Can you provide an update on the status on FAIR Act and how do you see it playing out, moving towards November?

The firm has been a natural optimist throughout the last four years against all odds. It is understood that Senator Frist has told Senator Specter that if he can assure him of the 60 bulletproof culture vote on not only a couple of procedural issues, but certainly the issues; then he can bring to the floor and Senator Specter is working hard on it.

But clearly once you get beyond the Labor Day weekend, you start getting into the election season. It’s going to be more and more challenging to find more time to do it. It’s one of those things where over the last couple of years, there were numerous activities in the industry side. The firm had lots of assignments and was being asked to do lots of things. The alchemy is all about whether or not Specter can make trades with his primarily some republican members of the Senate in order to get this done. History has shown that once you are in the election season, it gets pretty ugly.

The firm has over $900 million in cash. How much cash do you think you need to run the business and do you expect to generate more cash during the second half of the year?

As for the second half of the year, the firm does not typically give guidance, but you can look at the first half of the results and draw your conclusions from that. If the FAIR Act is not passed, obviously the firm is going to have to folk over some $600 million or $350 million and the $250 million note comes into existence. The company still has a fair amount of pension funding that has to be required. Also, the firm is spending quite a bit of the CapEx. The company has spent a fair amount in the first half and expects to spend something more than that in the second half. There is still a lot of uses of cash that are yet to come down the pipe. The other complicating factor is that each of the firm’s three segments have their own credit facilities and it basically restricts the company’s ability to move that cash up and down the line either because of legal requirements or because of credit facility requirements. The management would like to keep about $75 million to $100 million in the system for working capital swings in any given month.

What is the company’s comment on the Dolphin project? Why it was deferred profit recognition before and how you moved it successfully forward?

The Dolphin project is about 9 to 12 month old project. When it was bid, the firm had this dramatic run up in steel prices and the concern was that whether or not the firm would be able to fully estimate the cost of the project completion until such time it had a significant amount of the project behind it. The management determined that it would not recognize any profit on that project until it was 70% complete. The project team did an incredible job of mitigating many of the risks that they identified shortly after the bid was made and the firm deferred about 15 million of that profit at the end of 2005 and another $6 million at the end of the first quarter. In the second quarter, the company achieved its completion target, which was north of 70% and then recognized for $21 million.

Are the payments on the asbestos issue tax deductible? You had mentioned that you had already run those charges through the income statement as part of the reconsolidation of B&W. Have you already incurred those payments from a tax loss perspective or would those only be incurred when and if paid on a cash basis?

The answer is the latter. Those become tax deductible, when and if they are paid. The extent to which the firm has already paid, which is about $350 million, has gone towards increase in the NOL and will be available for refund sometime in the future.

What is the size of the pension payments?

Pension payments are running between $60 million and $70 million a year.

On TXU, has the company already got the contract to do the SCRs and the scrubbers or is that contract yet to be announced?

The SCR part of that order is included in the boiler island work, which is in the billion dollar award. The scrubber and other associated balance of plant equipment is not. Presumably that’s out there for bidding opportunity for the firm and others at sometime in the not too distant future.

On the AREVA deal, what is the capital outlay that the firm has guaranteed in this take-or-pay contract? What parts and components are you obligating yourselves to buy and what are the commercial uses for the components that you are obligating yourself to buy?

First of all, it’s really the firm’s take or pay and it’s not theirs. In the short term, say the next couple of years, it is about replacement part market for existing nuclear power stations, the first example being this Diablo Canyon for PG&E. During that cycle, the company would anticipate minimal capital to go into the plant, if any at all, and the firm is attempting to balance the flow through the work that’s done at that facility for its government customer and that which should be available for commercial unit like Diablo Canyon. When UniStar said they are placing orders for particularly for forgings, for long-lead items for the first plant, you are getting then 2 and 3 years out, and certainly by then, there would be some capital required in reconfiguration, but you would have reached a whole another scale of operation within that facility and on the short-term. Hence, the firm will cross that bridge when it gets there.

The market has changed pretty dramatically in the last year; if you look at the margins and your backlog versus the margins at bidding, would you say that those margins were up substantially or about the same?

Within the J. Ray business, it’s been a raising backlog and additionally a positive trend in margin simultaneously. It’s really too early to tell on the B&W side.