Good day, ladies and gentlemen and welcome to the fourth quarter 2009, Weatherford International earnings conference call. My name is Heather, and I’ll be your operator for today. (Operator Instructions) I’d now like to turn the call over to your host for today’s presentation, Mr. Bernard Duroc-Danner, Chairman and Chief Executive Officer; please proceed.

Thank you. Good morning. Andy, will you start with your prepared comments, please.

For the final quarter of 2009, our reported EPS numbers is $0.02 before excluded items, our performance, which on its face is considerably weaker than our own expectations. First, I’ll cover the excluded items. Excluded items totaled $46 million after tax. First, $9 million in after tax cost incurred in connection with our ongoing government investigations. Two, $13 million in after tax charges for severance and facility closures, and three a $24 million charge incurred in connection with the finalization of our tax reorganization, which was completed during the quarter. To understand more fully the $0.02 number, you should take note of a number of discrete items that influenced the quarter’s financial performance, but did not reflect actual operating performance. On the negative side, four items. One, $21 million in inventory write-offs; two, $12 million in fees associated with business process and supply chain improvement projects. These should be ongoing for the next nine quarters. Three, an $8 million settlement of the multiyear legal dispute; and four, $4 million on fees associated with our global tax restructuring. Startup costs were significant in the quarter. We acknowledge their existence, but don’t seek to calibrate these costs for you. They’re consistently incurred in connection with the growth of the company. On the positive side, two items of note, a net $3 million gain on acquisition and divestiture activity. Two, a $3 million tax benefit for operations. The net impact of all the above items is a negative $0.05 hit to the reported number. Operating performance, on a consolidated basis, revenue grew $276 million sequentially or 13% with North America up 19% and international up 10%. Consolidated EBIT before corporate and R&D was $216 million, down $45 million sequentially with operating margins at 8.9%. While North American operating income was up $9 million,…

Thank you, Andy. Following comments on Q4, one Q4 showed strong revenue growth in all regions, except Middle East/Asia Pacific. Middle East/Asia Pacific was flat sequentially; in spite of no recorded growth in Middle East/Asia Pacific the international top line grew 10.5%, while North America showed 18.7% growth. Margins overall were hammered by inventory write-offs and other costs, adding up to close to a net $39 million. Margins internationally rose were heavily burdened by startup costs and delays. Todays were caused by client decisions and natural conditions such as weather. The area’s concerns were widespread, but essentially in the least Asia Pacific. Margins in North America crept up. Ex-inventory write-offs they were impacted healthy, reflecting a much lower operating cost basis and immediate volume absorption. We will correct our North American margins reset trough in Q2 within breakeven EBIT margins. We believe international margins have reached their trough this quarter, notwithstanding the ebb and flow of startup expenses. Lastly, Q4 saw the end of one year tax reorganization, completing our move to a Swiss based multinational structure. We should be set with long term stability. A deeper dive into region’s performance in the quarter suggests the following. North America progressed well without any material change in pricing. The gains were all volume based, broadly represented on product service lines and equally distributed between the US and Canada. Latin America gains in all markets, except Venezuela and Mexico. The detrimental reflected inventory write-offs and downtime on the Burgos Gas Drilling Project, while the full operation remained on the site. Also, the region experienced large increases in pass through revenues on the first Chicontepec integrated project ATG 1 and 2, which is nearing completion. ATG 1 and 2 has a high level of pass through, substantially more than any of our other…

(Operator Instructions) Your first question comes from Jim Crandell - Barclays.

Bernard, can you talk about where you are today in Iraq in terms of strings operating, where you expect to be by the middle of the year after your recent win? Where you think you might be at year end?

As we speak today, we have four strings operating in Iraq. If we are in the midst of significant startups throughout the south and the north, we should be at eight strings by the end of the first quarter. We should be at nine strings by, let’s say, May. That much we know. Where we go from there is unknown at this time. A string is defined as a rig and everything else that goes with it, Downhole, I mean.

Do you think at this point would it be too optimistic to think you could approach 20 strings working in Iraq by year end 2010?

I don’t know, Jim. At this point, I’m careful to only guide you to what I’m certain that we can deliver. We will have nine strings running in the country before July 1. I said eight in Q1 and presumably the ninth one in the course of Q2. Clearly, we’re interested in moving that number up between Q2 and Q4. I’d rather not say anything at this time.

Bernard, in your recent wins up north, are we still talking about maybe $75 million, $80 million per string overall in Iraq, irregardless if it’s in the south or the north?

I don’t think there’s a lot of difference in the dollars per string in the north versus the south. There are differences between one project to the next, irrespective of whether it’s in the north or in the south, so that’s one. Two, the number you mentioned is probably reasonable.

Second question, Bernard, does any of the Eastern Hemisphere shortfall in your opinion reflect poor performance on contracts, or is this just mostly delayed in startup? Asking that another way are these delays something that management could have done a better job anticipating or essentially is it out of your control?

I think you can always do a better job, Jim. Everyone can and we’re no exception and I would tell you there were any operating difficulties. On the other hand, the sad part of this morning’s report is that there are no operating efficiencies that I can report. If there was, it would be actually easier in the sense that we could just go out and fix the operating deficiencies, but the operating performance is very good. So, the answer is that things happened and were delayed by and large by factors that we don’t have a great deal of control over.

Last question, Bernard as your business is more levered to NOCs than the other major oil service companies, our spending survey this year had the 34 NOCs we talked to up by 15%. Does that sound right to you and do you think that spending based on your conversations can be up in that magnitude for the NOCs overall?

A great many NOCs, so it is sort of hard to give a so weighted average just on the fly, but that number does not seem unreasonable at all. I have not heard anything in the recent four to eight weeks that suggests any backing off from the increases that were planned. If anything I have heard stronger language.

Maybe one last question, Bernard could you give a progress report on the TNK-BP acquisition and how you see Russian business unfolding?

I think the integration of the TNK organization within our organization has progressed very well. It has been difficult. It has been difficult primarily for cultural reasons. This sort of integration is always difficult, so you should not be surprised, but it has progressed as of today very well. I think we are close to being one organization, and so that’s a very good thing. The infrastructure of TNK is excellent, widespread, far reaching, and broad. Learning how to leverage it is what we’re trying to do now, and that is going to take some time, but operationally it has progressed very well and we have made some early progress with two companies come to mind, which I’d rather not mention, but we’ve made progress to date on broadening the market appeal of the services of the TNK operation with two other large Russian clients. So, it takes time, difficult, but it has progressed well.

Your next question comes from Bill Herbert - Simmons & Co. Bill Herbert - Simmons & Co.: Bernard, with regard to Latin America, as you mentioned Mexico, probably you’re going to get less pass through content going forward, which, on the one hand, has revenue implications but, on the other hand, has positive margin implications for you. You had mentioned that revenue growth in Latin America, I think if I heard you correctly, was going to be up something along the lines of high single digits and flat operating profit, right?

Yes, I said single digits. I don’t really know if it is going to be low or high single digits. It is impossible to know. Bill Herbert - Simmons & Co.: So be that as it may, whatever the scenario is, 0% to 5% or 5% to 10%, walk me through a roadmap for margins. For reasons expressed, suppressed in the fourth quarter 8.5%, how should we think about the roadmap for 2010?

Margin in markets ex-Mexico and ex-Venezuela, those margins did not decline in Q4 stabilized, and they will move up with volume absorption and also new contracts are added with maybe different product service mix and/or better pricing. That’s one thing. Venezuela and Mexico have a counter impact to one another on margins. Venezuela it is too early to tell what will be the margin impact I suspect that volume will not increase for us in Venezuela as I’m not sure we will put in any further emphasis on that country based on the comments that I made, which I think is not the last evaluation we have seen the cycle has commenced and so that’s one thing. Mexico it’s really a tail of two cities in Mexico. The counter pact ATG 1 and 2 will end sometime that call it in April, I don’t know. The operating performance and drilling performance has been actually excellent as we come to the end of that contract, but the contract itself, which financed really much of the infrastructure build out in Mexico, and of itself was not a high margin contract. Not only was in that high margin contract because of pass through, but pricing per se was actually not a high margin contract. So to a degree, it is not a contract that will be missed, except it was a very fine operation, and we do not like the notion of thinning down something that was a very fine operation. Now you’re left with a smaller presence in Chicontepec made up of two other remaining contracts, which will have some life. Those contracts are at, one is not completed, the other one is existing, they are at substantially better margins simply because they have very little pass through, and it is just the nature of the contracts. Then you have the other business in the north, in Burgos, in Villahermosa, and Veracruz and also Cantarell, KMZ, all of which are a combination of traditional integrated business and also all the other product lines that basically sell on whatever basis that contract are in. The rest is sort of more traditional margins, so where that leave you. I think sometime in April there’s a revenue drop in Mexico. In May, there’s a discipline because of prismatic, but the change in margin mix. I know, I’m not helping you very much on the actual number, but those are the mechanics of what goes down. Bill Herbert - Simmons & Co.: Then it sounds like Q1, Latin America is reasonably flat quarter-on-quarter. In Q2 and beyond, revenues take a down dip, but margins go higher.

I guess that’s exactly correct, Bill and then from Q3 continue with a subdued revenue level, but margins that are healthier. Bill Herbert - Simmons & Co.: Then second line of inquiry here, getting back to Russia, apart from TNK and apart from integration and all those wonderful possibilities, what’s the basic outlook that you have at Weatherford about Russian activity in general, and what are you hearing from your clients in response to reasonably well behaved oil prices and their expectations going into this year?

I think Russia will have a terrific 2011. I think Russia will have a reasonable 2010. I think the market in Russia will be at the margin better behaved volume wise. That may or may not have an impact on pricing, probably not yet in 2010 for the second half of 2010. We also think that 2011 is likely to see better numbers. If I was to put percentages, and it’s just a rough estimate, I would say that year-on-year Russia would volume wise on some of the oilfield services activity will stay in single digits in terms of positive number. I don’t know where it is taking. Bill Herbert - Simmons & Co.: You are talking activity or revenue?

Activity, and then in 2011, I would be disappointed if you did not see a number, which was in double digits something like 15% or so activity wise. Bill Herbert - Simmons & Co.: Why do you think the rate of increase 2010 from an activity standpoint is I mean it’s commendable, but it’s subdued really given what we’re seeing with regard to oil prices? Why such restraint?

First of all, I could be wrong. Second, sort of the impression that I have knowing that market is that it’s a market which is slow to react. You’ve got throughout the system a lot of factors that slow implementation of decisions. Realize then when the credit crisis occurred in September of ‘08, the drop off was vertical in activity because it was so extraordinary, but other than extraordinary events, typically the system is slow to implement decisions from on top. Bill Herbert - Simmons & Co.: Lastly for me, Algeria, earlier in 2009 Sonatrach indicated that they were raising their five year capital spending budget by 40% to 45%, and really since then the rig count has languished. We’ve had sort of a flurry of mischief, if you will, with regard to the upper reaches of Sonatrach management. What’s your basic outlook for Algeria, which looks to be promising, but does not seem to get going?

Yes, it’s interesting you think both Russia and Algeria because they have similarities. Algeria also is a market that is extraordinary slow, even more so than Russia to have intent translate into action. This has been true forever. So you should not be surprised that a decision was made to communicate the increase in budgets, and the decision actually to increase the level of expenditures was made sometime before the communication occurred and then you have sometime before it gets executed by Sonatrach. I do think that very much like in the case of Russia, you will see quite a bit of mobilization ongoing in Algeria in the course of 2010, including by us and then, therefore, there will be up for us and our peers quite a bit of volume increases in business in Algeria for 2011 with operations running. I’d also add that typically Algerian Oilfield Service is in very good margins.

Your next question comes from Andrew Sheridan - UBS.

On the regions, obviously we’ve dug in a little bit here to Russia and Iraq and other places, but obviously you have projects and potential awards in other parts of the world, including potentially Oman, Australia and China. Maybe you could highlight some other opportunities for the company beyond the ones you have discussed.

I could only mention the few that I think at this point already ongoing. The ones that are being prepared I’d rather not, but for the time being, we have by my count one, two, three, four different integrated projects either existing or will be mobilized in Algeria. We have a large one possibly being mobilized in Oman. We have a large one, which has been mobilized effective just now in Ethiopia. We have one which is in the process of scaling up in China, that’s likely to become a bigger number. Iraq I touched upon it, so I don’t think I would want to go to sort of say more than that. We are likely to start mobilizing another one in Colombia for Latin America. Those are the existing ones, either existing or in the process of being mobilized. The comments in my notes on startup expenses which is just as that people are aware that they exist; not that we want to hide behind them or calibrate them or not to make any excuses, but simply people need to understand they are extensive. The startup expenses concern a segment of what I just told you and there are others behind it also, which I’d rather not disclose, not yet.

This is for revenue that would start to hit in the back half of 2010?

Yes, after what I just described, yes.

Then on Mexico, you discussed obviously to some degree what’s happening in the regions, but I believe, as you discussed to some degree, there has been a recent award for Weatherford on Villahermosa, and of course, we’re hearing talk about incentive contracts that may or may not be awarded. Could you give us any comment there?

In the course of the past few weeks, we finalized a three year contract in the South in Villahermosa. It concerns three strings, and it’s fully integrated such is the case. Second, we are finalizing an agreement on an incentive contract for a segment of Chicontepec in order for us to be able to demonstrate to the client whether we can actually improve efficiency, productivity and so forth and so on. That contract is not finalized yet, and it will probably use something on the order of four strings on that particular segment depending on the number of wells they want to roll in. That one is not finalized yet. Villahermosa has been signed and finalized.

Then also on Mexico, you mentioned better margins, of course, with ATG-4 and no pass-throughs on the OCG, but would you expect some margin pressure just due to the fact that you’re going to have underutilized assets from ATG-1 and-2 that have yet to be redeployed into other projects?

That is correct. I think in the course of well, Q2 and perhaps Q3, we’ll move assets out to North America, we’ll move assets out to the Eastern Hemisphere, we’ll move assets out also to Colombia and Ecuador, where we have some other contracts, but that is not an efficient process. You’re absolutely correct, yes.

Finally, I know also or believe also helping Latin America is some activity gains in Brazil driven by, I believe, riser maintenance programs in tubular running. Could you give us some color on Brazil and any potential further upside there?

What I can tell you about Brazil is that, it is quiet. We don’t really talk about it that much. Perhaps, because by and large we’d rather talk about the region as a whole than particular markets, for competitive reasons it tends to be healthier that way, but Brazil as a country is expected to have the highest growth rate of any other countries in Latin America. Probably, one of the highest growth rates in the company, except as a few rivals in Eastern Hemisphere that may actually outstrip Brazil. There are a lot of contracts that are on and around the deepwater play, which we typically are not associated with, but that may have more to do with communication than reality. I think Brazil will be for 2010 and 2011 in Latin America, I think by far the best performer of the region, and maybe we will talk about it more and more and yes, we did win, a riser maintenance contract and the like, yes. That’s actually the fact that you heard about it is in and of it self unusual.

Your next question comes from Dan Boyd - Goldman Sachs.

Bernard or Andy, can you help us bridge the gap between fourth quarter and then your one quarter guidance? It sounds like Latin America is going to be flat. I assume most of the sequential increase is coming from North America, but can you give me your thoughts?

Dan, we see if you take the four geographic regions, North America up, Latin America flattish, Europe, West Africa, FSU flattish, Middle East/Asia-Pac up. Probably as specific as I want to get in terms of quantifying each one of those moves to bridge from Q4 to Q1, other than to say our guidance does is based on a healthy continuation in the U.S. I guess we’re running right now a decent clip above Q4 averages. We expect that to continue throughout Q1, and Canada appears to be quite healthy. So we’re looking for a 380 type rig count in Canada to support our forecast.

Then there’s no offsetting seasonality in terms of artificial lift, product sales or Russia?

No, not really. That’s not material, Dan.

Then I wanted to dig in a little bit to the comments you made on North America and that you expect margins to reach a peak in 4Q and plateau in ‘11. How do you expect the peak margins in North America that compared to prior cycles, and what is the trajectory of getting there?

I’m glad you asked that question. I did not mean peak margins. I meant peak in terms of volume. Margins, it’s very hard to tell. Margin will move based on three things. I mean the product mix, volume of self work and then pricing. Volume is unique because you have a sense of. Product mix is the next one, and pricing you don’t know. I would not know when margins will peak in North America. I talked about a first peak, our sense is simply that sometime in Q4 and I think Q4 to be cautious. The volume increase will sort of level out into 2011. At this point in time, we do not anticipate volume wise moving up further. I could be wrong, of course. Margins, I don’t know Dan. Typically margins trail volume, so perhaps margins peak, a first peak, sort of a first recovery level, maybe in Q1 ‘11 or in Q2 ‘11 for the U.S., I don’t know. It’s a volume comment, not a margin comment.

How do you think about the margins in North America relative to international margins? Full cycle historically, we’ve always seen North American margins go well above and then also well below international margins throughout the cycle. Is there any difference in your outlook over the next fall?

Look, we don’t know, Dan. Our sense and maybe Andy has a different view, we haven’t discussed it. My sense is that North American margins will remain in this particular cycle below international margins at sort of similar level of maturity. That does not make it bad. It simply I do not think my judgment doesn’t have the rational in terms of implied volume in North America to rise above international margins. This is all based on the view, which I think is you understand it, which is on the elasticity of the supply curve of the gas. That is all this is. I mean the day that this is dis-proven because all a sudden the shale behaved differently than it is a different story. Once you have elasticity of supply, there really isn’t any need to bring volume up market wise beyond the certain level. Therefore, all things being equal, there isn’t a need for margins for the oilfield service providers to go beyond a certain level. So net-net, I think it stays below the international margins.

Last quick follow-up on your CapEx year-over-year change, is the reduction primarily coming from not having to spend in Mexico? Is there any change in your North American CapEx?

Of course, Mexico plays a factor it frees up some equipment, frankly, on probably a high return on capital type of applications. So, that is one issue we have internally an increase in North America, but it is modest. Nothing really much changes I mean we have a big emphasis on using the capital base that we have. In my short comments, there were sort of two things that we are focusing on for the next cycle. One is the margin, what level of margin are we going to attain and big emphasis on the international margins. The second one is use of capital and on the use of capital trying to lower the intensity. Therefore, the big emphasis on understanding the capital base we have and particularly it comes to equipment using it far, far, far more efficiently than we have historically. So, you should also interpret we have the lower CapEx. The lower, more reasonable CapEx number is nothing more than an indication of our emphasis on better use of capital.

Also, Dan, keep in mind, that September ‘08 when things turned we were running at $2.5 billion CapEx annualized plus and one of the reasons we were able to grow the way we did in the last up cycle is that we were trying our best to stay ahead of the growth curve in terms of equipment and infrastructure. When the market turned quickly, we were left heavy on assets. We were also committed out on our CapEx. We all would agree today that we would not have sent $1.5 billion in ‘09 in CapEx if we had the choice. So, we are quite heavy in I would just say long assets right now. Dan Boyd – Goldman Sachs: Yes. So there is somewhat of a catch up that should help returns as we go forward?

The growth expected in 2009, if you’re going to turn back the clock to August, September ‘08, probably the company that was in the worst possible position for as abrupt of a decline in economic activity, it was Weatherford. We are the highest growth company. We had extremely ambitious plans for 2009 both top line obviously earnings, and we were gearing up for it because we have a long lead time in our business, as you know and so think about a company, it is a high growth company with very long lead times and obviously equipment intensive. What could be a worse situation to have to face in an abrupt decline than the one I just described and that summarizes the events of 2009 for us, which has been slamming the brakes and slowing down and rationalizing the best we can without dismantling the infrastructure for the international? We did not touch the infrastructure of the international markets as a conscious decision. In retrospect, we probably should have communicated better about it, and in retrospect we should have interpreted the implication on our numbers better than we did, but the decision was made then not to dismantle the international infrastructure, not to weaken it, and it may or may not have been a good decision time will tell, but it was a conscious decision, and we did not just sort of sit there and the event sort of went at us without actually understanding what was happening. I would say net it was a communication error the best I can tell.

Your next question comes from Mike Urban - Deutsche Bank.

So a lot of project delays out there, not terribly unusual in the international markets, startup costs are a regular feature of the business for you, but that said, as you bid these projects. You think about the inherent returns in margins embedded in the projects, given that these delays are fairly common, is that something you build into your pricing in margins are there features in the contracts that allow for compensation for the use of your capital, because it does again seem to be kind of a recurring feature that seems to catch you by surprise when it would, therefore, imply kind of lower normalized returns. I’m just trying to understand how you calibrate that as you are bidding the projects and thinking about what you actually get versus what you bid the projects at?

I don’t think we do a good enough of a job of factoring in the amount of time it takes us. I think none of us do. I think we are no exception. I think it is particularly hard when you have abrupt stoppage and you kick back up again, which is what has happened to us. When you go through a period of two, three, four, five years where we keep on adding projects, Michael, then I think and so the whole business is gearing up and supply chain is gearing up and it is geared up rather, then I think it is easier to have a proper estimate and to cash it and implement it without any surprises. It’s when you abruptly stop like we did Q1, Q2, and Q3 and then we kick back up again where you have surprises. Having said that, if the question is, should we understand the time it takes and so forth better? Absolutely, there is no doubt. Most of the projects that we’ve taken on, if not all, tend to have at least in the minds of our clients and in our minds a very long life. Some of them it’s hard to believe. Oman, for example, is a 25 year project if you can believe it and China is very similar and so forth. So we also tend to be interested in things that are very long term, which tend to also make us maybe too generous on accepting mobilization times and so forth that are perhaps not all calibrated.

Now is that something you can change or will change going forward?

People react to difficulty and they adjust, so yes.

Does that then create projects that you might lose or walk away from based on perhaps as higher return criteria being paid more for capital that’s deployed versus what you might have done in the past?

At the margin, yes, but I don’t think business development has ever been an issue here, and therefore, I think we have a fair amount of flexibility to pick the ones we want to do and the ones we don’t want to do. So the criteria is, in terms of understanding the time it takes to mobilize are being tightened, but it’s up to margin, Michael. I don’t want you to think that we were so way off mark. I think these things are difficult, and there are events that are very, very hard to predict, but then they’re short term difficulties; they’re not lasting difficulties.

Your next question comes from Jeff Tillery - Tudor Pickering.

The Eastern Hemisphere revenue guidance, you laid out 30% for 2010. Incremental margins for the Eastern Hemisphere, if we went back to kind of ‘07, ‘08, we’re in the 25% to 30% range. What do you think a good benchmark for us to measure you against in 2010 is?

I don’t want to give specific incremental margin guidance right now. We’re going to go through this quarter by quarter. We’ll give you guidance on a one quarter forward basis, but I think that, if you were to go back and a reasonable expectation of something that you might consider right now, if you look back at the international business at the beginning of ‘09, you were running at about 20% margins. You end the year at about 10%. Consistent with our expectation that volumes are gradually going to creep up here throughout the year with a much stronger impact in the second half of the year, you might chart a path back from those 10% margins early in the year towards 20% at the end of the year. So, as volume picks up, the incrementals should be good. If volume picks up more, they’re going to be better obviously and we are not factoring any type of pricing improvement of any significance overall in the international market for the year.

We are not and that is absolutely correct. Pricing, if and when it happens, will be a very gradual thing in the international markets. That way we look for it in 2011, not in 2010, at least in terms of P&L impact.

On the topic of project delays, I just wanted to see if you had any visibility at this point on when some of those delays are starting to let up. In Q1 I mean we’re kind of a month into it already. I just want to see I mean is that do you have visibility for those some of those projects getting started are ramping in the second quarter, or is it too early yet?

Well, I was asked at the very beginning of the call one question with some specificity concerning Iraq, which I do not normally comment on. If you recall, I mentioned that we had four strings working, and I’m giving this by way of an example, that’s it and as you can sort of think of it as not atypical of the other plays. I think of the answer I gave, which was we have four strings running as we speak. We did not have four really in Q4. We were going towards four in Q4, so we have four today. It looks reasonable to expect, we’ll have eight running by the end of Q3, meaning turning, and basically the ninth one in April or May. So we do have traction, operating specific measurable traction. That is probably one of the hardest markets to mobilize if only for obvious reasons, which is the lack of infrastructure, etc. So you can extrapolate from that anecdote, if you will, on one particular market, which I have already addressed, and apply it to all the other markets we’re making day-by-day and week-by-week progress. We’re not sitting on our hands, and some of these things take whatever time it takes, but it is carefully monitored, and we are making progress, and it is being started up, and you should expect it to be.

My last question just on North America, in Q4, if add back the inventory charges, incrementals were in the 20% range. Obviously pricing was still much suppressed, and activity levels in the absolute sense weren’t that high in Q4, kind of this Q1 progresses, you get benefit from Canada. Is it reasonable to think about incrementals in the 35% to 40% range for Q1 at least?

Before Andy answers that question, I’ll make a distinction between North America and the international markets. I gave a rather long answer a while ago. I’ll try to explain what we didn’t do consciously in the international segment of our business, which did not touch the infrastructure. We did not take cost out. It was a conscious decision good or bad. We did not make the same decision in North America, in North America because again the prognosis from a secular standpoint was very different than international market. In North America, we went out of our way to lower our cost structure not only short term but long term. So therefore, what I’ve said proves to be correct at the operational level. The incrementals in North America with volume distinct from pricing, it should be good. With that, I’ll turn to Andy to give you a more specific answer.

35% to 40% is reasonable, Jeff, again based on the rig counts that we discussed earlier.

Your next question comes from Stephen Gengaro - Jefferies.

Two questions, the first following up on Mike’s earlier. As you look at the contracts and the pricing structure and returns, will that change the way we should think about Weatherford as far as growth rates relative to the peers and relative to changes in rig activity around the world or is it somewhat minor?

Do you mean that the factor we are likely to have a greater number of international integrated projects as part of the mix?

The fact that you’re maybe a little more careful calibrating the time and the mobilization costs fee contract?

I think it does not change the growth rate. We were being careful. I think we will be more careful. I think probably the reason why things can be a little bit slower. Some of it had nothing, that’s just essentially idiosyncratic. There’s no better way to explain it. The second is more of a function of the abrupt decline and then the startup again of a growth mode. It’s more that that creates I think difficulties than anything else. You should not presume that we will change substantially decision making on projects. No, we’re just going to be a bit more careful. It has no material effect on the growth rate up or down.

Then the second question, when we look at your CapEx for 2010, how should we think about that as it ties into the free cash flow and the balance sheet?

Obviously, free cash flow is a focus for us, Stephen. It was in ‘09; it will be in 2010. We expect that at that level, if we perform at the levels that where we think on the earnings side and EBITDA side in working capital, that we will be free cash flow positive in 2010. So I don’t want to help you back into a full year EPS number right here. That’s not the objective of it, but we do look at our CapEx not just as what we would like to spend obviously, but what we can afford to spend and what we need to spend. So the $1.1 billion number is reflective of that.

So you’re pretty comfortable that internally generated cash flow funds that pretty well?

Yes, completely, more than enough.

Your final question comes from Ole Slorer - Morgan Stanley.

First of all one question, Andy you mentioned other expenses of $40 million, was that also gain.

Principally, 90% of that what falls on that line is foreign currency, so it’s FX, this quarter it was about $9 million; it typically runs between $8 million and $10 million per quarter.

Again, back to the free cash flow situation, could you just discuss in context of your startup costs some of the ramps that you’ve had in CapEx? Working capital came down nicely in the fourth quarter. Where do you stand in terms of your financial flexibility, particularly if for some reason or another you were to have to pay off for the put associated with TNK drilling acquisition?

Sure, right now to-date although we’ve got north of $1.1 billion of liquidity just in terms of borrowing capacity on committed credit lines. So we feel okay there, and I think again we’re looking forward to this year being a free cash flow positive year. We don’t feel that we’re tapped out in terms of our ability to borrow in the market. I do know that people asked frequently about whether or not Weatherford is going to do an equity offering. To be clear so that everybody can hear it one time and at the same time, that’s not in the cards for Weatherford today.

That was basically what I was boiling down to. No, it does not look as if you will need to have any type of equity offering on our numbers either. I just wanted to hear you say it. Finally, could you talk about what type of capital you might have to come up with in the event that you get put the TNK?

The math is pretty simple, it’s about I forget, if it’s 25 million or 26 million shares times the delta between $18.50 and our share price.

So even with that, there shouldn’t be any constraints within your current capital program and borrowing facilities and debt structure?

That’s correct. It concludes our call. Thank you very much for your time.

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