Kurt Hallead: Hey, maybe just a quick follow-up with respect to Mark’s question, right? So again, in the most recent past, you guys have given some of your outlook regarding what you would anticipate your subsea order book to look like over the course of the next couple of years. That wasn’t explicitly referenced in this call. However, given the dynamics at play where you talk about quality over quantity, and then you talk about new technologies unlocking new business opportunities, I was wondering if you might be able to give us some update on how the order outlook has changed or if it has changed at all.
Doug Pferdehirt: Again, Kurt, much like Mark, thank you for clarifying because we do our best to communicate effectively, but you learn as well. So the fact that we did not mention that we have a target of $30 billion of orders for three years through 2025 or that we remain very confident in achieving our 2024 guidance of approaching $10 billion of orders, us not saying it we thought was a strong message that we’re very confident, but let me be very clear, we remain very, very confident. In terms of the feed activity, in terms of the tendering activity, and in terms of the, I would say, very mature, meaning late stage, pre-FID conversations that I’m having with clients today, and I’m not complaining about it, Mark, but I’m very, very busy. Kurt, sorry.
Kurt Hallead: That’s okay. That’s all right. All right, that’s it for me. Thanks for clarifying. Appreciate it.
Operator: Our next question comes from the line of Scott Gruber with Citigroup. Please go ahead.
Scott Gruber: I got one for Alf. With the profitability of the business improving, the tax rate should trend toward a more normalized level over time and we have the guidance for this year, how should we think about the evolution of the tax rate in ’25 and ’26, we’re looking at fall to in the years ahead.
Doug Pferdehirt: So thanks for the question with taxes here. So first of all maybe just point out if you look at the effective tax rates for the quarter, there is a little bit of a timing effect of it being a little bit lower than normal in this quarter. So first of all we stand behind our guidance of $280 million to $290 million for 2024 and if you consider the growth in EBITDA etcetera that we are projecting, I’d say that this is implying a roughly 35% effective tax rate for the year with our current earnings mix as planned. As we talked about a little bit before we are targeting a normalized tax rate of 30% and I would continue to build on that or model on that if you’re looking for the out years, it largely come from a combination of earnings mix and some other utilization of tax opportunities that we can’t couldn’t take advantage of in the past. So overall we remain confident to drive towards a 30% normalized tax rate.
Scott Gruber: And how long do you think it would take to get there, that’s a bit possible in ’25 or ’26?
Doug Pferdehirt: You’re in the right ballpark of somewhere in that between those two years yes.
Operator: Our next question comes from the line of Doug Becker with Capital One. Please go ahead.
Doug Becker: Thank you. Doug, you previously mentioned that all electric subsidy production systems could result in incremental tieback opportunities of $8 billion through 2030. Was just hoping you could frame maybe a realistic or risked opportunity as you see it today for FTI?
Doug Pferdehirt: Yeah thanks, Doug. Yeah, that number is probably a little stale, actually at this point. I would say there’s upside to that number in terms of we put that out in I think 2021. Clearly all electric and the adoption and qualification of all electric is now, we’ve pretty much covered our entire client base and that takes some time. Obviously it’s developing the technology, but then qualifying it and then getting your customers aligned. In terms of I don’t have a hard set year-by-year kind of how I see that developing yet. It might still be a little bit early, but obviously getting the first award was key, that being in the CCS environment, not in the brownfield tieback environment, but as I said, things are being bid in parallel today between CCS and traditional energy.
So there’ll be more to come, but look Doug, remain very confident and this one, I’ll be honest, this one’s a little bit of a no-brainer. If you’re sitting with an existing host facility that’s aging every day that you can get some additional hydrocarbon to flow through and obviously improve their the financial results and leverage the cost of that capital investment that you may have made many years ago, it just makes sense. So we’re kind of in a unique position. We have a lot of the infrastructure. Over 50% of the world’s infrastructure on the sea floor. So we’re in a unique position to really try to help to kind of marry up somebody that has a what would be called a stranded asset simply meaning it was too far away from a host facility to be able to be economically produced and could not support its own host facility because of the CapEx required to do so to be able to marry that up with a somebody that has a production asset and that’s certainly what we’re doing today in the conversations that we’re having.
Doug Becker: No that certainly sounds encouraging. Is it reasonable to expect an all-electric award on the oil and gas side this year more of a 2025 award?
Doug Pferdehirt: We like to think about things in 24-month time frames just to be a little bit conservative, but you could see something on the shorter end of that for an all-electric oil and gas award or a project being FID. I do think you could see that. Again up to our customers when they eat FID, but if I just think about the commercial discussions and the maturity of those discussions and that’s what I meant by in parallel meaning it wouldn’t be too far out.
Doug Becker: Got it. And then just a quick one Alf, the free cash flow loss was narrower than at least I expected, to my consensus expected, in the context that subsea is toward the upper half of the guidance range. For free cash flow, is that trending toward the upper half, or midpoint still the best place to anchor?
Alf Melin: So first of all, free cash flow, you’re right, we had a strong first quarter for being us, at least, the net outflow represents really, $179 million really represents a solid start for the year for us and because it is typically our seasonally most weak quarter that we have, and also point out that we did have the $56 million payment towards a legal settlement that affected the quarter. So overall, we feel really good about where we are, and I expect obviously this to build during the year. We typically trend up during the year, and you will see the majority of the cash flow generation in the second half of the year and clearly, as we grow EBITDA, and in particular in Subsea, we expect to see a little bit of additional conversion of free cash flow from EBITDA.
