Good morning. My name is Katie and I will be your conference facilitator for today. At this time I would like to welcome everyone to the Granite Construction Investor Relations Second Quarter 2019 Conference Call. This conference is being recorded. All lines have been placed on mute to prevent any background noise. And after the presenters’ remarks, there will be a question-and-answer period. [Operator Instructions] Please note, we will take one question and one follow-up question from each participant today. It is now my pleasure to turn the conference over to your host to Granite Construction’s Head of Investor Relations, Lisa Curtis. Ma’am, the floor is yours.

Thank you Katie. Welcome to the Granite Construction Incorporated second quarter 2019 earnings conference call. I’m pleased to be here today with President and Chief Executive Officer, Jim Roberts; and Senior Vice President and Chief Financial Officer, Jigisha Desai. Please note that today's earnings presentation references slides that are available on the Events and Presentations page of Granite Investor Relations website investor.Graniteconstruction.com. We begin today with an overview of the Company's safe harbor language. Some of the discussion today may include Forward-Looking Statements. These forward-looking statements are estimates reflecting the current expectations and best judgment of senior management regarding future events, occurrences, growth, demand, strategic plan, circumstances, activities, performance, outcomes, guidance, backlog, committed, and awarded projects and results. Actual results could differ materially from the statements made today. Please refer to Granite's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions. The Company assumes no obligation to update forward-looking statements whether as a result of new information, future events or otherwise. Earlier this week we made a preliminary announcement of our results for second quarter 2019 and the impact related the four legacy unconsolidated heavy pivotal joint venture project. Certain non-GAAP measures may be discussed during today's call and from time-to-time by the Company's executives. These include, but are not limited to adjusted EBITDA, adjusted EBITDA margin, adjusted net income or loss, adjusted earnings or loss per share, committed and awarded projects, backlog or results. Please note that some metrics also may reference or include non-recurring acquisition related expenses and one-time integration costs. Reconciliations of certain non-GAAP measures are included as part of our earnings press releases and in Company presentations, which are available on our Investor Relations website. Now, I would like to turn the call over to Granite Construction Incorporated’s President and Chief Executive Officer, Jim Roberts.

Well good morning, everyone and thank you Lisa and thank you all for joining us today. Earlier this week we provided you with a preliminary view of our second quarter 2019 results and an update of our full-year 2019 outlook which was precipitated by unanticipated project charges in the Heavy Civil operating group portfolio. We acknowledge and understand that this represents a significant disappointment for all brand and stakeholders and we understand the concern that many of you have shared since Monday’s announcement. Today I will start with what happened in the second quarter and how we believe it represents the tailwind of Granite’s mega project Strategic Era. Then I will update you on the journey, we started more than two years ago, developing a new path to diversify and to de-risk our now record portfolio work. With our growing portfolio in mind, I will spend just a couple of moments talking about what is next and why we believe our record committed and awarded projects that are known as CAP is increasingly aligned with our strategic initiatives, targeting a path for more consistent profitable results. Finally, I will spend a few minutes talking about why we remain optimistic early cycle demand for us continues to provide wind in the sales through our end market focus segments. So let’s dive into the Q2 details. Through our quarterly project reviews and estimates of complete update our teams reported in late June that they had experienced increased project completion cost in the second quarter of 2019. These costs which were exacerbated by scheduled delays and by the execution of disputed work resulted in the charges reported today and in Monday’s announcement. The charges relate to the four legacy projects bid between 2012 and 2014 that we have been discussing for several years.…

Thank you Jim and good morning everyone. Let me begin with a deeper dive into charge specific on the four legacy unconsolidated Heavy Civil joint venture project and how they impacted our financials. Second quarter 2019 results included non-cash pre-tax charges of $143.7 million or $106.7 million after tax. These costs are reflected in the transportation segment with both a reduction of revenue of $114.2 million an increased cost of $29.5 million. The charges include increased project completion cost exacerbated by schedule delays and execution of a significant amount of deseeded work and by a recent unfavorable quarter link on a project dispute. The revenue reduction represents a decrease in percentage of completion on these projects and it represents the majority of our revenue guidance revision. Percentage of completion accounting can be confusing so let me spend just a moment going through the mechanics. The percentage of completion method calculate project revenue as a percentage of actual cost incurred divided by total estimated cost forecast on the job. This percentage is then applied to total estimated revenue for the job to determine revenue for the period. For these non-cash charges we have significant unanticipated project cost which increased the denominator thus lowering the project completion percentage and thereby reducing revenue. Granite’s discipline cash management and operational strength positions the Company to navigate the current situation while maintaining our strong balance sheet. Our discipline capital allocation strategy has not changed. We remain focused on actions that provide the most appropriate value for our stakeholders. Granite’s consolidated second quarter 2019 revenues were $789.5 million, which includes a reduction of revenue of $114.2 million. On a year-to-date basis revenue increased to $1.4 billion. Net loss per share was $2. 09 in the current quarter including discussed project charges of $2.28 compared to a…

Well, thank you Jigisha. Our construction material and Water business continue to operate well, an important indication of the overall health of our Company. We are very encouraged by the underlying performance of the majority of our business and by the robust and brilliant market environment in which we operate. After 2018, increase in adjusted EBITDA, we began this year targeting another year of better than 30% adjusted EBITDA improvement. Even in light of this quarter's charges, our longer-term outlook has not bent. As we are looking ahead through the rest of 2019, we believe importantly that both our short and long-term earnings trajectory continues to point a meaningful top and bottom line growth in the second half of this year and in 2020. We expect our second adjusted EBITDA growth to more than double last year's 17% growth performance. We continue to develop and deliver exciting expansion opportunities across our end-market focused business. Our focus and investments in our geographical and end-market diversification continue to position Granite incredibly well for long-term, profitable growth. We are prioritizing projects and infrastructure solutions that leverage our broad growing footprint, our diverse capabilities and outstanding dedicated workforce that delivers on Granite's core values every single day. And with that, we will be happy to answer your questions.

Thank you sir. [Operator Instructions]. Our first question comes from the line of Michael Dudas with Vertical Research.

So Good morning everyone. And it’s an early one for you guys I know. I know it’s very early one - sleep last night.

Yes. We just were making sure that everybody on the Ear Coast got the proper time. So, that is we are happy to do it.

And we do appreciate that. Thank you very much. So, my first question is, and you addressed that towards the end of your prepared remarks Jim just few second ago. Yes, If not four of the large project issues and poor wet weather, which everybody was aware of in April and May. if you were to have this - as you look out to the second half and to 2020 and beyond, has the cadence and the visibility improved from what you would have thought, about the same, even just going to through the numbers, and how much of this problem that you are trying to deal with internally relative to the large projects and monetizing rightsizing that is going to show an impact through the results after next couple of years and are there any cost reductions to offset that given what we are going to be restructuring?

Okay so first of all relative to have we seen a change in the markets or the cadence that where we are going, the answer is no. I would say that it is in-line with what we thought was we were going to see happening. The markets are strong we mentioned California that SB1 program is healthy we have seen markets like Illinois now pass a transportation program the state programs are healthy private sector investment is healthy, the mining services business is healthy. So those are the things we saw starting to develop at the beginning of the year, we are starting to seeing develop last year and then hasn’t changed at all. In fact I would say that we are very, very happy with what the basic overall market is heading, it is in alignment with our thoughts. When you look at the Heavy Civil group, we certainly believe that the work we now have on our books today is the work especially we have booked in the last few years is in alignment with our expectations. We also believe that we have covered our current challenges and future risks in the Heavy Civil group adjustments that we made in those four legacy projects that we announced on Monday. So we will have some cost relative to - and I'm not going to call it necessarily a restructuring, but remember we are doing this strategically view on that business so that we are just focused on optimizing results going forward by reducing the risks and increasing the margins and I don’t see significant cost but of course there will be some as we move forward. But we have embedded that and when we give guidance those costs are embedded in the guidance that we provided Mike.

Thank you for that Jim. And my follow-up for Jigisha. As you look at given the charges and everything that you discussed this morning, as you look at the balance sheet how do you feel relative to cash generation second half of the year given the outlook that you have and fact that you are ramping things up so quickly and your cash level on the balance sheet cash flow, how comfortable do you have, is there opportunities to allocate that capital win in other ways maybe to reactivate share repurchases the Board seems to see that fits.

Yes let me address the cash flow question first. Our cash flow generation is dependent on the timing of the distributions of cash from these unconsolidated JVs that is where some of our - I mean lion share of our cash is tied up. As Jim pointed out, we do not expect any additional meaningful cash contributions for these legacy project. So we are expressing our operating cash flows to be positive barring any unforeseeable issue around these non-sponsored JVs. That said we also go through season now already as sketch of our cycle and we tend to see the cash kind of dip at this level, between May and June we probably hit the bottom and then we start building our cash levels in to third and fourth quarter. So that is where you are consistent with what is happening in 2019. And again I think from a capital allocation perspective as I mentioned during my remark. You know our strategy at the capital allocation has not changes, that said we are certainly going to be monitoring what is happening in the pace and we will be opportunistic we do have a $190 million of - $200 million dollars of share authorization in place and we will be opportunistic.

Thank you. Our next question comes from Brent Thielman with D. A. Davidson.

Jim or Jigisha, could you clarify I think you said $350 million is remaining from the JVs and CAP and I guess I just wanted to bridge I think in the last year, you said somewhere around $900 million related to all of your unconsolidated JVs, I guess. Can you just update some performance of the other jobs in it?

Okay. So let me just focus a little bit here on the jobs that we have been talking about from a week here, the four unconsolidated jobs that were bid. We call them the megajobs that were bid in 2012 and 2014. We can call them the problem jobs, the megajobs that caused the large charge in this quarter. Those jobs have about 350 million or less in our backlog and in our CAP going forward. We do have some other unconsolidated jobs, but they are smaller. And certainly they would be in addition to that amount Brent. But I don't know, I don't have the number in front of me of the exact amount of backlog in those numbers. But overall, all the work in that portion of our portfolio is about 1.8 billion for the entire Heavy Civil Group.

Okay. And then I guess my follow-up, Jim curious, the contracting dollars associated with SB1, are they moving at the pace you expect now, I guess the agency beyond some of the bottlenecks maybe previously seen to get this forecast?

Well, it kind of goes, Brent, what happens with California to kind of goes into lumps. And interestingly, the first half of the year was substantially higher than last year, which is good, which is what we expected. Even when I say that, even in Q2 2019 this year, we saw our awards up about over 50%. So that is really healthy. We also saw that we are getting a larger share of the California work, which that we had in previous year. So that is good. And it comes in, I'm going to say again, buckets. And right now, we see a large amount of work bidding in the second half of 2019 that they have released. The California Transportation Commission puts a list out and so it's coming, I would say as planned on an annual basis, but it's very lumpy during the year.

Thank you. Our next question comes from Jerry Revich with Goldman Sachs.

Yes, hi, good morning everyone. Tom can you give us a rough understanding out of the project write downs this quarter, what proportion of that was to the single project that is only 60% complete versus the three others that are with 90% complete? And can you say more about your review process this quarter and what triggered the review, I can certainly understand the comments on rainfall and litigation. But this is a really big adjustment, and presumably, we are contemplating making adjustments last quarter to some extent. Because I don't think that is big catalyst this quarter outside the litigation, so maybe you can talk about your process there as well.

Okay. So Jerry, first of all, what we don't do is talk about individual projects, because every one of these four projects is in some form of a dispute resolution process. And therefore, I really don't want to focus on how much of the charge was on the job, that is only I will call it two-thirds complete because I think we work to do with that owner and relative to the resolving disputes. But what we do every quarter is, we go through a detail costs estimate to complete every job and so this quarter was no different than any other quarter. We actually by I would say beginning of June, beginning of the third month, we go to through an exotic detail task to complete and the issues that occurred that were cumulative in these four projects or new issues that became apparent to us I would say by the time we had concluded our forecast by the end of June. And then obviously we had some resolutions and dispute that we had a rendering of the decision in early July. So, they are just seeing under protocol issues that we are doing every quarter on these large projects and it just happened to be one of those quarters where we have host of items that occurred same time.

And I appreciate the ongoing discussion with customers, but the reason for the question is the implications for the stock, are we really different a big chunk of the charges comes from the project that is only two-thirds complete versus the ones that are scheduled to reach completion this year.

I understand that Jerry and I will this that, the project that is two-third complete, I will say we have a good relationship with the owner. We are continually working on dispute resolutions and I believe that the work we are doing with that order has progressed nicely in the last three months in the last quarter and we have got more work to do with them. But what is about the extent of I think is appropriate to talk about on that that job itself.

Next question comes from Alex Rygiel with B. Riley.

Thank you Good morning everyone.

Good morning Alex.

Jim can you comment on July hours worked in weather related to June?

Okay. So I don't have the hours sitting in front of me right now, but I will say this Alex, it was healthy. It was a very busy month. Weather is in excellent shape as we have seen it for June and July and especially July would be - weather was less impactful to our business than June. And as I mentioned, we really are working six to seven day weeks in almost all locations now. So, July will have been a healthy month as well, but I don't have the man hours in front of me.

And Jim to Jigisha, it looks like in the Specialty business, margins were down in 2Q of 2019 versus 2Q of 2018. I didn't hear in your call weather is an issue in specialties I was curious by margins point have been a little soft.

I don't know if I have answer for that. The margins are actually pretty good in Specialty. In fact I think they are actually quite healthy, and there is no reason to suggest that there is any issues there at all, I think you are still in the mid-teens in Specialty. So with that in mind, we have one location that we had strike with large customer that occurred for most of the quarter. That strike was resolved at the end of the quarter, that might have had some impact. I would suggest Specialty businesses is operating in a very nice level.

Yes. I would agree to that the mining activities were impacted as a result of some of strike that Jim referenced. Otherwise, looking at the quickly year, I don't think anything that kind of jump at it, but we can certainly guide difference of that. And again this is a - Specialty segment has been kind of like the potpourri and it’s mix driven by diverse work of portfolio. So this one probably will fluctuate from a year-to-year or to quarter-to-quarter depending on the completion of work.

There might have been a little bit on the Specialty side, just hasn’t everything else as well Alex. But I do think it is a very healthy market.

Thank you. Our next question comes from Steven Ramsey with Thompson Research Group.

Good morning I want to delve into the alternative procurement space. Maybe talk to how these projects are focused in certain geographies and if it’s an expanding field to play in, do you expect them to alternative procurement to hit in sectors outside of the transportation sector overtime.

Okay so I think that is a pretty broad question Steve and I think that is a really good environment to talk about, because the procurement delivery methods are changing across what I see in the U.S. and it is not strictly a transportation issue this is in general. What we are seeing is that as you saw this migration of projects to a larger size we saw this huge risk shift over to the contractor and Jigisha mention about ten years ago, contractors are willing to assume that risk or at least the contracts who mandated to assume that risk. So in today’s environment what we are trying to - what we are seeing is that the owners and the contractors agree that we got to get to the gold line - job in a satisfactory manner that provides a product at the end of the day that is a win, win. And to do that we have alternative procuring methods allow you to expedite the process of the bidding and to reduce the risk. And I will give you an example, this CMGC which is not just a transportation issue, this can happen in Water, it’s going to happen a Specialty mining you can have with private sector you can have what public sector. But these alternatives methods are where you literally create environment where the owner chooses the contractor and it may just best on qualifications. And then lot of these patients we are literally either negotiating it twice that the owner and the contractor - or we actually do an open book estimate and that open book estimate literally allows the owner to understand what the contractor has included in their bid. Therefore as the job progresses the owner knows whether or not there a dispute is reasonable, because they know whether or not that was anticipated at the time of the bid. And that is the biggest thing the issue I see today is that as things change on these jobs and they are fixed price jobs that the owner assumes that the contract have those issues inside their bid and as a contractor didn’t and so the dispute arises and we have what we call disruption claims. So the idea here is to create a stronger relationship between the owner and the contractor at the very beginning and have a very open relationship. A key ingredient so the win, win in this industry is - be when we do not have disputes at the end of the job. That is the bottom line and that has to change in this industry, and progressive design, build CMGC, CM At Risk, and negotiated work are all better options than fixed price and then battle out the disputes at the end of the job, that process is not working.

Thank you for the color. And then maybe to understand a little bit more the unfavorable impacts. You said it happened in early July, did that hit actually hit Q2 results? And may be talk to off the charges. how much of that was due specifically to the court ruling?

Okay, so Steven, the we have got the decision in the second week of July. And it was a bench decision. So in other words, the judge provided a ruling. And we did book it into the Q2 results. So as soon as we knew it we were closing our books for the second quarter, and the books were still available to be have the adjustment made and it was significant material to the Company's financial. So we did book it in the quarter. Now here is - the reason that I can't quantify it or I can quantify but I'm not unwilling to share it right now is that we have not seen the details of the ruling and we are in the process. Once we get that information, we will determine whether or not we believe it should be appealed or not. But until then, until we have all that information, we believe that it is probably in the best interest of the Company in case we need to appeal it to kind of get hold those financials close to our best for the moment. But it is a material event and when we have our books open, we still need to book those items if we have knowledge of prior to actually the earning which is you know obviously now, today.

So regardless of whether we decide to appeal it or not, we are required by the accounting rules to make the adjustments on our financial as soon as we know about it.

[Operator Instructions] Our next question comes from Joe Giordano with Cowen & Company.

Hi Good morning. This is [Robert] (Ph) and for Joe. I'm just looking at the legacy projects in the. The Legacy projects that you took right downs there was four different projects. I was wondering, one, how many other legacy projects are in your portfolio? And do you think they face similar risk and also have these projects been evaluated already as well? And I have one follow-up.

Okay, Robert, well, we call these the four legacy projects, because they were bid between 2012 and 2014. These are the only jobs that we have in our portfolio that we were bid in that timeframe. And we also have isolated these four jobs because of the fact that they are all for over $1 billion and they are all for unconsolidated joint ventures where we are already are a minority partner in each and every one of them. So there are no more in this in this category. Now. With that said, Of course we have a host more award projects that we have in our portfolio that we bid after 2014. And certainly starting in 2017. We have a whole new portfolio of the type of work that we have been building since then. And we evaluate these projects every single quarter in detail as to how they are performing. So every other project in our portfolio has been evaluated in detail as of June 30th. As just as a reminder, in every forecast that we have in place, is intended to cover all the current challenges and future risks in them. So every one of those items has been covered. And just to reiterate, we have no other projects that we will bid from 2012 to 2014 in our portfolio.

Okay. Thank you. And then, what gives you comfort that current projects don’t need to be adjusted further or do you feel like there are write and downs everything that has been taken is enough to cover anything that might pop up in the future? Thank you.

We are confident that we have covered current challenges and the future risks and the forecast that we have provided for not just for legacy projects, but for all of our work.

Thank you. Our next question comes from Michael Dudas with Vertical Research.

Hi, Jim. Just two quick follow-up. Thanks for taking them. First, maybe to elaborate on the new alternative project delivery and CNGC work you are doing, what gives Granite a competitive advantage to be successful in winning those type of work? Because it sounds like it’s a type of delivery project that you acquired everybody would like to do, because not fixed prices and its open book and you can negotiate the with client. And how that they are - and is lead to the selectivity where you have to go to get those projects that what you can generate to the customer that you have the confidence to get in the projects done on time and under budget.

Sure, Mike. And I think that really is the key question. So, it sounds like the process is great, which we do like the process, because it creates the opportunity to have a better beginning, pricing and relationship with the owner. And the key ingredient to these is to provide something different to the owner that not every contractor can provide. I will give you an example, we mentioned this starting on Monday in our release that, we focus on relationship, we focus on local labor pools, we focus on knowing the subcontractors, the vendors, we focus on knowing the owners requirements and their specifications. And what we do is we literally have a I will call it qualification process with them and then we took and go through oral interview. And the key ingredient is they are looking for a partner. This is a partnering approach, and they want a partner that they feel comfortable with that has the resources to physically build their work to create an environment to get projects done on time at a high quality and that can openly provide I will call it a task towards completion with a cost basis that is acceptable. These owners have a different approach towards business from the perspective of pulling everything on the contractor. They want to get the job done and they want to get it in a timely manner. What happened in the last decade is that, projects are coming in behind budget, behind timing and over budget, and a big portion of that is because of the ongoing disputes that are happening between the owner and the contractor. This relationship not only talks about creating a stronger relationship, it provides open discussions to partner and making sure that the job success is the priority for both partners and it’s not about just being cheap, it’s about finishing the job on time, so that the owner can provide a product to the customer.

I was going to add Mike that, there is a lot better collaborations on a risk sharing discussion which also happens on the front end side because we have seen a shift from the owners to the contractors on lot of these risks whether it’s easy and then full of permitting or environmental all of those things have been much more discussed in advance and priced accordingly and I think that is then the positive around the CMGC procurement methodology.

And I think maybe Mike to address what makes a difference is about we provide in the markets that we have strength we obviously have very strong resources to bring them at table that looked at our labor or history in the market they look at the equivalent we provide they look at the resources statistical resources of our materials businesses and they also look at the bigger grant the stay back if they need to bring in additional resources beyond what they have in the local market they can bring an incremental resources as well. So this is why we said in our discussion earlier this week is that where we have local strategic advantages is where we want to do our work. And it is very difficult to parachute in from an external environment and have advantages so we are going to be focusing on areas where this type the owner would like to have because we are different and we have stronger resources.

Jim I just wanted to, one more question I couldn’t let the call end without you providing your recent thoughts with your political antenna out there on what is going to happen on Washington and it’s early encouragement on what EPW is doing in and is there a chance we get something maybe even for 2020, you want to go 2019 to shift gear left.

Okay Mike so my view on Washington we will talk strictly about transportation otherwise we could talk forever Mike. So relative to the transportation it’s encouraging to see the senate coming up with some all I call it a skeleton bill which is a nice substantial increase from the current FAST Act. I personally don’t see them coming to a conclusion, but I do think the skeleton approach towards getting the discussions started is imperative. And I will say this also, having coming out of the Senate is unusual. Usually these things - laid up through the House. The Transportation Infrastructure Sub-Committee. So having the senate take the lead on this thing really bypasses the set, but the key now to success is because the House TMI sub-committee to come up with something similar. And I think they will, but I think the key differentiator here that is going to cause this thing the lag is going to be obviously the funding mechanism. And I would say this that when you look at what Illinois just did and they double your Gas Tax to provide - of the $45 billion overall bill $33 billion is associated just for surface transportation. So they doubled our gas tax and I think what we are going to have to come to conclusion within DC is a very strong funding mechanism to get anything done. I believe we are going to get full bill done before the exploration of the current bill. I think that is a win, win for both parties. It’s a win for Congress, it’s a win for the administration. I don’t believe we are going to get stepping down in 2019, but remember that exploration of this is in September of 2020 and I think that is a win, win for everybody to get something done. It’s nice to see that works start already Mike.

Thank you our final question for today comes from Jerry Revich with Goldman Sachs.

Yes hi thank you for taking the follow-up. Jim, I’m wondering if we just go back to the other large projects that are in the book, as we just build our comfort level around where they stand today. Can we just talk about what proportion of remaining large construction work that we are seeing revenue burn now for multiyear projects. Can you just give us a little bit more color in terms of on the composition of the remaining book of business, I think last year your large construction run rate was a one billion B-school projects where I believe were in the $350 million $400 million range so can you just talk about the remaining pieces and what kind of projects they are and what duration?

Sure, I think our run rate is that we have had a similar rate overall, but I will say that the composition has changed. You know outside of these four legacy drivers, really the jobs are smaller, they are faster burn but they end up probably having a similar revenue teams that we had historically. Also Jerry, we are starting to see more of that and I'm going to call it large project portfolio in our what will be ultimately our vertically integrated businesses and some of that at CNGC and CM AT Risk work and so we are seeing that being built by our local businesses in the committee and selected award projects. So smaller work, negotiated the largest job that we have on our books, that we put on our books in the last two years with our negotiated job.

With a private owner.

With a private owner. Good point Jigisha and they are all Granite led, I don't think we have put anything into our backlog in the last two years that is not a Granite led or a Granite sold venture project. So on top of that of all that work we have 1.6 billion of the backlog where the CAP is now negotiated work. So it's different work than those four legacy projects. I mean a substantially different work.

Thank you for the color and then in terms of getting back to the mid-teens gross margin that you talked about, what timeframe did you have in mind and what is the top-line based solution we should be thinking about as we will no longer be competing for these types of projects that I believe on a trailing basis are somewhere in the $400 million revenue range. So is it as simple as reducing through the size of the opportunity set by $400 million and mid-teens gross margins on the remaining business or can you frame that for us at all?

If I understand correctly, Gerry let me talk about two things. You know the cadence, but the margins gross I think we have been, we believe that by the end of 2020 that we will be approaching the mid teen margins in this part of the business and that is how we can, it’s still consistent. I don't think that the smaller jobs that we are bidding is going to change the overall top-line. The top-line is really a I will call it a product of the burn rate, and so although we are bidding smaller jobs where we put more smaller jobs into the portfolio they burn faster, they still create a top-line that we have talked about historically and going forward and so I don't see that changing, but I think that you are seeing that as our CAP continues to increase that there is a more diverse portfolio of smaller work, but remember we talked about this for several quarters now. We believe the most valuable work is the faster burn work for a host of reasons, first of all it does generate you know very quick top-line and bottom line, but it also is less risky, because it’s easier to bid and project out cost on a shorter term basis, we certainly have found that out with these legacy projects trying to price out work that takes five to seven years is obviously very, very difficult to do. So this quicker burn work will create a very similar top-line, and it will probably take us to the end of 2020 to get back to the mid-teens margins.

Yes. Jerry, the other interesting part is that for the last three months in a row, we have seen our bidding schedule for jobs less than $150 million of anywhere around a $1 billion a month. We are bidding about a $1 billion worth of work, which is a huge change from the prior year. Because that small amount of work that we used to do that used to work from somewhere around $450 million to $350 million to $500 million. So we have seen a complete flip into the dynamics of our portfolio of the smaller jobs. And we are pursuing those instead of going after these $800 million or a $1 billion job. And I think that's been the shift in our portfolio bidding.

Yes, I think that to really emphasize that Jerry. As I go around Granite, we do our Town Halls. I have been doing this now for quite some time. And I remember putting up on the screen, the monthly bid lettings for our normal work outside of our larger projects. And it was down to about 250 million a month. And now for the last three months it is been right at $1 billion. So the market is flushed. And I do think that, Jigisha right on. That is going to be the core driver of our growth and our steady, lower risk portion of our portfolio, which is by far the vast majority of our CAP today.

Thank you. This is the end of our Q&A. I would now like to turn the conference back over to our hosts for closing remarks.

Well, thank you everybody for your questions. A quick note for our shareholders and investors. Jigisha, Lisa and I will be on the road in conferences visiting our operations and investors around the country throughout the second half of 2019. So please reach out to Lisa and we will look forward to speaking with you and meeting with you. And as always, thank you to all of our employees for keeping your fellow workers safe, for exhibiting Grant’s core values every single day. As always Jigisha, Lisa and I are available for follow-up if you have any further questions. And have a great day everybody. Thank you.

Thank you. The conference has now concluded. We appreciate your attention. Have a good day.