And so as I mentioned to date, some of those have been below over the last couple of years, and our aim here is to accelerate getting them to be above the average expected through-cycle incremental margin.
Kurt Hallead: That’s good, really good. Really appreciate that. Thanks.
Jose Bayardo: Thanks Kurt.
Operator: Thank you. And one moment for our next question. And our next question comes from the line of Ati Modak with Goldman Sachs. Your line is open. Please go ahead.
Ati Modak: Hi, good morning team. Just to follow-up on some of the questions from — before on free cash flow, maybe any color you can provide on the cadence because it sounds like the conversion is improving. But should we still see impact of working capital seasonality to start the year, next year? And then what metrics are you looking at to inform your capital allocation strategy?
Jose Bayardo: Yeah. So from a free cash flow standpoint, yes, we’ll continue to have seasonality with Q1 typically being a more challenging cash flow quarter, but then we expect it to improve throughout the course of 2024. And I’m sorry, I didn’t catch the second part of the question.
Clay Williams: Capital allocation. Was that your question, Ati?
Ati Modak: Yeah.
Clay Williams: Yeah. What I would say is we — with stronger free cash flow in 2024, I’m hoping — well, that should open up opportunities to return more capital to shareholders. We have, I think, a pretty strong track record here, having returned almost $5 billion since 2014 through both share backs — share buybacks and dividends as well as continuing to move forward on our organic growth opportunities. And as we always do, we’re going to keep an eye on M&A opportunities. But I think looking forward into 2024 really focused on allocating between those three areas.
Ati Modak: That’s great. And then curious if you’re seeing any conversations around new build frac fleets at all, particularly given the strength in pricing in pressure pumping has been very strong this year despite activity declines. Anything that you could share there? What could that mean for NOV?
Jose Bayardo: Yes, we are having inquiries around new frac fleets, a lot of that. I mean, as you know, the frac fleet has a lot of churn in it because it’s so consumptive of equipment. And as the industry has moved to greater frac intensity that equipment is being run harder. And so yes, we’ve had a number of conversations underway with customers around new frac fleets. What I would tell you is that the interest in electric fleets continues to grow, in particular, we noted this quarter some orders for some pumpers and e-frac equipment. And so I think more and more E&P companies are requiring that are preferring frac fleets, because they have lower emissions as well as the pressure pumpers learning, they have lower cost of ownership. And so that’s a good opportunity, I think, for again, NOV’s technology to play a key role going forward.
Ati Modak: Thank you. I appreciate the answers.
Jose Bayardo: You bet. Thank you.
Operator: Thank you. And this does conclude our question-and-answer session. And I would like to hand the conference back over to Mr. Clay Williams for his closing remarks.
Clay Williams: Thank you, Michelle, and thank you all for joining us this morning. We look forward to discussing our fourth quarter and year-end results with you in February. Hope you have a very nice day.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
