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Executives

Ken Burk – EVP and CFO

Ron Tutor – Chairman and CEO

Robert Band – President

Analysts

Richard Paget – Morgan Joseph

John Rogers – D.A. Davidson

Steven Fisher – UBS

Avi Fisher – BMO Capital Markets

Ben Wyoming [ph] – Bishop Pearson & Co. [ph]

Tutor Perini Corporation (PCR) Q3 2009 Earnings Call Transcript November 5, 2009 4:30 PM ET

Operator

Good day, ladies and gentlemen, and welcome to the third quarter 2009 Tutor Perini Corporation earnings conference call. My name is Anne and I will be your coordinator for today’s call. (Operator instructions) As a reminder, this conference is being recorded for replay purposes. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session following the presentation.

I would now like to turn the presentation over to Mr. Ken Burk, Executive Vice President and Chief Financial Officer. Please proceed, sir.

Ken Burk

Good afternoon, everyone. Thank you for joining us on Tutor Perini's third quarter 2009 conference call. With us today are Ronald Tutor, Chairman and CEO and our President, Robert Band.

Before we start, I would 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 risks 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, 2008, our definitive proxy statement filed on April 17, 2009 as well as in today’s news release.

Our statements on this call are made as of today, November 5, 2009, 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 Ron Tutor.

Ron Tutor

Thanks, Ken. Good afternoon, everyone and thank you for joining us on the call today. This quarter we generated momentum in our civil group with a 51% growth in civil backlog. We expect that by year end it should be double what it was at then end of 2008. This is continuing evidence that our strategy to grow our civil business will provide or – will position the company for long-term growth and provide a more diversified base of business in both the public and private sectors while achieving a better balance between building and civil markets.

We ended the quarter with a backlog of $4.9 billion for the total company. The awards this quarter include a $240 million solar panel manufacturing plant in California, a $178 million civil infrastructure project at the World Trade Center site in New York City, and a $124 million segmental bridge in Northern California for Caltrans.

Currently we have approximately $2.1 billion of pending awards with customers who have indicated their preference for us to build their projects. We recently were the low bidder at $215 million for the Caldecott Tunnel project near Oakland in California and expect an award shortly.

In addition, we are in negotiations for a contract to build a correctional facility in Pennsylvania with an approximate value of $400 million. We expect both of these projects to end our backlog in the fourth quarter. With the exception of certain gaming and hospitality awards that have financing contingencies, most of the other pending awards should enter our backlog over the next few quarters.

As we look ahead to 2010, our civil business is expected to continue to provide us with best growth opportunities. Our recent number of wining bid combined with a number of very attractive bidding prospects indicate that approximately 40% of our operating income in 2010 could be delivered from the civil group. This is up from 20% estimated for 2009. We estimate the size of prospective opportunities in our civil infrastructure target market for road, bridges and mass transit projects to be $2.4 billion for the remainder of 2009 and $18.7 billion for 2010.

In spite of the sluggishness in the non-residential building markets, we have seen some bright spots wherein Rudolph and Sletten, the Silver Project, an $85 million research facility in Northern California and Keating in addition to the correction facility was awarded a $62 million Casino in Pennsylvania.

Fortunately, we are able to leverage the strength of our building group as we pursue large public works projects without diluting our focus on existing private clients. For the building group, we have identified and our continuing to track approximately $20 billion in targeted projects, most of which could be bid and proposed in 2010. A significant portion of this market, and I add a significant portion much more than in the past, is in the public sector and including education, municipal office and transportation buildings, healthcare, industrial building and certain gaming and hospitality possibilities outside the State of Nevada.

Las Vegas continues to be a depressed market for new construction. With the exception of the eventual completion of projects like Ochoa [ph] and Fontainebleau which have been stopped, it is likely to take years before any significant building resumes in Las Vegas.

Regarding the Fontainebleau Hotel, the owner has filed for bankruptcy in June and it appears the court is moving towards conducting an auction sometime after the first of the year. MGM City Center will begin its phased opening this month, and we will be finished in the first quarter of 2010 on schedule.

Cosmopolitan should be completed later in 2010. Neither projects have we experienced any funding issues or slow payments to date. McCarran Airport Terminal 3 continues to be an outstanding project for us, and continues to generate results better than expected. The project is scheduled to be completed in the fourth quarter of 2011 till the first quarter 2012 in that timeframe.

As for management services, we continue to look forward to demonstrating our leadership position in Guam. We are finally beginning to see some of the larger proposal opportunity surface, which should contribute to earnings in a more meaningful way in the second half of 2010. Bob Band will cover more details about our prospect for management services in a few minutes.

Last quarter, we showed our improvement in backlog profit margins as evidenced with our strategy to self perform a higher content of work and grow our public works and civil business is in fact taking hold. We have improved our total backlog profit margin to 8.1% from a pre-merger margin of 4.3%. And contributing significantly to this increase is a shift in our contract backlog mix towards public works.

Our current backlog mix by customer type is approximately 53% public and 47% private compared with 12% public and 88% private before the merger.

Now, I would like Rob Band to share more details of our Management Services Group, Bob?

Robert Band

Thanks, Ron. The strategic realignment of U.S. forces including the relocation of 8000 U.S. Marines and their dependant from Okinawa to Guam is starting to generate large project opportunities for the company. Our team will submits its proposal to the US Navy later this month for a indefinite delivery and definite quantity, IDIQ contract, the Navy intends to award at least three IDIQ contracts covering a base year and full one-year option periods. Total value of all awards under this contract is a maximum of $4 billion.

The work under this project will include loss repairs in new construction, aircraft parking aprons, taxiways, runways and hangers as well as general and special purpose buildings. Selection is anticipated for early 2010.

In addition, separate competitive construction opportunities on Guam for infrastructure utilities, housing, medical, education and other facilities were anticipated throughout 2010 and 2011 and beyond.

Regarding work in Iraq and Afghanistan, it continues on a very competitive basis. Perini Management Services was recently awarded a $12 million overhead cover project in Iraq. We were also recently awarded a $500 million maximum value IDIQ contract by the US Coast Guard which covers a base year and six one-year option periods. It is anticipated that this contract will generate new work opportunities beginning in 2010.

We were recently advised by the US Fish and Wildlife and Department of the Interior that PMSI was included among four competitors, short listed for a multi-year design build, multiple award task order contract, a Mattock [ph], the East territories of the US.

Total approximate value of work in the East is $1 billion to be shared by the two contractors to be selected in December of 2009. We are tracking significant US Department and State and Defense projects expected to be bid in 2010 as well as private work through surety and multinational clients.

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

Ken Burk

Thanks, Bob. Our net income was $26.7 million for the third quarter of ‘09 as compared to net income of $34.1 million for the third quarter of ‘08. Diluted earnings per share were $0.54 for the third quarter of 2009 as compared to $1.01 for the third quarter of 2008.

On a pro forma basis including Tutor-Saliba, net income and diluted earnings per share for the third quarter of ‘08 were $30 million and $0.59 respectively. We ended the third quarter with a backlog of 4.9 billion, the breakdown by business group of our backlog at September 30, 2009 as is follows

Building $3.8 billion, civil $863 million, management services $199 million. The breakdown of backlog by end market type is as follows: The building group, gaming and hospitality $1.1 billion, transportation facilities $900 million, healthcare $766 million, municipal buildings $537 million, industrial buildings $243 million, education $141 million and other buildings $134 million.

For the Civil Group, mass transit 488 million, bridges $204 million, highways and other civil $171 million. Management services backlog is predominantly all government contracts.

In the third quarter of 2009, revenues were $1.17 billion, a decrease from $1.41 billion reported in the third quarter a year ago. On a pro forma basis including Tutor-Saliba revenues were $1.65 billion for the third quarter of ‘08. On a reportable segment basis, revenues from our building group were $1 billion, a decrease of 21% and $1.3 billion in the third quarter of ‘08. The reduction in revenue is a result of reduced volume of new awards in the group and completion of large hospitality and gaming work compared to third quarter of ‘08.

Revenues from our civil group were $72.6 million, which decreased 2% from $74.1 million reported in the third quarter of ‘08.

With a significant increase in civil group backlog in the third quarter of this year, we expect a significant civil revenue growth beginning in the fourth quarter of this year. Management services revenues were $78.4 million for the quarter up 77% from $44.2 million a year-ago. This is a favorable result. This favorable result can be attributed to the increase of work in Iraq and Guam, in the addition of Black with the merger.

Our total gross profit was $85.4 million compared to $85.5 million in the third quarter of ’08. Our total gross margin – profit margin increased 20% to 7.3% from 6.1% in the third quarter of ’08. The increase in margin is a result of a higher mix of public works projects and a higher content of self-performed work.

General and administrative expenses were $42.9 million, up 29% from $33.2 million in the third quarter of ’08. The increase in expenses was primarily due to a partial period of Tutor-Saliba corporate G&A in the third quarter of ’08 and one-time charges for integration of Tutor-Saliba and acquisition related expenses. Through our integration efforts this year we estimate that we have reduced our G&A for 2010 by $12 million.

We had income from construction operations of $42.5 million in the third quarter of ’09, a 19% decrease from $52.3 million in the third quarter of ’08. Overall, our operating margin decreased from 3.7% to 3.6% year-over-year primarily due to the increased G&A expenses I mentioned earlier.

Building group income from construction operations for the quarter was $38.8 million, an increase of 10% from $35.2 million in the third quarter of ’08. This increase was due primarily to the improved profit contribution from the McCarran Airport and the addition of Keating this year.

Civil group income from construction operations were 6.3 million, and in the third quarter of ’09, a decrease of $3.7 million from $10 million in the third quarter of ’08.

This decrease is primarily due to the $5.3 million in favorable close-out profit recognition, the projects in Q3 ‘08 that did not occur in the same period this year.

Management Services income from construction operations was $8.5 million in the third quarter of '09, a decrease of 30% from $12.1 million in the third quarter of ‘08. The decrease, again, is primarily due to favorable closeout for projects in Afghanistan during last year in Q3 which did not occur again in this period for 2009.

Other income was $474,000 in the third quarter of 2009 compared to $2.7 million in the third quarter of ’08. This was due primarily to lower interest earnings on available cash that was invested in 2009. Interest expense increased to $2 million in the third quarter of ’09 from $1.1 million in the third quarter of ’08 due primarily to higher average debt balance during the third quarter of ’09.

The provision for income taxes was $14.3 million compared to $19.8 million in the third quarter of ‘08. The decrease is primarily result of adjustments between the tax provision and tax returns for the prior year.

Looking at our balance sheet, at September 30, 2009, our working capital stood at $283.6 million, up from $225 million at December 31, 2008. This represents a current ratio of 1:19 to 1.

As of September 30, 2009 we had $335.7 million in cash and cash equivalents compared to $386.2 million at December 31, 2008. The decrease in our cash balance at September 30th is primarily due to the completion schedule of hospitality and gaming projects.

At September 30, 2009 long-term debt excluding current [ph] portions stood at 85.9 million compared to 61.6 million in December 31, 2008. The increase is primarily due to the financing of transportation equipment.

At September 30, 2009, we had $241.6 million available under our credit facilities.

Guidance for 2009 is estimated to be within the ranges previously provided, which is revenues are estimated to be in the range of 5 billion to 5.5 billion and diluted earnings per share are estimated to be in the range of $2.60 to $2.70 per share. We are initiating guidance for 2010 with revenues estimated to be in the range of $3.7 billion to $4.2 billion and 2010 diluted earnings per share estimated to be in the range of $2.40 to %2.60 per share.

With that, I’ll turn the call back over to Ron for his closing comments.

Ron Tutor

Thanks, Ken. As we look forward, we expect continued integrating and leveraging our resources across all of our operations as we execute our strategy to grow our civil group and be a more vertically integrated company. We have generated momentum with our Civil Group quarter, and we expect to continue of this business into the foreseeable future.

We will continue to place greater emphasis on earning higher margin, and we will come through this year, in my opinion a much stronger and even more diversified general contract.

Despite of the ongoing economic challenges and softness in the credit markets, we remain confident in our strategy of long-term growth potential as one of the very fewer general contractors with size and scale to deliver the largest of civil and/or building works regardless of their complexity.

That concludes our prepared remarks. Rob Band and Ken Burk, and I will now take your questions.

Question-and-Answer Session

Operator

(Operator instructions) And the first question comes from the line of Richard Paget with Morgan Joseph. Please proceed.

Richard Paget – Morgan Joseph

Good afternoon, guys.

Ken Burk

Hi, Richard.

Richard Paget – Morgan Joseph

I wondered if you could give us an update about the bid market, if you’ve seen any changes or is it still the case that just given the large project focus that you guys have, you are not seeing as many bids at the table, has it gotten more competitive at all over the last quarter or so? And then with you guys starting to book more contracts, do you think that is particularly in this quarter just reflective of kind of the inherent lumpiness of construction awards or is the actual large project market starting to heat up more?

Ron Tutor

I would say it started with a large project market, it’s definitely heating up. That’s put undated with major project opportunities. We typically do not even follow or look at the civil work projects under a $100 million unless there is something specific and complicated about – if it gets our interest. We think at least what I can see this as Ron Tutor over the next 12 to 18 months. Our plate will be full of opportunities to compete and bid upon. So, we really believe that we can continue this momentum in civil work and continue to build that sector up to where it becomes significant fees [ph] of Tutor Perini moving forward.

Secondarily, going back to your question on how we see the competition, I will answer it the same way I did a year ago and six months ago. There are no new large entrees into the major civil work business. If I major, I am talking about those projects in a $175 million, $200 million and up. Be it 400, 500, there are only, to be every benefit of that maybe 10 to 12 in the United States both financially and physically qualify to bid those.

Our Caldecott Tunnel project that we were low bid out of four bidders contained us and three other joint ventures. That’s typical of what we bid against us and three other bidders, four bidders, two bidders, three bidders. There are no new entrees [ph]. It is the same people we were bidding against the year ago, and in most cases five year ago. It is unlike the building business which requires very limited capital and mostly subcontracted work performance. Our civil sector operates on requiring a large amount of capital as well as the equipment and the expertise to self perform the work is separated. That’s why our margins are significantly higher. I hope I answered it.

Richard Paget – Morgan Joseph

Yes, thanks. And how should we think about City Center as it winds down? Are there going to be any major adjustments one way or the other, once you guys have finalized the contract?

Ron Tutor

When I meet with the principles of MGM every three weeks, I would like to believe by the integrity and the process that I have witnessed that there is not going to be anything extraordinary. We continue to get paid on a very timely basis. We continue to work through the issues with the principles of MGM on a very business like basis. And I have no reasons to believe that it won’t be amicably concluded.

Richard Paget – Morgan Joseph

Okay. So, were there any incentive awards for timing or completions?

Ron Tutor

No, the only thing you get from the Las Vegas Casino is when you get done on time in spite of all their changes, you get three attaboy [ph] and you get paid.

Richard Paget – Morgan Joseph

Okay. I’ll get back in queue. Thanks.

Operator

And the next question comes from the line of Avi Fisher with BMO Capital Markets. Please proceed.

Ron Tutor

Avi isn’t there.

Operator

Okay, the next question comes from the line of – just one moment please.

Ron Tutor

We lose Avi?

Operator

Avi? The next person is John Rogers with D.A. Davidson. Please proceed.

John Rogers – D.A. Davidson

Hi, how are you?

Ron Tutor

Hi, John.

Ken Burk

Hi, John

John Rogers – D.A. Davidson

Couple of things. First of all, in terms of what you have in backlog right now relative to your revenue expectations for the fourth quarter and specifically in the 2010, is all of that work booked now? In other words if you need to book a lot more work to hit those numbers, and if you get any of this work in Guam or some of the other additional civil work, is there an upside to these numbers or – or is that more out into 2011?

Ken Burk

Hi John, it’s Ken Burk. I think it’s fair to say as we have always done, we do a bottoms up forecast which obviously starts with our existing book of business and backlog. And then we do layer in assumptions based on the current market conditions of new work expectations.

So, to answer your question for 2010, in particular, we do have assumptions of new business that needs to be acquired to be able to achieve the results that we have given guidance for.

Ron Tutor

For 2009…

Ken Burk

For 2009 is also – we have very little profit that we need, if at all, to be able to achieve our estimates for 2009.

John Rogers – D.A. Davidson

Okay. And then is it relates to your cash, Ken, you said at the end of the quarter it was $335 million?

Ken Burk

Yes, that was – yes it was right at 336, I believe.

John Rogers – D.A. Davidson

Okay. And you as you finish off, I guess, especially City Center and I don’t know if you build ahead on Cosmo as well, does that cash continue to come down or are we bottoming out here?

Ken Burk

We are bottoming out. There is not going to be a continued depletion. We are so close to the end of City Center and it on an audible basis. Very little of any reductions will take place. If anything, we are getting significant cash flow from new civil work. I don’t see that dropping off.

John Rogers – D.A. Davidson

Okay. And then, I guess, just finally in terms of the Guam business, you mentioned that some of the awards potentially will show up and or got a bit late this year in first part of 2010. Bob, did you say when the work actually would begin on some of those – especially the large task orders?

Robert Band

Well, in this Mac [ph] contract on Guam, the proposal includes a priced sheet [ph] projects. So one of the awardees will get that project right off the bat, and then the rest – work will flow, but again, it's probably going to flow later in ‘10 and ‘11 than earlier.

John Rogers – D.A. Davidson

Okay.

Robert Band

And our forecast anticipates that type of flow.

John Rogers – D.A. Davidson

Okay. I am sorry, one other thing, Ron, on the acquisition front, obviously a lot of things lately over last year, what are your thoughts there now?

Ron Tutor

We are opening our eyes to potential for another significant acquisition in 2010. We haven’t been actively in the market this year as we frankly work very hard in accomplishing this integration, and really truly refocusing the entire direction of Tutor Perini. But we talked the other day, I believe, 2010 we will look to make another strategic acquisition that further strengthens us. If there is one out there, we will find it, we are looking.

John Rogers – D.A. Davidson

Great. I will get back in queue. Thanks.

Operator

And the next question comes from the line of Steven Fisher with UBS. Please proceed.

Steven Fisher – UBS

Hi, good afternoon.

Ken Burk

Hi, Steve.

Steven Fisher – UBS

Just on the guidance, you can give us a sense of whether it’s going to be more backend loaded or evenly spread throughout the year?

Ken Burk

That quarterly – Steve, as you know we don’t give the quarterly guidance. We give a full year guidance and, as I indicated to John earlier, we do have the tendency to get new business revenue and profit, so I really can’t give you anymore guidance in that which I am doesn’t surprise you?

Steven Fisher – UBS

Okay, I just still wanted to know if there any particular quarters where you know there is going to be some specific closeouts that we should be aware award as City Center.

Ron Tutor

Not that would swing necessarily the profit margins; I think based on the way we’ve got these things loaded. I mean, we indicated earlier we are going to see a very nice increase. I think it almost doubled in the fourth quarter of this year for civil with the new business that we have. So you are going to see a very nice growth in revenues and profitability in civil starting in the fourth quarter and you will see it very significantly in 2010.

Steven Fisher – UBS

And on that point, you mentioned that civil could be about 40% of the profits in 2010. I mean, can you give us any sense what either of the other segments could be, I guess, I only need one?

Ron Tutor

Well, we mentioned in our press release that over half of the profit is going to be generated from management services and civil.

Steven Fisher – UBS

Okay.

Ron Tutor

And we are obviously trying to share and demonstrate just the balance and the progress that we made with implementing our strategy to not only diversify, but to generate a higher margin content.

Steven Fisher – UBS

And Bob, the Guam contract that you mentioned, I am assuming that is going to be funded by the U.S. government, so can that go ahead without the funding contributions of the Japanese. It sounds like there might be some uncertainties there, but I am wondering if USPs can go forward without the Japanese funding?

Robert Band

Yes, that’s correct. That can go forward.

Steven Fisher – UBS

Okay, that’s good. And then I guess just lastly here a clarification on the Caldecott project – you mentioned as $214 million I saw in the results that it was, if there is a second component to it they could take it up to $257 million. I am just wondering what that – and other components?

Rob Bank

That’s really a misnomer the way Caltrans is certain of their big civil projects they call it an A+B where you could scheduled at a predetermined rate. You really don’t get paid any of that. It’s only for a bid comparison purposes. Though you see another $40 million component, it's not real dollars. It’s really the $240 plus that will be awarded.

Steven Fisher – UBS

Okay. And actually, if I could just get one more in the correctional facility is that a fixed price and would it have the same vertical integration that civil projects have?

Rob Bank

Yes, it is a fixed price but we would not be doing anywhere near the significant amount of work and that we would do on a civil project. It would be more along the lines of a traditional building project where we did certain of the work in sub contract the (inaudible).

Steven Fisher – UBS

And then, how competitive was the bidding on that one relative to kind of a small cluster you see on civil projects?

Rob Bank

We have four bidders on a $400 million job. So, really the reality is once you get up to a certain size even in the building business the competition drops off, because they require significant financial guarantee, as well as typically prequalification in that you perform work of that magnitude. Although, there is more builders than civil work companies the sky gets verified, the bigger and bigger and more complicated the buildings goes is evidence when we bid the Terminal 3 job at McCarran Airport, which is probably the biggest public building bid in the U.S. to date that was $1.2 billion, there was only one other bid.

Steven Fisher – UBS

Okay. Good. Thanks a lot.

Operator

And the next question comes from the line of Avi Fisher with BMO Capital Markets. Please proceed.

Avi Fisher – BMO Capital Markets

Hello. Can you hear me now?

Ron Tutor

Yes, we can hear you.

Rob Bank

Yes, we can hear you.

Avi Fisher – BMO Capital Markets

I hope you guys are doing okay. Thanks for taking my question. Just like McCarran burned about $100 million of revenues in the quarter, is this the ongoing ramp revenue on the project? Last quarter you talked about regarding closer to steel erection (inaudible) they want to really speed up?

Ron Tutor

First, I believe that we did more than $100 million.

Avi Fisher – BMO Capital Markets

Okay.

Ron Tutor

We are billing right now at about $45 million a month. And, the steel erection was completed in July. If you flown into Las Vegas the cladding is ongoing, it’s my belief that it will be fully clad and closed by the first quarter of 2010 and the billing continues to ramp up. We are ahead of schedule and doing extremely well with respect to both schedule and cost.

Avi Fisher – BMO Capital Markets

On the day you said when it would open that, I think you said early 2012 or late 2011? When is your completion date expected?

Ron Tutor

I can’t remember the exact month. All I know is we are about four months ahead of schedule.

Avi Fisher – BMO Capital Markets

Because I knew you were ahead of schedule and then it seems like –?

Ron Tutor

We are, but even that’s conservative. I am not certain we are not further ahead of schedule and then remember with a job of this size there is a physical completion of the work. When we accomplish all our costs and in effects into on a percentage of completion, once you complete your costs you earn all your profit. Then, for the next four to six months you have startup, testing and turnover, where over that six months period you got a certificate and occupancy you are essentially done, but you spend $3 million, $4 million over that six months to turn it over to the owner. So there’s really two types of completion. The substantial completion where the work is done and the ultimate turnover that’s a result of the startup testing and commissioning.

Avi Fisher – BMO Capital Markets

And what happens to the margins once the substantial is done, does the project substantially stop going to the P&L or is it –?

Ron Tutor

At that point you’ve earned all your profit basically, Avi.

Avi Fisher – BMO Capital Markets

Okay, that’s helpful. Thanks. And then Bob, in terms of the work you are doing in Afghanistan, if I recall your margins in the Iraq overhead work were really substantial, part of that, as I understand was from obviously in the contingencies on some of the security work. Are the contingencies the same in Afghanistan as they were in Iraq?

Robert Band

Well, we are pretty much complete on all work in Afghanistan with just the closeout of one job left to go. So I’d say we are pretty much seeing most of the uptick from Afghanistan. Of course, Iraq is still ongoing. Significant work in Iraq is still ongoing.

Avi Fisher – BMO Capital Markets

And have the contingencies in Iraq changed?

Robert Band

No, we still have contingencies on the work.

Avi Fisher – BMO Capital Markets

Okay. And then, are there any – in terms of the City Center project, are there any awards or lump sum benefits associated with that completion?

Ron Tutor

No.

Avi Fisher – BMO Capital Markets

Okay and thanks. And then what about in terms of other one-time issues, the cost of the associated move, cost associated with the move to LA?

Ron Tutor

It’s baked in, it’s done.

Avi Fisher – BMO Capital Markets

It's done. That’s already out of it.

Robert Band

Right.

Ron Tutor

Yes.

Avi Fisher – BMO Capital Markets

And what was the impact this quarter?

Ron Tutor

We had – we didn’t really break down the – but we have one-time charges of about a $1.3 million this quarter for integration, from severance and things like that. That’s all, but let’s not just relate it to any kind of move, that’s the move which is more of the symbolic element of the headquarters in Los Angeles now.

Avi Fisher – BMO Capital Markets

All right. And then in terms of Ochoa had this testimony associated with Nevada construction. I know you guys weren’t named in that at all, but is there any, have you been contacted by them regarding that, are you involved at all in any way that you could talk about –?

Ron Tutor

Well, let me put it this way. They haven’t contacted our main office, and if they’ve spoken to our Nevada operation, they haven’t made me aware of it.

Avi Fisher – BMO Capital Markets

All right. Okay, again, it was mostly to do with the Ochoa administrative stuff, I just wanted to know if they had contacted you by now?

Ron Tutor

No.

Avi Fisher – BMO Capital Markets

And then, you won’t – it seems like when I do my channel checks it seems like you won every award you bid on. Were there a substantial number of awards you bid on that you did award winning?

Ron Tutor

Sure, we bid – we bid on $80 million highway job or I should say we bid at $70 million highway job and everybody else bid at 50. So, we just don’t publicize when we get B.

Avi Fisher – BMO Capital Markets

Right, of course. And then…

Ron Tutor

That was a number of civil jobs, and it’s typical when we get into this smaller more competitively bid job. There was a job in San Francisco, closed by the IAD [ph] job we just completed. And we bided, and I think there were 10 bidders in fray, the bids ranged from $50 million to $67 million. So, I believe in that when we were eighth out of eleven.

Avi Fisher – BMO Capital Markets

Got you. Yes, highly competitive.

Ron Tutor

When you get down in to that level where you have very good family businesses and local and regional companies, it’s just another world as opposed to high risk $200, $300, $400 million jobs which is a totally different character of contract.

Avi Fisher – BMO Capital Markets

Got you. And who is the owner of the Pennsylvania Correctional Facility? Is that a private company or–?

Ron Tutor

No, it is the State of Pennsylvania.

Avi Fisher – BMO Capital Markets

State of Pennsylvania. And, just two other quick questions. What were the receivables at the end of the quarter, do you have that number here?

Ron Tutor

I think we were at a $1.272 billion.

Avi Fisher – BMO Capital Markets

And the reason I am asking this, it seems like receivables really jumped in I think in 3Q ‘08, was that associated with the acquisition with McCarran?

Ron Tutor

That’s incorrect. Are you comparing it year-over-year?

Avi Fisher – BMO Capital Markets

No, it’s from 2Q to 3Q ‘08, I am sorry.

Ron Tutor

From ‘08?

Avi Fisher – BMO Capital Markets

Yes, in 2Q it was a $1 billion and 3Q is $1.5 billion.

Ron Tutor

Avi, why don’t we talk – if you have any follow-up let’s talk on that?

Avi Fisher – BMO Capital Markets

Okay. And that’s all the questions I have. I appreciate your time. Thank you.

Ron Tutor

Bye, bye.

Operator

(Operator instructions) And the next question comes from the line of Ben Wyoming [ph] with Bishop Pearson [ph] and Company. Please proceed.

Ben Wyoming – Bishop Pearson & Co.

Hi. I was just wondering the move to Los Angeles from Massachusetts, what impact did it have on the personnel that has been in place in Massachusetts headquarter which – have large turnover, lots of people lost?

Ron Tutor

No, actually quite the contrary. We still maintain our operation our Management Services business which is run by Bob Band, our President. We have very little headcount reductions in Birmingham [ph] framing him as a result of the move. We still have an operation in Birmingham.

Ben Wyoming – Bishop Pearson & Co.

And one other thing, how about the stimulus package that was passed recently, what impact, if any, did it have on your company?

Ron Tutor

Nothing of any substance yet. We believe it’s getting out into the marketplace more and more, but we really haven’t seen major impacts yet. We are looking, we will looking for it over the next three to six months because many of our public owners are relying on stimulus funds to partially fund matching State and counties for some very large work we’re tracking. So, I think the stimulus funding being delivered to the various states is just about beginning to hit now, which will even open up more projects to bid.

Ben Wyoming – Bishop Pearson & Co.

Good, thank you.

Ron Tutor

Government moves slowly, as we all know.

Ben Wyoming – Bishop Pearson & Co.

Okay, very good. Thank you.

Operator

Ladies and gentlemen, this concludes today’s question and answer session. I would now like to turn the call back over to Mr. Ken Burk for closing remarks.

Ken Burk

I don’t have any closing remarks. Ron, do you have anything?

Ron Tutor

Thank you, everybody. We’ll catch you on the next quarter. Thank you.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect. Have a good day.

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Source: Tutor Perini Corporation Q3 2009 Earnings Call Transcript

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