Jorge Casado - VP, IR and Corporate Communications Ronald N. Tutor - Chairman and CEO Gary G. Smalley - EVP and CFO

Steven Fisher - UBS Alex Rygiel - FBR Sean Eastman - KeyBanc Capital Markets Rob Norfleet - Alembic Global Advisors Brent Thielman - D.A. Davidson Cleveland Rueckert - UBS

Good day ladies and gentlemen and welcome to the Tutor Perini Corporation Fourth Quarter and Fiscal Year 2016 Earnings Conference Call. My name is Manny and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will be opening the call for a question-and-answer session. As a reminder, this conference call is being recorded for replay purposes. [Operator Instructions]. I will now turn the conference over to your host for today, Mr. Jorge Casado, Vice President of Investor Relations. Please proceed.

Good afternoon everyone and thank you for joining us today. With us on the call are Ronald Tutor, Chairman and CEO and Gary Smalley, Executive Vice President and CFO. Before we discuss our results, I will 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 our actual results could differ materially. You can find a discussion of our risk factors which could potentially contribute to such differences in our annual report on Form 10-K which is being filed today February 23, 2017. The company assumes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law. With that, I will turn the call over to our Chairman and CEO, Ronald Tutor. Ronald N. Tutor: Thank you, Jorge. Good afternoon and thank you for joining us. Not a good year operationally in 2016 and certainly better than 2015 where various factors negatively impacted our results across most of our segments. By comparison, 2016 was a more normalized year with no significant project write downs and a return to a more consistent profitability in both our civil and building segments as well as improvement in our specialty contractor segment. Our results for 2016 were as expected and our earnings per share results were within our original guidance at the beginning of the year. In addition we continue to focus intensely on reducing our unbilled costs and of course the ensuing cash collections and have generated the strongest operating cash in the last eight years. We believe that 2017 will again significantly reduce our unbilled costs which of course will generate the cash flow that follows. Gary will provide more details on our financial reports to follow. We are already off to a great start in 2017, the most significant aspect of which is the $1.4 billion Los Angeles MTA Purple Line Section II extension. Los Angeles MTA award is very significant for us and represents the latest high profile project for our civil segment and a major return to the LA subway system that we previously dominated for many years. We expect there will be continuing significant civil project awards to follow in the next several months based on our bid opportunities and proposals currently with owners awaiting a decision. In the Los Angeles MTA award in addition we have been awarded over $104 million for our New York mechanical subsidiary WDF and an $80 million U.S. Air Force contract for PMSI in Saudi Arabia. In addition we have two $500 million proposals in the last stages of presentation with a decision coming in the next 30 days. And if that were not enough we were low bidder on a $293 million subway job and then for the New York City Transit right in the middle of where we're currently building DS179 CMO6 and CMO7 in the middle of the East Side Access in New York City. Over the past year there has been a great deal of discussion for the critical need for significant infrastructure investment. And I would leave that critical need is obvious to all and judging by the current amount of work we're bidding it seems to be a flow unlike any I've seen. I've heard talk about deferring some of the new commitments, the only comment we can make is we bid two $500 million jobs today we're awaiting answers on two other $500 million jobs from December and there isn't a week goes by we're not bidding a major civil project somewhere in the United States. So if our President and our Congress are going to significantly increase civil infrastructure I really don't know what the answer is because right now over the last few months we're operating at about the level of capacity that we have. Capacity meaning estimating of course not awards. So clearly there is significant support for this spending. And given my previous statement we are seeing an unprecedented volume of new civil opportunities that we are continuing to bid on literally an accelerated pace across the country. Our civil segment made favorable progress during the fourth quarter on many large projects including the East Site Access in New York, SR99 in Seattle, High Speed Rail in California, and various in the sundry other major projects. High Speed Rail continues to make significant progress. Last year and this year we are ramped up to even significantly more revenue looking for 2019 completion. SR99 in Seattle has experienced great progress in 2016 and we’re pleased to confirm that we expect a hole through in the tunnel in March which is a significant milestone for that project. With our concrete operations for the double deck highway maintaining pace behind the tunnel boring machine which we expect concrete in the tunnel will be completed in October of 2017 with the completion of the project including commissioning taking place in the early part of 2018. The building segment experienced its tenth consecutive quarter of double-digit revenue growth, much of it coming from numerous projects in California which continues to grow. Top revenue contributors in the fourth quarter including that large we all know who technology facility in Northern California, the Pechanga Resort and Casino in Southern California, the Panorama Tower in Miami, and various other major building facilities. Significant progress has been made on the Panorama Tower in Miami which we expect to top out the 82nd floor by the end of March with an estimated November 2017 completion. Work on the platform at Hudson Yards continues to go well with the completion scheduled at the end of 2017 and Tower D also at Hudson Yards scheduled for completion in early 2019. Especially contractor segment was busy with various projects in the fourth quarter. Major revenue contributors included Five Star Electric work on the CS179 East Side Access Project and the South Ferry Terminal Project, and Fisk Electric's work on the Transbay Transit Center in San Francisco. Demand remains extremely strong for our specialty electrical, mechanical, and short crease services with particular emphasis on the explosive amount of work and demands in New York City. During 2016 we received approximately 3.7 million of new awards and adjustments to each existing contracts mostly in the civil and building segments. These segments are expected to continue contributing to the major share of our new awards in 2017. Our backlog at the end of 2016 was 6.2 billion with more than two thirds of the backlog represented by higher margin civil and specialty work. Beyond our existing backlog the volume of prospective work and bidding activities continues at an unprecedented level all of which supports our long-term outlook for continuing growth and increased profitability. In the fourth quarter the civil segment had new awards and adjustments totaling 281 million and ended with a 2016 backlog of 2.7 billion. Significant new awards included a $97 million airport terminal project at Guam International Airport and 88 million for various bridge projects in the Midwest. We anticipate booking frontier camper share of a joint venture award set for March on a $145 million sanitary sewer tunnel in St. Louis, Missouri. This is in addition to the $1.4 billion Purple Line already awarded in January and more than 1 billion of submitted bids as I said earlier pending decision shortly including the South Capitol Street Bridge, the Canarsie Tunnel, and the Henry Hudson Bridge. I believe I stated earlier, we were low bidder at 293 million on CQ33, a major project for New York City Transit, part of the East Side Access where we already hold $1 billion in existing contracts with New York MTA. The civil segments significant bidding prospects as we go forward would be the next phase of the Purple Line on approximately $1.8 billion stations and puddle job that should bid in the latter part of this year. The $1.5 billion Long Island railroad third rail project in New York which should bid this year, the $1 billion Baltimore and Potomac tunnel replacement project, and the portal bridge replacement in New Jersey. The building segment had new awards in adjustments totaling 289 million in the fourth quarter and ended the year with a backlog of $2 billion. New awards in adjustments included 163 million for three Rudolph and Sletten projects in California and 72 million from the Tropica Tower 1 in Sunrise Florida, the first of 8 Presidential Towers that are expected to be awarded as a part of that package. The building segment significant bidding prospects include approximately $7 billion of opportunities in California, 3 billion more in South Florida, and several large projects in Las Vegas, Nevada. Including $21 billion hospitality and gaming projects, namely Elan and Win hotels, and the $1 billion Raiders [ph] stadium project as well as a $1 billion plus convention center in expansion. Especially contractor segment had new awards and adjustments totaling 207 million and ended 2016 with a backlog of 1.6 billion. Specialty contractors bidding opportunities continue to consist of various electrical, mechanical opportunities mainly in New York and California as they follow our increased growth as a part of our bid deems, as well as keeping up the existing work with our other customers. We anticipate strong revenue growth in 2017 with particular emphasis on the civil group that should have a favorable impact on our operating profit and margin in 2017. Based on our current backlog including the significant new awards booked today together with a volume of prospective opportunities we see we look to 2017 as a very strong year which is reflected in our 2017 guidance. Revenue is expected to be in excess of 5.5 billion and diluted earnings per share is expected to be in the range of $2.10 to $2.40. Gary Smalley will provide the details regarding the assumptions in our guidance. And with that I turn the call over to Gary. Gary G. Smalley: Thank you, Ron and good afternoon everyone. I will start by discussing our results for the year after which I will touch on the fourth quarter. I will then provide some comments on our balance sheet, cash flow, refinancing plans and our 2017 guidance assumptions as Ron just mentioned. Revenue for 2016 was $5 billion up modestly compared to last year and our highest annual revenue since 2009. The civil segments revenue was $1.7 billion down 12% compared to last year mainly due to prior year work completed on the JFK runway project, and reduced activity in 2016 on the Hudson Yards platform. The decrease was partially offset by increased activity on various projects including the SR99 project in Seattle and the California high speed rail project. Building segment revenue was $2.1 billion up 15% compared to 2015. The increase was driven by increased activity on various commercial office, technology, healthcare, retail, and hospitality in gaining building projects in California. Especially contractor segment revenue was $1.2 billion, an increase slightly compared to the prior year. G&A for the year was $255 million up 2% compared to 2015. The slight increase in 2016 was due to increased compensation expense attributable to improved financial results and the hiring of some key executives partially offset by lower legal fees. Our income from construction operations was $202 million nearly double the $105 million reported last year due to improved operating results in all segments. The prior year as you may recall was significantly impacted by adverse charges recorded in each segment. As Ron mentioned we had no significant project write downs in 2016. Civil segment income from construction operations was $173 million up 19% compared to 2015. Recall that in 2015 the segment recorded the Brightwater joint venture non-cash charge of about $24 million related to litigation that we inherited with an acquisition several years ago. Excluding that charge from 2015 results, the segments 2016 income from construction operations was still up modestly compared to last year in spite of the lower revenue in 2016. The civil segment's operating margin was 10.3% in 2016 compared to 7.7% in 2015 reflecting its improved performance. Building segment income from construction operations was $52 million compared to a slight loss in 2015. The segment performed very well and returned to normal profitability in 2016 following the 2015 loss that resulted from charges related to completion of concrete placement work on the Tower C project in New York. Building segment operating margin was 2.5% in 2016 compared to a slightly negative margin in 2015 also reflecting this segment's significantly better 2016 performance. Specialty contractor segment income from construction operations was $38 million more than double the $60 million reported in 2015. The segments 2015 operating income was hit hard by charges recorded for various Five Star Electric projects. The segment's operating margin was 3.1% in 2016 compared to 1.3% the year prior. Other income for the year was $7 million compared to $14 million in the prior year. Other income in 2015 included adjustments to decrease contingent earn out liabilities related to business acquisitions in prior years. Interest expense for the year was $60 million compared to $45 million in 2015. About $9 million or nearly two thirds of this increase was non-cash which was primarily due to amortization associated with the convertible notes that we issued in mid 2016 and two credit facility amendments in early 2016. Most of the rest of the year-over-year increase in interest expense was a result of higher borrowing costs from the first of two amendments to the credit facility in the early part of the year. Net income for 2016 was $96 million more than double the $45 million reported in 2015. In addition the impact of improved operating performance cost of all segments discussed earlier, they had a lower than expected tax rate for the year. The largest drivers of the lower tax rate were rate changes associated with the shift in revenue mix between states, deferred tax adjustments related to depreciation, and some returns to the provision adjustments. Our 2016 diluted earnings per share was $1.92 compared to $0.91 a year ago and with the range of our original guidance that we announced a year ago as Ron mentioned earlier. The EPS impact of the tax benefit that I just mentioned was offset by expenses related to financing activities including the two credit facility amendments that I just mentioned. Now for the fourth quarter results, revenue for the quarter was $1.2 billion up 4% compared to the fourth quarter of 2015. Civil segment revenue was $409 million down 7% compared to the prior year fourth quarter due mainly to reduced activity on the CMO6 East Side Access Project which is nearing completion. The follow on contracts CMO7 which we were awarded in early 2016 is in initial stages and is expected to ramp up in 2017 which should backfill the continued CMO6 reduction. Building segment revenue was 536 million up 12% compared to the same quarter last year predominately due to the increased activity mentioned earlier on various building projects in California. Specialty contractor segment revenue was $302 million up 7% compared to the fourth quarter of 2015 mostly due to increased activity on various electrical projects in New York. Our fourth quarter G&A was $66 million up 28% compared to the prior year fourth quarter increased G&A expense in 2016 was due to higher performance based compensation expense related to improved results for the year. Fourth quarter operating income was $52 million compared to $50 million for the same quarter in 2015 which resulted in consolidated operating margin of 4.2% for the quarter compared to 1.3% for the fourth quarter of 2015. Fourth quarter segment operating margins were 10.7%, 2.3%, and 4% for the civil buildings especially contractor segments respectively each significantly higher than the respective prior year fourth quarter margins. Other income in the fourth quarter was $2 million compared to 7 million in the prior year fourth quarter. Interest expense for the fourth quarter with $15 million, $4 million of which was non-cash compared to $11 million for the same quarter last year. Most of this increase was non-cash and due to the 2016 refinancing efforts that I mentioned previously. Net income for the fourth quarter was $30 million compared to $9 million for the fourth quarter of 2015 due to improved operating performance in all segments and the favorable tax benefit mentioned earlier. Our fourth quarter diluted EPS was $0.60 compared to $0.18 a year ago. Let’s shift gears now and talk about our balance sheet and operating cash. Our project working capital grew 8% in 2016 primarily due to an increase in accounts receivable resulting from normal billing activities including an expected increase in client retention. We reduced our unbilled cost, the cost in estimated earnings in excess of billings on our balance sheet by $73 million or 8% for the year. Making good progress but not quite achieving our 2016 goal. However it was the first time since 2010 that our unbilled cost declined year-over-year. We expect to make further progress reducing our unbilled costs in the current year that certain claims and unapproved change orders are getting closer to resolution. Our unbilled cost reduction target for 2017 is $200 million. We generated $130 million of operating cash in 2016, our strongest annual operating cash since 2008 as Ron indicated earlier. Operating cash exceeded net income for the year and we expect this will be the case again in 2017 as we remain highly focused on reducing our unbilled costs and collecting the cash that’s owed to us. Our total debt as of December 31, 2016 was 760 million compared to 818 million at the end of 2015. Following last fall's postponement of our senior notes offering due to the deteriorated market conditions prior to the presidential election, we have continued to monitor the capital markets and are poised to restart a pursuit of a new notes offering at an opportune time in the near future. We also expect to form a new bank group in the near-term and refinance our bank debt. We still have plenty of time to refinance both the senior notes and credit facility since neither mature in 2018 -- until 2018 but our goal is to address both within the next few months. Our leverage ratio for the fourth quarter of 2016 fluctuated over a trailing 12 month period was 2.79 well below our current bank covenant requirement of 3.25 and consistent with what we communicated last quarter that it would be less than 3.0 at year end. Finally let me speak for a moment about some of the assumptions in our 2017 guidance. We’re expecting strong revenue growth in our civil and building segments with modest growth anticipated in the specialty contractor segment. Civil segment and building segment operating margins should be similar to what they were in 2016 and our expectation for specialty contractors operating margin is as always in the 5% to 7% range. We anticipate a tax rate of 40% in 2017 but this is not considering a possible positive impact that any federal tax reform could have on us. We're also assuming a 51 million diluted shares outstanding, interest expense of $57 million, and of this amount 70 million will be non-cash. Capital expenditures of $50 million which excludes the potential purchase of new equipment for significant projects that significant new projects which would be paid for by the projects. And depreciation amortization expense of $54 million. Note that our projected interest expense in 2017 is down 5% from 2016. Yet still includes a significant amount of non-cash amortization related to debt discounts and deferred financing fees. The planned refinancing of our bonds and credit facility should result in an interest expense reduction of approximately $10 million on an annual basis beginning in 2018. With that Ron I will turn the call back over to you. Ronald N. Tutor: Thanks Gary. After delivering the positive results and operational improvements across our businesses in 2016, suffice it to say that we expect to deliver significant growth and increased profitability over the next period of years. With all the talk of infrastructure spending and the fact we are experiencing an enormous demand for our services all over the country, we are more confident than ever that we will be able to deliver value to our customers and shareholders in 2017 and beyond. We are among the few companies with the experience, scale, resources, and capabilities to manage and deliver on these very large projects and we expect to reap the rewards accordingly. With that I will turn the call over to the operator for the usual questions. Thank you.

[Operator Instructions]. Our first question is from Steven Fisher of UBS. Please go ahead.

Thanks, good afternoon. Just on the unbilled balances you had been targeting getting that down to about 450 million by the end of 2017. Now it sounds like it's somewhere around 600 million to 650 million. What would you say is the biggest hurdle to achieving the initial target that you had set and how confident are we that you can achieve that additional $200 million reduction? Ronald N. Tutor: Well, I'm confident that some of our settlements have just been delayed. We have some litigations that are being brought to a conclusion because they try this summer. And most of our owners have a great deal of courage in holding our money but when it comes down to trying the case most of them settle on the courthouse steps. We feel that will be applicable to a significant number of them. And we just experienced some delays in frankly getting people to talk to us but I think the $200 million that we targeted for 2017 is a number we should be able to achieve. And some of the other ones that have slid on us we're trying to put as much pressure as possible to bring them within that timeframe. I think that's a minimum level. We hope to do better but that's something we're comfortable with right now. Gary G. Smalley: And Steve if could add this, the 450 million goal still hasn't changed. In fact we'd like to even improve upon that, it's just the time line has slid out a little bit but we still don't expect to stop after this year.

Okay, I guess maybe moving on to the refinancing, I knew you had set a target last quarter to have it all done before you report first quarter earnings. I know Gary you had said now in the next few months so, are you trying to add a little more flexibility into the timeframe or is that still a target by the time we report earnings next time? Gary G. Smalley: Yeah, it's still the target Steve but we have maintained contact with our banks and some new banks. Those meetings will pick up in earnest now that the K is public and we can talk about the results publicly. Then on the bond side the market still looks strong. So we say the next few months we will probably go after pretty hard in the short-term but they give us some flexibility if we decide to do one or not the other and we may do both. We may split them. So we think within the next few months should be enough time to do both.

Okay, maybe one last one, the 5.5 billion of revenues cost would be just an implied burn of at least 88% of your backlog ending the year versus 67% in 2016, is that because it's the Purple Line and other major projects that aren't in the year-end backlog are going to be ramping up quickly or how should we think about that? Ronald N. Tutor: Yes, not only the Purple Line but I expect that by the end of March we should be awarded another $1 billion worth of civil work. In the unprecedented basis upon which we are bidding I think by the end of the first quarter our backlog will be through the roof all of which will start and begin to burn by the summer of this year. I can't tell you how many jobs I'm reviewing weekly. But with just like today we bid two jobs, one of 300 million and one of 500 million in New York. We got one and came in third on the other. NEXT week we go back again. Every week there is one or two major projects with no more than three to a maximum of four bidders. And now grab [ph] continues to ramp up so it's just we're basically in a position where we think we can get such a significant amount of backlog by this summer that it will support that level this year and significantly increase again next year.

Okay, thanks. I'll turn it over.

Thank you. The next question is from Alex Rygiel of FBR. Please go ahead.

Thanks and congratulations on a nice year. Ronald N. Tutor: Thank you.

Ron, can you talk a little bit about how Tutor Perini can participate in President Trump's $1 trillion infrastructure plan and border wall and then also address where the California highway bill stands right now and how Tutor could possibly participate in that? Ronald N. Tutor: Well we're one of the three or four certainly largest infrastructure civil works companies in the United States. So to the extent this continued major infrastructure work goes forward, we'll certainly take as large a lead as anyone. As far as California highway work, we've always been one of the largest contractors with a California DOT. So that work presses forward. We will take a significant low bid that I will define it more to where we are looking to tackle the very largest complex projects because in truth that's where the largest margins are and that's where our competition is much reduced. So to the extent the large -- the jobs are significant and large in size we’ll participate with Caltrans, with high speed rail, and with the Los Angeles MTA as well as the New York MTA, the Port Authority our two big focuses of work. Because both California and New York are going through the roof and we are major players in both areas. We continue to bid up and down the East Coast as well as the West Coast but the two biggest volume players right now are New York and California both of which we are one of the significant leaders. We still have a major operation in the Midwest in our London subsidiary which puts 500 million a year in place of bridge work and highway work. So we think we're situated as well as anyone to take advantage of the increased amount of work which common sense will dictate it will increase the margins along with the amount of work available. Gary G. Smalley: And then Alex on your California highway bill, it's really anyone's guess, it does have bipartisan support. So we think that it certainly increases the chances that is going through and probably makes it probable. We're looking at perhaps midyear this year certainly by then we think it would be a good target to expect

Very helpful and then as it relates to this technology facility in California, when is that project expected to be completed? When will the Purple Line extensions start the construction and then could you also address sort of the high rise demand down in South Florida these days? Ronald N. Tutor: The LA MTA job we expect to get a notice to proceed by the end of April. It will probably start with some degree of significance by September. The large office facility in the Bay Area we think it will finish by the end of the year. And Florida right now, Florida is still busy but I believe the peak has been hit. I think we will continue to maintain our level of revenue which in the Florida market is in the neighborhood of 300 million a year with three to four significant probable projects that we're trying to get closed by this summer. But I don't believe Florida's growth will continue to sustain itself as it frankly pulls back. It's a developer driven marketplace with a limited amount public work, predominantly private work.

Thank you again.

Thank you. Our next question is from Sean Eastman of KeyBanc. Please go ahead.

Hi gentlemen, thank you for taking my questions. I think it's great to hear the momentum on the infrastructure side. I just wanted to kind of drill down on the building side more so and get a better understanding for kind of what level of growth you're implying in 2017 guidance and how that kind of relates back to where backlog is these days, just trying to get a sense for kind of what's already in backlog that's ramping up to contribute to that growth? And I guess more importantly what you guys are expecting to book in the near-term that's going to kind of support the back half of the year? Ronald N. Tutor: Well first the building business will continue to grow because as we've stated previously significant opportunities of Rudolph and Sletten subsidiary continues to grow its backlog in California as we are between Nevada and California. But the significant part of our growth is in the civil business and I talked about what we've already turned in and awaiting results. If we just look at what we've done already and it's February, we're looking at $2 billion worth of awards or pending awards with another billion pending that could be added by the end of March. I just can't repeat enough that if you study the New York and California markets there's a major project meeting every two weeks and it's the same three or four of us, the only ones that are able to bid. So we think civil limit -- the only limits on our civil operation is our physical capabilities and the limit of our engineering talent and that's what we base our revenue predictions around. So we think we're being conservative, I am not terribly concerned about our ability to make either the revenue or the margins.

Okay, that's great. So just, you know, it's good to hear that you're so confident around civil because it seems like those projects are bigger, they give you some more visibility. So you guys are looking for double-digit growth this year, I was just curious based on this unprecedented level of prospects do you expect your top line to accelerate from that low double-digit level into 2018, 2019. Any thoughts on how you are thinking about the longer-term trajectory would be helpful? Gary G. Smalley: I think it will go up even more for 2018 and potentially for 2019. I think we're just pasting the ramp up and it's enormous already. And from everything we're seeing just proposition in Los Angeles will generate $3 billion of revenue per year without matching federal or state funds. We've dominated LA's civil works for 40 years. With our new partnership with the LA MTA and our issues behind us we expect to tackle that opposition and funding with the work all over MTA of size and consequence. So we're as optimistic as we should be given the flow of work that we're looking at.

Okay, excellent and just lastly from me and then I'll turn it over, you know, just around the unbilled cost reductions, in the past you guys have talked about how there's some pretty substantial claims, individual claims that are driving some of those reduction efforts and I was just wondering if you guys can provide any color around sort of timing of when those disputes will be resolved. Just to give us some sort of predictability around cash flows through the year that would be very helpful? Ronald N. Tutor: Well I’ll give you just a few. First we have won a Westgate, a Hollywood lawsuit two years ago. It's a $21 million judgment with interest continuing to accrue at 9%. It's been orally put before the Supreme Court. There is no chance in hell that we're not going to win because it's a judicial judgment based on the fact and their appeal to the Supreme Court was just a stall and the fact is it's got a bond to protect this and there is no way that we won't get that decision in 2017. We have two litigations to try this summer, one is with our beloved bank and the other one is the LIE, Long Island Expressway in New York that I'm intimately familiar with. We are suing the State of New York for $50 million. I scuttled and settled with them four years ago. If they try that case they've got a lot of guts is all I can say to them. And we have a number of others like that that we expect to settle because the judge is awaiting and typically you can deny a contractor for years on end, by the time you get in front of a judge you better have a good explanation. Those are the major reasons why we think we'll be able to close many of those big unbilled and particular claims this year. That plus the fact we're putting tremendous pressure on our New York subsidiaries from which much of that upswing came up and their respective owners. And we have been making inroads in our sub counteracting subsidiaries. And telling their owners and their general contractors we are no longer going to finance their Change Order work. We don't get agreements on methods of payments, we won't go forward. Out of the $200 million the Port Authority owed us on the World Trade Center we've collected over 125 million. We expect to collect the balance. There's a number of other of those like that where we're just taking the position that my dictates are you don't pay timely, we have to wait, we don't do business with you. We put a line through their name as an owner or as another contractor. So we think these steps will generate the cash. And the worst case scenario is whatever we don't collect this year we will collect in 2018. Keeping in mind that with our size. There's always going to be an unbilled receivable balance. It's typical of our size. If nothing else change orders in process and in progress is always going to be 150 million to 200 million even if they're entitled and we're asked to proceed with collections to follow. So it's just the nature of the beast. Ours got out of control with some specific lack of controls that have been implemented and it's up to us to pull it back down to a reasonable range. Gary G. Smalley: Just one note to add Sean, Ron has mentioned some of the larger positions not every one of them are necessarily our costs in excess or unbilled costs, You know, like Bank of America, the lawsuit that Ron makes in there, there is no -- any exposure at all on the company. And it's not a unbilled cost amount but those are all obviously a large cash items that could flow through 2017 as Ron was saying.

Got it, thanks for the detailed respond to these guys, really appreciate it.

Thank you. The next question is from Rob Norfleet of Alembic Global Advisors. Please go ahead.

Good afternoon and again congrats on a nice year. Just a quick question initially for Gary, when you guys put out your guidance for 2017 the range of 210-240 clearly the revenue number for the year seems pretty firm and its 5.5 billion plus clearly to get the low end versus the high end certainly would be some variation in margin, can you just kind of give us some thoughts as to what the low end versus the high end looks like, is it due to a project close out in the civil area or was it due to mix or just help so I can understand the variation there? Gary G. Smalley: Really it depends on the success that we have with the new ward activity or the proposal activity that Ron had mentioned and how quickly we can book some rewards and then the success that we have in some of the pursuits that Ron had mentioned.

Again it's helpful. And I guess Ron, one question I have I mean given the unprecedented activity that you're seeing at what point do you guys become somewhat capacity constrained when you look at your labor pool procurement, raw materials or whatever it may be, I mean at what point you kind of hit some ceiling relative to demand at work that you can actually put in the backlog and feel comfortable that you can complete in a timely fashion? Ronald N. Tutor: I think our backlog hits $10 billion we've got to be very selective and really limit our pursuits to the kind of work we have to specific people. Right now we've got a lot of capacity. I think our backlog currently is closing in on $8 billion. It hits 10 billion which God willing and the market continuing to support it then we're going to have to look very carefully at how much more we take the margins, the locations, and the people we have available. Because I think up till that point we're well in a position to manage and equip. And then we just got to be more selective at measured risk and everything associated with it. In other words we start to run out of gas a little.

Great, that's helpful and my last question just gets to the margins in civil. Clearly we've been seeing an improvement there. If I go back over the last five years, there have been some times when civil margins have been in that kind of 12% to 13% range and I know that's probably been aided by some project close outs but just in thinking structurally about as you guys continue to likely see record backlog growth and see that the top line growing, is it fair to conclude that we could see margins back in those range or is there something structurally different today than there was five to seven years ago? Ronald N. Tutor: I’ll restate what I said earlier. With the extremely limited number of major contractors able to do $1 billion plus civil jobs and now they're beginning to go $1.5 billion and $2 billion almost as a routine. The pressure on margin is going nowhere but up. We all have limited capacities so margin pressure is directly upward. I don't think there's any question that the entire industry is seeing such an enormity of work presented to it whether it's a $100 million job or $1 billion job margins are up and I think you'll see margins sustained at or higher than that 13% level that we made a couple of years ago.

Great, it was very helpful. Thank you.

Thank you. The next question is from Brent Thielman of D.A. Davidson. Please go ahead.

Yeah, thank you. Ron, you have been talking about the civil markets for awhile and sounds like things are starting to move along pretty quickly here since the end of the quarter. I guess I'm just curious kind of what's triggered these agencies to speed up the decision making process and get these projects moving forward to award, anything in particular? Ronald N. Tutor: You know I wish somebody tell me because all we've been doing is complaining. We had to bid a $300 million and a $500 million job in New York one at 2 o'clock and one at 2.30 and all we've been asking is can you put a week between them, can you put a day between them. And then we move right on to the next one. We probably got 50 people in civil work estimating and I'm reviewing every major estimate and all our heads are spinning. So, for whatever reason and there's no question in New York and California they're funded. They have the money and they're putting their work out. Particularly in New York the pressure is so great on that subway system to build and extend. It seems that every day we turn around there's a major project we're bidding.

And are you seeing that fast tag money kind of showing up or is this different? Gary G. Smalley: I haven't seen it yet. Not even.

Okay and then in terms of the revenue guidance, I mean it sounds like the civil business will be a big part of that 10% plus increase this year? Ronald N. Tutor: You are right.

Is giving to something well in excess of that 5.5 billion more dependent on when you're able to book and execute new buildings work or more on how quickly you can kind of move this new civil work forward? Ronald N. Tutor: More, it's really more on how quickly the civil awards can get into revenue. That's why I think that the 5.5 billion is reasonable for 2015. And if we continue to add to the backlog this year where you'll see the big surge will be 2017 when it's all going full board. And remember these are all three and four year jobs. If the backlog builds up 2018 will be bigger than 2017 and 2019 should be bigger than 2018 because they're $1 billion plus contracts with four year durations. And they usually peak in revenue in years two and three and tail off in year four. So that's the beauty of these very large mega projects. That and the fact limited competition.

Okay and then maybe just tack on to that, I mean just kind of given where you're picking up the work I think in the past you talked about LA, you sort of can work year round, in New York you are doing underground work you can kind of work throughout the year. I mean are you picking those sorts of jobs where you don't necessarily see that seasonality, is that fair? Ronald N. Tutor: That's very fair particularly in New York where we've got $2 billion of New York's subway work. And you start on the ground but all the work is under the streets in the tunnels, in the stations like CMO7 is $650 million job 200 feet below the street. So it can be snowing up top, we're working down below.

Okay, well that's great. Well best of luck. Thank you. Ronald N. Tutor: And LA used to be twelve months out of the year until it just started raining.

Well hopefully it will stop for you. Ronald N. Tutor: Thanks.

Our final question comes from Cleve Rueckert of UBS. Please go ahead.

Hey guys, thanks for getting me on. I know you said earnings would be back end waited but the first quarter has sometimes been a source of volatility, I'm wondering if you can just give us a little bit of help, do you expect Q1 earnings to be up year-over-year? Ronald N. Tutor: No, Q1 is winter and it is very predictable. Gary G. Smalley: And keep an eye we had really strong Q1 last year too Cleve.

Right, okay fine. Thank you very much.

Thank you. I would now like to turn the conference back over to management for any closing remarks. Ronald N. Tutor: Great, we haven't got much more to add. Thank you everyone for your participation.

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.