Good day, and welcome to the KBR's First Quarter 2013 Earnings Conference Call. This call is being recorded. [Operator Instructions] For opening remarks and introductions, I would like to turn the call over to Mr. Zac Nagle, Vice President of Investor Relations and Communications. Please go ahead.

Good morning, and welcome to KBR's First Quarter 2013 Earnings Conference Call. Today's call is also being webcast, and the replay will be available on KBR's website for 7 days at kbr.com. The press release announcing first quarter result is also available on KBR's website. 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 from each of our business units. Sue will then provide an overview of the key financial takeaways for today's call. Lastly, before opening the call for Q&A, Bill is going to provide brief closing comments. After our prepared remarks, we will open the floor for questions. Before turning the call over to Bill, I would look to remind our audience that today's comments may include forward-looking statements reflecting KBR's views about future events and their potential impact on performance. These matters involve risks and uncertainties that could impact operations and financial results and cause our actual results to differ from our forward-looking statements. These risks are discussed in KBR's first quarter press release issued last night, KBR's Form 10-K for the period ended December 31, 2012 and KBR's current reports on Form 8-K. You can find all these documents at kbr.com. Now I'll turn the call over to Bill. Bill?

Thanks, Zac, and good morning, everyone. KBR delivered a solid first quarter with earnings per share of $0.59, in line with our expectations. Overall, we had strong execution across our businesses, which drove operating income up 19% year-over-year, with operating margins up more than 150 basis points. We also maintained our focus on prudent cost controls in the quarter, keeping SG&A flat year-over-year as a percentage of sales. Additionally, KBR achieved a number of key project milestones in the quarter, delivering first gas at Skikda and first iron ore at Hope Downs 4. Relative to the 5 problem projects we discussed in our fourth quarter call, our execution was consistent with the project provisions we took in the fourth quarter. We had no incremental charges in the first quarter of 2013, and our estimates to complete these projects remain unchanged. Turning to some of the business unit highlights from Q1 and the trends we see heading into the balance of the year. Bookings were generally consistent with our expectations at this stage in the year. We had some key wins in the first quarter and a few wins that trickled into the April time frame that will be booked in Q2. At gas monetization, Q1 job income advanced 32% year-over-year due to strong project execution, increased volumes at several LNG projects, the successful attainment of incentive milestones and a favorable resolution of a number of project close-out items. Looking forward, we continue to expect strong margins in this business through continued strong project execution, continued mix shift away from lower-margin projects nearing completion and the potential for favorable resolution of additional project close-out items. Additionally, we continue to have a very healthy pipeline of future prospects. For the Kitimat LNG project, we are engaged with a customer completing the update…

Thanks, Bill, and good morning, everyone. Let me summarize our financial performance and then go deeper on some of the key areas. KBR had a solid quarter of execution, with job income margins improving 280 basis points over the first quarter of 2012. All of our hydrocarbons business units plus North American Government Logistics, Minerals and Canada improved job income margins versus Q1 2012. Our cost in the business unit overhead and G&A improved $7 million compared to the prior year first quarter, and our labor cost absorption improved from the fourth quarter of 2012 as expected. First quarter revenue was down compared to the prior year first quarter, consistent with our expectations, primarily driven by lower revenues from the Escravos GTL and Skikda LNG projects as they near completion. We did, however, see solid revenue growth in Downstream and Services, where the Services group was up nearly 40%, led by a near threefold increase in Canada operations. G&A was $52 million in the first quarter as a result of lower incentive compensation expenses versus a year ago and ongoing prudent cost controls in all departments, offset by higher ERP spending. We expect G&A to ramp up as we continue our ERP implementation in 2013. KBR under-absorbed its labor cost in our centralized engineering pool by $15 million. This is consistent with our expectations for labor cost absorption expense to continue to be a drag on earnings through the first half of the year and to gradually improve as the year progresses. We continue taking steps to rightsize our organization and optimize costs for the levels of work we anticipate for 2013. We made progress in the first quarter, but we still have significant room for improvement, and this remains an ongoing focus for the company during the balance of…

Thank you, Sue. At this stage in the year, KBR's business is progressing largely as expected. We've had solid execution so far in 2013, and our win rate on new awards has been on par with where we thought we'd be. We continue to see a robust series of new opportunities across each of our 14 market-facing business units. The potential opportunity set for KBR is tremendous, and I'm confident in KBR's ability to successfully win and execute this work, both in 2013 and beyond. Now we'll open the call for questions. [Operator Instructions]

[Operator Instructions] And we'll go to our first question from Jerry Revich with Goldman Sachs.

Bill, of the 15 U.S. ammonia greenfield projects that are in various stages of planning, I'm wondering if you could provide your assessment of how many of those you think actually will move forward? And when do you expect the bulk of those projects to move to EPC?

I think we're still looking at the dozen or 13 we've talked about previously. We've seen a couple move into EPC or go into FID already, and we still think that 6 or 8 of those might go forward in the 2013, 2014 time frame. And we're looking as KBR not only doing EPC, but where it's possible, provide other services. The licenses, we believe we'll be able to maintain our general 50% share of the licensing market, and we'd like to be able to get a couple more EPCs out of this bulge that we're seeing in the North American market.

And Bill, it's been a couple of decades since we've seen a U.S. ammonia new build cycle. Can you just talk about, in this market, the prospects for the EPC work to be linked to the Technology portion? In other words, what can KBR's market share be on an EPC side? And how can that vary compared to ammonia projects we've seen in other markets?

Well, we are trying to -- and I think we were successful in the discussions with Dyno Nobel in linking the benefit of KBR's Technology with its EPC execution. And in contrast to other parts of the world, we are able to vertically integrate our position in the North American market to do both engineering and construction to support the Technology offering. And so we are trying to create as much competitive differentiation as we can in packaging the ammonia project with the EPC, and I think we were successful with Dyno. I can't say that we'll be successful each time out. But certainly, where we can sell the technology, it's a very good scope of work for us. It certainly has the license, the basic engineering design, proprietary equipment associated with the technology. And where we can show the customer the benefits of the integrated KBR Technology provision, as well as the EPC, we're trying to do that as aggressively as we can. So we're clearly better positioned in North America to do this; we've been -- we are successful through the announcement on Dyno Nobel of delivering the integrated Technology and EPC; and we're hopeful that we'll have other opportunities to continue to package these 2 together.

And we'll take our next question from John Rogers with D.A. Davidson. John B. Rogers - D.A. Davidson & Co., Research Division: Bill, just on the ethylene furnaces that you mentioned in the second quarter, I'm sorry, I'm not familiar enough with it, but how big is the total project that these furnaces are being used for? And is there a chance to expand your scope there?

Well, our scope on those, John, we commented, we're right at $100 million for the new furnaces. There is some back end, the recovery section, which is a whole different EPC offering. And it depends on really where the client is. We think, on this opportunity that our scope will be the furnaces, and I believe they've addressed the recovery section differently. But in other opportunities, we'd like to be able to get into the recovery side as well as the furnaces. But clearly, with our technology and the ability to do the linked EPC, it's a much better opportunity for us to differentiate our offering than the recovery section, which is more generic or vanilla in terms of its ability to be technically differentiated. John B. Rogers - D.A. Davidson & Co., Research Division: Okay. But in terms of the larger ethylene projects that we're reading about, I'm just trying to understand the linkage there and the opportunity for KBR.

Well, the new ones, it's -- we've commented previously that if it's a greenfield project, we're not -- we believe our technology does have a little bit of limitation in this low gas price environment. The technology is a very sophisticated technology. It gets a very high yield, but the cost of the facility and the cost of the license when one has a much lower natural gas price environment is probably less advantage than in a higher gas price environment, because the premium for yield, the increased yield is not generated. Also, our technology has been a little stronger on naphtha than on methane. So as we look at these, some of the greenfield ones, where they're starting without any other furnaces or beyond replacements of our existing furnaces, I think we're probably less differentiated than we are where you've got an owner that's very familiar with the SCORE technology, wants to see the consistency of the technology across multiple furnaces, and that's where we see our niche in the ethylene side.

And we'll take our next question from Andy Kaplowitz with Barclays.

Bill, I know you said you would update us in July, but you know we're going to ask you anyway. The EPS range is still really wide, and 1Q would put you close to the bottom of the range on a run rate basis. I know you've said before, you're expecting improvement throughout the year. We know you want to be conservative because of the problem projects that are not finished yet. But if they behave, could you actually trend to the higher end of the range?

Well, I think, Andy, as we've looked at our guidance -- and you are correct, we're not going to update the guidance on this call. What we said at the beginning of the year is our position. We had -- back in the call in February, we had said we believe we had provisioned those projects appropriately. Certainly, if we do a better job, mathematically, that could be a positive for us but that remains to be seen. And our comments today suggest that we're right on schedule with where we thought we'd be with these projects. We also talked about the ramping up of the business, and we said we had to sell work in the first quarter, and we're marching along our steps as we have thought. And so how you ought to interpret our comments is we are where we thought we'd be today, given our guidance in the first quarter, and without trying to get precise or get outside of our normal practice of updating in July, our guidance remains where it is. Bryce D. Humphrey - BB&T Capital Markets, Research Division: Okay, that's helpful, Bill. Maybe I could ask you your sort of confidence level around backlog over the next few quarters. You did -- you are going to book the $600 million ammonia job. I mean, it sounds like from your prepared comments that everything is sort of in line with what you expected. But as we look over the last 3 months, have you had -- have you seen more activity around sort of medium- to large-sized projects, or less, or is it just kind of right in line with what we thought in terms of backlog growth expectations?

I think, Andy, as we look at the backlog, we are not envisioning big awards, big EPC awards, this year. We think this year will be a FEED-driven year for us. Given the fact that we're working off backlog on Ichthys that's EPC and we're adding backlog that would largely be FEED, we probably would expect to see a backlog decline on revenues. But as we look at job income, because we generally make a higher margin on job income on FEEDs and the engineering services than we do on the overall average EPC that -- we don't see that type of erosion in our job income backlog because of a mixed variance as we progress throughout the year. So while we would expect to see the revenue fall off, I'm not sure, from a job income standpoint, we would see that fall off at all, given the type of work we're expecting to book on the FEED side over the next couple of months.

We'll take our next question from Jamie Cook with Crédit Suisse. Jamie L. Cook - Crédit Suisse AG, Research Division: Sorry, I have to follow up on the guidance question as well. Bill or Sue, I mean, when you guys guided last quarter in terms of how we thought about the earnings first half versus second half, Sue, I think you said $0.90 to $1.10 for the first half of the year, and we're already sitting at about $0.60 for Q1. So I just want to understand, is there any -- I don't know. Is there anything that's going down meaningfully in the second quarter that would imply an, I don't know, $0.30, $0.40 -- or $0.40, $0.50 number in Q2? And then my next question relates to Technology, where the job income and the margins have been very good if we think about 2012 versus 2011 and with some of the ammonia projects stuff you're talking about. I'm just wondering if you can help us whether -- what type of growth we should see in those markets in, I guess, 2013 versus 2012?

Wow, that's 2 really big questions. Sue, you want to take a stab at the first one? I tried on the last one.

Sure. Well, first, Jamie, you... Jamie L. Cook - Crédit Suisse AG, Research Division: Well, you did say $1 in the first half, come on.

I said $0.90 to $1.10, that is correct. And... Jamie L. Cook - Crédit Suisse AG, Research Division: And we're at $0.60, so the math doesn't work.

Well -- so what we really did is we've looked at the entire year and gave our best estimate of the first half. We're really not going to update any of that, but we don't expect to have -- see anything in the second quarter different than the good execution and the good project work that we've seen in the first quarter. So while we're not updating it, we don't expect anything to drop off in the second quarter, in terms of our execution and our cost control. Jamie L. Cook - Crédit Suisse AG, Research Division: Okay, great. And then just on the Technology side?

Well, the Technology side, Jamie, we had a really outstanding fourth quarter in terms of our bookings on several ammonia plants. We would expect to see those volumes continue to be worked off throughout 2013 and maybe a little bit into '14. We are hopeful that the great sales efforts we're seeing all over the world in ammonia will continue. There does seem to be -- the continued activity in North America, we believe that there are some market rules changes in India that will allow us to see a couple of ammonia plants to move forward in India. We see pretty much steady the rest of the world, so we're optimistic that the Technology can continue on the growth platform. Now as we look at margins, we are -- as we expand the scope of our Technology offerings from just the basic engineering and design and license to a package that includes a higher level of proprietary equipment, the job income on each of those sales is increasing, but the margins are declining because you're not getting the margins on proprietary equipment that you get on the intellectual property or the basic engineering design. But overall, we're very pleased with the scope expansion that our Technology teams have driven into our offering, and we'll make more money as a result, and we'd be happy to trade off more money in exchange for a little bit lower margin on the Technology business.

We'll take our next question from Steven Fisher with UBS.

You had called out $38 million or about $0.20 of positive contract estimate revisions in hydrocarbons and, I think, specifically in gas mon. Can you just talk about what that is? And is that for Australian projects that are ongoing or maybe some of the legacy projects that are ramping up?

Well, yes, you're referring to some statements we made in the Q about those adjustments. We did see an expansion of our scope of work on Gorgon during the quarter, which increased the backlog on the Gorgon project for us. Now that also had the offset of reducing percentage of completion, and that explains a little bit why minority interest was light in the quarter compared to what we've been running traditionally. So that was an impact. We did have a couple -- we did -- as I've said, we had our first LNG shipment out of Skikda. That took away some of the risks that we had during the commissioning of the plant, so we had some of the recoveries there, funded liabilities, which were in our budgets for 2013, and we're continuing to work on some of the other items on Skikda now that we're producing gas there. Ichthys and Escravos were pretty much as expected.

Okay, that's helpful. And then, Bill, previously, you talked about China partnered with some other companies for construction on U.S. ethylene projects where you don't have the technology but you could provide the construction services. Can you just give us an update on where you stand with that?

Yes. We have -- we're continuing to look at those opportunities, Steve. As we've talked about, in our construction-only business, U.S. construction, we're continuing to pursue reimbursable opportunities until we see a settling down of the Gulf Coast craft market. That's probably been -- I think it's prudent for KBR to date, given the experience we've had in the last 2 quarters. It may keep us out of a couple of opportunities where the owners are looking to get fixed-price construction. But if someone is -- feels comfortable doing the fixed-price construction, then so be it. But we do feel comfortable looking at the integrated EPC and doing our construction there, and we're very pleased with how that turned out on Dyno Nobel. But those opportunities are not -- maybe not as voluminous as we'd like. A lot of stuff continues to slide, and I think owners are still, from their perspective, doing the prudent things of seeing if, in the market, they can get a lump sum construction for that piece. They're looking for it. And so that's probably taken away some of the opportunity set for us over this year and may affect us prospectively through 2013.

We'll take our next question from Tahira Afzal with KeyBanc Capital.

First question is, I think you, Bill, have already sort of answered it, but I know you've had good close-outs and good execution on a couple of your largest projects. As you look out to later half -- latter half of 2013 and into 2014, is the job income on the hydrocarbons and, specifically, gas monetization side, going to continue to directionally point up even though we've seen a couple of large closeouts over the last 8 months?

I would say that, as we look at the portfolio in gas mon, we expect to have FEED awards that will increase volumes at gas monetization in the second half compared to first half. Our execution on Gorgon and Ichthys, Gorgon should remain constant; Ichthys should continue to ramp up. We expect that Escravos will complete, but we really haven't had material impacts from Escravos in the P&L for some time now. And then on Skikda, while that closes out, we still have some claims with the customer regarding the extension of time and the liquidated damage provisions that we took a couple of years back that we hope, now that we are producing LNG, the customer will take a more favorable view of our performance and be willing to assess more openly the issues that gave rise to these charges that we took, and particularly related to subcontractors of our customer that we used who had a contribution to these delays. So I think you could see some continued momentum in the earnings growth at gas mon for those reasons in the second half compared to first half.

And as a follow-up, the second question is for Sue. You've talked, I think, over the last 2 quarters a little more about your working capital dicing [ph] up perhaps [ph] the DSOs and all. As you look out, is that -- do you have certain milestones we should look forward to in terms of really seeing these materialize in terms of timing?

Sure. Tahira, as we think about what's going to happen in 2013 on working capital and cash flow, all of our businesses are very well aware of where they need to be for the year on these items. We're working it hard. We're disappointed that more of it hasn't materialized in Q1, but we definitely are making progress. And again, the team knows where they need to be and what the problem spots are, and we expect those to be in line with our expectations by the end of 2013.

We'll take our next question from Brian Konigsberg with Vertical Research.

I guess, first, for Bill. You did mention this year you don't expect to see a lot of very large EPC projects, but you had been pursuing a handful of sizable awards in the Middle East, particularly on the oil and gas side. Maybe you could just give us an update on where you stand with some of these offshore projects, like in Abu Dhabi and elsewhere. Are those still viable opportunities for you in '13?

The 2 projects we were pursuing in the Middle East in oil and gas of magnitude were both losses. We were pleased with the commercial offering we put together, and I think we learned some things as an organization working with Korean contractors that we expect to be able to move forward on other bids. Unfortunately, on the larger one, we had, had the low price after the first round, and there was a rebid and another party made a dramatic cut in price to jump ahead of us and was awarded the bid. So both those 2 large efforts were losses, but we took away some positive experiences gained in doing joint EPC with the Korean contractors in the Middle East on oil and gas projects.

Got it. And just, Sue, just back to working capital. You had been discussing the last couple of quarters just about collections from the U.S. government. Can you just talk about where that stands? Are you hopeful that gets resolved shortly? Is that part of the 2013 plan?

It is part of the 2013 plan, Brian, and we're making some progress. But as with most things with the government, it's slow. We expect that some of the funding issues that I described in the fourth quarter call will be easier to get to than some of the closeout activities for -- and forms one with the other part. But we do expect to make significant progress in 2013. And like me say, our team is working that very hard, and we're moving along as we expected we would be through the first quarter.

We'll take our next question from George O'Leary with Tudor, Pickering, Holt. George O'Leary - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Just wondered if you could provide a little incremental color on Kitimat and kind of timing expectations there. I think last we'd heard, it was potentially late 2013. I know Chevron is good for the overall project moving forward, but they're a pretty meticulous customer. And with the review of the FEED, is there kind of a delay in timing around that project?

Well, I'll take the -- first of all, when Chevron and Apache announced their agreement, there were some time to get in and complete the documentation of Chevron officially joining that venture and the exiting of Apache's 2 partners. And I believe that is coming to a conclusion right now, which has, obviously, been an important thing for the owner group -- or the new owner group to get squared away. Chevron is very meticulous, and I think they will pursue the project very thoughtfully and carefully. But given that we're in late April right now and where we are in the discussions, it's -- we're ready to go very quickly with Chevron. But from our perspective, if it does slide into first quarter, then that would be -- or later, we're still very interested in the project, and we'll -- whatever progress the owner group wants to move forward, we're ready to go at any time. George O'Leary - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: All right. That was very helpful. And then from kind of a chemical standpoint in downstream outside of ammonia, what opportunities are you most excited about in 2013? And do you think we could see some more activity around sort of the gas-to-liquids project as we move into '14?

Yes, I do think you could see some more activity on that as we move into '14. We've continued to follow with great interest the developments in gas to liquids, because we believe through our Pearl GTL experience, we have something to offer that's differentiated of having done one of these of such a large scale. And even our experience on Escravos is a benefit there, because that puts us with 2 major GTL projects that are -- that can go on our résumé. So we're hopeful those will continue. Again, the sponsors have to look at what all their issues are. Particularly, as it gets into the siting, what kind of agreements they have with the local governments, how do they want to structure their feedstock, offtake contracts, all of which we don't have any perspective, as KBR, into. But relative to discussions that we're having involving GTL projects, we're pleased with the continued evolution as KBR. And then in the chemical space, certainly, we're seeing a lot more activity in terms of projects in the U.S., and I would think that bodes well for us because of our ability to deliver integrated EPC services on these projects. And our prospect list in our -- principally, our downstream business looks as strong as it's been in some time, driven by the North American market, largely.

We'll take our next question from Rob Norfleet with BB&T Capital Markets. Robert F. Norfleet - BB&T Capital Markets, Research Division: Just a quick question, Bill. Recently, INPEX has been saying that they've been seeing some, obviously, challenges in cost inflation at the Ichthys project in Australia, which is, obviously, not uncommon given the tight wage rates there in that region. When you look at that contract for you all, it's split between fixed and cost reimbursable. I just want to understand kind of what your exposure would be, though, given that 75% of the contract for INPEX was structured as fixed, if there were various wage rate inflations or cost overruns, what the impact would be on KBR -- I mean, what your exposure is there?

We think we've appropriately structured the contract. There is a large reimbursable portion, which does include the local construction cost for that project. As we've talked on previous calls, the largest part of our fixed-price exposure relates to home office services where we feel we have a very good ability to estimate cost and productivity, and we also have a significant amount of back-to-back procurement that Sue's talked about on prior calls. So we see -- we see the market as it was when we signed the contract a year ago. We also believe that the situation in Australia is similar to where it was a year ago and that it's perhaps INPEX looking at the market and seeing things change. But I don't think the comments they're making are materially different from the comments that have been made by other owners in Australia for the reasons the other owners have made those comments. Robert F. Norfleet - BB&T Capital Markets, Research Division: Great. That's helpful. My second question I just wanted to ask about, obviously, the PEMEX, the arbitration. I mean, it looks like you all have moved past that process into actually trying to see some of the PEMEX assets in Luxembourg. Can you kind of talk about what the timing of potentially getting some of those assets would be? And if you do end up collecting cash, what you would envision the use of that $350 million?

We are -- I think outlined in the Q, we're still pursuing our remedies in New York, and those efforts in front of the judge there continue. We had a set of hearings 2 weeks ago on that, that we think went well for us, and we could get a ruling from the bench in the coming weeks or certainly the next few months on that, which would -- could result in the closure of EPC-1. We've been working on the parallel path of Luxembourg for some time now. We believe that the Luxembourg courts have affirmed the arbitration and that as we've proceeded with the banks and the questions that have been risen by the banks to the courts over there have been addressed as we would like them to be addressed in Luxembourg. It does take some time for this process to work out in Europe and -- but it does give us a second opportunity to get our monies collected. And certainly, if all else fails, we have the arbitration under NAFTA, which we haven't executed yet, but we're still looking to diligently pursue the collection of the monies. I guess, when the money comes in, if we're successful, the first thing I'm going to do is count it and make sure it's all there, and then we'll figure out what's the best use for that. But I think Sue has made comments, I'll let her comment again, about how we look at using cash and -- but I don't think we're going to have any kind of different strategy in terms of how we look at cash. So Sue, do you want to add any thoughts there?

Well, and I'll second what Bill said, we'd be very happy to receive the cash. And as we look out at whatever time it is that we actually receive the cash, we'll do an evaluation of where we are on several different items. So what we normally talk about is operating expenses, dividends, share buyback and acquisitions being the final piece of that list. And so at the time that we would receive those cash -- that cash, we'd do an evaluation of what made the most sense at that point in time and come out with a communication.

We'll take our next question from Will Gabrielski with Lazard Capital.

Can you provide some color around IGP overhead and just -- as a percentage of revenue, it's the highest it's ever been, and I don't know how much of that is associated with the federal work versus the other segments. But is there any leverage there that you might have later in the year?

I think as we -- as you look at IGP overhead, it is overhead. And with declining volumes, the overhead as a percent of sales will go up. We are taking out overhead as businesses shrink, and we will continue to do that. We had a, perhaps, greater softness in our infrastructure business than we envisioned 3 or 4 months ago, so we're evaluating where our overheads are and what we're going to spend money on, and we're going to be very aggressive trying to continue to rightsize that organization. We do hope that we'll be able to grow back some of these businesses so that the overhead as a percent of sales will decline. But we are mindful of the -- particularly in our government businesses, as we've shrunk down that NAGL, we can show that the overhead has fallen in NAGL over time. But with a lot of the tail issues that we see, it's not a 1:1 shrinkage of revenues and overheads. But we continue to look very diligently at what's the best use for that overhead. And if it's not productive in terms of creating work or we have a reset in terms of the size of the businesses, we will take steps accordingly. And you can go back and look, as I said, at NAGL and minerals, how we've managed overheads over time, and we'll continue to be good stewards of that spending.

Okay. In the Middle East, and specifically Saudi, what type of activity levels are you seeing in GES+? And then what's the pace of work like on Jazan and Sadara for your PMC roles?

Yes. The GES+, we're expecting that to grow significantly this year from where we were. I think we ended the year last year at about 400 people. We're expecting be north of 600 by the end of the year, which we think is good. On Yanbu, that's going to continue. It's fairly stable at this stage as the project is in construction. At Sadara, we're just now getting into the field. We could see a little bit of growth there as the PMC starts dealing with all the different issues that are attendant to getting into the field with such a large project. Jazan, we're just getting there. We could see a little bit of growth there. But those are PMCs, and it's good work for us, but they're not the same degree of volume that you would expect on an LNG project, for example.

We'll take our next question from Robert Connors with Stifel, Nicolaus. Robert V. Connors - Stifel, Nicolaus & Co., Inc., Research Division: Just related to some of the downstream units from the ethylene crackers, it seems like the lift there is much longer than some of these base load ethylene plants for things like polyethylene, ethylene oxide and even some of the unpurposed production plants that are starting to emerge. So I was just wondering, are there some of these downstream opportunities? Can they exist for KBR? Or are the project owners looking to keep a lot of these downstream units in-house with EPCs doing the base load ethylene plant?

Well, I think our prospect list does have those downstream plants. Doing an ethylene project is a large project by itself, and those could be anywhere from $400 million to $700 million, as a rule. I think the other plants are separate enough. And we're seeing on our prospect list those opportunities that tell us that the owners aren't limiting the entire ethylene chain to one contractor, that they want to break it up to just get make sure that any one contractor doesn't get overextended and provide the benefit of multiple contractors on site. Robert V. Connors - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And it seems like your comments about Abu Dhabi that you gave before, but just recently, we've seen some of the Asian EMCs start to, I guess, experience a hangover effects of their fixed-price bidding strategy. So I was just wondering if there's pockets starting to emerge where pricing discipline or contracting terms are becoming a little bit more restored in favor of the Western EMCs at this point in time?

Yes. I think when we look at those bids several years ago, and saw prices below our direct cost, it was the cause of concern. And I guess what -- there's a little bit of relief that these guys have taken on work very aggressively and that their underlying cost base is not necessarily different from what our underlying cost base is. I do believe that in the last 12, 18 months, we've seen a better bidding environment, a more disciplined bidding environment in the Middle East, and I'm optimistic that, that will continue so that we get a more narrow distribution of outcomes on the awards and not the very dramatic distribution we saw 2 or 3 years ago. Robert V. Connors - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And just for housekeeping, was there an update on the 2013 LogCAP revs?

No, no. We basically have said that the government businesses are stable at this point with -- we said that at the end of 2012, so we have not provided specific guidance on LogCAP.

We'll take our next question from John Rogers with D.A. Davidson. John B. Rogers - D.A. Davidson & Co., Research Division: Just a follow-up, maybe for Sue. In terms of where you've got an equity investment projects like INPEX, how much backlog are you burning out of that project not flowing through revenue?

Well, so what we've done, and what we talked about when we booked INPEX specifically, is that we booked the backlog at our percentage of the revenue of the contract amongst the partners. And so then what we are doing as we go through and we actually book revenues into backlog, we're also adjusting out through adjustments in the revenue line any revenues that are not flowing through the P&L. So in other words, the equity investments, those may not exactly be equal. And so at any given point in time, you'll have the percentage in backlog that's left on a project.

John, if you were thinking about it from a modeling standpoint, in prior calls, we've described the duration of the project, and I'd ask you go back and look at that, but if we assume that -- we said 5 years, and we assumed a normal distribution on your typical project performance, you can kind of lay out the percentage of completion we're going to see this year, in year 2 of 5, and then be able to look at the work-off that would be associated with that normal distribution percent complete. That would be the way I would suggest you all look at that from a modeling perspective. Robert V. Connors - Stifel, Nicolaus & Co., Inc., Research Division: Okay. Well, I appreciate that. I guess what I'm also trying to understand a little bit is what your pace of bookings are, because I can't just net them against the previous quarters. In other words, the change in backlog and...

Well, the change in backlog is -- just on a revenue base, in backlog is -- obviously, we see that, and it does tell a different story because you're not seeing -- the challenge that we all face, and we've talked about it prior, is that with equity accounting, we're taking out revenue dollars in backlog and they're flowing in on the equity side in the P&L, so you don't see the 1:1 correlation between change in backlog and what's going into the P&L. And believe me, that's why we spent a lot of time last year describing how to be -- how to think about it in terms of the duration of the project, the normal S curve, so that as you could look at what is really happening in the backlog, that you could get a sense of what was coming out on Ichthys. And we've stayed away from commenting specifically on any one project from a revenue side or a backlog adjustment, and so that's why we continue to refer folks who have questions -- because it is a gap and how you're looking at your model -- to think more analytically of the normal distribution and percent complete times the backlog that we booked. John B. Rogers - D.A. Davidson & Co., Research Division: Okay. Well, I was hoping to try and figure it out a little more, but I appreciate the help. And...

Yes. Some of your peers might just ask us what the number was, and we'd have to politely say no, we can't -- we can't say... John B. Rogers - D.A. Davidson & Co., Research Division: I know, I know, I know. The other question, I apologize, too, if you said this, but in terms of the embedded margin in your backlog, how does it look now versus the last couple of quarters?

It followed a little bit the falloff in the revenue backlog, John. It didn't fall off 1:1 because we added some higher-margin stuff than we worked off, and that was the EPC phenomenon versus adding FEED work in there.

It's about flat with where we ended the year.

This concludes today's time for question and answers. At this time, I'd like to turn the conference back to our speakers.

Well, thank you all for joining KBR's First Quarter 2013 Earnings Call. We appreciate your attention, we appreciate your questions, and we look forward to continuing our dialogue with you all as 2013 unfolds for KBR. Thank you, and have a great day.

This concludes today's conference. We thank you for your participation.