Operator: Thank you. And our next question today comes from Andrew Obin with Bank of America. Please go ahead.
Andrew Obin: Hi guys. Good morning. Thanks for fitting me in.
George R. Oliver: Good morning Andrew.
Marc Vandiepenbeeck: Good morning Andrew.
Andrew Obin: Just a question. We are looking at macro data and it seems that labor inflation is picking up back again. How are you guys thinking about your contract structure, particularly on the installation side in the face of inflation, are you sort of giving any thought — you’ve clearly cleaned up the balance sheet was factoring. This is great. Are you guys giving any thought about sort of resetting the contract structure to maybe adjust for the fact that we — in a higher inflation, labor inflation environment for longer? I know it’s a big long question, but I would love to hear your thoughts. Thank you.
George R. Oliver: No. What I’d say, is when we went through that high inflationary period, obviously, that exposed a lot of our weakness because we are in a low inflationary period for so long. We have built very robust pricing and costing pricing. And then from a selling standpoint, focusing on value. And so as we plan long-term now, we are factoring in we’re — from a costing standpoint, anticipating higher than level — higher than the kind of the market forecast on inflation. So we’ve been factoring that in and then making sure we have contracts that ultimately gives us the opportunity to be able to recover longer-term on some of the longer-term contracts. So we’ve been — and that’s been deployed across the globe. What I’d say, we have very robust pricing costing as we do deal reviews and making sure that we are going to be positioned to be able to achieve the margin rate that we are booking.
So we’re now in a situation where we are booking much higher margins, and then we’re executing at or above those margins on a go-forward basis. And that’s a big deal. And that’s a big part of our — in our solutions business, our ability to be able to deliver stronger margins going forward.
Andrew Obin: Great. And then just a follow-up question. If we look at the bookings on data center, clearly got a lot of attention, growing 50% plus, what’s happening? You guys have kindly provided a very nice pie chart of your end-market breakout. Can you just highlight what else is doing well? And if there are any headwinds within your key end-market verticals on Applied? Thank you.
George R. Oliver: I mean what I’d say, it’s broad-based. When you look at our applied business, right from — and we have the full portfolio of technology, whether it be water cooled chillers, air cooled chillers which obviously is focused on data centers. The Silent-Aire packaged cooling solutions that we deploy. So when you look at what we see – it is not only data centers but it is the industrial expansion that we see pretty much globally. It’s education, it’s been some government. And more important, there’s a broad-based demand addressing some of the challenges that our customers are having, achieving their sustainability goals. And so we can go in and ultimately package a solution. And then with that, be able to get significant savings that actually then get — in some cases, get a decent payback. And so it’s broad-based in our applied business across end-markets, certainly, data centers is a key driver.
Marc Vandiepenbeeck: Commercially a bump in Europe, I made a comment in the opening remarks around industrial refrigeration growing really fast. There’s multiple pockets of the market that are growing, probably not as fast as what we are seeing in data center, which is really unprecedented and continue to see that pipeline growing, but we see pipeline growth across the board.
George R. Oliver: Across the board. And then what we have learned is technology wins. And so we’ve been investing multi-year in our technology differentiation. And as we are applying that into the key verticals, that is what ultimately is delivering the value.
Operator: Thank you. And our next question today comes from Steve Volkmann with Jefferies. Please go ahead.
Steve Volkmann: Great. Thank you guys for fitting me in. Just a couple of real big picture questions for me. First one, you talked about some investments in I guess, product development, et cetera, but also some capacity. Is there any reason to think there would be a step change in that as we go to next year? In other words, are there some projects that kind of get done? Or is that a good run rate?
George R. Oliver: Well, when you look at our reinvestment, and we’ve been talking about this for multi-years, applied — when we look at our applied cooling, we are a significant leader in that space across the globe, and we’ve been investing in multigenerational technologies. And if you would go to our technology center in New York, Pennsylvania, our JADEC Center, you would see that. So we’ve been significantly elevated reinvestment over the last number of years, which has ultimately positioned us with the competitive advantage we have today in data centers. So that’s going to continue. And then on the capacity side, certainly, we’ve — from an investment standpoint, we’ve been — we’ve got great factories across the globe and then now we have been scaling those factories to be able to now support this data, what’s being driven by data centers, but the data center demand.
