WSP Global Inc.

Isabelle Adjahi - VP. IR Pierre Shoiry - President and CEO Alexandre L’Heureux - CFO

Mona Nazir - Laurentian Bank Yuri Lynk - Canaccord Genuity Jacob Bout - CIBC Frederik Bastien - Raymond James Michael Tupholme - TD Securities Bert Powell - BMO Capital Sara O'Brien - RBC Capital Markets Connor Sedgewick - National Bank Financial Mark Neville - Scotia Bank Maxim Sytchev - Dundee Capital Bank

Thank you and good afternoon, everyone. First, I want to thank you for taking the time to be on the call today.

We will be discussing our Q3 performance and provide you an update on our operations and financial results. And then we will follow up the session by Q&A.

Today with me are Pierre Shoiry, our President and CEO; and Alexandre L’Heureux, our CFO. Please note that this call will be recording the call and it will be available on our website tomorrow.

The last point before I turn it over to Pierre, I just want to mention that we may be making some forward-looking statements and that actual results could be different from those expressed or implied. And we, of course, disclaim any intent to update or revise any of these statements.

I would now like to turn the call over to Pierre. Pierre?

Thank you Isabelle and good afternoon everyone. Welcome to this conference call.

So during the third quarter we posted good overall results, in line with our forecast and expectations since the beginning of the year. Not only did we deliver good EBITDA, but we maintained solid margins in spite of the expected poor market conditions in the oil and gas sector in Canada.

Our business strategy, which includes geographical and sector diversification enabled us to mitigate this expected downturn, and with the exception of the oil and gas sector in Canada, we posted overall solid organic growth, both on the net revenues line and on the backlog front. The overall performance in most countries was on target.

Globally, we experienced negative organic net revenues of 1.8%, mainly as a result of the downturn I just alluded to earlier. Excluding the drop in this sector, organic growth amounted to 4.9% in line with our 5% objective.

Organic growth was strong at 5.1% in the Americas. 4.9% in EMEA and 10.5% in APAC.

Overall organic growth for the nine months’ period ending September 26, 2015 is 4.7%. I wish to remind investors that organic growth for this period in 2015 is calculated on the legacy WSP business as Parsons Brinckerhoff revenues are classified as acquisition growth.

As of November 1, 2015, organic growth will be calculated on the combined business. Year-to-date, total growth represented 117.2% and a 109.3% for the third quarter 2015 as compared to the same periods in 2014.

By region, Canada posted 13.4% negative organic growth, mainly caused by Western Canada while Quebec and Ontario posted combined organic growth of 11% on a standalone basis. We generated 14.8% adjusted EBITDA margins before global corporate cost.

We anticipate the trend of contraction and lower margins in Canada to continue for the remainder of the year and the first quarter of 2016 as a result of the sustained weakness of the oil and gas sector. The main highlight of the quarter in Canada was the acquisition of MMM and the addition of this firm should mitigate this negative trend in the longer term.

In MMM we have acquired a very reputable firm which is recognized for its expertise in transportation, infrastructure and environment and buildings, its three main operating segments. MMM is also a leader in public private partnerships and more particularly in the delivery of large scale complex transportation and social infrastructure projects.

MMM has industry leading margins on the back its technical and operational excellence, its performance management initiative and the optimal use of its business information systems. We have started to integrate our operations and have realigned our organizational structure in Canada to reflect our market leadership in our operating segments across the country and drive the best practices of both organizations.

This transaction enables us to balance our Canadian activities with a stronger presence in Ontario, which should compensate the Western on the back of sustained infrastructure programs planned over the next years. On a combined pro forma basis, including all Canadian acquisitions to-date in 2015, Ontario will now represent 36% of our Canadian workforce while Western Canada will decrease to 32%.

The infrastructure and building sectors will represent 41% and 21% of net revenues respectively, while environment will represent 11% -- 16%. Last, the industrial energy sector, which includes oil and gas and geomatics will represent 22% of Canadian net revenues, meaning that the oil and gas and geomatics combined should represent no more than 10% of Canadian net revenues.

The environment sector is growing in Canada with the acquisition of Levelton, which was completed at the beginning of the quarter, thus growing our environmental team to a critical size of more than 1,000 employees. I once again would like to welcome MMM and Levelton to the WSP family.

Moving to the Americas, the U.S. market conditions were stable and we posted good 5.1% organic growth and an adjusted EBITDA margin before global corporate cost of 17.6%.

This good performance was helped by some project contingency releases and is supported by solid economic conditions and built on the strength of our buildings and infrastructure sectors. The environment and power businesses also contributed to this excellent quarter.

We also secured a number of major contracts in the U.S. during the third quarter, reflected in the 13.4% organic growth of our backlog in the U.S.

from the beginning of the year. In EMEA, we posted 4.9% organic growth and 12% adjusted EBITDA margins before global corporate costs.

We continue to see positive momentum in most of the regions, including major opportunities in the UK and Swedish markets for the remainder of 2015. Sweden, one of our largest countries in this region posted good 10.6% organic growth, while the Middle East was lower than year-to-date at 9.2%.

During the quarter, we acquired Faveo, a leading project management firm based in Norway and Sweden, thus adding a strong entry point into the Norwegian market, while positioning our firm as a project management leader in Sweden. The integration of Faveo is proceeding well and the results of the first quarter with us were above expectations.

Going forward, we anticipate a noticeable slowdown in the Gulf region, given the reduction in anticipated public sector work of oil and gas revenue and the softening of private investments in the building sector. Africa continued to perform well with 7.9% organic growth and the results were to plan.

In Asia Pacific, organic growth amounted to 10.5% while adjusted EBITDA margins before global corporate costs were at 10.9%. In Asia, we posted 4.9% organic growth and secured a major project win for the Singapore Changi Airport expansion representing approximately 60 million in fees for our infrastructure units.

We have a cautious view on this region, given the slowdown in the Chinese real estate market. However, for the time being, we still expect growth to continue but at a much slower pace.

Lastly, in Australia, utilization rates increased and local corporate costs were reduced and anticipated cost synergies stemming from the integration of WSP and Parsons Brinckerhoff materialized. We posted 15.2% organic growth on the legacy WSP business and are seeing a brighter outlook in the infrastructure and building sectors, while resource related work is still soft and very challenging, particularly in light of the near completion of our successful delivery of the Roy Hill iron ore mega project for which we are acting as a project manager.

Growth will be challenging in this country in 2016, given the softness of the resource sector. I would now like to give you a brief update on the integration of Parsons Brinckerhoff.

It has already been a year since we became one firm; and as seen in our performance, this quarter continued on the strong momentum created by the transaction. Integration of support functions continued during the quarter and we are pleased to report that anticipated cost synergies will be ahead of the $25 million initially planned.

Alex will provide more detail in a few minutes. On the revenue side, revenue synergies generated by the collaboration of our combined workforce are growing and are reflected by the growth of our backlog, which now stands at $4.9 billion, an increase of 24.3% versus the end of Q4 2014 and 7.2% versus the end of Q2 2015.

It represents close to 10 months of revenues. As compared to Q4 2014, backlog growth included a 12.3% organic growth and a 9.1% foreign currency impact, with the remaining 2.9% being a result of acquisitions with the exception of MMM, which was closed only Q4 of this year.

This positive organic variation in backlog is indicative of the growth of our underlying business and of activity levels experienced by operations in various parts of the world, including contribution of revenue synergies. We are very pleased with the acquisition of Parsons Brinckerhoff and we are confident that this combination will continue to create opportunities for our people and clients in the following years.

As bringing together the best of both companies will help us create a company in the future. I will now ask Alex to provide some comments on our financial results.

Thank you Pierre and good afternoon. Revenues and net revenues were approximately $1,503.0 billion and $1,124.9 billion, up 138.3% and 109.3% respectively, mainly as a result of the business acquisitions.

Adjusted EBITDA was $126.2 million, up $59.8 million or 90.1%, while our adjusted EBITDA margins stood at 11.2% of net revenues. We posted higher adjusted EBITDA margins before Global Corporate costs versus last year in most regions, mainly as a result of continued positive momentum in business conditions.

The increasing Global Corporate costs in Q3 2015 versus Q3 2014 was mainly due to the acquisition of Parsons Brinckerhoff. Although cost synergies were generated over the course of 2015, the savings were partially mitigated by the unfavorable exchange rate in the USA and UK.

In addition, long-term incentive programs were instituted in 2013, and it is only this year that the likelihood of reaching targets were estimated with more certainty and essence were recorded accordingly. It should also be noted that the increase in stock price are also a non-favorable impact on the increase of the outlet provision.

Furthermore, Global Corporate costs in Q3 also included provision for project related litigations. We estimate our going forward run rate for Global Corporate cost to range between CAD$17 million and CAD$18 million per quarter at the current exchange rate and this going into 2016.

Our net earnings attributable to shareholders amounted to $50.4 million or $0.55 per share on a diluted basis, up 73.2% and 19.6% respectively, while net earnings attributable to shareholders excluding acquisition and reorganizational cost, net of income taxes amounted to $62.8 million or $0.69 per share, up 90.3% and 30.2% respectively. The $16.1 million in acquisition and reorganizational cost which were previously classified as non-underlying items included $12.9 million related to the ongoing integrations of businesses acquired over the last 12 months, as well as $1.7 million related to the reorganization of existing operations, mainly Western Canadian operations.

Now turning to cost synergies related to the Parson Brinckerhoff transaction. Since the closing of the transaction we have incurred approximately $24 million in integration cost, leading to recurring annual savings that will be above our initial target of $25 million.

Today, we estimate that these recurring annual savings should amount to $40 million, of which $30 million should be realize by the end of 2015. Therefore, the remaining $10 million in savings should be realized by the end of 2016.

Cost to achieve the higher anticipated sales were also be higher than originally announced, but the overall amount to be spent in integration cost should be lower than the anticipated recurring annual savings. Now I’d like to turn to our balance sheet position.

Active working capital management in light of business seasonality continues to be our ongoing focus. Day sales outstanding stood at 87 days, which is marginally higher than last quarter, mainly as a result of delays in collection from major projects in the Middle East and Africa.

At the end of the quarter, our net debt to adjusted EBITDA ratio was 1.2 times, incorporating full 12 months adjusted EBITDA for all acquisitions. Including MMM our net debt to adjusted EBITDA ratio stands at 1.9 times within our target range.

Excluding MMM, which was completed at the end of the quarter, net debt to adjusted EBITDA ratio stood at 1.1 times, compared to 1.8 times at the end of Q2 2015, mainly as a result of repayment of debt with funds obtained from share issuance. As in the past, we expect the strength of our current capital structure provide additional flexibility to pursue acquisition growth strategy.

Lastly, the dividend, at 52.5% participation, the dividend reinvestment plan, our cash payout ratio and EPS in this quarter excluding acquisition and reorganization cost stood at 26%, a major improvement as compared to the 36% that was generated last year. The Board has a declared quarterly dividend of $0.375 per share payable on/or about January 15, 2016 to shareholders on record on December 31, 2015.

Before I turn it over to Pierre, let me conclude by saying that we are already actively working on the year to come. Our 2016 budget is well underway and it is a good time for us to pause, look back, review what we have done well, what we can do better and adjust our objectives, and propose actions accordingly.

Pierre?

Thanks Alex. So in conclusion, we continue to believe in the strength of our business model based on technical excellence, as well as geographical and sector diversification.

We are quite confident this will help us sustain growth, in spite of volatility in the economy and continued low commodity prices, which are putting pressure on the outlook in some countries. Going forward, we will remain focused on driving global organic growth and improving margins, leveraging our global knowhow and winning new work, while pursuing our long-term growth ambitions.

So I would like to open it up now the session for questions.

So my first question is just in regard to guidance. So you kept your 2015 guidance unchanged.

And a few minutes ago in your commentary, you spoke about organic growth contraction overall, and how the Canadian market remains challenged, alongside specific commentary on various geographies that is mixed, while there are greater synergies stemming from presence. I am just wondering how the summation of all of these different variables come together into your consolidated organic growth target of 5%?

And also, as EBITDA margins here can continue or change depending on the mix?

Okay, there is a lot of items in your question. I will answer the one on organic growth.

I think, an important factor that I had mentioned Mona is that the organic growth this year is on the legacy WSP business. I must say we are quite pleased with the organic growth year-to-date.

And obviously the contraction of the oil and gas sector is playing a big legacy WSP business that it would play on the total corporation. And I think we will see that in the next quarter because starting November 1st the Parsons Brinckerhoff revenue will be classified as -- it won’t be acquisition growth anymore.

So we will have a new base to start off, to talk about organic growth of the combined company. So on the organic growth this year we are on par with our plan.

Obviously there are some regions, especially the emerging markets, Middle East and Asian markets which are -- we are experiencing some slower growth. We’re still seeing some growth, but we had experienced very strong growth.

So the regions are softer growth but still positive territory. We anticipate in the coming quarters, and as Alex said, we are working on the budget right now.

We haven’t changed our views on organic growth going forward. But it will be interesting to report in the next quarter on organic growth, which will be basically on the combined business and not on the legacy WSP business.

With regards to outlook, I’ll let Alex elaborate on this.

Yes, perhaps I can address this. As Pierre just mentioned, this year there have been many moving parts, a lot of moving parts.

And when we provided the outlook at the beginning of 2015, we made clear that this was excluding any acquisitions that we would be contemplating in 2015 or executing basically. Also, we were not forcing this at the time, but also the disposal of multi-consultant [ph] we need also to be taking into consideration.

And I briefly discussed on the conference call today that our corporate costs have increased for a number of different reasons, but they have increased in 2015. There has been also the FX movement, that I suspect some of you would point out.

Pierre alluded to the oil and gas sector and the performance of the oil and gas sector for this year. Yes, on the positive side there have been some cost synergies that were generated throughout the year at an increased rate than we had anticipated when we provided the outlook.

But when you put all that together, we still believe that we will be delivering an outlook that will be within the range that we had provided at the time. And clearly at this point, if you ask me, I believe that we’ll be prolific.

But today I would not be prepared to give you a hard number. All I am saying is that we are going to gain this range and probably on the higher end and certainly than the lower end.

And secondly from me is just -- we are seeing a lot of discussion on the liberals’ win, and particularly on the impact for increased infrastructure spend. Just wondering if you had any comment on that and how it relates to you after your purchase of MMM and increased piece?

There's a strong momentum in Canada right now on infrastructure spend. We had already several provinces that had announced a pretty ambitious infrastructure spending and stimulus programs in both in Quebec and in Ontario.

The liberal platform builds on an increase in infrastructure spending, and we saw this week the Alberta government, which is proposing also to increase spending on infrastructure by about 15%. So this is clearly very good news for our business to -- and clearly with our strong presence right across the country and in transportation and social infrastructure, we're clearly a major player in every region in Canada, in all the sectors that will be impacted by increased infrastructure stimulus spending.

So MP3 investment with MMM. So we're very prudent that this is taking right now.

Just back on the organic growth number in Canada, can you just describe exactly where that weakness is? Is it entirely contained to the Geomatics business or have to started to see it spread into some of the other practice areas in Western Canada?

No, I think it's -- as I said just a bit earlier, it's really oil and gas related. Oil and gas CapEx spend is down.

And this was a big case, it was a part of our business and that's down. So the rest of the market segments are doing well.

We have good growth in the energy space. Energy, when I talk about energy, I talk more about the renewable energies and power sectors.

So power production and also in transmission and distribution we've seen growth there. We've had some very solid growth in our environmental sector.

Our buildings practice is quite stable, on the engineering side. Transportation is doing very well.

We’ve got some growth in transportation, mostly in the province of Quebec, and in Ontario. So overall I'd say the -- if it wasn't for the oil and gas sector, we would be in positive ground in Canada right now.

Okay, and because of some of the M&A, it's tough to see exactly what you did with headcount to respond to oil and gas, but can you kind of describe the measures you're talking and some of the utilization rates of just qualitatively where you are now and where you hope to be in about six months.

Well, it's very hard to predict where we'll be in six months because we don't know. It's hard to predict the outcome in the resource sector.

But certainly we've right sized the organization quickly in the first quarters of the year. Now we're adjusting to the markets.

Nothing major. I think we have a size now that we're working on regular OpEx projects and we're maintaining our teams, and we expect -- as you remember the downturn started in the first quarter of last year, at the end of 2014 being at 2015.

So that's why we've continue to see a -- if you remember last year, Q3 2014 was a very strong quarter in Canada and it was driven a lot by Western Canadian activity. And then we saw a decline from them.

So we're going to -- we're going to have a three-four quarter decline and then going to start back off a lower base. So that's why I just said that we expect this contraction in Canada to continue until the end of the first quarter.

And clearly with MMM in the longer term it's going to correct, but MMM is going to be classified as acquisition growth over the next year. So you won't see that have any impact on the organic results in Canada.

The results in Canada for the next four quarters will be on the legacy WUSP business.

Right, and just on organic and switching the Parsons, can you just describe how the organic growth at Parsons has been year-to-date since it's been -- it’s hard for us to track it. So has organic growth been as good as the base business.

Listen, the organic growth of the legacy Parsons Brinkerhoff or the stand alone Parsons Brinkerhoff business has varied, depending on the various geographies and the segments. Clearly the power sector in the UK has continued to be soft.

But we expect 2016 to see a pickup. I'd say in the UK that the legacy standalone Parsons Brinkerhoff business is positive.

I would say a very good year in transportation. But as I mentioned a bit earlier, Yuri, the resource sector is soft and we’re finishing some pretty big projects over there, some very successful projects, but there aren’t many big projects in the resource side to fill that up.

And in the U.S. I would say we have -- which is mostly transportation based, I’d say it's been a stable business.

As you know, the transportation sector in the United States hasn’t seen any new funding or increase in funding over the last 10 years or so. So you can’t say it’s a growth market, but it's a very solid market and we have been fortunate this year to win some very good projects.

So I would say that the business overall is stable in the U.S.

You talked a bit about the cost synergies of Parson’s. Maybe you can talk little bit about the revenue synergies and if it's possible to quantify that and maybe talk a little bit about the success that you’ve seen to-date on cross selling?

Well listen the -- this transaction we talk about cost synergies and as you saw we had given some outlook, but we worked hard to do more and that’s always a goal as to try to be it most efficient. I’d say most of those cost synergies were related to back office functions and to leases and to driving the business, the best practices of both businesses.

So that’s what underway, but the real dynamics of this transaction is the revenue synergy play, and because we have two very complementary businesses and we’re driving quite a bit of nice work together -- today we had a presentation in -- Board meeting presentations by different leaders of our business in various parts of the world and they reported on revenue synergies and we have a lot of good stories. We’re to clients now.

We had the building side and now we’re developing with the clients -- with these same clients from services and transportation and we won some nice work everywhere around the world by driving -- cross selling with existing clients and leveraging relationships and expertise. So listen, we don’t have any specific numbers, we have numbers by region that really -- projects that are -- we wouldn’t have one without together -- give you an idea we have business reviews in Australia not too long ago that we’re talking about 60 million, 70 million of revenue generated by -- through revenue synergies.

I think we were up to £90 million in the UK. But this is what we’re working on.

We’re putting a lot of effort right now giving two of the collaborate and share the best practices and knowledge across the various centers of excellence that we have around the world and -- so there are lot of good stories and what we are expected to do or after the first year over the transaction -- after the first full year of the transaction is to really come up with a report on this and give you some data on this in the coming weeks, Jacob.

That would be helpful. And maybe just my second question, looking for granularity here on the slowing that you're seeing in China; and maybe you can just little bit about Asia Pacific, Singapore, Taiwan, Australia, Hong Kong, how that compares to what you are in China.

That will be Part A. And then Part B would be just looking backlog in particular, you talk about the Singapore airport.

I think you said it was 60 million in fees. So should we just – I’m assuming all about this in backlog and we just back that out to get kind of a year-on-year comp?

In Southeast Asia we have a very strong business. We have close to 4,000 people, of which about 2,500 are in Hong Kong and Mainland China.

And we have a strong presence in Singapore and then we have smaller entities in other countries such as Korea and Taiwan and Thailand. Listen, right now I’d say that we look at backlog and then we look at also our prospects, our funnel projects and our proposal activity and right now what we’re seeing I think in China is a slowdown in proposal activity.

But again a slowdown in China doesn’t mean the same thing as a slowdown elsewhere. And China is very, very active, but we are seeing some softness in the market now.

Our people are still forecasting continued growth and the governments over there are still forecasting growth at 7%. But I think with the barometer that we have is that we work with a lot on the private sector over there, with private developers and we’re seeing a bit of a slowdown in the proposal activity which leads us to believe that the market is softening a bit.

But again in Hong Kong and Singapore, there is a lot of public sector investments in infrastructure which are ongoing. So we still have a cautious outlook, but at the same time we still think that there is growth in our business in that region.

Pierre, based on your comments about organic growth, is it fair to say or assume that the EMEA region and also the Americas are going to drive the bulk of the organic growth in the foreseeable future?

I wouldn’t say that necessarily. I think we have organic growth targets everywhere.

Clearly, the Nordics have been quite surprising this year. We’ve had good double-digit growth in the Nordics.

Is this sustainable on a yearly basis, going forward for several years. That could be challenging.

That’s a big number we had over there this year. In the UK, I think we’ve had some good growth.

We still see some good opportunities in the infrastructure side. But if you look at the building side, our expectations are not to have very similar -- continued strong growth as we’ve had this year, but as I said earlier, maybe on the power side.

So what’s nice about our diversified -- both end market and geographical model or platform is that we can have regions that did well this year, could a bit slower next year, but then other regions hopefully will pick it up. I would say the biggest question mark is everything that’s related to resources, and luckily we don’t have too much exposure to that, to those sectors.

So mining, probably about 5% of our revenue and now I’d say oil and gas probably a bit lower than 5% with the recent downturn. So our core markets are quite solid in terms of -- and we are seeing a lot of governments across the world now and we just saw the European Union talk about this last week, about maybe -- again they start talking about a stimulus in infrastructure.

So overall we just saw in Canada the recent announcement. So we will be in a better – we’re working on our budgets now.

So we’ll have a bit more visibility in the few more weeks. But overall we have organic growth targets for all the regions.

But in some regions you can have organic growth targets for most of your markets, like I just talked about Australia, I don’t think we are going to grow organically in Australia next year overall, just because of the resource sector. But that doesn’t mean we can’t grow organically in environment and transportation and in building.

Okay. That was my next question, about Australia.

When you said -- yes, you were specific in referring to the resources sector when you say you are going to have hard time growing in?

You know there is two things. One is the resource sector that we don’t see any signs of a quick pick up.

There are no catalysts or drivers right now. And the other thing is that we also are working on some very large projects and these large projects, when they come to an end, you need to tilt them back in.

And sometimes those large projects are not -- don't materialize in the short-term. And so there is some timing effects also related to -- particularly in the resource sector, which tend to have more volatility in terms of CapEx spend and infrastructure or buildings.

Okay. I want to turn to the margins.

They were quite strong on a regional basis, and were it not for the increased global corporate cost, you would have had an amazing quarter. And that’s quite encouraging obviously as your business matures.

Any concerns that your progression towards higher margins may get -- may slowdown as a result of the -- that's a slower growth or I mean?

I think there’s two. First of all, margins.

We like to discuss margins on a yearly basis because they can fluctuate from quarter-to-quarter and by region. We have good margins overall in this quarter, third quarter, and North America has a very strong quarter.

In other parts of the world, it’s a softer quarter. In Nordics, it’s not necessarily the best quarter because there is vacation time during that period.

So I would say right now we’re pleased with the progress we are making on margins, but I would like -- I think we -- investors shouldn’t have a short-term view on margin improvements and also on margin performance. Things should be looked at on a yearly basis.

I appreciate that. Obviously there has been some good progression there.

So you are quite encouraged with it?

It’s going in the right direction.

Pierre, the fact that PB is going to start to become included in your organic growth calculation in Q4, and given the comments you made about PB and how that’s been performing, would you expect to see overall organic growth move back into positive territory in Q4 or do you think you will still be in negative territory?

I think it's a bit too early to call on that. I wouldn’t want to make -- give any guidance on this at this stage, Michael.

Okay, just shifting over to the Canadian business.

One thing we know for sure Michael is that the Q4 results will reflect again a contraction in the oil and gas space and it's a similar fashion as the third quarter.

So you're not expecting anything.

But the difference will be that the impact would be on a bigger number all else being equal than on a smaller number.

Right, so you would expect the oil and gas contraction to be similar in magnitude to what you saw in the third quarter. It’s spread over a bigger number but as far as that.

That's it.

It's not getting any…

No, right now we don't expect more contraction in that sector.

But you will be layering into your organic growth business in PB, which you sort of walked through the fact that some places of PB are stable and others are growing, but on the whole is PB still growing positively.

Well, I don't want to give any information on this right now and ahead of time. Let's get through the quarter.

We'll report back.

Okay. Alex you talked a little bit about the expectation for Global Corporate cost, $17 million to $18 million.

Can you say anything more about the magnitude of the litigation provisions that pushed those up this quarter?

Typically, I'm not providing like the breakdown Michael and under group the corporate cost. All I want to say is that this is not unusual.

Just in Canada alone we have approximately 20,000 live projects. So we expand that throughout the world.

It’s absolutely normal to have commercial dispute or claims or litigation that are ongoing. We are in the process of renegotiating our entrants by a renewal policy and so I'm not necessarily prepared to give like the magnitude of the litigation claim.

I've provided like on the whole with what I expect as a normalized global corporate cost and a run rate. So I -- but I wouldn't be, I wouldn't want to get into providing like numbers into what's claimed, what's not.

It's getting into a level of granularity that's a bit much I think.

I guess all I'm trying to do is, I think it was Frederick earlier that mentioned you know the margins would have been -- they're already very good in the quarter but they would have been even better had the Global Corporate cost been more around your stated range of $17 million to $18 million. So would you at least suggest or can you let me know if the litigation provisions in the quarter -- I understand they can happen on an ongoing basis but would they have been a little higher than what you would ordinarily incur in a typical quarter.

Not necessarily. Again, as Pierre mentioned, going back on the margin profile, I think it's dangerous to either drew some conclusion on trending of one quarter.

I think we should look at the year as a whole. We should look at PB, what months we have PB behind us for a year and look back at where we're headed in '16 and look at the margin profile.

Clearly our objective is to increase our margin profile. But I think to just extract what the claim would be or the excess over what a normal number would be, and draw some conclusion on what the margin would like, it's getting to a level of granularity Michael that I think is – I wouldn’t do, I would cautious.

I wouldn't go there. I think it’s too di minims, frankly in the bigger scheme of things.

So I would stay away from this.

Alex, just staying on the corporate cost. Is your expectation that those drop next quarter to $18 million.

Again, the answer is yes. It’s like my normalized run rate at the current exchange rate, across our 30 – because there’s a lot of moving parts and I'm trying to provide guidance on the normalized run rate and the answer is yes.

All else being equal, yes.

Right, so in other words, I’ll tip and all that as long as the stock stays stable, all that kind of stuff.

17-18 is what you should be expecting.

Okay, okay. And then just on the cost synergies.

I just want to make sure we're clear. The cumulative $30 million we'll see by year end or that's kind of the run rate by year end?

This has been like -- the $40 million over the two years will be the annualized run rate. So the 30 million was generated throughout, just to be crystal clear, throughout the year.

You will need over two years to look at the $40 million as a whole, and so that will be our run rate on an annualized basis. But the 30 million this year was generated throughout the year.

Right, so if I take -- I add the 10 million to next year, I should have -- perfect.

But again just to be a bit granular, the $10 million will be generated throughout the year.

Got it. Just in terms of the EBITDA margin targets that you put out in the past I think was 11%.

And I think 2018 if memory serves is when you think you get there. But MMM has higher margins, you’ve got to higher costs.

So you're taking out cost at a faster rate than initially thought. Does that change the end game for that 11% in your mind today?

At this time, we’re going to review. If we review we have budget and strategy meeting our Board at the end of this year and clearly we’ll be looking at the new profile with the addition of MMM, and our goal is to set goals that are achievable and to stretch bar one needed and to address them with market conditions.

But I think the objective was to improve margins. We said that in order to create the shareholder value, when we get WSP, the objective was to grow the business organically and improve margins, which we did from 2012 to 2015 and with PB it’s no different, and with any acquisition that we do, it’s to try to improve margins and grow organically the business, because that’s where you get to your best shareholder return.

And MMM obviously is a very high good profitable business, and we’re going to try to drive the best practices of MMM in our new structure in Canada and try to improve our margin in Canada, which will have a positive effect on the whole business overall. So yes, we will adjust our goals accordingly in due course.

Alex, can you comment a little bit on the remaining integration cost for Parsons-Brinckerhoff. You commented that there would be some increased cost relative to the initial plan.

Just wondering what types of costs are you still incurring and when do we see an elimination, so we can kind of see a clear number on EBITDA and EPS?

Thanks, Sara. That’s a good question.

But first of all what I said is the integration cost will not exceed the annual cost synergies. That will be generated over two years.

So from a [indiscernible] that this is bringing a bit of light on where I think we’re going to be landing from an integration cost point of view. The second part of your question is -- clearly it's been on a number of different initiatives, from stock redundancies to co-location and the real estate cost to initiatives that are taking place right now on the IP side to really bring people together faster in collaboration.

So really like to get off one system and bring everybody on the other. There are some cost associated with that.

But that taking place this year, I wish that they happen more rapidly. But I think we’re going to need a good two years to really complete the full loan integration and spend around the integration of the back office operation.

But I would say that -- I think it's fair to say that the bulk of those costs have occurred in ’15 and the remainder will obviously happen in ’16. But for the most part, those costs have already occurred in ’15 and will be occurring in the last quarter of this year.

And then maybe just again going back to the EBITDA margin goal of 11% into F18, realizing there’s puts and takes there. But I just wondered, based on the comments of nearly oil market slump impacting -- or commodities in general impacting some parts of your business; would you expect that that could impact progress that had previously been expected into F16?

No I don’t think so. I don’t think so Sara.

As I said, our margins are holding on pretty well in those sectors even if the markets -- the volume is down. So the volumes are down.

So that translate to contraction but we’re doing all we can to maintain margins in those sectors. So to answer your question, no, it shouldn’t have material impact on our progress in terms of margins.

And as I said a bit earlier, the addition of MMM should help mitigate for the contraction in the oil and gas sector.

I have wanted to ask a question about the Ontario and Quebec regions. There was pretty strong organic growth from their despite the weakness in the West Coast.

So I was just wondering if you could go a little bit more granular into where that came from?

Listen as I said a bit earlier the -- the western region is still -- some sectors are still experiencing organic growth. The major downturn in Canada right now is related to oil and gas in terms of materiality.

I would say that the transportation sector in the province of Quebec is doing very well. Our industrial and energy sectors are doing well.

When I say power -- let’s say power and industrial are doing well in Quebec also. Environmental business doing well in Ontario, in Quebec and the rest of Canada.

For that matter we have good organic everywhere. We will be able to give more interesting information in terms of market data in the next few quarters as the Canadian -- we have to reorganize our Canadian operations on a market-by-market.

And this -- so in 2016 we will be able to report by market more in terms of the Canadian operations but Quebec and Ontario are growing. Are the markets growing by 11%?

I don’t think so. So I think we’ve really gained a bit of market share in both of those markets right now.

Okay, great. And more question about the Western Canada.

I was wondering if there are any projects in the bidding pipeline that could offset some of the oil and gas downturn?

In our business, it’s not just one project. I think it’s a sector.

Right now -- we just spoke a bit earlier about the infrastructure sector -- P3 projects that are coming on board in transportation. So major opportunities in Western Canada now.

Also some very good opportunities in rail sector and then the GTA. I wouldn’t say that there was one or two projects that can offset a downturn of an industry.

But clearly an increase in infrastructure spend in Canada will be welcome to offset that downturn of the oil and gas industry right now.

I am just trying to back into some of your numbers here in Canada. Just on your Western Canadian business or your oil and gas and geomatics business, am I correct in sort of thinking roughly the business down to 50% year-over-year?

Maybe not that much, but certainly I would say down by 35% to 40% in terms of volume, yes. And that equates to what the industry seeing as a whole in terms of reduced CapEx spend right now.

Okay, okay. And as you said earlier there is no major headcount reductions or measures taken since the Q1?

In Q1 we announced we had made 500 redundancies and we have done some and we talked about as well.

And Q1, Q2, Q3 as well, we adjust the workforce due to the ongoing work.

Okay. And just on the Parsons, maybe without giving numbers; it does sound like the organic growth of that business at least year-to-date, it has been a little less than the legacy operations.

Is that correct?

I didn’t say that and I didn’t provide color on that. Depends on the sectors.

I did say that the resource sector and power sector in the UK has been quite challenging but -- and the transportation business in the U.S. was stable.

But elsewhere -- we will have more color on the organic growth of the combined business in the next few quarters.

Okay. And just on the working capital.

It’s been a big investment thus far and I understand Q4 typically sees a reversal. But should we assume that, that will be a use of cash for the year?

For the year? No.

No.

I would expect use of cash for the year -- so will end up in negative territory?

Yes.

No.

Okay.

The expectation is no.

Okay.

Because Q4 as you said is typically a strong quarter for us…

Okay.

… from a working capital point of view.

And on the cost synergies the $30 million, the $10 million, the $30 million -- you said it earlier. I think the $30 million sounds like a run rate.

So I guess we do see more than the $10 million pick up next year, correct?

It’s not run rate. $30 million is what -- the two years combined together on an annualized basis would be generating $40 million.

So that $30 million was generated throughout the year.

Maybe just a final question on the backlog. The major projects in the U.S., the high speed rail in LaGuardia, are they in backlog now?

Parts of them. What we do is normally when we -- if we have a purchase order to start work, we put them in.

But I would say that there is not much of these two projects right now that are in the backlog.

Just had another question. So in relation to your Western Canadian operations, specifically oil and gas or energy work, when you first purchased Focus, you had done some I think exploration type work which is geomatics and then you did engineering services, which was mid-stream and up stream.

Given there was some right sizing of the work force there, how would you describe the mix of operations today? Is there still a heavier weighting towards a particular area?

Yes, we continue to do the same type of work we did. It's just the volume of work is reduced Mona.

If you look at the wells and the drilling right now, there's a lot less rigs than there were a year ago. I can tell you.

And so there's, we have the full capabilities of work that we did the year ago and we still continue to do the similar type work. But it’s just that the volumes are down.

Just a without sort of beating the dead horse in relation to organic growth; looking at backlog, I mean obviously you have plus seven Q on Q organic growth there. Some of that is going to be M&A driven but should we be thinking that somehow the organic growth in backlog is going to be a decoupling from the organic growth more on the revenue line or should it all sort of trend roughly in a similar direction.

I understand that this could be volatility around sort of every quarter. So does that relationship still stand?

That's the question.

Well if you assume that we're not growing in the oil and gas sector Max, I think what you've seen in the revenue and organic point of view in Q3 excluding the oil and gas sector, that's strongly correlated to what you see in the backlog. So in other words, if you exclude oil and gas which is not growing in the backlog clearly, you see that the organic growth in the backlog is growing at a similar pace to what you see in the topline.

So I'm not suggesting it's a perfect correlation. I wouldn't want you to leave this phone call thinking it's perfectly correlated.

All I'm saying is we have seen a growth in the backlogging sector that are growing. And on the topline -- everywhere it's been growing or at least globally speaking, it's being growing everywhere except in the oil and gas sector.

So I'd say that that's where the correlation is.

And actually can you disclose what was exactly the organic growth in backlog Q on Q, in Q3.

It's 3. So the organic growth in the backlog quarter over quarter has been 3.1%.

3.1%, okay excellent. And then last question.

Obviously lots of moving parts right now from the macro perspective. What is your thought process in relation to the M&A environment?

Has anything changed there, expectations, multiples? Any update on that front please.

M&A activity we believe there still is a very strong lot of opportunities. When we believe that the M&A activity is going to be -- should be good in 2016, there are lot of opportunities and we expect continued consolidation in our industry Max, in the next year.

And so Pierre, that was a reference not just to the industry but you’re speaking about yourself as well obviously.

Well, we have always had an active pipeline of targets in various regions around the world and we -- I think investors can expect -- our growth strategy is quite clear. We want to grow organically.

That's our first objective. But we also have a plan to continue with strategic acquisitions that will enhance our expertise and our geographic position in various countries.

So I think the investors can expect that we continue to execute on our strategy.

Just a quick follow up on the Americas headcount. Looks like net 400-person reduction.

Can you just explain, was that just some seasonality or adjusting for projects or what was it?

What are you referring to on this?

You went from 7,700 people at the end of the second quarter to 7,300 in the Americas.

On the Americas, I'd say most of that would be related to our operations in Columbia. In Columbia, we had a major project that was completed and we [indiscernible] utilization of that project and also some, clearly the oil and gas impacted -- the downturn is impacting and the mining downturn is impacting that country.

Okay, well thank you very much.