Tutor Perini Corporation (PCR) Q1 2010 Earnings Call May 6, 2010 4:30 PM EST Executives Ken Burk – EVP and CFO Ronald Tutor – Chairman and CEO Robert Band – President Analysts Richard Paget – Morgan Joseph Steven Fisher – UBS John Rogers – D.A. Davidson Richard Rossi – Wunderlich Avi Fisher – BMO Capital Markets Kalpesh Patel – Jefferies Presentation Operator
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» Perini Corporation Q1 2009 Earnings Call Transcript
The company cautions that any such forward-looking statements are based upon assumptions that the company believes are reasonable, but that are subject to 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 December 31, 2009 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, May 6, 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 is my pleasure to turn the call over to Ronald Tutor. Ronald Tutor Thanks Ken, and good afternoon, everyone, and thank you for joining us on the call today. With the completion of MGM’s project CityCenter in December of 2009, we have moved forward with the new set of challenges and opportunities. Bidding activity in our civil group is at all time high and we continue to compete for our share of the available work. During the months of March and April 2010, we were identified as the low bidder on four civil projects in California, New Jersey, New York and Maryland, totaling approximately $366 million in contract value. In our building group, we have pending awards in the amount of $969 million, consisting primarily of healthcare, education, and hospitality, and gaming projects. We expect these and other promising new work opportunities to bolster our $3.8 billion backlog in the coming quarters. As we look ahead to the remainder of 2010, our civil business continues to provide us with the best growth opportunities in terms of new awards as well as higher margins.
With the first quarter behind us, we still look for our civil group to provide more than 40% of our operating income this year. We estimate the size of prospective opportunities in our civil infrastructure target market to be $16.5 billion for 2010. The breakdown is $5.7 million in bridgework, $5.2 billion in highway, $3 billion in mass transit, and $2.6 billion of other civil work including power, rail, and water projects.In the non-residential markets, there are some signs of economic recovery. Our customers are seeing an improvement in the financial markets. And in the building group, we have identified and are tracking approximately $11 billion in targeted projects that we could bid this year. A significant portion of this market is the public sector, including corrections, education, municipal office, and transportation buildings. With respect to MGM CityCenter, approximately $491 million is due and owed to us and our subcontractors, which consist primarily of contract, receivables, and subcontractor change or a request for additional work, requested by the owner. Amounts dues include pass through subcontractor billings for contract work, including their retention in the amount of $299 million and subcontractor change orders for extra work of approximately $81 million. In March of this year, we filed a lawsuit against MGM alleging breach of contract among other allegations and subsequently filed a $491 million (inaudible) against the project. Needless to say we are very disappointed with the manner in which MGM has handled the closeout and final payments of this project. The Fontainebleau property has been sold through bankruptcy proceedings through a development team led by Carl Icahn and approximately $105 million has been set aside from this sale and is available for distribution to satisfy creditor claims, based on seniority as will be determined by the courts. It essentially boils down to the banks disputing the creditors for who goes first. Terminal 3 at McCarran Airport is approximately 51% complete and continues to be significantly ahead of schedule with what we hope to have a successful completion occur in 2011. Read the rest of this transcript for free on seekingalpha.com