Karen David Green – Vice President, Investor Relations and Corporate Communications Bernard Duroc Danner – Chairman, President and Chief Executive Officer Krishna Shivra – Executive Vice President and Chief Financial Officer.

Jim Crandell – Cowen Securities Bill Herbert – Simmons and Company Jim Wicklund – Credit Suisse James West – Evercore ISI Ole Slorer – Morgan Stanley Scott Gruber – Citigroup Byron Pope – TPH.

Good morning. My name is Lori, and I will be your conference operator today. At this time, I would like to welcome everyone to the Weatherford International First Quarter 2015 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, then reenter 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 Ms.

Karen David-Green, Vice President, Investor Relations and Corporate Communications. Ms. David-Green, you may begin..

Thank you, Lori, and good morning, everyone. With me on today’s call we have Bernard Duroc-Danner, Chairman, President and Chief Executive Officer; and Krishna Shivram, Executive Vice President and Chief Financial Officer.

Before we start our comments, I would like to remind our audience that some of today’s comments may include forward-looking statements and non-GAAP financial measures. Please refer to our first quarter press release for the customary caution on forward-looking statements and a reconciliation of non-GAAP to GAAP financial measures.

I’d like to also announce that we are hosting this call from Geneva. And now, I’d like to hand the call over to Krishna..

Net debt increased by $269 million to reach $7.3 billion at the end of the first quarter, reflecting negative free cash flow of $266 million for the quarter. Our free cash flow performance, although negative, has been the best first quarter free cash flow performance for many years.

In 2014, we consumed $692 million in the first quarter, including the government fines of $253 million. The free cash flow from operations reflected the negative earnings, payments for severance costs, cash taxes, and interest, and negative cash flow on our Zubair contract in Iraq.

Severance payments totaled $65 million, while Zubair consumed $58 million. Cash tax payments amounted to $88 million, while interest payments totaled $169 million for the quarter.

Working capital balance is reduced by $37 million with a reduction in accounts receivable balances partly offset by lower accounts payable balances, reflecting the lower activity levels. Inventory balances were relatively flat while CapEx at $224 million was on track with our spending plan.

Seasonally, DSO usually increases in the first quarter of each year. This year was no exception. DSO deteriorated by 10 days, while DSI or day sales of inventory, increased by 20 days with the receipt of materials ordered late last year.

Given that both DSO and DSI will improve going forward, working capital will continue to generate positive cash flow through to the end of this year. Our capital expenditure plan for the year has been revised down by another $50 million to $850 million, which is 41% lower than 2014 levels.

In the second quarter, we expect severance payments to reduce, Zubair to be cash neutral to cash slightly cash positive as milestones that are achieved trigger cash payments, continued improvements in working capital, while cash interesting tax payments will reduce by over $120 million versus the first quarter.

The combined effect of these items will secure positive free cash flow in the second quarter and bring us close to being free cash flow neutral by midyear. With the second half of the year seasonally better from a cash flow perspective, we fully expect and we are very confident to be free cash flow positive for the year.

In summary, we believe that we have managed the down cycle well with overall decrementals that are comparable with the best of our peers, with our sequential and year-on-year international margin improvements being best in class. With that, I will now turn the call to Bernard..

Saudi Arabia, Abu Dhabi, and Kuwait. MENA will be markedly stronger in 2015 and 2014, really for Weatherford-specific reasons. The turnaround is here to last. Weatherford’s MENA is on the long-term structural expansion for us. Russia. Russia is severely hit by the ruble exchange rate.

From an incremental business volume standpoint, our Russian region will do well, driven by contractual gains in formation valuation and well construction. All-in, Russia will not be a headwind. Russia will, in fact, progress year-on-year but held back by client liquidity and foreign exchange.

SSA will experience as a market activity slowdown and project delays, clearly. Our operations, though, will continue to build on broad technological successes, number of product lines, and overall market penetration. To a large degree, it’s a little bit the same as in Middle East; there is some elements of reboot going on in SSA for us.

And as a reminder, we have a large backlog in SSA. Now Europe activity, but not Caspian, will weaken some from Q1 levels. There will be some countercyclical areas of seasonal improvements, but essentially client activity will remain muted. Within that region, the Continental market will be the most affected, weakest; the U.K. will be the most resilient.

For us, the European and Caspian region is a year of continued market penetration of cost efficiency. Asia is the one exception in the Eastern Hemisphere. Asia will experience substantially lower activities the balance of the year, driven by severe budgetary cuts in Malaysia, Indonesia, and Australia, while China will remain anemic.

In Asia, only cost can make a difference at this point and our aggressive cost actions underway in that regional market should mitigate the decline. Latin America experienced in Q1 serious market contraction in Mexico and Colombia, but it continued to build strength in Brazil and Argentina.

The balance of the year we expect further market weakening in Colombia and possibly also Mexico. Venezuela will appear to be weakening, but it is entirely the foreign exchange effect. Activities like this remain quite strong in Venezuela. As we continue to operate in that market, we have reduced our net bolivar risk exposure to very minimal levels.

We expect Brazil to continue building strength throughout our well construction technologies. We have multi-year backlog of about $800 million in Brazil alone. In Argentina, we expect to broaden further our presence, covering almost all of our core product lines and the fast-developing activity in the shale play.

Argentina and Brazil are today our two largest markets in Latin America. They have replaced Mexico, the undisputed leader in years past. Both Eastern Hemisphere and Latin America all-in will show relative strength throughout the 2015 market decline. We will, in effect, outperform the market.

Our internal plans are to deliver roughly similar profitability year-on-year 2014 on 2015 for the overall international segment. For us, North America is the issue in 2015. We expect North America to remain very severely impacted by both volume and price. We’re gearing up for a year of very low activity and depressed pricing, both in the U.S.

and Canada, which will not be any better. Activity curtailment will be matched by lowering our direct costs aggressively. The lowering of the company’s overall support cost structure, which I discussed earlier, will also partly help. Our ability to manage the NAM downturn is paramount. We understand this.

We’re taking a very serious cost and restructuring action in the U.S. throughout the year, the likes of which Weatherford never experienced. And cost and efficiency drives pay dividends. We expect to return to profitability for NAM in the second half of the year through cost action alone and enter 2016 a much leaner and focused NAM operation.

We also expect lift – artificial lift to our profitability in the second half of the year. Lift was hurt in Q1 by client destocking activity for new equipment, which given the steepness of the decline is not surprising – market decline, that is.

Concurrently, we deteriorated our short-term profitability by aggressively scaling back supply chain, generating very large unfavorable manufacturing variances in Q1. As a reminder, lift is very supply chain-intensive, as is completion. Most likely, by Q3, client inventory levels will be absorbed, while our supply chain will have fully adjusted.

This will help both the U.S. and Canada’s results in Q3 and Q4. Direction – you know our direction. As bad as market conditions are this year, there is a silver lining. This is a kind of market in which we can make fast and deep cost progress and also effectively redirect our culture and rebuild a strong bench.

Our action centers around improving three things and doing so in a structural way – costs, both cyclical emphases on structural; cash generation as a culture; and, the third, our talent bench and talent development. We’re taking strong action and take this market – on all three and take this market as an opportunity as much as a punishment.

Macro-related strength – we maintain the same view. At present levels of activity worldwide, decline rates are not being arrested, let alone an expansion of capacity. Specifically, we believe decline rates in the international reservoirs will lower oil production capacity at least 1.5 million barrels per day by year-end 2016.

This number is conservative. U.S. decline rates in the same period of time will lower production capacity by a range of 0.5 million to 1.5 million barrels per day. The mid-point of 1 million barrels per day, again by year-end 2016, is our working assumption. This number is also conservative.

And demand for combined 2015 and 2016 will consume an incremental 2 million barrels per day. This isn’t a controversial assumption. If you add these numbers, it leads to the following observation. There isn’t capacity in operation or in existence to accommodate sustainably a swing of 4.5 million barrels per day.

You can derive your own conclusion on the oil market’s prognosis. For the very near term, a few observations.

In the Middle East, all the talk about financial reserves and the ability of senior OPEC countries to take low prices for an extended period of time are coming up against the reality that these funds are not going to be replaced for a very long time. And parallel wars in the region add major costs that were not part of the plan.

I suspect, also, in the Middle East, we’ll start seeing some delicate moves to try to pare down production. Growing domestic demand in summer alone will be a major element, reducing capacity available for exports. This will add a constructive tone to the market in H2 2015.

Now, on the other side of the ledger, the release of Iran in the oil markets pushes the balance back in the red. Within six months of sanctions’ end, probably 600,000 barrels a day – possibly as much as 800,000 barrels per day of incremental production could be released.

Aside from the near-term imbalances made worse, I would remind all of you that Iran is much more of a gas than an oil play. The Iranian reservoir base is a giant gas cap. In the long-term Iran is a major headache for Gazprom, not OPEC.

As a synthesis, macro analysis suggests the oil industry is underfunded and underinvested and that current prices will be challenged to deliver needed oil supplies in 2017. Meaning oil demand couldn’t be met by oil capacity as early as 2017, which is unthinkable. We reiterate the best assessment we can provide for the year, for this year.

Our international performance will be resilient. NAM will remain very challenged. We intend to aggressively address direct and indirect costs companywide in reaction to the market and for the company’s long-run transformation, and we intend to simultaneously build our talent bench.

We have nine to 12 months to make Weatherford efficient, low-cost, with a talent bench and talent development process we have never had. Weatherford will be efficient, lean, and organizationally flat. It needs to be for our clients and our shareholders. We must put this brutal recession to good use. We are determined to do so.

With that, I will turn the – I will return the call to the operator for Q&A..

[Operator Instructions] Your first question is from Jim Crandell of Cowen Securities. Your line is open..

Okay. Thank you. Good morning, everyone..

Good morning, Jim..

Bernard that was an excellent rundown. Krishna, too. And I may be – I may have missed these comments, but essentially you’re talking both in North America and internationally your base plan is for no improvement in activity. And your results will improve in the second half in all regions, mainly as a result of cost reductions.

Where – can you give us, as you enter 2016, what you would think would be a run rate for margins and profitability going into the year? So as you are poised then to benefit from increased revenues, we can better estimate sort of profit potential going forward..

So, Jim, we are comfortable to say that the exit rate for North America by year-end will be mid to high single digits, given our cost reduction plans and our expectations for activities. So that will be our exit rate in Q4. And internationally, we’re looking at high teens at the very least, if not approaching 20% operating margins, going into 2016..

Okay. My follow-up is could you talk a little bit about the differences in North American product lines? I think if you looked at your different product lines in the past, we’ve had losses in pressure pumping, fairly low profitability in formation evaluation, and then stellar profitability in everything else.

Do you still have huge differences in profitability in different product lines or have the good ones come down meaningfully at this point?.

A little bit of both. If you look at the performance, you’ll find that TRS cementation, our liner hangers are done at absolutely excellent margins. You’ll find that rental tools or drilling tools and stimulation have been devastated, stimulation being the worst, clearly.

You will find that lift was resilient, albeit lift and completion both in Q1 took on some serious manufacturing unfavorable variances. There’s no way around it, Jim. We slammed the brakes towards the end of December, early January on a very heavy supply chain.

90 days to shut things down volume wise, creates really some very, very serious unfavorable variances. They will not last. If you exclude that actually analytically, the performance of completion liquid would have been very, very much what you would expect.

Formation evaluation was also on the sort of on the red side of the ledger, not in terms of losses, in terms of being the ones that did not do well because they were not that profitable to begin with. So let me summarize. Anything that has to do with well construction did very, very well.

Lift and completion did honorably, but not as well as they would have done simply because of manufacturing, especially the manufacturing slowdown, which is so drastic. And FE and rental tools and stim, stim being the worst by far, did miserably. So in many ways, other than manufacturing issues which are predictable, it is what you would’ve expected..

Okay, good. Thank you..

Your next question comes from the line of Bill Herbert of Simmons & Company. Your line is open..

Thank you. Good morning or good afternoon for you guys. Well done, by the way. I thought it was a pretty commendable quarter given the backdrop..

Thank you, Bill..

Bernard, if you could elaborate a little bit with regard to the international margin roadmap. And I guess the biggest challenge here for me is just looking at what to expect for a normalized MENA margin, given that we are coming from such a sort of oppressed level.

What should we expect for a normalized margin for MENA and really the roadmap for international margins in general for the balance of this year, please?.

MENA is 2015, end of 2016 process. It will take that much time I think to get where I think we can go. MENA closed the year in 2014 essentially high single digits at the operating income level, and we expect it to -- between then and Q4 this year to be mid-teens. 500 basis point improvement essentially, gradually throughout the quarters.

I will remind you, you know this. Before we got in a period I think of self-construction, etcetera, MENA had margins on average of 25% of the operating income line.

Now, in an environment like this one perhaps it wouldn’t have that because it is affected too, by the environment, but I don’t think 15% as an exit rate in 2016 would be what -- even if the market continued the way it is today, I don’t think this is what we would expect for MENA in 2016. It will continue to progress.

Don’t want to give you an indication yet on the rate of progression in 2016, it will be getting ahead of ourselves, but I do think the mid-teens for MENA as an exit rate is a reasonable assumption. And assume it is today essentially a low teens..

Right.

So broadly speaking, even with the advent or the continuation of pricing pressure internationally, margin resilience for international is expected to continue and MENA expected to normalize higher due to years of underperformance?.

That’s right. There’s a number of markets, in which we were suppressed and I’m not sure I want to elaborate to you the details of where we were suppressed, but it’s not only in MENA. It’s the same phenomenon in SSA. Some of the key markets in SSA, such as Angola. These markets are ones we are not suppressed anymore.

There is a – we talk about a reboot or restart. There is a reason for that. At the same time, we try not to make the mistakes we made in the past. I talk about better discernment. It’s a polite way of saying that we’re not going to mess up and take contracts and get involved in businesses that we shouldn’t be in, very disciplined.

So a combination of the absence of negative and also being able to compete in the markets where we used to be able to compete, and we actually were pretty good at it. It’s a combination of both and makes for essentially rebuilding our presence. And truly that’s all it is. That’s why we are a little bit different than others..

Got it.

And in a similar vein, how should we think about the margin roadmap for land rigs, please?.

So the land rig business, Bill, has been rebooted under new management and the new management has shaken the product line from top to bottom.

It’s much more efficiently run today, and we expect that given that the international land rig count is under pressure both from pricing perspective and also from land rig count perspective, we think that we’ll have to exercise extreme cost management to stay at the mid single digit margins.

And that’s our goal is right through this year, despite pressures to reduce pricing and lower rig count, we will expect to maintain at least a mid-single-digit margins through the year..

Very good. Thank you, sir..

Thank you..

Your next question comes from the line of Jim Wicklund of Credit Suisse. Your line is open..

Hey, guys..

Hi, Jim..

Congrats on a good relative performance and good job I think on addressing the free cash flows you took early. My first question, Bernard, a while back when you were starting with the divestiture program you considered getting rid of pressure pumping.

Considering how much money it’s going to lose this year, I know you guys have said that you need to keep it for the validity of your completion tool business.

Have you rethought that in this market?.

Well, I think, we haven’t made a decision yet. I think, I will just say that the pressure pumping business needs to be consolidated and we will not be the ones to do the consolidation. I can tell you that much..

That’s a good thing, that’s a good thing..

But it needs to be consolidated and I think just need to have agents of consolidation. Maybe there are agents of consolidation in the marketplace. Again, it will not be us..

Thank you. That answers my question. My follow-up, you said that the changes that have to happen must be structural and your focus you said was on the efficiency of our support structure. Okay, Halliburton went through Battle Red and Frac to the Future.

Schlumberger is going through a transformational effort and all these seem to be efforts to fix or improve the efficiency of your underlying business, not kind of inventing a new tool.

How is your jihad on this efficiency of our support structure different or the same from what the other guys have gone through?.

Jim, it’s actually quite simple to understand. Weatherford historically has been a collection of acquisitions, and they were partly integrated. Some businesses were fully integrated, some were partly integrated.

So each business had its own support structure, its own way of collecting information in every function, whether it’s finance or HR or IT or legal, and etcetera. What we are doing now is basically completing the integration process, simplifying the work, standardizing everything we do so we need less people to do it.

And you speak the same language in every business, in every geography as we go forward. This process is still underway. It’s halfway through and there’s plenty more to come in terms of structural efficiency, so we are just working our way through that..

The other way to look at it, Jim, which is wholly consistent with what Krishna said, is to say we are immature and we are maturing. Saying we are immature is a polite way of saying, we are more inefficient than the two other companies that you mentioned.

Put another way, it’s easier for us to make progress on the overhead and support that is for these companies. They are better managed, but we’re younger. We understand that; we’re just taking action to try to mature. That’s what Krishna was explaining..

Okay, thank you very much -- and you are doing a good job growing up. Thanks guys. I appreciate it..

Your next question is from James West of Evercore ISI. Your line is open..

Good morning, guys, or good afternoon..

Hi, James..

Just on the headcount reductions that are pretty large and pretty large in North America, how do you think about maintaining flexibility to ramp back up if indeed this cycle does come back quicker than maybe Street consensus is suggesting right now?.

Well, we are not alone in these cost-reduction efforts. As a percentage of head count reduction in North America, James, it’s very similar to what the other companies are doing. So arguably there’s going to be a lot of people available in the market.

The main thing is to keep in touch with customers and their needs and when they start back up, and planning that recovery in advance. And we believe we have a sales force and a management structure to do exactly that. So if you maintain daily contact or weekly contact with customers and you can foresee what’s coming up, you can react faster.

That’s basically it; there’s no silver bullet here, but we think we will have the capability to bounce back if the need arises..

And in the facility closures, those are going to be permanent, not just kind of near-term?.

Yeah, they are permanent, Jim, but we have -- we are long facilities. You don’t have to worry about that. I think the question concerning the human resources is a very legitimate question and, as Krishna says, an industry issue at the end of the day. But facilities were long facilities, you don’t have to worry about that..

And arguably, James, if and when North America rebounds, there will be, of course, a permanent loss of people from the industry as a whole..

Absolutely..

And there will be a shortage of people first before there is a shortage of equipment and that will be the constraint, so....

But I will say again, this whole business about overhead and support functions being semi-fixed as opposed to variable, the key is when the turn comes that the number of these people does not increase in sync with the directs, such as the leverage.

This is a different sort of -- it’s a different answer than what you are asking and the question you are asking, but that is also terribly important for us..

Of course, because you’re going to have much more earnings leverage coming out of this..

Precisely. That we never had in the past. We’ve never had in the past..

Right, right. One last follow-up for me.

On the Zubair payments, Krishna, can you remind us the timing of those payments and if those are set in stone?.

Yes, in fact we just signed the settlement agreement with our customer. Basically there are three sites, James; Zubair, Hammar, and Rafidiya. There are three physical sites. We really loosely refer to the whole thing as the Zubair contracts, but in fact underneath that contract there are three sites.

And each of the sites has to achieve three milestones, so there’s nine milestones to go. There are three mechanical completion milestones, three RFC or ready for commissioning milestones, and three PAC or performance acceptance certification milestones.

Of the nine, three milestones, the first milestone, the mechanical completion milestone, for each of the sites is expected to be fulfilled in the second quarter, which will trigger payments to us. And that’s why we will be cash positive on Zubair in the second quarter itself.

The RFC deadlines that we expect, based on our current schedule, we expect to hit them in the third quarter. And the PAC, two of the sites we will hit in the third quarter and one site early fourth quarter. So we will have triggering payments in the third quarter and fourth quarter concurrent with hitting those milestones as well.

We are comfortable to say that given the current schedule and the payment agreement terms that we have just signed with Eni, we should be cash positive on Zubair in each quarter of the year going forward..

Okay..

So that will be cash neutral by year-end for sure..

Perfect, great. Thanks, guys..

Thanks James..

Your next question is from Ole Slorer of Morgan Stanley. Your line is open..

Yeah thanks. First of all, just a general question, Bernard.

How have your conversations with your key international and OC customers changed lately in light of certain consolidations that are going on amongst two of your three main competitors?.

Well I think you know the answer to that question, which is, I think everybody has become more interesting to the NOCs, including us, simply because it’s human nature. You don’t like domination, you don’t like duopolies. It is as simple as that. So it’s also true for us that we have become more interesting, so yes..

Any more specifics you can provide, or should we leave it at that?.

Well I think I would rather leave it at that. I think the consolidation opens up opportunities for a number of companies. It is also true that our opportunities have to be matched with our resources, our quality of performance, technology, et cetera, et cetera, so we don’t take this as a low-hanging fruit. We just have to work for it.

There’s a few markets which we focus on. Some of those markets may be helped by the consolidation, true, but then again I think we don’t view this as a walk in the park at all. Even though the client will tend to pull you in as opposed to your being -- trying to push your way in, which is true..

A clarification.

International margins, did you mean that year-over-year 2015 over 2014 they should be similar, or sequentially from the first quarter similar, or both?.

We said it would be similar to the first quarter going forward -- similar or slightly better is our forecast right now. So year-over-year it will be better by between 200 to 300, 400 basis points year-over-year, but it will be flat to slightly better versus the first quarter..

I think the idea is that for the international segment, operating income should be roughly similar Q1 on Q2. Don’t – with lower revenues, yes. They will be roughly similar Q1 on Q2 international; some up, some down so very comparable.

We do not know, because this is hard to know with precision, whether it will be a few million up, a few million down, but essentially flat, what you call flattish. So in essence, Q1 would be the low point, the international profitability performance.

And then in the second half of the year, looking at the detail of what we’ve done, on the cost side the detail also of some of the markets where we have specific self-help, it is not unreasonable to expect the international margins in Q3 and Q4 – even though we don’t expect any market improvements at all.

As I said, markets will remain weak for the whole and for the balance of the year with some particular pockets of weaknesses, like Asia for example. We do expect the international margins, overall, to be better in Q3 and Q4 than Q1 which will be similar to Q2. That’s what we are saying..

I think that stops me. That’s two questions, but congrats on having LatAm be your biggest profit center. That’s a welcome change from a few years ago..

Thank you, it is..

It is most welcome..

Your next question comes from the line of Scott Gruber of Citigroup. Your line is open..

Thanks.

Staying on the topic of industry consolidation, Bernard, how are you thinking about managing your international footprint today? Is the share gain opportunity impacting planning decisions today? Are you willing to carry some excess people and capacity to --?.

It’s a good question. The answer is, yes; in moderation, yes. I think on the facility, I said before we are long facilities so we have really no issues of investigating in bricks and mortar. But your question is on point.

We are careful about not taking any, I think, undo decisions on curtailing certain infrastructure which we believe might be helpful in all probability in quarters ahead. So we’re not curtailing infrastructure internationally, precisely because of opportunities that are likely. On the people side, very selective.

I think it is more for us to do with the – we try to upgrade our talent bench. Trying to upgrade it internally, improving our HR capabilities. The manner in which we recognize talents internally and promote them and so forth is something that we have always done, but I’m not sure we did it as well as our peers do it.

So we have a few things we can learn from our peers and we are doing that in place. It is also true that we may add some talents from the outside. So I think, to answer your question there, we are likely to be keeping some talents that we would otherwise then go into the international markets, true.

We are likely also to bring in some talents from the outside the international markets for that same reason, which is to upgrade our capabilities from a people standpoint. So all this is true. It is not big numbers, Scott. We’re talking about really it’s in the 10s of people, maybe in the 20s of people, that sort of number. It’s not a big number.

And these are talents that have technical capabilities, sometimes sales capabilities, all of the – this sort of talent..

Got it. And an unrelated follow-up. Are you in the process or are you planning to retire Frac capacity in the U.S.? If you could provide some details around order of magnitude of your --..

Yes. I think not so much retiring, Scott. I think we are, what? You call it -- maybe stacking is what you mean by retiring, so that’s probably a polite way of saying it. I think by the end of Q2 we are very likely to have half of our fleet stacked, pressure pumping, simply because it is not economic to take on work at certain prices. End of story..

But nothing getting scrapped completely? That capacity can come back?.

No, no. It’s actually quite -- unfortunately, or fortunately depending on your viewpoint, our equipment base is actually quite recent, as in anywhere from five to eight years. So, no; the answer is no -- and well-maintained, so the answer is no. We would stack it and stack it properly. We wouldn’t scrap it. There’s no reason for that..

Okay. The stack [indiscernible]..

Yes..

Your next question comes from the line of Byron Pope of TPH. Your line is open..

Good afternoon. I have a couple of quick questions on Latin America. I think I heard you say that Argentina and Brazil are now your two largest markets within the Latin America region, and I’m curious as to whether they crossed that threshold in Q1.

And then second question is, as we think about the $800 million of backlog that you have in Brazil, clearly that is over a multiyear period, but how to -- I think about that as being well construction-related.

So how should we think about the progression of those contracts ramping up, given the current stagnation in deepwater drilling activity in Brazil?.

I think, first of all, let’s deal with Brazil first because of the backlog. You should think about the backlog as being one that will be delivered over the next 2.5 years, three at the most. So you are talking about $250 million per annum, something like that.

The big chunk of the backlog has to do with managed pressure drilling and that technology is being installed on rigs that are being operated and owned by Petrobras.

So as a consequence, it is a very, very structured program, very -- with lots of long-term planning and so forth to make sure that everything is installed at the right time, at the right spec, et cetera. So that is just very much a manufacturing and an installation perk shop that follows between now and the end of, say, 2017.

The pecking order in Latin America is rather remarkable. You really don’t -- I mean it’s remarkable when you look at the numbers. Mexico was by far, by far the leader.

So if you think of the market in Latin America as being made up of many, many different countries, but about five large markets, you know what they are Argentina, Brazil, Colombia, Venezuela, and Mexico, right?.

Right..

Well, Mexico was by far the largest. Mexico is the smallest of the five today, which is quite an extraordinary change from number one to number five out of five. Argentina and Brazil I think are already in number one, number two spot in Q4. They became the more so number one, number two in Q1.

And then the rest of the pecking order is essentially Colombia, Venezuela, and then Mexico is last..

Okay, that’s helpful. Then just one quick unrelated follow-up as it relates to the core businesses. Krishna, you typically give the margins for the core service and products.

Going forward will that no longer be the case? I heard you give the overall core margin, but just curious as to how you guys are going to precede going forward with that?.

So Byron, yes, now our regional results reflect the total of the core businesses. And clearly now, going forward, our investors, external world has a clear idea of our core margins. We don’t see the need to break it down any further between product lines for competitive reasons. I think in this market we feel that is appropriate.

So, yes, we will soon give you the total core margins; they will be evident in our results, but we won’t break it down further by product line going forward..

We might provide stimulation, though..

Yes, stimulation would be – we did speak about indirectly by talking about the margins with and without stimulation..

Because it is so different..

It is different, yes..

It is so terribly different..

So for example, this quarter the margins without stimulation were 12.1% versus almost 9% of the overall core business..

Because again the economics are so terribly different for us in stimulation..

Thank you..

I think that – thank you, Byron. I think that concludes our call since we are just passing the hour, the half-hour but one hour of the call. Thank you very much for your time and attention. We’ll just close the call now..

Ladies and gentlemen, this concludes today’s conference call. You may disconnect..