Tutor Perini Corporation (NYSE:TPC) Q4 2018 Earnings Conference Call Transcript

Feb 27, 2019 • 05:00 pm ET

Previous

Tutor Perini Corporation (NYSE:TPC) Q4 2018 Earnings Conference Call Transcript

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
Operator

Thank you. At this time, we'll be conducting a question-and-answer session. (Operator Instructions) Our first question is from Tahira Afzal with KeyBanc Capital Markets. Please proceed with your question.

Analyst
Alexander Dwyer

Hey, guys. This is Alex Dwyer on for Tahira . Congrats on the quarter, guys.

Executive
Ronald N. Tutor

Thanks.

Executive
Gary G. Smalley

Thanks, Alex.

Analyst
Alexander Dwyer

So I guess my first question is based on your range of guidance and the things you've mentioned, what areas do you -- see you guys having the most visibility or concerns on what may help you reach the upper end of guidance? Are there any issues in segments or any specific projects you would like to highlight in 2019?

Executive
Ronald N. Tutor

No, I don't think -- this is Ron Tutor. I don't think there's any question we have an opportunity to reach the higher levels of our guidance, but it will depend to a great extent -- we're in the midst of negotiations on three of our major claims where significant offers have been made. We have not accepted those because it does not meet our expectations. And one of the concerns and probably the only real concern I have is if we reach a point to where it's close to what we want, and there's a few million dollars separating their final offer with our final demand, there is no question that we're going to have to start settling and collecting that cash, which could generate some write-downs in operating margins.

I think we have taken those into consideration within the range of these expectations, but we have a very substantial, as I've said before, number of claims teed up in negotiations, and we feel the potential to be concluded in 2019. And the real issue will be, very candidly, whether I'm willing to take a reduction in what we believe we're entitled to close them out and collect what is obviously a very substantial amount of cash.

So if I have one concern, that's about it. We continue to frankly get one of major civil award after another in our key markets, between New York, which is exploding, and California, which is equally so. If I really put down on paper the opportunities that are tailor-made for our Civil Group between our two strengths in New York and California, I don't even know how we could possibly even handle it. There are so many major projects teeing up in the next 12 months to 18 months in an industry where nobody is left.

I keep saying it, but the truth is in the pudding. We have now got three straight large projects for the MTA, $1.3 billion, $400 million tunnel, and a $1.4 billion stations. Three straight contracts that total $3 billion for the LAMTA, $1.400 billion job in Newark where we're the only bidder, and as I advise our owners, if you don't make these contracts far more contractor friendly, you're not going to get bids even including us. And the fact of the matter is an owner today is fortunate if