Welcome to the National Oilwell Varco First Quarter Financial Results Earnings Call. My name is Don and I will be your operator for today’s call. At this time all participants are in a listen-only mode later we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Loren Singletary, Vice President of Investor and Industry Relations. Mr. Singletary you may begin.

Thank you, Don, and welcome everyone to the National Oilwell Varco first quarter 2013 earnings conference call, with me today is Pete Miller, Chairman and Chief Executive Officer of National Oilwell Varco, Clay Williams, President and Chief Operating Officer and Jeremy Thigpen, Senior Vice President and Chief Financial Officer. Before we begin this discussion on National Oilwell Varco’s financial results for its first quarter ended March 31, 2013. Please note that some of the statements we make during this call may contain forecasts, projections and estimates including but not limited to comments about our outlook for the company’s business. These are forward-looking statements within the meaning of the Federal Securities laws, based on limited information as of today, which is subject to change. They are subject to risk and uncertainties and actual results may differ materially. No one should assume that these forward-looking statements remain valid later in the quarter or later in the year. I refer you to the latest Forms 10-K and 10-Q National Oilwell Varco has on file with the Securities and Exchange Commission for a more detailed discussion of the major risk factors affecting our business. Further information regarding these as well as supplemental financial and operating information maybe found within our press release on our website at www.nov.com or in our filings with the SEC. Later on this call, we will answer your questions which we ask you to limit to two, in order to permit more participation. Now, I will turn the call over to Pete for his opening comments.

Thank you, Loren. Earlier today National Oilwell Varco announced first quarter 2013 earnings of $1.17 per share on revenues $5.31 billion. Included in this there is a pre-tax charge of $73 million per transaction expenses and the Venezuela Boulevard devaluation. Excluding these charges, earnings were $533 million or $1.29 per fully diluted share. Operating profits for the quarter was $816 million, or 15.4% of sales. Additionally, we announced new capital equipment orders of $3.04 billion, bringing our backlog to a record of $12.9 billion, signifying the industry’s continued preference for National-Oilwell Varco products. The total exceeds our record backlog in Q3 2008 by over $1 billion. I would like to thank all of our customers for their continued confidence in National-Oilwell Varco and to all of our 63,000 employees worldwide for their excellent efforts to meet our customers’ expectations. I would also like to welcome all of the former Robbins & Myers employees to the National-Oilwell Varco family. Now, I will turn the call over to Clay and Jeremy to expand on our results. Clay?

Thank you, Pete. National-Oilwell Varco faced a challenging quarter in the first quarter. They came in a little softer than we expected. Despite a choppy market in North America, broadly speaking, we remain bullish on demand for offshore rigs, for floating production systems, and for products and services we sell into international land markets including fledgling unconventional shale developments. We had a traffic quarter for new orders for our Rig Technology segment and expect more in the second quarter. However, we’re very cautious about North America and continue to see headwinds here as pricing and volumes remain under pressure, as demand for pressure pumping and drilling equipment remains weak and operators defer expenditures for consumables. Rig Technology capital equipment orders totaled $3 billion, our second highest quarterly total ever. We received orders for 17 drilling equipment packages for jack-up rigs and 8 drilling equipment packages for floating rigs including 3 for Brazil in the first quarter. We also had a significant increase in orders for FPSO equipment. Our outlook for the second quarter orders remains very strong as well as we expect even more FPSO orders, plus another great quarter for jack-ups. There also remain a half dozen floating rigs for Brazil that we have not yet booked as we away down payments for these. And we see rising interest in land rigs for international markets as new modern rig design are steadily gaining expectance overseas. Through the first quarter, our very capable teams continue to manage their businesses for the long haul, while keeping an eye on our cost structures and view of near-term softness, it’s an usual time. We have some operations facing declining backlog and P&L pressures brought on by low volumes other safety opposite problem we are overflowing with work and losing efficiency due to congestion…

Thanks, Clay. National Oilwell Varco generated earnings of $1.17 for fully diluted share in its first quarter of 2013 on $5.3 billion in revenues. Excluding $73 million in pre-tax transaction and devaluation charges, first quarter 2013 earnings were $1.29 per fully diluted share has down 20% or $0.20 per share or 13% from the fourth quarter of 2012 and down $0.15 per share or 10% from the first quarter of 2012. Sales of $5.3 billion declined 7% sequentially that grew 23% year-over-year, despite the fact that the average U.S. rig count declined by almost 12% from Q1 2012 and the worldwide rig count dropped over 5% during that same period. Excluding transaction charges from all periods, operating profit for the quarter was $816 million down 14% sequentially and down 7% from the first quarter of last year. Operating margins on this basis were 15.4% for the first quarter of 2013 compared to 16.8% for the first quarter of 2012 and 20.5% for the first quarter of last year. Although the rig count in the U.S. continued to decline and margins for the quarter were somewhat longer than we had initially hoped we’re proud of the work that was done in the first quarter of 2013 and we remain extremely excited about the future prospects for the company. Turning to our segment operating results. The Rig Technology Group generated revenues of $2.6 billion in the first quarter down 9% sequentially, but up 16% compared to the first quarter of 2012. Operating profit for the segment was $557 million and operating margins were 21.2%, down a 120 basis points from the prior quarter and 320 basis points from the first quarter of 2012. As you will remember from the Q4 conference call, we indicated that we expected Rig Tech revenues to decline…

Thanks, Jeremy. I think that Clay and Jeremy have really kind of covered everything very, very well and I’d just like to make a few brief comments before we open it up for questions. But spend a little bit of time in the last quarter traveling overseas and trying to get a sense of things that I think are pretty important. And I think some things that you need to keep an eye on for the folks on this call. Number one, I think is China. And I think as you take a look at the shipyards there, they’re becoming much more active, especially in the jackup arena. I think you’ll see some floaters and semis down there and we’re positioned very uniquely to be able to take advantage of that. While there has been some press recently about the slow moving on the China shales, I also believe one of the reasons for that is because of the lack of infrastructure and so I might just remind you we manufacture infrastructure. And so I think that that in China we’re actually going to see some pretty good things happening with the shales. I think Latin America, looks very positive I believe by the end of the year, you’re going to see PEMEX pick up and I think that has positive implications for all the services companies or manufacturers. And of course as Jeremy and Clay pointed, Brazil continues to be a very attractive arena for us. We’re the leader down there in the Drillship awards, but more importantly than that we’re also supporting everything else that’s happening down there through all of our drill operations. So I think Brazil will continue to be a linchpin of what we’re doing. And then finally in Russia, this is a that earlier…

Thank you. We will now begin the question and answer session. (Operator Instructions). Our first question comes from Marshall Adkins from Raymond James. Please go ahead. Marshall Adkins – Raymond James: Good morning guys, great overview as usual and Pete you might answer this first question I have a little bit in your summary there, but the biggest push back I get from investors on your story is the perception, the backlog this great backlog growth we’re seeing here right now, hits the wall next year and sometimes in 2014 we got good visibility obviously this year with the rigs that have been order, but in 2014 that falls off and then you are not going to be able to replace that. So, how do you respond to those investors that the growth rate in 2015 and 2016 goes away?

Great question Marshall, I might tell you the quote that I think of is Mark Twain and it was “The reports of my death have been greatly exaggerated” and if I could kind of go into how many times up and told that the backlog is dead, let’s go back to OA, if you are going to lose half of your backlog three quarters of your backlog and we lost about 3% when the financial crisis occurred. And we’ve been told numerous times about the fact that well people just not going to keep ordering, the fact of the matter is, we feel very good about the prospects as we look into the future. I could talk that I’ll blew in the face and people are going to believe what they want to believe on that, but take look at the jackup market, how many times, if you are about the depth of the jackup market and this quarter, we just had a [plotter up] of jackups order. And we continued to see a very active area in that arena, and you also have to understand that lot of these shipyards in places like Korea, China and Singapore, the shipyards are in fact the driver of their economic growth and they are going to do everything they can to try keep those shipyards filled with things. And I think you are going to continue to see, very attractive prices that are drawn after for a lot of the deepwater drillers and if you take a look, the number of deepwater rigs out there, well it seems big on historical basis, it’s real a fraction of probably how many rigs are really need to be able to explore the deepwater basins all over the world. And so, we again, couple back there with the fact that we are expanding in the FPSO arena and when you take a look at what has to happen with FPSOs I mean the approved solution for production on all these deepwater wells being drilled today is going to be FPSO arena and we positioned ourselves to be able take great advantage of that and we’ll continue to look at ways to find a different companies and also acquire things, so that we can expand that even further. So, we feel very comfortable that we are going to continue to have a solid backlog this going to lead to such a growth for NOV.

Excellent, that helps. One quick, somewhat (inaudible) a follow-up and really more clarification, is sound, the margins obviously in Rig Tech a little less than some of us thought, I think you detailed why pretty well, but it sounds as if you expect to rebound once we get pass these abnormal hot shot or transportation expenses and that the one time start up cost fade over the next couple quarters did it here that right?

That’s exactly correct Marshall. We have $32 million in net project expenses that hit this quarter and then $10 million and sort of start-up costs around the globe and the start up cost will linger for while but the $32 million cost roll was all half of this quarter. So we’re confident we’re going to end up in the 22%, 23% range going forward. Marshall Adkins – Raymond James: Thanks guys.

Thanks Marshall

Thanks Marshall

Thank you. Our next question comes from Jim Crandell from Dahlman. Please go ahead. James Crandell – Dahlman Rose & Co.: Good morning guys.

Good morning, Jim.

Good morning Jim James Crandell – Dahlman Rose & Co.: First question concerns deepwater, I guess how many deepwater rigs did you book in the first quarter? And I assume by your comments that you booked the first three out of the nine in Brazil and there is another six to come. And also could you comment on China Pete. I know you had I guess three deepwater rigs in the fourth quarter on come out of the Chinese yards. Have there been anymore? And I guess over the course of this year, how many Chinese yards you think could become engaged in deepwater rig construction?

You’re correct, Jim. We booked a total of eight floaters, three of the floaters were for Brazil. And as I said in my comments, we’re hopeful that last six there will also flowing once we get down payments on those rigs. So that situation in Brazil the other five were elsewhere around the globe and we’re centered in the traditional shipyards. With regards to the Chinese yards, they’ve been very active on the jackup front and gaining share there on the jackup awards floaters they’re interested in, but that’s a little slower in developing. James Crandell – Dahlman Rose & Co.: Okay. Pete I know you spent, as you said, you spent some time in Russia. My understanding and tell me if I am wrong here is that Russian companies have to retire the sub-basin that in Russia after 25 years and will operators do this or do you think a number of them that you are speaking with aren’t interested in upgrading their rigs but there will be new equipment hence your new facility over there?

Jim, actually yeah, they do need to, they need to redo their rigs after 25 years and I think that there is a tremendous interest level on getting new equipment and better technology. I think the Russians now that the effectively they’ve got 1980s [heritage] rigs and the difference between a 80s heritage rig and the line rig today day is [night day]. And so we’re confident that they are going to upgrade those rigs and I think that’s going to be a multi-year expansion that’s really going to play well into our hands. I mean I just find every place we go, we like to have a lot of local content for a lot of reasons, but one of the main reasons is because your transportation charges are lower dramatically trying to get the rig to the end user, but we’ll have our new facility up and running by next year and that facility we’ll be building both rigs and lot of our other equipment, but the Russians really have a demand for that technology and we’re very bullish on what we’re going to see over there in the next couple of years. And I think they are going to have to retire a lot of those rigs not only by because of the law, but also because of just the need for better drilling efficiencies. James Crandell – Dahlman Rose & Co.: Pete, but one quick last final question, is that I know you’ve been bullish on the outlook for FPSO orders and I know you’re not getting package orders and that’s coming in the way of individual products, but could you characterize the magnitude of the pickup that you are seeing in the last one or two quarters and then take us through maybe this calendar year into 2014 and in terms of the projected magnitude of the pickup?

Yeah, Jim, this quarter we had products, major sales or for Turret warning system, and (inaudible) products into four projects there, which is a very big pick up as we talked about on previous quarters. Orders have been pretty slow there in that business, despite a lot of feed study activity, a lot of conversations with customers throughout last year, and even come back into 2011. And so we are very pleased to see a sharp pick up in orders. So generally, I think we’re seeing that whole market start to pick up as we have expected, and I’m pleased to see the direction that it’s going. James Crandell – Dahlman Rose & Co.: Okay, good. Thank you.

Thanks, Jim.

Thank you. Our next question comes from Robin Shoemaker from Citi. Please go ahead. Robin Shoemaker – Citigroup: Thanks. And I wanted to pursue that FPSO a little more. You’ve told us before, I think what you think your maximum dollar value of sales is per FPSO, and could you remind us of that. And are you seeing any opportunities where you might get that – you know total value?

Yeah on the high end, first FPSO has been in broad range of sizes and capabilities, and as you know Robin. And so, you’re not – there is a lot of variability in the design of FPSOs. And actually more broadly let’s us say FS users, I think it’s technically aren’t FPSOs, and we also sell lots of equipment into as well. But on the high end, I would say probably a $150 million per very large FPSO is a sort of a reasonable number and technically speaking for – I think it’s possible for us to go beyond that, perhaps well beyond that depending on the capabilities of the FPSO but what’s probably more useful sort of an average number might be in the $80 million to $100 million kind of size range for us. Robin Shoemaker – Citigroup: Okay. My other question had to do with these faster hull construction times and how you’ve had to speed up the process and incurred a lot of over time and expediting and all the things you mentioned there. It seems like in the past, the shorter the delivery time, the higher the price and higher the margin, just in terms of what you could charge for prompt delivery versus longer delivery. And it just seems like now the hurry up kind of process isn’t giving you the pricing leverage? Or am I misunderstanding that?

No, that’s partly true. I would say that for certain components for quick delivery, we clearly do get a premium, but the broad level of activity out there, the portfolio of projects that we have today are being built a year or more faster than they were in 2007, 2008 and have been awarded or bid let’s say more at our customers’ leisure, if you will. Back in 2007, 2008 there was a much higher level of urgency injected into the system. I think principally because the slots available in the shipyards were in short supply and once the customer secured a slot at a shipyard, even though the gestation period of the rig took much longer, they ended the signup pretty quickly with us on a DEP. This time around, the shipyards had a lot more capacity to not as much urgency around the availability of slots, and all of the slots are being bid at much faster construction schedule, but short of time it takes the build a rig. So we’ve shrunk the number of months from probably 42 months, 45 months for a sophisticated drillship down to sub-30, this time around and once – but the process leading up to signing of contract for that 30 month drillship is a little more relaxed, and it gives, it means that there’s a much more sort of competitive fight for the work going into that rig. Robin Shoemaker – Citigroup: Yeah. So it sounds like, this dynamic really isn’t going to change in any near term future, in other words the availability of shipyard slots that you mentioned China getting into the business. So it’s going to continue to be kind of…

Yeah, what’s happened Robin is that, as the whole construction schedule has shortened, it’s pressed our plants and our factories to move components out much more quickly. And so it’s that – that concept is little bit divorced from the process around bidding work and competing with our competitors to supply drilling equipment packages. But I would also add that as our backlog has filled up, and there’s lots of rigs out there, in particular in buying components that are in a little shorter supply, we are certainly pressing for some - few price increases here and there to cover these exploration costs that we’re seeing… Robin Shoemaker – Citigroup: Right. Okay, thank you.

Thanks, Robin.

Thanks, Robin.

Thank you. Our next question comes from Kurt Hallead from RBC Capital Markets. Please go ahead. Kurt Hallead – RBC Capital Markets: Great, thanks. Good morning.

Good morning.

Good morning, Kurt. Kurt Hallead – RBC Capital Markets: I want to try to get a sense on here is kind of recapping the general average for the FPSO per unit. Can you give us a rough update on floaters and jack-ups? Are we still around 200 million to 220 million for floaters and still in that kind of 50 million to 70 million range for jack-ups does that change at all?

No, Kurt, that’s pretty accurate. I mean on some of the floaters depending on the complexity if you got a complete dual activity depending if you want one or two [stacks] things like that you could be as much as 250. I think on the jack-ups it did really is around a $50 million comp. We get the max on the floaters more so that many times on the jack up, but we really picked up on the jack-ups as well simply because of our jacking systems. We’re putting a lot more jacking systems out there. So, I think that that $200 and $250 and the $50 number are still pretty accurate and then I will also remind you that as we take a look at land rigs and especially places like the Middle-East and some of the more complex land rigs and those will be up into the $30 million and $35 million and we’ve been very successful when that arena improves and we think that arena will do well over the last part of the year. Kurt Hallead – RBC Capital Markets: Okay. In that context, we’ve heard recently the (inaudible) rig count starting to expected to increase the rig count from I think we’re counting something around the 140 today to something around 200 by the end of 2014. First, can you collaborate that and secondly if (inaudible) is looking for say another 60 range, are they all going to be new in your viewpoint and where else do you see kind of a similar size kind of increase coming from. I know you mentioned Russia that sounded like a five year process. If you give some color that would be great.

I think Kurt we agree that the Saudi’s are going to pick up and I think it will be combination of existing rigs that will be moving in and also new rigs and we are uniquely positioned because we can actually we manufacture our land rigs in Dubai, in Jebel Ali Free Zone there. And so we are able to respond much more quickly that’s been one of the reasons we done that because of the Saudi’s want to rig and we have to make it any place, any other part of the world to be in China or even in the U.S. you know you have to add 60 to 90 days just for transportation charges whereas that we can do it in Dubai which is what we do once we are done, it moves cross broader near in the Saudi Arabia in three days. And so we think that’s going to be a very attractive market over the next year or so I think Russia is a more long-term market but I think its probably also a more sustainable market. And its one I think that’s going keep on giving for period of time. I think Latin America on land rigs is going to be a little bit more exciting then the people realize I think PEMEX for sure is going to be doing some things towards the end of the year, I think that will be both on and offshore I think you are seeing some things in Columbia and even the [Venice] make noise that maybe something could happen there but – but we are prior little bit more bullish on Latin America right now then have been and I think that something its probably in the second half of the year phenomenon as well. Kurt Hallead – RBC Capital Markets: Thanks Pete and if I can just one more here just on the FPSO as indicated obviously initially that’s going to be margin diluted to historical rig tech average margins and as you get more volume that will improve. So what’s the crossover point in terms of volumes and how close do you think the FPSO margins can get to historical Rig Tech averages.

It’s a mix a little bit we have product within that offering that are accretive to the mix overall, but others are diluted, right now the – the sum of the business is still dilutive, but we’re still at least a few quarters away from having that – this would be accretive to FPSOs, and I would add, I mean it would take us much larger volume through that business to turn that corner, so that’s still ways off, but again very excited about the prospects out there. Pete mentioned this is sort of a go-to solution for producing out of the deepwater, and we have a great offering of equipment and technologies into that trend. So over the long haul very, very excited about what lay ahead. Kurt Hallead – RBC Capital Markets: That’s great. I appreciate your color. Thanks.

Okay, Kurt thank you.

Thank you

Thank you. Our last question comes from Bill Sanchez from Howard Weil. Please go ahead. William D. Sanchez – Howard Weil Inc.: Thanks. Good morning.

Hey, Bill

Good morning William D. Sanchez – Howard Weil Inc.: Jeremy, if I – I perhaps missed it in the prepared comments, but I think you gave as far as the revenue recognition backlog Rig Tech, $2 billion in 2Q, and I think you said $3.7 million in the back half of the year, I miss the ‘14 expectation. Do you have that number?

Let me check, I didn’t say that on the call. I don’t think it’s… William D. Sanchez – Howard Weil Inc.: Or else simply you can do offline, but I know Clay, you’ve typically given it in the past.

We’re actually (inaudible) in a minute, aren’t we Bill? I’ll have it. William D. Sanchez – Howard Weil Inc.: Yeah. We are…

$2.3 billion. William D. Sanchez – Howard Weil Inc.: $2.3 billion do, I’m sorry that’s the 2014 total?

No, no. I’ll get back… William D. Sanchez – Howard Weil Inc.: Okay.

I got it right here. It is $4.9 billion. William D. Sanchez – Howard Weil Inc.: $4.9 billion. Okay, great. Thank you for that. And then I guess, just one thing, just so I can just understand in terms of the margin progression here on the Rig Tech, Clay, it’s like from your comment, I think it was confirmed in the early Q&A that margins in Rig Tech in the next couple of quarters going to be relatively flat, I believe with 1Q level, but yet, I think Jeremy you…

No, no, sorry Bill, flat with Q4. William D. Sanchez – Howard Weil Inc.: Flat with Q4, okay.

It’s a 20% to 23% range. William D. Sanchez – Howard Weil Inc.: Okay, right. Okay, and that in the [ducktails] and because I was, it seems like if because of the 22% to 23% range certainly on average for the year, you have to see a step-up in 2Q so that makes sense. If not, you are going to have to have a pretty significant increase in 4Q margins, so. Okay, so 4Q 2012 is 2Q, is basically good proxy for 2Q 2013 in Rig Tech?

Yeah. William D. Sanchez – Howard Weil Inc.: Okay. And one question just on PSS, is it too early to say given the mix of the product lines, yeah, I know there is a backlog component to that business that perhaps your lag rig count recover here to some extent, but this 2Q likely represent the trough from the margin expectation?

At this point time we think so, I mean, it’s, we’re certainly get positive comments from our customers, the service companies and the drilling contractors and typically we lag their positive comments by about a quarter. So, our expectation is that the rig activity does start to pickup at some point this quarter, even if it’s not a lot that our customers are start working to their inventories and start placing orders for our consumable products again in services. William D. Sanchez – Howard Weil Inc.: Okay, great. I appreciate your time. Thank you.

Thank you.

Bill, thank you.

Thank you. I will now turn the call back to Pete Miller for closing comments.

Thank you, Don. And we appreciate everybody calling in today and we look forward to talking to you when we announce our second quarter earnings and I hope all of you can get an opportunity to come to the Offshore Technology Conference. Thank you very much.

Thank you ladies and gentlemen. Additional replay of today’s call will be available on www.nov.com for 30 days. This concludes today’s conference, thank you for participating you may now disconnect.