Good day and welcome to the Jacobs first quarter fiscal year 2016 earnings call. All participants will be in listen-only mode. Please note, this event is being recorded. I would now like to turn the conference over to Kevin Berryman, Executive Vice President and CFO. Please go ahead. Kevin C. Berryman - Chief Financial Officer & Executive Vice President: Good morning and afternoon to all and thank you, Austin, for the introduction. We welcome everyone to Jacobs' 2016 first quarter earnings call. I will be joined on the call today by Steve Demetriou, our President and CEO. As you know, our earnings announcement and Form 10-Q were released this morning, and we'll be posting a copy of the slide presentation to our website, which we will reference in our prepared remarks. Before starting, I would like to refer you to our forward-looking statement, which is summarized on slide two. Any statements that we made today that are not based on historical fact are forward-looking statements. Although such statements are based on our current estimates and expectations and currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain. And you should not place undue reliance on such statements as actual results may differ materially. There are variety of risks, uncertainties, and other factors that could cause Jacobs' actual results to differ materially from what may be contained, extracted, or implied by our forward-looking statements. For a description of some of the risks, uncertainties, and other factors that may occur that could cause actual results to differ from our forward-looking statements, see our most recent earnings release and quarterly report on Form 10-Q as well as our Annual Report on Form 10-K for the period ended October 2, 2015, including: Item 1A, Risk Factors; Item 3, Legal Proceedings; and Item…

Our first question comes from Jamie Cook with Credit Suisse. Please go ahead. Jamie L. Cook - Credit Suisse Securities (USA) LLC (Broker): Hi, good morning, I guess a couple questions. One, Kevin, just on the guidance, you've kept the guidance the same. You now have the tax benefit of $0.09. We've bumped up our restructuring savings, which you could argue adds maybe $0.15. I guess it depends on the timing. But I guess how do we think about that? Does that imply you expect the core business relative to where you were last quarter; the underlying fundamentals have declined $0.25? If so, which businesses are driving it? Is it the incremental awards you expected this year in Chemical that you don't get, or is it projects are being slowed? I'm just trying to figure out how I think about the puts and takes of the guidance. I guess that would be my first question. If I could also get another one in there. Kevin C. Berryman - Chief Financial Officer & Executive Vice President: So, Jamie, sure. First response to the tax item, we did expect that we were going to see some tax benefits over the course of the year, timing of which is perhaps a little bit different. But we did expect that we would be able to see some benefits there. But I do think as we look to continue to drive costs out of the business, certainly the fact that we're able to deliver incremental costs does imply that certainly there is incremental potential pressure on certain of our businesses because of the continuing pressure on some of the commodity prices. So we think and believe that we are able to – be able to offset some of that with our incremental investments in terms…

The next question comes from Andrew Kaplowitz with Citigroup. Please go ahead.

Good morning, guys. Steven J. Demetriou - Chairman & Chief Executive Officer: Good morning. Kevin C. Berryman - Chief Financial Officer & Executive Vice President: Good morning.

Good morning. So, Steve, last quarter you had these relatively significant write-offs in your business, which did impact your gross margin. And this quarter, gross margin did improve sequentially. You talked about this a little bit to Jamie's question. But how do we think about the tradeoff between price pressure and the current environment on gross margin and your ability to improve gross margin through better execution? Can they balance each other? Can you see relatively stable to improving gross margins throughout the year as the pressure from these previous write-offs die off? Steven J. Demetriou - Chairman & Chief Executive Officer: Yes. I think you're focusing in on something that we're spending a lot of time at Jacobs, is to make sure we're doing a much better job of measuring what we call our underlying margin. So trying to look past some old write-offs that hit the books and really look at what's happening to underlying pricing and how we're improving the mix to drive margin improvement. And there are a lot of moving parts to that, and mix is a big piece of what happens at Jacobs because of our diverse portfolio. But all in all, when we start to really analyze, and we'll have more information that we can share starting in the second quarter when we report line of business results, we're pretty pleased with how margins are holding up. We're maximizing our high-value execution center in India, and a lot of our customers are locking in on that. So we can have a win-win with our customers on sharing the benefit of work share between multiple offices, including India. If I look at Aerospace & Technology, for example, a lot of the new business that they're winning is higher-margin long-term business, and it's replacing lower-margin business that's falling off the books. And I'd say, all in all, every business line is doing an excellent job on managing margin. And I'd say they were fairly flat to modestly up in most cases in the first quarter.

Okay, that's helpful. And then, Steve, you were pretty excited at the Analyst Day in talking about the life sciences and pharma marketing. You still are. But when we look at the Industrial backlog, sequentially it is down a little bit, even with this Biogen award. So how do we think about the Industrial business in particular and the positive impact from the life sciences and pharma market over the next year? Is that enough to offset mining and other weak industrial markets to grow that particular backlog as we go over the next year? Steven J. Demetriou - Chairman & Chief Executive Officer: I think clearly if you look at the last four or five quarters, most of the major movement downward in the backlog clearly was driven by our Mining & Minerals business line. And we think that's now stabilizing at the bottom and don't view that we're going to see a material change now driven by Mining & Minerals because it's come down so much. And in fact, as I mentioned in my remarks, of the few major projects that are out there, we're actually expecting to win the majority of those. And so that will start positively impacting our Industrial group's backlog. And as you mentioned, we're excited about the life sciences. That's clearly been an offset to what I just talked about, to be able to hold up the Industrial backlog where it is. And so I believe as we start looking forward in Industrial, we're going to see at some point a positive turn in the backlog.

Just to press you a little bit, do you think it's relatively soon, Steve, or is it at some point meaning you still have to absorb a little bit more mining and it's more like the year 2017 for a turn in Industrial? Steven J. Demetriou - Chairman & Chief Executive Officer: Again, I'm not going to be much more specific than that, but I would say my remarks are relatively near term.

Okay, thank you.

The next question comes from Jerry Revich with Goldman Sachs. Please go ahead. Jerry Revich - Goldman Sachs & Co.: Hi. Good morning, everyone. Steven J. Demetriou - Chairman & Chief Executive Officer: Good morning, Jerry. Jerry Revich - Goldman Sachs & Co.: I'm wondering if we could start with two questions around the infrastructure business. In the U.S. it sounds like you're seeing a nice pickup in activity. I'm wondering if you could quantify for us in terms of number of bids or just provide some context that looks like we're seeing an acceleration at the state level. I would love to hear some direct color from you. And then separately on the Middle East infrastructure business, can you just talk about what's the risk of project deferrals based on the moves in the commodity deck recently? Steven J. Demetriou - Chairman & Chief Executive Officer: Right, our business in the U.S. is both buildings and infrastructure. Clearly, we're seeing positive momentum on the infrastructure side, some specific initiatives being driven by the fact that the federal spending outlook is more positive than say it was a year ago. And with the recent budget approval, we're seeing more certainty, especially at the state/regional level around our infrastructure side. Some of it is very regional. We're seeing strong demand in Texas, the West Coast, Florida, for example, on the infrastructure side. When we look at the whole market, mission-critical is something we're pretty excited about and strong and believe we have excellent growth. And part of it though is the timing. We were impacted in the first quarter in mission-critical, and it was just simply our customers making some decisions on timing that were different than our expectations, but we expect to play it out as the year unfolds. So…

The next question comes from Steven Fisher with UBS. Please go ahead.

Thanks, good morning. One of the things that we've learned over the last few cycles is that E&C companies experienced market dynamics with a lag. So how comfortable are you guys – that what we've seen recently with commodity prices with what we're seeing in the customer CapEx announcement that's really properly reflected in what that lag effect could be on your fundamentals over the next few quarters, or is this more that there could be a more challenging dynamic in 2017 left to come as well? Steven J. Demetriou - Chairman & Chief Executive Officer: Again, I'm going to be repetitive here. But when I look at the backlog and analyze it, the big hard hit areas, major spending in the mining and upstream oil and gas for the most part has played out in our backlog because in today's backlog, there's very little represented there in those two hard hit sectors other than our sustaining capital and maintenance position, which we think we could even grow in a difficult environment because that's where those sectors are spending. And then you add on top of that that in the past we were somewhat over-dependent on key large players in those sectors. In the past year or so, there's been a big push to diversify and spread our wings across that industry. And so we are gaining a lot of new customers that we haven't had in the past. And as I mentioned, with the downstream focus and the size that we participate in maybe as compared to some of our competitors where we tend to be in more of the smaller mid-size range and not overly dependent on cancellations or deferrals of big large projects, we feel like, although visibility is not very clear because of the uncertainty of what's going to happen in the industry that based on the recent activity, at least we haven't seen signs that we're missing something from a lag effect or a lot of the recent announcements, but we'll see.

Okay. Kevin C. Berryman - Chief Financial Officer & Executive Vice President: Sorry, I would just add an additional comment. We continue – in backlog we're not seeing really any fundamental material cancellations that are occurring. We did have some of those early last year. So to Steve's point, we think that's largely played out. And then I think the other part that's appropriate to talk to is again the diversity of the rest of the portfolio, which is going to be we believe an opportunity for us, which will help offset some of the pressure points that you're highlighting in your question.

Okay, that's helpful. Just to come back to pricing a little bit, how quickly are you finding that it's changing from your customer perspective in the requests to you? And to what extent is it mostly just pronounced in the private sector, or is it public sector as well? And to what extent are you seeing increasing pricing pressure in the public sector as well? And I know you mentioned there are protests on contracts, but how about pricing pressure there? Steven J. Demetriou - Chairman & Chief Executive Officer: Look, pricing pressure is happening everywhere. And it's not surprising, the world's getting smarter, there's more attention across all businesses. But as I mentioned earlier, we're mitigating that with several things. One is a real good focus of understanding where we're differentiated, where we can make money, and shedding some low-value businesses and therefore getting an upgraded mix in our sales activity. And it really is starting to play out as we analyze each and every one of the four lines of businesses. And I as mentioned before, the Aerospace & Technology, which is probably our most differentiated business, yes, there's a lot of protest, but a lot of that is just the nature of the way relationships have changed in that industry over the last several years. And we believe that our reputation, our differentiated offering, our capability, experience that we're actually going to be able to see general improvement in margins there and in growth. Clearly, in places like Petroleum & Chemicals, that's where there is the highest level of challenge on pricing, as you would expect. But I think the combination of our cost improvements, including our variable costs, and then the work that we're doing with our customers to look at ways to drive down cost, including the India work share, as I mentioned, all in all is helping our mix and margins, and we're pretty pleased with the way that margins have held up in that business.

Okay. Thanks, guys.

The next question comes from Andy Wittmann with Robert W. Baird & Company. Please go ahead. Andrew John Wittmann - Robert W. Baird & Co., Inc. (Broker): Hi, thanks for taking my questions. Kevin, sorry if I missed this in your prepared remarks. But I just want to maybe get a clearer update on where we are on the restructuring actions that are in place. Can you give us at the end of the quarter what portion of the costs have been incurred of the estimated, the new estimate of $250 million? Where were we at the end of the first quarter? As well as the savings, where do we exit the quarter on the run rate versus the $180 million to $200 million as the new range? Kevin C. Berryman - Chief Financial Officer & Executive Vice President: We didn't provide ultimately the specificity to that level of detail, but let me give you a couple points. Through the first quarter, we had spent about $150 million. Last year I believe was the figure, so if you add our current quarter spend, we're in the neighborhood of $220 million plus or minus. We had probably been able to get into our results last year roughly 25% of the expected savings, and you can see the SG&A figures for Q1 were obviously quite good versus year ago, so you can see that that's continuing to build. We are taking actions in Q2, further actions. So the run rate ultimately that we will realize of the number that we're talking about in terms of the savings right now will not fully be seen in 2016 because some of that's going to be done, let's call it midyear by the end of Q2. So we'll still have some incremental benefit that occurs…

Our next question comes from Jeff Volshteyn with JPMorgan. Please go ahead.

Good morning and thank you for taking my question. I wanted to ask on budget commentary on the line-of-business repositioning. Is that fully completed now? What are some of the positive and negative lessons learned as far as human resource needs and leadership in the key positions? Steven J. Demetriou - Chairman & Chief Executive Officer: So the line-of-business reorganization has been implemented. And so we're off and running now, managing under these four lines of businesses. And it's going extremely well, a lot of excitement coming out, especially as now for the first time, we have these four business presidents able to have a clearer picture of how these sectors roll up globally and the opportunities to drive efficiency and cross-office market strategies among several other things that we believe are going to lead to improved profits and growth over the long term. And so I would say generally it's been impressive on the speed and execution. Everybody is locked in on it, and I think it's going to help us clarify our strategy now over the next several months as we undergo strategic review on each of the lines of businesses. And each of them are dissecting their portfolio and seeing some very interesting things that hopefully we can impact in the short term. So I would say, without trying to overly hype it, it's hard for me to think of any negative lessons learned in that generally everybody is building momentum. And the main reason that it's moving so quickly and building momentum is, as I came into the company, as I mentioned before, this isn't something that I decided that from my past was the right way to run the company. It was just an overwhelming set of inputs to us that we need to move in this direction, that we have tremendous opportunity if we can focus and better integrate and hold accountable global lines of businesses. And so I think that's the main reason why I'm pretty positive about the way it's unfolding.

That's helpful, just a few follow-up questions. Geographically, the restructuring efforts, are they changing your geographical presence in a material way? Steven J. Demetriou - Chairman & Chief Executive Officer: No, no, not at all. If anything, clearly, if you look at each and every one of the lines of businesses, geographic expansion will most likely be part of the strategy because we're very strong in certain geographies, but have left maybe potentially on the table some interesting opportunities in the past that we now just need to seriously consider. And we'll be selective and make sure we can win, and it needs to be profitably growth driven, not just growth. So more to come on that.

And just a clarification on one of the questions that was asked earlier about the 2016 guidance. The $0.09 tax benefit that is now included, was it included previously when you reported last quarter, or is this a new addition to guidance? Kevin C. Berryman - Chief Financial Officer & Executive Vice President: We did have some estimates relative to tax benefits assumed in the full year.

Okay, thank you.

The next question comes from Michael Dudas with Sterne Agee. Please go ahead.

Good morning, Kevin and Steve. Steven J. Demetriou - Chairman & Chief Executive Officer: Good morning. Kevin C. Berryman - Chief Financial Officer & Executive Vice President: Good morning.

Steve, since Analyst Day here in New York, equity and bond markets have become more fearful. Economic activity and the data seem to be coming in worse than anticipated. As you look through your business and maybe some of the history you've had in your career, is the market too overly pessimistic, about right, maybe not as pessimistic enough about what you see in business conditions, not only just U.S., but in some of your major end markets globally? Steven J. Demetriou - Chairman & Chief Executive Officer: Let me just frame the answer around how we're responding to that uncertainty, because we don't know, and we're not experts on being able to predict the oil markets or what's going to happen to copper prices or iron ore. But again, what excites me is as we have everyone now focused, more transparency, more rigor, more accountability, as big as we are and as diverse as we are, there's a huge opportunity of growth just based on, in many of the cases we're starting with small shares, and yet we're very strong in where we have those small share of businesses. And so even in this difficult environment, it feels like there's good opportunity out there. But clearly pressures that we have to manage through and a changeover in our backlog, for example, that is working off some old business as we get out there and execute the type of things that I'm talking about. And so, I think it's uncertain. We're not banking on oil prices going up or mining prices going up. When they do, we're going to be positioned extremely well because of our more efficient and even more efficient cost structure in the future. And so we're excited about when that happens, we'll be positioned well. But as we talk now in the near term, it's all about going after opportunities that are in front of us, and it feels like those opportunities should also allow us to see some modest growth as we execute them over the near term.

It seems like you have an increasing confidence that Jacobs as an organization has a better chance to win more business, even though the opportunities and the projects and maybe overall activity may not be as robust as it was, say, six to 12 months ago, given the restructuring and where you're targeting your manpower. Steven J. Demetriou - Chairman & Chief Executive Officer: Yes, I think you said it well.

Excellent. Thanks, Steve.

Our next question comes from Tahira Afzal with KeyBanc. Please go ahead.

Thank you very much. Steve, have you seen any irrational bidders jumping into the space, some of your more challenged space? And if they have or you expect them to, what is the customers' approach to that given it's been mixed for them in the past? Steven J. Demetriou - Chairman & Chief Executive Officer: Unfortunately, in my entire career, I've always faced some irrational competitors. But just putting that comment aside, again, in our business where we have longstanding relationships and have a very strong reputation on our various capabilities, it's all about execution. It's all about being more efficient. It's making sure that we're raising accountability and expectations, making sure we're upgrading the talent and all those things we're doing. And it all started even before I arrived, and we're accelerating it with the new lines of business. I'm not sitting here today worried about irrational competitive behavior. I'm more excited about that there are a lot of things in our control to improve this company, both top line and structure. So that's what we're focused on, and so it's not the top of mind with regard to what you're concerned about.

Got it, okay. And, Kevin, can you comment a bit about how we should be thinking about free cash flow? You're going to be seeing more savings coming through your restructuring plans, but at the same time, a little more cost. Any kind of guidance qualitatively even would be helpful. And then perhaps you both can maybe comment on capital allocation, any incremental update? Your slides are the same, but any change to that post the Investor Day you guys posted? Kevin C. Berryman - Chief Financial Officer & Executive Vice President: Perhaps some, let me make some high-level comments on the question. First thing is we do expect our cash flow to improve over the balance of the year versus first quarter. And the first quarter typically it's not always the case because, depending upon what the end balance sheet data is, there can be fluctuations by quarter. But generally speaking, Q1 tends to be one of our softer cash flow quarters. And so I fundamentally do believe there will be improvements over the balance of the year. I did make the comment in the prepared remarks that we expect to start to generate some improvements in our working capital efforts, and we do believe that will translate into improvements in cash flow over the balance of the year. So I think that that's the focus area for us on the balance of 2016. And clearly if we make progress there, we fundamentally believe those are sustainable going forward, which translates into our ability to be able to improve cash flows longer term. I don't know that I want to get into much more detail than that. But I do feel the team is focused. The lines of businesses are actually accelerating and supporting incremental focus against the effort. And so I do believe that we're going able to see some progress there.

Got it. And capital allocation, I know you reiterated everything in your slides. Any update there in terms of buyback, et cetera? Your stock has clearly reacted to oil prices, yet it seems that the initiatives you're taking, your non-energy markets are performing well. Does that make you perhaps a little more aggressive in your buyback? Kevin C. Berryman - Chief Financial Officer & Executive Vice President: Our discussions with the board is that we would have a measured approach to our share buyback at this particular point in time. That's unchanged. The capital allocation, as we've suggested in previous discussions, is that we will look to finalize our strategy. That work is ongoing, as Steve outlined, and that will ultimately provide some additional clarity as it relates to what the growth opportunities look like and what the cash needs associated with those might look like and consequently what any potential revised capital allocation strategy might look like. So more to come on that, and I think it's ultimately got to be intimately tied to how we'll expect it and finalizing our growth objectives longer term.

Thanks, folks.

The last question comes from John Rogers with D.A. Davidson. Please go ahead. John Bergstrom Rogers - D. A. Davidson & Co.: Hi, good morning. Thanks for taking my question, just a couple of follow-ups. Steve, based on your comments, it sounds like you've got some confidence, especially with some of the chemical and government projects, that you can grow backlog by the end of this year. Steven J. Demetriou - Chairman & Chief Executive Officer: Look, I'm confident that we can get back on the growth track. I don't want to give any specific guidance on backlog or timing other than I do expect to see the backlog reverse at some point in the near term, and it's just based on what I've talked about before that most of the hard hit areas, specifically upstream and mining, represent a small portion of our backlog. And I'm pretty excited about some of the prospects that we have in some of the better growth dynamic businesses. And so hopefully that's going allow us to see a trend positively in our backlog at some point. John Bergstrom Rogers - D. A. Davidson & Co.: Okay. And just to be clear, I think, Kevin, you said that you've seen some cancellations in early FY 2015, but you haven't seen any recently or significant ones recently. Is that fair? Just give me... Kevin C. Berryman - Chief Financial Officer & Executive Vice President: Yes, there are always pluses and minuses in every quarter. John Bergstrom Rogers - D. A. Davidson & Co.: Yes. Kevin C. Berryman - Chief Financial Officer & Executive Vice President: But the ones that we talked about and actually highlighted were at the beginning of 2015, and we really haven't seen material changes at this particular point in time since…

This concludes our question-and-answer session. I would like to turn the conference back over to Steve Demetriou, President & CEO, for any closing remarks. Steven J. Demetriou - Chairman & Chief Executive Officer: Thank you all for calling in, and look forward to talking to you again next quarter. Thank you. Kevin C. Berryman - Chief Financial Officer & Executive Vice President: Thank you, all.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.