Gary Smalley : And if I could add this Steve also. In my remarks, I was talking about the tax rate and that’s a big part of — it’s just so hard for us to know what that tax rate is going to be or what the impact will be because with our tax rate based on what it is on a forecast for the year, as we whittle down the loss that we have for the first half of the year then the impact on the tax rate is magnified, because that loss shrinks if you follow — it’s math. But so it just makes it more volatile more difficult. So we could — we’d have a better chance of predicting, let’s say, consolidated pre-tax income. But to give an EPS range there’s so much volatility with the tax rate that besides what Ron mentioned it just makes it almost impossible for us to really feel comfortable with an estimate.
Steven Fisher: Okay. Thanks, Gary. And then have you had discussions with lending groups to get a sense of how much cash you need to collect in order to put yourself in a position to be able to kind of reasonably refinance the debt over — in the early part of next year?
Gary Smalley : Yes. Ron, okay, I’ll take this one. Yes, so Steve, we’ve talked to various groups. And the short answer is the more the better, but there’s not really a minimum that we’ve heard. It’s really a function of — certainly, we need to have improved performance. Cash flow generation is a positive. Also what the pricing for our bonds, what they’re trading at right now they’re at 86%. That’s significantly improved from what they were a quarter ago. If we continue to see improvement there then that certainly is a bright sign. Getting down our leverage was a big part. We made some progress in that. So we believe based on the advice that we’re getting, if we continue to do what we’re doing maybe a little better on the earnings side, of course, for the rest of the year we think we’re going to be well positioned.
And then certainly with the outstanding litigation that Ron mentioned litigation arbitration and also some of the other cash that we expect to come in for settlement activity, that should give us another bump that should be helpful.
Steven Fisher: Okay. And it sounds like the environment is such that there are going to be plenty of things to bid on, particularly in the civil construction area. I guess I’m just curious can you talk about your surety capacity at this point? What’s the status of that? Has that been affected at all by sort of leverage and cash collections and some of the legal settlements? What’s your surety bond capacity? And where does that stand at the moment?
Ronald Tutor: Well, we have a very significant capacity, because unlike the public markets, the sureties look at our basic equity net worth, which exceeds $1.2 billion, our cash flows which are positive and continuing to get better and our performance in the major civil work, which is what we’re pursuing. So it’s disappointing as these collections have been and the disputes and the write-downs, and I might add predominantly in New York, which is a very — to be very kind a very challenging place to work, the sureties are 100% in support. At least as we speak, they continue to be supportive as we pursue this major work, because irregardless of the write-downs and the lack of earnings, we have a very substantial net worth, which is what we all look to from a surety and a capacity standpoint. So everything’s fine but it doesn’t mean we have simply got to get out from under these CIEs and back to the norm whatever it takes.
Steven Fisher: Okay. And then just lastly, on the specialty business. Obviously, lots of moving parts in there. I wonder if you could just give us a sense of what the underlying performance of that business is and if you have any plans to do anything differently there. Because from the outside, it’s hard to see that it’s moving in the right direction. But maybe you can just help us with what’s going into the backlog and how and when that might be — might flow through to give us a sense that this is a business that still makes sense to pursue.
Ronald Tutor: Well, let me clarify the Specialty business, so you don’t throw in the good with the bad. We have an operation called Fisk Electric, which operates in Fisk of Texas and Fisk of California, two separate entities in that Specialty group that year after year make money and never lose. We have a mechanical company in South Florida called Nagelbush Mechanical that never loses. We have — our problem in the Specialty group isn’t the entire group. It’s the mechanical and electrical operation in New York City, which has generated half of our CIE. And most of the big losses you see, with respect to the reference to the Specialty group goes there. New York is an incredibly difficult place to work with a legal system that essentially protects public agencies and is very difficult and challenging for contractors.
However, our performance than those of most of our peers in New York have created the decision that at a dismal state there’s nobody left that can bid big work. And as a result, they don’t. So we’ve reached a point where as one of only maybe two players in town that can do a major job, we’re increasing our prices and demanding contract changes which we have forced through. Our Specialty group in New York where all of these problems have emanated, have been reduced to a fraction of their size. And at least for the time being in the near future are only bidding in support of our Civil group and not allowed to do any business with any other contractors developers or agencies direct. So let’s just say their revenue is probably 25% of what it was four years ago, and in the interim they will continue to function only to support us under our control.
So to put it bluntly they’ve been reduced dramatically and we’re in hopes of cleaning out all of the negative work getting all these issues resolved. And then if they grow back up, it will only be on the basis of their performance, which so far at best has been challenging.
Steven Fisher: Thank you very much, Ronald.
Operator: There are no further questions in the queue. I’d like to hand the call back to Mr. Tutor for closing remarks.
Ronald Tutor: Thank you everybody bearing with us. We’ll turn this miserable corner, and I look forward to the next call. Thank you.
Operator: Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.
