With a legacy that dates back over 230 years, we are more than just the pumps, valves, and seals we create. Together, we create extraordinary flow control solutions to make the world better for everyone. We're united by this purpose to help tackle the world's toughest flow control challenges and provide our customers with an unparalleled experience. Whether we're helping our customers provide fresh drinking water, develop microchips, control floodwaters, reduce carbon emissions, or enable energy transition, our products and services are making a difference all around the world. Since the creation of our oldest pump brand in the 1700s, the strength of our people has allowed us to endure through challenging times and evolve into the global leader we are today. Together with our more than 17,000 associates across 50 countries, we have built a culture of safety and quality and developed a spirit of innovation. From 3D printing to industrial IoT solutions, we are using innovative and sustainable technologies to proactively address the needs of our customers. For us, our evolution doesn't stop there. We are continually diversifying, decarbonizing, and digitizing our offerings and operations to build a more sustainable future and provide for our customers for generations to come. At Flowserve, we come to work each day to deliver on a purpose that's bigger than ourselves. We deliver innovative products and services. We support our communities. We create sustainable solutions. We help make the world better together. Good morning, everybody, and welcome to Flowserve's 2023 Analyst Day. It's absolutely terrific to have so many of you with us here in person, and we also appreciate those who are joining us today on our webcast as well. We have a lot of content to cover over the next few hours, so I'm gonna be relatively brief this morning. Safety is always the very top priority at Flowserve in whatever we do and today is certainly no exception. Please review the diagram and locate the nearest stairwell exit to you. The exit on this floor or on the rooftop here is right behind the screen to your right. The St. Regis has assured us this morning that no drills are planned, and so should the alarms go off, please treat it as real, and proceed calmly to the stairwell exit, head down the stairs, and depart the building on the ground floor. As always, we just want everybody to be safe and prepared. Today's presentations, to no one's surprise, will include forward-looking statements and non-GAAP measures. We encourage you to fully review the safe harbor disclosure at your convenience, and also to review the reconciliations of our GAAP to adjusted measures located in the appendix of the presentation. We are fortunate that most of our executive leadership team is here today. The pictures on the slide here are those who will be presenting, but I also want to recognize Elizabeth Burger, who is our Chief Human Resources Officer, and Juan Carrera, who is Head of our Global Operations, for joining us as well today. If you have a chance, please drop by and say hello to them. I know they'd love to talk to you about Flowserve as well. We really have a full agenda this morning. Scott's gonna begin our presentations momentarily, followed by Kirk and Lamar, who are gonna discuss how they're advancing and progressing their businesses. We'll then have a short 15-minute break that follows the president speaking, and I'd encourage you to view our displays outside in the foyer and talk to the product experts to the extent you haven't done so already. After the break, Karthik's gonna come back, and he's gonna talk about how Flowserve is innovating for the future, which is really key to our expected growth. Susan will then come to the stage, and she will discuss climate, culture, and core responsibility, and really how that activity is truly aligned with our 3D growth strategy. Amy's gonna wrap up with a financial overview and our plans to create value through profitable growth. We'll then have a lengthy Q&A period afterwards, and I'd request that you please hold any questions until that period begins. Afterward, for those of you who are able to join us, we're gonna be hosting lunch over in the Penthouse, and it'll give you a great opportunity to interact with our senior leadership team. With those comments, let's get started today. I'm pleased to welcome Scott Rowe, Flowserve's President and Chief Executive Officer, to our stage. Good morning. Welcome to the Flowserve Analyst Day. We are glad to see everyone here in the room, and then for those that are connecting online, thank you for joining us today as well. It's been five years since our last Investor Day. A lot has happened since then, and I'm pleased to share with you today a comprehensive update and outlook on the future of Flowserve. You also get to hear from many of our team members, who will share their perspective and articulate how we will create value into the future. So let me start first with the key takeaways for the day. We believe we are well positioned for growth as our core markets have a positive outlook and infrastructure spending has increased globally. Combining this in-market growth with our 3D strategy to capitalize on favorable mega trends ensures a solid growth trajectory for the future. Additionally, we are now executing at a much higher level, and I want to share with you our new operating model and how we are leveraging the work from Flowserve 2.0 in the transformation there. We'll also talk about technology and how we're digitizing our offering. We are capitalizing on our large installed base, our extensive domain expertise, and our IoT platform, RedRaven, to solve our customers' biggest challenges. We'll hit that theme several times today. And then finally, we'll share our updated growth and margin targets and provide details on how we believe we can achieve these targets. So let me begin with a short overview of who we are. Flowserve has a strong foundation and a long history of success to build from. Our first brand goes back 230 years. We go to market with 50 trusted brands, and while this is only a selection of the customers that we serve, you can get a feel for the diversity and the breadth of our end users. At Flowserve, we are driven by our culture. We're inspired by our purpose statement to make the world better for everyone. We're grounded in our values, and we are passionate about our people, serving our customers, and solving our customers' biggest challenges. Our culture is what sets us apart from others, and I'm proud of what we've created at Flowserve. We truly are a global leader in flow control. We operate in over 50 countries with a broad footprint, and we have more than 5 million assets deployed and operating around the world. That is a massive installed base, and we'll touch on why that's important in the coming slides. Our revenue is around $4 billion, with growth this year between 16% and 18% compared to 2022. We truly have industry-leading scale, an unmatched portfolio, and deep customer relationships. Additionally, we have a very balanced portfolio. Our broad perspective on geography and industrial provides strategic flexibility. We are unique because we provide critical flow control equipment in pumps, valves, and mechanical seals. Roughly 85% of our revenues are generated from providing equipment and services to existing infrastructure rather than greenfield or new projects. Let me now talk about how we're running the company and the journey that we're on. We've made substantial changes to this company since I've been with Flowserve. Before 2017, we operated as a highly fragmented and decentralized organization. We operated with more than 50 P&Ls around the world. We had disparate systems and processes and a heavy corporate function to monitor the various activities. We launched Flowserve 2.0 in 2018 to fundamentally change the way we work and operate. In this program, we developed central processes, standard reporting and metrics, and significantly reduced our overall internal complexity. While we made great progress with Flowserve 2.0, and I'll share some examples in the next slide, there was more work that needed to be done to truly run our business effectively. At the beginning of the year, we reorganized the company to fully support the 3D growth strategy and to drive enhanced execution, and I'll get into that in the coming slides. First, within Flowserve 2.0, we built a great foundation for future success. Our culture is rock solid. We now have common IT tools like CRM for our commercial teams, PLM for the engineering teams, and we have substantially cleaned up the ERP and the overall IT landscape. This was not a light lift. There was a lot of work that needed to be done here. We have closed or consolidated over 25% of our manufacturing roofline, and we did all of this while strengthening our ties with our customers and capitalizing on our installed base through the Commercial Intensity initiative, which has now driven record aftermarket bookings. While Flowserve 2.0 wasn't perfect, we accomplished a lot during this period, which now positions us incredibly well for the future. We launched the new operating model at the beginning of this year to support the 3D strategy and improve our execution. We're doing this with speed, accountability, and cost. So we need... You know, we, we went to market last year with cost targets to, to continue to move our cost structure down. We announced that last year. Amy will share our progress on that. We created seven business units under the two divisions that have full P&L accountability and the associated functional support needed to drive value. We also further invested in the global operational team to ensure that we have the talent, the process, and the tools to deliver to our customers. We lifted up the R&D and the innovation resources into a dedicated organization to help drive innovation for the future. Think new product development and R&D. And finally, we enhanced our organizational focus on product and portfolio management. And here's what it looks like. And while we are still in the early months of its inception, the new design is already delivering improved execution. Lamar Duhon is leading Pumps Division, which has four business units: Engineered Pumps, Industrial Pumps, Mechanical Seals, and Aftermarket Services and Solutions. Kirk Wilson leads our Flow Control Division. We have Isolation Valves, Automation and Control Valves, Aftermarket Services and Solutions as well. Each division is self-contained and has all of the resources necessary to run their business: strategic, commercial, and execution resources. We now have two new leaders, Karthik Sivaraman, leading Innovation and Technology, and Juan Carrera, who's over our operational excellence program. Our corporate functional team is largely the same, and they continue to deliver a high level of service back to the overall organization. We have further invested in our operational excellence capabilities and processes. The foundational elements of this program are fully in place, and while we have made great progress on the enhancing elements, there's still more work to be done, primarily around our plant management system and further roofline optimization. As we turn the corner into 2024, we will be looking to further refine our operating model to include planning tools and further automation. While our journey here is never complete, we have made substantial progress with our operations over the last 12 months, and I'm confident that the new team, combined with our defined operational excellence program, will generate 100-200 basis points of margin improvement by 2027. Additionally, we've established an Operational Excellence Academy, which is delivering training and process discipline back to the overall organization. We also have opportunities with product management and portfolio optimization. You'll hear this several times throughout the presentation this morning. While this was always a part of the operating model of the past, we've not made as much progress here as I would have liked. The new organizational structure facilitates the product management function across the companies, across the company. We are investing in these teams with training and tools, and we are enhancing the visibility to our product portfolio so we can make decisions quicker on exiting products, growing products, and improving the product portfolio. Again, we are confident that this initiative will yield 100-200 basis points of margin improvement by 2027. Let me now go to our end markets and our outlook. Our traditional markets have returned to growth, and our expectation is that they keep growing. We have an internal market model at Flowserve that pulls planned CapEx and OpEx from various public and private sources of data, and then our team takes that and convert it - converts it to what we believe is the flow control entitlement for these opportunities. Then we take that to create our, our total available market and the market outlook, which is what we're seeing here, the CAGRs that we see here, which extend out to 2028. While 3.3% doesn't sound too exciting, this number is more like a country GDP number. Anything above 3% is really good and has the potential to generate significant bookings growth for Flowserve. In fact, 3.3% is 100 basis points higher than last year when we did the same exercise, and it's the second highest CAGR that I've seen in my six years at Flowserve. So we feel really good about the end markets, and this doesn't include our new energy, which I'll get into next. We also see tremendous opportunities generated from powerful megatrends: decarbonization, resource security, regionalization, and digitization. Each of these megatrends provides significant opportunity for infrastructure and flow control investment today and in the future. The decarbonization lane is about taking advantage of the regulations created by countries to support a greener planet and the investments required by our customers to meet their own ESG goals. We see substantial flow control opportunities to decarbonize existing assets and support new energy. So themes in this lane would be hydrogen, carbon capture, recyclable plastics, and energy storage. On resource security, as countries try to navigate a complex and difficult geopolitical environment, we see future flow control investment needed to drive energy security, water security, and mineral security. To prevent further disruptions, countries and companies are focused on a more regional strategy to secure their supply chain and ensure consistent operations. So within regionalization, we see opportunities with advanced manufacturing, like semiconductor manufacturing and pharmaceutical manufacturing, that all have flow control opportunities. And finally, digitization. The world is becoming more connected, and the ability to use and leverage data will become a true differentiator. We see a significant opportunity in digitizing flow control equipment and helping our customers drive enhanced operations with better data analysis. We'll hit this theme several times today as we go forward. The decarbonization megatrend in supporting energy transition is incredibly exciting. We see tremendous growth in this space with a CAGR of 14% and new energy like hydrogen, biofuels, CCUS, more than tripling in the next five years. Here are a few select CAGRs for activities within the 3D strategy. As you can see, the 3D strategy is truly focused on advantaged markets. Nuclear stands out a little bit on the low side at 3.3%, but over the last five years, that number has been more like zero. So we're excited to see the return to growth here, and we think it has the potential to be much higher than 3%. Additionally, the nuclear TAM is the largest current market in the decarbonization lane, so any growth here is super beneficial to Flowserve, and I'll talk more about nuclear in the 3D strategy. So now let's turn to the 3D strategy. We'll talk about how do we capitalize on this growth potential? So our 3D strategy was launched last year. It was designed to diversify, decarbonize, and digitize our overall business while continuing to support and grow our existing customers and markets. While we're excited about our growth potential within the 3D strategy, we may, we remain committed to our core markets, aftermarket growth, and our pursuit of operational excellence and customer excellence, and continuing to provide IT enablers throughout the organization. This is a slide I use over and over with our team for the last year and a half. We've seen early success with the 3D strategy. In 2022, we grew our diversified bookings by 16%, decarbonization bookings grew by 75%, and our RedRaven installed base grew by 39% in 2022. And today, 3D bookings make up roughly 30% of the total business. We've seen outsized growth with this strategy, and we expect it to continue as we go forward. Let me now talk about each of the 3Ds. We'll start with diversify. We have selected a number of focus areas within the diversify strategy to drive growth. So water, specialty chemicals, vacuum technology, and diverse seal applications. Each of these has enhanced focus and specific initiatives to expand our offering and drive growth. I want to first highlight vacuum technology. So we have a great vacuum portfolio under the SIHI brand name. It consists of liquid ring vacuum pumps and compressors and dry vacuum technology. The total available market is $10 billion. We believe the forward look is growing at about 7.6%, and our 12-month opportunity funnel, this is what we see in our CRM system, is showing 14% year-on-year growth for opportunities. Vacuum technology supports industrial manufacturing and chemical processing. The barriers to entry are incredibly high, the competition is limited, and we believe we have superior technology to continue to capitalize on this attractive growth. Let's go to decarbonize. The decarbonize strategy continues to expand. It contains existing markets like LNG and nuclear that we are fully committed to, and I'll touch on some of those as we go forward. It also contains our consultative offering, Energy Advantage. This helps our customers reduce energy consumption and CO2 reduction, emissions reduction within their existing infrastructure, and we'll share an example of how we're doing this later in the morning. Finally, decarbonize includes products and services to support the growth of new energy and new technology required in carbon capture, hydrogen, recyclable plastic, and biodiesel conversions. Again, the decarbonization lane is incredibly attractive, and we are well-positioned to grow in this area. Let me talk about nuclear first. We have an advantaged position in the nuclear market with pumps, valve, seals, and compressors. We've been involved in nuclear products since the development of nuclear power in the 1950s, and we have preferred technology with many of the nuclear power generators. Again, while the 3.3 CAGR doesn't look that high, we believe nuclear is going to grow significantly, and we see new build opportunities in Eastern Europe and Asia, and life extension opportunities in the Americas and Europe. Our opportunity pipeline, again, our internal funnel here, is showing 85% growth year-on-year. We believe that this will continue as countries focus on energy security by leveraging this dense and clean form of energy. Let me talk about hydrogen. There are many forms of hydrogen. We've got green, blue, gray, and a variety of others in between. There are opportunities for flow control equipment in all of those applications, in the production side, the transportation side, and in the distribution side of hydrogen. We're very excited about hydrogen and have equipment installed already in many of the traditional hydrogen applications, as well as being selected for many of the new green hydrogen projects. The 40% CAGR highlights the amount of capital moving into this space to take advantage of the many government incentives around the world to commercialize hydrogen. We believe this market continues to grow at a robust rate, with the majority of the growth coming in the later years. We continue to invest in our own portfolio of products, both organically and with M&A, or inorganically. Finally, I'll talk about digitization. We are digitizing our offering through the IoT platform called RedRaven. We are also using digital to enhance our customer experience and drive further efficiencies within our own internal operations. At Flowserve, we continue to invest in technology to better enable our people and our customers, and we're just starting to use generative AI to connect our extensive data and drive further productivity within our operations. Our RedRaven offering is making great progress. We now operate on more than 70 customer sites around the world. We have 2,000 assets that are instrumented with RedRaven technology, and we're seeing this grow at roughly 30% a year. The offering allows our customers to monitor, predict, and ultimately help them optimize their flow loop operations. You can see our RedRaven demo right outside. Eric Zerkle's there. He's very passionate about the product, and he's been leading this for several years. So at a break or at the end of the presentation, please stop by the booth there. So what does all this add up to? We believe we can grow the business within the core markets at a rate at least 3.3% and accelerate our growth with the 3D strategy at more than 10%, giving Flowserve a multiyear revenue growth rate of at least 5%. Let me now turn to Innovation and Technology and provide some context on what Karthik will be sharing later in the agenda. I believe Flowserve is in an advantaged position when it comes to connected flow control. We have a massive installed base of over 5 million assets and have extensive domain expertise in diverse end markets. We can build on this historical knowledge and know-how by instrumenting our hardware and enabling our products to become smart. With these smart assets, we can collect data and provide solutions that better support our customers to help them avoid unplanned downtime and improve their overall flow loop operations. We believe we are on a path to enhance services and solutions that will provide recurring revenue and outsized margins through parts and equipment pull-through. Let me show you what this looks like in action. All right, so this is a traditional refinery, and today our offering is essentially replacement parts, on-site services, select repairs and upgrades. While this business is working really well, we want to do more for our customers, and we want to ensure that we can get the parts and the service business for years to come. So we add RedRaven to the critical pumps and the critical valves with remote monitoring capabilities and advanced predictive algorithms. When we do that, we now become a valuable partner to our customers. We're monitoring their assets, predicting maintenance, preventing unplanned downtime, and we can start having conversations around solutions. We can talk about energy consumption and reducing that. We can talk about CO₂ emissions and reducing their CO₂, and we can help our operators further optimize their flow loops. When we add RedRaven, we become a true partner for our customers, helping them solve their most difficult problems. You'll hear from two of our customers in some videos later today. So we believe the 3D strategy, our improved execution under the new operating model, and our commitment to innovation has us positioned incredibly well for value creation. We can create value by leveraging our strong culture, continuing to refine our execution approach, and building upon our 3D growth strategy. The foundation of culture, process, and cost control is firmly in place, and you can see that on the bottom of the slide. Executing on operational excellence and product management has improved greatly this year, with significant more opportunities to come. And we're at the beginning of the journey to leverage technology in support of the 3D strategy and ultimately moving more towards becoming a solutions provider. So today, I'm pleased to announce our updated long-term targets for 2027. We believe we can a chieve 5% revenue growth, delivering $5 billion of organic revenue by 2027. The growth comes from the healthy core markets, combined with the accelerated 3D growth. We also believe that we can maintain the operating momentum that we have experienced in the last year, capitalizing on operational excellence and new product development initiatives, each delivering 100-200 basis points of margin improvement, to deliver a Flowserve overall adjusted operating margin of 14%-16% by 2027. Finally, this translates to more than $4 of adjusted EPS in 2027, which is roughly twice the EPS that we expect to deliver this year. All right, let me now turn this presentation over to our division presidents. They're going to talk about their respective businesses and how their plans support these targets. We'll start with Lamar Duhon, the President of our Pumps Division. Thanks, Scott. Good morning. I'm Lamar Duhon. I've been with Flowserve since the beginning of 2022. Before that, I spent 26 years in the oil and gas services industry. Last year, I led our aftermarket division, and I've led the combined Pumps Division since the beginning of this year. I'm excited to share the Pumps Division update with you today. In the Flowserve Pumps Division, we participate in a $94 billion market. We have a strong position with $2.8 billion of revenue generated over the last four quarters. The Flowserve Pumps Division is organized into three global product-oriented business units and our Services and Solutions business unit. In the Engineered Pumps business unit, we produce high-energy, large skid-style pump packages with long aftermarket tails of more than 40 years. Some common applications are in desalination plants, downstream refineries, and cooling water applications like molten salt, solar farms, and nuclear facilities. This work is project-based, consisting of multiple packages with lead times from 12-18 months. Our direct customers are EPCs, who are supporting end users in large construction projects. For these projects, it's critical to meet the end user specifications and deliver on time. In the Industrial Pumps business unit, we manufacture smaller pumps that have a more standard configuration than our Engineered Pumps. Used in general industries for a wide variety of applications like water and chemical processing, these pumps are a major contributor to our diversification plans. The lead times in industrial pumps range from a few weeks to a few months. These orders are often directly to end users or through our distributor network. With a lower relative price point and more standard designs, industrial pumps are more likely to be replaced than repaired when we compare them to our Engineered Pumps. Quoting fast and delivering fast can differentiate us in industrial pumps. I'll highlight our vacuum business later in the presentation. Our Seals business unit is a flagship business within Flowserve. It's a sizable business that consistently delivers attractive returns. The segment we participate in is the high complexity engineered seals for rotating equipment like pumps and compressors. The market is highly concentrated, with only a few companies having the capability to design and manufacture these types of seals. We're the only large-scale OEM who manufacture both pumps and seals. The original equipment sales are both to end users and to OEMs. Having an installed seal is a big aftermarket advantage. We make investments to install original equipment seals because we know the full life cycle return is attractive. When servicing the aftermarket, speed matters, as often these are critical customer equipment that have operations idle until repairs are completed. In the Services and Solutions business unit, we repair and upgrade pumps and seals by utilizing our application expertise. This business is driven by our local presence, near end users, and our install base, which gets our experts inside of customer facilities. Speed of quoting and speed of repair matter, since these are critical equipment that impact customer production. When we talk about the services and solutions business, we always start the conversations with speed and responsiveness. I'll highlight the pumps part portion of this business later in the presentation. The Pumps Division portfolio is well-balanced, with our revenue evenly dispersed in each of the business units. We operate all over the world, with about half of our revenue coming from North America and Latin America, while the other half is evenly distributed between Middle East, Africa, Europe, and Asia Pacific. One-third of the division revenue comes from our original equipment part of the business, which feeds our aftermarket part, generating the other two-thirds. We've established a large set of legacy brands in pumps and seals that are well-respected in the industry. When we think about our strategies growing the Pumps Division, we think about it in three lanes. The first is growing in advantaged markets. These markets have high growth rates, where we differentiate with product performance and where the full product lifecycle return is attractive. We have differentiated products for the dry vacuum and nuclear industries in our current portfolio that enable us to benefit from the high growth happening in energy transition today. Additionally, in energy transition, we're developing next-generation cryogenic pumps that have class-leading performance to support LNG regasification processes and hydrogen vehicle fueling stations with adjacent applications. The next lane of focus is our aftermarket. The aftermarket business is attractive due to the incumbency advantages and the opportunity to differentiate with speed and our application expertise. Our installed base gets us inside the fence, where we build relationships and become an integral part of end user daily operations to support their asset management. We leverage our large number of local Quick Response Center s to collaborate with end user customers to solve their problems and get their production back online fast. We've done this well in the past, and we're continuing to strengthen our capabilities to do this better in the future. Our four aftermarket growth focus areas leverage our pump and seal install bases, our application expertise, and our large Quick Response Center footprint to increase our capture rate, grow recurring revenue, and stimulate high-margin upgrades and repairs for specialty equipment. The third lane that's accelerating growth is the new operating model. We're nine months into the new model, and it's already delivering value across the global vertical business units. As we get specific about how we optimize common process businesses and leverage the cross-business unit synergies to maximize returns for each business unit. By standardizing and optimizing commercial processes, order routing, and order fulfillment activities that are fit for each business unit, we're able to deliver on time and at competitive costs. The global business unit structures in rationalizing our product portfolio enable us to streamline value chain activities, consolidate facilities where we manufacture products, and connect and create new scale efficiencies. We believe in the Pumps Division, we're focused on the market and business segments that create the most value for the business. An example of an advantaged market we're focused on is the dry vacuum market. This is our SIHI brand with preferred products that are well known for performance and reliability. Our dry vacuum products support high-growth market segments in thin film, like glass coating and solar panel manufacturing. We have performance differentiating products that reduce coating process times and increase customer production. We have performance-differentiating products in all aspects of dry vacuum. The dry vacuum channel market is direct to end users who are willing to pay for the value our products create. By increasing our manufacturing capacity within an existing roof line and designing products for speed of manufacturing, we're increasing throughput and maximizing absorption. We've also strengthened our aftermarket capabilities in North America and Asia to capture the aftermarket revenue stream we were missing. We're excited about the market opportunity for dry vacuum when we consider the high growth rate addressable applications, compounded with the opportunity to gain share. With the actions we're executing, we're confident we can organically double the size of the business by 2027 while expanding margins. We have a lot of market opportunities for growth in aftermarket. I'll highlight the highest margin portion of our portfolio with our pump parts capture program. Our installed equipment base incumbency as an OEM and our strong global team that establishes end user relationships gives us an advantaged position. We began our growth focus two years ago and have seen the results with mid-teens growth last year and are on pace for the same this year. The parts business is one where speed really matters. Quoting within hours or one to two days maximum and delivering as soon as possible is important, since often there's a critical piece of equipment that's offline. We're continuing our focus on positioning ourselves with more customers, with pricing agreements and inventory programs, and using the new operating model, global vertical structure, to deliver faster with improved order routing efficiency. While we're consolidating roof line in other parts of the business, this is one where we're strategically adding internal capacity to deliver quickly and outsource capacity to flex when opportunities arise. We're committed to continuing the work we started to deliver 12% compound annual growth through 2027. Industrial Pumps is a business unit that sees big benefits from the product management focus that the new operating model brings. We have a large amount of industrial pump types serving a wide range of applications in general industries. These pumps are mostly off-the-shelf configurations that need to be delivered quickly. Growth in Industrial Pumps helps us diversify into other industries. By rationalizing our portfolio to reduce the number of pump designs that serve the market and standardizing product designs, we're able to speed up the quoting process to increase our win rates, concentrate the number of sites where we make each pump type to create scale efficiencies, and simplify our supply chain. With our action plan, we're confident we will improve operating margins in the Industrial Pumps business by 350 basis points by 2027. In the Pumps Division, we're focused on needle-moving initiatives, prioritizing high-growth markets where we can differentiate, growing our aftermarket capture, and operating in new ways that grow revenue and expand margins. When we look at our revenue, we generated $2.5 billion of sales in 2022. We have a fast start to growing in the first half of 2023, as you've seen from our results, and we expect that to continue through 2024 with our strong backlog and increasing revenue conversion. When we add our focus on winning in high growth rate markets where we're differentiated, increasing our aftermarket capture rate, and operating more effectively and efficiently, we see a clear path to $3.6 billion-$3.9 billion of revenue in 2027. When we look at our margins, just like with revenue, we're making meaningful progress in 2023, and we'll end the year in a much better position than we started. I'm confident that expansion will continue through 2024. As we optimize the commercial part of the business with the full product lifecycle focus and disproportionately grow in the high margin segments, we're imparting a deliberate, favorable mix shift on the business. As we add the benefits of executing our new operating model to use product management actions to create scale efficiencies and minimize fixed costs, we see line of sight to operating margins between 16% and 18% in 2027. As you saw on the bridges, we're executing a plan to grow revenue to over $3.6 billion with margins above 16%. I'm confident in our ability to deliver because we're laser-focused on the key items for success. We will continue to quote and deliver faster where we get paid for it, and prioritize large, high-margin market segments. As part of our prioritization, we're selectively bidding engineered projects that provide an attractive full lifecycle return. We're focused on winning in the high-growth energy transition space. We have differentiation with our current and new products. We're creating a more cycle-resilient cost structure with focus on our Engineered Pumps business, roofline consolidation, and outsourcing non-core activities. These are exciting times in the Pumps Division, and I'm glad to be part of it. Now, I'd like to welcome Kirk Wilson, our Flow Control Division President. Thank you, Lamar, and good morning, everybody. I'm Kirk Wilson, and I've been with Flowserve for 26 years, serving in various roles and leadership positions across the company. I've been leading our flow control business since 2019. I'm encouraged by our progress and energized by the future that we're creating. I'm excited to be with you today and share more about FCD. The global valve market is sized at $78 billion. It's a fragmented market with a wide variety of valve types and suppliers. This includes commercial and retail valves. Our portfolio is positioned for a technology play in flow control for energy and industrial infrastructure, and Flowserve is recognized as an industry leader in this space. At $1.2 billion in revenue, we're the second largest industrial valve company in the world. We serve the market through three business units. Our Isolation business unit contains our product portfolio of on-off valves. Our Automation business unit contains our portfolio of control valves and actuators, and our Services and Solutions business unit contains our Quick Response Center s around the world and our on-site services capabilities. We are globally diverse, with opportunities to grow in every region. You'll notice that our aftermarket mix is slightly lower than what you saw on our pump business. This is because some valves are more economical to replace rather than to repair or to service. So we segment our original equipment business into project OE and MRO OE. MRO is an industry term that stands for maintenance, repair, and operations. This is how our customers talk about their activities and their spend at an operational level. So for us, MRO includes replacement valves and actuators, or MRO OE, and traditional aftermarket of parts, repairs, and services. This segmentation enables us to measure our true progress and performance in the market for both MRO with our end user customers and for capital projects. I'd note that our original equipment margins linked to MRO activities are slightly favorable relative to the margins we see on capital projects. We have a strong portfolio of leading brands, some established back in the 1800s. We're well positioned today with a number of opportunities for future growth. We have a comprehensive strategy to deliver long-term, profitable growth that outpaces market growth. I'd like to highlight three areas that are critical to our strategy. First is our end user customer growth. End user customers own, operate, and maintain equipment that's installed in their plants. Speed and proximity are critical to serve our customers at a local level, and we're focusing on the unique needs and challenges of each customer. This allows us to create more value for them and grow our share of their MRO spend. We've aligned our organization and management processes to do this. Nobody can deliver MRO like Flowserve. We have a global network of QRCs, channels in the local markets, and a maniacal focus on serving our end user customers. Second is energy transition. Energy transition markets are projected to grow at significantly higher rates than the total market growth. These markets include hydrogen, LNG, nuclear, and concentrated solar power, to name a few. We are actively involved in these markets with our current portfolio of severe service applications, and we're working closely within the industry to identify and address new application needs as the market develops. Finally, our organization design and operating model. We're making great progress with our new organization design and have numerous examples of early successes. We're working to create a more efficient and effective operating platform, enable more effective portfolio management and operational excellence. I'll provide more details of these in the coming slides. MRO growth is the outcome of an intense focus to provide a valued service to our end user customers. This has been a focus area for us in FCD, and we're starting to see tremendous results. We've been building upon our capabilities with our control valve Quick Response Centers, but we've expanded into isolation valve repairs, actuator repairs, automation services, and other OEM repairs. We've aligned our commercial teams and our service operations within each region to provide seamless support, and we've increased our focus on customer turnaround activities. We now more proactively plan maintenance scopes and execution with our customers for their outage windows. So now we're in a better position to earn an increased share of our overall customers, of our customers' overall MRO spend. We will continue to grow geographically by leveraging Flowserve's global network of QRCs and by creating advanced service offerings like valve asset management. This strategy delivers in excess of $100 million of growth with accretive margins. MRO is at a higher segment, is a higher margin segment, growing at a faster rate than the rest of our business, so a deliberate mix shift helps us improve our overall margins in excess of 50 basis points. We see cryogenic applications as a critical enabler for energy transition. Cryogenic temperatures range between -150 degrees and 270 degrees Celsius. These are difficult applications with high barriers to entry. Our current portfolio is strong, and it was developed primarily for industrial gas and LNG applications. Today, we participate in flagship LNG projects around the world, and we're preferred by customers like Shell and Chart. You will see in the display area an example of one of our cryogenic valves. It's a Valtek Mark Six control valve, and these are the types of valves that we're supplying into these projects. We also have cryogenic designs for our ball valves and for our butterfly valves. The technical requirements for hydrogen applications are very similar to what we see for LNG applications, and we're working with industry partners to round out our portfolio in hydrogen. We've had examples of early successes. We recently announced that we were working with Air Products to supply over 2,000 valves, both control valves and isolation valves, for the world's largest green hydrogen plant, and that plant's expected to come online in 2026. We're excited about the future opportunities with cryogenic flow control and continue to develop solutions for future needs. This strategy delivers over $60 million in revenue growth by 2027. In Q1, we announced our agreement to acquire Velan. I'm excited about this acquisition. Velan fits perfectly within our 3D strategy, and it helps to accelerate our growth. We expect the acquisition will add about $360 million in incremental revenue to Flowserve. We have plans in place to deliver $20 million in cost synergies, creating attractive multiples for the transaction. Velan is a well-established brand, and it's highly complementary to our portfolio of severe service, cryogenic, and nuclear valves, and there's very little overlap between our product portfolios. Our team has been working closely with Velan on regulatory approvals and integration planning. Over the past 12 months, I've personally invested time at Velan sites and with their people. I'm very impressed with their talents, their products, their engineering capabilities, and their overall brand position in the market. We believe that together, Velan and Flowserve will create the top isolation valve business in the world. So we're very excited about this acquisition. We're working hard to obtain the final regulatory approvals and move forward. With the new organization design, we're better positioned to optimize our portfolio of plants and products for growth. An example of this would be with geographic expansion. We have leading brands in electric actuation and in isolation valves, with significant opportunity to expand into global markets. For instance, our Limitorque electric actuators are a market leader in the North America market. About 80% of our revenues from that product line come from the North America market. So we have plans to migrate into Europe, the Middle East, and Africa, and we're positioning our capabilities for a more localized supply and support into those markets. This enables us to capture more market share from the growing trend in electrification. We have similar opportunities with other products. Placing products in closer proximity to end markets and fitting local market requirements expand margins for this product by at least 50 basis points. And this globalization strategy will deliver over $100 million in incremental revenue by 2017. We have a clear path to revenue and margin, revenue growth and margin expansion in FCD. We've made substantial progress in 2023. We've had strong backlog, backlog from our strong bookings performance, more consistency in our revenue convergence, conversions. Our margins are recovering, and you can see the results in our reported actuals and our guidance for the year. We're confident in our plans for another step up in 2024 with both revenues and margins. So we expect to exit 2024 well-positioned to achieve these 2027 targets. Our revenues will come from deliberate MRO growth, geographic and end market expansion, and 3D execution for our diversified growth in target markets. Our margins will expand based upon effective portfolio management, operational excellence, favorable revenue mix, and fixed cost leverage from the incremental revenues. Note that these targets exclude any impact from future acquisitions. In summary, our 2027 targets are to be at $1.5 billion in revenues and operating margins over 16%. This represents an over 8% compounded annual growth rate in revenues and an over 520 basis points increase in overall margins. I am confident about our ability to deliver because of our continued progress with our MRO growth and end user focus, the execution of our 3D strategies, and our optimized operating platform. So I'm very optimistic about our future, and I'm energized by the value we're creating for our customers, our shareholders, and our associates. Thank you for your time. I'll now hand it over to Jay. I'm sure from the last few presentations, you heard the excitement we have about our business and our growth opportunities from Scott, Lamar, and Kirk, and so we're, we're really excited about our future. We're at that special point here where we have a 15-minute break, and I would very much encourage you, if you haven't already, to visit our product demos and our product experts that are manning those demos. After 15 minutes, we'll be back for the rest of our presentation. Thank you. Flowserve plays a pivotal role in sustaining human life by ensuring essential services, from powering our world to supplying clean drinking water. Our cutting-edge flow control solutions are renowned for their durability, making Flowserve the natural choice for reliability. Our commitment to reliability goes beyond products. In 2021, we introduced RedRaven, a predictive maintenance service tailored for pumps, valves, and seals. It employs equipment sensors, secure communication, performance analytics, and trend reporting tools. This platform provides condition monitoring and predictive capabilities to prevent issues like equipment failure, safety hazards, and costly unplanned downtime. For ACWA, a global leader in desalination and electricity production, RedRaven has been transformative. By leveraging predictive algorithms, machine learning, and human expertise through RedRaven, ACWA can swiftly diagnose and resolve equipment issues, ensuring continued production. I firmly believe that using technology like RedRaven is extremely important as a step forward in how we operate and maintain our equipment. RedRaven was chosen to help optimize ACWA's power generation sites, further emphasizing RedRaven's scalability and endless possibilities. The technologies like RedRaven, and the capability that such kind of solutions provide, gives us an edge in how we perform maintenance and support the sites. Through this partnership, we are tackling global challenges like water scarcity and energy consumption. By integrating RedRaven's predictive analytics and control capabilities, ACWA conserves energy, reduces downtime, and minimizes its environmental footprint while moving towards total flow optimization. Flowserve and ACWA, creating a more sustainable, resilient, and efficient world. The ACWA example that we just showed is just one of many technology initiatives and projects that we're pursuing. It's going to be a key growth aspect to our future, and it's with pleasure that I invite Karthik Sivaraman, our Vice President of Innovation and Technology, to the stage to tell you about what he's doing for the company. Thank you, Jay, and good morning, everyone. As Jay mentioned, my name is Karthik Sivaraman, and I'm the Vice President of Innovation and Technology here at Flowserve. So before I get into my presentation, a little bit more about my background and what I am about. I've been in Flowserve for about 10 months now, but prior to that, I've got about two decades of experience running R&D and product organization across a couple of businesses within GE, Ingersoll Rand, and more recently in Halliburton. Now, as I was prepping up for this session, I got an opportunity to reflect on why I decided to join Flowserve, and a couple of things jumped out to me. The first, you know, the fact of stability and the tenacity of this company to exist over 200 years, weathering all of the economic storms, is quite impressive. But more important for me, it was the opportunity for me to come in, contribute, and be a part of what I would consider a phenomenal growth period in the next few years as we execute on our 3D strategy. Now, Scott and the presidents laid a compelling landscape on how we are strongly positioned today to win in the future. Now, what I'm going to do through my session is to kind of expand on why we believe innovation technology is going to be at the forefront of meeting that particular intent. When we think about innovation, more often than not, there's a technical connotation always tied to it. But here in Flowserve, we look at it slightly different. Anything which creates differentiated value, and here's the important part, differentiated value in the eyes of the customer is what we consider innovation. Of course, a big part of that is the technical solution we provide as part of our product and service, but equally important for us is the innovation around our execution process, the capability, and how we get those product and services in the hands of the customer. To that end, we have a three-prong approach. First, it's about the market, it's about the customer. It's about us engaging with our customer upfront to not determine their specs, but really their needs, and be flexible within our organization to deliver fit-for-purpose product and services which satisfy those needs. Second, how quickly can we get our products and services in the hands of the customer? The world is moving quickly, and we want to stay ahead of it. I'm a firm believer that the resiliency of a corporation dramatically improves through the different economic cycles as we execute with speed. Finally, our eye on the horizon. Our opportunity to elevate our product and services using our digital footprint, which is really our smart and connected products, to get to a point where we are actually offering solutions to our customer. Okay, a perfect example of that would be, let's take the water industry, right? You got a water operator. One of the biggest pain point is what? The utility bill they have to pay every single month, right? If a solution we provide gives them an opportunity to reduce their overall water bill, utility bill, it's a big deal for them. That's solving customer pain points, and that's what innovation is all about. Now, through the rest of my presentation, I'm going to double-click on each of these tenets, expand on what they are, and how we believe we're going to execute to it. Now, before I go there, I want to emphasize, we are already on the execution path, right? Since we implemented our 3D strategy, we have consciously redirected our R&D funds towards our 3D: the diversification, the decarbonization, digitization initiatives. And as of 2022, 45% of our entire R&D spend is now directed towards the 3D initiatives. And some of the outcome you already saw Scott presenting, 28% of our booking in 2022 came from through the 3D segment, and we're going to continue to grow on that. The thing, second thing is speed. You heard the presidents talk about it, right? How execution speed is important for them. Well, when it comes to new product development, it's no different. The execution speed is equally important for us, and we have consciously, over the past five years, incrementally improved our lead times. One of the metrics we often look at on how to measure our performance is what I call the New Product Vitality Index. And what that is, it's our new product revenue as a percentage of the total revenue for any given year. Over the past five years, our new product revenue has doubled. Finally, we will talk a lot more about solutions. But to get to a solution, first and foremost, we need to get our smart assets out there. As we stand today, we have more than 450,000 of our smart assets, digital positioners, and our RedRaven-enabled assets out there. Now, our strategy and our goal posts define where we want to go, but what gives us confidence that we can get there is our capabilities. It's our people and the labs we have. Today, we have over 2,000 scientists and engineers spread across the globe, working on solving customers' problems every single day. If you can imagine any disciplines which go into flow control solutions, we have that in the organization. To support that, we have world-class test capabilities spread across 15 different locations. As an example, our Etten-Leur facility in the Netherlands is probably one of the largest flow control test facilities in the world, which can cover the entire spectrum of pumps and seals, as far as testing is concerned. Now, when we deliver our product and services to our customers, we come into a promise which we make to them, right? But what gives them confidence of our success is the competencies we carry within our organization. And finally, on the intellectual property, we have 1,100 active patents today, something which we keep a close eye on, and we will continue to grow that, but we'll be very intentional how and where we grow that. Now, let's dig a little bit deeper on what I mean by customer-centric innovation. It's really our approach to the market and the customers. You know, we always look at it from the core market segment and the 3D segment, which I talk about, right? What we are looking for is the macro trends which is happening within those market segments. Now, if you look at the core market, all the industries within the core market segment are progressively getting more and more cost competitive, right? Our continued win in that segment will depend on how we manage our product cost. You probably have heard of Design-to-Value, which we introduced a couple of years ago. We continue to work on that, and I will expand on that in the next slide. When it comes to 3D strategy, it's about product differentiation. It's interesting, you cannot generalize. You have to look at each of the industry within the decarbonization and the diversification base and have a fit-for-purpose solution which creates value in those industrial segments. And of course, when we add stack the digitization layer on top of this product differentiation, that's when we get to true solutions. Now, it's interesting, you know, it's a well-known fact, but then it amazes me that whenever I say that 80% of the product cost is locked in by the design, and yet, if you look at our industry or any industry for that matter, most of the product cost initiatives goes after the production side, right? Our Design-to-Value, when we introduced, was all about attacking this huge cost lever. And what is Design-to-Value? A quick recap on it, right? To simply explain, Design-to-Value is exactly that. It's all about simplification. It's like peeling an onion, right? You take an existing product, we peel it down to its design features, and then we ask the question, which design features contribute to the overall value of the product? The design features which has a large contribution goes right on the top, and the ones which has no or very limited, we basically eliminate it. And an example of that, an outcome of that process you see in a triple offset butterfly valve, and before and after. When you look at the before part, and just focus on the top part, the bonnet and the mount, a lot is happening there in the before, right? You've got bent steel, you've got nuts and bolts and drilled holes and welded parts. A lot, right? And then you go to the after, you see a simple casted part. Simple, right? And just by doing that, generating the same value as of the product, we reduce our cost by 20% and total part content by 10%. Now, the Design-to-Value exercise, we have been doing that for a couple of years, and over this time period, we have validated the methodology that it actually works. And more important, we have developed the core competency within our organization to continue to execute on it. Moving forward, we're going to be very intentional. We're going to be selective on where we're going to go apply this DTV process to maximize our returns.... And I will expand on that a little bit further down in my presentation. When it comes to 3D strategy, obviously, I, I'll keep repeating it, but it's very, very important. It's about fit for purpose. Fit for purpose, right? I hope everyone got a chance early on in the morning or during the break to look at some of our products out there. One of them is what I call the FLEX Energy Recovery System. How to explain that? Let's go back from a customer viewpoint, right? So if you look at the—it is primarily geared for the desalination market. What is one of the biggest pain point for desalination operators? It's the utility bill, again. The hefty bill they have to pay every single month. Now, imagine we take some of that wasted energy, and through our FLEX system, introduce it back to the loop. Essentially, what you're doing is you're reducing the lower—loading their energy consumption, right? By that, you're re-reducing their utility bill. That's a differentiator. Now, let's talk about one of the other big markets, the decarbonization sector, which is the hydrogen market. We are in an exclusive partnership with Chart Industries, which is a major player in the hydrogen industry, to develop for them a cryogenic hydrogen refueling pump. And again, let's go back to the pain points. I'll keep repeating this. It's all about solving pain points, right? And the biggest pain point for them is that their current incumbent solution, which is a compressor, has real uptime issues. You don't want—When you go fill, fill the gas, you don't want the gas not to work, right? You want it to fuel when you want it to fuel. And the other big problem is the capacity is very constrained because gas-phase hydrogen has very poor storage properties, right? So by introducing a cryogenic pump, we are trying to address both of those issues for them. When it comes to digitization, and we've talked about this through the course of the morning, and we continue to discuss this moving forward, we have been very intentional on how we bring digitization into the market, right? We start by taking our physical products, and we instrument it. We put our sensors and telemetry on it. And what we are doing? We are basically making them smart. Now, that we can talk to our products, the next step is what we call as condition monitoring, which is reactive, but we can tell the customer when something is going wrong. Now, we have advanced to a point where we are doing predictive analytics, where we can forecast if a problem is going to happen, so that they can plan scheduled maintenance during their planned downtime, rather than being caught by surprise, right, which is always, always valuable for our customers, right? Now, right now, where we are, we're talking on equipment-by-equipment basis. Where we're going to move forward to is connecting all this equipment together at a flow loop level. And when you get to the flow loop, now you're creating direct value on the financial performance of our customers, which will drive a premium margin for us. That's where we are focused on. Speed to market. Now, I started my presentation, I made a comment that the resiliency of a corporation dramatically improves during economic cycles if you can execute with speed, but I did not substantiate on what I mean by that. So let's go back to our customers, right? So what happens when a downturn happens and the economic cycle is going the wrong direction, right? Our customers tighten the strings to their purse. That's the first thing which happens, right? And what they're trying to do is they're going to hold and delay their investment to see where the market is headed. But here's the deal: as soon as they decide to invest, they want quick monetization on that investment, right? And what speed. This is where speed plays an important role. We want to be there when the customers need us, and to me, that's resilience. Now, how do we do that, right? How I keep talking about speed, and so have the presidents and Scott, but what do we mean by that? It comes down to two things: the what and the how. The what is all about focus. What are we going to work on? We're not going to be generalists. We're going to be very focused on how we're going to deliver solutions to market, right? It's all about excellence around product management. And the how is once I have decided what to focus on, how quickly can I execute to it? And that's all about product development and how we accelerate that. A little bit more color on product management, which is very, very important. Again, I think everybody talks about product management, but not everybody understands what product management is all about, right? For us, product management is all about focus. Focus drives speed, speed drives differentiation, differentiation drives premium margin, right? And we are confident we're going to deliver 100-200 basis points of margin improvement through excellence in product management by 2027. Now, if you go back and say, "What do we do actually in product management?" It's all about decision making, right? And I'll cast your eye onto these four quadrants, which you see on the screen. Of course, we will love all our products to be on the top right, like high margin, high revenue. Absolutely. But we are grounded on the fact that we have some work to do before we get there, right? It all comes to how we treat each of these quadrants. So let's start with the bottom left, a real pain for any organization, including us, right? These are the products which, frankly, have not much revenue, but not really any margin. When I look at it, it really are two buckets, buckets to deal with, right? It's, it's really products which have hope, as I call it, where you can do some initiatives and move it in the right direction, and the products which are a complete drain, right? And here, the decision making is all about rationalization, right? Fix the hope, eliminate the drain, right. If you go to the top left, these are products where we do enjoy a good margin in the market, but we would love to grow our revenue base. And here, the decision making is take a step backward, right? Look at the technology which goes into these products and ask the question: where can I apply this technology in other market segments where I can create a difference, right? And you go after that, and that's how you grow in the adjacent market and grow your revenue base. The third, the bottom right. I don't have to elaborate. I talked about selective focus. That's why we're going to go after Design-to-Value. Volume, revenue, let's get the margins up by, by, by taking care of our product cost. And finally, the true north, where we want to be, right? That's the differentiation, sustain, grow box. And the call to action here is, let's not get complacent about it, right? Because we have a competition behind us. It's about maintaining the market leadership and continuing to differentiate our products and services. That's our focus. The end outcome is very simple. We have a margin distribution, and we want to move the margin distribution to the right, to the higher margins, and we want to make it slimmer as we take care of all our drain products. Now that we know what we're going to do, the next focus is how we're going to execute on it, right? So today, let me be very clear. Today, we have a stage-gate process for new product development, which is quite disciplined, and we're pretty good at it, and we have continuously improved it to get our lead times down. But we do know when we are trying to go for a quantum leap change on our lead time, we have to do something radical, right? And I term that as a lean product development. I don't want you guys to get confused with lean manufacturing, which is more commonly heard. The difference in lean product development versus lean manufacturing is our focus is on value creation. Second step is, waste elimination, while in lean manufacturing, is all about waste elimination. So there's a distinction between the two. The other thing I would say is that you heard of agile process, which is used in software. It's really reapplying the agile process in a hard tech industry like ours. And we do that with what I call as a learning cycle. It's a quick design, build, and test cycle. At the conclusion of every learning cycle, two outcomes are reached. Of course, our design evolves and progresses to the next level, but equally important, we actually create reusable knowledge, which we can apply to other projects, and then by that, reduce the overall lead time. And if you double-click on design, we have a very intentional effort on improving our computational platform. It's a lot easier for you to design in a virtual environment, and a lot cheaper, by the way. So that would be our first stop before we actually start cutting any metal, and we are very focused on doing that. And of course, the end outcome is, again, you can see the curve out there, is really to pull in the lead time, but also improve the throughput, which means for every R&D dollar we spend, we want to get more out of it. That's the real focus here. Finally, on our horizon, the smart and connected solutions. You know, this to me is what makes the biggest difference for our customer, right? We want to be there for our customers. And frankly, this is what will take us from being vendors to true trusted partners for our customers. Honestly, believe that. When we look at that, there are two lenses we look at. One is, of course, the total flow management. I talked about this. It's really about connecting all the products in a flow loop and delivering solution at that level, which directly impacts the OpEx and the CapEx for our customer. But there's another one, which is called—which I call scalability. And frankly, it's a very understated challenge. But one which companies in the emerging industries struggle with regularly. Oh, by the way, day in and day out, in Flowserve, we take things from lab scale to commercial scale. So our ability to offer that kind of a partnership with companies in the emerging industries is, frankly, very differentiating, but it's really hard to replicate as well. Now, I go back always, let's look it from the customer viewpoint, from the industry viewpoint. So what you see on this graph is really the white box, kind of denotes, isolates the industries who look at solution as a key differentiator for them, the two axes, right? They're also what I term as the early adopters, right? And this. By the way, the size of the bubble indicates the cumulative growth rate projected for each of these industries. And no surprise, most of the bubbles that show them in the white box are, are the emerging industries. It's, it's expected, right? Now, let me be very clear. The bubbles and the industries outside that white box are still very, very important for us, and we will continue to differentiate that through our product and service. But when it comes to talk about focus, when we talk about solution focus, we are going to go after these emerging industries where we know we can create a true differentiation. Now, when, when we talk about scalability within Flowserve, there are three things which it always boils down to. It's really about engineering, it's all about manufacturing, and it's all about how we commercialize, right? And how we combine and bring all of these three disciplines of swim lanes together to deliver products wherever our customers are, perform as it is supposed to, and then provide the support they need through the life cycle of the product, right? And that's something which, again, we do day in and day out within the organization. And when you look at the emerging industries, to bring something like that to them and help them be part of the commercial journey is a true game changer. It's a true game changer for them, right? And we are well down the path. We actually have some of the 3D bookings. You see the reflection of that fact that we have actually partnered to deliver this kind of solution for our customer. Now, when we think about the total flow management, I look at it simply as a stack of competencies we have to build together to deliver the total flow management solution. Now, let me start with our install base. You heard this term many, many times, right? It's all about our pumps, our valves, our seals, positioners, and actuators, things which we have been developing for decades. It's become second nature to us, right? Something which is core and will continue to own these products.... But then there's a layer we build on top of it, which is called the technology enablers. But this is really about the hardware, the sensors and the telemetry, the network connectivity, the data management, things which are not core to us, right? And there we plan to-- we are, and we will continue to partner with other providers, and they-- and we'll leverage their expertise as we scale. And finally, the value enablers. The value enablers is what interfaces with the customer. The output of a value enabler is what directly impacts the financial performance of our customers, right? And we talk about the building blocks. We got RedRaven, we got Energy Advantage already, which is part of the value enabler, but we have much work to be done to do other things which will create value for our customers, and we will continue to work on that. A little bit more about RedRaven Energy Advantage. I think RedRaven has been discussed enough. It's our IoT platform, and where we are today is we are delivering condition and predictive analytics insights to our customer. When it comes to Energy Advantage, it is a consultative services which we offer on existing flow loops for our customers. What we do, essentially, we go into a flow loop site, we look at the design, we have a domain experience, we have an analytics capability, and based on their operating conditions, we recommend changes they can do to their system architecture to drive the energy consumption down. That's the real focus, right? So that's about Raven, and I'll expand on this a bit on the next slide as well. Now, what gives us the right to win in a solution? Well, it comes back to the 230 years plus of domain expertise we have. That is the foundation, something which is very differentiating. And by the way, the entry barrier around that is pretty huge, as you can imagine, right? And when we combine that base with all these extra competencies we're building on top of it, is when we truly go from product and service to true solution providers for our customers. A little bit more on the value enablers. And, Scott talked a little bit about the RedRaven, right? We've got about more than 2,000 assets now deployed across 70 different sites in about 25 different countries. And we are already monetizing it. We are creating value for our customer by providing them the insights, and our bookings are growing, are doubling year-over-year on RedRaven. When it comes to Energy Advantage, we actually partnered with many, many of our critical customers, and we have, on average, delivered about 15% energy savings for these customers. And of course, much work to be done around getting to the other value enablers, but it is a true path to get high-margin, recurring revenue. That's our focus moving forward. And we've gone through the incubation period, we got the traction. We are at a tipping point where the adoption is going to be like a hockey stick effect at this point. We truly believe that. So where does it bring us, right? In 2027, again, we are committed to delivering 100-200 basis points of margin growth by 2027. And we're going. It's going to be all about excellence through product management. It's about making decisions with clarity. That's what it's all about. The new product vitality, which actually going to fuel our margin, we're going to increase it by 3x by 2027. And again, focus and intention and speed, everything will get us there. And finally, to facilitate that, we're going to have redirect 70% by 2027, 70% of our R&D spend will go towards 3D segment and breakthrough solutions. Now, you've heard my view, and you heard our company's view on how we create value to the customer. But remember what I said in the very beginning, innovation is in the eyes of the customer. So I'm going to leave the stage and let you hear from one of our customers on how Flowserve is creating value for them. Clariter is a chemical company which has industry-leading technology on upcycling plastic waste to value-added chemicals. We have been in the journey with Clariter for more than a year now, and progressively, our partnership has grown stronger as we create more and more value for them. Thank you for your attention. In a time when environmental responsibility is not just an option, but a necessity, two companies, Flowserve and Clariter, step forward to collaborate. Clariter brings to the table its specialized chemical upcycling technology, designed to turn plastic waste into reusable solvents, oils, and waxes. These products find practical applications, contributing to a more circular economy. Joining this initiative is Flowserve, a recognized leader in engineering solutions, specializing in pumps, valves, seals, and RedRaven products. Flowserve will provide essential equipment to build Clariter's commercial-scale plants. Each of these plants has the potential to convert up to 60,000 tons of plastic waste into 50,000 tons of valuable products. Together, the goal is to amplify this capacity, offering a substantial step towards tackling plastic waste. Why Flowserve? It's simple. Their commitment to a 3D strategy, diversification, decarbonization, and digitization, complements Clariter's goals. Flowserve's expertise enables Clariter to fine-tune energy consumption, reducing emissions, and drive cost-effectiveness, all critical elements for enhancing plant productivity. Clariter's technology offer a valuable solution to ridding the world of plastic waste by transforming it into sustainable petrochemical products. Collaboration is essential for scaling our efforts. Flowserve is a reliable partner, well-equipped to provide the comprehensive solutions we require to expand our operations efficiently. By combining Clariter's chemical upcycling process with Flowserve's engineering acumen, the partnership aims to reduce plastic waste and innovate for sustainability. Flowserve and Clariter, working hand in hand to make a meaningful impact on environmental sustainability. Hello, everyone. I'm Susan Hudson. I lead Flowserve's Legal, Compliance, and Risk Function. I've been with the company for seven years, and prior to my current role, I served as Flowserve's Chief Compliance Officer. I'm very excited to be here with you today to talk about climate, culture, and core responsibility. The framework that we use for ESG at Flowserve is the three Cs of climate, culture, and core responsibility. This is closely tied with our purpose and vision. We want to be creating flow control for a better world. And if we break each of these down, first, climate, we want to make sure that we are good stewards of our natural surroundings, that we're protecting the environment, and that we're limiting our impact on our climate. Culture at Flowserve is all about our people value. We want our associates to feel like Flowserve is a great place to work, but not only that, a very safe place to work. Finally, core responsibility. This is our governance strategy. Integrity is a core value at Flowserve. We want to make sure we're doing the right thing always, and so core responsibility is how we are a good company in the environment and how we do business around the world. Our ESG approach at Flowserve is fully aligned to our 3D strategy. We are in a really unique position to help our customers with their ESG internal goals, with investor expectations, and with the regulatory requirements that they're facing in the environment today. I'm going to share some specific examples in a little while about how we can uniquely help our customers. The alignment of our ESG approach with our 3D strategy allows us to take some of the best parts about Flowserve, our products and the solutions that we can offer, our purpose and our values, and how we operate as a business, and we can deliver ESG in a way that can really help our customers, and it allows for profitable growth. ESG at Flowserve, it's who we are. It's what we do. So like many companies, Flowserve has been on an ESG journey over time. I've got a few items I want to highlight here for you. At the beginning of our ESG journey, Flowserve felt it was very important to set a carbon emission reduction target. So we have put out a target for ourselves to reduce our carbon emissions by 40% by the year 2030, and we've been very pleased with the progress that we've made towards this goal so far. We also conducted a materiality assessment at Flowserve. We wanted to make sure that we were focused on the right ESG areas, so we engaged a third party to help us do some outreach to our stakeholders. We spoke with investors, we spoke with our board of directors, met with associates, and certainly talked to our customers so we could understand what were the right priorities for Flowserve in terms of ESG. As a result of that materiality assessment, we came up with our top priorities and ultimately eight key issue roadmaps for us, where we have strategic ESG initiatives embedded in those roadmaps. And finally, on our journey, I want to point out Flowserve Cares. This is our global community outreach program, where we go and we engage in the local communities where we live and work to try to make the world better. As a result of the journey, we've received some really positive external feedback, and you'll see the rating agencies' information on the side, and we are quite pleased to be in the first quartile in industrial manufacturing with Sustainalytics. In addition to that, we've received very positive external feedback. Forbes names, named us as one of the World's Top Female-Friendly Companies. We have also been named as one of Newsweek's America's Most Responsible Companies. Forbes also named us as one of America's Best Midsize Employers, and we were quite pleased to find out this week that we have been named as one of Newsweek's Greenest Companies. So let me go a little more specific about what we're doing in the climate space internally. I mentioned earlier that we set a carbon emission reduction target, and we are quite pleased that last year we achieved 80% of that carbon emission reduction target, and we're continuing our path forward. We've been able to accomplish that through several different kinds of projects. I've got a few examples here. Starting with our solar installation in the middle. What you'll see, this is our Marcianise, Italy, facility, where we do parts manufacturing. And with those solar panels, we're actually producing 260 megawatts annually of energy. In addition to our solar projects, there's a highlight at the bottom of some LED lighting located at our Suzhou, China, facility, which is a valve site. And when we install LED lights instead of i ncandescent bulbs, what we're seeing is up to 90% less energy usage. We have LED installations at over 80% of our sites, and we're looking forward to carrying that number even further. And finally, at the top, you'll see a closed-loop testing. This is at our Chesapeake, Virginia, which is an industrial pumps location. We use a lot of water in the testing of our products to make sure they're safe before they go out to our customers, and with a closed-loop test, we actually can reduce the amount of water because we're recycling it. A little bit more about culture internally at Flowserve. So it's all about our people. We conduct a regular employee engagement survey to make sure that our employees are feeling inspired in the work that they do at Flowserve, that they're optimistic about the future of Flowserve, and that they have the ability to do their best work. Our employee engagement survey results with the most recent survey showed that we're in the top quartile for all industries, and as an industrial manufacturing company, we are very pleased with that result. We've also found with our engagement survey, when there's areas of opportunity, we can focus on them and make a big impact. Our manager effectiveness score out of this survey had some opportunity. We developed some very specific leadership training for our leaders, and as a result, in the next survey, we saw an 11% increase in manager effectiveness. Our safety program at Flowserve is world-class. Safety is one of our top values, and we are so proud of this. Our total recordable rate is 0.026, and our lost time rate is 0.07. For any company, that is a phenomenal, phenomenal TRR and LTR, but as an industrial manufacturer, we could not be more pleased with that. In addition, on our engagement survey, safety was a top priority, and that was our number one scoring question. We recognize that this is a great result, but we also know that every employee must go home safe every day, so our work in safety is never done. Finally, Flowserve Cares. This is, again, our community impact program outreach in the communities. We focus on four areas here: community issues, STEM education, at-risk youth, and disaster recovery. Our associates go out into the communities where they work and live and do lots of different projects through this program. We do things like going to the beach, collecting plastic bottles for recycling, reforestation of areas near our sites that have been impacted by deforestation, and a significant amount of volunteering at schools. Turning to core responsibility. Board governance is very important at Flowserve. We want to make sure that all of our board members have that strong experience, the proper skills, and diverse backgrounds, and we also feel it's important to do regular board refreshment. We've done a 65% refreshment of our board of directors over the last five years, and we are very pleased to be welcoming Cheryl Johnson, who is the CHRO at Caterpillar. She will be joining our board in December. Our members have a great mix of manufacturing experience, energy, and technology experience, and we also have a cybersecurity oversight certified member. In addition to board governance, we also have very strong integrity and compliance. Integrity is a core value at Flowserve to do the right thing always, and at Flowserve, we have a global integrity program, but it really takes the local ownership of all of our associates to make sure it's effective. We know it's effective because in our employee engagement survey, the second highest score was that our associates understand the ethical expectations of Flowserve. We were quite pleased with this. We finished only behind safety. Finally, our enterprise risk management program at Flowserve is overseen by our executive leadership team and our board of directors. We conduct an annual assessment to understand what our enterprise risks are, and once we've identified those top risks, we do substantial mitigation planning. Now to turn to a few examples of how we're really helping our customers and how our ESG strategy is truly aligned with our 3Ds. So first example is our Energy Advantage program. This is an offering for our customers to help them with energy transition. We go to their existing facilities, and we conduct a technical assessment on their existing flow loops. Flowserve is in a unique position to be able to do this because we have that strong domain expertise. We have pumps, we have valves, we have seals, and when we go in and do these assessments, we can really help our customers meet their ESG goals. In this specific example, the German government was actually offering up funding to companies who were going to be doing energy-efficient projects. We had a customer who was interested in participating in this program. We had a very small installed base with this customer, so just two pumps located at this refinery, but they invited us in, and we were able to come in and analyze nine different flow loops that they had, and we found some significant opportunities. Not just in the efficiencies that we were going to help them with, with the pumps that we had, but we also found additional opportunities in electric actuation, so our valves being able to help them avoid fugitive emissions and in the sealing portfolio. So we wanted to make sure that they had multiple seals. They had single seals in parts of the flow loop and opportunity to add additional backup sealing so that they avoided leaks into the flow loop. So as a result of this, when all nine of the flow loops and the opportunities that we found have been addressed, we anticipate receiving a 15% energy savings over the current consumption, and that results in over 1,300 metric tons of CO2 reduction. The next example I want to share about is flare gas recovery. So in a refinery or a chemical plant, our customer's processes cause the buildup of gas. And And that gas, they have to do something with it, and ultimately what they're doing today is flaring it off into the environment when that pressure builds up. But the release in that flaring causes a CO2 and a methane release into the environment. It's something that they certainly want to reduce for their own internal ESG goals, investor expectations, but certainly there are regulations that are going to require them to need to address this. Flowserve has the perfect solution for them. Our flare gas recovery systems actually allow us to come in with our compressors, compress that gas that they would otherwise be flaring off into the environment into a very small amount, and then that compressed gas can be reused back into their existing processes for fuel or feedstock. This has a dual benefit. Certainly, they're meeting their regulatory requirements and ESG expectations, but they're also able to lower their costs because they can reuse this as a fuel source. And when these flare gas recovery systems are put in place, it actually can result in a 98% of these types of emissions out into the environment. So in our specific example here, we actually had five petrochemical facilities in the Gulf Coast of the U.S., where we installed these large skids of flare gas recovery system. And when all of those systems, if they are running at maximum capacity, we can actually deliver over 500,000 metric tons of CO2 reduction. And the final customer example I'd like to share with you is actually on our LifeCycle Advantage program. So a LifeCycle Advantage program is focused on our seal portfolio. Our customers have a need to make sure that their mean time between repairs is maximized as possible. They want their facilities up and running, so they need that MTBR to be as lengthy as possible. That helps them ensure that they are not having harmful leaks out into the environment, and it also helps them optimize and efficiently run their facilities. Flowserve has a LifeCycle Advantage program, and this is a very connected and dedicated partnership with our customers. We are focused on that MTBR metric for them. We are located on site with our inventory on site. We help them identify problem areas and get those replaced as quickly as possible. Flowserve has 375 LifeCycle Advantage agreements in the world around the globe, and those LifeCycle Advantage agreements actually represent annualized recurring revenue to Flowserve. When we put an LCA in place, the initial generation of that contract, what we are finding is up to a 50% improvement in a customer's MTBR. But when we have that very lengthy relationship and dedicated partnership, we can see really outsized returns here. So one of our longest-tenured customers on a LifeCycle Advantage agreement is the Marathon, is Marathon, and with them, they are running over 400% improvement from when they first started a LifeCycle Advantage agreement with Flowserve. They have, right now, over 100 months MTBR, which is a great number, and because of this, they actually have named Flowserve as their 2023 Supplier of the Year. The alignment of our ESG approach with our 3D strategy allows us to make an impact for our customers. Our products and our solutions deliver ESG results with profitable growth. Our strong purpose and values drive our progress in climate, culture, and core responsibility. Thank you. I'd now like to welcome Amy Schwetz to the stage. Good morning. I'm Amy Schwetz, Flowserve's CFO. After three and a half years with the company, it's great to be here in person with the rest of the team. Today, I'm going to be focused on sharing our progress and outlining the financial results expected from the strategy that Scott has shared, and the specific actions that you've heard from Kirk, Lamar, and Karthik about how we make the most of the opportunities that we have in front of us. As we entered 2023, this team recognized that it had the opportunity to be an inflection point for Flowserve, and it has been. Our strategy is taking hold, and it's driving top-line growth. With that, we're seeing margins expand even quicker than we anticipated. With this momentum, we are now confident to share our longer-range targets that will drive shareholder value, and we intend to amplify that with an enduring capital allocation approach to drive returns. With supportive end markets, a well-defined strategy, and accelerating operational performance, now is the time to capitalize on this momentum. Our improving execution, including revenue conversion, has resulted in us raising full year guidance twice this year, both after our first and second quarters. Although our third quarter is expected and will be impacted by some revaluation of actuarially determined liabilities, our quarter to date operational performance has continued to be strong. So we're pleased today to reaffirm our full year guidance, revenue up 16%-18% versus 2022, and our adjusted EPS guidance range of $1.85-$2 per share, some 75% higher at the midpoint than 2022. Given the continued progress that we've made towards operational surety, we expect now to deliver full year guidance closer to the high end of that range. Something I'm really pleased about is, in addition to improving results, we're really breaking from the Flowserve tradition of back-weighted earnings. Through the first two quarters of the year, we've delivered almost half of Flowserve's expected revenue and our adjusted EPS. As we've navigated macro challenges, our efforts to contain SG&A have been highly effective. We quickly recognized the need for action in 2020 as the pandemic hit, and pulled out the Flowserve 2.0 playbook. We focused on reducing costs via improving processes, and we've maintained that performance as revenues have grown. We'll exit the fourth quarter of 2023 at 20% of SG&A as a percentage of sales, providing a significant opportunity to leverage as revenues grow. One of the key takeaways from today should be our confidence in our ability to organically grow revenue. Our longer-range projections are based on the exposure we have to markets anticipated to grow at very attractive rates. But our nearer-term projections are based in more concrete and tangible leading indicators that have been highly effective in predicting revenue growth, namely our bookings and our backlog. As we look at the graph displaying bookings, backlog, and revenues, it's clear booking and backlog troughed in 2020 during the pandemic. It took several quarters into 2022 to see that same impact on revenue. Conversely, the last six quarters have generated extremely strong bookings, which in turn, has generated an extremely strong backlog, which is at near record levels. I'm gonna put it simply: revenues are gonna continue to grow. As we looked at our ability to respond to external and internal challenges that began with the pandemic and accelerated into 2022, we announced an organizational review late last year. The primary objectives of this review were to increase speed and increase accountability throughout Flowserve, but it soon became clear that there was also an opportunity to reduce costs as we optimized our performance. I'm pleased to share today, that through actions taken through the third quarter of this year, we have secured over $50 million of run rate savings, the goal that we announced as we started the process. Even more importantly, today, you've heard Lamar and Kirk share how this new organizational design actually enhances their ability to execute their strategy and improve performance. In fact, the organizational design emphasizes the importance of two things that we believe will be huge levers for us moving forward, namely operational excellence and product management. In the business tale as old as time, we recognize that revenue movements have been directionally correlated with margin performance. We saw our best recent margin performance in 2019, that was followed with improving revenue performance. At this point in 2023, we've actually eclipsed where we were in 2019 from a revenue perspective. But with our line of sight to revenue growth, pursuit of operational excellence, product management, and cost leverage, we are well-positioned to meet and exceed that margin performance that we saw in 2019 in future years. As we look to grow earnings, we have been focused on all areas of the income statement at Flowserve. To that end, we have methodically reduced our gross debt balances since 2016, some 19%, and we have an amortizing term loan to embed further progress in the upcoming years. Additionally, thoughtful tax planning has lowered our effective tax rate some 1000 basis points to approximately 20% since 2017, and this represents a rate that we believe that we can maintain into our future projections. Because we have become more tax efficient, as operating profit grows, we'll see more flow into EPS. In the second half of 2020, we proactively addressed upcoming debt maturities before they became current, and I'm happy to say that our timing was right. Our fixed rate debt carries very attractive rates in the current rate environment, and we have no near-term maturities. We have ample liquidity, and importantly, we have maintained our investment-grade rating during this period of time, which we believe gives us an advantage in the flow control space. So we're pleased with our capital structure today, but importantly, we believe our credit metrics will continue to improve and strengthen as our earnings and cash flow grows. In addition to growing earnings, we have a substantial opportunity to improve our working capital efficiency to augment cash flow. Supply chain challenges that began in 2020, or in late 2021, that resulted in significant investments in inventory in order to meet the growing demand for our products, have required a significant investment that we now need to work through. Additionally, growing revenues have increased our accounts receivable balance. On that end, I'm happy to say that investments that we've made in enhancing our collection capability has truly paid dividends, and our collection performance year to date in 2023 has been strong. Our current efforts to strengthen our supply chain capabilities and planning activities across the organization will not only assist us in growing margins, but also will serve to improve working capital efficiency as a percentage of sales. As an organization, we are committed to reducing our usage from the second quarter level at 31.9% to 25%-27% by 2027. The high end of this range represents a level that we've operated at in the past, and we believe that we can reach and then improve upon. We anticipate increasing cash well in excess or cash available by well in excess of $1 billion by 2027. Growing earnings are certainly gonna play the largest part of that, but working capital improvement will play a meaningful role. And working capital of improvement, rest assured, is a discussion in all operational reviews that are taking place within Flowserve, and we are all committed to its success, and it is embedded in our incentive programs. With growing cash balances, we have a meaningful opportunity to deploy cash to create shareholder value. We believe our capital allocation philosophy is enduring. We fulfill our commitments, and we continuously evaluate investments in the business versus returns to shareholders. Our commitments are clear. We maintain our dividend. We service our debt. We return to the practice that we suspended during the pandemic of offsetting dilution from equity compensation with share repurchases. As we weigh our opportunity to allocate capital for other purposes, we're guided by certain principles. We intend to deploy our excess cash over time, but we are agnostic as to how value is created. We allocate to generate the most substantial long-term return, and we've designed our approach to maintain our investment grade rating. We believe we have ample opportunities to invest in this business, and you've heard about some of them today. We want to support our margin expansion. We want to develop new products to address attractive markets. We want to accelerate our journey to solutions and their complementary acquisitions along the way. We weigh these opportunities every day with share repurchases in larger scale and increasing our dividend to provide tangible returns to our shareholders. Although our long-range targets that we're sharing today are organic, we do expect M&A to play a role in positioning our portfolio and expanding our exposure to attractive markets. As we look to inorganic growth, our criteria is simple but effective. Acquisitions have to be aligned to our approach to diversify, decarbonize, and digitize. They must give us the opportunity to leverage the scale of the Flowserve organization, and we must be confident in our ability to integrate. These qualitative assessments, of course, are obviously coupled with stringent financial justification. Returns must be well in excess of our average cost of capital and must be cash accre... We must be cash accretive within the first full year post-acquisition. The Velan transaction is an excellent example of this. Kirk has described this earlier today. This is an acquisition that is complementary to our current portfolio with limited overlap. It increases our access to markets that we find attractive, namely nuclear, cryogenic, and severe services. There are significant synergies to be gained over the course of the acquisition, and there's attractive returns to be generated. So let's talk in some more detail about how our actions translate into financial results. We will, of course, give formal guidance with our year-end earnings, but we're confident enough today to share where we think 2024 is going. We expect revenue to grow at a pace of mid-single digits. I'll just remind you that this is following a year of growth guidance in the mid to upper teens. This is supported by our more than $2.8 billion backlog, our robust opportunity funnel, and aftermarket traction that we've gained. We intend to grow margins to low double digits. Based on the margins that we're seeing in our current backlog, operational excellence and leverage to higher revenue are all going to play a role in that improvement. With this performance, we're projecting adjusted EPS to increase by 20%-25% year-over-year. It's obvious that this performance would bring us substantially closer to achieving our long-term goals. As we transition to our longer-term targets, Scott has described how our core markets, combined with our fastest growing 3D markets, will result in revenues growing at a 5% compound annual growth rate. A portion of that backlog, or a portion of that revenue growth has been captured already in our backlog. Execution focus can actually accelerate the conversion of that backlog into revenue and ultimately earnings. Volume does play a role in the higher EPS. It will be supplemented by operating more effectively and improving product management. All told, we expect adjusted EPS to more than double from our levels that we're seeing in 2023, by 2027, or to be more dramatic, quadruple from levels that we saw in 2022. Again, I need to emphasize that the progress starts in 2024. We believe that these long-range targets deliver substantial value for our shareholders. We also believe we have clear and executable plans in place to deliver them. Our organic revenue target of $5 billion or higher is supported by the markets that we serve, including those showcased today that are expected to grow at very attractive rates, namely hydrogen, LNG, nuclear, CCUS, specialty vacuum, and recyclable plastics. We say this even as our core markets are holding up quite well in today's economic environment. We're gonna further support this revenue growth with our aftermarket strategies. To improve our operating margins, we're focused on three things: We need to leverage our volume, we need to operate more effectively and continue our progress towards operational excellence. Our organizational model has made accountability clear and has given our teams the tools they need to do this. We need to effectively manage our product portfolio. We need to understand what our customers want. We need to fix or rationalize the products that aren't working for us, and we need to grow those margins, or we need to grow those products where the margins are strong. As we do this, we continually raise the bar to enter that upper right quadrant that Karthik showed us. We'll mind the details. We manage our capital structure and effective tax rate to ensure earnings per share is maximized. $4 or more per share is well within our reach. We believe these markets and these plans actually give us the opportunity to go beyond the targets that we've outlined today. And I'll happily... we'll happily be back in front of you when it becomes clear, through meeting these targets or making such substantial progress, that the goal needs to be moved. I want to wrap up by saying that the pieces are in place. Flowserve's culture is a strength. It's foundational to our success. The strategy of diversification, decarbonization, and digitization is taking hold. You should see today that this team is committed, has conviction and confidence around the targets that we've outlined. We have the roadmap, and now we intend to execute on it. With that, I'd like to bring the rest of the team of Flowserve presenters up to the stage, and we'd like to hold Q&A. Yeah, chair. The chair positioning here yesterday. We got one. Thanks, one. Yeah, that'll be good. Take apart, and I'll take it. All right, here we go. All right, we can now open it up to questions. I just ask that you state your name and what organization you're with before you start the Q&A. But I see Andy, you've got your hand up first here in the front row. Let's go front row first. Thank you. Andy Kaplowitz, Citigroup. So maybe this is for Scott or Amy. Like, just thinking about where you are now versus where you're going, you know, if I look at the 10% margins approximately that you are now, like, what inefficiencies are sort of left in that margin base? You know, so that you're starting with, you know, headwind that turns into tailwind. And then when you think about sort of the 100-200 basis points of operational excellence, like, how does it perform at various different types of growth? Like, can you do that if for some reason you're not growing as fast because of cyclical factors or what have you? Well, I think the two clear ones are the ones that we laid out, right? The operational excellence that gives us 100-200 basis points. And so even without growth, I'm confident that that comes through the system, and that's just the manufacturing excellence program. We can get into that in more details. And then, as Karthik said, right on the product management side, again, another 100-200 basis points. We can deliver that even with flat revenues. And that's all about. If you go back to the four quadrants in the scatter part, the scatter plot, that was a representative sample of Flowserve. But in actuality, we have products in every single quadrant, right? And so by being disciplined and by doing the right things there, we're confident we start to migrate that 100-200 basis points. Leverage is a part of the overall goal on the 200-year to 2027 with the margin improvement. But again, I think there's so many opportunities to keep moving this up, that leverage would be kind of the secondary aspect of this. Yeah, and I think, you know, one of the things that that's exciting about the cost out program that we have is really that over $50 million of savings that we've locked in on a run rate basis. That's divided more weighted today towards cost of sales, actually, than SG&A. So I think as we've thought about how the organization can perform better, we're actually doing so in a way that's very cost efficient. And so it really serves us well in all parts, you know, in any economic environment. And the last comment that I would make, and just to amplify Scott's comments on product management, what's exciting about that opportunity, gaining traction and getting the right capabilities within the company, is that's an ongoing, never-ending pursuit. And so, you know, you're continually trying to raise that bar of what that upper right-hand quadrant looks like. And so we're outlining, you know, 100-200 basis point improvement today. There's more there over time for us as we continue that pursuit. Yeah, and then I'll just, I'll just add one more, right? Margins and backlog, right. So we have clear visibility to margins and backlog today that are higher than what we had a year ago or even a quarter ago. Then as we look forward, both in Lamar's business and Kirk's business, we know what we're quoting at, and it's substantially—it's moving in the right direction every quarter. And so that gives us, again, more confident, as Amy showed the 2024 numbers, right? We're very confident now with the margins and backlog, the visibility and the outlook, that we get this at least 100 basis point improvement. Scott, maybe just a quick follow-up to that last comment about margins and backlog. Like, just focusing on the near term a little bit, like, what has given you confidence to sort of go to the high end of the range, you know, for this year? Is it the margin and the backlog? What about the end markets? Are there particular end markets that are better? How would you look at price versus cost? Yeah, I think for when we talk about 2023 and we trend up more toward the $2 of EPS versus the $1.85, it's really about execution. I just, I give Lamar and Kirk a lot of credit on, you know, really driving the executional model and making sure that we can deliver. The margins are in there, right? So now it's more about just getting it through the system, eliminating the frictional costs, doing it productively. You know, we continued to build on the month-over-month, you know, we started Q4 okay, last year. Q1 was better, Q2 was better. We just keep getting better. So that's really about operational momentum and what's trending us to the high end. Damian Karas, UBS. First question is on the sales target. Could you just clarify? So the 3%, kind of more or less market outlook that you have for oil and gas, power, et cetera, then the bridge to the 5%, is that effectively just the energy transition opportunity, those double-digit opportunities you talked about in hydrogen and CCS, et cetera? And then second to that, just within energy transition, thinking about those double-digit growth opportunities, how are you seeing the competitive landscape line up there? And, and what's portion, what share of that market opportunity are you assuming Flowserve can achieve? Sure. So I'll be really clear. The 3.3% is our internal market model, right? It's based off publicly available sources. CapEx, OpEx, forward-looking. We take that, we create our TAM, our total available market, and then we look at our CAGRs. The reason we wanted to show it today is, it's more relevant on a year-over-year basis than anything else. So we've grown. Like, last year, it was, the market model showed, like, 2.4%, and we've grown revenue 17%, right? So it just, it's an indicator of where we're growing. So 3.3% to me is substantial, and, you know, not sure exactly how much we grow the revenue off that base, but it's going to be higher than 3.3%. And then you add in the 3D strategy opportunities, right? And so that was intended to be all of our 3D. And so you think about the diversify lane, right? Specialty chemicals, vacuum products, seals, and things like that. Then you go decarbonization, where you get the really excited stuff that's now we're showing a 14% CAGR within the decarbonization lane. The two combined gives us the confidence of 5% growth going forward. In terms of competition- Yeah. I just want to point out a couple of things that got shared during the presentation today. So the growth that we're seeing in LNG and hydrogen, for example, we do believe there are pretty significant barriers to entry in that space. So our existing product portfolio, the investments that we've made over the last couple of years to sort of round that out, those do serve us really well to compete strongly in those markets. And Lamar described the same thing with respect to really the specialty vacuum market. These are, these are areas of the business that Flowserve is really well-positioned, with our knowledge and expertise to serve and win our share or more. That's helpful. Thank you. And then I want to ask you about RedRaven. You guys talked about gaining a lot of progress there. I think you mentioned on 70,000 sites, 2,000 instruments, but you have a 5 million installed base, right? So what's kind of achievable there? What kind of penetration rate do you actually think you could get to? Yeah. So, Karthik, maybe, I mean, you're- Yeah ... you're closest to this, and maybe provide us- Just, just a correction, 70 sites, not 70,000 sites. Yeah. Yeah, sorry. 70 sites, 2,000- Just to clarify the numbers. Yeah. That's not one of our targets today, Damian, but I like it. Yeah, I think, you know, in terms of RedRaven technology, like, we always look at it as a startup within our company because that's a new offering we showed. So, we are through the incubation and traction period where because we are starting to see repeat customers come through, which is a true sign that they're valuing what we are presenting. And to me, this is the point where I truly call it a tipping point, but across all industries, and I think we've also consciously pivoted ourselves because these emerging industries, the water markets, more than our traditional markets, are much, much faster adoption. And I think we are very focused on how we grow in that area. To me, we are at the point where we are starting to accomplish year-over-year double-digit growth, 2x growth year- over- year. I don't see that slowing down at all. As we build a solution roadmap on top of it, we're going to just amplify that moving forward. Then just a couple other data points that I'll add on, and we shared this in the second quarter earnings call. Now, what we're seeing with the RedRaven sites, those 70 sites, they started with four or five pumps and maybe one or two valves. Now we're getting repeat orders, proving the concept and the technology. And so now we're seeing a significant amount of the early adopters just coming back and adding additional RedRaven connectivity. And so we, we, like, like Karthik said, we feel really good that this thing should take off. I, I've said publicly, it's been slower than I wanted it to go. I've asked to personally go and sell at the highest levels to get some of these in place. But now that we're building up this kind of case studies and we've got the documentation, we can show the results, we're starting to see bigger awards. And so we've got a couple that we can talk about that, you know, Anglian Water, we talked about in the second quarter. That's going to be hundreds of assets that will get connected. And so we're also seeing this, you know, we'll try four or five pumps and a couple of valves, to now we're saying we're going to do 100 pumps and 20 or 30 control valves as well. So again, we, we feel good that we're on the right path. We've got all the expertise, the technical solutions there, and the more data that we get, the better the offering is. And so that's probably the beauty of this, is it's kind of self-learning. The more data we see, the more examples of failures and prediction we get, our database improves, our ability to solve problems improves, and we become a much better solutions provider. Hi, thanks, everybody, for all the information. Joe Ritchie from Goldman Sachs. So it's interesting, the long-term targets of 14%-16% margins at greater than $5 billion in revenues. If you go back to your history about 10 years ago in 2014, you did roughly less than $5 billion in revenues. Margins were 16%. So given all the structural cost outs that we've talked about today, it seems like your business is in a much better shape today than it was back then. Why wouldn't we see margins flow through even higher than the 14%-16% range you've now outlined? We'll let Amy go with that one. Yeah, I'm going to start by saying I do want to recognize that some of the work that we've done below that line from an effective tax rate, because our tax rate looked a lot different, so we are seeing more flow through. We are in a very different currency environment than we were at that point in time as well. I think there's no doubt that some of our core markets that we were serving at that point in time have changed. And as we thought about as a team, what this margin target looked like, there was a lot of discussion about what we wanted it to be or where we wanted to go, what were the action plans that we had in place? I will say today that I would gladly grow this business at a 5% CAGR and a 14%-16% margin target, versus locking in a lower revenue rate than what we're expected to see at a higher margin target. I think that we need to, we need to really be focused on growth. We need to be focused on hitting that $5 billion and eclipsing that. If we can do that at the margins that we've outlined, then I think it's a success for our shareholders. Maybe just following on that, I guess, is there anything structurally different now versus back in that 2014 time frame? Maybe that question for Scott. Sure. Where you are feeling, you know, maybe increased pressure that we didn't see back then. Just any thoughts around that would be helpful. Yeah, I think, like if you go back to 2014, and I wasn't here then, but there was truly a super cycle that was happening in our power, oil and gas, and the other industries that we serve. And so you had some pricing, you had less competition. And I'd say post that, the new oil and gas, not refinery, but more of the upstream, that business has changed fundamentally, and you're not getting the margins that we had before back in 2014. With that said, as you know, we launched the 3D strategy, right? We're diversifying the portfolio away from that on the front end. We've hit all the highlights on the decarbonization side, and so we feel really good about the targets we laid out. I'll just say, like, for me personally, like, I did this five years ago with some targets out there. We made great progress up until the COVID year and then started to spiral down, and so we want to put something out there that we are 100% confident that we can deliver. You saw the energy and the enthusiasm from Kirk and Lamar in terms of how they can do that at the division level, and this is something we feel like we can deliver. And Amy said in her presentation, like, the best thing that could happen for us is to come back in late 2025, early 2026, and talk about a higher target and raising the goalpost. Yeah, that makes a lot of sense. If I could just ask one more. Lamar, could we maybe just double-click on that, pumps parts opportunity? So how big is that business today for you? And then, ultimately, and you talked about a 12% CAGR. Just talk to us about the confidence in that growth rate going forward. Yep, it's an exciting business for us. It is impactful to the business, the overall company overall. There's two things that really drive this for us. One is being fast and being First Call. So that's where all of our actions have really been driven. We started this two years ago. We saw mid-teens growth last year. We're seeing mid-teens growth again this year. The really positive part about it is we're seeing margin expansion at the same time as we're seeing this growth rate. We have a lot of confidence in the growth number. We're doing a lot of things like, if we look at pricing agreements that we have in place, we expect we're going to grow the pricing agreements, the revenue through that those pricing agreements to be First Call by 50% over the next year to two years. We're also looking at how we quote faster than we quote today even. If you look two years ago, we quoted on average five days. Today, we quote over half of our quotes in less than a day, and we quote 90% in less than two days. So we're moving really fast right now. When we think about our inventory program, that really positions us well and locks us in to the parts path for our customers. We started that in the United States. We've had fantastic progress there. We're now moving that internationally to the rest of the world. So we see it locking ourselves in and positioning us as First Call all the time with a lot of customers, and then getting faster and faster. It helps us grow our capture rate. There's still a lot of bandwidth to grow our capture rate on parts. So the largest piece of growth that we see in the pumps business is from these initiatives with respect to pumps parts. And obviously, as we think about margins over time, mix can play a critical role in this. One other thing that I just want to give some credit for is as we think about digitization in terms of customer experience, the digitization efforts that we made around quoting tools in pump parts have really led to the speed up of that quoting process. And so it's been a focus, and it's been investment, and it's paying dividends. We didn't deliberately size the pump parts number there just 'cause we don't want to be talking about it every quarter. But if you look at the aftermarket size for Lamar, pump parts is roughly half of that. It's a big number for us. We don't want a new segmentation out there. Hey, back here, Joe Giordano from TD Cowen. Yeah, just building on what Joe mentioned before with the long-term target. So, you know, $4, you're almost there 10 years ago. I think one thing that's kept long-term shareholders from being involved is just, it just feels like this perpetual boom-bust type company, right? So how do we ensure that 10 years, we get to $4, and we go to $2, and then we have another target of $4 a decade from now? How do you in... like, what do you need to do strategically, whether it's more consistent M&A, to kind of make these peaks become like the next level, the, you know, the next level floors and, and kind of keep going up? No, thank you, Joe. It's a really good question, and it's important, and it's the reason we launched the 3D strategy of diversify and decarbonize. And so I showed something early, and I'm going to give a couple data points, but I showed something early in the presentation that showed our revenues are generated by roughly 85% would be from existing infrastructure. And we don't have that compare versus 10 years ago, but I am confident it's substantially higher than what it was. And so a couple things in terms of how do we drive consistency and resiliency in our business, focusing on existing installed base and existing assets rather than chasing new projects is certainly one of those, because the projects in the oil and gas and some of the industries are very episodic and incredibly lumpy. And so I'd say that's number one. Then you heard recurring revenue several times in our presentations. You heard MRO focus, aftermarket focus, and so that's another big component of how we drive more stability. Then finally, the diversify lane is intended to move more into attractive long-term markets rather than the markets that have large cycles. So as we expand in specialty chemicals, as we expand in vacuum technology, we believe we have a more stable platform as we go forward. Fair enough. Can you just clarify for you, for 2024, what kind of bookings are you kind of thinking about when you, when you give those numbers? And then just last thing, we talk about MRO, we talk about aftermarket. I feel like not just at Flowserve, but generally speaking, in downturns, people seem to get, like, kind of burned, waiting for, like, this, "Hey, this will definitely happen." Everyone does it, and then people don't fix things or let things go. Can you just talk about how we should think about the resilience of those types of MRO aftermarket in, like, true downturns? Sure. I'll let the presidents talk about MRO and aftermarket and how they think about, you know, the activity levels as we go forward. The first part of the question again, Joe, say that again. What was it? The bookings. Oh, bookings next year. Yeah. You know, we don't give bookings guidance, but I think you saw in this presentation, we, we clearly expect bookings growth next year, right? And so you've got the 3.3% + the 10%. You know, we've modeled out, you know, the revenue conversion there and an improved conversion level. But I would just say, you know, we think book-to-bill is greater than one, for sure. Like, we, we don't see that going, you know, a different direction at this point in time. There's lots of discussion out there about, you know, inflation rates and recession and what's going to happen, but just back to my whole kind of market outlook, right? We see bookings going in the right direction. So I'd say the best you know, the best data point would just be, we're confident we're over 1.10 on bookings to revenue next year. Yeah, you know, the reason I talk about MRO and what I love so much about the MRO is, yes, there is some ability, as you have market downturns or our customers cut off their maintenance activities or decrease them for a period of time. But those are, those are usually happening within short segments of time, if that does happen. And on the broader aspect, MRO is something that you earn every day and you're working in every day. So when we talk about MRO growth, you'll notice we keep talking about capability and building capabilities and proximity and speed, and that's so that we're there and with our customers, and we're able to position ourselves to be part of their day in, day out maintenance activities and then take on more of their spend from it. So in a way, that helps us with, significantly with being countercyclical, just because that's business we can grow and earn organically by our proximity and the capabilities that we have. I'd say the same. When we think about our aftermarket business and the opportunities that are out there in the steady, steady flow of that revenue stream, we think about the downstream part of the business with oil and gas. CapEx expenditures there are challenged today with the current environment. They've got to run those assets longer and longer and longer as they work through them. That just means more opportunity for us going forward, and we believe we do have a strength in our local Quick Response Centers. As Kirk said, being close to the customer. I was in our Beaumont facility just recently, and it's not our biggest facility in the world, it's not our most capable facility in the world, but the customer was there while we were disassembling a pump and going through the root cause analysis with our own employees, and he told me directly, he goes: "You guys have bigger, more capable Quick Response Centers around the world, but I love this one because I can be here collaborating with you guys about how we solve problems and how we prevent problems in the future." So we think that's an advantage of ours. I'm going to emphasize one thing about 2023 performance that has me excited about the future. One, we've converted revenue much more effectively and much more ratably than we've historically seen with Flowserve. We've done that while maintaining a positive book-to-bill ratio, and that those bookings that we've recognized over the course of 2023 have really been focused on this more quick turn business than really large scale projects. I feel like as we talk about the strategies that we've outlined today that we're excited about, we've got some real data points that they're effective and that they're working and gaining traction. Yeah, and then I'll just add one last thing on resiliency of the you know, through cycle aftermarket versus OE, and I'm looking at Mike and Jay to make sure my numbers are right. But aftermarket bookings in 2020, the last significant downturn, less than 10%, and if you think about oil and gas, kind of OE bookings, it was more than 30% reduction. Hi, Sabrina Abrams, Bank of America. I think you guys have been very clear about this year, the 30% gross margin target, and you're on track to do that or better. What is the gross margin assumption embedded in your 2027 targets, and what do your targets assume about the pricing environment over the next few years? So I'll start with saying we haven't outlined specific gross margin targets. I think you can assume that we're expecting significant expansion from kind of where we're at today. But I'll be brutally honest and say I sort of don't care, so long as I'm delivering the 14%-16% operating margin and hitting there and hitting that number, and then having an opportunity to grow from there. But I think you should assume that a substantial amount of that improvement that we're seeing is at the gross margin level. But then we're also leveraging our SG&A costs very effectively over that period of time. Yeah, and the two initiatives we laid out, operational excellence and product management, both show up in the gross margin line. Yeah. Just to follow up on the 27% manufacturing consolidation, is there more consolidation coming in the next few years, and is that included in the margin target, and how should we think about that? Yeah, I think, you know, the answer is yes. Maybe Lamar, you, you kind of hinted at it in your presentation, but you could talk about what else is there on roofline optimization. Yeah, when we look at roofline opportunities in the original equipment pumps business, Engineered Pumps, there's definitely opportunity there. It's an overcapacity business in the entire industry, so we've got roofline consolidation opportunities there. When we think about the Industrial Pumps business, this is where the new operating model with a product management focus really helps us out. We've got high volume pumps that are made at seven, eight facilities around the world. The reality is they should be made at two facilities around the world, two low-cost facilities. When we look at the future opportunities, we see big opportunities with what we're doing around the new operating model, operational excellence around order routing, that really help us think about roofline in a different way than we have historically with the global product orientation that we've put on the business with the new operating model. Yeah. And then I'd just add, you know, it's not just Engineered Pumps or pumps. We've got opportunities in valves as well. You know, really, what you aspire as a manufacturer is to have substantial scale in all of your sites, and we are not where we need to be. And so we'll be very deliberate about these because these type of moves can have, you know, potentially be disruptive. The new operational playbook will help us make sure that we do these successfully, but every year you can expect to see more work on roofline on the manufacturing side. The more work that we do around that and do successfully, the better position we're going to be in to make the most of these mix shifts that we're talking about in both Kirk and Lamar's businesses. Yeah, thanks for all the detail. Brett Linzey, Mizuho. So just want to come back to the product management rationalization. How should we think about the timetable there? Is there low-hanging fruit you can get out, you know, relatively quickly? And then could you size the revenue that's in that improve or exit quadrant, and what that looks like? I will not size the revenue in the exit one. It's just too much detail to get into. But I'd say, you know, there are things in exit. Like, if you take an example, I mean, just take any of the products, right? Take, you know, take a control valve product portfolio, the Mark Seven lineup. If you were to do a scatter plot of that product family alone, we've got—I mean, it's a little bit embarrassing, but there are products in there that have really, really low margins. And so that's gonna be the quick win that you'll start to see in 2024 and beyond, as we create the visibility of what's in that bottom category, and we just stop doing it, or we deliberately exit the business. So you'll see some deliberate exits from us as we turn the corner into 2024. You'll see some quick wins on what I'll just call good hygiene and things that we should have been doing before. But then the rest of the work, like, when we start to talk about Design-to-Value and, you know, getting more revenue out of our, our premium products, that's what's gonna show up later in the 2025, 2026, 2027. Got it. Yeah, and just wanted to transition to the energy, the 3D funnel. You're going from $10 billion to $18 billion, I think was the total addressable market. Yeah. How do you think it... You know, Flowserve's funnel transitions over that timeline too? And then any update in terms of, you know, trailing 6 or 12 months, you know, what the, what the funnel has grown? Yeah, this is something that we're super excited about, and we've grown, you know, the last two years, more than the 14% that we're showing in the funnel there. And so, you know, we put some numbers out there last quarter, new energy, and we describe new energy, not nuclear, not LNG, but kind of all the, the new stuff out there at $50 million last quarter in bookings. So that's roughly $200 million for us, and that was nonexistent three years ago. It wasn't there. We're, we're growing the new energy side, particularly fast. And so we're, we're excited about this growth. We've positioned incredibly well with the products that we have. We've got good customer relationships. We're established in some of the early wins already, and so we expect to get recurring awards as, you know, the companies that are early in green hydrogen start to replicate that process and system around the world. So this is one, again, we're- we are incredibly excited about it. You know, I think that, you know, we showed that the TAM was a 14% growth. We say we can triple new energy, at least from a market perspective. You know, it's our goal to do more than that. Hi, Nathan Jones, Stifel. I just wanted to follow up on a couple of the comments about the oil and gas margin and the pricing that you talked about there, Scott, and Lucas talked about overcapacity in the industry, and this has been a problem, I think, in the industry and for the company for a long time. And you talked about you're not gonna get pricing back to where you saw it in 2014. In 2014, we were talking about not getting pricing that we had in 2008. So I guess the first question is: how do you get comfortable that you're not going to see further degradation in pricing in that business as we go forward? Sure. And I'll let... Probably Lamar sees the most of this, but Kirk can jump in as well. You know, what we're seeing today is substantial improvement in pricing over the last two years. And I'm talking like oil and gas, so refining new work that's in the transmission or in the, like, the pipeline and midstream, and then some of the upstream work as well. So margins right now are at a really, really good level. I'll let Lamar talk a little bit about the capacity and what we're seeing on the price side, but I'd say it's moving in the right direction. And then what we have to do is just be really deliberate about when and where we want to win and what we're going to participate in. And again, I'll let Lamar kind of talk about his selectivity screen and the visibility we have to this. Yep. So when we look at the relative, what we're seeing right now, winning margins you win at today are 2x-3x what they were a year and a half ago. Significantly, trended in the right direction compared to the lowest part of the trough of the cycle, is what we see. When we look at what we're doing from our side, it's managing the entire portfolio in a much better way. Looking at multiple years of what those opportunities look like, which we identify through our strong customer relationships that we have in that space right now. And then it's managing each opportunity specifically and making sure we're making the right decision. So every opportunity that we submit over $3 million, I see, I approve. When I look at those, I'm looking at what are the original equipment margins? What are the full aftermarket margins associated with the tail, associated with that installation, where it's going, what type of application it is, where it's going to be made, where it's going to be installed, and then also, what's the cash flow for that project? Because these are 12- to 18- to 24-month projects. We have to make sure we've got the right cash flow model in place for those. So we're managing the micro pipeline of opportunities and each opportunity, very disciplined right now. So back to the cycle question, right? We want to participate in this business because it feeds the aftermarket. It's really good. It's the same thing in the valve business. If we can get control valves on the front end of the project, we're getting aftermarket in MRO for years to come. And so we definitely want to participate, but we also want to bring that down to a smaller level of our overall business and manage it the right way. And I just say today, Kirk and Lamar have visibility, tools, and control, far better than we've ever had at Flowserve. Okay, I guess my follow-up is going to be on the 2024 framework. Flowserve always lags the economic cycle. Strong backlog, good orders, improving supply chains. I would have thought 2024 growth would maybe be a little bit better than average. The 100 basis points margin expansion, you've got some cost savings from the $50 million that you've generated this year rolling over. So maybe I would have expected you to be a little on the higher end of the range there. You need 125 basis points a year to get to the, to the midpoint of the, of the range. Maybe there's been a bit of a change in philosophy here over the last couple of years for Flowserve, giving guidance of, you know, maybe just promising what you know you can deliver in 2024. I think that was probably the attitude in 2023. So just any commentary on the philosophy there and... I mean, I'll start then Amy, you can jump in. Like 2023, we did not do ourselves... Or 2022, we didn't do ourselves any favors. So I, I still have some scars on my back about missing guidance a couple of times, and so we really want to put something realistic and that we can absolutely achieve. But maybe you can give some details on how we came, came up with that. Yeah, I think, you know, there's, we're, we're obviously in early days, Nathan, and so, we're very confident that we're going to see growth. And, and I would just say that 20%-25% earnings growth feels, feels sporty, just if you look at it in comparison to, to other opportunities that are out there, in, in the broader market. I, I'll just, you know, emphasize what I said as I presented, which is we're not stopping at 100 basis points if, if we're there. We've, we've got momentum, momentum that we pick in the third and fourth quarter pickup, is going to help us, shape the size of the opportunity that we have, in, in 2024, and we certainly, will be willing to share that as those opportunities, come around. We're still working on our bookings portfolio. Bookings have been strong. Mix plays an important role in how those margins ultimately look. So I, I don't want you to feel like... We, we feel like we're putting something out there that it should be attractive to the market, but as Scott indicated, that we have a high high level of conviction, that we're going to, that we're going to deliver, and we're going to be able to talk about more, in more detail how we achieve in February. Got one in the front. Andy's at round two. Maybe I can follow up on predictability a little bit. You know, Amy, you, you do seem more confident, like this year's been better in terms of predictability. But for, for you or Scott, like, you know, a couple of years ago, you had an ERP, you know, issue. Like, you talked about consolidation of ERP, but you, I think you still have a lot of systems out there. So you're confident now in your system capability, so we can avoid surprises as we move forward? No, no question. I think, yeah, that was a little bit of a one-off event. You saw how many ERPs we consolidated. We got many, many right. We got one wrong, and sadly, it was a big part of our business. But that playbook is fully defined and developed. And then when you look at the ERP landscape today, you know, there's still kind of one or two conversions that have to happen. It's probably more than 12 months out until we do that, and they're not anywhere near the size and complexity that we did in 2022. So I'm not worried about that at all. Then I just say, you know, maybe Kirk, talk about like, I mean, because the valve business, right, has historically been so back-end loaded, like the back end every month or the last month of every quarter and the last quarter of the year. Maybe talk about what you're doing to drive consistency and execution in revenue on a monthly basis. Because this is a big part of what we're doing now. I mean, we've had the... You know, they talk about it in the industry as a hockey stick effect for a long time, right? Hockey stick in the fourth quarter, the back end of the year, the hockey stick on the third month of each quarter. And, you know, as we've come out of COVID and the market downturn and supply chain disruptions and the electrical component shortage and all of this... We've been able to dial in a lot better on our execution, and it's helped us even out. Over the course of this year, and, and you'll see it all as, as you start to see kind of the final financials of FCD at the end of the year. But go back and look at the quarterly performance, and it's quite consistent across each quarter of this year. A lot of that's come from our planning on how we bring in our components, and, and making sure that we're managing our electrical components, which are critical to our supply, at a lot greater level of detail than what we were before the shortages. So it was challenging times, but we learned a lot from that, and we still have opportunities to continuously improve on that. The other pieces that make up within our business of MRO versus projects. And so, you know, that MRO business, it has to ship out because there's responsiveness to an end customer on the back end of it. And so we built some backlog over the last few years while we've cleared also a lot of, a lot of book to ship revenue as we come through. So we feel really excited going into 2024, because we basically level loaded our revenue profile across months and across quarters. We're dialed in where we're responding to the market on their needs, and, and we feel like we'll be able to maintain that type of profile. That helps us quite a bit when you, when you think about primary working capital and what we're doing on primary working capital. Yeah, that become-- it becomes a virtuous cycle, obviously, because, you know, the more, the, the more product you're shipping out in the first month of the quarter, the, the more time you have to collect it before the end of the quarter, the more level loaded you are, the more stable your inventory balances can be. So I think that one of the things that's happened as we've had the luxury of a significant, of a significant backlog, and we've moved beyond some of the challenges that we saw in 2022, is now the discussions that we're having on a monthly basis about performance, they're not about next month, they're about next quarter or the quarter after that, and how do we plan and align for that. We talked about in the fourth quarter or in the third quarter of last year, that we were thinking about the first quarter of this year, and the teams were gearing up for that. No different now. Our discussions, the improving operational performance allows us to really focus our discussions, not on next week, not on next month, but really next quarter or the quarter after that, and it becomes a virtuous cycle when you allow yourself that time to plan. That was kinda gonna be my related question, Amy. Like, if I go back to that sort of mid-2000 teens timeframe, when you were collecting cash, it felt like you had to sort of go under every rock to sort of find it. Like, you know, are your systems to where you need them to be, where you feel good about that line of sight to get to that working capital as a% of sales to mid-20s%? We've got much more information available to us. We're managing document flow better, which is considerable in this space. And I would say that overall, collections are a team sport. We've got individuals that are interacting with our customers on a daily basis and sort of aligning around goals and making this about more than the collections team has been critical to our success in this area. And then I would say, again, this sort of deliberate mix shift, MRO, more industrial product, aftermarket, those come with much better terms than what we see in some of the more medium, longer term projects that we might have. And so there's a benefit from that as well. Yeah, the collection side, we've moved from brute force to true process. Amy may have made a few personal calls in the early days on cash collection, and now it's more part of the operational, you know, the normal every day, and like Amy said, it's very much a team sport. And so we really like what we've done there, and then we're confident we can do that on the inventory side as well. Hi, Brett Kearney with Gabelli Funds. Great to see the improvement in employee engagement, I think particularly from where things stood when you first joined, Scott. I guess, you know, what initiatives have you undertaken or plan to, I guess, to continue to drive improvement there, align the entire organization around the goals you've laid out today? And then clearly, you know, the energy comes through in the leadership team today, but how are you thinking about prioritizing, specifically within, you know, the engineering and sales functions, given the robust opportunity sets they have in front of them? Yeah. How do they prioritize which opportunities they go after? We are fortunate to have our CHRO here in the room, and so I'll let her expand on that. But before she jumps in and answers the three-part question, Elizabeth, hopefully, you saw culture and people is super important to me. It always has been in every business and every, every team I've ever been involved with, and that was no exception when I came here. And so, you know, as you said, Brett, we've, we've completely flipped employee engagement. We were not in a great place when we started. We're at a really, really good place. You see it in all of the team members. We see it as we go around our sites. Our customers provide feedback that we've got an amazing group of people that are talented and wanting to serve. And so I think if you go to the Venn diagram here, right, it starts with people and culture. If you get that right, in theory, that should drive execution or excellence in execution, and ultimately allow you to execute your strategy. And so we put this up deliberately. I appreciate you bringing it up, but maybe, Elizabeth, you can talk about some of the initiatives and programs that we've done to drive engagement and training within the leadership. Yeah, sure. Thanks so much. As Scott said, you know, when we joined five years ago, this was a complete inverted triangle. What we saw was tremendous engagement deep in the organization, but not at the leadership levels. And so what we've really done is flipped that dialogue and focused on our leaders, focused on investing in communication with them, engagement, enrollment with this team, with our senior leaders in the organization, and a specific investment in what we call Leadership in Motion, which is a training program designed to do both fundamental people management capability, but also a set of people expectations that individuals can use to assess how they're connecting with their team, how frequently they're meeting with them, how motivated and inspired are their folks. We use regular pulse and feedback surveys to kind of dial it in, all the time, and it's a multi-phase training approach that we, we have visibility into for the next several years. I think we should see that engagement profile not only stay stable, but accelerate. As you know, this operating model has created a lot of momentum, a lot of clarity for people in their roles. When people have clarity on their roles and they work for great leaders, leaders who are 11% more effective than they were three years ago, you tend to see engagement fly. Yeah. Then the other thing is, it's not taken for granted. Any year, this could turn the wrong way, and our team is very focused on communication, empowerment, and engagement across the board. So when you have that, it'll keep moving up. So we're... Again, we're proud of what we've done. We think we've got a great culture. We'd like to continue to add to it as we go forward and build on this success. Yeah, in the back. Hi, Mustafa Okur with Bloomberg Intelligence. I wanted to ask about ESG-specific projects, actually. My understanding is, projects like gas flare capture, carbon capture, and flow loop assessment, they're still a relatively small part of your business, but quite fast-growing. Is there an opportunity here, maybe not two years from now, five years from now, they're sizable enough, you become a partner to your customers, and that helps you reduce the cyclicality, going back to Joe's question? And then the second portion of my question would be, how are the margins associated with these projects? Because some of these consulting-type projects can be quite labor-intensive. Are they at, you know, similar to the company margins or lower or higher? Sure. Yeah, I would just say, I'll start with the examples that Susan went, and Susan can jump in here, too. Those are all great examples, and we're in a differentiated approach there in terms of what we can offer. And so the margins are, at a minimum, on par with what we normally do, but, you know, I would say they're all accretive. And on the Energy Advantage, you know, one is the consultative sell and the, the, "This is what you need to do." We'll charge for our engineering, which is fine, but then we're getting repair and parts pull-through on the back end of that. So we actually get enhanced margins when we go in and do these, this engineering-type work. And so, you know, again, it's a small part of what we're doing today. You know, Karthik used the word on RedRaven about tipping point. Energy Advantage is in the same exact boat. I mean, we've got how many engagements that are we're in 30 dialogues right now. 30 +, right? We've already done 31. Yeah, 31 assessments are out there. You know, we're moving through order generation and revenue coming on that. But again, it's like what Karthik said with RedRaven, once we can start documenting these wins and share them with other customers like we did today, and say, "Look, when we come in, on average, we're getting at least 15% energy reduction." And, you know, while that doesn't sound like a big number, the pumps is the energy in their flow loop, right? And then you figure out, okay, well, where did they get the power from? If they get the power from something that has high emissions, then any reduction there drives CO2 reduction as well. And so we're pretty confident that this starts to accelerate in a really, really big way as we go forward. And like you said, if we can get more and more of these opportunities right, then it starts to de-cyclicalize the business as well. I also think where we have governments that are actually looking at how they can fund these projects, those are opportunities for us to easily get in the door with our customers. They see that value proposition right away, and so we are really targeting. The Energy Advantage team is targeting areas where we can have that- Yeah. ... government funding backing. Just one additional comment, right? I mean, one of the leading indicators we use is how often we interact with the customers around this, and we're seeing that skyrocketing, right? Which promises- that's a promise for the future because we're having those interactions. Okay. Any other questions? All right, very good. Well, I've got one closing slide here. You guys can stay up. This won't take long. I want to start by saying thank you for coming. For those online, thank you for participating. The questions are always interactive and engaging, and so thank you for that. Before we head to lunch, I want to just hit a few closing points here. So first, your revenue and growth, right? We have strong end markets. We talked a lot about that. We enhanced that with the 3D strategy. We've got confidence in the ability to deliver that 5%+ revenue growth. The other one I want to talk about is just the improvements with operational excellence and how we go-to-market. We're leveraging Flowserve 2.0. We combine that with the new operating model. It drives consistency and resiliency. We didn't get too much into it. I wanted Juan to have the opportunity to talk about operational model. One of the components in there is problem-solving, and so as we solve problems at the lowest levels of the organization, we're more resilient, we can change faster, and we can deliver consistency of results. And so that's something that's now fully embedded in what we do at all levels of the organization. And then finally, operational excellence, product and portfolio management. Those are two initiatives that we feel very strongly can deliver the 100-200 basis point margin improvement on their own. So each one, that gives us confidence into our margin targets of the 14%-16%. Susan did it really well. Climate, culture, core responsibility, it is absolutely essential to who we are and what we do. I think what you saw is this is not just an ESG story for ESG's sake. This is truly us and what we do and how we serve our customers, and, going back to our purpose statement of making the world a better place. Our employee engagement is really driven on the back of a lot of good work that we're doing with our culture, climate, and core responsibility. Then finally, the investment in innovation, product management, and ultimately moving to a flow control solutions providers allows us to change the game. We move up our chart there to the very top. We become a trusted partner in what we do with our customers. That is, that allows us to continue to have the conviction for long-term growth and value creation. Then finally, I just want to say thank you to this team. I think what you saw is commitment, passion. We saw the energy, and we've got a great team to deliver results through 2027. So thank you, team. Thank you, everyone, for joining us. Have a great afternoon. Lunch will be outside, past the product displays and out there. Thank you.