Good day, and welcome to the KBR Incorporated Second 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. There will be a question-and-answer session immediately following the prepared remarks, and you will receive instructions at that time. For opening remarks and introductions, I would like to turn the call over to Alison Vasquez. Please go ahead.

Good morning, and welcome to KBR's second quarter 2018 Earnings Call. Joining us today are Stuart Bradie, President and Chief Executive Officer 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. After these remarks we will open the call for questions. Please refer to our earnings presentation posted on our website in the Investors section of kbr.com. Today's call is also being webcast and a replay will be available on KBR's website for seven days. A press release announcing our second quarter 2018 results and our second quarter Form 10-Q will also be available on the website. Before I turn the call over to Stuart, I would like to remind the audience that today's discussion may include forward-looking statements, 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 second quarter 2018 earnings press release, our second quarter Form 10-Q and our current reports on Form 8-K. You can find all of these documents on our website at kbr.com. I will now turn the call over to Stuart.

Thank you, Alison and good morning and thank you for joining us. As you may have noticed there was a different voice during the introduction this morning. I would like to officially welcome Alison Vasquez to the role of Vice President, Investor Relations and FP&A. Nelson, Nelson Rowe has decided to take a role outside the company. He has done a terrific job for KBR over many years and we wish him all the best. Now if you could turn to slide four, safety. Good safety is simply good business and it's often a key indicator to execution performance. Execution excellence and strong HSSE performance is delivered by all of KBRs 34,000 people, all day, every day. It requires unwavering commitment, professionalism and leadership. Our execution over the last six quarters has been consistent and predictable with no surprises going hand in hand with our safety performance. As an example we have recently celebrated over 25 million man-hours without a lost time injury in Djibouti, where we run the base for the Department of Defense. This represents five years of continuous 24x7 operations. This is quite an accomplishment and just one of the many outstanding safety performances achieved in our culture of Zero Harm. And I wish to thank all our people on this front. Now on to slide five, financial snapshot. It’s a really, really good time to be part of KBR. Our end markets in all segments are strong. Our execution is consistent and delivering targeted margins. Our safety performance continues to trend favorably and we are seeing industry-leading double-digit organic growth in Government Services and a strong to book-to-bill for both our Hydrocarbon Services and Technology segments. We successfully completed the strategic acquisition of SGT solidifying KBR's position as a leader in space exploration and opening up…

Thank you, Stuart and good morning. I will start on slide nine covering the consolidated results. Upfront I would like to clarify on what's in the numbers given our recent M&A activity. Q2 2018 includes a full quarter's worth of the accounting for the Aspire Defense joint venture, having taken full operational control of the program back on January 15 of this year. We own 100% of the subcontracting entities that perform all the operational roles on the program. In addition we continue to own 45% of the prime contracting entity under the Aspire program. As disclosed last quarter we will report revenues and gross profits from our operational role and equity in earnings related to our 45% equity participation in the prime contracting entity. To add more perspective on Aspire, the financial impact of the program collectively is quite significant and positive for our outlook. The underlying Aspire PFI contract goes out another 22 years and cannot be terminated for convenience by the customer unless the May coal payment is made. So this clearly adds security to our profit streams under the program. Our performance on the program has been strong and we do not see the risk profile changing significantly in the future. To take in together our two levels of participation on the program provide long-term recurring and predictable profit and cash flow streams which collectively represent approximately one third of the total Government Services EBITDA and 20% of KBR's total EBITDA calculated on a 2018 basis. The program also has work inflation-based escalation provisions plus opportunities for scope expansion with our end customer of the UK Ministry of Defense. As for SGT, the acquisition closed on April 24, therefore Q2 has about two thirds of a quarter's activity at high level Aspire and SCT are performing…

Thank you, Mark. So on to the summary slide. For the sixth quarter in a row we produced consistent unpredictable results. Revenue growth, both organic and liquidative, combined with strong margin and cash flow performance are strong indicators that KBR is on the right track. Bookings were strong and the market outlook across all three segments is buoyant. Our performance in the first half of 2018 coupled of course with secured bookings for the second half and favorable market conditions have allowed us to raise guidance. 2019 is already shaping up to be a good year for KBR, assuming of course we continue to convert opportunities and executive well as we’re doing over the last six quarters. So that concludes today’s presentation, and I’ll now hand it back to the operator who will open the call up for questions. Thank you.

[Operator Instructions] And we'll take our first question from Anna Kaminskaya from Bank of America. Please go ahead.

Good morning, guys. Good quarter and maybe we can start with your backlog outlook. First touch on Government Services backlog it was down sequentially, I think a little bit of just a small surprise given that you’ve been growing consistently. Can you talk about kind of the pipeline, I think you highlighted $9 billion of potential awards, kind of how quickly can you convert it into backlog? And is it just the timing that the backlog was down, if you can just talk about the outlook through the rest of the year? And then I’ll have a followup question.

Hi it’s Mark. Let’s start with just one piece that's important relative to the backlog in GS for this quarter. Given the magnitude of business we have overseas we did have a foreign currency hit in backlog in Q2 it was about $500 million. And so when you take that out we actually had positive bookings before that, so perhaps we could have made that clearer. So that does ebb and flow with currency rates, but the stronger U.S. dollar was the catalyst there. Relative to the pipeline of $9 billion, as you know we have LOGCAP V in there that’s a significant component. We expect a decision sometime in the second half, although it’s possible that it slips into next year. And we also have a couple of large bids in NASA, both from our recent acquisition and ourselves prior to the acquisition one of which is NASA SENSE. So we’ve talked about that one. There are some others and the timing of those is hard to predict, but we certainly expect some activity in the second half relative to the full $9 billion whether its Q3 or Q4 it’s hard to predict.

Okay and then just the pipeline of your opportunities in Hydrocarbon Services. I think you highlighted some of the large awards in July already A) is it possible to quantity the July awards and secondly, tell us how do you think about the opportunities particularly on the LNG side? I think this is one area where everybody is excited about, kind of like how do you think about your ability to win award given your risk appetite is probably not as high as maybe some of the other E&C companies?

I think, the overall market Anna is improving. Let us talk about LNG just specifically for a sec. I mean, there is no surprise that the supply/demand I guess lines are now moving towards 2022, there is a lot of I guess positive momentum in the sector. And quite frankly, our sort of risk tolerance in LNG, I mean just to make it clear, we don’t want to take lump sum construction risk where it’s a high wage rate environment that’s heavily unionized with temporary labor. But outside of that, if it’s in Africa or it’s on the Gulf Coast which is non-unionized and yes we’ve got our own blue collar construction workforce, we are prepared to take lump sum risk because we fully understand it. But we’ll only do that if we’re heavily involved in the front end design and have a very defined execution plan that is properly priced et cetera and we’ve been very consistent in our messaging. So, I mean the statement around us of not having the same appetite as others only really applies to places like Canada or to a certain extent there was high wage rate type countries that are heavily unionized and you’ve got fly in and fly out type workforce and terrible weather. And quite frankly taking lump sum risk in that environment is something that we feel is not for us. But elsewhere I think we’ve got the same appetite as others and where we feel it’s appropriate we will go after those opportunities with vigor. And we’ve got a slew of them on the books today as we’ve talked about things like Nigeria, LNG and others on the Gulf Coast that you’re well aware of. So we are excited about LNG. We feel that there’ll be quite a bit of work in that arena for the companies involved which include ourselves. So in terms of the broader oil and gas market, I think we continue to see a lot of activity in North America. We announced COTC last time crude oil to chemicals in Saudi Arabia which obviously there is quite a bit of work happening in the Middle East as well. So as I said it’s a good time to be in that business. I think we don’t have any other legacy issues to deal with outside of Ichthys which I think is fairly well ring fenced and it’s very close to the end. And so, we are in really good shape in terms of being able to look at that market and are winning work in a series fashion with strong book-to-bill ratios with a risk profile that we are happy to take on. And that should give the market confidence that we can deliver the margins that we set out to achieve and takeaway the typical volatility of the E&C performance.

And anyway to quantify your Nigeria 7 methanol awards in July, how much of it is in the backlog in there?

Yes, I mean I think the key piece there it’s really the harder position for 2019. We talked a lot about –we talked about three or four opportunities that are going through feed and EPC pricing today that will convert into sort of procurement and construction works as we move into 2019. So that’s when the uptick – that’s when the growth will truly come back into that business. So I think that’s the important takeaway today is although the backlog is growing, although the opportunity set is very much in our wheelhouse and we’re delivering on that. I think the important takeaway is position us for growth in that sector going into 2019. So I think that’s the important takeaway.

And we will take our next question from Jamie Cook from Credit Suisse. Please go ahead.

Hi, good morning nice quarter. I guess two questions, Stuart. You guys just mentioned 2019 several times and obviously your backlog is shaping up to show some pretty good growth. So as you sit here today, I’m just wondering how you’re thinking about your longer term financial targets and the potential for you to actually achieve your – the breakout potential that you outlined at the Analyst Day in which segment Hydrocarbon Services or Government are you feeling more optimistic about? And then my second question, just I appreciate the update on Ichthys, but any update in terms of potentially settling and where we stand relative to the $600 million in subcontractor potential recoveries? Thanks.

Okay so interesting question Jamie on the breakout potential because right now we feel the breakout potential is achievable in both segments with the growth is happening in our Government Services business we’ve achieved a 11% organic growth for the second quarter. And we’ve got substantial bids over there that $9 billion pipeline and an award and something like LOGCAP V that went in our favor we would achieve that breakout case. So that’s very much within reach if things go our way and we continue to perform. And then again on the Hydrocarbon side the breakout case was really related to really sort of winning probably a fair share in the downstream sector which we’re doing and then one of the LNG is going ahead in the timeframe that we’re working on and I think that that’s all achievable. And so that's way I stared on the question, that's the way you should think about it, yes I mean it's a very exciting time to be part of KBR and at the same time our Technology business it ramps up in 2019. Yes.

Okay, so we should start thinking about the breakout potential in 2019 to be clear assuming these awards hit?

Yes, and as Mark said LOGCAP V for example is scheduled to be awarded in the second half of this year, but it could slip, it could be tested and it could slip to first quarters, or the second quarter next year and the LNGs themselves as they move into FID and they move along again could be late this year, that could be early next year but that's how we're thinking and so we're gearing up for that piece of the market.

Okay, great and then sorry just on Ichthys and the subcontractor recoveries anything there?

Yes, I mean we continue to progress discussions with the customer, but I think at this point their primary focus is obviously to get the facilities finish which we've all but done and but they're having some issues offshore. So I think the sort of the key discussions there will be a little bit later this year when they - even they move forward with I guess first production once they get gas from resolving their offshore issues into September. And then I think when they start generating revenues the discussions around settlement obviously will become a bit more positive as the facilities are running and there is cash coming in for the customer. So that's kind of where our thinking is going at the moment, the facilities, the work has progressed very, very well. The safety performance has been very, very - it has been absolutely outstanding for us too. So yes, we remain pretty upbeat that we will get there over the course of the next six months or so.

Now we'll move to our next question from Tahira Afzal from KeyBanc.

Hi folks and congratulations on a good quarter.

Thank you.

So, Stuart first question, I know you have three large fairly large sized LNG projects that good FID and contract to you let's say within the next six to seven months. You know ideally $8 billion and that does not include Magnolia. So can you or Mark sort of quantify what kind of advance payments you could potentially get from that if that does occur? And because I assume you will be more than $600 million just doing that math. And what that would mean for some of the cash flow outlook that you've provided for the second half of the year going forward?

Yes, I mean I think you're right. You're looking between $600 million to $750 million of advance payments under those - under that scenario, so this to happen [ph] and in terms of our cash flow forecast we haven't forecast any of those.

Okay, so still would it be fair to say that could have retire the debt you've taken on a little earlier perhaps and also add to your breakout scenario the next by ready lowering interest expense?

Yes, I think that is yes and of course it’s all connected to timing, but you're absolutely correct. If those LNGs progress this year and we got the advance payments that retains are sort of our profile significantly on the balance sheet.

Got it. And Stuart, to the extent you can comment, I mean obviously the step up function in LNG demand in terms of contracting community has been fairly notable and very rapid what has that meant incrementally for the terms that you're bidding on going forward?

I mean, I don't think the terms themselves are really changing so much. It is just whether you want to, like we talked before about Canada whether you want to take that particular risk or not. And if some companies want to do that they will and their client will take advantage of that. But I think what it does do is it gives multiple opportunities and I think by default the pricing changes a little bit in the benefit of the contractor, and as people shops get filled up if their results base gets busy choices lesson and as a consequence of that you do better. Sometimes it is not good to be first, it's sometimes it is not good to win the first one. And so, I think, I don't think we’re seeing so much in terms of terms, but we’re getting more realism in the market in terms of schedule and we’re getting more realism around the fact that funded liabilities and things like that. So it would reflect itself in the pricing and that sort of thing. So, but suddenly the conversations are changing and certainly they are becoming far more serious and heightened in terms of the belief that these things will FID and the second thing is that level of I guess continues to see and funded liability that is billing to the pricing is getting back to sensible sort of market levels.

And our next question comes from Steven Fisher of UBS. Please go ahead.

Thanks, good morning. You guys have certainly come a long way here. Related to margins can you just help us with how much the close out in LNG was in the quarter and may be can you give us a sense of what the margins embedded in the Technology bookings are versus what you reported in the quarter?

Okay, Mark you probably, can you answer that?

Yes, the LNG project referred to was something’s where we had a performance test in the second quarter which was the trigger for releasing that we had already long time ago in fact received the cash on that. Net-net which is the gross impact minus the NCI because in this case we were consolidating a joint venture but we only owned about 51% of it, so there is a big NCI component that was about $5 million, $6 million impact which it moves the needle a little bit on margins. But we have adjustments like that all the time in that HS business as we undergo some of these larger projects, so we'd not call it terribly unusual and we're generally expecting margins to be pretty consistent net, net in that business over the course of this year. The margins embedded in the yes Technology.

On the technology side we've had outstanding margin performance over the last two quarters in Technology of close to 30% and with the bookings that we are receiving today certainly underpin our guidance of going delivering mid 20s for the foreseeable future. And I think that’s probably the right answer at this point Steve, to say that, we're very confident of delivering our guided margins in that business which we increased from low 20s to mid 20s last quarter.

Okay, and then Mark, how high do you think that leverage is going to go before it starts to come down and when will it start to come down, have we hit the peak right now?

I don’t think so, I think as I had said all along we would drift a little northward in Q3 and Q4 as we tap the rest of that dedicated line to fund Ichthys and so I think the debt number will outpace EBITDA by a little bit and will creep up. I still expect it to be in the mid 3 zone relative to growth leverage ratio. And depending on things like advance payments and so forth that was just discussed in the last dialogue with Tahira I think we have a shot at reducing debt in the fourth quarter and if not then expect soon thereafter Q1, Q2 of next year and large down toward something like through low 3s, or 3 or might even dip below that by the end of 2019.

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

Hi, good morning everyone.

Hi Chad.

So I just wanted to dig into your cash flow, so it looks like you raised your net income guide but the cash flow guide the same, so I just wanted to get a sense for what are the moving parts there, was there may be a more expected use of working capital and if so which of that? And then secondly on the Hydrocarbon Services side, how sustainable do you think your two times book-to-bill will be as we look through the rest of the year, do you think you'd continue growing backlog sequentially?

Okay, well I’ll take cash flow. Chad, thanks for the question. So we had a pretty rough first quarter as you'll remember. We did indicate, we expect a recovery in Q2 that did occur. We are still negative on a year-to-date basis and so we've got to hit stride in the second half. The composition of going from where we are now negative 35 year-to-date to the guide is we got about $100 million of net income in the second half ballpark and about $30 million of EBITDA sorry [indiscernible] so you got cash earnings of 125, 130 and in addition to that we do have some specific retentions on a couple of projects we expect to bring in which should notch down DSOs a little bit in those sectors, plus some other upside. So we have a pretty wide range of 125 to 175. With the size of that range and the modest uptick in EPS guidance we didn’t think it was prudent to change the cash flow guidance at this time, but there are opportunities I have mentioned in my early remarks about ongoing DSO reduction across our business. Those efforts will remain high going forward and never stop and hopefully we can do real well in the second half. But generally speaking, absent the Q1 episode we have in come mostly M&A and systems conversions related things we expect cash conversion related to net income to be in that 1.0 zone longer term and that’s our game plan.

Okay, and then I guess the second part was really around the ability to sustain a book-to-bill in Hydrocarbon Services of above 2. I mean, if you put it in context if one of the LNGs goes ahead I think that’s more than achievable then would eclipse the 2 number. I think the level of activity in the marketplace and our ability to convert the feeds that we're doing today into the EPCs would certainly support a continuing trend of that fashion.

That's helpful. And then just going back to the $9 billion of bids in Government Services, can you actually specify how much is LOGCAP V and then also how much do you expect to receive in 2018 and whether the remainder is new bid or re-compete.

Yes, Mark you go ahead.

Yes, for competitive reasons we don't think it's wise to disclose the LOGCAP V number, but it is several billion and we'll leave it at that there. There are others in the pipeline that are sizable, including one or two that are north of a billion as well. So there are some needle moving items. We're certainly hopeful that we can see some decisions in the second half on some or even all of them. Relative to just a few of those that are really big, LOGCAP V is a recomplete but it is an expanded recompete because the areas in which we are currently incumbent do have greater scope by the construct of the procurement, and so effectively retaining what we have and how that's come out can and should lead to a modest, I'm sorry not modest, but a material uptick in our revenue run rate there and that speaks to the potential breakout opportunity that Stuart mentioned earlier, given how that procurement is constructed. And then the other ones that are in the pipeline that are big are basically all new work and so those represent significant growth opportunities as well. Of course there are some re-competes in there in the $9 billion, but in terms of the real big ones they are either new or expanded re-competes which is exciting.

And our next question comes from Andrew Kaplowitz with Citi. Please go ahead.

Hey good morning, guys. Nice quarter. Stuart obviously you had strong hydrocarbon bookings in Q2 as you guide to last quarter, but could you give us a little more color into the conversations you're having with customers, regarding large capital projects just in the wake of the protectionism stuff that's come up over the last couple months? And maybe you also referred to your Technology business which we know has decent Chinese exposure, it doesn't seem like any of your customers are that hesitant based on your booking last quarter, but maybe just talk about if the landscape, what's going on in the landscape over the last couple of months, given the increased volatility that’s out there?

Yes you are quite right. There is very little conversation in terms of technology, the customers are not wary of that in the slightest and I think there is quite a bit of dialogue going on between the U.S. and China on IP protection which is probably a good thing in the long term for the U.S. and technology and really for getting business in China. So, but no restrictions there at all, so we don’t see any change in that market dynamic. In fact it is picking up as we announced particularly in things like polycarbonate and some of our other new technologies which is great. In terms of the discussions around tariffs of some protectionism that’s ongoing in things like steel and aluminum, et cetera, our exposure to that is very, very minimal and in most cases in fact all cases it’s dealt with under the contract it doesn’t change and so if tariffs eroded [ph] don’t today it's a change in law or a change in commercial circumstances that we are not exposed to. It doesn’t seem to be slowing down the appetite in terms of doing modules and things in China and bringing equipment in from China, it does make the local environment however also competitive, so it gives more options. So, I mean all up, it may put a little bit more pressure on to the cost base, but it’s not putting such a pressure that it’s actually causing the customers to think twice. Just it’s not really sort of changing their views to whether projects or economic or not, it is not causing that much of a change and what that we’re looking at anyway and for ourselves we've got minimal exposure in any sort of change of tariffs or imposed restrictions.

Thanks for that Stuart. And then last year at your Analyst Day you guys had mentioned that you could hit $300 million in annual synergies for larger Government Services acquisitions that you did already in HTSI, Wylie. Obviously it is tough to disaggregate the good growth that we've seen over the last couple quarters, the low teens, organic revenue growth and whether it’s share gains or just the Governance Services market. But how do we think about, if we could looking back at that sort of synergy target and looking at that 11% would you say it’s more share gains when it comes down to it or is it just strong growth in the underlying market as you mentioned?

Yes, its - I mean we’re very pleased with the share gains, I have to say that off the back. But is a combination of both, I mean I think we’ve talked about the fact that a lot of what happens in government and what they call citable past experience. So, as you layer in through the acquisitions that certain relevant areas of expertise and past experience and that just strengthens your positions on these bids and so we do look at the collective today. There is absolutely no doubt that our performance would not be as strong without the growth in citable past experience under technical expertise that was brought to bear on some of these bids. So I think it’s really a combination of both when we do the analysis and we look internally we’re very, very happy with I guess the combination and where our business is positioned today and I think that’s reflective in the overall organic growth which I do believe is above market today.

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

Good morning gentlemen and welcome Alison.

Thank you.

She is officially on the Board. So just two thoughts first, looking at you did indicate in your last prepared slide that you had 90% of earnings covered by backlog at the end of Q2, what’s needed to get you comfortable with the full year and where you are now to your current backlog? And you did talk about quite a few good opportunities in our discussion this morning, just early on indications where you are versus other years since you’ve been there Stuart, how you feel about cover into '19 to '20?

Yes, so I mean, what do we need to do to get the rest of the year, I think we’ve pretty confident in the rest of the year, that’s why we've raised guidance. I think, I just, I mean that’s a significant sort of underpinning of that result today. So we’re not too concerned as really building backlog for '19 and I think just with the levels of success we’ve had in recent times we’re getting obviously increasingly confident that '19 is going to be a stellar year for KBR. And Jamie raised the sort of the breakout case that we presented back in our Investor Day is one in Government and one in Hydrocarbons and there is an opportunity to do both at the same time. So I mean if that comes to bear the level of backlog going into '19 and further into '20 will be substantially different and that being the case it will also be just given our commercial discipline with the risk profile that give us confidence on margin performance and I think if we can get that right then I think we'll be feeling pretty good about life.

And relative across your two major divisions GS and HS, where you are on the labor front given that there is quite a bit of opportunity in backlog that you might be able to book and therefore needing to fulfill, how do you stand on from a labor hiring professional front are you seeing more talent come in, is it a more competitive marketplace, or just how do you feel relative to being able to generate those man hours to burn those revenues?

Yes, I mean we just did an internal workshop in our Government business just around that various subjects and came away very confident that we could recruit, promote, attract the talent that we need to do what's in front of us, so I feel really good about that and we’re doing similar exercises on an ongoing basis in Hydrocarbons and remembering that the LNG piece that we're chasing we’re looking at some executed at the U.S. and some executed at London. So it's not all in one center, so we certainly have got two labor markets that are very, very mature to tap into. So again no concerns on being able to recruit the talent and the labor that we need to do the work that is in front of us in that sector either.

I'll just add that the, sorry. You know more of the work that is planned for Hydrocarbon Services projects is through increased modularization solutions through the fab supply chain in the Far East, and so that does dampen the requirements for construction related personnel in the States or in Australia wherever the end project may be. So that shift has been very helpful relative to the supply/demand issues on Labor.

And we'll take our next question from Brent Thielman from D.A. Davidson.

Great, thanks. Mark, should this higher level of NCIs sustain another quarter or with this job complete that should mostly be behind you?

This should end any real significant NCI, so that joint venture, this is really the last transaction we expect from that and it was sizable given the nature of the ownership and the project itself, so we don't expect a lot of NCI impact going forward.

Okay and then, I guess just understanding the moving pieces in government backlog what was SGT's contribution? And then can you just talk about the pace of new wins or awards in that business, is it consistent with the core KBR franchise?

The SGT was a range of between $500 million and $1 billion, just to give you a range of that, in terms of how we define backlog and that business as you know is concentrated with NASA relative to its customers set and that customer funds incrementally and also as a heavy user of options on their projects as well. So under our definition again between $500 billion, but in addition to that their book of business includes well over a $1 billion of unexercised options that we consider is a book of business and based on their track record they've got an excellent ability to ultimately convert those to revenues. So through a combination of the strong backlog under our definition plus the various significant options we have great visibility in that business.

And we'll take our final question from Jerry Revich of Goldman Sachs.

Hi, this is Corinne Jenkins on for Jerry Revich. You highlighted an award in the Hydrocarbon Services business for increasing sulfur derivatives, is that associated with compliance with the IMO 2020 regulations and can you talk about how you're thinking about the size of opportunity for may be that or if you feel like there's a sizable opportunity there?

Yes, I mean there's something the new Maritime laws are obviously driving the reduction in sulfur in maritime fuel as you’re well aware and we've got a number of technologies that really enhance bottom of the barrel production in line to meet those legislative changes. So we're seeing a lot of activity in our technology business associated with that change. And we're seeing, I think quite an increasing opportunity to modularize our technology, so really expand as Mark said the end-to-end solution associated with that and we see that continuing through into next year. So I think high-end demand and continually to be in demand.

Great, thank you.

And this concludes today’s conference. Thank you for your participation and you may now disconnect.