Centuri Holdings (CTRI) Q2 2026 earnings call transcript

I will now hand the conference over to Nathan Tetlow, Vice President and Vesta Relations. Nathan, please go ahead. Thank you and good morning everyone. Today we issued and posted to Century 2nd Quarter earnings release and investor presentation. Please note that on today's call, we will address certain factors that may impact this earnings and provide some longer-term guidance. Some of the information that will be discussed today contains forward-looking statements within the meaning of the private securities litigation reform act. These statements are as of today's date and based on management assumptions and are subject to several risks and uncertainties, including uncertainties surrounding the impacts of future economic conditions and regulatory approvals. A cautionary note, as well as a note regarding non-gap measures, is included in today's press release in the investor presentation and in our filings with the Securities and Exchange Commission, which we encourage you to review.

Also provided our reconciliation of our non-gap measures to related gap measures. These risks and uncertainties may cause actual results to differ materially from statements made today. We caution against placing undue reliance on any forward-looking statements and we assume no obligation to update any such statement except as required by law. Today's call is also being webcast live and will be available for replay in the investor relations section of our website shortly after the completion of this call. On today's call we have Chris Brown, President and Chief Executive Officer and Greg Eisenstark, Chief Financial Officer. I will now turn the call over to Chris.

There, thank you and thank you everyone for joining our second quarter of Ronan's call. We're proud to have delivered 962 million of revenue for the quarter and you quarterly record for censoring. I just did net income for the quarter was 24.4 million, an increase of 44% from the same quarter last year. In terms of our base measures, which include stormwork and for this quarter a one-time pre-NPO receivable write-off, second quarter base revenue was 36% higher than last year and base gross profit was 21% higher.

For the first half of the year, base revenue was 33% higher than last year and base gross profit was 35% higher than last year. This is remarkable growth and reflects the dedication of our teams across the U. S. and across Canada. I'll start with the recently announced acquisition of JJ White, a leading provider of union industrial, mechanical and electrical medicine and construction services. JJ White has about 1000 employees and will be integrated into our recent business and in scale and in like construction expertise across several end markets, including data centers. This token acquisition is consistent with our strategy that we learned out earlier this year. We increased scale in the North East and Midwest, expanding our call business and adding new customers in the electric end markets.

We expect JJ White to add more than 20 million of gross profit on a full gear annualized basis. The total cash consideration paid was approximately $62 million, funded from existing balance sheet liquidity.

We therefore see no change to our year end leverage target of two times. And we're very much excited to welcome the JJ White team and we'll look forward to the growth and their execution ahead.

Now for a commercial update. Where we continue to see strength in our core and adjacent end markets and more than ample opportunity to live a sustainable growth at double digit levels. Second quarter bookings were nearly 850 million, bringing our year to date bookings to over 2.2 billion. Our book to build ratio year to date is 1.3 times. And on an organic basis for the full year, we attacked in a 1.2 times book to build or approximately 4.4 billion of total bookings for 2026. The successful negotiation and award of our largest data center project has demonstrated our ability to differentiate and secure complex, value added contracts into our portfolio. The 125 million award from his electrical infrastructure and utility were a multi-building data center campus.

We continue to view the data center demand as robust, attractive and growing. And with the addition of JJ White, we will further increase this sense of backlog and the pipeline of opportunities for our company. At quarter end, we had about 2 billion of data center opportunities in our pipeline. Other big works in the quarter include the construction of an electrical transmission and substation project for Atlantic Canada, which was a very nice award for the Connect team. And also the assembly and installation of key components of the guest infrastructure for a guest infrastructure company. And finally, as large significant electrical high voltage transmission projects in the northeast of the US.

On the MSA side, we booked approximately 250 million in renewals, which included guest distribution infrastructure upgrades and expanded skills of work for a long standard utility customer.

We also booked approximately 200 million between new MSA's and growth from existing MSA's. Demand for our core MSA work included expanded skills of work remains very strong. Our current more notable is the opportunity pipeline has increased to approximately 16 billion, which is up 23% from the first quarter, which demonstrates the strength of our markets and our ability to present centrally for backwater growth. We have nearly 700 differentiated bid opportunities in the pipeline, which collectively represents 60% of the 16 billion. And in the very near term, we have 2.5 billion about standing this pending at the end of Q2, which represents a 15% increase from the first quarter. This number is further increased as we've moved into Q3.

Another positive indicator of the strength we are seeing across our own markets, over two thirds of these pending bids are from our electrical segment. It should also be noted that as we build and increase our volumes, our big margins year over year have increased by more than 10%, which is fully in line with our one-term margin targets that we communicated earlier in February this year. As we've discussed over the recent months, we have focused on driving longer-term sustainability to our business through margin expansion, backlog, and greater coverage for the subsequent years. Coming into 2026, we had about 3 billion of coverage for 2026 revenue.

And we announced forecasting to exit 2026 with more than 3.6 billion of revenue coverage for 2027. This is a 20% organic increase. This visibility and predictability provide the foundation for sustainable growth, allowing us to plan and execute for the future.

Lastly, to support customer demand and build the sustained growth over the first six months of this year, we have organically adding approximately 1,700 employees, representing an 80% growth in headcount so far this year.

In the U. S. gas business alone, we've added over 1,200 employees, a 25% increase to support client demand emanating from our strategy to mitigate seasonality in our business. And expand our growth margins. This significant capacity increase at net-term costs, which we estimate reduce cent of quarter growth profit by approximately 3 million.

We fully expect these capacity investments to benefit Q326 and the subsequent quarters as our resources generate revenue and margin expansion. We forecast approximately 7.5% gross margin for our U. S. gas business in the second half of this year, 2026.

We were also affected by an electric fuel prices in the quarter, relating to the ongoing conflict in the Middle East. The average per gallon cost was at 48% year over year, and the estimated cost impact within the second quarter was approximately $6 million.

How do you feel prices and the investment associated with additional gas resources together had a combined 95-visit point impact on the second quarter, this gross profit margin? The fundamentals of our business remain strong, and we continue to invest in the future, get it by the priorities outlined within our visual-long-century strategy. I'll now turn over to Greg to discuss the financial results.

Thank you, Chris. Good morning to everyone. Second quarter, 2026 consolidated revenues told $962 million, a new quarterly record, and was a 33% increase from Q2 to 2025.

Consolidated gross profit was $69 million, and gross profit margin was 7.2% in the quarter. In terms of base results, which exclude the impact of storm work, and for this quarter, a one-time write-off, I'll discuss shortly. Base revenue was up 36%, and base gross profit was up 21% compared to last year. Base gross profit margin was 7.9% in the quarter versus 8.9% last year, and on a trailing 12-month basis, base gross profit margin was 7.8%, versus 7.4% a year ago.

Netty tote attributable to common stock in the second quarter was $6.1 million, or $6.5 per share, compared to a net income attributable to common stock of $8.1 million or $0.9 on a per share basis in the same period last year. In the second quarter, adjusted even, was $40.5 million, 8% higher year over year, and adjusted even though it was $75.7 million, a 5% increase over the same period last year. Adjusted net income in the second quarter came in at $24.4 million, or 24 cents on a per share basis, compared to $16.9 million or 19 cents per share in the same period last year. As Chris mentioned, second quarter results were impacted by elevated fuel prices from the ongoing conflict in the Middle East.

We estimate that the higher fuel prices in the quarter amounted to an additional cost of approximately $6 million, or approximately 60 basis point impact on margins. In the second quarter, the company wrote down all of its remaining accounts receivable and contract assets related to work that was completed prior to 2020 for the city of Chicago. The work, the write down, reduced US gas revenue by $9 million in the quarter. We did not budget collection of this received over 2026, so the write down has no impact on our cash flow expectations.

We have excluded this one time item from our non-gap measures, including our base measures. Now to our segments, US gas revenue was $489.5 million, an increase of 45% compared to the prior year. The growth was driven by increased bid work and MSA volumes, demonstrating the underlying strength of our customer relationship and market position. Growth profit margin was 4.2% in the quarter, down from 7.8% last year.

Base growth profit margin for US gas was 5.9%. As previously mentioned, second quarter margins for US gas were impacted by approximately $3 million, or 60 basis points from capacity added in the second quarter. While the timing of these conditions impacted Q2 costs, we expect the results, scale, benefit, benefits to support stronger performance in the second half of 2026, and further improved seasonality during the first quarter of 2027.

On a year to date basis, we've seen significant growth and improvement in profitability of US gas. Base growth profit has more than doubled from last year, and base growth profit more margin improved by 36% over the same period last year. Canadian operations revenue was $81.4 million, up nearly 48% from the prior year period, primarily from the inclusion of connect.

Operational performance in this segment remained strong against the backdrop of sustained favorable demand as evidenced by the 16% growth profit margin in the quarter. Union electric revenue was $224.2 million, and increased to 23% year over year. Growth has been fueled by robust activity and projects serving industrial end-user segments. Growth profit margin for the union electric segment was 9% in the second quarter, ahead of the 8.4% recorded in the same period last year.

Non-union electric revenue in the second quarter was $166.9 million, an increase of 11% year over year. Base revenues in the non-union electric was $157.1 million in the quarter, which is a 15% increase from last year. This growth reflects the significant expansion we've seen in MSA activity, building on the momentum we've discussed in recent quarters. Growth profit margin in the non-union electric segment was 9.1% in the current period compared to 11% in the prior period compared to 8.9% in the prior year.

Turning to cash flow analogy, net cash provided in operating activities for the second quarter was $20 million, and pre-cash flow was negative $7 million. Consistent with our expectations, for the full year we expect pre-cash flow to exceed $75 million, a 25% improvement over initial expectations. We ended the quarter with the net debt to adjust even a ratio of 2.6 times, which was down from 3.7 times a year ago. We continued a forecast net debt to adjust even up around two times by year end.

Finally, turning to our 20.6 hour. We have increased our full year guidance and have included expected contributions from JJ1. The full year guidance also includes approximately $5 million of forecasted incremental fuel expenses based on an assumption that higher fuel prices persist through the third quarter. As a reminder, base revenue and base growth profit are non-gap measures that exclude the impact of storm restoration services and the one-time breakdown today is the city of Chicago.

For 2026, we expect base revenue of $3.5 to $3.7 billion, and base growth profit of $270 to $290 million.

Revenue, adjust diva, and adjust net income are measures that include storm restoration services. Studies for these measures include storm restoration services using a three-year average of $88 million in revenue to $28 million in gross profit. For 2026, we expect revenue of $3.59 to $3.79 income of $16 to $75 million. And lastly, we are reducing our net cap, cap that solid look, to a range of $16 to $75 million. Following the sale, we expect to select equipment early in the third quarter. I will now turn it back to Chris to wrap up with his remarks.

Chris?

Thank you, Greg. As we wrap up today's call, I'd like to leave you with a few key goals. We've demonstrated our ability to capture market demand and deliver growth. Over the course of the last year and again in the first half of this year, we have successfully identified and secured opportunities across our own markets.

Expanding our workforce to meet our customer demand, and continue to grow revenue backlog on the opportunity pipeline. The focus is now not only sustaining that growth, but leveraging the scale we have built into expand margins and drive stronger profitability over time. We're very pleased with our first half performance, and more importantly, encourage bandwidth trajectory of our business. But we outlined last quarter in our vision one century strategy that had to achieve in our 29 best growth profit margin target of 9.7 is built on three primary drivers, reducing the seasonality of our business.

Increasing the mix of high emerging big work and delivering operational excellence. We've already begun to see these initiatives gain traction. Our first quarter results demonstrated meaningful progress in seasonality. Our opportunity pipelines and bookings continue to support growth in big work. And we are now advancing several operational excellence initiatives that believe will bring lasting value over time. We are increasingly confident that the right tools processes and leadership are in place to drive sustained progress. Initiatives like a newly established PM organization, fleet optimization efforts, working capital management, and enhanced job level performance attribution and analytics are in early stages. These initiatives represent important building blocks in creating a more efficient, scalable, one century model.

We are investing with intention, executing against our clear strategy and are encouraged by the momentum we are seeing across the business. In short, the implementation of our margin improvement plans to deliver the 2029 targets continues in line with our expectation. As we look ahead, we remain confident in our ability to deliver sustainable growth, achieve our long term margin objectives, generate free cash flow, and create significant value for our shareholders.

We truly appreciate everyone's time today and the interest that you've shown. Operators, let's begin the Q&A.

Good morning, Sangeeta. Yep, I can cover that. First of all, we've known JJ White as an organization for a number of years. So the cultural fit, the capability and the relationship between our respective businesses were long established. So this wasn't finding a business we did not know well. So that was number one. What JJ White brings us is more scale, more capacity to be able to deliver on growth in the Midwest and the Northeast, primarily focused on implant power data center related activities.

The business has got a massive track record in developing talent within the business. It's currently 1,000 people. We believe it can flex each to 2,000 people. So it brings capacity for us.

The question on synergy, we don't see cost synergy at all in the transaction. JJ White is currently mobilizing into our overall rigs offices in the New Jersey area. We see the synergy coming from their operational capability combined with ours to do more work for our customers. That's where we see the synergy and the supply chain of people they have, supervisors, as well as craft, giving us more capacity in that Northeast Midwest to deliver for our customers in both data centers and energy. And that's very helpful. And then maybe I can follow up for Greg. You gave us a look into second half. You said you're fashioning in 5 million on higher fuel costs. Can you give us a sensitivity on how many basis points of margin that should mean for the second half?

Yeah, so good morning. And so overall, for the full year, fuel from the $7.5 million or $7 million in the first half and then the $5 million that I noted in the second quarter, in the third quarter, excuse me, it's about 35 basis points of headwind for a full year basis.

We are functioning in our four-bar guidance assumes a $5 million headwind in the third quarter and then back to some level of normalized increase year over year. So our guidance in the beginning of the year didn't assume some normal increase that you would expect.

Hey, Greg. Hi.

Looks like revenue is up about 300 million at the midpoint. EBITDA is up a little bit. Maybe she can just help us understand the conversion, the EBITDA flow through and then I will follow up. Yeah, so maybe taking a step back. When you get base gross profit, you know, of the increase that we've assumed, you know, our guide is about two-thirds of it kind of relates to organic business. And then one-third of it kind of relates to the seasonal JGYU, the five or so months of contribution that we'll get here in the back half of the year.

From an adjust to even a perspective, we've assumed, you know, that that same level of base gross profit along with our storm activity. Obviously, you have the previously discussed kind of headwind from moving to a 50-50 split on leasing, which we're on target with and have revised or finalized the sale and lease back of our existing fleet. So any future purchasing will be along those lines.

So, you know, the combination of all that, you know, gets you to adjust to the EBITDA, you know, about 7.1% at the midpoint.

So I guess what is the incremental impact to EBITDA off that sort of 10 percentage point increase in operating lease this year? So the full year impact of our leasing is about a half of percentage point, or is about 55 basis points, excuse me? On margin. On margin, even margin, 55 basis points on even margin.

Is that pipeline increase already in the $16 billion number that he gave or is that something? Okay. Just said it's not. We didn't close on JJ White until, I think, the third week in July.

So it will be out of zit, mate.

That's, I figured that I just didn't know, given that that pipeline number. But as Greg just said, the only element you'll see of JJ White within our release is the guidance where one third of the stress. Yeah. Well, and that leads to my second question because I guess this is what I kind of want to understand a little bit better because you know, the, the organic, you know, as you just discussed, the revenue is $200 million higher. You've got, you know, another 100 from JJ White. You raise the, the, even the guidance by five, you pick up nine or so from, you know, the five months that you have JJ White and you offset that with the, the five million dollar headwind from the higher fuel cost.

So that basically just, I guess I would look at that and say that it implies organically that there's no incremental margin on any of that acquired revenue. And so I guess I just want to understand that dynamic and also just the confidence in the second half base grows profit margin outlook, which is like roughly nine percent versus, you know, just under eight that you did here in two queue. I know there's seasonality, but just, you know, I guess help me understand some of those moving pieces a little bit better. Let me talk about second half and then Greg can come to the overall guidance just to help you map the numbers. You know, we feel second half of the year very strongly about the volume of work and also about the 9% quoted margin.

We've got total visibility of pretty much everything that we need to deliver this year is on the contracts. I think there's a slide within the deck that shows that to everybody.

We've added the capacity to we needed to add in gas. I think everybody has said in my speaker notes, but everyone will recall we have a massive drain on margins in our first quarter, you can go into April. So adding more volume into the gas business needed people to win work, put it into the back of which we did, you've then got to mobilize people and we've added 12 of them in the quarter. Those boys and girls will stay within the head count because we've now reached where we have to be on a capacity standpoint. So as we don't just look at the business on a quarterly basis, the business is just not linear like that because of the seasonality as well as the portfolio mix.

So what's the point? The point is we added the capacity we needed in the second quarter. We've got full visibility of where we're going to be for the second half of this year. We're really confident in the 9% margins as quoted and our intent now is to drive very strongly to the end of the year. And then if you look even into 27, which I know we're not into 27 year, we've already built up the backlog for next year, which is really important when it comes to seasonality. The seasonality for the first quarter next year requires us to win work now and have resources for next year. So the bottom line is very confident in the second half of the year.

We've got pretty much all of the revenue under contracts. We've added the capacity we need to, particularly in the gas business. So we feel very confident that the investment in the first quarter will have widened margins in the second half of the year and confident within that overall 9% for the second half of the year across the board.

And specific to the guidance, we talked about in our release the annualized revenue conqueror gross profit contribution from JJ White being 20 million plus. With margins consistent with our union electric business or our business as a whole. When you think about they also have a bit of GNA expense and they're very capital light in their and how they operate their business. And so very little depreciation within the business as they they're very efficient from that perspective. And so taking into consideration lower depreciation within their numbers and then some level of GNA expense, you get to a even a contribution that's a little bit less than where we, what we said on the gross profit basis.

You also have to remember that our our EBITDA guidance includes the fuel impact. It's about $12 million on a full year basis that we forecast it. When you factor all that in, you know, in GNA expense still be, you know, in line with what we previously said, which is, you know, 4% or better on a percentage of revenue basis. And then the last thing I just went out on on gross profit, I mean, gross profit margin, you know, on a full year basis, it's going to be in that, you know, kind of, you know, 7.8 to 8% range.

So just wondering if 3Q still hits around that marker, we're expecting to see a sizable step up in 4Q. Zach, I apologize, the line was particularly back, which we requested is about Q3 over two full margins in gas.

And just total base gross margin. So I think we said in our prepared remarks that the back half of the year for US gas, you know, we expect to have gross margins in the 7.5% range.

And we should expect a sizable increase from 3Q to 4Q due to the headwinds you mentioned previously. I mean, the third quarter generally is the most active quarter that we have, just given weather throughout the United States and Canada, and the fourth quarter, while comparable to that, you obviously get weather and holidays in the back half that could impact productivity. But generally speaking, the third quarter is our strongest period.

And just as a follow up, I see really nice growth acceleration and bid work last couple quarters. Can you just talk about how gross margins have been trending in that work? How they've been trending for sex expectation and how it compares to MSA at this point?

Yeah. Zach, can we lead out previously our desire to grow the business and the bid mix moving from 80% and this is a 20% bid work to probably long term, 65, 35, get it said. Um, we, we see a, we are tracking bid margins as we are tracking now more closely as delivered margins. And bit, bit work is between 1.1 or 1.5 percent highs in the MSA margin.

Hi, good morning guys. I believe you already answered this, but just want to make sure the $16 billion opportunity pipeline that you noted that does not include JJ White. Is that correct? I can confirm that the case. Avi, the $16.2 billion of the precise excludes any JJ White pipeline of opportunity. As does, as does the backlog of 6.4 plus million in quotes, it is absolutely excludes.

So should we take that to mean that you're looking at meaningfully larger bid opportunities than previously, or is that just reading into it too much?

Avi, it's the same of conversation of the margin as it is with the pipeline. You can't look at it. It's not Swiss watchmaking. We can't look at it on a quarterback water basis. So we look at absolute data over a longer time horizon. So what I will tell you is, at the end of last year, December the 31st, we had 13 billion in the pipeline. There's now 16.2 billion. A six month time horizon is a fair, in my view, direction of travel for a number of things bought pipeline as well as margins. If you look at the mix of work over the same timeline, we've gone from 6.7 billion of the 13 billion at the end of December was project work.

And six and a half billion was NSA work. At the end of June, at the end of June, so the quarter looked just closed, the project work is 9.6, six, four to be precise. And 6.56 is the NSA work. So we've seen just nearly a 50% increase in the bid work, which is totally consistent with the strategy we laid out in February. I will tell you the average size of the scope of work within that project has only moved up by a couple of million dollars.

So we're not deviating from doing the services and the projects that we've always done. There's a two million increase from the average contract size within the pipeline at the end of the year to where we are at the end of June. So it's not that serially different, but the amount of work that is big work has gone up by 46.5% to be precise.

I want to ask also about slide note that you're evaluating opportunity to expand geographically and with electric transmission capabilities. Do you see those more as organic growth opportunities, or would they be more likely to be through acquisitions?

I think you've got to decouple two things there. The primary basis of our business is organic growth. And we've got the capability to do more to do transmission work. We announced two awards in the corner, one for Canada, which is one for the northeast. We doubled in the sales pipeline. We have doubled the amount of transmission, electric transmission opportunities from the December to where we are in June. So there is an absolute desire as we communicated in February's part of our strategy to derive organic growth into our transmission business across both union and non-union. And we're doing that, we're seeing that in the pipeline, we're also seeing that in the recent awards. The second question around M&A, I will stick to what I think we said in February and what I've been saying for a year.

We've got a very, very good platform to grow our business. We've got some evolution to do as we bring us together as one strategy, as one company, as one vision, mission and values to deliver the sustainable growth. But there are areas in the business where we would like to acquire. We've essentially done two token acquisitions in my tenure here. One was connecting the North, in Northern Atlantic Canada, which was electrical transmission, distribution, and the recent acquisition for unions in the northeast was electrical union to support the overall data center and utility clients.

As I said, when we rolled out the strategy, our anticipate as time moves on, if we see businesses that look similar in size, similar in quality, that we compare the right price for, that complements our electrical business, especially our electric transmission. We would love to do those. So that's how I answer the question.

And then, Chris, I did have one other question for you. Yeah, when Greg just answers your question, I will just sort of wrap up a little bit on the margin comments, right? Because he does get lost because he's complicated business. I would just like to summarize where we are and how we look at this so the audience can understand it. So let's bring up to your question, then I'll just add something to the back end of that.

Yeah, and let me focus on kind of full-year gross margin, base gross margin, because that's ultimately one of the key drivers for the management team. So when you think about a base gross profit margin, there's the contribution of the JJ White, which is about a third of the gross profit increase in the margin in the base guide that we discussed.

You have fuel costs, which between what's already occurred in the first half of the year and what we had forecasted to the second half of the year is about $12 million of a full-year impact.

And then you have the ramp up cost, which were already incurred in this first half of the year. They're already in our full-year numbers. Obviously, that's about $3 million. So overall, gross margins are adjusted for fuel or about 8.1% on the base versus the guide of 7.8%, but that obviously doesn't add back to fuel.

So, I mean, one thing I would talk specifically about on the margins, we got a reported margin, then we've got the impact of the Chicago, which was pre-app here, and not even operationally, we're involved in it. It was just something that was on the balance sheet. We've then got the fuel cost, and then the Q2 capacity increase. If you look at year to day where we are on the margins and how we track it, our overall group margins, 25% and 6.2%, and we're now at 6.3%, all that is doing is just a trailing 12 months basis. Last year, we were at 7.4% this year, or 7.8%. And the reason I look at the year today and the trailing 12 months is not an excuse.

It's just our business at the moment, it's not linear. We don't have 12 consecutive growth at all of a percent, mainly due to seasonality, the portfolio makes them the title work. So, we see our underlying margins if you just take out one thing, which is the city of Chicago, and you keep in there the fuel costs and the mobilization for capacity in the second quarter, on a year to day, or up 6.2, from 6.2 to 6.3, and then on truly 12, 7.4 to 7.8, I think that's just getting lost a little bit, because of the complexities of reporting. And I would say if you look at the gas margins where most of the seasonality is, year to day, last year, we were at 2.2% growth profit.

This year, we're at 2.9%, and on a trailing 12 months, we're one and a half percent more than we were a year ago.

And just kind of going back to our last meeting in June, Chris, we talked about maybe three and a half billion or so of 27 work that you expected to book by the end of 26 and, you know, 15% plus backlog increase. If you can just give us a quick update on where that stands today, both excluding and including J. J. White. I can, I can. We deliberately added a slide for for readers, I think it's slide 12, Greg, Greg, Greg, Greg, Greg, they're making me that basically addresses that very point, Manish. So, as you quite rightly said, 20, 25, we have three billion of coverage coming into 26.

We are roundabout where we sit now with about 3.6 billion. So, we're up 20% in terms of expected coverage where we close out 2026 for 2027 revenue. So, that trajectory has continued and you'll recall the other 24, we only have 2 billion going into 25 budget 12 months, 25, and I said we had 3 billion items. You'll see on slide 12, we're at 3.6 billion is where we forecast and that excludes J. J. White.

What I will tell you on J. J. White, they have a similar level of coverage for both 26 and we are currently validating their coverage for 27. But I suspect that the J. J. White coverage for next year will look very comparable to what we have within century. So, I think the guidance that we very accurate, I will draft 20 to 20% more coverage going into next year and I think J. J. White will be of a similar mix.

I will now turn the call back to Nathan for closing remarks. Thank you, everyone, for your questions and for participating in today's call.