Operator: Good morning, my name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Weatherford International Third Quarter 2012 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. As a reminder, ladies and gentlemen, today's call is being recorded. Thank you.
I would now like to turn the conference over to Mr. Bernard Duroc-Danner, Chairman, President and Chief Executive Officer. Sir, you may begin.
Bernard J. Duroc-Danner - Chairman, President and CEO: Thank you. Good morning everyone. John will read his prepared comments. I will do the same immediately after. John, please.
John H. Briscoe - SVP and CFO: Thank you, Bernard and good morning, everyone. Before my prepared, I would like to remind listeners that this call contains forward-looking statements within the meaning of applicable securities laws and will also includes non-GAAP financial measures. A detailed disclaimer related to our forward-looking statements is included in our press release, which has been filed with the SEC and is available on our website at Weatherford.com or upon request. Similarly, a reconciliation of excluded items and non-GAAP financial measures is included in our press release and also on our website.
I will start with some remarks on the third quarter operating and capital efficiency results, then focus on the exhaustive process we are completing related to the restatement of our financial statements, the results of this work and our timing to complete the process. Last I will give some outlook for the fourth quarter and 2013. In the third quarter 2012, we generated earnings before income taxes of $191 million or $264 million on a non-GAAP basis compared to non-GAAP earnings before income taxes for the second quarter of 2012 of $164 million as detailed in the non-GAAP reconciliation table in our earnings release.
Third quarter earnings before income taxes were unfavorably impacted by the excluded items highlighted in our press release totaling $73 million on a pre-tax basis. The excluded items for the second quarter were primarily composed of $29 million for a lower cost to market write-down related to guar inventory, $27 million related to additional professional fees incurred in Q3 in connection with our income tax restatement efforts, $11 million for consent fees related to our senior notes and $6 million for severance exit and other charges.
The additional professional fees in Q3 are specific to the expanded and comprehensive procedures related to our income tax accounting restatement. These costs were higher than I expected and I'm breaking them out to give a clear view to the efforts we are dedicating to this project, a true run rate for corporate expenses as we put the tax matters behind us and the savings we will realize in a post-tax material weakness situation. Q3 professional fees related to taxes of $27 million compared to $11 million in Q2 and $14 million in Q1 and as summarized in our selected statement of operations information. In Q3, we recorded a $29 million non-cash write-down guar inventory that was purchased in anticipation of a product shortage. This inventory was purchased at prices higher than current market values and we currently plan to liquidate this position through bulk sales, rather than through consumption over an extended period. As a result, in Q4, our margins will reflect market prices for guar.