Good morning, and welcome to FMC Technologies second quarter 2009 earnings release teleconference. All lines have been placed on mute to prevent any background noise. After the speaker’s 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 second quarter 2009 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 the results from the FoodTech and Airport Systems businesses that were spun off to shareholders in the form of a stock dividend on July 31, 2008. Historical results have been revised to reflect those 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 Peter Kinnear, FMC Technologies Chairman, President and CEO.

Good morning. Welcome to our second quarter 2009 conference call. On the call with me today are Bill Schumann, our CFO; John Gremp, who heads Energy Systems; and Bob Potter, who runs our Energy Processing and Surface Wellhead businesses. I will first share with you some highlights from our results. Bill will then provide you with details on our financial performance and then outlook for the full year. Finally, we will end up the call with your questions. I am very pleased with our record performance this quarter. Our diluted earnings per share from continuing operations was $0.84, this is an increase of 12% from the second quarter of last year, and an increase of 50% from the first quarter of this year. Our total operating profit for two segments for the record $169 million, Energy Production operating profit was up 34% from the prior year quarter, on the strength of our Subsea business. Our second quarter subsea inbound was just under $530 million, much like the first quarter, our order were supported by add-ons to existing projects installation services, FEED studies, manifolds and a few new trees. In fact we in bounded only seven new trees in the quarter, but nonetheless we had a healthy order rate. I believe this is another indication of the diversity of our subsea revenues. We ended the quarter with a backlog of $3.1 billion, including $2.5 billion in the subsea. This substantial backlog continues to support our expectation of subsea revenue of nearly $3 billion in 2009. The near term large subsea projects are still uncertain. Of the economics of these projects at current oil prices should be sufficient to justify them; their timing continues to slip with some projects delayed into 2010. This will likely setup a stronger order flow for next…

Thanks Peter. Energy Production sales were $934 million, down 1% from last year, but up 7% over the first quarter of this year. The growth from last quarter came entirely from subsea as surface wellheads revenue was flat. The subsea growth was the result of our strong backlog position that we ended the quarter with. Energy Production generated EBIT of $140.1 million, which was a record in the quarter up 34% from the prior year quarter due to higher operating profit margins, which was 15% for the quarter. The second quarter performance was driven by the recovery of receivables that had been written-off, by higher margins on some projects and by good execution throughout the group. We do not expect the first two items to repeat during the remainder of the year, and estimate that margins will be between 12% and 13% in the second half, which will still result in record margins for the full year. Inbound orders and Energy Production were $669 million in the second quarter, including subsea orders of $529 million. Backlog was $2.8 billion including subsea backlog of $2.5 billion. Given this backlog, we remain confident that we’ll be able to achieve subsea sales in 2009 that are near 2008 levels. Energy processing sales were $174 million, down 21% from the prior year quarter, but down only 4% sequentially. The segment generated EBIT of $28.5 million, down 34% from the prior year quarter, but flat with the first quarter. Most of this decline in this segment resulted from our fluid control business. The deterioration in North American pressure pumping activity in the quarter continued to have an impact on our fluid control business. Fluid control sales consist mostly of field replacement activity now with virtually no capital spending by our customers. The infrastructure businesses in…

(Operator Instructions) Your first question comes from the line of Geoff Kieburtz - Weeden Geoff Kieburtz – Weeden: Bill, on your last comment there actually. Help me with the math a little bit here. If we had whatever we want to call it, $0.23, $0.24 positive surprise in the quarter and you’re raising the guidance $0.15, it seems to imply that you’ve kind of dampened your second half view, but you seem to indicate that you’ve not changed your view on the second half.

We don’t give quarterly guidance, and we really thought our expectations for the second quarter were higher than the Street’s. We came in about $0.15 above our expectations, relative to our thought rather than the expectations of Wall Street. Geoff Kieburtz – Weeden: On that second quarter results, can you give us a little more color on what drove that 15% margin in Energy Production, and actually the second half forecast of 12% to 13% margin is that the new kind of baseline that you’re expecting from this division?

Well, we had an outstanding quarter, a lot of thing went right and we probably can’t expect everything, all the future quarters to go that way. We did have recovery some receivables that we thought were unrecoverable in the quarter. That added a 0.5% to the total, but we’re operating at any point time more than 100 different projects. We go through monthly estimated, completion estimates and a certain amount of those changes every month and during the second quarter we had a lot of projects that had lower costs and therefore, increased their margins for the project. It was primarily through good execution, and I’ll let John follow up in a minute on that. We don’t believe that we can maintain 15%. We think 12% to 13% is a reasonable number for the second half of the year. Even that will get us to margins for the full years that are record compared with 11.5% last year. So let me let John add about some details about the execution.

Geoff, regarding execution, we had a lot of thing go right and essentially nothing go wrong. What we’re seeing is with the slower pace of growth that’s taking pressure off the supply chain, that allows us to execute well without spending a lot additional money to make up for the overly constrained and overheated supply chain. That was really a big help. For the quarter, the execution was essentially everything went right, nothing went wrong and we’re seeing help from the supply chain because it’s come down a little bit. Geoff Kieburtz – Weeden: As you look into 2010, increasing orders. You’ve had sort of massive changes in the economics of your customers business. Do you think the 12% to 13% margins for Energy Production is the baseline from which you’ll going to be building over the next few years, or is that number sustainable?

We said this on the last call that our challenge is to maintain the kinds of margin that we saw in the first quarter. I think what Peter has explained in the first call was that we know we’re going to come under some pricing pressure in the market and our challenge is to work the supply chain, so that we can offset that price pressure and maintain the margin in the first quarter. That’s really what we’re kind of encouraging in the second quarter is the pressure coming off the supply chain is allowing us to get better execution going forward as we see some of the price pressure from our customers. We’re hopeful, that we’ll be able to maintain those kinds of margins that we saw in the first quarter.

Your next question comes from Rob MacKenzie - FBR Capital Market.

Quick follow-up on Jeff’s question, was there anything in the quarter along the lines of a contract cancellation that you recognized a gain on that helped boost the margin this quarter?

No. There wasn’t, Rob. It was really, as John said virtually everything went right this quarter.

Okay, fair enough. That question’s gone now. Can you Bill, quantify for us the impact that foreign exchange had both on the backlog and if any on the income statement?

Yes. As you know, we kind of mark-to-market our backlog as we roll forward. So during the quarter, we had $116 million gain on our backlog and that was in subsea, Rob. So $116 million gain from foreign exchange as both the Brazilian Reais and the Norwegian Krone strengthened versus the US dollar. So that’s the impact on orders and backlog. If we have the same exchange rate in the second quarter of 2009 that we had in the second quarter of 2008, our sales would have been $187 million higher and EBIT would have been $25 million higher. So as you may recall, the second quarter of 2008 was near the peak of the weakness of the US dollar. So we’re getting a big extreme there between comparing the second quarter of 2008 with second quarter of 2009.

Then going to some of the orders, there’s been a lot of chatter about some potential orders coming out, albeit frame agreement with large independents, albeit an incremental subsea separation project in Brazil. Can you update us on where some of these projects that, we’ve all thought kind of imminent stand right now.

Rob, this is John. I’ll make a couple of comments, first with regard to the major projects. As we’ve said in the last call. Some continue to move to the right, we are watching those closely. Obviously, you’re aware of the big Petrobras frame agreements, which are certainly important to everyone. They’re moving forward a little slower maybe than some thought. They’re all moving forward, which is encouraging. A number of other big projects like Chevron Jack/St. Malo, which is moving forward albeit slower than probably what we had originally estimated. Some projects in Europe are moving, but again moving a little bit to the right. So what we see is, we still see a healthy list of major subsea projects, but they’re shifting towards the end of this year and into early next year and they were watching us closely. What’s encouraging for us is that in the first two quarters, our subsea inbound was reasonably good despite the fact that there weren’t any major projects that we won. So we’re encouraged by that. The second thing we mentioned in the first quarter call is that, we still believe that the satellite subsea completions or tiebacks will be strong. We saw some of that in the first quarter. We saw some of that in the second quarter. Our conversations with the independents in Gulf of Mexico for example, confirm that there are opportunities out there for that. The last thing I want to mention is that, we have a number of Phase II projects on business that we won over the last couple of years that are coming up at the end this year and into early next year. Phase II projects on Shell Perdido in the Gulf of Mexico, BC-10 in Brazil, BP at Atlantis, Petrobras, Chinook and Cascade. A number of Phase II projects that would likely hit in early 2010. So you put all that together and that’s somewhat encouraging that the subsea business is out there, if it materializes in the first half of next year, despite some of the movement to the right of the major subsea projects.

My final question is related to Petrobras, it’s a two part question. Number one, how should we as analysts think about and handicap what Petrobras is doing in trying to negotiate down I guess the price of the frame agreements to the lowest common denominator. Two, what do you make of some of the chatter out of Brazil recently, only talking maybe 10 wells per SPSO?

First of all with regard the process of Petrobras on their frame. This is, at in our experience very normal. They open up the bids and then there’s a conversation, there’s negotiation. What we’re observing is a very normal process and we expect it to proceed. If your question is how unusual what do we make of it, it looks normal to us. This is the process, and we’re pretty experienced to working through it. So we have confidence that we’ll be successful in working through it. The negotiation process if you will looks very normal to us. Secondly, with regard to the 2/P, way too early I know that report came out it’s way too early. They haven’t even finished the well test to start making claims about the production levels or different what they assume, I think it’s way too early.

Your next question comes from Dan Boyd - Goldman Sachs.

Given your comments for weaker orders, sort of a lull period in the back half this year, but things picking up in early 2010, can you comment on the potential for you to keep subsea revenues flat at close to the $3 billion run rate for 2010.

Well, it’s going to be a challenge. I mean, it kind of depends when the orders come in. If quite frankly, if they don’t come in by the first quarter of 2010, we’ll know that we can’t keep sales in 2010 flat with 2009.

That is a book-to-bill of at least one, is what you’d be looking at there. Something in the $700 million range per quarter minimum to keep 2010 flat?

Yes. Yes as we’re running roughly 500 right now.

Can you also just comment on, I assume that you are benefiting currently from higher pricing that you had in the early part of 2008, back half of 2007, that’s rolling through the income statement. You addressed this somewhat earlier, but what should we think about margins in a flat to potentially down subsea revenue scenario for 2010 given that you’ll be likely working from a lower pricing scenario, even given all the price concession was your vendors?

Let me give you kind of where we are today. We call our margin and backlog, and it’s basically flat from the first quarter to the second quarter. So, the pricing of orders that we’re receiving this year is about equivalent on the margin basis to what we’ve had. It all depends on how much pricing pressure there is and how much competition there is out there for new projects.

Do you think the pricing concessions are behind us? Do you think there’s more pricing pressure to come as we have a further six month period where there are limited orders?

It always seems like there’s pricing pressures. I’d like to say it, we think it’s going to subside, but as you can see in this quarter our costs are getting lower. We’re getting better at execution. By the way, this isn’t necessarily steel cost driven. I want to make that point. Our lower costs are primarily a function of better execution by our operations and by our subcontractors.

Your next question comes from Bill Herbert - Simmons & Company. Bill Herbert - Simmons & Company : Pete and John, just getting back to the customer outlook and dialogue with regard to project sanctioning, if you go back and look at where Block 31 was sanctioned by BP, assuming $65 crude last year on peak oil field cost deflation yielded 12.5% internal rate of return. Obviously, with significant steel cost deflation and Oilfield deflation, those returns at an equivalent oil price have improved. What do you think is the new threshold as you talk to clients with regard to oil prices that yield a project being sanctioned for ultra deepwater today?

It’s a difficult question, but in my mind it’s still in the $60 to $70 range. I think you made the point of costs coming down significantly and I think the SPSO costs and drilling costs may not have come down so much, but the number of items that they are making significant savings on. Bill Herbert - Simmons & Company: Okay, so in other words the return requirement has probably been elevated, because return clearly in $60 to $70 oil would be improved today relative to what would have probably been the case if you looked in cost in kind of mid 2008, which was the case with BP on 31, right?

Yes. Bill Herbert - Simmons & Company: Okay. Secondly, with respect to Petrobras, Bill an accounting question. My understanding is that these frame agreements incorporate a 70% guaranteed minimum. So would that allow you to book as orders 70% of the second tranche on those trees should you prevail?

Well, we’ll have to read the contract once we get it, but if it is a guarantee that they’ll order, in our case 71 trees we’ll book it all as backlog in the quarter we signed the contract. That would be about $280 million by itself. Bill Herbert - Simmons & Company: Any update with regard to the manifold tender when that’s going to take place? Does that take place after all the subsea tree contracts have been signed, or are we going down parallel past now? What’s the process?

Bill, this is John. Our understanding, it’s going off along a parallel path. As you know, the manifolds are more complex, they’re not as standard as the trees. So the technical review and evaluation would take longer and they’re well into that is our understanding. We understand that actually opening up the bids is expected to happen fairly soon. So it’s happening on a parallel path. I’m sure within Petrobras, they’d like to get the trees settled, but they’re going along at a parallel path. Bill Herbert - Simmons & Company: Last quarter you guys booked four, I think [Rocamadour] and I think at about $18 million to $19 per manifold. Is that the pricing threshold per manifold that we should be thinking about on this looming tender?

I think the price is probably up in the $30 million to $35 million for the manifolds on these, specified for this current tender. Bill Herbert - Simmons & Company: $30 million to $35 million, versus $18 million to $19 million for Rocamadour?

Yes. Bill Herbert - Simmons & Company: Why such a big difference, I mean that’s the question [Multiple Speaker]

Depending on how many wells they want to accommodate in the manifold, so its just what they’ve specified. We’ve had Brazilian manifold as high as $80 million, the highest one we did. They vary in scope and size and just depends what the reservoir requires. Bill Herbert - Simmons & Company: We’re still looking at two tranches of eight and four respectively?

Yes. Bill Herbert - Simmons & Company: Last question, jumping back to outlook and customer dialogue, and the pace of project sanctioning, Peter and John, are you in specific dialogue today with customers that -- I mean, is your expectation of 2010 being a relatively fruitful year for project awards theoretical or is it based on specific dialogue that you’re having today?

No, I think we feel pretty comfortable with that, the dialogue we’re having today on these projects that are slipping to the right. They will be firmed up and proceed and so just a matter of timing. You can appreciate, particularly when you go to some of the more complicated regions offshore West Africa, you have very complicated political negotiations and discussions that take place and then you have partner discussions, its just a long process. West African projects, sometimes our bids can stay valid for six, nine, 12 months in terms of requirements. Sometimes we know that, so we put a price in there that’s a little bit inflated if we have to keep it open for some period of time.

Your next question comes from Brad Handler - Credit Suisse.

Could we just retrace a couple of things a little? As of last quarter, if you had $2.8 billion in subsea backlog, I think you called out for a $1.5 billion of that was related for ‘09 and the balance was ‘10 and beyond. Please confirm that I guess, but can you then describe the same for the current $2.5 billion in backlog, just we have a sense of where the backlogs at?

That was the guidance we gave you at the last conference call. Today we’ll probably turn $1 billion of the $2.5 billion in the remainder of 2009.

How much of the balance after 2010.

The remainder, so that would be a 1.5 billion of the current backlog. We’ll probably consume 1 billion of it in 2009 and a 1.5 billion after 2009. We obviously expect to get new orders that we can book in turn during 2009, so that our subsea sales in total will they’ll approach $3 billion.

[Technical Difficulty]

It’s not all in 2010, but probably 80% of it is.

Could I ask you guys to talk a little more about the cost savings efforts and just a bit of background for the question is, some of the oil field service companies are in the mid to sort of more intense negotiations with their supply chains now that business has settled down in some of their markets like the North American market for example. You all don’t have the same degree of fluctuation I guess as the business, but just curious if there are, as you see the second half of the year are there negotiation which point they to more cost savings for your supply chain and if you could quantify, put some perspective on that for us.

Brad this, is John. You’re right. We’re in negotiation, particularly with our partners, our alliance partners and frame agreement partners; there are lots of discussions going on. Frankly they are pretty positive in the sense that we’re able to sit down together and talk about how can we bring cost down, we talk about steps that we’re taking with the supply chain which I talked about earlier, but also working with our customers toward greater standardization, modifying some of the specs. Because we’re alliance partners we can have those kind of discussions and we can short of work jointly and together to find new ways. Change to specifications, modify some of the approach and practices we’ve taken for the purpose of reducing costs and quite frankly we’ve concluded probably three or four conversations with our partners, and they’ve all been really pretty successful. We’ve been able to reduce their costs through the mean I just mentioned and do it in a way that isn’t all coming from our margin. So, far it’s been successful, but it’s more than just the supply chain or it’s a big part of it a lot of it’s been coming from standardization and modification of specifications.

Your next question comes from Brian Uhlmer - Pritchard Capital.

I have a couple quick questions. Of the $115 million that you said was due to currency, was that all out of energy production systems orders?

The $116 million was actually just subsea. So it would have been Energy Production. The total for Energy Production was $131million, and the total for the company was $136 million.

Okay. That answers my next question. So, on energy processing systems, how do you forecast the order rate for that moving forward in the year since we really talked about that that much?

Bob, you take that.

Yes. We’re seeing a lot of the same kinds of things that we’re seeing in our subsea business. Some of the major projects are moving to the right. Particularly in the larger projects that we deal with in the L&G business in the coal fired power plants. Those things have moved to the right and much like subsea, we think those projects in talking with our customers are still valid and will position us well for a recovery in 2010 as it relates to inbound.

Okay. So, you think you can flat orders throughout the rest of the year or you think slightly down?

A lot depends on the rig count in North America, because as we shared with you in the last call, fluid control represent about one third of our Energy Processing business. Obviously, their order rate will fluctuate almost in sync with rig count. So we’ll have to wait and see how the rig count unfolds to know what impact that’s going to have. The other businesses, the infrastructure businesses are likely flat where we are in second quarter.

As we look out over the next 18 months and orders that are coming in 2010. The big projects that you’re looking, your ability is that you’re going to be able to book those in early 2010 and recognize revenues throughout 2010 as well, or we talking mega projects that are heavily back way towards 2011?

Well, my comments earlier were if we get sufficient orders in the first quarter of 2010, we have a chance to keep subsea sales flat in 2010. Quite frankly, some of those are going to be book in turn. Some of them are going to be larger. As you know, we book on percent complete. So once we start work on a project, we begin to recognize revenues on it.

As we look out, just in your view obviously we’re going down from this, basing our guidance through the second half of the year. What would you see as probably your bottom quarter, Q4 or Q1, 2010 or you have any guidance that?

No. I don’t.

Your next question comes from Joe Hill - Tudor Pickering.

Good morning. I just wanted to touch on something you talked about kind of early on in the call. It was basically the composition of your inbound. So you booked seven trees, but you showed a pretty decent inbound order number for subsea. I’m trying to get a sense as to how sustainable that trend is and kind of what the composition of the non-tree items looks like? Then, it feels like the inbound order number for the back half is going to be down from the second quarter. Given the prospects you have for 2010, how big improvement could 2010 be in terms of magnitude for subsea orders?

Our order rate this year has run about $500 million in subsea orders a quarter. We would anticipate probably, maintaining that for the third and fourth quarter. We could get a large project in the fourth quarter. Just the timing’s a little tricky in term of the order pace, but we’re still very optimistic about subsea as enabling technology for deepwater. The 40% increase in rigs coming out, Petrobras has these marvelous discoveries in the pre-salt. So we might have a little low, but in the long run we are very, very bullish on subsea in terms of a technology and a marketplace to be in, so that is just a matter of timing. The mix of what we do is really, very broad in term of scope. We had a strategy going back since we got in the subsea business to be a broad subsea supplier. We will do anything and everything in and around the seabed for our customers and clients. So some of that tends can be just engineering work that we don’t make a lot of margin. Our strategy is to maintain very strong customer relationships and by doing a lots of things on the seabed for our customers, we have opportunity that to do a lot more things than just being an equipment supplier. So that strategy brings us a lot of revenue opportunities that probably some of our competition can’t necessarily get. We branched out in December of last year. We bought an ROV company, that’s another technology base in and around the seabed. So our strategy is to be the number one subsea player, which we already are and maintain that position and continue to grow our revenue base and technologies in that space.

So Peter, is there a base layer of business that’s non-tree related, that I can kind of assume going forward, and then layer in trees and manifolds and what not on top of that?

Well, with every project, separate from the equipment, every project we do a lot of installation and customer support work. So if you say what is a constant all the time, its probably the activity for us doing offshore work of which is we’re on the rigs supervising on the installation of our equipment, sometimes we run trees on work boats supervising installations. We branched out also into what we call light wall intervention. We have three vessels operating there; again, another service where we’re latching into the subsea well, so that the customer can run wire line into the well to remediate the well and bring it back into production. I think our vision is, whatever we can do in and around the seabed, we’d like to do it. So we just have a very broad base of activity that’s not totally tree dependent anymore. If you look back in our history, we were pretty much, a tree supplier and that’s not true today.

Your next question comes from the line of Kevin Simpson - Miller Tabak.

I just wanted to confirm John, that I guess there’s a buzz because of this upstream article on negotiations of Petrobras. What you’re saying is that your negotiations with them are business as usual. I guess my concern would have been that because with the manifold orders hanging out there, that they would be trying to use some leverage there to up that and in a less than great market, put some margin pressure on you.

The way the negotiations were characterized in upstream was not correct; I’m shocked. I’m sorry; it appears to be pretty normal. Petrobras is obviously very astute, and they’re going to do everything they can to negotiate the prices, but that’s not new. We haven’t seen leveraging of the manifolds on the trees. That’s not really the way the system works. There’s other point that Petrobras obviously wants to leverage, but I don’t think; it doesn’t have to with the manifolds. I think we’ll stay with what we said, and the discussions appear pretty normal at this point.

I guess my other question is twofold on energy processing. One would be I guess margin risk and then margins have held up really well, but it looks like it’s to some degree off of projects that are winding down and obviously we’re still some pretty meaningful near term downside I would guess for WECO/Chiksan. Bill is there a say 300 to 500 bips downside risk for margins in that business over the next second half to into early next year?

Well, we haven’t had a good look at next year yet, but you’re right. WECO/Chiksan, the fluid control has come down significantly, both under pricing pressure and volume pressure.

Is that already reflected in 2Q?

Yes, and going forward for the rest of the year, we’d have maybe just a small additional reduction in fluid control margins, but the rest of the business is probably unlikely to maintain their margins at what they did in the first half and that’s influencing our guidance for the second half.

I mean, I hate to give you a conservative number, because I know you’ll grab it immediately, but is 300 to 500 bips an extreme or is that something you consider reasonable, because whatever you say I’m going to add back.

Actually, I was going to say the low end of that range, but I’m a little bit optimistic on the second half. If you think we’re at the bottom today in the North American rig count, you can feel a lot better about the second half, but we’re not experts in predicting rig count.

Okay, and the other question on that, in the Halliburton’s call they talked about a higher rate of wear on the equipment for the shale plays, and I wondered if you guys were experiencing that in the WECO/Chiksan products.

Yes. We’ve talked about that quite a bit with the shale plays that are active, Hayneville very high rate, Marcellus is certainly coming on strong a bit, but we’re seeing that and we’ve talked about the fact that are field related activity in fluid control has continued to pretty strong. It’s the larger impact orders, CapEx orders that we haven’t seen materially move so far this year. So the field is doing well and that is in-part because of how hard they’re working that equipment.

That base business then, we should assume it could continue?

Yes. I would think it would continue, and I think the way to think about it is, it will pretty much track rig count.

Your next question comes from Joe Gibney - Capital One Southcoast.

Most of my questions are already answered. I just want to circle round; Bill, could you touch base in terms of your back half guidance? Can you set any expectations for what we should be looking for in corporate and other expense? I know the first quarter had a lot of stock based compensation expense and noise. You’ve got a deal with the requisite wrangling on 4-X, but can you set some parameters for kind of what is imbedded in your guidance for the back half of the year as we think about that line item?

Yes. I think you can expect corporate staff to kind of remain at the $9 million level and that’s going to be fairly stable. What we kind of call OID, is an $11 million per quarter for a baseline, but it’s got this foreign exchange wobble if you will. I mean it was plus six last second quarter, it was minus seven in the first quarter. So that will impact the $11 million, but $11 million should be where it centers.

Okay and circling around on the processing side, just following-up with some of the larger questions there. I’m just trying to understand a little bit of essentially what transpired in 2Q that has enabled to hold in as well as it has, and understand the downward trajectory and you can pin down on the bips decline that we might see in the back half of the year. Pricing and volume is down, understood, but what sort of enabled it to hang in there, perhaps better than most expectation in 2Q? Is it just the field replacement component too, the after market mix or just the international side has hung in there well? Just curious what happened in 2Q that has enabled a little bit of resilience, more than I would have thought?

Yes, the first half was certainly, favorably impacted by the quality of the backlog. We entered the year with particularly in our loading systems business for some of the offshore LNG work we’ve now completed, and also in material handling where we have now completed the bulk of that large coal-fired power plant in Southeast Illinois.

Okay, that’s helpful. Last one on the surface side and talk much about surface on the call, you’re implying a little bit of a downward trajectory in the second half, as we roll off some of your backlog on the international side. Is that fair, that direction where we’re heading it’s been resilient in term of order for the last couple of quarters. Just talk about the international North America mix there and your outlook for surface for the back half? Any color would be appreciated.

Yes, you hit it right on the head there. It’s some regional weakness we’ve had on the inbound order rate. Again we’ve entered the year with very favorable backlog in both of our international regions. One of those regions has continued to sustain that backlog level. The other has seen the slowdown in project orders, particularly in the Middle East, which are still out there, but nonetheless the gap has been created and we’ll see the impact of that as we go through the second half of this year.

Okay. Appreciate it. Great quarter, thanks.

Your next question comes from Michael LaMotte - JP Morgan.

I wanted to follow-up on the backlog question really, I guess one of the inbound questions in terms of the composition. Peter if I’m hearing you correctly, if we think about thing like Light Well Intervention, to the extent that you have visibility of work and forward contracts, is that showing up in the subsea backlog as well? I mean, if you book three month of work, September through November, is that going to show up in orders and backlog?

Michael, its Bill. Most of the backlog associated with Light Well Intervention was booked years ago when we entered into these long term contracts. Those orders have been in backlog and those orders are not for the full utilization capability of the Light Well Intervention stack. The base maybe loaded with Statoil, but if they’re going to do an additional operation or some additional work, that will come through backlog, but that’s not terribly significant in term of volume. Each stack is probably $15 million to $20 million a year, and that includes some of the orders that have already been booked.

So the way you think of that, again a strong order quarter with seven trees is that it’s still product, it’s just non-tree product, correct?

Yes, right.

Okay, all right. Then in term of the margin flow through, again Light Well being a relatively small revenue number at this point, I imagine it’s a pretty high margin service. It’s not having that upward lift on margins to a noticeably degree yet, is it?

Well, it’s so small, it’s not a huge impact, but it does have margins that are higher than the average energy production system segment, yes.

Your next question comes from Stephen Gengaro - Jefferies & Co. Stephen Gengaro - Jefferies & Co.: Just one follow-up on the Energy Processing side; when you look at the different pieces of that business, is there a big difference in the underlying margin between the energy side and the other businesses?

I’m sorry, between the energy side and the other businesses? Stephen Gengaro - Jefferies & Co.: Yes, between the loading and material handling side and the WECO/Chiksan business on the Energy Processing size. Is there a big difference in margins where if one deteriorates faster than the other you’ll see a bigger impact?

Well frankly, there used to be, but there’s been a lot of volume and pricing pressure. So there isn’t as much difference between the various businesses as there used to be. Stephen Gengaro - Jefferies & Co.: Okay and then just as a second question on the share repurchase side. Can you give us kind of an update on where you stand there and how aggressive you may or may not be?

Well, we bought back I think $52 million in the quarter and I think $43 million in the first quarter. You’ll probably see that level of repurchase continue. We’re still pretty positive about the stock price where it is and we’re trying to be a little bit opportunistic. Stephen Gengaro - Jefferies & Co.: Along those lines, do you have any updated views on consolidation, the subsea space that you’re willing to share?

No. I mean obviously we’re always looking at potential niches that we can add into our portfolio, but any large consolidation in our space would be difficult given the players and the owners.

Your final question comes from Geoff Kieburtz - Weeden.

I’m sorry to disappoint. My question has been answered.

There are no further questions at this time. Are there any closing remarks?

Yes operator, thank you. This concludes our second quarter conference call. A replay of our call will be available on our website beginning at approximately 02:00 pm Eastern Time today. If you have any further questions, please feel free to contact me. Thank you for joining us. Operator, you may end the call.

Once again thank you for your participation. This concludes today’s conference. You may now disconnect.