Good morning, and welcome to the FMC Technologies' Second Quarter 2011 Earnings Release Teleconference. [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 Brad Alexander, Director of Investor Relations. Mr. Alexander, you may begin your conference.

Thank you, Sarah. Good morning, and welcome to FMC Technologies' Second Quarter 2011 Earnings Conference Call. Our news release and financial statements issued yesterday can be found on our website. 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 our outlook 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 SEC filings. I will now turn the call over to John Gremp, FMC Technologies’ President and CEO.

Good morning. Welcome to our second quarter 2011 conference call. With me today are Bill Schumann, our CFO; and Bob Potter, our Executive Vice President. I'll share with you some highlights from the quarter, Bill will provide specifics on our financial performance and outlook for the second half of 2011, and then we'll open up the call for your questions. First, the results for the quarter. Earnings were $0.39 per diluted share. Subsea performance was largely on track as sales increased 16% sequentially with growth expected to continue through the remainder of the year. However, overall Energy Production performance was negatively impacted as our Surface Wellhead business continued to experience execution issues. Energy Processing continued to perform at record levels during the quarter as Fluid Control benefited from the strength of the North America pressure pumping market. We recorded $1.5 billion in orders during the second quarter, of which $939 million was for the subsea systems and included 20 subsea trees. Subsea backlog now stands at a record level $4.2 billion. Total company revenue was $1.2 billion. Subsea revenue for the quarter was $795 million, reflecting the growth of activity in inbound orders booked over the past several quarters. We expect our subsea sales to reach $3.3 billion for the full year as the conversion of subsea backlog accelerates in the second half of the year. Surface Wellhead revenue was up 13% from the second quarter of 2010, driven by strong North American activity. It fell short of our expectations. The international execution issues we discussed during the first quarter call continued to weigh on our results. We expect international sales to improve in the second half based on orders received in the second quarter, and we also expect execution to improve. Fluid Control delivered record sales and earnings again,…

Thanks, John. Energy Production sales for the second quarter were $968 million, an increase of 18% from last year's second quarter and 13% from the first quarter of 2011. Subsea grew both year-over-year and sequentially. As discussed during last quarter's call, we have a steep revenue growth curve in front of us to reach $3.3 billion in full year subsea revenue. Our second quarter subsea sales of $795 million keep us on course to achieve this target. This is also consistent with the rapid increase in revenue we expected as our projects proceed through the initial engineering phases. Surface sales were above the second quarter of 2010, as North American sales increased, but sequentially, sales were flat. The majority of the issues that impacted the first quarter results continued, including both delayed shipments and unfavorable mix on our international markets. Energy Production generated operating profit of $97 million in the quarter, down to 25% from the prior year quarter, primarily due to lower margins on both subsea projects and surface. Sequentially, profit increased 18% consistent with the increase in subsea revenue. Margins were 10.1% in the quarter. For the full year, we now expect these margins to be between 11.5% and 12.5%. This decline is primarily due to the slower-than-anticipated recovery of our Surface Wellhead business, which has had a greater impact on our full year expectations than we thought last quarter. Additionally in subsea, our project costs in the second quarter were higher than we expected. Both of these businesses should improve in the second half of 2011. Inbound orders in Energy Production were $1.2 billion in the quarter, including subsea orders of $939 million and record orders for our Surface Wellhead business. Backlog now stands at a record $4.5 billion, including a record subsea backlog of $4.2 billion.…

[Operator Instructions] Your first question comes from the line of Joe Hill with Tudor, Pickering and Holt. Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc.: John, Surface Wellhead, operationally, what are you going to change to address the issues you suffered in the second quarter?

Yes, well, thanks for bringing that up, Joe. I mean, the less than expectations on the margins for production were driven largely by Surface. And we mentioned the execution issues in the first call, which resulted in delayed shipments. We made a lot of improvements, and we expect the execution issues to be largely behind us in the second half. The other thing that happened is, and we also mentioned this in the first call, was the timing of new inbound for Surface. We'd expected to get the new inbound in earlier, so we could convert it to revenue and profits earlier this year. We've now received those orders, and if you kind of back out the subsea revenue versus or subsea orders versus production orders, you can see Surface inbound was almost record levels. And so we finally got the inbound, and now our challenge is to convert it to revenue in the balance of the year. So we're pretty confident now that we have the inbound that we can convert it and the Surface performance will improve. The third thing, and we mentioned this also in the first call, is we're ramping up in our North America frac business for Surface, and that includes expenses, training expenses, setting up new bases. And those are largely onetime investments that we're making to support the growth in frac, and those will come down over time as well. So those are the 3 areas of Surface execution that we're pretty confident will improve in the second half. Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay, sounds good. And John, you're still targeting $4 billion in inbounds for subsea for the year. How many second half major awards, say, the $150 million plus type, are you anticipating to hit that number?

Again, good question. We're pretty confident in the $4 billion, but it does depend on at least one or so major awards being made before the end of the year. The other thing is we announced the Shell Prelude project, but we didn't inbound the full amount in the second quarter. So we expect that -- the balance of that to be inbound in the second half. And then of course, we're planning on the smaller projects from our frame agreement partners that contributed so much to the high inbound in the first and second quarter to continue in the third and fourth. Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. So the second quarter inbound number is actually a better number than it appears because you don't have all the Prelude in it?

That's correct. Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. And then finally, you guys had said that frac pump capacity would come on in the third quarter. Obviously, your inbounds in the processing business are fairly dramatic at this point. Can you give us an update on your capacity expansion plans and how they're going in Fluid Control right now?

Yes, we're on schedule. Most of the capacity additions come in on 2012, but we've been able to accelerate, particularly machine tools, which we've already started to receive, and they'll be operational in the second half of the year, which will contribute to our response to growing demand later this year. But let me ask Bob to make a few additional comments on the capacity additions.

Joe, John is right. We have already begun receiving machine tools, some of those are, in fact, already operational, principally devoted to the Well Surface Pump product line. But one thing that we talk about Well Service Pumps a lot, but not to be lost in that is we're also expanding capacity in our Flowline Product line at the same rate. So again, those machine tools that are going into our existing brick-and-mortar are already on the way in. We should see them early in the second half of the year and they will contribute to our full year results.

Your next question comes from the line of Brad Handler with Credit Suisse. Brad Handler - Crédit Suisse AG: Okay, well, maybe we can -- maybe you can update us on a few of those major projects that presumably are part of your confidence outlook on the subsea side. You've mentioned -- maybe I can highlight a couple then steer me to or steer us to some others, but you've mentioned that Stockman remains a possibility for '11, I think, and then I guess, a couple of the Australian LNG projects remain somewhat active. So can you update on your thoughts on those?

Well, as you know, we talked about this almost for the whole year. A lot of the inbound in 2011 occurs at the very end of the year, so there's risk that they slip, in fact, we're seeing some of that. Stockman is right on the cusp. I mean, the bids have been submitted, they're under evaluation. It could be awarded this year or because of its nature, one of the first major gas pump projects, it could slip into early 2012. So that one could go either way. Wheatstone is another big one, the tendering has all been done. They're well through the process, you'd expect that to occur before the end of the year. Still a number, Ichthus [ph] is another one, the bids have been submitted. But then again, this is one that's been delayed in the past. And because it's so close to the end of the year, it could either go into 2011 or slip into 2012. So those are some of the big ones that are still out there that could occur in 2011 but also risk of going into 2012. Brad Handler - Crédit Suisse AG: So that's all helpful. But somehow I think you're trying to signal greater confidence now than you were willing to even very recently. Is it because of other things that are moving then? Or is it more confidence as it relates to one of those or some mix of those falling this year?

Yes, well, the confidence in 2011 is driven in part by we're almost halfway there in the first half of 2011 without -- and the second quarter, I think is representative. We had no, I'll call them a mega award of $300 million, $400 million project, single project that was inbound in the second quarter, yet we almost hit our target of $1 billion. So we're counting -- and if you look at the details of that, it came from very strong aftermarket revenue. It came a lot from smaller awards from our partners. And to the extent that, that continues and it probably will, and then we get the balance of Prelude in the second half, we're really just kind of 1 modest-sized project away from hitting our $4 billion. And if they don't happen at the very end of 2011, it's likely to happen at the very beginning of 2012. So we're pretty much on target for the $4 billion. That's where the confidence comes from for 2011. Now the confidence on 2012 is almost a different matter. If you look at -- because these projects are slipping, some of them have slipped from the end of 2011 into 2012, it really sets 2012 up as a very strong year. If I look at just the number of projects over $100 million, it looks now like maybe there will be 12 to 14 that will be awarded in 2011, which is about the same level we had in 2010. Then you get to 2012 and that number almost doubles. And it's evenly distributed throughout the year, so they're not all bunched up like they were in 2011 at the very end. And that's what gives me confidence in the 2012 number being so strong. Brad Handler - Crédit Suisse AG: That's very helpful color. Could we spend a few minutes on the subsea margin side? I just want to make sure, and forgive me because I've got a couple of calls going on and I was distracted for a couple of minutes there. But does the subsea project margin -- the subsea margin outlook for you within 2011, has that changed or ultimately is the ramp up, as the projects get deeper into them, the same as it was 3 months ago?

No, I think what we've said is that we have the subsea revenue and backlog, it's about conversion. It's about our conversion rate. It's about absorption and leverage. I think in the last call, we said the margins and backlog were as expected, we would say the same is true in the second quarter, that the margins and backlog are pretty much just as we expected. It's the pace at which we convert the backlog to revenue, which we did increase our revenue in the second quarter to make our $3.3 billion in sales in the second half, we've got to convert it at an even faster rate, and that leverage has to take place. But we also experienced in the second quarter some additional cost that we hadn't anticipated, which depressed margins. But I'll ask Bill to make a few more comments on the margin.

Yes, Brad, our gross margin on projects in subsea is kind of right on our forecast and right on our budget. So we think we'll be able to ramp up sales as we progress through these projects in the second half of the year and deliver some pretty attractive margins. In the second quarter, we did have some, I'm not going to characterize them as onetime, but costs that impacted the quarter a little bit more than we anticipated, but really wouldn't have been enough for us to change our guidance. We changed our guidance based on Surface Wellhead performance. Brad Handler - Crédit Suisse AG: Okay, so in other words, you would have caught up or was in the range of catching up in the second half of '11 relative to those performance issues. Just enough absorption would help take care of that and get your margins back. So you're sort of in the same place, is that the right takeaway?

In subsea.

Your next question comes from the line of Rob MacKenzie with FBR Capital Markets. Robert MacKenzie - FBR Capital Markets & Co.: John, can you give us a feeling for how much of your current run rate of orders, how much of your orders in 2Q represented the service and support business?

Rob, it was higher than -- stronger actually than what we experienced in Q1. I think it represents about 25% of our inbound. One of the reasons it was up in the second quarter was we booked some new inbound for our Light Well Intervention services. So that spiked it up a little bit, but it was actually pretty healthy in the second quarter. And the Gulf of Mexico customer support, which we expect to be pretty depressed, wasn't as bad as we thought. So we put all that together and had a real strong quarter for customer support, like I said, about 25% of the total. Robert MacKenzie - FBR Capital Markets & Co.: Do you expect that to continue in the next couple of quarters, a similar ratio?

With the exception of the Light Well Intervention inbound because that all comes in lumps, so we wouldn't expect that again. But yes, I think maybe it even drops down to 20%, but it should be strong. And then we've got the Gulf of Mexico issue. But so I'd say the downside from the 25% would be somehow a deterioration in the Gulf of Mexico aftermarket and the loss of this sort of onetime lumpy Light Well Intervention inbound. So it may take us down to 20%. Robert MacKenzie - FBR Capital Markets & Co.: Okay, great. That's helpful. And coming back to a separate topic, guidance on the process systems margins, I mean, the guidance implicity -- or implies that margins will fall from that here in that business. Is that what you intended to communicate and what would drive that?

Rob, this is Bill. You're right, the average falls. But what happens is the other processing businesses, which if you don't carry as high a margin as Fluid Control, become a larger percent of the total. So it's kind of a mix issue that we're anticipating. We anticipated the same thing at the end of the first quarter, in our first quarter call, but what happened was Fluid Control grew significantly in the quarter. So it's really a mix issue. It's not a deterioration of profitability. Robert MacKenzie - FBR Capital Markets & Co.: But by the same token, Bill, you guys just said that you had a huge inbound for Fluid Control for WECO and the oilfield products, the frac-related products there in this quarter. So why wouldn't that mix continue to improve 2Q to 3Q?

Well, just to give you an idea, the other businesses grew by 18% in the quarter. And I think the Fluid Control business grew by 15%. So we kind of expect that to continue in the second half of the year. And we would expect that the other processing businesses would outgrow Fluid in that time period. Robert MacKenzie - FBR Capital Markets & Co.: Okay, fair enough. And I'll transition back to subsea again a bit, but on the subsea processing. And obviously, you inbounded the Congro-related orders this quarter. Can you give us a feel for kind of what the next 1, 2 or 3 likely inbounds are on the processing front? And as part of that, can you give us an update in terms of any change in timing on the installation of the separation from Marlim?

Right. Well, there's a couple of more projects that could be -- subsea processing projects that could be awarded in the next couple -- well, next 6 months or so. One is in West Africa for Total, another is in the North Sea for Shell. And I don't want to be too explicit about the timing, but those are 2 that would be first up. And then you get into 2012. And the good news, there's about 7 named projects in 2012 and again, they won't all happen and they'll move around. But the sheer list of subsea processing projects that we've talked about before continues to grow, and I'd say they are kind of across the board there. They're extensions of existing processing projects, of subsequent phases. They're brownfield applications, greenfield applications, and pretty much across the spectrum of operators and geography. But the next 2 up are probably with Shell and Total, West Africa and the North Sea. And beyond that, there is a healthy list. Regarding Marlim, we're doing the systems integration test now in the third quarter, and we're scheduled for delivery in the fourth quarter. Robert MacKenzie - FBR Capital Markets & Co.: And that means start-up as well in 4Q?

It should. I mean, that depends on Petrobras' planning. I don't know about that. It'll depend on them when they do the installation, although we know they're anxious to get that in the water. But the delivery schedule is fourth quarter. Robert MacKenzie - FBR Capital Markets & Co.: Okay. I think on your last call, you had mentioned that Petrobras is already contemplating incremental orders for Marlim. Is there any change to the thinking there?

Well, yes, they're very excited about their technology. They're anxious to get it in the water and the potential for this technology is significant for the many fields that Petrobras has. So yes, it's clearly, their expectation that they'll apply this technology in many more wells.

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

It's actually Justin sitting in for Kurt. I just wanted to follow up on Energy Processing. The orders in the quarter, $340 million, were very strong given the constraints from a manufacturing standpoint. So were there orders booked in the quarter ahead of new capacity coming online? Or should we be looking at when new capacity comes online, you should see a ramp in the orders? And then kind of a follow-on to that is has the lead time at all changed between when orders are booked and revenues recognized in Energy Processing?

Justin, this is Bob. Well, first of all, on the lead time question, we're starting to see lead times shorten some as we bring new capacity online. In fact, I think it hasn't been that long ago, we were talking about having sold out most of 2012. Now we're going to enter 2012 with about 40% of the capacity for Well Service Pumps in backlog. So we've begun to extend the capacity like we had intended, and therefore, lead times are shortening somewhat. As far as the order rate is concerned, the service companies haven't yet begun to book their 2012 CapEx plans, but they're close. We expect to see some of the demand for 2012 released by the major service companies later in the third quarter, early fourth quarter.

Got it, okay. And then if I could just expand a little bit more on the prior questions around subsea processing. If we're looking at 7 potential projects for 2012, can you guys elaborate a little bit more on what the mix has been in the past between, out of total subsea processing has contributed, which percentage and how you would expect that to maybe change going forward if processing continues to pick up at this rate?

Well, I don't think we've given those numbers in the past, but to maybe help frame it for you. If you go back 5 years, there was probably 1 subsea processing project every other year. And the average revenue from a subsea processing project is maybe around $100 million. And then if you look at the last couple of years, we've averaged 2, 3, maybe even 4 as they kind of clump together in a particular calendar year, subsea processing projects. So that gets you up to maybe $200 million to $400 million of inbound for the entire industry, and although that's mostly been us. And then you look forward, and now I'm saying there 7 named projects in 2012. They probably won't all happen, they typically move around a lot. But you can get a sense then of how we're going from $100 million every other year to $200 million to $400 million the last couple of years to something much larger than that going forward as the industry adopts this new technology.

Your next question comes from the line of Brian Uhlmer with GHS.

I wanted to kind of hone in a little bit on kind of how you're turning your backlog over. Presumably as you call off awards that you generated in the quarter, do those turn a little bit quicker so that we can see a return to turning it over 25% to 30% of your backlog at any given quarter. As you've trended down this past quarter in both segments, I'm trying to get a handle on how to roll through revenues. Can you help me out with that?

Well, first of all, how we converted the backlog. That's complicated because it varies by project and so forth. But you're on the right track, Brian. If they're are call-offs, they're typically coming from partners, they're coming from where we're already the incumbent, the designs are done. Maybe we're even using our standard designs for some of these call-offs. So the lead time for the conversion from inbound is going to be much shorter. If you take a major EPC contract that includes trees, manifolds, all the infrastructure, which is designed to order, you're talking about a much longer period of time. And conversion is going to be spread over a long period of time, and it won't be even. We've talked about this before, that in the early cycle of a major subsea project, we're mostly doing engineering. And based on our percent complete processed, we're not going to convert a lot in the early cycle. But when that raw material and those expensive components start arriving, then we start moving real quickly up to the conversion curve. And then at the very end while we're doing testing, it starts to slow down again. So that varies by major project, it's a little hard to predict, but you're on the right track. If they're small orders that are call-offs, they're likely to be converted faster than a major EPC project.

So we could presumably see a decent jump in 3Q and then maybe flatten out for a couple of quarters before we have a big ramp in the back half of '12 based on your ordering flows?

Well, I think for the second half of this -- I'll let Bill comment on this, but the second half of 2011 is driven more by the large projects that we inbounded in 2010 than the shorter-cycle projects that we booked more recently.

Yes, I mean, to hit our -- we did almost $1.5 billion in the first half in subsea. And we've got to do about $900 million a quarter in the second half. And we did $795 million in the second quarter. So we think we're on track to get there. But it is a significant increase quarter-over-quarter. We haven't or I haven't been privy to laying out the schedule for 2012, so I don't know what it's going to look like exactly in terms of conversion. But 2011, we think it's going to be a little bit higher each quarter.

Okay. And then rolling into processing, similar obviously backlogs building there. So with the new capacity will start to get the higher percentage churn in 3Q slightly and then back to a more normalized level for your historics in 4Q and on?

Well, in processing, we've got some mix issues. The Well Service Pump is 9 to 12 months in terms of inbound to delivery. Flowline is sometimes 2 weeks, sometimes a month. And then some of the other processing businesses like loading systems have longer lead time conversions. So I think in general, with the growth of the Flowline Product lines and the quick conversions, you're going to see generally faster turns of backlog in Energy Processing. But it's a little tricky because of the different businesses that are in that segment.

Okay, fair enough. And my second question should be a simple one. In general, I know you don't want to get into your frame agreements in too specific details. But in general, are your margins higher for your frame agreements and call-off awards than they are for the mega projects, and is there an order of magnitude or is it fairly close?

Well, the whole pricing environment, Brian, is different because we're coming out of a down cycle and people are rebuilding their backlogs. When you have a big large tender that's being competitively bid and with multiple suppliers as they try to rebuild their backlog then you're going to have competitive pricing intensity associated with that very large award. And so in that situation, then the frame agreements, which are negotiated awards, are probably going to be, the margins are probably going to be a little more favorable. The other thing is usually our frame agreements are based on standardization, a lot of repeatability. Our cost position is a lot better and again, the margins are probably a little bit better for that reason. Now obviously as the market moves in a different direction, then the tendered projects would probably improve in pricing and might start to look more similar to a frame agreement negotiated price. So it kind of depends on the market environment. Right now, we're coming out of the downturn, so I'd say the frame agreement numbers are better and may approach more equal to tendered projects, particularly in 2012 when we definitely expect pricing to improve as all these awards get made in 2012.

The next question comes from the line of Kevin Simpson with Miller Tabak. Kevin Simpson - Miller Tabak + Co., LLC: I guess, 2 questions. One, maybe first for Bill. Are you likely to report kind of a back-end loaded second half or more a 4Q that would be more like you used to show materially above the 3Q, say, several years ago? Or is it going to be more smooth ramp up?

Well, historically, we've always had a big fourth quarter that used to be driven by Fluid Control and subsea. For whatever reason, subsea always had a big fourth quarter. I think the logic on the big fourth quarter for subsea is reflected in our accounting and the fact that our suppliers want to deliver the product to us in their calendar year. And if they deliver inventory to us, we recorded the cost and then include it as progress on our contracts and consequently recognize revenue. And I don't think this year is going to be any different from that. I would expect subsea, which is now a larger part of the total to have a big fourth quarter, and that would drive the whole company to have a big fourth quarter. The flowline business, I think, because of the growth of it, I'm not confident that the fourth quarter is going to be much different than the third quarter. We're kind of flat out, and our customers are pretty flat out, I think, in that business. But I think it'll be driven by subsea, and I think you're right, fourth quarter will be larger than the third quarter. Kevin Simpson - Miller Tabak + Co., LLC: And processing to some degree, Fluid Control function of adding -- capacity adds as such that you're bring them on.

Yes, it's not -- I don't think we're going to see much of it. Actually, Bob alluded to this, but we're also expanding the flowline capacity. We may see more flowline capacity come on than well service pump capacity by year end. So we could see a little there, but we'll see some of that in the third quarter, too. Kevin Simpson - Miller Tabak + Co., LLC: Okay, and John, the margins in the inbound for 2Q and maybe -- is the trend somewhat towards improvement versus say 1Q or even more important, I guess, from what you booked last year? Or is it hard to tell with the mix that's coming in?

Well, the margins that we booked in the second quarter were mostly driven, as I said earlier, by our frame agreement, so they looked more like Q1, which, as Bill pointed out, were at our expectations. I think that where we're really going to see the margin change and the pricing change is on some of these very, very large projects that are in the process of being tendered. That's what we need to watch as those get awarded, what's the pricing level of those. So the margins that we put in backlog in the second quarter looked a lot like Q1, and that was driven by our negotiated prices with our frame agreement partners. Kevin Simpson - Miller Tabak + Co., LLC: Okay. And then one other kind of follow-up. Beyond the big name projects that are going to go on either side of year end, I guess, you sound pretty bullish on next year, in general, on order flow after what's going to be another big year this year and a big year last year. Are you, John, assuming that later next year, you get more -- I guess, 2 markets, pre-salt type orders from Petrobras or the other being finally some a step up in Nigeria business, which I guess has lagged for political reasons?

Well, I think you're right. When you look at 2012, one of the reasons it'll make it such a strong year for subsea awards for the industry is that the expectation that there will be some big numbers for Brazil. As you know, Brazil had their multiyear contracts for their conventional equipment in 2010. We believe that it's time now for Petrobras to award some more trees for pre-salt. We've heard from Petrobras that they're considering more multiyear contracts, aggregating the requirements for both conventional and pre-salt. The numbers that we're hearing about are very large so the combination of Petrobras needing to get some more trees on order for pre-salt and this conversation about aggregating the requirements in multiyear contracts, if that were to get achieved in 2012, that would certainly contribute to 2012 being a very strong year. And then the same is true with Nigeria. We know we've got a big project in Ghana [ph], Erha and so forth. And these projects, which again are largely absent in 2010 and '11 would show up in 2012. And they would contribute to the strong 2012 numbers. So you're right. I think between Brazil and Nigeria, and even some more projects in Angola, for that matter, would definitely contribute to the strong 2012 versus 2011.

Your next question comes from the line of Collin Gerry with Raymond James. Collin Gerry - Raymond James & Associates, Inc.: Most of mine have been answered. I guess I'm going to beat the dead horse here on margins a little bit. If I just do the arithmetic, it sounds to me like that the 11.5% to 12.5% guidance for the production side implies kind of a back half exit rate in the 13% to 14.5% range, so obviously a pretty big bounce from where we are. I guess, just 2 questions are mechanical or practically, are the big changes mix or kind of the pick up off the bottom like in the surface side that you mentioned? And also what is the big difference between the bottom and -- the low end and the high end of that in terms of achieving those?

This is John. The difference between the high end and the low end is going to come for Energy Production is going to come from execution. We've got the backlog. We need to convert it, the pace at which we convert it, converting it without execution issues and higher costs, which are going to drive the margin, and that includes surface. Because surface, our international business in surface is also a longer-cycle business. They have the revenue and backlog. They just need to convert it, and we need to convert it without execution issues. That'll be the difference between the ranges on Energy Production. Collin Gerry - Raymond James & Associates, Inc.: Okay. So just a little bit more on the surface side. I want to ask in terms of these execution issues, maybe we could get some more specifics in terms of what maybe -- you didn't want to call them onetime costs, but maybe what those were. And kind of what were the execution issues? Was it supply chain-related issues? Was it staffing? Maybe just a little bit more granularity there if possible.

Well, I think Bill talked about the 2 big issues. First of all, it was the lack of orders in the first half of the year, internationally, which really caused us some absorption projects in the international locations. And then secondly and not to be underestimated is the investment we're making in North America to fuel the growth. I mean, Bill talked about new facilities. He talked about training. He didn't touch on the number of people we're hiring. We're adding significant numbers of people to our service training and apprentice programs, all of which are designed to support the growth that we expect to continue to see in North America. Those are the big items.

Your final question comes from the line of Brad Handler with Credit Suisse. Brad Handler - Crédit Suisse AG: I think a couple of us have been dancing around the question, but I thought I'd ask it just directly. Does anything that's happened in the second quarter in the subsea business presumably, or for that matter, I guess, Surface can contribute, but is it impacting your initial thoughts about where 2012 margins in Production Systems may be headed?

No, not at all. I think, as I said, when you look at 2012, it's going to be a very strong year for subsea awards. And we fully expect pricing to improve. The timing on whether it improves, obviously, is tricky to predict. But we see pricing improving in 2012 after the initial tranche of major awards are made, which would improve margins. I think, on the subsea side, where our ability to execute is getting better and better, and because we have the backlog, our organization is intact. It's prepared for the growth. And I'm very confident that our execution in subsea will only improve, plus we have the advantage because we'll be going in 2012 presumably with higher backlog. We'll be in a position to convert that backlog at revenue levels that should allow us more leverage in 2012 than what we saw in 2011, and that'll contribute to better margins. On the surface side, I think, as we pointed out, a lot of it is timing. We've now got the awards and backlog and we'll be converting that. And the execution, which have delayed some shipments and increased cost, those are largely going to be behind us in the second half of this year. So no, I think 2012 is set up for good execution and not a continuation of what we had experienced this year. Brad Handler - Crédit Suisse AG: Okay. Let me ask the question a little bit differently, if I may, John. I think there was a line of argument that said that in 2011, much of the work you were going to recognize was based on frame agreements or your partners, and therefore might be of a higher margin, whereas in 2012, it may have been based to a greater degree on more competitively bid work, which as you mentioned earlier in the current environment could have come at more price competitive and thus a lower margin. So there, I think, were some concern that you might have a negative mix in your subsea business, which could push margins lower next year. I don't really hear that in your comments today, but I guess, can you be explicit? Is that an incorrect line of thinking?

Yes, it is incorrect for couple of reasons. One is the business and the number of frame agreements we have, it keeps increasing. And in 2012, as the industry awards grow, they will be with our partners. And so we'd expect our growth in 2012 and our market share in this strong 2012 environment to reflect what it's reflected in the past, and that is good share driven by our frame agreement and frame agreement partners, not necessarily being successful on these competitively intense major projects that are out there. The good thing about having our backlog rebuilt, we can sort of navigate through this period of these first major awards being issued in a strategic and selective fashion in an effort to keep our margins where we want them to be. So no, I'm very confident in 2012, even as the market grows and some of these major projects that are tendered, we're in an extremely good position to navigate through that for the purpose of maintaining and improving our margins. Brad Handler - Crédit Suisse AG: Very helpful. I'll follow on one more if you'll indulge me. So if we, for modeling purposes, then thought about 2012 subsea margins relative to the second half of 2011, are you suggesting that they might be stronger than even the second half of '11 margins?

No, it's all going to depend on the mix that's in backlog. And so we've got to see what we win and what we don't win. And we've got to see how the market responds, particularly in this initial period when these major awards are let. We haven't seen a lot of the pricing yet, so we don't know how just competitively intense it'll be. And the projects margins that we put in backlog and what their margins are really have yet to be seen. Do I believe that we'll have more leverage in 2012 than 2011 because we are growing [ph]? Yes, but beyond that, I think that we need to see that the complexion of our backlog going into 2012 before we comment on margins.

This concludes our second quarter conference call. A replay of our call will be available on our website beginning at approximately 2 p.m. Eastern Time today. We will conduct our third quarter 2011 conference call on October 26 at 9 a.m. Eastern Time. If you have any further questions, please feel free to contact me. Thank you for joining us. Operator, you may end the call.