Question-and-Answer

Operator

Ladies and gentlemen, if you wish to ask a question, please press “*” followed by “1” on your touchtone telephone. If your question has been answered or you wish to withdraw your question, please press “*” followed by “2”. And your first question comes from the line of Andy Kaplowitz of Barclays Capital. Please proceed.

Andy Kaplowitz - Barclays Capital

Good morning guys.

John A. Fees

Good morning Andy.

Michael S. Taff

Good morning.

Andy Kaplowitz - Barclays Capital

So John you talked about new awards and how the pipeline in oil and gas still looks good. Could you give us a little more color on that? There are some bigger projects out there. You''ve been working in the long-term agreement for a while now. What are your bigger customers telling you about these potential projects and what gives you confidence that we''re going to see some big income across over the next couple of quarters?

John A. Fees

Well, Andy we''re working a couple of points. One is that the long-term agreement, we believe is going to be delivered to us more in pieces than in any single piece. In fact, in the quarter, there was a piece that was booked in the quarter of about $125 million and we would expect to see this over progress in the quarters as we go into the future. We continue to work on Barzan as the majority of the construction related to that has not been awarded and there are other large projects that we''ve turned bids in recently. One, we reviewed just last week; it was well over $1 billion. And so I think the activity remains pretty strong and robust and our prospect was of target projects, focused projects has actually grown in the quarter.

Andy Kaplowitz - Barclays Capital

Great. And John, we can definitely appreciate that. You are going to go and do a thorough review of the J. Ray businesses over the next few weeks. I guess as you prepare for this earnings announcement, you need to have some view on the 27 other projects that are there, to come up with your 68% margin estimate. And so how should we view that estimate going forward? How conservative do you think it is? Are you worried about any other areas of the J. Ray backlog? You know where do we go from here?

John A. Fees

You know Andy, this perspective started to develop about when some of these issues started showing up right about when I got here at the 1st of October. And what we really try to make sure we could do is really understand the depth and the breadth and how this would impact to any extent anything that we''re doing inside the company. I certainly have a lot of faith in Bob Deason and his ability to really understand this business and how this business operates.

In addition to that, we''ve certainly tested those assumptions very, very heavily. We have spent many hours and many meetings really understanding what''s going on across the entirety of the backlog. So, I think there is a level of confidence that we have that we captured. What''s going on, if the lean is any direction, it''s probably little conservative. But with all that said, we still have some more to do to get these projects moving forward on the basis that we would like to see them and we need to verify some of our assumptions a little further and that''s certainly planned over the next several weeks.

Michael S. Taff

And Andy this is Mike. As a follow up, I think what we''ve mentioned in our prepared comments and what we really looked at across the whole portfolio as you ask is that if you exclude these three projects, we mentioned these three pipeline projects, the remaining portfolio for J. Ray pretty much performed at kind of the historical margin range in that 10% to 12% range.