Aecon Group Inc.

David Smales - Chief Financial Officer Terrance McKibbon - President and CEO

Yuri Lynk - Canaccord Genuity Michael Tupholme - TD Securities Benoit Poirier - Desjardins Capital Markets Frederic Bastien - Raymond James Ian Woodword - GMP Securities Neil Linsdell - Industrial Alliance Securities Bert Powell - BMO Capital Markets Chris Murray - AltaCorp Capital Sara O'Brien - RBC Maxim Sytchev - Dundee Capital Markets Sami Hazboun - Investors Group

Thanks, [Edison] [ph], and good morning, everyone. And thank you for participating in our third quarter 2015 conference call.

This is David Smales speaking and with me this morning is Terrance McKibbon, Aecon’s President and CEO. I’d like to remind listeners that 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 give no assurance that these expectations will prove to be correct.

I’ll touch briefly on Aecon’s consolidated results and then review results by segment before turning the call over to Terry. Overall, the third quarter represented further progress on revenue and margin performance.

Revenue of $875 million for the third quarter represented growth of 4% from the same period last year, or 7% on a like for like basis, excluding the period-over-period impact of the sale of IST in April 2015. For the first nine months revenue grew 8% or 10% on a like for like basis, with growth in all three main operating segments.

Adjusted EBITDA in the third quarter of $76.1 million at a margin of 8.7%, compared to $77.3 million at a margin of 9.2% in the same period last year. On a like for like basis in the third quarter, excluding adjusted EBITDA from the prior period from IST, as well as Quiport, which was classified as an asset held for sale in June 2015, adjusted EBITDA of $76.1 million and margin of 8.7% in Q3, compared to $59.6 million and margin of 7.3% in Q3 2014, an improvement of $16.5 million and 1.4 percentage points.

In addition to progress on revenue and margin performance, a new record backlog position of $3.4 billion we’ve achieved at the end of the third quarter of 2015. This surpasses the previous record of $2.8 billion at the end of the first quarter of 2015 and the $2.7 billion of backlog at the end of the same period last year, driven by the Eglinton Crosstown LRT award, a $5.3 billion project in which Aecon holds a 25% interest and yet seeing development, construction and maintenance activities.

Not included in backlog the important to Aecon’s prospects due to the significant volume involve is the expected recurring revenue from Aecon’s significant number of alliances and supplier of choice arrangements, including a number of new master service agreements announced since the start of the year. Subsequent to quarter end, an Aecon 50-50 joint venture was awarded two pipeline contracts, with the total value of $70 million in Alberta by TransCanada.

Additionally, Aecon was awarded a five-year mining services agreement with a major oil sands producer near Fort McMurray that will utilize Aecon’s fleet of contract mining equipment. Also subsequent to quarter end, on October 31st, $92 million of convertible debentures matured and were repaid in full, in cash.

Turning to results by segment, Infrastructure revenue of $325 million was $11 million, or 3% lower than the same period last year. Revenue was higher in heavy civil operations, but lower in both transportation, due to a lower volume of road building construction in Ontario and Western Canada, and social infrastructure operations.

Operating profit in the Infrastructure segment of $29 million, improved by $7.3 million compared to the same period in 2014, driven by social infrastructure results and transportation margin improvement in Western Canada. Infrastructure backlog at September 30 was $2.3 billion, which is $882 million higher than the same time last year due to the award of the Eglinton Crosstown LRT project.

New contract awards totaled $1.3 billion in the third quarter of 2015 and $1.7 billion year-to-date, compared to $286 million and $1.2 billion in the same periods in 2014. In the Energy segment, revenue in the third quarter of $340 million was $28 million or 8% lower than in the same period in 2014.

Adjusting for the sale of IST earlier in the year revenue was broadly in line with Q3 2014, with higher revenue in industrial operations largely offset by lower revenue in utilities. Operating profit of $17.7 million decreased by $6.7 million when compared to the same period last year.

The majority of the reduction in operating profit occurred in utilities operations and was primarily volume driven. Excluding the impact of IST, overall operating profit from industrial operations within the Energy segment increased primarily due to higher volume in Central and Western Canada.

Energy backlog at September 30 of $758 million was $171 million lower than the same time last year, with reductions in both utilities and industrial operations. New contract awards of $287 million in the third quarter of 2015 were $73 million lower than in the same period in 2014, and new awards of $693 million for the first nine months were $271 million lower than in the same period last year.

The decrease in new awards for the quarter and for the year-to-date period reflects the impact of fewer new awards from utilities and lower awards in industrial operations, as well as the impact of the sale of IST. In the Mining segment, revenue of $214 million was $65 million or 44% higher than the same period last year.

The majority of the increase was due to a higher volume of site installation work in the commodity mining sector. Operating profit of $18.2 million improved by $8.5 million when compared to the same period in 2014, with improvement in all three sectors within the Mining segment.

Mining backlog at September 30 of $318 million was $15 million higher than the same time last year. Backlog increased in the commodity mining sector primarily due to new project awards for site installation work.

New contract awards of $50 million in the third quarter were $135 million lower than in the same period in 2014 and new awards of $381 million for the first nine months were $208 million lower than in the same period last year. The decrease in the first nine months of the year was largely due to a reduction in new hard backlog awards for contract mining work when compared to the same period last year, partially offset by higher awards in civil and foundations operations.

In the Concessions segment revenue in the third quarter was $1.2 million. For the third quarter operating profit of $0.9 million decreased by $4.9 million when compared to the same period last year.

This decline was due to no contribution in Q3 2015 from the Quito airport concessionaire, offset in part by increased profit contributions from recent light rail transit concession projects in Ontario. Aecon entered into an agreement on June 8 this year to sell its 45.5% share in the Quito airport concessionaire for gross purchase price of US$232.6 million.

The transaction remains subject to formal approval by lenders to Quito. As Aecon investment in Quiport is expected to be recovered through this sales transaction, this investment is presented on a prospective basis as an asset held for sale on the consolidated balance sheet as of September 30.

In addition, equity accounting ceased from the point the joint venture was classified as held for sale. Therefore, results from the Quito airport concessionaire is subsequent to June 8, 2015 has not been reported within the Concession segment thereby impact in the segments results for the three and nine periods when compared to the same period in the prior year.

At this point, I will turn the call over to Terry.

Thank you, David. As David mentioned, Aecon’s third quarter results represent solid revenue and margin progress and record backlog.

The fourth quarter of 2015 is expected to be more broadly in line with the previous year on a like for like basis. The sale of IST and the classification of Aecon’s investment in Quito -- Quiport as an asset held for sale will continue to have an impact on reported results when compared with the same period in the prior year.

Overall, I’ll talk about what is maintain for the remainder of the year and into 2016 due to Aecon’s strong backlog and recurring revenue in terms of volume, mix of work and margin profile. In the Infrastructure segment increased infrastructure spending to address both the significant infrastructure debts in Canada and slower economic growth is expected to be a key area of focus by the newly elected local Federal Government, as well as the Provincial and Municipal Governments only for next few years and Aecon is well-positioned to successfully bid on to care and deliver these projects.

Aecon has recognized for his expertise and capabilities to deliver large, complex, multi-disciplinary infrastructure projects and expect to continue to achieve success in these pursuits with its partners, which is expected to lead the ongoing growth in this segment in 2016. In the Energy segment, there is still uncertainty for the timing and the extent of any recovery in all fronts.

However, Aecon continues to bid and win work in the oil and gas sector. In the near-term there are emerging opportunities for large diameter pipeline work.

Overall awards in commodity related markets are expected due to overall lower industry activity. Fabrication and module assembly services are expected to remain solid in the first half of 2016 and it is expected there will be increase demand for utilities work, power and into refurbishment in 2016 as projects in these areas ramp up.

In Mining pre-development projects linked to a variety of different commodities continue to move forward for engineering and feasibility work. While contract mining operations in the oil sand has subject to some volume uncertainty due to reduced spending in the current environment, the current backlog and an increase in not oil related work is expected to sustain mining fleet in 2016 combined with strong expected performance from uncertain installation operations in ’16.

And Concession segment continues to partner with Aecon’s other segments to focus on the significant number of public private partnership opportunities and is actively pursuing a number of large deal infrastructure projects that require private finance solutions. The Eglinton Crosstown and our key project award is a further validation of the strength of the Concession business and its successful integration with Aecon’s operating segments.

For the ninth consecutive year, Aecon has been recognized as a 50 best employer in Canada through the Aon national survey published by Canadian Business magazine. Aecon is pleased to receive the top ranking of platinum for being in the top 25 percentile of company’s survey.

On a broader perspective, Aecon continues to be disciplined and responding to request for its services becoming pre-qualified, bidding initiating and carrying out work. The outlook for the remainder of 2015 and into 2016 is positive due to Aecon’s strong backlog position, recurring revenue agreements, solid margin profile in each of our operating segments, which continue to bid on opportunities with the overall achieve goal, steady EBITDA margin improvement.

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

And we will now turn the call over to analysts for questions.

Hey. Good morning, guys.

Hi, Yuri.

Hi. You guys called out the fourth quarter providing some guidance in the MD&A?

Just wondering what -- we will have good momentum obviously in the Q3 backlogs building, just maybe by segment what we should expect to get us to that number in Q4?

Yeah. Hi, Yuri.

And I mean, I think, adjusting in the context, if you look at our EBITDA performance into the first three quarters of this year, we have significantly outperformed each comparable quarter, I think, 2014, Q4 2014 was a particularly strong quarter and to come in in line with that quarter again this year, I think is, get cap a strong year for us. In terms of by segment, really, what we are seeing is continued momentum, we always in Energy where we said, we always said, Energy would be more second half loaded than unusual this year, and I think, we saw results picking up in Q3 and I think, we expect that trend to continue into Q4.

And then on the Infrastructure side, obviously, there is seasonality in business segments and to the really get going until next year, and so the Infrastructure numbers will be -- Infrastructure segment will be broadly in line with where it was last year. And then on the Mining side, Q4 last year was a particularly strong quarter, mainly from mix reasons, this year again will be a good quarter, but Q4 last year was a particularly high margin quarter, which we don’t expect to be repeat at the same level.

Okay. And just on the Energy segment looking into next year, you have some oil sands projects of significant size rolling off, you did mentioned utilities and nuclear refurbishment opportunities as on the horizon?

Can you just be a little more specific particularly as it pertains to Darlington and when you might be able bring that that award into backlog and also the MSA work that you’ve booked this year, what that kind of looks like now in -- on the Energy segment on the full year run rate basis?

Lots of -- I'll start with contract questions. There are number of factors.

So start with clearly the energy side, as you referenced some projects coming off. But a lot of new issues out there and demand is high and compression well clustered in Eastern Canada.

So compression projects are out there. We are excited about those opportunities in well position, seeing some emerging pipeline work now starting 2015.

We were coming up with a very large program. So we’re seeing that ramp up.

The normal MSA stuff is actually leading up the investor with more activities related to those longer term projects. Anytime you’ve got larger P3 projects going on in an urban setting where we have, I would say utility presence is a signal and our utility is got to be relocated and those opportunities develop.

So we are feeling quite good above the prospects heading to ‘16. It’s a diversification that we can bring to the table and we never got -- feeling pretty good for what it had for us in the entity.

Anything on Darlington?

Yeah. So that’s the -- once we’ve outlined previous calls, we expect it to be first quarter of 2016 decision by the provincial government.

As we indicated last quarter, our workers pretty much wrapped up. So it’s going through various regulatory reviews and so we await that decision.

Okay. That’s it from me.

Thanks.

Thanks. Good morning.

Good morning. Hi Mike.

Can you just talk to your expectations or views around revenues for next year? Evidently significant increase in the backlog here but David as you mentioned the Darlington work doesn’t really get started until next year.

I imagine there is a bit of ramp up there. So it’s a little bit hard to sort of maybe appreciate how some of this work ramps up and other stuff rose up.

So clearly a very strong backlog. In other words, if you just talk to the reviews around revenues for next year, that will be helpful?

Yeah. No problem.

I think I referenced in my comment that this year, the first time on a like-to-like basis, we’ve seen revenue growth of 10%. I think with strength of the infrastructure segment, the ramp up at Darlington and similar things we’re waiting to hear on imminently as well as the backlog level going through ‘16, we’d expect to see topline growth again next year.

Timing will be a factor in some of these larger projects. But I expect it will be not similar to this year in terms of topline growth potential if things go according to schedule on some of these larger project.

So that was not similar to the sort of growth you saw this year, correct?

Yeah.

Okay. Perfect.

And then with respect to the energy segment in the margins there, it sounds like you’re optimistic that you will see some further progress in the fourth quarter. So if we look year-to-date, I mean, for the first three quarters of this year you’ve been down year-over-year with energy.

So it sounds like there is some further progress. So does that continue to build right into the first half of next year?

On the energy side, again it’s -- I said in my comments we expect that to run first in the second half of this year and margins to improve along with that. And so we think there is still room for further improvement in our energy margins through the balance of this year and into ‘16 for sure.

Okay. Perfect.

And then on Quito, so you received the antitrust approval, which is good news. I’m sure you’re happy about that.

What’s your expectation regarding the timing of the approval from the lenders and is beyond that is there anything else you would be waiting on?

Not really. Nothing other than the normal formality with closing the deal with place to work and it still has to be -- has to be highlighted.

No really the lender approval is the last negative thing that needs to be in place to close. I think in terms of timing, we’re kind of deliberately not putting a timeline just because I think things have traditionally dragged down a little bit.

As we pick up all these closing items, we’re getting closer. Obviously when you’re dealing with government agency type lenders, they go their own pace.

It’s difficult to predict how they’ve made that through their system internally. There were effectively four wonders to the project, EDC in Canada, IDB, Axiom and Opaque in the U.S.

We’re really depending on their timeline and moving this through their internal channel. So we’re getting closer but I don’t want to put an exact date on it.

But nothing’s come up that is concerning to you as far as getting those approvals?

There is nothing that whatever should prevent us from getting those approvals ultimately.

Okay. Great.

That’s all from me. Thank you.

Yeah. Good morning gentlemen.

Just on the infrastructure side, looking at your adjusted EBITDA margin 4.8 in the trailing 12 month. Obviously a lot of new projects, pipeline bidding activity has been very robust.

Was just wondering whether the good margin in the quarter, what should be the trend given the strong bidding activity and the ramp-up of new contracts going in 2016?

Yeah. So as you said, I think your margins have been trending up for sometime now.

I think Q3 margin was particularly strong. I think we always say this one.

We have a margin in any particularly quarter that is particularly strong or lower than expected in one quarter and always be impacted by the timing of various things and the mix of work. And so it’s hard to extrapolate based on just one quarter.

I think if you take that for 10 plus margin that we’ve seen. We talked about infrastructure getting to a 5% to 6% type margin.

We’re closing in on that. Quarter-by-quarter, we’re moving that number forward and I expect that trend to continue.

Okay. That’s perfect.

And on the energy side, obviously fabrication and modular assembly service remain pretty good until through the first half of 2016. So and after that, just wondering if Darlington grooves all the opportunities you see in Eastern Canada should be enough to offset kind of the potential weakness we might see in the oil sand and the fabrication work?

That’s clearly our goal and again there -- its exciting with number of opportunities in gas percussion. We worked for many years on the nuclear opportunity, it’s evolving.

That’s ultimately our goal. We’re working very hard to make sure that we have a balance.

Benoit, we will have an impact as we go through 2016. It will be their market service agreement we announced earlier this year in the utility side of the business, which I don’t really start ramping up properly until Q2 2016.

So we get through the winter period then we get into some of those utility programs. So the extra volume that we’re expecting there will also benefit the energy segment in 2016.

Okay. And inside energy is the shift in revenue mix the key reason why you’re confident to improve margin in 2016 and I’m mostly talking here about nuclear?

Well, I think it’s a combination of all the work we have for 2016. I think I referenced utility work.

I referenced the nuclear work will obviously be part of that mix. But I think they all contribute to that.

I think we were coming up with [indiscernible] earlier program. On the pipeline side, it ended early in ‘16 and certainly took the well to transition onto some new work from that that impacted margins earlier this year but I think we’re getting back to more normal level of margin in the energy business as we move through the balance of this year into ‘16.

What would be the level in your view point of normalized level date?

Without saying -- without predicting anything for ‘16, I would say that on a sustainable basis over the long term, we see energy is kind of 7% to 8% margin type business when we got the appropriate mix of work in the segment that we’re targeting.

Okay. Perfect.

And just in terms of catalyst, obviously, nice catalyst ahead with the, I mean, similarity nuclear side. Just wondering whether capacity could potentially become an issue right now?

Any proposals that we’ve got in pharma, so we’ve got responses into the agency for we are talking about capacity. But yes capacity -- timing of capacity is good thing for us.

It obviously means implementing margins over the long term. So but anything that we’re targeting, we are not concerned about capacity but we’ll see how things evolve.

Okay. And just on the financial side, you pay down $92 million of debt.

You will receive the proceeds from Quito, the next venture maturity in December 2018. So could you may be walk us through the proceeds that will be used from Quito with respect to their remaining of the debt portion and what could be kind of the interest rate saving next year because I assume there will be a big delta for 2016, David?

Yeah. So the Quito proceeds obviously in paying down the convertible debentures we draw in our facility.

And we obviously effectively we say that with the proceeds from Quito. And then obviously it will be good for us in terms of growing the business and participating in P3s to have cash on the balance sheet.

And we feel good about where the balance sheet is there and the leverage that gives us to continue to grow the business in the P3 space. I think in terms of interest cost, obviously the convertible debentures we’re carrying around $6 million to $7 million of interest a year and that won’t be there anymore in 2016.

So we’ll certainly see that saving and then the additional cash from Quito will reduce our borrowings on a credit consortium. So we’ll see a similar type -- little less than the savings on a convertible debentures.

We will see a decent type saving on interest on the credit facility as well.

Okay. And lastly just in terms of -- we saw the positive budget announcement from Alberta, same thing with the infrastructure spending with the federal elections.

Looking back at the -- with your experience Terry, how long does it take before it slows to backlog, to projects, to revenues and how long it could basically propel the E&C firm in terms of timing?

So we expect the federal government to fund the variety of projects that are in infrastructure specs for us. Some of those will done through funding through municipalities.

Those are usually much quicker market, much quicker, show readiness and so most of these projects across the country have shown ready projects that we’re seeking. So also -- that’s where the biggest short-term impact will flow from funding municipal governments or provincial governments for the normal highway network also can move really quickly.

Along with P3, there is a lone portfolio P3 projects that are in evolution. So it’s more of a longer term.

What we like about the federal government announcement was the 10-year commitment which doubles their investment. Obviously it helps to stimulate the additional prudential investments.

So what looks nice about it is tenure annual commitment of increase double pair of the strength. So it’s a mix that there will be some municipal work will benefit us in our municipal business in term -- longer term in provinces and then obviously the bigger P3s in more probably 5 to 10-year horizon along those -- take that kind of timeframe to go from concept to procurement and then enter our world where we’re reporting revenue on this project.

Okay. Thank you for the time.

Thanks Benoit.

Hi. Good morning guys.

Good morning Fred.

Sounds like you are looking at it fairly positive outlook for 2016. But what needs to happen for you to feel strongly about your ability to show year-over-year growth.

Do you need sight to see, do you need Darlington happen quickly or what’s your level of confidence you showed relative to next year?

I think for ‘16, first, well the record levels of backlog we’re carrying gives us a strong confidence for ‘16. We know the mix of work and timing of that work.

So we have strength there and feel good about that. And as kind of evolves, obviously your results become public on projects like Type C and RTA and decisions are made I think like refurbishment and other pipeline opportunities that were in the low -- another projects with many other P3s that are at various stages.

We’ve got one in Manitoba that spring to middle. We’ve got Calgary Ring Road, a very large project.

It’s fine that endless list that is really exciting for our business and we’ve so many emerging opportunities. So, bottom line, we feel good about ’16.

We’ve got the work in place and backlog in place and timing of the replacement for some of these oil opportunities seems to be settling nicely for us. So, ’16 is ultimate force at this point.

Okay. And what about seasonality, I guess in 2015, you were calling for earnings to be really be backend loaded in the second half, particular more so this year.

But as we look at 2016, given that we’ve got all that fabrication work that is going to extend to the second quarter. How should we think of seasonality going for next year?

Well, I think it will be less -- certainly would be less seasonality in ’16. You referenced the fabrication work.

We have some new pipeline awards that we released that will take us through the winter months. So that’s obviously incremental growth from ’15 and the winter period.

The projects like Eglinton are less seasonal in the sense of the type of work that they don’t really ramp up until sort of second quarter of ’16. So without question there is lot of backlog, we are certainly in middle right now -- to certain extent a less degree of seasonality just because of the nature of it and the scale of it and these large regions tend to be year around, focus on renewals as opposed to more seasonal.

Okay. My last question, are you at peak of fabrication and module assembly right now in terms of activity in Sherwood Park or where are we at right now?

We’ve been peaking, I would say peak from month or so. We’ve had a fair amount of activity in the last sort of six to eight months.

But we are at a sort of a peak ramp-up right now that runs into the end of the first half of ’16. At this point, we have done the business we have.

There is opportunities for growth because when you have a very large program in a way and a large amount of activity and you are pretty attractive to add new business to a business like that. If the time fits because you are already geared up and we are getting those kinds of opportunities that are starting to emerge where as opposed to awarding them to a fabricator, module assembler that’s not any work and has a significant ramp up ahead of it.

We are running at 100% capacity right now and that’s attractive because we can have more confidence in our cost as opposed to ramp up impact.

And that’s what makes you feel confident about your ability to show a better Q4 on the Energy front?

To a certain extent. I think it’s just more activity, a steadier run rate are more predictable for us.

Okay. Thank you.

That’s all I have.

Good morning. I’m asking on behalf of Greg.

He sends his apologies today. So it looks like you guys are doing a great job, growing backlog and there have been a couple of questions around the nuclear refurbishment in Eglinton and alike.

I was hoping you could expand maybe a little bit more on those opportunities and what other opportunities you see out there?

At Eglinton, we are proceeding through the first phase of that, which is a mark up and that continues into ’16. Certainly, the evolution of refurbishment timing to this point has been as expected, very predictable with the dates that we set years ago that we would be achieving in terms of progress on the contract as the net.

And so there is not much more we can add to that other than to say that our work is wrapped up with our client and it’s going through the various stages as always was expected. And we see potential for new opportunities emerging adverse as well because over the mid to long-term, those have to be refurbish as well.

So obviously, we have a very big team. It’s ranked up and organized and is set up to deliver predictable performance in that space.

Beyond that on the liquid side, there isn’t much we can add other than development energy. Like I said, significant amount of gas compression type opportunities and if you can, unless you can, they are emerging as Canada deals with disruption to the gas supply channels that historically have flowed on Western Canada than Eastern North America gas suppliers are flowing into Canada and it is very cost effective to do that and we see those as good opportunity for us over the near-term.

Okay. And just looking at the composition of backlog compared to last year, are you still seeing sort of margin growth and the items getting booked?

I think we’ve seen expected targets being achieved for our targets that we set for our business and we’ve got a long-term goal. We have to continue to evolve to the targets we set for both EBITDA margin and overall profit of our business.

And we are very pleased with the pro forma backlog because it’s achieving our mid-term, long-term target.

Okay. Everything else has already been covered.

Thanks very much.

Thank you.

Hey. Good morning, guys.

Good morning, Neil.

Just checking -- on the increased federal spending that we are seeing with the infrastructure projects, did you get the feeling from where you are sitting that that’s going to advance projects, which you already know about already on the table or is there going to be more projects coming into the planning stages in the short-term?

I think we’ve seen in this fall. Projects ramp up at accelerated pace, if you add number of municipalities that have needed that federal support.

There has been lot of activity in the P3 side and those projects when you think about the times it takes to do an environmental assessment, times it takes to get the various stakeholder agreements and utility relocations. All of that needs to get done.

Those are the long-term initiatives that there is not really any ability to accelerate those. I think if any that will accelerate concepts that are in sort of four year to six year horizon and get those into the accelerated planning stages.

There is ability to move those up to a certain extent but not to the extent that you could start something imminently that hasn’t been thought of before. There is a fair amount of work the agencies have to do to get those aligned.

The municipal side can start very quickly and most municipalities have shovel ready projects that needs the funding. And virtually, again, the provinces go through years of review of designs and they have a long-term list of projects and so the funding stimulates those.

So, I think to summarize the short-term municipal stuff, it can go pretty quickly. In the long-term and mid-term, the mid-term side can go with the provinces will be factored, not much on the long-term Q3s.

Another area that we are principally involved is water. And that sector looks like a government announcing investment in Canada’s water systems and water treatment and that type of thing.

That’s an exciting opportunity we are seeing, emerging opportunities of scale starting to happen. We build Canada’s first two P3s using the P3 model to block water.

Projects dealing on a smaller footprint can happen much quicker than larger transit roads and those types of things take a little longer in terms of ramp up.

Okay. So within that context, I’m just wondering about your capabilities right now as far as you guys are actually going out and sourcing and finding these contracts and negotiating them.

Are you going to have to increase your costs and your efforts on that in the short-term to be able to make sure that you are on top of all the opportunities coming out?

I think we are at a point where we’ve got a pretty steady run rate. Obviously, increased effort on the front-end, we’ve got and as we referenced record backlog.

Our big focus is ensuring that we’ve got end-to-end capabilities to deliver these projects and we are focused and are very disciplined. And I think obviously, there is a lot of work emerging in Canada.

Canada’s only got so much capacity as far as experienced personnel to manage every aspect of these projects. So, we are cognizant of that and you won’t see an increased investment for us relative to a good cost like that because we are very focused on a consistent methodical disciplined approach to pursuing these projects.

Okay. And just -- and this is really much longer term.

I’m sure about the P3 market in the U.S. Can you talk about the timeline, the timeframe, the opportunities that might be there for you?

Yeah. I think we are very aware and very focused on monitoring because at this point, the U.S.

P3 market. To a certain extent much more fragmented than Canada.

Canada has got lots of consistency province to province because this P3s, to a large extent are provincial projects. As you have said, there are few federal projects like sands, plain and the upcoming creek that are P3 federally.

But most of what we’ve seen of the 200 plus projects have been procured to Canada provincial. The provinces do share insight in terms of structuring the agencies and structuring the contracts and setting them up in terms of the investment and the amount of equity they invest to allow the projects to be developed like Canadian company.

So that’s -- in 20 years, evolving Canada. So, we are sensitive a bit to the U.S.

growth only in the sense that it’s early days and instead of say five or six provinces, they are very active in P3s. In the U.S., you’ve got about 30 independent states.

Each one is handling a bit differently. But we are watching it carefully and we’ve been invited to join a number of teams and opportunities.

But we are not at a point right now that are ready to engage but certainly over time, you will see us probably a bit more active. We’ve got some spreading, emerging opportunities with some of our partners from Canada and Water.

And we’ve got clients from Canada that are in water business in the U.S. We’ve got other utility related opportunities that are emerging that we can take some interest in and then obviously the transit and growth projects.

We are partnering with a number of companies that have extensive operations in the U.S. And some of our partnerships in are based on the reciprocation of working with the same partners in the U.S.

So, very disciplined approach, monitoring individuals that are involved and seeing as it evolves but it’s early days for us.

Okay. Sounds good.

Thanks.

Thanks, Ian.

Thank you.

Thanks. Dave, just quick question on the Quito.

You have hedged off the proceeds, right. That was sold in U.S.

dollars.

Correct. Yeah.

Okay. So there is no -- you fully hedged it.

There is no benefit that accrues from the weakening Canadian dollar to you.

Yeah. We hedged it.

Canadian dollar really dropped to the fed around $0.80, $0.81. That obviously drop was further influenced.

Okay. And then just back to your expectations.

So you are talking about similar growth for revenue in 2016. Is that the start half to line outlook, David, or is that kind of the midpoint of what you would expect?

I’m just trying to handicap that a little bit in terms of what are the major projects that have to come in ’16 for you to get there? I’m just wondering if you could add a little bit more color around that 10%.

Yeah. There is no make or break project.

I mean, as Terry talked earlier, we’ve got a pretty full bidding pipeline. And we will always win and lose projects and we always expect to win not more than kind of our fair share of what we are bidding.

So when it comes to projects on the P3 side or other projects where there is a pre-call process, if there are three bidders, we don’t expect to win more than on average a third of those and similarly with other projects, we bid. So there will be projects, big projects that we win and big projects that we don’t and there will be lots of things in between.

So there is no -- when I talk about revenue for next year, it’s based on where our backlog is today and winning our fair share of work based on what we know is either in procurement right now or what we expect to come. Obviously, if those projects don’t come then that will impact things but no reason why they shouldn’t based on what we know right now.

And we’ve already talked about the infrastructure pipeline, how much of that work is at risk. So there is always variables, there is always things that can happen.

But it’s not build on having to secure one or two particular projects. Our normal run rate is successful bids.

Okay. And can you give us a sense of what -- so two questions.

Just in terms of backlog, how much JV revenue is in that backlog and is that -- I’m assuming it’s on your proportionate basis, correct?

Yeah. Obviously, the major project -- not all this P3 projects are in joint ventures and a lot of the work we do on the larger projects including nuclear work for example is in the joint venture.

But not all of those joint ventures are accounted for projects, accounted for on an equity basis. Some of those joint ventures are proportionately consolidated.

So there is -- it really is a long list of joint ventures and we have to work through each ones to give you that list. But if you are talking about big projects are in the projects accounting for on an equity basis.

That’s on the short list. Yeah, that’s a short list.

That’s primarily -- Eglinton will be one of those projects and then we have a couple of other small ones. But at the moment, Eglinton would be the largest one in that list.

So the Eglinton LRT?

Yes.

So, I thought that was going to be -- you are going to present that on a proportionate basis. Like you were going to book your quarter in.

Yes. So, I’m talking about a concession piece, which is the only piece where we have any intimate at this point.

Once the construction starts, which isn’t really until next year that will be on a proportionate basis for the concession piece, the equity piece that we hold where the development fees and things like that, that is on an equity basis, which reflects our 25% equity position in concession.

Okay. And then just the five-year mining services agreement.

Is the backlog associated with that or that’s just a master services agreement that it’s when the work -- if as and when it’s agreed to that you do at these prices.

Yes. That’s correct.

It’s a recurring revenue. We call it our recurring revenue business and….

Is that a -- Terry, is that a net new or that is an extension or replacement?

It’s a similar program to what we’ve typically held in the past and we work for a number of the large players and offense.

But does it net increase the scope of what you will do or the revenue associated next year, or it’s just a new replacement of existing business expanding again.

The pressure in that sector certainly is incremental. So it’s a structured contract that we expect will obviously, continue in the same style, work we’ve historically reported.

And we don’t see any new growth in that sector. Anything where we’ve got over capacity in that industry as everyone knows and we’re actively looking for other opportunities to support some of that additional capacity.

So it’s still pressured but we’re pleased at least, continue to renew and expand and tackle opportunities that emerge in oil sands that you’ve heard in testament to our performance, so we are happy in Alberta.

So 2016, the expectation, you say you’ve got some stuff coming off with the Vale Long Harbour and part of the installation, the storage load for K+S, that kind of happens in the first half of ’16 but you‘ve got other stuff coming in. So the expectation from a seasonality perspective next year is to have much more of levelized quarters from a revenue and profitability perspective?

Just to be clear, the K+S, if anything, that continues to grow there. We have a full year of services there, so there is no softness in that at any point in 2015.

I thought there was -- sorry, Terry, just maybe I’ve got this one right. I thought there was two components to it.

One ends at December ’16 and then there is a smaller component of installation one of it you did that hence?

No. We might have been -- maybe I comment relative to some civil work that we did on the front end of the project but we’re very active on that side.

We represented about 50% of the construction forces on that project and that is a full load for us right from ’16 and potentially expanding beyond it.

Okay. Okay.

Great.

You will have -- on the mining side, don’t forget the concept mining piece will continue to kill seasonality, so that’s about half of the mining business. So with the normal contract mining seasonality but on the site installation side, as Terry said that work should be there throughout ‘16.

Okay. Great.

Thank you.

Thanks, guys. Good morning.

So just maybe following on that a little bit. Terry, you kind of alluded to in the mining business but there were a couple of interesting new opportunities you might be seeing.

So, any more color you can kind of give us on that? I mean, I don’t think we’re seen a huge number of new developments coming online but any thoughts on what might be out there down the road to support that?

Well, any time -- we’ve been pursuing a number of new opportunities in the mining side, some of which are emerging like Rainy River that we entered into and developed in 2015. In the gold side, we’re still seeing some activity there.

Projects like [indiscernible] will take a significant load of capacity from the larger equipment fleets that are in Canada, whether we’re successful or one of our competitors successful, which is good for the industry. Obviously, it’s consuming capacity very, very large project multiyear, so very significant.

And then if you look at some of these other P3s whether it’s -- obviously projects at our Greenfield roads take capacity of some our larger mining equipment. So, projects like Calgary Ring Road would take some capacity on the larger equipment in that regard.

And so for us we continue to see exciting opportunities that relate in some cases to more in the infrastructure style of business and then also emerging market opportunity.

Okay. So is it fair to think that kind of moving forward, I know you just resigned the Master Service agreement, but is it fair to think the mining business is going to be maybe more shifting to high backlog work or even maybe shrinking as stuff moves into the other segments over the next couple of years?

I think it’s bit of both. So in oil sands, I think we will see new capital being invested and so we will strengthen oil prices and also the royalty regime is sort of in Alberta.

We haven’t seen any news since there has been discussion about that and I think that’s part of the equation for new capital to be invested in Alberta. But certainly on the infrastructure side, I would say more opportunities than we seen that take capacity out of oil sands related mining equipment and that’s good.

And then some of the mining opportunities, there is certainly -- especially, gold where there is obviously speculation that is three to four-year inventories and for pricing constitute an opportunity just starting I think so.

Okay. And then maybe more of a conceptual question here kind of three to five year as when we sort of highlight different opportunities, probably some major growth in infrastructure in Canada.

There’s been some talking in U.S. about forming neither an infrastructure banker really maybe even adding P3s at a federal level.

You look at your balance sheet, what are the thoughts about, how are you guys thinking about growth maybe a little bit longer term? Is that maybe you'll have to start acquiring different capacities or is that more you just be more choosy about what you do?

And on those lines what you got Quito proceeds? How do you shape it maybe longer term in terms of what the product portfolio is going to look like?

The thing for us, we are really emerging to be a large turn key provider in addition to the normal run of business that we’ve always just historically had. So I think you see it continue to get assignments that are long term, that have multiyear commitments in Canada, whether its in mining or energy or in infrastructure.

So those types of solutions defines we’re largely becoming a go-to company and awfully sectors that we’re focusing. And I would say, a great test from the ladders of success both predominantly in all three sectors but certainly in mining for example and having a strength despite the pressure commodities but also in energy and infrastructure.

So continue to build a turn key solution provider in the three to five year horizon that would include continuing to grow outside Canada. I think that’s an appropriate horizon to talk about for us, so looking at growth.

And with that growth the model we view is very successful in Canada. Its been a model of evaluating partnering and very specific M&A activity with precision where we start to partner with the company.

They obviously like to culture and we have a full source opportunity in front of us. So we’ve grown largely like that in Canada and I can see us growing outside of Canada.

With that kind of mindset and in the three to five year horizon you would expect to see strengthening commodity in oil. And the type of company that we built is clearly a company that would have a lot of attraction to owners and clients outside the Canada, partners outside of Canada.

Okay. And when you talk about outside of Canada are you still focusing majorly in the U.S.

or would you be thinking about the other parts of the world?

Yeah. Initially, but there maybe opportunities that will take us outside of the U.S.

related to things like mining. We talk a bit about the Bermuda airport, it’s been in the press.

Its something that we’re in pursuit of. So those are examples.

Quito has been tremendous success from all aspects. And I think has developed a great relationship for Aecon internationally, come back for many years has led Aecon’s profile in countries like Israel and India and Quito in Ecuador.

So we’ve had -- we’ve just been very focused in Canada. And I think as we grow we’ll see as in three-five year horizon how the revenue flowing outside Canada.

Great. Thanks guys.

Hi. Good morning.

Just quickly, are there any segments where you’re concerned about margin erosion in ‘16 over ‘15? Just look based on the backlog mix that you see now.

No. I don’t think so Sara.

We’ve been very specific about what we’ve been focusing on. And we’ve been also be very disciplined about securing work that obviously allows us to achieve our mid-to-long term margin targets.

So we’re not concerned in that regard.

Okay. That’s it for me.

Thanks.

Thanks, Sara.

Hi. Good morning, gentlemen.

Hi, Max.

I don’t want to get too granular but I think going back on a early ‘15 there was an expectation that the back half of ‘15 is going to be very, very strong. Right now there is Q on Q reduction in terms of EBITDA.

And I think the market over is just concern that portends to some further weakness. I mean sort of backlog is up margin that you’re telegraphing is absolute.

Is there anything surprising for you in kind of your Q4 telegraphing but maybe transpired over the last couple of months, whether deferrals or cancellation, any of that stuff, so any color would be much appreciated?

No surprises. I mean, so I’ll take you back to eight, nine months ago when we released our Q4 numbers particularly as in ‘14, we started this call and everybody who has the question started with great call guys.

And we just said, we’re going to have a very similar quarter in Q4 2015. So we see Q4 this year a very solid call.

We’ve outperformed the first nine months of the year against every other quarter from us. We’re going to match one of our strongest ever Q4 that we saw in 2014, in 2015.

So when you look at any kind of time period whether its six months, nine months, 12 months, we’re showing revenue growth, we showing margin growth and on a full 12 months basis, this year we’ll show a very solid growth in performance. Q4, obviously, is a quarter where I think start to tail-off and shows our more seasonal businesses.

So traditionally it has been lower than Q3. Last year it was more of an anomaly on that front, but there is no surprise out there.

The second half of this year is going to be very strong. We go forward, we record backlog and we talked about a very positive outlook for 2016.

So there is no surprises, there is nothing unusual going on. It’s a continued good performance looking forward.

Okay. No.

That’s fair enough. Thank you.

Thanks, Max.

Good morning, gentlemen. Thank you for taking my call.

I have two separate questions. Terry, with respect to project management and execution, I know you’ve invested a lot of your own time, you’ve invested in IT, you invested in people.

By and large, obviously, the numbers show that there have been no hiccups and so on. Are there any below the surface things that you are watching or that your systems have caught early enough on the one hand?

Secondly, with respect to Darlington, am I misinformed or connect decision slip well pass the first quarter of next year?

We don’t show ours Darlington first, we only expect that this is we’ll slip, because it’s been we feel all the dates that we’ve expected to hit and as such there would be nothing that would indicate that could solve, I guess, occurred, but it’s an important decision and it seems to be at least as everyone reads in the press report financially for continue to have Darlington as a major foundation of our generation for the -- energy generation for the problem. We don’t expect to see that.

First question with management, yes, we have been very focused, transition into larger projects we’ve had put significant investment into our team. It’s a nice time in the global markets to be recruiting individuals that have certain experience, because very softness in some of the global markets.

We felt lot of our -- the larger international players are here in Canada and well-established here and we’re partnering with many of them, so we get that type of opportunity. So, yes, our systems view certainly help us to have any kind of early warning or any kind of early indications.

And when there is anything that would keep us up in that, we have the luxury of attaching those issues head on and we view that on a regular basis. These, obviously, large projects have increased sophistication and complexity, and obviously, returns reflect the higher risk.

So there is often things that we work very hard on, but very important to have a great team which we have assembled and we’re very pleased where we’re at and where we’re heading.

So nothing in the current portfolio work that you would classify as yellow in terms of project management terms?

No.

Okay. Great.

Thank you very much,]

Thank you.

Thanks. Dave, we saw a negative $51 million of swing in non-cash working capital this quarter.

Typically, we see reversal in the fourth quarter. Any -- just talk to your expectations for where you would end the year and if possible shed some light on next year in terms of whether or not some of the big awards change the working capital profile as we look at next year?

Yeah. So, you’re right, Mike, we do traditionally see building working capital through Q3 and that starts when wind in Q4 and into Q1.

Don’t expect any different trend this year. So we will see -- that’s a wind down again in Q4 that will continue into Q1.

Traditionally, Q1, the end of Q1 is when we report kind of highest cash position in the year and I think that will be repeated this year. I think looking through 2016, Terry said earlier, some of these larger projects that will be underway in ’16 that kind of have a little smoother profile in terms of seasonality and I think, working capita will reflect that as well.

There will still be some seasonality but smooth down a little bit I think in 2016.

Okay. Thanks.

That’s helpful.

Thank you. And thanks everybody for joining us today.

And we look forward to further dialog as we go forward and welcome any follow-up questions or comments, we’re available for those. So thanks everybody and have a great day.