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The Netherlands
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98-1107145
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification number)
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Prins Bernhardplein 200
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1097 JB Amsterdam, The Netherlands
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Not Applicable
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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þ
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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TABLE OF CONTENTS
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||
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Page
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PART I. FINANCIAL INFORMATION
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||
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Item 1.
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Financial Statements
|
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|
Consolidated Balance Sheets at September 30, 2014 and December 31, 2013
|
|
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Consolidated Statements of Income for the Three and Nine Months
|
|
|
Ended September 30, 2014 and 2013
|
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Consolidated Statements of Comprehensive Income for the Three and Nine Months
|
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Ended September 30, 2014 and 2013
|
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Consolidated Statements of Stockholders' Equity for the Nine Months
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Ended September 30, 2014 and 2013
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Consolidated Statements of Cash Flows for the Nine Months
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Ended September 30, 2014 and 2013
|
|
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Notes to the Unaudited Consolidated Financial Statements
|
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and
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|
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Results of Operations
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|
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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PART II. OTHER INFORMATION
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||
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Item 1.
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Legal Proceedings
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|
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Item 1A.
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Risk Factors
|
|
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Item 6.
|
Exhibits
|
|
|
|
|
Signatures
|
|
FRANK'S INTERNATIONAL N.V.
|
|||||||
CONSOLIDATED BALANCE SHEETS
|
|||||||
(In thousands, except share data)
|
|||||||
(Unaudited)
|
|||||||
|
|
|
|
||||
|
September 30,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
468,388
|
|
|
$
|
404,947
|
|
Accounts receivables, net
|
368,428
|
|
|
364,817
|
|
||
Inventories
|
210,536
|
|
|
185,589
|
|
||
Other current assets
|
15,727
|
|
|
15,843
|
|
||
Total current assets
|
1,063,079
|
|
|
971,196
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
567,306
|
|
|
511,199
|
|
||
Goodwill and intangible assets, net
|
14,278
|
|
|
14,814
|
|
||
Other assets
|
61,277
|
|
|
63,986
|
|
||
Total assets
|
$
|
1,705,940
|
|
|
$
|
1,561,195
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
322
|
|
|
$
|
376
|
|
Accounts payable
|
16,449
|
|
|
22,254
|
|
||
Deferred revenue
|
77,224
|
|
|
62,610
|
|
||
Accrued and other current liabilities
|
105,168
|
|
|
90,484
|
|
||
Total current liabilities
|
199,163
|
|
|
175,724
|
|
||
|
|
|
|
||||
Deferred tax liabilities
|
14,485
|
|
|
13,114
|
|
||
Other non-current liabilities
|
41,180
|
|
|
38,325
|
|
||
Total liabilities
|
254,828
|
|
|
227,163
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
|
|
|
|
||||
Series A preferred stock, €0.01 par value, 52,976,000 shares authorized,
|
|
|
|
||||
issued and outstanding
|
705
|
|
|
705
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Common stock, €0.01 par value, 745,120,000 shares authorized;
|
|
|
|
||||
154,477,597 issued and 154,272,613 outstanding at 2014 and
|
|
|
|
||||
153,524,000 shares issued and outstanding at 2013
|
2,032
|
|
|
2,019
|
|
||
Additional paid-in capital
|
671,601
|
|
|
642,164
|
|
||
Retained earnings
|
533,886
|
|
|
455,632
|
|
||
Accumulated other comprehensive loss
|
(7,911
|
)
|
|
(2,383
|
)
|
||
Treasury stock (at cost), 204,984 shares at 2014
|
(4,154
|
)
|
|
—
|
|
||
Total stockholders' equity
|
1,195,454
|
|
|
1,097,432
|
|
||
Noncontrolling interest
|
254,953
|
|
|
235,895
|
|
||
Total equity
|
1,450,407
|
|
|
1,333,327
|
|
||
Total liabilities and equity
|
$
|
1,705,940
|
|
|
$
|
1,561,195
|
|
FRANK'S INTERNATIONAL N.V.
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME
|
|||||||||||||||
(In thousands, except per share data)
|
|||||||||||||||
(Unaudited)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Equipment rentals and services
|
$
|
254,047
|
|
|
$
|
228,069
|
|
|
$
|
706,698
|
|
|
$
|
668,582
|
|
Products
|
42,136
|
|
|
42,033
|
|
|
126,914
|
|
|
127,068
|
|
||||
Total revenue
|
296,183
|
|
|
270,102
|
|
|
833,612
|
|
|
795,650
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of revenues, exclusive of depreciation
|
|
|
|
|
|
|
|
||||||||
and amortization
|
|
|
|
|
|
|
|
||||||||
Equipment rentals and services
|
97,919
|
|
|
79,213
|
|
|
271,939
|
|
|
228,851
|
|
||||
Products
|
23,237
|
|
|
31,581
|
|
|
75,527
|
|
|
91,734
|
|
||||
General and administrative expenses
|
65,220
|
|
|
64,104
|
|
|
196,431
|
|
|
160,016
|
|
||||
Depreciation and amortization
|
23,254
|
|
|
19,887
|
|
|
66,342
|
|
|
56,593
|
|
||||
Loss on sale of assets
|
280
|
|
|
124
|
|
|
193
|
|
|
68
|
|
||||
Operating income
|
86,273
|
|
|
75,193
|
|
|
223,180
|
|
|
258,388
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Other income
|
1,483
|
|
|
1,128
|
|
|
6,772
|
|
|
8,535
|
|
||||
Interest income (expense), net
|
(13
|
)
|
|
170
|
|
|
23
|
|
|
(493
|
)
|
||||
Foreign currency gain (loss)
|
(526
|
)
|
|
3,161
|
|
|
(526
|
)
|
|
(2,114
|
)
|
||||
Total other income
|
944
|
|
|
4,459
|
|
|
6,269
|
|
|
5,928
|
|
||||
Income from continuing operations before
|
|
|
|
|
|
|
|
||||||||
income tax expense
|
87,217
|
|
|
79,652
|
|
|
229,449
|
|
|
264,316
|
|
||||
Income tax expense
|
19,777
|
|
|
20,185
|
|
|
51,598
|
|
|
32,569
|
|
||||
Income from continuing operations
|
67,440
|
|
|
59,467
|
|
|
177,851
|
|
|
231,747
|
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
42,635
|
|
||||
Net income
|
67,440
|
|
|
59,467
|
|
|
177,851
|
|
|
274,382
|
|
||||
Net income attributable to noncontrolling interest
|
20,094
|
|
|
18,653
|
|
|
53,426
|
|
|
74,005
|
|
||||
Net income attributable to
|
|
|
|
|
|
|
|
||||||||
Frank's International N.V.
|
$
|
47,346
|
|
|
$
|
40,814
|
|
|
$
|
124,425
|
|
|
$
|
200,377
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.31
|
|
|
$
|
0.30
|
|
|
$
|
0.81
|
|
|
$
|
1.35
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.25
|
|
||||
Total
|
$
|
0.31
|
|
|
$
|
0.30
|
|
|
$
|
0.81
|
|
|
$
|
1.60
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.31
|
|
|
$
|
0.29
|
|
|
$
|
0.80
|
|
|
$
|
1.27
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.24
|
|
||||
Total
|
$
|
0.31
|
|
|
$
|
0.29
|
|
|
$
|
0.80
|
|
|
$
|
1.51
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
153,923
|
|
|
137,024
|
|
|
153,659
|
|
|
125,090
|
|
||||
Diluted
|
207,934
|
|
|
190,435
|
|
|
207,751
|
|
|
178,211
|
|
FRANK'S INTERNATIONAL N.V.
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||||||||||||||
(In thousands)
|
|||||||||||||||
(Unaudited)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
67,440
|
|
|
$
|
59,467
|
|
|
$
|
177,851
|
|
|
$
|
274,382
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
||||||||
adjustments, net of tax
|
(6,260
|
)
|
|
(911
|
)
|
|
(5,369
|
)
|
|
(8,243
|
)
|
||||
Unrealized gain (loss) on marketable
|
|
|
|
|
|
|
|
||||||||
securities, net of tax
|
(1,900
|
)
|
|
1,462
|
|
|
(2,057
|
)
|
|
1,142
|
|
||||
Total other comprehensive income (loss)
|
(8,160
|
)
|
|
551
|
|
|
(7,426
|
)
|
|
(7,101
|
)
|
||||
Comprehensive income
|
59,280
|
|
|
60,018
|
|
|
170,425
|
|
|
267,281
|
|
||||
Less: Comprehensive income attributable to
|
|
|
|
|
|
|
|
||||||||
noncontrolling interest
|
18,007
|
|
|
18,794
|
|
|
51,528
|
|
|
72,184
|
|
||||
Comprehensive income attributable to
|
|
|
|
|
|
|
|
||||||||
Frank's International N.V.
|
$
|
41,273
|
|
|
$
|
41,224
|
|
|
$
|
118,897
|
|
|
$
|
195,097
|
|
FRANK'S INTERNATIONAL N.V.
|
||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Nine Months Ended September 30, 2013
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
Additional
|
|
|
|
Other
|
|
|
|
Non-
|
|
Total
|
|||||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Retained
|
|
Comprehensive
|
|
Treasury
|
|
controlling
|
|
Stockholders'
|
|||||||||||||||||
|
Shares
|
|
Value
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Stock
|
|
Interest
|
|
Equity
|
|||||||||||||||
Balances at December 31, 2012
|
119,024
|
|
|
$
|
1,561
|
|
|
$
|
651
|
|
|
$
|
327,436
|
|
|
$
|
3,254
|
|
|
$
|
—
|
|
|
$
|
114,086
|
|
|
$
|
446,988
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
200,377
|
|
|
—
|
|
|
—
|
|
|
74,005
|
|
|
274,382
|
|
|||||||
Distribution of net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
to Mosing Holdings
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,507
|
)
|
|
—
|
|
|
—
|
|
|
(13,974
|
)
|
|
(54,481
|
)
|
|||||||
Capital contribution by NCI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
equity holders to subsidiary
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,002
|
|
|
3,002
|
|
|||||||
Issuance of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
upon IPO, net of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
offering costs
|
34,500
|
|
|
458
|
|
|
634,239
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,814
|
|
|
711,511
|
|
|||||||
Foreign currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,129
|
)
|
|
—
|
|
|
(2,114
|
)
|
|
(8,243
|
)
|
|||||||
Unrealized gain on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
849
|
|
|
—
|
|
|
293
|
|
|
1,142
|
|
|||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
expense
|
—
|
|
|
—
|
|
|
2,520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,520
|
|
|||||||
Distributions to stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
(78,340
|
)
|
|
—
|
|
|
—
|
|
|
(27,027
|
)
|
|
(105,367
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|||||||
Balances at September 30, 2013
|
153,524
|
|
|
$
|
2,019
|
|
|
$
|
637,464
|
|
|
$
|
408,966
|
|
|
$
|
(2,026
|
)
|
|
$
|
—
|
|
|
$
|
225,085
|
|
|
$
|
1,271,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Nine Months Ended September 30, 2014
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
Additional
|
|
|
|
Other
|
|
|
|
Non-
|
|
Total
|
|||||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Retained
|
|
Comprehensive
|
|
Treasury
|
|
controlling
|
|
Stockholders'
|
|||||||||||||||||
|
Shares
|
|
Value
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Stock
|
|
Interest
|
|
Equity
|
|||||||||||||||
Balances at December 31, 2013
|
153,524
|
|
|
$
|
2,019
|
|
|
$
|
642,164
|
|
|
$
|
455,632
|
|
|
$
|
(2,383
|
)
|
|
$
|
—
|
|
|
$
|
235,895
|
|
|
$
|
1,333,327
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
124,425
|
|
|
—
|
|
|
—
|
|
|
53,426
|
|
|
177,851
|
|
|||||||
Foreign currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,996
|
)
|
|
—
|
|
|
(1,373
|
)
|
|
(5,369
|
)
|
|||||||
Unrealized loss on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,532
|
)
|
|
—
|
|
|
(525
|
)
|
|
(2,057
|
)
|
|||||||
Stock-based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
compensation expense
|
—
|
|
|
—
|
|
|
29,450
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,450
|
|
|||||||
Distribution to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,470
|
)
|
|
(32,470
|
)
|
|||||||
Common stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
($0.30 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,170
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,170
|
)
|
|||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
Common shares issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
upon vesting of restricted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
stock units
|
954
|
|
|
13
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Treasury shares withheld
|
(205
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,154
|
)
|
|
—
|
|
|
(4,154
|
)
|
|||||||
Balances at September 30, 2014
|
154,273
|
|
|
$
|
2,032
|
|
|
$
|
671,601
|
|
|
$
|
533,886
|
|
|
$
|
(7,911
|
)
|
|
$
|
(4,154
|
)
|
|
$
|
254,953
|
|
|
$
|
1,450,407
|
|
FRANK'S INTERNATIONAL N.V.
|
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(In thousands)
|
|||||||
(Unaudited)
|
|||||||
|
|
|
|
||||
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2014
|
|
2013
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
177,851
|
|
|
$
|
274,382
|
|
Adjustments to reconcile net income to cash provided by operating activities
|
|
|
|
||||
Depreciation and amortization
|
66,342
|
|
|
56,738
|
|
||
Stock-based compensation expense
|
29,450
|
|
|
2,520
|
|
||
Amortization of deferred financing costs
|
235
|
|
|
43
|
|
||
Venezuelan currency devaluation charge
|
—
|
|
|
1,755
|
|
||
Deferred tax provision
|
1,966
|
|
|
(2,806
|
)
|
||
Provision for (recovery of) bad debts
|
(113
|
)
|
|
11,786
|
|
||
(Gain) loss on sale of assets
|
193
|
|
|
(39,561
|
)
|
||
Changes in fair value of marketable securities
|
(723
|
)
|
|
(2,381
|
)
|
||
Increase in value of life insurance policies
|
—
|
|
|
(815
|
)
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Accounts receivable
|
(5,779
|
)
|
|
(57,904
|
)
|
||
Inventories
|
(37,890
|
)
|
|
(63,901
|
)
|
||
Other current assets
|
(71
|
)
|
|
1,738
|
|
||
Other assets
|
2,215
|
|
|
(1,747
|
)
|
||
Accounts payable
|
2,907
|
|
|
(997
|
)
|
||
Deferred revenue
|
14,615
|
|
|
41,880
|
|
||
Accrued expenses and other current liabilities
|
18,671
|
|
|
13,668
|
|
||
Other noncurrent liabilities
|
4,058
|
|
|
5,759
|
|
||
Net cash provided by operating activities
|
273,927
|
|
|
240,157
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Purchases of property, plant and equipment
|
(124,187
|
)
|
|
(126,763
|
)
|
||
Proceeds from sale of assets and equipment
|
653
|
|
|
50,471
|
|
||
Purchase of marketable securities
|
(1,539
|
)
|
|
(1,187
|
)
|
||
Premiums on life insurance policies
|
—
|
|
|
(2,142
|
)
|
||
Net cash used in investing activities
|
(125,073
|
)
|
|
(79,621
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from initial public offering, net of offering costs
|
—
|
|
|
711,511
|
|
||
Repayments of borrowings
|
(54
|
)
|
|
(471,864
|
)
|
||
Proceeds from borrowings
|
—
|
|
|
170
|
|
||
Deferred financing costs
|
—
|
|
|
(972
|
)
|
||
Dividends paid on common stock
|
(46,170
|
)
|
|
—
|
|
||
Dividends paid on preferred stock
|
(1
|
)
|
|
—
|
|
||
Distribution to noncontrolling interest
|
(32,470
|
)
|
|
—
|
|
||
Treasury shares withheld
|
(4,154
|
)
|
|
—
|
|
||
Distributions to stockholders
|
—
|
|
|
(105,367
|
)
|
||
Net cash provided by (used in) financing activities
|
(82,849
|
)
|
|
133,478
|
|
||
Effect of exchange rate changes on cash due to Venezuelan devaluation
|
—
|
|
|
575
|
|
||
Effect of exchange rate changes on cash
|
(2,564
|
)
|
|
1,988
|
|
||
Net increase in cash
|
63,441
|
|
|
296,577
|
|
||
Cash and cash equivalents at beginning of period
|
404,947
|
|
|
152,945
|
|
||
Cash and cash equivalents at end of period
|
$
|
468,388
|
|
|
$
|
449,522
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income
|
$
|
67,440
|
|
|
$
|
59,467
|
|
|
$
|
177,851
|
|
|
$
|
274,382
|
|
Add: Provision for U.S. income taxes of FINV (1)
|
11,733
|
|
|
13,838
|
|
|
31,093
|
|
|
13,838
|
|
||||
Less: (Income) loss of FINV (2)
|
(735
|
)
|
|
(583
|
)
|
|
(555
|
)
|
|
297
|
|
||||
Net income subject to noncontrolling interest
|
78,438
|
|
|
72,722
|
|
|
208,389
|
|
|
288,517
|
|
||||
Noncontrolling interest percentage (3)
|
25.6%
|
|
|
25.7%
|
|
|
25.6%
|
|
|
25.7%
|
|
||||
Net income attributable to noncontrolling interest
|
$
|
20,094
|
|
|
$
|
18,653
|
|
|
$
|
53,426
|
|
|
$
|
74,005
|
|
|
|
|
(1)
|
Represents income tax expense attributable to our proportionate share of the U.S. operations of our partnership interests in FICV.
|
(2)
|
Represents results of operations for entities outside of FICV.
|
(3)
|
Represents the economic interest in FICV held by Mosing Holdings. This percentage will change as additional shares of FINV common stock are issued.
|
|
September 30,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Trade accounts receivable, net of allowance
|
|
|
|
||||
of $13,091 and $13,614, respectively
|
$
|
279,599
|
|
|
$
|
232,409
|
|
Unbilled receivables
|
65,764
|
|
|
105,824
|
|
||
Taxes receivable
|
17,262
|
|
|
20,075
|
|
||
Affiliated (1)
|
3,333
|
|
|
3,921
|
|
||
Other receivables
|
2,470
|
|
|
2,588
|
|
||
Total accounts receivable
|
$
|
368,428
|
|
|
$
|
364,817
|
|
|
|
|
(1)
|
Amounts represent expenditures on behalf of non-consolidated affiliates and receivables for aircraft charter income.
|
|
September 30,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Pipe and connectors
|
$
|
190,240
|
|
|
$
|
168,639
|
|
Finished goods
|
4,518
|
|
|
4,114
|
|
||
Work in progress
|
6,108
|
|
|
2,284
|
|
||
Raw materials, components and supplies
|
9,670
|
|
|
10,552
|
|
||
Total inventories
|
$
|
210,536
|
|
|
$
|
185,589
|
|
|
Estimated
Useful Lives
in Years
|
|
September 30,
2014 |
|
December 31,
2013 |
|||||
Land and land improvements (1)
|
8-15
|
|
|
$
|
22,532
|
|
|
$
|
22,460
|
|
Buildings and improvements
|
39
|
|
|
63,745
|
|
|
63,412
|
|
||
Rental machinery and equipment
|
7
|
|
|
735,091
|
|
|
669,729
|
|
||
Machinery and equipment - other
|
7
|
|
|
68,275
|
|
|
55,306
|
|
||
Furniture, fixtures and computers
|
5
|
|
|
18,875
|
|
|
18,265
|
|
||
Automobiles and other vehicles
|
5
|
|
|
37,534
|
|
|
35,649
|
|
||
Aircraft
|
7
|
|
|
14,868
|
|
|
14,868
|
|
||
Leasehold improvements
|
7, or lease term if shorter
|
|
|
6,593
|
|
|
5,729
|
|
||
Construction in progress - machinery
|
|
|
|
|
|
|||||
and equipment and buildings
|
—
|
|
|
114,066
|
|
|
88,801
|
|
||
|
|
|
1,081,579
|
|
|
974,219
|
|
|||
Less: Accumulated depreciation
|
|
|
(514,273
|
)
|
|
(463,020
|
)
|
|||
Total property, plant and equipment, net
|
|
|
$
|
567,306
|
|
|
$
|
511,199
|
|
|
September 30,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Marketable securities held in Rabbi Trust (1)
|
$
|
44,446
|
|
|
$
|
42,184
|
|
Deferred tax asset
|
6,960
|
|
|
7,391
|
|
||
Deposits
|
2,837
|
|
|
3,132
|
|
||
Other
|
7,034
|
|
|
11,279
|
|
||
Total other assets
|
$
|
61,277
|
|
|
$
|
63,986
|
|
|
|
|
(1)
|
See Note 10 – Fair Value Measurements
|
|
September 30,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
|
|
|
|
||||
Accrued compensation
|
$
|
27,571
|
|
|
$
|
26,252
|
|
Accrued property and other taxes
|
36,181
|
|
|
23,018
|
|
||
Income taxes
|
3,127
|
|
|
2,870
|
|
||
Accrued inventory
|
3,784
|
|
|
5,419
|
|
||
Accrued capital expenditures
|
2,645
|
|
|
4,188
|
|
||
Accrued medical claims
|
2,749
|
|
|
2,779
|
|
||
Accrued purchase orders
|
7,275
|
|
|
5,632
|
|
||
Other
|
21,836
|
|
|
20,326
|
|
||
Total accrued and other current liabilities
|
$
|
105,168
|
|
|
$
|
90,484
|
|
•
|
Level 1: Unadjusted, quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2: Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly for substantially the full term of the asset or liability.
|
•
|
Level 3: Significant, unobservable inputs for use when little or no market data exists, requiring a significant degree of judgment.
|
|
Quoted Prices
in Active
Markets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
|
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
||||||||
September 30, 2014
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Marketable securities - deferred
|
|
|
|
|
|
|
|
||||||||
compensation plan
|
$
|
—
|
|
|
$
|
44,446
|
|
|
$
|
—
|
|
|
$
|
44,446
|
|
Marketable securities - other
|
4,980
|
|
|
—
|
|
|
—
|
|
|
4,980
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Marketable securities - deferred
|
|
|
|
|
|
|
|
||||||||
compensation plan
|
—
|
|
|
41,180
|
|
|
—
|
|
|
41,180
|
|
December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Marketable securities - deferred
|
|
|
|
|
|
|
|
||||||||
compensation plan
|
$
|
—
|
|
|
$
|
42,184
|
|
|
$
|
—
|
|
|
$
|
42,184
|
|
Marketable securities - other
|
7,038
|
|
|
—
|
|
|
—
|
|
|
7,038
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Marketable securities - deferred
|
|
|
|
|
|
|
|
||||||||
compensation plan
|
—
|
|
|
37,980
|
|
|
—
|
|
|
37,980
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Numerator - Basic
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
67,440
|
|
|
$
|
59,467
|
|
|
$
|
177,851
|
|
|
$
|
231,747
|
|
Less: Net income attributable to
|
|
|
|
|
|
|
|
||||||||
noncontrolling interest
|
(20,094
|
)
|
|
(18,653
|
)
|
|
(53,426
|
)
|
|
(74,005
|
)
|
||||
Discontinued operations attributable
|
|
|
|
|
|
|
|
||||||||
to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
10,935
|
|
||||
Less: Preferred stock dividends
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Income from continuing operations
|
|
|
|
|
|
|
|
||||||||
attributable to common shareholders
|
47,346
|
|
|
40,814
|
|
|
124,424
|
|
|
168,677
|
|
||||
Income from discontinued operations
|
|
|
|
|
|
|
|
||||||||
attributable to FINV
|
—
|
|
|
—
|
|
|
—
|
|
|
31,700
|
|
||||
Net income available to common shareholders
|
$
|
47,346
|
|
|
$
|
40,814
|
|
|
$
|
124,424
|
|
|
$
|
200,377
|
|
|
|
|
|
|
|
|
|
||||||||
Numerator - Diluted
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
|
|
|
|
|
|
||||||||
attributable to common shareholders
|
$
|
47,346
|
|
|
$
|
40,814
|
|
|
$
|
124,424
|
|
|
$
|
168,677
|
|
Add: Exchange of noncontrolling interest
|
|
|
|
|
|
|
|
||||||||
for common stock (1)
|
16,335
|
|
|
13,893
|
|
|
42,671
|
|
|
58,310
|
|
||||
Add: Preferred stock dividends
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Diluted income from continuing operations
|
|
|
|
|
|
|
|
||||||||
attributable to common shareholders
|
63,681
|
|
|
54,707
|
|
|
167,096
|
|
|
226,987
|
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
42,635
|
|
||||
Dilutive net income available
|
|
|
|
|
|
|
|
||||||||
to common shareholders
|
$
|
63,681
|
|
|
$
|
54,707
|
|
|
$
|
167,096
|
|
|
$
|
269,622
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares
|
153,923
|
|
|
137,024
|
|
|
153,659
|
|
|
125,090
|
|
||||
Exchange of noncontrolling interest
|
|
|
|
|
|
|
|
||||||||
for common stock (Note 11)
|
52,976
|
|
|
52,976
|
|
|
52,976
|
|
|
52,976
|
|
||||
Restricted stock units
|
1,035
|
|
|
435
|
|
|
1,116
|
|
|
145
|
|
||||
Diluted weighted average common shares
|
207,934
|
|
|
190,435
|
|
|
207,751
|
|
|
178,211
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.31
|
|
|
$
|
0.30
|
|
|
$
|
0.81
|
|
|
$
|
1.35
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.25
|
|
||||
Total
|
$
|
0.31
|
|
|
$
|
0.30
|
|
|
$
|
0.81
|
|
|
$
|
1.60
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.31
|
|
|
$
|
0.29
|
|
|
$
|
0.80
|
|
|
$
|
1.27
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.24
|
|
||||
Total
|
$
|
0.31
|
|
|
$
|
0.29
|
|
|
$
|
0.80
|
|
|
$
|
1.51
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1)
|
Adjusted for the additional tax expense upon the assumed conversion of the Preferred Stock
|
|
$
|
3,759
|
|
|
$
|
4,760
|
|
|
$
|
10,755
|
|
|
$
|
4,760
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Segment Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
International Services
|
$
|
65,359
|
|
|
$
|
48,752
|
|
|
$
|
165,260
|
|
|
$
|
153,134
|
|
U.S. Services
|
45,796
|
|
|
47,215
|
|
|
132,643
|
|
|
149,494
|
|
||||
Tubular Sales
|
9,343
|
|
|
5,338
|
|
|
28,028
|
|
|
25,893
|
|
||||
Corporate and other
|
6
|
|
|
(33
|
)
|
|
6
|
|
|
3
|
|
||||
Adjusted EBITDA Total
|
120,504
|
|
|
101,272
|
|
|
325,937
|
|
|
328,524
|
|
||||
Interest income (expense), net
|
(13
|
)
|
|
170
|
|
|
23
|
|
|
(493
|
)
|
||||
Income tax expense
|
(19,777
|
)
|
|
(20,185
|
)
|
|
(51,598
|
)
|
|
(32,569
|
)
|
||||
Depreciation and amortization
|
(23,254
|
)
|
|
(19,887
|
)
|
|
(66,342
|
)
|
|
(56,593
|
)
|
||||
Loss on sale of assets
|
(280
|
)
|
|
(124
|
)
|
|
(193
|
)
|
|
(68
|
)
|
||||
Foreign currency gain (loss)
|
(526
|
)
|
|
3,161
|
|
|
(526
|
)
|
|
(2,114
|
)
|
||||
Stock-based compensation expense
|
(9,214
|
)
|
|
(2,520
|
)
|
|
(29,450
|
)
|
|
(2,520
|
)
|
||||
IPO transaction-related costs
|
—
|
|
|
(2,420
|
)
|
|
—
|
|
|
(2,420
|
)
|
||||
Income from continuing operations
|
$
|
67,440
|
|
|
$
|
59,467
|
|
|
$
|
177,851
|
|
|
$
|
231,747
|
|
|
International
Services
|
|
U.S.
Services
|
|
Tubular Sales
|
|
Corporate
and Other
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue from external customers
|
$
|
143,330
|
|
|
$
|
112,149
|
|
|
$
|
40,704
|
|
|
$
|
—
|
|
|
$
|
296,183
|
|
Inter-segment revenues
|
501
|
|
|
6,209
|
|
|
15,097
|
|
|
(21,807
|
)
|
|
—
|
|
|||||
Adjusted EBITDA
|
65,359
|
|
|
45,796
|
|
|
9,343
|
|
|
6
|
|
|
120,504
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue from external customers
|
$
|
121,680
|
|
|
$
|
108,126
|
|
|
$
|
40,296
|
|
|
$
|
—
|
|
|
$
|
270,102
|
|
Inter-segment revenues
|
1,253
|
|
|
5,122
|
|
|
17,775
|
|
|
(24,150
|
)
|
|
—
|
|
|||||
Adjusted EBITDA
|
48,752
|
|
|
47,215
|
|
|
5,338
|
|
|
(33
|
)
|
|
101,272
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue from external customers
|
$
|
391,371
|
|
|
$
|
321,468
|
|
|
$
|
120,773
|
|
|
$
|
—
|
|
|
$
|
833,612
|
|
Inter-segment revenues
|
873
|
|
|
16,933
|
|
|
50,767
|
|
|
(68,573
|
)
|
|
—
|
|
|||||
Adjusted EBITDA
|
165,260
|
|
|
132,643
|
|
|
28,028
|
|
|
6
|
|
|
325,937
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue from external customers
|
$
|
353,041
|
|
|
$
|
321,295
|
|
|
$
|
121,314
|
|
|
$
|
—
|
|
|
$
|
795,650
|
|
Inter-segment revenues
|
2,700
|
|
|
15,452
|
|
|
53,455
|
|
|
(71,607
|
)
|
|
—
|
|
|||||
Adjusted EBITDA
|
153,134
|
|
|
149,494
|
|
|
25,893
|
|
|
3
|
|
|
328,524
|
|
•
|
our business strategy and prospects for growth;
|
•
|
our cash flows and liquidity;
|
•
|
our financial strategy, budget, projections and operating results;
|
•
|
the amount, nature and timing of capital expenditures;
|
•
|
the availability and terms of capital;
|
•
|
competition and government regulations; and
|
•
|
general economic conditions.
|
•
|
the level of activity in the oil and gas industry;
|
•
|
the volatility of oil and gas prices;
|
•
|
unique risks associated with our offshore operations;
|
•
|
political, economic and regulatory uncertainties in our international operations;
|
•
|
our ability to develop new technologies and products;
|
•
|
our ability to protect our intellectual property rights;
|
•
|
our ability to employ and retain skilled and qualified workers;
|
•
|
the level of competition in our industry;
|
•
|
operational safety laws and regulations; and
|
•
|
weather conditions and natural disasters.
|
•
|
International Services.
We currently provide our services in approximately 60 countries on six continents. Our customers in these international markets are primarily large exploration and production companies, including integrated oil and gas companies and national oil and gas companies.
|
•
|
U.S. Services.
We service customers in the deep water areas of the U.S. Gulf of Mexico. In addition, we have a significant presence in almost all of the active onshore oil and gas drilling regions in the U.S., including the Permian Basin, Bakken Shale, Barnett Shale, Eagle Ford Shale, Haynesville Shale, Marcellus Shale and Utica Shale.
|
•
|
Tubular Sales.
We design and manufacture certain products that we sell directly to external customers, including large outside diameter ("OD") pipe connectors and casing attachments. We also provide specialized fabrication and welding services in support of deep water projects in the U.S. Gulf of Mexico, including drilling and production risers, flowlines and pipeline end terminations, as well as long length tubulars (up to 300 feet in length) for use as caissons or pilings. In addition, we distribute large OD pipe manufactured by third parties that we have equipped with weld-on end connections. This segment also designs and manufactures proprietary equipment for use in our International and U.S. Services segments.
|
•
|
personnel rates for our specially trained employees who perform tubular services for our customers; and
|
•
|
rental rates for the suite of products and equipment that our employees use to perform tubular services.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
67,440
|
|
|
$
|
59,467
|
|
|
$
|
177,851
|
|
|
$
|
231,747
|
|
Interest (income) expense, net
|
13
|
|
|
(170
|
)
|
|
(23
|
)
|
|
493
|
|
||||
Depreciation and amortization
|
23,254
|
|
|
19,887
|
|
|
66,342
|
|
|
56,593
|
|
||||
Income tax expense
|
19,777
|
|
|
20,185
|
|
|
51,598
|
|
|
32,569
|
|
||||
Loss on sale of assets
|
280
|
|
|
124
|
|
|
193
|
|
|
68
|
|
||||
Foreign currency (gain) loss
|
526
|
|
|
(3,161
|
)
|
|
526
|
|
|
2,114
|
|
||||
Stock-based compensation expense
|
9,214
|
|
|
2,520
|
|
|
29,450
|
|
|
2,520
|
|
||||
IPO transaction-related costs
|
—
|
|
|
2,420
|
|
|
—
|
|
|
2,420
|
|
||||
Adjusted EBITDA
|
$
|
120,504
|
|
|
$
|
101,272
|
|
|
$
|
325,937
|
|
|
$
|
328,524
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Equipment rentals and services
|
$
|
254,047
|
|
|
$
|
228,069
|
|
|
$
|
706,698
|
|
|
$
|
668,582
|
|
Products
(1)
|
42,136
|
|
|
42,033
|
|
|
126,914
|
|
|
127,068
|
|
||||
Total revenue
|
296,183
|
|
|
270,102
|
|
|
833,612
|
|
|
795,650
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of revenues, exclusive of
|
|
|
|
|
|
|
|
||||||||
depreciation and amortization
|
|
|
|
|
|
|
|
||||||||
Equipment rentals and services
|
97,919
|
|
|
79,213
|
|
|
271,939
|
|
|
228,851
|
|
||||
Products
|
23,237
|
|
|
31,581
|
|
|
75,527
|
|
|
91,734
|
|
||||
General and administrative expenses
|
65,220
|
|
|
64,104
|
|
|
196,431
|
|
|
160,016
|
|
||||
Depreciation and amortization
|
23,254
|
|
|
19,887
|
|
|
66,342
|
|
|
56,593
|
|
||||
Loss on sale of assets
|
280
|
|
|
124
|
|
|
193
|
|
|
68
|
|
||||
Operating income
|
86,273
|
|
|
75,193
|
|
|
223,180
|
|
|
258,388
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Other income
|
1,483
|
|
|
1,128
|
|
|
6,772
|
|
|
8,535
|
|
||||
Interest income (expense), net
|
(13
|
)
|
|
170
|
|
|
23
|
|
|
(493
|
)
|
||||
Foreign currency gain (loss)
|
(526
|
)
|
|
3,161
|
|
|
(526
|
)
|
|
(2,114
|
)
|
||||
Total other income (expense)
|
944
|
|
|
4,459
|
|
|
6,269
|
|
|
5,928
|
|
||||
Income from continuing operations
|
|
|
|
|
|
|
|
||||||||
before income tax expense
|
87,217
|
|
|
79,652
|
|
|
229,449
|
|
|
264,316
|
|
||||
Income tax expense
|
19,777
|
|
|
20,185
|
|
|
51,598
|
|
|
32,569
|
|
||||
Income from continuing operations
|
67,440
|
|
|
59,467
|
|
|
177,851
|
|
|
231,747
|
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
42,635
|
|
||||
Net income
|
67,440
|
|
|
59,467
|
|
|
177,851
|
|
|
274,382
|
|
||||
Less: Net income attributable to
|
|
|
|
|
|
|
|
||||||||
noncontrolling interest
|
20,094
|
|
|
18,653
|
|
|
53,426
|
|
|
74,005
|
|
||||
Net income attributable to
|
|
|
|
|
|
|
|
||||||||
Frank's International N.V.
|
$
|
47,346
|
|
|
$
|
40,814
|
|
|
$
|
124,425
|
|
|
$
|
200,377
|
|
|
|
|
(1)
|
Consolidated products revenue includes a small amount of revenues attributable to the U.S. Services and International Services segments.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
International Services
|
$
|
143,831
|
|
|
$
|
122,933
|
|
|
$
|
392,244
|
|
|
$
|
355,741
|
|
U.S. Services
|
118,358
|
|
|
113,248
|
|
|
338,401
|
|
|
336,747
|
|
||||
Tubular Sales
|
55,801
|
|
|
58,071
|
|
|
171,540
|
|
|
174,769
|
|
||||
Intersegment sales
|
(21,807
|
)
|
|
(24,150
|
)
|
|
(68,573
|
)
|
|
(71,607
|
)
|
||||
Total
|
$
|
296,183
|
|
|
$
|
270,102
|
|
|
$
|
833,612
|
|
|
$
|
795,650
|
|
|
|
|
|
|
|
|
|
||||||||
Segment Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
International Services
|
$
|
65,359
|
|
|
$
|
48,752
|
|
|
$
|
165,260
|
|
|
$
|
153,134
|
|
U.S. Services
|
45,796
|
|
|
47,215
|
|
|
132,643
|
|
|
149,494
|
|
||||
Tubular Sales
|
9,343
|
|
|
5,338
|
|
|
28,028
|
|
|
25,893
|
|
||||
Corporate and other (1)
|
6
|
|
|
(33
|
)
|
|
6
|
|
|
3
|
|
||||
Adjusted EBITDA Total
|
120,504
|
|
|
101,272
|
|
|
325,937
|
|
|
328,524
|
|
||||
Interest income (expense), net
|
(13
|
)
|
|
170
|
|
|
23
|
|
|
(493
|
)
|
||||
Income tax expense
|
(19,777
|
)
|
|
(20,185
|
)
|
|
(51,598
|
)
|
|
(32,569
|
)
|
||||
Depreciation and amortization
|
(23,254
|
)
|
|
(19,887
|
)
|
|
(66,342
|
)
|
|
(56,593
|
)
|
||||
Loss on sale of assets
|
(280
|
)
|
|
(124
|
)
|
|
(193
|
)
|
|
(68
|
)
|
||||
Foreign currency gain (loss)
|
(526
|
)
|
|
3,161
|
|
|
(526
|
)
|
|
(2,114
|
)
|
||||
Stock-based compensation expense
|
(9,214
|
)
|
|
(2,520
|
)
|
|
(29,450
|
)
|
|
(2,520
|
)
|
||||
IPO transaction-related costs
|
—
|
|
|
(2,420
|
)
|
|
—
|
|
|
(2,420
|
)
|
||||
Income from continuing operations
|
$
|
67,440
|
|
|
$
|
59,467
|
|
|
$
|
177,851
|
|
|
$
|
231,747
|
|
|
|
|
(1)
|
Corporate and other represents amounts not directly associated with an operating segment.
|
|
|
Nine Months Ended
|
|
||||||
|
|
September 30,
|
|
||||||
|
|
2014
|
|
2013
|
|
||||
|
Operating activities
|
$
|
273,927
|
|
|
$
|
240,157
|
|
|
|
Investing activities
|
(125,073
|
)
|
|
(79,621
|
)
|
|
||
|
Financing activities
|
(82,849
|
)
|
|
133,478
|
|
|
||
|
|
66,005
|
|
|
294,014
|
|
|
||
|
Effect of exchange rate changes on cash activities
|
(2,564
|
)
|
|
2,563
|
|
|
||
|
Increase in cash and cash equivalents
|
$
|
63,441
|
|
|
$
|
296,577
|
|
|
(a)
|
Evaluation of Disclosure Controls and Procedures.
|
(b)
|
Change in Internal Control Over Financial Reporting.
|
|
|
|
FRANK'S INTERNATIONAL N.V.
|
|
|
|
|
Date: November 7, 2014
|
|
By:
|
/s/ John W. Sinders
|
|
|
|
John W. Sinders
|
|
|
|
Executive Vice President, Administration and
|
|
|
|
Interim Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
3.1
|
Deed of Amendment to Articles of Association of Frank's International N.V., dated May 14, 2014 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-36053), filed on May 16, 2014).
|
10.1
|
Separation Agreement, dated as of July 14, 2014, by and between Frank's International, LLC and Mark Margavio (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36053), filed on July 15, 2014).
|
10.2
|
Employment Agreement dated as of October 30, 2014 by and between Frank’s International N.V., Frank’s International, LLC, and Donald Keith Mosing (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36053), filed on November 5, 2014).
|
*10.3
|
Second Amendment to Frank's International N.V. Employee Stock Purchase Plan effective as of November 5, 2014.
|
*10.4
|
First Amendment to the Frank's International N.V. 2013 Long-Term Incentive Plan Restricted Stock Unit Agreement (Employee Form).
|
*10.5
|
Amendment No. 6 to the Limited Partnership Agreement of Frank's International C.V., dated August 14, 2014.
|
*31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14 (a) under the Securities Exchange Act of 1934.
|
*31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
**32.1
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
|
**32.2
|
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
|
*101.INS
|
XBRL Instance Document.
|
*101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
*101.CAL
|
XBRL Taxonomy Calculation Linkbase Document.
|
*101.DEF
|
XBRL Taxonomy Definition Linkbase Document.
|
*101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
*101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
1.
|
Amendment to Section 3
. The following language shall be added directly to the end of Section 3(c) of the Agreement:
|
2.
|
Remainder of Agreement
. Except as expressly provided herein, the Agreement remains in full force and effect.
|
(1)
|
Frank’s International Management B.V.
, a private limited liability company organized and existing under the laws of the Netherlands, having its corporate seat in Amsterdam, The Netherlands, with address Prins Bernhardplein 200, 1097 JB Amsterdam, The Netherlands, registered with the trade register under number 50802275 (“FIM”);
|
(2)
|
Frank’s International LP B.V.
, a private limited liability company organized and existing under the laws of the Netherlands, having its corporate seat in Amsterdam, The Netherlands, with address Prins Bernhardplein 200, 1097 JB Amsterdam, The Netherlands, registered with the trade register under number 50802070 (“FILP”);
|
(3)
|
Mosing Holdings, Inc.
, a corporation established under the laws of the state of Delaware, United States of America, with its registered office at 10260 Westheimer Rd, Houston, Texas 77042, United States of America (“MH”),
|
(A)
|
By agreement (the “Formation Agreement”) dated the 29th day of July, 2013 (the “Formation Date”), FIM and FILP formed and entered into a limited partnership under the laws of the Netherlands (“
commanditaire vennootschap”
), hereinafter referred to as the “C.V.”, for the purpose of participating in and financing of other companies.
|
(B)
|
By agreement (the “Amendment Agreement No. 1”) dated the first day of August, 2013 (the “Amendment 1 Date”), the Parties have recorded:
|
-
|
an update of certain provisions of the partnership agreement governing the C.V.
|
(C)
|
By agreement (the “Amendment Agreement No. 2”) dated the 8th day of August, 2013 (the “Amendment 2 Date”), the Parties have recorded:
|
-
|
an update of certain provisions of the partnership agreement governing the C.V.
|
(D)
|
By agreement (the "Amendment Agreement No. 3") dated the 14th day of August, 2013 (the “Amendment 3 Date”), the Parties have recorded:
|
-
|
an update of certain provisions of the partnership agreement governing the C.V.
|
(E)
|
By agreement (the "Amendment Agreement No. 4"), dated the 14th day of August, 2013 (the “Amendment 4 Date”) the Parties have recorded:
|
-
|
an update of certain provisions of the partnership agreement governing the C.V.
|
(F)
|
By agreement (the "Amendment Agreement No. 5"), dated the 14th day of October, 2013 (the “Amendment 5 Date”) the Parties have recorded:
|
-
|
an update of certain provisions of the partnership agreement governing the C.V.
|
(G)
|
By executing this Amendment Agreement No. 6, the Parties wish to record:
|
-
|
an update of certain provisions of the partnership agreement governing the C.V. as currently contained in Amendment Agreement No. 5.
|
I.1
|
Contribution
|
I.1.1
|
Pursuant to the vesting of restricted stock units, Frank's International N.V. ("FINV") has issued 953,597 shares of common stock in its capital, each with a nominal value of one eurocent (EUR 0.01), for the benefit of employees, officers and other service providers of its group. Under article 4.5.b of the partnership agreement governing the C.V., as contained in Amendment Agreement No. 5, for purposes of determining Percentage Interests and for purposes of maintaining the Capital Accounts, (i) the C.V. shall be treated as having made a cash payment to the employee or other service provider in an amount equal to the value of the FINV Common Shares issued, (ii) the employee or other service provider shall be treated as having purchased the FINV Common Shares for cash equal to the value of such FINV Common Shares from FINV, and (iii) FINV shall be treated as contributing such cash (through FILP and FIM) to the C.V.
|
I.1.2
|
As a consequence of the above, as the Amendment 6 Date, the Partners will hold the interest percentages in the C.V. as stated in Chapter II article 4.4. below.
|
I.1.3
|
In connection with the frequency at which restricted stock units issued by FINV may vest in the future and therefore the frequency at which FINV may need to issue shares, the Partners agree that they shall at least once per year (i) grant their consent in advance to changes in the Percentage Interest of FILP and MH resulting from said issues of shares up to the relevant number of shares as anticipated by FINV; and (ii) formally amend the limited partnership agreement of the C.V. in order to confirm the changes in the Percentage Interest of FILP and MH during the past year, it being understood that the general partner may determine to have the limited partnership agreement of the C.V. formally amended at any time he deems necessary.
|
I.2
|
Consent / Amendment partnership agreement
|
I.2.1
|
By signing this Amendment Agreement No. 6, the Parties confirm their prior consent to the additional capital contributions by FILP to the C.V.
|
I.2.2
|
FIM, FILP and MH hereby confirm for the avoidance of doubt that they continue the C.V. and wish to update the partnership agreement governing the C.V., as provided in this Amendment Agreement No. 6.
|
II.
|
Updated and restated complete text of the partnership agreement
|
1.
|
Definitions
|
“C.V.”:
|
Frank’s International C.V., a limited partnership established under Dutch law as described in Article 2 of this Agreement;
|
“FINV”
|
Frank’s International N.V., a limited liability company organized and existing under the laws of the Netherlands, having its corporate seat in Amsterdam, The Netherlands, with address Prins Bernhardplein 200, 1097 JB Amsterdam, The Netherlands, registered with the trade register under number 34241787;
|
“FINV A Shares”:
|
Shares of Series A preferred stock in the capital of FINV;
|
“FINV Common Shares”:
|
Shares of Common stock in the capital of FINV;
|
“Formation Date”:
|
July 29, 2013;
|
“General Partner”:
|
- FIM;
|
“Limited Partner(s)”:
|
- FILP;
|
“Lower-tier Partners”:
|
has the meaning ascribed to it in Article 12.4.
|
“Managing Partner”:
|
the General Partner entrusted with the management of the C.V.;
|
“Partners”:
|
the General Partner and the Limited Partner(s), or in singular any one of them;
|
2.
|
Establishment of limited partnership
|
2.1
|
FIM, as General Partner, and FILP, as Limited Partner, have established the C.V. with effect as from the Formation Date. As from the Amendment 3 Date, MH has been admitted as Limited Partner.
|
2.2
|
The C.V.’s name is Frank’s International C.V. It has its partnership’s seat in Amsterdam, and its registered office at the principal offices of the Managing Partner.
|
2.3
|
The objects for which the C.V. is established are to engage in any lawful act or activity for which a limited partnership may be organized under applicable law. The C.V. may engage in any and all activities necessary, desirable or incidental to the accomplishment of the foregoing, including:
|
a.
|
to incorporate, participate in, conduct the management of and take any other financial interest in other companies and enterprises;
|
b.
|
to render administrative, technical, financial, economic or managerial services to other companies, persons or enterprises;
|
c.
|
to acquire, dispose of, manage and exploit real and personal property, including patents, marks, licenses, permits and other industrial property rights;
|
d.
|
to borrow and/or lend moneys, act as surety or guarantor in any other manner, and bind itself jointly and severally or otherwise in addition to or on behalf of others,
|
2.4
|
Subject to the provisions of this Agreement and except as permitted by applicable law, (i) the Managing Partner acting for and on behalf of the C.V. may enter into and perform any and all documents, agreements and instruments, all without any further act, vote or approval of any other Partner, and (ii) the Managing Partner may authorize any Person (other than a Limited Partner) to enter into and perform any document, agreement or instrument on behalf of the C.V.
|
2.5
|
The C.V. shall have (i) no less than one Limited Partner and (ii) one General Partner.
|
3.
|
Term of the partnership
|
3.1
|
The C.V. is established as from the Formation Date and for an indefinite period of time.
|
3.2
|
The C.V. shall be terminated only upon unanimous votes of the Partners.
|
4.
|
Contributions; Adjustments to Partnership Interests; Attributions or Redemptions of Partnership Interests
|
4.1.1
|
As per the Formation Date, FIM has made a contribution to the C.V. of an amount in cash, which amount has been paid by FIM to the bank account of the C.V.
|
4.1.2
|
As per the Formation Date, FILP has made a contribution to the C.V. of an amount in cash, which amount has been paid by FILP to the bank account of the C.V.
|
4.1.3
|
As per the Amendment 3 Date, MH has made a (non-cash) contribution to the C.V., consisting of its interests in the following companies:
|
-
|
Frank’s International LLC
, a limited liability company established under the laws of the state of Texas, United States of America United States of America (“FI LLC”);
|
4.2
|
If agreed by unanimous votes of the Partners and without prejudice to Article 12 (i), the Partners can make additional contributions in cash or in kind to the C.V.; and (ii) capital contributions made by the Partners to the C.V. or parts thereof can be repaid by the C.V. to the Partners. Any such additional contributions or repayments are not required to be made on a pro rata basis.
|
4.3
|
Upon any contribution (or deemed contribution) by the Partners, the net fair market value of such contribution shall be determined and shall be taken into account for the purpose of determining the percentage interest in the C.V. (“Percentage Interest”) held by each partner, as further described in article 4.4.
|
4.4
|
The Percentage Interests held by the Partners will be determined as follows:
|
a.
|
With respect to each Partner on the date hereof, the Partner’s Percentage Interest will be determined by dividing the net fair market value of the contributions (whether in cash or otherwise) made by such Partner by the net fair market value of the contributions by all the Partners.
|
b.
|
In connection with any subsequent contribution (or deemed contribution) of cash, property or services to the C.V., the Percentage Interests will be redetermined, as soon as the approvals required by Article 12 have been granted. Each Partner’s Percentage Interest will equal the net fair market value of the cash, property or services contributed (or deemed contributed) to the C.V. by such Partner divided by the net fair market value of the cash, property or services contributed (or deemed contributed) by all the Partners. For purposes of this calculation, (i) each Partner that owns an interest in the C.V. immediately prior to such subsequent contribution will be deemed to have made an aggregate contribution to the C.V. equal to its Percentage Interest (as in effect immediately prior to the redetermination) of the net fair market value of the C.V. immediately prior to such subsequent contribution and (ii) in connection with an offering of stock by FINV, the proceeds of such offering that FINV contributes to the C.V. will be deemed to include all the expenses of such offering and the C.V. will be treated as paying all of the expenses of the offering directly to each service provider.
|
4.5
|
For the avoidance of doubt and subject to any approvals required by Article 12, it is the expectation of the Partners that:
|
a.
|
If FINV issues any FINV Common Shares after the date hereof, FINV shall promptly cause FILP (or such other subsidiary of FINV designated by FINV) to contribute to the C.V. all the net proceeds (or other consideration), if any, received by FINV with respect to such FINV Common Shares. Upon the contribution (or deemed contribution) by FILP (or such other subsidiary) to the C.V. of all of such net proceeds (or other consideration) so received by FINV, the Managing Partner shall cause the C.V. to attribute an additional interest in the C.V. to FILP (or such other subsidiary) and the Percentage Interests shall be re-determined pursuant to Article 4.4, such that FILP and FIM’s (and, if applicable, any other subsidiary of FINV) collective aggregate Percentage Interest in the C.V. shall equal the percentage of the total number of issued shares of FINV Common Shares and FINV A Shares that constitutes FINV Common Shares.
|
b.
|
If any FINV Common Shares are issued by FINV in to an employee or other service provider in connection with services rendered to or for the benefit of the C.V., for purposes of determining Percentage Interests and for purposes of maintaining the Capital Accounts, (i) the C.V. shall be treated as having made a cash payment to the employee or other service provider in an amount equal to the value of the FINV Common Shares issued, (ii) the employee or other service provider shall be treated as having purchased the FINV Common Shares for cash equal to the value of such FINV Common Shares from FINV, and (iii) FINV shall be treated as contributing such cash (through FILP and FIM) to the C.V.
|
c.
|
If any FINV Common Shares are issued by FINV in connection with an equity incentive program subject to vesting or forfeiture provisions, then the interests in the C.V. that are attributed by the C.V. to FILP (or such other subsidiary of FINV designated by FINV) in connection therewith in accordance with the provisions of paragraph b above shall be subject to vesting or forfeiture on the same basis. Any cash or property held by FILP, FIM or the C.V. (or such other subsidiary) on each other’s behalf in respect of dividends paid on restricted FINV Common Shares that fails to vest shall be returned to the C.V. upon the forfeiture of such restricted FINV Common Shares.
|
d.
|
If, at any time, any FINV Common Shares are repurchased or redeemed (whether by exercise of a put or call, pursuant to an open market purchase, automatically or by means of another arrangement) by FINV and subsequently cancelled, then the Managing Partner shall cause the C.V., immediately prior to such repurchase or redemption of FINV Common Shares, to repurchase or redeem a portion of FILP’s (or such other subsidiary of FINV designated by FINV) interests in the C.V. such that following such repurchase or redemption, FILP and FIM’s (and, if applicable, any other subsidiary of FINV) collective aggregate percentage interest in the C.V. shall equal the percentage of the total number of issued shares of FINV Common Shares and FINV A Shares that constitutes FINV Common Shares, at an aggregate redemption price equal to the aggregate purchase or redemption price of the FINV Common Shares being repurchased or redeemed by FINV (plus any expenses related thereto) and upon such other terms as are the same for the FINV Common Shares being repurchased or redeemed by FINV.
|
e.
|
As a result of the foregoing paragraphs a, b, c, and d at all times (i) the collective Percentage Interest of FIM, FILP and any other subsidiary of FINV contemplated above will equal the percentage of the total number of issued shares of FINV Common Shares and FINV A Shares that constitutes FINV Common Shares and (ii) the Percentage Interest of MH will equal the percentage of the total number of issued shares of FINV Common Shares and FINV A Shares that constitutes FINV A Shares.
|
4.6
|
The Managing Partner shall hold legal title to the assets of the C.V., including the assets contributed by the Partners. The Managing Partner shall hold title to such assets for the risk and account of the C.V. and the beneficial ownership in such assets shall be vested in the C.V., under the terms and conditions set forth in this Agreement. If the Managing Partner is replaced, it shall immediately cause title to the assets to be transferred to its successor. The Managing Partner shall be authorized to transfer title to the assets of the C.V. to a legal entity, controlled by the Managing Partner, provided that such legal entity shall have as sole purpose the holding of assets for and on behalf of the C.V.
|
5.
|
Appointment, dismissal and authority of the Managing Partner
|
5.1
|
The General Partner shall be the Managing Partner. The business and affairs of the C.V. shall be managed by the Managing Partner consistent with this Agreement. Subject to the express limitations contained in this Agreement, the Managing Partner shall have complete and absolute control of the affairs and business of the C.V., and shall possess all powers necessary, convenient or appropriate to carrying out the purposes and business of the C.V., including, without limitation, doing all things and taking all actions necessary to carry out the terms and provisions of this Agreement. Subject to the rights and powers of the Managing Partner and the limitations contained herein, the Managing Partner may delegate to any person, other than a Limited Partner, any or all of its powers, rights and obligations under this Agreement and may appoint, contract or otherwise deal with any person to perform any acts or services for the C.V. as the Managing Partner may reasonably determine. The Managing Partner is specifically authorized to execute and sign in the name of and on behalf of the C.V. any and all agreements, certificates, instruments or other documents requisite to carrying out the intentions and purposes of this Agreement and of the C.V.
|
5.2
|
No Partner other than the Managing Partner shall be entitled to perform any act of management on behalf of the C.V. or have any authority to represent the C.V. vis-à-vis third parties.
|
5.3
|
The Managing Partner shall owe the same duties to the C.V. and the Partners as a member of the board of directors of FINV owes to FINV and its shareholders. Except as expressly provided in this Agreement, nothing contained in this Agreement shall be deemed to constitute any Partner an agent or legal representative of any other Partner or to create any fiduciary relationship for any purpose whatsoever, apart from such obligations between partners in a limited partnership formed under the laws of the Netherlands as may be created by applicable law. The Managing Partner shall not have any authority to act for, or to assume any obligation or responsibility on behalf of, any other Partner.
|
5.4
|
Except as provided by Article 3.2, Article 4.2 and Article 12 of this Agreement or by applicable law, the Managing Partner shall not require the prior approval of the Partners in relation to any action permitted by the terms of this Agreement.
|
5.5
|
The C.V. shall reimburse the Managing Partner for all costs and expenses incurred by the Managing Partner that are directly attributable to the operation of the C.V., including costs for engaging third parties such as consultants, attorneys and accountants.
|
5.6
|
The C.V. shall reimburse FINV for all of its general, administrative, overhead and other indirect costs and expenses, including (a) those costs and expenses attributable to operating as a publicly traded company, (b) costs of securities offerings, (c) board of directors compensation and meeting costs, (d) costs of periodic reports to shareholders, (e) litigation costs and damages arising from litigation, (f) accounting and legal costs and (g) franchise taxes.
|
6.
|
Financial year and annual accounts
|
6.1
|
The financial year of the C.V. will coincide with the calendar year; provided that for United States federal income tax purposes the C.V. will have a tax year ending on June 30.
|
6.2
|
Within five months after the end of the financial year, or after termination of the C.V., the Managing Partner will draw up the (annual) accounts of the C.V. consisting of a balance sheet and a profit and loss account with explanatory notes thereon. The annual accounts of the C.V. shall be prepared in the English language and in accordance with generally accepted accounting principles, as determined by the Managing Partner. The annual accounts shall within said period of five months be submitted to the Partners for approval.
|
6.3
|
The C.V. shall prepare and timely file all tax returns required to be filed by the C.V., including all applicable U.S. tax returns. Each Partner shall furnish to the C.V. all pertinent information in its possession relating to the C.V’s operations that is necessary to enable the C.V.’s tax returns to be timely prepared and filed. With respect to the U.S. Form 1065, the C.V. shall deliver to each Member within 90 calendar days after the end of the applicable tax year, a Schedule K-1 together with such additional information as may be required by the Partners in order to file their individual returns reflecting the C.V.’s operations. The C.V. shall bear the costs of the preparation and filing of its tax returns.
|
7.
|
Profits and Losses; Distributions
|
7.1
|
Except as otherwise provided in Exhibit A relating to allocations for United States income tax purposes, profits and losses (and all items of income, gain, loss and deduction) shall be allocated among the Partners in accordance with their Percentage Interests.
|
7.2
|
The Limited Partner(s) will not be obliged to make any additional contributions to the C.V. for any reason.
|
7.3
|
Distributions.
|
7.3.1
|
To the extent permitted by applicable law and hereunder, distributions to Partners may be declared by the Managing Partner out of legally available funds in such amounts and on such terms (including the payment dates of such distributions) as the Managing Partner shall determine using such record date as the Managing Partner may designate; such distribution shall be made to the Partners as of the close of business on such record date on a pro rata basis in accordance with their Percentage Interests as of the close of business on such record date.
|
7.3.2
|
To the extent permitted by applicable law and to any restrictions contained in any agreement to which the C.V. is bound prior to making distributions pursuant to Article 7.3.1, on each Tax Distribution Date the C.V. shall, subject to the availability of funds, distribute to the Partners in accordance with their Percentage Interests in cash an amount sufficient to cause each Partner to receive an amount at least equal to such Partner’s Assumed Tax Liability, if any. “Tax Distribution Date” means any date that is two business days prior to the date on which estimated United States income tax payments are required to be made by calendar year individual taxpayers and each due date for the United States income tax return of an individual calendar year taxpayer (without regard to extensions) or such other dates as selected by the Managing Partner. “Assumed Tax Liability” of each Partner means an amount equal to (i) the amount of income taxes (including tax under section 1411 and any applicable estimated taxes), determined taking into account the character of income and loss allocated as it affects the applicable tax rate, that the Managing Partner estimates would be due from such Partner on such Tax Distribution Date, (x) assuming such Partner were an individual resident of the State of Louisiana who earned solely the items of income, gain, deduction, loss, and/or credit allocated to such Partner by the C.V., (y) after taking proper account of loss carryforwards available to individual taxpayers resulting from losses allocated to the Partners by the C.V. (including allocations provided for in Section A-5(b) of Exhibit A), to the extent not taken into account in prior periods, and (z) assuming that such Partner is subject to tax at the highest applicable rate, reduced by (ii) all other distributions made to such Partner in respect of the period for which the Assumed Tax Liability is calculated.
|
7.3.3
|
Withholding.
|
8.
|
Retirement, continuation and termination
|
8.1
|
A Partner shall retire:
|
a.
|
if the Partner (legal entity) is dissolved;
|
b.
|
if the Partner’s bankruptcy becomes irrevocable;
|
c.
|
if the Partner applies for a moratorium of payments;
|
d.
|
if Article 1684, Book 7A of the Dutch Civil Code (“severe reason”) applies to an individual Partner, as a result of which its membership terminates.
|
8.2
|
If any Partner retires pursuant to any of the events specified in Article 8.1, the Partners receiving the termination notice, or the Partners who are not subject to any of the events specified in Article 8.1(a-c), or the Partners to which Article 1684, Book 7A, Dutch Civil Code does not apply - hereafter referred to as the “Remaining Partners” - shall continue the affairs of the C.V. for their own account and under the same name, unless they have notified their former co-partner - hereafter the “Resigning Partner” - within one month of the latter’s resignation that they have elected not to continue the affairs of the C.V., in which case the C.V. shall be dissolved in accordance with Article 8.7.
|
8.3
|
If a Partner retires and the Remaining Partners have not elected to terminate the C.V., then the Remaining Partner(s) shall be under a duty to take over the Resigning Partner’s rights in the assets belonging to the C.V., and shall also assume all liabilities of the Resigning Partner towards the C.V., and pay the Resigning Partner the sum specified in Article 8.4. In deviation of the previous sentence, the Parties may also resolve that the Resigning Partner shall receive the Resigning Partner’s Percentage Interest of all assets of the C.V., provided that he/she assumes a pro rata portion of the liabilities of the C.V.
|
8.4
|
The sum referred to Article 8.3 shall be equivalent to the product of the Resigning Partner’s Percentage Interest multiplied by the net fair market value of the C.V.’s assets.
|
8.5
|
The sum referred to above shall be paid to the Resigning Partner not later than one year after the first day of the month following the month of resignation.
|
8.6
|
If a Partner other than the Resigning Partner has no wish to continue the C.V. and notifies the other Partners within the one month period referred to in Article 8.2, such Partner shall be deemed to retire at the same time as the Resigning Partner and such Partner shall also be considered a Resigning Partner for the purposes of this Article.
|
8.7
|
The C.V. shall be terminated upon the occurrence of any of the following events:
|
b.
|
any Partner retires and none of the other Partners wishes to continue the affairs of the C.V. in accordance with Article 8.2;
|
c.
|
if Article 1684, Book 7A of the Dutch Civil Code applies to the entire C.V.
|
8.8
|
Upon the termination of the C.V., the C.V.’s affairs shall be liquidated as soon as possible by the Managing Partner or another liquidator to be appointed by the Managing Partner.
|
8.9
|
The liquidator shall prepare the liquidation accounts of the C.V. in order to reflect the entitlement of each Partner calculated in accordance with Article 8.4.
|
8.10
|
After payment of all creditors of the C.V., the remaining assets of the C.V. following its termination shall be distributed to the Partners whereby each of the Partners shall be entitled to distributions in proportion to each Partner's Percentage Interest as per the date of termination of the C.V. The Managing Partner shall in its sole discretion determine how the cash and other assets will be distributed to the each of those Partners and the Managing Partner will in its sole discretion determine the other details.
|
8.11
|
If there is any liquidation deficit, such deficit shall be entirely borne by the General Partner. The Limited Partner(s) shall not have any obligation to make any additional contributions for the covering of debts of the C.V.
|
8.12
|
Any payments to be made to the Partners in connection with the liquidation of the C.V. shall be made within one month from the date on which the liquidation accounts are established.
|
8.13
|
The books and records of the C.V. shall remain in the custody of the liquidator unless the former Partners determine otherwise.
|
9.
|
Voting rights and decision making
|
9.1
|
Each Partner is entitled to cast one vote. Unless stated otherwise herein, all decisions to be taken by the Partners pursuant to this Agreement shall be adopted by a simple majority of the votes cast.
|
9.2
|
Each Partner shall appoint a natural person or legal entity to exclusively represent it in all matters regarding the C.V. Such appointment shall be valid, until a replacement is notified to the C.V. in accordance with Article 15.
|
10.
|
Access to records and accounts
|
11.
|
Confidentiality
|
11.1
|
The C.V. shall not, nor shall it permit any subsidiary to, disclose any Partner’s name or identity as an investor in the C.V. in any press release or other public announcement or in any document or material filed with any governmental entity, without the prior written consent of such Partner, which consent shall not be unreasonably withheld or delayed, unless such disclosure is otherwise required by applicable law or by any regulatory or self-regulatory organization having jurisdiction or by order of a court of competent jurisdiction, in which case (except with respect to disclosure that is required in connection with the filing of federal, state and local tax returns) prior to making such disclosure the C.V. shall give written notice to such Partner describing in reasonable detail the proposed content of such disclosure and shall permit such Partner to review and comment upon the form and substance of such disclosure and allow such Partner to seek confidential treatment therefor.
|
11.2
|
Each Partner expressly agrees to maintain, for so long as such person is a Partner and for two (2) years thereafter, the confidentiality of, and not to disclose to any person other than the C.V. (and any successor of the C.V. or any person acquiring (whether by merger, consolidation, sale, exchange or otherwise) all or a material portion of the assets or interests of the C.V. or any of its subsidiaries), another Partner or a person designated by the C.V. or any of their respective financial planners, accountants, attorneys or other advisors, any information relating to the business (current or proposed), financial structure, financial position or financial results, clients or affairs of the C.V. or any of its subsidiaries that shall not be generally known to the public, except (i) as otherwise required by applicable law or by any regulatory or self-regulatory organization having jurisdiction or by order of a court of competent jurisdiction, in which case (except with respect to disclosure that is required in connection with the filing of federal, state and local tax returns or by any regulatory or self-regulatory organization) prior to making such disclosure such Partner shall give written notice to the C.V. describing in reasonable detail the proposed content of such disclosure and shall permit the C.V. to review and comment upon the form and substance of such disclosure and allow the C.V. to seek confidential treatment therefor, and (ii) in the case of any Partner who is employed by the C.V. or any of its subsidiaries, in the ordinary course of his or her duties to the C.V. or any of its subsidiaries; provided, however, that a Partner may report to its stockholders, limited partners, members or other owners, as the case may be, regarding the general status of its investment in the C.V. (without disclosing specific confidential information).
|
12.
|
Admission and Substitution of Partners; Participation in and by Other Partnerships
|
12.1
|
a. The sale, transfer, exchange, assignment, gift, right of usufruct or other disposition, including but not limited to a disposition pursuant to a legal merger, legal division, dissolution or liquidation, whether voluntary or involuntary of all or any part of a Partner’s economic or legal interest in the C.V. shall require the prior written consent of all of the Partners. Such consent may be granted or withheld by each of them in their sole and absolute discretion.
|
c.
|
In case a Partner is a transparent entity according to Dutch tax principles, any admission and/or substitution of a Limited Partner shall in addition require the prior written consent of all of the Upper-tier Partners.
|
d.
|
In case a Limited Partner is a transparent entity according to Dutch tax principles, any admission and/or substitution of an Upper-tier Partner shall require the prior written consent of all of the Partners and all of the Upper-tier Partners.
|
e.
|
If C.V. has become a partner of another entity which is a transparent entity according to Dutch tax principles, any admission and/or substitution of a Limited Partner shall in addition require the prior written consent of all of the partners (limited partners and general partners) of such entity (“Lower-tier Partners”).
|
12.2
|
In case the C.V. wishes to become a partner (whether a limited partner or a general partner) of another entity which is a transparent entity according to Dutch tax principles, or in case another entity which is a transparent entity according to Dutch tax principles wishes to become a partner in the C.V., such other entity’s partnership agreement, statute, articles, bylaws or other governing document or agreement, whichever applies, has to contain provisions similar to Article 12.1 and this Article 12.2.
|
12.3
|
Any admission or substitution without the unanimous prior written consents required under this Article 12.1 shall be null and void.
|
12.4
|
Any admission or substitution of a Partner, an Upper-tier Partner or a Lower-tier Partner does not cause the C.V. to terminate or to dissolve.
|
13.
|
Limited liability of Partner(s); Investment Opportunities; Performance of Duties; Conflicts of Interest
|
13.1
|
The Limited Partner(s) shall have no liability with respect to the debts of or the claims against the C.V.; each Limited Partner shall only be liable to make its agreed capital contributions.
|
13.2
|
Except as otherwise provided by applicable law, a Partner may, but shall not be obligated to, lend money to the C.V., act as a surety or guarantor for the C.V., or transact other business with the C.V., and has the same rights and obligations when transacting business with the C.V. as a person or entity who is not a Partner.
|
13.3
|
To the fullest extent permitted by applicable law, the doctrine of corporate opportunity, or any analogous doctrine, shall not apply to the Partners, and any of their respective affiliates and any of their respective officers, directors, agents, shareholders, members, partners, affiliates and subsidiaries (other than the C.V. and its subsidiaries) (each, a “Business Opportunity Exempt Party”). The C.V. renounces any interest or expectancy of the C.V. in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to any Business Opportunity Exempt Party. No Business Opportunity Exempt Party who acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the C.V. shall have any duty to communicate or offer such opportunity to the C.V. No amendment or repeal of this Article 13.3 shall apply to or have any effect on the liability or alleged liability of any Business Opportunity Exempt Party for or with respect to any opportunities of which any such Business Opportunity Exempt Party becomes aware prior to such amendment or repeal. Any Person purchasing or otherwise acquiring any interest in any FINV shares or interests in the C.V. shall be deemed to have notice of and consented to the provisions of this Article 13.3. Neither the alteration, amendment or repeal of this Article 13.3, nor the adoption of any provision inconsistent with this Article 13.3, shall eliminate or reduce the effect of this Article 13.3 in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article 13.3, would accrue or arise, prior to such alteration, amendment, repeal or adoption. Notwithstanding the foregoing, a Business Opportunity Exempt Party who is a director or officer of the Managing Partner and who is offered a business opportunity of the Managing Partner reasonably determined by the party receiving the opportunity to be expressly in his or her capacity as a director or officer of the Managing Partner shall be obligated to communicate and offer such business opportunity to the Managing Partner and the Managing Partner and the C.V. do not renounce any such opportunity. Nothing this Article 13.3 shall limit the confidentiality obligations set forth in Article 11 or any fiduciary obligations of the directors of the Managing Partner.
|
13.4
|
In performing its, his or her duties, each of the Partners shall be entitled to rely in good faith on the provisions of this Agreement and on information, opinions, reports or statements (including financial statements and information, opinions, reports or statements as to the value or amount of the assets, liabilities, profits or losses of the C.V. and its subsidiaries), of the following other Persons or groups: (i) one or more officers or employees of such Partner or the C.V. or any of its subsidiaries, (ii) any attorney, independent accountant or other Person employed or engaged by such Partner or the C.V. or any of its subsidiaries, or (iii) any other Person who has been selected with reasonable care by or on behalf of such Partner or the C.V. or any of its subsidiaries, in each case, as to matters which such relying Person reasonably believes to be within such other Person’s professional or expert competence.
|
14.
|
Indemnification
|
14.1
|
To the fullest extent permissible by law, the C.V. shall indemnify and reimburse for, and hold harmless against, each of the Limited Partners, the Managing Partner and their respective affiliates and the stockholders, members, managers, directors, officers, partners, employees and agents of the Partners, the Managing Partner and their respective affiliates (collectively, the “Indemnified Persons”):
|
a.
|
any and all liabilities, claims, judgments, fines and penalties (collectively, the “Claims”) incurred by an Indemnified Person as a result of any expected, threatened, pending or completed action, investigation or other proceeding, whether civil, criminal or administrative (each a “Legal Action”) in relation to any act or omission in or related to his or her capacity as Indemnified Person; and
|
b.
|
any expenses (including reasonable attorneys’ fees and litigation costs) (collectively, “Expenses”) incurred by an Indemnified Person in connection with any Legal Action.
|
14.2
|
An Indemnified Person will not be held harmless, indemnified and reimbursed as referred to above in paragraph 1, if and to the extent:
|
a.
|
a Dutch court has made a final and binding judgment that the act or omission of the Indemnified Person can be characterized as willful misconduct (
opzet
), willful recklessness (
bewuste roekeloosheid
) or serious culpability (
ernstig verwijt
); and/or
|
b.
|
the costs or the loss of the Indemnified Person is covered by insurance and the insurer has compensated him or her for the costs or loss.
|
14.3
|
When a Dutch court has made a final and binding judgment that an Indemnified Person has no claim to the indemnification as referred to above in paragraph 1, the Indemnified Person shall immediately repay to the C.V. any amount of indemnification it received from the company. The C.V. can demand surety for the repayment obligation of the concerned party.
|
14.4
|
The company shall use all its reasonable endeavors to provide for, and shall bear the cost of, insurance covering Claims against, and Expenses incurred by, the Indemnified Persons in connection with any Legal Action.
|
14.5
|
The C.V. may enter into agreements with the Managing Partner to provide for indemnification consistent with the terms and conditions set forth in this Article 14. Unless otherwise agreed by the Managing Partner, the C.V. shall maintain insurance, at its expense, on its own behalf and on behalf of the Indemnified Persons against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the C.V. would have the power to indemnify such person against such liability under this Article 14.
|
14.6
|
Expenses incurred by an Indemnified Person in defending a Proceeding shall be paid by the C.V. in advance of such Proceeding’s final disposition upon receipt of an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the C.V. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Managing Partner deems appropriate. The indemnification and advancement of expenses set forth in this Article 14 shall continue as to an Indemnified Person who has ceased to be a named Indemnified Person and shall inure to the benefit of the heirs, executors, administrators, successors and permitted assigns of such a person.
|
14.7
|
Persons who are not covered by the foregoing provisions of this Article 14 and who are or were partners, employees or agents of the C.V., or who are or were serving at the request of the C.V. as employees or agents of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the Managing Partner.
|
14.8
|
The provisions of this Article 14 shall be deemed to be a contract right between the C.V. and each person who serves in such capacity at any time while this Article 14 and the relevant provisions of applicable law are in effect, and any repeal or modification of this Article 14 or any such law shall not affect any rights or obligations then existing with respect to any state of facts or Proceeding then existing. The indemnification and other rights provided for in this Article 14 shall inure to the benefit of the heirs, executors and administrators of any Indemnified Person. Except as provided in Article 14, the C.V. shall indemnify any such person seeking indemnification in connection with a Proceeding initiated by such person only if such Proceeding was authorized by the Managing Partner.
|
14.9
|
For purposes of this Article 14, references to “the C.V.” shall include, in addition to the resulting company, any constituent company (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its managers, directors, officers, employees or agents, so that any Person who is or was a manager, director, officer, employee or agent of such constituent company, or is or was serving at the request of such constituent company as a director, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article 14 with respect to the resulting or surviving company as he or she would have with respect to such constituent company if its separate existence had continued. For purposes of this Article 14, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the C.V.” shall include any service as a manager, officer, employee or agent of the C.V. that imposes duties on, or involves services by, such manager, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the C.V.” as referred to in this Article 14.
|
14.10
|
Anything herein to the contrary notwithstanding, any indemnity by the C.V. relating to the matters covered in this Article 14 shall be provided out of and to the extent of C.V. assets only and no Partner (unless such Partner otherwise agrees in writing or is found in a final decision of a court of competent jurisdiction to have personal liability on account thereof) shall have personal liability on account thereof or shall be required to make additional contributions to help satisfy such indemnity of the C.V.
|
15.
|
Notices
|
16.
|
Miscellaneous
|
16.1
|
Article headings are inserted in this Agreement for case of reference only and do not form a part of this Agreement for the purposes of interpretation.
|
16.2
|
If any part of this Agreement becomes invalid or unenforceable the parties shall endeavor to agree to such amendment, which shall, as far as possible, effect the intentions expressed herein. In default of such agreement, the invalidity of such provision shall not affect the other provisions of this Agreement and all provisions not affected by the invalidity shall remain in full force and effect.
|
16.3
|
The authentic language of this Agreement shall be the English language and all notices, reports and other communications hereunder shall be in English.
|
16.4
|
No provision of this Agreement may be amended or waiver without the unanimous prior written consent of the Partners.
|
17.
|
Governing law and settlement of disputes
|
17.1
|
This Agreement shall be governed and construed in accordance with the laws of the Netherlands.
|
17.2
|
The parties hereto shall use their best endeavors to settle any possible disputes in an amicable way. In the event conciliation fails, all disputes arising in connection with this Agreement or further agreements resulting thereof, shall be finally settled by the Court of Amsterdam, The Netherlands.
|
FIM
|
FILP
|
MH
|
Total
|
$4,543,000
|
$3,372,985,000
|
$1,165,472,000
|
$4,543,000,000
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q (this "report") of Frank’s International N.V. (“the registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal controls over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q (this "report") of Frank’s International N.V. (“the registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
the information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company.
|
November 7, 2014
|
|
/s/ D. Keith Mosing
|
|
|
|
D. Keith Mosing
|
|
|
|
Chief Executive Officer and President
|
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
November 7, 2014
|
|
/s/ John W. Sinders
|
|
|
|
John W. Sinders
|
|
|
|
Executive Vice President, Administration
|
|
|
|
and Interim Chief Financial Officer
|
|