Good day, ladies and gentlemen, and welcome to the Second Quarter 2016 National Oilwell Varco 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 follow at that time. As a reminder, today's conference maybe recorded. I would like to introduce your host for today's conference, Mr. Loren Singletary, Vice President of Investor and Industry Relations. Sir, please go ahead. Loren Singletary - Vice President-Investor & Industry Relations: Thank you, Michelle, and welcome, everyone to the National Oilwell Varco second 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 second quarter ended June 30, 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 filed 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. Please be aware that our use of the…

Thank you. Our first question comes from the line of Kurt Hallead with RBC. Your line is open. Please go ahead.

Hi, good morning. Clay C. Williams - Chairman, President & Chief Executive Officer: Hey, Kurt. Good morning.

So I wanted to focus a little bit more on the rig aftermarket. You mentioned that you are starting to see some pickup in inquiries. And I just wanted to make sure I heard you correctly. Was most of the inquiries coming from the land business or is there some mix of land and offshore? Clay C. Williams - Chairman, President & Chief Executive Officer: I think we're really seeing a mix of both, Kurt. It's certainly active dialogue and action related to reactivations and re-mobilizations in the U.S. land market, as well as more dialogue and more action related to service and repair-related activities offshore, as well as some reactivations that have been taken place in the Gulf.

Okay. Great. And then I was also wondering, as you guys are always very active in potential M&A, do you feel like we are at an inflection point where deals could start to get done and bid-ask spreads have kind of narrowed? Clay C. Williams - Chairman, President & Chief Executive Officer: Yeah, we do, Kurt. In 2015, we had a lot of conversations underway, but not many closings as valuations continued to move downward. I think as we entered 2016 we're starting to see, I think, counterparties that are really coming to grips with the very, very tough market we all find ourselves in. And so that's helped in driving bids and asks together. And so I am actually very encouraged with the number of conversations that we have underway. We had about, I don't know, seven or eight closings, I think, so far this year, and lots of other conversations that are under way. And, as you've seen, many that we referred to in our comments on this call and in the preceding call, a lot of really interesting technologies that I think will have a lot of leverage in an up cycle.

Great. And then one more follow-up, maybe for you, Clay, is a lot of discussion in the marketplace, given the – it looks like the dearth of offshore drilling orders that are going to take place over potentially a multi-year period, that there's some viewpoint out in the marketplace that NOV is going to feel pressured to do a deal to kind of offset that business segment and potentially get into something a little bit different than just the manufacturing element. I was wondering if you might be able to provide some insights on how you're thinking about the longer-term review and whether or not NOV needs to get involved in something else other than manufacturing? Clay C. Williams - Chairman, President & Chief Executive Officer: Well, first, I would say that we don't disagree. I mean, you go back to our comments and we're kind of hunkering down for a much lower level of building in the offshore. And certainly that's been a big business for NOV over the preceding 12-plus years. And but that's also nothing new. That narrative has been out there for a year and a half, and frankly we, since the downturn began, have been kind of preparing for a near term future that looks that way. And in view of that, we haven't jumped out there and done a great big deal. What I would tell you is I think we can get more impact from our capital by continuing to knock out these sort of bolt-on transactions that are little bit smaller. When we examine the portfolio of acquisitions that we 've made over the preceding 20 years, we find consistently that the smaller transactions carry higher returns and lower risk. The specific examples that we've done here in the last six months have been really interesting technologies, have brought on really, really good people. The Trican team, for instance, who came in with the completion tools business, is very experienced in that space and can help us grow and build the business. If you look back at our history over the preceding 20 years, we've done a couple of large deals, but the business units that we have today, that are mostly market leaders around the globe, were really built kind of transaction by transaction, smaller acquisitions bringing in really high quality businesses and products and technology and management teams and kind of brick by brick. And to me that's a more efficient, more workmanlike and more effective way to kind of build out global leading franchises. And so if we see a terrific opportunity that's much larger, certainly we'll act on it. But realistically I think we can do and will do a lot of good by continuing to deploy capital through the down cycle and a lot of smaller, interesting, high-value acquisition targets.

That's great color. Thanks, Clay. Clay C. Williams - Chairman, President & Chief Executive Officer: You bet. Thank you.

Thank you. And our next question comes from the line of Sean Meakim with JPMorgan. Your line is open. Please go ahead.

Hey, good morning. Clay C. Williams - Chairman, President & Chief Executive Officer: Hi, Sean.

So Clay, I was hoping that maybe you could talk a little bit more about the GE partnership. There's just – seems like a lot of potential there. Is there any way you can help us size some of that potential? Maybe just a couple of different ways to think about it could be you're starting with brownfield opportunities, which makes sense, but what the cost savings could look like for the customer or time savings to first oil, things that can really drive the value on greenfield projects. And what's the potential for you all? Clay C. Williams - Chairman, President & Chief Executive Officer: Yeah. Sean, we – a few years ago when we sort of began to invest in the FPSO opportunity, we did a little study or actually had an industry expert do a study around the FPSO construction results for the industry. And they looked at, I want to say, a dozen or more vessels. And on average they're 35% or more over budget and more than a year late. And when you talk about delaying production that much, when we talk about those sorts of cost overrun, that's a huge inefficiency in the space. And so in terms of the savings that this may carry, I think, realistically bring a more industrialized sort of supply chain, standardization in the design, kind of the partnership that we're forging with GE. I think, it's going to materially move the needle. Though the size of each individual project for the two of us is going to vary a lot, given the size and capabilities of the FPSO. But it can easily range well over $200 million per vessel for the larger FPSOs and beyond. And so that is exciting. But more specifically, in terms of the near-term…

Got it. Thank you for all that detail. And then I guess I wanted to touch on rig systems also. Throughput has been coming in generally below expectations. Of course then that just pushes right into the right, but can you give us some more detail on what's driving that confidence stabilization exiting 2016? Clay C. Williams - Chairman, President & Chief Executive Officer: Sean, so yeah. We're seeing – it's obviously a very challenging environment today. There is a lot of stress and strain on the systems. We're continuing to progress all of these contracts forward and are maintaining really good relationships with both the shipyards and the drilling contractors as well. But there's certainly a tremendous amount of tension between the drilling contractors and the shipyards, and to some degree we're helping facilitate those discussions. And so while those pressures are in place, things tend to – customers tend to want to put off acceptance of rigs, particularly for the rigs that don't have contracts in place. We still feel really good about the overall position, but, as you know, we are very cautious about making sure that we don't get over the tips of our skis in terms of the balance of sort of where we are in terms of progress payments and the amount that we have at risk. So trying to keep the overall portfolio in a positive position, and that's how we're managing the business. Loren Singletary - Vice President-Investor & Industry Relations: Yeah. We also see, I think, as you move into 2017, I think – and Jose had this in his prepared remarks – our outlook for the land side of the business is improving, and so – and the number of conversations we have under way. Part of what we saw in the second quarter were reactivations of land rigs in North America. And we've got others, drilling contractors interested in not pulling the trigger yet on purchase orders, but interested in talking about new rigs. And then in many international markets around the globe also. So I think you're going to see our mix shift in the future – in the coming quarters a little more towards land.

Okay. Got it. Yes. Thank you very much for the time.

Thank you. And our next question comes from the line of Marshall Adkins with Raymond James. Your line is open please go ahead. J. Marshall Adkins - Raymond James & Associates, Inc.: Morning, guys, a lot of great detail there. Appreciate that. A couple of just conflicting things, and you probably reconciled them but I just missed it. Clay, you started out saying you're not really willing to call a bottom yet, but it sounds like in a lot of your businesses you are at a bottom, probably saw it in Q2. So I just want to get a little more color. That we all know the offshore rig systems is going to be challenged for a while, but outside of that you said you were at or near bottom of rig aftermarket. Wellbore tech and completions seem like they're there, too. Am I missing something? Clay C. Williams - Chairman, President & Chief Executive Officer: Well, Marshall, I'll stress what was also in my opening remarks, which is we are seeing businesses within those segments continuing to decline, and we're seeing pricing pressures continuing to mount, particularly overseas generally. And so, again, kind of at or near bottom, a lot of crosscurrents, a lot of moving pieces. What I can tell you with a great deal of certainty, though, is that we are definitely taking costs out of these businesses, continuing to do that. And so, yeah, I hope you're right. I hope we are at bottom and maybe even have bottom in the rearview mirror on the company's business units, but not ready to jump out there and say that emphatically. J. Marshall Adkins - Raymond James & Associates, Inc.: Okay. Unrelated follow-up, clearly you have capacity to expand in upturn, which we're looking for. What are going…

Thank you. And our next question comes from the line of Tom Curran with FBR Capital Markets. Your line is open. Please go ahead. Tom P. Curran - FBR Capital Markets & Co.: Good morning, guys. Loren Singletary - Vice President-Investor & Industry Relations: Hey, Tom. Clay C. Williams - Chairman, President & Chief Executive Officer: Good morning. Tom P. Curran - FBR Capital Markets & Co.: When it comes to the continued uptrend, the secular uptrend in completion demand intensity, the focus, understandably, tends to be on the implications for hydraulic fracturing, horsepower, and proppant consumption, primarily sand. And yet on Dover's Q2 call, they rightly reminded us that it has implications for other offerings, such as rod lift and the amount of rod consumption you'll see as average lateral lengths continue to increase. Could you give us an update on all those different offerings for you, or maybe just highlight a few where you're seeing the greatest impact of the continued uptrend in demand intensity? Jose A. Bayardo - Chief Financial Officer & Senior Vice President: Sure, Tom. Hey, it's Jose. I will start off on this, and then Clay can take you back. But it's a good question and I think there's – people sometimes have some misperceptions about our portfolio and product offering. But really as we see the trend that is moving forward across not just North America but all markets, that trend is related to more product-consumptive wells, more service intensive and product-consumptive wells. It's not just impacting specifically completion, what you think of as traditionally completion-related items. It really impacts the entire well construction process. So even though we are drilling much more efficiently and the rate of penetration is much, much higher, on a per footage basis the amount of tubing, bits,…

Thank you. Our last question will come from the line of Byron Pope with Tudor, Pickering, Holt. Your line is open. Please go ahead. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Good morning. Clay C. Williams - Chairman, President & Chief Executive Officer: Good morning. Loren Singletary - Vice President-Investor & Industry Relations: Hi, Byron. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: I had a question about Completion and Production Solutions, and with regard to the Q3 guidance and top line being up sequentially. I would think that that would be elements of well intervention and onshore production that would lead the way, but I was just wondering, maybe Jose, if you can provide some color on what's driving that? And if you spoke to it earlier, I apologize. Jose A. Bayardo - Chief Financial Officer & Senior Vice President: No problem, Byron. It's a combination of factors. One of the items driving it is a large anticipated shipment from – related to an order in our well intervention and stimulation business. But as we also talked a little bit about, we're seeing some pretty good orders coming in and discussions related to more production-oriented equipment. So that's the primary factor associated with the pickup in revenue. Clay C. Williams - Chairman, President & Chief Executive Officer: Yeah. We've also seen pretty good demand on flexible pipe for Brazil as well. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. And then, Clay, one question for you, just sticking with completion and production solutions, it seemed as though, I guess, when you all had your Analyst Day, it seems as though one of the long-term goals for that segment was this notion of integration. And it seemed as though E&P operators weren't necessarily standardizing on surface production and processing equipment. Is it your sense that during this downturn and maybe coming out of this downturn, more appropriately, E&P reception to that more standardized integrated model on the surface production side might be gaining some traction? Clay C. Williams - Chairman, President & Chief Executive Officer: Yeah. If you're talking about FPSOs certainly, and I think our customers recognize their model is broken, and so there's a lot of receptivity to doing things differently there. With regards to onshore, it remains fairly fragmented. Volumes are down and so our customers, I think, are more open to buying – assembling their own packages. However, there are benefits to our customers through acquiring a little broader package of equipment when it comes to putting in processing equipment for land wells as well. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. Thanks, guys. I appreciate it. Jose A. Bayardo - Chief Financial Officer & Senior Vice President: Thanks, Byron. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Thank you.

Thank you. And this does conclude today's Q&A session. And I would like to turn the conference back over to Mr. Clay Williams for any closing remarks. Clay C. Williams - Chairman, President & Chief Executive Officer: Thank you, Michelle, and thank you all for joining us. We look forward to speaking to you next quarter.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.