Good morning, and welcome to Fluor's Third Quarter 2024 Earnings Conference Call. Today's call is being recorded. [Operator instructions]. A replay of today's conference call will be available at approximately 10:30 a.m. Eastern Time, accessible on Fluor's website at investor.fluor.com. The web replay will be available for 30 days. A telephone replay will also be available for seven days through the registration link, also accessible on Fluor's website at investor.fluor.com. At this time, for opening remarks, I would like to turn the call over to Jason Landkamer, Head of Investor Relations. Please go ahead, sir.

Thank you, Operator, and welcome to Fluor's 2024 third quarter earnings call. David Constable, Fluor's Chairman and Chief Executive Officer, Joe Brennan, Fluor's Chief Financial Officer, and Jim Breuer, our Chief Operating Officer, are here with us today. Fluor issued its third quarter earnings release earlier this morning, and a Slide presentation is posted on our website that we will reference while making prepared remarks. Before getting started, I’d like to refer you to our safe harbor note regarding forward-looking statements, which is summarized on Slide 2. During today's presentation, we'll be making forward-looking statements, which reflect our current analysis of existing trends and information. 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 2023 Form 10-K and our Form 10-Q, which was made available 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.fluor.com. I'll now turn the call over to David Constable, Fluor's Chairman and Chief Executive Officer. David?

Well, thank you Jason, and good morning, everyone. Thank you for joining us today. Please turn to Slide 3. To begin today, I would like to acknowledge the impact of the recent devastation in the Southeast over the past few weeks. Hurricane Helene, shortly followed by Hurricane Milton, caused significant damage, including historic flooding, widespread power outages, and multiple deaths across the southeast. Our Greenville, South Carolina office did sustain moderate damage, but thanks to our HSE and facilities management team, the office remained open and functional. However, almost all of our employees in the area were personally affected in some way. In the face of this tragedy, we are helping communities. For example, the North Carolina Department of Transportation requested assistance from the I-26 Fluor United Asheville team, and we promptly responded. The crews worked to clear roadways and provide temporary repairs, enabling utility teams to reach impacted areas and restore access for affected residents. All States impacted by Hurricane Helene and Milton are in Fluor's FEMA public assistance contract. Mission Solutions has more than 200 people deployed in the southeast, and expect at least 300 more to be deployed in the near future. Our thoughts go out to all families and residents impacted by these hurricanes, and we are honored to be supporting numerous communities in their recovery efforts. Now, let's turn to our operating review, beginning on Slide 4. Revenue for the third quarter was $4.1 billion. Consolidated new awards for the third quarter were $2.7 billion, and included awards for a downstream project in Mexico and a Mining and Metals project in Australia. Based on our new awards for the quarter, our total backlog is now $31.3 billion, of which 80% is reimbursable. Margins on new awards in the quarter continued to underpin our expected segment…

Thank you, David, and good morning, everyone. Please turn to Slide 13. As David indicated, our portfolio of businesses is diversified, and these markets fluctuate in their own business cycles. At Fluor, we want to maintain our position in key markets while we take maximum advantage of our current growth opportunities. To support these projects, we're taking a more holistic view of our markets to align our resources and project delivery model, resulting in a workforce and an execution platform that are flexible and that can shift from one business to another to fully leverage our global capacity. As a first step in this direction, we recently launched a new model to manage our distributed execution centers in the Philippines, Poland, and India. These are highly competent execution centers that perform project work globally, but historically have specialized in only a few industries. Going forward, these offices will no longer report to a single business segment, but instead will be fully leveraged by all of Fluor so that their excellent resource pool and experience can be accessed by all of our projects. This new model, which encompasses approximately 35% of our home office execution capabilities, will better match the demand for trained resources with the supply in these operation centers, will foster diversity and employee skills across industries, and support increased stability and growth for our backlog. Our new execution model directly supports David's observations of industry trends and increases the flexibility and speed needed by our clients in today's market. Many of our current projects and pursuits demand a time to market response, and Fluor is activating our full set of execution capabilities to address this need. I look forward to sharing additional information about our evolving execution platform in the new year, and getting better acquainted with the investment community. With that, let me turn the call over to Joe for the financial updates. Joe?

Yes, thanks, Jim and good morning, everyone. Today, I will review our results for the third quarter and go over our financial outlook assumptions that support our guidance. Please turn to Slide 15. Our consolidated segment profit for the quarter was $117 million. This was impacted by lower than planned results in Energy Solutions, and the timing of settlements in infrastructure. Adjusted EBITDA for the third quarter was $124 million compared to $216 million a year ago. Our adjusted EPS was $0.51, compared to $1.02 in Q3 of 2023. The EPS result was encumbered by a higher effective tax rate as revenue in Mexico and Canada increased, which could not be offset in locations with operating losses. Our adjusted results for the quarter exclude $20 million for the positive effects of FX on the embedded derivative. G&A expenses for the quarter were $37 million, down from $56 million a year ago, as the current quarter reflects a reduction in anticipated incentive compensation. Net interest income for the quarter was $37 million, compared to $42 million a year ago. Net interest contributions continue to benefit from an elevated interest rate environment, combined with our low cost fixed rate debt. Based on our prospect pipeline, we anticipate a book-to-burn ratio approaching one for the third straight year. We currently stand at a book-to-burn ratio of 1.1 for the first three quarters of 2024. As a reminder, the book-to-burn would be much higher if you include the unconsolidated revenue that Mission Solutions manages. Moving on to Slide 16, our cash and marketable securities balance for the quarter was $2.9 billion. This excludes amounts held by NuScale. Operating cash inflows for the third quarter was $330 million compared to $3 million a year ago. This reflects distributions from our joint ventures, customer payments on…

[Operator Instructions] Your first question comes from Jamie Cook from Truist Securities. Your line is now open.

Hi. Good morning. Two questions. One, Joe, just on the guide, the fourth quarter guide still implies a pretty significant ramp in revenues, I think like up 30%. So, just trying to understand your comfort level there and what would be driving the acceleration in revenues. And then your implied margins in Energy Solutions, given your lower margin guide, implies sort of like a 3% margin in Energy Solutions. So, just trying to understand what's happening there. And then on the positive, obviously the free cash flow guide was better. Is that just less funding of problem projects, or is there something structural? And handicap the opportunity for you guys to start buying back the stock given the increased authorization. Thank you.

Yes, I'll start with the challenge projects and what we've been able to do in 2024, Jamie. We had started the year with an outlook of about $260 million worth of funding requirements for our legacy challenge projects. We've been able to manage that through a lot of financial discipline, clawing back entitlements to a number of $80 million for the full year. So, we've shown a lot of progress in that regard. On the margin reduction for Q3 and Q4 and in 2024, it's really a reflection of the delay in the revenue recognition on a large project that is slipping really into, a portion of it in Q4 and it'll move out into 2025. And it's really based in kind of that POC calc, which is driving that larger project, but you factor in the cancellations and the delays on three other programs that's created a pocket here in the year. Those resources have been shifted over to other projects that are in differing stages of execution. So, the contributions from that will be generated, but it’s been pushed to the right. So, we've been able to reallocate those resources. So, we feel comfortable about where they're headed. And the way I would break it up is what we look at in 2024 in the Q3, Q4 quarter, we’ve got about a two thirds impact from cancellations and about a one third impact from the delays that are impacting our overall guide for 2024. But I do want to reiterate that we do not have a change or an expectation for our long-term segment margins of between 4% to 6%.

Great. And then - sorry.

Sorry, go ahead, Jamie.

Oh, sorry, I thought I was getting cut off. Just obviously the increased share authorization is a positive there, but how would you handicap you guys actually doing something and also an opportunity for reinstating the dividend? Thank you.

Yes, listen, we're going to come out in the fourth quarter and talk about holistically what the shareholder return plan looks like, Jamie. This is one piece of it and it's an element of it, and we have cleared all the hurdles internally, and we have generated that free operating cash flow, and we've got a very good view into how cash will be generated moving forward in a business model that's 80% reimbursable, and 20% kind of risk base. And then you see what we've been able to do with the legacy projects, and I think we'll be able to clear up a position in a discussion with the board that we all had a significant amount of confidence relative to being able to open the aperture on the return of that capital to our shareholders. And I would suggest to you, we're going to describe what that holistic plan looks like as we move into Q4, but we will begin to start that as soon as practical. And I just want to clarify this, anything that we're doing on the NuScale side, this is coming from really the last four years of recovering the business, rebuilding, separating the financial and the execution risk. And we're in a position where we do have excess funds, and it is time to open that tap and return it back to shareholders. And if you look at it, there is some symmetry to the 30 million shares relative to what we had to do three or four years ago to dilute in order to get the company back to where we are today.

Thank you so much.

Your next question comes from Andy Kaplowitz from Citigroup. Your line is now open.

Good morning, everyone. David and Joe, I think you still have the 2026 suggested EBITDA target out there of $800 million to $950 million. Can you get there in the current environment? And then as we think about 2025, I know you said you'll update us in February, but can you give us any initial thoughts? Do you still see an environment that supports backlog and revenue growth in 2025? And then are there any puts and takes to think about in delivering margin versus what you're doing in 2024?

Yes, good morning, Andy. I'll take that first one on 2026. And we're just going through our strategic planning - our next chapter of our strategic plan as we speak really, present that to the board and finalizing it now for discussions in February with you all. So, what I can see right now is to your question on, remember we set that EBITDA target, I guess it was late 2022 when we updated our original strategic plan of 2021, and that had had that $800 million to $950 million out there in EBITDA. To me, it looks like we’re probably four quarters behind that range right now. So, that's how we see it in the numbers. Again, we're just still finalizing those. That’s what it looks like. I will say that the original plan, the 2021 strategic plan, the EPS that we're guiding right now is tracking to that 2021 strategic plan target on a comparable basis. So, definitely hitting that target. And over the planning period for that chapter one, if you will, of fixing and building the company, Fluor's market cap has increased, what, 720% and share price is up 675%. So, and now the cash is starting to be generated. And Joe's talked about the share buybacks, which the board fully supports. So, that's where we're at right now. But again, we'll get into - in the prepared remarks, I really wanted to highlight that the CAGR growth that we're seeing for revenue need, but over the planning period, is very strong. And so, again, we'll get back to that in February. 2025.

Yes, let me add a few words there, Andy. Good question. As David said, we're going through our strategic plan and our operating plan for next year, and there are some highlights and a lot of excitement around the opportunities in our various segments. If you look at urban, it's going to be our primary engine of growth in the short term, with a lot of EPCM work and data centers and pharma, in mining. Energy is reloading a new wave of front-end work that should convert in the later years in the planning cycle. And of course, mission, looking at maintaining its leadership position in nuclear and environmental, but with geopolitical developments, the election and some other factors, national security becoming an increasing area of attention for us, also providing significant growth. So, we feel good about the future and we're going to target these markets in a very deliberate way, focusing on our ongoing selectivity and our focus on project delivery, but we do see the next four years to provide opportunity for some significant growth.

Okay. And maybe just on NuScale, obviously it's tough to pin down timing, but you pushed it out a little bit to the first half of 2025, despite the nuclear market, obviously looking better. So, why at this point does the potential agreement continue to get delayed? And is there anything you could do to lock in more value for Fluor?

So, Andy, on NuScale, right, I mean, I think we all know there's a strong appetite for nuclear energy to meet incredible demand for power globally, right? Interest has never been greater. The market potential for NuScale SMRs to deliver carbon-free power just to industry and to utilities is massive. So, we continue to engage positively with our strategic investor on the best commercialization model to capture Fluor and SMR shareholder value, and also ensure that NuScale is successful, has a successful path forward in their markets. And we certainly remain committed to supporting the buildout of NuScale projects globally. And as I mentioned in the prepared remarks, we started front-end design work for RoPower's SMR project using - utilizing NuScale’s technology. And remember, NuScale is the only US NRC-approved SMR technology in the market. There's a lot of smoke and mirrors out there. Other technologies with other technologies, if they ever get approved, are years and years behind NuScale. So, that's a fact, unless you want to go to Russia or China. So, that’s where we're on NuScale. We're very excited about the opportunities for Fluor and for SMR shareholders and the commercialization model that we're finalizing.

Okay. Appreciate the color.

Your next question comes from Steven Fisher from UBS. Your line is now open.

Thanks. Good morning. I wonder if you could talk, David, just about the overall strength of demand picture and whether you think at this point, you're able to be as selective in your bookings as you'd still like and still hit your growth objectives. I think you talked about some no bid things. So, are we still able to be as selective as we were and achieve these growth objectives?

Most definitely, right? We are sticking with our strategic priorities that we've had for the past four years and going forward, fair and balanced contract terms and the reimbursable backlog targets will be at or above. I think we've hit that and improved on that actually at 80%. So, that will continue. We're not going to go anywhere but down the selectivity path with stringent pursuit criteria. And that CAGR growth that we'll be talking about for the next planning period in February is predicated on those same principles across the company. The business lines, the business segments fully understand that that's how we are running the company going forward. So, no changes at all. And I just - from a demand picture perspective, we've talked about it in past calls. You look at our top 12 commercial clients, say spending $164 billion in CapEx in 2023, that is out looking about $195 billion in 2024. And then in 2025 and beyond, that ranges from $195 million to $210 billion. So, and then of course you add in the government spending with the DOD and the DOE and intelligence agencies, which Jim mentioned here, and then just TxDOT alone, that takes that spending, that CapEx is over $1 trillion in 2023, and it's over $1 trillion here this year, and expected to continue. So, I just think that the demand picture looks very strong and there's more than enough to stay grace over. So, we will continue to be selective. That's where it's at. Just a little more on Energy Solutions, right? It feels a bit like the foot is being taken off the energy transition pedal somewhat primarily in North America. In energy transition, the stars really have to align completely for energy transition projects to get to FID…

Can I just add? I was just going to say, Steven, I think what's interesting through our diversification, as we've grown Urban Solutions, we're now realizing that there is some additional opportunity even within the construct of tripling the size of that business, which will allow us to provide kind of a diversification ability to maintain growth, as David discusses, what's moving through the energy transition pipeline. So, just because we see one portion of our portfolio kind of resetting here as it loads up on feeds, we do have other growth opportunities within our diversification. So, it will maintain strong CAGRs moving forward from our perspective.

Okay, thanks. Very helpful. Yes, part of the reason I was asking was because we talked about Mexico a few quarters ago, and it just seems like it's still creating challenges from performance execution, but we're still booking more work there. And so, I'm just wondering if that was just out of necessity to kind of keep the business going. But sounds like you have other prospects there. And I guess related to that, the follow up then is about staffing levels. As you go through this transition, I'm curious how well your staffing levels align with the opportunities you have over the next year or so as you're rolling off some of these bigger projects. Just wondering if we should be concerned about overstaffing and maybe how that fit - if that there's any context here or relationship to sort of this new execution model that you talked about on the call today.

Yes, Steven, Jim can definitely answer the resources question and maybe touch on Mexico as well.

So, Steven, two good points you bring up. Let me start with Mexico first, and I spent quite a few years there in my Fluor career. So, yes, this challenge project is an outlier and an otherwise extremely successful portfolio of projects. If you look at our joint venture there, I think David has said this in the past, it's perhaps our most successful joint venture in the history of the company. And a JV that had its most successful years in the last two or three years executing very successfully a large number of refinery projects. So, this specific project is just an outlier in an otherwise very successful enterprise. And we continue - I mean, with the new elections just having passed in Mexico and the new administration coming in for a new six-year cycle, it's going to take a little bit of time for the country to get its CapEx agenda established, but we expect another wave of work coming up in the coming years. As far as staffing, yes, as you would expect, there are projects that are winding down and there are other projects that are picking up and have a quick demand for resource growth. On the net side, we see net growth. If you look at some of these major programs in the current backlog and the work that we're bidding that's going to be decided in the next few months, a lot of these projects require fairly quick ramp-up. And so, we do see the need to shift resources from certain parts of the company to other parts, and hence the increased focus on having a more flexible workforce and look and try to optimize the equation globally as opposed to having to optimize locally so that we can more quickly and more efficiently transfer - and it's not just people. It's people, but it's also work processes. It's office space. It’s information systems, tools, and fully leveraging our large project capability to these newer markets. So, I think it's a task that we need to go through, but I think it's something we can manage to make sure we continue to drive high utilization in our resource pool.

Terrific. Thank you very much.

Your next question comes from Sangita Jain from KeyBanc Capital Markets. Your line is now open.

Great. Thank you so much for taking my question. My first one will be on data centers. You referenced that in your prepared remarks, and I'm curious as to whether your discussions are focused on one-off project opportunities or more programmatic global opportunities. And then the modular capabilities that you're developing, I'm wondering if they're being developed on behalf of a client or if you're doing that preemptively to secure some bookings.

So, thanks, Sangita, for the question. Yes, the data center market is very exciting for us, both co-located data centers, and hyperscale data centers going forward. It is the clients in that space, the big tech companies, they want those co-los and hyperscale centers, not now, but right now. So, hence the comments around time to market that you've heard. And we really are not just looking at one-offs. We're looking at, to your term, programmatic opportunities in this space. And with one large tech company, we've signed off an umbrella master agreement that allows us to go after many standardized data centers for them, primarily North America, but we're actually working with them over in Asia as well. So, I think that’s where we're - how we're looking at it. From a modularization perspective, that study was done for a specific client. And it's certainly adding value and putting us ahead of the other competition, in fact potentially putting us in a sole source position for a large number of data centers, with a tech company that you would certainly know.

Yes, and the only other thing I would add to that, David, is we've got some good experience in providing kind of combined cycle power solutions. We have conventional nuclear experience, and we have an SMR company. So, we can also provide kind of the power solution to support their time to market investment through the AI data center model.

Got it. And my follow-up is also for Urban Solutions. So, you talked about an Intel project cancellation, but you also referenced in the deck that you're talking to them about additional semi projects. So, I'm just trying to understand what gives you conviction that this time is for real when you're talking to them about new projects and if you're doing anything else different in structuring your contracts?

On the Intel work, yes, that was a project that has gone away for now, has been paused, basically. It was a mega project, but we're still doing work at that specific site, and there's additional work within the project that we're currently completing. And we're also looking at interesting projects with Intel in the tool install space where we bring direct hire capabilities for tool installations within their facilities. And we continue to work with them over in Asia on their program. So, like I said, the relationship is strong and as they go through their planning process and their CapEx, expansion programs, which they are committed to, we'll be there to support Intel.

Got it. Appreciate the feedback.

Your next question comes from Andrew Wittmann from Baird. Your line is now open.

Yes. Great. Thanks for taking my questions, guys. I guess I just wanted to dig in a little bit more to the Energy Solutions segment. And specifically, I heard you guys talk about the delayed profit recognition in the quarter. I guess first question, is it all just delay or was it reduced at all? Were there any other factors that we should be aware of that contributed to the performance in the quarter? And I guess maybe kind of bigger picture, obviously you've had one very large project there and a couple of other ones as well. As those are now ramping down, are we getting a glimpse this quarter of what the Energy Solutions contribution could be when those projects are done, if you will? Or is there enough other underlying work here to find growth off of this new lower base when the mega projects maybe are done?

Maybe I'll take the LNGC discussion around the margins, Andy, and then we can talk - maybe Jim can take you. So, what I would tell you about LNGC where we are, even though we have some of the experience, some of the project variability kind of regarding earnings recognition at this point, the project overall continues to perform within management's expectations. It’s a timing issue only related to revenue recognition, really within the POC calc, Andy, and we would expect to pick this up in outward years. So it is not a function of where we are in terms of performance on the job and being able to meet the client's expectations of a mid 2025 gas.

The underlying earnings power question. Jim, did you want to touch on that one?

Yes, Andrew. So, yes, it is true that there are several large programs that are winding down and you know which ones they are. As I said before, Energy Solutions is reloading the hopper with significant front-end work, both in traditional markets, energy transition. We’re putting together a very deliberate strategy around power and low carbon power. You heard about the nuclear work. And so, our expectation is, and again, we're still working through the strategic plan that we're going to share with you early next year, but the expectation is that that new wave of projects will come to fruition to EPC PCM on the second half of the planning cycle. So, the major contributors for our plan are going to be in the urban arena in the first half, and then Urban's going to pick up and contribute a higher contribution in the second half of the plan cycle.

Got it. Okay, understood.

Andrew, let me just add there that we're talking about - again, we'll talk about the CAGR growth over the planning period that's coming. And Energy Solutions will be contributing significantly. Energy clients are starting to invest more in traditional oil and gas work, and then you've got all the chemicals work. So, as we look at our front-end programs right now, front-end work that's in-house and field feed programs, front-end engineering and design programs that are likely to progress, right, so we've scrubbed them. It's like $254 billion of total installed cost, and $174 billion of that is in Energy Solutions, whether it's chemicals and liquids to chemicals or LNG or nuclear power or downstream production and fuels. There's still obviously a huge chunk of work coming forward in Energy Solutions. And in the prospects that we're chasing for front-end, out of that $230 billion in front of us in the next 18 months, Energy Solutions is $133 billion of that. So, again, spread across chemicals, nuclear, production fuels, LNG, and chemicals. So, we still feel very good about it going forward. And we will see that in the planning period and talk about it more in February.

And Andy, not to beat this a little bit, but with the regulatory environment changing with the new administration, I think there's - the plan that we had built up considered kind of the regulatory environment that we were working in. What's it going to look like as we move forward? Is the regulatory environment going to be more favorable? There are things that we’ll figure out as we move forward in the next two to three months as things become clear and what impact that has across our Energy Solutions business.

Sure. Great. Just as my follow-up, I guess I wanted to kind of look at the implied fourth quarter guidance and just understand it a little bit more. We talked about, you're going to pick up some of the delayed revenue recognition in Energy Solutions. I think in the prepared remarks, there was a comment on some timing around an infrastructure recognition item as well. Maybe, Joe, could you comment about other kind of more chunkier things that we should understand or know about that are implicit in that fourth quarter guidance? Obviously, the thing that I think we're all trying to get at here is what the underlying earnings power could be or is for Fluor as we turn the calendar to 2025. And not looking for guidance, but just trying to get a sense of what the underlying run rate is, maybe on an EBITDA basis, and having some of these moving pieces, I think would be helpful.

Yes, Andy, I think we're having less and less reliance on one-offs. The Q4 number was bolstered by - or will be bolstered by a settlement that we thought we were going to achieve, but it's a tens of million dollar-type settlement that we thought we would achieve in third quarter, and it will shift out into fourth quarter in that regard. And then the second part of your question, sorry?

Just any other items, again, you talked about the delayed revenue. Yes.

Let me put it in this context, Andy. We're down to $850 million worth of legacy projects to complete and close off the books. We had a starting point for the year of $260 million worth of cash calls that we've reduced dramatically. So, we've made a significant amount of progress on what we would consider to represent the volatility portion of our P&L, which is becoming more and more a part of our rear view mirror at this point. So, I would expect less and less volatility moving forward as we transition into possibly a larger portion of our backlog being contained within the Urban Solutions business at this point. But I would tell you, there's going to be a lot less volatility moving forward. Some of these cancellations and delays are normal cyclical challenge that occur in our normal operating quarters. But in terms of the one-offs and the real volatility relative to the P&L and the legacy projects we've been pulling forward, I'll tell you the majority of that is behind us.

Okay. Thank you.

Your next question comes from Michael Dudas from Vertical Research. Your line is now open.

Good morning, gentlemen. Maybe back to nuclear, a couple of things. One, in the traditional nuclear, and we're seeing all the news about large companies wanting to directly restart nuclear plants. So, how does your experience and your longtime profile in that space align with your current opportunities for risk mitigation? And are those real opportunities that Fluor might be involved with somehow? Just start there and I have a couple of follow-ups after that.

Okay. So, thanks. Good morning, Mike. Yes, conventional nuclear, right, that's - I think Fluor’s built over 70 nuclear plants around the country going way, way back in time, very successfully by the way. And there are obviously - as you said, there's interest in conventional nuclear, both restarts and life extensions and potentially additional new projects, certainly in North America and in Europe, which I mentioned, a couple of units over in Romania that we're looking at, that will be on a reimbursable basis. Just want to make sure that that's clear, that the Cernavoda plant in Romania will be reimbursable. And exactly, we're not - as I said to an earlier question, we're not changing our selectivity or risk profile whatsoever for any of the new markets and growth markets that we'll be looking at, certainly in power, and it'll be fully aligned with our risk profile that we have for the company. So, could you look at some hybrid scenarios where you could fix services costs and potentially procurement costs to support the project? That's something we'd be comfortable with, but each project will be looked at standalone, and we'll go through the normal selectivity and pursuit criteria as usual. Jim?

Yes, let me just add, Mike. We are working very closely with several technology providers in the nuclear space and conventional nuclear. There's one partner we are working with on this Romania project. We're talking to a US-based technology provider for a variety of opportunities around the world, mostly in the US and Europe. We’re doing a study - we've done a study with them this year on a potential project in Western Europe. But as David said, we're going to be very diligent in our commercial profile on these projects. And I think the technology providers understand that. The mature clients understand that, that everyone's going to have to come to the table on these projects to make them happen. It's not going to be a give me a price for the whole thing, and you take all the risks, scenario. I think it's going to have to be a much more nuanced commercial solution to get these projects built.

Thanks, Jim. That's encouraging to hear. My follow up is on NuScale. Maybe, David, two parts. One, David, your thoughts on such the lead that the technology has over competitors, certainly, which has been better documented. When do you think in the United States, one of those will be up and running? Maybe a little estimate on that front. Has that happened before or after, say Romania? And then given the excitement and the valuation of NuScale and certain things have changed dramatically in the - versus say, six to 12 months ago when you were starting this process, how do you about think about going forward, ownership having investment, balancing that versus monetizing and certainly rewarding shareholders for the patients in this as we move to the 2025 plan?

So, yes, two parts there. I'll let Joe talk about the ownership balance and making sure we capture value for Fluor shareholders and SMR shareholders, but also think about the upside that we believe is coming in the SMR space. But I'll let Joe talk about that in a minute. From a leadership perspective, NuScale is clearly the leader because of their NRC approval. You can go to the NRC website and see it's mostly all about NuScale’s approvals and their expected approval for the up rate that's coming in the first half of 2025. So, again, heads and shoulders above the competition. And so, as far as timing goes, as you mentioned, Romania is actually probably leading right now, but you asked about the US, where NuScale and their developer, their commercialization developer is looking at different opportunities, primarily with utilities that are trying to get a jump on carbon-free power solutions, new solutions, new technologies, and with the tech companies, heavy discussions with tech companies where SMRs will play. And again, they're going to play first there because they've got an approval. So, that's why we’re very positive on it, and that’s how we're looking at it right now. And as I've said, we're very, very supportive of NuScale and NuScale build out of projects in the US here going forward. Joe?

Yes, no, and good question. I mean, we’re extremely supportive. What's occurred over the last four to six months as you see kind of the strategy within NuScale crystallizing in terms of how they've pointed themselves into the data center market and our strategic investor and the work that he's done, has pulled together kind of a strategy that has symmetry in terms of what's going on within the macro economy, and it's driving valuations. And we are at a position in the process here where we want to do something that allows for both companies to continue to be successful and be accretive to their shareholders. So, I don't want to get into the details of what we're going to do, and we'll talk about that as we get out into the February phone call, but we do want to capture value for our shareholders, but we want to maintain the value for the overall transaction across all the constituents at this point. And I think there's a clear pathway to get there with the events that have occurred over the last four to six months.

Excellent, gentlemen. Thank you so much.

This concludes our question-and-answer session. I'd now like to hand back over to David Constable for further remarks.

Right. Thank you, Operator. Many thanks to all of you for participating on our call today. As we close out 2024, we’re very pleased to see our cash generation trajectory and the opportunities to support the return of capital to shareholders. And we appreciate your interest in Fluor, and thank you again for your time today.

Thank you for attending today's call. You may now disconnect. Have a wonderful day.