Good morning. My name is Drew and I’ll be your conference operator today. At this time, I’d like to welcome everyone to the Q4 and FY2023 KBR Inc. Conference. [Operator Instructions] I’ll now hand over to Jamie DuBray, Vice President of Investor Relations. Please go ahead when you are ready.

Thank you. Good morning, and welcome to KBR's fourth quarter and fiscal year 2023 earnings call. Joining me are Stuart Bradie, President and Chief Executive Officer; as well as 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 questions. Today's earnings presentation is available on the Investors section of our website @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 actual results to differ significantly from these forward-looking statements, as discussed in our most recent Form 10-K available on our website. This discussion also includes non-GAAP financial measures that the Company believes to be useful metrics for investors. A reconciliation of these non-GAAP measures to the nearest GAAP measure is included at the end of our earnings presentation. I will now turn the call over to Stuart.

Thanks Jamie, and a warm welcome to a 2023 yearend earnings presentation. I will start on slide 5. As we reflect on 2023, I wanted to begin today with a theme of looking after our people. Creating an environment where each and every person can go home after work at a minimum, the same as when they started the day, is very personal to myself and the whole leadership of KBR. A Zero Harm program is only as good as our processes and of course our people being committed to our values every single day. I'm therefore pleased to report that once again we achieved top quintile results, an outstanding achievement given what we do and where we do it. So a huge shout out to KBR’s people all across the world. There are a number of achievements and milestones that we have celebrated through the year as examples of this exemplary performance on the slide. I won't read them as there are many others, but this gives us a good feel for the global and complex nature of what we do and why we are so proud of our HSSC performance and ongoing commitment to continual improvement. On to slide 6 on business health. I will focus my remarks on the full year performance and outlook. I will also give you an update on HomeSafe. Mark will cover the quarter results, which are once again resilient. We met or exceeded expectation on all key metrics. Mark will also break down the year a bit more and present, of course, on ‘24 guidance. On the people front, we increased our headcount by double digits, which is aligned with our organic growth. Pleasingly through the year, our attrition reduced and through independently run surveys, I'm proud to report that KBR is…

Great, thank you, Stuart. Hello, everyone. I'll start on slide 10 with the Q4 results, then I'll hit fiscal year results, capital structure matters, and then finish with our guide for 2024. So first up, we were pleased to finish fiscal 2023 with a strong Q4. Top line grew 8% in the quarter, all organic, with amplified growth and profit. Adjusted EBITDA was up 20% with contributions from both business areas in volume and also in margins. I'll hit the drivers of this when I cover the segment slide here in a moment. Adjusted EPS was $0.69 for the quarter in line with expectations. Q4, ‘23 adjusted EPS does reflect considerably higher interest cost and a higher tax rate than the prior year quarter. Operating and free cash flow results finish strong, enabling a terrific full year outcome. As Stuart indicated earlier, cash performance was critical in building our treasury to enable us to fully settle the convertible maturity and warrants and get that out of the way as we enter into 2024. Over to slide 11, for the full year all metrics were on or above our plan and also consistent with our long-term targets, so we're very pleased with that. Revenue was just about at $7 billion for the year, just a hair under, up 11% over 2022 on an ex-OAW basis, and up 6% without that adjustment. Adjusted EBITDA grew to $747 million, that's up 12% over last year, driven by 50 basis points of adjusted EBITDA margin improvement. This improvement was attributed to excellent project execution across the board and greater growth contribution, favorable project mix, and economies of scale from sustainable tech. Adjusted EPS was up 7% for the year and in line with our original guide for 2023. In the end, it was pleasing…

Thank you, Mark. Now, let me summarize with a few takeaways. Strong finish to full year ‘23, concluding an absolutely stellar full year. Backlogging options up 10% and adjusted EBITDA growth of 12% year-over-year with, of course, margin expansion. We have a de-risked 2024 and beyond with the convert and warrant settlement legacy legal resolution and refinance capital structure. The balance sheet is in real good shape, giving deployment optionality. A key takeaway. A more defined path forward on HomeSafe through continued partnership with TRANSCOM and positive supply chain developments. Over 75% work under contract as we start the year against a full year ‘24 guide that delivers double digit growth in both adjusted EBITDA and adjusted EPS midpoints. With effectively no capital deployment baked in, which of course is an opportunity as we progress through the year. So committed to delivering sustained growth for KBR shareholders with adjusted EBITDA in line with our progression towards a 2025 target of $925 million EBITDA. Thank you for listening and I will now hand back to the operator who will open the call up for questions.

[Operator Instructions] Our first question today comes from Tobey Sommer from Truist.

Thank you. Good morning. As you look out into 2024 with your guidance, how should we think about it at the segment level in terms of the trajectory of organic growth in GS and STS?

Yes, thanks, Tobey. I mean, our original targets that we set forth towards 2025 are unchanged there. I mean, the growth in GS is between 5% and 8% and the growth in STS is in the low double digits, and we expect that to continue.

Within the STS segment, I guess you exit the year at around 21% margin. How do you think about leverage in that business and the opportunity for margin expansion given double-digit expectations for organic growth?

Yes, I think, Tobey, we're ahead of pace in terms of achieving, we said we'd be in the high teens, low 20s over time, and we've got there faster. I mean, our expectation is margins will kind of hold where they are today through the course of the year, and that's embodied in the guide.

Okay, one quick one on HomeSafe. Given the delays and sort of from when the initial contract was let, the extended sort of litigation and protest period, and now this is, will the duration be extended as well, or sort of the clock start a little bit later as a result of these delays, or would the original timeline still hold for the end of that contract?

I mean, certainly the protest period and the legal pieces with the time of the contract, but to date the contract term is nine and a half years or so. There will be obviously re-competes and things like that at the end of it, but that holds as it stands today. There's no extension to that just because of the, we did start the development work. It has taken longer. That's just part of the deal, I think.

And last one, if I could squeeze which is –

Sorry Tobey, it's Mark here, just once we start real moves, that's when we really should consider the clock to start to tick on the nine-year period that Stuart mentioned.

Got you. Okay. That's helpful. And then for your guidance, do you assume that a budget and supplemental bill, spending bill are passed? Because I did see sort of a portion of 45% of earnings in the first half and 55% in the back half.

Yes, I mean there's obviously a bit of HomeSafe in that build up as we go through the year. We expect more in the second half than the first half, obviously, as first moves are only in the spring. We do have -- you've seen the volatility in our R&S business due to, I guess, a little bit of a slowdown in UCOM that is flatlining at the moment and we've kind of assumed that as we progress with a bit of upside coming at the back end of the year. But I think the other thing to take into consideration in that statement is we have 75% of our work under contract today. So I think that puts us in a very sound position. We've always said there's multiple pathways for KBR to deliver EBITDA. So as Mark explained in his remarks, we're growing substantially in Defense and Intel and International. The trajectory of those businesses going into ‘24 is actually very, very healthy because of the work we secured near the tail end of the year also. So I think there's different levers to pull there. So I don't think we're counting on resolution of budgets and those are difficult to predict and it would be falling for us to sort of assume anything around there. We've actually based it on our business as it stands today and we've got some conservatism in certain places and I feel that we're well positioned to deliver what we've actually guided.

Our next question today comes from Michael Dudas from Vertical Research.

Good morning, Jamie. Mark, Stuart. Stuart, I know you'll give more detail next month at the primer, but maybe you could share as you're looking out towards the pipeline of opportunities and business on STS. Any significant changes in what clients are demanding relative to the services you're providing or the technologies, are the ammonia, hydrogen, market to the books and good projects could still have great visibility. Of course, there's always a lot of noise about puts and takes on clean energy focus elsewhere. So I just want to get a sense of that as your comfort level heading through ‘24 and the margin mix improving, or at least maintain those levels in the ‘25.

Yes, good question, Mike. I think I would like to just start off because I've seen some of the earlier reports coming out on book-to-bill and STS. And I think some of the folks are a little bit off the mark. And that's kind of perhaps somewhat our fault as well, because in our disclosures, we don't give a breakdown of the equity and earnings backlog. So in STS, if you exclude the equity and earnings backlog piece where the LNG projects are running at peak at the moment. The book-to- bill was 1.1 in Q4 and over the year the backlog grew 15% in that core business. So I just wanted to give some context there and most of that is coming across the energy trilemma but all of it really is, there's a lot of installed bases that are trying to decarbonize. You've got energy security concerns and a lot happening particularly in the Middle East as they look to, I guess change up their mix of products and actually decarbonize their own industries. And the level of ammonia work that we've won through the year is very, very impressive and obviously we've now got ammonia cracking as well that actually takes the ammonia in terms of back into hydrogen. So we're seeing no slowdown in that market. I think when you look at the overall spend, the capital spends and we'll talk about this in the primer. I mean the energy security piece is dwarfing energy transition but every year the percentage of energy transition spend increases. So as we are very well positioned in the energy security market and the things that we do in a in sort of taking forward energy security with a decarbonized thematic which is terrific for us and a very large installed base to leverage off. And then secondly is energy transition whether that's ammonia, hydrogen or any derivative thereof like methanol. We're very well positioned as we, as that market continues to grow and you've seen our success in those areas and we're very much at the forefront of multiple green ammonia projects that we've announced recently et cetera. So I think it's going to be an increasing part of our portfolio but it will happen over time but I think that that's absolutely fine for us because we can play in energy security as well as energy transition and as those two come together, we're very well positioned.

Our next question today comes from Bert Subin from Stifel.

Hey, good morning, Stuart and Mark. Thank you for the question. Maybe just to start on the ‘24 guide, it seems like $3.10 to $3.30 on the adjusted EPS side is pretty good considering you're not assuming any capital allocations sort of beyond the share repurchases to avoid creep and you're factoring in a considerably higher tax rate. If we think about maybe the higher end of that range, excluding capital deployment, if you're ending at $3.30 a year from now, we're talking about it. Is that more driven by government solutions or is that more driven by the EPS?

Yes. I mean, I think the important takeaway is that the combined EBITDA keeps us on our path to $925 million, which we committed to last quarter and we're feeling pretty good about that, particularly with where HomeSafe is heading as well. Obviously, if CR resolves sooner and there's more funding flowing to Ukraine, there could be upside towards our assumptions on the spend in UCOM, et cetera. But also, we've got a very, very strong pipeline in STS and I think ultimately if we win our fair share there, that could also outperform a bit. So, but I'd like to stick to the guide. I mean, double digit growth. I mean, our revenue is up 9% to 10%, our EBITDA is up 11%, which shows slight margin expansion across the portfolio. It keeps us very healthily on track to what people thought were very lofty targets back in the day and we're well on path to achieving those. And as you say, we've got capital deployment optionality. So I think we keep talking about the levers we can pull and the fact that we didn't get derailed last year with the slowdown in UCOM. We still exceeded expectations, particularly in EBITDA. And so again, with D&I outperforming and International outperforming and STS outperforming in truth. And so I think you'll see ebbs and flows across the segments through the course of the year. And that's why I said yes to both. I think there are opportunities across both segments to do well. And if the stars align, obviously, that would be terrific. But our guide is our guide. And that's what we're sticking to in this market. With volatility and uncertainty, I think doing double digit growth with a very high proportionate work under contract is a very good place to be.

Stuart, maybe just to follow up on some of the comments on HomeSafe and the ‘25 target. Just based on what you said in your prepared remarks, what we see in the presentation, I guess International starting in ‘26 would sort of assume that HomeSafe exit ‘25 at around 80% ramps, just if that's the process, 80-20. If we're doing that math on top of $830 million as your midpoint in ‘24, it would get us fairly close to $925 million just on HomeSafe probably only assumes like low single-digit EBITDA growth the rest of the business. Can you just give us sort of how you're thinking about that number? And I guess last quarter when you had mentioned it, you sort of noted that you think you could hit $925 million with pretty little contribution from HomeSafe. I'm just curious if anything changed or if that's just a sort of a conservative watermark that you're planning toward?

Oh, the latter. We're in a position today where we've tried to give you far more clarity on HomeSafe for ‘24 and rightfully so, given the progress we've made. There will be significant ramp in ‘25 and again in ‘26. But I think we need a little bit more time to give you color on that and of course we're looking for an Investor Day later on this year and obviously that will give us a little bit more time. So I don't really want to give you numbers today on ‘25 or ‘26 because I got a significant punch in the nose last quarter for not being able to lift up to expectations. So that you lesson learned there. But we're feeling really good about HomeSafe and we've talked about it often and I think you, I mean, all the sell side and a lot of investors know they expected ramp over time but we're not going to give you numbers today if that's sorry to be so vague. But I think that's probably the prudent thing to do and I'd rather be conservative in that sense.

Oh, very helpful. Just one quick sort of clarification question to some of the earlier STS comments. Middle East has been really strong. I haven't seen decay. I'm not sure if it's out, but I think you were running it like over 60% growth there through the first three quarters. Is your expectation that that's going to be the strongest growing market for you in ‘24? And is there any potential US catch up with IRA?

Yes, to both of those questions, the Middle East continues to be buoyant. The capital spends profiles enormous. It dwarfs every other part of the world. I think Saudi's slated to be the fastest growing economy this year and again next year likely. And clearly, they've got their vision 2030 and they're executing on it. And we've got a significant pipeline and growth not only in Saudi, but in Abu Dhabi and in Kuwait and other countries in the Middle East. And there's no doubt the Southern Hemisphere in general is driving a lot of global that any sort of level of global growth is going to come from there in our business. But in terms of the IRA bill, we did a deep dive on that recently. We understand the drivers and all the seven hubs we recognize that at the moment it's, there's very low drawdown on the $7 billion from the government. I think people are still forming rather than storming if you like. And but we recognize where which hubs we can really add value to and we're in discussions there. So as they start to progress, there's very much an upside, I think, for KBR.

Our next question today comes from Mariana Perez Mora from Bank of America.

Good morning, everyone. So my question is on Defense and Intel. Could you please discuss what are the main drivers in terms of contracts or technologies and how should we think about that for the next like three, five years?

Yes, the Defense business, Defense and Intel's obviously in two separate sub-segments, if you like. The Defense piece is mostly driven around the CEDA business, as others would know it. We've got a very strong IDIQ portfolio and we've got very excellent contract vehicles, one we've talked about the most is IAC MAC and that allows us for very short-term procurements and because the size of the contracts are not amazingly large, we don't often announce it until we get to aggregate numbers but the bookings there were significant last year and the growth in that particular business was in the high single digits and standalone and it seems to be the cadence of that business and I think the other attribute of it, it's becoming more digitally differentiated. And so the scope that we're seeing on recompete, now recompete win rate is very, very high in that business, just by the technical nature and the main expertise that we deploy. And we've seen scope and margin creep as a consequence of that digital differentiation. So that's the defense side and through defense modernization, which is of course a big strategic thrust of the DoD, but also overseas as well. That is in good shape to continue with that growth profile. On the Intelligence side, we do a lot of work for the three letter acronym agencies and we've made particular inroads post-Centauri acquisition of changing, I guess, our profile from a small business into a prime. And that's starting really now to take hold and we're seeing quite a lot of significant wins in that arena. And then we had some delays last year, as you all know, on the directed energy program, which resolved itself in Q4 and as we move forward with another couple of vehicles in that laser program. So again, I think through ‘24, that business itself will be growing in the double digits. So I think that defense and intel, probably, is a real growth driver for us going into next year and really helps us with any volatility that may happen in our next. So, yes.

Thank you very much. And then if I may, can you please discuss international as well? Where do you see most growth coming from? Is it energy, military or any specific country or region?

Yes. So in the government realm, as you all know, we acquired a business called Frazer-Nash and added to it with two other sort of high level consultancies in the digital and advisory space. And we've now integrated that business fully and as we came through last year and that's really starting to pick up momentum and which is terrific. And it really comes in at high margins as well as you would expect with that sort of high end differentiate consulting engineering portfolio. And Frazer-Nash is a little bit unique because 60% of its business is in the government realm, some classified, some in digital, some in cyber, but also in things like nuclear assurance where we're probably the leading consultant. And when you look at things like AUKUS and the new nuclear programs that are around, obviously we're very well positioned there. The other 40% of its business is actually in the commercial arena where it does energy transition, advisory, it does work in solar, et cetera and does a lot of consulting and helping businesses decarbonize with some software tools that allow them to actually measure how they're doing. So it's quite a diverse consultancy portfolio, but very much pointed at our two businesses. So that's gathering a good head of steam. And then secondly, the Australian government changed last year, it slowed us down a little bit, they've come through their review, and now we're starting to see quite a bit of, I guess, clarity in that market. And we've sort of re-baselined and we're starting to see growth coming through in Australia as well, particularly again, and I would say in that high-end consulting area, whether it's in digital, cyber or interoperability around software. So I think it's a very strong portfolio performing in those key markets today with an opportunity to then move more into the other areas of what I would say that are friends of allies, if you like, in the Middle East and things like that, but we're seeing quite a level of bid activity today. So it's got a very strong outlook to the GSI business. In terms of the question on energy, as we said earlier, I think there's a huge capital spend, particularly in the Middle East, but also in Asia and somewhat in Australia as well as you all know, we're doing the Pluto project down there, the Pluto LNG sort of revamped for the existing facilities there on a cost-reimbursable basis. So there's lots happening across both ends of the portfolio. And yes, and it's very attractive going forward. And I don't see that slowing down.

Thank you. If I may, last one from me on HomeSafe. Margins, usually logistic programs are in the mid-single digit margins. How do you, like, where are the main drivers that will drive HomeSafe to the type of margins that global and government services has?

Yes, I think, Mariana, you've got to remember our role there. Is we're not -- we're doing supply chain as a service. We're actually not -- we don't physically have trucks or warehousing or packers and things like that. We're coming in to manage a program at scale to somewhat look at a new way of moving the families of the military. And ultimately, we're deploying a very digital backbone to this so that we can deploy AI and ML so that we can actually drive efficiency by not running, thinking rudimentary, two traps to the same place at the same time because they're two different providers, but actually unifying that and taking efficiency gains, which of course will drive our margins but also reduce the carbon footprint of that industry. So I think our role is very, very different than a typical logistics supplier in that realm. And that's why we talk about increasing margins over time because I think the more, we do it, the more efficient we'll get. The better providers will get more volume. We'll get volume discounts as a consequence, et cetera. So it's quite easy to step back and look at the logic behind this. That doesn't mean it's easy to get done, but we're well on the pathway now and we're pretty confident that over time we can get the margins down. And as I said, in my prepared remarks, we're being very innovative at the way we're looking at this and we're not restricted at all to the current DoD supply chain which I think has been missed by many in the media.

Our next question comes from Jerry Revich from Goldman Sachs.

Yes, hi. Good morning, everyone. Stuart, I'm wondering if you just, hi, on HomeSafe, so congratulations on the progress in terms of ramping up signed contractors. Can you put in perspective the $2, 200 that you mentioned in your preparatory marks? What does that number need to get to for each of the phases? I know you're going to roll it out based on the types of moves skip, can you just frame that for us if you don't mind on where we are relative to the ultimate number?

Yes, so I think we've, as I also said in the prepared marks, we've got enough of the supply chain signed up for certainly what's in front of us and we're obviously expanding that daily. So I'm feeling pretty good about the supply chain and the engagement of the supply chain. For the $2, 200, we've got a supplier database that allows the people to sign up or companies to sign up, including small businesses, and to really sort of register their interest to provide services to HomeSafe and that's the $2, 200. And out of that 10 to 2, 200, we've signed 380 contracts already. So we've got very, very good coverage across the supply chain for what we expect going forward.

Okay, and then can I ask you in Sustainable Tech Solutions, can you just talk about the moving pieces within the portfolio, the growth outlook that you see for the longer cycle part of the business, ammonia and plastics, how fast is that growing in ‘24 and then for the shorter cycle business, what amount of activity do you need to see in terms of bookings turn into revenue relative to the double digit organic growth outlook that you mentioned?

Yes, STS is going into the probably with its highest level of work under contract that we've seen in recent times. So we're feeling pretty good about that double digit growth for sure. And it's a good balance, I think that's why we feel quite confident. It's the sustainable services piece of the business which is really underpinned by the technologies is going great guns and we'll explain a bit more about that in the STS Primer and then again at Investor Day. I think the drivers around ammonia, we talked about earlier, so I won't cover that again and that rolls into hydrogen of course. I think energy security continues to be a big part in this and you've seen that from many of the energy companies. They want to, they've got to continue to really think about energy security in a very concise way but they are trying to do it in a responsible, decarbonized solution and we are really at the forefront of that. So I think we're very well positioned. In plastics recycling, again that's a kind of different market. We will be producing first product I think coming to the end of this quarter early in Q2 in the Vulture site in the Mura facility and I think that really opens the door to accelerate that market. I think everyone's waiting to make sure that that all works and of course what we've not really said to the market and probably good to do a little bit today is the fact that there's two other facilities that are being built, one in Korea and one in Japan and they could end up actually if we slip a little bit, they'll end up going first. So we've really got three sort of world-scale plants happening all at the same time now. And one of those is with a modelized solution that we sort of developed after we took additional investments so that bears well for speed to market and cost effectiveness, et cetera, as this continues. So we're really upbeat about that plastic recycling market. And again, we'll cover more of that in the primer. The other market that's really hot at the moment is [inaudible]. And that's particularly coming out of the Middle East. Both Aramco and SABIC in Saudi have got considerable programs. My expectation is it'll be difficult for everything to happen in parallel. There'll be a little bit of a series development there. But that's kind of okay for us as well, because that just expands the pipeline over time. And I think we're very well positioned on the LTC program. We've talked about before the Liquid to Chemicals program. And hopefully we can get to really sort of announcing something on that later this quarter, if not early Q2.

Our next question comes from Steven Fisher from UBS.

Thanks. Good morning. So you mentioned the desire to be a little vague on 2025 when you were asked about the HomeSafe amount embedded in there. But maybe to ask you about the STS angle. I think you had previously expected upside the STS to more than make up for HomeSafe. So has anything changed in your thinking about that, of the framing of the STS potential contribution? And sounds like from the answer you just gave, Jerry. There's quite a bit happening and potential for upside there. And I guess can you maybe just give us your latest thinking on the synergy between STS and government you did mention in your prepared remarks, one particular contract that offered some synergy. So just curious about sort of the commitment to keeping the businesses together. Thank you.

That's a lot, Steve in one question. Yes, I mean, I think as we said, last quarter we were confident on the $925 million number and I think with what's happened in HomeSafe we're even more confident with the $925 million number and I'll probably leave it at that until we get to May or whatever we have in our Investor Day. On the synergies, I thought I kind of explained earlier on, the bit that seems to be the connectivity piece between commercial and government is very much what's happening in government international business and Frazer-Nash was a perfect example of that I explained earlier. We're seeing a lot more connectivity in places like Saudi, we're and in Australia for that matter where we're very much seen the contracts there are far more commercial in the government realm and we're seeing a lot more connectivity between the two businesses and our profile and being able to leverage our reputation from one into the other. So I think, again, I'll sort of limit my remarks to that, Steve, until we get to our Investor Day, but it's certainly a hot topic. I understand there's been a lot of discussion around the synergies between these businesses and truth what we should do with them strategically, but we'll get to that when we get to Investor Day, if you don't mind.

Our next question today comes from Sangita Jain from Keybanc Capital Market.

Yes, thank you for taking my questions. If I can ask a couple on HomeSafe, that's $60 million of contract modification that was announced a week or so ago. How should we think about that? Is that all 2024 or does that split between ‘24 and ‘25?

Hey, Sangita. First thanks for visiting us a couple of weeks ago. Great to see you. It's Mark here. The $60 million we can assume will be expended this calendar year. And so that is for recognition of the slower ramp and the overhead will incur along that path as well as the government and the client asking for more development, more capability out of the system, which we're developing with our joint venture partners. And so it covers both of those rounds and we expect to burn through that this year and start moves in earnest pretty soon and hopefully picking up pace as the year progresses.

So is that part of that $150 million of HomeSafe revenue for this year then?

Yes, it is. It’s slightly --

Okay, and if I can ask one more on HomeSafe, how should we be factoring in backlog for that? How do you plan to do that and how should we think about it?

Good question. There's nothing in backlog today for HomeSafe in terms of moves and as we start to get clarity, we'll book the backlog, that's probably the way I would suggest. And when we get up to proper cadence, I think there will be an annual booking rather than trying to book 10 years in advance and we've just got to work through that but that's our thoughts at the moment. So more to come on that but I think the takeaway today is that there's nothing really in backlog of any material numbers for HomeSafe in 2024.

Our final question today comes from Gautam Khanna from TD Cowen.

Hey, good morning, guys. I had a couple questions on HomeSafe. So the contract still seems subject to that service contract act and I was curious, has that been an issue with the folks that you've signed up, the 380 plus in terms of their ability to comply? I'm just curious like how much of a whatever burden that is on them that might slow the ramp for HomeSafe?

I mean today, Gautam, the answer is no. I mean the whole point of SEA and TRANSCOM and KBR are committed to that and I had a conversation of a senior level in TRANSCOM a couple of weeks ago on the subject and I think firstly, neither, we really want providers who are behaving properly and doing proper screening and things as you can imagine for the military and doing what they should be doing from a remuneration perspective. But that, between TRANSCOM and ourselves, we're pretty clear that will not disadvantage KBR commercially either. So I think there's commitment to that. I know there's been a lot of discussion around it, but at the moment, I think it's something we're working through, but I don't see it as a concern. In fact, I see it as a huge positive in terms of the quality of the people that we'll actually get to work for us and absolutely aligns with KBR's values on people. So and actually with TRANSCOM's intentions as well.

Got you. And then we've obviously heard some pushback in the channel from like the pricing terms. I was curious if there's any case for economic price adjustments. Have you guys had any indication from the customer as to whether they're looking at that again or?

Yes, I mean, it's an ongoing annual review process. I think we explained that earlier. There are those economic price adjustments with built into the contract to review as we go forward. And that includes pass through increases in things like fuel. And so it's in that sense, I'm pretty confident we'll get this. I mean we've got most of it, whether we've got the supply chain signed up on the terms that we need them to be signed up on already. Obviously, they've been making hay while the sun shines a little bit during COVID. And I think there's been quite a lot of increases and you can understand the noise. But ultimately, the objective of this is actually to do a better job in terms of quality for and make the move experience better for the military families at the moment, the feedback is not positive in that. And then secondly is actually to somewhat disrupt the industry so it becomes far more competitive and a lot of the middle layers are taken out and we get a focus into the actual truckers and their families and we actually help them grow their businesses because they're performing and they're accountable. So I expect more noise in that sense and I'm concerned about the rate structure. No, I'm not, I think we'll work through that with TRANSCOM and the supply chain in collaboration. And to date we have not seen other than from some making noise in the media too much trouble in that regard.

That concludes the Q&A portion on today's call. I will now hand back over to Stuart Bradie for any final remarks.

Okay, thank you very much. Good questions and thank you for your time. As always and your interest in KBR. I think in short, we're well on our path to our $925 million target in EBITDA terms double digit growth with margin expansion going into the year albeit as well, Mark, and the team have done a great job preserving the balance sheet to give this capital deployment optionality and with 75% work under contract feeling really good about the year ahead. So all up very buoyant and obviously the HomeSafe stabilization and a bit more clarity there also really, really helps. So thank you very much indeed. We'll be doing the STS Primer obviously in a couple of weeks’ time which will lead us into Investor Day in due course. So thank you.

That concludes today's Q4 and FY2023 KBR Inc. Earnings Conference Call. You may now disconnect your line.