Good day, and welcome to KBR's Second Quarter 2014 Earnings Call. This call is being recorded. [Operator Instructions] For opening remarks and introductions, I would like to turn the call over to Mr. Zach Nagle, Vice President of Investor Relations and Communication. Please go ahead.

Good morning, and thank you for joining us for KBR's second quarter 2014 earnings conference call. Today's call is also being webcast and a replay will be available on KBR's website for 7 days at kbr.com. The press release announcing second quarter results is also available on KBR's website. Joining me today are Stuart Bradie, President and Chief Executive Officer; and Brian Ferraioli, Executive Vice President and Chief Financial Officer. During today's call, Stuart and Brian will cover the quarter's results in more detail and discuss our market outlook by major segments. Please refer to the accompanying presentation that's posted on our website at kbr.com. After our prepared remarks, we'll open the floor for questions. Before turning the call over to Stewart, I would like to remind our audience that today's comments may include forward-looking statements reflecting KBR's views about future events and their potential impact on performance. These matters involve risks and uncertainties that could impact operations and financial results and cause our actual results to differ significantly from our forward-looking statements. These risks are discussed in KBR's second quarter earnings press release, KBR's earnings presentation, KBR's Form 10-K/A for the period ended December 31, 2013, and KBR's current reports on Form 8-K. You can find all these documents at kbr.com. Now, I'll turn the call over to Stuart. Stuart?

Thank you, Zac, and good morning and thank you for joining us today. If we move to Slide 3, which is the overview of the Q2 2014 results. I thought we would just start by really sort of highlighting, I guess, the fifth bullet point down there, really my sort of my onboarding activities. I'm very conscious that I've not been very much engaged with the shareholder community and the analysts since we last talked, probably a month ago now. And the reason for that is I've actually been traveling the world and trying to really get the pulse of KBR, really understand our customers view and to meet our people, spend a bit of time with our partners and really sort of see the business at the core phase. And then in that month, I've spent time, obviously, in the U.S. but also been to -- our businesses in the U.K. I've been to Singapore, Jakarta and I'm currently in the U.K. now, having just spent the last 2 weeks going around Australia and the job sites there. And also, I've been to our businesses in Sweden. So quite a busy time, but I think really important as we move through this strategic review process, really to get a very sort of firm understanding of what KBR is and what we're doing and the sort of quality of the people we have, which has been a real, real sort of uplifting, eye-opening part of the last month or so. So I thought I'd just touch on and say that I think we'll be coming out to see you, probably in the latter part of August and start that dialogue in a more engaged way from then on. So going to the top of the slide, the EPS loss for…

Thank you, Stuart, and good morning. Turning to Slide 4. As Stuart mentioned, the quarter's results were again dominated by Canadian projects, particularly the pipe fabrication and module assembly contracts. As context, we have 7 of these contracts that we've talked about in the past, 4 of which are largely completed. These contracts represented significant sales growth, but the modules that we are manufacturing and assembling are far larger and more complex than we had historically completed. The cost increased and productivity decreased and that's what's driving the financial results. As Stuart mentioned earlier, we had losses during the quarter of $41 million, these are primarily on the 3 remaining projects. And the 3 remaining projects are a little bit different than the first 4. The 3 projects that remain are tied to unit rates based on weight of the modules and therefore, any increased welding or other assembly work that is required when we receive the drawing from our clients, increases our cost but it doesn't allow us to increase the revenues because the weight, in many cases, did not change. And that's what's driving the $41 million estimate to complete the additional 3 modules that you see here. We mentioned in the past that one of the clients has a master service type agreement, where they have the right but not the obligation to place additional work with us up in our Canadian fabrication unit, and no new orders were received from that client throughout this year. Turning over to Slide 5. Looking at the consolidated financial results for the second quarter versus the prior year. In general, it was a relatively good bookings quarter, particularly for hydrocarbons and also for IGP who booked the Marshalltown gas-fired power plant. And more encouragingly, we are optimistic about the bookings…

Thanks, Brian. Okay. So moving to Slide 9. Gas monetization. No real change, I guess, from last quarter there. The work continues on the 2 mega-LNG projects that was kicked off. We announced the Shell global arrangement and we have just kicked off with that. It continues to be strong pipeline of pre Front End and FEED NPC opportunities that you can see listed there. We've got some major FEED work just finishing off Pacific Northwest as we move into the EPC bid phase of that and we're expecting once the political situation in Indonesia settles down with the appointment of the new President, now looking at -- that, that's happened and that transition will happen now through September into October, and that word is expected to come out the other end from that process. In terms of the 3 big EPC contracts we're bidding, Pacific Northwest, it stays on the estimated time line. Lake Charles also is on -- stays on the estimated time line and LNG might slip a little bit in Indonesia because of what's happening politically, but still holding pretty much to those sort of dates that you see there. And I guess, I think these are the 3 sort of key prospects in LNG that our team feels that we stand the best chance of winning and we're pursuing them with some vigor. So I guess moving on now to slide 10. Brian talked a little bit about the Q2 bookings. It was led, I think, by the Maersk Culzean offshore FEED, which in itself is very strategic because it's takes it firmly back into the U.K. North Sea, which is an array of work coming up there and in the regional sector, as well. We've secured significant additional scope in our existing downstream projects…

[Operator Instructions] And we'll take our first question from Andrew Kaplowitz of Barclays.

Stuart, just looking at hydrocarbons, the process that you talked about. Backlog was down a little in 2Q, but revenue was up nicely as you talked about. Can you talk a little bit more about the visibility in hydrocarbons, to the extent that with all the prospects you mentioned, have you gained confidence that you can grow backlog in the segment going forward?

Yes. Yes is the short answer. I mean, it's multiheaded. I think there's the offshore side of the business, I think we continue to work hard to take early positions and work that through. And I think we're seeing significant upside coming through in the business there. And it's interesting talking to our people and to analysts -- a lot of the rhetoric is usually around LNG and obviously, the historical LogCAP business. But the hydrocarbons business, where obviously, it's got a very bright future. We've got a technology position, we're differentiated, we've got a very strong front pre-FEED offering in the semisubmersible arena, but also in one of our businesses called Granheme, which has got global recognition in that space, which allows us to get early entry into the marketplace, and it allows us to sort of get in with sort of high end technical specialist capability. And then if we do well in that arena, we can get more opportunity to pull through into the EPC area. So I think it's highly prospective for us.

Okay, that's helpful, Stuart. And now, this question might be for both of you guys. Can you talk about the losses a little bit more in Canada? You had the same level of charges in 2Q in that particular area as you did in 1Q and the projects are -- you're getting to the projects and supposedly, you can make more conservative estimates us you go. So why should we have any conviction that you're now conservative enough with how you look at that work going forward? Why wouldn't charges in the segment last well into 2015?

Okay. Let me start with that, Andy. This is Brian. The difference is that the scope of work is defined by drawings that we receive from our clients. On the remaining contracts, the majority of the drawings have now been received from the clients and therefore, we're able to do the take offs to understand exactly what the scope of work is. So when the quantity of work increases based upon drawings, that's what's driving the results for this quarter. So it was really impossible for anyone to be able to predict what the scope of work will be when you don't have the drawings that are issued for construction in-house. So as we get to the back-end of these projects, the drawings are in and now we have defined the scope and therefore we're much better suited to be able to estimate what those costs are to complete. We still have to execute and that would be on us, but with defined scope, it gives us more confidence in the estimates that we currently have.

And Brian, just to clarify, are the drawings all in now or are you still waiting for some -- for the last project or two?

Well, the drawings are in. It takes a while to go through all of the scope and do the material take offs which are in various stages on the last 3 projects, but there's always the possibility that the client could change some drawings. And clearly, that's something beyond our control but we're much more confident that we're closer to the end than to the beginning. So touch wood, with defined scope the estimates, we hope, are a whole lot more accurate now than they were in prior quarters.

Brian, let me ask you one more follow-up. You had a new $14 million change in estimated cost to complete on the North American power project. We understand that there's noise in the business, pretty much always, but how do we sort of dial down the noise from the legacy projects, is it we're just going to have to sort of get used to these things or keep -- maybe you can talk about what you think of noise outside of the Canadian project going forward?

Well, the short answer is no, we shouldn't get used to it. We should not be having negative adjustments to projects. But to the extent we had some positive adjustments going the other way offsetting, shows me that our estimates are getting centered, where you should have some going opposite ways. I think the comment that we made earlier about gas mon and hydrocarbons performing well is a driver as we look to the execution of the business, and IGP has been suffering from decreased workload. So you have these offsets that aren't really the message for IGP. IGP, to me, is more the volume of business. The government business in the U.S. had declined, as well has the minerals and Infrastructure business. As volume of business ramps up, I'm much more optimistic that their earnings could get back up to a significant contributor to the organization. And then services obviously, is being dominated by Canada. We'll get that behind us and we'll move on. And Canada has been historically a nice little profitable business for us, and we remain confident we can get back to those levels, but it's going to take some time to work through the remaining 3 projects.

We'll take our next question from Tahira Afzal of KeyBanc Capital Markets.

This is Sunil [ph] on behalf of Tahira. My first question is regarding the gas monetization margins. How should we look at the steady-state margins going forward? Would it be around 17% to 18%?

Well, we really don't comment on margins. We don't give margin guidance, but as you know, there are 2 projects continuing, 2 LNG projects continuing. One of which is consolidated, one of which is primarily recorded through the equity earnings line. Those 2 projects are crossing in that the project that's consolidated, the Gorgon project, had reached its peak and will be ramping down, where the Ichthys project, as recorded on the equity basis, is ramping up. So you should see those 2 lines crossing as we move forward into 2015. So beyond that, we don't give margin guidance.

Okay, got it. And next one on Stuart, if you could tell us the implications, the problem projects in Canada would have to KBRs positioning on large LNG projects in Canada. Are like, are customers concerned there?

Yes, I mean, I don't think of any impact at all, they're a very different part of the business, operating at a very different level in the business. And I mean, I don't see any impact in the slightest in terms of what we're doing with our LNG pursuits. And really talking to the customer, it's not even on their radar at the moment. So I don't see it being -- it's not good for KBR, that's for sure, but I don't think it's negatively impacting our opportunity and our position on the LNG pursuits.

Our next question comes from Steven Fisher of UBS.

Stuart, I'm wondering if you can give us any feedback that you can share on your impressions from your travels related to sort of company strengths and weaknesses as you see them, sort of the employee mindset, and what feedback you're hearing from your customers.

Good question. So I think the business is, in general, as I guess, for the last little while, is likely to shift. And I think everyone is highly positive in terms of now we've got -- well now, we've got a direction in that sense. I think the other piece, Steven, is clear, that the way we'd like to convey our strategy has not been felt through the business. I think going through the strategic review, it's been -- not just welcomed by the board and the Street to some extent, but also from our people. They really want to understand where we're heading as a company and what businesses are attractive for the future and ones that we'll invest in and which ones that we might want to not be in. And so I think that's actually been sort of fed back to me extremely positively and the fact that we recognize that we are a people company and we're only as good as the people we employ, and the fact that we can trust and empower our people with the right level of sort of control and deliver in a consistent way and really get behind the message of "we deliver" and I think the response to that has been terrific. And I have to say, the quality of the people in KBR is enormously impressive. And the number of people that you meet there have been with the company for many, many years and are committed, and they're building things in interesting places, and really high end technical specialists. It has been that key skill set, undoubtedly exists, as do the underpinning processes and procedures to deliver. So I think really, it's actually just setting a forward path, putting in place an appropriate leadership and structure that allows the business to be unleashed a little bit and to strive and grow on the capability it has. It's a very exciting sort of space to me, and I think the people that I've met are up for the future, which is also very pleasing.

Stuart, another one for you. You mentioned that you're pursuing those LNG projects with some vigor. Can you just give us some sense of what that means? Does that mean a specific focus on which personnel you're putting on there? Is it a comment on pricing? How should we think about what that means?

I think the way you should view it is that we're very focused on it. We're not getting distracted by going after 10 of these things and -- we're going after 3 that we feel have got the best chance to reach FID, which I guess means they'll go right through into the main development phase and not just be stuck at FEED or whatever. We feel that we've got a very good chance for there -- for our big dollars are not being wasted. So it's really getting the attention of our organization to make sure we're putting the best people on it, that we're thinking about the best technical solution, that we're thinking about commercially, where we need to pitch it. And I think at the end of the day, bringing our partners along with us and making sure that those relationships are the best and that we've got the right dialogue going on with the customer. And I think in the past, I think we've been criticized for not securing some of these in the last bit of while. I don't know what the reason is for that, but I can assure you there is 0 complacency going forward.

[Operator Instructions] Our next question comes from Jerry Revich of Goldman Sachs.

Stuart, in your prepared remarks, you spent some time stressing the company's opportunity in North American construction projects. I'm wondering if you could just flesh that out for us. I appreciate you're in the middle of the strategic review, but to the extent you can comment, where do you see the company's mix of business going between contract hire versus fabrication? And just talk about the bid environment, fixed price versus cost plus and how you're thinking about the company's focus on what's the right, I guess, level of risk that we should be thinking about as you look to grow that part of the business, if I understood your comments right?

I'm glad you picked up on that. It starts off as talk about really on technology. And if you think about where we sell our technology, that's a very low risk entry and -- as is the associated proprietary equipment that we sell with that technology. It -- with pretty good returns in that space. So even the standalone technology play is very healthy and fairly low risk. And as we sort of move that into FEED and into EPC, what we're seeing, there's really a good portfolio of opportunities across the, I guess, the ammonia-urea space, the gas space and obviously, the refinery space. And it is a sort mix of lump sum EPC, reinvestable EPC and I guess, traditional services, depending on the client and the maturity of where the engineering is when people want to sign contracts. And I think the takeaway really in terms of the level of risk that KBR will take on is that we will be very, very selective when we take on EPC projects going forward. And we will not be chasing revenue for the sake of revenue. We want to make sure that we've got a very solid basis for execution, that we've got a good relationship with the customer and that we really have the people and the wherewithal to execute these projects and really understand, in certain -- I mean, there's certain areas in the U.S. where it would be pretty challenging to take [indiscernible] risk on things like labor rates and things. If you look at the Gulf Coast, which is very hot at the moment, wages and per diems are moving up quickly. So our clients, the mature clients recognize that so you can get levels of relief through your contractual negotiations in that space. So I think that's probably the best way to think about it. It's a portfolio where we're trying to engage early that allows us a very strong insight into what we'll be taking on and that we'll be -- will only be taking on things that we feel that we can deliver and that we'll be doing in a very commercially fund there.

And sort of the -- I guess, willingness to take on additional fabrication work, just can you give us a sense for how you're managing that process? Is that at a standstill until you complete the portfolio or review, or how are you running that part of the business? And then as a follow-up, can you just talk about, if you're pursuing opportunities in ethylene and propylene in North America or are you purely focused on urea-based projects?

No, we've got a number of ethylene projects that are coming through now and I'm not going to talk about specific pursuits, but yes, we are pursuing them and we have technology in that space. In terms of the fabrication piece, at the moment, we are -- the fabrication is only isolated to Canada and we should stress that point. I mean, historically, that business is turned over about half of what it currently does and was making a reasonable return with that turnover. I think we should be looking at sort of taking it back to those sort of levels and making sure that we're executing it with the complexity of module that, that business really understands, i.e. lower complexity. And if we start to move the dial a little bit, make sure that we manage it in a far better way than we've done recently. And so, I mean, I wouldn't get caught up on the Canadian issue. I think the key piece there is actually not about future orders, it's about closing out the ones that we've got.

Our next question comes from Jamie Cook of Crédit Suisse. Jamie L. Cook - Crédit Suisse AG, Research Division: I guess a couple questions. Stuart, I would just like to hear your thoughts. Obviously, in the space, you've seen a lot of M&A happen, more happened since the first quarter and the rationale behind the M&A in this space is that sort of scale matters, in particular, for winning some of these big projects. So can you talk about your thoughts on that? Do you think KBR is at a competitive disadvantage because they're smaller than some of your peers, and just how you think about M&A? The second question is the other pushback I get on your stock a lot is while we have this noise related to the fabrication projects or a power project here and there, there is still a big concern out there that there's another shoe to drop on some of your larger projects. So as you've been there since early June, can you talk about your confidence level in the existing backlog that you have? And then my last question is you're more positive, it seems, like on bookings potential in the back half of the year based on some of your comment. Do you feel we're at a point where bookings in the back half of the year could accelerate versus Q2 levels, which were better than I would have thought?

I there's at least 3 questions there, Jamie. I mean, the M&A activity in the marketplace, it's interesting. And for us going forward, going into the strategic review process, as you're well aware, what I would say is we've got a very strong cash balance. We don't have any debt. So that we certainly got headroom to be looking at acquisitions. And my view of them is that they are an accelerator to strategy and we've got to define the strategy and then if we feel that on a particular acquisition, that the right price actually helps to get us there quicker then it's certainly on the table. So that's the probably the first statement, and we'll always be looking and that's -- in terms of does it really, really... Jamie L. Cook - Crédit Suisse AG, Research Division: But do you think -- I mean, do you think scale matters in terms of winning some of these larger projects and that's perhaps why KBR didn't win some of the other projects? Because that's why Shaw acquired CBI, you could make the argument why a common [indiscernible] requiring. I mean, I don't -- do you know what I mean? I mean, do you think scale is the major issue in terms of why you think about it?

I mean I'm sure size matters but I don't think in this particular case of what we've seen in the bids that -- and I'm talking to the guys that we've -- and some of the ones that we haven't. Well, I don't think our balance sheet and the size of the company has sort of any bearing on it whatsoever. And typically, we're doing these projects with partners. And so when you look at even the -- I mean, the Gorgons that we're doing at the moment [indiscernible] with BBC [ph] and excess of john rich [ph] over BBC [ph] anti order [ph]. I thought I don't really see that as the limiting factor at all and I think you bring in partners to mitigate some of that risk and the client helps you do that as well. Jamie L. Cook - Crédit Suisse AG, Research Division: And then the second question was another shoe to drop on the other bigger project and then the bookings in the back half?

Yes. I mean I think, in terms of the -- I mean I've not been out on the Gorgon site and had a look and talked to the customer and done certainly in excess then [ph]. They're both commercially different, but I don't see us dropping a ball in either of those in a significant way. In terms of the hydrocarbons projects, I think the way the EPC projects are being managed there is quite pleasing with a strong commercial focus and delivery focus on those. And I think the guys understand that the marketplace is such that if you deliver it's the best business development you can do, so there's a lot of focus on it. So I'm not thinking we're going to stub our toe there. And we've got the EPC power projects, we've got 3 of them and they're at different levels of development. Marshalltown was just started and SWA is over 80% complete and gets a little bit different again. So I think we've got a clear commercial focus and delivery focus on those. And I mean, there's no certainty in this world Jamie, on those ones, but I think we've got enough oversight and scrutiny going into them at the moment. But certainly, through the course of the next little while, we'll really understand where we're at. Jamie L. Cook - Crédit Suisse AG, Research Division: And then just confidence level, that bookings perhaps can grow in the back half of the year?

Well, that's the plan. I think the market... Jamie L. Cook - Crédit Suisse AG, Research Division: I like that plan.

Yes. Okay, I mean, it is the plan.

Our next question comes from Will Gabrielski of Stephens Capital.

The power project that you guys are having issues on, can you just talk a little bit more about what the actual issues are?

We've done -- I mean, we started to look at all these major projects in a very sort of detailed way and we want to make sure that people aren't sort of just given the most hugely optimistic view and that they're praying for better weather or whatever, I mean, I use that as an analogy -- but not in specific. But I think what we're seeing is that as we're looking very closely at these projects and this particular one was really the cost to complete, we're too optimistic and when we actually looked at what work was left to be done, what schedule needs to be done and there was an increase in cost to complete. That's the bottom line and...

No problem, I'll...

And they're still profitable.

You mentioned North American refining opportunities. What exactly are you referencing there?

Again, I mean, I don't think we're going to talk about specific projects here but we're...

No, I meant by type of -- I meant type of projects, revamps, environmental, tier 3, what exactly are you referencing?

Yes, mostly -- I mean, it's revamps to deal with the change in mix in fuel types and things like that.

Perfect. And then Allenby, can you just comment on how that's going to trend in the second half of the year within IGP equity income?

I mean, in terms of the equity income, I think it's -- well, I mean, it's performing on a consistent basis in terms of the facilities management of that, which runs for like for the next 30 years or so. But the construction element is coming off as the facility are coming to conclusion. I mean, I went to visit that site as well and I mean, it's -- I met the customer and they were very, very happy with what we've done and the quality of the service they are finding is terrific. So I think that's going to be a consistent performer over the next little while. I guess the potential upside in Allenby cannot through that [indiscernible] venture is really the army of relocating back from Europe, from Germany in particular, back into that their Salisbury Plain area where we've built all these facilities. So there is a need for additional facilities and there is a need for expanding to growing the facilities management piece there. We obviously will be looking to have an active role in that.

And then just quickly, ERP spending this year and any expectation for what that change will be in '15 versus '14?

I think Bryan could talk about ERP.

We think '15 will be also comparable to this year. We're in process of rolling out in the U.S. now. We've done our first phase in the U.S. and we will continue that in the U.S. in the early part of 2015 and then the balance of the world in 2015. So pretty consistent in '15 as in '14 and then a significant trail off thereafter, if there's any rollover into the following years.

Our next question comes from Vishal Shah of Deutsche Bank.

Just wanted to better understand anything changed on a structural basis in the pipe fabrication business. Are you seeing more complex projects, larger projects? And are you looking at some of the strategic opportunities in that particular business as you conduct this review?

Well, in terms of the actual projects we have, as I have mentioned previously, they have been more complex and larger than what we had done historically. There's a term I've learned, the Alberta Module, which was a relatively common type module that had been done by us and others in the past. And in the more recent past, these contracts are more complex, more work being done. So there has been a shift there. I'm not sure whether that's a market, ongoing market issue or if it was just specific to the projects that were ongoing at this point in time. And as Stuart mentioned earlier, Canada is a relatively small -- or the fabrication component of Canada is a relatively small component of our business. Yes, it will be included in the strategic review, but it is -- in context, it is one of the smaller components. It just has had a major impact on these 7 projects.

And just as you consider the landscape going forward, are you reevaluating your strategy around capital allocation in terms of between buyback and M&A? You said 50% of your cash was returned to shareholders in the form of buyback, is that going to change going forward?

Well, that will be part of the strategic review. So it's premature to comment on capital allocation. But clearly, all of those options have been on the table. We had not precluded any of those in the past and we'll see where the strategic review goes. But I would imagine that they all -- will remain on the table as we roll forward.

Our next question comes from Rob Norfleet of Alembic Global Advisors.

I guess, my first question just on the LNG opportunities. Clearly, you mentioned mostly greenfield opportunities. I wanted to get your thoughts as it relates to some of the existing or legacy projects that you're working on, for example, Train 4 in Gorgon, Tangguh, obviously a project you worked on before. These are projects you talked about favorably before and I'm just curious about your thoughts about getting the FEED and EPC on those, as well as any other projects where you see increases in the scope?

I mean, the current projects are always open to an increase of scope as changes come through. That's the first statement, which I'm sure you know well. But I mean, when you look at Train 4 in Gorgon, I think the focus on by Chevron and the partners and certainly, I had a chat with them about it only last week as really to get the first 3 trains going. Some of the infrastructure's already in place for Train 4 and you would have to think the economics around that would make sense, given that the supporting infrastructure is already in play. But I think right now, because of the port cost increases in that particular project, that the focus will be very much in the short-term to make sure we go hard to come [ph] and going through the plant. In terms of -- but what I would say is that once the facility is up and running and there's a lot of -- I think there's a lot of hesitancy in the marketplace, as well at the moment. There's a lot of noise around Angola and LNG as you're probably aware, they've had some issues. So they want to start it up and make sure that it's running well, et cetera. And that thereafter, I'm sure that the Train 4 will be under consideration and I'm sure that KBR and JGC will be well placed to go after it, just given that we've done and just finished the first 3 trains. In terms of Tangguh, the 3rd train in Indonesia, is very much in play at the moment and that's -- we are going after that quite aggressively and as you rightly pointed out, we built the first 2 trains so we feel that we've got a good shot at that particular project and BP are very driven to get it sanctioned and through the process in Indonesia.

Okay, great. Second question, can you just discuss a little bit the competitive environment you're seeing in North America? I'm you all clearly seem very upbeat about several projects in chemicals and oil and gas moving to EPC in the second half of the year, which is great. But a number of your competitors have really stated that they're continuing to see kind of sluggish activity, products are getting pushed out and it's a very price competitive environment. So can you just kind of discuss what you're seeing in the North American market?

I really won't talk about competitive statements, but certainly, what we're seeing at the moment and certainly our backlog would prove that out and the opportunity is in front of us and I mean, I think the -- perhaps, the differentiator for us is that we get in with our technology, as well. So there's -- we actually don't see such huge cost pressure in that area at the moment. We find it competitive as ever, but no more competitive than sort of 3, 4 months ago.

Okay, great. My last question is for Brian. Brian, I know the strategic review is ongoing, so obviously, you'll have a conclusion to that at some point. But where does buyback at this juncture kind of sit on your plate? I mean, while you're doing the review, are you still going to be active in buyback, clearly given where the stock is trading? I just want to kind of get your perspective on that.

Well, as we've commented in the past, we don't really talk about timing of buyback. There are a lot of people out there who trade in stocks as their living and I don't think it serves our shareholders well for us to give any indications about when we may or may not be in the marketplace. So I have to defer, but clearly, we still have a lot of authorization available under the existing facilities, but it will be part of the strategic review. That's what I can say.

Okay. And lastly, any update on PEMEX?

No. It continues to move along the legal process. We always are thinking of ways that we might be able to reach out and come to a commercial conclusion there rather than a legal one. And as we mentioned in the last quarter, there's a renewed emphasis in general, here on resolving disputes commercially rather than legally. But no, nothing new of any significance to report on the PEMEX EPC dispute.

Our next question comes from Robert Connors of Stifel, Nicolaus. Robert V. Connors - Stifel, Nicolaus & Company, Incorporated, Research Division: I don't know if this one -- I guess this question is for both of you, but I get it lot from your shareholders is there's always been this cloud that's been overhanging KBR that, despite a great reputation in international LNG, there really remains an unquantifiable liability on the legacy Iraq and Afghanistan work. So do you continue to see that your shareholders are best served by keeping these 2 segments together or is that being explored in the strategic review?

I think you know the answer to that question. I mean, that's very much part of the strategic review process and we'll come back and talk to you about that later. Robert V. Connors - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And then can you just remind us where you're at on percent of complete on Ichthys LNG, as well as the breakdown of fixed-price versus cost plus exposure? Previously, we used to get a breakdown on that.

I mean I was just there. They just crossed the 50% complete mark, so there was a big celebration for that. And in terms of the breakdown, I don't actually have those figures in front of me. So I mean, we might have to do that offline as we've done it before.

Next question comes from Michael Dudas of Sterne Agee. Michael S. Dudas - Sterne Agee & Leach Inc., Research Division: Two questions for Brian. First, Brian, the labor productivity improvement we've seen, can that maintain in the second half or do you need to see more visible in the new bookings to help absorb some of the underutilization?

Well, clearly, you always need new bookings because projects are rolling down and you need new ones to roll on to replace them. But now, we're feeling a lot more optimistic about the utilization of labor than we were certainly, a year ago. And you can see, it's made a pretty significant improvement from a year ago as we said. So yes, we always do need some new bookings, but again, we remain much less concerned about labor costs utilization than we did a year ago. Michael S. Dudas - Sterne Agee & Leach Inc., Research Division: Understood. And secondly, on cash generation second half of the year, is there going to be a change in the mix from international to U.S., given your plan? Any meaningful change in the mix?

No. I can't think of any meaningful change in mix. No. Michael S. Dudas - Sterne Agee & Leach Inc., Research Division: Fair enough. And for Stuart, thoughts on the Russian business, given some of the concerns over there?

Sorry, say that again. I didn't quite hear it very well. Michael S. Dudas - Sterne Agee & Leach Inc., Research Division: About your relationship with Gazprom and some of the Russian opportunities?

Yes. I mean, our exposure in Russia is fairly minimal. It's very politically volatile, as you know at the moment. So I mean, I don't see it as a material risk to the business at the moment. But we've got some small PMC work ongoing but -- it's good for relationship building but not -- it won't commercially prove a risk.

That concludes today's question-and-answer session. At this time, I would like to turn it back over to Stuart Bradie, President and Chief Executive Officer of KBR, for final comments or closing remarks.

Well, I think good level of questioning. Thank you very much for your interest and your questions towards KBR. Certainly now, I've now been in the job 6, 7 weeks now and I'm thoroughly enjoying it and I look forward to getting out and meeting with you as we get into the back end of August. So, thank you very much.

And that does conclude today's conference. We thank you for your participation.

Thank you.