Jacobs Engineering 4Q16 Earnings Call Notes

Jacobs Engineering Group (JEC) Steve Demetriou on Q4 2016 Results

Expect challenging conditions to continue in FY 2017

“We expect challenging market conditions to continue into fiscal year 2017. Weak growth in developed markets, geopolitical issues and uncertain commodity prices will continue to impact some of our end-markets. Much like the beginning of last year, our oil and gas mining and certain industrial clients are continuing to avoid large capital expenditures to conserve cash. We do believe most of the declines in these end markets are now behind us, but it remains to be seen when industry growth will return in these sectors. More positively, we saw select growth opportunities in our buildings and infrastructure, aerospace and technology and life sciences markets in fiscal year 2016 and we expect further growth in these end markets in 2017. As we progressed through our fiscal year 2016, we saw a backlog stabilize and then increase by the fourth quarter. And we expect further increases to our backlog as we progress through fiscal year 2017.”

We were positive on transportation regardless of the election outcome, but pleased to see positive hype around Trump expectations

“So we were bullish on our capabilities to grow in transportation regardless of the election outcome. And so, we’re pleased to see a lot of positive hype around what’s going on with the Trump expectations, but we were positive moving forward in transportation.”

Of course we hope that all the stuff we read about happens

“As far as the post-election situation, again I feel like I’ve commented on that Jamie that with everything we were doing to position ourselves for growth, we attributed the momentum to that activity and less around the early stages of post-election. Are we optimistic? Yes. Do we hope all the stuff we read about happens? Of course. And we’ve seen what the Australian elections have done. And we hope that same thing happens in the U.S. And in fact Theresa May’s administration in the UK is reaffirming several of the important nuclear and other projects in that region that are important to us. And so we feel good about what’s going on globally around the political side of positioning our business.”

Miscellaneous Earnings Call Notes 5.5.16

Colgate-Palmolive (CL) Ian M. Cook on Q1 2016 Results

Sentiment not all doom and gloom in China

“I have to say, having just returned from Latin America and India and China, the consumer that you see on the ground, the behavior that you see on the ground, is really quite vibrant in India; and in China, is not doom and gloom, some concerns, but not the headlines that we read every day. Conversely, in Russia and Brazil, the consumer sentiment, as we have said before, is more negative.”

Flextronics’s (FLEX) CEO Mike McNamara on Q4 2016 Results

The environment is very slow, very weak but somewhat stable

” As far as the macro, we’ve been mentioning that the macro’s been soft, particularly that we see it in the industrials, for quite some period of time. We’ve probably been talking about it for at least three quarters. We continue to see the same kind of softness. We consider it to be a reasonably weak market and we don’t see the market getting stronger, but we see it somewhat stable. We don’t see a significant downside. We just see it very slow and very weak. ”

Cummins (CMI) N. Thomas Linebarger on Q1 2016

We do not see obvious signs of a turnaround in the high power segment

“The truth is we don’t know if there’s more downside to come. We do not see obvious signs of turnaround today.”

China is a market where some things are improving

“it’s partially because we have just seen China promise better and beat the market, not be that strong the rest of the year, a couple of years in a row, so we want to be prudent and watch and see a couple of quarters before we really call an upside and also just fundamentals don’t look that much different. So, I think that’s the place where maybe if things are improving, as some people suggest, we could have some upside in JV income there. ”

Etsy’s (ETSY) CEO Chad Dickerson on Q1 2016 Results

GMS vs Revenue

“Let’s start with GMS. During the first quarter of 2016, the Etsy marketplace generated $629.9 million in GMS, up more than 18%. Growth in GMS is driven by growth in active sellers and active buyers…Turning to revenue, during the first quarter, total revenue was $81.8 million, up 40%, driven by growth in seller services revenue and, to a lesser extent, growth in marketplace revenue.”

Match Group’s (MTCH) CEO Greg Blatt on Q1 2016 Results

Tinder MAU continues to grow, but slower in North America

“In terms of Tinder MAU, it continues to grow well. Again, as I’ve said, it’s slower growth in North America than in the rest of the world, which is natural just given the rollout. Volume of new signups continues to be very strong, and we’re showing improvement in reactivations and retention, and those things collectively drive the MAU growth, but it continues to be solid”

Ares Capital’s (ARCC) CEO Kipp deVeer on Q1 2016 Results

We believe this recovery is largely technical

“We are happy to see the fear in the market that was so prevalent in the fourth quarter and the early first quarter subsiding a bit, which eases concerns that we are headed for more significant market correction in the near term. With that being said we believe this recovery is largely technical and without a meaningful change in fundamentals, our attitude and our approach is generally unchanged. We remain cautious but confident that we can find select transactions with strong relative value attributes, amidst the broad opportunities set that our team is able to access.”

Seeing dramatic declines in banks involvement in leverage finance

“the fourth quarter and in even the first quarter you seeing a really dramatic declines in the bank’s involvement in the leverage finance markets in particular, in mid-market. So there is just less and less activity there. I’d say there has also been lack of any apatite on the behalf of investors for dividend or recapitalization deals so it’s really been a focus for 6 months on new money deals and the issue around new money deals is, I think an equity issue on the LBO [ph] side, multiples have gotten very high for private equity firms and as they look around it, the B quality and below companies, you really want to pay less and/or see more growth, and they haven’t had the ability to pay less and/or see more growth.”

Alibaba Group Holding (BABA) Daniel Yong Zhang on Q4 2016 Results

Chung Tsai – Executive Vice Chairman

Chinese consumers will propel China’s shift to a consumption driven economy

“Chinese consumers have a healthy balance sheet and ability to spend. This will propel China’s shift from an export and investment-led economy to a consumption-driven economy. Alibaba rides the secular tide as we enable more products and services, whether they are domestic or import, to reach the consumer.”

Jacobs Engineering Group (JEC) Steven J. Demetriou

Mining companies are facing most challenging commodity recession of our generation

“Our mining clients are facing one of the most challenging commodity recessions of our generation. And similar to the oil and gas situation, it’s all about preserving capital, reducing spending, and deferring projects for as long as possible. We believe we’ve hit a bottom in mining and that stabilized the business, especially in Asia and the Americas, with a successful focus on sustaining capital programs.”

Jacobs Engineering 3Q15 Earnings Call Notes

Steven Demetriou – President and Chief Executive Officer


“I want to welcome all of you to our 2015 fiscal year end and fourth quarter earnings call, my first since joining Jacobs.”

It’s clear that there are a lot of ways to improve Jacobs

“What has also been exciting to learn during my initial months of engaging with employees and customers are the numerous opportunities to improve and grow Jacobs. First it’s clear the company impressively grew over the past several decades as a result of numerous organic and inorganic initiatives.”

Continue to see adverse market conditions in multiple sectors

“We continue to see adverse market conditions in multiple sectors, particularly in oil and mining commodity markets and these were major contributors to the year-over-year decline in both the fourth quarter and total fiscal year. We also faced competitive pricing pressures and cyclical economic patterns in certain key markets which negatively impacted our revenue mix and unit margins.”

Believe we are near the bottom in energy capex

“we do believe we are near the bottom and demand will stabilize in this new fiscal year.”

Chemicals sector is strongest for us

“The strongest part of our process segment is in the chemicals sector. We are in the mix for several interesting growth prospects across the globe. In fact we were just informed of a major win with one of the largest petrochemical companies which we will provide further information about later in the first quarter.”

Strong growth in Pharma bio space

“In the pharma-bio space we’re clearly experiencing a strong growth and our backlog has significant increased from a year ago. Increased M&A consolidations are occurring driving select opportunities for Jacobs to help clients with portfolio consolidation and optimization.”

Pulp and paper companies expanding offshore

“Several of our pulp and paper clients are expanding offshore and we’re leveraging our strong domestic position to follow these customers in their overseas expansions. We’re increasing focus on consumer products globally.”

Government business is picking up momentum

“Our national government business is picking up momentum and is positively positioned in 2016. While challenges exist with reductions in government spending and delayed award cycles, we’re continuing to gain market shares to offset these dynamics and believe that the recent federal budget deal provides stability over the next few years.”

We do think our industrial clients have hit or are close to bottom

“when we report altogether for fiscal year 2016 we believe we will continue to face a very challenging global environment with uncertainty and limited visibility in several of our markets. It is clear that in petroleum and mining and general industrial commodity markets our clients are waiting to decide when and how to spend their cash.

We do believe that the clients in some of these end markets have either hit or are close to bottom. On the flip side, we believe that our buildings, infrastructure, pharma and federal work will provide growth opportunities in 2016, thus balancing and demonstrating the strength of our diversity which provides the ability to deliver stable earnings in uneven market conditions.”

There’s still integration work that can be done on acquisitions that were done years ago

“The company was very focused on aggressive growth. Frankly, as we all, the leadership team looked back at the acquisitions we feel like they were excellent strategic acquisitions, and but we could probably have done better on the integration side and driving the full benefits of cost synergies. ”

When we say we’re close to a bottom it’s mostly because we’re focused on refining and chemicals

“That’s a good question and my comments on hitting the bottom and stabilizing is more from a Jacobs position in that industry and what gives me confidence that we are near bottom of and should see stable profile and in fact may be some momentum by the second half is that most of our activity is focused on refining and chemicals.”

Kevin Berryman – EVP and Chief Financial Officer

Constant currency revenue growth despite economic headwinds

“While we continue to see macroeconomic headwinds and continued commodity weakness that has impacted certain of our end markets this quarter, it is important to note that on a constant currency basis our revenues actually grew at a rate of 2%. ”

Gary Mandel – President, Petroleum & Chemicals

Andy Kremer – President, Industrial

Robust nuclear new build programs in the UK

“The nuclear new build programs particularly in the UK are robust. We are heavily involved in all of the major programs that are taking place there primarily in the civil structural side of this, but certainly in the planning and the support areas those projects and we’ve been involved in those for the past year and a half or so.”

Phil Stassi – President, Buildings & Infrastructure

Jacobs Engineering FY 4Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Significant awards in building buildings

“Moving on now to buildings, our buildings list is growing globally, we’ve seen significant awards, we have had some since the quarter closed we had some major awards in the Middle East in the buildings and infrastructure space. Healthcare is another area where we see continuing growth and tremendous opportunity in lots of places in the world people are getting older and that’s going to drive a continuing expansion of spend.’

Oil sands market is very tough for us right now

“we’re seeing real weakness in the oil sands just because of where oil prices are. The oil sands market is apart, it’s a very difficult market for us right now.”

The chemicals industry isn’t as optimistic as the market maybe thinks it should be

“moving on to the chemicals business, lots of FEED and pre-FEED activity out there. It’s all unconventional gas driven FEED gas is the word of the day. We’ve got a great chemicals resume and an ability to deliver globally I think that’s a strength. But, everybody remains very measured in releasing these projects. And frankly, I think that’s going to continue for a while I don’t believe the industry is as optimistic about the prospect for chemicals as perhaps the general market thinks it should be, so we’re going to see very slow and steady releases of project. I think the work is coming, but it’s not coming fast.”

Still plenty of opportunity in wet gas

“I think the unconventional gas is a two-story marketplace. If you have dry gas, it’s not a very attractive business right now. Cost of production is probably higher than the value of the gas once it’s produced. If you have wet gas, so if you’ve got a lot of liquids in your gas, it’s still extremely attractive. And so what we’re seeing is a concentration of investment in those areas that have the good combination of both gas and liquids. The good news about all that is, there’s still lots of that and so it continues even in these lower oil price markets to be a very attractive investment for our customers and we continue to see lots of activity there.”

A lot of projects that are planned are not at the executed phase yet

“We’ve got probably as much FEED business in the company right now in the process industries as we’ve ever had. But at this point it continues to just be FEED work. And the leverage, particularly the leverage for field services is in the execute phase. So probably the top of my list in terms of what will drive that expansion in field services is getting these projects released through the final investment decision into execute. We’ve got a number of customers who are talking about those kinds of things happening in the next two or three months, but frankly I’ve heard that story before.”

I don’t think we’re at an end of the cycle kind of level right now

“I don’t think it’s an end-of-cycle conversation. So I don’t believe that we’re at that stage where everybody says okay, we’re at the end of the cycle and now we’re going to have a prolonged downturn. Generally, when our businesses are booming the cycles already over. And we’re not anywhere near that blooming stage yet. So I think what we may have is more like that a stagflation kind of growth. And I don’t mean that in the economic terms of that, I mean in the sense that growth is going to be slower than a normal up-cycle, but we’re going to continue to see an up-cycle. And that’s kind of where as best I can see it right now things are likely to go.”

Jacobs Engineering 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

The market is still very price sensitive

“The market continues to be very price sensitive. We are not finding any areas in the market where the conditions are such that we can get significant improvements in price, and we are finding areas where price pressures are still pretty high.”

Buildings business is coming back

“On the building side, our buildings business is getting steadily better. As you know, we repositioned the business to deal with the downturn in the federal contract environment. It looks like federal business will be coming back. We’re seeing it come off a pretty significant weakness with some strength. We’re seeing high-tech is a particularly strong aspect of the business, both mission-critical and data-related activities”

Pharmbio industry has gone from blah to boom

“The product pipeline is picking up. In fact, I would characterize this industry has gone from somewhat blah to somewhat boom.”

Oil and gas still a very strong market globally

“Moving on now to oil and gas, still a very strong market globally, still a lot of investment in North America. CapEx is at historic highs. We see a lot of opportunity in the midstream and pipeline services areas.”

capable of doing $1 B projects

“these $1 billion jobs that I’ve talked about remain things that Jacobs is capable of doing and we continue to win some of those projects and lose some, just as you would expect.”

Don’t have double digit market share at any of the big spenders right now, but winning repeat business

“Our business is built around working for the big spenders in all the industries that we serve. And in no case do we have a share of wallet of any of those big spenders that even approaches double digits. So there’s huge opportunity for us to grow on the back of repeat business, and the high-repeat business is an indication that we’re putting our energies and focus where we should, which is with those clients that have big capital budgets where we can grow share and build relationships.”

Work can fall out of the backlog, but that’s unlikely to happen right now

“Certainly, for example, construction-related backlog is more vulnerable to cancellations than service-related backlog, has a longer tail and it’s the bigger part of the costs that the customer might incur. So those risks are out there. But I don’t see any evidence that those risks are things that are likely to materialize.”

Customers more hesitant on timing than doing the work

“When we talk to customers about their projects and programs, it’s not about not doing the work, it’s more about timing of doing the work in terms of when is it going to happen.”

Customers still perceive the environment as weak, so they’re trying to get favorable terms

“our main customers are perceiving the market as being weak, that’s certainly an expression of the pricing discussion that we had earlier, and they’re trying to take advantage of that by imposing more challenging contract terms.”

It’s really difficult to say when we’ll get backlog growth acceleration

“As I sit here and look at where we are with our customers and what they’re telling us about the drivers for them to make investment decisions, I’m not seeing a significant certainty time-wise about when they’re going to make those decisions. So in terms of real backlog acceleration, I just — I’m very frustrated, but I can’t predict when that’s likely to happen.”

Maybe this isn’t such a boom like construction environment

“I certainly don’t see any evidence that the cycle is over. I do see an abundance of caution from our customers about the cycle and where they are in it and what the likely outcomes are for their projects. And I think that’s actually turning this in from sort of what I think we all believed a couple years ago was going to be boom-like into a much more protracted, less boom-like environment.”

The CEOs I talk to don’t feel the economy is good as the pop press says

‘When I talked to some of the executives at the tops of the organizations we work for, the general belief about the strength of the economy is not as good as what the popular press would have you believe. And I think that’s also affecting that sort of on-the-border decision, should we go ahead and commit or not, let’s wait a little while”

Spending has become more choppy in telecom

“There’s no question in my mind that the spending has become a bit more choppy in the telecom business.”

Engineering has become increasingly fungible globally

“Pricing pressure is probably strongest in the heavy-process industries and in mining and minerals. Mining and minerals driven obviously by the shortage of work, and the heavy-process industry being driven largely because most of the work today is engineering-related, and engineering has become increasingly fungible globally”

The competition is coming from big E&C players

” the more low-cost EPC-lump-sum-oriented organizations. We generally don’t compete with those companies and so I can’t really speak to pricing there…We see the big U.S. and European players, so the CB&Is, the Foster Wheelers, the AmEx, the Atkins, as well KBR, URS, AECOM, Fluor, Bechtel, those folks from the States. And there’s the place where I’m describing what I see as the cost pressure.”

Jacobs Engineering 1Q14 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

Market is still price sensitive, cost remains an issue

“The market remains price-sensitive. We still are not seeing that point in the marketplace where price is not an issue and where we’re starting to see margin expansion other than in a most minor way. So it’s really important that we drive down our costs.”

Lots of opportunity in infrastructure

“Moving on now to infrastructure. We’ve described that market as strong, it certainly is. You can see that our comment on our road, rail. Airport opportunities are abundant, and particularly the U.S. and U.K. markets, they’re very strong right now.”

Leader in technology integrated buildings

“The fact that we are in a tech building differentiator for us is a positive across almost all the markets, and we think about things like the data centers, mission-critical facilities, that’s a tremendous strength for Jacobs, probably the leader in the industry there.”

M&A in pharma space leads to opportunities for Jacobs

“Some of the mergers and acquisitions activity in the pharma industry looks like it’s going to be a very strong plus for us. So we see there some significant opportunities that are going to be created by some of these recent merger acquisitions that should leverage up into a number of projects for Jacobs in the pharma space.”

Seeing good opportunities in LNG

“everybody knows about gas monetization, there’s a lot of activity there. The good news there is that there’s some increasing opportunity for us.”

Lot of chemicals plants being built

“chemicals, it’s very strong. If you think back, at one time, this was 12% or 13% of revenues, today, it’s 22%. The U.S. expansion in chemicals is enormous and a lot of that’s driven obviously by the low-cost gas that’s coming off the mission on conventional gas exploration development. But the good news about that is in addition to ethylene, which is the big driver, there’s a significant amount of derivatives business and that’s an area that plays very strongly to Jacobs’ capability. And we continue to believe we’re going to be able to be successfully in executing a number of sizable derivatives projects based on this ethylene expansion.”

Analyst comment: Exceptional at integrating acquisitions

“Jacobs is clearly exceptional at integrating”

Pricing better than 08 but still not great

“We are seeing the clients try to push more risk on to their suppliers. So that’s a battle we’re fighting constantly. So far, it’s a battle we’re winning but it is a battle we have to fight every time we look at one of these projects. And that’s partly an indication that the market is just not yet truly as strong as any of us would like it to be. So if margins are running faintly better quarter-by-quarter, but what I mean very faintly, we’re talking about 0.1 basis point or less kind of growth in the quarter. Thought it’s — excuse me, it’s not a robust market yet by any means. It’s not dirt cheap like it was after the bust in 2008, but it’s pretty skinny.”

Some typical project sizes in telecom

“these projects, the programs individually run from $50 million to $200 million in terms of capital cost. So just to use a hypothetical number, let’s say, that 20 projects have been awarded and we won 12, which is about the right ratio. They’ll range in size from, I say, $50 million to $200 million, maybe in a few cases, $300 million. So probably you’re looking on an average there of — well, let’s use an average of $100 million just to keep it simple. So that’s a $1 billion worth of work.”

$1 B+ projects 57% win rate too high of an assumption, but pretty significant

“The large project gestation continues to be a positive. I looked at a list yesterday in our sales review that must have had 25 projects on it. And these were all the sort of the big ones. And our win ratios continue to be good in that regard. So I’m certainly very positive about where we are. I don’t know that we’ll win 57% of the big projects. I think that would be unrealistic for us. But I do think our win ratios will be pretty significant and more than adequate to fuel the growth that we’re talking about.’

Mining activity improving primarily for copper

“South America and Asia, not Australia. And although there’s one fairly big program in Australia, I think we’re going to see. And then it’s almost all copper.”

Mining projects start to hit in 2015

” think the big impact is all 2015 and beyond because it will — there’s speed and study work that will be pretty substantial first.”

Lot of infrastructure development needed

“I saw a study from I think it McKenzie just the other day, and their argument is there’s a $57 trillion investment in infrastructure globally that has to be made between now and 2035, I think that was the date. I mean $57 trillion, that’s a really big number. So I remain very positive about our infrastructure business, and I’m seeing us start to get growing share of that market.”

Jacobs Engineering 4Q13 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

National government spending

“Starting with the national government’s business. It is clearly improving. Now that we have a budget that provides some funding certainty, that positions us very well. And the good news is that the money is going where we provide a lot of services.”

Hot areas of infrastructure spending:

“A lot of water projects out there, a lot of activity in Asia Pacific, and we see something on the order of $70 billion worth of infrastructure-related projects in the Middle East…tremendous opportunity in telecommunications and gas distribution business…in the Buildings business, there are just a lot of good activity particularly in the technically complex buildings that we favor. So things like scientific facilities, laboratories, healthcare, all very strong. And then of course the high-tech market, data centers, control and operation centers and the like remains very strong.”

Minerals and mining sector picking back up

“Mining and minerals is growing. It’s growing for us and the good news is, we think the industry is seeing the market come back a little bit. Commodity prices are firming. People’s expectations about where commodities would go, particularly iron ore and gold, haven’t come through. The copper supply situation remains a concern, and so we’re starting to see people contemplating real projects again.”

M&A is a long sales cycle

“there are a number of nice sized, privately held firms who have good positions in the power industry and whose positions are very consistent with our relationship-based business model. And to your point, they are — the ownership, the leadership is aging and that does usually create — seeming [ph] opportunities for us. But remember that these acquisitions are always opportunistic, we have to have a willing seller, as well as a willing buyer. So we continue to stop by and visit those folks and make sure they know we’re interested and that we would love to have them be a part of the future. And sooner or later, one of them will say yes but it’s just impossible to predict when that might happen.”

Consolidation needed in E&C industry

” have believed for some time and I continue to believe that our industry needs to consolidate and it will continue to do so and I think we will see both small consolidations, a lot of the things Jacobs traditionally has done, midsized consolidations like the SKM deal for us and then I think there’s still a potential for some fairly significant — not sure of public companies but public company scale businesses to be acquired as well. “

Jacobs Engineering 3Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings.

“I would characterize today’s marketplace as compared to 4 or 5 years ago, what you’re referring to, the 1 big project, I think, you’re thinking of, those aren’t necessarily out there. But there’s a large volume of projects that are sort of just a little bit below that, maybe half that size in size. A large number as opposed to before where there were a few of those really big ones, but only a few. So I’ve certainly — personally, where I sit, relative to the chemical business, as Craig said, in the U.S., in the Middle East and even to a degree, in Asia, the prospects are pretty broad and pretty rich and good sized. And I do think that we’ll have an opportunity to capitalize from a construction perspective on a large percentage of them, or at least our share.”

“I don’t think that the 15% growth number is going to be driven by cost-cutting. We’re just not going to save ourselves into the 15% growth.”

“we’re seeing pricing pressure in the public sector markets, part of it anyway, but mostly the federal government arena, that we have not traditionally seen. So that business is more challenging. It isn’t affecting our ability to win work. I think you can see that from the backlog numbers, but the margin that’s in that work is certainly not as strong as it might have been a few years ago. On the opposite hand, things like the private sector businesses, the heavy process market, we are seeing improvements in margins but not significant ones. It’s still more — because a lot of the stuff keep moving to the right, it’s still a more competitive marketplace than I would have told you a year ago I thought it would be at this time.”

“it’s not like the government is creating new kinds of work for us to do. So almost everything in the federal government arena is about market share. And moreover, when you look at the sort of overall contraction of the federal marketplace, coupled with the shift toward more small business awards and fewer large business awards, the pool of opportunity that we’re looking at as a company is clearly smaller year-over-year and probably has been getting smaller now for several years.”

“n the LNG world, as Craig said, there’s a couple of opportunities. There is certainly the infrastructure and overall development of gasfields, collection, distribution fields associated with LNG in general. The installed capital base of the LNG facilities that you can look at in Western Australia and are coming online in eastern Australia, plus other parts of the U.S., represent not immediate but, certainly, in the not-too-distant future, a large opportunity for us to try and capitalize in a continuous presence and support of those capital investments as they come online and go into the future.”

“our infrastructure business is definitely continuing to improve…What is driving is, quite frankly, there’s a lot of states, a lot of municipalities that are starting to re-spend — starting to spend, not re-spend — starting to spend to improve their facilities and do highways and do bridges and do transit systems that they haven’t been able to spend for quite some time in some large metropolitan areas around the south, southwest part of the United States. And so there’s a big — so that’s actually good news in a sense that, that stable, ongoing work at the state level that’s starting to occur pretty — not broadly around the entire United States, but certainly, in some very significant areas, in addition to a few of the large iconic projects. So we’re not looking necessarily to have to win big projects for 2014 to have our success. We’re really looking sort of a baseload business. The larger projects will be a little bit more icing on the cake, I would say.”

“our view of the market is that it’s another area where there are long-term demands for investment that are being under-met at this point in time and that, that investment will drive a good business. And I’m looking at this now in the 5-, 10-, 15-year kind of horizon, not the next quarter or next year kind of horizon. So we think the power business is a business that Jacobs should be in, and I don’t mean by that lump-sum turnkey gas-fired cogen. That’s not what I’m talking about at all. But I think there is a good business out there for a company like Jacobs with our business model, and what we — but we’re really going to have to make an acquisition to make it happen. We’re not going to be able to bootstrap that business. And so that’s why I made a point of mentioning the power business as an area of acquisition so you’d know where our thinking is, but also so people who are in that business listening on this call will know we’re interested.”

“There are some additional, again, sort of second tier — I don’t know, I hate to use that word, but different clients than you might normally think about that are looking at investments as well in the oil sands business in addition to the traditional big energy companies, which, again, adds to my confidence that the overall viability of the oil sands business over the medium and long term is very strong. That’s a business that those clients out there have to develop. It’s an important part of the economy, and they’ll find a way to get the oil out of the country. And one way or the other; it will take longer than maybe some other ways, but they’re all continuing to study and invest at a nice moderate pace, I would say, versus a hectic pace, which, I think, is, quite frankly, healthy in the long run.”

“when you see nontypical investors, it’s usually a good indication of an ongoing, solid capital base. And when the nontypical investors start to run away, things tend to turn down.”

“I would have to say that most of our clients are looking at their investment as long term, and short-term interest rates aren’t a big factor in their decision to invest. That might be true of smaller players. But when you look at big oil, big mining and minerals, big chemicals, big pharma, any of the major customers in this regard, I don’t think they are deceived by short-term interest rates as a key criteria for their investment decisions. So I don’t expect a nominal or reasonable rise in interest rates to have a materially negative impact on new investment.”