Jorge Casado - Vice President of Investor Relations & Corporate Communications Ronald N. Tutor - Chairman and Chief Executive Officer Michael J. Kershaw - Chief Financial Officer and Executive Vice President

Alexander J. Rygiel - FBR Capital Markets & Co., Research Division John B. Rogers - D.A. Davidson & Co., Research Division Cleve Rueckert - UBS Investment Bank, Research Division Nicholas Chen

Good day, ladies and gentlemen, and welcome to the Tutor Perini Corporation Third Quarter 2014 Earnings Conference Call. My name is Manny, and I will be your coordinator 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, Vice President of Investor Relations. Please proceed.

Good afternoon, and thank you for your interest and participation today. Joining us on the call are Ronald Tutor, Chairman and CEO; and Michael Kershaw, Executive Vice President and CFO. Before we discuss our results for the third quarter, I would like to remind everyone that during today's call, we will be making forward-looking statements which reflect our current analysis of existing trends and information. There is an inherent risk that actual results and experience could differ materially. You can find a discussion of our risk factors, which could potentially contribute to such differences, in our most recent Form 10-K, which was filed on February 24, 2014. With that, I will turn the call over to our Chairman and CEO, Ronald Tutor. Ronald N. Tutor: Thanks, Jorge. Good afternoon, and thank you, all, for joining us. I am pleased to report that we had a solid third quarter with strong revenue and backlog growth across all our segments compared to last year. Our work on many recently awarded civil and building projects continues to accelerate. The strong momentum of new awards has also continued with several large new projects booked during the third quarter, details of which I will provide later. Our backlog increased 17% year-over-year due to a high volume of Civil and Specialty awards. Backlog has increased for 6 consecutive quarters and it remains at the highest levels since 2008. Unlike our backlog back then, which was dominated by lower-margin building projects, more than 70% of our current backlog today is comprised of Civil and Specialty projects, which, of course, command higher margins. Now I will provide you with an update on some of our larger key projects underway. At Hudson Yards in New York, there is a significant amount of work in process with more work to start in 2015. Our Civil projects, namely the Amtrak tunnel and the platform over the Eastern Yard, are both progressing well. We are very close to completion of the initial scope of work for the Amtrak tunnel project, with tunnel work completed inside the Eastern Yard and in the final stages of backfill and utility work with a limited amount of track work to follow. We are working 7 days a week on a platform project and have completed the installation of 155 out of a total of 253 caissons to bedrock and steel erection work has commenced and is currently 15% complete. This platform is scheduled to complete in June of 2016, but we believe a significant portion of it will complete by the end of 2015. With portions of that platform nearing completion, our building group is now commencing the start of the maintenance of equipment building on the platform. Our work on the South Tower continues to advance with concrete framework completed now up to the 18th floor. The South Tower is scheduled to complete the end of 2015. In addition, we have recently begun pre-construction activities and are getting started with foundation work on the residential Tower D, which will be a condominium located west of the South Tower C at the Northeast corner of 30th Street and 11th Avenue. Finally, we have begun procuring subcontractors for the retail gallery, and we expect to get notices to proceed for Towers D and E in the retail gallery over the next several quarters. Our Civil Group has increased its work on the San Francisco MTA stations project, and work has recently commenced on the awarded JFK Runway reconstruction project in New York City. We began work on the JFK project in September and is expected to be a relatively quick burn project that should hopefully be substantially complete prior to the end of 2015. We are also commencing work on the New York MTA East Side Access CM006 and on several large bridge projects in the Upper Midwest all awarded over the past several months. On our Seattle SR99 project, our joint venture, Seattle Tunnel Partners, has begun excavating the 120-foot deep shaft that will be used to access and remove the TBM cutter head for repairs and enhancements by Hitachi Zosen over the next 2 to 3 months. During shaft construction, drilling difficulties, obstructions and government approvals have delayed the shaft excavation. The repairs and testing needed to restart the tunneling operation are now expected to take until February or March of next year. Our focus remains on having these repairs concluded and getting the TBM tunneling again as expeditiously as possible. Concurrently, many elements of the civil work at the 2 tunnel portals have continued and are finishing on schedule. I'm also very pleased to report that we have made positive progress on a number of open litigation issues. With particular interest to me personally is the settlement we just achieved with the Massachusetts Highway Department on the Central Artery project, the litigation of which has been ongoing for some 12 years. We have reached an agreement where they will pay us $88.7 million, with tentative payments scheduled prior to December 1 with mechanics in place that, should it take longer, interest will accrue. On the MGM Harmon Tower litigation, the trial has commenced with the jury's selection process. I still have some hopes for a settlement resolved, but having started the litigation, that settlement begins to dim. Next, I will share information about our recent new orders, backlog and pending awards. In the third quarter, we had $1.6 billion of new awards and adjustments to existing contracts for an overall book-to-bill of 1.26. We ended the quarter with backlog of $8.1 billion, up $1.2 billion compared to the third quarter last year. Our backlog mix is now 48% Civil, 27% Building and 25% Specialty. Our pending awards at the end of the third quarter were $4.1 building -- $4.1 billion, excuse me. Majority of these pending awards are within the Building division. Civil group had new awards and adjustments totaling $661 million at end of the quarter with a backlog of $3.9 billion compared -- up 23% compared to last year. The largest Civil awards included the $243 million JFK Runway project as well as 3 new bridge projects for Lunda Construction in Wisconsin and Minnesota valued at $181 million. In addition, Black Construction, our Guam-based construction unit booked 7 task orders for projects in Diego Garcia collectively valued at more than $33 million and a dump cleanup on the island of Saipan in the amount of $21 million. The Building Group had new awards and adjustments totaling $593 million and ended the quarter with a backlog of $2.2 billion, up 5%. Their largest awards included the $211 million Washington Hospital expansion project in Rudolph and Sletten in California, and $112 million Chumash Casino Resort expansion. The Building Group continues to have several large pending awards, certainly including the approaching phases of the Hudson Yards development, which as mentioned earlier, we expect to be booked in the backlog as they are awarded over the next few quarters. In addition to Hudson Yards, there continue to be a number of pending awards for several building projects under negotiation including 2 large mixed-use condominium projects in South Florida, other hospitality and gaming develops in the Northeast and various other projects in various stages of conclusion. The Specialty Contractors Group had new awards and adjustments totaling $318 million and ended the quarter with a backlog of $2 billion, up 20% to last year. Significant new awards included 8 electrical projects totaling $81 million for Five Star Electric with 3 electrical projects totaling $46 million for Fisk in Texas and 2 mechanical jobs projects for Desert Mechanical at the Transbay Center totaling $28 million. In addition, Fisk has an 18 -- excuse me, has an $87 million pending award for electrical work at the Transbay project in San Francisco, which is expected to be booked in the fourth quarter. Next, I will discuss our bidding opportunity. The Civil group continues to see a very strong pipeline of in excess of $10 billion of prospective work to be bid and awarded over the next 12 months. The largest of these prospects continues to be construction packages 2 and 3 of the California High-Speed Rail. Last week, our joint venture team led by Tutor Perini and including Zachry and Parsons submitted its proposal for this project. The scope of work is essentially to design and construct the next 65 miles of railway civil infrastructure, extending south of Fresno to the county border of Kern County in Bakersfield. We're competing against 2 other European-led teams and expect the winning bidder to be announced before the end of the year. Other Civil projects include approximately $5 billion in various highway, airport and mass transit jobs in addition to $2 billion in various bridge jobs currently being reviewed. The Building markets continue to be strong, particularly in regions where we have a strong local presence. For example, the New York Building Congress recently issued its New York construction outlook for the years 2014, '15 and '16, which points to construction activity levels approaching the previous heights reached during the boom years of 2007 and 2008, driven by unprecedented surge in high-end residential construction as well as continued strength in the commercial and government sectors. The report forecast strong multi-year growth in construction spending in New York City with more than $100 billion projected to be spent over that 3-year period alone. The Building Group continues to see a $12 billion pipeline of prospective work to be bid and awarded over the next 12 months. We continue to await the Port Authority's announcement regarding its team selection for the LaGuardia Central Terminal Building Replacement Project, which represents our largest individual prospect. Other prospects include the usual hospitality, gaming, condominiums and commercial projects. Specialty Contractors Group continues to have a very strong $5 billion pipeline of prospective opportunities over the next 12 months including projects for various transit and governmental agencies and the usual public agencies, building owners and developers. Based on our current backlog and outlook, we are maintaining our guidance for fiscal year 2014 with revenue expected to be between $4.5 billion and $4.7 billion and diluted earnings per share expected in the range of $2.20 to $2.40. The earnings per share guidance assumes a tax rate of 40%, 49 million average diluted shares outstanding, $40 million of depreciation expense and $17 million of amortization. I will now turn the call over to Michael Kershaw to go over the details of our financial results. Michael J. Kershaw: Thanks, Ron. Revenue this quarter was up 21% from last year's $1.03 billion to $1.25 billion, mainly because of increased activity on Civil and Building projects at Hudson Yards in New York, certain electrical and mechanical projects on the East Coast, certain bridge projects in the Midwest and New York and large mass transit projects in California and New York. This was offset by decreased activity that we had last year on hospitality and gaming projects across multiple states and healthcare projects in California. Our gross profit at $141 million was up 17% from last year's $121 million, and while our gross profit margin was down 40 basis points from the 11.7% to 11.3% last year, we continued to improve our profitability. SG&A was down $7 million from last year's -- up from $7 million from last year's $63 million to $70 million. Our income from construction operations was up 21% from last year's $58 million to this year's $70 million. Our operating margin at 5.6% was consistent between with both years with net of -- net income being $36 million this year versus $24 million last year. Our EPS is up 49% at $0.73 this year versus last year's $0.49. Third quarter revenue was in line with our internal expectations, and our GAAP EPS results were ahead of expectations. We continued strong operating performance in Civil, improving profitability in the Building segment, offset by our lower-than-expected profitability in parts of our Specialty Contractors business. As a reminder, our backlog volume is understated by about $400 million at this point due to the construction management not-at-risk work associated with Hudson Yards. In our Civil segment, revenue was up 21% at $483 million this year versus last year's $398 million. Because of increased activity on civil projects at Hudson Yards, both the Amtrak tunnel and the Hudson Yards platform that Ron spoke about earlier, certain bridge projects in the Midwest and New York, and large mass transit projects in California and New York, offset by the decreased activity this year in certain tunnel project in the West Coast and some highway projects on the East Coast. Our income from construction operations for this year was up 8% at $54 million versus $50 million last year driven by the revenue changes that we talked about earlier. Our operating margin was lower by 140 basis points this quarter at 11.1% versus 12.5% last year, and that was mainly because of the reduction and decreased activity on certain tunnel projects last year. For the Building segment, our revenue at $412 million was up 19% from last year's $345 million because of the increased activity that we have on the mixed-use facility projects, not only in New York in Hudson Yards, but also in California and Louisiana, an industrial project in California and increased recoveries -- estimated recoveries projected for Building segment project because of our agreements that we're reaching with our customer. This was partially offset by the previously mentioned decreased activity on hospitality, gaming and healthcare project. As a result, our income from construction operations at $19 million was up 50% from last year's $13 million. Our operating margin of 4.7% is up 100% -- 100 basis points from last year's $3.7 million driven by the factors that we talked about above. Our Specialty Contractors revenue this year is up 24% at $356 million versus last year's $288 million because of increased activity on various mechanical projects on the East Coast, 2 signal system modernization projects in New York and various electrical projects in New York and the southern U.S., partially offset by decreased activity on various electrical and mechanical projects in the World Trade Center in New York. Our income from construction operations was up 17% at $11 million versus last year's $9 million, mainly driven by those revenue changes that I mentioned. Our operating margin at 3.1% is down 10 basis points but pretty consistent with last year's 3.2%. Our margin is still running below expectations for this segment. Performance on 2 of our smaller Specialty businesses has improved year-over-year, and we continue to focus on improving margins at one of our New York units. In other expenses, our depreciation and amortization expense this year was $12 million, down 15% from last year's $14 million. Our normal quarterly run rate, however, is in the range of the $14 million and $15 million range that we talked about in our guidance. As Ron mentioned, we anticipate $57 million of depreciation and amortization for this year compared with $59 million last year. Our interest expense year-over-year was consistent at $11 million. Our income tax expense, of course, was higher because our income was higher. It was $23 million versus $13 million last year. Our effective tax rate this year is 39%, which is comparable to what we're expecting to project for the rest of the year at 40%. Last year's 35.8% tax rate benefited from some favorable discrete items that we had last year and the fact that this year, we have greater activity and higher state tax jurisdictions. On the balance sheet, our working capital at September this year was $1.1 million -- billion, sorry, up $373 million from last year's $787 million. Our cash is up a little bit at $137 million versus $120 million, and our project related working capital increased this year from the end of last year as a result of increased activity across all of our segments. We used $82 million in cash from operating activities this quarter versus $28 million generated in the third quarter of last year, and this was generally due to timing of collections across all of our segments. Our debt at September 30 this year was $946 million, compared with $734 million at the end of December. I'll turn the call back over to Ron for closing comments. Ronald N. Tutor: Thank you, Michael. Overall, we are pleased with our performance in the third quarter and the year-to-date as we continue to grow our backlog and increase our revenue and the profitability that flows with it. I'm particularly pleased with the fact that we are resolving long-standing disputes, and as a result, time for management will be better focused on the backlog and the work at hand and get us out of the litigation business. As we continue to stay in a marketplace that is particularly well-suited to the larger contractors with limited competition, we're pleased with what we see as the future for our company. This concludes our prepared remarks. We'll now ask to open the call for questions.

[Operator Instructions] Our first question is from Alex Rygiel of FBR. Alexander J. Rygiel - FBR Capital Markets & Co., Research Division: Ron, could you give us a little bit more detail on the status of LaGuardia? And also, encapsulate that with the recent proposal to possibly tie that project in with a bigger project that would encapsulate JFK? Ronald N. Tutor: Well, first, I believe, although I've been led to believe every month for 3 months that they're going to make a decision by the November board which is, I think, either the 17th or the 20th, the last Thursday of the month, so I'm in hopes that frankly, this decision get made so we know where we stand. As far as the talk about somehow tying it in to the balance of redo, I believe what they said, or at least my interpretation and my feedback, is they're going to go ahead with LaGuardia, but in as much as they are going to create a new LaGuardia, at least to the extent of the scope contained within our proposal, they want to carry that same method. And if need be used P3 to clean up the balance of LaGuardia, which as you may or may not know, the proposal we have before the Port of New York does not completely rebuild the entirety of LaGuardia but just the main terminal. So my take is they're talking about extending that to the balance of LaGuardia after this is awarded and possibly taking that P3 of finance design build operate over to JFK. That's my read on it, but politics in New York is such God only knows where it will go. Alexander J. Rygiel - FBR Capital Markets & Co., Research Division: And since we got into politics, can you quickly offer up your view on how this election could possibly affect civil infrastructure opportunities over the next couple of years, if it all? Ronald N. Tutor: I really don't know. You mean, you're talking about the federal actions where the change in the senate and the like? Alexander J. Rygiel - FBR Capital Markets & Co., Research Division: Exactly. Ronald N. Tutor: I really don't know. As long as I've been in business, which has been a long time, whether Republicans are in power or the Democrats are in power, we still build bridges, we still build freeways, there's still gas taxes. My take is I really can't intelligently comment other than it always seems we're still building bridges and freeways.

The next question is from John Rogers of D.A. Davidson. John B. Rogers - D.A. Davidson & Co., Research Division: A couple of things, and I apologize, Ron, total pending awards was how much? Ronald N. Tutor: What was it? $4 billion? Michael J. Kershaw: $4.1 billion. Ronald N. Tutor: It was a little over $4 billion. John B. Rogers - D.A. Davidson & Co., Research Division: Okay, and that's mostly in the Building segment. I know... Michael J. Kershaw: Correct... Ronald N. Tutor: Probably, $3 billion plus. Michael J. Kershaw: Yes. A big chunk of that, as you know John, is the remaining parts of Hudson Yards. Ronald N. Tutor: Which should all go by next summer. John B. Rogers - D.A. Davidson & Co., Research Division: Okay. And the improved margins in the Building segment, is that a function of the Hudson Yards work where you're serving as the construction manager or you're collecting fees on it? Is that what's pushing those margins up? Or was there... Ronald N. Tutor: Part of the reason -- yes, because we're realizing, as we try to point out, we're realizing what I determined to be minimal fees but with essentially no revenue. So those fees get credited to the balance of revenue and artificially inflates of them. However, I might add that we -- the whole industry is beginning to raise its fee structure from the depths of where we work 2 years and 3 years ago to something more sensible, which of course in the Building business, might mean a half a point to a point, unlike the Civil business. John B. Rogers - D.A. Davidson & Co., Research Division: Okay. And then lastly, as you start to look at your schedule of work in the 2015, I realize the Seattle job, presumably, you get tunneling again hopefully into the second quarter. But -- and then you got -- you'd be ramping up on High-Speed Rail, San Francisco as some of the -- as the Amtrak tunnel runs off. But it seems that you've got a pretty good visibility in the Civil side right now. In the Buildings market, is that stable? Or is that continuing to grow with the project list you have now? Ronald N. Tutor: I think the Building business continues to grow, but John, as smart as you are and you studied our numbers, they maybe 25% to 30% of our revenue. But they contribute something in the order of magnitude of 10% of our profits. We will continue to stay as a strong building contractor with all our history and our people and our commitments. But this company has been driven by its Civil and Specialty sectors for the last 5 years and will continue to be, and we will continue to grow that. We have an extremely strong position nationally in the civil markets. I believe we're 1 of 2 or 3 that are, by far, the largest, and I think we'll continue to grow that sector and continue to take a significant role. John B. Rogers - D.A. Davidson & Co., Research Division: And, Ron, do you have to book a lot more civil work now to grow revenue in 2015? I know beyond 2015. Ronald N. Tutor: No. We have such a strong backlog. And remember, we have a very large proposal we just turned in on CP2-3. Hopefully, we'll find out by mid-December. There were only 2 other bidders both led by foreign contractors. We like our chances. It doesn't guarantee anything. But we already have a very strong backlog for 2015 and anything we get now will only enhance it. That plus I'll remind you with all the delays of revenue and profits, on the Seattle Tunnel -- revenue that should have taken place in the ensuing margins for 2014 will now shift into 2015.

[Operator Instructions] The next question is from Steve Fisher of UBS. Cleve Rueckert - UBS Investment Bank, Research Division: This is Cleve Rueckert on for Steve. Just going back to the Seattle Tunnel partners, have you had any update with of who's going to bear the cost of some of those repairs? I know you previously are pretty confident that it would be born by others. But I was wondering if there's been any change that... Ronald N. Tutor: We have continued ongoing negotiations. I probably won't have anything more finite than that until January. Cleve Rueckert - UBS Investment Bank, Research Division: Okay. And then... Ronald N. Tutor: If you could imagine, it's somewhat delicate. Cleve Rueckert - UBS Investment Bank, Research Division: Yes, I suspect. It sounded like in Massachusetts also, you had perhaps some favorable votes supporting casinos in that state. I'm wondering if there's any better visibility at the timing of some of those projects. Ronald N. Tutor: We haven't really aggressively pursued anything in Massachusetts candidly. Since the C11 [ph] job and my interface with Massachusetts government, I declared Perini Corp. and Tutor Perini out of Massachusetts, we won't do business there. I don't know if that attitude will change even though after 11 years, they paid us everything they could have paid us 10 years ago, plus a lot of interest. The fact remains, it's not a place I want to work. Cleve Rueckert - UBS Investment Bank, Research Division: Okay. So with that, where do you feel most confident about driving new awards in the Building segment? Ronald N. Tutor: We have a very large presence in New York City, and we have very heavily strengthened our South Florida operation, moved a lot quality people, executives. I think we will continue to be strong in the West with our Rudolph and Sletten operation as well as our Tutor Perini Building operation in the hotel and casino business. We are a very large player in New York City, thanks to our relationship with the Related and the work at Hudson Yards. And in addition, we are significantly growing our South Florida operations. I've been there twice in the last 6 weeks. I think it's an incredibly strong market where we'll do well.

The next question is from Robert Norfleet of Alembic Global.

This is actually Nick Chen for Rob tonight. We were wondering, you guys have the 2 major mass transit projects in New York right now. Can you just comment on the outlook for future transit projects in 2015? And do you expect backlog in that area to grow? Ronald N. Tutor: Well, they continue to put out to bid the completion of East Side Access. We just quoted a month ago a very significant portion of it. We're waiting to find the results. I think New York Transit has a budget of $2 billion to $3 billion a year over the next 3 years to 5 years, all in the kind of work we do, so we see that is just a continuing strong operation that we take a large role in.

The next question is from John Rogers of D.A. Davidson. John B. Rogers - D.A. Davidson & Co., Research Division: Just one follow-up. The $88.7 million from the Massachusetts Highway Department, does that match your current receivable there? Ronald N. Tutor: It exceeds it. John B. Rogers - D.A. Davidson & Co., Research Division: And so is the excess included in your guidance for earnings? Michael J. Kershaw: And John, that $88 million is at the joint venture level. We... Ronald N. Tutor: It's important for you to know that the $88.7 million, we get 56.7 -- excuse me, 56% of it. Even though I ran the joint venture and achieved the award, we're the managing partner. We've got 56% of it. John B. Rogers - D.A. Davidson & Co., Research Division: Okay. And assuming you collected or... Michael J. Kershaw: We collected it. It's a done deal. Even they can't, as bad as they are, get out of it. John B. Rogers - D.A. Davidson & Co., Research Division: But I just -- I mean, in the fourth quarter, how much of an impact does that have on earnings? Ronald N. Tutor: Nothing.

I would now turn the floor back over to management for any additional or closing remarks. Ronald N. Tutor: Nothing other than we're pleased with the quarter and look forward to the end of the year results and we'll talk to you all later. Thank you.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation.