Good day ladies and gentlemen, and welcome to the National Oilwell Varco First Quarter 2016 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at the appropriate time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Loren Singletary, Vice President, Investor & Industry Relations. You may begin your conference. Loren Singletary - Vice President-Investor & Industry Relations: Thank you, Nicholas, and welcome, everyone, to the National Oilwell Varco First Quarter 2016 Earnings Conference Call. With me today is Clay Williams, President, CEO and Chairman of National Oilwell Varco; and Jose Bayardo, Senior Vice President and Chief Financial Officer. Before we begin this discussion of National Oilwell Varco's financial results for its first quarter ended March 31, 2016, 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 may be found within our press release, on our website at www.nov.com, or in our filings with the SEC. Additionally, you likely…

And our first question comes from the line of Ole Slorer with Morgan Stanley. Your line is now open. Please proceed with your question. Ole H. Slorer - Morgan Stanley & Co. LLC: Yeah, thanks and congrats, Clay, on the generating free cash flow it what's undoubtedly one of the toughest environments I think any of us have ever experienced. Clay C. Williams - Chairman, President & Chief Executive Officer: Thank you, Ole. Ole H. Slorer - Morgan Stanley & Co. LLC: When thinking about National Oilwell, there's still a division between the thought around your rig construction and that of your shorter cycle opportunity and I kind of remember back in the mid, late-1990s and Grant Prideco and how it surprised all of us with its kind of operating leverage and even National Oilwell before Varco all its motors and downhole tools, et cetera and the early cycle characteristics of that. I wonder whether you could just share your high-level thoughts on kind of the early cycle component of National Oilwell, how it's changed from those days, your philosophy and how you're building it out? Clay C. Williams - Chairman, President & Chief Executive Officer: Yeah. Thank you, Ole. A lot of – it's been a systematic, steady application of capital over the years to very attractive businesses like Grant Prideco's drill pipe business. I think as you're aware 97% of the acquisition capital we've deployed through the last decade plus have been in areas outside of rigs. We have a great franchise in building rigs and very proud of that, have done a great job. But looking forward, I think as the cycle recovers, we're going to benefit from investments like that. Drill pipe demand comes back, that drives high, very high operating leverage and high levels of…

Our next question comes from the line of Waqar Syed with Goldman Sachs. Your line is now open. Please proceed with your question. Waqar Syed - Goldman Sachs & Co.: Just following up on the discussion. So the change in accounting that you have, in terms of allocating the G&A cost into individual segments, are you strategically thinking of a different way of running these businesses as well in the future with more centralized control over most of the segments? Is that also part of the thinking, or it's just a basic accounting change? Jose A. Bayardo - Chief Financial Officer & Senior Vice President: Good morning, Waqar. It's Jose. It's really just a simple accounting change. So operationally and reporting-wise, things remain exactly the same. We just felt that it was appropriate to take out what we felt are truly corporate overhead costs from – take that out of the segment results, so very simple change. Waqar Syed - Goldman Sachs & Co.: Okay. And then just on the M&A side, could you highlight – this is something that you've talked about for a while, there were some small acquisitions. Are there any opportunities for some meaningful M&A as well? Clay C. Williams - Chairman, President & Chief Executive Officer: Yes, we've had conversations kind of continually with potential attractive organizations that are kind of larger than we did in Q1 and continue to kind of work those conversations. But as the oilfield activity has gone down every single quarter for the last five or six quarters, I think all parties are kind of seeing how all this plays out and we are as well. We do think it's steadily become more of a buyer's market, frankly, through the past year and half, and so we're trying to be very selective, very disciplined in our application of capital, and so we're looking at opportunities but nothing to report yet. Waqar Syed - Goldman Sachs & Co.: Given the market environment and your liquidity and cash position, what is kind of the maximum enterprise value type transaction that you could do? Clay C. Williams - Chairman, President & Chief Executive Officer: I think it certainly depends on financing. We are fortunate in that we have a lot of liquidity and access to capital presently, but I think we would view an all-cash acquisition differently than one which may involve equity, but suffice to say we're looking at – this is the kind of market that produces opportunity and so we're looking hard at potential things that we can deploy capital into opportunistically in a downturn like this. Waqar Syed - Goldman Sachs & Co.: Okay. Thank you very much. Jose A. Bayardo - Chief Financial Officer & Senior Vice President: Thank you.

Our next question comes from the line of Bill Herbert with Simmons. Your line is now open. Please proceed with your questions. William Herbert - Simmons & Co. International: Thanks. Good morning. Jose, forgive me for asking this question because you went through it, but it was hard to keep up with regard to the writing. So on Rig tech, did you say that for the second quarter revenues down 30% quarter-on-quarter, and sequential decrementals of 30%? Jose A. Bayardo - Chief Financial Officer & Senior Vice President: On Rig Systems? William Herbert - Simmons & Co. International: On Rig Systems – sorry about that, yes. Jose A. Bayardo - Chief Financial Officer & Senior Vice President: Yes. That's correct. William Herbert - Simmons & Co. International: Okay. So that's – just kind of doing this on the fly here, that seems like it's what, like about an 8% margin or something like that for the second quarter? A couple questions on (44:50). One, Clay, it sounds like you're increasingly cautiously optimistic about the second half of the year with regard to the visibility that you're seeing. Clay C. Williams - Chairman, President & Chief Executive Officer: Yeah. William Herbert - Simmons & Co. International: And so is it a reasonable premise to assume that Q2 margins for Rig Systems are likely to trough? And then, secondly, given the mix shift in your business and prior, call it, mid-cycle operating margins, not EBITDA margins, of call it 25% – 20% to 25%, not peak, but sustainably strong margins, how should we think about mid-cycle margins for this business going forward, given the mix shift in your business? Clay C. Williams - Chairman, President & Chief Executive Officer: Well, first, with regards to Rig Systems, I'm not prepared to call bottom…

Our next question comes from the line of Darren Gacicia with KLR Group. Your line is now open. Please proceed with your question.

Hey. Thanks for taking my question. There is a lot of talk on this call kind of shifting attention towards more consumable-oriented businesses, short cycle businesses, with focus on wellbore and completions. What I was trying to get a sense of if you kind of break it down product-by-product a little bit, is what are the conversations with clients across those product lines and when you think about lead times to delivery, if you were actually going to see an improvement in the commodity market and see an improvement in activity, when would you have to kind of, start to seeing that – those discussions you'd have to be able to supply that activity if you think about those two segments? Clay C. Williams - Chairman, President & Chief Executive Officer: Well, we have an abundance of capacity, so as soon as a purchase order comes in, I think we can respond pretty quickly. From a macro perspective though, I do think commodity prices have to go up and they have to stay there a while before you really see activity and purchasing follow that as customers repair balance sheets and basically get comfortable that commodity prices are going to stay high for a while and so kind of the activity recovery will lag the commodity price recovery, I believe. But when the activity recovery comes though, we are very encouraged and anxious to move forward with a lot of the new ideas that we outlined in the call. And again, we think these are going to be very impactful ideas, new and innovative ways to reduce marginal cost of production from all sources of production is going to create a lot of opportunity for NOV. So we're looking forward to that day and ready to go. And right now, they're just conversations, not purchase orders but the conversations with customers around applying innovation, increasing efficiency are encouraging.

Got it. If I could follow-up, just thinking about Rig Aftermarket, when you need to put rigs back to work, I'm assuming that they are going to have to – a lot of these companies – a lot of the rig operators will have to contact you first – whether it's land or offshore, to do some work given the kind of underspend that's been reflected and what's happened in Rig Systems and Aftermarket. When – have those – any of – it sounds like there was some commentary earlier that some of those conversations at least have started to happen, can you give a little color on that and kind of how you would expect that to proceed kind of in front of activity recovery? Jose A. Bayardo - Chief Financial Officer & Senior Vice President: Hey, Darren. I think as we mentioned, the inbound inquiries regarding – from customers thinking about the second half of the year and beyond trying to just make sure that they are prepared as possible for their – to respond to their customer needs are starting to pick up as commodity prices have picked up a little bit and as just the sentiment has been a little bit more optimistic regarding a second half recovery. So we're certainly seeing more inbound calls from people who have numerous rigs stacked in their yard, who are thinking about what's going to be necessary in order to put those rigs back to work and also related to the timing, just to ensure that those parts and service capacity is in place to help them out. Clay C. Williams - Chairman, President & Chief Executive Officer: Yeah. And in a world that has more rigs than it needs, right now, too, they're thinking through how do I differentiate my rigs? And so a lot of – in terms of the color of these conversations, a lot of this is around can I add a new control system, can I add a new capability to my rig and so it's more – it's trying to differentiate their rigs in kind of a crowded marketplace. Most of the kind of the second half recovery inbound calls that we – that I'm referring to – although we've had some in Rig Aftermarket, I would say Wellbore Technologies and Completion and Production Solutions are...

Yeah. If I can just squeeze just one more in, for the Brazil backlog adjustments, and talks about reducing your overhead, have the overhead adjustments already taken place in Brazil or is that been sort of a drag that may go away given the fact it's accounted a bit differently? Clay C. Williams - Chairman, President & Chief Executive Officer: They've been coming down over time. We've been responding I mean – and I think we've disclosed quarter-by-quarter our Brazilian revenue has been slowing dramatically as project-by-project we've been either requested by our shipyard customers or due to lack of payments have slowed work. So that's come down. But also I'd point out Brazil is still the second-largest deepwater drilling market in the world right now and we still have significant business in Brazil. So we made investments down there to support the program. Our expectation is we're going to sort of shift those to more support ongoing drilling activity in the future. But we've been trimming the cost position there along the way.

Thank you very much. Clay C. Williams - Chairman, President & Chief Executive Officer: You bet.

And our next question comes from the line of Byron Pope with Tudor, Pickering, Holt. Your line is now open. Please proceed with your question. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Good morning. Just one quick question, Clay, NOV is the dominant independent provider of downhole tools to the directional drilling industry and so as I think about the acquisition of Tolteq and you guys about to run your first low-cost rotary steerable tool in the hole for a customer next week, could you just speak to some of the trends that you see evolving in that business and are we moving to an environment where rotary steerables are going to start to compete with more conventional methods of directional drilling? Just curious to how you see that business evolving over time? Clay C. Williams - Chairman, President & Chief Executive Officer: Well, there's – using rotary steerable technology I think makes for more accurate geosteering, makes for smoother wellbores. And so you avoid production problems with for instance ponding and pooling of produced water in the low spots in the lateral, stuff like that. So it's fundamentally better technology and – but it's a previously – it has been a very expensive technology over the years and so I do think it makes sense that since it's a better way it will to continue to move forward and so we're pretty excited about the prospects. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. That's it for me. Thanks. Clay C. Williams - Chairman, President & Chief Executive Officer: You bet. Jose A. Bayardo - Chief Financial Officer & Senior Vice President: Thanks, Byron.

This concludes today's Q&A session. I will now like to turn the call back over to the speakers for closing remarks. Clay C. Williams - Chairman, President & Chief Executive Officer: Thank you all for joining us. And we look forward to speaking with you again in late July on our second quarter results.