Welcome to Stantec Inc.'s Fourth Quarter and 2014 Year-End Earnings Results Conference Call. With us today from Stantec management are Bob Gomes, President and Chief Executive Officer; and Dan Lefaivre, Chief Financial Officer. [Operator Instructions] As a reminder, today is February 26, 2015, and this conference call is being recorded as well as broadcasted live over the Internet. It will be archived for future reference at stantec.com under the Investors section. Therefore, any members of the media who are joining the call today in a listen-only mode and who wish to quote anyone other than Mr. Gomes or Mr. Lefaivre are asked to please request permission to do so from the individual concerned. Stantec management would like to caution you that this call will include forward-looking statements and forward-looking information within the meaning of applicable U.S. and Canadian securities laws. By their very nature, forward-looking statements require Stantec management to make assumptions and are subject to inherent risks and uncertainties. In addition, Stantec management will be mentioning additional and non-IFRS measures. I would now like to introduce your host, Bob Gomes. Please go ahead, sir.

Thank you, John. Good afternoon, everyone, and welcome to our 2014 fourth quarter and annual results conference call. Dan will provide a brief summary of our financial results for 2014 and the fourth quarter. I will then follow with some highlights from our performance in 2014 and an outline of our market outlook for 2015. We will then address individual questions. Today, we released the results of Stantec's operations for the fourth quarter and full year 2014. I am pleased to report we achieved solid results with growth across all our geographic regions and business operating units for the year. These positive results for 2014 build on what was a very strong year for Stantec in 2013. While the second half of 2014 was marked by shifts in market conditions, our continued profitability over the year resulted from our diversified business model and our consistent, disciplined strategy. Dan will now provide a review of our fourth quarter and year-end financial results. Dan?

Thank you, Bob. Good afternoon, everyone. Our revenue growth in Q4 '14 was positive compared to Q4 '13 and caps off a solid year of growth. During Q4 '14, our gross revenue increased by $72 million or 12.5% compared to the same period in 2013, resulting from the impact of acquisitions completed in 2013 and 2014 and organic revenue growth as well as the weakening of the Canadian dollar. The average exchange rate for the Canadian dollar was $0.88 during Q4 '14 compared to $0.95 in Q4 '13. Buildings continued its momentum of organic revenue growth in the quarter with an increase of 8.4% compared to Q4 '13. This growth was mainly due to improved project management and growth in our Canadian and international health care sectors. In Q4 '14, our Energy & Resources business had organic revenue retraction of about 6.6% compared to Q4 '13. Recall that we were comparing to an exceptionally strong Q4 '13 performance. We've seen a slowdown primarily in terminals-related work in the Oil & Gas midstream business. Our Infrastructure business operating unit achieved 4.7% organic gross revenue growth in Q4 '14, resulting from growth in each of the Water, Transportation and Community Development sectors. On a full year basis, overall gross revenue increased 13.1% year-over-year to over $2.5 billion in 2014 compared to $2.2 billion in 2013. Our full year organic revenue growth was positive at 3.9%. This growth was due to increased activity in all of our business sectors and geographies, as Bob previously mentioned. On a full year basis, our gross margin remained within our targeted range at 54.9%, an increase from 54.7% in 2013. Administrative and marketing expenses were lower in Q4 '14 at 42.5% compared to 43.7% in Q4 2013. The expense in Q4 '13 was historically high due to…

Thanks, Dan. First, as Dan mentioned, we saw growth across our business, despite the shifts in market conditions. We demonstrated the strength of our diversified business model, now with more than 3 years in a row of sustained organic growth and 60 years of profitability. Second, we continue to successfully evolve our company by completing our realignment into 3 business operating units. And third, we demonstrated the strength of our disciplined and targeted acquisition strategy with 8 acquisitions in 2014, the close of the Dessau acquisition this January and with the anticipated addition of Sparling, based in Seattle, announced earlier this month. In addition to Dessau and Sparling, we welcome the Williamsburg Environmental Group, ProU, JBR Environmental Consultants, SHW, Wiley Engineering, USKH, ADD Inc., and Penfield & Smith to the Stantec community in 2014. The addition of these companies have strengthened our presence in North America, as we to continue to build a top-tier position in our sectors and strategically position our company from market opportunities. And at the close of the Dessau acquisition in Québec, we now have full capability to service national clients wherever they may be operating across Canada. Looking at our performance across our business operating units. I would like to provide you with some highlights from 2014. Over the past year, we demonstrated that our diversified business model has responded well to changing market conditions. In our Buildings business operating unit, we achieved strong organic growth in the second half of 2014, leading to overall organic growth for the year. We capitalized on strengthening opportunities, especially in key sectors such as education, health care and commercial. For example, during the fourth quarter 2014, we secured architectural and engineering work for the Lake Forest College Johnson Science Center in Lake Forest, Illinois. In our Energy &…

[Operator Instructions] Your first question today will come from Sara O'Brien with RBC Capital Markets.

Bob, can you comment on the -- I guess, the degree that Alberta is important in your Infrastructure and Buildings works and how that might unfold into maybe changing an outlook through F '15 if commodity price does not improve?

Our Infrastructure business, which is Transportation, Water and Community Development, is really diversified across all of North America. I think if you were to look to Stantec 3 years ago, I would say that roughly 30% to 40% of that business would be in Alberta. My guess now is less than 20% of that business is focused in Alberta. It's much more diversified. Our Transportation business, for example, about 60% of our Transportation business is south of the border in the United States. So I think -- that's why we have some confidence that Alberta, although it's important to us, over the past 3 years, the other parts of our business have actually grown in other areas outside of Alberta. So we're not too concerned. And it's interesting that even though the oil prices are having an impact, that impact we haven't seen affect our Water business or our Buildings business to any great extent. Transportation is a little bit more dependent upon the public sector funding, and the Alberta government has made comments with regards to those potential cutbacks and deficits. But to-date, we really haven't seen that impact, and we don't see it as being overly significant. Again, if oil prices continue to drop, that may have a further impact, though.

Okay. And just in terms of your Buildings, how much of that will be related to Alberta versus other geography?

I'd be guessing, Sara, so it'll be a bad guess probably. But again, it's -- our Buildings business is well diversified. We do have some significant projects going in, in Alberta, specifically in Edmonton right now, but I don't think it's more than 10% or 15%.

Those projects are already in the ground, being built as well. We have a larger presence internationally and in the U.S. in our Buildings practice, so less exposed to Buildings in Alberta, Sara.

Okay, great. And then maybe just following on the Oil & Gas weakness, just wondered if there are -- I mean, do you view this as an opportunity to -- for expansion in the U.S. market, given multiple contraction for peers and potential targets, or is this something that you wait to see how things play out?

No, I think we are very confident that long term, that Oil & Gas, that Energy business is still a good part of our diversified model. We are always looking at opportunities at the opposite ends of the cycle to see if companies that may not have been interested last year or too busy to talk would be interested now. So we always are looking for those types of opportunities. And for the right price and for the right company, yes, certainly, we'll be looking at further growth in that area.

Okay. And also just lastly maybe on foreign exchange. Wondered with the Canadian dollar weakness if that impacts your decision in any way to go after U.S. or international targets at this point?

It doesn't have an impact, Sara. We mitigate any foreign exchange risk that we have. When we're working in the U.S, we earn revenue in the U.S., we have expenses in the U.S. We mitigate our exposure on our balance sheet, which is really where you could get some volatility and exposure to FX. So we keep a close handle on that. So no, we don't believe that there is anything constraining us from acquiring the U.S. firm or an international firm due to currency.

Yes. Bottom line, FX, this really doesn't -- it is what it is and it really doesn't impact our strategy.

Your next question will come from Bert Powell with BMO Capital Markets.

Bob, it sounds like, for '15, things will shift a little bit more to the U.S. for growth. Historically, that's been a market that's been -- for a number of reasons, cost structure in end markets has been more challenged on the gross margin front. How should we think about the gross margin in your U.S. business today, given some of the internal initiatives that you've taken and some of the acquisitions that you've done?

Again, we don't see that gross margin really changing dramatically. You're right that there is a higher cost for doing business in the U.S. At the same point in time, that's offset by lower S&G&A -- SG&A cost that we feel, as we get larger in the U.S., we're finding those efficiencies. I think we've proven that over the past 5 years, we've exponentially grown our U.S. presence and really has not affected our overall gross margins of the company, and we don't see that changing over the next few years as we continue to grow in the U.S.

Okay. And then, in terms of Dessau, have you done anything in terms of the integration or that happens now in Q1? And if that's the case, just typically, depending on varying degrees of difficulty or complexity associated with acquisitions that can chew up more time and allocate more cost to G&A. Just for the next quarter, should we be expecting that G&A to bump up as you do this acquisition, or is this going to be a pretty straightforward and we're not going to see that?

Well, certainly, Dessau offers us, I would say, more challenges than your typical acquisition for 2 reasons. One, it's very large. It's the second largest acquisition we've ever done. And because of the French language, we have a lot of adjustments to our systems to be able to operate in French and English. But we're really happy that we've actually gone through most of that heavy-lifting the latter part of December and into January. And Dan can provide a bit more color on it, but we're pretty comfortable that, that integration, which we have had to accelerate for a number of reasons and get them into our system, has gone very well.

We have been -- we have planned for an immediate integration of the Dessau operations post closing. So as soon as we closed that transaction, we started the integration of the business systems, dealing with training, health and safety, integrity and business systems training. We will be coming out of blackout within the next week or so. It takes some time to migrate all the data and the details and the systems. But we have planned for an immediate one. There was a lot of Bob -- as Bob mentioned, a lot of heavy-lifting around getting our business systems ready to go, but we're very well positioned and actually very pleased with how it's gone so far. It's been quite a positive experience for everybody involved.

Okay. Last question on Dessau. How long before you think you can get them into your targeted EBITDA margin range?

That's where it's going to take some time just to get a little bit of visibility. That was our objective is to get it soon. It just takes a little bit to get visibility, and we'll be getting visibility right away in the next couple of weeks. As far as getting them to the same EBITDA margins, a little early to comment on that from my perspective.

Yes, I don't think we have enough visibility in there to really determine. That's why, again, we wanted to get their projects and information into our system, so we do get that the visibility. So I think we'll have a better answer to that question in our second quarter call or first quarter call.

Your next question will come from Ben Cherniavsky with Raymond James.

I am -- one of the things I want to try and get a better understanding of is your organic growth guidance of 3%, and it sounds like you're saying it's going to be back-end loaded. The first half, might contract. That would include, if I recall, a contraction over a fairly easy comp in the first quarter last year because of the weather impact. And then, growth in the back half, I know -- what is it that gives you the confidence at this point to see that inflection point when the calendar turns July 1? Like what's -- what is it other than hope that would say the second half of this year is better than the first?

We've always said, hope is never a good strategy. But in this case, we can't control the oil prices. What we've done is really sit down with our clients, Ben, and try to figure out where do they see their business going. And I think, right now, that if oil stabilizes or stabilizes as a number closer, a little bit lower than where it is today, our clients feel that they will still proceed with projects. They were waiting to see what was going to end up and where this the bottom was going to hit. So they feel the bottom has been hit or very close to it, and based on that, they will then advance projects that make sense. And we have those projects. It's just a matter of will the clients advance them and when. So we're really going off of the knowledge from our client base. We don't have any more to go off of that. And again, focused on where we are, which is midstream, those projects are much less dependent upon an oil price and more dependent upon the client actually proceeding and signing contracts. And there's still an undersupply of transportation network for the existing oil being produced. So all those factors give us a feeling that the first half of the year, everyone is waiting to see what's going to happen and that in the second half of the year, a lot of the noise will bleed out and they'll be able to proceed with projects. So that proviso there is if oil continues a downward trend and continues, that will continue to drag some of those decision-makings out to even later. But right now, our clients are telling us that, and that's what we're reporting.

Fair enough. I think that's a sensible strategy. It's hard to know what's going to happen right now. And -- but this may be splitting hairs a little bit. But on the energy side, you're talking about, down in the first half, stabilizing in the second half and stable for the year. How do you go down, stable and stable for the year? How are you not down for the year?

I guess you need the definition of stable. So stable.

I'd like to clarify that, I guess, yes.

And that is splitting hair. So it's always been a few percentage points. It is -- stable would be a negative 2 to a plus 2. So their potential has been in the first half of the year. We could have a slight retraction, and that will get us back to a point that's slightly above 0. Could it end up slightly below? It could. So we try to give ourselves as much wiggle room. You know us, Ben, we're fairly conservative. But we do believe that there's going to be some retraction in the first year in it, and we feel that will recover. Where it ends up? We'll be as close to 0 as we think we could get.

Yes -- no, I know you guys are, in fact -- I think, in the past, sort of the only thing you could really be criticized for is maybe being too conservative, although I would -- my impression of your outlook for this year seems, frankly, a little bit aggressive to me. But just sitting where we're at today, with what's happened in the energy markets for the year -- not that I don't see the potential for you to grow your business in other areas. But just as far as energy goes, by most accounts, this year -- I've seen this year sort of a write-off for most guys who -- most companies who are touching that sector right now. As far as the back half goes, it's difficult to see what changes, in my mind.

Yes, I think it's stabilizing, though. And then -- and again, we really want to focus the fact that most of our business is in midstream. About 55% of that midstream work is engineering work, which definitely has more of an impact. The other 45% of that business in midstream is Environmental Services work. That has -- it's less capital -- affected by capital -- by the capital investments of our clients. In other words, the clients will continue to go through, get their permitting, getting their compliance work, getting their environmental audits done and reviews and don't usually pull those projects back as strongly as they do actual construction and capital-intensive programs. So because of where we are in that space, I think we're pretty confident that we're not looking for recovery in oil prices to give us the work, we're just looking for a little stability so our clients get their feet under them. So maybe that's why we're being a little bit more positive than some of our competitors is because of the space that we play in and the type of work that we do in that space.

That's very helpful. On a more positive note, what are you seeing in U.S. urban land specifically? I know you had some comments about it in your MD&A. But I mean, in the past, you said that counter to much of the excitement around that sector, the market, you guys actually haven't seen a big uptake in demand for design and planning. Is that changing at all yet?

Well, I still wouldn't use the word big uptake, but it has been a steady increase that in all markets, in all various sectors, in the residential market in the United States, we're seeing more and more projects advance. We're seeing more and more clients get a little bit more confident and aggressive in their planning the projects. We're seeing some resurgence in markets that we haven't seen for a while for Florida, for example. So even though we haven't seen this big resurgence in demand, we see consistent increases and some consistent flow of projects. So we've had some good growth in that area, and we see that continuing into 2015. We don't see anything on the horizon of the U.S. economy that's really going to stop that. We also don't see anything, though, in U.S. economy that's going to create that big resurgence that maybe everyone's been waiting for, but I think we're very happy with the slow and steady growth we're seeing.

If I could just squeeze in one housekeeping one for you, Dan, on the amortization of intangibles. Can you help us what that might be in the next couple of quarters or for the year, just in light of the Dessau acquisition, because I know that, that moves around with acquisitions?

Yes, I don't have the exact numbers, Ben. We will certainly be able to provide that in the Q1 call with the amortization. I think you can expect certainly the amortization of intangibles to be a little higher in the first half or for 2015, really due to the amortization of our backlog and client relationships. But I don't have the specific numbers for you today.

[Operator Instructions] Your next question will come from Tahira Afzal with KeyBanc.

I guess, as I'm allowed to ask a couple of questions, first one really is on the transportation side in the U.S. There is a preliminary budget, as you know, that's out. And within that, there is a big safety-related spending stipulation largely tied to bridges. Who knows if it will be revised down, but even then, it's a very sizable increase over anything we've seen in the past. Would love to get a sense -- I know you guys have a good presence in the Northeast on the bridge side. Would love to get a sense how that market is doing, and if there is an increase, what type of opportunity it represents to you all?

I can't probably put a number on it, Tahira, with regards to a percentage increase. But our folks in the U.S., and specifically, as you said, in the Northeast where we have a lot of bridge expertise, but we also have that bridge expertise in the South as well, are very excited. We haven't seen a huge number of opportunities come across our desk, but we have clients that we are now close to that are certainly anticipating that they're going to be moving projects ahead. So that's one of the reasons, I think, we do feel that our U.S. operations are going to be a much stronger contributor to Stantec in 2015 as a result of things like that. So strong bridge group. We are well connected to our clients. We're well positioned. Those projects still have to come out and get bid, if it's through DoT. A lot of our clients are looking at taking and seeing if they can leverage a design build alternative to still leverage those funds. So some planning work going on, but we are also very optimistic that's going to give us some more opportunities in the U.S.

Got it. And second is on the midstream side in the U.S. Obviously, everyone is worried about the shield stuff and all. But if you look at some of the large pipelines, in fact, a lot of the natural gas pipelines, which are sort of $5 billion type of projects, they seem to be tied to natural gas movement for end user consumer, consumer end at the sort of end of the line, so myself and others, I guess. So would love to get a sense if you've got a target to see a shift in terms of the customers that are -- that you're working with in the U.S. Are you seeing sort of more utilities sort of showing up at your door?

Not really. I can't say that we've seen a major shift. We do get that as well. The comments we've heard from our folks are that there is going to be more pipeline work in the natural gas and more -- and as you say, the distribution, the smaller diameter lines. That's not an area where we're very strong in. And so I don't see that as having an immediate impact to us. What we do see is some of our coal plant clients installing gas-powered turbines to augment what they're doing or even replace some of the power. So we're seeing that as an opportunity linked to gas, but certainly not the smaller-diameter pipeline opportunities. It sort of gives us though a focus on if that's an area that we're not taking advantage of, it posses an acquisition opportunity for us, the companies that may get a benefit from that area.

Your next question will come from Sami Abboud with Scotiabank.

I'm filling in for Anthony Zicha. My first question is on the acquisition pipeline. How does it look? And given the weakness in oil, are you seeing any softness in the takeout multiples? And maybe just some color on what you would be targeting. Would you be more aggressive in 2015?

So overall, from an acquisition pipeline perspective, we're still very happy with the good quality companies we're talking to. And we are, I would say, a very well-known acquirer now within the North American market. So we're seeing many still opportunities come forward, and we'd say, those opportunities are across all the sectors or business operating units we work in. We're always targeting firms, and certainly, some of the firms we've targeted in the Oil & Gas sector, we are reconnecting with them. Last year was a busy year for them. This year, not so much. Again, we've never really felt that multiples have a huge change in the actual multiples. It's really what does that multiple being applied against and what are the revenues and EBITDA margins for those companies going forward, and how fast is it going to recover, and how much can you pay a multiple on those predictions is really going to dictate how much you pay for those companies. So that's why, it's always difficult, even in a down cycle, to then predict when will that cycle recover and how much is that company worth, based on that. So certainly, we're interested. As we said earlier in another call, we're always looking at expanding our business and diversifying it further in all cycles, up or down. And right now, we're seeing multiple opportunities across all the sectors.

Okay. And my last question, can you please maybe comment on the backlog and gross margins within backlog, maybe just more along the lines of the size of the projects that are currently there? You -- for a while, you started picking up larger-sized projects. With the slowdown in energy, do you think you'd go back to smaller projects or smaller sizes with higher margins? Just some comments there would be helpful.

Sure. You know, Stantec is such a diversified company with various businesses we're in. Our backlog is really made up of literally thousands of projects. And at any one time, yes, you can have a few large ones in there, but we really have thousands of smaller projects all the time. So even when we were capturing those larger projects, a good part of our revenues is just supported by those small everyday projects we work in locally through in our 250 locations. So we feel that, that's a real key component of our strategy. We're not dependent upon those large projects going ahead for us to make a good year. What we need is a very broad advancement of projects with all our clients in all our sectors. So right now, the mix in our backlog is -- pretty much reflects in our revenue that we've been generating. We don't disclose the backlog per operating unit or per country, but it is a pretty good reflection of our past revenues. That would be a pretty good representation of where our backlog sits. And gross margins will be when we execute them. So we don't see any -- that changing as well. So I think we like to always stress that Stantec is a company that's made up of literally thousands of projects and hundreds of clients. So never depend upon that 1 or 2 big projects. We are not too overly concerned with those not being there. It just means you got to win a lot more smaller projects.

Your next question will come from Michael Tupholme with TD Securities.

There was mention in the MD&A of some additional cost, estimated cost to complete certain projects or project adjustment costs. So I wonder if you can elaborate on that a little bit, please.

Sure. That was really related to some of our Buildings projects. We have -- it's a normal course event where you're always evaluating your estimates to complete your estimates at completion. It did impact the gross margins a little bit in our Buildings practice in Q4. Now that's pretty normal course, Michael. It's not something that is going to be recurring every quarter. It's a very standard procedure. That's what impacted [indiscernible].

I know in the past, you haven't -- you don't typically like to quantify these things. But if we look at the international gross margin, it was down a lot. So I guess, all this was in your International segment. If we were to just think about where that margin was in the prior year quarter, prior year fourth quarter, is that -- I mean, absent these adjustments, will be somewhere similar to where you were last year?

Yes -- no, that'd be a good estimation of that. It's basically a one-time thing. So we'd expect our margins in the fourth quarter should have been around that fourth quarter from 2013.

Okay. And so just last thing on this topic. Are these -- this is multiple projects. And are they done, or is there -- do they carry on and therefore some potential further risk?

Once you take that estimate to complete, that should normalized margins for the remainder of the project, assuming we execute them well. And that's really our objective is to do that.

And I don't see that continuing as a trend on those projects.

Right, okay, perfect. And then just, you mentioned, Bob, haven't talked about it a lot about on this call about the mining area. You mentioned in your comments a potential for delays, and I wasn't clear if that was in the context of work you have in hand right now potentially getting delayed or if you're talking about opportunities that you see in front of you potentially being delayed?

Yes -- no, it's future opportunities. We're talking to clients right now about some future work and it's whether that work will proceed or not. But we're actually still really happy with our position in that mining industry. Obviously, it's worldwide at a low cycle, but we've got some good clients that are still proceeding. And we do a lot of work that's not directly associated with the construction in the mine, but also a lot of the pre-FEED work and feasibility and analysis. So we've got some front-end work going on that we feel will continue to give us revenue. But there are some more larger projects that our clients are talking about that have not been given the go-ahead yet that may have some impact.

Okay. But nothing you have in hand has been deferred or you've been asked to stop work on something that you had been working on?

No. Jansen is the only thing that has been slowed down, but we've been messaging that for a number of quarters, and that has not changed.

Okay, great. And then you were asked about the outlook for residential work in the U.S. Just wondering if you can talk about the outlook for Canada and maybe specifically within that Western Canada, given that some of that may tie back ultimately to what's going on with energy markets.

Certainly, that's our clients in the land market has been through this before. They've seen this movie where there is an impact on people buying houses when they're in a low part of the cycle. So it's not something we're overly concerned about. Our clients are usually going to go ahead with smaller projects in that case. But we still see some revenue generation. The clients we've talked to in Alberta are on a sort of wait-to-seeing mode, but they still have some projects going ahead. So because of their -- the fact that they've gone through this before, there's not a huge amount of inventory sitting in Alberta that's unused, and they still need to feed that inventory. It just may be fed at a slower rate.

Your next question will come from Mona Nazir with Laurentian Bank.

So on just turning back to Dessau, I know that you had a lengthy due diligence period. I'm just wondering, were there any surprises or was everything as expected? And is it also possible to gain market share in Québec now that you have a presence there, given what's going on with some of your peers in the province? And you've previously spoken about adding staff, and is that still in the plans?

So with regard to the first question, have we seen any surprises to-date, no. That's the good news is so far, it's been pretty much as we expected. We're pleasantly surprised, to tell you the truth, that we haven't seen more issues that we weren't aware of. So far, we're very happy with what we have seen. We're very satisfied with the staff, their motivation, their enthusiasm, their excitement. I spent last week in Québec visiting 8 of their offices, and I was very impressed with their passion and their enthusiasm, which is a really key part of any transaction when you're talking about people business. With regards to increasing our operations in Québec, absolutely, that is our goal. That's one of the reasons we did the transaction is so we can get a larger market share in Québec as well as leverage the capabilities and expertise that's within Québec into other clients outside of Québec. And we're already seeing that. We have their power group working in some of our projects in Maine and augmenting what we do there. We're using some of their telecommunications people to try and win work in Western Canada. We have now a much larger transportation group. We've added the Stantec team, of course, to the Dessau team, and we can now win some bigger projects. We can now attract some bigger partners and take a better position on many of the P3 projects that are there. So the strategies I would say, those are typical that you always use when you do an acquisition. But for Dessau, we see some of those happening sooner than later. So I did make a comment when I was in Québec that our goal is to hire more people in Québec. That's the goal. Today, we can't say how quickly we can act on that goal, because that's going to require us to win some additional work. But certainly, we see the opportunities. The strategy is working well and the staff are very enthusiastic. So all the ingredients are there. We just need to win some work.

Okay, perfect. And secondly, for those of us based outside of Western Canada, it's hard to see the potential impact of declining crude prices on your business, and I know you spent some time on the call on it. We are well into Q1 now, and just based on your comments that you've made, is it fair to say that the contraction on the energy resources side could be greater than 3%? And with that, do you expect any reductions in headcount?

Well, there always has -- especially in the business, the oil and gas business, or any type of the resource business, that is what I would call a lower-margin business, where you have to manage high utilization. The minute the revenues decrease or projects are delayed or projects are canceled or postponed, you have to deal with rationalizing staff. That is always a hard thing to do when you're just a people business. But we understand that business, and we understand that I think our staff understand that, that is one of the ramifications of the oil and gas business. So we have had to. We constantly are doing that. It's an ongoing strategy. We are starting last year, and we will continue to essentially match our staff to our backlog in a very accurate and a very quick way. What we've seen so far is as much as what we expected. I don't think that we're overly surprised with our clients' cautiousness associated with their projects and them holding some projects back. But as I said, that is really impacting, I would say, our engineering business first, which is 55% of that midstream business, and will start impacting our environmental services business secondly, and we haven't seen as much of that impact yet on the environmental business. But still early days of the quarter and certainly early days of the first half of this year. We haven't seen any surprises. The good news, oil seems to be stabilizing. It bounces around a lot, but if it stabilizes around the level it's at now, we're pretty comfortable the second half of the year we'll recover.

Okay. can you quantify how many staff has been rationalized?

There has been, I would say, a little over 200, 200 to 300 staff that's mainly in Alberta. But it has extended to some of the projects in Atlantic Canada or some of our staff in Atlantic Canada and into the U.S. as well with the ProU. So around that 300 mark. I think, everyone has got to put in perspective, we probably hired 800 people in the last 2 years. So we're still well above where we were when we started in this business. And as we said before, this is fairly common. We've gone through these cycles before.

Okay. And just lastly for me. Turning to your balance sheet. Factoring in Dessau, your net debt EBITDA is up, although still below 1x. You've said previously that you're in all the practice areas that you want to be, and I just want to confirm that this still holds true. Is there any area of expertise or niche area that Stantec is missing at this point in time?

No, I wouldn't say there's any significant area outside of the practices we're in. There's always specialized niche areas that are complementary to what we do in the Energy & Resources, in the Buildings, and in the Infrastructure area. But certainly, don't see ourselves having to step outside of that at all. There's always things like specialized services in studies in mining. For example, you can do and look for some acquisitions to really strengthen your portfolio of services within those areas, but we're very comfortable that we're pretty diverse as it is, and we want us to focus on that current diversity we have. So we don't see ourselves stepping outside of that.

Your next question will come from Benoit Poirier with Desjardins. Charles Perron-Piché - Desjardins Securities Inc., Research Division: This is Charles Perron filling in for Benoit. Just one quick question. Can you discuss about the EBITDA margin outlook for 2015, which is stable for -- from 2014? But maybe more details about -- is it more resiliency across the board in your margin, or is it a shift around the different divisions that you're expecting in 2015 for those margins?

I think the EBITDA margin, Charles, in each of our business lines fluctuates a little bit. It really depends on the gross margin that we're getting and the utilization of our staff. But what we found is when we're running our forecast is it still will result in the overall EBITDA margin of being fairly consistent with what we've seen not only in 2014 but in prior years. So you can see some fluctuation in gross margin, but EBITDA is largely driven by utilization as well.

And your next question will come from John Rogers with D.A. Davidson. John B. Rogers - D.A. Davidson & Co., Research Division: Most of my questions were answered. Bob, just going back to a couple of your comments relative to your discussions with clients, are they -- is there a general expectation that energy prices will stabilize at current levels? Are they assuming some sort of a recovery? And I'm thinking about just as it relates to your comments on maybe some improvement in the second half of the year.

I mean, if we had the answer to that, that'd be great. Our clients, I think, each one you talk to probably has a different level of either optimism or pessimism with regards to where they see the current trend, whether it's going to stabilize, where it's going to continue to decrease. It -- each of these clients are probably making their forecast based on what they believe is going to be best in their business when they're dealing with us or dealing with their clients. So it's really hard to try and figure out, out of all this, what really is the consensus and really where it could happen. It's -- a company like Synovis had done 3 budgets in the last month. So I don't think they know any more than we do. I think everybody is trying to figure out where things are going to go. And we said earlier in the call, hope isn't a strategy. But I think the strategy is to hope for the best that they will stabilize and will come back. That could be just as right as it is wrong. So at this point in time, our clients are across the board with regards to their vision of what's going to happen. I wish we had a better answer, but all we can do is keep talking to our clients. John B. Rogers - D.A. Davidson & Co., Research Division: What the -- but what is it that is leading them to suggest that they will in ramp up planning or capital -- or planning for capital spending in the second half?

I think what they're looking for more than anything else is some stability. So what they would like to see is things just stop moving. And if it stopped going down -- they're not looking for a recovery to advance. They just want to see that things are stabilizing, and this latest drop is now creating a new plateau and this is going to be the new world. So once they get a comfort that, that's the case, then they're going to advance. So as I said, in the midstream business, they're less directly connected to the oil price. Their clients are. So those clients are then determining what contracts they will sign with the pipeline companies. So a lot of this is really our clients' client, where they believe it's going to be. But that's what our clients tell us, is they're looking for some signs of stability, not really recovery and stability, so they can then do their recalculations on their projects and proceed. A lot of them still have projects that they feel they need to go ahead with almost regardless of what the oil price is. John B. Rogers - D.A. Davidson & Co., Research Division: Okay. And then secondly, I mean, you've got your hands full in the first half, I know, with some of the integration. But given the disruptions in the market, and I'm thinking more down here in the U.S., into Texas and with some of the mergers, are there more resumes and organic expansion opportunity -- resumes on the street, organic expansion opportunities for you, especially...

Absolutely. We have seen definitely with some of the bigger transactions that were occurring in the past 12 months and those companies going through their rationalization of cost-saving measures, which a lot of those transactions were based on cost savings rather than cost synergies. We are seeing resumes on the street. We are seeing people that are concerned and worried about where their future is. And so that's given us a great opportunity. It is probably -- at this point, it has probably been one of the busiest times, from a point of view of good quality, long-term individuals out there looking for work or looking for opportunities, let's put it that way. John B. Rogers - D.A. Davidson & Co., Research Division: Okay. And I guess lastly, does that change your capital spending plans or capital investment plans?

No. That will be just augmented by that, it wouldn't change it.

Your next question will come from Chris Murray with AltaCorp.

Just looking at Dessau, just to kind of confirm a couple of things. One, the last time we sort of talked about it during the acquisition call, you felt at least that net revenues will probably look around $130 million. But you -- kind of wanted to review it after your budgeting process, are you still comfortable with that number for '15, or should we be thinking about something different?

I don't have a different number yet, Chris. As we just indicated, we're just getting them integrated now. I think by the end of Q1, we will have a much better idea of where that budget is. There's nothing today that would suggest that it's materially different from what we were anticipating before, but I don't have a specific number today.

Okay, that's great. And then just in your earlier remarks, you talked a little bit about the fact that you'll be drawing down some cash in the quarter. I guess, part of that will be for Dessau. But you also mentioned there were some bonuses or stuff like that. I guess a couple of quick questions. One, do you have an idea what that -- the magnitude of the drawdown is going to look like? And then second, just to confirm, I'm assuming a lot of these bonuses have already been accrued back into 2014. It's just going to be actual payments that will be going to the employees?

Absolutely. All of those merit and taxes all have been accrued. Those are normal course operations. With respect to the drawdown, I think we will increase our credit -- use of our credit facility in Q1 more than we have in the past. So I think our debt to EBITDA ratio will come up a little bit. So any of the surplus cash that we have at the end of the year will be used up.

Okay. Any rough idea what the magnitude is going to look like?

I don't have a specific number, again, on that. Certainly you'll get that at Q1.

Sure. And then, just a final question from me. Just looking at the relationship between net revenues and gross revenues. Again, in Q4, seems like subcontracted and other direct expenses were a little higher than what they've historically been. Any particular thought, as we go into '15, on what the backlog has got in it and if that trend is sort of going to hold similar to what we saw in Q3, Q4?

The gross to net revenue has been running in 18% to 22% range and probably closer to 20% to 22% range over the last several years. I don't see any material change in the work backlog that would suggest that, that's going to materially change as well, Chris.

Okay. So you think it'll be fairly stable through '15?

I think it will be fairly -- yes.

We have no further questions at this time. I'll turn the call back over to Mr. Gomes for any closing comments.

Since there are no more questions, I'd like to close our call by saying, we're confident in our ability to achieve our objectives and continue to deliver consistent value to our shareholders. Our diversity plan, I think, is certainly one of the things we've relied upon to be a successful firm to-date, and it's definitely something that we're relying upon this year. Look forward to speaking to you again in the future. Bye.

Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation. You may now disconnect your lines, and have a great day.