We also fully recognize that our share price has declined about 75% from our all-time high achieved just a few months ago back in June. We''re obviously sharing this pain, but remain steadfast about our future.

I''ll now turn the call back over to John for his final comments.

John A. Fees

Thank you Mike. In my remaining comments, I''m going to focus on some major themes, but I first want to acknowledge both the Power Generation and Government Operations segments on another fine quarter. Strong project execution and a focus on operational efficiency have continued to enable excellent results.

I''m also pleased today that we have named Brandon Bethards to my old role as Chief Executive Officer of our subsidiary, The Babcock & Wilcox Company, which oversees both the government and power segments. Brandon has over 30 years with McDermott and has demonstrated success throughout his tenure. Brandon and I have had a number of successful years together and I have full confidence in his ability to succeed in this role, he is an excellent choice for these segments.

Starting with the consolidated bookings, we recorded over $1.3 billion during the quarter, pretty well spread across all segments. Oil and gas and power booked approach 0.5 billion of booking additions in the government, delivered the balance with the award of second multi-year agreement which includes the second Virginia-class submarine. These bookings kept our backlog at a solid level ending the quarter at $9.4 billion, a slight increase to a year ago.

Over half of the value of these contracts is in the Offshore Construction segment with the balance in Power and Government in that order. I feel confident that the projects that comprise our backlog will continue to proceed as there has been no discussion with customers to the contrary. And frankly, while delays on big projects occur in the very best of times, most of our work isn''t generally for projects that customers would start and stop very easily.

The overall bid environment remains sizeable. We have over $6 billion in outstanding bids at September 30, split about evenly between power and offshore construction. And this doesn''t include the remaining portions of the $2.7 billion multi-order agreements with government, which will be awarded over the next few years of spending as approved by Congress including over $1 billion we expect in this fourth quarter.

And in the month of October, I''ve had a number of very sizable bid reviews particularly in the oil and gas side. So, in the near term, I expect bids to grow. Also the focus project risk in this segment continues to expand, now exceeding $14 billion for offshore oil and gas construction.

With regard to our markets and recessionary impacts, I repeat that I value the diversity of our customers and industries we serve and as our bids indicate, the market is reasonably robust. Our oil and gas customers are the super majors in the large national oil companies. These projects are typically financed from the owner''s balance sheets. In fact, most of the super majors have been returning capital to the market by buybacks, dividends and debt requirements instead of requiring financing.

Since we are late cycle, we only get called once the commercial quantity of hydrocarbon has been discovered. So, our work is at a lower stage and typically requires only modest commodity price to be viable at that point, and again, today''s prices largely irrelevant to the decision-making process since it takes us a couple of years to complete our work. It''s really the expected price a few years out over the life of the field that really matters. While we can certainly find a few data point in the oil gas segment of certain project getting delayed from where we expected, I don''t think we can separate any of them from the normal project flow dependent on the credit crisis as of yet.

Our government business I believe is substantially immune from the financial markets and I view our power business potentially as the most at-risk as we''ve seen some delays in the domestic power projects related to the credit crisis. Since only few utilities have market caps, about $10 billion, virtually all new OEM projects require capital market participation. However, since mostly coal plans are waiting our legislation for CO2 rules, no significant spending can started on nuclear yet. New generation represents only a small portion of the bids outstanding right now.

Our power customers are really excited about environmental retrofit projects since they add cost to kilowatts. They would delay these if they could, but typically there is a regulation or settlement or something that''s driving the project any way and getting approval for postponement is tough.

Our growing participation in international projects and our parts and service offering and power should continue to do well, as taking care of existing generation is important if new builds are on the back burner. All we''re saying right now, we don''t expect the credit crisis for these delays to have a lingering effect on the power business.

I believe our segments have plenty of business ahead. I feel optimistic about our prospects and I do believe 2009 will be a transition year for McDermott as we work though the breakeven projects in oil and gas and we wait for the current power uncertainty related to CO2 and clean air to be resolved, which we expect will draw substantial business in 2010 and beyond.

However looking at 2009, about half of our current backlog, around $4.2 billion is expected to roll off next year while that top line amount will grow by early suspicion is next year''s revenues will be essentially even with the full-year 2008 levels.

That wraps up my prepared remarks for operations. In summary, we took a step backward in the offshore construction businesses this quarter, which will have a lingering impact for the next year or so and the other businesses have performed exceptionally well.

Even with the current challenges we faced, we still anticipate 2008 reported income to be one of the better years in McDermott''s history.

In December, we are planning to be in New York twice before the holidays including KeyBank''s E&C Conference, and we will also be present at New Orleans at Capital One''s Conference during the month. Also scheduled is the Lehman''s Industrial Conference in February. With several geographic options to choose from, we hope to see many of you all at these various venues.

Before we open the call for Q&A, we know our remarks went rather long this morning. So I would ask in consideration of your colleagues to try to limit yourself to a single question and a follow up and get back in the queue if necessary, so everyone has an opportunity to get their questions into us. With that we will now open up the call.