Question-and-Answer Session
Operator
Your first question comes from Matt Duncan - Stephens, Inc.
Matt Duncan - Stephens
Good morning, Mike and Les, and congrats on a great quarter excluding that LNG project. The first couple of questions I have are really related to the LNG project, and then I’ll move on to half year topics.
First of all, how confident are you guys that this $16 million is going to cover the rest of the costs? How tight is the timeline and is there much wiggle room for you guys if things doget delayed just a little bit?
Michael J. Bradley
We’ve spent a lot of time and effort in defining this current charge and we feel confident that based on the items that we laid out, excluding excessive weather delays or issues related to craft turnover or loss, we feel good about the number that we have put forward. Again, the way we looked at it is we incorporated the experience that we’ve had on tank 1 and assumed that same experience on tanks 2 and 3. As I said, I would hope we would get better but we are not going to forecast that.
Matt Duncan - Stephens
What is the timeline like in the projections that you guys had made? Les was running through some numbers about some incentive payments you get for getting done on time. How much wiggle room do you have in the timeline?
Michael J. Bradley
Well, I won’t discuss specifics, but I would say that we have built into our forecast some weather delays and other delays in order to meet those dates. The first tank is scheduled to come online February 18th so we are closing in on that date. Tank 2 is in March and tank 3 is in April. So, right now, we feel comfortable with our ability to meet those dates and again, we have factored in some contingency for weather, but anything excessive or unusual events have not been incorporated.
Matt Duncan - Stephens
That project over the next two quarters, would the incentive payments occur over time or do those only occur at the end? So, where do I need to put those in revenue in my model?
Les Austin
Well, the revenue is modeled as we said, about $27 million for the remaining two fiscal quarters. Included in our total estimate to complete is the incentive revenues of $7.8 million. That’s how we arrive atthe total loss that we recorded the project at.
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