Bradley Alexander - John T. Gremp - Chairman, Chief Executive Officer and President Maryann T. Seaman - Chief Financial Officer and Vice President Robert L. Potter - Executive Vice President of Energy Systems

Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division Douglas L. Becker - BofA Merrill Lynch, Research Division William Sanchez - Howard Weil Incorporated, Research Division Joseph D. Gibney - Capital One Southcoast, Inc., Research Division Mark S. Urness - Credit Agricole Securities (USA) Inc., Research Division Robert Connors - Stifel, Nicolaus & Co., Inc., Research Division Robin E. Shoemaker - Citigroup Inc, Research Division Edward Muztafago - Societe Generale Cross Asset Research Brian Uhlmer - Global Hunter Securities, LLC, Research Division Robert MacKenzie - FBR Capital Markets & Co., Research Division

Good morning, and welcome to the FMC Technologies Fourth Quarter 2011 Earnings Release Teleconference. [Operator Instructions] In the event of technical difficulties during this call, we will post updates at www.fmctechnologies.com/earnings. Thank you. Your host is Brad Alexander, Director of Investor Relations. Mr. Alexander, you may begin your conference.

Thank you, Angela. Good morning, and welcome to FMC Technologies Fourth Quarter 2011 Earnings Conference Call. Our news release and financial statement issued yesterday can be found on our website. I would like to caution you with respect to any forward-looking statements made during this call. Although these forward-looking statements are based on our current views and assumptions regarding future events, future business conditions and our outlook based on currently available information, these forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. I refer you to our disclosures in our 10-K, 10-Q and other filings with the SEC. Additionally, we have changed our reporting structure to better reflect our strategic priorities. An 8-K was filed with the SEC that restated past results under the new reporting structure. All results discussed during the call will be reported using our 3 new segments, Subsea Technologies, Surface Technologies and Energy Infrastructure, unless we indicate otherwise. I will now turn the call over to John Gremp, FMC Technologies Chairman, President and CEO. John T. Gremp: Good morning. Welcome to our fourth quarter 2011 conference call. With me today are Maryann Seaman, our CFO; and Bob Potter, our Executive Vice President. I'll start with some highlights from the quarter and for the year. Maryann will provide specifics on our financial performance and our outlook for 2012, and then we'll open up the call for your questions. Regarding the results for the quarter [Audio Gap] earnings were $0.41 per diluted share for the quarter and $1.64 for the full year, a 7% increase over our prior year performance and our 10th consecutive year of earnings growth. Despite the earnings growth, our subsea results were below our previous guidance. We reached our revenue expectation, but as we discussed last quarter, the continuing challenges associated with ramping up our subsea business by almost 40% from the first quarter to the fourth quarter of 2011 negatively impacted margins. We also incurred some other specific costs, which I'll discuss later. Total company revenue was $1.5 billion for the quarter and $5.1 billion for the year. Fourth quarter operating income was $166 million, bringing our 2011 total to $619 million. Subsea Technologies inbounded $1.3 billion of awards in the fourth quarter, bringing our full year total to $3.9 billion. Our backlog now stands at $4.1 billion. Revenue for the quarter in Subsea Technologies was $964 million, an increase of 38% over the prior year quarter and 16% sequentially. This volume is a record and enabled us to reach $3.3 billion in revenue for the year. In 2012, we expect to generate approximately $4 billion in revenue, and our fourth quarter revenue of almost $1 billion supports this target. Margins, however, for this segment of 7.2% in the quarter were clearly below our expectations. The margin shortfall was largely related to our Subsea Eastern Region. In the quarter, we took a charge related to the Laggan-Tormore project for $19 million due to increased cost associated with an engineering interface issue. In addition, it was necessary to add resources to execute the project within the customer's need date. Additionally, we recognized cost primarily associated with anticipated project delays on West Africa projects, where we're not on schedule to meet our customer's contractual delivery dates. Finally, as we respond to growth in our subsea business, we continue to experience higher labor cost associated with our expanding workforce. We've also increased our R&D spending as we accelerate the development of our subsea portfolio. Surface Technologies' fourth quarter revenue of $374 million was up 38% from 2010 and 11% from the third quarter, driven largely by North American shale activity for both fluid control and surface wellhead. International activity has improved for surface wellhead as we've recovered from the challenges we faced earlier in the year, and orders that were delayed are now starting to ship. We're pleased that these issues from the first half of the year are largely behind us. Energy Infrastructure fourth quarter revenue of $151 million increased 21% from 2010 and 17% from the third quarter as we experienced a traditionally stronger fourth quarter. Returning to our subsea business. In the fourth quarter, we inbounded 43 subsea trees, bringing our 2011 total to 165 trees. This represented 53% of the total market, in which 311 trees were awarded. Our frame and alliance agreements with many of our partners again contributed significantly towards our ability to achieve another strong year of awards. During the quarter, our inbound included 3 large project awards in our Asia Pacific region. Both Chevron's Wheatstone project and Woodside's Greater Western Flank Phase 1 Project off the coast of Australia are gas projects we won during the quarter. We're supplying our enhanced vertical deepwater trees on both of these projects as they're ideally suited to the high-pressure wells in these fields. In addition to these 2 projects, we also were awarded the balance of the Shell Prelude project, which included the manifold. Turning to Brazil. We reported during our last call we had successfully delivered the Marlim deepwater processing systems to Petrobras on schedule. As it stands, subsea installation has been completed, and topside modification work is in progress. Once completed, the system will be commissioned, and Petrobras will begin its evaluation of this new technology. We continue to be encouraged by the future prospects for this technology and the interest in the market it's receiving. For 2012, we're looking at continued subsea revenue growth and expect our overall project execution to improve as we move throughout the year. We will continue to add physical capacity and headcount as we see the subsea market rapidly expanding over the next 5 years. These costs will impact our near-term margins, but they're necessary to put us in position to meet our long-term growth profile. Focusing on 2012 award opportunities. In West Africa, the anticipated passage of the Nigerian tax law along with the increased activity in Angola should help assure more projects are awarded. In addition, the Gulf of Mexico is likely to see improvement as permitting activity continues to increase. We also anticipate in Brazil that Petrobras will need to place large awards for both pre-salt and conventional activity this year and beyond. We're optimistic that the overall subsea market will be substantially larger this year than in 2011. The project list of major awards has grown from this time last year and the project timing of awards to be more evenly distributed across the quarters. We think our subsea award total should improve assuming we don't see any of these awards move beyond 2012. Our 53% market win percentage in 2011 is expected to be lower in 2012 due to more awards coming from our non-frame agreement partners, but these awards should fill industry backlogs and ultimately improve pricing as we move throughout the year. Lastly, regarding our subsea business, we announced in January our plans to acquire the remaining 55% of Schilling Robotics. Schilling is known throughout the industry for ROVs and ROV manipulator arms as well as their control systems technology. Beyond these technologies, we think Shilling is going to play an integral part in our ability to grow in the expanding subsea environment, where the demand for ROVs should increase, and additional subsea infrastructure would require more maintenance than what has been seen historically. We've already benefited from the synergies of Schilling technology with ours, most notably, the integration of the robotic actuator design used in our Congro-Corvina separation project win last year. Part of our growth strategy includes continuing to grow our shale focus businesses. For 2012, in North America, our Surface Technology business continues to see strong demand for our frac manifolds and frac trees. Across the industry, international oil companies have increased their participation in the North America shale market. The strong oil prices and demand for liquids thus far has offset the current low natural gas prices. Our WECO/Chiksan flowline product sales remain at strong levels, and our pump backlog extends in the latter part of 2012. As our new capacity comes online, this will improve our ability to better serve demand. We're also encouraged about the aftermarket activity as frac intensity continues to increase, requiring higher levels of field replacement parts for both flowline products as well as well service pumps. Internationally, we have largely addressed the surface wellhead execution issues we encountered during 2011 and expect performance in 2012 to be strong. In summary, our 2012 outlook shows significant growth over 2011 as we look to generate approximately $4 billion in revenue in our Subsea Technologies segment, with improved margins and inbound awards exceeding the numbers we recorded in 2011. Our Surface Technologies record results reflected strong performance in the North America shale markets. As our activity here is expected to remain strong in 2012 and our international operation benefit from a full year of improved results, we expect another strong year. And lastly, with expected earnings of between $2.10 and $2.25 per diluted share representing growth of at least 28%, we expect 2012 to be our 11th consecutive year of earnings growth. Maryann will now take you through some of the financial details in the quarter and for the full year. Maryann T. Seaman: Thanks, John. Before discussing the details of our results, I will briefly explain our resegmentation. In line with our strategic priorities, we have aggregated our subsea-driven businesses in the Subsea Technologies segment. We have combined our surface wellhead and our fluid control operations into the Surface Technologies segment as these businesses are largely driven by the same trends. Both of these businesses have a focus on the expanding shale markets, which present another growth opportunity for us. Our Energy Infrastructure segment is composed of the remaining portfolio of our businesses. Now to our quarterly results. Subsea Technologies operating profit was $70 million in the quarter with a margin of 7.2%. As John said, this was clearly below our estimate of around 12% margin for the quarter. The margin shortfall to our projections for the quarter was largely the result of higher estimated completion cost for the Laggan-Tormore project, higher-than-expected charges primarily related to West African project delays and cost inefficiencies associated with the increasing workforce to support future growth. We also incurred higher R&D expenses in the quarter as we accelerated the development of our technology portfolio. The $19 million charge for the Laggan-Tormore project primarily reflects additional engineering hours and increased cost to correct an engineering interface issue. It was identified late in the project cycle, and it affected our project scope. With these additional resources added to the project, we expect to meet our customer delivery requirements. Additionally, as we achieve the higher subsea volumes and prepare for future growth, we continue to experience increased cost related to the project completion and efficiencies of our growing workforce. Although we experienced inefficiencies in the fourth quarter similar to those we have discussed in previous quarters, we believe that we will be improving productivity as our revenue and headcount growth rates stabilizes. While we continue to add headcount in 2012 to meet revenue growth estimates, the pace of the ramp-up will be somewhat slower as we believe we have sized our organization to address the higher activity levels. As a result, we expect to achieve improved productivity in 2012. Subsea Technologies inbound for the quarter was $1.3 billion, bringing our 2011 total inbound to more than $3.9 billion. We exited the year with $4.1 billion in Subsea Technologies backlog. Surface Technologies sales for the quarter were $374 million, a 38% increase from the prior year -- excuse me, from the prior year quarter and an 11% increase from the third quarter. We are continuing to benefit from our expanded service offerings in the North America shale market. We experienced another strong quarter from our fluid control business. On the surface wellhead side, we have worked through many of the execution shortfalls we experienced early in the year and delivered strong fourth quarter results. Surface Technologies generated operating profit of $76 million in the quarter with a margin of 20.4%, a 61% increase in profit over 2010 and a 16% increase sequentially. This is the result of high activity in our fluid control business as well as operational improvements and expanded frac offerings in surface wellhead. Orders for the Surface Technologies for the quarter were $404 million as surface wellhead and fluid control activity levels remained strong. Our Surface Technologies segment is also poised to have another strong year assuming the North American shale market remain strong. Backlog now stands at $578 million for this segment. Energy Infrastructure sales for the fourth quarter were $151 million, a 21% increase over 2010 and a 17% increase sequentially as both measurement solution and loading systems experienced strong year-over-year growth. Energy Infrastructure generated operating profit of $20 million with a margin of 13.4%, a 28% increase in profit over 2010 and a 45% increase sequentially. Now for the corporate items. Corporate expense in the quarter was $11.1 million. We expect this number to average approximately $12 million per quarter in 2012. Other expense and revenue net reflects expense of $15.1 million. In addition to our normal items, this amount included the previously disclosed $8.9 million expense, primarily related to an executive retirement, offset by $2.6 million in foreign currency gains. We expect this amount to range between $13 million and $15 million per quarter in 2012 subject to foreign currency fluctuations. Our fourth quarter tax rate was 28.1%, and we finished the year with a rate of 27.2%. We anticipate our 2012 tax rate in a range between 26% and 28%. Capital spending this quarter was $87 million, primarily directed towards Subsea Technologies infrastructure. For the full year 2011, our capital spending was $274 million. We expect capital spending in 2012 to be approximately $350 million. We will continue our expansion efforts in both Brazil and Asia Pacific while increasing our manufacturing and service capabilities in West Africa, all related to Subsea Technologies. We'll also continue to increase our ability to serve the shale markets through ongoing investments in our Surface Technologies segment. At the end of the fourth quarter, we had net debt of $280 million comprised of $344 million of cash and $624 million of debt. We averaged 241.9 million diluted shares in the quarter. We repurchased 1.1 million shares of stock during the quarter at an average price of just under $44 per share. We repurchased a total of 2.7 million shares in 2011 with an average cost of $41.52 per share. We finished the quarter with 17.3 million shares remaining in our share repurchase program. Looking at 2012, we expect strong top line growth in Subsea Technologies with revenues estimated at $4 billion. Our Subsea Technologies margin performance should improve as we complete the volume ramp-up, become more efficient with our workforce and have a better distribution of projects at various stages of completion throughout our facility in 2012 while operating at these higher levels. We are forecasting the revenue in the second half of 2012 to be better than the first half as we expect to experience some first quarter sequential revenue decline similar to what we have experienced in previous years. We anticipate full year margins will improve and be in a range of 11.5% to 12.5% for the year. We expect the back half of our year to be stronger than the first half. As our performance improves and as pricing -- project pricing likely increases, we should exit 2012 in a more favorable position than where it began, thus improving margins in 2013 and beyond. Our Surface Technologies segment is also poised to have another strong year as the North American shale market remains strong. This market benefits both fluid control and surface wellhead, especially in relation to our expanded frac offerings. Additionally, our surface business is seeing improved activity internationally, and we expect this to drive better performance as well. Barring a North American slowdown, we expect margins for this segment to come in between 18% and 20%. In our Energy Infrastructure segment, we see improved market conditions for our 2 largest businesses: measurement solutions and loading systems. As fourth quarter is historically our strongest quarter for this segment, we expect some sequential revenue and margin degradation but anticipate full year margins will improve in the back half of the year and come in around 8% to 9% for the year. So based on our outlook for the businesses, we are setting guidance for our 2012 diluted earnings per share to a range of $2.10 to $2.25. Operator, you may now open the call for questions.

And your first question comes from Joe Hill with Tudor, Pickering. Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Just thinking about the issues surrounding Laggan-Tormore. That project, I believe, started shipping in Q1 of '11. How far through the manufacturing process and shipment process have we gotten thus far? John T. Gremp: Let's talk a little bit about Laggan. First of all, to answer your question, we're about 70% complete on that project. The issue on Laggan, which I mentioned in my remarks, was a design interface issue. It has to do with configuring the system for a vertical tree to work on a template manifold. We don't normally do that. It was the customer's spec, and we had some interface issues we identified in the fourth quarter. We're incurring additional cost to resolve and correct those interface issues. We got a bit behind also related to that interface issue, and now we're spending money, incurring cost to get back on schedule and protect the delivery requirements to the customer. We're about 70% complete. We think we've identified all the cost associated with that issue. And the fact we're 70% gives us some confidence that we're on the tail end of this project. Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Okay. And then with regards to project completion for West Africa, what are the issues surrounding meeting the customer time line? John T. Gremp: They're -- although it's West Africa, the real issue is in our Eastern region and ramping up fast enough just to protect the schedule on these West Africa projects. It doesn't really relate to things in West Africa, suppliers in West Africa. It has to do with not ramping up fast enough, getting behind. And now, we identified in the fourth quarter, we're not going to make some of the contractual dates. So we're incurring some cost there plus cost that we're incurring, expediting cost to get us back close to schedule as we can. But this isn't really an issue about West Africa suppliers. We've been actually pretty successful in both Angola and Nigeria in managing the in-country local content. This has to do with us not ramping up fast enough, getting behind and now, incurring cost associated with those delays. Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Okay. And then when I think about the level of backlog you're currently geared to service, are we pretty much there? I mean, you're increasing headcount, you said, a little bit more slowly going forward. But what's the level of backlog you're comfortable with? I mean, obviously, you're having some teething pains as we're ramping up manufacturing. Should we expect significant additions to backlog as we go through the year? John T. Gremp: Yes. But that's -- and as I mentioned in my remarks, the subsea market is poised for an increase of more than 50%, so we are indeed getting ready for a much larger market. But we increased our activity from first quarter to fourth quarter by 40%. We added 2,000 employees in subsea, and onboarding and integrating those employees during 2010 is what challenged. We underestimated the cost of integrating those people. Now will that continue? Yes, it will continue into next year, the first half. The ramp-up rate won't be as high in 2012 as what we saw in 2011, maybe half of that or something. But it's very important for us, Joe, to get ready for the significant growth in subsea. One of the big successes of our company and what's really driven us to the leadership position is our ability to execute projects on time. And the only way to do that, in our view, is to continue our practice of adding capacity ahead of demand, and more than ever, that actually means people. So we're going to continue to add people into this year. And it still experience some of those onboarding issues that we experienced in the fourth quarter 2010, but I don't think the ramp-up will be as steep as what we saw in 2011. Joe Hill - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Okay. I guess, really, what I was trying to get at was your level of utilization relative to your current employee base and whether you were comfortable with your ability to service the current backlog at current manufacturing capacity. John T. Gremp: Yes. We're definitely comfortable servicing the current backlog. My comments were about getting ready for a much bigger backlog as we see the subsea market grow substantially going forward.

Your next question comes from Doug Becker with Bank of America Merrill Lynch. Douglas L. Becker - BofA Merrill Lynch, Research Division: You have some pretty explicit 2012 guidance, a little bit of revenue guidance in the first quarter. Just any parameters on subsea margins as we go into the first quarter? Presumably, we don't see a large charge on Laggan again, but just maybe some color around first quarter margins in subsea. John T. Gremp: Well, as I said, we believe we have identified most of the cost associated with Laggan and the West Africa projects, where we had these execution issues. But the ramp-up -- the cost associated with inefficient onboarding of new employees will continue into the first quarter, so that'll still be with us in the first quarter margin. So also, I'd say that the fourth quarter, historically, is strong for us in revenue, and then it typically falls off. There's a historical pattern where it falls off in the first quarter, and that may have a bit of a margin effect too in terms of absorption and leverage. So 2 things that would affect -- that I can think of that would affect the first quarter is continued onboarding of the ramp-up of employees and lower volume in the first quarter. But I'll give Maryann a chance to respond to that. Maryann T. Seaman: Yes, Doug. We -- as I said mentioned in my remarks, we are expecting margins in the range of 11.5% to 12.5% for Subsea Technologies. We would expect the back half to be stronger than the first half. We do see that slight ramp-up, as we're talking about, getting through the first and second quarters. But we're pretty confident in that 11.5% to 12.5% as that ramp-up has leveled out. Douglas L. Becker - BofA Merrill Lynch, Research Division: And so is it reasonable to think about first quarter just adding -- some similar margins adding back the Laggan charge? Maryann T. Seaman: Yes. So if we just take a look at kind of the impact, as we guided you roughly around 12% for that quarter versus the 7.2%, we got a couple of things, right? That Laggan was roughly accounted for about 40%. John mentioned the delays in West Africa and inefficiencies there. That's probably about 50%. We obviously do not expect Laggan to repeat again or for that matter, any other project like that. As John said, we don't have them. We haven't had them. We will see some of those inefficiencies continue, but we're expecting not to see those with respect to the project delays. Douglas L. Becker - BofA Merrill Lynch, Research Division: Okay. That's perfect. And then just on the fluid control expansion and just are you seeing any changes in orders given that pressure pump has become a little of a -- more of a controversial topic these days? John T. Gremp: Yes. And we understand that, and we -- I'll try to address that a little bit. We're all obviously aware of the lower natural gas prices. But to answer your question directly, we have not seen a downturn on our flowline order flow nor our surface wellhead, so they remained strong. I'll ask Bob to give some additional comments on the market for flowline. Robert L. Potter: Yes. And as John said, we're appropriately cautious about the natural gas fundamentals, but our fourth quarter inbound in both the surface wellhead and fluid control were at high levels. Fluid control matched their third quarter record level of inbound. Both businesses, surface wellhead and fluid control, have the highest backlog in the fourth quarter of the entire year. So we're encouraged by that, and we're going to be cognizant of what goes on with natural gas. But currently, we continue to see liquid-directed drilling offsetting that. Some benefit we're seeing from frac intensity increasing. And of course, on the surface wellhead side, we're now benefiting by improved international performance, which plugged us somewhat in the first part of 2011.

Your next question comes from Bill Sanchez with Howard Weil. William Sanchez - Howard Weil Incorporated, Research Division: John, I was hoping you could just spend a moment just to reset force, if you will, to kind of the subsea landscape, in general, right now. I know when Quest published their last forecast, they were looking at a range anywhere from 500 to 700 trees in East book, about 50% growth. I'm just curious in terms of your market share. I guess you're pegging around 40% for this year. Can you just talk about what you see in terms of timing of orders? I know we've had an environment where orders have been pushed to the right. Is that something that's going to continue? And how does pricing ultimately end up evolving this year? I think the expectation was maybe by the second half of the year, we could start seeing some better pricing, which would be positive for 2013 margins. If you could just talk a little bit about that, please. John T. Gremp: Sure, Bill. Let's talk about the overall market. We all need to be a little bit careful with the Quest numbers, but there were 311 trees that were entered in 2011. It just doesn't seem like a stretch to increase that number by at least 50% in 2012. And why do we say that? In 2011, major projects over $100 million, there was 9 or 10 major projects that were awarded. We can easily see 20-plus major projects over $100 million that could be awarded in 2012. Now they won't all be awarded, but just -- if you got 80% of awards, it's a significant increase from what we saw in 2011. Further, the distribution of these projects -- and you'll remember that in 2011, most of the projects were all clustered around the third and fourth quarter. The distribution of the projects in 2012 is more even. About 30% to 40% of them are in the first half of the year. And as you've heard me explain before, when you look at the specifics of these projects, they're well into the tendering stage and the evaluation stage. So we can see where there's 4, 5, maybe 6 or 7 projects that could be easily awarded in the first half of the year. So if even projects moved to the right, and we know that they will move to the right, they'll still make it in the year, so that's encouraging. Then there's Petrobras. In 2011, there weren't significant Petrobras orders awarded. But we know that based on the schedule for pre-salt completions as well as conventional completions, Petrobras needs to get equipment on order in 2012. We've been in conversation with Petrobras, and I'm sure the other suppliers have as well, which supports that idea that Petrobras is due for some big awards in 2012. The Gulf of Mexico, we're getting close to permitting levels and rig counts that approach pre-Macondo. There's a number of projects that have been announced that are getting close to final investment decision, so we'll see a stronger Gulf of Mexico in 2012. And then Nigeria, although we were successful in winning the Bonga project, a lot of the Nigerian projects have been delayed because of the Nigerian petroleum law, which I'm not going to forecast when that will get passed. But I think it's safe to say that they're very close and that we should see some big awards in Nigeria. So you put all that together, and it makes a lot of sense that you're talking about a total market that's going to exceed at least 50% of what we saw in 2011. So again, I don't know if we want to go to the Quest number necessarily, but we should anticipate a really strong market. Now FMC, sure, in the last 2 years, we had 60% and 50-plus percent market share driven mostly by our alliance partners and frame agreement arrangements. Those levels aren't sustainable, and we know that. There's a lot of projects that are being bid. The other suppliers that weren't eligible to participate in 2010 and 2011 will be eligible in 2012. They need to rebuild their backlogs. We know pricing will be -- continue to be intense while those backlogs are being rebuilt. So we expect our market share to come back down to more of our normal levels getting our fair share. So you take our fair share, 30% to 40%, times a really strong market, we anticipate another strong year for us in terms of awards. Then finally, your question on pricing. Before we see pricing improvement, we need to have these big projects distributed amongst the other suppliers who have yet to rebuild their backlogs. It isn't good enough for us to rebuild our backlog. It's the other suppliers that need to get comfortable with their workload. There's already been one award earlier this year to one of the suppliers that hasn't seen a big award for several years. That should help. Two or 3 more orders being distributed to the other suppliers should start to fill their backlog, and we'd start to see some pricing, I, believe, towards the second half of the year. Now we won't see it show up in margins until 2013. But I fully expect, by the end of 2012, the second half of 2012, we'll start to see some pricing improvement as these possibly 20-some major projects start getting awarded and distributed across the whole subsea supplier base. William Sanchez - Howard Weil Incorporated, Research Division: Great. And I guess just as a follow-up. As you look, John, structurally at the business now, you talked about the fact you've had to ramp up here in terms of personnel. And we've developed inefficiencies, which you've talked about for a few quarters now. But as you just structurally think about the new Subsea Technologies segment here and people try to calibrate margins going forward maybe beyond 2012, is there anything you see that's changed structurally in this business to whereby maybe you don't get back to the margins you saw first quarter of '10, which were well north of 18% in that business, but can this still be a mid-teens type of business as we think about everything kind of being executed properly and the company being rightsized and delivering efficiently? John T. Gremp: Bill, you're absolutely correct. This business can be in the mid-teens. If you listen to Maryann's number in the segment, we think we can get -- and you back out these project executions, you get to the low teens. You talk about pricing improvement and higher leverage, because the higher volumes, there's no reason why you can't add another couple of points of improvement, and you get right to the mid-teens. Absolutely, I think that's where it can end up.

Your next question comes from Joe Gibney with Capital One. Joseph D. Gibney - Capital One Southcoast, Inc., Research Division: Just a quick question, John, on services aftermarket revenue within subsea. You were referencing Gulf of Mexico getting back to pre-Macondo levels on permitting. Just curious on your annual services and aftermarket revenue run rate within subsea as that factors into your $4 billion forecast here in '12. I know, typically, it's run $600 million to $700 million. Is it still in that bandwidth? Is it rising now? Or is it still somewhat retarded a little bit by the Gulf of the Mexico? John T. Gremp: That's a good question, Joe. Actually, in 2011, we saw some pretty high numbers in aftermarket. It was running close to 25-plus percent of our total subsea revenues. So the number you quoted, actually, it's been a couple of hundred million higher than that. And with the Gulf of Mexico coming back, we would expect that to improve a little bit more. The other thing that helps us on that number is well intervention. We've got 3 systems running, hopefully there will be more. The utilization of those units keeps getting better and better, so that's contributing to the higher percentage of aftermarket. But it was actually pretty strong in 2011. I think your number is probably a little bit low for 2012. I think we'll do more than that in customer support.

Your next question comes from Mark Urness with Credit Agricole. Mark S. Urness - Credit Agricole Securities (USA) Inc., Research Division: I wanted to ask about -- John, about how you would handicap the Brazil awards, which are due sometime this year. I mean, it's going to be probably the biggest award of the year, and I'm wondering how you would handicap that. John T. Gremp: Mark, we believe the requirements for Petrobras, which will manifest itself in awards this year, are very large. We're hearing some numbers from Petrobras that are in the range of a couple of hundred completions per year. They're going to have to distribute that load across the Brazilian supplier base. And I think you know that we tend to do very well on the manifold side. We do very well on the higher-end technology side. But we like to play in the trees, and we -- I don't think there's ever been a time when we haven't been successful in getting the trees. So we would fully expect that we would get our share of the trees, but some of it's going to have to be distributed to the other suppliers in the industry just to make the numbers high enough, to be frank. Now I think there's been some reports of some execution issues by some of the other suppliers in Brazil, and I'm sure Petrobras is going to take that into consideration. We're delighted that we were able to deliver the complex Marlim project on schedule. Most of our deliveries out of Brazil are now on schedule thanks to our capacity additions that we made over the last couple years. It's really paying off for us. We're on schedule, and I think Petrobras is going to take that into account as they distribute these critical deliveries of their next pre-salt. So I think it'll be distributed. I think we'll be in the game. We'll probably have a better shot at some of the manifolds, but our performance, I think, will indicate that we'll be looked at seriously by Petrobras. Mark S. Urness - Credit Agricole Securities (USA) Inc., Research Division: Okay. My follow-up relates to the Marlim subsea processing pilot. We're all kind of anxiously awaiting the outcome of how that's going to go, and it'll come out soon. Maybe you don't want to comment on it, but we'd be interesting -- interested in hearing your thoughts. John T. Gremp: Well, again, as I've said, it's a complex project. Everybody is interested. It means a great deal to Petrobras and the others in the industry. It certainly helped that we delivered on time. The installation of our equipment has gone fine. It's been installed, but it's not operating. They have to finish the top sides work, which is not easy. It's pretty complicated, because you've got a lot of equipment that has to go on the top sides. There's not enough room. They have to move things around. It's pretty complicated. That's the work they're doing now. When that will be completed and when they'll turn on our subsea system and make it operational, I can't say. I'd -- I would -- I'll hope though that it'll happen the middle of this year. And then I'm anticipating your next question. How long will the assessment period go? I don't know. I know they're anxious, but it's important technology. So they're not going to just turn it on for a day and claim victory. So I think it'll take maybe another 6 months before they complete their evaluation, but I'm frankly just guessing here. I think, though, the thing to keep in mind is just how important this is to Petrobras. They're not going to waste any time getting this thing evaluated. But it's so important and the technology is so important for their future, I'm sure they're going to make sure that they're convinced it's doing everything that they hoped it would.

Your next question comes from Robert Connors with Stifel, Nicolaus. Robert Connors - Stifel, Nicolaus & Co., Inc., Research Division: With the growth in subsea that you see, do you see much of a mix shift of off-the-shelf type products versus what you've done in the prior 2 years and how it would possibly affect the margins? Because I think, in the past, you'd said that some -- mostly the Gulf of Mexico is more off-the-shelf type products. John T. Gremp: Yes. There -- well, Robert, there are -- I don't know about a mix difference. The thing I would say, in 2012, the awards are coming from big projects, particularly in West Africa. And those tend to be more unique than call-offs in the Gulf of Mexico or the North Sea, where we have these frame agreement, and the equipment is a little more standard. But at least, the equipment that we provide, we're providing standard components in both big projects and small call-offs. And I'll cite the big awards we got in North West Shelf, Australia: Woodside; Greater Western Flank; Shell Prelude; and then, of course, we're pleased with the Chevrolet Wheatstone. All 3 of those projects are using our standard new enhanced vertical tree design. So even though the full field layout is unique on these big projects, the components -- well, at least in our case, the components, and particularly the trees, are standardized. So I think the whole industry, at least in our case, we're moving towards the standard components. In terms of standard configuration of the whole system, big projects, not so much. Call-offs, like we experienced in 2011 and 2010, yes. Robert Connors - Stifel, Nicolaus & Co., Inc., Research Division: And then I guess just regarding more of the industry, do you think that you are further along in your expansions and obviously, the associated growing pains that go with it within the subsea market versus some of your other competitors since, obviously, your backlog has filled up a lot quicker? John T. Gremp: Right, and that's a -- that is an excellent point. I think we're different, because we rebuilt our backlog over the last 2 years. And one of the things that, that did for us was give us the opportunity to hold on to our organization and in some cases, build our organization. I think it'd be pretty hard for some of the other suppliers, who haven't maybe had a major award in a couple years and brought their backlogs down, to really support some of those kind of investments. And it's not just the money in the investments, but you have to have projects for people to work on. And I think that's one other thing that's going to help us. In 2010 and 2011, we had -- we were still running a lot of projects, and that gave us the opportunity to bring talent on, give them the experience they need so that we're ready. So yes, I think we benefited by rebuilding our backlog over the last 2 years and developing the talent. I'm very hopeful that, that's going to be one of the things that makes us a little bit different going forward and being ready for this big growth. Robert Connors - Stifel, Nicolaus & Co., Inc., Research Division: Does much of the 2,000 headcount increase within subsea, does that come from within the industry? Or is it more people who are green behind the ears? John T. Gremp: Well, unfortunately, they're kind of green. And the reason is that the subsea industry, it's very, very specialized. And as the market leader, we've got a lot of the talent. So there really isn't a pool or a population of experienced subsea technologists. You have to develop your own. And so I think one of -- that's probably one of the things that's contributing to the higher cost of integrating these very new young engineers into our organization. There just isn't a population of experienced subsea technologists out there, and our approach has been to develop our own. So those 2,000 employees, they were new -- by and large, they were new graduates learning the ropes, and it'll take several years for them to get down their learning curve.

Your next question comes from Robin Shoemaker with Citigroup. Robin E. Shoemaker - Citigroup Inc, Research Division: John, I was wondering if you could comment a little bit about subsea processing and how much of this year's much larger subsea equipment orders involves subsea processing and just where -- a few of the important milestones in that area you foresee for this year. John T. Gremp: Robin, when I look out over the next 2 years, the number of named subsea processing projects is fairly impressive. It's over 20. Now they won't all survive. When I look at this year, the number's a little lighter. It's a little less than 8. Most of them are -- this year, are boosting as opposed to boosting in separation. We tend to do -- well, the dollars are bigger, and we tend to do better when separation is included because of the separation technology that we hold. So I would say for the market, over the next couple years, it -- clearly, it is growing. This technology is being adopted. When I look at 2012, I'd want to be a little more modest about subsea processing contributing to the much higher or to the increase in subsea inbound. I think we expect to pick up a couple of subsea processing projects this year. But I wouldn't say that it'd be a real big contributor just because the dollar amounts are little bit lower, and the numbers are a little bit lower. But this is going to change over the next couple years. But I'd say for 2012, I wouldn't attribute the big increase in -- or the increase in subsea awards for us to subsea processing. Robin E. Shoemaker - Citigroup Inc, Research Division: Okay. Another question I had was going to the area of fluid control. You spoke about the greater frac intensity, higher levels of field replacement parts. In terms of your revenue stream or your backlog, is -- how big a portion of that is this kind of aftermarket ongoing servicing of installed base of fluid control equipment? Robert L. Potter: Yes. Robin, this is Bob. In 2011, we had about a 45% portion of our total inbound that was what we call CapEx or fleet build. So we expect in 2012, for that to shift more toward the field. We're looking at more like 55% field replenishment activity and a little smaller portion of CapEx in the year. Robin E. Shoemaker - Citigroup Inc, Research Division: Okay. So if -- so that's -- you're relatively stable. But if these frac-ing companies, at least in North America, stop building new fracturing fleets or slow down the pace of building new fracturing fleets, then this is an ongoing kind of repetitive business and you would expect no change there. Robert L. Potter: I -- you have to keep in mind, new frac build is not always additions to horsepower for them. They have their normal schedule for replacing the fleet as it ages, and so we always have that element of CapEx. Obviously, internationally, all the service companies that we're talking to are actively looking at expanding their fleets internationally. So you've got that element of CapEx. It's always going to be in place. So to expect a significant or wild shift from between CapEx and field replenishment is probably unlikely in our view.

Your next question comes from Ed Muztafago with Societe Generale. Edward Muztafago - Societe Generale Cross Asset Research: I was wondering if you could just maybe talk a little bit about sort of how you see the Brazilian pre-salt development play out. And I guess, specifically, by that, I mean, historically, as you know, Petrobras likes to break up awards, but the sub-salt stuff is going to be relatively non-standardized. And so do you think there's the potential for some bundling of, I guess, equipment, manifolds, trees, et cetera, when we start to see a lot of these pre-salt awards pick up? John T. Gremp: No, I don't see. There's no indication they're going to change their strategy. They -- for years, they have separated the manifolds, the umbilicals from the trees. They've separated that from the wellheads. There's no evidence that they're coming off of that structure at all. You're right in that the pre-salt trees are more complicated. They have tree-mounted controls, which is not the way the conventional ones are. So the trees themselves become more complex. And I think Petrobras has to take that in mind, because they'll be giving tree awards to suppliers who have not provided controls before. So I think that's going to be an issue for Petrobras, not for us, because we've provided controls in Brazil. The -- I think the issue for Petrobras is the sheer quantity of equipment. They -- they're going to have to spread and distribute the tree awards to multiple suppliers. And because the trees are more complex, I think they're going to have to think about that. I think that helps us. I think we'll be probably in a better position to maybe -- again, to participate in the pre-salt trees just because of their complexity. But there's no evidence that I've seen that they're -- that they have any plans to bundle and mostly, because they're just comfortable. That's the way they've done it, and there's -- I don't see an advantage to bundling. Maybe there's a disadvantage, particularly if you're worried about your supply base and providing all this equipment on time. Edward Muztafago - Societe Generale Cross Asset Research: Sure. Sure. Okay. That's fair. And then just maybe a little bit of a higher-level question here. As you guys sort of -- as we think about FTI relative to peers, when you look at Brazil, when you look at West Africa, where a good portion of the deepwater development lies, these new reservoirs are going to be largely depletion drive, and so, of course, the demand for boosting and reinjection is going to be much higher there than we've seen in some other regions. Is there something unique to FTI from a competitive position that we should think about that may put you guys in a little bit better position from your product or service portfolio for awards in those regions? John T. Gremp: Ed, absolutely. This idea of increased oil recovery, whether it relates to West Africa or Brazil, I mean, it relates to everywhere. We're leaving hydrocarbons in the reservoirs of these deepwater wells. Statoil's clearly leading the industry in increasing oil recovery. So I think that you're right. It's definitely true in Brazil and in West Africa, but don't leave out the other regions. They have the opportunity as well. And because there is this opportunity, our company has built our longer-term strategies to be sure that we're positioned to capitalize on that. That's why we've taken the leadership position in subsea separation, which is in boosting, which is specifically designed to increase the recovery rates and deal with the depletion numbers of these reservoirs. The same is true with our intervention -- our Light Well Intervention systems. One of the ways to boost recoveries, improve the depletion rates is by doing more subsea interventions, and the industry is asking for low-cost intervention methods, which we've invested in for the last 6 to 7 years. So I think what you articulated is exactly our strategy. And we feel that, definitely, in terms of subsea processing, separation and boosting, we're anywhere from 3 to 5 years possibly ahead of the other suppliers, because we now have 7 commercial applications of subsea separation, more than anybody else. So yes, I think we're -- it's an important part of our strategy. We're trying to position ourselves to have a strong leadership position through our technology and experience, because this is the next big growth area for subsea. Edward Muztafago - Societe Generale Cross Asset Research: Sure, and even outside of separation, obviously. Could you guys potentially break out or give us an idea of what just the cost overruns from West Africa were in the quarter? Maryann T. Seaman: Yes. It's Maryann. As I mentioned, 2 pieces that we're talking about, one the inefficiencies and the West Africa piece. And when we talk about the difference in the margin from what we guided it to versus what we delivered, those 2 elements together kind of account for about 50% with more of that on the West African delays as opposed to the inefficiencies. Edward Muztafago - Societe Generale Cross Asset Research: Okay. So the delays were a greater portion than the inefficiencies there. Maryann T. Seaman: That's correct.

Your next question comes from Brian Uhlmer with Global Hunter. Brian Uhlmer - Global Hunter Securities, LLC, Research Division: I have a very quick one, hopefully, one-word answer to this. The CLOV project, this was awarded about the same time for the same customer as Laggan. Is the interface design similar there that there may be an issue with that project? Or is that completely unrelated? John T. Gremp: Well, it's unrelated to Laggan. We received Laggan well before we received CLOV. As we said, on Laggan, we had this engineering interface issue, so that makes it unique. CLOV is one of the West Africa projects that is affected by the delays in the ramp-up and the cost associated with improving our delivery. But they're not related in the sense of -- they were inbounded at different times. I mean, they're all related in the sense that we're having to catch up, and they're delayed, and we're incurring cost. But no, there's no direct relationship between CLOV and Laggan. Brian Uhlmer - Global Hunter Securities, LLC, Research Division: Okay. No design. Yes, that was the question. John T. Gremp: No. No. No. They're very different. Brian Uhlmer - Global Hunter Securities, LLC, Research Division: Okay. Perfect. Okay. Following off of that, as we look at -- you built up all this personnel and staff. And we run through 2012, and based on what you're guiding us, you have a pretty decent margin exit rate. As we go into 2013, if we've got a substantial build in projects in 2012, is it believable that it's going to be tough to really improve margins through 2013 as we're back into kind of the heavy front-end engineering for all the projects that we're -- that, theoretically, are booked in 2012? Is that how we should look at kind of moving forward through to model into '13? John T. Gremp: Well, first of all, in 2013, we have the benefit for the pricing improvement that I described. So in terms of margins, we'd expect the pricing improvement in the market to start to show up in 2013. Now as we work through our backlog, in 2013, we're going to have a mix of margins. We're going to have some margins that we're executing that go back to 2011 and 2012, and then there'll be some margins that were executing that relate to an improved pricing environment in 2013. So there's going to be a mix. And depending on what percent we complete of which project, the mix is going to drive some of the margin variability. But it's all going to be trending in the right direction, because we'll be replacing lower-margin 2011, 2012 business with higher-margin -- or I'm sorry, higher-margin in 2013 on back half 2012 pricing improvements. So it'll all be trending in the right direction in 2013, but we're going to have mix of both 2010, 2011 and 2012, 2013 differences in pricing. Brian Uhlmer - Global Hunter Securities, LLC, Research Division: Okay, that makes sense. Finally, on the surface -- sorry, Maryann. Go ahead. Maryann T. Seaman: No. No, that's okay. Now if I just might give you some other color there, as we think about -- we've received this strong inbound. And now, as we continue to move out, we're going to be executing these projects at various stages of completion more evenly across our portfolio than we have kind of coming off of that 2008, 2009 downturn. So we think that'll add to the efficiency as well. Brian Uhlmer - Global Hunter Securities, LLC, Research Division: Oh, yes. That makes perfect sense. Following on the surface question, with the execution of over 20% margins this quarter and then the guidance of 18% to 20%, is that a hint of conservatism? Is there an issue with mix? Or why are we guiding for the trend to be downward in 2012 from the exit rate? Maryann T. Seaman: Yes. Well, as you know, in Surface Technologies, we've talked our surface and our fluid control businesses are a part of that. Part of that is mix, as you can understand. We -- in the fourth quarter, we talked about our improvement in our execution issues. We're going to see our international market on that side improve. We're also going to see perhaps a greater distribution in our fluid control business of well service pumps as well. So it's just a bit of mix. Brian Uhlmer - Global Hunter Securities, LLC, Research Division: Okay. But you primarily talked about improvements. I guess I'm trying to figure out what leads it to average below the exit rate on the negative side. Maryann T. Seaman: Yes. So again, surface is a larger percentage of that. And so -- and that piece is growing faster than what we're seeing in terms of fluid as well.

And your final question comes from Robert MacKenzie with FBR Capital Markets. Robert MacKenzie - FBR Capital Markets & Co., Research Division: I wanted to come back to what you talked about, John, about subsea processing this year being a couple orders. Would one of those be the Ormen Lange compression deal you expect to win? And what else would you expect to kind of recognize this year apart from that if that's the -- 1 of the 2? John T. Gremp: Well, I don't know that we expect to win Ormen Lange. We're participating in a feed. And whether or not it -- but that's definitely one that's on our target. There's a Shell project, which based on our relationship with Shell, we would be hopeful that we might be able to get that, or it's actually 2 Shell projects that we'd like to participate in. So there's a couple. I probably wouldn't put Ormen Lange at top of the list, only because I'm not as convinced it'll be awarded in 2012. But there's a couple of Shell projects that look like they might go, and we'd be positioned for those. Robert MacKenzie - FBR Capital Markets & Co., Research Division: Okay. And how would you characterize the order of magnitude of each of those? John T. Gremp: They're relatively small. We've said before that a boosting project is in the $50 million range. So they're not multiple systems in the $100-plus million range. So they're relatively small. Robert MacKenzie - FBR Capital Markets & Co., Research Division: Okay. And then wanted to come to the surface well business. I know you gave some good color in the commentary or Bob did on the fluid control orders and backlog being kind of at record levels. How would you describe the similar comments for the surface wellhead business in terms of inbounds and backlog? Robert L. Potter: Well, same thing. I mean, surface wellhead had its best quarter in terms of inbound. That's largely driven by the improvements in international that John talked about. Earlier in the year, we work sitting, waiting on a lot of the orders to come through, particularly in Asia Pacific, and that's beginning to happen. We're still -- there are certain parts of our European region that suffers, places like Egypt, places like Angola. But we're seeing pickups in activity in other places like Libya, and certainly, Iraq is picking up. Robert MacKenzie - FBR Capital Markets & Co., Research Division: Okay. That's helpful color, Bob. And then, Maryann, if you would, you kind of -- I think if I recall correctly, you guided infrastructure margins of 8% to 9% in 2012 versus close to 10% in 2011. Can you give us a feel for why the margins are going to contract there? Maryann T. Seaman: Yes. Sure. You're correct. We did guide to 8% to 9%, and it's really just a mix of the businesses included in that segment. Robert MacKenzie - FBR Capital Markets & Co., Research Division: Okay. Do you expect, as part of that, revenues to be down year-over-year? Or... Maryann T. Seaman: No, we're expecting revenue improvement year-over-year in that segment.

This concludes our fourth quarter conference call. A replay of our call will be available on our website beginning at approximately 2 p.m. Eastern Time today. We will conduct our first quarter 2012 conference call on April 25 at 9 a.m. Eastern Time. If you have any further questions, please feel free to contact me. Thank you for joining us. Angela, you may now end the call.

Ladies and gentlemen, this does conclude today's conference call. You may now disconnect.