Hudson Yards - Multiple Projects - New York, NY - Total $2.3 Billion

Tutor Perini Reports First Quarter 2018 Results

  • New awards of $2.2 billion, the largest volume of quarterly new awards in more than six years
  • Backlog of $8.5 billion, a record high, with 53% of backlog comprised of higher-margin Civil projects

LOS ANGELES--(BUSINESS WIRE)-- Tutor Perini Corporation (NYSE: TPC), a leading civil, building and specialty construction company, today reported results for the three months ended March 31, 2018. Revenue for the first quarter of 2018 was $1,028.2 million compared to $1,117.4 million for the first quarter of last year. The revenue decrease was primarily attributable to various electrical projects in New York that are completed or nearing completion, as well as reduced project execution activity on a large tunnel project on the West Coast that is also nearing completion. Net loss attributable to the Company for the first quarter of 2018 was $12.1 million, or $0.24 per diluted share, compared to net income attributable to the Company for the first quarter of 2017 of $13.8 million, or $0.27 per diluted share. The results for the first quarter of 2018 were negatively impacted by an unfavorable pre-tax charge of $17.8 million (an after-tax impact of $12.7 million, or $0.25 per diluted share), which was due to the unexpected outcome of an arbitration decision related to a subcontractor dispute on a Civil segment project in New York that was completed in 2013. The volume reduction mentioned above also contributed to the lower net income for the first quarter of 2018.

Backlog as of March 31, 2018 was $8.5 billion, a record high, and up 18% compared to $7.2 billion as of March 31, 2017. New awards and adjustments to contracts in process totaled $2.2 billion in the first quarter of 2018. Significant new awards included the previously announced $1.4 billion Newark Liberty International Airport Terminal One Design-Build project, a government office building project in California valued at $215 million, and various electrical projects in New York and in the western and southern United States collectively valued at $147 million.

Demand for Tutor Perini’s construction services remains strong, especially in the civil and specialty end markets. Subsequent to the first quarter, the Company was identified as the low bidder on several new civil projects, including the $800 million Southwest Light Rail Transit (METRO Green Line Extension) project in Minneapolis, a $109 million tunneling project in Los Angeles and a $93 million bridge project in New York City. The Company anticipates booking the contract awards for these projects as soon as the second quarter of 2018.

“Our earnings for the first quarter of 2018 were below expectations, largely because of the unexpected arbitration decision. However, we anticipate that stronger performance later this year should offset the weakness experienced this quarter,” remarked Ronald Tutor, Chairman and Chief Executive Officer. “Our record backlog and $1 billion of pending civil awards reflect our continued success in capturing significant project opportunities. We believe that we are well positioned to win even more, sizable civil awards as long-term funding is released, which should result in continued backlog growth.”

Outlook and Guidance

Based on the current backlog and market outlook, the Company is affirming its guidance for 2018, with diluted earnings per share (EPS) expected in the range of $1.90 to $2.30. As previously noted in our earnings release for the fourth quarter and full year 2017, earnings in 2018 are anticipated to be weighted towards the second half of the year, consistent with the cyclicality of the Company’s business.

First Quarter Conference Call

The Company will host a conference call at 2:00 PM Pacific Time on Wednesday, May 9, 2017, to discuss the first quarter 2018 results. To participate in the conference call, please dial 877-407-8293 five to ten minutes prior to the scheduled time. International callers should dial +1-201-689-8349.

The conference call will be webcast live over the Internet and can be accessed by all interested parties on Tutor Perini's website at To listen to the webcast, please visit the Company's website at least 15 minutes prior to the start of the call to register and to download and install any necessary software. For those unable to participate during the live call, the webcast will be available for replay shortly after the call on the website.

About Tutor Perini Corporation

Tutor Perini Corporation is a leading civil, building and specialty construction company offering diversified general contracting and design-build services to private clients and public agencies throughout the world. We have provided construction services since 1894 and have established a strong reputation within our markets by executing large, complex projects on time and within budget, while adhering to strict quality control measures. We offer general contracting, pre-construction planning and comprehensive project management services, including the planning and scheduling of the manpower, equipment, materials and subcontractors required for a project. We also offer self-performed construction services including site work, concrete forming and placement, steel erection, electrical, mechanical, plumbing and heating, ventilation and air conditioning (HVAC). We are known for our major complex building project commitments, as well as our capacity to perform large and complex transportation and heavy civil construction for government agencies and private clients throughout the world.

Forward-Looking Statements

The statements contained in this release, including those set forth in the section “Outlook and Guidance,” that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including without limitation, statements regarding the Company’s expectations, hopes, beliefs, intentions or strategies regarding the future and statements regarding future guidance or estimates and non-historical performance. These forward-looking statements are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. While the Company’s expectations, beliefs and projections are expressed in good faith and the Company believes there is a reasonable basis for them, there can be no assurance that future developments affecting the Company will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the Company) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, inaccurate estimates of contract risks, revenue or costs, the timing of new awards or the pace of project execution; the requirement to perform extra, or change order, work resulting in disputes or claims, which may adversely affect our working capital, profits and cash flows; unfavorable outcomes of existing or future litigation or dispute resolution proceedings against project owners, subcontractors or suppliers, as well as failure to promptly recover significant working capital invested in projects subject to such matters; a significant slowdown or decline in economic conditions; increased competition and failure to secure new contracts; client cancellations of, or reductions in scope under, contracts reported in our backlog; actual results could differ from the assumptions and estimates used to prepare financial statements; failure to meet contractual schedule requirements, which could result in higher costs and reduced profits or, in some cases, exposure to financial liability for liquidated damages and/or damages to customers; failure of our joint venture partners to perform their venture obligations, which could impose additional financial and performance obligations on us, resulting in reduced profits or losses; decreases in the level of government spending for infrastructure and other public projects; inability to retain key members of our management, to hire and retain personnel required to complete projects or implement succession plans for key officers; failure to meet our obligations under our debt agreements; possible systems and information technology interruptions; failure to comply with laws and regulations related to government contracts; inclement weather; conversion of our outstanding Convertible Notes that could dilute ownership interests of existing stockholders and could adversely affect the market price of our common stock; the potential dilutive impact of our Convertible Notes in our diluted earnings per share calculation; economic, political and other risks, including civil unrest, security issues, labor conditions, corruption and other unforeseeable events in countries where we do business, resulting in unanticipated losses; impairment of our goodwill or other indefinite-lived intangible assets; and other risks and uncertainties discussed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on February 27, 2018. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Tutor Perini Corporation
Condensed Consolidated Statements of Operations
    Three Months Ended March 31,
(in thousands, except per common share amounts)     2018     2017
REVENUE $ 1,028,156     $ 1,117,361
COST OF OPERATIONS       (961,088 )   (1,014,641 )
GROSS PROFIT 67,068 102,720
General and administrative expenses       (67,993 )   (65,703 )
Other income, net 780 417
Interest expense       (15,065 )   (15,564 )
Income tax benefit (provision)       4,268     (8,106 )
NET INCOME (LOSS) (10,942 ) 13,764
BASIC       49,814     49,282  
DILUTED       49,814     50,948  
Tutor Perini Corporation
Segment Information
    Reportable Segments
    Specialty     Consolidated
(in thousands)     Civil   Building   Contractors   Total   Corporate   Total
Three Months Ended March 31, 2018                                      
Total revenue $ 325,400 $ 490,617 $ 274,801 $ 1,090,818 $ $ 1,090,818
Elimination of intersegment revenue       (62,286 )     (376 )         (62,662 )           (62,662 )
Revenue from external customers     $ 263,114     $ 490,241     $ 274,801   $ 1,028,156     $     $ 1,028,156  
Income (loss) from construction operations $ 2,839 $ 6,425 $ 7,235 $ 16,499 $ (17,424 ) (a) $ (925 )
Capital expenditures $


$ 278 $ 419 $


$ 77 $


Depreciation and amortization(b) $ 5,756 $ 481 $ 1,112 $ 7,349 $ 2,838 $ 10,187
Three Months Ended March 31, 2017                                      
Total revenue $ 338,108 $ 515,251 $ 315,696 $ 1,169,055 $ $ 1,169,055
Elimination of intersegment revenue       (33,533 )     (18,161 )         (51,694 )           (51,694 )
Revenue from external customers     $ 304,575     $ 497,090     $ 315,696   $ 1,117,361     $     $ 1,117,361  
Income from construction operations $ 31,888 $ 5,242 $ 14,762 $ 51,892 $ (14,875 ) (a) $ 37,017
Capital expenditures $ 5,567 $ 45 $ 6 $ 5,618 $ 54 $ 5,672
Depreciation and amortization(b) $ 16,318 $ 518 $ 1,192 $ 18,028 $ 2,968 $ 20,996
(a) Consists primarily of corporate general and administrative expenses.
(b) Depreciation and amortization is included in income from construction operations.
Tutor Perini Corporation
Condensed Consolidated Balance Sheets
    As of March, 31   As of December 31,
(in thousands, except share and per share amounts)     2018   2017
Cash and cash equivalents ($52,871 and $53,067 related to variable interest entities (VIEs)) $ 174,340 $ 192,868
Restricted cash 4,090 4,780
Restricted investments 53,161 53,014
Accounts receivable ($28,076 and $30,003 related to VIEs) 1,236,818 1,265,717
Retainage receivable ($18,627 and $12,410 related to VIEs) 530,897 535,939
Costs and estimated earnings in excess of billings 980,896 932,758
Other current assets ($30,093 and $0 related to VIEs)       132,298       89,316  
Total current assets       3,112,500       3,074,392  
PROPERTY AND EQUIPMENT, net of accumulated depreciation

of $328,443 and $359,188 ($25,072 and $11,641 related to VIEs)

473,178 467,499
GOODWILL 585,006 585,006
OTHER ASSETS       48,877       47,772  
TOTAL ASSETS     $ 4,308,129     $ 4,264,123  
Current maturities of long-term debt $ 27,165 $ 30,748
Accounts payable ($9,183 and $19,243 related to VIEs) 659,290 699,971
Retainage payable 246,033 261,820
Billings in excess of cost and estimated earnings ($199,618 and $120,952 related to VIEs) 508,616 456,869
Accrued expenses and other current liabilities       118,334       132,438  
Total current liabilities       1,559,438       1,581,846  
LONG-TERM DEBT, less current maturities, net of unamortized

discounts and debt issuance costs totaling $43,064 and $45,631

790,119 705,528
OTHER LONG-TERM LIABILITIES       166,205       163,465  
TOTAL LIABILITIES       2,622,525       2,559,343  
Stockholders' Equity:
Preferred stock - authorized 1,000,000 shares ($1 par value), none issued
Common stock - authorized 75,000,000 shares ($1 par value),

issued and outstanding 49,913,003 and 49,781,010 shares

49,913 49,781
Additional paid-in capital 1,087,164 1,084,205
Retained earnings 606,199 622,007
Accumulated other comprehensive loss       (43,596 )     (42,718 )
Total stockholders' equity 1,699,680 1,713,275
Noncontrolling interests       (14,076 )     (8,495 )
TOTAL EQUITY       1,685,604       1,704,780  
TOTAL LIABILITIES AND EQUITY     $ 4,308,129     $ 4,264,123  


Tutor Perini Corporation
Condensed Consolidated Statements of Cash Flows
    Three Months Ended March 31,
(in thousands)     2018     2017  
Cash Flows from Operating Activities:  
Net income (loss) $ (10,942 ) $ 13,764
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation 9,301 20,110
Amortization of intangible assets 886 886
Share-based compensation expense 6,081 4,306
Change in debt discounts and deferred debt issuance costs 2,927 3,836
Deferred income taxes 186 (526 )
Loss (gain) on sale of property and equipment 1,471 (131 )
Other long-term liabilities 1,139 (1,824 )
Other (180 ) 267
Changes in other components of working capital       (84,272 )     (73,533 )
NET CASH USED IN OPERATING ACTIVITIES       (73,403 )     (32,845 )
Cash Flows from Investing Activities:
Acquisition of property and equipment excluding financed purchases (19,970 ) (5,672 )
Proceeds from sale of property and equipment 3,303 259
Investment in securities, restricted (3,288 )
Proceeds from maturities and sales of investments in securities       3,007        
NET CASH USED IN INVESTING ACTIVITIES       (16,948 )     (5,413 )
Cash Flows from Financing Activities:
Proceeds from debt 665,000 313,977
Repayment of debt (586,559 ) (296,485 )
Issuance of common stock and effect of cashless exercise (2,308 ) (10,809 )
Distributions paid to noncontrolling interests (5,000 )
Debt issuance and extinguishment costs             (57 )
Net decrease in cash, cash equivalents and restricted cash (19,218 ) (31,632 )
Cash, cash equivalents and restricted cash at beginning of period       197,648       196,607  
Cash, cash equivalents and restricted cash at end of period     $ 178,430     $ 164,975  
Tutor Perini Corporation
Backlog Information
New Awards in the Recognized in the
Backlog at Three Months Ended Three Months Ended Backlog at
(in millions)     December 31, 2017   March 31, 2018(a)   March 31, 2018   March 31, 2018
Civil $ 4,118.2 $ 620.3 $ (263.1 ) $ 4,475.4
Building 1,701.4 1,025.9 (490.3 ) 2,237.0

Specialty Contractors

      1,463.8     576.0     (274.8 )     1,765.0
Total     $ 7,283.4   $ 2,222.2   $ (1,028.2 )   $ 8,477.4

(a) New awards consist of the original contract price of projects added to our backlog plus or minus subsequent changes to the estimated total contract price of existing contracts.

Source: Tutor Perini Corporation

Tutor Perini Corporation

Jorge Casado, 818-362-8391

Vice President, Investor Relations & Corporate Communications

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