Good day, and welcome to KBR's First Quarter 2012 Earnings Conference Call hosted by KBR. This call is being recorded. [Operator Instructions] For opening remarks and introductions, I would like to turn the conference over to Mr. Zack Nagle, Vice President of Investor Relations and Communications.

Good morning, and thank you for joining us for KBR's First Quarter 2012 Conference Call. Today's call is also being webcast and a replay will be available on KBR's website for 7 days at kbr.com. For any of you who missed our press release, you can also find it at kbr.com. Joining me today are: Bill Utt, Chairman, President and Chief Executive Officer; and Sue Carter, Executive Vice President and Chief Financial Officer. During today's call, Bill will provide an overview of KBR's first quarter operating results, highlighting a number of key areas. He will then take you through an update on our major prospects and provide his insight on KBR's market outlook. Sue will then provide an overview of the key financial takeaways for the quarter. Lastly, before turning the call to Q&A, Bill will provide closing comments. After our prepared remarks, we'll open the floor for questions. This call will include forward-looking statements that involve risks and uncertainties that may cause KBR's results to differ materially from management's current expectations. We encourage you to review our Safe Harbor statement containing the earnings release published last night, as well as KBR's most recent SEC filings for more complete description. Now I'll turn the call over to Bill. Bill?

Thanks, Zach, and good morning, everyone. During today's call, I'd like to cover 3 main areas. First, I'll walk through the key takeaways relative to our first quarter performance. Second, I'll provide you with an update of our key prospect list so you can track some of the major opportunities we're pursuing. And third, I'll discuss in detail, some of the significant market trends and dynamics we're seeing at the present time. KBR delivered $0.61 in the quarter. This overall operating performance was consistent with our expectations and our guidance, and we continue to believe we'll deliver progressively stronger performance in Q2 through Q4. There were a number of areas of strength in the quarter. Excluding all GAAP, revenues was up 5% year-over-year reflecting the underlying growth in our other businesses. At the consolidated level, job income margins and business group margins were both improved with particular strength in Gas Monetization and International Government, Defense and Support Services. Our Technology business continued to deliver strong performance with double-digit job income growth in the quarter. We are very pleased with the ramp up of our Saudi JV KBR-AMCDE. KBR-AMCDE provides in-kingdom technical engineering and production capabilities through local utilization of KBR's world-class engineering tools and work processes. While not a large contributor to the first quarter, KBR-AMCDE booked 400,000 man-hours in Q1 and is on a flight path ahead of our initial expectations. KBR's backlog also increased significantly with revenue backlog and job income backlog up 44% and 40% respectively, as the JKC joint venture Ichthys LNG project contract was booked in the backlog. For the quarter, KBR booked $5.6 billion for the Ichthys LNG project, about $100 million less than we indicated on our fourth quarter call, largely due to currency fluctuations. The first quarter of 2012 saw 2 significant…

Thanks, Bill, and good morning, everyone. You've all seen our press release on Q1 earnings that we put out last night, so I won't go on into a lot of detail already covered in the press release. I do, however, want to spend a few minutes walking you through some of the more significant financial items in the quarter that we want you to take away from the call. The first is on general and administrative expenses. First quarter G&A was $55 million, up $11 million from the first quarter of 2011. You'll recall that last year's first quarter had timing issues on several cost items for facilities, IT and incentive compensation programs that push those costs into the second quarter. The G&A expense for this quarter is a more normal amount and is within our expectations for our full-year 2012 corporate G&A expenses between $240 million and $250 million. The full-year 2012 corporate G&A expense guidance also includes an estimated $20 million to $25 million of costs related to the new ERP system. The second item is related to our overall effective tax rate, which was 9% in the quarter. Within that 9% range, we had 2 large discrete tax items that drove the bulk of the delta versus the 27% operating tax rate. The first item resulted from our equity ownership at the FreightLink JV, where final tax returns identified operating losses for the final year of operations, which provided a tax benefit in Q1. The second item is related to ongoing transfer pricing agreements. Reserves were adjusted for transfer pricing activity that occurred in Q1. We now expect KBR's full-year 2012 effective tax rate to be in the mid-20s. The third item is related to KBR's backlog. Building on Bill's earlier comments, revenue and backlog as of…

Thanks, Sue. In closing, I'll reiterate what I said last quarter as the conversation remains much the same. KBR believes there's a significant quantity of project opportunities, both in North America, as well as internationally, principally, in the Middle East and Australia. It is likely that some projects will be delayed but we should keep in mind that other unannounced projects are likely to go forward in their place. Ultimately, these projects will get built, only their schedule remains uncertain. KBR's near-term challenge is to continue to devote our resources to those projects that are moving forward and to build a solid pipeline of new awards to further fuel our future growth. With respect to our guidance for 2012, given all the factors we've discussed, we believe the range of $2.45 to $2.80 per share remains appropriate. As I said earlier, there are a lot of moving parts. Some markets have started off a bit slower than we anticipated, while others are showing increased signs of strength. Net of all these factors, we expect Q2 net income before tax to be a bit stronger than Q1, and for Q3 and Q4 to be progressively stronger from there as these new awards move from backlog into the P&L. We have a strong backlog of projects that we'll ramp up as the year progresses, and we are working hard to capture the current and future prospects in the market, both of which will help drive progressively stronger performance over the balance of the year. Now we'll take your questions.[Operator Instructions] Thank you.

[Operator Instructions] We'll go first to Scott Levine with JPMorgan. Scott J. Levine - JP Morgan Chase & Co, Research Division: So a question regarding the markets, obviously, a lot of puts and takes in terms of which are getting better, which are getting worse. I mean, if you could summarize, maybe Bill, as a whole, are you feeling like the markets are recovering in line with your expectations, maybe if you could highlight 1 or 2 markets, which versus the last call or maybe 2 calls, which are getting progressively more visible, and maybe which are becoming a little bit cloudier?

I think the markets that are getting more visible for us are clearly Canada and the Middle East. I just see that the amount of bids we have outstanding in Canada is as high as I can remember. The -- our positioning on those, I think, is very good. I also still believe that the last 2 years, the Middle East have been slow. Last year, there were a lot of political issues in the area but as we look at -- look out at our prospects list of projects that we're chasing in Middle East, it's as strong and as diverse as we've seen in some time. So I'm very much encouraged by the Middle East and Canada in terms of their relative improvements. I also think Australia remains a very good market for KBR. I wouldn't put that in the improvement category because it's always, for the last 18 months, has been a very strong market for us and I think continues to remain so for the near-term given some of the LNG minerals work and infrastructure work we're doing in Australia. North America is coming back. I think I talked a little bit about some of the delays we're seeing in awards coming out of our North American government business. We think, in part, because of the discussions on future activities in Afghanistan and the budget constraints, which also impact, a little bit, the International Government Defense business. But we do believe those awards are going to start trickling out or start coming out in the second quarter. So we think of that as more of a delay as opposed to a dramatic change from our expectations. Building Group is seeing some good markets in the residential, multifamily housing, as well as manufacturing. But some of the…

Sure. As we look at it, we haven't really changed our stand, Scott, in terms of the items that are available to us, which is obviously, the return to shareholders with share repurchases and dividends, as well as investments, either organic or through M&A. As we've gone through the first quarter, obviously, as you can see, the share repurchases were about 205,000 shares. So not a great deal of purchasing. Again, we look at cash and what some of the opportunities were and we made our decisions along with that. M&A, obviously, is something that we still look at but it needs to be something that fits into the portfolio and that is at the right pricing. And so we'll just maintain our stance on what we're going to do with that and look at the individual opportunities and go after the ones that have the greatest return for us.

Moving next to John Rogers with D.A. Davidson. John Rogers - D.A. Davidson & Co., Research Division: I guess as a first thing is, Bill, you gave us some numbers on backlog and the job income in the backlog, and then you referenced the 12-month backlog, any comment on the job income in the 12-month backlog, is that also growing?

We don't calculate that specifically. The comments related to the 12-month backlog come out of our Q where we talk about how much work will be executed over the next 12 months. I would postulate, I think postulate is the right word, that the job income backlog is following the increase both on a 12-month basis, as well as an absolute basis. We're seeing the -- on some of the lower-margin projects, Skikda is going to start up this year. We're going to be finished construction in Scravas [ph] by the end of the year. And so I think that would logically follow that the job income backlog should be increasing from the 12-month period, as well as in addition, to the overall backlog. John Rogers - D.A. Davidson & Co., Research Division: Okay. That's fine, I just want to confirm because you talked about some of these projects slipping out, I just wanted to understand how that flows because, I mean, it seems as if with your backlog is scheduled at -- and I know it's very early but it still seems that you should be growing into 2013 with what you have now, at least on the top line. Is that fair?

Well, yes, a lot of it -- well, I think that's our expectation, John. I think -- we've got to make sure that some of these -- we're starting to see that with the Sadara award and some of these awards in Canada. We're expecting to announce in the near future that this is continuing to be manifested by accomplishments not rhetoric. We still got to get through what's happening in the -- in our government businesses, because I think they did come in a little bit lower than we had hoped, in terms of the award base. But if things go according to plan, in allowing the shifting mix of projects into and out of our near-term horizon, I think we should see a building of the earnings of the company as -- particularly later in the year as these projects move from new awards into the P&L and into 2013 as well. John Rogers - D.A. Davidson & Co., Research Division: Okay, great. And if I could, any update on collections from Mexico?

The collections from Mexico are sitting with the initial judge who has been asked to consider what, if any impact, does an action of a Mexican court have on his initial ruling. And so we remain confident that based on our analysis, that it shouldn't have any impact and that when the judge gets around to issuing his opinion, that we think it will be another step forward to getting that issue resolved.

Moving on to Steve Fisher with UBS.

Not sure if I missed it, but any way you can quantify what the mining charge was in the quarter and what happened between February and March and April on that project?

Sure, Steve. As we put in, in some of the materials, the charges in the Minerals business unit were about $8 million in the quarter, with the majority of it being on one of the projects that we talked about in Q4. And so now that project is entering the commissioning phase. We think we've got it under control but what you saw in the first quarter was just revised cost estimates to get where they needed to be and the charges associated with that.

Okay. I guess just shifting gears, on to the Downstream side of things. It was kind of light in the quarter but, Bill, you mentioned certainly some acceleration in that market, so I guess I'm wondering what kind of projects and activities I do have plans specifically for the second half of the year whether we could see a ramp up there sooner than later?

Well, I think we have some good prospects that are in the Middle East area, not necessarily in the classic Middle East, on the Arabian Peninsula, but in and around that area that we think will go forward second or third quarter, some joint ventures we have with other players, as well as projects we're pursuing on our own. Back on the U.S. side, there are a number of olefins facilities that have been proposed, and we're having dialogue with those sponsors. They are mentioning phrases like, we want to be first to market to capture the advantages, et cetera. And so we're working towards them on those projects but we keep -- we're mindful of what it takes to put these projects together and I think we've got good proposals outstanding or good mature dialogue with the customers that will lead to proposals to see that business grow. I think what you've seen in Downstream is the -- we're probably about 17% through the engineering on the Lobito refinery project, which was ramping down in the first quarter. We've seen a ramp up in terms of the staffing we have at Yanbu, but that's lower-margin work than -- because it's field work, than what we do in the home office. Clearly, we're going to be ramping back up on Sadara, particularly in Kingdom with our PMC activities on that project. So there's a lot of things going on. And so I think the business will grow. The margins may be a little bit challenged compared to historical standards because the mix is moving more towards field-type activities as opposed to what were predominantly home office service PMC type of activities that we saw throughout a lot of 2011 and tailing off into the first quarter of '12.

Okay. So it's more of a mix issue and so -- I mean, do you think that the margin there would deteriorate from here as the year goes on or kind of flat or could it even improve?

I think the revenue will grow. It's unclear right now about the mix and I say this simply because we're adding a lot of folks in the field and as we bring in the engineering margins, that will be accretive to what we're doing but it's also something that may be diluted by the growth we're seeing of field revenues. I feel more comfortable talking about the advancement of revenues in Downstream and I really can't point you one way or the other on the margin side, just because of the increase in the field component of that revenue increase.

Moving on to Jamie Cook with Crédit Suisse. Jamie L. Cook - Crédit Suisse AG, Research Division: Two questions, I understand, you said your first quarter was in line with your expectations and the street was probably off a little. But one question, is there any area within the first quarter that was better or worse than your expectations, even though you sort of netted to where you thought you would be? And then I guess as you think about -- as we now have one quarter under our belt, are you more or less confident with the higher end of the range given where the first quarter ended and just given as we talk about some of these pushouts and projects, I'm assuming that's probably more of a 2013 impact but I just want to be sure? And I'll get back in queue after that.

First quarter expectations, I think we were pleased with the volumes we saw in hydrocarbons and that continues to be a business that's growing. I think it's a strong business for us. It's clearly the most demonstrable advantage business we have in the portfolio. The other businesses were okay, IGDSS continues to complete their fixed-price work in Afghanistan, nicely and that's helped their margins in the first quarter. We're disappointed with NAGL in the North American government business, from an award standpoint and it's obviously difficult transition, the conclusion of LogCAP III but we've been talking about that for 6 years now. That was going to wind down. But I think it was -- we're expecting it to be a little bit challenging from an earnings standpoint given the fall off in LogCAP. Kind of where services would've done a little bit better. We did okay on G&A. We did okay on labor cost absorption, hydrocarbons was pretty strong. As you look at the -- your question on the year guidance, we took a hard look at that and we think there are scenarios where we can get to the high end of the range and can even get beyond that but you have to look at the distribution of we could be higher, we could be lower, and Sue and I concluded that as we looked at our guidance, that we felt that the $2.45 to $2.80 was felt the best, and we didn't feel compelled to change the guidance at this point. I think what's going to be critical for us as we look at the second quarter is how much of these projects that we expect to be released in the North American government business, in Canada and some of the other markets, what kind of impact…

Well, we think the upside could come from Canada. It could come from some awards in NAGL, because we've got a big backlog there and some of the awards we're talking about would have a very quick book to burn. Some of the Canadian stuff that we're looking at signing wouldn't immediately go into earnings and one project would have a book to burn in 11 months. So we see those as being the real leverage points for us in 2012. They are the most obvious ones from our perspective.

And Andy Kaplowitz with Barclays has our next question.

Bill, in Services, I guess I just don't understand what's going on. I mean, the U.S. economy is doing a little bit better. Your backlog has been up over the last several quarters and your revenue has been going down. So I'm just kind of wondering what's going on in that segment?

Well, within Services, we've got 3 large projects in Building Group: The Boeing construction in Charleston, South Carolina; Children's Hospital in Birmingham; and the Duke Cancer Center, which all went forward in 2009 that are coming to a close. And they've been just great anchor projects for our Building Group business. As they wind down, we're seeing a lot of projects in the $20 million to $50 million range. We've got a lot of verbal awards on those that will trickle into backlog during the year. But we don't see replacements for those big 3, which were all in the $200 million variety for us. Within the other parts of Services, Canada was particularly slow last year, we're seeing that. We're much more encouraged and very bullish of what we see in Canada for this year, that should help pick it up. The Industrial Services business, we continue to see our customers do what they can do to defer maintenance. It's a very competitive market out there for them and they are looking at ways of not cutting our staff but cutting the maintenance spend around these and I think that's maybe a consequence of us doing a really good job of maintaining the facilities and that the construction to replace stuff is a lot less with our involvement. And we're still trying to get better traction on U.S. Construction. We've got a lot of work that our construction teams are doing at Kemper County and other projects. But those construction activities are showing up in the business units because we book the construction component on EPCs within the business unit and the only thing we're booking in U.S. Construction is the construction-only projects that we're pursuing. But we've announced Devon [ph], we've got a couple others that we're looking at that we think we'll see that build. But I would say, over the last 12 months, most of our construction work has been as part of EPC projects and quite honestly, the field staff that we have, we made some comments where we have previously and this is what I recall having said, maybe 6x as many people in the field at the end of 2012 -- 2011 than we had at the beginning of 2011 but all those have been driven into EPC projects showing up on other business units.

That's very helpful, Bill. Just shifting gears. On LNG, I mean, you guys are a leader in LNG, obviously. The U.S. LNG opportunity has really come up I think, it's been out there for a while but people are believing in more, I think, over the last few months, and of course, there's lots of big Australian projects out there. How do you sort of weigh the 2 in terms of prospects now as you look at them. I mean, obviously, there's some monster Australian prospects out there. We often get questions now, about can both regions go forward, do you now see the U.S. or as you said, Western Canada being better prospects than some of these big ones in Australia, I mean, how do you kind of look at that and maybe throw in gas to liquids as well?

Okay, well, that's -- some may take the next 1.5 hours talking about that answer but I'll try to be -- succinct on that. First of all, in the LNG markets, we think that there still will be demand growth in China and maybe a little bit lower growth rate than we see in the past. But the structural changes we see going into Japan movement from the nuclear fleet to the gas fleet, we think will continue to maintain a robust demand for new natural gas supplies going forward. Now in terms of where the supplies are coming from, we do worry about the labor market in Australia, and we can land ex-pats in Australia for about the cost of what we're hiring directly for construction workers. And you've got a very high cost situation in Australia. You get some wonderful resources and so there is some viability there in Australia, but we also want to hedge our bets. You did not mention Africa and we think some of the East Africa LNG reserves that are very prolific will have structural cost advantages for construction in East Africa compared to what we're doing in Australia today. So you've got to factor that in and that's why we're very active in East Africa, on Mozambique and some of the projects being proposed there. Within North America, we also are looking at how do we place our bets there. We obviously see and believe that British Columbia is a good place to be. It's going to be a good export market. Much closer to Asia than a U.S. Gulf Coast facility. But we are looking at how do we participate in certain U.S. Gulf Coast facilities that we believe the sponsors have the wherewithal, the market presence, the vertical integration in the U.S. markets to be an effective developer of an export facility in the U.S. Not necessarily relying on purchasing gas at NYMEX but having their own equity gas in the U.S. in the shale formations that can be used to fuel the LNG liquefaction. So net-net, Andy, we're spreading our bets, we're aware that Australia has perhaps some geographic advantages but some cost disadvantage regarding the construction of these facilities. East Africa, I think, is a new entrant in this market that could be -- could give some much lower cost options compared to Australia. And then we're trying to spread our bets here in North America to see how that market evolves, both in terms of shipping gas to Asia and in possibly shipping some further gas down to Latin America.

And our next question will come from Joe Ritchie with Goldman Sachs.

So just following up on Andy's question there on LNG. Just specifically, it sounds like the opportunities in the U.S., North America could be large opportunities over the next few years. I guess my biggest question is really on Australia, we're not expecting any major financial investment decisions for any greenfields projects this year, but next year you've got Browse and Arrow. Have your conversations with your customers changed at all regarding the viability of those projects moving forward?

Joe, I think it's mixed. In Australia, we're tracking 4 projects. You've got an addition to Browse and Pluto and Arrow, you've also got the 4 Train at Gorgon. And a lot of it gets back to just how prolific are the gas reserves and what is the marginal cost of building facilities. And when we've seen some discussion in the press and this is not any inside information to KBR as gathered, but there are questions being raised, of should the gas at Browse go to the Northwest shale where the assets are already constructed, which some people feel is running out of gas in the next couple of years, or should that gas go to a newly constructed LNG facility. So a lot of things moving around there in terms of what's the optimum way of monetizing gas resources and so that's one question around Browse. If you look at Pluto, very compelling economics given the foundation project and the investments that Woodside has made. Pluto 2 and 3 should be very attractive opportunities for them when they do find the gas and elect to move forward on that. Gorgon 4 the same way, a lot of installed infrastructure on the first 3 trains. On Arrow, obviously, Shell and their Chinese partner do have access to a market. And Shell's got a leading LNG position in the global LNG market. So there are a lot of dynamics going on that you can't really say, this one will go forward this won't but you can see with the discussion going on that there is a concern of how you best rationalize the resources of gas in Australia, particularly where the broader competitive environment against North America and East Africa gas to develop good projects.

And do you see -- that's great color, Bill. Do you have any sense on timing on when this all shakes out and we have a better idea as to how those decisions will move forward?

Well, the -- what we said is we're going to submit the EPC bids on Browse midyear. We're still doing work on Pluto. And I think Pluto, they've got to a very positive milestone of having first gas and are getting ready to ship their first cargo. The Gorgon FEED, it's pre-FEED activities are progressing on and we think they'll move into FEED at the -- by the end of this year. Arrow, the project -- that's a little bit disconnected from the others and that will have its own independent life cycle but we're going to continue to try to play as much of them and make sure that we have all the bases covered as KBR. So that as those projects move forward, we can prepare to move forward with the ones that have the best chance of moving forward and the highest probabilities of achieving FID.

And I guess one follow-up question. As we think more near-term into the second quarter, you mentioned that some of the tenders in Canada have already been awarded. Is there any color that you can give us on the magnitude of what you've already booked in the backlog in the 2Q and how we should be thinking about whether backlog is going to grow in 2Q or not?

I will tell you that Canadian backlog will definitely grow in Q2. The awards, to date, have not been booked in the backlog. We're thinking we could, as early as next week, see the contracts be signed. And that would be significant in terms of the overall book to bill. We're going to watch that closely. And the reason I say we're going to watch it closely is if you remember Sue's comments on the accounting for Ichthys, we booked our 30% share of that project of $5.6 billion into backlog this quarter. But as it goes into earnings, you're going to see the equity accounting take place on that. And so Ichthys will start winding down over time but we're optimistic that with the prospects we see in front of us for second quarter, that we really do believe we can get a book-to-bill greater than 1.0.

Moving on to Chase Jacobson with William Blair. Chase Jacobson - William Blair & Company L.L.C., Research Division: Just a quick question on the Ichthys project, I think in the press release, you mentioned that the gas monetization job income was up partially because of the activity on that project. And from the way I thought you described it in the past, it didn't seem like that project was going to be a major contributor in 2012, or at least until later in the year. Is that moving faster for any specific reason than you thought?

No. From our perspective, I don't see that as having been a big contributor to gas mons results. It was nice to have in the first quarter but not anything that really moved the needle in gas monetization at all. It's a big project and I think it's going to continue to ramp up according to the expectations we all discussed on our last call. Chase Jacobson - William Blair & Company L.L.C., Research Division: Okay. So won't be more meaningful until later 2012, 2013 is how should we look at it?

I'm sorry? Chase Jacobson - William Blair & Company L.L.C., Research Division: It should be later 2012, 2013, we should see that pick up?

We had a pick up -- we start out with a certain amount of earnings first quarter, it should increase second quarter and continue to increase over -- through the end of '13. And maybe beyond that depending on the S curve.

Right. And Chase, I think one of the comments in terms of the contribution of Ichthys is as you look at it, Q1 of 2012 was the first quarter that it appeared. So on a year-over-year quarter-over-quarter basis, obviously, that contribution is good because it was its first quarter that we had it.

We'll also offset some of the ramp down on Pearl and some of the other projects in the portfolio. So between Gorgon and the other projects that they're pursuing, it was a really good quarter gas month. Chase Jacobson - William Blair & Company L.L.C., Research Division: Okay. And just a modeling question with the new breakout of Infrastructure and Minerals, from what we can see, there's obviously been a pretty wide range in the margin, in the job income margin in both those segments. Can you just -- can you give any color on how we should be thinking of it or looking at Infrastructure and Minerals -- I'm sorry, at Infrastructure, it looks about 35% to 20%, is that -- I mean, is 35% kind of a peak that we should be looking at or is it mid-20s? Any color there, I would be grateful?

What are your units? What units are you referring to when you say 35 and 20? Chase Jacobson - William Blair & Company L.L.C., Research Division: The job margin?

Well, the job margin, Infrastructure was benefited by a gain share on a project in the first quarter of '11. And I believe it was we said $10 million. And that drove in an inordinately high margin. If you peel back the Infrastructure business, we're running primarily a consultancy in Australia, and that delivers 20%-plus job income margins. Now what you're going to -- what I expect to see going forward is that the job margins related to the consultancy business should stay about at that level and the volume of work should stay reasonably consistent. Where that business is growing is we're growing doing projects in the Middle East and doing some EPC work in the -- through joint ventures in Australia. And I expect that because of the way we account for those, we'll see the margins on that segment of work be less than the plus 20%. They may be in the low teens because you're dealing with a lot of pass or so. If you think about Infrastructures having a baseload of consultancy work, that ought to be in the 20% range and then a lot of the growth we ought to be seeing out of Infrastructure would be in the -- I'd say the 11% to 14% job income range where that marginal work would be the driver of the increased revenue backlog.

Moving on to George O'Leary with Tudor, Pickering. George O'Leary - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Maybe just looking for a little bit of incremental color on your U.S./North American market opportunities, if you could kind of rank those by segments, LNG and maybe even talk about Canadian versus U.S. versus the pet chem and ammonia build out and then Power, kind of where you think the most strength is and from a timing perspective, what hits more quickly?

Well, obviously, the biggest opportunity we have is the Kitimat project of this year, which will be multibillion-dollar award that we'll be doing EPC. That is going to dominate any other individual project we see this year in North America. I am excited about what we're seeing in Canada. We've talked about the $2 billion in awards and we feel with the verbals we have in some of the other prospects, we could have a very good year in Canada, from a backlog growth standpoint. I do like our position in Power. We did win one pollution control project in the first quarter, we've got 3 fairly large bids we're pursuing right now in Power and we think our expectation and hope is that we'd get one of these 3. And so Power does have some opportunities. We're seeing some steady industrial work, we are also seeing some pollution control work start being talked about by our customers. So Power is pretty interesting for us. Downstream and Technology, I think you just packaged those up between the ammonia, ethylene and olefins facilities. We see a lot of stuff and we think those will be strong and I talked about the story around the ammonia market, so I think the Gas Mon, the Canadian operations, Power, Downstream and Technology should all have very good years in North America. George O'Leary - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Great. And then maybe just one quick follow-up. For a new ammonia plant, given that they haven't been built in the last 35 years, can you kind of quantify to what potential, maybe just on your average size, ammonia plant that would be built out?

Not off the top of my head but if you want to go back and figure out the -- if you go back and look at our earlier reports on the EBIC ammonia plant, I think that was the 2008 annual report. I think we're pretty clear on how big that was. I just don't remember what the cost was on that, George. So forgive me for having a senior moment on that but the 2,000 ton a day ammonia plant is about where the state of the art is on ammonia plants. And so you can find that in some of our historical data pretty easily.

And our next question will come from Martin Malloy with Johnson Rice. Martin W. Malloy - Johnson Rice & Company, L.L.C., Research Division: Could you maybe give us an update in terms of your initiative for providing more direct construction services to your customers and when that might impact margins?

We're continuing to evolve discussions with some folks in Australia on that. We expect that we ought to be able to conclude a business plan and arrangement later this year. We wouldn't expect to see any tangible margins or work coming out of that venture and so probably the second half of '13 is my best guess right now. We're going to be -- and again, that's the greenfield path we're moving on now. If we were to elect with this venture, get to market earlier through an acquisition, well, that would change that statement but just in the way we're looking at it at present, building this thing brick by brick, it's probably second half of '13. Martin W. Malloy - Johnson Rice & Company, L.L.C., Research Division: Okay. And then on the Kemper County plant in Mississippi, it looked like it got an important approval from the PSC in recent days. Could that be a meaningful impact to your backlog this year?

I'm not aware of the approval. I knew there was a remanding back from a court in Mississippi to the Public Service Commission to document the details surrounding the permit for convenience and necessity. I believe that might be what you're referring to. We're expecting to see that. Kemper County was fully -- was pretty well-booked into our backlog last year. The engineering has been booked in the backlog. We did book a couple hundred million on the construction. We may see some scope growth on that. I'm not sure yet but any meaningful changes to our backlog related to Kemper County, we're not seeing. We'll probably seize the normal type of scope growth around that but nothing in terms of big lump sum changes in our awards.

Moving to Robert Norfleet with BB&T Capital. Robert F. Norfleet - BB&T Capital Markets, Research Division: Most of my questions have been answered but just one on the backlog as it exists today. I know you to talked that after booking, your thickest backlog. Terms of fixed price work is up to 38% versus 25%, largely due to that contract. But I guess I wanted to get your sense, as we start looking some of the Sahara works and Canadian works, some of the North American work, how do you see the fixed price/cost reimbursable dependent to backlog looking over the next 2 to 3 quarters? And indefinitely, do you see because of the higher fixed-price works, should that have a positive benefit on the gas monetization margins?

Generally, as we look out at the future work that we're looking to book, the bids in NAGL, North American government defense -- and we expect the awards will be predominantly cost plus. We look at the Canadian work, that's also going to have either cost plus or unit rates. It gives a lot of deviations on scope. So I'm not expecting to see these near-term awards impacting the amount of fixed-price work in the backlog. What I do expect is that when we look at a project like Kitimat, we would have a significant portion of that being lump sum. And certainly, the areas that we're very comfortable doing, lump sum, the home office services, the construction management, the procurement which is we believe is largely back-to-back with bona fide suppliers to us can be good opportunities on the margin side without a lot of risk. And I'm not saying there is no risk but it's certainly manageable risk and risk that we've successfully managed many times over on prior projects. So I think we're kind of where we are now. I know on the IMPEX project we have, some of the scope is remeasured and what that means is today, it's cost plus and the fabrication yards but once we get the designs complete for the fabricated modules and we can give those to the fabricators, the fabricators now will be able to estimate their quantities, they already know their productivity so some of that work that's currently reimbursable will convert to a lump sum but in a very, we think, prudent and manageable risk format. So we still could see some movement in the next couple of years, on the amount of fixed-price work on INPEX, but I think it's thoughtfully put together in terms of at what point do we undertake the fixed-price risk and with respect to the fabrication we're doing so on what I believe are an appropriate level of known knowns such as quantities, weights and productivities that we think we're very capable of handling as KBR.

Moving on to Matt Tucker with KeyBanc Capital Markets.

My first question is a follow-up on how the first quarter results compare to your guidance. In the prepared comments, you indicated the results were consistent with the guidance although you also mentioned that you now expect the tax rate to be lower. So can you just clarify were you expecting the discrete benefits that you saw in the quarter when you gave your initial guidance? And just more importantly, excluding those benefits, how did the kind of operational results compared to your expectations?

Let me try to take on some of that. So as you think about the full-year guidance and the tax rate, we gave an overall 2012 tax rate of 28%. That did not include any of the discrete items and by their very nature, a discrete item is not going to come through until an event happens, which is what happened in the Q1 items that brought down the effective tax rate. So as you look forward, again, you're not going to plan for those in how we're trying to give you guidance in terms of modeling the overall tax rate. So I think that helps you with that piece. In terms of how it plays in the guidance, I mean, guidance of $2.45 to $2.80 is going to take into a lot of different moving parts, the tax rate is one of them, obviously, performance in all of the businesses is going to be another, our forward looks. And when you meld all of those things together, you can kind of get back to where we're at. So while I would say that we didn't model those discretes into our guidance and we haven't changed our guidance, that there's lots of moving parts and there's -- and it's very early in the year. So sort of stay tuned from an overall perspective, the operating tax rate is -- was right around 27% for the quarter in Q1.

Then moving on to a couple of your large LNG projects, Kitimat and Browse. It sounds like on both of those, EPC tendering is going on and could potentially be completed well ahead of the FID on those projects. I was wondering if there's any potential that we could hear any announcements on the results of the EPC tendering ahead of the FID decisions or if we should kind of assume that we won't hear anything until the products reach FID?

You probably won't hear anything from us until the ink is dry on the contract.

That makes sense. And then final question. You mentioned some GTL opportunities in the U.S., hoping you could just provide a little more color on kind of your expectations, when you see maybe final investment decisions on those projects occurring, how confident are you that we could see some GTL get built in the U.S.?

I'm pretty confident we will see GTL getting built in the U.S. The cost of oil is $18 per million BTU. The cost of gas is $2 or $3 a million BTU, that's a pretty wide spread that should be able to support the construction of GTL. I think we'll see several projects move forward. I think you'll see FIDs -- I'm not anticipating the day FIDs in 2012, I think it'd be more like the second half of '13, but I do believe they will go forward and that there's a very compelling economic opportunity for those sponsors given the -- where I think the oil prices are going to continue to stay in the low gas price environment that we expect to have in the U.S. for the foreseeable future.

And our last question today will come from Robert Connors with Stifel, Nicolaus. Robert Connors - Stifel, Nicolaus & Co., Inc., Research Division: We're hearing sort of the same bullishness on Gulf of Mexico offshore CapEx from some of the service and equipment guys out there. Being that KBR and some of the other E&C agencies are much later cycled, do you believe that Gulf of Mexico work can have a meaningful impact on bookings, probably mostly in 2013, or do you see it mostly as a FEED work starting to kick up?

Well, I see it as having impacts in '13. I think when we first had the Macondo instant, we said we're continuing to be strong with Jack/St. Malo and Big Foot and the work we're doing in the Gulf, but we also said that our impact to be 18 to 30 months later, and lo and behold, here we are 18 months later and we don't have a lot of volume in the Gulf. So we think as it resumes, there's a natural cycle of beneficiation from that, we think the oil service guys and the drillers will have it first. And then eventually, the food chain will get down to the E&C firms like KBR and we're expecting that we'll start seeing these awards come in 2013. We may see some earlier FEED work but yes, you're going to see the big impacts -- you're not going to see any big impacts on this Gulf of Mexico work at KBR in 2012. It will be 2013, it may be towards the second half. Robert Connors - Stifel, Nicolaus & Co., Inc., Research Division: Okay, that's helpful. And then, Sue, since you took over the CFO role, your corporate G&As and divisional overhead expense have remained at a pretty darn good control. And in addition, you're CapEx has pretty much been in line with D&A. So I guess my question is, as you look at the growth that's coming down the pipeline for this company, where will KBR need to invest, because this will really be sort of the first growth cycle for KBR where investors will see it as a stand-alone company?

Absolutely. Well, thanks, by the way, for the commentary on G&A and overhead. So here's how we look at it. There's obviously some areas with growth that you have to win, invest in and to make sure that you've got the right people on the ground to do all of the things that you need to do from a customer standpoint, from a control standpoint and all of that. So obviously, we're going to do those things. However, we're also going to sit pretty hard on G&A and business unit overhead, outside of those areas and outside of proposals, because it's great operating leverage for the company and it's also a good opportunity to make sure that as we invest in this ERP system that we're talking about, that we take full advantage of what it's going to provide for us in terms of automation and being able to do some of the same things with less people. Therefore, you don't have to go out and add. So I think it provides an opportunity for us to do even more work on that part of the business.

Yes. I think as we wrap up the call, I think that was a good call because we are focused on the scalability of the business. We saw that 2 years ago, when we started having discussions on ERP, our Board approved the program last year, we're off to implementation and I think as this rolls out, I think Sue is very correct that we will be able to grow the business significantly with very small changes in what the G&A line would be at KBR. And we remain committed to spend what we need to spend, not necessarily what we want to spend. So thank you all for joining us, I know we've gone a little bit over your time, we appreciate your questions and we look forward to talking to you at the end of next quarter. Thank you.

And this does conclude our conference call for today. We like to thank you for your participation.