Tutor Perini Corporation. (TPC)
Q2 2010 Earnings Call
August 05, 2010 4:30 p.m. ET
Ken Burk - EVP & CFO
Ronald Tutor - CEO
Bob Band - President & CEO, Management Services
John Rogers - D A Davidson
Steven Fisher – UBS
Richard Paget - Morgan Joseph
Avi Fisher - BMO
Kalpesh Patel - Jeffries & Co.
Michael Chapman - Private Capital Management
Good day ladies and gentlemen, and welcome to the Second Quarter 2009 Tutor Perini Corporation Earnings Conference Call. My name is Christine, and I will be your operator for today. (Operator Instructions).
I would now turn the call over to your host for today, Mr. Ken Burk, Executive Vice President and Chief Financial Officer. Please proceed.
Good afternoon, everyone. Thank you for joining us on Tutor Perini's Second Quarter 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 provision contained in the Private Securities 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 discussed in detail in our filings with the SEC, including Tutor Perini's Annual Report on Form 10-K for the fiscal year ended 12/31/09 and our definitive proxy statement filed on April 28, 2010, as well as in today's news release.
Our statements on this call are made as of today, August 5th, 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.
Thanks Ken and good afternoon everyone. As anticipated, during the second quarter of 2010 we converted a number of pending awards in the backlog across all of our business segments. New contract awards and adjustments to contracts in process during the second quarter added approximately 1.4 billion to backlog. Major awards during the quarter include a $480 million courthouse in San Diego, a $300 million hospital in Northern California, a $149 million rehabilitation of the Tappan Zee Bridge in New York, a joint venture contract on a tunnel at New Irvington and Northern California, our share of which is 91 million and an $81 million contract for run way paving and electrical work on Joint Base Andrews in Maryland.
Currently we have approximately 1.1 billion impending awards, awards that consist of 791 million in hospitality, 184 million in education, 92 million in transportation and 57 million in the industrial sector. These awards are expected in backlog over the next few quarters.
We continue to be particularly pleased with our Civil segment which is on track to achieve the margins we expected this year. As we look ahead to the remainder of 2010, we will continue to execute our strategy of increased focus on higher margin public works project in our Civil and Building segments.
With the first half of the year behind us we still look for our Civil group to provide at least 40% of our operating income this year. We estimate the size of perspective opportunities in our Civil Infrastructure target market to be 7.3 billion for the remainder of 2010.
This breakdown includes 2.1 billion in highways, 1.8 billion in mass transit, 1.3 billion in bridges and 2.1 billion of other types of civil work including power, rail and water. In the non-residential markets there continues to be a sign of economic recovery.
Our customers are seeing improvement in the financial markets. For the building group we had identified and are tracking approximately 5.6 billion in targeted projects that we expect to bid over the next two quarters.
A significant portion of this market is in the public sector including corrections, education, municipal office and transportation, buildings.
Our dispute MGM's CityCenter is in the discovery phase with the trial date set for September 2011. In the meantime as they have been quick to point out MGM is in the process of negotiating payments with certain sub-contractors for final cost.
During the quarter, we continued to make good progress on existing work including Terminal 3 at the McCarran Airport which is approximately 70% complete and on track for completion ahead of schedule.
As well as JFK International Airports, Bay Runway Project were in we delivered the main runway at a critical milestone date and achieved the bonuses there too.
Now I would like Bob Band to share more details of our Management Services Group.
Thanks Ron. In the Management Services Group we are continuing to see some of the larger proposal opportunities in Guam surface which should contribute to new work awards in a more meaningful way in the second half of 2010.
During the second quarter, we have submitted a number of proposals to the U.S. Navy under the $4 billion maximum capacity IDIQ design/build multiple award construction contract we have received on the island.