The new awards were $2.9 billion for the quarter, up 61% from $1.8 billion a year ago. The largest award in the quarter was for the engineering, procurement and construction management of the utilities and offsite facilities for a major petrochemical complex in Saudi Arabia. The value of this award was slightly in excess of $900 million. The firm also booked a sizable award for the engineering, procurement and construction for a capacity expansion of a hydrocracker unit at an existing refinery in California. The firm was awarded a project in Qatar to do the engineering, procurement and construction management for a marine terminal and the LNG loading facilities. In addition, the firm booked a number of other upstream, downstream, and petrochemical awards in the U.S. and Mexico and in the Middle East. Ending backlog for the Oil & Gas segment rose to $14 billion, more than doubling from $6.8 billion just a year ago. The Oil & Gas backlog rose $2 billion or 16% sequentially over the last quarter.

Fluor’s Industrial & Infrastructure segment reported revenue of $773 million, which was level with last year. Operating profit was $21 million, a 55% increase over the first quarter a year ago. Improved performance resulted from the strength of new awards over this past year and included growing contributions from the mining business line. That unit is performing extremely well and, as expected, the I&I group is trending back towards historical margin levels.

New awards in Industrial & Infrastructure segment were $414 million compared with $672 million a year ago when a major infrastructure project was booked. The awards were broad based including new projects in mining, life sciences, and general manufacturing. The largest award in the quarter was for the engineering, procurement and construction management for the expansion of an existing pharmaceutical facility in Puerto Rico. Mining received two awards including the engineering and procurement relating to a complex gold, silver and copper mine development project with facilities in both Chile and Argentina. The firm was also awarded the engineering, procurement and construction for the replacement of the primary crusher at a copper mine in Nevada. From a manufacturing perspective, awards were relatively small and involved capital improvements to existing facilities in the U.S. Backlog for the Industrial & Infrastructure segment rose to $5.2 billion, which is an increase of 39% over last year.

Revenue for the Government segment was $346 million for the first quarter and that compared with $1.1 billion a year ago. Operating profit was $16 million, down from $78 million a year ago and operating margin declined to 4.7% from 6.9% last year. The first quarter of 2006, benefited from contributions from hurricane relief work for FEMA and also Iraq construction work and the Fernald project.

The government segment had a light quarter new awards wise booking $127 million of new work. Awards included additional operations and maintenance work for DEL-JEN, a FEMA contract for personal assistants, and some additional scope on one of the firm’s Department of Energy contracts.

Backlog at the end of the first quarter for government was $548 million, down from $840 million at the end of last year, mainly due to the annual work off of the company’s Hanford contract.

Global Services segment reported a 38% increase in revenue to $635 million in the first quarter, primarily due to an increase in operations and maintenance activity. Their operating profit grew by 32% to $47 million reflecting strong growth from the operations and maintenance and also equipment services business lines. Operating margin there was 7.4% compared with 7.8% last year.

The operations and maintenance unit booked $757 million in new awards in the quarter, which compares to $578 million a year ago. Operations and maintenance awards were broadly diversified across power, oil and gas and industrial markets including mining. The largest award for the quarter was a renewal of a long-term contract with a leading metals producer. The balance of new awards were primarily for renewals of other long-term O&M contracts. Backlog of $2.5 billion increased 9% sequentially, but was down from $2.7 billion a year ago.

Fluor’s Power segment reported revenue of $206 million, up substantially from $78 million in the first quarter of 2006. Operating profit was $5 million in that first quarter with an operating profit margin of 2.3%. During the quarter, the firm announced the formation of a dedicated business line within the Power group to address the next generation nuclear power market. The firm is preparing for this emerging market by employing the combined talent and activities and resources from both government and power groups. The management believes that Fluor is very well-positioned to leverage its vast experience in siting, program and project management, engineering, procurement and construction to add value in this marketplace.

The Power segment booked $261 million in new awards, the majority of which were for the engineering, procurement and construction of a 570 MW gas-fired combined cycle power plant in Ontario, Canada. The firm continues to wait for the air permits on the Oak Grove project for TXU. The company has signed a contract and it believes that could potentially receive full notice to proceed within the next quarter. Backlog for the Power group grew $1.4 billion, up from $1.1 billion a year ago and $1.3 billion at year-end.

Key questions and answers from the first quarter fiscal 2007 earnings call conducted by Fluor Corp. on May 8, 2007.

Michael Dudas (Bear Stearns): How has Fluor been able to manage client expectations relative to your ability to allocate resources?

Alan Boeckmann: It’s one that pervades the whole industry right now and that is around resources, both experienced talent and the procurement of capital goods. The market is extremely broad and strong and we are seeing some upward pressures in each of those areas. But from our standpoint it plays to a number of our strengths. We grew our salaried population last year on a global basis by over 4,000 people. We expect a significant addition again this year and we’ve been doing that on the basis of a system that allows us to work in an integrated fashion across the globe, but particularly on the engineering side. Thus we’ve been able to keep up with that and we have been able branch out and field more qualified project teams than a lot of our competition, because of our breadth and resource strength. That’s what’s allowed us to continue to grow our backlog curve at the slope that it’s growing. The challenge is going to be on the construction side, but we’ve been working very diligently at each of the locations to make sure that we can work either through our own direct hire construction, or through subcontractors to field the right teams. And again, while it’s a challenge that’s what our clients pay us for and we take a proactive stance on that and are looking forward to planning for that. It’s going to continue to be a challenge, but it’s not one that we think is going to stop us from continuing to grow backlog and earnings.

Michael Dudas: You mentioned that you hired 4,000 last year and more this year. Are the majority coming from other engineering construction companies, or are you getting them from the client base, or international companies?

Alan Boeckmann: The majority are coming from other construction companies. On the other hand, we have had a fairly significant recruiting effort at the entry-level. We had our strongest year ever last year in the hiring of new college graduates. That was on a global basis and not just in the US.

Michael Dudas: In the Power sector, how have things changed relative to their expectations on new plant build, given all the uncertainty regarding regulation?

Alan Boeckmann: Regulation is the key issue. We’re seeing pressure particularly in North America but also in Europe, on the regulation side. It’s given more of a balanced approach to what’s happening in power. You’re not seeing significant coal fire projects come on the scene, now we are seeing increased opportunities in IGCC and it’s adding to the momentum on the nuclear side. While we don’t have a significant IGCC project in backlog right now, we have seen some significant opportunities for that to start moving forward. But right now the name of the game is air permits on the coal side, and we are getting to see some additional opportunities now on the gas-fired side for peaking projects.

Ian Macpherson (Simmons & Co): The awards flow was up over 55% year-over-year last year, and looking at $4.5 billion in bookings for the first quarter, do you see last year’s new awards as sustainable or do you expect new awards based on your current capacity to plateau at some level in that area or lower?

Alan Boeckmann: We continue to see strength in our new awards. We’ll see at least the level of awards that we saw last year in 2006. It’s lumpy and hence from quarter-to-quarter it may be up or down. But we’ve had a number of quarters now in a row over $4 billion. The prospects are significant. We get a great line of sight on those because we do a lot of the front end work on these mega projects and particularly in the downstream Oil & Gas and in the overseas side of upstream Oil & Gas and petrochemicals, we’re seeing some significant opportunities for new awards throughout the year.

Jamie Cook (Credit Suisse): Can you update us on the upcoming opportunities with the UK cleanup and Savannah, which is up for renewal?