Good afternoon everyone, and welcome to Fluor Corporation's Second Quarter Conference Call. Today's 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 PM Eastern Time today, accessible on Fluor's website at www.fluor.com. A web replay will be available for 30 days. A telephone replay will also be available through 8:30 PM Eastern Time on August 18th at the following phone number; 888-203-1112 and the pass code 7006477 will be required. At this time for opening remarks, I'd like to turn the conference over to Ken Lockwood, Vice President of Investor Relations. Please go ahead, Mr. Lockwood.

Thank you. Welcome to Fluor's second quarter 2008 conference call. With us today on the line are Alan Boeckmann, Fluor's Chairman and Chief Executive Officer; and Mike Stuart, Fluor's Chief Financial Officer. Our earnings announcement was released this afternoon after the market closed and our 10-Q was also filed today. We have posted a slide presentation on our website, which Alan and Mike will reference during their prepared remarks. Before getting started, I'd like to read our cautionary statement on slide 2. 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 and information concerning these 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 and which is available online or upon request. The information in this conference call related to 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. Also during this call, we will discuss certain non-GAAP financial measures. Reconciliations of these amounts with the comparable GAAP measures are reflected in our earnings release and will be posted on our website at investor.fluor.com. And finally, just to remind everyone, I also want to point out that all earnings per share figures in today's report and conference call reflect the 2-for-1 stock split that was effective on July 16th. With that, I'll now turn the call over to Alan Boeckmann, Fluor's Chairman and CEO.

Well, good afternoon everybody and I would like to thank you for joining us on this call. Today, we will be reviewing our results for the second quarter, our market outlook and we will be discussing our guidance for 2008, which we have increased this quarter. As you've seen from our release, our second quarter was very strong with revenues, earnings, cash, new awards and backlog; all increasing substantially from about a year ago. Most importantly, we are well positioned and we remain confident that strong demand in our key markets in the U.S. and around the world will continue to drive substantial growth for our company. As you turn to slide 3, I'd like to provide some highlights of our financial performance for this quarter. Our net earnings rose 119% to $209 million. That represents $1.13 per diluted share, and that compares with $96 million or $0.53 per diluted share for the same period last year. Operating profit for the quarter more than doubled to $392 million compared with $187 million in the second quarter of 2007. All business segments contributed to this positive result by posting solid growth and profit over the last year. Second quarter results included a pre-tax gain of $79 million, translated into $0.26 per diluted share from the sale of our joint venture interest in the Greater Gabbard offshore wind farm project. Details of this transaction will be released in May. Our operating margin rose to 6.8% and that was up from 4.4% a year ago, reflecting improvement in all segments, and of course the Greater Gabbard equity sale. Revenue rose by 37% to $5.8 billion, up from $4.2 billion in the second quarter of 2007, driven primarily by significant growth in the oil, gas, and power segments. Moving to slide 4, we posted…

Thanks Alan and good afternoon to everyone. First, let me provide you with a brief recap of results for each of our operating segments. Please turn to slide 8 of our presentation. Fluor's Oil & Gas segment reported second quarter revenue of $3.3 billion, up 56% from the second quarter of 2007. Operating profit grew 68% to $169 million. New awards in the second quarter totaled $3 billion including several refinery upgrade projects in United States and Eastern Europe. Ending backlog at June 30, 2008 for oil and gas rose to $20.9 billion, which represents a 49% increase from a year ago. Moving on to slide 9, Fluor's Industrial Infrastructure segment reported revenue of $912 million for the quarter, up 4% over last year. Operating profit for the second quarter was $121 million, up from $23 million a year ago. The strong operating performance was driven by mining and metals and progress on major infrastructure projects as well as the Greater Gabbard equity sale. New awards for the quarter were $2.4 billion, of which $1.8 billion was for the Greater Gabbard project. Ending backlog was up 25% to $7.1 billion compared with $5.7 billion a year ago. Revenue for the Government segment was $300 million for the quarter. This compares with $325 million a year ago. Operating profit was $11 million, an increase of...an increase from $9 million a year ago. Second quarter new awards totaled $87 million and ending backlog was $316 million. Now turning to slide 10, the Global Services segment reported a 16% increase in revenue, to $696 million. Operating profit for the segment grew by 38%... 37% to $66 million. This is a result of strong growth from both the operations and maintenance and the equipment services business lines. For the quarter, new awards were $673…

Thank you. [Operator Instructions]. We'll go first to Jamie Cook with Credit Suisse.

Hi, good evening and congratulations. I guess, Alan, I have to ask you about the guidance. I don't want to do it myself, but I've covered you guys for quite some period in time and I have never seen you raise guidance so much, so early in the year. So, I am just trying to get a feel for where is the one particular segment that continues to perform better than your expectations, is it older problem projects rolling off, just where do you view in 2008 so far, where is the upside I guess the price coming from relative to your expectations?

Jamie, I would have to say it's occurring in quite a number of areas. First of all, our new awards have been extremely strong as you can see. Also every segment is performing well. We literally don't have a problem project when we look around and see performance that can go down from drainage on a project. We have also a number of projects that are moving quickly through the engineering phase, to construction. Oil & gas revenues have probably been the one that have been the most particular strong if I have to look at any one market and say that it is strong beyond our expectations. But they've all done very well. Our margins remain strong. We've increased both those in I&I and in Global Services, and I would also say, actually we're seeing very strong overhead leverage in all of our groups, with increased revenue, and also at corporate. So, it's all of those combined that's had us perform in this as well as we have. The moment, we raised guidance last quarter you all accused Mike and I are not being conservative any more. So maybe that will put up your request.

Okay. I guess just my follow-up question that the margin in the global services business were 9.5%, I've never seen that business get that type of margin. Is that something... was there anything unusual in the quarter, or is that what type of run ratio should we think about on a go forward basis for that business?

Clearly that's very high, it's one of the best quarters from a margin standpoint, Global Services we had. So, I wouldn't forecast that as a run rate. I think it depends on the volume of work and type of work we're doing in here the quarter. I would say ongoing from quarters out, it won't be quite as strong. But I think we are growing over the normal trend line though in Global Services by selectivity and strong performance.

And then just last, can you just sort of give us an update on the power side of the business? Can you just give us an update on what you think, I think last time you said maybe we get about four gas-fired power plants within the next 3, 6 to 12 months, how you say that shaping up in over the longer term on the next 12 to 18 months? Do you see gas or renewables as a bigger opportunity for Fluor specifically?

Well, we do... it's right now very unlikely we'll get a coal plant in this year. I think Desert Rock is maybe an important step forward, but I think that will translate into an award if it does come in the probably the first quarter. In the mean time that we're seeing a tremendous number of increase in front end studies being done on gas-fired plants. In our prepared comments, I think that we said we would... we expect to book two, naturally book two into full backlog this year. There will be many others that we would be working on and probably translate into a full award as we get into '09.

All right, thanks. I will get back in queue, congratulations.

Thank you.

We'll go next to Andrew Kaplowitz with Lehman Brothers.

I have been called worse, how are you doing guys?

They normally miss my name out, Andy.

Nice quarter. Alan, could you talk about visibility around awards, like if you look at now versus let's say six months ago and 12 months ago, it almost seems like you are telling us that you have better visibility now going forward than you did six months ago or 12 months ago, am I reading that correctly?

No, I think we do. We've always had I think probably very good visibility compared to a lot of the people on our space because of the amount of front-end work we do. I think it's actually improved because more of our businesses are getting under our tremendous amount of front end efforts and we've gone through a lot of the issues of escalation of the caused delays in our project. So, we've got a pretty good view particularly over the next six months, I would say, I won't say that entirely accurate but we've got a pretty good fix on it.

Do you think, I mean if you look at the FEEDS now versus the FEEDS a year ago, would you say that your FEED volume is higher now?

I think it's pretty much the same Andy, but we're getting... we're coming into the... I would say the final stage on a number of very large ones. But we are replenishing those with things that are coming up. But in terms of the next six months, I think we've got a pretty good line of sight on what we think is going to come into backlog.

And Alan, I know it's early, but can you comment on 2009 in terms of backlog? I mean do you think it's reasonable to believe that we can grow a backlog off of what is going to be a pretty high base it looks like at the end of this year? What are you thinking about that so far?

2008, I said was going to continue to be a growth... a year of growth in backlog. I expect that we will be able to grow backlog in '09 in at least the first couple of quarters, and that's again just based on visibility. It's hard to see within a clarity beyond a year from now though Andy, and all I can say is the trends and the dynamics that are in front of us do look good.

Got you. And just one final question on this line, obviously, you've seen what the stocks have been doing lately and do you think that just sort of the market doing what it's doing and have you talked to any customers in the near term about sort of the reaction to what's going on here in the stock market and I just think maybe we're making a mountain out of a molehill, but I am sure your customers sort of watch what's going on with the oil prices and what have you?

We... the whole sector is moved down with oil over the last month to six weeks, which it's amazing because oil is still at a price that is significantly more than what I would need warranty investments in the projects we are all looking at. So I think if there is if anything that the market works out today represents a great opportunity for the overall... for the whole segment as oil prices are still at a very strong level to justify the capital programs that our clients have.

And you don't see any sort of more uncertainty on the customers' part. I mean they all have the sort of five-year view on oil prices and that sort of how they are basing a lot of deals?

You're exactly right and it is significantly lower than today's market price.

Okay. Thank you, I will get back in queue.

We'll go next to Michael Dudas with Jefferies.

Good morning everyone, afternoon everybody rather.

Hi, Michael.

Good afternoon, Mike.

On the infrastructure and I&I front, taking out the wind project, looking at the rate of new order growth, maybe that's by the most overall sensitive to economic supply demand conditions. Could you maybe elaborate a little bit more what you are seeing in a broad sense, in the two areas that you see quite positive mining and infrastructure and maybe some of the other areas? Do you see it's maybe confirming some of the fears in the marketplace about global economic activity slowing down?

Yes, Michael, you're absolutely right. The I&I Group for the last maybe two years, really a year and half to two years, it's really been all about mining and infrastructure. We would have very, very... even though we had a good award this quarter on the manufacturing and life sciences area, the consumer product side of that and even the pharmaceutical biotech side has been relatively flat. And that I think that a lot of that has do certainly with the economy. The mining side though has been extremely strong and even though we really didn't get any significant awards in this particular quarter in mining, they really are lined up for the next several quarters. We've got some very strong prospects there.

And maybe you want the consolidation maybe happens or doesn't happen in the mining sector that might unlock some of these projects going forward?

I think it... there's probably a bit of uncertainty now because of the potential M&A activity there. But if that occurs, it's hard to say the effect that it'll have on it. It could remove that uncertainty, it also could dry some rationalization but we'll wait and see.

Mike, could you share with us possibly what of the $2.4 billion in cash in the balance sheet, what is in essence shareholder cash and revisit your thoughts on allocation and maybe the market opportunities for niche acquisitions or capital balance sheet reallocation?

Well, Mike our number one priority continues to be acquisitions, niche type acquisition. We are looking at a number of those. We have for quite sometime we'll continue to focus on niche acquisitions and perhaps the markets... the current market environment will give us more opportunities going forward there. And that is really our number one focus. We did adjust our share repurchase plan with the stock split and we'll be looking at share repurchases as well as we go throughout the rest of 2008 and 2009. Alan, I don't know if you want to really add anything to that?

Mike, what would you say is our cash balance if you take out the client advances, I think that was one question?

Right. If you look at cash growth, it's been in part financed by client advances and part just by sound operating results. We have client advances that represent about $1.5 billion of our cash. So we really have roughly $1 billion of what I will call free cash above our level of client advances at this stage, Mike.

Thank you for that, I appreciate. Thank you, gentlemen.

You bet.

We'll go next to Curt Woodworth with J.P. Morgan.

Yes, hi good afternoon.

Hi Curt.

Alan, if you look at the oil and gas revenue this quarter of $3.3 billion, that's a pretty big step function change from last quarter. Do you feel that, that type of burn rate or revenue run rate is going to be fair, looking out at the last two quarters of the year?

I think it is for the next quarter or two, Curt. We are into heavy procurement, heavy client finish material section right now of the projects that we have been booking in oil and gas. So, I think it will stay pretty much at this level, maybe even go up just a touch over the next quarter or two.

Okay. And then in terms of your comment on the downstream booking opportunity for the back half of the year, can you give us a sense of the size of those projects and also right now, what percent of your oil and gas backlog would be downstream?

Fairly dramatic part of that would be downstream at this point in time, I would say, way more than half, it's probably in the three quarters level. But the... as we go forward in this year, there is one particularly very large one, it will be looking at booking and there is some number of them of that would add up to, fairly significant projects. Plus we have a couple that are outside the U.S. that would from a downstream standpoint that will be coming into next couple of quarters.

Okay. And then in terms of globally what you are seeing in the E&C market, I mean how would you characterize either engineering or construction, labor capacity for the market? I know you said you have I don't think any near term capacity issues before, just kind of give us an update on that and if you expect your win rate to be affected by going foreword?

The limitations that are out there from a total industry standpoint, certainly the professional side, the home office, engineering and procurement side has been a challenge for all of us. I think the industry has been able to manage that. The more specific problem is going to occur in particular regions for individual projects. Middle East is going to be a challenge, I think Australia is going to be a challenge, Western Canada those are the areas that where construction labor are very tight. Having said that, every... all of us in the industry are focusing on that, we see the prospects of this, we are working with both the governments and locals clients and industry to do training. But it is going to be a challenge. I don't foresee that it will dampen our opportunity to do projects. We have always been even over the last year, year and a half, been fairly selective based on what we can resource.

Great. And just one final question, if I may, on the wind market do you see many opportunities similar to the size of the UK project globally and are you focused on any U.S. projects right now?

Well clearly, that was a very large project. It's the largest one we are looking at internationally. And wind projects itself or us to be focused on, it needs to be a large project that requires our expertise for the logistics and the size and the planning and the financial strength. We are looking at a couple in U.S. And I think hopefully will be at least participating in one as the year as... this next year unfolds.

Great, thank you very much.

We'll go next to Alex Rygiel.

Thank you. And a follow-up on that last question as it relates to wind opportunities in the U.S. Are they solely offshore opportunities that you are looking at or are you also looking at on land opportunities?

No we are looking at on land opportunities as well.

Great. And does that also include solar?

It does, but we've been really focused on the... what I call the downstream side of solar. To me, that's where the real opportunity lies because the plants that are necessary to make the product to create a solar cell are a lot more complex, lot more capital intensive than actual solar farm would be. And so that's what we're focused to our chemicals businesses producing the polysilicon that goes into those cells

Sure. That's helpful. As it relates to nuclear, could you talk a little bit about the timing of maybe when we might hear additional opportunities out of domestically or internationally for Fluor?

Well,I think, it's kind of a mixed set here. We are focusing on some U.S. opportunities. We are... I think everybody saw the announcement in the Middle East for the Emirates. We are going to be competing for that. That's a rather dramatic and significant program. So, I think there is... that market continues to unfold. I would just remind everybody that, that market in terms of its actual revenue generation is still several years away until our licenses are valid.

Of course. And lastly for Mike, is there anything you could do to limit the creeping tax rate?

Well, we are focused very aggressively on that. We had a couple of unusual items this quarter, but I think overall our 37% to 38% is probably going to be the range we're going to see for some time.

Excellent. Thank you very much.

We'll go next to Graham Mattison with Lazard Capital Markets.

Hi good afternoon guys congratulations on the quarter.

Thank you, Graham.

Thanks.

Question on the polysilicon plant, I mean in the recent past you guys have gotten a number of awards there. Do you still see the opportunity for some significant polysilicon plants out there?

We do. Yes, we sure do. We've got a major market share there and it's a market that is a quick time to market issue is very imperative for these clients and we're able to offer that though I really think we have the inside track on that market we continue to... we hoped in trying to tend to stay there.

And you say that you potentially this later part of this year or is it more of a 2009?

I think we still have some award during this year, but I think it will go on definitely and certainly into '09.

That will be great. And then just turning to I&I, if you back out the wind gains, is that margin that you have sort of 4.5% about a good run rate to go forward with?

Yes, I would think so.

And there is nothing sort of one-time or unusual there?

No, other than the Gabbard, there was no, nothing unusual in that. We did have if you look at our 10-Q, we did make a modification in our claims status on the connect project.

Got you. Okay great. I will join back in queue. Thank you very much.

[Operator Instructions]. We will go next to Andrew Obin with Merrill Lynch.

Hi, yes good afternoon and congratulations. Just a question about pass-through costs, and how I should be thinking about it. What's the margin on pass-through costs blended compared to your shall we call it, core margin? Your... are margin on your pass-through costs?

We do. In some projects, we do not, but in most project there is some margin on it as we get a margin on the total installed cost. But it is lower then the margin which is directly conducted by Fluor.

Well, try to thinking that as just a nominal fee or is it one-time?

It'scompared to the margin that we get on what we conduct is a fair amount.

And then just another question, how should I we thinking about the impact of inflation and given the fact that we do have stuff index in the backlog on a year-over-year backlog growth, could you quantify the impact of inflationary pressure on backlog growth? What percent of backlog growth would you attribute to just inflation?

Well it's certainly, it certainly does have an effect as projects increase and the cost to execute both from escalation and material and labor that does find its way into our backlog. In some cases, it's the project adjustment on the already booked projects and it certainly then is represented in a new award based on the estimates that are inducted for that proposal. It's hard to say what the percentage would be in the backlog. You would have to take a reference point and go back and look at the escalation for each of the component parts of that project. But I'd certainly say that it does have an effect.

Well, is there just a way to think about it? Is it 5 percentage points of total growth, kind of just to get to a ballpark where you guys just can calculate?

Gosh, it would be hard for me to give you a guesstimate number, if I can give you one.

Now to end, just a final question. As I am thinking about mix of FEED and construction in your backlog and I apologize if you've addressed it already. Has there been a dramatic shift as we transition on the cycle from FEED into construction or is it more of a gradual shift?

It's gradual. We still continue definitely to get FEED opportunities and are working on those in a number of areas. As I've mentioned, I think in the last couple of calls, our FEEDS are tending to be... to come up with a different mix. We're doing much less U.S. downstream now. Most of those have come into backlog; there are still a few out there that we will be booking in the last part of '08 and early '09. The FEEDS now for downstream are more international and they are also both U.S. and international more upstream.

And just a... what's the mix of FEED and construction today versus a year ago?

I would have to say that the percentage for construction has gotten higher, simply because of the number of projects that have moved into EPC and into our backlog. And then we've been able to move on into the field in those. So, a lot of those have kicked into our revenue generation now and as a result, simply because they are so large, they tend to have a reduction effect on the percentage of FEED work.

But could you quantify it?

We're still working on a significant amount of FEED work that will allow us to grow backlogs.

But could you quantity it or --?

I just again don't have that data here.

Well congratulations, thank you very much.

Well, thank you.

Next to Brian Chin with Citigroup.

Hi just a quick clarification here. In the slides, the EPS guidance said to a range of $3.55 to $3.70. I think in your comments and on the press release, it says $3.65 to $3.80. I just want to make sure I have the right numbers?

, this is Ken Lockwood. Yes, we've discovered that that went out with the wrong number, it's $3.65 to $3.80.

Okay great. And then also on the Summerfield loss, can you comment on what happened there and is there any takeaway with regards to future UK nuclear decomp projects?

Well we are... we were obviously disappointed by that decision. We had worked on that for sometime. We are currently working on other remediation opportunities, not just in the UK but certainly in the UK there are still others. We expect that it will additional opportunities at Summerfield. So it's not a... it's a significant market opportunity for us. We have a very strong position in it. We are as I mentioned earlier we are still bidding for the second phase of Savannah River and our opportunities coming up in this next few years and if fortunate, then you all come out for DOE. So we are still focused on that industry.

Yes. Are there any takeaway reasons as to what can be learnt from the [indiscernible] loss that can be applied to any other projects or how should --?

Let me just state that the answer is yes, but I wouldn't want to state those on the public call. We have a.... we obviously are going to continuing to complete there. So, we would like to keep our strategy to our cost progress.

Fair enough. Thanks.

Next to Barry Bannister with Stifel Nicolaus

Hi guys. It's Robert Connors and Barry Bannister on conference. Also when I look at this I&I margins and the... was a very strong force 4.6% the strongest since... quarterly margins since I believe in 2001. Now I was wondering if mining might be taken or getting some traction, and pricing is improving in that market or what would you mainly attribute it to?

Couple of things. The answer is yes to you first comment. I think we are getting some traction in mining. But we also are getting couple of the projects that we booked in last year and have been in the infrastructure are now picking into full revenue generation at good margins. As I commented earlier on the earlier question, I think that's a pretty good number going forward.

And Alan, one of my question is the $3.65 to $3.80 is that with $0.26 included?

It is.

Okay. And you are entering the Northwest shelf of Australia on the LNG liquefaction side in a JV structure. Is that going to be your global approach?

It is if it for total responsibility, Barry. As you know, we don't do the coal box side of LNG.

Right. And then on BP Whiting that refinery job was held up on some environmental issues. But I haven't heard anything about it in a long time, could you give us an update?

Well, our client put out an announcement here recently on that and it looks like they are definitely moving forward now. My anticipation is we will be booking at... it's hard to say which quarter, but it will be in 2008.

And can you say whether that was the big refining job that you though might fall this year, since you said it was domestic?

It is.

Okay. And that is it for me. I'll follow up later with some power questions.

All right, thank you.

Thanks.

[Operator Instructions]. We will go next to Steven Fisher with UBS.

Hi, good afternoon. I wonder if you just comment on your fixed price exposure the 26%. Alan, you said you don't have any problem projects in there. Could you just discuss how much lump sum turnkey dollars you have in the backlog, and what actions you've taken to kind of mitigate any of the typical lump sum turnkey risks?

Well, we continue to strengthen our risk program as we go through and plow some of the painful lessons learnt back into it. What we've been able to do is on the projects that we booked into backlog over the last year or year and half that are characterized as lump sum. In a lot of respects, they're not. We've been able to take some of the more riskier elements out of that, where we couldn't really provide a mitigation plan that's satisfied us, and we've been able to take them outside of the contract and index them, either through an escalation clause or some other thing that turned them into more reimbursable characteristic. They still get listed as lump sum in our backlog, but quite a few of the projects that we have booked have that in there. The other thing is in the selection process we go through at our lump sum bids, we have been very careful to really go into markets where we have a competitive slate that we know we have an advantage and we know we have value to bring to that. So very, very... I think the backlog we have today is probably from a quality standpoint; the strongest that that corporation has ever have.

Okay, great. And then just a clarification, did you say the booking for Savannah River was going to be about $300 million?

That's correct and that will be a third quarter award. We book our governmental DOE contracts every third quarter, and all booked one year in advance.

Okay great, thanks a lot.

We'll go next to John Rogers with D.A. Davidson. John Rogers - D.A. Davidson & Company: Hi good afternoon. Congratulations as well.

Hi John. John Rogers - D.A. Davidson & Company: A lot of the questions were answered, but Alan, if you look at acquisitions out there are there any particular sectors that you could comment on the, that you're not involved in that you'd like to add, or is it just a question expanding your reach where you are now?

Well, we've said for sometime that there is a couple areas that definitely fit our strategic intent. One is we'd really like to grow our infrastructure business. It's been a very strong business for us. But it's been one that we'd like to scale up much more significantly, given the opportunities that we see globally. So an acquisition in that area is one we would put as a fairly high priority. Another one is just in the operations that make... such just also a very fractured business globally, but one that's been very good for us. And so we're looking at opportunities to acquire there on a regional basis or a client set basis. The other areas are in the nuclear side both, in any part of the nuclear cycle interests us, whether it be in the fuels side, the power side or the remediation side. John Rogers - D.A. Davidson & Company: Okay, thank you.

We'll go to Mark Thomas with Simmons & Company Mark Thomas - Simmons & Company: Good afternoon, guys.

Hi Mark.

Hello Mark. Mark Thomas - Simmons & Company: Alan, you talked on the Clean Air Interstate Rule and how it might affect, I guess, future scrubber work. Could you quantify how much of your backlog includes work that could be impacted by this rule?

Well, I think if I just looked at our current backlog, we've got a number of projects in our backlog and those don't appear to be impacted by it at all. The impact it would have us on future opportunities if that ruling stands and isn't challenged, I think it will slowdown the scrubber opportunities across the industry. Mark Thomas - Simmons & Company: Why would it not affect your current backlog, is that because those projects are already I guess almost completed?

The monies have been committed for those and on an incremental basis they still make sense. Mark Thomas - Simmons & Company: Okay, all right and that's all I got. Thanks guys, great quarter.

And our last question will be from Alex Rygiel with FBR.

Thank you. Just a follow-up, when you analyze your change in backlogs try to get to or quantify the year-over-year change in rising material inflation. It actually appears as if material inflation is softening within your backlog, is that the case?

You know I think it has come down somewhat. I mean we're still seeing inflation. But the last quarter inflation in last two quarter was not as strong as we've seen a year ago. That could change. We've seen some changes in iron ore costs globally that will I think will find its way into pricing in a number of areas and commodities. So we haven't seen the end of it, but you're right. It's moderated over the last two quarters.

Thank you.

At this time, I would like to turn the conference over to Mr. Alan Boeckmann for any additional or closing remarks.

Thank you, operator. And Mike and I thank all of you for participating on our call today. As you can see from our strong results and our confidence in our outlook going forward, 2008 is rapidly shaping up as another record year for Fluor. Our diversification in terms of the industries and geographies that we serve really provide us with substantial opportunity across a number of markets. We greatly appreciate your interest in Fluor and your confidence in our company. Have a good day.

Ladies and gentlemen, this does conclude today's teleconference. We appreciate your participation. You may disconnect your phone lines at this time.