Good day, everyone, and welcome to today's first fiscal quarter earnings conference call. [Operator Instructions] Please note this call is being recorded. It is now my pleasure to turn the conference over to the Vice President and CFO of Helmerich & Payne, Mr. Juan Pablo Tardio. Please go ahead.

Thank you, Priscilla, and welcome, everyone. With us today are Hans Helmerich, Chairman and CEO; and John Lindsay, President and COO. As usual, and as defined by the U.S. Private Securities Litigation Reform Act of 1995, all forward-looking statements made during this call are based on current expectations and assumptions that are subject to risks and uncertainties as discussed in the company's annual report on Form 10-K and quarterly reports on Form 10-Q. The company's actual results may differ materially from those indicated or implied by such forward-looking statements. We will also be making reference to certain non-GAAP financial measures, such as segment operating income and operating statistics. You may find the GAAP reconciliation comments and calculations on the last page of today's press release. I will now turn the call over to Hans Helmerich.

Thanks, Juan Pablo. Good morning, everyone. We are pleased with the results of another record quarter announced this morning. I'll leave it to John to describe the particulars highlighted by our securing an impressive number of 35 fully contracted new build orders since the beginning of our current fiscal year last October 1. In light of this being my last earnings call prior to my retirement as CEO in March, I hope you will indulge me in a few personal comments. On each of these calls, we receive a list of names that are signed on and will participate in our Q&A session. And I'm really taken back by how many of you I have known for a good number of years and have developed friendships with. I spoke at my FirstEnergy conference and started engaging with investors over 25 years ago. Those were simpler times. It was way before PowerPoint presentations and webcasts, and more than once I was on the phone trying to secure us a slot in the program. Today, we have 27 analysts that cover us, and we can't attend all the conference invitations that we would like to. The process has changed a lot. The level of engagement, the amount of information and sophistication has all dialed way up. In many ways, it seems your jobs have gotten a lot tougher. But behind all the changes, over the years, some of the fundamental drivers do remain the same. One of the basic building blocks for successful investing is establishing a working knowledge of management and understanding how they think, where they want to take the business, how they intend to spend the owner's capital and the manner in which they will exercise their duty of care over the company's resources. How will they shape the…

Thank you very much, Hans. The company reported a quarterly record level of $264 million in operating income during the first quarter of fiscal 2014. We also reported record revenue levels at $889 million for the quarter. Given the announced new FlexRig commitments from customers and our increased rig construction cadence to approximately 3 per month beginning in April, we now expect capital expenditures for fiscal 2014 to total approximately $950 million. Approximately 60% of this estimate corresponds to our new build program, 30% to maintenance CapEx and the remainder to other projects. We expect at this point to be able to fully fund our fiscal 2014 CapEx program, as well as other scheduled commitments from existing cash and from cash to be provided by operating activities during the fiscal year. We are pleased to have seen a significant increase in the number of term contract commitments from customers. The average number of rigs that we already have under term contracts for the remaining 3 quarters of fiscal 2014 is now 160, and the average number for all of fiscal 2015 is now 106 rigs. About 90% of these rigs correspond to our U.S. land segment and provide the company with the benefit of an average pricing level that is still about 5% to 10% higher than current spot market pricing. Moreover, as some of our rigs that are under term contracts roll off of these term contracts, and as announced, new builds are deployed under new term contracts for new builds, we expect the average pricing of remaining rigs on term to slightly increase during fiscal 2014. Our effective income tax rate for continuing operations during the fiscal quarter was reported at approximately 34.1%, that's for the first fiscal quarter. And accordingly, we now expect the effective income tax rate for the rest of the fiscal year to be between 34% and 35%. As it relates to our investment portfolio, the holdings remain unchanged compared to the prior quarter. With that, I'll now turn the call over to John. And after John's comments, we will open the call for questions.

Thank you, Juan Pablo, and good morning to everyone on the call. We have long believed the legacy rig replacement cycle in the U.S. would last for many years, and we see today it continues to gain strength. Since the peak of activity in 2008, when AC drive rigs had a 15% market share, AC drive technology has continued to capture market share through the cycle. Today, with AC drive rigs commanding 41% market share in the U.S., which is approximately 700 active rigs, the outlook for AC drive rig growth remains positive. Not only our old conventional SCR mechanical rigs challenged to keep up in the world of unconventional resource plays because of horizontal well complexity, in addition to complexity, well depths and the lateral length continue to increase and customer expectations for drilling performance and safety are elevated to new levels. Those are among the many reasons we believe H&P, with its industry leader FlexRig, is well-positioned to continue to take market share in the U.S., as well as in international markets in the future. As customers increasingly differentiate between efficiencies among service providers, H&P continues to demonstrate a tangible value delivered by our people, technology and systems. Now I will discuss our results for each of our operating segments, beginning with the U.S. land segment, where operating income increased by $15.1 million sequentially to $251 million. Revenue days increased over 4%, representing approximately 255 average active rigs in the first fiscal quarter as compared to 245 rigs active in the prior quarter. An average of approximately 157 rigs operated under term contracts, while an average of approximately 98 rigs were active in the spot market. Excluding early termination revenue, average rig revenue per day was in line with our expectations, and decreased by $275 in the fourth…

Thank you very much, John. And Priscilla, we'll now open the call for questions, please.

[Operator Instructions] We'll take our first question from [indiscernible] Patel with Clarkson Capital Markets.

And I guess if I could start by saying congratulations to Hans. You've been a classy man and a brilliant leader over the years. So I wish you all the best in your retirement.

Thank you. I appreciate that.

And I guess, turning to the business at hand. I'm sure you guys have noticed the move in gas prices. Are you starting to see an emergence of some demand from some heretofore sleepy basins? I did hear that, that there was 1 rig earmarked for the Haynesville, but maybe just a little more color around that.

Well, I think it may be a little early for demand really to be responding in terms of incremental drilling to gas prices. You are seeing some hedging activity and some guys taking advantage of that. And that ends up being positive because it drives activity even if you'd have gas prices back off after the winter. Having said that, we're encouraged that gas prices have responded to cold weather, and we'd love to see the type of price levels be sustainable.

Great news. I guess, on the accruing front, as you start to -- as you continue the growth in the fleet, could you speak a little bit to the dynamics there in terms of labor cost, escalation, prices and scarcity of putting good people on the rigs?

Well, John can add to this. We haven't seen a lot of labor cost pressure. I think our guys have done a great job over the years, and I go back -- we've had 2 different phases where we were in a 4 rig per month cadence. So we had the challenges of crewing up and training and bringing those guys up to a performance level where they hit the ground, satisfying the customer. So we have not only a great track record, but I think we've got a system that allows us to do that as we transition to 3 rigs per month. I think that will go smoothly, and our expectation is not really to have a bump in the road in that regard.

And we'll take our next question from Brad Handler with Jefferies.

Please let me echo my congratulations and best wishes, Hans, for your retirement.

I appreciate it, Brad.

If I could turn to, I guess, I could turn to your new build orders, maybe some insights that you're deriving about the market from the 35. Do you have a sense as to what extent your -- the orders are for incremental rigs versus replacing, say, an SCR or even mechanical rig that's trying to do an operator's work today?

It's hard to draw a bright line between those 2. I think that it is a function of what you've heard us talk about where, as customers move into this development phase of their effort, they become more discriminating and maybe, another way to say it, less tolerant of underperforming older rigs. And so now, they have -- they are not doing delineation wells, and they're not doing drilling that holds leases. They really have a farsighted plan and that effort around, kind of a factory-type approach. And that just is a great match with having better equipment, having better organizational competency driving that effort and partnering with them to get the best efficiencies available. So that's our sense. It's hard for us to know, I think some will be incremental. But clearly, you think today, they're 700 plus SCR mechanical rigs still out there fighting for whatever is in their remaining life, and they're under the pressure that we help to bring with our AC rig offering.

Right. It makes sense. Okay. Maybe a complementary question in terms of your own impact on the market. Do you -- what proportion of the 35 were competitively tendered? Do you know?

Brad, this is John. I don't think -- I would say very few. I mean, historically, at least in the U.S. land space, we're not doing a lot of major bids, particularly when you're looking at our long-term customer base, they recognize the value. They like the consistency of the offering, and they have enough exposure to the market. They know what the market should bear and so most of the new rigs have been negotiated contracts.

Understood. That's helpful. And maybe just to sort of related, and then I'll pass it on. But the 9 customers you referenced include some new ones, right? How many are new?

There's a couple out of the 9. I believe that's right, a couple, that are new.

I think I'd add just one thought, which is this -- the size and scale of the new orders and it reflects a choice that customers are making, knowing the other race cars on the track. And they understand the offering that our peers are bringing to the table. I think it's a compliment to our guys that we're seeing the proportionality of new build contracts that we're seeing.

We'll take our next question from Byron Pope with Tudor, Pickering, Holt. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Juan Pablo, I appreciate the color during your prepared remarks regarding average day rates, and just wanted to get a sense for the commentary about improving spot market day rates. I mean, you're down to a handful of battle AC rigs. Could you give us a feel for the order of magnitude that you're starting to maybe see upward pricing momentum for your AC rigs working in the spot market?

Thank you, Byron. This is Juan Pablo. I have -- I think what we have seen so far and what we expect for the second fiscal quarter as we provide the outlook guidance operationally is a slight increase only. Let me make sure that I turn it to John and see if he might have additional comment. Going forward, of course, the market is going to determine what incremental pricing we can attain. We're optimistic in that regard, but I'll yield to John.

Byron, one thing that we've experienced over the years, of course, and you've seen it in your career, rigs always drop a whole lot faster than they are -- then you're able to push pricing later. Fortunately for us, we didn't have a dramatic correction off of the current peak spot market pricing. So our correction delta isn't quite as much as what a lot of our peers. But we're continuing to see some strength. We're continuing to see rigs move out of gas basins and move into some oil basins, and moving rigs around. And we're still seeing some churn, even though our idle fleet -- AC fleet capacity is only 13, there's still some churn. We still have -- some of those 13 will go to work, and then some of those will get released. So that churn tends to have a little bit of a downward pressure. And I think the other thing is just competitor pricing. There's still, at least in some areas, what we would consider somewhat irrational type pricing behavior on SCR and even some AC rigs. And so I think that all has an influence on, yes, spot market pricing is improving. It's not improving dramatically, but it's improving. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: And then just a second question. I'm thinking about the cost side of the equation. On the far side of the seasonal impacts in the March quarter and thinking about the startup costs associated with the new build FlexRigs and maybe mobilizing some rigs between basins. My suspicion is that there is -- shouldn't expect any structural migration upward and that fleet averaged daily cost, I realize it's not easy to -- just maintaining it flat. But again, I wouldn't think that there would be any structural trend where those costs would necessarily fleet average costs would migrate higher over time.

That, I would agree with you, Byron. As you are moving rigs from basin to basin, you've got some personnel expenses associated that. When you have new rigs coming out, you've got personnel expenses associated with that. And so those are somewhat one-time. And so I would agree with you. It's not structural. And then, of course, just the second fiscal quarter volatility we've experienced. Again, I give our guys all the credit in the world, they've done an excellent job on that. And last year, the costs were much improved over the year before. So I just wanted to prepare everyone, make certain you realize that there's that possibility for at least in that next quarter to have some potential cost increase. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Fair enough. Hans, all the best to your retirement.

I appreciate it. Thanks, Byron.

We'll go now to Jim Wicklund from Credit Suisse. James Knowlton Wicklund - Crédit Suisse AG, Research Division: Hans you had said couple of quarters ago that you got 57 customers who were just fine with the fact that your rigs skid instead of walk. And we continue to hear more and more about pad drilling in 40 wells off 1 pad, as an extreme and stuff. Are you studying or contemplating or doing some work on whether or not H&P needs to come up with a walking system?

Well, John and I'll both take a shot at that, Jim. I think -- and you've heard us and we've talked about it, where all of the rigs we built were sitting around with the best and brightest of the customer, and what they're wanting to accomplish, and there's no secret of what designs are available out there. And so what result you've seen with our skidding system is what the customers has asked for. Our capacity to put out a walking system is certainly within our reach. And again, it's going to be customer-driven and directed. I think that what may be missed sometimes in the conversation is the customers really looking at the overall performance and what the well cycles are and what the efficiency drivers are. And that's where we're focused as well. But sure, the skidding type and skidding system is important, and we'll be responsive to the customer on it. But I think you saw just with this last group of 35 that all of those will have our traditional skid rail system. James Knowlton Wicklund - Crédit Suisse AG, Research Division: Okay. I was just looking at it for an update and if you've got 35 good customers and you've got the good customers. If they're okay with it, who are we to complain?

Yes, I think it's an element of a validation in that regard. James Knowlton Wicklund - Crédit Suisse AG, Research Division: I would agree. In talking to some of the private rigs companies out there, the outlook is that for the top tier rigs, you could see a couple of thousand dollar day rate improvement through this year industry-wide. And it strikes me, Baker Hughes comes out and says the rig count's going to be flat. NOV's [ph] got their system that upgrades SCR rigs pretty well, and we're still adding top tier rigs. Do you guys subscribe to the view that the industry overall could see a couple of thousand dollar increase in day rates through '14?

I'm going to let John answer that. It's going to be great for the next 30 days. But it's going to be harder. I'll let John answer this going forward.

Well, Jim -- thank you, Hans, I appreciate that. Jim, I think to forecast a $1,000 to $2,000 a day, I think, is a little premature at this stage of the game, and particularly when you say the guys predicting it are the smaller contractors that probably don't have the types of rigs that we're talking about that are really in demand. I don't know. It'd be hard to see that right now. But you how these markets work. You've been in this business a very long time and it can change -- the question earlier about natural gas. Do we see an improvement in natural gas drilling as a result of higher prices? That would be one of the things that could increase rig demand -- the worse thing, nice rig demand for FlexRigs. I think overall, we would expect to see some rig count increase at current oil prices. I think we'll continue to see the rig count trend up slightly. And again, it's very hard to predict. Is it 50 rigs or 100 rigs? It's difficult to predict.

We'll move now to Kurt Hallead with RBC Capital Markets.

All the smart questions have already been asked on the U.S. land side. And I'll again throw in a congratulation on the retirement for Hans. Well done, Hans.

Thanks, Kurt.

You’re welcome. Let me ask on the international front. We talk about -- service companies talk about the potential for increased unconventional activities throughout the international marketplace. You guys indicated it in your conference call as well. Can we talk maybe timing and potential magnitude of that increase in activity? Is that a 2014 event or a '15 event or is it a 5-year event?

Well, we've handicapped it over the proceeding quarters. And I think, if you look back, we're really just at that inflection point now where the prospects for international drilling have significantly improved. If you go back over the recent years, it's been a tough slug out there. But Kurt, I'm inclined to think it could potentially be impactful even towards the end of this year, but I think it's just hard to imagine that there won't be traction. We just have a great customer roster that we know has keen interest in executing in a way that is similar to what they've accomplished with their supplier complement here in the U.S. So I think we're going to have an opportunity to participate there, and it could be sooner than you think. But certainly, it'll be in the timeframe that you outlined there.

Okay. My follow-up would be, and you talked about returning cash to shareholders through your prepared commentary and so on. Press release indicates an increase in CapEx related to the new build type of programs. You have one of the highest dividend yields, or highest dividend yield of a land driller and one of the highest and related to other larger cap diversified service companies. What's the thought process as you get through this year in terms of the dividend, more modest increases than we've seen in the past?

Well, I think, yes. We've hit some nice step change increases, and the last one being as recent as December, where we raised it to $2.50 per year. But I would say the modeling Juan Pablo does and what our projections are, are very much in line with what we're seeing now. And it kind of reflects this comment you've heard us make about an "all of the above" strategy, where we believe we've got the capability to grow the company, to add to the fleet, to look hard at international opportunities and then, at the same time, return meaningful cash to shareholders, and that will be through, I believe, additional opportunities to grow the dividend, and it could also come in an opportunistic way on share buybacks. And so we're in a great spot to be able to do a lot of these things. As you know, Kurt, our balance sheet would easily lend itself to some leverage with the right opportunity. So all of those things are in front of us, and it gives us a great position to look very hard at the opportunity set ahead.

Okay, very good. And I just want to make sure that I'm understanding some of the commentary that came out from John and Juan Pablo. So to be clear, you are the company starting to see price increases for the rigs that are rolling off contract, as well as when you bring the new rigs in, the price point on those new rigs are above the, say, the last, what 3-month, 6-month period? Is there a way that you could provide a little more color around that?

This is Juan Pablo. In looking at how our term contracts affect the average pricing or average rig revenue per day, we have these roll off during the next several quarters of what we, in general, see is rigs that were contracted in average in a better pricing environment. So it is not surprising to see in many cases where we have a term contract that rolls off and is contracted at a spot rate at a slightly lower day rate, reflecting the current spot market. In average, however, in addition to that, what we see, at the end of the day, as these rigs that are on term contract roll off, as I mentioned in my prepared comments, we do see that the remainder of the term contracts, those that are already in place, yield an average that is slightly higher than what the current average is during the next couple of quarters. As we look at the spot market itself, as mentioned by John, we have seen rigs -- and the better example is, for a particular rig that is in the spot market, that is working under the same condition, same region, et cetera, we have seen a slight improvements in average. And so as we enter into new build contracts, we are taking advantage of that -- of those slight increases. Overall, it really doesn't impact the total average in general. As we mentioned, we expect quarter-to-quarter to have a flat transition in terms of average rig revenue per day.

We'll go now to John Daniel with Simmons & Company. John M. Daniel - Simmons & Company International, Research Division: John, real quick, can you review again the longer-term outlook in offshore? You made a comment on operating income, and I didn't catch it.

John, we are -- we've had additional operating income as a result of our management contracts. We've taken over a management contract for one of our customers that will begin to deliver more operating income as the year transitions. And then we have an international platform rig that's also a management contract, we'll continue to see higher operating income there, again, as the year transitions. So that's the reason for the increases. Juan Pablo, anything else to add?

[indiscernible]

Does that help? John M. Daniel - Simmons & Company International, Research Division: Yes. I thought you said it was going down. I just want to make sure that was the case.

Well, it's always possible. I didn't... John M. Daniel - Simmons & Company International, Research Division: No, no. Okay. I was taking copious notes but not good enough. You mentioned that of the new builds, I think 70% will have the skidding system and 30% won't?

Yes. John M. Daniel - Simmons & Company International, Research Division: We hear about...

Go ahead. John M. Daniel - Simmons & Company International, Research Division: I was just going to ask, why would someone not want that system and where would those type of rigs go?

Well, it's a great question. It's really not basin-specific. It's more related to timing of development of the resource if you want to think about it that way. Effectively, what we had at the 23 Flex 3s, I believe 13 of those had skid systems and 10 didn't. And the 10 that didn't are drilling at least, at this phase, at this time, the customer is drilling typically well-to-well. They're drilling 1 well on a pad and moving. And so they're delineating, they're holding production, there's a lot of different reasons why. One of the real advantage of course of the Flex 3 is that, at a later time, when the customers says, "You know what, we want to go into development mode. We want to drill 2 or 3 or 4 wells on a pad." Then they can add the skid system at a later date. So that's the reason for and of course the Flex 5s are purpose-built pad drilling applications. John M. Daniel - Simmons & Company International, Research Division: Okay. Alright. And then just one final one for me. Someone had asked earlier about your views on the idea of new builds continuing to displace legacy rigs, and I just want to follow-up on that being specific to H&P. If you look at the 35 rigs that you are building right now, or any of those replacing rigs that you currently have operating for the customers that have signed contracts for those 35 rigs?

No. That would not have been the intent with 1 exception, and that would be if a customer would use a FlexRig as a bridge rig, as an example. They've got to start in -- they had to start in November, and we had an available Flex 3s, so the Flex 3 went in and drilled until the new build can be delivered. But it's not a replacement for technology reasons. It's a replacement in terms of convenience for the customer and having a rig sooner than what the new build could deliver. John M. Daniel - Simmons & Company International, Research Division: Fair enough. And then the last one for me, just in terms of as we try to model trajectory here. Are you aware of any customers at this point that -- whether they'd be a new build or an existing rig, whatever, where they intend to drop a rig in the next 3, 6, 9 months? Or do you feel like all these rigs are ultimately incremental to your current working count?

Well, here's to follow-up on the example I just gave you. The customer picks up a Flex 3 and then they have a new build that's going to replace it. A couple of things that can happen. One is they replace it and then that rig goes to work for someone else, that rig that had been working as a bridge rig. The other example is, a lot of times, the customer decides, "You know what, I need to keep that rig." So they bring the new build in, and they keep the rig that was being used as a bridge rig. But we're going to continue, John, to see some churn where customers are making decisions, for whatever reason, which is why you're seeing some rigs move from one basin to the next. Obviously, our rig count in the Permian has grown dramatically. I think we're going to continue to see Permian -- the rig count for us grow in the Permian. So there's not any examples of those besides that.

Well go now to Tom Curran with FBR Capital Markets. Thomas Curran - FBR Capital Markets & Co., Research Division: I've read that the U.S. companies who rely on family members for leadership succession, less than 30% remain viable by the third generation. Those that make it, though, then go on to perform well over time compared to their peers. So congratulations on beating the odds, and best of luck in this next chapter.

Thanks for the comment, Tom. Thomas Curran - FBR Capital Markets & Co., Research Division: John, wanted to return to the 35 FlexRig new build awards since the end of the 2013 fiscal year. Sorry if you already touched on this, but could you tell us how they breakdown by model? And then the total number of customers you've won those 35 from?

Yes Tom. 23 are Flex 3s; 11 Flex 5s; and 1 Flex 4. And those 35 have -- are contracted to 9 different customers. Thomas Curran - FBR Capital Markets & Co., Research Division: Great. And I did hear correctly earlier that all 35, do have the skid rail system?

No, 70%. So I believe 13 of the 23 Flex 3s were ordered with the skid system, there were 10 that didn't. And the Flex 4 does not have a skid system. Thomas Curran - FBR Capital Markets & Co., Research Division: Okay. So the Flex 4 -- okay, great. And then when it comes to the indications you've gotten from customers about if and where they might look to first respond, activity wise to the continued uptrend in natural gas prices, where most likely would you expect to first deploy rigs as a result? And would you expect to have to upgrade any of the conventional idle FlexRig 3s to pursue these opportunities, or would you expect to be able to deploy them as is?

The Flex 3s are all very suitable for drilling in any of the unconventional plays, whether they're natural gas or whether they're oil. So there wouldn't be any needed upgrade at all. I think the Haynesville would be a logical choice. The Eagle Ford, obviously, there's a lot of different reservoir in the Eagle Ford and some are higher in gas concentrate. And so you -- I think you could probably see that, that customers would potentially moves some rigs over into the Eagle Ford. It would be fairly easy to do that. But again, I don't have a sense. I haven't heard anything directly from customers at this stage saying, "Hey, our natural gas is about $5, and we're going to ramp-up our drilling program." But most of what you we're hearing about is directed towards oil basins. Thomas Curran - FBR Capital Markets & Co., Research Division: But if we were to start to see that and they requested a skidding system on one of the idle FlexRig 3s, would you be able to upgrade it?

Yes. Yes. We continue -- over the last 3 years, I don't have the numbers right here in front of me, but we've added significant number of Flex 3 skid systems to Flex 3s in the fleet, both that were idle and then putting to work, and then those that customers were using, and their program changed to the development mode, and they wanted to begin, like I said, drill 3 or 4, 5 wells on a pad. Thomas Curran - FBR Capital Markets & Co., Research Division: Okay. And then last one for me, John. When you look beyond the Big 4 land drillers, how many total Tier 1 rigs would you estimate are out there now and across how many different contractors? When I say Big 4, I mean, yourselves, Patterson, Nabors and Precision.

Right. Well, I think, first of all, for us, at least from our perspective, Tier 1 is an AC drive rig. I just -- for me, definitionally, to put an SCR rig in the Tier 1 category, to me, it doesn't make sense from a technology perspective and down hole what we're able to deliver and the drilling advantages. We know there's approximately -- in the Tier 1 category, there's approximately 700 AC rigs that are active today and another 70 or so, so 10%, that are idle. And we think, maybe as many as half of those 70 aren't necessarily well-suited for the types of wells that are being drilled in unconventional plays. So outside of the Top 4, it looks like approximately 200 AC rigs are out there owned by smaller companies that are both public and private, best we can tell. So 200 out of the 700, we have 275 of those today.

We'll go now to Scott Gruber with Bernstein. Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division: Hans, let me reiterate the congratulations and best of luck in retirement.

Thanks, Scott. Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division: Juan Pablo, I think it was you who mentioned that average rate for rigs under term contract should continue to tic higher as contracts roll. Does that reflect the positive mix shift in terms of more rigs or skidding systems remaining under contract, and they generate higher rates?

That is one of the moving variables, Scott, yes. You know that you have a -- you have pricing considerations, you have a mix consideration in terms of the type of rigs that are out there, including whether or not they have skidding systems. You have different regions, that command different pricing levels because of their cost structures, et cetera. But yes, that is one of the reasons. Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division: So overall, you could summarize it by saying positive mix shift on the remaining contracts for a variety of reasons?

Yes. Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division: And then the early termination fees realized during the quarter, does that reflect contracts that were scrapped during the quarter?

Well, it just -- what it reflected is some rigs that were that were in excess of what the customer's needs were going forward. And some of that's related to natural gas, moving rigs around. But the rigs, obviously, they still exist and we contract the rigs at a later date. Scott Gruber - Sanford C. Bernstein & Co., LLC., Research Division: It's very customer-specific -- it was just an interesting phenomenon, given that the spot market is tightening up.

Right. But we've seen this now, what, 3 quarters, 3 or 4 quarters in a row. We've seen customers that are either coming up on the end of their contract or, again, they've got more rigs in their fleet than what they need going forward. So they're really just balancing their portfolio.

And we'll take our last question from the Waqar Syed with Goldman Sachs.

Let me join everybody else in saying congratulations to Hans on your retirement, and thank you for your friendship and support all these last 10 years. And look forward again to maybe seeing you as you still make the rounds.

As is well. Thanks, Waqar. I've enjoyed it.

Just following up on that. Ten years ago, you were originally -- you thought that the market needed a new type of rigs, and that vision is proven right, and has been instrumental in the shale revolution. Now as you look forward for the next several years, maybe next 5 years or so, do you see any other next step in this innovation? Do you see any other hardware that could be put on the rig that could make a difference, be that maybe integration of the road [ph] receivables, or is it even providing phasing [ph] services through a driller? Or what do you think the next steps could be in this innovation on the drilling rig?

Well, the better person to answer is John, of course. But I think, the way you posed it, Waqar, I'm not sure there's a hardware bolt-on, although we continue to look for ways to improve the FlexRig. And, as you know, today's Flex 3, which still represents the largest share of our new order book, has improved and incrementally been made better over time. So that can continue to happen, and we'll be anxious to try to find ways to do that. I think on the software kind of knowledge capture part of the equation is where a lot of opportunity still lies ahead, and to drive a consistency across the performance range is still something the customer's very interested in. So if you look at a typical field, we have the uniformity of our offering, and you have the opportunity to put the right people in place. But even so, you have this scattergram of results and how do you tighten that up? How do you reduce the delta of why one rig is still performing better than its twin rig? And that's just done through better performance and knowledge capture. It's working with the customer in collaborating on where are we introducing human judgment where we can really fine tune that. And it sounds maybe simpler than it is, and you've seen our setup and followed us closely and know what our capabilities are, and I think we're in the best position to deliver those incremental improvements and efficiency. And I think that's being reflected even today in our new build awards.

Great. Thank you. But just the last question on the gas markets. What is the lead time from [indiscernible] wants to pick up rig and when they call you to inquire about a drilling rig for gas drilling? Meaning that if they want to pick up in the third quarter of this year, fourth quarter or first quarter next year, when would they give you a call to say, "Hey, we'll be needing a rig"?

Yes, that's a good question. We have lots of just overall inquiries along that line now. They don't necessarily say we're sitting on the fence waiting to drill a gas-directed target, but they are asking about when is our next available slot open. They know that we have fewer and fewer available AC rigs on the sidelines. So we're getting those calls now. But your question's a great one in terms of what's the tipping point psychologically when the industry begins to say, "Hey, these gas prices provide us an opportunity to go back in the field and drill gas wells." And that, of course, makes a large impact on the prospects of our business.

Right. So in terms of the volume of incoming calls on for gas-directed drilling, has that picked up in the last month or so, or no, not yet?

Not yet. And they're not saying to us, "We have this group of gas wells." Having said that, we've got a big customer that has 8,000 known locations that when gas prices improve, they're going to go execute on drilling those. So it's out there, the potential and opportunity set is out there. And you probably understand the dynamics better than I do about what are the pricing dynamics that really trigger that renewed effort.

Thank you. And we have no further questions at this time.

Thank you very much, Priscilla. And thank you, everyone for joining us. Have a good day.

Thank you.

And that does conclude today's program. You may disconnect at any time.