Tutor Perini (TPC) 8-K Tutor Perini Reports Strong Third-Quarter Results

News Release

Tutor Perini Reports Strong Third-Quarter Results

· Revenue of $1.25 billion, up 21% compared to $1.03 billion in Q3 2013

· Income from Construction Operations of $70.4 million, up 21% compared to $58.1 million in Q3 2013

· Diluted EPS of $0.73, up 49%  compared to $0.49 in Q3 2013

· Backlog of $8.1 billion, up 17% compared to $6.9 billion in Q3 2013

SYLMAR, California – (BUSINESS WIRE) – November 5,  2014  – Tutor Perini Corporation (NYSE: TPC) (the “Company”), a leading civil and building construction company, today reported results for the third quarter of 2014.

Third-Quarter and Nine-Month Results

Revenues were $1.25 billion and $3.29 billion for the three and nine months ended September 30, 2014, respectively, compared to $1.03 billion and $3.08 billion for the same periods in 2013. Income from construction operations was $70.4 million and $177.3 million for the three and nine months ended September 30, 2014, respectively, compared to $58.1 million and $133.6 million for the same periods in 2013. Net income for the three and nine months ended September 30, 2014 was $35.7 million and $80.2 million, respectively, compared to net income of $23.8 million and $54.0 million for the same periods in 2013. Basic and diluted earnings per share were $0.74 and $0.73 for the three months ended September 30, 2014, respectively, compared to basic and diluted earnings per share of $0.50 and $0.49 for the same period in 2013. Basic and diluted earnings per share were $1.65 and $1.64 for the nine months ended September 30, 2014, respectively, compared to basic and diluted earnings per share of $1.13 and $1.11 for the same period in 2013.

During the three and nine months ended September 30, 2014, revenues increased $220.3 million, or 21.4%, and $214.1 million, or 7.0%, respectively, compared to the same periods last year due primarily to increased activity on civil and building projects at Hudson Yards in New York, certain electrical and mechanical projects on the East Coast, certain bridge projects in the Midwest and New York, and certain large mass transit projects in California and New York. The increase was partially offset by decreased activity on hospitality and gaming projects in California, Arizona, Nevada, Louisiana, and Pennsylvania and healthcare projects in California. The increase in net income in the three months ended September 30, 2014 was due primarily to volume increases across all segments and an increase in the estimated recovery projected for a Building segment project due to agreements reached with our customer. The increase in net income in the nine months ended September 30, 2014 was due primarily to an overall increase in volume in our Civil segment and net favorable adjustments to anticipated recoveries associated with two legal rulings issued in the second quarter of 2014, as well as the increase in the estimated recovery mentioned above.

The Company used $82.0 million of cash from operating activities in the third quarter compared to cash generation of $27.5 million in the same period last year. The change in cash usage between the third quarters of 2014 and 2013 was primarily driven by the timing of payments across all segments. At September 30,  2014, working capital was $1.16 billion, an increase of $372.8 million from $787.4 million at December 31, 2013. The Company believes its financial position and available borrowing under existing credit arrangements are sufficient to support the Company’s current backlog and anticipated new work.

Backlog Increased to  $8.1 Billion

The backlog of uncompleted construction work at September 30, 2014 was $8.1 billion, an increase of $1.2 billion, or 17.1%, from $6.9 billion reported at September 30, 2013. The strong increase in backlog since last year has been driven primarily by two large new mass transit projects in New York that benefited our Civil and Specialty Contractors segments, as well as a new multi-unit residential tower project in Florida and a new healthcare facility project in California, both of which benefited our Building segment.  During the third quarter, new awards and adjustments to existing contracts together totaling approximately $1.6 billion were added to backlog. New awards included a $243 million runway reconstruction project in New York, a $211 million  healthcare project in California, three bridge projects in Wisconsin and Minnesota collectively valued at $181 million, and a $112 million hospitality and gaming project in California.

Outlook and Guidance

Ronald Tutor, Chairman and Chief Executive Officer, said, “I am very pleased with the Company’s third-quarter results, which were highlighted by strong revenue and backlog growth and increased operating income across all segments. This quarter marked our sixth consecutive quarter of increased backlog. With increasing demand for our services across all segments and limited competition for the larger complex projects we favor, we are well-positioned to continue our growth and success over the coming years.”

Based on the current outlook, the Company is maintaining its fiscal 2014 guidance, with revenue expected in the range of $4.5 billion to $4.7  billion and diluted EPS expected in the range of $2.20 to $2.40.

Third-Quarter Conference Call

The Company will host a conference call at 2:00 PM Pacific Time on Wednesday,  November 5,  2014, to discuss the third-quarter results. To participate in the conference call, please dial 877-407-8293 five to ten minutes prior to the scheduled time. International callers should dial +1-201-689-8349.

The conference call will be webcasted live over the internet and can be accessed on Tutor Perini's website at www.tutorperini.com. To listen to the webcast, please visit Tutor Perini's website at least fifteen minutes prior to the start of the call to register, download, and install any necessary software. For those unable to participate during the live call, the webcast will be available for replay shortly after the call on Tutor Perini's website.

About Tutor Perini Corporation

Tutor Perini Corporation is a leading civil and building construction company offering diversified general contracting and design-build services to private clients and public agencies throughout the world. We have provided construction services since 1894 and have established a strong reputation within our markets by executing large complex projects on time and within budget while adhering to strict quality control measures. We offer general contracting, pre-construction planning, and comprehensive project management services, including the planning and scheduling of the manpower, equipment, materials, and subcontractors required for a project. We also offer self-performed construction services including excavation, concrete forming and placement, steel erection, electrical and mechanical services, plumbing, and HVAC. We are known for our major complex building project commitments as well as our capacity to perform large and complex transportation and heavy civil construction for government agencies and private clients throughout the world.

The statements contained in this Release 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 without limitation, statements regarding the Company’s expectations, hopes, beliefs, intentions or strategies regarding the future and statements regarding future guidance or estimates and non-historical performance. These forward-looking statements are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. The Company’s expectations, beliefs

and projections are expressed in good faith and the Company believes there is a reasonable basis for them. There can be no assurance that future developments affecting the Company will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the Company) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the Company's ability to successfully and timely complete construction projects; the Company’s ability to win new contracts and convert backlog into revenue; the Company’s ability to realize the anticipated economic and business benefits of its acquisitions and its strategy to assemble and operate a Specialty Contractors business segment; the potential delay, suspension, termination, or reduction in scope of a construction project; the continuing validity of the underlying assumptions and estimates of total forecasted project revenue, costs and profits and project schedules; the outcomes of pending or future litigation, arbitration or other dispute resolution proceedings; the availability of borrowed funds on terms acceptable to the Company; the ability to retain certain members of management; the ability to obtain surety bonds to secure its performance under certain construction contracts; possible labor disputes or work stoppages within the construction industry; changes in federal and state appropriations for infrastructure projects and the impact of changing economic conditions on federal, state and local funding for infrastructure projects; possible changes or developments in international or domestic political, social, economic, business, industry, market and regulatory conditions or circumstances; and actions taken or not taken by third parties, including the Company’s customers, suppliers, business partners, and competitors and legislative, regulatory, judicial and other governmental authorities and officials; and other risks and uncertainties discussed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on February 24,  2014. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Contact:

Tutor Perini Corporation
Jorge Casado, 818-362-8391
Vice President, Investor Relations & Corporate Communications

Tutor Perini Corporation
Consolidated Balance Sheets
(Dollars in thousands, except par value)
	September 30, 2014
	(Unaudited)			December 31, 2013
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	137,228	$		119,923
Restricted cash		46,988			42,594
Accounts receivable, including retainage		1,580,594			1,291,246
Costs and estimated earnings in excess of billings		720,177			573,248
Deferred income taxes		7,951			8,240
Other current assets		69,318			50,669
Total current assets		2,562,256			2,085,920
Long-term investments		—			46,283
Property and equipment, net		526,981			498,125
Goodwill		585,006			577,756
Intangible assets, net		103,329			113,740
Other		57,948			75,614
Total assets	$	3,835,520	$		3,397,438
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	65,407	$		114,658
Accounts payable, including retainage		863,643			758,225
Billings in excess of costs and estimated earnings		327,646			267,586
Accrued expenses and other current liabilities		145,336			158,017
Total current liabilities		1,402,032			1,298,486
Long-term debt, less current maturities		880,121			619,226
Deferred income taxes		115,325			114,333
Other long-term liabilities		97,115			117,858
Total liabilities		2,494,593			2,149,903
CONTINGENCIES AND COMMITMENTS
STOCKHOLDERS’ EQUITY:
Preferred stock, $1 par value:
Authorized – 1,000,000 shares
Issued and outstanding – none		—			—
Common stock, $1 par value:
Authorized – 75,000,000 shares
Issued and outstanding – 48,645,900 shares and 48,421,467 shares		48,646			48,421
Additional paid-in capital		1,020,806			1,007,918
Retained earnings		304,789			224,575
Accumulated other comprehensive loss		(33,314)			(33,379)
Total stockholders' equity		1,340,927			1,247,535
Total liabilities and stockholders' equity	$	3,835,520	$		3,397,438

Tutor Perini Corporation
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
		2014		2013		2014		2013
Revenues	$	1,250,689	$	1,030,388	$	3,290,432	$	3,076,381
Cost of operations		1,109,848		909,531		2,914,713		2,749,212
Gross profit		140,841		120,857		375,719		327,169
General and administrative expenses		70,487		62,763		198,425		193,522
INCOME FROM CONSTRUCTION
OPERATIONS		70,354		58,094		177,294		133,647
Other expense, net		(441)		(9,488)		(10,788)		(13,549)
Interest expense		(11,297)		(11,571)		(32,985)		(33,990)
Income before income taxes		58,616		37,035		133,521		86,108
Provision for income taxes		(22,886)		(13,276)		(53,307)		(32,071)
NET INCOME	$	35,730	$	23,759	$	80,214	$	54,037
BASIC EARNINGS
PER COMMON SHARE	$	0.74	$	0.50	$	1.65	$	1.13
DILUTED EARNINGS
PER COMMON SHARE	$	0.73	$	0.49	$	1.64	$	1.11
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
BASIC		48,588		47,959		48,525		47,735
Effect of dilutive stock options
and restricted stock units		487		666		495		802
DILUTED		49,075		48,625		49,020		48,537

Tutor Perini Corporation
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
	Nine Months Ended September 30,
	2014		2013
Cash Flows from Operating Activities:
Net income	$	80,214	$	54,037
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		42,165		41,766
Stock-based compensation expense		14,376		6,597
Excess income tax benefit from stock-based compensation		(656)		(356)
Deferred income taxes		15,988		(503)
Loss on sale of investments		1,786		—
Loss (Gain) on sale of property and equipment		926		(220)
Other long-term liabilities		1,256		17,877
Other non-cash items		1,324		444
Changes in other components of working capital		(300,804)		(130,700)
NET CASH USED IN OPERATING ACTIVITIES		(143,425)		(11,058)
Cash Flows from Investing Activities:
Acquisition of property and equipment excluding financed purchases		(37,778)		(39,810)
Proceeds from sale of property and equipment		5,153		2,551
Proceeds from sale of available-for-sale securities		44,497		—
Change in restricted cash		(4,394)		(8,749)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		7,478		(46,008)
Cash Flows from Financing Activities:
Proceeds from debt		993,010		571,285
Repayment of debt		(808,611)		(536,227)
Business acquisition related payments		(26,430)		(17,716)
Excess income tax benefit from stock-based compensation		656		356
Issuance of common stock and effect of cashless exercise		(1,692)		(786)
Debt issuance costs		(3,681)		—
NET CASH PROVIDED BY FINANCING ACTIVITIES		153,252		16,912
Net Decrease in Cash and Cash Equivalents		17,305		(40,154)
Cash and Cash Equivalents at Beginning of Year		119,923		168,056
Cash and Cash Equivalents at End of Period	$	137,228	$	127,902
Supplemental Disclosure of Cash Paid For:
Interest	$	27,447	$	26,918
Income taxes	$	47,736	$	18,449
Supplemental Disclosure of Non-cash Transactions:
Property and equipment acquired through financing arrangements not included above	$	27,045	$	458
Grant date fair value of common stock issued for services	$	5,774	$	11,393

Tutor Perini Corporation
Segment Information
(In thousands)
		Reportable Segments
						Specialty							Consolidated
Three Months Ended		Civil		Building		Contractors		Totals		Corporate			Total
September 30, 2014
Total revenues	$	496,142	$	420,404	$	355,932	$	1,272,478	$	-		$	1,272,478
Elimination of intersegment revenues		(13,472)		(8,317)		-		(21,789)		-			(21,789)
Revenues from external customers	$	482,670	$	412,087	$	355,932	$	1,250,689	$	-		$	1,250,689
Income from construction operations	$	53,684	$	19,159	$	10,876	$	83,719	$	(13,365)	*	$	70,354
Three Months Ended
September 30, 2013
Total revenues	$	401,976	$	366,833	$	287,633	$	1,056,442	$	-		$	1,056,442
Elimination of intersegment revenues		(4,270)		(21,784)		-		(26,054)		-			(26,054)
Revenues from external customers	$	397,706	$	345,049	$	287,633	$	1,030,388	$	-		$	1,030,388
Income from construction operations	$	49,559	$	12,847	$	9,312	$	71,718	$	(13,624)	*	$	58,094
		Reportable Segments
						Specialty							Consolidated
Nine Months Ended		Civil		Building		Contractors		Totals		Corporate			Total
September 30, 2014
Total revenues	$	1,270,657	$	1,122,072	$	970,036	$	3,362,765	$	-		$	3,362,765
Elimination of intersegment revenues		(32,292)		(40,041)		-		(72,333)		-			(72,333)
Revenues from external customers	$	1,238,365	$	1,082,031	$	970,036	$	3,290,432	$	-		$	3,290,432
Income from construction operations	$	156,031	$	28,656	$	31,326	$	216,013	$	(38,719)	*	$	177,294
Nine Months Ended
September 30, 2013
Total revenues	$	1,063,937	$	1,261,665	$	873,544	$	3,199,146	$	-		$	3,199,146
Elimination of intersegment revenues		(66,073)		(56,682)		(10)		(122,765)		-			(122,765)
Revenues from external customers	$	997,864	$	1,204,983	$	873,534	$	3,076,381	$	-		$	3,076,381
Income from construction operations	$	104,483	$	20,855	$	44,583	$	169,921	$	(36,274)	*	$	133,647
* Consists primarily of corporate general and administrative expenses.

Tutor Perini Corporation
Backlog Information
(In millions)
			Revenues
	Backlog at June 30, 2014	New Business Awarded (1)	Recognized in the Three Months Ended September 30, 2014	Backlog at September 30, 2014
Civil	$                     3,707.9	$              661.3	$                      (482.7)	$                   3,886.5
Building	2,007.6	592.4	(412.1)	2,187.9
Specialty Contractors	2,048.8	318.3	(355.9)	2,011.2
Total	$                     7,764.3	$           1,572.0	$                   (1,250.7)	$                   8,085.6
			Revenues
	Backlog at December 31, 2013	New Business Awarded (1)	Recognized in the Nine Months Ended September 30, 2014	Backlog at September 30, 2014
Civil	$                     3,538.1	$           1,586.7	$                   (1,238.4)	$                   3,886.4
Building	1,755.1	1,514.9	(1,082.0)	2,188.0
Specialty Contractors	1,661.1	1,320.1	(970.0)	2,011.2
Total	$                     6,954.3	$           4,421.7	$                   (3,290.4)	$                   8,085.6
(1)  New business awarded consists of the original contract price of projects added to our backlog plus or minus
subsequent changes to the estimated total contract price of existing contracts.