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DATE

Wednesday, May 6, 2026 at 5 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Gary G. Smalley
  • Chief Financial Officer — Ryan Joseph Soroka

TAKEAWAYS

  • Operating Cash Flow -- $147 million was recorded for the quarter, up 542%, representing the highest first-quarter operating cash flow in company history, driven primarily by collections on new and ongoing projects.
  • Total Revenue -- $1.4 billion increased by 11%, marking the highest first-quarter revenue since 2009, with growth driven by large, higher-margin projects in early execution phases.
  • Backlog -- $19.8 billion was reported at quarter-end, supported by nine mega projects won over the last one to three years, implying multi-year revenue visibility.
  • Civil Segment Revenue -- $698 million rose 14%, achieving its highest-ever first-quarter revenue, with significant scope of work remaining on projects.
  • Civil Segment Operating Income -- $88 million grew 10% to a first-quarter segment record, despite a $16 million unfavorable adjustment on a California mass transit project; operating margin reached 12.6%.
  • Building Segment Revenue -- $473 million was up marginally, with substantial growth expected later in the year due to project ramp-up.
  • Building Segment Operating Income -- $16 million increased 56%, with an operating margin improvement to 3.5% from 2.3% last year, reflecting greater contributions from New York and California projects.
  • Specialty Contractors Revenue -- $219 million advanced 24%, mainly from increased work on electrical and mechanical projects in New York and Texas.
  • Specialty Contractors Operating Income -- $600,000 compared to a $7 million loss a year ago, with further margin improvement expected as project ramp-ups continue.
  • Share-Based Compensation Expense -- $23 million increase from last year, primarily attributable to the stock price effect on liability-classified awards, significantly weighed on operating income.
  • GAAP Net Income -- $26 million, or $0.48 per share, versus $28 million, or $0.53 per share, driven by higher share-based compensation expense.
  • Adjusted Net Income -- $55 million, or $1.03 per share, up 58%, with the adjustment mainly related to share-based compensation expense and tax benefit.
  • Debt Position -- $399 million total debt at quarter-end, with cash and cash equivalents exceeding total debt by $4 million, representing a $533 million net cash improvement from the prior year.
  • Refinancing Plan -- Targeting midyear refinancing of senior notes with expected interest savings of 400-500 basis points and extending debt maturities; also considering an increase in the credit facility.
  • Dividend and Share Repurchase -- $0.06 quarterly dividend declared for June 4, 2026; $20 million in share repurchases executed in Q1 at about $72 per share, with $200 million total authorization in place.
  • 2026 Guidance -- Adjusted EPS guidance affirmed at $4.90 to $5.30, with assumptions including macroeconomic tailwinds, contingency for project uncertainties, and ongoing dispute outcomes.
  • Backlog Additions -- Nearly $700 million new awards and adjustments booked, with the largest additions in California, including $186 million for Eagle Mountain Casino Phase 2, $97 million for a healthcare project, and $66 million for mass transit projects.
  • Bidding Pipeline -- Multiple upcoming opportunities totaling several billion dollars, including Penn Station, I-535 Blatnik Bridge, California High-Speed Rail, I-69 ORX Section 2, Sepulveda Transit Corridor, Southeast Gateway Line, Newark Airport Terminal B, and $4 billion in Indo-Pacific region projects.

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RISKS

  • Management disclosed an "unfavorable legal ruling" resulting in a $175 million damages assessment related to the W Element Hotel dispute, acknowledged as part of a lengthy litigation, with only an immaterial charge recognized in the quarter pending appeal.
  • Corporate G&A expense rose to $45 million from $18 million. Management highlighted that higher share-based compensation expense is "expected to decrease" but materially constrained current profitability.
  • Management cautioned the current backlog may decline modestly in the near term as higher revenue is recognized before new awards ramp. Growth is anticipated to resume after this period.
  • Guidance includes contingency for "unknown outcomes and developments," specifically referencing potential for project delays, slower ramp-ups, or adverse legal decisions, which could impact 2026 results.

SUMMARY

Tutor Perini Corporation (TPC 0.34%) reported record first-quarter operating cash flow and robust top-line growth, underpinned by execution on high-margin projects and a backlog approaching $20 billion. Share-based compensation expense notably reduced reported operating income, even as adjusted EPS increased 58%. Management reaffirmed 2026 guidance, highlighted a strong bidding environment with numerous mega projects, and detailed plans for debt refinancing and continued shareholder returns. Strategic updates included plans to expand data center construction capabilities, while also acknowledging incremental legal and operational headwinds affecting near-term profitability and backlog trends.

  • CEO Smalley said, "If we did not book any more work, 2027 is going to be a blowout year, as is 2026," indicating high management confidence based on current backlog.
  • Smalley described backlog additions in the Indo-Pacific region as exceeding $1 billion for Black Construction, with multi-year runoff and significant room for continued growth.
  • CFO Soroka stated, "We are looking at interest savings of somewhere between 400 and 500 basis points" on the upcoming notes refinancing, anticipating a material interest burden reduction.
  • Smalley confirmed, "We do not see new competitors entering the market right now," suggesting a favorable competitive landscape for large, complex project pursuits.
  • Specialty Contractors segment margin guidance for 2026 was set at 1%-3%, with expectations for a long-term increase to 5%-8% as legacy disputes subside and new project ramp-ups mature.
  • Dividend continuity and opportunistic buybacks were reiterated, with $200 million authorized for the repurchase program and $20 million repurchased in the first quarter.
  • Company booked nearly $700 million in new and adjusted awards in the quarter, primarily in California, providing near-term revenue support.

INDUSTRY GLOSSARY

  • Backlog: The total value of contracted projects not yet recognized as revenue, serving as an indicator of future earnings potential.
  • MATOC: Multiple Award Task Order Contract — an indefinite delivery/indefinite quantity contract used primarily by U.S. government agencies to prequalify firms for project awards within a defined scope and budget ceiling.
  • Operating Cash Flow: Cash generated from core project execution and operations, distinct from cash flows from financing or investing activities.
  • Topping-Out Ceremony: A milestone event in construction projects marking the placement of the last beam atop a structure, symbolizing structural completion.

Full Conference Call Transcript

Gary G. Smalley: Thanks, Jorge. Hello, everyone, and thank you for joining us. Before we discuss our first quarter results, we wanted to share tragic news regarding a recent incident that affected the Tutor Perini family. A few weeks ago, during Super Typhoon Sonoklu, our offshore cargo vessel, the Mariana, capsized at sea with the six-member crew, including two of our employees, near the island of Saipan in the Northwestern Pacific Ocean. It is an unimaginable loss for all of us at Tutor Perini Corporation, and we extend our deepest thoughts, prayers, and heartfelt condolences to the crew's families, loved ones, and the entire affected community.

We have been in close contact with the families to provide them with updates and to offer our support. We remain committed to the families and will continue to work with them to provide whatever support we can. I would like to express our sincerest appreciation to the U.S. Coast Guard, the U.S. Air Force, the U.S. Navy, as well as search teams from the Japan Coast Guard and the Royal New Zealand Air Force for their professionalism and tireless efforts during an intensive, nearly two-week search and rescue mission. One of the bodies of the crew was found, but the other five were not. Thank you.

Turning to our usual agenda, we delivered strong first quarter results highlighted by record operating cash flow of $147 million, by far the highest first quarter result ever, driven by collections on new and ongoing projects. Our revenue grew 11% year over year to $1.4 billion, the highest revenue of any first quarter since 2009, driven by contributions from various larger, higher-margin projects that are in the early stages with significant scope of work remaining. Ryan will get into more of the details of our financial results shortly.

Our backlog remains very strong at $19.8 billion at the end of the first quarter, and we continue to expect that it will fuel much higher revenue and earnings, increased profitability, and continued strong cash flow this year and beyond. The Civil segment produced its highest ever first quarter operating income, which was up 10% year over year, and delivered a 12.6% operating margin, solid results for our first quarter, which is typically a slower quarter for us due to seasonality. The Building segment's operating income was up an impressive 56% year over year with an operating margin of 3.5%.

The Specialty Contractors segment continues to deliver solid execution on its current projects and improved operating results, as evidenced by the fact that they were marginally profitable for the quarter, with further improvement expected as the year unfolds. We see higher margins ahead for all three segments as many newer large projects continue to ramp up. In the first quarter, we booked nearly $700 million of new awards and contract adjustments. The largest additions to backlog, all in California, included the following: $186 million of additional funding for the Eagle Mountain Casino Phase 2 expansion project; $97 million of additional funding for a healthcare project that entered the construction phase; and approximately $66 million for two mass transit projects.

Our strong backlog, which includes the nine mega projects we won over the last one to three years, provides us with excellent visibility for our future revenue and earnings over the next several years. Recently, one of our major projects, the Brooklyn Jail in New York, reached a key milestone. The project held its topping-out ceremony, marking the completion of the structure's steel frame and the placement of the final and highest structural beam. Workers and dignitaries watched as the final beam, adorned with the traditional evergreen tree and American flag, rose 15 stories to its destination atop the building that, when completed, will be a 1 million square-foot facility and have 1,040 beds.

This project and all of our other major projects are running very smoothly, with solid business execution and strong financial performance. As I have discussed previously, customer demand remains strong. We continue to have numerous significant project bidding opportunities, particularly in the Northeast, the Midwest, the West Coast, and the Indo-Pacific region. We believe we are well positioned to continue winning our share of new projects later this year and over the next several years. We will continue to be very selective when we bid future projects, which will continue to enhance and help maximize shareholder value. Our focus remains on bidding projects with favorable contractual terms, limited competition, and higher margins.

In addition to vibrant demand across the markets we serve, some of our existing projects are expected to spawn significant incremental work, which bolsters our confidence that our backlog will remain elevated. For example, we anticipate adding approximately $1 billion of additional backlog in the second half of the year for the finish trades scope of work for Phase 1 of our Midtown Bus Terminal replacement project in New York. Also, some of our Building segment projects that are currently in the preconstruction phase are anticipated to advance to the construction phase later this year and next year.

The largest of these is a multibillion-dollar healthcare project in California expected to begin construction in late 2027, for which we currently only have a nominal amount of backlog. Significant bidding opportunities we expect to pursue over the next 12 to 18 months include: the multibillion-dollar Penn Station transformation project in New York, for which the U.S.

Department of Transportation has recently announced a substantial amount of committed funding and for which the selected development team is expected to be chosen later this month; the $1.4 billion I-535 Blatnik Bridge project in Minnesota, for which the selected contractor is expected to be announced next month; a multibillion-dollar additional segment of the California High-Speed Rail project bidding later this year; the $1 billion I-69 ORX Section 2 project connecting Indiana and Kentucky, also bidding later this year; the Sepulveda Transit Corridor program in Southern California, believed to be valued at approximately $12 billion and expected to be awarded under multiple contracts, with the initial contract expected to be bid next year; the $3.8 billion Southeast Gateway Line, also in Southern California and bidding next year; and 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.

This enormous number of significant opportunities does not even include numerous projects we are pursuing in the Indo-Pacific region, which collectively total more than $4 billion and include military infrastructure improvements at Naval Base Guam; airport and harbor projects on the island of Yap; and wharf and harbor improvement projects in the Republic of Palau. We also continue to have several large healthcare project opportunities on the West Coast and hospitality and gaming opportunities, mostly in the Southwest. As a reminder, the majority of these opportunities start bidding and are expected to be awarded in 2026 or to continue bidding through next year.

Due to this timing and the significantly higher revenue we expect to recognize this year for work already in backlog, we continue to anticipate a modest sequential backlog reduction in the near term, followed by resumed backlog growth as we capture our share of major new projects. We are confident in our ability to drive continued backlog growth over the medium to longer term, even as we focus on profitability, free cash flow, earnings growth, quality, and safety as our primary performance indicators. As you recall, last November, our Board of Directors authorized our first ever quarterly cash dividend of $0.06 per share, as well as a share repurchase program totaling $200 million.

Today, the Board declared another $0.06 quarterly dividend, which will be paid on June 4, 2026. Earlier this year, in the first quarter, we completed the first repurchase under our share repurchase program, buying back approximately 278,000 shares on the open market for $20 million at an average price of approximately $72 per share. We expect to make additional opportunistic share buybacks moving forward under this authorization to return excess capital to shareholders. Turning to our outlook and guidance, we are pleased with the excellent start to the year, as we delivered results in line with our expectations.

We continue to benefit from favorable macroeconomic tailwinds that are driving strong, sustained market demand across all segments, which is a great sign for future awards, growth, and value creation. Our business is resilient, and we remain confident in our outlook for consistent revenue and earnings growth over the next several years. 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 the newer large projects in our backlog should be in the construction phase. Accordingly, we are affirming our 2026 adjusted EPS guidance in the range of $4.90 to $5.30 per share.

Our guidance continues to factor in a significant amount of contingency for unknown 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 our 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 increasing project execution activities on our newer mega projects and the anticipated resolution of remaining legacy disputes. Before I turn the call over to Ryan, I would like to comment on one of those remaining legacy disputes.

Last month, we received an unfavorable legal ruling and were assessed damages of approximately $175 million related to a dispute with our customer regarding the W Element Hotel in Philadelphia, a Building segment project that we completed in 2021 and that opened to the public the same year. We strongly disagree with the ruling and firmly believe it does not reflect the merits of the case. To be respectful to the legal process and since it is ongoing litigation, we will not comment specifically about what we believe to be significant legal flaws in the court's decision.

We do intend to appeal and will continue to vigorously pursue all appropriate legal remedies to defend ourselves against the damages awarded to the customer and to collect amounts contractually due to us. The appeal process is likely to take two years, perhaps even longer. This recent development represents another step along the path of an ongoing, lengthy legal dispute. As a result of the ruling and after a close review of our claims against the owner and certain subcontractors, we recognized an immaterial charge to earnings in the first quarter. Thank you. I will now turn the call over to Ryan Joseph Soroka to discuss the details of our financial results.

Ryan Joseph Soroka: Thanks, Gary. Good day, everyone. I will begin by discussing our results for the first quarter, after which I will provide commentary on our balance sheet and our 2026 guidance assumptions. All comparative references will be against the first quarter of last year, unless otherwise stated. As Gary mentioned, we generated a record $147 million of operating cash for the quarter, up 542% year over year and well ahead of any first quarter cash flow result ever. Our cash flow this quarter was largely driven by collections from newer and ongoing projects, reflecting a significant increase in project execution and improved working capital management, with only an immaterial amount attributable to the resolution of disputes.

We anticipate that we will continue to generate solid cash flow in 2026 and beyond, with most of our cash to be derived from organic operations, that is, from new and existing projects, and enhanced from time to time by cash collected following dispute resolutions. Revenue for the first quarter of 2026 was $1.4 billion, up 11%, with the growth primarily due to increased project execution activities on certain large, newer, and higher-margin Civil and Building segment projects, especially in the Northeast. This included, among others, the Midtown Bus Terminal Phase 1 project, the Manhattan Tunnel project, the Manhattan Jail, and the Newark AirTrain replacement.

Civil segment revenue was $698 million, up 14%, due to increased project execution activities on some of the projects I just mentioned, which have substantial scope of work remaining. It was the Civil segment's highest revenue of any first quarter ever, reflecting the solid sustained demand that Gary noted. Building segment revenue was $473 million, up slightly compared to the first quarter last year, with the segment's revenue growth expected to increase substantially later this year. All our major Building segment projects, including the Brooklyn and Manhattan Jail projects in New York and a large healthcare campus project in California, are running smoothly and also have substantial scope of work remaining.

Specialty segment revenue was $219 million, up a solid 24%, with the segment's growth continuing to be primarily driven by increased activities on various electrical and mechanical projects in New York and Texas. The Specialty segment's strong revenue growth began in 2025, and we expect the growth to continue this year and next year as those projects and other newer mega projects advance. Our operating income for the quarter was $59 million, down 9% compared to last year.

Our operating income was driven by improved contributions from each of our three segments, but those contributions were offset by a $23 million increase in share-based compensation expense in 2026 compared to 2025, primarily due to our stock price being substantially higher in 2026 as compared to the same period last year, which affects the fair value of liability-classified awards. As a reminder, our share-based compensation expense is expected to decrease in 2026 and to decline much more significantly next year, as some of these liability-classified awards vested at the end of last year and most of the remaining awards will vest by the end of 2026.

We are no longer awarding liability-classified awards, which should meaningfully reduce earnings volatility starting next year. Civil segment operating income was $88 million, up 10% and the highest first quarter result ever for the segment, with a corresponding segment operating margin of 12.6%, a very solid result for our first quarter given typical seasonality.

The increase in operating income was primarily due to contributions associated with the increased project execution activities on various higher-margin projects that are ramping up, partially offset by an unfavorable adjustment of $16 million in 2026 on a mass transit project in California due to changes in estimates resulting from ongoing negotiations of change orders, which we expect will generate significant cash once they are ultimately approved. We anticipate continued Civil segment margins in the range of 12% to 15%. Building segment operating income was $16 million, up a strong 56%, with the increase driven by contributions from certain newer, higher-margin projects in New York and California with substantial scope of work remaining.

The segment's operating margin was 3.5%, compared to 2.3% last year, with the improvement primarily driven by contributions related to the increased higher-margin project execution activities I mentioned. We anticipate Building segment margins in the range of 3% to 6%, fueled by continued contributions from certain higher-margin projects. Specialty Contractors segment operating income was approximately $600,000 for the quarter, compared to a loss from construction operations of $7 million for the first quarter of last year. The improvement compared to last year was primarily due to contributions related to increased project execution activities on the electrical and mechanical projects I mentioned earlier.

Many of these projects are in the early stages and are expected to ramp up substantially over the next several years. The Specialty segment had a handful of small, immaterial unfavorable project adjustments this quarter related to legacy disputes that adversely affected its results for the quarter. Though the segment was still profitable, its results reflected a significant improvement year over year. Corporate G&A expense for 2026 was $45 million compared to $18 million last year, with the increase mostly due to the substantially higher share-based compensation expense that I mentioned.

Income tax expense for the quarter was $17 million, with a corresponding effective tax rate of 30.1% for the period, compared to $13 million last year and a corresponding effective tax rate of 23.2% in that period. The higher effective tax rate this year is attributable to the significant increase in share-based compensation expense, which is almost entirely nondeductible. Net income attributable to Tutor Perini Corporation for the first quarter of 2026 was $26 million, or $0.48 of GAAP earnings per share, compared to $28 million, or $0.53 of GAAP earnings per share, in the first quarter of last year.

Excluding the impact of share-based compensation expense, net of the associated tax benefit, adjusted net income attributable to Tutor Perini Corporation for the first quarter of 2026 was $55 million, or $1.03 of adjusted earnings per share, compared to $34 million, or $0.65 of adjusted earnings per share, in the same quarter last year. As you can see, our adjusted EPS was up a strong 58% year over year, reflecting the high-margin contribution and outstanding performance we are seeing on our projects in backlog. Now I will address the balance sheet. Our record cash generation enabled us to continue paying down our total debt, which stood at $399 million at the end of the first quarter.

We ended the quarter with cash and cash equivalents exceeding total debt by $4 million, a very strong net cash position and $533 million better than we were just one year ago, when we were in a net debt position. Our cash available for general corporate purposes was $321 million at the end of the first quarter of 2026, up 18% compared to $271 million at the end of 2025. Our balance sheet is stronger than it has ever been, and our solid net cash position provides us with excellent capital allocation flexibility.

We anticipate refinancing our existing senior notes by around midyear to secure a more favorable interest rate and extend our debt maturities, which should result in substantially reduced interest expense going forward. Lastly, all assumptions I provided last quarter pertaining to our 2026 guidance remain unchanged. Thank you. I will now turn the call back over to Gary G. Smalley.

Gary G. Smalley: Thank you, Ryan. To recap, we have kicked off 2026 with excellent first quarter results, marked by record operating cash flow of $147 million, solid revenue growth, adjusted EPS of $1.03, which was up 58% year over year, and continued strong backlog of approximately $20 billion. This backlog underpins the confidence we have in our ability to deliver double-digit revenue and earnings growth and continued strong annual cash flow in 2026 and beyond, as our newer projects progress through design and into construction. Our business continues to perform well, and we expect our solid project execution to continue.

The long-term outlook for Tutor Perini Corporation remains very bright given today's backlog of long-duration, higher-margin projects with improved contractual terms, operational improvements we have made in our Specialty Contractors segment, persistent favorable macroeconomic tailwinds, and strong public and private customer funding that is fueling vibrant market demand and numerous major bidding opportunities. Importantly, we also believe that we are getting closer to the time when all of our segments will be firing on all cylinders, which will allow us to demonstrate more fully our growth and earnings potential. Thank you. I will now turn the call over to the operator for your questions.

Operator: We will now open the call for questions. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. One moment, please, while we poll for questions. Our first question is from Michael Stephan Dudas with Vertical Research Partners. Please proceed with your question.

Michael Stephan Dudas: Good afternoon, gentlemen. I share my prayers with the families as well. First, Gary, you talked about several large projects that will be coming up for bid, half this year into 2027. Could you assess that relative to what projects may be rolling off in some of those regions and how you are balancing the opportunities, your capacity, and maybe expand a little more on Guam and the Indo-Pacific, since you mentioned pretty large opportunities there?

Gary G. Smalley: Great, Mike. First of all, some of these opportunities are already in the hopper. They have been submitted, and we are waiting on the results. We should know something, in some cases, later this month and in other cases next month. On capacity, you should feel reassured that we are not going to pursue something we cannot handle. We do have some work that is winding down in California, and we will use some of those resources to staff other work. All the work we are pursuing, we have people ready and raring to go, and we will execute the work soundly.

If I look at what is out there and what we would expect to book provided we get anywhere close to our fair share, it is going to be, by far, a net add. There are so many opportunities. Compared to the last time we talked, there is more out there. Some of it has moved closer to fruition; other cases are new opportunities that we are pursuing. The pipeline is rich, and we think we are well positioned for a fair amount of these opportunities. If we get to a point—we would love for this to happen—where we cannot handle anymore, then we will sit on the sidelines.

We are not there yet, and we do not think we will be there at this point. We look forward to reporting on increased backlog as these opportunities come home.

Michael Stephan Dudas: Thanks for that. As you assess the margin performance, which seemed solid across the board in Q1, what is the cadence as we move through 2026? Is it mainly ramping volume and capacity, and what could push you to the high end of the ranges versus maybe into 2027?

Gary G. Smalley: It is exactly what you said. It is about volume. The first quarter is always a slower quarter for us. It is difficult to estimate because you do not know the extent of weather impacts. As we progress through the year, volume goes up, and we expect margins to go up. These larger projects that we have been booking are ramping up and will only get stronger as the year progresses. Some of that is weather, but other factors relate to projects being early in their development and gaining momentum. I would expect 2026 to gain strength each quarter, and 2027 will be a follow-on to that.

Operator: Our next question is from Analyst with UBS. Please proceed with your question.

Analyst: Hey, good evening. Thanks for taking my question, on for Steven Michael Fisher. First, I noticed that you changed the language around 2027 EPS expectations to significantly higher on the upper end of the 2026 guide, from just higher. Is that right, and what makes you more confident now relative to three months ago? Can you talk about your confidence level in achieving this level of earnings in 2027, specifically from work already in backlog, or is there still more work to book?

Gary G. Smalley: If we did not book any more work, 2027 is going to be a blowout year, as is 2026. There will be more work to book, so we will be even better. What gives us more optimism or confidence is time has gone by; we see how things have developed, how the new work is progressing, and how settlement discussions are progressing. All those things together make us as confident as we can be. We affirmed guidance; we did not raise it. That is always something to consider as we go forward. We did consider it this time because we feel better about how things are shaping up, but we also want to be conservative.

We are very pleased with the execution of the new work and optimistic about building on the great backlog we already have.

Analyst: Thank you. Relative to inflation, what are you seeing in the business now, and how comfortable are you with your contingencies in areas where you do not have the ability to reindex to inflation?

Gary G. Smalley: Good question. In some cases, we do have the ability to reindex with inflation. Where we do not, we are covered. We are very conservative in how we address contingency, and we have the buyout process we have discussed before, where early on we firm up commitments with subcontractors and vendors to pass on pricing change risk. So we are good with respect to inflation.

Operator: Our next question is from Liam Dalton Burke with B. Riley Securities. Please proceed with your question.

Liam Dalton Burke: Thank you. Good evening, Gary, Ryan, Jorge. Gary, your balance sheet is much stronger and your cash position is great. You are returning cash to shareholders. Does your strong liquidity position allow you to pursue larger projects without having to consider a joint venture partner?

Gary G. Smalley: It absolutely does, and that is our preference, of course. We have great joint venture partners and appreciate what they bring to the table, but if we can do the work on our own and not have to share 20% to 30% of the margin and cash, that is ideal. Being a stronger company now compared to a year ago offers us opportunities to do more on our own.

Liam Dalton Burke: Great. On bidding activity and potential projects expanding, is the competitive field increasing or pretty much the same? Part of it is that data center activity has pulled some competitors off the projects you are bidding on.

Gary G. Smalley: From last quarter, there is probably not much change. The trend has been less competition, whether due to data centers or the sheer volume of work. There will not be more competition in the short to medium term as far as we can see, because of the magnitude of work and the few firms that can do the complex work we pursue. We do not see new competitors entering the market right now.

Operator: Our next question is from Min Cho with Texas Capital Securities. Please proceed with your question.

Min Cho: Great, thank you. First, on Black Construction: I know that is a higher-margin business for you. Can you talk about your annual run rate of revenue there and what you have in backlog? How big can that business get, and what are the bottlenecks to driving more growth?

Gary G. Smalley: Hi, Min. We generally steer away from discussing specific business unit revenues, but on backlog, Black exceeds $1 billion. Some of their work runs two to three years; other projects are four to five years. We are looking to build that. It is an extraordinary business with a very talented workforce. It probably will not double from here, but it could grow significantly from that starting point.

Min Cho: Thank you. On your recent Army Corps MATOC award to support the Energy Resilience and Conservation Investment Program, how much of that $2 billion is within Tutor Perini Corporation’s addressable business, and what types of construction projects are expected there?

Gary G. Smalley: All of it is within what we do and do well. The work under that MATOC varies: it can be Building, Civil, and Specialty work. Our workforce at Black in Guam and surrounding areas is very talented and diversified. We also have PMSI, which is well equipped globally, generally with an emphasis on building, but between those entities, we can do just about anything.

Min Cho: Thanks. Lastly, can you talk about Tutor Perini Corporation’s position on pursuing mission-critical and high-tech projects like data centers or semiconductor campuses?

Gary G. Smalley: We are looking at this closely. We are doing some data center work on the Specialty side and are exploring ways to expand that. We want to ensure we do not give up our core markets, but data center work is exciting and an opportunity to expand margins and increase revenue. You will likely hear more from us later this year as we refine our strategy.

Operator: Our last question is from Adam Robert Thalhimer with Thompson Davis. Please proceed with your question.

Adam Robert Thalhimer: Good afternoon, guys. Great quarter. Following up on Min’s question, are you thinking you might look at data center work for other segments or just within Specialty?

Gary G. Smalley: It is a bit early to go beyond what I said, but Specialty is probably where we see the most opportunities right now. We are also looking at other areas. There is a lot of internal excitement as we evaluate opportunities.

Adam Robert Thalhimer: Great. On the buyback, good to see you do $20 million in Q1. How would you like to pace that from here?

Gary G. Smalley: We bought back at an average price of about $72. There was internal debate because the stock has grown quite well over the last year, and some of us, including me, have bought personally. For me, it was pretty easy on the buyback. Now that we are here, it is not as compelling, but we know we have a lot of upward trajectory to come. We will be opportunistic. We are not planning a set amount per quarter; we will weigh opportunities against cash needs and how quickly we are building cash balances. We have a lot of room left on the buyback and are very bullish on opportunities and the share price.

Either on a personal basis or a company basis, there will be more, but we do not know exactly when.

Adam Robert Thalhimer: Great. Ryan, on the refinancing you said is coming in the next few months, can you give us a sense for the target structure and potential interest rate savings?

Ryan Joseph Soroka: Sure. At this point, we are looking to refinance the notes one-to-one—maybe that could change a little. We are looking at interest savings of somewhere between 400 and 500 basis points as we look at the marketplace. There is still a little volatility out there related to geopolitical issues, so that remains to be seen. We also intend to take a look at our credit facility, looking to upsize it and extend those maturities. Ultimately, the goal is to refinance the notes with significant interest savings and extend the maturity, and extend the maturity on the credit facility as well. Our goal is to get to something with a six handle compared to the current rate on the bonds.

Adam Robert Thalhimer: And lastly, you gave the margin outlook for the other segments, but I did not hear it for Specialty. What is the range, and what percent of their work now is for other Tutor Perini Corporation segments?

Ryan Joseph Soroka: For 2026, we are looking in the 1% to 3% range. Ultimately, we expect Specialty to get up into the 5% to 8% range. We still have a little bit of overhang with some legacy disputes, which tempers 2026 in that 1% to 3% range. At this point, about two-thirds of Specialty’s backlog is on other Tutor Perini Corporation subsidiary projects.

Operator: There are no further questions at this time. I would like to turn the floor back over to Gary G. Smalley for closing comments.

Gary G. Smalley: Thank you, everyone, for your participation today. We look forward to continuing to deliver excellent results and to speaking with you again next quarter. Thanks again.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.