 million.
■
Working Capital, at $115.9 million, was up more than 24% from last year’s level.
■
Acquisition of James A. Cummings, Inc. in Ft. Lauderdale, Florida was completed in January 2003.
■
Credit Agreement was increased and extended in February 2003.
■
Chumash Casino & Resort, Santa Ynez, CA — Casino complex comprising 260,000 s.f. with restaurants, entertainment
venues and a parking garage. Phase II includes a 117-room hotel with a pool and additional parking capacity.
■
Pala Hotel & Casino, Pala, CA — A new 10-story 507-room hotel with a 34,000 s.f. expansion to an existing casino as
well as meeting rooms, restaurant, show lounge and parking structure.
We are proud to report that, in spite of tight economic conditions, Perini earned the third highest net income in its
Improvement of our financial condition continued during the year, evidenced by the increase in working capital to
109-year history. Results were particularly strong in hospitality and gaming construction as we were able to favorably
$115.9 million and the signing, in February 2003, of an amendment to our main credit facility which increases our
close out several of those projects. Perini Management Services made a significant contribution, most notably in the
borrowing capacity to $50 million and extends the termination date of the revolving period to June 2005.
continuation of its U.S. government contract to upgrade embassy sites in various locations worldwide.
We are pleased with the recent acquisition of James A. Cummings, Inc., a well-respected contractor in South Florida.
We did, however, experience the effects in the economic slowdown in the United States. Our annual revenues at
Their business of constructing schools, municipal buildings and commercial facilities supplements our current central
$1.09 billion were off considerably from the 2001 level of $1.55 billion, primarily due to sluggish new work awards and
Florida market as well as provides geographic expansion southward. We look forward with great anticipation to working
the completion of the Mohegan Sun Expansion Casino/Hotel project in early 2002. We continue to be encouraged by
with their management, employees and clients as we plan our future together.
the level of interest in our proposals and preconstruction services, looking to this as “pent up” new contract award
activity waiting to spring free when there is improvement in the business climate.
On behalf of the directors and officers of Perini Corporation, we acknowledge and thank our employees, clients,
shareholders and business partners. We are committed to continuing to build the future of Perini, and look ahead
Results in 2002, as in 2001, were negatively impacted by the Company’s share of losses on a “Big Dig” project on
to the challenges of 2003.
the Central Artery in Boston. This work is substantially complete and we are working with the officials in charge of that
project to finally close it out.
The decline in the financial markets had an adverse effect on our reported net worth at the end of 2002. Because the
asset value in our defined benefit pension plan was less than the value of the accumulated benefits, we were required
Robert Band
Ronald N. Tutor
to record a $13.7 million charge to our net worth. Despite this adjustment, net worth improved 9% over 2001, to
President and Chief Operating Officer
Chairman and Chief Executive Officer
$86.6 million.
2
3
Perini Building Company
Gaylord Palms Resort & Convention
Center, Orlando, FL
➤ Named as 2002 Project of the Year
by the Associated General Contractors
of Central Florida, this two millionsquare-foot, 1,406-room resort and
convention center boasts the largest
in-hotel exhibition facility in Florida.
Mohegan Sun, Phase II Expansion
For the second consecutive year, Perini Building Company was recognized by
Uncasville, CT
Engineering News-Record as the nation’s top ranked builder of hospitality and
➤
Seven million manhours were expended
Glendale Arena
gaming facilities. Hotels, casinos, and convention centers are large, complex
Glendale, AZ
projects with aggressive, fast-track schedules, elaborate designs, and advanced
➤
square-foot project including a 34-story,
systems, showcasing Perini’s strength in delivering the most complicated proj-
construction of a 560,000-square-foot multi-
1,200-room hotel; a 10,000-seat arena; and
ects on time and within budget.
by 6,000 craftspeople, representing 250
subcontractors, to complete this 4.9 million-
purpose arena to serve as the home of the
Phoenix Coyotes of the National Hockey
115,000-square-foot casino. “Mohegan Sun
has become a model for the construction
League. The 17,500-seat, state-of-the-art
Perini has the breadth and depth of experience, as well as a presence in key
arena is scheduled to open in December
markets throughout the United States, to compete successfully for projects in
2003. The project is the first phase of a
specialized building markets: sports and entertainment venues, cultural and
planned 223-acre, mixed-use project that is
of Native American-owned developments,”
says Mark Brown, Chairman, Mohegan
Tribal Council.
Perini is managing the fast track
being developed by the Ellman Companies
exhibition space, senior living communities, residential developments, commer-
of Phoenix, Arizona. Ellman is the owner
cial developments, college and university buildings, hospitals, and advanced
of the Coyotes and is active in the develop-
technology facilities, as well as hospitality and gaming.
ment and acquisition of major retail and
entertainment projects, office buildings,
commercial properties and outdoor adver-
On the strength of new contract awards and upcoming market opportunities,
tising structures throughout the United
Perini Building Company extended its geographic reach by establishing offices
States, Canada and the Caribbean. The
in Central Florida (Orlando) and Southern California (San Diego), joining exist-
mixed-use project will feature up to six mil-
ing offices in Arizona, Massachusetts, Nevada, and Michigan. New contracts in
lion square feet of retail, restaurants, office,
2002 include the 28-story Resorts Hotel/Casino Expansion in Atlantic City, N.J.,
entertainment, hotel, and residential space.
the 294-unit La Posada senior living community in Palm Beach Gardens, Fla.,
two Seminoles Hard Rock Hotels and Resorts in Tampa and Hollywood, Fla.,
a laboratory for AstraZeneca Pharmaceuticals in Westborough, Mass., and a
design/build contract to build the Chumash Casino Consolidation Project
Pechanga Resort & Casino
in California.
Temecula, CA
Further, the acquisition in early January of James A. Cummings, Inc. as a
economic development and entrepreneurial diversification. The Pechanga Band of Luiseno
➤ Many Native American tribes have accessed gaming as a source of funding new
wholly owned subsidiary of Perini Corporation, extends Perini’s expansion into
Mission Indians selected Perini to build its new 14-story, 522-room hotel and 420,000-squarefoot casino and entertainment center. Completed in 2002, the new facility includes a 1,200-seat
the Southeast region. Cummings specializes in the construction of schools,
municipal buildings, and commercial developments, and is expected to make
theater style showroom, 40,000 square feet of convention space, and a 24,000-square-foot
Grand Ballroom.
a positive contribution to the Company’s operating results in 2003.
4
5
Long Island Expressway
Perini Civil
Queens, NY
Perini is nearing the completion of the reconstruction the Long Island Expressway/Cross
➤
Island Parkway Interchange for the New York State Department of Transportation. Innovative
methods were used and an extensive Traffic Management Plan was developed to minimize
the impact of the project on motorists, residents, businesses, and community facilities.
In total, 14 bridges were replaced or reconstructed. During construction of the mainline
span, LIE traffic was diverted to a 300-foot-long temporary bridge erected by the Company.
The mainline span is now complete and at year end, only one ramp remains to be built
in anticipation of a July 2003 completion date.
Central Artery
ment, and reconstruction of infrastructure, principally in the Metropolitan New
Boston, MA
➤
Triborough Bridge Structure and
Perini Civil specializes in new public works construction and the repair, replace-
A Perini-led joint venture broke ground
Deck Replacement
York and Boston markets. The efficient, quality construction of highways and
Randalls Island, NY
bridges, mass transit systems and intermodal transportation facilities, mainline
➤ The Perini/Thunderbird joint venture
sewers, and water and waste water treatment plants, particularly in tight urban
year period, the Company has contributed
areas, remain among the Company’s strong points.
its experience and resources to many of the
on the Central Artery North Area project in
brought the Triborough Bridge reconstruction and rehabilitation project to 95%
Charlestown in 1987. Over the ensuing 15-
most sophisticated and complex contracts
completion in 2002. All structural steel and
mainline decking was completed at years
The Company’s financial strength and outstanding record of performance
end, with one vehicular ramp remaining
on challenging civil works projects qualifies it as an attractive partner on the
to be constructed. Site work, paving, and
largest infrastructure projects and prestigious DBOM (design-build-operate-
mechanical/electrical installations required
on this massive civil works project.
maintain) contracts. DBOM contracts team the nation’s top contractors
for the building portion of the work also
with engineering firms, equipment manufacturers, and project development
remain. The success of the project can be
attributed to efficiencies gained through
consultants in a competitive bid selection process to tackle highly sophisti-
comprehensive construction planning and
cated public works endeavors.
value engineering, particularly the use of
pre-cast deck panels that reduced the
Perini acquires new work primarily through the traditional public “hard money
duration of lane closures.
bid” method. Design/build contracts, wherein contractors have single-source
responsibility with a design subcontractor, offers owners an alternative to
traditional delivery methods. The New York City Transit Authority’s 100th Street
Bus Depot in Manhattan for example, is being built by Perini under a
design/build contract.
AirTrain and Jamaica Station
Major work in 2002 continued on the Triborough Bridge, Jamaica Station,
Queens, NY
JFK Light Rail, and the Long Island Expressway in the New York area as well
➤
as the Central Artery in Boston.
Perini is a member of the team
responsible for the design, construction, operation, and maintenance of
the 8.4 mile AirTrain at JFK International
Airport. The AirTrain terminates at
Jamaica Station, an intermodal transportation center being constructed by
6
a joint venture of Perini/Tutor-Saliba.
7
Perini Projects 2002
Perini Management Services, Inc, is known for its ability to plan and execute
Perini Civil
rapid response assignments and multi-year contracts, providing diversified
Support Facilities
construction and design/build services to the U.S. military and government
Central Artery (CA/T)
Afghanistan
agencies, power producers, surety companies, and multinational corporations
I-93 Northbound Tunnel/Atlantic Avenue
➤
U.S Army Corps of Engineers
Perini Management Services, Inc.
in the United States and overseas.
At year-end, Perini was awarded a
$14 million design/build contract by the
Boston, MA
Eastern U.S. Division
Perini/Thunderbird JV
Randalls Island, NY
In 2002, under a multiyear contract with the U.S. Department of State, Office
CA/T, I-90/I-93 Interchange
First Brigade of the Afghan National Army,
Slattery/Interbeton/White/Perini JV
located near Kabul, Afghanistan.
upgrades at U.S. embassies and consulates throughout the world, including
Boston, MA
Atlantic City, NJ
CA/T, I-93 North to Chardon Street
Port Moresby
Under a five-year contract awarded to a Perini-led joint venture in 2001, the
Papua New Guinea
Company provides planning, management, maintenance, and modification
➤
services at ten nuclear power generating stations, including 17 operating units.
Upgrade Program – Worldwide, and in
Jamaica, NY
Airtrain, JFK Int’l Airport Access Program
Skanska/Koch/Perini JV
Argentina, Brazil, Czech Republic, Laos, Pakistan, Philippines, and Taiwan.
Jamaica, NY
Palm Beach Gardens, FL
Seminole Hard Rock Hotel & Casino
Perini/Suitt JV
Tampa, FL
White/Slattery/Perini JV
Boston, MA
Brooklyn Queens Expressway
Approach to Williamsburg Bridge
Tren Urbano System Test Track Turnkey
Brooklyn, NY
Guaynabo, PR
Bowery Bay Water Pollution Plant
Perini is performing security upgrades and
Perini is also under agreement with a major North American surety company
improvements at the U.S. Embassy in Papua
to provide rapid response, contract completion services. Upon notification
New Guinea. For each location in the OBO
from the surety of a contractor bond default, Perini provides management or
Hudson-Bergen Light Rail Transit System
general contracting services to fulfill the contractual and financial obligations
Perini/Slattery JV
Long Island Expressway Reconstruction
Jersey City, NJ
Queens, NY
Westside Highway (Rte. 9A)
100th Street Bus Depot
Reconstruction
New York, NY
designs improvements, and manages local
labor in performance of the construction.
La Posada Senior Living Community
Seminole Hard Rock Hotel & Casino
Perini/Suitt JV
Hollywood, FL
Redondo/Perini JV
support of the U.S. Diplomatic Mission,
Program, Perini conducts a site assessment,
Resorts Atlantic City
Jamaica Station
Perini/Tutor Saliba JV
of Overseas Buildings Operations, Perini performed design/build security
As part of the design/build OBO Security
Perini Building Company
& Deck Replacement
Perini/Kiewit/Cashman JV
U.S. Army Corps of Engineers to design
and construct facilities to support the
Triborough Bridge Structure
of the surety.
The Company was awarded design and construction contracts by Raytheon
Integrated Defense Systems for the upgrades of a radar facility at Beale Air
Force Base in California and the Cobra Dane Facility on Shemya Island,
Alaska, to meet the requirements of the new early warning radar system.
Astoria, NY
New York, NY
Honeywell Street &
Queens Blvd. Bridges Reconstruction
Long Island City, NJ
49-51 Commonwealth Avenue
Boston, MA
AstraZeneca
Westborough, MA
Adrian’s Landing
Hartford, CT
Lucent Technologies
North Andover, MA
CA/T, Integrated Project Control System
Boston, MA
8
9
Officers and Directors
Perini Projects 2002
Corporate Executive Officers
Construction Operations
Board of Directors
Ronald N. Tutor
Chairman &
Chief Executive Officer
Perini Civil
Ronald N. Tutor (3)
Chairman &
Chief Executive Officer
President, Tutor-Saliba Corporation
Age: 62 Elected Director: 1997
Perini Building Company
Caesars Palace Showroom Colosseum
Turnberry Suites
Eastern U.S. Division
Las Vegas, NV
Las Vegas, NV
Robert Band
President &
Chief Operating Officer
Caesars Palace North Casino
Thunder Valley Casino
Zohrab B. Marashlian
President
Perini Civil
Las Vegas, NV
Lincoln, CA
(Continued)
Mohegan Sun Expansion
Uncasville, CT
The Ritz-Carlton, Lake Las Vegas
Gaylord Palms Resort &
Henderson, NV
Perini Management Services, Inc.
Convention Center
Perini/Suitt JV
Polo Towers
Orlando, FL
Office of Overseas Buildings Operations
Las Vegas, NV
(OBO)
U.S. Department of State
South Shore Hospital Expansion
Caesars Palace Valet Garage
U.S. Embassy Security Upgrades
Weymouth, MA
Las Vegas, NV
Worldwide
MGM Grand Remodel
U.S Army Corps of Engineers
Las Vegas, NV
Support Facilities
Perini Building Company
Afghanistan
Western U.S. Division
Chumash Casino
Pechanga Resort & Casino
Santa Ynez, CA
Pala Hotel & Casino
10
Michael E. Ciskey
Vice President &
Controller
Susan C. Mellace
Vice President &
Treasurer
Dennis M. Ryan
Vice President &
General Counsel
Charles E. Newman
Vice President
Equipment Fleet Management
Joseph W. Ertle
Senior Vice President
Operations
Perini Building Company, Inc.
Richard J. Rizzo
Chairman
Craig W. Shaw
President
Eastern U.S. Division
Samuel W. Sabin
Senior Vice President
Perini Management Services, Inc.
Robert Band
President
Claude K. Olsen
Senior Vice President
Operations
Illinois, New Jersey, Pennsylvania
Kevin J. Woods
Senior Vice President
Operations
Pala, CA
Contract Completion
Riverside Hotel Parking Structure
Zurich North America
Laughlin, NV
(various locations)
Fiesta Palms
Upgraded Early Warning Radar
Las Vegas, NV
Beale Air Force Base, CA
Glendale Arena
Upgraded Early Warning Radar
Glendale, AZ
Cobra Dane - Shemya, AK
Michael R. Klein (1,2,3*)
Vice Chairman
Partner, Law Firm of
Wilmer, Cutler & Pickering
Age: 60 Elected Director: 1997
Peter Arkley (2)
Managing Director,
AON Risk Services, Inc.
Age: 49 Elected Director: 2000
Western U.S. Division
Newberg/Perini
Marriott Timber Lodge
South Lake Tahoe, CA
Richard J. Rizzo
Executive Vice President
Business Development
John A. Loftus
Senior Vice President
Operations
Newberg/Perini-Stone & Webster JV
Lake Tahoe
South Lake Tahoe, CA
Craig W. Shaw
President
Perini Building Company, Inc.
Zohrab B. Marashlian
President
CM, Maintenance/Modification Contract
Temecula, CA
Marriott Grand Residence Club,
Exelon Nuclear
Stockholder Information
James A. Cummings, Inc.
James A. Cummings
Chief Executive Officer
William R. Derrer
President
Annual Report
Project Management: Field Communications
Creative: Beagan+Nguyen Design
Photography: Charles Field / various
Cover Photo: Woodruff-Brown
Robert Band
President &
Chief Operating Officer
Age: 55 Elected Director: 1999
Raymond R. Oneglia (2*,3)
Vice Chairman,
O&G Industries, Inc.
Age: 55 Elected Director: 2000
Robert A. Kennedy (1)
Vice President, Special Projects,
The Union Labor Life
Insurance Company
Age: 67 Elected Director: 2000
Wayne L. Berman
Berman Enterprises, Inc.
Age: 46 Elected Director: 2002
Frederick Doppelt
Self-employed attorney
Age: 84 Elected Director: 1998
Asher B. Edelman
Chairman, Edelman Companies
Age: 63 Elected Director: 2001
(1) Audit Committee
(2) Compensation Committee
(3) Nominating Committee
* Chairman
Annual Meeting
All stockholders are invited to attend the
annual meeting to be held May 15, 2003
at 9:00 a.m. at the Crowne Plaza, Rte. 9,
Natick, MA. Proxy materials and the
formal notice of the meeting will be
mailed on or about April 16, 2003.
Stockholder Mailings
Stockholders who are registered under
brokers’ names and who wish to receive
direct mailings of the Company’s
stockholder communications may do
so by writing to the Investor Relations
Department of the Company at
Framingham, MA 01701.
Stock Listing
The Company’s Common Stock and its
Depositary Convertible Exchangeable
Preferred Shares are listed on the
American Stock Exchange. The trading
symbols are “PCR” and “PCR Pr,”
respectively.
Transfer Agent & Registrar
EquiServe
Boston EquiServe Division
150 Royall Street
Canton, MA 02021
Investor Relations
Telephone (508) 628-2295 or submit
inquiries via the internet at perini.com.
Availability of Form 10-K
Stockholders who wish an additional
copy of the Company’s Form 10-K,
filed annually with the Securities and
Exchange Commission in Washington,
DC, may obtain one without charge
by writing to the Investor Relations
Department of the Company at
Framingham, MA 01701.
EEO Policy
Perini Corporation is committed to
the principles of Equal Employment
Opportunity and Affirmative Action.
This commitment requires that the
Corporation comply with all applicable
statutes, regulations, and government
orders pertaining to non-discriminating
employment practices and also that
we provide an atmosphere within the
Corporation that will assure all persons
the opportunity to succeed on their
own merit, without regard to race,
color, religion, national origin, sex, age,
disability or their status as a special
disabled veteran or Vietnam-era veteran.
73 Mt. Wayte Avenue
Box 9160
Framingham, MA 01701-9160
(508) 628-2000
www.perini.com
PRNCM-AR-03