Tutor Perini Corporation

Good day, ladies and gentlemen, and welcome to the Tudor Perini Corporation first quarter 2022 earnings conference call. My name is Joe, 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. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. At this time, I will turn the conference over to your host, Mr. Jorge Casado, Vice President of Investor Relations. Please proceed.

Hello, everyone, and thank you for joining us. With us today are Ronald Tudor, 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 are based on management's current assessment of existing trends and information. There is an inherent risk that our actual results could differ materially. You can find disclosures about risk factors that could potentially contribute to such differences in our Form 10-K, which we filed on February 24, 2022, and in the Form 10-Q that we are filing today. 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. Thank you, and I will now turn the call over to Ronald Tudor.

Thank you, Jorge. Good afternoon, and thank you for joining us. Our first quarter results were highlighted by a substantial record-setting level of operating cash for a first quarter. Contrary to our typical negative cash flow in almost every first quarter since the merger, we generated nearly 121 million of cash, driven primarily by the resolution of certain disputes, and the collection of certain successfully negotiated and approved change orders that we had discussed during the Q&A portion of our last earnings call back in February. Gary would provide more details and put it in perspective a bit later, but suffice it to say that it was by far our largest first quarter of operating cash since the merger in 2008 with Tudor Saliba. In addition, our backlog grew in the first quarter compared to the last quarter and also compared to the first quarter of 2021. Unfortunately, however, our first quarter earnings were significantly reduced by the impact of an unfavorable legal ruling on a completed bridge project in New York, as well as temporary timing impacts related to certain lower margin, lower risk change orders that were successfully negotiated and approved for a mass transit project in California, which although increasing the project's overall profit, reduced its overall profit margin percentage due to its limitations on subcontractor margin. Consequently, we report a loss of 42 cents per share for the first quarter of 2022. Regarding the adverse legal ruling, the original project design required us to build a cable-stay bridge for the project in New York. However, after we were awarded the project, the owner changed the design from a cable-stay bridge to a causeway bridge. Ultimately and amazingly, courts declined to even hear the merits of our claims for the difference in cost. to recover the added costs we incurred to build the alternative bridge. Although we have another avenue of cost recovery we are pursuing, we believe it appropriate to take a $25.5 million charge in the first quarter result of the ruling. Our backlog stands at $8.3 billion. Demand for our services continues to be significant. and we're preparing to bid and hopefully win our share of various large new civil projects in the next 30 days and the balance of the year through the end of next year, some of which I'll detail in a moment. We also expect that we will continue to generate even stronger operating cash in the second quarter and throughout the balance of the year, as we have discussed in the resolve of other disputed issues including claim resolves, arbitration conclusions, and court trials. We booked 997 million of new awards in the first quarter of 2022, slightly larger than the first quarter last year. Our new awards so far this year have mostly come in the civil and building segments, and the most significant first quarter awards included the $260 million Eagle Mountain wood fire gas pipeline in British Columbia, Canada, and $121 of additional work for our mass transit California high-speed rail project in California, and two health care projects, an educational project, and an entertainment venue totaling $251 million. Our new awards are continuing at a steady space, and already in the second quarter we have announced another project for black construction in Guam, the $106 million BOQ at Marine Corps Base Blas, and we have just been awarded an $85 million U.S. Coast Guard family housing project in Alaska. We also anticipate soon booking three new building projects in California, for Rudolph and Sletten, totaling nearly $300 million. So it is evident that even ahead of our bidding, some larger projects this spring, we continue to be successful in capturing our share of smaller and mid-sized projects. We also have two other pending commitments in the gaming area, totaling over $500 million, we hope to be awarded in the next 60 days. Demand for our services is continuing to increase meaningfully beginning later this year when the funding from the federal infrastructure bill begins to flow. As I've said previously, that funding is anticipated to be allocated over the next five years and spent over the next 10 years. Consequently, we continue to believe this substantial sustained funding will favorably impact our current projects as well as those prospective opportunities over the next five to 10 years. Ahead of even the benefits of the infrastructure bill, we have talked repeatedly about tracking tens of billions of dollars of prospective projects that are expected to bid and be awarded over the next couple of years. I'll move on to those projects in that next I will discuss These projects will be bidding this month and over the remainder of 2022. In the period of time of May 15th to June 1st, we will be submitting bids for two major highway jobs in P3 programs in Maryland, the two projects of which exceed $3 billion. called the Maryland Express Lines. We anticipate team selection shortly thereafter and a contract award for whoever that apparent low bidder is by the fourth quarter of 2022. Also in that two-week time period, we are bidding the $350 million Raritan River Bridge replacement in New Jersey. with an award to the publicly bid and open project to shortly follow. Then on May 26, we will be bidding the $2.5 billion Newark Air Train replacement project and anticipate team selection with a contract to follow shortly thereafter. As you can see, May will be an incredibly busy month of bidding. And the three major projects of the four only have one other bidder. Other significant projects bidding this year are the $1.6 billion Brooklyn jail, the $2.5 billion Navy dry dock job in Hawaii, $800 million JFK roadways and ground transportation in New York City, the $1 billion East San Fernando Light Rail Project for the Los Angeles MTA, and a $700 million Inglewood People Mover in Los Angeles. Before I hand things over to Gary to discuss the details of our financial results, I want to be clear that we are confident we will deliver improved financial performance over the rest of this year. Therefore, despite the negative first quarter and its impacts on earnings, we are maintaining our guidance for 2022 in the range of the same $1.15 to $1.60. As I said previously, we would also add we believe our operating cash will continue to increase and be strong throughout the whole year of 2022. Thank you, and with that, I turn the call over to Mr. Smalley.