10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

R ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010

OR

£ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-13884

CAMERON INTERNATIONAL CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	76-0451843
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1333 West Loop South
Suite 1700
Houston, Texas	77027
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (713) 513-3300

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, Par Value $0.01 Per Share	New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes R                      No £

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. 

Yes £                      No R

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes R                      No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes R                      No £

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

     Large accelerated filer R                                                                       Accelerated filer £                        & #160;               Non-accelerated filer £Smaller reporting company £

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes £No R

The aggregate market value of the Common Stock, par value $0.01 per share, held by non-affiliates of the registrant as of June 30, 2010, our most recently completed second fiscal quarter, was approximately $5,696,572,432.  For the purposes of the determination of the above statement amount only, all the directors and executive officers of the registrant are presumed to be affiliates. The number of shares of Common Stock, par value $.01 per share, outstanding as of February 11, 2011, was 244,761,237.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of registrant’s Annual Report to Stockholders for the year ended December 31, 2010 are incorporated by reference into Parts I and II. Portions of the registrant’s 2011 Proxy Statement for the Annual Meeting of Stockholders to be held May 3, 2011 are incorporated by reference into Part III.

TABLE OF CONTENTS

	ITEM	PAGE
	PART I
1.	Business	3
	Markets and Products	4
	Market Issues	8
	New Product Development	8
	Competition	9
	Manufacturing	10
	Major Customers	10
	Backlog	10
	Patents, Trademarks and Other Intellectual Property	10
	Employees	10
	Executive Officers of the Registrant	11
	Glossary of Terms	12
1A.	Risk Factors	12
1B.	Unresolved Staff Comments	12
2.	Properties	13
3.	Legal Proceedings	13
4.	Removed and Reserved	15
	PART II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
6.	Selected Financial Data	17
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
7A.	Quantitative and Qualitative Disclosures about Market Risk	17
8.	Financial Statements and Supplementary Data	17
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	17
9A.	Controls and Procedures	17
9B.	Other Information	18
	PART III
10	Directors, Executive Officers and Corporate Governance	18
11.	Executive Compensation	18
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	18
13.	Certain Relationships and Related Transactions, and Director Independence	18
14.	Principal Accountant Fees and Services	18
	PART IV
15.	Exhibits and Financial Statement Schedules	19
	Signatures	26

2

PART I

ITEM 1. BUSINESS

Cameron International Corporation (Cameron or the Company) provides flow equipment products, systems and services to worldwide oil, gas and process industries.  

During the third quarter of 2010, the Company restructured its business segments, moving its Process Systems division from the Drilling & Production Systems (DPS) segment to a newly formed business segment, Process & Compression Systems (PCS), in order to enhance the Company’s processing solutions for customers involved in the exploration, production, storage and transmission of crude oil and natural gas.  PCS also includes the businesses that were previously part of the Compression Systems segment.  The Company’s other business segment is Valves & Measurement (V&M).  For additional business segment information for each of the three years in the period ended December 31, 2010, see Note 15 of the Notes to Consolidated Financial Statements, which Notes are incorporated herein by refer ence in Part II, Item 8 of this Annual Report on Form 10-K.

Cameron’s origin dates back to the mid-1800s with the manufacture of steam engines that provided power for plants and textile or rolling mills. By 1900, with the discovery of oil and gas, Cameron’s predecessor businesses over time became more focused on serving those companies involved in the exploration and production of oil and gas.  This focus grew with the acquisition of various businesses including Cameron Iron Works (blowout preventers, ball valves, control equipment and McEvoy-Willis wellhead equipment and choke valves), The Bessemer Gas Engine Company (gas engines and compressors); Ajax Iron Works (compressors); Superior (engines and compressors); Joy Petroleum Equipment Group (valves, couplings and wellheads); and Joy Industrial Compressor Group (compressors).

Cameron is a Delaware corporation and was incorporated in its current form on November 10, 1994. The Company operated as a wholly-owned subsidiary of Cooper Industries, Inc. until June 30, 1995, when it was spun-off as a separate stand-alone company.  Since then, Cameron has continued its acquisition strategy, having made numerous acquisitions, including the 1996 acquisition of Ingram Cactus Company, the 1998 acquisition of Orbit Valve International, Inc., 2004’s acquisition of Petreco International, Inc., the purchase of substantially all of the businesses within the Flow Control segment of Dresser, Inc. in 2005 and the acquisition of NATCO Group Inc. (NATCO) in 2009.  Today, Cameron is a Fortune 500 company with annual revenues exceeding $6 billion and a workforce of approximately 19,500 employees in more than 300 locations spanning more than 100 countries worldwide.

The common stock of Cameron trades on the New York Stock Exchange under the symbol “CAM”.  The Company’s Internet address is www.c-a-m.com. General information about Cameron, including its Corporate Governance Principles, charters for the committees of the Company’s board of directors, Standards of Conduct, and Codes of Ethics for Management Personnel, including Senior Financial Officers and Directors, can be found in the Ethics and Governance section of the Company’s website. The Company makes available on its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the Exchange Act) as soon as reasonably practicable after the Company electronically files or furnishes them to the United States Securities and Exchange Commission (the SEC).  Information filed by the Company with the SEC is also available at www.sec.gov or may be read and copied at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.  Information regarding operations of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

Any reference to Cameron, its divisions or business units within this Form 10-K as being a leader, leading provider, leading manufacturer, or having a leading position is based on the amount of equipment installed worldwide and available industry data.

See “Glossary of Terms” at the end of Item 1 for definitions of certain terms used in this Form 10-K.

3

Business Segments

Markets and Products

Drilling & Production Systems Segment

The DPS segment includes businesses that provide systems and equipment used to control pressures and direct flows of oil and gas wells. Its products are employed in a wide variety of operating environments including basic onshore fields, highly complex onshore and offshore environments, deepwater subsea applications and ultra-high temperature geothermal operations.

The products within this segment include surface and subsea production systems, blowout preventers (BOPs), drilling and production control systems, block valves, gate valves, actuators, chokes, wellheads, drilling riser and aftermarket parts and services.  The segment’s businesses also manufacture elastomers, which are used in pressure and flow control equipment and other petroleum industry applications, as well as in the petroleum, petrochemical, rubber molding and plastics industries.

The businesses within this segment primarily market their products directly to end-users through a worldwide network of sales and marketing employees, supported by agents in some international locations. Due to the technical nature of many of the products, the marketing effort is further supported by a staff of engineering employees.  Customers include oil and gas majors, national oil companies, independent producers, engineering and construction companies, drilling contractors, rental companies and geothermal energy producers.

The businesses included in this segment are as follows:

Drilling Systems –

Drilling Systems is one of the leading global suppliers of integrated drilling systems for land, platform and subsea applications. Drilling equipment designed and manufactured includes ram and annular BOPs, control systems, drilling riser, drilling valves, choke and kill manifolds, diverter systems and aftermarket parts and services. The products are marketed under the Cameron®, Guiberson®, H&H CUSTOM™, H&H, Melco™ and Townsend™ brand names.

Although Drilling Systems continues to be a primary supplier of BOPs and related equipment to the drilling industry, customer demand has changed during the last few years.  Newbuild rig orders peaked during the 2006 – 2008 period and have been on the decline since.  However, land drilling has been bolstered recently by increased investment in unconventional markets like the major shale areas in North America and higher activity levels in the Middle East, Caspian and Far East.  In April 2010, the drilling rig Deepwater Horizon experienced an explosion and fire, resulting in bodily injuries and loss of life, loss of the rig, and an unprecedented discharge of hydrocarbons into the Gulf of Mexico.  This tragic incident has caused drilling contractors and operators, both on land and in deepwate r environments, to turn to original equipment manufacturers (OEMs) for service, equipment repair and related parts, in many cases to re-certify BOP stacks back to OEM specifications.  By year-end 2010, Drilling Systems had recorded a record level of aftermarket bookings and was experiencing a high level of orders for new land BOPs to replace an aging fleet.

Drilling Systems had previously initiated an expansion of its global aftermarket capabilities, and with the renewed industry emphasis on safety and enhanced focus on use of OEMs, has allocated additional resources to meet increased customer demands at its global repair and service facilities.  Aftermarket capacity was added to facilities in Houston, Odessa and Brookshire (all in Texas) and Berwick, LA, and a new facility was added in Oklahoma.  Additional aftermarket capacity expansions are currently under way in Aberdeen, Scotland; Beziers, France; the Middle East and Malaysia.

Surface Systems –

Surface Systems is a global market leader in supplying surface production equipment, from conventional to high-pressure, high temperature (HPHT) wellheads, production systems and controls, block valves, gate valves, mudline systems, dry completion systems and aftermarket parts and services.  The products are marketed under the Cameron®, Camrod™, IC™, McEvoy®, Precision™, SBS™, Tundra™, Willis® and  WKM® brand names.

4

Cameron, which has a global base of installed equipment and an aftermarket presence in virtually every major hydrocarbon-producing region around the world, is the industry’s largest provider of surface production equipment.  Land rig count in the North American markets rebounded dramatically during 2010, driven by multiple shale gas developments in the United States. Surface Systems added new sales and aftermarket facilities in both the Marcellus and Haynesville Shale regions, and committed additional resources to the growing Eagle Ford Shale play.  In order to further enhance its services to the North American shale markets during 2010, the Company also acquired Eagle Precision Products LLC, a provider of well testing and flowback services.  Internationally, Surface Systems has added a new 2,500 sq uare-meter warehouse in Stavanger, Norway in response to customer demand.

Subsea Systems –

Subsea Systems is a leading provider of subsea wellheads, production systems and controls, manifolds and aftermarket parts and services to customers worldwide, from basic subsea tree orders to integrated solutions that require systems engineering and project management as well as installation and aftermarket support.  These products are marketed under the Cameron®, Mars™, McEvoy® and Willis® brand names.

During 2010, Subsea Systems delivered equipment and services to more than 25 projects worldwide, including two major West Africa projects that are among the largest projects in the industry to date.  As a result, its revenues for 2010 were at a record level and accounted for over 43% of total DPS segment revenues.  Recent investments to enhance the Company’s capacity include a $65 million expansion of the Subsea Systems facility in Malaysia, which was completed in early 2010, the establishment of a new aftermarket base in Perth to better serve customers in Western Australia and expansion of the Company’s facilities in Luanda, Angola and Onne Port, Nigeria to provide local manufacture and assembly of equipment for use in West Africa.  Plans are also underway for a $30 million investment in a 34 ,000-square meter aftermarket facility that will open in China in 2012 to support existing and future projects in the South China Sea.

Flow Control –

Flow Control provides chokes, actuators, gears, valve accessories and automation solutions to other Cameron businesses, as well as to other industry manufacturers and directly to end users under such brand names as Cameron®, Dynatorque™, Ledeen®, Maxtorque™, Test™ and Willis®.

Recent activities to expand the Flow Control business included the mid-year 2009  acquisition of Maxtorque, adding high performance quarter-turn and multi-turn gear operators for motorized and manual applications, overrides and engineered activation solutions, as well as the November 2009 acquisition of NATCO, which added Test Automation to the division’s offerings of activation equipment and automation technology solutions.  During 2010, Flow Control also expanded its subsea Chemical Injection Metering Valve (CIMV) product line, introducing a High-Flow CIMV.  Its non-invasive, ultrasonic metering technology makes it the first CIMV of its type available in the market.  After entering this market in 2008, Flow Control now offers an industry-leading range of CIMVs.

Valves & Measurement Segment

The V&M segment includes businesses that provide valves and measurement systems primarily used to control, direct and measure the flow of oil and gas as they are moved from individual wellheads through flow lines, gathering lines and transmission systems to refineries, petrochemical plants and industrial centers for processing. Equipment used in these environments is generally required to meet demanding standards set by the American Petroleum Institute and the American Society of Mechanical Engineers.

Products include gate valves, ball valves, butterfly valves, Orbit® valves, double block & bleed valves, plug valves, globe valves, check valves, actuators, chokes and aftermarket parts and services, as well as measurement products including totalizers, turbine meters, flow computers, chart recorders, ultrasonic flow meters and sampling systems.

This equipment and the related services are marketed through a worldwide network of combined sales and marketing employees, as well as distributors and agents in selected international locations. Due to the technical nature of many of the products, the marketing effort is further supported by a staff of engineering employees.  Customers include oil and gas majors, independent producers, engineering and construction companies, pipeline operators, drilling contractors and major chemical, petrochemical and refining companies.

5

The businesses included in this segment are as follows:

Distributed Valves –

Distributed Valves provides a wide variety of valves used in the exploration, production and transportation of oil and gas, with products sold through a network of wholesalers and distributors, primarily in North America and to upstream markets in Asia-Pacific and the Middle East.  These valves are marketed under the brand names Cooper®, Demco®, Navco®, Newco®, Nutron®, OIC®, Techno™, Texstream™, Thornhill Craver®, Wheatley® and WKM®.  The recent acquisition of a 51% interest in Newmans Valves created the foundation for a downstream product offering focusing on gate, globe and check valves.

Engineered Valves –

Engineered Valves provides a full range of highly customized ball, gate and check valves serving the oil and gas production, pipeline, subsea and liquefied natural gas (LNG) markets. Products are marketed under the brand names Cameron®, Entech™, Grove®, Ring-O®, TK® and Tom Wheatley®.  A large increase in Canadian oil production, additional infrastructure investment in shale gas in the United States and increased investment in oil and gas production facilities and pipelines internationally led to an increase in orders during 2010.

Process Valves –

Process Valves provides valves under the brand names of General Valve®, Orbit®, TBV™ and WKM®  for use in critical service applications that are often subject to extreme temperature conditions, particularly in refinery, power generation (including nuclear), chemical, petrochemical, gas processing and liquid storage terminal  markets, including LNG.  The current general economic recovery, which is driving demand for processed gas and hydrocarbons, and continued investment in LNG liquefaction capacity in certain international markets contributed to higher order rates for process valves in 2010.

Measurement Systems –

Measurement Systems designs, manufactures and distributes measurement products, systems and solutions to the global oil and gas, process and power industries. The group’s main product brand names include Barton®, Caldon®, Clif Mock™, Jiskoot™, Linco™, Nuflo™ and PAAI™.  Recovery in the North American upstream drilling and production markets led to increased orders and sales of Measurement Systems products during 2010.  The November 2009 acquisition of NATCO, which added the Linco and PAAI brands, has also allowed Measurement Systems to take advantage of the growing oil production markets in liquid custody transfer measurement applications.

Aftermarket Services –

Aftermarket Services provides preventative maintenance, OEM spare parts, repair, field service, asset management and remanufactured products for valves and actuators.  The Division operates service centers in strategically situated locations around the world. During 2009, Aftermarket Services significantly expanded its capabilities for total valve management services for the Australian and Southeast Asia markets with the acquisition of Geographe.  As a result of increased demands for service and maintenance of equipment and facilities by the Company’s customers during 2010, orders and revenue increases were generated from service centers in North America, Asia-Pacific and the Middle East.

Process and Compression Systems Segment

The PCS segment includes businesses that provide standard and custom-engineered process packages for separation and treatment of impurities within oil and gas and compression equipment and aftermarket parts and services to the oil, gas and process industries. Integrally geared centrifugal compressors are used by customers around the world in a variety of industries, including air separation, petrochemical, chemical and process gas. Products include oil and gas separation equipment, heaters, dehydration and desalting units, gas conditioning units, membrane separation systems, water processing systems, integral engine-compressors, separable reciprocating compressors, two and four-stroke cycle gas engines, turbochargers, integrally-geared centrifugal compressors, compressor systems and controls. Aftermarket services include spare parts, technical services, repairs, overhauls and upgrades.

6

The businesses included in this segment are as follows:

Process Systems –

The completion of the NATCO acquisition in late 2009 expanded the size, product offerings and global reach of Cameron’s separation and processing business.  The Process Systems business provides custom-engineered process packages to oil and gas majors, national oil companies, independent operators and engineering, procurement and construction companies worldwide for separation and treatment of oil, gas, water and solids.  Products offered include separators, heaters, dehydration and desalting units, gas conditioning units, membrane separation systems, water processing systems and aftermarket parts and services.  DPS markets its process systems products under the Cameron®, Consept™, Cynara®, Hydromation®, KCC™, Metrol®, Mozley™, NATCO®, Petreco®, Porta-test®, Unicel™, V ortoil® and Wemco® brand names.

During 2009, Process Systems relocated its Technology Center from Tulsa, Oklahoma to Houston, Texas to better facilitate and support many industry partnerships and product development programs with customers.

Reciprocating Compression –

Reciprocating Compression equipment is used throughout the energy industry by gas transmission companies, compression leasing companies, oil and gas producers and independent power producers. Reciprocating Compression  products and services are marketed under the Ajax®, Cooper-Bessemer®, CSI™, Enterprise®, Superior®, Texcentric™ and TSI™ brand names. Ajax integral engine-compressors, which combine the engine and compressor on a single drive shaft, are used for gas re-injection and storage, as well as on smaller gathering and transmission lines. Superior-brand separable compressors are used primarily for natural gas applications, including production, storage, withdrawal, processing and transmission, as well as petrochemical processing. These high-speed separable compressor units can be matched with either natural gas engine drivers or electric motors.

Reciprocating Compression also provides global support for its products and maintains sales and service offices in key international locations. For the year ended December 31, 2010, approximately 69% of the Reciprocating Compression revenues were generated by sales of aftermarket parts and services in support of the Company’s worldwide installed base of compression equipment.

Customers for Reciprocating Compression products include oil and gas majors, national oil companies, petrochemical and refining companies, midstream natural gas companies, independent power producers and compressed natural gas distribution companies.

Centrifugal Compression –

Centrifugal Compression manufactures and supplies integrally geared centrifugal compressors and provides aftermarket services to customers worldwide. Centrifugal air compressors, used primarily in manufacturing processes (plant air), are sold under the trade name of Turbo-Air®.

Engineered compressors are used in the process air and gas industries and are identified by the MSG® trade name. The process and plant air centrifugal compressors deliver oil-free compressed air and other gases to customers, thus preventing oil contamination of the finished products.

Centrifugal Compression also provides installation and maintenance services, parts, repairs, overhauls and upgrades to its worldwide customers for plant air and process gas compressors. It also provides aftermarket service and repairs on all equipment it produces through a worldwide network of distributors, service centers and field service technicians utilizing an extensive inventory of parts marketed under the Joy™ brand name.

Centrifugal Compression customers include oil and gas majors, national oil companies, air separation companies, independent power producers, petrochemical and refining companies, midstream natural gas companies and durable goods manufacturers.

7

Market Issues

Cameron is one of the leaders in the global market for the supply of petroleum production equipment. Cameron believes that it is well-positioned to serve these markets. Plant and service center facilities around the world in major oil- and gas-producing regions provide a broad market coverage. Information relating to revenues generated from shipments to various geographic regions of the world is set forth on page 29 of “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cameron International Corporation” incorporated by reference in Part II, Item 7 of this Annual Report on Form 10-K and incorporated herein by reference.

The market beyond North America continues to be of greater importance to Cameron, accounting for approximately 60% or more of Cameron’s revenues for each of the three years in the period ended December 31, 2010.   The desire to expand oil and gas resources and transmission capacity in developed and developing countries, for both economic and political reasons, continues to be a major factor affecting market demand. Additionally, establishment of industrial infrastructure in the developing countries will necessitate the growth of basic industries that require plant air and process compression equipment. Production and service facilities in North and South America, Europe, the Far and Middle East and West Africa provide the Company with the ability to serve the global marketplace.

Based upon the Company’s broad portfolio of products, the Company has a significant presence in the offshore oil and gas drilling, production and infrastructure market.  Cameron provides BOPs, drilling and production risers, subsea production systems, oil and gas separation equipment, chokes, valves and compression equipment to the offshore market.  In fact, six of the Company’s eleven divisions participate in this market.  Approximately 41% of the Company’s 2010 revenues was derived from the deepwater market.

Cameron is also a significant participant in serving the subsea systems projects market.  This market is significantly different from the Company’s other markets since subsea systems projects are significantly larger in scope and complexity, in terms of both technical and logistical requirements. Subsea projects (i) typically involve long lead times, (ii) typically are larger in financial scope, (iii) typically require substantial engineering resources to meet the technical requirements of the project and (iv) often involve the application of existing technology to new environments and in some cases, new technology. The Company’s subsea business unit received orders in the amount of $1.1 billion during 2010.  Total backlog for the subsea business unit at December 31, 2010 was approximately $2.2 billion.   To the extent the Company experiences unplanned efficiencies or difficulties in meeting the technical and/or delivery requirements of the projects, the Company’s earnings or liquidity could be positively or negatively impacted.  As of December 31, 2010, the Company had a subsea systems project backlog of approximately $1.5 billion.  For additional information, see the Company’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cameron International Corporation” incorporated by reference in Part II, Item 7 of this Annual Report on Form 10-K and incorporated herein by reference.

Also, see Part I, Item 1A for a discussion of other risk factors, some of which are market related, that could affect the Company’s financial condition and future results.

New Product Development

For the years ended December 31, 2010, 2009 and 2008, the Company incurred research and product development costs, including costs incurred on projects designed to enhance or add to its existing product offerings, totaling approximately $55.2 million, $43.3 million and $42.6 million, respectively.  DPS accounted for 59%, 46% and 49% of each respective year’s total costs.

During 2010, Cameron received an order from an oil and gas operator for the design, test and manufacture of the world’s first 13⅝” 25,000-psi BOP stack for use in a high-pressure application in the Gulf of Mexico.

Additionally, after introducing the world’s first 18¾” 20,000-psi BOP stack in 2009, Cameron received the first order for such a unit from a major offshore drilling contractor during 2010.  This new offering provides the characteristics of reduced height and weight found in the EVO™ BOP that was introduced in 2007 as a compact, lighter version of Cameron’s traditional subsea BOP.  Also during 2008, the Company introduced the Sea Pressure Accumulator™ (SPA), a complement to the EVO BOP, which uses seawater pressure instead of traditional nitrogen-charged accumulator bottles to power the BOP rams.

The Drilling Systems division also introduced Cameron’s RoboSpider™ in 2009, the world’s first fully automated hydraulic drilling riser torque system, and the NASMUX™ System, an acoustic controls system for subsea BOPs that offers an alternative to traditional multiplexed control systems.

8

During 2009, Cameron’s Surface Systems division began offering the EXACT-10™ (10,000-psi) and EXACT-15™ (15,000-psi) Adjustable Wellhead Systems, suitable for both exploration and production drilling applications, and a new DF-PA (Diver-Friendly Plug & Abandonment) System, designed specifically for installation on hurricane-damaged wells in the Gulf of Mexico.

Cameron’s Subsea Systems division made the initial deployment of its all-electric subsea production system, CameronDC™, in late 2008 in Total’s K5F field in the Dutch North Sea.  This system has operated for more than two years on two producing gas wells.  The performance to date has confirmed the viability of the technology.  A second generation version of CameronDC is expected to launch during 2011, based on the experience derived from the initial two years of operations.  In addition, the CameronDC process has yielded a spin-off product development, the Omni-Choke™, introduced during 2010.  The Omni-Choke provides the benefits and functionality of electric actuation as employed in CameronDC, but can be used in both new and existing applications with virtually any traditional controls system.  Another recent offering from the Subsea Systems division is the Multiple Application Reinjection System (MARS™), a unique well intervention system that serves as an interface between subsea production trees and a variety of processing equipment.  The flexibility of the MARS system to address production and well intervention needs on both new and existing fields provides increased operational efficiency to the operator.  This is accomplished by providing a more economical alternative to drill rig intervention for things such as chemical injection, fluid sampling, and other technologies that maintain and increase production through the life of a reservoir.  The technology continues to be adopted by clients worldwide with over 80 units sold for a variety of applications.

Product innovations during 2010 by Cameron’s Flow Control division included the development of the first 25,000-psi-rated surface production choke and a large-bore (8-inch) subsea insert retrievable choke.  Both products complement production tree solutions for key Cameron projects.

With the November 2009 acquisition of NATCO, Cameron’s Process Systems division added NATCO’s unique CO2 membrane separation technology to its current product offerings and has continued to make significant investments during 2010 to increase the efficiency and reduce the size of these applications for the offshore market.

Competition

Cameron competes in all areas of its operations with a number of other companies, some of which have financial and other resources comparable to or greater than those of Cameron.

Cameron has a leading position in the petroleum production equipment markets. In these markets, Cameron competes principally with Aker Solutions, Balon Corporation, Circor International, Inc., Dover Corporation, Dril-Quip, Inc., Emerson Process Management, FlowServ Corp., FMC Technologies, Inc., GE Oil & Gas Group, Masterflo (a division of Stream-Flo Industries Ltd. (i.e. Stream), National Oilwell Varco Inc., PBV-USA, Inc. (a Zy-Tech Global Industries company), Petrovalve (a Flotek Industries, Inc. company), Pibiviese, Robbins & Myers Fluid Management Group, SPX Corporation’s Flow Technology Segment, Tyco International Ltd. and the Artificial Lift Systems business of Weatherford, Ltd.

The principal competitive factors in the petroleum production equipment markets are technology, quality, service and price. Cameron believes several factors give it a strong competitive position in these markets. Most significant are Cameron’s broad product offering, its worldwide presence and reputation, its service and repair capabilities, its expertise in high-pressure technology and its experience in alliance and partnership arrangements with customers and other suppliers.

Cameron also has an established position in the compression equipment markets. In these markets, Cameron competes principally with Ariel Corporation, Atlas-Copco AB, CECO (a Compressor Engineering Corporation company), Demag, Dresser-Rand Company, FS-Elliott Company LLC, Endyn Energy Dynamics, Hoerbiger Group and IR Air Solutions. The principal competitive factors in the compression equipment markets are engineering and design capabilities, product performance, reliability, quality, service and price. Cameron has a competent engineering staff and skilled technical and service representatives.

9

Manufacturing

Cameron has manufacturing facilities worldwide that conduct a broad variety of processes, including machining, fabrication, assembly and testing, using a variety of forged and cast alloyed steels and stainless steel as the primary raw materials. In previous years, Cameron has rationalized plants and products, closed various manufacturing facilities, moved product lines to achieve economies of scale, and upgraded other facilities.  In more recent times, the Company has constructed or begun construction on new facilities, mainly in certain locations outside of North America, in order to meet current and expected future demand, particularly with regard to its surface and subsea product offerings.  This is an ongoing process as the Company seeks ways to improve delivery performance and reduce costs.  Cameron maintains advanced manufacturing, quality assurance and testing equipment geared to the specific products that it manufactures and uses process automation in its manufacturing operations.  Manufacturing facilities typically utilize computer-aided, numeric-controlled tools and manufacturing techniques that concentrate the equipment necessary to produce similar products in one area of the plant in a configuration commonly known as a manufacturing cell.  One operator in a manufacturing cell can monitor and operate several machines, as well as assemble and test products made by such machines, thereby improving operating efficiency and product quality.

Cameron’s test capabilities are critical to its overall processes. The Company has the capability to test most equipment at rated operating conditions, measuring all operating parameters, efficiency and emissions. All process compressors for air separation and all plant air compressors are given a mechanical and aerodynamic test in a dedicated test center prior to shipment.

All of Cameron’s Asian, European and Latin American manufacturing plants are ISO certified and API licensed, and most of the U.S. plants are ISO certified. ISO is an internationally recognized verification system for quality management.

Major Customers

Largely as a result of major subsea project activity levels, revenue from BP p.l.c. and its consolidated subsidiaries accounted for approximately 12% of the Company’s consolidated 2010 revenues.  During 2009 and 2008, no individual customer accounted for more than 10% of the Company’s consolidated revenues.

Backlog

Cameron’s backlog was approximately $4.8 billion at December 31, 2010 (approximately 78% of which is expected to be shipped during 2011), as compared to $5.2 billion at December 31, 2009, and $5.6 billion at December 31, 2008.  Backlog consists of customer orders for which a purchase order has been received, satisfactory credit or financing arrangements exist and delivery is scheduled.

Patents, Trademarks and Other Intellectual Property

As part of its ongoing research, development and manufacturing activities, Cameron has a policy of seeking patents when appropriate on inventions involving new products and product improvements. Cameron owns 359 unexpired United States patents and 778 unexpired foreign patents. During 2010, 54 new U.S. and 52 new foreign patent applications were filed.

Although in the aggregate these patents are of considerable importance to the manufacturing of many of its products, Cameron does not consider any single patent or group of patents to be material to its business as a whole.

Trademarks are also of considerable importance to the marketing of Cameron’s products. Cameron considers the following trade names to be material to its business as a whole: CAMERON, COOPER-BESSEMER, AJAX, WILLIS, W-K-M and NATCO. Other important trademarks used by Cameron are included under “Markets and Products” above.  Cameron has registered trademarks in countries where such registration is deemed important.

Cameron has the right to use the trademark Joy on aftermarket parts until November 2027.

Cameron also relies on trade secret protection for its confidential and proprietary information. Cameron routinely enters into confidentiality agreements with its employees, partners and suppliers. There can be no assurance, however, that others will not independently obtain similar information or otherwise gain access to Cameron’s trade secrets.

Employees

As of December 31, 2010, Cameron had approximately 19,500 employees, of which approximately 23% were represented by labor unions. Over 892 of these employees are covered by contracts expiring in 2011.   In Romania, the Company has approximately 546 employees at its facilities with contracts expiring on various dates in the second half of 2011.

The Company entered into a number of new agreements during 2010, one of which covers 383 employees in Leeds, United Kingdom.  No other significant agreements were entered into during 2010.

10

Executive Officers of the Registrant

Name and Age	Present Principal Position and Other Material Positions Held During Last Five Years
Jack B. Moore (57)	President and Chief Executive Officer since April 2008.  President and Chief Operating Officer from January 2007 to March 2008. Senior Vice President from July 2005 to December 2006.  Vice President from May 2003 to July 2005.  President, Drilling and Production Systems segment from July 2002 to December 2006.  Vice President and General Manager, Cameron Western Hemisphere from July 1999 to July 2002.  Vice President Western Hemisphere Operations, Vice President Eastern Hemisphere, Vice President Latin American Operations, Director Human Resources, Director Market Research and Director Materials of Baker Hughes Incorporated from 1976 to July 1999.  Serves on the board of directors of the American Petroleum Institute (API), National Ocean Industries Association (NOIA), Greater Houston Partnership, Spindletop, the University of Houston Bauer College of Business, and Memorial Drive United Methodist Church.
John D. Carne (62)	Chief Operating Officer since August 2010.  Executive Vice President since March 2010.  Senior Vice President from February 2006 to February 2010.  Vice President from May 2003 to February 2006. President, Drilling and Production Systems segment since January 2007. President, Valves and Measurement segment from April 2002 to December 2006. Director of Operations, Eastern Hemisphere, Cameron division from 1999 to March 2002. Plant Manager, Leeds, England, Cameron division from 1996 to 1999. Director of Operations, U.K. & Norway, Cooper Energy Services (U.K.) Ltd. from 1988 to 1996.
William C. Lemmer (66)	Senior Vice President and General Counsel since May 2008, Senior Vice President, General Counsel and Secretary from July 2007 to May 2008. Vice President, General Counsel and Secretary from July 1999 to July 2007. Vice President, General Counsel and Secretary of Oryx Energy Company from 1994 to March 1999.
Charles M. Sledge (45)	Senior Vice President and Chief Financial Officer since November 2008.  Vice President and Chief Financial Officer from April 2008 to November 2008.  Vice President and Corporate Controller from July 2001 to March 2008. Senior Vice President, Finance and Treasurer from 1999 to June 2001, and Vice President, Controller from 1996 to 1999, of Stage Stores, Inc., a chain of family apparel stores.
James E. Wright (57)	Senior Vice President since March 2010.  President, Valves & Measurement segment since January 2007.  President, Distributed and Process Valves divisions from December 2005 to December 2006. Vice President and General Manager, Distributed Products from August 2002 to December 2005. Vice President and General Manager, North America Pipeline and Distributor Products from June 2001 to August 2002 and Vice President Marketing and North American Sales for V&M from August 1998 to June 2001.
Joseph H. Mongrain (53)	Vice President, President of Process & Compression Systems segment since August 2010.  Vice President, Human Resources from June 2006 to August 2010.  Director, Human Resources, Schlumberger, Data and Consulting from May 2004 to May 2006 and Director, Human Resources, Schlumberger, North and South America from January 2001 to April 2004.

Roslyn R. Larkey (52 )

Vice President, Human Resources responsible for the Company's worldwide human resources programs since August 2010. Joined Cameron in 2000 and appointed to current position in August 2010.  Recently held the position of Vice President, Human Resources for Cameron’s Valves & Measurement segment, and also served as Director, Employee Relations & Organizational Development and Vice President, HR Surface Systems division. Previously held key human resources roles at The Coastal Corporation and Metamor Worldwide.

Christopher A. Krummel (42)

Vice President, Controller and Chief Accounting Officer since April 2008.  Assistant Controller from October 2007 to March 2008.   Chief Financial Officer from October 2003 to October 2007 of Enventure Global Technology, a joint venture of Royal Dutch Shell and Halliburton.  Vice President of Capital Planning and Allocation, Vice President of Mergers and Acquisitions and Division Financial Controller for Petroleum Geo-Services from 1995 to 2003.

11

Glossary of Terms

Actuator. A hydraulic or electric motor used to open or close valves.

Blowout Preventer or BOP. A hydraulically operated system of safety valves installed at the wellhead during drilling and completion operations for the purpose of preventing an increase of high-pressure formation fluids — oil, gas or water — in the wellbore from turning into a “blowout” of the well.

Centrifugal compressor. A compressor with an impeller or rotor, a rotor shaft and a casing which discharges gases under pressure by centrifugal force.

Choke. A type of valve used to control the rate and pressure of the flow of production from a well or through flowlines.

Christmas tree. An assembly of valves, pipes and fittings used to control the flow of oil and gas from a well.

Compressor. A device used to create a pressure differential in order to move or compress a vapor or a gas.

Controls. A device which allows the remote triggering of an actuator to open or close a valve.

Drilling stack. A vertical arrangement of blowout prevention equipment installed at the top of the casing at a wellhead to provide maximum pressure integrity in the event of a well control incident for drilling and completion operations.

Elastomer. A rubberized pressure control sealing element used in drilling and wellhead applications.

Integral reciprocating engine-compressor. A compressor in which the crankshaft is shared by the engine and compressor, each having its own piston rods driven by the shared crankshaft.

Integrally geared centrifugal compressor. A compressor in which the motor is geared so that the compressor runs at higher rpms than the motor itself to gain efficiency.

Reciprocating compressor. A compressor in which the compression effect is produced by the reciprocating motion of pistons and plungers operating in cylinders.

Riser. Pipe used to connect the wellbore of offshore wells to drilling or production equipment on the surface, and through which drilling fluids or hydrocarbons travel.

Subsea tree. An assembly of valves, actuators and ancillary equipment connected to the top of the casing of a well located on the sea floor to direct and control the flow of oil and gas from the well.

Valve. A device used to control the rate of flow in a line, to open or shut off a line completely, or to serve as an automatic or semi-automatic safety device.

Wellhead. The equipment installed at the surface of a wellbore to maintain control of a well and including equipment such as the casing head, tubing head and Christmas tree.

ITEM 1A. RISK FACTORS

The information set forth under the caption “Factors That May Affect Financial Condition and Future Results” on pages 43 to 46 in the 2010 Annual Report to Stockholders is incorporated herein by reference.

ITEM 1B. UNRESOLVED STAFF COMMENTS

There were no unresolved comments from the SEC staff at the time of filing of this Form 10-K.

12

ITEM 2. PROPERTIES

The Company currently operates facilities ranging in size from approximately 600 square feet to approximately 1,243,000 square feet.  In addition to its manufacturing facilities, the Company also owns and leases warehouses, distribution centers, aftermarket and storage facilities, sales and administrative offices. The Company leases its corporate headquarters office space and space for the DPS, V&M and PCS division headquarters in Houston, Texas.

 The Company manufactures, markets and sells its products and provides services throughout the world, operating facilities in numerous countries. At December 31, 2010, the significant facilities used by Cameron throughout the world for manufacturing, distribution, aftermarket services, machining, storage, warehousing, sales and administration contained an aggregate of approximately 14,442,000 square feet of space, of which approximately 8,371,000 square feet (58%) was owned and approximately 6,071,000 (42%) was leased.  Of this total, approximately 7,832,000 square feet of space (54%) is located in the Western Hemisphere, approximately 4,084,000 square feet of space (28%) is located in the Eastern Hemisphere, approximately 1,909,000 square feet of space (13%) is located in Asi a Pacific and the Middle East and approximately 617,000 square feet of space (4%) is located in West Africa. The table below shows the number of significant operating manufacturing, warehouse, distribution and aftermarket facilities and sales and administrative offices by business segment and geographic area. DPS and V&M share space in certain facilities and, thus, are being reported together.

	Western Hemisphere		Eastern Hemisphere		Asia/Pacific and Middle East		West Africa		Total
DPS and V&M		145		42		55		11		253
PCS		59		7		3		–		69
Corporate		1		2		–		–		3
		205		51		58		11		325

The Company’s operations in the “Western Hemisphere” are mainly located in North and South America.  The Company’s operations in the “Eastern Hemisphere” are mainly located in the United Kingdom, Norway and on the European continent.  The Company’s operations in the “Asia/Pacific and Middle East” region are mainly located on the Asian continent, in countries considered to be on the Pacific rim of the Asian continent or in the area of the world commonly known as the “Middle East”.  The Company’s operations in “West Africa” are mainly located in Angola, Algeria and Nigeria.

Cameron believes its facilities are suitable for their present and intended purposes and are adequate for the Company’s current and anticipated level of operations.

ITEM 3. LEGAL PROCEEDINGS

The Company is subject to a number of contingencies, including litigation, tax contingencies and environmental matters.

Deepwater Horizon Matter

A blowout preventer (“BOP”) originally manufactured by the Company and delivered in 2001, and to which the Company was one of the suppliers of spare parts and repair services, was deployed by the drilling rig Deepwater Horizon when it experienced a tragic explosion and fire on April 20, 2010, resulting in bodily injuries and loss of life, loss of the rig, and an unprecedented discharge of hydrocarbons into the Gulf of Mexico.

While the Company did not operate the BOP, nor did it have anyone on the rig at the time of the incident, claims for personal injury, wrongful death and property damage arising from the Deepwater Horizon incident have been and will continue to be asserted against the Company and others.  Additionally, claims for pollution and other economic damages, including business interruption and loss of revenue, have been, and we anticipate will continue to be, asserted against all parties allegedly associated with this incident, including the Company, BP plc and certain of its subsidiaries, as the operating working  int erest owner of Mississippi Canyon Block 252 upon which the Macondo well was being drilled, Transocean Ltd. and certain of its affiliates, as the drilling  rig owner and operator, as well as other equipment and service companies, including Halliburton.   The Company has been named as one of multiple defendants in over 330 suits filed in a variety of Federal and State courts, a number of which have been filed as class actions or multi-plaintiff actions.  Most of these suits have been centralized into a single proceeding before a single Federal judge under the Federal rules governing multi-district litigation.  The consolidated case is styled In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico on April 20, 2010, MDL Docket No. 2179.  There are also a small number of cases pending in which Cameron is a party in state courts.  The State of Alabama ha s brought a claim for destruction of and/or harm to natural resources against those associated with this incident, including Cameron, in State of Alabama, ex. rel. Troy King, Attorney General vs. Transocean Ltd., et. al., Cause No. 2:10cv00691, U.S. Dist. Ct., M.D. Ala., as have 4 municipalities and 3 Mexican states.  All of these suits by governmental entities have been made part of the MDL proceeding. It is possible other such claims may be asserted by the United States Government and by the Gulf and/or East Coast States, whose Attorneys General have notified the Company to preserve documents in the event of a claim, and possibly by other parties.  A  shareholder derivative suit has been filed against the Company’s directors in connection with this incident and its aftermath alleging the Company’s directors failed to exercise their fiduciary duties regarding oversight of the Company’s BOP business (Berzner vs. Erikson, et al., Cause No. 2010-71817 in the 190th District Court of Harris County, Texas).  This incident and its causes are also being investigated by a joint investigation team of the U.S. Coast Guard and the Bureau of Ocean Energy Management (the “JIT”), which has named Cameron as a party-in-interest, the Departments of the Interior and Justice, the U.S. Chemical Safety and Hazard Investigation Board, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, and by numerous other governmental entities, including Congressional Committees. 

13

Based on the facts known to date, the Company is of the opinion that there was no defect in or failure of the BOP that caused or contributed to the explosion.  The reasons as to why the efforts to shut-in the well after the explosion were unsuccessful are not yet known and are the subject of multiple investigations.  The results of a forensic examination of the BOP commissioned by the JIT as part of its investigation are expected to be made known by the end of March 2011.  Additionally, the extent of the environmental impact, and the ultimate costs and damages that will ultimately be determined attributable to this incident and its aftermath are not yet known and therefore canno t be reasonably estimated.  As a result, we are unable to make any reasonable determination of what liability, if any, the Company could be found to have with respect to any of these claims or whether the Company will be found to have any liability, directly or by way of contribution, under any environmental laws or regulations or otherwise. BP and Transocean, as well as Anadarko and Moex, as non-operating working interest owners, have been designated Responsible Parties liable for the pollution emanating from the Macondo well under the Oil Pollution Act of 1990 (OPA), and have, at least in part, accepted such designation.  Cameron has not been named a Responsible Party under OPA.

   The applicable contracts between Cameron and Transocean entities provide for customary industry “knock-for-knock” indemnification by which each party agreed to bear the risk of, and hold the other harmless with respect to, all claims for personal injury, to include wrongful death, and property loss or damage of its own, its employees and those of its invitees.  In addition, the contracts provide that Transocean will indemnify Cameron for pollution or other damages associated with blowout or loss of well control to the fullest extent of any indemnity it has from its customers, which in this case is BP.  Transocean has publicly stated that it has a full pollution indemnity from BP, though BP has so far declined to acknowledge a ny obligation under such indemnity.  Whereas, Transocean has settled lawsuits filed by its employees and the settlement agreements provide for a release of Cameron, Transocean has yet to honor its indemnity obligations with respect to personal injury and property damage of its invitees or with respect to pollution liability. 

   The Company has commercial general liability insurance, including completed products and sudden accidental pollution coverage, with limits of $500 million and a self retention of $3 million.  Defense costs are not covered by the policy.  The Company has notified its insurers of the claims being asserted against it.  Coverage includes claims for personal injury and wrongful death, as well as liability for pollution and loss of revenue/business interruption.

   While the  Company’s BOPs have a history of reliable performance when properly maintained and operated in accordance with product specifications, until the litigation referred to above progresses and until the investigations referred to above are completed, we are unable to determine the extent of the Company’s future involvement in the litigation and any liability resulting from this incident.  If it is ultimately determined that the Company bears some responsibility, and therefore liability, for the costs and damages caused by this event, we will rely on our contractual indemnity rights and then, if and to the extent necessary and available, on our insurance coverage.  We have received a “reservation of rights” letter from our insurers.  If our contractual indemnities are determined to be inapplicable, or the indemnitors fail or are unable to fulfill their contractual indemnity obligations, and if the damages and costs ultimately determined to be the Company’s responsibility exceed our available insurance coverage, we could be liable for amounts that could have a material adverse impact on our financial condition, results of operations and cash flows.

   Through December 31, 2010, the Company incurred and expensed legal fees of $12.5 million.  The Company has not accrued any amounts relating to this matter because we do not believe at the present time a loss is probable.

Other Litigation

In 2001, the Company discovered that contaminated underground water from a former manufacturing site in Houston (see discussion below under Environmental Matters) had migrated under an adjacent residential area. Pursuant to applicable state regulations, the Company notified the affected homeowners. Concerns over the impact on property values of the underground water contamination and its public disclosure led to a number of claims by homeowners.  The Company has settled these claims, primarily as a result of the settlement of a class action lawsuit, and is obligated to reimburse 197 homeowners for any diminution in value of their property due to contamination concerns at the time of any sale.

      Based upon 2009 testing results of monitoring wells on the southeastern border of the plume, the Company notified at that time 33 homeowners whose property is adjacent to the class area that their property may be affected.  The Company is taking remedial measures to prevent these properties from being affected.

The Company believes, based on its review of the facts and law, that any potential exposure from existing agreements as well as any possible new claims that may be filed with respect to this underground water contamination will not have a material adverse effect on its financial position or results of operations. The Company’s consolidated balance sheet included a liability of approximately $11.7 million for these matters as of December 31, 2010.

14

      The Company has been named as a defendant in a number of multi-defendant, multi-plaintiff tort lawsuits since 1995. At December 31, 2010, the Company’s consolidated balance sheet included a liability of approximately $7.4 million for such cases. The Company believes, based on its review of the facts and law, that the potential exposure from these suits will not have a material adverse effect on its consolidated results of operations, financial condition or liquidity.

Regulatory Contingencies

The Company has completed its Focused Assessment Audit initiated in 2007 by the Regulatory Audit Division of the U.S. Customs and Border Protection, Department of Homeland Security.  The audit report found that the Company’s corrective actions taken in response to the audit findings were acceptable.

      In July 2007, the Company was one of a number of companies to receive a letter from the Criminal Division of the U.S. Department of Justice (DOJ) requesting information on activities undertaken on their behalf by a customs clearance broker. The DOJ is inquiring into whether certain of the services provided to the Company by the customs clearance broker may have involved violations of the U.S. Foreign Corrupt Practices Act (FCPA).  In response, the Company engaged special counsel reporting to the Audit Committee of the Board of Directors to conduct an investigation into its dealings with the customs clearance broker in Nigeria to determine if any payment made by the customs clearance broker in connection with the importation of Company property constituted a violation of the FCPA. Special co unsel also reviewed the extent, if any, of the Company’s knowledge and involvement in the performance of these services and activities and whether the Company fulfilled its obligations under the FCPA.  The U.S. Securities and Exchange Commission (SEC) is also conducting an informal inquiry into the same matters.  The investigation by special counsel has been completed and the Company is waiting for the agencies to commence discussions regarding the ultimate disposition of this matter.  At this stage, the Company cannot predict what the disposition of this matter will entail.

Tax Contingencies

The Company has legal entities in over 35 countries. As a result, the Company is subject to various tax filing requirements in these countries. The Company prepares its tax filings in a manner which it believes is consistent with such filing requirements. However, some of the tax laws and regulations to which the Company is subject require interpretation and/or judgment. Although the Company believes the tax liabilities for periods ending on or before the balance sheet date have been adequately provided for in the financial statements, to the extent a taxing authority believes the Company has not prepared its tax filings in accordance with the authority’s interpretation of the tax laws and regulations, the Company could be exposed to additional taxes.

Environmental Matters

The Company is currently identified as a potentially responsible party (PRP) with respect to two sites designated for cleanup under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) or similar state laws. One of these sites is Osborne, Pennsylvania (a landfill into which a predecessor of the PCS operation in Grove City, Pennsylvania deposited waste), where remediation is complete and remaining costs relate to ongoing ground water treatment and monitoring. The other is believed to be a de minimis exposure. The Company is also engaged in site cleanup under the Voluntary Cleanup Plan of the Texas Commission on Environmental Quality at former manufacturing locations in Houston and Missouri City, Texas. Additionally, the Company has discontinued operations at a number of other sites which had been active for many years. The Company does not believe, based upon information currently available, that there are any material environmental liabilities existing at these locations. At December 31, 2010, the Company’s consolidated balance sheet included a noncurrent liability of approximately $6.8 million for environmental matters.

ITEM 4. REMOVED AND RESERVED

N/A.

15

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The common stock of Cameron International Corporation, par value $.01 per share, is traded on the New York Stock Exchange (“NYSE”) under the symbol CAM. No dividends were paid during 2010 or 2009.

The trading activity during 2010 and 2009 was as follows:

	Price Range ($)
	High		Low		Last
2010
First Quarter	$	45.43	$	35.98	$	42.86
Second Quarter		47.44		31.86		32.52
Third Quarter		44.50		31.42		42.96
Fourth Quarter		51.71		41.34		50.73

	Price Range ($)
	High		Low		Last
2009
First Quarter	$	25.74	$	17.19	$	21.93
Second Quarter		33.07		21.01		28.30
Third Quarter		39.72		24.63		37.82
Fourth Quarter		42.49		35.37		41.80

As of February 11, 2011, the approximate number of stockholders of record of Cameron common stock was 1,059.

Information concerning securities authorized for issuance under stock-based compensation plans is included in Note 9 of the Notes to Consolidated Financial Statements, which notes are incorporated herein by reference in Part II, Item 8 hereof.

Under a resolution adopted by the Board of Directors on February 21, 2008, the Company is authorized to purchase up to 30.0 million shares of its common stock.  Additionally, on May 22, 2006, the Company’s Board of Directors approved repurchasing shares of the Company’s common stock with the proceeds remaining from the Company’s 2.5% Convertible Debenture offering, after taking into account a planned repayment of $200.0 million principal amount of the Company’s outstanding 2.65% Senior Notes due 2007. This authorization is in addition to the 30.0 million shares described above. 

Purchases pursuant to the 30.0 million-share Board authorization may be made by way of open market purchases, directly or indirectly, for the Company’s own account or through commercial banks or financial institutions and by the use of derivatives such as a sale or put on the Company’s common stock or by forward or economically equivalent transactions. 

Shares of common stock purchased and placed in treasury during the three months ended December 31, 2010 under the Board’s two authorization programs described above were as follows:

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of all repurchase programs		Maximum number of shares that may yet be purchased under all repurchase programs (a)
10/1/10 - 10/31/10		−	$	−		29,658,873		2,995,897
11/1/10 - 11/30/10		−	$	−		29,658,873		2,995,897
12/1/10 - 12/31/10		−	$	−		29,658,873		2,995,897
Total		−	$	−		29,658,873		2,995,897

(a)  As of December 31, 2010, there were no remaining shares available for purchase under the May 22, 2006 Board authorization.

16

ITEM 6. SELECTED FINANCIAL DATA

The information set forth under the caption “Selected Consolidated Historical Financial Data of Cameron International Corporation” on page 84 in the 2010 Annual Report to Stockholders is incorporated herein by reference.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cameron International Corporation” on pages 29 to 49 in the 2010 Annual Report to Stockholders is incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information for this item is set forth in the section entitled “Market Risk Information” on pages 47 to 49 in the 2010 Annual Report to Stockholders and is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following consolidated financial statements of the Company and the independent registered public accounting firm’s reports set forth on pages 50 to 83 in the 2010 Annual Report to Stockholders are incorporated herein by reference:

Management’s Report on Internal Control Over Financial Reporting.

Report of Independent Registered Public Accounting Firm.

Report of Independent Registered Public Accounting Firm.

Consolidated Results of Operations for each of the three years in the period ended December 31, 2010.

Consolidated Balance Sheets as of December 31, 2010 and 2009.

Consolidated Cash Flows for each of the three years in the period ended December 31, 2010.

Consolidated Changes in Stockholders’ Equity for each of the three years in the period ended December 31, 2010.

Notes to Consolidated Financial Statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a) The Company carried out an evaluation, under the supervision and with the participation of the Company’s Disclosure Committee and the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of December 31, 2010.   Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2010 to ensure that information required to be disclosed by the Company that it files or submits under the Exchange Act is recorded, processed, summarized and reported within th e time periods specified in the SEC’s rules and forms and that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control over Financial Reporting - The report of management of the Company regarding internal control over financial reporting is set forth in Part II, Item 8 of this Annual Report on Form 10-K under the caption “Management’s Report on Internal Control over Financial Reporting” and incorporated herein by reference.

17

(c) Attestation Report of Independent Registered Public Accounting Firm - The attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting is set forth in Part II, Item 8 of this Annual Report on Form 10-K under the caption “Report of Independent Registered Public Accounting Firm” and incorporated herein by reference.

(d) Changes in Internal Control over Financial Reporting – There were no changes made in the Company’s internal control over financial reporting during the fourth quarter of 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding Section 16(a) compliance, the Audit Committee, the Company’s Code of Business Ethics and Ethics for Directors, shareholder nominating procedures and background of the directors appearing under the captions “Section 16(a) Beneficial Ownership Reporting Compliance”, “Corporate Governance and Board of Directors Matters”, and “Security Ownership of Management” in the Company’s Proxy Statement for the 2011 Annual Meeting of Stockholders is incorporated herein by reference.

The Registrant has adopted a code of ethics that applies to all employees, including its principal executive officer, principal financial officer, principal accounting officer and its Board of Directors. A copy of the code of ethics is available on the Registrant’s Internet website at www.c-a-m.com and is available in print to any shareholder free of charge upon request. The Registrant intends to satisfy the disclosure requirements under Item 10 of Form 8-K regarding an amendment to, or a waiver from, a provision of its code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions, by posting such information on its website at the address set forth above.

The information under the heading “Executive Officers of the Registrant” in Part I, Item 1 of this Form 10-K is incorporated by reference in this section.

ITEM 11. EXECUTIVE COMPENSATION

The information concerning "Executive Compensation" required by Item 11 shall be included in the Proxy Statement to be filed relating to our 2011 Annual Meeting of Stockholders and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information concerning "Security Ownership of Certain Beneficial Owners" and "Security Ownership of Management" required by Item 12 shall be included in our Proxy Statement to be filed relating to the 2011 Annual Meeting of Stockholders and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information concerning the Company's "Policy on Related Person Transactions" and "Director Independence" required by Item 13 shall be included in our Proxy Statement to be filed relating to the 2011 Annual Meeting of Stockholders and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information concerning "Principal Accounting Firm Fees" required by Item 14 shall be included in the Proxy Statement to be filed relating to our 2011 Annual Meeting of Stockholders and is incorporated herein by reference.

18

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)  The following documents are filed as part of this Report:

(1)  Financial Statements:

All financial statements of the Registrant as set forth under Part II, Item 8 of this Annual Report on Form 10-K.

(2)  Financial Statement Schedules:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

Cameron International Corporation

We have audited the consolidated financial statements of Cameron International Corporation (the Company) as of December 31, 2010 and 2009, and for each of the three years in the period ended December 31, 2010, and have issued our report thereon dated February 28, 2011 (incorporated by reference in this Form 10-K).  Our audits also included the financial statement schedule included in Item 15(a)(2) of this Form 10-K.  This schedule is the responsibility of the Company’s management.  Our responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Ernst & Young LLP

Houston, Texas

February 28, 2011

19

Schedule II - Valuation and Qualifying Accounts

(dollars in millions)

			Additions
	Balance at beginning of period		Charged to costs and expenses			Charged to other accounts			Deductions (a)			Translation			Balance at end of period
YEAR ENDED DECEMBER 31, 2010:
Allowance for doubtful accounts	$	15.8	$	(0.4	)	$	0.8		$	(1.5	)	$	(0.7	)	$	14.0
Allowance for obsolete and excess inventory	$	58.9	$	15.0		$	3.9		$	(9.2	)	$	(0.6	)	$	68.0
YEAR ENDED DECEMBER 31, 2009:
Allowance for doubtful accounts	$	9.6	$	4.6		$	4.8		$	(3.8	)	$	0.6		$	15.8
Allowance for obsolete and excess inventory	$	49.6	$	15.2		$	(0.3	)	$	(7.3	)	$	1.7		$	58.9
YEAR ENDED DECEMBER 31, 2008:
Allowance for doubtful accounts	$	8.2	$	5.2		$	(0.8	)	$	(2.5	)	$	(0.5	)	$	9.6
Allowance for obsolete and excess inventory	$	50.0	$	7.9		$	3.8		$	(7.5	)	$	(4.6	)	$	49.6

___________

(a)   Write-offs of uncollectible receivables, deductions for collections of previously reserved receivables and write-offs of obsolete inventory.

20

	(3)  Exhibits:
Exhibit Number	Exhibit Index Description
3.1	Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated June 30, 1995, filed as Exhibit 4.2 to the Registration Statement on Form S-8 filed on July 25, 2005 (Commission File No. 33-94948), and incorporated herein by reference.
3.2	Certificate of Amendment to the Restated Certificate of Incorporation of Cameron International Corporation, filed as Exhibit 4.3 to the Registration Statement on Form S-8 filed on May 19, 1998 (Commission File No. 333-57995), and incorporated herein by reference.
3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated May 5, 2006 (incorporated by reference, filed as Exhibit 3.1 to the Form 8-K filed on May 9, 2006).
3.4	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated December 11, 2007, filed as Exhibit 3.1 to the Current Report on Form 8-K filed December 10, 2007, and incorporated herein by reference.
3.5	Third Amended and Restated Bylaws of Cameron International Corporation, filed as Exhibit 3.5 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
3.6	First Amendment to Third Amended and Restated Bylaws of the Company, filed as Exhibit 3.1 to the Current Report on Form 8-K filed February 19, 2010, and incorporated herein by reference.
3.7*	Second Amendment to Third Amended and Restated Bylaws of the Company.
3.8	Certificate of Elimination with Respect to Series A Junior Participating Preferred Stock, filed as Exhibit 3.1 to the Current Report on Form 8-K filed December 18, 2007, and incorporated herein by reference.
3.9	Certificate of Elimination with Respect to Series B Junior Participating Preferred Stock of Cameron International Corporation pursuant to Section 151(g), filed as Exhibit 3.8 on Form 10-K for 2009 of  the Company, and incorporated herein by reference.
4.1	Registration Statement on Form S-3 filed with the Securities and Exchange Commission on May 4, 1998 (Registration Statement No. 333-51705), and incorporated herein by reference.
4.2	Form of Indenture for senior debt securities filed as Exhibit 4.1 to the Registration Statement on Form S-3 filed with the Securities and Exchange Commission on June 23, 2008 (File No. 333-151838) and incorporated herein by reference.
10.1	The Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.6 to the Registration Statement on Form S-8 of the Company (Commission File No. 333-46638), and incorporated herein by reference.
10.2	First Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.7 to the Registration Statement on Form S-8 filed with the SEC on May 29, 2001 (File No. 333-61820), and incorporated herein by reference.
10.3	Second Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.8 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082), and incorporated herein by reference.
10.4	Third Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.9 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082), and incorporated herein by reference.

21

Exhibit Number	Exhibit Index Description
10.5	Fourth Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 10.6 to the Annual Report on Form 10-K for 2002 of the Company, and incorporated herein by reference.
10.6	Cameron International Corporation Retirement Savings Plan, as Amended and Restated, effective January 1, 2008, filed as Exhibit 10.6 on Form 10-K for 2009 of  the Company, and incorporated herein by reference.
10.7	First through Third Amendments to the Cameron International Corporation Retirement Savings Plan, as Amended and Restated effective January 1, 2008, filed as Exhibit 10.7 on Form 10-K for 2009 of  the Company, and incorporated herein by reference.
10.8	Merger of the Petreco International, Inc. 401(k) Profit Sharing Plan with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.10 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.9	Merger of the Company's Savings-Investment Plan for Hourly Employees with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.11 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.10	Amendment to the NuFlo Technologies, Inc. 401(K) Plan and Merger of the NuFlo Technologies, Inc. 401(K) Plan with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.11 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference.
10.11	The Company's 2005 Equity Incentive Plan, Amended and Restated as of February 18, 2009, filed as an Appendix to the Company's 2009 Proxy Statement, and incorporated herein by reference.
10.12	Seventh Amendment to the Company’s 2005 Equity Incentive Plan, Amended and Restated, filed as Exhibit 10.16 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.13	Eighth Amendment to the Company’s 2005 Equity Incentive Plan, Amended and Restated, filed as Exhibit 10.17 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.14	Form of Change of Control Agreement, effective December 18, 2008, by and between the Company and R. Scott Amann, John D. Carne, John Bartos, Christopher A. Krummel, William C. Lemmer, Joseph H. Mongrain, Jack B. Moore, Charles M. Sledge, Stuart Taylor, Stephen Tomlinson, and James E. Wright filed as Exhibit 10.17 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.15	Form of Executive Severance Program of the Company, effective July 1, 2000, and reissued January 12, 2007 and November 5, 2009, filed as Exhibit 10.19 on Form 10-K for 2009 of  the Company, and incorporated herein by reference.
10.16	Credit Agreement, dated as of April 14, 2008, among the Company and certain of its subsidiaries and the banks named therein and JPMorgan Chase Bank, N.A., as agent, filed as Exhibit 10.1 to the Current Report on Form 8-K dated April 14, 2008, of the Company, and incorporated herein by reference.
10.17	Individual Account Retirement Plan for Bargaining Unit Employees at the Company's Buffalo, New York Plant, as Amended and Restated effective January 1, 2008, filed as Exhibit 10.21 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.18	First through Third Amendments to the Individual Account Retirement Plan for Bargaining Unit Employees at the Company's Buffalo, New York Plant, as Amended and Restated effective January 1, 2008, filed as Exhibit 10.22 on Form 10-K for 2009 of the Company, and incorporated herein by reference.

22

Exhibit Number	Exhibit Index Description
10.19	Form of Indemnification Agreement, effective February 20, 2003, by and between the Company and C. Baker Cunningham, Sheldon R. Erikson, Michael E. Patrick, David Ross and Bruce W. Wilkinson, filed as Exhibit 10.32 to the Annual Report on Form 10-K/A for 2002 of the Company, and incorporated herein by reference.
10.20	Form of Indemnification Agreement, effective February 20, 2003, by and between the Company and Mr. Jeff Altamari, Mr. John Carne, Mr. Hal Goldie, Mr. William C. Lemmer, Mr. Jack B. Moore, Mr. Charles M. Sledge, and Mr. Rick Steans, filed as Exhibit 10.36 to the Annual Report on Form 10-K for 2003 of the Company, and incorporated herein by reference.
10.21	Form of Stock Option Agreement for grants dated November 22, 2004, under the Company’s Long-Term Incentive Plan, filed as an exhibit to a Form 8-K on January 18, 2005, and incorporated herein by reference.
10.22	Form of Indemnification Agreement, effective February 7, 2005, by and between the Company and Peter J. Fluor, filed as Exhibit 10.23 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.23	Form of Indemnification Agreement, effective July 1, 2008, by and between the Company and Douglas L. Foshee, filed as Exhibit 10.24 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.24	Form of Indemnification Agreement, effective June 12, 2009, by and between the Company and Jon Erik Reinhardsen, filed as Exhibit 10.28 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.25	Form of Stock Option Agreement for grants dated November 10, 2005, filed as Exhibit 10.47 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference.
10.26	Form of Stock Option Agreement for stock options granted on after April 1, 2009, filed as Exhibit 10.30 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.27	Form of Restricted Stock Unit Agreement for Restricted Stock Units granted on or after November 13, 2008 filed as Exhibit 10.31 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.28	Form of Restricted Stock Unit Agreement for Restricted Stock Units granted on or after April 1, 2009, filed as Exhibit 10.32 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.29	Form of Restricted Stock Unit Agreement for Restricted Stock Units granted on or after November 19, 2009, filed as Exhibit 10.33 on Form 10-K for 2009 of the Company, and incorporated herein by reference.

10.30	The Company's Deferred Compensation Plan for Non-Employee Directors, filed as Exhibit 10.41 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference.
10.31	The Company's Long-Term Incentive Plan, as Amended and Restated as of November 2002, incorporated by reference to the Company's Proxy Statement for the Annual Meeting of Stockholders held on May 8, 2003.
10.32	Sixth Amendment to the Company's Long-Term Incentive Plan, as Amended and Restated as of November 2002, incorporated by reference to the Company's Proxy Statement for the Annual meeting of Stockholders held on May 8, 2003.
10.33	Seventh Amendment to the Company's Long-Term Incentive Plan, as Amended and Restated,  filed as Exhibit 10.44 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.34	The Company's Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors (Registration Statement on Form S-8 No. 333-79787), incorporated herein by reference.

23

Exhibit Number	Exhibit Index Description
10.35	First Amendment to the Company's Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors, filed as Exhibit 10.43 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.36	The Company’s Non Qualified Deferred Compensation Plan, effective January 1, 2008, (Exhibit 4.2 to Registration Statement on Form S-8 No. 333-156712), incorporated herein by reference
10.37	Amended and Restated Management Incentive Compensation Plan of the Company, incorporated herein by reference to the Company’s 2005 Proxy Statement for the Annual Meeting of Stockholders held on May 5, 2005.
10.38	Change in Control Policy of the Company, approved February 19, 1996, filed as Exhibit 10.18 to the Annual Report on Form 10-K for 1996 of the Company, and incorporated herein by reference.
10.39*	Form of Grant Agreement for Stock Options granted on or after October 20, 2010.
10.40*	Form of Grant Agreement for Restricted Stock Units granted on or after October 20, 2010.
10.41*	Form of Grant Agreement for Restricted Stock Units for Executive Officers granted on or after October 20, 2010.
10.42*	Credit Agreement, dated October 15, 2010, among the Company and certain of its subsidiaries and the banks named therein and Citibank, N.A.
10.43*	Fourth Amendment to the Cameron International Corporation Retirement Savings Plan, as Amended and Restated effective January 1, 2008.
10.44*	Fourth Amendment to the Individual Account Retirement Plan for Bargaining Unit Employees at the Company's Buffalo, New York Plant, as Amended and Restated effective January 1, 2008.
10.45	NATCO Group, Inc. 1998 Employee Stock Option Plan, filed as Exhibit 10.3 to NATCO’s Registration Statement on Form S-1 (No. 333-48851), and incorporated herein by reference.
10.46	NATCO Group, Inc. 2001 Stock Incentive Plan, filed as Appendix B to NATCO’s Proxy Statement dated May 24, 2001, and incorporated herein by reference.
10.47	NATCO Group, Inc. 2004 Stock Incentive Plan, filed as Appendix B to NATCO’s Proxy Statement dated May 27, 2004, and incorporated herein by reference.
10.48	NATCO Group, Inc. 2006 Long-Term Incentive Compensation Plan, as Amended and Restated, filed as Exhibit 10.1 to NATCO’s Quarterly Report on Form 10-Q for quarter ended June 30, 2006 , and incorporated herein by reference.
10.49*	Merger of the NATCO Group Profit Sharing And Savings Plan with and into the Cameron International Corporation Retirement Savings Plan, effective March 17, 2010.
10.50*	Form of Indemnification Agreement, effective August 13, 2007, by and between the Company and Joseph H. Mongrain and James E. Wright.
10.51*	Form of Indemnification Agreement, effective January 1, 2011.
10.52*	Form of Change in Control Agreement, effective June 16, 2009, by and between the Company and Mr. H. Keith Jennings.

24

Exhibit Number	Exhibit Index Description
13.1*	Portions of the 2010 Annual Report to Stockholders are included as an exhibit to this report.
14.1	Code of Business Conduct and Ethics for Directors filed as Exhibit 14.1 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
14.2	Amendment to the Code of Business Conduct and Ethics for Directors, filed as Exhibit ­­14.1 to the Current Report on Form 8-K filed July 14, 2009, and incorporated herein by reference.
14.3	Code of Ethics for Management Personnel, filed as Exhibit 14.2 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
14.4	Cameron Code of Conduct, filed as Exhibit 14.1 to the Current Report on Form 8-K filed August 19, 2009, and incorporated herein by reference.
21.1*	Subsidiaries of registrant.
23.1*	Consent of Independent Registered Public Accounting Firm.
31.1*	Certification.
31.2*	Certification.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

25

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CAMERON INTERNATIONAL CORPORATION
Registrant
By:	/s/ Christopher A. Krummel
	(Christopher A. Krummel)
	Vice President Controller and Chief Accounting Officer
	(principal accounting officer)
Date: February 28, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on this 28th day of February, 2011, by the following persons on behalf of the Registrant and in the capacities indicated.

Signature	Title
/s/ C. Baker Cunningham
(C. Baker Cunningham)	Director
/s/ Sheldon R. Erikson
(Sheldon R. Erikson)	Chairman of the Board
/s/ Peter J. Fluor
(Peter J. Fluor)	Director
/s/ Douglas L. Foshee
(Douglas L. Foshee)	Director
/s/ Jack B. Moore
(Jack B. Moore)	President and Chief Executive Officer
	(principal executive officer)
/s/ Michael E. Patrick
(Michael E. Patrick)	Director
/s/ Jon Erik Reinhardsen
(Jon Erik Reinhardsen)	Director
/s/ David Ross
(David Ross)	Director
/s/ Bruce W. Wilkinson
(Bruce W. Wilkinson)	Director
/s/ Charles M. Sledge	Senior Vice President and Chief Financial Officer
(Charles M. Sledge	(principal financial officer)

26

EXHIBIT INDEX

Exhibit Number	Exhibit Index Description	Sequential Page Number
3.1	Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated June 30, 1995, filed as Exhibit 4.2 to the Registration Statement on Form S-8 filed on July 25, 2005 (Commission File No. 33-94948), and incorporated herein by reference.
3.2	Certificate of Amendment to the Restated Certificate of Incorporation of Cameron International Corporation, filed as Exhibit 4.3 to the Registration Statement on Form S-8 filed on May 19, 1998 (Commission File No. 333-57995), and incorporated herein by reference.
3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated May 5, 2006 (incorporated by reference, filed as Exhibit 3.1 to the Form 8-K filed on May 9, 2006).
3.4	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated December 11, 2007, filed as Exhibit 3.1 to the Current Report on Form 8-K filed December 10, 2007, and incorporated herein by reference.
3.5	Third Amended and Restated Bylaws of Cameron International Corporation, filed as Exhibit 3.5 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
3.6	First Amendment to Third Amended and Restated Bylaws of the Company, filed as Exhibit 3.1 to the Current Report on Form 8-K filed February 19, 2010, and incorporated herein by reference.
3.7*	Second Amendment to Third Amended and Restated Bylaws of the Company.
3.8	Certificate of Elimination with Respect to Series A Junior Participating Preferred Stock, filed as Exhibit 3.1 to the Current Report on Form 8-K filed December 18, 2007, and incorporated herein by reference.
3.9	Certificate of Elimination with Respect to Series B Junior Participating Preferred Stock of Cameron International Corporation pursuant to Section 151(g), filed as Exhibit 3.8 on Form 10-K for 2009 of  the Company, and incorporated herein by reference.
4.1	Registration Statement on Form S-3 filed with the Securities and Exchange Commission on May 4, 1998 (Registration Statement No. 333-51705), and incorporated herein by reference.
4.2	Form of Indenture for senior debt securities filed as Exhibit 4.1 to the Registration Statement on Form S-3 filed with the Securities and Exchange Commission on June 23, 2008 (File No. 333-151838) and incorporated herein by reference.
10.1	The Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.6 to the Registration Statement on Form S-8 of the Company (Commission File No. 333-46638), and incorporated herein by reference.
10.2	First Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.7 to the Registration Statement on Form S-8 filed with the SEC on May 29, 2001 (File No. 333-61820), and incorporated herein by reference.
10.3	Second Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.8 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082), and incorporated herein by reference.
10.4	Third Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.9 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082), and incorporated herein by reference.

27

Exhibit Number	Exhibit Index Description	Sequential Page Number
10.5	Fourth Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 10.6 to the Annual Report on Form 10-K for 2002 of the Company, and incorporated herein by reference.
10.6	Cameron International Corporation Retirement Savings Plan, as Amended and Restated, effective January 1, 2008, filed as Exhibit 10.6 on Form 10-K for 2009 of  the Company, and incorporated herein by reference.
10.7	First through Third Amendments to the Cameron International Corporation Retirement Savings Plan, as Amended and Restated effective January 1, 2008, filed as Exhibit 10.7 on Form 10-K for 2009 of  the Company, and incorporated herein by reference.
10.8	Merger of the Petreco International, Inc. 401(k) Profit Sharing Plan with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.10 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.9	Merger of the Company's Savings-Investment Plan for Hourly Employees with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.11 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.10	Amendment to the NuFlo Technologies, Inc. 401(K) Plan and Merger of the NuFlo Technologies, Inc. 401(K) Plan with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.11 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference.
10.11	The Company's 2005 Equity Incentive Plan, Amended and Restated as of February 18, 2009, filed as an Appendix to the Company's 2009 Proxy Statement, and incorporated herein by reference.
10.12	Seventh Amendment to the Company’s 2005 Equity Incentive Plan, Amended and Restated, filed as Exhibit 10.16 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.13	Eighth Amendment to the Company’s 2005 Equity Incentive Plan, Amended and Restated, filed as Exhibit 10.17 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.14	Form of Change of Control Agreement, effective December 18, 2008, by and between the Company and R. Scott Amann, John D. Carne, John Bartos, Christopher A. Krummel, William C. Lemmer, Joseph H. Mongrain, Jack B. Moore, Charles M. Sledge, Stuart Taylor, Stephen Tomlinson, and James E. Wright filed as Exhibit 10.17 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.15	Form of Executive Severance Program of the Company, effective July 1, 2000, and reissued January 12, 2007 and November 5, 2009, filed as Exhibit 10.19 on Form 10-K for 2009 of  the Company, and incorporated herein by reference.
10.16	Credit Agreement, dated as of April 14, 2008, among the Company and certain of its subsidiaries and the banks named therein and JPMorgan Chase Bank, N.A., as agent, filed as Exhibit 10.1 to the Current Report on Form 8-K dated April 14, 2008, of the Company, and incorporated herein by reference.
10.17	Individual Account Retirement Plan for Bargaining Unit Employees at the Company's Buffalo, New York Plant, as Amended and Restated effective January 1, 2008, filed as Exhibit 10.21 on Form 10-K for 2009 of the Company, and incorporated herein by reference.

28

Exhibit Number	Exhibit Index Description	Sequential Page Number
10.18	First through Third Amendments to the Individual Account Retirement Plan for Bargaining Unit Employees at the Company's Buffalo, New York Plant, as Amended and Restated effective January 1, 2008, filed as Exhibit 10.22 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.19	Form of Indemnification Agreement, effective February 20, 2003, by and between the Company and C. Baker Cunningham, Sheldon R. Erikson, Michael E. Patrick, David Ross and Bruce W. Wilkinson, filed as Exhibit 10.32 to the Annual Report on Form 10-K/A for 2002 of the Company, and incorporated herein by reference.
10.20	Form of Indemnification Agreement, effective February 20, 2003, by and between the Company and Mr. Jeff Altamari, Mr. John Carne, Mr. Hal Goldie, Mr. William C. Lemmer, Mr. Jack B. Moore, Mr. Charles M. Sledge, and Mr. Rick Steans, filed as Exhibit 10.36 to the Annual Report on Form 10-K for 2003 of the Company, and incorporated herein by reference.
10.21	Form of Stock Option Agreement for grants dated November 22, 2004, under the Company’s Long-Term Incentive Plan, filed as an exhibit to a Form 8-K on January 18, 2005, and incorporated herein by reference.
10.22	Form of Indemnification Agreement, effective February 7, 2005, by and between the Company and Peter J. Fluor, filed as Exhibit 10.23 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.23	Form of Indemnification Agreement, effective July 1, 2008, by and between the Company and Douglas L. Foshee, filed as Exhibit 10.24 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.24	Form of Indemnification Agreement, effective June 12, 2009, by and between the Company and Jon Erik Reinhardsen, filed as Exhibit 10.28 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.25	Form of Stock Option Agreement for grants dated November 10, 2005, filed as Exhibit 10.47 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference.
10.26	Form of Stock Option Agreement for stock options granted on after April 1, 2009, filed as Exhibit 10.30 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.27	Form of Restricted Stock Unit Agreement for Restricted Stock Units granted on or after November 13, 2008 filed as Exhibit 10.31 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.28	Form of Restricted Stock Unit Agreement for Restricted Stock Units granted on or after April 1, 2009, filed as Exhibit 10.32 on Form 10-K for 2009 of the Company, and incorporated herein by reference.
10.29	Form of Restricted Stock Unit Agreement for Restricted Stock Units granted on or after November 19, 2009, filed as Exhibit 10.33 on Form 10-K for 2009 of the Company, and incorporated herein by reference.

10.30 The Company's Deferred Compensation Plan for Non-Employee Directors, filed as Exhibit 10.41 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference.

29

Exhibit Number	Exhibit Index Description	Sequential Page Number
10.31	The Company's Long-Term Incentive Plan, as Amended and Restated as of November 2002, incorporated by reference to the Company's Proxy Statement for the Annual Meeting of Stockholders held on May 8, 2003.
10.32	Sixth Amendment to the Company's Long-Term Incentive Plan, as Amended and Restated as of November 2002, incorporated by reference to the Company's Proxy Statement for the Annual meeting of Stockholders held on May 8, 2003.
10.33	Seventh Amendment to the Company's Long-Term Incentive Plan, as Amended and Restated, filed as Exhibit 10.44 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.34	The Company's Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors (Registration Statement on Form S-8 No. 333-79787), incorporated herein by reference.
10.35	First Amendment to the Company's Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors, filed as Exhibit 10.43 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.36	The Company’s Non Qualified Deferred Compensation Plan, effective January 1, 2008, (Exhibit 4.2 to Registration Statement on Form S-8 No. 333-156712), incorporated herein by reference
10.37	Amended and Restated Management Incentive Compensation Plan of the Company, incorporated herein by reference to the Company’s 2005 Proxy Statement for the Annual Meeting of Stockholders held on May 5, 2005.
10.38	Change in Control Policy of the Company, approved February 19, 1996, filed as Exhibit 10.18 to the Annual Report on Form 10-K for 1996 of the Company, and incorporated herein by reference.
10.39*	Form of Grant Agreement for Stock Options granted on or after October 20, 2010.
10.40*	Form of Grant Agreement for Restricted Stock Units granted on or after October 20, 2010.
10.41*	Form of Grant Agreement for Restricted Stock Units for Executive Officers granted on or after October 20, 2010.
10.42*	Credit Agreement, dated October 15, 2010, among the Company and certain of its subsidiaries and the banks named therein and Citibank, N.A.
10.43*	Fourth Amendment to the Cameron International Corporation Retirement Savings Plan, as Amended and Restated effective January 1, 2008.
10.44*	Fourth Amendment to the Individual Account Retirement Plan for Bargaining Unit Employees at the Company's Buffalo, New York Plant, as Amended and Restated effective January 1, 2008.
10.45	NATCO Group, Inc. 1998 Employee Stock Option Plan, filed as Exhibit 10.3 to NATCO’s Registration Statement on Form S-1 (No. 333-48851), and incorporated herein by reference.
10.46	NATCO Group, Inc. 2001 Stock Incentive Plan, filed as Appendix B to NATCO’s Proxy Statement dated May 24, 2001, and incorporated herein by reference.
10.47	NATCO Group, Inc. 2004 Stock Incentive Plan, filed as Appendix B to NATCO’s Proxy Statement dated May 27, 2004, and incorporated herein by reference.

30

Exhibit Number	Exhibit Index Description	Sequential Page Number
10.48	NATCO Group, Inc. 2006 Long-Term Incentive Compensation Plan, as Amended and Restated, filed as Exhibit 10.1 to NATCO’s Quarterly Report on Form 10-Q for quarter ended June 30, 2006 , and incorporated herein by reference.
10.49*	Merger of the NATCO Group Profit Sharing And Savings Plan with and into the Cameron International Corporation Retirement Savings Plan, effective March 17, 2010.
10.50*	Form of Indemnification Agreement, effective August 13, 2007, by and between the Company and Joseph H. Mongrain and James E. Wright.
10.51*	Form of Indemnification Agreement, effective January 1, 2011.
10.52*	Form of Change in Control Agreement, effective June 16, 2009, by and between the Company and Mr. H. Keith Jennings.
13.1*	Portions of the 2010 Annual Report to Stockholders are included as an exhibit to this report.
14.1	Code of Business Conduct and Ethics for Directors filed as Exhibit 14.1 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
14.2	Amendment to the Code of Business Conduct and Ethics for Directors, filed as Exhibit ­­14.1 to the Current Report on Form 8-K filed July 14, 2009, and incorporated herein by reference.
14.3	Code of Ethics for Management Personnel, filed as Exhibit 14.2 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
14.4	Cameron Code of Conduct, filed as Exhibit 14.1 to the Current Report on Form 8-K filed August 19, 2009, and incorporated herein by reference.
21.1*	Subsidiaries of registrant.
23.1*	Consent of Independent Registered Public Accounting Firm.
31.1*	Certification.
31.2*	Certification.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRLTaxonomy Extension Schema Document
101.CAL*	XBRLTaxonomy Extension Calculation Linkbase Document
101.DEF*	XBRLTaxonomy Extension Definition Linkbase Document
101.LAB*	XBRLTaxonomy Extension Label Linkbase Document
101.PRE*	XBRLTaxonomy Extension Presentation Linkbase Document

31

EX-3.7

Exhibit 3.7

Second Amendment to the

Third Amended and Restated

Bylaws

of

CAMERON INTERNATIONAL CORPORATION

 (hereinafter called the "Corporation")

Bylaw Amendment

 “Article III, Directors, Section 1. Number and Election of Directors” of the Company’s Bylaws is amended in its entirety to read as follows:

ARTICLE III

DIRECTORS

Section 1.  Number and Election of Directors. The Board of Directors shall consist of not less than five nor more than fifteen members, the exact number of direc­tors to be determined from time to time by resolution adopted by a majority of the entire Board of Directors. The directors shall be divided into three classes, desig­nated Class I, Class II and Class III.  Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors.  The term of the initial Class I directors shall terminate on the date of the 1996 annual meeting of stockholders; the term of the initial Class II directors shall terminate on t he date of the 1997 annual meeting of stockholders; and the term of the initial Class III direc­tors shall terminate on the date of the 1998 annual meeting of the stockholders.  At each annual meeting of stockhold­ers beginning in 1996, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term.  If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any addi­tional directors of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director.  A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be electe d and shall qualify, subject, however, to prior death, resignation, retirement, disqualification, or removal from office by the Board of Directors for incapacity, failure to perform his or her duties, acts that could be a detriment to the Company, or for any other justifiable cause, in each case as so determined by the Board of Directors.  Any vacancy on the Board of Directors, however resulting, may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director.  Any director elected to fill a vacancy shall hold office for a term that shall coincide with the term of the class to which such director shall have been elected.  Any director may resign at any time upon notice to the Corporation.  Directors need not be stockholders.

EX-10.39

Exhibit 10.39

CAMERON INTERNATIONAL CORPORATION

STOCK OPTION AGREEMENT

Effective Date:  _______________, 2010

1.           Purpose.  As an additional incentive and inducement to you to remain in the employment of the Company or one of its direct or indirect subsidiaries and to acquire an ownership position in the Company, thereby aligning your interests with those of the Company and its stockholders, the Company hereby grants to you, the “Optionee”,  the option to purchase common stock of the Company from the Company at the times and upon the terms and conditions set forth on th e attached Notice of Grant of Stock Options and Option Agreement (the “Agreement”).  If Optionee completes, signs, and returns one copy of this Agreement to the Company in Houston, Texas, U.S.A., this Agreement will become effective as of _____________________, 2010.

2.           Terms Subject to the Plan.  The Agreement is expressly subject to the terms and provisions of the Company's 2005 Equity Incentive Plan (the "Plan"), a copy of which is attached hereto, and in the event there is a conflict between the terms of the Plan and the Agreement, the terms of the Plan shall control.

3.           Purchase Price.  The purchase price of the Shares of the Company’s common stock subject to the Agreement shall be $_________ per Share.

4.           Vesting.  The Option granted pursuant to the Agreement (“Option”) may be exercised, in whole or in part, but only as to the number of Shares as to which the right to exercise has vested at the time of exercise, during the period beginning ___________, 201____ (one year from the date on which it was granted), and ending _________, 202___ (ten years from the date on which Option was granted.)

5.           Exercise of Option.  The Option granted herein may be exercised as to vested Shares, in whole or in part, from time to time by the Optionee by giving written notice to the Secretary of the Company on or prior to the date on which the Option terminates.  Such notice shall identify the Option and specify the number of whole Shares that the Optionee desires to purchase.  Any notice of exercise shall be in a form substantially similar to the form attached hereto.& #160; Payment of the purchase price of the Shares that the Optionee desires to purchase shall be tendered in full at the time of giving notice by (i) cash, check, or bank draft payable and acceptable to the Company (or the equivalent thereof acceptable to the Company), (ii) Shares theretofore owned and held by the Optionee for more than six months, (iii) a combination of cash and Shares theretofore owned and held by the Optionee for more than six months,  or (iv)  the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the exercise price.  The notice shall not be considered to be properly given unless accompanied by all documentation deemed appropriate by the Company to reflect exercise of the Option and compliance with all applicable laws, rules and regulations.  The notice shall state a requested de livery date for the Share certificate or certificates at least fifteen days after the delivery of such notice; provided, however, that if the Optionee is exercising any Option granted pursuant to this Agreement in connection with a broker's transaction described in 5(iv) above, such notice shall state a requested date of delivery to the broker of such Share certificate or certificates which shall be no later than five business days after delivery of such notice or such greater or lesser time as may be required or permitted by law.

6.           Shares Subject to Listing and Registration.   The Option granted herein shall be subject to the listing, registration or qualification of the Shares subject to such Option upon any securities exchange or under any applicable state or federal law.  This Option may not be exercised in whole or in part unless such listing, registration or qualification shall have been effected or obtained free of any conditions not reasonably acceptable to the Board of Directors.

1

7.           Changes in the Company's Capital Structure.The number of Shares subject to the Option and the price per Share payable upon exercise of the Option shall be subject to the provisions of the Plan relating to adjustments to corporate capitalization, provided; however, that in the event of any reorganization, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), st ock split, reverse stock split or other similar change in corporate structure affecting the Shares subject to the Option, the Option shall be appropriately adjusted to reflect such change, but only so far as is necessary to maintain the proportionate interest of the Participant and preserve, without exceeding, the value of such Option.

8.           Covenant Not To Compete, Solicit or Disclose Confidential Information.

(a)The Optionee acknowledges that the Optionee is in possession of and has access to confidential information, including material relating to the business, products or services of the Company and that he or she will continue to have such possession and access during employment by the Company.  The Optionee also acknowledges that the Company’s business, products and services are highly specialized and that it is essential that they be protected, and, accordingly, the Optionee agrees that as partial consideration for the Option granted herein that should the Optionee engage in any “Detrimental Activity,” as defined below, at any time during his or her em ployment or during a period of one year following his or her termination the Company shall be entitled to: (i) cancel any un-exercised portion of the Option; (ii) recover from the Optionee the value of any portion of the Option that has been exercised; (iii) seek injunctive relief against the Optionee; (iv) recover all damages, court costs, and attorneys’ fees incurred by the Company in enforcing the provisions of this Option grant, and (v) set-off any such sums to which the Company is entitled hereunder against any sum which may be owed the Optionee by the Company.

(b)  “Detrimental Activity” for the purposes hereof, other than with respect to involuntary termination without cause, termination in connection with or as a result of a “Change of Control” (as defined in Section 10(b) hereof), or termination following a reduction in job responsibilities, shall include: (i) rendering of services for any person or organization, or engaging directly or indirectly in any business, which is or becomes competitive with the Company; (ii) disclosing to anyone outside the Company, or using in other than the Company’s business, without prior written authorization from the Company, any confidential information including material relating to the business, products or services of the Company acquired by the Optionee during employment with the Company; (iii) soliciting, interfering, inducing, or attempting to cause any employee of the Company to leave his or her employment, whether done on Optionee’s own account or on account of any person, organization or business which is or becomes competitive with the Company, or (iv) directly or indirectly soliciting the trade or business of any customer of the Company.  “Detrimental Activity” for the purposes hereof with respect to involuntary termination without cause, termination in connection with or as a result of a “Change of Control”, or termination following a reduction in job responsibilities, shall include only part (ii) of the preceding sentence.

9.           Termination of Employment.

(a)  If the Optionee’s employment terminates, for reasons other than cause (as defined below), at age 60 or older and the Optionee has at least ten years of service with the Company, any unvested shares shall continue to vest according to the terms of the Option except that if such termination occurs within one year from grant date, the number of shares that will continue to vest shall be reduced to be proportionate to that portion of the year between grant date and termination date; andthe Optionee shall have the right to exercise the Option at any time within the lesser of: (i) the term of the option, or (ii) a three (3) year period commencing on the day next fo llowing such termination, or one (1) year from the last date of vesting, whichever is greater; and

(b)  If the Optionee is an Executive Officer, the Optionee’s employment terminates, for reason other than cause (as defined below), at age 65 or older and the Optionee has at least ten years of service with the Company, any unvested shares shall continue to vest according to the terms of the Option and the Optionee shall have the right to exercise the Option according to the terms of the Option; and

2

(c)  If the Optionee’s employment terminates by reason of death or “long-term disability”, as defined below, of the Optionee, the Option shall vest in full, and the Optionee or his/her personal representatives, heirs, legatees or distributees shall have the right to exercise the Option granted hereunder at any time within the lesser of:  (1) the term of the Option or, (ii) a three (3) year period commencing on the date next following such termination, but in either case, never less than 12 months from the date of such termination.  For purposes of this Stock Option Agreement, “long-term disability”shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months; and

(d)  If the Optionee’s employment terminates by reason of a workforce reduction, any unvested Shares shall continue to vest according to the terms of the option except that if such termination occurs within one year from grant date, the number of shares that will continue to vest shall be reduced to be proportionate to that portion of the year between the grant date and termination date; and the Optionee shall have the right to exercise the Option granted hereunder at any time within the lesser of: (i) the term of the Option, or (ii) a three(3) year period commencing on the day next following such termination, or one (1) year from the last date of vesting, whichever is greater; and

(e)  If the Optionee’s employment terminates voluntarily other than as provided for in Sections (a), (b), (c) or (d) above, or as a result of involuntary termination other than for cause or as provided for in Sections (c) and (d) above, no additional Shares shall vest for the benefit of the Optionee after the termination date, and the Option shall be exercisable by the Optionee, with respect to those Shares which had already vested only, within a three (3) month period after such termination or the term of the Option, whichever is less, but only to the extent it was exercisable immediately prior to the date of termination; and

(f) If the Optionee’s employment is terminated for “cause”, the Option shall terminate and no longer be exercisable for either the vested or the unvested Shares.  For purposes of the Option, “cause” shall mean the Optionee has (1) engaged in gross negligence or willful misconduct in the performance of his  or her duties and responsibilities respecting his or her position with the Company, (2) willfully refused, without proper legal reason, to perform the duties and responsibilities respecting his or her position with the Company, (3) breached any material policy or code of conduct established by the Company and affecting the Optionee, (4) engaged in conduct that Optionee knows or should know is materially injurious to the Company, (5) been convicted of a felony or a misdemeanor involving moral turpitude, or (6) engaged in an act of dishonest or impropriety which materially impairs the Optionee’s effectiveness in his or her position with the Company.

10.           Change of Control.

(a)Notwithstanding Section 11.2 of the Plan, upon a “Change of Control” of the Company, the Option granted hereunder shall immediately and fully vest and become fully exercisable.

(b)“Change of Control” for the purposes of this Option, shall mean the earliest date on which:

(i)   any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s outstanding voting securities, other than through the purchase of voting securities directly from the Company through a private placement; or

(ii)   individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board shall from and after such election be deemed to be a member of the Incumbent Board; or

3

(iii)   a merger or consolidation involving the Company or its stock, or an acquisition by the Company, directly or indirectly or through one or more subsidiaries, of another entity or its stock or assets in exchange for the stock of the Company unless, immediately following such transaction less than 50% of the then outstanding voting securities of the surviving or resulting corporation or entity will be (or is) then beneficially owned, directly or indirectly, by all or substantially of the individuals and entities who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such transaction (treating, for purposes of determining whether the 50% continuity test is met, any ownership of the voting securities of the surviving or resulting corporation or entity that results from a stockholder’s ownership of the stock of, or their ownership interest in, the corporation or other entity with which the Company is merged or consolidated as not owned by persons who were beneficial owners of the Company’s outstanding voting securities immediately prior to the transaction).

(iv)   a tender offer or exchange offer is made and consummated by a Person other than the Company for the ownership of 20% or more of the voting securities of the Company then outstanding; or

(v)   all or substantially all of the assets of the Company are sold or transferred to a Person as to which (a) the Incumbent Board does not have authority (whether by law or contract) to directly control the use or further disposition of such assets and (b) the financial results of the Company and such Person are not consolidated for financial reporting purposes.

Anything else in this definition to the contrary notwithstanding, no Change of Control shall be deemed to have occurred by virtue of any transaction which results in the Participant, or a group of Persons which includes the Participant, acquiring more than 20% of either the combined voting power of the Company’s outstanding voting securities or the voting securities of any other corporation or entity which acquires all or substantially all of the assets of the Company, whether by way of merger, consolidation, sale of such assets or otherwise.

11.           Employment.  This Agreement is not an employment agreement.  Nothing contained herein shall be construed as creating any employment relationship.

12.           Notices.  All notices required or permitted under this Agreement shall be in writing and shall be delivered personally or by mailing the same by registered or certified mail postage prepaid, to the other party.  Notice given by mail as below set out shall be deemed delivered at the time and on the date the same is postmarked.

Notices to the Company should be addressed to:

Cameron International Corporation

1333 West Loop South, Suite 1700

Houston, Texas 77027

Attention:  Corporate Secretary

Telephone:  713-513-3322

13.           Definitions.  All undefined capitalized terms used herein shall have the meanings assigned to them in the Plan.

14.           Successors and Assigns.  Subject to the provisions of Paragraph 9 hereof, this Agreement shall inure to the benefit of and be binding upon the heirs, legatees, distributees, executors and administrators of the Optionee and the successors and assigns of the Company.  This Agreement shall be interpreted, construed, and enforced in accordance with the laws of the State of Texas.   In no event shall an Option granted hereunder be voluntarily or involuntarily sold, pledged, assigned or transferred by the Optionee other than:  (i) by will or the laws of descent and distribution; or (ii) pursuant to the qualified domestic relations order (as defined by the Internal Revenue Code); or (iii) with respect to Awards of nonqualified stock options, by transfer by an Optionee to a member of the Optionee’s Immediate Family, or to a partnership or limited liability company whose only partners or shareholders are the Optionee and members of his Immediate Family.  However, any Award transferred shall continue to be subject to all terms and conditions contained in the Award Agreement.

4

15.           Tax Withholding.

(a)With respect to the cash payment under the Plan, Optionee agrees that as a condition to the exercise of the Option granted hereunder, any cash payment shall be reduced by, or shall include such additional amount required to be paid or withheld with respect thereto under all applicable federal, state and local taxes and any other law or regulation that may be in effect as of the date of each such payment (“Tax Amounts”).

(b)With respect to issuance of Shares pursuant to the exercise of the Option granted hereunder, no issuance shall be made until appropriate arrangements have been made for the payment of any Tax Amounts that may be required to be paid or withheld with respect thereto, and such arrangements can be accomplished by:

(i)   directing the Company to retain Shares (up to the Optionee’s minimum required tax withholding rate or such other rate that will not trigger a negative accounting impact) otherwise deliverable in connection with the Award;

(ii)   payment of the Required Tax amounts to the Company; or

(iii)   if Optionee is a current employee or Director of the Company, the Optionee may satisfy the obligation for payment of the required Tax Amounts by tendering previously acquired Shares (either actually or by attestation, valued at their then “Fair Market Value” as defined by the Plan) that have been owned for a period of at least six months (or such other period necessary to avoid accounting charges against the Company’s earnings).

____________________________________________

5

EX-10.40

Exhibit 10.40

CAMERON INTERNATIONAL CORPORATION

Restricted Stock Unit Award Agreement

(________________, 2010)

This RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Award Agreement ”) is between the employee listed on the attached Notice of Grant of Award (“Participant”) and Cameron International Corporation (the “Company”), in connection with the Restricted Stock Units (“RSU”) granted to Participant by the Company.

1.           Effective Date and Issuance of Restricted Stock.  The Company hereby grants to the Participant, on the terms and conditions set forth herein, an award of Restricted Stock Units (the “Award”).  This Restricted Stock Unit Award is a commitment to issue one Share of Cameron common stock (“Share”) for each share of restricted stock units specified on the Notice of Grant of Award, at vesting.  If Participant completes, signs, and returns one copy of this agreement (the “Award Agreement”) to the Company in Houston, Texas, U. S.A., this Award Agreement will be effective as of __________, 2010.

2.           Terms Subject to the Plan.  This Award Agreement is expressly subject to the terms and provisions of the Company's 2005 Equity Incentive Plan (the "Plan"), as indicated in your Notice of Grant of Award.  A copy of the Plan is available on the Cameron Intranet under the Legal Section.  In the event there is a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan shall control.

3.           Vesting Requirement.  The Award shall become vested, subject to the provisions of Sections 4 and 5 below, in three installments as follows: one-third on __________, 201____, one-third on _________, 201___, and one-third on _________, 201___ (the “Vesting Dates”), provided the Participant continues to be employed by the Company throug h the Vesting Dates.  All Restricted Stock Units which become vested shall be payable in accordance with Section 6 hereof.

4.           Termination of Employment.  Notwithstanding the foregoing:

(a) If the Participant’s employment voluntarily terminates at age 60 or older for reasons other than cause (as defined below), and the Participant has at least ten years of continuous service with the Company, any unvested Restricted Stock Units (RSUs) shall continue to vest according to the terms of the Award; except that, unless the Participant is an Executive Officer age 65 or older and has at least ten years service with the Company at time of termination, if such termination occurs within one year from the effective date of the Award, the number of RSUs that will continue to vest shall be reduced to be proportionate to that portion of the year between such effective date and the date of termination and the balance of the Award shall be immediately cancelled.&# 160; “Continuous Service” with the Company shall mean ten (10) years of continuous and uninterrupted employment by the Participant from their most recent date of hire.

(b)  If the Participant’s employment terminates by reason of the death or long-term disability (as defined below) of the Participant, the Award shall be immediately vested and payable in full as of the date of death or the date of such termination; except that, unless the Participant is age 65 or older and has at least ten years service with the Company at time of termination, if such death or termination occurs within one year from the effective date of the Award, the number of RSUs that will vest in full shall be reduced to be proportionate to that portion of the year between the effective date of the Award and the date of death or long-term disability and the balance of the Award shall be immediately cancelled.

1

(c)  If the Participant’s employment terminates by reason of a workforce reduction, the Award shall continue to vest according to the terms of the Award; except that, unless the Participant is an Executive Officer age 65 or older and has at least ten years service with the Company at time of termination, if such termination occurs within one year from the effective date of the Award, the number of RSUs that will vest in full shall be reduced to be proportionate to that portion of the year between such effective date and the date of termination and the balance of the Award shall be immediately cancelled.

(d)  If the Participant’s employment terminates for reasons other than for those addressed in the previous three subsections, no RSUs shall vest for the benefit of the Participant after the termination date.

(e)  “Cause” for the purposes hereof, shall mean the Award Participant has (1) engaged in gross negligence or willful misconduct in the performance of his duties and responsibilities respecting his position with the Company; (2) willfully refused, without proper legal reason, to perform the duties and responsibilities respecting his position with the Company; (3) breached any material policy or code of conduct established by the Company and affecting the Award Participant; (4) engaged in conduct that award recipient knows or should know is materially injurious to the Company; (5) been convicted of a felony or a misdemeanor involving moral turpitude; or (6) engaged in an act of dishonest or impropriety which materially impairs the award recipient’s effectiveness in his position with the Company.

(f)  “Long-term Disability” for the purposes hereof, shall mean that the Award Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months.

(g)           In the event of any reorganization, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split or other similar change in corporate structure affecting the shares subject to the stock option grant, the grant shall be appropriately adjusted to reflect such change, but only in so far as is necessary to maintain the proportionate interest of the holder of the grant and preserve, without exceeding, the value of such a grant.

5.           Change in Control.

(a)Notwithstanding Section 11.2 of the Plan, upon a “Change in Control” of the Company, the Award granted hereunder shall immediately and fully vest.

(b)“Change in Control” for the purposes of this Award, shall mean the earliest date on which:

(i)   any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s outstanding voting securities, other than through the purchase of voting securities directly from the Company through a private placement; or

2

(ii)   individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board shall from and after such election be deemed to be a member of the Incumbent Board; or

(iii)   a merger or consolidation involving the Company or its stock, or an acquisition by the Company, directly or indirectly or through one or more subsidiaries, of another entity or its stock or assets in exchange for the stock of the Company unless, immediately following such transaction less than 50% of the then outstanding voting securities of the surviving or resulting corporation or entity will be (or is) then beneficially owned, directly or indirectly, by all or substantially of the individuals and entities who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such transaction (treating, for purposes of determining whether the 50% continuity test is met, any ownership of the voting securities of the surviving or resulting corporation or entity that results from a stockholder’s ownership of the stock of, or their ownership interest in, the corporation or other entity with which the Company is merged or consolidated as not owned by persons who were beneficial owners of the Company’s outstanding voting securities immediately prior to the transaction).

(iv)   a tender offer or exchange offer is made and consummated by a Person other than the Company for the ownership of 20% or more of the voting securities of the Company then outstanding; or

(v)   all or substantially all of the assets of the Company are sold or transferred to a Person as to which (a) the Incumbent Board does not have authority (whether by law or contract) to directly control the use or further disposition of such assets and (b) the financial results of the Company and such Person are not consolidated for financial reporting purposes.

Anything else in this definition to the contrary notwithstanding, no Change in Control shall be deemed to have occurred by virtue of any transaction which results in the Participant, or a group of Persons which includes the Participant, acquiring more than 20% of either the combined voting power of the Company’s outstanding voting securities or the voting securities of any other corporation or entity which acquires all or substantially all of the assets of the Company, whether by way of merger, consolidation, sale of such assets or otherwise.

6.           Payment of Award.

(a)Employed through Vesting Date.If the Participant is employed with the Company through the Vesting Date, payment of his vested Restricted Stock Units shall be made within 30 days following the Vesting Date.

3

(b)Employment Terminates Prior to Vesting Date.

i.   If the Participant’s employment terminates by reason of death or long-term disability in accordance with Section 4(b), hereof, prior to the Vesting Date, the Award, as accelerated pursuant to Section 4 and/or 5 hereof, shall be paid within 30 days of such termination.

ii.   If the participant voluntarily terminates employment with the Company in accordance with Section 4(a), the vested portion of the Award shall be paid within 30 days following the Vesting Date.

iii. If the Participant terminates employment with the Company by reason of a workforce reduction in accordance with Section 4(c), the vested portion of his/her Award shall be paid within 30 days following the Vesting Date.

(c)Change in Control.  Upon the occurrence of a Change in Control that also constitutes a “change in control event” within the meaning of U.S. Department of Treasury Regulation Section 1.409A-3(i)(5) (a “Section 409A CIC”), Participant’s vested Award shall be paid within 30 days following such Section 409A CIC.  Upon the occurrence of a Change in control that is not a Section 409A CIC, Participant’s vested award shall be paid within 30 days following the Vesting Date.

The Shares which the Award entitles the Participant to receive shall be paid to the Participant, after deduction of the number of Shares the Fair Market Value, as defined in the Plan, of which equals the applicable minimum statutory withholding taxes.

7.           Restrictions on Transfer.  Except as provided by the Plan, neither this Restricted Stock Unit Award nor any Restricted Stock Units covered hereby may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the units as provided herein.

8.           No Voting Rights.   The Restricted Stock Units granted pursuant to this Award, whether or not vested, will not confer any voting rights upon the Participant, unless and until the Award is paid in Shares.

9.           Changes in Capitalization.The Restricted Stock Units under this Award shall be subject to the provisions of the Plan relating to adjustments to corporate capitalization, provided, however, that in the event of any reorganization, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split or other similar change in corporate structure affecting the shares subject to the Award, the Award shall be appropriately adjusted to reflec t such change, but only so far as is necessary to maintain the proportionate interest of the Participant and preserve, without exceeding, the value of such Award.

4

10.           Covenant Not To Compete, Solicit or Disclose Confidential Information.

(a)The Participant acknowledges that the Participant is in possession of and has access to confidential information, including material relating to the business, products or services of the Company and that he or she will continue to have such possession and access during employment by the Company.  The Participant also acknowledges that the Company’s business, products and services are highly specialized and that it is essential that they be protected, and, accordingly, the Participant agrees that as partial consideration for the Award granted herein that should the Participant engage in any “Detrimental Activity,” as defined below, at any time during his or her employment or during a period of one year following his or her termination the Compa ny shall be entitled to: (i) recover from the Participant the value of any portion of the Award that has been paid; (ii) seek injunctive relief against the Participant; (iii) recover all damages, court costs, and attorneys’ fees incurred by the Company in enforcing the provisions of this Award, and (iv) set-off any such sums to which the Company is entitled hereunder against any sum which may be owed the Participant by the Company.

(b)           “Detrimental Activity” for the purposes hereof, other than with respect to involuntary termination without cause, termination in connection with or as a result of a “Change in Control” (as defined in Section 10(b) hereof), or termination following a reduction in job responsibilities, shall include: (i) rendering of services for any person or organization, or engaging directly or indirectly in any business, which is or becomes competitive with the Company; (ii) disclosing to anyone outside the Company, or using in other than the Company’s business, without prior written authorization from the Company, any confidential information including material relating to the business, products or services of the Company acquired by the Participant d uring employment with the Company; (iii) soliciting, interfering, inducing, or attempting to cause any employee of the Company to leave his or her employment, whether done on Participant’s own account or on account of any person, organization or business which is or becomes competitive with the Company, or (iv) directly or indirectly soliciting the trade or business of any customer of the Company.  “Detrimental Activity” for the purposes hereof with respect to involuntary termination without cause, termination in connection with or as a result of a “Change in Control”, or termination following a reduction in job responsibilities, shall include only part (ii) of the preceding sentence.

11.           Employment.  This Award Agreement is not an employment agreement.  Nothing contained herein shall be construed as creating any employment relationship.

12.           Notices.  All notices required or permitted under this Agreement shall be in writing and shall be delivered personally or by mailing the same by registered or certified mail postage prepaid, to the other party.  Notice given by mail as below set out shall be deemed delivered at the time and on the date the same is postmarked.

Notices to the Company should be addressed to:

Cameron International Corporation

1333 West Loop South, Suite 1700

Houston, Texas 77027

Attention:  Corporate Secretary

Telephone:  713-513-3322

5

13.           Tax Withholding.   Participant agrees that as a condition to the payment of the Award hereunder, the Participant must pay all applicable federal, state and local taxes or all applicable withholding taxes required by other laws and regulations that may be in effect as of the date of each such payment (“Required Tax Amounts”) to the Company.  Subject to any applicable law or regulation, Participant may elect to pay Required Tax Amounts to the Company: (1) in cash or by payroll deduction, or (2) by having any Shares issued under this Award be reduced by the number of Shares of the Fair Market Val ue of which equals the Required Tax Amounts.  Failure to make an election within the time specified will result in the Required Tax Amounts being paid pursuant to method (2) above, namely, by a reduction of shares issued.

14.           Section 409A.

(a)This Award is intended to comply with Section 409A of the Code and ambiguous provisions, if any, shall be construed in a manner that is compliant with or exempt from the application of Section 409A, as appropriate.  This Award shall not be amended or terminated in a manner that would cause the Award or any amounts payable under the Award to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Award.  The Company shall neither cause nor permit any payment, benefit or consideration to be substitu ted for a benefit that is payable under this Award if such action would result in the failure of any amount that is subject to Section 409A to comply with the applicable requirements of Section 409A.  For purposes of Section 409A, each payment under this Award shall be deemed to be a separate payment.

(b)Notwithstanding any provision of the Award to the contrary, if the Participant is a “specified employee” within the meaning of Section 409A as of the date of the Participant’s termination of employment and the Company determines, in good faith, that immediate payments of any amounts or benefits would cause a violation of Section 409A, then any amounts or benefits which are payable under this Award upon the Participant’s “separation from service” within the meaning of Section 409A which (i) are subject to the provisions of Section 409A; (ii) are not otherwise excluded under Section 409A; and (iii) would otherwise be payable during the first six-month period following such se paration from service shall be paid on the first business day next following the earlier of (1) the date that is six months and one day following the Date of termination or (2) the date of the participant’s death.

______________________________________

6

EX-10.41

Exhibit 10.41

CAMERON INTERNATIONAL CORPORATION

Restricted Stock Unit Award Agreement

(_____________, 2010)

This RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Award Agreement ”) is between the employee listed on the attached Notice of Grant of Award (“Participant”) and Cameron International Corporation (the “Company”), in connection with the Restricted Stock Units (“RSU”) granted to Participant by the Company.

1.           Effective Date and Issuance of Restricted Stock.  The Company hereby grants to the Participant, on the terms and conditions set forth herein, an award of Restricted Stock Units (the “Award”).  This Restricted Stock Unit Award is a commitment to issue one Share of Cameron common stock (“Share”) for each share of restricted stock units specified on the Notice of Grant of Award, at vesting.  If Participant completes, signs, and returns one copy of this agreement (the “Award Agreement”) to the Company in Houston, Texas, U. S.A., this Award Agreement will be effective as of _____________, 2010.

2.           Terms Subject to the Plan.  This Award Agreement is expressly subject to the terms and provisions of the Company's 2005 Equity Incentive Plan (the "Plan"), as indicated in your Notice of Grant of Award.  A copy of the Plan is available on the Cameron Intranet under the Legal Section.  In the event there is a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan shall control.

3.           Vesting Requirement.  The Award, to the extent earned, shall become vested, subject to the provisions of Sections 4 and 5 below, in three installments as follows: one-third on January 1, 201_____, one-third on January 1, 201_____,  and one-third on January 1, 201_____ (the “Vesting Dates”), provided (i) the Company achieves Net Income of $50 Million or more in the calendar year201_____,and (ii) the Participant continues to be employed by the Company through the Vesting Dates.  All Restricted Stock Units which become vested shall be payable in accordance with Section 6 hereof.

4.           Termination of Employment.  Notwithstanding the foregoing:

(a) If the Participant’s employment voluntarily terminates at age 60 or older for reasons other than cause (as defined below), and the Participant has at least ten years of continuous service with the Company, any unvested Restricted Stock Units (RSUs) shall continue to vest according to the terms of the Award; except that, unless the Participant is an Executive Officer age 65 or older and has at least ten years service with the Company at time of termination, if such termination occurs within one year from the effective date of the Award, the number of RSUs that will continue to vest shall be reduced to be proportionate to that portion of the year between such effective date and the date of termination and the balance of the Award shall be immediately cancelled.&# 160; “Continuous Service” with the Company shall mean ten (10) years of continuous and uninterrupted employment by the Participant from their most recent date of hire.

(b)  If the Participant’s employment terminates by reason of the death or long-term disability (as defined below) of the Participant, the Award shall be immediately vested and payable in full as of the date of death or the date of such termination; except that, unless the Participant is age 65 or older and has at least ten years service with the Company at time of termination, if such death or termination occurs within one year from the effective date of the Award, the number of RSUs that will vest in full shall be reduced to be proportionate to that portion of the year between the effective date of the Award and the date of death or long-term disability and the balance of the Award shall be immediately cancelled.

1

(c)  If the Participant’s employment terminates by reason of a workforce reduction, the Award shall continue to vest according to the terms of the Award; except that, unless the Participant is an Executive Officer age 65 or older and has at least ten years service with the Company at time of termination, if such termination occurs within one year from the effective date of the Award, the number of RSUs that will vest in full shall be reduced to be proportionate to that portion of the year between such effective date and the date of termination and the balance of the Award shall be immediately cancelled.

(d)  If the Participant’s employment terminates for reasons other than for those addressed in the previous three subsections, no RSUs shall vest for the benefit of the Participant after the termination date.

(e)  “Cause” for the purposes hereof, shall mean the Award Participant has (1) engaged in gross negligence or willful misconduct in the performance of his duties and responsibilities respecting his position with the Company; (2) willfully refused, without proper legal reason, to perform the duties and responsibilities respecting his position with the Company; (3) breached any material policy or code of conduct established by the Company and affecting the Award Participant; (4) engaged in conduct that award recipient knows or should know is materially injurious to the Company; (5) been convicted of a felony or a misdemeanor involving moral turpitude; or (6) engaged in an act of dishonest or impropriety which materially impairs the award recipient’s effectiveness in his position with the Company.

(f)  “Long-term Disability” for the purposes hereof, shall mean that the Award Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months.

(g)           In the event of any reorganization, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split or other similar change in corporate structure affecting the shares subject to the stock option grant, the grant shall be appropriately adjusted to reflect such change, but only in so far as is necessary to maintain the proportionate interest of the holder of the grant and preserve, without exceeding, the value of such a grant.

5.           Change in Control.

(a)Notwithstanding Section 11.2 of the Plan, upon a “Change in Control” of the Company, the Award granted hereunder shall immediately and fully vest.

(b)“Change in Control” for the purposes of this Award, shall mean the earliest date on which:

(i)   any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s outstanding voting securities, other than through the purchase of voting securities directly from the Company through a private placement; or

(ii)   individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board shall from and after such election be deemed to be a member of the Incumbent Board; or

2

(iii)   a merger or consolidation involving the Company or its stock, or an acquisition by the Company, directly or indirectly or through one or more subsidiaries, of another entity or its stock or assets in exchange for the stock of the Company unless, immediately following such transaction less than 50% of the then outstanding voting securities of the surviving or resulting corporation or entity will be (or is) then beneficially owned, directly or indirectly, by all or substantially of the individuals and entities who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such transaction (treating, for purposes of determining whether the 50% continuity test is met, any ownership of the voting securities of the surviving or resulting corporation or entity that results from a stockholder’s ownership of the stock of, or their ownership interest in, the corporation or other entity with which the Company is merged or consolidated as not owned by persons who were beneficial owners of the Company’s outstanding voting securities immediately prior to the transaction).

(iv)   a tender offer or exchange offer is made and consummated by a Person other than the Company for the ownership of 20% or more of the voting securities of the Company then outstanding; or

(v)   all or substantially all of the assets of the Company are sold or transferred to a Person as to which (a) the Incumbent Board does not have authority (whether by law or contract) to directly control the use or further disposition of such assets and (b) the financial results of the Company and such Person are not consolidated for financial reporting purposes.

Anything else in this definition to the contrary notwithstanding, no Change in Control shall be deemed to have occurred by virtue of any transaction which results in the Participant, or a group of Persons which includes the Participant, acquiring more than 20% of either the combined voting power of the Company’s outstanding voting securities or the voting securities of any other corporation or entity which acquires all or substantially all of the assets of the Company, whether by way of merger, consolidation, sale of such assets or otherwise.

6.           Payment of Award.

(a)Employed through Vesting Date.If the Participant is employed with the Company through the Vesting Date, payment of his vested Restricted Stock Units shall be made within 30 days following the Vesting Date.

(b)Employment Terminates Prior to Vesting Date.

i.   If the Participant’s employment terminates by reason of death or long-term disability in accordance with Section 4(b), hereof, prior to the Vesting Date, the Award, as accelerated pursuant to Section 4 and/or 5 hereof, shall be paid within 30 days of such termination.

ii.   If the participant voluntarily terminates employment with the Company in accordance with Section 4(a), the vested portion of the Award shall be paid within 30 days following the Vesting Date.

3

iii. If the Participant terminates employment with the Company by reason of a workforce reduction in accordance with Section 4(c), the vested portion of his/her Award shall be paid within 30 days following the Vesting Date.

(c)Change in Control.  Upon the occurrence of a Change in Control that also constitutes a “change in control event” within the meaning of U.S. Department of Treasury Regulation Section 1.409A-3(i)(5) (a “Section 409A CIC”), Participant’s vested Award shall be paid within 30 days following such Section 409A CIC.  Upon the occurrence of a Change in control that is not a Section 409A CIC, Participant’s vested award shall be paid within 30 days following the Vesting Date.

The Shares which the Award entitles the Participant to receive shall be paid to the Participant, after deduction of the number of Shares the Fair Market Value, as defined in the Plan, of which equals the applicable minimum statutory withholding taxes.

7.           Restrictions on Transfer.  Except as provided by the Plan, neither this Restricted Stock Unit Award nor any Restricted Stock Units covered hereby may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the units as provided herein.

8.           No Voting Rights.   The Restricted Stock Units granted pursuant to this Award, whether or not vested, will not confer any voting rights upon the Participant, unless and until the Award is paid in Shares.

9.           Changes in Capitalization.The Restricted Stock Units under this Award shall be subject to the provisions of the Plan relating to adjustments to corporate capitalization, provided, however, that in the event of any reorganization, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split or other similar change in corporate structure affecting the shares subject to the Award, the Award shall be appropriately adjusted to reflec t such change, but only so far as is necessary to maintain the proportionate interest of the Participant and preserve, without exceeding, the value of such Award.

10.           Covenant Not To Compete, Solicit or Disclose Confidential Information.

(a)The Participant acknowledges that the Participant is in possession of and has access to confidential information, including material relating to the business, products or services of the Company and that he or she will continue to have such possession and access during employment by the Company.  The Participant also acknowledges that the Company’s business, products and services are highly specialized and that it is essential that they be protected, and, accordingly, the Participant agrees that as partial consideration for the Award granted herein that should the Participant engage in any “Detrimental Activity,” as defined below, at any time during his or her employment or during a period of one year following his or her termination the Compa ny shall be entitled to: (i) recover from the Participant the value of any portion of the Award that has been paid; (ii) seek injunctive relief against the Participant; (iii) recover all damages, court costs, and attorneys’ fees incurred by the Company in enforcing the provisions of this Award, and (iv) set-off any such sums to which the Company is entitled hereunder against any sum which may be owed the Participant by the Company.

4

(b)           “Detrimental Activity” for the purposes hereof, other than with respect to involuntary termination without cause, termination in connection with or as a result of a “Change in Control” (as defined in Section 10(b) hereof), or termination following a reduction in job responsibilities, shall include: (i) rendering of services for any person or organization, or engaging directly or indirectly in any business, which is or becomes competitive with the Company; (ii) disclosing to anyone outside the Company, or using in other than the Company’s business, without prior written authorization from the Company, any confidential information including material relating to the business, products or services of the Company acquired by the Participant d uring employment with the Company; (iii) soliciting, interfering, inducing, or attempting to cause any employee of the Company to leave his or her employment, whether done on Participant’s own account or on account of any person, organization or business which is or becomes competitive with the Company, or (iv) directly or indirectly soliciting the trade or business of any customer of the Company.  “Detrimental Activity” for the purposes hereof with respect to involuntary termination without cause, termination in connection with or as a result of a “Change in Control”, or termination following a reduction in job responsibilities, shall include only part (ii) of the preceding sentence.

11.           Employment.  This Award Agreement is not an employment agreement.  Nothing contained herein shall be construed as creating any employment relationship.

12.           Notices.  All notices required or permitted under this Agreement shall be in writing and shall be delivered personally or by mailing the same by registered or certified mail postage prepaid, to the other party.  Notice given by mail as below set out shall be deemed delivered at the time and on the date the same is postmarked.

Notices to the Company should be addressed to:

Cameron International Corporation

1333 West Loop South, Suite 1700

Houston, Texas 77027

Attention:  Corporate Secretary

Telephone:  713-513-3322

13.           Tax Withholding.   Participant agrees that as a condition to the payment of the Award hereunder, the Participant must pay all applicable federal, state and local taxes or all applicable withholding taxes required by other laws and regulations that may be in effect as of the date of each such payment (“Required Tax Amounts”) to the Company.  Subject to any applicable law or regulation, Participant may elect to pay Required Tax Amounts to the Company: (1) in cash or by payroll deduction, or (2) by having any Shares issued under this Award be reduced by the number of Shares of the Fair Market Val ue of which equals the Required Tax Amounts.  Failure to make an election within the time specified will result in the Required Tax Amounts being paid pursuant to method (2) above, namely, by a reduction of shares issued.

5

14.           Section 409A.

(a)This Award is intended to comply with Section 409A of the Code and ambiguous provisions, if any, shall be construed in a manner that is compliant with or exempt from the application of Section 409A, as appropriate.  This Award shall not be amended or terminated in a manner that would cause the Award or any amounts payable under the Award to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Award.  The Company shall neither cause nor permit any payment, benefit or consideration to be substituted for a benefit tha t is payable under this Award if such action would result in the failure of any amount that is subject to Section 409A to comply with the applicable requirements of Section 409A.  For purposes of Section 409A, each payment under this Award shall be deemed to be a separate payment.

(b)Notwithstanding any provision of the Award to the contrary, if the Participant is a “specified employee” within the meaning of Section 409A as of the date of the Participant’s termination of employment and the Company determines, in good faith, that immediate payments of any amounts or benefits would cause a violation of Section 409A, then any amounts or benefits which are payable under this Award upon the Participant’s “separation from service” within the meaning of Section 409A which (i) are subject to the provisions of Section 409A; (ii) are not otherwise excluded under Section 409A; and (iii) would otherwise be payable during the first six-month period following such separation from service shall be paid on the first business day next following the earlier of (1) the date that is six months and one day following the Date of termination or (2) the date of the participant’s death.

______________________________________

6

EX-10.43

Exhibit 10.43

FOURTH AMENDMENT TO THE

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

(As Amended and Restated Effective January 1, 2008)

WHEREAS, Cameron International Corporation (the “Company”) and other Employers have heretofore adopted the Cameron International Corporation Retirement Savings Plan (As Amended and Restated Effective January 1, 2008) (the “Plan”); and

WHEREAS, the Company desires to amend the Plan on behalf of itself and all Employers in certain respects;

NOW, THEREFORE, the Plan shall be amended as follows:

I.           Effective as of January 1, 2007, the following shall be added to the end of Section 5.2(c) of the Plan:

“Notwithstanding the foregoing, periodic, reasonable opportunities occurring no less frequently than quarterly shall be provided to convert any amounts invested in the Company Stock Fund, and no restrictions or conditions shall apply with respect to any investment in the Company Stock Fund that does not apply with respect to the investment of other assets of the Plan except as otherwise permitted under Section 401(a)(35) of the Code and the regulations promulgated thereunder.”

II.           Effective as of January 1, 2009, the following shall be added to the end of Section 10.1 of the Plan:

“Further, a Member’s deemed severance from employment pursuant to Section 414(u)(12)(B)(i) shall not be a “severance from employment” for purposes of this Section 10.1, and, therefore, such Member shall not be eligible for a distribution under the Plan as a result of such deemed severance.”

III.           Effective as of July 13, 2010:

1.           The following new definition shall be added to Section 1.1 of the Plan:

“(7A)           The term “Board” shall mean the board of directors of Cameron International Corporation.”

2.           The following new definition shall be added to Section 1.1 of the Plan:

“(9A)           The term “Committee” shall mean the Cameron International Corporation Plans Administration Committee.”

3.           Section 5.3 of the Plan shall be deleted and the following shall be substituted therefor:

“5.3           Elimination of Funds.

Notwithstanding any provision in this Article V to the contrary, in the event any one or more of the Funds is eliminated as an investment fund by the Committee (or, in the case of the Company Stock Fund, by the Board), each Member and Inactive Member who has an investment election in effect that designates such investment fund for the investment of amounts allocated to such individual’s Separate Accounts, shall designate a continuing Fund or Funds made available under the Plan pursuant to Section 6.2 for the investment of such amounts; provided, however, that in the event such individual fails to make such a designation, such contributions or amounts shall be invested in a the Fund or Funds designated by the Committee in a uniform and nondiscriminatory manner.”

4.           Section 6.2 of the Plan shall be deleted and the following shall be substituted therefor:

“6.2           Establishment and Maintenance of Funds.

The Committee shall cause at least three Funds to be established and maintained at all times. Each such Fund shall be diversified and shall have different risk and return characteristics from the other Funds.  Any Fund that invests primarily in investments with restrictions regarding Funds to which investment transfers may be made or to which a minimum investment period is applicable shall not be considered as one of such requisite three Funds.  The Funds established by the Committee pursuant to this Section 6.2 shall be in addition to the Company Stock Fund, which shall be established and maintained pursuant to Section 6.3.”

5.           Section 6.3 of the Plan shall be deleted and the following shall be substituted therefor:

“6.3           Company Stock Fund.

The Company shall cause the Company Stock Fund to be established and maintained at all times under the Plan. The assets of the Company Stock Fund shall be invested by the Trustee solely in Company Stock; provided, however, that the Company Stock Fund may hold an amount of cash to the extent required in lieu of holding fractional shares of Company Stock.  The Trustee shall receive Company Stock from the Company or purchase Company Stock in the market.  The Board has mandated that the Plan offer the Company Stock Fund under the Plan as a matter of Plan design, in order to afford Members, Inactive Members, Beneficiaries and alternate payees the opportunity to invest in Company Stock through their Separate Accounts under the Plan.  None of the Board, th e Committee, the Company or any of its officers, directors or employees either encourages or discourages investment in the Company Stock Fund.  Members, Inactive Members, Beneficiaries and alternate payees should understand that the Company Stock Fund is only one of several Funds offered for the investment of Separate Accounts under the Plan and that they are free to invest in any Fund, and to determine, in their own discretion, whether or not to invest in any Fund (including, without limitation, the Company Stock Fund).  All Members, Inactive Members, Beneficiaries and alternate payees whose Separate Accounts are invested in the Company Stock Fund, or who are considering investing their Separate Accounts in the Company Stock Fund, should understand that:  (1) the Company Stock Fund represents the investment in the equity securities of a single company and, therefore, may be inherently subject to wider price swings, up and down and in shorter periods of time, than other Fun ds offered under the Plan, (2) the Company Stock Fund should be viewed as a long term investment option which will be maintained under the Plan indefinitely, and (3) the fiduciaries of the Plan will not override any instructions that Members, Inactive Members, Beneficiaries and alternate payees may provide requesting that all or part of their Separate Accounts be invested in the Company Stock Fund nor can they act to eliminate or otherwise restrict the inclusion of the Company Stock Fund as a Fund offered under the Plan.”

6.           The following paragraph shall be added at the end of Section 12.2 of the Plan:

“To prevent any two parties to the Plan from being deemed co-fiduciaries with respect to any particular function, both the Plan and the Trust Agreement are intended, and should be construed, to allocate to each party to the Plan or the Trust Agreement, as applicable, only those specific powers, duties, responsibilities, and obligations as are specifically granted to it under the Plan or Trust.  The Plan is intended to allocate to each named fiduciary the individual responsibility for proper execution of the functions assigned to it, and none of such responsibilities or any other responsibility shall be shared by two or more of such named fiduciaries unless such sharing is provided for by a specific provision of the Plan or Trust.”

7.           Section 13.1 of the Plan shall be deleted and the following shall be substituted therefor:

“13.1           Amendment.

Subject to the provisions of Section 13.2, the Company may at any time and from time to time, amend the Plan.  Further, the Committee may amend the Plan at any time and from time to time, with any such Committee amendment action being exercised in a settlor capacity, provided that:  (a) any amendment to the Plan that substantially and materially increases the benefits of officers or directors of the Company shall require the prior approval of the Board or the committee of the Board (if any) to which the duty of general oversight has been delegated by the Board, and (b) notwithstanding anything to the contrary herein, the Committee shall have no authority to amend or modify the Plan’s design or operation as it relates to the offering of the Company Stock Fund and the composition of the Company Stock Fund and the Committee shall have no authority to eliminate or restrict the inclusion of the Company Stock Fund under the Plan or to review or approve any assets in which the Company Stock Fund is invested.  For the avoidance of doubt, only the Company, by action of the Board, shall be authorized to amend the Plan’s provisions or modify the Plan’s operations pertaining to the inclusion of the Company Stock Fund as a vehicle for investment of Separate Accounts under the Plan.”

8.           Section 15.3 of the Plan shall be deleted and the following shall be substituted therefor:

“15.3           No Guarantees.

None of the Company, any other participating Employer, the Committee, the Board or the Trustee guarantees the Trust from loss or depreciation, nor the payment of any amount which may become due to any person hereunder.  All benefits payable under the Plan shall be paid or provided for solely from the Plan assets and none of the Company, any other participating Employer, the Committee, the Board or the Trustee assumes any liability or responsibility for the adequacy thereof.”

IV.           Effective as of September 1, 2010:

1.           Reference to “the Company” in Sections 1.1(59), 2.3, 3.1, 3.3, 3.4, 3.10, 4.2, 4.10, 5.2, 5.3, 7.4, 7.9, 8.1, 8.2, 9.1, 10.2, 10.6, 10.9, 10.11, 11.5 of the Plan, subparagraphs 6.6(a) and 6.6(b) of the Plan (except where referenced in the phrases “Company Stock” or “Company Stock Fund”) and subparagraphs 13.3(a) and 13.3(b) of the Plan shall be deleted and reference to “the Committee” shall be substituted therefor.

2.           In the last sentence of Section 9.1, reference to “the Company’s written loan procedure,” shall be deleted and “reference to “the Plan’s written loan procedure, as adopted and amended from time to time by the Committee,” shall be substituted therefor.

3.           Article XII of the Plan shall be deleted and the following shall be substituted therefor:

“ARTICLE XII

ADMINISTRATION

12.1           Plan Administrator.

For purposes of ERISA, the Committee shall be the Plan Administrator and, as such, shall be responsible for the compliance of the Plan with the reporting and disclosure provisions of ERISA.

12.2           Authority of the Committee.

The Committee shall have all the powers and authority expressly conferred upon it herein and, further, shall have the sole right, in its discretion, to interpret and construe the Plan, and to determine any disputes arising thereunder, subject to the provisions of Section 7.9.  In exercising such powers and authority, the Committee at all times shall exercise good faith, apply standards of uniform application, and refrain from arbitrary action.  Any decision of the Committee in such exercise of its powers, authorities and duties shall be final and binding upon all affected parties.  The Committee may employ such attorneys, agents, and accountants as it may deem necessary or advisable to assist it in carrying out its duties hereunder.  The Committee shall be a “named fiduciary” a s that term is defined in Section 402(a)(2) of ERISA.  The Committee may:

(a) allocate any of the powers, authorities, or responsibilities for the operation and administration of the Plan, which are retained by it or granted to it by this Article XII, to the Trustee; and

(b) designate a person or persons other than itself to carry out any of such powers, authorities, or responsibilities;

provided, however, that no powers, authorities, or responsibilities of the Trustee shall be subject to the provisions of paragraph (b) of this Section 12.2; and provided further, that no allocation or delegation by the Committee of any of its powers, authorities, or responsibilities to the Trustee shall become effective unless such allocation or delegation first shall be accepted by the Trustee in a writing signed by it and delivered to the Committee.

To prevent any two parties to the Plan from being deemed co-fiduciaries with respect to any particular function, both the Plan and the Trust Agreement are intended, and should be construed, to allocate to each party to the Plan or the Trust Agreement, as applicable, only those specific powers, duties, responsibilities, and obligations as are specifically granted to it under the Plan or Trust.  The Plan is intended to allocate to each named fiduciary the individual responsibility for proper execution of the functions assigned to it, and none of such responsibilities or any other responsibility shall be shared by two or more of such named fiduciaries unless such sharing is provided for by a specific provision of the Plan or Trust.

12.3           Action of the Committee.

Any act authorized, permitted, or required to be taken by the Committee under the Plan, which has not been delegated in accordance with Section 12.2, may be taken by a majority of the members of the Committee, either by vote at a meeting, or in writing without a meeting.  All notices, advices, directions, certifications, approvals, and instructions required or authorized to  be given by the Committee under the Plan shall be in writing and signed by either (i) a majority of the members of the Committee, or by such member or members as may be designated by an instrument in writing, signed by all the members thereof, as having authority to execute such documents on its behalf, or (ii) a person who becomes authorized to act for the Committee in accordance with the provisions of paragraph (b) of Section  12.2.  Subject to the provisions of Section 12.4, any action taken by the Committee which is authorized, permitted, or required under the Plan shall be final and binding upon the Company and the Trustees, all persons who have or who claim an interest under the Plan, and all third parties dealing with any Trustee or the Company.

12.4           Claims Review Procedure.

Claims for Plan benefits and reviews of Plan benefit claims which have been denied or modified will be processed in accordance with the written Plan claims procedures established by the Committee, which procedures are hereby incorporated by reference as a part of the Plan and may be amended from time to time by the Committee.

12.5           Qualified Domestic Relations Orders.

Except as otherwise provided with respect to “qualified domestic relations orders” and certain judgments and settlements pursuant to section 206(d) of the Act and sections 401(a)(13) and 414(p) of the Code, and, except as otherwise provided under other applicable law, no right or interest of any kind in any benefit shall be transferable or assignable by any Member or any beneficiary or be subject to anticipation, adjustment, alienation, encumbrance, garnishment, attachment, execution, or levy of any kind.  Plan provisions to the contrary notwithstanding, the Plan shall comply with the terms and provisions of any “qualified domestic relations order,” including an order that requires distributions to an alternate payee prior to a Member’s “earliest retirement age” as such term is defi ned in section 206(d)(3)(E)(ii) of the Act and section 414(p)(4)(B) of the Code, and the Committee shall establish appropriate procedures to effect the same.  In the event that the total value of an amount directed to be paid pursuant to a qualified domestic relations order is not in excess of $5,000, such amount shall be paid to the recipient or recipients identified in such order in one lump sum payment as soon as practicable after such order has been determined to be a qualified domestic relations order.

12.6           Indemnification.

In addition to whatever rights of indemnification the members of the Board, members of the Committee, or any other person or persons (other than the Trustees or individuals, other than members of the Board, who are not employed by the Company or its affiliates) to whom any power, authority, or responsibility of the Company is allocated or delegated pursuant to paragraph (b) of Section 12.2, may be entitled under the articles of incorporation, regulations, or bylaws of the Company, under any provision of law, or under any other agreement, the Company shall satisfy such liability actually and reasonably incurred by any such member or such other person or persons, including expenses, attorneys’ fees, judgments, fines, and amounts paid in settlement, in connection with any threatened, pending, or completed action, suit, or proceedi ng which is related to the exercise, or failure to exercise, by such member or such other person or persons of any of the powers, authorities, responsibilities, or discretion of the Company or the Committee as provided under the Plan and the Trust Agreement, or reasonably believed by such member or such other person or persons to be provided thereunder, and any action taken by such member or such other person or persons in connection therewith.

12.7           Temporary Restrictions.

In order to ensure an orderly transition in the transfer of assets to the Trust from another trust fund maintained under the Plan or from the trust fund of a plan that is merging into the Plan or transferring assets to the Plan or to ensure an orderly transition of recordkeeping, valuation, or other administrative activities from one service provider to another service provider, the Committee may, in its discretion, temporarily prohibit or restrict withdrawals, loans, changes to contribution elections, changes of investment designation of future contributions, transfers of amounts from one Fund to another Fund, or such other activity as the Committee deems appropriate, provided that any such temporary cessation or restriction of such activity shall be in compliance with all applicable law and the Committee shall have provided to Memb ers, Inactive Members, their beneficiaries, and alternate payees the notices and information required to be provided with respect to such temporary cessation or restriction of such activity by applicable law and regulations.”

4.           Reference to “the Company” in Section 15.5 of the Plan shall be deleted and reference to “the Company, the Committee” shall be substituted therefor.

5.           A new Section 15.11 of the Plan shall be added as follows:

“15.11  Plan Administration Communications and Systems.

The Committee may establish telephone and/or electronic media systems and procedures (including on-line mechanisms) for purposes of effecting Plan communications and Plan administration operations.  To the extent that any such telephone and/or electronic media systems and procedures are established by the Committee, references in the Plan suggesting that other systems or procedures would be used for purposes of effecting a given Plan communication or Plan administration operation shall be superseded and reference to the telephone or electronic media system or procedure which was effected, as communicated to Participating Employees, shall be deemed substituted therefor.”

6.           Notwithstanding anything to the contrary in the Plan, no Member shall be restricted from making Basic Contributions under the Plan by reason of having received a withdrawal of amounts credited to his Separate Accounts prior to his severance from employment with the Company and its Controlled Entities.

VI.           As amended hereby, the Plan is specifically ratified and reaffirmed.

IN WITNESS WHEREOF, the parties have caused these presents to be executed this 30th day of August, 2010, effective for all purposes as provided above.

CAMERON INTERNATIONAL CORPORATION

By:	/s/
Name:	William C. Lemmer
Title:	Senior Vice President & General Counsel

EX-10.44

Exhibit 10.44

FOURTH AMENDMENT TO THE

INDIVIDUAL ACCOUNT RETIREMENT PLAN

FOR

BARGAINING UNIT EMPLOYEES

AT THE CAMERON INTERNATIONAL CORPORATION

BUFFALO, NEW YORK PLANT

(As Amended and Restated Effective as of January 1, 2008)

WHEREAS, CAMERON INTERNATIONAL CORPORATION (the “Company”) has heretofore adopted the INDIVIDUAL ACCOUNT RETIREMENT PLAN FOR  BARGAINING UNIT EMPLOYEES AT THE CAMERON INTERNATIONAL CORPORATION BUFFALO, NEW YORK PLANT, as amended and restated effective as of January 1, 2008  (the “Plan”) for the benefit of its eligible employees; and

WHEREAS, the Company desires to amend the Plan in certain respects.

NOW, THEREFORE, the Plan is hereby amended as follows:

I.           Effective as of January 1, 2007, the following shall be added to the end of the fourth paragraph of Section 11.03(a) of the Plan:

“Notwithstanding the foregoing, periodic, reasonable opportunities occurring no less frequently than quarterly shall be provided to convert any amounts invested in the Company Stock Fund, and no restrictions or conditions shall apply with respect to any investment in the Company Stock Fund that does not apply with respect to the investment of other assets of the Plan except as otherwise permitted under Section 401(a)(35) of the Code and the regulations promulgated thereunder.”

II.           Effective as of January 1, 2009:

1.           The following shall be added to the end of Section 9.01(g) of the Plan:

“Notwithstanding the foregoing, a Member’s deemed severance from employment pursuant to Section 414(u)(12)(B)(i) shall not be a “severance from employment,” and, therefore, such Member shall not be eligible for a distribution under the Plan as a result of such deemed severance.”

2.           The following shall be added to the end of Section 17.07 of the Plan:

“Further, a Member’s deemed severance from employment pursuant to Section 414(u)(12)(B)(i) shall not be a “termination from employment,” and, therefore, such Member shall not be eligible for a distribution under the Plan as a result of such deemed severance.”

III.           Effective as of July 13, 2010:

1.           The following new definition shall be added to Section 1.01 of the Plan:

“(6A)           Board:  The board of directors of Cameron International Corporation.”

2.           The following new definition shall be added to Section 1.01 of the Plan:

“(7A) Committee: The Cameron International Corporation Plans Administration Committee.”

3.           Section 1.01(11) of the Plan shall be deleted and the following shall be substituted therefor:

“(11) Company Stock Fund:  The investment fund established to invest in Company Stock and maintained pursuant to the provisions of Sections 11.01(a) and 11.02.”

4.           A new Section 10.07 shall be added to the Plan as follows:

“10.07  Temporary Restrictions.  In order to ensure an orderly transition in the transfer of assets to the Funding Agent from another trust fund maintained under the Plan or from the trust fund of a plan that is merging into the Plan or transferring assets to the Plan or to ensure an orderly transition of recordkeeping, valuation, or other administrative activities from one service provider to another service provider, the Company may, in its discretion, temporarily prohibit or restrict withdrawals, loans, changes to contribution elections, changes of investment designation of future contributions, transfers of amounts from one Fund to another Fund, or such other activi ty as the Company deems appropriate, provided that any such temporary cessation or restriction of such activity shall be in compliance with all applicable law and the Company shall have provided to Members, their beneficiaries, and alternate payees the notices and information required to be provided with respect to such temporary cessation or restriction of such activity by applicable law and regulations.”

5.           Section 11.01 of the Plan shall be deleted and the following shall be substituted therefor:

“11.01  Funding Agent.

(a)           The assets of the Plan shall be maintained by the Funding Agent in the investment fund or funds made available from time to time by the Committee or, in the case of the Company Stock Fund, by the Board (the “Fund” or “Funds”) in accordance with the selection made by each Member with respect to the contributions in his Account pursuant to Section 11.03(a) below.

(b)           The Funding Agent shall receive such compensation for its services as Funding Agent hereunder as may be agreed upon from time to time by the Committee and the Funding Agent.  The Funding Agent shall be reimbursed for all reasonable expenses it incurs while acting as Funding Agent, as agreed upon by the Committee and as provided in Section 11.03(b).”

6.           Section 11.02 of the Plan shall be deleted and the following shall be substituted therefor:

“11.02  Company Stock Fund.  The Company shall cause the Company Stock Fund to be established and maintained at all times under the Plan. The assets of the Company Stock Fund shall be invested by the Funding Agent solely in Company Stock; provided, however, that the Company Stock Fund may hold an amount of cash to the extent required in lieu of holding fractional shares of Company Stock.  The Funding Agent shall receive Company Stock from the Company or purchase Company Stock in the market.  The Board has mandated that the Plan offer the Company Stock Fund under the Plan as a matter of Plan design, in order to afford Members, beneficiaries and altern ate payees the opportunity to invest in Company Stock through their Accounts under the Plan.  None of the Board, the Committee, the Company or any of its officers, directors or employees either encourages or discourages investment in the Company Stock Fund.  Members, beneficiaries and alternate payees should understand that the Company Stock Fund is only one of several Funds offered for the investment of Accounts under the Plan and that they are free to invest in any Fund, and to determine, in their own discretion, whether or not to invest in any Fund (including, without limitation, the Company Stock Fund).  All Members, beneficiaries and alternate payees whose Accounts are invested in the Company Stock Fund, or who are considering investing their Accounts in the Company Stock Fund, should understand that:  (1) the Company Stock Fund represents the investment in the equity securities of a single company and, therefore, may be inherently subject to wider price swings, u p and down and in shorter periods of time, than other Funds offered under the Plan, (2) the Company Stock Fund should be viewed as a long term investment option which will be maintained under the Plan indefinitely, and (3) the fiduciaries of the Plan will not override any instructions that Members, beneficiaries and alternate payees may provide requesting that all or part of their Accounts be invested in the Company Stock Fund nor can they act to eliminate or otherwise restrict the inclusion of the Company Stock Fund as a Fund offered under the Plan.”

7.           The last paragraph of Section 11.03(a) of the Plan shall be deleted and the following shall be substituted therefor:

“Notwithstanding any provision in this Section 11.03(a) to the contrary, in the event any one or more of the Funds is eliminated as an investment fund by the Committee (or, in the case of the Company Stock Fund, by the Board), each Member, beneficiary or alternate payee who has an investment election in effect that designates such investment fund for the investment of amounts allocated to such individual’s Accounts, shall designate a continuing Fund or Funds made available under the Plan for the investment of such amounts; provided, however, that in the event such individual fails to make such a designation, such contributions or amounts shall be invested in a the Fund or Funds designated by the Committee in a uniform and nondiscriminatory manner.”

8.           The following paragraph shall be added at the end of Section 12.01 of the Plan:

“To prevent any two parties to the Plan from being deemed co-fiduciaries with respect to any particular function, both the Plan and any instruments relating to the Plan to which the Funding Agent  is a party (“Funding Instruments”) are intended, and should be construed, to allocate to each party to the Plan or the Funding Instruments, as applicable, only those specific powers, duties, responsibilities, and obligations as are specifically granted to it under the Plan or the Funding Instruments.  The Plan is intended to allocate to each named fiduciary the individual responsibility for proper execution of the functions assigned to it, and none of such responsibilities or any other responsibility shall be shared by two or more of such named fiduciaries unless such sharing is provided for by a specif ic provision of the Plan or the Funding Instruments.”

9.           Section 13.01 of the Plan shall be deleted and the following shall be substituted therefor:

“13.01  Amendments.  Subject to the provisions of Section 13.02, the Committee may at any time and from time to time, amend the Plan.  Further, the Committee may amend the Plan at any time and from time to time, with any such Committee amendment action being exercised in a settlor capacity, provided that:  (a) any amendment to the Plan that substantially and materially increases the benefits of officers or directors of the Company shall require the prior approval of the Board or the committee of the Board (if any) to which the duty of general oversight has been delegated by the Board, and (b) notwithstanding anything to the contrary herein, the Commi ttee shall have no authority to amend or modify the Plan’s design or operation as it relates to the offering of the Company Stock Fund and the composition of the Company Stock Fund and the Committee shall have no authority to eliminate or restrict the inclusion of the Company Stock Fund under the Plan or to review or approve any assets in which the Company Stock Fund is invested.  For the avoidance of doubt, only the Company, by action of the Board, shall be authorized to amend the Plan’s provisions or modify the Plan’s operations pertaining to the inclusion of the Company Stock Fund as a vehicle for investment of Accounts under the Plan.”

10.           The following new Section 16.011 shall be added to Article XVI of the Plan:

“16.011  No Guarantees.  None of the Company, the Committee, the Board or the Funding Agent guarantees the Plan’s assets from loss or depreciation, nor the payment of any amount which may become due to any person hereunder.  All benefits payable under the Plan shall be paid or provided for solely from the Plan assets and none of the Employer, including the Company, the Committee, the Board or the Funding Agent assumes any liability or responsibility for the adequacy thereof.”

IV.           Effective as of September 1, 2010:

1.           Reference to “the Company” in Sections 3.06(a), 3.06(d), 9.03(d), 9.04(a), 9.08, 11.01, 11.01, 11.03 (except in the first paragraph of Section 11.03(a)), 11.04, 11.05 (except where referenced in the phrases “Company Stock” or “Company Stock Fund”) 12.03, 13.03, 14.02(d), 15.02(c), 16.03, 16.04, 17.03 (except in the third sentence of such section), and Section 5 of Appendix A to the Plan shall be deleted and reference to “the Committee” shall be substituted therefor.

2.           Section 9.01(c) shall be deleted and the following shall be substituted therefor:

“(c)           Notwithstanding the foregoing provisions of this Section 9.01, the Committee for the Plan from which a benefit is to be paid may designate a later Benefit Disbursement Date and, upon notification thereof to such Member or Beneficiary, as the case may be, such designated date shall become the Benefit Disbursement Date; provided, however, that in no event shall a Benefit Disbursement Date be later than the 60th day following the close of the Plan Year during which the Member attains, or would have attained, age 65 or, if later, the date he terminated employment with the Company.  If the amount of benefit payment required to commence by a certain date in accordance with the Plan cannot be ascertained by such date, or if it is not possible to commence benefit payments on such date because the Committee has been unable to locate the Member or Beneficiary, as the case may be, after making reasonable efforts to do so, a payment retroactive to such date may be made no later than 60 days after the earliest date on which the amount of such benefit payment can be ascertained under the Plan, or the date on which the Member or Beneficiary, as the case may be, is located, whichever is applicable.”

3.           Article X of the Plan shall be deleted and the following shall be substituted therefor:

“X.           PLAN ADMINISTRATION

10.01  Plan Administrator.  For purposes of ERISA, the Committee shall be the Plan Administrator and, as such, shall be responsible for the compliance of the Plan with the reporting and disclosure provisions of ERISA.

10.02  Authority of the Committee.  The Committee shall have all the powers and authority expressly conferred upon it herein and, further, shall have the sole right to interpret and construe the Plan, and to determine any disputes arising thereunder, subject to the provisions of Section 10.04.  In exercising such powers and authority, the Committee at all times shall exercise good faith, apply standards of uniform application, and refrain from arbitrary action.  Any decision of the Committee in such exercise of its powers, authorities and duties shall be final and binding upon all affected parties.  The Committee may employ such attorneys, agents , and accountants as it may deem necessary or advisable to assist it in carrying out its duties hereunder.  The Committee shall be a “named fiduciary” as that term is defined in Section 402(a)(2) of ERISA.  The Committee may:

(a)           allocate any of the powers, authorities, or responsibilities for the operation and administration of the Plan, which are retained by it or granted to it by this Article X, to the Funding Agent; and

(b)           designate a person or persons other than itself to carry out any of such powers, authorities, or responsibilities;

provided, however, that no powers, authorities, or responsibilities of the Funding Agent shall be subject to the provisions of paragraph (b) of this Section 10.02; and provided further, that no allocation or delegation by the Committee of any of its powers, authorities, responsibilities to the Funding Agent shall become effective unless such allocation or delegation first shall be accepted by the Funding Agent in a writing signed by it and delivered to the Committee.

To prevent any two parties to the Plan from being deemed co-fiduciaries with respect to any particular function, both the Plan and any instruments relating to the Plan to which the Funding Agent  is a party (“Funding Instruments”) are intended, and should be construed, to allocate to each party to the Plan or the Funding Instruments, as applicable, only those specific powers, duties, responsibilities, and obligations as are specifically granted to it under the Plan or the Funding Instruments.  The Plan is intended to allocate to each named fiduciary the individual responsibility for proper execution of the functions assigned to it, and none of such responsibilities or any other responsibility shall be shared by two or more of such named fiduciaries unless such sharing is provided for by a specific prov ision of the Plan or the Funding Instruments.

10.03  Action by the Committee.  Any act authorized, permitted, or required to be taken by the Committee under the Plan, which has not been delegated in accordance with Section 10.02, may be taken by a majority of the members of the Committee, either by vote at a meeting, or in writing without a meeting.  All notices, advices, directions, certifications, approvals, and instructions required or authorized to be given by the Committee under the Plan shall be in writing and signed by either (i) a majority of the members of the Committee, or by such member or members as may be designated by an instrument in writing, signed by all the members thereof, as having authority to execute such documents on its behalf, or (ii) a person who become authorized to act for the Committee in accordance with the provisions of paragraph (b) of Section 10.02.  Subject to the provisions of Section 10.04, any action taken by the Committee which is authorized, permitted, or required under the Plan shall be final and binding upon the Company and the Funding Agent, all persons who have or who claim an interest under the Plan, and all third parties dealing with any Funding Agent or the Company.

10.04  Claims Review Procedure.  Claims for Plan benefits and reviews of Plan benefit claims which have been denied or modified will be processed in accordance with the written Plan claims procedures established by the Committee, which procedures are hereby incorporated by reference as a part of the Plan and may be amended from time to time by the Committee.

10.05  Qualified Domestic Relations Order.  The Committee shall establish reasonable procedures to determine the status of domestic relations orders and to administer distributions under domestic relations orders which are deemed to be qualified orders.  Such procedures shall be in writing and shall comply with the provisions of Section 414(p) of the Code and regulations issued thereunder.

10.06  Indemnification.  In addition to whatever rights of indemnification the members of the Board, members of the Committee, or any other person or persons (other than the Funding Agent or individuals, other than Board members, not employed by the Company or its affiliates) to whom any power, authority, or responsibility of the Committee is allocated or delegated pursuant to paragraph (b) of Section 10.02, may be entitled under the articles of incorporation, regulations, or bylaws of the Company, under any provision of law, or under any other agreement, the Company shall satisfy such liability actually and reasonably incurred by any such member or such other person or perso ns, including expenses, attorneys’ fees, judgments, fines, and amounts paid in settlement, in connection with any threatened, pending, or completed action, suit, or proceeding which is related to the exercise, or failure to exercise, by such member or such other person or persons of any of the powers, authorities, responsibilities, or discretion of the Company or the Committee as provided under the Plan and the Funding Instruments, or reasonably believed by such member or such other person or persons to be provided thereunder, and any action taken by such member or such other person or persons in connection therewith.

10.07  Temporary Restrictions. In order to ensure an orderly transition in the transfer of assets to the Funding Agent from another trust fund maintained under the Plan or from the trust fund of a plan that is merging into the Plan or transferring assets to the Plan or to ensure an orderly transition of recordkeeping, valuation, or other administrative activities from one service provider to another service provider, the Committee may, in its discretion, temporarily prohibit or restrict withdrawals, loans, changes to contribution elections, changes of investment designation of future contributions, transfers of amounts from one Fund to another Fund, or such other activity as the Commit tee deems appropriate, provided that any such temporary cessation or restriction of such activity shall be in compliance with all applicable law and the Committee shall have provided to Members, their beneficiaries, and alternate payees the notices and information required to be provided with respect to such temporary cessation or restriction of such activity by applicable law and regulations.”

4.           Reference to “the Plan Administrator” in Sections 9.05(b), 14.03, and Article XVII shall be deleted and reference to “the Committee” shall be substituted therefor.

5.           Section 16.02 of the Plan shall be deleted and the following shall be substituted therefor:

“16.02  Payments Solely from Plan Assets.  All benefits payable under the Plan shall be paid or provided for solely from the Plan assets and none of the Company, the Committee or the Funding Agent assumes any liability or responsibility for the adequacy thereof.  The Committee or the Funding Agent may require execution and delivery of such instruments as are deemed necessary to assure proper payment of any benefits.”

6.           A new Section 16.011 shall be added to the Plan as follows:

“16.011  Plan Administration Communications and Systems.  The Committee may establish telephone and/or electronic media systems and procedures (including on-line mechanisms) for purposes of effecting Plan communications and Plan administration operations.  To the extent that any such telephone and/or electronic media systems and procedures are established by the Committee, references in the Plan suggesting that other systems or procedures would be used for purposes of effecting a given Plan communication or Plan administration operation shall be superseded and reference to the telephone or electronic media system or procedure which was effected, as communicate d to Participating Employees, shall be deemed substituted therefor.”

7.           Reference to “the Employer” in Section 17.04 shall be deleted and reference to “the Committee” shall be substituted therefor.

VI.           As amended hereby, the Plan is specifically ratified and reaffirmed.

EXECUTED, this 30th day of August 2010, effective for all purposes as provided above.

CAMERON INTERNATIONAL CORPORATION

By:	/s/
Name:	William C. Lemmer
Title:	Senior Vice President & General Counsel

EX-10.49

Exhibit 10.49

MERGER OF THE

NATCO GROUP

PROFIT SHARING AND SAVINGS PLAN

WITH AND INTO THE

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

WHEREAS, Cameron International Corporation  (the “Company”) sponsors the Cameron International Corporation Retirement Savings Plan (the “Cameron Plan”) and the NATCO Group Profit Sharing and Savings Plan (the “NATCO Plan”); and

WHEREAS, the Company desires that the NATCO Plan be merged with and into the Cameron Plan, effective as of March 17, 2010;

NOW, THEREFORE, effective as of March 17, 2010 (the “Plan Merger Date”), in consideration of the foregoing and notwithstanding any provisions of the NATCO Plan and the Cameron  Plan to the contrary, the NATCO Plan shall be merged with and into the Cameron Plan as follows:

1.           The NATCO Plan is hereby amended, restated, and merged with and into the Cameron Plan, with the result that the provisions of the Cameron Plan, as modified herein, replace in their entirety the provisions of the NATCO Plan. Any provisions of the Cameron Plan required to have an earlier effective date by applicable statute and/or regulation shall be effective as of the required effective date in such statute and/or regulation and shall apply, as of such required effective date, to the NATCO Plan as if included therein.

2.           Each Participant of the NATCO Plan as of the Plan Merger Date (“NATCO Participant”), shall become a Member of the Cameron Plan as of such date if such NATCO Participant is not already a Member of the Cameron Plan as of such date.

3.           The trustee of the NATCO Plan shall be directed to transfer the assets of the NATCO Plan to the trustee of the Cameron Plan as soon as administratively feasible after the Plan Merger Date.  All assets shall be transferred in cash, except that any Cameron International Corporation common stock held under the NATCO Plan and any outstanding loans from the NATCO Plan to NATCO Participants shall be transferred in kind.  In order to ensure an orderly transition with respect to the transferred assets of the NATCO Plan, the Plan Administrator may, in its discretion, temporarily prohibit or restrict withdrawals, loans, execution of, change to, or revocation of a compensation deferral election, change of investment designation of plan account balances, or tr ansfer of amounts in accounts from one investment fund to another investment fund, or other activity as the Plan Administrator deems appropriate; provided that any such temporary cessation or restriction of such activity shall be in compliance with applicable law.  In anticipation of the transfer of assets, prior to the Plan Merger Date, any amounts invested under the NATCO Plan through the Schwab Personal Choice Retirement Accounts shall be liquidated and invested in the JP Morgan Stable Value Fund under the NATCO Plan.  Such amounts shall then be transferred to the trustee of the Cameron Plan in cash at the same time and in the same manner as the other assets of the NATCO Plan that are being transferred in cash.  Upon receipt by the trustee of the Cameron Plan of the assets of the NATCO Plan, the transferred amounts, other than any assets transferred in kind, shall be temporarily invested in a short-term money market fund under the Cameron Plan.  As soon as administr atively feasible following the transfer, such amounts shall then be reinvested in accordance with the respective investment designations of each NATCO Participant under the Cameron Plan as in effect as of the date such reinvestment is made; provided, however, that such amounts attributable to accounts of NATCO Participants who do not have an investment designation in effect under the Cameron Plan as of the date of such reinvestment shall be reinvested in funds available under the Cameron Plan (other than the Company Stock Fund) in accordance with the percentages that are then applicable under the Medium-term Asset Allocation Model under the Cameron Plan.  Transferred amounts shall remain invested as described in the preceding sentence until the NATCO Participants make new investment designations with respect to such amounts in accordance with the provisions of the Cameron Plan as in effect on the date of such investment designations.

4.           Amounts credited to NATCO Participants’ accounts under the NATCO Plan shall be credited to corresponding accounts under the Cameron Plan as follows:

(i) Amounts, if any, credited to a NATCO Participant’s “Before-Tax Account” under the NATCO Plan shall be credited to such participant’s “Basic Account” under the Cameron Plan;

(ii) Amounts, if any, credited to a NATCO Participant’s “Employer Matching Account” under the NATCO Plan shall be credited to such participant’s “Matching Account” under the Cameron Plan;

 (iii) Amounts, if any, credited to a NATCO Participant’s “Employer Discretionary Account” under the NATCO Plan shall be credited to such participant’s “Rollover/Transfer Account” under the Cameron Plan;

(iv) Amounts, if any, credited to a NATCO Participant’s “Employer Contribution Account” under the NATCO Plan shall be credited to such participant’s “Profit Sharing Account” under the Cameron Plan;

(v) Amounts, if any, credited to a NATCO Participant’s “Rollover Contribution Account” under the NATCO Plan shall be credited to such participant’s “Rollover/Transfer Account” under the Cameron Plan;

(vi) Amounts, if any, credited to a NATCO Participant’s “After-Tax Account” under the NATCO Plan shall be credited to such participant’s “Supplemental Account” under the Cameron Plan.

Subaccounts shall be created under the respective Cameron Plan accounts for the transferred amounts and earnings thereon (the “Grandfathered Subaccounts”) in order to preserve optional forms of benefit and rights in accordance with Paragraph 8.

5.           For purposes of determining the Vesting Service under the Cameron Plan of a NATCO Participant, (a) such NATCO Participant shall be credited with Vesting Service as of the Plan Merger Date with all Years of Service, if any, credited to him for vesting purposes under the NATCO Plan as of December 31, 2009, (b) for the period beginning January 1, 2010 and ending on December 31, 2010 (the “Computation Period”), such NATCO Participant shall receive credit equal to the greater of (i) the Period of Service that would be credited under the Cameron Plan for vesting purposes for such employee’s service during the Computation Period and (ii) the service taken into account for the 2010 Plan Year as of the Plan Merger Date under the method provided in the NATCO P lan for computing Years of Service for vesting purposes, and (c) for the period from and after January 1, 2011, such NATCO Participant shall receive credit based solely upon the provisions of the Cameron Plan for crediting Vesting Service.

6.           For purposes of determining the Participation Service under the Cameron Plan of a NATCO Participant who is a Part Time Employee or a Temporary Employee, a NATCO Participant will be credited with the number of one-year Periods of Service with which he was credited under the NATCO Plan as of the Plan Merger Date.  In addition, for any fractional year of service credited to him under the NATCO Plan as of the Plan Merger Date, a NATCO Participant will be credited with, in the computation period which includes the Plan Merger Date, 45 Hours of Service for each week or partial week of such fractional year of service.

7.           Immediately after the merger and transfer of assets described in Paragraphs 1 and 3 above, each NATCO Participant who becomes or continues to be a Member of the Cameron Plan shall, in the event the Cameron Plan is then terminated, be entitled to a benefit which is equal to or greater than the benefit to which such participant would have been entitled under the NATCO Plan and, if applicable, the Cameron Plan immediately prior to such transfer if the NATCO Plan and, if applicable, the Cameron Plan had then been terminated.  The provisions of the preceding sentence shall be construed under applicable federal regulations pursuant to Section 208 of the Employee Retirement Income Security Act of 1974, as amended, and Section 414(l) of the Internal Revenue Code of 1986, as amended (the “Code”).

8.           With respect to the Grandfathered Subaccounts of NATCO Participants, the Cameron Plan shall preserve all optional forms of benefit and rights required to be preserved pursuant to Section 411(d)(6) of the Code, and any Treasury regulations issued thereunder, as amended from time to time, including, but not limited to, the optional forms of benefit and rights described on Appendix A hereto.

9.           The loan procedures available to Members under Article IX of the Cameron Plan, shall be applicable to a NATCO Participant’s vested interest in his Separate Accounts under the Cameron Plan; provided, however, that any loan made to a NATCO Participant under the NATCO Plan before the Plan Merger Date shall be administered by the Plan Administrator in accordance with Article XII of the NATCO Plan and the loan policy adopted pursuant thereto.

11.           The beneficiary designations of each NATCO Participant in effect under the NATCO Plan on the Plan Merger Date shall remain in effect under the Cameron Plan unless and until such participant executes a new beneficiary designation in accordance with the provisions of the Cameron Plan; provided, however, that all account balances in the Cameron Plan from and after the Plan Merger Date (including amounts transferred from the NATCO Plan) shall be subject to any beneficiary designation executed under the Cameron Plan by a NATCO Participant who was also a Member of the Cameron Plan prior to the Plan Merger Date, regardless of whether such beneficiary designation was executed before the Plan Merger Date, unless and until such time as such NATCO Participant executes a new ben eficiary designation form under the Cameron Plan; and provided further, however, that if the preceding proviso applies to a NATCO Participant, any beneficiary designation executed by such participant under the NATCO Plan prior to the Plan Merger Date shall become null and void as of the Plan Merger Date.

12.           To the extent any forfeitures of Employer Contributions under the NATCO Plan exist as of the Plan Merger Date, such forfeitures shall be applied to offset Employer contribution obligations for NATCO Participants under the Cameron Plan.

13.           Each capitalized term used in this instrument shall have the meaning ascribed to such term under the NATCO Plan or the Cameron Plan, as applicable, unless otherwise defined herein.

14.           Except to the extent required under applicable law, the benefits and rights of any NATCO Participant who terminates employment prior to the Plan Merger Date shall be governed by the terms and provisions of the NATCO Plan as in effect on the date of such termination of employment.

15.           As to affected individuals, the Cameron Plan is hereby amended to reflect and incorporate the provisions of this instrument.  Any provision of the NATCO Plan or the Cameron Plan which is inconsistent with any provision of this instrument shall be considered to be and hereby is amended by this instrument.

EXECUTED this 4th day of March, 2010, effective for all purposes as provided above.

CAMERON INTERNATIONAL CORPORATION

By:____________/s/________________________________

Name: ________Joseph H. Mongrain____________________

Title:   ________Vice President, Human Resources__________

APPENDIX A

to

MERGER OF THE

NATCO GROUP

PROFIT SHARING AND SAVINGS PLAN

WITH AND INTO THE

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

This Appendix A shall apply to the Grandfathered Subaccounts of NATCO Participants in lieu of certain otherwise applicable provisions of the Cameron Plan.  To the extent the provisions of this Appendix A conflict with other provisions of the Cameron Plan, this Appendix A shall control with respect to the Grandfathered Subaccounts of NATCO Participants.

1.           Rollover/Transfer Account Withdrawals.  In addition to the withdrawal rights contained in Article VIII of the Cameron Plan, a NATCO Participant may withdraw at any time all or any part of the portion of his Grandfathered Subaccount under his Rollover/Transfer Account under the Cameron Plan that is attributable to amounts transferred from his Rollover Account under the NATCO Plan and earnings thereon.  However, notwithstanding anything to the contrary in the Cameron Plan, a NATCO Participant may withdraw the portion of his Grandfathered Subaccount under his Roller/Transfer Account under the Cameron Plan tha t is attributable to amounts transferred from his Employer Discretionary Account under the NATCO Plan, and earnings thereon, only pursuant to Section 8.2 of the Cameron Plan (Withdrawals After Age 59½) and may not withdraw such portion of his Grandfathered Subaccount pursuant to Section 8.1 of the Cameron Plan (Withdrawals Prior to Age 59½).

2.           Vesting of Profit Sharing Account.  Notwithstanding anything to the contrary in the Cameron Plan, a NATCO Participant shall have a vested interest in his Grandfathered Subaccount under his Profit Sharing Account under the Cameron Plan in accordance with the following schedule:

Years of Vesting Service	Vested Percentage
Less than 2 years	0%
2 years	50%
3 years or more	100%

EX-10.50

Exhibit 10.50

INDEMNIFICATION AND WAIVER AGREEMENT

THIS INDEMNIFICATION AND WAIVER AGREEMENT (the “Agreement”) is effective as of August 13, 2007, by and among Cameron International Corporation, a Delaware corporation (the “Company”), and __________________ (the “Indemnitee”). This Agreement supersedes any prior agreement between you and the Company regarding the subject matter hereof.

WHEREAS, the Indemnitee is serving the Company in a “Corporate Capacity,” as defined herein;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify persons serving it in a Corporate Capacity to the fullest extent permitted by applicable law so that they will serve or continue to serve in such status free from undue concern that they will not be so indemnified;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to waive potential and actual conflicts of interest, and any claims based thereon, that may arise as a result of persons serving in a Corporate Capacity so that they will serve or continue to serve in such status free from undue concern over such actual or potential conflicts or claims;

WHEREAS, the Indemnitee is willing to serve and continue to serve the Company in a Corporate Capacity on the condition that he be so indemnified and such conflicts and claims be waived; and

WHEREAS, to the extent permitted by law, this Agreement is a supplement to and in furtherance of the provisions of the Amended and Restated Certificate of Incorporation of the Company (the “Certificate”) and the provisions of the Bylaws of the Company (the “Bylaws”) or resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of the Indemnitee thereunder;

NOW THEREFORE, in consideration of the premises and the covenants contained herein, the Company and the Indemnitee do hereby covenant and agree as follows:

Section 1.Services by the Indemnitee.  The Indemnitee agrees to continue to serve the Company in a Corporate Capacity.  Notwithstanding the foregoing, the Indemnitee may at any time and for any reason resign from any such position.

Section 2.Indemnification and Waiver - General.  The Company shall indemnify, and advance Expenses (as hereinafter defined) to, the Indemnitee, and does hereby waive potential and actual conflicts of interest and any claims based thereon that may arise as a result of Indemnitee serving in a Corporate Capacity, (i) as provided in this Agreement and (ii) to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may thereafter from time to time permit.  The rights of the Indemnitee provided under the preceding sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement.

Section 3.Advancement of Expenses.  The Company shall advance all reasonable Expenses incurred by or on behalf of the Indemnitee in connection with any Proceeding (as hereinafter defined), within 10 days after the receipt by the Company of a statement or statements from the Indemnitee requesting such advance or advances from time to time, whether prior to or after the final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the Expenses incurred by or on behalf of the Indemnitee.  The Indemnitee hereby expressly undertakes to repay such amounts advanced only if, and to the extent that, it shall ultimately be de termined by a final, non-appealable adjudication or arbitration decision that the Indemnitee is not entitled to be indemnified against such Expenses.  All amounts advanced to the Indemnitee by the Company pursuant to this Section 3 shall be without interest.  The Company shall make all advances pursuant to this Section 3 without regard to the financial ability of the Indemnitee to make repayment, without bond or other security and without regard to the prospect of whether the Indemnitee may ultimately be found to be entitled to indemnification under the provisions of this Agreement.  Any required reimbursement of Expenses by the Indemnitee shall be made by the Indemnitee to the Company within 10 days following the entry of the final, non-appealable adjudication or arbitration decision pursuant to which it is determined that the Indemnitee is not entit led to be indemnified against such Expenses.

Section 4.Proceedings Other Than Proceedings by or in the Right of the Company.  The Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Capacity, he is, or is threatened to be made, a party to or participant in any threatened, pending or completed Proceeding, other than a Proceeding by or in the right of the Company.  Pursuant to this Section 4, the Company shall indemnify the Indemnitee against Expenses, judgments, penalties, fines and amounts paid in settlemen t (as and to the extent permitted hereunder) actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, or in or not opposed to the best interests of another enterprise for which he is serving in a Corporate Capacity, and, with respect to any criminal Proceeding, if he also had no reasonable cause to believe his conduct was unlawful.

Section 5.Proceedings by or in the Right of the Company.  The Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Capacity, he is, or is threatened to be made, a party to or participant in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor.  Pursuant to this Section 5, the Company shall indemnify the Indemnitee against Expenses actually and reasonably incurred by him or on his behalf in con nection with such Proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to the best interests of the Company, or in or not opposed to the best interests of another enterprise for which he is serving in a Corporate Capacity.  Notwithstanding the foregoing, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which the Indemnitee shall have been adjudged to be liable to the Company or if applicable law prohibits such indemnification; provided, however, that if applicable law so permits, indemnification against Expenses shall nevertheless be made by the Company in such event if and to the extent that the court in which such Proceeding shall have been brought or is pending, shall so determine.

Section 6.   Indemnification for Expenses of a Party Who is Wholly or Partly Successful.

(a)           Notwithstanding any provision herein to the contrary, and in addition to the Indemnitee’s rights under Section 3, 4 and 5 hereof, to the extent that the Indemnitee is, by reason of his Corporate Capacity, a party to and is successful, on the merits or otherwise, in any Proceeding, the Company shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.  If the Indemnitee is not wholly successful in defense of any Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, t he Company shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each such claim, issue or matter as to which the Indemnitee is successful, on the merits or otherwise.  For purposes of this Section 6(a), the term “successful, on the merits or otherwise,” shall include, but shall not be limited to, (i) the termination of any claim, issue or matter in a Proceeding by withdrawal or dismissal, with or without prejudice, (ii) termination of any claim, issue or matter in a Proceeding by any other means without any express finding of liability or guilt against the Indemnitee, with or without prejudice, (iii) the expiration of 120 days after the making of a claim or threat of a Proceeding without the institution of the same and without any promise or payment made to induce a settlement or (iv) the settlement of any claim, issue or matter in a Proceeding purs uant to which the Indemnitee pays less than $200,000.  The provisions of this Section 6(a) are subject to Section 6(b) below.

(b)           In no event shall the Indemnitee be entitled to indemnification under Section 6(a) above with respect to a claim, issue or matter to the extent applicable law prohibits such indemnification.

Section 7.Indemnification for Expenses as a Witness.  Notwithstanding any provisions herein to the contrary, to the extent that the Indemnitee is, by reason of his Corporate Capacity, a witness in any Proceeding, the Company shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection therewith.

Section 8.Procedure for Determination of Entitlement to Indemnification.

(a)To obtain indemnification under this Agreement, the Indemnitee shall submit to the Company a written request therefor, along with such documentation and information as is reasonably available to the Indemnitee and reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.  The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification.

(b)Upon written request by the Indemnitee for indemnification pursuant to the first sentence of Section 8(a) hereof, a determination, if required by applicable law, with respect to the Indemnitee’s entitlement thereto shall be made in the specific case: (i) by the Board by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined); or (ii) if a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel (as hereinafter defined), as selected pursuant to Section 8( d), in a written opinion to the Board (which opinion may be a “more likely than not” opinion), a copy of which shall be delivered to the Indemnitee.  If it is so determined that the Indemnitee is entitled to indemnification, the Company shall make payment to the Indemnitee within 10 days after such determination.  The Indemnitee shall cooperate with the Person or Persons making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such Person or Persons upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination.  Subject to the provisions of Section 10 hereof, any costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by the Indemnite e in so cooperating with the Person or Persons making such determination shall be borne by the Company, and the Company hereby agrees to indemnify and hold the Indemnitee harmless therefrom.

(c)Notwithstanding the foregoing, if a Change of Control has occurred, the Indemnitee may require a determination with respect to the Indemnitee’s entitlement to indemnification to be made by Independent Counsel, as selected pursuant to Section 8(d), in a written opinion to the Board (which opinion may be a “more likely than not” opinion), a copy of which shall be delivered to the Indemnitee.

(d)In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) or (c) hereof, the Independent Counsel shall be selected as provided in this Section 8(d).  If a Change of Control shall not have occurred, the Independent Counsel shall be selected by the Board (including a vote of a majority of the Disinterested Directors if obtainable), and the Company shall give written notice to the Indemnitee advising him of the identity of the Independent Counsel so selected.  ; If a Change of Control shall have occurred, the Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and approved by the Company (which approval shall not be unreasonably withheld).  If (i) an Independent Counsel is to make the determination of entitlement pursuant to Section 8(b) or (c) hereof, and (ii) within 20 days after submission by the Indemnitee of a written request for indemnification pursuant to Section 8(a) hereof, no Independent Counsel shall have been selected, either the Company or the Indemnitee may petition the appropriate court of the State (as hereafter defined) or other court of competent jurisdiction for the appointment as Independent Coun sel of a Person selected by such court or by such other Person as such court shall designate.  The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 8(b) or (c) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 8(d), regardless of the manner in which such Independent Counsel was selected or appointed.  Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 10(a)(iv) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of pr ofessional conduct then prevailing).

Section 9.   Presumptions and Effect of Certain Proceedings; Construction of Certain Phrases.

(a)In making a determination with respect to whether the Indemnitee is entitled to indemnification hereunder, the Reviewing Party making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement if the Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of this Agreement, and anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.

(b)Subject to the terms of Section 16 below, the termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company, or in the best interests of another enterprise for which he is or was serving in a Corporate Capacity, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause to believe that his conduct was unlawful.

(c)For purposes of any determination of the Indemnitee’s entitlement to indemnification or to a waiver of conflict under this Agreement, the Indemnitee shall be deemed to have acted in good faith and in a manner he reasonably believe to be in or not opposed to the best interests of the Company, or in the best interests of another enterprise for which he is or was serving in a Corporate Capacity, or, with respect to a criminal Proceeding, to have also had no reasonable cause to believe his conduct was unlawful, if the Indemnitee’s action is based on the records or books of account of the Company or another enterprise, including financial statements, or on information supplied to the Indemnitee by the officers of the Compa ny or another enterprise in the course of their duties, or on the advice of legal or financial counsel for the Company or the Board (or any committee thereof) or for another enterprise for which the Indemnitee is or was serving in a Corporate Capacity or its board of directors (or any committee thereof), or on information or records given or reports made by an independent certified public accountant or by an appraiser or other expert selected by the Company or the Board (or any committee thereof) or by another enterprise or its board of directors (or any committee thereof), or if the Indemnitee acts in compliance with any obligations which may apply to him as a trustee if such appointment is in a Corporate Capacity.  The provisions of this Section 9(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.  In addition, the knowledge and/or actions, or failure to act, of any other director, trustee, partner, managing member, fiduciary, officer, agent or employee of the Company shall not be imputed to the Indemnitee for purposes of determining the right to indemnification under this Agreement.  Whether or not the foregoing provisions of this Section 9(c) are satisfied, it shall in any event be presumed that the Indemnitee has acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, or in the best interests of another enterprise for which he is serving in a Corporate Capacity, and, with respect to a criminal Proceeding, that he also had no reasonable cause to believe his conduct was unlawful.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evide nce.

(d)If an Indemnitee has acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan and has not materially breached his duties to the Company beyond the extent to which his conflicting interest or duty in relation to the employee benefit plan meant that he was legally obligated him to do so, he shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as used in this Agreement.

(e)For purposes of this Agreement, references to “fines” shall include any excise taxes assessed on the Indemnitee with respect to an employee benefit plan.

Section 10.Remedies of the Indemnitee.

(a)In the event that (i) a determination is made pursuant to Section 8 of this Agreement that the Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 3 of this Agreement, (iii) the determination of entitlement to indemnification is to be made by the Board pursuant to Section 8(b) of this Agreement and such determination shall not have been made and delivered to the Indemnitee in writing within twenty (20) days after receipt by the Company of th e request for indemnification, (iv) the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) or (c) of this Agreement and such determination shall not have been made in a written opinion to the Board and a copy delivered to the Indemnitee within forty-five (45) days after receipt by the Company of the request for indemnification, (v) payment of indemnification is not made pursuant to Section 6 of this Agreement within 10 days after receipt by the Company of a written request therefor or (vi) payment of indemnification is not made within 10 days after a determination has been made that the Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 8 or 9 of this Agreement, the Indemnitee shall be entitled to an adjudication in an appropriate court of the State of his entitlement to such indemnification or advancement of Expenses.  Alternatively, the Indemnitee, at his sole option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association.  The Indemnitee shall commence such Proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which the Indemnitee first has the right to commence such Proceeding pursuant to this Section 10(a); provided, however, that the foregoing clause shall not apply in respect of a Proceeding brought by the Indemnitee to enforce h is rights under Section 5 of this Agreement.

(b)In the event that a determination is made pursuant to Section 8 of this Agreement that the Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 10 shall be conducted in all respects as a de novo trial or a de novo arbitration (as applicable) on the merits, and the Indemnitee shall not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 10, the Company shall have the burden of proving that the Indemnitee is not entitled to indemnification, and the Company shall be precluded from referring to or offering into evidence a determination made pursuant to Section 8 of this Agreement that is adverse to the Indemnitee’s right to indemnification.  If the Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 10, the Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 7 until a final determination is made with respect to the Indemnitee’s entitlement to indemnification (as to which rights of appeal have been exhausted or lapsed).

(c)If a determination is made or deemed to have been made pursuant to Section 8 or 9 of this Agreement that the Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent (i) a misstatement by the Indemnitee of a material fact, or an omission by the Indemnitee of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohib ition of such indemnification under applicable law.

(d)The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 10 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement.

(e)In the event that the Indemnitee, pursuant to this Section 10, seeks a judicial adjudication or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, the Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration, unless the court or arbitrator determines that each of the Indemnitee’s claims in such Proceeding were made in bad faith or were frivolous.  In the event that a Proceeding is commenced by or in the right of the Company against the Indemni tee to enforce or interpret any of the terms of this Agreement, the Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all Expenses actually and reasonably incurred by him in such Proceeding (including with respect to any counter-claims or cross-claims made by the Indemnitee against the Company in such Proceeding), unless the court or arbitrator determines that each of the Indemnitee’s material defenses in such Proceeding were made in bad faith or were frivolous.

(f)Any judicial adjudication or arbitration determined under this Section 10 shall be final and binding on the parties.

Section 11.Defense of Certain Proceedings.  In the event the Company shall be obligated under this Agreement to pay the Expenses of any Proceeding against the Indemnitee in which the Company is a co-defendant with the Indemnitee, the Company shall be entitled to assume the defense of such Proceeding, with counsel approved by the Indemnitee, which approval shall not be unreasonably withheld, upon the delivery to the Indemnitee of written notice of its election to do so.  After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Indemnitee shall nevertheless be entitled to employ or continu e to employ his own counsel in such Proceeding.  Employment of such counsel by the Indemnitee shall be at the cost and expense of the Company unless and until the Company shall have demonstrated to the reasonable satisfaction of the Indemnitee and the Indemnitee’s counsel that there is complete identity of issues and defenses and no conflict of interest between the Company and the Indemnitee in such Proceeding, after which time further employment of such counsel by the Indemnitee shall be at the cost and expense of the Indemnitee.  In all events, if the Company shall not, in fact, have timely employed counsel to assume the defense of such Proceeding, then the fees and Expenses of the Indemnitee’s counsel shall be at the cost and expense of the Company.

Section 12.Exception to Right of Indemnification or Advancement of Expenses.  Notwithstanding any other provision of this Agreement, the Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to any Proceeding, or any claim therein, brought or made by the Indemnitee against:

(a)the Company, except for (i) any claim or Proceeding in respect of this Agreement and/or the Indemnitee’s rights hereunder, (ii) any claim or Proceeding to establish or enforce a right to indemnification under any statute or law and (iii) any counter-claim or cross-claim brought or made by him against the Company in any Proceeding brought by or in the right of the Company against him; or

(b)any other Person, except for Proceedings or claims approved by the Board.

Section 13.Contribution.

(a)If, with respect to any Proceeding, the indemnification provided for in this Agreement is held by a court of competent jurisdiction to be unavailable to the Indemnitee for any reason other than that the Indemnitee did not act in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to a criminal Proceeding, that the Indemnitee had reasonable cause to believe his conduct was unlawful, the Company shall contribute to the amount of Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein in such proportion as is appropriate to reflect the relative benefits received by the Indemnitee and the relative fault of the Indemnitee versus the other defendants or participants in connection with the action or inaction which resulted in such Expenses, judgments, penalties, fines and amounts paid in settlement, as well as any other relevant equitable considerations.

(b)The Company and the Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 13 were determined by pro rata or per capita allocation or by any other method of allocation which does not take into account the equitable considerations referred to in Section 13(a) above.

(c)No Person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act of 1933) shall be entitled to contribution from any Person who was not found guilty of such fraudulent misrepresentation.

Section 14.Officer and Director Liability Insurance.

(a)The Company shall use all commercially reasonable efforts to obtain and maintain in effect during the entire period for which the Company is obligated to indemnify the Indemnitee under this Agreement, one or more policies of insurance with reputable insurance companies to provide the directors and officers of the Company with coverage for losses from wrongful acts and omissions and to ensure the Company’s performance of its indemnification obligations under this Agreement.  In all such insurance policies, the Indemnitee shall be named as an insured in such a manner as to provide the Indemnitee with the same rights and benefits as are accorded to the most favorably insured of the Company’s directors and offic ers.  Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain such insurance if the Company determines in good faith that the Indemnitee is covered by such insurance maintained by a subsidiary or parent of the Company.

(b)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors or officers of any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise which the Indemnitee serves at the request of the Company, the Indemnitee shall be named as an insured under and shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for the most favorably insured director or officer under such policy or policies.

(c)In the event that the Company is a named insured under any policy or policies of insurance referenced in either Section 14(a) or (b) above, the Company hereby covenants and agrees that it will not settle any claims or Proceedings that may be covered by such policy or policies of insurance and in which the Indemnitee has or may incur Expenses, judgments, penalties, fines or amounts paid in settlement without the prior written consent of the Indemnitee.

Section 15.Security.  Upon reasonable request by the Indemnitee, the Company shall provide security to the Indemnitee for the Company’s obligations hereunder through an irrevocable bank letter of credit, funded trust or other similar collateral.  Any such security, once provided to the Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee, which consent may be granted or withheld at the Indemnitee’s sole and absolute discretion.

Section 16.Settlement of Claims.  The Company shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without the Company’s written consent, which consent shall not be unreasonably withheld.

Section 17.Waiver of Conflict.  The Company hereby agrees to, and hereby does, waive any potential or actual conflict of interest or duty, and any claims based thereon, that may arise as a result of the Indemnitee’s service in a Corporate Capacity so long as: the Indemnitee shall have acted in good faith, as provided for in Section 9(c).

Section 18.Duration of Agreement.  This Agreement shall be unaffected by the termination of the Corporate Capacity of the Indemnitee and shall continue for so long as the Indemnitee may have any liability or potential liability by virtue of his Corporate Capacity, including, without limitation, the final termination of all pending Proceedings in respect of which the Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding commenced by the Indemnitee pursuant to Section 10 of this Agreement relating thereto, whether or not he is acting or serving in such capacity at the time any liability or Expense is incurred for which indemnification can be provided under this Agreement.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

Section 19.Remedies of the Company.  The Company hereby covenants and agrees to submit any and all disputes relating to this Agreement that the parties are unable to resolve between themselves to binding arbitration pursuant to the rules of the American Arbitration Association and waives all rights to judicial adjudication of any matter or dispute relating to this Agreement except where judicial adjudication is requested or required by the Indemnitee.

Section 20.Covenant Not to Sue, Limitation of Actions and Release of Claims.  No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company (or any of its subsidiaries) against the Indemnitee, his spouse, heirs, executors, personal representatives or administrators after the expiration of two (2) years from the date on which the Corporate Capacity of the Indemnitee is terminated (for any reason), and any claim or cause of action of the Company (or any of its subsidiaries) shall be extinguished and deemed released unless asserted by filing of a legal action within such two-year period; provided, however, that the foregoing shall not apply to any action or cause of action brought or asserted by the Company pursuant to or in respect of this Agreement and shall not constitute a waiver or release of any of the Company’s rights under this Agreement.

Section 21.Limitation of Liability.  Notwithstanding any other provision of this Agreement, neither party shall have any liability to the other for, and neither party shall be entitled to recover from the other, any consequential, special, punitive, multiple or exemplary damages as a result of a breach of this Agreement.

Section 22.Subrogation.  In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

Section 23.No Multiple Recovery.  The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 24.Definitions.  For purposes of this Agreement:

(a)“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person.  For purposes hereof, “control” (including, with correlative meaning, the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such Person, by contract or otherwise.

(b)“Change of Control” shall mean a change in control of the Company occurring after the date of this Agreement of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement.  Without limiting the foregoing, such a Change in Control shall be deemed to have occurred if, after the date of this Agreement, (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “b eneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board in office immediately prior to such person attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (including for this purpose any new director whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board; or (iv) approval by the shareholders of the Company of a liquidation or dissolution of the Company.

(c)“Company” means Cameron International Corporation, a Delaware corporation.

(d)“Corporate Capacity” describes the status of an individual who is or was an officer or director of the Company, or is or was serving at the request of the Company as an officer, director, trustee, employee or agent of another entity affiliated with or otherwise in existence for the benefit of the Company, its affiliates and/or its or their employees, including but not limited to a corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise. “Serving at the request of the Company” shall include, but shall not be limited to, any service as a director, officer, employee or agent of the Com pany or an Affiliate which imposes duties on, or involves services by, the Indemnitee with respect to an Affiliate, or an employee benefit plan, its participants or its beneficiaries, and/or any appointment at the Company's request as a director, officer, employee, or agent of an Affiliate or trustee of such a plan.

(e) “Disinterested Director” means a director of the Company who is not and was not a party to, or otherwise involved in, the Proceeding for which indemnification is sought by the Indemnitee.

(f)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(g)“Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating or being or preparing to be a witness in a Proceeding.

(h)“Independent Counsel” means a law firm or a member of a law firm that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company or the Indemnitee in any matter material to either such party or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any Person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement.

(i)“Person” means a natural person, firm, partnership, joint venture, association, corporation, company, limited liability company, trust, business trust, estate or other entity.

(j)“Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding whether civil, criminal, administrative or investigative.

(k)“State” means the State of Texas.

Section 25.Non-Exclusivity.  The Indemnitee’s rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Certificate, the Bylaws, any agreement, a vote of stockholders, a resolution of directors, constitutional documents of any employee benefit plan or otherwise.

Section 26.Remedies Not Exclusive.  No right or remedy herein conferred upon the Indemnitee is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative of and in addition to the rights and remedies given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy of the Indemnitee hereunder or otherwise shall not be deemed an election of remedies on the part of the Indemnitee and shall not prevent the concurrent assertion or employment of any other right or remedy by the Indemnitee.

Section 27.Changes in Law.  In the event that a change in applicable law after the date of this Agreement, whether by statute, rule or judicial decision, expands or otherwise increases the right or ability of a Delaware corporation to indemnify a member of its board of directors or an officer, the Indemnitee shall, by this Agreement, enjoy the greater benefits so afforded by such change.  In the event that a change in applicable law after the date of this Agreement, whether by statute, rule or judicial decision, narrows or otherwise reduces the right or ability of a Delaware corporation to indemnify a member of its board of directors or an officer, such cha nge shall have no effect on this Agreement or any of the Indemnitee’s rights hereunder, except and only to the extent required by law.

Section 28.Interpretation of Agreement.  The Company and the Indemnitee acknowledge and agree that it is their intention that this Agreement be interpreted and enforced so as to provide indemnification to the Indemnitee to the fullest extent now or hereafter permitted by law.

Section 29.Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; (b) such provision or provisions will be deemed reformed to the extent necessary to conform to applicable law and to give maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the p rovisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision or provisions held invalid, illegal or unenforceable.

Section 30.Governing Law; Jurisdiction and Venue; Specific Performance.

(a)The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

(b)ANY “ACTION OR PROCEEDING” (AS SUCH TERM IS DEFINED BELOW) ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE FILED IN AND LITIGATED OR ARBITRATED SOLELY BEFORE THE COURTS LOCATED IN OR ARBITRATORS SITTING IN HARRIS COUNTY IN THE STATE OF TEXAS, AND EACH PARTY TO THIS AGREEMENT:  (i) GENERALLY AND UNCONDITIONALLY ACCEPTS THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND ARBITRATORS AND VENUE THEREIN, AND WAIVES TO THE FULLEST EXTENT PROVIDED BY LAW ANY DEFENSE OR OBJECTION TO SUCH JURISDICTION AND VENUE BASED UPON THE DOCTRINE OF “FORUM NON CONVENIENS;” AND (ii) GENERALLY AND UNCONDITIONALLY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEED ING BY DELIVERY OF CERTIFIED OR REGISTERED MAILING OF THE SUMMONS AND COMPLAINT IN ACCORDANCE WITH THE NOTICE PROVISIONS OF THIS AGREEMENT.  FOR PURPOSES OF THIS SECTION, THE TERM “ACTION OR PROCEEDING” IS DEFINED AS ANY AND ALL CLAIMS, SUITS, ACTIONS, HEARINGS, ARBITRATIONS OR OTHER SIMILAR PROCEEDINGS, INCLUDING APPEALS AND PETITIONS THEREFROM, WHETHER FORMAL OR INFORMAL, GOVERNMENTAL OR NON-GOVERNMENTAL, OR CIVIL OR CRIMINAL.  THE FOREGOING CONSENT TO JURISDICTION SHALL NOT CONSTITUTE GENERAL CONSENT TO SERVICE OF PROCESS IN THE STATE FOR ANY PURPOSE EXCEPT AS PROVIDED ABOVE, AND SHALL NOT BE DEEMED TO CONFER RIGHTS ON ANY PERSON OTHER THAN THE PARTIES TO THIS AGREEMENT.

(c)The Company acknowledges that the Indemnitee may, as a result of the Company’s breach of its covenants and obligations under this Agreement, sustain immediate and long-term substantial and irreparable injury and damage which cannot be reasonably or adequately compensated by damages at law.  Consequently, the Company agrees that the Indemnitee shall be entitled, in the event of the Company’s breach or threatened breach of its covenants and obligations hereunder, to obtain equitable relief from a court of competent jurisdiction, including enforcement of each provision of this Agreement by specific performance and/or temporary, preliminary and/or permanent injunctions enforcing any of the Indemnitee’s rig hts, requiring performance by the Company, or enjoining any breach by the Company, all without proof of any actual damages that have been or may be caused to the Indemnitee by such breach or threatened breach and without the posting of bond or other security in connection therewith.  The Company waives the claim or defense therein that the Indemnitee has an adequate remedy at law, and the Company shall not allege or otherwise assert the legal position that any such remedy at law exists.  The Company agrees and acknowledges that:  (i) the terms of this Section 30(c) are fair, reasonable and necessary to protect the legitimate interests of the Indemnitee; (ii) this waiver is a material inducement to the Indemnitee to enter into the transactions contemplated hereby; and (iii) the Indemnitee relied upon this waiver in entering into this Agreement and will continue to rely on this waiver in its future dealings with the Company.  The Company represents and warrants that it has reviewed this provision with its legal counsel, and that it has knowingly and voluntarily waived its rights referenced in this Section 30 following consultation with such legal counsel.

Section 31.Nondisclosure of Payments.  Except as expressly required by Federal securities laws, the Company shall not disclose any payments under this Agreement without the prior written consent of the Indemnitee.  Any payments to the Indemnitee that must be disclosed shall, unless otherwise required by law, be described only in the Company proxy or information statements relating to special and/or annual meetings of the Company’s shareholders, and the Company shall afford the Indemnitee a reasonable opportunity to review all such disclosures and, if requested by the Indemnitee, to explain in such statement any mitigating circumstances regarding the e vents reported.

Section 32.Notice by the Indemnitee.  The Indemnitee agrees to promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder.

Section 33.Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and received for by the party to whom said notice or other communication shall have been directed, or (b) mailed by U.S. certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:  (i) If to the Company: Cameron International Corporation, 1333 West Loop South, Suite 1700, Houston, Texas 77027, Attention:  Chief Executive Officer; and (ii) if to any other party hereto, including the Indemnitee, to the address of such party set forth on the signature page hereof; or to such other address as may have been furnished by any party to the other(s).

Section 34.Modification and Waiver.  No supplement, modification or amendment of this Agreement or any provision hereof shall limit or restrict in any way any right of the Indemnitee under this Agreement with respect to any action taken or omitted by the Indemnitee in his Corporate Capacity prior to such supplement, modification or amendment.  No supplement, modification or amendment of this Agreement or any provision hereof shall be binding unless executed in writing by both of the Company and the Indemnitee.  No waiver of any provision of this Agreement shall be deemed or shall constitute a wavier of any other provision hereof (whether or not si milar) nor shall such waiver constitute a continuing waiver.

Section 35.Headings.  The headings of the Sections or paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 36.Gender.  Use of the masculine pronoun in this Agreement shall be deemed to include usage of the feminine pronoun where appropriate.

Section 37.Identical Counterparts.  This Agreement may be executed in one or more counterparts (whether by original, photocopy or facsimile signature), each of which shall for all purposes be deemed to be an original, but all of which together shall constitute one and the same Agreement.  Only one such counterpart executed by the party against whom enforcement is sought must be produced to evidence the existence of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.

 INDEMNITEE                                                                            CAMERON INTERNATIONAL  CORPORATION

Name:	Name:     Sheldon R. Erikson
Title:	Title:       Chairman and Chief Executive Officer
Address: 1333 West Loop South,                  Suite 1700                  Houston, Texas 77027	Address:  1333 West Loop South,                    Suite 1700                    Houston, Texas 77027

EX-10.51

Exhibit 10.51

INDEMNIFICATION AND WAIVER AGREEMENT

THIS INDEMNIFICATION AND WAIVER AGREEMENT (the “Agreement”) is effective as of January 1, 2011, by and among Cameron International Corporation, a Delaware corporation (the “Company”), and __________________(the “Indemnitee”). This Agreement supersedes any prior agreement between you and any Cameron entity regarding the subject matter hereof.

WHEREAS, the Indemnitee is serving the Company in a “Corporate Capacity,” as defined herein;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify persons serving it in a Corporate Capacity to the fullest extent permitted by applicable law so that they will serve or continue to serve in such status free from undue concern that they will not be so indemnified;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to waive potential and actual conflicts of interest, and any claims based thereon that may arise as a result of persons serving in a Corporate Capacity so that they will serve or continue to serve in such status free from undue concern over such actual or potential conflicts or claims; and

WHEREAS, the Indemnitee is willing to serve and continue to serve the Company in a Corporate Capacity on the condition that s/he be so indemnified and such conflicts and claims be waived;

NOW THEREFORE, in consideration of the premises and the covenants contained herein, the Company and the Indemnitee do hereby covenant and agree as follows:

Section 1.                      Services by the Indemnitee.  The Indemnitee agrees to serve the Company in a Corporate Capacity.  Notwithstanding the foregoing, the Indemnitee may at any time and for any reason resign from any such position.

Section 2.                      Indemnity.  (a)  Subject to the terms hereof, the Company shall indemnify  and advance expenses, as provided for below, to Indemnitee should the Indemnitee be made party, or threatened to be made a party to, or become involved in any threatened, pending or completed action, suit, arbitration, alternative dispute resolution mechanism, investigation, administrative hearing or other proceeding, whether civil, criminal, administrative or investigative, or any appeal thereof or any inquiry or investigation that could lead thereto ( hereinafter “Proceeding”), by reason of the fact that s/he served or is serving in a Corporate Capacity (including in such capacity prior to the date hereof), to the extent such Proceeding relates to such service, to the fullest extent permitted by the applicable law in effect on the date hereof, and to any greater extent as applicable law may thereafter from time to time permit, against judgments, penalties (including excise and similar taxes), fines, settlements and reasonable expenses (including attorneys’ and experts’ fees) actually incurred by Indemnitee in connection with such Proceeding, and this indemnification obligation shall continue even after Indemnitee ceases to serve in a Corporate Capacity.

(b)           Notwithstanding the foregoing, the Indemnitee shall be entitled to no indemnification in the event the Indemnitee did not act in good faith and in a manner s/he reasonably believed to be in, or not opposed to, the best interests of the Company, or in, or not opposed to, the best interests of another enterprise or group for which s/he is or was serving in a Corporate Capacity or in the event the Proceeding involves acts or omissions which constitute gross negligence or willful misconduct on the part of Indemnitee, and with respect to any criminal proceeding, if s/he also had no reasonable cause to believe her/his conduct was unlawful.

(c)           “Corporate Capacity” describes the status of an individual who is or was an officer or director of the Company, or is or was “serving at the request of” the Company or any of its affiliates as an officer, director, trustee, employee or agent of another entity affiliated with or otherwise in existence for the benefit of the Company, its affiliates and/or its or their employees, including but not limited to a corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise.  “Serving at the request of” the Company or any of its affiliates shall include, but shall not be limited to, any service as a director, officer, employee or agent of the Company or an affiliate which imposes duties on, or involves services by, the Indemnitee with respect to an affiliate, or an employee benefit plan, its participants or its beneficiaries, and/or any appointment at the Company’s request as a director, officer, employee, or agent of an affiliate or trustee of such a plan.

(d)           The rights granted pursuant hereto shall be deemed contract rights and no amendment or modification or other change to this Agreement shall have any effect unless agreed to in writing by Indemnitee.

(e)   It is expressly acknowledged that this indemnification could involve indemnification for negligence or strict liability.

Section 3.                      Waiver of Conflict.  The Company does hereby waive any potential or actual conflict of interest or duty, and any claims based thereon that may arise as a result of Indemnitee’s service in a Corporate Capacity so long as the Indemnitee shall not have acted in such a way as would preclude the right to indemnification pursuant to the terms of Section 2(b), above.

Section 4.                      Advancement of Expenses.  (a) The right to indemnification conferred hereby shall include a right to be paid or reimbursed by the Company for any and all reasonable expenses as they are incurred by Indemnitee who has been, or is threatened, to be made a named defendant or respondent in a Proceeding in advance of the final disposition of the Proceeding and without any determination as to Indemnitee’s ultimate entitlement to indemnification.  Any such payment or reimbursement shall be made within ten (10) days after receipt by the C ompany of a statement for Indemnity requesting such advance which reasonably evidences the expense incurred by or on behalf of the Indemnity.

(b)           Notwithstanding the foregoing, the payment of such expenses incurred by Indemnitee in advance of final disposition of a Proceeding shall be made only upon deliveryto the Company of (i) a written affirmation by Indemnitee of her/his good faith belief that s/he has met the requirements necessary for indemnification hereunder, and (ii) a written undertaking to repay such amounts advanced if and to the extent that it shall ultimately be determined by a final disposition that the Indemnitee is not entitled to be indemnified for such expenses.  Any such required reimbursement shall be made by the Indemnitee to the Company within thirty (30) days following the entry of the final, non-appealable adjudica tion or arbitration decision pursuant to which it was determined that the Indemnitee is not entitled to be indemnified against such expenses.

(c)           All amounts advanced to Indemnity by the Company pursuant to this Section 3 shall be without interest.

Section 5.                      Indemnification for Expenses as a Witness.  Notwithstanding any provisions herein to the contrary, to the extent that the Indemnitee is, by reason of her/his Corporate Capacity, a witness in any Proceeding, the Company shall indemnify the Indemnitee against all expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection therewith.

Section 6.                      Defense of Certain Proceedings.  In the event the Company shall be obligated under this Agreement to pay the expenses of any Proceeding against the Indemnitee in which the Company is a co-defendant with the Indemnitee, the Company shall be entitled to assume the defense of such Proceeding upon the delivery to the Indemnitee of written notice of its election to do so.

Section 7.                      Exception to Right of Indemnification or Advancement of Expenses.  Notwithstanding any other provision of this Agreement, the Indemnitee shall not be entitled to indemnification or advancement of expenses under this Agreement with respect to any Proceeding, or any claim therein, brought or made by the Indemnitee against:

(i)   the Company or any of its affiliates, except for (x) any claim or proceeding in respect of this Agreement and/or the Indemnitee’s rights hereunder; (y) any claim or proceeding to establish or enforce a right to indemnification under any statute of law; and (z) any counter-claim or cross-claim brought or made by her or him against the Company or any of its affiliates in any proceeding brought by or in the right of the Company or any of its affiliates against her or him; or

(ii)   Any other person except for Proceedings or claims approved by the Company.

Section 8.                      Settlement of Claims.  The Company shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding affected without the Company’s written consent, which consent shall not be unreasonably withheld.

Section 9.                      Limitation of Liability.  Notwithstanding any other provision of this Agreement, neither party shall have any liability to the other for, and neither party shall be entitled to recover from the other, any consequential, special, punitive, multiple or exemplary damages as a result of a breach of this Agreement.

Section 10.                      Subrogation.  In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

Section 11.                      No Multiple Recovery.  The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder, and shall be entitled to repayment of any amount advanced hereunder, if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 12.                      Non-Exclusivity.  The Indemnitee’s rights of indemnification and to receive advancement of expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Company’s Certificate, or Bylaws, or any agreement, a vote of stockholders, a resolution of directors, constitutional documents of any employee benefit plan or otherwise.

Section 13.                      Remedies Not Exclusive.  No right or remedy herein conferred upon the Indemnitee is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative of and in addition to the rights and remedies given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy of the Indemnitee hereunder or otherwise shall not be deemed an election of remedies on the part of the Indemnitee and shall not prevent the concurrent assertion or employment of any other right or remedy by the Indemnitee.

Section 14.                      Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:  (i) the validity, legality and enforceability of the remaining provisions of this agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; (ii) such provision or provisions will be deemed reformed to the extent necessary to conform to applicab le law and to give maximum effect to the intent of the parties hereto; and (iii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision or provisions held invalid, illegal or unenforceable.

Section 15.                      Governing Law; Dispute Resolution.

(a)The parties hereto agree that this Agreement shall be governed by, and construed in accordance with, the internal laws of Texas, England, and Singapore without giving effect to any choice of law provision or rule that would cause the application of the laws of any other jurisdiction.

(b)The parties hereto further agree that any dispute between the parties arising out of or related to this Agreement shall be resolved by arbitration in Houston for employees in the U.S.; in London for employees in the Europe, Africa, Caspian, and Russia (EACR) region; or in Singapore for employees in the Asia Pacific and Middle East (APME) region pursuant to the rules chosen by the parties, and failing such choice, by the courts thereof.

Section 16.                      Notice of Service by the Indemnitee.  The Indemnitee agrees to promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or to include advancement of expense covered hereunder.

Section 17.                      Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and received for by the party to whom said notice or other communication shall have been directed, or (ii) delivered by a courier service receipt of which is evidenced by the signature of the receiving party, (iii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, in each case, at the address of such party set forth on the signature page hereof, or to such other address as may have been subsequently furnished by either party to the other.

Section 18.                      Modification and Waiver.  No supplement, modification or amendment of this Agreement or any provision hereof shall limit or restrict in any way any right of the Indemnitee under this Agreement with respect to any action taken or omitted by the Indemnitee in her/his Corporate Capacity prior to such supplement, modification or amendment. No supplement, modification or amendment of this Agreement or any provision hereof shall be binding unless executed in writing by both of the Company and the Indemnitee. No waiver of any provision of this Agreement shall b e deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 19.                      Headings.  The headings of the Sections or paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.

 Cameron International Corporation                                                                            INDEMNITEE

Name:      Jack B. Moore	Name:
Title:        President and CEO
Address:  1333 West Loop South                   Suite 1700                   Houston, Texas 77027                   United States	Address:__________________________                  __________________________                  __________________________                  __________________________

EX-10.52

Exhibit 10.52

June 16, 2009

Mr. H. Keith Jennings

1131 Bayou Island Drive

Houston, TX 77063

Dear Mr. Jennings,

Cameron International Corporation (the “Company”) considers the establishment and maintenance of a sound and vital management to be essential for the protection and enhancement of the best interests of the Company and its shareholders.  The Company recognizes that, as is the case with many publicly-held corporations, the possibility of a Change of Control1  may arise and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its shareholders.  Accordingly, the Board of Directors of the Company (the “Board”) has determined that appropriate steps should be taken to a ssure the Company of the continuation of your service and to reinforce and encourage the attention and dedication of members of the Company’s management to their assigned duties without distraction in circumstances arising from the possibility of a Change of Control. In particular the Board believes it important, should the Company or its shareholders receive a proposal for or notice of a Change of Control, or consider one itself, that you be able to assess and advise the Company whether such transaction would be or is in the best interests of the Company and its shareholders, and to take such other action regarding such transaction as the Board might determine to be appropriate, without being influenced by the uncertainties of your own situation.

In order to induce you to remain in the employ of the Company, this letter agreement (the “Agreement”), prepared pursuant to authority granted by the Board, sets forth the compensation and severance benefits which the Company agrees will be provided to you should your employment with the Company be terminated in connection with a Change of Control under the circumstances described below, as well as certain other benefits which will be made available to you should you be employed by the Company on the Effective Date of a Change of Control.

This Agreement shall remain in full force and effect for as long as you remain in your current position with the Company or any other position of equal or higher grade which has historically made its holder eligible for a Change of Control Agreement; provided, however, that this Agreement shall terminate and cease to be in full force and effect upon your giving notice of your intent to terminate your employment with the Company for any reason other than Good Reason, whether by Retirement, early retirement, or otherwise.  This Agreement supersedes any prior agreement between you and the Company regarding the subject matter hereof.

1Reference is made to Annex I hereto for definitions of certain terms used in this Agreement, and such definitions are incorporated herein by such reference with the same effect as if set forth herein.  Certain capitalized terms used in this Agreement in connection with the description of various Plans are defined in the respective Plans, but if any conflicts with a definition herein contained, the latter shall prevail.

1.Termination in Connection with a Change of Control.

(a)If there is a termination of your employment with the Company either by the Company without Cause or by you for Good Reason during the period between the Effective Date of a Change of Control and two years following the Effective Date (the “Effective Period”), and if such Effective Date occurs during the term of this Agreement, you shall be entitled to the following benefits, whether or not this Agreement has been cancelled prior to the time of your termination:

(i)all benefits conferred upon you by the Severance Package, and

(ii)in addition, all benefits payable under the provisions either of the Company’s employee and executive Plans in which you are a participant immediately prior to the Effective Date, or of those plans in existence at the time of the applicable Termination Date, whichever are more favorable to you, in accordance with the terms and conditions of such Plans or plans, such benefits to be paid under such Plans or plans and not under this Agreement.

(b)Notwithstanding the above, you shall not be entitled to any such benefits if your termination results from your death or Disability, unless your death or Disability occurs (i) during the Effective Period and (ii) with respect to the benefits conferred by the Severance Package only, after either it has been decided that you will be terminated without Cause during the Effective Period, or you have given notice of termination for Good Reason during the Effective Period.

(c)You shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment, nor shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by you as the result of your employment by another employer after the applicable Termination Date.

2.Procedures for Termination.

(a)If it is intended that your employment be terminated by you for Good Reason you shall transmit to the Company written notice setting forth the particulars upon which you base your determination that Good Reason exists and, only if the stated basis therefore is capable of being cured, requesting a cure within ten days. Failing such a cure, a “final separation” shall then occur, and if such stated basis is not capable of cure by the Company, “final separation” shall occur simultaneously with delivery of such notice.  For purposes of this Agreement, a “Termination Date” shall be deemed to have occurred upon the date of such “final separation”.

(b)If it is intended that your employment be terminated by the Company, whether with Cause or without Cause, a “Termination Date” shall be deemed to have occurred upon the 30th day following the date of your receipt of written notice from the Company of this determination, or upon the date specified in such notice, whichever is later.

3.LTIP Benefit Acceleration.  Immediately upon an applicable Termination Date, all contingent compensation rights issued to you under the LTIP Plan which are then (i) held by you, a member of your Immediate Family, or a partnership or limited liability company the partners or shareholders of which are you and members of your Immediate Family, and (ii) outstanding, shall become vested, exercisable, distributable and unrestricted (any contrary provision in the LTIP Plan notwithstanding), subject to the following provisions of this Section 3.  You shall have the right:

(a)To (i) exercise all or any portion of your options covered (including, at your sole election, any associated Tandem SAR) by the LTIP Plan and to have the underlying Shares issued to you and (ii) exercise all or any portion of any LTIP Plan Freestanding SAR held by you, to the extent that such SAR is not non-qualified deferred compensation under Code Section 409A.

(b)To (i) have issued to you on a non-forfeitable basis any or all Shares covered by Restricted Stock Awards held by you under the LTIP Plan and (ii) have issued to you any or all Performance Shares and/or Performance Units held by you in the LTIP Plan, and such issuance shall occur within 10 days of the Termination Date.

(c)With respect to all other contingent compensation rights to which you may be entitled under the LTIP Plan which are not non-qualified deferred compensation within the meaning of Code Section 409A, to obtain the full benefit of any such right or rights, in each case as though all applicable Performance Targets had been met or achieved at maximum levels for all Performance Periods (including those extending beyond the Effective Date), all other LTIP Plan contingencies had been satisfied in full at the Effective Date of the Change of Control, and the maximum possible benefits thereunder had been earned at the Effective Date of the Change of Control.

(d)If you are not a “Specified Employee” within the meaning of Code Section 409A, with respect to all other contingent compensation rights to which you may be entitled under the LTIP Plan which are non-qualified deferred compensation within the meaning of Code Section 409A, to receive all such rights and benefits, payable in accordance with the terms of the LTIP Plan without regard to any other vesting or performance requirements therein/payable on the Termination Date.  If you are a “Specified Employee” within the meaning of Code Section 409A as of your Termination Date, and any benefit or amoun t described in this Section 3 is non-qualified deferred compensation subject to Code Section 409A, then such amount shall, notwithstanding the provisions of this Section 3, be paid on the earlier to occur of (i) death or (ii) six months plus two days from your Termination Date.

4. 409A Tax Provision.  If any payment or benefit received or to be received by you under this Agreement is determined to be “deferred compensation” as that term is used in Code Section 409A and related Treasury Regulations and Department of the Treasury guidance thereunder, with the effect that you are liable for the payment of tax or interest imposed by reason of Code Section 409A (the “409A Tax”), the Company will pay you an additional cash payment equal to such tax and interest plus any federal, state and local income taxes, employment taxes and any additional taxes, interest and penalties applicable to the payment under this Section 5, payable not later than the end of the calendar year in which you remit, or the Company remits on your behalf, the 409A Tax.  If you become entitled to benefits under the Agreement by reason of separation from service, you agree to a delay in the payment of such amounts determined to be deferred compensation for a period of six months and two business days following your separation from service with the Company if the Company determines such delay is necessary to comply with Code Section 409A.  This Agreement is intended to comply with Code Section 409A and ambiguous provisions, if any, shall be construed in a manner that is compliant with or exempt from the application of Section 409A, as appropriate.  The parties agree to amend the provisions of this Agreement or any other compensation arrangement in any reasonable manner requested by the Executives or the Company to comply with Code Section 409A and related Treasury Regulations and Department of the Treasury guidance that would reduce or eliminate the 40 9A Tax.  This Agreement shall not be amended or termination in a manner that would cause the Agreement or any amounts payable under the Agreement to fail to comply with the requirements of Code Section 409A, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Agreement.  For purposes of Code Section 409A, each payment under this Agreement shall be deemed to be a separate payment.If any payment to you is delayed by reason of this Section 5, unless such payment is otherwise subject to adjustment to take into account earnings (or losses) attributable thereto during the period of delay, when such payment is made you will also receive from the Company interest on such payment, from the date the payment would otherwise have been made to the date the payment is made, at the Prime Rate of interest as reported in the Wall Street Journal, compounded monthly with such interest rate being adjusted each month to track such Prime Rate of interest, prospectively for the ensuing month.

5.Dispute Resolution.

(a)It is irrevocably agreed that if any dispute arises between us under this Agreement: (i) exclusive jurisdiction shall be in the lowest Texas state court of general jurisdiction sitting in Harris County, Texas; (ii) we are each at the time present in Texas for the purpose of conferring personal jurisdiction; (iii) any such action may be brought in such court, and any objection that the Company or you may now or hereafter have to the venue of such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court is waived, and we each agree not to plead or claim the same; (iv) service of process in any such proceeding or action may be effected by mailing a copy thereof by registered or c ertified mail, return receipt requested (or any substantially similar form of mail), postage prepaid, to such party at the address provided in Section 9 hereof; and (v) prior to any trial on the merits, we will submit to court supervised, non-binding mediation.

(b)Notwithstanding any contrary provision of Texas law, the Company shall have the burden of proof with respect to any of the following: (i) that Cause existed at the time any notice was given to you under Section 2; (ii) that Good Reason did not exist at the time notice was given to the Company under Section 2; and (iii) that a Change of Control has not occurred.

6.Successors; Binding Agreement.

(a)In the event any Successor (as defined below) does not assume this Agreement by operation of law the Company will seek to have such Successor, by agreement in form and substance satisfactory to you, expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it.  If there has been a Change of Control prior to, or a Change of Control will result from, any such succession, then failure of the Company to obtain at your request such agreement prior to or upon the effectiveness of any such succession (unless assumption occurs as a matter of law) shall constitute Good Reason for termination by you of your employment and, upon delivery of your wr itten notice of termination to the Company, you shall be entitled to the benefits provided for in this Agreement as a result of such termination.  “Successor” shall mean any Person that succeeds to, or has the ability to control, the Company’s business as a whole, whether directly by merger, consolidation, spin-off or similar transaction or indirectly by purchase of the Company’s Voting Securities or acquisition of all or substantially all of the assets of the Company.

(b)This Agreement shall inure to the benefit of and be enforceable by your personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

7.Fees and Expenses. The Company shall pay all legal fees and expenses incurred by you as a result of your seeking to interpret, obtain, assert or enforce any right or benefit conferred upon you by this Agreement to the extent you are the prevailing party.  Such payment shall be made on or before the last day of the taxable year following the taxable year in which you incurred the applicable legal fees and expenses.

8.Notices.  Any and all notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been given when delivered in person to the persons specified below or deposited in the United States mail, certified or registered mail, postage prepaid and addressed as follows:

  If to the Company:

Cameron International Corporation

1333 West Loop South, Suite 1700

Houston, Texas 77027

Attention: Chief Executive Officer

  If to you:                                 

H. Keith Jennings

1131 Bayou Island Drive

Houston, TX 77063

Either party may change, by the giving of notice in accordance with this Section 9, the address to which notices are thereafter to be sent.

9.Validity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

10.Survival.  All obligations undertaken and benefits conferred pursuant to this Agreement shall survive any termination of your employment and continue until performed in full.

11.Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing signed by you and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not ex pressly set forth in this Agreement.  This Agreement shall be governed in all respects, including as to validity, interpretation, construction, performance and effect, by the internal laws of the State of Texas without regard to choice of law principles.

12.Duplicate Originals.  This Agreement has been executed in duplicate originals, with one to be held by each of the parties hereto.

If this Agreement correctly sets forth our understanding with respect to the subject matter hereof, please sign and return one copy of this Agreement to the Company.

                                                                Sincerely,

                                                                CAMERON INTERNATIONAL CORPORATION

                                                                By:_________/s/____________________________

                                                                           Jack B. Moore

                                                                           President and

Chief Executive Officer

Agreed to as of the _18th_ day of  June, 2009

                  /s/                                                                

           H. Keith Jennings

Annex I to Agreement dated June 16, 2009

between

Cameron International Corporation

and

H. Keith Jennings

DEFINITION OF

CERTAIN TERMS

“Agreement” means the letter agreement between H. Keith Jennings and the Company dated June 16, 2009.

“Bonus Plan” means for each year, the Company’s Management Incentive Compensation Plan or any Other Plan adopted by the Board which provides for the payment of additional compensation on an annual basis to senior executive officers contingent upon the Company’s results of operations for that specific year, in either case as such Plan shall be amended or modified to, but not on or after, any Effective Date.

“Cause” means (i) your conviction by a court of competent jurisdiction, from which conviction no further appeal can be taken, of a felony-grade crime involving moral turpitude, or (ii) your willful failure to perform substantially your duties with the Company (other than a failure due to physical or mental illness) which is materially and demonstrably injurious to the Company.   No act or failure to act on your part shall be considered “willful” unless done, or omitted to be done, by you in bad faith and without reasonable belief that your action or omission was in, or not opposed to, the best interests of the Company.

“Change of Control” means the earliest date at which:

(i)any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s outstanding Voting Securities, other than through the purchase of Voting Securities directly from the Company through a private placement;

(ii)individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board shall from and after such election be deemed to be a member of the Incumbent Board;

(iii)a merger or consolidation involving the Company or its stock or an acquisition by the Company, directly or indirectly or through one or more subsidiaries, of another entity or its stock or assets in exchange for the stock of the Company, unless, immediately following such transaction, 70% or more of the then outstanding Voting Securities of the surviving or resulting corporation or entity will be (or is) then beneficially owned, directly or indirectly, by the individuals and entities who were the beneficial owners of the Company’s outstanding Voting Securities immediately prior to such transaction (treating, for purposes of determining whether the 70% conti nuity test is met, any ownership of the Voting Securities of the surviving or resulting corporation or entity that results from a stockholder’s ownership of the stock of, or other ownership interest in, the corporation or other entity with which the Company is merged or consolidated as not owned by persons who were beneficial owners of the Company’s outstanding Voting Securities immediately prior to the transaction);

(iv)any transaction of the type described in part (iii) above, that would have qualified as a “Change of Control” but for the fact that the consideration therefore is part or all cash;

(v)a tender offer or exchange offer is made and consummated by a Person other than the Company for the ownership of 20% or more of the Voting Securities of the Company then outstanding; or

(vi)all or substantially all of the assets of the Company are sold or transferred to a Person as to which (A) the Incumbent Board does not have authority (whether by law or contract) to directly control the use or further disposition of such assets and (B) the financial results of the Company and such Person are not consolidated for financial reporting purposes.

Anything else in this definition to the contrary notwithstanding, no Change of Control shall be deemed to have occurred by virtue of any transaction which results in you, or a group of Persons which includes you, acquiring more than 20% of either the combined voting power of the Company’s outstanding Voting Securities or the Voting Securities of any other corporation or entity which acquires all or substantially all of the assets of the Company, whether by way of merger, consolidation, sale of such assets or otherwise.

“Code” means the Internal Revenue Code of 1986, as amended.

“Defined Benefit Plan” means the Company’s Retirement Plan and Supplemental Excess Defined Benefit Plan, as the same shall be amended or modified prior to, but not on or after, any Effective Date.

“Defined Contribution Plan” means the Company’s Retirement Savings Plan and Supplemental Excess Defined Contribution Plan, as the same shall be amended or modified prior to, but not on or after, any Effective Date.

“Disability” means your continuing full-time absence from your duties with the Company for 180 days or longer as a result of physical or mental incapacity.

“Effective Date” means the earliest date to occur of any of the following: (i) any of the events set forth under the definition of Change of Control shall have occurred; (ii) the receipt by the Company of a Schedule 13D stating the intention of any Person to take actions which, if accomplished, would constitute a Change of Control; (iii) the public announcement by any Person of its intention to take any such action, in each case without regard for any contingency or condition which has not been satisfied on such date; (iv) the agreement by the Company to enter into a transaction which, if consummated, would result in a Change of Control; or (v) consideration by the Board of a transaction which, if consummated, would result in a Change of Control.

If, however, an Effective Date occurs but the proposed transaction to which it relates ceases to be actively considered, the Effective Period will be deemed not to have commenced for purposes of this Agreement.  If an Effective Date occurs with respect to a proposed transaction which ceased to be actively considered but for which active consideration is revived, the Effective Date with respect to the Change of Control that ultimately occurs shall be that date upon which consideration was revived and ultimately carried through to consummation.

“Effective Period” means the period between the Effective Date of a Change of Control and two years following the Effective Date.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Good Reason” means any of the following:

(i)           a change in your status, title(s) or position(s) with the Company, including as an officer of the Company, which, in your reasonable judgment, does not represent a promotion, with commensurate adjustment of compensation, from your status, title(s) and position(s) immediately prior to the Effective Date; or the assignment to you of any duties or responsibilities which, in your reasonable judgment, are inconsistent with such status, title(s) or position(s); or the withdrawal from you of any duties or responsibilities which in your reasonable opinion are consistent with such status, title(s) or position(s); or any removal of you from or any failure to reappoint or reelect you to such position(s); provided that the circumstances described in this item (i) do not apply i f as a result of your death, Retirement, or Disability or following receipt by you of written notice from the Company of the termination of your employment for Cause;

(ii)           a reduction by the Company any time after the Effective Date in your then current base salary;

(iii)           the failure by the Company to continue in effect any Plan in which you were participating immediately prior to the Effective Date other than as a result of the normal expiration or amendment of any such Plan in accordance with its terms; or the taking of any action, or the failure to act, by the Company which would adversely affect your continued participation in any such Plan on at least as favorable a basis to you as is the case immediately prior to the Effective Date or which would materially reduce your benefits under any such Plan or deprive you of any material benefit enjoyed by you immediately prior to the Effective Date, except with your express written consent;

(iv)           the relocation of the principal place of your employment to a location 25 miles further from your principal residence without your express written consent;

(v)           the failure by the Company upon a Change of Control to obtain the express assumption of this Agreement by any Successor (other than by operation of law);

(vi)           any refusal by the Company to continue to allow you to attend to or engage in matters or activities not directly related to the business of the Company which you attended to or were engaged in immediately prior to the Effective Date and which do not otherwise violate your obligations of employment with the Company; or

(vii)           any continuing material default by the Company in the performance of its obligations under this Agreement, whether before or after a Change of Control.

“LTIP Plan” means any of the Company’s long-term incentive plans, including the 2005 Equity Incentive Plan, as such plan may be amended, modified, or replaced, up to, but not on or after, an Effective Date.

“Market Value” means, when used with respect to Shares or Voting Securities, the closing price thereof on the New York Stock Exchange on the date for which the Market Value is to be determined, or if not listed thereon, on such other exchange as shall at that time constitute the principal exchange for trading the Shares or Voting Securities.

“Other Plan” means any thrift, bonus or incentive, stock option or stock accumulation pension medical, disability, accident or life insurance plan, program or policy of the Company which is intended to benefit employees of the Company similarly situated to you (other than the Bonus Plan, Defined Benefit Plan, Defined Contribution Plan, or LTIP Plan).

“Person” means any individual, corporation, partnership, group, association or other “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than the Company or any Plans sponsored by the Company.

“Perquisites” means individual perquisite benefits received by you immediately prior to the Effective Date, including, but not limited to, club membership dues and certain automobile expenses.

“Plans” means the Bonus Plan, Defined Benefit Plan, Defined Contribution Plan, LTIP Plan, and Other Plans.

“Retirement” means termination of your employment on the “normal retirement date” as set forth in the Defined Benefit Plan.

“Severance Package” means your right to receive, and the Company’s obligation to pay and/or perform, the following:

           (a)           the Company shall pay to you, on the date six months, two days after the applicable Termination Date, a lump sum cash amount equal to the sum of (i) three times the highest annual rate of base salary in effect during the current year or any of the three years preceding the Termination Date, and (ii) three times the greater of (A) the target award you would have been eligible to receive under the Bonus Plan in respect of the current year, regardless of any limitations otherwise applicable to the Bonus Plan (i.e., the failure to have completed any vesting period or the current measurement period, or the failure to achieve any performance goal appli cable to all or any portion of the measurement period) or (B) the largest award earned (whether or not paid) under the Bonus Plan in respect of any of the three years preceding the Termination Date;

(b) in addition to any vested portion of your interest in the Defined Contribution Plan to which you are entitled on the applicable Termination Date under that Plan, the Company shall pay to you, on the date six months, two days after the Termination Date, an amount in cash equal to the unvested portion of the Company’s contributions to your account, which unvested portion shall be valued as of the Termination Date at Market Value;

           (c)           in addition to any vested retirement benefits to which you are entitled under the Defined Benefit Plan on the applicable Termination Date, the Company shall pay to you, on the date six months, two days after the Termination Date, an amount in cash equal to the product of (i) a number equal to your years of life expectancy beyond age 65 determined in accordance with the actuarial assumptions utilized under the Defined Benefit Plan immediately prior to the Termination Date, times (ii) an amount equal to the difference between (A) the annual benefit to which you would have been entitled under the single life annuity method of distribution under the Defined Benefit Plan if you were fully vested thereunder (without regard to (I) whether you shall actually have completed the period of Vesting Service requi red to qualify for benefits under the Defined Benefit Plan, (II) any limitation on the amount used in the calculation of the annual benefit thereunder, (III) any offset thereunder for severance allowances payable thereunder, or (IV) any amendment to the Defined Benefit Plan made in connection with a Change of Control and on or prior to the Termination Date, which amendment adversely affects in any manner the computation of retirement benefits under such Plan) and had accumulated an additional three years of Vesting Service thereunder, and (B) the annual benefit, if any, to which you would be entitled under the single life annuity method of distribution under the Defined Benefit Plan as of the Termination Date; and

 (d)the Company shall pay to you, on the date six months, two days after the applicable Termination Date, an amount in cash equal to three times the average annual cost incurred by the Company, during the three calendar years preceding the calendar year in which the Termination Date occurs, as a result of your participation in all insured and self-insured employee welfare benefit Plans and Perquisites i n which you were entitled to participate immediately prior to the Termination Date (or such fewer whole calendar years as you have so participated).

 (e) Notwithstanding the foregoing provisions of the Severance Package, (i) if you are not a “Specified Employee” within the meaning of 409A of the Code as of your Termination Date, then the above provided benefits will be provided rather than six months and two days after the Termination Date, on the tenth day following the Termination Date and (ii) upon your death after the Termination Date any unpaid part of the Severance Package will be paid immediately.

Anything else in this Agreement to the contrary notwithstanding, if (i) your employment with the Company is terminated in connection with a Change of Control, (ii) you are entitled to the Severance Package, and (iii) your Termination Date precedes or occurs on the date of the closing of the transaction constituting a Change of Control, then all amounts to which you are or shall become entitled to under this Agreement, which are calculable as of such closing date, shall be accelerated and become immediately due and payable contemporaneously with such closing.

“Shares” means shares of Common Stock, $.01 par value, of the Company as of the date of this Agreement, as the same shall be subsequently amended, modified or changed.

“Termination Date” shall have the meaning given it by Section 2 of the Agreement, provided that for purposes of the timing of any payment of non-qualified deferred compensation under Code Section 409A, “Termination Date” shall mean a “separation from service,” as defined in Section 1.409A-1(h) of the U.S. Treasury regulations has occurred.

“Voting Securities” means, with respect to any corporation or business enterprise, those securities which under ordinary circumstances are entitled to vote for the election of directors or others charged with comparable duties under applicable law.

EX-13.1

Exhibit 13.1

Management’s Discussion and Analysis of Financial Condition and

Results of Operations of Cameron International Corporation

The following discussion of the historical results of operations and financial condition of Cameron International Corporation (the Company or Cameron) should be read in conjunction with the Company’s consolidated financial statements and notes thereto included elsewhere in this Annual Report. All per share amounts included in this discussion are based on diluted shares outstanding.

Overview

Cameron provides flow equipment products, systems and services to worldwide oil, gas and process industries. During the third quarter of 2010, the Company restructured its business segments, moving its Process Systems division from the Drilling & Production Systems (DPS) segment to a newly formed business segment, Process & Compression Systems (PCS), in order to enhance the Company’s processing solutions for customers involved in the exploration, production, storage and transmission of crude oil and natural gas.  PCS also includes the businesses that were previously part of the Compression Systems segment.  All financial data included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations relating to DPS and PC S have been retrospectively revised based on the new segment structure of the Company.  The Company’s other business segment is Valves & Measurement (V&M).

    The DPS segment includes businesses that providesystems and equipment used to control pressures and direct flows of oil and gas wells. Its products are employed in a wide variety of operating environments including basic onshore fields, highly complex onshore and offshore environments, deepwater subsea applications and ultra-high temperature geothermal operations.  Products within this segment include surface and subsea production systems, blowout preventers (BOPs), drilling and production control systems, block valves, gate valves, actuators, chokes, wellheads, manifolds, drilling riser and aftermarket parts and services. Customers include oil and gas majors, national oil companies, independent producers, engineering and construction compan ies, drilling contractors, rental companies and geothermal energy producers.

The V&M segment includes businesses that provide valves and measurement systems primarily used to control, direct and measure the flow of oil and gas as they are moved from individual wellheads through flow lines, gathering lines and transmission systems to refineries, petrochemical plants and industrial centers for processing. Products include gate valves, ball valves, butterfly valves, Orbit® valves, double block and bleed valves, plug valves, globe valves, check valves, actuators, chokes and aftermarket parts and services as well as measurement products such as totalizers, turbine meters, flow computers, chart recorders, ultrasonic flow meters an d sampling systems. Customers include oil and gas majors, independent producers, engineering and construction companies, pipeline operators, drilling contractors and major chemical, petrochemical and refining companies.

The PCS segment includes businesses that provide oil and gas separation equipment, gas conditioning units, membrane separation systems, water processing systems, reciprocating and integrally geared centrifugal compression equipment and related aftermarket parts and services. The Company’s process and compression equipment is used by oil and gas producers and processors, gas transmission companies, compression leasing companies, independent power producers, petrochemical and refining companies, natural gas processing companies, durable goods manufacturers, utilities, air separation and chemical companies. 

Exposure to deepwater markets

Based upon the Company’s broad portfolio of products, the Company has a significant presence in the offshore oil and gas drilling, production and infrastructure market.  Cameron provides BOPs, drilling and production risers, subsea production systems, oil and gas separation equipment, chokes, valves and compression equipment to the offshore market.  In fact, six of the Company’s eleven divisions participate in this market.  Approximately 41% of the Company’s 2010 revenues was derived from the deepwater market.

Exposure to international markets

Revenues for the years ended December 31, 2010, 2009 and 2008 were generated from shipments to the following regions of the world (dollars in millions):

Region	2010		2009		2008
North America	$	2,491.3	$	2,032.5	$	2,066.7
South America		524.7		504.3		438.6
Asia, including Middle East		1,178.2		1,042.1		1,097.8
Africa		1,182.4		684.5		696.5
Europe		655.2		789.7		1,267.7
Other		103.0		170.1		281.6
	$	6,134.8	$	5,223.2	$	5,848.9

29

In addition to the historical data contained herein, this Annual Report, including the information set forth in the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report, may include forward-looking statements regarding future market strength, customer spending and order levels, revenues and earnings of the Company, as well as expectations regarding equipment deliveries, margins, profitability, the ability to control and reduce raw material, overhead and operating costs, cash generated from operations, legal fees and costs associated with a number of lawsuits filed against the Company in connection with the Deepwater Horizon matter, capital expenditures and the use of existing cash balances and future anticipated cash flows made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ materially from those described in any forward-looking statements. Any such statements are based on current expectations of the Company’s performance and are subject to a variety of factors, some of which are not under the control of the Company, which can affect the Company’s results of operations, liquidity or financial condition. Such factors may include overall demand for, and pricing of, the Company’s products; the size and timing of orders; the Company’s ability to successfully execute large subsea and drilling projects it has been awarded; the possibility of cancellations of orders in backlog; the Company’s ability to convert backlog into revenues on a timely and profitable basis; the impact of acquisitions the Company has made or may make; changes in the price of (and demand for) oil and gas in both domestic and international markets; raw material costs and availability; political and social issues affecting the countries in which the Company does business, including the ability of companies to obtain drilling permits following the lifting of a temporary moratorium imposed by the United States government on drilling activities in deepwater areas of the Gulf of Mexico; fluctuations in currency markets worldwide; and variations in global economic activity. In particular, current and projected oil and gas prices historically have generally directly affected customers’ spending levels and their related purchases of the Company’s products and services. As a result, changes in oil and gas price expectations may impact the demand for the Company’s products and services and the Company’s financial results due to changes in cost structure, staffing and spending levels the Company makes in response thereto. See additional factors discussed in “Factors That May Affect Financial Condi tion and Future Results” contained herein.

Because the information herein is based solely on data currently available, it is subject to change as a result of, among other things, changes in conditions over which the Company has no control or influence, and should not therefore be viewed as assurance regarding the Company’s future performance. Additionally, the Company is not obligated to make public disclosure of such changes unless required under applicable disclosure rules and regulations. 

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to costs to be incurred on projects where the Company utilizes accounting rules for construction-type and production-type contracts for revenue recognition, warranty obligations, bad debts, inventor ies, intangible assets, assets held for sale, exposure to liquidated damages, income taxes, pensions and other postretirement benefits, other employee benefit plans, and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.

Critical Accounting Policies

The Company believes the following critical accounting policies affect the more significant judgments and estimates used in the preparation of its consolidated financial statements. These policies and the other sections of the Company’s Management’s Discussion and Analysis of Results of Operations and Financial Condition have been reviewed with the Company’s Audit Committee of the Board of Directors. 

Revenue Recognition — The Company generally recognizes revenue, net of sales taxes, once the following four criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery of the equipment has occurred or services have been rendered, (iii) the price of the equipment or service is fixed and determinable and (iv) collectibility is reasonably assured. For certain engineering, procurement and construction-type contracts, which typically include the Company’s subsea and drilling systems and processing equipment contracts, revenue is recognized in accordance with accounting rules relating to construction-type and production-type contracts.  Under this guidance, the Compa ny recognizes revenue on these contracts using a units-of-completion method. Under the units-of-completion method, revenue is recognized once the manufacturing process is complete for each unit specified in the contract with the customer, including customer inspection and acceptance, if required by the contract. This method requires the Company to make estimates regarding the total costs of the project, which impacts the amount of gross margin the Company recognizes in each reporting period.  The Company routinely, and at least quarterly, reviews its estimates relating to total estimated contract profit or loss and recognizes changes in those estimates as they are determined.  Revenue associated with change orders is not included in the calculation of estimated profit on a contract until approved by the customer.  Costs associated with unapproved change orders are deferred if (i) the customer acknowledges a change has occurred and (ii) it is probable that the costs will be recov erable from the customer.  If these two conditions are not met, the costs are included in the calculation of estimated profit on the project.  Anticipated losses on these contracts are recorded in full in the period in which they become evident.

30

Factors that may affect future project costs and margins include the ability to properly execute the engineering and design phases consistent with our customers’ expectations, production efficiencies obtained, and the availability and costs of labor, materials and subcomponents.  These factors can significantly impact the accuracy of the Company’s estimates and can materially impact the Company’s future period earnings.  Approximately 36%, 28% and 28% of the Company's revenues for the years ended December 31, 2010, 2009 and 2008, respectively, were recognized under accounting rules for construction-type and production-type contracts.

Allowance for Doubtful Accounts — The Company maintains allowances for doubtful accounts for estimated losses that may result from the inability of its customers to make required payments. Such allowances are based upon several factors including, but not limited to, historical experience, the length of time an invoice has been outstanding, responses from customers relating to demands for payment and the current and projected financial condition of specific customers. Were the financial condition of a customer to deteriorate, resulting in an impairment of its ability to make payments, additional allowances may be required. See Note 4 of the Notes to Consolidated Financial Statements for additional information relating to the Company’s allowance for doubtful accounts. 

Inventories — The Company’s aggregate inventories are carried at cost or, if lower, net realizable value. Inventories generally located in the United States and Canada are carried on the last-in, first-out (LIFO) method. Inventories generally located outside of the United States and Canada are carried on the first-in, first-out (FIFO) method. The Company provides a reserve for estimated inventory obsolescence or excess quantities on hand equal to the difference between the cost of the inventory and its estimated realizable value. The future estimated realizable value of inventory is generally based on the historical usage of such inventory. The Company ages its inventory with no recent d emand and applies various valuation factors based on the number of years since the last demand from customers for such material. If future conditions cause a reduction in the Company’s current estimate of realizable value, due to a decrease in customer demand, a drop in commodity prices or other market-related factors that could influence demand for particular products, additional provisions may be required. Additional information relating to the Company’s allowance for obsolete and excess inventory may be found in Note 5 of the Notes to Consolidated Financial Statements. 

Goodwill — The Company reviews the carrying value of goodwill in accordance with accounting rules on impairment of goodwill, which require that the Company estimate the fair value of each of its reporting units annually, or when impairment indicators exist, and compare such amounts to their respective carrying values to determine if an impairment of goodwill is required. The estimated fair value of each reporting unit is determined using discounted future expected cash flows (level 3 observable inputs) or other market related valuation models consistent with the accounting guidance for fair value measurements.  Certain estimates and judgments are required in the application of the fair value models , including, but not limited to, estimates of future cash flows and the selection of a discount rate.  Generally, this review is conducted during the first quarter of each annual period.  Based upon the most recent annual evaluation, no impairment of goodwill was required.  At December 31, 2010, goodwill recorded by the Company was approximately $1.5 billion.  Should the Company’s estimate of the fair value of any of its reporting units decline dramatically in future periods due to changes in customer demand, market activity levels, interest rates or other factors which would impact future earnings and cash flow or market valuation levels of the Company or any of its reporting units, an impairment of goodwill could be required. Additional information relating to the Company’s goodwill may be found in Note 6 of the Notes to Consolidated Financial Statements. 

Product Warranty— The Company provides for the estimated cost of product warranties either at the time of sale based upon historical experience, or, in some cases, when specific warranty problems are encountered. Should actual product failure rates or repair costs differ from the Company’s current estimates, or should the Company reach a settlement for an existing warranty claim in an amount that is different from what has been previously estimated, revisions to the estimated warranty liability would be required. See Note 7 of the Notes to Consolidated Financial Statements for additional details surrounding the Company’s warranty accr uals. 

Contingencies — The Company accrues for costs relating to litigation, including litigation defense costs, claims and other contingent matters, including liquidated damage liabilities, when such liabilities become probable and reasonably estimable. Such estimates may be based on advice from third parties, amounts specified by contract, amounts designated by legal statute or management’s judgment, as appropriate. Revisions to contingent liability reserves are reflected in income in the period in which different facts or information become known or circumstances change that affect the Company’s previous assumptions with respect to the likelihood or amount of loss. Amounts paid upon the ultimate reso lution of contingent liabilities may be materially different from previous estimates and could require adjustments to the estimated reserves to be recognized in the period such new information becomes known. 

Uncertain Tax Positions — The Company accounts for uncertainties in its income tax positions in accordance with income tax accounting rules.  Rulings from tax authorities on the validity and amounts allowed for uncertain tax positions taken in current and previous income tax filings could impact the Company’s estimate of the value of its uncertain tax positions in those filings.  Changes in the Company’s estimates are recognized as an increase or decrease in income tax expense in the period determined.  See Note 12 of the Notes to Consolidated Financial Statements for further information.

Deferred Tax Assets — The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. The Company has considered all available evidence in assessing the need for valuation allowances, including future taxable income and ongoing prudent and feasible tax planning strategies. Accordingly, the Company has recorded valuation allowances against certain of its deferred tax assets as of December 31, 2010. In the event the Company were to determine that it would not be able to realize all or a part of its deferred tax assets in the future, an adjustment to the valuation allowances against these deferred tax assets would be charged to income i n the period such determination was made. 

31

The Company also considers all unremitted earnings of its foreign subsidiaries, except certain amounts primarily earned before 2003, certain amounts earned during 2009, certain amounts previously earned by NATCO, and amounts previously subjected to tax in the U.S., to be permanently reinvested. Should the Company change its determination of earnings that it anticipates are to be remitted, it would be required to change the amount of deferred income taxes that are currently recorded.  It is not practical for the Company to compute the amount of additional U.S. tax that would be due on amounts considered to be permanently reinvested.

Derivative Financial Instruments— The Company recognizes all derivative financial instruments as assets and liabilities on a gross basis and measures them at fair value. Under the accounting requirements on derivatives and hedging, hedge accounting is only applied when the derivative is deemed highly effective at offsetting changes in anticipated cash flows of the hedged item or transaction. Changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other elements of comprehensive income until the underlying transactions are recognized in earnings, at which time any deferred hedging gains or loss es are also recorded in earnings on the same line as the hedged item. Any ineffective portion of the change in the fair value of a derivative used as a cash flow hedge is recorded in earnings as incurred. The amounts recorded in earnings from ineffectiveness for the years ended December 31, 2010, 2009 and 2008 have not been material. The Company may at times also use forward or option contracts to hedge foreign currency assets and liabilities. These contracts are not designated as hedges. Therefore, the changes in fair value of these contracts are recognized in earnings as they occur and offset gains or losses on the related asset or liability.  At December 31, 2010, the Company also had in place fixed-to-floating rate interest rate swaps on a portion of its long-term fixed rate debt.  Changes in the fair value of these contracts are reflected as an increase or decrease in interest expense as incurred.

The determination of the effectiveness or ineffectiveness of many of the Company’s derivative contracts that are accounted for as cash flow hedges is dependent to a large degree on estimates of the amount and timing of future anticipated cash flows associated with large projects or plant-wide inventory purchasing programs.  These estimates may change over time as circumstances change or may vary significantly from final actual cash flows.  Changes in these estimates that result in the derivative contracts no longer effectively offsetting the expected or actual changes in the anticipated cash flows could impact the amount of the change in the fair value of the derivative contracts that must be recognized immediately in earnings each period.   

At December 31, 2010, the Company had a net asset totaling $5.1 million recorded in its Consolidated Balance Sheet reflecting the fair value of all open derivative contracts at that date and expects approximately $5.5 million (net of tax) of accumulated other elements of comprehensive income to be recognized as a reduction in earnings during 2011.

Pension and Postretirement Benefits Accounting — The Company recognizes the funded status of its defined benefit pension and other postretirement benefit plans in its Consolidated Balance Sheets. The measurement date for all of the Company’s plans was December 31, 2010.  The assumptions used in calculating the pension amounts recognized in the Company’s consolidated financial statements include discount rates, interest costs, expected return on plan assets, retirement and mortality rates, inflation rates, salary growth and other factors. The Company based the discount rate assumptions of its defined benefit pension plan in the United Kingdom on the average yield at December 31, 201 0 of a hypothetical high-quality bond portfolio (rated AA- or better) with maturities that approximately matched the estimated cash flow needs of the plan.  The Company’s inflation assumption was based on an evaluation of external market indicators. The expected rate of return on plan assets was based on historical experience and estimated future investment returns taking into consideration anticipated asset allocations, investment strategy and the views of various investment professionals.  During 2010, the plan assets increased in value by approximately $24.4 million.  The difference between this actual return and an estimated growth in the value of those assets of $15.8 million will be deferred in accumulated other elements of comprehensive income and amortized as a reduction to expense over the remaining service life of the plan participants. Retirement and mortality rates were based primarily on actuarial tables that are thought to approximate actual plan ex perience. In accordance with the accounting requirements for retirement plans, actual results that differ from these assumptions are recorded in accumulated other elements of comprehensive income and amortized over future periods and, therefore, generally affect recognized expense and the recorded obligation in future periods. At December 31, 2010, the Company had an after-tax actuarial loss, net of pension credits, totaling $51.5 million that will be amortized as an increase in future pension expense.  While the Company believes the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect the Company’s pension obligations and future expense. 

During 2007, the Company announced its intention to terminate its U.S. defined benefit pension plans. In connection with a curtailment of future benefits from these plans, effective as of December 31, 2007, and an initial settlement during 2007 of certain existing obligations of the plans relating primarily to participants who were no longer active employees at that time, the Company recorded a $35.7 million charge for the year in its 2007 consolidated results of operations. A final charge of approximately $26.2 million was recognized in 2008, in connection with the settlement of the remaining obligations of the plans, primarily to participants who were active employees of the Company during 2008.

The following table illustrates the sensitivity to a change in certain assumptions used in (i) the calculation of pension expense for the year ending December 31, 2011 and (ii) the calculation of the projected benefit obligation (PBO) at December 31, 2010 for the Company’s most significant remaining pension plan, the United Kingdom pension plan:

(dollars in millions)	Increase (decrease) in 2011 pre-tax pension expense			Increase (decrease) in PBO at December 31, 2010
Change in Assumption:
25 basis point decrease in discount rate	$	1.2		$	12.2
25 basis point increase in discount rate	$	(1.2	)	$	(10.7	)
25 basis point decrease in expected return on assets	$	0.6		$	–
25 basis point increase in expected return on assets	$	(0.6	)	$	–

32

Financial Summary

The following table sets forth the consolidated percentage relationship to revenues of certain income statement items for the periods presented: 

	Year Ended December 31,
	2010			2009			2008
Revenues		100	%		100	%		100	%
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown separately below)		68.7			67.8			70.6
Selling and administrative expenses		14.0			13.7			11.4
Depreciation and amortization		3.3			3.0			2.3
Interest income		(0.1	)		(0.1	)		(0.5	)
Interest expense		1.3			1.8			1.2
Other costs		0.8			1.5			−
Charge for pension plan termination		–			−			0.4
Total costs and expenses		88.0			87.7			85.4
Income before income taxes		12.0			12.3			14.6
Income tax provision		(2.8	)		(3.2	)		(4.7	)
Net income		9.2	%		9.1	%		9.9	%

Recent Market Conditions

Information related to a measure of drilling activity and certain commodity spot and futures prices during each year and the number of available deepwater floaters at the end of each period follows:

	Year Ended December 31,				Increase (Decrease)
	2010		2009		Amount			%
Drilling activity (average number of working rigs during period)1:
United States		1,540		1,086		454			41.8	%
Canada		351		221		130			58.8	%
Rest of world		1,094		997		97			9.7	%
Global average rig count		2,985		2,304		681			29.6	%
Commodity prices (average of daily U.S. dollar prices per unit during period)2:
West Texas Intermediate Cushing, OK crude spot price per barrel in U.S. dollars	$	79.51	$	61.99	$	17.52			28.3	%
Henry Hub natural gas spot price per MMBtu in U.S. dollars	$	4.37	$	3.94	$	0.43			10.9	%
Twelve-month futures strip price (U.S. dollar amount at period end)2:
West Texas Intermediate Cushing, OK crude oil contract (per barrel)	$	93.68	$	82.15	$	11.53			14.0	%
Henry Hub Natural Gas contract (per MMBtu)	$	4.64	$	5.87	$	(1.23	)		(21.0	)%
Number of deepwater floaters and semis under contract in competitive major markets at period end: 3
U.S. Gulf of Mexico		31		35		(4	)		(11.4	)%
Northwestern Europe		34		34		-			-
West Africa		24		28		(4	)		(14.3	)%
Southeast Asia and Australia		27		24		3			12.5	%

1   Based on average monthly rig count data from Baker Hughes

2   Source: Bloomberg

3   Source:  ODS – Petrodata Ltd.

33

The average number of worldwide operating rigs increased during 2010 due largely to increased activity levels in North America.  Outside of North America, average 2010 rig counts also increased modestly in all other major regions of the world as compared to 2009.  Rig count levels worldwide have generally been on an upward trend since the second quarter of 2009, when levels bottomed out below 2,000 operating rigs, levels last seen during 2003, following a steep decline that started during the fourth quarter of 2008.

Crude oil prices (West Texas Intermediate, Cushing, OK) were relatively stable during 2010, trending upward slightly for the year to an average of $79.51 per barrel, with most of the increase from the beginning-of-the-year price to the end-of-the-year price occurring during the last six weeks of the year.  Crude oil prices rose sharply throughout 2009, increasing by more than 70% from the beginning of the year to the end of the year, resulting in an average price during 2009 of $61.99 per barrel.

Natural gas (Henry Hub) prices trended downward during 2010 and during much of 2009 as compared to price levels at the beginning of both periods, although prices spiked sharply during the final month of 2009.  This end-of-year increase during 2009 resulted in the average price during 2010 being 10.9% higher than the average price during 2009, despite daily prices having declined throughout much of 2010.  Should the 12-month futures strip price for natural gas stay at currently depressed levels for a long period of time, the portion of the North American rig count directed to gas drilling could decline, which could impact the Company’s future order flow.

   Historically, the level of capital expenditures by the Company’s customers, which impacts demand for much of the Company’s products and services, has been affected by the level of drilling, exploration and production activity as well as the price of oil and natural gas.  The recent changes in crude oil and natural gas prices and expectations of future prices may affect the future capital spending plans of certain of the Company’s customers.

Results of Operations

Consolidated Results – 2010 Compared to 2009

Net income for 2010 totaled $562.9 million, or $2.27 per diluted share, compared to net income for 2009 of $475.5 million, or $2.11 per diluted share.  Total revenues for the Company increased by $911.6 million, or 17.5%, from 2009 to 2010.  Nearly 59% of the increase was attributable to the incremental impact of revenues from businesses acquired since the beginning of 2009.  Absent the effect of newly acquired businesses, consolidated revenues increased 7.3% as higher sales in all DPS segment product lines more than offset declines in V&M and PCS segment sales.

As a percent of revenues, cost of sales (exclusive of depreciation and amortization) increased from 67.8% in 2009 to 68.7% for 2010.  References to margins in the Management’s Discussion and Analysis of Financial Condition and Results of Operations refers to Revenues minus Cost of Sales (exclusive of depreciation and amortization) as shown separately on the Company’s Consolidated Results of Operations Statement for each of the three years in the period ended December 31, 2010.  The increase was due largely to (i) an increased mix of lower-margin subsea revenues in the DPS segment in relation to other product lines that carry higher margins and (ii) the impact from businesses acquired since the beginning of 2009, which in aggregate carry higher cost of sales - -to-revenues ratios than the Company’s existing businesses (approximately a 0.3 percentage-point increase).

Selling and administrative expenses increased $146.7 million, or 20.5%, during 2010 as compared to 2009, due mainly to (i) approximately $69.0 million of incremental costs added from businesses acquired since the beginning of 2009 and (ii) $103.0 million of higher employee and facility-related costs.  This increase has been partially offset by a $26.0 million reduction in bad debt expense due mainly to provisions recorded during 2009 or earlier periods relating to uncertainties regarding collections, a portion of which was reversed during 2010 as payments were eventually received.

Depreciation and amortization increased $45.0 million, or 28.7%, during 2010 as compared to 2009.  Almost 90% of the increase was due to the incremental amounts associated with businesses acquired since the beginning of 2009.

Interest expense declined $10.2 million from 2009 to 2010.  The decrease was due primarily to (i) $6.0 million of incremental benefit associated with the Company’s interest rate swaps and (ii) a $2.0 million reduction in expense due to the payoff of the remaining portion of the Company’s 1.5% convertible debentures during 2009.

During 2010, the Company incurred $47.2 million of costs in connection with:

• the integration of the operations of NATCO, acquired in November 2009, into the operations of the Company, primarily reflecting the costs associated with converting NATCO’s legacy operations to the Company’s SAP information systems,  totaling approximately $22.0 million,

• $12.5 million of legal costs incurred during the year in connection with the Deepwater Horizon matter, and

    •   $12.7 million of acquisition, employee severance and other restructuring costs incurred in response to changes in market conditions.

Included in operating results for 2009 were employee severance and related benefit costs from workforce reductions during the year, as well as certain other restructuring and acquisition-related costs, including costs incurred to acquire NATCO, totaling in aggregate $81.6 million.

The Company’s effective tax rate for 2010 was 23.2% compared to 26.0% during 2009.  The decrease in the effective tax rate primarily relates to changes in the Company’s international structure that were begun in 2009.

34

Segment Results – 2010 Compared to 2009

DPS Segment

	Year Ended December 31,						Increase (Decrease)
($ in millions)	2010				20091		$			%
Revenues	$	3,718.3		$	3,110.5		$	607.8		19.5	%
Income before income taxes	$	666.7		$	574.7		$	92.0		16.0	%
Income before income taxes as a percent of revenues		17.9	%		18.5	%		N/A		(0.6	)%
Orders	$	2,967.2		$	2,875.1		$	92.1		3.2	%
Backlog (at period-end)	$	3,195.9		$	4,019.3		$	(823.4	)	(20.5	)%

1 Revised based on change in segments described in Note 1 of the Notes to Consolidated Financial Statements.

Revenues

Approximately 12% of the increase in revenues in 2010 compared to 2009 was due to incremental revenues from businesses acquired since the beginning of 2009.  Absent the effect of these newly acquired businesses, revenues increased approximately 17%.  Nearly 83% of this increase was due to a 37% increase in subsea equipment sales, primarily related to projects offshore West Africa and in the Gulf of Mexico.  A 6% increase in drilling equipment sales, due to higher demand for spares and repair services and the impact of prior-year orders on current-year deliveries, as well as a 3% increase in surface equipment sales, due mainly to higher demand in the United States for aftermarket parts and services, accounted for the remainder of the increase.

Income before income taxes as a percent of revenues

The decrease in the ratio of income before income taxes as a percent of revenues was due primarily to an increase of 1.9 percentage points in the ratio of cost of sales to revenues due mainly to an increased mix of lower-margin subsea revenues as compared to higher-margin drilling and surface revenues in 2010 as compared to 2009.

This increase was partially offset by a decrease of 1.1 percentage points in the ratio of selling and administrative expenses to revenues and a decrease of 0.2 percentage points in the ratio of depreciation and amortization to revenues, due mainly to the growth in revenues, which increased at a greater pace than the related costs.  The increase in selling and administrative costs was mitigated by a reduction of $17.9 million in bad debt expense in 2010 as compared to 2009, due mainly to provisions recorded during 2009 or earlier periods relating to uncertainties regarding collections, a portion of which was reversed during 2010 as payments were eventually received.

Orders

Excluding the impact of businesses acquired since the beginning of 2009, order levels for the segment increased approximately 1% in 2010 as compared to 2009.  A 25% increase in orders for drilling equipment and a 17% increase in orders for surface equipment were largely offset by a 19% decline in subsea orders, mainly as a result of a new frame agreement for future delivery of subsea trees for projects offshore Brazil, valued at $300 million, entered into during 2009 that did not repeat during 2010.  The increased drilling equipment orders largely reflected higher demand for spares and repair services, as well as new land and surface blowout preventers.  Increased activity levels, due largely to shale gas opportunities in the United States, was the primary dr iver for the increase in demand for surface equipment during 2010.

Backlog (at period-end)

Backlog at December 31, 2010, was down more than 20% from the comparable level at December 31, 2009, due mainly to declines in backlog levels for subsea and drilling projects as new orders did not keep pace with shipment and project activity levels during 2010.

35

V&M Segment

	Year Ended December 31,						Increase (Decrease)
($ in millions)	2010			2009			$			%
Revenues	$	1,273.3		$	1,194.7		$	78.6		6.6	%
Income before income taxes	$	188.0		$	211.3		$	(23.3	)	(11.0	)%
Income before income taxes as a percent of revenues		14.8	%		17.7	%		N/A		(2.9	)%
Orders	$	1,579.2		$	1,004.1		$	575.1		57.3	%
Backlog (at period-end)	$	833.8		$	547.1		$	286.7		52.4	%

Revenues

Absent the effect of businesses acquired since the beginning of 2009, revenues declined approximately 3% during 2010 as compared to 2009.  This decrease was due primarily to an 18% decrease in sales of engineered valves as a result of the low backlog levels existing at the beginning of 2010 as compared to the beginning of 2009.  This decrease was partially offset by a 32% increase in sales of distributed valves, due largely to higher 2010 activity levels in the North American shale regions.

Income before income taxes as a percent of revenues

The decrease in the ratio of income before income taxes as a percent of revenues was due primarily to a 3.0 percentage-point increase in the ratio of selling and administrative costs to revenues, due mainly to (i) the higher relationship of costs to revenues of newly acquired businesses and (ii) increases in employee-related costs during the period in relation to a decline in revenues.

Orders

Businesses acquired since the beginning of 2009 accounted for approximately 20% of the increase in orders during 2010.  The other primary drivers for the increase were:

• a 46% increase in orders for engineered valves, primarily related to awards for major gas pipeline construction projects in the Middle East and offshore Western Australia, as well as stronger market fundamentals in 2010 in North America,

• an 82% increase in orders for distributed valves and a 24% increase in measurement equipment orders, due mainly to higher North American activity levels, and

• a 39% increase in process valve orders resulting mainly from large refinery and pipeline projects in China and Australia along with higher North American activity levels.

Backlog (at period-end)

Backlog levels for the V&M segment were up 52% from December 31, 2009 due to improved demand in all major product lines and the impact of backlog added from newly acquired businesses.

PCS Segment

	Year Ended December 31,						Increase (Decrease)
($ in millions)	2010				20091		$			%
Revenues	$	1,143.2		$	918.0		$	225.2		24.5	%
Income before income taxes	$	131.9		$	147.4		$	(15.5	)	(10.5	)%
Income before income taxes as a percent of revenues		11.5	%		16.1	%		N/A		(4.6	)%
Orders	$	1,244.1		$	716.0		$	528.1		73.8	%
Backlog (at period-end)	$	787.4		$	623.4		$	164.0		26.3	%

1 Revised based on change in segments described in Note 1 of the Notes to Consolidated Financial Statements.

36

Revenues

Excluding the impact of businesses acquired since the beginning of 2009, segment revenues decreased nearly 17% in 2010 as compared to 2009.  The decrease was due mainly to:

• a 24% decrease in sales of centrifugal compression equipment during 2010 as compared to 2009, mainly resulting from weak global economic conditions and order levels during late 2008 and 2009 that negatively impacted 2010 shipments,

• a 19% decline in the sales value of reciprocating compression equipment, due mainly to a decline in demand in North America during 2009 for Ajax units, which impacted 2010 shipments, and  a mix shift from higher-value packaged Superior compressors to lower-value smaller compressor units in 2010, and

• a 5% decline in sales of legacy process applications, due mainly to weaker order levels in 2009, which impacted 2010 activity and shipment levels.

Income before income taxes as a percent of revenues

The decrease in the ratio of income before income taxes as a percent of revenues was due primarily to:

• a 2.7 percentage-point increase in the ratio of selling and administrative costs to revenues, due largely to the impact of employee-related cost increases in the process, reciprocating and centrifugal compression product lines, and

• an increase of 2.4 percentage points in the ratio of depreciation and amortization to revenues, due mainly to additional depreciation and amortization associated with businesses acquired since the beginning of 2009 and the impact of lower revenues in relation to the relatively flat depreciation and amortization levels from the remaining operations.

This was partially offset by a decline of 0.6 percentage points in the ratio of cost of sales to revenues during 2010, due mainly to the sale of aftermarket inventory and certain intangible assets associated with a compressor line that is no longer produced by the Company and for which no new units have been sold since the 1990s.

Orders

Excluding the impact of businesses acquired since the beginning of 2009, order levels for the segment increased nearly 37% in 2010 as compared to 2009.  The increase was due mainly to:

• a 55% increase in process systems orders, due largely to higher demand for new oil and gas separation applications,

• a 36% increase in orders for centrifugal compression equipment, mainly related to increased global demand across all major regions for new unit Plant Air and Engineered Air equipment and aftermarket parts and services, largely as a result of improving industrial economic conditions, and

• a 23% increase in reciprocating compression equipment orders, mainly attributable to an increase in new unit orders for Superior compressors and increased aftermarket parts sales in the United States and South America.

Backlog (at period-end)

Reciprocating compression equipment backlog was up 72% at December 31, 2010 as compared to December 31, 2009, due largely to the higher order levels during 2010 for new Superior compressors.  Increased demand during 2010 for new plant air and engineering units was largely responsible for a nearly 26% increase in centrifugal compression equipment backlog levels and stronger demand during 2010 for process systems solutions resulted in an 18% increase in backlog in that product line at December 31, 2010 as compared to December 31, 2009.

Corporate Segment

The loss before income taxes in the Corporate segment decreased by $37.3 million from 2009 to 2010.  This decrease was due primarily to $81.6 million of employee severance and restructuring expense, as well as acquisition-related costs, incurred during 2009 in comparison to $47.2 million of costs incurred during 2010 for integrating the operations of NATCO, acquired in 2009, with the existing operations of the Company, legal costs associated with the Deepwater Horizon matter and other employee severance and restructuring activities during the year.

37

Consolidated Results – 2009 Compared to 2008

The Company’s net income for 2009 totaled $475.5 million, or $2.11 per diluted share, compared to $580.7 million, or $2.54 per diluted share in 2008.  Revenues for 2009 decreased $625.7 million, or 10.7%, from 2008. The decline in revenues primarily reflected the weakness in global market conditions during 2009.  These decreases were partially offset by approximately $124.6 million of revenues added during 2009 from businesses acquired since the beginning of 2008.

During 2009, nearly 43% of the Company’s third-party revenue was reflected in entities with functional currencies other than the U.S. dollar.  In translating these entities’ functional currency income statements to U.S. dollars for consolidation purposes, an increase in the value of the U.S. dollar compared to the applicable functional currency would result in a lower amount of U.S. dollar revenues and costs for the same amount of functional currency revenues and costs.  The net effect of a stronger U.S. dollar against many of these other foreign currencies accounted for approximately 19% of the total decrease in the Company’s revenues for 2009 as compared to 2008.

As a percent of revenues, cost of sales (exclusive of depreciation and amortization) decreased from 70.6% in 2008 to 67.8% in 2009.  The decrease in the ratio of cost of sales to revenues was due to improved margins in the DPS segment, primarily related to major drilling, subsea and process systems projects (approximately a 3.3 percentage-point decrease in the ratio).  This was partially offset by a mix shift involving V&M and CS segment sales, which added approximately 0.6 percentage points to the ratio of cost of sales to revenues.

Selling and administrative expenses for 2009 increased $47.3 million, or 7.1% from 2008.  As a percentage of revenues, selling and administrative expenses increased from 11.4% in 2008 to 13.7% in 2009.  Nearly 20% of the increase was attributable to the incremental impact on costs from newly acquired businesses, partially offset by the impact of a stronger U.S. dollar on the translation of selling and administrative expenses incurred by the Company’s foreign subsidiaries.  Excluding these effects, the remaining increase was mainly attributable to:

       •   provisions for doubtful accounts totaling $9.7 million relating to uncertainties regarding collection of receivables,

       •   a $7.5 million write-down related to a receivable associated with the 2006 sale of the Company’s interest in its Iranian joint venture, and

       •   increased advisory and litigation costs of approximately $16.5 million.            

Depreciation expense increased $16.0 million year-over-year as a result of increased capital spending, primarily related to new and expanded facilities in various international locations and for new machinery and equipment.  Amortization expense increased $8.5 million, primarily due to additional amortization from certain acquired intangible assets as well as higher capital spending on the Company’s enterprise-wide information technology assets.

Interest income declined by $21.4 million, or 78.4%, due primarily to lower short-term interest rates during 2009 as compared to 2008.

Interest expense increased during 2009 by $22.1 million, due primarily to $22.3 million of additional interest associated with the issuance of $450.0 million of 6.375% senior notes and $300.0 million of 7.0% senior notes in June 2008.

   During 2009, the Company incurred a total of $81.6 million of restructuring expenses, including:

•   $62.2 million associated with employee severance and various world-wide restructuring activities taken to ensure the Company’s cost structure is in line with the Company’s expectation of activity levels and

•   $19.4 million of costs incurred in connection with the November 2009 acquisition of NATCO Group Inc.

During 2007, the Company announced its intention to terminate its U.S. defined benefit pension plans, effective as of December 31, 2007.  In connection with the plans’ curtailment and the settlement during 2007 of a portion of the existing plan obligations associated with participants who were no longer active employees of the Company at that time, an initial settlement charge of $35.7 million was taken during the year ended December 31, 2007.   A final settlement charge of $26.2 million was taken during the year ended December 31, 2008 associated with the settlement of all remaining plan obligations associated with participants who were active employees of the Company during 2008 and any others who were not covered by the initial settlement of plan obligati ons made in 2007.

The effective tax rates for 2009 and 2008 were 26.0% and 31.8%, respectively.   The tax provision for 2009 was reduced for certain discrete items totaling $21.1 million associated mainly with a net reduction in reserves for uncertain tax positions primarily related to settlements with tax authorities, reductions in valuation allowances related to losses incurred in prior years and certain other adjustments.  Absent these items, the effective tax rate for 2009 would have been 29.3%.  The decrease in the effective tax rate before discrete items for 2009 as compared to 2008 was due primarily to changes in the Company’s international structure implemented during 2009.

38

Segment Results – 2009 Compared to 2008

DPS Segment

	Year Ended December 31,						Increase (Decrease)
($ in millions)		20091			20081		$			%
Revenues	$	3,110.5		$	3,485.3		$	(374.8	)	(10.8	)%
Income before income taxes	$	574.7		$	599.3		$	(24.6	)	(4.1	)%
Income before income taxes as a percent of revenues		18.5	%		17.2	%		N/A		1.3	%
Orders	$	2,875.1		$	4,999.3		$	(2,124.2	)	(42.5	)%
Backlog (at period-end)	$	4,019.3		$	4,200.4		$	(181.1	)	(4.3	)%

1   Revised based on change in segments described in Note 1 of the Notes to Consolidated Financial Statements.

Revenues

The decrease in DPS segment revenues was mainly due to:

• a 17% decline in surface equipment sales, which accounted for approximately 56% of the decrease in total segment sales, resulting from lower sales levels in all major regions of the world, except Latin America, due to the impact of lower commodity prices on activity levels,

• a 9% decrease in drilling equipment sales primarily as a result of lower deliveries for major rig construction projects in 2009 as compared to 2008 and lower demand for drilling riser, and

• a 4% decrease in sales of subsea equipment due mainly to lower shipments and activity levels for large projects offshore Egypt and Western Australia, partially offset by increased shipments and activity related to a large field offshore Eastern Canada.

Income before income taxes as a percent of revenues

The increase in the ratio of income before income taxes as a percent of revenues was due primarily to a decrease of 4.5 percentage points in the ratio of cost of sales to revenues largely related to improved margins on major rig construction and subsea development projects.

Partially offsetting this increase was the impact of higher costs in relation to declining revenues, totaling 2.4 percentage points for selling and administrative expenses and 0.8 percentage points for depreciation and amortization. The increase in selling and administrative expenses was mainly due to:

•   a $7.2 million increase in the provision for doubtful accounts,

•   a $7.5 million write-down related to a receivable associated with the 2006 sale of the Company’s interest in its Iranian joint venture,

•   higher advisory and litigation costs of $11.1 million, and

•   higher employee-related costs due to headcount increases, primarily in the segment’s subsea business, and the incremental impact of costs added from newly acquired businesses.

The increase in depreciation and amortization expense was attributable to the incremental impact of costs added from newly acquired businesses with the remainder largely due to increased capital spending on new and expanded facilities in Romania, Malaysia, Brazil, Singapore and Azerbaijan.

Orders

Excluding the impact of newly acquired businesses, order levels for the segment decreased 43% in 2009 as compared to 2008.  The primary drivers for the decrease were:

• a 48% decline in subsea equipment orders, accounting for approximately 60% of the decrease in total segment orders for 2009 as compared to 2008, primarily due to orders received in 2008 relating to two large projects offshore West Africa as well as a project offshore Eastern Canada amounting to nearly $1.7 billion in total, compared to two large orders received in 2009 to provide a number of trees and other equipment to projects offshore Brazil and in the Gulf of Mexico totaling approximately $618 million,

• a 49% decrease in drilling equipment orders due largely to a lower level of activity with regard to new deepwater rig construction projects and lower levels of awards for new land and aftermarket equipment, and

• a 27% decrease in surface equipment orders as a result of the impact of lower commodity prices on activity levels, which negatively impacted demand from all major regions of the world.

39

Backlog (at period-end)

A decline in drilling and surface equipment backlog from December 31, 2008 to December 31, 2009, resulting from depressed 2009 order levels, was partially offset by increased backlog in the subsea product line as order rates exceeded the low shipment levels during 2009.

V&M Segment

	Year Ended December 31,						Decrease
($ in millions)		20091			20081		$			%
Revenues	$	1,194.7		$	1,473.2		$	(278.5	)	(18.9	)%
Income before income taxes	$	211.3		$	301.4		$	(90.1	)	(29.9	)%
Income before income taxes as a percent of revenues		17.7	%		20.5	%		N/A		(2.8	)%
Orders	$	1,004.1		$	1,573.5		$	(569.4	)	(36.2	)%
Backlog (at period-end)	$	547.1		$	749.2		$	(202.1	)	(27.0	)%

Revenues

Excluding the incremental impact of additional revenues from businesses acquired since the beginning of 2008, revenues for the segment’s legacy businesses declined 20.1% in 2009.  This decrease was attributable to:

• a 42% decrease in sales of distributed valves from the record levels of 2008 due to weakness in the North American markets during much of 2009, which accounted for 59% of the decrease in legacy V&M sales,

• an 11% decrease in sales of engineered valves due largely to market weakness in Canada and the United States and customer delays on pipeline construction projects,

• a 9% decline in sales of process valves reflecting lower awards for refinery and petrochemical projects, and

• a 14% decrease in sales of measurement products due largely to weaker market conditions in the United States, Canada and the United Kingdom.

Income before income taxes as a percent of revenues

The decrease in the ratio of income before income taxes as a percent of revenues was due primarily to:

   • a 2.3 percentage-point increase in the ratio of selling and administrative costs to revenues, due largely to (i) the higher relationship of costs to revenues from newly acquired businesses and (ii) the impact of legacy costs which did not decline at the same pace as the decline in legacy revenues, and

•   a 0.8 percentage-point increase in the ratio of depreciation and amortization to revenues, due mainly to the impact of a $4.0 million increase in depreciation and amortization resulting from higher capital spending in recent periods by the segment’s engineered valves business, mainly for projects in Italy and the United States, and the incremental impact of newly acquired businesses in relation to the decline in revenues.

These increases were partially offset by a 0.4 percentage-point decrease in the ratio of cost of sales to revenues due primarily to a mix shift toward a greater proportion of sales of higher-margin engineered valves, process valves and aftermarket parts and services (which reduced the cost of sales-to-revenue ratio by 3.2 percentage points) partially offset by the impact of lower distributed product margins, which increased the cost of sales-to-revenues ratio by 2.8 percentage points.

Orders

A 54% decline in distributed valve orders and a 34% decline in orders for engineered valves accounted for 79% of the decrease in total segment orders during 2009 as compared to 2008.  Distributed valve orders were negatively impacted during 2009 by weak market conditions and activity levels in the United States and Canada.  The downturn in the North American market and delays in the startup of major pipeline construction projects resulted in the lower level of awards for engineered valves during the year.  Orders for process valves declined 32% as a result of a slowdown in projects supporting refinery and petrochemical applications. Additionally, excluding the incremental effect of orders from newly acquired businesses, weakness in the drilling and production markets resulted in a 26% decline in orders for legacy measurement products in the United States, Canada and the United Kingdom.

Backlog (at period-end)

Weak order levels during 2009 contributed to backlog declines in all major product lines from December 31, 2008 to December 31, 2009, with the decline in engineered valves accounting for nearly 53% of the decrease in total V&M backlog during the year.

40

PCS Segment

	Year Ended December 31,						Increase (Decrease)
($ in millions)		20091			20081		$			%
Revenues	$	918.0		$	890.4		$	27.6		3.1	%
Income before income taxes	$	147.4		$	142.6		$	4.8		3.4	%
Income before income taxes as a percent of revenues		16.1	%		16.0	%		N/A		0.1	%
Orders	$	716.0		$	967.8		$	(251.8	)	(26.0	)%
Backlog (at period-end)	$	623.4		$	656.9		$	(33.5	)	(5.1	%)

1 Revised based on change in segments described in Note 1 of the Notes to Consolidated Financial Statements.

Revenues

Absent the effect of newly acquired businesses, PCS segment revenues declined nearly 4%.  This decrease was mostly due to:

•   a 5% decline in sales of reciprocating compression equipment, caused mainly by a 15% decrease in sales of Ajax units as a result of lower orders from North American packagers and lease fleet operators and a 14% decrease in reciprocating aftermarket revenues, primarily due to the impact on customers of lower natural gas prices for most of the year, partially offset by a 67% increase in sales of Superior Compressors, primarily due to higher project activity in Eastern Europe,

•   a 1% decline in sales of centrifugal compression equipment, resulting from a 27% decrease in sales of new plant air equipment and a 6% decline in aftermarket revenues due to weak global market conditions during much of the current year, partially offset by an 11% increase in sales of engineered units, primarily for gas compression applications in Russia and the Middle East, which were ordered prior to the recent industry downturn, and

• a 5% decrease in sales of legacy process applications, due mainly to weaker activity levels.

Income before income taxes as a percent of revenues

The increase in the ratio of income before income taxes as a percent of revenues was due primarily to a 0.4 percentage-point decrease in the ratio of costs of sales to revenues, due largely to an improvement in margins on projects related to process systems applications, partially offset by higher costs in the reciprocating product line.

This was partially offset by an increase of 0.3 percentage points in the ratio of depreciation and amortization expense to revenues, due to the incremental impact of costs from newly acquired businesses and higher levels of capital spending for machinery and equipment in recent periods.

Orders

Excluding the impact of newly acquired businesses, order levels for the segment decreased 31% in 2009 as compared to 2008.  The decrease was due mainly to:

• a 43% decline in centrifugal compression equipment orders resulting from:

-   a 53% decrease in new engineered unit orders, due mainly to a slowdown in demand from international customers for projects requiring the use of air separation equipment,

-   a 37% decrease in awards for plant air equipment and a 22% decline in demand for aftermarket parts and services, resulting largely from weakness in the global industrial markets,

• a 25% decrease in reciprocating compression equipment orders as a result of:

-   a 46% decrease in orders for Ajax units and a 47% decrease in orders for Superior compressors, primarily from North American packagers and lease fleet operators, and

-   a 10% decrease in demand for aftermarket parts and services, which reflected weakness in natural gas prices for much of 2009 as well as lower customer maintenance activity levels, and

• a 21% decrease in orders for process systems, due to the lack of major project awards in 2009 as compared to 2008.

Backlog (at period-end)

Excluding the impact of backlog added from business acquired during 2009, PCS segment backlog declined by nearly 31% from December 31, 2008 to December 31, 2009, as a result of weak order levels during 2009 in all of the segment’s product lines.

41

Corporate Segment

The Corporate segment’s loss before income taxes for 2009 totaled $290.6 million, an increase of $98.7 million from $191.9 million in 2008.  The primary factors causing the increase were:

•   restructuring expenses of $81.6 million in 2009 compared to a charge of $26.2 million in 2008 relating to the final settlement of the Company’s U.S. defined benefit pensions plans,

•   higher interest expense of $22.1 million and

•   lower interest income of $21.4 million.

These items are discussed in further detail in “Consolidated Results – 2009 Compared to 2008” above.

Liquidity and Capital Resources

Consolidated Statements of Cash Flows

Net cash provided by operating activities for 2010 totaled $294.2 million, a decrease of $319.3 million from the $613.5 million of cash provided by operations during 2009.

Cash totaling $485.7 million was used to increase working capital during 2010 compared to $10.5 million during 2009, an increase of approximately $475.2 million.  Partially offsetting this increase were higher net earnings for 2010 as compared to 2009 of $87.4 million.

During 2010, progress payments and cash advances from customers declined $224.8 million, due mainly to the lack of new major project orders and the consumption of previously received advances.  Correspondingly, during 2009, progress payments and cash advances from customers had grown by $196.1 million.  In addition, the Company’s receivables increased by $81.4 million during 2010 as a result of higher sales levels during the latter part of the year compared to a reduction in receivables during 2009 of $165.2 million.  This impact was mostly offset by a $217.1 million reduction in cash used to build inventory during 2010 as compared to 2009.

Cash used for investing activities was relatively consistent between 2010 and 2009 as a $40.2 million reduction in capital spending during 2010 was more than offset by cash totaling $40.9 million used to acquire two businesses during the year.

Cash used for financing activities declined by $83.0 million for 2010 as compared to 2009.  During 2009, the Company paid $131.1 million to redeem the remaining portion of its 1.5% Convertible Debentures.  During the first six months of 2010, the Company acquired 3,176,705 shares of treasury stock for a total cash cost of $124.0 million while 935,000 shares were purchased for $29.2 million during 2009.  Given the uncertainty created by the litigation associated with the Deepwater Horizon matter (see Note 19 of the Notes to Consolidated Financial Statements), the Company temporarily suspended its stock repurchases beginning in the third quarter of 2010.

Future liquidity requirements

At December 31, 2010, the Company had cash and cash equivalents on hand that exceeded its third-party debt by $539.7 million.

The Company has outstanding $500.0 million face value of 2.5% Convertible Debentures due in 2026.  Under the terms of the debenture agreements, holders of the Company’s 2.5% Convertible Debentures could require the Company to redeem them on June 15, 2011.  Accordingly, the Company has classified these debentures in the current portion of long-term debt on its Consolidated Balance Sheet at December 31, 2010.  At December 31, 2010, the 2.5% Convertible Debentures met the requirements to allow for conversion by the holders of the debt during the first quarter of 2011.  Had the holders been able to elect to convert effective December 31, 2010, the Company could have been required to issue approximately 4.3 million shares of its common stock in sat isfaction of the conversion value of the debentures in excess of their principal amount to be paid in cash, based on the closing price of the Company’s common stock of $50.73 on that date.

On a longer-term basis, the Company issued $450.0 million of 6.375% 10-year Senior Notes and $300.0 million of 7.0% 30-year Senior Notes in June 2008.

In order to provide for additional financial capacity to meet customers’ needs, the Company entered into a three-year $250.0 million committed multi-currency revolving letter of credit facility during 2010.  Under this facility, standby letters of credit, generally with terms of up to two years, may be issued by a third-party bank on behalf of the Company in U.S. dollars, euros, Sterling or other mutually agreed-upon currencies.

The Company believes, based on its current financial condition, existing backlog levels and current expectations for future market conditions, that it will be able to meet its short- and longer-term liquidity needs, subject to the outcome of the contingency created by the litigation surrounding the Deepwater Horizon matter, with the existing $1.8 billion of cash on hand, expected cash flow from future operating activities and amounts available under its $250.0 million three-year multi-currency revolving letter of credit facility, which expires October 15, 2013, and its $585 million five-year multi-currency revolving credit facility, expiring on April 14, 2013.

42

The following summarizes the Company’s significant cash contractual obligations and other commercial commitments for the next five years as of December 31, 2010.  

(dollars in millions)			Payments Due by Period
Contractual Obligations	Total		Less Than 1 Year		1 – 3 Years		4 – 5 Years		After 5 Years
Debt (a)	$	1,287.5	$	520.7	$	16.8	$	–	$	750.0
Capital lease obligations (b)		14.6		6.3		6.8		1.5		−
Operating leases		218.4		43.1		69.1		47.3		58.9
Purchase obligations (c)		1,090.7		1,015.1		75.5		0.1		−
Minimum required contributions to funded defined benefit pension  plans (d)		9.0		9.0		−		−		−
Benefit payments expected for unfunded pension and postretirement benefit plans (U.S. only)		17.7		2.5		4.4		3.8		7.0
Unrecognized tax benefits (e)		29.5		29.5		−		−		−
Total contractual cash obligations	$	2,667.4	$	1,626.2	$	172.6	$	52.7	$	815.9

(a)  See Note 10 of the Notes to Consolidated Financial Statements for information on redemption rights by the Company, and by holders of the Company’s debentures, that would allow for early redemption of the 2.5% Convertible Debentures in 2011, as well as interest rates on the outstanding debt.

(b) Payments shown include interest.

(c) Represents outstanding purchase orders entered into in the ordinary course of business.

(d)  The Company does not estimate its future minimum required contributions beyond one year.  Due to the underfunded nature of the Company’s defined benefit pension plans in the U.K., the Company may elect to contribute more than the minimum required amount to the plans during 2011.

(e)  The balance shown represents the portion of the Company’s unrecognized tax benefits recorded as a current liability at December 31, 2010. The remaining balance of unrecognized tax benefits totaling $38.9 million has been excluded from the table as the Company cannot reasonably estimate the timing of the associated future cash outflows.

(dollars in millions)	Amount of Commitment Expiration by Period
Other Unrecorded Commercial Obligations and Off-Balance Sheet Arrangements	Total Commitment		Less Than 1 Year		1 - 3 Years		4 – 5 Years		After 5 Years
Committed lines of credit available as of year-end	$	729.1	$	66.1	$	663.0	$	−	$	−
Standby letters of credit and bank guarantees		840.4		494.9		220.0		98.8		26.7
Financial letters of credit		13.9		13.9		−		−		−
Insurance bonds		30.1		9.7		10.4		−		10.0
Other financial guarantees		18.1		2.3		−		−		15.8
Total commercial commitments	$	1,631.6	$	586.9	$	893.4	$	98.8	$	52.5

    The Company secures certain contractual obligations under various agreements with its customers or other parties through the issuance of letters of credit or bank guarantees. The Company has various agreements with financial institutions to issue such instruments. As of December 31, 2010, the Company had $840.4 million of letters of credit and bank guarantees outstanding in connection with the delivery, installation and performance of the Company’s products. Additional letters of credit and guarantees are outstanding at December 31, 2010 in connection with certain financial obligations of the Company. Should these facilities become unavailable to the Company, the Company’s operations and liquidity could be negatively impacted. Circumstances which could result in the withdrawal of such facilities in clude, but are not limited to, deteriorating financial performance of the Company, deteriorating financial condition of the financial institutions providing such facilities, overall constriction in the credit markets or rating downgrades of the Company.

Factors That May Affect Financial Condition and Future Results

The Deepwater Horizon matter may have a material adverse effect on the Company.

See a more complete discussion of the Deepwater Horizon incident in Note 19 of the Notes to Consolidated Financial Statements.

The Deepwater Horizon matter has and will continue to have an impact on the Company for the foreseeable future. Preparation for and participation in the litigation and investigations regarding this matter will continue to divert Company resources and management’s attention, as well as that of the Company’s Drilling Systems division.

43

The Company derives a significant portion of its revenues from deepwater activities around the world.  In fact, six of the Company’s eleven divisions participate in this market.  The new regulations imposed by the United States government on drilling activities in deepwater areas of the Gulf of Mexico could affect a portion of the Company’s business and may cause customers who are involved in deepwater drilling in the Gulf of Mexico to face additional costs and regulations involving future drilling. While these regulations may decrease activity in the Gulf of Mexico, they also may require customers to purchase additional components and/or services currently available from the Company and could require the Company to develop new technologies.  Simi lar regulations may be adopted in other jurisdictions where the Company and its customers do business.  The Company may also be subject to future regulations regarding the development and testing of our equipment, including our blowout preventers, which may add to the manufacturing cost of such equipment.  The Company may be unable to recover such additional costs through higher sales prices, which could negatively impact the Company’s future profitability and cash flows.  Other regions are currently considering similar regulations.

Additionally, this event may make it increasingly difficult for the industry to obtain adequate insurance on economic terms, if at all.

If our contractual indemnities are determined to be inapplicable, or the indemnitors fail or are unable to fulfill their contractual indemnity obligations, and if the damages and costs ultimately determined to be the Company’s responsibility exceed our available insurance coverage, we could be liable for amounts which could have a material adverse impact on our financial condition, results of operations and cash flows.

As a designer, manufacturer, installer and servicer of oil and gas pressure control equipment, the Company may be subject to liability, personal injury, property damage and environmental contamination should such equipment fail to perform to specifications.

Cameron provides products and systems that serve customers involved in oil and gas exploration, development and production, as well as in certain industrial markets.  Certain of the Company’s equipment is designed to operate in high-temperature, high-pressure environments on land, on offshore platforms and on the seabed.  Cameron also provides aftermarket parts and repair services at numerous facilities located around the world or at customer sites.  Because of the extreme temperature and pressure environments that certain of the Company’s equipment operates in, a failure of such equipment could cause damage to the equipment, damage to a customer’s other property, personal injury and environmental contamination, whether onshore or offshore.& #160; In addition, improper servicing and maintenance of such equipment by Company service technicians or by other third parties can contribute to potential failures of the Company’s equipment.  Cameron is currently party to litigation involving personal injury, property damage and environmental contamination alleged to have been caused by failures of the Company’s equipment.

In an attempt to mitigate such risks, the Company has invested in engineering and design tools and equipment to enable engineers to conduct product modeling and simulations.  The Company also has a quality control program to examine materials received from third-party vendors prior to introducing such materials into the Company’s own manufacturing process and tests its products prior to delivery.  Additionally, the Company provides training to its service technicians and seeks to mitigate its financial risks from potential failure of its equipment by maintaining property and casualty insurance coverage, which includes coverage for sudden and accidental environmental pollution.

Downturns in the oil and gas industry have had, and will likely in the future have, a negative effect on the Company’s sales and profitability.

Demand for most of the Company’s products and services, and therefore its revenues, depends to a large extent upon the level of capital expenditures related to oil and gas exploration, production, development, processing and transmission. Declines, as well as anticipated declines, in oil and gas prices could negatively affect the level of these activities, or could result in the cancellation, modification or rescheduling of existing orders. As an example, the substantial decline in oil and gas prices which began during the latter half of 2008 and continued into early 2009, combined with the constricted credit markets during that time, caused reductions in orders by the Company’s customers during 2009 which have, in certain cases, negatively impacted the Company’s 2010 re venues and profitability.

The inability of the Company to deliver its backlog on time could affect the Company’s future sales and profitability and its relationships with its customers.

At December 31, 2010, the Company’s backlog was $4.8 billion.  The ability to meet customer delivery schedules for this backlog is dependent on a number of factors including, but not limited to, access to the raw materials required for production, an adequately trained and capable workforce, project engineering expertise for large subsea projects, sufficient manufacturing plant capacity and appropriate planning and scheduling of manufacturing resources. Many of the contracts the Company enters into with its customers require long manufacturing lead times and contain penalty or incentive clauses relating to on-time delivery. A failure by the Company to deliver in accordance with customer expectations could subject the Company to financial penalties or loss of financial ince ntives and may result in damage to existing customer relationships. Additionally, the Company bases its earnings guidance to the financial markets on expectations regarding the timing of delivery of product currently in backlog. Failure to deliver backlog in accordance with expectations could negatively impact the Company’s financial performance and thus cause adverse changes in the market price of the Company’s outstanding common stock and other publicly-traded financial instruments.

44

A deterioration in future expected profitability or cash flows could result in an impairment of the Company’s goodwill.

Total Cameron goodwill approximated $1.5 billion at December 31, 2010, a large portion of which was allocated to the Company’s Process Systems division, which includes the majority of the NATCO operations acquired in 2009.  As a result, any future deterioration in expected profitability or cash flows of the Company or its Process Systems division could negatively impact the estimated fair market values of both, which, if it were to occur, could increase the likelihood of a goodwill impairment charge being required.  No goodwill impairment charge was required based on the Company’s annual evaluation conducted in the first quarter of 2010.

Execution of subsea systems projects exposes the Company to risks not present in its other businesses.

Cameron is a significant participant in serving the subsea systems projects market.  This market is significantly different from the Company’s other markets since subsea systems projects are significantly larger in scope and complexity, in terms of both technical and logistical requirements. Subsea projects (i) typically involve long lead times, (ii) typically are larger in financial scope, (iii) typically require substantial engineering resources to meet the technical requirements of the project and (iv) often involve the application of existing technology to new environments and in some cases, new technology. The Company’s subsea business unit received orders in the amount of $1.1 billion during 2010.  Total backlog for the subsea business unit at Decembe r 31, 2010 was approximately $2.2 billion.  To the extent the Company experiences unplanned efficiencies or difficulties in meeting the technical and/or delivery requirements of the projects, the Company’s earnings or liquidity could be positively or negatively impacted. The Company accounts for its subsea projects, as well as separation and drilling projects, using accounting rules for construction-type and production-type contracts.  In accordance with this guidance, the Company estimates the expected margin on these projects and recognizes this margin as units are completed.  Factors that may affect future project costs and margins include the ability to properly execute the engineering and design phases consistent with our customers’ expectations, production efficiencies obtained, and the availability and costs of labor, materials and subcomponents.  These factors can significantly impact the accuracy of the Company’s estimates and materially impa ct the Company’s future period earnings.  If the Company experiences cost underruns or overruns, the expected margin could increase or decline.  In accordance with the accounting guidance, the Company would record a cumulative adjustment to increase or reduce the margin previously recorded on the related project in the period a change in estimate is determined.  Subsea systems projects accounted for approximately 19.7% of total revenues for 2010. As of December 31, 2010, the Company had a subsea systems project backlog of approximately $1.5 billion.

Fluctuations in worldwide currency markets can impact the Company’s profitability.

The Company has established multiple “Centers of Excellence” facilities for manufacturing such products as subsea trees, subsea chokes, subsea production controls and BOPs. These production facilities are located in the United Kingdom, Brazil and other European and Asian countries. To the extent the Company sells these products in U.S. dollars, the Company’s profitability is eroded when the U.S. dollar weakens against the British pound, the euro, the Brazilian real and certain Asian currencies, including the Singapore dollar. Alternatively, profitability is enhanced when the U.S. dollar strengthens against these same currencies.

The Company’s worldwide operations expose it to economic risks and instability due to changes in economic conditions, civil unrest, foreign currency fluctuations, trade and other risks inherent to international business.

The economic risks of doing business on a worldwide basis include the following: 

    • volatility in general economic, social and political conditions, including Venezuela, where the Company has $57.7 million of unfilled subsea orders with and $20.9 million of uncollected receivables from its national oil company;

    • the effects of civil unrest on the Company’s business operations, customers and employees, such as currently occurring in several countries in the Middle East,

    • differing tax rates, tariffs, exchange controls or other similar restrictions;

    • changes in currency rates;

    • reductions in the number or capacity of qualified personnel.

Cameron has manufacturing and service operations that are essential parts of its business in developing countries and volatile areas in Africa, Latin America, Russia and other countries that were part of the Former Soviet Union, the Middle East, and Central and South East Asia. The Company also purchases a large portion of its raw materials and components from a relatively small number of foreign suppliers in developing countries. The ability of these suppliers to meet the Company’s demand could be adversely affected by the factors described above.

45

The Company’s worldwide operations expose it to political risks and uncertainties.

Doing business on a worldwide basis necessarily involves exposing the Company and its operations to political risks and the need for compliance with the laws and regulations of many jurisdictions. These laws and regulations include trade regulations, restrictions on repatriation of income or capital, and various anti-bribery laws, as well as local content rules and the ever-increasing regulatory burdens being imposed on the oil and gas industry in general, all of which expose the Company to potential liability.  They also include restrictions on the industry in access to oil and gas reserves, as was recently imposed in the U.S. Gulf of Mexico.

Compliance with U.S. regulations on trade sanctions and embargoes poses a risk to Cameron since its business is conducted on a worldwide basis through various entities. Cameron has received a number of inquiries from U.S. governmental agencies regarding compliance with these regulations. The most recent of these inquiries was a March 25, 2009, letter from the Office of Global Security Risk of the U.S. Securities and Exchange Commission inquiring into the status of Cameron's non-U.S. entities' withdrawal from conducting business in or with Iran, Syria and Sudan, which begin in mid-2006 and has since been completed.

The Company does business and has operations in a number of developing countries that have relatively underdeveloped legal and regulatory systems when compared to more developed countries. Several of these countries are generally perceived as presenting a higher than normal risk of corruption, or as having a culture where requests for improper payments are not discouraged. Maintaining and administering an effective anti-bribery compliance program under the U.S. Foreign Corrupt Practices Act (FCPA) and similar statutes of other nations in these environments presents greater challenges to the Company than is the case in other, more developed countries.  As discussed in Note 19 of the Notes to Consolidated Financial Statements, the Company has an open investigation into possible FC PA violations in connection with importation of equipment and supplies into Nigeria.

   Increasingly, some of the Company’s customers, particularly the national oil companies, have required a certain percentage, or an increased percentage, of local content in the products they buy directly or indirectly from the Company.  This requires the Company to add to or expand manufacturing capabilities in certain countries that are presently without the necessary infrastructure or human resources in place to conduct business in a manner as typically done by Cameron.  This increases the risk of untimely deliveries, cost overruns and defective products.

The Company recently underwent a Focused Assessment Audit regarding compliance with U.S. customs regulations and has also received inquiries regarding its compliance with certain such laws and regulations from several other countries.

Economic conditions around the world have resulted in decreased tax revenues for many governments, which could lead to changes in tax laws in countries where the Company does business, including the United States.  Changes in tax laws could have a negative impact on the Company’s future results.

The Company is subject to environmental, health and safety laws and regulations that expose the Company to potential liability.

The Company’s operations are subject to a variety of national and state, provisional and local laws and regulations, including laws and regulations relating to the protection of the environment. The Company is required to invest financial and managerial resources to comply with these laws and expects to continue to do so in the future. To date, the cost of complying with governmental regulation has not been material, but the fact that such laws or regulations are frequently changed makes it impossible for the Company to predict the cost or impact of such laws and regulations on the Company’s future operations. The modification of existing laws or regulations or the adoption of new laws or regulations imposing more stringent environmental restrictions could adversely affect the Company.

Enacted and proposed climate protection regulations and legislation may impact the Company’s operations or those of its customers.

In December 2009, the United States Environmental Protection Agency (EPA) announced a finding under the United States Clean Air Act that greenhouse gas emissions endanger public health and welfare.  The EPA also enacted regulations in September 2009, which became effective January 1, 2010, requiring monitoring and reporting by certain facilities and companies of greenhouse gas emissions.  Carbon emission reporting and reduction programs have also expanded in recent years at the state, regional and national levels with certain countries having already implemented various types of cap-and-trade programs aimed at reducing carbon emissions from companies that currently emit greenhouse gases, such as electric power generators and utilities.  

To the extent Cameron is subject to any of these or other similar proposed or newly enacted laws and regulations, the Company expects that its efforts to monitor, report and comply with such laws and regulations, and any related taxes imposed on companies by such programs, will increase the Company’s cost of doing business in certain jurisdictions, including the United States, and may require expenditures on a number of its facilities and possibly modification of certain of its compression products, which involve use of power generation equipment, in order to lower any direct or indirect emissions of greenhouse gases from those facilities and products.

To the extent the Company’s customers, particularly those involved in power generation, petrochemical processing or petroleum refining, are subject to any of these or other similar proposed or newly enacted laws and regulations, the Company is exposed to risks that the additional costs by customers to comply with such laws and regulations could impact their ability or desire to continue to operate at similar levels in certain jurisdictions as historically seen or as currently anticipated, which could negatively impact their demand for the Company’s products and services.

The Company could also be impacted by new laws and regulations establishing cap-and-trade and those that might favor the increased use of non-fossil fuels, including nuclear, wind, solar and bio-fuels or that are designed to increase energy efficiency.  If the proposed or newly executed laws dampen demand for oil and gas production, they could lower spending by the Company’s customers for the Company’s products and services.

46

Environmental Remediation

The Company’s worldwide operations are subject to domestic and international regulations with regard to air, soil and water quality as well as other environmental matters. The Company, through its environmental management system and active third-party audit program, believes it is in substantial compliance with these regulations. 

The Company is currently identified as a potentially responsible party (PRP) with respect to two sites designated for cleanup under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) or similar state laws. One of these sites is Osborne, Pennsylvania (a landfill into which a predecessor of the PCS operation in Grove City, Pennsylvania deposited waste), where remediation is complete and remaining costs relate to ongoing ground water treatment and monitoring. The other is believed to be a de minimis exposure. The Company is also engaged in site cleanup under the Voluntary Cleanup Plan of the Texas Commission on Environmental Quality at former manufacturing locations in Houston and Missouri City, Texas. Additionally, the Company has discontinued operations at a n umber of other sites which had been active for many years. The Company does not believe, based upon information currently available, that there are any material environmental liabilities existing at these locations. At December 31, 2010, the Company’s consolidated balance sheet included a noncurrent liability of $6.8 million for environmental matters.

Environmental Sustainability

The Company has pursued environmental sustainability in a number of ways. Processes are monitored in an attempt to produce the least amount of waste. None of the Company’s facilities are rated above Small Quantity Generated status. All of the waste disposal firms used by the Company are carefully selected in an attempt to prevent any future Superfund involvements. Actions are taken in an attempt to minimize the generation of hazardous wastes and to minimize air emissions. None of the Company’s facilities are classified as sites that generate more than minimal air emissions. Recycling of process water is a common practice. Best management practices are used in an effort to prevent contamination of soil and ground water on the Company’s sites.

Under the direction of its corporate Director, Safety and Environment, Cameron has implemented a corporate “HSE Management System” based on the principles of ISO 14001 and OHSAS 18001.  The HSE Management System contains a set of corporate standards that are required to be implemented and verified by each business unit. Cameron also has developed a corporate compliance audit program to address facility compliance with environmental, health and safety laws and regulations.  The compliance program utilizes independent third-party auditors to audit facilities on a regular basis specific to country, region, and local legal requirements.  Audit reports are circulated to the senior management of the Company and to the appropriate business unit. 
60;The compliance program requires corrective and preventative actions be taken by a facility to remedy all findings of non-compliance.  Audit findings and corrective action plans are incorporated into and tracked on the corporate HSE data base.

Market Risk Information

The Company is currently exposed to market risk from changes in foreign currency rates and changes in interest rates. A discussion of the Company’s market risk exposure in financial instruments follows.

Foreign Currency Exchange Rates

A large portion of the Company’s operations consist of manufacturing and sales activities in foreign jurisdictions, principally in Europe, Canada, West Africa, the Middle East, Latin America and the Pacific Rim. As a result, the Company’s financial performance may be affected by changes in foreign currency exchange rates in these markets. Overall, for those locations where the Company is a net receiver of local non-U.S. dollar currencies, Cameron generally benefits from a weaker U.S. dollar with respect to those currencies. Alternatively, for those locations where the Company is a net payer of local non-U.S. dollar currencies, a weaker U.S. dollar with respect to those currencies will generally have an adverse impact on the Company’s financial results. The impact on the Company’s financial results of gains or losses arising from foreign currency denominated transactions, if material, have been described under “Results of Operations” in this Management’s Discussion and Analysis of Financial Condition and Results of Operations for the periods shown.

In order to mitigate the effect of exchange rate changes, the Company will often attempt to structure sales contracts to provide for collections from customers in the currency in which the Company incurs its manufacturing costs. In certain instances, the Company will enter into foreign currency forward contracts to hedge specific large anticipated receipts or disbursements in currencies for which the Company does not traditionally have fully offsetting local currency expenditures or receipts. The Company was party to a number of long-term foreign currency forward contracts at December 31, 2010. The purpose of the majority of these contracts was to hedge large anticipated non-functional currency cash flows on major subsea, drilling, valve or other equipment contracts involving the Company& #8217;s United States operations and its wholly-owned subsidiaries in Italy, Romania, Singapore and the United Kingdom. At December 31, 2010, the Company was also party to certain foreign currency forward and foreign currency option contracts that have not been accounted for as hedges under the accounting rules for derivatives and hedging activities, involving underlying foreign currency denominated accounts recorded on the balance sheet of its wholly-owned subsidiary in Canada or anticipated foreign currency cash flows of its wholly-owned subsidiary in Italy.

47

Capital Markets and Interest Rates 

The Company is subject to interest rate risk on its variable-interest rate borrowings and interest rate swaps. Variable-rate debt, where the interest rate fluctuates periodically, exposes the Company’s cash flows to variability due to changes in market interest rates. Additionally, the fair value of the Company’s fixed-rate debt changes with market interest rates.

The Company manages its debt portfolio to achieve an overall desired position of fixed and floating rates and employs interest rate swaps as a tool to achieve that goal. The major risks from interest rate derivatives include changes in the interest rates affecting the fair value of such instruments, potential increases in interest expense due to market increases in floating interest rates and the creditworthiness of the counterparties in such transactions.

The fair values of the 6.375% 10-year Senior Notes and the 7.0% 30-year Senior Notes are principally dependent on prevailing interest rates.  The fair value of the 2.5% Convertible Debentures is principally dependent on prevailing interest rates and the Company’s current share price as it relates to the initial conversion price of the instrument.

The Company has various other long-term debt instruments, but believes that the impact of changes in interest rates in the near term will not be material to these instruments.

In October 2009, the Company entered into two interest rate swaps, which effectively converted $400 million of 6.375% fixed-rate borrowings into variable-rate debt based on a spread of approximately 4.79% over the current three-month London Interbank Offered Rate (LIBOR).  On July 23, 2010, the Company entered into a third interest rate swap which effectively locked in a significant portion of the gain from those earlier swaps to reduce the Company’s rate on $400 million of its 6.375% fixed-rate borrowings to an effective fixed interest rate of approximately 5.49% through January 15, 2012, the maturity date of all three swaps.   Each of the swaps provides for semiannual interest payments and receipts each January 15 and July 15 and provides for resets of the three-month LIBOR rate to the then existing rate each January 15, April 15, July 15 and October 15.  The fair value of the interest rate swaps is affected by changes in quoted three-month LIBOR rates.  At December 31, 2010, these three swaps had a fair value of approximately $4.8 million to the benefit of the Company.

The Company is subject to refinancing risk on the $500.0 million principal amount of its 2.5% Convertible Debentures that have been classified in the current portion of long-term debt on its Consolidated Balance Sheet at December 31, 2010.  If the holders of the 2.5% Convertible Debentures put the debentures back to the Company on June 15, 2011 as allowed under the terms of the debentures, and if the Company chooses to refinance the repayment of these debentures in whole or in part in the capital markets, prevailing interest rates at that time could have an impact on the Company’s liquidity and future interest costs.

The Company has performed a sensitivity analysis to determine how market interest rate changes might affect the fair value of its debt. This analysis is inherently limited because it represents a singular, hypothetical set of assumptions. Actual market movements may vary significantly from the assumptions. The effects of market movements may also directly or indirectly affect the Company’s assumptions and its rights and obligations not covered by the sensitivity analysis. Fair value sensitivity is not necessarily indicative of the ultimate cash flow or the earnings effect from the assumed market rate movements. 

An instantaneous one-percentage-point decrease in interest rates across all maturities and applicable yield curves would have increased the fair value of the Company’s fixed-rate debt positions by approximately $82.4 million at December 31, 2010 ($90.5 million at December 31, 2009), whereas a one-percentage-point increase in interest rates would have decreased the fair value of the Company’s fixed-rate debt by $71.4 million at December 31, 2010 ($78.6 million at December 31, 2009).  A one-percentage-point decrease in floating interest rates would have decreased the fair value of the Company’s interest rate swaps by $0.3 million at December 31, 2010 ($8.0 million increase at December 31, 2009), whereas a one-percentage-point increase in floating interest rates w ould have increased the fair value of the Company’s interest rate swaps by $0.3 million at December 31, 2010 ($6.6 million decrease at December 31, 2009).  This analysis does not reflect the effect that increasing or decreasing interest rates would have on other items, such as new borrowings, nor the impact they would have on interest expense and cash payments for interest. 

Derivatives Activity

Total gross volume bought (sold) by notional currency and maturity date on open derivative contracts at December 31, 2010 was as follows (in millions):

Notional Amount - Swaps

Notional Amount - Buy

Notional Amount - Sell

2011

2012

Total

2011

2012

Total

2011

2012

Total

FX Forward Contracts

Notional     currency in:

EUR

–

–

–

37.9

–

37.9

(28.1

)

–

(28.1

)

GBP

–

–

–

1.4

–

1.4

(7.0

)

–

(7.0

)

MYR

–

–

–

12.9

–

12.9

–

–

–

NOK

–

–

–

18.6

–

18.6

–

–

–

SGD

–

–

–

4.0

–

4.0

–

–

–

USD

–

–

–

–

–

–

(42.6

)

(0.3

)

(42.9

)

FX Options

USD

–

–

–

–

–

–

2.5

–

2.5

Interest Rate Swaps

USD

–

800.0

800.0

–

–

–

–

–

–

As described further in Note 18 of the Notes to Consolidated Financial Statements, the net fair value of the Company’s outstanding derivatives was a $5.1 million benefit to the Company at December 31, 2010, as compared to a net liability to the Company of $2.3 million at December 31, 2009.

48

Fair Value of Financial Instruments

The Company had $1.4 billion of cash equivalents at December 31, 2010 and 2009.  Cash equivalents represents investments purchased with original maturities of three months or less.  Certain of these investments are valued based upon quoted market prices which represent level 1 market inputs.

The fair value of the Company’s foreign exchange forward and option contracts are based on quoted exchange rates for the respective currencies applicable to similar instruments.  The fair value of the Company’s interest rate swaps are determined based on changes in quoted three-month LIBOR rates.  Both of these valuation methods are based on level 2 observable market inputs.

The Company’s international pension plans have assets available to fund future pension obligations totaling $261.3 million at December 31, 2010 ($242.2 million at December 31, 2009).  The majority of these assets are invested in debt and equity securities or mutual funds, which are valued based on quoted market prices for an individual asset (level 1 market inputs), or mutual fund unit values, which are based on the fair values of the individual securities that the fund has invested in (level 2 observable market inputs).  A small portion of the assets are invested in insurance contracts, real estate and other investments, which are valued based on level 3 unobservable inputs (see Note 8 of the Notes to Consolidated Financial Statements for further information).

The values of these assets are subject to change, based generally on changes in market conditions involving foreign exchange rates, interest rates and debt and equity security investment pricing.

49

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company maintains a system of internal controls that is designed to provide reasonable but not absolute assurance as to the reliable preparation of the consolidated financial statements. The Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Be cause of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of errors or fraud, if any, within Cameron have been detected. 

The control environment of Cameron is the foundation for its system of internal controls over financial reporting and is embodied in the Company’s Standards of Conduct. It sets the tone of the Company’s organization and includes factors such as integrity and ethical values. The Company’s internal controls over financial reporting are supported by formal policies and procedures that are reviewed, modified and improved as changes occur in the Company’s business or as otherwise required by applicable rule-making bodies. 

The Audit Committee of the Board of Directors, which is composed solely of outside directors, meets periodically with members of management, the internal audit department and the independent registered public accountants to review and discuss internal controls over financial reporting and accounting and financial reporting matters. The independent registered public accountants and the internal audit department report to the Audit Committee and accordingly have full and free access to the Audit Committee at any time.

Assessment of Internal Control Over Financial Reporting

Cameron’s management is responsible for establishing and maintaining adequate internal control (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) over financial reporting. 

Management conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework established in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included a review of the documentation surrounding the Company’s financial controls, an evaluation of the design effectiveness of these controls, testing of the operating effectiveness of these controls and a conclusion on this evaluation. Although there are inherent limitations in the effectiveness of any system of internal controls over financial reporting – including the possibility of the circumvention or overriding of controls – based on management’s evaluation, mana gement has concluded that the Company’s internal controls over financial reporting were effective as of December 31, 2010, based on the framework established in “Internal Control – Integrated Framework”. However, because of changes in conditions, it is important to note that internal control system effectiveness may vary over time. 

In conducting management’s evaluation of the effectiveness of the Company’s internal controls over financial reporting, the two businesses acquired during 2010 for a total purchase price of $40.9 million, as more fully described in Note 2 of the Notes to Consolidated Financial Statements, were excluded.  These operations accounted for less than 2% of the Company’s consolidated revenues, income before income taxes and total assets as of and for the year ended December 31, 2010.

Ernst & Young LLP, an independent registered public accounting firm that has audited the Company’s financial statements as of and for the three-year period ended December 31, 2010, has issued a report on their audit of management’s internal control over financial reporting, which is included herein.

/s/ Jack B. Moore                                      

Jack B. Moore 

President and

Chief Executive Officer

Date:  February 28, 2011

/s/ Charles M. Sledge                                

Charles M. Sledge

Senior Vice President and

Chief Financial Officer

Date:  February 28, 2011

50

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

Cameron International Corporation

We have audited the internal control over financial reporting of Cameron International Corporation (the Company) as of December 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations o f management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of two businesses acquired during 2010 for a total purchase price of $40.9 million, as more fully described in Note 2 of the Notes to Consolidated Financial Statements, which are included in the 2010 consolidated financial statements of the Company and constituted less than 2% of the Company’s consolidated revenues, income before income taxes and total assets as of and for the year ended December 31, 2010.  Our audit of internal control over financial reporting of the Company also did not include the evaluation of the internal control over financial reporting of the t wo businesses acquired during 2010 as referred to above.

In our opinion, Cameron International Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of December 31, 2010 and 2009, and the related statements of consolidated results of operations, cash flows and changes in stockholders’ equity for each of the three years in the period ended December 31, 2010 and our report dated February 28, 2011 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Houston, Texas

February 28, 2011

51

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

Cameron International Corporation

We have audited the accompanying consolidated balance sheets of Cameron International Corporation (the Company) as of December 31, 2010 and 2009, and the related statements of consolidated results of operations, cash flows and changes in stockholders’ equity for each of the three years in the period ended December 31, 2010.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cameron International Corporation at December 31, 2010 and 2009, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2011 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Houston, Texas

February 28, 2011

52

Consolidated Results of Operations

	Year Ended December 31,
(dollars in millions, except per share data)	2010			2009			2008
Revenues	$	6,134.8		$	5,223.2		$	5,848.9
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown separately below)		4,212.4			3,540.1			4,127.9
Selling and administrative expenses		862.3			715.6			668.3
Depreciation and amortization		201.6			156.6			132.1
Interest income		(4.2	)		(5.9	)		(27.3	)
Interest expense		82.2			92.4			70.3
Other costs (see Note 3)		47.2			81.6			−
Charge for pension plan termination		−			−			26.2
Total costs and expenses		5,401.5			4,580.4			4,997.5
Income before income taxes		733.3			642.8			851.4
Income tax provision		(170.4	)		(167.3	)		(270.7	)
Net income	$	562.9		$	475.5		$	580.7
Earnings per common share:
Basic	$	2.32		$	2.15		$	2.67
Diluted	$	2.27		$	2.11		$	2.54

The Notes to Consolidated Financial Statements are an integral part of these statements.

53

Consolidated Balance Sheets

	December 31,
(dollars in millions, except  shares and per share data)	2010			2009
Assets
Cash and cash equivalents	$	1,832.5		$	1,861.0
Receivables, net		1,056.1			959.0
Inventories, net		1,779.3			1,664.2
Other		265.0			230.0
Total current assets		4,932.9			4,714.2
Plant and equipment, net		1,247.8			1,192.4
Goodwill		1,475.8			1,441.6
Other assets		348.6			377.2
Total assets	$	8,005.1		$	7,725.4
Liabilities and stockholders’ equity
Current portion of long-term debt	$	519.9		$	22.2
Accounts payable and accrued liabilities		2,016.0			2,208.2
Accrued income taxes		38.0			65.9
Total current liabilities		2,573.9			2,296.3
Long-term debt		772.9			1,232.3
Deferred income taxes		95.7			123.0
Other long-term liabilities		170.2			154.1
Total liabilities		3,612.7			3,805.7
Commitments and contingencies		−			−
Stockholders’ equity:
Common stock, par value $.01 per share, 400,000,000 shares authorized,  263,111,472 shares issued at December 31, 2010 and 2009		2.6			2.6
Preferred stock, par value $.01 per share, 10,000,000 shares authorized, no shares issued or outstanding		−			−
Capital in excess of par value		2,259.3			2,244.0
Retained earnings		2,848.3			2,285.4
Accumulated other elements of comprehensive income		(27.1	)		9.5
Less: Treasury stock at cost, 19,197,642 shares at December 31, 2010 and 18,453,758 shares at December 31, 2009		(690.7	)		(621.8	)
Total stockholders’ equity		4,392.4			3,919.7
Total liabilities and stockholders’ equity	$	8,005.1		$	7,725.4

The Notes to Consolidated Financial Statements are an integral part of these statements.

54

Consolidated Cash Flows

	Year Ended December 31,
(dollars in millions)	2010			2009			2008
Cash flows from operating activities:
Net income	$	562.9		$	475.5		$	580.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		142.6			114.7			98.7
Amortization		59.0			41.9			33.4
Non-cash charge for pension plan termination		−			−			26.2
Non-cash stock compensation expense		34.5			27.7			35.6
Tax benefit of employee stock compensation plan transactions and deferred income taxes		(19.1	)		(35.8	)		1.9
Changes in assets and liabilities, net of translation, acquisitions and non-cash items:
Receivables		(81.4	)		165.2			(157.9	)
Inventories		(3.8	)		(220.9	)		(9.3	)
Accounts payable and accrued liabilities		(291.7	)		139.8			279.0
Other assets and liabilities, net		(108.8	)		(94.6	)		99.2
Net cash provided by operating activities		294.2			613.5			987.5
Cash flows from investing activities:
Capital expenditures		(200.7	)		(240.9	)		(272.2	)
Acquisitions, net of cash acquired		(40.9	)		11.2			(191.7	)
Proceeds from sale of plant and equipment		12.4			4.1			3.9
Net cash used for investing activities		(229.2	)		(225.6	)		(460.0	)
Cash flows from financing activities:
Short-term loan borrowings (repayments), net		(8.4	)		(18.9	)		31.8
Redemption of convertible debt securities		−			(131.1	)		(106.9	)
Issuance of long-term senior notes		−			−			747.9
Debt issuance costs		−			−			(5.5	)
Purchase of treasury stock		(124.0	)		(29.2	)		(279.4	)
Proceeds from stock option exercises, net of tax payments from stock compensation plan transactions		36.3			10.2			17.6
Excess tax benefits from employee stock compensation plan transactions		16.4			6.4			17.0
Principal payments on capital leases		(6.6	)		(6.7	)		(7.4	)
Net cash provided by (used for) financing activities		(86.3	)		(169.3	)		415.1
Effect of translation on cash		(7.2	)		21.4			(61.5	)
Increase (decrease) in cash and cash equivalents		(28.5	)		240.0			881.1
Cash and cash equivalents, beginning of year		1,861.0			1,621.0			739.9
Cash and cash equivalents, end of year	$	1,832.5		$	1,861.0		$	1,621.0

The Notes to Consolidated Financial Statements are an integral part of these statements.

55

Consolidated Changes in Stockholders’ Equity

(dollars in millions)	Common Stock		Capital in Excess of Par value			Retained Earnings		Accumulated Other Elements of Comprehensive Income			Treasury Stock			Total
Balance ― December 31, 2007		2.4		1,227.3			1,229.0		101.0			(426.0	)		2,133.7
Net income							580.7								580.7
Foreign currency translation									(169.4	)					(169.4	)
Loss on treasury locks, net of amortization and taxes									(1.2	)					(1.2	)
Change in fair value of derivatives accounted for as cash flow hedges, net of $26.9 in taxes									(47.2	)					(47.2	)
Other comprehensive income from derivative transactions recognized in current year earnings, net of $1.4 in taxes									3.3						3.3
Pension settlement loss, net of $9.7 in taxes									16.5						16.5
Impact after currency effects of actuarial gains/losses and plan amendments, net of $3.9 in taxes									7.9						7.9
Amortization of net actuarial losses and prior service credits, net of $2.3 in taxes									5.2						5.2
Comprehensive income															395.8
Adjustment for change in measurement date for post- retirement benefit plans							0.2		(0.3	)					(0.1	)
Non-cash stock compensation expense				35.6											35.6
Purchase of treasury stock												(259.9	)		(259.9	)
Treasury stock issued under stock option and other employee benefit plans				(30.2	)							47.7			17.5
Tax benefit of employee stock compensation plan transactions				22.6											22.6
Adjustment to conversion option resulting from conversion of convertible debt, net of taxes				(0.7	)										(0.7	)
Balance ― December 31, 2008		2.4		1,254.6			1,809.9		(84.2	)		(638.2	)		2,344.5
Net income							475.5								475.5
Foreign currency translation									86.6						86.6
Change in fair value of derivatives accounted for as cash flow hedges, net of $6.7 in taxes									11.3						11.3
Other comprehensive income from derivative transactions recognized in current year earnings, net of $9.6 in taxes									16.2						16.2
Impact after currency effects of actuarial gains/losses, net of $9.7 in taxes									(23.0	)					(23.0	)
Amortization of net actuarial losses and prior service credits, net of $0.6 in taxes									2.4						2.4
Pension settlement loss									0.2						0.2
Comprehensive income															569.2
Equity securities issued for purchase of NATCO		0.2		982.1								6.2			988.5
Non-cash stock compensation expense				27.7											27.7
Purchase of treasury stock												(29.2	)		(29.2	)
Treasury stock issued under stock option and other employee benefit plans				(30.1	)							39.4			9.3
Tax benefit of employee stock compensation plan transactions				9.7											9.7

Balance ― December 31, 2009		2.6		2,244.0			2,285.4		9.5			(621.8	)		3,919.7
Net income		–		–			562.9		–			–			562.9
Foreign currency translation		–		–			–		(50.1	)		–			(50.1	)
Change in fair value of derivatives accounted for as cash flow hedges, net of $2.9 in taxes		–		–			–		(6.1	)		–			(6.1	)
Other comprehensive income from derivative transactions recognized in current year earnings, net of $5.2 in taxes									11.6						11.6
Impact after currency effects of actuarial gains/losses, net of $2.9 in taxes									4.5						4.5
Amortization of net actuarial losses and prior service credits, net of $1.1 in taxes		–		–			–		3.5			–			3.5
Comprehensive income															526.3
Non-cash stock compensation expense		–		34.5			–		–			–			34.5
Purchase of treasury stock		–		–			–		–			(124.0	)		(124.0	)
Treasury stock issued under stock option and other employee benefit plans		–		(32.5	)		–		–			67.9			35.4
Tax benefit of employee stock compensation plan transactions		–		17.4			–		–			–			17.4
NATCO purchase price allocation adjustment				(4.1	)							(12.8	)		(16.9	)
Balance ― December 31, 2010	$	2.6	$	2,259.3		$	2,848.3	$	(27.1	)	$	(690.7	)	$	4,392.4

The Notes to Consolidated Financial Statements are an integral part of these statements.

56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of Major Accounting Policies

   Company Operations — Cameron International Corporation (Cameron or the Company) provides flow equipment products, systems and services to worldwide oil, gas and process industries. Products include oil and gas pressure control and separation equipment, including valves, wellheads, manifolds, controls, chokes, blowout preventers and assembled systems for oil and gas drilling, production and transmission processes used in onshore, offshore and subsea applications. Cameron also manufactures and services air and gas compressors and turbochargers. 

During the third quarter of 2010, the Company restructured its business segments, moving its Process Systems division from the Drilling & Production Systems (DPS) segment to a newly formed business segment, Process & Compression Systems (PCS), in order to enhance the Company’s processing solutions that are available to customers involved in the exploration, production, storage and transmission of crude oil and natural gas.  PCS also includes the businesses that were previously part of the Compression Systems segment.  All financial data included in this Annual Report to Shareholders relating to DPS and PCS have been retrospectively revised based on the new segment structure of the Company.  The Company’s other business segment is Valves &a mp; Measurement (V&M).  Additional information regarding each segment may be found in Note 15 of the Notes to Consolidated Financial Statements.

Principles of Consolidation — The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. Investments from 20% to 50% in affiliated companies are accounted for using the equity method.

Estimates in Financial Statements— The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, estimates of total contract profit or loss on certain long-term production contracts, estimated losses on accounts receivable, estimated realizable value on excess and obsol ete inventory, contingencies, including tax contingencies, estimated liabilities for litigation exposures and liquidated damages, estimated warranty costs, estimates related to pension accounting, estimates related to the fair value of reporting units for purposes of assessing goodwill for impairment, estimated proceeds from assets held for sale and estimates related to deferred tax assets and liabilities, including valuation allowances on deferred tax assets. Actual results could differ materially from these estimates. 

Revenue Recognition— The Company generally recognizes revenue, net of sales taxes, once the following four criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery of the equipment has occurred or services have been rendered, (iii) the price of the equipment or service is fixed and determinable and (iv) collectibility is reasonably assured. For certain engineering, procurement and construction-type contracts, which typically include the Company’s subsea and drilling systems and processing equipment contracts, revenue is recognized in accordance with accounting rules relating to construction-type and production-type contracts. Under this guidance, the Company recognizes revenue on these contracts using a units-of-completion method. Under the units-of-completion method, revenue is recognized once the manufacturing process is complete for each unit specified in the contract with the customer, including customer inspection and acceptance, if required by the contract.  This method requires the Company to make estimates regarding the total costs of the project, which impacts the amount of gross margin the Company recognizes in each reporting period.  The Company routinely, and at least quarterly, reviews its estimates relating to total estimated contract profit or loss and recognizes changes in those estimates as they are determined.  Revenue associated with change orders is not included in the calculation of estimated profit on a contract until approved by the customer.  Costs associated with unapproved change orders are deferred if (i) the customer acknowledges a change has occurred and (ii) i t is probable that the costs will be recoverable from the customer.  If these two conditions are not met, the costs are included in the calculation of estimated profit on the project.  Anticipated losses on contracts are recorded in full in the period in which they become evident.

Approximately 36%, 28% and 28% of the Company's revenues for the years ended December 31, 2010, 2009 and 2008, respectively, were recognized under the accounting rules for construction-type and production-type contracts.

Shipping and Handling Costs— Shipping and handling costs are reflected in the caption entitled “Cost of sales (exclusive of depreciation and amortization shown separately below)” in the accompanying Consolidated Results of Operations statements. 

Cash Equivalents — The Company considers all investments purchased with original maturities of three months or less to be cash equivalents. 

Allowance for Doubtful Accounts — The Company maintains allowances for doubtful accounts for estimated losses that may result from the inability of its customers to make required payments. Such allowances are based upon several factors including, but not limited to, historical experience, the length of time an invoice has been outstanding, responses from customers relating to demands for payment and the current and projected financial condition of specific customers. 

Inventories— Aggregate inventories are carried at cost or, if lower, net realizable value. On the basis of current costs, 46% of inventories at December 31, 2010 and 48% at December 31, 2009 are carried on the last-in, first-out (LIFO) method. For these locations, the use of LIFO results in a better matching of costs and revenues. The remaining inventories, which are generally located outside the United States and Canada, are carried on the first-in, first-out (FIFO) method. The Company provides a reserve for estimated inventory obsolescence or excess quantities on hand equal to the difference between the cost of the inventory and its estimated r ealizable value.

57

Plant and Equipment— Property, plant and equipment, both owned and under capital lease, are carried at cost. Maintenance and repair costs are expensed as incurred. The cost of renewals, replacements and betterments is capitalized. The Company capitalizes software developed or obtained for internal use. Accordingly, the cost of third-party software, as well as the cost of third-party and internal personnel that are directly involved in application development activities, are capitalized during the application development phase of new software systems projects. Costs during the preliminary project stage and post-implementation stage of new software systems projects, including data conversion and training costs, are expensed as incurred. Depreciation and amortization is provided over the estimated useful lives of the related assets, or in the case of assets under capital leases, over the related lease term, if less, using the straight-line method. The estimated useful lives of the major classes of property, plant and equipment are as follows:

	Estimated Useful Lives
Buildings and leasehold improvements	10-40years
Machinery, equipment and tooling	3-18years
Office furniture, software and other	3-10years

Goodwill —The Company reviews the carrying value of goodwill in accordance with accounting rules on impairment of goodwill, which require that the Company estimate the fair value of each of its reporting units annually, or when impairment indicators exist, and compare such amounts to their respective carrying values to determine if an impairment of goodwill is required.  Generally, this review is conducted during the first quarter of each annual period.  Based upon the most recent annual evaluation, no impairment of goodwill was required.  The estimated fair value of each reporting unit for the 2010, 2009 and 2008 evaluations was determined using discounted future expected cash flows (level 3 unobservable inputs) or other market-related valuation models consistent with the accounting guidance for fair-value measurements. Certain estimates and judgments are required in the application of the fair value models, including, but not limited to, estimates of future cash flows and the selection of a discount rate.  The Company’s reporting units for goodwill impairment evaluation purposes are the Drilling, Surface, Subsea and Flow Control product lines of the DPS segment, the Engineered Valves, Distributed Valves, Process Valves, Measurement Systems product lines and the Aftermarket Services business of the V&M segment and the Process Systems, Reciprocating and Centrifugal Compression product lines of the PCS segment.

Intangible Assets— The Company’s intangible assets, excluding goodwill, represent purchased patents, trademarks, customer lists and other identifiable intangible assets. The majority of intangible assets are amortized on a straight-line basis over the years expected to be benefited, generally ranging from 5 to 20 years. Such intangibles are tested for recoverability whenever events or changes in circumstances indicate that their carrying value may not be recoverable. As many areas of the Company’s business rely on patents and proprietary technology, it has followed a policy of seeking patent protection both inside and outsid e the United States for products and methods that appear to have commercial significance. The costs of developing any intangibles internally, as well as costs of defending such intangibles, are expensed as incurred. No material impairment of intangible assets was required during the years ended December 31, 2010, 2009 or 2008.

Long-Lived Assets — In accordance with accounting rules for the impairment or disposal of long-lived assets, such assets, excluding goodwill and indefinite-lived intangibles, to be held and used by the Company are reviewed to determine whether any events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. For long-lived assets to be held and used, the Company bases its evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such impairment indicators are present or other fac tors exist that indicate the carrying amount of the asset may not be recoverable, the Company determines whether an impairment has occurred through the use of an undiscounted cash flow analysis of the asset at the lowest level for which identifiable cash flows exist. If an impairment has occurred, the Company recognizes a loss for the difference between the carrying amount and the fair value of the asset. Assets are classified as held for sale when the Company has a plan for disposal of such assets and those assets are stated at estimated fair value less estimated costs to sell.  No material impairment of long-lived assets was required during the years ended December 31, 2010, 2009 or 2008.

Product Warranty— Estimated warranty costs are accrued either at the time of sale based upon historical experience or, in some cases, when specific warranty problems are encountered. Adjustments to the recorded liability are made periodically to reflect actual experience. 

Contingencies — The Company accrues for costs relating to litigation, including litigation defense costs, claims and other contingent matters, including liquidated damage liabilities, when such liabilities become probable and reasonably estimable. Such estimates may be based on advice from third parties, amounts specified by contract, amounts designated by legal statute or management’s judgment, as appropriate. Revisions to contingent liability reserves are reflected in income in the period in which different facts or information become known or circumstances change that affect the Company’s previous assumptions with respect to the likelihood or amount of loss. Amounts paid upon the ult imate resolution of contingent liabilities may be materially different from previous estimates and could require adjustments to the estimated reserves to be recognized in the period such new information becomes known. 

58

Income Taxes— The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Income tax expense includes U.S. and foreign income taxes, including U.S. federal taxes on undistributed earnings of foreign subsidiaries to the extent such earnings are planned to be remitted. Taxes are not provided on the translation component of comprehensive income since the effect of translation is not considered to modify the amount of the earnings that are planned to be remitted. 

The Company accounts for uncertainties in its income tax positions in accordance with income tax accounting rules.  Interest related to an underpayment of income taxes is reflected as a component of interest expense in the Consolidated Results of Operations statement. Penalties on a tax position taken by the Company are reflected as a component of income tax expense in the Consolidated Results of Operations statement. See Note 12 of the Notes to Consolidated Financial Statements for further discussion of the Company’s income taxes.

Environmental Remediation and Compliance — Environmental remediation and postremediation monitoring costs are accrued when such obligations become probable and reasonably estimable. Such future expenditures are not discounted to their present value. 

Pension and Postretirement Benefits Accounting— The Company recognizes the funded status of its defined benefit pension and other postretirement benefit plans in its Consolidated Balance Sheets.  The measurement date for all of the Company’s plans was December 31, 2010.

Stock-Based Compensation— At December 31, 2010, the Company had nine stock-based employee compensation plans, which are described in further detail in Note 9 of the Notes to Consolidated Financial Statements. Compensation expense for the Company’s stock-based compensation plans is measured using the fair value method required by accounting rules on stock compensation. Under this guidance, the fair value of stock option grants and restricted stock unit awards is amortized to expense using the straight-line method over the shorter of the vesting period or the remaining employee service period. 

Derivative Financial Instruments— Consistent with accounting guidance for derivative instruments and hedging activities, the Company recognizes all derivative financial instruments as assets and liabilities on a gross basis and measures them at fair value.  Hedge accounting is only applied when the derivative is deemed highly effective at offsetting changes in anticipated cash flows of the hedged item or transaction. Changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other elements of comprehensive income until the underlying transactions are recognized in earnings, at which time any deferred hedging gains or losses are also recorded in earnings on the same line as the hedged item. Any ineffective portion of the change in the fair value of a derivative used as a cash flow hedge is recorded in earnings as incurred. The amounts recorded in earnings from ineffectiveness for the years ended December 31, 2010, 2009 and 2008 have not been material. The Company may at times also use forward or option contracts to hedge foreign currency assets and liabilities. These contracts are not designated as hedges under the accounting guidance described above.  Therefore, the changes in fair value of these contracts are recognized in earnings as they occur and offset gains or losses on the related asset or liability. 

The Company will also periodically use interest rate swaps to modify the interest characteristics of some or all of its fixed or floating rate debt.  As these interest rate swaps are not designated as hedges, changes in the fair value of these derivatives are recognized as an adjustment to interest expense as they occur.

Foreign Currency — For most subsidiaries and branches outside the U.S., the local currency is the functional currency.  The financial statements of these subsidiaries and branches are translated into U.S. dollars as follows: (i) assets and liabilities at year-end exchange rates; (ii) income, expenses and cash flows at monthly average exchange rates; and (iii) stockholders’ equity at historical exchange rates. For those subsidiaries for which the local currency is the functional currency, the resulting translation adjustment is recorded as a component of accumulated other elements of comprehensive income in the accompanying Consolidated Balance Sheets. 

For certain other subsidiaries and branches, operations are conducted primarily in currencies other than the local currencies, which are therefore the functional currency. Non-functional currency monetary assets and liabilities are remeasured at ending exchange rates. Revenue, expense and gain and loss accounts of these foreign subsidiaries and branches are remeasured at average exchange rates. Non-functional currency non-monetary assets and liabilities, and the related revenue, expense, gain and loss accounts are remeasured at historical rates. 

Foreign currency gains and losses arising from monetary transactions denominated in a currency other than the functional currency of the entity involved are included in income. The effects of foreign currency transactions were a gain of $11.9 million for the year ended December 31, 2010 and losses of $19.4 million and $0.3 million for the years ended December 31, 2009, and 2008 respectively.

Note 2: Acquisitions

During the year ended December 31, 2010, the Company acquired the assets or shares in the capital stock of two businesses for a total purchase price of $40.9 million.  These businesses were acquired to enhance the Company’s product offerings in the DPS and V&M segments.  The two acquisitions were included in the Company’s consolidated financial statements for the periods subsequent to the acquisitions.  As of December 31, 2010, preliminary goodwill recorded as a result of these acquisitions totaled approximately $23.8 million.  Under the terms of the acquisition recorded in the V&M segment, the Company has the right and obligation under various conditions to purchase the remaining 49% capital stock interest it does not currently own.  The Company has reflected a liability in its consolidated balance sheet for the fair value of the remaining 49% interest the Company is required to purchase.  The Company is still awaiting certain information relating to the fair value of the assets and liabilities of both acquisitions in order to finalize its purchase price allocations.

59

The Company acquired 100% of the outstanding stock of NATCO Group Inc. (NATCO) on November 18, 2009.  NATCO designed, manufactured and marketed oil and gas production equipment and separation systems. NATCO products and services have been used onshore and offshore, upstream and downstream, in most major oil and gas producing regions of the world. The Company believes that gaining access to NATCO’s separation and processing technology, products and services will significantly enhance its business as a provider of flow equipment, systems, and services in the oil and gas industry   ;The majority of the NATCO operations have been included in the PCS segment.

The Company has finalized its estimates and assumptions related to the fair value of inventory, property, plant and equipment, identifiable intangible assets, goodwill, certain pre-acquisition contingencies and related adjustments to deferred taxes as of December 31, 2010.

The following table displays the final purchase price allocated to NATCO’s net tangible and identifiable intangible assets based on their estimated fair values as of the acquisition date as of December 31, 2010 in comparison to the preliminary purchase price allocation as of December 31, 2009 (dollars in millions):

	Final Allocation as of December 31, 2010			Preliminary Allocation as of December 31, 2009
Cash	$	34.4		$	34.4
Accounts receivable		145.5			157.0
Inventory		132.9			57.9
Other current assets		22.0			13.1
Property, plant and equipment		105.4			103.7
Goodwill		742.9			731.4
Intangibles		153.1			147.9
Other non-current assets		3.4			25.7
Accounts payable and accrued liabilities		(287.9	)		(203.0	)
Deferred tax liabilities		(55.8	)		(56.2	)
Other non-current liabilities		(24.3	)		(23.4	)
Total estimated purchase price	$	971.6		$	988.5

Other Acquisitions

During 2009, the Company also acquired the assets or capital stock of two other businesses for a total cash purchase price of $23.2 million.  These businesses were acquired to enhance the Company’s product offerings or aftermarket services in the DPS and V&M segments. The two acquisitions were included in the Company’s consolidated financial statements for the periods subsequent to the acquisitions. Goodwill recorded as a result of these acquisitions was approximately $9.8 million, of which $3.3 million will be deductible for income tax purposes.

During 2008, the Company acquired the assets or capital stock of seven businesses for a total cash purchase price of $191.7 million. These businesses were acquired to enhance the Company’s product offerings and to strengthen the Company’s ability to deliver a broader range of solutions to its customers in the DPS segment’s drilling, surface and flow control businesses and in the V&M segment’s measurement business. Total goodwill recorded from these acquisitions was approximately $72.6 million.

Note 3: Other Costs

Other costs consist of the following:

	Year Ended December 31,
(dollars in millions)	2010		2009
Employee severance	$	8.8	$	61.0
NATCO integration costs		22.0		–
Deepwater Horizon legal costs		12.5		–
Acquisition and restructuring costs		3.9		20.6
Total other costs	$	47.2	$	81.6

NATCO integration costs consist of costs incurred for the integration of NATCO’s operations with the existing operations of the Company, primarily reflecting the costs associated with converting NATCO’s legacy operations to the Company’s SAP information systems.  Acquisition and restructuring costs consist primarily of costs related to the 2009 acquisition of NATCO as well as various other acquisitions and certain facility-related costs associated with restructuring of the Company’s operations in response to changes in market conditions.

60

Note 4: Receivables

Receivables consisted of the following:

	December 31,
(dollars in millions)	2010			2009
Trade receivables	$	991.2		$	907.1
Other receivables		78.9			67.7
Allowance for doubtful accounts		(14.0	)		(15.8	)
Total receivables	$	1,056.1		$	959.0

Note 5: Inventories

Inventories consisted of the following:

	December 31,
(dollars in millions)	2010			2009
Raw materials	$	166.5		$	168.6
Work-in-process		575.9			484.0
Finished goods, including parts and subassemblies		1,190.5			1,167.8
Other		12.1			11.5
		1,945.0			1,831.9
Excess of current standard costs over LIFO costs		(97.7	)		(108.8	)
Allowance for obsolete and excess inventory		(68.0	)		(58.9	)
Total inventories	$	1,779.3		$	1,664.2

Note 6: Plant and Equipment, Goodwill and Other Assets

Plant and equipment consisted of the following:

	December 31,
(dollars in millions)	2010			2009
Land and land improvements	$	73.8		$	60.9
Buildings		493.4			477.9
Machinery and equipment		1,040.9			988.5
Tooling, dies, patterns, etc.		148.3			127.3
Office furniture & equipment		140.0			107.9
Capitalized software		156.1			178.4
Assets under capital leases		46.2			29.7
Construction in progress		145.0			110.0
All other		42.2			26.8
		2,285.9			2,107.4
Accumulated depreciation		(1,038.1	)		(915.0	)
Total plant and equipment, net	$	1,247.8		$	1,192.4

Changes in goodwill during 2010 were as follows:

(dollars in millions)	DPS			V&M		PCS			Total
Balance at December 31, 2009	$	288.6		$	297.3	$	855.7		$	1,441.6
Current year acquisitions		9.1			14.7		−			23.8
Changes primarily associated with adjustments to prior year acquisitions –related to finalization of purchase price allocations		15.6			10.6		(12.8	)		13.4
Translation and other		(6.9	)		0.2		3.7			(3.0	)
Balance at December 31, 2010	$	306.4		$	322.8	$	846.6		$	1,475.8

61

Other assets consisted of the following:

	December 31,
(dollars in millions)	2010			2009
Deferred income taxes	$	41.2		$	35.4
Other intangibles:
Gross:
Customer lists		118.0			115.0
Patents and technology		102.3			100.4
Trademarks		53.2			51.2
Noncompete agreements, engineering drawings and other		82.6			70.1
Accumulated amortization		(100.1	)		(69.1	)
Other		51.4			74.2
Total other assets	$	348.6		$	377.2

Amortization expense associated with the Company’s capitalized software and other amortizable intangibles recorded as of December 31, 2010 is expected to approximate $29.3 million, $24.5 million, $22.1 million, $21.5 million and $19.2 million for the years ending December 31, 2011, 2012, 2013, 2014 and 2015, respectively.

Note 7: Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following:

	December 31,
(dollars in millions)	2010		2009
Trade accounts payable and accruals	$	571.3	$	549.7
Salaries, wages and related fringe benefits		190.2		228.3
Advances from customers		827.2		1,052.0
Deferred revenue		36.1		48.5
Sales-related costs and provisions		90.2		70.5
Payroll and other taxes		67.4		58.5
Product warranty		45.7		45.6
Fair market value of derivatives		1.8		6.1
Other		186.1		149.0
Total accounts payable and accrued liabilities	$	2,016.0	$	2,208.2

Additional information relating to the Company’s outstanding derivative contracts as of December 31, 2010 may be found in Note 18 of the Notes to Consolidated Financial Statements.

Activity during the year associated with the Company’s product warranty accruals was as follows (dollars in millions): 

Balance December 31, 2009		Warranty Provisions		Acquisitions		Charges Against Accrual			Translation and Other			Balance December 31, 2010
$	45.6	$	39.0	$	0.5	$	(38.3	)	$	(1.1	)	$	45.7

Note 8: Employee Benefit Plans

As of December 31, 2010, the Company sponsored separate defined benefit pension plans for employees of its United Kingdom (U.K.) and German subsidiaries as well as several unfunded defined benefit arrangements for various other employee groups. The U.K. defined benefit pension plan was frozen to new entrants effective June 14, 1996. 

In June 2007, the Company notified employees and beneficiaries that it had elected to terminate the Cameron International Corporation Retirement Plan (Retirement Plan) as well as certain related unfunded supplemental plans, which covered the majority of salaried U.S. employees and certain domestic hourly employees at the time the Retirement Plan was frozen to new entrants, effective May 1, 2003.  In addition, the Company curtailed future benefits from being earned under the Retirement Plan, effective December 31, 2007.  The Company distributed the assets of the Retirement Plan during 2007 and 2008.  During the fourth quarter of 2008, the Company recorded a settlement loss of $26.2 million in connection with the final distribution of plan assets to current emp loyees who were participants in the Retirement Plan and any others not covered by the initial distribution of plan assets during 2007.  Following the final distribution, the excess remaining plan assets of approximately $5.1 million became available to the Company to be used in meeting the cash funding obligations for matching contributions under the Cameron International Corporation Retirement Savings Plan, a defined contribution 401(k) plan available to the Company’s eligible United States-based employees.

62

Certain of the Company’s employees also participate in various domestic employee welfare benefit plans, including medical, dental and prescriptions. Additionally, certain employees receive retiree medical, prescription and life insurance benefits. All of the welfare benefit plans, including those providing postretirement benefits, are unfunded.

Total net benefit plan expense (income) associated with the Company’s defined benefit pension and postretirement benefit plans consisted of the following:

	Pension Benefits									Postretirement Benefits
(dollars in millions)	2010			2009			2008			2010			2009			2008
Service cost	$	2.9		$	2.7		$	3.9		$	−		$	−		$	−
Interest cost		15.1			14.1			20.3			0.9			0.5			1.1
Expected return on plan assets		(15.8	)		(13.3	)		(22.1	)		−			−			−
Amortization of prior service cost (credit)		–			−			−			(0.9	)		(0.9	)		(0.4	)
Amortization of losses (gains)		6.7			5.7			9.3			(1.2	)		(1.9	)		(1.5	)
Net benefit plan expense (income) before settlement loss		8.9			9.2			11.4			(1.2	)		(2.3	)		(0.8	)
Settlement loss		–			0.3			26.2			−			−			−
Total net benefit plan expense (income)	$	8.9		$	9.5		$	37.6		$	(1.2	)	$	(2.3	)	$	(0.8	)
Net benefit plan expense (income):
U.S. plans	$	0.2		$	0.4		$	29.7		$	(1.2	)	$	(2.3	)	$	(0.8	)
Foreign plans		8.7			9.1			7.9			−			−			−
Total net benefit plan expense (income)	$	8.9		$	9.5		$	37.6		$	(1.2	)	$	(2.3	)	$	(0.8	)

Included in accumulated other elements of comprehensive income at December 31, 2010 and 2009 are the following amounts that have not yet been recognized in net periodic benefit plan cost, as well as the amounts that are expected to be recognized in net periodic benefit plan cost during the year ending December 31, 2011:

	December 31, 2010						December 31, 2009						Year Ending December 31, 2011
(dollars in millions)	Before Tax			After Tax			Before Tax			After Tax			Expected Amortization
Pension benefits:
Actuarial losses, net	$	(84.6	)	$	(61.4	)	$	(97.1	)	$	(69.8	)	$	5.6
Post retirement benefits:
Prior service credit		6.9			4.3			4.9			3.1			(1.3	)
Actuarial gains		9.0			5.6			11.4			7.2			(0.9	)
	$	(68.7	)	$	(51.5	)	$	(80.8	)	$	(59.5	)	$	3.4

63

The change in the projected benefit obligation associated with the Company’s defined benefit pension plans and the change in the accumulated benefit obligation associated with the Company’s postretirement benefit plans was as follows:

	Pension Benefits						Postretirement Benefits
(dollars in millions)	2010			2009			2010			2009
Benefit obligation at beginning of year	$	274.5		$	221.3		$	18.3		$	9.0
Service cost		2.9			2.7			−			−
Interest cost		15.1			14.1			0.9			0.5
Plan participants’ contributions		0.9			0.9			−			−
Actuarial losses		5.8			30.7			1.2			4.8
Exchange rate changes		(8.5	)		21.2			−			−
Benefits and expenses paid from plan assets		(8.3	)		(16.4	)		−			−
Benefits paid directly by the Company		−			−			(1.9	)		(1.6	)
Plan amendments		−			−			(2.9	)		−
Acquisitions		−			−			−			5.6
Benefit obligation at end of year	$	282.4		$	274.5		$	15.6		$	18.3
Benefit obligation at end of year:
U.S. plans	$	3.3		$	3.0		$	15.6		$	18.3
Foreign plans		279.1			271.5			−			−
Benefit obligation at end of year	$	282.4		$	274.5		$	15.6		$	18.3

The total accumulated benefit obligation for the Company’s defined benefit pension plans was $244.6 million and $239.2 million at December 31, 2010 and 2009, respectively.

The change in the plan assets associated with the Company’s defined benefit pension and postretirement benefit plans was as follows:

	Pension Benefits						Postretirement Benefits
(dollars in millions)	2010			2009			2010			2009
Fair value of plan assets at beginning of year	$	242.2		$	195.1		$	−		$	−
Actual return on plan assets		24.4			23.5			−			−
Company contributions		9.4			25.5			1.9			1.6
Plan participants’ contributions		0.9			0.9			−			−
Exchange rate changes		(7.3	)		18.7			−			−
Excess assets remitted to plan sponsor		−			(5.1	)		−			−
Benefits and expenses paid from plan assets		(8.3	)		(16.4	)		(1.9	)		(1.6	)
Fair value of plan assets at end of year	$	261.3		$	242.2		$	−		$	−
Fair value of plan assets at end of year:
U.S. plans	$	−		$	−		$	−		$	−
Foreign plans		261.3			242.2			−			−
Fair value of plan assets at end of year	$	261.3		$	242.2		$	−		$	−

64

The status of the Company’s underfunded defined benefit pension and postretirement benefit plans was as follows:

	Pension Benefits December 31,						Postretirement Benefits December 31,
(dollars in millions)	2010			2009			2010			2009
Underfunded status at end of year:
Current	$	(0.2	)	$	(0.2	)	$	(2.2	)	$	(1.9	)
Non-current		(20.9	)		(32.1	)		(13.4	)		(16.4	)
Underfunded status at end of year	$	(21.1	)	$	(32.3	)	$	(15.6	)	$	(18.3	)

Actual asset investment allocations for the Company’s main defined benefit pension plan in the United Kingdom, which accounts for approximately 97% of total plan assets as follows:

	Pension Benefits
	2010			2009
U.K. plan:
Equity securities		54	%		56	%
Fixed income debt securities, cash and other		46	%		44	%

In each jurisdiction, the investment of plan assets is overseen by a plan asset committee whose members act as trustees of the plan and set investment policy. For the years ended December 31, 2010 and 2009, the investment strategy has been designed to approximate the performance of market indexes. The Company’s targeted allocation for the U.K. plan for 2011 and beyond is approximately 54% in equities, 40% in fixed income debt securities and 6% in real estate and other.

    During 2010, the Company made contributions totaling approximately $9.4 million to the assets of its various defined benefit pension plans. Contributions to plan assets for 2011 are currently expected to approximate $9.0 million assuming no change in the current discount rate or expected investment earnings.

The assets of the Company’s pension plans are generally invested in debt and equity securities or mutual funds, which are valued based on quoted market prices for an individual asset (level 1 market inputs) or mutual fund unit values, which are based on the fair values of the individual securities that the fund has invested in (level 2 observable market inputs).  A small portion of the assets are invested in insurance contracts, real estate and other investments, which are valued based on level 3 unobservable inputs.

The fair values of the Company’s pension plan assets by asset category at December 31, 2010 were as follows:

(dollars in millions)	Fair Value Based on Quoted Prices in Active Markets for Identical Assets (Level 1)		Fair Value Based on Significant Other Observable Inputs (Level 2)		Fair Value Based on Significant Unobservable Inputs (Level 3)		Total
Cash and cash equivalents	$	10.2	$	–	$	–	$	10.2
Equity Securities:
US Equities		–		52.7		–		52.7
Non-U.S. Equities		37.3		47.4		–		84.7
Bonds:
Non-US Government Bonds		–		21.0		–		21.0
Non-US Corporate Bonds		–		74.4		–		74.4
Alternative Investments:
Insurance contracts		–		–		7.3		7.3
Real estate and other		–		–		11.0		11.0
Total assets	$	47.5	$	195.5	$	18.3	$	261.3

65

Changes in the fair value of pension plan assets determined based on level 3 unobservable inputs were as follows (dollars in millions):

	Year Ended December 31, 2010
Balance at beginning of the year	$	9.3
Purchases/Sales, net		10.6
Actual return on plan assets		1.3
Reclassification of plan assets to Level 2		(2.1	)
Currency impact		(0.8	)
Balance at end of the year	$	18.3

The weighted-average assumptions associated with the Company’s defined benefit pension and postretirement benefit plans were as follows:

	Pension Benefits						Postretirement Benefits
	2010			2009			2010			2009
Assumptions related to net benefit costs:
U.S. plans:
Discount rate		5.03	%		5.08-6.52	%		5.03	%		4.88-6.52	%
Expected return on plan assets		−			5.25	%		–			–
Health care cost trend rate		–			–			9.0	%		9.0	%
Measurement date	1/1/2010			1/1/2009			1/1/2010			1/1/2009
Foreign plans:
Discount rate		5.50-5.75	%		5.75-6.25	%		–			–
Expected return on plan assets		5.50-6.75	%		5.50-6.75	%		–			–
Rate of compensation increase		3.00-4.50	%		3.00-4.50	%		–			–
Measurement date	1/1/2010			1/1/2009				–			–
Assumptions related to end-of-period benefit obligations:
U.S. plans:
Discount rate		4.10	%		5.03	%		4.10	%		5.03	%
Health care cost trend rate		–			–			9.0	%		9.0	%
Measurement date	12/31/2010			12/31/2009			12/31/2010			12/31/2009
Foreign plans:
Discount rate		5.50	%		5.50-5.75	%		–			–
Rate of compensation increase		3.00-4.50	%		3.0-4.5	%		–			–
Measurement date	12/31/2010			12/31/2009				–			–

The Company’s discount rate assumptions for its U.S. postretirement benefits plan and its U.K. defined benefit pension plan are based on the average yield of a hypothetical high quality bond portfolio with maturities that approximately match the estimated cash flow needs of the plans. 

The assumptions for expected long-term rates of return on assets are based on historical experience and estimated future investment returns, taking into consideration anticipated asset allocations, investment strategies and the views of various investment professionals. 

The rate of compensation increase assumption for foreign plans reflect local economic conditions and the Company’s compensation strategy in those locations.

The health care cost trend rate is assumed to decrease gradually from 9% to 5% by 2019 and remain at that level thereafter. A one-percentage-point increase or decrease in the assumed health care cost trend rate does not have a material impact on the service and interest cost components in 2010 or the postretirement benefit obligation as of December 31, 2010.

66

Year-end amounts applicable to the Company’s pension plans with projected benefit obligations in excess of plan assets and accumulated benefit obligations in excess of plan assets were as follows:

	Projected Benefit Obligation in Excess of Plan Assets				Accumulated Benefit Obligation in Excess of Plan Assets
(dollars in millions)	2010		2009		2010		2009
Fair value of applicable plan assets	$	261.3	$	242.2	$	9.8	$	9.3
Projected benefit obligation of applicable plans	$	282.4	$	274.5		–		−
Accumulated benefit obligation of applicable plans		–		−	$	18.3	$	18.5

Future expected benefit payments are as follows:

	Pension Benefits				Postretirement Benefits
(dollars in millions)	U.S. Unfunded Plans		Foreign Funded Plans		U.S. Unfunded Plans
Year ended December 31:
2011	$	0.2	$	8.3	$	2.3
2012	$	0.2	$	8.5	$	2.1
2013	$	0.2	$	8.8	$	1.9
2014	$	0.2	$	9.0	$	1.7
2015	$	0.3	$	9.2	$	1.6
2016 - 2020	$	1.2	$	50.2	$	5.7

The Company’s United States-based employees who are not covered by a bargaining unit and certain others are also eligible to participate in the Cameron International Corporation Retirement Savings Plan. Under this plan, employees’ savings deferrals are partially matched in cash and invested at the employees’ discretion. The Company provides nondiscretionary retirement contributions to the Retirement Savings Plan on behalf of each eligible employee equal to 3% of their defined pay.  Eligible employees vest in the 3% retirement contributions plus any earnings after completing three years of service.  In addition, the Company provides an immediately vested matching contribution of up to 100% of the first 6% of pay contributed by each eligible employee.&# 160; Employees may contribute amounts in excess of 6% of their pay to the Retirement Savings Plan, subject to certain United States Internal Revenue Service limitations. The Company’s expense under this plan for the years ended December 31, 2010, 2009 and 2008 amounted to $25.9 million, $20.6 million and $19.6 million, respectively. In addition, the Company provides savings or other benefit plans for employees under collective bargaining agreements and, in the case of certain international employees, as required by government mandate, which provide for, among other things, Company matching contributions in cash based on specified formulas. Expense with respect to these various defined contribution and government-mandated plans for the years ended December 31, 2010, 2009 and 2008 amounted to $41.9 million, $34.3 million and $33.8 million, respectively.

Note 9: Stock-Based Compensation Plans

The Company has grants outstanding under nine equity compensation plans, only one of which, the 2005 Equity Incentive Plan (2005 EQIP), is currently available for future grants of equity compensation awards to employees and non-employee directors. Options granted under the Company’s equity compensation plans had an exercise price equal to the market value of the underlying common stock on the date of grant and all terms were fixed.

67

Stock-based compensation expense recognized was as follows:

	Year Ended December 31,
(dollars in millions)	2010		2009		2008
Outstanding restricted and deferred stock unit and award grants	$	26.0	$	18.5	$	20.1
Unvested outstanding stock option grants		8.5		9.2		15.5
Total stock-based compensation expense	$	34.5	$	27.7	$	35.6

The total income statement tax benefit recognized from stock-based compensation arrangements during the years ended December 31, 2010, 2009 and 2008  totaled approximately $12.7 million, $10.2 million and $13.2 million, respectively.

Stock options

Options with terms of seven or ten years are granted to officers and other key employees of the Company under the 2005 EQIP plan at a fixed exercise price equal to the fair value of the Company’s common stock on the date of grant. The options vest in one-third increments each year on the anniversary date following the date of grant, based on continued employment.

A summary of option activity under the Company’s stock compensation plans as of and for the year ended December 31, 2010 is presented below: 

Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (dollars in millions)
Outstanding at January 1, 2010		7,799,988		$	29.35
Granted		1,424,150			42.81
Exercised		(2,824,395	)		24.01
Forfeited		(107,218	)		32.85
Expired		(39,407	)		36.69
Outstanding at December 31, 2010		6,253,118		$	34.72		5.30	$	100.1
Vested at December 31, 2010 or expected to vest in the future		6,231,066		$	34.70		5.29	$	99.9
Exercisable at December 31, 2010		3,767,345		$	32.64		3.58	$	68.2

	At
	December 31, 2010
Stock-based compensation cost not yet recognized under the straight-line method (dollars in millions)	$	19.5
Weighted-average remaining expense recognition period (in years)		2.15

The fair values per share of option grants for the years ended December 31, 2010, 2009 and 2008 were estimated using the Black-Scholes-Merton option pricing formula with the following weighted-average assumptions: 

	Year Ended December 31,
	2010			2009			2008
Expected life (in years)		2.5			2.4			3.3
Risk-free interest rate		0.46	%		1.1	%		1.7	%
Volatility		43.8	%		32.0	%		36.8	%
Expected dividend yield		0.0	%		0.0	%		0.0	%

68

    The Company determined the assumptions involving the expected life of its options and volatility rates based primarily on historical data and consideration of expectations for the future.

The above assumptions and market prices of the Company’s common stock at the date of option exercises resulted in the following values:

	Year Ended December 31,
	2010		2009		2008
Grant-date fair value per option	$	11.78	$	8.10	$	6.31
Intrinsic value of options exercised (dollars in millions)	$	63.4	$	23.5	$	59.9
Average intrinsic value per share of options exercised	$	22.46	$	19.26	$	35.08

Restricted and deferred stock units and awards

During 2005, the Company began issuing restricted stock units with no exercise price to key employees in place of stock options. During 2010, 2009 and 2008, grants of restricted stock units were made to officers and key employees. Approximately 211,804 and 72,634 of the restricted stock unit grants during 2010 and 2008,  respectively, contained performance-based conditions which were fully satisfied based on the Company’s full-year 2010 and 2008 financial performance against certain targets. No 2009 restricted stock unit grants contained performance-based conditions.  The restricted stock units granted to officers and other key employees generally provided for three-year 100% cliff vesting on the third anniversary of the date of grant, based on continued employment, except for certain grants in 2010 which pro vided for vesting in one-third increments each year.

Under an update to the Compensation Program for Non-Employee Directors approved by the Board of Directors in May 2008, non-employee directors are entitled to receive an annual number of deferred stock units that is equal to a value of $250,000 determined on the day following the Company’s annual meeting of stockholders or, if a director’s election to the Board occurs between annual meetings of stockholders, the initial grant of deferred stock units is based on a pro-rata portion of the annual grant amount equal to the remaining number of months in the board year until the next annual meeting of stockholders.  These units, which have no exercise price and no expiration date, vest in one-fourth increments quarterly over the following year but cannot be converted into c ommon stock until the earlier of termination of Board service or three years, although Board members have the ability to voluntarily defer conversion for a longer period of time. 

A summary of restricted stock unit and restricted stock award activity under the Company’s stock compensation plans as of and for the year ended December 31, 2010 is presented below: 

Restricted Stock Units and Awards	Number			Weighted-Average Grant Date Fair Value
Nonvested at January 1, 2010		1,912,087		$	31.56
Granted		806,041			41.81
Vested		(701,187	)		41.72
Forfeited		(75,542	)		35.92
Nonvested at December 31, 2010		1,941,399		$	35.02

	At December 31, 2010
Stock-based compensation cost not yet recognized under the straight-line method (dollars in millions)	$	27.4
Weighted-average remaining expense recognition period (in years)		1.61

The intrinsic value of restricted stock units vesting during the years ended December 31, 2010, 2009 and 2008 was $29.2 million, $11.0 million and $19.3 million, respectively.

During the years ended December 31, 2010, 2009 and 2008, respectively, a total of 806,041, 616,904 and 639,799 restricted stock units at a weighted-average grant date fair value of $41.81, $25.44 and $36.40 per share were granted. The fair value of restricted stock units is determined based on the closing trading price of the Company’s common stock on the grant date.

At December 31, 2010, 6,368,733 shares were reserved for future grants of options, deferred stock units, restricted stock units and other awards. The Company may issue either treasury shares or newly issued shares of its common stock in satisfaction of these awards.

69

Note 10: Debt

    The Company’s debt obligations were as follows: 

	Year Ended December 31,
(dollars in millions)	2010			2009
Senior notes, net of $1.8 of unamortized original issue discount at December 31, 2010 ($1.9 at December 31, 2009)	$	748.2		$	748.1
Convertible debentures, net of discount of $6.9 at December 31, 2010 ($22.8 at December 31, 2009)		493.1			477.2
Other debt		37.5			16.8
Obligations under capital leases		14.0			12.4
		1,292.8			1,254.5
Current maturities		(519.9	)		(22.2	)
Long-term portion	$	772.9		$	1,232.3

Senior Notes

On June 26, 2008, the Company issued $450.0 million in aggregate principal amount of 6.375% Senior Notes due July 15, 2018 (the “2018 Notes”) and $300.0 million in aggregate principal amount of 7.0% Senior Notes due July 15, 2038 (the “2038 Notes” and, together with the 2018 Notes, the “Senior Notes”). The Company pays interest on the Senior Notes on January 15 and July 15 of each year, beginning January 15, 2009.  The Company may redeem some of the Senior Notes from time to time or all of the Senior Notes at any time at redemption prices that include accrued and unpaid interest and a make-whole premium as defined in the respective supplemental indentures (the Supplemental Indentures).  In the event of the occurrence of a Change of C ontrol Repurchase Event, as defined in the Supplemental Indentures, the holders of the Senior Notes may require the Company to repurchase the Senior Notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest.  The Senior Notes are senior unsecured obligations of the Company and rank equally with all of the Company’s other existing unsecured and unsubordinated debt.

Convertible Debentures

On May 23, 2006, the Company issued $500.0 million face value of twenty-year senior convertible debentures, due June 15, 2026, that pay interest semi-annually at a rate of 2.5% on each June 15 and December 15, beginning December 15, 2006.  The Company has the right to redeem the 2.5% Convertible Debentures at any time on or after June 20, 2011, at principal plus accrued and unpaid interest. Holders may require the Company to repurchase all or a portion of the 2.5% Convertible Debentures on June 15 of 2011, 2016 and 2021, or at any time the Company undergoes a fundamental change as defined in the debenture agreement, for principal plus accrued and unpaid interest. As a result of the option with which holders can require the Company to repurchase the debentures on June 15, 2011, t he entire balance of the debt has been included in the “Current portion of long-term debt” on the Company’s Consolidated Balance Sheet at December 31, 2010.

Prior to June 15, 2011, holders may also convert their debenture holdings into shares of common stock at a conversion rate of 28.2656 shares of common stock per $1,000 principal amount, or $35.38 per share (post-split basis), only under the following circumstances: 

• during any quarter after June 30, 2006, if the closing price of the Company’s common stock exceeds 130% of the then-current conversion price for at least 20 consecutive trading days in the 30 consecutive trading day period ending on the last trading day of the immediately preceding quarter;

• during the five business-day period after any five consecutive trading day period in which the trading price per debentures for each day of the period was less than 97% of the product of the last reported sales price of the Company’s common stock and the current conversion rate;

• upon the occurrence of specified corporate events; or

• upon receipt of a notice of redemption by the Company.

Holders may also convert the 2.5% Convertible Debentures into shares of common stock at any time on or after June 15, 2011 without meeting the above provisions. In either case involving conversion by the holders, any amount due up to and including the principal amount of the debt and accrued but unpaid interest will be satisfied in cash by the Company. The portion of the conversion value of the debt in excess of principal may, at the option of the Company, be satisfied in either cash or shares of the Company’s common stock. The initial conversion rate is subject to adjustment based on certain specified events or in the event the Company undergoes a fundamental change as defined. As part of the offering of the 2.5% Convertible Debentures, the Company agreed to file a shelf registrati on statement related to the resale of the debentures and the common stock issuable upon conversion of the debentures within a specified period of time and to have the registration statement become effective and maintain effectiveness during periods specified in the debenture agreement. This registration statement was filed timely by the Company on August 14, 2006. If the registration statement subsequently ceases to be effective, the Company could be subject to liquidated damage payments of up to 0.50% per year on the principal amount of the 2.5% Convertible Debentures, payable on June 15 and December 15 of each year during the period that the registration statement is not effective, as defined in the debenture agreement.

70

At December 31, 2010, the 2.5% Convertible Debentures met the conditions for conversion by the holders during the first quarter of 2011 under the terms of the debenture agreement.  Had the holders been able to elect to convert effective December 31, 2010, the Company could have been required to issue approximately 4.3 million shares of its common stock in satisfaction of the conversion value of the debentures in excess of their principal amount (principal to be paid in cash), based on the closing price of the Company’s common stock of $50.73 on that date.

The Company’s 2.5% Convertible Debentures are accounted for under accounting rules for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement).  The Company had outstanding in certain prior periods 1.5% Convertible Debentures, which were also subject to these accounting rules.  These accounting rules require the Company to separately account for the liability and equity components of its convertible debt instruments in a manner that reflects the Company’s non-convertible debt borrowing rates when interest cost is recognized.  The resulting bifurcation of the debt and equity components was based on estimated market borrowing rates of 5.9% and 4.85%, respectively, for non-convertible debt instrume nts similar to the 2.5% and 1.5% Convertible Debentures.  The bifurcation resulted in approximately $65.8 million being included in capital in excess of par value on the Company’s Consolidated Balance Sheets at both December 31, 2010 and 2009, related to the initial conversion value of the Company’s 2.5% and 1.5% Convertible Debentures.   The discount on the 2.5% Convertible Debentures remaining at December 31, 2010 from the initial bifurcation of the conversion value was $6.9 million, which will be fully amortized to interest expense by June 15, 2011.   In addition to the expense associated with the stated interest rates on the debt, an additional amount of interest expense totaling $15.9 million, $15.8 million and $20.6 million has been recognized for the years ended December 31, 2010, 2009 and 2008, respectively, relating to the amortization of the remaining discount on the convertible debentures.

Revolving Letter of Credit and Credit Facilities

On October 15, 2010, the Company entered into a three-year $250.0 million committed multi-currency revolving letter of credit facility with a third party bank.  Under this facility, standby letters of credit, generally with terms of up to two years, may be issued by the bank in U.S. dollars, euros, pound sterling or other mutually agreed-upon currencies.  The facility is governed by the same financial covenants as the revolving credit facility entered into in April 2008 as discussed below.   At December 31, 2010, the Company had issued letters of credit totaling $177.3 million under its revolving letter of credit facility with the remaining amount of $72.7 million available for use.

On April 14, 2008, the Company entered into a multicurrency revolving credit facility providing for borrowings up to $585.0 million, which expires on April 14, 2013. The facility allows the Company to borrow funds at the London Interbank Offered Rate (LIBOR) plus 40 basis points (including a facility fee), which varies based on the Company's current debt rating, and, if aggregate outstanding credit exposure exceeds one-half of the total facility amount, an additional 10-basis-point fee is incurred. The Company, at its option, may also borrow at other specified rates as defined in the credit facility. Additionally, the Company is required to maintain a total debt-to-capitalization ratio of no more than 60% during the term of the agreement.  At December 31, 2010, the Company had i ssued letters of credit totaling $25.4 million under its revolving credit facility with the remaining amount of $559.6 million available for use.

Other

Other debt, some of which is held by entities located in countries with high rates of inflation, has a weighted-average interest rate of 5.8% at December 31, 2010 (12.9% at December 31, 2009). Future maturities of the Company’s debt (including the remaining amount of unamortized discount but excluding capital leases) are approximately $513.8 million in 2011, $16.8 million in 2012 and $748.2 million thereafter. Maturities in 2011 are mainly related to the 2.5% Convertible Debentures, which the holders have the right to require the Company to repurchase on June 15, 2011.  Maturities thereafter are related to the 6.375% and 7.0% Senior Notes issued during 2008.

In addition to the above, the Company also has other unsecured and uncommitted credit facilities available to its foreign subsidiaries to fund ongoing operating activities. Certain of these facilities also include annual facility fees. 

Interest paid during the years ended December 31, 2010, 2009 and 2008 approximated $73.0 million, $82.0 million and $47.4 million, respectively.

71

Note 11: Leases

The Company leases certain facilities, office space, vehicles and office, data processing and other equipment under capital and operating leases. Rental expenses for the years ended December 31, 2010, 2009 and 2008 were $67.5 million, $57.4 million and $49.6 million, respectively. Future minimum lease payments with respect to capital leases and operating leases with noncancelable terms in excess of one year were as follows:

	Capital			Operating
(dollars in millions)	Lease Payments			Lease Payments
Year ended December 31:
2011	$	6.3		$	43.1
2012		4.3			37.2
2013		2.5			31.9
2014		1.4			25.2
2015		0.1			22.1
Thereafter		–			58.9
Future minimum lease payments		14.6			218.4
Less: amount representing interest		(0.6	)		–
Lease obligations at December 31, 2010	$	14.0		$	218.4

Note 12: Income Taxes

The components of income before income taxes were as follows: 

	Year Ended December 31,
(dollars in millions)	2010		2009		2008
Income before income taxes:
U.S. operations	$	365.9	$	223.9	$	334.2
Foreign operations		367.4		418.9		517.2
Income before income taxes	$	733.3	$	642.8	$	851.4

The provisions for income taxes were as follows: 

	Year Ended December 31,
(dollars in millions)	2010			2009			2008
Current:
U.S. federal	$	102.5		$	83.5		$	142.3
U.S. state and local		8.7			3.4			0.7
Foreign		83.1			119.4			139.3
		194.3			206.3			282.3
Deferred:
U.S. federal		(25.8	)		(33.3	)		(25.2	)
U.S. state and local		0.9			(0.3	)		3.0
Foreign		1.0			(5.4	)		10.6
		(23.9	)		(39.0	)		(11.6	)
Income tax provision	$	170.4		$	167.3		$	270.7

72

The reasons for the differences between the provision for income taxes and income taxes using the U.S. federal income tax rate were as follows:

	Year Ended December 31,
	2010			2009			2008
U.S. federal statutory rate		35.00	%		35.00	%		35.00	%
State and local income taxes		1.02			0.38			0.67
Foreign statutory rate differential		(9.62	)		(7.26	)		(4.86	)
Change in valuation allowance on deferred tax assets		6.76			1.99			0.71
Nondeductible expenses		1.64			1.54			0.59
Net U.S. tax on foreign source income		(9.52	)		(5.00	)		0.58
All other		(2.05	)		(0.62	)		(0.89	)
Total		23.23	%		26.03	%		31.80	%
Total income taxes paid (dollars in millions)	$	198.2		$	231.2		$	159.7

Components of deferred tax assets (liabilities) were as follows:

	December 31,
(dollars in millions)	2010			2009
Deferred tax liabilities:
Plant and equipment	$	(70.1	)	$	(71.7	)
Inventory		(14.0	)		(39.5	)
Convertible debentures		(2.5	)		(8.2	)
Intangible assets		(79.0	)		(82.4	)
Other		(10.1	)		(22.9	)
Total deferred tax liabilities		(175.7	)		(224.7	)
Deferred tax assets:
Postretirement benefits other than pensions		10.3			12.3
Reserves and accruals		60.7			98.9
Net operating losses and tax credits		153.7			102.5
Pensions		16.1			20.1
Other		21.0			12.2
Total deferred tax assets		261.8			246.0
Valuation allowance		(96.2	)		(46.1	)
Net deferred tax liabilities	$	(10.1	)	$	(24.8	)

Changes in the Company’s unrecognized tax benefits were as follows:

	Year Ended December 31,
(dollars in millions)	2010			2009			2008
Balance at beginning of year	$	60.4		$	46.6		$	47.3
Increases due to tax positions taken prior to the fiscal year		1.0			26.1			0.2
Increases due to tax positions taken during the fiscal year		5.2			12.7			3.8
Decreases relating to settlements with tax authorities		(0.3	)		(27.6	)		(3.2	)
Decreases resulting from the lapse of applicable statutes of limitation		(0.2	)		(1.4	)		(1.5	)
Net increase due to translation and interest		2.3			4.0			–
Balance at end of year	$	68.4		$	60.4		$	46.6

The Company is not currently aware of any adjustments that may occur that would materially increase or decrease the amount of its unrecognized tax benefits during the next twelve-month period or any material amounts included as unrecognized tax benefits at December 31, 2010 that, if recognized, would not impact the Company’s effective income tax rate.

There were no material payments for interest or penalties for the years ended December 31, 2010, 2009 or 2008. Also, there were no material accruals for unpaid interest or penalties at December 31, 2010 or 2009.

73

The Company and its subsidiaries file income tax returns in the United States, various domestic states and localities and in many foreign jurisdictions. The earliest years’ tax returns filed by the Company that are still subject to examination by authorities in the major tax jurisdictions are as follows:

United States	United Kingdom	Canada	France	Germany	Norway	Singapore	Italy
2000	2007	2004	2006	2008	2010	2004	2005

At December 31, 2010, the Company had net operating loss and credit carryforwards in numerous jurisdictions with various expiration periods, including certain jurisdictions which have no expiration period. The Company had a valuation allowance of $96.2 as of December 31, 2010 against these net operating loss and credit carryforwards and other deferred tax assets.  Primarily due to losses incurred in certain jurisdictions and excess foreign tax credits incurred in the U.S., valuation allowances increased in 2010 by $49.6 million, increased in 2009 by $12.9 million and decreased in 2008 by $7.1 million, with a corresponding offset in the Company’s income tax expense. In addition, valuation allowances established in prior years related to the tax benefit of net operating loss es and other deferred tax assets recorded as part of international acquisitions were reduced in 2008 by $7.6 million, with a corresponding offset to goodwill. Certain valuation allowances are recorded in the non-U.S. dollar functional currency of the respective operation and the U.S. dollar equivalent reflects the effects of translation. The valuation allowance increased by $0.5 million in 2010 and $4.5 million in 2009 and decreased by $4.6 million in 2008 due to translation. 

The Company has considered all available evidence in assessing the need for the valuation allowance, including future taxable income, future foreign source income, and ongoing prudent and feasible tax planning strategies. In the event the Company were to determine that it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the net deferred tax assets would be charged to income in the period such determination was made. 

The tax benefit that the Company receives with respect to certain stock benefit plan transactions is credited to capital in excess of par value and does not reduce income tax expense. This benefit amounted to $17.4 million, $9.7 million and $22.6 million in 2010, 2009 and 2008, respectively, including adjustments made to certain accruals related to prior year benefits. 

The Company considers all unremitted earnings of its foreign subsidiaries, except certain amounts primarily earned before 2003, certain amounts earned during 2009, certain amounts earned by NATCO, and amounts previously subjected to tax in the U.S., to be permanently reinvested. An estimate of the amounts considered permanently reinvested is $4.7 billion. It is not practical for the Company to compute the amount of additional U.S. tax that would be due on this amount. The Company has provided deferred income taxes on the earnings that the Company anticipates will be remitted.

The Company operates in jurisdictions, primarily Singapore and Malaysia, in which it has been granted tax holidays. The benefit of these holidays for 2010 was approximately $9.5 million and was not material in 2009 or 2008.

Note 13: Stockholders’ Equity

Common Stock

Under a resolution adopted by the Board of Directors on February 21, 2008, the Company is authorized to purchase up to 30.0 million shares of its common stock.  Additionally, on May 22, 2006, the Company’s Board of Directors approved repurchasing shares of the Company’s common stock with the proceeds remaining from the Company’s 2.5% Convertible Debenture offering, after taking into account a planned repayment of $200.0 million principal amount of the Company’s outstanding 2.65% Senior Notes due 2007. This authorization is in addition to the 30.0 million shares described above. 

Purchases pursuant to the 30.0 million-share Board authorization may be made by way of open market purchases, directly or indirectly, for the Company’s own account, or through commercial banks or financial institutions and by the use of derivatives, such as a sale or put on the Company’s common stock, or by forward or economically equivalent transactions. 

74

Changes in the number of shares of the Company’s outstanding stock for the last three years were as follows:

	Common Stock		Treasury Stock			Shares  Outstanding
Balance - December 31, 2007		232,341,726		(14,332,927	)		218,008,799
Purchase of treasury stock		−		(6,968,363	)		(6,968,363	)
Stock issued under stock option and other employee benefit plans		−		1,877,170			1,877,170
Stock issued upon conversion of the 1.5% Convertible Debentures		3,975,147		−			3,975,147
Balance - December 31, 2008		236,316,873		(19,424,120	)		216,892,753
Purchase of treasury stock		−		(935,178	)		(935,178	)
Stock issued related to NATCO acquisition		23,637,708		237,323			23,875,031
Stock issued under stock option and other employee benefit plans		−		1,668,217			1,668,217
Stock issued upon conversion of the 1.5% Convertible Debentures		3,156,891		−			3,156,891
Balance - December 31, 2009		263,111,472		(18,453,758	)		244,657,714
Purchase of treasury stock		–		(3,176,705	)		(3,176,705	)
Stock issued under stock option and other employee benefit plans		–		2,432,821			2,432,821
Balance - December 31, 2010		263,111,472		(19,197,642	)		243,913,830

     At December 31, 2010, 14,517,506 shares of unissued common stock were reserved for future issuance under various employee benefit plans.

Preferred Stock

The Company is authorized to issue up to 10.0 million shares of preferred stock, par value of $.01 per share.  Shares of preferred stock may be issued in one or more series of classes, each of which series or class shall have such distinctive designation or title and terms as shall be fixed by the Board of Directors of the Company prior to issuance of any shares.

Amendment to Bylaws

The Board of Directors approved an amendment to the Company’s Bylaws, effective February 18, 2010, to adopt a majority vote standard for non-contested elections of directors.

Retained Earnings

Delaware law, under which the Company is incorporated, provides that dividends may be declared by the Company’s Board of Directors from a current year’s earnings as well as from the total of capital in excess of par value plus the retained earnings, which amounted to approximately $5.1 billion at December 31, 2010.

Note 14: Accumulated Other Elements of Comprehensive Income

Accumulated other elements of comprehensive income comprised the following:

	December 31,
(dollars in millions)	2010			2009
Accumulated foreign currency translation gain	$	31.5		$	81.6
Prior service credits, net, related to the Company’s pension and postretirement benefit plans		4.3			3.1
Actuarial losses, net, related to the Company’s pension  and postretirement benefit plans		(55.8	)		(62.6	)
Change in fair value of derivatives accounted for as cash flow hedges, net of tax and other 1		(7.1	)		(12.6	)
	$	(27.1	)	$	9.5

1 Approximately $5.5 million (after tax) of accumulated other elements of comprehensive income is expected to be recognized as a reduction in earnings during 2011.

75

Note 15: Business Segments

    The Company’s operations are organized into three separate business segments - DPS, V&M and PCS.

    The DPS segment includes businesses that provide systems and equipment used to control pressures and direct flows of oil and gas wells. Products include surface and subsea production systems, blowout preventers, drilling and production control systems, block valves, gate valves, actuators, chokes, wellheads, manifolds, drilling riser and aftermarket parts and services.

The V&M segment includes businesses that provide valves and measurement systems primarily used to control, direct and measure the flow of oil and gas as they are moved from individual wellheads through flow lines, gathering lines and transmission systems to refineries, petrochemical plants and industrial centers for processing. Products include gate valves, ball valves, butterfly valves, Orbit valves, double block and bleed valves, plug valves, globe valves, check valves, actuators, chokes and aftermarket parts and services as well as measurement products such as totalizers, turbine meters, flow computers, chart recorders, ultrasonic flow meters and sampling systems.

The PCS segment includes businesses that provide oil and gas separation equipment, gas conditioning units, membrane separation systems, water processing systems, reciprocating and integrally geared centrifugal compression equipment and related aftermarket parts and services for the energy industry and for manufacturing companies and chemical process industries worldwide.

The Company’s primary customers are oil and gas majors, national oil companies, independent producers, engineering and construction companies, drilling contractors, rental companies, geothermal energy and independent power producers, pipeline operators, major chemical, petrochemical and refining companies, natural gas processing and transmission companies, compression leasing companies, durable goods manufacturers, utilities and air separation companies.

The Company markets its equipment through a worldwide network of sales and marketing employees supported by agents and distributors in selected international locations. Due to the extremely technical nature of many of the products, the marketing effort is further supported by a staff of engineering employees.

The Company expenses all research and product development and enhancement costs as incurred, or if incurred in connection with a product ordered by a customer, when the revenue associated with the product is recognized. For the years ended December 31, 2010, 2009 and 2008, the Company incurred research and product development costs, including costs incurred on projects designed to enhance or add to its existing product offerings, totaling approximately $55.2 million, $43.3 million and $42.6 million, respectively. DPS accounted for 59%, 46% and 49% of each respective year’s total costs.

Summary financial data by segment follows: 

	Year Ended December 31, 2010
(dollars in millions)	DPS		V&M		PCS		Corporate & Other			Consolidated
Revenues	$	3,718.3	$	1,273.3	$	1,143.2	$	–		$	6,134.8
Depreciation and amortization	$	93.0	$	42.4	$	54.9	$	11.3		$	201.6
Interest income	$	–	$	–	$	–	$	(4.2	)	$	(4.2	)
Interest expense	$	–	$	–	$	–	$	82.2		$	82.2
Income (loss) before income taxes	$	666.7	$	188.0	$	131.9	$	(253.3	)	$	733.3
Capital expenditures	$	104.6	$	35.3	$	19.7	$	41.1		$	200.7
Total assets	$	3,570.1	$	1,299.7	$	1,750.8	$	1,384.5		$	8,005.1

	Year Ended December 31, 2009
(dollars in millions)	DPS1		V&M		PCS1		Corporate & Other			Consolidated
Revenues	$	3,110.5	$	1,194.7	$	918.0	$	−		$	5,223.2
Depreciation and amortization	$	84.8	$	36.2	$	22.0	$	13.6		$	156.6
Interest income	$	–	$	−	$	–	$	(5.9	)	$	(5.9	)
Interest expense	$	–	$	−	$	–	$	92.4		$	92.4
Income (loss) before income taxes	$	574.7	$	211.3	$	147.4	$	(290.6	)	$	642.8
Capital expenditures	$	171.8	$	50.0	$	14.9	$	4.2		$	240.9
Total assets	$	3,345.0	$	1,181.3	$	1,837.8	$	1,361.3		$	7,725.4

76

	Year Ended December 31, 2008
(dollars in millions)	DPS1		V&M		PCS1		Corporate & Other			Consolidated
Revenues	$	3,485.3	$	1,473.2	$	890.4	$	−		$	5,848.9
Depreciation and amortization	$	67.4	$	32.2	$	18.4	$	14.1		$	132.1
Interest income	$	–	$	−	$	–	$	(27.3	)	$	(27.3	)
Interest expense	$	–	$	−	$	–	$	70.3		$	70.3
Income (loss) before income taxes	$	599.3	$	301.4	$	142.6	$	(191.9	)	$	851.4
Capital expenditures	$	162.8	$	63.0	$	25.4	$	21.0		$	272.2
Total assets	$	2,865.9	$	1,199.4	$	627.3	$	1,209.8		$	5,902.4

(1)   Revised based on change in segments described in Note 1 of the Notes to Consolidated Financial Statements.

For internal management reporting, and therefore in the above segment information, Corporate and Other includes expenses associated with the Company’s Corporate office, as well as all of the Company’s interest income, interest expense, certain litigation expense managed by the Company’s General Counsel, foreign currency gains and losses from certain intercompany lending activities managed by the Company’s centralized Treasury function, all of the restructuring expense and acquisition-related costs for the Company, the charge for the termination of the U.S. defined benefit pension plans and all of the Company’s stock compensation expense. Consolidated interest income and expense are treated as a Corporate item because cash equivalents and debt, including locat ion, type, currency, etc., are managed on a worldwide basis by the Corporate Treasury Department. In addition, income taxes are managed on a worldwide basis by the Corporate Tax Department and are therefore treated as a corporate item. 

Revenue by shipping location and long-lived assets by country were as follows: 

	Year Ended December 31,
(dollars in millions)	2010		2009		2008
Revenues:
United States	$	3,281.5	$	2,551.3	$	2,885.1
United Kingdom		1,041.0		663.4		765.8
Other foreign countries		1,812.3		2,008.5		2,198.0
Total revenues	$	6,134.8	$	5,223.2	$	5,848.9

	December 31,
(dollars in millions)	2010		2009		2008
Long-lived assets:
United States	$	1,896.6	$	1,769.3	$	1,034.9
United Kingdom		197.7		232.8		182.5
Other foreign countries		885.3		899.5		541.3
Total long-lived assets	$	2,979.6	$	2,901.6	$	1,758.7

77

Note 16: Earnings Per Share

    The calculation of basic and diluted earnings per share for each period presented was as follows: 

	Year Ended December 31,
(amounts in millions, except per share data)	2010		2009		2008
Net income	$	562.9	$	475.5	$	580.7
Average shares outstanding (basic)		243.1		221.4		217.5
Common stock equivalents		2.4		2.2		2.5
Incremental shares from assumed conversion of convertible debentures		2.0		1.4		8.6
Shares utilized in diluted earnings per share calculation		247.5		225.0		228.6
Earnings per share:
Basic	$	2.32	$	2.15	$	2.67
Diluted	$	2.27	$	2.11	$	2.54

The Company’s 2.5% Convertible Debentures have been included in the calculation of diluted earnings per share for the years ended December 31, 2010, 2009 and 2008, since the average price of the Company’s common stock exceeded the conversion price of the debentures during all or a portion of each year.  The Company’s 1.5% Convertible Debentures have been included in the calculation of diluted earnings per share for the year ended December 31, 2008, for the same reason mentioned above.   See Note 10 of the Notes to Consolidated Financial Statements for further information regarding conversion of these debentures.

Note 17: Summary of Non-cash Operating, Investing and Financing Activities

    The effect on net assets of non-cash operating, investing and financing activities was as follows:

	Year Ended December 31,
(dollars in millions)	2010			2009
Net assets of NATCO acquired in exchange for Cameron common stock, excluding net cashacquired	$	–		$	954.1
NATCO purchase price allocation adjustment	$	(16.9	)	$	–
Tax benefit of employee stock compensation plan transactions	$	17.4		$	9.7
Change in fair value of derivatives accounted for as cash flow hedges, net of tax	$	(6.1	)	$	11.3
Actuarial gain (loss) and impact of plan amendments, net, related to defined benefit pension and postretirement  benefit plans	$	4.5		$	(23.0	)

Note 18: Off-Balance Sheet Risk and Guarantees, Concentrations of Credit Risk and Fair Value of Financial Instruments

Off-Balance Sheet Risk and Guarantees

At December 31, 2010, the Company was contingently liable with respect to approximately $840.4 million of bank guarantees and standby letters of credit issued on its behalf by major domestic and international financial institutions in connection with the delivery, installation and performance of the Company’s products under contract with customers throughout the world. The Company was also liable to these financial institutions for financial letters of credit and other guarantees issued on its behalf totaling nearly $32.0 million, which provide security to third parties relating to the Company’s ability to meet specified financial obligations, including payment of leases, customs duties, insurance and other matters. Additionally, the Company was liable for approximately $30.1 million of insurance bonds at December 31, 2010 relating to the requirements in certain foreign jurisdictions where the Company does business that the Company hold insurance bonds rather than bank guarantees.

    The Company’s other off-balance sheet risks were not material at December 31, 2010.

Concentrations of Credit Risk and Major Customers

    Apart from its normal exposure to its customers, who are predominantly in the energy industry, the Company had no significant concentrations of credit risk at December 31, 2010. The Company typically does not require collateral for its customer trade receivables.  Allowances for doubtful accounts are recorded for estimated losses that may result from the inability of customers to make required payments.  See Note 4 of the Notes to Consolidated Financial Statements for additional information.

Largely as a result of major subsea project activity levels, revenue from a major customer of each of the Company’s segments accounted for approximately 12% of the Company’s consolidated 2010 revenues.  During 2009 and 2008, no individual customer accounted for more than 10% of the Company’s consolidated revenues.

78

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables, derivative instruments and debt instruments. The book values of cash and cash equivalents, trade receivables, trade payables, derivative instruments and floating-rate debt instruments are considered to be representative of their respective fair values. Certain cash equivalents have also been valued based on quoted market prices which are considered to be Level 1 market inputs.  At December 31, 2010, the fair value of the Company’s fixed-rate debt (based on Level 1 quoted market rates) was approximately $1.6 billion as compared to the $1.25 billion face value of the debt.  At December 31, 2009, the fair value of the Company’s fixed-rat e debt (based on Level 1 quoted market rates) was approximately $1.45 billion as compared to the $1.25 billion face value of the debt.

In order to mitigate the effect of exchange rate changes, the Company will often attempt to structure sales contracts to provide for collections from customers in the currency in which the Company incurs its manufacturing costs. In certain instances, the Company will enter into foreign currency forward contracts to hedge specific large anticipated receipts or disbursements in currencies for which the Company does not traditionally have fully offsetting local currency expenditures or receipts. The Company was party to a number of long-term foreign currency forward contracts at December 31, 2010. The purpose of the majority of these contracts was to hedge large anticipated non-functional currency cash flows on major subsea, drilling, valve or other equipment contracts involving the Company’s United States operations and its wholly - -owned subsidiaries in Italy, Romania, Singapore and the United Kingdom. At December 31, 2010, the Company was also party to certain foreign currency forward and foreign currency option contracts which have not been accounted for as hedges involving underlying foreign currency denominated accounts recorded on the balance sheet of its wholly-owned subsidiary in Canada or anticipated foreign currency cash flows of its wholly-owned subsidiary in Italy.  The Company determines the fair value of its outstanding foreign currency forward and option contracts based on quoted exchange rates for the respective currencies applicable to similar instruments.  These quoted exchange rates are considered to be Level 2 observable market inputs.

The Company manages its debt portfolio to achieve an overall desired position of fixed and floating rates and employs interest rate swaps as a tool to achieve that goal.  In October 2009, the Company entered into two interest rate swaps which effectively converted $400.0 million of 6.375% fixed-rate borrowings into variable-rate debt based on a spread of approximately 4.79% over the current three-month London Interbank Offered Rate (LIBOR).  On July 23, 2010, the Company entered into a third interest rate swap which effectively locked in a significant portion of the gain from those earlier swaps to reduce the Company’s rate on $400.0 million of its 6.375% fixed-rate borrowings to an effective fixed interest rate of approximately 5.49% through January 15, 2012, th e maturity date of all three swaps.   Each of the swaps provide for semiannual interest payments and receipts each January 15 and July 15 and provide for resets of the three-month LIBOR rate to the then-existing rate each January 15, April 15, July 15 and October 15.  The fair value of the interest rate swaps is affected by changes in quoted three-month LIBOR rates, which is considered to be a Level 2 observable market input.  At December 31, 2010, these three swaps had a fair value of approximately $4.8 million to the benefit of the Company.

Total gross volume bought (sold) by notional currency and maturity date on open derivative contracts at December 31, 2010 was as follows (in millions):

Notional Amount - Swaps

Notional Amount - Buy

Notional Amount - Sell

2011

2012

Total

2011

2012

Total

2011

2012

Total

FX Forward Contracts

Notional     currency in:

EUR

–

–

–

37.9

–

37.9

(28.1

)

–

(28.1

)

GBP

–

–

–

1.4

–

1.4

(7.0

)

–

(7.0

)

MYR

–

–

–

12.9

–

12.9

–

–

–

NOK

–

–

–

18.6

–

18.6

–

–

–

SGD

–

–

–

4.0

–

4.0

–

–

–

USD

–

–

–

–

–

–

(42.6

)

(0.3

)

(42.9

)

FX Options

USD

–

–

–

–

–

–

2.5

–

2.5

Interest Rate Swaps

USD

–

800.0

800.0

–

–

–

–

–

–

79

The fair value of derivative financial instruments recorded in the Company’s Consolidated Balance Sheets at December 31, 2010 and 2009 was as follows (dollars in millions):
	2010				2009
	Assets		Liabilities		Assets		Liabilities
Derivatives designated as hedges:
Foreign exchange contracts –
Current	$	0.7	$	1.8	$	1.2	$	6.0
Non-current		–		–		–		0.4
Total derivatives designated as hedges		0.7		1.8		1.2		6.4
Derivatives not designated as hedges:
Foreign exchange contracts –
Current		1.4		–		1.7		0.1
Non-current		–		–		–		–
Interest Rate Swaps –
Current		–		–		–		–
Non-current		4.8		–		1.3		–
Total derivatives not designated as hedges		6.2		–		3.0		0.1
Total derivatives	$	6.9	$	1.8	$	4.2	$	6.5

The effects of derivative financial instruments on the Company’s consolidated financial statements for the year ended December 31, 2010 and December 31, 2009 were as follows (dollars in millions):

Effective Portion													Ineffective Portion and Other
Derivatives in Cash Flow Hedging  Relationships	Amount of Pre-Tax Gain (Loss) Recognized in OCI on Derivatives at December 31,					Location of Gain (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income at December 31						Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives at December 31,
	2010			2009			2010			2009				2010			2009
Foreign exchange contracts	$	(9.0	)	$	17.9	Revenues		(4.9	)	$	(17.3	)	Cost of goods sold-ineffective  portion	$	(0.7	)	$	2.8
						Cost of goods sold		(11.8	)		(8.4	)
						Depreciation expense		(0.1	)		(0.1	)
Total	$	(9.0	)	$	17.9		$	(16.8	)	$	(25.8	)		$	(0.7	)	$	2.8

Approximately $2.7 million was recognized as a reduction to cost of goods sold and $7.2 million was recognized as a reduction in interest expense during the year ended December 31, 2010 relating to foreign currency forward contracts and interest rate swap agreements, respectively, which were not designated as hedging instruments.

Note 19: Contingencies

The Company is subject to a number of contingencies, including litigation, tax contingencies and environmental matters.

 Deepwater Horizon Matter

A blowout preventer (“BOP”) originally manufactured by the Company and delivered in 2001, and to which the Company was one of the suppliers of spare parts and repair services, was deployed by the drilling rig Deepwater Horizon when it experienced a tragic explosion and fire on April 20, 2010, resulting in bodily injuries and loss of life, loss of the rig, and an unprecedented discharge of hydrocarbons into the Gulf of Mexico.  

80

While the Company did not operate the BOP, nor did it have anyone on the rig at the time of the incident, claims for personal injury, wrongful death and property damage arising from the Deepwater Horizon incident have been and will continue to be asserted against the Company and others.  Additionally, claims for pollution and other economic damages, including business interruption and loss of revenue, have been, and we anticipate will continue to be, asserted against all parties allegedly associated with this incident, including the Company, BP plc and certain of its subsidiaries, as the operating working  interest owner of Mississippi Canyon Block 252 upon which the Macondo well was being dri lled, Transocean Ltd. and certain of its affiliates, as the drilling  rig owner and operator, as well as other equipment and service companies, including Halliburton.   The Company has been named as one of multiple defendants in over 330 suits filed in a variety of Federal and State courts, a number of which have been filed as class actions or multi-plaintiff actions.  Most of these suits have been centralized into a single proceeding before a single Federal judge under the Federal rules governing multi-district litigation.  The consolidated case is styled In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico on April 20, 2010, MDL Docket No. 2179.  There are also a small number of cases pending in which Cameron is a party in state courts.  The State of Alabama has brought a claim for destruction of and/or harm to natural resources against those a ssociated with this incident, including Cameron, in State of Alabama, ex. rel. Troy King, Attorney General vs. Transocean Ltd., et. al., Cause No. 2:10cv00691, U.S. Dist. Ct., M.D. Ala., as have 4 municipalities and 3 Mexican states.  All of these suits by governmental entities have been made part of the MDL proceeding. It is possible other such claims may be asserted by the United States Government and by the Gulf and/or East Coast States, who's Attorneys General have notified the Company to preserve documents in the event of a claim, and possibly by other parties.  A  shareholder derivative suit has been filed against the Company’s directors in connection with this incident and its aftermath alleging the Company’s directors failed to exercise their fiduciary duties regarding oversight of the Company’s BOP business (Berzner vs. Erikson, et al., Cause No. 2010- 71817 in the 190th District Court of Harris County, Texas).  This incident and its causes are also being investigated by a joint investigation team of the U.S. Coast Guard and the Bureau of Ocean Energy Management (the “JIT”), which has named Cameron as a party-in-interest, the Departments of the Interior and Justice, the U.S. Chemical Safety and Hazard Investigation Board, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, and by numerous other governmental entities, including Congressional Committees. 

Based on the facts known to date, the Company is of the opinion that there was no defect in or failure of the BOP that caused or contributed to the explosion.  The reasons as to why the efforts to shut-in the well after the explosion were unsuccessful are not yet known and are the subject of multiple investigations.  The results of a forensic examination of the BOP commissioned by the JIT as part of its investigation are expected to be made known by the end of March 2011.  Additionally, the extent of the environmental impact, and the ultimate costs and damages that will ultimately be determined attributable to this incident and its aftermath are not yet known and therefore canno t be reasonably estimated.  As a result, we are unable to make any reasonable determination of what liability, if any, the Company could be found to have with respect to any of these claims or whether the Company will be found to have any liability, directly or by way of contribution, under any environmental laws or regulations or otherwise. BP and Transocean, as well as Anadarko and Moex, as non-operating working interest owners, have been designated Responsible Parties liable for the pollution emanating from the Macondo well under the Oil Pollution Act of 1990 (OPA), and have, at least in part, accepted such designation.  Cameron has not been named a Responsible Party under OPA.

  The applicable contracts between Cameron and Transocean entities provide for customary industry “knock-for-knock” indemnification by which each party agreed to bear the risk of, and hold the other harmless with respect to, all claims for personal injury, to include wrongful death, and property loss or damage of its own, its employees and those of its invitees.  In addition, the contracts provide that Transocean will indemnify Cameron for pollution or other damages associated with blowout or loss of well control to the fullest extent of any indemnity it has from its customers, which in this case is BP.  Transocean has publicly stated that it has a full pollution indemnity from BP, though BP has so far declined to acknowledge any obl igation under such indemnity.  Whereas, Transocean has settled lawsuits filed by its employees and the settlement agreements provide for a release of Cameron,  Transocean has yet to honor its indemnity obligations with respect to personal injury and property damage of its invitees or with respect to pollution liability. 

  The Company has commercial general liability insurance, including completed products and sudden accidental pollution coverage, with limits of $500 million and a self retention of $3 million.  Defense costs are not covered by the policy.  The Company has notified its insurers of the claims being asserted against it.  Coverage includes claims for personal injury and wrongful death, as well as liability for pollution and loss of revenue/business interruption.

  While the  Company’s BOPs have a history of reliable performance when properly maintained and operated in accordance with product specifications, until the litigation referred to above progresses and until the investigations referred to above are completed, we are unable to determine the extent of the Company’s future involvement in the litigation and any liability resulting from this incident.  If it is ultimately determined that the Company bears some responsibility, and therefore liability, for the costs and damages caused by this event, we will rely on our contractual indemnity rights and then, if and to the extent necessary and availa ble, on our insurance coverage.  We have received a “reservation of rights” letter from our insurers.  If our contractual indemnities are determined to be inapplicable, or the indemnitors fail or are unable to fulfill their contractual indemnity obligations, and if the damages and costs ultimately determined to be the Company’s responsibility exceed our available insurance coverage, we could be liable for amounts that could have a material adverse impact on our financial condition, results of operations and cash flows

   Through December 31, 2010, the Company incurred and expensed legal fees of $12.5 million.  The Company has not accrued any amounts relating to this matter because we do not believe at the present time a loss is probable.

81

Other Litigation

In 2001, the Company discovered that contaminated underground water from a former manufacturing site in Houston (see discussion below under Environmental Matters) had migrated under an adjacent residential area. Pursuant to applicable state regulations, the Company notified the affected homeowners. Concerns over the impact on property values of the underground water contamination and its public disclosure led to a number of claims by homeowners.  The Company has settled these claims, primarily as a result of the settlement of a class action lawsuit, and is obligated to reimburse 197 homeowners for any diminution in value of their property due to contamination concerns at the time of any sale.

   Based upon 2009 testing results of monitoring wells on the southeastern border of the plume, the Company notified at that time 33 homeowners whose property is adjacent to the class area that their property may be affected.  The Company is taking remedial measures to prevent these properties from being affected.

The Company believes, based on its review of the facts and law, that any potential exposure from existing agreements as well as any possible new claims that may be filed with respect to this underground water contamination will not have a material adverse effect on its financial position or results of operations. The Company’s consolidated balance sheet included a liability of approximately $11.7 million for these matters as of December 31, 2010.

   The Company has been named as a defendant in a number of multi-defendant, multi-plaintiff tort lawsuits since 1995. At December 31, 2010, the Company’s consolidated balance sheet included a liability of approximately $7.4 million for such cases. The Company believes, based on its review of the facts and law, that the potential exposure from these suits will not have a material adverse effect on its consolidated results of operations, financial condition or liquidity.

Regulatory Contingencies

The Company has completed its Focused Assessment Audit initiated in 2007 by the Regulatory Audit Division of the U.S. Customs and Border Protection, Department of Homeland Security.  The audit report found that the Company’s corrective actions taken in response to the audit findings were acceptable.

   In July 2007, the Company was one of a number of companies to receive a letter from the Criminal Division of the U.S. Department of Justice (DOJ) requesting information on activities undertaken on their behalf by a customs clearance broker. The DOJ is inquiring into whether certain of the services provided to the Company by the customs clearance broker may have involved violations of the U.S. Foreign Corrupt Practices Act (FCPA).  In response, the Company engaged special counsel reporting to the Audit Committee of the Board of Directors to conduct an investigation into its dealings with the customs clearance broker in Nigeria to determine if any payment made by the customs clearance broker in connection with the importation of Company property constituted a violation of the FCPA. Special counsel also reviewe d the extent, if any, of the Company’s knowledge and involvement in the performance of these services and activities and whether the Company fulfilled its obligations under the FCPA.  The U.S. Securities and Exchange Commission (SEC) is also conducting an informal inquiry into the same matters.  The investigation by special counsel has been completed and the Company is waiting for the agencies to commence discussions regarding the ultimate disposition of this matter.  At this stage, the Company cannot predict what the disposition of this matter will entail.

Tax Contingencies

The Company has legal entities in over 35 countries. As a result, the Company is subject to various tax filing requirements in these countries. The Company prepares its tax filings in a manner which it believes is consistent with such filing requirements. However, some of the tax laws and regulations to which the Company is subject require interpretation and/or judgment. Although the Company believes the tax liabilities for periods ending on or before the balance sheet date have been adequately provided for in the financial statements, to the extent a taxing authority believes the Company has not prepared its tax filings in accordance with the authority’s interpretation of the tax laws and regulations, the Company could be exposed to additional taxes.

Environmental Matters

The Company is currently identified as a potentially responsible party (PRP) with respect to two sites designated for cleanup under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) or similar state laws. One of these sites is Osborne, Pennsylvania (a landfill into which a predecessor of the PCS operation in Grove City, Pennsylvania deposited waste), where remediation is complete and remaining costs relate to ongoing ground water treatment and monitoring. The other is believed to be a de minimis exposure. The Company is also engaged in site cleanup under the Voluntary Cleanup Plan of the Texas Commission on Environmental Quality at former manufacturing locations in Houston and Missouri City, Texas. Additionally, the Company has discontinued operations at a n umber of other sites which had been active for many years. The Company does not believe, based upon information currently available, that there are any material environmental liabilities existing at these locations. At December 31, 2010, the Company’s consolidated balance sheet included a noncurrent liability of approximately $6.8 million for environmental matters.

82

Note 20: Unaudited Quarterly Operating Results

Unaudited quarterly operating results were as follows: 

	2010 (quarter ended)
(dollars in millions, except per share data)	March 31,		June 30,		September 30,		December 31,
Revenues	$	1,346.7	$	1,452.7	$	1,527.1	$	1,808.3
Revenues less cost of sales (exclusive of depreciation and amortization)	$	432.6	$	468.0	$	478.4	$	543.4
Other costs	$	10.3	$	18.4	$	10.4	$	8.1
Net income	$	120.4	$	129.2	$	148.7	$	164.6
Earnings per share:
Basic	$	0.49	$	0.53	$	0.61	$	0.68
Diluted	$	0.48	$	0.52	$	0.61	$	0.66

	2009 (quarter ended)
(dollars in millions, except per share data)	March 31,		June 30,		September 30,		December 31,
Revenues	$	1,257.0	$	1,270.0	$	1,231.8	$	1,464.4
Revenues less cost of sales (exclusive of depreciation and amortization)	$	413.3	$	429.3	$	403.8	$	436.7
Other costs	$	22.3	$	10.9	$	5.8	$	42.6
Net income	$	114.6	$	138.6	$	125.0	$	97.3
Earnings per share:
Basic	$	0.53	$	0.64	$	0.57	$	0.42
Diluted	$	0.52	$	0.62	$	0.56	$	0.41

83

Selected Consolidated Historical Financial Data of Cameron International Corporation

The following table sets forth selected historical financial data for the Company for each of the five years in the period ended December 31, 2010. This information should be read in conjunction with the consolidated financial statements of the Company and notes thereto included elsewhere in this Annual Report.

	Year Ended December 31,
(dollars in millions, except per share data)	2010			2009			2008			2007			2006
Income Statement Data:
Revenues	$	6,134.8		$	5,223.2		$	5,848.9		$	4,666.4		$	3,742.9
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown separately         below)		4,212.4			3,540.1			4,127.9			3,242.2			2,601.1
Selling and administrative expenses		862.3			715.6			668.3			577.6			528.6
Depreciation and amortization		201.6			156.6			132.1			109.8			101.3
Interest income		(4.2	)		(5.9	)		(27.3	)		(30.7	)		(27.0	)
Interest expense		82.2			92.4			70.3			43.8			35.0
Other costs		47.2			81.6			−			−			−
Charge for pension plan termination		–			−			26.2			35.7			−
Acquisition integration costs		–			−			−			−			29.6
Total costs and expenses		5,401.5			4,580.4			4,997.5			3,978.4			3,268.6
Income before income taxes		733.3			642.8			851.4			688.0			474.3
Income tax provision		(170.4	)		(167.3	)		(270.7	)		(199.8	)		(165.3	)
Net income	$	562.9		$	475.5		$	580.7		$	488.2		$	309.0
Basic earnings per share	$	2.32		$	2.15		$	2.67		$	2.23		$	1.36
Diluted earnings per share	$	2.27		$	2.11		$	2.54		$	2.11		$	1.32
Balance Sheet Data (at the end of period):
Total assets	$	8,005.1		$	7,725.4		$	5,902.4		$	4,730.8		$	4,350.7
Stockholders’ equity	$	4,392.4		$	3,919.7		$	2,344.5		$	2,133.7		$	1,792.8
Long-term debt	$	772.9		$	1,232.3		$	1,218.6		$	682.4		$	662.2
Other long-term obligations	$	266.0		$	277.1		$	228.0		$	221.8		$	267.5

84

EX-21.1

Exhibit 21.1

CAMERON INTERNATIONAL CORPORATION -- SUBSIDIARIES & JOINT VENTURES
(Active as of December 31, 2010)
	State/Country of
	Incorporation or
Cameron International Corporation (Delaware) -- Ultimate Parent	Organization
Angola Oilfield Equipment Limited (Joint Venture - 51% owned by Mahinda Serviços)	Angola
Axsia Group Limited	United Kingdom
Axsia Holdings Limited	United Kingdom
Axsia Howmar Limted	United Kingdom
Axsia Limited	United Kingdom
Axsia Serck Baker (Nigeria) Ltd	Nigeria
Cam Macaé Brasil Participações Ltda.	Brazil
Cameron (Holding) Corp.	USA (Nevada)
Cameron (Malaysia) Sdn Bhd	Malaysia
Cameron (Singapore) Pte. Ltd.	Singapore
Cameron (Trinidad) Limited	Trinidad and Tobago
Cameron Al Rushaid Limited Company	Saudi Arabia
Cameron Algerie S.á.r.l.	Algeria
Cameron Angola - Prestaçao de Serviços, Limitada	Angola
Cameron APME Holding Pty Ltd	Luxembourg
Cameron Argentina S.A.I.C.	Argentina
Cameron AS	Norway
Cameron Australasia Pty. Ltd.	Australia
Cameron B.V.	Netherlands
Cameron Beijing Commercial Co., Ltd.	China
Cameron Campex Limited	Cayman Islands
Cameron Canada Corporation	Canada (Nova Scotia)
Cameron Colombia Ltda	Colombia
Cameron de Mexico S.A. de C.V.	Mexico
Cameron do Brasil Ltda.	Brazil
Cameron Egypt LLC	Egypt
Cameron Energy Services B.V.	Netherlands
Cameron Energy Services International, Inc.	USA (Ohio)
Cameron Equipment (Shanghai) Co., Ltd.	China
Cameron Euro Automation Center B.V.	Netherlands
Cameron France, S.A.S.	France
Cameron Gabon, S.A. (1 share owned by Chairman)	Gabon
Cameron GmbH	Germany
Cameron Holding (Dutch) B.V.	Netherlands
Cameron Holding (Norway) AS	Norway
Cameron Inc.	USA (Louisiana)
Cameron Industries Limited	United Kingdom
Cameron International Holding B.V.	Netherlands
Cameron International Holding Corp.	USA (Nevada)
Cameron International Malaysia Sdn Bhd (Malaysia residents own 2 shares)	Malaysia
Cameron International Malaysia Systems Sdn Bhd	Malaysia
Cameron Investment Holding LLC	Russia
Cameron Ireland Holding Company	Ireland
Cameron Ireland Limited	Ireland
Cameron Italy Holding S.r.l.	Italy
Cameron Italy S.R.L.	Italy
Cameron Japan Ltd. (Joint Venture - 40% owned by 3rd party)	Japan
Cameron Korea Limited	Korea
Cameron Limited	United Kingdom
Cameron Lux APME SARL	Luxembourg
Cameron Lux AUD SARL	Luxembourg
Cameron Lux BRL SARL	Luxembourg
Cameron Lux CAD SARL	Luxembourg
Cameron Lux EUR SARL	Luxembourg
Cameron Lux GBP SARL	Luxembourg
Cameron Lux I SARL	Luxembourg
Cameron Lux II SARL	Luxembourg
Cameron Lux III SARL	Luxembourg
Cameron Lux IV SARL	Luxembourg
Cameron Lux MXN SARL	Luxembourg
Cameron Lux MYR SARL	Luxembourg
Cameron Lux NOK SARL	Luxembourg
Cameron Lux USD SARL	Luxembourg
Cameron Lux V SARL	Luxembourg
Cameron Manufacturing (India) Private Limited	India
Cameron Middle East FZE	United Arab Emirites
Cameron Middle East Ltd.	Cayman Islands
Cameron Netherlands B.V.	Netherlands
Cameron Norge AS	Norway
Cameron Offshore Engineering Limited	United Kingdom
Cameron Offshore Systems Nigeria Limited	Nigeria
Cameron Pensions Trustee Limited	United Kingdom
Cameron Petroleum Equipment Group, Inc.	USA (Delaware)
Cameron Products Limited	United Kingdom
Cameron Products Ltd.	Cayman Islands
Caméron România S.R.L.	Romania
Cameron Russia Ltd.	Cayman Islands

Page 1

	State/Country of
	Incorporation or
Cameron International Corporation (Delaware) -- Ultimate Parent	Organization

Cameron Services Middle East LLC (Joint Venture - 51% owned by 3rd party)	Oman
Cameron Services Russia Ltd.	Cayman Islands
Cameron Solutions Inc.	USA (Delaware)
Cameron Systems (Ireland) Limited	Ireland
Cameron Systems de Venezuela, S.A.	Venezuela
Cameron Systems Limited	United Kingdom
Cameron Systems S.R.L.	Italy
Cameron Systems Shanghai Co., Ltd.	China
Cameron Technologies UK Limited	United Kingdom
Cameron Technologies US, Inc.	USA (Delaware)
Cameron Technologies, Inc.	USA (Delaware)
Cameron Valves - Trading and Industrial Services, Sociedad Unipessoal LDA	Portugal
Cameron Valves & Measurement West Africa Limited	Nigeria
Cameron Venezolana, S.A.	Venezuela
Cameron Wellhead Services, LLC	USA (Nevada)
Cameron/Curtiss-Wright EMD LLC	USA (Delaware)
Canada Tiefbohrgeräte und Maschinenfabrik GmbH	Austria
Compression Services Company	USA (Ohio)
Connor Sales Company, Inc.	USA (North Dakota)
Cooper Cameron (U.K.) Investments Limited	United Kingdom
Cooper Cameron Corporation Nigeria Limited	Nigeria
Cooper Cameron Corporation Sdn Bhd	Malaysia
Cooper Cameron Foreign Sales Company Ltd.	Barbados
Cooper Cameron Holding (U.K.) Limited	United Kingdom
Cooper Cameron Libya Limited	Malta
Cooper Cameron Valves Australia Pty. Ltd.	Australia
Cooper Cameron Valves Singapore Pte. Ltd.	Singapore
Cooper Valves LP	USA (Texas)
D.E.S. Operations Limited	Scotland
DES Operations, Inc.	USA (Texas)
Flow Control-Tati Production Sdn. Bhd.	Malaysia
Fluid Processing (L) Bhd	Labuan
Fluid Processing Sdn Bhd (Joint Venture - 80% owned by 3rd party)	Malaysia
Geographe Energy Pty Ltd	Australia
Geographe Energy Singapore Pte Ltd	Singapore
International Valves Limited	United Kingdom
Jiskoot Holdings Limited	United Kingdom
Jiskoot Limited	United Kingdom
KCC Group Limited	United Kingdom
KCC Process Equipment Limited	United Kingdom
KCC Resources (Jersey) Limited	Jersey
Linco-Electromatic, Inc.	USA (Texas)
NATCO Al Rushaid Middle East Ltd. (Joint Venture - 50% owned by 3rd party)	Saudi Arabia
NATCO Canada Ltd.	Canada (Alberta)
NATCO do Brasil Industria, Comercio e Servicos de Petróleo e Gás Ltda.	Brazil
NATCO Group de Venezuela, S.A.	Venezuela
NATCO Group Inc.	USA (Delaware)
NATCO Holdings LLC	USA (Delaware)
NATCO Luxembourg S.á.r.l.	Luxembourg
NATCO Norway AS	Norway
NATCO Process Systems Pte Ltd.	Singapore
Newco Valves, LLC (Joint Venture - 15.75% owned by 3rd party)	USA (Texas)
Newmans (Dalian) Forged Steel Co. Ltd.	China
Newmans (Yancheng) Ball Valves Ltd.	China
Newmans (Yancheng) Cast Steel Ltd.	China
Newmans (Yancheng) Valve Manufacturing Ltd.	China
Newmans Australia Pty	Australia
Newmans International Ltd.	China (Hong Kong)
Newmans Shanghai Trading Ltd.	China
Newmans SRL	Italy
Newmans Valves Limited	Canada
NTC Technical Services Sdn. Bhd.	Malaysia
NTC Technical Services, Inc.	USA (Delaware)
NTG Group de Mexico, S. de R.L. de C.V.	Mexico
NuFlo Finance and Royalty Company	USA (Delaware)
On/Off Manufatura e Comércio de Vávulas Ltda.	Brazil
Petreco International (Middle East) Limited	United Kingdom
Petreco International Inc.	USA (Delaware)
Petreco-KCC Holding, Inc.	USA (Delaware)
Petreco-KCC Limited	United Kingdom
Precision Actuation Systems LLC	USA (New Jersey)
Process Analytical Applications, Inc.	USA (Texas)
PT Cameron Systems (Joint Venture - 8% owned by 3rd party)	Indonesia
PT Geographe Energy Indonesia	Indonesia
Richard Mozley Limited	United Kingdom
Riyan Cameron (B) Sendirian Berhad	Brunei
RJB Engineering (UK) Limited	United Kingdom
SBS Immobilienentwicklung und -verwertungs GmbH	Austria
SBS Oilfield Equipment GmbH	Austria
Scomi NTC Sdn. Bhd. (Joint Venture - 70% owned by 3rd party)	Malaysia
Sequel Holding, Inc.	USA (Delaware)
ShanDong Cameron Petroleum Equipment, Ltd.	China
TEST Angola - Tecnologia e Serviços Petrolíferos, Lda. (Joint Venture - 51% owned by 3rd party)	Angola
TEST International	Cayman Islands
TEST Saudi Arabia Ltd. (Joint Venture - 50% owned by 3rd party)	Saudi Arabia
TPS (Technical Petroleum Services) Nigeria Limited	Nigeria

Page 2

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements of Cameron International Corporation of our reports dated February 28, 2011, with respect to the consolidated financial statements and schedule of Cameron International Corporation, and the effectiveness of internal control over financial reporting of Cameron International Corporation, incorporated by reference or included in this Annual Report (Form 10-K) of Cameron International Corporation for the year ended December 31, 2010.

Registration Statement No.	Purpose
No. 333-26923 No. 33-95004 No. 333-53545 No. 333-37850 No. 333-106224	Form S-8 Registration Statements pertaining to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan
No. 33-95002	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Retirement Savings Plan
No. 333-57991	Form S-8 Registration Statement pertaining to the Individual Account Retirement Plan for Bargaining Unit Employees at the Cooper Cameron  Corporation  Buffalo, New York Plant
No. 333-51705	Form S-3 Registration Statement pertaining to the Cooper Cameron  Corporation shelf registration of up to $500 million of securities
No. 333-79787	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors
No. 333-46638 No. 333-82082 No. 333-61820 No. 333-104755	Form S-8 Registration Statements pertaining to the Cooper Cameron Corporation Broad Based 2000 Incentive Plan
No. 333-96565	Form S-3 and S-3/A Registration Statements pertaining to the Cooper Cameron Corporation shelf registration of up to $500 million of securities
No. 333-128414 No. 333-136900	Form S-8 Registration Statements pertaining to the Cameron International Corporation 2005 Equity Incentive Plan
No. 333-136589	Form S-3 Registration Statement pertaining to the Cameron International 2.50% Convertible Senior Notes due 2026
No. 333-151838	Form S-3ASR Registration Statement pertaining to the Cameron International Corporation $750 Million Ten-year and Thirty-year Unsecured Senior Notes
No. 333-156712	Form S-8 Registration Statement pertaining to the Cameron International Corporation Deferred Compensation Plan for Non-Employee Directors and the Cameron International Corporation Nonqualified Deferred Nonqualified Deferred Compensation Plan
No. 333-168327	Form S-8 Registration Statement pertaining to the NATCO Group, Inc. 1998 Employee Stock Option Plan, the NATCO Group, Inc. 2001 Stock Incentive Plan, the NATCO Group, Inc. 2004 Stock Incentive Plan, and the NATCO Group, Inc. 2006 Long-Term Incentive Compensation Plan, as Amended and Restated
No. 333-166451	Form S-8 Registration Statement pertaining to the Cameron International Corporation 2005 Equity Incentive Plan

/s/ Ernst & Young LLP

Houston, Texas

February 28, 2011

EX-31.1

Exhibit 31.1

Cameron International Corporation and Subsidiaries

Certification

I, Jack B. Moore, certify that:

1. I have reviewed this annual report on Form 10-K of Cameron International Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28,  2011

 /s/ Jack B. Moore                                 

 Jack B. Moore

 President & Chief Executive Officer

EX-31.2

Exhibit  31.2

Cameron International Corporation and Subsidiaries

Certification

I, Charles M. Sledge, certify that:

1. I have reviewed this annual report on Form 10-K of Cameron International Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2011

By: /s/ Charles M. Sledge                                             

 Charles M. Sledge

 Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of CEO and CFO Pursuant to

18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K for the year ended December 31, 2010 of Cameron International Corporation (the Company) as filed with the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned officers of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to such officer’s knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 28, 2011

	/s/  Jack B. Moore
Name:	Jack B. Moore
Title:	President and Chief Executive Officer
	/s/  Charles M. Sledge
Name:	Charles M. Sledge
Title:	Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Cameron International Corporation and will be retained by Cameron International Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

Note: The certification the registrant furnishes in this exhibit is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Registration Statements or other documents filed with the Securities and Exchange Commission shall not incorporate this exhibit by reference, except as otherwise expressly stated in such filing.