Greetings. And welcome to the Primoris Services Corporation Reports 2016 Third Quarter Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Kate Tholking, Director of Investor Relations. Please begin.

Thank you, Barack. Good morning, everyone, and thank you for joining us today. Our speakers for today will be David King, President and Chief Executive Officer; and Pete Moerbeek, Executive Vice President and Chief Financial Officer. Before we begin, I'd like to remind everyone that statements made during today's call may contain certain forward-looking statements, including with regards to the company's future performance. Words such as estimated, believes, expects, projects, may and future, or similar expressions are intended to identify forward-looking statements. Forward-looking statements inherently involve risks and uncertainties, including without limitation those discussed in this morning's press release and those detailed in the Risk Factors section and other portions in our Annual Report on Form 10-K for the period ending December 31, 2015, our quarterly report on Form 10-Q which we filed this morning, and other filings with the Securities and Exchange Commission. Primoris does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. I'd now like to turn the call over to our CEO, David King.

Thanks, Kate. Good morning, everyone, and thank you for taking time away from this exciting presidential election news coverage to join us today. We had a busy quarter, but I'm pleased with our third quarter results as they were generally in line with our expectation excluding our plans to divest our Texas Heavy Civil operations. We had solid execution in the face of continuing pricing pressures and a challenging permitting environment. We have continued our drive to strengthen our business development in sales operations and that is reflected in our record $2.7 billion backlog which includes our expected spreads in the Atlantic Coast Pipeline project recently awarded to Spring Ridge Constructors, LLC, a joint venture construction company including Rockford Corporation which is a Primoris Services company. Clearly, concerned with our Texas Heavy Civil unit which we plan to divest and the dispute settlement on the pipeline job make our numbers a bit more challenging to digest this quarter, but I'll leave that to Pete to walk you through those details in a few moments. First, I'd like to focus on some of our achievements this quarter. As we've indicated over several quarters, we felt positive we would prevail in our dispute to collect our funds on one of our completed pipeline projects. We have now successfully closed that collection dispute and those funds have been received. We've also generated over $50 million in cash flow from operations this quarter, closing the quarter with over $148 million ending cash balance. We continue to drive to lower SG&A cost having reduced these costs year-to-date by $9.7 million. We've added to our backlog this quarter, in all of our financial reporting segments continuing to grow our MSA backlog and increasing our backlog significantly in some of the historically higher margin performing areas. We've…

Thank you, David, and good morning, everyone. As you can tell from this morning's earnings release or from the 10-Q, it was a very noisy quarter. So that we can get to your questions, I will focus only on some of the key highlights. As David mentioned, we benefited from the settlement of one of our collection actions. The benefit was not only very good as a cash receipt, but it also provided a positive impact to our earnings. Prior to the settlement, the project had been recorded at a 0% margin. So, the settlement allowed us to add about $27.5 million to revenue and after paying our attorneys about $26.7 million in profit during the quarter. Excluding the benefit of the settlement, our total revenue for the quarter decreased by $75.6 million compared to the third quarter of last year. OnQuest revenues decreased by $12 million as they completed a micro LNG project in the last year and the revenues at our Primoris pipeline division headquartered in Rosharon, Texas declined by $12 million as we performed less maintenance and smaller pipeline projects in a very difficult environment for our traditional midstream customers. The bigger decrease in revenues, however, was at our Heavy Civil division where work for our three primary state Department of Transportation customers declined by $47.2 million compared to the third quarter of last year. We were able to increase revenues by $13.5 million from our other Heavy Civil customers, but the net revenue decrease for the Heavy Civil division was almost $34 million for the quarter. The completion of two Mississippi projects reduced revenue by $19.7 million, with an $18.6 million reduction from TxDOT revenues. That provides a segue to the significant challenge this quarter which relates to our TxDOT work. We announced last month that…

Thank you. We will now be conducting a question-and-answer session. Our first question today comes from Lee Jagoda of CJS. Please go ahead.

Hi. Good morning.

Good morning, Lee.

Morning, Lee.

So, if I look at the Texas Heavy Civil write-down, is there a way to give us the project gross margin assumed in the remaining backlog of the Texas work?

Well, for the projects that are in loss position, we obviously assume a 0% gross margin. I think for the rest of the work, you're probably looking in – as we do all our Heavy Civil works somewhere in the 5% to 6% to 7% work.

Okay. And then assuming, given that it is part of your guidance because it's not a discontinued operation, if you take the Texas business out of your guidance, how much of a drag is it on the $0.95 to $1.15?

It's not. We're assuming that it's pretty minimal impact, Lee.

Yeah. Lee, this is David. I might add a little color for you also. If you remember, gosh, going back several quarters now, we talked about that we were redirecting that unit to also start looking at more airport work and some other non-TxDOT-related work, and those particular kind of projects carry a little higher margin than the TxDOT work.

Okay. One more from me and I'll hop back in the queue. In your press release, you mentioned that there was a productivity issue at one of the projects in Texas, I would assume not related to the heavy highway piece. Can you talk about the characteristics of that project and how much of that is left to be completed?

We're at the end of the job.

Yeah. It's the (25:23).

Oh, sorry. Sorry. Yes. Yes. Yeah. Sorry, now, I was looking at Pete to make sure which project you were asking about, Lee. Sorry about that. Yeah, that project is at the very end of it. It was one where we had hoped that we could get some turnaround in some of the productivity on the job. I would say that the team was working off of some engineering drawings that could have been better, but we should have assumed that our productivity would maybe not have been as good as we were assuming it would have normally been on a job of that nature. And that project is really at its completion. It's pretty much out of the system.

Okay, great. Thanks.

The next question comes from Jason Wangler of Wunderlich. Please go ahead.

Hey. Good morning, guys. Just on the...

Good morning, Jason.

...on the win on Atlantic Coast, just curious as you look at that, it's obviously a year away or so, do you see a lot of spending on your end as far as capital or even from personnel standpoints as far as when you start to ramp up that job? Or is it mostly just going to be able to move your Florida folks up to the north further? Just curious on that.

Yeah. It will be moved – move the equipment and people north and forward. As you know, Jason, probably starting a year or two ago, we spent quite a bit of CapEx, if you remember more than our typical D&A on getting some new equipment and things for these big side booms and a lot of other equipment. And so, we should not have to see any major capital purchases to be able to move forward on that project.

Okay, great. And then just on the share repurchase, just curious the board's or your thoughts on the size and the timing of it. Obviously, pretty quick turnaround. You only got a couple – basically two months to do it. Just as you recoup that money and the balance sheet is in good shape, where do you see that maybe going? Is this just kind of a one-off or is there something more that you guys are looking at given what you're thinking is an opportunity in the stock right now?

Well, the original intent was to maintain the share level consistent for the purchases of shares by management and the shares we issued to the Board of Directors, and that's roughly what the $5 million will get us. I think we certainly have the ability and the board has certainly talked about the fact that we think that we can do better in the share price and that if the opportunity remains, that we would look at increasing both the length of time and the potential money that we would invest in share repurchases. Our preference is still to spend our money on acquisitions, but we've certainly not had a great success with those over the last year or so. So, I think we're – the board is now looking at the possibility of using some of that cash to purchase shares.

Yeah.

Okay, great.

And, Jason, I'll add one more thing. Just Pete said, these employee stock purchases in our LTI plans, if we run true to course, we typically have almost 100%. It's like 99.5% of the employees that take advantage of buying the company stocks. So, as Pete said, we just want to go ahead and buy that stock up.

Great. That's helpful. I'll turn it back. Thank you.

The next question comes from Ryan Cassil of Seaport Global Securities. Please go ahead.

Good morning.

Good morning, Ryan.

Good morning, Ryan.

So, in your comments you mentioned the two southeast pipeline projects that have begun. Could you talk about the cadence of those projects and where we stand today, any color there?

Absolutely. Frank Welch, and Josh and myself and Tom McCormick went over there, I guess, about two weeks ago and took a helicopter ride over both spreads, over the Sable Trail spread and the Florida Southeast Connector spread. We've got some great videoing of it, but we're right now currently ramped up to about somewhere in the 400 people to 450 people on each job, so roughly 900 people to 1,000 people between both of those projects working. We'll probably go up somewhere closer to the 1,100 people or 1,200 people. So, we've got a little bit more manpower to add into it. The bulk of those right of ways have all been cleared. We've got pipe strung out. We've got pipe gangs going, welding going on. As far as the burn-off on it, I think, we've always said we would probably burn mostly and I think, Pete, this is in our numbers, but confirm me right or wrong, I think we both mostly said those would burn through until about May or June timeframe of next year.

Correct.

Okay. Okay. Thanks a lot. So, did that get started fairly kind of ramped through the third quarter and really get going at the end of the quarter or any color on that?

We really only got about one month of effect out of it in the quarter. I think we've put in some notes or something somewhere about October is when we really got started on some of that work. There were some minor work that went on over there ahead of time, but nothing of any significance until basically that late September-October timeframe.

Yes. Thanks. And then for the Atlantic Coast Pipeline, it's probably a little early to talk about profitability because you're still divvying up those spreads. But can you talk about – I know there's some more difficult spreads there, change in elevation. Any color on how that's being divvied up and how you guys feel about just the profitability of that project in general.

I'll just make this comment. It's a little too early for any of us in our consortium. And I think that's why our other consortium members have been careful to talk too much about it also, and I will follow suit on it. There are some difficult spreads or some other spreads. It's not – I think the consortium, in general, is agreeing that we kind of all spread it accordingly equally. So, if I can leave it with that, I'll leave it with that.

Okay. And then last one from me. I think, correct me if I'm wrong, but I think you said $6 billion bid cable for other pipeline projects. Are there any that could be awarded here in the near term? And just any kind of color on the competitive environment? Any changes there would be great. Thanks.

Well, I think on the large diameter pipeline business, that market is getting somewhat tight because of the number of contractors that can do that kind of work and the backlog that obviously us and others are beginning to book. The work that I was talking about and there are some large projects out there that the timing of them is still suspect as to whether or not they go sequentially at the same time as ACP or a little bit behind ACP or maybe even a little bit ahead of ACP. There are still a lot of other opportunities out there, though, that we know that would fill in nicely between these Florida jobs and ACP. And obviously, they're not the $1 billion type projects nor that we want the $1 billion type projects to fill in between those two. We want to be able to get some projects that we could book and burn in a six-month period of time, maybe in the lower range of that $200 million, $300 million or $400 million type work.

Okay. But those have to be first quarter or fourth quarter, first quarter awards to really get those up and started in time to fill that gap?

No. Typically, on these, you could – a lot of these we bid and book and literally start the next month on some of the smaller projects and things. So, they could be awarded to us as late as second quarter and still have those burning and booking in third quarter and fourth quarter.

Great. I'll turn it back. Thanks.

Thanks, Ryan.

The next question is from John Rogers of D.A. Davidson. Please go ahead. John Bergstrom Rogers - D.A. Davidson & Co.: Hi. Good morning.

Good morning, John. John Bergstrom Rogers - D.A. Davidson & Co.: Just a little bit of follow-up in terms of the way these pipeline projects roll in, especially in calendar 2017. So at this point, the Florida job should be, I would assume, remain pretty productive all through the winter. And then it's into the summer you'll see a dip. Is that the hole that you were referring to or the...?

Yeah. The hole I'm really referring to – you're absolutely correct, John, in your first part of your comment. One of the reasons we strategically went after those two projects was, we don't have to worry about winter in Florida too much. So, yeah, those two projects will continue to burn through the fourth quarter, first quarter, and they will burn into the second quarter, but then, they'll begin to tail off at the end of the second quarter. So, the hole I'm talking about trying to fill is between that and when ACP starts, and ACP right now is not expected to start until 2018. So, what I'm looking for those last two quarters of 2017. And there's plenty of opportunities out there that would fit quite nicely. Without going into too many details, because I don't want to give up the particular projects that we're trying to go after, but there are some very worthwhile companies that are still doing quite well in that marketplace that – three or four of them that we're continuing to talk to about projects that are in that. Some of those projects, as little as $50 million and some of them $300 million. John Bergstrom Rogers - D.A. Davidson & Co.: Okay. Thank you for that. And then just in terms of the Energy segment, the dip in revenue that you saw in the quarter, ex the recovery, was some of the projects that you've been awarded recently been some of the power work on the East Coast? I don't know if you've gotten some of the additional micro LNG projects, but are we at a low point in that business?

Well, that's a good question. I listened a lot in the marketplace and look also at whether or not we're at that low place. There's a lot of projects that got – didn't get stopped, they just got kind of put on hold for a moment from the perspective of waiting to see. I think a lot of it had to do with election. I think a lot of it had to do with price of oil. So, we really didn't see them get stopped or canceled. We just saw them get postponed for a period of time. And now, we're beginning to see some of those release and I can mention a few of those because some of them are publicly announced jobs. Obviously, you've seen Exxon and them talk about the big project, Exxon and SABIC that they're investing money down the Gulf Coast. You've obviously seen projects talked about from the perspective of UON petrochemical, some of those projects. So, we're still seeing those opportunities. It's the timing of them that we were concerned about because right now, for us, on the industrial side, and I talk open-shop industrial, and then I can also talk the union side. On the open side, on the industrial, Conrad's group is obviously still very involved in the ethane cracker in Louisiana, but were beginning to pick up, and maybe this goes to your question about are we seeing some recovery. We're beginning to pick up some hydrogen-related facilities and some other projects that are support facilities that companies are beginning to invest in that will support some of these larger mega projects that we're going to see come up. So, we are seeing some of that. Now, in the micro LNG side of the business, we proposed, we went through two feed (37:39) packages. I think I mentioned that one of the projects is still very much alive. We're still hopeful that we can get something out of it in 2017. I don't think it's going to be awarded in 2016, but at least the customer is still telling us that there's some micro LNG opportunities for us in 2017. I think some of the larger LNG facilities that we do some subcontract work and things on, some of that is proceeding at a slower pace. I don't know if that's added enough color to you or not, but I'm trying to give you as much detail as I can. John Bergstrom Rogers - D.A. Davidson & Co.: No. I appreciate that. It's the color I was looking for. And last question, if I could. The Texas civil work, the $395 million in backlog, what was the rate that that is expected to burn off?

Well, we know that the two that we still have the five jobs along that I-35 corridor and we're going to be booking those at 0% margin in effect, and off the top of my head, I want to say that's a little over $200 million. That will probably take two years to get totally done. John Bergstrom Rogers - D.A. Davidson & Co.: Okay. And...

(38:59) John Bergstrom Rogers - D.A. Davidson & Co.: Okay. Thanks. And Pete, did you say what the revenue contribution from those operations were in the quarter?

I think we did in the Q. And I apologize I don't have it right in front of me. But I'm pretty sure it's in the Q. Yeah. I want to say it's like (39:18) I don't want to get in trouble, I'm going to let you... John Bergstrom Rogers - D.A. Davidson & Co.: That's okay.

I know it's in the Q. John Bergstrom Rogers - D.A. Davidson & Co.: Okay. Thank you.

The next question is from Dan Mannes of Avondale. Please go ahead.

Hey. Good morning, everyone.

Good morning, Dan.

Morning, Dan.

I was wondering if you could maybe walk me through the guidance change, i.e., did you have anything in terms of positive margin in your previous guidance for Texas Heavy Civil and/or for Carlsbad? So when you walk us forward, did you have to pull anything out before you put some stuff in like Doswell?

Yeah, there was a little bit for Texas Heavy Civil because we thought at the end of the second quarter that we were getting towards the bottom after we took some of the big write-downs. So, obviously, the $37.3 million was not in what we had anticipated for guidance. I think that when we look at what we see happening over the next four quarters of guidance, we see that there are some positive contributions that we can get from things like the highway work. So, it's not a very big number. And obviously, it's a percentage going forward as a percentage of revenues since you've got such a large piece that's going to be 0%. Your overall margin numbers are going to be pretty small but there's still some small positive contribution if we sold it tomorrow which would be wonderful. I don't think we would have a significant change in guidance.

And was there anything for Carlsbad in your previous guidance?

We talked about some possibility that it could start some time towards the end of the year and I think we've left kind of that same sense. We're doing a little bit of that small limited notice to proceed work just to keep the project going. But it's not – again, it's not something that you're going to see significant nor material impact on anything going forward.

I think where we had it, Dan, was roughly about June of this next year. And if you got a figure that the first six months on that project, you're not – you're really not burning much. So, you can kind of lay it in that way, if you want to, if that's a little color for you.

No. That's helpful. Because the other thing, my understanding is, once you get that non-appealable order out of the California Supreme Court, then you're probably going to have to go back and renegotiate your contract with the NRG just because you'll be pretty close to the previous in-service date.

Yeah. You've read it correctly.

And besides that, the non-appealable order will probably be appealed.

Okay.

It is California, Dan.

I understand. Real quick on ACP. The $625 million, is that your best guess today? I assume you're leaving room, though, that depending on how the whole thing's split up, that could actually end up being a bigger number?

That's a best guess we got right now. We don't want to – we didn't want to put too much and have to back out some nor did we want to put too little and have it not be representative of what – as far as what we're telling the market. I think that's a pretty good ballpark number, Dan.

Fair enough. The final question I have is just in terms of your capacity. You've normally talked about having two large spreads of capacity. And I'm assuming that's about a two large spread number at ACP over two years. What does that do for you in terms of your willingness to bid on things in terms of the gap period? And two, does that pretty much lock you up for the vast majority of 2018 and 2019?

Well, and – I'm sorry, hold on a second, Dan.

I was going to say we do have a third spread.

Yeah. Yeah. We do have a third spread. That's right where I was about to go, but I didn't know where Pete was looking at me at, but – for. Dan, we got more capabilities in there. I've got to tell you, if anybody on this call wants to see something that's absolutely fantastic, you need to go look at that stuff in Florida and see how fast we've moved and how fast we are moving. I mean, I told Frank Welch and those guys, I said, yes, we got a lot more capabilities than we think we have on some of these. And so, I'm really not worried about that ACP blocking us out, bidding on anything because there's some great opportunities out there that aren't as big as ACP obviously that we will be going after.

So if I go visit, can you show me a gopher tortoise?

Would you believe it. I think I can to be honest with you. I got to tell you, that is some interesting things over there.

Sorry. Thanks for all the color, guys.

Thanks, Dan.

Our next question comes from Matt Tucker of KeyBanc Capital Markets. Please go ahead.

Hi. Good morning.

Good morning, Matt.

Just a couple questions on the Texas Heavy Civil divestiture. You mentioned that you won't sell if you don't think you're getting a fair price or something to that effect. How long do you expect this to play out? Or how long are you going to give it? And do you intend to keep bidding for new projects while this process plays out?

Yeah. Let me start with the last part of it, Matt. Yeah, we intend to keep bidding. Now, what we've done is, and again, part of this goes back to some of the things that we mentioned over the past few quarters. We're not just going after TxDOT work. We started that Texas Heavy Civil group looking at airport, some other municipality works, things that obviously for us drive a higher margin and have a little bit more of a quick bang and burn for us. In other words, they're not huge mega projects, but they make more profitability for us. So, yeah, we are still bidding. Now, will we continue to bid some TxDOT work? The answer is yes, because obviously, this unit is more valuable if we have some backlog in there. But at the same point in time, what we've done is we put a lot tighter controls on what we're bidding, what kind of contingency we're carrying in those jobs, and what kind of margins we're carrying in those jobs and the size of those jobs and the burn-off period of those jobs. So, we've taken a little bit tighter control of that. So, if we win that work and I think we will win some TxDOT work, we're going to be winning it at a little bit higher margin than what we had before with a little bit more of a conservative risk profile than what we took over those past projects and definitely to burn over a shorter period of time so that we don't have some of these issues related to labor effects. As you know, we had labor effects before work shortages whenever the I-35 corridor work was going on. There's so much building going on in the major cities along that corridor that workforce was expensive and we had to do a lot of things to get workers, period. So, we are putting a lot more tighter controls around that. So, yes, we are bidding. How long will it take to sell? I don't know. We've got a banking firm, as you know, hired to go try to sell it for us. I think we'll see some opportunity there. As far as I'm going to concern, we're going to continue to try to sell it and work through the issues and move forward and hope we do sell it quickly. But if we don't, it's not a fire sale as Pete said.

Thank you. That was helpful. And then shifting gears a little bit, the utilization gap that you're potentially looking at in the second half of next year on the pipeline side, what does your guidance assume around that for the third quarter? Are you assuming that you are able to fill that or partially, if you could just comment on that.

Yeah. We certainly are assuming that they're not all going to stop work and go home and we just incur depreciation. So, we anticipate that they will receive some jobs that are not necessarily of the magnitude as the work that they're doing either now for the two Florida jobs or what we anticipate doing in 2018. But we do anticipate that we will get some work and that they will be able to cover, for example, their overhead.

Got it. Thanks. And then on the Atlantic Coast Pipeline and the consortium there, I understand you're still in discussions, but hoping to get a better understanding of how that's going to work. Are you essentially going to get assigned your spread or spreads and then you live and die based on your own performance? Or is it your understanding that you'll split everything equally with the consortium partners in terms of revenue and earnings? And so their performance could ultimately hurt or help you?

Well, I'll share as much color on it as I want to right now, Matt, if I can. But let me comment this. The four Consortium members that make up that joint venture or the joint venture partners, all four of us, and I'm throwing us in there too, great, great companies that think alike and very cooperative with each other and negotiate for the common good of the Spring Ridge Constructors, LLC. So, each of us understand what the problems and the opportunities may be on that job quite well. And so, each of us are taking a very eyes open that how do we each handle the work and divvy the work up, divide the work up so that each has got good spreads and each has got some more the difficult spreads. And then we've each had conversations about how we back each other up in case there are any issues with one of those spreads. That's the beauty of the four companies that's involved in that. I've got to tell you, I think great companies, all four of them together. And all four of them with this JV even make a stronger entity. So, I'm really not anticipating any issues there.

Thanks. I appreciate the color. I'll leave it there.

There are no further questions at this time. I would now like to turn the floor back over to David King for closing comments.

Thank you, operator. Thanks for participating on our call today. And we appreciate all the questions and your ongoing interest in Primoris. This concludes our call.

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