Good morning. My name is Karli, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2011 Weatherford International earnings conference call. All lines have been places on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator Instructions).

Good morning. Andy will start with his prepared comments. I will follow as usual. Andy, please?

Good morning. For the first quarter of 2011 we report non-GAAP EPS of $0.10 before excluded items of $18 million after-tax. GAAP EPS was $0.08. My notes will address the non-GAAP $0.10 number. Sequential and year-on-year comparisons are to our non-GAAP 2010 results, which have been restated. The excluded items include $8 million of after-tax severance charges and a $9 million after-tax charge incurred in connection with the termination of the corporate consulting contract. Both of these items relate to efforts to improve our cost structure. They are expected to benefit future periods. We also had approximately $1 million of after-tax expense related investigations. A reconciliation of these items can be found on our website at weatherford.com. Sequentially, the field declined at the operating income line by approximately $75 million or $0.06 while below-the-line costs came in approximately 18 million or $0.02 higher. Lower minority interest and taxes added $0.02 as a recognition of discrete tax benefits pushed this quarter’s effective tax rate down to 21.4%. Of the $75 million drop in the field, there was a 97 million drop internationally, offset in part by a 22 million improvement in North America. Approximately $16 million of the international drop related to a charge due to a new equity-based wealth packs in Columbia. Although the amount is payable over a four-year period, we determined that the appropriate treatment was to recognize the entire amount in the first quarter. The 18 million sequential flux in below-the-line cost were driven principally by a corporate expense, which at 56 million was approximately 13 million higher than the prior quarter; due principally to increase professional fees and employee cost. R&D expense was approximately 7 million higher than the prior quarter, principally due to write-off of prototypes. Other came in at 19 million, 1 million higher…

Thank you, Andy. A number of political, climatic, and self-inflicted headwinds affected us in Q1; the loss of North Africa as a region, temporary shut-down in Egypt and Tunisia, the ongoing shutdown from Libya, and the paralysis in Algeria. Two, the temporary loss of most of our Yemen and Bahrain operations. Three, the loss of most of our Australian business due the extensive flooding of Queensland. Four, the seasonal pullback of North Sea, Russia, Caspian and China. Russia’s and China’s decline was severe. Finally, the harsh weather in the U.S. for most of February scaled back progression in the an otherwise strong North American region. All of the factors described above we’ve known, the economic effect was worse than anticipated to the tune of about $40 million worth of short-fall that penalized the quarter a further $0.04 than expected. Even though it has no relevance or quarterly operating performance, it is booked as an operating cost, not as part of the tax line. Below-the-line items, our 4X loses, prototype, write-offs and other corporate cost amounted to $0.03 penalty compared to expectations. It all adds up to a very messy quarter and poor results. It doesn’t reflex the operating quality and tactile positioning of Weatherford, nor does it do justice to the market forces at work. We see a strong North American market and improving international performance in the second half of the year. I’ll follow with a [inaudible] how we see 2011 unfolding in an attempt to provide perspective. 2011 should be a better year for Weatherford. We expect 2011 to show a 20% top-line growth of 2010. The mix of geographic performance will likely be different than we had originally anticipated. The year-on-year growth should be stronger in North America than in the international segments. In fact, by the…

(Operator Instructions). Your first question comes from the line of Dan Boyd with Goldman Sachs. Dan Boyd – Goldman Sachs &Company : Hi, thanks.

Good morning. Dan Boyd – Goldman Sachs &Company : Bernard, you know, you raising the CapEx again, but you know, obviously a lot of moving parts in your business, a lot of that is seemingly transient, so two parts to my question. One, if we were to look at all those moving parts and we were to normalize them, say things are back to normal except maybe Libya by the fourth quarter of this year, where would think margins would be assuming no other improvements. Also, where are you seeing or what is giving you confidence to raise the CapEx again?

All right, so let’s maybe handle the second question first, which is confidence on raising the CapEx. It’s definitely a function of business book and the visibility we have for the balance of the year in our various regions; North Africa being the only question mark. So that’s one. Margins, well, giving specific guidance is probably foolish. What we can say is that we expect North America margins to continue to improve. Obviously, year two is always – we set it aside because of Canada. But between now and year end we should expect North America markets to move up. And second, international margins will recover, not maybe because I think Q1 was unusually constraining and difficult in many respects both political and carminic, so you have that. Then second, I think volume coming internationally. And thirdly, pricing coming internationally. Not everywhere, not across the board. All three add up to providing a shift in margin with the international segment between now and Europe. So the force is in motion, we understand, and the business book we can see. Those are the two factors. Dan Boyd – Goldman Sachs &Company : Maybe if you could help me understand a little bit from a Geo-market perspective of where that additional CapEx is going. North America is where all the strength is. Is that where it’s going or are you seeing incremental opportunities internationally…

No, the bulk of it is going internationally. What we have in North America is being held in terms of plan; the bulk of it is going international. Dan Boyd – Goldman Sachs &Company : Okay, thanks.

Our next question comes from Brad Handler with Credit Suisse. Brad Handler – Credit Suisse: Thanks, good morning.

Good morning, Brad. Brad Handler – Credit Suisse: Good afternoon to you guys. Thank you for the color, Bernard, on the different product lines and kind of the outlook for pricing. I guess I was – maybe I could draw you out a little bit more on some of those and ask if there’s some regional differences there. So for artificial lift, for example, is there a – there isn’t really an excess of capacity to work through, is there? I might have guessed it was already pretty good leverage on the artificial lift product line just to start out with, for example.

Well, pricing on artificial lift today is a North American issue. In other words, in the course of the second quarter, actually in this quarter, we have moved our pricing structure in artificial lifts up pretty much across the board. So this is an indication of what is going on in some of the product lines in North America. That has not happened for that same product line in the international markets. The price increase is different depending on what component in artificial lift, but it is across the board and it has happened, I would say, Brad, maybe a couple weeks ago; North America only. Nothing international yet. So that we say is an illustration, then so be it. Brad Handler – Credit Suisse: Okay. Maybe a similar conversation, or similar on the managed-pressure drilling side. I guess I’d be curious for some commentary anyway about how you’ve seen demand pick up maybe over the last several quarters, kind of how that’s run and then the pricing dynamic. That seems like it’s a fairly unique product line and a pricing set that you’d get to – you’d have a large ability to kind of dictate it if I understand it right.

Well, I don’t think anyone ever has a – once in a while one does, but it does not – Managed-pressure drilling is two things; one, it is a product line which is moving rapidly in terms of growth based on different applications. I will break them down into two parts. In general, efficacy of drilling and then the other one is safety in the post-[inaudible] kind of world. So whether it is during efficacy or safety, you find gradually through a process of education, a spreading of the advantages of MPD, managed pressure drilling, or closed drilling, whatever way you want to call it, throughout the industry. And it is a multi-[inaudible] type process. Today what we are facing in MPD is as much an issue of us scaling up the size of the product line well wise - this is as much of an international issue as it is a North America issue – in a manner that is responsible with high quality. It is as much that issue as it is the issue of how well or how quickly we can price this product line so that we maximize returns. There’s really both issues at the same time. But you pick a very good product line also to show the dynamics in motion. MPD is different than artificial lift, which is a very well-known product line, the one which is hitting the sweet spot, albeit with backlogs that delay the recognition of pricing. MPD is different. It is a very large product line; already it’s half the drilling services. So it is something which is not far from the billion-dollar mark but it is through its application getting a lot of growth and also has obvious margin expansion and pricing opportunities. But that’s one more question of scaling it up throughout the world in a responsible and high-quality fashion. Brad Handler – Credit Suisse: That makes sense. And if you will allow me just – some of the “more conventional” lines whether it’s directional drilling and formation evaluation, I just want to make sure I'm calibrated right on your comments. So it’s – things start to – there’s enough tightness in the global markets for that, so you’re getting pricing by the second – you’re starting to get pricing by the second half of ’11 and it accelerates through that period? Is that clear?

My comments on formation evaluation, which sort of fell into – characterized are how custom designed they for shale, that’s a separate issue. The second comment I made is that I felt that in North America, not internationally yet, in North America directional formation evaluation, and open-hole completion, all three of them, are probably positioned now to start getting some pricing recognition. Some of the product lines in North America have that recognition already. I think you know which ones they are. Others, such as artificial lift or the ones I just mentioned, or MPD, or fishing, or drilling tools, these product lines now are getting some price recognition, which is necessary. It’s only because they went down so much in the ’09-’10 recession. Brad Handler – Credit Suisse: And does that have – if I'm thinking about directional for example, or ore formation evaluation, is that – does that start to – that tightens things – that suggests it’s tightening globally as well, right? So you are making some pricing commentary about…

Not internationally. Not internationally. I think internationally what I’ve observed on formation evaluation, and on hole-completion come to think of it, internationally I have not observed any propensities for some pricing muscle at all from any of the players. What I have observed in North America is that, North America again, not international, is that the market dynamics suggests that you have opportunities right now for individual players, certainly for people like us. My peers will do what they feel is right. Brad Handler – Credit Suisse: Interesting. Great, thanks for the answers.

(Operator Instructions). Our next question comes from Angie Sedita with UBS. Angie Sedita – UBS : Good morning, guys.

Good morning, Angie. Angie Sedita – UBS : Bernard, on Algeria, you mentioned the uncertainty in the region and I know you had hoped of your six strings to have three to maybe even five turning in Q1. Could you give us some color on how many are turning or do you expect to turn in Q2, and when – do you have any clarity on when you could have all six turning? Could it be in the second half of 2011 or even is that a question mark?

No, actually, it’s five strings, but you’re close enough. You’re referring to the integrated project for the [inaudible] Field in Algeria. Actually, the news there is positive, which is in – as of right now we have two strings of our drilling and drilling well. There’s a third string, we’ll be starting to drill sometime let’s say in the month of June and the other two are pending. We’re waiting on well price preparation and the like. So what it means is that by the end of the second quarter, this quarter, we’ll have three out of five. After all this time we’ll be drilling and if the third is performed like the first two, drilling well. So that is constructive. My comment has to do really with the normal course of business where what we have experienced is an unusual level of delay or slowness if the word existed on behalf of our clients, to go through routine procedures. And as a result, at times projects go not funded and are interrupted. And this is not a Weatherford issue, this is a general issue, which one, I think you can explain by a great deal of understandable distraction given the viewed political environments that surrounds that country, which has remained reasonably quite for the time being. In other words, our time’s been distracted and as a result things are not getting done, it slows everything down. The [inaudible] Field, and the project you identified, actually after all this time is progressing well, understanding that the funding – the funds for this project were preapproved a year ago so there is no administrative steps to be taken, just well-side preparations. So it is really market which is doing well from the new project standpoint since it finally got started, not operating normally when it comes to the routine business, which is a variety of product lines in all sorts of different contractual applications. Angie Sedita – UBS : Perfect, good color. Also, Bernard, on your opening comments, I thought you mentioned that you may consider selling some non-core assets. Could you give us some color on that could be considered non-core assets?

When I drafted my notes, I hesitated to that because I thought I’d get a question like this, which would be easily misunderstood. It’s nothing material. In the aggregate, it may add up being a non-trivial number if we’re successful. But we have a lot of small businesses, which we inherited over the years. That’s part of the process of growth by acquisition. In particular, we have nurtured these positions and they’re healthy. They’re doing reasonably well. They just don’t belong at Weatherford. None of the you would actually know. And so I would suspect that, Angie, over the next 24 months, if we’re successful we – we’ll you’ll know about it because you’ll see it in our numbers. We will sell chunks of 50, 100 million or something like that, or perhaps a bit more businesses and the only point is efficiency of capital, which is – it’s one thing to want to run your CapEx and your working capital efficiently, it’s another also to give back to the – to a better owner in terms of core focus, assets that don’t belong at Weatherford. Which is good because you should focus on what you do well. That’s it. I don’t think it’s something that is terribly strategic and maybe it’s not something that ought to take too much of your time and attention, but I think it’s in the [inaudible] that you take a look at it. Angie Sedita – UBS : Okay. Okay, that’s helpful. And then finally, I know you cannot give a granular answer here on SCPA, but just very generally, I’ve heard that essentially it’s three issues that could be resolved separately given that they’re pursued by different governing agencies. Is that a fair statement? And what would the likelihood be that it’s not resolved until 2012?

Well, Angie, I think – there’s an extensive disclosure in our public filing which hopefully are reasonably helpful. And I would encourage you to read them. Beyond that, I will tell you I hope for the best. I’m not going to say anything I can’t. Angie Sedita – UBS : All right. Fair enough. Thanks, Bernard.

Thanks a lot.

Your next question comes from Bill Herbert with Simmons & Company. Bill Herbert – Simmons & Company: Thanks. Good morning.

Good morning, Bill. Bill Herbert – Simmons & Company: Andy, so we’re looking at – we’re looking at a $0.05 hit for North America quarter on quarter due to Canada, which is sensible in terms of expectation. With regard to international, getting to a $0.15 number overall for the second quarter, does that lead us to the conclusion that international margins are likely back to Q4 levels? Is that fair?

I don’t think, Bill, that in term of the international side, if you start with the $0.10 and depending on how you want to treat the $16 million number in Columbia… Bill Herbert – Simmons & Company: Right, it’s $0.01 or $0.02 right there.

So you can think 12 minus 5 is 7 and so narrowing the gap is – we’re talking about $0.08 to $0.10. And the variability in that really has a lot to do with one, which countries pick up internationally in terms of perhaps solving some paralysis. And two, which areas that happens in that product line and mix. So it would be difficult for me to tell you that absolutely international margins would be back to Q4 levels overall. I wouldn’t want to commit us to that. But is it possible? Of course it’s possible. Bill Herbert – Simmons & Company: Okay, then let me address some of the other items that perhaps helps clarify that bridge, if you will. I didn’t hear you talk about tax rate with regard to guidance. Perhaps I missed that. What should we be thinking about a second-quarter tax rate?

I think that there is, obviously we previously announced 27%. There’s the upward pressure on that rate we expect due to a higher percentage of earnings coming out of North America than originally anticipated as well as the flux of profitability in various international markets given the low level of performance in Q1. Bill Herbert – Simmons & Company: Okay, and then with regard to your corporate expense, you guided to 195 for the year. If memory serves me well, we did 56 in the first quarter. What do you think is a reasonable expectation for the second quarter?

Mid 40s. Mid to upper 40s, but I think somewhere in the 46, 47 million range.

Remember, Bill, you have the number – that’s always tough with what’s happening, so it’s some mixed emotions but on and around corporate, you have a number of different things, some of which we disclosed, which moved that number up. I don’t think these things are necessarily there in other quarters. Bill Herbert – Simmons & Company: Okay. That’s all I have. Thank you very much.

Thank you.

Your next question comes from Rob MacKenzie with FBR Capital Markets. Robert MacKenzie – FBR Capital Markets: Thanks, guys. Bernard, I wanted to dig a little deeper on what you said about North America being stronger than expected here. Obviously you guys laid out three things – U.S. shale exposure, Canada and catch up in volume and pricing. If we layered pricing into the first two factors, you know, U.S. shale exposure and Canada, obviously, you know, Canada, you said down to few but on the U.S. shale side, how much of the incremental strength would you say is from your formation evaluation business that you mentioned versus lift and the rest of it? How would you split up that strength and where you see it more so and how do you see that playing out throughout the year?

I think it’s going to go from strength to strength. I think lift is faster, more measurable, more traditional. Lift has done well. Lift is likely to do better based on volume and based on pricing. We can see it in the order book, which takes us pretty much through year end, but there’s still some volume we can add though because there’s some flexibility in our supply chain. This is a – we see lift evolving in a traditionally very strong sort of way, backed by the price of crude oil. So that’s traditional. And it’s measurable, you can see it, you can see that actually evolving in 2012 in the North America market. The whole business in shale and the formation evaluation I think is different. Shale’s, to begin with are not a short-term phenomenon, it’s a very long-term phenomenon. And it is as [inaudible] agent in our industry, whether it’s gas shale or oil shale. Gas shale being more the [inaudible]. We take the view and the conference call is not the place for me to do it, to express this. We have an unusually good formation evaluation portfolio. We’re not the largest in that business, I'm very clear. But we are the neutral portfolio formation evaluation which is strategically very suited, I would say custom suited for shale. As we unfold that product line and perhaps we do well in terms of application, you’re likely to see that provide a boost to our formation evaluation business above and beyond what market forces would normally do. That’s it. Sorry for the long answer. Robert MacKenzie – FBR Capital Markets: Okay, and coming back to lift for a moment, where would you characterize pricing today versus say six months ago? And how much further do you think pricing can go before we see…

Pricing just moved, as I tried to – pricing just moved a few weeks ago, actually two weeks ago in North America, at least for us. Our competitors will do what they feel is right; move for us across the board. And best I can recall, this is really the first time we do this. I’d have to go back to the times prior to 2008 to remember events like this. I’m just categorizing [inaudible]. So that particular pricing will – should – will take effect in our business and that’s why our P&L I would say in Q4, if I was to guess, about six months, but we have to roll through the business because we do have a backlog. So where is pricing now versus after that pricing increase? I don’t think it’s at the peak, we still have some room to go. Robert MacKenzie – FBR Capital Markets: Okay, and then if I may; one final follow up, more forward looking, Bernard. Since we’re really seeing the first real boom in liquids drilling in the U.S. since probably the ;70s, how do you think about the ultimate potential and how big this product line can ultimately become once again with huge focus emerging on liquids and gas becoming more marginalized?

I wish it was the only product line we had, which is a silly wish if you think about it because that sort of summarizes our [inaudible]. The product line in which was typically viewed as one where we’re dominate, but you know, in an application which has secular growth based on accelerating decline rates, but other than that, a product that’s very well established and mature, it’s now become a very young product line in many respects in terms of growth prospects. So it will become our largest, probably our largest product line of all. It is challenged by the combination of directional formation evaluation on the one hand and MPD on the other, which are grouped in drilling services. So I don’t know. I don’t know which one will end up being the largest one. But between those two you will have, without a doubt, our two dominate product lines at Weatherford. And I would also say that when it comes to the oily shales, whether hybrid or whether pure oil shales, they actually work on the same fields, obviously. Robert MacKenzie – FBR Capital Markets: Right, great. Thank you.

Our next question comes from the line of Kurt Hallead with RBC Capital Markets. Kurt Hallead – RBC Capital Markets: Good morning.

Good morning, Kurt. Kurt Hallead – RBC Capital Markets: Bernard, as you kind of look out and you – when you look at the international opportunities, and I think you said this in different discussions in varying forms, that revenue growth has never been the issue for Weatherford, right? You guys have opportunities to penetrate a number of different markets and you’ve taken advantage of those opportunities on a number of different fronts. The challenge has been taking that revenue and dropping it down through the – through to the bottom line. And when you look at the opportunities that lay out in front of you internationally, where do you stand on your confidence level and your conviction on the ability to execute and to drive that revenue incrementally more so than you’ve been able to do over the last couple of years to the bottom line?

Well, aside from being more careful on and around saying things on top of the world given the geo-political events that can take you by surprise, we feel that we have good operating maturity on and around places like Latin America, on and around places like the Gulf Region, on and around places like Russia, on and around places like Asia. So Latin America, Asia, Gulf Region and Russia would be places where we feel we have the ability to harvest in a manner where we yield margin and return, not just blunt growth. Now, I excluded North Africa for no other reason than the geo-political issues that I mentioned earlier on. Otherwise it would be on that list. Kurt Hallead – RBC Capital Markets: Okay. And with the respect to Russia, you did mention in your press release here that their increasing costs had an impact on the quarter. What’s your expectation for cost increases, not just in Russia, but across your businesses in general because we’ve continued to hear that labor is still tight and some changes on raw materials.

Raw materials is not a big issue yet. Fuel is an issue. Labor is only an issue in some places. The problem in Russia is purely one of timing, Kurt. Unfortunately, you know, fuel is your highest consumption in the winter season, predictably, thinking about cold weather. And pricing is moving in Russia in the second half of the year, contractually. So you actually got caught simply in timing, which is your pricing is coming, it’s already agreed upon, at least in our case. But unfortunately you have to face with a spike in fuel costs, which is again the primary ratio this winter, at a time when the level of consumptions are always higher because of obviously weather-related issues. It’s cold, that’s it. So I suspect that come the middle of the year and beyond pricing is coming to the rescue, which is appropriate to cover that. Kurt Hallead – RBC Capital Markets: Okay. And then with respect to the Columbian tax situation as you mentioned, it’s something that gets paid out over a four-year period. And I believe it gets paid out twice a year. So they’re expecting another impact in the third quarter I guess?

No, no, no. We pre-booked it. We pre-booked it. This is the full four-year amount. Kurt Hallead – RBC Capital Markets: Okay. Okay.

It’s pre-booked. Now, it was done because it was deemed profitable to do it that way. I have no other opinion on it. But the amount, which is to be paid off over four years has been entirely booked this quarter and that’s it. So you won’t hear about this anymore until such time in which the Columbian government decides to do something different in a few years. Kurt Hallead – RBC Capital Markets: Okay. And then lastly on capital efficiency, I think you referenced – I couldn’t – my mind wasn’t working as fast as you were speaking. But – so capital efficiency will be funded out of free cash flow. I think in some of your prior presentations you referenced that over the last three or four years your capital efficiency had been too high. So from a – if you look at CapEx as a percent of revenue then, what – what are you looking at for 2011?

Yeah, we operated for – if you look at the year 2010, we operated in two different phases. A phase in 10 or 15% of revenues, that would be CapEx, and a phase where we move regular CapEx up to 20%, or even 25% of revenue. And what I have said and what I will say today is that CapEx will go back to its prior range, which is between 10 to 15% revenues, depending on – the word actually settles depends on purely on the quantity of business and the quality of the business, and the expected returns. That will save between 10 and 15%. We’re back to the former phase, not the latter phase. Okay? Kurt Hallead – RBC Capital Markets: Thank you so much, I appreciate it.

Your next question comes from Mike Urban, with Deutsche Bank. Michael Urban – Deutsche Bank Securities: Thanks, good morning. I wanted to talk a little bit about the visibility that you have into your business and completely recognizing that this is just an extraordinary quarter in a number of ways, and most of them not good. But you adjusted your guidance not too long ago, within just the last few weeks, and it seems like a few things snuck up on you here. And we’ve seen that a little bit in the past. Is there anything that you can or are doing organizationally to try to improve that visibility internally into your business and help you think about planning in a more efficient way?

That’s a very long – that’s a question that deserves a very long answer. The short answer would be yes. We are taking measure in order to provide, let’s just say guidance which is more reliable as opposed having guidance for sometimes is too optimistic or perhaps to be construed as being well intentioned but at the end of the day it doesn’t help. Now, the organizational detail, I’d rather not describe them on a conference call. But the answer is definitely yes, we’re taking measures. So time will tell. Michael Urban – Deutsche Bank Securities: Okay. And then I guess, in some ways, related to that, in terms of – I guess this is a little bit of a follow-up to I think what Kirk was getting at. You guys, you know, your actual earnings a couple of years back, three years back maybe were around $2. You’ve made a number of investments since then, and acquisitions since then, so presumably you think the earnings power is higher ultimately than that. You talked about organizational and operational maturity, and really most regions around the world, I mean, what are the impediments or what are the steps you need to take to recognize that and how much of that is a Weatherford process versus the market coming your way?

[Inaudible] – all your problems here. Michael, in order to answer that question effectively, I would simply say it’s a function of time. So the question is whether one just watches it and sees it unfold, or one sort of decides to believe that it is something which is on the way. It is truly a function of time. I realize the past two years haven’t been a lot of fun in terms of predictability of results, or even of from the events. I think we know the quality of the operations that we have at this point in time, and what their ability to deliver is. So let’s – I would just suggest that we wait and see how – see what the results are. Mike Urban – Deutsche Bank Securities: So that suggest that, as were in the market to progress as the market is going to progress, in which of course you can’t control then you would get – do you think you would get to where you would need to be at – it’s just that because of some of the specific investments, whatever capital that you employed, it’s depressing your results relative to [inaudible] right now, but ultimately you would get to where you would need to be, or are there things that you need to do to get there?

I don’t think we need to do anything right now of any sort of great significance in terms of unusual things. In order to be able to deliver, we need to deliver. I don’t – it’s purely the passing of time. Michael Urban – Deutsche Bank Securities: Okay, very helpful, thank you.

Your next question comes from Ole Slorer, with Morgan Stanley. Ole Slorer – Morgan Stanely: I thank you very much. Sorry Bernard, I had to drop off for a little while. So I apologize if this has been asked all ready. But, so in 2005, 6, 7, 8, your – or at least 2006, 7 and 8, your average margin across the board, the different mixes was about 21%, or something like that. So if you call that a sort of a mid cycle performance level for historically at least, anything in your business that is dilutive to that type of performance? Do you see things normalizing? Have you changed your business mix? Are you more into IP or project management, so there might be past-due revenues or did you see any reason why this shouldn’t be kind of a new level once you start of sort of hitting your stride?

No, as a – no, as ill-timed as it may seem, I would probably make a case that it might actually be the other way around. In other words, it ought to be higher, and not being a [inaudible], it’s purely optimistic. But certainly, I do not see any case for it to be lower. Even, given our ability to hit our strides. Ole Slorer – Morgan Stanely: Anything in – let’s say if there is no change in pricing from the current leading edge, not the sort of, I think when there are competitors that reported this morning called a loss of the recent project awards, nonsense pricing. So, hopefully the pricing is changed. So based on what you’re seeing at the moment, where you’re bidding, where you’re considering the terms – you’re committing capacity erasing CapEx. If this pricing holds the way you’re currently – what you currently see based on your CapEx increase, can you get your operations to generate that type of a margin without anything changing out of that absorption?

I think again, it’s better to do it rather than sort of describe the fact that you can do it. But I would say the answer is yes. I would also add that we have to take away from those large projects, and never mind where, and whom, and how. We stayed away from large projects. We’ve been remarkably absence from many press releases on things like that. On anything. If there’s any that came out on a large project, which we’re not outputting [inaudible] it would be typically the client. You have to assume that it was something where we had minimally decent margin and redundancies, otherwise you will just see us not being there, period. Ole Slorer – Morgan Stanely: What will be the geographic region or maybe a product line that will lag in this recovery as you sort of look the year? Is it Mexico and capacity committed there or can you bring that in to – back into Texas, or is it Russia where you have taken on the big bets?

No, I think Mexico will lag, that’s quite clear. But simply because it’s – I think it should expect our markets to do a lot more, some, but not a lot more until the Presidential election is done and so forth. So it takes you until the middle of next year for things to start to kick off. But that market does need to get active so – but I suspect you could say that. Although again, it will not be declining market, it will be inclining, increasing market just not by high rates. So it would lag. We see obviously North Africa will lag, that’s obvious, directly or indirectly, because of the fear factor. And then I think when you look around, the Caspian field will lag simply because of delays; delays in decision makings on big projects, very lumpy. But that’s it, Ole. I think the – I think Asia-Pacific, the Gulf countries, you’re very familiar with the three plays there, three major players; Saudi, Iraq and Kuwait, and Russia, which I think is an interesting – very interesting play. And then I think though the key countries in Latin America, which you really have three as in Brazil, Columbia, and Argentina; Argentina being very promising in terms of market primarily because of the unregulated gas segment on and around the shales there. They will drive, I think without a lag – the market, as the international market rises to take the – to take the place of North America as the main source of earnings and cash flow and so forth. Ole Slorer – Morgan Stanely: So thinking about your margin progression relative to your peers, two of which have already reported, what is your exposure to the lagging kind of regions relative – so what do Mexico, North America, and Caspian represent, let’s say after your current revenue run rate. I presume it’s I don’t know, 10-12% or something like that?

Yeah, without doing a mental computation, probably so. I’ll have to pause for a minute to think about. Mexico remains sizable. North Africa is probably be the most sizable, no question. That’s just true, it’s in relative terms of course. Caspian, I don’t think particularly, I just mentioned this because it happens I think they are particularly more exposed than the others. Yes. I would say that perhaps that you can say that we have a slightly higher exposure to those two lagging markets, but I don’t think that’s a big percentage of our ownership. I don’t think that moves the needle really, Ole. Ole Slorer – Morgan Stanely: So given that you know, you both position, think of all the bids a few years ago they were developed in Canada, full land, by luck or whatever, that happens at – seems to be the area where the biggest volume of work is coming down the pike, whether its North America oil or coming in Iraq or Russia. So can you just explain a little bit more why you’re not more bullish?

In general, or just –or more in particular on a particular market. Ole Slorer – Morgan Stanely: I’m just thinking, why isn’t the industry more optimistic at the moment in terms of taking its spots in pricing related to market share? I mean, two years ago people fell over themselves to grab a foothold in Mexico. A year ago it was kind of a disaster bidding in Iraq, and at this point, I mean, why isn’t – do you get a sense of industry sort of finally waking up and realizing that it’s not necessarily tumultus to win every bid?

May I suggest something? I’m probably not the right person to ask this question to. Although, I have this opinion on it, which I will keep for myself. You should ask someone who’s had a good quarter whether this is a time to become more aggressive. When I have a good quarter, maybe you can ask me that question, I’ll tell you what I think. Ole Slorer – Morgan Stanely: Okay, I hope to ask you this quarter, this question after the next quarter, Bernard.

That makes the two of us. That’s makes two of us. Ole Slorer – Morgan Stanely: Thank you.

You’re welcome.

Your next question comes from Stephen Gengaro, with Jefferies & Company. Stephen Gengaro – Jefferies: Thanks, good morning, guys.

Good morning, Steve.

Two quick ones. The first, as we think about the balance sheet, I was surprised by the drop in cash. Can you address that?

Andy will say something about it, but I will tell you it is very typical of this quarter of the year. It always falls that way, that’s why we talk about the full year. But having – but having said this, Andy will give you some more granularity.

Yeah, I think we walked through it fairly, I think in the notes, Stephen, where if you look at the net income on a GAAP basis of around $60 million with 277 of D&A, it puts you at about 337. And the gross CapEx was 356 million and we had 365 of growth in working capital. We also had one of the major items in terms of mismatch between cash payments and book expense, with the timing of the cash interest payments on our debt, which we had heavy cash interest payments to where bonds are timed in Q1 and Q3 and lower amounts in Q2 and Q4. So that was an additional, I think it was $64 million of cash that went out.

And also, the comment, you had the reminder when the full year is counted, very much like the prior year, we expect the growth to be a financed internally, entirely by internally by generated cash, a CapEx in the working capital. I think that’s a reasonable, a very reasonable expectation for you to have and for us to carry on. Stephen Gengaro – Jefferies: With CapEx, free cash flow neutral at least in 2011?

Yes, that’s the expectation at this point. Stephen Gengaro – Jefferies: Okay, thanks. And then my follow up was, as I sort of think about your revised guidance and then the quarterly results and kind of what may be – what maybe March might have looked like and kind of the – as we look into the next couple of quarters, can you sort of frame for us sort of what surprised you. I would assume kind of in March, given the timing of the guidance and how that should impact us looking at the next quarter?

Andy, do you want to say something?

Yeah, obviously March results were weaker than we expected. It wasn’t necessarily isolated to any one region and it wasn’t isolated just to operations but also in some of the below-the-line items. So in terms of what we’ve done of looking through and thinking about the guidance that we would feel comfortable providing to the street, it’s obviously the fields provided their forecast for Q2 after looking at their Q1 results. And so our estimates and our guidance for you is based on that field forecast. Stephen Gengaro – Jefferies: So it wasn’t – it was as much – there was some below-the-line stuff too, it wasn’t just operational that was the variance versus the expectation?

I think it would be, Stephen, that would be substantially correct, very substantially correct. Stephen Gengaro – Jefferies: That’s helpful, thank you, gentlemen.

Thank you.

Your next question comes from Geoffrey Kieburtz, with Weeden & Co. Geoffrey Kieburtz – Weeden & Co.: Thanks. Bernard, I’d like to go back to something that you were talking about a little bit earlier, just to clarify here. You have characterized some of the disappointments we’ve seen in the international markets as idiosyncratic in the past. We continue to see some of those disappointments but you also talked earlier about some changes you’d made. I guess to sort of summarize, related to how you formulate your guidance. I guess it’s a two-part question. Do you continue to believe that the disappointments you’ve seen in the international market are in fact just idiosyncratic or is there something larger going on? And is that disappointment really in the market themselves or in your guidance development?

I think without a doubt, our guidance. I have to say our guidance wasn’t good. I mean why is wasn’t good is an interesting question and probably various reasons, partly might be that I’m simply to optimistic. This has happened in my years and you’ve known me for a long time so you recognize that as being true. With respect to the idiosyncratic comment, well, I would stick by it actually. How would you call the event on and around the half a dozen countries in the Middle East, what would you call them? Geoffrey Kieburtz – Weeden & Co.: No, I hear you. Particularly this quarter, it’s easy, it’s very evident to call these events idiosyncratic and I get that. But when we look at Latin America for example, we don’t have those issues.

No, we do not. We do not. And that, absent all the other events, you have just seen a region which didn’t do that great in Q1, so what. Maybe it does better in Q2. That’s sort of response. In the aggregate, it was not, it didn’t. The stars didn’t align well at all. So I think the conclusion is that if – I think the guidance is – has been overly – how should we say, it was unreliable, you can blame me for it and just assume that whatever needs to happen for guidance to be tighter, has happened and will happen. Geoffrey Kieburtz – Weeden & Co.: Okay.

And then sort of a – and if – and without falling in the other access, which is being misleading on the negative side. Geoffrey Kieburtz – Weeden & Co.: Right.

Geoffrey Kieburtz – Weeden & Co.: Could I have one more, it’s a little bit – it’s related but it’s a stretch. You did talk earlier about your expectation for international margin realization as we go forward. Could you give some comment on North America? You’ve had high 20% margins in North America, kind of same question as you had on the international before. Do you think you get back there? Do you think you exceed that level?

We are at – we are at 20 and some, between 20 and 21% right now in North America, if my memory serves me well. The prior high was just shy of 30%. Let’s say we have 900 basis points between where we are today and the prior high. Depending on whether events in the world change things, I’m referring to G&P and things like that, I would be disappointed if we did not cross our prior high in North America. Now, that’s just a personal thing. So let’s see if it happens. But that actually, I have said this before in different – in different forums, that will be our expectations here. Geoffrey Kieburtz – Weeden & Co.: Great, thank you very much.

Thank you very much and I think that’s all. I have to stop now, there’s another call that started on the hour, that’s why we can’t go on. Thank you very much for your attendance. Operator you can stop the call.

This does conclude today’s conference call, thank you for participating. You may now disconnect.