Tutor Perini CEO Discusses Q3 2010 - Earnings Call Transcript
Tutor Perini Corporation, (
)
Q3 2010 Earnings Call
November 4, 2010 4:30 pm ET
Executives
Ronald Tutor – Chairman & Chief Executive Officer
Robert Band – President
Ken Burk – Executive Vice President & Chief Financial Officer.
Analysts
Steve Fisher – UBS
Richard Paget - Morgan Joseph
Avi Fisher – BMO Capital Markets
John Rogers – DA Davidson
Kalpesh Patel – Jeffries & Co.
Philip Volpicelli – Deutsche Bank
Presentation
Operator
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Tutor Perini Corporation Q2 2009 Earnings Call Transcript
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ShengdaTech CEO Discusses Q3 2010 Results - Earnings Call Transcript
Good day, ladies and gentlemen, and welcome to the Q3 2010 Tutor Perini Corporation Earnings Conference Call. My name is Kendall and I’ll be your operator for today. (Operator instructions.) I would now like to turn the conference over to your host for today, Mr. Ken Burk, Executive Vice President and Chief Financial Officer. Please proceed.
Ken Burk
Good afternoon, everyone. Thank you for joining us for Tutor Perini’s Q3 2010 conference call. With us today is our Chairman and CEO Ronald Tutor and our President, Robert Band.
Before we start I’d like to remind our listeners that our comments today will contain forward-looking statements including statements about future guidance. Management may also make additional forward-looking statements in response to your questions. These types of written and oral disclosures are made pursuant to the Safe Harbor provisions contained in the Private Security Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from anticipated results. The company cautions that any such forward-looking statements are based upon assumptions that the company believes are reasonable but that are subject to a wide range of risk and actual results may differ materially. These risks and uncertainties are disclosed in detail in our filings with the SEC including Tutor Perini’s annual report on Form 10K for the fiscal year ended December 31, 2009, our definitive proxy statement filed on April 28
th
, 2010, as well as in today’s news release. Our statements on this call are made as of today, November 4
th
, 2010, and the company undertakes no obligation to update any of these forward-looking statements contained in the call, whether as a result of new information, future events, changes in expectations or otherwise.
With those formalities out of the way it’s my pleasure to turn the call over to Ronald Tutor.
Ronald Tutor
Thanks, Ken. Good afternoon, everyone. We ended the quarter with a backlog of $4 billion. Major awards during the quarter included a $300 million casino in New York, a $25 million power plant in California and a $23 million educational facility in Arizona. Currently we have approximately $1.1 billion in pending awards, consisting of $470 million in power projects, $220 million in hospitality and gaming, $218 million in transportation, $154 million in education, and $60 million in other end markets. These awards are expected to enter our backlog within the next few quarters.
We are especially pleased with our Civil Group, whose profit contribution during the quarter has more than quadrupled from the Q3 of 2009. Our Civil Group is on track to achieve the margins that we expected. With three quarters of the year behind us we still look for our Civil Group to provide more than 40% of our operating income for the year. We estimate the prospective opportunities in our civil infrastructure target market to be $20 billion for the remainder of 2010 and 2011. The breakdown of that includes $7.7 billion in mass transit, $6.3 billion in bridges, $3.3 billion in highways, and $2.7 billion of other types of civil work including power, rail, and water.
In the nonresidential building markets, we continue to see incremental improvement alongside the financial markets and broader economic recovery. For the building group we have identified and are tracking approximately $27 billion in targeted projects that we could bid in the following years of 2011 and ’12. More than $11 billion of these targeted projects are in the public sector, including corrections, education, municipal office, and transportation buildings – transportation buildings being airport terminals and the like. During the Q3 we continued to make good progress on existing work including Terminal 3 at McCarran Airport which is approximately 73% complete and on track for a completion ahead of schedule, as well as the JFK International Airport’s Bay Runway job, which should be concluded before December 1; and the Greenwich Corridor at the World Trade Center site where we have delivered all critical milestones ahead of schedule.
Subsequent to the quarter we closed a $300 million senior unsecured notes offering. This additional capital enhances our ability to take advantage of growth opportunities for acquisitions that are available to us in the current market. We’ve already begun putting this capital to work. On November 1, we closed the acquisition of Superior Gunite, a California-based construction company specializing in pneumatically placed structural concrete, namely shotcrete or gunite. We believe Superior Gunite is a very strong strategic fit for our company in both the civil and building sectors, and enhances our vertical integration and self performance. Their markets are seismic rehabilitations of tunnels, bridges, and buildings.
In addition, we have signed a letter of intent to acquire another contractor that will complement our civil and building operations. The purchase price is $105 million and we expect them to contribute at least $330 million in revenues next year. The closing for this transaction should occur by the end of December.
Now I’d like Bob Band to share details of our management services group.
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