National Oilwell Varco 2010 Annual Report Download - page 15

2010 Acquisitions and Other Investments
In 2010, the Company made the following acquisitions and outside investments:
Acquisition Form Operating Segment Date of Transaction
Ambar Lone Star Fluid Services, LLC Asset Petroleum Services & Supplies January 2010
Visible Assets, Inc. Stock Petroleum Services & Supplies April 2010
Sigma Offshore, Ltd. Stock Rig Technology April 2010
Paradigm Lift Technologies, LLC Asset Distribution Services April 2010
kVA, Ltd. Stock Petroleum Services & Supplies June 2010
Power & Leasing division of Tarpon Energy Services, Ltd. Asset Petroleum Services & Supplies September 2010
Group KZ, LLP Stock Distribution Services October 2010
Big Red Tubulars, Ltd. Stock Petroleum Services & Supplies November 2010
Advanced Production and Loading PLC Stock Rig Technology December 2010
Greystone Technologies PTY Ltd. Stock Petroleum Services & Supplies December 2010
Welltronics MWD LLC Asset Rig Technology December 2010
Permian Fabrication Asset Petroleum Services & Supplies December 2010
The Company paid an aggregate purchase price of $556 million, net of cash acquired for acquisitions and outside investments in 2010.
Seasonal Nature of the Companys Business
Historically, the level of some of the Companys segments have followed seasonal trends to some degree. In general the Rig Technology
segment has not experienced significant seasonal fluctuation although orders for new equipment may be modestly affected by holiday schedules.
There can be no guarantee that seasonal effects will not influence future sales in this segment.
In Canada, the Petroleum Services & Supplies segment has typically realized high first quarter activity levels, as operators take advantage of the
winter freeze to gain access to remote drilling and production areas. In past years, certain Canadian businesses within Petroleum Services &
Supplies and Distribution Services have declined during the second quarter due to warming weather conditions which resulted in thawing, softer
ground, difficulty accessing drill sites, and road bans that curtailed drilling activity (Canadian Breakup). However, these segments have
typically rebounded in the third and fourth quarter. Petroleum Services & Supplies activity in both the U.S. and Canada sometimes increases
during the third quarter and then peaks in the fourth quarter as operators spend the remaining drilling and/or production capital budgets for that
year. Petroleum Services & Supplies revenues in the Rocky Mountain region sometimes decline in the late fourth quarter or early first quarter due
to harsh winter weather. The segments fiberglass and composite tubulars business in China has typically declined in the first quarter due to the
impact of weather on manufacturing and installation operations, and due to business slowdowns associated with the Chinese New Year.
The Company anticipates that the seasonal trends described above will continue. However, there can be no guarantee that spending by the
Companys customers will continue to follow patterns seen in the past or that spending by other customers will remain the same as in prior
years.
Marketing & Distribution Network
Substantially all of our Rig Technology capital equipment and spare parts sales, and a large portion of our smaller pumps and parts sales, are
made through our direct sales force and distribution service centers. Sales to foreign oil companies are often made with or through agent or
representative arrangements. Products within Petroleum Service & Supplies are rented and sold worldwide through our own sales force and
through commissioned representatives. Distribution Services sales are made directly through our network of distribution service centers.
The Rig Technology segments customers include drilling contractors, shipyards and other rig fabricators, well servicing companies, pressure
pumpers, national oil companies, major and independent oil and gas companies, supply stores, and pipe-running service providers. Demand for
its products is strongly dependent upon capital spending plans by oil and gas companies and drilling contractors, and the level of oil and gas well
drilling activity. Rig Technology purchases can represent significant capital expenditures, and are often sold as part of a rig fabrication or major
rig refurbishment package. Sometimes these packages cover multiple rigs, and often the Company bids jointly with other related product and
services providers, such as rig fabrication yards and rig design firms. 15