Good afternoon and welcome to Fluor Corporation’s third 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 call will be available at approximately 8:30 pm 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 November 13, at the following number; 888-203-1112, the pass code of 4804796 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 third quarter 2008 conference call. With us today 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 would like to refer you to our Safe Harbor note regarding forward-looking statements, which is summarized on slide two. During today’s call on slide presentation we will be making forward-looking statements. 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. You can find a discussion of those factors that might cause expectations to the different and actual results in our 10-K filed on February 29 of 2008 and in almost recent 10-Q filed today on November 6, 2008 With that, I will turn the call over to Alan Boeckmann, Fluor’s Chairman and CEO.

Thanks Ken. Good afternoon ladies and gentlemen and thank you for joining us. Today, we will be review on our financial results for the third quarter of 2008, and will talk about our market outlook particularly in light recent economic development and then discuss our initial EPS guidance for 2009. As you have seen from our earnings release, our third quarter was extremely strong; with all key financial metrics arising shortly from that a year ago. More importantly, our focus on winning the major long-term capital projects with will-funded clients continues to generate significant growth and opportunity for Fluor. I would ask you to turn the slide three. Here I want to provide some highlights of our financial performance in the third quarter. Our revenue rose by 38% to $5.7 billion and that compares with $4.1 billion in the third quarter of 2007; this was driven primarily by significant growth in the oil and gas and power segments. Operating profit for the quarter increased 71% to $324 million and that compares with $190 million a year ago, reflecting solid profit contributions from all five business segments. Operating margins increased to 5.7% and that compares with 4.6% in the third quarter of 2007. Net earnings for the third quarter were a $183 million, as an increase of 95% over $94 million a year ago. The earnings per share effectively doubled to $1.01 per diluted share that compares with $0.51 per diluted share for the same period of last year. Moving to slide four; new project awards of $8.8 billon, completely eclipsed our previous record just last quarter. The third quarter of course included for $3.4 billion award for the BP Whiting Modernization Project in the U.S. and a large gas processing project in Russia along with a $1.3 billion mining project…

Thanks Alan and good afternoon to everyone. First, let me provide you with the brief recap of the results for each operating segment. Please turn to slide nine in the presentation. Fluor’s oil and gas segment reported third quarter revenue of $3.3 billion up 52% from the third quarter of 2007, operating profit rose 84% to $206 million. As Alan mentioned, new awards in the quarter totaled $5.1 billion including a $3.4 billion refinery expansion award for BP in Whiting Indiana, a large gas processing project in Siberia. Ending backlog at September 30, 2008 for oil and gas rose to $22.8 billion, a 39% increase from a year ago. Now, turning to slide ten; Fluor’s Industrial and Infrastructure segment reported revenue of $879 million in the quarter, up 19% over the last year. Operating profit for the third quarter was $28 million compared to $27 million a year ago. Strong operating performance from our Mining and Metals business line was partially offset by a $16 million charge infrastructure relating to a contract claim dispute on the London Connect project. This charge was recognized as a result of reassessments for the remaining time and cost to complete the project and the probability of recovery with certain claim items. Items and projects is about 95% complete and we expect to complete the project and to enter in the final arbitration process during 2009. Industrial and Infrastructure new awards for the quarter were $2.2 billion of which $1.3 billion was very large gold and copper processing project to Latin America and $420 million was for a solar panel manufacturing complex for REC in Singapore. Ending backlog was up 63% to $8.5 billion compared to $5.2 billion a year ago. Revenue for the Government segment was $369 million for the quarter up from $337…

(Operator instructions) We’ll go first to Jamie Cook with Credit Suisse.

Hi, good evening and congratulations.

Thank you, Jamie.

It is a pleasant surprise in this market.

I think we stopped the domino of that

I hope so and I am not going to go there. Okay so, my question relates to the guidance and specific within oil and gas, when I think it how the burn rate on backlog and oil and gas in 2009. I would assume the dollars in oil and gas I am assuming revenues would be up year-over-year just because you are going through more towards the construction. The construction stage, which you mean bigger dollar, so that’s my first question and then second your profit dollars in oil and gas were $200 million and that’s about what you did for the full-year in 2005? Is that a sustainable way on a profit dollar basis? And I think it 2010?

I think you are right; we will be ramping up continued ramp up revenue in oil and gas right, which are the strong bookings we’ve had over in the quarters for the last years. A lot of those projects going into construction, although we have a number of it going to engineers as well, so that is true, we will be ramping up revenue. I made the comment in my prepared remarks, so we think the backlog for oil and gas for 2009 will stay pretty constant and they come up or down quarter-to-quarter, but to say pretty constant. Then to your last question on total earnings; we had a strong margin in oil and gas or any industry chemicals this quarter. I think just it will be, if I don’t think we will be maintaining that level of gross margin. I think it will be just a bit lower than that.

But, on the profit dollar base, is it fair to assume that you are in…

Yes, I don’t the target, I have to go back, not only have that those numbers before I’ll do the map or I think it will be at the ballpark.

Okay and then…

I think there is a chance from – again quarters are lumpy. So, there maybe it some quarters that we will now absolute we maybe do better than that.

Okay and then my last question, just in you made the comment about the backlog within oil and gas and you would assume that stage fairly constant. Given the burn rate you are talking about in the implied revenue that means in 2009 for orders within oil and gas? You are assuming your lease book between at least on the low end that’s assuming revenues are flat $12 billion to $13 billion in new orders within oil and gas, which is pretty amazing in this market? So, I guess what give you the confidence and given what we’re seeing in the market, should we assume that’s more backend loaded just as customers reevaluate the markets and look for maybe to get a better for material or labor cost to go down. I’m just trying to think about, how that process is throughout the year?

Yes, that’s the great question. I have listened to the comments from a number mind over the last week and I agree with all of them. In particularly oil and gas it’s a long-term business. We do a lot of project work and the reaction today’s drop in oil or tomorrow is increased in oil does not drive these projects. So, we’re looking very solid ’09 not just from watching backlog, but what we see in prospects and I think too much is being made of some of the recent delays that we have seen. The fact of matter is that almost every project in our backlog today on downstream oil and gas has had a delay. The Whiting project that we just announced that had almost a one year delay. So, it’s not unusual for given the size and complexities projects and I think people are jumping to conclusions that, oh my god it’s the market and mixed oils down, and I think that’s wrong. I think right now our clients should be in pretty savvy they see commodities coming down, steel, copper and we’ve had a tremendous inflation in the cost of capital goods over the last 18 months to 2 years. There is an opportunity for that to come down and in fact have a positive impact on the projects they get delayed for six months, two year. So, I think there is a lot of dynamics this markets that aren’t necessarily as obviously that conclusions that the people jump to.

So, in terms of that the bookings I mean, is it fair to say its more back half? Or do you think it’s just tough to tell. It could just come at any time throughout the year just I am trying to get an --?

I used a word lumpy because that’s about the best way I can describe it.

Okay

We had a great quarter this quarter, but we had a couple things that broken happened at the end of the quarter rather than going over in the fourth quarter. So, a quarter can change just by a weeks timing on some of these large projects.

Thank you very much and congratulations. I will get back in queue.

Thanks a lot.

We’ll go next to Barry Bannister with Stifel Nicolaus.

Could you talk a little bit about the plans and ultimate disposition of the amazingly large amount of cash that the company is accumulating? The company’s mix of businesses rapidly approaching 70% oil and gas sort of a 1970s average and you got more cash than twice the market cap of the Shaw Group and powers in area where you have not gotten a lot of base load traction including in nuclear. So, are you more in client to sit on the cash, acquire Billiton fill out the business or buyback stock?

Barry, our absolute priority is going to be doing Billiton in key market areas. Right now liquidity is a great opportunity maker. Evaluations have come down, as you just pointed out dramatically. I think there is a great opportunity for us to make some moves that will set the company on a great track for the future. Again I don’t expect any of them to be incredibly large, but I think there will be sizeable and enough to make a difference, as we go forward, both from the strategy standpoint as well as accretion standpoint.

Given, the market caps in this market, though there is a lot of companies you could buy that wouldn’t be incredibly large, that used to be. Let me ask you a question about BP Whiting it is been politically opposed by a manual and Obama, the Kuwait outsource had some impress about, rebate and questioning, financing and I don’t know, but you touched on the delay at Port Arthur, but could you talk a little bit more about those first two?

You talked that the, you broke up just a little bit and Barry you talk about the outsource and --

Well, BP Whiting’s has been opposed in Illinois politically by Obama and a manual, and outsource had some financing issues and we’re still waiting on would River I don’t know if you book that in the quarter, so could you just talk about that and the Bolero delays?

We have believed that both the Whiting project and Alsur we’ll be going forward strongly. There has been uncertainty about them bit in on Whiting, because of just a permit issue. That has they final clear to hurdle on that in the middle of the summer. So, I think that one still steam ahead. Alsur we a lot of the slowdown on that was because of a sighting issue that was finally resolved last quarter and so we’re moving strongly we’ve got up just over in the I mean Kuwait last week. We’re staffing strongly on that project and moving forward.

Thank you.

We’ll go next to Michael Dudas with Jefferies

Good evening everybody.

Hello, Michael

Hi, Mike

I have two questions first Alan or Mike. A year ago at this time would you have anticipated a $36.50 billion backlog at the end of the third quarter, do you think it’s a bit better than you would thought and may was there some acceleration of some projects from either timing or just decisions by your customers this year as opposed to this moving out in the 2009?

The answer is no, I would not have predicted at that level, but actually Mike there is certain component of backlog at all in the whole industry that’s due to inflation of capital cost, but we have done extremely well on hit rate on proposals and prospects. So, we’ve had both of those things working in our favor that has had us go fast our targets we had set and we’re expecting. Michael Dudas – Jefferies: My second question is Alan, maybe some reflection on your recent board appointment to BHP. Can you maybe give a little bit of sense of what you might be seeing or your colleagues? What’s happening in the Pacific Rim? And we have a lot of course every thing has happened quite quickly over the past couple of months, but do you get a sense that it’s bit more of a pause or is that the structural issues that might backup developing economies growth over the intermediate term?

Well, I think clearly there’s been a drop in demand on some of the commodities Mike, and the mining industry is one that reacts much quicker to market cycle than and commodity prices than almost any other segment. So, right now I think it’s more of a pause. I think they expect that emerging economies will continue to growth again, will continue to ramp up demand for commodities, but right now it’s hard to say and it would be hard for us to give a timeframe as to what that looks like. I think you are going to see though, and again I come back to the positive side of that for Fluor as opposed to might BHP Billiton, the Directorship. We’re going to see reductions in the prices of steel of cable of anything that has to do with alloys and that’s a positive bit of information. We’ve been seeing dramatic increases in those over the last couple of years.

I appreciate your thought, thanks Alan.

We’ll take our next question from Andy Kaplowitz with Barclays.

Good evening guys, nice quarter.

Thanks Andy.

Could you talk about, when you said your initial guidance for 2009, I know you guys are usually pretty conservative and so, now you look at this $36 billion in backlog, how much only way do you think you really have? I assume you set disaster, you’ve seen a couple of delays in your projects. So, how much is based on just the run rate of backlog flowing through versus get these new awards that you talk about in 2009?

It’s a good balance, Andy. I think obviously with the backlog we’ve gotten and it gives us a bit more confidence on the number. We have had great bookings and we know they are solid projects. So, and the delays issues while we certainly took that into effect on the once you have heard that’s not uncommon as I mentioned we’d look to our portfolio, we see that on a fairly regular basis. So, it’s a good combination of things. We have given a number that we are confident that we can hit and if there is upside it will unfold during the year and we will update you if the situation becomes more dramatic or difficult we will certainly update that as well, but I don’t expect that.

Great, you had a nice pickup in your Government backlog; I know you talked about bookings Savannah River and LOGCAP, but still a pretty big amount. I think bigger than, I think you had said maybe $300 million or $400 million on Savannah River, when we last talked and so, it seems like that the first task were in on LOGCAP was not that small plus the margins you booked in the quarter were pretty good and so, the question is, how big is LOGCAP and how big could it be for you guys going forward and then in terms of margins are sort of 5% margins sustainable going forward in Government?

Government, I think you are going to see the sustainable range more in the four to four and a half side; LOGCAP is going to be hard to engage. I think we are going to see a good flow of orders as we go forward, because that process has now start, but it is one that you might not see a lot of in backlog because the type of orders we get will be worked up within one or two quarters for all these task quarter. So, that is – it is going to be hard to see and it is going to be more of our transactional run rate type of business model there. On DOE, as you know we booked every third quarter, full-years and only with the next year’s revenue. So, you will see it tail off a bit over the next several quarters as we work off within we will update it again in next third quarter.

And in addition to the normal booking, we also have some transitional work that impacted the Savannah River new awards this quarter.

And Mike, if I could often one second that the hurricane impact on O&M, is that quantifiable, can you talk what that is?

No, we can’t. That impacted at O&M into modest, we would also impacted at oil and gas.

Okay, great. Thank you.

We will next to Curt Woodworth with J.P. Morgan.

Yes, hi good afternoon.

Good evening. Good afternoon, Curt.

I want in terms of the potential projects that you think will be awarded in 2009 oil and gas in order to keep the backlog relatively flat. Can you pin a picture what end markets are those and you already have seed work for some of those projects?

I hope yes. First of all Curt, normally we do this, so let me just comment you on your report, which you gave earlier in the week. I thought it was really well done. A couple of people out there have talked about the disparity in pricing today versus our earnings and I thought you describe it very well.

I appreciate it.

We do in fact, the answer is yes. We have visibility into a lot of those prospects because we’re doing the field work and it gives us not just a clear shot of EPC award, but it gives us a better understanding of the business model, timing and the relative size of these projects. So, our outlook looking at prospects that they include prospects for ’09, this may sounded pretty strong view of them.

Okay and another question just regarding the ’09 guidance. If you look at the guidance that you said last year at this time for this year it was around, I think 255 a share; so you almost beat that by a dollar. Given this kind of new claim that we’re in and I guess what kinds of the pinch points around that number are and I guess more big picture thinking what would have to happen either to oil prices or potentially the global economy for you to start seeing more substantial investment changes by your customer base?

Well, to your first question, you are right our original guidance for ’08 was a mid-point 255. Number of things happened, first of all we had an outstanding award in every quarter in the year and that really give us a whole lot more earnings power and revenue in’08 than what we’ve had originally forecast. We also because of growth got a tremendous benefit on leverage, on our overheads and we had also very strong performance that allowed us to capture the earnings in those projects. So, we had a lot of things that went really well and you planned for those, but a couple of things what better than we expected. Let me, ask you to repeat the second part of your question.

Well, even despite what’s going on an oil price market in the global economies feels like the most part, spending it’s going to hold up relatively well. So, I guess the question would be what would need to happen and this is probably hard to answer, what would need to happen for you to see more significant either cancellations, delays among your customer base? Would it be prolong inter-period at $50 oil? Or I mean how are you kind of thinking about the potential outcome of where we are headed?

It would the more dramatic and more sustained decline than what we’ve seen for that to occur, and again it depends on which market you are talking about upstream varies different than downstream is different than the tar sands and it is different than GTL. So, I think it would take a much more sustain in long-term, downturn in that and we will take other issues maybe political or geopolitical maybe regulatory things like that we would drive it down.

Great. Thank you very much.

We will take our next question from Graham Mattison with Lazard Capital.

Hi, good evening guys and congratulations on the quarter.

. :

Thanks.

Just have following up on, with these projects would have been shift in terms of the refineries. How does that impact the people you have onsite there? Do you get standby rates? Are you able to repay, put them into different projects?

In both cases we really had gotten into the construction yet, we just have started. So, we have really had to ramped up, we will maintain staff on those and I made the comment that in fact we haven’t stopped, we have just slowdown. We have a plenty of opportunities to place people in this market. So, if we have to take one or two people offer or some portion of them, we have no problem put them in one of the projects and that was part of the rational for our clients that the construction demand in that area for both in the up or mid Northeast and in the Southwest is very, very strong.

Great and then looking at the power markets, I know you have mentioned that most new awards are probably becoming natural gas. So, do you seen any slowdown in terms of the awards there just given the economic outlook in the potential for slowing economic growth in the U.S. or I think still moving ahead as they were two or three months ago.

I think that the base generation and even some peaking gas part still more forward we had - I think we will probably see some slowdowns in the - what I call the industrially connected power projects those at our met to provide additional power for industrial plants or they are directly connected? That I one I think, we may see some slowdown, but we still are getting a good, strong look at a number of gas projects that are sales force negotiated during the front ends and we will bring at least one of those at the more into backlog in Q4.

Great and just a final question if I could have, previous questions you talked about a power working plant when potentially awards out there and you put to in this quarter. Do you still that in the potential area for growth or is that market sort of flatten up?

I still think it is a good market for growth. We have got a very strong position in that market. We are looking at the number of potential new projects literally all over the globe. So, I think it will stay very strong.

So they haven’t pushback in terms of their expansions plans and no ones change their outlook there for the customer side?

Recently, no.

I agree. Thank you very much. I appreciate it.

We will go next to John Rogers with Davidson.

Hi, congratulations as well.

Thanks, John.

First of all just in terms of the, your fourth quarter comments, sequentially or obviously ’09 has been great, but sequentially it down. Is there anything special about that happening in the fourth quarter?

Sequentially it’s down on that.

No, I didn’t sorry ‘09 looks great, but the guidance you have given for the full-year wouldn’t by little over fourth quarter I just wanted to understand if there is anything there?

Nothing, to that couldn’t point you know.

Okay and then in terms of just back on the power market for a second. The gas projects that you are looking at. Are there terms similar to what you have seen in the last cycle or you going able do? How was the market development or is that the utility terms out there or it similar to last cycle?

That every one of the projects we have got is negotiated. So, it is extremely somewhere in the process we using to develop the projects and the negotiation in the contract terms we’re getting.

Okay, great thank you.

(Operator instructions) We’ll take our follow-up question from Barry Bannister with Stifel Nicolaus

Your incremental margin in oil and gas was about 8.5% and than it looks like you are pushing that 6% number of full-year run rate, which we have always hope for. Are you getting closer to that is the goal in terms of the margin mix in 2009 or would you describe the mix is different more revenue driven?

I think it’s going to be more revenue driven as we go for because, of the construction nature that continues to grow in our run rate. I would really look more for a mid five - 5 to 5.5 rages as we go forward.

Did the greater Gabbard wind farm partial interest recently changed hands at the value less than the implied value of the total contract, to build it?

How much was that booking?

We have lost you, Barry.

How much was that booking?

I’m sorry you really cutout, we just understood a lot of couple last part your sense could you. Could I ask you to repeat?

Sure, how much was the greater Gabbard booking?

I think it was $1.8 billion for us.

Thank you.

We’ll go next to Richard Paget with Morgan Joseph.

You talked about some material deflation potentially benefiting you guys. How the labor market is is still pretty tight for your end markets and might you seen some more available people in the near future?

It’s still tight and again it’s very regionally driven just the tighten is today as more on the construction side then on the engineering side.

Okay thanks.

This does conclude the question-and-answer portion of the call. At this time I would like to the turn the conference back over to Mr. Alan Boeckmann. Please go ahead.

Thank you, operator and then certainly thanks to all of you for participating on our call this evening. As I said these are clearly uncertain times, but I really believe that given the strength of our current backlog and our third quarter results and you combined that with our visibility into 2009. We are confident that are in market diversely will continue to asset, which greatly appreciate your interest in Fluor and your confidence in our company. Have a good day.

This does conclude today’s conference. Thank you for participating. You may disconnect.