Tutor Perini Corporation

Ladies and gentlemen, and welcome to the Tutor Perini Corporation's second quarter 2026 earnings conference call. My name is Rochelle, and I will be your coordinator for today. All participants are currently 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 is being recorded for replay purposes. If you would like to ask a question at that time, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. I will now turn the conference over to your host for today, Mr. Jorge Casado, Senior Vice President of Investment Relations. Please proceed.

Hello, everyone, and thank you for joining us. With us today are Gary Smalley, CEO and President, and Ryan Soroka, Executive Vice President and CFO. Before we discuss our results, I'll 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 10-Q, which we are filing today, and in our Form 10-K, which was filed on February 26, 2026. 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 our earnings release and in our Forum 10Q, both of which can be found in the Investors section of our website. Thank you, and with that, I'll turn over the call to Gary Smalley.

Thanks, Jorge. Hello, everyone, and thank you for joining us. We had an excellent second quarter, delivering very strong results highlighted by record revenue in operating income, record operating cash flow, of $334 million for the first half of 2026 and meaningfully and sequentially improved operating margins across all segments. Our record cash flow so far this year has been driven by higher volume and solid execution and collections on various large projects that are very profitable. Our second quarter revenue increased 90% year over year to $1.6 billion. driven by contributions from projects that are in the very early stages with significant scope of work remaining. With strong revenue growth, we generated operating income of $118 million, up 54% year over year, and produced an outstanding $1.74 of adjusted earnings per share, up 23% compared to the second quarter last year. Brian will discuss the details of our financial results shortly, including some commentary about our recent successful debt refinancing. As I mentioned, our segment operating margins were all up significantly this quarter compared to the margins for the first quarter of 2026 as our work continues to ramp up on several of our mega projects. The civil segment's second quarter operating margin was 15.3%, a very solid performance that exceeded the high end of our anticipated four-year margin range for the segment. The building segment's operating margin was 5.6% for the second quarter, an operating income that was up an impressive 39% year-over-year. The building segment's outstanding margin performance is already approaching the upper end of the range we expect for the segment this year. And the specialty contractor segment continues to deliver solid execution on its current projects with improved operating results. Its operating margin for the second quarter was 2.2%, up nicely compared to the first quarter, and with further margin improvement still expected as the back half of the year unfolds. Overall, we are very pleased with the results we are delivering in terms of revenue growth and margin expansion, as well as with our substantial earnings and record cash generation. Now let's turn to the second quarter new awards and backlogs. We booked $1.7 billion of new awards and contract adjustments, a book to burn of just over 1x, and finished the quarter again with a near-record backlog of $19.9 billion, up slightly compared to the prior quarter. The largest additions to backlog included the following. A $652 million project to modernize and protect critical power infrastructure at Naval Base Guam, $143 million for two U.S. Coast Guard projects, a housing project, and a child development center project, both in Alaska. $130 million of additional funding for a new pediatric campus electrical project in Texas, $114 million for the Jones Hall project at the University of Mississippi, and $106 million for a bridge project in Minnesota. As we've indicated previously, our strong backlog, which includes nine mega projects, we have one over the past few years with a combined value of about $16 billion, continues to provide us with excellent line of sight for future revenue and earnings over the next several years. We continue to expect that our backlog will fuel higher revenue and earnings, solid profitability, and strong cash flow this year and beyond. Customer demand remains robust, and we continue to have numerous significant project bidding opportunities, particularly in the Indo-Pacific region, as well as in California, the Midwest, and the Northeast. Overall, we have a massive pipeline of more than $200 billion in potential project opportunities over the next three to four years, which is about three times larger than the pipeline we had just a couple of years ago. Many of these opportunities are expected to bid over the next one to two years, and we are very well positioned to win our fair share. We will continue to be quite selective in bidding and winning new projects, with our key overall objective being to maximize shareholder value. Consistent with our approach over the last several years, our focus will remain on bidding projects conservatively so that our project budgets reflect safe costs, adequate contingency, favorable contractual terms and higher margins. As we observe the market, we continue to see limited competition for the larger fixed price work, which should help us achieve our goal of winning important and profitable contracts that enhance revenue earnings growth and margin expansion. Now let's talk about some of the major bidding opportunities we expect to pursue over the next 12 to 18 months. We currently have more than $4.6 billion of Indo-Pacific opportunities with the federal government for our Guam subsidiary, Black Construction, including port and harbor improvements on the islands of Palau and Yap, a fueling facilities project at Wake Island, air-filled and fueling facilities in Yap, and the Polaris Point submarine pier at Naval Base Guam. In addition, there are more than $1 billion of other opportunities already identified in the region We expect that our backlog will remain strong during the remainder of 2026 and beyond. We still anticipate approximately $1 billion of additional funding later this year for the Midtown bus terminal replacement project in New York. We also have certain building segment projects currently in the pre-construction phase that are anticipated to advance to the construction phase later this year and beyond. In addition, In the third quarter, we will be bidding various projects, including the $1 billion I-69 ORX Section 2 bridge project connecting Indiana and Kentucky. And in the Indo-Pacific region, Black Construction just last week submitted a bid for the half-billion dollar Palau Port and Harbor Improvements project. And later this year, we will bid a multi-billion dollar jail project in Illinois, leveraging our success and experience with our ongoing Brooklyn and Manhattan jail megaprojects. We will also continue to have several new large healthcare project opportunities and hospitality and gaming opportunities, mostly in California and the Southwest. In 2027, we expect to bid on several multi-billion dollar projects, including the Merced to Madera segment of the California High-Speed Rail Project, as well as the initial contract for the Sepulveda Transit Corridor Program in Southern California, a program believed to be valued at approximately $12 billion and expected to be awarded under multiple contracts. In addition, we have the $4 billion Southeast Gateway, the $2 billion Eastside Transit Corridor Phase II, and the $1.5 billion K-Line Extension to Torrance projects, also in Southern California. And on the East Coast, 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 at the same airport. Late next year or early the following year, we expect to bid on the second phase of the multi-billion dollar Midtown Bus Terminal replacement project in York, the phase that will demolish the existing bus terminal and build its permanent replacement. Because of the unprecedented pipeline of opportunities just mentioned and our competitive positioning, we remain confident in our ability to drive backlog growth over the medium to longer term as we also continue to focus on earnings growth, margin improvement, free cash flow, quality, and safety. Now, as we announced today in our earnings release, our board of directors has declared a 9 cent per share quarterly cash dividend payable to shareholders on September 3rd. This is a meaningful 50% increase compared to the previous 6 cent dividend. The increased dividend reflects our continued confidence in the outlook for strong revenue, operating margins, and many more. to return excess capital to our shareholders. Finally, let's turn to our outlook and guidance. As I mentioned earlier, I am very pleased with the financial results we have delivered thus far this year, results that were ahead of our expectations. We continue to benefit from favorable macroeconomic tailwinds that are driving strong, sustained market demand, which bodes well for future awards growth, earnings, and value creation. Our business is resilient. and we remain confident in our outlook for consistent revenue and earnings growth for the remainder of 2026 and beyond. Based on our outlook and assessment of the current market, we continue to anticipate double-digit revenue growth and strong earnings in 2026 with even higher earnings expected in 2027, by which time many of our newer large projects in our backlog should be in the construction phase. Because of the favorable outlook and our strong financial results to date, we are raising our 2026 adjusted EPS guidance to the range of $5.15 to $5.45 per share, up from the previous range of $4.90 to $5.30. As usual, our guidance continues to factor in a significant amount of contingency for unknown or unexpected outcomes and developments this year. We also continue to expect strong operating cash generation in the second half of 2026 and beyond due to increasing project execution activities on our newer megaprojects and the anticipated resolution of remaining legacy disputes. Before I hand it over to Ryan to review our financial performance, I want to take a moment to highlight a significant corporate milestone. As some of you may know, Tutor Perini was recently added to the S&P Small Cap 600 Index effective before the opening of trading on July 24th. Tutor Perini has also recently been added to various other S&P indices, including the S&P 1000. We view our inclusion in these benchmarks as clear validation of the strong operational progress our team has achieved over the past few years. Our focus on improved contractual terms, safer costs, and more contingency in our bids, effective project execution and resolving legacy disputes, has structurally strengthened our balance sheet and helped us drive unprecedented earnings and cash generation. This milestone marks an exciting new chapter for Tutor Perini as we continue to drive long-term value for our shareholders. Given all this, I'd like to take a moment to reflect on Tutor Perini's enduring value proposition for investors and why we are so confident in our future trajectory. As we have said before, We continue to benefit from generational investment opportunities to refresh and modernize the U.S. infrastructure. Our ability to capitalize on this exceptional market environment where we see no shortage of opportunities moving forward is evidenced by our recent major project wins. Next, our backlog of $20 billion provides us with clear revenue and earnings growth visibility moving forward. And finally, we have taken meaningful action to strengthen our balance sheet over the past few years by deleveraging, resolving legacy disputes, and through the recent refinancing. As a result, we strongly believe Tutor Perini today is a more compelling value investment opportunity than any other point in our storied history, and our confidence continues to build given the disciplined steps we are taking to create value for our shareholders moving forward. Thank you, and with that, I will turn the call over to Ryan to discuss the details of our financial results.