Andy Kaplowitz: Bob, you mentioned four years of locked in funding for IIJ and that you expected funding from IIJ, IRA and the CHIPS Act to be a strong run rate by the end of the calendar year. Maybe you can give us a little more color regarding what that could mean for PPS NSR. You’re already growing NSR at 8%. So does it mean you could trend higher than that, and is there any risk that DC related budget noise can impact the infrastructure ramp up?
Bob Pragada: So let me answer the last part first. I think that the infrastructure ramp up is pretty locked in with regards to IIJ. And then the effects that the IRA and the CHIPS Act will be supplemental to that. My comment about the end of the year is that those three will be in real time. So we’re feeling comfortable about that four year time line. I think what’s also important to understand is that when we — the difference between the appropriation, the deployment of the funds and capital and then the duration of the projects, programs and engagements, that has a tail on it that’s six to seven years. And so you see — Kevin talked about the backlog growth in revenue being kind of in that mid single digits, but the gross margin being in double digits on a constant currency basis, that’s really a function of where we are in the phasing of that work.
So comfortable on that front. As far as could that mean incremental growth to what we’ve already projected in our out year plan, we’re feeling strongly that it could really be a big part of the company. So we’re optimistic.
Operator: Your next question is from Jamie Cook with Credit Suisse.
Unidentified Analyst: This is on for Jamie. So on CMS, I was wondering if you continue to expect low to mid 8% margins for the year? And is there any opportunity to look at divesting underperforming or noncore businesses in CMS and focus more on higher margin businesses, in particular, now with Claudia on board.
Kevin Berryman: So look, I think we are a proactive team that always evaluates what we believe is the right portfolio for our company, both now and into the future. We’ve proven that by the divestiture that we executed against in 2019 with the sale of our Energy, Chemicals and Resources business, which one could argue was actually the legacy of the company. So we are always proactive in that consideration. So I’ll leave it there. And so we can’t really comment on anything other than, look, we always consider the opportunities. As it relates to CMS, we do believe that they are going to be able to get up into the 8% margins over the course of the year. So we see improving, they’re at a point in time where some of the wins that they’ve had, which are a little bit higher margin are yet to kind of get into the burn. And we would expect that, that will be happening over the course of the balance of the year.
Bob Pragada: If I could add just one item to what Kevin said. When we talk about energy transition, please keep in mind that, that includes components of CMS that’s around our our nuclear new build and the AMR SMR technologies that we have, and we’re seeing some real opportunities and growth in Europe that will be contributing to the margin profile that Kevin mentioned.
Kevin Berryman: And just to clarify as well, when we talk about the future, I think we’re approaching 8% for the year, which means because we started at the level we are, we’re going to have to be having in subsequent quarters margins that are going to be above 8%.
Operator: The next question is from Michael Feniger with Bank of America.
