Q3 2020 Fluor Corp Earnings Call

Before I turn the back on line.

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Good morning, and welcome to the floor Corp. Three Q 2020 earnings Conference call. Today's conference is being recorded at the time all participants are in a listen only mode of of course or any of the especially will fall in the actually the presentation.

A replay of today's conference will be available at approximately 10, 38 am eastern time today, except low on floors by the <unk> and Buster adopt floor dot com the way.

The replay will be available for 30 days a telephone replay will also be available for seven days through a registration link our successful I'm sort of outside the <unk> investor day for Dot com.

At this time for opening remarks, I would like to turn the call over to Jason Lane camera director of Investor Relations. Please go ahead, so income or.

Thank you operator, and welcome to force third quarter 2020 conference call, we'll get to day or Alan ducking towards the executive Chairman part of the churn and it was chief Executive Officer, and Jay bring its worst Chief Financial Officer released.

We released our earnings statement earlier, this morning, and live streaming of slightly indication of the website, which we'll reference while making prepared remarks.

Before getting started I'd like to refer to you to our safe Harbor net regarding forward looking statements, which is summarized on slide one day.

During today's presentation of really making forward looking statements of which reflect our current analysis of existing trends and information.

There is an inherent risk that actual results and experience could differ materially.

Can you find the discussion of our risk factors, which could potentially contribute to such differences in the company's form 10-Q filed earlier today.

During this call the may discuss certain non-GAAP financial measures reconciliations of these amounts to the comparable GAAP measures are reflected in our earnings release of the posted in the Investor Relations section of our website at Investor the floor Dotcom I'll now turn the call over the Carlos for Natus Force Chief Executive Officer Carlos.

Thanks, Jason and good morning, everyone.

It's great to be talking with all of you again and I'm pleased to report that with this morning 10-Q finally the.

There is now current with its financials.

Our team around the World has worked tirelessly over the last several months to get us to this point and.

We are proud of grateful for their diligence and hard work.

And we look forward to speaking with the investment community on the more regular and consistent cadence going forward and we thank you for your patience as we confront the challenges of 2020.

Moving to slide two.

I'd like to start by providing an update on the effects of the pandemic on our operations as.

As well as the Scott and well as we'll discuss in greater detail. Since we last spoke we have been we have seen our projects continue to come back online and the cover from the initial rounds of regulatory Lockdowns encoded Kate.

We are monitoring restrictions from various space in countries with rising cases, and we'll keep you updated on any major impacts to our business that we might see.

Well the 75% of our offices are open and operating at a reduced level of operations with the remaining office is still close.

We can flex the level of personnel at our offices as local restrictions and community spray of of the virus changes.

Only about 7% of our projects are close.

With the rest operating at normal intermediate or limited capacity.

We continue to engage with our clients on how to proceed successfully and safely and the.

Provided notice is asserting our rights under change of law enforcement your provision.

We remain committed to the health and safety of our employees and communities, where we work and we have launched new procedures training and communications packages to help transition our people back to work safely and finished the year strong.

We are proactively ensuring our people have the mental and physical support they need.

Remained resilient and keep our business moving forward.

Despite the impact of prove it we see a number of positive developments across the company.

The majority of our project have continued to safely and successfully progressing the field and the projects. We identified as problem projects last year have been holding two of their revised current forecast and schedule.

There were no significant charges incurred in the third quarter.

Before handing the call over the Joe for a financial update I'd like to provide you a high level of outlook.

Of what's going on in our various business segments and some specific project commentary.

Turning to slide three.

In energy and chemicals.

The segment continues to make progress on executing its backlog of connect endemic constraint environment.

However, we continue the here from a number of our oil and gas plants that they expect to have reduced capital spending plans over the next few years.

We believe that our clients were focused on advantaged hi.

Hi value of project that can generate returns in a weak commodity price environment.

Well, we do see a pipeline of projects, we will only pursue the ones that fit our revised the criteria as we focus on delivering consistent profitability.

On T. C O lean.

The mobilization continues as the cobot situation attendees and western topics on the has improved.

We have successfully increased the project population to over 15000 in Q3 and plant. The we mobilized the project the 20000 by the end of the 2020.

As of today, we are older 19000.

In October the project completed the final of key lift module delivery for the project on plan.

This represents a tremendous accomplishment during the current the endemic and eliminate a free high profile of project risk.

The floor led JV is 98% complete the engineering and construction in <unk>.

Is over 50% complete.

Major construction activities include seven modules on foundations comply.

Completion of metering station and continue the completion of power and control it's gross.

In Kuwait.

<unk> has started pumping the the how's the where refinery ahead of commissioning.

We can line complete this will be one of the world's largest oil refining facility.

Finally, our offshore project work continues and we are still planning to complete the fabrication of pre commissioning work in Twentytwenty one.

Ongoing cobot impact and travel restrictions in China are hampering the progress, but mitigation actions are being taken.

Now moving to slide four.

GAAP and Kitimat progress continues to be made on the LNG see LNG, Canada project. Despite ongoing challenges presented by the government imposed restrictions due to the COVID-19 and Dennis.

Our engineering deliverables are being produced in various global operating centers or the I guess the out and arrest. The you know go.

So the keep pace with our COVID-19, unpack the schedule for the fabrication yard and construction site.

The site activities are progressing while maintaining our COVID-19 recommended and required measures and mitigation.

The site preparation and timing of work per train one is complete.

And train two is well underway.

The module Offloading facility, all roads and bridges required the tranche of the modules the site will be ready in advance of the seeding the first module in 2021.

Hi, al capping concrete foundations placement and pay the has started the train one.

Well, we continue to work on site the priority continues to be safety and well being of our people.

And now with the slide five.

Moving onto our mining and industrial segment, given the ongoing pandemic in the commodity price fluctuations, we have seen a lot of the large mining projects, we were expecting to be awards in 2020 2021 get delayed.

We are well positioned when these projects when our clients are ready to proceed.

Revenue and segment profit was negatively impacted as execution activities with the third on a few large mining project due to the cold at 19.

And Dennis.

I am pleased to say that over the past month, we have started to see these projects the mobilized and expect to see revenues follow suit as they get fully back on line.

In our advanced technology and life Sciences business, we completed the Novo Nordisk project in North Carolina in the third quarter.

New awards for the quarter include a cell based influenza vaccine manufacturing facility in Australia.

Now turning to slide six.

Infrastructure margins reflect execution on a few zero margin projects in our backlog.

However, we are continuing moving these projects forward and should start to see some relief in our margins as these projects wrap up later this year and in 2021 and into the 2021.

This quarter, our infrastructure segment booked the Oak Hill Parkway Highway project in Austin for the.

The Texas Department of transportation.

The project is another example of our focus of the Texas infrastructure market.

And is a testament to the value that ex Dot places on our services.

As we have previously discussed.

In the third quarter, we terminated the contract with the Maryland Department of transportation for the Purple line project.

The project has now been removed from the backlog.

November the Maryland Department of transportation, reaching 250 million.

Dollar agreement in principle with the consortium to settle all of the Contortions outstanding plane.

Although this agreement is subject to approval by the Maryland Board of public works.

It will result.

In Fluor and its joint venture partners, avoiding additional project costs.

Turning to slide seven.

In government third quarter reflects the return to a near normal results from the.

Our normal results driven by solid performance and active management of work levels. Despite the global pandemic compared to the second quarter.

This was achieved across the government group with the largest increases that strategic Petroleum reserve Fort Smith and Savannah River.

In diversified services reduced business volumes as a result of the.

COVID-19 continue to impact the results in the third quarter.

Over the past two months, we have started to see volumes, increasing after locked down of restrictions lifted aside.

Especially in Europe, and Latin America.

In the third quarter, we also divested excellent towards the professional equipment rental business in Europe.

And now moving to our other segment and on slide eight.

This segment includes the fixed price lack of Warren projects that were previously part of the government segment as well as our new scale initiative.

The margin forecast for the rack, but in warrant projects continue to remain relatively flat.

The rest of project nearly complete with the site teams lack of the working off punch list items.

Water trials have been successful in the project has made substantial progress in turning over subsystems for the client.

Oh, the turnover of all systems and the fact, the spike demobilization of expected early next year.

Warren has had an effect of construction campaign through the summer and fall weather window.

Overcoming early design complications and making substantial progress with early structural work.

The projects successfully negotiated an extension of time order with the client mitigating the list of schedule damage.

Good day impact from Cove it.

Have been relatively modest and schedule in Texas have been effectively mitigated.

In August we announced the Nuscale received final design certification by the NRC.

This approval establishes new scale as the preeminent leader in the small modular reactor technology market.

Allow store to respond to the customers looking for unique flexible the and carbon free energy solution.

Instead of approval, we have seen an increase in interest from potential customers cap.

Capital investors manufacturers and supply chain partners to move forward in our development effort.

Who is placed the support the skills effort from creating a carbon free power solution and we look forward to discussing or opportunities from the new future.

Now I'll turn the call over the Joe to provide the financial update.

Joe.

Thanks, Carlos and good morning, everyone I'll start with a financial update on slide nine.

Then the third quarter, we recorded revenue of 3.8 billion down slightly from Q2 and earnings from continuing operations attributable to the floor of 19.1 million or 14 cents per share range.

The results for the quarter includes 30 million of foreign currency transaction losses, 22 million of Nuscale expenses, the 19 million of internal investigation expenses.

In regards to new scale why we previously stated 2020 expenses would be fully funded by the investors investment decision delays due to the pandemic have required floor to provide 15 million of the funding in the third quarter.

Our overall segment profit margin of 3.4 per cent for the quarter as evidence of the work we've done over the last 18 months to stabilize the business. We saw the strong performance across our business lines. This quarter and have not taken any material project execution charges in the first three quarters of 2000.

The 20.

Specifically in energy and chemicals, it's important to note that are higher than normal operating margins for Q3 did not properly represent outperformance in the in the quarter. Although we did see increased project execution activity on our LNG project the effects of co the and normal project adjustments were reflected in Q.

One because of where the labor reporting schedule this year.

Results for the segment also benefitted benefitted from favorable FX. The us looking at the business line from a year to date perspective provides a better picture of our performance in that segment.

[noise] corporate G., a day expenses in the quarter were 68 million most foreign currency strength against the U.S. dollar in the quarter, resulting in the previously mentioned the foreign currency loss of 30 million, which is driving up the corporate DNA expense Gionee also reflects the 19 million of investigation of expenses.

Moving to slide 10, our cash balance at the end of the third quarter was 2.1 billion with 36% of the domestically available for use per operating cash flow for the quarter was 80 million with free cash flow of 58 million.

Moving to capital structure, and we play the we continue to believe that we have ample liquidity to meet the demands of the current projects in the future prospects.

As Carlos mentioned with todays filing we're now current with all financial filings and debt requirements. Furthermore, we continue to have extensive and ongoing communications with our banking community.

And the four giving you some general comments about the fourth quarter and 2021 I wanted to provide a quick update on the sale of our medical equipment rental business. So this sale of still progressing the endemic of slow progress on getting this transacted.

We now anticipate that we will divest this business in the first half of 2021.

In the third quarter, we sold substantially all of our assets of our maker tomato business for 18 billion net of working capital and recognized the loss of 1 billion of.

You can see this reflected the this quarter's results from discontinued operations.

Turning to slide 11, well, we are not planning to provide 2021 guidance until our year end the earnings call in February I would like to point out of a few items as we close out the fourth quarter in moving the quarter warrant.

As we stand today, our cash balance is north of 2 billion and we expect the main to maintain cash at this level through the end of the year, our cash balance is roughly equivalent to where we stood at the end of 2019. Thus we have been able to fund our lost projects through the year, while maintaining strong liquidity or.

Our non cash compensation expense in the fourth quarter will reflect the delayed filing of the 10-K and willing free surgery in expense for the quarter.

For a lot of large loss projects, we have approximately 100 million less the fund in the fourth quarter, and then marginal and then of marginal impact beyond this year.

As a reminder of because these projects have been written down to zero margin. They continue to reduce our overall margins since revenue and cost are recognized on the dollar for dollar basis, the just particularly over the when you looked at the infrastructure segment.

We expect to see margins increase as we wrap up these projects and are working through a healthier backlog.

Finally, we continue the CFO the impact on our business silver of several of our larger clients are slowing work to ensure that they can meet their year end cash flow obligations. Additionally, the pandemic continues to impede our ability the stuff project.

As we think about 2021, we will be starting from a lower backlog as we have worked down our existing backlog with much lower awards, replacing them. This year. This.

This is especially apparent in oil and gas and we will see a shift towards other business units until several of our larger clients feel comfortable reinvesting capital.

Before we open the line for questions I'd like to turn the call over to Alan Beckman floors executive Chairman to provide some remarks on our upcoming Chief Executive officer of transition Alan.

Thank you Joe.

I'll now ask you to move the slide flow.

And I'd like the smart.

This morning by saying the words the crop Carlos Fernando.

It has been my absolute privilege to get the work long slog, Carlos told to able to the capital of 2007, but.

But more specifically over the last like the low.

Almost took over the company and quickly back to work stabilize the dark pool.

And positioning the company for growth going forward.

It's hallmark has to be always promoting a culture of transparency of.

The ability.

Well the change of he put in place the quickly brokers across the company.

The revised pursue quite cool the Carlos good luck with the look of what will reduce the risk with our backlog of.

The local all of our sales pool, the focus on the high quality of Barclays.

Well, we can be profitable all the possible.

Possible.

Additionally, the I think it's important to low eagle bulk of you on.

All of this fall.

Four of those lots of like one of the local project charges in the low low low.

Well the also low gold ball liquidity, while the portfolio of really equaled the investigations.

All of those group of customers also spoke of all the rest of the stuff.

From Citi bought accountability.

The changes the loading the simple we're left with the the set us up for the next day.

Well, we are truly thankful for his contributions and wish him well in the low reserve requirement.

I'd like the melt speak a bit about the CEO the threshold.

As Carlos has put us on a stable operating platform.

Board recognized that of the spine or just the vessel will allow us to move forward with the CEO the will all the pool.

Forward strategy for the left part of.

Therefore on January the first.

David Constable would refer the floor as of <unk>.

The second do off of <unk>.

David held various leadership positions the or the like related to.

2000, and the level of.

From has also been a number of our board sales.

So from the school.

He has a deep understanding of our operational on opportunities from has the.

Secular focus.

On it but the risk management.

The speak on behalf of the board when we say we fully support the supportive of the opposition.

For the <unk> is the right person to lead or something.

I know the some of you remember David <unk>, who was low with the couple of.

He is looking forward the the collectible.

Well with the rest of the of the pool.

As previously mentioned, we are planning the start of people.

The early early the total portal.

At that time, the we'll all go to close the work of the David on the management team about the priorities of.

The actions that will move the couple of the forward for the fourth wall.

Well the oil.

Now with that operator, we will open the line for <unk>.

If he would like to ask the question. Please take note by pressing star one on your telephone keypad.

We are using the bigger from the trigger new function is turned off total I guess the can ultimately turn equipment.

Again not of Star of line to ask the question.

Well glad I didn't get the first question from and the capital in the city.

Good morning, guys.

Good morning, Andy.

Carlos lung failure of help as good working with you can you give us a little more color into how you and your customers are adjusting to come from related delays, especially on the problem projects basically of culturally the delayed channel push back to the timing to complete projects kind of customers in general the agreed to the new company.

Jason dates Andorra agreed to of course, Missouri's you're talking about when might we see more noise around the some of your projects until till the disease.

Hi, Thanks for that question and the actually obviously.

Obviously, the clients understand the cold weather is impacting our price.

And.

Generally speaking we are negotiating with the clients on the effects of the net of the Covidien pack of both as to schedule and asked the Pos.

And I think that the the the at the the discussions have very collaborative for the most price. There's no question that there will be compensation the the contractor for impacts beyond our control.

And where the price of resolving some of those.

GAAP to act to this point in time the problem is that obviously, we don't know what the final moving back you're going to be until we get past the pandemic, but we're engaged in some discussions right now.

The clients to resolve them to this point and then reserved the right to further negotiate down relative addition line packs.

All right thanks for that and then.

Obviously commodities have been rising relatively recently here, how do you sense steady increase the willingness from your clients to open the spigot to start spending again outside of the new C. I mean, you've talked about these mining projects in the past I know, they're pushed out but you didn't mention the sort of the little bit more spend in mining I think over the last month.

So the.

Is there any higher probability, especially if the if these commodity prices continue their current trend to see more of the VPC projects non energy in 2021 the on.

Yeah actually we view the number of the prospects in.

In the mining and the mining area.

As as we have a profit the the very disciplined about how we decide on whether the beta project, we're not the bit of project and then what's the submitted the proposal.

We're seeing we're going through those process on a number of projects in mining and.

And have been for the last several months. So yes, I'm optimistic that the mining will actually began to two of the surface is the major.

Activity area for us.

As we add as the world becomes more or like the fight and half of becomes more net Jerry I expect that the we will be seen copper and gold project coming.

Coming up and we are in the premier position to execute those projects.

And then maybe one more quick he from for Joe I don't know if you can answer but you know your initial margin guidance free and see before you even had to pull it was 3% to 5% margin.

You talked about margins the more like you know year to date, Michigan seems like it'd be in that range. So is that the way to think about even see margin generally going forward.

Yeah, I think the we didn't call it out to the kind of take a look at the nine month the run rate.

And that would be of a better.

Of better thought process around how you could you even see moving forward.

Thanks, guys much appreciated.

Well take our next question from Jamie Cook of Credit Suisse.

Hi, Good morning, I just wanted to follow up on Andy's question on that on the E. T margins 'cause Joe I think if you take the year to date, you know what I mean, I don't know if that's necessary the reflective because I think you had some charges in the first quarter and <unk> and then implies probably more like a 3% margin.

So like why wouldn't margins be higher than that or at least at the high end you know the mean of your 3% to 5% and 2021 in particular has the activity starts to pick up because the.

That has meaningful implications for the earnings power for 2021, Yeah. We just took the third quarter at face value of the Chester for tax and gene and price like of 50 cent number now that's probably too high but you know it just had meaningful implications for 2020 line and then I guess my second question just as you know on the bookings outlook under.

Scanning Kobe the you know has implications of.

But I'm just trying to understand how much he booking there being weighed down by customers waiting for you to come out with your sort of strategic update in which business as well the focus or not thanks.

Well I'll take the first one it.

If you go back into the the Threed nominally 3.1% run rate in B and C.

And you view some of the the index that are dragging that number down to the 3% there the really nonrecurring issues.

And I think you're right, Jamie if you eliminate those nonrecurring issues, you're probably closer to the upper range of the 3% to 5%.

Amy with respect to your your other question second question, we have been talking.

Talking to customers really all along doing this pandemic and so we're very close to them. They know where we're coming from and I don't expect that our strategy, they're not waiting for our strategy the amounts to the.

The go forward on projects the that I think they're very comfortable, especially in our oil and gas customers aren't very much Ah Express.

Expressed to us very much the desire for us to.

The available to them at the as the contractor in the can execute their large capital project.

Okay, and just one follow up on can you just help US understand you said the project around the problem projects are on schedule and we haven't had material charges, but whats the dollar amount now associated with the problem projects that the backlog the tank.

Well in terms of the in terms of earnings we're on we're on plan.

In terms of cash we're on plan as well.

In terms of the call.

Ask that we're going to spend go ahead master the I know I can speak to the cash side of it weighted and signal.

The signals back in I think September Jamie that we had nominally 400 million of spent 438 million that we were going to spend on problem projects in the 2020.

And that there would be a residual 200 million at that point in time based on the number of things that have occurred in the 21 and beyond we've had improvement in execution as it relates to those problem projects. We've had some cost avoidance and showed that 200 million is is nominally somewhere between the.

The the $75 million at this point, so we have been able to improve what we what we saw is the cash outlay relative to the problem projects.

In the 21 and beyond and changed from significant improvement.

In the.

And what that will entail.

Thank you Matt.

Oh, sorry, kind of Carlos and saying, we're very pleased with the execution of all of our projects given what we took over in may of of.

19, so we have been focusing on the execution as we said back then and net.

The pay dividends.

Okay, and Carlos Thanks, free I'll have throughout the south as tough as some of the pleasure working like the <unk>. Thanks.

Thank you.

Likewise.

Well the peak our next question from Stephen Thanks, Sheila Yes.

Thanks, Good morning, and I'll Echo the sentiment bank brought Carlos spend and best wishes to you.

So just to follow up on a of Jamie's question about the project deferrals on activity. It sounds like the customers are not necessarily waiting for any strategy, but could you just talk a little bit more about what really is the thinking.

And driver of the project deferrals of how much of his covert how much of the commodity price how much of that economic uncertainty of things like that and you have a sense of of aware of backlog could actually bottom the or stabilize them and win.

Yeah, I think of it varies by business segment.

With respect to oil and gas the obviously oil prices are a big part of factor there when in terms of the of mining a commodity price of some white, but also kroger has impacted mining business, maybe more than some of the other businesses.

The.

The other business life science is going very well 80 of that's going very well government well.

So we and we expect that the growth in government a T.I. last thing and even mining as we proceed into next year I trumps the of the backlog, we're going to where the where are we announced the they just pick the no 20, 20% to 20% of that like what.

Burning some of that backlog, obviously, we're not breaking the power of backlog or.

But we're replacing it where the backlog of picking in the mix with the isn't really an important point backlog that would take the name.

Is very very much.

Based on the discipline that we've established a early on in the in 2019, so what we're not baking in bad project and the with backlog will decline somewhat but it'll be.

Good backlog.

Okay, and then in the infrastructure segment I Wonder if you can just give us the sense of how the mix of legacy projects versus new or project.

Well the trend over the course of the year I know it sounds like the the legacy ones will become a smaller piece, but the.

Do you think you're going to start off with the year, they kind of 20% of newer project mix, then and by the end of 21, you know that become 80 per cent, how do we see that split.

But as the as this business could be you know that the.

Contributor to the profit as well.

I don't have the percentage this but I can give you I can give you a sense right now were nominally about 500 million that we're gonna be of pulling from the previous backlog into 2021.

And beyond and then some of the new work like the <unk> killed. The the we've just booked into we'll start the kind of balance that out as we move forward, but the right now we're looking at about a half a billion of.

The projects that we're we're continuing to execute the from.

From the the previous two three years that will flow into 21.

Okay. Thanks.

Thanks.

Yeah. That's helpful and then just one of <unk>.

The even the obviously the the a termination of the Purple line project is getting a of very favorable development right because of that the large project that the the legacy project and we will be able to exit that project.

And avoid any any future the.

From there.

Yep, that's certainly a sort of important how I just one last clarification. The I know you were talking about the.

The potential to resolve coconut project delays did you say or can you say.

And do you expect.

A resolution on the force majeure decision in 2021 on LNG, Canada in particular or could that extend beyond that.

Yeah. Thanks for that question I think way it probably will play out in the LNG C is we'll probably have a partial resolution.

Well with respect to the impacts the gate.

And then later on when we're in a position to assess the additional impacts will negotiate that it's like I said before it's not something we can negotiate all at once because the situation of the effects are and I for the yeah.

A lengthy and just just the point of clarification. There. It's not just the force majeure of playing its something we call the change of law because many of the impact or the result of government directed locked down. So it's both of those divisions that give us the basis for resolution.

Got it thanks very much.

The kind of next question from trade receipts with Goldman Sachs.

Yes, hi, good morning, everyone and Carlos Congratulations on the really stabilizing the business and the financial debt. It was certainly not an easy task here.

Thank you Gerry.

I'm wondering if we could just pick of step back and talk about <unk> of the balance sheet going forward now that you know the cash outflows from her wrapping up on the problem of projects.

Alan how are you from the board and the thinking about the the balance sheet going forward you know what do you need to see before we're deploying cash was the completion of LNG, Canada day can you just talk about.

Conceptually what signposts, we should look for the C. when you folks might be the.

Moving capital again once were not the.

The company with the current around here.

The very I'd be glad with GAAP about the.

Clearly our lives to the Carlos putting this all of this.

Stability.

First of all the point, where the goes also most of the remote where we're engaging with all the bank, although although credit facilities, which will be from called the.

Well the this year.

So getting back on reported GAAP.

Also solidified all evolved free <unk> and the <unk>.

The book well look the who all the credit rating is important to us.

And then started to pay down debt Oh go football of people, who spoke about the water oil for the part of the global growth.

We believe that we've got all the quoted the roll all Carlos will be able to the levels, because we'll be able to the Facebook the low cost.

Across the world.

The bulk of our Oh.

From a little bit.

While the.

But of the policy now the best of all bogus what I hope also it.

It is started the bank or more flow loads of little bit squeeze, where we think the proposal flow.

The left that's going to be able of very important part of.

Well the two that we want to be able to gas.

Well for the industry, where we go through all the great you put.

All of that it's not necessarily the of coal group of.

<unk>.

So I think the ought to be able to local the lot of so much more of the overarching goals for the the spreads the special well the lot of gross pull the puzzle over.

Well the rest of opportunities like the we will drop from more of the.

Got a couple of all the <unk>, where we have strength football the most of the Oh, what the focus all of the ball.

Okay, that's what you're right.

Oh the.

That's super helpful. The man you know in terms of maybe just to pick up on the strength of the company a along the areas where there's the sheep growth the hydrogen infrastructure. Obviously of copper you you alluded to early can you flush out what are the company of stem from some of those areas that are.

Obviously not from the you know currently but could be interesting. If we do see alternative energy technologies from so going forward you know outside of new scale, what are the companys capabilities today without spilling the beans on the on the strategy day.

So I don't want the don't have the scoop, David Constable here from <unk>.

So I'm of the I'm going to be very general I think.

We do have the significant strength both in intellectual property.

But but also in the ability to execute and locales.

The able to handle the permitting.

The work in difficult location.

The able to use our project management overall skills to be able to drive.

That's the project.

So I think the the actual Andre.

Unveiling of of the of the markets were really going into the and the focus of push hard on the.

I'm going to say per day, but it just seemed to until in the or Investor day coming up and are reported 41 for the.

But I do think it's going to be I think the this exciting the opportunities that we ever for all of us.

Take the position that we're in now the Carlos just down the street will allow us the start of the start slowly the first but the the gain momentum going into the stage process sort of very strong forward strategy.

And you know something that we've seen from some companies in this environment is sort of companies, reducing the size of their office space and companies are centrally rightsizing their organizations and you know considering the or the new pockets of infrastructure build out so the.

The next couple of years will be different from what we've seen in terms of kind of the energy investment you know one of or call. It. The prior point of the how big of an opportunity is it to rightsize the cost structure and right size. The footprint is that something that we should be thinking about thing you. Yeah, I think you're going to sort of that there will be the focus on that.

The I appreciate the discussion thank you.

Okay.

Well take our next question from Sean.

The capital markets.

Hi, gentlemen, thanks very much for taking my question <unk>.

Hey, Mike.

Just wanted to confirm or how much zero margin work is left in the backlog as of the third quarter.

And how much is expected to be remaining going into the 2021 I think you guys mentioned the $500 million number for the infrastructure segment specifically.

But I just want to the understand you know how much of that your margin work sort of rolls off and become the a margin tailwind a into 20 from along.

Yeah and in the <unk> and you're talking about the the lost projects. If you will that we're the we're pulling in the 21.

Exactly.

Yeah. So I think if I highlight the two business you know the purple line of being pulled out of backlog of the the the two biggest numbers that are two biggest projects that are contributing to the backlog rolling into 21 or green line in Bergstrom.

And Berkshire him is 35% complete and.

Or should the Berkshire of is 80% complete and Green line is 35% complete.

So and they represent the lion's share of that balance.

So my my recommendation is that the rent it gets its tied up into those two projects and then we'll start seeing some of the benefit of of.

The new work that's coming in that we booked in the quarter.

That's helpful would you be able to tell us how the infrastructure margins are running year to date and 2020 ex the large projects.

Yeah, No I mean, it's it's it's difficult at this point, because they're all running it kind of cheering.

Margin at this point for the lost projects.

But then we would have to do some.

From weighted new relative to what we're putting in the backlog, but it really any of the new work that's going into the interest side of the business is there's just been booked in the in the previous quarters and I think it would be better to have that discussion in the February timeframe, we have a little bit more color around.

Okay. That's fair and then you got the previously talked about getting that domestic readily available cash balance up to the sort of the 1 billion dollar level.

I'm curious where that number is today.

Good day, and you kind of exiting.

2020.

The currently will exit from the 2.1 billion about 36% of that is readily available domestic cash. So we're on our way, but the it again to Alan's comment I don't want to I don't want to get out in front of Mr. Constables strategy meetings, but.

As we go through the strategy will probably have the a review of the you know what that cash balance needs to be the support the organization and and the the brick and mortar footprint and some of the other things that there will be.

The fall out of of what the of the new strategy is moving forward. So that number may look or changes as we get into discussions at Investor day.

Hi, Thanks I appreciate it.

Yeah.

Operator can we take the next question.

Did you guys still hear misread the steep gone.

I think the I didn't warrant.

All right.

Okay. So.

If you look at the corporate DNA expenses.

So the underlying number is running.

Quite low year to date. So did you guys talk a little bit about that dynamic sort of <unk>, where the savings are coming in there what's sustainable and then maybe where the corporate DNA run rate goes into the next year.

Yeah, I think if you take in my opening comments I'm trying to think of it if you take the 68 million and you take the the FX impact.

The out about in the the out of it and you take the investigative cost out of the you're down at about a 30 million dollar number but the thing I would I would suggest the by again give the guidance around what that run rate may look like going forward, I'd say somewhere between $35 million to $45 million at this point.

Gotcha. That's helpful of tried turning it over again from my colleagues got the chance, but that's not all keep going.

Well take our next question Alan.

Yes, sorry.

Yeah David.

Operator go ahead.

Well take our next question from Justin Hauke from Robert.

Robert W. Baird.

Oh, Thank you I've got I've got the or first one I guess I'm looking at the new one but.

Can you just quantified the de scoping on the Purple line. The part was the backlog of them and it looks like actually made the there was a new scoping.

Going through the Kid the the the reconciliation shows the main something came back then so can you just talk about those to the two items.

I can talk top line on on the Purple line, what we did take out of backlog was 543 million.

I would suggest maybe we go back and see if we can follow up on your second question Dustin.

Is it just in the area.

Okay. That's fine we can power.

Yeah 5.3 is the number of that came out of it back from the Purple line.

Great. Thank you debt.

One is just on the amicus day like I guess, I mean, I understand you're not getting pushed back but you know how line.

I guess, how advanced from back first half of 21 expectation and I think the net Pat are you guys. The quantified you know something like 200 plus million of proceeds from the new car you you've got the 18 million from the Jamaican piece, which was obviously a small piece the <unk> is that still a reasonable number or.

Our or is there anything that you guys would not be at about expectations for the cash proceeds might be the map.

Yeah.

And.

So as we had started this process and holistically trying to the and transact the business.

It's become clear as weve gotten into sort of some fairly serious negotiations here.

Is that a is the it will more than likely be transaction on a regional basis.

Being North Africa, or excuse me, the North American sales South America thing.

<unk> Jude discrete elements of of the transaction, we are very well the progressed in discussion discussions on the North American side and continue to develop the of usually the the transactional strategy for the South American side.

So we wouldn't we wouldn't come off of the 200 million dollar range from we believe the up to a reasonable expectation and we are just significantly closer to the north American.

Sheldon we are the a true.

South American sales, but still still slated for first half of the of 21 for the North America.

Great now that's helpful. Thank you very much football I have.

Well take our next question from Michael Day, that's like the protocol the Turks.

Hi, good morning, gentlemen, well done Carlos.

Good morning, my thinking.

Recognizing how your your new.

Focus on the split on bidding on projects and the overall decline of the market maybe kind of highlight a couple areas that you're so the up you've seen in the last couple of months, maybe heading into year end to 2021.

On the energy side, where you're seeing some some green shoots the also maybe in the government and diversified services maybe of a bit of some of our observations on top you.

Recompetes opportunities to grow grow backlog and generate you know better work and those two end markets certainly government seemed a little bit countercyclical in the first price serves the certainly probably impacted my COVID-19ien small cap projects being a pressure till jumping from most observations the set things up as we look towards the 21 of the.

Sure well in energy and chemicals, we didn't specifically mention that's the point I mentioned now the chemicals business is still very steady business for us and we don't expect to see a decline there.

In the energy and chemicals business, I mean, the oil and gas business, we've talked about so.

Oh, the discipline that that clients are going to demonstrate sales we expect the back from the conduct of the challenging hearing from a little while.

But with respect to government, we are very well positioned in the deal. We say for example, we've got the.

A week one of the number of projects some of those of being challenged the from classic like.

We feel pretty good about our position on the.

And we see the act and TV opportunities in the government pay and.

And that's also true and now the advanced technologies and life Sciences, where we're actually working we're actually working ex I'm not going away from maybe feel of these as well as the other pharmaceutical type of project debt that isn't any of it needs. They will have a lots of opportunities right now and again the bench and you mentioned mining I think mining.

Maybe a little bit of later coming up but.

Sure, we're very bullish on mining as well.

Infrastructure, we the the.

Find our that we're gonna be strict or are bidding to jurisdictions, where the department.

I'm in the transportation execute projects the answers projects in the way that they are from our contract lost into a contracted from channel and we've been successful and of Texas. The certainly one of the other thing there are several other states of entry in the past, where we've been able to big projects successfully for.

For both the client interest the top right.

And follow up of Carlos.

How do you guys feel about in general new skill going in the 21. It is some pretty big milestones can we anticipate on that front, whether it's a new project or a little more support on the of development or investment side.

Yeah, that's the that's going on there, but I'm going to let Alan I'll take that one.

You know Mike at very.

Very good question I think the.

Several things have happened over the last the most.

The most of the sort of what will be positive for the new school of business.

With all of the.

Number one we call the split from the NRC approval of clearly a little bit of flow.

But the the the finance corporation of the U.S. announced the lifting their prohibition on the lending for nuclear projects international that debt that has gotten a lot of the pension and has resulted in the public to fairly.

Good opportunities to prevent the project here within the.

For the for the World.

The other thing that happened is new we pulled out the $1.4 billion a war of grab awards for the first nuclear projects new small modular reactors that are the right now that's part of getting the U.S. plug of the drug at school.

But we are talking with the at least two other plants with with the central limit of from projects coming up with the 2021 sort of.

The project side is starting to look good but also we are having very serious discussions with investors who want to come into the equity side of the skillful the both sides of the equation of looking strong right now.

The finding is the issue and then getting.

Getting these projects on board as well as the investors on board. He is taking a lot of work with them.

And Alan I would think the the incoming administration with the net positive towards this I would think given the carbonization none of it would be of any observations.

Yeah actually the reacts from that is yes.

The just the state of new scale really got its boost of started moving forward under the Obama administration, the separate very low needs.

What do you eat.

We've seen over the last the little girl, there's lots of little spatial where all the by Campbell of before oil for the spoke of but we don't think that will change at all like the whole thing.

Given the <unk>.

Thanks, guys.

Well now take our final question from Michael Feniger with Bank of America.

Hi, guys. Thanks for Kirk the squeezing the and I really appreciate it.

Yeah, the cash balance the 2 billion. Yeah is the cost of that it's bought that level even year to date the cash from ops. It looks like the 144 million of upcoming year ago, even more from the losses on the.

You had talked about it this year I guess anything we should be aware of that.

The benefited from the this year that that might reverse of.

On the cash from outside.

2021, and with the first.

His question I guess, just back of the cash balances and relatively stable over the past 12 month the.

Your backlog is under pressure and new orders is the likelihood that the cash balance comes down gets drawn down from 2021 and the concept to comply down the.

Yeah, I think the question I think our.

Our cash balances, the but kind of the function of a number of the.

Initiatives that we've put into place at the least of which is the the the the bidding principles and what is going into the backlog and the cash that it's generating I think one.

Two I think the the cost optimization program has been very very beneficial exactly instead of target of 100 million and.

The bowling what the number is will be north of that number in terms of real cash savings through the year I.

I think the to the extent that I had mentioned earlier Michael that the we are executing on.

Our loss provision projects of more effectively and efficiently.

The weighted and the need anticipated back in September of all been benefits, but that I would call. This most of the cash generation that you're seeing is through organic decisions.

And actions that the company is taking currently.

Understood and.

Well when we talk about the Jamie's question earlier, the 3.1% margin like your day, you see it actually sounds like its higher if we exclude from our do it. So you mentioned, maybe 4% to 5% of.

That's what we're thinking heading early into the 2020 that we should be more in the 5% number and can you just help me understand what would your state year to date of how much has the LNG, Canada actually contribute to that to that number.

It is margin recognized above that that that range of are you guys start to the about the other.

Maybe I'll answer it maybe holistically and and we'll probably get into you know the the.

The LNG she called the.

Our question, maybe a little bit later in February when we talk about the the impact really the the that are driving the 3.1 per cent a cumulative margins of them through the first nine months are some of the disclose killed it impacts we have a a credit risk I'm on a a kind of a project in.

In Mexico, and then we have a loss on a or on the transaction versus your floor, which we we would consider to the nonrecurring events at the end of the day of so if you normalize those out where we're closer to the 5% range.

So I would suggest that's probably a better a better number to two to utilize the moving forward.

Got a debt.

That's really helpful. And then I know it's been price is one yeah. I know you guys mentioned no project target on execution. The last one of the quarters yet just following up on the question. It sounds like the <unk>, a little bit more visibility on the impact the core of it or LNG, Canada I guess.

No the how many of the projects out there right now that the or some need for the resolution I understand it's kind of normal course of the business I don't know if this is a little bit more than the normal course of Smith <unk>.

But you guys were speeding the because I guess I'm just trying to reconcile the really across the glass two quarters of new big charges net the.

Outlook, starting from the pandemic impacting document execution can be moved up in the middle of 2021 or end of 2021, when the vaccines out their economy of humming yet there still are some litigation or or current doesn't anyway. You guys can kind of frame that four of them how to think about that in time line.

Yeah, I'll take that one.

In terms of that back in of course, but obviously the fixed price projects are the ones that the.

We had a couple of and in fact that are being negotiated with the client.

The any any kind of denying entitlements the client obviously the negotiate with us in terms of Oh, the the the amount of and Ah the scheduling power. So it it's still what we're working with the clients on some of these projects and have already reached some preliminary resolutions which are favorable.

But we still have a number of them to be resolved and it's hard to resolve them because the impact of still ongoing some cash the Medicaid.

So I can't I can't you know great. The can't tell you the magnitude, but I can tell you bad debt.

It's obviously a recognized.

Okay and scheduling tax that we're working with the client to address in an equitable way.

Fair enough. Thanks Alan.

That concludes today's question and answer session.

Yes, I mean, that's the kind of I will turn back the come from team from the addition of my closing remarks.

Thank you operator, and thanks to all of the you for participating on our call today.

This is my last time speaking with you as CEO of Fluor the.

The challenges the company has faced over the last 18 months.

From project write downs in internal investigation to a level of pandemic have been truly.

Extraordinary.

I want to thank all of our stakeholders our shareholders of clients are partners and.

And of course of 45000 employees for sticking with us through this process.

I strongly believe I'm, leaving the company stronger and more resilient than when I was named CEO in May of 2019, as an investor I look forward of seeing the great things big things from fluids future.

In the meantime, I've been working closely with David to ensure a smooth transition ive known David from many years. He brings a unique combination of deep insight into fluor and an outsider's perspective.

Between knows the company inside and out and I wish him all the best in his role.

We greatly appreciate your support of floor.

Thank you.

This concludes today's call. Thank you for your participation you may now disconnect.

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Good morning, and welcome to the poor Corporation to the Q 2020 earnings Conference call. Today's conference is being recorded at the time all participants are in a listen only mode of of course journey of professional column and actually the presentation.

Today's conference will be available at approximately 38 am eastern time today, except on the gross <unk> and Dr. dot floor of Dot com. The web replay will be available for 30 days.

A telephone replay will also be available for southern day grew a registration link also acceptable imports about free <unk> investor day for Dot com.

The time for opening remarks, I'd like to turn the call is the true face of <unk> director of Investor Relations. Please go ahead, so income or.

Thank you operator, and welcome to the fourth quarter 2020 conference call look of today are Alan back then was the executive Chairman Carlos <unk>, Chief Executive Officer, and should bring its worst chief financial Officer.

We released our earnings David earlier, this morning, and your streaming of slight tweaking kitchen of the website, which we'll reference while making prepared remarks.

Before getting started I'd like to refer to you to our safe Harbor net of any forward looking statements, which is summarized on slide one day.

During today's presentation, we'll be making forward looking statements, which reflect our current analysis of existing trends the net furniture there's.

There's an inherent listed actually sales and its damage couldn't get from the Chile.

Find a discussion of the list of factors, which could potentially contribute to catch typically in the company's form 10-Q filed earlier today.

During this call the make its kind of certain non-GAAP financial measures reconciliations of these amounts to the comparable GAAP measures are reflected in the earnings release existing in the Investor Relations section of our website at Investor day Dot floor desktop.

I'll now turn the call over the Carlos certainly the sports Chief Executive Officer Carlos.

Thanks, Jason and good morning, everyone. It's.

It's great to be talking with all of you again and I'm pleased to report that with this morning 10-Q filing.

I would now correct when its financials.

Our team around the World has worked tirelessly over the last several months to get us to this point we.

We are proud and grateful for the diligent and hard work.

And we look forward to speaking with the investment community on the more regular and consistent cadence going forward and we thank you for your patience as we thought that the challenges of 2020.

Moving to slide two.

I'd like to start by providing an update on the effects of the pandemic on our operations as.

As well as the Scott will discuss in greater detail since we last spoke we have been.

The feed our price continued to come back online and the cover from the initial rounds of regulatory locked down in Kobe <unk>.

We are monitoring restrictions in various states in the country with rising cases.

We'll keep you updated on any major impact to our business that we might see.

Well, the 75% of our offices are open and operating at a reduced level of operations.

The remaining offices from still close.

We can flex the level of personnel.

Our offices as local restrictions engineered the spread of of the virus change it.

Only about 7% of our projects are closed.

With the rest operating at normal intermediate or limited capacity.

We continue to engage with our clients on how to proceed successfully and safely net.

Net provided notice is asserting our rights under change of law enforcement your provision.

We remain committed to the health and safety of our employees and communities, where we work we have launched new procedures training and communications packages to help the transition our people back the work safely and finished the year strong.

We are proactively ensuring our people have the mental and physical support they need to remain resilient and keep our business moving forward.

Despite the impact of co, but we see a number of positive developments across the company.

The majority of our project.

New York safely and successfully cut right from the field and the projects. We identified that problem projects last year have been holding two of their revised forecast and schedule.

There were no significant charges incurred in the third quarter.

Before handing the call over the Joe for a financial update I'd like to provide you a high level outlook.

Of what's going on in our various business segments and some specific project commentary.

Turning to slide three.

In energy and chemicals.

The segment continues to make progress on executing its backlog endemic constrained environment.

However, we continue the here from a number of our oil and gas clients that they expect the have reduced capital spending plans over the next few years.

We believe that our clients were focused on advantaged hi.

Hi value projects that can generate returns in a weak commodity price environment.

While we do see a pipeline of project, we will only pursue the ones that fit our revised criteria as we focus on delivering consistent profitability.

On PCL range.

Mobilization continues as the cobot situation attendees and western topics Donnie has improved.

We have successfully increased the population to over <unk>.

1000 in Q3 and blanket the normalized the project 20000 by the end of the 2020.

As of today, we are older 19000.

In October the project completed the final module delivery for the project on plan.

They certainly that the tremendous accomplishment during the current endemic and eliminate it from high profile project list.

The floor like JV is 98% complete with engineering and construction anything he.

It's over 50% complete.

Major construction activities include seven modules on foundation from.

Completion of metering station and continue the completion of power and control gross.

In Kuwait.

Who has started pumping the the how's.

How's the oil refinery ahead of commissioning.

We can like complete this will be why the worlds largest oil refining facility.

Finally, our offshore project work continues and we are still planning to complete the fabrication of pre commissioning work in Twentytwenty one.

Ongoing cobot impacts in travel restrictions in China are hampering the progress, but mitigation actions are being taken.

Now moving to slide four.

Up in Kitimat progress continues to be made on the LNG see LNG, Canada project. Despite ongoing challenges presented by the government imposed restrictions due to the COVID-19 and Dennis.

Our engineering deliverables are being produced in various local the operating centers for the I guess the out and west of the scope the keep pace with our COVID-19 in fact, the schedule for the fabrication yard and construction site.

The startup activities are progressing while maintaining our COVID-19 recommended and required measure of saying mitigation.

The site preparation and timing of work from train one is complete.

And train two is well under way.

The modular Offloading facility, all the roads and bridges required the tranche of the modules the site will be ready in advance of the seeding the first modular 2021.

Hi of capping concrete foundations placement and paid in cash started saying one.

Well, we can see the work on site of the priority continues to be take the well being of our people.

And now with the slide five.

Moving onto our mining and industrial segment, given the ongoing pandemic in the commodity price fluctuations, we have seen a lot of the large mining projects, we were expecting to be awards in 2020 2021 get delayed.

We are well positioned when these projects when our clients are ready to proceed.

Revenue and segment profit was negatively impacted as execution activity will be from on a few large mining project due to the cold at 19.

Dennis.

I am pleased to say that over the past month, we have started the TV budgets the mobilized.

Expect to see revenues Boggled suit as they get fully back on line.

In our advanced technology and life Sciences business.

We completed the Novo Nordisk project in North Carolina in the third quarter.

New awards for the quarter include a cell based influenza vaccine manufacturing facility in Australia.

Now turning to slide.

Infrastructure margins reflect execution on the view zero margin projects in our backlog at the.

However, we are continuing moving these projects forward and should start to see some relief in our margins as these projects wrap up later this year and in 2021 and into the 2021.

This quarter, our infrastructure segment of the Oak Hill Parkway Highway project in Austin, where the.

Texas Department of transportation.

The project is another example of our focus of the Texas infrastructure market.

And is a testament to the value of that ex Dot places on our service.

As we have previously discussed.

In the third quarter, we terminated the contract with the Maryland Department of transportation for the Purple line project.

The project has now been removed from on the backlog.

November the Maryland Department of transportation, reaching 250 million.

Dollar agreement in principle with the consortium to settle all of the Contortions outstanding claim.

Although this agreement is subject to approval by the Maryland Board of public works.

It will be so.

In Florida, and the joint venture partners of ordering additional project costs.

Turning to slide seven.

In government third quarter reflects the returns the way near normal results.

Our normal results driven by solid performance and active management of work levels. Despite the gross.

Total pandemic compared to the second quarter.

This was achieved across the government group with the largest increases that strategic program Reserve Fort Smith and Savannah River.

In diversified services reduced business volumes as a result of the.

Of course, it 19, the teenager impact because of the third quarter.

Over the past few months, we have started the fee volume increasing after lockdown restrictions lifted assps.

Especially in Europe, and Latin America.

In the third quarter, we also divested England towards the professional equipment rental business in Europe.

Now moving to our other segment on.

On slide eight.

This segment includes the fixed price lasted and warrant projects that were previously part of the government segment as well as our new sales initiatives.

The margin forecast for the rack Britain warrant projects continue to remain relatively flat.

The Raptor project nearly complete.

Teens lack of the working off punch list items.

Water trials have been successful at the project has made substantial progress in turning over.

The systems for the line.

Well the turnover of all systems and affect the spec demobilization of expected early next year.

Warner has had an effect of construction campaign through the summer and fall weather window.

Overcoming early design complications and making substantial progress with early structural work.

The projects successfully negotiated an extension of the time order with the line mitigating the list of schedule damage.

Good day impact from Cove it.

Have been relatively modest and schedule index have been effectively mitigated.

In August we announced that new scale received final design certification by the NRC.

Disapproval establishes new scale as the pre eminent leader in the small modular reactor technology market.

Outdoor to respond to the customers looking for unique flexible sales.

And the carbon free energy solution.

Since that approval, we have seen an increasing interest from potential customers.

Capital investors manufacturers and supply chain partners to go forward in our development effort.

With the support the school separately, creating a carbon free power solution and we look forward to discuss the other opportunities in the near future.

Now I will turn the call over the Joe to provide a financial update.

Joe.

Thanks, Carlos and good morning, everyone I'll start with a financial update on slide nine.

Then the third quarter, we recorded revenue of 3.8 billion down slightly from Q2 and earnings from continuing operations attributable to the floor of 19.1 million or 14 cents per share range.

The results for the quarter includes 30 million of foreign currency transaction losses $22 million of Nuscale expenses, and 19 million of internal investigation expenses.

In regards to new scale, while we previously stated 2020 expenses would be fully funded by investors investment decision delays due to the pandemic have required floor to provide 15 million of the funding.

In the third quarter.

Our overall segment profit margin of 3.4% for the quarter as evidence of the work we have done over the last 18 months to stabilize the business. We saw the strong performance across our business lines. This quarter and have not taken any material project execution charges in the first three quarters of 2000.

20.

Specifically in energy and chemicals, it's important to note that are higher than normal operating margins for Q3 did not properly represent outperformance in the in the quarter. Although we did see increased project execution activity on our LNG project the affair.

Ex of Covance and normal project adjustments reflected in Q1 because of our delayed reporting schedule. This year.

Results for the segment also benefitted benefitted from favorable FX, thus looking at the business line from the year to date perspective provides a better picture of our performance in that segment.

Corporate Gionee expenses in the quarter were 68 million, most foreign currency strength and against the U.S. dollar in the quarter, resulting in the previously mentioned the foreign currency loss of 30 million, which is driving up the corporate DNA expense share. They also reflects 19 million of investigation expenses.

Moving to slide 10 of our cash balance at the end of the third quarter was 2.1 billion with 36% of that domestically available for use per operating cash flow for the quarter was 80 million with free cash flow of 58 million.

Moving to capital structure and liquidity, we continue to believe that we have ample liquidity to meet the demands of the current projects in the future prospects.

As Carlos mentioned with todays filing we're now current with all financial filings and debt requirements. Furthermore, we continue to have extensive and ongoing communications with our banking community.

And the four giving you some general comments about the fourth quarter and 2021 I wanted to provide a quick update on the sale of our medical equipment rental business. While this sale is still progressing the endemic of slow progress on getting this transacted we now.

Now anticipates that we will divest this business in the first half of 2021.

In the third quarter, we sold substantially all of our assets of our main to Jamaica of business for 18 billion net of working capital and recognize the loss of 1 million.

You can see this reflected in this quarter's results from discontinued operations.

Turning to slide 11, while we are not planning to provide 2021 guidance until our year end of the earnings call in February I would like to point out a few items as we close out the fourth quarter and move in the quarter warrant.

As we stand today, our cash balance is north of $2 billion and we expect the main to maintain cash at this level through the end of the year, our cash balance is roughly equivalent to where we stood at the end of 2019. Thus we have been able to fund our lost projects through the year, while maintaining strong liquidity our.

Our non cash compensation expense in the fourth quarter will reflect the delayed filing of the 10-K and low in pre certainty DNA expense for the quarter.

For a lot of large loss projects, we have approximately 100 million less the fund in the fourth quarter, and then marginal and then of marginal index beyond this year.

As a reminder of because these projects had been written down to zero margin that continue to reduce our overall margins since revenue and cost per recognize on the dollar for dollar basis. The just particularly evident when you looked at the infrastructure segment.

We expect to see margins increase as we wrap up these projects and are working through a healthier backlog.

Finally, we continue the CFO the impact on our business silver of several of our larger clients are slowing work to ensure that they can meet their year end cash flow obligation of.

Additionally, the pandemic continues to impede our ability to step project.

As we think about 2021, we will be starting from a lower backlog as we have worked down our existing backlog with much lower awards, replacing them this year.

This is especially apparent in oil and gas and then we'll see a shift towards other business units until several of our larger clients for the center both reinvestment capital.

Before we open the line for questions I'd like to turn the call over to Alan Beckman Wars Executive Chairman to provide some remarks on our upcoming Chief Executive Officer transition.

Yes.

Thank you Joe.

I'll now ask you could move the slide well.

And I'd like the smart.

This morning by saying of the words about Carlos from Abbott.

Yes, the in my absolute privilege, we get the work along the Florida Carlos tend to table of the company in 2001 of them, but.

More specifically over the last like the low.

Almost took over the company quickly that's the work stabilizing or approval.

Positioning the company for growth going forward.

This hallmark has to be always promoting a culture of transparency.

Well the ability.

From the changes we put in place of quickly brokers across the company.

The revised pursue quite cool the Carlos of off with or what the current will reduce the gross.

Blog.

Although the law of our sales to the focus on the high quality product line.

Well, we can be profitable.

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Additionally, the I think it's important that low.

On this call.

As low as well the.

Good luck with the project margins low low low.

Uhhuh of also low gold small equipment, while the completed.

What's the Jason.

All of those plus some of the Carlos was focused on the list this plus low.

Transparency and accountability.

The changes we made in the spot we're left with the the set us up.

For the next 12.

And we are truly thankful for his contributions and wish from well low reserve requirement.

I'd like the melt speak a bit about the CEO of vessel.

As Carlos has put us on a stable operating platform.

Board recognized that of the spine for vessel will allow us to move forward with the you know the world all of the forwards for the.

Net.

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Therefore of January the core.

David Constable would refer the floor.

The new offices.

David held various leadership positions the floor for like really the food.

Sales of the level.

On the was also from a number of our board sales.

So from the.

He has a deep understanding of our operations of opportunity.

Thank you our focus.

Non effective risk management.

The speak on behalf of the board when we say we fully support.

One of the opposition.

It's one of the right person to lead our company.

Although the some of you we love the David when he was low with the company.

He is looking forward the left.

But with the rest of the of the pool.

Total.

As previously mentioned we were planning.

The goal.

Early early the.

One of the point of war.

At that time, you will all going towards the work of David on the management team about the priority on the actions that will move this couple of forward.

On the oil.

Well now with that operator, we will open the line.

If you would like to ask the question. Please take note by pressing star one on your telephone keypad.

Using the speakerphone. Please check your mute function is turned off to a lot of your could not to enter our equipment.

I'm not of Star of London to ask the question.

We will gladly take the first question from Andy Kaplowitz the city.

Good morning, guys.

Good morning, Andy.

Carlos Thanks for all your help us good working with you.

Can you give us a little more color into how you and your customers are adjusting to current related delays.

Cash on the problem projects.

Usually have of culturally the delay of channeling pushed back the timing to complete projects kind of customers in general agreed to the new completion dates Andorra agreed the force majeure as you're talking about or might we see more noise around some of the new projects until closer to the team.

Hi, Thanks for that question and the actually.

Obviously, the clients understand the cold weather is impacting our price.

And.

Generally speaking we are negotiating with the clients on the effects of the net of the covenant package, both as to schedule and asked the cost of.

And I think that the the the discussions have very collaborative of the most price.

There's no question that they will be compensation to the contractor for impacts the honor of control.

And we're in the process resolving some of those.

To add to this point in time the problem is that obviously, we don't know what the final opening backing of going to be until we get past the pandemic, but we're engaged in some discussions right now with clients to resolve them to this point and then reserve the right to further negotiate down the road and addition line tax.

All right. Thanks for that and then obviously.

Obviously bodies of been rising relatively recently here have you sensed any increased willingness from your clients to open the spigot to start spending again outside of the C. I mean, you've talked about the lighting projects in the past the I know, they're pushed out but you didn't mention the sort of a little bit more spend in mining I think over the last month.

So.

Is there any higher probability, especially if these commodity prices and share their current trend to see more of the VPC projects non energy in 2020 line beyond.

Yes, actually we view the number of the prospects.

In the mining and the mining area.

As as we have a profit the fair.

Disciplined about how we decide on whether the data project were not the good of project and then what we submitted the proposal.

We are seeing the going through those process the number of projects in mining.

And have been from the last several months so yes, I'm optimistic that the mining will actually begin to do you share.

This is the major active.

Activity for us.

As we add as the world becomes more or like the five and capital becomes more of net Jerry I expect that we will be seeing toppling both projects are.

Coming up and we are in the premier position to execute those projects.

And then maybe one more quickie from for Joe I don't know if you can answer it but you know your niche from margin guidance free and see the point you had the call it was 3% to 5% margin.

You talked about margins the more like you know year to date, which it seems like it would be in that range. So is that the way to think about even see margin generally going forward.

I mean, I think the we didn't call it out the the kind of take a look at the nine month the run rate.

And that would be a better.

A better thought process around how you could view the into moving forward.

Thanks, guys much appreciated.

Well take our next question from Jamie Cook of Credit Suisse.

Hi, Good morning, I just wanted to follow up on Andy's question on debt on the E. T margins because Joe I think if you take the year to date, you know any mean I don't know if that's necessary line reflective of I think you had some charges in the first quarter and then implied probably more like a 3% margin.

So like why wouldn't margins be higher than that or at least at the high end you don't need of your 3% to 5% and 2021 in particular has the activity starts to pick up because that has meaningful implications for the earnings power for 2021, Yeah. If we just took the third quarter at face value of the Chester for tax and gene hate implies like of 50.

Net number now that's probably too high but you know it just had meaningful implications for 2021, and then I guess my second question just as you know on the bookings outlook understanding co bad you know had net locations, but I'm just trying to understand how much.

The bookings there being weighed down by customers waiting for you to come out with your sort of strategic update and which business as well the of focus or not thanks.

Well I'll take the first one.

If you go back into the the Threed nominally 3.1% run rate and B and C and you.

The some of the the index that are dragging that number down to the 3% there the really nonrecurring issues and.

And I think you're right, Jamie if you eliminate the as nonrecurring issues, you're probably closer to the upper range of the 3% to 5%.

Amy with respect to your your other quite the second question we have been.

Talking to customers.

The all along doing this pandemic and so we're very close to them. They know where we're coming from and I don't expect that our strategy, you're not waiting for our strategy to be announced too low.

The forward on projects the that I think they're very comfortable, especially our oil and gas customers are very much.

Expressed to us very much the desire for us.

The available to them at the as the contractor and of can execute there.

The large capital projects.

Okay and just one follow up can you just help US understand you said the project or on the problem projects are on schedule on the haven't had material charges, but whats the dollar amount of now associated with the problem projects that the backlog of that.

Well in terms of the current.

Terms of earnings we're on we're on plan.

In terms of cash we're on plan as well.

The.

Ask that we're going to spend go ahead.

I can speak to the cash side of it.

Signaled back in I think September Jamie that we had nominally $400 million. It's about 438 million that we were going to extend on problem projects in 2020.

And that there would be of residual 200 million at the point in time based on the new.

Number of things that have occurred in the 21 and beyond we've had improvement in execution as it relates to those problem projects. We've had some tossed avoidance and so that 200 million is nominally somewhere between $50 million to $75 million at this point. So we have been able to improve what we.

What we saw as the cash outlay relative of the problem projects.

In 21 of them beyond and changed from significant improvement.

In the.

And what that will entail.

Thank you Matt.

Darren Collison said, we're very pleased with the execution of all of our projects.

Given what we took over in May of <unk>.

The 19, so we have been focusing on execution as we said back then that net pay.

Hey dividends.

Okay, and Carlos Thanks, Barry I'll hop throughout the south.

I mean, the pleasure working with you. Thanks.

Thank you.

Likewise.

Well the peak our next question from Stephens actually yes.

Thanks, Good morning, and I'll Echo the sentiment thank brought Carlos and best wishes to you.

So just a follow up on a non jamie's question.

About the project deferrals on activity it sounds like the customers are not necessarily waiting for.

Any strategy, but could you just talk a little bit more about what really is the thinking and driver of the project deferrals.

How much of his covert how much of the commodity price how much of the economic uncertainty of.

Things like that and do you have a sense of of aware of backlog could actually bottom or stabilize them and when.

Yeah, I think of it varies by business segment.

With respect to oil and gas obviously oil prices are a big part of factor there when in terms of the mining.

Commodity price of some white, but also Kroger has impacted mining business, maybe more than some of the other businesses.

The.

The other business life science is going very well, that's going very well government well.

We made the we expect that the growth in government day, Pls and even mining as we proceed into next year in terms of the backlog, we're going to where where we have a day Jody.

No question.

The 27 point of that way.

Regarding some of that backlog, obviously, we're not going away from the entire of backlog.

But we're replacing it where the backlog of picking in and this is the this is really an important point backlog that would take the name.

He is very very much.

Based on the discipline that we've established early.

Early on in the <unk> in 2019, so we're we're not baking in bad projects.

And so the backlog will decline somewhat but it will be.

Good backlog.

Okay, and then in the infrastructure segment I Wonder if you can just give us the sense of how the mix of legacy projects versus the project.

Well trend over the course of the year I know it sounds like the the legacy ones will become a smaller piece, but.

Do you think you're going to start off with the year say, 20% newer project mix and by the end of 21 that becomes 80 per cent, how do we see that.

As the as this business could be the.

The contributor to the profit as well.

I don't have the percentage system I think Joe you if I can give you a sense right now where.

Not only about 500 million that we're going to be of pulling from the previous backlog into 2021.

And beyond and then some of the new work like of the killed the that we just booked into we'll start the kind of balance that out as we move forward, but the right now we're looking at about a half a billion of.

The projects that we're we're continuing to execute from.

From the the previous two three years that will flow into 21.

Okay. Thanks.

Thanks.

Yes, that's helpful and then just.

The than the obviously the termination of the Purple line project is getting a very favorable development for us.

The large project that the the legacy project and we'll be able to exit that project.

And avoid any any future.

Cost there.

Yeah, certainly certainly important how and just one last clarification. The I know you were talking about the.

The potential to resolve Cove. It project delays did you say or can you say.

Do you expect.

A resolution on the force majeure decision in 2021 on LNG, Canada in particular or could that extend beyond that.

Yeah. Thanks for that question I think way it probably will play out in the LNG C is we'll probably have a partial of solution.

Well with respect to the impacts the date.

And then.

Later on when we're in a position to assess the additional impacts will negotiate that.

Like I said before it's not something we can negotiate all at once business.

Situation of the effects are pretty yeah.

Like the and just the point of clarification that it's not just the force majeure, playing the something of the call change of law because many of the impacts are without the government directed lockdown. So it's both of those divisions that give us the basis for resolution.

Got it thanks very much.

The current next question from Jerry Revich with Goldman Sachs.

Hi, good morning, everyone and Carlos Congratulations on the really stabilizing the business and the financials, but it was certainly not an easy task here.

Thank you Gary.

I'm wondering if we could just take of step back and talk about the balance sheet going forward now that you know the cash outflows from her wrapping up on the problem projects.

Alan how are you and the board.

The thinking about the balance sheet going forward you know what do you need to see before where the low.

Moving to cash was the completion of LNG, Canada day can you just talk about.

Conceptually what signposts, we should look for the suit when you folks might be.

The point capital again, one square.

We're going to continue with the current around here.

Well, well, Jerry I'd be glad to talk about the.

Clearly our lives to the Carlos putting us.

Stability.

Well the oil goes off the list of remote where we're.

The age and with all the bank or credit facilities, which will be from current were early in the works.

So getting back on the important GAAP.

We also solidified our balance sheet and grow them from a book of local group, who are private label is important to us.

Let's start of without the.

All of the football is too low.

The football with the lot of all important part of the growth for the world.

We believe that we've got fall of putting the right laws Carlos.

The levels, because we'll be able to boost the.

Profitable.

The bulk of of Oh.

Well the.

While the.

But of the policies of the cost of all the bogus couple of also what.

It is starting in the back from our full loads on the squeeze where we quote.

Hello.

Well, that's what's going to be level of very important part of the go forward flow, we want to be able to the west.

And the quality of the schools, where we think we have a great.

The other one it's probably for the the goal.

Total.

What the ball.

So I think of that want to be able to local awards for the four of the overall loan goals for the the spreads as well. So we'll have a lot of flow from the portal.

We have some off of one of these local west the more of the.

A couple of forward.

Where we lost gross football the most of the so what the.

With all of them in the fall.

Okay Thats moving.

The.

Super helpful. The man you know in terms of maybe just to pick up on the strength of the company a along the areas where there's perceived growth the hydrogen infrastructure.

So the of copper you alluded to can.

Can you flush out what are the company of strength from some of those areas that are obviously not tried in the you know currently but could be interesting if we do see alternative energy technologies.

Going forward.

Outside of new scale, what are the companys capabilities today without spilling the beams on the I'm just trying to day.

Well I don't want the don't have the scoop, David Constable here.

So I'm going to some of them.

The third general I think we.

We do have the significant strength of both and intellectual property.

But but also in the ability to execute in locales.

The able to handle the permitting.

The work in difficult location.

The goal.

As our project management overall skills to be able to drive the club.

Thus the project.

So I think the the actual.

Unveiling of of the of the markets were really going to the focus of push hard on the.

On the say per day, but it has been through until in the or Investor day coming up in early point of 21 for the.

But I do think it's going to be I think it is exciting to the opportunities that we have the run of us.

The position of were now the Carlos has gone this true will allow us the start of the.

The start slow reimbursements of the gain momentum for the end of staged process flow.

The strong forward strategy.

And you know something that we've seen from some companies in this environment is from the companys reducing the.

Size of their office space or in the company's essentially rightsizing the organization.

Tittering.

The new pockets of infrastructure build out so the.

From years will be different from what we've seen in terms of kind of the energy investment.

Total recall at the Pryor quantity the hub, how big of an opportunity is it the rightsize the cost structure and right size. The footprint is that something the we should be thinking about thank you. Yeah, I think you're going to sort of that there will be the focus on the.

The I appreciate the discussion thank you.

If you.

We'll take our next question from Sean Egan with Keybanc capital markets.

Hi, gentlemen, thanks, very much for taking my questions.

Hi, I, just wanted to confirm or how much zero margin work is left in the backlog as of the third quarter.

And how much is expected to be remaining going into the 2021 I think you guys mentioned the $500 million number for the infrastructure segment specifically.

But I just want to understand how much of that your margin the work sort of rolls off and the comes with a margin tailwind.

Into 20 from along.

Yeah, and and Sean you're talking about the the loss projects. If you will that were that were pulling in the 21. Thanks.

Exactly.

Yeah. So I think if I highlight the too big of US you know with purple line of being pulled out of backlog of the and the the two biggest numbers that are two biggest projects that are contributing to the backlog rolling into 21 or green line in Berg from.

And Berkshire him is 35% complete and.

Sure the Berkshire of is 80% complete and Green line is 35% complete.

So and they represent the lion's share of that balance.

So my my recommendation is that the I think it's tied up into those two projects and then we'll start seeing some of the benefit of of.

The new work that's coming in that we booked in the quarter.

That's helpful would you be able to tell us how the infrastructure large animals are running year to date and 2020 ex the large project.

Yeah, No I mean, it's it's it's difficult at this point, because they're all running it kind of sharing.

Margin at this point for the loss projects.

But then we would have to do so.

From weighted new relative to what we're putting in the backlog, but it really any of the new work that's going into the interest side of the business is there's just been booked in the previous quarter. So I think it would be better to have that discussion in the February timeframe, we have a little bit more club color around.

Okay. That's fair and then you got the previously talked about getting that domestic readily available cash balance up to the sort of the 1 billion dollar level.

I'm curious where that number is today.

Today and kind of exiting.

The 2020.

The currently will exit from the 2.1 billion in about 36% of that is readily available domestic cash. So we're on our way, but again to alan's comment I don't want to.

Don't want to get out in front of Mr. Constable strategy meetings, but.

As we go through the strategy, we'll probably have a of review of the.

What that cash balance needs to be the support the organization and the the brick and mortar footprint and some of the other things the that'll be.

Fall out of the of.

What the of the new strategy is moving forward. So that number may look or changes as we get into discussions at Investor day.

Okay. Thanks I appreciate it.

Operator can we take the next question.

And you guys still hear misread the steep.

I think you have the.

All right.

Okay. So.

If you look of the corporate DNA expenses.

No the underlying number is running quite.

Quite low year to date. So did you guys talk a little bit about that dynamic sort of where the savings are coming in there what's sustainable and then maybe where the corporate DNA run rate goes into the next year.

Yeah, I think the thing in my opening comments and China I think the if you take the 68 million and you take the the FX impact.

Out about in the the out of it new take the investigator.

The investigative cost out of the year.

We're down at about a 30 million dollar number but the thing I would I would suggest that it by the again getting guidance around what that run rate may look like going forward, I'd say somewhere between $35 million to $45 million at this point.

Gotcha Thats helpful. I'll try turning it over again from my colleagues got a chance, but if not I'll keep going.

Well take our next question of Yeah.

Flow going.

Okay sorry.

And as of.

Operator go ahead.

Well take our next question from Justin has the right.

Robert W. Baird.

Thank you.

I've got I've got the first one I guess on what kind of the one but can.

Can you just quantify the de scoping on the Purple line look what was the backlog of them and it looks like actually made the there was a new scoping.

Going through the killed the we the.

The Asian shows the main something from back then so the.

Can you just talk about those two.

I can talk top line on the Purple line, what we did take out of backlog was 543 million.

I would suggest maybe we go back and should we can follow up on your second question Dustin.

As the Justin Gary.

Okay. That's fine we can pull out of them.

Yeah, Hi for three of the number that came out of back from the Purple line.

Great. Thank you.

The second one is just on the I mean kind of sale I guess, I mean, I understand you're not getting pushed back but.

How line.

I guess how is the answer is that first half of 21 expectation.

And I think in the past.

You guys the quantified something like 200 plus million of.

Proceeds from the New car you got the 18 million from the Jamaican piece, which was obviously a small piece the is that still a reasonable number or or is there anything that you can guys was not the about expectations blip the cash proceeds from Nike from that.

Yeah the end.

And.

So as we started this process and holistically trying to transact the business.

It's become clear as weve gotten into some fairly serious negotiations here.

Is that a it will more than likely be transaction on a regional basis.

Being North Africa, or excuse me, the North American sales South America <unk>.

The two discrete elements of of the transaction, we are very well progressed and discussion discussions on the North American side.

And and continue to develop the.

The the transactional strategy, where the South American side.

So.

So we wouldn't we wouldn't come off of the 200 million dollar range. We believe that's a reasonable expectation and we are just significantly closer to the north American.

Sales and we are the south.

South American sales, but still still slated for first half of the of 21 for the North America.

Great now that's helpful. Thank you very much football have.

Well take our next question from Michael the that's like the protocol the effects.

Hi, Good morning, gentlemen world on Carlos.

Good morning, Mike Thank you.

Yeah.

The recognizing how your your new.

Focus on the split on bidding on projects and the overall decline of the market maybe kind of highlight a couple areas that you're the have you seen from the last couple of months, maybe heading into year end to 2021 on the.

The energy side, where you're seeing some some green shoots the also maybe in the government and diversified services maybe of a bit of some outflows of.

Observations on.

Recompetes opportunities to grow grow backlog and generate better work and those two end markets certainly government seemed a little bit counter cyclical and their first price serves the certainly probably impacted by COVID-19ien small cap projects being pressured. So it took me Carlos observations the set things up as we look towards the 21 of them.

Sure well in energy and chemicals.

We didn't specifically mention that point Alan mentioned now the chemicals business is still very steady business for us and.

We don't expect to see the fine there.

In the energy and chemicals the companies I mean, the oil and gas business, we talked about so the discipline that clients are going to demonstrate so we expect the impact from the index.

The challenging area from a little while.

But with respect to government, we are very well positioned in the deal. We say for example, we've got the.

A week one of number of projects and some of those of being challenged the protest that point.

Pretty good about our position on those and we see the AG and TV opportunities and the government day.

And that's also true and out of the advanced technology and life Sciences, where we're actually working we're actually working on some of from where it could make its facilities as well as the.

The other pharmaceutical type of projects that that at the end of it we face.

I have a lot of opportunity right, well and again the bench and you mentioned mining I think mining at the a little bit later coming up but.

We're very bullish on mining as well.

Infrastructure, we the the find our that we're going to restrict our our bidding to jurisdictions where the.

I'm going to affect the case and execute projects the answers projects in the way that bear and from our contract lost into oil.

Attracted from general and we've been successful and of Texas is certainly one of the doesn't matter of several other states and mentioned in the past, where we've been able to.

The projects successfully.

Both the client and from the top right.

And follow up Carlos.

How do you guys feel about in general new skill going in the 21. It is some pretty big milestones can we anticipate on that front, whether it's a new project or you know more support on the of development for investment side.

Yes, that's the lots going on there, but a lot of let Alan I'll take that one.

You know Mike very.

Very good question I think the.

Several things have happened over the last the most.

Most of the sort of incredibly positive for the new school of business.

With all of the liver.

Number one we call us, but some of the at our CE approval of clearly a little bit of flow.

But the the the rough quite at the Corporation of U.S. announced.

Now the lifting their position or the lending for nuclear projects. The international that debt that has got a lot of the attention and as result of probably two fairly.

Good opportunities to part of the project here.

For the World.

The other the that happened is new we rolled out the $1.4 billion a war of graph awards for the first nuclear projects, new small modular reactors and or the right. Now that's part of it is you have from the drug of forward.

But we are talking with the at least two other clients with with the potential of little from projects coming up with employee equity Awards.

So the project side is starting to look good but also we're having very serious discussions with investors.

One of them into the equity side of the skillful.

Both sides of the equation are looking strong right now.

The finding is the issue of getting getting these projects on board as well as the.

Just with the board.

Taking a lot of our attention.

And then Alan I would think the the incoming administration with the net positive towards this I would think given the carbonization, but some of it would be of any observations.

No actually of the answer to that is yes the.

Just the state of the real scale really got its boost from started moving forward of the.

The bought a little story from a separate very low lease.

The only.

Yeah, we've seen over the last the the little girl, there's lots of low space the way it falls like form of before the call.

For the spoke of but we don't think that will change that all of a couple of things.

The book.

Thanks, guys.

Well now take our final question from Michael Feniger with Bank of America.

Hey, guys. Thanks for.

The squeezing the and I really appreciate it on the.

The cash balance of the 2 billion no is the impressive but it's.

Bought that level, even year to date, the cash from ops. It looks like the 140 from the unit upcoming year ago, even what some of the losses.

You had talked about it this year I guess anything we should be aware of debt.

Benefited from the this year that might reverse.

On the cash from ops side.

2021 and vote.

Question, I guess, if I could the cash balances and relatively stable over the past 12 months your backlog is under pressure and new orders.

The likelihood that the cash balance comes down gets drawn down from 2021 and the comp that you can walk down the <unk>.

Yeah I'll take the question.

Our cash balances the like kind of the function of a number of the.

The initiatives, we put into place at the least of which is from the the the the bidding principles and what is filling into the backlog and the cash that it's generating I think one.

Two I think the of the cost optimization program has been very very beneficial exactly instead of target of 100 million and.

The Vojin what that number is will be north of that number in terms of real cash savings through the year I.

I think the to the extent that I had mentioned earlier, Michael the that we are executing.

Executing our loss provision projects of more effectively and efficiently from new.

Weighted than they had anticipated back in September of all been benefits, but that I would call. This most of the cash generation that you're seeing is through organic.

The decisions and actions that the company is taking currently.

Understood and well.

When we talk about the Jamie's question earlier, the 3.1% margin like your new.

The actually don't think of higher quicker if we exclude some charges. So you mentioned, maybe four to five per second.

That's what we're thinking heading early into the 2020 that we should be more on the five per cent number and the can you just help me understand that what you are saying year to date.

How much has the LNG, Canada actually contributed to that to that number.

His margin be recognized above that GAAP that range of are you guys start to the about that probably there.

Maybe I'll answer it maybe holistically and and or we'll probably get into you know the the the.

The LNG she called the EUR question, maybe a little bit later in February when we talked about that the index really the that are driving the 3.1 per cent.

Sure Neely margins of them through the first nine months are some of the disclose killed it impacts we have a credit risk I'm on a kind of project in the in Mexico, and then we had a loss on a the on the transaction versus your floor, which we would consider to the.

The nonrecurring events at the end of the day. So if you normalize those out where we're closer to the 5% range.

So I would suggest.

That's probably a better a better number to to to utilize the moving forward.

Got it.

Very helpful from warm I Didnt price is rising and you guys mentioned no project target on execution. The last one of the quarters yet just following up on the question.

The question it sounds like the <unk>, a little bit more visibility on the impact of co of it for LNG, Canada I guess.

How many other projects out there right now that there are some new need for the resolution I understand that's kind of normal course of the business.

I don't know if this is a little bit more of them the normal course Smith.

With what you've got your speed and cause I guess im just trying to reconcile the really across the last two quarters of no big charges debt the outlook. The part of the pandemic impacting document execution could we went up in the middle of 2021 or on the 2021, one the vaccines out their economies on the yet.

There still are some litigation or or Tar does in any way you guys can kind of frame that for us and how to think about that in the timeline.

Yeah, I'll take that one.

In terms of setback in of.

Of course, but obviously the fixed price projects are the ones that we have kind of probably didn't in fact that are being negotiated with the client.

I don't think any any client is denying entitlement.

The client obviously, the negotiate with us in terms of.

The the amount of and as the scheduling Corp.

So it it's still a lot of we're working with the clients on some of these projects in the have already read some preliminary resolutions, which are favorable but we still have a number of them to be resolved and it's hard to resolve them because the impact of still ongoing in some case the Medicaid.

It can't that cash.

Great I can't tell you the magnitude, but I can tell you that debt.

It's obviously the recognized cost and schedule intact that.

We're working with the client to address in an equitable way.

Fair enough. Thanks, a lot.

That concludes todays question and answer session.

Mr. Hernandez, the time I will turn back the conference TIOPREM. The addition of my closing remarks.

Thank you operator, and thanks to all of the four participating on our call today.

This is my last time speaking with you at the O. of Fluor the chat.

Alan just the company has faced over the last 18 months.

From project write downs and internal investigation to of global pandemic.

I've been truly extraordinary.

I want to thank all of our stakeholders, our shareholders of clients our partners.

Of course of 45000 employees for sticking with us through this process.

Stronger belief I'm, leaving the company stronger and more resilient than when I was named CEO in May of 2019, as an investor I look forward to seeing the great things big things from fluids future.

In the meantime, I've been working closely with David to ensure a smooth transition of known day for many years.

He brings a unique combination of deep insight into fluor and an outsider's perspective.

It's really knows our company inside and out and I wish him all the best in his role.

We greatly appreciate your support of Florida.

Thank you.

This concludes today's call. Thank you for your participation you may now disconnect.