Q2 2023 Fluor Corporation Earnings Call
Good morning and welcome to floor's second quarter 2023 earnings conference call. Today's call is being recorded. At this time, all participants are in a listen-only mode. A question and answer session will follow management's presentation.
Good morning, and welcome to Fluor's second quarter 2023 earnings conference call. Today's call is being recorded at this time all participants are in a listen only mode. A question and answer session will follow management's presentation.
A replay of today's conference call will be available at approximately 1030 a.m. Eastern Time today accessible on the floor's website at investor.floor.com.
Replay of today's conference call will be available at approximately 10 30, a M. Eastern time today accessible on fluor's website at Investor Dot floor Dot com.
The web replay will be available for 30 days. A telephone replay will also be available for seven days through a registration link, also accessible on Flores website at investor.floor.com. At the time for open-air remarks, I would like to turn the call over to Jason Landkamer, head of investor relations. Please go ahead, Mr. Landkamer.
The web replay will be available for 30 days a telephone replay will also be available for seven days at through a registration link also accessible on fluor's website at investor Dot floor at Dot com.
At this time for opening remarks, I would like to turn the call over to Jason landscape, our head of Investor Relations. Please go ahead, Mr. Wang Kmart.
Thanks, Regina. Good morning and welcome to floors. 2023 second quarter earnings call David Constable floors Chairman and Chief Executive Officer and Joe Brennan floors Chief Financial Officer are with us today.
Thanks, Regina Good morning, and welcome to Florida, 2023, second quarter earnings call, David Constable Force, Chairman and Chief Executive Officer, and Joe Brennan <unk>, Chief Financial Officer are with us today.
Floor issued its second quarter earnings release earlier this morning and a slide presentation is posted on our website that we'll reference while making prepared remarks.
Or issued its second quarter earnings release earlier, this morning, and a slide presentation. That's posted on our website that we will reference while making prepared remarks.
Before getting threaded, I would like to refer you to our safe harbor note regarding forward-looking statements, which are summarized on slide two. During today's presentation, we will be making forward-looking statements which reflect our current analysis of existing trends and information.
Before getting started I would like to refer you to our safe Harbor note regarding forward looking statements, which is summarized on slide two.
During today's presentation, we will be making forward looking statements, which reflect our current analysis of existing trends and information.
There's an inherent risk that actual results and experience could differ materially.
There is an inherent risk that actual results and experience could differ materially.
You can find a discussion of our risk factors, which could potentially contribute to such differences in our 2022 Form 10-K and our Form 10-Q , which was filed earlier today.
You can find a discussion of our risk factors, which could potentially contribute to such differences in our 2022 Form 10-K, and our Form 10-Q, which was filed earlier today.
During the call we will discuss certain non-GAAP financial measures. Reconciliations of these amounts to the comparable GAAP measures are reflected in our earnings release and posted in the investor relations section of our website at investor.floor.com.
During the call, we will discuss certain non-GAAP financial measures.
Conciliation. So these amounts to the comparable GAAP measures are reflected in our earnings release.
Posted in the Investor Relations section of our website at investor that floor Dot com.
I'll now turn the call over to David Constable, floor's chairman and chief executive officer. David. Thank you, Jason. Good morning, everyone. Thank you for joining us.
I'll now turn the call over to David Constable Force, Chairman and Chief Executive Officer, David.
Well, thank you Jason.
Good morning, everyone. Thank you for joining us today.
Please turn to slide three.
During the second quarter, I visited our new Delhi office and hosted a town hall meeting that was attended by over 1,100 of our floor colleagues.
During the second quarter I visited our new Delhi office and.
A town Hall meeting that was attended by over 1100 of our floor colleagues.
It was great to see the vibrancy and enthusiasm of our team who will continue to play a critical role in supporting our current projects, as well as our significant pipeline of growth opportunities worldwide.
Great to see the vibrancy and enthusiasm.
Of our team who will continue to play a critical role in supporting our current projects.
As well as our significant pipeline of growth opportunities worldwide.
While in India, I also met with the CEO of Tech Mahindra to sign a strategic partnership agreement.
While in India I also met with the CEO of Tech Mahindra to sign a strategic partnership agreement.
Check Mahindra is a leading provider of digital transformation, consulting, and business re-engineering service.
Tech Mahindra is a leading provider of digital transformation consulting and business reengineering services.
Under the partnership both Flour and Tech Mahindra will combine our respective expertise to help support the growing client demand for digital handovers.
Under the partnership both floor and tech Mahindra will combine our respective expertise to help support the growing client demand for digital handovers.
The seamless integration and interoperability of data is critical to support professional services teams in driving successful project delivery and optimizing life cycle operations and maintenance costs.
The seamless integration and interoperability of data is critical to support professional services teams in driving successful project delivery.
And optimizing lifecycle operations and maintenance costs.
I'm looking forward to providing updates on this strategic partnership in future quarters. Now let's turn to slide four.
I'm looking forward to providing updates on this strategic partnership in future quarters.
Now, let's turn to slide four.
Revenue for the second quarter was $3 9 billion.
Representing our second straight quarter of 20% growth over the prior year.
Representing our second straight quarter of 20% growth over the prior year.
Our increase in revenue was led by energy solutions as execution activities accelerate on refinery products in Mexico.
Our increase in revenue was led by energy solutions as execution activities accelerate on refinery projects in Mexico.
mid-scale LNG projects, and recently awarded Chemicals Projects in China. New awards.
Mid scale LNG projects and recently awarded chemicals projects in China.
New awards for the quarter were $3 7 billion.
and on track relative to our full year plan of a book to burn ratio of one or greater.
And on track relative to our full year plan of a book to burn ratio of one or greater.
New awards were 70% reimbursable, and our total backlog is now 25.5 billion, of which 64% is reimbursable.
New awards were 70% Reimbursable.
And our total backlog is now $25 5 billion.
Of which 64% is reimbursable.
Margins on new wars continue to be strong, coming in over 200 basis points above our total backlog margin. One metric turns one adaptable lower Music, Fallingacker Top,
Margins on New awards continue to be strong.
Coming in over 200 basis points above our total backlog margin.
Our optimism for the future of floor is further supported by a robust prospect pipeline.
Our optimism for the future of Florida is further supported by a robust prospect pipeline.
We are currently working on or have recently completed feed and study packages that represent an estimated $300 billion of installed cost, high quality new award prospects.
We are currently working on or have recently completed.
Feed and study packages that represent an estimated $300 billion.
Of installed cost high quality New award prospects.
In the near term, we are tracking key EPC and EPCM prospects totaling approximately $49 billion across the company.
In the near term, we are tracking key EPC and <unk> prospects totaling approximately $49 billion across the company.
Moving to our business segments, Please turn to slide six.
Urban Solutions reported a $76 million profit in the second quarter.
Urban solutions reported a $76 million profit in the second quarter.
Results included a positive forecast adjustment related to a legacy infrastructure project.
Results included a positive forecast adjustment related to a legacy infrastructure project.
As well as increased execution activities on newly awarded projects.
As well as increased execution activities on newly awarded projects.
New words for the quarter were $2.3 billion and any backlog is now $11.7 billion and 58% reimbursable.
New awards for the quarter were $2 3 billion.
And any backlog is now $11 7 billion and 58% Reimbursable.
Please move to slide seven.
In mining and metals, we are actively working on a number of front-end studies supporting the advancement of critical minerals production, including two pre-feasibility studies for Lithium developments in North America, another Lithium-Producene feasibility study in Europe , and a metals recycling facility in Europe .
In mining and metals, we are actively working on a number of front end studies supporting the advancement of critical minerals production.
Including two pre feasibility studies for lithium developments in North America.
Another lithium project feasibility study in Europe in our metals recycling facility in Europe .
We also recently completed engineering services on a major new steel mill in the United States using electric arc furnace technology and have two additional electric arc furnace projects entering the feasibility study and execution phases.
We also recently completed engineering services on a major new steel mill in the United States using electric arc furnace technology.
And have two additional electric arc furnace projects entering the feasibility study and execution phases.
These are just three projects in Green Steel technology, which we consider to be a strategic growth market for floor.
These are just three projects and Greenfield technology, which we consider to be a strategic growth market for fluor.
Near-term prospects in this segment include projects relating to potash, lithium, and copper.
Near term prospects in this segment include projects willing to potash lithium and.
In copper.
Moving to slide eight.
Okay.
Our advanced technologies and life sciences business continues to win new work in an expanding, reimbursable growth market.
Our advanced technologies and life Sciences business continues to win new work and an expanding reimbursable growth market.
During the quarter, we announced that we received a $574 million award for the first phase of a new life sciences production facility in the central US.
During the quarter, we announced that we received a $574 million award for the first phase of our new life Sciences production facility in the Central U S.
We also want a $487 million expansion for an existing biotech facility with a key client in Denmark.
We also won a $487 million expansion for an existing biotech facility with a key client in Denmark.
Looking ahead, we are well positioned to expand our existing portfolio of semiconductor work, particularly in the U.S.
Looking ahead, we are well positioned to expand our existing portfolio of semiconductor work, particularly in the U S.
I'm also pleased to report that our portfolio of infrastructure projects
I'm also pleased to report that our portfolio of infrastructure projects.
including legacy projects, met our forecast expectations for the quarter.
Including legacy projects met our forecast expectations for the quarter.
Specific to our legacy infrastructure portfolio, we are starting to see some very positive momentum from our efforts last fall.
Specific to our legacy infrastructure portfolio.
We're starting to see some very positive momentum from our efforts last fall.
This included strengthening leadership and execution at the project and management levels, as well as working effectively with our joint venture partners to align our strategy to manage claims.
This included strengthening leadership and execution of the project and management levels as well as working effectively with our joint venture partners to align our strategy to manage claims.
On the Gordie Howe project, FLUR along with our partners have had a number of successful and productive conversations with the client as it relates to cost and schedule relief, including costs related to COVID.
On the Gordie Howe project, Florida, along with our partners have had a number of successful and productive conversations with the clients as it relates to cost and schedule relief.
Including costs related to Covid.
The negotiations are progressing with the client, which should result in a positive path forward by the end of the year.
Negotiations are progressing with the client, which should result in a positive path forward by the end of the year.
Finally, during the quarter, we booked a $700 million award for the I-35 South project in San Antonio for the Texas Department of Transportation.
Finally during the quarter, we booked a $700 million award for the F 35 sales project in San Antonio for the Texas Department of Transportation.
This project is a crucial step in our ongoing efforts to enhance the state's transportation infrastructure and to further support the demands of population growth and business expansion in one of America's most rapidly developing regions.
This project is a crucial step in our ongoing efforts to enhance the state's transportation infrastructure and to further support the demands of population growth and business expansion in one of America's most rapidly developing regions.
Moving on to slide nine.
Mission Solutions reported segment profit of $40 million for the second quarter, compared to $28 million a year ago.
Mission solutions reported segment profit of $40 million for the second quarter compared to $28 million a year ago.
Results for the Corps reflect increased execution activities on a European logistics support project for the Army and our ongoing work to support New Scale's carbon-free power project.
Results for the quarter reflect increased execution activities on a European logistics support project for the army and our ongoing work to support new scale carbon free power project.
Regarding the protest of our winning bid for the Hanford tanks integrated disposition contract, we learned that the judge has set aside the award and sent it back to the DOE for corrective action.
Regarding the protest of our winning bid for the Hanford tanks integrated disposition contract.
We learned that the judge has set aside the award and send it back to the Doe for corrective action.
While we await the department's path forward on the acquisition, the incumbent has been extended on the contract for the time being.
While we await the department's path forward on the acquisition the incumbent has been extended on the contract for the time being.
Floor continues to be well positioned for Hanford and other future nuclear remediation opportunities with the DOE.
<unk> continues to be well positioned for Hanford and other future nuclear remediation opportunities with the Doe.
Looking ahead, Q3 is shaping up to be an exciting corner for this group.
Looking ahead Q3 is shaping up to be an exciting quarter for this group.
We recently announced that our joint venture with Amentum was successful in securing the contract for the Portsmouth Gaseous Diffusion Plant Decontamination and Decommissioning contract.
We recently announced that our joint venture with momentum was successful in securing the contract for the Portsmouth gaseous diffusion plant decontamination and decommissioning contracts.
This contract has an estimated value of $5.9 billion over a 10-year ordering period and it includes potential task orders for up to an additional five years.
This contract has an estimated value of $5 $9 billion over a 10 year ordering period and includes potential task orders for up to an additional five years.
We expect to book our initial annual portion of this contract in the third quarter.
We expect to book our initial annual portion of this contract in the third quarter.
Finally, the requester proposal for Pantex was recently issued.
Finally, the request for proposal for Pantex was recently issued.
Before we're successful in the original bid, and it's currently working on this RFP package, which we expect is...
The floor was successful in the original bid and is currently working on this RFP package, which.
Which we expect to submit in September .
The revised RFP includes a five-year base period with three five-year options valued up to $30 billion over 20 years.
The revised RFP includes a five year base period.
With three five year options valued up to $30 billion over 20 years.
Moving to energy solutions, Please turn to slide 10.
Segment profit improved to $89 million from $65 million a year ago.
Segment profit improved to $89 million from $65 million a year ago.
Results reflect the ramp up of execution activities on refinery projects in Mexico through our Eco-Fluenzoin Venture.
Results reflect the ramp up of execution activities on refinery projects in Mexico through our <unk> joint venture.
We also had positive forecast adjustments totaling $74 million on two projects.
We also had positive forecast adjustments totaling $74 million on two projects.
Q2 results also included a $34 million charge for cost growth and schedule extension on a large upstream legacy project.
Q2 results also included a $34 million charge for cost growth and schedule extension on a large upstream legacy project.
During the quarter, this project experienced a number of challenges arising from lower than anticipated subcontractor productivity, unexpected discovery work, and delays of weather, and activist protests. Our new estimated completion date.
During the quarter. This project experienced a number of challenges arising from lower than anticipated sub contractor productivity unexpected discovery work and delays from weather and activist protests.
Our new estimated completion date is December .
New awards for the quarter totaled $753 million and included an APC contractor, Mitsubishi's Ethylene Vinyl alcohol copolymer facility in the UK, as well as incremental awards on existing LNG projects.
New awards for the quarter totaled $753 million and included an eight EPC contractor Mitsubishi is ethylene vinyl alcohol copolymer facility in the U K as.
As well as incremental awards on existing LNG projects.
Moving to slide 11.
During the quarter we had a number of accomplishments at the LNG Canada Project.
During the quarter, we had a number of accomplishments at the LNG, Canada project.
Last month we announced that the 215th and final module was delivered to the site.
Last month, we announced that the 215 and final module was delivered to the site.
This represents a significant milestone for the project and for the teams that led our fabrication efforts.
This represents a significant milestone for the project and for the teams that let our fabrication efforts.
Yes.
With the project at 85% complete overall, our efforts now turn to module installation and hookup in advance of pre-commissioning and commissioning activities that we'll commence next year.
With a project at 85% complete overall, our efforts now turn to module installation and hook up in advance of pre commissioning and commissioning activities will commence next year.
In past earning calls, we discussed our collaborative conversations with the client. There's a fabrication and construction cost. We continued our successful resolution.
In past, earning calls we discussed our collaborative conversations with the clients related to fabrication and construction costs.
We continue to have successful resolution.
The ongoing variation orders.
I'm also pleased to report that as a result of the tremendous effort by our project team, we continue to execute LNGC for our current expectations.
I'm also pleased to report that as a result of the tremendous effort by our project team, we continue to execute LNG fee per our current expectations.
Regarding the phase two expansion.
LNG Canada's five joint venture participants continue to evaluate the timeline and scope.
LNG, Canada is five joint venture participants continue to evaluate the timeline and scope.
For the balance of 2023, we are participating in some significant new awards.
For the balance of 2023, we.
We are anticipating some significant new awards.
This includes a multi-billion dollar full EPCM award for Dow's path to zero ETHLIN and DRIVAS chemical complex in Canada. The $1.4 billion Selena Cruz Refinery in Mexico, nuclear engineering work-
This includes a multibillion dollar full EPC award for Dallas path to zero ethylene and derivative chemical complex in Canada.
The $1 4 billion Salina Cruz refinery in Mexico.
Nuclear engineering work in Romania.
And a large chemical project in Europe .
Before I turn the call over to Joe, I want to note that our results and accomplishments this quarter reflect notable progress against our corporate strategy and is indicative of our
Before I turn the call over to Joe I want to note that our results and accomplishments this quarter.
To reflect notable progress against our corporate strategy.
And is indicative of our ongoing transformation.
It's one of the leading, engineering and construction companies in the world.
One of the leading engineering and construction companies in the world.
With that, let me turn the call over to Joe for the financial update, Joe.
With that let me turn the call over to Joe for the financial update Joe.
Thanks, David and good morning everyone. Today I will review our results for the second quarter, provide an update on divestitures and go over key financial outlook assumptions that support our guidance. Please turn to slide 13.
Thanks, David and good morning, everyone.
I will review our results for the second quarter provide an update on divestitures and go over our key financial outlook assumptions that support our guidance. Please turn to slide 13.
As David mentioned, for the second quarter of 2023, revenue of $3.9 billion came in as expected, and represented a 20% increase from last year.
As David mentioned for the second quarter of 2023 revenue of $3 $9 billion came in as expected and represented a 20% increase from last year.
Revenue for the quarter was driven by the ramp of execution activities on several recently awarded projects and energy solutions, urban solutions and mission solutions.
Revenue for the quarter was driven by the ramp up of execution activities on several recently awarded projects in energy solutions Urban solutions and mission solutions. This was partially offset by declines in the volume of execution activities for projects, which were completed or nearing completion.
This was partially offset by declines in the volume of execution activities for projects which were completed or nearing completion.
Our consolidated segment profit for the quarter was $191 million. This performance was driven by higher execution activity on new projects, as well as positive forecast adjustments on two energy solutions projects, and a positive forecast adjustment on a legacy infrastructure project.
Our consolidated segment profit for the quarter was $191 million.
This performance was driven by higher execution activity on new projects as well as positive forecast adjustments on two energy solutions projects and a positive forecast adjustment on a legacy infrastructure project.
Adjusted EBITDA for the second quarter was $181 million compared to $68 million a year ago. Our Adjusted EPS was 76 cents compared to 15 cents in Q2 of 2022.
Adjusted EBITDA for the second quarter was $181 million compared to $68 million a year ago.
Our adjusted EPS was <unk> 76, compared $2 15 in Q2 of 2022.
Our adjusted results for the quarter excludes $52 million for the income effects of FX and the embedded derivative in Mexico. G&A expenses for the quarter were $60 million, up slightly from $45 million a year ago. This was driven by higher performance-based compensation that is expected to be paid in Q1 of 2024.
Our adjusted results for the quarter excludes $52 million for the income effects of FX and the embedded derivative in Mexico G&A.
G&A expenses for the quarter were $60 million up slightly from $45 million a year ago. This was driven higher by higher performance based compensation that is expected to be paid in Q1 of 2024.
Net interest income for the quarter was $37 million compared to $41 million last quarter and an expense of $1 million a year ago. Since our outstanding debt is at a fixed rate, I expect we will continue to generate positive net interest income throughout the year with prevailing interest rates on our deposit.
Net interest income for the quarter was $37 million compared to $41 million last quarter, and an expense of $1 million a year ago. Since our outstanding debt is at a fixed rate I expect we will continue to generate positive net interest income throughout the year with prevailing interest rates on our deposits.
New awards of $3.7 billion in the quarter drove our ending backlog balance to $25.5 billion.
Awards of $3 7 billion in the quarter drove our ending backlog balance to $25 5 billion.
Based on our current prospect pipeline, we anticipate new ords will roughly approximate our revenue burn for the full year, moving to slide 14.
Based on our current prospect pipeline, we anticipate new awards were roughly approximate our revenue burn for the full year moving to slide 14.
Our cash and marketable securities balance for the quarter was $2.1 billion. This excludes cash held by new scale. Operating cash flow for the quarter was a positive $52 million.
Our cash and marketable securities balance for the quarter was $2 1 billion. This excludes cash held by new scale operating cash flow for the quarter was a positive $62 million. We expect this positive cash flow trend to continue for the balance of 2023, which includes approximately $200 million for legacy project <unk>.
We expect this positive cash flow trend to continue for the balance of 2023, which includes approximately $200 million for legacy project cash needs this year. We anticipate legacy project cash needs will be approximately $250 million in 2024.
Cash needs for this year, we anticipate legacy project cash needs will be approximately $250 million in 2024.
Finally, I'm pleased to say that during the quarter the DOJ has informed us that it has closed its investigation of the company and does not intend to bring charges.
Finally, I'm pleased to say that during the quarter. The Doj has informed us that it has closed its investigation of the company and does not intend to bring charges.
Please turn to slide 16.
We are raising our 2023 adjusted earnings per share guidance to a range of $2 to $2.30 and our adjusted EBITDA guidance to a range of $500,000,000 to $600,000.
We are raising our 2023 adjusted earnings per share guidance to a range of $2 to $2 30.
And our adjusted EBITDA guidance to a range of $500 million to $600 million.
Our assumptions for 2023 include revenue growth of approximately 10 to 15 percent. Adjusted GNA expense of approximately $45 million per quarter, an ineffective tax rate of approximately 40 percent. This may vary depending on the countries in which revenue is generated. We expect tax rates to moderate as revenue and our tax advantage locations start to increase.
Our assumptions for 2023 include revenue growth of approximately 10% to 15% adjusted G&A expense of approximately $45 million per quarter and an effective tax rate of approximately 40%. This may vary depending on the countries in which revenue is generated we expect tax rates to moderate as revenue in our.
Tax advantaged locations start to increase.
Our revised expectations for 2023 full year segment margins are approximately 6% in energy solutions, approximately 3% in urban solutions, and approximately 4% in mission solutions.
Our revised expectations for 2023 full year segment margins are approximately 6% in energy solutions, approximately 3% and urban solutions and approximately 4% in mission solutions. Finally, we also reaffirm our 2026 adjusted EBITDA guidance of $800 million to $950 million as <unk>.
Finally, we also reaffirm our 2026 adjusted EBITDA guidance of $800 to $950 million, as indicated in our earnings release this morning. Operator, we are now ready for our first question.
Indicated in our earnings release this morning.
Operator, we are now ready for our first question.
And at this time, to ask a question as a reminder, please press star one. Our first question will come from the line of Jamie Cook with Credit Suisse. Please go ahead.
And at this time to ask a question as a reminder, please press star one our first question will come from the line of Jamie Cook with Credit Suisse. Please go ahead.
Hi, good morning.
I guess my first question, David, or Joe, as I think about your guidance, the increasing guidance that you provided today, and what it implies for the back half of the year, I think it implies like, you know, at the high end 75 cents a quarter, so let's say if you...
I guess my first question David.
As I think about your guidance the increase in guidance that you provided today and what that implies for the back half of the year I think it implies like at the high end 75 quarter, So let Dave here.
you know, annualize that. It's about three bucks in earnings power. And if you annualize your eep here.
Annualize that it's about three Bucks and earnings tower, and if you annualize year each year.
your back half EBITDA, just the EBITDA it implies like 800 million in EBITDA. So I'm just trying to understand what that means for 2024. Is that a good base that we can think about or are there projects rolling off in 2023?
Back half EBITDA adjusted EBITDA, it implies like $800 million of EBITDA.
Im just trying to understand what that means for 2024 is that a good base that we can think about or are there projects rolling off in 2023.
you know that would that would imply that that's not a good sort of run rate to think about because that just implies the earnings power for 2024 to re-bucks the 800 million in the is pretty
That would that would imply that that's not a good sort of run rate to think about because that just implied the earnings power for 2024, three bucks or $800 million in EBITDA is pretty substantial and so just any color on that thank you or if I'm thinking about that incorrectly.
substantial and so just any color on that. Thank you or how if I'm thinking about that incorrectly just the orange powers green or I guess
The earnings power is greater I guess than I would've thought.
Yeah, thanks for the question, Jamie. I think what we've leaned into the last few quarters is that we have been making progress on some of our activities in our infrastructure or legacy kind of business is relative to how we recognize cost. And then as we look to claw back some of our entitlements through the contract, some of that is flowing through.
Yeah. Thanks, Thanks for the question Jami I think what we've leaned into the last few quarters is that we have been making progress on some of our activities and our infrastructure of legacy kind of businesses relative to how we recognize cost and then as we look to claw back some of our entitlements through the contra.
Tracked some of that is flowing through the.
The Q2 numbers, but I would suggest that that run rate that we're posting on an adjusted EBITDA basis of 181 million is probably overstated slightly, you know if I were thinking about run rates as we continue to onboard new backlog Is in that 140 to 160 range?
The Q2 numbers, but I would suggest that that run rate that we're posting on an adjusted EBITDA basis of $181 million is probably overstated slightly.
If I were thinking about run rates as we continue to onboard new backlog is in that $1 40 to $1 60 range and with that we would expect to see a ramp up from from that as your baseline. So I think I would think about it that way at least for 2023.
And with that, we would expect to see a ramp up from that is your baseline. So I think I would think about it that way at least for 2023.
And again, as we onboard the new backlog that we're forecasting for the back half of the year, we should start to see that trend in a more positive direction moving forward.
And again as we onboard.
The new backlog that we're forecasting for the back half of the year, we should start to see that trend in a more positive direction moving forward.
Okay, and then just my second question, just a sound like new war prospects for the back half of the year. You know, also seem pretty good. So just Dave, how are you thinking about backlog? You know, as we exit the year and then can you get some color? I know the bookings are...
Okay and then just my second question just it sounds like the award prospects for the back half of the year.
<unk> also seen pretty good so just.
Dave how are you thinking about backlog as we exit the year and then can you give some color I know that the.
The bookings are.
The margins and the bookings have been improving. Can you just talk about the terms and conditions of the projects that you're sort of looking at and how we should think about awards going into backlog relics, the margins on awards going into backlog relative to where it's just today, just again, trying to understand what the margin power is for 2024. Thank you.
The margins in the bookings have been improving can you just talk about the terms and conditions of the projects that youre sort of looking at and how we should think about.
Awards going into backlog relative to the margins on awards going into backlog relative to where it is today just again trying to understand what the margin power for 2024. Thank you.
Good morning, Jamie. We've been really pleased with our ability to increase booking margins on on Reimbursable Work.
Good morning, Jamie.
We've been.
Really pleased with our ability to increase booking margins.
On Reimbursable work I guess thats the.
The kind of the headline is that all the majority of our work, I think we've got 84% of our prospects right now are reimbursable and they're coming in higher than our expectations, higher than our planned target margins. As I said, we...
The kind of the headline is that the majority of our work I think we're about 84% of our prospects right now reimbursable and they are coming in higher than our expectations higher than our planned target margins as I said we've.
I think we put in the backlog at 200 basis points above what's in there now in second quarter.
And I think we put in.
In the backlog at 200 basis points above what's in there now in second quarter. So as we continue to do that.
So as we continue to do that, the healthy backlog will continue to...
The healthy backlog will continue to to give us more certainty and predictability as we work work that.
to give us more certainty and predictability as we work that backlog off. And we hope to be at a book to burn through the year of one or slightly above. And that will kind of give you an idea where we'll be at at the end of the year for backlog.
That backlog off and.
Yes.
Hope to be at.
Book to burn through the year of one or slightly above and that will kind of gives you an idea of where we'll be at the end of the year for backlog.
But not just on revenue, I think what's important here is that gross margin that's coming in higher than expected is also being executed.
But.
Not just on revenue I think what's important here is that gross margin thats coming in higher than expected is also being executed.
We are executing. We had this discussion with our risk committee at the board meeting this week.
We're executing we had this discussion with the with our risk Committee at the Board meeting this week since 2020, those those up.
Since 2020, those projects have come into backlog are executing at 114% of asphalt. So we've got some great earnings power in our execution. It's all about execution excellence. And when you've got that behind you, right? And.
Projects that have come into backlog are executing at 114% of our salt. So we've got some some great earnings power in our execution.
It's all about execution excellence and when you've got that behind you.
And.
We just really think that it's gonna support that earnings power for us going forward and increase shareholder value for us. Could I, maybe if I can just add to that, to that, to Jamie, if you look at what we've done with our operating margin guidance.
We just really think that it's going to support that debt.
That earnings power for us going forward and increase shareholder value for us.
Maybe if I could just add to that too Jamie if you look at what we've done with our operating margin guidance for the quarter. We have we have bumped our energy solutions in our mission solutions numbers for the.
for the quarter. We have bumped our energy solutions and our mission solutions numbers.
period. So we are starting to see that and it is starting to demonstrate in our quarterly quarterly postings here. So we're starting to see that flow through the back log in a very positive way, which is considering us to re-address our margin guidance. Thanks Jamie.
For the period. So we are starting to see that and it is starting to demonstrate and in our quarterly quarterly postings here. So we're starting to see that flow through the backlog in a very positive way, which is which is <unk>.
<unk> us to readdress, our margin guidance. Thanks, Jamie.
Thank you.
Your next question comes from the line of Andy Whitman with Beard. Please go ahead.
Your next question comes from the line of Andy Wittmann with Baird. Please go ahead.
Well, great. Thanks excuse me.
Thank you for taking my question this morning. I guess I wanted to ask, on the urban solutions, there was a positive adjustment on the legacy project. Good to see that you're recuperating some of those. And I do think that the balance on some of those legacy projects is substantial. So I guess maybe my question is, as it relates to your guidance, Up
Thank you for taking my question this morning.
I wanted to ask.
On the urban solutions. There was there was a positive adjustment on a legacy project to.
Good to see that.
You are recuperating some of those in.
I do think that the balance on some of those legacy projects.
<unk> is substantial so I guess, maybe my questions.
Is.
As it relates to your guidance.
for the rest of this year. Are you expecting more positive adjustments like the one you saw in the quarter to be in that guidance range or is the guidance that you're giving kind of clean of any of these claims resolution changes that
For the rest of this year are you are you expecting.
More positive adjustments like the one you saw in the quarter.
In that guidance Rangers, whereas the guidance that youre, giving kind of clean of any of these claims resolution changes that.
You were able to accomplish this quarter. And maybe just to be more specific, could you just talk about which project you're able to get this positive adjustment on during the quarter?
You were able to accomplish this quarter and maybe it's just a little more specific could you just talk about which projects you are able to get this positive adjustment on during the quarter.
Yeah, no, thank you for the question. For the year, we have not factored in any additional activity relative to planes until we get closer to better assessment on that. So, what you're looking at relative to our guidance is based on Q2, Q1 and Q2 actuals, and then our normal run rate from an outlook basis moving forward.
Yes, no. Thank you for the question.
For the year.
We have not factored in any additional.
Activity relative to claims until we get closer to better assessment on that so what you are looking at relative to our guidance is based on Q2, Q1, and Q2 actuals and then our normal run rate from an outlook basis moving forward.
So I think that's it. Need your second question around.
So I think Thats your second question around.
So which project got the benefit?
Sorry, which project.
Project got the benefit.
yeah i think we're uh... work we're we're gonna hold off uh... naming that client right now uh... and uh... will probably have some some additional color forty in the next quarter
Yes, I think we're we're we're going to hold off naming that client right now.
And we'll probably have some some additional color for you in the next quarter.
Okay, then Joe, just kind of follow up on your last answer to Jamie, kind of mentioned the profit margin.
Okay, and then Joe Joe just kind of a follow up on your last answer to Jamie kind of mentioned that the profit margins.
picked up in two of your segments. I guess, you know, some of, you're giving annual guidance here and some of the performance in the second quarter because of these positive change orders. I guess the question for me is on a prospective basis, meaning for the rest of the second half of this year, which margins are up.
Picked up and in two of your segments I guess.
Some of you give me annual Youre, giving annual guidance here and some of the performance in the second quarter was pretty good because of these positive change orders, but I guess the question for me is on a prospective basis, meaning for the rest of the second half of this year, which margins are up versus prior expectations rather than.
versus prior expectations rather than the benefit from the performance in the second quarter, just to make that a little bit more clear.
The benefit from the performance in this in the second quarter, just to make that a little bit more clear.
Okay.
Well, I guess maybe let me understand your question a little bit better. Are you talking about how we're upping our guidance within energy solutions from the five and a half to six percent of what's driving that? Yeah, I mean, you're giving annual segment margin guidance, which is fine.
Well I guess, let me.
Maybe let me understand your question a little bit better are you talking about how.
How we're upping our guidance within energy solutions from leads from the five 5% to 6% and what's driving that I guess is yes.
You get Youre, giving annual segment margin guidance, which is fine but.
But I just I'm trying to understand how much of the increase in margin guidance was from performance in the second quarter Versus an improved outlook for the second half of the year versus your prior I'm sorry. Okay. I understand the question a little bit I think they're symmetry and what we're laying out relative to how the performance within energy solutions and mission solutions So I would expect this not to be a 2023 activity. I would see this
But I just I'm trying to understand how much of the increase in margin guidance was for performance in the second quarter versus an improved outlook for the second half of the year versus your prior I'm sorry, Okay. I understand the question a little bit I think there's symmetry and what we're laying out relative to how the performance within energy solutions in mission solutions.
<unk>. So I would expect this not to be a 2023 activity I would see that is having some impact into 'twenty four and beyond as we say in base sorry, good alright, as we've discussed on many calls R.
having some impact into 24 beyond. Well, as we discussed on many calls are...
our range for the planning period, you know, we first came out with our strategy in 2021, on our range on margins was four to six percent, right? And we, you know, it looks like we're gonna be at that and near the higher end of that range, three, 24, and then on into 26.
Our range for the for the planning period, when we first came out with our strategy in 2021, our range on margins was 4% to 6% rate and we.
It looks like we're going to be at that end near the higher end of that range through 24, and then on into 'twenty six at.
at the upper end. Yeah, and we're seeing this is underpin by the improved margins that we're putting into backlog relative to our plan. So I think that's all kind of playing into this improved margin outlook moving forward beyond the 2023 timeframe. Well, and also that execution I talked about just a few years ago, is that we're asking you about asphalt. Yeah, a lot of.
At the upper end, where we're seeing this is underpinned by the improved margins that we're putting into backlog relative to our plan. So I think thats all kind of playing into this improved margin outlook moving forward beyond the 2023 time frame and also that execution I talked about just a few months ago is that we are executing above vessel, we have a lot of factors there.
Okay, that's clear. Thank you very much. Have a good day. Thanks Andy.
Yeah, Okay. That's clear. Thank you very much have a good day. Thanks, Andy Thank you.
Your next question comes from line of Michael Dutas with vertical research. Please go ahead.
Your next question comes from the line of Michael Dudas with vertical research. Please go ahead.
Morning Jason Joe David. Good morning Michael.
Good morning, Jason Joe, Dave, David and Michael Good morning, Michael.
Joe maybe you could share with us your updated thoughts.
Joe, maybe you could share with us your updated thoughts on financial profile on the balance sheet.
Financial profile of the balance sheet.
relative to the 2024 notes and maybe an update on new scale.
Relative to the 2024 notes and maybe an update on new scale would be helpful.
Yeah, thanks Mike. We're, we have signaled over the last few quarters. We're going to be addressing the 24s. That is something that we plan on doing here, kicking off towards the last half of 2023 and into 2024.
Yes, Thanks, Mike.
We have signaled over the last few quarters, we're going to be addressing the 20 fours that is something that we plan on doing here kicking off towards the last half of 2023 and into 2024.
So our plans are still to address the 24s. And in terms of new scale, we continue the discussions around the monetization.
So we have our plans are still too to address the 20 fours and in terms of new scale. We continue the discussions around the monetization theyre going well, we would expect to have.
They are going well. We would expect to have additional information to share with this audience towards the end of the year, December or January .
Additional information to share with this audience towards the end of the year December January timeframe.
As you're looking at the 300 billion worth of front end or FID of a front end design engineer.
Appreciate that thank you and David.
As you are looking at the 300 billion worth seeing.
And then design engineering.
Work.
No.
Can you maybe share a little bit of this? Is it across the board? What areas seem to be picking your client's interest more to get you involved? And I assume energy transition, and we think of lithium, even I guess the doubt project could fit into that. Is that you get anticipate being step function over the next 12 years of those types of pressures coming in? And is that going to allow for maybe a factor of better margin performance given what you guys are doing on the report?
Can you maybe share a little bit is it across the board what areas seem to be peaking your clients and see some more of that.
Get you involved and as an energy transition and you think of lithium you mean, I guess Patrick could fit into that.
Do you anticipate being a step function over the next couple of years and those types of patients coming in and is that going to allow for DBA.
We will have better margin performance given what you guys are doing on the productivity impossible.
Agamori Michael. Yeah, you've you're spot on on energy transition, right?
Hey, good morning, Michael Yes.
Slot on energy transition right.
You know, of that 300 billion, we think after analyzing it.
Of that 300 billion.
We think that after analyzing it.
Solid prospects are about 160 billion of that 300 so
Solid prospects are about $160 billion of that 300, so we.
you see 160 billion is very likely going forward. And a lot of it sits in the energy transition space. Just to give you an example of.
We see 160 billion is very likely going forward.
And.
A lot of it sits in the energy transition space.
Just to give you an example of.
No.
The inflation reduction act and the carbon with.
carbon credits that flow through that, the IRA, we're seeing significant activity.
With carbon credits.
Flow through that's the IRI, we're seeing significant.
Activity.
in our carbon capture, you know, in our production of fuels energy solutions business line.
In our carbon capture.
In our production fuels energy solutions business line.
I think we've got 30 projects on the go or at some, you know, mostly front end work, a few moving further on into EPC. So that's important, like you said, lithium as well. So energy transition is going to feature quite a bit. I think...
I think we've got 30 30 projects on the go or at <unk>.
Mostly front end work a few moving further on into EPC. So that's that's important and like you said lithium as well so energy transition is going to feature.
Quite a bit.
<unk>.
They are about 28%. If you look at the total work we're chasing, energy transitions about 28% of that. We're looking for about almost three billion and energy transition awards in Q3. And like you said, Dow would feature because it is a path to zero program.
They are about 28% if you look at the total.
Work, we're chasing energy transition is about 20% 28% of that.
We're looking for about almost <unk> 3 billion in energy transition awards in Q3, and like you said Dow with feature because it is a path and a path to zero program.
But you also in those numbers see mining and metals feature significantly in the 160 billion. The downstream production fuels again, a lot of it energy transition. LNG is in there. And the biggest portion, as I look at it here, is chemicals.
But you also in those numbers see.
Mining and metals feature significantly.
In the 160 billion.
The downstream production fuels again, a lot of an energy transition.
LNG is in there and the biggest portion.
As I look at it here is chemicals.
So we're seeing a lot of activity in chemicals with across the board, including recycling of plastics and the whole ethylene of value chain. So pretty broad across those prospects. And
So we're seeing a lot of activity in chemicals with.
Across the board, including recycling.
Plastics.
And the whole ethylene value chain so.
Pretty broad across across those.
Those prospects.
And.
about, like I said, about 49 billion of full EPC, EPCM prospects that will be chasing in the next.
About like I said about $49 billion.
A full EPC PCM our prosper.
Prospects that will be chasing in the next.
next 18 months and obviously that gets supplemented by our mission solutions work which is the department of energy department of defense and the intelligence agencies all those budgets continue to
Next 18 months, and obviously that gets supplemented by R. R.
Our mission solutions work, which is the department of Energy Department of Defense and the intelligence agencies all of those budgets continue to.
to either stay flat or grow a year on year. So a lot of good growth coming at us in all of our business lines, Michael. So thanks.
To either stay flat or grow year on year, So a lot of.
Lot of good.
Growth coming at us in all of our business lines, Michael So thanks.
Excellent David Thank you.
Your next question comes from the line of Brent Tillman with DA David's in. Please come ahead.
Your next question comes from the line of Brent Thielman with D. A Davidson. Please go ahead.
Hey, thank you. Good morning. Hey, just the comment about margins on new awards. I think you said 200 basis points above the current backlog margin, which business line or lines or markets are you seeing sort of more meaningful improvement in terms of what's coming in the door now, relative to what you have in the book today.
Hey, Thank you good morning.
Hey, just a comment about margins on New awards I think you said 200 basis points above the current backlog margin.
Which business line or lines or markets are you seeing sort of more meaningful improvement in terms of what's coming in the door now relative to what you have in the book today.
Yeah, it's it's broad. It's across all three segments. I'm again, I'm looking at the plan versus the outlook here. And we're performing above, you know, across the board. So it's it's pretty broad base.
Yes.
It's broad it's across all three segments again I'm looking at the plan versus the outlook here and we are performing above.
Across the board so it's pretty broad based.
Okay, and then you mentioned continued expectations for modestly positive cashflow this year. I know there's typically some moving parts to that. But could you talk about some of those moving pieces, I guess in particular, what could cause you to potentially outperform the series expectation for cashflow in the second half?
Okay. Okay, and then you mentioned continued expectations for modestly positive cash flow. This year I know there is typically some some moving parts to that.
But could you talk about some of those moving pieces I guess in particular, what what could cause you to potentially outperform.
There is expectation for free cash flow in the second half.
Yeah, I thought reconfirming that we do see positive trends for the back half of the year. And I think what's going to drive maybe some improvement within that is continued execution in our projects in Mexico and Canada will be a big contributor to that as we repatriate dividends back into forced treasury. So I think both those will underpin a fairly positive cast trajectory moving forward.
Yes, Hi, Bob Reconfirming that we do see positive trends for the back half of the year and as and I think what's going to drive maybe some improvement within that as his continued execution in our projects in Mexico, and Canada will be a big contributor to that as we repatriate.
Dividends back into Florida, Treasury, So I think both of those will underpin a fairly positive.
Cash trajectory moving forward.
Okay, great. Thank you.
Your next question comes from the line of Sean Eastman with Keedank. Please go ahead.
Your next question comes from the line of Sean Eastman with Keybanc. Please go ahead.
Hi team, nice update here. I just wanted to understand the revenue guidance for this year, stepping up from 10% to 10 to 15. Is that just accelerated schedules on stuff that was in the backlog already?
Hi, Jamie nice update here.
I just wanted to understand the revenue guidance for this year.
Stepping up from 10% to 10 to 15 is that just accelerated schedules on stuff that was in the backlog already and then the second part of the revenue question, perhaps is just relative to the.
And then, you know, second part of the revenue question, perhaps it's just relative to the, you know, one or slightly above one time's book to Bill Expectation for the full year this year. You know, what should we take away from that relative to, you know, revenue or revenue assumptions for next year?
One or slightly above one times book to Bill expectation for the full year this year.
What should we take away from that relative to revenue or revenue assumptions for next year.
Yeah, thanks, Sean. I think from the revenue guidance, we would continue to see that growth.
Yes, Thanks, Shaun I think from the revenue guidance.
We would continue to see that growth we feel yes, we feel very confident based on not only the big bookings this year bookings.
Yeah, we feel very confident based on not only the big bookings this year, bookings in previous years, and then also what we're seeing in the back half of.
Previous years, and then also what we're seeing in the back half of <unk>.
of the 2023. A lot of some of the opportunities, significant amount of the opportunities that we're seeing are coming.
2023, a lot of some of the opportunities are significant amount of the opportunities that we're seeing are coming.
from maybe our non-traditional energy solution side. It's flowing through our ATLS business, and there are some big chunky awards. So we feel reasonably good about the trajectory of kind of revenue moving forward. And then we're also seeing a lot of the projects that we booked two, three years ago, Sean, really starting to get into production.
From maybe are non traditional energy solution side, it's flowing through our <unk> <unk> business and there are some big Chunky awards. So we feel reasonably good about.
The trajectory of kind of revenue moving forward and then we're also seeing a lot of the projects that we booked two three years ago, Sean really starting to get into production as they move into procurement and into construction activities. So I think we really see a revenue growth trajectory within that 10% to 15% that supported by.
as they move into procurement and into construction activities. So I think we really see a revenue growth trajectory within that 10 to 15% that's supported by solid funds.
By solid fundamentals at this point.
Okay, got it and and then relative to the second half new award visibility. I mean, I was encouraging to see some, you know, specific prospects, specific larger prospects being called out.
Okay got it and then relative to the second half New award visibility I mean, it's encouraging to see some specific prospects specific larger prospects being called out.
I mean, how would you describe the line of sight on, on, you know, that implied second half, new awards outlook? I mean, are these projects FID'd, you know, just teed up, ready to go in the backlog? You know, any comments on that would be, would be helpful.
How would you describe the line of sight on on.
That implied second half New awards outlook I mean are these projects.
Just teed up ready to go in the backlog any comments on that would be would be helpful.
Yeah. Hi, Sean. Good morning. Yeah, I'm looking at the third quarter and fourth quarter prospect.
Yeah, Hi, Sean Good morning, Yes.
Yes.
Looking to the third quarter and fourth quarter prospects.
and the go gets most of the go's are between 90 and 180 to 100 and so the ones I spoke to are definitely
And the go gets most of that goes are between 90, and 188 to 100 and so the ones I spoke to.
Our definitely.
cleared for takeoff so to speak in the in the chemicals work and it
Cleared for takeoff so to speak.
In.
The chemicals work and <unk>.
Fluor.
And then in urban solutions in the semiconductor space, we've got some big...
And then in urban solutions in the semiconductor space, we've got some big.
Reimbursable programs that are also ready to move forward. So generally speaking, the line of sight, all the mission solutions projects are going ahead as well.
Reimbursable programs that.
Our also.
Ready to move forward. So generally speaking the line of sight all emission solutions projects are.
Our going ahead as well so.
Yeah, I'd like to give you a high degree of comfort on our second half new awards and getting to that book to burn a water or slightly above.
Yes.
I'd like to give you a high degree of comfort on our our second half New awards and getting to that book to burn a warner or slightly above.
All right, gentlemen, thanks very much. I'll turn it over. Thanks, thanks.
Alright, gentlemen, thanks, very much I'll turn it over thanks.
Thanks, Sean.
So for now, next question comes from the line. One of the Hill Monocha with the City Group, please go ahead.
Your next question comes from the line of Hillman Chan with Citigroup. Please go ahead.
Hi, This is Joe on for Andy Kaplowitz Good morning.
Good morning, good morning.
Just a quick one for me. You guys mentioned the floor was recently awarded a account-host project in China. Can you give us some more color on what customer conversations you're hearing out in the region? We've heard from some of our industrial companies that the environment is still a bit of a mixed bag, but here is on your take and your outlook for the region. Yeah, great strategic question.
Hi, just a quick one for me.
You guys mentioned the floor was recently awarded a chemical project in China can.
Can you give us some more color on what.
What customer conversations you're hearing out in the region.
For some of our industrial companies that the environment is still a bit of a mixed bag, but curious on your take in your outlook for the region.
Yes, great Great strategic question.
As we.
We roll of China.
The China scenario is into our strategies for each of the business segments and what could happen and the risk involved. Not only on the execution side but more importantly for our clients, our multinational nationals that we follow into the region. And, you know, I think...
The China scenarios into our our strategies for each of the business segments, and what what could happen and in the risk involved.
Not only on the execution side, but more importantly for our clients our multinational multinationals that we follow into the region.
And.
I think.
What we're at a big picture level. It may not be a D RISKING with China, but there's definitely a D coupling and not wanting to put all eggs in one basket. So I think the China China plus one Strategy for our clients is is taking hold and we're seeing work flowing either
What we are at a big picture level.
B I D.
Derisking with China, but there's definitely a decoupling.
And not wanting to put all eggs in one basket.
So.
I think the China, China plus one.
Strategy for our clients is taking hold.
We're seeing work.
Boeing either.
near-shoring to North American Europe or friend-shoring in countries where values based globalization if you will and India is featuring prominently Mexico, I think we'll see an uptick as well for manufacturing. So it's real, there are certain clients that have...
The near shoring to North America, and Europe or.
Friends shoring.
In countries, where.
Values based.
Values based globalization, if you will and.
India is featuring prominently.
Mexico, I think we'll see an uptick as well for manufacturing.
So it's real yes, there are certain clients that have.
Like you say, the chemical's clients has moved in there. You know, they...
Like you say the chemicals client has moved in there.
Okay.
Obviously having trouble with very high cost feed stock in Europe and they moved into China.
Obviously, having having trouble with very high cost feedstock in Europe and.
Moved into the into China.
But.
I think it's something to watch. But I see it as an opportunity. We're putting together, and we've got an India task force put together, India plus Asia task force being put together to just be ready for this shift of manufacturing away from trying to make sure we're ready for, to support our clients elsewhere in the region to be.
Okay.
I think it's something to watch, but I see it as an opportunity we were putting together.
Got in India Task Force put together, India plus.
Asia Task force being put together to just see just be ready for this this shift.
Of manufacturing away from trying to make sure we're ready for.
To support our clients elsewhere in the region.
Two.
To be to be ready for that possibility. So.
ready for that possibility. So that's how we're looking at it right now.
That's how we're looking at it right now.
Awesome. Thank you for the color I'll turn it back over thank you. Thanks.
With that, I'll turn the call back over to David for any closing remarks.
And with that I will turn the call back over to David for any closing remarks.
Well, thank you operator.
And many thanks to all of you for participating on Crawl today. You know, we're really pleased with our performance.
And.
Many thanks to all of you for participating on our call today.
We're really pleased with our performance.
and the diverse slate of opportunities in our prospect pipeline.
And the diverse.
Slate of opportunities in our prospect pipeline.
primarily reimbursable. And based on the continued strong performance for our services, we're well on our way to delivering increased shareholder value. So we appreciate your interest in floor. And thank you again for your time today.
Primarily reimbursable.
And based on the continued strong performance of our services, we are well on our way to delivering increased shareholder value. So we appreciate your interest in fluor and thank you again for your time today.
That will conclude today's conference call. Thank you all for joining. You may now disconnect.
That will conclude today's conference call. Thank you all for joining you may now disconnect.
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