Good morning and welcome to FMC Technologies fourth quarter 2007 earnings release teleconference. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. [Operator Instructions] In the event of technical difficulties during this call, we will post updates at www.fmctechnologies.com/earnings. Thank you. Your host is Rob Cherry, Director of Investor Relations. Mr. Cherry, you may begin your conference.

Thank you operator. Good morning. And welcome to FMC Technologies fourth quarter 2007 earnings conference call. Our press release and financial statements issued yesterday can be found on our website. During our call, we will reference earnings from continuing operations, which excludes results from businesses that we exited in 2006 and 2007. In 2007, we exited a small FoodTech product line. Historical results have been revised to reflect these operations as discontinued. I would like to caution you with respect to any forward-looking statements made during this call. Although these forward-looking statements are based on our current views and assumptions regarding future events, future business conditions, and the outlook for us based on currently available information, these forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. I refer you to our disclosures regarding risk factors in our Annual Report and our other SEC filings. I will now turn the call over to Mr. Peter Kinnear, FMC Technologies President and CEO.

Good morning. Welcome to our fourth quarter 2007 conference call. On the call with me today are Bill Schumann our CFO, John Gremp who heads Energy Systems and Charlie Cannon, who runs our FoodTech and Airport Systems. I will give you some highlights on our fourth quarter and update the outlook for 2008, and then Bill will provide you with additional details on our financial performance and then we will open up the call for questions. I am pleased to report that we had another outstanding quarter and outstanding full year. We maintain our subsea market leadership position, captured key subsea processing projects, and increased profits across all businesses. Our diluted earnings per share from continuing operations of $0.70 was up 49% from the prior year quarter and we finished the year at $2.30, which was a 53% increase over 2006. Subsea inbound orders for the quarter were $2 billion, up $1 billion from the prior year quarter. For the year, subsea inbound orders totaled $4.4 billion, a 92% increase from 2006. Our subsea backlog reached yet another record at $3.9 billion, more than double the amount from the end of 2006. Operating profit in Energy Production and Energy Processing segments both improved 66% from the fourth quarter of 2006. Let me now give you a little more detail about our energy segments. Energy Production revenue was up 37% from the prior-year quarter on the strength of our subsea and surface wellhead businesses. Subsea revenue was up 35% from the prior-year quarter and up 32% sequentially. Revenue from our surface wellhead business was up over 40% from the fourth quarter of 2006. Most importantly in Energy Production, we increased operating margins in 2007 by 150 basis points over 2006. As we stated last quarter, we believe there still is room…

Thanks, Peter. Let's look at some the highlights from operations. Energy Production sales were $867 million in the fourth quarter, up 37% over the prior year quarter primarily due to the growth of subsea which was up 35%. Surface wellhead also contributed to the revenue growth, up over 40% from the prior year quarter with most of the sales growth coming from outside North America. The Energy Production segment generated EBIT of $85.5 million in the quarter, up 66% from the prior year quarter. Its operating profit margins were 9.9% for the quarter, and 10% for the full year. The full year margin was 150 basis point improvement over 2006. Inbound orders and energy production were up substantially with subsea orders up a $1 billion from the prior year quarter, and up 92% for the full year. Subsea backlog was a record $3.9 billion. The Total Pazflor award of approximately $980 million was a key contributor to the quarters inbound and backlog. Energy Processing sales were up 13% over the prior year quarter, fluid control growth, fluid control revenue, which includes our WECO/Chiksan product line was up 18% over the prior year quarter, and 23% for the full year. The Energy Processing segment generated EBIT of $39.3 million in the quarter, up 66% from the prior year quarter. The operating profit improvement was the result of higher volume in our fluid control and measurement businesses. It was also driven by the absence of $5.4 million in one-time restructuring and legal expenses that we incurred in the fourth quarter of 2006. Inbound orders for Energy Processing were down 16% from the prior year quarter, due primarily to the timing of project orders; backlog at $330 million is up 8% from the prior year quarter, again based on strong measurement orders. FoodTech…

[Operator Instructions] Your first question comes from the line of Stephen Gengaro. Stephen Gengaro - Jefferies & Company, Inc.: Thanks, good morning. Just a quick question as it pertains I guess to Pazflor specifically, but also generally your margin expectations for '08, when you look at the pricing and the backlog vis-à-vis a year ago and then Pazflor is a large part of that, can you give us a sense for kind of magnitude of your expectations for margin going forward?

Steven, this is Bill Schumann. As you know, our margins in '05... I'm sorry... '06 were 8.5%, we brought them up to 10% this year in 2007 I should say. And 2008 we would hope to get as much as 100 basis points more, so it's going to be difficult. We’ve got a lot of work to execute but we think we can get to close to 11%. Stephen Gengaro - Jefferies & Company, Inc.: And then as a follow-up to that on Pazflor, is that job at similar margins to the rest of your backlog?

Yes, it is. Stephen Gengaro - Jefferies & Company, Inc.: Very good, thank you.

Your next question comes from the line of Brad Handler.

Thanks. Good morning, guys. I guess, I would like to come back to the subsea also. Could you just give us a lay of the land a little bit for... I know you have your large project list, but if you could just give us a little in terms of what's coming up for you? And then maybe some comments about Angola, specifically, does winning Pazflor for example, kind of suggest that now Sonangol turns and make sure they award other work to other parties, that's sort of thinking?

Brad, this is John.

Hi John.

With regards to the future projects, winning Pazflor, winning Combustíveis, all those were on our list. We are pleased that those projects that were on the list have now moved into the award com [ph]. So as we look at the list, some of our target projects or off of it but going forward, we've got our Woodside Frame Agreement, which… there will be some call offs on that, which will be fairly sizeable in the next couple of years. There are several West Africa projects, which have not been awarded yet but they are expected to be awarded this year and we don't expect those to come to us. So looking at West Africa with Pazflor and while we gone, we are in pretty good shape there and looking forward at E&I has got project in Norway, the Gjoa project which we are targeting, of course Chevron in the Gulf of Mexico Jack/St. Malo projects will be important to the industry as well as to us. The Shell Bonga project in Nigeria is one that we are looking at but we are concerned about may be moving out because of the situation in Nigeria. So looking forward at the project list, we are comfortable that we have been able to take projects and receive the awards. I think going forward it may be less about the large projects, more about some of the smaller projects that will come from our calls-offs whether it’s the Statoil Frame Agreement, the Woodside Alliance, the Shell Alliance in the Gulf of Mexico, you'll see smaller, smaller awards but there will be called-off of existing frame agreements. Also we are expecting independence particularly in the Gulf of Mexico to be a little bit more active as rigs become available and we have been very successful with the independent. So looking forward, there may be smaller awards but we are comfortable with holding onto our share.

That's great color I appreciate that. Does it... can you extrapolate then for the, may be for the industry in terms of overall expectations for tree counts and then assuming dollar trends continue, maybe some dollar expectations for awards or roughly what you might be thinking?

Well, again for 2008, you've still got a couple of big West Africa projects that hopefully will hit. And I think that will take the subsea tree number close to 500 again. And then you add to that the smaller projects, which I mentioned I think will get to the 500 number.

Fair enough, alright thanks guys, I’ll turn it back.

Your next question comes from Jim Crandell.

Good morning.

Good morning Jim.

Two questions. First, Peter with the spin-off of Food and Airport, do you see the company being more acquisitive in your core businesses, and could you elaborate it a little bit as to… if the answer is yes, what those businesses would be?

Jim, that's very difficult. I mean we don't really comment about those types of activities. But we will generate a lot of cash going forward and certainly, our strategy is to build part of the spin-off strategy if we take an Airport is to become a 100% energy business and being a lot more focused on what we do in that space. So you can interpret my words, I guess anyway you want. But, I mean we will certainly try to continue a high growth profile in high-technology markets that in and around our base businesses, subsea, certainly, surface wellhead, fluid control are great businesses adding capabilities in those businesses will certainly and then we have... we have auxiliary businesses and measurement and loading systems that also have great technology basis that if we can fly in the right niches to enter, we will try to do that.

Okay. Follow-up John for you, how do you see Vetco’s profile in the market today. They seem... their market share seems to have dropped 9% almost 10% here in terms of new orders, résumés of their people are seemingly all over the business, and they seem to be in disarray. Would you disagree with that and how do you see them?

Well, these large projects takes a long time to develop the relationships and get... prepared for the bid. So, I wouldn't look at the short-term or near-term shares of Vetco and read too much into that. It takes a while to build up your share and get going, particularly on these large projects. I think we haven't seen a lot from GE Vetco yet but I think we've mentioned this before we expect them to be disciplined players in the market. They have a lot of capabilities, they'll probably continue to improve their capability and they will be an important competitor, and I think they'll be successful in participating in some of these key projects, just need to give them a little bit of time. Again, these projects, the big ones in particular, it takes the whole bidding process, it takes a couple of years. So, I think we have to give a little bit of time.

Okay. And John just a follow-up on your statement I thought you said that you expected to maintain share in a couple of major projects here early in the year that are widely expected to go to Cameron, yet you were saying you expect to maintain your share at 50% of the subsea tree orders?

Let me clarify that. Maintain our share over a period of time, you know, any time one of these big projects drop like Pazflor it creates a lump and we won that, so of course our share spike, as these other West Africa projects hit, it's going to create a spike in that period. So, no I am not referring to 2008, I'm referring to 2006, 2007, and 2008. If you look over a period of time then our share will be maintained but no, not in the particular quarter or particular year because...

Not at 50%. Okay, and last question, could you comment on given what you're seeing is the performance of your subsea separation could you comment on what you see is the likely outlook for new subsea separation orders in 2008?

As you know, there was a period over the last year and half where there were a number of subsea processing projects, which we were pleased that we've been able to pick up. Going forward, there probably won't be that many processing projects in a particular year or quarter. There are couple of them out there. I mentioned Jack/St. Malo earlier that's likely to have a processing component to it, there's some more Shell projects in the Gulf of Mexico further out, but they'll have processing. But in the near term they probably aren’t… near term meaning the next several quarters, there probably aren’t as many projects… processing projects we've seen in the last year.

Okay, good. Thank you.

Your next question comes from Chuck Minervino.

Hi, good morning.

Good morning Chuck.

I just had a question on the surface business. One of your competitors talked about the surface business may be slowing down a little bit and growing more closer to the land rig…. the global land rig count growth. Can you give us a little comment on what you're thinking going forward, they had a very good year on the surface side for you guys, are you seeing something similar or do you still expect to grow faster than the land rig count?

It's Peter, we’ve had a great year in terms of our activity somewhat outside of the U.S. in terms of Middle East activity for us, North Africa, Kazakhstan, Mexico has been a good market and we had... we acquired an oil company called Vos Wellhead in Holland back a number of years ago. That's been a good addition for us in terms of volume. So if you look at the international activity, you look at the E&P spending on international side, it's projected to be double-digit growth next year. So, we would say that the international portion is certainly still a positive trend. You look at the U.S. market, giving, mostly 80% of rigs are drilling for gas, it can fluctuate depending on gas prices. But the activity in the U.S has been pretty steady this year and we will say, the market is probably flattish in '08 relative to '07 for the U.S. But we think we certainly have opportunities to continue to grow our surface wellhead business, given our international strength and position.

Okay. And then just a question on subsea. You commented that you're around $19 million of subsea revenue per tree... I think it was this year or this quarter. Can you just comment going forward, what the opportunity is to take that higher maybe in '08 or 2009 or do we... have we hit kind of more of a stable point here for the near term?

I mean... we're cautiously optimistic, we can continue to increase that as the complexity of these jobs continues. But we've had a great run going from $9 million or $10 million in '05 to $14 million of order value per tree in '06 up to $19 million in '07. Part of it is... our scope and breadth and that we... sometimes we get a $30 million or $40 million, $50 million on subsea manifold job with zero trees because we are very strong in the subsea manifold position. So, a lot depends on the mix of what's coming and obviously our subsea processing strength and order awards this year have... had led to that mix. So yes it's a little tricky to say the exact number is going to be, the ex-amount next year, but we're very optimistic that as the subsea technology continues to get adopted, with the additional rigs coming, the complexity of the jobs, the water depth of the jobs, higher pressure applications, all those things in our mind will continue to drive the value up per well.

Okay. Great. Thank you.

Your next question comes from Geoff Kieburtz.

Was that Geoff Kieburtz, possibly?

Hi, Geoff.

Okay. Few questions. Peter, John, if you look at the subsea market right now, what do you consider to be the principal constraint on the size of the market. Is it the opportunities the customers have with your manufacturing capacity, is it the rigs themselves? What do you see as being the gating factor on the markets growth?

Geoff, it’s a good question. And it's kind of a complex answer because one, the big international projects have a component where the national oil company has to approve them and it's a very complex process. It is not only just the subsea equipment, but they've got to get the FPSO, the drilling rig, the installation contractors. All that has to be kind of packaged stuff and present it to the national oil company and at got times they are not driven by any timeframe for economics and that creates a lot delay and frustration for the international oil companies to prove it.

It maybe just project management capacity?

Well, lot of it is just going to be approved. I mean, NN, the National Nigerian Petroleum Company. I mean, they decided and after the general elections and in Nigeria they decided to reorganize themselves into five different units. And the oil companies have had a tremendous difficult time trying to figure out where they go, and how they go and which Board has to approve what, and it just changed the whole, whole dynamics of their approval process in Nigeria, as an example. I mean the rig... the rigs have been tight, we're, it’s a, I mean on a macro basis, I think there is 11 or 12 new rigs coming in '08 and then it jumps up to 20 something in '09 and '10. So, I mean that is good. As you know most oil companies have a portfolio of projects that they can start to develop that, done some exploration wells and may be just waiting on a rig. So, that will break loose. The other side of the equation would be the people side has been pretty tight. I think getting project managers offshore, technicians, project engineers is still pretty tight market. I don't think internally from a throughput standpoint. We have that many constraints for the industry didn't have that many constraints. But, if the people side, to get, to make the throughput happen, that is probably the... but, we're very optimistic that this will all over a reasonable period of time all shake loose and the industry will be able to respond in a much more diligent way as the oil companies start to explore. Mostly rigs are getting contract. So they're going to do, I mean they'll have to do exploration work, development work, production, new production, or go back or work over wells. I mean, they're going to have to put them to work given the contracts that they are committing to.

Second question, as you kind of gain more experience with the subsea processing and have more conversations with your customers, do you have any sense as to what percentage of subsea completed at your wells are candidates for subsea separation or processing?

That's hard question to answer. As you know, we're doing both Brownfield applications and Greenfield applications in subsea processing. The Brownfield applications obviously are driven by the increased water cut or water production from the well and…. like Tordis, I have an option to build another $1 billion offshore floating separations system or I can may be do something on the seabed for less cost and it might be environmentally better for me to separate the seabed and re-inject right in to the well. I was in Brazil three or four months ago and they… talking to the Petrobras Production VP, I mean he had the same comment. I mean our wells are starting to produce a lot of water, we are faced with an 8% decline rate per year of our existing wells. So Petrobras is very interested in subsea separation and how to deal with this trend and how can I enhance my recovery. So I think you'll see over time as soon as some of the technology gets in place and it's up and running and is field proven, I think you will see the industry start to say, boy, this stuff is... it really works and we can apply it in these applications.

Because it’s a little bit too early to try to size the market yet?

I think it's difficult for us to tell the size of the market, but we know there is applications and the big producers like Petrobras where they are spending money, let me put this way, they are spending money now working on separation technology that they know that they’re going to need to apply in certain fields down there.

Does the inclusion of subsea processing in the contract mix raise or lower or not have any affect on your average margins?

It doesn’t impact our margin Jeff either way really.

Okay. And I guess last question is, as you look at your guidance of $2.75 to $2.85 with what you know about the backlog in the order delivery schedule and assuming reasonably consistent execution performance what do you see is the factors that might drive that below $2.75 or above $2.85?

If you just look at subsea, $3.9 billion backlog at the end of the year. I mean we are going to convert probably 50% to 55% of that into sales in '08. So, that's going to be two plus, it's going to be like our sales level that we had in '07 in subsea. So the increment is going to come from new orders that we get between now and at the end of the year and as you know we do percent completions, so as soon as we get an order and start adding value, we generate revenue and profits so we think '08, as we commented will be... continue to be a good growth year for us going forward.

That would be orders coming in from here would be the principal driver to get that above $2.85?

Yes. I mean, if we got orders or we were able to convert... add more value to the existing backlog and convert it at a faster pace into revenue. And so that's dependent on the engineering getting done on time, raw material coming in on time, and putting the raw material through our factories and all that sort of thing to get more value.

And the downside risk would be mostly execution?

Yes, mostly execution, yes.

Thanks very much.

Yes, thanks Geoff.

Your next question comes from Rob Mackenzie. Robert Mackenzie - Ramsey & Co.: Good morning, guys.

Good morning, Rob. Robert Mackenzie - Ramsey & Co.: Peter, I was wondering just real quick on the housekeeping item, if you could confirm for me how many trees you guys won in your order book in '07?

Yes, we should have mentioned that earlier. We... for the for the full-year we had 230 trees, and in the fourth quarter, we had 103 trees in the fourth quarter. And, of course, that was driven by... in the fourth quarter we had 49 for Pazflor so that was the big driver. The other key awards in the quarter, we had 19 tress from Petrobras, of course, we won Shell Gumusut in the quarter, that was 15 trees and those were the big drivers. And then we had a bunch of small one, two, three-type wells for some of the independents like ALOG, Nixon, we got some additional trees from Anadarko. And then we had... in addition to Pazflor, we had some small head-ons for Total and different projects. Robert Mackenzie - Ramsey & Co.: Okay, great. And on the flip side, Qwest estimated industry shipments of about 473, 472 I think the exact numbers in '07. What kind of market share do you think you had of actual deliveries this past year?

I don't know. We just focused on the inbound and the conversion of that to dollars. We don't... because we're doing percent complete we don't really focus on when their actual tree ships and so I don't really have that data. Robert Mackenzie - Ramsey & Co.: Okay, fair enough. In terms of going back to Geoff's backlog questions or your answer to it, $3.9 billion of backlog, you said 50% to 55% in '08 as it looks right now. Could you give us a feeling for how that splits out? Is there much of that going into 2010 or is it still just a tiny fraction right now?

No, it's probably a small fraction in '10 most of it will be '09, the balance, yes. Robert Mackenzie - Ramsey & Co.: Okay. Next question, in your guidance you didn't really... you broke out that 80% of your guidance for '08 was from energy, can you share kind of your WECO assumptions in that given the slowing pressure pumping market and also, I guess you already addressed the subsea revenue question, so if you could just address what assumptions you have for your WECO/Chiksan segment this year?

Rob, this is Bill Schumann. Just I want to make sure we communicated right, we've got 85% of the guidance is coming from the Energy Systems business. Robert Mackenzie - Ramsey & Co.: Okay.

And within Energy Processing, we expect growth in the 10% to 14% range for revenue and probably flattish margins compared to 2007. Robert Mackenzie - Ramsey & Co.: Okay. Thanks. I will turn it back.

Your next question comes from Byron Pope. Byron Pope - Tudor Pickering & Co.: Good morning guys. Just back to the issue of the subsea backlog, and Peter you mentioned that $3.9 billion of subsea backlog at year-end. Since you guys are at percentage completion, is there any reason to expect any particularly big lumps as we think sequentially as we move through the quarters of '08, or is the diversity of that backlog such that that coupled with the way you account for it should season out some of that bumpiness potentially?

Yes, we see a pretty smooth flow of the backlog conversion, we wouldn't see too much lumpiness I don't think Byron. Byron Pope - Tudor Pickering & Co.: Okay. And then just wondering if you could speak to I have been… in some of your prior presentation you talked about an introduction of your well service pump line. And I was wondering if you have any thoughts on kind of where you may be in '08 versus '07. I think at one point you talked may be $30 million to $35 million of res [ph] where you are thinking going forward with regard to that service line?

I think our '08 outlook would probably be, we are still working with the service companies in terms of our capital spending. Obviously, the well service pump is a new item for capital additions, and we're probably a little bit lower now, we’re probably around $25 million to $30 million, I guess in our current outlook for that product line. Byron Pope - Tudor Pickering & Co.: Thanks guys.

Your next question comes from Kevin Simpson. Kevin Simpson - Miller Tabak & Co.: Yes. Good morning.

Good morning Kevin. Kevin Simpson - Miller Tabak & Co.: Peter I just wanted to get and Bill your... to drill down just a little bit more on the frac pump business, and then WECO/Chiksan, Bill you really answered the WECO question. So have you guys gotten order cancellations for your frac pumps over the last, you know whatever few months?

Well, we had some reschedule of deliveries Kevin and that's probably why we lowered our '08 outlook a little bit. But the pump has really performed very well in the field. We're getting feedback from the customers. So, to us it’s just a matter of being patient as the market adds new capacity that we get a chance to participate in the opportunity. So we are very pleased and we are patient to see the market ramp up and may be not the fashion we like but we are very patient and we will get our fair share. Kevin Simpson - Miller Tabak & Co.: Okay, thanks. On WECO, are you looking for, in the guidance, you had WECO up this year and on revenue and if so is it similar growth, or something close to what you have for the whole segment?

Well, Kevin you've been following us for a long time and we've continually underestimated the flow line the WECO/Chiksan business. I think was up 40% in 2007, 2006 it was up order of magnitude 23% in 2007, and we're expecting something probably below 10% in our guidance, but we're optimistic. I mean the frac activity levels. I'm not talking about pressure pumping prices, but activity levels have remained high. And that may be part of the change that could impact the range of estimates that we have between $2.75 and $2.85. Kevin Simpson - Miller Tabak & Co.: Okay. In terms of... is it reasonable though that I hate to break things too much on a quarterly basis. Are you coming into '08, 1Q with similar kind of growth comps to what you had in 4Q for WECO?

Yes, we're at about that same level. You have to remember that 75% of the WECO/Chiksan businesses is kind of wear parts... is replacement parts and only about 25% is for capital spending, so we're more tied to the frac activity level both in the U.S. and outside the U.S. than we're to capital spending in that businesses.

Also Kevin, you know these multi-stage fracs for the Shell activities are very, very hard on the equipment and so we get a lot of replacement parts out of those jobs. Kevin Simpson - Miller Tabak & Co.: Sure that makes sense. With your customers, one, just this… to try to finish this out... one, with your costumers getting squeezed on pricing, are they, are you getting... have you had to make price concessions or you able to pretty much get the prices you want?

No. We're fine where we are in terms of pricing. Kevin Simpson - Miller Tabak & Co.: Okay. Great. Now on... and just one quick subsea question do you expect Jack/St.Malo to come this year?

Kevin, this is John. I know that dates on Jack/St.Malo been sort of all over the place but actually our last conversations are with Chevron. They are optimistic towards the end of the year it's possible that it might be avoided. The team is aggressive but that's what they are saying, we will see. Kevin Simpson - Miller Tabak & Co.: And you are pretty... I mean it seems like all the lower tertiary is going to have a water flood and you know, water flood in subsea separation component. Are you pretty confident that's going to be the case with this award as well?

Yes, you're right. Petrobras Cascade has boosting, but you do have separation and boosting and this is all in that same trend. So, yeah, it would be logical. It will have some sort of processing capability. Kevin Simpson - Miller Tabak & Co.: And then, one other thing on separation. The… where your remedial project is... I thought that the remedial... one remedial project was Tordis and so, do you… I mean are you beginning to get a roster of customers coming in, waiting to see how that project goes to, obviously, Petrobras is one you mentioned, but I am wondering outside of that... since we really focus on the new field development and don't as much on the...

Yeah, I think Kevin it's a good question and we're very fortunate in that. Two of the major partners on Tordis, one was Total and one was Exxon Mobil and so Total certainly had an opportunity to look at the solution we provided to Tordis and that technology and their look at it helped us significantly on our winning the Pazflor project. Statoil specifically said that they're going to probably take this Tordis type technology and may have applications for the Stockman field if you read their press release, it was mentioned and so you see it's Statoil Hedro already looking at other opportunities in their portfolio where this technology may be applicable. So, I said that it gets up and it is running but... it performs well for the next six months to a year I think the industry will say okay this stuff really works and we should start looking at how... do we have applications where we might apply it. Kevin Simpson - Miller Tabak & Co.: And so in the budget cycle going into '09 you could see some projects pop-up that aren't exactly, aren't visible right now.

Yes. Definitely, yes definitely. Kevin Simpson - Miller Tabak & Co.: All right. Thank you very much, that's it for me.

Your next question comes from Joe Gibney.

Good morning everybody.

Good morning.

Most of my questions is answered. Just a quick question, see obviously positive news here on Tordis, I was curious if you just give an update on the subsea gas compression front and how that’s progressing, appreciate it?

We have a partnership with Siemens and they're doing a land test or their compression system. It’s been well received by Statoil, we've also been awarded some R&D work for various control technology associated around with gas compression for the Ascot field which will be a lead in to other technologies for example for the large Stockman field at Statoil Hedro is now at 24% play or so. We're progressing well in getting bits of technology and with our strong relationship with Statoil Hedro. So we're very pleased with the progress there.

Okay. And how far along do you think it's going to be before we see a viable commercial product out in the field here on a compression side?

Well, I mean it's probably 2 to 4 years out timeframe depending on specific application that they find.

Okay. Thanks, I'll turn it back. Appreciate it.

Your next question comes from David Anderson.

Hi, good morning. I had a question, there is a couple reports out there, that’s suggesting a tree market in kind of the low 500 numbers for next couple of years. I was just kind curious if that impacts, how that might impact your strategy at all? You talk about keeping your, you're maintaining market share right now, but how do you do that in this kind of market. How do keep your growth rates up, or is that really kind of, points to other equipment services like you talked about kind of value per tree. Do you expect that to keep going up to kind of offset that?

Well, there’s two things. I think the complexity of the trees are going up number one. So inventories that we used to sell for $2 million are probably $4 million today. So, I mean this complexity just in the tree itself Dave. And then the scope of what we're, the scope of things that we're being asked to do by our suppliers in terms of the overall system, I mean our customers on the overall system on the seabed has gone up in complexity. So where we're trying to position ourselves as a broad systems solution provider, which we have talked about before, where we can do more and more things for the customer on the seabed whether that's engineering work, equipment work, software work, installation work all the above and so the tree count per se, it’s obliviously an important driver but, it's not the whole equation.

And you think your value per tree is considerably higher than your competitors out there?

I think, yes. I would say yes.

Okay. And now, John mentioned before, he said he expects kind of the trend of the market at least in the near term to go from kind of the larger projects down to the smaller projects. I guess, my question would you expect that value per tree, you mentioned you'll kind of get $19 million value per tree this past, I think this past year. Would you expect that to come down a bit this year as like obviously with smaller price, which are one of the many manifolds and other... are there kind of poultry [ph] services?

Dave, this is John. There is a lot of ancillary equipment requirements out there like for manifolds. I'm not so sure the number would necessarily come down. But, certainly the 1, 2 step-out wells for independence aren't going to have the value that a full system would have with manifolds and everything else. So, as we pick up those awards, those will have a lower dollar per well, but, there's other things that are offsetting it. Our work in Light Well Intervention for example, those programs start to kick in and those add dollars per well. So I think we have things that are offsetting may be, the smaller awards, and they have a lower revenue per well. So, I think we're confident and certainly hopeful that we'll... with this other activity, and scope that we are providing that we would be able to keep that number up there.

Okay. It’s great. Thanks. And I just have one last question on the Tordis field. Obviously you started that off the last year. Is there a kind of a timeframe where you think that kind of Statoil is going to say hey, this is definitely working and then other people kind of start looking at it. I know you mentioned Petrobras, but is there like a timeframe do you think like it's going to be the this year, because this really works we're getting x percent increase recovery here?

This is Peter. I would say, yeah by the end of this year. But if it's operating without any problems, that will be great success.

Great. Okay. Thank you gentlemen.

Your next question comes from Marshall Adkins. Marshall Adkins - Raymond James & Associates: Good morning, guys.

Good morning, Marshall. Marshall Adkins - Raymond James & Associates: Let me just follow-up real quickly on some of their earnings guidance. If we just annualize this quarter, you kind of come out in the mid point of your guidance. So, from [inaudible] alliance and what you said... they.... it sounds like we shouldn't expect a lot of seasonality here. So, and processing is still growing, albeit it a much slower rate. Why... are we just being conservative on the guidance or is Airport or Food moving down? Just help me to understand, why may be guidance wouldn't be a little higher?

Well this is Bill Schumann, Marshall. Our subsea... in theory our subsea business should not have any seasonality. But the reality is and what we observed over the last few years is that we tend to have a big fourth quarter, and a slower first quarter and based on revenue completion and accounting we think that’s because our suppliers are making sure that they get deliveries in the fourth quarter and they don't have as many deliveries for us in the first quarter. So in the processing businesses also tends to have a big fourth quarter. So it's difficult to annualize the fourth quarter. Marshall Adkins - Raymond James & Associates: I think there is a little bit seasonality then?

Yes, we do have some seasonality. As we look into 2008 though, I would expect those same attributes in terms of the two energy businesses and the Food and Airport businesses, while we expect them to be up will not be up as fast as much as they were in 2007 or as much of the two energy businesses will be in 2008. Marshall Adkins - Raymond James & Associates: All right. Okay. Well, that's helpful. Last question, backlog obviously huge deal this quarter, huge project this quarter, intuition would suggest to me that for the next quarter too may be that backlog flattens out or may be even hits down a little bit. Does that makes sense?

Yes, obviously it's dependent, it’s project dependent on the subsea side. But I think your observation is probably correct. Marshall Adkins - Raymond James & Associates: Okay, great. Very helpful. Thanks guys.

Your next question comes from Kurt Hallead.

Hi, good morning.

Good morning, Kurt.

Just a general question out there. I think there are still some misperception about what incremental capacity in this business necessarily means and some issues made about the fact that may be the tree order rates growing but everybody else is increasing capacity. Can you just kind of help me understand what capacity increments in your business necessarily mean, does it mean you are putting actually we did on the Shell and hoping to sell it or it is there some other dynamic that's going on?

No, we have added I think, as you know, Kurt, we've added capacity in different ways. We've added people capacity, we've added highway-assembling capacity, we've added some machine capacity and all those things contributed to our throughput. We've also... in that process globalized our capabilities and that we have not just tried to put that capacity in one location. We've added capacity in Brazil, where we needed a larger high bay assembly in few machines. We've added capacity with service basis in Africa, we've added capacity within high bay expansion in Scotland. We put a separate independent focused aftermarket installation facility in Houston. We put a new facility in Malaysia. So all of those things… a lot of it was geographical ploy in terms of positioning ourselves for where we saw the future subsea business coming. The comment about a specific number of tree throughput per year, really is dependent on the complexity of the tree, it's really dependent on... do we have high mix of manifolds...we put it a lot about proprietary large bore valves on the manifolds which we manufacture in-house. So if I have a lot of manifolds going through and making a lot of valves that's taking capacity away from what I could throughput on a tree. So, it's all over the map in terms of the throughput. So it's very difficult to say, that my tree capacity is X number, because I may have a high manifold mix, which is taken 15% away or 20% away from my tree capacity. So, it really varies all over the place.

I'm trying to say we can't put in the same category say that's... there is X number of rigs that are coming into the market and therefore there is definable gas capacity increase along those lines... we can't... we can't necessarily make that correlation here.

That's what we're saying, yes.

And Kurt, let me add. This capacity expansion and the most recent increment from $2.50 to $3.35 is causing us about $750,000 per tree of annual capacity. And if you look at that... what that do. As it adds $4 million to depreciation a year. So, we are not talking about a lot of money for this capacity expansion and it's not going to impact our earnings that much.

Great. Thanks.

Your question comes from Ken Sill.

Hi, good morning guys.

Good morning Ken.

Just wanted to follow-up on the backlog and order question to make sure, we don't have any kind of surprises, obviously huge Q4 with Pazflor, do you think that orders in the subsea including or excluding Pazflor are going to be kind of flattish or up in '08 verses '07. Because '07 was such a big year with all those... with all the process?

I think John mentioned that we think the market will be around 500 trees in '08. And we don't have the final or the competitor data and yet...but we think '07 was in the 450 to 470 ranges, something like that.

You had such big subsea processing, inclusion of the backlog this year. So, if you look at the... so you kind of saying subsea tree back order inbound should be up 10% to 15% but if you... do you think that you will be able to book anywhere close to same magnitude of processing orders in '08 as you did in '07?

No, I think John commented that we don't... the '08 processing awards are, there’s some potential ones that could come forward but there is not anything that's to be decided right immediately. So...

So, you would expect that orders are going to be down in aggregate, but subsea also be pretty good.

Well, we booked $3.9 billion in orders and I don't think we are going to book that many in '08 if that’s your question?

Yes, I just trying to the tie into the margin, the real key people are freaking out about changes in backlog in which we should see what you guys taken 50% to 55% of that backlog into revenue, that your backlog could be flat to actually may be down. But that really depends on orders in the back half. Is that fair to say?

Yes.

Okay, I just wanted to make sure that people didn't get kind of freaked out and surprised by that. Alright, thanks. That's all I had.

Okay thanks Ken.

Your next question comes from Scott Gill. Scott Gill - Simmons & Company International: Yes, good morning.

Hi Scott. Scott Gill - Simmons & Company International: Just a couple of quick questions. First I want to make sure understand that the revenue guidance for your Energy Processes Systems versus kind of a soft quarter for orders and a down tick in backlog on a sequential basis. How do we reconcile kind of a 10% plus revenue growth for '08 against the fourth quarter order rate and declining backlogs?

Well, I mentioned that the WECO/Chiksan business would probably be lower end of our range and the other measurement material handling loading systems business will probably be at the upper end of the range and there were some rescheduling of well service pumps during the fourth quarter that impacted the fourth quarter inbound rate. Scott Gill - Simmons & Company International: Did those actually flip into Q1 and you are seeing them now.

That's correct. Scott Gill - Simmons & Company International: Okay. That answers that. And just give us an update on well intervention, you haven't talked much about that with respect to any revenue contribution and kind of your outlook for '08?

Yes... as you know we just won towards the middle of last year, we just won two new contracts. One for Statoil Hedro and second one for BP, which now we are building the stacks associated with those two new contracts. Those will more actually start and service and probably until the third quarter. And so, you know they are not going to generate big impact in '08 per se on a revenue basis. But, we are very pleased in terms of the expansion in that technology base, we think it's a good niche that we have entered in terms of coming after market type application and helping the operators where they can come in and intervene work over the wells in a very cost-effective way and Statoil as an example has a population of over 250 subsea wells, so they're very interested in that. They will have.... now have two stacks working in their field, so this is a very economic solution for them. Scott Gill - Simmons & Company International: I think, there is a... I guess no other enquiries for additional units at this time?

Well, we had some enquiries... our strategy has been to say if I am... we were glad to build another stack but in return for that oil company we need kind of a multi-year contract, we are not going to go out here on spec and build... our specialized $25 million system and then you can say next to that I’ll need it and we have no use for us. So we've been very disciplined to say we're very happy to provide your services but in return we need a long-term contract. And so that's been and it’s particularly hard if you.... oil company that only says, okay, I have, I want to work over five wells this year and I don't want sign-up for a multi-year contract. So, we've talked to operators about a consortium trying put a deal together like that. So, we are working in the marketplace to find other applications for the technology. Scott Gill - Simmons & Company International: And just lastly real quick, Bill on production system margins in the fourth quarter declined just a little bit year sequentially, is that mostly due to mix from kind of older lower margin backlog or what was the reason for that?

Well we're executing over 120 separate projects and we get some noise. I can’t attribute it really to any thing specifically, the margins will bounce around a little bit. Scott Gill - Simmons & Company International: Okay. Great. Thank you.

And your final question is a follow-up question from the line of Rob Mackenzie. Robert Mackenzie - Ramsey & Co.: My question was answered, thank you.

Okay, Rob.

And it sounds there are no further questions.

Thank you operator. This concludes our fourth quarter conference call. A replay of our call will be available on our web site beginning at 2 PM Eastern Standard Time today. If you have any further questions, please feel free to contact me. Thank you for joining us today. Operator you can close the call.

This concludes today's conference call. You may now disconnect and have a great day.