Tutor Perini Corporation

Today, ladies and gentlemen, and welcome to the Tutor Perini Corporation's fourth quarter 2025 earnings conference call. My name is LaTanya, and I will be your coordinator for today. All participants are currently in a listen-only mode. Following management's prepared remarks, we'll be opening the call for a question and answer session. As a reminder, this conference is being recorded for replay purposes. If anyone should require operator assistance, please press star zero on your telephone keypad. I will now turn the conference over to your host today, Jorge Casado, Senior Vice President of Investor Relations. Thank you. You may proceed.

Hello, everyone, and thank you for joining us. With us today are Gary Smalley, CEO and President, Ron Tudor, Executive Chairman, and Ryan Soroka, Executive Vice President and CFO. Before we discuss our results, I will remind everyone that during this 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 our disclosures about risk factors that could contribute to such differences in our form 10K, which we are filing today. The company assumes no obligation to update forward-looking statements, whether due to new information, future events, or otherwise, other than as required by law. In addition, during today's call, management will be referring to certain non-GAAP financial measures. You can find information and a reconciliation of these non-GAAP financial measures in the earnings release that we issued today and in the Form 10-K being filed today, both of which can be found in the Investors section of our website. Thank you, and with that, I will turn the call over to Gary Smalley.

Thanks, Jorge. Hello, everyone, and thank you for joining us. Tudor Perini had a tremendous year in 2025, perhaps her best year ever. Our results were highlighted by a record $5.5 billion of revenue, a return to strong profitability that produced $4.29 of adjusted earnings per share, a fourth consecutive year of record operating cash flow with $748 million of cash that shattered last year's record. This enormous cash generation was largely due to the contributions from new and ongoing projects And our record revenue is driven by double-digit backlog growth that we expect will fuel even higher revenue and earnings, increased profitability, and continued strong cash flow in 2026 and beyond. A year ago on our earnings call, I shared some of my top priorities as TutorPrinti's then newly appointed CEO, which included a sustained focus on cash, the return to profitability, and providing ambitious yet reasonable earnings goals. All with the goal of significantly increasing short and long-term shareholder value. I'm pleased to report that we have delivered on each of these priorities, which together have helped us to achieve unprecedented share price performance and record returns for our shareholders. There's a lot of enthusiasm here at Tudor Perini and among investors and other business partners about the progress we have made and especially about what the future holds. So it continues to be an exciting time to be a Tudor Perini shareholder and we want to thank those of you who are shareholders for your support. Our revenue growth accelerated progressively throughout each quarter of 2025 and our record revenue was primarily driven by contributions from various larger higher margin projects. As many of these projects continue to ramp up, we expect they will generate further double digit revenue and earnings growth over the next two years. The civil segment, our highest margin segment, generated more than $2.8 billion of our total revenue in 2025, the highest ever annual revenue for the segment. Consolidated operating income was up significantly in 2025, driven by our larger, higher margin projects, as well as significantly less negative impacts on earnings from legacy dispute resolutions as compared to 2024. In addition to generating record annual revenue, the civil segment produced its highest-ever annual operating income and operating margin in 2025. The building segment's operating income for 2025 was its highest since 2011, and importantly, the specialty contractor segment returned to profitability in the second half of 2025 ahead of expectations. We see higher margins ahead for the building and specialty contractor segments and sustainably strong margins for the civil segment as many newer large projects continued to ramp up. We concluded 2025 with a robust backlog of $20.6 billion, up 10% year over year, and had a solid book to burn ratio of 1.34x for the year. Our backlog growth was driven by $7.4 billion of new awards and contract adjustments that we booked during the year, the largest of which included the $1.87 billion midtown bus terminal replacement phase one project in New York, the $1.18 billion Manhattan tunnel project also in New York, the UCSF Benioff new children's hospital in California valued at approximately $1 billion, a $538 million healthcare project in California, $241 million of additional funding for the Apra Harbor waterfront repairs project in Guam, a $182 million military defense project in Guam, the $155 million Diego Rivera Performing Arts Center at City College of San Francisco, $131 million of additional funding for an electrical project in Texas, and an electrical project at Cook Children's Medical Center in Texas valued at more than $100 million. Looking back a bit further, Over the past three years, we have won nine mega projects totaling approximately $16 billion, each valued at approximately $1 billion or more. Three of these were among our major awards of 2025, and all but one were awarded since the summer of 2024. These projects all have very healthy margins, more favorable contractual terms, and longer durations than many other large projects we have booked in the past. They also provide us with excellent visibility into our future revenue and earnings over the next several years. We believe our backlog will remain strong in 2026 and beyond. We anticipate booking approximately $1 billion into backlog later this year for the finished trade scope of work for phase one of the Midtown Bus Terminal project in New York City. And earlier this month, we received $204 million of funding for the Eagle Mountain Casino Phase 2 Expansion Project in California, a project that was originally awarded announced last summer. In addition, our subsidiary, Rudolph & Sletten, was recently selected for a large new multi-billion dollar healthcare project in California, which is currently in the pre-construction phase. We expect to book significant additional backlog as this and several other building segment projects, also currently in the pre-construction phase, advanced to the construction phase over the next several years. Furthermore, we continue to see numerous major bidding opportunities for our civil and building segments, many of which should include significant work for our electrical and mechanical business units within the specialty contractor segment. Our most significant bidding opportunities over the next 12 to 18 months include a program believed to be valued at approximately $12 billion for the Sepulveda Transit Corridor, the $3.8 billion Southeast Gateway Line, and the $700 million Metro Gold Line Foothill Extension, all three of which are in California, as well as the multi-billion dollar Penn Station Transformation Project in New York, the $3 billion Newark Liberty International Airport Terminal B project in New Jersey, very similar to the award-winning Terminal A project that we recently completed. the $1.4 billion I-535 Blatnick Bridge project in Minnesota, and the $1 billion I-69 ORX Section 2 project connecting Indiana and Kentucky. There are also several large hospitality and gaming opportunities we are pursuing, mostly in the southwest of the United States. In addition, we continue to have significant Indo-Pacific opportunities driven by the federal government's Pacific Deterrence Initiative, Black Construction, our Guam-based subsidiary, has been tremendously successful in winning various new projects throughout the region and continues to be well positioned to capture additional major projects over the coming years. We remain highly selective as to which opportunities we will pursue with continued focus on bidding projects with favorable contractual terms, limited competition, and higher margins. Due to the timing of our significant prospective opportunities, David Miller, Most of which start bidding around the middle of 2026 and continue through the first half of next year. David Miller, And because of the significantly higher revenue, we expect to recognize for work already in backlog. David Miller, We anticipate a modest backlog reduction in the near term, followed by resume backlog growth as we capture our share of major new projects. David Miller, So expect a bit more lumpiness in our backlog as we move forward with growth still expected over the medium to longer term. rather than the steady backlog increases we have seen virtually every quarter over the past two years. That said, growth remains a priority for us in this environment, and we believe we can scale up resources as necessary. While our civil business is expected to continue to drive most of our future growth and profitability as it typically does, a substantial proportion of our building segment backlog is operating at significantly higher margins than what we have seen historically. For example, our two New York City jail megaprojects carry margins that are consistent with large complex building projects of a fixed price nature. In addition, today's large healthcare campus projects are more technically complex than more traditional commercial office building projects of the past, and therefore also command higher margins. Last November, our Board of Directors authorized our first ever quarterly cash dividend of six cents per share, As well as a share repurchase program totaling $200 million. And today the board declared another 6 cent quarterly dividend, which we've paid on March 26th. Next, let's turn to our outlook and guidance. Tutor Pruney continues to benefit from favorable macroeconomic tailwinds that are driving strong sustained market demand for construction services across all segments. We believe these tailwinds will persist due to the substantial amount of funding that is in place. and because our country has, for decades and until recently, inadequately funded and prioritized the types of substantial infrastructure investments being made today. Based on our assessment of the current market and business outlook, we anticipate double-digit revenue growth and strong earnings in 2026, with even higher earnings expected in 2027, by which time newer large projects should be in the construction phase. For 2026, We expect adjusted EPS in the range of $4.90 to $5.30. As we did last year, we have factored into our guidance a significant amount of contingency for unknown or unexpected outcomes and developments in 2026, including the possibility of a lower than anticipated success rate for future project pursuits, the potential for project delays, slower ramp-ups for newer projects, and any unexpected settlements and or adverse legal decisions associated with the resolution of disputes. We also continue to expect strong operating cash generation in 2026 and beyond due to increased project execution activities and the anticipated resolution of remaining legacy disputes. We have continued to chisel away at a remaining legacy disputes and made excellent progress in 2025, resolving certain longstanding matters. We are already off to a strong start this year, having recently reached an agreement in principle regarding one of our larger disputes related to a long-completed project. We believe that we will finalize a settlement agreement in the coming days, which will not have a material impact on our earnings. However, the settlement is expected to result in the collection of approximately $40 million for TutorPrinti in the near term. Because of our tremendous backlog and ample bidding opportunities, the outlook for TutorPrinti remains incredibly positive even beyond 2026. Thank you. And with that, I will now turn the call over to Ryan to discuss the details of our financial results.