Key questions from the fourth quarter earnings call conducted by McDermott International on February 28, 2008.

Andy Kaplowitz (Lehman Brothers): The Power had a good quarter. You mentioned already that parts and service have relatively higher margins; nuclear steam generators also have high margins. How sustainable is margins that are closer to what we have this quarter?

Bruce W. Wilkinson: Looking back at the year, we achieved about 9.5% operating margin. That did include a significant number from terminated project that we referred to back in the second quarter. If I take that out, you are 8% or just under. That is a good look back. We were committed to improving margins. It is a game of inches. When we combine with B&W operations under a singular management, we began that effort, I think we are making good progress. The next several years Cambridge Energy and others that we follow are projecting a strong backdrop for basically parts and service, whether it is nuclear or fossil. We are well positioned in fossil and we are pulling out the staffs to get ourselves positioned in the lower 48 for nuclear service outage work as we already are in Canada. I do not want to talk you into 10% to happen in the future necessarily, but I think that we are going to have a secular term towards more of the traditional environmental, more service in parts, a few bigger boiler projects. If we execute well across that and we continue to reduce our cost through the singular operation we are hoping to crawl up to the higher end of the range.

Andy Kaplowitz (Lehman Brothers): You talked about your Chinese JV. You are getting more work over there to cede the Asian market. Is that a fair assessment?

Bruce W. Wilkinson: The Chinese JV greatest value will be when the U.S. market gets going post greenhouse gas legislation because we think it is the low cost producing facility anywhere and since we have not built a lot of coal plants in this country, we have not only been building a lot there we have advanced our technology and it is where we felt the biggest and the most advanced supercritical units. It is more than just projects, these are projects in which we have learnt an extraordinary amount about performance of plants. In the mean time, the Chinese market is on a roll. We also export out of China through Japanese trading companies and others have sold some units that are destined for Indonesia, some for India. What we are thinking about longer term is how to capture greater value of that beyond just equity income and royalty. We consider ways using that ramping other services around it more like we do in this country for the Asian market. It is China, but we think longer term actually India could be as good or better a market for us than even China. We have been traditionally more heavily domestic in our focus in the traditional boiler work. You will see a shifting more to Asia and I emphasize in the future.

Andy Kaplowitz (Lehman Brothers): What is going on behind the scenes with you and some of the partners you have on the new generation side in the nuclear market and when could you get significant work on the new generation side?

Bruce W. Wilkinson: Our strategy has been to not simply sit idly by waiting for that to come to us but to be more aggressive in developing and reestablishing our relationships with the nuclear generating utilities on the service side.

Michael S. Taff: While some of our peers may be relying upon and dependent upon only the new build activity, we are actively participating in the replacement markets now such as the recent award for the first synergy Davis-Besse project as well as some replacement activity going on in Canada.

John Rogers (D.A. Davidson & Co.): You mentioned the $1 billion or more of new awards that you are hopeful to get in the offshore business? Is that work that extends out into 2009, 2010 or is it shorter-term project?

Bruce W. Wilkinson: For 23008 the sales side has already been accomplished. We still have holes in spite of everything. There is still a gap, just a short-term gap in Asia-Pacific and some of the fab work. We still have minimal work going on here on the gulf coast in the U.S. As far as what we have been projecting, as far in backlog, you should think of 2008 as essentially what is ahead of us is execute what we have got.

Michael S. Taff: Some of the feed work revenues and some of the early activities on these projects could contribute additionally to just what the pure backlog roll off is.

John Rogers (D.A. Davidson & Co.): In the past you have talked about the offshore margins in the low mid-teens levels and then you seem to do better than that. Any update on your comments there?

Michael S. Taff: Looking back at 2007, it is about 16%. You see wide variation in that quarter-by-quarter. I think that will continue, but the pricing remain strong, we are able to book work with good margin, with considerable contingency. We have over a $700 million dollar a quarter, which is the highest ever, where you can not just do $700 million a quarter and get to the numbers that you are working backwards into 2008 which means that we are going to have to execute at revenue levels even beyond our highest that just occurred. Having vessels stuck back-to-back on contracts, getting work out the potential for slippage or the need to use some of the contingency is always there. What we are doing is just moving heaven and earth to execute every month better than the month before. As long as we do that, and keep all this in balance, then we have the chance to beat all these numbers down in the 10% to 12% as we have been doing consistently.

John Rogers (D.A. Davidson & Co.): You mentioned $2 billion in bids outstanding on the power side. Are those projects that you expect to be awarded, or is it worth that it is a competitive situation?

Bruce W. Wilkinson: No. There is always competition out there. What is interesting about the B&W work, first of all, everybody assumes GAAP, and our backlog is not a GAAP term. Everybody has a different way of counting backlog and bookings. We are extremely conservative and what you tend to see us book things incrementally which reflects the incremental way that most electric utilities like to build capital projects, they take a step at a time, they are looking over their shoulder at permitting issues and cost issues and so we tend to creep into the number as opposed to having these much larger numbers that you see J. Ray experiencing in the offshore business. It is not $2 billion of dreams, they are real and they are the ones that we are after and think we have a real short at. In spite of all that has been said at the peak after we were awarded the TXU job in June of 2006, we got to $3.1 billion in backlog. We are now beyond that $3.3 billion and still a lot of bidding activity. There is a lot of work out there, but the numbers are just not the way we chase someone, the way we book them, they are never going to be these huge numbers that you see in J. Ray.

Joe Agular (Johnson Rice): On the J. Ray side, the awards that you referred to that may be booked in the next quarter, is that one order or is it more than one?

Bruce W. Wilkinson: No, there are several. Probably in about three or four I can give beyond 1 billion quickly. I can get that in three actually, but if you throw in some of the others, then I refer to down in the $100 million to $300 million range.

Joe Agular (Johnson Rice): Is it still mainly in the eastern hemisphere?

Bruce W. Wilkinson: Yes. The Mid East, Asia-Pacific and yet there is one good opportunity out in front of us, that is in the Caspian. The winners are still winning and the Gulf coast is still waiting.

Joe Agular (Johnson Rice): When the Gulf might come into play?