Baker Hughes Company Announces Fourth Quarter and Total Year 2019 Results
- Orders of
$6.9 billion for the quarter, down 11% sequentially and up 1% year-over-year - Revenue of
$6.3 billion for the quarter, up 8% sequentially and up 1% year-over-year - GAAP operating income of
$331 million for the quarter, up 11% sequentially and down 13% year-over-year - Adjusted operating income (a non-GAAP measure) of
$546 million for the quarter, up 30% sequentially and up 10% year-over-year - GAAP diluted earnings per share of
$0.07 for the quarter which included$0.20 per share of adjusting items. Adjusted diluted earnings per share (a non-GAAP measure) were$0.27 . - Cash flows generated from operating activities were
$1,357 million for the quarter. Free cash flow (a non-GAAP measure) for the quarter was$1,053 million .
The Company presents its financial results in accordance with GAAP. However, management believes that using additional non-GAAP measures will enhance the evaluation of the profitability of the Company and its ongoing operations. Please see Tables 1a, 1b and 1c in the section entitled "Charges & Credits" for a reconciliation of GAAP to non-GAAP financial measures. Certain columns and rows in our tables and financial statements may not sum up due to the use of rounded numbers.
|
|
Three Months Ended |
|
Variance |
|||||||||
|
(in millions except per share amounts) |
December 31, |
September 30, |
December 31, |
|
Sequential |
Year-over- |
||||||
|
Orders |
$ |
6,944 |
|
$ |
7,783 |
|
$ |
6,884 |
|
|
(11)% |
1% |
|
Revenue |
|
6,347 |
|
5,882 |
|
|
6,264 |
|
|
8% |
1% |
|
|
Operating income |
|
331 |
|
|
297 |
|
|
382 |
|
|
11% |
(13)% |
|
Adjusted operating income (non-GAAP) |
|
546 |
|
|
422 |
|
|
498 |
|
|
30% |
10% |
|
Net income attributable to Baker Hughes |
|
48 |
|
|
57 |
|
|
131 |
|
|
(15)% |
(63)% |
|
Adjusted net income (non-GAAP) attributable to Baker Hughes |
|
179 |
|
|
114 |
|
|
120 |
|
|
57% |
49% |
|
EPS attributable to Class A shareholders |
|
0.07 |
|
|
0.11 |
|
|
0.28 |
|
|
(30)% |
(74)% |
|
Adjusted EPS (non-GAAP) attributable to Class A shareholders |
|
0.27 |
|
|
0.21 |
|
|
0.26 |
|
|
30% |
6% |
|
Cash flow from operating activities |
|
1,357 |
|
|
360 |
|
|
1,090 |
|
|
F |
25% |
|
Free cash flow (non-GAAP) |
|
1,053 |
|
|
161 |
|
|
876 |
|
|
F |
20% |
|
"F" is used in most instances when variance is above 100%. Additionally, "U" is used in most instances when variance is below (100)%. |
“We closed out a strong year of performance with solid results in the fourth quarter, delivering strong cash flow, strong orders in Turbomachinery & Process Solutions (TPS) and Oilfield Equipment (OFE), and better execution in Digital Solutions (DS). For the full year 2019, we achieved a number of key milestones, including 20% year-over-year order growth in TPS, almost 300 basis points of margin improvement in TPS, 12% order growth in OFE, and free cash flow of
“As we look ahead to 2020, we see a macro environment that is slowly improving, as well as a range of opportunities to further strengthen
“Overall, I am pleased with our fourth quarter results which closed out a solid 2019. As we look forward to 2020, we are clearly focused on executing our strategy and generating strong free cash flow, improving margins, and driving returns,” concluded Simonelli.
Quarter Highlights
Winning with Customers
Baker Hughes’ Oilfield Services (OFS) segment was awarded its largest-ever downstream chemicals contract in the quarter, becoming Valero’s largest hydrocarbon treatment provider with a term of five years. The award expands the company’s existing scope to include all 15 of Valero’s refineries globally. The companies’ longstanding relationship, and Baker Hughes’ consistent service delivery and leading chemical capabilities were key drivers of this important award.
Also in the quarter, OFS continued to gain traction in its artificial lift product line. The company was awarded the majority scope for a major electrical submersible pump (ESP) tender with Saudi Aramco. This includes three long-term contracts to support all major projects in the country across onshore and offshore as well as sweet and harsh environments. Baker Hughes’ strong service delivery and track record with the customer were integral to this win.
The OFE segment saw strong growth across its flexible pipe systems product line, with multiple awards from Petrobras in
Baker Hughes’ OFE segment continued to gain traction in the quarter with its Subsea Connect approach. The teams secured a number of subsea production wins in key markets, including offshore
Baker Hughes’ TPS segment was awarded a contract to supply turbomachinery equipment for
TPS continued the momentum in its on-and-offshore segment in the quarter, securing an important technology award for a floating, storage, production, and offloading vessel (FPSO) offshore
In the quarter, TPS’ NovaLT12 turbine reached an important milestone, starting operations at Lucart’s cogeneration plant in their paper mill in Diecimo,
In DS, the Bently Nevada product line was awarded the first order for its Orbit 60 Series condition monitoring and protection system by a major North American utility provider. The order comes shortly after the system’s commercial launch in late 2019, demonstrating a strong commercial interest in the system’s features and capabilities. Bently Nevada is the gold standard of condition monitoring for critical assets, with more than 100,000 systems installed globally. Orbit 60 is DS's next generation flagship system, raising the bar for digital transformation in the energy sector. With multiple test sites in operation today, Orbit 60 has enhanced cyber security features with greater flexibility and versatility than other available systems.
DS was also awarded four orders for its Flare.IQ emissions reduction technology for multiple downstream projects across
Technology and Innovation
In the fourth quarter,
Baker Hughes’ DS segment continued to strengthen its capabilities, announcing technology partnerships with leading cyber security providers. This includes a collaboration with
Baker Hughes’ OFS segment continued enhancing its chemicals capabilities in the
Leading the Energy Transition
During the quarter,
Consolidated Results by Reporting Segment
Consolidated Orders by Reporting Segment
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Consolidated segment orders |
December 31, |
September 30, |
December 31, |
|
Sequential |
Year-over- |
||||||||
|
Oilfield Services |
$ |
3,284 |
|
$ |
3,354 |
|
$ |
3,051 |
|
|
(2 |
)% |
8 |
% |
|
Oilfield Equipment |
1,104 |
|
1,029 |
|
1,041 |
|
|
7 |
% |
6 |
% |
|||
|
Turbomachinery & Process Solutions |
1,910 |
|
2,784 |
|
2,123 |
|
|
(31 |
)% |
(10 |
)% |
|||
|
Digital Solutions |
645 |
|
616 |
|
668 |
|
|
5 |
% |
(4 |
)% |
|||
|
Total |
$ |
6,944 |
|
$ |
7,783 |
|
$ |
6,884 |
|
|
(11 |
)% |
1 |
% |
Orders for the quarter were
Year-over-year, the orders growth was driven by Oilfield Equipment and Oilfield Services, partially offset by a decline in Turbomachinery & Process Solutions and Digital Solutions orders. Year-over-year equipment orders were up 1% and service orders were up 1%.
The Company's total book-to-bill ratio in the quarter was 1.1; the equipment book-to-bill ratio in the quarter was 1.2.
Remaining Performance Obligations (RPO) in the fourth quarter ended at
Consolidated Revenue by Reporting Segment
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Consolidated segment revenue |
December 31, |
September 30, |
December 31, |
|
Sequential |
Year-over- |
||||||||
|
Oilfield Services |
$ |
3,292 |
|
$ |
3,348 |
|
$ |
3,062 |
|
|
(2 |
)% |
7 |
% |
|
Oilfield Equipment |
765 |
|
728 |
|
729 |
|
|
5 |
% |
5 |
% |
|||
|
Turbomachinery & Process Solutions |
1,632 |
|
1,197 |
|
1,782 |
|
|
36 |
% |
(8 |
)% |
|||
|
Digital Solutions |
659 |
|
609 |
|
691 |
|
|
8 |
% |
(5 |
)% |
|||
|
Total |
$ |
6,347 |
|
$ |
5,882 |
|
$ |
6,264 |
|
|
8 |
% |
1 |
% |
Revenue for the quarter was
Compared to the same quarter last year, revenue was up 1%. Oilfield Services was up 7%, Oilfield Equipment was up 5% partially offset by Turbomachinery & Process Solutions down 8% and Digital Solutions down 5%.
Consolidated Operating Income by Reporting Segment
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Segment operating income |
December 31, |
September |
December 31, |
|
Sequential |
Year-over- |
||||||||
|
Oilfield Services |
$ |
235 |
|
$ |
274 |
|
$ |
224 |
|
|
(14 |
)% |
5 |
% |
|
Oilfield Equipment |
16 |
|
14 |
|
12 |
|
|
14 |
% |
28 |
% |
|||
|
Turbomachinery & Process Solutions |
305 |
|
161 |
|
257 |
|
|
89 |
% |
19 |
% |
|||
|
Digital Solutions |
109 |
|
82 |
|
115 |
|
|
32 |
% |
(5 |
)% |
|||
|
Total segment operating income |
665 |
|
531 |
|
609 |
|
|
25 |
% |
9 |
% |
|||
|
Corporate |
(118 |
) |
(109 |
) |
(110 |
) |
|
(8 |
)% |
(7 |
)% |
|||
|
Inventory impairment |
— |
|
— |
|
(16 |
) |
|
— |
% |
100 |
% |
|||
|
Restructuring, impairment & other charges |
(159 |
) |
(71 |
) |
(59 |
) |
|
U |
|
U |
||||
|
Separation and merger related |
(57 |
) |
(54 |
) |
(41 |
) |
|
(5 |
)% |
(38 |
)% |
|||
|
Operating income |
331 |
|
297 |
|
382 |
|
|
11 |
% |
(13 |
)% |
|||
|
Adjusted operating income* |
$ |
546 |
|
$ |
422 |
|
$ |
498 |
|
|
30 |
% |
10 |
% |
|
*Non-GAAP measure. |
|
"F" is used in most instances when variance is above 100%. Additionally, "U" is used in most instances when variance is below (100)%. |
On a GAAP basis, operating income for the fourth quarter of 2019 was
Adjusted operating income (a non-GAAP measure) for the fourth quarter of 2019 was
Depreciation and amortization for the fourth quarter of 2019 was
Corporate costs were
Other Financial Items
Income tax expense in the fourth quarter of 2019 was
GAAP diluted earnings per share were
Cash flows generated from operating activities were
Capital expenditures, net of proceeds from disposal of assets, were
Results by Reporting Segment
The following segment discussions and variance explanations are intended to reflect management's view of the relevant comparisons of financial results on a sequential or year-over-year basis, depending on the business dynamics of the reporting segments.
Oilfield Services
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Oilfield Services |
December 31, |
September 30, |
December 31, |
|
Sequential |
Year-over- |
||||||||
|
Revenue |
$ |
3,292 |
|
$ |
3,348 |
|
$ |
3,062 |
|
|
(2 |
)% |
7 |
% |
|
Operating income |
$ |
235 |
|
$ |
274 |
|
$ |
224 |
|
|
(14 |
)% |
5 |
% |
|
Operating income margin |
7.1 |
% |
8.2 |
% |
7.3 |
% |
|
(1.1) |
pts |
(0.2) |
pts |
|||
Oilfield Services (OFS) revenue of
Segment operating income before tax for the quarter was
Oilfield Equipment
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Oilfield Equipment |
December 31, |
September 30, |
December 31, |
|
Sequential |
Year-over- |
||||||||
|
Orders |
$ |
1,104 |
|
$ |
1,029 |
|
$ |
1,041 |
|
|
7 |
% |
6 |
% |
|
Revenue |
$ |
765 |
|
$ |
728 |
|
$ |
729 |
|
|
5 |
% |
5 |
% |
|
Operating income |
$ |
16 |
|
$ |
14 |
|
$ |
12 |
|
|
14 |
% |
28 |
% |
|
Operating income margin |
2.1 |
% |
1.9 |
% |
1.7 |
% |
|
0.2 |
pts |
0.4 |
pts |
|||
Oilfield Equipment (OFE) orders were up
OFE revenue of
Segment operating income before tax for the quarter was
Turbomachinery & Process Solutions
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Turbomachinery & Process Solutions |
December 31, |
September 30, |
December 31, |
|
Sequential |
Year-over- |
||||||||
|
Orders |
$ |
1,910 |
|
$ |
2,784 |
|
$ |
2,123 |
|
|
(31 |
)% |
(10 |
)% |
|
Revenue |
$ |
1,632 |
|
$ |
1,197 |
|
$ |
1,782 |
|
|
36 |
% |
(8 |
)% |
|
Operating income |
$ |
305 |
|
$ |
161 |
|
$ |
257 |
|
|
89 |
% |
19 |
% |
|
Operating income margin |
18.7 |
% |
13.5 |
% |
14.4 |
% |
|
5.2 |
pts |
4.3 |
pts |
|||
Turbomachinery & Process Solutions (TPS) orders were down 10% year-over-year. Equipment orders were down 16% and service orders were down 4%.
TPS revenue of
Segment operating income before tax for the quarter was
Digital Solutions
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Digital Solutions |
December 31, |
September 30, |
December 31, |
|
Sequential |
Year-over- |
||||||||
|
Orders |
$ |
645 |
|
$ |
616 |
|
$ |
668 |
|
|
5 |
% |
(4 |
)% |
|
Revenue |
$ |
659 |
|
$ |
609 |
|
$ |
691 |
|
|
8 |
% |
(5 |
)% |
|
Operating income |
$ |
109 |
|
$ |
82 |
|
$ |
115 |
|
|
32 |
% |
(5 |
)% |
|
Operating income margin |
16.6 |
% |
13.5 |
% |
16.7 |
% |
|
3.0 |
pts |
(0.1) |
pts |
|||
Digital Solutions (DS) orders were down 4% year-over-year, driven primarily by lower order intake in the Measurement & Sensing and Pipeline & Process Solutions businesses.
DS revenue of
Segment operating income before tax for the quarter was
|
2019 Total Year Results |
|||||||||
|
|
Twelve Months Ended |
|
|||||||
|
Orders |
December 31, 2019 |
December 31, 2018 |
Variance |
||||||
|
Oilfield Services |
$ |
12,902 |
|
$ |
11,569 |
|
12% |
||
|
Oilfield Equipment |
3,517 |
|
3,129 |
|
12% |
||||
|
Turbomachinery and Process Solutions |
7,947 |
|
6,624 |
|
20% |
||||
|
Digital Solutions |
2,607 |
|
2,583 |
|
1% |
||||
|
Total Orders |
$ |
26,973 |
|
$ |
23,904 |
|
13% |
||
|
|
|
|
|
||||||
|
Revenue |
|
|
|
||||||
|
Oilfield Services |
$ |
12,889 |
|
$ |
11,617 |
|
11% |
||
|
Oilfield Equipment |
2,921 |
|
2,641 |
|
11% |
||||
|
Turbomachinery and Process Solutions |
5,536 |
|
6,015 |
|
(8)% |
||||
|
Digital Solutions |
2,492 |
|
2,604 |
|
(4)% |
||||
|
Total Revenue |
$ |
23,838 |
|
$ |
22,877 |
|
4% |
||
|
|
|
|
|
||||||
|
Segment operating income |
|
|
|
||||||
|
Oilfield Services |
$ |
917 |
|
$ |
785 |
|
17% |
||
|
Oilfield Equipment |
55 |
|
— |
|
F |
||||
|
Turbomachinery and Process Solutions |
719 |
|
621 |
|
16% |
||||
|
Digital Solutions |
343 |
|
390 |
|
(12)% |
||||
|
Total segment operating income |
2,035 |
|
1,796 |
|
13% |
||||
|
Corporate |
(433 |
) |
(405 |
) |
(7)% |
||||
|
Inventory impairment and related |
— |
|
(105 |
) |
100% |
||||
|
Restructuring, impairment & other |
(342 |
) |
(433 |
) |
21% |
||||
|
Separation and merger related |
(184 |
) |
(153 |
) |
(20)% |
||||
|
Operating income |
1,074 |
|
701 |
|
53% |
||||
|
Adjusted operating income(a) |
$ |
1,602 |
|
$ |
1,391 |
|
15% |
||
|
(a) Adjusted operating income, a non-GAAP measure, excludes inventory impairment, restructuring, impairment & other charges, and separation and merger related costs from GAAP operating income. |
Charges & Credits
Table 1a. Reconciliation of GAAP and Adjusted Operating Income/(Loss)
|
|
Three Months Ended |
||||||||
|
(in millions) |
December 31, |
September 30, |
December 31, |
||||||
|
Operating income (GAAP) |
$ |
331 |
|
$ |
297 |
|
$ |
382 |
|
|
Separation, merger & integration related |
57 |
|
54 |
|
41 |
|
|||
|
Restructuring, impairment & other |
159 |
|
71 |
|
59 |
|
|||
|
Inventory impairment |
— |
|
— |
|
16 |
|
|||
|
Total operating income adjustments |
216 |
|
125 |
|
116 |
|
|||
|
Adjusted operating income (non-GAAP) |
$ |
546 |
|
$ |
422 |
|
$ |
498 |
|
Table 1a reconciles operating income (loss), which is the directly comparable financial result determined in accordance with Generally Accepted Accounting Principles (GAAP), to adjusted operating income (loss) (a non-GAAP financial measure). Adjusted operating income excludes the impact of certain identified items.
Table 1b. Reconciliation of GAAP and Non-GAAP Net Income
|
|
Three Months Ended |
||||||||
|
(in millions, except per share amounts) |
December 31, |
September 30, |
December 31, |
||||||
|
Net income attributable to Baker Hughes (GAAP) |
$ |
48 |
|
$ |
57 |
|
$ |
131 |
|
|
Total operating income adjustments (identified items) |
216 |
|
125 |
|
116 |
|
|||
|
Other adjustments (non-operating) (1) |
— |
|
— |
|
(152 |
) |
|||
|
Tax on total adjustments |
(9 |
) |
(15 |
) |
(3 |
) |
|||
|
Total adjustments, net of income tax |
207 |
|
110 |
|
(39 |
) |
|||
|
Less: adjustments attributable to noncontrolling interests |
76 |
|
53 |
|
(27 |
) |
|||
|
Adjustments attributable to Baker Hughes |
131 |
|
57 |
|
(12 |
) |
|||
|
Adjusted net income attributable to Baker Hughes (non-GAAP) |
$ |
179 |
|
$ |
114 |
|
$ |
120 |
|
|
|
|
|
|
||||||
|
Denominator: |
|
|
|
||||||
|
Weighted-average shares of Class A common stock outstanding diluted |
653 |
|
541 |
|
463 |
|
|||
|
Adjusted earnings per Class A share— diluted (non-GAAP) |
$ |
0.27 |
|
$ |
0.21 |
|
$ |
0.26 |
|
|
(1) |
4Q'18: Primarily driven by gain on sale of business. |
Table 1b reconciles net income attributable to
Table 1c. Reconciliation of Cash Flow From Operating Activities to Free Cash Flow
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||||||
|
|
December 31, |
September 30, |
December 31, |
|
December 31, |
||||||||||||||
|
(in millions) |
2019 |
2019 |
2018 |
|
2019 |
2018 |
|||||||||||||
|
Cash flow from operating activities (GAAP) |
$ |
1,357 |
|
$ |
360 |
|
$ |
1,090 |
|
|
$ |
2,126 |
|
$ |
1,762 |
|
|||
|
Add: cash used in capital expenditures, net of proceeds from disposal of assets |
(304 |
) |
(199 |
) |
(214 |
) |
|
(976 |
) |
(537 |
) |
||||||||
|
Free cash flow (non-GAAP) |
$ |
1,053 |
|
$ |
161 |
|
$ |
876 |
|
|
$ |
1,150 |
|
$ |
1,225 |
|
|||
Table 1c reconciles net cash flows from operating activities, which is the directly comparable financial result determined in accordance with GAAP, to free cash flow (a non-GAAP financial measure). Free cash flow is defined as net cash flows from operating activities less expenditures for capital assets plus proceeds from disposal of assets.
Management provides non-GAAP financial measures in Tables 1a, 1b, and 1c because it believes such measures are widely accepted financial indicators used by investors and analysts to analyze and compare companies on the basis of operating performance and liquidity, and that these measures may be used by investors to make informed investment decisions.
|
Financial Tables (GAAP) |
|||||||||
|
Condensed Consolidated Statements of Income (Loss) |
|||||||||
|
(Unaudited) |
|||||||||
|
|
Three Months Ended |
||||||||
|
(In millions, except per share amounts) |
December 31, |
September 30, |
December 31, |
||||||
|
Revenue |
$ |
6,347 |
|
$ |
5,882 |
|
$ |
6,264 |
|
|
Costs and expenses: |
|
|
|
||||||
|
Cost of revenue |
5,052 |
|
4,781 |
|
5,028 |
|
|||
|
Selling, general and administrative |
748 |
|
679 |
|
754 |
|
|||
|
Restructuring, impairment and other |
159 |
|
71 |
|
59 |
|
|||
|
Separation and merger related |
57 |
|
54 |
|
41 |
|
|||
|
Total costs and expenses |
6,016 |
|
5,585 |
|
5,882 |
|
|||
|
Operating income |
331 |
|
297 |
|
382 |
|
|||
|
Other non operating income (loss), net |
39 |
|
(14 |
) |
152 |
|
|||
|
Interest expense, net |
(63 |
) |
(59 |
) |
(59 |
) |
|||
|
Income before income taxes |
307 |
|
224 |
|
474 |
|
|||
|
Provision for income taxes |
(212 |
) |
(107 |
) |
(173 |
) |
|||
|
Net income |
95 |
|
117 |
|
302 |
|
|||
|
Less: Net income attributable to noncontrolling interests |
47 |
|
60 |
|
171 |
|
|||
|
Net income attributable to Baker Hughes Company |
$ |
48 |
|
$ |
57 |
|
$ |
131 |
|
|
|
|
|
|
||||||
|
Per share amounts: |
|
|
|||||||
|
Basic and diluted income per Class A common share |
$ |
0.07 |
|
$ |
0.11 |
|
$ |
0.28 |
|
|
|
|
|
|
||||||
|
Weighted average shares: |
|
|
|
||||||
|
Class A basic |
650 |
|
538 |
|
462 |
|
|||
|
Class A diluted |
653 |
|
541 |
|
463 |
|
|||
|
|
|
|
|
||||||
|
Cash dividend per Class A common share |
$ |
0.18 |
|
$ |
0.18 |
|
$ |
0.18 |
|
|
|
|
|
|
||||||
|
Condensed Consolidated and Combined Statements of Income (Loss) |
||||||||||
|
(Unaudited) |
||||||||||
|
|
Year Ended December 31, |
|||||||||
|
(In millions, except per share amounts) |
2019 |
2018 |
2017 |
|||||||
|
Revenue |
$ |
23,838 |
|
$ |
22,877 |
|
$ |
17,179 |
|
|
|
Costs and expenses: |
|
|
|
|||||||
|
Cost of revenue |
19,406 |
|
18,891 |
|
14,143 |
|
||||
|
Selling, general and administrative |
2,832 |
|
2,699 |
|
2,535 |
|
||||
|
Restructuring, impairment and other |
342 |
|
433 |
|
412 |
|
||||
|
Separation and merger related |
184 |
|
153 |
|
373 |
|
||||
|
Total costs and expenses |
22,764 |
|
22,176 |
|
17,463 |
|
||||
|
Operating income (loss) |
1,074 |
|
701 |
|
(284 |
) |
||||
|
Other non operating income (loss), net |
(84 |
) |
202 |
|
80 |
|
||||
|
Interest expense, net |
(237 |
) |
(223 |
) |
(131 |
) |
||||
|
Income (loss) before income taxes and equity in loss of affiliate |
753 |
|
680 |
|
(335 |
) |
||||
|
Equity in loss of affiliate |
— |
|
(139 |
) |
(11 |
) |
||||
|
Provision for income taxes |
(482 |
) |
(258 |
) |
(45 |
) |
||||
|
Net income (loss) |
271 |
|
283 |
|
(391 |
) |
||||
|
Less: Net income attributable to GE O&G pre-merger |
— |
|
— |
|
42 |
|
||||
|
Less: Net income (loss) attributable to noncontrolling interests |
143 |
|
88 |
|
(330 |
) |
||||
|
Net income (loss) attributable to Baker Hughes Company |
$ |
128 |
|
$ |
195 |
|
$ |
(103 |
) |
|
|
|
|
|
|
|||||||
|
Per share amounts: |
|
|
|
|||||||
|
Basic income (loss) per Class A common share |
$ |
0.23 |
|
$ |
0.46 |
|
$ |
(0.24 |
) |
|
|
Diluted income (loss) per Class A common share |
$ |
0.23 |
|
$ |
0.45 |
|
$ |
(0.24 |
) |
|
|
|
|
|
|
|||||||
|
Weighted average shares: |
|
|
|
|||||||
|
Class A basic |
555 |
|
427 |
|
427 |
|
||||
|
Class A diluted |
557 |
|
429 |
|
427 |
|
||||
|
|
|
|
|
|||||||
|
Cash dividend per Class A common share |
$ |
0.72 |
|
$ |
0.72 |
|
$ |
0.35 |
|
|
|
Special dividend per Class A common share |
|
|
$ |
17.50 |
|
|||||
|
Condensed Consolidated Statements of Financial Position |
||||||||
|
(Unaudited) |
||||||||
|
|
December 31, |
|||||||
|
(In millions) |
2019 |
2018 |
||||||
|
ASSETS |
||||||||
|
Current Assets: |
|
|
||||||
|
Cash and cash equivalents (1) |
$ |
3,249 |
|
$ |
3,723 |
|
||
|
Current receivables, net |
6,416 |
|
5,969 |
|
||||
|
Inventories, net |
4,608 |
|
4,620 |
|
||||
|
All other current assets |
949 |
|
659 |
|
||||
|
Total current assets |
15,222 |
|
14,971 |
|
||||
|
Property, plant and equipment, less accumulated depreciation |
6,240 |
|
6,228 |
|
||||
|
Goodwill |
20,690 |
|
20,717 |
|
||||
|
Other intangible assets, net |
5,381 |
|
5,719 |
|
||||
|
Contract and other deferred assets |
1,881 |
|
1,894 |
|
||||
|
All other assets |
3,955 |
|
2,910 |
|
||||
|
Total assets (1) |
$ |
53,369 |
|
$ |
52,439 |
|
||
|
LIABILITIES AND EQUITY |
||||||||
|
Current Liabilities: |
|
|
||||||
|
Accounts payable |
$ |
4,268 |
|
$ |
4,025 |
|
||
|
Short-term debt and current portion of long-term debt (1) |
321 |
|
942 |
|
||||
|
Progress collections and deferred income |
2,870 |
|
1,765 |
|
||||
|
All other current liabilities |
2,555 |
|
2,288 |
|
||||
|
Total current liabilities |
10,014 |
|
9,020 |
|
||||
|
Long-term debt |
6,301 |
|
6,285 |
|
||||
|
Liabilities for pensions and other employee benefits |
1,079 |
|
1,018 |
|
||||
|
All other liabilities |
1,476 |
|
1,103 |
|
||||
|
Equity |
34,499 |
|
35,013 |
|
||||
|
Total liabilities and equity |
$ |
53,369 |
|
$ |
52,439 |
|
||
| (1) |
Total assets include $273 million and $896 million of assets held on behalf of GE, of which $162 million and $747 million is cash and cash equivalents and $111 million and $149 million is investment securities at December 31, 2019 and December 31, 2018, respectively, and a corresponding amount of liability is reported in short-term borrowings. |
|
Condensed Consolidated Statements of Cash Flows |
||||||||
|
(Unaudited) |
||||||||
|
|
December 31, |
|||||||
|
(In millions) |
2019 |
2018 |
||||||
|
Cash flows from operating activities: |
|
|
||||||
|
Net income |
$ |
271 |
|
$ |
283 |
|
||
|
Adjustments to reconcile net income to net cash flows from operating activities: |
|
|
||||||
|
Depreciation and amortization |
1,418 |
|
1,486 |
|
||||
|
Working capital and other operating items, net |
437 |
|
(7 |
) |
||||
|
Net cash flows from operating activities |
2,126 |
|
1,762 |
|
||||
|
Cash flows from investing activities: |
|
|
||||||
|
Expenditures for capital assets, net of proceeds from disposal of assets |
(976 |
) |
(537 |
) |
||||
|
Other investing items, net |
(69 |
) |
(41 |
) |
||||
|
Net cash flows used in investing activities |
(1,045 |
) |
(578 |
) |
||||
|
Cash flows from financing activities: |
|
|
||||||
|
Net repayment of borrowings |
(587 |
) |
(1,060 |
) |
||||
|
Dividends paid |
(395 |
) |
(315 |
) |
||||
|
Distributions to GE |
(350 |
) |
(495 |
) |
||||
|
Repurchase of Class A common stock |
— |
|
(387 |
) |
||||
|
Repurchase of common units from GE by BHGE LLC |
(250 |
) |
(2,099 |
) |
||||
|
Other financing items, net |
48 |
|
(7 |
) |
||||
|
Net cash flows used in financing activities |
(1,534 |
) |
(4,363 |
) |
||||
|
Effect of currency exchange rate changes on cash and cash equivalents |
(21 |
) |
(128 |
) |
||||
|
Decrease in cash and cash equivalents |
(474 |
) |
(3,307 |
) |
||||
|
Cash and cash equivalents, beginning of year |
3,723 |
|
7,030 |
|
||||
|
Cash and cash equivalents, end of year |
$ |
3,249 |
|
$ |
3,723 |
|
||
Supplemental Financial Information
Supplemental financial information can be found on the Company’s website at: investors.bakerhughes.com in the Financial Information section under Quarterly Results.
Conference Call and Webcast
The Company has scheduled an investor conference call to discuss management’s outlook and the results reported in today’s earnings announcement. The call will begin at
Forward-Looking Statements
This news release (and oral statements made regarding the subjects of this release) may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (each a “forward-looking statement”). The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “project,” “foresee,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “potential,” “would,” “may,” “probable,” “likely,” and similar expressions, and the negative thereof, are intended to identify forward-looking statements. There are many risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. These forward-looking statements are also affected by the risk factors described in the Company’s annual report on Form 10-K for the annual period ended
Our expectations regarding our business outlook and business plans; the business plans of our customers; oil and natural gas market conditions; cost and availability of resources; economic, legal and regulatory conditions, and other matters are only our forecasts regarding these matters.
These forward-looking statements, including forecasts, may be substantially different from actual results, which are affected by many risks, along with the following risk factors and the timing of any of these risk factors:
GE Separation - The failure to successfully eliminate dependencies on GE or a failure by GE to supply products and services to us in accordance with applicable contractual terms could have a material effect on our business.
Economic and political conditions - the impact of worldwide economic conditions; the effect that declines in credit availability may have on worldwide economic growth and demand for hydrocarbons; foreign currency exchange fluctuations and changes in the capital markets in locations where we operate; and the impact of government disruptions and sanctions.
Orders and RPO - our ability to execute on orders and RPO in accordance with agreed specifications, terms and conditions and convert those orders and RPO to revenue and cash.
Oil and gas market conditions - the level of petroleum industry exploration, development and production expenditures; the price of, volatility in pricing of, and the demand for crude oil and natural gas; drilling activity; drilling permits for and regulation of the shelf and the deepwater drilling; excess productive capacity; crude and product inventories; liquefied natural gas supply and demand; seasonal and other adverse weather conditions that affect the demand for energy; severe weather conditions, such as tornadoes and hurricanes, that affect exploration and production activities;
Terrorism and geopolitical risks - war, military action, terrorist activities or extended periods of international conflict, particularly involving any petroleum-producing or -consuming regions; labor disruptions, civil unrest or security conditions where we operate; potentially burdensome taxation, expropriation of assets by governmental action; cybersecurity risks and cyber incidents or attacks; epidemic outbreaks.
About
View source version on businesswire.com: https://www.businesswire.com/news/home/20200122005222/en/
Source:
Investor Relations
Jud Bailey
+1 281-809-9088
investor.relations@bakerhughes.com
Media Relations
Melanie Kania
+1 713-879-1088
melanie.kania@bakerhughes.com
Stephanie Cathcart
+1 202-549-6462
Stephanie.cathcart@bakerhughes.com