Good morning. My name is Regina, and I will be your conference operator, today. At this time, I would like to welcome everyone to the Weatherford International first quarter 2013 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). We ask that you please limit yourself to one question and one follow-up and re-enter the queue for any additional questions that you may have. As a reminder, ladies and gentlemen, today's call is being recorded. Thank you. I would now like to turn the conference over to Mr. Bernard Duroc-Danner, Chairman, President and Chief Executive Officer. Sir, you may begin your conference.

Good morning, everyone. A little change from what we have done historically. There will be two other speakers and myself. I will start off with the prepared comments and John Briscoe followed by prepared comments of Dharmesh Mehta and my own. Then we will open it to Q&A. John?

Yes. Thank you, Bernard, and good morning, everyone. Before my prepared comments, I would like to remind listeners, this call contains certain forward-looking statements within the meaning of applicable securities laws and also includes non-GAAP financial measures. A detailed disclaimer related to our forward-looking statements is included in our press release, which has been filed with the SEC, and is available on our website at weatherford.com or upon request. Similarly, a reconciliation of excluded items and non-GAAP financial measures is included in our press release and also on our website. In the first quarter 2013, we recorded GAAP net income of $22 million or adjusted net income of $117 million on a non-GAAP basis compared to adjusted net income for the fourth quarter of 2012 of $8 million as detailed in the non-GAAP reconciliation table in our earnings release. First quarter net income was unfavorably impacted by the excluded items detailed in our press release totaling $138 million before tax and $95 million after-tax. We continue to isolate as an excluded item the net losses incurred in Southern Iraq on certain lump sum turnkey drilling and early production facility contracts entered into by prior Hemisphere Management to clarify our MENA, Asia Pacific operations are performing, how they are performing and the impact of these contracts on the region. We have included details of the revenues related to the excluded contract in a footnote to our reconciliation of GAAP to non-GAAP financial measures scheduled in our press release. First quarter revenues of $3.8 billion were down 5%, sequentially, and 7% higher than the same period last year. North American revenue was down 4% versus the first quarter of 2012 and up 1%, sequentially. International revenues were up 17% versus the same quarter of 2012 and down 10%, sequentially. Adjusted segment operating…

Thank you, John, good morning, everyone. After delivering positive cash flow in the fourth quarter we fully expected an increase in our net debt in the first quarter. Our models indicated a $200 million increase in net debt. However, net debt for the quarter increased by $308 million. There were three specific issues that resulted in approximately $115 million of cash collections being deferred to the second quarter. The most significant of these was the quarter ending or a holiday weekend which resulted in approximately $90 million of cash collected on April 1 that otherwise would have been received in March. Although we have collected the $115 million of cash in April, it did affect our cash balances at the end of quarter one. Our models also included four predictable seasonal factors. Natural variation of interest payments across quarters with quarter one having the highest cash payment of $183 million, higher payments on a worldwide basis in the quarter for items such as property taxes and VAT, the traditional building of inventory levels for consumption during the remainder of the year, and a slowing down of customer payments in the first quarter. Our DSO metric reflects an increase of four days from 86 in the fourth quarter to 90 in quarter one. Our industry segment normally experiences increases in DSO and DSI in the first quarter and we are no different. Our DSO increase of four days is the lowest when compared to our peer group and is consistent with the higher international business mix. DSI increased by seven days from 81 days in the fourth quarter to 88 days in quarter one. This is the lowest increase in the first quarter of any year for the past three years. Five of the seven days is attributable to a lower…

Thank you, John. Thank you, Dharmesh. Q1 was progress. The quarter was in line with operational and financial expectations given market conditions and the quarter had no noise. We should expect that to be the norm. Concurrently, we are bringing non-recurrent numbers down as fast as we can. We don't like them anymore than you do. If there was any disappointment in Q1 operations, it would be North American performance. We expected a rise in EBIT and margin. International operations, which go through their seasonal low in Q1 did as expected. In some instances, actually, better than expected. North America was flat on Q4, which fell shy of our expectations. This is primarily driven by Canada. Canada entered the quarter about 10% lower than Q1 of last year market-wise another quarter. Canada's profitability is defined by EBITDA ended up lower than Q1 2012. As you know, this affects us more than our peers, who are very Canadian. The U.S. couldn't help although it will in Q2 thereon. There is no single factor. Segment were flat at Q4 levels except the seasonal pullback in equipment. Equipment for us means lift and completion and alike. Shipments which are always at low in Q1, all-in North America wasn't bad, we are posting only flat sequential results both, dollars and margins was a little disappointing. By contrast, Latin American performance was better than expectations. The EBIT was the highest in Latin America region's history for first quarter which is also a seasonal low for them while the margin level was thoroughly higher than in Q1 '12 and the highest in the past four years. The European, Russia, Caspian and SSA region were about where we expected. This is a seasonal low and we will see Russia in the Caspian and predictable activity in all…

(Operator Instructions) Our first question will come from the line of Jim Crandell with Cowen.

Good morning, everyone. Bernard, can you take us through your expectations for international improvements by margin and where do you believe we can get to by the end of 2013 outside of North America?

I will be simple. I think that you will get the most improvements out of Eastern Hemisphere. Eastern Hemisphere will end up double-digits, I will tell you that much, in the second half of the year. There will be nicely double-digit and I will probably leave it at that. Latin America will continue to improve. The difference between first half and second half in terms of margin won't be as steep as it will be in the Eastern Hemispehere.

Okay, and my other question, could you talk a little bit, Bernard, about timing of asset sales. I know it’s difficult sometimes to judge but do you think at this point that you can accomplish a meaningful chunk of your asset sales in 2013?

Well, I certainly hope so. It is difficult to comment on it because it really takes two people to agree. I would say that if we did not sell an additional $0.5 billion worth of cash proceeds of assets in the next couple of quarters, I think we would be disappointed. Might be more than that but that’s one marker. Again it is, as I said, takes two people to agree.

Your next question will come from the line of Jim Wicklund with Credit Suisse.

Good morning, everybody. We were to the point that we care as much about your cash flow statement and balance sheet as we do your income statement. So let me ask a hypothetical question. Would the sale of, say, your international land rigs have the effect of improving your capital efficiency and your balance sheet metrics and reducing CapEx or would that just be really no effect other than bringing cash in the door?

No, first of all, our international land rig operation is not necessarily what we are trying to sell. But just to answer your question, if the entire land rig operation was sold, yes everything would improve. Everything. All the things you mentioned, I can't think of a single one that would not. Cash in the door, obviously.

Okay, that’s positive. Dharmesh, your detail was fabulous. The expectation of $600 million in free cash flow from operations, we will all keep our fingers crossed. Can you give us a little bit more detail on what the capital efficiency effort involves, so we can kind of understand at a more basic level what is your primary one or two directives are in terms of that improvement.

Sure. Jim, the capital efficiency processes (Inaudible) four key areas, one is (inaudible), so we are focusing on all this front in parallel with the idea of freeing up almost $1.5 billion of cash flow over the next two years. So, different things we are doing in each bucket there's a well defined program laid out. For example for the first quarter, we trained 600 of our leaders around the world in every major geo market, every country on what they need to do, what changes they need to make in each of this four areas. We are also using technology; so in the second half of this year we will be invoicing twice as many customers electronically as we do today in the first half of the year, so it's a combination of technology, educating the organization and putting discipline and processes in place across this these four areas.

Okay, gentlemen. That detail is very helpful. Thank you, Dharmesh.

Your next question will come from the line of Bill Herbert with Simmons & Company. Bill Herbert - Simmons & Company: Thanks. Good morning. Two question with regard to Canada, Bernard. So, did I understand you correctly in saying that Canadian top line quarter-on-quarter Q1 versus Q4 was flat?

No. The overall North America was obviously you could read the numbers, they're flat. Canadian top line was up. It just wasn't up as much as we expected, Bill. It's just is our internal expectation. That's all. Bill Herbert - Simmons & Company: Was it up as much is double digits, or was it low-single digits? Order of magnitude would be appreciated.

I think, 10%. 10-ish, but to 11-ish percent. Bill Herbert - Simmons & Company: Okay. Fine. Then with regard to the roadmap for the second quarter, I guess, John and Bernard, do we expect a typical 35% to 40% decline in revenues with decrementals of call it 50%?

Thus far, Bill, I suggest that it would be the decrementals Q1 on Q2 could grow as far as double digits cents per share. You were talking about. So, let's take $0.10, which would be a $100 million decline. That's far beyond the high side of what it could be. So, I would envision it to be somewhere between 80 to 100 decline in terms of operating income decline for the breakup.

As a range.

That's helpful. Bill Herbert - Simmons & Company: Got it. Then with regard to the third quarter is, is it reasonable to expect the typical two-thirds recapture of the revenues lost Q1 and Q2?

Yes. Absolutely, Bill. Absolutely. We cannot provide any greater precision than that. That's very reasonable. Bill Herbert - Simmons & Company: Okay. That's all I have. Thank you.

Your next question will come from the line of Ole Slorer with Morgan Stanley.

Thanks. So, just continuing on that end, Bernard. Would you then take us into your $0.16 to $0.18 second quarter estimates? What are the biggest delta when it comes to the changes from the first quarter other than Canada?

U.S. contributes. Remember that in Q1, as is always the case you have actually a decline in products business or equipment business. We call it lift, but it's not only lift. Of course, it reverses itself in Q2 and so it goes up. That's the primary moving factor, so you've got [an effect that is] [ph] completion also and there's liner hangers and bunch of other products, but just the same theme and that's number one. It's not market related. Then you have some improvement in Latin America. Latin America in Q1, is also for budgetary reason a seasonal low. There are some improvements there and then the bulk of the improvements come from Eastern Hemisphere. And, really it's everywhere as some of these are purely weather related. There's nothing more than that. Some of it is specific to some of the business that we have like European business will be materially higher. The Middle Eastern business will be materially higher, some of the Asian business will be materially higher and so forth. So, it’s not so much one place that will make a big effect. I think it is a number of places that contribute a couple of pennies or something like that, two, three pennies and it all adds up to overwhelm the breakup and some.

(Inaudible) standout thing to improve here is the Middle East margin.

Well, it was still bad, Ole, that I think that it could only go up.

Bernard, you have been seeing this for a while but when do you think it really will?

Well, Q1 was actually an improvement. Asia was just down dramatically. Asia always does well but it was down dramatically, seasonally. So Q1 was an improvement. I think it will improve every quarter progressively. Q2 on Q1, Q3 on Q2 and so forth. It will end the year not at all where it needs to be in 2014 but it will end the year, in honorable territory which it hasn’t been in a long time. It's based out on the business of the four markets identified, Saudi, Kuwait, UAE and Oman.

If we turn back to North America again and specifically the U.S., is there anything in the U.S. Market that at this point is still heading in the wrong direction? N

No, I don’t think so, Ole. Some are just not bouncing back until the gas segment starts back, but no, there isn’t. At least on our list.

So the negative effects incrementally from pressure pumping leading as pricing for example. Has that stopped being a headwind for you now going into the second quarter?

For us, yes. Although we’re not the best and we’re not be the best people to ask a question about pressure pumping. But for us, yes, it has stopped.

Are you making any money in pressure pumping at all at the moment?

Dharmesh, you want to answer that?

Sure. We turned the corner in February, and March was the first profitable month for pressure pumping for us.

(Inaudible) still report to Dharmesh. That’s why he answered the question.

Okay, well, Dharmesh, good to have you onboard there. Thank you very much.

Your next question will come from the line of James West with Barclays.

Bernard, more of a big picture question for me. Going through a couple of years of, obviously the tax issue. There has been a lot of restructuring internally. There is a new focus on capital efficiency, et cetera which you have outlined in great detail. During that time period, it seemed, to me at least, then with speaking your competitors that you are a little bit less engaged with the market. Now, of course your revenue is growing nicely. So it’s not clear with the numbers but that’s true. But I guess one is, is that a fair statement and then as you come out of these non operational issues which are, for the most part, getting behind you or will be behind you shortly, how do you reengage or how do you think about reengaging with the market in a bigger way and is Weatherford has (inaudible) been in the past trying to gain market share?

What did Virgil used to say in Latin, Timeo Danaos ET Dona ferentes, I fear the Greeks when they are bearing gifts. I say my competitors, when they make comments, all right. So that’s the first thing, James. Consider the source. That’s number one. Number two that does not that does not confuse the desire to be selective in what engage and what we grow with the fact that we are less engaged. I don't think that’s that's correct. I would tell you if thought it were correct. It would be easy just because it would have massive distraction was in the past two years. I think it is fair to say, if I am going to be a bit more balanced in my views. It thinks it is fair to say, that that would say that the stress and strain was immense in this place suddenly in 2012. So notwithstanding my quoting Virgil and what I have just said, yes, we probably were distracted. I have to be fair. The reason I reacted the way I did other than my love for Latin is the fact that our clients have been remarkably disinterested in all of our administrative and tax related problems as if it didn’t exist and have been immensely supportive. The reason is not necessarily just simply their kindness. The reason is that the sorts of things we specialize in. The sorts of things we good at. Actually a big of a percentage of it is things that were just about low and we are very good at it. So we are quite valuable to our clients and delivering service and products where we don't really have that strong of a competition to care of. As a result, we are people that need to be supported and they did. So summarizing, yes, although always smiles when I have a competitive comment. That is certain, we were distracted. Have to be. We are not anymore, but I have to say James that our plans have been very supportive I don't mean just as a Pollyanna statement. I mean, because it's true. They have been, very, very supportive probably, because what we do is we have a lot of niches. That's volume. That is not always clear in Wall Street, but we do. Our niche is evaluable.

This will be the well integrity artificial lift you are referring to?

Yes. Once really official lift, that evens a source of Formation Evaluation capabilities we have, okay? Some of them are generic. I understand, but it doesn't matter very much. Others are really not and therein lay the value of Weatherford.

Okay. Got it. And just one follow-up for me. Just a detailed question. With the well publicized as you mentioned slowed in Jakarta back, I think you guys did $12 billion $13 billion or so in Mexico last year. Can you give us a level of kind of exposure to that plan? Understanding that production will offset some of this, but how big are you (Inaudible)?

We were not. I tried to make it clear in my notes, we were drilling in the past weeks of the first quarter counter effect went down to zero and the counter effect drilling business as we suggested in Q4 for example, when we were still going on. Would there have been other rate? I don't know. Approximately $75 million a quarter or something like that, it was much smaller and what has happened is that that drilling I would say about half of it is moving, as we speak to Villahermosa in the South, but we have ten strings drilling and as it is, which will grow probably 14 maybe 16 strings. That's one thing. There's a large as inventory of wells that have not been completed in your counter attack, which will be completed, this is what we will do. I won't be the only ones, but certainly we will have our share of it. And meanwhile, we are growing our lot of our activity offshore in the South, so the prognosis for Mexico is good this year. Certainly, if this had happened three, four years ago, it would have been a different story, but we have done a good job of diversifying our market share in Mexico, which we did…

Okay. Great. Thanks, Bernard.

Your next question will come from the line of Waqar Syed with Goldman Sachs.

Thank you for taking my questions. I just have some questions on this, the table unchanged on net debt on page nine. The two items that I want to talk about, one, is that the cash income taxes paid. That was a big number $124 million. Could you talk about that? Why that's such a large number. Secondly, there's another, other items, which is about $278 million. Could you provide some more color on what that line item is?

Yes. Waqar, I can give you some detail on both of those. I'll start with the other items, and that's primarily comprised of when you look at the devaluation in Venezuela, that obviously impacted our working capital and receivables and inventory. And so $100 million of that other category is the offset related to the devaluation, because it's essentially a non-cash item. Then we also had a repayments related to property tax and VAT. It's about $90 million and then the last component that was significant there is just excess of revenues in excess of actual cash receipts related to the percentage of completion contracts.

The VAT property tax is a Q1 event typically and it's worldwide. Now as you prepay and then?

And then couple of coming from income tax. If you actually extrapolate that out to full quarters, that would assume that you have a 50% cash tax. That means absolutely not right. So it's really seasonal event. It happens. We pay higher taxes in first quarter, and in some ways that is really the story of net debt for quarter one, is that there is a number of things really only happen in quarter one and that's why the model showed a $200 million in net debt for the first quarter. It's somewhat predictable when the cash taxes are going to be whether it's property taxes or income taxes or VAT taxes, just $183 million on that hit us in the first quarter.

And this was significantly higher than first quarter of last year.

Okay. That sounds good. Secondly, what is the revenue associated with the legacy contracts in Iraq, and how would that revenue number change in the coming quarters?

We have detail of that in our non-GAAP reconciliation and footnote A but for the first quarter it is $166 million of revenue related to legacy contracts comparing $277 million in the prior quarter. That will be decline a little bit.

It will decline. There are two contracts that are over that were done and they were completed. So that will come out. You left the bigger one though which is go on through the middle of next year. So it should decline but you will still have a healthy number. would say this quarter it was maybe $100 million or a bit more. It will go on through the middle of next year expected to be completed about Q2 or Q3 of next year. Okay?

Now, would you still be able to report revenue growth if you exclude these legacy contracts on the revenues?

On a foregoing basis?

Across that region, yes, I believe.

Definitely we are (inaudible) because you have to remember, the first quarter is seasonally down in particular in the Asia portion of MENA Asia and so I believe that for that region we will still be able to show an uptick even with the exclusion of those contracts in Q2.

Well, they existed in Q4, (inaudible). As you can see, in Q4, Q1 actually is not that different. So whatever dollar increase you see or whatever delta you see is actually a real delta. Since that as a factor, it being the same doesn’t change anything.

No, I mean just going forward, if we just have apples to apples. If we take out legacy contracts from Middle East now and then take out in the future as well as they are declining, would we still have revenue growth?

Yes.

And underlying? Okay.

Out of four markets which is not enough Africa. But some markets which is Saudi, Kuwait, Abu Dhabi and Oman, yes.

Your next question will come from the line of Robin Shoemaker with Citi.

I wanted to ask you about artificial lift. In light of the transaction that was recently announced the buyer in that deal obviously believes that pricing and margins for artificial lift have quite a bit of upside. I am just wondering specifically with regard to rod lift, why has it been kind of been slow in terms of pricing and margin improvement relative to the very strong uptake in that technology in the oil shale plays?

First I will have Dharmesh also answer because that (inaudible) is to report to him but just a few thoughts. The lift business is a razor blade that is more so than a razor blade. So it builds up slowly as you sell more and more razors and the razor blade business takes over which is basically the maintenance business. The highest margins, actually, are the blades not the razor. That’s the first thing. The second thing is that notwithstanding what I just said, you could see the actual numbers of lift production optimization. They are very good which highlights the fact that returning to our cores which is lift production optimization is one of three poles of our triangle is a very easy obvious good idea because the numbers are very good. The summary is that the margin and the volume numbers are good and they are picking up momentum. After that I will add one last comment which is pricing is still moving up and supply chain has a very, very important role to play in that business. With that, I will turn it over to Dharmesh.

So there are two additional comments I will make. From an absolute dollar basis, we have almost doubled, if not tripled our investment in R&D in artificial lift in the last two to three years. So what we have been doing is investing in the business for future growth. The second area of investment ahs been manufacturing capacity. For example, our margins last year were impacted because of the buying of a fair amount of product from a third party and supplying it to our customers. So we have done a number of things to actually (inaudible) the business and actually maintain our market share but in terms of the actual comments, there is movement on margin.

Okay, just staying on that theme, it seems like automation is a big part of selling artificial lift now. Both, Rod lift ESP of course, and how do you feel you are competitively positioned on that automation offering?

That would be a Dharmesh to answer. I wouldn't even dream of.

When you talk about automation a key component of the automation, yes, software platform that customers use to collect data and optimize artificial lift system. The Weatherford software platform today has 400,000 wells real time. It's the standard of choice for eight out of the 10 largest E&P customers in the U.S., so we are very well positioned from both, the software perspective. The other area of recognition really sensors, which is how you sense what's happening at the roadside, so we have very deep portfolio when it comes to sensors, and last but not the least, really as your service infrastructure for things such as software and automation is different than for things such has something in it. And for the last three to five years, we've been building an extensive service infrastructure on a global basis to make sure our clients can use this technology, so we are still a large [MLPs] today for example and we are the standard of choice about how they bring the data, how they look at the data and how they optimize artificial lift systems. Mind you, that we are one of the largest number of ESPs in our software platform also. So, the software platform is not just specific to the artificial lift that we directly offer. It really is agnostic and it supports all the pumps of artificial lift.

Okay. Thanks for the answer.

Your next question will come from the line of Mike Urban with Deutsche Bank.

Bernard, a little bit about the Southern Iraq and not growing the balance sheet there, and base value the reason for that are obvious given the profitability. But, as you look at that market going forward, is that a function of kind of the market outlook or do you have sufficient capacity there as the legacy contracts wind down and they are free to need to invest or is it kind of a message internally into the market or little bit of all those things?

I think, it's a bit of all these things, Michael. I think, first of all we have a well-developed infrastructure in Southern Iraq. We do have also equipment for drilling and production in Southern Iraq. The balance sheet today is somewhere around $400 million of give-and-take, a few million, so it's a sizable. So, it's not that we don't have capabilities. We have people capability also in Southern Iraq, which precisely that we have a good opportunity to claim them further so that we grew both efficiency and efficacy, so all these things. So, that's number one. Number two, I think the Southern Iraqi is obviously in extremely important reviver play. One and which show we will keep the market share. We're just trying to be very, very selective on what we do both, drilling and production. This is true in every single market, particularly too in Southern Iraq. In light of our judgment on what it means for us to be selected there, it's just Michael we just have enough equipment. We do. We have enough equipment, we have enough capabilities. And although there will be some movement in and out, things moving in that market big, things in that market reflects us our [discipline] of not committing anymore dollars. That is not only the right thing to do, but it's also a very doable in light of what we see next few years. So, it's really taking measure of what want to do there, but we already have there. And it has everything to do, we are just picking our battles.

Great. Thank you. Then a follow I think just a similar question that's more broadly, you said you are doing similar things around the world. Are there other either markets or product lines where you might not be investing as much as in the past. I think there has been an element of trying to do all things to tell people to some extent and I know there's a focus on what you do well, well construction lift, certain Formation Evaluation tools. So, are there other examples of that that you we might highlight to give us a sense of that indeed is going on across the company in terms of clear focus.

Well, this one is different, because this is a geographic market, where we singled out a particular decision, not since this is a little bit unique. I can't think of any other geographic market where we decided. We certainly are not going to leave the market. We will be active or have a market share but in certain segments and the segments are predetermined. Its like to have enough capital in a market. Capital will return. It is not going to be static but the dollars will basically remain the same. I can't think of any other region or geographic market like that. With respect to how we are going to lead our business product line wise, I think you said it very well which is the things that we do well. We built over 25 years, that we do well. We do it very well and some of those things we don't have as much competition as perhaps in the other segments. Thirdly, a lot of these product lines or competencies are ones that are very useful and necessary strategic even for our clients. A number of our clients. So, wealth construction, production, near sort of centered around lift production optimization and of course, completion and formation and evaluation with a focus that we give it, which is no, not all things to all people because that, in my opinion, is not a terribly good idea. I think that’s what we will emphasize by default. The other segments will not be emphasized. That’s for us. We are a was $16 million company. So I have a pretty good idea of what it will mean when we only focus on the core. The cores are growing very quickly. The issue there is not so much whether we can grow. The issue is how can we discipline the growth and make sure that we pace ourselves with highest return possible. That’s how it is going to be run.

That’s helpful. Thank you.

I think because we ran over the hour, I am told is going to be the last question. So no offense to the people who were in the queue for more questions. So that’s going to be the last question. Please.

Our final question will come from the line of Stephen Gengaro with Sterne Agee. Stephen Gengaro - Sterne Agee & Leach Equity Research: Thanks, I guess, one final question, Bernard. Just in general terms, when we look at your history, and obviously we look at the restated numbers as sort of a proxy for your margin capabilities over time and given your product mix, how should we think about your ability to achieve that going forward? A, is it possible? B, what kind of timeframe should we think about as this unfolds?

The most shocking numbers for us from the (inaudible) are deterioration of our international margins. Now you can talk about a lot of different margins. Let's focus on that one. So the international margin had the EBIT line and it’s the one that you see sits somewhere roughly overall 40% of what its past peak was. Now I am not suggesting one has to be at one's peak although that would be a good thing. I am suggesting that at the time we felt the peak had further headroom. So its very, very shocking. So analyzing why that is has a lot to do with being overextended in too many product lines and too many market that then, all at the same time, not very efficiently. So I would say that the focus of the company and one of the most important thing that we are trying to do operationally is to take that international margin and do what is required from a strategic standpoint, from an industrial standpoint, from an operational standpoint to move the margin back. Not to the peak, yes, hopefully but before we get to the peak, you go higher than where we are today. But move that margin up and in the next few quarters if we don't see progress on the international margins, it will be for us a tremendous disappointment. The market will also play but assuming the market remains benign or well behaved that, for us, the biggest market of progress that this company eared. It should happen in the next few quarters and in '13 and '14. This is not a five year undertaking. Stephen Gengaro - Sterne Agee & Leach Equity Research: But you think that your mix of products and the way the accounting structure has changed in efficiency gains and improvements to offset anything that was miscalibrated historically from a margin perspective?

So I am not quietly sure what that.

Let me just say one thing. I am not sure if this is exactly answering your question but what we are doing with capital efficiency is actually going to emphasize the good parts of a higher margin (Inaudible) really that will help build the research and so the international market to grow.

I don't think this is an accounting issue at all. I think that we over extended ourselves over the past few years. It's not just last year. We just took on too many product lines that I don't think necessarily belong with us. Also, we moved into market, where we didn't have to move into et cetera. This really has to do with operational issues. I don't think accounting is the issue, or if it is, it did not. It would be clearly inventory manner. It doesn't support growing business at all. The issue is purely how well can you return? How fast can you return to the call and how good is our call. That's really issue. It's not accounting at all. Stephen Gengaro - Sterne Agee & Leach Equity Research: Okay. And one just final quick follow-up, so in a similar environment, you feel you’re your capabilities from a margin perspective should actually be higher not lower?

It's a bit [for] me to answer the way I will, because it is so far away, the answer is yes. Stephen Gengaro - Sterne Agee & Leach Equity Research: Okay.

This is part of the reason why our decision is so easy and our direction is so easy. This is not complicated. Stephen Gengaro - Sterne Agee & Leach Equity Research: Very good. Thank you.

Thank you. And, that concludes the call. Thank you for your time and attention.

Ladies and gentlemen, this does conclude today's conference call. Thank you all for joining and you may now disconnect.