QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction | (I.R.S. Employer Identification No.) | ||||||||||
of incorporation or organization) | |||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
Page No. | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
(In millions, except per share amounts) | 2020 | 2019 | 2020 | 2019 | ||||||||||
Revenue: | ||||||||||||||
Sales of goods | $ | $ | $ | $ | ||||||||||
Sales of services | ||||||||||||||
Total revenue | ||||||||||||||
Costs and expenses: | ||||||||||||||
Cost of goods sold | ||||||||||||||
Cost of services sold | ||||||||||||||
Selling, general and administrative | ||||||||||||||
Goodwill impairment | ||||||||||||||
Restructuring, impairment and other | ||||||||||||||
Separation related | ||||||||||||||
Total costs and expenses | ||||||||||||||
Operating income (loss) | ( | ( | ||||||||||||
Other non-operating loss, net | ( | ( | ( | ( | ||||||||||
Interest expense, net | ( | ( | ( | ( | ||||||||||
Income (loss) before income taxes | ( | ( | ||||||||||||
Benefit (provision) for income taxes | ( | ( | ||||||||||||
Net income (loss) | ( | ( | ( | |||||||||||
Less: Net income (loss) attributable to noncontrolling interests | ( | ( | ( | |||||||||||
Net income (loss) attributable to Baker Hughes Company | $ | ( | $ | ( | $ | ( | $ | |||||||
Per share amounts: | ||||||||||||||
Basic and diluted earnings (loss) per Class A common stock | $ | ( | $ | ( | $ | ( | $ | |||||||
Cash dividend per Class A common stock | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||
Net income (loss) | $ | ( | $ | ( | $ | ( | $ | |||||||
Less: Net income (loss) attributable to noncontrolling interests | ( | ( | ( | |||||||||||
Net income (loss) attributable to Baker Hughes Company | ( | ( | ( | |||||||||||
Other comprehensive income (loss): | ||||||||||||||
Investment securities | ( | ( | ||||||||||||
Foreign currency translation adjustments | ( | ( | ||||||||||||
Cash flow hedges | ( | ( | ||||||||||||
Benefit plans | ( | ( | ||||||||||||
Other comprehensive income (loss) | ( | ( | ||||||||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | ( | ( | ||||||||||||
Other comprehensive income (loss) attributable to Baker Hughes Company | ( | ( | ||||||||||||
Comprehensive income (loss) | ( | ( | ( | |||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | ( | ( | ( | |||||||||||
Comprehensive income (loss) attributable to Baker Hughes Company | $ | ( | $ | ( | $ | ( | $ |
(In millions, except par value) | June 30, 2020 | December 31, 2019 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents (1) | $ | $ | ||||||
Current receivables, net | ||||||||
Inventories, net | ||||||||
All other current assets | ||||||||
Total current assets | ||||||||
Property, plant and equipment (net of accumulated depreciation of $ | ||||||||
Goodwill | ||||||||
Other intangible assets, net | ||||||||
Contract and other deferred assets | ||||||||
All other assets | ||||||||
Deferred income taxes | ||||||||
Total assets (1) | $ | $ | ||||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | $ | ||||||
Short-term debt and current portion of long-term debt (1) | ||||||||
Progress collections and deferred income | ||||||||
All other current liabilities | ||||||||
Total current liabilities | ||||||||
Long-term debt | ||||||||
Deferred income taxes | ||||||||
Liabilities for pensions and other postretirement benefits | ||||||||
All other liabilities | ||||||||
Equity: | ||||||||
Class A Common Stock, $ | ||||||||
Class B Common Stock, $ | ||||||||
Capital in excess of par value | ||||||||
Retained loss | ( | |||||||
Accumulated other comprehensive loss | ( | ( | ||||||
Baker Hughes Company equity | ||||||||
Noncontrolling interests | ||||||||
Total equity | ||||||||
Total liabilities and equity | $ | $ |
(In millions, except per share amounts) | Class A and Class B Common Stock | Capital in Excess of Par Value | Retained Loss | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | ||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||
Net loss | ( | ( | ( | |||||||||||||||||
Other comprehensive loss | ( | ( | ( | |||||||||||||||||
Dividends on Class A common stock ($ | ( | ( | ||||||||||||||||||
Distributions to GE | ( | ( | ||||||||||||||||||
Stock-based compensation cost | ||||||||||||||||||||
Other | ( | ( | ( | ( | ||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | $ |
(In millions, except per share amounts) | Class A and Class B Common Stock | Capital in Excess of Par Value | Retained Loss | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | ||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||
Comprehensive income (loss): | ||||||||||||||||||||
Net loss | ( | ( | ( | |||||||||||||||||
Other comprehensive income | ||||||||||||||||||||
Dividends on Class A common stock ($ | ( | ( | ||||||||||||||||||
Distributions to GE | ( | ( | ||||||||||||||||||
Stock-based compensation cost | ||||||||||||||||||||
Other | ( | |||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | $ |
(In millions, except per share amounts) | Class A and Class B Common Stock | Capital in Excess of Par Value | Retained Earnings (Loss) | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | ||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||
Comprehensive income: | ||||||||||||||||||||
Net income | ||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||
Dividends on Class A common stock ($ | ( | ( | ( | |||||||||||||||||
Distributions to GE | ( | ( | ||||||||||||||||||
Stock-based compensation cost | ||||||||||||||||||||
Other | ( | ( | ( | |||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | $ | ( | $ | $ |
(In millions, except per share amounts) | Class A and Class B Common Stock | Capital in Excess of Par Value | Retained Earnings (Loss) | Accumulated Other Comprehensive Loss | Non- controlling Interests | Total Equity | ||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||
Comprehensive loss: | ||||||||||||||||||||
Net loss | ( | ( | ( | |||||||||||||||||
Other comprehensive loss | ( | ( | ( | |||||||||||||||||
Dividends on Class A common stock ($ | ( | ( | ||||||||||||||||||
Distributions to GE | ( | ( | ||||||||||||||||||
Stock-based compensation cost | ||||||||||||||||||||
Other | ( | ( | ||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | $ | ( | $ | $ |
Six Months Ended June 30, | ||||||||
(In millions) | 2020 | 2019 | ||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | ( | $ | |||||
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||||||||
Depreciation and amortization | ||||||||
Goodwill impairment | ||||||||
Intangible assets impairment | ||||||||
Property, plant and equipment impairment | ||||||||
Inventory impairment | ||||||||
Loss on sale of business | ||||||||
Changes in operating assets and liabilities: | ||||||||
Current receivables | ( | |||||||
Inventories | ( | ( | ||||||
Accounts payable | ( | |||||||
Progress collections and deferred income | ||||||||
Contract and other deferred assets | ( | ( | ||||||
Other operating items, net | ( | ( | ||||||
Net cash flows from operating activities | ||||||||
Cash flows from investing activities: | ||||||||
Expenditures for capital assets | ( | ( | ||||||
Proceeds from disposal of assets | ||||||||
Other investing items, net | ( | |||||||
Net cash flows used in investing activities | ( | ( | ||||||
Cash flows from financing activities: | ||||||||
Net repayments of debt and other borrowings | ( | ( | ||||||
Proceeds from issuance of commercial paper | ||||||||
Proceeds from issuance of long-term debt | ||||||||
Dividends paid | ( | ( | ||||||
Distributions to GE | ( | ( | ||||||
Other financing items, net | ( | |||||||
Net cash flows from (used in) financing activities | ( | |||||||
Effect of currency exchange rate changes on cash and cash equivalents | ( | ( | ||||||
Increase (decrease) in cash and cash equivalents | ( | |||||||
Cash and cash equivalents, beginning of period | ||||||||
Cash and cash equivalents, end of period | $ | $ | ||||||
Supplemental cash flows disclosures: | ||||||||
Income taxes paid, net of refunds | $ | $ | ||||||
Interest paid | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
Total Revenue | 2020 | 2019 | 2020 | 2019 | ||||||||||
U.S. | $ | $ | $ | $ | ||||||||||
Non-U.S. | ||||||||||||||
Total | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||
Customer receivables | $ | $ | ||||||
Related parties | ||||||||
Other | ||||||||
Total current receivables | ||||||||
Less: Allowance for credit losses | ( | ( | ||||||
Total current receivables, net | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||
Finished goods | $ | $ | ||||||
Work in process and raw materials | ||||||||
Total inventories, net | $ | $ |
Oilfield Services | Oilfield Equipment | Turbo- machinery & Process Solutions | Digital Solutions | Total | |||||||||||||
Balance at December 31, 2018, gross | $ | $ | $ | $ | $ | ||||||||||||
Accumulated impairment at December 31, 2018 | ( | ( | ( | ( | |||||||||||||
Balance at December 31, 2018 | |||||||||||||||||
Currency exchange and others | ( | ( | ( | ||||||||||||||
Balance at December 31, 2019 | |||||||||||||||||
Impairment | ( | ( | ( | ||||||||||||||
Currency exchange and others | ( | ( | ( | ( | |||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||
Customer relationships (1) | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||
Technology (1) | ( | ( | ||||||||||||||||||
Trade names and trademarks (1) | ( | ( | ||||||||||||||||||
Capitalized software (1) | ( | ( | ||||||||||||||||||
Other | ( | ( | ||||||||||||||||||
Finite-lived intangible assets | ( | ( | ||||||||||||||||||
Indefinite-lived intangible assets | — | — | ||||||||||||||||||
Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
Year | Estimated Amortization Expense | ||||
Remainder of 2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 |
June 30, 2020 | December 31, 2019 | |||||||
Long-term product service agreements | $ | $ | ||||||
Long-term equipment contracts (1) | ||||||||
Contract assets (total revenue in excess of billings) | ||||||||
Deferred inventory costs | ||||||||
Non-recurring engineering costs | ||||||||
Contract and other deferred assets | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||
Progress collections | $ | $ | ||||||
Deferred income | ||||||||
Progress collections and deferred income (contract liabilities) | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
Operating Lease Expense | 2020 | 2019 | 2020 | 2019 | ||||||||||
Long-term fixed lease | $ | $ | $ | $ | ||||||||||
Long-term variable lease | ||||||||||||||
Short-term lease (1) | ||||||||||||||
Total operating lease expense | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||
Short-term borrowings | ||||||||
Commercial paper | $ | $ | ||||||
Short-term borrowings from GE | ||||||||
Other borrowings | ||||||||
Total short-term borrowings | ||||||||
Long-term borrowings | ||||||||
Other long-term borrowings | ||||||||
Total long-term borrowings | ||||||||
Total borrowings | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Service cost | $ | $ | $ | $ | ||||||||||
Interest cost | ||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | ||||||||||
Amortization of net actuarial loss | ||||||||||||||
Curtailment loss | ||||||||||||||
Net periodic cost | $ | $ | $ | $ |
Class A Common Stock | Class B Common Stock | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Balance at January 1 | ||||||||||||||
Issue of shares upon vesting of restricted stock units (1) | ||||||||||||||
Issue of shares on exercises of stock options (1) | ||||||||||||||
Issue of shares for employee stock purchase plan | ||||||||||||||
Balance at June 30 |
Investment Securities | Foreign Currency Translation Adjustments | Cash Flow Hedges | Benefit Plans | Accumulated Other Comprehensive Loss | |||||||||||||
Balance at December 31, 2019 | $ | $ | ( | $ | $ | ( | $ | ( | |||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ( | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||||||||
Deferred taxes | ( | ( | |||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||
Balance at June 30, 2020 | $ | $ | ( | $ | $ | ( | $ | ( |
Investment Securities | Foreign Currency Translation Adjustments | Cash Flow Hedges | Benefit Plans | Accumulated Other Comprehensive Loss | |||||||||||||
Balance at December 31, 2018 | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||||||||
Deferred taxes | |||||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | ( | ||||||||||||||||
Less: Other adjustments | |||||||||||||||||
Balance at June 30, 2019 | $ | $ | ( | $ | ( | $ | ( | $ | ( |
June 30, 2020 | December 31, 2019 | |||||||
GE's interest in BHH LLC | $ | $ | ||||||
Other noncontrolling interests | ||||||||
Total noncontrolling interests | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
(In millions, except per share amounts) | 2020 | 2019 | 2020 | 2019 | ||||||||||
Net income (loss) | $ | ( | $ | ( | $ | ( | $ | |||||||
Less: Net income (loss) attributable to noncontrolling interests | ( | ( | ( | |||||||||||
Net income (loss) attributable to Baker Hughes Company | $ | ( | $ | ( | $ | ( | $ | |||||||
Weighted average shares outstanding: | ||||||||||||||
Class A basic | ||||||||||||||
Class A diluted | ||||||||||||||
Net income (loss) per share attributable to common stockholders: | ||||||||||||||
Class A basic & diluted | $ | ( | $ | ( | $ | ( | $ | |||||||
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Net Balance | Level 1 | Level 2 | Level 3 | Net Balance | |||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Derivatives | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||
Total assets | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Derivatives | ( | ( | ( | ( | ||||||||||||||||||||||
Total liabilities | $ | $ | ( | $ | $ | ( | $ | $ | ( | $ | $ | ( |
2020 | 2019 | |||||||
Balance at January 1 | $ | $ | ||||||
Purchases | ||||||||
Proceeds at maturity | ( | ( | ||||||
Unrealized gains (losses) recognized in accumulated other comprehensive income (loss) | ( | |||||||
Balance at June 30 | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||
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) | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Equity securities (2) | — | — | — | — | ||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||
Assets | (Liabilities) | Assets | (Liabilities) | |||||||||||
Derivatives accounted for as hedges | ||||||||||||||
Currency exchange contracts | $ | $ | $ | $ | ||||||||||
Derivatives not accounted for as hedges | ||||||||||||||
Currency exchange contracts and other | ( | ( | ||||||||||||
Total derivatives | $ | $ | ( | $ | $ | ( |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Gain (loss) recognized in AOCI | $ | $ | ( | $ | ( | $ | ||||||||
Gain (loss) reclassified from AOCI to earnings |
Derivatives not designated as hedging instruments | Condensed consolidated statement of income caption | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Currency exchange contracts (1) | Cost of goods sold | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||
Currency exchange contracts | Selling, general and administrative | ( | ( | ||||||||||||||
Commodity derivatives | Cost of goods sold | ( | ( | ||||||||||||||
Other derivatives | Other non-operating loss, net | ||||||||||||||||
Total (2) | $ | $ | ( | $ | $ | ( |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
Segment revenue | 2020 | 2019 | 2020 | 2019 | ||||||||||
Oilfield Services | $ | $ | $ | $ | ||||||||||
Oilfield Equipment | ||||||||||||||
Turbomachinery & Process Solutions | ||||||||||||||
Digital Solutions | ||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
Segment income (loss) before income taxes | 2020 | 2019 | 2020 | 2019 | ||||||||||
Oilfield Services | $ | $ | $ | $ | ||||||||||
Oilfield Equipment | ( | ( | ||||||||||||
Turbomachinery & Process Solutions | ||||||||||||||
Digital Solutions | ||||||||||||||
Total segment | ||||||||||||||
Corporate | ( | ( | ( | ( | ||||||||||
Inventory impairment (1) | ( | ( | ||||||||||||
Goodwill impairment | ( | |||||||||||||
Restructuring, impairment and other | ( | ( | ( | ( | ||||||||||
Separation related | ( | ( | ( | ( | ||||||||||
Other non-operating loss, net | ( | ( | ( | ( | ||||||||||
Interest expense, net | ( | ( | ( | ( | ||||||||||
Total | $ | ( | $ | $ | ( | $ |
Segment assets | June 30, 2020 | December 31, 2019 | ||||||
Oilfield Services | $ | $ | ||||||
Oilfield Equipment | ||||||||
Turbomachinery & Process Solutions | ||||||||
Digital Solutions | ||||||||
Total segment | ||||||||
Corporate and eliminations (1) | ||||||||
Total | $ | $ |
2020 | 2019 | |||||||
Balance at January 1 | $ | $ | ||||||
Provisions | ||||||||
Expenditures | ( | ( | ||||||
Other | ( | ( | ||||||
Balance at June 30 | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Oilfield Services | $ | $ | $ | $ | ||||||||||
Oilfield Equipment | ||||||||||||||
Turbomachinery & Process Solutions | ||||||||||||||
Digital Solutions | ||||||||||||||
Corporate | ||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Impairments of property, plant & equipment | $ | $ | $ | $ | ||||||||||
Employee-related termination expenses | ||||||||||||||
Contract termination fees | ||||||||||||||
Other incremental costs | ||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Brent oil price ($/Bbl) (1) | $ | 29.70 | $ | 69.04 | $ | 40.23 | $ | 66.07 | ||||||
WTI oil price ($/Bbl) (2) | 27.96 | 59.88 | 36.58 | 57.39 | ||||||||||
Natural gas price ($/mmBtu) (3) | 1.70 | 2.57 | 1.80 | 2.74 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | |||||||||||||||
North America | 417 | 1,071 | (61) | % | 699 | 1,149 | (39) | % | ||||||||||||
International | 834 | 1,109 | (25) | % | 954 | 1,069 | (11) | % | ||||||||||||
Worldwide | 1,251 | 2,180 | (43) | % | 1,653 | 2,218 | (25) | % |
Three Months Ended June 30, | $ Change | Six Months Ended June 30, | $ Change | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Revenue: | ||||||||||||||||||||
Oilfield Services | $ | 2,411 | $ | 3,263 | $ | (852) | $ | 5,550 | $ | 6,249 | $ | (699) | ||||||||
Oilfield Equipment | 696 | 693 | 3 | 1,407 | 1,428 | (21) | ||||||||||||||
Turbomachinery & Process Solutions | 1,161 | 1,405 | (244) | 2,246 | 2,707 | (461) | ||||||||||||||
Digital Solutions | 468 | 632 | (164) | 957 | 1,224 | (267) | ||||||||||||||
Total | $ | 4,736 | $ | 5,994 | $ | (1,258) | $ | 10,160 | $ | 11,608 | $ | (1,448) |
Three Months Ended June 30, | $ Change | Six Months Ended June 30, | $ Change | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Segment operating income (loss): | ||||||||||||||||||||
Oilfield Services | $ | 46 | $ | 233 | $ | (187) | $ | 252 | $ | 409 | $ | (157) | ||||||||
Oilfield Equipment | (14) | 14 | (28) | (23) | 26 | (49) | ||||||||||||||
Turbomachinery & Process Solutions | 149 | 135 | 14 | 283 | 253 | 30 | ||||||||||||||
Digital Solutions | 41 | 84 | (43) | 71 | 152 | (81) | ||||||||||||||
Total segment operating income | 221 | 466 | (245) | 583 | 839 | (256) | ||||||||||||||
Corporate | (117) | (105) | (12) | (239) | (205) | (34) | ||||||||||||||
Inventory impairment | (16) | — | (16) | (176) | — | (176) | ||||||||||||||
Goodwill impairment | — | — | — | (14,773) | — | (14,773) | ||||||||||||||
Restructuring, impairment and other | (103) | (50) | (53) | (1,429) | (112) | (1,317) | ||||||||||||||
Separation related | (37) | (40) | 3 | (77) | (74) | (3) | ||||||||||||||
Operating income (loss) | (52) | 271 | (323) | (16,111) | 447 | (16,558) | ||||||||||||||
Other non-operating loss, net | (255) | (131) | (124) | (230) | (110) | (120) | ||||||||||||||
Interest expense, net | (69) | (56) | (13) | (128) | (115) | (13) | ||||||||||||||
Income (loss) before income taxes | (376) | 84 | (460) | (16,469) | 222 | (16,691) | ||||||||||||||
Benefit (provision) for income taxes | 21 | (95) | 116 | 16 | (162) | 178 | ||||||||||||||
Net income (loss) | $ | (355) | $ | (11) | $ | (344) | $ | (16,453) | $ | 60 | $ | (16,513) |
(In millions) | 2020 | 2019 | ||||||
Operating activities | $ | 708 | $ | 409 | ||||
Investing activities | (437) | (563) | ||||||
Financing activities | 695 | (427) |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share (2) | Total Number of Shares Purchased as Part of a Publicly Announced Program (3) | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (3) | ||||||||||
April 1-30, 2020 | 2,635 | $ | 10.75 | — | $ | 18,690,655 | ||||||||
May 1-31, 2020 | 25,259 | $ | 16.84 | — | $ | 18,690,655 | ||||||||
June 1-30, 2020 | 13,986 | $ | 16.05 | — | $ | 18,690,655 | ||||||||
Total | 41,880 | $ | 16.19 | — |
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.DEF* | XBRL Definition Linkbase Document | |||||||
101.LAB* | XBRL Label Linkbase Document | |||||||
101.PRE* | XBRL Presentation Linkbase Document |
Baker Hughes Company (Registrant) | |||||||||||
Date: | July 24, 2020 | By: | /s/ BRIAN WORRELL | ||||||||
Brian Worrell | |||||||||||
Chief Financial Officer | |||||||||||
Date: | July 24, 2020 | By: | /s/ KURT CAMILLERI | ||||||||
Kurt Camilleri | |||||||||||
Senior Vice President, Controller and Chief Accounting Officer |
Date: | July 24, 2020 | By: | /s/ Lorenzo Simonelli | |||||||||||
Lorenzo Simonelli | ||||||||||||||
President and Chief Executive Officer | ||||||||||||||
Date: | July 24, 2020 | By: | /s/ Brian Worrell | |||||||||||
Brian Worrell | ||||||||||||||
Chief Financial Officer | ||||||||||||||
/s/ Lorenzo Simonelli | ||||||||||||||
Name: | Lorenzo Simonelli | |||||||||||||
Title: | President and Chief Executive Officer | |||||||||||||
Date: | July 24, 2020 | |||||||||||||
/s/ Brian Worrell | ||||||||||||||
Name: | Brian Worrell | |||||||||||||
Title: | Chief Financial Officer | |||||||||||||
Date: | July 24, 2020 |
Condensed Consolidated Statements of Financial Position (Unaudited) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
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Current assets: | ||||
Cash and cash equivalents | $ 4,132 | $ 3,249 | ||
Current receivables, net | 5,636 | 6,416 | ||
Inventories, net | 4,616 | 4,608 | ||
All other current assets | 1,118 | 949 | ||
Total current assets | 15,502 | 15,222 | ||
Property, plant and equipment (net of accumulated depreciation of $4,550 and $4,384) | 5,710 | 6,240 | ||
Goodwill | 5,868 | 20,690 | ||
Other intangible assets, net | 4,416 | 5,381 | ||
Contract and other deferred assets | 1,875 | 1,881 | ||
All other assets | 2,978 | 3,001 | ||
Deferred income taxes | 1,174 | 954 | ||
Total assets | [1] | 37,523 | 53,369 | |
Current liabilities: | ||||
Accounts payable | 3,628 | 4,268 | ||
Short-term debt and current portion of long-term debt | 934 | 321 | ||
Progress collections and deferred income | 3,507 | 2,870 | ||
All other current liabilities | 2,498 | 2,555 | ||
Total current liabilities | 10,567 | 10,014 | ||
Long-term debt | 6,766 | 6,301 | ||
Deferred income taxes | 177 | 51 | ||
Liabilities for pensions and other postretirement benefits | 1,059 | 1,079 | ||
All other liabilities | 1,389 | 1,425 | ||
Equity: | ||||
Capital in excess of par value | 23,432 | 23,565 | ||
Retained loss | (10,413) | 0 | ||
Accumulated other comprehensive loss | (1,765) | (1,636) | ||
Baker Hughes Company equity | 11,254 | 21,929 | ||
Noncontrolling interests | 6,311 | 12,570 | ||
Total noncontrolling interests | 17,565 | 34,499 | ||
Total liabilities and equity | 37,523 | 53,369 | ||
Common Class A | ||||
Equity: | ||||
Common stock | 0 | 0 | ||
Common Class B | ||||
Equity: | ||||
Common stock | $ 0 | $ 0 | ||
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Condensed Consolidated Statements of Changes in Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Common Class A | ||||
Cash dividends per share (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.36 | $ 0.36 |
Basis of Presentation and Summary of Significant Accounting Policies |
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Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF THE BUSINESS Baker Hughes Company (Baker Hughes, the Company, we, us, or, our) is an energy technology company with a diversified portfolio of technologies and services that span the entire energy value chain. The Company was formed as the result of a combination between Baker Hughes Incorporated (BHI) and the oil and gas business (GE O&G) of General Electric Company (GE) (the Transactions). We are a holding company and have no material assets other than our 63.5% ownership interest in Baker Hughes Holdings LLC (BHH LLC, formerly known as Baker Hughes, a GE company, LLC), the Baker Hughes trade name, and certain intercompany and tax related balances. BHH LLC is a Securities and Exchange Commission (SEC) Registrant with separate filing requirements with the SEC and its separate financial information can be obtained from www.sec.gov. BASIS OF PRESENTATION 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 SEC for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated and combined financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 (2019 Annual Report). We hold a majority economic interest in BHH LLC and conduct and exercise full control over all activities of BHH LLC without the approval of any other member. Accordingly, we consolidate the financial results of BHH LLC and report a noncontrolling interest in our condensed consolidated financial statements for the economic interest held by GE. As of June 30, 2020, GE's interest in us was 36.5%. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary by management to fairly state our results of operations, financial position and cash flows of the Company and its subsidiaries for the periods presented and are not indicative of the results that may be expected for a full year. The Company's financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest). All intercompany accounts and transactions have been eliminated. In the Company's financial statements and notes, certain amounts have been reclassified to conform to the current year presentation. In the notes to unaudited condensed consolidated financial statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. Certain columns and rows in our financial statements and notes thereto may not add due to the use of rounded numbers. Separation related costs as reflected in our condensed consolidated statements of income (loss) include costs incurred in connection with the ongoing activities related to our separation from GE. See "Note 16. Related Party Transactions" for further information. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Please refer to "Note 1. Basis of Presentation and Summary of Significant Accounting Policies," to our consolidated financial statements from our 2019 Annual Report for the discussion of our significant accounting policies. Please refer to the "New Accounting Standards Adopted" section of this Note for changes to our accounting policies. Cash and Cash Equivalents As of June 30, 2020 and December 31, 2019, we had $835 million and $1,102 million, respectively, of cash held in bank accounts that cannot be released, transferred or otherwise converted into a currency that is regularly transacted internationally, due to lack of market liquidity, capital controls or similar monetary or exchange limitations limiting the flow of capital out of the jurisdiction. These funds are available to fund operations and growth in these jurisdictions, and we do not currently anticipate a need to transfer these funds to the U.S. Included in these amounts are $89 million and $142 million, as of June 30, 2020 and December 31, 2019, respectively, held on behalf of GE. Cash and cash equivalents includes a total of $100 million and $162 million of cash at June 30, 2020 and December 31, 2019, respectively, held on behalf of GE, and a corresponding liability is reported in short-term borrowings. See "Note 16. Related Party Transactions" for further details. NEW ACCOUNTING STANDARDS ADOPTED On January 1, 2020, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses. The ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models previously used under U.S. GAAP, which generally require that a loss be incurred before it is recognized. The new standard also applies to financial assets arising from revenue transactions such as contract assets and accounts receivables. The adoption did not have a material impact on our condensed consolidated financial statements. On January 1, 2020, we adopted FASB ASU 2017-04, Intangibles - Goodwill and Other - Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating the requirement to calculate the fair value of the individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the new ASU, when required to test goodwill for recoverability, an entity will perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying value and should recognize an impairment charge for the amount by which the carrying value exceeds the fair value of the reporting unit. We have applied this ASU on a prospective basis. See "Note 5. Goodwill and Other Intangible Assets" for further details. NEW ACCOUNTING STANDARDS TO BE ADOPTED All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.
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Revenue Related to Contracts with Customers |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Related to Contracts with Customers | REVENUE RELATED TO CONTRACTS WITH CUSTOMERS DISAGGREGATED REVENUE We disaggregate our revenue from contracts with customers by primary geographic markets.
REMAINING PERFORMANCE OBLIGATIONS As of June 30, 2020 and 2019, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $22.9 billion and $20.6 billion, respectively. As of June 30, 2020, we expect to recognize revenue of approximately 52%, 67% and 91% of the total remaining performance obligations within 2, 5, and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations. PROGRESS COLLECTIONS AND DEFERRED INCOMEContract liabilities include progress collections, which reflects billings in excess of revenue, and deferred income on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements. Contract liabilities are comprised of the following:
Revenue recognized during the three months ended June 30, 2020 and 2019 that was included in the contract liabilities at the beginning of the period was $403 million and $295 million, respectively, and $813 million and $848 million during the six months ended June 30, 2020 and 2019, respectively.
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Current Receivables |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current Receivables | CURRENT RECEIVABLES Current receivables are comprised of the following:
Customer receivables are recorded at the invoiced amount. Related parties consists primarily of amounts owed to us by GE. The "Other" category consists primarily of indirect taxes, other tax receivables, customer retentions and advance payments to suppliers.
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Inventories |
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Inventory, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Inventories | INVENTORIES Inventories, net of reserves of $421 million and $429 million as of June 30, 2020 and December 31, 2019, respectively, are comprised of the following:
During the three and six months ended June 30, 2020, we recorded inventory impairments of $16 million, predominantly in our Oilfield Equipment segment, and $176 million, predominantly in our Oilfield Services segment, respectively, as a result of certain restructuring activities initiated by the Company. Charges for inventory impairments are predominantly reported in the "Cost of goods sold" caption of the condensed consolidated statements of income (loss).
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL The changes in the carrying value of goodwill are detailed below by segment:
During the third quarter of each fiscal year, in conjunction with our annual strategic planning process, we perform our annual goodwill impairment test for each of our reporting units. Our reporting units are the same as our four reportable segments. We also test goodwill for impairment whenever events or circumstances occur which, in our judgment, could more likely than not reduce the fair value of one or more reporting units below its carrying value. Potential impairment indicators include, but are not limited to, (i) the results of our most recent annual or interim impairment testing, in particular the magnitude of the excess of fair value over carrying value observed, (ii) downward revisions to internal forecasts, and the magnitude thereof, if any, and (iii) declines in our market capitalization below our book value, and the magnitude and duration of those declines, if any. During the first quarter of 2020, our market capitalization declined significantly compared to the fourth quarter of 2019. Our closing stock price fell to a historic low of $9.33 on March 23, 2020. Over the same period, the equity value of our peer group companies and the overall U.S. stock market also declined significantly amid market volatility. In addition, the Oilfield Services Index (OSX), an indicator of investors’ view of the earnings prospects and cost of capital of the oil and gas services industry, traded at prices that were the lowest in its history. These declines were driven by the uncertainty surrounding the outbreak of the coronavirus (COVID-19) and other macroeconomic events such as the geopolitical tensions between OPEC and Russia, which also resulted in a significant drop in oil prices. Based on these factors, we concluded that a triggering event occurred and, accordingly, an interim quantitative impairment test was performed as of March 31, 2020 (“testing date”). In performing the interim quantitative impairment test and consistent with our prior practice, we determined the fair value of each of our reporting units using a combination of the income approach and the market approach by assessing each of these valuation methodologies based upon availability and relevance of comparable company data and determining the appropriate weighting. Under the income approach, the fair value for each of our reporting units was determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We used our internal forecasts, updated for recent events, to estimate future cash flows with cash flows beyond the specific operating plans estimated using a terminal value calculation, which incorporates historical and forecasted trends, including an estimate of long-term future growth rates, based on our most recent views of the long-term outlook for each reporting unit. Our internal forecasts include assumptions about future commodity pricing and expected demand for our goods and services. Due to the inherent uncertainties involved in making estimates and assumptions, actual results may differ from those assumed in our forecasts. We derived our discount rates using a capital asset pricing model and analyzing published rates for industries relevant to our reporting units to estimate the cost of equity financing. We used discount rates that are commensurate with the risks and uncertainties inherent in the respective businesses and in our internally developed forecasts, updated for recent events. Valuations using the market approach were derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses was based on the markets in which the reporting units operate giving consideration to risk profiles, size, geography, and diversity of products and services. Based upon the results of our interim quantitative impairment test performed during the first quarter of 2020, we concluded that the carrying value of the Oilfield Services (OFS) and Oilfield Equipment (OFE) reporting units exceeded their estimated fair value as of the testing date, which resulted in goodwill impairment charges of $11,484 million and $3,289 million, respectively. The goodwill impairment was calculated as the amount that the carrying value of the reporting unit, including any goodwill, exceeded its fair value. As of March 31, 2020, the carrying value of our OFS and OFE reporting units equal their fair value upon completion of the goodwill impairment test whereas our other reporting units still maintain a headroom that is substantially in excess of their carrying values. During the second quarter of 2020, we conducted a review to assess whether indicators of impairment existed. As a result of this review, we concluded that no indicators existed that would make management believe it is more likely than not that the fair value of each reporting unit is less than its carrying value. There can be no assurances that future sustained declines in macroeconomic or business conditions affecting our industry will not occur, which could result in goodwill impairment charges in future periods. OTHER INTANGIBLE ASSETS Intangible assets are comprised of the following:
(1)During the three months ended June 30, 2020, there were no intangible asset impairments. During the six months ended June 30, 2020, we recorded intangible asset impairments to customer relationships of $476 million, technology of $8 million, trade names and trademarks of $236 million, and capitalized software of $3 million. See "Note 18. Restructuring, Impairment and Other" for further discussion. Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 1 to 30 years. Amortization expense for the three months ended June 30, 2020 and 2019 was $72 million and $97 million, respectively, and $156 million and $193 million for the six months ended June 30, 2020 and 2019, respectively. Estimated amortization expense for the remainder of 2020 and each of the subsequent five fiscal years is expected to be as follows:
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Contract and Other Deferred Assets |
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Deferred Revenue Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract and Other Deferred Assets | CONTRACT AND OTHER DEFERRED ASSETS A majority of our long-term product service agreements relate to our Turbomachinery & Process Solutions segment. Contract assets reflect revenue earned in excess of billings on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements and other deferred contract related costs. Contract assets are comprised of the following:
(1)Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment and certain other service agreements. Revenue recognized during the three months ended June 30, 2020 and 2019 from performance obligations satisfied (or partially satisfied) in previous periods related to our long-term service agreements was $24 million and $14 million, respectively, and $30 million and $21 million during the six months ended June 30, 2020 and 2019, respectively. This includes revenue recognized from revisions to cost or billing estimates that may affect a contract’s total estimated profitability resulting in an adjustment of earnings.
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Progress Collections and Deferred Income |
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Progress Collections and Deferred Income | REVENUE RELATED TO CONTRACTS WITH CUSTOMERS DISAGGREGATED REVENUE We disaggregate our revenue from contracts with customers by primary geographic markets.
REMAINING PERFORMANCE OBLIGATIONS As of June 30, 2020 and 2019, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $22.9 billion and $20.6 billion, respectively. As of June 30, 2020, we expect to recognize revenue of approximately 52%, 67% and 91% of the total remaining performance obligations within 2, 5, and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations. PROGRESS COLLECTIONS AND DEFERRED INCOMEContract liabilities include progress collections, which reflects billings in excess of revenue, and deferred income on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements. Contract liabilities are comprised of the following:
Revenue recognized during the three months ended June 30, 2020 and 2019 that was included in the contract liabilities at the beginning of the period was $403 million and $295 million, respectively, and $813 million and $848 million during the six months ended June 30, 2020 and 2019, respectively.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES Our leasing activities primarily consist of operating leases for administrative offices, manufacturing facilities, research centers, service centers, sales offices and certain equipment.
(1)Leases with a term of one year or less, including leases with a term of one month or less Cash flows used in operating activities for operating leases approximates our expense for the three and six months ended June 30, 2020 and 2019. The weighted-average remaining lease term as of June 30, 2020 and 2019 was approximately eight years and nine years, respectively, for our operating leases. The weighted-average discount rate used to determine the operating lease liability as of June 30, 2020 and 2019 was 3.8% and 4.4%, respectively.
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Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | BORROWINGS Short-term and long-term borrowings are comprised of the following:
On May 1, 2020, BHH LLC issued $500 million aggregate principal amount of 4.486% Senior Notes due May 1, 2030. We will pay interest on the notes each May 1 and November 1, beginning on November 1, 2020. These Senior Notes are presented net of issuance costs of $4 million in our condensed consolidated statements of financial position. We have a commercial paper program under which we may issue from time to time commercial paper with maturities of no more than 397 days. During the second quarter of 2020, we increased our commercial paper program from $3 billion to approximately $3.8 billion. Baker Hughes Co-Obligor, Inc. is a co-obligor, jointly and severally with BHH LLC on our long-term debt securities. This co-obligor is a 100%-owned finance subsidiary of BHH LLC that was incorporated for the sole purpose of serving as a corporate co-obligor of long-term debt securities and has no assets or operations other than those related to its sole purpose. As of June 30, 2020, Baker Hughes Co-Obligor, Inc. is a co-obligor of our long-term debt securities totaling $6,656 million. Certain Senior Notes contain covenants that restrict BHH LLC's ability to take certain actions, including, but not limited to, the creation of certain liens securing debt, the entry into certain sale-leaseback transactions and engaging in certain merger, consolidation and asset sale transactions in excess of specified limits. At June 30, 2020, we were in compliance with all debt covenants. The estimated fair value of total borrowings at June 30, 2020 and December 31, 2019 was $8,171 million and $6,847 million, respectively. For a majority of our borrowings the fair value was determined using quoted period-end market prices. Where market prices are not available, we estimate fair values based on valuation methodologies using current market interest rate data adjusted for our non-performance risk. See "Note 16. Related Party Transactions" for additional information on the short-term borrowings from GE.
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Employee Benefit Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS We have both funded and unfunded defined benefit plans which include four U.S. plans and seven non-U.S. plans, primarily in the UK, Germany, and Canada, all with plan assets or obligations greater than $20 million. We use a December 31 measurement date for these plans, and generally provide benefits to employees based on formulas recognizing length of service and earnings. The components of net periodic cost of plans sponsored by us are as follows:
The service cost component of the net periodic cost is included in operating income (loss) and all other components are included in non-operating loss in our condensed consolidated statements of income (loss).
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Income Taxes |
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Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES For the three months ended June 30, 2020, income tax benefit was $21 million. The difference between the U.S. statutory tax rate of 21% and the current effective tax rate is primarily related to losses with no tax benefit due to valuation allowances, partially offset by the impact of the U.S. Coronavirus Aid, Relief, and Economic Security Act (CARES Act). For the six months ended June 30, 2020, income tax benefit was $16 million. The difference between the U.S. statutory tax rate of 21% and the current effective tax rate is primarily related to non-deductible goodwill impairment, the geographical mix of earnings and losses, and losses with no tax benefit due to valuation allowances. In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The CARES Act, which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including allowing net operating losses originating in 2018, 2019 or 2020 to be carried back up to five years. During the three months ended June 30, 2020, we elected to carry back losses to 2014 and accordingly recognized a $75 million tax benefit
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Equity |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | EQUITY COMMON STOCK We are authorized to issue 2 billion shares of Class A common stock, 1.25 billion shares of Class B common stock and 50 million shares of preferred stock each of which have a par value of $0.0001 per share. The number of shares of Class A common stock and Class B common stock outstanding as of June 30, 2020 is 655 million and 377 million, respectively. We have not issued any preferred stock. GE owns all the issued and outstanding Class B common stock. Each share of Class A and Class B common stock and the associated membership interest in BHH LLC form a paired interest. While each share of Class B common stock has equal voting rights to a share of Class A common stock, it has no economic rights, meaning holders of Class B common stock have no right to dividends or any assets in the event of liquidation of the Company. GE is entitled through BHH LLC Units (LLC Units) to receive distributions on an equal amount of any dividend paid by the Company. The following table presents the changes in the number of shares outstanding (in thousands):
(1) Share amounts reflected above are net of shares withheld to satisfy the employee's tax withholding obligation. ACCUMULATED OTHER COMPREHENSIVE LOSS (AOCL) The following tables present the changes in accumulated other comprehensive loss, net of tax:
The amounts reclassified from accumulated other comprehensive loss during the six months ended June 30, 2020 and 2019 represent amortization of net actuarial gain (loss) which are included in the computation of net periodic pension cost (see "Note 10. Employee Benefit Plans" for additional details). These reclassifications are recorded across the various cost and expense line items within the condensed consolidated statements of income (loss). NONCONTROLLING INTEREST Noncontrolling interests represent the portion of net assets in consolidated entities that are not owned by the Company. As of June 30, 2020 and December 31, 2019, GE owned approximately 36.5% and 36.7%, respectively, of BHH LLC and this represents the majority of the noncontrolling interest balance reported within equity.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE Basic and diluted net income (loss) per share of Class A common stock is presented below:
Under the Exchange Agreement between GE and us, GE is entitled to exchange its holding in our Class B common stock, and associated LLC Units, for Class A common stock on a one-for-one basis (subject to adjustment in accordance with the terms of the Exchange Agreement) or, at the option of Baker Hughes, an amount of cash equal to the aggregate value (determined in accordance with the terms of the Exchange Agreement) of the shares of Class A common stock that would have otherwise been received by GE in the exchange. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) attributable to holders of Class A common stock would be adjusted due to the elimination of the noncontrolling interests associated with the Class B common stock (including any tax impact). For the three and six months ended June 30, 2020 and 2019, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive. Shares of our Class B common stock do not share in earnings or losses of the Company and are not considered in the calculation of basic or diluted earnings per share (EPS). As such, separate presentation of basic and diluted EPS of Class B under the two class method has not been presented. For the three and six months ended June 30, 2020 and for the three months ended June 30, 2019, we excluded all outstanding equity awards from the computation of diluted net loss per share because their effect is antidilutive. For the six months ended June 30, 2019, Class A diluted shares include the dilutive impact of equity awards except for approximately six million options that were excluded because the exercise price exceeded the average market price of the Class A common stock and is therefore antidilutive.
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Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | FINANCIAL INSTRUMENTS RECURRING FAIR VALUE MEASUREMENTS Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities.
There were no transfers between Level 1, 2 and 3 during the six months ended June 30, 2020. The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities:
The most significant unobservable input used in the valuation of our Level 3 instruments is the discount rate. Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value of our investment securities. There are no unrealized gains or losses recognized in the condensed consolidated statement of income (loss) on account of any Level 3 instrument still held at the reporting date. At June 30, 2020 and December 31, 2019, we held $29 million and $111 million, respectively, of these investment securities on behalf of GE.
(1)All of our investment securities are classified as available for sale instruments. Non-U.S. debt securities mature within two years. (2)Gains (losses) recorded to earnings related to these securities were nil and $(9) million for the three months ended June 30, 2020 and 2019, respectively, and $(13) million and $1 million for the six months ended June 30, 2020 and 2019, respectively. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS Our financial instruments include cash, cash equivalents, current receivables, certain investments, accounts payable, short and long-term debt, and derivative financial instruments. Except for long-term debt, the estimated fair value of these financial instruments at June 30, 2020 and December 31, 2019 approximates their carrying value as reflected in our condensed consolidated financial statements. For further information on the fair value of our debt, see "Note 9. Borrowings." DERIVATIVES AND HEDGING We use derivatives to manage our risks and do not use derivatives for speculation. The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives.
Derivatives are classified in the captions "All other current assets," "All other assets," "All other current liabilities," and "All other liabilities" depending on their respective maturity date. As of June 30, 2020 and December 31, 2019, $64 million and $52 million of derivative assets are recorded in "All other current assets" and $5 million and $6 million are recorded in "All other assets" of the condensed consolidated statements of financial position, respectively. As of June 30, 2020 and December 31, 2019, $39 million and $24 million of derivative liabilities are recorded in "All other current liabilities" and $3 million and $3 million are recorded in "All other liabilities" of the condensed consolidated statements of financial position, respectively. FORMS OF HEDGING Cash Flow Hedges We use cash flow hedging primarily to reduce or eliminate the effects of foreign exchange rate changes on purchase and sale contracts. Accordingly, the vast majority of our derivative activity in this category consists of currency exchange contracts. We also use commodity derivatives to reduce or eliminate price risk on raw materials purchased for use in manufacturing. Changes in the fair value of cash flow hedges are recorded in a separate component of equity (referred to below as Accumulated Other Comprehensive Income, or AOCI) and are recorded in earnings in the period in which the hedged transaction occurs. The table below summarizes our hedging instrument activity for currency exchange contracts.
We expect to transfer $2 million to earnings as a gain in the next 12 months contemporaneously with the earnings effects of the related forecast transactions. Both at June 30, 2020 and December 31, 2019, the maximum term of derivative instruments that hedge forecast transactions was one year. Economic Hedges These derivatives are not designated as hedges from an accounting standpoint (and therefore we do not apply hedge accounting to the relationship) but otherwise serve the same economic purpose as other hedging arrangements. Economic hedges are marked to fair value through earnings each period. The following table summarizes the gains (losses) from derivatives not designated as hedges in the condensed consolidated statements of income (loss).
(1)Excludes losses of $2 million and gains of $2 million on embedded derivatives for the three months ended June 30, 2020 and 2019, respectively, and gains of $5 million and nil during the six months ended June 30, 2020 and 2019, 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 the change in fair value of the economically hedged items in the current and future periods. NOTIONAL AMOUNT OF DERIVATIVES The notional amount of a derivative is the number of units of the underlying (for example, the notional principal amount of the debt in an interest rate swap). A substantial majority of the outstanding notional amount of $6.9 billion and $5.7 billion at June 30, 2020 and December 31, 2019, respectively, is related to hedges of anticipated sales and purchases in foreign currency, commodity purchases, and contractual terms in contracts that are considered embedded derivatives and for intercompany borrowings in foreign currencies. We generally disclose derivative notional amounts on a gross basis to indicate the total counterparty risk. Where we have gross purchase and sale derivative contracts for a particular currency, we look to execute these contracts with the same counterparty to reduce our exposure. The notional amount of these derivative instruments do not generally represent amounts exchanged by us and the counterparties, and thus are not reflective of the cash requirements related to these derivative instruments or of any other possible exposure. COUNTERPARTY CREDIT RISK Fair values of our derivatives can change significantly from period to period based on, among other factors, market movements and changes in our positions. We manage counterparty credit risk (the risk that counterparties will default and not make payments to us according to the terms of our agreements) on an individual counterparty basis. OTHER EQUITY INVESTMENTS As of June 30, 2020 and December 31, 2019, the carrying amount of equity securities without readily determinable fair values was $637 million. During 2018, we discontinued applying the equity method on our investment in BJ Services, as required under U.S. GAAP, as previous losses had reduced our investment to zero, and we have no requirements to advance any additional funds.
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Segment Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION Our reportable segments, which are the same as our operating segments, are organized based on the nature of markets and customers. We report our operating results through our four operating segments that consist of similar products and services within each segment as described below. OILFIELD SERVICES (OFS) Oilfield Services provides products and services for onshore and offshore operations across the lifecycle of a well, ranging from drilling, evaluation, completion, production and intervention. Products and services include diamond and tri-cone drill bits, drilling services, including directional drilling technology, measurement while drilling & logging while drilling, downhole completion tools and systems, wellbore intervention tools and services, wireline services, drilling and completions fluids, oilfield and industrial chemicals, pressure pumping, and artificial lift technologies, including electrical submersible pumps. OILFIELD EQUIPMENT (OFE) Oilfield Equipment provides a broad portfolio of products and services required to facilitate the safe and reliable flow of hydrocarbons from the subsea wellhead to the surface. Products and services include pressure control equipment and services, subsea production systems and services, drilling equipment, and flexible pipeline systems. Oilfield Equipment designs and manufactures onshore and offshore drilling and production systems and equipment for floating production platforms and provides a full range of services related to onshore and offshore drilling activities. TURBOMACHINERY & PROCESS SOLUTIONS (TPS) Turbomachinery & Process Solutions provides equipment and related services for mechanical-drive, compression and power-generation applications across the oil and gas industry as well as products and services to serve the downstream segments of the industry including refining, petrochemical, distributed gas, flow and process control and other industrial applications. The Turbomachinery & Process Solutions portfolio includes drivers (aero-derivative gas turbines, heavy-duty gas turbines and synchronous and induction electric motors), compressors (centrifugal and axial, direct drive high speed, integrated, subsea compressors, turbo expanders and reciprocating), turn-key solutions (industrial modules and waste heat recovery), pumps, valves, and compressed natural gas (CNG) and small-scale liquefied natural gas (LNG) solutions used primarily for shale oil and gas field development. DIGITAL SOLUTIONS (DS) Digital Solutions provides equipment, software, and services for a wide range of industries, including oil & gas, power generation, aerospace, metals, and transportation. The offerings include sensor-based process measurement, non-destructive testing and inspection, turbine, generator and plant controls and condition monitoring, as well as pipeline integrity solutions. SEGMENT RESULTS Segment revenue and profit are determined based on the internal performance measures used by the Company to assess the performance of each segment in a financial period. Summarized financial information is shown in the following tables. Consistent accounting policies have been applied by all segments within the Company, for all reporting periods.
The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes before the following: net interest expense, net other non-operating loss, corporate expenses, restructuring, impairment and other charges, inventory impairments, separation related costs, goodwill impairments and certain gains and losses not allocated to the operating segments.
(1)Charges for inventory impairments are predominantly reported in the "Cost of goods sold" caption of the condensed consolidated statements of income (loss). The following table presents total assets by segment:
(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.
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Related Party Transactions |
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Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS GE is our largest shareholder and their interest in us was 36.5% as of June 30, 2020. On September 16, 2019, GE ceased to be our controlling shareholder when their ownership in us was reduced from approximately 50.3% to approximately 36.8% (the Trigger Date). Following the Trigger Date and until GE and its affiliates own less than 20% of the voting power of our outstanding common stock, GE is entitled to designate one person for nomination to our board of directors. During 2018 and 2019, we entered into a Master Agreement and a series of related ancillary agreements with GE and BHH LLC (collectively, the Master Agreement Framework) designed to solidify the commercial and technological collaborations between us and GE and to facilitate our transition from operating as a controlled company. In particular, the Master Agreement Framework contemplated long-term agreements between us, BHH LLC and GE on technology, fulfillment and other key areas providing greater clarity to customers, employees and shareholders. Also in 2019, we entered into an Omnibus Agreement, a general framework agreement that addresses certain outstanding matters under existing long-term commercial agreements between us and GE. The Omnibus Agreement contains provisions regarding, among other things, (i) the repayment of certain outstanding amounts mutually owed by the parties, (ii) certain employee and assets transfers (including the allocation of costs and expenses associated therewith), and (iii) certain matters related to three international joint ventures. RELATED PARTY TRANSACTIONS WITH GE On July 3, 2017, we executed a promissory note with GE (which was amended and restated on July 31, 2019 in connection with the entry into the Omnibus Agreement referenced above) that represents certain cash that we are holding on GE's behalf due to the restricted nature of the cash. The restriction arises as the majority of the cash cannot be released, transferred or otherwise converted into a non-restricted market currency due to the lack of market liquidity, capital controls or similar monetary or exchange limitations by a government entity of the jurisdiction in which such cash is situated. There is no maturity date on the promissory note, but we remain obligated to repay GE, therefore, this obligation is reflected as short-term borrowings. As of June 30, 2020, of the $129 million due to GE, $100 million was held in the form of cash and $29 million was held in the form of investment securities. As of December 31, 2019, of the $273 million due to GE, $162 million was held in the form of cash and $111 million was held in the form of investment securities. A corresponding liability is reported in short-term borrowings in the condensed consolidated statements of financial position. We sold products and services to GE and its affiliates for $49 million and $108 million during the three months ended June 30, 2020 and 2019, respectively, and $105 million and $189 million during the six months ended June 30, 2020 and 2019, respectively. Purchases from GE and its affiliates were $346 million and $428 million during the three months ended June 30, 2020 and 2019, respectively, and $609 million and $879 million during the six months ended June 30, 2020 and 2019, respectively. The Company has $357 million and $536 million of accounts payable at June 30, 2020 and December 31, 2019, respectively, for goods and services provided by GE in the ordinary course of business. The Company has $521 million and $495 million of current receivables at June 30, 2020 and December 31, 2019, respectively, for goods and services provided to GE in the ordinary course of business.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES LITIGATION We are subject to a number of lawsuits and claims arising out of the conduct of our business. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. We record a liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, including accruals for self-insured losses which are calculated based on historical claim data, specific loss development factors and other information. A range of total possible losses for all litigation matters cannot be reasonably estimated. Based on a consideration of all relevant facts and circumstances, we do not expect the ultimate outcome of currently pending lawsuits or claims against us, other than those discussed below, will have a material adverse effect on our financial position, results of operations or cash flows, however, there can be no assurance as to the ultimate outcome of these matters. With respect to the litigation matters below, if there was an adverse outcome individually or collectively, there could be a material impact on our business, financial condition and results of operations expected for the year. These litigation matters are subject to inherent uncertainties and management's view of these matters may change in the future. Therefore, there can be no assurance as to the ultimate outcome of these matters. During 2014, we received notification from a customer related to a possible equipment failure in a natural gas storage system in Northern Germany, which includes certain of our products. The customer initiated arbitration proceedings against us on June 19, 2015, under the rules of the German Institute of Arbitration e.V. (DIS). On August 3, 2016, the customer amended its claims and alleged damages of €202 million plus interest at an annual rate of prime + 5%. Hearings before the arbitration panel were held January 16, 2017 through January 23, 2017, and March 20, 2017 through March 21, 2017. In addition, on September 21, 2015, TRIUVA Kapitalverwaltungsgesellschaft mbH filed a lawsuit in the United States District Court for the Southern District of Texas, Houston Division against the Company and Baker Hughes Oilfield Operations, Inc. alleging that the plaintiff is the owner of gas storage caverns in Etzel, Germany in which the Company provided certain equipment in connection with the development of the gas storage caverns. The plaintiff further alleges that the Company supplied equipment that was either defectively designed or failed to warn of risks that the equipment posed, and that these alleged defects caused damage to the plaintiff's property. The plaintiff seeks recovery of alleged compensatory and punitive damages of an unspecified amount, in addition to reasonable attorneys' fees, court costs and pre-judgment and post-judgment interest. The allegations in this lawsuit are related to the claims made in the June 19, 2015 German arbitration referenced above. On June 7, 2018, the DIS arbitration panel issued a confidential Arbitration Ruling which addressed all claims asserted by the customer. The estimated financial impact of the Arbitration Ruling has been reflected in the Company's financial statements and did not have a material impact. Further, on March 11, 2019, the customer initiated a second arbitral proceeding against us, under the rules of the German Institute of Arbitration e.V. (DIS). The customer alleged damages of €142 million plus interest at an annual rate of prime + 5% since June 20, 2015. The allegations in this second arbitration proceeding are related to the claims made in the June 19, 2015 German arbitration and Houston Federal Court proceedings referenced above. The Company is contesting the claims made by TRIUVA in the Houston Federal Court and the claims made by the customer in the second arbitration proceeding. At this time, we are not able to predict the outcome of the claims asserted in the Houston Federal Court or the second arbitration proceeding. On July 31, 2015, Rapid Completions LLC filed a lawsuit in federal court in the Eastern District of Texas against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc., and others claiming infringement of U.S. Patent Nos. 6,907,936; 7,134,505; 7,543,634; 7,861,774; and 8,657,009. On August 6, 2015, Rapid Completions amended its complaint to allege infringement of U.S. Patent No. 9,074,451. On April 1, 2016, Rapid Completions removed U.S. Patent No. 6,907,936 from its claims in the lawsuit. On April 5, 2016, Rapid Completions filed a second lawsuit in federal court in the Eastern District of Texas against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc. and others claiming infringement of U.S. Patent No. 9,303,501. These patents relate primarily to certain specific downhole completions equipment. The plaintiff has requested a permanent injunction against further alleged infringement, damages in an unspecified amount, supplemental and enhanced damages, and additional relief such as attorney's fees and costs. During August and September 2016, the United States Patent and Trademark Office (USPTO) agreed to institute an inter-partes review of U.S. Patent Nos 7,861,774; 7,134,505; 7,543,634; 6,907,936; 8,657,009; and 9,074,451. On August 29, 2017, the USPTO issued its final written decisions in the inter-partes reviews of U.S. Patent Nos. 8,657,009 and 9,074,451 finding that all claims of those patents were unpatentable. On August 31, 2017, the USPTO issued its final written decision in the inter-partes review of U.S. Patent 6,907,936 - the patent dropped from the lawsuit by the plaintiffs - finding that all claims of this patent were patentable. On October 27, 2017, Rapid Completions filed its notices of appeal of the USPTO’s final written decision in the inter-partes review of U.S. Patent Nos. 8,657,009 and 9,074,451. On September 26, 2018, the USPTO issued its final written decision in the inter-partes review of U.S. Patent No. 7,134,505 finding all of the challenged claims unpatentable. On September 27, 2018, the USPTO issued its final written decision in the inter-partes review of U.S. Patent No. 7,543,634 finding all of the challenged claims unpatentable. On November 19, 2018, the U.S. Court of Appeals for the Federal Circuit affirmed the USPTO’s unpatentability findings with respect to U.S. Patent Nos. 8,657,009 and 9,074,451. On November 26, 2018, Rapid Completions filed notices of appeal of the USPTO’s final written decisions in the inter partes reviews of U.S. Patent No. 7,134,505, and 7,543,634. On May 2, 2019, the USPTO issued a final written decision in an IPR on U.S. Patent Number 9,303,501 finding all of its claims unpatentable, and Rapid Completions appealed that decision to the Federal Circuit on July 5, 2019. On November 13, 2019, the U.S. Court of Appeals for the Federal Circuit affirmed the USPTO’s unpatentability findings with respect to U.S. Patent No. 7,134,505, and 7,543,634. On November 26, 2019, the USPTO issued a final written decision in the inter-partes review of U.S. Patent No. 7,861,774 finding all challenged claims unpatentable, and Rapid Completions did not timely appeal that decision. On January 21, 2020, the Federal Circuit affirmed the USPTO’s unpatentability finding as to all asserted claims of the U.S. Patent No. 9,303,501. The deadline for Rapid Completions to file a writ of certiorari petition to the U.S. Supreme Court on any of the USPTO's unpatentability findings has passed. In January 2013, INEOS and Naphtachimie initiated expertise proceedings in Aix-en-Provence, France arising out of a fire at a chemical plant owned by INEOS in Lavera, France, which resulted in a 15-day plant shutdown and destruction of a steam turbine, which was part of a compressor train owned by Naphtachimie. The most recent quantification of the alleged damages is €250 million. Two of the Company's subsidiaries (and 17 other companies) were notified to participate in the proceedings. The proceedings are ongoing, and at this time, there is no indication that the Company's subsidiaries were involved in the incident. Although the outcome of the claims remains uncertain, our insurer has accepted coverage and is defending the Company in the expertise proceeding. On July 31, 2018, International Engineering & Construction S.A. (IEC) initiated arbitration proceedings in New York administered by the International Center for Dispute Resolution (ICDR) against the Company and its subsidiaries arising out of a series of sales and service contracts entered between IEC and the Company’s subsidiaries for the sale and installation of LNG plants and related power generation equipment in Nigeria (Contracts). Prior to the filing of the IEC Arbitration, the Company’s subsidiaries made demands for payment due under the Contracts. On August 15, 2018, the Company’s subsidiaries initiated a separate demand for ICDR arbitration against IEC for claims of additional costs and amounts due under the Contracts. On October 10, 2018, IEC filed a Petition to Compel Arbitration in the United States District Court for the Southern District of New York against the Company seeking to compel non-signatory Baker Hughes entities to participate in the arbitration filed by IEC. The complaint is captioned International Engineering & Construction S.A. et al. v. Baker Hughes, a GE company LLC, et al. No. 18-cv-09241 (S.D.N.Y 2018); this action was dismissed by the Court on August 13, 2019. In the arbitration, IEC alleges breach of contract and other claims against the Company and its subsidiaries and seeks recovery of alleged compensatory damages, in addition to reasonable attorneys' fees, expenses and arbitration costs. On March 15, 2019, IEC amended its request for arbitration to alleged damages of $591 million of lost profits plus unspecified additional costs based on alleged non-performance of the contracts in dispute. The arbitration hearing was held from December 9, 2019 to December 20, 2019. On March 3, 2020, IEC amended their damages claim to $700 million of alleged loss cash flow or, in the alternative, $244.9 million of lost profits and various costs based on alleged non-performance of the contracts in dispute, and in addition $4.8 million of liquidated damages, $58.6 million in take-or-pay costs of feed gas, and unspecified additional costs of rectification and take-or-pay future obligations, plus unspecified interest and attorneys' fees. On May 3, 2020, the arbitration panel dismissed IEC's request for take-or-pay damages. On May 29, 2020, IEC quantified their claim for legal fees at $14.2 million and reduced their alternative claim from $244.9 million to approximately $235 million. The Company and its subsidiaries have contested IEC’s claims and are pursuing claims for compensation under the contracts. At this time, we are not able to predict the outcome of these claims. On March 15, 2019 and March 18, 2019, the City of Riviera Beach Pension Fund and Richard Schippnick, respectively, filed in the Delaware Court of Chancery shareholder derivative lawsuits for and on the Company’s behalf against GE, the then-current members of the Board of Directors of the Company and the Company as a nominal defendant, related to the decision to (i) terminate the contractual prohibition barring GE from selling any of the Company’s shares before July 3, 2019; (ii) repurchase $1.5 billion in the Company’s stock from GE; (iii) permit GE to sell approximately $2.5 billion in the Company’s stock through a secondary offering; and (iv) enter into a series of other agreements and amendments that will govern the ongoing relationship between the Company and GE (collectively, the “2018 Transactions”). The complaints in both lawsuits allege, among other things, that GE, as the Company’s controlling stockholder, and the members of the Company’s Board of Directors breached their fiduciary duties by entering into the 2018 Transactions. The relief sought in the complaints includes a request for a declaration that the defendants breached their fiduciary duties, that GE was unjustly enriched, disgorgement of profits, an award of damages sustained by the Company, pre- and post-judgment interest, and attorneys’ fees and costs. On March 21, 2019, the Chancery Court entered an order consolidating the Schippnick and City of Riviera Beach complaints under consolidated C.A. No. 2019-0201-AGB, styled in re Baker Hughes, a GE company derivative litigation. On May 10, 2019, Plaintiffs voluntarily dismissed their claims against the members of the Company’s Conflicts Committee, and on May 15, 2019, Plaintiffs voluntarily dismissed their claims against former Baker Hughes director Martin Craighead. On June 7, 2019, the defendants and nominal defendant filed a motion to dismiss the lawsuit on the ground that the derivative plaintiffs failed to make a demand on the Company’s Board of Directors to pursue the claims itself, and GE and the Company’s Board of Directors filed a motion to dismiss the lawsuit on the ground that the complaint failed to state a claim on which relief can be granted. The Chancery Court denied the motions on October 8, 2019, except granted GE’s motion to dismiss the unjust enrichment claim against it. On October 31, 2019, the Company’s Board of Directors designated a Special Litigation Committee and empowered it with full authority to investigate and evaluate the allegations and issues raised in the derivative litigation. The Special Litigation Committee filed a motion to stay the derivative litigation during its investigation. On December 3, 2019, the Chancery Court granted the motion and stayed the derivative litigation until June 1, 2020. On May 20, 2020, the Chancery Court granted an extension of the stay to October 1, 2020. The Special Litigation Committee’s investigation and evaluation remains ongoing. At this time, we are not able to predict the outcome of the Special Litigation Committee investigation or these claims. In March 2019, the Company received a document request from the United States Department of Justice (the “DOJ”) related to certain of the Company’s operations in Iraq and its dealings with Unaoil Limited and its affiliates. In December 2019, the Company received a similar document request from the Securities Exchange Commission (the "SEC"). The Company is cooperating with the DOJ and the SEC in connection with their requests and any related matters. In addition, the Company has agreed to toll any statute of limitations in connection with the matters subject to the DOJ’s document request. On August 13, 2019, Tri-State Joint Fund filed in the Delaware Court of Chancery, a shareholder class action lawsuit for and on the behalf of itself and all similarly situated public stockholders of Baker Hughes Incorporated (“BHI”) against the General Electric Company, the former members of the Board of Directors of BHI, and certain former BHI Officers alleging breaches of fiduciary duty, aiding and abetting, and other claims in connection with the Transactions. On October 28, 2019, City of Providence filed in the Delaware Court of Chancery a shareholder class action lawsuit for and on behalf of itself and all similarly situated public shareholders of BHI against GE, the former members of the Board of Directors of BHI, and certain former BHI Officers alleging substantially the same claims in connection with the Transactions. The relief sought in these complaints include a request for a declaration that Defendants breached their fiduciary duties, an award of damages, pre- and post-judgment interest, and attorneys’ fees and costs. The lawsuits have been consolidated, and plaintiffs filed a consolidated class action complaint on December 17, 2019 against certain former BHI officers alleging breaches of fiduciary duty and against GE for aiding and abetting those breaches. The December 2019 complaint omitted the former members of the Board of Directors of BHI, except for Mr. Craighead who also served as President and CEO of BHI. Mr. Craighead and Ms. Ross, who served as Senior Vice President and Chief Financial Officer of BHI, remain named in the December 2019 complaint along with GE. The relief sought in the consolidated complaint includes a declaration that the former BHI officers breached their fiduciary duties and that GE aided and abetted those breaches, an award of damages, pre- and post-judgment interest, and attorneys’ fees and costs. At this time, we are not able to predict the outcome of these claims. On December 11, 2019, BMC Software, Inc. (“BMC”) filed a lawsuit in federal court in the Southern District of Texas against Baker Hughes, a GE company, LLC alleging trademark infringement, unfair competition, and unjust enrichment, arising out of the Company’s use of its new logo and affiliated branding. On January 1, 2020, BMC amended its complaint to add Baker Hughes Company. The relief sought in the complaint includes a request for injunctive relief, an award of damages (including punitive damages), pre- and post-judgment interest, and attorneys’ fees and costs. At this time, we are not able to predict the outcome of these claims. The Company is reporting the following matter in compliance with SEC requirements to disclose environmental proceedings where the government is a party and that potentially involve monetary sanctions of $0.1 million or greater. In June 2020, Kern County California issued an administrative enforcement order with a proposed penalty of $0.7 million for alleged health, safety and environmental violations at a repackaging and distribution facility in Taft, California that is indirectly owned by the Company. We insure against risks arising from our business to the extent deemed prudent by our management and to the extent insurance is available, but no assurance can be given that the nature and amount of that insurance will be sufficient to fully indemnify us against liabilities arising out of pending or future legal proceedings or other claims. Most of our insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability, general liability and workers compensation. PRODUCT WARRANTIES We provide for estimated product warranty expenses when we sell the related products. Because warranty estimates are forecasts that are based on the best available information, primarily historical claims experience, claims costs may differ from amounts provided. An analysis of changes in the liability for product warranties are as follows:
OTHER In the normal course of business with customers, vendors and others, we have entered into off-balance sheet arrangements, such as surety bonds for performance, letters of credit and other bank issued guarantees. We also provide guarantees to GE Capital on behalf of some customers who have entered into financing arrangements with GE Capital. These off-balance sheet arrangements totaled approximately $4.1 billion at June 30, 2020. It is not practicable to estimate the fair value of these financial instruments. None of the off-balance sheet arrangements either has, or is likely to have, a material effect on our financial position, results of operations or cash flows. We sometimes enter into consortium or similar arrangements for certain projects primarily in our Oilfield Equipment segment. Under such arrangements, each party is responsible for performing a certain scope of work within the total scope of the contracted work, and the obligations expire when all contractual obligations are completed. The failure or inability, financially or otherwise, of any of the parties to perform their obligations could impose additional cost and obligations on us. These factors could result in unanticipated costs to complete the project, liquidated damages or contract disputes.
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Restructuring, Impairment and Other |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring, Impairment and Other | RESTRUCTURING, IMPAIRMENT AND OTHER During the first quarter of 2020, in response to the impact on our business from the COVID-19 pandemic and the significant decline in oil and gas prices, we approved a plan of $1.8 billion (the 2020 Plan) primarily associated with rationalizing certain product lines and restructuring our business, which is designed to, among other things, right-size our operations for anticipated activity levels and market conditions. As a result, we recorded restructuring, impairment and other charges of $103 million and $1,429 million for the three and six months ended June 30, 2020, respectively. Also included in the 2020 Plan are inventory impairments of $16 million and $176 million, respectively, for the three and six months ended June 30, 2020. See "Note 4. Inventories" for further discussion. Almost all of the remaining charges associated with the 2020 Plan are expected to be recorded by the end of 2020. These initiatives could generate additional charges in future periods as the 2020 Plan comes to completion. RESTRUCTURING AND IMPAIRMENT The following table presents restructuring and impairment charges by the impacted segment, however, these charges are not included in the reported segment results:
Restructuring and impairment charges were primarily related to employee termination expenses from reducing our headcount in certain geographical locations, and product line rationalization, including plant closures and related expenses such as property, plant & equipment impairments and contract termination fees. Details of these charges are as follows:
OTHER Other charges included in "Restructuring, impairment and other" of the condensed consolidated statements of income (loss) were $61 million and $5 million for the three months ended June 30, 2020 and 2019, respectively, and $951 million and $5 million for the six months ended June 30, 2020 and 2019, respectively. For the three months ended June 30, 2020, the charges primarily relate to corporate facility rationalization. For the six months ended June 30, 2020, such charges comprised of intangible asset impairments of $601 million driven by our decision to exit certain businesses primarily in our OFS segment, other long-lived asset impairments of $216 million ($124 million of intangible assets, $77 million of property, plant and equipment and $15 million of other assets) in our OFE segment, other charges of $73 million driven by certain litigation matters and impairment of an equity method investment primarily in corporate and the OFE segment, and charges of $61 million primarily related to corporate facility rationalization.
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Business Disposition |
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Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Business Disposition | BUSINESS DISPOSITIONOn June 30, 2020, we completed the sale of our Rod Lift Systems (RLS) business. RLS was part of our OFS segment and provided rod lift products, technologies, services and solutions to the oil and gas industry. The sale resulted in a loss before income taxes of $228 million and is reported in the "Other non-operating loss, net" caption of the condensed consolidated statements of income (loss). |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION 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 SEC for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated and combined financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 (2019 Annual Report). We hold a majority economic interest in BHH LLC and conduct and exercise full control over all activities of BHH LLC without the approval of any other member. Accordingly, we consolidate the financial results of BHH LLC and report a noncontrolling interest in our condensed consolidated financial statements for the economic interest held by GE. As of June 30, 2020, GE's interest in us was 36.5%. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary by management to fairly state our results of operations, financial position and cash flows of the Company and its subsidiaries for the periods presented and are not indicative of the results that may be expected for a full year. The Company's financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest). All intercompany accounts and transactions have been eliminated. In the Company's financial statements and notes, certain amounts have been reclassified to conform to the current year presentation. In the notes to unaudited condensed consolidated financial statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. Certain columns and rows in our financial statements and notes thereto may not add due to the use of rounded numbers. Separation related costs as reflected in our condensed consolidated statements of income (loss) include costs incurred in connection with the ongoing activities related to our separation from GE. See "Note 16. Related Party Transactions" for further information. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Please refer to "Note 1. Basis of Presentation and Summary of Significant Accounting Policies," to our consolidated financial statements from our 2019 Annual Report for the discussion of our significant accounting policies. Please refer to the "New Accounting Standards Adopted" section of this Note for changes to our accounting policies.
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Cash and Cash Equivalents | Cash and Cash Equivalents As of June 30, 2020 and December 31, 2019, we had $835 million and $1,102 million, respectively, of cash held in bank accounts that cannot be released, transferred or otherwise converted into a currency that is regularly transacted internationally, due to lack of market liquidity, capital controls or similar monetary or exchange limitations limiting the flow of capital out of the jurisdiction. These funds are available to fund operations and growth in these jurisdictions, and we do not currently anticipate a need to transfer these funds to the U.S. Included in these amounts are $89 million and $142 million, as of June 30, 2020 and December 31, 2019, respectively, held on behalf of GE. Cash and cash equivalents includes a total of $100 million and $162 million of cash at June 30, 2020 and December 31, 2019, respectively, held on behalf of GE, and a corresponding liability is reported in short-term borrowings.
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New Accounting Standards Adopted and To Be Adopted | NEW ACCOUNTING STANDARDS ADOPTED On January 1, 2020, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses. The ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models previously used under U.S. GAAP, which generally require that a loss be incurred before it is recognized. The new standard also applies to financial assets arising from revenue transactions such as contract assets and accounts receivables. The adoption did not have a material impact on our condensed consolidated financial statements. On January 1, 2020, we adopted FASB ASU 2017-04, Intangibles - Goodwill and Other - Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating the requirement to calculate the fair value of the individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the new ASU, when required to test goodwill for recoverability, an entity will perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying value and should recognize an impairment charge for the amount by which the carrying value exceeds the fair value of the reporting unit. We have applied this ASU on a prospective basis. See "Note 5. Goodwill and Other Intangible Assets" for further details. NEW ACCOUNTING STANDARDS TO BE ADOPTED All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.
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Fair Value Measurements | The most significant unobservable input used in the valuation of our Level 3 instruments is the discount rate. Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value of our investment securities. |
Revenue Related to Contracts with Customers (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregated revenue from contracts with customers by primary geographical markets | We disaggregate our revenue from contracts with customers by primary geographic markets.
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Current Receivables (Tables) |
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Current receivables | Current receivables are comprised of the following:
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Inventories (Tables) |
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Inventories, net of reserves | Inventories, net of reserves of $421 million and $429 million as of June 30, 2020 and December 31, 2019, respectively, are comprised of the following:
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Goodwill and Other Intangible Assets (Tables) |
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Schedule of goodwill | The changes in the carrying value of goodwill are detailed below by segment:
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Schedule of finite-lived intangible assets | Intangible assets are comprised of the following:
(1)During the three months ended June 30, 2020, there were no intangible asset impairments. During the six months ended June 30, 2020, we recorded intangible asset impairments to customer relationships of $476 million, technology of $8 million, trade names and trademarks of $236 million, and capitalized software of $3 million. See "Note 18. Restructuring, Impairment and Other" for further discussion.
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Schedule of indefinite-lived intangible assets | Intangible assets are comprised of the following:
(1)During the three months ended June 30, 2020, there were no intangible asset impairments. During the six months ended June 30, 2020, we recorded intangible asset impairments to customer relationships of $476 million, technology of $8 million, trade names and trademarks of $236 million, and capitalized software of $3 million. See "Note 18. Restructuring, Impairment and Other" for further discussion.
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Schedule of finite-lived intangible assets, future amortization expense | Estimated amortization expense for the remainder of 2020 and each of the subsequent five fiscal years is expected to be as follows:
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Contract and Other Deferred Assets (Tables) |
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Deferred Revenue Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract assets | Contract assets are comprised of the following:
(1)Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment and certain other service agreements. Contract liabilities are comprised of the following:
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Progress Collections and Deferred Income (Tables) |
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Contract liabilities | Contract assets are comprised of the following:
(1)Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment and certain other service agreements. Contract liabilities are comprised of the following:
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Leases (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of operating lease expense | Our leasing activities primarily consist of operating leases for administrative offices, manufacturing facilities, research centers, service centers, sales offices and certain equipment.
(1)Leases with a term of one year or less, including leases with a term of one month or less
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Borrowings (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term and long-term borrowings | Short-term and long-term borrowings are comprised of the following:
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Employee Benefit Plans (Tables) |
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Schedule of net periodic cost | The components of net periodic cost of plans sponsored by us are as follows:
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Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in number of shares outstanding | The following table presents the changes in the number of shares outstanding (in thousands):
(1) Share amounts reflected above are net of shares withheld to satisfy the employee's tax withholding obligation.
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Schedule of accumulated other comprehensive loss | The following tables present the changes in accumulated other comprehensive loss, net of tax:
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Schedule of noncontrolling interest | As of June 30, 2020 and December 31, 2019, GE owned approximately 36.5% and 36.7%, respectively, of BHH LLC and this represents the majority of the noncontrolling interest balance reported within equity.
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and diluted net income (loss) per share | Basic and diluted net income (loss) per share of Class A common stock is presented below:
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Financial Instruments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis | Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities.
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Reconciliation of recurring Level 3 fair value measurements | The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities:
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Schedule of investment securities classified as available for sale |
(1)All of our investment securities are classified as available for sale instruments. Non-U.S. debt securities mature within two years. (2)Gains (losses) recorded to earnings related to these securities were nil and $(9) million for the three months ended June 30, 2020 and 2019, respectively, and $(13) million and $1 million for the six months ended June 30, 2020 and 2019, respectively.
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Schedule of derivatives | The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives.
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Schedule of hedging instrument, currency exchange contract | The table below summarizes our hedging instrument activity for currency exchange contracts.
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Schedule of gains (losses) from derivatives not designated as hedges | The following table summarizes the gains (losses) from derivatives not designated as hedges in the condensed consolidated statements of income (loss).
(1)Excludes losses of $2 million and gains of $2 million on embedded derivatives for the three months ended June 30, 2020 and 2019, respectively, and gains of $5 million and nil during the six months ended June 30, 2020 and 2019, 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 the change in fair value of the economically hedged items in the current and future periods.
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Segment Information (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized financial information | Summarized financial information is shown in the following tables. Consistent accounting policies have been applied by all segments within the Company, for all reporting periods.
The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes before the following: net interest expense, net other non-operating loss, corporate expenses, restructuring, impairment and other charges, inventory impairments, separation related costs, goodwill impairments and certain gains and losses not allocated to the operating segments.
(1)Charges for inventory impairments are predominantly reported in the "Cost of goods sold" caption of the condensed consolidated statements of income (loss). The following table presents total assets by segment:
(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.
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Commitments and Contingencies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of product warranties | An analysis of changes in the liability for product warranties are as follows:
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Restructuring, Impairment and Other (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment and restructuring charges | The following table presents restructuring and impairment charges by the impacted segment, however, these charges are not included in the reported segment results:
Restructuring and impairment charges were primarily related to employee termination expenses from reducing our headcount in certain geographical locations, and product line rationalization, including plant closures and related expenses such as property, plant & equipment impairments and contract termination fees. Details of these charges are as follows:
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Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | |||
---|---|---|---|---|
Sep. 16, 2019 |
Sep. 15, 2019 |
Jun. 30, 2020 |
Dec. 31, 2019 |
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Business Acquisition [Line Items] | ||||
Restricted cash and cash equivalents held in bank accounts | $ 835 | $ 1,102 | ||
General Electric Company | ||||
Business Acquisition [Line Items] | ||||
Restricted cash and cash equivalents held in bank accounts | 89 | 142 | ||
Related party amount, due to related party | GE | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents held on behalf of GE | $ 100 | $ 162 | ||
BHH LLC | ||||
Business Acquisition [Line Items] | ||||
Approximate interest | 63.50% | |||
Baker Hughes | General Electric Company | ||||
Business Acquisition [Line Items] | ||||
Approximate interest | 36.80% | 50.30% | ||
Ownership percentage by noncontrolling owners | 36.50% | 36.70% |
Revenue Related to Contracts with Customers - Disaggregated Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 4,736 | $ 5,994 | $ 10,160 | $ 11,608 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 983 | 1,616 | 2,298 | 3,121 |
Non-U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 3,753 | $ 4,378 | $ 7,862 | $ 8,487 |
Current Receivables (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables | $ 5,977 | $ 6,739 |
Less: Allowance for credit losses | (341) | (323) |
Total current receivables, net | 5,636 | 6,416 |
Customer receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables | 4,598 | 5,448 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables | 858 | 796 |
GE | Related parties | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables | $ 521 | $ 495 |
Inventories (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
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Inventory, Net [Abstract] | ||||
Inventory valuation reserves | $ 421 | $ 421 | $ 429 | |
Finished goods | 2,509 | 2,509 | 2,546 | |
Work in process and raw materials | 2,107 | 2,107 | 2,062 | |
Total inventories, net | 4,616 | 4,616 | $ 4,608 | |
Inventory impairment | $ 16 | $ 176 | $ 0 |
Goodwill and Other Intangible Assets - Narrative (Details) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
segment
|
Jun. 30, 2019
USD ($)
|
Mar. 23, 2020
$ / shares
|
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Number of reportable segments | segment | 4 | ||||
Number of reportable units | segment | 4 | ||||
Share price (in dollars per share) | $ / shares | $ 9.33 | ||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment | $ 0 | $ 0 | $ 14,773 | $ 0 | |
Amortization expense for intangible assets included in net income | $ 72 | $ 97 | $ 156 | $ 193 | |
Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful lives | 1 year | ||||
Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful lives | 30 years | ||||
Oilfield Services | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment | $ 11,484 | ||||
Oilfield Equipment | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment | $ 3,289 |
Goodwill and Other Intangible Assets - Schedule of Future Estimated Amortization Expense (Details) $ in Millions |
Jun. 30, 2020
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2020 | $ 143 |
2021 | 237 |
2022 | 197 |
2023 | 183 |
2024 | 167 |
2025 | $ 134 |
Contract and Other Deferred Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Contract assets (revenue in excess of billings) | $ 1,708 | $ 1,708 | $ 1,700 | ||
Deferred inventory costs | 125 | 125 | 130 | ||
Non-recurring engineering costs | 42 | 42 | 51 | ||
Contract and other deferred assets | 1,875 | 1,875 | 1,881 | ||
Revenue recognized from performance obligations satisfied in previous periods | 24 | $ 14 | 30 | $ 21 | |
Long-term product service agreements | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Contract assets (revenue in excess of billings) | 638 | 638 | 603 | ||
Long-term equipment contracts | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Contract assets (revenue in excess of billings) | $ 1,070 | $ 1,070 | $ 1,097 |
Progress Collections and Deferred Income (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Disaggregation of Revenue [Line Items] | |||||
Progress collections and deferred income (contract liabilities) | $ 3,507 | $ 3,507 | $ 2,870 | ||
Revenue recognized, included in contract liability | 403 | $ 295 | 813 | $ 848 | |
Progress collections | |||||
Disaggregation of Revenue [Line Items] | |||||
Progress collections and deferred income (contract liabilities) | 3,382 | 3,382 | 2,760 | ||
Deferred income | |||||
Disaggregation of Revenue [Line Items] | |||||
Progress collections and deferred income (contract liabilities) | $ 125 | $ 125 | $ 110 |
Leases - Operating Lease Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Operating Lease Expense | ||||
Long-term fixed lease | $ 70 | $ 60 | $ 142 | $ 108 |
Long-term variable lease | 9 | 13 | 20 | 24 |
Short-term lease | 119 | 177 | 280 | 342 |
Total operating lease expense | $ 198 | $ 250 | $ 442 | $ 474 |
Leases - Narrative (Details) |
Jun. 30, 2020 |
Jun. 30, 2019 |
---|---|---|
Leases [Abstract] | ||
Operating lease, weighted-average remaining lease term | 8 years | 9 years |
Operating lease, weighted-average discount rate | 3.80% | 4.40% |
Borrowings - Narrative (Details) - USD ($) |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2020 |
May 01, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
|
Line of Credit Facility [Line Items] | ||||
Estimated fair value of debt | $ 8,171,000,000 | $ 6,847,000,000 | ||
Commercial paper | ||||
Line of Credit Facility [Line Items] | ||||
Debt term | 397 days | |||
Maximum borrowing capacity | $ 3,800,000,000 | $ 3,000,000,000 | ||
Senior Notes | 4.486% Senior Notes due May 2030 | ||||
Line of Credit Facility [Line Items] | ||||
Stated interest rate | 4.486% | |||
Long-term borrowings | $ 496,000,000 | $ 0 | ||
BHH LLC | Senior Notes | 4.486% Senior Notes due May 2030 | ||||
Line of Credit Facility [Line Items] | ||||
Principal amount | $ 500,000,000 | |||
Stated interest rate | 4.486% | |||
Issuance costs | $ 4,000,000 | |||
BHH LLC | Baker Hughes Co-Obligor, Inc. | ||||
Line of Credit Facility [Line Items] | ||||
Ownership percentage | 100.00% | |||
BHH LLC | Baker Hughes Co-Obligor, Inc. | Senior Notes | ||||
Line of Credit Facility [Line Items] | ||||
Long-term borrowings | $ 6,656,000,000 |
Employee Benefit Plans - Narrative (Details) - Pension Benefits |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
plan
| |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Pension assets or obligations, threshold, per plan | $ | $ 20,000,000 |
U.S. | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Number of plans | 4 |
Non-U.S. Pension Benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Number of plans | 7 |
Employee Benefit Plans - Net Period Cost (Details) - Pension Benefits - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Components of net periodic benefit cost [Abstract] | ||||
Service cost | $ 7 | $ 6 | $ 14 | $ 10 |
Interest cost | 20 | 22 | 40 | 41 |
Expected return on plan assets | (31) | (30) | (62) | (55) |
Amortization of net actuarial loss | 8 | 5 | 16 | 9 |
Curtailment loss | 0 | 7 | 0 | 7 |
Net periodic cost | $ 4 | $ 10 | $ 8 | $ 12 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ (21) | $ 95 | $ (16) | $ 162 |
Anticipated cash refund for loss carryback | $ 75 |
Equity - Narrative (Details) - $ / shares |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Class of Stock [Line Items] | ||
Preferred stock authorized (in shares) | 50,000,000 | |
Common stock par value (in dollars per share) | $ 0.0001 | |
General Electric Company | Baker Hughes | ||
Class of Stock [Line Items] | ||
Ownership percentage by noncontrolling owners | 36.50% | 36.70% |
Common Class A | ||
Class of Stock [Line Items] | ||
Common stock authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock outstanding (in shares) | 655,000,000 | 650,000,000 |
Common Class B | ||
Class of Stock [Line Items] | ||
Common stock authorized (in shares) | 1,250,000,000 | 1,250,000,000 |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock outstanding (in shares) | 377,000,000 | 377,000,000 |
Equity - Non-controlling Interest (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Noncontrolling Interest [Line Items] | ||
Total noncontrolling interests | $ 6,311 | $ 12,570 |
Other noncontrolling interests | ||
Noncontrolling Interest [Line Items] | ||
Total noncontrolling interests | 6,185 | 12,454 |
Other noncontrolling interests | ||
Noncontrolling Interest [Line Items] | ||
Total noncontrolling interests | $ 126 | $ 116 |
Earnings Per Share - Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Earnings Per Share | ||||
Net income (loss) | $ (355) | $ (11) | $ (16,453) | $ 60 |
Less: Net income (loss) attributable to noncontrolling interests | (154) | (2) | (6,042) | 37 |
Net income (loss) attributable to Baker Hughes Company | $ (201) | $ (9) | $ (10,411) | $ 23 |
Common Class A | ||||
Weighted average shares outstanding: | ||||
Class A basic (in shares) | 655 | 515 | 654 | 515 |
Class A diluted (in shares) | 655 | 515 | 654 | 516 |
Net income (loss) per share attributable to common stockholders: | ||||
Basic and diluted earnings (loss) per Class A common stock (in dollars per share) | $ (0.31) | $ (0.02) | $ (15.92) | $ 0.04 |
Earnings Per Share - Narrative (Details) - Common Class A shares in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019
shares
|
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Conversion ratio | 1 | |
Employee stock option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from diluted EPS calculation (in options) | 6 |
Financial Instruments - Recurring Fair Value Measurements (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets | ||
Investment securities | $ 141 | $ 283 |
Total assets | 69 | 58 |
Liabilities | ||
Total liabilities | (42) | (27) |
Fair value, measurements, recurring | ||
Assets | ||
Derivatives | 69 | 58 |
Investment securities | 141 | 283 |
Total assets | 210 | 341 |
Liabilities | ||
Derivatives | (43) | (27) |
Total liabilities | (43) | (27) |
Fair value, measurements, recurring | Level 1 | ||
Assets | ||
Derivatives | 0 | 0 |
Investment securities | 2 | 24 |
Total assets | 2 | 24 |
Liabilities | ||
Derivatives | 0 | 0 |
Total liabilities | 0 | 0 |
Fair value, measurements, recurring | Level 2 | ||
Assets | ||
Derivatives | 69 | 58 |
Investment securities | 0 | 0 |
Total assets | 69 | 58 |
Liabilities | ||
Derivatives | (43) | (27) |
Total liabilities | (43) | (27) |
Fair value, measurements, recurring | Level 3 | ||
Assets | ||
Derivatives | 0 | 0 |
Investment securities | 139 | 259 |
Total assets | 139 | 259 |
Liabilities | ||
Derivatives | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
Financial Instruments - Reconciliation of Recurring Level 3 Fair Value Measurements (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 259 | $ 288 |
Purchases | 0 | 7 |
Proceeds at maturity | (118) | (31) |
Unrealized gains (losses) recognized in accumulated other comprehensive income (loss) | (2) | 1 |
Ending balance | $ 139 | $ 265 |
Financial Instruments - Investment Securities (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Debt Securities, Available-for-sale [Line Items] | |||||
Investment securities, gross unrealized gains | $ 0 | $ 0 | $ 2 | ||
Investment securities, gross unrealized losses | 0 | 0 | 0 | ||
Equity securities, amortized cost | 2 | 2 | 24 | ||
Equity securities, estimated fair value | 2 | 2 | 24 | ||
Total, amortized cost | 141 | 141 | 281 | ||
Investment securities | 141 | 141 | 283 | ||
Net unrealized gain (loss) | 0 | $ (9) | (13) | $ 1 | |
Non-U.S. debt securities | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Investment securities, amortized cost | 139 | 139 | 257 | ||
Investment securities, gross unrealized gains | 0 | 0 | 2 | ||
Investment securities, gross unrealized losses | 0 | 0 | 0 | ||
Investment securities | $ 139 | $ 139 | $ 259 | ||
Derivative, term | 2 years |
Financial Instruments - Derivatives and Hedging (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Assets | $ 69 | $ 58 |
(Liabilities) | (42) | (27) |
Currency exchange contracts | Derivatives accounted for as hedges | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 1 | 11 |
(Liabilities) | 0 | 0 |
Currency exchange contracts | Derivatives not accounted for as hedges | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 68 | 47 |
(Liabilities) | $ (42) | $ (27) |
Financial Instruments - Cash Flow Hedges (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in AOCI | $ 0 | $ (3) | $ (8) | $ 1 |
Cash flow hedging | Currency exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in AOCI | 0 | (4) | (9) | 1 |
Gain (loss) reclassified from AOCI to earnings | $ 0 | $ 0 | $ 0 | $ 0 |
Segment Information - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2020
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 4 |
Related Party Transactions (Details) $ in Millions |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 16, 2019
person
|
Sep. 15, 2019 |
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
joint_venture
|
|
Related Party Transaction [Line Items] | |||||||
Number of joint Ventures | joint_venture | 3 | ||||||
Investment securities held on behalf of GE | $ 141 | $ 141 | $ 283 | ||||
Total current receivables, gross | 5,977 | 5,977 | 6,739 | ||||
Accounts Payable, GE and its affiliates | |||||||
Related Party Transaction [Line Items] | |||||||
Accounts payable, related party | 357 | 357 | 536 | ||||
JV aero-derivative gas turbine products and services | Joint venture, GE aero-derivative gas turbine products and services | |||||||
Related Party Transaction [Line Items] | |||||||
Voting power threshold | 20.00% | ||||||
Board of directors nomination, upon triggering event | person | 1 | ||||||
GE | Related parties | |||||||
Related Party Transaction [Line Items] | |||||||
Total current receivables, gross | 521 | 521 | 495 | ||||
GE | Related party amount, due to related party | |||||||
Related Party Transaction [Line Items] | |||||||
Assets held on behalf of GE | 129 | 129 | 273 | ||||
Cash and cash equivalents held on behalf of GE | 100 | 100 | 162 | ||||
Investment securities held on behalf of GE | 29 | 29 | $ 111 | ||||
GE | Sales of products and services, GE and its affiliates | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | 49 | $ 108 | 105 | $ 189 | |||
GE | Purchases, GE and its affiliates | |||||||
Related Party Transaction [Line Items] | |||||||
Related party purchases | $ 346 | $ 428 | $ 609 | $ 879 | |||
General Electric Company | Baker Hughes | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 36.50% | 36.50% | 36.70% | ||||
Approximate interest | 36.80% | 50.30% |
Commitments and Contingencies - Narrative (Details) € in Millions, $ in Millions |
1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
May 29, 2020
USD ($)
|
Mar. 03, 2020
USD ($)
|
Mar. 15, 2019
USD ($)
|
Mar. 11, 2019
EUR (€)
|
Aug. 03, 2016
EUR (€)
|
Jun. 30, 2020
USD ($)
|
Jan. 31, 2013 |
Jun. 30, 2020
EUR (€)
subsidiary
company
|
Mar. 18, 2019
USD ($)
|
|
Loss Contingencies [Line Items] | |||||||||
Off-balance sheet arrangements | $ 4,100.0 | ||||||||
Administrative enforcement order | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of alleged damages sought | $ 0.7 | ||||||||
Pending litigation | Equipment failure | Natural Gas Storage System in Northern Germany | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of alleged damages sought | € | € 142 | € 202 | |||||||
Marginal rate on annual prime rate (percent) | 5.00% | 5.00% | |||||||
Pending litigation | Damage from fire | INOES and Naphtachimie | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of alleged damages sought | € | € 250 | ||||||||
Plant shutdown days | 15 days | ||||||||
Subsidiaries participating | subsidiary | 2 | ||||||||
Other companies participating | company | 17 | ||||||||
Pending litigation | Breach of contract | International Engineering & Construction S.A. (IEC) | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of alleged damages sought | $ 591.0 | ||||||||
Pending litigation | Loss of cash flow | International Engineering & Construction S.A. (IEC) | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of alleged damages sought | $ 700.0 | ||||||||
Pending litigation | Lost profits and various costs | International Engineering & Construction S.A. (IEC) | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of alleged damages sought | $ 235.0 | 244.9 | |||||||
Pending litigation | Liquidated damages | International Engineering & Construction S.A. (IEC) | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of alleged damages sought | 4.8 | ||||||||
Pending litigation | Take-or-pay future obligations | International Engineering & Construction S.A. (IEC) | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of alleged damages sought | $ 58.6 | ||||||||
Pending litigation | Legal fees | International Engineering & Construction S.A. (IEC) | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of alleged damages sought | $ 14.2 | ||||||||
Pending litigation | Breach of fiduciary duties | Shareholder derivative lawsuits | |||||||||
Loss Contingencies [Line Items] | |||||||||
Repurchase of stock from GE | $ 1,500.0 | ||||||||
GE sale of stock | $ 2,500.0 |
Commitments and Contingencies - Schedule of Product Warranties (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at January 1 | $ 220 | $ 236 |
Provisions | 2 | 5 |
Expenditures | (6) | (10) |
Other | (2) | (7) |
Balance at June 30 | $ 214 | $ 224 |
Restructuring, Impairment and Other - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Restructuring and Related Activities [Abstract] | ||||
Approved a restructuring plan | $ 1,800,000,000 | $ 1,800,000,000 | ||
Restructuring, impairment and other | 103,000,000 | $ 50,000,000 | 1,429,000,000 | $ 112,000,000 |
Inventory impairment | 16,000,000 | 176,000,000 | 0 | |
Other charges | 61,000,000 | $ 5,000,000 | 951,000,000 | 5,000,000 |
Restructuring Cost and Reserve [Line Items] | ||||
Intangible assets impairment | $ 0 | 725,000,000 | 0 | |
Property, plant and equipment impairment | 226,000,000 | $ 0 | ||
Litigation and impairment of equity method investment | 73,000,000 | |||
Corporate facility rationalization | 61,000,000 | |||
Oilfield Services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Intangible assets impairment | 601,000,000 | |||
Oilfield Equipment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Intangible assets impairment | 124,000,000 | |||
Other long-lived asset impairments | 216,000,000 | |||
Property, plant and equipment impairment | 77,000,000 | |||
Other assets | $ 15,000,000 |
Restructuring, Impairment and Other - Schedule of Restructuring Charges (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | $ 43 | $ 45 | $ 478 | $ 107 |
Impairments of property, plant & equipment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 8 | 7 | 149 | 16 |
Employee-related termination expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 26 | 34 | 298 | 78 |
Contract termination fees | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 1 | 2 | 22 | 9 |
Other incremental costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 8 | 2 | 9 | 4 |
Operating segments | Oilfield Services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 14 | 19 | 310 | 36 |
Operating segments | Oilfield Equipment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 1 | 0 | 99 | 18 |
Operating segments | Turbo- machinery & Process Solutions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 12 | 10 | 20 | 29 |
Operating segments | Digital Solutions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 10 | 9 | 34 | 12 |
Corporate | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | $ 6 | $ 7 | $ 15 | $ 12 |
Business Disposition (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Loss on sale of business | $ (228) | $ 0 |
RLS | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Loss on sale of business | $ (228) |
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