Good day, ladies and gentlemen, and welcome to the Halliburton Third Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Kelly Youngblood. Sir, you may begin.

Thank you. Good morning, and welcome to the Halliburton Third Quarter 2012 Conference Call. Today's call is being webcast and a replay will be available on Halliburton's website for 7 days. The press release announcing the third quarter results is also available on Halliburton website. Joining me today are Dave Lesar, CEO; Mark McCollum, CFO; and Tim Probert, President, Strategy and Corporate Development. Jeff Miller, our new COO, will not be a speaker today, but will be a key participant on future calls and investor events going forward. I would like to remind our audience that some of today's comments may include forward-looking statements, reflecting Halliburton's views about future events and their potential impact on performance. These matters involve risk and uncertainties that could impact operations and financial results and cause our actual results to materially differ from our forward-looking statements. These risks are discussed in Halliburton's Form 10-K for the year ended December 31, 2011, Form 10-Q for the quarter ended June 30, 2012, and recent current reports on Form 8-K. Our comments include non-GAAP financial measures. Reconciliation to the most directly comparable GAAP financial measures is included in the press release announcing the third quarter results, which, as I have mentioned, can be found on our website. During the quarter, we recorded a $48 million charge, which amounts to $30 million after tax, or $0.03 per diluted share, related to an earnout adjustment due to significantly better-than-expected performance of our Global Oilfield Services' Artificial Lift acquisition. These charges are reflected in our North America and Latin America Completion and Production segment results. Additionally, we recorded a $20 million gain, which amounts to $13 million after tax, or $0.01 per diluted share, related to a recent patent infringement settlement that is reflected in our Corporate and Other expense. As a reminder, our third quarter 2011 results included an asset impairment charge of $25 million, or $19 million after tax, in our Europe/Africa/CIS region. In our discussion today, we will be excluding the impact of these items on our financial results. Also, for better comparability when discussing year-over-year rig activity, we will be excluding Iraq as certain historical data is not available. We will welcome questions after we complete our prepared remarks. [Operator Instructions] Now I'll turn the call over to Dave.

Thank you, Kelly, and good morning to everyone. Let me begin with a summary of our overall results for the quarter. Total revenue of $7.1 billion was down 2% sequentially, driven by a 5% reduction in our North America revenues. Our international revenue was up 2% this quarter compared to a 2% rig count decline as a result of solid sequential growth in our Latin America, Middle East and Asia regions, where both had revenue records. Our Drilling and Evaluation division also posted record revenue in the quarter. From a product service line perspective, we had record revenues this quarter for Boots & Coots, Wireline and Perforating, Consulting and Project Management and Baroid, which also had a record quarter from operating income. Operating income of $982 million decreased 18% sequentially, primarily due to pricing pressures and guar costs in our North America Production Enhancement business. International operating income was up 5%, and we are very pleased with the continued strengthening of our market position in key international geographies and product lines where we envision continued growth in the coming years. We believe our strategy is playing out as planned as evidenced by solid activity improvements this quarter in key geographies, such as Mexico, Brazil, Russia, Malaysia and Australia. We continue to be very optimistic about our Latin America business, where we posted another excellent quarter. Revenue was up 8% sequentially despite a 5% drop in the rig count. Operating income increased 12% sequentially, led by solid performance in Mexico and Brazil. We saw a significant ramp-up in unconventional activity across all of Latin America during the quarter as we won new work with IOCs and independents in Brazil, Colombia and Argentina, where we recently completed the country's first microseismic analysis. In Mexico, we continue to introduce new unconventional completions techniques…

Thanks, David. Good morning, everyone. Our revenue in the third quarter was $7.1 billion, down 2% sequentially from the second quarter. Total operating income for the third quarter was $982 million, down 18% sequentially, after normalizing for the acquisition-related charge and litigation settlement gain this quarter. North America revenue and operating income decreased 5% and 30%, respectively, compared to the previous quarter with margins coming in slightly above 15%. As Dave mentioned, the lower U.S. land rig count, hydraulic fracturing pricing pressure and guar cost inflation were the most significant drivers, combined with lower customer activity and the impact of Hurricane Isaac. Canada had sequential improvement but the rebound from spring breakup was significantly less than we've seen historically. In North America, we typically expect to see a drop in activity in margins due to holiday downtime and winter seasonality as we move from the third quarter to the fourth quarter. This year, we're anticipating this sequential decline will be exacerbated by widespread activity reductions across the U.S. land market as a number of our customers work to maintain spending levels within their 2012 budgets. These activity reductions, along with the additional pricing pressure related to contract renewals, will most likely result in lower revenues and incrementally lower margins in the fourth quarter. For international, we expect the usual sequential improvement in the fourth quarter, driven by landmark software sales, increased completion tool deliveries and end-of-year equipment sales. Typically, international revenues have increased on a percentage basis by low single digits from the third quarter to the fourth quarter, carrying higher margins as a result of these year-end activities. Similarly, we would then expect to see a sequential decline in international revenues and margins in the first quarter of 2013 as these activities subside, coupled with weather-related seasonality. Now looking…

Thanks, Mark, and good morning, everyone. I'm going to provide a bit more color on Dave's comments regarding factors impacting our return to prior activity levels and normalized margins in North America. First the impact of guar. As discussed previously, the rising cost of guar resulted in a headwind of approximately 600 basis points in our North America business in the third quarter. The current crop is anticipated to be 25% to 50% larger than last year, and we foresee a significant improvement in guar costs in 2013 and a restorative tailwind to margins, notwithstanding the fourth quarter activity challenges Dave described earlier. We've seen rapid adoption of PermStim, one of the game-changing technologies Dave mentioned, which is our high-performance guar replacement. PermStim not only provides an economic alternative to guar, but also provides a vastly improved post-frac cleanup, enabling better flow rates and production when compared with guar systems. On the same Williston pad, for example, production was 20% higher, 150 days post frac, compared with a similar well frac with a guar-based fluid system. In terms of economics, PermStim is highly competitive with guar at current prices, and we believe will offer us a compelling alternative in the event of future guar cost escalation. The second key factor is customer spending. Our customers have reined in their spending in the back half of the year, resulting in a decline of 172 rigs since the beginning of the year. Spending reductions have been more concentrated in large-cap public companies since the end of the second quarter. And as Dave discussed, this group of customers are indicating to us a return to historical levels of activity in the first quarter as 2013 budgets get underway. Thirdly, a more favorable balance in the terms of horsepower supply and demand. Some industry…

Thank you, Tim. Let me just quickly summarize. We're very proud of our third quarter international results. We continue to gain market share in key markets and expect our Eastern Hemisphere margins to be in the upper teens as we exit the year and are optimistic about continued improvement in 2013. In North America, we will not chase the transnational market as we would typically have done but will instead idle our equipment. And overall, we remain very laser-focused on providing industry-leading returns. So we will reduce capital spending as we go into 2013. But our strategy remains intact. We are focused on maintaining our leadership position in North America, continuing to strengthen international margins and grow our market share in deepwater, unconventionals and underserved international markets. So let's open it up for questions at this point.

[Operator Instructions] Our first question comes from Brad Handler of Jefferies & Company. Brad Handler - Jefferies & Company, Inc., Research Division: I guess in light of going first, let me try to just make sure I understand some of what you're trying to guide us to. First, maybe a clarification of what you consider to be normalized margins in the U.S. If we're working towards that, how would you think about 2013 evolving? I recognize, of course, in that there are elements to the revenue side you don't see, but let's just -- if you could clarify the normalized margin comment, that would be helpful.

Well, without giving -- trying to give specific guidance as to when this might happen because that's not what we're doing, we continue to hold that we think normalized margins are in the mid-20s that's -- as we look at the business historically and sort of a balanced market, balanced cost structure, that those mid-20s margins seem to be appropriate to us and that's what we're targeting internally to drive our business forward. Brad Handler - Jefferies & Company, Inc., Research Division: Okay. It makes sense. And the follow-up in the same vein, maybe it's a bit more fourth quarter focused, you all helped us in saying, okay, traditionally, internationally now, you see a modest, what did you say, low-single-digit revenue increase. I actually thought it might have been higher traditionally and then some margin increase. Are you suggesting that from what you can see, the fourth quarter of '12 would be a traditional year? In other words, is that what you're encouraging us to think about for the fourth quarter in non-North America? Or there are some elements that change that?

Well, no. I think the way that we're looking at it right now and based on our forecast, we're seeing it as a fairly traditional year maybe with a slight bias to the lower end. I mean, obviously, some of the macro headwinds that Dave discussed have continued to be out there. We're watching them very carefully. There seem to be more headwinds than tailwinds in the broad market itself. But as our business is performing and particularly with regard to the share gains that we've had as some of those contracts come in, we think that those things, coupled together, will allow us to post a revenue gain that's in line with what we have traditionally seen. Does that make sense? Brad Handler - Jefferies & Company, Inc., Research Division: It does.

In other words, that the broad market may not be up. But with regard to our revenues, because of our share gains, we think that it will look fairly typical.

Our next question comes from Jim Wicklund [ph] of Crédit Suisse.

A question. I understand that CapEx being down in 2013 because the current overcapacity in U.S. pressure pumping. But you make comments about unconventional work in China and Australia and, of course, the big deepwater projects that you won and that you're changing. Is CapEx going to continue to be a high number? I mean, are we going to have to continue to invest in this market at the levels close to what we've seen this year? Do we have enough capacity for the international shale boom and the deepwater boom?

Well, I mean, part of the reason we didn't give specific guidance, Jim, is because it’s something that we're working on. We got to have input from our customers as to what the -- not only the amount, but the timing of their capital spending will be. But -- and I think the other sort of data point to always consider is that we don't build speculative capital. So as we address our capital budget for next year, I mean, I think it is fair to say that there are going to be capital being placed in international markets around unconventionals, around some of the deepwater markets to -- for us to be able to satisfy what our customers are doing on the share wins that we've got and on the projects that we -- they will be doing. We're -- as Dave said, we are focused like lasers on returns right now. We're going to be trying to drive that as carefully as we possibly can. But we do continue to be encouraged about the pace of the development in international and deepwater and unconventionals. The industry as a whole is undercapitalized. I think it's fair to say particularly around unconventionals, we're undercapitalized. And we're going to continue to be working to try to make sure that we have assets on the ground to do that work on a realtime basis.

Okay. And the second follow-up, if I could. The international strategic initiative that you talk about, better delivery of technology, closer to supply bases, can you kind of give us a more layman's term as to what it is you're doing to accomplish this? I mean, what the $32 million this quarter was actually spent on so we can better understand what that is?

There are several different initiatives, Jim, that we're working on. One is we've been completing a fairly significant manufacturing plant in Singapore for our Completion Tools product service line. Our Completion Tools product service line management now resides in Singapore. We're operating that business internationally. And so that's been a fairly significant change and it also, because of the way that we procure, has required subsistent changes to back that up. Secondarily, we still are continuing to work on a project we internally call Battle Red that is associated with our Frac of the Future initiative but really is designed to look at our back office operations, the ordering cash process, the use of mobility, mobile technologies in the field itself to allow our business development, our operations people to be better connected, to move our paper flows more -- to expedite that flow so that we can build faster, be more responsive to customer changes when their -- when work moves as it always does. And that's a fairly significant rollout that requires some changes to SAP, some reorientation of our business support centers. And that change will probably be sort of come to full fruition in the middle part of next year but something that we're spending some ongoing cost around. We're pretty excited about the opportunities that it will hold to reduce our working capital in terms of day sales outstanding and to allow us to improve our service quality as we work with customers. And then the final step really is around other changes that we see, particularly in our Drilling and Evaluation business orients to be more international. We are taking steps with our legal entity organization and other things to be able to expedite that work. And a lot of that relates to moving IP and other things offshore that allows to better utilize that in some of our foreign jurisdictions.

Our next question comes from James West of Barclays.

If I could shift back to North America quickly here. Tim you went into some detail, but I want to make sure I caught everything correctly. In your discussions with your customer base, who admittingly is being very disciplined right now and living within their stated 2012 CapEx budgets, as you talked to them about '13, it sounds like they all plan to get back to where they were kind of starting 2012, which is 175 rigs or so higher. Was that -- am I correct to have assumption? And is that what your customers are kind of implying to you at this point?

I think a couple of points, James. I think -- number one, I think the rate of drilling efficiency in the second half of the year have probably exceeded expectations. And as a result of that, we've seen essentially this construct of many companies essentially running at a budget as we glide in towards the end of the year. And I think as Dave mentioned as well, the combination of that fact plus it's really easy take a little extra time around holiday period as we've seen in past cycles. That, clearly, is contributing to the slowdown. I think the indications we are getting clearly is that we will see that increase as we get into 2013. I don't think we're naïve enough to think that it happens on -- in the first week of January because it won't. So it will be a spaced event as we go through the first quarter. And that's the best year that we have at the moment.

Okay. And then just a follow-up specifically to pressure pumping, and kind of the pricing dynamics today is market pricing. I understand that you're still rolling over to kind of your new pricing on your contracts, which is still, I believe, at a premium to the market price. Is the market price still going down at this point? Or have we started to stabilize?

I think that's pretty basin specific. When you sort of break things out a little bit, I mean, if you just kind of look at, say, the Permian, the Eagle Ford and the Bakken together, those 3 basins now represent about 50% of the total rig count in the U.S. And you look at the Marcellus, the Barnett, the Haynesville, they're only about 10% of the total rig count today and down about 50% since the beginning of the year. So you can see where the greatest pressures come from that. It's not to say that any basin is immune right now, but basin by basin, there are different pressures. Dry gas, the rig count declines have stabilized there in fact. Wet gas is still coming down and so if you kind of look at the wet gas, dry gas and liquids, the former are the most impacted. So I think I would say that we're starting to see some signs of a bottom. As Dave mentioned, the best sign that you ever see is when you see people, smaller firms operating at EBITDA breakeven. We've certainly seen some indications of that. That usually is the best indicator that pricing is starting to stabilize. And I think you'll gather more information on that over the coming week or so in terms of whether or not that thesis continues from last quarter to this quarter.

Our next question comes from Waqar Syed of Goldman Sachs.

I just wanted to shift from rig count to more to a well count level as you mentioned that rigs are becoming more efficient. So maybe it's probably more useful to be focusing on well count now. As you focus on that, on the horizontal well count, how do you see that progressing in the first half of next year versus the second half of this year?

When we sort of look at the overall sort of rig contracting picture, I mean, clearly, there are a lot of mechanical and SCR rigs that are getting sort of dropped and put on the sideline. The efficiency gains have been quite substantial during the course of this year, but not just in terms of drilling times but also in terms of move times as well. And that, obviously, contributions to, as you mentioned, the higher well count. We've also seen, I think, an increase in the wells and inventory. Dave touched on that a little bit earlier. So it's a little hard to triangulate exactly what the picture looks like at this moment. But I don't see any change next year in terms of the drive towards drilling efficiency. I think the biggest gains have probably been realized. But we're a very innovative industry and we'll keep pushing for -- to reduce days to debt. So as we get back into next year, I think we'd kind of start where we left off and then we'll continue to see incremental gains that are arguably not quite as significant as we saw this year.

And then secondly on service intensity, do you see service intensity still increasing? Or has it now become kind of leveled off or even falling as we look forward in 2013?

Yes, I think we do see service intensity increasing. As we've said a couple of times, the first battle here has been all around service efficiency. I feel that as a company, we've got that well positioned and as a -- from the example I was giving you regarding our new pumping systems some significant benefits. They are not just in terms of operating cost but in terms of capital deployment, too, which is very important to us. But the next inning really is all about subsurface efficiency. It's about making better wells. And we've been in a scramble as an industry to get work done for a couple of years. Now it's about applying the science to the subsurface, making better wells and becoming a lot more efficient not just in the oily basins, but in the gassy basins too.

Just a follow-up on that, I mean, I think as we look ahead, we're not trying to build our plan just around service intensity growth and sort of relying on that. As Dave said, we think that the ultimate differentiator is going to be those guys that can be the lowest cost service provider. So we're very, very keenly focused on reducing our footprint, our operating cost, bringing down our internal cost so that ultimately, our realization on a per stage or per well goes up regardless of what happens on the service intensity side.

So to that point, the Frac of the Future, where are you in that the implementation phase? And when do we start to see the benefits of the lower cost?

We're in the rollout phase today. And obviously, we have a large existing fleet. And so we have to implement enough Frac of the Future fleets to ensure that we sort of impact the overall balance. So we'll start to see some impacts during 2013. The bulk of the impacts though probably will be more felt in 2014.

We do have some of the Frac of the Future fleets that are out there operating, and the early results are quite dramatic. We've got -- we were very pleased.

Our next question comes from David Anderson of JPMorgan.

So we've been hearing a lot of talk about E&Ps using up their 2012 CapEx budgets and I guess on the one hand, I guess there's a first for everything. But it's pretty unusual, considering these guys are cash flow driven and WTI is above $90. So I'm just wondering. It seems to take a lot of the weaker activity levels. It's really about looking to drive down cost through lower service pricing. Now obviously, in mind, Dave you just made a pretty big change there in your strategies and you're not seeking full utilization anymore. So should I be reading this? Or should we be reading this as basically you guys drawing a line in the sand and saying this is as far as we're going to go on pricing and we're not going to the devalue our services anymore compared to one-dimensional players?

I guess that's a great way to summarize it, Dave. As I indicated, one of the lessons we learned coming out of the last dip is that chasing the transactional market essentially sets the lowest common denominator for pricing. And it's that point that you have to then battle uphill on getting prices increases out of. And so our view is that, that is a relatively transitory market for us to chase into given the percentage of 24-hour crews we have. Therefore, we are not going to chase into it this time. We're not going to lower our prices to get that work, therefore, giving us a higher baseline to move forward when some of these other issues get out of the way. So yes, that is a strategy change and one that ultimately, I think, will be successful and it's just a lesson that we learned from the past.

Okay. Now you're talking about transitory weakness in North America and it's going to last only a few quarters. What are some of the signs or at least what are some of the drivers that you're looking for? I mean, are you kind of looking at kind of 3 or 4 things talking about pressure pumping fleet attrition, you talked kind of some of the laying down, but do you need to see industry attrition levels, higher? Is it improvement of national gas rig count? Is it E&P cost coming down? Or is it kind of these emerging basins absorbing capacity? What do you think are kind of the couple of the key drivers? Or at least a couple of the signs that you're going to -- that you're pointing towards?

David, remember that about 80% to 85% of our fleet is contracted, right? So the key thing that we're looking for is customer budgets, an announcement that they're getting back to work. As we're looking we think about this transitory issue, we're talking about in Q4, they use up their budget and they're basically taking time off to coast into the end of the year. And so the key thing we'll be looking for is when are they are going to be starting backup and when could we get our crews back to work? And that takes up a -- the vast majority of the issue around what we're looking for. The second thing, obviously, will be then watching the rig count overall as it begins to leak up. As you commented, I think it's not the commodity price. The commodity price environment, particularly on the oil side, has been supportive. And we've seen near -- on an absolute basis a 6% reduction in the U.S. land rig count since the end of June in spite of that. And so that's why this feels so transitory and really budget related. And going into next year, many of the contract rollovers, customers have all suggested at least in their initial indicators that they're going to do want -- they're going to do more work, they’ll be running more rigs and asking for more equipment on our side. And so we feel, on a long-term basis, pretty good about what 2013 might hold.

And when do you start having those conversations? Is that kind of a December conversation for January, is that how we think about it?

Happening now.

Still happening right now.

Our next question comes from Kurt Hallead of RBC Capital Markets.

A question I would have, you guys indicated here that you're able to maybe offset some of the reduction in frac activity by pulling through other services. That seems like a very familiar refrain from other downturns that typically tend to be transitory. Can you talk a little bit about what kind of product launch you're able to pull through and whether or not that pull-through on a go-forward basis is going to be a substantial factor in helping you get back to that normalized margin? Or is that normalized margin one thing -- I’m coming back to what you said earlier, is that primarily just frac utilization? Can you just give us some color around that?

Yes, I think the first comment there probably, Kurt, is around pricing in general. I think just to sort of clarify a little bit. I mean, the pricing issues that we have today are primarily around stimulation. So you saw the D&E results. They were good for North America improvement in margins off the Q. And I think as we've touched on, there is clearly -- anything that directly touches frac may have a little more pressure than those things that don't touch frac. So I think the first point is that there is a real opportunity to pull through elements which do not today have significant pricing pressure. I think that's point number one. And with respect to the pull-through, obviously, anytime that you renegotiate, you're looking for some opportunity to improve your longer-term position. You've heard it from us before. It's something that we tend to focus, on and those product lines typically would be around completions, would be around wireline, would be around coil, just to give a few examples of areas where we would really sort of push to, to try and improve the pull through.

Okay. Let me just add. Kurt, as you're thinking about the normalized margins, as we think about our North America margins or at least our U.S. margins right now, they're not us as far off as I think that the average margin indicates, right? We've described that guar is about 600 basis points of margin impact on us. When you eliminate that, that comes back to us substantially. We're back above 20%. We also think that we probably lost a little under 100 basis points of margin this quarter just on activity and mix as a result of the declining rig count over the course of the quarter. And so it doesn't take that much movement for us to sort of begin to threaten those normalized margins as we've talked about them with some repair on the market.

Great. I was wondering, David, if you can make -- give us an update on how you think things are progressing in Iraq and what you think the outlook is in general for Saudi and Iraq heading out into 2013.

I think first with Saudi, I think it's a good news story. We like our position there. We've had additional rigs added to our south guar project. That one is going very, very well, Manitha [ph] the rig count is up on that project. As I indicated, we've just added a stimulation vessel into the market. We have been assigned a geographic area in Saudi to try to demonstrate that we can make unconventionals work there in some of their tight gas area. So that market is very good for us right now and potentially even better as we go into the next couple of years. Iraq is certainly, for us, a lot better than it was last year, where we were struggling with some contracts. We are getting through those at this point in time. And as I indicated and Mark indicated, the financial results are better. It is still a very difficult market to operate in. And the size of projects and the contract structure basically creates a bidding frenzy around them, which means that everybody is bidding those things fairly thinly. But we've got good infrastructure on the ground. We're committed to that marketplace. We just have to work our way through some of the contracts that we did have some issues with. But we're very optimistic about that market also.

Our next question comes from Bill Herbert of Simmons & Company. William A. Herbert - Simmons & Company International, Research Division: Mark, could you just review with us exactly how the mechanics of the guar cost recovery work? I mean, I understand the fact that you guys are turning very some high cost inventory and haven't necessarily been able to pass that through. On a guar cost markdown, with regard to raw material cost input into the job, will the client expect to receive some of that? Or because they didn't get it, they didn't have to pay for it in the first place? You get to keep it? How does that work, I mean, mechanically?

Yes, essentially, guar is our cost, right. It's an input cost into the work that we do. As our guys have been in the market bidding, we know that we have a higher cost average -- higher average cost of guar. They have substantially tried to ignore that. So that they remain competitive. And as a result of that, to the extent that our inflation is above the market, we've just taken that straight on the chin. And as we look ahead, with the crop yield being 20% to 50% higher next year, we're already beginning to see sort of current pricing of guar in the market beginning to fall, the success of the PermStim rollout and what it's being able to achieve for customers and the demand that we're seeing in terms of its growth, we feel like that will not only be able to kind of get ourselves back to as we normally would on supply chain side, be it sort of the most favored nations price that's out there in the market, but also probably have some ability to value price the PermStim offering going into next year as we get more and better results from its use. William A. Herbert - Simmons & Company International, Research Division: But on the lower cost guar is like getting contractually to your customers.

Is that [indiscernible]? William A. Herbert - Simmons & Company International, Research Division: Yes.

Let me kind of give you an example. Our stimulation pricing is generally on a per stage basis. Let's say, we charge $100 first day. I mean, it's obviously a lot more than that. But let's say $100 as an example, of which, let's say, $0.50 of that -- there are $50 of that $100 is materials that are consumed and that includes our guar cost today. As Tim said, there's about 600 basis points in that. So what we would expect is our $50 of material to go down to $44 of material or whatever the math would work out. So therefore, the customer doesn't see the increase as they came through and won't see the decline as it goes out. William A. Herbert - Simmons & Company International, Research Division: Okay. That makes sense. And then with regard to, again, timing, we would expect to see the headwind become a tailwind when? Q2 of next year?

Well, I mean I think our hope is that we're going to be really working through a lot of our inventories, getting it down in normalized levels toward the end of this year or early next. I mean, the variable in this is to what extent activity falters in Q4 because we've sort of known fairly closely what our usage is and where that's going, and then also how much PermStim. PermStim has been growing significantly as a substitute product that can also cost some of the guar inventory leak over into Q1 if we don't use it. But having done that, we think that really, we're going to start new purchases of the new crop year at the end of the year and that will begin to influence the average cost in our inventories quite dramatically. And so hopefully, by the time we get out of Q1, no matter what happens, we'll have this guar issue behind us, back to market levels.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.