National Oilwell Varco 2015 Annual Report Download - page 24

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Table of Contents
may be required to make significant unanticipated capital and operating expenditures. We cannot assure you that our operations will continue to comply
with future laws and regulations. Governmental authorities may seek to impose fines and penalties on us or to revoke or deny the issuance or renewal of
operating permits for failure to comply with applicable laws and regulations. Under these circumstances, we might be required to reduce or cease operations
or conduct site remediation or other corrective action which could adversely impact our operations and financial condition.
Our businesses expose us to potential environmental, product or personal injury liability.
Our businesses expose us to the risk that harmful substances may escape into the environment or a product could fail to perform or cause personal injury
which could result in:
• personal injury or loss of life;
• severe damage to or destruction of property; or
• environmental damage and suspension of operations.
Our current and past activities, as well as the activities of our former divisions and subsidiaries, could result in our facing substantial environmental,
regulatory and other litigation and liabilities. These could include the costs of cleanup of contaminated sites and site closure obligations. These liabilities
could also be imposed on the basis of one or more of the following theories:
• negligence;
• strict liability;
• breach of contract with customers; or
• as a result of our contractual agreement to indemnify our customers in the normal course of business, which is normally the case.
We may not have adequate insurance for potential environmental, product or personal injury liabilities.
While we maintain liability insurance, this insurance is subject to coverage limits. In addition, certain policies do not provide coverage for damages resulting
from environmental contamination or may exclude coverage for other reasons. We face the following risks with respect to our insurance coverage:
• we may not be able to continue to obtain insurance on commercially reasonable terms;
• we may be faced with types of liabilities that will not be covered by our insurance;
• our insurance carriers may not be able to meet their obligations under the policies; or
• the dollar amount of any liabilities may exceed our policy limits.
Even a partially uninsured claim, if successful and of significant size, could have a material adverse effect on our consolidated financial statements.
The adoption of climate change legislation or regulations restricting emissions of greenhouse gases could increase our operating costs or reduce demand
for our products.
Environmental advocacy groups and regulatory agencies in the United States and other countries have been focusing considerable attention on the emissions
of carbon dioxide, methane and other greenhouse gases and their potential role in climate change. The adoption of laws and regulations to implement
controls of greenhouse gases, including the imposition of fees or taxes, could adversely impact our operations and financial condition.
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