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The Company’s operations are organized into three geographic segments—Western Hemisphere (including North and South America; headquartered in Houston, Texas), Eastern Hemisphere (including Europe and Africa; headquartered in Aberdeen, Scotland) and Asia-Pacific (including the Pacific Rim, Southeast Asia, Australia, India and the Middle East; headquartered in Singapore). Each of these segments sells similar products and services and the Company has major manufacturing facilities in all three of its headquarter locations as well as in Macae, Brazil. 

Eliminations of operating profits are related to intercompany inventory transfers that are deferred until shipment is made to third party customers. 

In 2014 Chevron accounted for approximately 10% of the Company’s total revenues. In 2013 and 2012, Petrobras accounted for approximately 11% and 12% respectively, of the Company’s total revenues. No other customer accounted for more than 10% of the Company’s total revenues in 2014, 2013 or 2012. 

## 12. Stock-Based Compensation and Stock Awards 

Stock Options 

On May 13, 2004, the Company’s stockholders approved the 2004 Incentive Plan of Dril-Quip, Inc. (as amended in 2012, the “2004 Plan”), which reserved up to 2,696,294 shares of Common Stock to be used in connection with the 2004 Plan. Persons eligible for awards under the 2004 Plan are employees holding positions of responsibility with the Company or any of its subsidiaries and members of the Board of Directors. Options granted under the 2004 Plan have a term of ten years and become exercisable in cumulative annual increments of one-fourth of the total number of shares of Common Stock subject thereto, beginning on the first anniversary of the date of the grant. 

The fair value of stock options granted was estimated on the grant date using the Black-Scholes option pricing model. The expected life was based on the Company’s historical trends, and volatility is based on the historical volatility over the expected life of the options. The risk-free interest rate is based on U.S. Treasury yield curve at the grant date. The Company does not pay dividends and, therefore, there is no assumed dividend yield. 

Option activity for the year ended December 31, 2014 was as follows: 

<img src='content_image/277695.jpg'>

The total intrinsic value of stock options exercised in 2014, 2013 and 2012 was $2.0 million, $10.7 million and $7.6 million, respectively. The income tax benefit realized from stock options exercised was $718,000 for the year ended December 31, 2014. There were no anti-dilutive stock option shares on December 31, 2014. 

Stock-based compensation is recognized as selling, general and administrative expense in the accompanying Consolidated Statements of Income. During the years ended December 31, 2014, 2013 and 2012, stock-based compensation expense for stock option awards totaled $2.5 million, $3.4 million and $3.8 million, respectively. No stock-based compensation expense was capitalized during 2014, 2013 or 2012. 

