☑
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Baker Hughes Company
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Delaware
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81-4403168
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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17021 Aldine Westfield Road
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Houston,
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Texas
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77073-5101
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Class A Common Stock, $0.0001 Par Value per Share
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BKR
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New York Stock Exchange
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Large accelerated filer
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☑
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page No.
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•
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Transforming our core through leading product companies: We are focused on delivering more efficient products and services, integrated offerings, and outcome-based solutions to improve total project economics.
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•
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Lead with technology: We are expanding our digital and technology offerings to help facilitate better, safer, and more reliable operations for our customers, while improving our own operational and execution capabilities.
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•
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Lead the energy transition: We are positioning the Company as the leading energy technology company to enable the energy transition. We plan to grow across the gas value chain, and develop products and services to help the industry lower carbon emissions.
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•
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Scope and scale: We have global presence and a broad, diversified portfolio. Our products, services, and expertise serve the upstream, midstream/liquefied natural gas (LNG) and downstream sectors of the oil and gas industry, as well as broader chemical and industrial segments, matching energy leaders in many areas. We deliver through our four product companies (also referred to as operating segments): Oilfield Services; Oilfield Equipment; Turbomachinery & Process Solutions; and Digital Solutions as discussed below under "Products and Services," and each are among the top four providers in their respective segments.
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•
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Technology: Our culture is built on a heritage of innovation and invention in research and development, with complementary capabilities. Technology remains a differentiator for us, and a key enabler to drive the efficiency and productivity gains our customers need. We also have a range of technologies that support our customers' efforts to reduce their carbon footprint. We remain committed to investing in our products and services to maintain our leadership position across our offerings, including $687 million research & development spend in 2019.
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•
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Digital capabilities: We expect to benefit from the emerging demand for artificial intelligence (AI) based solutions as part of our customers’ digital transformation initiatives. Launched in 2019, our partnership with C3.ai will enable us to deliver AI that is faster, easier, and more scalable to drive outcomes for our customers. We will deliver existing technology to oil and gas customers and collaborate on new AI applications specific for oil and gas outcomes. We will also apply these applications internally to improve operational efficiencies. We are also leveraging advanced manufacturing techniques to transform our supply chain and design new parts and components that ultimately will lower costs and operational carbon emissions.
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•
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Energy transition solutions: We are positioned to support our customers' efforts to reduce their carbon footprint with a range of emissions-reduction products. This includes more efficient power generation and compression technology that reduces carbon emissions. We also have a range of inspection and sensor technology that can monitor and help reduce flaring and emissions.
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•
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The severity and duration of both the summer and the winter in North America can have a significant impact on activity levels. In Canada, the timing and duration of the spring thaw directly affects activity levels, which reach seasonal lows during the second quarter and build through the third and fourth quarters to a seasonal high in the first quarter.
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•
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Adverse weather conditions, such as hurricanes in the Gulf of Mexico, may interrupt or curtail our coastal and offshore drilling, or our customers’ operations, cause supply disruptions and result in a loss of revenue and damage to our equipment and facilities, which may or may not be insured.
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•
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Severe weather during the winter months normally results in reduced activity levels in the North Sea and Russia generally in the first quarter and may interrupt or curtail our operations, or our customers’ operations, in those areas and result in a loss of revenue.
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•
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Scheduled repair and maintenance of offshore facilities in the North Sea can reduce activity in the second and third quarters.
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•
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Many of our international oilfield customers increase orders for certain products and services in the fourth quarter.
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•
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Our process & pipeline business in the DS segment typically experiences lower sales during the first and fourth quarters of the year due to the Northern Hemisphere winter.
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•
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Our broader DS and TPS businesses typically experiences higher customer activity as a result of spending patterns in the second half of the year.
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Name
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Age
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Position and Background
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Lorenzo Simonelli
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46
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Chairman, President and Chief Executive Officer
Lorenzo Simonelli has been the Chairman of the Board of Directors of the Company since October 2017, and a Director, President and Chief Executive Officer of the Company since July 2017. Before joining the Company in July 2017, Mr. Simonelli was Senior Vice President, GE and President and Chief Executive Officer, GE Oil & Gas from October 2013 to July 2017. Before joining GE Oil & Gas, he was the President and Chief Executive Officer of GE Transportation from July 2008 to October 2013. Mr. Simonelli joined GE in 1994 and held various finance and leadership roles from 1994 to 2008.
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Name
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Age
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Position and Background
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Brian Worrell
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50
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Chief Financial Officer
Brian Worrell is the Chief Financial Officer of the Company. Prior to joining the Company in July 2017, he served as Vice President and Chief Financial Officer of GE Oil & Gas from January 2014 to July 2017. He previously held the position of Vice President, Financial Planning & Analysis for GE from 2010 to January 2014 and Vice President Corporate Audit Staff for GE from 2006 to 2010.
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Maria Claudia Borras
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51
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Executive Vice President, Oilfield Services
Maria Claudia Borras is the Executive Vice President, Oilfield Services of the Company. Before joining the Company in July 2017, she served as the Chief Commercial Officer of GE Oil & Gas from January 2015 to July 2017. Prior to joining GE Oil & Gas, she held various leadership positions at Baker Hughes Incorporated including President, Latin America from October 2013 to December 2014, President, Europe Region from August 2011 to October 2013, Vice President, Global Marketing from May 2009 to July 2011 and other leadership roles at Baker Hughes Incorporated from 1994 to April 2009.
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Kurt Camilleri
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45
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Senior Vice President, Controller and Chief Accounting Officer
Kurt Camilleri is the Senior Vice President, Controller and Chief Accounting Officer of the Company. Prior to joining the Company in July 2017, he served as the Global Controller for GE Oil & Gas from July 2013 to July 2017. Mr. Camilleri served as the Global Controller for GE Transportation from January 2013 to June 2013 and the Controller for Europe and Eastern and African Growth Markets for GE Healthcare from 2010 to January 2013. He began his career in 1996 with Pricewaterhouse in London, which subsequently became PricewaterhouseCoopers.
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Roderick Christie
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57
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Executive Vice President, Turbomachinery and Process Solutions
Rod Christie is the Executive Vice President, Turbomachinery & Process Solutions of the Company. Prior to joining the Company in July 2017, he served as the Chief Executive Officer of Turbomachinery & Process Solutions at GE Oil & Gas from January 2016 to July 2017. He served as the Chief Executive Officer of GE Oil & Gas’ Subsea Systems & Drilling Business from August 2011 to 2016 and held various other leadership positions within GE between 1999 to 2011.
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William D. Marsh
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57
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Chief Legal Officer
William D. Marsh is the Chief Legal Officer of the Company. Prior to joining the Company in July 2017, he served as the Vice President and General Counsel of Baker Hughes Incorporated from February 2013 to July 2017. He previously served as the Vice President-Legal for Western Hemisphere at Baker Hughes Incorporated from May 2009 to February 2013 and held various executive, legal and corporate roles within Baker Hughes Incorporated from 1998 to 2009. He was a partner at the law firm Ballard Spahr prior to joining Baker Hughes Incorporated in 1998.
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Derek Mathieson
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49
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Chief Marketing and Technology Officer
Derek Mathieson is the Chief Marketing and Technology Officer of the Company. Prior to joining the Company in July 2017, he served in various leadership roles at Baker Hughes Incorporated including Chief Integration Officer from October 2016 to July 2017; Chief Commercial Officer from May 2016 to October 2016; Chief Technology and Marketing Officer from September 2015 to May 2016; Chief Strategy Officer from October 2013 to September 2015; President, Western Hemisphere Operations from 2012 to 2013; President, Products and Technology from May 2009 to January 2012; and Chief Technology and Marketing Officer from December 2008 to May 2009.
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Neil Saunders
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50
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Executive Vice President, Oilfield Equipment
Neil Saunders is the Executive Vice President, Oilfield Equipment of the Company. Prior to joining the Company in July 2017, he served as the President and Chief Executive Officer of the Subsea Systems & Drilling business at GE Oil & Gas from July 2016 to July 2017 and the Senior Vice President for Subsea Production Systems from August 2011 to July 2016. He served in various leadership roles within GE Oil & Gas from 2007 to August 2011.
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Name
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Age
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Position and Background
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Uwem Ukpong
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48
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Executive Vice President, Global Operations
Uwem Ukpong is the Executive Vice President, Global Operations of the Company. Prior to this role, he served as the Chief Integration Officer of the Company from July 2017 to January 2018. He served as Vice President, Baker Hughes Integration for GE Oil & Gas from October 2016 to July 2017 and President and CEO of the GE Oil & Gas Surface Business from January 2016 to October 2016. He held various technical and leadership roles at Schlumberger from 1993 to 2015.
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Oilfield Services:
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Houston, Pasadena, and The Woodlands, Texas; Broken Arrow and Claremore, Oklahoma - all located in the United States; Leduc, Canada; Celle, Germany; Tananger, Norway; Aberdeen, Scotland; Liverpool, England; Macae, Brazil; Singapore, Singapore; Kakinada, India; Nimr, Oman; Abu Dhabi and Dubai, United Arab Emirates; Dhahran, Saudi Arabia; Luanda, Angola; Port Harcourt, Nigeria
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Oilfield Equipment:
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Houston and Humble, Texas - located in the United States; Montrose, Scotland; Nailsea, England; Niteroi, Brazil; Suzhou, China; Dammam, Saudi Arabia
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Turbomachinery & Process Solutions:
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Deer Park, Texas and Jacksonville, Florida - located in the United States; Florence and Massa, Italy; Le Creusot, France; Coimbatore, India
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Digital Solutions:
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Billerica, Massachusetts and Minden, Nevada - located in the United States; Groby, England; Shannon, Ireland; Hurth, Germany
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Period
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Total Number
of Shares
Purchased (1) |
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Average
Price Paid
Per Share (2)
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Total Number of
Shares Purchased as
Part of a Publicly
Announced Plan or Programs (3)
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Maximum Dollar Value
of Shares that May Yet Be
Purchased Under the Plan or Programs (3)
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|||||
October 1-31, 2019
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10,197
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$
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23.31
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—
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$
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18,690,655
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November 1-30, 2019
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64,823
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22.61
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—
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$
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18,690,655
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December 1-31, 2019
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6,300
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|
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23.52
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—
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$
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18,690,655
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Total
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81,320
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$
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22.76
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|
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—
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(1)
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Represents Class A common stock purchased from employees to satisfy the tax withholding obligations in connection with the vesting of restricted stock units and from the automatic exercise of certain stock options at their expiration.
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(2)
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Average price paid for Class A common stock purchased from employees to satisfy the tax withholding obligations in connection with the vesting of restricted stock units and from the automatic exercise of certain stock options at their expiration.
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(3)
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We did not repurchase any shares of Class A common stock in the fourth quarter of 2019. As of December 31, 2019, the stock repurchase program has been substantially completed.
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2014
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2015
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2016
|
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July 3,
2017
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||||||||
Baker Hughes Incorporated (BHI)
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$
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100.00
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|
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$
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83.26
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$
|
118.90
|
|
|
$
|
106.16
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S&P 500 Stock Index
|
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100.00
|
|
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101.38
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|
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113.51
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|
|
124.41
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|
||||
S&P 500 Oil and Gas Equipment and Services Index
|
|
100.00
|
|
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81.25
|
|
|
107.19
|
|
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125.84
|
|
|
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July 5,
2017
|
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December 31, 2017
|
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2018
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2019
|
||||||||
Baker Hughes Company (BKR)
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$
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100.00
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$
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85.84
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$
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59.73
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|
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$
|
73.44
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S&P 500 Stock Index
|
|
100.00
|
|
|
110.97
|
|
|
106.11
|
|
|
139.52
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||||
S&P 500 Oil and Gas Equipment and Services Index
|
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100.00
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|
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106.02
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|
|
62.06
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|
|
68.59
|
|
|
Year Ended December 31,(1)
|
||||||||||||||
(In millions, except per share amounts)
|
2019
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2018
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2017
|
2016
|
2015
|
||||||||||
Revenue
|
$
|
23,838
|
|
$
|
22,877
|
|
$
|
17,179
|
|
$
|
13,082
|
|
$
|
16,688
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
19,406
|
|
18,891
|
|
14,143
|
|
10,150
|
|
12,193
|
|
|||||
Selling, general and administrative
|
2,832
|
|
2,699
|
|
2,535
|
|
1,926
|
|
2,115
|
|
|||||
Restructuring, impairment and other (2)
|
342
|
|
433
|
|
412
|
|
516
|
|
411
|
|
|||||
Goodwill impairment (3)
|
—
|
|
—
|
|
—
|
|
—
|
|
2,080
|
|
|||||
Separation and merger related (4)
|
184
|
|
153
|
|
373
|
|
33
|
|
27
|
|
|||||
Operating income (loss)
|
1,074
|
|
701
|
|
(284
|
)
|
457
|
|
(138
|
)
|
|||||
Other non operating income (loss), net
|
(84
|
)
|
202
|
|
80
|
|
3
|
|
100
|
|
|||||
Interest expense, net
|
(237
|
)
|
(223
|
)
|
(131
|
)
|
(102
|
)
|
(120
|
)
|
|||||
Income (loss) before income taxes and equity in loss of affiliate
|
753
|
|
680
|
|
(335
|
)
|
358
|
|
(158
|
)
|
|||||
Equity in loss of affiliate
|
—
|
|
(139
|
)
|
(11
|
)
|
—
|
|
—
|
|
|||||
Income tax provision
|
(482
|
)
|
(258
|
)
|
(45
|
)
|
(173
|
)
|
(473
|
)
|
|||||
Net income (loss)
|
271
|
|
283
|
|
(391
|
)
|
185
|
|
(631
|
)
|
|||||
Less: Net income (loss) attributable to GE O&G pre-merger
|
—
|
|
—
|
|
42
|
|
254
|
|
(606
|
)
|
|||||
Less: Net income (loss) attributable to noncontrolling interests
|
143
|
|
88
|
|
(330
|
)
|
(69
|
)
|
(25
|
)
|
|||||
Net income (loss) attributable to Baker Hughes Company
|
$
|
128
|
|
$
|
195
|
|
$
|
(103
|
)
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||||||
Per share of common stock:
|
|
|
|
|
|
||||||||||
Basic income (loss) per Class A common share
|
$
|
0.23
|
|
$
|
0.46
|
|
$
|
(0.24
|
)
|
|
|
||||
Diluted income (loss) per Class A common share
|
0.23
|
|
0.45
|
|
(0.24
|
)
|
|
|
|||||||
|
|
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|
|
|
||||||||||
Dividend:
|
|
|
|
|
|
||||||||||
Cash dividend per Class A common share
|
$
|
0.72
|
|
$
|
0.72
|
|
$
|
0.35
|
|
|
|
||||
Special dividend per Class A common share
|
|
|
$
|
17.50
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
||||||||||
Cash and cash equivalents(5)
|
$
|
3,249
|
|
$
|
3,723
|
|
$
|
7,030
|
|
$
|
981
|
|
$
|
1,432
|
|
Total assets
|
53,369
|
|
52,439
|
|
56,500
|
|
21,466
|
|
23,133
|
|
|||||
Long-term debt
|
6,301
|
|
6,285
|
|
6,312
|
|
38
|
|
13
|
|
|||||
Total equity
|
34,499
|
|
35,013
|
|
38,410
|
|
14,280
|
|
14,545
|
|
(1)
|
The 2019 and 2018 results are not comparable to prior years as the results of BHI are included only from July 3, 2017. Additionally, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, and the related amendments with effect from January 1, 2016. Accordingly, 2015 period is not presented under the new revenue standard.
|
(2)
|
See "Note 21. Restructuring, Impairment and Other" of the Notes to Consolidated and Combined Financial Statements in Item 8 herein for further discussion.
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(3)
|
In performing the annual impairment test for goodwill in the third quarter of 2015 using data as of July 1 of that year, we determined that a step two test was required for a reporting unit within our OFS operating segment. As a consequence of the continued pressure on oil prices, the revised expected cash flows for this reporting unit resulted in a goodwill impairment charge of $2,080 million.
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(4)
|
See "Note 1. Basis of Presentation and Summary of Significant Accounting Policies " of the Notes to Consolidated and Combined Financial Statements in Item 8 herein for further discussion of separation and merger related costs.
|
(5)
|
Cash and cash equivalents includes $162 million and $747 million of cash held on behalf of GE at December 31, 2019 and 2018, respectively.
|
•
|
North America onshore activity: in 2019, we experienced a decline in rig count, as compared to 2018 driven by lower commodity prices over the year. We expect North American onshore activity will continue to decline in 2020. Over the long-term, we remain optimistic about the outlook.
|
•
|
International onshore activity: we have seen a moderate increase in rig count activity in 2019 and expect growth to continue into 2020, albeit at a slower rate. We expect most of the growth to come from Middle East, Latin America and Europe.
|
•
|
Offshore projects: we have seen stable customer activity and final investment decisions on offshore projects through 2019. We expect the offshore market fundamentals to support another solid year of orders with subsea tree awards in 2020 expected to remain relatively consistent with 2019. We expect to see continued growth in the flexible pipe market, following a strong orders performance in 2019.
|
•
|
Liquefied natural gas projects: we remain optimistic on the LNG market. While currently oversupplied, we believe a significant number of final investment decisions are needed to fill the projected supply-demand imbalance. In 2019, we have seen multiple large-scale LNG projects reach a positive final investment decision. We continue to view the long-term economics of the LNG industry as positive.
|
•
|
Refinery, petrochemical and industrial projects: in refining, we believe large, complex refineries should gain advantage in a more competitive, oversupplied landscape in 2019 as the industry globalizes and refiners position to meet local demand and secure export potential. The industrial market continues to grow as outdated infrastructure is replaced, policy changes come into effect and power is decentralized. We continue to see growing demand across these markets in 2020.
|
|
2019
|
|
2018
|
||||
Brent oil prices ($/Bbl) (1)
|
$
|
64.28
|
|
|
$
|
71.34
|
|
WTI oil prices ($/Bbl) (2)
|
56.98
|
|
|
65.23
|
|
||
Natural gas prices ($/mmBtu) (3)
|
2.56
|
|
|
3.15
|
|
(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
|
|
2019
|
|
2018
|
||
North America
|
1,077
|
|
|
1,223
|
|
International
|
1,097
|
|
|
988
|
|
Worldwide
|
2,174
|
|
|
2,211
|
|
|
Year Ended December 31,
|
$ Change
|
|||||||
|
2019
|
2018
|
From 2018 to 2019
|
||||||
Revenue:
|
|
|
|
||||||
Oilfield Services
|
$
|
12,889
|
|
$
|
11,617
|
|
$
|
1,272
|
|
Oilfield Equipment
|
2,921
|
|
2,641
|
|
280
|
|
|||
Turbomachinery & Process Solutions
|
5,536
|
|
6,015
|
|
(479
|
)
|
|||
Digital Solutions
|
2,492
|
|
2,604
|
|
(112
|
)
|
|||
Total
|
$
|
23,838
|
|
$
|
22,877
|
|
$
|
961
|
|
|
Year Ended December 31,
|
$ Change
|
|||||||
|
2019
|
2018
|
From 2018 to 2019
|
||||||
Segment operating income:
|
|
|
|
||||||
Oilfield Services
|
$
|
917
|
|
$
|
785
|
|
$
|
132
|
|
Oilfield Equipment
|
55
|
|
—
|
|
55
|
|
|||
Turbomachinery & Process Solutions
|
719
|
|
621
|
|
98
|
|
|||
Digital Solutions
|
343
|
|
390
|
|
(47
|
)
|
|||
Total segment operating income
|
2,035
|
|
1,796
|
|
239
|
|
|||
Corporate
|
(433
|
)
|
(405
|
)
|
(28
|
)
|
|||
Inventory impairment and related charges (1)
|
—
|
|
(105
|
)
|
105
|
|
|||
Restructuring, impairment and other
|
(342
|
)
|
(433
|
)
|
91
|
|
|||
Separation and merger related
|
(184
|
)
|
(153
|
)
|
(31
|
)
|
|||
Operating income
|
1,074
|
|
701
|
|
373
|
|
|||
Other non operating income (loss), net
|
(84
|
)
|
202
|
|
(286
|
)
|
|||
Interest expense, net
|
(237
|
)
|
(223
|
)
|
(14
|
)
|
|||
Income before income taxes and equity in loss of affiliate
|
753
|
|
680
|
|
73
|
|
|||
Equity in loss of affiliate
|
—
|
|
(139
|
)
|
139
|
|
|||
Provision for income taxes
|
(482
|
)
|
(258
|
)
|
(224
|
)
|
|||
Net income
|
$
|
271
|
|
$
|
283
|
|
$
|
(12
|
)
|
(1)
|
Inventory impairments and related charges are reported in the "Cost of goods sold" caption of the consolidated and combined statements of income (loss).
|
•
|
Comprehensive internal policies over such areas as anti-bribery; travel, entertainment, gifts and charitable donations to government officials and other parties; payments to commercial sales representatives; and, the use of non-U.S. police or military organizations for security purposes. In addition, there are policies and procedures to address customs requirements, visa processing risks, export and re-export controls, economic sanctions, anti-money laundering and anti-boycott laws.
|
•
|
Global structure of Legal Compliance Counsel and other professionals providing compliance advice, customized training and governance, as well as investigating concerns across all regions and countries where we do business.
|
•
|
Comprehensive employee compliance training program that combines instructor-led and web-based training modules tailored to the key risks that employees face on an ongoing basis.
|
•
|
Due diligence procedures for third parties who conduct business on our behalf, including commercial sales agents, administrative service providers, and professional consultants, as well as an enhanced risk-based process for classifying channel partners and suppliers.
|
•
|
Due diligence procedures for merger and acquisition activities.
|
•
|
Specifically tailored compliance risk assessments and audits focused on country and third party risk.
|
•
|
Compliance Review Board comprised of senior officers of the Company that meets quarterly to monitor effectiveness of the Compliance Program, as well as Product Company and regional compliance committees that meet quarterly.
|
•
|
Technology to monitor and report on compliance matters, including an internal investigations management system, a web-based anti-boycott reporting tool, global trade management systems and comprehensive watch list screening.
|
•
|
A compliance program designed to create an “Open Reporting Environment” where employees are encouraged to report any ethics or compliance matter without fear of retaliation, including a global network of trained employee ombudspersons, and a worldwide, 24-hour business helpline operated by a third party and available in approximately 150 languages.
|
•
|
Centralized finance organization with company-wide policies.
|
•
|
Anti-corruption audits of high-risk countries conducted by Legal Compliance and Internal Audit, as well as risk-based compliance audits of third parties conducted by Legal Compliance.
|
•
|
We have region-specific processes and procedures for management of HR related issues, including pre-hire screening of employees; a process to screen existing employees prior to promotion into select roles where they may be exposed to finance and/or corruption-related risks; and implementation of a global new hire compliance training module for all employees.
|
(In millions)
|
2019
|
2018
|
||||
Operating activities
|
$
|
2,126
|
|
$
|
1,762
|
|
Investing activities
|
(1,045
|
)
|
(578
|
)
|
||
Financing activities
|
(1,534
|
)
|
(4,363
|
)
|
|
Payments Due by Period
|
||||||||||||||||||
(In millions)
|
Total
|
|
Less Than
1 Year |
|
1 - 3
Years |
|
4 - 5
Years |
|
More Than
5 Years |
||||||||||
Total debt and finance lease obligations (1)
|
$
|
6,410
|
|
|
$
|
316
|
|
|
$
|
1,314
|
|
|
$
|
156
|
|
|
$
|
4,624
|
|
Estimated interest payments (2)
|
3,609
|
|
|
239
|
|
|
474
|
|
|
399
|
|
|
2,497
|
|
|||||
Operating leases (3)
|
1,020
|
|
|
230
|
|
|
312
|
|
|
160
|
|
|
318
|
|
|||||
Purchase obligations (4)
|
1,571
|
|
|
1,304
|
|
|
231
|
|
|
21
|
|
|
15
|
|
|||||
Total
|
$
|
12,610
|
|
|
$
|
2,089
|
|
|
$
|
2,331
|
|
|
$
|
736
|
|
|
$
|
7,454
|
|
(1)
|
Amounts represent the expected cash payments for the principal amounts related to our debt, including finance lease obligations. Amounts for debt do not include any deferred issuance costs or unamortized discounts or premiums including step up in the value of the debt on the acquisition of BHI. Expected cash payments for interest are excluded from these amounts. Total debt and finance lease obligations includes $273 million payable to GE and its affiliates. As there is no fixed payment schedule on the amount payable to GE and its affiliates we have classified it as payable in less than one year.
|
(2)
|
Amounts represent the expected cash payments for interest on our long-term debt and finance lease obligations.
|
(3)
|
Amounts represent the future minimum payments under operating leases with initial terms of one year or more. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
|
(4)
|
Purchase obligations include expenditures for capital assets for 2020 as well as agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
|
(In millions)
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total (2)
|
||||||||||||||
As of December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-term debt (1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,250
|
|
|
$
|
—
|
|
|
$
|
107
|
|
|
$
|
4,606
|
|
|
$
|
5,963
|
|
Weighted average interest rates
|
—
|
%
|
|
—
|
%
|
|
2.88
|
%
|
|
—
|
%
|
|
4.06
|
%
|
|
3.82
|
%
|
|
3.64
|
%
|
(1)
|
Fair market value of our fixed rate long-term debt, excluding finance leases, was $6.4 billion at December 31, 2019.
|
(2)
|
Amounts represent the principal value of our long-term debt outstanding and related weighted average interest rates at the end of the respective period.
|
/s/ LORENZO SIMONELLI
Lorenzo Simonelli
Chairman, President and
Chief Executive Officer
|
|
/s/ BRIAN WORRELL
Brian Worrell
Chief Financial Officer
|
|
/s/ KURT CAMILLERI
Kurt Camilleri
Senior Vice President, Controller and Chief Accounting Officer
|
–
|
questioning the Company's finance and project managers regarding progress to date based on the latest project reports and the costs expected to still be incurred until completion;
|
–
|
observing project review meetings performed by the Company and inspecting relevant minutes of those meetings to identify changes in the estimated costs expected to be incurred to complete the contract and related contract margins;
|
–
|
assessing the remaining estimated costs expected to be incurred by expenditure category on contracts in progress by comparing to the actual costs incurred during the current year for the selected project and similar projects; and
|
–
|
investigating changes to the contract margin when compared to the prior year's estimated contract margin.
|
–
|
evaluating the industry benchmark data used by the Company in developing its projected financial information;
|
–
|
evaluating the discount rates used by comparing them against a discount rate range that was independently developed using publicly available market data for comparable entities; and
|
–
|
performing sensitivity analysis related to key inputs including revenue growth rates, discount rates and projected operating profit.
|
|
Year Ended December 31,
|
||||||||
(In millions, except per share amounts)
|
2019
|
2018
|
2017
|
||||||
Revenue:
|
|
|
|
|
|||||
Sales of goods
|
$
|
13,689
|
|
$
|
13,113
|
|
$
|
11,062
|
|
Sales of services
|
10,149
|
|
9,764
|
|
6,117
|
|
|||
Total revenue
|
23,838
|
|
22,877
|
|
17,179
|
|
|||
Costs and expenses:
|
|
|
|
|
|||||
Cost of goods sold
|
11,798
|
|
11,524
|
|
9,486
|
|
|||
Cost of services sold
|
7,608
|
|
7,367
|
|
4,657
|
|
|||
Selling, general and administrative
|
2,832
|
|
2,699
|
|
2,535
|
|
|||
Restructuring, impairment and other
|
342
|
|
433
|
|
412
|
|
|||
Separation and merger related
|
184
|
|
153
|
|
373
|
|
|||
Total costs and expenses
|
22,764
|
|
22,176
|
|
17,463
|
|
|||
Operating income (loss)
|
1,074
|
|
701
|
|
(284
|
)
|
|||
Other non operating income (loss), net
|
(84
|
)
|
202
|
|
80
|
|
|||
Interest expense, net
|
(237
|
)
|
(223
|
)
|
(131
|
)
|
|||
Income (loss) before income taxes and equity in loss of affiliate
|
753
|
|
680
|
|
(335
|
)
|
|||
Equity in loss of affiliate
|
—
|
|
(139
|
)
|
(11
|
)
|
|||
Provision for income taxes
|
(482
|
)
|
(258
|
)
|
(45
|
)
|
|||
Net income (loss)
|
271
|
|
283
|
|
(391
|
)
|
|||
Less: Net income attributable to GE O&G pre-merger
|
—
|
|
—
|
|
42
|
|
|||
Less: Net income (loss) attributable to noncontrolling interests
|
143
|
|
88
|
|
(330
|
)
|
|||
Net income (loss) attributable to Baker Hughes Company
|
$
|
128
|
|
$
|
195
|
|
$
|
(103
|
)
|
|
|
|
|
||||||
Per share amounts:
|
|
|
|
||||||
Basic income (loss) per Class A common share
|
$
|
0.23
|
|
$
|
0.46
|
|
$
|
(0.24
|
)
|
Diluted income (loss) per Class A common share
|
$
|
0.23
|
|
$
|
0.45
|
|
$
|
(0.24
|
)
|
|
|
|
|
||||||
Cash dividend per Class A common share
|
$
|
0.72
|
|
$
|
0.72
|
|
$
|
0.35
|
|
Special dividend per Class A common share
|
|
|
|
$
|
17.50
|
|
|
Year Ended December 31,
|
||||||||
(In millions)
|
2019
|
2018
|
2017
|
||||||
Net income (loss)
|
$
|
271
|
|
$
|
283
|
|
$
|
(391
|
)
|
Less: Net income attributable to GE O&G pre-merger
|
—
|
|
—
|
|
42
|
|
|||
Less: Net income (loss) attributable to noncontrolling interests
|
143
|
|
88
|
|
(330
|
)
|
|||
Net income (loss) attributable to Baker Hughes Company
|
128
|
|
195
|
|
(103
|
)
|
|||
Other comprehensive income (loss):
|
|
|
|
||||||
Investment securities
|
2
|
|
(3
|
)
|
4
|
|
|||
Foreign currency translation adjustments
|
53
|
|
(502
|
)
|
(14
|
)
|
|||
Cash flow hedges
|
12
|
|
(4
|
)
|
12
|
|
|||
Benefit plans
|
(75
|
)
|
(64
|
)
|
55
|
|
|||
Other comprehensive income (loss)
|
(8
|
)
|
(573
|
)
|
57
|
|
|||
Less: Other comprehensive loss attributable to GE O&G pre-merger
|
—
|
|
—
|
|
(69
|
)
|
|||
Less: Other comprehensive income (loss) attributable to noncontrolling interests
|
(1
|
)
|
(343
|
)
|
80
|
|
|||
Other comprehensive income (loss) attributable to Baker Hughes Company
|
(7
|
)
|
(230
|
)
|
46
|
|
|||
Comprehensive income (loss)
|
263
|
|
(290
|
)
|
(334
|
)
|
|||
Less: Comprehensive loss attributable to GE O&G pre-merger
|
—
|
|
—
|
|
(27
|
)
|
|||
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
142
|
|
(255
|
)
|
(250
|
)
|
|||
Comprehensive income (loss) attributable to Baker Hughes Company
|
$
|
121
|
|
$
|
(35
|
)
|
$
|
(57
|
)
|
|
||||||
|
December 31,
|
|||||
(In millions, except par value)
|
2019
|
2018
|
||||
ASSETS
|
||||||
Current Assets:
|
|
|
||||
Cash and cash equivalents (1)
|
$
|
3,249
|
|
$
|
3,723
|
|
Current receivables, net
|
6,416
|
|
5,969
|
|
||
Inventories, net
|
4,608
|
|
4,620
|
|
||
All other current assets
|
949
|
|
659
|
|
||
Total current assets
|
15,222
|
|
14,971
|
|
||
Property, plant and equipment, less accumulated depreciation
|
6,240
|
|
6,228
|
|
||
Goodwill
|
20,690
|
|
20,717
|
|
||
Other intangible assets, net
|
5,381
|
|
5,719
|
|
||
Contract and other deferred assets
|
1,881
|
|
1,894
|
|
||
All other assets
|
3,001
|
|
1,838
|
|
||
Deferred income taxes
|
954
|
|
1,072
|
|
||
Total assets (1)
|
$
|
53,369
|
|
$
|
52,439
|
|
LIABILITIES AND EQUITY
|
||||||
Current Liabilities:
|
|
|
||||
Accounts payable
|
$
|
4,268
|
|
$
|
4,025
|
|
Short-term debt and current portion of long-term debt (1)
|
321
|
|
942
|
|
||
Progress collections and deferred income
|
2,870
|
|
1,765
|
|
||
All other current liabilities
|
2,555
|
|
2,288
|
|
||
Total current liabilities
|
10,014
|
|
9,020
|
|
||
Long-term debt
|
6,301
|
|
6,285
|
|
||
Deferred income taxes
|
51
|
|
143
|
|
||
Liabilities for pensions and other employee benefits
|
1,079
|
|
1,018
|
|
||
All other liabilities
|
1,425
|
|
960
|
|
||
Equity:
|
|
|
||||
Class A common stock, $0.0001 par value - 2,000 authorized, 650 and 513 issued and outstanding as of December 31, 2019 and 2018, respectively
|
—
|
|
—
|
|
||
Class B common stock, $0.0001 par value - 1,250 authorized, 377 and 522 issued and outstanding as of December 31, 2019 and 2018, respectively
|
—
|
|
—
|
|
||
Capital in excess of par value
|
23,565
|
|
18,659
|
|
||
Retained earnings (loss)
|
—
|
|
25
|
|
||
Accumulated other comprehensive loss
|
(1,636
|
)
|
(1,219
|
)
|
||
Baker Hughes Company equity
|
21,929
|
|
17,465
|
|
||
Noncontrolling interests
|
12,570
|
|
17,548
|
|
||
Total equity
|
34,499
|
|
35,013
|
|
||
Total liabilities and equity
|
$
|
53,369
|
|
$
|
52,439
|
|
(1)
|
Total assets include $273 million and $896 million of assets held on behalf of GE, of which $162 million and $747 million is cash and cash equivalents and $111 million and $149 million is investment securities at December 31, 2019 and 2018, respectively, and a corresponding amount of liability is reported in short-term borrowings. See "Note 19. Related Party Transactions" for further details.
|
(In millions, except per share amounts)
|
Class A and Class B Common Stock
|
Capital in Excess of Par Value
|
Parent's Net Investment
|
Retained Earnings (Loss)
|
Accumulated Other Comprehensive Loss
|
Non-controlling Interests
|
Total
|
|||||||||||||
Balance at December 31, 2016
|
—
|
|
$
|
—
|
|
$
|
16,001
|
|
$
|
—
|
|
$
|
(1,888
|
)
|
$
|
167
|
|
$
|
14,280
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
|
|
|
42
|
|
|
|
4
|
|
46
|
|
|||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
(69
|
)
|
3
|
|
(66
|
)
|
|||||||||
Changes in Parent's net investment
|
|
|
|
775
|
|
|
(13
|
)
|
|
762
|
|
|||||||||
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
|
|
|
|
(24,218
|
)
|
|
|
24,218
|
|
—
|
|
|||||||||
Issuance of Class A common stock on acquisition of BHI
|
|
|
24,798
|
|
|
|
|
76
|
|
24,874
|
|
|||||||||
Special dividend ($17.5 per share)
|
|
|
(7,498
|
)
|
|
|
|
|
(7,498
|
)
|
||||||||||
Reallocation of equity based on ownership of GE and previous BHI stockholders
|
|
|
(1,850
|
)
|
|
|
1,234
|
|
616
|
|
—
|
|
||||||||
Activity after business combination of July 3, 2017:
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss
|
|
|
|
|
(103
|
)
|
|
(334
|
)
|
(437
|
)
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
46
|
|
77
|
|
123
|
|
|||||||||
Stock-based compensation cost
|
|
|
37
|
|
|
|
|
|
37
|
|
||||||||||
Dividends on Class A Common Stock ($0.35 per share)
|
|
|
(155
|
)
|
|
|
|
|
(155
|
)
|
||||||||||
Distributions to GE
|
|
|
|
|
|
|
(251
|
)
|
(251
|
)
|
||||||||||
Net activity related to noncontrolling interests
|
|
(62
|
)
|
|
|
(13
|
)
|
(133
|
)
|
(208
|
)
|
|||||||||
Repurchase and cancellation of Class A and Class B common stock
|
|
(187
|
)
|
|
|
|
(314
|
)
|
(501
|
)
|
||||||||||
Balance at December 31, 2017
|
—
|
|
15,083
|
|
—
|
|
(103
|
)
|
(703
|
)
|
24,133
|
|
38,410
|
|
||||||
Effect of adoption of ASU 2016-16 on taxes
|
|
|
|
25
|
|
|
42
|
|
67
|
|
||||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
|
|
|
195
|
|
|
88
|
|
283
|
|
||||||||||
Other comprehensive loss
|
|
|
|
|
(230
|
)
|
(343
|
)
|
(573
|
)
|
||||||||||
Dividends on Class A Common Stock ($0.72 per share)
|
|
(224
|
)
|
|
(91
|
)
|
|
|
(315
|
)
|
||||||||||
Distributions to GE
|
|
|
|
|
|
(495
|
)
|
(495
|
)
|
|||||||||||
Effect of exchange of Class B common stock and associated BHGE LLC Units
|
|
4,043
|
|
|
|
(282
|
)
|
(3,761
|
)
|
—
|
|
|||||||||
Repurchase and cancellation of Class B common stock and associated BHGE LLC Units
|
|
|
|
|
|
(2,087
|
)
|
(2,087
|
)
|
|||||||||||
Repurchase and cancellation of Class A common stock
|
|
(374
|
)
|
|
|
|
|
(374
|
)
|
|||||||||||
Stock-based compensation cost
|
|
121
|
|
|
|
|
|
121
|
|
|||||||||||
Other
|
|
10
|
|
|
(1
|
)
|
(4
|
)
|
(29
|
)
|
(24
|
)
|
||||||||
Balance at December 31, 2018
|
—
|
|
18,659
|
|
—
|
|
25
|
|
(1,219
|
)
|
17,548
|
|
35,013
|
|
||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
|
|
|
|
|
|
128
|
|
|
|
143
|
|
271
|
|
||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(7
|
)
|
(1
|
)
|
(8
|
)
|
||||||
Dividends on Class A Common Stock ($0.72 per share)
|
|
|
(241
|
)
|
|
|
(154
|
)
|
|
|
|
|
(395
|
)
|
||||||
Distributions to GE
|
|
|
|
|
|
|
|
|
|
|
(350
|
)
|
(350
|
)
|
||||||
Effect of exchange of Class B common stock and associated BHGE LLC Units
|
|
|
4,847
|
|
|
|
|
|
(350
|
)
|
(4,497
|
)
|
—
|
|
||||||
Repurchase and cancellation of Class B common stock and associated BHGE LLC Units
|
|
|
|
|
|
|
|
|
|
|
(250
|
)
|
(250
|
)
|
||||||
Stock-based compensation cost
|
|
|
187
|
|
|
|
|
|
|
|
|
|
187
|
|
||||||
Other
|
|
|
113
|
|
|
|
1
|
|
(60
|
)
|
(23
|
)
|
31
|
|
||||||
Balance at December 31, 2019
|
—
|
|
$
|
23,565
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,636
|
)
|
$
|
12,570
|
|
$
|
34,499
|
|
|
Year Ended December 31,
|
||||||||
(In millions)
|
2019
|
2018
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
||||||
Net income (loss)
|
$
|
271
|
|
$
|
283
|
|
$
|
(391
|
)
|
Adjustments to reconcile net income (loss) to net cash flows from (used in) operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
1,418
|
|
1,486
|
|
1,103
|
|
|||
Provision (benefit) for deferred income taxes
|
51
|
|
(249
|
)
|
(333
|
)
|
|||
Loss (gain) on sale of business
|
138
|
|
(171
|
)
|
—
|
|
|||
Equity in loss of affiliate
|
—
|
|
139
|
|
11
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
||||||
Current receivables
|
(583
|
)
|
(204
|
)
|
(1,190
|
)
|
|||
Inventories
|
(200
|
)
|
(339
|
)
|
418
|
|
|||
Accounts payable
|
249
|
|
794
|
|
303
|
|
|||
Progress collections and deferred income
|
1,147
|
|
(27
|
)
|
(293
|
)
|
|||
Contract and other deferred assets
|
(60
|
)
|
129
|
|
(439
|
)
|
|||
Other operating items, net
|
(305
|
)
|
(79
|
)
|
12
|
|
|||
Net cash flows from (used in) operating activities
|
2,126
|
|
1,762
|
|
(799
|
)
|
|||
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
||||||
Expenditures for capital assets
|
(1,240
|
)
|
(995
|
)
|
(665
|
)
|
|||
Proceeds from disposal of assets
|
264
|
|
458
|
|
172
|
|
|||
Proceeds from business dispositions
|
77
|
|
453
|
|
20
|
|
|||
Net cash paid for acquisitions
|
—
|
|
(89
|
)
|
(3,365
|
)
|
|||
Net cash paid for business interests
|
(176
|
)
|
(530
|
)
|
(10
|
)
|
|||
Other investing items, net
|
30
|
|
125
|
|
(275
|
)
|
|||
Net cash flows used in investing activities
|
(1,045
|
)
|
(578
|
)
|
(4,123
|
)
|
|||
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
||||||
Net repayments of short-term borrowings
|
(542
|
)
|
(376
|
)
|
(663
|
)
|
|||
Proceeds from the issuance of long-term debt
|
525
|
|
—
|
|
3,928
|
|
|||
Repayments of long-term debt
|
(570
|
)
|
(684
|
)
|
(177
|
)
|
|||
Dividends paid
|
(395
|
)
|
(315
|
)
|
(155
|
)
|
|||
Distributions to GE
|
(350
|
)
|
(495
|
)
|
(251
|
)
|
|||
Repurchase of Class A common stock
|
—
|
|
(387
|
)
|
(174
|
)
|
|||
Repurchase of common units from GE by BHGE LLC
|
(250
|
)
|
(2,099
|
)
|
(303
|
)
|
|||
Net transfer from Parent
|
—
|
|
—
|
|
1,498
|
|
|||
Contribution received from GE
|
—
|
|
—
|
|
7,400
|
|
|||
Other financing items, net
|
48
|
|
(7
|
)
|
(184
|
)
|
|||
Net cash flows from (used in) financing activities
|
(1,534
|
)
|
(4,363
|
)
|
10,919
|
|
|||
Effect of currency exchange rate changes on cash and cash equivalents
|
(21
|
)
|
(128
|
)
|
52
|
|
|||
Increase (decrease) in cash and cash equivalents
|
(474
|
)
|
(3,307
|
)
|
6,049
|
|
|||
Cash and cash equivalents, beginning of period
|
3,723
|
|
7,030
|
|
981
|
|
|||
Cash and cash equivalents, end of period
|
$
|
3,249
|
|
$
|
3,723
|
|
$
|
7,030
|
|
|
|
|
|
||||||
Supplemental cash flows disclosures:
|
|
|
|
||||||
Income taxes paid, net of refunds
|
$
|
438
|
|
$
|
424
|
|
$
|
230
|
|
Interest paid
|
$
|
285
|
|
$
|
301
|
|
$
|
109
|
|
•
|
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.
|
Total Revenue
|
2019
|
2018
|
2017
|
||||||
U.S.
|
$
|
6,188
|
|
$
|
6,576
|
|
$
|
4,409
|
|
Non-U.S.
|
17,650
|
|
16,301
|
|
12,770
|
|
|||
Total
|
$
|
23,838
|
|
$
|
22,877
|
|
$
|
17,179
|
|
Preliminary identifiable assets acquired and liabilities assumed
|
Fair Value at July 3, 2017
|
||
Assets
|
|
||
Cash and equivalents
|
$
|
4,133
|
|
Current receivables
|
2,342
|
|
|
Inventories
|
1,712
|
|
|
Property, plant and equipment
|
4,514
|
|
|
Intangible assets (1)
|
4,005
|
|
|
All other assets
|
1,335
|
|
|
Liabilities
|
|
||
Accounts payable
|
$
|
(1,213
|
)
|
Borrowings
|
(3,370
|
)
|
|
Deferred income taxes (2)
|
(258
|
)
|
|
Liabilities for pension and other postretirement benefits
|
(654
|
)
|
|
All other liabilities
|
(1,676
|
)
|
|
Total identifiable net assets
|
$
|
10,870
|
|
Noncontrolling interest associated with net assets acquired
|
(35
|
)
|
|
Goodwill (3)
|
13,963
|
|
|
Total purchase consideration
|
$
|
24,798
|
|
(1)
|
Intangible assets, as provided in the table below, are recorded at fair value, as determined by management based on available information. The 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.
|
|
Fair Value
|
Weighted
Average Life (Years) |
||
Trade name - Baker Hughes
|
$
|
2,100
|
|
Indefinite life
|
Customer relationships
|
1,240
|
|
15
|
|
Patents and technology
|
465
|
|
10
|
|
In-process research and development
|
70
|
|
Indefinite life
|
|
Capitalized software
|
64
|
|
2
|
|
Trade names - other
|
45
|
|
10
|
|
Favorable lease contracts & others
|
21
|
|
10
|
|
Total
|
$
|
4,005
|
|
|
(2)
|
Includes approximately $500 million of net deferred tax liabilities related to the fair value of intangible assets included in the purchase consideration and approximately $242 million of other net deferred tax assets, including non-U.S. loss carryforwards net of valuation allowances partially offset by liabilities for unrecognized benefits.
|
(3)
|
Goodwill resulting from the Transactions has been primarily allocated to the Oilfield Services segment, of which $67 million is deductible for tax purposes.
|
|
2017
|
||
Revenue
|
$
|
21,841
|
|
Net loss
|
(485
|
)
|
|
Net loss attributable to the Company
|
(147
|
)
|
|
Loss per Class A share - basic and diluted (1)
|
(0.34
|
)
|
(1)
|
The calculation of diluted loss per Class 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 antidilutive.
|
|
2019
|
2018
|
||||
Customer receivables
|
$
|
5,448
|
|
$
|
4,974
|
|
Related parties
|
495
|
|
653
|
|
||
Other
|
796
|
|
669
|
|
||
Total current receivables
|
6,739
|
|
6,296
|
|
||
Less: Allowance for doubtful accounts
|
(323
|
)
|
(327
|
)
|
||
Total current receivables, net
|
$
|
6,416
|
|
$
|
5,969
|
|
|
2019
|
2018
|
||||
Finished goods
|
$
|
2,546
|
|
$
|
2,575
|
|
Work in process and raw materials
|
2,062
|
|
2,045
|
|
||
Total inventories, net
|
$
|
4,608
|
|
$
|
4,620
|
|
|
Useful Life
|
2019
|
2018
|
||||
Land and improvements (1)
|
8 - 20 years (1)
|
$
|
430
|
|
$
|
432
|
|
Buildings, structures and related equipment
|
5 - 40 years
|
2,870
|
|
2,854
|
|
||
Machinery, equipment and other
|
2 - 20 years
|
7,324
|
|
6,567
|
|
||
Total cost
|
|
10,624
|
|
9,853
|
|
||
Less: Accumulated depreciation
|
|
(4,384
|
)
|
(3,625
|
)
|
||
Property, plant and equipment, less accumulated depreciation
|
|
$
|
6,240
|
|
$
|
6,228
|
|
(1)
|
Useful life excludes land.
|
|
Oilfield Services
|
Oilfield Equipment
|
Turbo-machinery & Process Solutions
|
Digital Solutions
|
Total
|
||||||||||
Balance at December 31, 2017, gross
|
$
|
15,838
|
|
$
|
3,901
|
|
$
|
1,906
|
|
$
|
2,036
|
|
$
|
23,681
|
|
Accumulated impairment at December 31, 2017
|
(2,633
|
)
|
(867
|
)
|
—
|
|
(254
|
)
|
(3,754
|
)
|
|||||
Balance at December 31, 2017
|
13,205
|
|
3,034
|
|
1,906
|
|
1,782
|
|
19,927
|
|
|||||
Purchase accounting adjustments (1)
|
(136
|
)
|
293
|
|
394
|
|
429
|
|
980
|
|
|||||
Currency exchange and others
|
(26
|
)
|
(17
|
)
|
(114
|
)
|
(33
|
)
|
(190
|
)
|
|||||
Balance at December 31, 2018
|
13,043
|
|
3,310
|
|
2,186
|
|
2,178
|
|
20,717
|
|
|||||
Currency exchange and others
|
—
|
|
9
|
|
(15
|
)
|
(21
|
)
|
(27
|
)
|
|||||
Balance at December 31, 2019
|
$
|
13,043
|
|
$
|
3,319
|
|
$
|
2,171
|
|
$
|
2,157
|
|
$
|
20,690
|
|
(1)
|
Includes goodwill associated with the acquisition of BHI. The final determination of fair value of the assets and liabilities and the related goodwill associated with the acquisition of BHI was concluded in the second quarter of 2018. Of the total goodwill of $13,963 million resulting from the acquisition of BHI, $12,898 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.
|
|
2019
|
2018
|
||||||||||||||||
|
Gross
Carrying Amount |
Accumulated
Amortization |
Net
|
Gross
Carrying Amount |
Accumulated
Amortization |
Net
|
||||||||||||
Technology
|
$
|
1,075
|
|
$
|
(626
|
)
|
$
|
449
|
|
$
|
1,107
|
|
$
|
(526
|
)
|
$
|
581
|
|
Customer relationships
|
3,027
|
|
(1,045
|
)
|
1,982
|
|
3,085
|
|
(944
|
)
|
2,141
|
|
||||||
Capitalized software
|
1,193
|
|
(928
|
)
|
265
|
|
1,118
|
|
(824
|
)
|
294
|
|
||||||
Trade names and trademarks
|
696
|
|
(254
|
)
|
442
|
|
698
|
|
(229
|
)
|
469
|
|
||||||
Other
|
3
|
|
(2
|
)
|
1
|
|
14
|
|
(2
|
)
|
12
|
|
||||||
Finite-lived intangible assets
|
5,994
|
|
(2,855
|
)
|
3,139
|
|
6,022
|
|
(2,525
|
)
|
3,497
|
|
||||||
Indefinite-lived intangible assets (1)
|
2,242
|
|
—
|
|
2,242
|
|
2,222
|
|
—
|
|
2,222
|
|
||||||
Total intangible assets
|
$
|
8,236
|
|
$
|
(2,855
|
)
|
$
|
5,381
|
|
$
|
8,244
|
|
$
|
(2,525
|
)
|
$
|
5,719
|
|
(1)
|
Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name.
|
Year
|
Estimated Amortization Expense
|
||
2020
|
$
|
335
|
|
2021
|
287
|
|
|
2022
|
243
|
|
|
2023
|
226
|
|
|
2024
|
216
|
|
|
2019
|
2018
|
||||
Long-term product service agreements
|
$
|
603
|
|
$
|
609
|
|
Long-term equipment contracts (1)
|
1,097
|
|
1,085
|
|
||
Contract assets (total revenue in excess of billings)
|
1,700
|
|
1,694
|
|
||
Deferred inventory costs
|
130
|
|
179
|
|
||
Non-recurring engineering costs
|
51
|
|
21
|
|
||
Contract and other deferred assets
|
$
|
1,881
|
|
$
|
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.
|
|
2019
|
2018
|
||||
Progress collections
|
$
|
2,760
|
|
$
|
1,600
|
|
Deferred income
|
110
|
|
165
|
|
||
Progress collections and deferred income (contract liabilities)
|
$
|
2,870
|
|
$
|
1,765
|
|
Operating Lease Expense
|
2019
|
||
Long-term fixed lease
|
$
|
233
|
|
Long-term variable lease
|
48
|
|
|
Short-term lease (1)
|
706
|
|
|
Total operating lease expense
|
$
|
987
|
|
(1)
|
Leases with a term of one year or less, including leases with a term of one month or less
|
Year
|
Operating Leases
|
||
2020
|
$
|
230
|
|
2021
|
173
|
|
|
2022
|
139
|
|
|
2023
|
95
|
|
|
2024
|
65
|
|
|
Thereafter
|
318
|
|
|
Total lease payments
|
1,020
|
|
|
Less: imputed interest
|
178
|
|
|
Total
|
$
|
842
|
|
|
Operating Leases
|
||
All other current liabilities
|
$
|
201
|
|
All other liabilities
|
641
|
|
|
Total
|
$
|
842
|
|
|
2019
|
2018
|
||||||||
|
Amount
|
Weighted Average Rate(1)
|
Amount
|
Weighted Average Rate(1)
|
||||||
Short-term borrowings
|
|
|
|
|
||||||
Short-term borrowings from GE
|
$
|
273
|
|
n/a
|
|
$
|
896
|
|
n/a
|
|
Other short-term borrowings
|
48
|
|
4.8
|
%
|
46
|
|
9.9
|
%
|
||
Total short-term borrowings
|
321
|
|
|
|
942
|
|
|
|||
|
|
|
|
|
||||||
Long-term borrowings
|
|
|
|
|
||||||
3.2% Senior Notes due August 2021 (2)
|
—
|
|
n/a
|
|
523
|
|
2.5
|
%
|
||
2.773% Senior Notes due December 2022
|
1,246
|
|
2.9
|
%
|
1,245
|
|
2.9
|
%
|
||
8.55% Debentures due June 2024 (2)
|
127
|
|
4.1
|
%
|
131
|
|
4.1
|
%
|
||
3.337% Senior Notes due December 2027
|
1,343
|
|
3.4
|
%
|
1,343
|
|
3.4
|
%
|
||
6.875% Notes due January 2029 (2)
|
289
|
|
3.9
|
%
|
294
|
|
3.9
|
%
|
||
3.138% Senior Notes due November 2029
|
522
|
|
3.2
|
%
|
—
|
|
n/a
|
|
||
5.125% Notes due September 2040 (2)
|
1,301
|
|
4.2
|
%
|
1,306
|
|
4.2
|
%
|
||
4.080% Senior Notes due December 2047
|
1,337
|
|
4.1
|
%
|
1,336
|
|
4.1
|
%
|
||
Other long-term borrowings
|
136
|
|
3.4
|
%
|
107
|
|
5.3
|
%
|
||
Total long-term borrowings
|
6,301
|
|
|
6,285
|
|
|
||||
Total borrowings
|
$
|
6,622
|
|
|
|
$
|
7,227
|
|
|
|
(1)
|
Weighted average effective interest rate is based on the carrying value including step-up adjustments, as applicable, recorded upon the acquisition of BHI.
|
(2)
|
Represents long-term fixed rate debt obligations assumed in connection with the acquisition of BHI, net of amounts repurchased subsequent to the closing of the Transactions.
|
|
2020
|
2021
|
2022
|
2023
|
2024
|
Thereafter
|
||||||||||||
Total debt
|
$
|
321
|
|
$
|
40
|
|
$
|
1,275
|
|
$
|
28
|
|
$
|
148
|
|
$
|
4,810
|
|
|
Pension Benefits
|
Other Postretirement
Benefits
|
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Change in benefit obligation:
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
2,261
|
|
$
|
2,418
|
|
$
|
107
|
|
$
|
187
|
|
Service cost
|
21
|
|
21
|
|
1
|
|
2
|
|
||||
Interest cost
|
90
|
|
71
|
|
4
|
|
5
|
|
||||
Plan amendment
|
—
|
|
20
|
|
—
|
|
1
|
|
||||
Actuarial loss (gain)
|
301
|
|
(93
|
)
|
(16
|
)
|
(23
|
)
|
||||
Benefits paid
|
(102
|
)
|
(67
|
)
|
(16
|
)
|
(21
|
)
|
||||
Curtailments
|
(21
|
)
|
(7
|
)
|
—
|
|
(5
|
)
|
||||
Settlements
|
(36
|
)
|
(59
|
)
|
—
|
|
—
|
|
||||
Transfer from GE - UK Plan
|
837
|
|
—
|
|
—
|
|
—
|
|
||||
Other
|
15
|
|
16
|
|
—
|
|
(39
|
)
|
||||
Foreign currency translation adjustments
|
85
|
|
(59
|
)
|
—
|
|
—
|
|
||||
Benefit obligation at end of year
|
3,451
|
|
2,261
|
|
80
|
|
107
|
|
||||
|
|
|
|
|
||||||||
Change in plan assets:
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
1,866
|
|
2,059
|
|
—
|
|
—
|
|
||||
Actual return on plan assets
|
314
|
|
(60
|
)
|
—
|
|
—
|
|
||||
Employer contributions
|
23
|
|
51
|
|
16
|
|
21
|
|
||||
Benefits paid
|
(102
|
)
|
(67
|
)
|
(16
|
)
|
(21
|
)
|
||||
Settlements
|
(36
|
)
|
(59
|
)
|
—
|
|
—
|
|
||||
Transfer from GE - UK Plan
|
851
|
|
—
|
|
—
|
|
—
|
|
||||
Other
|
—
|
|
(9
|
)
|
—
|
|
—
|
|
||||
Foreign currency translation adjustments
|
88
|
|
(49
|
)
|
—
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
3,004
|
|
1,866
|
|
—
|
|
—
|
|
||||
|
|
|
|
|
||||||||
Funded status - underfunded at end of year
|
$
|
(447
|
)
|
$
|
(395
|
)
|
$
|
(80
|
)
|
$
|
(107
|
)
|
|
|
|
|
|
||||||||
Accumulated benefit obligation
|
$
|
3,401
|
|
$
|
2,225
|
|
$
|
80
|
|
$
|
107
|
|
|
Pension Benefits
|
Other Postretirement
Benefits
|
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Noncurrent assets
|
$
|
78
|
|
$
|
47
|
|
$
|
—
|
|
$
|
—
|
|
Current liabilities
|
(17
|
)
|
(13
|
)
|
(11
|
)
|
(19
|
)
|
||||
Noncurrent liabilities
|
(508
|
)
|
(429
|
)
|
(69
|
)
|
(88
|
)
|
||||
Net amount recognized
|
$
|
(447
|
)
|
$
|
(395
|
)
|
$
|
(80
|
)
|
$
|
(107
|
)
|
|
Pension Benefits
|
Other Postretirement
Benefits
|
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Projected benefit obligation
|
$
|
1,814
|
|
$
|
1,621
|
|
n/a
|
|
n/a
|
|
||
Accumulated benefit obligation
|
$
|
1,763
|
|
$
|
1,585
|
|
$
|
80
|
|
$
|
107
|
|
Fair value of plan assets
|
$
|
1,288
|
|
$
|
1,179
|
|
n/a
|
|
n/a
|
|
|
Pension Benefits
|
Other Postretirement
Benefits
|
|||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
37
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
90
|
|
|
71
|
|
|
51
|
|
|
4
|
|
|
5
|
|
|
6
|
|
||||||
Expected return on plan assets
|
(122
|
)
|
|
(121
|
)
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
1
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(5
|
)
|
|
(3
|
)
|
||||||
Amortization of net actuarial loss (gain)
|
17
|
|
|
10
|
|
|
12
|
|
|
(7
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Curtailment / settlement loss (gain)
|
9
|
|
|
2
|
|
|
(45
|
)
|
(1)
|
—
|
|
|
(5
|
)
|
|
2
|
|
||||||
Net periodic cost (income)
|
$
|
16
|
|
|
$
|
(17
|
)
|
|
$
|
(26
|
)
|
|
$
|
(5
|
)
|
|
$
|
(5
|
)
|
|
$
|
5
|
|
(1)
|
As a result of the acquisition of BHI, we obtained a non-contributory pension plan (the Baker Hughes Incorporated Pension Plan or BHIPP). In 2017, the Compensation Committee of the Board of Directors approved amendments to the BHIPP to close the plan to new participants and freeze accruals of future service-related benefits effective as of December 31, 2017. As a result of these actions, the Company recorded a curtailment gain of $45 million. The curtailment was recorded by the Company during the fourth quarter of 2017 and included in the “Other non operating income (loss), net” caption of the consolidated and combined statements of income (loss).
|
|
Pension Benefits
|
Other Postretirement
Benefits
|
||||||
|
2019
|
2018
|
2019
|
2018
|
||||
Discount rate
|
2.34
|
%
|
3.43
|
%
|
2.89
|
%
|
3.92
|
%
|
Rate of compensation increase
|
3.11
|
%
|
3.78
|
%
|
n/a
|
|
n/a
|
|
|
Pension Benefits
|
Other Postretirement
Benefits
|
||||||||||
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
||||||
Discount rate
|
3.43
|
%
|
2.99
|
%
|
3.24
|
%
|
3.92
|
%
|
3.32
|
%
|
3.72
|
%
|
Expected long-term return on plan assets
|
5.48
|
%
|
5.94
|
%
|
6.26
|
%
|
n/a
|
|
n/a
|
|
n/a
|
|
|
Pension Benefits
|
Other Postretirement
Benefits
|
||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||
Net actuarial loss (gain)
|
$
|
395
|
|
$
|
177
|
|
$
|
(38
|
)
|
$
|
(29
|
)
|
Net prior service cost (credit)
|
19
|
|
20
|
|
(15
|
)
|
(18
|
)
|
||||
Total
|
$
|
414
|
|
$
|
197
|
|
$
|
(53
|
)
|
$
|
(47
|
)
|
|
2019
|
2018
|
||||
Equity securities
|
|
|
||||
U.S. equity securities (1)
|
$
|
258
|
|
$
|
215
|
|
Global equity securities (1)
|
333
|
|
338
|
|
||
Debt securities
|
|
|
||||
Fixed income and cash investment funds
|
1,858
|
|
937
|
|
||
Other debt securities
|
3
|
|
4
|
|
||
Private equities
|
51
|
|
60
|
|
||
Real estate
|
84
|
|
35
|
|
||
Other investments (2)
|
417
|
|
277
|
|
||
Total plan assets
|
$
|
3,004
|
|
$
|
1,866
|
|
(1)
|
Include direct investments and investment funds.
|
(2)
|
Consists primarily of asset allocation fund investments.
|
Year
|
Pension
Benefits
|
Other Postretirement
Benefits
|
||||||||
2020
|
|
$
|
136
|
|
|
|
$
|
11
|
|
|
2021
|
|
134
|
|
|
|
9
|
|
|
||
2022
|
|
136
|
|
|
|
7
|
|
|
||
2023
|
|
137
|
|
|
|
6
|
|
|
||
2024
|
|
142
|
|
|
|
6
|
|
|
||
2025-2029
|
|
749
|
|
|
|
24
|
|
|
|
2019
|
2018
|
2017
|
||||||
Current:
|
|
|
|
||||||
U.S.
|
$
|
(12
|
)
|
$
|
63
|
|
$
|
(75
|
)
|
Foreign
|
443
|
|
444
|
|
453
|
|
|||
Total current
|
431
|
|
507
|
|
378
|
|
|||
Deferred:
|
|
|
|
||||||
U.S.
|
(12
|
)
|
(211
|
)
|
(150
|
)
|
|||
Foreign
|
63
|
|
(38
|
)
|
(183
|
)
|
|||
Total deferred
|
51
|
|
(249
|
)
|
(333
|
)
|
|||
Provision for income taxes
|
$
|
482
|
|
$
|
258
|
|
$
|
45
|
|
|
2019
|
2018
|
2017
|
||||||
U.S.
|
$
|
(693
|
)
|
$
|
(672
|
)
|
$
|
(1,189
|
)
|
Foreign
|
1,446
|
|
1,213
|
|
843
|
|
|||
Income (loss) before income taxes, inclusive of equity in loss of affiliate
|
$
|
753
|
|
$
|
541
|
|
$
|
(346
|
)
|
|
2019
|
2018
|
2017
|
||||||
Income (loss) before income taxes, inclusive of equity in loss of affiliate
|
$
|
753
|
|
$
|
541
|
|
$
|
(346
|
)
|
Taxes at the U.S. federal statutory income tax rate
|
158
|
|
114
|
|
(121
|
)
|
|||
Effect of foreign operations
|
85
|
|
103
|
|
(19
|
)
|
|||
Tax impact of partnership structure
|
17
|
|
80
|
|
171
|
|
|||
Change in valuation allowances
|
241
|
|
87
|
|
169
|
|
|||
Tax Cuts and Jobs Act enactment
|
—
|
|
(107
|
)
|
(132
|
)
|
|||
Other - net
|
(19
|
)
|
(19
|
)
|
(23
|
)
|
|||
Provision for income taxes
|
$
|
482
|
|
$
|
258
|
|
$
|
45
|
|
Actual income tax rate
|
64.0
|
%
|
47.7
|
%
|
(13.0
|
)%
|
|
2019
|
2018
|
||||
Deferred tax assets:
|
|
|
||||
Receivables
|
$
|
79
|
|
$
|
117
|
|
Inventory
|
91
|
|
79
|
|
||
Property
|
137
|
|
191
|
|
||
Goodwill and other intangibles
|
117
|
|
132
|
|
||
Employee benefits
|
98
|
|
97
|
|
||
Investment in partnership
|
381
|
|
228
|
|
||
Other accrued expenses
|
47
|
|
74
|
|
||
Operating loss carryforwards
|
1,654
|
|
1,525
|
|
||
Tax credit carryforwards
|
941
|
|
653
|
|
||
Other
|
270
|
|
232
|
|
||
Total deferred income tax asset
|
3,815
|
|
3,328
|
|
||
Valuation allowances
|
(2,883
|
)
|
(2,372
|
)
|
||
Total deferred income tax asset after valuation allowance
|
932
|
|
956
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||
Undistributed earnings of foreign subsidiaries
|
—
|
|
(9
|
)
|
||
Other
|
(29
|
)
|
(18
|
)
|
||
Total deferred income tax liability
|
(29
|
)
|
(27
|
)
|
||
Net deferred tax asset
|
$
|
903
|
|
$
|
929
|
|
Asset / (Liability)
|
2019
|
2018
|
||||
Balance at beginning of year
|
$
|
(472
|
)
|
$
|
(395
|
)
|
Balance acquired from BHI
|
—
|
|
(142
|
)
|
||
Additions for tax positions of the current year
|
(25
|
)
|
(21
|
)
|
||
Additions for tax positions of prior years
|
(27
|
)
|
(95
|
)
|
||
Reductions for tax positions of prior years
|
55
|
|
101
|
|
||
Settlements with tax authorities
|
6
|
|
35
|
|
||
Lapse of statute of limitations
|
12
|
|
45
|
|
||
Balance at end of year
|
$
|
(451
|
)
|
$
|
(472
|
)
|
|
2019
|
2018
|
2017
|
||||||
Expected life (years)
|
6
|
|
6
|
|
6
|
|
|||
Risk-free interest rate
|
2.6
|
%
|
2.5
|
%
|
2.1
|
%
|
|||
Volatility
|
36.5
|
%
|
33.7
|
%
|
36.4
|
%
|
|||
Dividend yield
|
3.1
|
%
|
2.0
|
%
|
1.2
|
%
|
|||
Weighted average fair value per share at grant date
|
$
|
6.37
|
|
$
|
10.34
|
|
$
|
12.32
|
|
|
Number of
Options |
Weighted Average
Exercise Price Per Option |
|||
Outstanding at December 31, 2018
|
7,538
|
|
$
|
34.76
|
|
Granted
|
2,301
|
|
22.98
|
|
|
Exercised
|
(491
|
)
|
18.96
|
|
|
Forfeited
|
(305
|
)
|
29.42
|
|
|
Expired
|
(633
|
)
|
36.85
|
|
|
Outstanding at December 31, 2019
|
8,410
|
|
$
|
32.50
|
|
Exercisable at December 31, 2019
|
5,155
|
|
$
|
35.68
|
|
|
Number of
Units |
Weighted Average
Grant Date Fair Value Per Unit |
|||
Unvested balance at December 31, 2018
|
6,882
|
|
$
|
36.18
|
|
Granted
|
8,267
|
|
23.10
|
|
|
Vested
|
(2,813
|
)
|
35.98
|
|
|
Forfeited
|
(1,051
|
)
|
29.54
|
|
|
Unvested balance at December 31, 2019
|
11,285
|
|
$
|
27.26
|
|
|
Number of
Units |
Weighted Average
Grant Date Fair Value Per Unit |
|||
Unvested balance at December 31, 2018
|
927
|
|
$
|
35.13
|
|
Granted
|
1,275
|
|
22.72
|
|
|
Vested
|
—
|
|
—
|
|
|
Forfeited
|
(158
|
)
|
28.34
|
|
|
Unvested balance at December 31, 2019
|
2,044
|
|
$
|
27.91
|
|
|
2019
|
2018
|
||||||
|
Class A Common Stock
|
Class B Common Stock
|
Class A Common Stock
|
Class B Common Stock
|
||||
Balance at beginning of year
|
513,399
|
|
521,543
|
|
422,208
|
|
706,985
|
|
Issue of shares upon vesting of restricted stock units (1)
|
1,973
|
|
—
|
|
835
|
|
—
|
|
Issue of shares on exercises of stock options (1)
|
362
|
|
—
|
|
657
|
|
—
|
|
Issue of shares for employee stock purchase plan
|
2,081
|
|
—
|
|
—
|
|
—
|
|
Exchange of Class B common stock for Class A common stock (2)
|
132,250
|
|
(132,250
|
)
|
101,200
|
|
(101,200
|
)
|
Repurchase and cancellation of Class A and B common stock (3)
|
—
|
|
(11,865
|
)
|
(11,501
|
)
|
(84,241
|
)
|
Balance at end of year
|
650,065
|
|
377,428
|
|
513,399
|
|
521,543
|
|
(1)
|
Share amounts reflected above are net of shares withheld to satisfy the employee's tax withholding obligation.
|
(2)
|
In September 2019 and November 2018, we completed underwritten secondary public offerings in which GE and its affiliates sold 132.3 million and 101.2 million shares of our Class A common stock, respectively. We did not receive any proceeds from the shares sold by GE and its affiliates in these offerings. The offerings included the exchange by GE and its affiliates of LLC Units, together with the corresponding shares of our Class B common stock, for Class A common stock. When shares of Class B common stock, together with associated LLC Units, are exchanged for shares of Class A common stock pursuant to the Exchange Agreement, such shares of Class B common stock are canceled.
|
(3)
|
In September 2019, we also repurchased and canceled 11,865,211 shares of Class B common stock, together with an equal number of associated LLC Units, from GE and its affiliates for an aggregate of $250 million, or $21.07 per share, which is the same per share price paid by the underwriters to GE and its affiliates in the concurrent underwritten public offering. During 2018, we repurchased and canceled 11,500,992 shares of Class A common stock for a total of $374 million and 19,241,160 shares of Class B common stock from GE together with the paired common units of BHGE LLC for $626 million. Additionally, in November 2018, we also repurchased 65 million of LLC Units from GE and its affiliates for an aggregate of $1,461 million, or $22.48 per share, which is the same per share price paid by the underwriters to GE and its affiliates in the concurrent underwritten public offering. In connection with these repurchases, the corresponding shares of Class B common stock held by GE and its affiliates were canceled.
|
|
Investment Securities
|
Foreign Currency Translation Adjustments
|
Cash Flow Hedges
|
Benefit Plans
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at December 31, 2017
|
$
|
1
|
|
$
|
(682
|
)
|
$
|
1
|
|
$
|
(23
|
)
|
$
|
(703
|
)
|
Other comprehensive loss before reclassifications
|
(1
|
)
|
(502
|
)
|
(6
|
)
|
(70
|
)
|
(579
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
—
|
|
1
|
|
5
|
|
6
|
|
|||||
Deferred taxes
|
(2
|
)
|
—
|
|
1
|
|
1
|
|
—
|
|
|||||
Other comprehensive loss
|
(3
|
)
|
(502
|
)
|
(4
|
)
|
(64
|
)
|
(573
|
)
|
|||||
Less: Other comprehensive loss attributable to noncontrolling interests
|
(2
|
)
|
(303
|
)
|
(2
|
)
|
(36
|
)
|
(343
|
)
|
|||||
Less: Reallocation of AOCL based on change in ownership of BHGE LLC Units
|
—
|
|
271
|
|
—
|
|
11
|
|
282
|
|
|||||
Less: Activity related to noncontrolling interest
|
—
|
|
—
|
|
—
|
|
4
|
|
4
|
|
|||||
Balance at December 31, 2018
|
—
|
|
(1,152
|
)
|
(1
|
)
|
(66
|
)
|
(1,219
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
2
|
|
53
|
|
13
|
|
(122
|
)
|
(54
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
—
|
|
1
|
|
26
|
|
27
|
|
|||||
Deferred taxes
|
—
|
|
—
|
|
(2
|
)
|
21
|
|
19
|
|
|||||
Other comprehensive income (loss)
|
2
|
|
53
|
|
12
|
|
(75
|
)
|
(8
|
)
|
|||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests
|
1
|
|
23
|
|
4
|
|
(29
|
)
|
(1
|
)
|
|||||
Less: Reallocation of AOCL based on change in ownership of BHGE LLC Units
|
—
|
|
314
|
|
—
|
|
36
|
|
350
|
|
|||||
Less: Other adjustments
|
—
|
|
—
|
|
1
|
|
59
|
|
60
|
|
|||||
Balance at December 31, 2019
|
$
|
1
|
|
$
|
(1,436
|
)
|
$
|
6
|
|
$
|
(207
|
)
|
$
|
(1,636
|
)
|
|
2019
|
2018
|
||||
GE's interest in BHGE LLC
|
$
|
12,454
|
|
$
|
17,438
|
|
Other noncontrolling interests
|
116
|
|
110
|
|
||
Total noncontrolling interests
|
$
|
12,570
|
|
$
|
17,548
|
|
(In millions, except per share amounts)
|
2019
|
2018
|
2017
|
||||||
Net income (loss)
|
$
|
271
|
|
$
|
283
|
|
$
|
(391
|
)
|
Less: Net income attributable to GE O&G pre-merger
|
—
|
|
—
|
|
42
|
|
|||
Less: Net income (loss) attributable to noncontrolling interests
|
143
|
|
88
|
|
(330
|
)
|
|||
Net income (loss) attributable to Baker Hughes Company
|
$
|
128
|
|
$
|
195
|
|
$
|
(103
|
)
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
||||||
Class A basic
|
555
|
|
427
|
|
427
|
|
|||
Class A diluted
|
557
|
|
429
|
|
427
|
|
|||
Net income (loss) per share attributable to common stockholders:
|
|
|
|
||||||
Class A basic
|
$
|
0.23
|
|
$
|
0.46
|
|
$
|
(0.24
|
)
|
Class A diluted
|
$
|
0.23
|
|
$
|
0.45
|
|
$
|
(0.24
|
)
|
|
2019
|
2018
|
||||||||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Net Balance
|
Level 1
|
Level 2
|
Level 3
|
Net Balance
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Derivatives
|
$
|
—
|
|
$
|
58
|
|
$
|
—
|
|
$
|
58
|
|
$
|
—
|
|
$
|
74
|
|
$
|
—
|
|
$
|
74
|
|
Investment securities
|
24
|
|
—
|
|
259
|
|
283
|
|
39
|
|
—
|
|
288
|
|
327
|
|
||||||||
Total assets
|
24
|
|
58
|
|
259
|
|
341
|
|
39
|
|
74
|
|
288
|
|
401
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Derivatives
|
—
|
|
(27
|
)
|
—
|
|
(27
|
)
|
—
|
|
(82
|
)
|
—
|
|
(82
|
)
|
||||||||
Total liabilities
|
$
|
—
|
|
$
|
(27
|
)
|
$
|
—
|
|
$
|
(27
|
)
|
$
|
—
|
|
$
|
(82
|
)
|
$
|
—
|
|
$
|
(82
|
)
|
|
2019
|
2018
|
||||
Balance at beginning of year
|
$
|
288
|
|
$
|
304
|
|
Purchases
|
7
|
|
75
|
|
||
Proceeds at maturity
|
(38
|
)
|
(90
|
)
|
||
Unrealized gains (losses) recognized in accumulated other comprehensive income (loss)
|
2
|
|
(1
|
)
|
||
Balance at end of year
|
$
|
259
|
|
$
|
288
|
|
|
2019
|
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)
|
$
|
257
|
|
$
|
2
|
|
$
|
—
|
|
$
|
259
|
|
$
|
288
|
|
$
|
—
|
|
$
|
—
|
|
$
|
288
|
|
Equity securities (2)
|
24
|
|
—
|
|
—
|
|
24
|
|
39
|
|
—
|
|
—
|
|
39
|
|
||||||||
Total
|
$
|
281
|
|
$
|
2
|
|
$
|
—
|
|
$
|
283
|
|
$
|
327
|
|
$
|
—
|
|
$
|
—
|
|
$
|
327
|
|
(1)
|
All of our investment securities are classified as available for sale instruments. Non-U.S. debt securities mature within three years.
|
(2)
|
Gains (losses) recorded to earnings related to these securities were $2 million, $(25) million and $30 million for the years ended December 31, 2019, 2018, and 2017, respectively.
|
|
2019
|
2018
|
||||||||||
|
Assets
|
(Liabilities)
|
Assets
|
(Liabilities)
|
||||||||
Derivatives accounted for as hedges
|
|
|
|
|
||||||||
Currency exchange contracts
|
$
|
11
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(7
|
)
|
|
|
|
|
|
||||||||
Derivatives not accounted for as hedges
|
|
|
|
|
||||||||
Currency exchange contracts and other
|
47
|
|
(27
|
)
|
74
|
|
(75
|
)
|
||||
Total derivatives
|
$
|
58
|
|
$
|
(27
|
)
|
$
|
74
|
|
$
|
(82
|
)
|
|
Gain (Loss) Recognized in AOCI
|
Gain (Loss) Reclassified from AOCI to Earnings
|
||||||||||||||||
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
||||||||||||
Currency exchange contracts
|
$
|
13
|
|
$
|
(6
|
)
|
$
|
8
|
|
$
|
(1
|
)
|
$
|
(1
|
)
|
$
|
(7
|
)
|
Derivatives not designated as hedging instruments
|
Consolidated and combined statement of income caption
|
2019
|
2018
|
2017
|
||||||
Currency exchange contracts (1)
|
Cost of goods sold
|
$
|
(6
|
)
|
$
|
(12
|
)
|
$
|
76
|
|
Currency exchange contracts
|
Selling, general and administrative
|
(22
|
)
|
9
|
|
45
|
|
|||
Commodity derivatives
|
Cost of goods sold
|
2
|
|
(1
|
)
|
1
|
|
|||
Other derivatives
|
Other non operating income (loss), net
|
2
|
|
—
|
|
—
|
|
|||
Total (2)
|
|
$
|
(24
|
)
|
$
|
(4
|
)
|
$
|
122
|
|
(1)
|
Excludes losses on embedded derivatives of $7 million, $3 million and $76 million at December 31, 2019, 2018 and 2017, 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.
|
Segment revenue
|
2019
|
2018
|
2017
|
||||||
Oilfield Services
|
$
|
12,889
|
|
$
|
11,617
|
|
$
|
5,881
|
|
Oilfield Equipment
|
2,921
|
|
2,641
|
|
2,661
|
|
|||
Turbomachinery & Process Solutions
|
5,536
|
|
6,015
|
|
6,295
|
|
|||
Digital Solutions
|
2,492
|
|
2,604
|
|
2,342
|
|
|||
Total
|
$
|
23,838
|
|
$
|
22,877
|
|
$
|
17,179
|
|
Segment income (loss) before income taxes
|
2019
|
2018
|
2017
|
||||||
Oilfield Services
|
$
|
917
|
|
$
|
785
|
|
$
|
67
|
|
Oilfield Equipment
|
55
|
|
—
|
|
26
|
|
|||
Turbomachinery & Process Solutions
|
719
|
|
621
|
|
665
|
|
|||
Digital Solutions
|
343
|
|
390
|
|
357
|
|
|||
Total segment
|
2,035
|
|
1,796
|
|
1,115
|
|
|||
Corporate
|
(433
|
)
|
(405
|
)
|
(370
|
)
|
|||
Inventory impairment and related charges (1)
|
—
|
|
(105
|
)
|
(244
|
)
|
|||
Restructuring, impairment and other
|
(342
|
)
|
(433
|
)
|
(412
|
)
|
|||
Separation and merger related
|
(184
|
)
|
(153
|
)
|
(373
|
)
|
|||
Other non operating income, net
|
(84
|
)
|
202
|
|
80
|
|
|||
Interest expense, net
|
(237
|
)
|
(223
|
)
|
(131
|
)
|
|||
Total
|
$
|
753
|
|
$
|
680
|
|
$
|
(335
|
)
|
(1)
|
Inventory impairments and related charges are reported in the "Cost of goods sold" caption of the consolidated and combined statements of income (loss). 2017 includes $87 million of adjustments to write-up the acquired inventory to its estimated fair value on acquisition of BHI as this inventory was used or sold in the six months ended December 31, 2017.
|
Segment assets
|
2019
|
2018
|
||||
Oilfield Services
|
$
|
30,611
|
|
$
|
30,941
|
|
Oilfield Equipment
|
7,645
|
|
7,298
|
|
||
Turbomachinery & Process Solutions
|
8,365
|
|
8,529
|
|
||
Digital Solutions
|
3,983
|
|
4,063
|
|
||
Total segment
|
50,604
|
|
50,831
|
|
||
Corporate and eliminations (1)
|
2,765
|
|
1,608
|
|
||
Total
|
$
|
53,369
|
|
$
|
52,439
|
|
(1)
|
Corporate and eliminations in total segment assets includes adjustments of intercompany investments and receivables that are reflected within the total assets of the four reportable segments. During 2019, we transferred the $2.1 billion Baker Hughes trade name indefinite-lived intangible asset from Oilfield Services to Corporate due to the separation of GE, resulting in the re-branding of the Company.
|
Segment depreciation and amortization
|
2019
|
2018
|
2017
|
||||||
Oilfield Services
|
$
|
985
|
|
$
|
1,003
|
|
$
|
613
|
|
Oilfield Equipment
|
175
|
|
173
|
|
187
|
|
|||
Turbomachinery & Process Solutions
|
116
|
|
156
|
|
174
|
|
|||
Digital Solutions
|
103
|
|
112
|
|
119
|
|
|||
Total Segment
|
1,379
|
|
1,444
|
|
1,093
|
|
|||
Corporate
|
39
|
|
42
|
|
10
|
|
|||
Total
|
$
|
1,418
|
|
$
|
1,486
|
|
$
|
1,103
|
|
Property, plant and equipment - net
|
2019
|
2018
|
2017
|
||||||
U.S.
|
$
|
2,594
|
|
$
|
2,654
|
|
$
|
3,369
|
|
Non-U.S.
|
3,646
|
|
3,574
|
|
3,590
|
|
|||
Total
|
$
|
6,240
|
|
$
|
6,228
|
|
$
|
6,959
|
|
i.
|
Provision of certain transition services by each of BHGE LLC and GE, including providing for the development and use of certain service related intellectual property at the end of the transition period and the management of certain data and information for future business needs;
|
ii.
|
Sale of certain digital business assets of Baker Hughes to GE for consideration of $50 million, which closed on September 3, 2019;
|
iii.
|
Modification of certain sales arrangements between the parties and the ability of each party to directly market offerings of its digital business to customers in the oil and gas industry;
|
iv.
|
Research and development efforts and the purchase of products and services related to aero-derivative turbines;
|
v.
|
Supply and distribution terms for certain trailer-mounted gas turbine generator-based engine units and related parts and services; and
|
vi.
|
Repayment by Baker Hughes to GE of amounts due under the promissory note (see Other Related Party discussion below), net of certain costs and tax adjustments;
|
|
2019
|
2018
|
2017
|
||||||
Oilfield Services
|
$
|
211
|
|
$
|
160
|
|
$
|
187
|
|
Oilfield Equipment
|
18
|
|
25
|
|
114
|
|
|||
Turbomachinery & Process Solutions
|
48
|
|
71
|
|
21
|
|
|||
Digital Solutions
|
15
|
|
17
|
|
34
|
|
|||
Corporate
|
22
|
|
31
|
|
29
|
|
|||
Total
|
$
|
314
|
|
$
|
304
|
|
$
|
385
|
|
|
2019
|
2018
|
2017
|
||||||
Property, plant & equipment, net
|
$
|
107
|
|
$
|
80
|
|
$
|
131
|
|
Employee-related termination expenses
|
179
|
|
123
|
|
186
|
|
|||
Asset relocation costs
|
4
|
|
28
|
|
10
|
|
|||
EHS remediation costs
|
11
|
|
6
|
|
9
|
|
|||
Contract termination fees
|
12
|
|
44
|
|
26
|
|
|||
Other incremental costs
|
1
|
|
23
|
|
23
|
|
|||
Total
|
$
|
314
|
|
$
|
304
|
|
$
|
385
|
|
|
2019
|
2018
|
||||
Balance at beginning of year
|
$
|
236
|
|
$
|
164
|
|
Provisions
|
4
|
|
47
|
|
||
Expenditures
|
(14
|
)
|
(96
|
)
|
||
Other (1)
|
(6
|
)
|
121
|
|
||
Balance at end of year
|
$
|
220
|
|
$
|
236
|
|
(1)
|
2018 amounts primarily related to the acquisition of BHI.
|
|
2019
|
2018
|
||||
Balance at beginning of year
|
$
|
327
|
|
$
|
330
|
|
Additions
|
48
|
|
47
|
|
||
Amounts written off
|
(42
|
)
|
(43
|
)
|
||
Other
|
(10
|
)
|
(7
|
)
|
||
Balance at end of year
|
$
|
323
|
|
$
|
327
|
|
(In millions, except per share amounts)
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Total Year
|
||||||||||
2019
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
5,615
|
|
$
|
5,994
|
|
$
|
5,882
|
|
$
|
6,347
|
|
$
|
23,838
|
|
Gross profit (1)
|
976
|
|
1,062
|
|
1,101
|
|
1,295
|
|
4,432
|
|
|||||
Restructuring, impairment and other (2)
|
62
|
|
50
|
|
71
|
|
159
|
|
342
|
|
|||||
Separation and merger related
|
34
|
|
40
|
|
54
|
|
57
|
|
184
|
|
|||||
Net income (loss) attributable to Baker Hughes Company
|
32
|
|
(9
|
)
|
57
|
|
48
|
|
128
|
|
|||||
Basic earnings (loss) per Class A common share
|
0.06
|
|
(0.02
|
)
|
0.11
|
|
0.07
|
|
0.23
|
|
|||||
Diluted earnings (loss) per Class A common share
|
0.06
|
|
(0.02
|
)
|
0.11
|
|
0.07
|
|
0.23
|
|
|||||
Cash dividend per Class A common share
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.72
|
|
|||||
|
|
|
|
|
|
||||||||||
2018
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
5,399
|
|
$
|
5,548
|
|
$
|
5,665
|
|
$
|
6,264
|
|
$
|
22,877
|
|
Gross profit (1)
|
841
|
|
936
|
|
973
|
|
1,236
|
|
3,986
|
|
|||||
Restructuring, impairment and other (2)
|
162
|
|
146
|
|
66
|
|
59
|
|
433
|
|
|||||
Separation and merger related
|
46
|
|
50
|
|
17
|
|
41
|
|
153
|
|
|||||
Net income (loss) attributable to Baker Hughes Company
|
70
|
|
(19
|
)
|
13
|
|
131
|
|
195
|
|
|||||
Basic earnings (loss) per Class A common share
|
0.17
|
|
(0.05
|
)
|
0.03
|
|
0.28
|
|
0.46
|
|
|||||
Diluted earnings (loss) per Class A common share
|
0.17
|
|
(0.05
|
)
|
0.03
|
|
0.28
|
|
0.45
|
|
|||||
Cash dividend per Class A common share
|
0.18
|
|
0.18
|
|
0.18
|
|
0.18
|
|
0.72
|
|
(1)
|
Represents revenue less cost of sales and cost of services.
|
(2)
|
Restructuring, impairment and other costs associated with asset impairments, workforce reductions, facility closures and contract terminations recorded during 2019 and 2018. See "Note 21. Restructuring, Impairment and Other" for further discussion.
|
Equity Compensation Plan
Category
|
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights
|
|
Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
|
|
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(excluding securities
reflected in the first
column)
|
||||||||||
Stockholder-approved plans
|
|
4.6
|
|
|
|
|
$
|
29.96
|
|
|
|
|
35.5
|
|
|
Nonstockholder-approved plans
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Subtotal (except for weighted average exercise price)
|
|
4.6
|
|
|
|
|
29.96
|
|
|
|
|
35.5
|
|
|
|
Employee Stock Purchase Plan
|
|
0.7
|
|
|
|
|
21.79
|
|
|
|
|
12.9
|
|
|
|
Total
|
|
5.3
|
|
|
|
|
$
|
28.89
|
|
|
|
|
48.4
|
|
|
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 COMPANY
|
|
|
|
|
Date:
|
February 13, 2020
|
|
/s/ LORENZO SIMONELLI
|
|
|
|
Lorenzo Simonelli
Chairman, President and Chief Executive Officer
|
Signature
|
|
Title
|
|
|
|
/s/ LORENZO SIMONELLI
|
|
Chairman, President and Chief Executive Officer
|
(Lorenzo Simonelli)
|
|
(principal executive officer)
|
|
|
|
/S/ BRIAN WORRELL
|
|
Chief Financial Officer
|
(Brian Worrell)
|
|
(principal financial officer)
|
|
|
|
/S/ KURT CAMILLERI
|
|
Senior Vice President, Controller and Chief Accounting Officer
|
(Kurt Camilleri)
|
|
(principal accounting officer)
|
Signature
|
|
Title
|
|
|
|
/s/ W. GEOFFREY BEATTIE
|
|
Director
|
(W. Geoffrey Beattie)
|
|
|
|
|
|
/s/ GREGORY D. BRENNEMAN
|
|
Director
|
(Gregory D. Brenneman)
|
|
|
|
|
|
/s/ CLARENCE P. CAZALOT, JR.
|
|
Director
|
(Clarence P. Cazalot, Jr.)
|
|
|
|
|
|
/s/ GREGORY L. EBEL
|
|
Director
|
(Gregory L. Ebel)
|
|
|
|
|
|
/s/ LYNN L. ELSENHANS
|
|
Director
|
(Lynn L. Elsenhans)
|
|
|
|
|
|
/s/ JOHN G. RICE
|
|
Director
|
(John G. Rice)
|
|
|
|
|
|
1.
|
Defined Terms. Unless otherwise defined herein, all capitalized terms used in this Amendment shall have the same meaning given to them in the A&R HDGT Supply Agreement.
|
2.
|
Amendments.
|
A.
|
The contents of Schedule 1 to this Amendment, which is incorporated as if set forth fully herein, is hereby appended to the end of Appendix 2 to the A&R HDGT Supply Agreement and incorporated therein, as Schedule 2-1, “Price List”.
|
B.
|
The Parties amend Schedule 2-1 to Appendix 2 to the A&R HDGT Supply Agreement by inserting the following at the beginning:
|
1.
|
The Price List contained in this Schedule 2-1 will be in force for a period of three years, starting from the Effective Date.
|
2.
|
If the part number of a spare part (whether capital or non-capital) has been substituted, but the spare part is not upgraded, so that the new spare part is the same as the substituted one in terms of form, fit and function, the price for the new spare part shall be determined based on the Price List in this Schedule 2-1;
|
3.
|
If the part number of a spare part (whether capital or non-capital) has been substituted, and the form, fit and function of the spare part has changed, the price for such upgraded part shall be determined based on the price that will be given by the Supplier based on its list price.
|
4.
|
For all other parts and components, including those for frame agreements, transactional spot prices and special discounts, the pricing methodology is as set forth in the HDGT Services Pricing in Appendix 2 (and not Schedule 2-1).
|
1.
|
The provisions of Clause 12.07 of A&R HDGT Supply Agreement are hereby incorporated by reference in the present Agreement.
|
2.
|
Full Force and Effect. Except as expressly set forth in this Amendment, all other provisions of the Agreement remain unchanged and in full force and effect. After the Amendment Effective Date, the term “Agreement” as used in the Agreement shall mean the Agreement as amended by this Amendment.
|
3.
|
Precedence. In the event of a conflict between the terms of this Amendment and the A&R HDGT Supply Agreement, the terms of this Amendment shall control.
|
4.
|
Amendment. This Amendment may be amended only by an instrument in writing executed by the Parties hereto.
|
5.
|
Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. Any signature page of any such counterpart, or any electronic facsimile thereof, may be attached or appended to any other counterpart to complete a fully executed counterpart of this Amendment. Any electronic facsimile transmission of any signature of a Party shall be deemed an original and shall bind such Party.
|
2.
|
The names of the Baker Hughes, a GE company 2017 Long-Term Incentive Plan, the Baker Hughes, a GE company Executive Officer Short Term Incentive Compensation Plan, the Baker Hughes, a GE company Short Term Incentive Compensation Plan, and the Baker Hughes, a GE company Non-Employee Director Deferral Plan are changed to the Baker Hughes Company 2017 Long-Term Incentive Plan, the Baker Hughes Company Executive Officer Short Term Incentive Compensation Plan, the Baker Hughes Company Short Term Incentive Compensation Plan, the Baker Hughes Company Non-Employee Director Deferral Plan, respectively.
|
92,613,022.6
|
|
i
|
|
2.
|
The names of the Baker Hughes, a GE company Supplementary Pension Plan, the Baker Hughes a GE company Welfare Benefits Plan, the Baker Hughes, a GE company Health Care Flexible Spending Account Plan, the Baker Hughes, a GE company Retiree Welfare Benefits Plan, the Baker Hughes, a GE company Retiree Health Reimbursement Arrangement and the Baker Hughes, a GE company Severance Program for Employees are changed to the Baker Hughes Company Supplementary Pension Plan, the Baker Hughes Company Welfare Benefits Plan, the Baker Hughes Company Health Care Flexible Spending Account Plan, the Baker Hughes Company Retiree Welfare Benefits Plan, the Baker Hughes Company Retiree Health Reimbursement Arrangement and the Baker Hughes Company Severance Program for Employees, respectively.
|
ARTICLE I
|
DEFINITIONS AND CONSTRUCTION 1
|
1.01
|
Definitions 1
|
1.02
|
Number and Gender 8
|
1.03
|
Headings 8
|
ARTICLE II
|
PARTICIPATION 8
|
2.01
|
Eligibility 8
|
2.02
|
Commencement of Participation 8
|
2.03
|
Cessation of Participation Upon Plan Administrator Determination 9
|
2.04
|
Suspension of Participation Due to Certain Distributions 9
|
ARTICLE III
|
PARTICIPANT DEFERRALS 9
|
3.01
|
Amount of Participant Deferrals 9
|
3.02
|
Participant Deferral Elections 9
|
3.03
|
Period of Effectiveness of Participant Deferral Elections 10
|
3.04
|
Changes to Participant Deferral Election 10
|
3.05
|
Cancellation of Participant Deferral Election 10
|
3.06
|
Time and Form of Payment Specified in Participant Deferral Election 10
|
3.07
|
Irrevocable Change of Election of Time and/or Form of Payment for Grandfathered Amounts 11
|
3.08
|
Change of Time and Form of Payment for Amounts Other Than Grandfathered Amounts 11
|
3.09
|
Suspension of Participant Deferrals Due to Withdrawal for Unforeseeable Financial Emergency 11
|
56,432,995.6
|
|
i
|
|
ARTICLE IV
|
COMPANY DEFERRALS 12
|
4.01
|
Company Basic Deferrals 12
|
4.02
|
Company Base Thrift Deferrals 12
|
4.03
|
Company Pension Deferrals 13
|
4.04
|
Company Discretionary Deferrals 13
|
4.05
|
Time and Form of Payment Elections for Company Deferrals 13
|
ARTICLE V
|
VALUATION OF ACCOUNTS 13
|
ARTICLE VI
|
DEEMED INVESTMENT OF FUNDS 13
|
ARTICLE VII
|
DETERMINATION OF VESTED INTEREST AND FORFEITURES 15
|
7.01
|
Vested Interest 15
|
7.02
|
Forfeitures 15
|
ARTICLE VIII
|
ACCELERATED DISTRIBUTIONS 15
|
8.01
|
Restrictions on In-Service Distributions and Loans 15
|
8.02
|
Emergency Benefit 15
|
ARTICLE IX
|
PAYMENT OF BENEFITS 16
|
9.01
|
Amount of Benefit 16
|
9.02
|
Time of Payment of Grandfathered Amounts 16
|
9.03
|
Time of Payment of Amounts Other Than Grandfathered Amounts and Amounts in Bonus Deferral Plan Accounts 17
|
9.04
|
Alternative Forms of Benefit Payments for Grandfathered Amounts 17
|
56,432,995.6
|
|
ii
|
|
9.05
|
Alternative Forms of Benefit Payments for Amounts Other Than Grandfathered Amounts and Amounts in Bonus Deferral Plan Accounts 18
|
9.06
|
Time and Form of Payment of Bonus Deferral Plan Accounts 19
|
9.07
|
Accelerated Pay-Out of Certain Grandfathered Amounts 19
|
9.08
|
Accelerated Pay-Out of Certain Amounts, Including Grandfathered Amounts 19
|
9.09
|
Designation of Beneficiaries 20
|
9.10
|
Payment of Benefits 20
|
9.11
|
Unclaimed Benefits 20
|
9.12
|
Plan Administrator Determination of Pay-Out of Certain Benefits 21
|
9.13
|
Statutory Benefits 21
|
9.14
|
Payment to Alternate Payee Under Domestic Relations Order 21
|
ARTICLE X
|
ADMINISTRATION OF THE PLAN 22
|
10.01
|
Plan Administrator 22
|
10.02
|
Resignation and Removal 22
|
10.03
|
Records and Procedures 22
|
10.04
|
Self-Interest of Plan Administrator 22
|
10.05
|
Compensation and Bonding 22
|
10.06
|
Plan Administrator Powers and Duties 22
|
10.07
|
Reliance on Documents, Instruments, etc 23
|
10.08
|
Claims Review Procedures; Claims Appeals Procedures 23
|
10.09
|
Company to Supply Information 25
|
10.10
|
Indemnity 25
|
56,432,995.6
|
|
iii
|
|
ARTICLE XI
|
ADMINISTRATION OF FUNDS 26
|
11.01
|
Payment of Expenses 26
|
11.02
|
Trust Fund Property 26
|
ARTICLE XII
|
ADOPTION OF PLAN BY OTHER EMPLOYERS 26
|
12.01
|
Adoption Procedure 26
|
12.02
|
No Joint Venture Implied 27
|
ARTICLE XIII
|
NATURE OF THE PLAN AND ESTABLISHMENT OF THE TRUST 27
|
13.01
|
Nature of the Plan 27
|
13.02
|
Establishment of the Trust 28
|
ARTICLE XIV
|
MISCELLANEOUS 28
|
14.01
|
Plan Not Contract of Employment 28
|
14.02
|
Alienation of Interest Forbidden 28
|
14.03
|
Withholding 29
|
14.04
|
Amendment and Termination 29
|
14.05
|
Severability 29
|
14.06
|
Arbitration 29
|
14.07
|
Compliance With Section 409A 30
|
14.08
|
Governing Law 30
|
APPENDIX A
|
SPECIAL PROVISIONS WITH RESPECT TO AMOUNTS DEFERRED UNDER THE BJ SERVICES DEFERRED
|
56,432,995.6
|
|
iv
|
|
Relative Absolute Change
ROIC / Relative Cumulative Average ROIC (Percentile v. Peers) |
Performance
Condition Attainment for Relative Absolute Change ROIC / Relative Cumulative Average ROIC |
Total Performance Condition Attainment (Average of Relative Absolute Change
ROIC Attainment and Relative Cumulative Average ROIC Attainment) |
≥ 75
|
150%
|
150%
|
50
|
100%
|
100%
|
25
|
50%
|
50%
|
0 – 24.9
|
0%
|
0%
|
5.
|
Method of Exercise.
|
Notes:
|
|
|
|
|
(1) Baker Hughes, a GE company, LLC
|
|
|
|
|
*EHHC NewCo LLC – the Managing Partner
|
36.636314
|
%
|
|
|
CFC Holdings LLC
|
3.810940
|
%
|
|
|
Baker Hughes Company
|
22.819864
|
%
|
|
|
General Electric Company
|
36.732882
|
%
|
|
|
(2) Baker Hughes International Partners Holdings SCS
|
|
|
|
|
Baker Hughes, a GE company, LLC
|
98.998755
|
%
|
|
|
US SCS Partner LLC
|
1.001245
|
%
|
|
|
(3) Baker Hughes International Holdings S.à r.l.
|
|
|
|
|
Baker Hughes International Partners S.à r.l.
|
99.9500
|
%
|
|
|
Other subsidiaries of Baker Hughes, a GE company, LLC
|
0.0500
|
%
|
|
|
(4) Baker Hughes Luxembourg Holdings S.C.A.
|
|
|
|
|
Baker Hughes Holdings I B.V.
|
39.248
|
%
|
|
|
Other subsidiaries of Baker Hughes, a GE company, LLC
|
60.7520
|
%
|
|
|
|
|
|
|
Date:
|
February 13, 2020
|
By:
|
/s/ Lorenzo Simonelli
|
|
|
|
Lorenzo Simonelli
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
Date:
|
February 13, 2020
|
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:
|
|
February 13, 2020
|
|
|
|
|
|
|
|
|
|
/s/ Brian Worrell
|
|
|
Name:
|
|
Brian Worrell
|
|
|
Title:
|
|
Chief Financial Officer
|
|
|
Date:
|
|
February 13, 2020
|
(1)
|
Amounts included are the total dollar value of proposed assessments received from MSHA on or before December 31, 2019 for citations and orders occurring during the year ended December 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.
|