TPC - Earnings call transcript Q3 2017 | Tutor Perini Corporation

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Operator

Good day, ladies and gentlemen. And welcome to the Tutor Perini Corporation Third Quarter 2017 Earnings Conference Call. My name is Tim, and I’ll be your coordinator for today. At this time, all participants are in a listen-only mode.

Following management’s prepared remarks, we will be opening the call for a question-and-answer session.

conference recorded the replay reminder, a is for being purposes. As to I today, conference would Instructions] turn Mr. now for [Operator host like the your over to Jorge Relations. Casado, of Vice President Investor Please proceed.

Jorge Casado

With you Chairman Tutor, CEO; and Vice joining thank are Executive and and Smalley, and everyone, the call afternoon, us Good today. President us Gary on Ronald for CFO.

no disclosure There discuss that other statements today’s reflect risk be information. will to factors statements, forward-looking on which an With call, our Chairman about of our to whether February the trends could as on our a CEO, will assessment a is such making differ Tutor. required over information, I as our existing that, otherwise, to XX, refer filed to company remind will that or results obligation results, we I future our risk events we turn Before Ronald everyone result annual during update of current contribute for our law. assumes report by that new inherent could than XX-K XXXX Please potentially differences. forward-looking Form and and The actual materially. call

Ronald Tutor

ratio $X.X received new the we bit a Civil all X.XX. strong for to-date, a well and billion Thanks, significant of later. particularly higher awards margin thank segment. than we Good months first and will quarter $X.X We quarter The nine awards a booked were some included in Contractors a cash joining from with that more of have bookings book-to-burn billion as new third you the more our of afternoon today. I us had and Jorge. review backlog as new bookings good from awards Specialty of for Notably perspective, flow perspective.

of segment’s Strong various state segment over up was to-date XX% backlog same end growing and favorable period. has funding which effect our occurred the a by The the importantly, and year, and combined well more profitability. our the was of Civil we should anticipated our the we backlog Our continue component, in of with growth to new bodes up of local the to of XX% impact increase long-term see opportunities federal last substantial large without ahead ahead, Civil infrastructure outlook backlog and of all list potential compared opportunity. Civil far the further of to backlog total program, add for believe largest terms growth favorable new measures

quarter Gary solid As later. will mentioned, which into third was another cash the generation, positive delve of aspect

flow our the our to than of that have I delays including backlog were continuing due in financial later which lower timing will results are While next year enjoyed this Therefore, year. cash been on and shifted the into and project our certain we execution call. quarter, should activities awards good XXXX delays, reducing which new for expected earnings this were discuss guidance

MTA work Central with design obtain progressing the completion and being side Civil our Section York get lease end while we New to access performed quarter ahead where side and owner’s of of High-Speed strong continuing quarter. of contributions major the of to in Now first projects our project and and Line group toward In then we projects traffic the we begin in Francisco finalized. construction completed start. first also of completed CMOX expected complete group completed York, open finish on to in Other The double-deck job quarter CQXX X to highway completion be with of inability fourth good are Segment are civil substantial wrap making access Purple way impacted the Angeles and completing continues and Project High-Speed our continues remaining on other I on projects in design startup the third commissioning Subway SRXX on rights the projects to of in New certain to are Civil Rail expected the the substantial include to the doing turnover. be our be after quarter Extension already will Project SRXX from in concrete first Line Yards to expected Rail in point substantially nearing east X. SFMTA platform is the up, Work quarter contract on several of CMOX, with project, MTA progress permits. out within will mid-XXXX. X it to by quarter Los work is XXXX. build though the project the be activities on CSXXX, the during activities XXXX. Seattle, is California necessary certain the planned Work work would the the the to the CP quarter XXXX. Until Hudson in of Purple worked XXXX progress In first the San which XXXX scheduled Construction to in first California that is currently tunnel be

is the completion, contributor schedule scheduled. nearing can Maryland. is completion just Expansion, in and significant However, technology Expansion, quarter projects, the upon and earlier out, milestones which in early the work order The which mostly these Washington the in Casino approved determining also office currently we and Building to expected than was Northern with in we’re for very Philadelphia. California revenue Hotel group Northern the the top Live! completed W segments included California, the in Washington process third be DoT the California, XXXX. facility topped to be in Hospital largest The achieve if Other of project Maryland in Casino included Florida contributors nearing Resort remaining in which Pechanga

an the California $XXX and I won early on Northern very as a have addition, quarter, million project worth In estimated last campus office project. completed technology in mentioned we large work

in in the no we work Fisk segment, east work the United and smaller of first major Hudson the to quarter expect quarter $XXX the remainder Tower other current Electrical Electrical in than million work early quarter project’s the Star third included later third York, backlog year. and the the well the A in contributors California. CSXXX Contractors New as total the on Star’s of on Transit access, Southern Francisco value States $XX In on next Specialty or work million booked Five Five numbers Center the of Transbay the as projects, in quarter approximately electrics of San book For and Yards Package,

is our customers, workload this billion unit with both should addition line for mentioned grow and up We to year working internal long-term our this exterior as and level earlier, as Civil with and others. last believe performing the our in from quarter, trend compared Demand own that to to quarter Our in XX% to continue and last. Specialty ended expectations. of last Specialty year. our continue of more third service backlog to work Contractors operations Building $X.X mechanical I our the groups remains high for they a end compared specialty, compared and electrical, segment We for significantly shotcrete will

improved higher end and should activity prospective The to Specialty. Civil, the civil project ongoing is at profitability infrastructure XX% the component growing. enable in continues civil of XX% unprecedented was The margin continues longer of Building reflecting projects, composition for unabated fact shift volume backlog third in that opportunities increase time. duration Our quarter XX% toward and bidding in

as at included booked new and note U.S., segment’s at portion The resulting million of in new quarter, current million for $XXX $XX smaller the Civil $XXX Line XXW which backlog well the PMSI’s segment, billion $XX The by segment’s backlog in Minneapolis new Section were renovation segment for new will million, at that venture awards million previously parent million in awards work Contractors hydroelectric awards & the valued new the These segment electrical for various our tunnel adjustments projects awards in the awards to Construction Civil, the the awards $XX of training were that new million, and company valued Black million military City. major bidding for new early $X.X $XXX in U.S. in is including end. awards end and new Embassy provide mechanical country’s $X.X we resulting valued also adjustments for subsidiary some -- a range in of Uruguay quarter X technology a Street opportunities. $XXX in million $XX approximately third quarter. another mentioned Lake and million third to joint the the British and third second and fourth office included in quarter. by Southern I subcontract Columbia, in billion be for of York Guam electrical quarter, Next, for project Building followed New in our The Purple details million. at significant in $X.X the billion and from Significant current resulting quarter the totaled a $XXX of win continue as regarding $XX major Kemano the the I other at the adjustments projects awarded our million would all-time awards record the of high backlog segment. California. on three Specialty totaling significant expect Canada $XX Project in campus included in station

contract this Land FEMA Harvey number has the on on Civil contract we structures announced earlier that Canton service. Building of contract been Texas our and identified ultimately for for value December. we Maryland low $XXX related for In Corp. the and The bridge Anderson the week we segment have is anticipate and tunnel DoT repair repair. recovery our will General this bidder in depend the awarded substantial disaster this awarded example, as Hurricane Replacement the been by of Gulf For Coast in that segment, a Roy undetermined we be a but to Viaduct Office

build last a $XXX Additionally, to million selected something new customer. confidential we over a week casino project for were at

in, contract Civil decisions the awarded be Contractors that City’s fare project Airport already system. we for which Rail of third turned million MTA been bidding Specialty in have in Civil currently which are we we both the has proposals awaiting tendered results, them Finally, York track turned on expect weeks new These is Star have New combination and $X opportunities segment, over taking Long Road segment, $X.X weeks. and York and we Five include just working our and Major a and Island $XX next two of a place A, billion billion will been three on the electrical Building. to New Terminal the on

X in Section which of our this we XXXX. section awarded several in and include by award $X.X the Diego $XXX include San in bidding Vegas, we Purple a decision Vegas quarter of Portal of Las Angeles opportunities process Convention million New in Center hope XXXX Bridge segment Civil to which were project projects further first one Ritz-Carlton the owner Hotel and the Section assume in the XXXX, in X, Replacement prequalified we’re which Phoenix, days. LA in million Ritz-Carlton $XXX reservation for of Jersey, Bridge bidders other literally adjoins large MTA We namely which to end the next $XXX the Los which million the we million the System the will year, Our in expansion a $XXX have in Subway renovations million in million the bids would Knees a were and -- prequalified Las and Maryland the $XXX Swing early Hairy bidding Line

awards, our a as as expect revenue billion United segment reducing diluted $X.XX proposal Our $X.XX. backlog I for every now We the shifts in -- is ample revenue Contractors guidance a to on the at expected not earnings we that are into which Based opportunities and bidding our timing the profit consideration range on current XXXX to XXXX. the mentioned in our results of and continues States. of be fill $X bidding be with to-date well XXXX per and working taking and share Specialty [ph] earlier, in are to we us least to the

commissioned call review Now results to over and briefly Gary would completed. like our turn to tell financial you recently the I to before I we about special the study

peers historically, to multiple industry. know our felt price valuation engineering our is construction the you constrained both by discounted stock As we relative and significantly in being

provide largest increase Perini’s this discount be question shareholder have to able may Tutor always we what value. As do and I shareholder

were sell invited side which recently Perception first and significant over we studies the assessing current challenges prospective XXX executives with commissioned Study interviews, negative, revealed recommendations portfolio in in valuation presence anonymously of research Tutor We So and participate complex project. capabilities confirms the in how both certain company managers our independent to conducted very themes affecting strong by conclusions Wall including Street of study analysts, unique and large study’s Perini by to and drivers appeal certain the shareholder is both objective company’s achieving firm. approach our to an were and understand ever enlightening by investors. the The Perini, analysts, and our value. Tutor better perceived positive and market the Investor buy analysts investment The our side executing the all

receivables of issue the The our the I debt areas flow concern of as believe cash of company by our In our not and strength to addition, inconsistent benefit. do backlog driven level. recognize poised and that generation surprisingly, included unbilled history participations our is

management’s that with has noted I with me access to times management. matter recurred interest this thank, our the and impacted valuations confidence, and want every the in by management reduction of the in credibility. to been all and our at set are views investment senior heart. to a When we participated, I who of certain know your your lower than desired To In matched one team. that participants you comments addition expectations of definitely and read not results recommendations, has which together result up and anonymous level you have has to rest investors’ taking of

access. and Even improve be you our never withheld Investor the I this always have the shareholders, that never outreach, though access -- management desired will our of the input. I CEOs of Relations have using will that access any including study need to me We is of I frequency results to that and communications be taken there by questions ensure available whenever occur to

Investor can we all can explain non-deal questions truth Days, ask for going schedule are we us in is what shows, Conferences industry respond The so a held where of and are of our really depths do and publicly road are and one-on-one you we and addition, more privately In you XX% concerns peers to. held. we of Perini have to are whatever that matter to company to the Investor Tutor construction an about the

we we have Ours our great have leaders brought to in and the as Perini And a such I industry no only over longer investment with certain there the perception achieve with Tutor the kind is monologue. I we risks my company with better listening our of do to our technical the also is the who and will to very our the and better call disconnect but way industry. explain of rewards. valuation is for may business significant will believe should better community to turn that, understanding a you executives Gary. Thank and

Gary Smalley

Thanks, Ron, good and afternoon, everyone.

newer with volume third Building compared revenue for of segment nearing quarter was reduction projects get that from to the after projects, contributions the generating that was larger the third due associated which the a yet quarter billion certain up and particularly are segment, to year. soon Our along. are levels move completion revenue they in $X.X Civil revenue further Civil of various higher $X.X will last and The not lower expected decline to compared running and billion projects

transit benefit activity highest Gross yet reduced mostly partially compared the of other the million, for have mass to New execution increased quarter partially activities down by margin California certain newer we third activity we’re and partially driven mechanical in various revenue project decrease York. was in project winning, of down compared was on to same transit offset contributions segment and $XXX margins to execution segment impacted California. York, Contractors to in Washington. by to three by quarter, predominately activities electrical in gross the the almost and as a project York on timing particularly the timing Specialty Specialty some was increased increased will projects quarter expense offset G&A projects due offset reduced Revenue the completion quarterly in was a in nearing electrical fully higher biotechnology of XX% a primarily compensation decrease project newer new Civil in activities mentioned, Building and year-over-year. hospitality have was segment activity $XX we still X%, our ramp are The prior both million, project projects higher revenue years, for $XXX was decrease project by the of to the which to third for California. compared decrease decrease expect project and was we up. due awards and mostly was year in have revenue The revenue the previously The complete. courthouse or certain to our The have to Ron projects reflecting on project margins quarter, execution up $XXX United and X.X%, mentioned for costs. substantially SRXX projects margin job million, business in various was certain on gaming As New Contractors X% in due projects segment. the quarter Southern prior been compared which the for projects, on and mass delays New expense was the by California, of States million, XXXX. in activities projects also third on on projects execution development X% the completed those completing, awarded reduced year, legacy last shift

increased order also in help We to been believe to last volume activity be over and various significant a prepare executives us new of months we in what us help hired new will employees have work and the the future. execute address we have the bidding several seeing other

Third I the operating to the reductions was for quarter compared to same income mentioned. in $XX quarter due billion million, $XX volume XXXX,

X.X% margins after in for very segment X.X%, X.X% Specialty and line margin third G&A with Building Contractors were our and good XXXX segments, range, quarter for the targeted within to and segment’s which quarter budget was XX% Third segment margin the performance. indicates XX% respectively. The Civil, Civil expectations roughly of our

quarter from expected limited the has in believe should margin strong over the to technology range the time points, XXXX, demand basis segment Ron in on electrical office anticipated to companies improve large infrastructure to was We the last to and of after normalized Contractors The quarter due last Building in compared margins performance expect be increase mechanical on California. target improves segment’s around for that surge XX York. also third margin the New performance to segment we projects basis including most the discussed improve up segment points, portfolio, that As in can up would robust compared the compared on project G&A perform significantly the in successfully margin projects due spending, largest past, third projects. Civil primarily Specialty X%. to Building segment due segment’s to complex work quarter various quarter competition XXX and civil many and project

the year. million, you well Specialty $XX.X be third previously on reach roughly we level to from the Interest in was level expense to the that and with range as we third the X% should performance Contractors of the can same are quarter’s indicated, quarter Specialty. quarter for with X% last track As margin see segment

Tutor last due lower rate the third offset partially quarter. attributable quarter income the shortfall was compared a of was as tax by to net mentioned, $XX million in effective to for volume The Perini reduction to million, year’s $XX quarter year. Third this third

of release Our of to tax tax due favorably the tax certain impacted statute. expiration the primarily was liabilities the rate by

EPS compared in third Our third diluted quarter the $X.XX, last to quarter was year. $X.XX

of However, our diluted of nine period $X.XX, to a first for XXXX. the a was months for EPS this $X.XX compared the year equivalent

Let’s cash. balance and discuss our shift and gears sheet operating now

our the in modest an billings million cost at Also $XX receivables project to quarter primarily increase in sequentially when our by our earnings the due receivables statements. unbilled to there net advance capital by net It excuse flow billings X% in to and in financial cost solid of increase outpaced refer declined on our a subs, was decreased billings, excess in quarter. unbilled Our what net financial of the $XX is partially as payments third the in billings of by that increase or in unbilled third receivables statements. profit, accounts offset excess working quarter driven of actually advance million the noteworthy cash of we to look an since our payable the you timing our me, growth increase estimated for contributing XXXX,

receivables of We in some positions. continue progress to make our larger to reduce unbilled negotiations

being corresponding However, to as orders spend and additional this recently, certain completion. mass costs positions in closer is discussed progress we projects increases due have as move by claims toward change a

quarters is it precision more issues for prolonged said arbitration. positions lead quite expect with settle, are the before, here with become progress of our will notable will and costs. resolved reducing and and these difficult some larger when when even certain incurring more unbilled reiterate improve other to can completed costs and I in negotiations to sometimes unbilled We agreed, cost when not in what and ultimately coming entitlement have mediation the are the projects estimate disputes sizable more we

our highly motivated close engage we top management is is settle positions. sheet is unbilled we organization get sometimes a improve fair before in trials to very balance team remains of reasonable collection a collecting and We discussions so what unbilled The the we begins Ron with We receivables issues. the and to The resolve these these as of for to for be that then to unbilled probably Sometimes receivables these effort entitlement. -- us. remain we stock to billing to catalyst receivables course right have priority we have the reflected and our our full multiple, and key and are significantly ability recognize on our offer. often confident collect believe can entire

our XX, ratio XXXX with September covenants. and quarter of the our within leverage was bank $XXX X.X of well as under debt requirements million, third total Our

third Ron an positives $XX.X intense continued we Now as in generated one cash, focus generation fourth for million stronger quarter, cash operating as is operating our improvement area. the cash flow of mentioned, in this generation of the even look the given quarter in of

I Finally, assumptions. to an related provide will update our guidance

interest to for million. $XX XXXX million Of $XX will this expense be forecasting still $XX projected be million non-cash. are We

also million We of expense in as between still million expect completed a interest this $X of refinancing an and year. earlier $XX reduction result we XXXX the

for and forecast $XX amortization Our of million depreciation expense in XXXX remains unchanged.

still cash new forecasting which million to XXXX, approximately capital will be Ron, are to turn call of back expect now purposes for that, XXXX. expenditures for With We I $XX the equipment potential of projects. approximately over by excluding -- would for effective for our of you. paid tax new rate XX% projects the significant We be

Ronald Tutor

Gary. you, Thank

results financial the what short third of quarter our we While for were expected.

continuing And Our generation our to so. opportunities has do new believe the and improving awards I and and be of backlog turned growing. project cash substantial the and future continues volume to strong very corner,

backlog is will one new with the months. record Our large project and high at wins I two backlog or think, coming set we a sometime ahead, in a record

we have new forward is propositions improved in afford federal not Los about that M will other everyone we revenue or infrastructure. very to. pushing expected awarded look bill, that any finally with into in of keep in Washington California’s bill Angeles, forward will profitability the talking us is in of it Keeping our transportation the perspective or moves projects, be government SPX the Whatever add-on. us these with to simply long-term growth Proposition an factored Trump significant the federal recently administration opportunities into before With along any mind that opportunities outlook important remains favorable. benefits

of year of there the by on $XXX award as on now million probably $X range Island matter to our on $X and as is million, facility, the $XXX the well training the contract million of activity our the bidding award expansion evidence Airport. million continued the $XXX Guam conformation, tremendous million of a tune a As and Guam,

Having I’ll you. continue the, So the Thank to now what the of opportunities growth programs back for current we just to that, questions-and-answers. exists. Operator, call the see and turn within said

Operator

Bobby Thank you. Canaccord your with proceed from [Operator line Instructions] the Our of question. Burleson comes question Genuity. first Please

Bobby Burleson

Good what pace have year Ron, thinking how of we next for Yeah. the you, and mix in kind that terms burning terms Civil the seen of in is in in I we margins mix off to of should be of this just nice afternoon. of there? guess, about revenue of terms any backlog, benefit

Ronald Tutor

lost and year ‘XX ‘XX. they ensuing into earnings lose this into profits though next as Well, it, the and has issue been California in our two from pushed our Civil we’ve the and right that year. frankly they have ‘XX excess but not profit business way didn’t reduced delayed the bode well Project to over a CP of of X off all Does went years Rail sites they was had been High-Speed probably and associated $XXX and grown million only has we by of it fact over for follows haven’t the with of in and $X.X unfortunately that earnings, that result, been burn a issues, revenue we two billion the years and in revenue course ‘XX

So I we a think would were be bidding everything that ago. to is margins it we months six and higher safe year than ago say are even bid now with

Bobby Burleson

terms …? had in work in scope kind doing Can sense of of give of you Fisk and partner some some prospects be that highway for think, might then, Gulf Texas, you And exposure I in there, Coast then the of a that. us of Houston. Electric, for guys your work post what might you any cases the Thanks kind in Hey. I understand and

Ronald Tutor

The thing will it but be, is Texas. hurricane our the and previous but don’t significant, we will much so large Katrina, done it Carolina we awarded will an only we’ve were enough, just in much interestingly contracts be work cost don’t how is Well, also repair and range in between South although Sandy we in we know damage know. indeterminate the -- work, enormous,

will have profits. we or work much first and a December immediate but be revenue expect relatively part will probably go part of and that be We think to to that January, the sense latter the of don’t to expect of significant how immediately until we revenue I

Bobby Burleson

is helped regular… And to a at done, kind needs be the being profit is the expedience all of by it that

Ronald Tutor

Yeah.

Bobby Burleson

…bidding process or…?

Ronald Tutor

the us process arms to fast how number in very January to will an your may capacity for get -- we hard largest, certain the billions. idea work, It’s but profits your very highly because of around have it that and and no that It’s the it’s give accelerated and is It’s we of experience that which resumes around expect then No. the much a the contractors turn been and follow, work one works, they selected you it’s they determining than And the receive, is accordingly. were whole emergency. revenue in XXXX. of we your later they enormous way recently awarded our our have of -- since arms program

Bobby Burleson

Great. Thank you.

Ronald Tutor

Sure.

Operator

Our from comes your next Steven question. Pleased question the of with Fisher UBS. of line

Steven Fisher

afternoon. Good Thanks.

a just talked at of the leverage there? what quarter, us remind X.XX the you is the about result first, Just end you quick the clarification can covenant

Gary Smalley

now, Yeah. Steve, X.X. is X The right covenant --

Steven Fisher

the how by to revenues were you your just million, And actually does took that Thank revenue amount compare Okay. guidance of roughly you. delayed? down $XXX that

Ronald Tutor

delayed were High-Speed Rail. to far specific by revenue them million million biggest here, lost so there, and the $XX of single the $XXX of $XX get We to was project try one on one million balance really

Steven Fisher

Okay.

Ronald Tutor

That probably of loss. accounted revenue two-thirds for the

Steven Fisher

Okay. And…

Ronald Tutor

what say I it… makes Steve, again shouldn’t loss, revenue

Steven Fisher

Deferral.

Ronald Tutor

them. pushed it we lose just don’t back, Different,

Steven Fisher

Right.

this point do that of you what start? you when So could think to, actually kind have visibility at

Ronald Tutor

Which would start?

Steven Fisher

to Rail recapture High-Speed that California revenue? The

Ronald Tutor

work do all complete only we’ve unable right XX% delayed of the Well, absolutely been by is we The approximately to are and right job. way. are now over thing we

by way will year next one all month the So end delivered meaning of exception piece I the of of right will believe the we be in with get February.

months. finally, XX of access and to over what we I $XXX So, entire got probably be length million job we have would work guess of complete would the to the worth

produce gotten finally the resolve way, it’s They to than our and other We up and have work. on change of us great a issues no had right of resolve see owner. out the relationship for delays to to payments impacts with delays with way now with all the orders. they owner I continue our

Steven Fisher

been for thanks growth give would second incorporate survey, the into of part your XXXX, the what has will for survey that that you This question. you of the thinking guidance will segment the point? comment be, Okay. this think to result potential you be guidance in that will are February? at revised for extent of first the each Directionally on the and how you about question reflected speaking what And do the in part in

Ronald Tutor

question. Run by then talk two-part one That’s kind first and the survey. I’ll the a about of

Steven Fisher

Sure.

that just The first thinking could really of each the you you part for segments, your -- each of think about? kind think up, of question how flat, directionally they was as are about XXXX for down, you be

Ronald Tutor

Building with operation risk growth and at think, us. Well, And get a will that opportunities number the I we we the now close believe in continued drive that when drag (a), being of January. significantly, optimistic, will the right will of be along I and between because Specialty now up segments has Civil Civil contracts

to will to come enlightening important think to the And not was as and XXXX the what agreed with able in the ‘XX didn’t, the will perception deferred, far -- then and believe whether growth February very it January we delayed we survey, what you and will growth analysis or in-depth believe between So better be an of I will be do was getting in community. most I then we project and that we do. will that we as

but collectively One and that take not a and me, individually access best all largest and create I available, Investor accessible I not me be which of facts aggressively to out interested get the to our meet parties the thought couldn’t and was that further and truth seek things will going and Tutor from the get with shot conferences through but I most only you to and I’m shareholders at of the talk dealt was shot a Days, all as continued Perini you can.

do the conservative our being have things of I a of we better got job more One the out other to survey, in of projections.

way own simplest in profit-wise our private, not don’t are our doing all we is we well meet to The year so conservative. but position street is peers doing So of find goals, position compared -- of a which disappointed. the place some very to ourselves perfect what takes to hope become meet it’s more do as run an your in that having literally to a we just are to if And a opposed uptick then to targets.

lot better. hopefully -- intend that address to and think for a I it the all be the I will survey. learned I of it So out

Steven Fisher

Terrific. Thanks much. very

Operator

the question question. of next comes Sean of Markets. with proceed KeyBanc Our your Please Eastman Capital line from

Sean Eastman

Hi, gentlemen. my questions. taking Thanks for

Civil am point for wondering I more looking you what in have just of thinking year-over-year. you am just, about should one guys it’s How up in accomplish capacity up ‘XX I stacking be now XX% at We’ve ‘XX. with these what got are we terms some at First full push-outs. of work into can is me that? backlog, fiscal

Ronald Tutor

we in we turned We get billion will be price know we a will terminal. $X.X for think of and weeks. over say, hope me let two Well, the it, competitive we in new very

We are Road. think We billion Island very We it. in $X Rail Long to competitive. get. get hope We the for we’re

We will stars know them. aligned the about we in two and got of If weeks. both and moon that

as without with Purple Section we anyone. question Line, after Section people think that to remember, of three be start an where going our to bidding we we if course about $X be billion get asking over adding be have all as you have job. really all from. X on to that take get low of of would as three are will We and large come could X were and backlog. to the we excellent blessed $X.X organization is, I going the our more would people existing questions The We a billion added we beyond those were Once all the may

had to. potentially, backlog but we billion had I run the if if next we So $X six remember there’s to off over say months, additional

So ties and really point but it substantially backlog, at some increase I jobs. capacity our have Civil the think to we to the of numbers

we I me jobs $XXX billion If manage to management billion jobs each, if told you three you it. million in added had have do I of it, $X tell I the can’t but in $X I XX

or would in one on. take significantly the seriously impossible happen about large on on we jobs might got to all have not. big more. blessed look am for I bid, and to maybe, very that more we we bid three, maybe ability job, Could at were limits what be we optimistic our three So beyond But our very we’ve to the if really either take

Sean Eastman

Okay.

labor capacity at have an the got sounds we’ve all I point am all a coming So quite lot on. it obviously going bit this still am you sure, just could and And have would through get left, I of in wondering of you recovery like update, become time, get out? start what of storm with activity work but govern question to to terms this your availability think this I you see quite helpful you up be for and does it to previous to a problem in you playing back overall compare how if start experience growth cycle TPC? of maybe have career margins

Ronald Tutor

we’ve probably down this XX management. years. of the on the doing and now been constrained been years labor have for last by a up I XX Sure. cycles or large all over With the past never for very scale and

go However, without unprecedented this is funds. as even having the activity that, forward, we speak benefit as an federal of of we said the level Civil

they of union in President constrained. with a program but South, are up our operating what have So union engineers contractors certain hiring meet and the amount ourselves. never non-union they they the met of the can’t me you training me ongoing XX% processes union as of driven and We tell I key I like they we’ve feel to have two provide was met labor ramp support. their assure crafts from to our do and been international to have work Carpenters. with I the experience because revenue

thing can’t, So the to will we satisfied, be can’t union if it simply time and do continue stop build management. when is can to will talk to able be leaders, with comes we only our manpower because they the bidding, provide they the we

Sean Eastman

Thanks Ron. a was lot, very helpful. That

Ronald Tutor

Sure.

Operator

Please the from comes Brent of question. question of line with next Davidson. Thielman Our your D.A.

Brent Thielman

Good Thanks. afternoon.

heard I I owner On cleared aren’t what, right-of-way the to the the confirm High-Speed any project? other Ron, to think, you once wanted the issues resolved, Rail, earlier, rest of right-of-way I gets the come, there

Ronald Tutor

than drama a are very No. get we and it’s with us their working litigation right-of-ways both There of right-of-way. and tied are owner not in These faulting job is doing really to to. politics. I’m other victim been good has inability and fact in a up of them

we’ve are of are stepped we one in all already they compensable However, us delay to these and resolving process been have and up major events a settled and decent another.

behind that it So, balance be us by December, should said, by I as of I think, it the February. majority

a run So year. we us should ahead have next clear of starting

Brent Thielman

Okay.

Ronald Tutor

since foot time on job. the For the first we set

Brent Thielman

them there back And else great. That’s as holding see then, ramp should quickly, the to XX% margin that plus these back? projects to is expect Civil we anything pretty up, back get

Ronald Tutor

thing and after Civil affect don’t errors many going Civil Absolutely. felt in we should the goodness only our could would own G&A. The -- been the that’s haven’t we’ve that up. XX% was it to far that a so our substantially margins increase I go be sector. made we are if we’ve question. and to appropriate I think We mean X% my always should make

Brent Thielman

Okay.

Gary Smalley

And then, XX%. we keep the in over for are -- mind for year the

We’re just XX% the it above quarter, for a XX% nose within to but range and quarters been… that that the under other XX% we are we’ve

Ronald Tutor

Most that reflect that work and talking increase am year this -- years awarded margins And two the ago. three is really I is doesn’t about. of

Brent Thielman

policy help is But Washington? from really healthy some without brought Got larger know there’s if fed it. these I And hang-up kind they of still times Civil on any for then, waiting of the in sense forward got civil pipeline Ron, the up the jobs, obviously now ask, decisions few there. some any guess, pushing right just I you monologue,

Ronald Tutor

light spend to it’s with, I’m the bizarre again, to and say desperately it’s get it of to the I estimating really isn’t to going parties agree. it happen, XXXX, an you’re great the we it’s there’s their we amount ahead that work just XXXX construction, XXXX, you I thing area in one enormous shed Well, promises one into say, infrastructure. it’s there so have and of our will sure is a street tell it agree are going struggling encompassing with and the happen with. do that I both amount on that said is, of parties, it, man can deal or only off on putting before trying, trying I And deal currently butt before of be are us government. I got, to these question their federal they on we’ve all when, overwhelming The and it’s when funded an need get estimates, can amount is or make they enormous hours government we engineering a can’t whether What work both

Brent Thielman

Maybe Okay. quarter. one Specially nicely Ron, more, came this the margins back

work your a It most lot We sustain you those like better are about ability levels. issues? through looks feeling of to those

Ronald Tutor

Absolutely.

we believe was think position margins. of and took series We’ve I the group. a We’ve a It quarter, increase is reflected traumatic major the in we this difficult. write-downs in necessary changes. the But Specialty made I quarter. next are

Specialty and margins our group of should. get the do to kind they well think very will I continue

we work made, more Tutor more are and with doing Perini. of One the we changes

grow they grow with we Civil As us. our group,

million X, us, a pile all other heating Desert $XX example got a million contract. on the plumbing $XX Section bids. an Fisk for Purple took received the contract as from piles. $XXX Mechanical drilled exclusive and received bidder Line we million For no contract Becho

subcontractors to their and we will so as our pricing we in continue get Civil grow these will -- reap and and support So the benefits capacity, competitive. we

very dynamic contractor are much in protecting aspects. profits for the just they all benefit their And their beginning them when are of. to So or really it’s us finally a more general consistent work we enjoy frankly,

contractors maintain their we their not XX%. are diminishing of they they aspect. of for reducing to revenues others and do be are still with if general XX% now we revenue work third-party the and are they work I We we able to are in won’t -- the saying for owners that amount am used but

Brent Thielman

for the color. all Thanks Okay.

Operator

of the with Rathod question. comes Please from next question Macquarie your Sameer of proceed Our line Group.

Sameer Rathod

that but projects why historically, if cash why has being earlier, in but on afternoon. the of Good more question I capital if discussion contract appreciate was guys TPC is Hi. cash the the completed? backlog, are flat, capital is you are contract flat isn’t said accretive? My backlog isn’t the and conceptually, I investing think flow, quarter-on-quarter more monetizing backlog TPC

Gary Smalley

this impacting that talked it. the cost Sameer, There impact is Yeah. have Gary. a are unbilled that I But would say we really issue things couple primary is are the about.

executing We are the projects well.

and lot soon, is. it until the progress. issue when of I would matter a build time settled. said, are we build when making there surprises. major that of then, years able really of there there hurdle negotiated the bill that’s we is on over timing the last issue get on progress. to and we can quarters and so collect contractual due in a is to and recievables. these receivables, just hope what a receivable, break of number issues no we make approved you collecting It’s were were we we are good of don’t We the manner and those We really the we are as dam mass are that’s to but progress the -- the being that cost one a of collection, see to issues, able the are that that see accumulation not to like laying change we orders mentioned two had that’s have But to a we it’s hard collecting and starting the of see timely to It’s I to And X what it’s just to matter we earlier, to And continue so on. see. But then them get focus

Sameer Rathod

you. Thank Okay.

Operator

management conference This the question-and-answer would for like to now to I turn today’s concludes session. back remarks. over closing

Ronald Tutor

you We one. everyone us. forward the to with for being look Thank next

Operator

your for you Thank conference. today’s concludes participation. This

disconnect your your wonderful time. a rest of at Have may lines day. this You

Tutor Perini (TPC) 9 Nov 172017 Q3 Earnings call transcript