Good afternoon and welcome to Fluor Corporation first quarter conference call. This call is being recorded. At this time all participants are in a listen-only mode. A question-and-answer session will follow management's presentation. A replay of today's conference will be available at approximately 8:30 p.m. Eastern Time today, accessible on Fluor's website at www.fluor.com. The web replay will be available for 30 days. A telephone replay will also be available through 8:30 PM Eastern Time on May 19th at the following telephone number: 888-203-1112. The pass code of 6743150 will be required. At this time for opening remarks, I would like to turn the call over to Ken Lockwood, Vice President of Investor Relations. Please go ahead, Mr. Lockwood.

Thank you, operator. Welcome everyone to Fluor's first quarter 2008 conference call. With us today are Alan Boeckmann, Fluor's Chairman and CEO; Mike Steuert, Fluor's Chief Financial Officer; and also joining us today is Steve Dobbs, our Senior Group President in charge of the Government Global Services and Industrial & Infrastructure segments. Our earnings announcement was released this afternoon after the market closed and our 10-K was also filed today -- 10-Q, excuse me. We have posted a slide presentation on our website, which the presenters will reference during their prepared remarks. Before getting started, I'd like to read our cautionary note regarding forward-looking statements, which is summarized on Slide 2 of the Investor presentation. In discussing certain subjects, we will be making forward-looking statements regarding projected earnings, market outlook, new awards, margins, tax matters, and other statements regarding the intent, belief, or expectations of Fluor and its management. These forward-looking statements reflect our current analysis of existing trends and information, and there is an inherent risk that actual results and experience could differ materially. These differences could arise from any number of factors. Information concerning factors that could cause actual results to differ materially from the information that we will give you, is available in our Form 10-K filed on February 29th of 2008, which is available online or upon request. The information in this conference call related projections or other forward-looking statements may be relied upon subject to this cautionary note as of the date of this call. The company undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events, or for any other reason. With that, I'll now turn the call over to Alan Boeckmann, Fluor's Chairman and CEO.

Good afternoon, ladies and gentlemen and thank you for joining us today. We're going to be reviewing our results for the first quarter, our market outlook and discussing our increased guidance for 2008. I'm pleased to report that our first quarter was very strong, with revenues, earnings, new awards and backlog all increasing substantially from a year ago. Most importantly, we continue to see substantial strength in our key markets, which bodes very well for our future growth. I'd like to provide some highlights of our financial performance for the quarter and I will reference Slide 3 at this point. Net earnings rose by 63% to $138 million, or $1.50 per diluted share and that compares with $85 million or $0.94 per share in the first quarter of 2007. Consolidated operating profit for the quarter grew by 40%, to $249 million. These results reflect very strong growth in Oil & Gas, Global Services, Industrial & Infrastructure, and our Power segments. Revenue increased 32%, up $4.8 billion, up from $3.6 billion in the first quarter of 2007, reflecting growth in all of the segments except Government. As I move to Slide 4, you will note that we had another very strong quarter of new awards, booking $5.7 billion, which is up 28% from that a year ago. And while we had awards across the portfolio, this quarter was heavily driven by Oil & Gas awards, which totaled $4.3 billion. Consolidated backlog for Fluor rose to $31.5 billion, up 33% from a year ago. This is our tenth consecutive quarterly increase and has set another new company record. I would like to make a few comments on our markets and prospects going forward. Overall, we continue to see very strong demand for major new energy, industrial and infrastructure projects globally and we've seen very little effect from tightening credit markets and recessionary pressures. The level of front-end activity is substantial and major prospects are proceeding on the schedule that we anticipated. I think our significant first quarter awards provide compelling evidence that our markets remain robust. I'd like to talk a little about each of our segment markets, but first let me ask Steve Dobbs to provide some highlights on your segments and then I'll comment on Power, Oil & Gas.

Thanks, Alan. I'm going to provide a short summary of each of the three reporting segment that Ken mentioned at the start of the call. Turning to Slide 5, first group is the Industrial & Infrastructure, which consists of three business lines. The first of these business lines is mining and metals, which has seen a significant growth over the last few years as a result of high demand and high prices for the associated commodities. Recently, the primary drivers for Fluor's volume in this business lines has been iron ore in Western Australia and copper in South America. We continue to see strong demand in these areas, as well as increased interest in Asia, North America, and Africa. We have viable prospects associated with alumna refining, gold mining, tar sands, and the metals associated with alloy steel such as nickel. We are also seeing a renewed interest in uranium. Fluor has a strong geographic presence and relevant experience in each of these areas. We continue to anticipate strong demand from large capital projects in this market segment well past the end of this year. One of the most positive achievements I would like to highlight today is that we're seeing sustained growth in the market areas we've identified as being less cyclical such as large government programs, the operations and maintenance business line of Fluor Global Services and Infrastructure. Infrastructure has recently taken over as the largest backlog in the Industrial & Infrastructure segment. As we've discussed in the past, we generally only look at one or two large infrastructure projects being awarded each year given their complexity and extended gestation periods. Our largest active projects today are the San Francisco-Oakland Bay bridge span, the World Trade Center transportation hub, and the recently awarded I-495 HOT lanes project online…

Thanks Steve. Ladies and gentlemen, we are on slide 7 now. In Power, Fluor's depth of experience positions us well to serve this market for new power generation, whether it be from coal, gas, nuclear or alternative fuels. On the coal side, the Desert Rock plant is still out there but we have slipped this prospect into 2009 to the uncertainty surrounding the permit. Considering that the group has a good prospect list, this delay should not have an impact on our growth expectations for the Power segment. The inability to secure environmental permits continues to delay coal-fire projects in general. But as a result we are seeing a number of gas-fired opportunities. We are in fact pursuing several sizable prospects, which we have the potential to come into our backlog during 2008. On the nuclear side, we continue to support the South Texas project, as Toshiba and NRG work to complete their construction operating license application. Finally, as evidenced by the award of a large scrubber at Luminant's Sandow facility this quarter, we continue to pursue an win plant betterment projects. If you will turn to Oil & Gas on slide 8, this segment continues to be a key driver of Fluor’s new awards and backlog growth, representing 75% of the first quarter bookings. We also expect that 2008 will be another record year for Oil & Gas. Downstream awards are expected to be substantial in 2008 following a very strong start this quarter. We are actively engaged on numerous front-end contacts and expect the release of some very large EPC awards in 2008, where we began the feed work in 2007. And those full values are not yet in our backlog. Focusing on the Petrochemicals area, we are pursuing some large opportunities in chemicals and specialty chemicals internationally and we're well into the feed work Eastman Chemicals billion-dollar gasification plant in Texas. On the polysilicon side we are now working for multiple clients around the world and expect that substantial investment levels should continue to benefit Fluor, given our strong market share and position in this developing area. Finally in upstream, we are positioning for some very large programs in the Middle East, Russia and Canada. Many of these relate to the development of gas resources, as well as offshore and on-shore production facilities. We are focused on these opportunities where we can bring our significant program management capabilities to bear and that provides the best returns to Fluor. In summary, from a company-wide perspective, we are encouraged by the continuing health of this cycle which gives us increased confidence that our new award levels in 2008 should meet or exceed the record $22 billion level that we achieved in 2007. And so with that, let me turn the call over to Mike Steuert to review additional details of our operating performance, our new awards and other financial information.

Thanks, Alan. And good morning or good afternoon to everyone. First, let me provide you with a brief recap of the results for each operating segment. Please turn to Slide 9 of the presentation. Fluor's Oil & Gas segment reported first quarter revenue of $2.6 billion, up 55% from $1.7 billion in the first quarter of 2007. Operating profit grew to $138 million, up 56%. New awards in the first quarter totaled $4.3 billion, including a major refinery upgrade for Total Petrochemical U.S.A. and the world's largest polysilicon production facility for LDK Solar Company in China. Ending backlog at March 31, 2008 for Oil & Gas rose to $20.4 billion, which is a 46% increase from a year ago. Fluor's Industrial & Infrastructure segment reported revenue of $796 million in the quarter, essentially level with last year. Operating profit was $29 million, which represents a 39% increase over the first quarter a year ago. Improved profit generation was a result of strong operating performance across the segment. New awards for the quarter were $386 million, with awards across all business lines, which brought ending backlog to $5.7 billion, up 9% from the $5.2 billion a year ago. Moving on to Slide 10, revenue for the Government segment was $280 million for the quarter, compared with $346 million a year ago. Operating profit was $8 million, down from $16 million a year ago, reflecting reduced contributions from various projects, which largely concluded in 2007. We are pleased to report that both the Bagram Air Base and the Haiti embassy projects are now essentially complete. First quarter new awards totaled $99 million with ending backlog essentially flat at a year ago at 538 [ph] million. Moving on to Global Services, the segment reported an 11% increase in revenue, to $706 million in…

[Operator Instructions]. And we will take our first question from Jamie Cook with Credit Suisse.

Hi. Good evening, and I'm speechless once again. I guess Mike and Alan, I'm just trying to get a feel for what has changed dramatically from when you gave guidance in the fourth quarter just the big drivers to raise your guidance above 15 at either end, especially given more in the first quarter you guys generally don't raise in the first quarter?

We didn't think you would let us slide without raising this Jamie.

Why [inaudible] of you, I know you guys have bigger issues. But I am just trying to figure out what's changed or what gives you greater confidence?

Well, I think it's a combination of factors, all very good. Number one, we've had outstanding new award quarters, record backlogs continues to climb, good margin is built into that backlog, our prospect looks stout in front of this, it’s just as robust as ever if not more. And then I would highlight that we're seeing just outstanding performance throughout the corporation. Solid performance driving very good results and we're confident we'll be able to keep that going.

Okay. And then just in the Q, I noticed within the Industrial & Infrastructure sector, you mentioned a sale of a JV, which could impact the second quarter. Was that included in your guidance originally, I guess, is that included in your guidance, and if so how much?

Jamie, there is a small part of that sale we received on an initial cash payment earlier, that was included in the guidance for the quarter. When that sale concludes, we will probably adjust the guidance for the remainder of any kind of income on that, should that sale conclude.

All right. And then Alan, just to play [inaudible], if you look at your guidance the other way, you grew your earnings 60% in the first quarter and if you look at your implied earnings growth for the remaining 9 months of the year and your backed out the tax gain that you had in the fourth quarter, your earnings growth only implies 40%. So while it’s great to raise your guidance that much is it going down in the back remaining 9 months?

It's not, Jamie. I think we are going to have very consistent quarters going forward with hopefully and putting growth on top of those.

All right. Thanks. I will get back in queue.

And we will go now to Andy Kaplowitz with Lehman Brothers.

Hey guys, very nice quarter.

Thank you.

The corporate expense number was a lot lower than we modeled and so I am just wondering is that sort of one of the factors in higher guidance going forward and maybe you talked about foreign expense changes or foreign currency gains, anything else in there that you can highlight?

No, not really. There were a lot of pluses and minuses in corporate expense. The most significant of which, which is also relatively minor was foreign currency gain. So, there is really nothing special to highlight there.

But I guess by going forward, can we use sort of a similar rate as a percent of sales that you did in the quarter?

We are still working at an overall annual corporate G&A of around $200 million, plus or minus $10 million,1 it's usually somewhat back end loaded in the year as we go through the year.

Got you. And then maybe if I can push a little bit more, did you put anything for Savannah River now in your guidance, I know you don't like to talk about specific contracts, but maybe if you could just tell us, if it's having a significant contribution in forward guidance?

Yeah, we are very pleased with the resolution of the Savannah River protest. That clearly [inaudible] that will come on later in the year and it could have a very modest effect for the year, which is reflected in our guidance, which is very, very modest and this is nowhere near the key driver than increasing guidance.

I Understand. Maybe if you could talk about, you mentioned Greater Gabbard, is there any other opportunities in wind energy that you are looking at or is that just sort of a one-timer or do you think long term there is a lot of opportunity there?

As a matter of fact with that award being imminent and being recognized is one of the leaders in the industry. We were getting quite a bit of interest in... from others in terms of going forward with other wind farm projects on the regions we have been a little bit reluctant to go forward, there are too many, and these are just so expensive to develop. And after we have proven ourselves on this first one, I think there was another wave of bids coming up in the UK for future wind farms offshore there and we would expect to participate in that next wave.

Great and Alan, one more question if I may. It seems like you are not... it seems like the overall end-market outlook is still very, very strong. Are you seeing hints of delay that all outside of tower particularly in any of the Oil & Gas markets that you are serve, general customers still sort of pushing the envelope to get these projects out?

No. We are seeing them going forward. We did see some delays last year in '07, as we started hitting some of the escalation that was coming into the market, particularly in commodity prices for steel and other equipment. But those have been rationalized in the projects that we are looking at and they were all moving forward.

Okay thank you. I will get back in queue.

And we will go now to Andrew Obin with Merrill Lynch.

Yes, I guess everybody told you what a great quarter you had, so I'm not going to say that.

Okay. Thank you, Andrew.

Anyhow, but anyway great quarter. Just a question, there was a news item about Alzo refinery and I'm just trying to figure out what is the potential for Fluor in that particular project? Is that $100 million or is it a billion?

Well, we are the program manager for that and also announced that the contract for the utilities and off size portion EPC of that this last year. So it's a significant project for us.

Okay, but okay. Should I be... okay, it can follow it upon.

The major block of that went into backlog for us in 2007.

Got you okay, okay. Just a question on margin progression, particularly as I look on Oil & Gas side, just looking out 12 months to 24 months well margin has to decline, because of more construction can be flat or can be expand a bit?

It's a mixed bag, obviously, the portfolio has got projects in a lot of different stages. But as we move into construction, that tends to depress the margins on those projects somewhat. I think we can say some more in the neighborhood that we are out right now. And I think I said it on the last conference call.

And just a question on the new awards, I mean, they were pretty strong, but at the same time looking back, they were the weakest in couple of quarters. Can we get back to the same levels in 3Q and 4Q, is there some lumpiness, or do you think would hit the peak in terms of new awards?

Our Q4 was the best quarter ever for the corporation. So just coming slightly under that one, I don't feel too bad. This was a very strong quarter at 5.7, that's I think it ranges in our top three if I am not mistaken, top three or four. So I think we are going to see continued strong opportunity for new awards as we go through the year. It's obviously they could be lumpy and we don't forecast… we don’t publish or forecast for those. But I did make the comment and it's absolutely still valid. We expect that the bookings in 2008 will be equal to or greater than what we achieved in 2007.

[inaudible] theory imply that for the remainder of the year, new award should at least match last year, right?

Correct.

Thank you very much. Great quarter.

Thanks.

We will go now to Curtis Woodworth with J.P. Morgan.

Hi good afternoon.

Good afternoon, Curt.

Alan, if you look at the backlog in Oil & Gas that's $20 billion and you have a rate of almost $10 billion in that segment annually, can you comment on the multi-year progression of that backlog, I mean, is it safe to say that you would today have pretty good visibility in that segment at least through mid '09?

That's pretty true.

Okay.

We give the opportunity obviously as we have been official to do a lot of the front-end work and the feed work for some of these major programs. So we get a good line of sight going out anywhere from three to four, five quarters.

And the feed work you are looking at today, I know it's substantial, can you compare the mix of that opportunity versus last year both in terms of end-market and perhaps domestic plus international?

Yeah, I made the comment in previous quarters that we will continue to get great opportunities closing on the... in the downstream side, particularly here in the US for refinery monetizations and new refineries overseas. That is still going to continue through 2008, but the front-end work that we are seeing now is starting to shift more to the upstream side to both transportation projects as well as production onshore and offshore.

Okay. And then are there any margin implications to that?

No. They are pretty similar.

Okay. And just one last question, your appetite for acquisitions, I mean, give you almost have $2 billion and you are experiencing obviously strong secular growth, are there any markets that you want to get bigger in or certain skillsets that you don't have that you would like to acquire?

We are out looking for opportunities for M&A, which we do on a continual basis. We are not going to play market consolidation, any acquisitions we make will be just as you suggest strategic to fill out capabilities in certain markets that we want to grow in, ones that we are looking at are in operations and maintenance, in infrastructure and the nuclear fuel cycle.

Okay. Is that a pretty active part of the strategy right now?

It is.

Yes. Okay. Thank you.

And we go now to Alex Rygiel with FBR.

Thank you and congratulations on a nice quarter.

Thanks Alex.

First, how will Savannah River roll into your backlog?

Savannah River is a government-funded project. We will take that in one-year increments in our third quarter every year.

Great. And on the... in your Gas commentary, you mentioned several very large opportunities later in 2008. Can you be a little bit more specific on your definition of large?

Well, there is a number of them and they kind of going over a fairly broad range of size. Some of them are extremely large. Most of them are in the Middle East, couple in Asia, but I wouldn't want to quote numbers for them Alex, but they are what we would call our mega project category

Great. We have been talking for years about a shortage in engineering staff. Are you starting to see some of your competitors maybe fall off the bidding table because of their maxed out capacity and those that remain are fewer and fewer?

I would say that that has been an advantage for us. We have a fairly large and global staff. We've had the ability to recruit both experienced personnel as well as we have a significant training and orientation programs that bring in entry-level engineers. We've had our largest recruiting year ever in 2007 for college graduates. But there are a lot of companies that have I guess kind of hit the proverbial wall with respect to staffing. We are continuing to increase our staff. We have had dramatic increases over the two years and expect this year to be no different.

And one last question, as it relates to the cash balance, has the Board made any determination as to if you can or cannot deploy capital in a certain period of time for an M&A transaction, if you can't then you will be considering returning that cash to shareholders?

I think returning cash to shareholders in terms of special dividends is not high on our priority list. We are looking at continually modifying our dividend as earnings go up. We review that on a regular basis with the Board. We are looking and we will be instituting stock buyback to offset share creep. But our real goal is to go after acquisitions and to have enough capital and a strong balance sheet to take care of the working capital as our business grows.

Thank you very much.

And we will go now to John Rogers with D. A. Davidson.

Hi, good afternoon and congratulations as well.

Thanks, John.

Unbelievably great growth for you guys. Alan, I was just wanted to follow-up in terms of market concentration now roughly two-thirds of you backlog in the Oil & Gas area, are you sensitive at all that you are overly dependent on a sector, or is that a concern at all?

No, it's not a concern. We continually strive to be the contractor that our plants want to come to regardless of the sector. But we're not a market maker [inaudible]. We like to get to where the buck is going to be. So the fact that we have a significant backlog in Oil & Gas, it's because that market is very strong and we're very strong in that market. So, now we're going to go after business that’s profitable and we had value in our plants in whatever sector we may be in.

Okay. And you talked a little bit about the addition of people in your own expansion, but at this rate of growth, I'm just curious, I mean, do you have to bring in more partners on projects and how are you dealing with that or can you keep up with it?

Well, as a program manager, I am going to allow these major projects, that's what we do is we manage other contractors to do scopes of that work.

Right.

So we don't hesitate the team as we did on Savannah River with good partners to win that work. It's a regular part of our strategy and it's going to be implemented quite often.

Okay. And that list of potential partners, I mean, you are working then to expand it?

It depends on the market, particularly markets that we're looking for rapid growth or to increase our capability we typically will have a larger list of partners.

Okay, great. Thank you.

You bet.

And we will now go to Barry Bannister with Stifel Nicolaus.

When I look back at 2007 there were sticker shock in Oil & Gas and the price increases in Oil & Gas in '08 help to overcome that and so when we look at '09 for power or some of its resistance at Desert Rock and elsewhere should be overcome, but I'm specifically thinking about South Texas project in the article in today's Wall Street journal about nuclear sticker shock. Are you rethinking your strategy being technology, agnostic, given that one of the best ways to reduce cost is to have a partnership such as Shaw with Toshiba?

No we remain committed to that strategy. We have... I think we will have the opportunity to participate a significant number of those plants and I read the article this morning as well. We're doing a number of things with our plans to look how we can take advantage of a number of techniques. Some are on the insurance side and some on the labor side to reduce those costs.

And there was, about three quarters ago, a polysilicon plant that ran over budget and Fluor was just one of several contractors and it was cost plus, but if the issue is likely to be a problem at LDK or do you address those?

Well, LDK was in this quarter's new awards. We put an estimate again in [inaudible] that has escalation in it. And hopefully based on where we are at now we've seen continued escalation, but it's not increasing in rate. So we were pretty confident we've got a budget that we will be able to withstand the market pressures.

And then just lastly, I don't see Fluor that active on simple mega projects in non-G7 world, I don't want to call them developing countries, because some of them had better balance sheets than we do. So is that something that you've just not pursed on the civil engineering side in the developing world or is it just something that you might to need to make an acquisition to become larger?

To date, right now, we are planned mostly on heavy civil projects in Western Europe and in the United States where we get comfortable with the risk profile, the difference in most of the big mega civil projects is they are all done on a lump sum turnkey fashion. And right now from a risk profile, we think it's safer to play that game in Europe and in the United States. And at some point if we get comfortable the risk profile in certain countries we are making a better try.

Okay. That's fine with me, thanks.

[Operator Instruction] And will go now to Graham Mattison with Lazard Capital Markets.

Hi good afternoon guys. Also [inaudible] the quarter. Just want to follow-up on Jamie's question about the guidance outlook for 2008. What's really mainly driving this in terms of sectors with the higher guidance. Is it mostly oil and gas projects that are driving it or is it improving outlook in some of the other sectors that have pushed up the guidance outlook?

Well it is truly across-the-board, but clearly oil and gas has been the major driver with the continually strong new awards and the performance has just been exemplary.

Okay. And then just turning to the Power segment, for the second quarter in a row gross margins grew over 5%. Is this a sustainable level here as going forward?

It is.

All right, great. Thanks very much.

We are going to have Brian Chin with Citi.

Hi. Alan, you'd mentioned briefly about infrastructure acquisitions and that term infrastructure is really, really broad, can you just give a little bit more color on what your thinking are ?

We probably mean it in its broad sense too, but primarily it deals with transportation and transportations forms, which right now for us is primarily road transportation that would also include rail and potentially aviation.

Okay.

And maybe extended some into things that would fall within a couple of our other sectors, which might be transmission and distribution, which would fall within the Power sector. But right now we're looking at the entire broad definition of infrastructure in terms of being able to capture part of the market that deals with continued urbanization where the cities keep getting bigger and bigger and the fact they were leased within Western Europe and the United States. The neglect that is going on over the last number of years in terms of building that infrastructure up and the need to repair it.

Is that the general sense that this is more of a, to partially quote Barry, the developed world humbling infrastructure theme as opposed to developing world?

We can see a plan in both the developing and the underdeveloped world, it's part of the continued process of urbanization. This is a trend that has been going on for a couple of thousand years, so it's a pretty safe bet on our term that whether it's in the developing part of the world or in the developed world, the city is going to get bigger and bigger and the need to support that population mass is going to continue to grow in the same fashion.

Can you comment also on the fixed price for cost reimbursable mix, I know you said it’s 24% fixed price in the backlog right now, some of your competitors have commented that the trends are moving -- seem to be moving a little more towards cost reimbursable, can you comment on that, does that seem right to you, is that what you are seeing out there?

Well yes that's true maybe in the sense of the market zone and it is for us in Oil and Gas, it's been primarily in our reimbursable cost, but the work we do in Infrastructure and in Power is largely lump sum and that's really what represents the bulk of that 24%.

Right, okay and then lastly actually back on that power where are the Gas fire powered opportunities that you are seeing strongest in the US, can you give some general sense of regions are we talking like PJM, are we talking Texas kind of where are you seeing?

It’s -- we are looking at ammonia fairly broad cross section. We can cut some of the Atlantic seaboard in Texas on the West Coast. So it’s pretty much across the country. But the situation is that there was an increase in demand and shrinking reserve margins and the inability to get air permits. The utilities are having to turn to gases the, only viable option they have today to get a plant started.

Right. These are primarily CCGT's or single cycles?

It's a combined cycle.

Great. Thanks a lot.

We are going now to Steven Fisher with UBS.

Hi good afternoon.

Good afternoon, Steve.

The Global services margins were down from a run rate of the last couple of quarters. Just wondering what's driving that, is that just lumpiness and then might that come back to the eight plus percent range?

There was a little bit of a difference in this quarter Steven, from the stand point that a number of the clients that normally have outages and conventional operations and maintenance tax in the first quarter didn't come on in the year as early as they normally do. So, you are seeing well the rest of the business picked up including the equipment renal company. I think it's a just a shift within the mix of the different portions that make up Fluor Global Services and I fully expect for the rest of the quarter that they go back up to what you are used to seeing.

Okay great and then just on the fixed price mix in the area that you mentioned, infrastructure and power. I mean how many projects are we talking is that spread over, can you give us some general sense is it tenth project or is it a 100 projects?

Yeah, it's a large number projects of various sizes. There are few larger projects that Steve mentioned in his comments such as Francisco-Oakland Bay Bridge and there are a number of smaller projects as well across the segments.

The ones I would represent significant risk you could probably count on two hands, I mean the big ones.

Okay. Great. Thanks a lot.

And we will go to Mark Thomas with Simmons & Company.

Good morning guys... or good evening guys.

Good evening.

Just real quick, looking at the Government segment, margins came in at 2.8% versus 1.9% in Q4 with the Bagram and Haiti projects come into a close. You comment on, if we will see margins continue to improve throughout 2008 and if... how Savannah and really LOGCAP IV will effect margins going forward?

Yeah, I think you will see a gradual increase through the rest this year. But you have identified what the real change is going to be, what the effect that you are seeing there is the fact there is just not enough business volume to take care of the group over head. And as Savannah comes on line and later as we pick up things from LOGCAP you will see a big improvement in the margins simply because we have the volume to overcome the overhead in the group.

Okay, when do you expect LOGCAP IV to actually start rolling through?

I think we probably expect to see some task orders to bid on here within about 90 days.

Okay, great thanks guys, good quarter. That’s all I have.

Thank you.

And we are going to Barry Bannister with Stifel Nicolaus.

Just on the LOGCAP IV task orders in which, Fluor, we tend to be interested, some of them are very manpower intensive where you need to have assets on the ground such as fuel and food and laundry. If you profile the kind of task orders that interest Fluor, what are they or what can you say at this point?

The nature of that entire contract is manpower support, so I can’t envision too many of them not being manpower intensive. The ones that we would tend to target would be the ones where we think we had some value-added, which should be maintenance and operations associated with equipment or facility.

Okay that's it. Thanks.

And we'll take a follow-up from Andrew Kaplowitz with Lehman Brothers.

Alan, one quick follow-up, I think in the past you have been good at sort of setting conservative guidance and then beating that guidance. When I see the guidance raise today, 20% guidance raise, I guess I have that same question, do you still think it's conservative? I don't know if you can answer it, but I guess that's what I am trying to figure our here is that I can get to these numbers and maybe even higher, but sort of where are you in progression?

Well. Mike Steuert and I haven’t changed. We are going to give you guidance that we know we are going to make, and we have strong confidence we'll be in that range.

Okay, that's it. Thank you.

And we will take a follow up from Andrew Obin with Merrill Lynch.

Just maybe I missed it, but on your comment on infrastructure acquisitions, when you say infrastructure, do you mean companies that build infrastructure or do you include owning and operating infrastructure assets?

The acquisitions we're looking out right now, they are primarily concentrated on builders of infrastructure.

Would owning and operation assets something that you'd consider down the road or?

Part of the public-private partnership model as you are probably aware tends to bring in a concession trance after requirement. We continue to play in that market, we would fully expect to have to be a partner in the concessions to some extend, like we are today on the 495 Capitol Beltway Project around Washington DC. However, right now it's not part of our strategy for Fluor to be an owner of a lot of assets, it's something that we see doing through the construction period and then post the system that we're building going into revenue of operation, we would look to eventually divest ourselves with that asset. So, we don't see ourselves being a long-term owner on those type of assets.

Thank you very much for clarification.

And with no further questions, I would like to turn the call back to Mr. Boeckmann for any additional or closing remarks.

Thank you operator and my thanks to all of you for participating in our call this evening. As you can tell from our conversation, we are very pleased with our performance today. I am very proud of the continuing strength of our corporation, as it serves the markets and as the momentum that has allowed us to boost our guidance. 2008 is clearly shaping up to be another record setting year for the company and beyond that our future potential looks very positive. We truly appreciate your interest in Fluor and your confidence in our company. Have a good day. Operator: And ladies and gentlemen that does conclude today's conference. Thank you for your participation. You may now disconnect.