My name is Stephanie, and I will be your conference facilitator. At this time, I would like to welcome everyone to the Baker Hughes First Quarter 2012 Earnings Conference Call. [Operator Instructions] I will now turn the conference over to Mr. Adam Anderson, Vice President of Investor Relations. Sir, you may proceed.

Thank you, Stephanie. Good morning, everyone. Welcome to the Baker Hughes First Quarter 2012 Earnings Conference Call. Here with me today are Martin Craighead, President and CEO; and Peter Ragauss, Senior Vice President and Chief Financial Officer. Following management's comments, we will open the lines for your questions. Reconciliation of operating profits and non-GAAP measures to GAAP results for historic period can be found on our website at www.bakerhughes.com in the Investor Relations section under Financial Information. Finally, I must caution you that any company outlooks discussed this morning are subject to various risk factors. We'll try to highlight these risk factors as we make these forward-looking statements. However, the format of the call prevents a more thorough discussion of these risk factors. For a full discussion of these risk factors, please refer to our annual report 10-K, 10-Q, and in particular, the forward-looking disclosure in this morning's news release. With that, I'll conclude our discussion of the administrative detail and turn the call over to Martin Craighead. Martin?

Thank you, Adam, and good morning, everyone. I'd like to briefly highlight 3 key points that summarize the quarter. First, our performance in the international markets was strong when compared to the typical seasonality of Q1. This is in line with our margin improvement objectives. Second, our North America margins were adversely impacted by 3 issues related to Pressure Pumping. The market shift from gas to oil, pricing decline, as capacity is essentially balanced with demand and the internal execution issues we've previously disclosed. So that brings me to the final summary point. Our other product lines in North America performed well, especially in Drilling Services, Upstream Chemicals, Artificial Lift and Completions. I'll expand on both the Pressure Pumping execution recovery and the success of our other product lines after Peter details the financials. Peter?

Thanks, Martin. Good morning. This morning, we reported net income for the first quarter of $379 million or $0.86 per share. Revenue for the first quarter was $5.36 billion, up 18% or $830 million from last year and down 0.5% or $32 million sequentially. Adjusted EBITDA for the first quarter was $990 million, up 4% from last year and down 16% sequentially. To help in your understanding of the moving pieces, I'll bridge Q1 last year EPS to this quarter's EPS. EPS a year ago was $0.87 per share, add $0.10 for international oilfield operations, subtract $0.08 for North America oilfield operations. Add a $0.01 for lower income taxes and subtract $0.04 for higher corporate costs. That brings us to $0.86 per share. Bridging the sequential quarters, GAAP EPS for last quarter was $0.72 per share, add $0.50 for the noncash impairment primarily related to trade names. This brings us to the adjusted $1.22 per share that we discussed in the fourth quarter. In the current quarter, subtract $0.18 for North America oilfield operations, subtract $0.08 for international oilfield operations, subtract $0.02 for Industrial Services, subtract $0.04 for higher corporate costs, partially due to approximately $10 million of noncash amortization we highlighted last quarter, subtract $0.04 for a higher overall tax rate. That brings us to $0.86 per share. During the quarter, we reclassified the financial results of our Reservoir Development Services Group, referred to as RDS, under oilfield operations in North America and international, rather than under our Industrial Services segment as in previous periods. We're making this reclassification because RDS supports our global oilfield operations, especially integrated operations. And this will enable more consistent reporting to better reflect their revenues and costs and geographic segments, where the work is performed. In Table 4 of our earnings release, we…

Thanks, Peter. Our international business continues to grow, and I would categorize pricing overall as stable. Therefore, to further expand margins requires differentiating technology, a lean supply chain and a laser focus on satisfying our customers. For example, this quarter, I'm particularly pleased with our Europe, Africa, Russia Caspian region. In Africa, we delivered excellent results during the quarter would strong performance in Nigeria, Mozambique and Angola, especially in Deepwater drilling, where we see continued expansion of our high-end directional drilling in LWD services. In Russia, we've built upon our leading ESP technology, the reliant pump, and our strong local reputation to service well-management programs to secure a new ESP contract for 1,000 wells. In the U.K. geomarket, our wireline product line leveraged a long history of execution with our high pressure, high-temperature technology posting record revenue in the quarter and also winning additional contracts to secure our market-leading share of this sector going forward. We're also pleased to report that our Norway geomarket has been awarded another major intelligent well system for a major customer in one of Norway's most prolific fields. This one-trip, four-zone, remotely operated hydraulic system replaces the need to intervene and stimulate with coiled tubing. Our intelligent well technology allows the customer to individually or collectively stimulate zones to enhance production. While I'm talking about the Europe, Africa, Russia Caspian region, let me remind you that it has always been our intent to leverage our international geomarket structure to expand our Pressure Pumping business into international markets. The most recent example of our ability to capture that upside is an award from Maersk to construct a new offshore stimulation vessel for the North Sea. This vessel, the Blue Orca, to be commissioned in the summer of 2013 will be the eighth stimulation vessel in our…

Thank you, Martin. At this point, I'll ask Stephanie to open the line for your questions. [Operator Instructions] Stephanie, can we have the first question, please?

[Operator Instructions] Your first question comes from the line of Bill Herbert with Simmons & Company. William A. Herbert - Simmons & Company International, Research Division: Peter and Martin, just a little bit of clarification here with regard to the magnitude of the North American margin compression in the second quarter. Two influences here. We've got breakup and you have an above-average presence in Canada, coupled with continued, I would imagine, margin headwinds in the U.S. onshore. If you take a -- if you presume that your Canadian revenues are going to suffer the typical seasonal contraction of about 50% and you apply a 50% detrimental on that, plus you make some assumption with regard to continued margin contraction on the U.S. revenue base, do you get to something, which is approaching, call it $180 million, $200 million in EBIT contraction quarter-on-quarter? Or is that too much?

That sounds pretty high, Bill. We wouldn't be thinking that much. We're not going to give you specific guidance on North America margins in terms of basis points this time because we do have -- there is a lot of volatility. And I think the volatility's almost getting harder and harder to predict. So -- but that sounds too high. William A. Herbert - Simmons & Company International, Research Division: Where do you think I'm harsh there? On the Canadian revenue contraction, the Canadian detrimentals or the U.S. margin contraction?

Probably the U.S. margin contraction. William A. Herbert - Simmons & Company International, Research Division: Okay. So you're probably not going to lose an additional couple of hundred basis points quarter-on-quarter is what you're saying? For U.S. onshore or U.S. in general?

Well, I'm not going to -- again, I'm not going to give you a range. But you've been pushing us on the high side here. So I think it's... William A. Herbert - Simmons & Company International, Research Division: Okay, fine. So it's not going to be that bad. That's good news. And then with regard to international, terrific showing in ECA in Q1. We're down quarter-on-quarter. Does the second quarter look more like Q4? Or how should we think about margins for ECA in the second quarter?

Yes, it's about right. I think it will -- we talked about them dropping back a little bit. And if they drop back a little bit, that's what they'll look like. William A. Herbert - Simmons & Company International, Research Division: So is it unreasonable to assume that international margins, as a whole, on the second quarter are going to be up in the vicinity of 100 to 200 basis points?

Roughly, yes, somewhere in there. William A. Herbert - Simmons & Company International, Research Division: Okay. That's all I have. And then, Mart, one last sort of broader question here for you, Martin. I think you've been very candid and very transparent with regard to the challenges you confront in North America. Good news to hear that you guys are -- have a decent amount of conviction with regard to rectifying some of these issues or a number of these issues by the second half of this year. Do you think that with the Canadian recovery in the third quarter and ongoing Gulf of Mexico improvement that we have a chance of North America margin stabilization in the second half of this year?

I'd say that's absolutely. And it's not just that component. As I highlighted in the comments, Bill, the Gulf of Mexico is coming back well. Now, it's not, obviously, as significant of a EPS contributor. But it's not been -- the contributor it's been in pre-moratorium. And it's now coming back strongly. So that, in addition, will help the second half of the year. William A. Herbert - Simmons & Company International, Research Division: Okay. And would you expect, fingers crossed, that actual margins could be higher versus the second quarter?

Yes. And we don't depend on crossed fingers. I'd say that -- pretty good. I have high confidence in that.

Your next question comes from the line of David Anderson with JPMorgan. John David Anderson - JP Morgan Chase & Co, Research Division: Let me ask you the margin question a little differently. On the U.S. land market, you clearly put facing 3 strong headwinds in between pricing, infrastructure issues and cost. I was wondering if you could just kind of help us, get a sense as to how all 3 of these contributed to your margin degradation from kind of the 22% number you posted in 3Q to the 14% this quarter? And then kind of more importantly, how do all 3 of those headwinds play out over the next 4 quarters? I recognize it's hard to kind of tell. But if you could just kind of help us understand how you're thinking about how all 3 of those issues kind of impact you over the next 4 quarters would be really helpful.

All right. Hey, David, let me see if I understand your question. So you want to -- in terms of the biggest contributors to the challenge before we talk about improving them, it would probably have been the utilization on 2 fronts: the personnel side and the personnel costs, which as I said, we took, I think pretty swift action and have addressed that. Then the utilization would be of the hardware, would be the second follow-up in terms of that margin compression as we have the dislocation. And I think we struggled maybe a bit more with moving the fleets not from a competency perspective as much as just didn't have the infrastructure in place to move them to places. And then following close on the heels of that would be the supply chain challenges in the myriad of issues there, whether it's trucking, whether it's access to material, modeling and so forth. So to flip it around now, talk about how this rolls out. And I'm glad you asked the question because this isn't only a 2012 story. I mean there's improvement to go beyond into '13, and we're already looking at what those actions are. We've made very good progress, as I said, on the people front. We've made, I think, excellent progress in the securing of the materials, whether it's sand. We have no concerns about access to guar, even though the price is terrific. But we won't be disrupting be operations. In terms of facility, as I've mentioned, 2 new facilities in key oil basins. So that the movements of the fleets are landing in places where the workforce is ready and the roofline is present. So -- and then, some of the other cost issues around transportation. David, before we began this quarter, after…

Well, I think our issues are bottoming here. Now, I think, as Peter was answering Bill's question earlier, we do have -- while we may have a bias towards pricing improvement in the Eastern hemisphere or international. We certainly don't see that on this particular product line in North America. So how it plays off between, I would say, our self-help issues and -- I just don't want -- I'm just not going to try to predict what's going to happen with pricing in the Pressure Pumping business for the next 3 to 4 quarters. John David Anderson - JP Morgan Chase & Co, Research Division: Understood. Now, Peter just talked about your lowering CapEx in North America. So it sounds like you're not adding any more capacity. Here -- and a lot of other players are not adding anymore capacity either. Is your sense that capacity additions in North America are cresting like soon, like in the next month or 2? And if that's the case, then how are you kind of thinking about how the market comes back into balance? Do you have any sense as to when that happens?

Yes, this is Peter. I think we've seen a lot of cuts in CapEx. And I think people have cut, and I know in our case, we're cutting as much as we can and still maintain our supply relationships. We still got some kit rolling off in Q2 and Q3 that was pre-committed, and that's about it. And I suspect many others are seeing the same sort of action. So we think it stabilizes pretty quickly from here.

Your next question comes from the line of James West with Barclays Capital.

I want to flip over to the international side for a second, if I could. Peter, in your comments, you kind of reined in, I guess, your international rig count growth forecast for this year. It sounds like your competitors, at least, the last couple of calls and conversations, of course, that we've had with them, they've become more optimistic on the international side. And maybe I'm being too nuanced here. But has there been a -- I guess what's the driver of that kind of differentiation between you guys and your competition?

Well, we expected a stronger pickup in Q1. And we just didn't get there. So to meet our original forecast is quite a stretch from now. So it's really -- we just didn't see it materialize in Q1. So we had to adjust it down by that difference.

Okay, so no change to the rest of the year?

No, no. It's still up from here.

Okay, great. And then a quick question on Latin America. I know you had some startup or some delays there that impacted the margins. What would Latin American margins have been ex those issues? I guess I'm trying to get the what should Latin America look like going forward.

Well, we gave you all the issues that drove it down 200 basis points. So ex those issues, it would have been up 200 basis points.

Your next question comes from the line of Jim Crandell with Dahlman Rose. James D. Crandell - Dahlman Rose & Company, LLC, Research Division: I want to return to Pressure Pumping here. Martin, when this -- when things began to deteriorate in the business, I recall you saying to me the fact that other competitors had long-term contracts, and you didn't meant little and that the customers would demand that they renegotiate or bring down their prices and they would be forced to. Do you still believe that to be the case?

Well, I would say that, I guess, I've altered my perspective a bit, Jim. I still believe, nevertheless, that whether you're in a spot business or in the long-term contract, the difference in pricing isn't going to be significant. But if you are a contract holder, you may get last right of refusal. But I -- so that should keep your activity and your utilization maybe a bit higher than the spot. But I would say this, I think there's too much tied to the pricing side of that in terms of, trust me, the renegotiations of contracts is pretty apparent in the market. But, like I say, you will get the last right of whether or not you want to be replaced. But to Peter's earlier point, the spot market may not be the best place to be right now. And I wouldn't necessarily try to defend that. But depending on the degree of discipline that's brought to the market on the capital side, I don't think we're looking too far away, hopefully, for rebalancing in that side of the market. James D. Crandell - Dahlman Rose & Company, LLC, Research Division: So would your strategy, Martin, going forward to try to put more of your expiring contracts here on longer-term work?

Well [ph], if the pricing was what we felt like was accretive and -- we're not taking a long-term pessimistic view here on the North American Pressure Pumping business. So I think every contract and every customer has to be evaluated on its merits. James D. Crandell - Dahlman Rose & Company, LLC, Research Division: And Martin, how did the -- how did the recent problems in Pressure Pumping affect your goal of being number 2 globally in that business? And you've also talked a little bit during the downturn, at least with me about maybe using this as an opportunity to buy an existing player. Does that make that strategy more likely or less likely, given the magnitude of the downturn here?

I don't -- it doesn't change our long-term goal of achieving that status in the business. And the Maersk award is a part of that. The second largest Pressure Pumping business in the world is Russia. And we're essentially not represented at all, so it's a huge opportunity for Baker Hughes. But on the other part of your question, in terms of consolidating the business, obviously, the BJ organization has quite a history of being able to do that, rolling up the business in the bottom of the cycles. It remains to be seen, as I just said, whether or not we're entering a protracted downturn here, it's not my feeling that, that's the case. I think we've got some pricing headwinds. I think discipline will come into the market. We still see intensity growing on some of the oil plays. So how sharp this downturn is to be -- still to be determined, Jim. And I don't want to minimize the issues we're facing in terms of stabilizing the business and standing it up properly and to go forward. So for us to digest another business, it's certainly not something we're spending much time talking about at this stage. James D. Crandell - Dahlman Rose & Company, LLC, Research Division: And then one quick question, Martin, again, with Pressure Pumping. Was the entire PBT drop or virtually the entire PBT drop quarter-to-quarter in North America Pressure Pumping related?

I'd say it's predominantly. And if I could just add a little bit more detail to that. When we say Pressure Pumping, our -- it's really around the stimulation side of that. And the cementing business continues to be very, very strong as does the share position. So I don't want there to be any conclusions drawn as to what's broader than the frac-ing business right now. James D. Crandell - Dahlman Rose & Company, LLC, Research Division: So the downturn quarter-to-quarter was predominantly frac-ing, but not entirely?

That's correct.

And don't forget Canada was a little softer than we expected. We lost -- we had a customer shut down early, and we had an early spring breakup. So that affected the quarter, too. So, it wasn't all just Pressure Pumping. I mean it affected our entire Canadian business.

Your next question comes from the line of Ole Slorer with Morgan Stanley.

Just a couple of clarifications, Martin. When you say your company-specific issues in North America are bottoming right here, did you mean the second quarter here? Or did you mean that they bottomed in the first quarter?

Ole, could you say -- ask the question again. You broke up on me.

Yes. You said that your company-specific challenges, they're bottoming right here. Did you mean right here as in the second quarter or right here as what we saw in the first quarter?

I would say we're pretty much this quarter bottoming, maybe a little hang over into -- maybe flat company issues into Q2. But then coming out, it might be a little bit better. But I think most of the -- the bottom is pretty much, we're in it right now.

So would it then be fair to say that looking at the U.S. market, the U.S. Pressure Pumping market, that the simulation market, that you'll still face a slight incremental challenge from pricing relative to what you can -- what improvements that you have put in place?

Well, that's -- you have to make an assumption on pricing for that, right?

Well, I think some of your competitors have mentioned that pricing is down, rolling down about 10% at the moment. Is that something you would concur with or...

No, I wouldn't. I'd say it's deeper than that, Ole. But that said, our feeling right now is that from our own -- based on the actions we've laid out, we've got maybe 300 to 400 basis points of improvement in our side of the business. But how that manifests itself, again, given those pricing headwinds, remains to be seen. Does that answer your question?

Yes, thank you. And on the capacity comments that you made, are you cutting back on the capacity -- did I understand it correctly that, at the moment, you have no new stimulation equipment for delivery in the fourth quarter of this year? That is all coming before that?

No, let me add some -- let me try to clarify that for you. We'll add about the same amount of capacity in Q2 as we did in Q1. Q3 will be about half of that amount. Q4, we're talking only Pressure Pumping, of course, right? On the stimulation side. So Q3 about half of what we've averaged in the first half of this year. And Q4, it's de minimis in terms of horse power.

Okay. Okay then finally, just on international pricing. And I'm fully aware that pricing on high-profile contracts are competitive regardless of where you are in the cycle. But can you give us some color on any improvement or adverse behavior that you've seen in the marketplace over the past 3 to 6 months? Is there a better tone out there? And where is it a better tone, if so, most notably? And are there any places where you're still seeing that the business or behavior is going adversely?

It's tough to generalize, but your first part of the question is correct. Outside of the high profile, highly concentrated spends, you take those off the table. I think it's, without a doubt, there's a bias towards pricing improvement. Doesn't mean there's just not some surprises and disappointments out there. But I -- we get a general feeling from both the customer side, as well as just looking at how some of these smaller bids are opening that there's a bias towards improving margins. Ole, I think, the thing to keep in mind is, as Peter highlighted in one of, I think one of the earlier questions, forecast of 11%, 12%, 8%, whatever it might be on terms of the rig count in international, Q1 to Q1, 11% to 12%, we only had a 2%. This past 12 months has been really anemic in terms of the rig count improvement international. And I think revenues have held in there pretty well. If we see anything like a double-digit increase in activity, I don't think you can -- I just don't see how you could expect anything other than some pretty nice price improvement.

Are you hiring internationally at the moment or you're keeping a flat headcount? And what would you say that your capacity utilization would be like, both with respect to people and respect to equipment?

People aren't as much of a problem as equipment. But again, it depends on where you are. In Iraq, we're hiring rapidly for the mobilization of, as I said, one rig started with Eni. The LUKOIL rig started this week. Another LUKOIL rig this Friday. So those are pretty stiff and steep ramp-ups. So a lot of hiring going on. I think in places like Asia, the headcounts are more flat. But again, on an equipment side, Latin America and Eastern hemisphere, particularly on the D&E side, Ole, it's pretty tight. I mean, you could almost say sold out.

Sold out? Just finally on Iraq. I mean it's been disappointing in the way that the industry has kind of added capacity a little bit ahead of where the businesses materialized. And this translated into some pretty disappointing financial performances across the board pretty much by everybody. How would you characterize the situation in Iraq right now and the sensibility around how people are bidding?

We were one of the early critics of, I think, the strategies that were put in place there. And we make no apologize -- apologies for being a critic of it because it was -- it turned out not to be the opportunity that it could have been as a result. That all said, I recently was -- came back from there. And I can tell you the environment, I think, is optimistic. The customer in the 2 years since I was there last is far down the road of improving their own capabilities. It looks like a completely different landscape there than it was 2 years ago. We were slow on purpose, given the pricing that you referenced as being well below it should have been to pick up these big integrated projects. But the customer there wanted us in this business. We wanted to participate. I feel very good about the IO projects we have with Eni and LUKOIL in terms of, not only the financial opportunity, but just the risk profile. But more importantly, Ole, early on, we said that this was a production area. This was not going to be a big, big drilling business. We have leading wireline position. We have the leading ESP position. We have the leading Upstream Chemicals business. And those work at some pretty nice margins. Now, we've got these mobilizations going on. But our Iraq business, we feel very good about the way that the guys have executed it.

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

A follow-up on the international markets, Martin. Your peers obviously said they're seeing positive pricing sentiment. And you just mentioned that if we see double-digit growth in the rig count later this year that we certainly will start to see price as well. Do you believe that the pricing we will still be focused on small projects? Or could we see a change of behavior or even modest pricing upside on the larger projects, which has been obviously highly competitive?

Yes, they have been highly competitive, Angie. I hope that we'll see it on some of the bigger projects. And it's my sense that we will, simply because I think there's a high-level of frustration amongst the entire service industry. As I said in my comments, the importance -- the important role we play, in terms of making this all happen in the international arena for our customers to be successful and yet, our returns are -- have been lagging dramatically. So just my expectation that greater discipline will come to the big projects as well.

Okay. Hopefully, that bears out. And then, you obviously saw some very strong margins in ECA. And how much of that would be attributable to -- or Africa versus Russia and Europe? And then in Africa, were these competitively bid awards or were they direct awards?

Were they competitively bid...

Or direct award?

Both, but Africa was the leader there. And we see that continuing, maybe not to the same magnitude. But outside of North Africa, where there continues to be a bit of weakness in Algeria, Egypt's pretty good. Libya still not where we'd like it to be by any means. But the rest of Africa is executing very well. And our customers are having some, as you know, very nice success. So we see that continuing. And there's a real bias, as there always has been, to ever, greater levels of technology. And that plays well for us, whether it's on the D&E side or particularly the completion side. So I think, Africa, for the next couple of quarters, could be the earning engine, if you will, for that super region.

And let me just add and give kudos to our African team. Two years ago, they were looking at the abyss. I mean they -- we were losing money, the market collapsed and now they've got world-class margins in that region this quarter. It's really quite a turnaround, quite a success story. And just shows you, first of all, we're in a volatile business. But second of all, we have the technology that drove us from there to here. And a lot of this is technology driven, and it's applied in Africa, which was a pretty volatile market. But it really posted an -- amazing numbers this quarter.

I agree. Amazing numbers and amazing turnaround in Africa. But still saying that you expect a modest decline in Q2 margins and thus, the recovery in the second half of the year because of some special items in Q1. Fair?

Yes, the usual. It's the usual sort of seasonal down from Q4 and EMP budgets usually don't really get into gear until Q2, Q3. So it's typical ramp-up.

Your next question comes from the line of Kurt Hallead with RBC Capital Markets.

I just had a question here. You guys mentioned that on the international market, if I heard you correctly, that you say the -- it's tight, if not, sold out in terms of equipment, let's say. And I guess I'm still trying to kind of connect the dots and with that kind of capacity tightness, why it's such a struggle to get pricing improvement on the international market. If you have any -- got any perspectives you can offer us, that would be helpful.

We're scratching our head, too. But I think as Ole mentioned and you very well know too, Kurt, it's the high profile projects where it seems as though, for whatever reason, I think one of our competitors properly characterized it in their call, in terms of the concentration to spend, generally the bias towards the D&E. So you have this ever-increasing levels of technology. They're generally very long -- long term. A lot of -- sometimes, some costs in terms of infrastructure drives a certain behavior. That is what it is. But as I said earlier, there was a 2% increase. And I think this is lost in the conversation. Because when we look at commodity prices, and certainly, you guys have been talking a lot about this international margin issue given where commodity prices are. But if you really dig into the details and the facts, the rig count has not been there year-on-year. And if you were to just tell anybody that you got a 2% increase in activity from Q1 of '11 to Q1 of '12, I don't think, now looking back, we could have said there would have been much in the way of price, Kurt? But if we think it's up 10% in terms of activity from this period until next Q1, I think we all rightfully and will stand correctly to say that pricing will definitely pick up pace. How it actually comes to the bottom line, though, given the terms of these projects and the contracts, this is probably where you really want to be in the spot market, if you will.

Okay. And for Peter, I just wanted to make sure I heard you correctly. I know you gave kind of some overall international expectations for exit rates for 4Q '12. But did you say that the Europe, Russia, Africa business will be down sequentially in the second quarter? And if so, were you referencing both revenue and operating margin? If I didn't hear you correctly, please help me out.

Really just operating margin down a bit.

Your next question comes from Joe Hill with Tudor Pickering. Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Martin, Schlumberger is trying to disintermediate fluid systems from pump trucks and stimulation. They've been pretty vocal about that. Do think they'll be successful with this approach or do think potentially that we could see the frac market fragment based on differing technologies?

I think, it depends where and for which customer. This is not necessarily anything new. It's -- separating the hoisting business, and the wireline side has been tried before by all of us. Because that's the capital intensive side of that business. And the, if you will, the value add is in the bottom whole [ph] of the electronics. That's never really been successful. Will it happen in this? It's a great way to mitigate the capital volatility. But I would also caution that depending on the customer, I think there'll be a concern about that joining up between the fluid side, the technology side and the execution of it. And you know that North American Pressure Pumping business, I think, is going to move up the value chain. It's going to become a more integrated part of drilling and completion and value creation for the customer. So I applaud the ingenuity. I think it's a good idea. Now, to what degree will it actually take hold? I don't know. But if it does, then that opportunity to lay off some of that capital risk and move -- more power to them. And they probably won't be alone in the approach. Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Okay. And then just switching to international real quickly. You guys lost about 5.5% of margins sequentially in Middle East Asia Pac. Some of that were startup costs in Iraq, I think. And that being the case, and I believe you said you drilled your first well for Eni this quarter or last quarter, rather, how much should we expect in terms of margin recovery from the absorption of those mob [ph] cost?

We're pretty optimistic on -- first of all, we're optimistic on our international margins overall. And we said we should end the year higher than we ended the last year. And I think all the regions should do well from here equally, with the exception of EARC Europe, Africa, Russia Caspian, in the second quarter. So we would anticipate the mob [ph] cost there to dissipate pretty quickly. I mean, we've got a lot of revenue in the quarter, which was pretty much eaten up by mob [ph] cost. But we should start seeing a good pickup in Iraq in Q2 and really hit full stride in Q3.

Let me temper that a bit. I would say we'll be up to 5 or 6 rigs by the end of Q2, if not 7. And so while the revenue's going to be accelerating, so will some more mob [ph] costs, but I would say this, Joe, the guys have executed at exactly the budget. So it's -- as Peter said, I think Q3 is when you'd want to Iraq begin to hit full stride.

All right. Thanks, Joe. And that concludes our comments. Thank you for your time this morning.

Thank you. This concludes today's conference. You may now disconnect.