Good day, ladies and gentlemen and welcome to the first quarter 2010 Weatherford International earnings conference call. My name is Gina and I will be your coordinator for today. At this time, all participants are in listen-only mode. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. We’d now like to turn the presentation over to your host for today’s call, Mr. Duroc-Danner, Chairman and Chief Executive Officer. Please proceed.

Thank you. Good morning. Andrew – Andy will read his comments and then I will read mine and we will take questions as usual. Andy?

Good morning. For the first quarter of 2010, we report adjusted earnings per share of $0.06. The adjusted number excludes the following items totaling $81 million after tax. A non-cash charge of $40 million as a result of the Venezuelan Bolivar devaluation; this came in below the $50 million estimate we communicated on the Q4 call. A $38 million non-cash charge related to the curtailment of our supplemental executive retirement plan; this was frozen on March 31, 2010. $6 million in severance and facility closure costs, primarily in the Western Hemisphere. A $5 million benefit related to the reversal of prior cost accruals for our exit from sanctioned countries. And finally, $2 million of government investigation costs. Compared to our Q4 performance, earnings per share increased $0.04 net. The field contributed $0.05 of improvement with a $0.09 uptick in North America, partially offset by a $0.04 internationally, $0.02 each from the Eastern Hemisphere and Latin America. The sequential operating improvement would have been greater but for one, an $8 million non-cash charge related to the TNK put and two, a one-time $7 million adjustment to Borets' equity and earnings. This stemmed primarily from asset write-downs at their operating company. Both items handicapped results in Europe/West Africa/FSU. Below the line items took away $0.01 of EPS sequentially with all items other than tax flat quarter-on-quarter. The effective rate for the quarter was 19.3%. On a consolidated basis, revenue declined to $88 million sequentially or 4%. In North America, revenue climbed 21%. The $154 million improvement was split fairly evenly between both United States and Canada. In the East, revenue fell 5% or $52 million. The drop was equal in both markets and was worse than the 3% to 4% seasonal decline we typically see during Q1. Exceptionally, cold weather in Europe…

Thank you, Andy. Follows my comments on Q1 and forward comments. Adjusting to the $0.02 penalty from TNK's put and Borets' asset write-offs, we view operational performance as $0.08 this quarter. Neither of these items is reflected of or relevant to Weatherford operations. Government imposed delays in Algeria, Venezuela's devaluation and extraordinary January-February arctic temperatures from Russia through China had a severe impact on the international segment. North America made the quarter. North America revenues outperformed Q1 '09 levels by 6%. North American margins surged 690 basis points with 46% incrementals, reflecting a substantially lower cost base and absorption effect. There was almost no material change in pricing that affected the quarter. Profitability surged on volume and operating efficiencies alone. North America EBIT margins are far from the prior peak at 12.6% versus 29.8% or just about 30% in Q1 '07. This is materially less than half of what we were, we have room to grow. International segment was weak across the board, probably it was seasonal, probably it was the weather, probably it was idiosyncratic to particular countries, and lastly, part of it was continued progression of mobilization efforts. Within the weather related category, Russia was very affected as was Asia. Russia's Western Siberia fields experienced prolonged operations shutdowns with temperatures touching minus 40 degrees centigrade. China and Australia were also very weak, also for climatic reasons. By way of an example, Bohai Bay was near frozen for two months of the quarter, an extraordinary event. Concurrently, Australia experienced severe flooding in Eastern Australia throughout the quarter, curtailing operations. Australia is 25% of our Asian revenues and with heavy concentration in the Eastern Reservoirs. China and Australia combine almost half of the region, that would be Asian region, a matter of great deal. Asia's margin and revenues were as…

Thank you. (Operator Instructions). And please standby for your first question. And your first question is from the line of Jim Crandell of Barclays. Please go ahead. Jim Crandell – Barclays: Good morning, Bernard.

Good morning. Jim Crandell – Barclays: Bernard, I know you've had in Brazil some $1 billion or so in new contract awards over the last six months. Can you give us some color on these and explain the role that maybe some of your new technology introductions are playing in these contract wins?

It's actually probably more with the past three months and six months than the – the total amount of contracts is probably closer to $1.2 billion. But you are very close to right. It covers, as best I can recall, six product lines, products and service lines. I think the new technology would, I think, qualify in the case of really one. The other ones would be existing technology. The one, which is new technology, is contracts run around MPD, which is managed-pressure drilling. The rest would be existing technology. That doesn't mean it is lower technologies. It just means that the breakthroughs that Petrobras expects its vendors to provide have not been brought on the market yet. It's something that will be brought on the market in the next two, three years, partly out of R&D being done in Brazil right now. Jim Crandell – Barclays: Okay. Bernard, most people look at your company now as geographically and rightly so, but you've invested a huge amount in R&D and technology development and I think a lot of these tools and services should be at a stage where they are coming to the market here over 2010 and 2011. Do you expect a real boost from new tools and services as a result of new technology going forward over the next year or two?

We wouldn't be doing it otherwise. Yes, we do. Jim Crandell – Barclays: Okay.

And actually more than into '11, I think this is into – probably the cycle is a five-year cycle from introduction of the technology and returns on it. Jim Crandell – Barclays: Okay. Are all the areas, Bernard that have – that were affected by either weather or political instability in the quarter coming back and I think I know that all of the weather related areas are coming back, but areas like Algeria, which has been affected, which is I think a pretty significant country for you, are they now showing signs of coming back as well?

I think all – obviously, all weather issues are finished. I – the politically impacted countries would probably fall into two categories, as best I can recall. One would be Venezuela, the other would be Algeria. Venezuela, it is what it is and we described our perception of the economic outlook for that market. Algeria, best I can tell, the crisis, which is a domestic crisis, has now been managed in one of the manner pleases the Algerian government and then so I think the normal order of business is back. So the answer is yes. Jim Crandell – Barclays: Okay.

And yes, it is an important part of our business in the Middle East. Jim Crandell – Barclays: Got it. Okay, last question, Bernard. I believe your position on Iraq has been that it's unlikely we will see any major oil company awards until the new government is straightened out. What do you look – what are you looking for now in terms of awards and do you think that these will begin to occur this quarter, third quarter, and do you think that most of the projects that have been approved will at least be awarded over the course of this year?

Lots of questions. First of all, I don't know. Second is, if I had to guess, I would say for us it's terribly important that a new government be formed by the end of the second quarter, it's important to that country. I'm not saying anything that I think the Iraqis would not agree with. Instability in terms of uncertainty is never desirable. So it's very important a government be formed before the – by the end of the second quarter. I don't think that major commitments are likely to be made. Of course, I don't know. It – I could be surprised. I don't think any contractual commitments of any magnitude are likely to be made until a new government is formed. If I'm wrong, it would be at the margin. And do we anticipate other awards – all awards of the contracts to be made in the balance of the year? No, there are just too many. In other words, there is just too much development to be done in that country. Too many players, too many reservoirs being looked at for development purposes. I can't imagine that everything will be awarded to everyone; I'm not talking about Weatherford in particular, between now and the end of the year. I think it's just too much, but I think some will be (inaudible) for sure. And we will be, I think, in a widely distributive sort of way. I've never been one to think in any way or form that Iraq would be the market of one service company or anything else like that, that's just operationally absurd. Jim Crandell – Barclays: And Bernard, do you think that MOC and SOC will grow their programs from these levels over the course of the year?

You mean the ones that they run independently? Jim Crandell – Barclays: Yes, the ones they – that you are doing in the South –

Gosh, we just barely started them. So I think that's probably a question you should ask in Q1 of 2011 probably more so than now. Bear in mind that with the operational target of having nine strings running by July 1, we take these things casually because we say, "Well, that's our objective and we try like hell to make it happen." But it is a tall order on the ground and I don't think anyone else has done it quite yet and we will be at nine strings by July 1. That means we will have more than 1,000 people working for us, we already have near 1,000 people working for us already in Iraq. So that is already quite an achievement and having these nine strings run well is another achievement, where it's not simple. So what I'm trying to say – not that concerns about the scope and scale of activity for those nine strings, I think if we do a good, efficient job of running them, which is again not easy in a brand new no-infrastructure market like Iraq. I don't think you have – I don't believe – I do not worry too much about those strings continuing to find utilization in all the reservoirs to be drilled, whether SOC, MOC or anyone else for that matter. I think our focus is strictly operational. And so – and then, the rest of the market expansion will more than take care of incremental capacity that needs to come to that market. Again, nine strings is not a small number, that's a big number. So getting it done and getting it done properly is already something of, should we do it. I think you will see it through our numbers in Q3 and in Q4, obviously. That's quite a jump already and that's one we should focus on. Jim Crandell – Barclays: Okay. Thank you, Bernard.

Your next question comes from the line of Ole Slorer with Morgan Stanley. Please proceed. Ole Slorer – Morgan Stanley: Thanks for that. Bernard, not a good quarter, but hopefully this marks a trough?

I think the prior quarter was the trough, Ole. Ole Slorer – Morgan Stanley: Okay, that's actually a good point. They are both a trough, you are right.

I'm not – I mean, from one trough to the next, maybe. Well, please go on with your question. Ole Slorer – Morgan Stanley: Middle East was a positive surprise given what we knew about Algeria and India. Could you give us a little bit more color on the rebound in the Middle East and how sustainable you think this is? Are there anymore costs to come relative to ramps or is this sort of a sign that the Oman and Iraq and India and Algeria and some of these headwinds are now kind of starting into slightly tailwind?

I think that – you just answered your own question, Ole. That's basically the – there is nothing dramatic I can point to. There are a few markets that will pull back that's probably inching up – inching, not surging, inching up. You have some positive trends in a lot of different areas, but they are marginal. But they do add up. The weight of startups, it was still heavy in Q1, but it tailed off towards the end of the quarter, some projects basically were turned off in Ethiopia. Oman went – impacted the whole quarter since they only got turned on about a week or 10 days ago. And Iraq continued to the whole duration of the quarter and will continue to – the intensity of the startups within the quarter were – is beginning to tail off. The only market really – markets that were disappointing, as in declining Q4 and Q1 were really India and Algeria for entirely different reasons. In case of India, you have essentially the end of – out of the six clients, major clients in India, you have the end of drilling program that took – that got curtailed in Q1 for the six clients. And then the monsoons are coming now. So nothing is going to happen until Q4, but they will kick back up again. And these things happen; there is nothing extraordinary about it. Algeria was different. Algeria was much closer to what I wouldn't describe a force majeure because the events were rather dramatic, but they are behind us now. So those are the two markets. The other ones, from Libya didn’t move; Egypt moved, had some signs of life; Saudi moved, had some signs of life. Now, for an example, these markets, the stat makes the difference. We do have a very large infrastructure in those markets, we are under-absorbed. I think people who understand the company, know this. It was a calculated bet not to dismantle or weaken in any way our former international infrastructure. As a consequence, a little volume goes a long way. So a little bit of what you saw in North America for different reasons, but international, we are hopeful that with the absorption benefits that we seem to have with a little volume when the little volume becomes a bit more than a little volume, then it will make a big difference. That's all that took place in MENAA, a little volume, not much. Ole Slorer – Morgan Stanley: Looking at Iraq, there is a big debate on the level of profitability there with just 14.7% margins in the Middle East, MENAA region. Would you say that Iraq was pulling margins up or down for the region as a whole?

Well, down for sure. Down for sure. It's in startup now. I mean, it's really premature. I don't know who passed the judgment on this, but I would say if we would pass in judgment on margins in Iraq a year from today, it would be too early. Well, I think you just got let at least a couple of years of operations to know the sorts of profitability the place is going to have. Pricing is – tends to be quite stout in Iraq and it should be. What we don't know is the cost of running things given the lack of infrastructure, et cetera and the difficulty of running things. That we don't know, don't know as well as we should. Because I think the judgment of this being dismissive or overly giddy about the Iraq in both cases is wrong. I've just got to let it play out. There is no other way. I know the street does not like that, but it is what it is. You've got to let it play out. We are very careful in the commitments that we take. Obviously, we are trying to push prices as high as we can. So we are careful to take on what we think we can do. And that, as bad as it is, is not an easy thing, but no more. And so we'll see what the margins are at the end of the day, but it's too early. Ole Slorer – Morgan Stanley: The reason why I asked it is, I mean you put up to 1000 people now, you've gotten up to eight basis. This is clearly a – a judgment, a bet which is very different to what at least two of your key competitors are doing, and just trying to get some confidence that you still feel that the judgment of this is correct and that the biggest cost of it is behind you.

For the first step of our development in Iraq, yes, it is. Now, there will be many, many different steps depending on where activity goes. When you do have 10 large commitments from 10 different consortiums to work on 10 chunks of reservoirs, I mean, if you add the numbers, it's almost unthinkable. So there will be different phases of development in Iraq. Our first phase is pretty much over in terms of the commitments in capital and operating costs and so forth and so on. You will see it still in Q2, but it's pretty much over. And then there will be a pause as we learn how to operate these things and presumably start getting some form of harvest. But there will be other phases, because that market will scale up. Again, I find it – and I would urge you, Ole, to think about it in those terms. I find it astounding. Now, I wouldn't pass judgment on profitability of a market that one doesn't know anything about yet. Pricing, I will tell you again, product line by product line, service line by service line, is very stout. So that can't be the reason. There can only be a judgment on operating costs or operating difficulties, which I would certainly respect, but practice makes perfect. I mean, you – and with practice, becomes a true knowledge of what is the operating economics there. We don't have any doubt that the commitments that we made will be financially rewarding in Iraq. What we don't know is by how much. And we are cautious about it. Ole Slorer – Morgan Stanley: So in other words, for the region as a whole, basically we'll just have Algeria starting up now, India no longer a headwind, Oman kicking in. We should continue to see the Middle East lead the margins within the –

Yes, yes. Most definitely, Ole. Certainly in Q2 and even more so in Q3, Q4. Or, put another way, we would be painfully disappointed if that wasn't the case, and they would be too. So certainly in Q2 and even more so in Q3 and Q4. Yes. Ole Slorer – Morgan Stanley: Okay. So that's good to hear. Turning to Russia, you made a very, very substantial bet on Russia nine months ago. Can you give us an update on how you view that investment?

It's – Russia is – has been a hard market. We closed the acquisition, I think, on August 1 if I remember correctly. And the market, between August 1 to date, just barely started to show signs of recovery and the integration has gone well operationally and the organizational melding of the two cultures has gone well. The market needs now to give us a little bit of a push. It is an oil-driven market in our case, mostly been gas. Why? Because our clients are essentially oil producers. Gazprom is not a significant client, insofar as they do much over what they need themselves. So it is an oil-driven market. If oil is sustained at the levels that's at, Russia will respond. Russia responds late, they will respond. So we are anticipating a strong second half of the year, but even more so a strong 2011. And I think you should then, I think, adjudge the value of the move we made in light of the results that a little bit of a healing in the market will provide. Ole Slorer – Morgan Stanley: Thank you very much, Bernard.

Your next question comes from the line of Angie Sedita with UBS. Please go ahead. Angie Sedita – UBS: Great. Good morning, Bernard and Andy.

Good morning.

Good morning. Angie Sedita – UBS: First, on Iraq, I would assume it's fair to – you are, obviously, in the process of starting up as equipment moves on with the July 1 startup date. Is it fair to assume that it would take two, three, even may be four quarters or well, let's say three quarters before you move beyond that startup phase to ongoing operations and you have better clarity on the margins?

Yes, I – we will be turning with the equipment on and around July 1, mind you, but the answer is yes. That's – otherwise, you are absolutely right. Angie Sedita – UBS: Okay. And then two, on Russia, Ole's comments there or question about the activity, what are your thoughts as far as activity or spending increases in 2011? I know at one point you were somewhat optimistic for a nice ramp-up into '11. Are you still anticipating the same?

Yes, I am. I probably have a bit more empirical basis for it, albeit I do understand that the (inaudible) of empirical basis in Russia is debatable. Angie Sedita – UBS: All right. And then finally, on Mexico, just some updates, an update on the lab there, what you are seeing, what do you think the likely outcome could be or do you have any insights there at this point?

Well, there are two different things. One is, you have service companies such as ourselves and also our peers being given a small chunk of the reservoir to try and drill and complete with a bit more freedom in how we use our products and technology. That's a good thing. And so that one is starting up as we speak. It's not that large for any one of us, but it's good, we welcome. Now, the other one is entirely different, which is the incentive contracts that have been proposed to the E&P sector. That one, really, you have to wait until about October or November until agreements are signed, if any. And we would welcome that insofar as it is a very large reservoir. We are referring to Chicontepec. There will be the same ones off-shore also incidentally. It is a very large reservoir. There is more to do there than, I think, one company can possibly handle, I'm referring to one E&P company. And so the presence – as allowed by Mexican law, the presence of foreign operators – there is service contracts and not different than the ones that you have for example in Iraq. But they are service contracts. And if some foreign operators, be they from United States, Canada, or Latin America, would come over and take a chunk of that reservoir. It would be a wonderful thing for the reservoir, for the country, and for the service companies like ourselves. I will point out to you that there is already that sort of thing existing and it is one of our clients. Best I can recall, Petrobras is operating already on that basis up in the north in Burgos, and we are actually running the string for them very successfully. And so we really welcome that. To summarize, the latter service companies are – our peers – it's starting up now. It's a good thing, it's small, we welcome it. But the real incentive contracts for – of operators is going to take the balance of the year to sign and we hope many people sign up. Angie Sedita – UBS: Great. Thanks, guys.

Your next question comes from the line of Bill Herbert with Simmons & Company. Please go ahead. Bill Herbert – Simmons & Company: Thanks. Good morning.

Good morning, Bill. Bill Herbert – Simmons & Company: Bernard, in regard to your prophecy of 30% growth for Eastern Hemisphere, we are at about a $1 billion run rate per quarter in Q1. And I guess, in order to hit the 30% target, it would have to be up about $400 million per quarter at least Q3 and Q4. Rank for me the – at least by major market, the biggest contributors to that growth from Q1 into Q3 into Q4. And it doesn't have to be 10 countries, but the top three or four.

I mean, it's not – the easiest way I can put it to you is like this. Some of it, we can take no credit for. The simple math of the Russian operations at TNK, one full year at Weatherford, '10 versus '09 or '09 versus '10 basically represents about $300 million. Bill Herbert – Simmons & Company: Okay.

Or maybe a bit more. Bill Herbert – Simmons & Company: Although that's probably reflected in Q1, right? So what I'm really talking about is Q3 and Q4 versus the first quarter at about $1 billion. So – I mean, presumably, you've got a full quarter of TNK right now. Yes, you've had some weather issues, so you can –

I'm immensely surprised, Bill. So yes, point taken, but it was immensely surprised. Bill Herbert – Simmons & Company: Got it.

But you've got some of that. The second thing you have is just the mere – the mere arithmetic of what is being started up in the proud country of Iraq. It's somewhere like an incremental $300 million, $400 million. Bill Herbert – Simmons & Company: Got it, right. And what about Algeria and Libya at all, which were essentially stagnating in Q1?

Well, I don't want to get too granular here, to use one word that I think is popular in your tribe, but – simply for competitive reasons, but you have – I'll just say this. We are back to starting up now five strings in Algeria as we speak – Bill Herbert – Simmons & Company: Okay, good.

These are big numbers. And so I'll just stop here because I now get into – then you have ramp-ups going on in China. I'll just stop here because it – Bill Herbert – Simmons & Company: Keep going.

No, no, no. Okay, but I mean by that is that I think the risk that you run, Bill, on that number and I don't blame you for asking that, is that simply is that we hit an operating snag. Bill Herbert – Simmons & Company: I hear you, but I just wanted to get a sense as to – I mean, those are big numbers and I wanted to get a bridge there, which you have –

Andy would like to say something.

Bill, don't forget that coming in – I mean, we just finished talking about the weather issues, the political issues, and everything else, as well as your normal seasonal decline from Q4 to Q1. Bill Herbert – Simmons & Company: Understood.

You are starting at what I'll just call a suppressed number. Bill Herbert – Simmons & Company: I hear you. So second line of inquiry here, Andy, we've got about $1.1 billion in capital spending budgeted for 2010. I think $500 million of that is maintenance, correct?

Correct. Bill Herbert – Simmons & Company: So $600 million of growth CapEx. Can you parse that for us by geo-market, where that $600 million is going?

International. Bill Herbert – Simmons & Company: Got that, but I mean, where?

I think, Bill, I don't want to specific with respect to countries or product lines. Bill Herbert – Simmons & Company: Okay.

I don't think that behooves us. Bill Herbert – Simmons & Company: Is over 50% of that Iraq?

No, no, absolutely not.

That is spent already. Bill Herbert – Simmons & Company: Oh, that's spent already?

Pretty much, yes. Bill Herbert – Simmons & Company: Okay. Wow.

Iraq is – Iraq, I mean, my goodness, the equipment is on the ground at different parts of the Iraq – on the way to Iraq are on ground. If we are going to start turning by July 1, Bill, we spent the money about nine months ago or 12 months ago. Bill Herbert – Simmons & Company: Okay, good. And then last question for me. What do you think, at least at this stage, recognizing that it's early days, is going to be – I mean, the thing is, because your prepared commentary seemed to accentuate the blossoming of all you – of what you have done in 2011 for the most part with sort of a gradual uplift and maybe something more than that in the second half of 2010. So with – with regard to 2011, hitting your objectives and targets, what would be the required growth CapEx from this point forward to meet those?

You mean, the – I mean, CapEx in 2010 won't be any different than what we said it would be. Bill Herbert – Simmons & Company: No, no, no. I hear that, but beyond the $600 million that you're going to spend in growth CapEx.

It depends on how we can see 2012. Bill Herbert – Simmons & Company: Okay.

It is – there is really a long lead time on – which was one of our problems in 2009 until very recently. The 2008 commitments were really very large for us and then they were aborted. I think we talked about that and there's no point in revisiting that. But there is a long lead time on these things. Bill Herbert – Simmons & Company: No, I understand. But I mean – I guess, part of the thesis here is that you guys were coming into the Lehman implosion, if you were, you were the most operationally geared for growth on multiple fronts. You are effectively overinvested, if you will, with regard to the current climate and probably for the ensuing several quarters. And I'm just curious as to how much running room you have with regard to attaining growth.

Everything you said is absolutely correct and the reason we are not immediately saying, well, in 2011 we would like to just spend XYZ is we don't – because we don't know the growth rate in 2012. We – but what we do know and this is what I want to confirm is that there is a percentage of the growth capital required in '11 to '12, which is already spent, if you will. Bill Herbert – Simmons & Company: Yes.

You still have some – we still have some slack capacity, let's put it to you this way. It's not in all product lines, it's not in all technology, but we have enough of it that whatever growth capital we'll have to spend in CapEx in 2011to fuel 2012 will be less than the growth it will deliver, materially less. I just don't know what the number is. So I'm – you are correct and I really want to confirm what you just said as being very accurate. I just can't give you numbers because I don't know. Bill Herbert – Simmons & Company: I understand. Thank you very much.

Your next question comes from the line of Jeff Tillery with Tudor Pickering Holt & Company. Please go ahead. Jeff Tillery – Tudor Pickering Holt & Company: Hi, good morning. I just wanted to see if you guys could give us an update on the FCPA and Department of Justice investigations, just any update you can give, kind of status, timelines, along those lines.

Oh, my goodness. I think that we have done such immensely comprehensive disclosures. At this time, I would probably rest on the disclosures. Jeff Tillery – Tudor Pickering Holt & Company: Okay, fair answer. For the Eastern Hemisphere, the second quarter guidance implies somewhere between 35% and 40% incremental margins. Is that how you think about the incrementals as we go over the next couple of quarters with a lot of the capital and infrastructure already in place? Is that the type of incrementals you think you can generate?

Let's take it quarter-by-quarter. I don't want to start going out further throughout the year. As Bernard mentioned, just fixed cost absorption is a significant driver for us on the incremental margin side. On the North America side, it's not too clear about what you might be able to squeeze out in pricing. There could be some modest pricing improvements as we move through the year. On the international side, it's really volume based. It is not price based at all. Jeff Tillery – Tudor Pickering Holt & Company: And then just one last question on Latin America. Does the second quarter – is that burdened by demo costs and whatnot on the rigs as ATG-1 and 2 wind down? And if so, I just wanted to get a feel for order of magnitude on that.

Yes, that is a number that we don't know yet, because our obligations really depend upon how successful the vendors are, as well as we are in placing those rigs with other work. There have been quite a number of local companies who have won contracts that I don't think have yet filled – fulfilled their equipment requirements for the projects. And so we will report on that next quarter once it's – once it's become clear to us. Jeff Tillery – Tudor Pickering Holt & Company: And in terms of what you talked about from a guidance standpoint, did you assume some in regards to demo costs in there? Just trying to see how much.

Yes, I did. Jeff Tillery – Tudor Pickering Holt & Company: Okay. All right. Thank you very much, Andy and Bernard.

Your next question comes from the line of Dan Boyd with Goldman Sachs. Please go ahead. Dan Boyd – Goldman Sachs: Hi, thanks. Andy, I'd like to just follow up on that last question and talk in terms of incremental margins. I assume, given the growth you expect in the Eastern Hemisphere, the majority of the margin expansion is going to come from that region. We just saw a 46% incremental margin with no pricing in North America. In terms of a range of incremental margins, should we expect them to be in the high 30s with that type of growth just from the fixed cost absorption?

On the international side – so taking into account both Latin America and then also looking towards the East and looking at it on a sequential basis, not full year – on full year, you should see anything – let's put it between 25% and 40% sequentially, incremental margins. Dan Boyd – Goldman Sachs: Okay, that's helpful.

It's likely to be stouter in the East sequentially than in Latin America as the Mexican contract gets worked out. But in general, that's absolutely right. Dan Boyd – Goldman Sachs: Okay. And then also, you mentioned all the new technologies that you are rolling out. It looks like you are gaining some traction in Brazil. Are you finding customers reaching out to you more frequently, giving all the consolidation in the market, where they want to support another competitor?

I'd like to say yes, but that would be an overstatement. What I – the answer is, not materially. However, what I have noticed is that I'm asked the question on consolidation more often. I never – I've never asked the question before. It is a topical issue that comes out with our clients, either with – in sort of in light talk or in more serious talk. So I think it's on the number of operators in mind. But it – I cannot say that has allowed us a particular edge in the marketplace, no, not materially. Dan Boyd – Goldman Sachs: Okay. And then I just wanted a clarification on the guidance that was given. With Eastern Hemisphere, you expect a $0.04 EPS improvement sequentially. Does that include sort of the reversal of the charges you took on TNK and on Borets, or does it not?

No. Dan Boyd – Goldman Sachs: Okay. So we should think about it from – if we wanted to go operationally, we should start with the $0.08 and then –

Correct. Dan Boyd – Goldman Sachs: – move forward as opposed to – okay. Thanks a lot.

Your next question comes from the line of Mike Urban with Deutsche Bank. Please go ahead. Mike Urban – Deutsche Bank: Thanks, good morning. In Mexico, I was wondering if you could detail any efforts you've undertaken to adjust your cost structure, given that the first two ATG projects are running down. Is there some level of infrastructure or supply chain or whatever that you're maintaining there in anticipation of additional work, or is that kind of more of a next-year event, so you need to scale down in the meantime?

Michael, to give you a sense of perspective – the answer to all of the above is yes. To give you a sense of perspective, Michael, is that, at its peak, our operation was flirting with 50 strings. More recently, in the low 40s, I think 42, 43 strings. And we are taking it down. As we speak, it's pretty much done all the way down country wide to 17 strings, give and take. And that's sort of give and take, it will move around, but not quite 20 strings in other words. That's quite a draw. And that's pretty much done. So clearly, all that stuff got done with some – lot of operating pain and consequences and so forth. I would also add that when it was running – and this maybe academic for the street, but it isn't academic for me, when it was running, it was a very fine operation and it ran extraordinarily well and some of the last wells we drilled – and I'm talking not just one well, but the tens and twenties and thirties of wells that we drilled, we drilled extraordinarily fast at very low cost. So we definitely, in our minds, proven sustainably that the cost curve can be pushed down further, much further, on that reservoir. Be that as it may, the budgetary issues of our clients are what they are. Money is not available, so things have to be scaled out for the time being. And so yes, we've taken down the cost structure in Mexico. We have a very large infrastructure that we left in Mexico for good reason. It remains, post all – post the completion of ATG-1 and 2, which will be completed whenever it is completed, we will be left with a very large…

I think that's a fair comment, Michael, but we are very careful of how we calibrate that. That's a fair comment.

That's a fair comment. And Michael, a lot of equipment that is obviously very mobile equipment is getting pushed to different countries, both within that region and outside that region to reduce that D&A burden. But on the infrastructure, I'll call it, no changes are being made to take down any kind of infrastructure there.

To add a typical example to what Andy is saying, this is a very modest scale operation compared to what Mexico was, but much of the demobilized equipment out of Chicontepec is moved to different markets. And for example, we are starting up a three-string integrated operation in Colombia that's essentially Mexican equipment. I mean, this is simple. Now, three is not 30, it's not the same scale, but these sorts of things are happening and you would expect them to happen. Mike Urban – Deutsche Bank: Okay, makes sense. And then moving back to Russia, you talked about the integration, obviously the weather issues. But some of the softer issues and some of the goals you've had there in terms of pulling through additional services, gaining additional customers, any progress to report on that front?

I think probably the one that's easier to measure for you is whether we get any traction with other clients than TNK and I think there are two that we are getting traction with, modest or maybe – but encouraging traction. And one is Rosneft and the other one is LUKOIL. And then in both cases, both drilling and completion and stimulation – and it's really on the back of these – the capabilities of the operation we have and the infrastructure we have. It's a beginning. So the answer is yes, there is progression there. In Russia, like much of the Eastern Hemisphere, things take time. But I think we are pretty much, in terms of penetration of the market, where we hope we would be. Mike Urban – Deutsche Bank: Okay, that's all for me. Thank you.

I think we are – we have just been told, we should take one more – one last question and then cut off the conference call.

Your last question comes from the line of Robin Shoemaker with Citi. Please go ahead. Robin Shoemaker – Citi: Thank you. Bernard, I wanted to ask you about – a little bit more about North America. It looks like, if you adjust for the fourth quarter one-time charges you had for inventory and so forth, that your incremental margins were about 36% sequentially. I wonder if that's sustainable. We have heard about rising costs from your suppliers that would impact North American incremental margins potentially. And if you could discuss where you've had the most success in raising prices in North America, in terms of product line, and least success?

Actually, Robin, we really haven't much price increases at all, at least in Q1. So that's – to no discernible extent of where the margin improvements are pricing that. That doesn't mean we won't get some, doesn't mean we aren't getting some right now. But in Q1, that was not an issue, not discernible, that's one. With activity rising, costs rise. Absolutely correct. So you can expect pressure from that side. On the other hand, North America differently from the international business we have, we took the costs down rather dramatically in 2009. And we took it down both variable and fixed costs. While the variables that – obviously, they climbed back up again, and that's one issue. But the fixed cost, we really took down really quite hard. Our prognosis in North America is different than international, Robin. We don't see a long-term secular growth in North America. Well, maybe we are right, maybe we are wrong. We see long-term secular growth in Eastern Hemisphere and Latin America. So our approach is now completely different. It's really a tale of two cities – international, we kept the infrastructure intact and therefore, we have a heavy, heavy under-absorption situation there. North America is quite the reverse. The question you want to ask is, if activity keeps on ramping up, we don't believe it will, but if it does, then we will have a fixed cost problem insofar as we may outgrow our existing fixed cost structure. But we don't expect that to happen. Robin Shoemaker – Citi: Okay. So you've – you mentioned stimulation services in North America and in this quarter. Is it true also that you haven't had pricing improvement there? And what about further investment, organic growth of that business?

On the latter, I don't think you will see much of anything for us. Our peers may want to invest some more. That's their decision. You have some pricing improvement in stimulation. You have to, because the pricing was so distressed. So you have some. How far will it go? I don't know, but you have some. You have pricing improvements here and there in different parts in the service lines and you continue to have some in both the U.S. and Canada. You just didn’t have that much of anything going on in Q1. But in Q2, Q3, you will have the benefit of some. We don't expect too much, but we'll see. We will take as much as we can. Robin Shoemaker – Citi: Just finally then, do you see any signs of – already of weakening or trailing-off of activity in the North American what you call dry gas basins, which would be most impacted by the lower gas price?

Not yet, but – not yet, but if you read the comments I prepared, we view it as a – well, this is sort of obvious. Gas wells that come in with a loss of condensate are just wonderful businesses to keep running. Some of the shales have the low cost structure, not all the shales. And oil is oil. That market will continue to do well and displace the other markets, which is the dry gas market, with more traditional cost structure. So that's – I think the prognosis for that sort of behavior, you probably know it as well as any of the – any other service companies you'll talk too. Robin Shoemaker – Citi: Right. Thank you, Bernard.

You are welcome. This concludes the call. Thank you very much.

Ladies and gentlemen, thanks for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day.