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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81-4403168
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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, United States
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(Address of principal executive offices)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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(Do not check if a smaller reporting company)
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Page No
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||
(In millions, except per share amounts)
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2017
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2016
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2017
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2016
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||||||||
Revenue:
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||||||
Sales of goods
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$
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3,097
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$
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2,182
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$
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7,541
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$
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6,889
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Sales of services
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2,278
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842
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3,955
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2,864
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Total revenue
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5,375
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3,024
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11,496
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9,753
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Costs and expenses:
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Cost of goods sold
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2,589
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1,800
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6,341
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5,760
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Cost of services sold
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1,766
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494
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2,818
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1,680
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Selling, general and administrative expenses
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792
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475
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1,750
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1,476
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Restructuring, impairment and other
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191
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77
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292
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452
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Merger and related costs
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159
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2
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310
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10
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||||
Total costs and expenses
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5,497
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2,848
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11,511
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9,378
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Operating income (loss)
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(122
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)
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176
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(15
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)
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375
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Other non operating income (loss), net
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(3
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)
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6
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65
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18
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Interest expense, net
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(42
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)
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(21
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)
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(75
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)
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(74
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)
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Income (loss) before income taxes and equity in loss of affiliate
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(167
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)
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161
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(25
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)
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319
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Equity in loss of affiliate
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(13
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)
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—
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(13
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)
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—
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Provision for income taxes
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(93
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)
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(70
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)
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(122
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)
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(132
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)
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Net income (loss)
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(273
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)
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91
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(160
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)
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187
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Less: Net income attributable to GE O&G pre-merger
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—
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96
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109
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255
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Less: Net loss attributable to noncontrolling interests
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(169
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)
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(5
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(165
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)
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(68
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)
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Net loss attributable to Baker Hughes, a GE company
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$
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(104
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)
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$
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—
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$
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(104
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)
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$
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—
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Per share amounts:
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Basic and diluted loss per Class A common share
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$
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(0.24
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)
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$
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(0.24
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)
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Cash dividend per Class A common share
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$
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0.17
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$
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0.17
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Special dividend per Class A common share
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$
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17.50
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$
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17.50
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||
(In millions)
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2017
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2016
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2017
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2016
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Net income (loss)
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$
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(273
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)
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$
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91
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$
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(160
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)
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$
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187
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Less: Net income attributable to GE O&G pre-merger
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—
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96
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109
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255
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Less: Net loss attributable to noncontrolling interests
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(169
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)
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(5
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(165
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(68
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)
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Net loss attributable to Baker Hughes, a GE company
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(104
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—
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(104
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)
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—
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Other comprehensive income (loss):
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Investment securities
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1
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—
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2
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—
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Foreign currency translation adjustments
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272
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(140
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)
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207
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(161
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)
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Cash flow hedges
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9
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(1
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17
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(5
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)
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Benefit plans
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(4
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)
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31
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(6
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)
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69
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Other comprehensive income (loss)
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278
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(110
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)
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220
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(97
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)
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Less: Other comprehensive income (loss) attributable to GE O&G pre-merger
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—
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(113
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)
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(62
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)
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(99
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)
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Less: Other comprehensive income attributable to noncontrolling interests
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174
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3
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178
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2
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Other comprehensive income attributable to Baker Hughes, a GE company
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104
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—
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104
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—
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Comprehensive income (loss)
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5
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(19
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60
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90
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Less: Comprehensive income (loss) attributable to GE O&G pre-merger
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—
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(17
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)
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47
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156
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Less: Comprehensive income (loss) attributable to noncontrolling interests
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5
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(2
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13
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(66
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)
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Comprehensive income (loss) attributable to Baker Hughes, a GE company
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$
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—
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$
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—
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$
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—
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$
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—
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(In millions, except par value)
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September 30, 2017
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December 31, 2016
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||||
ASSETS
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||||||
Current assets:
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Cash and equivalents
(a)
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$
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4,777
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$
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981
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Current receivables, net
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5,194
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2,563
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Inventories, net
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5,309
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3,224
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All other current assets
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1,301
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633
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Total current assets
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16,581
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7,401
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Property, plant and equipment - less accumulated depreciation
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6,255
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2,325
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Goodwill
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20,395
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6,680
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Other intangible assets, net
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6,826
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2,449
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Contract assets
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2,761
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1,967
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All other assets
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1,668
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573
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Deferred income taxes
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324
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326
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Total assets
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$
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54,810
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$
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21,721
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LIABILITIES AND EQUITY
|
||||||
Current liabilities:
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||||
Accounts payable
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$
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3,203
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$
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1,898
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Short-term debt and current portion of long-term debt
(a)
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1,866
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239
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|
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Progress collections
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1,543
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1,596
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All other current liabilities
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2,120
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1,201
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Total current liabilities
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8,732
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4,934
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Long-term debt
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3,039
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38
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Deferred income taxes
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633
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880
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Liabilities for pensions and other postretirement benefits
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1,262
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519
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All other liabilities
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996
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495
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Equity:
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Class A Common Stock, $0.0001 par value - 2,000 authorized, 428 issued and outstanding as of September 30, 2017
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—
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—
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Class B Common Stock, $0.0001 par value - 1,250 authorized, 717 issued and outstanding as of September 30, 2017
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—
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—
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Capital in excess of par value
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15,716
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—
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Parent's net investment
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—
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16,582
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|
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Retained loss
|
(104
|
)
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—
|
|
||
Accumulated other comprehensive loss
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(627
|
)
|
(1,894
|
)
|
||
Baker Hughes, a GE company equity
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14,985
|
|
14,688
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|
||
Noncontrolling interests
|
25,163
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|
167
|
|
||
Total equity
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40,148
|
|
14,855
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|
||
Total liabilities and equity
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$
|
54,810
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$
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21,721
|
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(a)
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Cash and equivalents includes
$1,267 million
of cash at
September 30, 2017
held on behalf of GE, and a corresponding liability is reported in short-term borrowings. See "Note 16. Related Party Transactions" for further details.
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(In millions)
|
Class A
Common Stock
Shares Amount
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Class B
Common Stock
Shares Amount
|
Capital
in Excess
of
Par Value
|
Parent's Net Investment
|
Retained
Loss
|
Accumulated
Other
Comprehensive
Loss
|
Non-controlling
Interests
|
Total Equity
|
||||||||||||||||||||
Balance at December 31, 2016
|
—
|
|
$
|
—
|
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
16,582
|
|
$
|
—
|
|
$
|
(1,894
|
)
|
$
|
167
|
|
14,855
|
|
|
Net income
|
|
|
|
|
|
109
|
|
|
|
4
|
|
113
|
|
|||||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
(62
|
)
|
4
|
|
(58
|
)
|
|||||||||||||||
Changes in Parent's net investment
|
|
|
|
|
|
835
|
|
|
|
|
835
|
|
||||||||||||||||
Net activity related to noncontrolling interests
|
|
|
|
|
|
|
|
|
4
|
|
4
|
|
||||||||||||||||
Cash contribution received from GE
|
|
|
|
|
|
7,400
|
|
|
|
|
7,400
|
|
||||||||||||||||
Conversion of Parent's net investment into noncontrolling interest and issuance of Class B common stock
|
|
|
717
|
|
|
|
(24,926
|
)
|
|
|
24,926
|
|
—
|
|
||||||||||||||
Issuance of Class A common stock on acquisition of Baker Hughes
|
428
|
|
|
|
|
24,798
|
|
|
|
|
77
|
|
24,875
|
|
||||||||||||||
Special dividend ($17.50 per share)
|
|
|
|
|
(7,498
|
)
|
|
|
|
|
(7,498
|
)
|
||||||||||||||||
Reallocation of equity based on ownership of GE and previous Baker Hughes shareholders
|
|
|
|
|
(1,439
|
)
|
|
|
1,225
|
|
214
|
|
—
|
|
||||||||||||||
Activity after business combination of July 3, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss
|
|
|
|
|
|
|
(104
|
)
|
|
(169
|
)
|
(273
|
)
|
|||||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
104
|
|
174
|
|
278
|
|
|||||||||||||||
Cash dividend ($0.17 per share)
|
|
|
|
|
(76
|
)
|
|
|
|
(122
|
)
|
(198
|
)
|
|||||||||||||||
Net activity related to noncontrolling interests
|
|
|
|
|
(92
|
)
|
|
|
|
(116
|
)
|
(208
|
)
|
|||||||||||||||
Other
|
|
|
|
|
23
|
|
|
|
|
|
23
|
|
||||||||||||||||
Balance at September 30, 2017
|
428
|
|
$
|
—
|
|
717
|
|
$
|
—
|
|
$
|
15,716
|
|
$
|
—
|
|
$
|
(104
|
)
|
$
|
(627
|
)
|
$
|
25,163
|
|
$
|
40,148
|
|
(In millions)
|
Class A
Common Stock
Shares Amount
|
Class B
Common Stock
Shares Amount
|
Capital
in Excess
of
Par Value
|
Parent's Net Investment
|
Retained
Loss
|
Accumulated
Other
Comprehensive
Loss
|
Non-controlling
Interests
|
Total Equity
|
||||||||||
Balance at December 31, 2015
|
|
|
|
|
|
$
|
15,920
|
|
|
$
|
(1,532
|
)
|
$
|
157
|
|
$
|
14,545
|
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
|
|
|
|
255
|
|
|
|
(68
|
)
|
187
|
|
|||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
(99
|
)
|
2
|
|
(97
|
)
|
|||||
Changes in Parent's net investment
|
|
|
|
|
|
542
|
|
|
|
|
542
|
|
||||||
Other
|
|
|
|
|
|
|
|
|
87
|
|
87
|
|
||||||
Balance at September 30, 2016
|
|
|
|
|
|
$
|
16,717
|
|
|
$
|
(1,631
|
)
|
$
|
178
|
|
$
|
15,264
|
|
|
Nine Months Ended September 30,
|
|||||
(In millions)
|
2017
|
2016
|
||||
Cash flows from operating activities:
|
|
|
||||
Net income (loss)
|
$
|
(160
|
)
|
$
|
187
|
|
Less: Net loss attributable to noncontrolling interests
|
(165
|
)
|
(68
|
)
|
||
Net income after noncontrolling interests
|
5
|
|
255
|
|
||
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
|
|
|
||||
Depreciation and amortization
|
716
|
|
439
|
|
||
Provision for deferred income taxes
|
(20
|
)
|
(40
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
||||
Current receivables
|
(249
|
)
|
343
|
|
||
Inventories
|
162
|
|
11
|
|
||
Accounts payable
|
84
|
|
(271
|
)
|
||
Progress collections
|
(126
|
)
|
(566
|
)
|
||
Deferred charges
|
(600
|
)
|
(217
|
)
|
||
Other operating items, net
|
(557
|
)
|
(149
|
)
|
||
Net cash flows used in operating activities
|
(585
|
)
|
(195
|
)
|
||
Cash flows from investing activities:
|
|
|
||||
Expenditures for capital assets
|
(417
|
)
|
(330
|
)
|
||
Proceeds from disposal of assets
|
76
|
|
21
|
|
||
Net cash paid for acquisitions
|
(3,365
|
)
|
(1
|
)
|
||
Other investing items, net
|
(173
|
)
|
(36
|
)
|
||
Net cash flows used in investing activities
|
(3,879
|
)
|
(346
|
)
|
||
Cash flows from financing activities:
|
|
|
||||
Net repayments of short-term debt and other borrowings
|
(325
|
)
|
(188
|
)
|
||
Dividends paid
|
(76
|
)
|
—
|
|
||
Net transfer from Parent
|
1,574
|
|
552
|
|
||
Distributions to noncontrolling interest
|
(122
|
)
|
—
|
|
||
Contribution received from GE
|
7,400
|
|
—
|
|
||
Other financing items, net
|
(239
|
)
|
(135
|
)
|
||
Net cash flows from financing activities
|
8,212
|
|
229
|
|
||
Effect of currency exchange rate changes on cash and equivalents
|
48
|
|
(122
|
)
|
||
Increase/(decrease) in cash and equivalents
|
3,796
|
|
(434
|
)
|
||
Cash and equivalents, beginning of period
|
981
|
|
1,432
|
|
||
Cash and equivalents, end of period
|
$
|
4,777
|
|
$
|
998
|
|
Supplemental cash flows disclosures:
|
|
|
||||
Income taxes paid (refunded), net
|
$
|
122
|
|
$
|
(7
|
)
|
Interest paid
|
$
|
31
|
|
$
|
29
|
|
•
|
Level 1 - Quoted prices for identical instruments in active markets.
|
•
|
Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
|
•
|
Level 3 - Significant inputs to the valuation model are unobservable.
|
Purchase consideration
|
|
||
(In millions, except share and per share amounts)
|
July 3, 2017
|
||
Baker Hughes shares outstanding
|
426,097,407
|
|
|
Restricted stock units vested upon closing
|
1,611,566
|
|
|
Total Baker Hughes shares outstanding for purchase consideration
|
427,708,973
|
|
|
Baker Hughes share price on July 3, 2017 per share
|
$
|
57.68
|
|
Purchase consideration
|
$
|
24,670
|
|
Rollover of outstanding options into options to purchase Class A shares (fair value)
|
$
|
114
|
|
Precombination service of restricted stock units (fair value)
|
$
|
14
|
|
Total purchase consideration
|
$
|
24,798
|
|
Preliminary identifiable assets acquired and liabilities assumed
|
Estimated fair value at July 3, 2017
|
||
Assets
|
|
||
Cash and equivalents
|
$
|
4,133
|
|
Current receivables
|
2,378
|
|
|
Inventories
|
1,975
|
|
|
Property, plant and equipment
|
4,048
|
|
|
Other intangible assets
(a)
|
4,400
|
|
|
All other assets
|
1,314
|
|
|
Liabilities
|
|
||
Accounts payable
|
$
|
(1,115
|
)
|
Borrowings
|
(3,373
|
)
|
|
Deferred income taxes
(b)
|
(363
|
)
|
|
Liabilities for pension and other postretirement benefits
|
(684
|
)
|
|
All other liabilities
|
(1,291
|
)
|
|
Total identifiable net assets
|
$
|
11,422
|
|
Noncontrolling interest associated with net assets acquired
|
(77
|
)
|
|
Goodwill
(c)
|
13,453
|
|
|
Total purchase consideration
|
$
|
24,798
|
|
(a)
|
Intangible assets, as provided in the table below, are recorded at estimated fair value, as determined by management based on available information which includes a preliminary valuation. The estimated useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. We consider the Baker Hughes trade name to be an indefinite life intangible asset, which will not be amortized and will be subject to an annual impairment test.
|
|
Estimated Fair Value
|
Estimated Weighted
Average Life (Years) |
||
Customer relationships
|
$
|
1,300
|
|
15
|
Trade name - Baker Hughes
|
2,000
|
|
Indefinite-lived
|
|
Trade names - other
|
200
|
|
10
|
|
Developed technology
|
900
|
|
10
|
|
Total
|
$
|
4,400
|
|
|
(b)
|
Includes approximately
$468 million
of net deferred tax liabilities related to the estimated fair value of intangible assets included in the preliminary purchase consideration and approximately
$105 million
of other net deferred tax assets, including non-U.S. loss carryforwards net of valuation allowances and offsetting liabilities for unrecognized benefits.
|
(c)
|
Goodwill represents the excess of the total purchase consideration over fair value of the net assets recognized and represents the future economic benefits that we believe will result from combining the operations of GE O&G and Baker Hughes, including expected future synergies and operating efficiencies. Goodwill resulting from the Transactions has been preliminarily allocated to the Oilfield Services segment, of which
$67 million
is deductible for tax purposes.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||
Revenue
|
$
|
5,375
|
|
$
|
5,375
|
|
$
|
16,158
|
|
$
|
17,178
|
|
Net loss
|
(114
|
)
|
(362
|
)
|
(249
|
)
|
(2,436
|
)
|
||||
Net loss attributable to the Company
|
(44
|
)
|
(133
|
)
|
(55
|
)
|
(958
|
)
|
||||
Loss per Common A share - basic and diluted
(a)
|
(0.10
|
)
|
(0.31
|
)
|
(0.13
|
)
|
(2.24
|
)
|
(a)
|
The calculation of diluted loss per Common A share excludes shares potentially issuable under stock-based incentive compensation plans and the exchange of Class B shares with Class A shares under the Exchange Agreement, as their effect, if included, would be anti-dilutive.
|
|
September 30, 2017
|
December 31, 2016
|
||||
Customer receivables
|
$
|
3,808
|
|
$
|
1,699
|
|
Related parties
|
542
|
|
236
|
|
||
Other
|
1,075
|
|
814
|
|
||
Total current receivables
|
5,425
|
|
2,749
|
|
||
Less: Allowance for doubtful accounts
|
(231
|
)
|
(186
|
)
|
||
Total current receivables, net
|
$
|
5,194
|
|
$
|
2,563
|
|
|
September 30, 2017
|
December 31, 2016
|
||||
Finished goods
|
$
|
3,037
|
|
$
|
1,585
|
|
Work in process and raw material
|
2,272
|
|
1,639
|
|
||
Total inventories, net
|
$
|
5,309
|
|
$
|
3,224
|
|
|
September 30, 2017
|
December 31, 2016
|
||||
Land and improvements
|
$
|
348
|
|
$
|
130
|
|
Buildings, structures and related equipment
|
2,793
|
|
1,344
|
|
||
Machinery and equipment
|
5,700
|
|
2,916
|
|
||
Total cost
|
8,841
|
|
4,390
|
|
||
Less: Accumulated depreciation
|
(2,586
|
)
|
(2,065
|
)
|
||
Property, plant and equipment - less accumulated depreciation
|
$
|
6,255
|
|
$
|
2,325
|
|
|
Oilfield Services
|
Oilfield Equipment
|
Turbo-machinery & Process Solutions
|
Digital Solutions
|
Total
|
||||||||||
Balance at December 31, 2016, gross
|
$
|
3,203
|
|
$
|
3,428
|
|
$
|
1,814
|
|
$
|
1,989
|
|
$
|
10,434
|
|
Accumulated impairment at December 31, 2016
|
(2,997
|
)
|
(503
|
)
|
—
|
|
(254
|
)
|
(3,754
|
)
|
|||||
Balance at December 31, 2016
|
206
|
|
2,925
|
|
1,814
|
|
1,735
|
|
6,680
|
|
|||||
Acquisitions
(a)
|
13,453
|
|
—
|
|
—
|
|
—
|
|
13,453
|
|
|||||
Dispositions, currency exchange and others
|
(47
|
)
|
142
|
|
105
|
|
62
|
|
262
|
|
|||||
Balance at September 30, 2017
|
$
|
13,612
|
|
$
|
3,067
|
|
$
|
1,919
|
|
$
|
1,797
|
|
$
|
20,395
|
|
(a)
|
Includes goodwill associated with the acquisition of Baker Hughes. This amount and its allocations to segments are preliminary.
|
|
September 30, 2017
|
December 31, 2016
|
||||||||||||||||
|
Gross
Carrying Amount |
Accumulated
Amortization |
Net
|
Gross
Carrying Amount |
Accumulated
Amortization |
Net
|
||||||||||||
Technology
|
$
|
1,538
|
|
$
|
(451
|
)
|
$
|
1,087
|
|
$
|
596
|
|
$
|
(371
|
)
|
$
|
225
|
|
Customer relationships
|
3,267
|
|
(771
|
)
|
2,496
|
|
1,920
|
|
(660
|
)
|
1,260
|
|
||||||
Capitalized software
|
1,120
|
|
(664
|
)
|
456
|
|
896
|
|
(535
|
)
|
361
|
|
||||||
Trade names and trademarks
|
890
|
|
(156
|
)
|
734
|
|
681
|
|
(130
|
)
|
551
|
|
||||||
Other
|
2
|
|
(1
|
)
|
1
|
|
1
|
|
(1
|
)
|
—
|
|
||||||
Finite-lived intangible assets
|
6,817
|
|
(2,043
|
)
|
4,774
|
|
4,094
|
|
(1,697
|
)
|
2,397
|
|
||||||
Indefinite-lived intangible assets
(a)
|
2,052
|
|
—
|
|
2,052
|
|
52
|
|
—
|
|
52
|
|
||||||
Total intangible assets
|
$
|
8,869
|
|
$
|
(2,043
|
)
|
$
|
6,826
|
|
$
|
4,146
|
|
$
|
(1,697
|
)
|
$
|
2,449
|
|
(a)
|
Indefinite-lived intangible assets principally comprise trade names and trademarks acquired in business combinations.
|
Year
|
Estimated Amortization Expense
|
||
Remainder of 2017
|
$
|
108
|
|
2018
|
422
|
|
|
2019
|
397
|
|
|
2020
|
361
|
|
|
2021
|
345
|
|
|
2022
|
329
|
|
|
September 30, 2017
|
December 31, 2016
|
||||
Long-term product service agreements
(a)
|
$
|
1,408
|
|
$
|
1,046
|
|
Long-term equipment contract revenue
(b)
|
1,050
|
|
703
|
|
||
Total revenue in excess of billings
|
2,458
|
|
1,749
|
|
||
Deferred inventory costs
(c)
|
303
|
|
218
|
|
||
Contract assets
|
$
|
2,761
|
|
$
|
1,967
|
|
(a)
|
Reflects revenues earned in excess of billings on our long-term product service agreements.
|
(b)
|
Reflects revenues earned in excess of billings on our long-term contracts to construct technically complex equipment.
|
(c)
|
Represents cost deferral for shipped goods and other costs for which the criteria for revenue recognition has not yet been met.
|
|
September 30, 2017
|
December 31, 2016
|
||||
Short-term borrowings
|
|
|
||||
Short-term bank borrowings
|
$
|
202
|
|
$
|
79
|
|
Current portion of long-term borrowings
|
274
|
|
34
|
|
||
Short-term borrowings from GE
|
1,364
|
|
121
|
|
||
Other short-term borrowings
|
26
|
|
5
|
|
||
Total short-term borrowings
|
$
|
1,866
|
|
$
|
239
|
|
|
|
|
||||
Long-term borrowings
|
|
|
||||
7.5% Senior Notes due November 2018
|
$
|
557
|
|
$
|
—
|
|
3.2% Senior Notes due August 2021
|
527
|
|
—
|
|
||
8.55% Debentures due June 2024
|
142
|
|
—
|
|
||
6.875% Notes due January 2029
|
387
|
|
—
|
|
||
5.125% Notes due September 2040
|
1,310
|
|
—
|
|
||
Capital leases
|
89
|
|
1
|
|
||
Other long-term borrowings
|
27
|
|
37
|
|
||
Total long-term borrowings
|
3,039
|
|
38
|
|
||
Total borrowings
|
$
|
4,905
|
|
$
|
277
|
|
|
U.S. Pension Benefits
|
Non-U.S. Pension Benefits
|
Other Postretirement Benefits
|
|||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Service cost
|
$
|
12
|
|
$
|
3
|
|
$
|
4
|
|
$
|
1
|
|
$
|
1
|
|
$
|
—
|
|
Interest cost
|
12
|
|
5
|
|
6
|
|
2
|
|
2
|
|
—
|
|
||||||
Expected return on plan assets
|
(20
|
)
|
(8
|
)
|
(11
|
)
|
(1
|
)
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
1
|
|
||||||
Amortization of net actuarial loss
|
2
|
|
2
|
|
2
|
|
1
|
|
—
|
|
—
|
|
||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3
|
)
|
||||||
Net periodic cost (benefit)
|
$
|
6
|
|
$
|
2
|
|
$
|
1
|
|
$
|
3
|
|
$
|
2
|
|
$
|
(2
|
)
|
|
U.S. Pension Benefits
|
Non-U.S. Pension Benefits
|
Other Postretirement Benefits
|
|||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Service cost
|
$
|
17
|
|
$
|
8
|
|
$
|
7
|
|
$
|
5
|
|
$
|
2
|
|
$
|
1
|
|
Interest cost
|
23
|
|
17
|
|
9
|
|
9
|
|
4
|
|
4
|
|
||||||
Expected return on plan assets
|
(38
|
)
|
(25
|
)
|
(13
|
)
|
(10
|
)
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
(2
|
)
|
||||||
Amortization of net actuarial loss
|
4
|
|
6
|
|
5
|
|
5
|
|
(2
|
)
|
—
|
|
||||||
Curtailment/settlement gain
(a)
|
—
|
|
—
|
|
—
|
|
(26
|
)
|
(3
|
)
|
(2
|
)
|
||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8
|
)
|
||||||
Net periodic cost (benefit)
|
$
|
6
|
|
$
|
6
|
|
$
|
8
|
|
$
|
(17
|
)
|
$
|
(1
|
)
|
$
|
(7
|
)
|
(a)
|
The curtailment/settlement gain for the non-U.S. pension benefits for the nine months ended September 30, 2016 is primarily associated with
two
UK plans merging into the GE UK Pension Plan.
|
|
|
2017
|
||
Expected life (years)
|
|
6.0
|
|
|
Risk-free interest rate
|
|
2.1
|
%
|
|
Volatility
|
|
36.4
|
%
|
|
Dividend yield
|
|
1.2
|
%
|
|
Weighted average fair value per share at grant date
|
|
$
|
12.32
|
|
|
Number of
Options |
Weighted Average
Exercise Price Per Option |
|||
Conversion of Baker Hughes stock options outstanding on July 3, 2017
|
6,822
|
|
$
|
36.17
|
|
Granted
|
1,626
|
|
36.62
|
|
|
Exercised
|
(198
|
)
|
25.64
|
|
|
Expired
|
(260
|
)
|
63.11
|
|
|
Outstanding at September 30, 2017
|
7,990
|
|
$
|
35.65
|
|
Exercisable at September 30, 2017
|
6,364
|
|
$
|
35.40
|
|
|
Number of
Units |
Weighted Average
Grant Date Fair Value Per Unit |
|||
Conversion of Baker Hughes RSUs outstanding on July 3, 2017
|
1,720
|
|
$
|
40.18
|
|
Granted
|
2,114
|
|
36.75
|
|
|
Vested
|
(427
|
)
|
40.18
|
|
|
Forfeited
|
(14
|
)
|
40.03
|
|
|
Unvested balance at September 30, 2017
|
3,393
|
|
$
|
38.04
|
|
|
Investment Securities
|
Foreign Currency Translation Adjustments
|
Cash Flow Hedges
|
Benefit Plans
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at December 31, 2016
|
$
|
—
|
|
$
|
(1,801
|
)
|
$
|
(10
|
)
|
$
|
(83
|
)
|
$
|
(1,894
|
)
|
Other comprehensive income (loss) before reclassifications
|
40
|
|
217
|
|
12
|
|
(12
|
)
|
257
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(39
|
)
|
—
|
|
9
|
|
—
|
|
(30
|
)
|
|||||
Deferred taxes
|
1
|
|
(10
|
)
|
(4
|
)
|
6
|
|
(7
|
)
|
|||||
Other comprehensive income (loss)
|
2
|
|
207
|
|
17
|
|
(6
|
)
|
220
|
|
|||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests
|
2
|
|
172
|
|
5
|
|
(1
|
)
|
178
|
|
|||||
Less: Reallocation of AOCL based on ownership of GE and previous Baker Hughes shareholders
|
—
|
|
(1,169
|
)
|
(1
|
)
|
(55
|
)
|
(1,225
|
)
|
|||||
Balance at September 30, 2017
|
$
|
—
|
|
$
|
(597
|
)
|
$
|
3
|
|
$
|
(33
|
)
|
$
|
(627
|
)
|
|
Investment Securities
|
Foreign Currency Translation Adjustments
|
Cash Flow Hedges
|
Benefit Plans
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at December 31, 2015
|
$
|
—
|
|
$
|
(1,384
|
)
|
$
|
(2
|
)
|
$
|
(146
|
)
|
$
|
(1,532
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
(158
|
)
|
(39
|
)
|
120
|
|
(77
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
—
|
|
33
|
|
2
|
|
35
|
|
|||||
Deferred taxes
|
—
|
|
(3
|
)
|
1
|
|
(53
|
)
|
(55
|
)
|
|||||
Other comprehensive income (loss)
|
—
|
|
(161
|
)
|
(5
|
)
|
69
|
|
(97
|
)
|
|||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
(4
|
)
|
—
|
|
6
|
|
2
|
|
|||||
Balance at September 30, 2016
|
$
|
—
|
|
$
|
(1,541
|
)
|
$
|
(7
|
)
|
$
|
(83
|
)
|
$
|
(1,631
|
)
|
|
September 30, 2017
|
December 31, 2016
|
||||
GE's interest in BHGE LLC
|
$
|
25,022
|
|
$
|
—
|
|
Other noncontrolling interests
|
141
|
|
167
|
|
||
Total noncontrolling interests
|
$
|
25,163
|
|
$
|
167
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
(In millions, except per share amounts)
|
2017
|
2016
|
2017
|
2016
|
||||||||
Net income (loss)
|
$
|
(273
|
)
|
$
|
91
|
|
$
|
(160
|
)
|
$
|
187
|
|
Less: Net income attributable to GE O&G pre-merger
|
—
|
|
96
|
|
109
|
|
255
|
|
||||
Less: Net loss attributable to noncontrolling interests
|
(169
|
)
|
(5
|
)
|
(165
|
)
|
(68
|
)
|
||||
Net loss attributable to BHGE
|
$
|
(104
|
)
|
$
|
—
|
|
$
|
(104
|
)
|
$
|
—
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
||||||||
Class A basic & diluted
|
428
|
|
|
428
|
|
|
||||||
Net loss per share attributable to common stockholders:
|
|
|
|
|
||||||||
Class A basic & diluted
|
$
|
(0.24
|
)
|
|
$
|
(0.24
|
)
|
|
|
September 30, 2017
|
December 31, 2016
|
||||||||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Net Balance
|
Level 1
|
Level 2
|
Level 3
|
Net Balance
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Derivatives
|
$
|
—
|
|
$
|
212
|
|
$
|
—
|
|
$
|
212
|
|
$
|
—
|
|
$
|
318
|
|
$
|
—
|
|
$
|
318
|
|
Investment securities
|
99
|
|
—
|
|
171
|
|
270
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Total assets
|
99
|
|
212
|
|
171
|
|
482
|
|
—
|
|
318
|
|
—
|
|
318
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives
|
—
|
|
(196
|
)
|
—
|
|
(196
|
)
|
—
|
|
(375
|
)
|
—
|
|
(375
|
)
|
||||||||
Total liabilities
|
$
|
—
|
|
$
|
(196
|
)
|
$
|
—
|
|
$
|
(196
|
)
|
$
|
—
|
|
$
|
(375
|
)
|
$
|
—
|
|
$
|
(375
|
)
|
Balance at December 31, 2016
|
$
|
—
|
|
Additions as a result of business combination
|
179
|
|
|
Purchases
|
65
|
|
|
Proceeds at maturity
|
(71
|
)
|
|
Unrealized losses recognized in accumulated other comprehensive income (loss)
|
(2
|
)
|
|
Balance at September 30, 2017
|
$
|
171
|
|
|
September 30, 2017
|
December 31, 2016
|
||||||||||
|
Assets
|
(Liabilities)
|
Assets
|
(Liabilities)
|
||||||||
Derivatives accounted for as hedges
|
|
|
|
|
||||||||
Currency exchange contracts
|
$
|
10
|
|
$
|
—
|
|
$
|
2
|
|
$
|
(9
|
)
|
|
|
|
|
|
||||||||
Derivatives not accounted for as hedges
|
|
|
|
|
||||||||
Currency exchange contracts
|
202
|
|
(196
|
)
|
316
|
|
(366
|
)
|
||||
Total derivatives
|
$
|
212
|
|
$
|
(196
|
)
|
$
|
318
|
|
$
|
(375
|
)
|
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||||
Financial statement effects - cash flow hedges
|
2017
|
2016
|
2017
|
2016
|
||||||||
Condensed consolidated and combined statement of financial position changes:
|
|
|
|
|
||||||||
Fair value of derivatives increase (decrease)
|
$
|
9
|
|
$
|
(4
|
)
|
$
|
12
|
|
$
|
(39
|
)
|
Equity (increase) decrease
|
(9
|
)
|
4
|
|
(12
|
)
|
39
|
|
||||
|
|
|
|
|
||||||||
Income (loss) related to ineffectiveness
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Income (loss) effect of derivatives
(a)
|
—
|
|
(3
|
)
|
(9
|
)
|
(33
|
)
|
(a)
|
Offsets earnings effect of the hedged forecasted transaction
|
Currency forwards/swaps
|
|
U.S. dollar strengthens
|
|
U.S. dollar weakens
|
Pay U.S. dollars/receive foreign currency
|
|
Fair value decreases
|
|
Fair value increases
|
|
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||||
Financial statement effects - economic hedges
(a)
|
2017
|
2016
|
2017
|
2016
|
||||||||
Condensed consolidated and combined statement of financial position changes:
|
|
|
|
|
||||||||
Change in fair value of economic hedge increase (decrease)
(b)
|
$
|
59
|
|
$
|
(41
|
)
|
$
|
60
|
|
$
|
(126
|
)
|
Change in fair value of economic hedges which has current earnings offset from hedged assets/liabilities increase (decrease)
|
53
|
|
(1
|
)
|
53
|
|
(3
|
)
|
||||
Income (loss) effect of economic hedges on forecasted transactions with no current period earnings offset
(c)
|
$
|
6
|
|
$
|
(40
|
)
|
$
|
7
|
|
$
|
(123
|
)
|
(a)
|
Include both the realized and unrealized movements, as well as those which cover future cash flows yet to be recognized on the condensed consolidated and combined statement of financial position.
|
(b)
|
Include fair value changes in embedded derivatives.
|
(c)
|
Offset by the future earnings effects of economically hedged item.
|
Currency forwards/swaps
|
|
U.S. dollar strengthens
|
|
U.S. dollar weakens
|
Pay U.S. dollars/receive foreign currency
|
|
Fair value decreases
|
|
Fair value increases
|
Receive U.S. dollars/pay foreign currency
|
|
Fair value increases
|
|
Fair value decreases
|
|
|
|
|
|
Commodity derivatives
|
|
Price increases
|
|
Price decreases
|
Receive commodity/ pay fixed price
|
|
Fair value increases
|
|
Fair value decreases
|
Carrying amount related to derivatives
|
September 30, 2017
|
December 31, 2016
|
||||
Derivative assets
|
$
|
212
|
|
$
|
318
|
|
Derivative liabilities
|
(196
|
)
|
(375
|
)
|
||
Net derivatives
|
$
|
16
|
|
$
|
(57
|
)
|
|
Three Months Ended
|
Three Months Ended
|
||||||||||
|
September 30, 2017
|
September 30, 2016
|
||||||||||
Segments
|
Revenue
|
Income (Loss) before Income Taxes
|
Revenue
|
Income (Loss) before Income Taxes
|
||||||||
Oilfield Services
|
$
|
2,635
|
|
$
|
75
|
|
$
|
192
|
|
$
|
(66
|
)
|
Oilfield Equipment
|
600
|
|
(43
|
)
|
829
|
|
61
|
|
||||
Turbomachinery & Process Solutions
|
1,511
|
|
210
|
|
1,480
|
|
258
|
|
||||
Digital Solutions
|
629
|
|
87
|
|
523
|
|
101
|
|
||||
Total segment
|
5,375
|
|
329
|
|
3,024
|
|
354
|
|
||||
Corporate
|
—
|
|
(89
|
)
|
—
|
|
(75
|
)
|
||||
Inventory impairment
(a)
|
—
|
|
(12
|
)
|
—
|
|
(24
|
)
|
||||
Restructuring, impairment and other
|
—
|
|
(191
|
)
|
—
|
|
(77
|
)
|
||||
Merger and related costs
|
—
|
|
(159
|
)
|
—
|
|
(2
|
)
|
||||
Other non operating income (loss), net
|
—
|
|
(3
|
)
|
—
|
|
6
|
|
||||
Interest expense, net
|
—
|
|
(42
|
)
|
—
|
|
(21
|
)
|
||||
Total
|
$
|
5,375
|
|
$
|
(167
|
)
|
$
|
3,024
|
|
$
|
161
|
|
|
Nine Months Ended
|
Nine Months Ended
|
||||||||||
|
September 30, 2017
|
September 30, 2016
|
||||||||||
Segments
|
Revenue
|
Income (Loss) before Income Taxes
|
Revenue
|
Income (Loss) before Income Taxes
|
||||||||
Oilfield Services
|
$
|
3,077
|
|
$
|
(42
|
)
|
$
|
599
|
|
$
|
(164
|
)
|
Oilfield Equipment
|
1,965
|
|
9
|
|
2,693
|
|
190
|
|
||||
Turbomachinery & Process Solutions
|
4,841
|
|
707
|
|
4,950
|
|
942
|
|
||||
Digital Solutions
|
1,613
|
|
226
|
|
1,511
|
|
240
|
|
||||
Total segment
|
11,496
|
|
900
|
|
9,753
|
|
1,208
|
|
||||
Corporate
|
—
|
|
(282
|
)
|
—
|
|
(240
|
)
|
||||
Inventory impairment
(a)
|
—
|
|
(31
|
)
|
—
|
|
(131
|
)
|
||||
Restructuring, impairment and other
|
—
|
|
(292
|
)
|
—
|
|
(452
|
)
|
||||
Merger and related costs
|
—
|
|
(310
|
)
|
—
|
|
(10
|
)
|
||||
Other non operating income (loss), net
|
—
|
|
65
|
|
—
|
|
18
|
|
||||
Interest expense, net
|
—
|
|
(75
|
)
|
—
|
|
(74
|
)
|
||||
Total
|
$
|
11,496
|
|
$
|
(25
|
)
|
$
|
9,753
|
|
$
|
319
|
|
(a)
|
Charges for inventory impairments are reported in the "Cost of goods sold" caption of the condensed consolidated and combined statements of income (loss).
|
Segments
|
September 30, 2017
|
December 31, 2016
|
||||
Oilfield Services
(a)
|
$
|
33,505
|
|
$
|
3,266
|
|
Oilfield Equipment
|
8,887
|
|
9,406
|
|
||
Turbomachinery & Process Solutions
|
9,075
|
|
8,565
|
|
||
Digital Solutions
|
3,644
|
|
3,113
|
|
||
Total segment
|
55,111
|
|
24,350
|
|
||
Corporate and eliminations
(b)
|
(301
|
)
|
(2,629
|
)
|
||
Total
|
$
|
54,810
|
|
$
|
21,721
|
|
(a)
|
Goodwill acquired as a result of the Baker Hughes acquisition have preliminarily been allocated to Oilfield Services. See "Note 6. Goodwill and Other Intangible Assets" for further details.
|
(b)
|
Corporate and eliminations in total segment assets include adjustments of intercompany investments and receivables that are reflected within the total assets of the
four
reportable segments.
|
|
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
|
||
Transfers of receivables accounted for as sales
|
$
|
1,452
|
|
$
|
2,168
|
|
Balance at December 31, 2016, and 2015, respectively
|
$
|
74
|
|
$
|
100
|
|
Provisions
|
27
|
|
21
|
|
||
Expenditures
|
(33
|
)
|
(40
|
)
|
||
Other
(a)
|
97
|
|
(1
|
)
|
||
Balance at September 30, 2017, and 2016, respectively
|
$
|
165
|
|
$
|
80
|
|
(a)
|
Includes an increase of
$93 million
in the nine months ended September 30, 2017 as a result of the Baker Hughes acquisition.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||
Oilfield Services
|
$
|
118
|
|
$
|
13
|
|
$
|
141
|
|
$
|
119
|
|
Oilfield Equipment
|
31
|
|
2
|
|
41
|
|
38
|
|
||||
Turbomachinery & Process Solutions
|
16
|
|
12
|
|
38
|
|
47
|
|
||||
Digital Solutions
|
13
|
|
17
|
|
27
|
|
28
|
|
||||
Corporate
|
13
|
|
5
|
|
17
|
|
23
|
|
||||
Total
|
$
|
191
|
|
$
|
49
|
|
$
|
264
|
|
$
|
255
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||
Property, plant & equipment, net
(a)
|
$
|
68
|
|
$
|
13
|
|
$
|
80
|
|
$
|
84
|
|
Employee-related termination expenses
|
87
|
|
18
|
|
126
|
|
96
|
|
||||
Asset relocation costs
|
2
|
|
6
|
|
7
|
|
14
|
|
||||
EHS remediation costs
|
1
|
|
2
|
|
8
|
|
19
|
|
||||
Contract termination fees
|
16
|
|
5
|
|
21
|
|
31
|
|
||||
Other incremental costs
|
17
|
|
5
|
|
22
|
|
11
|
|
||||
Total
|
$
|
191
|
|
$
|
49
|
|
$
|
264
|
|
$
|
255
|
|
(a)
|
Includes
$74 million
for the nine months ended September 30, 2017 of accelerated depreciation related for certain activities associated with our restructuring plans.
|
•
|
North America onshore activity: we expect the increased activity in North America to continue to grow, however at a slower pace than seen in the first nine months of 2017. In the third quarter, we experienced a deceleration in rig count growth, as compared to the prior two quarters. We remain optimistic about the outlook, but expect the pace of growth to slow in the near term.
|
•
|
International onshore activity: we have seen a moderate increase in rig count activity and expect growth to continue, the pace at which is undetermined. We have seen signs of improvement, but due to continuous volatility, remain cautious as to growth expectations.
|
•
|
Offshore projects: due to the ongoing oil price volatility, we expect final investment decisions to continue to remain fluid. We have seen an increase in subsea tree awards in 2017, but do not expect a material amount of awards in the fourth quarter of 2017, and we continue to expect delays in major customer capital expenditures for the near term.
|
•
|
Liquefied Natural Gas projects: we believe the market continues to be oversupplied, and will remain in its current state for the next few years. We expect some final investment decisions to move forward in the short term. We do, however, view the long term economics of the LNG industry as positive given our outlook for supply and demand.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||
Brent oil price ($/Bbl)
(a)
|
$
|
52.11
|
|
$
|
45.79
|
|
$
|
51.82
|
|
$
|
41.67
|
|
WTI oil price ($/Bbl)
(b)
|
48.16
|
|
44.85
|
|
49.39
|
|
41.14
|
|
||||
Natural gas price ($/mmBtu)
(c)
|
2.95
|
|
2.88
|
|
3.01
|
|
2.34
|
|
(a)
|
Energy Information Administration (EIA) Europe Brent Spot Price per Barrel
|
(b)
|
EIA Cushing, OK WTI spot price
|
(c)
|
EIA Henry Hub Natural Gas Spot Price per million British Thermal Unit
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
||||||||
|
2017
|
2016
|
% Change
|
2017
|
2016
|
% Change
|
||||||
North America
|
1,154
|
|
600
|
|
92
|
%
|
1,068
|
|
600
|
|
78
|
%
|
International
|
947
|
|
936
|
|
1
|
%
|
948
|
|
966
|
|
(2
|
%)
|
Worldwide
|
2,101
|
|
1,536
|
|
37
|
%
|
2,016
|
|
1,566
|
|
29
|
%
|
|
Three Months Ended September 30,
|
$ Change
|
Nine Months Ended September 30,
|
$ Change
|
||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
||||||||||||
Oilfield Services
|
$
|
2,635
|
|
$
|
192
|
|
$
|
2,443
|
|
$
|
3,077
|
|
$
|
599
|
|
$
|
2,478
|
|
Oilfield Equipment
|
600
|
|
829
|
|
(229
|
)
|
1,965
|
|
2,693
|
|
(728
|
)
|
||||||
Turbomachinery & Process Solutions
|
1,511
|
|
1,480
|
|
31
|
|
4,841
|
|
4,950
|
|
(109
|
)
|
||||||
Digital Solutions
|
629
|
|
523
|
|
106
|
|
1,613
|
|
1,511
|
|
102
|
|
||||||
Total
|
$
|
5,375
|
|
$
|
3,024
|
|
$
|
2,351
|
|
$
|
11,496
|
|
$
|
9,753
|
|
$
|
1,743
|
|
|
Three Months Ended September 30,
|
$ Change
|
Nine Months Ended September 30,
|
$ Change
|
||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||||||||
Segment operating income (loss):
|
|
|
|
|
|
|
||||||||||||
Oilfield Services
|
$
|
75
|
|
$
|
(66
|
)
|
$
|
141
|
|
$
|
(42
|
)
|
$
|
(164
|
)
|
$
|
122
|
|
Oilfield Equipment
|
(43
|
)
|
61
|
|
(104
|
)
|
9
|
|
190
|
|
(181
|
)
|
||||||
Turbomachinery & Process Solutions
|
210
|
|
258
|
|
(48
|
)
|
707
|
|
942
|
|
(235
|
)
|
||||||
Digital Solutions
|
87
|
|
101
|
|
(14
|
)
|
226
|
|
240
|
|
(14
|
)
|
||||||
Total segment operating income (loss)
|
329
|
|
354
|
|
(25
|
)
|
900
|
|
1,208
|
|
(308
|
)
|
||||||
Corporate
|
(89
|
)
|
(75
|
)
|
(14
|
)
|
(282
|
)
|
(240
|
)
|
(42
|
)
|
||||||
Inventory impairment
|
(12
|
)
|
(24
|
)
|
12
|
|
(31
|
)
|
(131
|
)
|
100
|
|
||||||
Restructuring, impairment and other
|
(191
|
)
|
(77
|
)
|
(114
|
)
|
(292
|
)
|
(452
|
)
|
160
|
|
||||||
Merger and related costs
|
(159
|
)
|
(2
|
)
|
(157
|
)
|
(310
|
)
|
(10
|
)
|
(300
|
)
|
||||||
Operating income (loss)
|
(122
|
)
|
176
|
|
(298
|
)
|
(15
|
)
|
375
|
|
(390
|
)
|
||||||
Other non operating income (loss), net
|
(3
|
)
|
6
|
|
(9
|
)
|
65
|
|
18
|
|
47
|
|
||||||
Interest expense, net
|
(42
|
)
|
(21
|
)
|
(21
|
)
|
(75
|
)
|
(74
|
)
|
(1
|
)
|
||||||
Income (loss) before income taxes and equity in loss of affiliate
|
(167
|
)
|
161
|
|
(328
|
)
|
(25
|
)
|
319
|
|
(344
|
)
|
||||||
Equity in loss of affiliate
|
(13
|
)
|
—
|
|
(13
|
)
|
(13
|
)
|
—
|
|
(13
|
)
|
||||||
Provision for income taxes
|
(93
|
)
|
(70
|
)
|
(23
|
)
|
(122
|
)
|
(132
|
)
|
10
|
|
||||||
Net income (loss)
|
$
|
(273
|
)
|
$
|
91
|
|
$
|
(364
|
)
|
$
|
(160
|
)
|
$
|
187
|
|
$
|
(347
|
)
|
(In millions)
|
2017
|
2016
|
||||
Operating activities
|
$
|
(585
|
)
|
$
|
(195
|
)
|
Investing activities
|
(3,879
|
)
|
(346
|
)
|
||
Financing activities
|
8,212
|
|
229
|
|
Period
|
Total Number of Shares Purchased
(1)
|
Average
Price Paid
Per Share
(1)
|
Total Number of Shares Purchased as Part of a Publicly Announced Program
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program
|
|||||
July 3-31, 2017
|
160,468
|
|
$
|
37.22
|
|
—
|
$
|
—
|
|
August 1-31, 2017
|
11,820
|
|
$
|
35.67
|
|
—
|
$
|
—
|
|
September 1-30, 2017
|
3,748
|
|
$
|
34.63
|
|
—
|
$
|
—
|
|
Total
|
176,036
|
|
$
|
37.06
|
|
—
|
|
(1)
|
Represents shares purchased from employees to satisfy the tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock units.
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
101.INS*
|
|
XBRL Instance 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
(Registrant) |
|
|
|
|
|
Date:
|
October 30, 2017
|
By:
|
/s/ BRIAN WORRELL
|
|
|
Brian Worrell
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
Date:
|
October 30, 2017
|
By:
|
/s/ KURT CAMILLERI
|
|
|
Kurt Camilleri
|
|
|
|
Vice President, Controller and Chief Accounting Officer
|
Page
|
||
1.1
|
Place of Meetings
|
|
1.2
|
Annual Meeting
|
|
1.3
|
Special Meetings
|
|
1.4
|
Notice of Meetings
|
|
1.5
|
Voting List
|
|
1.6
|
Quorum
|
|
1.7
|
Adjournments
|
|
1.8
|
Proxies
|
|
1.9
|
Action at Meeting
|
|
1.10
|
Notice of Stockholder Business and Nominations
|
|
1.11
|
Conduct of Meetings
|
|
|
|
|
|
||
2.1
|
General Powers
|
|
2.2
|
Number, Election and Qualification
|
|
2.3
|
Chairman of the Board; Vice Chairman of the Board
|
|
2.4
|
Terms of Office
|
|
2.5
|
Quorum
|
|
2.6
|
Action at Meeting
|
|
2.7
|
Removal
|
|
2.8
|
Vacancies
|
|
2.9
|
Resignation
|
|
2.10
|
Regular Meetings
|
|
2.11
|
Special Meetings
|
|
2.12
|
Notice of Special Meetings
|
|
2.13
|
Meetings by Conference Communications Equipment
|
|
2.14
|
Action by Consent
|
|
2.15
|
Committees
|
|
2.16
|
Compensation of Directors
|
|
2.17
|
Interested Transactions
|
|
|
|
|
|
||
3.1
|
Titles
|
|
3.2
|
Election
|
|
3.3
|
Qualification
|
|
3.4
|
Tenure
|
|
3.5
|
Resignation and Removal
|
|
3.6
|
Vacancies
|
3.7
|
President; Chief Executive Officer
|
|
3.8
|
Vice Presidents
|
|
3.9
|
Secretary and Assistant Secretaries
|
|
3.10
|
Treasurer and Assistant Treasurers
|
|
3.11
|
Delegation of Authority
|
|
|
|
|
|
||
4.1
|
Issuance of Stock
|
|
4.2
|
Stock Certificates; Uncertificated Shares
|
|
4.3
|
Transfers
|
|
4.4
|
Lost, Stolen or Destroyed Certificates
|
|
4.5
|
Record Date
|
|
|
|
|
|
||
5.1
|
Fiscal Year
|
|
5.2
|
Corporate Seal
|
|
5.3
|
Waiver of Notice
|
|
5.4
|
Voting of Securities
|
|
5.5
|
Evidence of Authority
|
|
5.6
|
Certificate of Incorporation
|
|
5.7
|
Severability
|
|
5.8
|
Pronouns
|
|
5.9
|
Electronic Transmission
|
|
5.10
|
Certain Definitions
|
|
|
|
|
|
|
|
|
||
7.1
|
Right to Indemnification
|
|
7.2
|
Prepayment of Expenses
|
|
7.3
|
Authorization of Indemnification
|
|
7.4
|
Good Faith Defined
|
|
7.5
|
Right of Claimant to Bring Suit
|
|
7.6
|
Nonexclusivity of Indemnification and Advancement of Expenses
|
|
7.7
|
Priority of Corporation Obligations
|
|
7.8
|
Insurance
|
|
7.8
|
Certain Definitions
|
|
7.9
|
Survival of Indemnification and Advancement of Expenses
|
|
7.10
|
Contract Rights
|
|
|
|
|
|
|
|
(a)
|
as to each person, if any, whom the stockholder proposes to nominate for election or reelection as a director to the Board
|
(i)
|
all information relating to such person that is required to be disclosed, whether in a proxy statement, other filings required to be made in connection with solicitations of proxies for election of directors in a contested election contest, or as otherwise required, in each case pursuant to and in accordance with Section 14(a) of the Exchange Act, and the rules and regulations promulgated thereunder;
|
(ii)
|
such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary of the Corporation upon written request); such person’s written representation and agreement (in the form provided by the Secretary of the Corporation upon written request), (A) that such person is not and will not become party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “
Voting Commitment
”) that has not been disclosed to the Corporation or any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (B) that such person is not and will not become a party to any agreement, arrangement, or
|
(iii)
|
a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three (3) years, and any other material relationships, between or among the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, and their respective affiliates and associates, or any other person or persons (including their names) acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates or associates, or any other person or persons (including their names) acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant;
|
(iv)
|
any information that such person would be required to disclose pursuant to clauses (ii) and (iv) – (ix) of clause (c) of this paragraph (A)(2) of Section 1.10 if such person were a stockholder purporting to make a nomination or propose business pursuant thereto; and
|
(v)
|
an undertaking to notify the Corporation in writing of any change in the information called for by clauses (i) – (iv) as of the record date for notice of such meeting, by notice received by the Secretary of the Corporation at the principal executive offices of the Corporation not later than the tenth (10th) day following such record date;
|
(b)
|
as to any other business that the stockholder proposes to bring before the meeting,
|
(i)
|
a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the complete text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend any Corporation document, the language of the proposed amendment), the reasons for conducting such business at the annual meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and
|
(ii)
|
a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and their respective affiliates and associates, and any other person or persons (including their names) acting in concert therewith in connection with the proposal of such business by such stockholder; and
|
(c)
|
as to the stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination or proposal for other business is made, any of their respective affiliates or associates (including, if such stockholder or beneficial owner is an entity, as to each director, executive, managing member or control person of such entity), and any others acting in concert with any of the foregoing:
|
(i)
|
the name and address of such stockholder, as they appear on the Corporation’s books, such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing;
|
(ii)
|
the class or series and number of shares of capital stock of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder, such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing;
|
(iii)
|
a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among such stockholder and/or such beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, including, in the case of a nomination, the nominee;
|
(iv)
|
a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights with an exercise or conversion privilege or a
|
(v)
|
a description of any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder and such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, has the right to vote any shares of any security of the Corporation;
|
(vi)
|
any short interest of such stockholder and such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, in any security of the Corporation (for purposes of these Bylaws, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security);
|
(vii)
|
any rights to dividends on the shares of the Corporation owned beneficially by such stockholder and such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, that are separated or separable from the underlying shares of capital stock of the Corporation;
|
(viii)
|
any proportionate interest in shares of capital stock of the Corporation or Derivative Instruments, held, directly or indirectly, by a general or limited partnership in which such stockholder or such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the
|
(ix)
|
any performance related fees (other than an asset-based fee) that such stockholder and such beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, is entitled to based on any increase or decrease in the value of shares of capital stock of the Corporation or Derivative Instruments, if any;
|
(x)
|
a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such annual meeting and intends to appear in person or by proxy at the annual meeting to propose such business or nomination;
|
(xi)
|
a representation whether the stockholder or the beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, intends or is part of a group which intends (A) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (B) otherwise to solicit proxies or votes from stockholders in support of such proposal or nomination;
|
(xii)
|
any other information relating to such stockholder and beneficial owner, if any, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, required to be disclosed under the DGCL or in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal of other business and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder; and
|
(xiii)
|
an undertaking by the stockholder and beneficial owner, if any, to notify the Corporation in writing of any change in the information called for by clauses (i) – (xii) above as of the record date for such meeting, by notice received by the Secretary of the Corporation at the principal executive offices of the Corporation not later than the tenth (10th) day following such record date.
|
|
|
|
||
Date:
|
October 30, 2017
|
By:
|
/s/ Lorenzo Simonelli
|
|
|
|
|
Lorenzo Simonelli
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
||
Date:
|
October 30, 2017
|
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:
|
|
October 30, 2017
|
|
|
|
|
|
|
|
|
|
/s/ Brian Worrell
|
|
|
Name:
|
|
Brian Worrell
|
|
|
Title:
|
|
Chief Financial Officer
|
|
|
Date:
|
|
October 30, 2017
|