National Oilwell Varco 2015 Annual Report Download - page 25

Download and view the complete annual report

Please find page 25 of the 2015 National Oilwell Varco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 123

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123

Table of Contents
The U.S. Congress is currently working on legislation to control and reduce emissions of greenhouse gases in the United States, which includes establishing
cap-and-trade programs. In addition to the pending climate legislation, the U.S. Environmental Protection Agency has proposed regulations that would
require permits for and reductions in greenhouse gas emissions for certain facilities, and may issue final rules this year. These changes in the legal and
regulatory environment could reduce oil and natural gas drilling activity and result in a corresponding decline in the demand for our products and services,
which could adversely impact our operating results and financial condition.
We had revenues of greater than 10% of total revenue from one of our customers during the year ended December 31, 2013.
The loss of this customer (Samsung Heavy Industries) or a significant reduction in its purchases could adversely affect our future revenues and earnings.
Samsung Heavy Industries is a shipyard acting as a general contractor for its customers, who are drillship owners and drilling contractors. This shipyard’s
customers have specified that the Company’s drilling equipment be installed on their drillships and have required the shipyard to issue contracts to the
Company. The Company had revenues of 4% of total revenue and 7% of total revenue from Samsung Heavy Industries for the years ended December 31,
2015 and 2014, respectively.
Our information systems may experience an interruption or breach in security.
We rely heavily on information systems to conduct our business. Any failure, interruption or breach in security of our information systems could result in
failures or disruptions in our customer relationship management, general ledger systems and other systems. While we have policies and procedures designed
to prevent or limit the effect of the failure, interruption or security breach of our information systems, there can be no assurance that any such failures,
interruptions or security breaches will not occur or, if they do occur, that any breach or interruption will be sufficiently limited. The occurrence of any
failures, interruptions or security breaches of our information systems could damage our reputation, result in a loss of customer business, subject us to
additional regulatory scrutiny, or expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on our
financial position or results of operations.
24