Jacobs Solutions Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Jacobs Fiscal First Quarter 2020 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please allow yourself one question and one follow-up. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Jonathan Dorris. Thank you. Please go ahead.

Good morning and afternoon to all. Our earnings announcement was filed this morning. We have posted a copy of this slide presentation to our website, which will be referenced in our prepared remarks. I would like to refer you to our forward-looking statement disclaimer, which is summarized on slide three. Certain statements contained in this presentation constitute forward-looking statements. As such, term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Statements made in this presentation that are not based on historical facts are forward-looking statements. Although such statements are based on management's 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. We caution the reader that there are a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from what is contained, projected, or implied by our forward-looking statements. For a description of these and other risks, uncertainties, and other factors that may occur that could cause actual results to differ from our forward-looking statement, see our annual report on Form 10-K for the year ended September 27, 2019, and our quarterly report on Form 10-Q for the quarter ended December 27, 2019, which was filed this morning. We are not under any duty to update any of the forward-looking statements after the date of this presentation to conform to actual results, except as required by applicable law. During the presentation, we'll be referring to certain non-GAAP financial measures. Please refer to slide two of the presentation for more information on these figures. In addition, during the presentation, we'll discuss comparisons of current results to prior periods on a pro forma basis. See slide two for more information on the calculation of these pro forma metrics. We have provided historical pro forma results in the appendix of the investor presentation. We believe this information helps provide additional insight into the underlying trends of our business when comparing current period performance against prior periods. Turning to the agenda. Speaking on today's call will be Jacobs Chair and CEO, Steve DiMicchio, President and Chief Operating Officer, Bob Bregada, and President and Chief Financial Officer, Kevin Berryman. Steve will begin by providing a recap of our financial results and discuss key elements of our strategy. Bob will then review our performance by line of business, and Kevin will provide some in-depth discussion of our financial metrics, followed by an update on our acquisition and ECR divestiture, as well as review our balance sheet and cash flows. Finally, Steve will provide an updated outlook along with some closing remarks, and then we'll open the call up for your questions. With that, I'll now pass it over to Steve Dimitriou, Chair and CEO.

Thanks, John. Turning to slide four, thank you for joining us today to discuss our first quarter 2020 financial results and the progress we're making executing against our strategy. I continue to reinforce to our key stakeholders that we're on a journey to create a company like no other. Since 2015, we have been transforming our business to a technology-focused solutions company that leverages our global scale, deep technical expertise, and now an enhanced brand. At the same time, we've revolutionized our company culture to align our people around one purpose, which is to challenge the accepted and reinvent our thinking to deliver innovative solutions to our customers. The growth opportunities within our core markets are more attractive today than any time in the company's history. We're benefiting from multiple multi-decade growth trends in the areas of water infrastructure, environmental resiliency, urbanization, space exploration, national security, and 5G. These are all sectors where we have a distinct competitive advantage. Furthermore, I believe the changes we have made to our culture in the areas of diversity of thought and creating an inclusive environment are in the early phases of being a competitive advantage for Jacobs. From a financial standpoint, we posted a strong start to fiscal 2020. Our backlog grew 6% year-over-year on a pro forma basis. First quarter adjusted EBITDA, pro forma for the PWA acquisition, was up 25%, and adjusted EPS when excluding the impact of a $0.06 per share discrete tax charge grew 35%. First quarter free cash flow is in line with our expectations. And we expect strong free cash flow generation for the remainder of fiscal 2020 and beyond as we approach the end of our restructuring efforts related to the strategic actions to transform our business. Discipline around optimizing working capital is a significant focus of our team. From a flexibility standpoint, we maintain a healthy balance sheet that provides the optionality on how we further deploy capital toward high return investments. We're announcing today an increase to our share repurchase authorization by an additional $1 billion, which is incremental to the remaining $400 million under our prior buyback authorization. Moving to slide five. As we continue to transform our business, sustainability is a key ingredient in our ambition to become a company like no other. And in alliance squarely with our value of we do things right, Plan Beyond, our Jacob sustainability strategy that is aligned to the United Nations Sustainable Development Goals, which was launched a year ago and provides us a great platform to explore the possibilities of reinventing tomorrow, whether it's through how we operate and how we serve our clients or at home with our families or in the communities where we live and serve. Over the last 12 months, we've demonstrated significant progress on that strategy. I want to highlight a couple of actions here. We signed the UN's Global Compact, which commits us to a principle-based approach to doing business in the areas of human rights, labor, environment, and anti-corruption, all things that are already part of Jacobs' DNA and value system. We also published our first integrated annual report, reflecting the integral nature of our financials and our sustainability focus, and our commitment to robustness and transparency of non-financial data. We're developing a Jacobs Climate Action Plan, which includes a commitment to achieving a net zero carbon with a focus on reducing the emissions associated with our business travel and from the facilities we own or operate. As part of our walking the talk is increasing our engagement and thought leadership, ranging from hosting a global sustainability calls with other leaders from government and industry to participating in this year's World Economic Forum's annual meeting at Davos, where I became co-chair of the Infrastructure and Urban Development Committee, focusing on how the adoption of technology and digital investment in the infrastructure sector can improve productivity and help achieve net zero carbon emissions to tackle the global climate emergency. And our teams are providing sustainable solutions for our clients around the globe, with projects like Sublink, wind and solar power transmission system in Germany, various high-speed rail projects that help decarbonize transport systems. And on the waterfront in places like Miami Beach, we are leading the rising above climate change resiliency program to combat the impact of catastrophic flooding on infrastructure and business. We're also leveraging our proprietary technology like our flood cloud service for on-demand scenario modeling across all infrastructure types. Climate change is one of the most significant challenges our world is experiencing. And we at Jacobs are making a commitment to work towards solutions through our everyday actions as individuals, as well as with our clients and communities. Now I'll turn the call over to our President and Chief Operating Officer, Bob Pergata, to discuss the performance of our two lines of business.