Aecon Group Inc.

John Beck - Chairman Terrance McKibbon - President and CEO David Smales - EVP and CFO

Benoit Poirier - Desjardins Capital Markets Yuri Lynk - Canaccord Genuity Paul Lechem - CIBC Bert Powell - BMO Capital Markets Chris Lalor - GMP Securities Chris Murray - AltaCorp Capital Inc. Ben Jekic - Industrial Alliance Securities Sara O'Brien - RBC Capital Markets Michael Tupholme - TD Newcrest

Good morning, everybody. Thank you for participating in our 2014 year-end conference call.

I'm David Smales, Aecon’s Executive Vice President and CFO; and with me this morning are John Beck, Executive Chairman and Terry McKibbon, President and Chief Executive Officer. I’ll remind our listeners that some of the information we’re sharing with you today includes forward-looking statements.

These statements are based on assumptions that are subject to significant risks and uncertainties. Although Aecon believes that the expectations reflected in these statements are reasonable we can obviously give no assurance that the expectations of any forward-looking statements will prove to be correct.

I’ll touch briefly on Aecon’s consolidated results for the year and review results by segment before turning the call over to Terry. Overall Aecon’s 2014 results demonstrate solid progress towards continued margin improvement, record year-end backlog, and a record level of new contract awards for the year.

Full year revenue of $2.6 billion was $455 million lower than 2013 with revenue in each of the infrastructure, energy and mining segments impacted in 2014 by longer than anticipated securing and ramp up of new projects. Adjusted EBITDA of a $170.2 million for 2014, which represented a record full year adjusted EBITDA margin for Aecon of 6.5% compared to $184 million, a margin of 6.0% for the year ended 2013.

Operating profit of $63.7 million in 2014 was $33.6 million below 2013 primarily due to the noted lower revenue in 2014. The Board of Directors of Aecon yesterday approved an increase in the annual dividend on the basis of Aecon’s continued progress and positive outlook.

The dividend will increase to $0.40 per share from $0.36 per share to be paid in full quarterly payments of $0.10 per share beginning in April. This marks the fourth consecutive annual increase in dividend.

Backlog was $2.7 billion at December 31, 2014 representing a record level of year-end backlog and compared to $1.8 billion at the end of 2013, an increase of 50%. All three major operating segments saw significant improvement in backlog year-over-year.

Not included in backlog but important to Aecon’s prospects due to the significant volume involved is the expected recurring revenue from Aecon’s growing alliances and supplier of choice arrangements. New contract awards grew to an unprecedented $3.5 billion in 2014 compared to $2.4 billion in 2013, a 45% increase.

Turning to results by segment, infrastructure revenue of $872 million was 13% lower than the previous year. Revenue was higher in heavy civil operations following several new project awards in 2014 but was offset by lower revenue in social infrastructure and transportation.

Operating profit of $4.4 million however was $22.6 million higher than in 2013, with improvements in both transportation and heavy civil operations. Infrastructure backlog at December 31 was $1.3 billion, or $143 million higher than the same time last year with most of the increases occurring in transportation and heavy civil.

New contract awards in the year totaled $1.3 billion in the infrastructure segment compared to $700 million in 2013, reflecting the impact of several large project awards during 2014. IN the energy segment revenue for the year of $1.3 billion was $145 million lower than the previous year, with lower revenue occurring in utilities due to lower volume from pipeline projects in Western Canada.

Operating profit of $6.6 million in 2014 was $27.5 million below the prior year. The decrease occurred in industrial operations, primarily in Western and Central Canada.

Energy segment backlog at December 31 of $955 million was $79 million higher than the previous year primarily from new contract awards from industrial operations in Western Canada in the resources sector. New contracts awards in the Energy segment of $1.3 billion were $56 million higher than in 2013.

Most of the increase occurred in industrial operations in western Canada and in our IST business. In the mining segment revenue of $516 million in 2014 was $190 million lower than the previous year.

A substantial portion of the decrease due to lower volume of site installation work in the commodity mining sector. Operating profit of $20.7 million in the mining segment for 2014 was $27.3 million lower than the previous year, largely due to volume reductions in both commodity mining and contract mining sectors.

Mining backlog at December 31 of 436 million was $359 million higher than the previous year and new contract awards of $875 million were $403 million higher than in 2013. The increase in both backlog and new awards was largely due to new projects awards in both the commodity mining and contract mining sectors.

In the concession segment revenue for the year ended 2014 was $2.9 million. Operating profit of $18.7 million represented a $2.1 million increase over the prior year due to higher revenue and profitability from the Quiport JV.

Following a full year of operations at the Quito airport following the transition to the new airport during the first quarter of 2015. At this point I will turn the call over to Terry.

Thank you David. As David mentioned Aecon’s 2014 results were representative of our continued disciplined focus on improving margins.

Entering in the 2015 all major projects in backlog are proceeding well and we remain focused on securing the right type of work execution and risk management to ensure that this margin progression continues. In the infrastructure segment in addition to a number of new projects now underway a large number of major projects are currently being pursued and due to be awarded in 2015 including many of which Aecon has already prequalified for.

Aecon’s exemplary prequalification record on major infrastructure projects, which is at 90% over the last few years demonstrates Aecon’s expertise and capability to deliver large, complex multi-disciplinary projects. We therefore expect to continue to win our share of these awards with our partners.

Strong backlog, pipeline of opportunities in infrastructure is expected to lead both revenue and margin growth in 2015 in this segment. In the energy space new opportunities are emerging for fabrication and module assembly work with our fabrication shops for the first time at full capacity.

As well we continue to see new, record new opportunities for communications work and a growing demand for pipeline integrity work. In the near term the demand for utilities work, power and [indiscernible] refurbishment at fabrication and module assembly services is expected to remain strong.

In the mining segment while commodity prices generally remain relatively weak, Aecon is entering 2015 in a strong position as a result of new work secured in 2014 with record mining backlog of $436 million. We will continue to focus on key sectors such as potash where Aecon has been able to establish its credentials as a leading contractor for large complex site insulation projects.

Volume in contract mining may see some pressure in 2015. However in this regard Aecon has secured new work in the oil sands.

Opportunities are also being pursued to increase non-oil related work carried out by the contract mining fleet as well as optimization of Aecon’s fleet. Additionally the concession segment continuous to partner with Aecon’s other segments to focus on the significant number of public private partnership opportunities, which Aecon is primed to respond to.

Generally, the largest - the number of large-scale project that Aecon participates in has grown significantly as has our share of these projects. As we move through 2015 we expect the strong pipeline of infrastructure projects being pursued and the demand for Aecon’s broad spectrum of services in the energy and mining segments will continue to contribute margin growth.

I’ll hand the call over to John, who will now speak to the broader outlook.

Thanks Terry. Highlighted in the outlook at the end of the third quarter was the potential risks related to lower oil prices and the impact on related spent in the oil sands.

While this trend has been borne out through the end of 2014 and into early 2015, it is mitigated to some extent for Aecon by a number of factors including the strength of our backlog in each of Aecon main operating segments including oil sands related work. Important to note as well is that the nature of mining work Aecon performs in the oil sands is in large part linked to production rather than new developments and there continuous to be a strong pipeline of diverse opportunities in the approximately 80% of Aecon’s revenue not linked to oil related spending.

Our overall positive outlook for 2015 is based on five specific key drivers: Number one, the strong backlog in each of Aecon’s diverse operating segments with a margin profile that supports the strategic goal of continuing to improve our adjusted EBITDA margin. Number two, the significant number of new infrastructure projects now ramped up and progressing well with the large number of major opportunities in the bidding and pre-qualification phases.

Number three, opportunities in the energy segment related to power plant facilities including nuclear, pipeline integrity, utilities and the strong utilization of fabrication and module assembly capacity expected in 2015 based on current backlog. Also there are opportunities for further awards on existing projects underway in the mining segment as well as opportunities to diversify the contract mining business.

Number four, reduced MG&A and overhead spending as a result of initiatives undertaken in the fourth quarter of 2014, and lastly concluding the strategic initiatives with respect to Aecon’s interest in the Quito airport concession. As usual, the second half of 2015 is expected to be stronger than the first half reflecting the typical seasonality of Aecon’s work and capital expenditures are expected to remain relatively consistent with 2014 levels.

Overall Aecon’s diversified portfolio of work, focus on execution and strong financial resources continue to be key strengths in capitalizing on the opportunities ahead. Thank you.

I will now turn it over to the analysts for questions.

Yeah. Good morning, thank you very much for taking my questions.

Just in terms of booking now the update is that you’ve been pre-qualified for 22 out of 25 major projects. So I was just wondering whether some contracts have been out and just in terms of booking if we should expect the size of those projects to be better than the $3.5 billion booking you got in 2014.

So just wondering about the magnitude of these major projects?

Benoit, it’s Terry. A couple of things were happening, first of all the volume of larger opportunity for us is continuing to be very strong.

If anything it’s growing not declining. Our success has been consistent.

We recently had a new prequalification on a project in Western Canada that just we were notified on in the last week or so. So the number is growing of larger opportunities.

So two things that are important to point out, the projects are larger and Aecon’s stake in these projects is also significantly larger. So as our company has grown and we built a team to respond to this market sector we are able to capitalize on a larger percentage of the opportunity.

Okay, is it fair to see that the booking for 2015 even exceeding the level of 2014?

Benoit, it’s Dave I mean that is possible based on the projects in front of us, but don’t forget that we have already successfully booked some of those projects, that pre-qualified for. Examples would be the Waterloo LRT Light Rail Transit, the Adlington [ph] Tunnel, the Regina wastewater treatment plant, there are three other projects that are included in that prequalification that are already booked in ’14.

So as long as we continue to win our fair share going forward the level of new awards in infrastructure should continue to be very strong.

Okay and just on the energy segment, obviously the market environment is quite different versus six months ago. Just wondering if whether the given the uncertainty whether you’re still confident to improve your margin in 2015, are you taking any proactive measures?

We’re first of all, we’re - the backlog we’ve got in our energy businesses is significant. I mentioned in my comments our shops are at capacity and we have overflow that flowing in Ontario as we speak.

The predominant client focus we have is on the majors and the current mix of the business that we have is work that’s proceeding. So we have a strong nucleus of work well through ’16 and not specific to the oil side which has got the pressure.

We continue to see a number of opportunities that are growing in the energy side relative to power, whether it be hydroelectric or in gas fired generation or in nuclear. And so we expect to see a consistent performance out of our energy business through ’15 and beyond.

Okay perfect, and just lastly on Quito, obviously profitability improvement very solid in the quarter, just wondering how sustainable and if we should expect even further improvement in 2015 and if you could give us an update on the divestiture process and the potential use of proceeds? Thanks.

Yeah Benoit, the performance from Quito has been very good from day one in terms of the new airport and there’s no reason why that level of performance and results isn’t sustainable going forward. In terms of the divestiture process we are at an advanced stage of exclusivity with one party.

The process is unfolding along the path that we expected. The only issue at this point is around timeline but the valuation process and everything else has been for some time now with no real change in direction and we’re just unable to put an opinion on the exact timeframe right now other than we continue to move forward.

Okay and what about the use of proceeds, Dave?

Yeah, I think obviously we have a convertible debenture due at the end of October this year and that would be part of proceeds and then other than that with the strong pipeline of projects we have particularly on the P3 side, the need to have a strong balance sheet and the ability to invest equity in those projects, the cash from Quito supports the continued growth in the area. We are very focused on building that portfolio of P3 projects in Canada and obviously the proceeds from Quito would help in that process.

Okay. Thank you very much for the time.

Thanks a lot.

Thanks. Terry or Dave in the energy segment how do we think about margins, EBITDA margins in '15.

A number of puts and takes, obviously I think you are telling us on the fab side you are going to have better absorption of overhead cost there, but can you speak to any pricing pressure you are feeling from the major oil and gas companies that you work for because there is a lot of talk out there them squeezing suppliers such as yourself looking for price concession?

Yeah, I think we're lucky that we have a well-established relationship with our major clients and we are working closely with them on a number of opportunities that we can jointly reduce cost in a way whether it’s sharing resources and just being creative. That's been the focus for us.

We, as I said earlier, we have a strong backlog that takes us through '15 and '16 with the existing contracts and I would comment the pressure certainly on newer work that’s out there but in our current mix we are quite content with the load that we have and the capacity in the short term to pursue some of the new opportunities. So for us, I think we're pleased with the mix of work we have and the scale of that and we expect to see consistent performance and targeted performance through 2015.

So is consistent performance kind of flattish revenue and margins, is that what you are referring to in that segment?

We got an increase load currently on the fabrication and module side so we'll see growth there. Obviously we've got a mix, our energy business is a series of different entities who are coming off a very large pipeline program and going into '15 we've got some of that work remaining and probably the one area that we've got capacity that's opening up the back half of '15 for pipeline.

And if I can just add to that, Yuri when we talk about continued margin progression we are really talking about that in all three of our segments. In 2014 energy was a little lower from an overall margin perspective versus ’13.

Some of that was tied to some projects that wound down in the latter part of 2014 but the offset of that in terms of the fabrication module assembly capacity should see - it certainly gives us the opportunity to see better margin progression in energy in '15.

Okay. And in the infrastructure segment, I think on your last call you kind of pointed to a 5% to 6% long term EBITDA margin target in infrastructure.

Should we be in that range this year or just approaching that with maybe 2016 a more realistic timeframe to enter that kind of target range?

Yeah I would say, I mean clearly there has been some momentum in infrastructure in the last quarter to ramp margins, which reflects the ramp up on some of these larger heavy civil type projects. We expect to see that continue to contribute good progression in 2015 and if we are successful on a number of these issues that Terri talked to his comments through '15 that will obviously help as we go into 2016 and beyond.

So I wouldn't quote a specific timeframe around that other than we have good momentum there, which will drive progression in '15 and providing we have a normal level of success on pursuits this year in that space I think that will continue into '16 as well.

Okay. That's it from me guys, I'll turn it over.

Thank you, good morning. Wondering what impacted or if it could be more specific in terms of what impacted the infrastructure revenues in Q4.

They seemed extremely weak versus even last year or so. You cite in your MD&A building [ph], but I'm just wondering if you can get more specifics on why so weak?

Yeah so as far as infrastructure goes, I think we said in our Q3 outlook that some of the delays we've seen in Q3 continued into the first part of Q4. And so that's certainly had an impact.

And then just really timing of some of the work in Western Canada, but really nothing other than some timing issues. Again coming into this year we are - those projects that were delayed into the first part of Q4 are now all up and running.

And so other than normal seasonality that we see in the infrastructure business '15 will be more representative of a normal run-rate from a revenue perspective.

Okay, the restructuring charge you booked in Q4, can you give us some comments about what - was that a cash - were they cash charges and what's the hoped for savings, cost savings going forward from there?

Yeah it was primarily a cash charge and we took the opportunity to consolidate some offices and reduce headcount in a number of places, including in our social infrastructure business where we've been shrinking that business deliberately overtime, as we refocus it on water and waste water and transit opportunities and pulled in some of the other lower margin type business that we had. But we've obviously been working off some of that work overtime but we saw in Q4 we'd reached the point where we're able to do some of that consolidation and take some of the costs out from that business.

And as we were doing that we look to other opportunities across the business to become more efficient and take down cost. So it’s primarily consolidation of some off season and reduction in headcount.

And in terms of savings we're looking at - on that outweighing Q4 or kind one year payback. So that kind of gives you the order of magnitude of the savings.

Okay, lastly on Quito, it's sounds like things are moving in the right direction. But I am just trying to sense of why this process dragging out, is there anything that is a sticking point in terms of the negotiations, any details you can provide in terms of what is hanging up the actual process at this point?

So it's John, how are you Paul. The process is a process which is very clear, very defined, a step-by-step.

There are many levels of approvals and we're well through some of them, but not through some of the others. And they just take the time that they take.

There all is moving in the right direction but to tell you exactly when would be foolhardy because we just don't know when we will get through some of the approval processes, but there is nothing indicating any difficulty at this time.

So just if I may one final follow up then on that, given the remaining - the convertible debentures due later in the year is there any thought that you might refinance them, like you did the ones last year or is the expectations you have this process wrapped up in time to actually be able to repay those converts?

I think at this stage the expectation is we would have it wrapped up in time and obviously we'd revisit that over the course of the year if that proves not to be the case. But I think we feel confident at this stage that, that won't be necessary.

Okay, thanks very much.

Thanks Paul.

Yeah thanks. I just want to go back on Quito for a second.

This - the process has been going on for quite some time now. And I'm just wondering is - has the party, you cited one party, has the party at the table changed since the process.

Or is this simply just red tape after red tape and that's the issue with getting this done.

Red tape after red tape.

That's it. So it's the same I think John you said in the past, the Blue Chip I think is how you described the party, the same entity is still at the table?

Right, it's a known entity in the airport business in Latin America.

Okay, okay. Okay, that’s good, thank you.

And then I just want to go back to the - I guess the energy and the mining segments would be the segments where you have the most of your soft backlog work comes to those segments. And given what’s going on in the end markets in energy and mining, can you give us a sense of what those contributed to revenues and profitability in ’14 for those segments?

And how customer behavior today is affecting that more tenuous kind of work?

So the recurring revenue would split reasonably equally between energy and mining. Overall, around quarter, just over a quarter of that total revenue comes from recurring revenue and I would split evenly pretty much between mining and the energy segment.

On the energy side, we’re going to be very careful to differentiate oil and gas versus our energy portfolio, which is a range of different end markets from just oil and gas. And all of that recurring revenue is not related to oil and gas working in the oil sands.

It is primarily utilities type work, which is all local distribution and it’s with the - hydros and Union Gas and Bell and Telus and others. So no real impact on that, that continuous to be a very strong part of our business and growing overtime.

On the mining side, the recurring revenue is obviously primarily linked to the contract mining business, which does operate primarily in the oil sands. And I think as we said in the comments, we are looking at a number of opportunities that would diversify that fleet.

But we do recognize there is some risk of softer revenue through the second half of 2015 in that business. If people cut discretionary spend around the areas where we use that fleet, that will be reclamation and things like that.

So a little exposure on the contract mining side, but overall if you look at all of recurring revenue the vast majority is pretty solid and growing.

So how - when you think about the contribution from that, the recurring stuff from a margin perspective from the non-recurring stuff. Is that typically giving you mix today relatively more profitable or…?

In the energy segment that contribution from recurring revenue is pretty much in line with our overall margins in that segment. And in the mining segment contract mining tends to be, I mean the mining segment overall tends to be a decent margin business in contract mining certainly contributes to that, because of the capital involved, it tends to be a little bit higher from a margin perspective.

Okay, and if you think about the backlog for the energy and the mining segment, is there higher embedded margins in the backlog this year relative to last year?

Yeah and that’s what gives us confidence when we talked about continued progression on margin, it’s really knowing what’s in the backlog and the mix of work, and the margin profile of that work that’s what gives us confidence to make those comments.

Okay. Thank you.

Hi guys. Just a follow-up in the contract mining side.

Can you talk just a bit about how discussions have been going with customers in terms of pricing and what your outlook is in terms of margin over the next kind of year or so on that side of the business?

So couple of things, it’s Teri here. We consider earlier that because of the long relationship we had with our key customers, we’re obviously working hard to identify joint opportunities where we can improve the efficiency of existing sites and find areas we can cut cost.

Obviously our customer base is mature and they’ve been through these downturns before as have we. So we obviously have the ability to work jointly with them in those opportunities.

We also mentioned that there are some other offsetting opportunities that are evolving now. The timing is quite good to offset and offload some of that capacity.

And we’re also looking at optimization with the market today with the combination of U.S. dollar and demand coming into the U.S.

we do have the opportunity to rationalize some of those assets if there is strong capacity. So I think we’re quite pleased with the opportunities in front of us to balance our capacity in according with the demands that are out front of us but I would say the demands are pretty significant right now for that quarter for mining fleet business.

Okay and the weakness that the energy market is experiencing right now do you see any acquisition opportunities in either the energy or the mining segment and is that something that you would consider at this time?

Well we certainly, we’ll always look at something that we think would improve the company but it’s not an area of current focus, we’re very focused on the discipline with our one Aecon strategy to take the business forward and we’ve had good success with that but we’re still focusing on that journey and I would say that that’s a bigger priority for us, the disciplined approach on improving margins and taking our company to where we think we can take it.

All right great thanks a lot.

Thanks guys good morning. Just looking at the Quito transaction and just looking at some of the notes around it, we got the net asset now but just thinking about it post the sale transaction are you going to be left with anything either on or off balance sheet that you’re going to be responsible for?

Relating to Quito no.

Really, so all the guarantees go with the sale or everything like that so what we see on the balance sheet should be pretty much the baseline number then that’s a fair thought?

Yes.

Okay, thanks guys. And then just, can you elaborate a little bit what you’re talking about maybe reallocating some of the mining fleet, is that just trying to move it into different parts of the business or is that more thinking about rationalizing the equipment base down or just even changing the type of equipment that you’ve got there?

I think it’s all of the above, Chris we have a number of new mining opportunities that are evolving that are outside of oil sands. So we’re focused on those and they take some time but they are progressing.

We’ve got a number of large infrastructure projects that have a different mix of work that can utilize some of that capacity and I think the unique thing about Aecon is that we’re a full blown partner in those opportunities and leading a number of them as opposed to expecting to be a sub-contractor. So that’s one of the unique advantages we have with that fleet.

And then as I said earlier, there is ability for us strategically to reduce that fleet to match the demands because of the demand coming out of the U.S. and the gain on the Canadian dollar.

We’ve tested the markets in February and found them to be quite encouraging. So we expect that’s another alternative for us but like I said we’re very focused on a number of larger opportunities right now and we’re quite content with the demand that we have.

Okay and if you’re - with the aim of repurposing that equipment would it require capital investment or would you just be able to move the equipment and just keep going?

No we keep our fleets obviously balanced relative to their refurbishments and we try to keep consistent capacity available. A lot of these opportunities you sometimes can take advantage of having the fleet available to turn quickly.

So we - that’s our focus and the alternative is long lead times to order this stuff so it’s one of the advantages and one of the strategic reasons that we are in that business.

Okay. Thank you guys.

Thanks Chris.

Yeah, hi good morning. I have a couple of questions mostly on the modeling related, but just one probably the last question on Quito.

So in terms of your negotiation, is it fair to assume then that’s it’s the point of no return, you don’t have like a plan B in case something goes wrong?

There’s always a plan B, but at this stage plan B is not required. So there is always a plan B but we focused on plan A right now and getting that to the finish line.

Okay. On the marketing and G&A expenses, how should we look at that.

You said that there were some kind of costs of bidding this year or rather in 2014. Should we just assume that’s going to kind of grow together with the revenue or will there be some costs that won’t be kind of repeating themselves?

Well I think in terms of bid cost 2015 we will see a number, as we’ve talked about a number of large pursuits throughout the year that will see bid cost also elevating in ‘15 similar to the way they were in ‘14 if not a little bit higher in ‘15 given the size and scale some of these projects and the number of them. But the offset to that would be the savings, we talked about from the restructuring we undertook in Q4.

So overall we don’t expect to see a major shift in SG&A in 2015.

Okay and then on the tax rate how should we think tax rate going forward?

No real change in terms of the effective tax rate in any of the jurisdictions, provincially or federally and our average tax rate on that basis is around 25% to 26%. and other than timing differences or anything of a one-off nature that 25% to 26% range is kind of the expected tax rate.

Okay, thank you.

Hi, good morning.

Good morning, Sarah.

Question on financial resources and I guess letters of credit required, you got a couple of larger bids outstanding that could be awarded in the next quarter. How do you feel about the ability, I know you have $250 million from export development in Canada but what kind of LCs would be required if you were to win or both of those contracts and what kind of equity contribution would you expect to need for 2015?

So from an LC perspective we do have ability to upsize our facility available for P3 projects with BDC. And so if we are successful on those projects we have additional capacity available to us that we can use for those projects.

So from an LC perspective we have no concerns around our ability to meet those requirements and that’s probably how we look at our positioning in all these projects is making sure it takes within our availability if we are successful on them. So that’s no concern going forward, in terms of being successful on these projects.

In terms of equity requirement, again dependent on which projects, but again typically we look percentage participation in each of these projects and the equity required and make sure that all fits within a reasonable basket deal. The other philosophy we have is that we never commit more in terms of equity that we expect we make in terms of construction profits.

I guess the final thing to say the equity contribution is usually is much further down the road. The first its financed from early debt financing, the equity checks tend to be relatively small and they tend to be further down the road in terms of the timing of when those equity payments has to be made, so that’s not a really a 2015-2016 type issue.

But the equity checks are usually pretty small on these projects.

Okay, and then maybe just on the larger projects that are in the bidding pipeline right now. In terms of accounting for profit on those is that a case where are you start, day one you start accounting for the expected profitability on the contract as a percentage of completion.

So I'm just wondering if there is a ramp period where it could actually be a drag for your not recognizing profit but recognizing revenue, or does it come as of day one you start recognizing that percentage of profit.

Yeah it's on a straight percentage of completion basis. So there is no time lag.

Okay, thank you.

Thank you, Sarah.

Thanks, good morning. Just one question, you'd mentioned that you are work in the pipeline sector of large diameter pipeline was going to be winding down.

They're going to be having some excess capacity there. Is - I haven't heard you talk about any opportunities on this call on that front.

Is that something that in the current environment there could still be opportunities there or is that unlikely?

It's Terry. Certainly there we're continuing to look at opportunities on a fairly regular pace, various sizes.

We have seen a significant increase in demands for integrity pipeline work which utilizes a lot of the same forces and a lot of the same equipment. So there is many of the new ones you hear a lot about those, the big ones are getting closer.

Obviously energy would be a very large opportunity right now. And then eventually some of the western ones potentially, but there is still interconnects and there is still opportunities in….

And can you just elaborate on the integrity opportunities. Are those, I mean I gather they are smaller but are they potentially more profitable?

I think it would be consistent the size is smaller but there is a series of them, so you spread out over a vast area. I think with the infrastructure and the scale and the infrastructure that exists in Canada, it's an opportunity that we're putting more focus towards.

It's an area that we've done a lot of that type of work in certain markets. But we're putting a lot more focus towards that.

What we like about both that sector of business is that's it's essentially recurring revenue and obviously it suits us well. So and it stems upon existing relationships with existing clients where we're doing large recurring revenue opportunities in master service agreements for multi-year, it’s the same clients.

So we have that dynamic as well. So we're - and then obviously we're still keeping our eye on some of the LNG opportunities, some of the smaller ones going to be progressing in a faster pace now.

So we see those and there is pipeline related work on that, that is required in those areas as well.

Okay and then just one other quick one. I think it's clear, but I just wanted to double check.

The ramp up issues that you experienced in Q4 in some of the same projects that have those issues in Q3, is everything now fully up and running as of the start of Q1 or would there have been any sort of any of that same stuff rolling into Q1 of '15.

Now everything is fully ramped up.

Okay great. Thank you.

Thanks Mike.

Thank you operator and thank you all for joining us this morning and feel free to contact myself if there are any follow up questions. Thank you.