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Cameron International's CEO Discusses Q1 2012 Results - Earnings Call Transcript

On the topic of drilling systems, we see a very healthy market for drilling systems technology and the aftermarket service infrastructure to support it. With demand for deepwater floaters and high-spec jackups growing, coupled with our contractors' commitment to upgrade their current offshore and onshore fleets, we expect another record year for orders. As for Q1's result, we had another great quarter, with orders totaling over $700 million in Q1, up $450 million versus last year, and up $350 million sequentially. We booked 8 subsea stacks and 8 jackup stacks in the quarter.

Aftermarket bookings grew as well, totaling over $190 million in Q1, a $75 million increase versus last year. And investments in our aftermarket operations continue to move forward. Our Gulf of Mexico offshore base in Berwick, our Singapore base in Jurong, our Macaé base in Brazil, and our North Sea support base in Aberdeen, all of these investments will be completed by year end. In response from customers who have been very positive and by judging by our bookings, they are supporting these commitments.

Before we move on to the other business units' results, I would like to expand my comments regarding our acquisition of TTS Energy and its importance to our drilling systems strategy. TTS, combined with LaTourneau and Cameron's legacy products, will provide Cameron a platform to advance its reach, both onshore and offshore. LeTourneau was a great start on our journey to expand Cameron's drilling systems capabilities. However, we still had gaps and TTS Energy provides us a great opportunity to fill many of those gaps. With high-performance drilling control systems, modular top drives capable of lifting 1,250 tons, which is a great complement to our LeTourneau DirectDrive System, hydraulic roughnecks, motion compensation systems, mud control and handling systems, another great complement to our LEWCO Mud Pumps system, plus horizontal and vertical pipe racking systems. And just as significant, we also acquired a great team of dedicated and technically competent personnel based in Kristiansand, Norway.

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