þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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76-0207995
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(State or other jurisdiction
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(I.R.S. Employer Identification No.)
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of incorporation or organization)
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17021 Aldine Westfield, Houston, Texas - 77073-5101
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(Address of principal executive offices)
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer þ
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Smaller reporting company o
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Emerging growth company o
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Page No.
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Three Months Ended March 31,
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|||||
(In millions, except per unit amounts)
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2019
|
2018
|
||||
Revenue:
|
|
|
|
|||
Sales of goods
|
$
|
3,202
|
|
$
|
3,160
|
|
Sales of services
|
2,413
|
|
2,239
|
|
||
Total revenue
|
5,615
|
|
5,399
|
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||
|
|
|
|
|||
Costs and expenses:
|
|
|
|
|||
Cost of goods sold
|
2,810
|
|
2,800
|
|
||
Cost of services sold
|
1,829
|
|
1,758
|
|
||
Selling, general and administrative expenses
|
704
|
|
674
|
|
||
Restructuring, impairment and other
|
62
|
|
162
|
|
||
Separation and merger related costs
|
34
|
|
46
|
|
||
Total costs and expenses
|
5,439
|
|
5,440
|
|
||
Operating income (loss)
|
176
|
|
(41
|
)
|
||
Other non operating income, net
|
21
|
|
2
|
|
||
Interest expense, net
|
(59
|
)
|
(46
|
)
|
||
Income (loss) before income taxes and equity in loss of affiliate
|
138
|
|
(85
|
)
|
||
Equity in loss of affiliate
|
—
|
|
(20
|
)
|
||
Provision for income taxes
|
(67
|
)
|
(38
|
)
|
||
Net income (loss)
|
71
|
|
(143
|
)
|
||
Less: Net income attributable to noncontrolling interests
|
6
|
|
—
|
|
||
Net income (loss) attributable to Baker Hughes, a GE company, LLC
|
$
|
65
|
|
$
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(143
|
)
|
|
|
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|
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||
|
|
|
|
|
||
Cash distribution per common unit
|
$
|
0.18
|
|
$
|
0.18
|
|
|
Three Months Ended March 31,
|
|||||
(In millions)
|
2019
|
2018
|
||||
Net income (loss)
|
$
|
71
|
|
$
|
(143
|
)
|
Less: Net income attributable to noncontrolling interests
|
6
|
|
—
|
|
||
Net income (loss) attributable to Baker Hughes, a GE company, LLC
|
65
|
|
(143
|
)
|
||
Other comprehensive income:
|
|
|
||||
Investment securities
|
2
|
|
—
|
|
||
Foreign currency translation adjustments
|
166
|
|
312
|
|
||
Cash flow hedges
|
4
|
|
7
|
|
||
Benefit plans
|
—
|
|
(3
|
)
|
||
Other comprehensive income
|
172
|
|
316
|
|
||
Less: Other comprehensive income attributable to noncontrolling interests
|
—
|
|
—
|
|
||
Other comprehensive income attributable to Baker Hughes, a GE company, LLC
|
172
|
|
316
|
|
||
Comprehensive income
|
243
|
|
173
|
|
||
Less: Comprehensive income attributable to noncontrolling interests
|
6
|
|
—
|
|
||
Comprehensive income attributable to Baker Hughes, a GE company, LLC
|
$
|
237
|
|
$
|
173
|
|
(In millions)
|
March 31, 2019
|
December 31, 2018
|
||||
ASSETS
|
||||||
Current assets:
|
|
|
||||
Cash and cash equivalents (1)
|
$
|
3,067
|
|
$
|
3,677
|
|
Current receivables, net
|
6,402
|
|
6,062
|
|
||
Inventories, net
|
4,871
|
|
4,620
|
|
||
All other current assets
|
630
|
|
639
|
|
||
Total current assets
|
14,970
|
|
14,998
|
|
||
Property, plant and equipment (net of accumulated depreciation of $3,854 and $3,625)
|
6,218
|
|
6,228
|
|
||
Goodwill
|
20,468
|
|
20,423
|
|
||
Other intangible assets, net
|
5,663
|
|
5,719
|
|
||
Contract and other deferred assets
|
1,808
|
|
1,894
|
|
||
All other assets
|
2,808
|
|
1,900
|
|
||
Deferred income taxes
|
997
|
|
1,072
|
|
||
Total assets (1)
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$
|
52,932
|
|
$
|
52,234
|
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LIABILITIES AND EQUITY
|
||||||
Current liabilities:
|
|
|
||||
Accounts payable
|
$
|
3,919
|
|
$
|
4,018
|
|
Short-term debt and current portion of long-term debt (1)
|
906
|
|
942
|
|
||
Progress collections and deferred income
|
1,923
|
|
1,765
|
|
||
All other current liabilities
|
2,274
|
|
2,276
|
|
||
Total current liabilities
|
9,022
|
|
9,001
|
|
||
Long-term debt
|
6,270
|
|
6,285
|
|
||
Deferred income taxes
|
42
|
|
94
|
|
||
Liabilities for pensions and other postretirement benefits
|
1,033
|
|
1,018
|
|
||
All other liabilities
|
1,599
|
|
960
|
|
||
Members' equity:
|
|
|
||||
Members' capital (common units 1,036 and 1,035 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively)
|
37,432
|
|
37,582
|
|
||
Retained loss
|
(288
|
)
|
(354
|
)
|
||
Accumulated other comprehensive loss
|
(2,290
|
)
|
(2,462
|
)
|
||
Baker Hughes, a GE company, LLC members' equity
|
34,854
|
|
34,766
|
|
||
Noncontrolling interests
|
112
|
|
110
|
|
||
Total equity
|
34,966
|
|
34,876
|
|
||
Total liabilities and equity
|
$
|
52,932
|
|
$
|
52,234
|
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(1)
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Total assets include $861 million and $896 million of assets held on behalf of General Electric Company, of which $717 million and $747 million is cash and cash equivalents and $144 million and $149 million is investment securities at March 31, 2019 and December 31, 2018, respectively, and a corresponding amount of liability is reported in short-term borrowings. See "Note 15. Related Party Transactions" for further details.
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(In millions, except per unit amounts)
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Common Unitholders
|
Retained
Loss |
Accumulated
Other Comprehensive Loss |
Non-controlling
Interests |
Total Equity
|
||||||||||
Balance at December 31, 2018
|
$
|
37,582
|
|
$
|
(354
|
)
|
$
|
(2,462
|
)
|
$
|
110
|
|
$
|
34,876
|
|
Comprehensive income:
|
|
|
|
|
|
||||||||||
Net income
|
|
65
|
|
|
6
|
|
71
|
|
|||||||
Other comprehensive income
|
|
|
172
|
|
|
172
|
|
||||||||
Regular cash distribution to members ($0.18 per unit)
|
(187
|
)
|
|
|
|
|
(187
|
)
|
|||||||
BHGE stock-based compensation cost
|
40
|
|
|
|
|
40
|
|
||||||||
Other
|
(3
|
)
|
1
|
|
|
(4
|
)
|
(6
|
)
|
||||||
Balance at March 31, 2019
|
$
|
37,432
|
|
$
|
(288
|
)
|
$
|
(2,290
|
)
|
$
|
112
|
|
$
|
34,966
|
|
(In millions, except per unit amounts)
|
Common Unitholders
|
Retained
Loss |
Accumulated
Other Comprehensive Loss |
Non-controlling
Interests |
Total Equity
|
||||||||||
Balance at December 31, 2017
|
$
|
40,678
|
|
$
|
(541
|
)
|
$
|
(1,881
|
)
|
$
|
140
|
|
$
|
38,396
|
|
Effect of adoption of ASU 2016-16 on taxes
|
|
|
67
|
|
|
|
67
|
|
|||||||
Comprehensive income (loss):
|
|
|
|
|
|
||||||||||
Net loss
|
|
|
(143
|
)
|
|
|
(143
|
)
|
|||||||
Other comprehensive income
|
|
|
|
316
|
|
|
316
|
|
|||||||
Regular cash distribution to members ($0.18 per unit)
|
(203
|
)
|
|
|
|
|
(203
|
)
|
|||||||
Repurchase and cancellation of common units
|
(500
|
)
|
|
|
|
(500
|
)
|
||||||||
BHGE stock-based compensation cost
|
30
|
|
|
|
|
30
|
|
||||||||
Other
|
7
|
|
|
|
(1
|
)
|
6
|
|
|||||||
Balance at March 31, 2018
|
$
|
40,012
|
|
$
|
(617
|
)
|
$
|
(1,565
|
)
|
$
|
139
|
|
$
|
37,969
|
|
|
Three Months Ended March 31,
|
|||||
(In millions)
|
2019
|
2018
|
||||
Cash flows from operating activities:
|
|
|
||||
Net income (loss)
|
$
|
71
|
|
$
|
(143
|
)
|
Adjustments to reconcile net income (loss) to net cash flows from (used in) operating activities:
|
|
|
||||
Depreciation and amortization
|
350
|
|
388
|
|
||
Provision for deferred income taxes
|
(18
|
)
|
(99
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
||||
Current receivables
|
(192
|
)
|
125
|
|
||
Inventories
|
(220
|
)
|
(134
|
)
|
||
Accounts payable
|
(63
|
)
|
114
|
|
||
Progress collections and deferred income
|
62
|
|
(124
|
)
|
||
Contract and other deferred assets
|
61
|
|
140
|
|
||
Other operating items, net
|
(194
|
)
|
23
|
|
||
Net cash flows from (used in) operating activities
|
(143
|
)
|
290
|
|
||
Cash flows from investing activities:
|
|
|
||||
Expenditures for capital assets
|
(294
|
)
|
(177
|
)
|
||
Proceeds from disposal of assets
|
59
|
|
108
|
|
||
Other investing items, net
|
(21
|
)
|
(66
|
)
|
||
Net cash flows used in investing activities
|
(256
|
)
|
(135
|
)
|
||
Cash flows from financing activities:
|
|
|
||||
Net repayments of short-term debt and other borrowings
|
(36
|
)
|
(181
|
)
|
||
Repayment of long-term debt
|
(12
|
)
|
(648
|
)
|
||
Distributions to members
|
(187
|
)
|
(203
|
)
|
||
Repurchase of common units
|
—
|
|
(524
|
)
|
||
Other financing items, net
|
2
|
|
(5
|
)
|
||
Net cash flows used in financing activities
|
(233
|
)
|
(1,561
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
22
|
|
(6
|
)
|
||
Decrease in cash and cash equivalents
|
(610
|
)
|
(1,412
|
)
|
||
Cash and cash equivalents, beginning of period
|
3,677
|
|
7,026
|
|
||
Cash and cash equivalents, end of period
|
$
|
3,067
|
|
$
|
5,614
|
|
Supplemental cash flows disclosures:
|
|
|
||||
Income taxes paid
|
$
|
76
|
|
$
|
82
|
|
Interest paid
|
$
|
56
|
|
$
|
72
|
|
|
Three Months Ended March 31,
|
|||||
Total Revenue
|
2019
|
2018
|
||||
U.S.
|
$
|
1,505
|
|
$
|
1,483
|
|
Non-U.S.
|
4,110
|
|
3,916
|
|
||
Total
|
$
|
5,615
|
|
$
|
5,399
|
|
|
March 31, 2019
|
December 31, 2018
|
||||
Customer receivables
|
$
|
5,305
|
|
$
|
4,974
|
|
Related parties
|
718
|
|
746
|
|
||
Other
|
714
|
|
669
|
|
||
Total current receivables
|
6,737
|
|
6,389
|
|
||
Less: Allowance for doubtful accounts
|
(335
|
)
|
(327
|
)
|
||
Total current receivables, net
|
$
|
6,402
|
|
$
|
6,062
|
|
|
March 31, 2019
|
December 31, 2018
|
||||
Finished goods
|
$
|
2,782
|
|
$
|
2,575
|
|
Work in process and raw material
|
2,089
|
|
2,045
|
|
||
Total inventories, net
|
$
|
4,871
|
|
$
|
4,620
|
|
|
Oilfield Services
|
Oilfield Equipment
|
Turbo-machinery & Process Solutions
|
Digital Solutions
|
Total
|
||||||||||
Balance at December 31, 2017, gross
|
$
|
15,565
|
|
$
|
3,901
|
|
$
|
1,906
|
|
$
|
2,036
|
|
$
|
23,408
|
|
Accumulated impairment at December 31, 2017
|
(2,633
|
)
|
(867
|
)
|
—
|
|
(254
|
)
|
(3,754
|
)
|
|||||
Balance at December 31, 2017
|
12,932
|
|
3,034
|
|
1,906
|
|
1,782
|
|
19,654
|
|
|||||
Purchase accounting adjustments (1)
|
(157
|
)
|
293
|
|
394
|
|
429
|
|
959
|
|
|||||
Currency exchange and others
|
(26
|
)
|
(17
|
)
|
(114
|
)
|
(33
|
)
|
(190
|
)
|
|||||
Balance at December 31, 2018
|
12,749
|
|
3,310
|
|
2,186
|
|
2,178
|
|
20,423
|
|
|||||
Currency exchange and others
|
—
|
|
22
|
|
6
|
|
17
|
|
45
|
|
|||||
Balance at March 31, 2019
|
$
|
12,749
|
|
$
|
3,332
|
|
$
|
2,192
|
|
$
|
2,195
|
|
$
|
20,468
|
|
(1)
|
Includes the final determination of fair value of the assets and liabilities and the related goodwill associated with the acquisition of Baker Hughes that was concluded in the second quarter of 2018. Of the total goodwill of $13,669 million resulting from the acquisition of Baker Hughes, $12,604 million is allocated to our Oilfield Services segment and the remainder to our other segments based on the expected benefit from the synergies of the acquisition.
|
|
March 31, 2019
|
December 31, 2018
|
||||||||||||||||
|
Gross
Carrying Amount |
Accumulated
Amortization |
Net
|
Gross
Carrying Amount |
Accumulated
Amortization |
Net
|
||||||||||||
Customer relationships
|
$
|
3,101
|
|
$
|
(983
|
)
|
$
|
2,118
|
|
$
|
3,085
|
|
$
|
(944
|
)
|
$
|
2,141
|
|
Technology
|
1,091
|
|
(557
|
)
|
534
|
|
1,107
|
|
(526
|
)
|
581
|
|
||||||
Trade names and trademarks
|
703
|
|
(237
|
)
|
466
|
|
698
|
|
(229
|
)
|
469
|
|
||||||
Capitalized software
|
1,169
|
|
(866
|
)
|
303
|
|
1,118
|
|
(824
|
)
|
294
|
|
||||||
Other
|
1
|
|
(1
|
)
|
—
|
|
14
|
|
(2
|
)
|
12
|
|
||||||
Finite-lived intangible assets
|
6,065
|
|
(2,644
|
)
|
3,421
|
|
6,022
|
|
(2,525
|
)
|
3,497
|
|
||||||
Indefinite-lived intangible assets (1)
|
2,242
|
|
—
|
|
2,242
|
|
2,222
|
|
—
|
|
2,222
|
|
||||||
Total intangible assets
|
$
|
8,307
|
|
$
|
(2,644
|
)
|
$
|
5,663
|
|
$
|
8,244
|
|
$
|
(2,525
|
)
|
$
|
5,719
|
|
(1)
|
Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name.
|
Year
|
Estimated Amortization Expense
|
||
Remainder of 2019
|
$
|
261
|
|
2020
|
329
|
|
|
2021
|
280
|
|
|
2022
|
237
|
|
|
2023
|
225
|
|
|
2024
|
218
|
|
|
March 31, 2019
|
December 31, 2018
|
||||
Long-term product service agreements
|
$
|
576
|
|
$
|
609
|
|
Long-term equipment contracts (1)
|
1,040
|
|
1,085
|
|
||
Contract assets (total revenue in excess of billings) (2)
|
1,616
|
|
1,694
|
|
||
Deferred inventory costs (3)
|
144
|
|
179
|
|
||
Non-recurring engineering costs
|
48
|
|
21
|
|
||
Contract and other deferred assets
|
$
|
1,808
|
|
$
|
1,894
|
|
(1)
|
Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment and certain other service agreements.
|
(2)
|
Contract assets (total revenue in excess of billings) were $1,684 million as of January 1, 2018.
|
(3)
|
Deferred inventory costs were $360 million as of January 1, 2018, which represents cost deferral for shipped goods and other costs where the criteria for revenue recognition has not yet been met.
|
|
March 31, 2019
|
December 31, 2018
|
||||
Progress collections
|
$
|
1,790
|
|
$
|
1,600
|
|
Deferred income
|
133
|
|
165
|
|
||
Progress collections and deferred income (contract liabilities) (1)
|
$
|
1,923
|
|
$
|
1,765
|
|
(1)
|
Progress collections and deferred income (contract liabilities) were $1,775 million at January 1, 2018.
|
|
|
||
Operating Lease Expense
|
Three Months Ended March 31, 2019
|
||
Long-term fixed lease
|
$
|
48
|
|
Long-term variable lease
|
11
|
|
|
Short-term lease
|
123
|
|
|
Total operating lease expense
|
$
|
182
|
|
|
March 31, 2019
|
December 31, 2018
|
||||
Short-term borrowings
|
|
|
||||
Short-term borrowings from GE
|
$
|
861
|
|
$
|
896
|
|
Other borrowings
|
45
|
|
46
|
|
||
Total short-term borrowings
|
906
|
|
942
|
|
||
|
|
|
||||
Long-term borrowings
|
|
|
||||
3.2% Senior Notes due August 2021
|
522
|
|
523
|
|
||
2.773% Senior Notes due December 2022
|
1,245
|
|
1,245
|
|
||
8.55% Debentures due June 2024
|
130
|
|
131
|
|
||
3.337% Senior Notes due December 2027
|
1,343
|
|
1,343
|
|
||
6.875% Notes due January 2029
|
292
|
|
294
|
|
||
5.125% Senior Notes due September 2040
|
1,305
|
|
1,306
|
|
||
4.08% Senior Notes due December 2047
|
1,336
|
|
1,336
|
|
||
Other long-term borrowings
|
97
|
|
107
|
|
||
Total long-term borrowings
|
6,270
|
|
6,285
|
|
||
Total borrowings
|
$
|
7,176
|
|
$
|
7,227
|
|
|
2019
|
2018
|
||||
Service cost
|
$
|
4
|
|
$
|
5
|
|
Interest cost
|
19
|
|
18
|
|
||
Expected return on plan assets
|
(25
|
)
|
(30
|
)
|
||
Amortization of net actuarial loss
|
4
|
|
2
|
|
||
Net periodic cost (benefit)
|
$
|
2
|
|
$
|
(5
|
)
|
|
Common Units Held by BHGE
|
Common Units Held by GE
|
||
Balance at December 31, 2018
|
513,399
|
|
521,543
|
|
Issue of units to BHGE under equity incentive plan
|
1,541
|
|
—
|
|
Balance at March 31, 2019
|
514,940
|
|
521,543
|
|
|
Investment Securities
|
Foreign Currency Translation Adjustments
|
Cash Flow Hedges
|
Benefit Plans
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at December 31, 2018
|
$
|
—
|
|
$
|
(2,326
|
)
|
$
|
(3
|
)
|
$
|
(133
|
)
|
$
|
(2,462
|
)
|
Other comprehensive income (loss) before reclassifications
|
2
|
|
166
|
|
5
|
|
(2
|
)
|
171
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
|||||
Deferred taxes
|
—
|
|
—
|
|
(1
|
)
|
1
|
|
—
|
|
|||||
Other comprehensive income
|
2
|
|
166
|
|
4
|
|
—
|
|
172
|
|
|||||
Less: Other comprehensive income attributable to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Balance at March 31, 2019
|
$
|
2
|
|
$
|
(2,160
|
)
|
$
|
1
|
|
$
|
(133
|
)
|
$
|
(2,290
|
)
|
|
Investment Securities
|
Foreign Currency Translation Adjustments
|
Cash Flow Hedges
|
Benefit Plans
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at December 31, 2017
|
$
|
1
|
|
$
|
(1,824
|
)
|
$
|
2
|
|
$
|
(60
|
)
|
$
|
(1,881
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
312
|
|
8
|
|
(3
|
)
|
317
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Deferred taxes
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|||||
Other comprehensive income (loss)
|
—
|
|
312
|
|
7
|
|
(3
|
)
|
316
|
|
|||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Balance at March 31, 2018
|
$
|
1
|
|
$
|
(1,512
|
)
|
$
|
9
|
|
$
|
(63
|
)
|
$
|
(1,565
|
)
|
|
March 31, 2019
|
December 31, 2018
|
|||||||||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
|
Net Balance
|
Level 1
|
Level 2
|
Level 3
|
Net Balance
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Derivatives
|
$
|
—
|
|
$
|
55
|
|
$
|
—
|
|
|
$
|
55
|
|
$
|
—
|
|
$
|
74
|
|
$
|
—
|
|
$
|
74
|
|
Investment securities
|
49
|
|
—
|
|
290
|
|
|
339
|
|
39
|
|
—
|
|
288
|
|
327
|
|
||||||||
Total assets
|
49
|
|
55
|
|
290
|
|
|
394
|
|
39
|
|
74
|
|
288
|
|
401
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives
|
—
|
|
(47
|
)
|
—
|
|
|
(47
|
)
|
—
|
|
(82
|
)
|
—
|
|
(82
|
)
|
||||||||
Total liabilities
|
$
|
—
|
|
$
|
(47
|
)
|
$
|
—
|
|
|
$
|
(47
|
)
|
$
|
—
|
|
$
|
(82
|
)
|
$
|
—
|
|
$
|
(82
|
)
|
|
2019
|
2018
|
||||
Balance at January 1
|
$
|
288
|
|
$
|
304
|
|
Purchases
|
6
|
|
34
|
|
||
Proceeds at maturity
|
(6
|
)
|
(12
|
)
|
||
Unrealized gains recognized in AOCI
|
2
|
|
—
|
|
||
Balance at March 31
|
$
|
290
|
|
$
|
326
|
|
|
March 31, 2019
|
December 31, 2018
|
||||||||||||||||||||||
|
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
||||||||||||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-U.S. debt securities (1)
|
$
|
288
|
|
$
|
2
|
|
$
|
—
|
|
$
|
290
|
|
$
|
288
|
|
$
|
—
|
|
$
|
—
|
|
$
|
288
|
|
Equity securities (2)
|
49
|
|
—
|
|
—
|
|
49
|
|
39
|
|
—
|
|
—
|
|
39
|
|
||||||||
Total
|
$
|
337
|
|
$
|
2
|
|
$
|
—
|
|
$
|
339
|
|
$
|
327
|
|
$
|
—
|
|
$
|
—
|
|
$
|
327
|
|
(1)
|
All of our investment securities are classified as available for sale instruments. Non-U.S. debt securities mature within four years.
|
(2)
|
Gains (losses) recorded to earnings related to these securities were $10 million and $(13) million for the three months ended March 31, 2019 and 2018, respectively.
|
|
March 31, 2019
|
December 31, 2018
|
||||||||||
|
Assets
|
(Liabilities)
|
Assets
|
(Liabilities)
|
||||||||
Derivatives accounted for as hedges
|
|
|
|
|
||||||||
Currency exchange contracts
|
$
|
1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(7
|
)
|
|
|
|
|
|
||||||||
Derivatives not accounted for as hedges
|
|
|
|
|
||||||||
Currency exchange contracts
|
52
|
|
(46
|
)
|
74
|
|
(75
|
)
|
||||
Commodity derivatives
|
2
|
|
—
|
|
—
|
|
—
|
|
||||
Other derivatives
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
||||
Total derivatives
|
$
|
55
|
|
$
|
(47
|
)
|
$
|
74
|
|
$
|
(82
|
)
|
|
Three Months Ended March 31,
|
|||||||||||
|
Gain (Loss) Recognized in AOCI
|
Gain (Loss) Reclassified from AOCI to Earnings
|
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Currency exchange contracts
|
$
|
5
|
|
$
|
8
|
|
$
|
—
|
|
$
|
—
|
|
Derivatives not designated as hedging instruments
|
Condensed consolidated statement of income caption
|
Three Months Ended March 31,
|
|||||
2019
|
2018
|
||||||
Currency exchange contracts (1)
|
Cost of goods sold
|
$
|
3
|
|
$
|
41
|
|
Currency exchange contracts
|
Selling, general and administrative expenses
|
(1
|
)
|
(24
|
)
|
||
Commodity derivatives
|
Cost of goods sold
|
2
|
|
—
|
|
||
Other derivatives
|
Other non operating income, net
|
(1
|
)
|
—
|
|
||
Total (2)
|
|
$
|
3
|
|
$
|
17
|
|
(1)
|
Excludes losses on embedded derivatives of $2 million and $39 million for the three months ended March 31, 2019 and 2018, respectively, as embedded derivatives are not considered to be hedging instruments in our economic hedges.
|
(2)
|
The effect on earnings of derivatives not designated as hedges is substantially offset by change in fair value of the economically hedged items in the current and future periods.
|
|
Three Months Ended March 31,
|
|||||
Segments revenue
|
2019
|
2018
|
||||
Oilfield Services
|
$
|
2,986
|
|
$
|
2,678
|
|
Oilfield Equipment
|
735
|
|
664
|
|
||
Turbomachinery & Process Solutions
|
1,302
|
|
1,460
|
|
||
Digital Solutions
|
592
|
|
598
|
|
||
Total
|
$
|
5,615
|
|
$
|
5,399
|
|
|
Three Months Ended March 31,
|
|||||
Segment income (loss) before income taxes
|
2019
|
2018
|
||||
Oilfield Services
|
$
|
176
|
|
$
|
141
|
|
Oilfield Equipment
|
12
|
|
(6
|
)
|
||
Turbomachinery & Process Solutions
|
118
|
|
119
|
|
||
Digital Solutions
|
68
|
|
73
|
|
||
Total segment
|
373
|
|
327
|
|
||
Corporate
|
(100
|
)
|
(98
|
)
|
||
Inventory impairment (1)
|
—
|
|
(61
|
)
|
||
Restructuring, impairment and other
|
(62
|
)
|
(162
|
)
|
||
Separation and merger related costs
|
(34
|
)
|
(46
|
)
|
||
Other non operating income, net
|
21
|
|
2
|
|
||
Interest expense, net
|
(59
|
)
|
(46
|
)
|
||
Total
|
$
|
138
|
|
$
|
(85
|
)
|
(1)
|
Charges for inventory impairments are reported in the "Cost of goods sold" caption of the condensed consolidated statements of income (loss).
|
|
2019
|
2018
|
||||
Balance at January 1
|
$
|
236
|
|
$
|
164
|
|
Provisions
|
3
|
|
10
|
|
||
Expenditures
|
(5
|
)
|
(7
|
)
|
||
Other
|
2
|
|
2
|
|
||
Balance at March 31
|
$
|
236
|
|
$
|
169
|
|
|
Three Months Ended March 31,
|
|||||
|
2019
|
2018
|
||||
Oilfield Services
|
$
|
17
|
|
$
|
59
|
|
Oilfield Equipment
|
18
|
|
12
|
|
||
Turbomachinery & Process Solutions
|
19
|
|
28
|
|
||
Digital Solutions
|
3
|
|
9
|
|
||
Corporate
|
5
|
|
17
|
|
||
Total
|
$
|
62
|
|
$
|
125
|
|
|
Three Months Ended March 31,
|
|||||
|
2019
|
2018
|
||||
Property, plant & equipment, net
|
$
|
9
|
|
$
|
19
|
|
Employee-related termination expenses
|
44
|
|
83
|
|
||
Asset relocation costs
|
2
|
|
5
|
|
||
Environmental remediation costs
|
—
|
|
3
|
|
||
Contract termination fees
|
7
|
|
7
|
|
||
Other incremental costs
|
—
|
|
8
|
|
||
Total
|
$
|
62
|
|
$
|
125
|
|
•
|
North America onshore activity: in the first quarter of 2019, we experienced a decline in the rig count, as compared to the first quarter of 2018. We expect that in the short-term, North American onshore activity will remain subdued as commodity prices fluctuate and supply chain constraints abate. Over the long-term, we remain optimistic about the outlook.
|
•
|
International onshore activity: we have seen a moderate increase in rig count activity in the first quarter of 2019 and expect this growth to continue for the remainder of the year, at a moderate rate. We have seen signs of improvement with the increase in commodity prices during the quarter, but due to continued volatility, we remain cautious as to growth expectations.
|
•
|
Offshore projects: we have begun to see increasing customer activity on offshore projects and more final investment decisions being made. Subsea tree awards increased in 2018 and we expect subsea awards to be roughly flat in 2019, though still at levels well below prior 2012 & 2013 peaks. We expect customers to continue to evaluate the timing of final investment decisions, and in light of increased commodity price volatility, there may be some project delays.
|
•
|
Liquefied Natural Gas (LNG) projects: while currently oversupplied, we believe a significant number of final investment decisions are needed to fill the projected supply-demand imbalance in the early to middle part of the next decade. We continue to view the long-term economics of the LNG industry as positive given our outlook for supply and demand.
|
•
|
Refinery, petrochemical and industrial projects: in refining, we believe large, complex refineries should gain advantage in a more competitive, oversupplied landscape in 2019 as the industry globalizes and refiners position to meet local demand and secure export potential. In petrochemicals, we continue to see healthy demand and cost-advantaged supply driving projects forward in 2019. The industrial market continues to grow as outdated infrastructure is replaced, policy changes come into effect and power is decentralized. We continue to see growing demand across these markets in 2019.
|
|
Three Months Ended March 31,
|
|||||
|
2019
|
2018
|
||||
Brent oil price ($/Bbl) (1)
|
$
|
63.10
|
|
$
|
66.86
|
|
WTI oil price ($/Bbl) (2)
|
54.82
|
|
62.91
|
|
||
Natural gas price ($/mmBtu) (3)
|
2.92
|
|
3.08
|
|
(1)
|
Energy Information Administration (EIA) Europe Brent Spot Price per Barrel
|
(2)
|
EIA Cushing, OK WTI (West Texas Intermediate) spot price
|
(3)
|
EIA Henry Hub Natural Gas Spot Price per million British Thermal Unit
|
|
Three Months Ended March 31,
|
|
||||
|
2019
|
2018
|
% Change
|
|||
North America
|
1,226
|
|
1,235
|
|
(1
|
)%
|
International
|
1,028
|
|
971
|
|
6
|
%
|
Worldwide
|
2,254
|
|
2,206
|
|
2
|
%
|
|
Three Months Ended March 31,
|
$ Change
|
|||||||
|
2019
|
2018
|
|||||||
Revenue:
|
|
|
|
||||||
Oilfield Services
|
$
|
2,986
|
|
$
|
2,678
|
|
$
|
308
|
|
Oilfield Equipment
|
735
|
|
664
|
|
71
|
|
|||
Turbomachinery & Process Solutions
|
1,302
|
|
1,460
|
|
(158
|
)
|
|||
Digital Solutions
|
592
|
|
598
|
|
(6
|
)
|
|||
Total
|
$
|
5,615
|
|
$
|
5,399
|
|
$
|
216
|
|
|
Three Months Ended March 31,
|
$ Change
|
|||||||
|
2019
|
2018
|
|||||||
Segment operating income (loss):
|
|
|
|
||||||
Oilfield Services
|
$
|
176
|
|
$
|
141
|
|
$
|
35
|
|
Oilfield Equipment
|
12
|
|
(6
|
)
|
18
|
|
|||
Turbomachinery & Process Solutions
|
118
|
|
119
|
|
(1
|
)
|
|||
Digital Solutions
|
68
|
|
73
|
|
(5
|
)
|
|||
Total segment operating income
|
373
|
|
327
|
|
47
|
|
|||
Corporate
|
(100
|
)
|
(98
|
)
|
(2
|
)
|
|||
Inventory impairment
|
—
|
|
(61
|
)
|
61
|
|
|||
Restructuring, impairment and other
|
(62
|
)
|
(162
|
)
|
100
|
|
|||
Separation and merger related costs
|
(34
|
)
|
(46
|
)
|
12
|
|
|||
Operating income (loss)
|
176
|
|
(41
|
)
|
218
|
|
|||
Other non operating income, net
|
21
|
|
2
|
|
19
|
|
|||
Interest expense, net
|
(59
|
)
|
(46
|
)
|
(13
|
)
|
|||
Income (loss) before income taxes and equity in loss of affiliate
|
138
|
|
(85
|
)
|
223
|
|
|||
Equity in loss of affiliate
|
—
|
|
(20
|
)
|
20
|
|
|||
Provision for income taxes
|
(67
|
)
|
(38
|
)
|
(29
|
)
|
|||
Net income (loss)
|
$
|
71
|
|
$
|
(143
|
)
|
$
|
214
|
|
(In millions)
|
2019
|
2018
|
||||
Operating activities
|
$
|
(143
|
)
|
$
|
290
|
|
Investing activities
|
(256
|
)
|
(135
|
)
|
||
Financing activities
|
(233
|
)
|
(1,561
|
)
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
101.INS*
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH*
|
|
XBRL Schema Document
|
101.CAL*
|
|
XBRL Calculation Linkbase Document
|
101.LAB*
|
|
XBRL Label Linkbase Document
|
101.PRE*
|
|
XBRL Presentation Linkbase Document
|
101.DEF*
|
|
XBRL Definition Linkbase Document
|
|
|
Baker Hughes, a GE company, LLC
(Registrant) |
|
|
|
|
|
Date:
|
April 30, 2019
|
By:
|
/s/ BRIAN WORRELL
|
|
|
Brian Worrell
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
Date:
|
April 30, 2019
|
By:
|
/s/ KURT CAMILLERI
|
|
|
Kurt Camilleri
|
|
|
|
Vice President, Controller and Chief Accounting Officer
|
|
|
|
||
Date:
|
April 30, 2019
|
By:
|
/s/ Lorenzo Simonelli
|
|
|
|
|
Lorenzo Simonelli
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
||
Date:
|
April 30, 2019
|
By:
|
/s/ Brian Worrell
|
|
|
|
|
Brian Worrell
|
|
|
|
|
Chief Financial Officer
|
|
|
|
(i)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(ii)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Lorenzo Simonelli
|
|
|
Name:
|
|
Lorenzo Simonelli
|
|
|
Title:
|
|
President and Chief Executive Officer
|
|
|
Date:
|
|
April 30, 2019
|
|
|
|
|
|
|
|
|
|
/s/ Brian Worrell
|
|
|
Name:
|
|
Brian Worrell
|
|
|
Title:
|
|
Chief Financial Officer
|
|
|
Date:
|
|
April 30, 2019
|
(1)
|
Amounts included are the total dollar value of proposed assessments received from MSHA during the three months ended March 31, 2019, regardless of whether the assessment has been challenged or appealed. Citations and orders can be contested and appealed, and as part of that process, are sometimes reduced in severity and amount, and sometimes dismissed. The number of citations, orders, and proposed assessments vary by inspector and also vary depending on the size and type of the operation.
|