Ladies and gentlemen, please standby. Good day, and welcome to KBR, Inc. Second Quarter 2021 Earnings Conference Call. This call is being recorded. As a reminder your lines will be in a listen-only mode for the duration of the call. [Operator Instructions] For opening remarks and introductions, I would now like to turn the call over to Alison Vasquez, Please go ahead.

Good morning and thank you for attending KBR’s second quarter 2021 earnings call. Joining me today are Stuart Bradie, President and Chief Executive Officer; and Mark Sopp, Executive Vice President and Chief Financial Officer. Stuart and Mark will provide highlights from the quarter and then open the call for your question. Today’s earnings presentation is available on the investors section of our website at kbr.com. This discussion includes forward-looking statements reflecting KBR’s views about future events and their potential impact on performance as outlined on Slide 2. These matters involve risks and uncertainties that could cause our actual results to differ significantly from these forward-looking statements. These risks are discussed in our most recent Form 10-K available on our website. I will now turn the call over to Stuart.

Thank you, Alison, and thank you for your interest in KBR and joining us today. I’ll actually start on Slide 5, because you’ve seen Slide 4 many times. Now, we’ve presented on a number of sustainability topics over recent times. And I’m proud to report we continue to make excellent progress across all of our sustainability program pillars. And that’s our ESG story is not only resilient, but strengthening. And as you will see later it’s very, very aligned with shareholder value a key differentiator for KBR. All that said, I think it’s really important to periodically come back to basics and look at our core HSSE performance. In this change world, we are still employing best practice, and we’re really still doing that. And now we ensuring we’re looking after ourselves and those around us in the same way we did pre-COVID. So, driving expectation that Zero Harm is achievable through our organization, as delivered meaningful results, as outlined here, and you’ve seen that before. But this belief remains a core within our values. And as you can see from the stats of safety performance was actually exemplary, even through COVID, which was a time when our people were of course, distracted by COVID itself. We couldn’t get the level of leadership or visible leaderships and some cases, rotations to bases, et cetera and sites across the world, and of course, our people like everyone else to adapt to new ways of working. And priorities changed of the world change with more emphasis on things like mental fitness, for example. So really, these results are simply the outcome of our strong culture, and our people’s commitment and really, it’s an amazing performance. So a big thank you from me to our people across the world, you really do make…

Great, thank you, Stuart once again, and I will pick up on Slide 11. The snapshot of our core financial performance in Q2 2021 shows terrific progress toward executing our strategy and also delivering on our long-term goals. We produce strong top-line growth, reflecting how we have positioned KBR to tap quite attractive end markets. Revenues exceeded $1.5 billion with double-digit growth year-over-year. As Stuart said, new business awards and options amounted to $1.9 billion and then of course, further signal strength of our offerings and also our end markets momentum. Adjusted EBITDA came in at $156 million. That’s up almost 50% from last year, 50%, with EBITDA margins at 10% and also with both segments at or above targeted profit margin levels. This translated quite directly to the bottom line that adjusted EPS up about 50% over Q2 last year, at $0.58 for the quarter. Organic growth in GS, accretive acquisitions and higher margins are driving this level of growth and profitability. We’re also pleased to report solid cash flow and free cash flow conversion of about 100% year-to-date and 120% for Q2, nicely at or above our targets. Year-to-date adjusted operating cash flow of $165 million and free cash flow of about $150 million is above case for the first half and as I’ll cover shortly, the basis for bumping up guidance for the year. Continued strong bookings and the Centauri acquisition are driving the nice trend you see here in year-over-year backlog growth. The total backlog an option value of $20 billion represents over 3x, our current annual revenue run rate, which as we have said before demonstrates the strong visibility in our forward book of business and enables good confidence in our growth outlook and also are longtime targets. There’s of course the very large pipeline…

Thanks, Mark and good job as ever. Now onto our final slide, Slide 16, so to summarize what we’ve presented today. In short, a high end Government Solutions business with a technology kicker, executing on strategy, which in turn has positioned KBR in attractive markets today, but also into the future. Our amazing people do things that matter. And they are delivering outstanding performance but also winning work in the right areas. Our pipeline fundamentals are excellent. We are confident about tomorrow, and have raised guidance as a consequence. We continue to work to de-risk the future and increase certainty. In short, we’re doing what we said, we will do. I will now hand over to the operator who will open the call up for questions. Thank you.

[Operator Instructions] We will begin with Tobey Sommer with Truist Securities.

Thank you. I wanted to ask a question about Sustainable Tech. If you look at the business now, how much is of your work is sort of strictly defined as sort of clean energy initiatives of the future versus and struggle and try to phrase this but sort of working for existing, less clean infrastructure in the improvement of it? How – if it’s possible to bifurcate in that way, could you help me?

Well, certainly the majority of what we’re doing Tobey is in the cleaner areas, all the technology portfolio is pointed that way. What we’re trying to do around our maintenance portfolio is really to help people decarbonize by being more efficient and in the advisory capacity it’s all about the future and looking at a hydrogen economy green ammonia or whatever that might take? So, I don’t think we’ve got quite a bit then I’d say it’s the majority of what we do today is in the greener side of the equation.

Excellent. And how should we think about any future to wind down have some of that business? What – when do you think we would approach the period of time, if it’s in the future, when there’s not a sort of a material drag from anything related to the market or internal choices you initiated last year?

I mean, we’re progressively working and then I think we said there was a couple of hundred million of carryover of revenue little margin work into this year, a little bit carried into next year, but not much. But it doesn’t detract from the story. And it doesn’t detract from the targets, the targets of, $1 billion circa plus business with margins in the mid teens still holds for this year. And that includes there was, we did say margins would increased progressively. And obviously, the walk off of that allows that progression of margins to happen really so. So I think all that lines up, so I wouldn’t even think about that. I think it just reinforces the story around margin increase as we move into next year.

Okay. And then I was also from a modeling perspective, hoping you could help me understand this seasonality, if any in Centauri, the 1Q to 2Q, sequential change in revenue, very pronounced, you talked about sort of your annual expectations, but is there some seasonality that you could help us understand for modeling? Or is this just normal pace contract awards, I guess a lot of things. Thanks.

Yes, I don’t think it’s seasonal, in a sense. I mean, obviously, we’re very pleased with the performance in Q2, and I think, that 30% growth, and really sort of sitting behind our acquisition sort of thesis, if you like, and the business models divided required Centauri and I’ll remind everyone that when we did acquire them, we did not factor in at all going beyond against the current phase in the directed energy program. So if that does progress, it’s all upside on that thesis. So it proved to be a very, very valuable acquisition, beyond is still a viable acquisition today. Never mind. But, yes, I don’t think there’s really seasonality. I think there’s just the cadence of awards. But we did say that was a very high growing business. And I think it’s proven to be the case, so we expect that momentum to continue into Q3 into Q4. And probably, well, Tobey, that probably follows the same cadence as the broader government, the Q1s a little bit slower, Q2 kinds of awards, picks up Q3 is the busy one, and then Q4 that drops off again as the move into the new budget cycle. So it probably will follow that, that same sort of pattern as the rest of the government business.

Thank you, Stuart.

We’ll now hear from Jamie Cook with Credit Suisse.

Hi, good morning, I guess just two questions. One, Mark, obviously, with Centauri going well, and the cash flow guidance being better and you’re feeling good about your liquidity. Just wondering how opportunistic you can be, or when we can start looking at, M&A again, to be additive to the story, and I guess, help you with your sort of longer term or the mid to higher end of your longer term, EPS targets. And then I just guess my second question, based on the backlog that you have today in the win prospects, as we’re thinking about, 2022, and your longer term target, should we expect, sort of steady growth to get to those numbers or, is the growth trajectory to achieve your longer term targets or more back end loaded? Thank you.

Okay, well, hello, Jamie, and looking forward to your headline tomorrow with a really quite innovative as well, starting today, I think. Thanks for the questions. And I’ll say that we’re really pleased with the cash flow performance of the company and our overall liquidity position. As I said, the development should they conclude what actually free up more capital. And as you probably are well aware, there’s quite a bit of prospective M&A activity in the government space today. And there’s always some on the Sustainable Tech side as well. So, I would say, our positioning and de-risking as has occurred over the past several years, it does allow us to be very constructive. Seeing the progress on Centauri, the teams done a terrific job with the integration of employees of Centauri are just fantastic. And they’re really part of the family now. So it does allow us to be more constructive. And we’ve got quite a bit of follow up firepower as our cash flow continues to be steady and as our leverage ratios come down. So yes, I think we can be, pretty bullish on the M&A outlook, provided it meets all our criteria. And we’re very disciplined about that. I think we’ve shown a good track record. So I do expect, as we’ve always said that there will be M&A activity on feature. And when that’s not immediately present, we certainly have firepower for buybacks, too. And we’re demonstrating that. So that’s how I’d answer the first question. And Stuart, you want to cover 2022 and long-term targets?

Yes. Thanks, Mark. I think, Jamie, we’re obviously very pleased with the start of the year. And I think, we’re probably outpacing many of our government peers in terms of growth. And as Mark said, in his prepared remarks, we were seeing double digit growth across the bulk of our sectors. And that there as well to achieving not only 2021, which we’re well on the path to getting, as I talked about, but obviously 2022 and beyond, and we’re certainly progressing well, we’re very confident of our 2025 targets. And I think what we’ll start to see, as we look into 2022, is just continued progression, I think, I don’t think it’s going to be an up and down, I think it’s going to be a very, predictable growth pattern as we continue to do work and execute. So I don’t think we’re going to see, any sort of big steps or big steps down and then a catch up, I think it’s going to be a progressive climb, and certainly our cash flow forecast would support that as well. So, I think that all lines up nicely with long range predictability in future earnings profiles, a company that we’ve basically presented on many occasions.

Okay, thank you. Nice job.

Thanks, Jamie.

Moving on to Andy Kaplowitz with Citi.

Hey good morning, guys.

Hi, Andy.

So as your first half EPS represents more than half of your EPS guidance this year, at least the midpoint. So, I know you told us the EPS is tracking to the high end of the range. But what held you back from raising your EPS guidance at this point, give me, you do tend to be modestly back and loaded historically. I know you had a favorable resolution and Sustainable Tech that helped margin. So maybe that skews seasonality a bit. But was there some pull forward of demand in Q2 is there any other reason? Why didn’t raise a guidance?

No, I mean, it’s – I mean, we talked about the 45, 55 split, I think last quarter, and I think if you, sort of you back out of the goodie this quarter kind of takes you to the high end of the range, I think for us, we like to be as, Andy we’re halfway through the year, we’ve got a bit more to play out. And, we’d like to be reasonably conservative where, we’re, in essence, we’re bumping up guidance by getting to the top end of the range. Now, rather than, people are assuming the midpoint with bumping up cash. So I think, it’s a good news quarter. And, we’ll see where we landed in Q3 is how we guide for the rest of the year, that’s probably the best way to say it, but you get no favors, and, over promising and under delivering, as we were much better to keep our – to be prudent, and as we’ve done in the past. And I think that sounds as well. And that’s the way we’re going to be.

Very understandable. And then maybe digging into Sustainable Tech a little bit more, again, you didn’t change your guidance for the year there. But can you give us a little more color into what you mean by that the level of activity has increased significantly in the last two or three months and other portions of the business that are actually exceeding your expectations this year, and maybe any portions of the business that are not below expectations?

I would say that, there are no portions of the business below expectations at all and – to the complete opposite, I think that, that’s firing on all settings [ph] as I said, is that sort of perfect storm, the level of activity and across our technology portfolio continues to really be unbelievably busy. And, we’ve seen the level of awards, not just this quarter, the last quarter and et cetera. It’s just been a tremendous book-to-bill progression through the course of, I guess with, the last several quarters. So really, really strong performance, but we’re starting to see quite a bit of caption in and the digital maintenance side where we’ve got a lot of awards coming through in the advisory business. I mean, those are smaller nature, but the number of them is impressive, and they do some authentic go throughinto further work. So all that there’s really well I think that let’s face we’ve gotten a lot of pressure on, the IOCs themselves and, of course, oil prices gone up a bit. And so they’ve got, you know, probably more confidence in the future as well. So I think there’s more confidence to stand as obviously pressure on the climate agenda and decarburization agenda. So, but all – at all plays well, and then you’ve got the refiners themselves, having to look at different product mixes and, look at things like more properly and things like that, but where we play a significant role and being a key supplier of technology to do just that. So it really is, we’re not seeing any slowdown there. In fact, I think we’re seeing a pickup in prospects and levels of engagement around future projects. And I guess an untightening of that capital spend belt that’s been around during COVID. So, I think it all be as well, as we look into the tail end of this year and into next year for sure.

Helpful color. Thanks, Stuart.

Thanks.

We’ll now take a question from Steven Fisher with UBS.

Hi great, thanks. Good morning. I’ve just wanted to follow up on Andy’s first question there about the guidance expectations for this year, just as it relates to the EBITDA margins. The guidance does imply a little bit lower margins in the second half of the year, and the first half can just talk about, what was driving that moderation. I assume it’s some type of mix prompt or some unusual costs or anything. Thanks.

Yes, having an each of the segments, I think we set our start with TS, Steve being in that set of 10%, or more double digit zip code and obviously, we’re there this quarter, we were a bit below last quarter, but we think we’re going to end the year and I think, what we guided to. So, I think that’s good. So, no change there. In terms of Sustainable Tech, of course, we came out the gate very strongly last quarter. And it’s strong again, this quarter with. So, I think that’s really bumping up the margins, but what I think when you look at the whole year, we do think Sustainable Tech will be in the mid teens. So that does lead you to a little bit of lower margin performance in that area, because of the project, most favorable project causes. But again, very much within our original guide, very much within our performance expectation. So again, nothing else, nothing out of the ordinary in fact, inspiring performance and truth. So and as Mark said, we’ve got the Corporate cost coming through more in line with 2019, as well, when you look at the good level, but all and if you look where we’re heading, we said it’d be a circa $6 billion company with EBITDA that 9% of their loans at the group level, and we’re heading towards those numbers. And you’re sticking by that original statement and tracking very well towards it. So, I think that all lines up nicely.

Okay, that’s helpful. And then just a follow-up on the exits discussion, thanks, Mark, first, on the framing of that, I just want to make sure we’re clear about direction of potential cash flows here. How should we interpret the risk that you will actually have to pay something out on this charge that you’ve taken versus collecting perhaps less than you thought you might collect? In general, I used to kind of keep it just to the customer side of things, is this sort of an indication that we may have to pay out something like $150 million to $200 million, before you ultimately collect the rest of it and still come out ahead on a net basis with the subcontractors?

No, no, you should not take, this deal with access for me as a really, really positive outcome. As far as I’m concerned, the complexity of what we’re doing opposite the customer was extremely complex, with multiple lawsuits going one way and counterclaims coming the other et cetera. We also had the I guess the interesting situation with our partners who as many of, we’ve done several with our partners, recent performance has not been as strong so we’ve de-risked that part of our future as well. So I think coming to this conclusion opposite the customer is a no cash out deal. So there is no, there’s no cash out coming from us. This is just means that we’re not collecting what we had assumed on our balance sheet so there is no cash out. So it’s a zero sum gain in that sense. In terms of what we’re doing opposite CCPP that’s a very different model. We’re basically recovering money’s that we have spent to build and complete the power plant. That they walked away from. So we’re, we’re going after them for recovery of cost, in that sense that it’s bonafide the absolute cost that we had to step in. And that’s the span to finish their obligation. So that our expectation is that’s a cash positive event. The timing of that hasn’t changed, but the hearings are next April. And we expect the fair one to receive that cash at the tail end of next year, early in 2023. So that all lined up, and but please do not think our write-down is in any way a cash out event as an absolutely non-cash charge.

Okay, terrific. Thanks very much. Appreciate it.

Thanks, Steve.

We’ll now take a question from Michael Dudas with Vertical Research.

Good morning, gentlemen.

Hi, Mike.

Mike, hello.

So, I know it’s like asking, which is your favorite child, but of your four segments within Government Services, which one do you see are you most excited about next couple of quarters on orders or business cadence aspect? And there’s been a lot of visibility on space from now in commercial, but also the private side? Are you still seeing the very solid fundamentals there? And is there much opportunity for KBR to continue to support not only on the commercial, but also on the private side? Thanks.

Yes. I mean, it is a bit like a favorite child. So, I don’t think we’ve got one Mike, I think we love them all equally.

And that’s a good answer.

And we’re in a situation now where, really, they’re all firing, the international businesses got double-digit growth, and what we’re doing and in that arena, is terrific in Australia continues to outpace, as I said. So that’s all good. And the book-to-bill across the portfolio was terrific, and will give – it really supports fundamental growth going forward. So, I don’t really think we’ve got any slowdowns in cadence across any of them. And they’re all – they’re all delivering margins after above expectation. So really, really strong performance all around. So that’s why we love them all equally. And I would say that, in terms of space itself, you’re quite right, a lot of focus on military space today. And obviously, the NASA budget is compounding on momentum in that arena, as well. So, a lot of good momentum in our science and space business. And I think from a commercial space perspective, I think I said this before, it’s an increasing, but still not material part of our portfolio. But as that starts to sort of really dominate low-earth orbit, what you will do over the coming years, I do think that we’ll start to see more and more work coming through, either through NASA contracts, or directly doing some a lot, but not an increasingly amount of direct work with people like Blue and others. So, I think we’ll start to see that go over time. And we’ll report that in due course, but it’s an exciting part of our future. But today, it’s a non-material part of our business. That’s probably a good way to put it. So it’s a good opportunity.

Excellent Stuart. Thank you very much.

Sean Eastman with KeyBanc Capital Markets will have the next question.

Hi team, thanks for taking my questions. So it’s great to hear the GS recompete win rates continue to be very strong, but what about takeaways? How are those numbers looking? I’m just trying to think about the realistic win rate around this big pursuit pipeline you guys disclose?

Yes, I mean, as we know, Sean, takeaways are – they’re hard to do. We were in our point, I think our win rate overall, including recompete, is about between 40% and 50% in numbers of dollars. So, quite a strong performance. So, we’ve got a good shot at takeaways, but we do a lot of what I would call very strong BD around things like IDIQs and white papers and using our contract vehicles like Max [ph] and others to position for either single source or very low numbers of competitors within that environment. So, we do very well, building a book of business they are and obviously, you got things like, Centauri and the intelligence community, which is not that less competitive, as well. So it’s not just in, I mean, we’ve actually got these large opportunities across all our portfolio. And so it’s not – they’re not just takeaways, they’re actually some of this new business, some that have got lower competitor profiles, and some they’ve got takeaway fundamentals. So, I think really we’re – I think the answer to your question is really are we looking over and above one on a book-to-bill? And the answer is yes. Does that support a growth story? Yes. And is the pipeline fundamentals still strong for the future of the business? And I think the answer is yes. And are we performing well, across our portfolio? And do we have constant, low concentration that’s going I think the answer to all those questions, is we’re in really good shape. So it’s difficult to tell one or the other in terms of whether you’re going to win a takeaway or not. But what is true is, we’re in a very low recompete year. And of course, a lot of what we’re reporting now is over and above our recompete. So it’s all additive to the story. And we’ll come back, I think, we’ve talked about this before, but I think we’ll come back in Q3, I’ll say might coming for saying this. But we’re going to come back in Q3, and I think we’ll give an update to the level of business. We talked about 55% to support our long range targets. And of course, we’re very strong bookings year, and on with options and so when we layer in those options, I want to begin to report back to the market and our shareholders, just how we’re travelling on increasing that 55% number upwards. So, we’ll have a growth there in Q3 just to give you confidence that we’re not just winning our recompete, but we’re actually building a book of business to secure growth.

All right, that’s really helpful. And nice to do list item for Allison there. Secondly, we hear a lot about the GS visibility, right. But on the STS side, I think a lot of people are trying to get comfortable around the – very robust growth outlook over the next couple of years in that business. So considering, 1.6 times book-to-bill there this quarter, this is several quarters in a row now have very strong book-to-bill on that business. I mean, how far does that let you guys see out a little bit of color around? Where these recent bookings trends get you, from a visibility standpoint, would be great in STS?

Yes, as you know, it’s a quicker cadence of contract awards. And just given the scale and the size and the way that top business model works. I would say that, obviously, we’re very confident at 2021 numbers, and increasingly confident in our 2022 growth numbers. And all the work that we’re winning now, of course, doesn’t all get executed in 2021, but a lot of it in 2022. So as we’re reviewing the performance of those businesses, and the last weeks leading up to earnings, we start to get quite a good feel for how that business is going to track in 2022. And I’m feeling really good about how that’s moving into next year. That’s probably not really good for that type of business and really, if we can get that level of visibility. That’s a good place to be.

Okay, fantastic. It’s very helpful. Thanks very much.

Thanks, Sean.

And hear from the line of Jerry Revich with Goldman Sachs.

Hi, this is Ashok Sivamohan on for Jerry Revich. You’ve touched on the momentum and some of the Government Solution segments. Can you speak to how you view the sustainability of double-digit organic growth in Government Solutions in the medium term?

I mean, obviously, we’re very pleased with the performance year-to-date. And I think, I don’t know where we sit in that table. But I think we’re certainly outperforming most of our peers in terms of growth in that double-digit arena, and that’s translating very nicely into EBITDA as you’ve seen. So I’ll get there in terms of the sustainment of that, we’re feeling really good about a long range targets. And you all understand the growth numbers and the aspirations around that. So, we’ll continue with that momentum. And we’re very confident that we’ll progress towards those targets in 2025. And they’re very strong CAGR targets as you’re aware. So feeling really good about the future?

Okay. And can you let us know what the [indiscernible] related balances within the unconsolidated affiliate line in the balance sheet?

That sounds like a question for Mark.

Yes, Ashok, the – this will all come out in the queue. But it’s complex. It’s always been complex. And the investment balance, I described the starting off at $565 million and it’s coming down by roughly $200 million. So then net is the result of those two numbers. And that’s a combination of expected recoveries from the CCP side of the house. Again, some reserves we have that need to stay there, that are pretty minor. And so that’s the remaining exposure on the balance sheet, if you will. And we have a firm’s a couple of times on this call today, that those expected recoveries. That denominate that balance is with the CCP, combined cycle power plant that is completely separate of the charge today. And very high confidence, as Stuart mentioned earlier, relative to a good outcome there.

Okay, thank you for the color.

You’re welcome.

Now, we’ll hear from Brent Thielman with D.A. Davidson.

Hey, great, thank you. Good morning. Mark, this one might be for you, as well. SG&A understand that the return to work and travel explanation, I guess, when you look at the second quarter levels, is this that sort of a baseline level, we have to think about going forward? Are we going to see that continue to accelerate as more employees return the office and sort of travel campaigns?

Thanks, Brent, we actually, see it being fairly stable. So, I would say that our enterprise SG&A, should be in the $90 million to $100 million per quarter sort of territory. We’re a TAD above that in Q2, which can be explained by some initiatives we’re undertaking. So, I think, Q2 will prove to be somewhat of a peak and we’ll be more normative toward $90 million to $100 million on the SG&A side. And then the Corporate part of that, the Corporate segment, if you will, should be pretty consistently 30 ballpark per quarter on an EBIT basis, about 25 on an EBITDA basis. And there’s some volatility to that for various things, particularly initiatives, but we don’t see that increasing it’s – it’ll steady off, if not decrease in forward quarters from what we’ve showed in Q2.

Okay. And then it’s stick into sort of the labor commentary, so many companies talking about how challenging it is to find people and recruiting, retention, and love to just get your thoughts on what KBR is doing, and sort of how you’re faring in that particular area?

Yes, I mean, I think as, where we are a people company, we drive very hard to live up to our values and look after people and not standing as in good stead. And as we sort of look into certain areas, they’re certainly not normal issues, we think across what we’re seeing in STS in terms of labor as we look at that business and the growth there is being supported by our ability to recruit et cetera. So no issues there, have entered in a lot of what we’re doing internationally, I think there’s a little bit of a labor shortage in Australia, for example, just because very, very busy but it’s not really impacting your ability to do the mission. And but we are looking hard at recruitment, we are looking at harder retention, and I think, in not only in Australia, but in the U.S. So the intelligence piece is always difficult, as you’re probably well aware, but in terms of the, I guess, the readiness and sustainment area, that’s probably easier to recruit into. So, it just depends, I think it’s a mixed bag. I don’t think there’s a silver bullet to any of it. And I think we’ve got very, very strong, dedicated people to the various machines that are working. What they need to work in terms of the challenges on the, on their projects. But to say that there’s a fundamental labor shortage or a crunch across the business is a wrong statement to say there are pockets, I say it would be a right statement. And breaking that down and focusing on those areas and helping those businesses recruit and retain staff as obviously a new focus for those businesses. So, that’s probably the best way to answer that. But is it constraining our growth as we look into the future. We have our long range targets as a consequence, the answer is no.

Okay, that’s really helpful. Stuart, if I could stick one quick one, and I hadn’t tended to think of KBR associated with an infrastructure plan. I just be curious what some of the particular things you’re monitoring within some of those proposals could be that are applicable to you?

Yes, well, I think I think there’s – we’ve almost got a very strong program delivery capability within KBR, but I think there’s a lot of money going into the R&D side around that infrastructure piece, which is plays very firmly into our capabilities of where we sit, there’ll be a lot in the climate change agenda, again, that will play strongly into what we can offer across the piece there as well. So, I do think you’ll start to see, we’re not designing front and rules or anything like that. So don’t be thinking we’re going into that sort of more commoditized business, not at all, but I do think it will play to our sustainable agenda, I think it will play to our R&D credentials. And I’ll play a [indiscernible] program delivery capability as we look across portfolios, that we’re not going to get stuck into construction or commodity services in the slightest, so, but it looks very, very promising and those R&D sustainable areas.

Okay, thank you. Great quarter.

Thank you. Ladies and gentlemen, this will conclude your question-and-answer session. I’ll turn the call back over to Stuart Bradie for any additional or close remarks.

Yes, just again, a thank you for your interest in KBR and taking the time today to listen to the presentation and ask questions. We do think we’re travelling very, very well, the underlying operational performance of the business and the growth fundamentals are clear. And the numbers are, I think, in the continued momentum with a pipeline and where we sit opposite budgets spanned and priorities, I think, hopefully resonates. I do think, obviously, a few questions on excess. But as I said, in my Q&A piece, I think it’s a really, really strong outcome for us in terms of removing uncertainty. And it takes a risk off the table. And it really takes us to a point where the overall conclusion of excess will be a cash upside event for KBR as we conclude the CCPP arbitration litigation as it moves into 2022. So all up, I think, a terrific quarter, I think the fundamentals of the business are sound. And we’re very excited about the future and the management team is terrifically together about the way they’re thinking about tomorrow. So, thank you again for your time. And obviously, we’ll be talking to many of you one on one of course this call. So thank you again, and stay safe and hopefully we’ll get to see some of you face to face in the coming once. All the best. Bye-bye.

Ladies and gentlemen, this will conclude your conference for today. We do thank you for your participation. And you may now disconnect.