Good morning. My name is Lori, and I will be your conference operator today. At this time, I would like to welcome everyone to the Weatherford International Second Quarter 2015 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. As a reminder, ladies and gentlemen, today's call is being recorded. Thank you. I would now like to turn your conference over to Ms. Karen David-Green, Vice President, Investor Relations and Corporate Communications. You may begin your conference.

Thank you, Lori, and good morning, everyone. With me on today's call from Geneva we have Bernard Duroc-Danner, Chairman, President and Chief Executive Officer, and Krishna Shivram, Executive Vice President and Chief Financial Officer. Before we start our comments, I'd like to remind our audience that some of today's comments may include forward-looking statements and non-GAAP financial measures. Please refer to our second quarter press release for the customary caution on forward-looking statements and a reconciliation of non-GAAP to GAAP financial measures. And now I'd like to hand over the call to Krishna. Krishna Shivram - Chief Financial Officer & Executive Vice President: Thank you, Karen, and good morning, everyone. I would like to start by commenting on our second quarter results. Loss per share before charges and credits was $0.10. Revenue of $2.39 billion for the quarter decreased 14% sequentially and 36% year-on-year. Excluding the impact of the divestitures of 2014, revenue declined 29% year-on-year. Operating income margins before R&D and corporate expenses declined 365 basis points sequentially to 4.9%. The U.S. bore the brunt of the downcycle, coupled with the seasonal breakup in Canada, while international operations continued to be resilient despite weakening fundamentals. The land drilling rigs business stayed profitable in the face of reducing rig utilization. Let me now detail the results by reporting segment. North America revenue of $808 million reduced 30% sequentially. Operating margins deteriorated 1,061 basis points to negative 11.5%, reflecting the activity-led drop in U.S. land rig count, further aggravated by the seasonal breakup in Canada and a full quarter of pricing declines across all service and product lines, with pressure pumping suffering the most. While our cost reduction efforts were aggressive, they could not keep pace with the drop in revenue. However, they did cushion sequential decremental margins, which came in…

Your first question is from Jim Crandell from Cowen Securities. Your line is open. Jim D. Crandell - Cowen & Co. LLC: Thank you and good morning. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Good morning. Jim D. Crandell - Cowen & Co. LLC: Bernard, both you and Krishna mentioned that you're beginning to gain market share, particularly international. Can you talk about where that may be? And do you think that the gains in market share are at all a reaction to the big consolidation move in the industry? Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: I think they are widespread. It's not in one particular place. I don't think they are necessarily that correlated to the consolidation underway insofar as, in a number of instances, we don't really compete with the three or we complete with one of the three. So it's not clear that it has very much to do with that. I think it has more to do with us. Has to do with some of the technologies we put on the market. Has to do with the fact that we were not as aggressive and as focused in some of the markets in the past as we are today. I think it has more to do with us than it has to do with industry events, at least for now. And also, Jim, in the end, because we're not that large of a company, it's not big numbers, it's not dramatic, but it is happening. So it's widespread, affects a number of different markets, a number of different product lines, and I wouldn't say there's a particular theme as to who is losing the share. Krishna, do you want to add to that? Krishna Shivram - Chief Financial Officer…

Your next question comes from the line of Angie Sedita of UBS. Your line is open.

Thanks, guys. Good morning or good afternoon. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Hello.

Hi. So can we talk a little bit about Zubair? And just walk us through what's happening in the market as far as your target. My understanding is you have essentially three different physical locations and three different targets. So can you talk us through where you stand on those targets? And does the current environment in Iraq make achieving those targets any more difficult? And then where you are on how does the cash play out as far as the cash payments? Is that back-end loaded for those final targets? Krishna Shivram - Chief Financial Officer & Executive Vice President: Yes, Angie. I'd like to say that the very first mechanical completion milestone for the first two sites will be close to completion next week. By the end of the month, we expect the first site to be certified and then very early in August the second site. So it's a little bit slightly behind the previously communicated schedule, mainly because of logistical and security reasons which continue to abound in Iraq. Having said that, we're quite comfortable to say that we will hit the mechanical completion milestones within Q3 and we'll start hitting the RFC milestones at the end of Q3 going into Q4 for one of the sites. So the cash flows related to the achievement of these milestones will flow steadily back to us. And as I said in my prepared comments, we think we'll be cash flow neutral in the second half of the year for Zubair.

So does that imply that hitting the targets could fall into early 2016? Krishna Shivram - Chief Financial Officer & Executive Vice President: Well, there are three milestones: mechanical completion, ready for commissioning and performance acceptance certification. And we will hit all the milestones by the end of the year. The cash flow related to the very last milestone may slip into first quarter 2016. Despite that, we should be cash neutral during the second half operations for the year. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Not to minimize the importance of every single stage, Angie, but mechanical completion, the first stage, is really the most, I think, demanding and difficult. That's the one which is upon us in a matter of days.

Okay, okay. That's very, very helpful. And then as a follow up to Jim's question on the market share and if you think forward about the closing or potential closing of the Baker Hughes-Halliburton merger, I mean, certainly you could talk a little bit, if you would, on where you think the potential easy opportunities could be. But I think you've also stated in the past that you have some growing up to do to capitalize on other opportunities. And maybe you can talk us through on the steps you're taking up to continue that grow up process to capitalize on more than what you could easily take advantage of. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: We're quite internally focused, Angie, when it comes to getting ready to capitalize on opportunities. There is – the events in the industry, for one, that was extraordinarily interesting. Certainly from an analyst perspective, they're captivating and very, very important. We are not that involved, obviously, in the process. And we really don't spend too, too much time looking at the various sequences of events. It will be important for everybody in the industry, not only us. And so I think we'll let that unfold the way it will without speculating too much on it. We are focusing a lot on – well, it's not all about efficiency. A lot of it has to do with delayering the organization, operating with fewer people, but better people, operating in a much leaner, faster, more disciplined manner also. We're focused a lot on that. We're focused a lot on training, people development. Focused also a lot on sales and marketing and reengaging with our clients the way we used to. All these things that should make up the fabric of the company, which it has no more distractions, we have no more internal distractions. The only focus we have is simply our operations, our clients and progressing. See, it really isn't whether we can gain share from this or that particular company. The point of fact is that we try to do the best we can in the few product lines which we are in. Again, our product line is not as broad at all as some of our larger peers. We have fewer product lines. We try to do the best we can in those product lines. And there are many markets in which we are very, very under-represented. So we focus on that. And that's it. We try to do it more efficiently with a high quality of people. It's as simple as that. It's not very spectacular. It's all about having far better execution than we've ever had. That's it.

All right. Fair enough. I'll turn it over.

Your next question comes from the line of Jim Wicklund of Credit Suisse. Your line is open. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Good morning, guys. Krishna Shivram - Chief Financial Officer & Executive Vice President: Hey, Jim. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Good morning, Jim. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): I remember the third quarter of last year you were expecting to get a refund of deposit basically from Iraq. But the Southern Iraqi Oil Company in Baghdad wasn't signing much of anything. And now we understand that that process may be improving a little bit. What ever happened or what's going to happen with your stranded $250 million in Iraq? Krishna Shivram - Chief Financial Officer & Executive Vice President: Jim, you're talking about the potential claims on the cost of the variation orders on the Zubair project, right? Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Yeah, he is. Krishna Shivram - Chief Financial Officer & Executive Vice President: So, Jim, the situation is that we have commenced an arbitration proceeding against that customer and made the claims. And right now at this present moment, we have stayed the arbitration so that we can complete the project in a cooperative manner. This arbitration is just in abeyance, but will come back if we don't get a settlement offer from the Iraqis and through our client. So I think the dialogue on this will continue once we complete the milestones and deliver the project. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: The judgement, Jim, is as follows. You have three poles to this triangle: you have the operator, which is ENI, you have the ultimate reservoir owner, which is SOC, and…

Your next question is from James West of Evercore ISI. Your line is open.

Hey. Good morning, guys. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Good morning, James.

Maybe, Krishna, first for you. If I'm doing the math correctly here, you took out $500 million in costs last year. You talked about cost savings so far this year of $754 million. I believe there's now $300 million in procurement costs over this year and next year, maybe some of that's already in that $754 million. But we're looking at a cost savings number that's definitely over $1 billion, but maybe in the $1.5 billion range. Am I in the right area at this point? Krishna Shivram - Chief Financial Officer & Executive Vice President: Yeah, I think it's over $1 billion for sure. I would hesitate to say $1.5 billion, but somewhere in between those two numbers, yes.

Okay, great. And then my follow up to that, and I think you'll see what I'm trying to get at here, is how much of the cost savings of that, let's say it's a little over $1 billion, would you perceive as structural in nature versus more just cyclical cost savings due to the downturn? Krishna Shivram - Chief Financial Officer & Executive Vice President: Well, I can only give you a rough estimate.

Sure. Krishna Shivram - Chief Financial Officer & Executive Vice President: A lot it has to do with the cyclical downturn, clearly. With the drop in activity, your direct costs are just a function of that. But we've taken structural cost measures, cost-saving measures, to quite a drastic level as evidenced by the drop in the support ratio, which started last year at 59% and we are just shy of 42% right now. And we are relentlessly focusing on getting that to the 30%s now. So I think I would say probably a one-third, two-third: one-third support and two-thirds direct, would be a good mix, rule of thumb. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: James, that's a very good question you're asking. We don't have for conference calls sort of type of dialogue numbers down to a sound bite. I would have to say that it is north of $1 billion, the overall cost being taken out, I totally agree with that, cash numbers. And I also think that a third being perennial is actually I think very reasonable. I would say probably I would have used the number 40% myself. We are very obsessive about the perennial and the structural. Very, very obsessive, precisely for the same reason you're asking the question. This the quality of the numbers coming out of this company when the business improves. It's very, very important that the – and furthermore with a more efficient structural cost basis you will run the company better. Forget about the P&L being better; we'll just run it better. The de-layering, you're making the organization not as heavy, decision-making, very disciplined, very responsible, but not hiding behind layers of people I think makes a better company. We're trying to be a better company, it's as simple as that.

Absolutely makes complete sense. And if it's 40% or a third or so, significant earnings leverage as we come out of this. So thanks, Bernard. Thanks, Krishna. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Thank you.

Your next question is from Scott Gruber of Citigroup. Your line is open.

Good morning. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Good morning, Scott.

I want to continue on James' line of inquiry. I realize that you're continuing to de-layer the organization. But overall, can you give us a sense of what level of activity you're targeting in terms of sizing your U.S. organization today? I don't know if you can dimension that relative to a recount or maybe a North American revenue number overall. As you think about sizing the organization, how are you thinking about that in contrast to the market size and your opportunity set? Krishna Shivram - Chief Financial Officer & Executive Vice President: Well, right now, Scott, we think activity levels are going to kind of flatten, maybe slightly tick upwards, but not materially for the rest of the year. We still have 1,000 more people that we're targeting, mainly in the U.S., to take out. And we mentioned that in our prepared comments. And again, the focus is going to be more on the support side. So at this point, I think that's pretty much it. I think our organization is kind of well-sized now going forward with just the 1,000 more to go really. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: There's the support function, which support is broad and it covers a lot of activities, that we're designing, not only for North America but company-wide. It's designed to be the same at the present level of activity and also some level of activity that's higher than that. That's the whole point. So that we're hoping to have the company operate with a level of activity which would be – I can't give you the exact numbers because we don't want to do anything irresponsible, but quite a few percentage points, high levels of activity with the same support structure and do it very efficiently. But in terms of scaling it to where it needs to be to help North America have more constructive numbers, we're getting there. With the other 1,000, we'll be there. We'll be at a level of cost structure where, with the present level of business, understanding that we are more land than offshore, which I think in the long run is not desirable, but in the short run actually it is not that bad because land took it on the chin. Offshore will take it on the chin now, which means that all things being equal for us in the U.S., it's likely to be a little bit smoother sailing for us going forward, cost structure and also market exposure.

Got it. And then unrelated follow-up. Bernard, you mentioned no need to expand the product offering. However, with the DOJ potentially pushing back on Halliburton's bid to buy Baker, would you consider issuing $8 billion, $10 billion of equity, whatever's needed, buying a large collection of assets, establishing yourself as the number-three competitor in drilling and completion offshore and deleveraging your balance sheet all at the same time? Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: I think that if the capital market valuation of oilfield services were very different, that might be a conversation we would have. Today, I think the cost of capital we have extremely high. This is first answer, meaning that it feels prohibitively expensive. The second answer is that we really don't know what will happen after the Halliburton-Baker combination there is one set of assets. We don't have much of an opinion today on the level of interest we might have or not. I think a lot of people are interested in it. So the answer is that we are very content with what we have. We're not obsessive at all about what's going on with those two companies. Many other people are. I think our time is better used focusing on what we have than on daydreaming about what we could be adding or not. Very difficult for us. Even if we did daydream, very difficult for us.

Sounds like a sound strategy. Thanks. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Thanks.

Your next question comes from the line of Brad Handler of Jefferies. Your line is open.

Thanks. Good morning. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Good morning, Brad.

Morning. I guess I'll play market watcher a little bit and just sort of respond to what's happening during the course of the call, if you'll allow me. If we try to put together the thread of questions with respect to the cost savings and building through realizing those cost savings in the second half of the year relative to your comments around a very stable international outlook and an improving North America outlook, is it hard to craft a view that the fourth quarter would be breakeven or even slightly positive EPS? Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Krishna, you can answer it. For my own part, I'd say we think it is possible. I think we'd rather answer that question in October. But, Krishna, you want to give a... Krishna Shivram - Chief Financial Officer & Executive Vice President: Yeah, I think, Brad, in this market environment, it's a bit hazardous to start testing that early. It's in the realm of possibility, yes.

Okay, fair enough. I guess an unrelated follow-up that's a lot more granular; can you just speak a little bit to the project delays that you cited in Sub-Saharan Africa? How pernicious is that and maybe how widespread is it? How much taken by surprise are you? Just maybe a little bit more color around that comment would be helpful. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: You probably know as much as we do about it, Brad. We're not surprised in the least when pricing of oil goes from $110 to $50. The first business to go to pot is land across the board. Land is much easier to stop, land is much easier to basically cancel. Offshore and deepwater is much harder to cancel in short order. Now, first thing that you do postpone is anything that's not actually physically taking place. So anything that's on the drawing board gets adjourned. That happens. Now what is already physically taking place, you can't just pull the plug. In simple terms, anything that's offshore, and let alone deepwater, you just wait until the first opportunity where you can pull the plug. And that inevitably happens if the price of oil doesn't correct, which it isn't. We are at that point today. And so I think you see a rash of cancellation, delays and so forth all over West Africa and in all the hot spots of activity. We are not in the least surprised. I think for us it simply means that the prognosis, which was so bullish for us in SSA, have gone from very bullish to subdued. But they're not bad, simply because we didn't have a large play at all in that geographic market. We were getting it by recovering market shares we had lost and gaining new market shares based on technology, while the numbers won't be what we were hoping for them to be. But we will not, at the same time, experience great reversal of economics simply because it was prospective as opposed to something that we have already in our P&L. So to summarize, it is very material. It will be increasingly material as time goes on and the prospect of having another year in 2016 of very, very low oil pricing, you will see deepwater and anything offshore basically weaken. It's absolutely normal. Land, paradoxically, will not weaken as much because it already has happened. Which is, again, if you look at the chronology of events in our industry, this is how it unfolds. So we're not surprised in the least. And, yes, it's disappointing for us. But I don't think I would characterize it as painful in terms of SSA. It's just something that will happen later and not something that we had our P&L to begin with. We were prospectively hoping to have it in our P&L. Okay?

Understood. Thank you.

Your next question comes from the line of Ken Sill of Seaport Global. Your line is open.

Thank you. Good afternoon to you people in the nice environments of Switzerland versus Houston, which is up to 100. Krishna Shivram - Chief Financial Officer & Executive Vice President: Good afternoon. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Hi, Ken.

I wanted to talk about, is being heavier on the land side good or bad in the current price environment? Obviously in the current price environment, people are having to rethink where the economics are. And we've been in a market where the deepwater has been the target of more spending and more spending and more spending. But with the ability of North America to grow production and what's clearly rising spending in the Middle East, I guess long-term strategically, do you think being onshore is actually a negative going forward given how quickly onshore can respond to price changes? Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Ken, I think that neither one. I think that we obviously are smaller than our larger peers, but we're not small. That's an overstatement. I wouldn't say that. And given the breadth of what we have, we say we're content with what we have. Given the breadth of what we have, we really have a place, both on land and offshore in deepwater. So for us really we need to be represented in both. I wouldn't make an exclusive bet at this point in time, though, on one or the other. I would not recommend that. I wouldn't just try one because you're likely to pick the wrong one. And so the answer is they have to be much more balanced because the prognosis – you can make a case for the prognosis being equally – in a better environment of course, equally encouraging for land than it is for deepwater. And today nothing is encouraging. But eventually, the point being eventually, I think some of the luster that deepwater plays have had may as with the turn of the market, they may come back, but they won't be exclusive. They'll be shared by some of the land plays. That's as much as I can say. But for us really we need to be involved tactically today, tactically today, because the land people took it on the chin first. That would be people like us. It is true that in the land markets, you're probably tactically a little better off today than the offshore market. But it's just a question of the misery spreading. That's all.

Okay. That's a good answer. It makes a lot of sense. And then one final question. I was a little bit surprised by the impairment charge in pressure pumping. Clearly a lot of assets stacked, but you guys are the first ones to announce something like that. Could you kind of go through the process and how the impairment was determined relative to your asset base? Krishna Shivram - Chief Financial Officer & Executive Vice President: Well, Ken, it was purely determined from an accounting standpoint. We had more than half our fleet stacked. And when such an event happens, we do test our assets periodically for impairment and there was a case to do that. And when we did perform the impairment test, we found that barring some extraordinary assumptions, we would not be able to support the carrying book value of the asset. So we decided to take an impairment charge. We think that's quite a responsible way to do it given the market conditions in North America. The impairment charge was purely related to the U.S. pressure pumping assets. It was just in one country. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: I think the book value now is very reasonable of our pressure pumping assets. Krishna Shivram - Chief Financial Officer & Executive Vice President: Yes. They're quite... Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Quite low. Krishna Shivram - Chief Financial Officer & Executive Vice President: ...a lot more realistic. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Quite low. Bernard J. Duroc-Danner - Chairman, President & Chief Executive Officer: Thank you, Ken. With that, I think we will close the call and thank you for your time because I think the hour is over and there's another company call which is scheduled now, if I'm not mistaken. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.