National Oilwell Varco 2015 Annual Report Download - page 15

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Table of Contents
These pumps include reciprocating positive displacement piston and plunger pumps and high pressure mud pumps. These pumps are sold as individual units
and unitized packages with drivers, controls and piping. The Company also manufactures fluid end expendables (liners, valves, pistons, and plungers). The
Company offers popular industry brand names including: Wheatley, Gaso, National, Oilwell, MSW, and Omega reciprocating pumps.
Customers and Competition. The primary customers for the products and services offered by the Completion & Productions Solutions segment include well
servicing companies, oil and gas companies, and fabricators, as well as distributors in select markets. Competitors include: Cameron International; Circor
International; Corpro (a division of ALS); Dover; Drilquip; FMC Technologies; Forum Energy Technologies; GE Oil & Gas; Modec; SBM Offshore;
Stewart & Stevenson; Technip; Roper Industries; Weir Group; and a number of regional competitors. Management believes that on-site support is becoming a
more important competitive element in this market, and other competitive factors affecting the business are performance, quality, reputation, customer
service, product availability and technology, breadth of product line and price.

During 2015, the Company completed a total of seven acquisitions and other investments for an aggregate investment of $86 million, net of cash acquired.

From time to time the Company realigns the structure of its organization to achieve business goals, including enhanced efficiency and cost reduction. In
November, certain of the Company’s subsidiaries completed restructuring transactions intended to achieve these goals, through a strategic realignment of
certain business units. These restructuring activities include: (a) a division of National Oilwell Varco, L.P. (“NOV LP”) allocating certain assets and liabilities
associated with the Chemineer and Process & Flow Technologies business units to Chemineer, Inc. and NOV Process & Flow Technologies US, Inc.,
respectively; (b) realignment of the structure of Robbins & Myers, Inc. (“R&M”) and distribution of R&M’s equity ownership in certain subsidiaries to Grant
Prideco, Inc. (“Grant Prideco”), a direct subsidiary of the Company; (c) realignment of business units of Ameron International Corporation (“Ameron”)
including (i) the contribution of certain assets and liabilities corresponding to two divisions (respectively, the water transmission and pole products
divisions) into separate subsidiaries of Ameron, and (ii) the distribution by Ameron of all of the outstanding membership interest in Tubo-FGS, LLC (a
fiberglass pipe business unit) and certain intangible intellectual property assets to its parent Grant Prideco for strategic realignment with Grant Prideco’s
fiberglass pipe division; (d) distribution of certain intangible intellectual property assets from subsidiaries to a holding company subsidiary; (e) realignment
of the ownership structure of National Oilwell DHT; and (f) elimination of certain intercompany balances between subsidiaries through distribution, setoff or
assignment, including without limitation intercompany balances between NOV LP and certain divisions of Fiber Glass Systems, L.P., as obligors, and
Ameron, as obligee.

Historically, activity levels of some of the Company’s segments have followed seasonal trends to some degree.
In Canada, Wellbore Technologies and Completion & Production Solutions 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 Wellbore Technologies and
Completion & Production Solutions 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. Wellbore Technologies and Completion & Production Solutions activity in the U.S. sometimes increases during the third quarter and
then
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