Good day, and welcome to KBR's First Quarter 2018 Earnings Conference. This call is being recorded. And as a reminder, your lines will be in a listen-only mode for the duration of the call. There will be a question-and-answer session immediately following prepared remarks, and you will receive instructions at that time. For opening remarks and introductions, I would like to turn the call over to Nelson Rowe. Please go ahead.

Good morning, and thank you for joining us today to discuss KBR's first quarter 2018 financial results. Joining us on today's call will be Stuart Bradie, President and Chief Executive Officer of KBR; and Mark Sopp, Executive Vice President and Chief Financial Officer. Stuart and Mark will discuss KBR's financial and operational results, market outlook and earnings expectations for 2018. Please refer to the presentation that is posted on our website in the Investors section of kbr.com. Following their prepared remarks, we will take your questions. Today's call is also being webcast and a replay will be available on KBR's website for seven days at kbr.com. A press release announcing KBR's first quarter 2018 results, first quarter Form 10-Q will also be available on the website. Before we turn the call over to Stuart, I would like to remind the audience that today's discussion may include forward-looking statement, reflecting KBR's views about future events and their potential impact on performance. These matters involve risks and uncertainties that could impact operations and financial results and cause our actual results to differ significantly from our forward-looking statements. These risks are discussed in KBR's first quarter 2018 earnings press release, first quarter Form 10-Q and Current Reports on Form 8-K. You can find all of these documents on the website at kbr.com. Now, I will turn the call over to Stuart.

Thank you, Nelson. Good morning and thank you for joining us. If I can turn to slide 3. The performance of our people in the health and safety area has been nothing short of exemplary. I'd like to thank them and recognize the team effort required to achieve the results shown. Good safety is simply good business, and we have started 2018 strongly. On to slide 4, first quarter highlights. This is an exciting time to be part of KBR. We have transformed the business into being more predictable and profitable with a growing and significant base of professional services and technology-based income underpinned by long-term contracts. Our end-markets are all buoyant and this is reflected in our sales and backlog performance. In April, we closed on the SGT and Aspire acquisitions, more on these later, and completed our refinancing, which Mark will give more color on later. Revenue, excluding Non-strategic, was essentially stable year-on-year and was up close to 10.5% from last quarter. This firmly demonstrates that we are growing in Government and Technology and have stabilized Hydrocarbons, which was actually up from last quarter, and which is at a growth inflection point, and more on that in a moment. Earnings are above expectation, with adjusted EPS up 21% year-on-year, due to improved margin performance. Execution was once again strong, including progress on Ichthys. Our cash flow, although negative, was in line with expectation, and was impacted by a block on Aspire dividends and some payments in our Government business, which missed the quarter cut-off, but were received in April. On to slide 5, market outlook. As I said earlier, it's an exciting time to be part of KBR. All three of our end-markets are buoyant. That said, the proof of the pudding is in the eating, which in…

Thank you, Stuart. I will start on slide 11 of the earnings presentation. As mentioned, we're off to a good start for 2018, completing some important transactions for our future while also delivering healthy earnings out of the gate. Revenues were on track with Q1, with strong organic growth in our Government Services business and the addition from Aspire together offsetting year-over-year reductions in Hydrocarbons Services. However, as Stuart mentioned earlier, revenues have stabilized sequentially in HS and are positioned for growth from recent wins. Operating margin before giving effect to the Aspire transaction gain, which I'll cover in a moment was 6.4%, up considerably from the prior year at 5.7%, with at or above targeted gross margins across all three of our segments and improvements in equity and earnings driven by Hydrocarbons. The tax rate fell to 20% primarily due to the lower rate applied to the one-time transaction gain. Otherwise, it was normative in our guidance range of 22% to 24%. GAAP EPS was $0.97 for Q1 and $0.34 on an adjusted EPS basis, up 21% over last year on higher operating income and a lower tax rate. Operating cash outflows were $130 million, pretty consistent with the prior year, and which also reflects some degree of seasonality. Results this quarter were further hampered by dividends tied up in the Aspire liquidation process, that's now obviously resolved, and also we had some billing delays in the first quarter due to some transition issues in our Government Services business, which we also expect to be resolved in Q2. On to slide 12, in addition to Stuart's remarks earlier, here are some notable points about the Aspire and SGT transactions from a financial point of view. For Aspire, as said, we took over operational control of running the program on…

Thank you, Mark. So, in summary and to conclude today's presentation, revenue was essentially stable year-on-year and it was up over 10% from last quarter, including a slight increase in Hydrocarbons revenue, and a 32% growth year-on-year in Government, which included a 11% organic growth. Margins were up across all three segments, with overall earnings above expectations, up 21% year-on-year. Bookings were strong in Q1 across Government and Technology, and we saw key wins in April for Hydrocarbons. We closed on the SGT and Aspire acquisitions in April and concluded our refinancing. We are bullish across all of our three end-markets. This is an exciting time to be part of the KBR team and I'm pleased to reaffirm our guidance. I'd now like to hand it back to the operator, who will open the call up for questions.

Thank you. And we'll take our first question from Anna Kaminskaya from Bank of America. Please go ahead.

Good morning, guys. Great quarter. Can you hear me okay?

Thanks, Anna. Yeah, we can hear you.

Maybe we can just start with the outlook for 2018, I think when you had your earnings call back in February, you highlighted that 1Q will likely be the kind of the low mark for the year, and so we can see the ramp-up, now you have also closed the acquisition. So, any kind of comments on why keeping the outlook range the same, kind of if I run rate 1Q, I should be getting to at least the high end of the range, if you can comment on just the moving parts?

Yeah, you're right. There are a number of moving parts. I think, pleasingly, obviously the movement as we forecast before in the Hydrocarbons Services segment, which is very encouraging. However, it's early days, you know it's the first quarter in the year, we've just closed SGT and we wanted to have a period of operating with them to really understand all their moving pieces and we'll revisit the guidance, of course, as we get into Q2, Anna. So, I think, all we're being is prudent, and I think that's right. This juncture is being very early on in the year. And we had some sentiment that felt are our growth targets of the mid-range of 7% were aggressive, and I think, now we're sort of hopefully signaling that – our confidence in those ranges.

Great. And then, maybe just go back to Government Services business, like very impressive organic growth in 1Q, right. And as sell-side, we try to obviously kind of – I want to make sure I don't get carried away with the 11% for the rest of the year. Just can you talk about any one particular contract that drove the upside, kind of how sustainable is the growth in 2018, 2019? And any change to that organic growth outlook with the acquisition? Does it change your growth profile? And maybe as a follow-up, if I can tag onto the Government Services discussion, how does the whole LOGCAP V award change your profile into 2018 – 2019, 2020?

Yeah, I mean, good question. So, yeah, we're very pleased obviously with 11% organic growth. I think that's – the team did a fantastic job, but it was not any one contract, it was really across the board. We did well in our logistics business. I think Mark explained how the (29:05) business secured a number of wins as well. And obviously with SGT coming in, our sort of science and space businesses is looking bullish going forward. So, I think our view at the moment is that we're realizing the synergies that we set out to realize. We've obviously got further synergies to come our way if we play our cards right with the introduction of SGT, particularly with a profile of government spending and I think we talked quite a bit about that in the presentation, so I won't go back into that again. So, we're very optimistic. We feel that there's a lot of tailwinds globally with our business. We've got built-in organic growth already in our UK business, which clearly with the Aspire acquisition is becoming more prominent in our overall results. You know that's peaking through 2018 and into 2019 in terms of the capital works program and there's a high level of activity ongoing there in Aspire, and the MFTS venture, all the airplanes are here. They're all certified now and the take or pay starts to operate in June. So, we're feeling very upbeat about Government Services. I think, our expectations have been set out quite clearly in terms of our growth aspirations and what we feel is achievable. We've been very clear about that to the market. The breakout cases, we called it in our Investor Day, as you know, we talked about activity globally. But at the same time, LOGCAP V really presents a significant opportunity for us. That is out for tender. The Army are forecasting award in later this year. It may get protested. It may slip. But it's certainly moving that way. If they stick to that timetable, we'll know before Christmas. If it slips a little bit, obviously, that will be into Q1 next year. But it's actually that, if we are successful in securing some of the regions that we feel that we are in preeminent position to secure, that will really, really enhance our logistics part of our business going forward. So, it's an exciting time.

And our next question comes from Tahira Afzal from KeyBanc Capital Markets. Please go ahead.

Thank you. Hi, folks, and congrats, great quarter.

Thank you, Tahira.

I guess, the first question is, if I go back to last year's Analyst Day and you know you guys had given sort of a 29%, 20%, 21% (31:33) sort of per annum outlook, and if I go to E&C where you were assuming 10% to 15% growth. Is the buoyant market that you're seeing sufficient to support that outlook as of right now, even maybe exceeded?

Yeah. I mean, the – I think we were quite clear. Our expectation was that a lot of the things we've announced today, we hoped would actually come to fruition in Q1, and they slipped a little bit, some obviously came to fruition. And in the presentation, as we're presenting it yesterday, we had signed the COTC contract in Saudi Arabia. But it hadn't gone public and Saudi Aramco and SABIC fixed that for us this morning and went public in the Middle East. So, I think, Tahira, our book-to-bill forecast really in Q2 sitting between 2 times and 3 times at this juncture and we're still in April is very, very encouraging and our prospects less – and the associated risk profile of those prospects is very much in our wheelhouse. So, we're feeling more bullish now than last quarter on Hydrocarbons. And the expectation is that, at this point, we've reaffirmed our guidance, so it would be remiss of me to say that we would do better. But certainly, we're feeling optimistic about the future and I think we've come out the bottom for us in terms of that cycle. We've got a large base of recurring revenue, as you know, in Hydrocarbons. That stabilized our revenue and our revenue was up a little tick from last quarter. So, that's a very pleasing signal in its own right. And with these wins that have come in, I'm very, very pleased to report that what we had forecast is now coming to fruition.

Okay, great. It's good to hear, Stuart. And I guess my second question is, I listen to a lot of the calls on the equipment and supply chain, and there seems to be a common theme around inflation. I would assume being services more late cycle, inflation, and really the tightness of the cycle is a good thing for yourself.

No (33:54) exactly right, Tahira. Exactly right, that is a good thing.

Okay, great. Thank you very much.

And we will take our next question from Andrew Kaplowitz from Citi. Go ahead.

Good morning, guys.

Morning, Andy.

Morning, Andy.

Stuart, so you changed your E&C segment then to Hydrocarbons, not a big deal obviously. You did say in the release that it deemphasizes fixed price EPC projects. I thought it was great to hear about the 2 to 3 times book-to-bill level on Q2 in Hydrocarbons. I think you called out then mostly being or all being reimbursable. So, is it right to say that there is enough of this type of work out there that you're confident you can grow backlog without projects such as big LNG which KBR has been known for in the past? Because my understanding is on the big LNG stuff, it really will go through fixed price, but maybe you could correct me if I'm wrong.

Yeah. I think two – I think you asked really two questions in one there, Andy. So, let me just reiterate that we will, when the risk profile is appropriate, take lump-sum risk in the Hydrocarbons sector, so I would say that. But we're going to be very considered, we're going to be highly, highly selective. In terms of the LNG piece, there'll be some markets where it's appropriate to take lump-sum risk where labor, for example, is actually a lower cost. In the First World countries, Australia and Canada taking lump-sum risk on unionized labor that's fly in, fly out, and with unpredictable weather patterns, et cetera, is something that we – unless we can price it, really, really healthily (35:42), which then you don't win and so it's something we probably wouldn't do. But if it's in an environment where the labor costs are – the (35:51) rates are much lower, then you can think through how you would manage that risk in a different way. So the answer to the question is – and we would also look in somewhere like the Gulf Coast, where we have got a great handle on the construction labor market and the productivity norms, et cetera. We would also look there to take lump-sum risk if we could get the right terms associated with that. So, that's the answer to that piece. In terms of is there enough work out there on a reimbursable EPC basis or a lump-sum services basis, et cetera, the answer to that question, I think, we're demonstrating today is, yes.

Got it, so great color there. And you gave good color on the Ichthys project, which we do appreciate. The Q is not out yet. Maybe you could update us on approved change orders. But if you talk about the next sort of six months here or nine months before this project is done, are there any critical milestones that we really should focus on for the power plant here? You mentioned the last three turbines look like they're on schedule now. Anything that we should watch? And then, you said you collected $60 million from two of the three contractors. Is there any probability you could see more money in the short-term from them or is it really a long-term pursuit around getting your money back?

Okay. So, the – yeah, this – in terms of the power station, I think the key milestone to watch out for is really the completion of the gas turbines, because with the completion of the gas turbines, we can run the full facility. So, there is no impact to the customer and able to produce LNG and align with expectations there, and that's very much on track, as I said. So, I think that – we'll also update you obviously as we go every quarter on how we're doing against forecast cost, because, obviously, we've ring-fenced the financing of those, and we want to be very transparent of how we're progressing. In terms of recovery of additional moneys, there's two pieces to that. The first is that in the power station, we're going to have to seek recourse to the contractors who walked off the job. We've got an arbitration date in late 2019...

October.

...October of 2019 that's set already for that hearing. And that will be the start of that process, unless we can come to some solution earlier, of course, which is always possible. In terms of the main facilities, as I gave quite a bit of color there, we've got the first train ready for startup and the second one scheduled for the end of June, which is of course very close. We do have to conclude our negotiations with the customer around unapproved change orders and claims and counter claims and, et cetera, as we move that forward. And if those negotiations are favorable to the JKC joint venture, obviously, we'll pick up our share of upside of cash associated with the conclusion of those ventures – those negotiations. So, that's – and that is possible in a much shorter timeframe, obviously, than going through the legal route.

And Andy, Mark here. We are trying to get the Q out today. When you see that, the unapproved change order number is flat, it's actually modestly down in the quarter from year-end. So, no major change there.

And we will take our next question from Jamie Cook from Credit Suisse. Jamie L. Cook - Credit Suisse Securities (USA) LLC: Hi. Good morning. Nice quarter. I guess, just a couple of follow-up questions, Stuart. On the COTC project, in the press release you talk about winning the FEED and pre FEED, but I think in their announcement this morning, they talked about you winning the program management as well. So, can you just help us better understand the larger potential role you have on this project just given the size of this project? And on the pieces outside of FEED and pre FEED, will that be cost reimbursable as well? My second question is on LNG, it sounds like we should be less optimistic on you guys winning LNG Canada based on your comments on – you won't take fixed price labor cost in Canada. But could you sort of rank order, which LNG projects you think you're best positioned for I assume, on the Gulf Coast? And then, my third question is for Mark. Mark, is there any way you can help us understand, I know you said SGT is modestly accretive, like, color around that, because I'm trying to understand your view on organic versus acquisition. And then, why for Aspire are we excluding amortization when you don't exclude amortization for your other acquisitions? I'm just trying to figure out, this is a trend we should think going forward as you continue to be acquisitive. Thanks.

Okay. So, I'll start and then Mark can jump in. So, as ever, Jamie, several questions in one. Let me start off with COTC, so we're really excited about COTC. Obviously, it's the – will be the largest integrated petrochem complex ever built, following on from Sadara, which KBR was heavily involved in. You're right, there's a – within the contract, there's a program management element that comes with the pre FEED and FEED, and obviously that's further down the track. And if I look back in terms of the opportunity that this contract could bring, if I relate it to Sadara... Jamie L. Cook - Credit Suisse Securities (USA) LLC: Yeah.

...Sadara was, obviously, millions of man hours of engineering to get it to the right sort of maturity, to go into bid out the various elements of EPC and the various units post the FEED. And then, we really helped Aramco and Dow at that point to really evaluate those bids, and then we were on-site for several years in the program management and construction management role. So, it was a significant part of KBR's past. And so, I think, the potential on COTC is very similar. Jamie L. Cook - Credit Suisse Securities (USA) LLC: But, is it millions – sorry, is it millions, or I don't remember how big Sadara was for you, is it hundreds of millions or $1 billion? And will you take program management fixed price?

No, no. The program management comes through as reimbursable. Jamie L. Cook - Credit Suisse Securities (USA) LLC: Okay. And then size?

Size, I mean, it's difficult to gauge size, but I mean, Sadara was hundreds of millions, yeah. Jamie L. Cook - Credit Suisse Securities (USA) LLC: Okay, all right. That's helpful. And then, sorry, LNG and then the guide?

Yeah. LNG, I mean, in terms of Canada, it's very much the customer's choice and nothing official on that. I mean, I've been very clear, and for that partner, we're very much aligned with our partner TechnipFMC on our risk appetite in Canada. But in terms of the other LNG projects, we've got another – I was just reading yesterday, Magnolia or LNG Limited-Magnolia (42:47), release came out yesterday for their quarter-end, and they're very, very bullish about their takeoffs and the potential there and – sorry, off-takes, not takeoffs. The project might takeoff if they get the off-takes. So, they are very bullish about their off-takes and more so than I've heard them in many years or many months. So, I think, obviously, something in the Gulf Coast is very much attractive for us. Something like wheat fiber (43:15) in Canada, which is very self-contained and we're negotiating, we're in a sole-source position where we can negotiate sensible terms is a completely different kettle of fish. So, I wouldn't say that we're the Canadian marketplace. I just think it needs to be done in a way that fits our appetite to take risk in those – our sensible outcome and pricing mechanisms.

And our next question comes from...

Operator, hold on, I'll finish Jamie's question three and four. Relative to SGT, government transactions of this nature are more predictable. And when we set guidance for SGT, while we didn't know for sure, we can reasonably estimate the ultimate amortization on that transaction, and we were also in process with our refinancing and we could also estimate the attributable interest to financing that transaction. And because of that, we included all of that in our original guidance relative to SGT's profit contribution, the interest allocated to it and the estimated amortization. And we believe that will be accretive by call it a $0.02 for this fiscal year. There's some risk in that as we fine-tune the purchase accounting, but this is again a very predictable business backlog, and we're pretty confident that will shake out. But only to that magnitude, which is one of the reasons why there's no change in guidance at this time, in addition to what Stuart mentioned earlier. And then, Aspire is a different animal. And we were very clear that the complexity of the transaction at the time of issuing our guidance did not lend itself to us predicting whether or not we will consolidate it, and a number of other things. Not to mention what any amortization would be, and there were pretty wide estimates ranging that could have come from that. So, we decided explicitly in determining our guidance for 2018 that we would not try to estimate the amortization for Aspire and we would exclude that, and that's the reason why it's excluded. And we think that's a – it's the fair presentation of the two different deals, one being very predictable SGT, and therefore, included, and Aspire being less predictable.

Okay, operator, the next question. Go ahead.

Our next question comes from Steven Fisher from UBS.

Thanks, good morning. The first question is on bookings and backlog and revenue inflection related to Hydrocarbon, then I've got a follow-up related to fixed price. So, the first question is really, it sounds like you think 2 to 3 times book-to-bill is just the starting point for Q2 and could still be better, but what about the second half? What are the chances that you can have a quarter later this year that is good or better? And then, you mentioned that you're at infection point on Hydrocarbons Services. Is that mean the revenues and the business segment profits are at the low points in Q1?

Yeah. So, in terms of our ability to continue to – you're quite right, we're only in April and we can do a bit better than that if the stars align, Steve, in Q2. And we've got, I mean, our prospects list that we talked about last quarter is still there. In fact, it's increasing, we're seeing a lot more activity in the marketplace that actually we feel that sets our risk profile. And to answer your question, yes, we will continue to book work if we bid probably, of course, going through the rest of the year. So, I'm really upbeat about Hydrocarbons Services. I think we're in good shape to see growth through the backlog or through the year, as we said before. In terms of – I can't even remember the second question there.

The second question was, the low – are you at the low point now in revenues and business segment profits in Q1? And then, maybe I'll just give you what the next question is here, you mentioned to Andy that there's enough cost plus work out there to grow backlog. So, wondering, why it makes sense to do any fixed price work in Hydrocarbons Services? And, I guess, if you have – I know you're going to say you can find work that fits your commercial discipline on a fixed price basis. But if it does, what's your relative confidence level that you have in achieving the as-bid margin in fixed price projects relative to that of a cost-plus? And is it 95%? Is it 90%? How would you quantify that?

Yeah. So, I mean, you're right, you're right. I will answer it by saying we'd only take fixed price if it fits our commercial risk tolerance, but it's probably worth just reiterating, we're going to be highly selective if we're going to bid lump-sum EPC. We're not going to do it as five bids in a buy where low cost, low price wins. Usually the person who makes the biggest mistake wins the job. We are looking at a number of, what I would call, negotiated or we're very much engaged in the front-end design, so heavily into the execution plan. So, we can really estimate with the degree of accuracy, what the job is going to cost. And then, we're very concerned about the risk profile, understanding why the risk, et cetera. So, it's a very different, I guess, level of discipline and scrutiny that will go into our review of fixed price contracts, Steve. We're in a – to give you a percentage of confidence, I think that we should not go into bidding this without a significantly almost a high degree of confidence that you can deliver the margin that you bid. Otherwise, you should be doing it, you shouldn't be going and hoping, you should be going and knowing. And things do go wrong, but you should build in contingency and things like that to try and deal with that. Now, you might not get it right all the time, but at least you're going in with your eyes wide open and not hoping for great weather, and hoping that productivity are above historical norms, et cetera. So, I think, that's probably the best way to explain it. So, I would say our confidence is closer to 100% if we get into fixed price when we bid the work.

And our next question comes from Chad Dillard from Deutsche Bank. Please go ahead.

Hi, good morning, guys.

Good morning, Chad.

Hi, Chad.

So, can you talk a little bit about your cash flow cadence for the balance of the year? Just trying to reconcile any additional contribution to make this to the Government receivables delays, and any advance payments on the bookings front?

Sure, Chad. So, as we said, the results were negative in Q1, which is part seasonal and part issues with transitions in our GS segment. We do expect to have a much better performance in Q2 and to produce positive operating cash flows over the balance of the year. Predicting exactly which quarters is hard for cash flow, but the trend should be favorable from Q2 and there on for the rest of the year. The Ichthys elements are actually not affecting cash flow from operations; that's all in investing activities. So, those loans that we are making to the joint venture are not part of that equation.

Got it. And then...

Yeah, go ahead, Chad.

And then, on – just in terms of like your opportunities on the Hydrocarbons side, if you look at your pipeline going forward, how much is cost reimbursable versus fixed price? And then on the SGT, can you just talk about, on a go-forward basis, how should we think about the contribution to earnings here?

Yeah, I mean, we don't really look at the, I guess, the balance of reimbursable cost-plus to fixed price in the Hydrocarbons sector. We look at it very much what is the right risk tolerance and what sort of deal can you negotiate or can you win. So, we are bidding some fixed price contracts, I mean, it's well known in the marketplace, some of those, and we've obviously got the LNGs that we talked about previously. So, I mean, just from the – if something like Magnolia went ahead, and there's a quite a lot of bullishness (52:24) from them at the moment and off-takes, as I said earlier. If something like that went ahead, you can see the mix changing almost overnight and just because of the scale. And so, I think, the – so, it's difficult to set a target in that sense. I think what is more important for the market to understand is that we'll maintain our commercial discipline through this to try and ensure that we don't have the historical volatility or even the recent volatility in some of our peer groups. Our drive here is to make sure we sign up to work where we can make money.

SGT, real quick. I think we said annualized revenues, full-year annualized revenues for SGT are on the $500 million to $600 million range. We acquired yesterday, so there's a pro-rata piece for 2018 to apply to that, of course. We also said margins are normative in asset-light work, which means mid-single digits. We'll apply some amortization against that, of course, as earlier stated. And we talked already about the modest accretion for this fiscal year to the earlier question, so I think that scopes out SGT.

And our next question comes from Jerry Revich from Goldman Sachs. Go ahead. Jerry Revich - Goldman Sachs & Co. LLC: Hi. Good morning, everyone.

Hi, Jerry.

Morning, Jerry. Jerry Revich - Goldman Sachs & Co. LLC: I'm wondering if you could talk about your assessment on LNG project cost over-runs that the industry has had. Outside of labor inflation, we've also seen fabrication delays and changes in scope. And as you think about the fixed price bids that you were just commenting around earlier, Stuart, how can you set up the structure to protect yourself against those other areas that had been a headwind for the industry in the past couple of projects?

Yeah, I mean, I think the biggest headwind and, I guess, the most recent projects have actually been in Australia, the most recent headwinds are really around labor and really risk around productivity and union activity, et cetera, and continuity of labor, because in remote locations, you're sort of flying people in and after a couple of weeks they're flying out again, and a new crew comes. So, there's a continuity productivity risk associated with that. I mean, I think each of the LNGs have their own, I guess, nuances of what's gone right and what's gone wrong. The modules in the main are contracted out on a lump-sum basis, so you pass down that lump-sum risk. It's a fairly tried and tested pathway. The Chinese yards, et cetera, they are doing the majority of those today. The tried and tested yards are very much up to speed and are performing well, in our experience, and I think others' experience as well. I think the other LNG contractors would also conclude that. But, I mean, you have to do it a few times before you get it right and they're now through that hurdle. So, I think, the main overrun risk, I think, the main sort of area of concern would be around the productivity of labor and the labor risk associated with it. If you look at Canada, you've got the – Canada is unique with this First Nations issues. You got severe weather swings obviously throughout the year, et cetera. So, that compounds a unionized workforce that works on a two weeks rotation of fly-in, fly-out. So, it's got everything around it that needs to be looked at from a risk, and will be quite high levels of concern as we were looking at that element. I guess, that's why I was sort of saying in somewhere like the Gulf Coast where that's not fly-in, fly-out, it's very much a very known productivity market. We know a lot of the people obviously that work for us today, and in the broader contracting community, the sort of A teams, if you like. And so, it's a very much a known quantity and I think that's where you can actually take a little bit more risk. Jerry Revich - Goldman Sachs & Co. LLC: I appreciate the color. And separately, Mark, on the Aspire transaction that formalized, call it mid-April, can you just update us on the level of non-recourse project debt and just talk about how we should think about that on a run rate basis?

Well, the non-recourse debt to the project hasn't changed. Nothing has changed relative to the financing of the project, relative to recent events. So, I think the non-recourse financing is between $1.8 billion and $2 billion on the project. The project's performing extremely well and servicing that debt without a problem. And there is absolutely no change relative to the non-recourse nature of that debt to us. So, I think, that's really the key point, and no changes expected to that.

Yeah. It's probably worth just clarifying that at that sort of topco level that Mark explained earlier, where we hold 45% equity together with other sponsors, Carillion is not part of that, you know that. So, their liquidation did not affect that topco, and the slightest, and that's why our position, as Mark said, our interface with the lenders, et cetera, has not changed in any way.

And our next question comes from Michael Dudas from Vertical Research. Go ahead.

Good morning, gentlemen. Just one question. When you layer in Aspire, SGT, maybe probable success at LOGCAP, can you compare and contrast the organic growth rates longer term from your U.S. business relative to your international business?

That depends on how you define U.S. versus international, because LOGCAP is performed internationally, but funded domestically. So, we should clarify that. But I think our overall growth rates are strong in each of those two markets, international and the U.S., both on a funded basis and a performance basis. I think singularly, at this point in time, LOGCAP probably represents the largest single organic growth driver for that portfolio and that is either international or domestic depending on how you define it, where...

I understand.

...where on the Aspire – yeah, okay. And on Aspire, I think that we haven't talked about this much, but it's a steady predictable program, but there are opportunities for scope increase there, if the government and the Ministry of Defense wishes to further their efforts and facilities modernization and things like that, so we're certainly well positioned to capitalize from that beachhead if those developments occur.

I thought that's very helpful. I appreciate that, Mark. Thank you.

Yeah. Thanks, Michael.

And our next question comes from Brian Ruttenbur from Drexel Hamilton. Go ahead.

Yeah. Thank you very much. So, a couple of quick questions on the Government Services side, first. I want to understand your internal growth, what's going on, is it up-tempo activity on the logistics side in the Middle East that's causing this great internal growth? Is it just winning business from competitors, and can you mention who you are taking business from? So, that's kind of the phase one, and then, I have a follow-up.

Yeah. So, I think, I said earlier that we – this was no just – was not just one contract, it was across really our portfolio. So, we're doing well and our logistics business, there's an uptick, it continues in the Middle East, and I think we said that probably every quarter for a number of quarters and that continues. So, our logistics business is going very well. We've, obviously, had wins in places like Diego Garcia, et cetera, and we had the odd (01:00:50) takeaways from incumbents there. So, there's been a good mixture of winning re-competes like Djibouti. There's good sort of success and takeaways and I think good growth on existing contracts in the logistics side. Mark mentioned, and I think, I covered it as well, that our Engineering business is doing very well. It's got some really smart contract mechanisms to allow what to flow through in an expeditious way, I think it's really – has really helped us grow that business, and we highlighted a number of Engineering wins through the quarter there, so that's also going really well. And in terms of our space – science and space business, that's a pretty steady business there. No real ups and downs, just a nice steady performance. But clearly, with the introduction of SGT, that really, really changes. And what I would say as well is that, we're bidding a significant amount of work in the space business more through what we've acquired in SGT in their own right. And I think the government spending in both with NASA, but also in the Military side of space and the Intelligence side of space, and we're seeing a lot happening in the commercial side as well with what's happening with space, science, et cetera. So, we're feeling very upbeat about space in isolation, but really the tailwinds across government spending, I think, we highlighted, and I think you'll hear this from many of the Government Services and I guess some of the OEMs as well, really across the U.S. government is – it's an exciting time to be part of that business.

Okay. And then, my follow-up is, SGT, as I understand it, there was no revenue impact in the first quarter, please correct me if I'm wrong, but SGT should add $500 million annually, is it a smooth, it's typical Government Services where it's down in the fourth quarter – fourth calendar quarter and that ramps throughout the year, just trying to understand the modeling around SGT and integration there.

Yeah. You're correct in your assumption, there was nothing in the first quarter, because we just closed the deal yesterday. So, you'll get to see revenue coming through. You're right; it's a $500 million type revenue type business going forward. And it will follow the traditional profiles that you expect in Government Services.

Yeah.

And our final question will come from Brent Thielman from D.A. Davidson. Please go ahead. Brent Edward Thielman - D.A. Davidson & Co.: Yeah, thanks. Good morning. Just quick, did you guys indicate what the consolidation of Aspire did to backlog this quarter? Brent Edward Thielman - D.A. Davidson & Co.: No, we haven't.

We have not. But it's just short of $3 billion...

Yeah.

...kind of added backlog that will occur in Q1 – did occur in Q1, and that's why the reported backlog went up by that plus, plus what is reflected in our organic book-to-bill. Brent Edward Thielman - D.A. Davidson & Co.: Okay. And then, just second question, you guys talked about in Government kind of high-single low-double-digit margin expectations, I presume that's still the case in guidance going forward. Did SGT and Aspire, I guess, inclusion of these, wind you toward – more toward one-end of the range?

No. I think we're still thinking in the high-single digits.

Correct. There can be some confusion on that, because Aspire is transitioning from all equity and earnings to a mix bag of equity and earnings, and it will fashion gross profits going forward. But those two dynamics kind of balance out and are fairly neutral to the margin impact to GS by itself relative to the change we just went through in Aspire. So, as Stuart said, the existing targets are still good through the recent developments.

And I would now like to turn the call back to Mr. Stuart Bradie for any additional or closing remarks.

I'd, I mean, just thank everyone for their participation today. And yeah, we look forward to the rest of the year. Thank you very much.