Foster Wheeler Ltd.(FWLT)
Q2 2008
August 6 2008 8.30am ET

Executives

Scott W. Lamb - VP of IR
Raymond J. Milchovich - Chairman and CEO
Umberto Della Sala - President and COO
Gary Nedelka - President and CEO, Foster Wheeler North America
Franco Baseotto - EVP, CFO and Treasurer
Lisa Z Wood- VP, Controller
Peter J.Ganz- Executive VP, General Counsel, Secretary
W. Scott Lamb-VP Investor Relations

Analysts

Andrew Kaplowitz - Lehman Brothers
Chris Hussey - Goldman Sachs
Michael Dudas - Jefferies & Company, Inc.
Barry Bannister - Stifel Nicolaus
Brian Chin - Citigroup
Kent Green - Boston American
John Rogers - D. A. Davidson & Co.

Presentation

Operator

Good morning my name is Rich and I will be your Conference Operator today. At this time I would like to welcome everyone to the Foster Wheelers Second Quarter 2008 Earning’s Conference Call. All lines have been placed on mute to prevent any back ground noise. After the speakers there will be a question-and-answer period. If you would like to ask your question during this time please press then the number one on your telephone keypad. You may queue up for a question at any point during the conference. If you would like to adjoin your question press the pound key. Thank you; it is now my pleasure to turn the presentation over to Scott Lamb, Vice President of Investor Relations. Sir you may begin your Conference.

Scott Lamb – Vice President, Investor Relations

Thank you, good day everyone and thank you for joining us. Our News release announcing the Financial Results for the quarter was issued this morning and has been posted to our website at www.fwc.com, the presentation we will use this morning has also been posted to our website. Before turning to the discussion I need to remind you that any comments made today about future operating results or other future events or forward looking statements under the stake harbour provisions of the Private Securities litigation format of 1995, actual results may differ substantially from such forward looking statements. A discussion of factors that could cause actual results to vary is contained in Foster Wheelers Annual Report filed with the SEC. The Company’s form 10Q will be filed with the MCC this morning.

Joining us on the call today is Raymond J. Milchovich, Chairman and CEO; Umberto Della Sala, President Chief Operating Officer; and Franco Baseotto Executive Vice President & Chief Financial Officer and Treasurer. Also here in the room with us today is Peter Ganz, Executive Vice President in the General Council; Lisa Z.Wood, Vice President and Controller and Gary Nedelka, President and CEO of Foster Wheeler, North America, Garry manages our Global power and operating units in North America and Asia. We also have Connie Scurbo who is Chief Financial Officer of our Global Power Business. After our prepared remarks we will undertake your questions. I would like now to turn the call over to Ray Mulkovich. Ray.

Raymond J. Milchovich – Chairman and CEO

Thank you Scott and good morning everyone and thank you for joining us. I will walk us through the prepared materials and ask my colleagues to participate with me along the way and as Scott mentioned when we are through with all the prepared remarks we will be happy to take all your questions.

Let me start with Slide 3. Q2 ‘08 highlights, as can be seen Foster Wheeler enjoy a very strong quarter in Q2, we have new all time quarterly records set in that income with a $160.8 million of that income in the period, $142.5 million on an adjusted basis, that was delivered by delivering $220.4 million of EBIDTA and $202.2 million of EBIDTA on an adjusted basis during the period and we finished the period with $1.3 billion of total cash and cash equivalent.

Driving those results first turning to our global ENC Business we have got very strong demand in continued Commercial and Operational excellence being demonstrated inside that Business Group. In our Global Power Group we are benefiting from what have been robust market activity and the systemic improvements in both Commercial and Operational practices that we spoke to you about during 2006 and 2007. In terms of new order trends measured in Foster Wheeler’s scope in ENC, our average quarter so far in 2008 has been 7% above our average quarter in 2007, and in July the number of man hours booked in ENC was more than 70% higher than the average month of the first half of 2008. The significance of this is that as we look at our prospect flow in ENC we are expecting very strong second half bookings in ENC and our July experience would suggest we are off to a very good start to accomplish that.

In GBG our Q2 bookings reflected delays on projects in North America. In July of 2008 however the contract value of bookings was more than double the average month of the first half of 2008 due to the strength of International Bookings that are been turned to demidigate the delays that we have been experiencing in North America.

Moving to Slide 4, Q2’s second consecutive quarter of record net income which is shown on the slide to the right, on an adjusted basis our net income is 47% above the average quarter of 2007 of average quarter 2008 on an adjusted net income basis is 37% above the average quarter of 2007 and this is primarily due to very very strong business performance in both business groups.

Turning to Slide 5, now going by business groups. In our Global ENC Group we had record EBIDTA in Q2 24% above the average quarter 2007. Our Q2 EBIDTA margin in ENC on Foster Wheeler’s scope revenue was 30.2% versus 23.6% as the average quarter of 2007. Our average quarter 2008 EBIDTA so far running 15% above our average quarter of 2007. Our average quarter ‘08 EBIDTA margin measured on Foster Wheeler’s Scope Revenue is 23.3% versus 23.6% for the average quarter of 2007 and obviously running ahead of the general revenue guidance that we provided a year ago. This is being delivered from outstanding execution with what we would refer to as baseline performance or said another way as we look through the performance of the period, this is not margin and or earnings generated by one time events or specific project incentitives this is just excellent performance across a broad portfolio of contracts. And finally our Q2 ’08 included an incremental $6, 7 million of earnings for reimbursement of emission lights at a partially owned Italian Power Project.

Turning to Slide 6, and focusing now on our Global Power Group. We had record EBIDTA in Q2 which almost doubled the average quarter of 2007. Our Q2 EBIDTA margin on Foster’s Wheeler Scope Revenue was 15.2% versus 9.8% at the average quarter 2007. Our average quarter 2008 EBIDTA with 91% above our average quarter 2007. Our average quarter 2008 EBIDTA margin on Foster Wheeler’s Scope at 15.6% versus 9.8% average of 2007 significantly ahead of the general level of guidance that we provided to you in 2007, this is due to strong performance combined with robust market support for the business and a continuing favourable impact of a commercial and operational improvement initiatives that we spoke to you about that we were implementing in that business in 2006 and 2007. Finally Q2 EBIDTA in Global Power in the quarter was aided by an incremental $2, 3 million of earnings due in part to hire electric tariff rates at a partially owned Gillian Power Project.

Moving to Slide 7, focusing now on new orders and backlog. New orders as measured in Foster Wheeler’s Scope in ENC our average quarter of 2008 has been 7% above our average quarter 2007. We expect new orders to be very strong in the second half as I mentioned several slides ago. We are off to a good start as we have shown by in July the number of man hours booked was more than 70% higher than the average month in the first half of ’08. Some examples of projects contributed to that man hour booking and the significance strategically of those I am going to turn you over to Alberto Delasala to outline for you. Umberto.