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Executives

Jorge Casado - Director of Investor Relations

Ronald N. Tutor - Chairman and Chief Executive Officer

Robert Band - President, Executive Director and Chief Executive Officer of Tutor Perini's Management Services Group

Michael J. Kershaw - Chief Financial Officer and Executive Vice President

Analysts

Steven Fisher - UBS Investment Bank, Research Division

John B. Rogers - D.A. Davidson & Co., Research Division

Tutor Perini (TPC) Q1 2013 Earnings Call May 1, 2013 5:00 PM ET

Operator

Good day, ladies and gentlemen, and welcome to the Tutor Perini Corporation's First Quarter 2013 Earnings Conference Call. My name is Tahitia, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. [Operator Instructions] I would now like to turn the conference over to your host for today, Mr. Jorge Casado, Director of Investor Relations. Please proceed.

Jorge Casado

Good afternoon, everyone. Thank you for joining us. With us today from management are Ronald Tutor, Chairman and CEO; Robert Band, President; and Mike Kershaw, Executive Vice President and CFO.

Before we discuss our results for the first quarter, I would like to remind everyone that the company will be making statements about its future results and expectations, which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements are based on current expectations and the current economic environment and are inherently subject to economic, competitive and other uncertainties and contingencies beyond the control of management. You should be cautioned that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements.

Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in our earnings release, which was issued earlier today, and in our Form 10-K and other SEC filings.

During this call, we may discuss certain non-GAAP financial measures, and reconciliations of these amounts with the comparable GAAP measures are reflected in our earnings release, which is posted in the Investor Relations section of our website at www.tutorperini.com.

With that, I'd like to turn the call over to our Chairman and CEO, Ron Tutor.

Ronald N. Tutor

Good afternoon, and thank you for joining us. As usual, I will provide an overview of the company's recent developments, performance and discussion of our Civil, Building and Specialty Contractors markets and opportunities. Then I'll turn the call over to Bob Band to discuss Management Services, then Mike Kershaw, the details of our financial results for the quarter.

Overall, we had a good first quarter and delivered strong results, highlighted by double-digit organic revenue growth in our Building and Specialty Contractors segments and solid profitability across all segments. Our Building Group was active in the quarter with hospitality and gaming projects well underway at the Graton Rancheria Casino in California, Vee Quiva Casino in Arizona and the Marriott Grand Chateau in Nevada; as well as work at the Hudson Yards South Tower in New York City, the continuing construction of the residential complex at Hudson Yards and other ongoing projects in California, i.e., the Kaiser Hospital, San Bernardino Courthouse, et cetera; in Pennsylvania, the Chestnut Street Towers; in Florida, the Broward County Courthouse; and in Louisiana, the Margaritaville Resort Casino.

Our Civil segment's Alaskan Way Viaduct replacement project in Seattle is also progressing well. We are beginning the ramping up of our work and are currently in the process of assembling and testing the world's largest tunnel-boring machine to begin tunneling operations on the project this summer.

Our Buildings, Civil and Specialty Contractors were busy on a large amount of the ongoing Hurricane Sandy-related work in New York City. Tutor Perini and our subsidiaries performed approximately $85 million of Sandy-related work in the first quarter, and our work on New York City's Rapid Repairs program is essentially complete at this date.

We were very excited to recently learn that we were successful in 2 of our major Civil bids. Our joint venture team with Tutor Perini as the sponsoring partner with Zachry Corporation out of Texas and Parsons out of California was selected as the parent best value bidder for the initial Madera to Fresno segment of the California high-speed rail system with a bid of approximately $985 million. The tentative award date is the first week of June of this year, and it appears to be rapidly going to award and notice to proceed.

Additionally, we were the low bidder for the San Francisco Municipal Transportation Agency's Central Subway project, with a bid of $840 million. The San Francisco project includes construction of 3 subway stations, track work and related system. These projects represent very significant wins for us. And once we are awarded the respective contracts over the next 6 weeks, they will provide us with further confidence on what we believe our improved growth and profitability will extend over the next several years.

In the first quarter, we booked several new awards into our backlog. Our Building segment was awarded the Hudson Yards South Tower construction project with an overall cost of approximately $800 million. Our Building segment was awarded 2 educational projects in California valued at $234 million, and a federal facility in Mississippi valued at $40 million. Finally, our Five Star Electric unit was awarded $58 million transit signal modernization job in New York City.

In addition, on the Hudson Yards South Bay Tower, our Concrete group has been committed to $143 million subcontract to build a concrete frame of that tower, as well as Five Star Electric, our electrical subsidiary, an approximate $56 million job to perform the electrical on Tower C. We ended the first quarter with a total backlog of $5.5 billion. Remembering that these large contracts on Hudson Yards, because we are CM at-risk, do not go into backlog for -- other than our fee.

Compared to the fourth quarter of 2012, our Building segment grew 4% as a result of the volume of new orders. Our Specialty Contractors segment was essentially flat as new orders balanced volume of progress. Our Civil and Management Services backlog declined 6% and 9%, respectively, once again, due to progress earned on large contracts, which more than offset new orders.

As a result of the previously discussed 2 major bids for California rail projects, the value of our pending awards has climbed significantly to $6.5 billion compared to $4.4 billion last quarter. Of that $6.5 billion in pending awards, $3.7 billion is associated with additional large phases of the Hudson Yards project, including the North Tower, the platform, the retail podium and 2 other mixed-use towers, Tower D and Tower E. Another $1.3 billion is associated with the 2 California Rail projects, and the balance is comprised of various educational hospitality and construction projects in various stages of pre-construction. These awards are expected to enter our backlog over the next several quarters.

In addition to our pending awards, we continue to have a large pipeline of large-scale Civil and Building bidding opportunity in our 2 recent successes. And the California Rail project provide us with optimism about our prospects in other pending proposals. California High-Speed Rail alone goes to the board for approval in June, with 3 more projects with an aggregate value exceeding $1 billion, which should bid by either the fourth quarter this year or the first quarter next year.

We believe we're in extremely solid competitive situation with any work added at high-speed rail. We are also continuing to track various project opportunities across all our segments related to recently passed $50.5 billion Sandy aid relief package.

As a reminder, the Congressional Budget Offices has estimated that more than 30% of these funds will be spent by October of 2014, and some of these have already started flowing. The key component of this funding is that we may expect numerous bidding opportunities over the next few years, as $10 billion is devoted to preparing mass transit systems in New York and New Jersey and improving transit infrastructure to better withstand future storms. Given our strong demonstrated capabilities in responding to the recent disaster damage, as well as our lengthy history of providing services to build an improved transit infrastructure, TPC is well positioned to win and execute mass transit projects requiring our expertise.

Our Civil segment continues to deliver good results. While the first quarter revenues were down a bit compared to last year, the segment's profitability remains strong, and we expect revenues to ramp up later this year as we make further project on the Alaskan Way Viaduct replacement and commence work in the third quarter on the 2 large California Rail projects. In addition, we have been awarded contracts in New York, namely the Cayuga Bridge and the Stewart Airport and a pending project, the City Island Bridge, which should enter backlog shortly.

The Civil segment also continues to have the largest volume of significant infrastructure opportunities, and as always, generates the highest margins across our businesses. Backlog for the Civil segment at the end of the first quarter was $1.7 billion. We estimate the size of prospective opportunities that we intend to bid to be approximately $12 billion for projects over the next 12 months, including $3 billion in various bridge projects, over $2 million in various New York City MTA projects and more than $1 billion in New York City regional airports.

In our Building segment, the largest near-term growth opportunity continues to be the additional phases of the Hudson Yards project. The project is off to a good start with the foundation work for the South Tower progressing well, and we continue to ramp up our work on the balance of frame this year. Related, our customer is currently in discussions with several prospective tenants for the North Tower, known as Tower A, and assuming they secure an anchored tenant shortly, we would expect to begin work on that tower, as well as the massive platform over which it will be built.

Our Building business overall is experiencing gradual recovery. We anticipate continued backlog growth in that business and remain confident in 2000 -- our Building segment will return to a reasonable level of profitability. Backlog for the Building segment at the end of the first quarter was $2 billion. We are tracking and pursuing approximately $8 billion to targeted projects, which should be bid or proposed upon over the next 12 months. As a result of our success with Related at Hudson Yards, both Tutor Perini Building Group and Keating Building Group are in discussions with various other owners in the New York City region about engaging with them on certain projects under development.

Our Specialty Contractors continue to play an increasingly key role in complementing both our Civil and Building segments. For example, our integrated specialty capabilities were a major factor in our ability to bid and win the San Francisco MTA Central Subway project. Whereas our competitors for this project formed joint venture teams in order to provide all of the requisite services, we were able to present a proposal that included a higher component of planned, self-performed activity. This proposal and subsequent win was just another affirmation that our integrated approach to bidding and executing large-scale projects is producing the expected results.

In the first quarter, Specialty Contractors segment was awarded $300 million in new subcontract work for over 1 dozen major projects, including the $58 million transit signal modernization in New York City previously referred to. The majority of these new awards were for external customers. Additionally, our Specialty Group has a $56 million pending award, as stated earlier, at Hudson Yards. Specialty Contractors segment has an active pipeline with particular emphasis in New York City, totaling approximately $3 billion that will be bid over the next 12 months.

Overall, across our businesses, we continue to execute well. Our backlog stands at a healthy level, and we are looking forward to soon booking into backlog the 2 major California Rail projects, additional phases of Hudson Yards and several other pending low bids in both the Civil and Building businesses. In addition, new Sandy-related project opportunities, with particular emphasis on New Jersey, should also help play a role in driving backlog and revenue growth over the coming quarters. We remain pleased and optimistic about the significant volume of large Civil opportunities.

Additionally, as the country's seventh largest general building contractor, an interesting statistic that I'm sure -- quite sure I agree with, we have the unique national scale and breadth of capabilities to build the most complex mega building developments in the marketplace.

Now I'd like Bob Band to share details of our Management Services segment and our overseas work.

Robert Band

Thank you, Ron. The Management Services segment continues to participate in our 9 multiyear indefinite delivery, indefinite quantity contracts for several U.S. government agencies. The aggregate value for these IDIQ contracts at the program level is in excess of $15 billion for all participants. These programs include the Navy design build multiple award contract for the relocation of the U.S. Marines from Okinawa to Guam; the U.S. State Department worldwide construction contract for containerized housing and offices; 2 USAID contracts, including an energy and water contract and a vertical construction contract both in Afghanistan; and the Central Command multiple award task order contract program for the U.S. Army Corps of Engineers Middle East District; also, the U.S. Coast Guard Department of Homeland Security multiple award contract for their agencies, including FEMA and ICE; and the Fish and Wildlife Service multiple award contract for the Department of Interior and other agencies, as well as the SATOC and HERC contracts with the Air Force.

We are performing work under 8 of these IDIQ programs currently and actively pursuing new work under all these IDIQ programs, which provides us with greater visibility into our new work pipeline into 2013, '14 and beyond.

We estimate the size of prospective opportunities in our Management Services segment target market to be between $2 billion and $3 billion for projects that will be bid and proposed on over the next 12 months. We continue to seek additional multiple award contracts from U.S. government agencies, both overseas and domestically, as well as pursue major full and open competitions in Afghanistan, Haiti, Guam and other locations from various U.S. government agencies.

Recently, we were among 3 large businesses each awarded an IDIQ contract from the U.S. Department of State, which is currently on hold due to a protest from an unsuccessful bidder, which should clear by the end of June. In addition, we are targeting $300 million to $400 million of new construction for the State Department and $500 million of Sandy relief funded projects from our existing domestic IDIQ programs.

In addition, President Obama recently issued his 2014 budget proposal, which includes considerable funding for military construction projects in Guam. By our estimates, there are at least 6 major project opportunities valued collectively at well over $400 million, including a fuel tanker squadron operational and maintenance facility, an aircraft maintenance hangar, modular sports facility, the Navy surveillance drone operational and maintenance hangar, Naval warfare improvements and a repair facility expansion.

In addition to these military construction projects, the President has also proposed $266 million in Civilian infrastructure projects in Guam to upgrade the major wastewater treatment plan and to address critical wastewater collection system deficiencies. Should Congress approve this funding request, these would all represent key bidding opportunities for which we are very well positioned to win and execute.

First quarter backlog for Management Services segment declined 9% from year end but grew 24% year-over-year to $324 million as a result of our fourth quarter 2012 award of the $130 million USAID Irrigation and Watershed Management Program. Work currently in backlog continues to produce solid on target results. The $122 million test water contract under the State Department's containerized housing and office facilities contract in Southern Iraq continues achieving good results. Our work in this project is beginning to wind down.

The $75 million task order under the Navy MACC for an aircraft parking apron in Andersen Air Force Base in Guam is also continuing to grow well. In Haiti, we are nearing completion of an $18 billion USAID electrification project. In Afghanistan, we are progressing well with our work on $108 million contract to upgrade the Southern Electric Power System consisting of upgrades to an existing electrical overhead transmission system and the construction of electrical substations, as well as good progress being made on the $130 million Watershed Management Program. In the U.S., we will complete the scaffolding phase later this month on the $9.6 million contract in the National Park Service for repair of earthquake damages for the Washington Monument. We anticipate continued bidding activity in Haiti, Afghanistan, Guam and other locations, as well as an increased number of foreign and domestic task orders, surety and multinational client work.

Now Mike will give you the financial details for the quarter.

Michael J. Kershaw

Thanks, Bob. As Ron mentioned, we had a strong first quarter with double-digit revenue growth in Building and Specialty. Overall, our revenue in Q1 was up 9% to $993 million versus $913 million in the same quarter of last year. West Coast hospitality and gaming projects and tunnel projects and Hurricane Sandy work on the East Coast all created the increased activity that was offset by reduced activity on mining and civil projects from our Midwest subsidiaries and in Iraq on the containerized housing project. Our gross profit in the first quarter was $100 million, which is up 16% from $86 million in the first quarter of last year, meaning our margin was 10.1% this year, up 70 basis points from the 9.4% of last year.

Our SG&A is down this year from $69 million to $64 million, a 7% reduction. It was generally driven by the lower labor as a result of headcount reductions and reduced carrying costs over the year. As a result, our income from construction operations in the first quarter was up $36 million, 113% increase from $17 million in the first quarter of last year. Our operating margin at 3.6% was up 170 basis points from last year's 1.9%, and it was our strongest first quarter operating margin since 2010.

Net income this year was $15 million versus, on a GAAP basis, a loss of $1 million last year. You may recall last year, we had some adjustments for non-GAAP related to our auction rate securities and to a tax impact related to compensation-based expenses. After adjusting for those, our profit was $4 million last year. So our diluted EPS this quarter was $0.31, which is up 288% from last year's $0.08.

Overall, our first quarter results were stronger than expected and continue to show the directional trend that we have anticipated. As a reminder, from our guidance press release, as is typical in our business, our earnings in 2013 are expected to be weighted towards the second half of the year.

Backlog remains stable as we await bookings of the 2 mega-scale civil awards and other projects. Our backlog volume, as Ron indicated, is understated comparably with the way we normally handle those projects because of the subcontracts that are being retained by our customer that would normally flow through to us.

In the Building segment, our revenues for the quarter were $414 million, which is up 21% from last year's $341 million and is up a bit from Q4. The increase from last year is primarily due to the continued ramp-up of the hospitality and gaming projects that Ron mentioned in California, Arizona and Nevada. And our income from construction operations this year is $4 million versus a loss of $9 million last year. This is generally driven by the increased revenue that we discussed, some gross profit improvements in some of our other segments, the Sandy-related work activity that continued into this quarter and a decrease in G&A, that's primarily due to the staff reductions and reduced carrying costs. Our operating margin in Q1 was 1% versus a loss of 2.6% in the first quarter of last year.

Our Civil segment revenues were $233 million in the quarter, down 7% from last year's $249 million. The decrease is due to reduced activity on some of the mining and civil projects in our Midwest subsidiaries, which was partially offset by the progress earned on the tunnel project in Washington. Our income from construction operations remained strong at $22 million, up 28% from last year's $17 million. And the increase is due to the progress on our tunnel project in Washington, some higher-margin pipeline work in the Midwest, and that was partially offset by some unfavorable closeout adjustments on some Midwest mining projects. But our operating margin remains good at 9.3%. It's up 250 basis points from last year's 6.8%, and it reflects continued strong profitability for this segment.

Our Specialty Contractors segment. Revenue was up 300 -- to $302 million. That's up 13% from last year's $267 million. That's basically driven by the increase in the Sandy-related projects in New York for this last quarter. Our income from construction operations at $19 million was down slightly from last year's $20 million. That's a 2% drop, and a slight decrease is due to reduced activity on a number of smaller projects in some of our other business units in Specialty, but that was mostly offset by the Sandy-related projects and some reduced G&A expenses. Our operating margin in the first quarter of 6.4% was down from last year's 7.4% but it's in line with the margin expectations that we've always had for this segment.

On Management Services, our revenue is down at $45 million. That's down 19% from last year's $55 million. And this decrease is due to some reduced activity on the Iraq containerized housing project and on several surety projects. But our income from construction operations went up $3 million -- to $3 million from $2 million. That's a $1 million or 49% increase, and that's due to some favorable performance on an aircraft parking apron project in Guam, related to -- also to some favorable adjustments on a number of other projects and lower G&A that was partially offset by the reductions in activity that we talked about earlier. Our operating margin at 6.3% is 290 basis points up from last year's 3.4%.

In other expenses, our depreciation and amortization expense was $14 million. That's down a little bit from last year's $16 million. Our interest expense remains flat this year over the last year at $11 million. Our income tax expense is $9 million this year versus $5 million of last year. That's basically caused by the higher income for this quarter. And our effective rate was 38% for the quarter, but we're still forecasting 40% for our effective rate for 2013.

On the balance sheet, our working capital at the end of the quarter was $828 million. That's up $80 million from year end. That's about 11% increase, and it includes our cash and cash equivalents of $132 million versus $168 million at the end of last year. Our current ratio increased to 1.67 from 1.61. We used $84 million on cash from operating activities in the first quarter compared with $25 million last year. Our total debt at the end of the quarter was $804 million versus $737 million. Debt-to-equity ratio is at 0.69 versus 0.64 at the end of the fourth quarter. If you were to look at that on a year-on-year basis, the decrease in our debt-to-equity ratio is due to the goodwill impairment that we took partway through last year.

So with that, I'll now turn the call over to Ron for closing comments.

Ronald N. Tutor

Thanks, Mike. To say we're euphoric about learning within a period of 5 days that we were the best value low bidder on the California High-Speed Rail at $985 million and the low bidder on the San Francisco subway system at $840 million, with both projects appearing to go to awards and notice to proceed very rapidly, to say the least, we were excited across the whole level of the company. These projects, in addition to our existing backlog in the Civil business, puts us in an extraordinary position to maintain a stable and significant revenue over the next 4 to 5 years as we attempt to add to these awards with other opportunities as they arise. We expect this sort of Civil growth to continue as I see no end in sight to the opportunities the government continues to put before our industry, again, with the limited expertise available in projects of this size and complexity. After the horrific year of 2012, I'm extremely encouraged by our Building segment, not only in its return to profitability, but the continued opportunities we are able to propose on and what we believe will be further awards this year that will begin to build that segment's backlog.

Our Civil segment, as you might expect, will have a stronger second half with 2 major projects commencing work, I believe, in July and August. And our Specialty Contractors group, needless to say, just continues to provide constant and continuing contributions to our profitability and supports all our operations in the Building and Civil segments.

This concludes our prepared remarks. We will now ask the operator to open the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Steven Fisher from UBS.

Steven Fisher - UBS Investment Bank, Research Division

Good to see you getting back to profitability in the Building segment. I assume that you expect this to be the low point of the Building segment earnings for the year. So if you could confirm that. And then with just booking the fees only on Hudson Yards, should we assume that, that should push your margins at least to the 2% or maybe beyond what you called out as the max margin for that segment last quarter?

Ronald N. Tutor

Yes, that is the maximum. It's kind of an oddity and the first time we've ever had to deal with it. I guess 2% on 2% is 100% profit. But yes, you're right, the only thing that's different is, we have our 2% fee on Tower C, but having just been awarded the $143 million subcontract on the concrete frame and a $56 million electrical subcontract, at times, it's even confusing to me because we are now generating competitive fees on those other subcontracts, that although they're not a part of the construction management at-risk fee, it still all goes into the same company pot. So if that doesn't confuse you a little, I don't know what does.

Michael J. Kershaw

Yes. But the electrical ones, Steve, will flow through the Specialty Group.

Ronald N. Tutor

Through the Specialty Group.

Michael J. Kershaw

Concrete will flow through the Building.

Ronald N. Tutor

Yes, it will flow in parallel through the Building Group.

Michael J. Kershaw

Right, right.

Steven Fisher - UBS Investment Bank, Research Division

I guess as long as you build it well, that's all that matters.

Ronald N. Tutor

As long as it drops to the EPS, that's all we care about.

Michael J. Kershaw

Yes, I mean, one other thing, Steve, that we talked about earlier is the impact of Sandy on Q1 is across many of the segments. So that won't be recurring in the subsequent periods.

Steven Fisher - UBS Investment Bank, Research Division

Okay. Over to the high-speed rail, obviously, good to see that award. The media certainly presents that there are still challenges ahead on that. How are you thinking about some of those issues that have been raised? And what have you assumed in your guidance for that project, as well as the San Francisco subway project?

Ronald N. Tutor

Well, we had nothing in our guidance previously on either project. Obviously, at some point, that may change. We have nothing in the guidance previously stated. And irrespective of our beloved media, who, if they could, would be cynical and negative on Christmas and Thanksgiving, they're going to move forward. That project is funded. I have no doubts, and I'm sure the governor's office and high-speed rail has less. I believe they're going to the board tomorrow and briefing them and have tentatively told us that they're hoping to be able to get an award in June. We don't see any issues. In fact, in my discussions with them, they were almost euphoric to get it off and running. The fact that we met their budget, on and on. And the San Francisco project, in our discussions, since we were low bidder, doesn't seem to be any issues, and they're looking for an end of May award. So that's all we know. We're very optimistic that they'll both go to award quickly, notices to proceed so we can get started in the third quarter.

Steven Fisher - UBS Investment Bank, Research Division

Okay. One -- just last high-level for me. There's clearly a lot of project-specific bids and prospects that you guys have. I'm just wondering, if you take a step back, do you think you're seeing a broad pickup in the pace of building construction markets around the country? Now that you have multiple geographies, I'm wondering if you can offer sort of a higher level perspective as to what you're seeing in the building marketplace.

Ronald N. Tutor

Well, since I seem to have the misfortune of traveling to all our offices and talking to all our people, New York City is the strongest market in the U.S. right now, particularly with respect to the Building business. And I believe that our building of Hudson Yards through an outstanding developer like Related has really helped us break into that market. However, in Florida, we're very optimistic. Our backlog there has doubled, almost tripled. We see more opportunities coming there. Our Rudolph and Sletten subsidiary in California is optimistic and continues to add to their backlog. I don't think there's any question. From the year we had in 2012, which produced a loss, we see 2013 returning to some significant level of profitability, with '14 even better. I'm very encouraged by what I'm seeing in the Building business, particularly in light of the abysmal year we had in 2012.

Operator

[Operator Instructions] Your next question comes from the line of John Rogers from D.A. Davidson.

John B. Rogers - D.A. Davidson & Co., Research Division

Just on the -- in terms of the $3.7 billion worth of pending awards on Hudson Yards, do you expect that, that will be booked in the same manner that this first tower is? In other words, you will just be getting the fees on that? And do you have...

Ronald N. Tutor

No. The platform we expect, which is depending on which scope between $600 million and $700 million, we expect to do that on a not-to-exceed guaranteed maximum price. So that would go to backlog. However, my understanding is that Tower A, which is well upwards of $1.2 billion, the residential and mixed-use towers and the retail complex will all be done under the same scenario where we get our fees but Related retains all of the subcontracts even when we're the subcontractor. So I'm afraid that, that will continue in most of that backlog. It's just -- it's harder to track for you as it sometimes is for me on revenue, the profitability of the Building side. You almost have to have a dual track. The normal revenue and the profit it produces in the Hudson Yards, CM, where we are literally on an open-end cost plus without risk. However, the profit doesn't track any revenue you can follow. You almost have to take our potential earning and timeline it over the calendar days in the job. So if we're going to make $20 million on the job and the job is 36 months, that's probably the only way you can track it.

John B. Rogers - D.A. Davidson & Co., Research Division

Okay. And the Specialty Contracting opportunities is a portion of that?

Ronald N. Tutor

Well, yes, we are quoting the electrical. We are quoting the mechanical. We quote the foundation work with our drilling company, and of course, we quote the concrete work with our Building Group. So we have the CM at-risk, and you're right, and then we look for these additional opportunities, which on the first big tower, we were successful to the tune of $200 million of awards on an $800 million contract.

John B. Rogers - D.A. Davidson & Co., Research Division

I mean, does that imply that there's $800 million or $1 billion of Specialty opportunity or subcontract opportunity...

Ronald N. Tutor

There are those opportunities moving forward. I think the 25% to 30% is accurate. Of course, there's no guarantee we can continue to be low bidder, but we will be proposing on all of it.

John B. Rogers - D.A. Davidson & Co., Research Division

Okay. And then the other question I had is just the increase in receivables that you had on the quarter, fairly significant from what you had -- from year end. Is that timing on a specific project? Or is that the Sandy work or...

Ronald N. Tutor

The biggest part of it is the Sandy work. I think Mike can correct me if I'm wrong, but we literally did over $100 million worth of work, and it was due. But as in most situations in New York, pay is slow. I think they owed us over $80 million.

Michael J. Kershaw

Yes, that's right. It was a big increase quarter-over-quarter for -- and some of that is now come in, in Q2. Some of it is still to come.

Ronald N. Tutor

And we still haven't even been paid for all of the Sandy work, if you can imagine, and it's May.

John B. Rogers - D.A. Davidson & Co., Research Division

Okay. But the collections on that should be in the next quarter or 2, you would expect?

Michael J. Kershaw

The next quarter or -- a quarter or 2, yes. Most of it should come through.

Ronald N. Tutor

It better be in this quarter, by God.

Michael J. Kershaw

A chunk of it is coming through this quarter, and there's still some to come for the last few billings that are going out.

Ronald N. Tutor

I mean, after all of this, they're all signed tickets, time and material, it's just getting them to process and pay. And we try to be patient, but enough is enough.

John B. Rogers - D.A. Davidson & Co., Research Division

Okay. And the last question I had was relative to the Management Services work for Sandy, what specifically are you trying to do there or...

Ronald N. Tutor

Bob, you want to respond?

Robert Band

Yes, John, this is Bob. Both the U.S. Coast Guard and the U.S. Fish and Wildlife Services have been funded up to $500 million in total combined for Sandy relief work. So we're one of the leading task order contractors for both of those programs, and we are waiting the Request for Proposal. So as soon as I know what shape and form that work looks like, we'll be able to let the public know, too.

John B. Rogers - D.A. Davidson & Co., Research Division

But Bob, do you what kind of work it would be? I mean, is it...

Robert Band

Well, the Coast Guard is mostly, obviously, the waterfront, both land side and water side work. Fish and Wildlife can be anything from a National Park Service to any of the agencies. So I'd suspect that some of it will relate to National Park Service work.

Ronald N. Tutor

John, it might interest you, this is Ron Tutor, to know that the state of New Jersey is out for proposals for construction managers on a very large Sandy-related repair program in New Jersey, recognizing that although we did all of this work in New York, there really wasn't none to speak of done in New Jersey.

John B. Rogers - D.A. Davidson & Co., Research Division

Okay. Well, hopefully -- yes, hopefully, that's showing up soon.

Ronald N. Tutor

It is.

Operator

Ladies and gentlemen, that concludes the Q&A portion of the conference. I would now like to turn the conference over to Mr. Ronald Tutor for any closing remarks.

Ronald N. Tutor

Having no further remarks, we thank everybody for joining us.

Operator

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.

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