Good day, and welcome to the KBR's Third 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 third quarter 2013 earnings 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. The press release announcing third quarter results is also available on KBR's website. Joining me today are Bill Utt, Chairman, President and Chief Executive Officer; and Dennis Baldwin, Senior Vice President and Chief Accounting Officer. During today's call, Bill will provide an overview of KBR's third quarter operating results, highlighting the number of key areas in each of our business groups. Dennis will then provide more detail on the key financial takeaways for today's call. Lastly, before turning the call over to Q&A, Bill is going to provide brief closing comments. After our prepared remarks, we'll open the floor for questions. Before turning the call over to Bill, I would like 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 third quarter press release issued last night, KBR's Form 10-Q for the period ended September 30, 2013 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's third quarter was highlighted by strong overall bookings, with a book-to-bill of 1.2x and a healthy cash flow from operations of $178 million. During the quarter, we had a number of key wins across our businesses and a book-to-bill ratio of greater than 1 in 3 of our 4 major business groups. Key wins included a large DuPont maintenance contract, a $300 million urea EPC project for an unnamed customer and a polyethylene FEED for INEOS. Additionally, during the quarter, KBR continued to make significant progress on a number of key prospects. First, our IGP business group received a limited notice to proceed on a new $500 million, 600-megawatt combined cycle plant. We anticipate receiving a full notice to proceed by May 2014, when all final regulatory approvals are received. Second, a KBR joint venture has been chosen for detailed negotiations for a large-scale U.K. government project worth several hundred million dollars. The negotiations for this project are expected to last for several more months. Neither of these opportunities were booked into backlog in the third quarter. Despite a strong bookings quarter, KBR's third quarter results were disappointing compared to our expectations. We delivered EPS of $0.16 in the quarter. This includes a tax rate of 46% primarily resulting from the tax issue with our former parent worth $38 million in taxes, $50 million of NCI expense for our partner's equity related to a change order on the Gorgon Project and a continued elevated level of labor cost absorption at $10 million. We also faced some of near-term headwinds from incremental costs related to our Canadian implementation of our ERP system: a contract expiration and temporary dry-docking of a vessel at our MMM business and lower levels of gas supply and lower ammonia…

Thanks, Bill, and good morning, everyone. First, I wanted to touch on corporate G&A. Corporate G&A was $66 million in the quarter, up $3 million from the second quarter, including $14 million in ERP-related costs. Of this amount, about $3 million was additional ERP spend related to the Canada phase of our ERP implementation, which presented a headwind to the third quarter earnings. Our expectations for corporate G&A continue to be between $230 million to $240 million for 2013. However, we anticipate coming in closer to the top end of that range and we now expect ERP expenses to be approximately $40 million for 2013. Second, I wanted to provide more details on the accounting referee's report related to the tax matter with our former parent. On October 11, 2013, KBR filed a Form 8-K related to an unfavorable accounting referee ruling for a tax dispute with our former parent, which determined that KBR owed approximately $105 million. The earnings impact to KBR was $38 million in additional tax expense, net of deferred tax assets and a previously recorded net liability of $30 million. Our balance sheet line item, due to former parent, reflects the full liability amount of $105 million. Also, I wanted to briefly touch on the significant increase in our noncontrolling interest expense line. Noncontrolling interest was $63 million in the third quarter. This increase from traditional NCI norms was primarily related to a change order executed on the Gorgon project. As you'll recall, KBR is a 30% partner in the JV, so 70% of the job income impact of the change order will be a dividend back to our JV partners. Therefore, the NCI impact related to this change order was approximately $50 million in the quarter. Moving to labor cost absorption, or LCA, KBR continued…

Thank you, Dennis. At this stage in the year, KBR's business is progressing a bit slower from an awards perspective than originally anticipated. We've had solid project execution in 2013 and our win rate on new awards has been good and is improving. We've seen more EPC work in the market compared to quicker-burning, engineering-only work. This has added positively to KBR's backlog, but, near term, project earnings on this work and competition for new work may challenge our margins. However, looking forward, we continue to see several large projects targeted for FID in late 2014 or early 2015 and we are expecting to see an improvement in job income margin bookings in 2014. On the positive side, KBR continues to win our share of the available work and is well positioned to take advantage of the massive opportunity set of new project awards ahead of us. Our strategy is to win and successfully execute this work and we're confident in our ability to deliver strong shareholder returns over time. Now we'll open the call for questions. [Operator Instructions]

[Operator Instructions] We'll take our first question from John Rogers, D.A. Davidson. John B. Rogers - D.A. Davidson & Co., Research Division: I guess first thing, Bill, in your comments in the press release, you talked about some job income that deferred into the fourth quarter and it implies -- your guidance implies, even at the low end, pretty significant improvement in profitability in the fourth quarter. And I'm just trying to understand, how assured are you at this point that those benefits are actually going to materialize, or is it just an expectation that they will? And I have a follow-up.

Well, John, as we look out at those items, they're largely related to project closeouts and we see opportunities both in Gas Mon, as well as in NAGL, for closeouts in the fourth quarter. I'm convinced they're going to occur. There's no doubt in my mind on that. And I am fairly confident that they will occur in the fourth quarter just given where we stand in terms of progress that we're making towards getting this result and the issues that lie in front of us. John B. Rogers - D.A. Davidson & Co., Research Division: Okay. And Bill, in the past, you've talked about the job income within your backlog. Can you comment on that at this point?

Yes. I think the trend we've seen this year, John -- and let's [indiscernible] stripping away some of the volatility we have in Gas Mon, which, we admit, will have a lot of volatility in backlog. And we're focused on kind of the mix of work and the type of work that we have. And so we're seeing that the work we're adding to backlog is being added at a lower as-sold margin than what we're working off. And that's partially attributable to the types of -- to the mix of work. And certainly, the DuPont award we had for industrial services, those type of activities traded a lower job income margin than a engineering-only project. And then also, we have a lot of EPC projects that we've added. We've talked about the ammonia work, for example, where we're recognizing earnings on a percentage-of-completion basis. And while we're performing the engineering at this stage on the projects and if we were doing engineering-only, we might see work in the mid-teens. We are recognizing earnings on that as a percentage of -- on a percentage-of-completion basis, where we have the construction services and the percent-complete. We have the procurement that has its margin in it. And so the overall EPC margins that we're seeing on the projects we've signed up are lower than what we would see typically on an engineering-only project or an EPCM-type project. And so we're seeing -- while we're getting the engineering accomplished on those projects and if they were engineering-only, they'd be a lot higher margins than what we're seeing, it's really the mix of the EPC work that we've signed up, recognizing that on a percentage-of-completion basis, as well as some of the other work in the backlog, that's traditionally trading at the lower job income margin than what we're seeing overall.

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

Bill, you mentioned that projects are developing more slowly than you had hoped. Can you just talk about what the key drivers of that are today? And is it more overall macro caution, or is it more cost increases and you just have to keep going back in reengineering? What's driving that kind of projects continuing to move to the right?

Well, I think, Steve, the ones we're seeing moving to the right certainly involve -- let's take this -- the category of LNG projects, first of all. There have been a lot of announcements on projects: U.S. Gulf Coast, Canada, East Africa, some continuing developments, albeit in a different form in Australia. And with all of these developments -- again, this is us, KBR, synthesizing a little bit what we hear from our customers. There's a lot of people out there trying to sell LNG to a finite universe of buyers. And so today, it's a buyer's market, if you will, at least as we would anticipate it, given just the broad number of suppliers that are out there. And people are having to, as a buyer, look through and see, okay, what's going on with the -- will the project get delivered? Can they deliver on maybe some pricing that they're proposing? What's the timing going forward? Who are the sponsors? Are they selling from a portfolio, or are these asset-only developments? So I think there's a -- I get the sense there's a lot of noise out there in the LNG space that's created, at least in our minds, some continuing delay in projects as our customers attempt to develop their offtake agreements. And this has contributed to some of the delays. To a lesser extent, we are seeing some projects continue to look at costs. We're working with some customers to take some of their early-stage designs and look at it from a fit-for-purpose standard as opposed to some of the underlying traditional norms that our customers are using. And I think they're taking a harder look at their projects and trying to make sure they're buying what they need as opposed to maybe what they've historically wanted to design in their projects. And so we're seeing some delays in that regard. But we're working closely with our customers and we have people helping them find those answers to what is needed as opposed to maybe what their historical norms are. So those are really the 2 big drivers that we're seeing in our space from the delay and awards perspective.

Okay. That's very helpful. And then 2012, obviously, was tough from an execution perspective. As you're, by the book, a large, presumably fixed-price power plant, what actions have you taken following those 2012 operational challenges that might improve KBR's ability to execute projects like this?

Well, I think when we look at those projects, Steven, we have to go back and kind of sort through what were the triggering events in the U.S. side that gave rise to that. And certainly, these were construction-only projects in a geographic area that saw sudden increases that we had not forecast to occur as early as they did in cost and per diems that actually lead to some productivity challenges we found on those projects. In other parts of the country, we continue to execute very well in construction-only projects and they did come in at as-sold profit objectives. What we've done, when we look at projects on an EPC basis, we have a lot more levers to pull to manage things with respect to overall project delivery. We can source materials differently. We can move construction guys to different work fronts based on what we see coming ahead of us. And so as an EPC provider, we've got a much better view of the entire project execution, including the deliveries of equipment and construction materials that we didn't have under the construction-only projects. The other thing that we're looking at is where are the projects that we're bidding. And again, we're being very cautious in geographic areas where we've seen the volatility of construction labor per diems and productivities. But in other parts of the country where we've not seen that type of volatility, we've gone out and feel more comfortable about quoting EPC. And in some cases, we've engaged third-party subcontractors to perform construction services across the different trades where we don't have as strong a direct hire capability. And they've been very comfortable in providing us the assurances that we're looking for in terms of the price for labor per diems and productivity. So we've taken the lessons learned from last year. We've identified geographically what those drivers are and then, we think, those geographic issues we found and we've reflected that in our bidding. Now as we look at some of the projects that we haven't won, we've taken -- those have been also in the areas where we've had the construction labor and per diem difficulties and we've taken a more conservative approach to those. So I think we're doing the right things. We're being thoughtful about where the projects are relative to competing work in the geographic areas. We're being conservative where I think it's prudent for KBR to be disciplined and conservative. And in other areas where we don't see these issues arising, we're also looking at considering third parties to provide various labor to us that can manage that and pass that risk onto those third parties.

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

Bill, we know you don't want to give 2014 guidance at this point, but maybe you can talk about the puts and takes we should think about that would allow you to grow EPS. Do you need to win another big project or 2 to materially grow EPS, or could you do it with excess, growing your small to midsize project work and then maybe Shah Deniz being awarded by the end of the year?

I guess you're right, Andy, I won't comment on 2014 guidance at this point. But speaking of what are we trying to achieve here, we're clearly in a position where we still see headwinds on labor cost absorption. The growth on Ichthys is not going to help that because our work on it is largely fabrication and construction oversight. Our partners are doing the engineering there. So we do need to fill up the shop that remains open. We do need to sell some more EPC work or large project work. We are seeing a good flow of activity in the $200 million to $400 million range that we've talked about in our comments -- or $200 million to $500 million. Shah Deniz, while we haven't moved into FID, we've got several hundred people working on the advanced speed of that. So we're not going to see a big pickup on Shah Deniz when that hits FID. There will be a pickup, but we do have a lot of folks that are continuing to drive the momentum of execution for Shah Deniz and we'll add more folks to that as we move into the FID phase. So we really are at a position where we don't have a large anchor project in KBR at our Houston resource center and our London resource center. So I'm pleased with where we are in that situation given what we've been able to sell with the midsize projects of $200 million to $500 million. And we'll continue to look at how we position ourselves for more work on these large projects that are on the horizon for us and fill in the gaps where we can with the other work in our Power business and our hydrocarbons business and continue to drive shareholder value that way.

Okay. That's helpful, Bill. Just shifting gears. Maybe you can give us a little more color on the competitive environment in the sense that you mentioned in the release this time that you were seeing these near-term pressures, but sort of when we step back, what we see is some of your competitors are starting to win some big work. And it's so surprising that you haven't seen any improvement in the environment yet. And maybe do you expect to see improvement in the competitive environment as you go out over the next year?

Well, I think we've competed on some of those projects that we were not successful on and we've taken, as I mentioned in the earlier question, we think, a thoughtful view on how to manage construction and productivity risk in the U.S. Gulf Coast, where we see a very volatile environment. It will remain to be seen kind of where the whole Gulf Coast sorts out in terms of construction labor and the volatility that we've seen in the past on that. But I do think that in terms of the amount of awards that we've seen, it's been a slower award environment than what we've expected or have seen historically. And I'm throwing the global KBR into that because it's not just the U.S. that we're seeing. We play across the Middle East, Australia, Africa. And so from our standpoint, it's been relatively quiet and that work that has come out has been, I think, pretty heavily contested to the credit of our customers who, obviously, are looking to get the best value they can for their capital projects. So when I talk about the competitive environment, the awards that are coming out, it's a little slower than what we've seen historically. The competition is a bit higher and so there's -- the headwinds on the work that we do win. It's some pretty competitive margins, good margins that we can execute, but it's still, I think, a competitive environment.

And we'll take our next call from Jamie Cook from Crédit Suisse. Jamie L. Cook - Crédit Suisse AG, Research Division: Two questions. First, I guess one thing that strikes me about 2013, Bill, is just the level of project closeouts, the positive contribution from project closeouts that will help 2013. And so as I look out over the next year or so, in addition to the sort of headwinds you sort of mentioned to Andy, I guess my other concern will be 2013 would be an unusually high closeout year. So my question is, is that true, so that's an additional headwind we have as we look out over the next 12 to 18 months? Or would you consider 2013 a normal year that you would have just as many opportunities over the next year versus you had this year? And then I guess my second question is -- you mentioned vendor selection from Chevron on Kitimat. Can you talk about any update on how you think you're positioned on that project? I feel like the vendor selection thing is new. And originally, I think you said November. Now it's late in the year. Sort of has that gotten pushed out and what your view is on Kitimat?

Okay, look, 2,000 closeouts, we've always had project closeouts and changes that we've reported regarding all these projects closeouts, et cetera. I think what we've seen this year is probably higher than normal, just given my intuitive feel, that I haven't gone back and taken a study of what closes out. Certainly, you've got changes in projects that we continue to work through and then also some very longer-dated projects, I'm thinking Skikda and Escravos, that have completed construction this year. And you see that winding down in the revenues for Gas Mon. And as you get to the end of these projects, you do have opportunities for closeouts and adjustments and we think we do a pretty good job of being conservative on how we book projects and provision them over the life of the project. So from a life cycle standpoint, in 2013, we probably have projects closing out to a higher degree than we've seen in prior years. We've announced a bunch of several projects that are EPC, but I don't see them closing out next year. So I think next year, on a relative basis, we'll have fewer closeouts than we've seen in 2013. On the Kitimat project, it's still the 2 parties that -- we understand there's still 2 parties participating. We've continued to have a dialogue with the owner group. There's a lot of information that's been provided, a lot of discussions on not only financial but technical and certainly, contractual terms. And so our best guess today is end of year, they'll have a preferred EPC contractor selected. Jamie L. Cook - Crédit Suisse AG, Research Division: I guess, Bill, just one other question. You mentioned in your prepared remarks that, I think, you now have a new head of development. You've realigned the businesses. And I guess my question is, what was the primary decision that drove that? If you think about how the market views KBR, they view KBR as a competitive disadvantage in the United States. And is this sort of your way of saying, well, maybe there were some opportunities that we missed for whatever reason, we're making the changes to right -- you're making the changes to, I guess, fix that? I mean, sort of if you could just comment on that. What drove the changes there?

Well, I think what has driven the changes has been the fact that we've been able to bring in some really good people into the company in the last 2 years. And so as we've -- and you see that reflected in our revisions to our financial statements, where, with some very good people we brought in, I can look at things across business groups and less focus on business units. So that's been the primary organizational change. And I do think breaking out Gas Mon as a separate group, given its complexity and size, does provide a better bandwidth management for the 4 key group executives we have at KBR. From a sales standpoint, we can always do better. I don't think we're disadvantaged in the U.S. I just think that as we've matured as a company, we used to talk a lot about business development oversight and controlling the risk we're bringing in the portfolio, and I can say that we are doing a great job as a company. We can declare victory on what we wanted to achieve in terms of looking at projects, making sure we are the best in class in risk awareness. And so it's time now for us to evolve as an organization that we can take our foot off the brake a little bit on this and then push more down on the accelerator. And that's why we're going to spend more time emphasizing sales while maintaining same level of thoughtful control and discipline in our biddings. So the first one is recognition of the executives we brought in. I'm very pleased with that. That's probably the biggest change. And then the more subtle change in the organization is the fact that I believe that the organization has, in the last several years, achieved what we wanted to achieve in risk awareness and in how we're bidding and how we're executing. And so we're now able to focus more on driving the organization to a better sales performance and sales focus while maintaining that good discipline to the bidding environment.

We'll take our next question from Jerry Revich from Goldman Sachs.

Bill, you mentioned in your prepared remarks U.S. LNG and GTL projects that you're competing for and working on or hoping to work on. Can you just give us a sense for the projects that you're focused on, when are those expected to reach final investment decision in the U.S.? And I guess, presumably, you did one of the import terminals that's now a brownfield. I guess, how should we be thinking about the timing as you see it for whether you're selected?

Well, on the general comment I made about U.S. GTL and LNG projects, we don't have a permission to disclose any of the work that we're doing. We are, on one project, working with the customer to -- and I'd pick up in an earlier comment -- to get fit for purpose on their overall design to help them get to a -- what is a necessary capital cost as opposed to what some of their historical norms might have been that have driven cost higher from their internal estimates. So we've got a bunch of folks working closely with the customer on one of those projects to help them get to the necessary capital cost. The other projects we're working on, they're at various stages. I would say, that the former probably, you could see some FEED activity in 2015 as we complete our near-term activity -- excuse me, FEED work in 2014 as we complete some of the near-term study work. But a lot of the other stuff is going to be late second half of '14 or '15 in terms of when they achieved their FIDs just given the aspects of what they've got to conclude in terms of LNG sales and other commitments they need to get to, to move their projects forward.

Okay. And then for the technology and the EPC opportunities you see in ammonia, you spoke about 4 projects in the past. Looks like you've converted a couple of them. Can you just give us an updated project count that you're focused on? And you mentioned soft bookings in technology in the quarter. I'm wondering, is that a timing issue, as you see it, based on the ammonia work?

The technology bookings, I think, was a little bit of a timing work. We're still forecasting internally that we're going to be on target with where we expected to be at the end of the year. Third quarter was below our budgets and so they are anticipating a recovery to get to the 2013 targets that we have. In terms of the ammonia prospects, we've been really successful on Dyno Nobel and then the 2 ammonia and urea EPC projects that we've announced on an unnamed basis. We continue to track 3 or 4 more projects that are in various stages of development. We feel really good about our position on those. Again, when those projects are able to achieve their respective FIDs, I think we'll have more to talk about. But we continue to track 3 or 4 fairly closely at this stage.

We'll take our next question from Vishal Shah from Deutsche Bank.

I wanted to understand your Service backlog. I know you showed nice growth in bookings in the Service business. So just curious to see whether this kind of a run rate is sustainable going forward. Also, in the IGP segment, certainly, you said that, that business has stabilized, so can you just provide some more color on what you see in that segment?

In the Services backlog, I'll try to address what I think you were asking about, sustainability. We did continue to get -- obviously, we got the very large DuPont booking this quarter, which -- that's a multiyear contract and I don't expect us to be able to book one of those every quarter. I'd like to be able to do that, but reality is it's a onetime booking that -- we'll have other bookings over time but not that large. So it was a little bit of a blip there. In terms of the other businesses in Services, we've had, we're continuing to see some recovery in the building group. We've had some good bookings continue in Canada on our workup in the oil sands. And also the fabrication work that we're doing, we seem to be doing very well in delivering modules that are built to design and fit-up issues are minimal and we seem to have gotten more than our share on modules. I hope we can continue to maintain the very good performance we have in our module fabrication yards up in Edmonton. In IGP, it's -- we're thinking that -- we're still seeing activity in the U.S. governments, very competitive. The last couple weeks with the government shutdown were not helpful, I think, to the entire space in terms of new awards or moving things forward. We've had some good awards in Djibouti, in Romania. We continue to see some good work. We continue to make the Navy's global construction program, MATOC deal. We've got some good prospects for continued growth in our U.K. business. Maybe it's a sort of rolling over the work. We expect to see falloff in Afghanistan and on the first phase of the Allenby & Connaught project. Minerals and infrastructure in Australia, we think, have bottomed out. We hope to see some recovery there next year. And then Power continues to, I think, be well positioned. The award that I alluded to that'll get booked between now and next May is a continuing indication of a stronger business for KBR and Power and we hope to be able to continue to see growth within that segment of IGP.

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

Just a couple of questions. You talked about the closeouts into Q4 and you expressed your confidence in that being executed. Can you quantify how much you anticipate that will contribute, maybe not exactly, but a rough range?

No, I really can't at this stage. I think we, obviously, have some matters on some projects that we've talked about previously that we think will get resolved. And we have others that is just not appropriate at this time to talk about given where we are in our reviews and discussions.

Right. And just on the problem projects that occurred late last year and you've been performing well on this year, are you anticipating you can get some clawback in cost in Q4? Is that baked into your assumptions?

No, it is not. Those projects, I believe, Dennis accounted for as loss-making projects under 8011, and so we've got a mark-to-market accounting, essentially, on those projects. You may want to comment a little bit about how the accounting drives us to not have things out in the future but today.

Well, yes. We've made provisions for those losses and those projects are tracking to those provisions. So we booked the accounting based upon our best estimates and the projects are tracking according to those estimates.

Okay. And if I could just slip one last in. So the ERP spend in '13, obviously, a little bit more elevated. I know you don't want to give that -- the guidance for '14, but do you think that it could trend lower next year?

I think ERP, overall, is going to be up year-over-year. We're going to roll out the United States implementation next year. Canada was a good pilot for us. It's a big business, but it's also one that touches a lot of different elements of what KBR does from procurement to human resources to project management. And so we'll have some comment in our guidance about ERP in the 2014 guidance, but North America will be the big rollout year and then we'll pick up the rest of the world over the following 1.5 years.

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

First question is, if I look at your commentary in the competitive landscape that is indicated, I mean, are you just seeing a more aggressive bidding environment, or are you -- is it something in your cost structure that's a little different to some of your peers as it stands right now? And I guess I'm asking this because you have pointed out that maybe you're 1 of the top 3, if not 4, on the modular construction side. So I would love to get an idea whether this is just, say, aggressive bidding, or is there something else going on?

Well, I think our data is kind of limited by what we see. I know that in the projects that we have bid, those that we've won and those that we've lost, they've been very competitively contested. I believe that as we look at just the level of award volume that we see over the last quarter or so, that it's been probably a little bit lighter than what we've seen historically in the space. And you will all probably have a better view of that than we do. But it appears to us, given the dynamics that we're seeing, that there are fewer projects out there being competed than what we've seen in the recent past. And that has contributed to what I think is a -- that competitive environment we're seeing today.

Got it. Okay. And Bill, if you look at your free cash flow, clearly, still solid. Could you comment a bit on, directionally, what we should expect going forward, and for these cash allocation usages going forward?

We've spent a lot of time working on the working capital. We still have, I think, some opportunities, both in Gas Mon and in NAGL, to continue to draw improved cash flow in those businesses, just given the timing we're seeing to get invoices paid. From allocation standpoint, I don't think our allocation of cash has changed from our prior commentary. And we remain focused on being good stewards of cash. And we hope to be able to continue to have those programs that allow us to take our excess cash that we don't see being needed in the deployment of the business and returning it in various forms to shareholders, as we've done in the past.

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

To take that point Tahira was just touching on a little bit further. I mean, you guys have a pretty clean balance sheet and presumably, you're going to collect a fair amount of cash over the next year, not only from operations but also, hopefully, from the government and, hopefully, from PEMEX. I mean, have you guys given any thought to jumping in front of that and taking advantage of cheap credit as an opportunity to raise your capital, to get out in front of that and buy back stock ahead of what, it sounds like, you think will be a better award environment 12 or 18 months from now?

We're pretty conservative. I don't know that -- no, we have not. We really will look at what cash we have. We'll continue to manage the business conservatively. And we kick around ideas like that, but I don't see our capital allocation and sourcing cash changing in the near term.

Okay. Fair enough. I guess when you talk about it still being competitive or there being less projects to bid on maybe than it has been historically, is that maybe a function of just the type of projects that are happening in the U.S. that you just find yourself less interested in or competitively at a disadvantage versus what's happened in the prior cycles? Or do you still feel that's just the broad market statement that -- just not enough activity and too many players chasing too few projects?

I think it's more the latter. I don't see where KBR has any disadvantages or competitive issues in the North American market. I think it actually -- relative to other geographic markets, it's actually a stronger basis for our ability to compete, just given our ability to do integrated EPC work. And I think we've been successful signing up over $1 billion this year between the 3 ammonia plants that we spoke about. I think it's -- you got a lot of activity out there, a lot of people talking about with different folks on LNG and GTL projects. And those things are moving at the speed they're going to move at. And as much as we and our brethren in the space would like to get those accelerated, they will go forward when they are able to go forward based on decisions taken by our customers. So we're being as supportive as we can, helping them address issues that we can help them. And for a lot of the issues, we're simply a spectator. And that's, obviously, taken a lot of focus of our customers. They're making -- looking at very large projects that, I think, play to KBR's strength. And until those things finally start dropping into FID, it's going to be a lot of looking at other projects that can come forward to maybe take their places in our respective backlogs.

Okay. And then lastly on hydrocarbon margin. Do you think you've found the bottom here for that business? Or does mix continue to serve as a headwind to the percentage margin, even if the EBIT dollars are growing?

That's a hard one because you've got a number of -- we're looking at just EBIT dollar in aggregate. That's how we're trying to manage the business. And it goes back a lot, Will, to the comments that I made several years ago on Skikda. And while Skikda was a low-margin project, it was a great project from an earnings standpoint and a risk standpoint. We've got some -- we continue to have a number of initiatives in oil and gas that are project delivery that are clearly going to have a dilutive effect on the margins we've historically seen, but I think in terms of aggregate dollars, they're going to be far better for us than what we've been doing in the past. So I'm excited about where oil and gas is going. We've seen downstream margins slide a little bit from where they were when they were just doing engineering projects and PMC projects in the Middle East to doing an EPC work largely in the U.S., that's going to drive margins down. But it's all driven by how do we get the highest dollars that we can for the risk that we're taking. And I'm very pleased with the directions that both downstream and oil and gas are taking, or have taken regarding getting work that's going to increase the overall profitability of KBR on a risk-adjusted basis. I think technology will continue to perform and they do a great job of expanding their offering with respect to new features. We'll probably see, perhaps, some lower contributions as a percentage of the overall dollars on license fees and probably higher proprietary equipment sales, which traded a lower margin. But again, you could see a situation where all 3 of the hydrocarbon businesses see their margins go down but see some significant increases in the amount of dollars they're bringing into KBR, which, from our perspective, is -- we're more interested in dollar drivers as opposed to margin drivers.

We'll take our next question from Rob Norfleet from BB&T Capital Markets. Robert F. Norfleet - BB&T Capital Markets, Research Division: Most of my questions have been answered. But just one, I just wanted to look at -- you all, obviously, cited that you expect the existing backlog, about half of it to be burned off over the next 12 months. Can you kind of talk about outside of that contribution to revenues over the next 12 months? What are the other opportunities in terms of quicker-burning, engineering-only work maybe that we could expect to see hit to kind of fill in the gaps?

Well, I think in terms of the backlog, we could only bid on what our customers want us to bid on, not what we want to bid on. I mean, where there are opportunities to bid engineering-only, we're being very aggressive, I think being really proactive to get those type of just -- home-office-service-only opportunities into the fold. And we are seeing those, but we're also seeing probably a greater proportion of the work that we are pursuing on EPC. And if you look at an EPC project and throw in the procurement and I think we've talked about Power for an example, that you may see high single digits, low double digits on those kinds of margins. And those are going to be lower, certainly, than what you see in engineering-only, but you're going to have a longer tail on those earnings. So we'd love to get as much near-term backlog, but we're kind of at the -- be at the mercy of what our customers want to buy, not necessarily what we want to sell. Robert F. Norfleet - BB&T Capital Markets, Research Division: Okay. That's clear. And the second question, I guess, gets back to something Tahira asked earlier, just regarding, in some ways, contracts that you've not been successful on winning. Again, I guess one thing that I wanted to just get your thoughts on, it seems like customers are, at least, gravitating more towards the joint venture concept, the consortium of 2 to 3 players versus the 1 contractor going at it alone. And it seems like this had kind of allowed some players to come in fairly late into the FEED process and then be very competitive in some of these contacts. I know you guys have utilized the JV structure, obviously, in some contracts, but it seems like you did go at it alone in a fair amount. Can you guys talk about that from that standpoint?

Yes. I mean, our logic is very linear in that regard. We look at a project and the first question we ask is, can we do this by ourselves? And so we go through a series of screens or gates, that you get a project that's $15 billion, we're probably saying, no, we can't do it by ourselves. And so we move down to the next question of, are we better off with a partner? And even if we believe on some of these projects we can bid these by ourselves, we still ask the question, are we better off with a partner from a risk-sharing standpoint or skill set capability or any number features. And we look at what do we think is the best solution for us to win. And on, certainly, the Kitimat project, we have a partner on that one. We talked previously about partnerships we have with JGC on both the Petronas FEED, as well as the continuing work on Tangguh. We look at the larger projects that we're pursuing. They typically have partners with us on those. And so we continue to look at what does it take for us to be most competitive on these projects and make our decisions based on the highest NPV for KBR, taking into account either to go at a loner approach or go with a partner.

That concludes today's question-and-answer session. Mr. Nagel, at this time, I'll turn the conference back over to you for any additional or closing remarks.

I'd like to thank you all for joining us and we look forward to speaking with you soon. Thank you.

This concludes today's conference. Thank you for your participation.