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.
FMC Technologies' CEO Discusses Q4 2011 Results - Earnings Call Transcript
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