Ultimate results could differ from our estimates.

In our opinion, the condensed consolidated financial statements included herein contain all adjustments necessary to present fairly our financial position as of June 30, 2016March 31, 2017, the results of our operations for the three and sixthree months ended June 30, 2016March 31, 2017 and 20152016, and our cash flows for the sixthree months ended June 30, 2016March 31, 2017 and 20152016. Such adjustments are of a normal recurring nature. In addition, certain reclassifications of prior period balances have been made to conform to the current period presentation. The results of our operations for the three and six months ended June 30, 2016March 31, 2017 may not be indicative of results for the full year.

The following table presents information on our business segments.

Our total outstanding net trade receivables in Venezuela were $636 million as of March 31, 2017, compared to $610 million as of December 31, 2016, which represents 15% of total company trade receivables for both periods. The majority of our Venezuela receivables are United States dollar-denominated receivables. Of the second quarter$636 million of 2016,receivables in Venezuela as of March 31, 2017, $441 million have been classified as long-term and included within “Other assets” on our condensed consolidated balance sheets.

In addition, we executed a financing agreementcurrently hold an interest-bearing promissory note with our primary customer in Venezuela in an effort to actively manage these customer receivables, resulting in an exchangewith a par value of $200 million, of outstanding trade receivables for an interest-bearing promissory note. For additional information aboutand we have been receiving quarterly interest payments on this note in accordance with the promissory note exchangedates outlined in the agreement. See Note 8 and Venezuela currency system, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Business Environment and Results of Operations.”

The following tables summarize our shareholders’ equity activity:

Accumulated other comprehensive loss consisted of the following:

The trial for the first phase of the MDL proceeding occurred in February 2013 through April 2013 and covered issues arising out of the conduct and degree of culpability of various parties allegedly relevant to the loss of well control, the ensuing fire and explosion on and sinking of the Deepwater Horizon, and the initiation of the release of hydrocarbons from the Macondo well.parties. In September 2014, the MDL court ruled (Phase One Ruling) that, among other things, (1) in relation to the Macondo well incident, BP’s conduct was reckless, Transocean’s conduct was negligent, and our conduct was negligent, (2) fault for the Macondo blowout, explosion and spillwell incident was apportioned 67% to BP, 30% to Transocean and 3% to us, and (3) the indemnity and release clauses in our contract with BP are valid and enforceable against BP. The MDL court did not find that our conduct was grossly negligent, thereby subject to any appeals, eliminating our exposure in the MDL for punitive damages. The appeal process for the Phase One Ruling is underway, with various parties filing briefs according to a court-ordered schedule.

In September 2014, prior to the Phase One Ruling, we reached an agreement, subject to court approval, to settle a substantial portion of the plaintiffs’ claims asserted against us relating to the Macondo well incident (our MDL Settlement). Pursuant to our MDL Settlement, we agreed to pay for an aggregate of $1.1 billion, which includes legal fees and costs, into a settlement fund in three installments over two years, except that one installment of legal fees will not be paid until all of the conditions to the settlement have been satisfied or waived.billion. Certain conditions musthad to be satisfied before our MDL Settlement becomes effective and the funds are released from the settlement fund.became effective. These conditions include,included, among others, the issuance of a final order of the MDL court including the resolution of certain appeals. In addition, we have the right to terminate our MDL Settlement if more than an agreed number of plaintiffs elect to opt out of the settlement prior to the expiration of the opt out deadline to be established by the MDL court. Before approving our MDL Settlement the MDL court must certify the settlement class, the numerous class members must be notified of the proposed settlement, and the court must hold a fairness hearing.resolution of any appeals therefrom. The Court has issued a preliminary approval, with the hearing for thethat final approval set for November 2016. We are unable to predict when the MDL court will approveof our MDL Settlement.

In June 2003, the lead plaintiffs filed a motion for leave to file a second amended consolidated complaint, which was granted by the court. In addition to restating the original accounting and disclosure claims, the second amended consolidated complaint included claims arising out of our 1998 acquisition of Dresser Industries, Inc., including that we failed and our disclosures and reserves relating to timely disclose the resultingour asbestos liability exposure.

In April 2005, the court appointed new co-lead counsel and named the Fund the new lead plaintiff, directing that it file a third consolidated amended complaint and that we file our motion to dismiss. The court held oral arguments on that motion in August 2005. In March 2006, the court entered an order in which it granted the motion to dismiss with respect to claims arising prior to June 1999 and granted the motion with respect to certain other claims while permitting the Fund to re-plead some of those claims to correct deficiencies in its earlier complaint. In April 2006, the Fund filed its fourth amended consolidated complaint. We filed a motion to dismiss those portions of the complaint that had been re-pled. A hearing was held on that motion in July 2006,re-pled and in March 2007 the court ordered dismissal of the claims against all individual defendants other than our Chief Executive Officer (CEO). The court ordered that the case proceed against our CEO and us.

In September 2007, the Fund filed a motion for class certification, and our response was filed in November 2007.certification. The district court issued an order in November 2008 denying the motion for class certification. The Fifth Circuit Court of Appeals affirmed the district court’s order denying class certification. In June 2011, the United States Supreme Court reversed the Fifth Circuit ruling that the Fund needed to prove loss causation in order to obtain class certification and the case was returned to the lower courts for further consideration.

In January 2012, the district court issued an order certifying the class. In April 2013, the Fifth Circuit issued an order affirmingaffirmed the district court's order.

We are conductinghave conducted internal investigations of certain areas of our operations in Angola and Iraq, focusing on compliance with certain company policies, including our Code of Business Conduct (COBC), and the Foreign Corrupt Practices Act (FCPA) and other applicable laws. We have engaged outside counsel and independent forensic accountants to assist us with these investigations.

In December 2010, we received an anonymous e-mail alleging that certain current and former personnel violated our COBC and the FCPA, principally through the use of an Angolan vendor.vendor to satisfy local content requirements. The e-mail also allegesalleged conflicts of interest, self-dealing, and the failure to act on alleged violations of our COBC and the FCPA. We contacted the DOJDepartment of Justice (DOJ) to advise them that we were initiating an internal investigation.

During the second quarter of 2012, in connection with a meeting with the DOJ and the SEC regarding the above investigation, we advised the DOJ and the SEC that we were initiating unrelated, internal investigations into payments made to a third-party agent relating to certain customs matters in Angola and to third-party agents relating to certain customs and visa matters in Iraq.

Since the initiation of the investigations described above, we have participated in meetings with the DOJ and the SEC to brief them on the status of the investigations and produced documents to them both voluntarily and as a result of SEC subpoenas to us and certain of our current and former officers and employees.

In addition to the federal laws and regulations, states and other countries where we do business often have numerous environmental, legal, and regulatory requirements by which we must abide. We evaluate and address the environmental impact of our operations by assessing and remediating contaminated properties in order to avoid future liabilities and comply with environmental, legal and regulatory requirements. Our Health, Safety and Environment group has several programs in place to maintain environmental leadership and to help prevent the occurrence of environmental contamination. On occasion in addition to the matters relating to the Macondo well incident described above, we are

Additionally, we have subsidiaries that have been named as potentially responsible parties along with other third parties for eight federal and state Superfund sites for which we have established reserves. As of June 30, 2016,March 31, 2017, those eight sites accounted for approximately $4 million of our $51$49 million total environmental reserve. Despite attempts to resolve these Superfund matters, the relevant regulatory agency may at any time bring suit against us for amounts in excess of the amount accrued. With respect to some Superfund sites, we have been named a potentially responsible party by a regulatory agency; however, in each of those cases, we do not believe we have any material liability. We also could be subject to third-party claims with respect to environmental matters for which we have been named as a potentially responsible party.

In the normal course of business, we have agreements with financial institutions under which approximately $1.9$2.0 billion of letters of credit, bank guarantees or surety bonds were outstanding as of June 30, 2016.March 31, 2017. Some of the outstanding letters of credit have triggering events that would entitle a bank to require cash collateralization. None of these off balance sheet arrangements either has, or is likely to have, a material effect on our consolidated financial statements.

Basic income or loss per share is based on the weighted average number of common shares outstanding during the period. Diluted income per share includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued. Antidilutive securitiesshares represent potentially dilutive securitiespotential common shares which are excluded from the computation of diluted income or loss per share as their impact would be antidilutive.

A reconciliation of the number of shares used for the basic and diluted income per share computations is as follows:

During the second quarter ofAt March 31, 2017 and December 31, 2016, we executed a financing agreementheld an interest-bearing promissory note with our primary customer in Venezuela resulting in an exchangewith a par value of $200 million of outstanding trade receivables for an interest-bearing promissory note. We recorded the note at its fair market value at the date of exchange, resulting in a $148 million pre-tax loss on exchange. As of June 30, 2016, the fair valuemillion. The carrying amount of this promissory note was $52$83 million as of March 31, 2017, which isconsists of a current portion of $47 million and non-current portion of $36 million, and are classified as “Receivables” and “Other assets,” respectively, on our condensed consolidated balance sheets. The carrying amount as of December 31, 2016 was $70 million. The carrying amounts for both periods approximate fair value. Initial fair value of the promissory note was based on pricing data points for similar assets in an illiquid market (Level 3) and is classified as “Other assets”categorized within level 3 on our condensed consolidated balance sheets.the fair value hierarchy. We intend on holding this note to maturity, in which case the value would be accreted back to its par value, into earnings,are using an effective interest method to accrete the carrying amount to its par value as it matures. This

We maintain an interest rate management strategy that is intended to mitigate the exposure to changes in interest rates in the aggregate for our debt portfolio. We hold a series ofuse interest rate swaps relating to three of our debt instruments with a total notional amount of $1.5 billion in order to effectively convert a portion of our fixed rate debt to floating LIBOR-based rates. TheseOur interest rate swaps, which expire when the underlying debt matures, are designated as fair value hedges of the underlying debt and are determined to be highly effective. These derivative instruments are marked to market with gains and losses recognized currently in interest expense to offset the respective gains and losses recognized on changes in the fair value of the hedged debt. During the first quarter of 2017, we terminated a series of our interest rate swaps with a notional amount of $1.4 billion in conjunction with our early redemption of senior notes. We included the gain from the swap termination in our calculation of early debt extinguishment costs. See Note 4 for further information. As of March 31, 2017, we had one remaining interest rate swap relating to one of our debt instruments with a total notional amount of $100 million. The fair value of our interest rate swaps isare included in “Other assets” in our condensed consolidated balance sheets and waswere immaterial as of June 30, 2016March 31, 2017 and December 31, 2015.2016. The fair value of our interest rate swaps wasare categorized within level 2 on the fair value hierarchy and were determined using an income approach model with inputs, such as the notional amount, LIBOR rate spread and settlement terms that are observable in the market or can be derived from or corroborated by observable data (Level 2).data.

We have no financial instruments measured at fair value based on quoted prices in active markets (Level 1). The carrying amount of cash and equivalents, receivables, and accounts payable, as reflected in the condensed consolidated balance sheets, approximates fair value due to the short maturities of these instruments.

The carrying amount and fair value of our long-term debt, including current maturities, is as follows:

Our Leveldebt categorized within level 1 debton the fair values arevalue hierarchy is calculated using quoted prices in active markets for identical liabilities with transactions occurring on the last two days of period-end. Our Leveldebt categorized within level 2 debton the fair values arevalue hierarchy is calculated using significant observable inputs for similar liabilities where estimated values are determined from observable data points on our other bonds and on other similarly rated corporate debt or from observable data points of transactions occurring prior to two days from period-end and adjusting for changes in market conditions. Differences betweenOur total fair value and carrying value of debt decreased in the periods presented in our Level 1 and Level 2 classificationfirst quarter of our long-term debt relate2017 due to the timingearly extinguishment of when transactions are executed.$1.4 billion of senior notes. We have no debt measured atcategorized within level 3 on the fair value usinghierarchy based on unobservable inputs (Level 3).inputs.

On January 1, 2016,2017, we adopted an accounting standards update issued by the Financial Accounting Standards Board (FASB) relatedwhich simplifies several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and the classification on the statement of cash flows. In addition, the update allows an entity-wide accounting policy election to either estimate the consolidation analysis,number of awards that are expected to vest or account for forfeitures when they occur. The element of the update that will have the most impact on our financial statements will be income tax consequences. Excess tax benefits and tax deficiencies on stock-based compensation awards are now included in our tax provision within our condensed consolidated statement of operations as discrete items in the reporting period in which amendedthey occur, rather than previous accounting of recording in additional paid-in capital on our condensed consolidated balance sheets. We have also elected to continue our current policy of estimating forfeitures of stock-based compensation awards at the guidelines for determining whether certain legal entities should be consolidated. Thistime of grant and revising in subsequent periods to reflect actual forfeitures. We applied the update eliminatedprospectively beginning January 1, 2017, and the presumption that a general partner should consolidate a limited partnership and modified the evaluation of whether limited partnerships are variable interest entities or voting interest entities. The adoption of this update did not materiallyhave a material impact on our condensed consolidated financial statements.

In May 2014, the FASB and the International Accounting Standards Board (IASB) issued a comprehensive new revenue recognition standard that will supersede existing revenue recognition guidance under United States Generally Accepted Accounting Principles (U.S. GAAP)U.S. GAAP and International Financial Reporting Standards (IFRS). The issuance of this guidance completes the joint effort by the FASB and the IASB to improve financial reporting by creating common revenue recognition guidance for U.S. GAAP and IFRS. This new revenue recognition standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.

The core principle of the new guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard creates a five-stepfive step model that requires companies to exercise judgment when considering the terms of a contract and all relevant facts and circumstances. The standard allows for several transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented, or (b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financial statements, including additional disclosures of the standard’s application impact to individual financial statement line items.

In August 2015, the FASB issued an accounting standards update for a one-year deferral of the revenue recognition standard's effective date for all entities, which changed the effectiveness to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We are currently evaluating thisdetermining the impacts of the new standard on our contract portfolio. Our approach includes performing a detailed review of key contracts representative of our different businesses and comparing historical accounting policies and practices to the new standard. Because the standard will impact our business processes, systems and controls, we are also developing a comprehensive change management project plan to guide the implementation. Our services are primarily short-term in nature, and our existingassessment at this stage is that we do not expect the new revenue recognition policies to determine which contracts in the scope of the guidancestandard will be affected by the new requirements and whathave a material impact they would have on our consolidated financial statements upon adoption. We have not yet determined which transitionare still evaluating software contracts within our Landmark Software and Services product service line and long-term contracts requiring integrated project management services within our Consulting and Project Management product service line for potential impact from the new accounting guidance. We currently intend on adopting the new standard utilizing the modified retrospective method wethat will utilize upon adoption on the effective date.

In February 2016, the FASB issued an accounting standards update related to accounting for leases, which requires the assets and liabilities that arise from leases to be recognized on the balance sheet. Currently only capital leases are recorded on the balance sheet. This update will require the lessee to recognize a lease liability equal to the present value of the lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and recognize the lease expense for such leases generally on a straight-line basis over the lease term. This update will be effective for fiscal periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We are currently evaluating the impact that this update will have on our condensed consolidated financial statements.

The business operations of our segments are organized around four primary geographic regions: North America, Latin America, Europe/Africa/CIS and Middle East/Asia. We have significant manufacturing operations in various locations, includingthe most significant of which are located in the United States, Canada, China, Malaysia, Singapore and the United Kingdom. With overapproximately 50,000 employees, we operate in approximately 70 countries around the world, and our corporate headquarters are in Houston, Texas and Dubai, United Arab Emirates.

Market conditions continued to negatively impact our business during the secondfirst quarter of 20162017 marked by lower activity levelsthe rapid increase in North American land rig count, while continued cyclical headwinds and continued pricing pressure aroundseasonal pressures affected the globe.international markets. The North America market continues to face activity and pricing challenges,improve, with the United States land rig count at June 30, 2016for the first quarter of 2017 having declined almost 80%increased 27% from the peak in November 2014,fourth quarter of 2016, which resulted in our recognitionsequential revenue growth of second quarter operating losses24% in the North America region. However, crude pricesthe international markets have increased significantly sincebeen slower to recover and continue to face pricing pressure and activity declines, while customers defer new projects and focus on lowering costs. We believe the low point in February 2016cost challenges are part of the evolution of the cycle and the North American rig count has shown improvement since a low point in May 2016, signalingbelieve that we may have hit the bottom of the industry downturn and can beginare positioned to look ahead for a potential market recovery. The North American rig count is expected to improve modestly in the second half of the year.provide long-term profitable opportunities with our margin-focused strategy.

In North America, stabilizing commodity prices and growing rig counts have resulted in a rapidly recovering market, particularly in United States unconventionals. Our customers remain focused on lowering cost and producing more barrels of oil equivalent. We are continuing to collaborate and engineer solutions to maximize asset value for our customers and will continue to take advantage of the recent rig count growth by focusing on increasing equipment utilization, managing costs and expanding our surface efficiency model. Additionally, we gained significant North America market share through the downturn by demonstrating to our customers the benefits of our efficiency and technology, coming out of the downturn with our highest North America market share in history. We have been utilizing this increased market share to drive margin improvement. The historically high level of market share we built in the downturn gives us the ability to focus our work with the most efficient customers and, as such, we continued to experience substantial pricing pressure, which has deterioratedexecute our margins, across allstrategy of high grading the profitability of our product service lines. Revenue in North America declined 43% in the second quarter of 2016 as compared to the second quarter of 2015, outperforming a 53% decline in the average North America rig count year over year. While we anticipate the remainder of 2016 to continue to be challenging, the recent uptick in commodity pricing and North America rig count is producing signs of optimism in the industry for a potential market recovery. During this down cycle, we have made structural changes toportfolio with customers that value our delivery platform, eliminating management layers and consolidating roles and locations. As a result of these savings, we believe North America margins can begin to recover in the third quarter and anticipate our North America revenueservices. We will continue to outperform the rig count for the remainder of the year.reactivate our equipment at leading edge pricing and maintain our focus on execution and service quality.

While the North America market has begun to recover, the international downswing continues to persist. The international markets have been more resilient than North America with modest headwinds aroundthrough most of the downturn, particularly in the Eastern Hemisphere, but pricing and activity levels remain under pressure. Low commodity prices have stressed customer budgets and have impacted economics across deepwater and mature field markets, which led to decreased activity and pricing in the Eastern Hemisphere. We have continuedfirst quarter of 2017, coupled with seasonal and cyclical headwinds, leading to workrevenue declines and stressed margins in all of our international regions. While we are working with our customers during this downturn to improve project economics through technology and improved operating efficiency, butwe continue to anticipate headwinds, and we do not expect to see an inflection point for revenue and margin improvements in the international markets until the latter part of 2017. Due to the longer investment cycles and contractual nature of the international markets, we expect revenue and margins to continue to be negatively impacted by lower activity levels and pricingunder pressure throughout 2017 until the markets fully stabilize. While we believe the first quarter of 2017 represents the bottom in the Eastern Hemisphere rig count, the full year average rig count for 2017 will likely be only marginally higher than the remainder offull year average rig count for 2016. In Latin America, rigwe experienced sequential improvement in revenue from activity in both Brazil and MexicoMexico. This region is at 20-year lows, whileslowly showing signs of improvement but there are significant headwinds that must be overcome for a full recovery. Venezuela continues to experience significant political and economic turmoil. Although we may see some end-of-year sales, Latin America is expected to remain our most challenged region throughout the international down cycle, and we do not expect to see a fundamental improvement for the remainder of 2016. We also anticipate Eastern Hemisphere activity to decline over the remainder of the year, but expect margins to remain relatively flat in the third quarter due to the structural cost controls we have been taking.

Our operating performance and business outlook are described in more detail in “Business Environment and Results of Operations.”

We believe we have invested our cash balances conservatively and secured sufficient financing to help mitigate any near-term negative impact on our operations from adverse market conditions. In conjunction with the terminationfirst quarter of the Baker Hughes transaction,2017, we paid a $3.5 billion termination fee and mandatorily redeemed $2.5an aggregate principal amount of $1.4 billion of debt that we issuedsenior notes, which consisted of $400 million due in late 2015,2018 and $1.0 billion due in 2019. We also made the final installment payment of $335 million related to the settlement reached for the Macondo well incident, closing the second quarter of 2016 at $3.1$2.1 billion of cash and equivalents. This represents a $1.9 billion reduction in our cash position from December 31, 2016. We also have $3.0 billion available under our revolving credit facility which, with our cash balance, we believe provides us with sufficient liquidity to address the challenges and opportunities of the current market. For additional information on market conditions, and termination of the merger agreement with Baker Hughes, see “Liquidity and Capital Resources,”Resources” and “Business Environment and Results of Operations,Operations.” and Note 2 to the condensed consolidated financial statements.

As of June 30, 2016,March 31, 2017, we had $3.1$2.1 billion of cash and equivalents, compared to $10.1$4.0 billion at December 31, 2015.2016. Additionally, at June 30, 2016, we held $101$92 million of investments in fixed income securities held by our foreign subsidiaries compared to $96 million at March 31, 2017 and December 31, 2015.2016. These securities are reflected in "Other current assets" and "Other assets" in our condensed consolidated balance sheets. Approximately $1.8$1.7 billion of our total cash position as of June 30, 2016March 31, 2017 was held by our foreign subsidiaries, a substantial portion of which is available to be repatriated into the United States to fund our U.S. operations or for general corporate purposes, with a portion subject to certain country-specific restrictions. See Note 5We have provided for further discussion on U.S. federal income taxes we recorded during the second quarter of 2016 on approximately $3.3 billion of cumulative undistributed foreign earnings where we have determined that such earnings are not indefinitely reinvested.

We manufacture our own equipment, which allows us flexibility to increase or decrease our capital expenditures based on market conditions. Capital spending for the full year 2016 is currently expected to be approximately $850 million, a reduction of over 60% from the $2.2 billion of capital expenditures in 2015, which demonstrates our commitment to live within our cash flows during this challenging period for the industry. The capital expenditures plan for the remainder of the year2017 is primarily directed towardtowards our Production Enhancement, Sperry Drilling, Production Solutions, Wireline and Perforating, and CementingBaroid product service lines.

Currently, our quarterly dividend rate is $0.18 per common share, or approximately $155 million per quarter.$156 million. Subject to the approval of our Board of Directors, our intention is to continue paying dividends at our current rate. We also have $600 million senior notes that mature in August 2016, which we intend to fully repay with cash on hand. Additionally, we expect a $400 million United States tax refund in the second half of 2016.

Our Board of Directors has authorized a program to repurchase our common stock from time to time. Approximately $5.7 billion remains authorized for repurchases as of June 30, 2016March 31, 2017 and may be used for open market and other share purchases. There were no repurchases made under the program during the sixthree months ended June 30,March 31, 2017.

We expect to receive a United States tax refund in the amount of approximately $534 million during the second half of 2017, primarily related to the carryback of our net operating losses recognized in 2016.

 

We operate in approximately 70 countries throughout the world to provide a comprehensive range of discrete and integrated services and products to the energy industry related to the exploration, development, and production of oil and natural gas.industry. A significant amount of our consolidated revenue is derived from the sale of services and products to major, national, and independent oil and natural gas companies worldwide. The industry we serve is highly competitive with many substantial competitors in each segment of our business. During the first sixthree months of 2016,2017, based upon the location of the services provided and products sold, 39%49% of our consolidated revenue was from the United States, compared to 46%41% of consolidated revenue from the United States in the first sixthree months of 2015. This decline reflects the impact our North America operations are experiencing from the downturn in the energy market.2016. No other country accounted for more than 10% of our revenue during these periods.

Operations in some countries may be adversely affected by unsettled political conditions, acts of terrorism, civil unrest, force majeure, war or other armed conflict, sanctions, expropriation or other governmental actions, inflation, changes in foreign currency exchange rates, foreign currency exchange restrictions and highly inflationary currencies, as well as other geopolitical factors. We believe the geographic diversification of our business activities reduces the risk that loss of operations in any one country, other than the United States, would be materially adverse to our consolidated results of operations.

Activity within our business segments is significantly impacted by spending on upstream exploration, development and production programs by our customers. Also impacting our activity is the status of the global economy, which impacts oil and natural gas consumption.

Some of the more significant determinants of current and future spending levels of our customers are oil and natural gas prices, global oil supply, the world economy, the availability of credit, government regulation and global stability, which together drive worldwide drilling activity. Lower oil and natural gas prices usually translate into lower exploration and production budgets. Our financial performance is significantly affected by well count in North America, as well as oil and natural gas prices and worldwide rig activity, which are summarized in the tables below.

The following table shows the average oil and natural gas prices for West Texas Intermediate (WTI), United Kingdom Brent crude oil, and Henry Hub natural gas:

The historical average rig counts based on the weekly Baker Hughes Incorporated rig count information were as follows:

As of June 30, 2016,March 31, 2017, our total net investment in Venezuela was approximately $755$834 million, with only $25$6 million of net monetary assetsliabilities denominated in Bolívares, and we had an additional $27$39 million of surety bond guarantees outstanding relating to our Venezuelan operations at June 30, 2016.operations.

We have continued to experience delays in collecting payments on our receivables from our primary customer in Venezuela. These receivables are not disputed, and we have not historically had material write-offs relating to this customer. Additionally, we routinely monitor the financial stability of our customers. During

Our total outstanding net trade receivables in Venezuela were $636 million as of March 31, 2017, compared to $610 million as of December 31, 2016, which represents 15% of total company trade receivables for both periods. The majority of our Venezuela receivables are United States dollar-denominated receivables. Of the second quarter$636 million of 2016,receivables in Venezuela as of March 31, 2017, $441 million have been classified as long-term and included within “Other assets” on our condensed consolidated balance sheets.

In addition, we executed a financing agreementcurrently hold an interest-bearing promissory note with our primary customer in Venezuela in an effort to actively manage these customer receivables, resulting in an exchangewith a par value of $200 million of outstanding trade receivables for an interest-bearing promissory note. We recorded the note at its fair market value at the date of exchange, which resulted in a $148 million pre-tax loss on exchange recorded within "Impairments and other charges" on our condensed consolidated statements for the three and six months ended June 30, 2016.million. This instrument provides a more defined schedule around the timing of payments, while generating a return while we await payment. Our current intent is to hold this note to maturity and we expect to collect 100% of the principal, in which case the value would be accreted back to its par value, into earnings,We are using an effective interest method to accrete the carrying amount to its par value as it matures.

For additional information, see Part I, Item 1(a), “Risk Factors” in our 20152016 Annual Report on Form 10-K.