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Tutor Perini Corporation

Tutor Perini Corporation (the "Company") is a leading civil and building construction company offering diversified general contracting and design-build services to private clients and public agencies throughout the world. We have provided construction services since 1894 and have established a strong reputation within our markets by executing large complex projects on time and within budget while adhering to strict quality control measures.

We offer general contracting, pre-construction planning and comprehensive project management services, including the planning and scheduling of the manpower, equipment, materials, and subcontractors required for a project. We also offer self-performed construction services including excavation, concrete forming and placement, steel erection, electrical and mechanical services, plumbing, and HVAC. We are known for our major complex building project commitments as well as our capacity to perform large and complex transportation and heavy civil construction for government agencies and private clients throughout the world.

Fourth-Quarter Results

Revenues from construction operations were $1.11 billion for the fourth quarter of 2012 compared to $1.11 billion for the fourth quarter of 2011. Net income for the fourth quarter of 2012 was $41.6 million compared to $24.0 million for the fourth quarter of 2011. Diluted earnings per share were $0.86 for the fourth quarter of 2012 compared with $0.50 for the fourth quarter of 2011. Excluding a $12.7 million tax benefit recognized in the fourth quarter of 2012 related to the goodwill and intangible asset impairment charge which the Company recognized in the second quarter of 2012 and a $5.0 million pre-tax ($3.0 million after-tax) charge related to an adverse jury verdict received in December 2012 by one of the Company’s recently acquired companies, net income and diluted earnings per share for the fourth quarter of 2012 were $31.9 million and $0.66, respectively. Net income and diluted earnings per share excluding the after-tax impairment charge and certain other discrete items are non-GAAP financial measures, which are discussed in the Company’s press release, dated February 21, and are reconciled to the most directly comparable GAAP measures in the financial tables attached thereto.

In the fourth quarter, the Company performed approximately $60 million of emergency repair services in response to Hurricane Sandy. Tutor Perini performed the largest share of work among the general contractors hired for New York City’s Rapid Repairs Program. The goal of the program was to restore heat, power, and hot water to thousands of residential properties damaged by the hurricane, as well as perform repairs to protect residents from further damage and allow them to remain in or return to their homes. The Company’s work on the program is expected to conclude this week. In addition, Tutor Perini’s specialty electrical and mechanical services subsidiaries, Five Star Electric and WDF, restored power, plumbing, and heating to the Rockaway Water Control Plant, which was submerged after the storm, re-energized 35 New York City Department of Environmental Protection pumping stations, and provided emergency repair services to the New York City Housing Authority (NYCHA) at various NYCHA-managed properties by restoring electricity and/or heat to over 100 buildings.

Notwithstanding the volume of Sandy-related work, revenues from construction operations in the fourth quarter were flat compared to the same quarter last year primarily due to the substantial completion of several large public works and hospitality and gaming projects in 2011. Excluding the $12.7 million tax benefit on the impairment charge and the $3.0 million after-tax litigation charge, the increase in net income in the fourth quarter was primarily due to reduced general and administrative expenses compared to the fourth quarter last year.

Full-Year Results

Revenues from construction operations were $4.11 billion for 2012 compared to $3.72 billion for 2011, an increase of 11%. The Company recorded a net loss of $265.4 million, or $5.59 diluted loss per share for 2012 compared to net income of $86.1 million, or $1.80 diluted earnings per share for 2011. Adjusted net income and adjusted diluted earnings per share for 2012 were $70.3 million and $1.46, respectively.

Revenue from construction operations increased for 2012 primarily due to full-year contributions from the Company’s 2011 acquisitions combined with increased activity on certain healthcare facility and tunnel projects on the west coast and several highway projects on the east coast. These increases were partially offset by the substantial completions of several large public works and hospitality and gaming projects in 2011. Excluding the discrete items discussed above, the decrease in net income for 2012 was due to several factors, including the decline in volume and favorable close outs associated with the substantial project completions discussed above and an unfavorable change in the new work margin mix. This decrease was partially offset by full-year contributions from 2011 acquisitions.

At December 31, 2012, working capital was $747.6 million, an increase of $190.8 million from $556.8 million at December 31, 2011. The Company believes its financial position and available borrowing under existing credit arrangements are sufficient to support the Company’s current backlog and anticipated new work.

Backlog

The backlog of uncompleted construction work at December 31, 2012 was $5.6 billion, consistent with the backlog reported at September 30, 2012 and a decrease of $0.5 billion from $6.1 billion reported at December 31, 2011. Revenues earned during the fourth quarter offset the new awards and adjustments to contracts in process, which together added approximately $1.1 billion. Significant additions to backlog during the fourth quarter of 2012 included a $235 million bridge rehabilitation project in New York, a $167 million signal modernization project in New York, a $130 million irrigation and watershed management program in Afghanistan, and a $116 million joint venture bridge and highway project in Minnesota.

Guidance and Outlook

Ronald Tutor, Chairman and Chief Executive Officer, remarked, “In 2012, we experienced a very disappointing year for our Building business. However, our Civil, Specialty Contractors, and Management Services groups performed well, and we have moved beyond the building market trough and are working to rebuild our backlog with recent new projects. Our strategy to diversify our business and enhance our self-perform capabilities continues to produce good results.” Tutor continued, “We are proud of our role in helping New York recover from Hurricane Sandy and are well positioned to continue assisting the East Coast region to rebuild with the aid of more than $50 billion dollars of recently allocated disaster relief funds. In addition to new Sandy-related opportunities, we also remain very optimistic about our opportunities in our Civil business.”

The Company provided the following full-year guidance for fiscal 2013:

• Revenue is expected to range between $4.5 billion and $5.0 billion
• Diluted earnings per share (EPS) are expected to range between $1.65 and $1.90

The following are some key estimated assumptions which factor into the above EPS guidance:

• $56 million in depreciation and amortization expense
• $40 million in interest expense
• 40% effective tax rate
• 49 million diluted shares outstanding

Commenting on the guidance, Ronald Tutor, Chairman and Chief Executive Officer, said, “We expect to deliver double-digit revenue growth in three of our four segments in 2013. As discussed during our recent fourth-quarter conference call, our Building segment is expected to return to an acceptable, albeit lower-than-historical, segment operating margin in 2013.” Tutor continued, “Our Civil segment is expected to maintain a segment operating margin generally consistent with its 2012 performance. Our Specialty Contractors segment is expected to have stable revenue in 2013 and a segment operating margin in the 6% to 8% range that we have communicated previously. Finally, our Management Services segment operating margin is expected to be close to last year’s margin and influenced by the shift towards lower margin work in existing and pending federal projects. As is typical in our business, our earnings in 2013 are expected to be weighted towards the second half of the year. In addition, we have a significant number of pending proposals with an aggregate value exceeding $2 billion. We will revisit guidance again mid-year, by which time we expect the results of these proposals to be made public.”

Civil Group

Our Civil Group is comprised of the operations of Tutor-Saliba Corporation, Tutor Perini Corporation, Cherry Hill Construction, Inc., Lunda Construction Company, Frontier-Kemper Constructors and Becho, Inc. and is engaged in public works construction throughout the U.S., including the repair, replacement, and reconstruction of public infrastructure such as highways, bridges, and mass transit systems. We have been active in civil construction since 1894 and believe we are expert at managing large, complex civil construction projects. Our corporate integrity, financial strength, and outstanding record of performance on challenging civil works projects pre-qualifies us for projects in situations where smaller, less diversified contractors are unable to do so. This is a competitive advantage that makes us an attractive partner on the largest infrastructure projects and prestigious DBOM (design-build-operate-maintain) contracts, which combine the nation's top contractors with engineering firms, equipment manufacturers, and project development consultants in a competitive bid selection process to execute highly sophisticated public works projects.

Building Group

Our Building Group is comprised of Tutor Perini Building Corp., Tutor-Saliba Corporation, James A. Cummings, Inc., Rudolph and Sletten, Inc., Keating Building Corporation, and Anderson Companies and focuses on large, complex projects in the hospitality and gaming, sports and entertainment, educational, transportation, and healthcare markets. We believe our success results from our proven philosophy, "Building Relationships on Trust," and our ability to manage large, complex projects with aggressive fast-track schedules, elaborate designs, and advanced systems while providing accurate budgeting and strict quality control. Although price is a key competitive factor, our strong reputation, long-standing customer relationships and significant level of repeat and referral business have enabled us to achieve our leading position. Our reputation for completing projects on time is a significant competitive advantage in the building market, as any delay in project completion may result in significant loss of revenues for the owner.

Specialty Contractors Group

Our Specialty Contractors Group is comprised of Five Star Electric, Fisk Electric, WDF, Desert Mechanical, Nagelbush Mechanical, and Superior Gunite and serves to complement and enhance our mechanical and electrical capabilities. The Specialty Contractors group has a sizable presence in New York, Texas, and California and partners with other Tutor Perini companies on projects throughout the United States.

Management Services Group

Comprised of Perini Management Services Inc. (PMSI) and Black Construction, our Management Services Group provides diversified construction and design-build services to the U.S. military and government agencies, surety companies, and multi-national corporations. PMSI and Black are well known for their ability to plan and execute rapid response assignments and multi-year contracts through diversified construction and design-build capabilities. We have consistently demonstrated superior performance on competitively bid or negotiated multi-year, multi-trade, task order and ID/IQ (Indefinite Delivery/Indefinite Quantity) construction programs.

We have been selected by the federal government for significant projects related to defense, reconstruction, and international development projects in Iraq, Afghanistan, and Haiti. Black Construction Corporation of Guam is one of the most successful contractors in Guam and the Western Pacific.

The Management Services Group is also under agreement with major North American surety companies to provide rapid response, contract completion services. Upon notification from the surety of a contractor bond default, we provide management or general contracting services to fulfill the contractual and financial obligations of the surety.

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