Ladies and gentlemen, thank you for standing by and welcome to Babcock & Wilcox Company Fourth Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the company's prepared remarks, we will conduct a question-and-answer session and instructions will be given at this time. I would now like to turn the call over to the host, Jenny Apker, B&W's Vice President, Treasurer and Investor Relations. Please go ahead. Jenny L. Apker - Treasurer & Vice President-Investor Relations: Thank you, Sandra, and good morning everyone. Welcome to the Babcock & Wilcox Company's fourth quarter 2014 earnings conference call. I'm Jenny Apker, Vice President, Treasurer and Investor Relations at B&W. Joining me this morning are Jim Ferland, B&W's President and Chief Executive Officer and Tony Colatrella, our Senior Vice President and Chief Financial Officer. Many of you have already seen a copy of our press release, which we issued late yesterday. For those of you who have not, it's available on First Call and on our website at babcock.com. During this call, certain statements we make will be forward-looking. I want to call your attention to our Safe Harbor provision for forward-looking statements that can be found at the end of our press releases. The Safe Harbor provision identifies risk factors that may cause actual results to differ materially from the content of our forward-looking statements. Our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, on file with the SEC, provide further detail about the risk factors related to our business. Additionally, I want to remind you that, except as required by law, B&W undertakes no obligation to update any forward-looking statement to reflect events or circumstances that may arise after the date of this call. Also on today's call, the company may…

. Okay, I do have a question for you and this one comes from Jamie Cook and he's from Credit Suisse. Please go ahead. Jamie L. Cook - Credit Suisse Securities (USA) LLC (Broker): It's a woman, not a man but we'll let that go. Anyway, just a couple of quick questions; one, on the nuke operations business, obviously the performance in the quarter was very strong. You had a change order which you sort of addressed which enhanced margins, but can you talk about I guess you're guiding again to high teen sort of margins over the past couple of years. You've consistently been more in the low 20% range. Why aren't margins sort of structurally higher and then are there opportunity – I guess why aren't margins structurally higher? And then I guess just my other question relates to sort of the verbiage in the 10-K with regards to mPower that DOE has suspended funding. Can you talk about, obviously there would be a concern there given the level of spend that BWC has put in mPower now that the government has suspended funding, what's the probability that this is reconciled? And can you talk about sort of a timeframe to when we could see some sort of resolution? Thanks. E. James Ferland - President, Chief Executive Officer & Director: Sure, Jamie. Thanks. I'll start with energy margins and then we can talk a little bit about mPower. Obviously, a very strong quarter, great performance by our entire NOG team even without that, the contract change that we addressed, it was still a roughly like 20% plus margin business for the year, so outstanding performance. You're correct, we continue to guide to the high teens. Just as in past years, the way we drive margins a little bit…

Thank you. We have another question for you, apologies for pronunciation. This one is from Andrew Kaplowitz from Barclays. Please go ahead.

Good job with the pronunciation. Good morning guys; nice quarter. E. James Ferland - President, Chief Executive Officer & Director: Hi, Andy. Anthony S. Colatrella - Chief Financial Officer & Senior Vice President: Good morning.

So, Jim, you've talked about several international prospects and you've delivered on that, last – in the fourth quarter and now in the first quarter. But did you – have you gotten all the projects that you thought and how do we think about PGG backlog in 2015? And do you need a couple more of these to make your guidance for the year or you basically have what you need for 2015 revenue guidance? E. James Ferland - President, Chief Executive Officer & Director: Yeah, sure Andy. So we have been very successful and for the most part every large project that we have targeted and we thought we were a front runner for, we're either on track to book or we booked, so we feel pretty good about it. And that includes a couple of international coal projects which we very specifically targeted and went after as well as the renewable waste energy projects in Europe. We do not need to book any additional large projects in order to meet the revenue guidance for 2015. That said, you will note that we have mentioned that we hope to win one to two more large projects, either renewable waste energy or coal, before the end of the year and I still feel pretty good about that. Anthony S. Colatrella - Chief Financial Officer & Senior Vice President: Andy, we also, obviously tracked very closely the rollout of the backlog and our book-to-bill business and also projects where we've been selected. And just to remind the audience, we generally don't book until we have full notice to proceed. And when you layer that in, we're in vastly better shaped this year than we were last year. So just to amplify what Jim said, we're in very good shape with respect to revenue at PGG this year.

Okay, that's great guys. And then just a little bit more on PGG the aftermarket business; you mentioned it was stable in the fourth quarter but you mentioned you were being little bit more cautious you know and part of that is what you see with natural gas prices. So maybe talk about your expectation for the aftermarket business in 2015 and what's the risk there given the U.S. coal market has been pretty weak here over the last couple of quarters, maybe a new – it was weak before but it seems like it's gotten even a little weaker here. E. James Ferland - President, Chief Executive Officer & Director: Yeah, I'd say we used the word we're trying to be a little bit cautious in regard to revenues and margin as impacted by the lower natural gas price in the U.S. I think cautious is the right word. We're all of one month into the year. We haven't seen a decline at this point, but we have 11 months left to go. Natural gas, the forward price curve on gas shifted down about a dollar in the last three or four months, taking natural gas to roughly $3 per MMBtu or a little bit lower. Traditionally, that's where we begin to see coal to gas switching for one, where some older coal units will come off and our utility customers will run combined cycle gas unit in their place. The second impact lower gas price has is in the deregulated market, it tends to drive down marginal electricity pricing which, in essence, means our merchant customers don't make as much money. When they don't make as much money, they tend to not spend as much money or they delay spending. So that's the worry. We haven't seen it yet. We may see some small impact in aftermarket. It could be $20 million to $30 million of revenue which would translate to a little bit more than 10% on the bottom line, so we're just trying to be cautious here.

Okay and then, Jim, just to clarify, aftermarket is still close to 50% of the revenue in PGG, correct? E. James Ferland - President, Chief Executive Officer & Director: Correct.

Okay. Thanks guys. Anthony S. Colatrella - Chief Financial Officer & Senior Vice President: Welcome.

Thank you. We have another question for you. Again, apologies to pronunciation; this one's from Tahira Afzal from KeyBanc. Please go ahead.

Thank you very much and folks, congratulations. Great quarter. E. James Ferland - President, Chief Executive Officer & Director: Thanks, Tahira.

So I guess first question is really on free cash flow. Your business model is such that in execution and like a lot of EMCs it's not that much of an issue, so can you talk a bit about free cash flow? Clearly, in the past it's lagged your net income. How should we look at this going forward? Anthony S. Colatrella - Chief Financial Officer & Senior Vice President: Okay Tahira. Well, first of all, you know our free cash flow in 2014 was a little bit lower than we had originally anticipated but largely due to, and it's well documented in the 10-K, a dispute we have on a project called Prairie Island within the nuclear energy business and we have about $45 million receivable outstanding and probably enough said on that except to say that that certainly wasn't in the original plan. The other thing that's impacted the 2014 results is really the timing of costs incurred on projects that we're getting wound down, particularly in the first half of the year at PGG, and the timing of advanced billings on new contracts which we are now seeing coming in. And the combination of those two things – I say we are now seeing effectively in early 2015 – so the combination of those two things really had a dampening effect on cash flows this year. That's the bad news. The good news is that we see very big, good rebound in cash flow in 2015. Number one, the PGG advance billings that I just mentioned are starting to roll in and that should – that will help strengthen cash flow on those paid and major project bookings. They tend to – it usually comes in 30 days to 60 days after the booking is announced, decent down payment. Number two, we also have obviously, are anticipating higher earnings in 2015; and in 2015, we expect to receive some additional cash that's tied to the contract change that we discussed on the call earlier with NOG and that will be coming in a little bit later in the year. And lastly, we expect substantially lower – very limited, actually, pension funding required in 2015 as well that will also help.

That was awesome. Thank you. I guess second question is in regards to really the energy segment; clearly the naval budget outlook for the next 10 years, if not more, is pointing to a 30% plus increase in spending. A lot of the categories that you compete in on the energy side seem pretty well protected in terms of what the funding implications are for that 30% going through. Jim, you highlighted that there are opportunities to really compete on more work given your expertise level there. Could you elaborate on that? We always think of energy as more of a flattish revenue business; could you talk about the opportunities to grow that business on the top-line? E. James Ferland - President, Chief Executive Officer & Director: Absolutely Tahira, so let's just, as we always do on the energy business, just start off with the core business itself and I think you're right, there does continue to be some pressure on defense budgets in the U.S. But given the products that we make for the government, we feel really good about our backlog and our ability to continue to deliver projects and revenue and earnings at levels consistent going forward with what we've done over the past few years. So we still continue to feel good about the baseline business. The missile tube order was a nice win for us. It demonstrates our ability to compete and win in markets that are a little bit outside where we normally play. We will continue to look for missile tube type opportunities where we can leverage our manufacturing expertise and what availability we do have in some of our NOG facilities. So missile tubes to start and I'd say that that the BWXT team, as they contemplate their strategy for the next few years, is certainly looking for additional opportunities to grow that core business and I'm sure they'll give us some more detail on that in the next three or four months when they come out with their road show presentation.

Got it. Thank you, Jim.

Thank you. We have another question for you. And this one's from Bob Labick and he's from CJS Securities. Please go ahead.

Good morning. Anthony S. Colatrella - Chief Financial Officer & Senior Vice President: Hi, Bob. E. James Ferland - President, Chief Executive Officer & Director: Hi, Bob.

Hi. Just wanted to just shift back to PGG for a minute; I understand the conservatism towards the natural gas and FX. Can you just remind us and talk to us little bit about the cost savings initiatives. I think you had still $30 million to $50 million in planned cost savings over the next few years. How much of that is contemplated in the 8% margin assumption next year? And how that's proceeding given all the distractions of spin and everything else? E. James Ferland - President, Chief Executive Officer & Director: Sure. Our cost saving efforts in PowerGen group remain on track. We'd expect to – we'll actually start to see some of that restructuring cost and investment ramp down as we move into 2015 compared to prior years. That said, the majority of our cost savings initiatives at this point are focused on optimizing our efficiency in our various manufacturing facilities in the U.S. and around the globe. That does take us a little bit of time and that's the reason this is pushing into early 2015. That said, we have a little bit of additional margin improvement from the cost savings program baked into the 2015 margin estimates, but I don't think we're overly dependent on that at this point. That said, as the world continues to change and our markets in particular in the U.S. continue to evolve, we're always going to be looking for ways to drive efficiency in our businesses.

Okay. Great, so then, just continuing on that thought there should be incremental margin from those savings picked through 2016 as they flow through fully and you get to implement the programs you're starting? E. James Ferland - President, Chief Executive Officer & Director: Absolutely, and we would expect, without giving any specific numbers at this point, margins in 2016 to be better than margins in 2015.

Okay. Anthony S. Colatrella - Chief Financial Officer & Senior Vice President: And again, some – the programs we're working on in 2015 that Jim referred to that will be finished, finishing up later in the year – are really mostly around manufacturing realignment and leveraging our global footprint and they just take longer. And the benefit will truly be felt or realized, if you will, in 2016, Bob.

Okay, great, thank you for that. And then just I guess shifting gears but staying with PGG a little bit, the American Energy Innovation Council, in their February 2015 report, came out with a proposal at greater U.S. budget spent on new nuclear and carbon capture for coal. Obviously, you guys are in those spaces and we talked about mPower earlier on the call. Could you just give us an update on where you are on the carbon capture and if that's still part of the small investment for you, but potential growth opportunities in the future if you're still looking at that? Or where you stand? E. James Ferland - President, Chief Executive Officer & Director: Sure, so I'm in agreement that, in the long run investing in this country and new nuclear makes an awful lot of sense as does continuing to put R&D dollars toward CCS. You know, that said, we don't – we have ramped down a lot of our R&D spending on carbon capture and storage. As you know, the FutureGen project which we were involved in and – at least the capture portion of that project was based on our technology – has been stopped at this point. And I can tell you we have zero carbon capture and storage, either revenue or margin, built into our 2015 plan or 2016 and beyond. That said, if we can find a way to leverage some government investment and continue to develop that technology, we're on board and we believe in it. We'll continue to do that, but right this minute, we don't see a near term upside from CCS.

Okay. Thanks very much.

Thank you. We have another question for you and this one is from Rob Norfleet and he's from Alembic Global Advisors. Please go ahead.

Good morning. This is Nick Chen for Rob. Congratulations on a nice quarter. E. James Ferland - President, Chief Executive Officer & Director: Thanks, Nick.

Great. Looking into technical service, does your $15 million to $20 million EBIT guide assume any contract wins or additional work in 2015? And can you just discuss what type of opportunities you're seeing in that market? E. James Ferland - President, Chief Executive Officer & Director: Sure. So our $15 million to $20 million does not include any additional contract wins that are material, even Chalk River which is kind of our largest near term opportunity. We're projecting – we think we're in good shape and we've a strong team and a strong offering for the customer – but we don't expect that decision to be made and that contract to be implemented until the very end of 2015, so it would really have an impact on 2016 going forward. We continue to see additional opportunities. We did bid Kansas City. We expect an Idaho RFP out in late 2015 and we continue to keep our eyes on Savannah River in late 2016. Those are some of the larger opportunities that are on the radar screen. Additional small-to-mid-sized opportunities, potentially, we mentioned, at the UK. There's some changes going on at Sellafield and we continue to look to expand our business a little bit beyond our traditional BOE scope and look at DoD opportunities, NASA opportunities among others.

That's great. And then also just more generally, what's your M&A outlook like for either of the two companies? E. James Ferland - President, Chief Executive Officer & Director: Sure. So right now, from an M&A perspective, honestly we're concentrating on the spin and we're concentrating on getting that done. I would tell you that both entities post-spin, even right now, are gearing up and taking a look and making sure we understand our markets and what our acquisition opportunities will look like. From a PGG perspective, we'll continue to look at the Industrial Environmental segment. We think the MEGTEC acquisition was well done. It's a great company. It's a great leadership team, it's a great group of employees and they've exceeded our baseline expectations in terms of revenue and margin. So we're happy with MEGTEC, we're happy with that segment, and we'll continue to look there. I wouldn't expect us to do anything prior to the spin.

That's great, thanks so much guys. I'll jump back into the queue now. E. James Ferland - President, Chief Executive Officer & Director: All right. Anthony S. Colatrella - Chief Financial Officer & Senior Vice President: All right.

Thank you for your question. Your next question comes from, apologies to pronunciation, this question comes from Brian Konigsberg from Vertical Research. Please go ahead.

Thank you. It's good enough. E. James Ferland - President, Chief Executive Officer & Director: Hi. Anthony S. Colatrella - Chief Financial Officer & Senior Vice President: Good morning, Brian.

Yeah, so I wanted to put a finer point, I know this has been hit a couple of times, but on the PowerGen outlook. In your filings, you do talk about the backlog position and the amount set to be burned over the following year. And if we look at PowerGen – actually, maybe even nuclear ops you could address as well – but the PowerGen revenue set to burn in 2015 is up 32% versus this time last year. I know you talked about some caution around the aftermarket. I don't know, it seems like you're kind of assuming the baseline business might come under a decent amount of pressure. I mean, is that effectively what you're pointing to or is there really just some more cushion you're kind of baking into the outlook? And maybe even touch on nuclear ops because that amount set to be burned in 2015 versus what we had in late 2013 set to be burned in 2014, that's up 21%. So both those businesses seemed to be very, very well covered. I'm just curious with the guide you provided – it does seem like there should be some upside but maybe you could give a finer point on both of those businesses? E. James Ferland - President, Chief Executive Officer & Director: Sure, just as a general observation, right, we are trying to be cautious. You know we can see a couple of market dynamics moving around us, in particular exchange rates and natural gas price, and we've try to build that into our forecast to some extent. In regard to PGG backlog, you are correct. We're in pretty good shape for the year; just a couple of numbers I'll give you. Last year, in 2013, at this same time we had about…

Got it. And then just maybe if you could touch on pricing in some of the new international work; is that consistent with the core business or some of those, particularly I would think on coal might be a little bit more aggressive. What are the – maybe just give us some color on what had been booked over the last couple of quarters from an international basis? E. James Ferland - President, Chief Executive Officer & Director: Sure, so we feel pretty good about the margins, both in the international coal orders that we've taken as well as the renewable waste energy projects, mostly in the UK. A little bit different approach to those. On the renewable waste energy market, we have a technology advantage, we have a proven product that we can deliver to the marketplace and we have a very good relationship with the investors and developers. So those projects, I think, are fairly priced and from a risk view are fairly balanced. As always with the larger projects, we tend to start up a little bit slow in terms of margin and revenue recognition and as we get towards the tail end of the life of that project, we often find we have opportunities to release contingency or warranty, so the margins tend to build in a little bit and you actually see that a little bit in 2015 and as we move into 2016. The international coal projects, despite what everybody says, there are an awful lots of international coal projects that are moving forward, the great majority of which we choose not to bid. We have a very competitive product from a technology perspective, leveraging our manufacturing facilities in China and in India. We think we have the ability to deliver a competitive project from a cost standpoint as well. That said, we're very targeted in our international coal opportunities. We tend to shy away from projects that are going to have multiple bidders and the winner's going to be determined solely on price and we look for projects where the customers are looking for technology, value, our name and our ability to deliver and those are the two projects that we've booked. So we still – we feel pretty good about the margins is the end result of that conversation, even on the coal projects. Anthony S. Colatrella - Chief Financial Officer & Senior Vice President: And we've been able to and will continue to, where it makes sense, to leverage our global footprint even more than we have in the past to drive more margin value in the future. E. James Ferland - President, Chief Executive Officer & Director: Yeah.

Thank you very much. E. James Ferland - President, Chief Executive Officer & Director: Thanks, Brian.

Thank you. We have another question for you and this one is from Martin Malloy from Johnson Rice. Please go ahead. Martin W. Malloy - Johnson Rice & Co. LLC: Good morning. E. James Ferland - President, Chief Executive Officer & Director: Hey, Marty. Anthony S. Colatrella - Chief Financial Officer & Senior Vice President: Hey, Marty. Martin W. Malloy - Johnson Rice & Co. LLC: And the win rate has – or the bookings have picked up quite a bit on PGG. How much of it is tied to technology that you all have and how much is maybe tied to having a more competitive cost structure with the opening of the India plant? And maybe, I guess, you did provide some outlook for 2015; is there anything else you can talk about in terms of recent potential bidding opportunities direction? E. James Ferland - President, Chief Executive Officer & Director: Sure. Sure, Marty, so let me touch on those. We think that we have three competitive advantages and we think we're starting – we're doing a little bit better job of leveraging those recently and moving forward. One, clearly, technology and I mentioned waste to energy; we do think we have some of the best technology in the marketplace in regard to waste to energy. Cost, we're becoming more and more cost competitive as we stand up, for example, our India JV and we begin to leverage not only manufacturing but engineering into that environment. And the other one I'd mention that you did not is, I call it, business development. You could call it relationships in the international marketplace. An awful lot of these projects, even though we think we have a technology advantage and we're at least competitive in terms of cost, a lot of it…

Thank you. We have another question for you and this comes from Paul Dircks from William Blair. Please go ahead. Paul A. Dircks - William Blair & Co. LLC: My questions have been answered, thank you. E. James Ferland - President, Chief Executive Officer & Director: The best question yet. Thank you.

Thank you. In that case we have no more questions so I'm going to hand back to Jenny Apker for closing remarks. Jenny L. Apker - Treasurer & Vice President-Investor Relations: Thank you for joining us this morning. That concludes our conference call. A replay of this call will be available for a limited time on our website beginning later today. Also available on our website is a company overview with additional information that will be shared with investors and analysts during various meetings throughout the quarter. Have a great day.

Thank you. That concludes your conference call for today. You may now disconnect. Thank you for joining and enjoy the rest of your day.