nanitem 14 principal accounting fees services item 14 incorporated reference definitive proxy statement filed pursuant regulation 14a exchange act expect file definitive proxy statement sec within 120 days december 31 2014 part iv item 15item 14 principal accounting fees services item 14 incorporated reference definitive proxy statement filed pursuant regulation 14a exchange act expect file definitive proxy statement sec within 120 days december 31 2015 part iv item 15item 14 principal accounting fees services item 14 incorporated reference definitive proxy statement filed pursuant regulation 14a exchange act expect file definitive proxy statement sec within 120 days december 31 2016 part iv item 15item 14 principal accounting fees services item 14 incorporated reference definitive proxy statement filed pursuant regulation 14a exchange act expect file definitive proxy statement sec within 120 days december 31 2017 part iv item 15item 14 principal accounting fees services item 14 incorporated reference definitive proxy statement filed pursuant regulation 14a exchange act expect file definitive proxy statement sec within 120 days december 31 2018 part iv item 15item 14 principal accounting fees services item 14 incorporated reference definitive proxy statement filed pursuant regulation 14a exchange act expect file definitive proxy statement sec within 120 days december 31 2019 part iv item 15item 14 principal accounting fees services item 14 incorporated reference definitive proxy statement filed pursuant regulation 14a exchange act expect file definitive proxy statement sec within 120 days december 31 2020 part iv item 15 item 7 managements discussion analysis financial condition results operation following discussion analysis financial condition results operations read conjunction consolidated financial statements related notes thereto included part ii item 8 financial statements supplementary data included form 10k section contains forwardlooking statements based managements current expectations estimates projections business operations involve risks uncertainties actual results may differ materially currently anticipated expressed forwardlooking statement various factors including described sections titled cautionary note regarding forwardlooking statements“risk factors” elsewhere form 10k overview business 75 yearold global provider highly engineered tubular services oil gas industry provide services leading exploration production companies offshore onshore environments focus complex technically demanding wells conduct business three operating segments • international services currently provide services approximately 60 countries six continents customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies • us services service customers deep water areas us gulf mexico addition significant presence almost active onshore oil gas drilling regions us including permian basin eagle ford shale marcellus shale utica shale barnett shale woodford shale piceance basin san juan basin uintah basin big horn basin powder river basin djwattenberg basin williston basin • tubular sales design manufacture certain products sell directly external customers including large od pipe connectors also provide specialized fabrication welding services support deep water projects us gulf mexico including drilling production risers flowlines pipeline end terminations well long length tubulars 300 feet length use caissons pilings addition distribute large od pipe manufactured third parties equipped weldon end connections segment also designs manufactures proprietary equipment use international us services segments generate revenue majority services revenues derived primarily two sources • personnel rates specially trained employees perform tubular services customers • rental rates suite products equipment employees use perform tubular services addition customers typically reimburse us transportation costs incur connection transporting products equipment staging areas customers’ job sites contrast tubular sales revenues derived sales certain products including large od pipe connectors large od pipe manufactured third parties directly external customers evaluate operations use number financial operational measures routinely analyze evaluate performance business including revenue adjusted ebitda adjusted ebitda margin safety performance revenue analyze revenue growth comparing actual monthly revenue internal projections month assess performance also assess incremental changes monthly revenue across operating segments identify potential areas improvement adjusted ebitda adjusted ebitda margin define adjusted ebitda income continuing operations net interest income expense depreciation amortization income tax benefit expense asset impairments gain loss sale assets foreign currency gain loss stockbased compensation noncash adjustments unusual nonrecurring charges adjusted ebitda margin reflects adjusted ebitda percentage revenues review adjusted ebitda adjusted ebitda margin consolidated basis segment basis use adjusted ebitda adjusted ebitda margin assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization items outside control management team income tax rates adjusted ebitda adjusted ebitda margin limitations analytical tools considered alternative net income operating income cash flow operating activities measure financial performance liquidity presented accordance generally accepted accounting principles us gaap following table presents reconciliation income continuing operations adjusted ebitda directly comparable gaap performance measure periods presented thousands 1 represents nonrecurring charges incurred connection ipo primarily amounts attributable restructuring advance ipo reconciliation adjusted ebitda segment basis comparable measure calculated accordance gaap see “operating segment results” safety performance maintaining strong safety record critical component operational success many larger customers safety standards must satisfy perform services continually monitor safety culture use employee safety surveys trend analysis modify existing programs develop new programs according data obtained therefrom one way measure safety tracking total recordable incident rate “trir” lost time incident rate “ltir” reviewed monthly rolling twelvemonth basis trir measure rate recordable workplace injuries normalized stated basis 100 workers annual period factor derived multiplying number recordable injuries calendar year 200000 dividing value total manhours actually worked year ltir measures rate lost time recordable workplace injuries factor derived multiplying number lost time recordable injuries calendar year 200000 dividing value total manhours actually worked year lost time recordable injury work related injury renders employee unable work capacity beyond date injury recordable injury includes occupational death nonfatal occupational illness occupational injuries involve loss consciousness restriction work motion transfer another job medical treatment first aid table presents worldwide trir ltir years ended december 31 2013 2012 2011 outlook believe longterm outlook tubular services businesses favorable increasing global demand crude oil natural gas spurred increases energy development spending significant new well development required replace naturally declining production new well construction increasingly complex expensive expect us international offshore businesses continue benefit increased deep water ultra deep water drilling activity including new drilling rigs worldwide new drillships semisubmersibles drilling rigs offer opportunity increased demand services us land business impacted number rigs working wells drilled well competitive environment believe market remain competitive ability move resources people equipment areas demand tubular sales business follow particular industry driver instead business driven requirements timing customers projects believe facilities services position us well meet needs customers business continue grow coming years expect cash flow operations fund working capital needs capital expenditure requirements fund current future dividends acquisition would funded combination cash hand cash flow operations equity issuances borrowings credit facility expect effective tax rate 2014 20 25 percent results operations following table presents consolidated results periods presented thousands 1 consolidated products revenue includes small amount revenues attributable us services international services segments consolidated results operations year ended december 31 2013 compared year ended december 31 2012 revenues external customers excluding intersegment sales year ended december 31 2013 increased 387 million 37 10777 million 10391 million year ended december 31 2012 increase primarily attributable higher revenues segments notably tubular sales u services segments revenues increasing 124 million 181 million respectively due increase demand pipe offshore services cost revenues exclusive depreciation amortization cost revenues year ended december 31 2013 increased 87 million 21 4343 million 4256 million year ended december 31 2012 increase primarily attributable increases compensation related costs 94 million cost products 30 million partially offset 31 million decrease equipment rentals general administrative expenses general administrative ga expenses year ended december 31 2013 increased 386 million 208 2248 million 1861 million year ended december 31 2012 increase primarily attributable 138 million bad debt expense latin american region due political economic turmoil venezuela filing bankruptcy customer brazil compensation related costs 86 million stock based compensation expense 72 million nonincome based taxes 55 million 40 million public company expenses 34 million nonrecurring nature also contributed increase depreciation amortization depreciation amortization year ended december 31 2013 increased 123 million 186 781 million 658 million year ended december 31 2012 increase primarily attributable higher depreciable base resulting property equipment additions income year ended december 31 2013 decreased 27 million 224 95 million 122 million year ended december 31 2012 decrease due 40 million gain exchange investment 49 million death benefit proceeds passing related party received 2012 partially offset receipt 2013 39 million additional royalties 16 million valueadded tax refund workmens compensation dividend 11 million foreign currency loss foreign currency loss year ended december 31 2013 increased 21 million 26 million 05 million year ended december 31 2012 increase foreign currency loss due unfavorable fluctuations foreign currency exchange rates income tax expense income tax expense year ended december 31 2013 increased 69 million 215 387 million 319 million year ended december 31 2012 primarily due domestic operations becoming taxable subsequent ipo well change mix earnings among countries different rates subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income loss operations income tax benefit provision varies period income discontinued operations discussions reflect continuing operations years ended december 31 2013 2012 year ended december 31 2013 recognized gain 396 million upon sale component tubular sales segment see note 3 notes consolidated financial statements year ended december 31 2012 compared year ended december 31 2011 revenues external customers excluding intersegment sales year ended december 31 2012 increased 3196 million 444 10391 million 7194 million year ended december 31 2011 increase primarily attributable higher revenues 1633 million 548 million us services tubular sales segments respectively demand continued increase repeal macondorelated drilling moratorium increased activity levels international services segment comprised approximately 1033 million increase cost revenues exclusive depreciation amortization cost revenues year ended december 31 2012 increased 1031 million 320 4256 million 3225 million year ended december 31 2011 increase primarily attributable increases cost products equipment rentals services 730 million compensationrelated costs 286 million due aforementioned increase drilling activity general administrative expenses ga expenses year ended december 31 2012 increased 265 million 166 1861 million 1596 million year ended december 31 2011 increase supported growth business result growth experienced approximately 227 million higher compensation related costs depreciation amortization depreciation amortization year ended december 31 2012 increased 116 million 214 658 million 542 million year ended december 31 2011 increase primarily attributable higher depreciable base resulting property equipment additions income year ended december 31 2012 increased 84 million 2219 122 million 38 million year ended december 31 2011 increase due 40 million gain exchange investment 49 million death benefit proceeds passing related party foreign currency loss foreign currency loss year ended december 31 2012 decreased 27 million 860 05 million 32 million year ended december 31 2011 decrease foreign currency loss due favorable fluctuations foreign currency exchange rates income tax expense income tax expense year ended december 31 2012 increased 116 million 571 319 million 203 million year ended december 31 2011 subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income loss operations income tax benefit provision varies period income discontinued operations discussions discuss continuing operations years ended december 31 2012 2011 see note 3 notes consolidated financial statements operating segment results following table presents revenues adjusted ebitda segment reconciliation adjusted ebitda net income continuing operations comparable gaap financial measure thousands 1 corporate represents amounts directly associated operating segment year ended december 31 2013 compared year ended december 31 2012 international services revenue international services segment increased 91 million 19 compared 2012 primarily result increased demand services west africa middle far east canada experienced decreases latin america due termination certain contracts europe due uncertainty exportation limits israel adjusted ebitda international services segment decreased 196 million 89 compared 2012 primarily due increase bad debt expense 138 million due political economic turmoil venezeula filing bankruptcy customer brazil compensation related costs 119 million nonincome based taxes 29 million partially offset 91 million increase revenue us services revenue us services segment increased 109 million 25 compared 2012 due 323 million higher offshore revenue lafayette houma locations provide primarily offshore services increase partially offset decrease 198 million onshore office locations adjusted ebitda us services segment decreased 10 million 05 compared 2012 due increases equipment rental costs 45 million nonincome based taxes 26 million receipt 2012 49 million death benefit proceeds passing related party substantially offset 109 million increase revenue tubular sales revenue tubular sales segment increased 417 million 212 compared 2012 primarily due increase 220 million pipe sales deepwater markets increase 212 million international us services segments manufacturing component partially offsetting increases lower fabrication revenues 16 million adjusted ebitda tubular sales segment increased 197 million 938 compared 2012 primarily result 417 million increase revenue partially offset 131 million increase cost pipe products resulting higher revenue addition higher compensation related costs 40 million increase equipment rentals supplies 32 million attributed increase year ended december 31 2012 compared year ended december 31 2011 international services revenue international services segment increased 1034 million 282 compared 2011 primarily result additional contracts increased demand services existing customers europe far east africa regions approximately 567 million latin america experienced increase tubular services performed callout basis approximately 140 million remainder increase attributable increased demand international regions adjusted ebitda international services segment increased 661 million 432 compared 2011 primarily result 1034 million revenue increase described partially offsetting increase higher freight transportation repairs maintenance expenses demand services deep water offshore markets increased number employees international services segment increased 19 2012 compared 2011 initiated higher compensation related costs approximately 245 million us services revenue us services segment increased 1673 million 603 compared 2011 primarily result increased services volume due increased permit activity us gulf mexico following october 2010 repeal macondorelated drilling moratorium adjusted ebitda us services segment increased 1273 million 1764 compared 2011 primarily result 1673 million revenue increase described increase income 91 million partially offsetting increase 234 million increase cost revenues 2012 due increases product costs salaries wages ga expenses increased 257 million 2012 due primarily higher compensation related increase employees segment tubular sales revenue tubular sales segment increased 695 million 545 compared 2011 primarily result increased permit activity us gulf mexico following october 2010 repeal macondorelated drilling moratorium increased sales us customers approximately 402 million increase activity international markets approximately 168 million also contributed increase adjusted ebitda tubular sales segment increased 50 million 317 compared 2011 primarily result 695 million revenue increase described partially offsetting increase cost revenues including higher materials costs approximately 493 million higher direct labor costs approximately 78 million addition ga expenses increased approximately 33 million due higher compensation related costs liquidity capital resources liquidity primary sources liquidity date cash flows operations net proceeds received recent ipo well borrowing capacity credit facilities primary uses capital organic growth capital expenditures acquisitions continually monitor potential capital sources including equity debt financing order meet investment target liquidity requirements total capital expenditures estimated 2500 million 2014 expect approximately 1400 million purchase manufacture equipment remainder purchase construction facilities 2014 capital expenditure budget include provision acquisitions actual amount capital expenditures manufacture equipment may fluctuate based market conditions years ended december 31 2013 2012 2011 capital expenditures 1845 million 1802 million 1179 million respectively funded internally generated sources believe remaining net proceeds ipo together cash flows operations additional borrowings credit facilities sufficient fund capital expenditure requirements 2014 dividend 0075 per share paid december 19 2013 stockholders record november 29 2013 board directors declared first quarter 2014 cash dividend 0075 per share stockholders record february 28 2014 payable march 21 2014 expect pay regular cash dividend annual rate 030 per share however timing declaration amount payment dividends within discretion board directors depend upon many factors including financial condition earnings capital requirements operating subsidiaries covenants associated certain debt service obligations legal requirements regulatory constraints industry practice ability access capital markets factors deemed relevant board directors legal obligation pay dividend assurance able credit facilities connection ipo entered two revolving credit facilities credit agreements provide 1000 million revolving credit facility including 200 million letters credit 100 million swingline loans matures august 2018 “five year facility” ii 1000 million revolving credit facility matures august 2014 “one year facility” together five year facility “credit facilities” subject terms credit agreements ability increase commitments credit facilities 1500 million december 31 2013 outstanding indebtedness credit facilities approximately 73 million letters credit outstanding incurred approximately 10 million deferred financing costs related credit facilities borrowings credit facilities bear interest option either base rate adjusted eurodollar rate base rate loans credit facilities bear interest rate equal higher prime rate published wall street journal b federal funds effective rate plus 05 c adjusted eurodollar rate plus 100 plus applicable margin ranging 050 150 subject adjustment based leverage ratio interest payable quarterly baserate loans eurodollar loans credit facilities bear interest adjusted eurodollar rate equal eurodollar rate interest period multiplied statutory reserves plus applicable margin ranging 150 250 subject adjustment based leverage ratio interest payable end applicable interest periods eurodollar loans except interest period eurodollar loan longer three months interest paid end threemonth period unused portion five year facility subject commitment fee 0375 credit facilities contain various covenants among things limit ability grant certain liens make certain loans investments enter mergers acquisition enter hedging transactions change lines business prepay certain indebtedness enter certain affiliate transactions incur additional indebtedness engage certain asset dispositions additionally credit agreements limit ability incur additional indebtedness subject certain exceptions credit facilities also contain financial covenants among things require us consolidated basis maintain total consolidated funded debt adjusted ebitda defined credit facilities ratio 250 10 ii ebitda interest expense ratio less 30 10 december 31 2013 compliance financial covenants credit facilities addition credit facilities contain customary events default including among others failure make required payments borrowers failure comply certain covenants agreements borrowers breach representation covenants contained agreements borrowers default certain indebtedness certain events bankruptcy insolvency occurrence change control defined credit facilities prior completion ipo two revolving credit facilities available borrowing capacities 400 million 50 million connection completion ipo credit facilities repaid full terminated notes payable financed certain business acquisitions financing agreements december 31 2013 2012 aggregate outstanding balance finance agreements 04 million 13 million respectively interest rate 5 per annum finance agreements due demand maturity dates october 2018 notes payable affiliated 2012 made noncash distribution 4840 million owners form two unsecured promissory notes payable fww connection completion ipo notes fww repaid full also various notes payable affiliated either paid transferred mosing holdings connection completion ipo indebtedness existing prior ipo repaid cash flows operating investing financing activities cash flows provided used operations investing financing activities summarized thousands statements cash flows entities international operations use local currency functional currency exclude effects changes foreign currency exchange rates occur given year noncash changes result changes reflected certain accounts consolidated statements cash flows may reflect changes corresponding accounts consolidated balance sheets operating activities cash flow operating activities 2774 million year ended december 31 2013 compared 3448 million 2012 1807 million 2011 decrease 2013 due primarily increase inventory decrease accrued expenses partially offset increase deferred revenue increase 2012 due primarily increase profitability result increased permit activity repeal macondorelated moratorium us gulf mexico occurred late 2010 investing activities cash flow used investing activities 1375 million year ended december 31 2013 compared 1825 million 2012 1267 million 2011 decrease 2013 due primarily 510 million proceeds sale assets equipment primarily including sale component tubular sales segment increase 2012 primarily due increase capital expenditures ensure maintain appropriate levels types machinery equipment support expanding business financing activities cash provided financing activities 1102 million year ended december 31 2013 compared cash used financing activities 1072 million 719 million years ended december 31 2012 2011 respectively 2013 received net proceeds approximately 7115 million ipo partially offset 4640 million payments related fww notes 1054 million stockholder distributions 115 million dividend payments common stock 115 million distributions noncontrolling interests cash used financing activities increased 2012 2011 primarily due increase stockholder distributions partially offset increase borrowings revolving credit facilities contractual obligations party various contractual obligations portion obligations reflected financial statements longterm debt obligations operating leases purchase obligations reflected balance sheet following summary contractual obligations december 31 2013 thousands 1 includes purchase commitments connectors pipe existing orders customers enter purchase commitments asneeded basis included table uncertain tax positions 21 million accrued december 31 2013 amounts timing payment uncertain see note 16 notes consolidated financial statements detail amount entered tra mosing holdings connection ipo agreement generally provides payment us 85 actual reductions payments us federal state local income tax franchise tax periods result tax basis increases resulting transfer ficv interests us connection conversion shares preferred stock shares common stock ii imputed interest deemed paid us result additional tax basis arising payments tra addition tra provides interest earned due date without extensions corresponding tax return date payment specified tra conversions tra impacted consolidated financial statements actual amount timing payments tra depend upon number factors including amount timing taxable income generate future value individual assets portion payments tra constituting imputed interest increases tax basis assets resulting payments mosing holdings offbalance sheet arrangements december 31 2013 offbalance sheet arrangements critical accounting policies preparation consolidated financial statements conformity gaap requires management select appropriate accounting principles available apply principles consistently make reasonable estimates assumptions affect revenues associated costs well reported amounts assets liabilities related disclosure contingent assets liabilities certain accounting policies involve judgments uncertainties evaluate estimates assumptions regular basis base respective estimates historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates assumptions used preparation consolidated financial statements consider following policies critical understanding judgments involved uncertainties could impact results operations financial condition cash flows revenue recognition revenue recognized following criteria met 1 evidence arrangement exists 2 delivery acceptance customer occurred 3 price customer fixed determinable 4 collectability reasonably assured follows services revenue provide tubular services clients oil gas industry perform services either direct service purchase orders master service agreements service revenue recognized services performed rendered rental revenue design manufacture suite highly technical equipment products rent customers connection providing services including highend proprietary tubular handling equipment rent products either direct rental agreements customers rental agreements place revenue rental agreements recognized earned rental period customers contracted direct service purchase orders direct rental agreements accrual recorded unbilled accounts receivable revenue earned yet invoiced tubular sales revenue tubular sales recognized product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions postdelivery obligations regions customers right return due purchasing excess products deliverability limitations products remote locations likelihood return exists sale determination portion revenue reclassified unearned revenue time product returned return occurs income taxes liability method used determining income tax provisions current deferred tax liabilities assets recorded accordance enacted tax laws rates method amounts deferred tax liabilities assets end period determined using tax rate expected effect taxes actually paid recovered valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances considered made judgments estimates regarding estimated future taxable income ongoing prudent feasible tax planning strategies estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets historically changes valuation allowances caused major changes business cycle certain countries changes local country law ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions ficv operate approximately 60 countries many legal forms result subject jurisdiction numerous us foreign tax authorities well tax agreements treaties among governments operations different jurisdictions taxed various bases actual income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events amount timing character deductions permissible revenue recognition methods tax law sources character income tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact amount income taxes provide given year tax filings various periods subject audit tax authorities jurisdictions conduct business audits may result assessments additional taxes resolved authorities courts believe assessments may occasionally based erroneous even arbitrary interpretations local tax law resolution situations inevitably includes degree uncertainty accordingly provide taxes amounts believe ultimately result proceedings resulting change tax liability dependent numerous factors including among others amount nature additional taxes potentially asserted local tax authorities willingness local tax authorities negotiate fair settlement administrative process impartiality local courts number countries business potential changes tax paid one country either produce fail produce offsetting tax change countries experience estimates assumptions used provide future tax assessments proven appropriate however past experience guide potential exists tax resulting resolution current potential future tax controversies may differ materially amount accrued addition aforementioned assessments received various tax authorities also provide taxes uncertain tax positions formal assessments received determination liabilities requires use estimates assumptions regarding future events established adjust amounts information available future event occurs necessitating change reserves changes facts law judicial decisions regarding application existing law favorable audit outcome believe resolution tax matters material effect consolidated financial condition although resolution could material impact consolidated statements income particular period effective tax rate period resolution occurs allowance doubtful accounts evaluate whether client receivables collectible perform ongoing credit evaluations clients monitor collections payments order maintain provision estimated uncollectible accounts based historical collection experience current aging client receivables outstanding addition clients representations understanding economic environment clients operate based review establish adjust allowances specific clients accounts receivable whole allowance doubtful accounts december 31 2013 2012 136 million 17 million respectively recent accounting pronouncements see note 1 notes consolidated financial statements set forth part ii item 8 financial statements supplementary data heading recent accounting pronouncements included form 10k item 7aitem 7 managements discussion analysis financial condition results operation following discussion analysis financial condition results operations read conjunction consolidated financial statements related notes thereto included part ii item 8 financial statements supplementary data included form 10k section contains forwardlooking statements based managements current expectations estimates projections business operations involve risks uncertainties actual results may differ materially currently anticipated expressed forwardlooking statements various factors including described sections titled cautionary note regarding forwardlooking statements risk factors elsewhere form 10k overview business global provider highly engineered tubular services oil gas industry business 75 years provide services leading exploration production companies offshore onshore environments focus complex technically demanding wells conduct business three operating segments • international services currently provide services approximately 60 countries six continents customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies • us services service customers offshore areas us gulf mexico addition significant presence almost active onshore oil gas drilling regions us including permian basin bakken shale barnett shale eagle ford shale haynesville shale marcellus shale utica shale • tubular sales design manufacture distribute large od pipe connectors casing attachments also provide specialized fabrication welding services support offshore projects including drilling production risers flowlines pipeline end terminations well longlength tubulars 300 feet length use caissons pilings segment also designs manufactures proprietary equipment use international us services segments generate revenue majority services revenues derived primarily personnel rates specially trained employees perform tubular services customers rental rates suite products equipment employees use perform tubular services addition customers typically reimburse us transportation costs incur connection transporting products equipment staging areas customers’ job sites contrast tubular sales revenues derived sales certain products including large od pipe connectors large od pipe manufactured third parties directly external customers outlook believe shortterm outlook tubular services businesses adverse oil gas industry cyclical current uncertainty global demand excess supply caused dramatic reduction commodity prices significant new well development required replace naturally declining production timing new development uncertain longterm outlook tubular services businesses remains positive expect offshore businesses us internationally negatively impacted current commodity price environment however expect benefit deep water ultradeep water drilling activity existing new drilling rigs worldwide newer generation drillships semisubmersible drilling rigs offer opportunity increased demand services addition new well construction increasingly complex expensive land businesses impacted number rigs working wells drilled well competitive environment believe market face pricing competitive threats due lower commodity prices reduced activity impacts opportunity work ability move resources people equipment areas demand tubular sales business follow particular industry driver instead business driven requirements timing customers projects believe facilities services position us well meet needs customers business continue grow coming years positioned financially virtually debt significant cash hand take advantage market growth opportunities evaluating cost structure including looking opportunities reduce costs focused productivity projects expect cash flows operations fund working capital needs capital expenditure requirements fund current expected future dividends acquisition would funded combination cash hand cash flow operations debt equity issuances borrowings credit facility evaluate operations use number financial operational measures routinely analyze evaluate performance business including revenue adjusted ebitda adjusted ebitda margin safety performance revenue analyze revenue growth comparing actual monthly revenue internal projections month assess performance also assess incremental changes monthly revenue across operating segments identify potential areas improvement adjusted ebitda adjusted ebitda margin define adjusted ebitda income continuing operations net interest income expense depreciation amortization income tax benefit expense asset impairments gain loss sale assets foreign currency gain loss stockbased compensation noncash adjustments unusual nonrecurring charges credits adjusted ebitda margin reflects adjusted ebitda percentage revenues review adjusted ebitda adjusted ebitda margin consolidated basis segment basis use adjusted ebitda adjusted ebitda margin assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization items outside control management team income tax rates adjusted ebitda adjusted ebitda margin limitations analytical tools considered alternative net income operating income cash flow operating activities measure financial performance liquidity presented accordance generally accepted accounting principles us gaap following table presents reconciliation income continuing operations adjusted ebitda directly comparable gaap performance measure well adjusted ebitda margin periods presented thousands 1 represents nonrecurring charges incurred connection ipo primarily amounts attributable restructuring advance ipo reconciliation adjusted ebitda segment basis comparable measure calculated accordance gaap see “operating segment results” safety performance maintaining strong safety record critical component operational success many larger customers safety standards must satisfy perform services continually monitor safety culture use employee safety surveys trend analysis modify existing programs develop new programs according data obtained one way measure safety tracking total recordable incident rate “trir” lost time incident rate “ltir” reviewed monthly rolling twelvemonth basis trir measure rate recordable workplace injuries normalized stated basis 100 workers annual period factor derived multiplying number recordable injuries calendar year 200000 dividing value total manhours actually worked year ltir measures rate lost time recordable workplace injuries factor derived multiplying number lost time recordable injuries calendar year 200000 dividing value total manhours actually worked year lost time recordable injury work related injury renders employee unable work capacity beyond date injury recordable injury includes occupational death nonfatal occupational illness occupational injuries involve loss consciousness restriction work motion transfer another job medical treatment first aid table presents worldwide trir ltir years ended december 31 2014 2013 2012 results operations following table presents consolidated results periods presented thousands 1 consolidated products revenue includes small amount revenues attributable us services international services segments consolidated results operations year ended december 31 2014 compared year ended december 31 2013 revenues external customers excluding intersegment sales year ended december 31 2014 increased 749 million 70 11526 million 10777 million year ended december 31 2013 increase primarily attributable higher revenues segments notably international tubular segments revenues increasing 620 million 82 million respectively due increase demand expansion new existing locations revenue segments discussed separately heading operating segment results cost revenues exclusive depreciation amortization cost revenues year ended december 31 2014 increased 456 million 105 4800 million 4343 million year ended december 31 2013 increase primarily attributable compensation related costs 236 million repairs maintenance 69 million freight expense 65 million custom duty charges 33 million business travel expenses 28 million tool inspections 20 million rent expense 13 million partially offset smaller decreases several costs 08 million general administrative expenses general administrative ga expenses year ended december 31 2014 increased 426 million 190 2674 million 2248 million year ended december 31 2013 primarily due increase stock compensation costs 312 million included amount outofperiod adjustment 47 million related 2013 corrected amortization expense related retirementeligible employees see note 1 notes consolidated financial statements additional detail compensation related costs 141 million medical claims 35 million professional fees 35 million rent utilities expense 32 million insurance costs 19 million also contributed increase well smaller decreases several costs 08 million increase costs primarily attributable incurring public company costs full year 2014 compared four months 2013 increases partially offset decrease bad debt expense 156 million depreciation amortization depreciation amortization year ended december 31 2014 increased 120 million 153 900 million 781 million year ended december 31 2013 increase primarily attributable higher depreciable base resulting property equipment additions income year ended december 31 2014 decreased 27 million 288 67 million 95 million year ended december 31 2013 decrease primarily attributable lower royalties received 2014 foreign currency loss foreign currency loss year ended december 31 2014 increased 145 million 170 million 26 million year ended december 31 2013 increase foreign currency loss primarily due foreign currency losses venezuela 130 million see note 1 notes consolidated financial statements additional detail addition unfavorable fluctuations 15 million foreign currency rates income tax expense income tax expense year ended december 31 2014 increased 367 million 947 754 million 387 million year ended december 31 2013 primarily due us operations becoming taxable result restructuring concurrent ipo full year 2014 compared four months 2013 subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income operations income tax provision varies period income discontinued operations recognize income discontinued operations year ended december 31 2014 year ended december 31 2013 recognized gain 396 million upon sale component tubular sales segment see note 3 notes consolidated financial statements year ended december 31 2013 compared year ended december 31 2012 revenues external customers excluding intersegment sales year ended december 31 2013 increased 387 million 37 10777 million 10391 million year ended december 31 2012 increase primarily attributable higher revenues segments notably tubular sales u services segments revenues increasing 124 million 181 million respectively due increase demand pipe offshore services cost revenues exclusive depreciation amortization cost revenues year ended december 31 2013 increased 87 million 21 4343 million 4256 million year ended december 31 2012 increase primarily attributable increases compensation related costs 94 million cost products 30 million partially offset 31 million decrease equipment rentals general administrative expenses ga expenses year ended december 31 2013 increased 386 million 208 2248 million 1861 million year ended december 31 2012 increase primarily attributable 138 million bad debt expense latin american region due political economic turmoil venezuela filing bankruptcy customer brazil compensation related costs 86 million stock based compensation expense 72 million nonincome based taxes 55 million 40 million public company expenses 34 million nonrecurring nature also contributed increase depreciation amortization depreciation amortization year ended december 31 2013 increased 123 million 186 781 million 658 million year ended december 31 2012 increase primarily attributable higher depreciable base resulting property equipment additions income year ended december 31 2013 decreased 27 million 224 95 million 122 million year ended december 31 2012 decrease due 40 million gain exchange investment 49 million death benefit proceeds passing related party received 2012 partially offset receipt 2013 39 million additional royalties 16 million valueadded tax refund workmens compensation dividend 11 million foreign currency loss foreign currency loss year ended december 31 2013 increased 21 million 26 million 05 million year ended december 31 2012 increase foreign currency loss due unfavorable fluctuations foreign currency exchange rates income tax expense income tax expense year ended december 31 2013 increased 69 million 215 387 million 319 million year ended december 31 2012 primarily due domestic operations becoming taxable subsequent ipo well change mix earnings among countries different rates subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income loss operations income tax benefit provision varies period income discontinued operations discussions reflect continuing operations years ended december 31 2013 2012 year ended december 31 2013 recognized gain 396 million upon sale component tubular sales segment see note 3 notes consolidated financial statements operating segment results following table presents revenues adjusted ebitda segment reconciliation adjusted ebitda net income continuing operations comparable gaap financial measure thousands 1 corporate represents amounts directly associated operating segment 2 adjusted ebitda supplemental nongaap financial measure used management external users financial statements industry analysts investors lenders rating agencies year ended december 31 2014 compared year ended december 31 2013 international services revenue international services segment increased 602 million 126 compared 2013 primarily result extended renewed contracts west africa expansion product placement europe increasing market share far east middle east partially offset decrease latin america due termination certain contracts late 2013 adjusted ebitda international services segment increased 318 million 160 compared 2013 primarily due revenue increase 602 million 164 million decrease bad debt expense partially offset increases compensation related costs 179 million freight transportation costs 50 million product costs 46 million equipment rentals 35 million custom duty charges 34 million business travel expenses 31 million rent warehouse expense 25 million crew expenses 18 million employee benefits insurance 09 million well smaller increases various costs 21 million us services revenue us services segment increased 79 million 17 compared 2013 offshore revenue increased 99 million result increased activity customers partially offset drilling delays rigrelated issues ocean currents lasting longer previous years onshore revenue decreased 20 million due delays renewal contracts first half 2014 exit customers switched concentration regions us adjusted ebitda us services segment decreased 179 million 90 compared 2013 result higher compensation related costs 147 million repairs maintenance 53 million medical claims 42 million rent expense 09 million smaller increases several costs 07 million increases partially offset 79 million increase revenue tubular sales revenue tubular sales segment increased 15 million 06 compared 2013 primarily due increase customer external pipe sales 82 million offset decrease manufactured equipment sales international services us services segments 67 million adjusted ebitda tubular sales segment decreased 23 million 56 compared 2013 primarily result higher tool inspection costs 13 million rent expense 12 million repairs maintenance 09 million well various costs 04 million partially offset revenue increase 15 million year ended december 31 2013 compared year ended december 31 2012 international services revenue international services segment increased 91 million 19 compared 2012 primarily result increased demand services west africa middle far east canada experienced decreases latin america due termination certain contracts europe due uncertainty exportation limits israel adjusted ebitda international services segment decreased 196 million 89 compared 2012 primarily due increase bad debt expense 138 million due political economic turmoil venezuela filing bankruptcy customer brazil addition compensation related costs 119 million nonincome based taxes 29 million contributed decrease partially offset 91 million increase revenue us services revenue us services segment increased 109 million 25 compared 2012 due 323 million higher offshore revenue lafayette houma locations provide primarily offshore services increase partially offset decrease 198 million onshore office locations adjusted ebitda us services segment decreased 10 million 05 compared 2012 due increases equipment rental costs 45 million nonincome based taxes 26 million receipt 2012 49 million death benefit proceeds passing related party substantially offset 109 million increase revenue tubular sales revenue tubular sales segment increased 417 million 212 compared 2012 primarily due increase 220 million pipe sales deep water markets increase 212 million international us services segments manufacturing component partially offsetting increases lower fabrication revenues 16 million adjusted ebitda tubular sales segment increased 197 million 938 compared 2012 primarily result 417 million increase revenue partially offset 131 million increase cost pipe products resulting higher revenue addition higher compensation related costs 40 million increase equipment rentals supplies 32 million attributed increase liquidity capital resources liquidity december 31 2014 cash equivalents 4894 million debt 03 million primary sources liquidity date cash flows operations primary uses capital organic growth capital expenditures acquisitions continually monitor potential capital sources including equity debt financing order meet investment target liquidity requirements total capital expenditures estimated 150 million 2015 expect approximately 70 million purchase manufacture equipment remainder purchase construction facilities actual amount capital expenditures manufacture equipment may fluctuate based market conditions years ended december 31 2014 2013 2012 capital expenditures 1730 million 1845 million 1802 million respectively funded internally generated sources believe cash flows operations potential borrowings credit facility defined sufficient fund capital expenditure liquidity requirements 2015 paid dividends common stock 693 million aggregate 045 per common share addition 416 million distributions noncontrolling interests year ended december 31 2014 timing declaration amount payment dividends within discretion board directors depend upon many factors including financial condition earnings capital requirements operating subsidiaries covenants associated certain debt service obligations legal requirements regulatory constraints industry practice ability access capital markets factors deemed relevant board directors legal obligation pay dividend assurance able credit facility 1000 million revolving credit facility certain financial institutions including 200 million letters credit 100 million swingline loans matures august 2018 “credit facility” subject terms credit agreement ability increase commitments credit facility 1500 million december 31 2014 2013 outstanding indebtedness credit facility 66 million letters credit outstanding december 31 2014 1000 million 364day revolving credit facility matured august 2014 renewed replaced borrowings credit facility bear interest option either base rate adjusted eurodollar rate base rate loans credit facility bear interest rate equal higher prime rate published wall street journal b federal funds effective rate plus 050 c adjusted eurodollar rate plus 100 plus applicable margin ranging 050 150 subject adjustment based leverage ratio interest case payable quarterly baserate loans eurodollar loans credit facility bear interest adjusted eurodollar rate equal eurodollar rate interest period multiplied statutory reserves plus applicable margin ranging 150 250 interest payable end applicable interest periods eurodollar loans except interest period eurodollar loan longer three months interest paid end threemonth period unused portion credit facility subject commitment fee 0375 credit facility contains various covenants among things limit ability grant certain liens make certain loans investments enter mergers acquisition enter hedging transactions change lines business prepay certain indebtedness enter certain affiliate transactions incur additional indebtedness engage certain asset dispositions credit facility also contains financial covenants among things require us consolidated basis maintain ratio total consolidated funded debt adjusted ebitda defined credit facility 250 10 ii ratio ebitda interest expense less 30 10 december 31 2014 compliance financial covenants credit facility addition credit facility contains customary events default including among others failure make required payments failure comply certain covenants agreements breach representations covenants contained agreements default certain indebtedness certain events bankruptcy insolvency occurrence change control defined credit agreement cash flows operating investing financing activities cash flows provided used operations investing financing activities summarized thousands statements cash flows entities international operations use local currency functional currency exclude effects changes foreign currency exchange rates occur given year noncash changes result changes reflected certain accounts consolidated statements cash flows may reflect changes corresponding accounts consolidated balance sheets operating activities cash flow operating activities 3689 million year ended december 31 2014 compared 2774 million 2013 3448 million 2012 increase 2014 due primarily changes inventory accounts receivable accrued expenses partially offset increase tax expense resulting us operations becoming taxable subsequent ipo well lower deferred revenue decrease 2013 due primarily increase inventory decrease accrued expenses partially offset increase deferred revenue investing activities cash flow used investing activities 1736 million year ended december 31 2014 compared 1375 million 2013 1825 million 2012 investing activities 2014 primarily related capital expenditures property plant equipment reflected lower proceeds sale assets equipment 2013 cash flow used investing activities lower 2013 result 510 million proceeds sale assets equipment primarily including sale component tubular sales segment see note 3 audited consolidated financial statements financing activities cash flow used financing activities 1158 million year ended december 31 2014 compared cash provided financing activities 1102 million cash used financing activities 1072 million years ended december 31 2013 2012 respectively decrease 2014 primarily due activities 2013 included net proceeds 7115 million ipo partially offset 4640 million note repayments fww bv distributions stockholders 1054 million reoccur 2014 made dividend payments 693 million distributions noncontrolling interests 416 million mentioned financing activities 2013 included net proceeds approximately 7115 million ipo partially offset 4640 million payments related fww notes 1054 million stockholder distributions 2013 made 115 million dividend payments common stock 115 million distributions noncontrolling interests contractual obligations party various contractual obligations portion obligations reflected financial statements longterm debt obligations operating leases purchase obligations reflected balance sheet following summary contractual obligations december 31 2014 thousands 1 includes purchase commitments connectors pipe existing orders customers enter purchase commitments needed included table uncertain tax positions 03 million accrued december 31 2014 amounts timing payment uncertain see note 17 notes consolidated financial statements tax receivable agreement entered tax receivable agreement “tra” ficv mhi connection ipo tra generally provides payment us mhi 85 amount actual reductions payments us federal state local income tax franchise tax periods ipo reductions refer cash savings result tax basis increases resulting transfer ficv interests us connection conversion shares preferred stock shares common stock ii imputed interest deemed paid us result additional tax basis arising payments tra addition tra provides interest earned due date without extensions corresponding tax return date payment specified tra retain remaining 15 cash savings payment obligations tra obligations ficv term tra continues tax benefits utilized expired unless exercise right terminate tra elect terminate tra early would required make immediate payment equal present value anticipated future tax benefits subject tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits ficv interests mhi transferees termination date deemed exchanged termination date addition payments due tra similarly accelerated following certain mergers changes control certain circumstances may required make payments tra entered mhi circumstances payments associated actual cash savings recognize connection conversion preferred stock would reduce actual tax benefit us choose terminate tra early enter certain change control transactions may incur payment obligations prior time actually incur tax benefit circumstances would need pay amounts cash hand finance payments refrain triggering obligation though present intention triggering advance payment tra based current liquidity expected ability access debt equity financing believe would able make payment necessary payment could reduce cash hand borrowing availability however would also reduce amount cash available operate business fund capital expenditures paid dividends stockholders among things please see note 13 notes consolidated financial statements offbalance sheet arrangements december 31 2014 offbalance sheet arrangements critical accounting policies preparation consolidated financial statements conformity gaap requires management select appropriate accounting principles available apply principles consistently make reasonable estimates assumptions affect revenues associated costs well reported amounts assets liabilities related disclosure contingent assets liabilities certain accounting policies involve judgments uncertainties evaluate estimates assumptions regular basis base respective estimates historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates assumptions used preparation consolidated financial statements consider following policies critical understanding judgments involved uncertainties could impact results operations financial condition cash flows revenue recognition revenue recognized following criteria met 1 evidence arrangement exists 2 delivery acceptance customer occurred 3 price customer fixed determinable 4 collectability reasonably assured follows services revenue provide tubular services clients oil gas industry perform services either direct service purchase orders master service agreements service revenue recognized services performed rendered rental revenue design manufacture suite highly technical equipment products rent customers connection providing services including highend proprietary tubular handling equipment rent products either direct rental agreements customers rental agreements place revenue rental agreements recognized earned rental period customers contracted direct service purchase orders direct rental agreements accrual recorded unbilled accounts receivable revenue earned yet invoiced tubular sales revenue tubular sales recognized product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions postdelivery obligations regions customers right return due purchasing excess products deliverability limitations products remote locations likelihood return exists sale determination portion revenue reclassified unearned revenue time product returned return occurs income taxes liability method used determining income tax provisions current deferred tax liabilities assets recorded accordance enacted tax laws rates method amounts deferred tax liabilities assets end period determined using tax rate expected effect taxes actually paid recovered valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances considered made judgments estimates regarding estimated future taxable income ongoing prudent feasible tax planning strategies estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets historically changes valuation allowances caused major changes business cycle certain countries changes local country law ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions ficv operate approximately 60 countries many legal forms result subject jurisdiction numerous us foreign tax authorities well tax agreements treaties among governments operations different jurisdictions taxed various bases actual income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events amount timing character deductions permissible revenue recognition methods tax law sources character income tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact amount income taxes provide given year tax filings various periods subject audit tax authorities jurisdictions conduct business audits may result assessments additional taxes resolved authorities courts believe assessments may occasionally based erroneous even arbitrary interpretations local tax law resolution situations inevitably includes degree uncertainty accordingly provide taxes amounts believe ultimately result proceedings resulting change tax liability dependent numerous factors including among others amount nature additional taxes potentially asserted local tax authorities willingness local tax authorities negotiate fair settlement administrative process impartiality local courts number countries business potential changes tax paid one country either produce fail produce offsetting tax change countries experience estimates assumptions used provide future tax assessments proven appropriate however past experience guide potential exists tax resulting resolution current potential future tax controversies may differ materially amount accrued addition aforementioned assessments received various tax authorities also provide taxes uncertain tax positions formal assessments received determination liabilities requires use estimates assumptions regarding future events established adjust amounts information available future event occurs necessitating change reserves changes facts law judicial decisions regarding application existing law favorable audit outcome believe resolution tax matters material effect consolidated financial condition although resolution could material impact consolidated statements income particular period effective tax rate period resolution occurs allowance doubtful accounts evaluate whether client receivables collectible perform ongoing credit evaluations clients monitor collections payments order maintain provision estimated uncollectible accounts based historical collection experience current aging client receivables outstanding addition clients representations understanding economic environment clients operate based review establish adjust allowances specific clients accounts receivable whole allowance doubtful accounts december 31 2014 2013 25 million 136 million respectively recent accounting pronouncements see note 1 notes consolidated financial statements set forth part ii item 8 financial statements supplementary data heading recent accounting pronouncements included form 10k item 7aitem 7 managements discussion analysis financial condition results operation following discussion analysis financial condition results operations read conjunction consolidated financial statements related notes thereto included part ii item 8 financial statements supplementary data included form 10k section contains forwardlooking statements based managements current expectations estimates projections business operations involve risks uncertainties actual results may differ materially currently anticipated expressed forwardlooking statements various factors including described sections titled cautionary note regarding forwardlooking statements risk factors elsewhere form 10k overview business global provider highly engineered tubular services oil gas industry business 75 years provide services leading exploration production companies offshore onshore environments focus complex technically demanding wells conduct business three operating segments • international services currently provide services approximately 60 countries six continents customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies • us services service customers offshore areas us gulf mexico addition significant presence almost active onshore oil gas drilling regions us including permian basin bakken shale barnett shale eagle ford shale haynesville shale marcellus shale utica shale • tubular sales design manufacture distribute large od pipe connectors casing attachments sell large od pipe originally manufactured various pipe mills also provide specialized fabrication welding services support offshore projects including drilling production risers flowlines pipeline end terminations well longlength tubulars 300 feet length use caissons pilings segment also designs manufactures proprietary equipment use international us services segments generate revenue majority services revenues derived primarily personnel rates specially trained employees perform tubular services customers rental rates suite products equipment employees use perform tubular services addition customers typically reimburse us transportation costs incur connection transporting products equipment staging areas customers’ job sites contrast tubular sales revenues derived sales certain products including large od pipe connectors large od pipe manufactured third parties directly external customers outlook see oilfield services industry including tubular running services remaining pressure meaningful recovery commodity prices occurs current low commodity price environment led decreased capital spending customers thus lower demand services globally expect trend continue oil gas prices increase meaningfully current levels causing customers increase capital investment new exploration production projects cost reduction initiatives helped mitigate impact lower revenues operating earnings expect revenues operating earnings materially decrease 2016 offshore businesses us internationally experiencing activity declines full year realized lower prices due fewer financial resources allocated oil gas exploration development projects customers particularly deep ultradeep water markets services profitable extent decide preserve grow market share operating areas price reductions services may required onshore operations expected similarly impacted decreased drilling activity aggressive pricing competition particularly us onshore business strong financial position reduced cost structure allow us continue service clients expect material increase pricing activity near term tubular sales business driven specialized needs customers timing projects specifically gulf mexico revenues segment likely lower revenue 2015 due fewer projects proceeding schedule lower visibility forthcoming orders current commodity price environment overall strong financial position significant cash balance relative debt focused controlling costs improving capital efficiency anticipate cash flows operations sufficient fund capital expenditures dividends foreseeable future believe financial position gives company flexibility adapt challenging market believe wellpositioned take advantage opportunities grow market share make strategic acquisitions evaluate operations use number financial operational measures routinely analyze evaluate performance business including revenue adjusted ebitda adjusted ebitda margin safety performance revenue analyze revenue growth comparing actual monthly revenue internal projections month assess performance also assess incremental changes monthly revenue across operating segments identify potential areas improvement adjusted ebitda adjusted ebitda margin define adjusted ebitda income continuing operations net interest income expense depreciation amortization income tax benefit expense asset impairments gain loss sale assets foreign currency gain loss stockbased compensation noncash adjustments unusual charges credits adjusted ebitda margin reflects adjusted ebitda percentage revenues review adjusted ebitda adjusted ebitda margin consolidated basis segment basis use adjusted ebitda adjusted ebitda margin assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization items outside control management team income tax rates adjusted ebitda adjusted ebitda margin limitations analytical tools considered alternative net income operating income cash flow operating activities measure financial performance liquidity presented accordance generally accepted accounting principles us gaap following table presents reconciliation income continuing operations adjusted ebitda directly comparable gaap performance measure well adjusted ebitda margin periods presented thousands 1 represents charges incurred connection ipo primarily amounts attributable restructuring advance ipo reconciliation adjusted ebitda segment basis comparable measure calculated accordance gaap see “operating segment results” safety performance maintaining strong safety record critical component operational success many larger customers safety standards must satisfy perform services continually monitor safety culture use employee safety surveys trend analysis modify existing programs develop new programs according data obtained one way measure safety tracking total recordable incident rate “trir” lost time incident rate “ltir” reviewed monthly rolling twelvemonth basis trir measure rate recordable workplace injuries normalized stated basis 100 workers annual period factor derived multiplying number recordable injuries calendar year 200000 dividing value total manhours actually worked year ltir measures rate lost time recordable workplace injuries factor derived multiplying number lost time recordable injuries calendar year 200000 dividing value total manhours actually worked year lost time recordable injury work related injury renders employee unable work capacity beyond date injury recordable injury includes occupational death nonfatal occupational illness occupational injuries involve loss consciousness restriction work motion transfer another job medical treatment first aid table presents worldwide trir ltir years ended december 31 2015 2014 2013 results operations following table presents consolidated results periods presented thousands 1 consolidated products revenue includes small amount revenues attributable us services international services segments consolidated results operations year ended december 31 2015 compared year ended december 31 2014 revenues external customers excluding intersegment sales year ended december 31 2015 decreased 1780 million 154 9746 million 11526 million year ended december 31 2014 decrease primarily attributable lower revenues us services international segments revenues decreasing 1132 million 951 million respectively primarily result declining rig count well downward pricing pressures driven depressed oil gas prices additionally weather related delays gulf mexico decreased revenues partially offset increased revenues tubular sales segment 303 million result project related orders able meet urgent unscheduled customer requests products revenue segments discussed separately heading operating segment results cost revenues exclusive depreciation amortization cost revenues year ended december 31 2015 decreased 616 million 128 4184 million 4800 million year ended december 31 2014 decrease primarily attributable lower activity cost reduction efforts taken throughout year caused decrease compensationrelated costs 348 million product costs 174 million field supplies 75 million general administrative expenses general administrative ga expenses year ended december 31 2015 increased 33 million 12 2707 million 2674 million year ended december 31 2014 primarily result higher compensationrelated costs 115 million result continuing build optimize human resource infrastructure support public company professional fees 96 million due acquisition costs strategic initiatives optimize develop various corporate functions increases partially offset decreased stockbased compensation expense 122 million six months ended june 30 2014 included outofperiod adjustment 75 million corrected amortization expense related retirementeligible employees see note 1 notes consolidated financial statements additional detail addition lower taxes 40 million depreciation amortization depreciation amortization year ended december 31 2015 increased 189 million 210 1090 million 900 million year ended december 31 2014 increase primarily attributable timco acquisition 83 million well higher depreciable base resulting property equipment additions severance charges severance charges year ended december 31 2015 355 million result transition key executive nonexecutive member supervisory board workforce reductions base rationalization lease termination fees discussed note 20 notes consolidated financial statements affected following segments international services 15 million us services 328 million tubular sales 12 million foreign currency loss foreign currency loss year ended december 31 2015 decreased 107 million 64 million 170 million year ended december 31 2014 decrease primarily due foreign currency losses venezuela 130 million 2014 changes caused nonlocal currency working capital specifically norway brazil united kingdom eurozone income tax expense income tax expense year ended december 31 2015 decreased 381 million 505 373 million 754 million year ended december 31 2014 result decrease taxable income subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income operations income tax provision varies period year ended december 31 2014 compared year ended december 31 2013 revenues external customers excluding intersegment sales year ended december 31 2014 increased 749 million 70 11526 million 10777 million year ended december 31 2013 increase primarily attributable higher revenues segments notably international tubular segments revenues increasing 620 million 82 million respectively due increase demand expansion new existing locations revenue segments discussed separately heading operating segment results cost revenues exclusive depreciation amortization cost revenues year ended december 31 2014 increased 456 million 105 4800 million 4343 million year ended december 31 2013 increase primarily attributable compensation related costs 236 million repairs maintenance 69 million freight expense 65 million custom duty charges 33 million business travel expenses 28 million tool inspections 20 million rent expense 13 million partially offset smaller decreases several costs 08 million general administrative expenses ga expenses year ended december 31 2014 increased 426 million 190 2674 million 2248 million year ended december 31 2013 primarily due increase stock compensation costs 312 million included amount outofperiod adjustment 47 million related 2013 corrected amortization expense related retirementeligible employees additional detail see note 1 notes consolidated financial statements compensation related costs 141 million medical claims 35 million professional fees 35 million rent utilities expense 32 million insurance costs 19 million also contributed increase well smaller decreases several costs 08 million increase costs primarily attributable incurring public company costs full year 2014 compared four months 2013 increases partially offset decrease bad debt expense 156 million depreciation amortization depreciation amortization year ended december 31 2014 increased 120 million 153 900 million 781 million year ended december 31 2013 increase primarily attributable higher depreciable base resulting property equipment additions income year ended december 31 2014 decreased 27 million 288 67 million 95 million year ended december 31 2013 decrease primarily attributable lower royalties received 2014 foreign currency loss foreign currency loss year ended december 31 2014 increased 145 million 170 million 26 million year ended december 31 2013 increase foreign currency loss primarily due foreign currency losses venezuela 130 million addition unfavorable fluctuations 15 million foreign currency exchange rates income tax expense income tax expense year ended december 31 2014 increased 367 million 947 754 million 387 million year ended december 31 2013 primarily due us operations becoming taxable result restructuring concurrent ipo full year 2014 compared four months 2013 subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income operations income tax provision varies period income discontinued operations recognize income discontinued operations year ended december 31 2014 year ended december 31 2013 recognized gain 396 million upon sale component tubular sales segment see note 3 notes consolidated financial statements operating segment results following table presents revenues adjusted ebitda segment reconciliation adjusted ebitda net income continuing operations comparable gaap financial measure thousands 1 corporate represents amounts directly associated operating segment 2 adjusted ebitda supplemental nongaap financial measure used management external users financial statements industry analysts investors lenders rating agencies year ended december 31 2015 compared year ended december 31 2014 international services revenue international services segment decreased 959 million 178 compared 2014 primarily due depressed oil gas prices challenged economics current development projects africa asia pacific areas caused termination ongoing drilling campaigns delay commencement new projects well cancellations deferred work scopes africa region also affected poor results presalt exploratory wells decrease partially offset increase latin america revenues due higher activity started middle 2014 continued first half 2015 addition increase contract work among various customers adjusted ebitda international services segment decreased 490 million 212 compared 2014 primarily due 959 million decrease revenue partially offset lower expenses due reduced activity costcutting measures us services revenue us services segment decreased 1111 million 240 compared 2014 primarily due depressed oil gas prices onshore services revenue decreased 715 million result lower activity declining rig counts pricing discounts offshore business saw smaller decrease revenue 396 million result operational rig delays due operational downhole issues weather related delays caused unusually strong ocean loop currents gulf mexico rig cancellations latter half year coupled downward pricing pressure adjusted ebitda us services segment decreased 867 million 480 compared 2014 result lower revenues activity pricing concessions onshore offshore business 731 million well higher corporate costs 133 million primarily due increased professional fees acquisition costs partially offset declining cost revenues operating expenses us services operational footprint reduced due decreased activity addition savings effect cost rationalization actions taken throughout year tubular sales revenue tubular sales segment increased 17 million 07 compared 2014 primarily contracted orders addition able meet urgent unscheduled customer requests products adjusted ebitda tubular sales segment increased 26 million 69 compared 2014 primarily due higher tubular sales improved productivity 80 million partially offset lower volumes manufacturing operations 54 million year ended december 31 2014 compared year ended december 31 2013 international services revenue international services segment increased 602 million 126 compared 2013 primarily result extended renewed contracts west africa expansion product placement europe increasing market share asia pacific middle east partially offset decrease latin america due termination certain contracts late 2013 adjusted ebitda international services segment increased 318 million 160 compared 2013 primarily due revenue increase 602 million 164 million decrease bad debt expense partially offset increases compensation related costs 179 million freight transportation costs 50 million product costs 46 million equipment rentals 35 million custom duty charges 34 million business travel expenses 31 million rent warehouse expense 25 million crew expenses 18 million employee benefits insurance 09 million well smaller increases various costs 21 million us services revenue us services segment increased 79 million 17 compared 2013 offshore revenue increased 99 million result increased activity customers partially offset drilling delays rigrelated issues ocean currents lasting longer previous years onshore revenue decreased 20 million due delays renewal contracts first half 2014 exit customers switched concentration regions us adjusted ebitda us services segment decreased 179 million 90 compared 2013 result higher compensation related costs 147 million repairs maintenance 53 million medical claims 42 million rent expense 09 million smaller increases several costs 07 million increases partially offset 79 million increase revenue tubular sales revenue tubular sales segment increased 15 million 06 compared 2013 primarily due increase customer external pipe sales 82 million offset decrease manufactured equipment sales international services us services segments 67 million adjusted ebitda tubular sales segment decreased 23 million 56 compared 2013 primarily result higher tool inspection costs 13 million rent expense 12 million repairs maintenance 09 million well various costs 04 million partially offset revenue increase 15 million liquidity capital resources liquidity december 31 2015 cash equivalents 6024 million debt 73 million primary sources liquidity date cash flows operations primary uses capital organic growth capital expenditures acquisitions continually monitor potential capital sources including equity debt financing order meet investment target liquidity requirements total capital expenditures estimated 750 million 2016 expect approximately 250 million purchase manufacture equipment 500 million property plant equipment inclusive purchase construction facilities actual amount capital expenditures manufacture equipment may fluctuate based market conditions years ended december 31 2015 2014 2013 capital expenditures 997 million 1730 million 1845 million respectively funded internally generated sources believe cash hand cash flows operations potential borrowings credit facility defined sufficient fund capital expenditure liquidity requirements 2016 paid dividends common stock 928 million aggregate 060 per common share addition 435 million distributions noncontrolling interests year ended december 31 2015 timing declaration amount payment dividends within discretion board managing directors subject approval board supervisory directors depend upon many factors including financial condition earnings capital requirements covenants associated certain debt service obligations legal requirements regulatory constraints industry practice ability access capital markets factors deemed relevant board managing directors board supervisory directors legal obligation pay dividend assurance able timing distributions noncontrolling interests pursuant limited partnership agreement franks international cv tax arising membership interests ficv credit facility 1000 million revolving credit facility certain financial institutions including 200 million letters credit 100 million swingline loans matures august 2018 “credit facility” subject terms credit agreement ability increase commitments credit facility 1500 million december 31 2015 2014 outstanding indebtedness credit facility 47 million letters credit outstanding december 31 2015 borrowings credit facility bear interest option either base rate adjusted eurodollar rate base rate loans credit facility bear interest rate equal higher prime rate published wall street journal b federal funds effective rate plus 050 c adjusted eurodollar rate plus 100 plus applicable margin ranging 050 150 subject adjustment based leverage ratio interest case payable quarterly baserate loans eurodollar loans credit facility bear interest adjusted eurodollar rate equal eurodollar rate interest period multiplied statutory reserves plus applicable margin ranging 150 250 interest payable end applicable interest periods eurodollar loans except interest period eurodollar loan longer three months interest paid end threemonth period unused portion credit facility subject commitment fee ranging 0250 0375 based certain leverage ratios credit facility contains various covenants among things limit ability grant certain liens make certain loans investments enter mergers acquisitions enter hedging transactions change lines business prepay certain indebtedness enter certain affiliate transactions incur additional indebtedness engage certain asset dispositions credit facility also contains financial covenants among things require us consolidated basis maintain ratio total consolidated funded debt adjusted ebitda defined credit agreement 250 10 ii ratio ebitda interest expense less 30 10 december 31 2015 compliance financial covenants credit facility addition credit facility contains customary events default including among others failure make required payments failure comply certain covenants agreements breach representations covenants contained agreements default certain indebtedness certain events bankruptcy insolvency occurrence change control defined credit agreement cash flows operating investing financing activities cash flows provided used operations investing financing activities summarized thousands statements cash flows entities international operations use local currency functional currency exclude effects changes foreign currency exchange rates occur given year noncash changes result changes reflected certain accounts consolidated statements cash flows may reflect changes corresponding accounts consolidated balance sheets operating activities cash flow operating activities 4278 million year ended december 31 2015 compared 3689 million 2014 2774 million 2013 increase 2015 due primarily working capital changes primarily accounts receivable inventory overall increase partially offset decrease net income changes primarily result lower activity due depressed oil gas prices increase 2014 due primarily changes inventory accounts receivable accrued expenses partially offset increase tax expense resulting us operations becoming taxable subsequent ipo well lower deferred revenue investing activities cash flow used investing activities 1747 million year ended december 31 2015 compared 1736 million 2014 1375 million 2013 investing activities 2015 primarily related timco acquisition partially offset lower capital expenditures property plant equipment comparison 2014 result reduction need additional equipment machinery service customers due declining rig activity caused lower oil prices investing activities 2014 primarily related capital expenditures property plant equipment reflected lower proceeds sale assets equipment 2013 financing activities cash flow used financing activities 1412 million year ended december 31 2015 compared 1158 million cash provided financing activities 1102 million years ended december 31 2014 2013 respectively increase 2015 primarily due higher dividend payments 235 million decrease 2014 primarily due activities 2013 included net proceeds 7115 million ipo partially offset 4640 million note repayments fww bv distributions stockholders 1054 million reoccur 2014 made dividend payments 693 million distributions noncontrolling interests 416 million contractual obligations party various contractual obligations portion obligations reflected financial statements longterm debt obligations operating leases purchase obligations reflected balance sheet following summary contractual obligations december 31 2015 thousands 1 includes purchase commitments connectors pipe existing orders customers enter purchase commitments needed included table uncertain tax positions 01 million accrued december 31 2015 amounts timing payment uncertain see note 19 notes consolidated financial statements tax receivable agreement entered tax receivable agreement “tra” ficv mhi connection ipo tra generally provides payment us mhi 85 amount actual reductions payments us federal state local income tax franchise tax periods ipo reductions refer cash savings result tax basis increases resulting transfer ficv interests us connection conversion shares preferred stock shares common stock ii imputed interest deemed paid us result additional tax basis arising payments tra addition tra provides interest earned due date without extensions corresponding tax return date payment specified tra retain remaining 15 cash savings payment obligations tra obligations ficv term tra continues tax benefits utilized expired unless exercise right terminate tra elect terminate tra early would required make immediate payment equal present value anticipated future tax benefits subject tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits ficv interests mhi transferees termination date deemed exchanged termination date addition payments due tra similarly accelerated following certain mergers changes control certain circumstances may required make payments tra entered mhi circumstances payments associated actual cash savings recognize connection conversion preferred stock would reduce actual tax benefit us choose terminate tra early enter certain change control transactions may incur payment obligations prior time actually incur tax benefit circumstances would need pay amounts cash hand finance payments refrain triggering obligation though present intention triggering advance payment tra based current liquidity expected ability access debt equity financing believe would able make payment necessary payment could reduce cash hand borrowing availability however would also reduce amount cash available operate business fund capital expenditures paid dividends stockholders among things please see note 15 notes consolidated financial statements offbalance sheet arrangements december 31 2015 offbalance sheet arrangements critical accounting policies preparation consolidated financial statements conformity gaap requires management select appropriate accounting principles available apply principles consistently make reasonable estimates assumptions affect revenues associated costs well reported amounts assets liabilities related disclosure contingent assets liabilities certain accounting policies involve judgments uncertainties evaluate estimates assumptions regular basis base respective estimates historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates assumptions used preparation consolidated financial statements consider following policies critical understanding judgments involved uncertainties could impact results operations financial condition cash flows revenue recognition revenue recognized following criteria met 1 evidence arrangement exists 2 delivery acceptance customer occurred 3 price customer fixed determinable 4 collectability reasonably assured follows services revenue provide tubular services clients oil gas industry perform services either direct service purchase orders master service agreements service revenue recognized services performed rendered rental revenue design manufacture suite highly technical equipment products rent customers connection providing services including highend proprietary tubular handling equipment rent products either direct rental agreements customers rental agreements place revenue rental agreements recognized earned rental period customers contracted direct service purchase orders direct rental agreements accrual recorded unbilled accounts receivable revenue earned yet invoiced tubular sales revenue tubular sales recognized product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions postdelivery obligations regions customers right return due purchasing excess products deliverability limitations products remote locations likelihood return exists sale determination portion revenue reclassified unearned revenue time product returned return period expired income taxes liability method used determining income tax provisions current deferred tax liabilities assets recorded accordance enacted tax laws rates method amounts deferred tax liabilities assets end period determined using tax rate expected effect taxes actually paid recovered valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances considered made judgments estimates regarding estimated future taxable income ongoing prudent feasible tax planning strategies estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets historically changes valuation allowances caused major changes business cycle certain countries changes local country law ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions ficv operate approximately 60 countries many legal forms result subject jurisdiction numerous us foreign tax authorities well tax agreements treaties among governments operations different jurisdictions taxed various bases actual income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events amount timing character deductions permissible revenue recognition methods tax law sources character income tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact amount income taxes provide given year tax filings various periods subject audit tax authorities jurisdictions conduct business audits may result assessments additional taxes resolved authorities courts believe assessments may occasionally based erroneous even arbitrary interpretations local tax law resolution situations inevitably includes degree uncertainty accordingly provide taxes amounts believe ultimately result proceedings resulting change tax liability dependent numerous factors including among others amount nature additional taxes potentially asserted local tax authorities willingness local tax authorities negotiate fair settlement administrative process impartiality local courts number countries business potential changes tax paid one country either produce fail produce offsetting tax change countries experience estimates assumptions used provide future tax assessments proven appropriate however past experience guide potential exists tax resulting resolution current potential future tax controversies may differ materially amount accrued addition aforementioned assessments received various tax authorities also provide taxes uncertain tax positions formal assessments received determination liabilities requires use estimates assumptions regarding future events established adjust amounts information available future event occurs necessitating change reserves changes facts law judicial decisions regarding application existing law favorable audit outcome believe resolution tax matters material effect consolidated financial condition although resolution could material impact consolidated statements income particular period effective tax rate period resolution occurs allowance doubtful accounts evaluate whether client receivables collectible perform ongoing credit evaluations clients monitor collections payments order maintain provision estimated uncollectible accounts based historical collection experience current aging client receivables outstanding addition clients representations understanding economic environment clients operate based review establish adjust allowances specific clients accounts receivable whole allowance doubtful accounts december 31 2015 2014 25 million year respectively recent accounting pronouncements see note 1 notes consolidated financial statements set forth part ii item 8 financial statements supplementary data heading recent accounting pronouncements included form 10k item 7aitem 7 managements discussion analysis financial condition results operation following discussion analysis financial condition results operations read conjunction consolidated financial statements related notes thereto included part ii item 8 financial statements supplementary data included form 10k section contains forwardlooking statements based managements current expectations estimates projections business operations involve risks uncertainties actual results may differ materially currently anticipated expressed forwardlooking statements various factors including described sections titled cautionary note regarding forwardlooking statements risk factors elsewhere form 10k overview business global provider highly engineered tubular services tubular fabrication specialty well construction well intervention solutions oil gas industry business 75 years provide services leading exploration production companies offshore onshore environments focus complex technically demanding wells conduct business four operating segments • international services currently provide services approximately 60 countries six continents customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies • us services service customers offshore areas us gulf mexico addition presence active onshore oil gas drilling regions us including permian basin eagle ford shale haynesville shale marcellus shale dj basin utica shale • tubular sales design manufacture distribute large od pipe connectors casing attachments sell large od pipe originally manufactured various pipe mills also provide specialized fabrication welding services support offshore projects including drilling production risers flowlines pipeline end terminations well longlength tubulars 300 feet length use caissons pilings segment also designs manufactures proprietary equipment use international us services segments • blackhawk provide well construction well intervention rental equipment services products addition cementing tool expertise us mexican gulf mexico onshore us select international locations generate revenue majority services revenues derived primarily personnel rates specially trained employees perform tubular well construction services customers rental rates suite products equipment employees use perform services addition customers typically reimburse us transportation costs incur connection transporting products equipment staging areas customers’ job sites contrast tubular sales revenues derived sales certain products including large od pipe connectors large od pipe manufactured third parties directly external customers acquisition blackhawk resulted new segment us blackhawk revenues derived well construction well intervention rental equipment services products revenues historically split evenly sold rented products equipment certain rented products service element personnel overseeing operation equipment outlook expect see improvement oil field services industry 2017 global capital spending oil natural gas exploration production likely increase modestly response higher commodity prices however much anticipated increase spending likely associated onshore projects contribute lower revenue margins company offshore projects material increases activity deep ultradeep offshore markets expected improvement oil natural gas prices seen basins may continue deteriorate made efforts reduce impact lower activity levels reducing costs additional actions may necessary continue see decreased investment global offshore projects offshore businesses us internationally continue see delays cancellations customers reduce spending elect reallocate financial resources onshore projects delays cancellations prevalent deep ultradeep water markets services profitable areas new projects sanctioned seen increased competition awarded tenders often secured prices historical levels efforts grow market share underrepresented offshore shelf market expected support revenues unlikely fully offset declines deep ultradeep water onshore operations expected see sequential improvement particularly us onshore market drilling activity risen meaningfully recent months increase demand services combined leaner cost structure expected result higher revenues improved profitability business coming year tubular sales business driven specialized needs customers timing projects specifically gulf mexico due steep declines activity gulf mexico low visibility forthcoming orders services anticipate revenues associated segment trend lower additional projects sanctioned commence operations blackhawk product service lines face similar challenges offshore market tubular services business blackhawk revenues primarily generated offshore us gulf mexico risk activity levels decrease however benefit full year operations blackhawk 2017 likely help drive total revenues sequentially higher overall market outlook mixed onshore begins lead recovery offshore market lags prices remain economic breakeven levels many projects remain strong position financially significant cash balance relative debt evaluate operations use number financial operational measures routinely analyze evaluate performance business including revenue adjusted ebitda adjusted ebitda margin safety performance revenue analyze revenue growth comparing actual monthly revenue internal projections month assess performance also assess incremental changes monthly revenue across operating segments identify potential areas improvement adjusted ebitda adjusted ebitda margin define adjusted ebitda net income loss net interest income expense depreciation amortization income tax benefit expense asset impairments gain loss sale assets foreign currency gain loss equitybased compensation unrealized gain loss noncash adjustments charges credits adjusted ebitda margin reflects adjusted ebitda percentage revenues review adjusted ebitda adjusted ebitda margin consolidated basis segment basis use adjusted ebitda adjusted ebitda margin assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization items outside control management team income tax foreign currency exchange rates charges outside normal course business adjusted ebitda adjusted ebitda margin limitations analytical tools considered alternative net income loss operating income loss cash flow operating activities measure financial performance presented accordance generally accepted accounting principles us gaap following table presents reconciliation net income loss adjusted ebitda directly comparable gaap performance measure well adjusted ebitda margin periods presented thousands 1 comprised equitybased compensation expense 2016 15978 2015 26318 2014 38368 merger acquisition costs 2016 13784 2015 none 2014 none severance charges 2016 46406 2015 35484 2014 none changes value contingent consideration 2016 none 2015 1532 2014 none unrealized realized gains losses 2016 110 2015 none 2014 none fcpa matters 2016 6397 2015 1446 2014 1137 safety performance maintaining strong safety record critical component operational success many customers safety standards must satisfy perform services result continually monitor improve safety performance evaluation safety observations job customer surveys safety data addition continually develop new safety programs based industry trends internal data primary measure safety performance tracking total recordable incident rate trir measure rate recordable workplace injuries normalized basis 100 full time employees annual period factor derived multiplying number recordable injuries calendar year 200000 dividing value total hours actually worked year recordable injury includes occupational death nonfatal occupational illness occupational injuries involve loss consciousness lost time injuries restriction work motion cases transfer another job medical treatment cases first aid table presents worldwide trir years ended december 31 2016 2015 2014 results operations following table presents consolidated results periods presented thousands 1 consolidated products revenue includes small amount revenues attributable us services international services blackhawk segments consolidated results operations year ended december 31 2016 compared year ended december 31 2015 revenues external customers excluding intersegment sales year ended december 31 2016 decreased 4871 million 500 4875 million 9746 million year ended december 31 2015 decrease primarily attributable lower revenues majority segments due declining activity depressed oil gas prices resulted reduced rig count downward pricing pressures rig cancellations delays well deferred work scopes international us services regions revenues tubular sales decreased due lower international demand decreased deep water fabrication revenue decreased revenues partially offset revenues blackhawk segment 100 million resulting acquisition november 2016 see note 3 acquisitions notes consolidated financial statements additional information blackhawk acquisition revenues segments discussed separately heading operating segment results cost revenues exclusive depreciation amortization cost revenues year ended december 31 2016 decreased 1580 million 378 2604 million 4184 million year ended december 31 2015 decrease due lower activity volumes offset cost actions taken throughout 2016 also incurred additional costs 89 million related blackhawk acquisition november 2016 general administrative expenses general administrative ga expenses year ended december 31 2016 decreased 419 million 155 2288 million 2707 million year ended december 31 2015 excluding bad debt expense 113 million related primarily collectability receivables venezuela see customer credit risk part ii item 7a bankrupt customer nigeria general administrative expenses year ended december 31 2016 decreased 532 million 197 primarily result declining activity pricing pressures offset internal cost initiatives included workforce reductions lease terminations also equitybased compensation expense decreased 103 million ipo grants retirementeligible employees two year service requirement completed third quarter 2015 decreased costs partially offset increase professional fees included costs related ongoing global corporate initiatives investigation mentioned note 20 commitments contingencies notes unaudited condensed consolidated financial statements depreciation amortization depreciation amortization year ended december 31 2016 increased 53 million 48 1142 million 1090 million year ended december 31 2015 increase primarily attributable timco blackhawk acquisitions well higher depreciable base resulting property equipment additions severance charges severance charges year ended december 31 2016 464 million continued take steps adjust workforce meet depressed demand industry addition retirement fixed assets 299 million see note 19 severance charges notes consolidated financial statements affected following segments international services 122 million us services 337 million tubular sales 06 million merger acquisition costs merger acquisition costs year ended december 31 2016 138 million result blackhawk acquisition mentioned note 3 acquisitions notes consolidated financial statements foreign currency loss foreign currency loss year ended december 31 2016 increased 45 million 108 million 64 million year ended december 31 2015 increase primarily due devaluation nigerian naira income tax expense benefit income tax expense benefit year ended december 31 2016 decreased 630 million 1687 256 million 373 million year ended december 31 2015 primarily result decrease taxable income change jurisdictional mix subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income operations income tax provision varies period year ended december 31 2015 compared year ended december 31 2014 revenues external customers excluding intersegment sales year ended december 31 2015 decreased 1780 million 154 9746 million 11526 million year ended december 31 2014 decrease primarily attributable lower revenues us services international segments revenues decreasing 1132 million 951 million respectively primarily result declining rig count well downward pricing pressures driven depressed oil gas prices additionally weather related delays gulf mexico decreased revenues partially offset increased revenues tubular sales segment 303 million result project related orders able meet urgent unscheduled customer requests products revenue segments discussed separately heading operating segment results cost revenues exclusive depreciation amortization cost revenues year ended december 31 2015 decreased 616 million 128 4184 million 4800 million year ended december 31 2014 decrease primarily attributable lower activity cost reduction efforts taken throughout year caused decrease compensationrelated costs 348 million product costs 174 million field supplies 75 million general administrative expenses ga expenses year ended december 31 2015 increased 33 million 12 2707 million 2674 million year ended december 31 2014 primarily result higher compensationrelated costs 115 million result continuing build optimize human resource infrastructure support public company professional fees 96 million due acquisition costs strategic initiatives optimize develop various corporate functions increases partially offset decreased stockbased compensation expense 122 million six months ended june 30 2014 included outofperiod adjustment 75 million corrected amortization expense related retirementeligible employees see note 1 notes consolidated financial statements additional detail addition lower taxes 40 million depreciation amortization depreciation amortization year ended december 31 2015 increased 189 million 210 1090 million 900 million year ended december 31 2014 increase primarily attributable timco acquisition 83 million well higher depreciable base resulting property equipment additions severance charges severance charges year ended december 31 2015 355 million result transition key executive nonexecutive member supervisory board workforce reductions base rationalization lease termination fees affected following segments international services 15 million us services 328 million tubular sales 12 million foreign currency loss foreign currency loss year ended december 31 2015 decreased 107 million 64 million 170 million year ended december 31 2014 decrease primarily due foreign currency losses venezuela 130 million 2014 changes caused nonlocal currency working capital specifically norway brazil united kingdom eurozone income tax expense income tax expense year ended december 31 2015 decreased 381 million 505 373 million 754 million year ended december 31 2014 result decrease taxable income subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income operations income tax provision varies period operating segment results following table presents revenues adjusted ebitda segment thousands 1 adjusted ebitda supplemental nongaap financial measure used management external users financial statements industry analysts investors lenders rating agencies reconciliation adjusted ebitda see adjusted ebitda adjusted ebitda margin year ended december 31 2016 compared year ended december 31 2015 international services revenue international services segment decreased 2056 million 464 compared 2015 primarily due depressed oil gas prices challenged economics current development projects caused termination ongoing drilling campaigns delay commencement new projects well cancellations deferred work scopes adjusted ebitda international services segment decreased 1492 million 818 compared 2015 primarily due 2056 million decrease revenue 113 million bad debt expense related collectability receivables venezuela see customer credit risk part ii item 7a nigeria partially offset lower expenses due reduced activity costcutting measures us services revenue us services segment decreased 1799 million 511 compared 2015 primarily due depressed oil gas prices onshore services revenue decreased 513 million result lower activity declining rig counts pricing discounts offshore business saw decrease revenue 1259 million result overall lower activity weaknesses seen gulf mexico due rig cancellations delays coupled downward pricing pressures adjusted ebitda us services segment decreased 1070 million 1120 compared 2015 primarily due higher pricing concessions lower activity 946 million higher corporate costs 124 million primarily due increased professional fees attributable ongoing global corporate initiatives tubular sales revenue tubular sales segment decreased 1350 million 558 compared 2015 primarily result lower international demand decreased deep water fabrication revenue adjusted ebitda tubular sales segment decreased 393 million 958 compared 2015 negatively impacted fixed costs associated manufacturing division decreased revenues blackhawk segment comprised solely acquisition november 1 2016 revenues adjusted ebitda segment 100 million 10 million respectively year ended december 31 2016 see note 3 acquisitions notes consolidated financial statements additional information blackhawk acquisition year ended december 31 2015 compared year ended december 31 2014 international services revenue international services segment decreased 959 million 178 compared 2014 primarily due depressed oil gas prices challenged economics current development projects africa asia pacific areas caused termination ongoing drilling campaigns delay commencement new projects well cancellations deferred work scopes africa region also affected poor results presalt exploratory wells decrease partially offset increase latin america revenues due higher activity started middle 2014 continued first half 2015 addition increase contract work among various customers adjusted ebitda international services segment decreased 490 million 212 compared 2014 primarily due 959 million decrease revenue partially offset lower expenses due reduced activity costcutting measures us services revenue us services segment decreased 1111 million 240 compared 2014 primarily due depressed oil gas prices onshore services revenue decreased 715 million result lower activity declining rig counts pricing discounts offshore business saw smaller decrease revenue 396 million result operational rig delays due operational downhole issues weather related delays caused unusually strong ocean loop currents gulf mexico rig cancellations latter half year coupled downward pricing pressure adjusted ebitda us services segment decreased 862 million 474 compared 2014 result lower revenues activity pricing concessions onshore offshore business 731 million well higher corporate costs 133 million primarily due increased professional fees acquisition costs partially offset declining cost revenues operating expenses us services operational footprint reduced due decreased activity addition savings effect cost rationalization actions taken throughout year tubular sales revenue tubular sales segment increased 17 million 07 compared 2014 primarily contracted orders addition able meet urgent unscheduled customer requests products adjusted ebitda tubular sales segment increased 26 million 69 compared 2014 primarily due higher tubular sales improved productivity 80 million partially offset lower volumes manufacturing operations 54 million blackhawk segment comprised solely acquisition november 1 2016 results operations years ended december 31 2015 2014 see note 3 notes consolidated financial statements additional information blackhawk acquisition liquidity capital resources liquidity december 31 2016 cash equivalents 3195 million debt 03 million primary sources liquidity date cash flows operations primary uses capital organic growth capital expenditures acquisitions continually monitor potential capital sources including equity debt financing order meet investment target liquidity requirements total capital expenditures estimated 400 million 2017 expect approximately 220 million purchase manufacture equipment 180 million property plant equipment inclusive purchase construction facilities actual amount capital expenditures manufacture equipment may fluctuate based market conditions years ended december 31 2016 2015 2014 capital expenditures 421 million 997 million 1730 million respectively funded internally generated sources believe cash hand cash flows operations potential borrowings credit facility defined sufficient fund capital expenditure liquidity requirements next twelve months paid dividends common stock 790 million aggregate 045 per common share addition 80 million distributions noncontrolling interests year ended december 31 2016 timing declaration amount payment dividends within discretion board managing directors subject approval board supervisory directors depend upon many factors including financial condition earnings capital requirements covenants associated certain debt service obligations legal requirements regulatory constraints industry practice ability access capital markets factors deemed relevant board managing directors board supervisory directors legal obligation pay dividend assurance able timing distributions noncontrolling interests pursuant limited partnership agreement franks international cv tax arising membership interests ficv august 19 2016 received notice mosing holdings exercising right exchange 52976000 common shares following securities 52976000 preferred shares ii 52976000 units ficv issued 52976000 common shares mosing holdings august 26 2016 result remaining issued outstanding preferred shares mosing family beneficially owns approximately 173752764 common shares addition obligation make payments noncontrolling interest pursuant limited partnership agreement franks international cv ceased effective date exchange credit facility 1000 million revolving credit facility certain financial institutions including 200 million letters credit 100 million swingline loans matures august 2018 “credit facility” subject terms credit facility ability increase commitments 1500 million december 31 2016 2015 outstanding indebtedness credit facility 37 million 47 million letters credit outstanding december 31 2016 2015 respectively december 31 2016 ability borrow credit facility reduced approximately 50 million 100 million result decreased adjusted ebitda borrowing capacity credit facility could reduced eliminated depending future adjusted ebitda seek multiquarter covenant waiver sometime first quarter 2017 borrowings credit facility bear interest option either base rate adjusted eurodollar rate base rate loans credit facility bear interest rate equal higher prime rate published wall street journal ii federal funds effective rate plus 050 iii adjusted eurodollar rate plus 100 plus applicable margin ranging 050 150 subject adjustment based leverage ratio interest case payable quarterly baserate loans eurodollar loans credit facility bear interest adjusted eurodollar rate equal eurodollar rate interest period multiplied statutory reserves plus applicable margin ranging 150 250 interest payable end applicable interest periods eurodollar loans except interest period eurodollar loan longer three months interest paid end threemonth period unused portion credit facility subject commitment fee ranging 0250 0375 based certain leverage ratios credit facility contains various covenants among things limit ability grant certain liens make certain loans investments enter mergers acquisitions enter hedging transactions change lines business prepay certain indebtedness enter certain affiliate transactions incur additional indebtedness engage certain asset dispositions credit facility also contains financial covenants among things require us consolidated basis maintain ratio total consolidated funded debt adjusted ebitda defined credit facility 250 10 ii ratio ebitda interest expense less 30 10 december 31 2016 compliance financial covenants credit facility addition credit facility contains customary events default including among others failure make required payments failure comply certain covenants agreements breach representations covenants contained agreements default certain indebtedness certain events bankruptcy insolvency occurrence change control cash flows operating investing financing activities cash flows provided used operations investing financing activities summarized thousands statements cash flows entities international operations use local currency functional currency exclude effects changes foreign currency exchange rates occur given year noncash changes result changes reflected certain accounts consolidated statements cash flows may reflect changes corresponding accounts consolidated balance sheets operating activities cash flow operating activities 108 million year ended december 31 2016 compared 4278 million 2015 3689 million 2014 decrease 2016 due primarily net loss deferred tax benefit addition working capital changes primarily accounts receivable accrued expense liabilities increase 2015 due primarily working capital changes primarily accounts receivable inventory overall increase partially offset decrease net income changes years primarily result lower activity due depressed oil gas prices investing activities cash flow used investing activities 1789 million year ended december 31 2016 compared 1747 million 2015 1736 million 2014 investing activities 2016 primarily related blackhawk acquisition offset lower capital expenditures property plant equipment comparison 2015 also received 111 million proceeds sale investments executive deferred compensation plan used make payments former key employees investing activities 2015 primarily related timco acquisition partially offset lower capital expenditures property plant equipment comparison 2014 2016 2015 capital expenditures lower compared prior years result reduction need additional equipment machinery service customers due declining rig activity caused lower oil prices financing activities cash flow used financing activities 968 million 1412 million 1158 million years ended december 31 2016 2015 2014 respectively decrease 2016 primarily due lower dividend payments 138 million result reduction dividends per share amount lower noncontrolling interest payments 355 million due less estimable income tax associated partnership decreases partially offset higher repayments borrowings 64 million increase 2015 primarily due higher dividend payments 235 million contractual obligations party various contractual obligations portion obligations reflected financial statements longterm debt obligations operating leases purchase obligations reflected balance sheet following summary contractual obligations december 31 2016 thousands 1 includes purchase commitments connectors pipe existing orders customers enter purchase commitments needed included table tax receivable agreement tra liability uncertain tax positions 1246 million 02 million respectively accrued december 31 2016 amounts timing payment uncertain see note 14 tra liability note 18 uncertain tax positions notes consolidated financial statements tax receivable agreement entered tra ficv mosing holdings connection ipo tra generally provides payment us mosing holdings 85 amount actual reductions payments us federal state local income tax franchise tax periods ipo reductions refer cash savings result tax basis increases resulting transfer ficv interests us connection conversion shares preferred stock shares common stock august 26 2016 ii imputed interest deemed paid us result additional tax basis arising payments tra addition tra provides interest earned due date without extensions corresponding tax return date payment specified tra retain remaining 15 cash savings payment obligations tra obligations ficv term tra continues tax benefits utilized expired unless exercise right terminate tra elect execute sole right terminate tra early would required make immediate payment equal present value anticipated future tax benefits subject tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits ficv interests mosing holdings transferees termination date deemed exchanged termination date addition payments due tra similarly accelerated following certain mergers changes control certain circumstances may required make payments tra entered mosing holdings circumstances payments associated actual cash savings recognize connection conversion preferred stock would reduce actual tax benefit us elect exercise sole right terminate tra early enter certain change control transactions may incur payment obligations prior time actually incur tax benefit circumstances would need pay amounts cash hand finance payments refrain triggering obligation though present intention triggering advance payment tra based current liquidity expected ability access debt equity financing believe would able make payment necessary payment could reduce cash hand borrowing availability however would also reduce amount cash available operate business fund capital expenditures paid dividends stockholders among things please see note 14 related party transactions notes consolidated financial statements offbalance sheet arrangements december 31 2016 offbalance sheet arrangements exception operating leases critical accounting policies preparation consolidated financial statements conformity gaap requires management select appropriate accounting principles available apply principles consistently make reasonable estimates assumptions affect revenues associated costs well reported amounts assets liabilities related disclosure contingent assets liabilities certain accounting policies involve judgments uncertainties evaluate estimates assumptions regular basis base respective estimates historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates assumptions used preparation consolidated financial statements consider following policies critical understanding judgments involved uncertainties could impact results operations financial condition cash flows revenue recognition revenue recognized following criteria met 1 evidence arrangement exists 2 delivery acceptance customer occurred 3 price customer fixed determinable 4 collectability reasonably assured follows services revenue provide tubular well construction services clients oil gas industry perform services either direct service purchase orders master service agreements service revenue recognized services performed rendered • international service hours billed per man hour per day similar basis • us services billed offshore per day similar basis ii land per man hour project basis • blackhawk services billed primarily per day basis domestic international rental revenue design manufacture suite highly technical equipment products rent customers connection providing services including highend proprietary tubular handling well construction equipment rent products either direct rental agreements customers rental agreements place revenue rental agreements recognized earned rental period • international equipment rentals billed per month similar basis • us equipment rentals billed offshore per day similar basis ii land completion job project basis • blackhawk services billed offshore land per day basis minimum days requirements ii international negotiated contracts primarily based monthly rentals customers contracted direct service purchase orders direct rental agreements accrual recorded unbilled accounts receivable revenue earned yet invoiced tubular sales blackhawk revenue tubular blackhawk sales recognized product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions postdelivery obligations tubular sales well construction customers requested store pipe connectors products purchased us facilities considered whether revenue recognized sales “bill hold” guidance provided sec staff however based upon assessment performed revenue recognition transactions totaling 181 million 576 million deferred december 31 2016 2015 respectively delivery significant risks ownership passed customer income taxes liability method used determining income tax provisions current deferred tax liabilities assets recorded accordance enacted tax laws rates method amounts deferred tax liabilities assets end period determined using tax rate expected effect taxes actually paid recovered valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances considered made judgments estimates regarding estimated future taxable income ongoing prudent feasible tax planning strategies estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets historically changes valuation allowances caused major changes business cycle certain countries changes local country law ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions ficv operate approximately 60 countries many legal forms result subject jurisdiction numerous us foreign tax authorities well tax agreements treaties among governments operations different jurisdictions taxed various bases actual income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events amount timing character deductions permissible revenue recognition methods tax law sources character income tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact amount income taxes provide given year tax filings various periods subject audit tax authorities jurisdictions conduct business audits may result assessments additional taxes resolved authorities courts believe assessments may occasionally based erroneous even arbitrary interpretations local tax law resolution situations inevitably includes degree uncertainty accordingly provide taxes amounts believe ultimately result proceedings resulting change tax liability dependent numerous factors including among others amount nature additional taxes potentially asserted local tax authorities willingness local tax authorities negotiate fair settlement administrative process impartiality local courts number countries business potential changes tax paid one country either produce fail produce offsetting tax change countries experience estimates assumptions used provide future tax assessments proven appropriate however past experience guide potential exists tax resulting resolution current potential future tax controversies may differ materially amount accrued addition aforementioned assessments received various tax authorities also provide taxes uncertain tax positions formal assessments received determination liabilities requires use estimates assumptions regarding future events established adjust amounts information available future event occurs necessitating change reserves changes facts law judicial decisions regarding application existing law favorable audit outcome believe resolution tax matters material effect consolidated financial condition although resolution could material impact consolidated statements operations particular period effective tax rate period resolution occurs allowance doubtful accounts evaluate whether client receivables collectible perform ongoing credit evaluations clients monitor collections payments order maintain provision estimated uncollectible accounts based historical collection experience current aging client receivables outstanding addition clients representations understanding economic environment clients operate based review establish adjust allowances specific clients accounts receivable whole due primarily uncertainty collection national oil company customer venezuela bankrupt customer nigeria recorded allowance 118 million 2016 allowance doubtful accounts december 31 2016 2015 143 million 25 million respectively recent accounting pronouncements see note 1 notes consolidated financial statements set forth part ii item 8 financial statements supplementary data heading recent accounting pronouncements included form 10k item 7aitem 7 managements discussion analysis financial condition results operation following discussion analysis financial condition results operations read conjunction consolidated financial statements related notes thereto included part ii item 8 financial statements supplementary data included form 10k section contains forwardlooking statements based managements current expectations estimates projections business operations involve risks uncertainties actual results may differ materially currently anticipated expressed forwardlooking statements various factors including described sections titled cautionary note regarding forwardlooking statements part item 1a risk factors elsewhere form 10k overview business global provider highly engineered tubular services tubular fabrication specialty well construction well intervention solutions oil gas industry business 75 years provide services leading exploration production companies offshore onshore environments focus complex technically demanding wells conduct business four operating segments • international services currently provide services approximately 50 countries six continents customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies oilfield services companies • us services service customers offshore areas us gulf mexico addition presence active onshore oil gas drilling regions us including permian basin eagle ford shale haynesville shale marcellus shale niobrara shale utica shale • tubular sales design manufacture distribute large od pipe connectors casing attachments sell large od pipe originally manufactured various pipe mills also provide specialized fabrication welding services support offshore projects including drilling production risers flowlines pipeline end terminations well longlength tubulars 300 feet length use caissons pilings segment also designs manufactures proprietary equipment use international us services segments • blackhawk provide well construction well intervention services products addition cementing tool expertise us mexican gulf mexico onshore us select international locations blackhawk’s customer base consists primarily major independent oil gas companies well oilfield services companies generate revenue majority services revenues derived primarily personnel rates specially trained employees perform tubular well construction services customers rates charge suite products equipment employees use perform services addition customers typically reimburse us transportation costs incur connection transporting products equipment staging areas customers’ job sites contrast tubular sales revenues derived sales certain products including large od pipe connectors large od pipe manufactured third parties directly external customers blackhawk revenues derived well construction well intervention services products revenues historically split evenly service revenue product revenue outlook 2018 expect see increased customer spending globally oil natural gas exploration production response improvement commodity prices recent months however much anticipated increase spending likely continue associated onshore projects contribute lower revenue margins company offshore projects activity deep ultradeep offshore markets projected see significant improvement 2018 pricing newly sanctioned projects estimated approximately inline recent trends response expanding products services historically weighted us market international markets reducing costs operational efficiency gains prioritizing projects improve market share profitability offshore businesses us internationally continue trend toward less predictable shorterterm projects expect see share gains certain markets competitive pricing likely persist could result low growth revenue margins onshore operations expected see sequential improvement particularly us onshore market drilling activity levels remain strong increase demand services combined leaner cost structure expected result higher revenues improved profitability business 2018 tubular sales segment primarily driven specialized needs customers timing projects specifically gulf mexico expect benefit increased sales select international markets predicted supplement modest activity growth outlook offshore gulf mexico blackhawk product service lines expected see meaningful improvement 2018 us onshore products services likely improve higher activity levels expansion product services markets outside us lead sequential increases revenue segment however increases could risk activity levels us gulf mexico materially decrease represents primary market revenue generation overall market outlook modestly improved onshore markets us expected continue grow expecting higher activity international share growth blackhawk tubular sales segments however could face continued headwinds global offshore market nearterm customers look commodity prices remain current levels extended period time prior allocating substantial financial resources projects remain strong position financially significant cash balance relative debt evaluate operations use number financial operational measures routinely analyze evaluate performance business including revenue adjusted ebitda adjusted ebitda margin safety performance revenue analyze revenue growth comparing actual monthly revenue internal projections month assess performance also assess incremental changes monthly revenue across operating segments identify potential areas improvement adjusted ebitda adjusted ebitda margin define adjusted ebitda net income loss interest income net depreciation amortization income tax benefit expense asset impairments gain loss disposal assets foreign currency gain loss equitybased compensation unrealized realized gain loss effects tra noncash adjustments charges credits adjusted ebitda margin reflects adjusted ebitda percentage revenues review adjusted ebitda adjusted ebitda margin consolidated basis segment basis use adjusted ebitda adjusted ebitda margin assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization items outside control management team income tax foreign currency exchange rates charges outside normal course business adjusted ebitda adjusted ebitda margin limitations analytical tools considered alternative net income loss operating income loss cash flow operating activities measure financial performance presented accordance generally accepted accounting principles us gaap following table presents reconciliation adjusted ebitda adjusted ebitda margin net income loss periods presented thousands 1 please see note 13 related party transactions notes consolidated financial statements discussion 2 comprised equitybased compensation expense 2017 13862 2016 15978 2015 26318 mergers acquisition expense 2017 459 2016 13784 2015 none severance charges 2017 75354 2016 46406 2015 35484 changes value contingent consideration 2017 none 2016 none 2015 1532 unrealized realized losses 2017 2791 2016 110 2015 none investigationrelated matters 2017 6143 2016 6397 2015 1446 adjustments 2017 487 2016 none 2015 none safety performance safety primary core value maintaining strong safety record critical component operational success many customers safety standards must satisfy perform services result continually monitor improve safety performance evaluation safety observations job customer surveys safety data primary measure safety performance tracking total recordable incident rate trir measure rate recordable workplace injuries normalized basis 100 full time employees annual period factor derived multiplying number recordable injuries calendar year 200000 dividing value total hours actually worked year recordable injury includes occupational death nonfatal occupational illness occupational injuries involve loss consciousness lost time injuries restriction work motion cases transfer another job medical treatment cases first aid table presents worldwide trir years ended december 31 2017 2016 2015 results operations following table presents consolidated results periods presented thousands 1 year ended december 31 2016 45336 11579 reclassified general administrative expenses services products respectively 80369 15830 respectively year ended december 31 2015 see note 1 basis presentation significant accounting policies notes consolidated financial statements 2 please see note 13 related party transactions notes consolidated financial statements discussion consolidated results operations year ended december 31 2017 compared year ended december 31 2016 revenues external customers excluding intersegment sales year ended december 31 2017 decreased 327 million 67 4548 million 4875 million year ended december 31 2016 decrease primarily attributable lower revenues majority segments due declining activity depressed oil gas prices resulted reduced rig count offshore markets downward pricing pressures rig cancellations delays well deferred work scopes international offshore us services regions tubular sales decreased due lower international demand decreased deepwater fabrication revenue decreased revenues partially offset increase revenues blackhawk segment 610 million resulting acquisition blackhawk november 2016 improved us onshore revenues see note 3 acquisition divestitures notes consolidated financial statements additional information blackhawk acquisition revenues segments discussed separately heading operating segment results cost revenues exclusive depreciation amortization cost revenues year ended december 31 2017 decreased 68 million 22 3104 million 3173 million year ended december 31 2016 decrease primarily due lower cost product sales tubular sales segment driven lower activity volumes cost cutting initiatives partially offset 266 million additional cost revenues related blackhawk acquisition acquired november 2016 general administrative expenses general administrative ga expenses year ended december 31 2017 decreased 82 million 48 1637 million 1719 million year ended december 31 2016 primarily due bad debt expense related venezuelan receivables 2016 reduction compensation benefit related expenses onetime property tax credits earned 2017 partially offset higher expenses increased ga expense related blackhawk acquisition expense related writeoff venezuelan receivables 2017 included severance charges depreciation amortization depreciation amortization year ended december 31 2017 increased 79 million 69 1221 million 1142 million year ended december 31 2016 increase primarily attributable blackhawk acquisition partially offset lower depreciable base result asset retirements fourth quarter 2016 severance charges severance charges year ended december 31 2017 increased 289 million 624 754 million primarily due impairments pipe connectors inventory 512 million accounts receivable write offs 150 million related venezuela nigeria angola fourth quarter 2017 management decided significantly reduce footprint nigeria angola exiting certain bases temporarily abandoning investment venezuela partially offset lower severance costs 138 million lower fixed asset retirements abandonments 234 million compared prior year see note 19 severance charges notes consolidated financial statements additional information foreign currency gain loss foreign currency gain loss year ended december 31 2017 changed 129 million gain 21 million loss 108 million year ended december 31 2016 change primarily due devaluation nigerian naira 2016 income tax expense benefit income tax expense benefit year ended december 31 2017 changed 986 million expense 729 million benefit 256 million year ended december 31 2016 effective income tax rate 843 141 years ended december 31 2017 december 31 2016 respectively change 2016 2017 primarily recording valuation allowances net deferred tax assets reversal deferred taxes associated derecognition tra excluding onetime items effective income tax rate income tax expense benefit 2017 would 574 497 million respectively change 2016 2017 excluding onetime items primarily due changes jurisdictional mix earnings subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income operations income tax provision varies period december 22 2017 tax cuts jobs act “tax act” enacted law among significant changes made act reduction federal income tax rate 35 21 well imposition onetime repatriation tax deemed repatriated earnings certain foreign subsidiaries us gaap requires impact tax act recognized period law enacted change tax rate company recorded 238 million reduction value deferred tax assets liabilities reduction value fully offset corresponding change valuation allowance net effect total tax expense zero due legal structure company expect incur material liability respect repatriation tax provisional amounts company’s best estimates based current interpretation tax act may change company receives additional clarification tax act guidance implementation part 2017 income tax compliance process year ended december 31 2016 compared year ended december 31 2015 revenues external customers excluding intersegment sales year ended december 31 2016 decreased 4871 million 500 4875 million 9746 million year ended december 31 2015 decrease primarily attributable lower revenues majority segments due declining activity depressed oil gas prices resulted reduced rig count downward pricing pressures rig cancellations delays well deferred work scopes international us services regions revenues tubular sales decreased due lower international demand decreased deep water fabrication revenue decreased revenues partially offset revenues blackhawk segment 100 million resulting acquisition november 2016 see note 3 acquisition divestitures notes consolidated financial statements additional information blackhawk acquisition revenues segments discussed separately heading operating segment results cost revenues exclusive depreciation amortization cost revenues year ended december 31 2016 decreased 1973 million 383 3173 million 5146 million year ended december 31 2015 decrease due lower activity volumes offset cost actions taken throughout 2016 also incurred additional costs 89 million related blackhawk acquisition november 2016 general administrative expenses general administrative expenses year ended december 31 2016 decreased 26 million 15 1719 million 1745 million year ended december 31 2015 excluding bad debt expense 113 million related primarily collectability receivables venezuela bankrupt customer nigeria ga expenses year ended december 31 2016 decreased 139 million 80 primarily result declining activity pricing pressures offset internal cost initiatives included workforce reductions lease terminations also equitybased compensation expense decreased 103 million ipo grants retirementeligible employees two year service requirement completed third quarter 2015 decreased costs partially offset increase professional fees included costs related ongoing global corporate initiatives investigation mentioned note 18 commitments contingencies notes consolidated financial statements depreciation amortization depreciation amortization year ended december 31 2016 increased 53 million 48 1142 million 1090 million year ended december 31 2015 increase primarily attributable acquisitions timco services inc blackhawk well higher depreciable base resulting property equipment additions severance charges severance charges year ended december 31 2016 464 million continued take steps adjust workforce meet depressed demand industry addition retirement fixed assets 299 million mergers acquisition expense mergers acquisition expense year ended december 31 2016 138 million result blackhawk acquisition mentioned note 3 acquisition divestitures notes consolidated financial statements foreign currency loss foreign currency loss year ended december 31 2016 increased 45 million 108 million 64 million year ended december 31 2015 increase primarily due devaluation nigerian naira income tax expense benefit income tax expense benefit year ended december 31 2016 decreased 630 million 1687 256 million 373 million year ended december 31 2015 primarily result decrease taxable income change jurisdictional mix subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income operations income tax provision varies period operating segment results following table presents revenues adjusted ebitda segment thousands 1 adjusted ebitda supplemental nongaap financial measure used management external users financial statements industry analysts investors lenders rating agencies reconciliation adjusted ebitda see adjusted ebitda adjusted ebitda margin 2 amounts previously reported corporate 478 96 2016 2015 respectively reclassified us services conform current presentation year ended december 31 2017 compared year ended december 31 2016 international services revenue international services segment decreased 305 million 128 compared 2016 primarily due lower offshore rig counts globally increased pricing pressure new contracts revenue declines africa europe asia pacific regions mostly attributable major customers reducing amount work regions partially offset attempts expand countries drilling activity historically smaller presence increases canada middle east due higher activity key customers adjusted ebitda international services segment decreased 25 million 74 compared 2016 primarily due decrease revenue partially offset lower expenses due reduced activity costcutting measures us services revenue us services segment decreased 340 million 223 compared 2016 primarily due decrease offshore services revenue 514 million result overall lower activity weaknesses seen gulf mexico due rig cancellations delays coupled downward pricing pressures partially offset increase onshore services revenue 174 million result improved activity due increased oil prices led higher rig counts favorable pricing adjusted ebitda us services segment decreased 283 million 2574 compared 2016 primarily due higher pricing concessions increased asset related expenses higher labor costs support increased land activity well higher corporate costs attributable ongoing global corporate initiatives tubular sales revenue tubular sales segment decreased 293 million 335 compared 2016 primarily result lower deepwater activity gulf mexico adjusted ebitda tubular sales segment increased 14 million 827 compared 2016 due cost cutting measures lower product costs offset increase freight costs associated project work blackhawk segment comprised solely assets acquired november 1 2016 revenues adjusted ebitda segment 710 million 111 million respectively year ended december 31 2017 compared 100 million 10 million respectively two months ended december 31 2016 see note 3 acquisition divestitures notes consolidated financial statements additional information blackhawk acquisition year ended december 31 2016 compared year ended december 31 2015 international services revenue international services segment decreased 2049 million 463 compared 2015 primarily due depressed oil gas prices challenged economics current development projects caused termination ongoing drilling campaigns delay commencement new projects well cancellations deferred work scopes adjusted ebitda international services segment decreased 1492 million 818 compared 2015 primarily due decrease revenue 113 million bad debt expense related collectability receivables venezuela nigeria partially offset lower expenses due reduced activity costcutting measures us services revenue us services segment decreased 1736 million 532 compared 2015 primarily due depressed oil gas prices onshore services revenue decreased 513 million result lower activity declining rig counts pricing discounts offshore business saw decrease revenue 1259 million result overall lower activity weaknesses seen gulf mexico due rig cancellations delays coupled downward pricing pressures adjusted ebitda us services segment decreased 1065 million 1115 compared 2015 primarily due higher pricing concessions lower activity 946 million higher corporate costs 119 million primarily due increased professional fees attributable ongoing global corporate initiatives tubular sales revenue tubular sales segment decreased 1185 million 575 compared 2015 primarily result lower international demand decreased deepwater fabrication revenue adjusted ebitda tubular sales segment decreased 393 million 958 compared 2015 negatively impacted fixed costs associated manufacturing division decreased revenues blackhawk segment comprised solely assets acquired november 1 2016 revenues adjusted ebitda segment 100 million 10 million respectively year ended december 31 2016 see note 3 acquisition divestitures notes consolidated financial statements additional information blackhawk acquisition liquidity capital resources liquidity december 31 2017 cash equivalents shortterm investments 2940 million debt 47 million primary sources liquidity date cash flows operations primary uses capital organic growth capital expenditures acquisitions continually monitor potential capital sources including equity debt financing order meet investment target liquidity requirements total capital expenditures estimated 480 million 2018 expect approximately 380 million purchase manufacture equipment 100 million property plant equipment inclusive purchase construction facilities actual amount capital expenditures manufacture equipment may fluctuate based market conditions years ended december 31 2017 2016 2015 capital expenditures 219 million 421 million 997 million respectively funded internally generated sources believe cash hand cash flows operations sufficient fund capital expenditure liquidity requirements next twelve months paid dividends common stock 502 million aggregate 0225 per common share year ended december 31 2017 timing declaration amount payment dividends within discretion board managing directors subject approval board supervisory directors depend upon many factors including financial condition earnings capital requirements covenants associated certain debt service obligations legal requirements regulatory constraints industry practice ability access capital markets factors deemed relevant board managing directors board supervisory directors legal obligation pay dividend assurance able october 27 2017 board managing directors company approval board supervisory directors company approved plan suspend companys quarterly dividend order preserve capital various purposes including invest growth opportunities august 19 2016 received notice mosing holdings exercising right exchange 52976000 common shares following securities 52976000 preferred shares ii 52976000 units ficv issued 52976000 common shares mosing holdings august 26 2016 result remaining issued outstanding preferred shares mosing family beneficially owns approximately 68 common shares addition obligation make payments noncontrolling interest pursuant limited partnership agreement franks international cv ceased effective date exchange credit facility 1000 million revolving credit facility certain financial institutions including 200 million letters credit 100 million swingline loans matures august 2018 “credit facility” subject terms credit facility ability increase commitments 1500 million december 31 2017 2016 outstanding indebtedness credit facility december 31 2017 2016 28 million 37 million respectively letters credit outstanding december 31 2017 ability borrow credit facility reduced approximately 143 million less letters credit outstanding credit facility result decreased adjusted ebitda borrowing capacity credit facility could reduced eliminated depending future adjusted ebitda occur overall liquidity would diminished borrowings credit facility bear interest option either base rate adjusted eurodollar rate base rate loans credit facility bear interest rate equal higher prime rate published wall street journal ii federal funds effective rate plus 050 iii adjusted eurodollar rate plus 100 plus applicable margin ranging 050 150 subject adjustment based leverage ratio interest case payable quarterly baserate loans eurodollar loans credit facility bear interest adjusted eurodollar rate equal eurodollar rate interest period multiplied statutory reserves plus applicable margin ranging 150 250 interest payable end applicable interest periods eurodollar loans except interest period eurodollar loan longer three months interest paid end threemonth period unused portion credit facility subject commitment fee ranging 0250 0375 based certain leverage ratios credit facility contains various covenants among things limit ability grant certain liens make certain loans investments enter mergers acquisitions enter hedging transactions change lines business prepay certain indebtedness enter certain affiliate transactions incur additional indebtedness engage certain asset dispositions credit facility also contains financial covenants among things require us consolidated basis maintain ratio total consolidated funded debt adjusted ebitda defined credit facility 25 10 ii ratio ebitda interest expense less 30 10 addition credit facility contains customary events default including among others failure make required payments failure comply certain covenants agreements breach representations covenants contained agreements default certain indebtedness certain events bankruptcy insolvency occurrence change control april 28 2017 company obtained limited waiver revolving credit agreement dated august 14 2013 among ficv borrower amegy bank national association administrative agent capital one national association syndication agent lenders party thereto credit agreement leverage ratio interest coverage ratio fiscal quarters ending march 31 2017 june 30 2017 “waiver” order default first quarter 2017 company agreed comply following conditions period effective date waiver delivery compliance certificate respect fiscal quarter ending september 30 2017 maintain less 2500 million liquidity ii abide certain restrictions regarding issuance senior unsecured debt iii pay interest commitment fees based highest “applicable margin” defined credit agreement level connection waiver company paid waiver fee lender executed waiver equal five basis points respective lender’s commitment credit agreement december 31 2017 compliance covenants included credit agreement citibank credit facility 2016 entered threeyear credit facility citibank na uae branch amount 60 million issuance standby letters credit guarantees credit facility also allows open ended guarantees outstanding amounts credit facility bear interest 125 per annum amounts outstanding one year amounts outstanding one year bear interest 15 per annum december 31 2017 2016 26 million 22 million respectively letters credit outstanding insurance notes payable 2017 entered three notes finance annual insurance premiums totaling 51 million notes bear interest annual rate 23 final maturity date october 2018 december 31 2017 total outstanding balance 47 million cash flows operating investing financing activities cash flows provided used operations investing financing activities summarized thousands statements cash flows entities international operations use local currency functional currency exclude effects changes foreign currency exchange rates occur given year noncash changes result changes reflected certain accounts consolidated statements cash flows may reflect changes corresponding accounts consolidated balance sheets operating activities cash flow provided used operating activities 248 million year ended december 31 2017 compared 108 million 2016 increase cash provided operating activities 2017 356 million compared 2016 primarily result positive changes working capital longterm assets liabilities 398 million partially offset increase net loss 34 million increase working capital 2017 due tax refunds 297 million decrease cash flow provided used operating activities year ended december 31 2016 4386 million compared year ended december 31 2015 primarily due net loss result lower activity due depressed oil gas prices impact deferred taxes working capital changes primarily related accounts receivable accrued expense liabilities investing activities cash flow used investing activities 777 million year ended december 31 2017 compared 1789 million year ended december 31 2016 decrease 1012 million period primarily related acquisition blackhawk 2016 1504 million cash used addition lower purchases property plant equipment 202 million higher proceeds sale assets 102 million also contributed decrease changes partially offset net increase purchase investments 798 million primarily related net purchases investments original maturities greater three months less twelve months cash flow used investing activities 1789 million year ended december 31 2016 compared 1747 million year ended december 31 2015 increase 42 million period primarily related increase cash used acquisitions 718 million offset lower purchases property plant equipment 576 million increase 111 million proceeds sale investments related executive deferred compensation plan used make payments former key employees financing activities cash flow used financing activities 525 million year ended december 31 2017 compared 968 million year ended december 31 2016 decrease 443 million period primarily related lower dividends paid common stock 289 million absence payment noncontrolling interest 80 million lower repayments borrowings 65 million cash flow used financing activities 968 million year ended december 31 2016 compared 1412 million year ended december 31 2015 decrease 444 million period primarily due lower dividend payments 138 million result reduction dividends per share amount lower noncontrolling interest payments 355 million decreases partially offset higher repayments borrowings 64 million contractual obligations party various contractual obligations portion obligations reflected financial statements longterm debt obligations operating leases purchase obligations reflected balance sheet following summary contractual obligations december 31 2017 thousands 1 includes purchase commitments primarily related connectors pipe inventory enter purchase commitments needed included table uncertain tax positions 02 million tax receivable agreement entered tra ficv mosing holdings connection ipo tra generally provides payment us mosing holdings 85 amount actual reductions payments us federal state local income tax franchise tax periods ipo reductions refer cash savings result tax basis increases resulting transfer ficv interests us connection conversion shares preferred stock shares common stock august 26 2016 ii imputed interest deemed paid us result additional tax basis arising payments tra addition tra provides interest earned due date without extensions corresponding tax return date payment specified tra retain remaining 15 cash savings payment obligations tra obligations ficv term tra continues tax benefits utilized expired unless exercise right terminate tra elect execute sole right terminate tra early would required make immediate payment equal present value anticipated future tax benefits subject tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits ficv interests mosing holdings transferees termination date deemed exchanged termination date addition payments due tra similarly accelerated following certain mergers changes control certain circumstances may required make payments tra entered mosing holdings circumstances payments associated actual cash savings recognize connection conversion preferred stock would reduce actual tax benefit us elect exercise sole right terminate tra early enter certain change control transactions may incur payment obligations prior time actually incur tax benefit circumstances would need pay amounts cash hand finance payments refrain triggering obligation though present intention triggering advance payment tra based current liquidity expected ability access debt equity financing believe would able make payment necessary payment could reduce cash hand borrowing availability however would also reduce amount cash available operate business fund capital expenditures paid dividends stockholders among things please see note 13 related party transactions notes consolidated financial statements offbalance sheet arrangements december 31 2017 offbalance sheet arrangements exception operating leases purchase obligations critical accounting policies preparation consolidated financial statements conformity gaap requires management select appropriate accounting principles available apply principles consistently make reasonable estimates assumptions affect revenues associated costs well reported amounts assets liabilities related disclosure contingent assets liabilities certain accounting policies involve judgments uncertainties evaluate estimates assumptions regular basis base respective estimates historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates assumptions used preparation consolidated financial statements consider following policies critical understanding judgments involved uncertainties could impact results operations financial condition cash flows revenue recognition revenue recognized following criteria met 1 evidence arrangement exists 2 delivery acceptance customer occurred 3 price customer fixed determinable 4 collectability reasonably assured follows services revenue provide tubular well construction services clients oil gas industry perform services either direct service purchase orders master service agreements service revenue recognized services performed rendered • international service hours billed per man hour per day similar basis • us services billed offshore per day similar basis ii land per man hour project basis • blackhawk services billed primarily per day basis domestic international design manufacture suite highly technical equipment products use connection providing services customers including highend proprietary tubular handling well construction equipment substantially equipment service element personnel operating equipment provide equipment either direct agreements customers agreements place revenue equipment agreements recognized earned relevant period • international equipment billed per month similar basis • us equipment billed offshore per day similar basis ii land completion job project basis • blackhawk services billed offshore land per day basis minimum days requirements ii international negotiated contracts primarily based monthly rates customers contracted direct service purchase orders direct agreements accrual recorded unbilled accounts receivable revenue earned yet invoiced tubular sales blackhawk product revenue tubular blackhawk product sales recognized product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions postdelivery obligations tubular sales well construction customers requested store pipe connectors products purchased us facilities considered whether revenue recognized sales “bill hold” guidance provided sec staff however based upon assessment performed revenue recognition transactions totaling 47 million 181 million deferred december 31 2017 2016 respectively delivery significant risks ownership passed customer income taxes liability method used determining income tax provisions current deferred tax liabilities assets recorded accordance enacted tax laws rates method amounts deferred tax liabilities assets end period determined using tax rate expected effect taxes actually paid recovered valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances made judgments estimates regarding future taxable income ongoing prudent feasible tax planning strategies estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets historically changes valuation allowances caused major changes business cycle certain countries changes local country law ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions ficv operate approximately 50 countries many legal forms result subject jurisdiction numerous us foreign tax authorities well tax agreements treaties among governments operations different jurisdictions taxed various bases actual income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events amount timing character deductions permissible revenue recognition methods tax law sources character income tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact amount income taxes provide given year tax filings open tax periods subject audit tax authorities audits may result assessments additional taxes resolved either tax authorities courts assessments may occasionally based erroneous even arbitrary interpretations local tax law resolution situations inevitably includes degree uncertainty accordingly provide taxes amounts believe ultimately result proceedings resulting change tax liability dependent numerous factors including among others amount nature additional taxes potentially asserted local tax authorities willingness local tax authorities negotiate fair settlement administrative process impartiality local courts number countries business potential changes tax paid one country either produce fail produce offsetting tax change countries experience estimates assumptions used provide future tax assessments proven appropriate however past experience guide potential exists tax resulting resolution current potential future tax controversies may differ materially amount accrued addition aforementioned assessments received various tax authorities also provide taxes uncertain tax positions formal assessments received determination liabilities requires use estimates assumptions regarding future events established adjust amounts information available event occurs necessitating change reserves changes facts law judicial decisions regarding application existing law favorable audit outcome believe resolution tax matters material effect consolidated financial condition although resolution could material impact consolidated statements operations particular period effective tax rate period resolution occurs goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount quantitative impairment test performed quantitative goodwill impairment test used identify existence impairment amount impairment loss test compares fair value reporting unit carrying amount including goodwill amount impairment goodwill measured excess carrying value fair value fourth quarter 2017 elected change timing annual goodwill impairment testing december 31 october 31 us services international services tubular sales manufacturing reporting units accounting change considered preferable allows additional time complete annual goodwill impairment test better aligns planning process synchronizes testing date reporting units october 31 blackhawk reporting units annual impairment testing date change result adjustments previously issued financial statements goodwill impairment recorded years ended december 31 2017 2016 2015 goodwill allocated operating segments follows us services approximately 162 million tubular sales approximately 24 million blackhawk approximately 1924 million inputs used determination fair value generally level 3 inputs allowance doubtful accounts evaluate whether client receivables collectible perform ongoing credit evaluations clients monitor collections payments order maintain provision estimated uncollectible accounts based historical collection experience current aging client receivables outstanding addition clients representations understanding economic environment clients operate based review establish adjust allowances specific clients accounts receivable whole experienced payment delays certain customers nigeria angola venezuela 2016 recorded allowance 96 million trade accounts receivable national oil company customer venezuela due uncertainty collection fourth quarter 2017 management decided significantly reduce footprint nigeria angola exiting certain bases temporarily abandoning investment venezuela primarily consisting accounts receivable believe diminish ability collect amounts owed result wrote previously reserved trade accounts receivable 96 million addition wrote trade accounts receivables 150 million nigeria angola venezuela included financial statement line item severance charges year ended december 31 2017 allowance doubtful accounts december 31 2017 2016 48 million 143 million respectively recent accounting pronouncements see note 1 basis presentation significant accounting policies notes consolidated financial statements set forth part ii item 8 financial statements supplementary data heading recent accounting pronouncements included form 10k item 7aitem 7 management’s discussion analysis financial condition results operation following discussion analysis financial condition results operations read conjunction consolidated financial statements related notes thereto included part ii item 8 “financial statements supplementary data” included form 10k section contains forwardlooking statements based management’s current expectations estimates projections business operations involve risks uncertainties actual results may differ materially currently anticipated expressed forwardlooking statements various factors including described sections titled “cautionary note regarding forwardlooking statements” part item 1a “risk factors” elsewhere form 10k overview business global provider highly engineered tubular services tubular fabrication specialty well construction well intervention solutions oil gas industry business 80 years provide services products leading exploration production companies offshore onshore environments focus complex technically demanding wells conduct business four operating segments • international services currently provide tubular services approximately 50 countries six continents customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies oilfield services companies • us services provide tubular services active onshore oil gas drilling regions us including permian basin eagle ford shale haynesville shale marcellusutica shale niobrara shale woodford shale green river basin uintah basin well us gulf mexico • tubular sales design manufacture distribute large od pipe connectors casing attachments sell large od pipe originally manufactured various pipe mills also provide specialized fabrication welding services support offshore projects including drilling production risers flowlines pipeline end terminations well longlength tubulars 300 feet length use caissons pilings segment also designs manufactures proprietary equipment use international us services segments • blackhawk provide well construction well intervention services products addition cementing tool expertise us mexican gulf mexico onshore us select international locations blackhawk’s customer base consists primarily major independent oil gas companies well oilfield services companies generate revenue majority services revenues derived primarily providing tubular services involves handling installation multiple joints pipe establish cased wellbore installation smaller diameter pipe inside cased wellbore contrast product revenues derived sales certain products including large od pipe connectors large od pipe manufactured third parties directly external customers blackhawk revenues derived well construction well intervention services products revenues historically split evenly service revenue product revenue addition customers typically reimburse us transportation costs incur connection transporting products equipment staging areas customers’ job sites outlook despite recent headwinds 2019 expect see increased customer spending globally oil natural gas exploration production response continued stabilization commodity prices much anticipated increase spending continue associated us onshore projects although anticipate rate spending outside us onshore increase 2019 activity deep ultradeep offshore markets expected see modest improvement 2019 pricing newly sanctioned projects estimated marginally higher recent trends many international offshore shelf markets seeing increased activity operators increasingly seeing improved economics current commodity prices response continue efforts expand products services historically weighted us market international markets reducing costs operational efficiency gains prioritizing projects improve market share profitability offshore businesses us internationally expect trend last years less predictable shorterterm projects stabilize reverse slightly 2019 2018 made significant market share gains globally expect continue maintain gains certain markets competitive pricing likely persist could result lower growth revenue margins onshore operations expected see sequential improvement particularly us onshore market drilling activity levels remain robust increase demand services combined leaner cost structure expected result higher revenues improved profitability business 2019 tubular sales segment primarily driven specialized needs customers timing projects specifically gulf mexico expect benefit increased sales select international markets predicted supplement flat slightly outlook offshore gulf mexico blackhawk segment product service lines expected see meaningful improvement 2019 us onshore products services likely improve significantly expansion new physical presence new basins previously underrepresented growth blackhawk international offshore markets expected see significant sequential improvement new equipment built certified deployed markets however us gulf mexico market expects see continued headwinds operator activity expected flat slightly overall market outlook continues modestly improved onshore markets us stable expecting higher activity select international offshore markets expect continue deploy new tools services select international markets historical underrepresentation blackhawk tubular sales segments remain strong position financially significant cash balance relative debt evaluate operations use number financial operational measures routinely analyze evaluate performance business including revenue adjusted ebitda adjusted ebitda margin safety performance revenue analyze revenue growth comparing actual monthly revenue internal projections month assess performance also assess incremental changes monthly revenue across operating segments identify potential areas improvement adjusted ebitda adjusted ebitda margin define adjusted ebitda net income loss interest income net depreciation amortization income tax benefit expense asset impairments gain loss disposal assets foreign currency gain loss equitybased compensation unrealized realized gain loss effects tra noncash adjustments charges credits adjusted ebitda margin reflects adjusted ebitda percentage revenues review adjusted ebitda adjusted ebitda margin consolidated basis segment basis use adjusted ebitda adjusted ebitda margin assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization items outside control management team income tax foreign currency exchange rates charges outside normal course business adjusted ebitda adjusted ebitda margin limitations analytical tools considered alternative net income loss operating income loss cash flow operating activities measure financial performance presented accordance generally accepted accounting principles us “gaap” following table presents reconciliation adjusted ebitda adjusted ebitda margin net loss periods presented thousands 1 please see note 13related party transactions notes consolidated financial statements discussion 2 comprised equitybased compensation expense 2018 10621 2017 13862 2016 15978 mergers acquisition expense 2018 58 2017 459 2016 13784 severance charges credits net 2018 310 2017 75354 2016 46406 unrealized realized gains losses 2018 1682 2017 2791 2016 110 investigationrelated matters 2018 5454 2017 6143 2016 6397 adjustments 2018 none 2017 487 2016 none safety performance safety primary core value maintaining strong safety record critical component operational success many customers safety standards must satisfy perform services result continually monitor improve safety performance evaluation safety observations job customer surveys safety data primary measure safety performance tracking total recordable incident rate “trir” trir measure rate recordable workplace injuries normalized basis 100 full time employees annual period factor derived multiplying number recordable injuries calendar year 200000 dividing value total hours actually worked year recordable injury includes occupational death nonfatal occupational illness occupational injuries involve loss consciousness lost time injuries restriction work motion cases transfer another job medical treatment cases first aid table presents worldwide trir years ended december 31 2018 2017 2016 results operations following table presents consolidated results periods presented thousands 1 please see note 13related party transactions notes consolidated financial statements discussion consolidated results operations year ended december 31 2018 compared year ended december 31 2017 revenues external customers excluding intersegment sales year ended december 31 2018 increased 677 million 149 5225 million 4548 million year ended december 31 2017 revenues increased across segments primarily result improved activity levels particularly western hemisphere revenues segments discussed separately heading “operating segment results” cost revenues exclusive depreciation amortization cost revenues year ended december 31 2018 increased 397 million 128 3501 million 3104 million year ended december 31 2017 increase primarily due higher activity levels mix work us services blackhawk segments partially offset productivity actions taken 2017 2018 general administrative expenses general administrative “ga” expenses year ended december 31 2018 decreased 81 million 50 1556 million 1637 million year ended december 31 2017 primarily due lower professional fees stockbased compensation expense well reduced expenses associated aircraft sold 2017 depreciation amortization depreciation amortization year ended december 31 2018 decreased 108 million 89 1113 million 1221 million year ended december 31 2017 result lower depreciable base due decreased capital expenditures recent years severance charges credits net severance charges credits net year ended december 31 2018 changed 757 million credit 03 million charge 754 million year ended december 31 2017 recorded impairments pipe connectors inventory 512 million accounts receivable write offs 150 million related venezuela nigeria angola fourth quarter 2017 management decided significantly reduce footprint nigeria angola exiting certain bases temporarily abandoning investment venezuela 2018 recovered 49 million previously written receivables customer angola see note 19severance charges credits net notes consolidated financial statements additional information foreign currency gain loss foreign currency gain loss year ended december 31 2018 changed 78 million loss 57 million gain 21 million year ended december 31 2017 change foreign currency results primarily driven strengthening us dollar currencies income tax expense benefit income tax expense benefit year ended december 31 2018 changed 759 million benefit 30 million expense 729 million year ended december 31 2017 effective income tax rate 31 843 years ended december 31 2018 december 31 2017 respectively change 2017 2018 primarily 2017 1 recorded valuation allowances net deferred tax assets 2 reversed deferred taxes conjunction derecognition tra 3 recorded effect change us federal income tax rates deferred tax assets liabilities addition 2018 recorded deferred tax benefit conjunction reorganization intercompany leasing operations excluding onetime items effective income tax rate income tax expense benefit 2017 would 574 497 million respectively effective income tax rate income tax expense benefit 2018 would 88 83 million respectively change 2017 2018 excluding onetime items primarily due changes jurisdictional mix earnings application reduced us tax rate 21 us operations subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income operations income tax provision varies period year ended december 31 2017 compared year ended december 31 2016 revenues external customers excluding intersegment sales year ended december 31 2017 decreased 327 million 67 4548 million 4875 million year ended december 31 2016 decrease primarily attributable lower revenues majority segments due declining activity depressed oil gas prices resulted reduced rig count offshore markets downward pricing pressures rig cancellations delays well deferred work scopes international offshore us services regions tubular sales decreased due lower international demand decreased deepwater fabrication revenue decreased revenues partially offset increase revenues blackhawk segment 610 million resulting acquisition blackhawk november 2016 improved us onshore revenues see note 3acquisitions divestitures notes consolidated financial statements additional information blackhawk acquisition revenues segments discussed separately heading “operating segment results” cost revenues exclusive depreciation amortization cost revenues year ended december 31 2017 decreased 68 million 22 3104 million 3173 million year ended december 31 2016 decrease primarily due lower cost product sales tubular sales segment driven lower activity volumes cost cutting initiatives partially offset 266 million additional cost revenues related blackhawk acquisition acquired november 2016 general administrative expenses general administrative “ga” expenses year ended december 31 2017 decreased 82 million 48 1637 million 1719 million year ended december 31 2016 primarily due bad debt expense related venezuelan receivables 2016 reduction compensation benefit related expenses onetime property tax credits earned 2017 partially offset higher expenses increased ga expense related blackhawk acquisition expense related writeoff venezuelan receivables 2017 included severance charges credits net depreciation amortization depreciation amortization year ended december 31 2017 increased 79 million 69 1221 million 1142 million year ended december 31 2016 increase primarily attributable blackhawk acquisition partially offset lower depreciable base result asset retirements fourth quarter 2016 severance charges credits net severance charges credits net year ended december 31 2017 increased 289 million 624 754 million primarily due impairments pipe connectors inventory 512 million accounts receivable write offs 150 million related venezuela nigeria angola fourth quarter 2017 management decided significantly reduce footprint nigeria angola exiting certain bases temporarily abandoning investment venezuela partially offset lower severance costs 138 million lower fixed asset retirements abandonments 234 million compared prior year see note 19severance charges credits net notes consolidated financial statements additional information foreign currency gain loss foreign currency gain loss year ended december 31 2017 changed 129 million gain 21 million loss 108 million year ended december 31 2016 change primarily due devaluation nigerian naira 2016 income tax expense benefit income tax expense benefit year ended december 31 2017 changed 986 million expense 729 million benefit 256 million year ended december 31 2016 effective income tax rate 843 141 years ended december 31 2017 december 31 2016 respectively change 2016 2017 primarily recording valuation allowances net deferred tax assets reversal deferred taxes associated derecognition tra excluding onetime items effective income tax rate income tax expense benefit 2017 would 574 497 million respectively change 2016 2017 excluding onetime items primarily due changes jurisdictional mix earnings subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues consequently relationship pretax income operations income tax provision varies period december 22 2017 tax cuts jobs act “tax act” enacted law among significant changes made act reduction federal income tax rate 35 21 well imposition onetime repatriation tax deemed repatriated earnings certain foreign subsidiaries us gaap requires impact tax act recognized period law enacted change tax rate company recorded 238 million reduction value deferred tax assets liabilities reduction value fully offset corresponding change valuation allowance net effect total tax expense zero due legal structure company incur liability respect repatriation tax operating segment results following table presents revenues adjusted ebitda segment thousands 1 adjusted ebitda supplemental nongaap financial measure used management external users financial statements industry analysts investors lenders rating agencies reconciliation adjusted ebitda see “adjusted ebitda adjusted ebitda margin” 2 includes corporate general administrative expenses year ended december 31 2018 compared year ended december 31 2017 international services revenue international services segment 2230 million year ended december 31 2018 increase 162 million 79 compared 2067 million period 2017 primarily due activity improvements offshore western hemisphere asia pacific middle east partially offset lower activity levels africa decreased work scope north sea adjusted ebitda international services segment 355 million year ended december 31 2018 increase 47 million 152 compared 308 million period 2017 primarily due efficiency gains higher revenues upsell work offshore western hemisphere partially offset decreased work scope north sea prior year results positively impacted tax credit repeat 2018 us services revenue us services segment 1489 million year ended december 31 2018 increase 301 million 254 compared 1188 million period 2017 onshore services revenue increased 188 million result improved activity increased rig counts offshore business saw increase revenue 113 million result increased rig counts higher service activity gulf mexico adjusted ebitda us services segment loss 181 million year ended december 31 2018 favorable change 212 million 540 compared loss 394 million period 2017 primarily due increase onshore services activity lower corporate costs partially offset lower pricing offshore services tubular sales revenue tubular sales segment 614 million year ended december 31 2018 increase 32 million 55 compared 582 million period 2017 primarily result increased cavern well activity higher sales activity mexico adjusted ebitda tubular sales segment 32 million year ended december 31 2018 flat compared 2017 increased profitability improved activity levels offset higher manufacturing costs blackhawk revenue blackhawk segment 891 million year ended december 31 2018 increase 181 million 255 compared 710 million period 2017 driven strong activity us onshore market growth international markets increased market share new product offerings gulf mexico adjusted ebitda blackhawk segment 127 million year ended december 31 2018 increase 16 million 145 compared 111 million period 2017 primarily due improved operational results partially offset higher corporate overhead expense driven bonus medical claims expense allocations see note 1basis presentation significant accounting policies notes consolidated financial statements year ended december 31 2017 compared year ended december 31 2016 international services revenue international services segment 2067 million year ended december 31 2017 decrease 305 million 128 compared 2372 million period 2016 primarily due lower offshore rig counts globally increased pricing pressure new contracts revenue declines africa europe asia pacific regions mostly attributable major customers reducing amount work regions partially offset attempts expand countries drilling activity historically smaller presence increases canada middle east due higher activity key customers adjusted ebitda international services segment 308 million year ended december 31 2017 decrease 25 million 74 compared 333 million period 2016 primarily due decrease revenue partially offset lower expenses due reduced activity costcutting measures us services revenue us services segment 1188 million year ended december 31 2017 decrease 340 million 223 compared 1528 million period 2016 primarily due decrease offshore services revenue 514 million result overall lower activity weaknesses seen gulf mexico due rig cancellations delays coupled downward pricing pressures partially offset increase onshore services revenue 174 million result improved activity due increased oil prices led higher rig counts favorable pricing adjusted ebitda us services segment loss 394 million year ended december 31 2017 decrease 283 million 2574 compared loss 110 million period 2016 primarily due higher pricing concessions increased asset related expenses higher labor costs support increased land activity well higher corporate costs attributable ongoing global corporate initiatives tubular sales revenue tubular sales segment 582 million year ended december 31 2017 decrease 293 million 335 compared 875 million period 2016 primarily result lower deepwater activity gulf mexico adjusted ebitda tubular sales segment 32 million year ended december 31 2017 increase 14 million 827 compared 17 million period 2016 due cost cutting measures lower product costs offset increase freight costs associated project work blackhawk segment comprised solely assets acquired november 1 2016 revenues adjusted ebitda segment 710 million 111 million respectively year ended december 31 2017 compared 100 million 10 million respectively two months ended december 31 2016 liquidity capital resources liquidity december 31 2018 cash equivalents shortterm investments 2128 million debt 56 million primary sources liquidity date cash flows operations primary uses capital organic growth capital expenditures acquisitions continually monitor potential capital sources including equity debt financing order meet investment target liquidity requirements total capital expenditures estimated range 400 million 500 million 2019 expect approximately 65 used purchase manufacture equipment 35 property plant equipment inclusive purchase construction facilities actual amount capital expenditures manufacture equipment may fluctuate based market conditions years ended december 31 2018 2017 2016 purchases property plant equipment intangibles 565 million 220 million 421 million respectively funded internally generated sources believe cash hand cash flows operations sufficient fund capital expenditure liquidity requirements next twelve months timing declaration amount payment dividends within discretion board managing directors subject approval board supervisory directors depend upon many factors including financial condition earnings capital requirements covenants associated certain debt service obligations legal requirements regulatory constraints industry practice ability access capital markets factors deemed relevant board managing directors board supervisory directors legal obligation pay dividend assurance able october 27 2017 board managing directors company approval board supervisory directors company approved plan suspend company’s quarterly dividend order preserve capital various purposes including invest growth opportunities credit facilities new asset based revolving credit facility november 5 2018 ficv frank’s international llc blackhawk borrowers finv certain finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc guarantors entered fiveyear senior secured revolving credit facility “new abl credit facility” jpmorgan chase bank na administrative agent “abl agent” financial institutions lenders total commitments 1000 million including 150 million available letters credit subject terms new abl credit facility ability increase commitments 2000 million maximum amount company may borrow new abl credit facility subject borrowing base based percentage certain eligible accounts receivable eligible inventory subject customary reserves adjustments obligations new abl credit facility fully unconditionally guaranteed jointly severally finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc subject customary exceptions exclusions addition obligations new abl credit facility secured first priority liens substantially assets property borrowers guarantors including pledges equity interests certain finv’s subsidiaries subject certain exceptions borrowings new abl credit facility bear interest finv’s option either alternate base rate “abr” defined therein calculated greatest rate interest publicly quoted wall street journal “prime rate” subject increase decrease prime rate effective date change occurs ii federal funds effective rate subject 000 interest rate floor plus 050 iii onemonth adjusted libo rate defined therein plus 100 b adjusted libo rate defined therein plus case applicable margin applicable interest rate margin ranges 100 150 per annum abr loans 200 250 per annum eurodollar loans case based finv’s leverage ratio unused portion new abl credit facility subject commitment fee varies 0250 0375 per annum according average daily unused commitments new abl credit facility interest eurodollar loans payable end selected interest period less frequently quarterly interest abr loans payable monthly arrears new abl credit facility contains various covenants restrictive provisions limit subject certain customary exceptions thresholds finv’s ability among things 1 enter asset sales 2 incur additional indebtedness 3 make investments acquisitions loans create incur liens 4 pay certain dividends make distributions 5 engage transactions affiliates new abl credit facility also requires finv maintain minimum fixed charge coverage ratio 10 based ratio consolidated ebitda defined therein minus unfinanced capital expenditures b fixed charges defined therein either event default occurs new abl facility ii availability new abl credit facility falls least two consecutive calendar days greater 125 million b 15 lesser borrowing base aggregate commitments “fccr trigger event” accounts receivable received finv’s us subsidiaries parties new abl credit facility deposited deposit accounts subject deposit control agreements favor abl agent fccr trigger event deposit accounts would subject “springing” cash dominion fccr trigger event company subject compliance fixed charge coverage ratio “springing” cash dominion default exists new abl credit facility availability facility preceding thirty consecutive days equal least greater x 125 million 15 lesser borrowing base aggregate commitments finv fails perform obligations agreement results event default commitments new abl credit facility could terminated outstanding borrowings new abl credit facility may declared immediately due payable new abl credit facility also contains cross default provisions apply finv’s indebtedness december 31 2018 finv borrowings outstanding new abl credit facility letters credit outstanding 49 million availability 697 million insurance notes payable 2018 entered note finance annual insurance premiums totaling 68 million note bears interest annual rate 39 final maturity date october 2019 december 31 2018 total outstanding balance 56 million 2017 entered three notes finance annual insurance premiums totaling 51 million notes bear interest annual rate 29 final maturity date october 2018 december 31 2017 total outstanding balance 47 million cash flows operating investing financing activities cash flows provided used operations investing financing activities summarized thousands statements cash flows entities international operations use local currency functional currency exclude effects changes foreign currency exchange rates occur given year noncash changes result changes reflected certain accounts consolidated statements cash flows may reflect changes corresponding accounts consolidated balance sheets operating activities cash flow provided used operating activities 326 million year ended december 31 2018 compared 248 million 2017 increase cash flow used operating activities 2018 574 million compared 2017 primarily result unfavorable accounts receivable changes increase cash provided operating activities 2017 due tax refunds 297 million increase cash flow provided operating activities year ended december 31 2017 356 million compared year ended december 31 2016 primarily due positive working capital changes 2017 tax refunds 297 million investing activities cash flow provided used investing activities 104 million year ended december 31 2018 compared 777 million year ended december 31 2017 increase 881 million primarily result net investment activity 1295 million offset lower proceeds sale assets 69 million higher purchases property plant equipment related parties 367 million cash flow used investing activities 777 million year ended december 31 2017 compared 1789 million year ended december 31 2016 decrease 1012 million period primarily related acquisition blackhawk 2016 1504 million cash used addition lower purchases property plant equipment 202 million higher proceeds sale assets 102 million also contributed decrease changes partially offset net increase purchase investments 798 million primarily related net purchases investments original maturities greater three months less twelve months financing activities cash flow used financing activities 79 million year ended december 31 2018 compared 525 million year ended december 31 2017 decrease 445 million period primarily related lower dividends paid common stock 502 million offset higher repayments borrowings 52 million cash flow used financing activities 525 million year ended december 31 2017 compared 968 million year ended december 31 2016 decrease 443 million period primarily related lower dividends paid common stock 289 million absence payment noncontrolling interest 80 million lower repayments borrowings 65 million contractual obligations party various contractual obligations portion obligations reflected financial statements debt obligations operating leases purchase obligations reflected balance sheet following summary contractual obligations december 31 2018 thousands 1 includes purchase commitments related connectors pipe inventory enter purchase commitments needed addition company issued purchase orders ordinary course business purchase goods services purchase orders enforceable legally binding however none company’s purchase obligations call deliveries goods services time periods excess one year included table uncertain tax positions 03 million tax receivable agreement entered tra ficv mosing holdings connection ipo tra generally provides payment us mosing holdings 85 amount actual reductions payments us federal state local income tax franchise tax periods ipo reductions refer “cash savings” result tax basis increases resulting transfer ficv interests us connection conversion shares preferred stock shares common stock august 26 2016 ii imputed interest deemed paid us result additional tax basis arising payments tra addition tra provides interest earned due date without extensions corresponding tax return date payment specified tra retain remaining 15 cash savings payment obligations tra obligations ficv term tra continues tax benefits utilized expired unless exercise right terminate tra elect execute sole right terminate tra early would required make immediate payment equal present value anticipated future tax benefits subject tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits ficv interests mosing holdings transferees termination date deemed exchanged termination date addition payments due tra similarly accelerated following certain mergers changes control certain circumstances may required make payments tra entered mosing holdings circumstances payments associated actual cash savings recognize connection conversion preferred stock would reduce actual tax benefit us elect exercise sole right terminate tra early enter certain change control transactions may incur payment obligations prior time actually incur tax benefit circumstances would need pay amounts cash hand finance payments refrain triggering obligation though present intention triggering advance payment tra based current liquidity expected ability access debt equity financing believe would able make payment necessary payment could reduce cash hand borrowing availability however would also reduce amount cash available operate business fund capital expenditures paid dividends stockholders among things please see note 13related party transactions notes consolidated financial statements offbalance sheet arrangements december 31 2018 offbalance sheet arrangements exception operating leases purchase obligations critical accounting policies preparation consolidated financial statements conformity gaap requires management select appropriate accounting principles available apply principles consistently make reasonable estimates assumptions affect revenues associated costs well reported amounts assets liabilities related disclosure contingent assets liabilities certain accounting policies involve judgments uncertainties evaluate estimates assumptions regular basis base respective estimates historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates assumptions used preparation consolidated financial statements consider following policies critical understanding judgments involved uncertainties could impact results operations financial condition cash flows revenue recognition revenues recognized control promised goods services transferred customers amount reflects consideration expect entitled exchange goods services payment terms services products generally range 30 days 120 days given shortterm nature service product offerings contracts significant financing component consideration receive generally fixed service revenues recognized time services performed rendered rates services typically priced per day per manhour similar basis generally perform services either direct service purchase orders master service agreements supplemented individual callout provisions customers contracted arrangements accrual recorded unbilled revenue earned yet invoiced revenues product sales generally recognized point time product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions contain postdelivery obligations tubular sales blackhawk segment customers requested store pipe connectors cementing products purchased us facilities recognize revenues “bill hold” sales following criteria met 1 substantive reason arrangement 2 product identified customer’s asset 3 product ready delivery customer 4 cannot use product direct another customer income taxes liability method used determining income tax provisions current deferred tax liabilities assets recorded accordance enacted tax laws rates method amounts deferred tax liabilities assets end period determined using tax rate expected effect taxes actually paid recovered valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances made judgments estimates regarding future taxable income ongoing prudent feasible tax planning strategies estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets historically changes valuation allowances caused major changes business cycle certain countries changes local country law ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions ficv operate approximately 50 countries many legal forms result subject jurisdiction numerous us foreign tax authorities well tax agreements treaties among governments operations different jurisdictions taxed various bases actual income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events amount timing character deductions permissible revenue recognition methods tax law sources character income tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact amount income taxes provide given year tax filings open tax periods subject audit tax authorities audits may result assessments additional taxes resolved either tax authorities courts assessments may occasionally based erroneous even arbitrary interpretations local tax law resolution situations inevitably includes degree uncertainty accordingly provide taxes amounts believe ultimately result proceedings resulting change tax liability dependent numerous factors including among others amount nature additional taxes potentially asserted local tax authorities willingness local tax authorities negotiate fair settlement administrative process impartiality local courts number countries business potential changes tax paid one country either produce fail produce offsetting tax change countries experience estimates assumptions used provide future tax assessments proven appropriate however past experience guide potential exists tax resulting resolution current potential future tax controversies may differ materially amount accrued addition aforementioned assessments received various tax authorities also provide taxes uncertain tax positions formal assessments received determination liabilities requires use estimates assumptions regarding future events established adjust amounts information available event occurs necessitating change reserves changes facts law judicial decisions regarding application existing law favorable audit outcome believe resolution tax matters material effect consolidated financial condition although resolution could material impact consolidated statements operations particular period effective tax rate period resolution occurs goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount quantitative impairment test performed quantitative goodwill impairment test used identify existence impairment amount impairment loss test compares fair value reporting unit carrying amount including goodwill amount impairment goodwill measured excess carrying value fair value complete assessment goodwill impairment october 31 year goodwill impairment recorded years ended december 31 2018 2017 2016 goodwill allocated operating segments follows us services approximately 162 million tubular sales approximately 24 million blackhawk approximately 1924 million inputs used determination fair value generally level 3 inputs allowance doubtful accounts evaluate whether client receivables collectible perform ongoing credit evaluations clients monitor collections payments order maintain provision estimated uncollectible accounts based historical collection experience current aging client receivables outstanding addition clients’ representations understanding economic environment clients operate based review establish adjust allowances specific clients accounts receivable whole recent accounting pronouncements see note 1basis presentation significant accounting policies notes consolidated financial statements set forth part ii item 8 “financial statements supplementary data” heading “recent accounting pronouncements” included form 10k item 7aitem 7 management’s discussion analysis financial condition results operation following discussion analysis financial condition results operations read conjunction consolidated financial statements related notes thereto included part ii item 8 “financial statements supplementary data” included form 10k section contains forwardlooking statements based management’s current expectations estimates projections business operations involve risks uncertainties actual results may differ materially currently anticipated expressed forwardlooking statements various factors including described sections titled “cautionary note regarding forwardlooking statements” part item 1a “risk factors” elsewhere form 10k overview business global provider highly engineered tubular services tubular fabrication specialty well construction well intervention solutions oil gas industry business 80 years provide services products leading exploration production companies offshore onshore environments focus complex technically demanding wells first quarter 2019 company changed reportable segment structure please see note 1basis presentation significant accounting policies note 20segment information notes consolidated financial statements additional information conduct business three operating segments • tubular running services trs segment provides tubular running services globally internationally trs segment operates majority offshore oil gas markets also several onshore regions operations approximately 50 countries six continents us trs segment provides services active onshore oil gas drilling regions including permian basin eagle ford shale haynesville shale marcellus shale utica shale well us gulf mexico customers markets primarily large exploration production companies including international oil gas companies national oil gas companies major independents oilfield service companies • tubulars segment designs manufactures distributes connectors casing attachments large outside diameter “od” heavy wall pipe additionally tubulars segment sells large od pipe originally manufactured various pipe mills plain end fully fabricated proprietary welded threaddirect connector solutions provides specialized fabrication welding services support offshore deepwater projects including drilling production risers flowlines pipeline end terminations well longlength tubular assemblies 400 feet length tubulars segment also specializes development manufacture supply proprietary drilling tool solutions focus improving drilling productivity eliminating mitigating traditional drilling operational risks • cementing equipment ce segment provides specialty equipment enhance safety efficiency rig operations provides specialized equipment services products utilized construction completion abandonment wellbore onshore offshore environments product portfolio includes casing accessories serve improve installation casing centralization wellbore zonal isolation well enhance cementing operations advance wiper plug float equipment technology abandonment solutions primarily used isolate portions wellbore setting barriers downhole allow rig evacuation case inclement weather maintenance work rig equipment squeeze cementing pressure testing within wellbore hydraulic fracturing temporary permanent abandonments offerings improve operational efficiencies limit nonproductive time unscheduled events encountered wellsite generate revenue majority services revenue derived primarily providing tubular services involves handling installation multiple joints pipe establish cased wellbore installation smaller diameter pipe inside cased wellbore contrast tubular product revenue derived sales certain products including large od pipe connectors large od pipe manufactured third parties directly external customers cementing equipment revenue derived well construction well intervention services products revenue historically split evenly service revenue product revenue addition customers typically reimburse us transportation costs incur connection transporting products equipment staging areas customers’ job sites outlook observed expect see moderate increase customer spending globally oil natural gas exploration production exploration development spending started shift toward offshore internationally focused projects us land activity anticipated flatten coming year activity deep ultradeep offshore markets already benefiting modest improvement expected continue 2020 several years depressed spending several largescale projects placed hold sanctioned initiated many international offshore shelf markets see increased activity operators recognize improved economics current commodity prices anticipate total spending us onshore projects decrease 2020 2019 levels operators act adjusted capital budgets however believe bottom reached fourth quarter 2019 stabilize 2020 levels 2019 us onshore market went disciplined spending cutback ensure operations within capital budget constraints drove market downward believe cash flow discipline continue 2020 tubular running services segment expect us international offshore markets see moderate growth business typically associated higher margin projects anticipate evolve margin profile 2020 however anticipate competitive pricing likely persist could serve limit growth 2018 2019 made market share gains globally expect sustain gains future client base continues expand drilling contractors integrated service providers look differentiated technology efficiencybased solutions us onshore operations expected see reduction 2019 however also anticipate gradual improvement beginning second quarter budgets replenished drilling activity levels rebound slowly believe near bottom levels fourth quarter 2019 tubulars segment primarily driven specialized needs customers timing projects specifically gulf mexico expect benefit increased sales select international markets predicted supplement flat slightly outlook offshore gulf mexico drilling tools service line continues expand introduction new tools anticipate service line grow well beyond market rates coming year new offerings penetrate us international markets similarly tubulars product line anticipated benefit greater demand 2020 seen 2019 customer inventories diminished offshore activity increases cementing equipment segment product service lines expected see incremental improvement year offshore markets us onshore products services likely follow us onshore trend bottoming fourth quarter 2019 demonstrate slow improvement beginning second quarter 2020 2019 growth cementing equipment international offshore markets expected see sequential improvement new equipment built certified deployed markets us gulf mexico market expected see slight increase matching market growth rates furtherance operational efforts light prolonged challenging market conditions completed comprehensive review geographic footprint ongoing initiatives cost structure asset base review identified areas profitability improvement across organization actions begun several business areas designed increase profitability 30 million 2020 included companywide restructuring announced fourth quarter 2019 alongside restructuring project initiative review also led us conclude appropriate impair reserve meaningful amount construction progress challenged commercialization plans inflight engineering efforts overall expect continued modest improvement customer spend activity 2020 offshore international markets offset ongoing retraction us onshore spending year basis continue efforts expand newer service product lines historically weighted us offshore market focusing international markets historically underrepresented cementing equipment tubulars segments also place strong focus operational efficiency gains prioritizing projects improve market share profitability remain strong position financially significant cash balance relative debt evaluate operations use number financial operational measures routinely analyze evaluate performance business including revenue adjusted ebitda adjusted ebitda margin safety performance revenue analyze revenue growth comparing actual monthly revenue internal projections month assess performance also assess incremental changes monthly revenue across operating segments identify potential areas improvement adjusted ebitda adjusted ebitda margin define adjusted ebitda net income loss interest income net depreciation amortization income tax benefit expense asset impairments gain loss disposal assets foreign currency gain loss equitybased compensation unrealized realized gain loss effects tra noncash adjustments charges credits adjusted ebitda margin reflects adjusted ebitda percentage revenue review adjusted ebitda adjusted ebitda margin consolidated basis segment basis use adjusted ebitda adjusted ebitda margin assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization items outside control management team income tax foreign currency exchange rates charges outside normal course business adjusted ebitda adjusted ebitda margin limitations analytical tools considered alternative net income loss operating income loss cash flow operating activities measure financial performance presented accordance generally accepted accounting principles us “gaap” following table presents reconciliation adjusted ebitda adjusted ebitda margin net loss periods presented thousands 1 comprised equitybased compensation expense 2019 11280 2018 10621 2017 13862 mergers acquisition expense 2019 none 2018 58 2017 459 unrealized realized gains losses 2019 228 2018 1682 2017 2791 investigationrelated matters 2019 3838 2018 5454 2017 6143 adjustments 2019 957 2018 none 2017 487 safety performance safety one primary core values maintaining strong safety record critical component operational success many customers safety standards must satisfy perform services result continually monitor improve safety performance evaluation safety observations job customer surveys safety data primary measure safety performance tracking total recordable incident rate “trir” trir measure rate recordable workplace injuries normalized basis 100 full time employees annual period factor derived multiplying number recordable injuries calendar year 200000 dividing value total hours actually worked year recordable injury includes occupational death nonfatal occupational illness occupational injuries involve loss consciousness lost time injuries restriction work motion cases transfer another job medical treatment cases first aid table presents worldwide trir years ended december 31 2019 2018 2017 results operations following table presents consolidated results periods presented thousands 1 year ended december 31 2018 28946 8246 reclassified general administrative expenses cost revenue products respectively cost revenue services year ended december 31 2017 34486 15492 reclassified general administrative expenses cost revenue products respectively cost revenue services see note 1basis presentation significant accounting policies notes consolidated financial statements 2 please see note 12related party transactions notes consolidated financial statements discussion consolidated results operations year ended december 31 2019 compared year ended december 31 2018 revenue external customers excluding intersegment sales year ended december 31 2019 increased 574 million 110 5799 million 5225 million year ended december 31 2018 revenue increased across segments revenue segments discussed separately heading “operating segment results” cost revenue exclusive depreciation amortization cost revenue year ended december 31 2019 increased 379 million 100 4170 million 3791 million year ended december 31 2018 increase primarily due higher activity levels across segments well mix work trs ce segments partially offset productivity cost efficiency actions taken 2019 general administrative expenses general administrative “ga” expenses year ended december 31 2019 decreased 62 million 49 1204 million 1266 million year ended december 31 2018 due sales use tax refunds received second half 2019 along cost savings associated personnel reductions partially offset increased insurance costs driven adjustment first quarter 2019 depreciation amortization depreciation amortization year ended december 31 2019 decreased 185 million 166 928 million 1113 million year ended december 31 2018 result lower depreciable asset base goodwill impairment recognized goodwill impairment 1111 million year ended december 31 2019 goodwill impairment charge year ended december 31 2018 see note 1basis presentation significant accounting policies notes consolidated financial statements additional information severance charges credits net severance charges credits net year ended december 31 2019 increased 507 million charge 504 million credit 03 million year ended december 31 2018 severance charges credits net year ended december 31 2019 unfavorably impacted fixed asset impairment charges 329 million intangible asset impairments 33 million inventory impairments 45 million severance costs 97 million primarily made conjunction business review conducted fourth quarter 2019 severance charges credits net year ended december 31 2018 favorably impacted recovery accounts receivable previously written angola see note 18severance charges credits net notes consolidated financial statements additional information foreign currency gain loss foreign currency gain loss year ended december 31 2019 decreased 34 million 22 million 57 million year ended december 31 2018 change foreign currency results yearoveryear primarily driven reduced strengthening us dollar current period compared prior year period particularly comparison norwegian krone euro brazilian real income tax expense benefit income tax expense benefit year ended december 31 2019 changed 267 million expense 238 million benefit 30 million year ended december 31 2018 effective income tax rate 112 31 years ended december 31 2019 december 31 2018 respectively change due primarily significant tax benefit recorded 2018 establish deferred tax asset related newly established hungarian operations significant tax expense recorded 2019 record valuation allowance certain indefinitelived intangibles change also attributable part higher tax expenses associated increased earnings latin america africa regions year ended december 31 2018 compared year ended december 31 2017 revenue external customers excluding intersegment sales year ended december 31 2018 increased 677 million 149 5225 million 4548 million year ended december 31 2017 revenue increased across segments primarily result improved activity levels particularly western hemisphere revenue segments discussed separately heading “operating segment results” cost revenue exclusive depreciation amortization cost revenue year ended december 31 2018 increased 342 million 99 3791 million 3449 million year ended december 31 2017 increase primarily due higher activity levels mix work trs ce segments partially offset productivity actions taken 2017 2018 general administrative expenses general administrative “ga” expenses year ended december 31 2018 decreased 26 million 20 1266 million 1292 million year ended december 31 2017 primarily due lower professional fees stockbased compensation expense well reduced expenses associated aircraft sold 2017 depreciation amortization depreciation amortization year ended december 31 2018 decreased 108 million 89 1113 million 1221 million year ended december 31 2017 result lower depreciable asset base decreased intangible asset amortization expense severance charges credits net severance charges credits net year ended december 31 2018 changed 757 million credit 03 million charge 754 million year ended december 31 2017 recorded impairments pipe connectors inventory 512 million accounts receivable write offs 150 million related venezuela nigeria angola fourth quarter 2017 management decided significantly reduce footprint nigeria angola exiting certain bases temporarily abandoning investment venezuela 2018 recovered 49 million previously written receivables customer angola see note 18severance charges credits net notes consolidated financial statements additional information foreign currency gain loss foreign currency gain loss year ended december 31 2018 changed 78 million loss 57 million gain 21 million year ended december 31 2017 change foreign currency results primarily driven strengthening us dollar currencies income tax expense benefit income tax expense benefit year ended december 31 2018 changed 759 million benefit 30 million expense 729 million year ended december 31 2017 effective income tax rate 31 843 years ended december 31 2018 december 31 2017 respectively change 2017 2018 primarily 2017 1 recorded valuation allowances net deferred tax assets 2 reversed deferred taxes conjunction derecognition tra 3 recorded effect change us federal income tax rates deferred tax assets liabilities addition 2018 recorded deferred tax benefit conjunction reorganization intercompany leasing operations excluding onetime items effective income tax rate income tax expense benefit 2017 would 574 497 million respectively effective income tax rate income tax expense benefit 2018 would 88 83 million respectively change 2017 2018 excluding onetime items primarily due changes jurisdictional mix earnings application reduced us tax rate 21 us operations subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue consequently relationship pretax income operations income tax provision varies period december 22 2017 tax act enacted law among significant changes made act reduction federal income tax rate 35 21 well imposition onetime repatriation tax deemed repatriated earnings certain foreign subsidiaries us gaap requires impact tax act recognized period law enacted change tax rate company recorded 238 million reduction value deferred tax assets liabilities reduction value fully offset corresponding change valuation allowance net effect total tax expense zero due legal structure company incur liability respect repatriation tax operating segment results following table presents revenue adjusted ebitda segment thousands 1 adjusted ebitda supplemental nongaap financial measure used management external users financial statements industry analysts investors lenders rating agencies reconciliation adjusted ebitda see “adjusted ebitda adjusted ebitda margin” 2 corporate component includes certain expenses attributable particular segment costs related support functions corporate executives year ended december 31 2019 compared year ended december 31 2018 tubular running services revenue trs segment 4003 million year ended december 31 2019 increase 393 million 109 compared 3610 million period 2018 increase driven activity improvements us latin america africa europe partially offset lower activity levels canada adjusted ebitda trs segment 856 million year ended december 31 2019 increase 231 million 369 compared 625 million period 2018 segment results positively impacted activity improvements africa us europe latin america tubulars revenue tubulars segment 747 million year ended december 31 2019 increase 24 million 33 compared 723 million period 2018 primarily result higher drilling tools activity partially offset lower tubular sales current period adjusted ebitda tubulars segment 116 million year ended december 31 2019 increase 03 million compared 112 million period 2018 primarily result increase high margin drilling tools activity partially offset lower tubular sales pipe write downs current period cementing equipment revenue ce segment 1049 million year ended december 31 2019 increase 158 million 177 compared 891 million period 2018 driven expansion international markets increased services market share product sales us gulf mexico adjusted ebitda ce segment 141 million year ended december 31 2019 increase 55 million 635 compared 86 million period 2018 primarily due improved operational results particularly offshore international markets corporate adjusted ebitda corporate loss 537 million year ended december 31 2019 unfavorable increase 46 million 94 compared loss 491 million period 2018 primarily due increased insurance costs driven premium adjustment well higher professional fees year ended december 31 2018 compared year ended december 31 2017 tubular running services revenue trs segment 3610 million year ended december 31 2018 increase 407 million 127 compared 3204 million period 2017 primarily due activity improvements offshore western hemisphere asia pacific middle east partially offset lower activity levels africa decreased work scope north sea adjusted ebitda trs segment 625 million year ended december 31 2018 increase 229 million 579 compared 396 million period 2017 primarily due improved operational results offshore western hemisphere increased us onshore services revenue due improved rig count tubulars revenue tubulars segment 723 million year ended december 31 2018 increase 89 million 141 compared 634 million period 2017 primarily result increased drilling tools activity adjusted ebitda tubulars segment 112 million year ended december 31 2018 increase 76 million 2122 compared 36 million period 2017 primarily due increased drilling tools activity partially offset increase freight costs associated tubular project work cementing equipment revenue ce segment 891 million year ended december 31 2018 increase 181 million 255 compared 710 million period 2017 driven strong activity us onshore market growth international markets increased market share new product offerings gulf mexico adjusted ebitda ce segment 86 million year ended december 31 2018 increase 22 million 342 compared 64 million period 2017 primarily due improved operational results partially offset higher compensation related expenses corporate adjusted ebitda corporate loss 491 million year ended december 31 2018 unfavorable change 53 million 120 compared loss 439 million period 2017 primarily due higher professional fees compensation related expenses liquidity capital resources liquidity december 31 2019 cash equivalents 1954 million debt primary sources liquidity date cash flows operations primary uses capital organic growth capital expenditures acquisitions continually monitor potential capital sources including equity debt financing order meet investment target liquidity requirements total capital expenditures estimated range 450 million 550 million 2020 expect approximately 90 used purchase manufacture equipment approximately 10 property plant equipment inclusive capitalized enterprise resource planning software implementation costs actual amount capital expenditures manufacture equipment may fluctuate based market conditions years ended december 31 2019 2018 2017 purchases property plant equipment intangibles 369 million 565 million 220 million respectively funded internally generated sources believe cash hand cash flows operations sufficient fund capital expenditure liquidity requirements next twelve months timing declaration amount payment dividends within discretion board managing directors subject approval board supervisory directors depend upon many factors including financial condition earnings capital requirements covenants associated certain debt service obligations legal requirements regulatory constraints industry practice ability access capital markets factors deemed relevant board managing directors board supervisory directors legal obligation pay dividend assurance able credit facility asset based revolving credit facility november 5 2018 ficv frank’s international llc blackhawk borrowers finv certain finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc guarantors entered fiveyear senior secured revolving credit facility “abl credit facility” jpmorgan chase bank na administrative agent “abl agent” financial institutions lenders total commitments 1000 million including 150 million available letters credit subject terms abl credit facility ability increase commitments 2000 million maximum amount company may borrow abl credit facility subject borrowing base based percentage certain eligible accounts receivable eligible inventory subject customary reserves adjustments obligations abl credit facility fully unconditionally guaranteed jointly severally finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc subject customary exceptions exclusions addition obligations abl credit facility secured first priority liens substantially assets property borrowers guarantors including pledges equity interests certain finv’s subsidiaries subject certain exceptions borrowings abl credit facility bear interest finv’s option either alternate base rate “abr” defined therein calculated greatest rate interest publicly quoted wall street journal “prime rate” subject increase decrease prime rate effective date change occurs ii federal funds effective rate subject 000 interest rate floor plus 050 iii onemonth adjusted libo rate defined therein plus 100 b adjusted libo rate defined therein plus case applicable margin applicable interest rate margin ranges 100 150 per annum abr loans 200 250 per annum eurodollar loans case based finv’s leverage ratio unused portion abl credit facility subject commitment fee varies 0250 0375 per annum according average daily unused commitments abl credit facility interest eurodollar loans payable end selected interest period less frequently quarterly interest abr loans payable monthly arrears abl credit facility contains various covenants restrictive provisions limit subject certain customary exceptions thresholds finv’s ability among things 1 enter asset sales 2 incur additional indebtedness 3 make investments acquisitions loans create incur liens 4 pay certain dividends make distributions 5 engage transactions affiliates abl credit facility also requires finv maintain minimum fixed charge coverage ratio 10 based ratio consolidated ebitda defined therein minus unfinanced capital expenditures b fixed charges defined therein either event default occurs abl facility ii availability abl credit facility falls least two consecutive calendar days greater 125 million b 15 lesser borrowing base aggregate commitments “fccr trigger event” accounts receivable received finv’s us subsidiaries parties abl credit facility deposited deposit accounts subject deposit control agreements favor abl agent fccr trigger event deposit accounts would subject “springing” cash dominion fccr trigger event company subject compliance fixed charge coverage ratio “springing” cash dominion default exists abl credit facility availability facility preceding thirty consecutive days equal least greater x 125 million 15 lesser borrowing base aggregate commitments finv fails perform obligations agreement results event default commitments abl credit facility could terminated outstanding borrowings abl credit facility may declared immediately due payable abl credit facility also contains cross default provisions apply finv’s indebtedness december 31 2019 finv borrowings outstanding abl credit facility letters credit outstanding 93 million availability 447 million insurance notes payable 2018 entered note finance annual insurance premiums totaling 68 million note bore interest annual rate 39 final maturity date october 2019 december 31 2018 total outstanding balance 56 million current policy year company elected pay annual insurance premiums existing cash available cash flows operating investing financing activities cash flows provided used operations investing financing activities summarized thousands statements cash flows entities international operations use local currency functional currency exclude effects changes foreign currency exchange rates occur given year noncash changes result changes reflected certain accounts consolidated statements cash flows may reflect changes corresponding accounts consolidated balance sheets operating activities cash flow provided used operating activities 270 million year ended december 31 2019 compared 326 million 2018 increase cash flow provided operating activities 2019 597 million compared 2018 primarily result favorable change accounts receivable 858 million partially offset unfavorable changes accounts payable accrued liabilities 192 million inventories 78 million cash flow provided used operating activities 326 million year ended december 31 2018 compared 248 million 2017 increase cash flow used operating activities year ended december 31 2018 574 million compared year ended december 31 2017 primarily result unfavorable accounts receivable changes increase cash provided operating activities 2017 due tax refunds 297 million investing activities cash flow provided used investing activities 100 million year ended december 31 2019 compared 104 million year ended december 31 2018 increase cash used investing activities 204 million primarily result decreased net proceeds sale investments 332 million partially offset decreased purchases property plant equipment 195 million lower proceeds sale assets 63 million cash flow provided used investing activities 104 million year ended december 31 2018 compared 777 million year ended december 31 2017 increase 881 million primarily result net investment activity 1295 million offset lower proceeds sale assets 69 million higher purchases property plant equipment related parties 367 million financing activities cash flow used financing activities 59 million year ended december 31 2019 compared 79 million year ended december 31 2018 decrease 20 million period primarily related lower deferred financing costs 15 million 2019 increase proceeds issuance employee stock purchase plan shares 04 million cash flow used financing activities 79 million year ended december 31 2018 compared 525 million year ended december 31 2017 decrease 445 million period primarily related lower dividends paid common stock 502 million offset higher repayments borrowings 52 million contractual obligations party various contractual obligations portion obligations reflected financial statements operating leases obligations purchase obligations reflected balance sheet following summary contractual obligations december 31 2019 thousands 1 includes purchase commitments related connectors pipe inventory enter purchase commitments needed addition company issued purchase orders ordinary course business purchase goods services purchase orders enforceable legally binding however none company’s purchase obligations call deliveries goods services time periods excess one year included table uncertain tax positions 03 million tax receivable agreement entered tra ficv mosing holdings connection ipo tra generally provides payment us mosing holdings 85 amount net cash savings us federal state local income tax franchise tax actually realize deemed realize certain circumstances periods ipo result tax basis increases resulting transfer ficv interests us connection conversion shares preferred stock shares common stock ii imputed interest deemed paid us result additional tax basis arising payments tra retain benefit remaining 15 cash savings payments make tra increased accrued due date without extensions corresponding tax return date payment obligations tra obligations ficv term tra commenced upon completion ipo continue tax benefits subject tra utilized expired unless exercise right terminate tra terminated due circumstances including breach material obligation thereunder certain mergers changes control make termination payment specified tra elect execute sole right terminate tra early terminates early result breach would required make substantial immediate lumpsum payment equal present value hypothetical future payments could required paid tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize determined applying discount rate equal longterm treasury rate effect applicable date plus 300 basis points addition payments due tra similarly accelerated following certain mergers changes control certain circumstances may required make payments tra entered mosing holdings circumstances payments associated actual cash savings recognize connection conversion preferred stock would reduce actual tax benefit us elect exercise sole right terminate tra early enter certain change control transactions may incur payment obligations prior time actually incur tax benefit circumstances would need pay amounts cash hand finance payments refrain incurring obligation including entering change control transaction though present intention incurring advance payment tra based current liquidity expected ability access debt equity financing believe would able make payment necessary payment could reduce cash hand borrowing availability however would also reduce amount cash available operate business fund capital expenditures paid dividends stockholders among things please see note 12related party transactions notes consolidated financial statements offbalance sheet arrangements december 31 2019 offbalance sheet arrangements exception purchase obligations critical accounting policies preparation consolidated financial statements conformity gaap requires management select appropriate accounting principles available apply principles consistently make reasonable estimates assumptions affect revenue associated costs well reported amounts assets liabilities related disclosure contingent assets liabilities certain accounting policies involve judgments uncertainties evaluate estimates assumptions regular basis base respective estimates historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates assumptions used preparation consolidated financial statements consider following policies critical understanding judgments involved uncertainties could impact results operations financial condition cash flows revenue recognition revenue recognized control promised goods services transferred customers amount reflects consideration expect entitled exchange goods services payment terms services products generally range 30 days 120 days given shortterm nature service product offerings contracts significant financing component consideration receive generally fixed disclose value unsatisfied performance obligations contracts original expected duration one year less contracts customers shortterm nature fall within exemption significant unsatisfied performance obligations service revenue recognized time services performed rendered rates services typically priced per day per manhour similar basis generally perform services either direct service purchase orders master service agreements supplemented individual callout provisions customers contracted arrangements accrual recorded unbilled revenue earned yet invoiced revenue product sales generally recognized point time product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions contain postdelivery obligations tubulars segment cementing equipment segment customers requested store pipe connectors cementing products purchased us facilities recognize revenue “bill hold” sales following criteria met 1 substantive reason arrangement 2 product identified customer’s asset 3 product ready delivery customer 4 cannot use product direct another customer income taxes liability method used determining income tax provisions current deferred tax liabilities assets recorded accordance enacted tax laws rates method amounts deferred tax liabilities assets end period determined using tax rate expected effect taxes actually paid recovered valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances made judgments estimates regarding future taxable income ongoing prudent feasible tax planning strategies estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets historically changes valuation allowances caused major changes business cycle certain countries changes local country law ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions ficv operate approximately 50 countries many legal forms result subject jurisdiction numerous us foreign tax authorities well tax agreements treaties among governments operations different jurisdictions taxed various bases actual income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events amount timing character deductions permissible revenue recognition methods tax law sources character income tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact amount income taxes provide given year tax filings open tax periods subject audit tax authorities audits may result assessments additional taxes resolved either tax authorities courts assessments may occasionally based erroneous even arbitrary interpretations local tax law resolution situations inevitably includes degree uncertainty accordingly provide taxes amounts believe ultimately result proceedings resulting change tax liability dependent numerous factors including among others amount nature additional taxes potentially asserted local tax authorities willingness local tax authorities negotiate fair settlement administrative process impartiality local courts number countries business potential changes tax paid one country either produce fail produce offsetting tax change countries experience estimates assumptions used provide future tax assessments proven appropriate however past experience guide potential exists tax resulting resolution current potential future tax controversies may differ materially amount accrued addition aforementioned assessments received various tax authorities also provide taxes uncertain tax positions formal assessments received determination liabilities requires use estimates assumptions regarding future events established adjust amounts information available event occurs necessitating change reserves changes facts law judicial decisions regarding application existing law favorable audit outcome believe resolution tax matters material effect consolidated financial condition although resolution could material impact consolidated statements operations particular period effective tax rate period resolution occurs goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired option bypass qualitative assessment reporting unit period proceed directly performing quantitative goodwill impairment test qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount quantitative impairment test performed quantitative goodwill impairment test used identify existence impairment amount impairment loss test compares fair value reporting unit carrying amount including goodwill fair value reporting unit less carrying value impairment loss recorded based difference complete assessment goodwill impairment october 31 year october 31 2019 performed quantitative goodwill impairment test cementing equipment reporting unit fourth quarter 2019 market factors indicated downturn demand cementing equipment products services us land market slower uptake service offering international markets reduced management forecast reporting unit accordingly based refined outlook quantitative goodwill impairment test indicated fair value cementing equipment reporting unit less carrying value result fourth quarter 2019 recorded 1111 million impairment charge goodwill used income approach estimate fair value cementing equipment reporting unit also considered market approach validate results income approach estimates fair value discounting reporting unit’s estimated future cash flows using estimated discount rate expected return marketplace participant would required valuation date market approach includes use comparative multiples corroborate discounted cash flow results involves significant judgment selection appropriate peer group companies valuation multiples inputs used determination fair value generally level 3 inputs significant assumptions inherent income approach include estimated future net annual cash flows reporting unit discount rate selected assumptions used discounted cash flow projections using historical data supplemented current anticipated market conditions estimated growth rates estimates based upon assumptions believed reasonable however given inherent uncertainty determining assumptions underlying discounted cash flow analysis actual results may differ used valuation could result additional impairment charges future assuming assumptions inputs used discounted cash flow analysis held constant 50 basis point increase discount rate assumption would increased goodwill impairment charge approximately 100 million goodwill impairment recorded years ended december 31 2018 2017 december 31 2019 goodwill allocated reportable segments follows cementing equipment approximately 812 million trs approximately 187 million recent accounting pronouncements see note 1basis presentation significant accounting policies notes consolidated financial statements set forth part ii item 8 “financial statements supplementary data” heading “recent accounting pronouncements” included form 10k item 7aitem 7 management’s discussion analysis financial condition results operation following discussion analysis financial condition results operations read conjunction consolidated financial statements related notes thereto included part ii item 8 “financial statements supplementary data” included form 10k section contains forwardlooking statements based management’s current expectations estimates projections business operations involve risks uncertainties actual results may differ materially currently anticipated expressed forwardlooking statements various factors including described sections titled “cautionary note regarding forwardlooking statements” part item 1a “risk factors” elsewhere form 10k section form 10k generally discusses 2020 2019 items yeartoyear comparisons 2020 2019 discussions 2018 items yeartoyear comparisons 2019 2018 included form 10k found “management’s discussion analysis financial condition results operations” part ii item 7 annual report form 10k year ended december 31 2019 overview business global provider highly engineered tubular services tubular fabrication specialty well construction well intervention solutions oil gas industry business 80 years provide services products leading exploration production companies offshore onshore environments focus complex technically demanding wells conduct business three operating segments •tubular running services trs segment provides tubular running services globally internationally trs segment operates majority offshore oil gas markets also several onshore regions operations approximately 40 countries six continents us trs segment provides services active onshore oil gas drilling regions including permian basin eagle ford shale haynesville shale marcellus shale utica shale well us gulf mexico customers markets primarily large exploration production companies including international oil gas companies national oil gas companies major independents oilfield service companies •tubulars segment designs manufactures distributes connectors casing attachments large od heavy wall pipe additionally tubulars segment sells large od pipe originally manufactured various pipe mills plain end fully fabricated proprietary welded threaddirect connector solutions provides specialized fabrication welding services support offshore deepwater projects including drilling production risers flowlines pipeline end terminations well longlength tubular assemblies 400 feet length tubulars segment also specializes development manufacture supply proprietary drilling tool solutions focus improving drilling productivity eliminating mitigating traditional drilling operational risks •cementing equipment ce segment provides specialty equipment enhance safety efficiency rig operations provides specialized equipment services products utilized construction completion abandonment wellbore onshore offshore environments product portfolio includes casing accessories serve improve installation casing centralization wellbore zonal isolation well enhance cementing operations advance wiper plug float equipment technology abandonment solutions primarily used isolate portions wellbore setting barriers downhole allow rig evacuation case inclement weather maintenance work rig equipment squeeze cementing pressure testing within wellbore hydraulic fracturing temporary permanent abandonments offerings improve operational efficiencies limit nonproductive time unscheduled events encountered wellsite generate revenue majority services revenue derived primarily providing tubular services involves handling installation multiple joints pipe establish cased wellbore installation smaller diameter pipe inside cased wellbore also generate services revenue drilling tool offerings well construction well intervention services contrast products revenue derived sales certain products including large od pipe connectors large od pipe manufactured third parties directly external customers well construction well intervention product offerings addition customers typically reimburse us transportation costs incur connection transporting products equipment staging areas customers’ job sites outlook full impact covid19 outbreak resulting reduction oil sector activity continues evolve daily however ongoing mass vaccination programs beginning deployed expect market respond positively throughout 2021 covid19 responses normalized opec russia production cut agreements remained place demand expected continue draw stockpiles supply uncertain long depressed energy demand last anticipate international us offshore demand products services moderately increase current levels customer projects come back online 2021 exploration development spending continues shift toward offshore internationally focused projects us land activity anticipated moderate recovery coming year activity deepwater offshore market expected improve delayed projects resume new projects commence throughout 2021 covid19 increased challenges relating personnel logistics customer base accelerated efficiencybased integrated technology remove personnel rig site continue focus deploying differentiated technology across markets focus improving market share asset utilization profitability tubular running services segment expect international offshore markets see moderate growth line market trends us offshore remain stable us onshore operations rebound slightly 2020 demand oil improves business typically associated higher margin projects continue vehicle pull additional product lines revenue sources competitive pricing likely persist could serve limit growth however expect maintain market share gains previous years client base continues expand drilling contractors integrated service providers look differentiated technology efficiencybased solutions tubulars segment primarily driven specialized needs customers timing projects specifically north america also expect benefit increased sales select international markets expect drilling tools service line grow invest new technology continue gain share key markets similarly tubulars product line anticipated benefit greater demand 2021 seen 2020 offshore activity increases cementing equipment segment expected see incremental improvement yearoveryear offshore markets us onshore products services anticipated remain relatively flat relative market trends 2020 growth cementing equipment international markets expected see yearoveryear growth equipment deployed us offshore market expected see increase market share gains overall management anticipates industry economic impact covid19 opec’s actions continue impact operations 2021 degree remains uncertain continue efforts expand newer service product lines historically weighted us offshore market focusing international markets historically underrepresented cementing equipment tubulars segments also place strong focus operational efficiency gains prioritizing projects improve market share profitability move challenging market continuing see results profitability improvement project increased efficiencies reduced costs continue monitor market ensure right sized execute customer projects maximize profitability remain strong position financially significant cash balance relative debt evaluate operations use number financial operational measures routinely analyze evaluate performance business including revenue adjusted ebitda adjusted ebitda margin safety performance revenue analyze revenue growth comparing actual monthly revenue internal projections month assess performance also assess incremental changes monthly revenue across operating segments identify potential areas improvement adjusted ebitda adjusted ebitda margin define adjusted ebitda net income loss interest income net depreciation amortization income tax benefit expense asset impairments gain loss disposal assets foreign currency gain loss equitybased compensation unrealized realized gain loss effects tra noncash adjustments charges credits adjusted ebitda margin reflects adjusted ebitda percentage revenue review adjusted ebitda adjusted ebitda margin consolidated basis segment basis use adjusted ebitda adjusted ebitda margin assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization items outside control management team income tax foreign currency exchange rates charges outside normal course business adjusted ebitda adjusted ebitda margin limitations analytical tools considered alternative net income loss operating income loss cash flow operating activities measure financial performance presented accordance generally accepted accounting principles us “gaap” following table presents reconciliation adjusted ebitda adjusted ebitda margin net loss periods presented thousands 1 comprised equitybased compensation expense 2020 11010 2019 11280 2018 10621 mergers acquisition expense 2020 none 2019 none 2018 58 unrealized realized gains 2020 1378 2019 228 2018 1682 investigationrelated matters 2020 1868 2019 3838 2018 5454 adjustments 2020 616 2019 957 2018 none safety performance safety one primary core values see item 1 business heading “safety” included form 10k additional discussion results operations following table presents consolidated results periods presented thousands 1 please see note 11related party transactions notes consolidated financial statements discussion consolidated results operations year ended december 31 2020 compared year ended december 31 2019 revenue external customers excluding intersegment sales year ended december 31 2020 decreased 1896 million 327 3904 million 5799 million year ended december 31 2019 revenue decreased across segments result impact covid19 revenue segments discussed separately heading “operating segment results” cost revenue exclusive depreciation amortization cost revenue year ended december 31 2020 decreased 1049 million 252 3121 million 4170 million year ended december 31 2019 decrease primarily due lower activity levels across segments well due productivity cost efficiency actions general administrative expenses general administrative “ga” expenses year ended december 31 2020 decreased 381 million 316 823 million 1204 million year ended december 31 2019 due cost savings associated personnel reductions depreciation amortization depreciation amortization year ended december 31 2020 decreased 226 million 244 702 million 928 million year ended december 31 2019 result lower depreciable asset base goodwill impairment recognized goodwill impairment 571 million year ended december 31 2020 compared goodwill impairment 1111 million year ended december 31 2019 see note 1basis presentation significant accounting policies notes consolidated financial statements additional information severance charges credits net severance charges credits net year ended december 31 2020 decreased 174 million 330 million 504 million year ended december 31 2019 severance charges credits net year ended december 31 2020 consisted fixed asset impairment charges 157 million intangible asset impairments 47 million inventory impairments 04 million severance costs 123 million primarily driven covid19related activity disruptions customer spending cuts response falling oil prices severance charges credits net year ended december 31 2019 consisted fixed asset impairment charges 329 million intangible asset impairments 33 million inventory impairments 45 million severance costs 97 million primarily made conjunction business review conducted fourth quarter 2019 see note 17severance charges credits net notes consolidated financial statements additional information foreign currency gain loss foreign currency loss year ended december 31 2020 decreased 20 million 02 million 22 million year ended december 31 2019 change foreign currency results yearoveryear primarily driven strengthening us dollar current period compared prior year period particularly comparison norwegian krone income tax expense benefit income tax expense benefit year ended december 31 2020 changed 279 million benefit 41 million expense 238 million year ended december 31 2019 effective income tax rate 25 112 years ended december 31 2020 december 31 2019 respectively change due primarily significant tax expense recorded 2019 record valuation allowance certain indefinitelived intangibles operating segment results following table presents revenue adjusted ebitda segment thousands 1adjusted ebitda supplemental nongaap financial measure used management external users financial statements industry analysts investors lenders rating agencies reconciliation adjusted ebitda see “adjusted ebitda adjusted ebitda margin” 2our corporate component includes certain expenses attributable particular segment costs related support functions corporate executives year ended december 31 2020 compared year ended december 31 2019 tubular running services revenue trs segment 2697 million year ended december 31 2020 decrease 1306 million 326 compared 4003 million period 2019 decrease driven lower activity levels regions partially offset improved activity levels caribbean adjusted ebitda trs segment 222 million year ended december 31 2020 decrease 634 million 741 compared 856 million period 2019 segment results negatively impacted activity declines partially offset cost cutting measures tubulars revenue tubulars segment 537 million year ended december 31 2020 decrease 210 million 281 compared 747 million period 2019 primarily result lower drilling tools activity tubular sales gulf mexico partially offset increased demand drilling tools international markets adjusted ebitda tubulars segment 78 million year ended december 31 2020 decrease 38 million 328 compared 116 million period 2019 primarily driven lower drilling tools activity tubular sales gulf mexico cementing equipment revenue ce segment 670 million year ended december 31 2020 decrease 379 million 361 compared 1049 million period 2019 driven reductions us land offshore markets partially offset continued expansion international markets adjusted ebitda ce segment 108 million year ended december 31 2020 decrease 33 million 234 compared 141 million period 2019 primarily due reductions us land offshore markets partially offset continued expansion international markets corporate adjusted ebitda corporate loss 317 million year ended december 31 2020 favorable decrease 220 million 410 compared loss 537 million period 2019 primarily due cost cutting actions taken part profitability improvement program liquidity capital resources liquidity december 31 2020 cash equivalents shortterm investments 2118 million debt primary sources liquidity date cash flows operations primary uses capital organic growth capital expenditures acquisitions continually monitor potential capital sources including equity debt financing order meet investment target liquidity requirements covid19 pandemic significantly reduced economic activity levels across globe resulted lower demand oil natural gas well services products reduced demand services products may continue material adverse impact business results operations financial condition consideration risks undertaking additional measures protect liquidity measures include increased focus collection receivables enhanced customer credit review special measures reduce risks highcost inventory items enhanced cash reporting requirements total capital expenditures estimated approximately 25 million 2021 expect approximately 90 used purchase manufacture equipment approximately 10 property plant equipment inclusive capitalized enterprise resource planning software implementation costs actual amount capital expenditures manufacture equipment may fluctuate based market conditions years ended december 31 2020 2019 2018 purchases property plant equipment intangibles 285 million 369 million 565 million respectively funded internally generated sources believe cash hand cash flows operations sufficient fund capital expenditure liquidity requirements next twelve months board directors authorized program repurchase common stock time approximately 38502322 remained authorized repurchases december 31 2020 subject limitation set shareholder authorization repurchases common stock currently 10 common stock outstanding april 30 2020 inception program february 2020 december 31 2020 repurchased 570044 shares common stock total cost approximately 15 million program suspended second quarter 2020 due impacts covid19 commodity price declines revisited market conditions stabilize sufficiently provide greater clarity anticipated business results timing declaration amount payment dividends within discretion board managing directors subject approval board supervisory directors depend upon many factors including financial condition earnings capital requirements covenants associated certain debt service obligations legal requirements regulatory constraints industry practice ability access capital markets factors deemed relevant board managing directors board supervisory directors legal obligation pay dividend assurance able credit facility asset based revolving credit facility november 5 2018 ficv frank’s international llc blackhawk borrowers finv certain finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc guarantors entered fiveyear senior secured revolving credit facility “abl credit facility” jpmorgan chase bank na administrative agent “abl agent” financial institutions lenders total commitments 1000 million including 150 million available letters credit subject terms abl credit facility ability increase commitments 2000 million maximum amount company may borrow abl credit facility subject borrowing base based percentage certain eligible accounts receivable eligible inventory subject customary reserves adjustments obligations abl credit facility fully unconditionally guaranteed jointly severally finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc subject customary exceptions exclusions addition obligations abl credit facility secured first priority liens substantially assets property borrowers guarantors including pledges equity interests certain finv’s subsidiaries subject certain exceptions borrowings abl credit facility bear interest finv’s option either alternate base rate “abr” defined therein calculated greatest rate interest publicly quoted wall street journal “prime rate” subject increase decrease prime rate effective date change occurs ii federal funds effective rate subject 000 interest rate floor plus 050 iii onemonth adjusted libo rate defined therein plus 100 b adjusted libo rate defined therein plus case applicable margin applicable interest rate margin ranges 100 150 per annum abr loans 200 250 per annum eurodollar loans case based finv’s leverage ratio unused portion abl credit facility subject commitment fee varies 0250 0375 per annum according average daily unused commitments abl credit facility interest eurodollar loans payable end selected interest period less frequently quarterly interest abr loans payable monthly arrears abl credit facility contains various covenants restrictive provisions limit subject certain customary exceptions thresholds finv’s ability among things 1 enter asset sales 2 incur additional indebtedness 3 make investments acquisitions loans create incur liens 4 pay certain dividends make distributions 5 engage transactions affiliates abl credit facility also requires finv maintain minimum fixed charge coverage ratio 10 based ratio consolidated ebitda defined therein minus unfinanced capital expenditures b fixed charges defined therein either event default occurs abl facility ii availability abl credit facility falls least two consecutive calendar days greater 125 million b 15 lesser borrowing base aggregate commitments “fccr trigger event” accounts receivable received finv’s us subsidiaries parties abl credit facility deposited deposit accounts subject deposit control agreements favor abl agent fccr trigger event deposit accounts would subject “springing” cash dominion fccr trigger event company subject compliance fixed charge coverage ratio “springing” cash dominion default exists abl credit facility availability facility preceding thirty consecutive days equal least greater x 125 million 15 lesser borrowing base aggregate commitments finv fails perform obligations agreement results event default commitments abl credit facility could terminated outstanding borrowings abl credit facility may declared immediately due payable abl credit facility also contains cross default provisions apply finv’s indebtedness december 31 2020 finv borrowings outstanding abl credit facility letters credit outstanding 103 million availability 242 million cash flows operating investing financing activities cash flows provided used operations investing financing activities summarized thousands statements cash flows entities international operations use local currency functional currency exclude effects changes foreign currency exchange rates occur given year noncash changes result changes reflected certain accounts consolidated statements cash flows may reflect changes corresponding accounts consolidated balance sheets operating activities cash flow provided operating activities 397 million year ended december 31 2020 compared 270 million 2019 increase cash flow provided operating activities 2020 127 million compared 2019 primarily result favorable change accounts receivable 326 million partially offset unfavorable changes accounts payable accrued liabilities 129 million investing activities cash flow used investing activities 200 million year ended december 31 2020 compared 100 million year ended december 31 2019 increase cash used investing activities 100 million primarily result decreased net proceeds sale investments 260 million partially offset decreased purchases property plant equipment 85 million increased proceeds sale assets 75 million financing activities cash flow used financing activities 21 million year ended december 31 2020 compared 59 million year ended december 31 2019 decrease cash flow used financing activities 38 million due decreased repayment borrowings 54 million partially offset repurchases publicly announced share repurchase program 15 million year ended december 31 2020 contractual obligations party various contractual obligations portion obligations reflected financial statements operating leases obligations purchase obligations reflected balance sheet following summary contractual obligations december 31 2020 thousands 1 includes purchase commitments related connectors pipe inventory enter purchase commitments needed addition company issued purchase orders ordinary course business purchase goods services purchase orders enforceable legally binding however none company’s purchase orders call deliveries goods services time periods excess one year included table uncertain tax positions 272 million tax receivable agreement entered tra ficv mosing holdings connection ipo tra generally provides payment us mosing holdings 85 amount net cash savings us federal state local income tax franchise tax actually realize deemed realize certain circumstances periods ipo result tax basis increases resulting conversion ii imputed interest deemed paid us result additional tax basis arising payments tra retain benefit remaining 15 cash savings payments make tra increased accrued interest due date without extensions corresponding tax return date payment specified tra payments tra conditioned upon holder rights tra continued ownership interest finv february 17 2021 based best information available us mosing family collectively owns approximately 47 common shares payment obligations tra obligations ficv term tra commenced upon completion ipo continue tax benefits subject tra utilized expired unless exercise right terminate tra terminated due circumstances including breach material obligation thereunder certain mergers changes control make termination payment specified tra elect terminate tra early may sole discretion terminates early result breach would required make substantial immediate lumpsum payment equal present value hypothetical future payments could required paid tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize tax attributes subject tra determined applying discount rate equal longterm treasury rate effect applicable date plus 300 basis points early termination payment may made significantly advance actual realization future tax benefits termination payment relates addition payments due tra similarly accelerated following certain mergers changes control certain circumstances may required make payments tra entered mosing holdings circumstances payments associated actual cash savings recognize tax benefits resulting conversion would reduce actual tax benefit us conversion elect exercise sole right terminate tra early enter certain change control transactions may incur payment obligations prior time actually incur tax benefit circumstances would need pay amounts cash hand finance payments refrain incurring obligation including entering change control transaction based current liquidity expected ability access debt equity financing believe would able make early termination payment necessary payment could reduce cash hand borrowing availability however would also reduce amount cash available operate business fund capital expenditures paid dividends stockholders among things please see note 11related party transactions notes consolidated financial statements offbalance sheet arrangements december 31 2020 offbalance sheet arrangements exception purchase obligations critical accounting policies preparation consolidated financial statements conformity gaap requires management select appropriate accounting principles available apply principles consistently make reasonable estimates assumptions affect revenue associated costs well reported amounts assets liabilities related disclosure contingent assets liabilities certain accounting policies involve judgments uncertainties evaluate estimates assumptions regular basis base respective estimates historical experience various assumptions believe reasonable circumstances results form basis making judgments carrying values assets liabilities readily apparent sources actual results may differ estimates assumptions used preparation consolidated financial statements consider following policies critical understanding judgments involved uncertainties could impact results operations financial condition cash flows revenue recognition revenue recognized control promised goods services transferred customers amount reflects consideration expect entitled exchange goods services payment terms services products generally range 30 days 120 days given shortterm nature service product offerings contracts significant financing component consideration receive generally fixed disclose value unsatisfied performance obligations contracts original expected duration one year less contracts customers shortterm nature fall within exemption significant unsatisfied performance obligations service revenue recognized time services performed rendered rates services typically priced per day per manhour similar basis generally perform services either direct service purchase orders master service agreements supplemented individual callout provisions customers contracted arrangements accrual recorded unbilled revenue earned yet invoiced revenue product sales generally recognized point time product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions contain postdelivery obligations tubulars segment cementing equipment segment customers requested store pipe connectors cementing products purchased us facilities recognize revenue “bill hold” sales following criteria met 1 substantive reason arrangement 2 product identified customer’s asset 3 product ready delivery customer 4 cannot use product direct another customer income taxes liability method used determining income tax provisions current deferred tax liabilities assets recorded accordance enacted tax laws rates method amounts deferred tax liabilities assets end period determined using tax rate expected effect taxes actually paid recovered valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances made judgments estimates regarding future taxable income ongoing prudent feasible tax planning strategies estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets historically changes valuation allowances caused major changes business cycle certain countries changes local country law ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions ficv operate approximately 40 countries many legal forms result subject jurisdiction numerous us foreign tax authorities well tax agreements treaties among governments operations different jurisdictions taxed various bases actual income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events amount timing character deductions permissible revenue recognition methods tax law sources character income tax credits changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact amount income taxes provide given year tax filings open tax periods subject audit tax authorities audits may result assessments additional taxes resolved either tax authorities courts assessments may occasionally based erroneous even arbitrary interpretations local tax law resolution situations inevitably includes degree uncertainty accordingly provide taxes amounts believe ultimately result proceedings resulting change tax liability dependent numerous factors including among others amount nature additional taxes potentially asserted local tax authorities willingness local tax authorities negotiate fair settlement administrative process impartiality local courts number countries business potential changes tax paid one country either produce fail produce offsetting tax change countries experience estimates assumptions used provide future tax assessments proven appropriate however past experience guide potential exists tax resulting resolution current potential future tax controversies may differ materially amount accrued addition aforementioned assessments received various tax authorities also provide taxes uncertain tax positions formal assessments received determination liabilities requires use estimates assumptions regarding future events established adjust amounts information available event occurs necessitating change reserves changes facts law judicial decisions regarding application existing law favorable audit outcome believe resolution tax matters material effect consolidated financial condition although resolution could material impact consolidated statements operations particular period effective tax rate period resolution occurs goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired option bypass qualitative assessment reporting unit period proceed directly performing quantitative goodwill impairment test qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount quantitative impairment test performed quantitative goodwill impairment test used identify existence impairment amount impairment loss test compares fair value reporting unit carrying amount including goodwill fair value reporting unit less carrying value impairment loss recorded based difference complete assessment goodwill impairment october 31 year october 31 2019 performed quantitative goodwill impairment test cementing equipment reporting unit fourth quarter 2019 market factors indicated downturn demand cementing equipment products services us land market slower uptake service offering international markets reduced management forecast reporting unit accordingly based refined outlook quantitative goodwill impairment test indicated fair value cementing equipment reporting unit less carrying value result fourth quarter 2019 recorded 1111 million impairment charge goodwill first quarter 2020 result decline oil prices due ongoing covid19 pandemic organization petroleum exporting countries russia price war early 2020 identified triggering event indicated fair value goodwill within cementing equipment reporting unit less carrying value based results goodwill impairment test march 31 2020 recorded 571 million impairment charge goodwill included goodwill impairment consolidated statements operations goodwill impairment assessment october 31 2020 identify triggering event indicates fair values reporting units less carrying values used income approach estimate fair value cementing equipment reporting unit also considered market approach validate results income approach estimates fair value discounting reporting unit’s estimated future cash flows using estimated discount rate expected return marketplace participant would required valuation date market approach includes use comparative multiples corroborate discounted cash flow results involves significant judgment selection appropriate peer group companies valuation multiples inputs used determination fair value generally level 3 inputs significant assumptions inherent income approach include estimated future net annual cash flows reporting unit terminal growth rate discount rate selected assumptions used discounted cash flow projections using historical data supplemented current anticipated market conditions estimated growth rates estimates based upon assumptions believed reasonable however given inherent uncertainty determining assumptions underlying discounted cash flow analysis actual results may differ used valuation could result additional impairment charges future assuming assumptions inputs used discounted cash flow analysis held constant 50 basis point increase discount rate assumption would increased 2020 goodwill impairment charge approximately 43 million goodwill impairment recorded year ended december 31 2018 december 31 2020 goodwill allocated reportable segments follows cementing equipment approximately 241 million trs approximately 187 million recent accounting pronouncements see note 1basis presentation significant accounting policies notes consolidated financial statements set forth part ii item 8 “financial statements supplementary data” heading “recent accounting pronouncements” included form 10k item 7a item 7a quantitative qualitative disclosures market risk exposed certain market risks inherent financial instruments arise changes foreign currency exchange rates interest rates discussion market risk exposure financial instruments presented primary objective following information provide forwardlooking quantitative qualitative information potential exposure market risks disclosures meant precise indicators expected future losses gains rather indicators reasonably possible losses gains forwardlooking information provides indicators view manage ongoing market risk exposures foreign currency exchange rates operate virtually every oil natural gas exploration production region world parts world currency primary economic environment us dollar use us dollar functional currency parts world europe norway venezuela brazil conduct business currencies us dollar functional currency applicable local currency assets liabilities entities functional currency local currency translated us dollars using exchange rates effect balance sheet date resulting translation adjustments reflected accumulated comprehensive income loss shareholders’ equity section consolidated balance sheets portion net assets impacted changes foreign currencies relation us dollar recorded 112 million adjustment decrease equity account year ended december 31 2013 reflect change us dollar various foreign currencies year ended december 31 2013 us dollarequivalent basis approximately 21 revenue represented currencies us dollar however single foreign currency poses primary risk us hypothetical 10 decrease exchange rates foreign currencies portion revenues denominated would result 13 decrease overall revenues year ended december 31 2013 february 2013 venezuelan government announced devaluation bolivar fuerte “bolivar” resulting exchange rate declining 43 63 bolivars us dollar result devaluation recorded foreign currency loss 18 million first quarter 2013 related remeasurement bolivardenominated net monetary assets venezuelan operations date devaluation march 2013 venezuelan government announced creation new auctionbased foreign exchange rate market program referred sicad december 2013 regulation created sicad program amended require central bank venezuela include weekly average exchange rate implied transactions settled via sicad auction program recent transactions executed sicad auctions bolivar us dollar exchange rate 114 auction participants limited import transactions specific sectors products determined venezuelan government december 31 2013 utilized sicad auction program exposed us dollar importation transactions continue monitor situation future developments impact venezuelan operations december 31 2013 approximately 62 million net monetary us dollar liabilities venezuela official exchange rate 63 depending transparency liquidity foreign exchange rate market may incur future charge income statement example required apply exchange rate 114 bolivars us dollar would result charge approximately 28 million interest rate risk december 31 2013 outstanding balances credit facilities borrow credit facilities future exposed changes interest rates floating rate borrowings credit facilities although currently utilize interest rate derivative instruments reduce interest rate exposure may future customer credit risk financial instruments potentially subject us concentrations credit risk trade receivables extend credit customers parties normal course business established various procedures manage credit exposure including credit evaluations maintaining allowance doubtful accounts also exposed credit risk customers concentrated oil natural gas industry concentration customers may impact overall exposure credit risk either positively negatively customers may similarly affected changes economic industry conditions including sensitivity commodity prices current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels however prolonged increase decrease oil natural gas prices affects levels exploration development production activity well entire health oil natural gas industry therefore negatively impact spending customers item 8item 7a quantitative qualitative disclosures market risk exposed certain market risks inherent financial instruments arise changes foreign currency exchange rates interest rates discussion market risk exposure financial instruments presented primary objective following information provide forwardlooking quantitative qualitative information potential exposure market risks disclosures meant precise indicators expected future losses gains rather indicators reasonably possible losses gains forwardlooking information provides indicators view manage ongoing market risk exposures foreign currency exchange rates operate virtually every oil natural gas exploration production region world parts world currency primary economic environment us dollar use us dollar functional currency parts world europe norway canada venezuela brazil conduct business currencies us dollar functional currency applicable local currency assets liabilities entities functional currency local currency translated us dollars using exchange rates effect balance sheet date resulting translation adjustments reflected accumulated comprehensive income loss shareholders’ equity section consolidated balance sheets portion net assets impacted changes foreign currencies relation us dollar year ended december 31 2014 us dollarequivalent basis approximately 18 revenue represented currencies us dollar however single foreign currency poses primary risk us hypothetical 10 decrease exchange rates foreign currencies portion revenues denominated would result 17 decrease overall revenues year ended december 31 2014 please refer note 1 consolidated financial statements discussion exchange rates relates operations venezuela december 31 2014 approximately 19 million net monetary assets denominated bolivars using sicad ii rate event devaluation current exchange mechanism venezuela new exchange mechanism might emerge financial reporting purposes would result recording additional devaluation charge consolidated statement income interest rate risk december 31 2014 outstanding balance credit facility borrow credit facility future exposed changes interest rates floating rate borrowings credit facility although currently utilize interest rate derivative instruments reduce interest rate exposure may future customer credit risk financial instruments potentially subject us concentrations credit risk trade receivables extend credit customers parties normal course business established various procedures manage credit exposure including credit evaluations maintaining allowance doubtful accounts also exposed credit risk customers concentrated oil natural gas industry concentration customers may impact overall exposure credit risk either positively negatively customers may similarly affected changes economic industry conditions including sensitivity commodity prices current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels however prolonged increase decrease oil natural gas prices affects levels exploration development production activity well entire health oil natural gas industry therefore negatively impact spending customers item 8item 7a quantitative qualitative disclosures market risk exposed certain market risks inherent financial instruments arise changes foreign currency exchange rates interest rates discussion market risk exposure financial instruments presented primary objective following information provide forwardlooking quantitative qualitative information potential exposure market risks disclosures meant precise indicators expected future losses gains rather indicators reasonably possible losses gains forwardlooking information provides indicators view manage ongoing market risk exposures foreign currency exchange rates operate virtually every oil natural gas exploration production region world parts world currency primary economic environment us dollar use us dollar functional currency parts world europe norway canada venezuela brazil conduct business currencies us dollar functional currency applicable local currency assets liabilities entities functional currency local currency translated us dollars using exchange rates effect balance sheet date resulting translation adjustments reflected accumulated comprehensive income loss shareholders’ equity section consolidated balance sheets portion net assets impacted changes foreign currencies relation us dollar year ended december 31 2015 us dollarequivalent basis approximately 20 revenue represented currencies us dollar however single foreign currency poses primary risk us hypothetical 10 decrease exchange rates foreign currencies portion revenues denominated would result 19 decrease overall revenues year ended december 31 2015 december 2015 began entering shortduration foreign currency forward contracts use instruments mitigate exposure nonlocal currency operating working capital also exposed market risk forward contracts related potential nonperformance counterparty policy enter derivative contracts counterparties creditworthy institutions account derivative activities accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements income december 31 2015 following foreign currency derivative contracts outstanding based derivative contracts place december 31 2015 simultaneous 5 devaluation canadian dollar euro norwegian kroner pound sterling compared us dollar would result 02 million increase market value forward contracts 2014 venezuela enacted certain changes foreign exchange system addition official rate 63 venezuelan bolivar fuertes bolivars per us dollar two legal exchange rates may obtained via different exchange rate mechanisms changes included expansion known sicad auction rate introduction sicad ii auction process february 10 2015 venezuelan government announced transactions sale purchase foreign currency sicad ii exchange system would longer available created new open market foreign exchange system simadi 2015 concluded appropriate apply simadi exchange rate believed rate best represented economics business activity venezuela december 31 2015 approximately 02 million net monetary assets denominated bolivars using simadi rate approximately 1987 bolivars us dollar event devaluation current exchange mechanism venezuela new exchange mechanism might emerge financial reporting purposes would result recording additional devaluation charge consolidated statements income interest rate risk december 31 2015 outstanding funded debt balance credit facility borrow credit facility future exposed changes interest rates floating rate borrowings credit facility although currently utilize interest rate derivative instruments reduce interest rate exposure may future customer credit risk financial instruments potentially subject us concentrations credit risk trade receivables extend credit customers parties normal course business established various procedures manage credit exposure including credit evaluations maintaining allowance doubtful accounts also exposed credit risk customers concentrated oil natural gas industry concentration customers may impact overall exposure credit risk either positively negatively customers may similarly affected changes economic industry conditions including sensitivity commodity prices current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels however prolonged increase decrease oil natural gas prices affects levels exploration development production activity well entire health oil natural gas industry therefore negatively impact spending customers item 8item 7a quantitative qualitative disclosures market risk exposed certain market risks inherent financial instruments arise changes foreign currency exchange rates interest rates discussion market risk exposure financial instruments presented primary objective following information provide forwardlooking quantitative qualitative information potential exposure market risks disclosures meant precise indicators expected future losses gains rather indicators reasonably possible losses gains forwardlooking information provides indicators view manage ongoing market risk exposures foreign currency exchange rates operate virtually every oil natural gas exploration production region world parts world currency primary economic environment us dollar use us dollar functional currency parts world europe norway africa brazil conduct business currencies us dollar functional currency applicable local currency assets liabilities entities functional currency local currency translated us dollars using exchange rates effect balance sheet date resulting translation adjustments reflected accumulated comprehensive income loss shareholders’ equity section consolidated balance sheets portion net assets impacted changes foreign currencies relation us dollar year ended december 31 2016 us dollarequivalent basis approximately 25 revenue represented currencies us dollar however single foreign currency poses primary risk us hypothetical 10 decrease exchange rates foreign currencies portion revenues denominated would result 23 decrease overall revenues year ended december 31 2016 december 2015 began entering shortduration foreign currency forward contracts use instruments mitigate exposure nonlocal currency operating working capital also exposed market risk forward contracts related potential nonperformance counterparty policy enter derivative contracts counterparties creditworthy institutions account derivative activities accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations december 31 2016 2015 following foreign currency derivative contracts outstanding us dollars based derivative contracts place december 31 2016 simultaneous 10 devaluation canadian dollar euro norwegian kroner pound sterling compared us dollar would result 13 million increase market value forward contracts february 2015 venezuelan government created new open market foreign exchange system marginal currency system simadi third system threetier exchange control mechanism simadi floating market rate conversion venezuelan bolivar fuertes bolivars us dollars based supply demand threetier exchange rate mechanisms included following national center foreign commerce official rate 63 bolivars per us dollar remained unchanged ii sicad continued hold periodic auctions specific sectors economy iii simadi march 9 2016 central bank venezuela issued exchange agreement 35 changed threetiered official currency control system dual foreign exchange system preferential exchange rate called dipro official rate 10 bolivars us dollar replaces official rate 63 bolivars per us dollar dipro available essential imports transactions subject dicom rate replacement simadi december 31 2016 applied dicom exchange rate believed rate best represented economics business activity venezuela december 31 2016 approximately 62246 net monetary assets denominated bolivars using dicom rate approximately 67376 bolivars us dollar event devaluation current exchange mechanism venezuela new exchange mechanism might emerge financial reporting purposes would result recording devaluation charge condensed consolidated statements operations interest rate risk december 31 2016 outstanding funded debt balance credit facility borrow credit facility future exposed changes interest rates floating rate borrowings credit facility although currently utilize interest rate derivative instruments reduce interest rate exposure may future customer credit risk financial instruments potentially subject us concentrations credit risk trade receivables extend credit customers parties normal course business international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds operate 60 countries accounts receivables spread many countries customers december 31 2016 two customers venezuela angola accounted approximately 14 gross accounts receivables balance receivables venezuela angola denominated us dollars experienced payment delays national oil company customer venezuela notified six month delay payment national oil company angola undergoing restructuring receivables disputed historically material writeoffs relating customers maintain allowance uncollectible accounts receivables based expected collectability ongoing credit evaluations customers’ financial condition financial condition customers diminish resulting impairment ability make payments adjustments allowance may required due uncertainty collection national oil company customer venezuela bankrupt customer nigeria recorded allowance 113 million 2016 first quarter 2016 also made decision curtail operations venezuela operations angola significantly due drop oil prices also exposed credit risk customers concentrated oil natural gas industry concentration customers may impact overall exposure credit risk either positively negatively customers may similarly affected changes economic industry conditions including sensitivity commodity prices current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels however prolonged increase decrease oil natural gas prices affects levels exploration development production activity well entire health oil natural gas industry therefore negatively impact spending customers item 8item 7a quantitative qualitative disclosures market risk exposed certain market risks inherent financial instruments arise changes foreign currency exchange rates interest rates discussion market risk exposure financial instruments presented primary objective following information provide forwardlooking quantitative qualitative information potential exposure market risks disclosures meant precise indicators expected future losses gains rather indicators reasonably possible losses gains forwardlooking information provides indicators view manage ongoing market risk exposures foreign currency exchange rates operate virtually every oil natural gas exploration production region world parts world currency primary economic environment us dollar use us dollar functional currency parts world europe norway africa brazil conduct business currencies us dollar functional currency applicable local currency assets liabilities entities functional currency local currency translated us dollars using exchange rates effect balance sheet date resulting translation adjustments reflected accumulated comprehensive income loss shareholders’ equity section consolidated balance sheets portion net assets impacted changes foreign currencies relation us dollar year ended december 31 2017 us dollarequivalent basis approximately 25 revenue represented currencies us dollar however single foreign currency poses primary risk us hypothetical 10 decrease exchange rates foreign currencies portion revenues denominated would result 22 decrease overall revenues year ended december 31 2017 enter shortduration foreign currency forward contracts mitigate exposure nonlocal currency operating working capital also exposed market risk forward contracts related potential nonperformance counterparty policy enter derivative contracts counterparties creditworthy institutions account derivative activities accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations december 31 2017 2016 following foreign currency derivative contracts outstanding us dollars thousands based derivative contracts place december 31 2017 simultaneous 10 weakening us dollar compared canadian dollar euro norwegian krone pound sterling would result 26 million decrease market value forward contracts interest rate risk december 31 2017 outstanding funded debt balance credit facility borrow credit facility future exposed changes interest rates floating rate borrowings credit facility although currently utilize interest rate derivative instruments reduce interest rate exposure may future customer credit risk financial instruments potentially subject us concentrations credit risk trade receivables extend credit customers parties normal course business international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds operate approximately 50 countries result accounts receivables spread many countries customers also exposed credit risk customers concentrated oil natural gas industry concentration customers may impact overall exposure credit risk either positively negatively customers may similarly affected changes economic industry conditions including sensitivity commodity prices current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels however prolonged increase decrease oil natural gas prices affects levels exploration development production activity well entire health oil natural gas industry therefore negatively impact spending customers item 8item 7a quantitative qualitative disclosures market risk exposed certain market risks inherent financial instruments arise changes foreign currency exchange rates interest rates discussion market risk exposure financial instruments presented primary objective following information provide forwardlooking quantitative qualitative information potential exposure market risks disclosures meant precise indicators expected future losses gains rather indicators reasonably possible losses gains forwardlooking information provides indicators view manage ongoing market risk exposures foreign currency exchange rates operate virtually every oil natural gas exploration production region world parts world currency primary economic environment us dollar use us dollar functional currency parts world europe norway africa brazil conduct business currencies us dollar functional currency applicable local currency assets liabilities entities functional currency local currency translated us dollars using exchange rates effect balance sheet date resulting translation adjustments reflected accumulated comprehensive income loss shareholders’ equity section consolidated balance sheets portion net assets impacted changes foreign currencies relation us dollar year ended december 31 2018 us dollarequivalent basis approximately 24 revenue represented currencies us dollar however single foreign currency poses primary risk us hypothetical 10 decrease exchange rates foreign currencies portion revenues denominated would result 22 decrease overall revenues year ended december 31 2018 enter shortduration foreign currency forward contracts mitigate exposure nonlocal currency operating working capital also exposed market risk forward contracts related potential nonperformance counterparty policy enter derivative contracts counterparties creditworthy institutions account derivative activities accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations december 31 2018 2017 following foreign currency derivative contracts outstanding us dollars thousands based derivative contracts place december 31 2018 simultaneous 10 weakening us dollar compared canadian dollar euro norwegian krone pound sterling would result 35 million decrease market value forward contracts interest rate risk december 31 2018 outstanding funded debt balance new abl credit facility borrow new abl credit facility future exposed changes interest rates floating rate borrowings new abl credit facility although currently utilize interest rate derivative instruments reduce interest rate exposure may future customer credit risk financial instruments potentially subject us concentrations credit risk trade receivables extend credit customers parties normal course business international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds operate approximately 50 countries result accounts receivables spread many countries customers also exposed credit risk customers concentrated oil natural gas industry concentration customers may impact overall exposure credit risk either positively negatively customers may similarly affected changes economic industry conditions including sensitivity commodity prices current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels however prolonged increase decrease oil natural gas prices affects levels exploration development production activity well entire health oil natural gas industry therefore negatively impact spending customers item 8item 7a quantitative qualitative disclosures market risk exposed certain market risks inherent financial instruments arise changes foreign currency exchange rates interest rates discussion market risk exposure financial instruments presented primary objective following information provide forwardlooking quantitative qualitative information potential exposure market risks disclosures meant precise indicators expected future losses gains rather indicators reasonably possible losses gains forwardlooking information provides indicators view manage ongoing market risk exposures foreign currency exchange rates operate virtually every oil natural gas exploration production region world parts world currency primary economic environment us dollar use us dollar functional currency parts world europe africa brazil conduct business currencies us dollar functional currency applicable local currency assets liabilities entities functional currency local currency translated us dollars using exchange rates effect balance sheet date resulting translation adjustments reflected accumulated comprehensive income loss shareholders’ equity section consolidated balance sheets portion net assets impacted changes foreign currencies relation us dollar year ended december 31 2019 us dollarequivalent basis approximately 23 revenue represented currencies us dollar however single nonus currency poses primary risk us hypothetical 10 decrease exchange rates foreign currencies portion revenue denominated would result 21 decrease overall revenue year ended december 31 2019 enter shortduration foreign currency forward contracts mitigate exposure nonlocal currency operating working capital also exposed market risk forward contracts related potential nonperformance counterparty policy enter derivative contracts counterparties creditworthy institutions account derivative activities accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations december 31 2019 2018 following foreign currency derivative contracts outstanding us dollars thousands based derivative contracts place december 31 2019 simultaneous 10 weakening us dollar compared canadian dollar euro norwegian krone pound sterling would result 39 million decrease market value forward contracts interest rate risk december 31 2019 outstanding funded debt balance abl credit facility borrow abl credit facility future exposed changes interest rates floating rate borrowings abl credit facility although currently utilize interest rate derivative instruments reduce interest rate exposure may future customer credit risk financial instruments potentially subject us concentrations credit risk trade receivables extend credit customers parties normal course business international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds operate approximately 50 countries result accounts receivables spread many countries customers also exposed credit risk customers concentrated oil natural gas industry concentration customers may impact overall exposure credit risk either positively negatively customers may similarly affected changes economic industry conditions including sensitivity commodity prices current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels however prolonged increase decrease oil natural gas prices affects levels exploration development production activity well entire health oil natural gas industry therefore negatively impact spending customers item 8item 7a quantitative qualitative disclosures market risk exposed certain market risks inherent financial instruments arising changes foreign currency exchange rates interest rates discussion market risk exposure financial instruments presented primary objective following information provide forwardlooking quantitative qualitative information potential exposure market risks disclosures meant precise indicators expected future losses gains rather indicators reasonably possible losses gains forwardlooking information provides indicators view manage ongoing market risk exposures foreign currency exchange rates operate virtually every oil natural gas exploration production region world parts world currency primary economic environment us dollar use us dollar functional currency parts world europe africa brazil conduct business currencies us dollar functional currency applicable local currency assets liabilities entities functional currency local currency translated us dollars using exchange rates effect balance sheet date resulting translation adjustments reflected accumulated comprehensive income loss shareholders’ equity section consolidated balance sheets portion net assets impacted changes foreign currencies relation us dollar year ended december 31 2020 us dollarequivalent basis approximately 30 revenue represented currencies us dollar however single nonus currency poses primary risk us hypothetical 10 decrease exchange rates foreign currencies portion revenue denominated would result 27 decrease overall revenue year ended december 31 2020 time enter shortduration foreign currency forward contracts mitigate exposure nonlocal currency operating working capital also exposed market risk forward contracts related potential nonperformance counterparty policy enter derivative contracts counterparties creditworthy institutions account derivative activities accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations foreign currency derivative contracts outstanding december 31 2020 december 31 2019 following foreign currency derivative contracts outstanding us dollars thousands interest rate risk december 31 2020 outstanding funded debt balance abl credit facility borrow abl credit facility future exposed changes interest rates floating rate borrowings abl credit facility although currently utilize interest rate derivative instruments reduce interest rate exposure may future customer credit risk financial instruments potentially subject us concentrations credit risk trade receivables extend credit customers parties normal course business international sales also present various risks including governmental activities may limit disrupt markets restrict movement funds operate approximately 40 countries result accounts receivables spread many countries customers december 31 2020 35 11 net trade receivables customers united states saudi arabia respectively december 31 2019 42 net trade receivables customers united states country accounted 10 net trade receivables dates also exposed credit risk customers concentrated oil natural gas industry concentration customers may impact overall exposure credit risk either positively negatively customers may similarly affected changes economic industry conditions including sensitivity commodity prices current energy prices important contributors positive cash flow customers expectations future prices price volatility generally important determining future spending levels however prolonged increase decrease oil natural gas prices affects levels exploration development production activity well entire health oil natural gas industry therefore negatively impact spending customers item 8 item 8 financial statements report independent registered public accounting firm board directors stockholders frank’s international nv opinion accompanying consolidated balance sheets related consolidated statements income comprehensive income stockholders’ equity cash flows present fairly material respects financial position frank’s international nv “company” december 31 2013 2012 results operations cash flows three years period ended december 31 2013 conformity accounting principles generally accepted united states america financial statements responsibility company’s management responsibility express opinion financial statements based audits conducted audits statements accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits provide reasonable basis opinion pricewaterhousecoopers llp houston texas march 4 2014 accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements frank’s international nv notes consolidated financial statements note 1basis presentation significant accounting policies nature business frank’s international global provider highly engineered tubular services oil gas industry frank’s international provides services leading exploration production companies offshore onshore environments focus complex technically demanding wells basis presentation consolidated financial statements franks international nv finv limited liability company organized laws netherlands years ended december 31 2013 2012 2011 include activities franks international cv ficv wholly owned subsidiaries collectively company us intercompany accounts transactions eliminated purposes preparing consolidated financial statements accompanying consolidated financial statements related financial information prepared accordance generally accepted accounting principles united states america gaap opinion management consolidated financial statements reflect adjustments reclassifications consisting solely normal accruals necessary fair presentation financial results periods presented consolidated financial statements prepared historical cost basis using united states dollar reporting currency reclassifications reporting periods prior fourth quarter fiscal 2013 certain costs equipment rentals services product sales misclassified two line items impact previously reported operating income continuing operations net income earnings per share cash flow corrections made relevant periods presented financial statements included herein corrections resulted reductions cost equipment rentals services corresponding increases cost products 122 million 79 million years ended december 31 2012 2011 respectively determined previously reported december 31 2012 2011 property plant equipment balances us services tubular sales segments note 19 misclassified corrections made relevant periods presented financial statements included herein corrections resulted increases tubular sales balance 587 million 249 million december 31 2012 2011 respectively corresponding decrease us services segment effect impairment testing goodwill evaluated concluded identified amounts material previously filed annual financial statements effects prior periods material recast historical financial presentation reorganization discussed reflected retroactively historical cost basis periods presented reorganization entities common control impact reorganization combine previously separate entities single capital structure facilitate initial public offering ipo finv presentation reflects consolidation previously separate entities finv 257 noncontrolling interest franks international cv ficv issuance series preferred stock par value €001 per share preferred stock outstanding period presentation allows comparability prior periods including earnings per share eps calculations frank’s international nv notes consolidated financial statements initial public offering reorganization completed ipo august 14 2013 sold 34500000 shares common stock including 4500000 shares common stock pursuant underwriters option purchase additional shares offering price 2200 per share deducting underwriting discounts commissions offering expenses payable us received net proceeds approximately 7115 million used portion proceeds ipo repay full outstanding notes payable fww bv “fww” entity owned mosing family expect use remainder general corporate purposes infrastructure capital prior completion ipo engaged corporate reorganization august 1 2013 franks international inc fii franks casing crew rental tools inc fcc franks tong service inc fts subsidiaries mosing holdings inc “mosing holdings” converted corporations limited liability companies august 14 2013 immediately prior completion ipo mosing holdings contributed outstanding membership interests fii fcc fts ficv exchange 52976000 shares preferred stock 257 limited partnership interest ficv excluded contribution certain assets generated de minimus amount revenue including aircraft real estate life insurance policies retained mosing holdings finv contributed foreign operating subsidiaries portion proceeds ipo ficv following reorganization completion ipo finvs sole material asset consists ownership 742 limited partnership interest 01 general partnership interest ficv mosing holdings holds remaining 257 limited partnership interest ficv transactions collectively referred “reorganization” mosing holdings right redeem portion preferred stock cash equal par value share preferred stock redeemed plus accrued unpaid dividends thereon simultaneously proportionate amount limited partner interests ficv would exchanged finv common stock exchange preferred stock redeemed noncontrolling interest reduced outstanding shares common stock increase tax receivable agreement august 14 2013 connection completion ipo entered tax receivable agreement “tra” ficv mosing holdings tra generally provides payment us mosing holdings 85 amount benefits payments us federal state local income tax franchise tax periods ipo result increases tax basis certain tax benefits resulting exchanges including tax benefits attributable payments tra retain remaining 15 cash savings realized income tax savings payment obligations tra obligations ficv term tra continues tax benefits utilized expired unless exercise right terminate tra december 31 2013 exchanges tra elect terminate tra early required make immediate payment equal present value anticipated future tax benefits subject tra addition payments due tra similarly accelerated following certain mergers changes control venezuelan currency devaluation february 2013 venezuelan government announced devaluation bolivar fuerte bolivar resulting exchange rate declining 43 63 bolivars us dollar result devaluation recorded foreign currency loss 18 million three months ended march 31 2013 related remeasurement bolivar denominated net monetary assets venezuelan operations date devaluation future periods foreign exchange gains losses arising due appreciation depreciation bolivar versus us dollar result benefits charges statements income based value bolivardenominated net monetary assets time exchange rate changes become effective frank’s international nv notes consolidated financial statements significant accounting policies accounting estimates preparation consolidated financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date consolidated financial statements reported amounts revenues expenses reporting period actual results could differ estimates accounts receivable establish allowance doubtful accounts based various factors including historical experience current aging status customer accounts financial condition customers business political environment customers operate provisions doubtful accounts recorded becomes probable customer accounts uncollectible cash equivalents consider highly liquid financial instruments purchased original maturity three months less cash equivalents throughout year cash balances excess federally insured limits deposited various financial institutions experienced losses accounts believe exposed significant credit risk cash equivalents comprehensive income accounting standards reporting comprehensive income require certain items including foreign currency translation adjustments unrealized gains losses marketable securities presented components comprehensive income cumulative amounts recognized us standards reflected consolidated balance sheet accumulated comprehensive income component shareholders’ equity contingencies certain conditions may exist date consolidated financial statements issued may result loss us resolved one future events occur fail occur management input legal counsel assesses contingent liabilities assessment inherently involves exercise judgment assessing loss contingencies related legal proceedings pending us unasserted claims may result proceedings management input legal counsel evaluates perceived merits legal proceedings unasserted claims well perceived merits amount relief sought expected sought therein assessment contingency indicates probable material loss incurred amount liability estimated liability would accrued consolidated financial statements assessment indicates potentially material loss contingency probable reasonably possible probable cannot estimated nature contingent liability together estimate range possible loss determinable material disclosed loss contingencies considered remote generally disclosed unless involve guarantees case guarantees would disclosed frank’s international nv notes consolidated financial statements deferred financing costs deferred financing costs consist fees expenses paid connection closing credit facilities capitalized time payment deferred financing costs amortized using straight line method term credit facility earnings per share basic earnings per share excludes dilution computed dividing income available common shareholders weighted average number common shares outstanding period diluted earnings per share reflects potential dilution could occur securities issue common stock exercised converted common stock fair value financial instruments financial instruments consist primarily cash equivalents trade accounts receivable availableforsale securities obligations trade accounts payable short longterm debt due shortterm nature carrying values cash equivalents trade accounts receivable trade accounts payable approximate fair value refer note 10 fair values availableforsale securities obligations foreign currency translations transactions results operations foreign subsidiaries functional currencies us dollar translated using average exchange rates period assets liabilities foreign subsidiaries translated using exchange rates effect balance sheet dates gains losses resulting translations included accumulated comprehensive income within stockholders’ equity foreign subsidiaries designated us dollar functional currency gains losses resulting balance sheet remeasurement foreign operations included consolidated statements income incurred gains losses resulting transactions denominated foreign currency also included consolidated statements income incurred goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount two step impairment test performed first fair value reporting unit compared carrying value determine whether indication impairment exists impairment indicated fair value reporting unit’s goodwill determined allocating unit’s fair value assets liabilities including unrecognized intangible assets reporting unit acquired business combination amount impairment goodwill measured excess carrying value fair value complete assessment goodwill impairment december 31 year impairment recorded years ended december 31 2013 2012 2011 goodwill allocated segments follows us services approximately 113 million tubular sales approximately 24 million goodwill tubular sales segment decreased 15 million year ended december 31 2013 due sale component segment inputs used determination fair value generally level 3 inputs see notes 3 10 notes consolidated financial statements discussion sale fair value measures respectively impairment longlived assets longlived assets include property plant equipment certain assets held used us reviewed events changes circumstances indicate carrying amount assets may recoverable based estimated future cash flows assessment indicates carrying values frank’s international nv notes consolidated financial statements recoverable determined based undiscounted cash flows remaining useful lives impairment loss recognized based fair value asset income taxes operate many legal forms approximately 60 countries result subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact upon amount income taxes provide given year prior reorganization fii fcc fts classified scorporations us income tax purposes therefore subject federal state income taxation following reorganization ficv taxed partnership us federal income tax purposes domestic subsidiaries classified limited liability companies subject federal state income taxation partner ficv subject us taxation allocable share us taxable income noncontrolling member pay taxes respect allocable share us taxable income provide income tax expense based liability method accounting income taxes based authoritative accounting guidance deferred tax assets liabilities recorded based upon temporary differences tax basis assets liabilities carrying values financial reporting purposes measured using enacted marginal rates laws effect differences expected reverse deferred tax expense benefit result changes deferred tax assets liabilities period impact uncertain tax position taken expected taken income tax return recognized financial statements largest amount likely sustained upon examination relevant taxing authority intangible assets intangible assets comprised licenses customer relationships tradenames identifiable intangible assets amortized using straightline method estimated useful lives assets evaluate impairment intangible assets individual basis whenever circumstances indicate carrying value may recoverable intangible assets deemed impaired written fair value discounted cash flows available comparable market values inventories stated lower cost primarily average cost market value work progress finished goods include cost materials labor manufacturing overhead inventory placed service either capitalized included equipment expensed based upon capitalization policies marketable securities marketable securities certificates deposit debt securities publicly traded equity securities indirect result strategic investments classified availableforsale reported fair value see note 7other assets marketable securities held within rabbi trust purpose paying future executive deferred compensation benefit obligations unrealized gains losses reported component stockholders’ equity realized gains losses marketable securities included income consolidated statements income net realized impairment loss reduce investment’s carrying amount fair market value recognized income decline fair market value individual security cost carrying value frank’s international nv notes consolidated financial statements determined temporary realized gains investments 39 million 21 million years ended december 31 2013 2012 respectively realized losses investments 07 million year ended december 31 2011 property plant equipment property plant equipment stated cost less accumulated depreciation expenditures significant improvements betterments capitalized extend useful life asset expenditures minor improvements routine repairs maintenance improve extend life related assets expensed incurred properties equipment sold retired otherwise disposed related cost accumulated depreciation removed books resulting gain loss recognized consolidated statements income depreciation fixed assets computed using straightline method estimated useful lives individual assets leasehold improvements amortized straightline basis shorter estimated useful lives lease term depreciation fixed assets recorded capital lease agreements included depreciation expense revenue recognition revenue recognized following criteria met 1 evidence arrangement exists 2 delivery acceptance customer occurred 3 price customer fixed determinable 4 collectability reasonably assured follows services revenue provide tubular services clients oil gas industry perform services either direct service purchase orders master service agreements service revenue recognized services performed rendered rental revenue design manufacture suite highly technical equipment products rent customers connection providing services including highend proprietary tubular handling equipment rent products either direct rental agreements customers rental agreements place revenue rental agreements recognized earned rental period customers contracted direct service purchase orders direct rental agreements accrual recorded unbilled accounts receivable revenue earned yet invoiced tubular sales revenue tubular sales recognized product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions postdelivery obligations regions customers right return due purchasing excess products deliverability limitations products remote locations likelihood return exists sale determination portion revenue reclassified deferred revenue time product returned return occurs tubular sales customers requested store pipe connectors purchased us facilities considered whether revenue recognized sales “bill hold” guidance provided sec staff however based upon assessment performed revenue recognition transactions totaling 626 million 232 million deferred december 31 2013 2012 respectively stockbased compensation stockbased compensation plan provides granting stock options stock appreciation rights “sars” restricted stock restricted stock units rsus dividend equivalent rights types equity cash incentive awards employees nonemployee directors service providers stockbased compensation expense measured frank’s international nv notes consolidated financial statements grant date sharebased awards based value recognized straightline basis vesting period net estimated forfeiture rate included general administrative expense consolidated statements income stockbased compensation currently consists rsus grant date fair value rsus entitled receive dividends vested measured reducing share price date present value dividends expected paid requisite vesting period discounted appropriate riskfree interest rate recent accounting pronouncements february 2013 financial accounting standards board “fasb” issued accounting standards update “asu” 201302 reporting amounts reclassified accumulated comprehensive income “aoci” asu requires entities present separately among items amount change due reclassifications amount due current period comprehensive income adopted guidance first quarter 2013 material impact consolidated financial position results operations cash flows currently items reclassified aoci july 2013 fasb issued asu 201311 relating income taxes provides guidance presentation unrecognized tax benefits intent better reflect manner entity would settle reporting date additional income taxes would result disallowance tax position net operating loss carryforwards similar tax losses tax credit carryforwards exist pronouncement effective fiscal years interim periods within years beginning december 15 2013 evaluating impact adoption standard may consolidated financial statements note 2noncontrolling interest hold approximate 743 economic interest ficv responsible operational management administrative decisions relating ficv’s business result financial results ficv consolidated record noncontrolling interest consolidated balance sheet respect remaining approximately 257 economic interest ficv held mosing holdings net income attributable noncontrolling interest statements income represents portion earnings loss attributable economic interest ficv held mosing holdings result certain reorganization transactions allocable domestic income ficv finv subject us taxation reconciliation net income attributable noncontrolling interest detailed follows thousands 1 represents income tax expense attributable us operations 743 partnership interests ficv 2 represents results operations entities outside ficv prior year periods included table since income us operations periods subject income tax frank’s international nv notes consolidated financial statements note 3discontinued operations june 14 2013 sold component tubular sales previously referred pipe products segment manufactured centralizers sales third parties recognized gain sale 396 million included income discontinued operations consolidated statements income result years ended december 31 2013 2012 2011 operations component reported discontinued operations following table presents results discontinued operations thousands major classes assets liabilities june 14 2013 included disposition follows thousands cash flows discontinued operations included cash flows continuing operations consolidated statements cash flows years ended december 31 2013 2012 2011 note 4accounts receivable net accounts receivable december 31 2013 2012 follows thousands 1 amounts represent expenditures behalf nonconsolidated affiliates receivables aircraft charter income frank’s international nv notes consolidated financial statements note 5inventories inventories december 31 2013 2012 follows thousands note 6property plant equipment following summary property plant equipment december 31 2013 2012 thousands depreciation expense approximately 773 million 644 million 525 million years ended december 31 2013 2012 2011 respectively frank’s international nv notes consolidated financial statements note 7other assets december 31 2013 2012 consisted following thousands 1 see note 10 fair value measurements 2 represented amounts due members mosing family related splitdollar life insurance policy premiums maintained prior ipo note 8accrued current liabilities accrued current liabilities december 31 2013 2012 consisted following thousands frank’s international nv notes consolidated financial statements note 9longterm debt following summary longterm debt december 31 2013 2012 thousands connection ipo entered two revolving credit facilities 1000 million revolving credit facility including 200 million letters credit 100 million swingline loans matures august 2018 “five year facility” ii 1000 million revolving credit facility matures august 2014 “one year facility” together five year facility “credit facilities” subject terms credit agreements ability increase commitments credit facilities 1500 million december 31 2013 outstanding indebtedness credit facilities 73 million letters credit outstanding incurred approximately 10 million deferred financing costs related credit facilities borrowings credit facilities bear interest option either base rate adjusted eurodollar rate base rate loans credit facilities bear interest rate equal higher prime rate published wall street journal b federal funds effective rate plus 050 c adjusted eurodollar rate plus 100 plus applicable margin ranging 050 150 subject adjustment based leverage ratio interest case payable quarterly baserate loans eurodollar loans credit facilities bear interest adjusted eurodollar rate equal eurodollar rate interest period multiplied statutory reserves plus applicable margin ranging 150 250 interest payable end applicable interest periods eurodollar loans except interest period eurodollar loan longer three months interest paid end threemonth period unused portion five year facility subject commitment fee 0375 credit facilities contain various covenants among things limit ability grant certain liens make certain loans investments enter mergers acquisition enter hedging transactions change lines business prepay certain indebtedness enter certain affiliate transactions incur additional indebtedness engage certain asset dispositions additionally credit agreements limit ability incur additional indebtedness subject certain exceptions credit facilities also contain financial covenants among things require us consolidated basis maintain ratio total consolidated funded debt adjusted ebitda defined credit agreements 250 10 ii ratio ebitda interest expense less 30 10 december 31 2013 compliance financial covenants credit agreements frank’s international nv notes consolidated financial statements addition credit facilities contain customary events default including among others failure make required payments borrowers failure comply certain covenants agreements borrowers breach representation covenants contained agreements borrowers default certain indebtedness certain events bankruptcy insolvency occurrence change control defined credit agreements prior completion ipo two revolving credit facilities available borrowing capacities 400 million 50 million connection completion ipo credit facilities repaid full terminated notes payable affiliated 2012 made noncash distribution 4840 million owners form two unsecured promissory notes payable fww interest charged notes applicable shortterm monthly applicable federal rate published internal revenue service connection completion ipo 4153 million balance notes fww repaid full also various notes payable affiliated either repaid full transferred mosing holdings connection completion ipo affiliated indebtedness existing prior ipo repaid note 10fair value measurements follow fair value measurement authoritative accounting guidance measuring fair values assets liabilities financial statements fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date exit price utilize market data assumptions market participants independent knowledgeable willing able transact would use pricing asset liability including assumptions risk risks inherent inputs valuation technique able classify fair value balances based observability inputs authoritative guidance fair value measurements establishes three levels fair value hierarchy defined follows • level 1 unadjusted quoted prices identical assets liabilities active markets • level 2 quoted prices markets considered active financial instruments significant inputs observable either directly indirectly substantially full term asset liability • level 3 significant unobservable inputs use little market data exists requiring significant degree judgment hierarchy gives highest priority level 1 measurements lowest priority level 3 measurements depending particular asset liability input availability vary depending factors product type longevity product market particular transaction conditions cases certain inputs used measure fair value may categorized different levels fair value hierarchy disclosure purposes accounting guidance lowest level contains significant inputs used valuation chosen frank’s international nv notes consolidated financial statements financial assets liabilities summary financial assets liabilities measured fair value recurring basis december 31 2013 2012 follows thousands investments associated deferred compensation plan consist marketable securities held form investments mutual funds within insurance contracts assets liabilities measured using significant observable inputs reported fair value based thirdparty broker statements derived fair value funds underlying investments marketable securities included assets consolidated balance sheets assets liabilities measured fair value nonrecurring basis apply provisions fair value measurement standard nonrecurring nonfinancial measurements including business combinations well impairment related goodwill longlived assets business combinations purchase price allocated assets acquired liabilities assumed based discounted cash flow model intangibles well market assumptions valuation equipment fixed assets utilize discounted cash flow model evaluating impairment considerations related goodwill longlived assets given unobservable nature inputs discounted cash flow models deemed use level 3 inputs nonrecurring measurements periods presented fair value considerations carrying values consolidated balance sheet cash equivalents trade accounts receivable current assets accounts payable accrued current liabilities lines credit approximates fair values due short maturities frank’s international nv notes consolidated financial statements transactions involving related parties cannot presumed carried armslength basis requisite conditions competitive freemarket dealings may exist practical determine fair value longterm portion notes payable fww december 31 2012 due relatedparty nature balance notes due fww repaid august 2013 note 11preferred stock december 31 2013 52976000 shares preferred stock issued outstanding held mosing holdings share preferred stock liquidation preference equal par value €001 per share entitled annual dividend equal 025 par value additionally share preferred stock entitles holder one vote preferred stockholders vote common stock single class matters presented finvs shareholders vote ficv limited partnership agreement contains provisions linking share preferred stock proportionate portion limited partnership interest ficv held mosing holdings mosing holdings right redeem portion preferred stock cash equal par value share preferred stock redeemed plus accrued unpaid dividends thereon simultaneously proportionate amount limited partner interests ficv would exchanged finv common stock december 31 2013 redemptions preferred stock conversions ficv limited partner interests exchanges subject customary conversion rate adjustments stock splits stock dividends reclassifications preferred stock classified outside permanent equity consolidated balance sheet redemption value par plus accrued unpaid dividends conversion provisions solely within control note 12related party transactions engaged certain transactions companies related us common ownership entered various operating leases lease office manufacturing space affiliated entities owned mosing family rent expense related leases 58 million 34 million 31 million years ended december 31 2013 2012 2011 respectively party certain agreements relating rental aircraft western airways wa wholly owned subsidiary entity owned mosing family prior ipo agreements whereby leased aircraft needed rental fee per hour reimbursed wa management fee hangar rental fees exceeded reimbursement costs recorded net charter income subsequent ipo entered new agreements wa aircraft retained us whereby paid flat monthly fee recorded net charter income 10 million 10 million 26 million years ended december 31 2013 2012 2011 respectively receivables totaling 56 million december 31 2012 due chief executive officer keith mosing certain members mosing family relating amounts owed us splitdollar life insurance policy premiums previously maintained receivables recorded assets consolidated balance sheets cash surrender value 188 million related policies recorded assets december 31 2012 recorded unrealized gain 08 million year ended december 31 2013 unrealized losses 03 million 07 million years ended december 31 2012 2011 respectively general administrative expenses consolidated statements income related change cash surrender value policies split dollar life insurance policies transferred mosing holdings connection reorganization addition two outstanding notes payable fww repaid full connection completion ipo see note 9 longterm debt frank’s international nv notes consolidated financial statements note 13earnings per common share basic earnings per common share determined dividing net income less preferred stock dividends weighted average number common shares outstanding period diluted earnings per share determined dividing net income attributable common stockholders weighted average number common shares outstanding assuming potentially dilutive shares issued apply treasury stock method determine dilutive weighted average common shares represented unvested restricted stock units diluted earnings per share calculation assumes exchange 100 outstanding preferred stock converted basis accordingly numerator also adjusted include earnings allocated noncontrolling interest taking account tax effect exchange following table summarizes basic diluted earnings per share calculations thousands except per share amounts 1 adjusted additional tax expense 73 million year ended december 31 2013 upon assumed conversion preferred stock frank’s international nv notes consolidated financial statements note 14stockbased compensation 2013 longterm incentive plan connection completion ipo adopted franks international nv 2013 longterm incentive plan “ltip” stock options stock appreciation rights “sars” restricted stock restricted stock units dividend equivalent rights types equity cash incentive awards may granted employees nonemployee directors service providers ltip expires 10 years unless prior date maximum number shares available issuance plan issued board directors terminates plan 20000000 shares common stock reserved issuance ltip restricted stock units subsequent completion ipo pursuant ltip issued 3522158 rsus management employees substantially rsus granted ltip vest ratably period three years onethird anniversary grant except certain grants vest 20 first three anniversaries remaining 40 end three half years employees granted rsus entitled dividends declared underlying shares restricted stock unvested grant date fair value award measured reducing grant date price common stock present value dividends expected paid underlying shares requisite service period discounted appropriate riskfree interest rate resulting fair value restricted stock awards granted 2103 compensation expense recognized ratably vesting period december 31 2013 assumed annual forfeiture rate lack turnover history type award stockbased compensation expense relating rsus year ended december 31 2013 72 million included general administrative expenses consolidated statements income unamortized stock compensation expense december 31 2013 relating rsus totaled approximately 668 million expensed weighted average period 30 years nonvested rsus outstanding december 31 2013 changes year follows employee stock purchase plan connection completion ipo adopted franks international nv employee stock purchase plan “espp” expect become effective july 1 2014 espp eligible employees right purchase shares common stock lesser 1 85 last reported sale price common stock first business day option period ii 85 last reported sale price common stock last business day option period espp intended qualify employee stock purchase plan section 423 internal revenue code reserved three million shares common stock issuance espp frank’s international nv notes consolidated financial statements note 15employee benefit plans us benefit plans 401k savings investment plan fii fcc fts administer separate 401k savings investment plans “plans” part employee benefits package employees required complete six months service becoming eligible participate plans terms plans match 75 employee contributions 3000 annually matching contributions plans totaled 29 million 29 million 26 million years ended december 31 2013 2012 2011 respectively executive deferred compensation plan december 2004 certain affiliates adopted frank’s executive deferred compensation plan “edc plan” purpose edc plan provide participants opportunity defer receipt portion salary bonus specified cash compensation participant contributions immediately vested contributions vest five years service participant benefits edc plan shall paid directly general funds applicable participating subsidiary grantor trust commonly referred rabbi trust created purpose informally funding edc plan rabbi trust special separate fund shall established segregation assets shall made assure payment assets edc plan’s trust invested corporate owned splitdollar life insurance policy amalgamation mutual funds note 7 recorded compensation expense related vesting company’s contribution 21 million 48 million 26 million years ended december 31 2013 2012 2011 respectively total liability recorded december 31 2013 2012 related edc plan 380 million 301 million respectively included noncurrent liabilities consolidated balance sheets foreign benefit plans sponsor certain benefit plans dictated host country law recorded expense related foreign benefit plans 44 million 24 million 17 million years ended december 31 2013 2012 2011 respectively note 16income taxes income continuing operations income tax expense comprised following periods indicated thousands frank’s international nv notes consolidated financial statements income taxes provided based upon tax laws rates countries operations conducted income earned components income tax expense consist following periods indicated thousands foreign taxes incurred following regions periods indicated thousands reconciliation differences income tax provision computed us statutory rate reported provision income taxes periods indicated follows thousands reconciliation using netherlands statutory rate provided significant operations netherlands frank’s international nv notes consolidated financial statements deferred tax assets liabilities recorded anticipated future tax effects temporary differences financial statement basis tax basis assets liabilities using applicable tax rates effect yearend valuation allowance recorded likely benefit deferred tax asset realized significant components deferred tax assets liabilities follows thousands undistributed earnings certain foreign subsidiaries amounted approximately 3047 million december 31 2013 intention permanently reinvest undistributed earnings profits subsidiaries consolidated companies’ operations generated december 31 2013 future plans demonstrate need repatriate foreign amounts fund us operations event distribution earnings form dividends otherwise would subject either us income taxes foreign withholding taxes payable certain foreign entities frank’s international nv notes consolidated financial statements tabular reconciliation total amounts uncertain tax positions beginning end periods follows thousands substantially uncertain tax positions recognized future would impact effective tax rate elected classify interest penalties incurred income taxes income tax expense file income tax returns various international tax jurisdictions december 31 2013 tax years 2007 2013 remain open examination major foreign taxing jurisdictions subject currently us federal state audits examinations underway note 17commitments contingencies commitments committed various noncancelable operating lease agreements primarily related facilities equipment expire various dates throughout next several years future minimum lease commitments noncancelable operating leases initial remaining terms one year december 31 2013 follows thousands total rent expense incurred operating leases 129 million 84 million 58 million years ended december 31 2013 2012 2011 respectively contingencies subject lawsuits claims arising ordinary course business management cannot predict ultimate outcome lawsuits claims lawsuits claims asserted amounts may material unfavorable outcome result management expect currently pending matters material adverse effect financial position results operations frank’s international nv notes consolidated financial statements note 18supplemental cash flow information supplemental cash flows noncash transactions follows periods indicated thousands note 19segment information reporting segments operating segments defined components enterprise separate financial information available regularly evaluated chief operating decision maker “codm” deciding allocate resources assess performance comprised three reportable segments international services us services tubular sales previously referred tubular sales segment pipe products segment renamed segment better describe business activities conducted within segment sale centralizer manufacturing business see note 3 international services segment provides tubular services international offshore markets several onshore international regions customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies us services segment provides tubular services almost active onshore oil gas drilling regions us including permian basin eagle ford shale marcellus shale utica shale barnett shale woodford shale piceance basin san juan basin uintah basin big horn basin powder river basin djwattenberg basin williston basin well us gulf mexico tubular sales segment designs manufactures certain products sell directly external customers including large od pipe connectors also provide specialized fabrication welding services support deep water projects us gulf mexico including drilling production risers flowlines pipeline end terminations well long length tubulars 300 feet length use caissons pilings addition distribute large od pipe manufactured third parties equipped weldon end connections segment also designs manufactures proprietary equipment use international us services segments operating results tubular sales component sold june 2013 accounted discontinued operations excluded segment results adjusted ebitda define adjusted ebitda income continuing operations net interest income expense depreciation amortization income tax benefit expense asset impairments gain loss sale assets foreign currency gain loss stockbased compensation noncash adjustments unusual nonrecurring charges codm uses adjusted ebitda primary measure segment reporting performance frank’s international nv notes consolidated financial statements following table presents reconciliation segment adjusted ebitda income continuing operations thousands 1 represents nonrecurring charges incurred connection ipo primarily amounts attributable restructuring advance ipo frank’s international nv notes consolidated financial statements following tables set forth certain financial information respect reportable segments included “corporate other” intersegment eliminations costs associated activities general nature thousands codm review total assets segment part financial information provided therefore asset information provided table frank’s international nv notes consolidated financial statements netherlands based company derive revenue services product sales clients primarily oil gas industry single customer accounted 10 revenue years ended december 31 2013 2011 one customer accounted approximately 11 revenue year ended december 31 2012 geographic areas revenue generated netherlands immaterial years ended december 31 2013 2012 2011 united states individual country represented 10 revenue years ended december 31 2013 2012 2011 based unique nature operating structure revenue generating assets interchangeable international countries separately identifiable revenues customers longlived assets netherlands insignificant years presented frank’s international nv notes consolidated financial statements note 20quarterly financial data unaudited summarized quarterly financial data years ended december 31 2013 2012 set forth thousands except per share data 1 sum individual quarterly earnings per share amounts may agree yeartodate net income per common share quarterly computation based weighted average number commons shares outstanding period item 9item 8 financial statements managements report internal control financial reporting management company including chief executive officer chief financial officer responsible establishing maintaining adequate internal control financial reporting defined rules 13a15f 15d15f securities exchange act 1934 amended internal control financial reporting process designed supervision chief executive officer chief financial officer provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures made accordance authorizations management directors iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition assets could material effect financial statements conducted evaluation effectiveness internal control financial reporting december 31 2014 based internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 based evaluation management concluded internal control financial reporting effective december 31 2014 effectiveness internal control financial reporting december 31 2014 audited pricewaterhousecoopers llp independent registered public accounting firm stated report included herein report independent registered public accounting firm board directors stockholders frank’s international nv opinion consolidated financial statements listed accompanying index present fairly material respects financial position frank’s international nv subsidiaries december 31 2014 2013 results operations cash flows three years period ended december 31 2014 conformity accounting principles generally accepted united states america addition opinion financial statement schedule listed index appearing item 15 a2 presents fairly material respects information set forth therein read conjunction related consolidated financial statements also opinion company maintained material respects effective internal control financial reporting december 31 2014 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission coso companys management responsible financial statements financial statement schedule maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements report internal control financial reporting responsibility express opinions financial statements financial statement schedule companys internal control financial reporting based audits integrated audit 2014 conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement whether effective internal control financial reporting maintained material respects audits financial statements included examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audits also included performing procedures considered necessary circumstances believe audits provide reasonable basis opinions company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp houston texas march 6 2015 accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements frank’s international nv notes consolidated financial statements note 1basis presentation significant accounting policies nature business frank’s international nv finv limited liability company organized laws netherlands global provider highly engineered tubular services oil gas industry finv provides services leading exploration production companies offshore onshore environments focus complex technically demanding wells basis presentation consolidated financial statements finv years ended december 31 2014 2013 2012 include activities franks international cv ficv wholly owned subsidiaries collectively company us intercompany accounts transactions eliminated purposes preparing consolidated financial statements accompanying consolidated financial statements related financial information prepared accordance generally accepted accounting principles united states america gaap opinion management consolidated financial statements reflect adjustments reclassifications consisting solely normal accruals necessary fair presentation financial results periods presented consolidated financial statements prepared historical cost basis using united states dollar reporting currency outofperiod adjustment review three months ended june 30 2014 identified noncash error originated prior periods error related attribution cost sharebased compensation requisite service periods retirementeligible employees awards made pursuant 2013 longterm incentive plan generally provided awards vest employee retires requisite service period awards extend beyond date employee becomes eligible retire causes requisite service period either two years period grant date employee becomes retirement eligible second quarter 2014 discovered sharebased compensation expense related retirementeligible employees cumulatively understated first quarter 2014 approximately 75 million errors immaterial periods arose corrected correction recorded outofperiod adjustment second quarter 2014 included general administrative expenses consolidated statements income significant accounting policies accounting estimates preparation consolidated financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date consolidated financial statements reported amounts revenues expenses reporting period actual results could differ estimates accounts receivable establish allowance doubtful accounts based various factors including historical experience current aging status customer accounts financial condition customers business political environment customers operate provisions doubtful accounts recorded becomes probable customer accounts uncollectible frank’s international nv notes consolidated financial statements cash equivalents consider highly liquid financial instruments purchased original maturity three months less cash equivalents throughout year cash balances excess federally insured limits deposited various financial institutions experienced losses accounts believe exposed significant credit risk cash equivalents comprehensive income accounting standards reporting comprehensive income require certain items including foreign currency translation adjustments unrealized gains losses marketable securities presented components comprehensive income cumulative amounts recognized us standards reflected consolidated balance sheet accumulated comprehensive income component stockholders’ equity contingencies certain conditions may exist date consolidated financial statements issued may result loss us resolved one future events occur fail occur management input legal counsel assesses contingent liabilities assessment inherently involves exercise judgment assessing loss contingencies related legal proceedings pending us unasserted claims may result proceedings management input legal counsel evaluates perceived merits legal proceedings unasserted claims well perceived merits amount relief sought expected sought therein assessment contingency indicates probable material loss incurred amount liability estimated liability would accrued consolidated financial statements assessment indicates potentially material loss contingency probable reasonably possible probable cannot estimated nature contingent liability together estimate range possible loss determinable material disclosed loss contingencies considered remote generally disclosed unless involve guarantees case guarantees would disclosed earnings per share basic earnings per share excludes dilution computed dividing income available common shareholders weighted average number common shares outstanding period diluted earnings per share reflects potential dilution could occur securities issue common stock exercised converted common stock fair value financial instruments financial instruments consist primarily cash equivalents trade accounts receivable availableforsale securities obligations trade accounts payable short longterm debt due shortterm nature carrying values cash equivalents trade accounts receivable trade accounts payable approximate fair value refer note 10 fair values availableforsale securities obligations foreign currency translations transactions results operations foreign subsidiaries functional currencies us dollar translated using average exchange rates period assets liabilities foreign subsidiaries translated using exchange rates effect balance sheet dates gains losses resulting translations included accumulated comprehensive income within stockholders’ equity frank’s international nv notes consolidated financial statements foreign subsidiaries designated us dollar functional currency gains losses resulting balance sheet remeasurement foreign operations included consolidated statements income incurred gains losses resulting transactions denominated foreign currency also included consolidated statements income incurred goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount two step impairment test performed first fair value reporting unit compared carrying value determine whether indication impairment exists impairment indicated fair value reporting unit’s goodwill determined allocating unit’s fair value assets liabilities including unrecognized intangible assets reporting unit acquired business combination amount impairment goodwill measured excess carrying value fair value complete assessment goodwill impairment december 31 year impairment recorded years ended december 31 2014 2013 2012 goodwill allocated operating segments follows us services approximately 113 million tubular sales approximately 24 million inputs used determination fair value generally level 3 inputs see note 10 notes consolidated financial statements discussion fair value measures impairment longlived assets longlived assets include property plant equipment certain assets held used us reviewed events changes circumstances indicate carrying amount assets may recoverable based estimated future cash flows assessment indicates carrying values recoverable determined based undiscounted cash flows remaining useful lives impairment loss recognized based fair value asset income taxes operate many legal forms approximately 60 countries result subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact upon amount income taxes provide given year ficv taxed partnership us federal income tax purposes domestic subsidiaries classified limited liability companies subject federal state income taxation partner ficv subject us taxation allocable share us taxable income noncontrolling member pay taxes respect allocable share us taxable income provide income tax expense based liability method accounting income taxes based authoritative accounting guidance deferred tax assets liabilities recorded based upon temporary differences tax basis assets liabilities carrying values financial reporting purposes measured using enacted marginal rates laws effect differences expected reverse deferred tax expense benefit result changes deferred tax assets liabilities period impact uncertain tax position taken expected taken income tax return recognized financial statements largest amount likely sustained upon examination relevant taxing authority frank’s international nv notes consolidated financial statements intangible assets intangible assets comprised licenses customer relationships tradenames identifiable intangible assets amortized using straightline method estimated useful lives assets evaluate impairment intangible assets individual basis whenever circumstances indicate carrying value may recoverable intangible assets deemed impaired written fair value discounted cash flows available comparable market values inventories stated lower cost primarily average cost market value work progress finished goods include cost materials labor manufacturing overhead inventory placed service either capitalized included equipment expensed based upon capitalization policies marketable securities marketable securities certificates deposit debt securities publicly traded equity securities indirect result strategic investments classified availableforsale reported fair value see note 7other assets marketable securities held within rabbi trust purpose paying future executive deferred compensation benefit obligations unrealized gains losses reported component stockholders’ equity realized gains losses marketable securities included income consolidated statements income net realized impairment loss reduce investment’s carrying amount fair market value recognized income decline fair market value individual security cost carrying value determined temporary realized gains investments 14 million 39 million 21 million years ended december 31 2014 2013 2012 respectively property plant equipment property plant equipment stated cost less accumulated depreciation expenditures significant improvements betterments capitalized extend useful life asset expenditures minor improvements routine repairs maintenance improve extend life related assets expensed incurred properties equipment sold retired otherwise disposed related cost accumulated depreciation removed books resulting gain loss recognized consolidated statements income depreciation fixed assets computed using straightline method estimated useful lives individual assets leasehold improvements amortized straightline basis shorter estimated useful lives lease term depreciation fixed assets recorded capital lease agreements included depreciation expense revenue recognition revenue recognized following criteria met 1 evidence arrangement exists 2 delivery acceptance customer occurred 3 price customer fixed determinable 4 collectability reasonably assured follows services revenue provide tubular services clients oil gas industry perform services either direct service purchase orders master service agreements service revenue recognized services performed rendered rental revenue design manufacture suite highly technical equipment products rent customers connection providing services including highend proprietary tubular handling equipment frank’s international nv notes consolidated financial statements rent products either direct rental agreements customers rental agreements place revenue rental agreements recognized earned rental period customers contracted direct service purchase orders direct rental agreements accrual recorded unbilled accounts receivable revenue earned yet invoiced tubular sales revenue tubular sales recognized product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions postdelivery obligations regions customers right return due purchasing excess products deliverability limitations products remote locations likelihood return exists sale determination portion revenue reclassified deferred revenue time product returned return occurs tubular sales customers requested store pipe connectors purchased us facilities considered whether revenue recognized sales “bill hold” guidance provided sec staff however based upon assessment performed revenue recognition transactions totaling 761 million 626 million deferred december 31 2014 2013 respectively stockbased compensation 2013 longterm incentive plan provides granting stock options stock appreciation rights “sars” restricted stock restricted stock units rsus dividend equivalent rights types equity cash incentive awards employees nonemployee directors service providers stockbased compensation expense measured grant date sharebased awards based value recognized straightline basis vesting period net estimated forfeiture rate included general administrative expense consolidated statements income stockbased compensation currently consists rsus grant date fair value rsus entitled receive dividends vested measured reducing share price date present value dividends expected paid requisite vesting period discounted appropriate riskfree interest rate venezuelan currency devaluation 2014 venezuela enacted certain changes foreign exchange system addition official rate 63 venezuelan bolivar fuertes bolivars per us dollar currently two legal exchange rates may obtained via different exchange rate mechanisms changes included expansion known sicad auction rate introduction sicad ii auction process sicad ii exchange rates approximately 12 50 bolivars us dollar respectively december 31 2014 although functional currency operations venezuela us dollar portion transactions denominated local currency historically applied official exchange rate remeasure local currency transactions balances us dollars effective december 31 2014 concluded appropriate apply sicad ii exchange rate believed rate best represented economics business activity venezuela result recorded 130 million exchange loss charge fourth quarter 2014 february 10 2015 venezuelan government announced transactions sale purchase foreign currency sicad ii exchange system would longer available created new open market foreign exchange system simadi new rate new system greater 50 1 likely lead devaluation 2015 frank’s international nv notes consolidated financial statements recent accounting pronouncements changes gaap established financial accounting standards board fasb form accounting standards updates asus fasb’s accounting standards codification consider applicability impact asus listed assessed determined either applicable expected minimal impact consolidated financial position results operations august 2014 fasb issued asu 201415 addresses management’s responsibility evaluate whether substantial doubt entity’s ability continue going concern provide related footnote disclosures management’s evaluation based relevant conditions events known reasonably knowable date financial statements issued standard effective first interim period within annual reporting periods beginning december 15 2016 early adoption permitted expect early adopt guidance believe adoption guidance material impact consolidated financial statements june 2014 fasb issued asu 201412 related stockbased compensation states performance target sharebased payment affects vesting could achieved requisite service period accounted performance condition guidance effective us beginning january 1 2016 expected material impact consolidated financial statements may 2014 fasb issued asu 201409 related recognition revenue based upon entity’s contracts customers transfer goods services new standard update entity recognize revenue depict transfer promised goods services customers amount reflects consideration entity expects entitled exchange goods services guidance effective us first quarter 2017 currently evaluating impact accounting standard update consolidated financial statements april 2014 fasb issued asu 201408 relating reporting discontinued operations disposals components entity amended guidance requires disposal representing strategic shift major effect entity’s financial results business activity classified held sale reported discontinued operations amendments also expand disclosure requirements discontinued operations add new disclosures individually significant dispositions qualify discontinued operations amendments effective prospectively fiscal years interim reporting periods within years beginning december 15 2014 early adoption permitted disposals previously reported implementation amended guidance expected material impact consolidated financial statements july 2013 fasb issued asu 201311 relating income taxes provides guidance financial statement presentation unrecognized tax benefit net operating loss carryforward similar tax loss tax credit carryforward exists amendments require entities present unrecognized tax benefit netted certain deferred tax assets specific requirements met however amendments affect gross versus net presentation impact calculation unrecognized tax benefit adopted guidance january 1 2014 adoption material impact consolidated financial statements note 2noncontrolling interest hold economic interest ficv responsible operational management administrative decisions relating ficv’s business result financial results ficv consolidated record noncontrolling interest consolidated balance sheet respect remaining economic interest ficv held mosing holdings inc mhi net income attributable noncontrolling interest statements income frank’s international nv notes consolidated financial statements represents portion earnings losses attributable economic interest ficv held mhi allocable domestic income ficv finv subject us taxation reconciliation net income attributable noncontrolling interest detailed follows thousands 1 represents income tax expense attributable proportionate share us operations partnership interests ficv 2 represents results operations entities outside ficv 3 represents economic interest ficv held mhi percentage change additional shares finv common stock issued information year ended december 31 2012 included table since income us operations period subject income tax note 3discontinued operations june 14 2013 sold component tubular sales segment manufactured centralizers sales third parties recognized gain sale 396 million included income discontinued operations consolidated statements income result years ended december 31 2013 2012 operations component reported discontinued operations following table presents results discontinued operations thousands frank’s international nv notes consolidated financial statements major classes assets liabilities june 14 2013 included disposition follows thousands cash flows discontinued operations included cash flows continuing operations consolidated statements cash flows years ended december 31 2013 2012 note 4accounts receivable net accounts receivable december 31 2014 2013 follows thousands 1 amounts represent expenditures behalf nonconsolidated affiliates receivables aircraft charter income note 5inventories inventories december 31 2014 2013 follows thousands frank’s international nv notes consolidated financial statements note 6property plant equipment following summary property plant equipment december 31 2014 2013 thousands 1 estimated useful life presented land improvements land depreciable life depreciation expense approximately 894 million 773 million 644 million years ended december 31 2014 2013 2012 respectively note 7other assets december 31 2014 2013 consisted following thousands 1 see note 10 fair value measurements frank’s international nv notes consolidated financial statements note 8accrued current liabilities accrued current liabilities december 31 2014 2013 consisted following thousands note 9longterm debt 1000 million revolving credit facility certain financial institutions including 200 million letters credit 100 million swingline loans matures august 2018 “credit facility” subject terms credit agreement ability increase commitments credit facility 1500 million december 31 2014 2013 outstanding indebtedness credit facility addition 66 million letters credit outstanding december 31 2014 1000 million 364day revolving credit facility matured august 2014 renewed replaced borrowings credit facility bear interest option either base rate adjusted eurodollar rate base rate loans credit facility bear interest rate equal higher prime rate published wall street journal b federal funds effective rate plus 050 c adjusted eurodollar rate plus 100 plus applicable margin ranging 050 150 subject adjustment based leverage ratio interest case payable quarterly baserate loans eurodollar loans credit facility bear interest adjusted eurodollar rate equal eurodollar rate interest period multiplied statutory reserves plus applicable margin ranging 150 250 interest payable end applicable interest periods eurodollar loans except interest period eurodollar loan longer three months interest paid end threemonth period unused portion credit facility subject commitment fee 0375 credit facility contains various covenants among things limit ability grant certain liens make certain loans investments enter mergers acquisitions enter hedging transactions change lines business prepay certain indebtedness enter certain affiliate transactions incur additional indebtedness engage certain asset dispositions credit facility also contains financial covenants among things require us consolidated basis maintain ratio total consolidated funded debt adjusted ebitda defined credit agreement 250 10 ii ratio ebitda interest expense less 30 10 december 31 2014 compliance financial covenants credit facility addition credit facility contains customary events default including among others failure make required payments failure comply certain covenants agreements breach representations covenants contained agreements default certain indebtedness certain events bankruptcy insolvency occurrence change control defined credit agreement frank’s international nv notes consolidated financial statements note 10fair value measurements follow fair value measurement authoritative accounting guidance measuring fair values assets liabilities financial statements fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date exit price utilize market data assumptions market participants independent knowledgeable willing able transact would use pricing asset liability including assumptions risk risks inherent inputs valuation technique able classify fair value balances based observability inputs authoritative guidance fair value measurements establishes three levels fair value hierarchy defined follows • level 1 unadjusted quoted prices identical assets liabilities active markets • level 2 quoted prices markets considered active financial instruments significant inputs observable either directly indirectly substantially full term asset liability • level 3 significant unobservable inputs use little market data exists requiring significant degree judgment hierarchy gives highest priority level 1 measurements lowest priority level 3 measurements depending particular asset liability input availability vary depending factors product type longevity product market particular transaction conditions cases certain inputs used measure fair value may categorized different levels fair value hierarchy disclosure purposes accounting guidance lowest level contains significant inputs used valuation chosen frank’s international nv notes consolidated financial statements financial assets liabilities summary financial assets liabilities measured fair value recurring basis december 31 2014 2013 follows thousands investments associated deferred compensation plan consist marketable securities held form investments mutual funds within insurance contracts assets liabilities measured using significant observable inputs reported fair value based thirdparty broker statements derived fair value funds underlying investments marketable securities investment included assets consolidated balance sheets assets liabilities measured fair value nonrecurring basis apply provisions fair value measurement standard nonrecurring nonfinancial measurements including business combinations well impairment related goodwill longlived assets business combinations purchase price allocated assets acquired liabilities assumed based discounted cash flow model intangibles well market assumptions valuation equipment fixed assets utilize discounted cash flow model evaluating impairment considerations related goodwill longlived assets given unobservable nature inputs discounted cash flow models deemed use level 3 inputs nonrecurring measurements periods presented frank’s international nv notes consolidated financial statements fair value considerations carrying values consolidated balance sheet cash equivalents trade accounts receivable current assets accounts payable accrued current liabilities lines credit approximates fair values due short maturities note 11preferred stock december 31 2014 2013 52976000 shares series preferred stock par value €001 per share preferred stock issued outstanding held mhi share preferred stock liquidation preference equal par value €001 per share entitled annual dividend equal 025 par value preferred dividend 705 year ended december 31 2013 paid may 29 2014 expect pay annual dividend year ended december 31 2014 may 2015 additionally share preferred stock entitles holder one vote preferred stockholders vote common stockholders single class matters presented finvs shareholders vote mhi right convert portion preferred stock shares common stock delivery equivalent portion interest ficv us accordingly increase interest ficv connection conversion decrease noncontrolling interest financial statements attributable mhis interest ficv december 31 2014 conversions preferred stock exchanges ficv limited partner interests exchanges subject customary conversion rate adjustments stock splits stock dividends reclassifications preferred stock classified outside permanent equity consolidated balance sheet redemption value par plus accrued unpaid dividends conversion provisions solely within control note 12treasury stock december 31 2014 common shares held treasury totaled 243846 cost 48 million shares withheld employees settle personal tax withholding obligations arose result restricted stock units vested note 13related party transactions engaged certain transactions companies related us common ownership entered various operating leases lease office space affiliated partnership rent expense related leases 74 million 58 million 34 million years ended december 31 2014 2013 2012 respectively party certain agreements relating rental aircraft western airways wa entity owned mosing family prior initial public offering ipo entered agreements whereby leased aircraft needed rental fee per hour reimbursed wa management fee hangar rental fees exceeded reimbursement costs recorded net charter income subsequent ipo entered new agreements wa aircraft retained us whereby paid flat monthly fee dry lease rental charged block hours monthly recorded net charter expense 15 million year ended december 31 2014 net charter income 10 million 10 million years ended december 31 2013 2012 respectively tax receivable agreement mhi permitted transferees may convert portion preferred stock shares common stock oneforone basis subject customary conversion rate adjustments stock splits stock dividends reclassifications similar transactions delivery equivalent portion interest ficv us “conversion” ficv made election section 754 code pursuant section 754 election future conversion expected result adjustment tax basis tangible intangible assets ficv frank’s international nv notes consolidated financial statements adjustments allocated finv certain adjustments tax basis tangible intangible assets ficv described would available absent future conversions anticipated basis adjustments expected reduce amount tax finv would otherwise required pay future basis adjustments may also decrease gains increase losses future dispositions certain capital assets extent tax basis allocated capital assets tax receivable agreement tra entered ficv mhi connection ipo generally provides payment finv 85 actual reductions payments us federal state local income tax franchise tax reductions refer “cash savings” periods ipo result basis increases resulting conversions ii imputed interest deemed paid finv result additional tax basis arising payments tra addition tra provides payment finv interest earned due date without extensions corresponding tax return date payment specified tra payment obligations tra finv’s obligations ficv term tra continue tax benefits utilized expired unless finv exercises right terminate tra estimating amount payments may made tra nature imprecise actual increase tax basis well amount timing payments tra vary depending upon number factors including timing conversions relative value finv’s us international assets time conversion price finv’s common stock time conversion extent conversions taxable amount timing taxable income finv realizes future tax rate applicable finv’s use loss carryovers portion payments tra constituting imputed interest depreciable amortizable basis finv expects payments required make tra substantial able fund payments may negative impact liquidity result timing discrepancies payments tra exceed actual benefits realize respect tax attributes subject tra payments tra conditioned upon holder rights tra continued ownership interest either ficv finv tra provides finv may terminate early finv elects terminate tra early would required make immediate payment equal present value anticipated future tax benefits subject tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits ficv interests mhi transferees termination date deemed exchanged termination date early termination payment may made significantly advance actual realization future benefits addition payments due tra similarly accelerated following certain mergers changes control situations finv’s obligations tra could substantial negative impact liquidity could effect delaying deferring preventing certain mergers asset sales forms business combinations changes control example tra terminated december 31 2014 estimated termination payment would approximately 587 million calculated using discount rate 547 foregoing number merely estimate actual payment could differ materially finv holding company operations ability make payments tra dependent ability ficv make distributions amount sufficient cover finv’s obligations agreements ability turn may depend ability ficv’s subsidiaries provide payments ability ficv subsidiaries make distributions subject among things applicable provisions dutch law may limit amount funds available distribution restrictions debt instruments extent finv unable make payments tra reason payments deferred accrue interest paid finv prohibited paying dividends common stock frank’s international nv notes consolidated financial statements note 14earnings per common share basic earnings per common share determined dividing net income less preferred stock dividends weighted average number common shares outstanding period diluted earnings per share determined dividing net income attributable common stockholders weighted average number common shares outstanding assuming potentially dilutive shares issued apply treasury stock method determine dilutive weighted average common shares represented unvested restricted stock units diluted earnings per share calculation assumes conversion 100 outstanding preferred stock converted basis accordingly numerator also adjusted include earnings allocated noncontrolling interest taking account tax effect exchange frank’s international nv notes consolidated financial statements following table summarizes basic diluted earnings per share calculations thousands except per share amounts note 15stockbased compensation 2013 longterm incentive plan 2013 longterm incentive plan “ltip” stock options sars restricted stock restricted stock units dividend equivalent rights types equity cash incentive awards may granted employees nonemployee directors service providers ltip expires 10 years unless prior date maximum number shares available issuance plan issued board directors terminates plan 20000000 shares common stock reserved issuance ltip december 31 2014 16375534 shares remained available issuance frank’s international nv notes consolidated financial statements restricted stock units upon completion ipo pursuant ltip began granting restricted stock units substantially rsus granted ltip vest ratably period two three years except certain grants vest 20 first three anniversaries remaining 40 end three half years certain restricted stock unit awards provide accelerated vesting employees granted rsus entitled dividends declared underlying shares restricted stock unit unvested grant date fair value award measured reducing grant date price common stock present value dividends expected paid underlying shares requisite service period discounted appropriate riskfree interest rate weighted average grant date fair value rsus granted years ended december 31 2014 2013 31 million 741 million respectively compensation expense recognized ratably vesting period december 31 2014 assumed annual forfeiture rate lack turnover history type award stockbased compensation expense relating rsus years ended december 31 2014 2013 384 million 72 million respectively included general administrative expenses consolidated statements income unamortized stock compensation expense december 31 2014 relating rsus totaled approximately 306 million expensed weighted average period 13 years nonvested rsus outstanding december 31 2014 changes year follows employee stock purchase plan connection completion ipo adopted franks international nv employee stock purchase plan “espp” became effective january 1 2015 espp eligible employees right purchase shares common stock lesser 1 85 last reported sale price common stock first business day option period ii 85 last reported sale price common stock last business day option period espp intended qualify employee stock purchase plan section 423 internal revenue code reserved three million shares common stock issuance espp note 16employee benefit plans us benefit plans 401k savings investment plan franks international llc administers 401k savings investment plan “plan” part employee benefits package employees required complete six months service becoming eligible participate plan terms plan match 75 employee contributions 3000 annually matching contributions plan totaled 35 million 29 million 29 million years ended december 31 2014 2013 2012 respectively frank’s international nv notes consolidated financial statements executive deferred compensation plan december 2004 certain affiliates adopted frank’s executive deferred compensation plan “edc plan” purpose edc plan provide participants opportunity defer receipt portion salary bonus specified cash compensation participant contributions immediately vested contributions vest five years service participant benefits edc plan shall paid directly general funds applicable participating subsidiary grantor trust commonly referred rabbi trust created purpose informally funding edc plan rabbi trust special separate fund shall established segregation assets shall made assure payment assets edc plan’s trust invested corporate owned splitdollar life insurance policy amalgamation mutual funds see note 7 recorded compensation expense related vesting company’s contribution 23 million 21 million 48 million years ended december 31 2014 2013 2012 respectively total liability recorded december 31 2014 2013 related edc plan 430 million 380 million respectively included noncurrent liabilities consolidated balance sheets foreign benefit plans sponsor certain benefit plans dictated host country law recorded expense related foreign benefit plans 66 million 44 million 24 million years ended december 31 2014 2013 2012 respectively note 17income taxes income continuing operations income tax expense comprised following periods indicated thousands frank’s international nv notes consolidated financial statements income taxes provided based upon tax laws rates countries operations conducted income earned components income tax expense consist following periods indicated thousands foreign taxes incurred following regions periods indicated thousands reconciliation differences income tax provision computed us statutory rate reported provision income taxes periods indicated follows thousands reconciliation using netherlands statutory rate provided significant operations netherlands frank’s international nv notes consolidated financial statements deferred tax assets liabilities recorded anticipated future tax effects temporary differences financial statement basis tax basis assets liabilities using applicable tax rates effect yearend valuation allowance recorded likely benefit deferred tax asset realized significant components deferred tax assets liabilities follows thousands undistributed earnings certain foreign subsidiaries amounted approximately 4243 million december 31 2014 intention permanently reinvest undistributed earnings profits subsidiaries consolidated companies’ operations generated december 31 2014 future plans demonstrate need repatriate foreign amounts fund parent company activity event distribution earnings form dividends otherwise would subject either us income taxes foreign withholding taxes payable certain foreign entities december 31 2014 2013 total gross unrecognized tax benefits 03 million 21 million respectively substantially uncertain tax positions recognized future would impact effective tax rate elected classify interest penalties incurred income taxes income tax expense file income tax returns various international tax jurisdictions december 31 2014 tax years 2008 2014 remain open examination major foreign taxing jurisdictions subject currently us federal state audits examinations underway frank’s international nv notes consolidated financial statements note 18commitments contingencies commitments committed various noncancelable operating lease agreements primarily related facilities equipment expire various dates throughout next several years future minimum lease commitments noncancelable operating leases initial remaining terms one year december 31 2014 follows thousands total rent expense incurred operating leases 172 million 129 million 84 million years ended december 31 2014 2013 2012 respectively contingencies subject lawsuits claims arising ordinary course business time liability accrued loss probable reasonable estimated december 31 2014 material accruals loss contingencies individually aggregate believe probability remote ultimate outcome matters would material adverse effect financial position results operations cash flows note 19supplemental cash flow information supplemental cash flows noncash transactions follows periods indicated thousands note 20segment information reporting segments operating segments defined components enterprise separate financial information available regularly evaluated chief operating decision maker “codm” deciding allocate resources assess performance comprised three reportable segments international services us services tubular sales frank’s international nv notes consolidated financial statements international services segment provides tubular services international offshore markets several onshore international regions customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies us services segment provides tubular services almost active onshore oil gas drilling regions us including permian basin bakken shale barnett shale eagle ford shale haynesville shale marcellus shale utica shale well us gulf mexico tubular sales segment designs manufactures distributes large outside diameter od pipe connectors casing attachments also provide specialized fabrication welding services support offshore projects including drilling production risers flowlines pipeline end terminations well long length tubulars 300 feet length use caissons pilings segment also designs manufactures proprietary equipment use international us services segments operating results tubular sales component sold june 2013 accounted discontinued operations excluded segment results adjusted ebitda define adjusted ebitda income continuing operations net interest income expense depreciation amortization income tax benefit expense asset impairments gain loss sale assets foreign currency gain loss stockbased compensation noncash adjustments unusual nonrecurring charges review adjusted ebitda consolidated basis segment basis use adjusted ebitda assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization items outside control management team income tax rates adjusted ebitda limitations analytical tool considered alternative net income operating income cash flow operating activities measure financial performance liquidity presented accordance generally accepted accounting principles us gaap codm uses adjusted ebitda primary measure segment reporting performance frank’s international nv notes consolidated financial statements following table presents reconciliation segment adjusted ebitda income continuing operations thousands 1 represents nonrecurring charges incurred connection ipo primarily amounts attributable restructuring advance ipo frank’s international nv notes consolidated financial statements following tables set forth certain financial information respect reportable segments included “corporate other” intersegment eliminations costs associated activities general nature thousands codm review total assets segment part financial information provided therefore asset information provided table frank’s international nv notes consolidated financial statements netherlands based company derive revenue services product sales clients primarily oil gas industry single customer accounted 10 revenue years ended december 31 2014 2013 one customer accounted approximately 11 revenue year ended december 31 2012 geographic areas revenue generated netherlands immaterial years ended december 31 2014 2013 2012 united states individual country represented 10 revenue years ended december 31 2014 2013 2012 based unique nature operating structure revenue generating assets interchangeable international countries separately identifiable revenues customers longlived assets netherlands insignificant years presented frank’s international nv notes consolidated financial statements note 21quarterly financial data unaudited summarized quarterly financial data years ended december 31 2014 2013 set forth thousands except per share data 1 sum individual quarterly earnings per share amounts may agree yeartodate net income per common share quarterly computation based weighted average number common shares outstanding period item 9item 8 financial statements supplementary data managements report internal control financial reporting management company including chief executive officer chief financial officer responsible establishing maintaining adequate internal control financial reporting defined rules 13a15f 15d15f securities exchange act 1934 amended internal control financial reporting process designed supervision chief executive officer chief financial officer provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures made accordance authorizations management directors iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition assets could material effect financial statements conducted evaluation effectiveness internal control financial reporting december 31 2015 based internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 based evaluation management concluded internal control financial reporting effective december 31 2015 effectiveness internal control financial reporting december 31 2015 audited pricewaterhousecoopers llp independent registered public accounting firm stated report included herein report independent registered public accounting firm board supervisory directors stockholders frank’s international nv opinion consolidated financial statements listed accompanying index present fairly material respects financial position frank’s international nv subsidiaries december 31 2015 2014 results operations cash flows three years period ended december 31 2015 conformity accounting principles generally accepted united states america addition opinion financial statement schedule listed index appearing item 15 a2 presents fairly material respects information set forth therein read conjunction related consolidated financial statements also opinion company maintained material respects effective internal control financial reporting december 31 2015 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission coso companys management responsible financial statements financial statement schedule maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements report internal control financial reporting responsibility express opinions financial statements financial statement schedule companys internal control financial reporting based audits integrated audits 2015 2014 conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement whether effective internal control financial reporting maintained material respects audits financial statements included examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audits also included performing procedures considered necessary circumstances believe audits provide reasonable basis opinions company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp houston texas february 29 2016 accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements frank’s international nv notes consolidated financial statements note 1basis presentation significant accounting policies nature business frank’s international nv finv limited liability company organized laws netherlands global provider highly engineered tubular services oil gas industry finv provides services leading exploration production companies offshore onshore environments focus complex technically demanding wells basis presentation consolidated financial statements finv years ended december 31 2015 2014 2013 include activities franks international cv ficv wholly owned subsidiaries collectively company us intercompany accounts transactions eliminated purposes preparing consolidated financial statements accompanying consolidated financial statements related financial information prepared accordance generally accepted accounting principles united states america gaap opinion management consolidated financial statements reflect adjustments reclassifications consisting solely normal accruals necessary fair presentation financial results periods presented consolidated financial statements prepared historical cost basis using united states dollar reporting currency outofperiod adjustment review three months ended june 30 2014 identified noncash error originated prior periods error related attribution cost sharebased compensation requisite service periods retirementeligible employees awards made pursuant 2013 longterm incentive plan generally provided awards vest employee retires requisite service period awards extend beyond date employee becomes eligible retire causes requisite service period either two years period grant date employee becomes retirement eligible second quarter 2014 discovered sharebased compensation expense related retirementeligible employees cumulatively understated first quarter 2014 approximately 75 million errors immaterial periods arose corrected correction recorded outofperiod adjustment second quarter 2014 included general administrative expenses consolidated statements income significant accounting policies accounting estimates preparation consolidated financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date consolidated financial statements reported amounts revenues expenses reporting period actual results could differ estimates accounts receivable establish allowance doubtful accounts based various factors including historical experience current aging status customer accounts financial condition customers business political environment customers operate provisions doubtful accounts recorded becomes probable customer accounts uncollectible frank’s international nv notes consolidated financial statements cash equivalents consider highly liquid financial instruments purchased original maturity three months less cash equivalents throughout year cash balances excess federally insured limits deposited various financial institutions experienced losses accounts believe exposed significant credit risk cash equivalents comprehensive income accounting standards reporting comprehensive income require certain items including foreign currency translation adjustments unrealized gains losses marketable securities presented components comprehensive income cumulative amounts recognized us standards reflected consolidated balance sheet accumulated comprehensive income component stockholders’ equity contingencies certain conditions may exist date consolidated financial statements issued may result loss us resolved one future events occur fail occur management input legal counsel assesses contingent liabilities assessment inherently involves exercise judgment assessing loss contingencies related legal proceedings pending us unasserted claims may result proceedings management input legal counsel evaluates perceived merits legal proceedings unasserted claims well perceived merits amount relief sought expected sought therein assessment contingency indicates probable material loss incurred amount liability estimated liability would accrued consolidated financial statements assessment indicates potentially material loss contingency probable reasonably possible probable cannot estimated nature contingent liability together estimate range possible loss determinable material disclosed loss contingencies considered remote generally disclosed unless involve guarantees case guarantees would disclosed derivative financial instruments deem appropriate use foreign currency forward derivative contracts mitigate risk fluctuations foreign currency exchange rates use instruments mitigate exposure nonlocal currency working capital hold issue financial instruments trading speculative purposes account derivative activities provisions accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements income earnings per share basic earnings per share excludes dilution computed dividing income available common shareholders weighted average number common shares outstanding period diluted earnings per share reflects potential dilution could occur securities issue common stock exercised converted common stock frank’s international nv notes consolidated financial statements fair value financial instruments financial instruments consist primarily cash equivalents trade accounts receivable availableforsale securities derivative financial instruments obligations trade accounts payable short longterm debt due shortterm nature carrying values cash equivalents trade accounts receivable trade accounts payable approximate fair value refer note 11 fair values availableforsale securities derivative financial instruments obligations foreign currency translations transactions results operations foreign subsidiaries functional currencies us dollar translated using average exchange rates period assets liabilities foreign subsidiaries translated using exchange rates effect balance sheet dates gains losses resulting translations included accumulated comprehensive income within stockholders’ equity foreign subsidiaries designated us dollar functional currency gains losses resulting balance sheet remeasurement foreign operations included consolidated statements income incurred gains losses resulting transactions denominated foreign currency also included consolidated statements income incurred goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount two step impairment test performed first fair value reporting unit compared carrying value determine whether indication impairment exists impairment indicated fair value reporting unit’s goodwill determined allocating unit’s fair value assets liabilities including unrecognized intangible assets reporting unit acquired business combination amount impairment goodwill measured excess carrying value fair value complete assessment goodwill impairment december 31 year impairment recorded years ended december 31 2015 2014 2013 goodwill allocated operating segments follows us services approximately 163 million tubular sales approximately 24 million inputs used determination fair value generally level 3 inputs see note 11 notes consolidated financial statements discussion fair value measures impairment longlived assets longlived assets include property plant equipment certain assets held used us reviewed events changes circumstances indicate carrying amount assets may recoverable based estimated future cash flows assessment indicates carrying values recoverable determined based undiscounted cash flows remaining useful lives impairment loss recognized based fair value asset income taxes operate many legal forms approximately 60 countries result subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events changes tax laws regulations agreements treaties frank’s international nv notes consolidated financial statements foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact upon amount income taxes provide given year ficv treated partnership us federal income tax purposes domestic subsidiaries classified limited liability companies subject federal state income taxation partner ficv subject us taxation allocable share us taxable income noncontrolling member pay taxes respect allocable share us taxable income provide income tax expense based liability method accounting income taxes based authoritative accounting guidance deferred tax assets liabilities recorded based upon temporary differences tax basis assets liabilities carrying values financial reporting purposes measured using enacted marginal rates laws effect differences expected reverse deferred tax expense benefit result changes deferred tax assets liabilities period impact uncertain tax position taken expected taken income tax return recognized financial statements largest amount likely sustained upon examination relevant taxing authority intangible assets intangible assets comprised licenses customer relationships trade names noncompete agreements identifiable intangible assets amortized using straightline method estimated useful lives assets evaluate impairment intangible assets individual basis whenever circumstances indicate carrying value may recoverable intangible assets deemed impaired written fair value discounted cash flows available comparable market values following table provides information related intangible assets december 31 2015 2014 thousands frank’s international nv notes consolidated financial statements amortization expense intangibles assets 18 million 07 million 08 million years ended december 31 2015 2014 2013 respectively december 31 2015 estimated amortization expense intangible assets next five years follows thousands inventories stated lower cost primarily average cost market value work progress finished goods include cost materials labor manufacturing overhead inventory placed service either capitalized included equipment expensed based upon capitalization policies marketable securities marketable securities publicly traded equity securities indirect result strategic investments classified availableforsale reported fair value see note 8other assets marketable securities held within rabbi trust purpose paying future executive deferred compensation benefit obligations unrealized gains losses reported component stockholders’ equity realized gains losses marketable securities included income consolidated statements income net realized impairment loss reduce investment’s carrying amount fair market value recognized income decline fair market value individual security cost carrying value determined temporary realized gains losses investments 07 million 14 million 39 million years ended december 31 2015 2014 2013 respectively property plant equipment property plant equipment stated cost less accumulated depreciation expenditures significant improvements betterments capitalized enhance extend useful life asset expenditures routine repairs maintenance improve extend life related assets expensed incurred properties equipment sold retired otherwise disposed related cost accumulated depreciation removed books resulting gain loss recognized consolidated statements income depreciation fixed assets computed using straightline method estimated useful lives individual assets leasehold improvements amortized straightline basis shorter estimated useful lives lease term depreciation fixed assets recorded capital lease agreements included depreciation expense frank’s international nv notes consolidated financial statements revenue recognition revenue recognized following criteria met 1 evidence arrangement exists 2 delivery acceptance customer occurred 3 price customer fixed determinable 4 collectability reasonably assured follows services revenue provide tubular services clients oil gas industry perform services either direct service purchase orders master service agreements service revenue recognized services performed rendered rental revenue design manufacture suite highly technical equipment products rent customers connection providing services including highend proprietary tubular handling equipment rent products either direct rental agreements customers rental agreements place revenue rental agreements recognized earned rental period customers contracted direct service purchase orders direct rental agreements accrual recorded unbilled accounts receivable revenue earned yet invoiced tubular sales revenue tubular sales recognized product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions postdelivery obligations regions customers right return due purchasing excess products deliverability limitations products remote locations likelihood return exists sale determination portion revenue reclassified deferred revenue time product returned return period expired tubular sales customers requested store pipe connectors purchased us facilities considered whether revenue recognized sales “bill hold” guidance provided sec staff however based upon assessment performed revenue recognition transactions totaling 576 million 761 million deferred december 31 2015 2014 respectively stockbased compensation 2013 longterm incentive plan provides granting stock options stock appreciation rights “sars” restricted stock restricted stock units rsus dividend equivalent rights types equity cash incentive awards employees nonemployee directors service providers stockbased compensation expense measured grant date sharebased awards based value recognized straightline basis vesting period net estimated forfeiture rate included general administrative expense consolidated statements income stockbased compensation currently consists rsus grant date fair value rsus entitled receive dividends vested measured reducing share price date present value dividends expected paid requisite vesting period discounted appropriate riskfree interest rate recent accounting pronouncements changes gaap established financial accounting standards board fasb form accounting standards updates asus fasb’s accounting standards codification consider applicability impact asus listed assessed determined either applicable expected minimal impact consolidated financial position results operations frank’s international nv notes consolidated financial statements january 2016 fasb issued accounting guidance recognition measurement financial assets financial liabilities guidance equity investments measured fair value changes fair value recognized net income guidance requires public businesses use exit price notion measuring fair value financial instruments disclosure purposes requires separate presentation financial assets financial liabilities measurement category form financial asset guidance also eliminates requirement public business entities disclose methods significant assumptions used estimate fair value required disclosed financial instruments measured amortized cost guidance applicable equity investments accounted equity method accounting guidance effective interim annual periods beginning december 15 2017 management believe adoption material impact consolidated financial statements november 2015 fasb issued accounting guidance classification presentation deferred taxes guidance eliminates current requirement organizations present deferred tax liabilities assets current noncurrent classified balance sheet guidance requires deferred tax assets liabilities classified noncurrent guidance effective interim annual periods beginning december 15 2016 early adoption permitted amendments guidance may applied either prospectively deferred tax liabilities assets retrospectively periods presented adopted guidance december 31 2015 adoption material impact consolidated financial statements july 2015 fasb issued accounting guidance simplifying measurement inventory guidance inventory measured lower cost net realizable value options currently exist market value eliminated guidance defines net realizable value estimated selling prices ordinary course business less reasonably predictable costs completion disposal transportation changes made current guidance inventory measurement guidance effective interim annual periods beginning december 15 2016 early application permitted applied prospectively management evaluating provisions statement including period adopt determined impact adoption new accounting guidance consolidated financial statements april 2015 fasb issued amended guidance presentation debt issuance costs requires debt issuance costs presented balance sheet direct deduction related debt liability rather asset consistent debt discounts premiums amortization costs reported interest expense august 2015 additional guidance provided address presentation subsequent measurement debt issuance costs related lineofcredit arrangements sec staff stated would object entity deferring presenting debt issuance costs asset subsequently amortizing deferred debt issuance costs ratably term lineofcredit arrangement regardless whether outstanding borrowings lineofcredit arrangement adopted guidance 2015 adoption impact consolidated financial statements february 2015 fasb issued guidance amendments consolidation analysis affects reporting entities required evaluate whether consolidate certain legal entities legal entities subject reevaluation revised consolidation model specifically amendments 1 modify evaluation whether limited partnerships similar legal entities variable interest entities vies voting interest entities 2 eliminate presumption general partner consolidate limited partnership 3 affect consolidation analysis reporting entities involved vies particularly fee arrangements related party relationships 4 provide scope exception consolidation guidance reporting entities interest legal entities required comply operate accordance requirements similar registered money market funds pronouncement effective public business entities fiscal years interim periods within fiscal years beginning december 15 2015 evaluating impact adoption standard consolidated financial statements january 2015 fasb issued guidance income statement presentation eliminates concept extraordinary items retaining certain presentation disclosure guidance items unusual nature occur infrequently standard effective prospectively fiscal years interim periods within fiscal frank’s international nv notes consolidated financial statements years beginning december 15 2015 early adoption permitted provided guidance applied beginning fiscal year adoption expect adopt guidance early believe adoption guidance material impact consolidated financial statements may 2014 fasb issued amendments guidance recognition revenue based upon entity’s contracts customers transfer goods services new standard update entity recognize revenue depict transfer promised goods services customers amount reflects consideration entity expects entitled exchange goods services july 9 2015 fasb deferred effective date one year december 15 2017 annual reporting periods beginning date fasb also permit early adoption standard original effective date december 15 2016 currently evaluating impact accounting standard update consolidated financial statements note 2noncontrolling interest hold economic interest ficv responsible operational management administrative decisions relating ficv’s business result financial results ficv consolidated record noncontrolling interest consolidated balance sheet respect remaining economic interest ficv held mosing holdings inc mhi net income attributable noncontrolling interest statements income represents portion earnings losses attributable economic interest ficv held mhi allocable domestic income ficv finv subject us taxation reconciliation net income attributable noncontrolling interest detailed follows thousands 1 represents income tax expense entities outside ficv well income tax attributable proportionate share us operations partnership interests ficv 2 represents results operations entities outside ficv 3 represents economic interest ficv held mhi percentage change additional shares finv common stock issued note 3discontinued operations june 14 2013 sold component tubular sales segment manufactured centralizers sales third parties recognized gain sale 396 million included income discontinued operations consolidated statements income result year ended december 31 2013 operations component reported discontinued operations frank’s international nv notes consolidated financial statements following table presents results discontinued operations thousands major classes assets liabilities june 14 2013 included disposition follows thousands cash flows discontinued operations included cash flows continuing operations consolidated statements cash flows year ended december 31 2013 note 4acquisition april 1 2015 frank’s international llc texas limited liability company “frank’s llc” indirect whollyowned subsidiary ficv closed transaction immaterial acquisition purchase outstanding equity interests timco services inc timco louisiana corporation strong presence permian basin eagle ford shale regions exchange consideration consisting approximately 810 million inclusive tax reimbursement payment 80 million well closing adjustments normal operating activity customary purchase price adjustments ii contingent consideration 200 million payable two separate payments 100 million based upon exceeding certain targets united states land rotary rig count reported baker hughes prescribed time periods revalued quarter discussed note 11 fair value measurements december 31 2015 contingent consideration fair value approximately 70 thousand addition party agreed indemnify breaches representations warranties breaches covenants certain matters subject certain exceptions timco acquisition accounted business combination accordance accounting guidance described note 11 fair value measurements purchase price allocated fair value assets acquired liabilities assumed based discounted cash flow model goodwill recognized excess consideration transferred fair value net assets recognized 49 million goodwill assigned us services segment deductible tax purposes purchase price allocation finalized fourth quarter 2015 connection timco acquisition acquired intangible assets amount 79 million related customer relationships trade names noncompete clauses intangible assets amortized frank’s international nv notes consolidated financial statements estimated useful lives amortization expense intangible assets timco acquisition 14 million year ended december 31 2015 note 5accounts receivable net accounts receivable december 31 2015 2014 follows thousands 1 amounts represent expenditures behalf nonconsolidated affiliates receivables aircraft charter income note 6inventories inventories december 31 2015 2014 follows thousands frank’s international nv notes consolidated financial statements note 7property plant equipment following summary property plant equipment december 31 2015 2014 thousands 1 estimated useful life presented land improvements land depreciable life depreciation expense approximately 1072 million 894 million 773 million years ended december 31 2015 2014 2013 respectively note 8other assets december 31 2015 2014 consisted following thousands 1 see note 11 fair value measurements frank’s international nv notes consolidated financial statements note 9accrued current liabilities accrued current liabilities december 31 2015 2014 consisted following thousands note 10debt credit facility 1000 million revolving credit facility certain financial institutions including 200 million letters credit 100 million swingline loans matures august 2018 “credit facility” subject terms credit agreement ability increase commitments credit facility 1500 million december 31 2015 2014 outstanding indebtedness credit facility addition 47 million letters credit outstanding december 31 2015 borrowings credit facility bear interest option either base rate adjusted eurodollar rate base rate loans credit facility bear interest rate equal higher prime rate published wall street journal b federal funds effective rate plus 050 c adjusted eurodollar rate plus 100 plus applicable margin ranging 050 150 subject adjustment based leverage ratio interest case payable quarterly baserate loans eurodollar loans credit facility bear interest adjusted eurodollar rate equal eurodollar rate interest period multiplied statutory reserves plus applicable margin ranging 150 250 interest payable end applicable interest periods eurodollar loans except interest period eurodollar loan longer three months interest paid end threemonth period unused portion credit facility subject commitment fee ranging 0250 0375 based certain leverage ratios credit facility contains various covenants among things limit ability grant certain liens make certain loans investments enter mergers acquisitions enter hedging transactions change lines business prepay certain indebtedness enter certain affiliate transactions incur additional indebtedness engage certain asset dispositions credit facility also contains financial covenants among things require us consolidated basis maintain ratio total consolidated funded debt adjusted ebitda defined credit agreement 250 10 ii ratio ebitda interest expense less 30 10 december 31 2015 compliance financial covenants credit facility addition credit facility contains customary events default including among others failure make required payments failure comply certain covenants agreements breach representations covenants contained agreements default certain indebtedness certain events bankruptcy insolvency occurrence change control defined credit agreement frank’s international nv notes consolidated financial statements afco credit corporation insurance notes payable 2015 entered note finance annual insurance premiums 76 million note bears interest annual rate 19 mature october 2016 december 31 2015 total outstanding balance 69 million note 11fair value measurements follow fair value measurement authoritative accounting guidance measuring fair values assets liabilities financial statements fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date exit price utilize market data assumptions market participants independent knowledgeable willing able transact would use pricing asset liability including assumptions risk risks inherent inputs valuation technique able classify fair value balances based observability inputs authoritative guidance fair value measurements establishes three levels fair value hierarchy defined follows • level 1 unadjusted quoted prices identical assets liabilities active markets • level 2 quoted prices markets considered active financial instruments significant inputs observable either directly indirectly substantially full term asset liability • level 3 significant unobservable inputs use little market data exists requiring significant degree judgment hierarchy gives highest priority level 1 measurements lowest priority level 3 measurements depending particular asset liability input availability vary depending factors product type longevity product market particular transaction conditions cases certain inputs used measure fair value may categorized different levels fair value hierarchy disclosure purposes accounting guidance lowest level contains significant inputs used valuation chosen frank’s international nv notes consolidated financial statements financial assets liabilities summary financial assets liabilities measured fair value recurring basis december 31 2015 2014 follows thousands derivative financial instruments consist shortduration foreign currency forward contracts fair value derivative financial instruments based quoted market values including foreign exchange forward rates interest rates fair value computed discounting projected future cash flow amounts present value derivative financial instruments included accounts receivable net consolidated balance sheets investments associated deferred compensation plan consist marketable securities held form investments mutual funds within insurance contracts assets liabilities measured using significant observable inputs reported fair value based thirdparty broker statements derived fair value funds underlying investments marketable securities investments included assets consolidated balance sheets valuation technique used estimate fair value contingent consideration payable connection acquisition timco described note 4 monte carlo simulation lattice optionpricing model uses weekly rig count forecasts june 30 2017 basis simulation contingent consideration included noncurrent liabilities balance sheet frank’s international nv notes consolidated financial statements used following assumptions monte carlo simulation lattice optionpricing model following table sets forth reconciliation changes fair value contingent consideration payable changed result significant reduction rig count forecast contingent consideration classified level 3 fair value hierarchy thousands assets liabilities measured fair value nonrecurring basis apply provisions fair value measurement standard nonrecurring nonfinancial measurements including business combinations well impairment related goodwill longlived assets business combinations purchase price allocated assets acquired liabilities assumed based discounted cash flow model intangibles well market assumptions valuation equipment fixed assets utilize discounted cash flow model evaluating impairment considerations related goodwill longlived assets given unobservable nature inputs discounted cash flow models deemed use level 3 inputs nonrecurring measurements periods presented fair value considerations carrying values consolidated balance sheet cash equivalents trade accounts receivable current assets accounts payable accrued current liabilities lines credit approximate fair values due short maturities note 12 derivatives december 2015 began entering shortduration foreign currency forward derivative contracts reduce risk foreign currency fluctuations use instruments mitigate exposure nonlocal currency operating working capital record contracts fair value consolidated balance sheets although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements income frank’s international nv notes consolidated financial statements december 31 2015 following foreign currency derivative contracts outstanding us dollars thousands following table summarizes location fair value amounts derivative contracts consolidated balance sheets december 31 2015 thousands following table summarize location amounts unrealized gains derivative contracts consolidated income statement december 31 2015 thousands derivative transactions governed international swaps derivatives association isda master agreements include stipulations regarding right offset event counterparty default performance obligations default occur parties right net amounts payable receivable single net settlement parties accounting policy offset derivative assets liabilities executed counterparty master netting arrangement exists following table presents gross net fair values derivatives december 31 2015 thousands note 13preferred stock december 31 2015 2014 52976000 shares series preferred stock par value €001 per share preferred stock issued outstanding held mhi share preferred stock liquidation preference equal par value €001 per share entitled annual dividend equal 025 par value preferred dividend 1506 year ended december 31 2014 paid june 30 2015 expect pay annual dividend year ended december 31 2015 may 2016 additionally share preferred stock frank’s international nv notes consolidated financial statements entitles holder one vote preferred stockholders vote common stockholders single class matters presented finvs shareholders vote mhi right convert portion preferred stock shares common stock delivery equivalent portion interest ficv us accordingly increase interest ficv connection conversion decrease noncontrolling interest financial statements attributable mhis interest ficv december 31 2015 conversions preferred stock exchanges ficv limited partner interests exchanges subject customary conversion rate adjustments stock splits stock dividends reclassifications preferred stock classified outside permanent equity consolidated balance sheet redemption value par plus accrued unpaid dividends conversion provisions solely within control note 14treasury stock december 31 2015 common shares held treasury totaled 514812 cost 93 million shares withheld employees settle personal tax withholding obligations arose result restricted stock units vested note 15related party transactions engaged certain transactions companies related us common ownership entered various operating leases lease office space affiliated partnership rent expense related leases 76 million 74 million 58 million years ended december 31 2015 2014 2013 respectively party certain agreements relating rental aircraft western airways wa entity owned mosing family prior initial public offering ipo entered agreements whereby leased aircraft needed rental fee per hour reimbursed wa management fee hangar rental fees exceeded reimbursement costs recorded net charter income subsequent ipo 2013 entered new agreements wa aircraft retained us whereby paid flat monthly fee dry lease rental charged block hours monthly 2015 amended agreements reflect dry lease wet lease rental whereby charged flat monthly fee earn charter income third party usage recorded net charter expense 20 million 15 million years ended december 31 2015 2014 respectively net charter income 10 million year ended december 31 2013 tax receivable agreement mhi permitted transferees may convert portion preferred stock shares common stock oneforone basis subject customary conversion rate adjustments stock splits stock dividends reclassifications similar transactions delivery equivalent portion interest ficv us “conversion” ficv made election section 754 code pursuant section 754 election future conversion expected result adjustment tax basis tangible intangible assets ficv adjustments allocated finv certain adjustments tax basis tangible intangible assets ficv described would available absent future conversions anticipated basis adjustments expected reduce amount tax finv would otherwise required pay future basis adjustments may also decrease gains increase losses future dispositions certain capital assets extent tax basis allocated capital assets tax receivable agreement tra entered ficv mhi connection ipo generally provides payment finv 85 amount actual reductions payments us federal state local income tax franchise tax reductions refer “cash savings” periods ipo result tax basis increases resulting conversions ii imputed interest deemed paid us result additional tax basis arising payments tra addition tra provides frank’s international nv notes consolidated financial statements payment us interest earned due date without extensions corresponding tax return date payment specified tra retain remaining 15 cash savings payment obligations tra obligations ficv term tra continue tax benefits utilized expired unless exercise right terminate tra estimating amount payments may made tra nature imprecise actual increase tax basis well amount timing payments tra vary depending upon number factors including timing conversions relative value us international assets time conversion price common stock time conversion extent conversions taxable amount timing taxable income finv realizes future tax rate applicable finv’s use loss carryovers portion payments tra constituting imputed interest depreciable amortizable basis finv expects payments required make tra substantial able fund payments may negative impact liquidity result timing discrepancies payments tra exceed actual benefits realize respect tax attributes subject tra payments tra conditioned upon holder rights tra continued ownership interest either ficv finv tra provides finv may terminate early finv elects terminate tra early would required make immediate payment equal present value anticipated future tax benefits subject tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits ficv interests mhi transferees termination date deemed exchanged termination date early termination payment may made significantly advance actual realization future benefits addition payments due tra similarly accelerated following certain mergers changes control situations finv’s obligations tra could substantial negative impact liquidity could effect delaying deferring preventing certain mergers asset sales forms business combinations changes control example tra terminated december 31 2015 estimated termination payment would approximately 455 million calculated using discount rate 567 foregoing number merely estimate actual payment could differ materially finv holding company operations ability make payments tra dependent ability ficv make distributions amount sufficient cover finv’s obligations agreements ability turn may depend ability ficv’s subsidiaries provide payments ability ficv subsidiaries make distributions subject among things applicable provisions dutch law may limit amount funds available distribution restrictions debt instruments extent finv unable make payments tra reason except case acceleration payments thereunder occurring connection early termination tra certain mergers change control payments deferred accrue interest paid finv prohibited paying dividends common stock note 16earnings per common share basic earnings per common share determined dividing net income less preferred stock dividends weighted average number common shares outstanding period diluted earnings per share determined dividing net income attributable common stockholders weighted average number common shares outstanding assuming potentially dilutive shares issued apply treasury stock method determine dilutive weighted average common shares represented unvested restricted stock units espp shares diluted earnings per share calculation assumes conversion 100 outstanding preferred stock converted basis accordingly numerator also adjusted include earnings allocated noncontrolling interest taking account tax effect exchange frank’s international nv notes consolidated financial statements following table summarizes basic diluted earnings per share calculations thousands except per share amounts frank’s international nv notes consolidated financial statements note 17stockbased compensation 2013 longterm incentive plan 2013 longterm incentive plan “ltip” stock options sars restricted stock restricted stock units dividend equivalent rights types equity cash incentive awards may granted employees nonemployee directors service providers ltip expires 10 years unless prior date maximum number shares available issuance plan issued board directors terminates plan 20000000 shares common stock reserved issuance ltip december 31 2015 16038580 shares remained available issuance restricted stock units upon completion ipo pursuant ltip began granting restricted stock units substantially rsus granted ltip vest ratably period two three years certain restricted stock unit awards provide accelerated vesting qualifying terminations employment service employees granted rsus entitled dividends declared underlying shares restricted stock unit unvested grant date fair value award measured reducing grant date price common stock present value dividends expected paid underlying shares requisite service period discounted appropriate riskfree interest rate weighted average grant date fair value rsus granted years ended december 31 2015 2014 2013 146 million 31 million 741 million respectively compensation expense recognized ratably vesting period december 31 2015 assumed annual forfeiture rate lack turnover history type award stockbased compensation expense relating rsus included general administrative expenses consolidated statements income years ended december 31 2015 2014 2013 261 million 384 million 72 million respectively additional 23 million stockbased compensation expense recorded severance charges result reduction efforts mentioned note 20 bringing total stockbased compensation expense recorded 284 million year ended december 31 2015 unamortized stock compensation expense december 31 2015 relating rsus totaled approximately 151 million expensed weighted average period 129 years nonvested rsus outstanding december 31 2015 changes year follows employee stock purchase plan connection completion ipo adopted franks international nv espp became effective january 1 2015 espp eligible employees right purchase shares common stock lesser 85 last reported sale price common stock last trading date immediately preceding first day option period ii 85 last reported sale price common stock last trading date immediately preceding last day option period espp intended qualify employee stock purchase plan section 423 internal revenue code reserved three million shares common frank’s international nv notes consolidated financial statements stock issuance espp shares common stock issued employees espp totaled 20291 shares 2015 year ended december 31 2015 recognized 02 million compensation expense related stock purchased espp january 2016 issued 28454 shares common stock employees plan satisfy employee purchase period july 1 2015 december 31 2015 increased common stock outstanding currently 2951255 shares available plan note 18employee benefit plans us benefit plans 401k savings investment plan franks international llc administers 401k savings investment plan “plan” part employee benefits package employees required complete six months service becoming eligible participate plan october 1 2015 plan amended change service period one month terms plan match 75 employee contributions 3000 annually matching contributions plan totaled 34 million 35 million 29 million years ended december 31 2015 2014 2013 respectively executive deferred compensation plan december 2004 certain affiliates adopted frank’s executive deferred compensation plan “edc plan” purpose edc plan provide participants opportunity defer receipt portion salary bonus specified cash compensation participant contributions immediately vested contributions vest five years service participant benefits edc plan shall paid directly general funds applicable participating subsidiary grantor trust commonly referred rabbi trust created purpose informally funding edc plan rabbi trust special separate fund shall established segregation assets shall made assure payment assets edc plan’s trust invested corporate owned splitdollar life insurance policy amalgamation mutual funds see note 8 recorded compensation expense related vesting company’s contribution 19 million 23 million 21 million years ended december 31 2015 2014 2013 respectively total liability recorded december 31 2015 2014 related edc plan 436 million 430 million respectively included noncurrent liabilities consolidated balance sheets foreign benefit plans sponsor certain benefit plans dictated host country law recorded expense related foreign benefit plans 55 million 66 million 44 million years ended december 31 2015 2014 2013 respectively note 19income taxes income continuing operations income tax expense comprised following periods indicated thousands frank’s international nv notes consolidated financial statements income taxes provided based upon tax laws rates countries operations conducted income earned components income tax expense consist following periods indicated thousands foreign taxes incurred following regions periods indicated thousands reconciliation differences income tax provision computed us statutory rate reported provision income taxes periods indicated follows thousands reconciliation using netherlands statutory rate provided significant operations netherlands frank’s international nv notes consolidated financial statements deferred tax assets liabilities recorded anticipated future tax effects temporary differences financial statement basis tax basis assets liabilities using applicable tax rates effect yearend valuation allowance recorded likely benefit deferred tax asset realized significant components deferred tax assets liabilities follows thousands undistributed earnings certain foreign subsidiaries amounted approximately 5000 million december 31 2015 intention permanently reinvest undistributed earnings profits subsidiaries consolidated companies’ operations generated december 31 2015 future plans demonstrate need repatriate foreign amounts fund parent company activity december 31 2015 2014 total gross unrecognized tax benefits 01 million 03 million respectively substantially uncertain tax positions recognized future would impact effective tax rate elected classify interest penalties incurred income taxes income tax expense file income tax returns various international tax jurisdictions december 31 2015 tax years 2009 2015 remain open examination major foreign taxing jurisdictions subject currently audit internal revenue service tax period ending june 30 2014 expect material adjustments resulting audit note 20severance charges 2015 executed workforce reduction plan part cost savings initiatives due depressed oil gas prices reduction communicated affected employees various dates plan resulted reduction approximately 800 employees january 5 2016 announced transition chairman board supervisory directors also held role executive chairman company nonexecutive director supervisory board effective december 31 2015 frank’s international nv notes consolidated financial statements recorded expenses approximately 355 million year ended december 31 2015 included cash severance payments accelerated vesting rsu grants certain individuals employeerelated termination costs well base rationalization lease termination fees costs reflected consolidated statements income severance charges december 31 2015 222 million liability reconciliation beginning ending liability balance thousands expect pay significant portion remaining liability later third quarter 2016 note 21commitments contingencies commitments committed various noncancelable operating lease agreements primarily related facilities equipment expire various dates throughout next several years future minimum lease commitments noncancelable operating leases initial remaining terms one year december 31 2015 follows thousands total rent expense incurred operating leases 196 million 172 million 129 million years ended december 31 2015 2014 2013 respectively contingencies subject lawsuits claims arising ordinary course business time liability accrued loss probable reasonable estimated december 31 2015 material accruals loss contingencies individually aggregate believe probability remote ultimate outcome matters would material adverse effect financial position results operations cash flows frank’s international nv notes consolidated financial statements note 22supplemental cash flow information supplemental cash flows noncash transactions follows periods indicated thousands note 23segment information reporting segments operating segments defined components enterprise separate financial information available regularly evaluated chief operating decision maker “codm” deciding allocate resources assess performance comprised three reportable segments international services us services tubular sales international services segment provides tubular services international offshore markets several onshore international regions customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies us services segment provides tubular services almost active onshore oil gas drilling regions us including permian basin bakken shale barnett shale eagle ford shale haynesville shale marcellus shale utica shale well us gulf mexico tubular sales segment designs manufactures distributes large outside diameter od pipe connectors casing attachments sells large od pipe originally manufactured various pipe mills also provide specialized fabrication welding services support offshore projects including drilling production risers flowlines pipeline end terminations well long length tubulars 300 feet length use caissons pilings segment also designs manufactures proprietary equipment use international us services segments operating results tubular sales component sold june 2013 accounted discontinued operations excluded segment results adjusted ebitda define adjusted ebitda income continuing operations net interest income expense depreciation amortization income tax benefit expense asset impairments gain loss sale assets foreign currency gain loss stockbased compensation noncash adjustments unusual charges review adjusted ebitda consolidated basis segment basis use adjusted ebitda assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization items outside control management team income tax rates adjusted ebitda limitations analytical tool considered alternative net income operating income cash frank’s international nv notes consolidated financial statements flow operating activities measure financial performance liquidity presented accordance generally accepted accounting principles us gaap codm uses adjusted ebitda primary measure segment reporting performance following table presents reconciliation segment adjusted ebitda income continuing operations thousands 1 represents charges incurred connection ipo primarily amounts attributable restructuring advance ipo frank’s international nv notes consolidated financial statements following table sets forth certain financial information respect reportable segments included “corporate other” intersegment eliminations costs associated activities general nature thousands codm review total assets segment part financial information provided therefore asset information provided table frank’s international nv notes consolidated financial statements netherlands based company derive revenue services product sales clients primarily oil gas industry single customer accounted 10 revenue years ended december 31 2015 2014 2013 geographic areas revenue generated netherlands immaterial years ended december 31 2015 2014 2013 united states dubai revenues 1404 million individual country represented 10 revenue year ended december 31 2015 united states individual country represented 10 revenue years ended december 31 2014 2013 based unique nature operating structure revenue generating assets interchangeable international countries separately identifiable revenues customers longlived assets netherlands insignificant years presented frank’s international nv notes consolidated financial statements note 24quarterly financial data unaudited summarized quarterly financial data years ended december 31 2015 2014 set forth thousands except per share data 1 sum individual quarterly earnings per share amounts may agree yeartodate net income per common share quarterly computation based weighted average number common shares outstanding period item 9item 8 financial statements supplementary data managements report internal control financial reporting management company including chief executive officer chief financial officer responsible establishing maintaining adequate internal control financial reporting defined rules 13a15f 15d15f securities exchange act 1934 amended internal control financial reporting process designed supervision chief executive officer chief financial officer provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures made accordance authorizations management directors iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition assets could material effect financial statements conducted evaluation effectiveness internal control financial reporting december 31 2016 based internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 based evaluation management concluded internal control financial reporting effective december 31 2016 effectiveness internal control financial reporting december 31 2016 audited pricewaterhousecoopers llp independent registered public accounting firm stated report included herein report independent registered public accounting firm board supervisory directors stockholders frank’s international nv opinion accompanying consolidated balance sheets related consolidated statements operations comprehensive income loss stockholders’ equity cash flows present fairly material respects financial position frank’s international nv subsidiaries december 31 2016 2015 results operations cash flows three years period ended december 31 2016 conformity accounting principles generally accepted united states america addition opinion financial statement schedule listed index appearing item 15 2 presents fairly material respects information set forth therein read conjunction related consolidated financial statements also opinion company maintained material respects effective internal control financial reporting december 31 2016 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission coso companys management responsible financial statements financial statement schedule maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinions financial statements financial statement schedule companys internal control financial reporting based integrated audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement whether effective internal control financial reporting maintained material respects audits financial statements included examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audits also included performing procedures considered necessary circumstances believe audits provide reasonable basis opinions company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp houston texas february 24 2017 accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements frank’s international nv notes consolidated financial statements note 1basis presentation significant accounting policies nature business frank’s international nv finv limited liability company organized laws netherlands global provider highly engineered tubular services tubular fabrication specialty well construction well intervention solutions oil gas industry finv provides services leading exploration production companies offshore onshore environments focus complex technically demanding wells basis presentation consolidated financial statements finv years ended december 31 2016 2015 2014 include activities franks international cv ficv wholly owned subsidiaries collectively company us intercompany accounts transactions eliminated purposes preparing consolidated financial statements accompanying consolidated financial statements related financial information prepared accordance generally accepted accounting principles united states america gaap opinion management consolidated financial statements reflect adjustments consisting solely normal accruals necessary fair presentation financial results periods presented consolidated financial statements prepared historical cost basis using united states dollar reporting currency functional currency primarily united states dollar outofperiod adjustment review three months ended june 30 2014 identified noncash error originated prior periods error related attribution cost sharebased compensation requisite service periods retirementeligible employees awards made pursuant 2013 longterm incentive plan generally provided awards vest employee retires requisite service period awards extend beyond date employee becomes eligible retire causes requisite service period either two years period grant date employee becomes retirement eligible second quarter 2014 discovered sharebased compensation expense related retirementeligible employees cumulatively understated first quarter 2014 approximately 75 million errors immaterial periods arose corrected correction recorded outofperiod adjustment second quarter 2014 included general administrative expenses consolidated statements operations significant accounting policies accounting estimates preparation consolidated financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date consolidated financial statements reported amounts revenues expenses reporting period actual results could differ estimates accounts receivable establish allowance doubtful accounts based various factors including historical experience current aging status customer accounts financial condition customers business political environment customers operate provisions doubtful accounts recorded becomes probable customer accounts uncollectible frank’s international nv notes consolidated financial statements cash equivalents consider highly liquid financial instruments purchased original maturity three months less cash equivalents throughout year cash balances excess federally insured limits deposited various financial institutions experienced losses accounts believe exposed significant credit risk cash equivalents comprehensive income accounting standards reporting comprehensive income require certain items including foreign currency translation adjustments unrealized gains losses marketable securities presented components comprehensive income cumulative amounts recognized us standards reflected consolidated balance sheet accumulated comprehensive income component stockholders’ equity contingencies certain conditions may exist date consolidated financial statements issued may result loss us resolved one future events occur fail occur management input legal counsel assesses contingent liabilities assessment inherently involves exercise judgment assessing loss contingencies related legal proceedings pending us unasserted claims may result proceedings management input legal counsel evaluates perceived merits legal proceedings unasserted claims well perceived merits amount relief sought expected sought therein assessment contingency indicates probable material loss incurred amount liability estimated liability would accrued consolidated financial statements assessment indicates potentially material loss contingency probable reasonably possible probable cannot estimated nature contingent liability together estimate range possible loss determinable material disclosed loss contingencies considered remote generally disclosed unless involve guarantees case guarantees would disclosed derivative financial instruments deem appropriate use foreign currency forward derivative contracts mitigate risk fluctuations foreign currency exchange rates use instruments mitigate exposure nonlocal currency working capital hold issue financial instruments trading speculative purposes account derivative activities provisions accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations earnings loss per share basic earnings loss per share excludes dilution computed dividing net income available common shareholders weighted average number common shares outstanding period diluted earnings loss per share reflects potential dilution could occur securities issue common stock exercised converted common stock frank’s international nv notes consolidated financial statements fair value financial instruments financial instruments consist primarily cash equivalents trade accounts receivable availableforsale securities derivative financial instruments obligations trade accounts payable short longterm debt due shortterm nature carrying values cash equivalents trade accounts receivable trade accounts payable approximate fair value refer note 10 fair value measurements fair values availableforsale securities derivative financial instruments obligations foreign currency translations transactions results operations foreign subsidiaries functional currencies us dollar translated using average exchange rates period assets liabilities foreign subsidiaries translated using exchange rates effect balance sheet dates gains losses resulting translations included accumulated comprehensive income within stockholders’ equity foreign subsidiaries designated us dollar functional currency gains losses resulting balance sheet remeasurement foreign operations included consolidated statements operations incurred gains losses resulting transactions denominated foreign currency also included consolidated statements operations incurred goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount two step impairment test performed first fair value reporting unit compared carrying value determine whether indication impairment exists impairment indicated fair value reporting unit’s goodwill determined allocating unit’s fair value assets liabilities including unrecognized intangible assets reporting unit acquired business combination amount impairment goodwill measured excess carrying value fair value complete assessment goodwill impairment december 31 year impairment recorded years ended december 31 2016 2015 2014 goodwill allocated operating segments follows us services approximately 162 million tubular sales approximately 24 million blackhawk approximately 1924 million inputs used determination fair value generally level 3 inputs see note 10 fair value measurements notes consolidated financial statements discussion fair value measures impairment longlived assets longlived assets include property plant equipment certain assets held used us reviewed events changes circumstances indicate carrying amount assets may recoverable based estimated future cash flows assessment indicates carrying values recoverable determined based undiscounted cash flows remaining useful lives impairment loss recognized based fair value asset income taxes operate many legal forms approximately 60 countries result subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events changes tax laws regulations agreements treaties frank’s international nv notes consolidated financial statements foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact upon amount income taxes provide given year ficv treated partnership us federal income tax purposes domestic subsidiaries classified limited liability companies subject federal state income taxation partner ficv subject us taxation allocable share us taxable income noncontrolling member pay taxes respect allocable share us taxable income provide income tax expense based liability method accounting income taxes based authoritative accounting guidance deferred tax assets liabilities recorded based upon temporary differences tax basis assets liabilities carrying values financial reporting purposes measured using enacted marginal rates laws effect differences expected reverse deferred tax expense benefit result changes deferred tax assets liabilities period impact uncertain tax position taken expected taken income tax return recognized financial statements largest amount likely sustained upon examination relevant taxing authority intangible assets intangible assets comprised licenses customer relationships trade names intellectual property noncompete agreements identifiable intangible assets amortized using straightline method estimated useful lives assets evaluate impairment intangible assets individual basis whenever circumstances indicate carrying value may recoverable intangible assets deemed impaired written fair value discounted cash flows available comparable market values following table provides information related intangible assets december 31 2016 2015 thousands frank’s international nv notes consolidated financial statements amortization expense intangibles assets 35 million 18 million 07 million years ended december 31 2016 2015 2014 respectively december 31 2016 estimated amortization expense intangible assets next five years follows thousands inventories stated lower cost primarily average cost market value work progress finished goods include cost materials labor manufacturing overhead inventory placed service either capitalized included equipment expensed based upon capitalization policies marketable securities cash surrender value life insurance policies marketable securities publicly traded equity securities indirect result strategic investments classified availableforsale reported fair value see note 7 assets unrealized gains losses reported component stockholders’ equity also cash surrender value life insurance policies held within rabbi trust purpose paying future executive deferred compensation benefit obligations unrealized realized gains losses marketable securities included income consolidated statements operations net realized impairment loss reduce investment’s carrying amount fair market value recognized income decline fair market value individual security cost carrying value determined temporary realized gains losses investments 11 million 07 million 14 million years ended december 31 2016 2015 2014 respectively property plant equipment property plant equipment stated cost less accumulated depreciation expenditures significant improvements betterments capitalized enhance extend useful life asset expenditures routine repairs maintenance improve extend life related assets expensed incurred properties equipment sold retired otherwise disposed related cost accumulated depreciation removed books resulting gain loss recognized consolidated statements operations depreciation fixed assets computed using straightline method estimated useful lives individual assets leasehold improvements amortized straightline basis shorter estimated useful lives lease term depreciation fixed assets recorded capital lease agreements included depreciation expense frank’s international nv notes consolidated financial statements revenue recognition revenue recognized following criteria met 1 evidence arrangement exists 2 delivery acceptance customer occurred 3 price customer fixed determinable 4 collectability reasonably assured follows services revenue provide tubular well construction services clients oil gas industry perform services either direct service purchase orders master service agreements service revenue recognized services performed rendered • international service hours billed per man hour similar basis • us services billed offshore per day similar basis ii land per man hour project basis • blackhawk services billed primarily per day basis domestic international rental revenue design manufacture suite highly technical equipment products rent customers connection providing services including highend proprietary tubular handling well construction equipment rent products either direct rental agreements customers rental agreements place revenue rental agreements recognized earned rental period • international equipment rentals billed per month similar basis • us equipment rentals billed offshore per day similar basis ii land completion job project basis • blackhawk services billed offshore land per day basis minimum days requirements ii international negotiated contracts primarily based monthly rentals customers contracted direct service purchase orders direct rental agreements accrual recorded unbilled accounts receivable revenue earned yet invoiced tubular sales blackhawk revenue tubular blackhawk sales recognized product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions postdelivery obligations tubular sales well construction customers requested store pipe connectors products purchased us facilities considered whether revenue recognized sales “bill hold” guidance provided sec staff however based upon assessment performed revenue recognition transactions totaling 181 million 576 million deferred december 31 2016 2015 respectively stockbased compensation 2013 longterm incentive plan provides granting stock options stock appreciation rights “sars” restricted stock restricted stock units rsus dividend equivalent rights types equity cash incentive awards employees nonemployee directors service providers stockbased compensation expense measured grant date sharebased awards based value recognized straightline basis vesting period net estimated forfeiture rate included general administrative expense consolidated statements operations frank’s international nv notes consolidated financial statements stockbased compensation currently consists rsus grant date fair value rsus entitled receive dividends vested measured reducing share price date present value dividends expected paid requisite vesting period discounted appropriate riskfree interest rate recent accounting pronouncements changes gaap established financial accounting standards board fasb form accounting standards updates asus fasb’s accounting standards codification consider applicability impact asus listed assessed determined either applicable expected minimal impact consolidated financial position results operations january 2017 fasb issued new accounting guidance simplifying test goodwill impairment original guidance entity required perform additional analysis step 2 measures goodwill impairment loss comparing implied fair value report unit’s goodwill carrying amount goodwill fasb simplifies subsequent measurement goodwill eliminating step 2 instead amendments update entity perform annual interim goodwill impairment test comparing fair value reporting unit carrying amount excess carrying value fair value recognized loss impairment addition income tax effects tax deductible goodwill considered measuring goodwill impairment loss applicable amendments update effective public companies annual interim goodwill impairment tests fiscal years beginning december 15 2020 early adoption permitted management early adopt provisions new accounting guidance companys annual goodwill impairment analysis year ended december 31 2017 january 2017 fasb issued new accounting guidance business combinations clarifying definition business objective guidance help companies organizations acquired sold business evaluate whether transactions accounted acquisitions disposals assets businesses public entities guidance effective annual periods beginning december 15 2017 including interim periods within periods early adoption permitted certain circumstances management evaluating provisions new accounting guidance including period adopt determined impact adoption consolidated financial statements october 2016 fasb issued new accounting guidance recognition income tax consequences intraentity transfer asset inventory objective guidance eliminate exception intraentity transfer asset inventory requires entity recognize income tax consequences time transfer rather asset sold third party public entities guidance effective annual reporting periods beginning december 15 2017 including interim reporting periods within annual reporting periods early adoption permitted beginning annual reporting period financial statements yet issued management evaluating provisions new accounting guidance including period adopt determined impact adoption consolidated financial statements august 2016 fasb issued new accounting guidance classification certain cash receipts cash payments statement cash flows objective guidance reduce existing diversity practice related presentation classification certain cash receipts cash payments guidance addresses eight specific cash flow issues including limited debt prepayment extinguishment costs contingent consideration payments made business combination proceeds settlement insurance claims proceeds settlement corporateowned life insurance policies public entities guidance effective financial statements issued fiscal years beginning december 15 2017 including interim periods within fiscal years retrospective periods presented early adoption permitted including interim periods frank’s international nv notes consolidated financial statements management evaluating provisions new accounting guidance including period adopt determined impact adoption consolidated financial statements june 2016 fasb issued new accounting guidance credit losses financial instruments guidance includes replacement “incurred loss” approach recognizing credit losses financial assets including trade receivables methodology reflects expected credit losses considers historical current information well reasonable supportable forecasts public entities guidance effective financial statements issued fiscal years beginning december 15 2019 including interim periods within fiscal years early application permitted entities fiscal years beginning december 15 2018 including interim periods within fiscal years management evaluating provisions new accounting guidance including period adopt determined impact adoption consolidated financial statements march 2016 fasb issued accounting guidance equity compensation simplifies accounting taxes related equitybased compensation including adjustments excess tax benefits companys payments tax withholdings classified asu also gives option recognize actual forfeitures occur clarifies statement cash flow presentation certain components sharebased awards guidance effective fiscal years interim periods within years beginning december 31 2016 adoption guidance expected material impact consolidated financial statements february 2016 fasb issued accounting guidance leases main objective accounting guidance increase transparency comparability among organizations recognizing lease assets lease liabilities balance sheet disclosing key information leasing arrangements main difference previous gaap new guidance recognition lease assets lease liabilities lessees leases classified operating leases new guidance requires lessees recognize assets liabilities arising leases balance sheet defines lease contract conveys right control use identified property plant equipment period time exchange consideration control use identified asset means customer 1 right obtain substantially economic benefit use asset 2 right direct use asset accounting guidance requires disclosures lessees lessors meet objective enabling users financial statements assess amount timing uncertainty cash flows arising leases transition lessees lessors required recognize measure leases beginning earliest period presented using modified retrospective approach public entities guidance effective financial statements issued fiscal years beginning december 15 2018 including interim periods within fiscal years early application permitted currently evaluating impact accounting standard update consolidated financial statements january 2016 fasb issued accounting guidance recognition measurement financial assets financial liabilities guidance equity investments measured fair value changes fair value recognized net income guidance requires public businesses use exit price notion measuring fair value financial instruments disclosure purposes requires separate presentation financial assets financial liabilities measurement category form financial asset guidance also eliminates requirement public business entities disclose methods significant assumptions used estimate fair value required disclosed financial instruments measured amortized cost guidance applicable equity investments accounted equity method accounting guidance effective interim annual periods beginning december 15 2017 management believe adoption material impact consolidated financial statements november 2015 fasb issued accounting guidance classification presentation deferred taxes guidance eliminates current requirement organizations present deferred tax liabilities assets current noncurrent classified balance sheet guidance requires deferred tax assets liabilities classified noncurrent guidance effective interim annual periods beginning december 15 2016 early adoption permitted amendments guidance may applied either prospectively deferred tax liabilities frank’s international nv notes consolidated financial statements assets retrospectively periods presented adopted guidance december 31 2015 adoption material impact consolidated financial statements july 2015 fasb issued accounting guidance simplifying measurement inventory guidance inventory measured lower cost net realizable value options currently exist market value eliminated guidance defines net realizable value estimated selling prices ordinary course business less reasonably predictable costs completion disposal transportation changes made current guidance inventory measurement guidance effective interim annual periods beginning december 15 2016 early application permitted applied prospectively adoption guidance material impact consolidated financial statements february 2015 fasb issued guidance amendments consolidation analysis affects reporting entities required evaluate whether consolidate certain legal entities legal entities subject reevaluation revised consolidation model specifically amendments 1 modify evaluation whether limited partnerships similar legal entities variable interest entities vies voting interest entities 2 eliminate presumption general partner consolidate limited partnership 3 affect consolidation analysis reporting entities involved vies particularly fee arrangements related party relationships 4 provide scope exception consolidation guidance reporting entities interest legal entities required comply operate accordance requirements similar registered money market funds adopted guidance january 1 2016 adoption material impact consolidated financial statements january 2015 fasb issued guidance income statement presentation eliminates concept extraordinary items retaining certain presentation disclosure guidance items unusual nature occur infrequently adopted guidance january 1 2016 adoption material impact consolidated financial statements august 2014 fasb issued accounting guidance disclosure uncertainties entitys ability continue going concern update required management assess entity’s ability continue going concern incorporating expanding upon certain principles currently us auditing standards guidance effective annual period ending december 15 2016 annual periods interim periods thereafter adoption guidance material impact consolidated financial statements may 2014 fasb issued amendments guidance recognition revenue based upon entity’s contracts customers transfer goods services new standard update entity recognize revenue depict transfer promised goods services customers amount reflects consideration entity expects entitled exchange goods services july 9 2015 fasb deferred effective date one year december 15 2017 annual reporting periods beginning date fasb also permit early adoption standard original effective date december 15 2016 implementation efforts include identification revenue within scope guidance evaluation certain revenue contracts evaluation impact new guidance consolidated financial statements ongoing continue evaluate timing recognition various revenues may accelerated deferred depending features customer arrangements presentation certain contract costs whether presented gross offset revenues note 2noncontrolling interest hold economic interest ficv responsible operational management administrative decisions relating ficv’s business result financial results ficv consolidated recorded noncontrolling interest consolidated balance sheet respect remaining economic interest ficv held mosing holdings llc mosing holdings net income loss attributable noncontrolling interest statements operations represented portion earnings losses attributable economic interest frank’s international nv notes consolidated financial statements ficv held mosing holdings allocable domestic income loss ficv finv subject us taxation effective august 2016 conversion mosing holdings series preferred stock see note 12 preferred stock mosing holdings transferred interest ficv us noncontrolling interest eliminated result amount included net income loss attributable noncontrolling interest year ended december 31 2016 august 26 2016 reconciliation net income loss attributable noncontrolling interest detailed follows thousands 1 represents net loss august 26 2016 mosing holdings transferred interest finv 2 represents income tax expense benefit entities outside ficv well income tax attributable proportionate share us operations partnership interests ficv august 26 2016 3 represents results operations entities outside ficv august 26 2016 4 represents economic interest ficv held mosing holdings preferred stock conversion august 26 2016 percentage changed additional shares finv common stock issued effective august 26 2016 mosing holdings delivered economic interest ficv us note 3acquisitions blackhawk november 1 2016 completed transaction acquire outstanding shares blackhawk group holdings inc ultimate parent company blackhawk specialty tools llc blackhawk pursuant terms definitive merger agreement merger agreement dated october 6 2016 blackhawk leading provider well construction well intervention services products conjunction acquisition fi tools holdings llc newly formed subsidiary merged blackhawk surviving merger whollyowned subsidiary merger consideration comprised combination 1504 million cash hand 128 million shares common stock common stock cashfree debtfree basis total consideration 2946 million based closing share price october 31 2016 1125 including working capital adjustments accordingly results blackhawks operations november 1 2016 included consolidated financial statements year ended december 31 2016 blackhawk contributed revenue 100 million operating losses 74 million accordance accounting guidance business combinations unaudited pro forma financial information presented assumes acquisition completed january 1 2015 first day fiscal year 2015 unaudited pro forma financial information necessarily represent would occurred transaction taken place date presented taken representative future consolidated results operations unaudited pro forma financial information includes adjustments amortization expense identified intangible assets depreciation expense based fair value estimated lives acquired property plant equipment addition acquisition related costs excluded unaudited pro forma financial information frank’s international nv notes consolidated financial statements following table shows unaudited financial information years ended december 31 2016 2015 respectively thousands except per share amounts blackhawk acquisition accounted business combination described note 10 fair value measurements purchase price allocated fair value assets acquired liabilities assumed based discounted cash flow model goodwill recognized excess consideration transferred fair value net assets use best estimates assumptions part purchase price allocation process accurately value assets acquired liabilities assumed business combination date estimates assumptions inherently uncertain subject refinement result purchase price allocation period generally 1 year business combination date record adjustments assets acquired liabilities assumed corresponding offset goodwill adjustments result impact consolidated statements operations following table summarizes fair values assets acquired liabilities assumed part blackhawk acquisition determined accordance business combination accounting guidance thousands amount allocated intangible assets attributed following categories thousands frank’s international nv notes consolidated financial statements intangible assets amortized straightline basis presented depreciation amortization consolidated statements operations intention transaction augment tubular services business providing us opportunity diversify offerings emerge leader new business line significantly larger addressable market addition believe line wellregarded market leading technically differentiated specialty cementation tools blackhawk also provides well intervention products line brute packers related products continuing development products onshore offshore applications conjunction merger created fourth segment blackhawk recorded goodwill 1924 million segment timco april 1 2015 frank’s international llc texas limited liability company “frank’s llc” indirect whollyowned subsidiary ficv completed transaction significant acquisition purchase outstanding equity interests timco services inc timco louisiana corporation strong presence permian basin eagle ford shale regions exchange consideration consisting approximately 810 million inclusive tax reimbursement payment 80 million well closing adjustments normal operating activity customary purchase price adjustments ii contingent consideration 200 million payable two separate payments 100 million based upon exceeding certain targets united states land rotary rig count reported baker hughes prescribed time periods december 31 2016 contingent consideration fair value approximately 70 thousand due low rig count obligated make first contingent consideration payment due december 31 2016 addition party agreed indemnify breaches representations warranties breaches covenants certain matters subject certain exceptions timco acquisition accounted business combination accordance accounting guidance purchase price allocated fair value assets acquired liabilities assumed based discounted cash flow model goodwill recognized excess consideration transferred fair value net assets recognized 49 million goodwill assigned us services segment deductible tax purposes purchase price allocation finalized fourth quarter 2015 connection timco acquisition acquired intangible assets amount 79 million related customer relationships trade names noncompete clauses intangible assets amortized estimated useful lives amortization expense intangible assets timco acquisition 18 million 14 million years ended december 31 2016 2015 respectively note 4accounts receivable net accounts receivable december 31 2016 2015 follows thousands 1 amounts represent expenditures behalf nonconsolidated affiliates receivables aircraft charter income frank’s international nv notes consolidated financial statements note 5inventories inventories december 31 2016 2015 follows thousands note 6property plant equipment following summary property plant equipment december 31 2016 2015 thousands depreciation expense approximately 1107 million 1072 million 894 million years ended december 31 2016 2015 2014 respectively frank’s international nv notes consolidated financial statements note 7other assets december 31 2016 2015 consisted following thousands 1 see note 10 fair value measurements 2 see note 18 income taxes note 8accrued current liabilities accrued current liabilities december 31 2016 2015 consisted following thousands note 9debt credit facility 1000 million revolving credit facility certain financial institutions including 200 million letters credit 100 million swingline loans matures august 2018 “credit facility” subject terms credit facility ability increase commitments 1500 million december 31 2016 2015 outstanding indebtedness credit facility addition 37 million 47 million letters credit outstanding december 31 2016 2015 respectively december 31 2016 ability borrow credit facility reduced approximately 50 million 100 million result decreased adjusted ebitda borrowing capacity credit facility could reduced eliminated depending future adjusted ebitda seek multiquarter covenant waiver sometime first quarter 2017 borrowings credit facility bear interest option either base rate adjusted eurodollar rate base rate loans credit facility bear interest rate equal higher prime rate published wall street journal ii federal funds effective rate plus 050 iii adjusted eurodollar rate plus 100 plus applicable margin ranging 050 150 subject adjustment based leverage ratio interest case payable quarterly baserate loans eurodollar loans credit facility bear interest frank’s international nv notes consolidated financial statements adjusted eurodollar rate equal eurodollar rate interest period multiplied statutory reserves plus applicable margin ranging 150 250 interest payable end applicable interest periods eurodollar loans except interest period eurodollar loan longer three months interest paid end threemonth period unused portion credit facility subject commitment fee ranging 0250 0375 based certain leverage ratios credit facility contains various covenants among things limit ability grant certain liens make certain loans investments enter mergers acquisitions enter hedging transactions change lines business prepay certain indebtedness enter certain affiliate transactions incur additional indebtedness engage certain asset dispositions credit facility also contains financial covenants among things require us consolidated basis maintain ratio total consolidated funded debt adjusted ebitda defined credit agreement 250 10 ii ratio ebitda interest expense less 30 10 december 31 2016 compliance financial covenants credit facility addition credit facility contains customary events default including among others failure make required payments failure comply certain covenants agreements breach representations covenants contained agreements default certain indebtedness certain events bankruptcy insolvency occurrence change control citibank credit facility 2016 entered threeyear credit facility citibank na uae branch amount 60 million issuance standby letters credit guarantees credit facility also allows open ended guarantees outstanding amounts credit facility bear interest 125 per annum amounts outstanding one year amounts outstanding one year bear interest 15 per annum december 31 2016 22 million letters credit outstanding afco credit corporation insurance notes payable 2015 entered note finance annual insurance premiums 76 million note bore interest annual rate 19 matured october 2016 december 31 2016 outstanding balance december 31 2015 total outstanding balance 69 million note 10fair value measurements follow fair value measurement authoritative accounting guidance measuring fair values assets liabilities financial statements fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date utilize market data assumptions market participants independent knowledgeable willing able transact would use pricing asset liability including assumptions risk risks inherent inputs valuation technique able classify fair value balances based observability inputs authoritative guidance fair value measurements establishes three levels fair value hierarchy defined follows • level 1 unadjusted quoted prices identical assets liabilities active markets • level 2 quoted prices markets considered active financial instruments significant inputs observable either directly indirectly substantially full term asset liability • level 3 significant unobservable inputs use little market data exists requiring significant degree judgment frank’s international nv notes consolidated financial statements hierarchy gives highest priority level 1 measurements lowest priority level 3 measurements depending particular asset liability input availability vary depending factors product type longevity product market particular transaction conditions cases certain inputs used measure fair value may categorized different levels fair value hierarchy disclosure purposes accounting guidance lowest level contains significant inputs used valuation chosen financial assets liabilities summary financial assets liabilities measured fair value recurring basis december 31 2016 2015 follows thousands derivative financial instruments consist shortduration foreign currency forward contracts fair value derivative financial instruments based quoted market values including foreign exchange forward rates interest rates fair value computed discounting projected future cash flow amounts present value december 31 2016 2015 derivative financial instruments included accounts receivable net consolidated balance sheets investment associated deferred compensation plan consists primarily cash surrender value life insurance policies included assets consolidated balance sheets investment changes result contributions payments fluctuations market assets liabilities measured using significant observable inputs reported fair value based thirdparty broker statements derived fair value funds underlying investments also marketable securities publicly traded equity securities indirect result strategic investments reported fair value based price stock included assets consolidated balance sheets frank’s international nv notes consolidated financial statements assets liabilities measured fair value nonrecurring basis apply provisions fair value measurement standard nonrecurring nonfinancial measurements including business combinations well impairment related goodwill longlived assets business combinations see note 3 acquisitions purchase price allocated assets acquired liabilities assumed based discounted cash flow model intangibles well market assumptions valuation equipment fixed assets utilize discounted cash flow model evaluating impairment considerations related goodwill longlived assets given unobservable nature inputs discounted cash flow models deemed use level 3 inputs fair value considerations carrying values consolidated balance sheet cash equivalents trade accounts receivable current assets accounts payable accrued current liabilities lines credit approximate fair values due short maturities note 11 derivatives december 2015 began entering shortduration foreign currency forward derivative contracts reduce risk foreign currency fluctuations use instruments mitigate exposure nonlocal currency operating working capital record contracts fair value consolidated balance sheets although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations december 31 2016 2015 following foreign currency derivative contracts outstanding us dollars thousands following table summarizes location fair value amounts derivative contracts consolidated balance sheets december 31 2016 2015 thousands frank’s international nv notes consolidated financial statements following table summarize location amounts unrealized gains derivative contracts consolidated statements operations december 31 2016 2015 thousands derivative transactions governed international swaps derivatives association isda master agreements include stipulations regarding right offset event counterparty default performance obligations default occur parties right net amounts payable receivable single net settlement parties accounting policy offset derivative assets liabilities executed counterparty master netting arrangement exists following table presents gross net fair values derivatives december 31 2016 2015 thousands note 12preferred stock december 31 2015 52976000 shares series preferred stock par value €001 per share preferred stock issued outstanding held mosing holdings share preferred stock liquidation preference equal par value €001 per share entitled annual dividend equal 025 par value paid annual dividend year ended december 31 2015 1476 june 3 2016 additionally share preferred stock entitled holder one vote preferred stockholders voted common stockholders single class matters presented finvs shareholders vote conversion mosing holdings right convert portion preferred stock shares common stock delivery equivalent portion interest ficv us accordingly increase interest ficv connection conversion would decrease noncontrolling interest financial statements attributable mosing holdings interest ficv august 19 2016 received notice mosing holdings exercising right exchange 52976000 common shares following securities 52976000 shares preferred stock ii 52976000 frank’s international nv notes consolidated financial statements units ficv august 26 2016 issued 52976000 common shares mosing holdings upon conversion preferred stock issued outstanding convertible preferred shares number common shares authorized capital increased 52976000 shares equal number convertible preferred shares converted common shares additionally upon exchange convertible preferred stock mosing holdings entitled receive amount cash equal nominal value convertible preferred share plus accrued unpaid dividends respect stock cash payment 06 million paid september 23 2016 conjunction conversion mosing holdings delivered interest ficv us longer owns interest ficv result transaction also reallocated accumulated comprehensive loss attributable noncontrolling interest preferred stock classified outside permanent equity consolidated balance sheet redemption value par plus accrued unpaid dividends conversion provisions solely within control note 13treasury stock december 31 2016 common shares held treasury totaled 759929 cost 126 million december 31 2015 common shares held treasury totaled 514812 cost 93 million shares withheld employees settle personal tax withholding obligations arose result restricted stock units vested note 14related party transactions engaged certain transactions companies related us common ownership entered various operating leases lease office space affiliated company rent expense related leases 80 million 76 million 74 million years ended december 31 2016 2015 2014 respectively party certain agreements relating rental aircraft western airways inc wa entity controlled mosing family wa agreements reflect dry lease wet lease rental whereby charged flat monthly fee primarily crew hangar maintenance administration costs addition variable costs fuel maintenance also earn charter income third party usage revenue sharing agreement recorded net charter expense 13 million 20 million 15 million years ended december 31 2016 2015 2014 respectively tax receivable agreement mosing holdings permitted transferees converted preferred stock shares common stock oneforone basis august 26 2016 subject customary conversion rate adjustments stock splits stock dividends reclassifications similar transactions delivery equivalent portion interests ficv us “conversion” ficv make election section 754 code pursuant section 754 election conversion result adjustment tax basis tangible intangible assets ficv respect portion ficv held finv adjustments allocated finv adjustments tax basis tangible intangible assets ficv described would available absent conversion basis adjustments expected reduce amount tax finv would otherwise required pay future basis adjustments may also decrease gains increase losses future dispositions certain capital assets extent tax basis allocated capital assets tax receivable agreement tra entered ficv mosing holdings connection ipo generally provides payment finv 85 amount actual reductions payments us federal state local income tax franchise tax reductions refer “cash savings” periods ipo result tax basis increases resulting conversion ii imputed interest deemed paid us result additional tax basis arising payments tra addition tra provides payment us interest earned due date without extensions corresponding tax return date payment specified tra payments tra conditioned upon holder rights tra continued ownership interest either ficv finv retain remaining 15 cash savings frank’s international nv notes consolidated financial statements december 31 2016 estimated tra liability 1246 million represents 85 future cash savings expected utilization original basis adjustments plus subsequent basis adjustments result payments tra agreement estimation tra liability nature imprecise subject significant assumptions regarding amount timing taxable income future tax rates applicable time period cash savings expected realized estimated 20 years based finv’s estimated tax position expect make tra payment approximately 08 million tax year ending december 31 2016 payment obligations tra obligations ficv term tra continue tax benefits utilized expired unless finv elects exercise sole right terminate tra early finv elects terminate tra early would required make immediate payment equal present value anticipated future tax benefits subject tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits ficv interests mosing holdings transferees termination date deemed exchanged termination date early termination payment may made significantly advance actual realization future benefits addition payments due tra similarly accelerated following certain mergers changes control situations finv’s obligations tra could substantial negative impact liquidity could effect delaying deferring preventing certain mergers asset sales forms business combinations changes control example tra terminated december 31 2016 estimated termination payment would approximately 1053 million calculated using discount rate 496 foregoing number merely estimate actual payment could differ materially finv holding company operations ability make payments tra dependent ability ficv make distributions amount sufficient cover finv’s obligations agreements ability turn may depend ability ficv’s subsidiaries provide payments ability ficv subsidiaries make distributions subject among things applicable provisions dutch law may limit amount funds available distribution restrictions debt instruments extent finv unable make payments tra reason except case acceleration payments thereunder occurring connection early termination tra certain mergers change control payments deferred accrue interest paid finv prohibited paying dividends common stock note 15earnings loss per common share basic earnings loss per common share determined dividing net income loss less preferred stock dividends weighted average number common shares outstanding period diluted earnings loss per share determined dividing net income loss attributable common stockholders weighted average number common shares outstanding assuming potentially dilutive shares issued apply treasury stock method determine dilutive weighted average common shares represented unvested restricted stock units espp shares august 26 2016 date conversion mosing holdings preferred stock mosing holdings transfer interest ficv us see note 12 preferred stock diluted earnings loss per share calculation assumed conversion 100 outstanding preferred stock converted basis accordingly numerator also adjusted include earnings allocated noncontrolling interest taking account tax effect exchange frank’s international nv notes consolidated financial statements following table summarizes basic diluted earnings loss per share calculations thousands except per share amounts frank’s international nv notes consolidated financial statements note 16stockbased compensation 2013 longterm incentive plan 2013 longterm incentive plan “ltip” stock options sars restricted stock restricted stock units dividend equivalent rights types equity cash incentive awards may granted employees nonemployee directors service providers ltip expires 10 years unless prior date maximum number shares available issuance plan issued board directors terminates plan 20000000 shares common stock reserved issuance ltip december 31 2016 15166425 shares remained available issuance restricted stock units upon completion ipo pursuant ltip began granting restricted stock units substantially rsus granted ltip vest ratably period one three years certain restricted stock unit awards provide accelerated vesting qualifying terminations employment service employees granted rsus entitled dividends declared underlying shares restricted stock unit unvested grant date fair value award measured reducing grant date price common stock present value dividends expected paid underlying shares requisite service period discounted appropriate riskfree interest rate weighted average grant date fair value rsus granted years ended december 31 2016 2015 2014 116 million 146 million 31 million respectively compensation expense recognized ratably vesting period december 31 2016 assumed annual forfeiture rate lack turnover history type award stockbased compensation expense relating rsus included general administrative expenses consolidated statements operations years ended december 31 2016 2015 2014 156 million 261 million 384 million respectively year ended december 31 2015 additional 23 million stockbased compensation expense recorded severance charges result reduction efforts mentioned note 19 severance charges bringing total stockbased compensation expense recorded 284 million year ended december 31 2015 unamortized stock compensation expense december 31 2016 relating rsus totaled approximately 118 million expensed weighted average period 146 years nonvested rsus outstanding december 31 2016 changes year follows performance restricted stock units february 2016 granted performance restricted stock unit awards prsus fair value 28 million 199168 units target level performance period grant threeyear period january 1 2016 december 31 2018 performance period frank’s international nv notes consolidated financial statements purpose prsus closely align incentive compensation executive leadership team duration threeyear performance cycle returns finvs shareholders thereby motivate executive leadership team create sustained value finv shareholders design prsu grants effectuates purpose placing material amount incentive compensation executive risk offering extraordinary reward attainment extraordinary results design features prsu grant furtherance purpose include following 1 vesting prsus based total shareholder return tsr based comparison returns peer group 2 tsr computed entire threeyear performance period using 30day averaging period first 30 calendar days last 30 calendar days performance period mitigate effect stock price volatility tsr calculation assume reinvestment dividends 3 ultimate number shares issued pursuant prsu awards vary proportion actual tsr achieved percentile compared peer group performance period follows shares issued companys performance falls 25th percentile ii 50 target level company achieves rank 25th percentile threshold level iii 100 target level company achieves rank 50th percentile target level iv 150 target level company achieves rank 75th percentile maximum level 4 unless qualifying termination defined prsu award agreement prsus executive forfeited upon executives termination employment performance period fair value compensation expense prsu grant estimated based companys closing stock price day grant date using monte carlo simulation though value rpsu grant may change participant compensation expense recorded company determined date grant expected volatility based historical equity volatility stock based 50 historical 50 implied volatility weighting commensurate expected term prsu expected volatility considers factors historical volatility share price peer group companies implied volatility share price length time shares publicly traded split dividendadjusted closing stock prices assumed forfeiture rate rpsus weighted average assumptions prsus granted february 23 2016 follows event death disability restrictions related forfeiture defined performance awards agreement lapse respect 100 prsus target level effective date death disability vesting prsus continue per agreement event involuntary termination except cause company enter special vesting agreement executive restrictions forfeiture lapse upon termination event termination reason prior end performance period prsus forfeited stockbased compensation expense related prsus included general administrative expenses consolidated statements operations year ended december 31 2016 08 million stockbased compensation expense related prsus years ended december 31 2015 2014 unamortized stock compensation expense december 31 2016 relating prsus totaled approximately 20 million expensed weighted average period 215 years frank’s international nv notes consolidated financial statements nonvested prsus outstanding december 31 2016 changes year follows employee stock purchase plan franks international nv espp effective january 1 2015 espp eligible employees right purchase shares common stock lesser 85 last reported sale price common stock last trading date immediately preceding first day option period ii 85 last reported sale price common stock last trading date immediately preceding last day option period espp intended qualify employee stock purchase plan section 423 internal revenue code reserved 30 million shares common stock issuance espp 29 million shares available issuance december 31 2016 shares common stock issued employees espp totaled 75974 2016 20291 shares 2015 years ended december 31 2016 2015 recognized 03 million 02 million compensation expense related stock purchased espp respectively january 2017 issued 50141 shares common stock employees plan satisfy employee purchase period july 1 2016 december 31 2016 increased common stock outstanding note 17employee benefit plans us benefit plans 401k savings investment plan franks international llc administers 401k savings investment plan “plan” part employee benefits package employees required complete one month service becoming eligible participate plan terms plan match 100 first 3 eligible compensation employee contributes plan annual allowable irs limit additionally company provides 50 match employee contributions 4 6 eligible compensation matching contributions plan totaled 38 million 34 million 35 million years ended december 31 2016 2015 2014 respectively executive deferred compensation plan december 2004 certain affiliates adopted frank’s executive deferred compensation plan “edc plan” purpose edc plan provide participants opportunity defer receipt portion salary bonus specified cash compensation participant contributions immediately vested contributions vest five years service participant benefits edc plan shall paid directly general funds applicable participating subsidiary grantor trust commonly referred rabbi trust created purpose informally funding edc plan rabbi trust special separate fund shall established segregation assets shall made assure payment assets edc plan’s trust invested corporate owned splitdollar life insurance policy amalgamation mutual funds see note 7 recorded compensation expense related vesting company’s contribution 17 million 19 million 23 million years ended december 31 2016 2015 2014 respectively total liability recorded frank’s international nv notes consolidated financial statements december 31 2016 2015 related edc plan 311 million 436 million respectively included noncurrent liabilities consolidated balance sheets foreign benefit plans sponsor certain benefit plans dictated host country law recorded expense related foreign benefit plans 42 million 55 million 66 million years ended december 31 2016 2015 2014 respectively note 18income taxes income loss income tax expense benefit comprised following periods indicated thousands income taxes provided based upon tax laws rates countries operations conducted income earned components income tax expense benefit consist following periods indicated thousands frank’s international nv notes consolidated financial statements foreign taxes incurred following regions periods indicated thousands reconciliation differences income tax provision computed us statutory rate reported provision income taxes periods indicated follows thousands reconciliation using netherlands statutory rate provided significant operations netherlands frank’s international nv notes consolidated financial statements deferred tax assets liabilities recorded anticipated future tax effects temporary differences financial statement basis tax basis assets liabilities using applicable tax rates effect yearend valuation allowance recorded likely benefit deferred tax asset realized significant components deferred tax assets liabilities follows thousands valuation allowance increased 28 million 54 million 2016 result tax losses various foreign jurisdictions determined likely 2016 losses realized undistributed earnings certain foreign subsidiaries amounted approximately 2560 million december 31 2016 intention permanently reinvest undistributed earnings profits subsidiaries consolidated companies’ operations generated december 31 2016 future plans demonstrate need repatriate foreign amounts fund parent company activity december 31 2016 2015 total gross unrecognized tax benefits 02 million 01 million respectively substantially uncertain tax positions recognized future would impact effective tax rate elected classify interest penalties incurred income taxes income tax expense file income tax returns various international tax jurisdictions december 31 2016 tax years 2010 2015 remain open examination major foreign taxing jurisdictions subject note 19severance charges 2015 executed workforce reduction plan part cost savings initiatives due depressed oil gas prices reduction communicated affected employees various dates also chairman board supervisory directors also held role executive chairman company transitioned nonexecutive director supervisory board effective december 31 2015 2016 continued take steps adjust workforce meet depressed demand industry identified certain equipment based frank’s international nv notes consolidated financial statements specifications current market conditions longer economic utility therefore reached end useful life accordingly management decided retire equipment recorded charge 299 million severance charges years ended december 31 2016 2015 incurred 165 million 355 million respectively severance expense severance expense year ended december 31 2014 december 31 2016 outstanding accrual approximately 62 million included severance payments employeerelated termination costs reconciliation beginning ending liability balance thousands expect pay significant portion remaining liability first quarter 2017 staff reductions blackhawk segment note 20commitments contingencies commitments committed various noncancelable operating lease agreements primarily related facilities equipment expire various dates throughout next several years future minimum lease commitments noncancelable operating leases initial remaining terms one year december 31 2016 follows thousands total rent expense incurred operating leases 191 million 196 million 172 million years ended december 31 2016 2015 2014 respectively also purchase commitments inventory amount 85 million enter purchase commitments needed contingencies subject lawsuits claims arising ordinary course business time liability accrued loss probable reasonable estimated december 31 2016 material frank’s international nv notes consolidated financial statements accruals loss contingencies individually aggregate believe probability remote ultimate outcome matters would material adverse effect financial position results operations cash flows conducting internal investigation operations certain foreign subsidiaries west africa including possible violations us foreign corrupt practices act fcpa policies applicable laws june 2016 voluntarily disclosed existence internal review us securities exchange commission united states department justice governmental entities review currently indicate material impact previously filed financial statements continue collect information unable predict ultimate resolution matters agencies note 21supplemental cash flow information supplemental cash flows noncash transactions follows periods indicated thousands note 22segment information reporting segments operating segments defined components enterprise separate financial information available regularly evaluated chief operating decision maker “codm” deciding allocate resources assess performance comprised four reportable segments international services us services tubular sales blackhawk international services segment provides tubular services international offshore markets several onshore international regions customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies us services segment provides tubular services active onshore oil gas drilling regions us including permian basin eagle ford shale haynesville shale marcellus shale dj basin utica shale well us gulf mexico tubular sales segment designs manufactures distributes large outside diameter od pipe connectors casing attachments sells large od pipe originally manufactured various pipe mills also provide specialized fabrication welding services support offshore projects including drilling production risers flowlines pipeline end terminations well long length tubulars 300 feet length use caissons pilings segment also designs manufactures proprietary equipment use international us services segments blackhawk segment provides well construction well intervention rental equipment services products addition cementing tool expertise us mexican gulf mexico onshore us select international locations frank’s international nv notes consolidated financial statements adjusted ebitda define adjusted ebitda net income loss net interest income expense depreciation amortization income tax benefit expense asset impairments gain loss sale assets foreign currency gain loss equitybased compensation unrealized realized gain loss noncash adjustments charges review adjusted ebitda consolidated basis segment basis use adjusted ebitda assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization income tax foreign currency exchange rates charges credits codm uses adjusted ebitda primary measure segment reporting performance following table presents reconciliation segment adjusted ebitda income loss continuing operations thousands 1 comprised equitybased compensation expense 2016 15978 2015 26318 2014 38368 merger acquisition costs 2016 13784 2015 none 2014 none severance charges 2016 46406 2015 35484 2014 none changes value contingent consideration 2016 none 2015 1532 2014 none unrealized realized gains losses 2016 110 2015 none 2014 none fcpa matters 2016 6397 2015 1446 2014 1137 frank’s international nv notes consolidated financial statements following table sets forth certain financial information respect reportable segments included “corporate other” intersegment eliminations costs associated activities general nature thousands nongaap financial measure disclosed codm review total assets segment part financial information provided therefore asset information provided table frank’s international nv notes consolidated financial statements netherlands based company derive revenue services product sales clients primarily oil gas industry year ended december 31 2016 one customer accounted 13 revenue single customer accounted 10 revenue years ended december 31 2015 2014 geographic areas revenue generated netherlands immaterial years ended december 31 2016 2015 2014 united states individual country represented 10 revenue years ended december 31 2016 december 31 2014 year ended december 31 2015 united states well united arab emirates revenues 1404 million represented 10 revenue based unique nature operating structure revenue generating assets interchangeable two categories offshore ii onshore addition onshore assets used us based upon certification revenues customers longlived assets netherlands insignificant years presented frank’s international nv notes consolidated financial statements note 23quarterly financial data unaudited summarized quarterly financial data years ended december 31 2016 2015 set forth thousands except per share data 1 sum individual quarterly earnings per share amounts may agree yeartodate net income loss per common share quarterly computation based weighted average number common shares outstanding period item 9item 8 financial statements supplementary data managements report internal control financial reporting management company including chief executive officer chief financial officer responsible establishing maintaining adequate internal control financial reporting defined rules 13a15f 15d15f securities exchange act 1934 amended internal control financial reporting process designed supervision chief executive officer chief financial officer provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures made accordance authorizations management directors iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition assets could material effect financial statements conducted evaluation effectiveness internal control financial reporting december 31 2017 based internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 based evaluation management concluded internal control financial reporting effective december 31 2017 effectiveness internal control financial reporting december 31 2017 audited pricewaterhousecoopers llp independent registered public accounting firm stated report included herein report independent registered public accounting firm board supervisory directors stockholders frank’s international nv opinions financial statements internal control financial reporting audited accompanying consolidated balance sheets frank’s international nv subsidiaries december 31 2017 2016 related consolidated statements operations comprehensive income loss stockholders’ equity cash flows three years period ended december 31 2017 including related notes financial statement schedule listed index appearing item 15a2 collectively referred “consolidated financial statements” also audited companys internal control financial reporting december 31 2017 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission coso opinion consolidated financial statements referred present fairly material respects financial position company december 31 2017 2016 results operations cash flows three years period ended december 31 2017 conformity accounting principles generally accepted united states america also opinion company maintained material respects effective internal control financial reporting december 31 2017 based criteria established internal control integrated framework 2013 issued coso change accounting principle discussed note 1 accompanying consolidated financial statements company changed manner accounts goodwill impairment 2017 changed impairment testing date two reporting units december 31 october 31 basis opinions companys management responsible consolidated financial statements maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements report internal control financial reporting responsibility express opinions company’s consolidated financial statements companys internal control financial reporting based audits public accounting firm registered public company accounting oversight board united states pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audits obtain reasonable assurance whether consolidated financial statements free material misstatement whether due error fraud whether effective internal control financial reporting maintained material respects audits consolidated financial statements included performing procedures assess risks material misstatement consolidated financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures consolidated financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation consolidated financial statements audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audits also included performing procedures considered necessary circumstances believe audits provide reasonable basis opinions definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate pricewaterhousecoopers llp houston texas february 27 2018 served company’s auditor since 2008 accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements frank’s international nv notes consolidated financial statements note 1basis presentation significant accounting policies nature business frank’s international nv finv limited liability company organized laws netherlands global provider highly engineered tubular services tubular fabrication specialty well construction well intervention solutions oil gas industry finv provides services leading exploration production companies offshore onshore environments focus complex technically demanding wells basis presentation consolidated financial statements finv years ended december 31 2017 2016 2015 include activities franks international cv ficv blackhawk group holdings llc blackhawk wholly owned subsidiaries collectively company us intercompany accounts transactions eliminated purposes preparing consolidated financial statements accompanying consolidated financial statements related financial information prepared accordance generally accepted accounting principles united states america gaap opinion management consolidated financial statements reflect adjustments consisting solely normal accruals necessary fair presentation financial results periods presented consolidated financial statements prepared historical cost basis using united states dollar reporting currency functional currency primarily united states dollar reclassifications certain prioryear amounts reclassified conform current year’s presentation reclassifications impact net income loss working capital cash flows total equity previously reported historically december 31 2016 certain direct indirect costs related operations manufacturing classified reported general administrative expenses ga historical classification consistent information used company’s chief operating decision maker codm assess performance company’s segments make resource allocation decisions classification costs within consolidated statements income aligned segment presentation effective january 1 2017 company changed classification certain costs segment reporting disclosures within consolidated statements income reflect change presentation information used company’s codm reclassification costs cost revenue ga net impact consolidated statements income total segment reporting change reflects codms philosophy assessing performance allocating resources well improves comparability companys peer group change costs classification reflected retrospectively periods presented frank’s international nv notes consolidated financial statements following summary reclassifications previously reported amounts thousands significant accounting policies accounting estimates preparation consolidated financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date consolidated financial statements reported amounts revenues expenses reporting period actual results could differ estimates accounts receivable establish allowance doubtful accounts based various factors including historical experience current aging status customer accounts financial condition customers business political environment customers operate provisions doubtful accounts recorded becomes probable customer accounts uncollectible cash equivalents consider highly liquid financial instruments purchased original maturity three months less cash equivalents throughout year cash balances excess federally insured limits deposited various financial institutions experienced losses accounts believe exposed significant credit risk cash equivalents comprehensive income accounting standards reporting comprehensive income require certain items including foreign currency translation adjustments unrealized gains losses marketable securities presented components comprehensive income cumulative amounts recognized us standards reflected consolidated balance sheet accumulated comprehensive income component stockholders’ equity contingencies certain conditions may exist date consolidated financial statements issued may result loss us resolved one future events occur fail occur management input legal counsel assesses contingent liabilities assessment inherently involves exercise judgment assessing loss contingencies related legal proceedings pending us unasserted claims may result proceedings management input legal counsel evaluates perceived merits legal proceedings unasserted claims well perceived merits amount relief sought expected sought therein frank’s international nv notes consolidated financial statements assessment contingency indicates probable material loss incurred amount liability estimated liability would accrued consolidated financial statements assessment indicates potentially material loss contingency probable reasonably possible probable cannot estimated nature contingent liability together estimate range possible loss determinable material disclosed loss contingencies considered remote generally disclosed unless involve guarantees case guarantees would disclosed derivative financial instruments deem appropriate use foreign currency forward derivative contracts mitigate risk fluctuations foreign currency exchange rates use instruments mitigate exposure nonlocal currency working capital hold issue financial instruments trading speculative purposes account derivative activities provisions accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations income loss per share basic income loss per share excludes dilution computed dividing net income available common shareholders weighted average number common shares outstanding period diluted income loss per share reflects potential dilution could occur securities issue common stock exercised converted common stock fair value financial instruments financial instruments consist primarily cash equivalents shortterm investments trade accounts receivable availableforsale securities derivative financial instruments obligations trade accounts payable short term debt due shortterm nature carrying values cash equivalents shortterm investments trade accounts receivable trade accounts payable shortterm debt approximate fair value refer note 10 fair value measurements fair values availableforsale securities derivative financial instruments obligations foreign currency translations transactions results operations foreign subsidiaries functional currencies us dollar translated using average exchange rates period assets liabilities foreign subsidiaries translated using exchange rates effect balance sheet dates gains losses resulting translations included accumulated comprehensive income within stockholders’ equity foreign subsidiaries designated us dollar functional currency gains losses resulting balance sheet remeasurement foreign operations included consolidated statements operations incurred gains losses resulting transactions denominated foreign currency also included consolidated statements operations incurred goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less frank’s international nv notes consolidated financial statements carrying amount quantitative impairment test performed quantitative goodwill impairment test used identify existence impairment amount impairment loss test compares fair value reporting unit carrying amount including goodwill amount impairment goodwill measured excess carrying value fair value fourth quarter 2017 elected change timing annual goodwill impairment testing december 31 october 31 us services international services tubular sales manufacturing reporting units accounting change considered preferable allows additional time complete annual goodwill impairment test better aligns planning process synchronizes testing date reporting units october 31 blackhawk reporting units annual impairment testing date change result adjustments previously issued financial statements goodwill impairment recorded years ended december 31 2017 2016 2015 goodwill allocated operating segments follows us services approximately 162 million tubular sales approximately 24 million blackhawk approximately 1924 million inputs used determination fair value generally level 3 inputs see note 10 fair value measurements notes consolidated financial statements discussion fair value measures impairment longlived assets longlived assets include property plant equipment certain assets held used us reviewed events changes circumstances indicate carrying amount assets may recoverable based estimated future cash flows assessment indicates carrying values recoverable determined based undiscounted cash flows remaining useful lives impairment loss recognized based fair value asset income taxes operate many legal forms approximately 50 countries result subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact upon amount income taxes provide given year provide income tax expense based liability method accounting income taxes based authoritative accounting guidance deferred tax assets liabilities recorded based upon temporary differences tax basis assets liabilities carrying values financial reporting purposes measured using tax rates laws expected effect differences projected reverse valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances made judgments estimates regarding future taxable income estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions deferred tax expense benefit result changes deferred tax assets liabilities associated valuation allowances period impact uncertain tax position taken expected taken income tax return recognized financial statements largest amount likely sustained upon examination relevant taxing authority frank’s international nv notes consolidated financial statements intangible assets identifiable intangible assets amortized using straightline method estimated useful lives assets evaluate impairment intangible assets asset group basis whenever circumstances indicate carrying value may recoverable intangible assets deemed impaired written fair value discounted cash flows available comparable market values following table provides information related intangible assets december 31 2017 2016 thousands amortization expense intangibles assets 114 million 35 million 18 million years ended december 31 2017 2016 2015 respectively december 31 2017 estimated amortization expense intangible assets next five years follows thousands inventories stated lower cost primarily average cost net realizable value work progress finished goods include cost materials labor manufacturing overhead inventory placed service either capitalized included equipment expensed based upon capitalization policies marketable securities cash surrender value life insurance policies marketable securities publicly traded equity securities indirect result strategic investments classified availableforsale reported fair value see note 7 assets unrealized gains losses reported component stockholders’ equity frank’s international nv notes consolidated financial statements also cash surrender value life insurance policies held within rabbi trust purpose paying future executive deferred compensation benefit obligations unrealized realized gains losses marketable securities included income consolidated statements operations net realized impairment loss reduce investment’s carrying amount fair market value recognized income decline fair market value individual security cost carrying value determined temporary realized gains losses investments 24 million 11 million 07 million years ended december 31 2017 2016 2015 respectively property plant equipment property plant equipment stated cost less accumulated depreciation expenditures significant improvements betterments capitalized enhance extend useful life asset expenditures routine repairs maintenance improve extend life related assets expensed incurred properties equipment sold retired otherwise disposed related cost accumulated depreciation removed books resulting gain loss recognized consolidated statements operations depreciation fixed assets computed using straightline method estimated useful lives individual assets leasehold improvements amortized straightline basis shorter estimated useful lives lease term depreciation expense 1107 million 1107 million 1072 million years ended december 31 2017 2016 2015 respectively revenue recognition revenue recognized following criteria met 1 evidence arrangement exists 2 delivery acceptance customer occurred 3 price customer fixed determinable 4 collectability reasonably assured follows services revenue provide tubular well construction services clients oil gas industry perform services either direct service purchase orders master service agreements service revenue recognized services performed rendered • international service hours billed per man hour per day similar basis • us services billed offshore per day similar basis ii land per man hour project basis • blackhawk services billed primarily per day basis domestic international design manufacture suite highly technical equipment products use connection providing services customers including highend proprietary tubular handling well construction equipment substantially equipment service element personnel operating equipment provide equipment either direct agreements customers agreements place revenue equipment agreements recognized earned relevant period • international equipment billed per month similar basis • us equipment billed offshore per day similar basis ii land completion job project basis • blackhawk services billed offshore land per day basis minimum days requirements ii international negotiated contracts primarily based monthly rates frank’s international nv notes consolidated financial statements customers contracted direct service purchase orders direct agreements accrual recorded unbilled accounts receivable revenue earned yet invoiced tubular sales blackhawk product revenue tubular blackhawk product sales recognized product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions postdelivery obligations tubular sales well construction customers requested store pipe connectors products purchased us facilities considered whether revenue recognized sales “bill hold” guidance provided sec staff however based upon assessment performed revenue recognition transactions totaling 47 million 181 million deferred december 31 2017 2016 respectively shortterm investments shortterm investments consist commercial paper classified heldtomaturity fund primarily invests shortterm debt securities investments original maturities greater three months less twelve months december 31 2017 carrying amount shortterm investments 810 million stockbased compensation 2013 longterm incentive plan provides granting stock options stock appreciation rights “sars” restricted stock restricted stock units rsus performance restricted stock units prsus dividend equivalent rights types equity cash incentive awards employees nonemployee directors service providers stockbased compensation expense measured grant date sharebased awards based value stockbased compensation expense recognized straightline basis vesting period included general administrative expense consolidated statements operations stockbased compensation currently consists rsus prsus grant date fair value rsus entitled receive dividends vested measured reducing share price date present value dividends expected paid requisite vesting period discounted appropriate riskfree interest rate grant date fair value compensation expense prsu grants estimated based companys closing stock price day grant date using monte carlo simulation recent accounting pronouncements changes gaap established financial accounting standards board fasb form accounting standards updates asus fasb’s accounting standards codification consider applicability impact asus listed assessed either determined applicable expected immaterial impact consolidated financial position results operations cash flows may 2017 fasb issued guidance clarify reduce diversity practice ii cost complexity accounting change terms conditions sharebased payment award guidance effective annual periods beginning december 15 2017 including interim periods within periods amendments guidance applied prospectively award modified adoption date adopted guidance january 1 2018 adoption impact consolidated financial statements january 2017 fasb issued guidance simplifies accounting goodwill impairment guidance removes step 2 goodwill impairment test requires hypothetical purchase price allocation goodwill impairment amount reporting unit’s carrying value exceeds fair value exceed frank’s international nv notes consolidated financial statements carrying amount goodwill impairment guidance remain largely unchanged new standard effective public companies annual interim goodwill impairment tests fiscal years beginning december 15 2019 early adoption permitted impairment tests performed january 1 2017 company adopted provisions new accounting guidance companys annual goodwill impairment analysis year ended december 31 2017 january 2017 fasb issued new accounting guidance business combinations clarifying definition business objective guidance help companies organizations acquired sold business evaluate whether transactions accounted acquisitions disposals assets businesses public entities guidance effective annual periods beginning december 15 2017 including interim periods within periods adopted guidance january 1 2018 adoption impact consolidated financial statements august 2016 fasb issued new accounting guidance classification certain cash receipts cash payments statement cash flows objective guidance reduce existing diversity practice related presentation classification certain cash receipts cash payments guidance addresses eight specific cash flow issues including limited debt prepayment extinguishment costs contingent consideration payments made business combination proceeds settlement insurance claims proceeds settlement corporateowned life insurance policies public entities guidance effective financial statements issued fiscal years beginning december 15 2017 including interim periods within fiscal years retrospective periods presented adopted guidance december 31 2017 adoption impact consolidated financial statements june 2016 fasb issued new accounting guidance credit losses financial instruments guidance includes replacement “incurred loss” approach recognizing credit losses financial assets including trade receivables methodology reflects expected credit losses considers historical current information well reasonable supportable forecasts public entities guidance effective financial statements issued fiscal years beginning december 15 2019 including interim periods within fiscal years early application permitted entities fiscal years beginning december 15 2018 including interim periods within fiscal years management evaluating provisions new accounting guidance including period adopt determined impact adoption consolidated financial statements february 2016 fasb issued accounting guidance leases main objective accounting guidance increase transparency comparability among organizations recognizing lease assets lease liabilities balance sheet disclosing key information leasing arrangements main difference previous gaap new guidance recognition lease assets lease liabilities lessees leases classified operating leases new guidance requires lessees recognize assets liabilities arising leases balance sheet defines lease contract conveys right control use identified property plant equipment period time exchange consideration control use identified asset means customer 1 right obtain substantially economic benefit use asset 2 right direct use asset accounting guidance requires disclosures lessees lessors meet objective enabling users financial statements assess amount timing uncertainty cash flows arising leases transition lessees lessors required recognize measure leases beginning earliest period presented using modified retrospective approach public entities guidance effective financial statements issued fiscal years beginning december 15 2018 including interim periods within fiscal years early application permitted currently evaluating impact accounting standard update consolidated financial statements plan adopt new standard effective january 1 2019 may 2014 fasb issued amendments guidance recognition revenue based upon entity’s contracts customers transfer goods services new standard entity recognize revenue depict transfer promised goods services customers amount reflects consideration entity expects entitled exchange goods services standard creates five step model requires frank’s international nv notes consolidated financial statements companies exercise judgment considering terms contract relevant facts circumstances standard allows two transition methods full retrospective adoption standard applied periods presented b modified retrospective adoption standard applied current period presented financial statements including additional disclosures standard’s application impact individual financial statement line items july 2015 fasb deferred effective date december 15 2017 annual periods interim reporting periods within fiscal years beginning date adopt new standard effective january 1 2018 utilizing modified retrospective method based ongoing analysis impacts new standard anticipate recognition revenue new revenue standard consistent previous revenue standard except revenues certain product sales billandhold arrangements tubular sales segment change accounting guidance related billandhold arrangements expect recognize immaterial increase opening balance retained earnings january 1 2018 note 2noncontrolling interest hold economic interest ficv responsible operational management administrative decisions relating ficv’s business result financial results ficv consolidated recorded noncontrolling interest consolidated balance sheet respect remaining economic interest ficv held mosing holdings net income loss attributable noncontrolling interest statements operations represented portion earnings losses attributable economic interest ficv held mosing holdings allocable domestic income loss ficv finv subject us taxation effective august 2016 conversion mosing holdings series preferred stock see note 12 preferred stock mosing holdings transferred interest ficv us noncontrolling interest eliminated result amount included net income loss attributable noncontrolling interest year ended december 31 2016 august 26 2016 reconciliation net income loss attributable noncontrolling interest detailed follows thousands 1 represents net loss august 26 2016 mosing holdings transferred interest finv 2 represents income tax expense benefit entities outside ficv well income tax attributable proportionate share us operations partnership interests ficv august 26 2016 3 represents results operations entities outside ficv august 26 2016 4 represents economic interest ficv held mosing holdings preferred stock conversion august 26 2016 percentage changed additional shares finv common stock issued effective august 26 2016 mosing holdings delivered economic interest ficv us frank’s international nv notes consolidated financial statements note 3acquisition divestitures blackhawk acquisition november 1 2016 completed transaction acquire outstanding shares blackhawk ultimate parent company blackhawk specialty tools llc pursuant terms definitive merger agreement merger agreement dated october 6 2016 blackhawk leading provider well construction well intervention services products conjunction acquisition fi tools holdings llc newly formed subsidiary merged blackhawk surviving merger whollyowned subsidiary merger consideration comprised combination 1504 million cash hand 128 million shares common stock common stock cashfree debtfree basis total consideration 2946 million based closing share price october 31 2016 1125 including working capital adjustments accordingly results blackhawks operations november 1 2016 included consolidated financial statements year ended december 31 2016 blackhawk contributed revenue 100 million operating losses 74 million accordance accounting guidance business combinations unaudited pro forma financial information presented assumes acquisition completed january 1 2015 first day fiscal year 2015 unaudited pro forma financial information necessarily represent would occurred transaction taken place date presented taken representative future consolidated results operations unaudited pro forma financial information includes adjustments amortization expense identified intangible assets depreciation expense based fair value estimated lives acquired property plant equipment addition acquisition related costs excluded unaudited pro forma financial information following table shows unaudited financial information years ended december 31 2016 2015 respectively thousands except per share amounts blackhawk acquisition accounted business combination described note 10 fair value measurements purchase price allocated fair value assets acquired liabilities assumed based discounted cash flow model goodwill recognized excess consideration transferred fair value net assets frank’s international nv notes consolidated financial statements following table summarizes preliminary final purchase price allocations fair values assets acquired liabilities assumed part blackhawk acquisition november 1 2016 determined accordance business combination accounting guidance thousands amount allocated intangible assets attributed following categories thousands intangible assets amortized straightline basis presented depreciation amortization consolidated statements operations intention transaction augment tubular services business providing us opportunity diversify offerings emerge leader new business line significantly larger addressable market addition believe line wellregarded market leading technically differentiated specialty cementation tools blackhawk also provides well intervention products line brute packers related products continuing development products onshore offshore applications conjunction merger created fourth segment blackhawk recorded goodwill 1924 million segment divestitures march 2017 sold fully depreciated aircraft total sales price 13 million recorded gain sale 13 million august 2017 sold additional aircraft net sales price 49 million recorded immaterial loss september 2017 sold building middle east net sales price 27 million recorded gain sale 06 million frank’s international nv notes consolidated financial statements december 2017 sold building canada total sales price 24 million recorded gain sale 03 million also sold third last aircraft total sales price 07 million related party recorded gain sale 07 million see note 13 related party transactions additional information note 4accounts receivable net accounts receivable december 31 2017 2016 follows thousands 1 amounts represent expenditures behalf nonconsolidated affiliates receivables aircraft charter income note 5inventories net inventories december 31 2017 2016 follows thousands inventories required stated lower cost net realizable value 2017 recorded charges 512 million financial statement line item severance charges related net realizable value adjustment impacted tubular sales segment factors led charges included new technology external internal oil gas prices levels necessary customers sanction significant amount new offshore projects nearterm change customers preferences newer technologies significantly impacted net realizable value connectors inventory 2017 please see note 19 severance charges discussion frank’s international nv notes consolidated financial statements note 6property plant equipment following summary property plant equipment december 31 2017 2016 thousands 1 see note 13 related party transactions additional information third quarter 2017 committed sell certain buildings middle east region determined assets met criteria classified held sale consolidated balance sheet result reclassified buildings net book value 41 million property plant equipment assets held sale recognized 03 million loss impairments recognized years ended december 31 2017 2016 2015 following table presents depreciation amortization associated line periods ended december 31 2017 2016 2015 thousands frank’s international nv notes consolidated financial statements note 7other assets december 31 2017 2016 consisted following thousands 1 see note 10 fair value measurements note 8accrued current liabilities accrued current liabilities december 31 2017 2016 consisted following thousands note 9debt credit facility 1000 million revolving credit facility certain financial institutions including 200 million letters credit 100 million swingline loans matures august 2018 “credit facility” subject terms credit facility ability increase commitments 1500 million december 31 2017 2016 outstanding indebtedness credit facility addition 28 million 37 million letters credit outstanding december 31 2017 2016 respectively borrowing capacity equal 25x adjusted ebitda less letters credit outstanding credit facility borrowing capacity credit facility could reduced eliminated depending future adjusted ebitda borrowings credit facility bear interest option either base rate adjusted eurodollar rate base rate loans credit facility bear interest rate equal higher prime rate published wall street journal ii federal funds effective rate plus 050 iii adjusted eurodollar rate plus 100 plus applicable margin ranging 050 150 subject adjustment based leverage ratio interest case payable quarterly baserate loans eurodollar loans credit facility bear interest adjusted eurodollar rate equal eurodollar rate interest period multiplied statutory reserves plus applicable margin ranging 150 250 interest payable end applicable interest periods eurodollar loans except interest period eurodollar loan longer three months interest paid end threemonth period unused portion credit facility subject commitment fee ranging 0250 0375 based certain leverage ratios credit facility contains various covenants among things limit ability grant certain liens make certain loans investments enter mergers acquisitions enter hedging transactions change frank’s international nv notes consolidated financial statements lines business prepay certain indebtedness enter certain affiliate transactions incur additional indebtedness engage certain asset dispositions credit facility also contains financial covenants among things require us consolidated basis maintain ratio total consolidated funded debt adjusted ebitda defined credit agreement 25 10 ii ratio ebitda interest expense less 30 10 addition credit facility contains customary events default including among others failure make required payments failure comply certain covenants agreements breach representations covenants contained agreements default certain indebtedness certain events bankruptcy insolvency occurrence change control april 28 2017 company obtained limited waiver revolving credit agreement dated august 14 2013 among ficv borrower amegy bank national association administrative agent capital one national association syndication agent lenders party thereto credit agreement leverage ratio interest coverage ratio fiscal quarters ending march 31 2017 june 30 2017 “waiver” order default first quarter 2017 company agreed comply following conditions period effective date waiver delivery compliance certificate respect fiscal quarter ending september 30 2017 maintain less 2500 million liquidity ii abide certain restrictions regarding issuance senior unsecured debt iii pay interest commitment fees based highest “applicable margin” defined credit agreement level connection waiver company paid waiver fee lender executed waiver equal five basis points respective lender’s commitment credit agreement december 31 2017 compliance financial covenants credit facility citibank credit facility 2016 entered threeyear credit facility citibank na uae branch amount 60 million issuance standby letters credit guarantees credit facility also allows open ended guarantees outstanding amounts credit facility bear interest 125 per annum amounts outstanding one year amounts outstanding one year bear interest 15 per annum december 31 2017 2016 26 million 22 million letters credit outstanding insurance notes payable 2017 entered three notes finance annual insurance premiums totaling 51 million notes bear interest annual rate 23 final maturity date october 2018 december 31 2017 total outstanding balance 47 million note 10fair value measurements follow fair value measurement authoritative accounting guidance measuring fair values assets liabilities financial statements fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date utilize market data assumptions market participants independent knowledgeable willing able transact would use pricing asset liability including assumptions risk risks inherent inputs valuation technique able classify fair value balances based observability inputs authoritative guidance fair value measurements establishes three levels fair value hierarchy defined follows • level 1 unadjusted quoted prices identical assets liabilities active markets • level 2 quoted prices markets considered active financial instruments significant inputs observable either directly indirectly substantially full term asset liability frank’s international nv notes consolidated financial statements • level 3 significant unobservable inputs use little market data exists requiring significant degree judgment hierarchy gives highest priority level 1 measurements lowest priority level 3 measurements depending particular asset liability input availability vary depending factors product type longevity product market particular transaction conditions cases certain inputs used measure fair value may categorized different levels fair value hierarchy disclosure purposes accounting guidance lowest level contains significant inputs used valuation chosen financial assets liabilities summary financial assets liabilities measured fair value recurring basis december 31 2017 2016 follows thousands derivative financial instruments consist shortduration foreign currency forward contracts fair value derivative financial instruments based quoted market values including foreign exchange forward rates interest rates fair value computed discounting projected future cash flow amounts present value december 31 2017 2016 derivative financial instruments included financial statement line items accrued current liabilities accounts receivable net respectively consolidated balance sheets investments associated deferred compensation plan consist primarily cash surrender value life insurance policies included assets consolidated balance sheets liability associated deferred compensation plan included liabilities consolidated balance sheets investments change result contributions payments fluctuations market assets liabilities measured using significant observable inputs reported fair value based thirdparty broker statements derived fair value funds underlying investments also marketable securities publicly traded equity securities frank’s international nv notes consolidated financial statements indirect result strategic investments reported fair value based price stock included assets consolidated balance sheets assets liabilities measured fair value nonrecurring basis apply provisions fair value measurement standard nonrecurring nonfinancial measurements including business combinations well impairment related goodwill longlived assets business combinations see note 3 acquisition divestitures purchase price allocated assets acquired liabilities assumed based discounted cash flow model intangibles well market assumptions valuation equipment fixed assets perform goodwill impairment assessment reporting unit comparing estimated fair value reporting unit reporting unit’s carrying value including goodwill estimate fair value reporting unit using discounted cash flow analysis based management’s shortterm longterm forecast operating performance analysis includes significant assumptions regarding discount rates revenue growth rates expected profitability margins forecasted capital expenditures timing expected future cash flows based market conditions estimated fair value reporting unit exceeds carrying amount goodwill reporting unit considered impaired carrying amount reporting unit exceeds estimated fair value impairment loss measured recorded conducting impairment test longlived assets goodwill first compare estimated future undiscounted cash flows associated asset’s carrying amount undiscounted cash flows less asset’s carrying amount determine assets fair value using discounted cash flow analysis analyses based estimates management’s shortterm longterm forecast operating performance including revenue growth rates expected profitability margins estimates remaining useful life service potential asset discount rate based weighted average cost capital impairment assessments discussed incorporate inherent uncertainties including projected commodity pricing supply demand services future market conditions difficult predict volatile economic environments could result impairment charges future periods actual results materially differ estimated assumptions utilized forecasts crude oil prices decline significantly remain low levels sustained period time could required record impairment carrying value longlived assets future could material adverse impact operating results given unobservable nature inputs discounted cash flow models deemed use level 3 inputs fair value considerations carrying values consolidated balance sheet cash equivalents shortterm investments trade accounts receivable current assets accounts payable accrued current liabilities lines credit approximate fair values due short maturities note 11 derivatives enter shortduration foreign currency forward derivative contracts reduce risk foreign currency fluctuations use instruments mitigate exposure nonlocal currency operating working capital record contracts fair value consolidated balance sheets although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations frank’s international nv notes consolidated financial statements december 31 2017 2016 following foreign currency derivative contracts outstanding us dollars thousands following table summarizes location fair value amounts derivative contracts consolidated balance sheets december 31 2017 2016 thousands following table summarize location amounts unrealized realized gains losses derivative contracts consolidated statements operations december 31 2017 2016 2015 thousands derivative transactions governed international swaps derivatives association master agreements include stipulations regarding right offset event counterparty default performance obligations default occur parties right net amounts payable receivable single net settlement parties accounting policy offset derivative assets liabilities executed counterparty master netting arrangement exists frank’s international nv notes consolidated financial statements following table presents gross net fair values derivatives december 31 2017 2016 thousands note 12preferred stock august 19 2016 received notice mosing holdings exercising right exchange 52976000 common shares following securities 52976000 shares preferred stock ii 52976000 units ficv august 26 2016 issued 52976000 common shares mosing holdings share preferred stock liquidation preference equal par value €001 per share entitled annual dividend equal 025 par value additionally share preferred stock entitled holder one vote preferred stockholders voted common stockholders single class matters presented finvs shareholders vote upon conversion preferred stock issued outstanding convertible preferred shares number common shares authorized capital increased 52976000 shares equal number convertible preferred shares converted common shares additionally upon exchange convertible preferred stock mosing holdings entitled receive amount cash equal nominal value convertible preferred share plus accrued unpaid dividends respect stock cash payment 06 million paid september 23 2016 conjunction conversion mosing holdings delivered interest ficv us longer owns interest ficv result transaction also reallocated accumulated comprehensive loss attributable noncontrolling interest note 13related party transactions engaged certain transactions companies related us common ownership entered various operating leases lease facilities affiliated companies majority lease obligations expire 2018 discretion may extended additional 36 months subject agreement pricing extension leases may extended allowed expire us depending operational needs market prices ability us negotiate secure discretion alternative leases replacement locations rent expense associated related party leases 69 million 80 million 76 million years ended december 31 2017 2016 2015 respectively certain cases made improvements properties subject related party leases referenced including construction buildings december 31 2017 net book value associated buildings constructed properties subject related party leases 596 million depreciating costs associated buildings estimated remaining useful lives approximately 38 years exceeds remaining lease terms primarily expire 2018 upon expiration leases leasehold improvements could construed becoming property related party lessors december 31 2017 net book value associated leasehold land improvements constructed properties subject related party leases 178 million portion construction progress depreciating costs associated leasehold land improvements estimated remaining lives approximately 12 years exceeds remaining lease terms primarily expire 2018 intent extend renew replace related party property leases unrestricted use buildings improvements throughout estimated useful lives extension renewal replacement related party property leases dependent negotiations related parties failure could result material disputes related parties event extend renew replace related frank’s international nv notes consolidated financial statements party property leases revise remaining estimated useful lives buildings improvements accordingly party certain agreements relating rental aircraft western airways wa entity owned mosing family wa agreements reflected dry lease wet lease rental whereby charged flat monthly fee primarily crew hangar maintenance administration costs addition variable costs fuel maintenance also earned charter income third party usage revenue sharing agreement recorded net charter expense 11 million 13 million 20 million years ended december 31 2017 2016 2015 respectively august 2017 paid wa 02 million commission brokering sale plane december 2017 sold plane mosing aviation llc entity owned mosing family 07 million rental agreements terminated wa effective december 29 2017 upon sale last aircraft tax receivable agreement mosing holdings permitted transferees converted preferred stock shares common stock oneforone basis august 26 2016 subject customary conversion rate adjustments stock splits stock dividends reclassifications similar transactions delivery equivalent portion interests ficv us “conversion” ficv made election section 754 internal revenue code pursuant section 754 election conversion resulted adjustment tax basis tangible intangible assets ficv respect portion ficv held finv adjustments allocated finv adjustments tax basis tangible intangible assets ficv described would available absent conversion basis adjustments may reduce amount tax finv would otherwise required pay future basis adjustments may also decrease gains increase losses future dispositions certain capital assets extent tax basis allocated capital assets tra entered ficv mosing holdings connection initial public offering ipo generally provides payment finv 85 amount actual reductions payments us federal state local income tax franchise tax reductions refer “cash savings” periods ipo result tax basis increases resulting conversion ii imputed interest deemed paid us result additional tax basis arising payments tra addition tra provides payment us interest earned due date without extensions corresponding tax return date payment specified tra payments tra conditioned upon holder rights tra continued ownership interest either ficv finv retain remaining 15 cash savings estimation liability tra nature imprecise subject significant assumptions regarding amount timing future taxable income december 31 2016 estimated tra liability 1246 million included noncurrent liabilities consolidated balance sheet december 31 2017 finv cumulative loss prior 36 month period based history losses well uncertainty regarding timing amount future taxable income longer able conclude future cash savings lead additional payouts tra beyond estimated 21 million december 31 2017 additional tra liability may recognized future based changes expectations regarding timing likelihood future cash savings payment obligations tra obligations ficv term tra continue tax benefits utilized expired unless finv elects exercise sole right terminate tra early finv elects terminate tra early may sole discretion would required make immediate payment equal present value anticipated future tax benefits subject tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits ficv interests mosing holdings transferees termination date deemed exchanged termination date early termination payment may made significantly advance actual realization future benefits addition payments due tra similarly accelerated following certain mergers changes control situations frank’s international nv notes consolidated financial statements finv’s obligations tra could substantial negative impact liquidity could effect delaying deferring preventing certain mergers asset sales forms business combinations changes control example tra terminated december 31 2017 estimated termination payment would approximately 607 million calculated using discount rate 558 foregoing number merely estimate actual payment could differ materially finv holding company operations ability make payments tra dependent ability ficv make distributions amount sufficient cover finv’s obligations agreements ability turn may depend ability ficv’s subsidiaries provide payments ability ficv subsidiaries make distributions subject among things applicable provisions dutch law may limit amount funds available distribution restrictions debt instruments extent finv unable make payments tra reason except case acceleration payments thereunder occurring connection early termination tra certain mergers change control payments deferred accrue interest paid finv prohibited paying dividends common stock note 14income loss per common share basic income loss per common share determined dividing net income loss weighted average number common shares outstanding period diluted income loss per share determined dividing income loss attributable common stockholders weighted average number common shares outstanding assuming potentially dilutive shares issued apply treasury stock method determine dilutive weighted average common shares represented unvested restricted stock units espp shares august 26 2016 date conversion mosing holdings preferred stock mosing holdings transfer interest ficv us diluted income loss per share calculation assumed conversion 100 outstanding preferred stock converted basis accordingly numerator also adjusted include earnings allocated noncontrolling interest taking account tax effect exchange frank’s international nv notes consolidated financial statements following table summarizes basic diluted income loss per share calculations thousands except per share amounts 1 adjusted additional tax expense upon assumed conversion preferred stock 2216 2 approximate number shares potentially convertible preferred stock common stock time conversion august 26 2016 unvested restricted stock units stock issued pursuant espp excluded computation diluted income loss per share effect would antidilutive results operations net loss 35556 note 15stockbased compensation 2013 longterm incentive plan 2013 longterm incentive plan “ltip” stock options sars restricted stock restricted stock units dividend equivalent rights types equity cash incentive awards may granted employees nonemployee directors service providers ltip expires 10 years unless prior date maximum number shares available issuance plan issued board directors terminates plan 20000000 shares common stock reserved issuance ltip december 31 2017 14015471 shares remained available issuance frank’s international nv notes consolidated financial statements restricted stock units upon completion ipo pursuant ltip began granting restricted stock units substantially rsus granted ltip vest ratably period one three years treasury stock consists shares withheld employees settle personal tax obligations arose result restricted stock units vested certain restricted stock unit awards provide accelerated vesting qualifying terminations employment service employees granted rsus entitled dividends declared underlying shares restricted stock unit unvested grant date fair value award measured reducing grant date price common stock present value dividends expected paid underlying shares requisite service period discounted appropriate riskfree interest rate weighted average grant date fair value rsus granted years ended december 31 2017 2016 2015 121 million 116 million 146 million respectively compensation expense recognized ratably vesting period forfeitures recorded occur stockbased compensation expense relating rsus included general administrative expenses consolidated statements operations years ended december 31 2017 2016 2015 128 million 156 million 261 million respectively total fair value rsus vested years ended december 31 2017 2016 2015 99 million 226 million 174 million respectively unamortized stock compensation expense december 31 2017 relating rsus totaled approximately 95 million expensed weighted average period 175 years nonvested rsus outstanding december 31 2017 changes year follows performance restricted stock units purpose prsus closely align incentive compensation executive leadership team duration threeyear performance cycle returns finvs shareholders thereby motivate executive leadership team create sustained value finv shareholders design prsu grants effectuates purpose placing material amount incentive compensation executive risk offering extraordinary reward attainment extraordinary results design features prsu grant furtherance purpose include following 1 vesting prsus based total shareholder return tsr based comparison returns peer group 2 tsr computed entire threeyear performance period using 30day averaging period first 30 calendar days last 30 calendar days performance period mitigate effect stock price volatility tsr calculation assume reinvestment dividends 3 ultimate number shares issued pursuant prsu awards vary proportion actual tsr achieved percentile compared peer group performance period follows shares issued companys performance falls 25th percentile ii 50 target level company achieves rank 25th percentile threshold level iii 100 target level company achieves rank 50th percentile target level iv 150 target level company achieves rank 75th percentile maximum level 4 unless qualifying termination defined prsu award agreement prsus executive forfeited upon executives termination employment performance period frank’s international nv notes consolidated financial statements though value prsu grant may change participant compensation expense recorded company determined date grant expected volatility based historical equity volatility stock based 50 historical 50 implied volatility weighting commensurate expected term prsu expected volatility considers factors historical volatility share price peer group companies implied volatility share price length time shares publicly traded split dividendadjusted closing stock prices assumed forfeiture rate prsus 2017 granted prsus fair value 26 million 293083 units target level performance period grants threeyear period either january 1 2017 december 31 2019 september 27 2017 september 26 2020 performance period weighted average assumptions prsus granted 2017 follows 2016 granted prsus fair value 28 million 199168 units target level performance period grants threeyear period january 1 2016 december 31 2018 performance period weighted average assumptions prsus granted 2016 follows event death restrictions related forfeiture defined performance awards agreement lapse respect 100 prsus target level effective date death event involuntary termination except cause company enter special vesting agreement executive restrictions forfeiture lapse upon termination event termination reason prior end performance period prsus forfeited stockbased compensation expense related prsus included general administrative expenses consolidated statements operations years ended december 31 2017 2016 06 million 08 million respectively stockbased compensation expense related prsus year ended december 31 2015 total fair value prsus vested year ended december 31 2017 02 million unamortized stock compensation expense december 31 2017 relating prsus totaled approximately 22 million expensed weighted average period 229 years frank’s international nv notes consolidated financial statements nonvested prsus outstanding december 31 2017 changes year follows employee stock purchase plan franks international nv espp eligible employees right purchase shares common stock lesser 85 last reported sale price common stock last trading date immediately preceding first day option period ii 85 last reported sale price common stock last trading date immediately preceding last day option period espp intended qualify employee stock purchase plan section 423 internal revenue code reserved 30 million shares common stock issuance espp 27 million shares available issuance december 31 2017 shares issued employees espp totaled 155673 2017 75974 shares 2016 years ended december 31 2017 2016 2015 recognized 04 million 03 million 02 million compensation expense related stock purchased espp respectively january 2017 issued 50141 shares common stock employees plan satisfy employee purchase period july 1 2016 december 31 2016 increased common stock outstanding july 2017 issued 105532 shares treasury stock employees plan satisfy employee purchase period january 1 2017 june 30 2017 note 16employee benefit plans us benefit plans 401k savings investment plan franks international llc administers 401k savings investment plan “plan” part employee benefits package employees required complete one month service becoming eligible participate plan terms plan match 100 first 3 eligible compensation employee contributes plan annual allowable irs limit additionally company provides 50 match employee contributions 4 6 eligible compensation matching contributions plan totaled 37 million 38 million 34 million years ended december 31 2017 2016 2015 respectively executive deferred compensation plan december 2004 certain affiliates adopted frank’s executive deferred compensation plan “edc plan” purpose edc plan provide participants opportunity defer receipt portion salary bonus specified cash compensation participant contributions immediately vested contributions vest five years service participant benefits edc plan shall paid directly general funds applicable participating subsidiary grantor trust commonly referred rabbi trust created purpose informally funding edc plan rabbi trust special separate fund shall established segregation assets shall made assure payment assets edc plan’s trust invested corporate owned splitdollar life insurance policy amalgamation mutual funds see note 7 assets recorded compensation expense related vesting company’s contribution 17 million 19 million years ended december 31 2016 2015 respectively compensation expense related vesting frank’s international nv notes consolidated financial statements companys contribution recorded year ended december 31 2017 total liability recorded december 31 2017 2016 related edc plan 268 million 311 million respectively included noncurrent liabilities consolidated balance sheets note 17income taxes income loss income tax expense benefit comprised following periods indicated thousands income taxes provided based upon tax laws rates countries operations conducted income earned components income tax expense benefit consist following periods indicated thousands december 22 2017 tax cuts jobs act “tax act” enacted law among significant changes made act reduction us federal income tax rate 35 21 well imposition onetime repatriation tax deemed repatriated earnings certain foreign subsidiaries us gaap requires impact tax act recognized period law enacted change tax rate company recorded 238 million reduction value deferred tax assets liabilities reduction value fully offset corresponding change valuation allowance net effect total tax expense zero due legal structure company expect incur material liability respect repatriation tax provisional amounts company’s best estimates based current interpretation tax act may change company receives additional clarification tax act andor guidance implementation part 2017 income tax compliance process frank’s international nv notes consolidated financial statements foreign taxes incurred following regions periods indicated thousands reconciliation differences income tax provision computed 35 us statutory rate effect december 31 2017 reported provision income taxes periods indicated follows thousands reconciliation using netherlands statutory rate provided significant operations netherlands frank’s international nv notes consolidated financial statements deferred tax assets liabilities recorded anticipated future tax effects temporary differences financial statement basis tax basis assets liabilities measured using tax rates laws expected effect differences projected reverse valuation allowance recorded likely benefit deferred tax asset realized significant components deferred tax assets liabilities follows thousands valuation allowance increased 54 million 605 million 2017 result accumulated tax losses us various foreign tax jurisdictions evaluated available evidence determined likely losses realized intention cash earnings subsidiaries december 31 2017 permanently reinvested used meet operating cash flow needs existing plans demonstrate need repatriate foreign cash fund parent company activity however determine parent company funding required estimate cash needs may met without adverse tax consequences december 31 2017 2016 total gross unrecognized tax benefits 02 million substantially uncertain tax positions recognized future would impact effective tax rate elected classify interest penalties incurred income taxes income tax expense file income tax returns us various international tax jurisdictions december 31 2017 us tax returns remain open examination tax years 2013 2016 major foreign taxing jurisdictions subject open examination tax years 2010 2016 frank’s international nv notes consolidated financial statements note 18commitments contingencies commitments committed various noncancelable operating lease agreements primarily related facilities equipment expire various dates throughout next several years future minimum lease commitments noncancelable operating leases initial remaining terms one year december 31 2017 follows thousands total rent expense incurred operating leases 187 million 191 million 196 million years ended december 31 2017 2016 2015 respectively also purchase commitments primarily related inventory amount 221 million enter purchase commitments needed contingencies subject lawsuits claims arising ordinary course business time liability accrued loss probable reasonably estimated material accruals loss contingencies individually aggregate december 31 2017 december 31 2016 believe probability remote ultimate outcome matters would material adverse effect financial position results operations cash flows conducting internal investigation operations certain foreign subsidiaries west africa including possible violations us foreign corrupt practices act policies applicable laws june 2016 voluntarily disclosed existence extensive internal review sec united states department justice governmental entities intent fully cooperate agencies applicable authorities connection investigation may conducted connection matter review indicated material impact previously filed financial statements continued collect information cooperate authorities time unable predict ultimate resolution matters agencies addition course investigation discovered historical business transactions bids enter business transactions certain countries may subject us international sanctions disclosed information various governmental entities including involved ongoing investigation time unable predict ultimate resolution matters agencies including financial impact us note 19severance charges recognize severance charges costs associated workforce reductions facility closures exiting reducing footprint certain countries inventory impairment retirement excess machinery equipment based economic utility result downturn industry began 2015 impact business outlook continue take actions adjust operations cost structure reflect current frank’s international nv notes consolidated financial statements expected activity levels depending future market conditions actions may necessary adjust operations may result additional charges severance charges summarized thousands severance costs year ended december 31 2015 incurred costs 355 million due executing workforce reduction plan included closing certain facilities terminating leases also chairman board supervisory directors also held role executive chairman company transitioned nonexecutive director supervisory board effective december 31 2015 years ended december 31 2017 2016 incurred 27 million 165 million respectively due continued effort adjust workforce meet depressed demand industry fixed asset retirements abandonments year ended december 31 2016 identified certain equipment based specifications current market conditions longer economic utility therefore reached end useful life accordingly management decided retire equipment resulted charges 299 million year ended december 31 2017 retired additional equipment prior end originally estimated useful lives well abandoned capital projects resulted charge 65 million inventory impairment discussed note 5 inventories determined cost connector inventory exceeded net realizable value resulted charge 512 million accounts receivable writeoffs experienced payment delays certain customers nigeria angola venezuela fourth quarter 2017 management decided significantly reduce footprint nigeria angola temporarily cease operations venezuela believe diminish ability collect amounts owed result wrote trade accounts receivable 150 million year ended december 31 2017 note 20supplemental cash flow information supplemental cash flows noncash transactions follows periods indicated thousands frank’s international nv notes consolidated financial statements note 21segment information reporting segments operating segments defined components enterprise separate financial information available regularly evaluated chief operating decision maker “codm” deciding allocate resources assess performance comprised four reportable segments international services us services tubular sales blackhawk international services segment provides tubular services international offshore markets several onshore international regions customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies oilfield services companies us services segment provides tubular services active onshore oil gas drilling regions us including permian basin eagle ford shale haynesville shale marcellus shale niobrara shale utica shale well us gulf mexico tubular sales segment designs manufactures distributes large outside diameter od pipe connectors casing attachments sells large od pipe originally manufactured various pipe mills also provide specialized fabrication welding services support offshore projects including drilling production risers flowlines pipeline end terminations well long length tubulars 300 feet length use caissons pilings segment also designs manufactures proprietary equipment use international us services segments blackhawk segment provides well construction well intervention services products addition cementing tool expertise us mexican gulf mexico onshore us select international locations blackhawk’s customer base consists primarily major independent oil gas companies well oilfield services companies adjusted ebitda define adjusted ebitda net income loss interest income net depreciation amortization income tax benefit expense asset impairments gain loss disposal assets foreign currency gain loss equitybased compensation unrealized realized gain loss effects tra noncash adjustments charges credits review adjusted ebitda consolidated basis segment basis use adjusted ebitda assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization income tax foreign currency exchange rates charges credits adjusted ebitda limitations analytical tool considered alternative net income loss operating income loss cash flow operating activities measure financial performance presented accordance gaap codm uses adjusted ebitda primary measure segment reporting performance frank’s international nv notes consolidated financial statements following table presents reconciliation segment adjusted ebitda net income loss thousands 1 amounts previously reported corporate 478 96 2016 2015 respectively reclassified us services conform current presentation 2 please see note 13 related party transactions discussion 3 comprised equitybased compensation expense 2017 13862 2016 15978 2015 26318 mergers acquisition expense 2017 459 2016 13784 2015 none severance charges 2017 75354 2016 46406 2015 35484 changes value contingent consideration 2017 none 2016 none 2015 1532 unrealized realized losses 2017 2791 2016 110 2015 none investigationrelated matters 2017 6143 2016 6397 2015 1446 adjustments 2017 487 2016 none 2015 none frank’s international nv notes consolidated financial statements following table sets forth certain financial information respect reportable segments included “corporate other” intersegment eliminations thousands 1 amounts previously reported corporate 478 96 2016 2015 respectively reclassified us services conform current presentation nongaap financial measure disclosed codm review total assets segment part financial information provided therefore asset information provided table frank’s international nv notes consolidated financial statements netherlands based company derive revenue services product sales clients primarily oil gas industry years ended december 31 2017 2016 one customer accounted 10 13 revenues respectively years four segments generated revenue customer single customer accounted 10 revenue year ended december 31 2015 geographic areas revenue generated netherlands immaterial years ended december 31 2017 2016 2015 united states individual country represented 10 revenue years ended december 31 2017 december 31 2016 year ended december 31 2015 united states well united arab emirates revenues 1404 million represented 10 revenue based location services provided products sold based unique nature operating structure revenue generating assets interchangeable two categories offshore ii onshore addition onshore assets used us based upon certification longlived assets netherlands insignificant years presented frank’s international nv notes consolidated financial statements note 22quarterly financial data unaudited summarized quarterly financial data years ended december 31 2017 2016 set forth thousands except per share data 1 gross profit defined total revenue less cost revenues less depreciation amortization attributed cost revenues 2 fourth quarter includes inventory impairments 512 million accounts receivable writeoffs 150 million please see note 19 severance charges notes consolidated financial statements 3 third quarter includes impact derecognition tra liability please see note 13 related party transactions notes consolidated financial statements 4 sum individual quarterly income losses per share amounts may agree yeartodate net income loss per common share quarterly computation based weighted average number common shares outstanding period frank’s international nv notes consolidated financial statements financial statements periods ended september 30 june 30 march 31 2017 revised correct immaterial misclassifications resulting decrease cost revenues services increase cost revenues products following amounts associated blackhawk product cost revisions impact two financial statement line items revisions impact net income loss working capital cash flows total equity previously reported thousands 2017 quarterly revisions effected connection 2018 unaudited interim financial statements filings form 10q item 9item 8 financial statements supplementary data management’s report internal control financial reporting management company including chief executive officer chief financial officer responsible establishing maintaining adequate internal control financial reporting defined rules 13a15f 15d15f securities exchange act 1934 amended internal control financial reporting process designed supervision chief executive officer chief financial officer provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures made accordance authorizations management directors iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition assets could material effect financial statements conducted evaluation effectiveness internal control financial reporting december 31 2018 based internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 based evaluation management concluded internal control financial reporting effective december 31 2018 effectiveness internal control financial reporting december 31 2018 audited kpmg llp independent registered public accounting firm stated report included herein report independent registered public accounting firm stockholders board directors frank’s international nv opinion consolidated financial statements audited accompanying consolidated balance sheet frank’s international nv subsidiaries company december 31 2018 related consolidated statements operations comprehensive loss stockholders’ equity cash flows year ended december 31 2018 related notes financial statements financial statement schedule ii valuation qualifying accounts collectively consolidated financial statements opinion consolidated financial statements present fairly material respects financial position company december 31 2018 results operations cash flows year ended december 31 2018 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states pcaob company’s internal control financial reporting december 31 2018 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission report dated february 25 2019 expressed unqualified opinion effectiveness company’s internal control financial reporting basis opinion consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement consolidated financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures consolidated financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation consolidated financial statements believe audits provide reasonable basis opinion kpmg llp served company’s auditor since 2018 houston texas february 25 2019 report independent registered public accounting firm stockholders board directors frank’s international nv opinion internal control financial reporting audited frank’s international nv subsidiaries company internal control financial reporting december 31 2018 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission opinion company maintained material respects effective internal control financial reporting december 31 2018 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission also audited accordance standards public company accounting oversight board united states pcaob consolidated balance sheet company december 31 2018 related consolidated statements operations comprehensive loss stockholders’ equity cash flows year ended december 31 2018 related notes financial statements financial statement schedule ii valuation qualifying accounts collectively consolidated financial statements report dated february 25 2019 expressed unqualified opinion consolidated financial statements basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audit also included performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate kpmg llp houston texas february 25 2019 report independent registered public accounting firm board supervisory directors stockholders frank’s international nv opinion financial statements audited consolidated balance sheet frank’s international nv subsidiaries “company” december 31 2017 related consolidated statements operations comprehensive loss stockholders’ equity cash flows two years period ended december 31 2017 including related notes schedule valuation qualifying accounts two years period ended december 31 2017 appearing item 15a2 collectively referred “consolidated financial statements” opinion consolidated financial statements present fairly material respects financial position company december 31 2017 results operations cash flows two years period ended december 31 2017 conformity accounting principles generally accepted united states america change accounting principle discussed note 1 accompanying consolidated financial statements company changed manner accounts goodwill impairment 2017 basis opinion consolidated financial statements responsibility companys management responsibility express opinion company’s consolidated financial statements based audits public accounting firm registered public company accounting oversight board united states pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits consolidated financial statements accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement consolidated financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures consolidated financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation consolidated financial statements believe audits provide reasonable basis opinion pricewaterhousecoopers llp houston texas february 27 2018 served companys auditor 2008 2018 accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements frank’s international nv notes consolidated financial statements note 1basis presentation significant accounting policies nature business frank’s international nv “finv” limited liability company organized laws netherlands global provider highly engineered tubular services tubular fabrication specialty well construction well intervention solutions oil gas industry finv provides services leading exploration production companies offshore onshore environments focus complex technically demanding wells basis presentation consolidated financial statements finv years ended december 31 2018 2017 2016 include activities frank’s international cv “ficv” blackhawk group holdings llc “blackhawk” wholly owned subsidiaries collectively “company” “we” “us” “our” intercompany accounts transactions eliminated purposes preparing consolidated financial statements accompanying consolidated financial statements related financial information prepared accordance generally accepted accounting principles united states america “gaap” opinion management consolidated financial statements reflect adjustments consisting solely normal accruals necessary fair presentation financial results periods presented consolidated financial statements prepared historical cost basis using united states dollar reporting currency functional currency primarily united states dollar reclassifications certain prioryear amounts reclassified conform current year’s presentation reclassifications impact net income loss working capital cash flows total equity previously reported 2018 company’s chief operating decision maker “codm” changed methodology used allocate bonus medical claims expenses among segments previously us bonus medical claims expenses absorbed us services segment beginning first quarter 2018 bonus expenses second quarter 2018 medical claims expenses portion expenses attributable blackhawk employees allocated blackhawk segment change allocation us bonus medical claims expenses impact consolidated operating income loss net income loss adjusted ebitda working capital cash flows total equity previously reported however segment operating income loss segment adjusted ebitda blackhawk us services segments impacted blackhawk segment year ended december 31 2018 charged 45 million bonus medical claims expenses would previously charged us services segment significant accounting policies accounting estimates preparation consolidated financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date consolidated financial statements reported amounts revenues expenses reporting period actual results could differ estimates accounts receivable establish allowance doubtful accounts based various factors including historical experience current aging status customer accounts financial condition customers business political environment customers operate provisions doubtful accounts recorded becomes probable customer accounts uncollectible frank’s international nv notes consolidated financial statements cash equivalents consider highly liquid financial instruments purchased original maturity three months less cash equivalents throughout year cash balances excess federally insured limits deposited various financial institutions experienced losses accounts believe exposed significant credit risk cash equivalents cash surrender value life insurance policies cash surrender value life insurance policies held within rabbi trust purpose paying future executive deferred compensation benefit obligations income loss associated policies included income net consolidated statements operations income loss changes cash surrender value life insurance policies 12 million 24 million 11 million years ended december 31 2018 2017 2016 respectively comprehensive income accounting standards reporting comprehensive income require certain items including foreign currency translation adjustments unrealized gains losses marketable securities presented components comprehensive income cumulative amounts recognized us standards reflected consolidated balance sheet accumulated comprehensive loss component stockholders’ equity contingencies certain conditions may exist date consolidated financial statements issued may result loss us resolved one future events occur fail occur management input legal counsel assesses contingent liabilities assessment inherently involves exercise judgment assessing loss contingencies related legal proceedings pending us unasserted claims may result proceedings management input legal counsel evaluates perceived merits legal proceedings unasserted claims well perceived merits amount relief sought expected sought therein assessment contingency indicates probable material loss incurred amount liability estimated liability would accrued consolidated financial statements assessment indicates potentially material loss contingency probable reasonably possible probable cannot estimated nature contingent liability together estimate range possible loss determinable material disclosed loss contingencies considered remote generally disclosed unless involve guarantees case guarantees would disclosed derivative financial instruments deem appropriate use foreign currency forward derivative contracts mitigate risk fluctuations foreign currency exchange rates use instruments mitigate exposure nonlocal currency working capital hold issue financial instruments trading speculative purposes account derivative activities provisions accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations frank’s international nv notes consolidated financial statements income loss per share basic income loss per share excludes dilution computed dividing net income loss available common shareholders weighted average number common shares outstanding period diluted income loss per share reflects potential dilution could occur securities issue common stock exercised converted common stock fair value financial instruments financial instruments consist primarily cash equivalents shortterm investments trade accounts receivable availableforsale securities derivative financial instruments obligations trade accounts payable short term debt due shortterm nature carrying values cash equivalents shortterm investments trade accounts receivable trade accounts payable shortterm debt approximate fair value refer note 10fair value measurements fair values availableforsale securities derivative financial instruments obligations foreign currency translations transactions results operations foreign subsidiaries functional currencies us dollar translated using average exchange rates period assets liabilities foreign subsidiaries translated using exchange rates effect balance sheet dates gains losses resulting translations included accumulated comprehensive loss within stockholders’ equity foreign subsidiaries designated us dollar functional currency gains losses resulting balance sheet remeasurement foreign operations included consolidated statements operations incurred gains losses resulting transactions denominated foreign currency also included consolidated statements operations incurred goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount quantitative impairment test performed quantitative goodwill impairment test used identify existence impairment amount impairment loss test compares fair value reporting unit carrying amount including goodwill amount impairment goodwill measured excess carrying value fair value fourth quarter 2017 elected change timing annual goodwill impairment testing december 31 october 31 us services international services tubular sales manufacturing reporting units accounting change considered preferable allows additional time complete annual goodwill impairment test better aligns planning process synchronizes testing date reporting units october 31 blackhawk reporting units annual impairment testing date change result adjustments previously issued financial statements goodwill impairment recorded years ended december 31 2018 2017 2016 goodwill allocated operating segments follows us services approximately 162 million tubular sales approximately 24 million blackhawk approximately 1924 million inputs used determination fair value generally level 3 inputs see note 10fair value measurements notes consolidated financial statements discussion fair value measures frank’s international nv notes consolidated financial statements impairment longlived assets longlived assets include property plant equipment certain assets held used us reviewed events changes circumstances indicate carrying amount assets may recoverable based estimated future cash flows assessment indicates carrying values recoverable determined based undiscounted cash flows remaining useful lives impairment loss recognized based fair value asset income taxes operate many legal forms approximately 50 countries result subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenues rather profits withholding taxes based revenues determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact upon amount income taxes provide given year provide income tax expense based liability method accounting income taxes based authoritative accounting guidance deferred tax assets liabilities recorded based upon temporary differences tax basis assets liabilities carrying values financial reporting purposes measured using tax rates laws expected effect differences projected reverse valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances made judgments estimates regarding future taxable income estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions deferred tax expense benefit result changes deferred tax assets liabilities associated valuation allowances period impact uncertain tax position taken expected taken income tax return recognized financial statements largest amount likely sustained upon examination relevant taxing authority intangible assets identifiable intangible assets amortized using straightline method estimated useful lives assets evaluate impairment intangible assets asset group basis whenever circumstances indicate carrying value may recoverable intangible assets deemed impaired written fair value discounted cash flows available comparable market values following table provides information related intangible assets december 31 2018 2017 thousands frank’s international nv notes consolidated financial statements amortization expense intangibles assets 108 million 114 million 35 million years ended december 31 2018 2017 2016 respectively december 31 2018 estimated amortization expense intangible assets next five years follows thousands inventories stated lower cost primarily average cost net realizable value work progress finished goods include cost materials labor manufacturing overhead inventory placed service either capitalized included equipment expensed based upon capitalization policies property plant equipment property plant equipment stated cost less accumulated depreciation expenditures significant improvements betterments capitalized enhance extend useful life asset expenditures routine repairs maintenance improve extend life related assets expensed incurred properties equipment sold retired otherwise disposed related cost accumulated depreciation removed books resulting gain loss recognized consolidated statements operations depreciation fixed assets computed using straightline method estimated useful lives individual assets leasehold improvements amortized straightline basis shorter estimated useful lives lease term depreciation expense 1005 million 1107 million 1107 million years ended december 31 2018 2017 2016 respectively revenue recognition revenues recognized control promised goods services transferred customers amount reflects consideration expect entitled exchange goods services payment terms services products generally range 30 days 120 days given shortterm nature service product offerings contracts significant financing component consideration receive generally fixed service revenues recognized time services performed rendered rates services typically priced per day per manhour similar basis generally perform services either direct service purchase orders master service agreements supplemented individual callout provisions customers contracted arrangements accrual recorded unbilled revenue earned yet invoiced revenues product sales generally recognized point time product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions contain postdelivery obligations tubular sales blackhawk segment customers requested store pipe connectors cementing products purchased us facilities recognize revenues “bill hold” sales frank’s international nv notes consolidated financial statements following criteria met 1 substantive reason arrangement 2 product identified customer’s asset 3 product ready delivery customer 4 cannot use product direct another customer shortterm investments shortterm investments consist commercial paper classified heldtomaturity fund primarily invests shortterm debt securities investments original maturities greater three months less twelve months december 31 2018 2017 carrying amount shortterm investments 266 million 810 million respectively stockbased compensation 2013 longterm incentive plan provides granting stock options stock appreciation rights “sars” restricted stock restricted stock units “rsus” performance restricted stock units “prsus” dividend equivalent rights types equity cash incentive awards employees nonemployee directors service providers stockbased compensation expense measured grant date sharebased awards based value stockbased compensation expense recognized straightline basis vesting period included general administrative expense consolidated statements operations stockbased compensation currently consists rsus prsus grant date fair value rsus entitled receive dividends vested measured reducing share price date present value dividends expected paid requisite vesting period discounted appropriate riskfree interest rate grant date fair value compensation expense prsu grants estimated based monte carlo simulation using companys closing stock price day grant date recent accounting pronouncements changes gaap established financial accounting standards board “fasb” form accounting standards updates “asus” fasb’s accounting standards codification consider applicability impact accounting pronouncements asus listed assessed either determined applicable expected immaterial impact consolidated financial position results operations cash flows june 2018 fasb issued new guidance intended simplify aspects sharebased compensation issued nonemployees making guidance consistent accounting employee sharebased compensation guidance effective annual periods beginning december 15 2018 including interim periods within periods adopted guidance january 1 2019 adoption material impact consolidated financial statements may 2017 fasb issued new guidance clarify reduce diversity practice ii cost complexity accounting change terms conditions sharebased payment award guidance effective annual periods beginning december 15 2017 including interim periods within periods amendments guidance applied prospectively award modified adoption date adopted guidance january 1 2018 adoption impact consolidated financial statements january 2017 fasb issued new accounting guidance business combinations clarifying definition business objective guidance help companies organizations acquired sold business evaluate whether transactions accounted acquisitions disposals assets businesses public entities guidance effective annual periods beginning december 15 2017 including interim periods within periods adopted guidance january 1 2018 adoption impact consolidated financial statements frank’s international nv notes consolidated financial statements june 2016 fasb issued new accounting guidance credit losses financial instruments guidance includes replacement “incurred loss” approach recognizing credit losses financial assets including trade receivables methodology reflects expected credit losses considers historical current information well reasonable supportable forecasts public entities guidance effective financial statements issued fiscal years beginning december 15 2019 including interim periods within fiscal years early application permitted entities fiscal years beginning december 15 2018 including interim periods within fiscal years management evaluating provisions new accounting guidance including period adopt determined impact adoption consolidated financial statements february 2016 fasb issued new accounting guidance leases main objective accounting guidance increase transparency comparability among organizations recognizing lease assets lease liabilities balance sheet disclosing key information leasing arrangements main difference previous gaap new guidance recognition lease assets lease liabilities lessees leases classified operating leases new guidance requires lessees recognize assets liabilities arising leases balance sheet defines lease contract conveys right control use identified property plant equipment period time exchange consideration control use identified asset means customer 1 right obtain substantially economic benefit use asset 2 right direct use asset accounting guidance requires disclosures lessees lessors meet objective enabling users financial statements assess amount timing uncertainty cash flows arising leases july 2018 fasb amended new lease accounting standard effort reduce burden adoption new lease accounting standard amended companies option electing apply new lease accounting standard either retrospective prospective basis public entities guidance effective financial statements issued fiscal years beginning december 15 2018 including interim periods within fiscal years adopted new lease accounting standard amended prospective basis effective january 1 2019 additionally implementing enterprisewide lease management system assist accounting evaluating additional changes processes internal controls ensure meet standards reporting disclosure requirements make accounting policy election keep leases initial term 12 months less balance sheet recognize lease payments consolidated statements operations straightline basis lease term estimate adoption standard result recognition right use assets lease liabilities operating leases 300 million 400 million january 1 2019 anticipate adoption new lease accounting standard materially affect statement operations statement cash flows may 2014 fasb issued amendments guidance recognition revenue based upon entity’s contracts customers transfer goods services new revenue standard entity recognize revenue depict transfer promised goods services customers amount reflects consideration entity expects entitled exchange goods services standard creates fivestep model requires companies exercise judgment considering terms contract relevant facts circumstances standard allows two transition methods full retrospective adoption standard applied periods presented b modified retrospective adoption standard applied current period presented financial statements including additional disclosures standard’s application impact individual financial statement line items july 2015 fasb deferred effective date december 15 2017 annual periods interim reporting periods within fiscal years beginning date adopted new revenue standard effective january 1 2018 using modified retrospective method recognized cumulative effect initially applying new revenue standard adjustment opening balance retained earnings adjustment related solely revenues certain product sales billandhold arrangements tubular sales segment comparative information restated continues reported accounting standards effect periods impact revenue applying new revenue recognition standard year ended december 31 2018 immaterial expect impact adoption new standard immaterial financial results ongoing basis elected apply certain practical expedients available new revenue standard elected expense cost obtaining contracts sales commissions incurred amortization period would one frank’s international nv notes consolidated financial statements year less due length contracts also elected assess immaterial promises context contracts performance obligations exclude taxes assessment transaction price arrangements taxes collected entity customer disclose value unsatisfied performance obligations contracts original expected duration one year less contracts customers shortterm nature fall within exemption significant unsatisfied performance obligations defined new revenue standard cumulative effect changes made consolidated january 1 2018 balance sheet adoption new revenue standard follows thousands note 2noncontrolling interest hold economic interest ficv responsible operational management administrative decisions relating ficv’s business result financial results ficv consolidated recorded noncontrolling interest consolidated balance sheet respect remaining economic interest ficv held mosing holdings net loss attributable noncontrolling interest statements operations represented portion losses attributable economic interest ficv held mosing holdings allocable domestic loss ficv finv subject us taxation effective august 2016 conversion mosing holdings’ series preferred stock see note 12preferred stock mosing holdings transferred interest ficv us noncontrolling interest eliminated result amount included net loss attributable noncontrolling interest year ended december 31 2016 august 26 2016 reconciliation net loss attributable noncontrolling interest detailed follows thousands 1 represents net loss august 26 2016 mosing holdings transferred interest finv 2 represents income tax benefit entities outside ficv well income tax attributable proportionate share us operations partnership interests ficv august 26 2016 3 represents results operations entities outside ficv august 26 2016 frank’s international nv notes consolidated financial statements 4 represents economic interest ficv held mosing holdings preferred stock conversion august 26 2016 effective august 26 2016 mosing holdings delivered economic interest ficv us note 3acquisitions divestitures related party acquisition november 2 2018 frank’s international llc entered purchase agreement mosing ventures llc mosing land cattle company llc mosing queens row properties llc 4m investments companies related us common ownership “mosing companies” purchase agreement acquired real property previously leased mosing companies two additional properties located adjacent properties total purchase price 370 million including legal fees closing adjustments normal operating activity purchase closed december 18 2018 please see note 13related party transactions blackhawk acquisition november 1 2016 completed transaction acquire outstanding shares blackhawk ultimate parent company blackhawk specialty tools llc pursuant terms definitive merger agreement “merger agreement” dated october 6 2016 blackhawk leading provider well construction well intervention services products conjunction acquisition fi tools holdings llc newly formed subsidiary merged blackhawk surviving merger whollyowned subsidiary merger consideration comprised combination 1504 million cash hand 128 million shares common stock “common stock” cashfree debtfree basis total consideration 2946 million based closing share price october 31 2016 1125 including working capital adjustments accordingly results blackhawks operations november 1 2016 included consolidated financial statements year ended december 31 2016 blackhawk contributed revenue 100 million operating losses 74 million intention transaction augment tubular services business providing us opportunity diversify offerings emerge leader new business line significantly larger addressable market addition believe line wellregarded market leading technically differentiated specialty cementation tools blackhawk also provides well intervention products line brute packers related products continuing development products onshore offshore applications conjunction merger created fourth segment blackhawk recorded goodwill 1924 million segment divestitures beginning 2017 committed sell certain buildings international services segment aircraft us services segment see note 6property plant equipment additional information first quarter 2018 sold building classified held sale 08 million recorded immaterial loss third quarter 2018 sold building classified held sale net book value 03 million 26 million fourth quarter 2018 sold building classified held sale net book value 42 million recorded immaterial gain first quarter 2017 sold fully depreciated aircraft total sales price 13 million recorded gain sale 13 million third quarter 2017 sold additional aircraft net sales price 49 million recorded immaterial loss also sold building middle east net sales price 27 million recorded gain sale 06 million fourth quarter 2017 sold building canada total sales price 24 million recorded gain sale 03 million also sold third last aircraft total sales price 07 million related party recorded gain sale 07 million see note 13related party transactions additional information frank’s international nv notes consolidated financial statements note 4accounts receivable net accounts receivable december 31 2018 2017 follows thousands 1 amounts represent expenditures behalf nonconsolidated affiliates note 5inventories net inventories december 31 2018 2017 follows thousands note 6property plant equipment following summary property plant equipment december 31 2018 2017 thousands 1 balances december 31 2018 include acquisition land buildings 185 million 185 million respectively see note 13related party transactions additional information frank’s international nv notes consolidated financial statements third quarter 2017 committed sell certain buildings international services segment determined assets met criteria classified held sale consolidated balance sheet result reclassified buildings net book value 41 million property plant equipment assets held sale recognized 03 million loss third quarter 2018 building international services segment net book value 50 million met criteria classified held sale reclassified property plant equipment assets held sale consolidated balance sheet impairments recognized years ended december 31 2018 2017 2016 following table presents depreciation amortization associated line periods ended december 31 2018 2017 2016 thousands note 7other assets december 31 2018 2017 consisted following thousands 1 see note 10fair value measurements note 8 accounts payable accrued liabilities accounts payable accrued liabilities december 31 2018 2017 consisted following thousands frank’s international nv notes consolidated financial statements note 9debt credit facilities 1000 million revolving credit facility certain financial institutions including 200 million letters credit 100 million swingline loans matured august 2018 december 31 2017 28 million letters credit outstanding facility new asset based revolving credit facility november 5 2018 ficv frank’s international llc blackhawk borrowers finv certain finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc guarantors entered fiveyear senior secured revolving credit facility “new abl credit facility” jpmorgan chase bank na administrative agent “abl agent” financial institutions lenders total commitments 1000 million including 150 million available letters credit subject terms new abl credit facility ability increase commitments 2000 million maximum amount company may borrow new abl credit facility subject borrowing base based percentage certain eligible accounts receivable eligible inventory subject customary reserves adjustments obligations new abl credit facility fully unconditionally guaranteed jointly severally finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc subject customary exceptions exclusions addition obligations new abl credit facility secured first priority liens substantially assets property borrowers guarantors including pledges equity interests certain finv’s subsidiaries subject certain exceptions borrowings new abl credit facility bear interest finv’s option either alternate base rate “abr” defined therein calculated greatest rate interest publicly quoted wall street journal “prime rate” subject increase decrease prime rate effective date change occurs ii federal funds effective rate subject 000 interest rate floor plus 050 iii onemonth adjusted libo rate defined therein plus 100 b adjusted libo rate defined therein plus case applicable margin applicable interest rate margin ranges 100 150 per annum abr loans 200 250 per annum eurodollar loans case based finv’s leverage ratio unused portion new abl credit facility subject commitment fee varies 0250 0375 per annum according average daily unused commitments new abl credit facility interest eurodollar loans payable end selected interest period less frequently quarterly interest abr loans payable monthly arrears new abl credit facility contains various covenants restrictive provisions limit subject certain customary exceptions thresholds finv’s ability among things 1 enter asset sales 2 incur additional indebtedness 3 make investments acquisitions loans create incur liens 4 pay certain dividends make distributions 5 engage transactions affiliates new abl credit facility also requires finv maintain minimum fixed charge coverage ratio 10 based ratio consolidated ebitda defined therein minus unfinanced capital expenditures b fixed charges defined therein either event default occurs new abl facility ii availability new abl credit facility falls least two consecutive calendar days greater 125 million b 15 lesser borrowing base aggregate commitments “fccr trigger event” accounts receivable received finv’s us subsidiaries parties new abl credit facility deposited deposit accounts subject deposit control agreements favor abl agent fccr trigger event deposit accounts would subject “springing” cash dominion fccr trigger event company subject compliance fixed charge coverage ratio “springing” cash dominion default exists new abl credit facility availability facility preceding thirty consecutive frank’s international nv notes consolidated financial statements days equal least greater x 125 million 15 lesser borrowing base aggregate commitments finv fails perform obligations agreement results event default commitments new abl credit facility could terminated outstanding borrowings new abl credit facility may declared immediately due payable new abl credit facility also contains cross default provisions apply finv’s indebtedness december 31 2018 finv borrowings outstanding new abl credit facility letters credit outstanding 49 million availability 697 million insurance notes payable 2018 entered note finance annual insurance premiums totaling 68 million note bears interest annual rate 39 final maturity date october 2019 december 31 2018 total outstanding balance 56 million 2017 entered three notes finance annual insurance premiums totaling 51 million notes bear interest annual rate 29 final maturity date october 2018 december 31 2017 total outstanding balance 47 million note 10fair value measurements follow fair value measurement authoritative accounting guidance measuring fair values assets liabilities financial statements fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date utilize market data assumptions market participants independent knowledgeable willing able transact would use pricing asset liability including assumptions risk risks inherent inputs valuation technique able classify fair value balances based observability inputs authoritative guidance fair value measurements establishes three levels fair value hierarchy defined follows • level 1 unadjusted quoted prices identical assets liabilities active markets • level 2 quoted prices markets considered active financial instruments significant inputs observable either directly indirectly substantially full term asset liability • level 3 significant unobservable inputs use little market data exists requiring significant degree judgment hierarchy gives highest priority level 1 measurements lowest priority level 3 measurements depending particular asset liability input availability vary depending factors product type longevity product market particular transaction conditions cases certain inputs used measure fair value may categorized different levels fair value hierarchy disclosure purposes accounting guidance lowest level contains significant inputs used valuation chosen frank’s international nv notes consolidated financial statements financial assets liabilities summary financial assets liabilities measured fair value recurring basis december 31 2018 2017 follows thousands derivative financial instruments consist shortduration foreign currency forward contracts fair value derivative financial instruments based quoted market values including foreign exchange forward rates interest rates fair value computed discounting projected future cash flow amounts present value december 31 2018 2017 derivative financial instruments included financial statement line item accounts payable accrued liabilities consolidated balance sheets investments associated deferred compensation plan consist primarily cash surrender value life insurance policies included assets consolidated balance sheets liability associated deferred compensation plan included liabilities consolidated balance sheets investments change result contributions payments fluctuations market assets liabilities measured using significant observable inputs reported fair value based thirdparty broker statements derived fair value funds underlying investments also marketable securities publicly traded equity securities indirect result strategic investments reported fair value based price stock included assets consolidated balance sheets frank’s international nv notes consolidated financial statements assets liabilities measured fair value nonrecurring basis apply provisions fair value measurement standard nonrecurring nonfinancial measurements including business combinations assets identified held sale well impairment related goodwill longlived assets business combinations purchase price allocated assets acquired liabilities assumed based discounted cash flow model intangibles well market assumptions valuation equipment fixed assets perform goodwill impairment assessment reporting unit comparing estimated fair value reporting unit reporting unit’s carrying value including goodwill estimate fair value reporting unit using discounted cash flow analysis based management’s shortterm longterm forecast operating performance analysis includes significant assumptions regarding discount rates revenue growth rates expected profitability margins forecasted capital expenditures timing expected future cash flows based market conditions estimated fair value reporting unit exceeds carrying amount goodwill reporting unit considered impaired carrying amount reporting unit exceeds estimated fair value impairment loss measured recorded conducting impairment test longlived assets goodwill first compare estimated future undiscounted cash flows associated asset’s carrying amount undiscounted cash flows less asset’s carrying amount determine asset’s fair value using discounted cash flow analysis analyses based estimates management’s shortterm longterm forecast operating performance including revenue growth rates expected profitability margins estimates remaining useful life service potential asset discount rate based weighted average cost capital assets meet criteria classified held sale market approach used determine fair value based thirdparty appraisal reports impairment assessments discussed incorporate inherent uncertainties including projected commodity pricing supply demand services future market conditions difficult predict volatile economic environments could result impairment charges future periods actual results materially differ estimated assumptions utilized forecasts crude oil prices decline significantly remain low levels sustained period time could required record impairment carrying value longlived assets future could material adverse impact operating results given unobservable nature inputs discounted cash flow models deemed use level 3 inputs fair value considerations carrying values consolidated balance sheet cash equivalents shortterm investments trade accounts receivable current assets accounts payable accrued current liabilities lines credit approximate fair values due short maturities note 11 derivatives enter shortduration foreign currency forward derivative contracts reduce risk foreign currency fluctuations use instruments mitigate exposure nonlocal currency operating working capital record contracts fair value consolidated balance sheets although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations frank’s international nv notes consolidated financial statements december 31 2018 2017 following foreign currency derivative contracts outstanding us dollars thousands following table summarizes location fair value amounts derivative contracts consolidated balance sheets december 31 2018 2017 thousands following table summarize location amounts unrealized realized gains losses derivative contracts consolidated statements operations december 31 2018 2017 2016 thousands derivative transactions governed international swaps derivatives association master agreements include stipulations regarding right offset event counterparty default performance obligations default occur parties right net amounts payable receivable single net settlement parties accounting policy offset derivative assets liabilities executed counterparty master netting arrangement exists frank’s international nv notes consolidated financial statements following table presents gross net fair values derivatives december 31 2018 2017 thousands note 12preferred stock august 19 2016 received notice mosing holdings exercising right exchange 52976000 common shares following securities 52976000 shares preferred stock ii 52976000 units ficv august 26 2016 issued 52976000 common shares mosing holdings share preferred stock liquidation preference equal par value €001 per share entitled annual dividend equal 025 par value additionally share preferred stock entitled holder one vote preferred stockholders voted common stockholders single class matters presented finv’s shareholders vote upon conversion preferred stock issued outstanding convertible preferred shares number common shares authorized capital increased 52976000 shares equal number convertible preferred shares converted common shares additionally upon exchange convertible preferred stock mosing holdings entitled receive amount cash equal nominal value convertible preferred share plus accrued unpaid dividends respect stock cash payment 06 million paid september 23 2016 conjunction conversion mosing holdings delivered interest ficv us longer owns interest ficv result transaction also reallocated accumulated comprehensive loss attributable noncontrolling interest note 13related party transactions engaged certain transactions companies related us common ownership entered various operating leases lease facilities affiliated companies rent expense associated related party leases 65 million 69 million 80 million years ended december 31 2018 2017 2016 respectively november 2 2018 frank’s international llc entered purchase agreement mosing ventures llc mosing land cattle company llc mosing queens row properties llc 4m investments companies related us common ownership “mosing companies” purchase agreement acquired real property previously leased mosing companies two additional properties located adjacent properties total purchase price 370 million including legal fees closing adjustments normal operating activity purchase closed december 18 2018 properties conveyed asis except 10 years following closing date parties continue certain rights obligations terms agreements purchased properties acquired mosing companies time initial public offering made improvements purchased properties lease period purchase price calculated excluding value improvements purchase close longer lease acquired properties mosing companies party certain agreements relating rental aircraft western airways “wa” entity owned mosing family wa agreements reflected dry lease wet lease rental whereby charged flat monthly fee primarily crew hangar maintenance administration costs addition variable costs fuel maintenance also earned charter income third party usage revenue sharing agreement recorded immaterial amount charter expense year ended december 31 2018 recorded net charter expense 11 frank’s international nv notes consolidated financial statements million 13 million years ended december 31 2017 2016 respectively august 2017 paid wa 02 million commission brokering sale plane december 2017 sold plane mosing aviation llc entity owned mosing family 07 million rental agreements terminated wa effective december 29 2017 upon sale last aircraft tax receivable agreement mosing holdings permitted transferees converted preferred stock shares common stock oneforone basis august 26 2016 subject customary conversion rate adjustments stock splits stock dividends reclassifications similar transactions delivery equivalent portion interests ficv us “conversion” ficv made election section 754 internal revenue code pursuant section 754 election conversion resulted adjustment tax basis tangible intangible assets ficv respect portion ficv held finv adjustments allocated finv adjustments tax basis tangible intangible assets ficv described would available absent conversion basis adjustments may reduce amount tax finv would otherwise required pay future basis adjustments may also decrease gains increase losses future dispositions certain capital assets extent tax basis allocated capital assets tra entered ficv mosing holdings connection initial public offering “ipo” generally provides payment finv 85 amount actual reductions payments us federal state local income tax franchise tax reductions refer “cash savings” periods ipo result tax basis increases resulting conversion ii imputed interest deemed paid us result additional tax basis arising payments tra addition tra provides payment us interest earned due date without extensions corresponding tax return date payment specified tra payments tra conditioned upon holder rights tra continued ownership interest either ficv finv retain remaining 15 cash savings estimation liability tra nature imprecise subject significant assumptions regarding amount timing future taxable income december 31 2018 finv cumulative loss prior 36 month period based history losses well uncertainty regarding timing amount future taxable income longer able conclude future cash savings lead additional payouts tra beyond estimated 02 million december 31 2018 additional tra liability may recognized future based changes expectations regarding timing likelihood future cash savings payment obligations tra obligations ficv term tra continue tax benefits utilized expired unless finv elects exercise sole right terminate tra early finv elects terminate tra early may sole discretion would required make immediate payment equal present value anticipated future tax benefits subject tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits ficv interests mosing holdings transferees termination date deemed exchanged termination date early termination payment may made significantly advance actual realization future benefits addition payments due tra similarly accelerated following certain mergers changes control situations finv’s obligations tra could substantial negative impact liquidity could effect delaying deferring preventing certain mergers asset sales forms business combinations changes control example tra terminated december 31 2018 estimated termination payment would approximately 446 million calculated using discount rate 587 foregoing number merely estimate actual payment could differ materially finv holding company operations ability make payments tra dependent ability ficv make distributions amount sufficient cover finv’s obligations agreements ability turn may depend ability ficv’s subsidiaries provide payments ability ficv subsidiaries make distributions subject among things applicable provisions dutch law may limit amount funds available distribution restrictions debt instruments frank’s international nv notes consolidated financial statements extent finv unable make payments tra reason except case acceleration payments thereunder occurring connection early termination tra certain mergers change control payments deferred accrue interest paid finv prohibited paying dividends common stock note 14loss per common share basic loss per common share determined dividing net loss weighted average number common shares outstanding period diluted loss per share determined dividing loss attributable common stockholders weighted average number common shares outstanding assuming potentially dilutive shares issued apply treasury stock method determine dilutive weighted average common shares represented unvested restricted stock units espp shares august 26 2016 date conversion mosing holdings preferred stock mosing holdings transfer interest ficv us diluted loss per share calculation assumed conversion 100 outstanding preferred stock converted basis accordingly numerator also adjusted include earnings allocated noncontrolling interest taking account tax effect exchange following table summarizes basic diluted loss per share calculations thousands except per share amounts note 15stockbased compensation 2013 longterm incentive plan 2013 longterm incentive plan “ltip” stock options sars restricted stock restricted stock units dividend equivalent rights types equity cash incentive awards may granted employees nonemployee directors service providers ltip expires 10 years unless prior date maximum number shares available issuance plan issued board directors terminates plan 20000000 shares common stock reserved issuance ltip december 31 2018 12714143 shares remained available issuance frank’s international nv notes consolidated financial statements restricted stock units upon completion ipo pursuant ltip began granting restricted stock units substantially rsus granted ltip vest ratably period one three years treasury stock consists shares withheld employees settle personal tax obligations arose result restricted stock units vested certain restricted stock unit awards provide accelerated vesting qualifying terminations employment service employees granted rsus entitled dividends declared underlying shares restricted stock unit unvested grant date fair value award measured reducing grant date price common stock present value dividends expected paid underlying shares requisite service period discounted appropriate riskfree interest rate weighted average grant date fair value rsus granted years ended december 31 2018 2017 2016 95 million 121 million 116 million respectively compensation expense recognized ratably vesting period forfeitures recorded occur stockbased compensation expense relating rsus included general administrative expenses consolidated statements operations years ended december 31 2018 2017 2016 89 million 128 million 156 million respectively total fair value rsus vested years ended december 31 2018 2017 2016 67 million 99 million 226 million respectively unamortized stock compensation expense december 31 2018 relating rsus totaled approximately 86 million expensed weighted average period 169 years nonvested rsus outstanding december 31 2018 changes year follows performance restricted stock units purpose prsus closely align incentive compensation executive leadership team duration performance cycle returns finv’s shareholders thereby motivate executive leadership team create sustained value finv shareholders design prsu grants effectuates purpose placing material amount incentive compensation executive risk offering extraordinary reward attainment extraordinary results design features prsu grant furtherance purpose include following 1 vesting prsus based total shareholder return “tsr” based comparison returns peer group 2 tsr computed entire performance period using 30day averaging period first 30 calendar days last 30 calendar days performance period mitigate effect stock price volatility tsr calculation assume reinvestment dividends 3 ultimate number shares issued pursuant prsu awards vary proportion actual tsr achieved percentile compared peer group performance period follows shares issued company’s performance falls 25th percentile ii 50 target level company achieves rank 25th percentile threshold level iii 100 target level company achieves rank 50th percentile target level iv 150 target level company achieves rank 75th percentile maximum level 2016 2017 grants 200 target level company achieves rank 90th percentile maximum level 2018 grant 4 unless qualifying termination defined prsu award agreement prsu’s executive forfeited upon executive’s termination employment performance period frank’s international nv notes consolidated financial statements though value prsu grant may change participant compensation expense recorded company determined date grant expected volatility based historical equity volatility stock based 50 historical 50 implied volatility weighting commensurate expected term prsu expected volatility considers factors historical volatility share price peer group companies implied volatility share price length time shares publicly traded split dividendadjusted closing stock prices assumed forfeiture rate prsus 2018 granted prsus fair value 20 million 275550 units “target level” performance period grants three oneyear periods january 1 2018 december 31 2018 january 1 2019 december 31 2019 january 1 2020 december 31 2020 “performance period” weighted average assumptions prsus granted 2018 follows 2017 granted prsus fair value 26 million 293083 units “target level” performance period grants threeyear period either january 1 2017 december 31 2019 september 27 2017 september 26 2020 “performance period” weighted average assumptions prsus granted 2017 follows 2016 granted prsus fair value 28 million 199168 units “target level” performance period grants threeyear period january 1 2016 december 31 2018 “performance period” weighted average assumptions prsus granted 2016 follows event death disability restrictions related forfeiture defined performance awards agreement lapse respect 100 prsus target level effective date event involuntary termination except cause company enter special vesting agreement executive restrictions forfeiture lapse upon termination event termination reason prior end performance period prsus forfeited stockbased compensation expense related prsus included general administrative expenses consolidated statements operations years ended december 31 2018 2017 2016 12 million 06 million 08 million respectively total fair value prsus vested year ended december 31 2017 02 frank’s international nv notes consolidated financial statements million prsu vestings years ended december 31 2018 2016 unamortized stock compensation expense december 31 2018 relating prsus totaled approximately 20 million expensed weighted average period 190 years nonvested prsus outstanding december 31 2018 changes year follows employee stock purchase plan franks international nv espp eligible employees right purchase shares common stock lesser 85 last reported sale price common stock last trading date immediately preceding first day option period ii 85 last reported sale price common stock last trading date immediately preceding last day option period espp intended qualify employee stock purchase plan section 423 internal revenue code reserved 30 million shares common stock issuance espp 25 million shares available issuance december 31 2018 shares issued employees espp totaled 232592 2018 155673 shares 2017 years ended december 31 2018 2017 2016 recognized 05 million 04 million 03 million compensation expense related stock purchased espp respectively january 2018 issued 99225 shares common stock employees plan satisfy employee purchase period july 1 2017 december 31 2017 increased common stock outstanding july 2018 issued 133367 shares common stock employees plan satisfy employee purchase period january 1 2018 june 30 2018 increased common stock outstanding note 16employee benefit plans us benefit plans 401k savings investment plan frank’s international llc administers 401k savings investment plan “plan” part employee benefits package employees required complete one month service becoming eligible participate plan terms plan match 100 first 3 eligible compensation employee contributes plan annual allowable irs limit additionally company provides 50 match employee contributions 4 6 eligible compensation matching contributions plan totaled 45 million 37 million 38 million years ended december 31 2018 2017 2016 respectively executive deferred compensation plan december 2004 certain affiliates adopted frank’s executive deferred compensation plan “edc plan” purpose edc plan provide participants opportunity defer receipt portion salary bonus specified cash compensation participant contributions immediately vested contributions vest five years service participant benefits edc plan shall paid directly general funds applicable participating subsidiary grantor trust commonly referred rabbi trust created purpose informally funding edc plan rabbi trust special separate fund shall established segregation assets shall made assure payment assets edc plan’s trust invested corporate owned splitdollar life insurance policy amalgamation mutual funds see note 7other assets frank’s international nv notes consolidated financial statements recorded compensation expense related vesting company’s contribution 10 million 17 million years ended december 31 2018 2016 respectively compensation expense related vesting company’s contribution recorded year ended december 31 2017 total liability recorded december 31 2018 2017 related edc plan 237 million 268 million respectively included noncurrent liabilities consolidated balance sheets note 17income taxes loss income tax expense benefit comprised following periods indicated thousands income taxes provided based upon tax laws rates countries operations conducted income earned components income tax expense benefit consist following periods indicated thousands year ending december 31 2017 company reported provisional basis tax impacts resulting enactment tax cuts jobs act “tax act” december 22 2017 2018 company completed analysis impacts tax act measurement period without adjustment company completed accounting impacts tax act although adjustments may necessary future periods due technical corrections andor regulatory guidance may issued internal revenue service frank’s international nv notes consolidated financial statements foreign taxes incurred following regions periods indicated thousands reconciliation differences income tax provision computed 21 us statutory rate effect december 31 2018 reported provision income taxes periods indicated follows thousands reconciliation using netherlands statutory rate provided significant operations netherlands frank’s international nv notes consolidated financial statements deferred tax assets liabilities recorded anticipated future tax effects temporary differences financial statement basis tax basis assets liabilities measured using tax rates laws expected effect differences projected reverse valuation allowance recorded likely benefit deferred tax asset realized significant components deferred tax assets liabilities follows thousands december 31 2018 income tax net operating loss “nol” carryforwards related us foreign operations approximately 3267 million addition research development tax credit carryforwards approximately 06 million ultimate utilization nols research development credits depend ability generate sufficient taxable income appropriate tax jurisdiction tax attributes expire follows valuation allowance increased 605 million 850 million 2018 result accumulated tax losses us various foreign tax jurisdictions evaluated available evidence determined likely losses realized intention cash earnings subsidiaries december 31 2018 permanently reinvested used meet operating cash flow needs existing plans demonstrate need repatriate foreign cash fund parent company activity however determine parent company funding required estimate cash needs may met without adverse tax consequences frank’s international nv notes consolidated financial statements december 31 2018 2017 total gross unrecognized tax benefits 03 million 02 million respectively substantially uncertain tax positions recognized future would impact effective tax rate elected classify interest penalties incurred income taxes income tax expense file income tax returns us various international tax jurisdictions december 31 2018 us tax returns remain open examination tax years 2017 2018 major foreign taxing jurisdictions subject tax open examination tax years 2010 2018 note 18commitments contingencies commitments committed various noncancelable operating lease agreements primarily related facilities equipment expire various dates throughout next several years future minimum lease commitments noncancelable operating leases initial remaining terms one year december 31 2018 follows thousands total rent expense incurred operating leases 168 million 187 million 191 million years ended december 31 2018 2017 2016 respectively also purchase commitments related inventory amount 422 million enter purchase commitments needed contingencies subject lawsuits claims arising ordinary course business time liability accrued loss probable reasonably estimated material accruals loss contingencies individually aggregate december 31 2018 december 31 2017 believe probability remote ultimate outcome matters would material adverse effect financial position results operations cash flows conducting internal investigation operations certain foreign subsidiaries west africa including possible violations us foreign corrupt practices act “fcpa” policies applicable laws june 2016 voluntarily disclosed existence extensive internal review sec us department justice “doj” governmental entities intent continue fully cooperate agencies applicable authorities connection investigation may conducted connection matter review indicated material impact previously filed financial statements continued collect information cooperate authorities time unable predict ultimate resolution matters agencies addition course investigation discovered historical business transactions bids enter business transactions certain countries may subject us international sanctions disclosed information us department commerce’s bureau industry security office export enforcement “oee” us department treasury’s office foreign assets control “ofac” well agencies frank’s international nv notes consolidated financial statements involved ongoing investigation discussed received action letter dated april 20 2018 oee stating oee closed investigation without taking action addition received action letter dated april 23 2018 ofac stating ofac closed investigation without taking action disclosed investigation possible violations fcpa remains ongoing continue cooperate sec doj relevant governmental entities connection therewith time unable predict ultimate resolution matters agencies including financial impact us board management committed continuously enhancing internal controls support improved compliance transparency throughout global operations note 19severance charges credits net recognize severance charges costs associated workforce reductions facility closures exiting reducing footprint certain countries inventory impairment retirement excess machinery equipment based economic utility result downturn industry impact business outlook continue take actions adjust operations cost structure reflect current expected activity levels depending future market conditions actions may necessary adjust operations may result additional charges severance charges credits net summarized thousands severance costs incurred costs due continued effort adjust cost base including reducing workforce meet depressed demand industry fixed asset retirements abandonments year ended december 31 2016 identified certain equipment based specifications current market conditions longer economic utility therefore reached end useful life accordingly management decided retire equipment resulted charges 299 million year ended december 31 2017 retired additional equipment prior end originally estimated useful lives well abandoned capital projects resulted charge 65 million inventory impairment 2017 determined cost connector inventory exceeded net realizable value resulted charge 512 million accounts receivable writeoff recovery experienced payment delays certain customers nigeria angola venezuela fourth quarter 2017 management decided significantly reduce footprint nigeria angola temporarily cease operations venezuela believe diminish ability collect amounts owed result wrote trade accounts receivable 150 million year ended december 31 2017 2018 recovered 49 million previously written receivables customer angola frank’s international nv notes consolidated financial statements note 20supplemental cash flow information supplemental cash flows noncash transactions follows periods indicated thousands note 21segment information reporting segments operating segments defined components enterprise separate financial information available regularly evaluated chief operating decision maker “codm” deciding allocate resources assess performance comprised four reportable segments international services us services tubular sales blackhawk international services segment provides tubular services international offshore markets several onshore international regions customers international markets primarily large exploration production companies including integrated oil gas companies national oil gas companies oilfield services companies us services segment provides tubular services active onshore oil gas drilling regions us including permian basin eagle ford shale haynesville shale marcellusutica shale niobrara shale woodford shale green river basin uintah basin well us gulf mexico tubular sales segment designs manufactures distributes large outside diameter “od” pipe connectors casing attachments sells large od pipe originally manufactured various pipe mills also provide specialized fabrication welding services support offshore projects including drilling production risers flowlines pipeline end terminations well long length tubulars 300 feet length use caissons pilings segment also designs manufactures proprietary equipment use international us services segments blackhawk segment provides well construction well intervention services products addition cementing tool expertise us mexican gulf mexico onshore us select international locations blackhawk’s customer base consists primarily major independent oil gas companies well oilfield services companies frank’s international nv notes consolidated financial statements revenues disaggregate revenue contracts customers geography segments believe best depicts nature amount timing uncertainty revenue cash flows affected economic factors following tables presents revenues disaggregated geography based location services provided products sold thousands revenue geographic area follows thousands netherlands based company derive revenue services product sales clients primarily oil gas industry single customer accounted 10 revenue year ended december 31 2018 years ended december 31 2017 2016 one customer accounted 10 13 revenues respectively years four segments generated revenue customer revenue generated netherlands immaterial years ended december 31 2018 2017 2016 united states individual country represented 10 revenue years ended december 31 2018 2017 2016 frank’s international nv notes consolidated financial statements adjusted ebitda define adjusted ebitda net income loss interest income net depreciation amortization income tax benefit expense asset impairments gain loss disposal assets foreign currency gain loss equitybased compensation unrealized realized gain loss effects tra noncash adjustments charges credits review adjusted ebitda consolidated basis segment basis use adjusted ebitda assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization income tax foreign currency exchange rates charges credits adjusted ebitda limitations analytical tool considered alternative net income loss operating income loss cash flow operating activities measure financial performance presented accordance gaap codm uses adjusted ebitda primary measure segment reporting performance following table presents reconciliation segment adjusted ebitda net loss thousands 1 includes corporate general administrative expenses 2 please see note 13related party transactions discussion 3 comprised equitybased compensation expense 2018 10621 2017 13862 2016 15978 mergers acquisition expense 2018 58 2017 459 2016 13784 severance charges credits 2018 310 2017 75354 2016 46406 unrealized realized gains losses 2018 1682 2017 2791 2016 110 investigationrelated matters 2018 5454 2017 6143 2016 6397 adjustments 2018 none 2017 487 2016 none frank’s international nv notes consolidated financial statements following table sets forth certain financial information respect reportable segments thousands nongaap financial measure disclosed codm review total assets segment part financial information provided therefore asset information provided table based unique nature operating structure revenue generating assets interchangeable two categories offshore ii onshore addition onshore assets used us based upon certification longlived assets netherlands insignificant years presented frank’s international nv notes consolidated financial statements note 22quarterly financial data unaudited summarized quarterly financial data years ended december 31 2018 2017 set forth thousands except per share data 1 gross profit defined total revenue less cost revenues less depreciation amortization attributed cost revenues 2 fourth quarter includes inventory impairments 512 million accounts receivable writeoffs 150 million please see note 19severance charges credits net notes consolidated financial statements 3 third quarter includes impact derecognition tra liability please see note 13related party transactions notes consolidated financial statements 4 sum individual quarterly income losses per share amounts may agree yeartodate net income loss per common share quarterly computation based weighted average number common shares outstanding period item 9item 8 financial statements supplementary data management’s report internal control financial reporting management company including chief executive officer chief financial officer responsible establishing maintaining adequate internal control financial reporting defined rules 13a15f 15d15f securities exchange act 1934 amended internal control financial reporting process designed supervision chief executive officer chief financial officer provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures made accordance authorizations management directors iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition assets could material effect financial statements conducted evaluation effectiveness internal control financial reporting december 31 2019 based internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 based evaluation management concluded internal control financial reporting effective december 31 2019 effectiveness internal control financial reporting december 31 2019 audited kpmg llp independent registered public accounting firm stated report included herein report independent registered public accounting firm stockholders board directors frank’s international nv opinion consolidated financial statements audited accompanying consolidated balance sheets frank’s international nv subsidiaries company december 31 2019 2018 related consolidated statements operations comprehensive loss stockholders’ equity cash flows years twoyear period ended december 31 2019 related notes financial statement schedule ii valuation qualifying accounts collectively consolidated financial statements opinion consolidated financial statements present fairly material respects financial position company december 31 2019 2018 results operations cash flows years twoyear period ended december 31 2019 conformity us generally accepted accounting principles also audited adjustments 2017 consolidated financial statements retrospectively apply change reportable segments composition related reclassifications within 2017 consolidated statement operations described note 1 opinion adjustments appropriate properly applied engaged audit review apply procedures 2017 consolidated financial statements company respect adjustments accordingly express opinion form assurance 2017 consolidated financial statements taken whole also audited accordance standards public company accounting oversight board united states pcaob company’s internal control financial reporting december 31 2019 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission report dated february 25 2020 expressed unqualified opinion effectiveness company’s internal control financial reporting change accounting principle discussed note 1 consolidated financial statements company changed method accounting leases january 1 2019 due adoption provisions accounting standards codification topic 842 leases amended basis opinion consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement consolidated financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures consolidated financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation consolidated financial statements believe audits provide reasonable basis opinion critical audit matter critical audit matter communicated matter arising current period audit consolidated financial statements communicated required communicated audit committee 1 relates accounts disclosures material consolidated financial statements 2 involved especially challenging subjective complex judgment communication critical audit matter alter way opinion consolidated financial statements taken whole communicating critical audit matter providing separate opinion critical audit matter accounts disclosures relates assessment carrying value goodwill associated cementing equipment reporting unit discussed notes 1 10 consolidated financial statements company goodwill balance 999 million december 31 2019 balance 812 million 81 associated cementing equipment reporting unit company performs goodwill impairment testing annual basis whenever events changes circumstances indicate carrying value goodwill might exceed fair value reporting unit fourth quarter 2019 company recorded goodwill impairment charge cementing equipment reporting unit 1111 million identified assessment carrying value goodwill associated cementing equipment reporting unit critical audit matter estimated fair value cementing equipment reporting unit derived assumptions used estimating future cash flows resulting application high degree subjective auditor judgment revenue growth rates discount rate terminal value assumptions used estimate fair value reporting unit determined key assumptions changes assumptions could significant effect company’s assessment impairment goodwill primary procedures performed address critical audit matter included following tested certain internal controls company’s goodwill impairment assessment process including controls related determination fair value cementing equipment reporting unit assumptions related revenue growth rates discount rate terminal value assumptions compared company’s historical forecasted revenue actual results assess company’s ability accurately forecast lastly involved valuation professional specialized skills knowledge assisted • evaluating company’s discount rate comparing discount rate range independently developed using publicly available market data comparable entities • evaluating company’s forecasted revenue growth rates terminal value cementing equipment reporting unit comparing growth assumptions forecasted growth rates company’s peer companies’ analyst reports • recalculating estimate cementing equipment reporting unit’s fair value using reporting unit’s estimated future cash flows discount rate terminal value kpmg llp served company’s auditor since 2018 houston texas february 25 2020 report independent registered public accounting firm stockholders board directors frank’s international nv opinion internal control financial reporting audited frank’s international nv subsidiaries’ company internal control financial reporting december 31 2019 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission opinion company maintained material respects effective internal control financial reporting december 31 2019 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission also audited accordance standards public company accounting oversight board united states pcaob consolidated balance sheets company december 31 2019 2018 related consolidated statements operations comprehensive loss stockholders’ equity cash flows years twoyear period ended december 31 2019 related notes financial statement schedule ii valuation qualifying accounts collectively consolidated financial statements report dated february 25 2020 expressed unqualified opinion consolidated financial statements basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audit also included performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate kpmg llp houston texas february 25 2020 report independent registered public accounting firm board supervisory directors stockholders frank’s international nv opinion financial statements audited consolidated statements operations comprehensive loss stockholders’ equity cash flows frank’s international nv subsidiaries “company” year ended december 31 2017 including related notes schedule valuation qualifying accounts year ended december 31 2017 appearing item 15a2 collectively referred “consolidated financial statements” effects adjustments retrospectively reflect change composition reportable segments described note 1 opinion consolidated financial statements year ended december 31 2017 effects adjustments retrospectively reflect change composition reportable segments described note 1 present fairly material respects results operations cash flows company year ended december 31 2017 conformity accounting principles generally accepted united states america 2017 financial statements effects adjustments discussed note 1 presented herein engaged audit review apply procedures adjustments retrospectively reflect change composition reportable segments described note 1 accordingly express opinion form assurance whether adjustments appropriate properly applied adjustments audited auditors basis opinion consolidated financial statements responsibility companys management responsibility express opinion company’s consolidated financial statements effects adjustments described based audit public accounting firm registered public company accounting oversight board united states pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit consolidated financial statements effects adjustments described accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement whether due error fraud audit included performing procedures assess risks material misstatement consolidated financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures consolidated financial statements audit also included evaluating accounting principles used significant estimates made management well evaluating overall presentation consolidated financial statements believe audit provides reasonable basis opinion pricewaterhousecoopers llp houston texas february 27 2018 served company’s auditor 2008 2018 accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements frank’s international nv notes consolidated financial statements note 1basis presentation significant accounting policies nature business frank’s international nv “finv” limited liability company organized laws netherlands global provider highly engineered tubular services tubular fabrication specialty well construction well intervention solutions oil gas industry finv provides services leading exploration production companies offshore onshore environments focus complex technically demanding wells basis presentation consolidated financial statements finv years ended december 31 2019 2018 2017 include activities frank’s international cv “ficv” blackhawk group holdings llc “blackhawk” wholly owned subsidiaries collectively “company” “we” “us” “our” intercompany accounts transactions eliminated purposes preparing consolidated financial statements accompanying consolidated financial statements related financial information prepared accordance generally accepted accounting principles united states america “gaap” opinion management consolidated financial statements reflect adjustments consisting solely normal accruals necessary fair presentation financial results periods presented consolidated financial statements prepared historical cost basis using united states dollar reporting currency functional currency primarily united states dollar reclassifications certain prioryear amounts reclassified conform current year’s presentation reclassifications impact net income loss working capital cash flows total equity previously reported first quarter 2019 company changed composition reportable segments please see note 20 segment information notes consolidated financial statements additional information part change reportable segments company also changed classification certain costs within consolidated statements operations reflect change presentation information used company’s chief operating decision maker “codm” historically december 31 2018 certain direct indirect costs related operations classified reported general administrative expenses “ga” certain costs associated tubular running services manufacturing operations classified cost revenue products “cor products” historical classification consistent information used codm assess performance company’s segments make resource allocation decisions part change reportable segments provide codm additional oversight costs directly support operations versus costs general administrative nature certain costs previously classified ga reclassified cost revenue services “cor services” addition certain manufacturing costs previously classified cor products reclassified cor services result change segment reporting frank’s international nv notes consolidated financial statements following summary reclassifications previously reported amounts thousands significant accounting policies accounting estimates preparation consolidated financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date consolidated financial statements reported amounts revenue expenses reporting period actual results could differ estimates accounts receivable establish allowance doubtful accounts based various factors including historical experience current aging status customer accounts financial condition customers business political environment customers operate provisions doubtful accounts recorded becomes probable customer accounts uncollectible cash equivalents restricted cash consider highly liquid financial instruments purchased original maturity three months less cash equivalents throughout year cash balances excess federally insured limits deposited various financial institutions experienced losses accounts believe exposed significant credit risk cash equivalents restricted cash consists cash deposits collateralize credit card program amounts reported consolidated balance sheets consolidated statements cash flows cash equivalents restricted cash december 31 2019 december 31 2018 follows thousands frank’s international nv notes consolidated financial statements cash surrender value life insurance policies cash surrender value life insurance policies held within rabbi trust purpose paying future executive deferred compensation benefit obligations income loss associated policies included income net consolidated statements operations income loss changes cash surrender value life insurance policies 27 million 12 million 24 million years ended december 31 2019 2018 2017 respectively comprehensive income accounting standards reporting comprehensive income require certain items including foreign currency translation adjustments presented components comprehensive income cumulative amounts recognized us standards reflected consolidated balance sheet accumulated comprehensive loss component stockholders’ equity contingencies certain conditions may exist date consolidated financial statements issued may result loss us resolved one future events occur fail occur management input legal counsel assesses contingent liabilities assessment inherently involves exercise judgment assessing loss contingencies related legal proceedings pending us unasserted claims may result proceedings management input legal counsel evaluates perceived merits legal proceedings unasserted claims well perceived merits amount relief sought expected sought therein assessment contingency indicates probable material loss incurred amount liability estimated liability would accrued consolidated financial statements assessment indicates potentially material loss contingency probable reasonably possible probable cannot estimated nature contingent liability together estimate range possible loss determinable material disclosed loss contingencies considered remote generally disclosed unless involve guarantees case guarantees would disclosed derivative financial instruments deem appropriate use foreign currency forward derivative contracts mitigate risk fluctuations foreign currency exchange rates use instruments mitigate exposure nonlocal currency working capital hold issue financial instruments trading speculative purposes account derivative activities provisions accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations income loss per share basic income loss per share excludes dilution computed dividing net income loss available common shareholders weighted average number common shares outstanding period diluted income loss per share reflects potential dilution could occur securities issue common stock exercised converted common stock frank’s international nv notes consolidated financial statements fair value financial instruments financial instruments consist primarily cash equivalents trade accounts receivable availableforsale securities derivative financial instruments obligations trade accounts payable due shortterm nature carrying values cash equivalents trade accounts receivable trade accounts payable approximate fair value refer note 10fair value measurements fair values availableforsale securities derivative financial instruments obligations foreign currency translations transactions results operations foreign subsidiaries functional currencies us dollar translated using average exchange rates period assets liabilities foreign subsidiaries translated using exchange rates effect balance sheet dates gains losses resulting translations included accumulated comprehensive loss within stockholders’ equity foreign subsidiaries designated us dollar functional currency gains losses resulting balance sheet remeasurement foreign operations included consolidated statements operations incurred gains losses resulting transactions denominated foreign currency also included consolidated statements operations incurred goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired option bypass qualitative assessment reporting unit period proceed directly performing quantitative goodwill impairment test qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount quantitative impairment test performed quantitative goodwill impairment test used identify existence impairment amount impairment loss test compares fair value reporting unit carrying amount including goodwill fair value reporting unit less carrying value impairment loss recorded based difference complete assessment goodwill impairment october 31 year october 31 2019 performed quantitative goodwill impairment test cementing equipment reporting unit fourth quarter 2019 market factors indicated downturn demand cementing equipment products services us land market slower uptake service offering international markets reduced management forecast reporting unit accordingly based refined outlook quantitative goodwill impairment test indicated fair value cementing equipment reporting unit less carrying value result fourth quarter 2019 recorded 1111 million impairment charge goodwill included goodwill impairment consolidated statements operations used income approach estimate fair value cementing equipment reporting unit also considered market approach validate results income approach estimates fair value discounting reporting unit’s estimated future cash flows using estimated discount rate expected return marketplace participant would required valuation date market approach includes use comparative multiples corroborate discounted cash flow results involves significant judgment selection appropriate peer group companies valuation multiples inputs used determination fair value generally level 3 inputs significant assumptions inherent income approach include estimated future net annual cash flows reporting unit discount rate selected assumptions used discounted cash flow projections using historical data supplemented current anticipated market conditions estimated growth rates estimates based upon assumptions believed reasonable however given inherent uncertainty determining assumptions underlying discounted cash flow analysis actual results may differ used valuation could result additional impairment charges future assuming assumptions inputs used discounted frank’s international nv notes consolidated financial statements cash flow analysis held constant 50 basis point increase discount rate assumption would increased goodwill impairment charge approximately 100 million goodwill impairment recorded years ended december 31 2018 2017 december 31 2019 goodwill allocated reportable segments follows cementing equipment approximately 812 million tubular running services approximately 187 million see note 10fair value measurements notes consolidated financial statements discussion fair value measures impairment longlived assets longlived assets include property plant equipment certain assets held used us reviewed events changes circumstances indicate carrying amount assets may recoverable based estimated future cash flows assessment indicates carrying values recoverable determined based undiscounted cash flows remaining useful lives impairment loss recognized based fair value asset inputs used determination fair value generally level 3 inputs please see note 18 severance charges credits net additional information income taxes operate many legal forms approximately 50 countries result subject many us foreign tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact upon amount income taxes provide given year provide income tax expense based liability method accounting income taxes based authoritative accounting guidance deferred tax assets liabilities recorded based upon temporary differences tax basis assets liabilities carrying values financial reporting purposes measured using tax rates laws expected effect differences projected reverse valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances made judgments estimates regarding future taxable income estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions deferred tax expense benefit result changes deferred tax assets liabilities associated valuation allowances period impact uncertain tax position taken expected taken income tax return recognized financial statements largest amount likely sustained upon examination relevant taxing authority intangible assets identifiable intangible assets amortized using straightline method estimated useful lives assets evaluate impairment intangible assets asset group basis whenever circumstances indicate carrying value may recoverable intangible assets deemed impaired written fair value using discounted cash flow model available comparable market values frank’s international nv notes consolidated financial statements following table provides information related intangible assets december 31 2019 2018 thousands intangible assets primarily associated cementing equipment segment amortization expense intangibles assets 108 million 108 million 114 million years ended december 31 2019 2018 2017 respectively year ended december 31 2019 impairment charges 33 million recorded associated certain customer relationships intellectual property intangible assets cementing equipment tubular running services segments included severance charges credits net consolidated statements operations intangible asset impairment recorded years ended december 31 2018 2017 december 31 2019 estimated amortization expense remaining intangible assets next five years follows thousands inventories stated lower cost primarily average cost net realizable value company’s inventories consist finished goods spare parts work process raw materials support ongoing manufacturing operations work progress spare parts finished goods include cost materials labor manufacturing overhead inventory placed service either capitalized included equipment expensed based upon capitalization policies determine reserves inventories based historical usage inventory onhand assumptions future demand market conditions estimates potential alternative uses limited please see note 18severance charges credits net additional information leases operating leases real estate vehicles certain equipment present time leases classified operating leases operating lease expense recognized straightline basis lease term accounting leases may require significant judgment includes determining incremental borrowing rates utilize net present value calculation lease payments lease agreements provide implicit rate assessing likelihood renewal termination options frank’s international nv notes consolidated financial statements separate lease nonlease components classes leased assets also leases initial term 12 months less recorded consolidated balance sheet property plant equipment property plant equipment stated cost less accumulated depreciation expenditures significant improvements betterments capitalized enhance extend useful life asset meet minimum capitalization threshold expenditures routine repairs maintenance improve extend life related assets expensed incurred properties equipment sold retired otherwise disposed related cost accumulated depreciation removed books resulting gain loss recognized consolidated statements operations depreciation fixed assets computed using straightline method estimated useful lives individual assets leasehold improvements amortized straightline basis shorter estimated useful lives lease term depreciation expense 820 million 1005 million 1107 million years ended december 31 2019 2018 2017 respectively revenue recognition revenue recognized control promised goods services transferred customers amount reflects consideration expect entitled exchange goods services payment terms services products generally range 30 days 120 days given shortterm nature service product offerings contracts significant financing component consideration receive generally fixed disclose value unsatisfied performance obligations contracts original expected duration one year less contracts customers shortterm nature fall within exemption significant unsatisfied performance obligations service revenue recognized time services performed rendered rates services typically priced per day per manhour similar basis generally perform services either direct service purchase orders master service agreements supplemented individual callout provisions customers contracted arrangements accrual recorded unbilled revenue earned yet invoiced revenue product sales generally recognized point time product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions contain postdelivery obligations tubulars segment cementing equipment segment customers requested store pipe connectors cementing products purchased us facilities recognize revenue “bill hold” sales following criteria met 1 substantive reason arrangement 2 product identified customer’s asset 3 product ready delivery customer 4 cannot use product direct another customer shortterm investments shortterm investments consisted commercial paper classified heldtomaturity fund primarily invests shortterm debt securities investments original maturities greater three months less twelve months frank’s international nv notes consolidated financial statements stockbased compensation 2013 longterm incentive plan provides granting stock options stock appreciation rights “sars” restricted stock restricted stock units “rsus” performance restricted stock units “prsus” dividend equivalent rights types equity cash incentive awards employees nonemployee directors service providers stockbased compensation expense measured grant date sharebased awards based value stockbased compensation expense recognized straightline basis vesting period included cost revenue ga expenses consolidated statements operations stockbased compensation currently consists rsus prsus grant date fair value rsus entitled receive dividends vested measured reducing share price date present value dividends expected paid requisite vesting period discounted appropriate riskfree interest rate grant date fair value compensation expense prsu grants estimated based monte carlo simulation using company’s closing stock price day grant date recent accounting pronouncements changes gaap established financial accounting standards board “fasb” form accounting standards updates “asus” fasb’s accounting standards codification consider applicability impact accounting pronouncements asus listed assessed either determined applicable expected immaterial impact consolidated financial position results operations cash flows june 2018 fasb issued new guidance intended simplify aspects sharebased compensation issued nonemployees making guidance consistent accounting employee sharebased compensation adopted guidance january 1 2019 adoption material impact consolidated financial statements june 2016 fasb issued new accounting guidance credit losses financial instruments guidance includes replacement “incurred loss” approach recognizing credit losses financial assets including trade receivables methodology reflects expected credit losses considers historical current information well reasonable supportable forecasts public entities guidance effective financial statements issued fiscal years beginning december 15 2019 including interim periods within fiscal years adopted guidance january 1 2020 adoption material impact consolidated financial statements february 2016 fasb issued new accounting guidance leases main objective accounting guidance increase transparency comparability among organizations recognizing lease assets lease liabilities balance sheet disclosing key information leasing arrangements main difference previous gaap new guidance recognition lease assets lease liabilities lessees leases classified operating leases new guidance requires lessees recognize assets liabilities arising leases balance sheet defines lease contract conveys right control use identified property plant equipment period time exchange consideration control use identified asset means customer 1 right obtain substantially economic benefit use asset 2 right direct use asset accounting guidance requires disclosures lessees lessors meet objective enabling users financial statements assess amount timing uncertainty cash flows arising leases adopted new lease standard effective january 1 2019 using modified retrospective approach modified retrospective approach provides method recording existing leases adoption including restating comparative periods financial statements comparative period continues reported accounting standards effect period adoption new standard resulted recording lease assets 349 million lease liabilities 344 million adjustment retained earnings 07 million january 1 2019 standard impact net income loss cash flows frank’s international nv notes consolidated financial statements elected package practical expedients permitted transition guidance within new standard allowed us carry forward historical lease classification addition elected separate lease nonlease components classes leased assets also leases initial term 12 months less recorded balance sheet note 2leases operating leases real estate vehicles certain equipment leases remaining lease terms less 1 year 14 years include options extend leases 10 years include options terminate leases within 1 year shortterm lease expense 36 million year ended december 31 2019 includes variable lease costs immaterial frank’s international nv notes consolidated financial statements total operating lease expense years ended december 31 2018 2017 168 million 187 million respectively future minimum lease commitments noncancelable operating leases initial remaining terms one year december 31 2018 follows thousands note 3acquisitions divestitures related party acquisition november 2 2018 frank’s international llc entered purchase agreement mosing ventures llc mosing land cattle company llc mosing queens row properties llc 4m investments companies related us common ownership “mosing companies” purchase agreement acquired real property previously leased mosing companies two additional properties located adjacent properties total purchase price 370 million including legal fees closing adjustments normal operating activity purchase closed december 18 2018 please see note 12related party transactions notes consolidated financial statements divestitures first quarter 2018 sold building classified held sale 08 million recorded immaterial loss third quarter 2018 sold building classified held sale net book value 03 million 26 million fourth quarter 2018 sold building classified held sale net book value 42 million recorded immaterial gain second quarter 2019 sold building classified held sale 02 million recorded immaterial loss fourth quarter 2019 sold building classified held sale 03 million recorded immaterial loss frank’s international nv notes consolidated financial statements note 4accounts receivable net accounts receivable december 31 2019 2018 follows thousands 1 amounts represent expenditures behalf nonconsolidated affiliates note 5inventories net inventories december 31 2019 2018 follows thousands note 6property plant equipment following summary property plant equipment december 31 2019 2018 thousands frank’s international nv notes consolidated financial statements second quarter 2018 assets net book value 45 million met criteria classified held sale reclassified property plant equipment assets held sale consolidated balance sheet third quarter 2018 building net book value 50 million met criteria classified held sale reclassified property plant equipment assets held sale consolidated balance sheet first quarter 2019 buildings net book value 11 million met criteria classified held sale reclassified property plant equipment assets held sale consolidated balance sheet third quarter 2019 additional building met criteria classified held sale 40 million impairment loss recorded included severance charges credits net consolidated statements operations buildings remaining net book value 53 million reclassified property plant equipment assets held sale consolidated balance sheets fourth quarter 2019 equipment tubular running services segment met criteria classified held sale 03 million impairment loss recorded included severance charges credits net consolidated statements operations equipment’s remaining net book value 02 million reclassified property plant equipment assets held sale consolidated balance sheets year ended december 31 2019 recorded fixed asset impairment charges 329 million primarily associated construction progress tubular running services segment included severance charges credits net consolidated statements operations impairments recognized year ended december 31 2018 year ended december 31 2017 recognized 65 million charge fixed asset retirements included severance charges credits net consolidated statements operations please see note 18severance charges credits net notes consolidated financial statements additional details following table presents depreciation amortization associated line years ended december 31 2019 2018 2017 thousands note 7other assets december 31 2019 2018 consisted following thousands 1 see note 10fair value measurements additional information frank’s international nv notes consolidated financial statements note 8 accounts payable accrued liabilities accounts payable accrued liabilities december 31 2019 2018 consisted following thousands 1 represents amounts owed nonconsolidated affiliates note 9debt credit facility asset based revolving credit facility november 5 2018 ficv frank’s international llc blackhawk borrowers finv certain finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc guarantors entered 5year senior secured revolving credit facility “abl credit facility” jpmorgan chase bank na administrative agent “abl agent” financial institutions lenders total commitments 1000 million including 150 million available letters credit subject terms abl credit facility ability increase commitments 2000 million maximum amount company may borrow abl credit facility subject borrowing base based percentage certain eligible accounts receivable eligible inventory subject customary reserves adjustments obligations abl credit facility fully unconditionally guaranteed jointly severally finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc subject customary exceptions exclusions addition obligations abl credit facility secured first priority liens substantially assets property borrowers guarantors including pledges equity interests certain finv’s subsidiaries subject certain exceptions borrowings abl credit facility bear interest finv’s option either alternate base rate “abr” defined therein calculated greatest rate interest publicly quoted wall street journal “prime rate” subject increase decrease prime rate effective date change occurs ii federal funds effective rate subject 000 interest rate floor plus 050 iii onemonth adjusted libo rate defined therein plus 100 b adjusted libo rate defined therein plus case applicable margin applicable interest rate margin ranges 100 150 per annum abr loans 200 250 per annum eurodollar loans case based finv’s leverage ratio unused portion abl credit facility subject commitment fee varies 0250 0375 per annum according average daily unused commitments abl credit facility interest frank’s international nv notes consolidated financial statements eurodollar loans payable end selected interest period less frequently quarterly interest abr loans payable monthly arrears abl credit facility contains various covenants restrictive provisions limit subject certain customary exceptions thresholds finv’s ability among things 1 enter asset sales 2 incur additional indebtedness 3 make investments acquisitions loans create incur liens 4 pay certain dividends make distributions 5 engage transactions affiliates abl credit facility also requires finv maintain minimum fixed charge coverage ratio 10 based ratio consolidated ebitda defined therein minus unfinanced capital expenditures b fixed charges defined therein either event default occurs abl facility ii availability abl credit facility falls least two consecutive calendar days greater 125 million b 15 lesser borrowing base aggregate commitments “fccr trigger event” accounts receivable received finv’s us subsidiaries parties abl credit facility deposited deposit accounts subject deposit control agreements favor abl agent fccr trigger event deposit accounts would subject “springing” cash dominion fccr trigger event company subject compliance fixed charge coverage ratio “springing” cash dominion default exists abl credit facility availability facility preceding thirty consecutive days equal least greater x 125 million 15 lesser borrowing base aggregate commitments finv fails perform obligations agreement results event default commitments abl credit facility could terminated outstanding borrowings abl credit facility may declared immediately due payable abl credit facility also contains cross default provisions apply finv’s indebtedness december 31 2019 finv borrowings outstanding abl credit facility letters credit outstanding 93 million availability 447 million insurance notes payable 2018 entered note finance annual insurance premiums totaling 68 million note bore interest annual rate 39 final maturity date october 2019 december 31 2018 total outstanding balance 56 million current policy year company elected pay annual insurance premiums existing cash available note 10fair value measurements follow fair value measurement authoritative accounting guidance measuring fair values assets liabilities financial statements fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date utilize market data assumptions market participants independent knowledgeable willing able transact would use pricing asset liability including assumptions risk risks inherent inputs valuation technique able classify fair value balances based observability inputs authoritative guidance fair value measurements establishes three levels fair value hierarchy defined follows • level 1 unadjusted quoted prices identical assets liabilities active markets • level 2 quoted prices markets considered active financial instruments significant inputs observable either directly indirectly substantially full term asset liability • level 3 significant unobservable inputs use little market data exists requiring significant degree judgment hierarchy gives highest priority level 1 measurements lowest priority level 3 measurements depending particular asset liability input availability vary depending factors product type longevity product market particular transaction conditions cases certain inputs used measure fair frank’s international nv notes consolidated financial statements value may categorized different levels fair value hierarchy disclosure purposes accounting guidance lowest level contains significant inputs used valuation chosen financial assets liabilities summary financial assets liabilities measured fair value recurring basis december 31 2019 2018 follows thousands derivative financial instruments consist shortduration foreign currency forward contracts fair value derivative financial instruments based quoted market values including foreign exchange forward rates interest rates fair value computed discounting projected future cash flow amounts present value december 31 2019 2018 derivative financial instruments included financial statement line item accounts payable accrued liabilities consolidated balance sheets investments associated deferred compensation plan consist primarily cash surrender value life insurance policies included assets consolidated balance sheets liability associated deferred compensation plan included liabilities consolidated balance sheets investments change result contributions payments fluctuations market assets liabilities measured using significant observable inputs reported fair value based thirdparty broker statements derived fair value funds’ underlying investments also marketable securities publicly traded equity securities indirect result strategic investments reported fair value based price stock included assets consolidated balance sheets frank’s international nv notes consolidated financial statements assets liabilities measured fair value nonrecurring basis apply provisions fair value measurement standard nonrecurring nonfinancial measurements including business combinations assets identified held sale well impairment related goodwill longlived assets business combinations purchase price allocated assets acquired liabilities assumed based discounted cash flow model intangibles well market assumptions valuation equipment fixed assets perform goodwill impairment assessment reporting unit comparing estimated fair value reporting unit reporting unit’s carrying value including goodwill estimate fair value reporting unit using discounted cash flow analysis based management’s shortterm longterm forecast operating performance analysis includes significant assumptions regarding discount rates revenue growth rates expected profitability margins forecasted capital expenditures timing expected future cash flows based market conditions estimated fair value reporting unit exceeds carrying amount goodwill reporting unit considered impaired carrying amount reporting unit exceeds estimated fair value impairment loss measured recorded conducting impairment test longlived assets goodwill first compare estimated future undiscounted cash flows associated asset’s carrying amount undiscounted cash flows less asset’s carrying amount determine asset’s fair value using discounted cash flow analysis analyses based estimates management’s shortterm longterm forecast operating performance including revenue growth rates expected profitability margins estimates remaining useful life service potential asset discount rate based weighted average cost capital assets meet criteria classified held sale market approach used determine fair value based thirdparty appraisal reports impairment assessments discussed incorporate inherent uncertainties including projected commodity pricing supply demand services future market conditions difficult predict volatile economic environments could result impairment charges future periods actual results materially differ estimated assumptions utilized forecasts crude oil prices decline significantly remain low levels sustained period time could required record impairment carrying value longlived assets future could material adverse impact operating results given unobservable nature inputs discounted cash flow models deemed use level 3 inputs fair value considerations carrying values consolidated balance sheets cash equivalents shortterm investments trade accounts receivable current assets accounts payable accrued liabilities lines credit approximate fair values due short maturities note 11 derivatives enter shortduration foreign currency forward derivative contracts reduce risk foreign currency fluctuations use instruments mitigate exposure nonlocal currency operating working capital record contracts fair value consolidated balance sheets although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations frank’s international nv notes consolidated financial statements december 31 2019 2018 following foreign currency derivative contracts outstanding us dollars thousands following table summarizes location fair value amounts derivative contracts consolidated balance sheets december 31 2019 2018 thousands following table summarize location amounts unrealized realized gains losses derivative contracts consolidated statements operations december 31 2019 2018 2017 thousands derivative transactions governed international swaps derivatives association master agreements include stipulations regarding right offset event counterparty default performance obligations default occur parties right net amounts payable receivable single net settlement parties accounting policy offset derivative assets liabilities executed counterparty master netting arrangement exists frank’s international nv notes consolidated financial statements following table presents gross net fair values derivatives december 31 2019 2018 thousands note 12related party transactions engaged certain transactions companies related us common ownership entered various operating leases lease facilities affiliated companies rent expense associated related party leases 27 million 65 million 69 million years ended december 31 2019 2018 2017 respectively december 31 2019 63 million operating lease rightofuse assets 71 million lease liabilities associated related party leases november 2 2018 frank’s international llc entered purchase agreement mosing ventures llc mosing land cattle company llc mosing queens row properties llc 4m investments companies related us common ownership “mosing companies” purchase agreement acquired real property previously leased mosing companies two additional properties located adjacent properties total purchase price 370 million including legal fees closing adjustments normal operating activity purchase closed december 18 2018 properties conveyed asis except 10 years following closing date parties continue certain rights obligations terms agreements purchased properties acquired mosing companies time ipo made improvements purchased properties lease period purchase price calculated excluding value improvements purchase close longer lease acquired properties mosing companies tax receivable agreement mosing holdings permitted transferees converted preferred stock shares common stock oneforone basis august 26 2016 subject customary conversion rate adjustments stock splits stock dividends reclassifications similar transactions delivery interests ficv us “conversion” result election section 754 internal revenue code made ficv conversion resulted adjustment tax basis tangible intangible assets ficv respect portion ficv transferred finv mosing holdings permitted transferees adjustments allocated finv adjustments tax basis tangible intangible assets ficv described would available absent conversion basis adjustments may reduce amount tax finv would otherwise required pay future basis adjustments may also decrease gains increase losses future dispositions certain capital assets extent tax basis allocated capital assets tra entered ficv mosing holdings connection ipo generally provides payment finv 85 amount net cash savings us federal state local income tax franchise tax deemed realize certain circumstances periods ipo result tax basis increases resulting conversion ii imputed interest deemed paid us result additional tax basis arising payments tra retain benefit remaining 15 cash savings payments make tra increased interest accrued due date without extensions corresponding tax return date payment specified tra payments tra conditioned upon holder rights tra continued ownership interest finv estimation amount timing payments tra nature imprecise purposes tra cash savings tax generally calculated comparing actual tax liability amount would frank’s international nv notes consolidated financial statements required pay able utilize tax benefits subject tra amounts payable well timing payments tra dependent upon significant future events assumptions including amount timing taxable income generate future december 31 2019 finv cumulative loss prior 36 month period based history losses well uncertainty regarding timing amount future taxable income longer able conclude future cash savings lead additional payouts tra additional tra liability may recognized future based changes expectations regarding timing likelihood future cash savings payment obligations tra obligations ficv term tra commenced upon completion ipo continue tax benefits subject tra utilized expired unless finv elects exercise right terminate tra terminated due circumstances including breach material obligation thereunder certain mergers changes control make termination payment specified tra finv elects terminate tra early may sole discretion terminates result breach would required make substantial immediate lumpsum payment equal present value hypothetical future payments could required paid tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize benefits determined applying discount rate equal longterm treasury rate effect applicable date plus 300 basis points early termination payment may made significantly advance actual realization future benefits addition payments due tra similarly accelerated following certain mergers changes control situations finv’s obligations tra could substantial negative impact liquidity could effect delaying deferring preventing certain mergers asset sales forms business combinations changes control example tra terminated december 31 2019 estimated termination payment would approximately 500 million calculated using discount rate 525 foregoing number merely estimate actual payment could differ materially finv holding company operations ability make payments tra dependent ability finv’s operating subsidiaries make distributions amount sufficient cover finv’s obligations agreement ability certain finv’s operating subsidiaries make distributions subject among things applicable provisions dutch law may limit amount funds available distribution restrictions debt instruments extent finv unable make payments tra reason except case acceleration payments thereunder occurring connection early termination tra certain mergers change control payments deferred accrue interest paid finv prohibited paying dividends common stock note 13loss per common share basic loss per common share determined dividing net loss weighted average number common shares outstanding period diluted loss per share determined dividing loss attributable common stockholders weighted average number common shares outstanding assuming potentially dilutive shares issued apply treasury stock method determine dilutive weighted average common shares represented unvested restricted stock units espp shares following table summarizes basic diluted loss per share calculations thousands except per share amounts frank’s international nv notes consolidated financial statements 1 approximate number shares unvested restricted stock units stock issued pursuant espp excluded computation diluted loss per share effect would antidilutive results operations net loss position note 14stockbased compensation 2013 longterm incentive plan 2013 longterm incentive plan “ltip” stock options sars restricted stock restricted stock units dividend equivalent rights types equity cash incentive awards may granted employees nonemployee directors service providers ltip expires 10 years unless prior date maximum number shares available issuance plan issued board directors terminates plan 20000000 shares common stock reserved issuance ltip december 31 2019 11410061 shares remained available issuance restricted stock units upon completion ipo pursuant ltip began granting restricted stock units substantially rsus granted ltip vest ratably period one three years treasury stock consists shares withheld employees settle personal tax obligations arose result restricted stock units vested certain restricted stock unit awards provide accelerated vesting qualifying terminations employment service employees granted rsus entitled dividends declared underlying shares restricted stock unit unvested grant date fair value award measured reducing grant date price common stock present value dividends expected paid underlying shares requisite service period discounted appropriate riskfree interest rate weighted average grant date fair value rsus granted years ended december 31 2019 2018 2017 114 million 95 million 121 million respectively compensation expense recognized ratably vesting period forfeitures recorded occur stockbased compensation expense relating rsus years ended december 31 2019 2018 2017 87 million 89 million 128 million respectively total fair value rsus vested years ended december 31 2019 2018 2017 71 million 67 million 99 million respectively unamortized stock compensation expense december 31 2019 relating rsus totaled approximately 88 million expensed weighted average period 175 years nonvested rsus outstanding december 31 2019 changes year follows performance restricted stock units purpose prsus closely align incentive compensation executive leadership team duration performance cycle returns finv’s shareholders thereby motivate executive leadership team create sustained value finv shareholders design prsu grants effectuates purpose placing frank’s international nv notes consolidated financial statements material amount incentive compensation executive risk offering extraordinary reward attainment extraordinary results design features prsu grant furtherance purpose include following 1 vesting prsus based total shareholder return “tsr” based comparison returns peer group beginning prsus granted 2018 spdr sp oil gas equipment services etf 2 tsr computed entire performance period using 30day averaging period first 30 calendar days last 30 calendar days performance period mitigate effect stock price volatility beginning prsus granted 2018 tsr performance calculated separately respect three separate oneyear achievement periods included threeyear performance period resulting weighted average payout end threeyear performance period tsr calculation assume reinvestment dividends 3 ultimate number shares issued pursuant prsu awards vary proportion actual tsr achieved percentile compared peer group performance period follows shares issued company’s performance falls 25th percentile ii 50 target level company achieves rank 25th percentile threshold level iii 100 target level company achieves rank 50th percentile target level iv 150 target level company achieves rank 75th percentile maximum level 2017 grants 200 target level company achieves rank 90th percentile maximum level 2018 2019 grants 4 unless qualifying termination defined prsu award agreement prsus executive forfeited upon executive’s termination employment performance period though value prsu grant may change participant compensation expense recorded company determined date grant expected volatility based historical equity volatility stock based 50 historical 50 implied volatility weighting commensurate expected term prsu expected volatility considers factors historical volatility share price peer group companies implied volatility share price length time shares publicly traded split dividendadjusted closing stock prices 2019 granted prsus fair value 37 million 446858 units “target level” performance period grants three year period january 1 2019 december 31 2021 “performance period” separate oneyear achievement periods january 1 2019 december 31 2019 january 1 2020 december 31 2020 january 1 2021 december 31 2021 resulting weighted average payout end performance period weighted average assumptions prsus granted 2019 follows 2018 granted prsus fair value 20 million 275550 units “target level” performance period grants three year period january 1 2018 december 31 2020 “performance period” separate oneyear achievement periods january 1 2018 december 31 2018 january 1 2019 december 31 2019 january 1 2020 december 31 2020 resulting weighted average payout end performance period weighted average assumptions prsus granted 2018 follows frank’s international nv notes consolidated financial statements 2017 granted prsus fair value 26 million 293083 units “target level” performance period grants threeyear period january 1 2017 december 31 2019 “performance period” weighted average assumptions prsus granted 2017 follows event death disability restrictions related forfeiture defined performance awards agreement lapse respect 100 prsus target level effective date event involuntary termination except cause company may enter special vesting agreement executive restrictions forfeiture lapse upon termination event termination reason prior end performance period prsus forfeited stockbased compensation expense related prsus years ended december 31 2019 2018 2017 20 million 12 million 06 million respectively total fair value prsus vested year ended december 31 2017 02 million prsu vestings years ended december 31 2019 2018 unamortized stock compensation expense december 31 2019 relating prsus totaled approximately 30 million expensed weighted average period 182 years nonvested prsus outstanding december 31 2019 changes year follows employee stock purchase plan frank’s international nv espp eligible employees right purchase shares common stock lesser 85 last reported sale price common stock last trading date immediately preceding first day option period ii 85 last reported sale price common stock last trading date immediately preceding last day option period espp intended qualify employee stock purchase plan section 423 internal revenue code reserved 30 million shares common stock issuance espp 21 million shares available issuance december 31 2019 shares issued employees espp totaled 389284 2019 232592 shares 2018 years ended december 31 2019 2018 2017 recognized 06 million 05 million 04 million compensation expense related stock purchased espp respectively january 2019 issued 153451 shares common stock employees plan satisfy employee purchase period july 1 2018 december 31 2018 increased common stock outstanding july 2019 issued 235833 shares common stock employees plan satisfy employee purchase period january 1 2019 june 30 2019 increased common stock outstanding frank’s international nv notes consolidated financial statements note 15employee benefit plans us benefit plans 401k savings investment plan frank’s international llc administers 401k savings investment plan “plan” part employee benefits package employees required complete one month service becoming eligible participate plan terms plan match 100 first 3 eligible compensation employee contributes plan annual allowable irs limit additionally company provides 50 match employee contributions 4 6 eligible compensation matching contributions plan totaled 50 million 45 million 37 million years ended december 31 2019 2018 2017 respectively executive deferred compensation plan december 2004 certain affiliates adopted frank’s executive deferred compensation plan “edc plan” purpose edc plan provide participants opportunity defer receipt portion salary bonus specified cash compensation participant contributions immediately vested contributions vest five years service participant benefits edc plan shall paid directly general funds applicable participating subsidiary grantor trust commonly referred rabbi trust created purpose informally funding edc plan rabbi trust special separate fund shall established segregation assets shall made assure payment assets edc plan’s trust invested corporate owned splitdollar life insurance policy amalgamation mutual funds see note 7other assets recorded compensation expense related vesting company’s contribution 10 million year ended december 31 2018 compensation expense related vesting company’s contribution recorded years ended december 31 2019 2017 total liability recorded december 31 2019 2018 related edc plan 233 million 237 million respectively included noncurrent liabilities consolidated balance sheets note 16income taxes loss income tax expense benefit comprised following periods indicated thousands frank’s international nv notes consolidated financial statements income taxes provided based upon tax laws rates countries operations conducted income earned components income tax expense benefit consist following periods indicated thousands year ending december 31 2017 company reported provisional basis tax impacts resulting enactment tax act december 22 2017 2018 company completed analysis impacts tax act measurement period without adjustment company completed accounting impacts tax act although adjustments may necessary future periods due technical corrections andor regulatory guidance may issued internal revenue service foreign taxes incurred following regions periods indicated thousands frank’s international nv notes consolidated financial statements reconciliation differences income tax provision computed 21 us statutory rate effect december 31 2019 reported provision income taxes periods indicated follows thousands reconciliation using netherlands statutory rate provided significant operations netherlands deferred tax assets liabilities recorded anticipated future tax effects temporary differences financial statement basis tax basis assets liabilities measured using tax rates laws expected effect differences projected reverse valuation allowance recorded likely benefit deferred tax asset realized frank’s international nv notes consolidated financial statements significant components deferred tax assets liabilities follows thousands december 31 2019 income tax net operating loss “nol” carryforwards related us foreign operations approximately 4436 million addition research development tax credit carryforwards approximately 10 million ultimate utilization nols research development credits depend ability generate sufficient taxable income appropriate tax jurisdiction tax attributes expire follows thousands valuation allowance nols increased 850 million 1300 million 2019 result accumulated tax losses us various foreign tax jurisdictions evaluated available evidence determined likely losses realized intention cash earnings subsidiaries december 31 2019 permanently reinvested used meet operating cash flow needs existing plans demonstrate need repatriate foreign cash fund parent company activity however determine parent company funding required estimate cash needs may met without adverse tax consequences frank’s international nv notes consolidated financial statements december 31 2019 2018 total gross uncertain tax positions 03 million substantially uncertain tax positions recognized future would impact effective tax rate elected classify interest penalties incurred income taxes income tax expense file income tax returns us various international tax jurisdictions december 31 2019 us tax returns remain open examination tax years 2017 2018 major foreign taxing jurisdictions subject tax open examination tax years 2010 2018 note 17commitments contingencies commitments committed various operating lease agreements primarily related real estate vehicles certain equipment expire various dates throughout next several years please see note 2leases notes consolidated financial statements additional information also purchase commitments related inventory amount 341 million december 31 2019 enter purchase commitments needed contingencies subject lawsuits claims arising ordinary course business time liability accrued loss probable reasonably estimated material accruals loss contingencies individually aggregate december 31 2019 december 31 2018 believe probability remote ultimate outcome matters would material adverse effect financial position results operations cash flows conducting internal investigation operations certain foreign subsidiaries west africa including possible violations us foreign corrupt practices act “fcpa” policies applicable laws june 2016 voluntarily disclosed existence extensive internal review sec us department justice “doj” governmental entities intent continue fully cooperate agencies applicable authorities connection investigation may conducted connection matter review indicated material impact previously filed financial statements continued collect information cooperate authorities time unable predict ultimate resolution matters agencies disclosed investigation possible violations fcpa remains ongoing continue cooperate sec doj relevant governmental entities connection therewith time unable predict ultimate resolution matters agencies including financial impact us board management committed continuously enhancing internal controls support improved compliance transparency throughout global operations note 18severance charges credits net recognize severance charges costs associated workforce reductions facility closures exiting reducing footprint certain countries inventory impairment retirement excess machinery equipment based economic utility result downturn industry impact business outlook continue take actions adjust operations cost structure reflect current expected activity levels depending future market conditions actions may necessary adjust operations may result additional charges frank’s international nv notes consolidated financial statements severance charges credits net summarized thousands severance costs incurred costs due continued effort adjust cost base including reducing workforce meet depressed demand industry december 31 2019 outstanding liability associated current program approximately 58 million included severance payments employeerelated separation costs reconciliation employee separation liability balance thousands fixed asset impairments retirements year ended december 31 2017 identified certain equipment based specifications current market conditions longer economic utility therefore reached end useful life well abandoned capital projects accordingly management decided retire equipment resulted charges 65 million year ended december 31 2019 undertook comprehensive business review conjunction sharp decline us land activity review identified certain fixed assets primarily construction progress commercially viable given current market conditions resulted impairment charge 329 million inventory impairments year ended december 31 2017 determined cost connector inventory exceeded net realizable value resulted charge 512 million year ended december 31 2019 certain inventories tubular running services cementing equipment tubulars segments determined costs exceeded net realizable values resulting charge 45 million intangible asset impairments year ended december 31 2019 identified certain intangible assets longer commercial viability company resulting impairment charge 33 million please see note 1basis presentation significant accounting policies notes consolidated financial statements additional details accounts receivable writeoff recovery experienced payment delays certain customers nigeria angola venezuela fourth quarter 2017 management decided significantly reduce footprint nigeria angola temporarily cease operations venezuela believe diminish ability collect amounts owed result wrote trade accounts receivable 150 million year ended december 31 2017 2018 recovered 49 million previously written receivables customer angola frank’s international nv notes consolidated financial statements note 19supplemental cash flow information supplemental cash flows noncash transactions follows periods indicated thousands note 20segment information reporting segments operating segments defined components enterprise separate financial information available regularly evaluated company’s codm deciding allocate resources assess performance 2018 changes company’s organizational structure internally announced changes allow segment operate “independent” business order drive accountability streamline decisionmaking leveraging advantages global infrastructure first quarter 2019 company’s codm changed information regularly reviews allocate resources assess performance accordingly realigned reporting segments three reportable segments tubular running services “trs” segment tubulars segment cementing equipment “ce” segment trs segment represents prior international services us services segments well costs associated manufacturing trs equipment corporate costs previously included international services us services segments included separate corporate component tubulars segment represents prior tubular sales segment drilling tools business previously included within international services us services segments less costs associated trs equipment manufacturing ce segment comprised prior blackhawk segment addition regional support costs previously included international services us services segments allocated amongst three current segments generally based revenue headcount revised segment reporting reflect current management approach recast prior periods conform current segment presentation trs segment provides tubular running services globally internationally trs segment operates majority offshore oil gas markets also several onshore regions operations approximately 50 countries six continents us trs segment provides services active onshore oil gas drilling regions including permian basin eagle ford shale haynesville shale marcellus shale utica shale us gulf mexico customers primarily large exploration production companies including international oil gas companies national oil gas companies major independents oilfield service companies tubulars segment designs manufactures distributes connectors casing attachments large outside diameter “od” heavy wall pipe additionally tubulars segment sells large od pipe originally manufactured various pipe mills plain end fully fabricated proprietary welded threaddirect connector solutions provides specialized fabrication welding services support offshore deepwater projects including drilling production risers flowlines pipeline end terminations well longlength tubular assemblies 400 feet length tubulars segment also specializes development manufacture supply proprietary drilling tool solutions focus improving drilling productivity eliminating mitigating traditional drilling operational risks frank’s international nv notes consolidated financial statements ce segment provides specialty equipment enhance safety efficiency rig operations provides specialized equipment services products utilized construction completion abandonment wellbore onshore offshore environments product portfolio includes casing accessories serve improve installation casing centralization wellbore zonal isolation well enhance cementing operations advance wiper plug float equipment technology abandonment solutions primarily used isolate portions wellbore setting barriers downhole allow rig evacuation case inclement weather maintenance work rig equipment squeeze cementing pressure testing within wellbore hydraulic fracturing temporary permanent abandonments offerings improve operational efficiencies limit nonproductive time unscheduled events encountered wellsite revenue disaggregate revenue contracts customers geography segments believe best depicts nature amount timing uncertainty revenue cash flows affected economic factors intersegment revenue immaterial following tables presents revenue disaggregated geography based location services provided products sold thousands frank’s international nv notes consolidated financial statements revenue geographic area follows thousands netherlands based company derive revenue services product sales clients primarily oil gas industry single customer accounted 10 revenue years ended december 31 2019 2018 year ended december 31 2017 one customer accounted 10 revenue three segments generated revenue customer revenue generated netherlands immaterial years ended december 31 2019 2018 2017 united states individual country represented 10 revenue years ended december 31 2019 2018 2017 adjusted ebitda define adjusted ebitda net income loss interest income net depreciation amortization income tax benefit expense asset impairments gain loss disposal assets foreign currency gain loss equitybased compensation unrealized realized gain loss effects tra noncash adjustments charges credits review adjusted ebitda consolidated basis segment basis use adjusted ebitda assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization income tax foreign currency exchange rates charges credits adjusted ebitda limitations analytical tool considered alternative net income loss operating income loss cash flow operating activities measure financial performance presented accordance gaap codm uses adjusted ebitda primary measure segment reporting performance frank’s international nv notes consolidated financial statements following table presents reconciliation segment adjusted ebitda net loss thousands 1 includes certain expenses attributable particular segment costs related support functions corporate executives 2 please see note 12related party transactions discussion 3 comprised equitybased compensation expense 2019 11280 2018 10621 2017 13862 mergers acquisition expense 2019 none 2018 58 2017 459 unrealized realized gains losses 2019 228 2018 1682 2017 2791 investigationrelated matters 2019 3838 2018 5454 2017 6143 adjustments 2019 957 2018 none 2017 487 frank’s international nv notes consolidated financial statements following table sets forth certain financial information respect reportable segments thousands nongaap financial measure disclosed codm review total assets segment part review segment results following table presents property plant equipment “ppe” segment frank’s international nv notes consolidated financial statements based unique nature operating structure revenue generating assets interchangeable two categories offshore ii onshore addition us land onshore assets cannot deployed offshore markets based upon certification equipment application certain international land markets longlived assets netherlands insignificant years presented note 21quarterly financial data unaudited summarized quarterly financial data years ended december 31 2019 2018 set forth thousands except per share data 1 gross profit defined total revenue less cost revenue less depreciation amortization attributed cost revenue 2 fourth quarter 2019 includes goodwill impairment charge 1111 million fixed asset impairment charges 288 million inventory impairments 42 million intangible asset impairments 33 million please see note 1basis presentation significant accounting policies note 18severance charges credits net additional details 3 sum individual quarterly income losses per share amounts may agree yeartodate net income loss per common share quarterly computation based weighted average number common shares outstanding period item 9item 8 financial statements supplementary data management’s report internal control financial reporting management company including chief executive officer chief financial officer responsible establishing maintaining adequate internal control financial reporting defined rules 13a15f 15d15f securities exchange act 1934 amended internal control financial reporting process designed supervision chief executive officer chief financial officer provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles internal control financial reporting includes policies procedures pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets ii provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures made accordance authorizations management directors iii provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition assets could material effect financial statements conducted evaluation effectiveness internal control financial reporting december 31 2020 based internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 based evaluation management concluded internal control financial reporting effective december 31 2020 effectiveness internal control financial reporting december 31 2020 audited kpmg llp independent registered public accounting firm stated report included herein report independent registered public accounting firm stockholders board directors frank’s international nv opinion consolidated financial statements audited accompanying consolidated balance sheets frank’s international nv subsidiaries company december 31 2020 2019 related consolidated statements operations comprehensive loss stockholders’ equity cash flows years threeyear period ended december 31 2020 related notes financial statement schedule ii valuation qualifying accounts collectively consolidated financial statements opinion consolidated financial statements present fairly material respects financial position company december 31 2020 2019 results operations cash flows years threeyear period ended december 31 2020 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states pcaob company’s internal control financial reporting december 31 2020 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission report dated march 1 2021 expressed unqualified opinion effectiveness company’s internal control financial reporting change accounting principle discussed note 1 consolidated financial statements company changed method accounting leases january 1 2019 due adoption provisions accounting standards codification topic 842 leases amended basis opinion consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement consolidated financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures consolidated financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation consolidated financial statements believe audits provide reasonable basis opinion critical audit matter critical audit matter communicated matter arising current period audit consolidated financial statements communicated required communicated audit committee 1 relates accounts disclosures material consolidated financial statements 2 involved especially challenging subjective complex judgments communication critical audit matter alter way opinion consolidated financial statements taken whole communicating critical audit matter providing separate opinion critical audit matter accounts disclosures relates valuation goodwill associated cementing equipment reporting unit discussed notes 1 9 consolidated financial statements company performs goodwill impairment testing annual basis whenever events changes circumstances indicate carrying value goodwill might exceed fair value reporting unit company used income approach estimate fair value cementing equipment reporting unit company goodwill balance 428 million december 31 2020 241 million 563 associated cementing equipment reporting unit company recorded goodwill impairment charge cementing equipment reporting unit 572 million year ended december 31 2020 identified assessment valuation goodwill associated cementing equipment reporting unit critical audit matter estimated fair value cementing equipment reporting unit derived assumptions used estimating future cash flows resulting application high degree subjective auditor judgment revenue growth rates discount rate terminal growth rate assumptions used estimate fair value reporting unit determined significant assumptions changes assumptions could significant effect company’s assessment impairment goodwill following primary procedures performed address critical audit matter evaluated design tested operating effectiveness certain internal controls related company’s goodwill impairment assessment process included controls related determination fair value cementing equipment reporting unit development significant assumptions listed compared company’s historical forecasted revenue actual results assess company’s ability accurately forecast involved valuation professionals specialized skills knowledge assisted •evaluating company’s discount rate comparing discount rate range independently developed using publicly available market data comparable entities •evaluating company’s forecasted revenue growth rates terminal growth rate cementing equipment reporting unit comparing growth assumptions forecasted growth rates company’s peer companies’ analyst reports •testing estimate cementing equipment reporting unit fair value using reporting unit’s cash flow assumptions discount rate comparing result company’s fair value estimate kpmg llp served company’s auditor since 2018 houston texas march 1 2021 report independent registered public accounting firm stockholders board directors frank’s international nv opinion internal control financial reporting audited frank’s international nv subsidiaries’ company internal control financial reporting december 31 2020 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission opinion company maintained material respects effective internal control financial reporting december 31 2020 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission also audited accordance standards public company accounting oversight board united states pcaob consolidated balance sheets company december 31 2020 december 31 2019 related consolidated statements operations comprehensive loss stockholders’ equity cash flows years threeyear period ended december 31 2020 related notes financial statement schedule ii valuation qualifying accounts collectively consolidated financial statements report dated march 1 2021 expressed unqualified opinion consolidated financial statements basis opinion company’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audit accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit internal control financial reporting included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk audit also included performing procedures considered necessary circumstances believe audit provides reasonable basis opinion definition limitations internal control financial reporting company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate kpmg llp houston texas march 1 2021 accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements accompanying notes integral part consolidated financial statements frank’s international nv notes consolidated financial statements note 1basis presentation significant accounting policies nature business frank’s international nv “finv” limited liability company organized laws netherlands global provider highly engineered tubular services tubular fabrication specialty well construction well intervention solutions oil gas industry finv provides services leading exploration production companies offshore onshore environments focus complex technically demanding wells impact coronavirus disease 2019 “covid19” pandemic related economic business market disruptions evolving rapidly future effects uncertain actual impact recent developments business depend many factors many beyond managements control knowledge therefore difficult management assess predict accuracy broad future effects health crisis global economy energy industry company additional information becomes available events circumstances change strategic operational decisions made management adjustments may required could material adverse impact companys consolidated financial position results operations cash flows basis presentation consolidated financial statements finv years ended december 31 2020 2019 2018 include activities frank’s international cv “ficv” blackhawk group holdings llc “blackhawk” wholly owned subsidiaries collectively “company” “we” “us” “our” intercompany accounts transactions eliminated purposes preparing consolidated financial statements accompanying consolidated financial statements related financial information prepared accordance generally accepted accounting principles united states america “gaap” opinion management consolidated financial statements reflect adjustments consisting solely normal accruals necessary fair presentation financial results periods presented consolidated financial statements prepared historical cost basis using united states dollar reporting currency functional currency primarily united states dollar reclassifications certain prioryear amounts reclassified conform current year’s presentation reclassifications impact net income loss working capital cash flows total equity previously reported significant accounting policies accounting estimates preparation consolidated financial statements conformity accounting principles generally accepted united states requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date consolidated financial statements reported amounts revenue expenses reporting period actual results could differ estimates frank’s international nv notes consolidated financial statements accounts receivable estimate current expected credit losses accounts receivable reporting date estimate current expected credit losses based credit loss history adjusted current factors including global economic business conditions oil natural gas industry market conditions customer mix losses charged allowance customer accounts determined uncollectible process involves judgment estimation accordingly results affected adjustments allowance due actual writeoffs differ estimated amounts cash equivalents restricted cash consider highly liquid financial instruments purchased original maturity three months less cash equivalents throughout year cash balances excess federally insured limits deposited various financial institutions experienced losses accounts believe exposed significant credit risk cash equivalents restricted cash consists cash deposits collateralize credit card program amounts reported consolidated balance sheets consolidated statements cash flows cash equivalents restricted cash december 31 2020 december 31 2019 follows thousands cash surrender value life insurance policies cash surrender value life insurance policies held within rabbi trust purpose paying future executive deferred compensation benefit obligations income loss associated policies included income net consolidated statements operations income loss changes cash surrender value life insurance policies 11 million 27 million 12 million years ended december 31 2020 2019 2018 respectively comprehensive income accounting standards reporting comprehensive income require certain items including foreign currency translation adjustments presented components comprehensive income cumulative amounts recognized us standards reflected consolidated balance sheet accumulated comprehensive loss component stockholders’ equity contingencies certain conditions may exist date consolidated financial statements issued may result loss us resolved one future events occur fail occur management input legal counsel assesses contingent liabilities assessment inherently involves exercise judgment assessing loss contingencies related legal proceedings pending us unasserted claims may result proceedings management input legal counsel evaluates perceived merits legal proceedings unasserted claims well perceived merits amount relief sought expected sought therein frank’s international nv notes consolidated financial statements assessment contingency indicates probable material loss incurred amount liability estimated liability would accrued consolidated financial statements assessment indicates potentially material loss contingency probable reasonably possible probable cannot estimated nature contingent liability together estimate range possible loss determinable material disclosed loss contingencies considered remote generally disclosed unless involve guarantees case guarantees would disclosed derivative financial instruments deem appropriate use foreign currency forward derivative contracts mitigate risk fluctuations foreign currency exchange rates use instruments mitigate exposure nonlocal currency working capital hold issue financial instruments trading speculative purposes account derivative activities provisions accounting guidance derivatives hedging derivatives recognized consolidated balance sheet fair value although derivative contracts serve economic hedge cash flow currency exchange risk exposure formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations income loss per share basic income loss per share excludes dilution computed dividing net income loss available common shareholders weighted average number common shares outstanding period diluted income loss per share reflects potential dilution could occur securities issue common stock exercised converted common stock fair value financial instruments financial instruments consist primarily cash equivalents trade accounts receivable availableforsale securities derivative financial instruments obligations trade accounts payable due shortterm nature carrying values cash equivalents trade accounts receivable trade accounts payable approximate fair value refer note 9fair value measurements fair values availableforsale securities derivative financial instruments obligations foreign currency translations transactions results operations foreign subsidiaries functional currencies us dollar translated using average exchange rates period assets liabilities foreign subsidiaries translated using exchange rates effect balance sheet dates gains losses resulting translations included accumulated comprehensive loss within stockholders’ equity foreign subsidiaries designated us dollar functional currency gains losses resulting balance sheet remeasurement foreign operations included consolidated statements operations incurred gains losses resulting transactions denominated foreign currency also included consolidated statements operations incurred goodwill subject amortization tested impairment annually frequently events changes circumstances indicate asset might impaired qualitative assessment allowed determine goodwill potentially impaired option bypass qualitative assessment reporting unit period proceed directly performing quantitative goodwill impairment test qualitative assessment determines whether likely reporting unit’s fair value less carrying amount likely fair value reporting unit less carrying amount quantitative frank’s international nv notes consolidated financial statements impairment test performed quantitative goodwill impairment test used identify existence impairment amount impairment loss test compares fair value reporting unit carrying amount including goodwill fair value reporting unit less carrying value impairment loss recorded based difference complete assessment goodwill impairment october 31 year october 31 2019 performed quantitative goodwill impairment test cementing equipment reporting unit fourth quarter 2019 market factors indicated downturn demand cementing equipment products services us land market slower uptake service offering international markets reduced management forecast reporting unit accordingly based refined outlook quantitative goodwill impairment test indicated fair value cementing equipment reporting unit less carrying value result fourth quarter 2019 recorded 1111 million impairment charge goodwill included goodwill impairment consolidated statements operations first quarter 2020 result decline oil prices due ongoing covid19 pandemic organization petroleum exporting countries russia price war early 2020 identified triggering event indicated fair value goodwill within cementing equipment reporting unit less carrying value based results goodwill impairment test march 31 2020 recorded 571 million impairment charge goodwill included goodwill impairment consolidated statements operations goodwill impairment assessment october 31 2020 identify triggering event indicates fair values reporting units less carrying values used income approach estimate fair value cementing equipment reporting unit also considered market approach validate results income approach estimates fair value discounting reporting unit’s estimated future cash flows using estimated discount rate expected return marketplace participant would required valuation date market approach includes use comparative multiples corroborate discounted cash flow results involves significant judgment selection appropriate peer group companies valuation multiples inputs used determination fair value generally level 3 inputs significant assumptions inherent income approach include estimated future net annual cash flows reporting unit terminal growth rate discount rate selected assumptions used discounted cash flow projections using historical data supplemented current anticipated market conditions estimated growth rates estimates based upon assumptions believed reasonable however given inherent uncertainty determining assumptions underlying discounted cash flow analysis actual results may differ used valuation could result additional impairment charges future assuming assumptions inputs used march 31 2020 discounted cash flow analysis held constant 50 basis point increase discount rate assumption would increased goodwill impairment charge approximately 43 million goodwill impairment recorded year ended december 31 2018 december 31 2020 goodwill allocated reportable segments follows cementing equipment approximately 241 million tubular running services approximately 187 million see note 9fair value measurements notes consolidated financial statements discussion fair value measures impairment longlived assets longlived assets include property plant equipment certain assets held used us reviewed events changes circumstances indicate carrying amount assets may recoverable based estimated future cash flows assessment indicates carrying values recoverable determined based undiscounted cash flows remaining useful lives impairment loss recognized based fair value asset inputs used determination fair value generally level 3 inputs please see note 17 severance charges credits net additional information frank’s international nv notes consolidated financial statements income taxes operate many legal forms approximately 40 countries result subject many us nonus tax jurisdictions many tax agreements treaties among various taxing authorities operations different jurisdictions taxed various bases income taxes deemed profits generally determined using percentage revenue rather profits withholding taxes based revenue determination taxable income jurisdiction requires interpretation related tax laws regulations use estimates assumptions regarding significant future events changes tax laws regulations agreements treaties foreign currency exchange restrictions level operations profitability taxing jurisdiction could impact upon amount income taxes provide given year provide income tax expense based liability method accounting income taxes based authoritative accounting guidance deferred tax assets liabilities recorded based upon temporary differences tax basis assets liabilities carrying values financial reporting purposes measured using tax rates laws expected effect differences projected reverse valuation allowances established reduce deferred tax assets likely portion deferred tax assets realized determining need valuation allowances made judgments estimates regarding future taxable income estimates judgments include degree uncertainty changes estimates assumptions could require us adjust valuation allowances deferred tax assets ultimate realization deferred tax assets depends generation sufficient taxable income applicable taxing jurisdictions deferred tax expense benefit result changes deferred tax assets liabilities associated valuation allowances period impact uncertain tax position taken expected taken income tax return recognized financial statements largest amount likely sustained upon examination relevant taxing authority intangible assets identifiable intangible assets amortized using straightline method estimated useful lives assets evaluate impairment intangible assets asset group basis whenever circumstances indicate carrying value may recoverable intangible assets deemed impaired written fair value using discounted cash flow model available comparable market values following table provides information related intangible assets december 31 2020 2019 thousands intangible assets primarily associated cementing equipment segment amortization expense intangibles assets 44 million 108 million 108 million years ended december 31 2020 2019 2018 respectively first quarter 2020 results companys test impairment goodwill cementing equipment segment result negative market indicators triggering event indicated intangible assets segment impaired impairment testing performed first quarter resulted determination certain intangible assets recoverable estimated fair value carrying value result year ended december 31 2020 impairment charges 47 million recorded associated certain customer relationships intellectual property intangible assets cementing equipment segment included severance charges credits net frank’s international nv notes consolidated financial statements consolidated statements operations year ended december 31 2019 impairment charges 33 million recorded associated certain customer relationships intellectual property intangible assets cementing equipment tubular running services segments intangible asset impairment recorded year ended december 31 2018 december 31 2020 estimated amortization expense remaining intangible assets next five years follows thousands inventories stated lower cost primarily average cost net realizable value company’s inventories consist finished goods spare parts work process raw materials support ongoing manufacturing operations work progress spare parts finished goods include cost materials labor manufacturing overhead inventory placed service either capitalized included equipment expensed based upon capitalization policies determine reserves inventories based historical usage inventory onhand assumptions future demand market conditions estimates potential alternative uses limited please see note 17severance charges credits net additional information leases operating leases real estate vehicles certain equipment present time leases classified operating leases operating lease expense recognized straightline basis lease term accounting leases may require significant judgment includes determining incremental borrowing rates utilize net present value calculation lease payments lease agreements provide implicit rate assessing likelihood renewal termination options separate lease nonlease components classes leased assets also leases initial term 12 months less recorded consolidated balance sheet property plant equipment property plant equipment stated cost less accumulated depreciation expenditures significant improvements betterments capitalized enhance extend useful life asset meet minimum capitalization threshold expenditures routine repairs maintenance improve extend life related assets expensed incurred properties equipment sold retired otherwise disposed related cost accumulated depreciation removed books resulting gain loss recognized consolidated statements operations depreciation fixed assets computed using straightline method estimated useful lives individual assets leasehold improvements amortized straightline basis shorter estimated useful lives lease term depreciation expense 658 million 820 million 1005 million years ended december 31 2020 2019 2018 respectively frank’s international nv notes consolidated financial statements revenue recognition revenue recognized control promised goods services transferred customers amount reflects consideration expect entitled exchange goods services payment terms services products generally range 30 days 120 days given shortterm nature service product offerings contracts significant financing component consideration receive generally fixed disclose value unsatisfied performance obligations contracts original expected duration one year less contracts customers shortterm nature fall within exemption significant unsatisfied performance obligations service revenue recognized time services performed rendered rates services typically priced per day per manhour similar basis generally perform services either direct service purchase orders master service agreements supplemented individual callout provisions customers contracted arrangements accrual recorded unbilled revenue earned yet invoiced revenue product sales generally recognized point time product shipped significant risks ownership passed customer sales arrangements typically include right return similar provisions contain postdelivery obligations tubulars segment cementing equipment segment customers requested store pipe connectors cementing products purchased us facilities recognize revenue “bill hold” sales following criteria met 1 substantive reason arrangement 2 product identified customer’s asset 3 product ready delivery customer 4 cannot use product direct another customer shortterm investments shortterm investments consists commercial paper classified heldtomaturity investments original maturities greater three months less twelve months stockbased compensation 2013 longterm incentive plan provides granting stock options stock appreciation rights “sars” restricted stock restricted stock units “rsus” performance restricted stock units “prsus” dividend equivalent rights types equity cash incentive awards employees nonemployee directors service providers stockbased compensation expense measured grant date sharebased awards based value stockbased compensation expense recognized straightline basis vesting period included cost revenue general administrative expenses consolidated statements operations stockbased compensation currently consists rsus prsus grant date fair value rsus entitled receive dividends vested measured reducing share price date present value dividends expected paid requisite vesting period discounted appropriate riskfree interest rate grant date fair value compensation expense prsu grants estimated based monte carlo simulation using company’s closing stock price day grant date recent accounting pronouncements changes gaap established financial accounting standards board “fasb” form accounting standards updates “asus” fasb’s accounting standards codification consider applicability impact accounting pronouncements asus listed assessed either determined applicable expected immaterial impact consolidated financial position results operations cash flows frank’s international nv notes consolidated financial statements june 2016 fasb issued new accounting guidance credit losses financial instruments guidance includes replacement “incurred loss” approach recognizing credit losses financial assets including trade receivables methodology reflects expected credit losses considers historical current information well reasonable supportable forecasts adopted guidance january 1 2020 adoption material impact consolidated financial statements new credit loss standard expected accelerate recognition credit losses accounts receivable see note 3accounts receivable net additional information regarding allowance credit losses accounts receivable february 2016 fasb issued new accounting guidance leases main objective accounting guidance increase transparency comparability among organizations recognizing lease assets lease liabilities balance sheet disclosing key information leasing arrangements main difference previous gaap new guidance recognition lease assets lease liabilities lessees leases classified operating leases new guidance requires lessees recognize assets liabilities arising leases balance sheet defines lease contract conveys right control use identified property plant equipment period time exchange consideration control use identified asset means customer 1 right obtain substantially economic benefit use asset 2 right direct use asset accounting guidance requires disclosures lessees lessors meet objective enabling users financial statements assess amount timing uncertainty cash flows arising leases adopted new lease standard effective january 1 2019 using modified retrospective approach modified retrospective approach provides method recording existing leases adoption including restating comparative periods adoption new standard resulted recording lease assets 349 million lease liabilities 344 million adjustment retained earnings 07 million january 1 2019 standard impact net income loss cash flows elected package practical expedients permitted transition guidance within new standard allowed us carry forward historical lease classification addition elected separate lease nonlease components classes leased assets also leases initial term 12 months less recorded balance sheet note 2leases operating leases real estate vehicles certain equipment leases remaining lease terms less 1 year 13 years include options extend leases 10 years include options terminate leases within 1 year shortterm lease expense 39 million year ended december 31 2020 36 million year ended december 31 2019 frank’s international nv notes consolidated financial statements includes variable lease costs immaterial note 3accounts receivable net accounts receivable december 31 2020 2019 follows thousands 1amounts represent expenditures behalf nonconsolidated affiliates frank’s international nv notes consolidated financial statements year ended december 31 2020 27 million written allowance credit losses december 31 2020 35 11 net trade receivables customers united states saudi arabia respectively december 31 2019 42 net trade receivables customers united states country accounted 10 net trade receivables dates note 4inventories net inventories december 31 2020 2019 follows thousands note 5property plant equipment following summary property plant equipment december 31 2020 2019 thousands frank’s international nv notes consolidated financial statements first quarter 2019 buildings net book value 11 million met criteria classified held sale reclassified property plant equipment assets held sale consolidated balance sheet second quarter 2019 sold building classified held sale 02 million recorded immaterial loss third quarter 2019 additional building met criteria classified held sale 40 million impairment loss recorded included severance charges credits net consolidated statements operations buildings remaining net book value 53 million reclassified property plant equipment assets held sale consolidated balance sheets fourth quarter 2019 sold building classified held sale 03 million recorded immaterial loss also fourth quarter 2019 equipment tubular running services segment met criteria classified held sale 03 million impairment loss recorded included severance charges credits net consolidated statements operations equipment’s remaining net book value 02 million reclassified property plant equipment assets held sale consolidated balance sheets second quarter 2020 sold building classified held sale 54 million recorded gain 06 million third quarter 2020 determined building longer met held sale criteria reclassified fair value 53 million assets held sale property plant equipment consolidated balance sheets fourth quarter 2020 sold building classified held sale 07 million recorded immaterial gain year ended december 31 2020 recorded fixed asset impairment charges 157 million primarily associated construction progress cementing equipment segment included severance charges credits net consolidated statements operations first quarter 2020 results companys test impairment goodwill cementing equipment segment result negative market indicators triggering event indicated longlived tangible assets segment impaired impairment testing performed first quarter resulted determination certain longlived assets recoverable estimated fair value carrying value year ended december 31 2019 recorded fixed asset impairment charges 329 million primarily associated construction progress tubular running service segment included severance charges credits net consolidated statement operations impairments recognized year ended december 31 2018 please see note 17severance charges credits net notes consolidated financial statements additional details following table presents depreciation amortization associated line years ended december 31 2020 2019 2018 thousands frank’s international nv notes consolidated financial statements note 6other assets december 31 2020 2019 consisted following thousands 1see note 9fair value measurements additional information note 7 accounts payable accrued liabilities accounts payable accrued liabilities december 31 2020 2019 consisted following thousands 1represents amounts owed nonconsolidated affiliates note 8debt credit facility asset based revolving credit facility november 5 2018 ficv frank’s international llc blackhawk borrowers finv certain finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc guarantors entered 5year senior secured revolving credit facility “abl credit facility” jpmorgan chase bank na administrative agent “abl agent” financial institutions lenders total commitments 1000 million including 150 million available letters credit subject terms abl credit facility ability increase commitments 2000 million maximum amount company may borrow abl credit facility subject borrowing base based percentage certain eligible accounts receivable eligible inventory subject customary reserves adjustments frank’s international nv notes consolidated financial statements obligations abl credit facility fully unconditionally guaranteed jointly severally finv’s subsidiaries including ficv frank’s international llc blackhawk frank’s international gp llc frank’s international lp frank’s international lp bv frank’s international partners bv frank’s international management bv blackhawk intermediate holdings llc blackhawk specialty tools llc trinity tool rentals llc subject customary exceptions exclusions addition obligations abl credit facility secured first priority liens substantially assets property borrowers guarantors including pledges equity interests certain finv’s subsidiaries subject certain exceptions borrowings abl credit facility bear interest finv’s option either alternate base rate “abr” defined therein calculated greatest rate interest publicly quoted wall street journal “prime rate” subject increase decrease prime rate effective date change occurs ii federal funds effective rate subject 000 interest rate floor plus 050 iii onemonth adjusted libo rate defined therein plus 100 b adjusted libo rate defined therein plus case applicable margin applicable interest rate margin ranges 100 150 per annum abr loans 200 250 per annum eurodollar loans case based finv’s leverage ratio unused portion abl credit facility subject commitment fee varies 0250 0375 per annum according average daily unused commitments abl credit facility interest eurodollar loans payable end selected interest period less frequently quarterly interest abr loans payable monthly arrears abl credit facility contains various covenants restrictive provisions limit subject certain customary exceptions thresholds finv’s ability among things 1 enter asset sales 2 incur additional indebtedness 3 make investments acquisitions loans create incur liens 4 pay certain dividends make distributions 5 engage transactions affiliates abl credit facility also requires finv maintain minimum fixed charge coverage ratio 10 based ratio consolidated ebitda defined therein minus unfinanced capital expenditures b fixed charges defined therein either event default occurs abl facility ii availability abl credit facility falls least two consecutive calendar days greater 125 million b 15 lesser borrowing base aggregate commitments “fccr trigger event” accounts receivable received finv’s us subsidiaries parties abl credit facility deposited deposit accounts subject deposit control agreements favor abl agent fccr trigger event deposit accounts would subject “springing” cash dominion fccr trigger event company subject compliance fixed charge coverage ratio “springing” cash dominion default exists abl credit facility availability facility preceding thirty consecutive days equal least greater x 125 million 15 lesser borrowing base aggregate commitments finv fails perform obligations agreement results event default commitments abl credit facility could terminated outstanding borrowings abl credit facility may declared immediately due payable abl credit facility also contains cross default provisions apply finv’s indebtedness december 31 2020 finv borrowings outstanding abl credit facility letters credit outstanding 103 million availability 242 million note 9fair value measurements follow fair value measurement authoritative accounting guidance measuring fair values assets liabilities financial statements fair value price would received sell asset paid transfer liability orderly transaction market participants measurement date utilize market data assumptions market participants independent knowledgeable willing able transact would use pricing asset liability including assumptions risk risks inherent inputs valuation technique able classify fair value balances based observability inputs authoritative guidance fair value measurements establishes three levels fair value hierarchy defined follows frank’s international nv notes consolidated financial statements •level 1 unadjusted quoted prices identical assets liabilities active markets •level 2 quoted prices markets considered active financial instruments significant inputs observable either directly indirectly substantially full term asset liability •level 3 significant unobservable inputs use little market data exists requiring significant degree judgment hierarchy gives highest priority level 1 measurements lowest priority level 3 measurements depending particular asset liability input availability vary depending factors product type longevity product market particular transaction conditions cases certain inputs used measure fair value may categorized different levels fair value hierarchy disclosure purposes accounting guidance lowest level contains significant inputs used valuation chosen financial assets liabilities summary financial assets liabilities measured fair value recurring basis december 31 2020 2019 follows thousands derivative financial instruments consist shortduration foreign currency forward contracts fair value derivative financial instruments based quoted market values including foreign exchange forward rates interest rates fair value computed discounting projected future cash flow amounts present value december 31 2019 derivative financial instruments included financial statement line item accounts payable accrued liabilities consolidated balance sheets investments associated deferred compensation plan consist primarily cash surrender value life insurance policies included assets consolidated balance sheets liability associated frank’s international nv notes consolidated financial statements deferred compensation plan included liabilities consolidated balance sheets investments change result contributions payments fluctuations market assets liabilities measured using significant observable inputs reported fair value based thirdparty broker statements derived fair value funds’ underlying investments also marketable securities publicly traded equity securities indirect result strategic investments reported fair value based price stock included assets consolidated balance sheets assets liabilities measured fair value nonrecurring basis apply provisions fair value measurement standard nonrecurring nonfinancial measurements including business combinations assets identified held sale well impairment related goodwill longlived assets business combinations purchase price allocated assets acquired liabilities assumed based discounted cash flow model intangibles well market assumptions valuation equipment fixed assets perform goodwill impairment assessment reporting unit comparing estimated fair value reporting unit reporting unit’s carrying value including goodwill estimate fair value reporting unit using discounted cash flow analysis based management’s shortterm longterm forecast operating performance analysis includes significant assumptions regarding discount rates revenue growth rates terminal growth rates timing expected future cash flows based market conditions estimated fair value reporting unit exceeds carrying amount goodwill reporting unit considered impaired carrying amount reporting unit exceeds estimated fair value impairment loss measured recorded conducting impairment test longlived assets goodwill first compare estimated future undiscounted cash flows associated asset’s carrying amount undiscounted cash flows less asset’s carrying amount determine asset’s fair value using discounted cash flow analysis analyses based estimates management’s shortterm longterm forecast operating performance including revenue growth rates expected profitability margins estimates remaining useful life service potential asset discount rate based weighted average cost capital assets meet criteria classified held sale market approach used determine fair value based thirdparty appraisal reports impairment assessments discussed incorporate inherent uncertainties including projected commodity pricing supply demand services future market conditions difficult predict volatile economic environments could result impairment charges future periods actual results materially differ estimated assumptions utilized forecasts crude oil prices decline significantly remain low levels sustained period time could required record impairment carrying value longlived assets future could material adverse impact operating results given unobservable nature inputs discounted cash flow models deemed use level 3 inputs fair value considerations carrying values consolidated balance sheets cash equivalents shortterm investments trade accounts receivable current assets accounts payable accrued liabilities lines credit approximate fair values due short maturities note 10 derivatives time enter shortduration foreign currency forward derivative contracts reduce risk foreign currency fluctuations use instruments mitigate exposure nonlocal currency operating working capital record contracts fair value consolidated balance sheets although derivative contracts serve economic hedge cash flow currency exchange risk exposure frank’s international nv notes consolidated financial statements formally designated hedge contracts hedge accounting treatment accordingly changes fair value derivative instruments period included consolidated statements operations foreign currency derivative contracts outstanding december 31 2020 december 31 2019 following foreign currency derivative contracts outstanding us dollars thousands following table summarizes location fair value amounts derivative contracts consolidated balance sheets december 31 2020 2019 thousands following table summarize location amounts unrealized realized gains losses derivative contracts consolidated statements operations december 31 2020 2019 2018 thousands derivative transactions governed international swaps derivatives association master agreements include stipulations regarding right offset event counterparty default performance obligations default occur parties right net amounts payable receivable single net settlement parties accounting policy offset derivative assets liabilities executed counterparty master netting arrangement exists following table presents gross net fair values derivatives december 31 2020 2019 thousands frank’s international nv notes consolidated financial statements note 11related party transactions engaged certain transactions companies related us common ownership entered various operating leases lease facilities affiliated companies rent expense associated related party leases 27 million 27 million 65 million years ended december 31 2020 2019 2018 respectively december 31 2020 36 million operating lease rightofuse assets 50 million lease liabilities associated related party leases november 2 2018 frank’s international llc entered purchase agreement mosing ventures llc mosing land cattle company llc mosing queens row properties llc 4m investments companies related us common ownership “mosing companies” purchase agreement acquired real property previously leased mosing companies two additional properties located adjacent properties total purchase price 370 million including legal fees closing adjustments normal operating activity purchase closed december 18 2018 properties conveyed asis except 10 years following closing date parties continue certain rights obligations terms agreements purchased properties acquired mosing companies time ipo made improvements purchased properties lease period purchase price calculated excluding value improvements purchase close longer lease acquired properties mosing companies tax receivable agreement mosing holdings permitted transferees converted shares preferred stock shares common stock august 26 2016 connection delivery finv interests ficv “conversion” result election section 754 internal revenue code made ficv conversion resulted adjustment tax basis tangible intangible assets ficv respect portion ficv transferred finv mosing holdings permitted transferees adjustments allocated finv adjustments tax basis tangible intangible assets ficv described would available absent conversion basis adjustments may reduce amount tax finv would otherwise required pay future basis adjustments may also decrease gains increase losses future dispositions certain capital assets extent tax basis allocated capital assets tra entered ficv mosing holdings connection ipo generally provides payment finv mosing holdings 85 net cash savings us federal state local income tax franchise tax finv actually realizes deemed realize certain circumstances periods ipo result tax basis increases resulting conversion ii imputed interest deemed paid finv result additional tax basis arising payments tra retain benefit remaining 15 cash savings payments finv makes tra increased interest accrued due date without extensions corresponding tax return date payment specified tra payments tra conditioned upon holder rights tra continued ownership interest finv estimation amount timing payments tra nature imprecise purposes tra cash savings tax generally calculated comparing finv’s actual tax liability amount finv would required pay able utilize tax benefits subject tra amounts payable well timing payments tra dependent upon significant future events assumptions including amount timing taxable income finv generates future december 31 2020 finv cumulative loss prior 36month period based history losses well uncertainty regarding timing amount future taxable income longer able conclude future cash savings lead additional payouts tra additional tra liability may recognized future based changes expectations regarding timing likelihood future cash savings frank’s international nv notes consolidated financial statements payment obligations tra finv’s obligations ficv term tra commenced upon completion ipo continue tax benefits subject tra utilized expired unless finv elects exercise right terminate tra terminated due circumstances including breach material obligation thereunder certain mergers changes control finv makes termination payment specified tra finv elects terminate tra early may sole discretion terminates early result breach would required make substantial immediate lumpsum payment equal present value hypothetical future payments could required paid tra based upon certain assumptions deemed events set forth tra including assumption sufficient taxable income fully utilize tax attributes subject tra determined applying discount rate equal longterm treasury rate effect applicable date plus 300 basis points early termination payment may made significantly advance may materially exceed actual realization cash tax savings tax benefits payment relates actual realization future benefits addition payments due tra similarly accelerated following certain mergers changes control situations finv’s obligations tra could substantial negative impact liquidity could effect delaying deferring preventing certain mergers asset sales forms business combinations changes control example tra terminated december 31 2020 estimated termination payment would approximately 680 million calculated using discount rate 445 foregoing number merely estimate actual payment could differ materially finv holding company operations ability make payments tra dependent ability finv’s operating subsidiaries make distributions amount sufficient cover finv’s obligations agreement ability certain finv’s operating subsidiaries make distributions subject among things applicable provisions dutch law may limit amount funds available distribution restrictions debt instruments extent finv unable make payments tra reason except case acceleration payments thereunder occurring connection early termination tra certain mergers change control payments deferred accrue interest paid finv prohibited paying dividends common stock note 12loss per common share basic loss per common share determined dividing net loss weighted average number common shares outstanding period diluted loss per share determined dividing loss attributable common stockholders weighted average number common shares outstanding assuming potentially dilutive shares issued apply treasury stock method determine dilutive weighted average common shares represented unvested restricted stock units espp shares following table summarizes basic diluted loss per share calculations thousands except per share amounts 1approximate number shares unvested restricted stock units stock issued pursuant espp excluded computation diluted loss per share effect would antidilutive results operations net loss position1048 737 922 frank’s international nv notes consolidated financial statements note 13stockbased compensation 2013 longterm incentive plan 2013 longterm incentive plan “ltip” stock options sars restricted stock restricted stock units dividend equivalent rights types equity cash incentive awards may granted employees nonemployee directors service providers ltip expires 10 years unless prior date maximum number shares available issuance plan issued board directors terminates plan 20000000 shares common stock reserved issuance ltip december 31 2020 9031242 shares remained available issuance restricted stock units upon completion ipo pursuant ltip began granting restricted stock units rsus granted ltip vest ratably period one three years treasury stock primarily consists shares withheld employees settle personal tax obligations arose result restricted stock units vested certain restricted stock unit awards provide accelerated vesting qualifying terminations employment service employees granted rsus entitled dividends declared underlying shares restricted stock unit unvested grant date fair value award measured reducing grant date price common stock present value dividends expected paid underlying shares requisite service period discounted appropriate riskfree interest rate weighted average grant date fair value rsus granted years ended december 31 2020 2019 2018 99 million 114 million 95 million respectively compensation expense recognized ratably vesting period forfeitures recorded occur stockbased compensation expense relating rsus years ended december 31 2020 2019 2018 80 million 87 million 89 million respectively total fair value rsus vested years ended december 31 2020 2019 2018 96 million 71 million 67 million respectively unamortized stock compensation expense december 31 2020 relating rsus totaled approximately 90 million expensed weighted average period 13 years nonvested rsus outstanding december 31 2020 changes year follows performance restricted stock units purpose prsus closely align incentive compensation executive leadership team duration performance cycle returns finv’s shareholders thereby motivate executive leadership team create sustained value finv shareholders design prsu grants effectuates purpose placing material amount incentive compensation executive risk offering extraordinary reward attainment extraordinary results design features prsu grant furtherance purpose include following 1 vesting prsus based total shareholder frank’s international nv notes consolidated financial statements return “tsr” based comparison returns peer group beginning prsus granted 2018 spdr sp oil gas equipment services etf 2 tsr performance calculated separately respect three separate oneyear achievement periods included threeyear performance period resulting weighted average payout end threeyear performance period tsr calculation assume reinvestment dividends 3 ultimate number shares issued pursuant prsu awards vary proportion actual tsr achieved percentile compared peer group performance period follows shares issued company’s performance falls 25th percentile ii 50 target level company achieves rank 25th percentile threshold level iii 100 target level company achieves rank 50th percentile target level iv 150 target level company achieves rank 75th percentile 200 target level company achieves rank 90th percentile maximum level 4 unless qualifying termination defined prsu award agreement prsus executive forfeited upon executive’s termination employment performance period though value prsu grant may change participant compensation expense recorded company determined date grant expected volatility based historical equity volatility stock based 50 historical 50 implied volatility weighting commensurate expected term prsu expected volatility considers factors historical volatility share price peer group companies implied volatility share price length time shares publicly traded split dividendadjusted closing stock prices 2020 granted prsus fair value 30 million 676615 units “target level” performance period grants three year period january 1 2020 december 31 2022 “performance period” separate oneyear achievement periods january 1 2020 december 31 2020 january 1 2021 december 31 2021 january 1 2022 december 31 2022 resulting weighted average payout end performance period weighted average assumptions prsus granted 2020 follows 2019 granted prsus fair value 37 million 446858 units “target level” performance period grants three year period january 1 2019 december 31 2021 “performance period” separate oneyear achievement periods january 1 2019 december 31 2019 january 1 2020 december 31 2020 january 1 2021 december 31 2021 resulting weighted average payout end performance period weighted average assumptions prsus granted 2019 follows 2018 granted prsus fair value 20 million 275550 units “target level” performance period grants three year period january 1 2018 december 31 2020 “performance period” separate oneyear achievement periods january 1 2018 december 31 frank’s international nv notes consolidated financial statements 2018 january 1 2019 december 31 2019 january 1 2020 december 31 2020 resulting weighted average payout end performance period weighted average assumptions prsus granted 2018 follows event death disability restrictions related forfeiture defined performance awards agreement lapse respect 100 prsus target level effective date event involuntary termination except cause company may enter special vesting agreement executive restrictions forfeiture lapse upon termination event termination reason prior end performance period prsus forfeited stockbased compensation expense related prsus years ended december 31 2020 2019 2018 26 million 20 million 12 million respectively total fair value prsus vested year ended december 31 2020 15 million prsu vestings years ended december 31 2019 2018 unamortized stock compensation expense december 31 2020 relating prsus totaled approximately 34 million expensed weighted average period 175 years nonvested prsus outstanding december 31 2020 changes year follows employee stock purchase plan frank’s international nv espp eligible employees right purchase shares common stock lesser 85 last reported sale price common stock last trading date immediately preceding first day option period ii 85 last reported sale price common stock last trading date immediately preceding last day option period espp intended qualify employee stock purchase plan section 423 internal revenue code reserved 30 million shares common stock issuance espp 18 million shares available issuance december 31 2020 shares issued employees espp totaled 340950 2020 389284 shares 2019 years ended december 31 2020 2019 2018 recognized 04 million 06 million 05 million compensation expense related stock purchased espp respectively january 2020 issued 125893 shares common stock employees plan satisfy employee purchase period july 1 2019 december 31 2019 increased common stock outstanding july 2020 issued 215057 shares common stock employees plan satisfy employee purchase period january 1 2020 june 30 2020 increased common stock outstanding frank’s international nv notes consolidated financial statements note 14employee benefit plans us benefit plans 401k savings investment plan frank’s international llc administers 401k savings investment plan “plan” part employee benefits package employees required complete one month service becoming eligible participate plan prior may 21 2020 matched 100 first 3 eligible compensation employee contributed plan annual allowable irs limit additionally company provided 50 match employee contributions 4 6 eligible compensation effective may 21 2020 safe harbor matching contribution eliminated matching contributions plan totaled 22 million 50 million 45 million years ended december 31 2020 2019 2018 respectively executive deferred compensation plan december 2004 certain affiliates adopted frank’s executive deferred compensation plan “edc plan” purpose edc plan provide participants opportunity defer receipt portion salary bonus specified cash compensation participant contributions immediately vested contributions vest five years service participant benefits edc plan shall paid directly general funds applicable participating subsidiary grantor trust commonly referred rabbi trust created purpose informally funding edc plan rabbi trust special separate fund shall established segregation assets shall made assure payment assets edc plan’s trust invested corporate owned splitdollar life insurance policy amalgamation mutual funds see note 6other assets recorded compensation expense related vesting company’s contribution 10 million year ended december 31 2018 compensation expense related vesting company’s contribution recorded years ended december 31 2020 2019 total liability recorded december 31 2020 2019 related edc plan 203 million 233 million respectively included noncurrent liabilities consolidated balance sheets note 15income taxes loss income taxes comprised following periods indicated thousands frank’s international nv notes consolidated financial statements income taxes provided based upon tax laws rates countries operations conducted income earned components income tax expense benefit consist following periods indicated thousands variance effective tax rates compared prior periods due primarily beneficial impact current year provisions coronavirus aid relief economic security act “cares act” allows corporations net operating losses “nols” incurred 2018 2019 2020 carry back nols five years preceding year nol beginning earliest year taxable income claim income tax refund applicable carryback year result nol carryback provision cares act able recognize income tax refund 175 million received third quarter 2020 reconciliation differences income tax provision computed 21 us statutory rate effect december 31 2020 reported provision income taxes periods indicated follows thousands reconciliation using netherlands statutory rate provided significant operations netherlands frank’s international nv notes consolidated financial statements deferred tax assets liabilities recorded anticipated future tax effects temporary differences financial statement basis tax basis assets liabilities measured using tax rates laws expected effect differences projected reverse valuation allowance recorded likely benefit deferred tax asset realized significant components deferred tax assets liabilities follows thousands december 31 2020 income tax nol carryforwards related us nonus operations approximately 476 million addition research development tax credit carryforwards approximately 12 million ultimate utilization nols research development credits depend ability generate sufficient taxable income appropriate tax jurisdiction tax attributes expire follows thousands valuation allowance deferred tax asset positions increased 1300 million 1682 million 2020 result accumulated tax losses us various foreign tax jurisdictions evaluated available evidence determined likely losses utilized frank’s international nv notes consolidated financial statements intention cash earnings subsidiaries december 31 2020 permanently reinvested used meet operating cash flow needs existing plans demonstrate need repatriate foreign cash fund parent company activity however determine parent company funding required estimate cash needs may met without adverse tax consequences reconciliation unrecognized tax benefits december 31 2020 follows thousands approximately 3 million uncertain tax positions recognized future would impact effective tax rate approximately 241 million reserve relates certain deductions would impact rate subsequently able utilize operating loss carryforwards elected classify interest penalties incurred income taxes income tax expense foresee resolution positions coming twelve months file income tax returns us various international tax jurisdictions december 31 2020 us tax returns remain open examination tax years 2016 2019 major foreign taxing jurisdictions subject tax open examination tax years 2010 2019 note 16commitments contingencies commitments committed various operating lease agreements primarily related real estate vehicles certain equipment expire various dates throughout next several years please see note 2leases notes consolidated financial statements additional information also purchase commitments related inventory amount 266 million december 31 2020 enter purchase commitments needed contingencies subject lawsuits claims arising ordinary course business time liability accrued loss probable reasonably estimated material accruals loss contingencies individually aggregate december 31 2020 december 31 2019 believe probability remote ultimate outcome matters would material adverse effect financial position results operations cash flows conducting internal investigation operations certain foreign subsidiaries west africa including possible violations us foreign corrupt practices act “fcpa” policies applicable laws june 2016 voluntarily disclosed existence extensive internal review sec us department justice “doj” governmental entities intent continue fully cooperate agencies applicable authorities connection investigation may conducted connection matter review indicated material impact previously filed financial statements continued collect information cooperate authorities time unable predict ultimate resolution matters agencies frank’s international nv notes consolidated financial statements disclosed investigation possible violations fcpa remains ongoing continue cooperate sec doj relevant governmental entities connection therewith time unable predict ultimate resolution matters agencies including financial impact us board management committed continuously enhancing internal controls support improved compliance transparency throughout global operations note 17severance charges credits net recognize severance charges costs associated workforce reductions facility closures exiting reducing footprint certain countries inventory asset impairments retirement excess machinery equipment based economic utility result downturn industry impact business outlook continue take actions adjust operations cost structure reflect current expected activity levels depending future market conditions actions may necessary adjust operations may result additional charges severance charges credits net summarized thousands severance costs incurred costs due continued effort adjust cost base including reducing workforce meet depressed demand industry december 31 2020 outstanding liability associated current program approximately 27 million included severance payments employeerelated separation costs addition also incurred costs associated strategic initiatives investigate opportunities longterm shareholder growth reconciliation employee separation liability balance thousands fixed asset impairments retirements year ended december 31 2019 undertook comprehensive business review conjunction sharp decline us land activity review identified certain fixed assets primarily construction progress commercially viable given current market conditions resulted impairment charge 329 million year ended december 31 2020 recorded fixed asset impairment charges 157 million primarily associated construction progress cementing equipment segment please see note 5property plant equipment additional details frank’s international nv notes consolidated financial statements inventory impairments year ended december 31 2019 certain inventories tubular running services cementing equipment tubulars segments determined costs exceeded net realizable values resulting charge 45 million year ended december 31 2020 certain inventories cementing equipment segment determined costs exceeded net realizable values resulting charge 04 million intangible asset impairments year ended december 31 2019 identified certain intangible assets longer commercial viability company resulting impairment charge 33 million year ended december 31 2020 identified certain intangible assets carrying value exceeded fair value cementing equipment segment resulting impairment charge 47 million please see note 1basis presentation significant accounting policies notes consolidated financial statements additional details accounts receivable writeoff recovery experienced payment delays certain customers angola 2018 recovered 49 million previously written receivables customer angola note 18supplemental cash flow information supplemental cash flows noncash transactions follows periods indicated thousands note 19segment information reporting segments comprised three reportable segments tubular running services “trs” segment tubulars segment cementing equipment “ce” segment trs segment provides tubular running services globally internationally trs segment operates majority offshore oil gas markets also several onshore regions operations approximately 40 countries six continents us trs segment provides services active onshore oil gas drilling regions including permian basin eagle ford shale haynesville shale marcellus shale utica shale us gulf mexico customers primarily large exploration production companies including international oil gas companies national oil gas companies major independents oilfield service companies tubulars segment designs manufactures distributes connectors casing attachments large outside diameter “od” heavy wall pipe additionally tubulars segment sells large od pipe originally manufactured various pipe mills plain end fully fabricated proprietary welded threaddirect connector solutions provides specialized fabrication welding services support offshore deepwater projects including drilling production risers flowlines pipeline end terminations well longlength tubular assemblies 400 feet length tubulars segment also specializes development manufacture frank’s international nv notes consolidated financial statements supply proprietary drilling tool solutions focus improving drilling productivity eliminating mitigating traditional drilling operational risks ce segment provides specialty equipment enhance safety efficiency rig operations provides specialized equipment services products utilized construction completion abandonment wellbore onshore offshore environments product portfolio includes casing accessories serve improve installation casing centralization wellbore zonal isolation well enhance cementing operations advance wiper plug float equipment technology abandonment solutions primarily used isolate portions wellbore setting barriers downhole allow rig evacuation case inclement weather maintenance work rig equipment squeeze cementing pressure testing within wellbore hydraulic fracturing temporary permanent abandonments offerings improve operational efficiencies limit nonproductive time unscheduled events encountered wellsite revenue disaggregate revenue contracts customers geography segments believe best depicts nature amount timing uncertainty revenue cash flows affected economic factors intersegment revenue immaterial following tables presents revenue disaggregated geography based location services provided products sold thousands frank’s international nv notes consolidated financial statements revenue geographic area follows thousands netherlands based company derive revenue services product sales clients primarily oil gas industry one customer accounted 13 revenue year ended december 31 2020 three segments generated revenue customer single customer accounted 10 revenue years ended december 31 2019 2018 revenue generated netherlands immaterial years ended december 31 2020 2019 2018 united states individual country represented 10 revenue years ended december 31 2020 2019 2018 adjusted ebitda define adjusted ebitda net income loss interest income net depreciation amortization income tax benefit expense asset impairments gain loss disposal assets foreign currency gain loss equitybased compensation unrealized realized gain loss effects tra noncash adjustments charges credits review adjusted ebitda consolidated basis segment basis use adjusted ebitda assess financial performance allows us compare operating performance consistent basis across periods removing effects capital structure varying levels interest expense asset base depreciation amortization income tax foreign currency exchange rates charges credits adjusted ebitda limitations analytical tool considered alternative net income loss operating income loss cash flow operating activities measure financial performance presented accordance gaap chief operating decision maker “codm” uses adjusted ebitda primary measure segment reporting performance frank’s international nv notes consolidated financial statements following table presents reconciliation segment adjusted ebitda net loss thousands 1 includes certain expenses attributable particular segment costs related support functions corporate executives 2 please see note 11related party transactions discussion 3 comprised equitybased compensation expense 2020 11010 2019 11280 2018 10621 mergers acquisition expense 2020 none 2019 none 2018 58 unrealized realized gains 2020 1378 2019 228 2018 1682 investigationrelated matters 2020 1868 2019 3838 2018 5454 adjustments 2020 616 2019 957 2018 none frank’s international nv notes consolidated financial statements following table sets forth certain financial information respect reportable segments thousands nongaap financial measure disclosed codm review total assets segment part review segment results following table presents property plant equipment “ppe” segment frank’s international nv notes consolidated financial statements based unique nature operating structure revenue generating assets interchangeable two categories offshore ii onshore addition us land onshore assets cannot deployed offshore markets based upon certification equipment application certain international land markets longlived assets netherlands insignificant years presented note 20quarterly financial data unaudited summarized quarterly financial data years ended december 31 2020 2019 set forth thousands except per share data 1gross profit defined total revenue less cost revenue less depreciation amortization attributed cost revenue 2first quarter 2020 includes goodwill impairment charge 571 million fixed asset impairment charges 155 million intangible asset impairments 47 million please see note 1basis presentation significant accounting policies note 17severance charges credits net additional details 3fourth quarter 2019 includes goodwill impairment charge 1111 million fixed asset impairment charges 288 million inventory impairments 42 million intangible asset impairments 33 million please see note 1basis presentation significant accounting policies note 17severance charges credits net additional details 4the sum individual quarterly income losses per share amounts may agree yeartodate net income loss per common share quarterly computation based weighted average number common shares outstanding period item 9 item 15 exhibits financial statement schedules a1 financial statements consolidated financial statements included part ii item 8 form 10k listing statements accompanying footnotes see index consolidated financial statements page 50 a2 financial statement schedules schedule ii valuation qualifying account schedules listed omitted applicable required information required set forth therein included financial statements supplementary data item 8 notes thereto a3 exhibits listed exhibit index beginning page 85 exhibit index † represents management contract compensatory plan arrangement filed herewith furnished herewith 33signatures pursuant requirements securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities indicated march 4 2014 signature title donald keith mosing chairman supervisory board director donald keith mosing chief executive officer president principal executive officer mark g margavio vice president chief financial officer treasurer mark g margavio principal financial officer victor c szabo chief accounting officer victor c szabo principal accounting officer kirkland mosing supervisory director kirkland mosing steven b mosing supervisory director steven b mosing sheldon erikson supervisory director sheldon erikson michael c kearney supervisory director michael c kearney gary p luquette supervisory director gary p luquetteitem 15 exhibits financial statement schedules a1 financial statements consolidated financial statements included part ii item 8 form 10k listing statements accompanying footnotes see index consolidated financial statements page 47 a2 financial statement schedules schedule ii valuation qualifying account schedules listed omitted applicable required information required set forth therein included financial statements supplementary data item 8 notes thereto a3 exhibits listed exhibit index beginning page 85 exhibit index † represents management contract compensatory plan arrangement filed herewith furnished herewith signatures pursuant requirements securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities indicated march 6 2015 signature title gary p luquette president chief executive officer gary p luquette supervisory director principal executive officer jeffrey j bird executive vice president chief financial officer jeffrey j bird principal financial officer victor c szabo chief accounting officer victor c szabo principal accounting officer donald keith mosing chairman board supervisory directors donald keith mosing kirkland mosing supervisory director kirkland mosing steven b mosing supervisory director steven b mosing william b berry supervisory director william b berry sheldon erikson supervisory director sheldon r erikson michael c kearney supervisory director michael c kearneyitem 15 exhibits financial statement schedules a1 financial statements consolidated financial statements included part ii item 8 form 10k listing statements accompanying footnotes see index consolidated financial statements page 49 a2 financial statement schedules schedule ii valuation qualifying account schedules listed omitted applicable required information required set forth therein included financial statements supplementary data item 8 notes thereto a3 exhibits listed exhibit index beginning page 90 exhibit index † represents management contract compensatory plan arrangement pursuant item 601b2 regulation sk registrant agrees furnish supplementally copy omitted schedule sec upon request filed herewith furnished herewith signatures pursuant requirements securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities indicated february 29 2016 signature title gary p luquette president chief executive officer gary p luquette supervisory director principal executive officer jeffrey j bird executive vice president chief financial officer jeffrey j bird principal financial officer ozong etta vice president chief accounting officer ozong e etta principal accounting officer michael c kearney chairman board supervisory directors michael c kearney donald keith mosing supervisory director donald keith mosing kirkland mosing supervisory director kirkland mosing steven b mosing supervisory director steven b mosing william b berry supervisory director william b berry sheldon erikson supervisory director sheldon r eriksonitem 15 exhibits financial statement schedules a1 financial statements consolidated financial statements included part ii item 8 form 10k listing statements accompanying footnotes see index consolidated financial statements page 51 a2 financial statement schedules schedule ii valuation qualifying account schedules listed omitted applicable required information required set forth therein included financial statements supplementary data item 8 notes thereto a3 exhibits listed exhibit index beginning page 96 exhibit index † represents management contract compensatory plan arrangement pursuant item 601b2 regulation sk registrant agrees furnish supplementally copy omitted schedule sec upon request filed herewith furnished herewith signatures pursuant requirements securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities indicated february 24 2017 signature title douglas stephens president chief executive officer douglas stephens principal executive officer jeffrey j bird executive vice president chief financial officer jeffrey j bird principal financial officer ozong etta vice president chief accounting officer ozong e etta principal accounting officer michael c kearney chairman board supervisory directors michael c kearney william b berry supervisory director william b berry sheldon erikson supervisory director sheldon r erikson gary p luquette supervisory director gary p luquette michael e mcmahon supervisory director michael e mcmahon donald keith mosing supervisory director donald keith mosing kirkland mosing supervisory director kirkland mosing steven b mosing supervisory director steven b mosing alexander vriesendorp supervisory director alexander vriesendorpitem 15 exhibits financial statement schedules a1 financial statements consolidated financial statements included part ii item 8 financial statements supplementary data form 10k listing statements accompanying footnotes see index consolidated financial statements page 55 a2 financial statement schedules schedule ii valuation qualifying accounts financial statement schedules listed page 103 schedules listed omitted applicable required information required set forth therein included item 8 financial statements supplementary data notes thereto a3 exhibits listed exhibit index beginning page 104 item 16 form 10k summary none 1 includes allowances acquired business combinations reductions allowance credited expense exhibit index † represents management contract compensatory plan arrangement pursuant item 601b2 regulation sk registrant agrees furnish supplementally copy omitted schedule sec upon request filed herewith furnished herewith signatures pursuant requirements securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities indicated february 27 2018 signature title michael c kearney chairman president chief executive officer michael c kearney principal executive officer kyle mcclure senior vice president chief financial officer kyle mcclure principal financial officer ozong e etta vice president chief accounting officer ozong e etta principal accounting officer william b berry supervisory lead director william b berry robert w drummond supervisory director robert w drummond michael e mcmahon supervisory director michael e mcmahon keith mosing supervisory director keith mosing kirkland mosing supervisory director kirkland mosing brent mosing supervisory director brent mosing alexander vriesendorp supervisory director alexander vriesendorpitem 15 exhibits financial statement schedules a1 financial statements consolidated financial statements included part ii item 8 “financial statements supplementary data” form 10k listing statements accompanying footnotes see “index consolidated financial statements” page 52 a2 financial statement schedules schedule ii valuation qualifying accounts financial statement schedules listed page 101 schedules listed omitted applicable required information required set forth therein included item 8 “financial statements supplementary data” notes thereto a3 exhibits following exhibits filed furnished report incorporated reference † represents management contract compensatory plan arrangement filed herewith furnished herewith item 16 form 10k summary none 1 “other” includes allowances acquired business combinations reductions allowance credited expense signatures pursuant requirements securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities indicated february 25 2019 signature title michael c kearney chairman president chief executive officer michael c kearney principal executive officer kyle mcclure senior vice president chief financial officer kyle mcclure principal financial officer darren c miles chief accounting officer vice president tax darren c miles principal accounting officer william b berry supervisory lead director william b berry robert w drummond supervisory director robert w drummond michael e mcmahon supervisory director michael e mcmahon keith mosing supervisory director keith mosing kirkland mosing supervisory director kirkland mosing brent mosing supervisory director brent mosing melanie trent supervisory director melanie trent alexander vriesendorp supervisory director alexander vriesendorpitem 15 exhibits financial statement schedules a1 financial statements consolidated financial statements included part ii item 8 “financial statements supplementary data” form 10k listing statements accompanying footnotes see “index consolidated financial statements” page 56 a2 financial statement schedules schedule ii valuation qualifying accounts financial statement schedules listed page 108 schedules listed omitted applicable required information required set forth therein included item 8 “financial statements supplementary data” notes thereto a3 exhibits following exhibits filed furnished report incorporated reference † represents management contract compensatory plan arrangement filed herewith furnished herewith item 16 form 10k summary none signatures pursuant requirements securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities indicated february 25 2020 signature title michael c kearney chairman president chief executive officer michael c kearney principal executive officer melissa cougle senior vice president chief financial officer melissa cougle principal financial accounting officer william b berry supervisory lead director william b berry robert w drummond supervisory director robert w drummond michael e mcmahon supervisory director michael e mcmahon keith mosing supervisory director keith mosing kirkland mosing supervisory director kirkland mosing brent mosing supervisory director brent mosing melanie trent supervisory director melanie trent alexander vriesendorp supervisory director alexander vriesendorpitem 15 exhibits financial statement schedules a1 financial statements consolidated financial statements included part ii item 8 “financial statements supplementary data” form 10k listing statements accompanying footnotes see “index consolidated financial statements” page 61 a2 financial statement schedules schedule ii valuation qualifying accounts financial statement schedules listed page 110 schedules listed omitted applicable required information required set forth therein included item 8 “financial statements supplementary data” notes thereto a3 exhibits following exhibits filed furnished report incorporated reference 104cover page interactive data file embedded within inline xbrl document † represents management contract compensatory plan arrangement filed herewith furnished herewith item 16 form 10k summary none signatures pursuant requirements securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized byfrank’s international nv registrant datemarch 1 2021bys melissa cougle melissa cougle chief financial officer pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities indicated march 1 2021 signaturetitle michael c kearneychairman president chief executive officer michael c kearneyprincipal executive officer melissa couglesenior vice president chief financial officer melissa cougleprincipal financial accounting officer michael e mcmahonsupervisory lead director michael e mcmahon robert w drummondsupervisory director robert w drummond l millersupervisory director l miller keith mosingsupervisory director keith mosing erich l mosingsupervisory director erich l mosing kirkland mosingsupervisory director kirkland mosing melanie trentsupervisory director melanie trent alexander vriesendorpsupervisory director alexander vriesendorp