XML 16 R6.htm IDEA: XBRL DOCUMENT v3.7.0.1
Organization, Basis of Presentation, Business Description and Significant Accounting Policies
6 Months Ended
Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]
ORGANIZATION, BASIS OF PRESENTATION, BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES
Baker Hughes, a GE company (formerly known as Bear Newco, Inc.) (the "Company," "BHGE," "we," "us," or "our" ), was formed along with its wholly owned subsidiary, Bear MergerSub, Inc., a Delaware corporation ("Merger Sub"), on October 28, 2016, for the purpose of facilitating the combination of Baker Hughes Incorporated, a Delaware corporation ("Baker Hughes"), and the oil and gas business ("GE O&G") of General Electric Company ("GE").
In this Form 10-Q, we are reporting the shell company results for the Company and Merger Sub for the three and six months ended June 30, 2017. As of June 30, 2017, the Company was a wholly owned subsidiary of Baker Hughes, and Merger Sub, also a shell company, was wholly owned by the Company and was the sole subsidiary of the Company. Prior to June 30, 2017, and during the periods reported herein, the Company did not conduct any activities other than those incidental to the formation of it and Merger Sub and matters contemplated by the Transaction Agreement (as defined below).
On July 3, 2017, subsequent to the period ended June 30, 2017 as reported herein, and pursuant to the terms of the Transaction Agreement and Plan of Merger, dated as of October 30, 2016, among GE, Baker Hughes, the Company and Merger Sub, as amended by the Amendment to Transaction Agreement and Plan of Merger, dated as of March 27, 2017, among GE, Baker Hughes, the Company, Merger Sub, Baker Hughes Newco, Inc., a wholly owned subsidiary of Baker Hughes ("Newco 2"), and Bear MergerSub 2, Inc., a wholly owned subsidiary of Newco 2 ("Merger Sub 2") (the "Transaction Agreement"), the following transactions (the "Transactions") were consummated: Baker Hughes merged with Merger Sub 2, with Baker Hughes surviving the merger as a direct wholly owned subsidiary of Newco 2 (the "First Merger"), immediately followed by the conversion of the surviving corporation of the First Merger into a Delaware limited liability company (originally named Newco LLC and then renamed Baker Hughes, a GE company, LLC ("BHGE LLC")) (the "Conversion"). Immediately following the Conversion, Newco 2 merged with the Company, with the Company surviving the merger (the "Second Merger"). Following the Second Merger, GE transferred to BHGE LLC (1) all of the equity interests of the GE O&G holding companies that held directly or indirectly the assets and liabilities of GE O&G, including any GE O&G operating subsidiaries, and (2) $7.4 billion in cash in exchange for approximately 62.5% of the membership interests in BHGE LLC (the "Contribution").
As a result of the Transactions, the Company became the holding company of the combined businesses of Baker Hughes and GE O&G. On July 3, 2017, shares of the Company's Class A Common Stock were issued to previous Baker Hughes shareholders in exchange for their existing shares in Baker Hughes on a 1:1 basis. Shares of the Company's Class A Common Stock are listed for trading on the New York Stock Exchange as a standard listing under the ticker symbol "BHGE." Holders of Baker Hughes common stock immediately prior to the Transactions owned approximately 37.5% of the indirect economic interest in BHGE LLC through their ownership of 100% of the Company's Class A Common Stock, immediately following the completion of the Transactions. All of the outstanding shares of Class B Common Stock of the Company issued as a result of the Transactions are held by GE. Former Baker Hughes shareholders immediately after the completion of the Transactions also were entitled to receive a special one-time cash dividend of $17.50 per share (the "Special Dividend") paid by the Company to holders of record of the Company's Class A Common Stock. Events subsequent to June 30, 2017, including the completion of the Transactions, are not reflected in the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
For further information regarding the parties to the Transactions, refer to the section entitled "Note 2. The Transaction Parties." For further information regarding the Transactions, refer to the section entitled "Note 6. Subsequent Events."
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S." and such principles, "U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. All intercompany accounts and transactions have been eliminated. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows of the Company and its subsidiary, operating as a shell company, for the periods presented and are not indicative of the results that may be expected for a full year.