Item 5.
Market for Registrant’s Common Equity and Related Stockholder Matters Market Information National Oilwell common stock is listed on the New York Stock Exchange (ticker symbol: NOI).
The following table sets forth the stock price range during the past three years:
## Table 0 ##
As of March 1, 2004, there were 531 holders of record of National Oilwell common stock.
Many stockholders choose to own shares through brokerage accounts and other intermediaries rather than as holders of record so the actual number is unknown but significantly higher.
National Oilwell has never paid cash dividends, and none are anticipated during 2004.
Item 6.
Selected Financial Data
## Table 1 ##
(1) In connection with the IRI International Corporation merger in 2000, we recorded charges of $14.1 million related to direct merger costs, personnel reductions, and facility closures and inventory write-offs of $15.7 million due to product line rationalization.
(2) We adopted Statement of Financial Accounting Standards No.142, “Goodwill and Other Intangible Assets” (SFAS 142), effective January 1, 2002.
The effects of not amortizing goodwill and other intangible assets in periods prior to the adoption of SFAS 142 would have resulted in net income (loss) of $115.0 million, $23.1 million, and $(4.0) million for the years ended December 31, 2001, 2000, and 1999, respectively; basic earnings per common share of $1.42, $0.29, and $(0.06) for the years ending December 31, 2001, 2000, and 1999, respectively; and diluted earnings per common share of $1.41, $0.29, and $(0.06) for the years ending December 31, 2001, 2000, and 1999, respectively.
(3) Data for 1999 is restated to combine IRI International and Dupre′ results pursuant to pooling-of-interests accounting.
Cash provided by operating activities in 2008 was $2,294.1 million compared to cash provided by operating activities of $1,188.0 million in 2007.
Cash was used by operations primarily through increases in inventories of $643.0 million and receivables of $625.9 million.
These negative cash flows were offset by net income of $1,952.0 million, an increase in billings in excess of costs of $764.6 million and non-cash charges of $401.6 million.
Receivables increased due to greater revenue in 2008 compared to 2007 as the fourth quarter 2008 revenue was $3,810.2 million compared to $2,658.9 million for the fourth quarter of 2007.
Inventory increased due to continued higher activity and growing backlog orders.
Billings in excess of costs increased due to early payment terms in relation to construction projects.
For the year ended December 31, 2008, cash used by investing activities was $2,473.3 million compared to $574.9 million used for 2007.
We used $3,007.9 million to complete ten acquisitions during 2008, with the acquisition of Grant Prideco, Inc.  amounting to $2,837.2 million, net of cash acquired.
Capital spending of $378.5 million was primarily related to rental assets associated with the Company’s Petroleum Services & Supplies operations.
For the year ended December 31, 2008, cash used by financing activities was $74.0 million compared to $149.6 million provided in 2007.
The Company borrowed $2,730.8 million of funds during 2008, $2,000.0 million of which was for the acquisition of Grant Prideco on April 21, 2008.
The Company repaid the amount borrowed for the Grant Prideco acquisition and other debt in the amount of $2,919.9 million in 2008.
The Company also generated cash proceeds from stock options exercised of $78.0 million and excess tax benefit from exercise of stock options of $37.1 million during 2008.
We believe cash on hand, cash generated from operations, and amounts available under the credit facilities and from other sources of debt will be sufficient to fund operations, working capital needs, capital expenditure requirements and financing obligations.
At December 31, 2008, the Company had $2,396.9 million of available funds under its two revolving credit facilities.
We also believe increases in capital expenditures caused by any need to increase manufacturing capacity can be funded from operations or through debt financing.
A summary of the Company’s outstanding contractual obligations at December 31, 2008 is as follows (in millions):
## Table 2 ##
As of December 31, 2008, the Company had $69.0 million of unrecognized tax benefits.
This represents the tax benefits associated with various tax positions taken, or expected to be taken, on domestic and international tax returns that have not been recognized in our financial statements due to uncertainty regarding their resolution.
Due to the uncertainty of the timing of future cash flows associated with these unrecognized tax benefits, we are unable to make reasonably reliable estimates of the period of cash settlement, if any, with the respective taxing authorities.
Accordingly, unrecognized tax benefits have been excluded from the contractual obligations table above.
For further information related to unrecognized tax benefits, see Note 14, “Income Tax,” to the consolidated financial statements included in this Report.
We intend to pursue additional acquisition candidates, but the timing, size or success of any acquisition effort and the related potential capital commitments cannot be predicted.
The Company expects to reduce its capital spending approximately 20% in 2009 to the $300 million range.
We expect to fund future cash acquisitions and capital spending primarily with cash flow from operations and borrowings, including the unborrowed portion of the credit facility or new debt issuances, but may also issue additional equity either directly or in connection with acquisitions.
There can be no assurance that additional financing for acquisitions will be available at terms acceptable to us.
Inflation has had an impact on certain of our operations in recent years.
We believe that the higher costs for energy, steel and other commodities experienced in 2008 have largely been mitigated by increased prices and component surcharges for the products we sell.
However, higher steel, labor, energy or other commodity prices may adversely impact future periods.
Products; and a number of regional competitors.
The Petroleum Services & Supplies group sells drilling services into highly competitive markets.
Management believes that on-site service is becoming an increasingly important competitive element in this market, and that the principal competitive factors affecting the business are performance, quality, reputation, customer service, product availability and technology, breadth of product line and price.
Distribution Services The Distribution Services group is a market leader in the provision of supply chain management services to drilling contractors and exploration and production companies around the world.
Through its network of over 200 Distribution Service Center locations worldwide, this group stocks and sells a large line of oilfield products including consumable maintenance, repair and operating supplies, valves, fittings, flanges and spare parts that are needed throughout the drilling, completion and production process.
The supplies and equipment stocked by our Distribution Service Centers are customized to meet a wide variety of customer demands.
Distribution’s supply chain solutions for customers that choose to outsource the functions of procurement, inventory & warehouse management, logistics, business process, and performance metrics reporting generate a quarter of this group’s revenues.
In this solution offering, they leverage the flexible infrastructure of their SAP?
ERP system to streamline the acquisition process from requisition to procurement to payment, by digitally managing approval routing & workflow, and by providing robust reporting functionality.
NOV RigStore?
is a cutting-edge industry value offering by the Distribution Services group whereby they provide the installation, staffing and management of supply stores on offshore drilling rigs.
With the NOV RigStore?
business model, Distribution Services installs its own ERP system onboard in order to access and leverage Distribution’s global inventory, hundreds of support locations, and thousands of vendors across multiple product lines.
This business model relieves the average offshore drilling rig’s balance sheet by providing improved accounting of these expense items, lower capital costs, extended payment on part of the driller until the item is actually issued from the onboard supply store, and removed risk of ownership from the customer.
Whether it is a smaller, new drilling contractor or larger, established drilling company the benefits of effective supply chain management and reduced total cost of ownership are substantial.
Distribution Services also now provides unique one-stop-shop value propositions in the Exploration and Production market in key areas of artificial lift, measurement & controls, valving & actuation, and flow optimization.
Through focused effort, they have built expertise in providing applications engineering, systems & parts integration, optimization solutions, and after-sales service & support in the aforementioned areas.
Distribution Services is rapidly diversifying by adding new artificial lift technologies, as well as measurement & controls competencies to become the biggest global provider of equipment and services in the E&P space.
Approximately 70% of the Distribution Services group’s sales in 2009 were in the United States and Canada.
The remainder comes from key international markets in Latin America, the North Sea, Middle East, Africa and the Far East.
The Distribution Services group has now expanded into oilfields in over 20 countries.
Approximately 23% of Distribution Services revenues are from the resale of goods manufactured by other segments within the Company and the balance are sales of goods manufactured by third parties.
The group works to strategically increase its revenue and enhance its alliances with customers by continuous expansion of product and service solutions and creation of differentiating value propositions.
Additionally the group leverages its extensive purchasing power to reduce the cost of the goods.
The group is strategically expanding its sourcing network into low cost countries globally.
Customers and Competition.
The primary customers for Distribution Services include drilling contractors, well servicing companies, major and independent oil and gas companies, and national oil companies.
Competitors in Distribution Services include Wilson Supply (a division of Smith International), CE Franklin, McJunkin Red Man, and a number of regional competitors.2009 Acquisitions and Other Investments In 2009, the Company made the following acquisitions and outside investments:
## Table 3 ##
Index to Financial Statements The Company leases certain facilities and equipment under operating leases that expire at various dates through 2066.
These leases generally contain renewal options and require the lessee to pay maintenance, insurance, taxes and other operating expenses in addition to the minimum annual rentals.
Rental expense related to operating leases approximated $256 million, $215 million, and $199 million in 2011, 2010 and 2009, respectively.
Future minimum lease commitments under noncancellable operating leases with initial or remaining terms of one year or more at December 31, 2011 are payable as follows (in millions):
## Table 4 ##
13.
Common Stock National Oilwell Varco has authorized 1 billion shares of $.01 par value common stock.
The Company also has authorized 10 million shares of $.01 par value preferred stock, none of which is issued or outstanding.
Cash dividends aggregated $191 million and $172 million for the years ended December 31, 2011 and 2010, respectively.
The declaration and payment of future dividends is at the discretion of the Company?s Board of Directors and will be dependent upon the Company?s results of operations, financial condition, capital requirements and other factors deemed relevant by the Company?s Board of Directors.
Stock Options Under the terms of National Oilwell Varco?s Long-Term Incentive Plan, as amended, 25.5 million shares of common stock are authorized for the grant of options to officers, key employees, non-employee directors and other persons.
Options granted under our stock option plan generally vest over a three-year period starting one year from the date of grant and expire ten years from the date of grant.
The purchase price of options granted may not be less than the closing market price of National Oilwell Varco common stock on the date of grant.
At December 31, 2011, approximately 6 million shares were available for future grants.
We also have inactive stock option plans that were acquired in connection with the acquisitions of Varco International, Inc.  in 2005 and Grant Prideco in 2008.
We converted the outstanding stock options under these plans to options to acquire our common stock and no further options are being issued under these plans.
Stock option information summarized below includes amounts for the National Oilwell Varco Long-Term Incentive Plan and stock plans of acquired companies.
Options outstanding at December 31, 2011 under the stock option plans have exercise prices between $8.38 and $79.80 per share, and expire at various dates from January 30, 2012 to May 20, 2021.
The following summarizes options activity:
## Table 5 ##
Cash payments for federal, state, and foreign income taxes were $238.3 million, $189.5 million, and $90.7 million for the years ended December 31, 2015, 2014, and 2013, respectively.
The following table summarizes the changes related to PCA’s gross unrecognized tax benefits excluding interest and penalties (dollars in millions):

<table><tr><td></td><td colspan="2"> 2003</td><td colspan="2"> 2002</td><td colspan="2"> 2001</td></tr><tr><td> Quarter</td><td> High</td><td> Low</td><td> High</td><td> Low</td><td> High</td><td> Low</td></tr><tr><td>First</td><td>$23.44</td><td>$19.36</td><td>$26.25</td><td>$16.43</td><td>$40.50</td><td>$33.65</td></tr><tr><td>Second</td><td>24.78</td><td>20.54</td><td>28.81</td><td>20.91</td><td>39.55</td><td>26.80</td></tr><tr><td>Third</td><td>21.80</td><td>17.86</td><td>21.29</td><td>15.19</td><td>25.74</td><td>12.91</td></tr><tr><td>Fourth</td><td>22.99</td><td>18.01</td><td>23.31</td><td>17.69</td><td>20.86</td><td>13.85</td></tr></table>
<table><tr><td></td><td colspan="5"> Year Ended December 31,</td></tr><tr><td></td><td> 2003</td><td> 2002</td><td> 2001</td><td> 2000</td><td> 1999 -3</td></tr><tr><td></td><td colspan="5"> (in thousands of U.S. dollars, except per share amounts)</td></tr><tr><td> Operating Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenues</td><td>$2,004,920</td><td>$1,521,946</td><td>$1,747,455</td><td>$1,149,920</td><td>$839,648</td></tr><tr><td>Operating income -1 (4)</td><td>158,988</td><td>134,323</td><td>189,277</td><td>48,456</td><td>1,325</td></tr><tr><td>Income (loss) before taxes (4)</td><td>110,506</td><td>112,465</td><td>168,017</td><td>27,037</td><td>-14,859</td></tr><tr><td>Net income (loss) (2)</td><td>76,821</td><td>73,069</td><td>104,063</td><td>13,136</td><td>-9,385</td></tr><tr><td>Net income (loss) per share</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic -2</td><td>0.91</td><td>0.90</td><td>1.29</td><td>0.17</td><td>-0.13</td></tr><tr><td>Diluted -2</td><td>0.90</td><td>0.89</td><td>1.27</td><td>0.16</td><td>-0.13</td></tr><tr><td> Other Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Depreciation and amortization</td><td>39,182</td><td>25,048</td><td>38,873</td><td>35,034</td><td>25,541</td></tr><tr><td>Capital expenditures</td><td>32,378</td><td>24,805</td><td>27,358</td><td>24,561</td><td>17,547</td></tr><tr><td> Balance Sheet Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Working capital</td><td>794,185</td><td>768,852</td><td>631,257</td><td>480,321</td><td>452,015</td></tr><tr><td>Total assets</td><td>2,242,736</td><td>1,977,228</td><td>1,471,696</td><td>1,278,894</td><td>1,005,715</td></tr><tr><td>Long-term debt, less current maturities</td><td>593,980</td><td>594,637</td><td>300,000</td><td>222,477</td><td>196,053</td></tr><tr><td>Stockholders’ equity</td><td>1,090,429</td><td>933,364</td><td>867,540</td><td>767,206</td><td>596,375</td></tr></table>
<table><tr><td></td><td></td><td colspan="4"> Payment Due by Period</td></tr><tr><td></td><td> Total</td><td> Less than  1 Year</td><td> 1-3 Years</td><td> 4-5 Years</td><td> After  5 Years</td></tr><tr><td> Contractual Obligations:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total debt</td><td>$873.9</td><td>$4.3</td><td>$364.5</td><td>$354.0</td><td>$151.1</td></tr><tr><td>Operating leases</td><td>520.8</td><td>114.1</td><td>158.0</td><td>91.8</td><td>156.9</td></tr><tr><td>Total Contractual Obligations</td><td>$1,394.7</td><td>$118.4</td><td>$522.5</td><td>$445.8</td><td>$308.0</td></tr><tr><td> Commercial Commitments:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Standby letters of credit</td><td>$3,167.8</td><td>$1,184.1</td><td>$1,559.4</td><td>$422.7</td><td>$1.6</td></tr></table>
<table><tr><td>Acquisition</td><td>Form</td><td>Operating Segment</td><td>Date of Transaction</td></tr><tr><td>ASEP Group Holding B.V.</td><td>Stock</td><td>Rig Technology</td><td>April 2009</td></tr><tr><td>ANS -1001 Ltd. (“Anson”)</td><td>Stock</td><td>Petroleum Services& Supplies</td><td>April 2009</td></tr><tr><td>Spirit Drilling Fluids Ltd.</td><td>Asset</td><td>Petroleum Services& Supplies</td><td>May 2009</td></tr><tr><td>Spirit Minerals L.P.</td><td>Asset</td><td>Petroleum Services& Supplies</td><td>May 2009</td></tr><tr><td>Rincon de los Sauces InspectionOperation</td><td>Asset</td><td>Petroleum Services& Supplies</td><td>June 2009</td></tr><tr><td>Western Thunderhorse</td><td>Asset</td><td>Petroleum Services& Supplies</td><td>September 2009</td></tr><tr><td>South Seas Inspection</td><td>Stock</td><td>Petroleum Services& Supplies</td><td>November 2009</td></tr><tr><td>Hochang Machinery Industries Co., Ltd.</td><td>Stock</td><td>Rig Technology</td><td>December 2009</td></tr><tr><td>Stork MSW</td><td>Stock</td><td>Petroleum Services& Supplies</td><td>December 2009</td></tr></table>
<table><tr><td>2012</td><td>$150</td></tr><tr><td>2013</td><td>110</td></tr><tr><td>2014</td><td>88</td></tr><tr><td>2015</td><td>69</td></tr><tr><td>2016</td><td>58</td></tr><tr><td>Thereafter</td><td>242</td></tr><tr><td>Total future lease commitments</td><td>$717</td></tr></table>
<table><tr><td></td><td colspan="6"> Years Ended December 31,</td></tr><tr><td></td><td colspan="2"> 2011</td><td colspan="2"> 2010</td><td colspan="2"> 2009</td></tr><tr><td></td><td>Number of Shares</td><td> Average Exercise Price</td><td>Number of Shares</td><td> Average Exercise Price</td><td>Number of Shares</td><td> Average Exercise Price</td></tr><tr><td>Shares under option at beginning of year</td><td>11,039,544</td><td>$38.01</td><td>10,255,982</td><td>$34.19</td><td>7,547,822</td><td>$37.24</td></tr><tr><td>Granted</td><td>2,277,946</td><td>79.68</td><td>3,485,283</td><td>44.03</td><td>3,234,400</td><td>26.03</td></tr><tr><td>Cancelled</td><td>-241,174</td><td>40.20</td><td>-232,488</td><td>40.53</td><td>-156,356</td><td>29.79</td></tr><tr><td>Exercised</td><td>-2,594,566</td><td>36.84</td><td>-2,469,233</td><td>30.35</td><td>-369,884</td><td>40.86</td></tr><tr><td>Shares under option at end of year</td><td>10,481,750</td><td>$47.20</td><td>11,039,544</td><td>$38.01</td><td>10,255,982</td><td>$34.19</td></tr><tr><td>Exercisable at end of year</td><td>5,073,965</td><td>$38.47</td><td>5,067,186</td><td>$36.31</td><td>5,308,465</td><td>$33.14</td></tr></table>

Question: What will First for Low reach in 2004 if it continues to grow at its current rate?
Answer: 22.81251