Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 22, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | Baker Hughes a GE Co | |
Entity Central Index Key | 1,701,605 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 412,187,482 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 687,743,095 |
Condensed Consolidated and Comb
Condensed Consolidated and Combined Statements of Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue: | ||||
Revenues | $ 5,665 | $ 5,301 | $ 16,612 | $ 11,380 |
Costs and expenses: | ||||
Selling, general and administrative expenses | 608 | 795 | 1,944 | 1,748 |
Restructuring, impairment and other | 66 | 191 | 374 | 292 |
Merger and related costs | 17 | 159 | 113 | 310 |
Total costs and expenses | 5,383 | 5,494 | 16,293 | 11,553 |
Operating income (loss) | 282 | (193) | 319 | (173) |
Other non operating income, net | 6 | 4 | 51 | 62 |
Interest expense, net | (55) | (41) | (164) | (75) |
Income (loss) before income taxes and equity in loss of affiliate | 233 | (230) | 206 | (186) |
Equity in loss of affiliate | (85) | (13) | (139) | (13) |
Provision for income taxes | (110) | (114) | (86) | (112) |
Net income (loss) | 38 | (357) | (19) | (311) |
Less: Net income attributable to GE O&G pre-merger | 0 | 0 | 0 | 42 |
Less: Net income (loss) attributable to noncontrolling interests | 25 | (223) | (83) | (219) |
Net income (loss) attributable to Baker Hughes, a GE company | $ 13 | $ (134) | $ 64 | $ (134) |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Earnings per share, basic (in dollars per share) | $ 0.03 | $ (0.31) | $ 0.15 | $ (0.31) |
Earnings per share, diluted (in dollars per share) | 0.03 | (0.31) | 0.15 | (0.31) |
Common Class A | ||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Earnings per share, basic (in dollars per share) | 0.03 | (0.31) | 0.15 | (0.31) |
Earnings per share, diluted (in dollars per share) | 0.03 | (0.31) | 0.15 | (0.31) |
Common Class A | Cash Dividend | ||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Cash dividends per share (in dollars per share) | $ 0.18 | $ 0.17 | $ 0.54 | $ 0.17 |
Sales of goods | ||||
Revenue: | ||||
Revenues | $ 3,142 | $ 3,110 | $ 9,421 | $ 7,619 |
Costs and expenses: | ||||
Costs | 2,819 | 2,587 | 8,371 | 6,377 |
Sales of services | ||||
Revenue: | ||||
Revenues | 2,523 | 2,191 | 7,191 | 3,761 |
Costs and expenses: | ||||
Costs | $ 1,873 | $ 1,762 | $ 5,491 | $ 2,826 |
Condensed Consolidated and Co_2
Condensed Consolidated and Combined Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 38 | $ (357) | $ (19) | $ (311) |
Less: Net income attributable to GE O&G pre-merger | 0 | 0 | 0 | 42 |
Less: Net income (loss) attributable to noncontrolling interests | 25 | (223) | (83) | (219) |
Net income (loss) attributable to Baker Hughes, a GE company | 13 | (134) | 64 | (134) |
Other comprehensive income (loss): | ||||
Investment securities | (1) | 1 | (3) | 2 |
Foreign currency translation adjustments | (88) | 265 | (312) | 192 |
Cash flow hedges | (2) | 9 | (1) | 17 |
Benefit plans | 1 | (4) | 3 | (6) |
Other comprehensive income (loss) | (90) | 271 | (313) | 205 |
Less: Other comprehensive loss attributable to GE O&G pre-merger | 0 | 0 | 0 | (69) |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | (56) | 169 | (195) | 172 |
Other comprehensive income (loss) attributable to Baker Hughes, a GE company | (34) | 102 | (118) | 102 |
Comprehensive loss | (52) | (86) | (332) | (106) |
Less: Comprehensive loss attributable to GE O&G pre-merger | 0 | 0 | 0 | (27) |
Less: Comprehensive loss attributable to noncontrolling interests | (31) | (54) | (278) | (47) |
Comprehensive loss attributable to Baker Hughes, a GE company | $ (21) | $ (32) | $ (54) | $ (32) |
Condensed Consolidated and Co_3
Condensed Consolidated and Combined Statements of Financial Position (Unaudited) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | |
Current assets: | |||
Cash, cash equivalents and restricted cash | [1] | $ 4,765 | $ 7,030 |
Current receivables, net | 5,809 | 6,015 | |
Inventories, net | 4,681 | 4,507 | |
All other current assets | 863 | 872 | |
Total current assets | 16,118 | 18,424 | |
Property, plant and equipment (net of accumulated depreciation of $3,517 and $2,817) | 6,226 | 6,959 | |
Goodwill | 20,790 | 19,927 | |
Other intangible assets, net | 5,831 | 6,358 | |
Contract and other deferred assets | 2,001 | 2,044 | |
All other assets | 1,422 | 2,073 | |
Deferred income taxes | 1,212 | 715 | |
Total assets | [1] | 53,600 | 56,500 |
Current liabilities: | |||
Accounts payable | 3,686 | 3,377 | |
Short-term debt and current portion of long-term debt | [1] | 1,000 | 2,037 |
Progress collections and deferred income | 1,587 | 1,775 | |
All other current liabilities | 2,184 | 2,038 | |
Total current liabilities | 8,457 | 9,227 | |
Long-term debt | 6,293 | 6,312 | |
Deferred income taxes | 181 | 490 | |
Liabilities for pensions and other postretirement benefits | 1,082 | 1,172 | |
All other liabilities | 1,024 | 889 | |
Equity: | |||
Capital in excess of par value | 14,575 | 15,083 | |
Retained loss | (14) | (103) | |
Accumulated other comprehensive loss | (821) | (703) | |
Baker Hughes, a GE company equity | 13,740 | 14,277 | |
Noncontrolling interests | 22,823 | 24,133 | |
Total equity | 36,563 | 38,410 | |
Total liabilities and equity | 53,600 | 56,500 | |
Common Class A | |||
Equity: | |||
Common stock | 0 | 0 | |
Common Class B | |||
Equity: | |||
Common stock | $ 0 | $ 0 | |
[1] | Total assets include $936 million and $1,124 million of assets held on behalf of GE, of which $780 million and $997 million is cash and cash equivalents and $156 million and $127 million is investment securities at September 30, 2018 and December 31, 2017, respectively, and a corresponding amount of liability is reported in short-term borrowings. See "Note 17. Related Party Transactions" for further details. |
Condensed Consolidated and Co_4
Condensed Consolidated and Combined Statements of Financial Position (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Property, plant and equipment, accumulated depreciation | $ 3,517 | $ 2,817 |
Common stock par value (in dollars per share) | $ 0.0001 | |
Common Class A | ||
Common stock par value (in dollars per share) | $ 0.0001 | |
Common stock authorized (in shares) | 2,000,000,000 | |
Common stock issued (shares) | 412,000,000 | |
Common stock outstanding (in shares) | 412,000,000 | |
Common Class B | ||
Common stock par value (in dollars per share) | $ 0.0001 | |
Common stock authorized (in shares) | 1,250,000,000 | |
Common stock issued (shares) | 688,000,000 | |
Common stock outstanding (in shares) | 688,000,000 | |
Related party amount, due to related party | GE | ||
Cash held on behalf of GE | $ 936 | 1,124 |
Cash and cash equivalents | 780 | 997 |
Investment securities | $ 156 | $ 127 |
Condensed Consolidated and Co_5
Condensed Consolidated and Combined Statements of Changes in Equity (Unaudited) - USD ($) $ in Millions | Total | Capital in Excess of Par Value | Parent's Net Investment | Retained Loss | Accumulated Other Comprehensive Loss | Non-controlling Interests | Common Class ACommon Stock | Common Class BCommon Stock | Cash Dividend | Cash DividendCapital in Excess of Par Value | Cash DividendNon-controlling Interests | |
Beginning Balance at Dec. 31, 2016 | $ 14,280 | $ 0 | $ 16,001 | $ 0 | $ (1,888) | $ 167 | $ 0 | $ 0 | ||||
Stockholders' Equity | ||||||||||||
Net income (loss) | 46 | 42 | 4 | |||||||||
Changes in Parent's net investment | 1,939 | 1,939 | ||||||||||
Other comprehensive income (loss) | (66) | (69) | 3 | |||||||||
Net activity related to noncontrolling interests | 4 | 4 | ||||||||||
Ending Balance at Jun. 30, 2017 | 16,203 | 0 | 17,982 | 0 | (1,957) | 178 | 0 | 0 | ||||
Net Income (Loss) Attributable to Parent | (134) | |||||||||||
Beginning Balance at Dec. 31, 2016 | 14,280 | 0 | 16,001 | 0 | (1,888) | 167 | 0 | 0 | ||||
Stockholders' Equity | ||||||||||||
Net income (loss) | (311) | |||||||||||
Other comprehensive income (loss) | 205 | |||||||||||
Ending Balance at Sep. 30, 2017 | 39,333 | 15,305 | 0 | (134) | (634) | 24,796 | 0 | 0 | ||||
Beginning Balance at Dec. 31, 2016 | 14,280 | 0 | 16,001 | 0 | (1,888) | 167 | 0 | 0 | ||||
Ending Balance at Dec. 31, 2017 | 38,410 | 15,083 | 0 | (103) | (703) | 24,133 | 0 | 0 | ||||
Net Income (Loss) Attributable to Parent | (134) | |||||||||||
Beginning Balance at Jun. 30, 2017 | 16,203 | 0 | 17,982 | 0 | (1,957) | 178 | 0 | 0 | ||||
Stockholders' Equity | ||||||||||||
Net income (loss) | (357) | |||||||||||
Other comprehensive income (loss) | 271 | |||||||||||
Ending Balance at Sep. 30, 2017 | 39,333 | 15,305 | 0 | (134) | (634) | 24,796 | 0 | 0 | ||||
Ending Balance at Dec. 31, 2017 | 38,410 | 15,083 | 0 | (103) | (703) | 24,133 | 0 | 0 | ||||
Net Income (Loss) Attributable to Parent | 64 | |||||||||||
Stockholders' Equity | ||||||||||||
Effect of adoption of ASU 2016-16 on taxes (1) | [1] | 67 | 25 | 42 | ||||||||
Net income (loss) | (19) | 64 | (83) | |||||||||
Other comprehensive income (loss) | (313) | (118) | (195) | |||||||||
Cash dividend | (400) | $ (224) | $ (224) | |||||||||
Repurchase and cancellation of Class A and Class B common stock | (1,000) | (374) | (626) | |||||||||
Stock-based compensation cost | 90 | 90 | ||||||||||
Distribution to noncontrolling interests | (400) | |||||||||||
Other | (48) | (48) | ||||||||||
Ending Balance at Sep. 30, 2018 | 36,563 | 14,575 | 0 | (14) | (821) | 22,823 | 0 | 0 | ||||
Net Income (Loss) Attributable to Parent | 13 | 13 | ||||||||||
Beginning Balance at Jun. 30, 2018 | 36,817 | 14,625 | 0 | (27) | (787) | 23,006 | 0 | 0 | ||||
Stockholders' Equity | ||||||||||||
Net income (loss) | 38 | 25 | ||||||||||
Other comprehensive income (loss) | (90) | (34) | (56) | |||||||||
Cash dividend | $ (74) | $ (74) | ||||||||||
Stock-based compensation cost | 31 | 31 | ||||||||||
Distribution to noncontrolling interests | (147) | (147) | ||||||||||
Other | (12) | (7) | (5) | |||||||||
Ending Balance at Sep. 30, 2018 | $ 36,563 | $ 14,575 | $ 0 | $ (14) | $ (821) | $ 22,823 | $ 0 | $ 0 | ||||
[1] | See "Note 1. Basis of Presentation and Summary of Significant Accounting Policies" for further details. |
Condensed Consolidated and Co_6
Condensed Consolidated and Combined Statements of Changes in Equity (Unaudited) (Parenthetical) | 3 Months Ended |
Sep. 30, 2017$ / shares | |
Common Class A | Special Dividend | |
Cash dividends per share (in dollars per share) | $ 17.5 |
Condensed Consolidated and Co_7
Condensed Consolidated and Combined Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash flows from operating activities: | |||
Net loss | $ (19) | $ (311) | |
Adjustments to reconcile net loss to net cash flows from (used in) operating activities: | |||
Depreciation and amortization | 1,133 | 716 | |
Provision for deferred income taxes | (312) | (29) | |
Changes in operating assets and liabilities: | |||
Current receivables | (36) | (250) | |
Inventories | (335) | 195 | |
Accounts payable | 458 | 84 | |
Progress collections and deferred income | (198) | (92) | |
Contract and other deferred assets | 53 | (558) | |
Other operating items, net | (71) | (340) | |
Net cash flows from (used in) operating activities | 673 | (585) | |
Cash flows from investing activities: | |||
Expenditures for capital assets | (653) | (417) | |
Proceeds from disposal of assets | 330 | 76 | |
Net cash paid for acquisitions | (20) | (3,365) | |
Other investing items, net | 139 | (173) | |
Net cash flows used in investing activities | (204) | (3,879) | |
Cash flows from financing activities: | |||
Net repayments of short-term debt and other borrowings | (319) | (325) | |
Repayment of long-term debt | (673) | 0 | |
Dividends paid | (224) | (76) | |
Distributions to noncontrolling interest | (400) | (122) | |
Contribution received from GE | 0 | 7,400 | |
Net transfer from Parent | 0 | 1,574 | |
Repurchase of Class A common stock | (387) | 0 | |
Repurchase of GE common units by BHGE LLC | (638) | 0 | |
Other financing items, net | (6) | (239) | |
Net cash flows from (used in) financing activities | (2,647) | 8,212 | |
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | (87) | 48 | |
Increase (decrease) in cash, cash equivalents and restricted cash | (2,265) | 3,796 | |
Cash, cash equivalents and restricted cash, beginning of period | 7,030 | [1] | 981 |
Cash, cash equivalents and restricted cash, end of period | 4,765 | [1] | 4,777 |
Supplemental cash flows disclosures: | |||
Income taxes paid | 305 | 122 | |
Interest paid | $ 218 | $ 31 | |
[1] | Total assets include $936 million and $1,124 million of assets held on behalf of GE, of which $780 million and $997 million is cash and cash equivalents and $156 million and $127 million is investment securities at September 30, 2018 and December 31, 2017, respectively, and a corresponding amount of liability is reported in short-term borrowings. See "Note 17. Related Party Transactions" for further details. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
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, a GE company (the Company, BHGE, we, us, or our), was formed on October 28, 2016, for the purpose of facilitating the combination of Baker Hughes Incorporated, a Delaware corporation (Baker Hughes), and the oil and gas business (GE O&G) of General Electric Company (GE). On July 3, 2017 , we completed the combination of GE O&G and Baker Hughes (the Transactions) resulting in substantially all of the business of GE O&G and of Baker Hughes being transferred to a subsidiary of the Company, Baker Hughes, a GE company, LLC (BHGE LLC). GE has approximately 62.5% of economic interest in BHGE LLC and the Company has approximately 37.5% economic interest in BHGE LLC, held indirectly. We are a world-leading, fullstream oilfield technology provider that has a unique mix of equipment and service capabilities. We conduct business in more than 120 countries and employ approximately 65,000 employees. BASIS OF PRESENTATION BHGE, through two wholly owned subsidiaries, holds a minority economic interest in BHGE LLC, however, we conduct and exercise full control over all activities of BHGE LLC, without the approval of any other member. Accordingly, we consolidate the financial results of BHGE LLC and report a noncontrolling interest in our condensed consolidated and combined financial statements for the economic interest in BHGE LLC not held by us. We consider BHGE LLC to be a consolidated variable interest entity (VIE). We are a holding company and have no material assets other than our ownership interest in BHGE LLC and certain intercompany and tax related balances. BHGE 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. The results of operations for the nine months ended September 30, 2018 may not be comparable to the results of operations for the nine months ended September 30, 2017 as it excludes the results of Baker Hughes prior to the date of the business combination. The accompanying unaudited condensed consolidated and combined 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. All intercompany accounts and transactions have been eliminated. In the opinion of management, the condensed consolidated and combined financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows of the Company and its 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, effective July 3, 2017 , following consummation of the Transactions. 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 subsequent periods will also be presented on a consolidated basis. For all periods prior to July 3, 2017 , the Company's financial statements were prepared on a combined basis. The combined financial statements combine certain accounts of GE and its subsidiaries that were historically managed as part of its Oil & Gas business and contributed to BHGE LLC as part of the Transactions (refer to "Note 3. Business Acquisition" for further details on the Transactions). Additionally, it also includes certain assets, liabilities and results of operations of other businesses of GE that were also contributed to BHGE LLC as part of the Transactions on a fully retrospective basis (in accordance with the guidance applicable to transactions between entities under common control) based on their carrying values, as reflected in the accounting records of GE. The condensed consolidated and combined statements of income (loss) reflect intercompany expense allocations made to us by GE for certain corporate functions and for shared services provided by GE. See "Note 17. Related Party Transactions" for further information on expenses allocated by GE. The historical financial results in the condensed consolidated and combined financial statements presented may not be indicative of the results that would have been achieved had GE O&G operated as a separate, stand-alone entity during those periods. In the notes to unaudited condensed consolidated and combined 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. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Please refer to "Note 1. Basis of Presentation and Summary of Significant Accounting Policies," to our consolidated and combined financial statements from our Annual Report on Form 10-K for the year ended December 31, 2017 (2017 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, Cash Equivalents and Restricted Cash As of September 30, 2018 , and December 31, 2017 , we had $1,119 million and $1,190 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 is $593 million and $764 million , as of September 30, 2018 and December 31, 2017 , respectively, held on behalf of GE. Cash, cash equivalents and restricted cash includes a total of $780 million and $997 million of cash at September 30, 2018 and December 31, 2017 , respectively, held on behalf of GE, and a corresponding liability is reported in short-term borrowings. See "Note 17. Related Party Transactions" for further details. As a result of adopting Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-18, Statement of Cash Flows: Restricted Cash , we reclassified our restricted cash of $7 million from ‘all other assets’ to cash, cash equivalents and restricted cash as of December 31, 2017. At September 30, 2018 , such cash is no longer considered restricted in nature. NEW ACCOUNTING STANDARDS ADOPTED On January 1, 2018, we adopted the FASB ASU No. 2014-09, Revenue from Contracts with Customers, and the related amendments (ASC 606). We elected to adopt the new standard using the full retrospective method, where the standard was applied to each prior reporting period presented and the cumulative effect of applying the standard was recognized at January 1, 2016. In addition, we elected the practical expedient for contract modifications, which essentially means that the terms of the contract that existed at the beginning of the earliest period presented can be assumed to have been in place since the inception of the contract (i.e., not practical to separately evaluate the effects of all prior contract modifications). This standard requires us to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time based on when control of goods and services transfer to a customer. As a result of adoption of the standard, we changed the presentation of our financial statements, including: (1) timing of revenue recognition, and (2) changes in classification between revenue and costs. The standard has no cash impact and, as such, does not affect the economics of our underlying customer contracts. Our policy on recognizing revenue is as follows: Revenue from Sale of Equipment Performance Obligations Satisfied Over Time We recognize revenue on agreements for sales of goods manufactured to unique customer specifications, including long-term construction projects, on an over-time basis utilizing cost inputs as the measurement criteria in assessing the progress toward completion. Our estimate of costs to be incurred to fulfill our promise to a customer is based on our history of manufacturing or constructing similar assets for customers and is updated routinely to reflect changes in quantity or pricing of the inputs. We begin to recognize revenue on these contracts when the contract specific inventory becomes customized for a customer, which is reflective of our initial transfer of control of the incurred costs. We provide for potential losses on any of these agreements when it is probable that we will incur the loss. Our billing terms for these over-time contracts vary, but are generally based on achieving specified milestones. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We recognize revenue for non-customized equipment at the point in time that the customer obtains control of the good, which is no earlier than when the customer has physical possession of the product. Equipment for which we recognize revenue at a point in time include goods we manufacture on a standardized basis for sale to the market. We use proof of delivery for certain large equipment with more complex logistics associated with the shipment, whereas the delivery of other equipment is determined based on historical data of transit times between regions. On occasion we sell products with a right of return. We use our accumulated experience to estimate and provide for such returns when we record the sale. In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have concluded that the customer has control of the goods and that acceptance is likely to occur. Our billing terms for these point in time equipment contracts vary, but are generally based on shipment of the goods to the customer. Revenue from Sale of Services Performance Obligations Satisfied Over Time Revenue on Oilfield Services is recognized on an overtime basis as performed. We also sell product services under long-term product maintenance or extended warranty agreements in our Turbomachinery & Process Solutions and Oilfield Equipment segments. These agreements require us to maintain the customers' assets over the service agreement contract terms, which generally range from 10 to 20 years. In general, these are contractual arrangements to provide services, repairs, and maintenance of a covered unit (gas turbines for mechanical drive or power generation, primarily on LNG applications, drilling rigs). These services are performed at various times during the life of the contract, thus the costs of performing services are incurred on other than a straight-line basis. We recognize related sales based on the extent of our progress toward completion measured by actual costs incurred in relation to total expected costs. We provide for any loss that we expect to incur on any of these agreements when that loss is probable. BHGE utilizes historical customer data, prior product performance data, statistical analysis, third-party data, and internal management estimates to calculate contract-specific margins. In certain contracts, the total transaction price is variable based on customer utilization, which is excluded from the contract margin until the period that the customer has utilized to appropriately reflect the revenue activity in the period earned. Our billing terms for these contracts are generally based on the occurrence of a major maintenance event within the contract or asset utilization (i.e. usage per hour). The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We sell certain tangible products, largely spare equipment, through our services business. We recognize revenues for this equipment at the point in time that the customer obtains control of the good, which is at the point in time we deliver the spare part to the customer. Our billing terms for these point in time service contracts vary, but are generally based on shipment of the goods to the customer. Impact of Adoption As a result of the adoption of the standard, the timing of revenue recognition on our long-term product service agreements is affected. Although we continue to recognize revenue over time on these contracts, there are changes to how contract modifications, termination clauses and purchase options are accounted for by us. In particular, under the previous standard, the cumulative impact from a contract modification on revenue already recorded is recognized in the period in which the modification is agreed. Under the new standard, the impact from certain types of modifications is recognized over the remaining life of the contract. The change in historical periods to our statements of income (loss) related to the adoption of the standard is summarized below (in millions, except per share amounts): Three Months Ended Year Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2017 December 31, 2016 Revenue: Sales of goods $ 86 $ 13 $ 37 $ 27 $ 163 $ (26 ) Sales of services (50 ) (86 ) (33 ) (74 ) (243 ) (161 ) Total revenue 36 (73 ) 4 (47 ) (80 ) (187 ) Operating loss (14 ) (64 ) (6 ) (91 ) (175 ) (226 ) Net income (loss) 1 (84 ) (10 ) (57 ) (150 ) (149 ) Net income (loss) attributable to BHGE 1 (31 ) — — (30 ) — Per share amounts: Basic and diluted loss per Class A common stock — (0.07 ) (0.07 ) The increase (decrease) to our statement of financial position related to the adoption of the standard is summarized below: December 31, 2017 ASSETS Current receivables, net $ 1 Inventories, net (83 ) Contract and other deferred assets (701 ) Deferred income taxes 233 LIABILITIES AND EQUITY Progress collections and deferred income $ 394 All other current liabilities (64 ) Deferred income taxes (34 ) All other liabilities (83 ) Baker Hughes, a GE company equity (432 ) Noncontrolling interests (331 ) The cumulative impact to our retained earnings (included in our net parent investment) as of January 1, 2016 was a reduction of $432 million . On January 1, 2018, we adopted the FASB ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory . The ASU eliminated the deferral of tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes are recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The effect of the adoption of the standard was an increase to retained earnings of $25 million and an increase to noncontrolling interest of $42 million as of January 1, 2018 with no other impact to our financial statements. Future earnings will be reduced in total by this amount. The effect of the change on future transactions will depend on the nature and amount of future transactions as it will affect the timing of recognition of both tax expenses and tax benefits, with no change in the associated cash flows. On January 1, 2018, we adopted the FASB ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changed the income statement presentation of net periodic benefit cost by requiring separation between the service cost component and all other components. The service cost component is presented as an operating expense with other similar compensation costs arising for services rendered by the pertinent employees during the period. The non operating components are presented outside of income from operations. The change in historical periods to our statements of income (loss) related to the adoption of ASU No. 2017-07 is summarized below: Three Months Ended Year Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2017 December 31, 2016 Operating income (loss) $ (5 ) $ (7 ) $ 9 $ 2 $ (1 ) $ 24 Non operating income (loss) 5 7 (9 ) (2 ) 1 (24 ) NEW ACCOUNTING STANDARDS TO BE ADOPTED In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) : Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The ASU provides that the stranded tax effects from the Tax Cuts and Jobs Act on the balance of other comprehensive earnings may be reclassified to retained earnings. The ASU is effective for periods beginning after December 15, 2018, with an election to adopt early. The ASU is not expected to have a material effect to our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases . The ASU establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. In July 2018, the FASB issued an ASU that added an alternative transition method, which allows companies to apply the provisions of the new leasing standard on January 1, 2019 through recognition of a cumulative-effect adjustment to retained earnings as of January 1, 2019 (i.e. without retrospectively adjusting comparative periods). We intend to apply this alternative transition method. We are currently in the process of accumulating and evaluating all the necessary information required to properly account for our lease portfolio under the new standard. Additionally, we are implementing an enterprise-wide lease management system to support the ongoing accounting requirements. While we continue to evaluate the effect of the standard on our ongoing financial reporting, we anticipate that the adoption of the ASU is expected to result in the recognition of right of use asset and related liability in the range of approximately $600 million and $750 million with an estimated immaterial effect to our retained earnings and cash flows. 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. |
Revenue Related to Contracts Wi
Revenue Related to Contracts With Customers | 9 Months Ended |
Sep. 30, 2018 | |
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. Three Months Ended September 30, Nine Months Ended September 30, Total Revenue 2018 2017 2018 2017 U.S. $ 1,675 $ 1,415 $ 4,718 $ 2,837 Non-U.S. 3,990 3,886 11,894 8,543 Total $ 5,665 $ 5,301 $ 16,612 $ 11,380 REMAINING PERFORMANCE OBLIGATIONS As of September 30, 2018 , the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $20.8 billion . We expect to recognize revenue of approximately 45% , 62% and 89% 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 INCOME Contract 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: September 30, 2018 December 31, 2017 Progress collections $ 1,433 $ 1,456 Deferred income 154 319 Progress collections and deferred income (contract liabilities) (1) $ 1,587 $ 1,775 (1) Progress collections and deferred income (contract liabilities) were $2,038 million at January 1, 2017. Revenue recognized during the three months ended September 30, 2018 and 2017 that was included in the contract liabilities at the beginning of the period was $281 million and $254 million , respectively, and $1,287 million and $1,289 million , during the nine months ended September 30, 2018 and 2017 , respectively. |
Business Acquisition
Business Acquisition | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Acquisition | BUSINESS ACQUISITION On July 3, 2017, we closed the Transactions to combine GE O&G and Baker Hughes. The Transactions were executed using a partnership structure, pursuant to which GE O&G and Baker Hughes each contributed their operating assets to a newly formed partnership, BHGE LLC. The fair value of the consideration exchanged was $24,798 million . The tables below present the fair value of assets acquired and liabilities assumed and the associated fair value of the noncontrolling interest related to the acquired net assets of Baker Hughes. The final determination of the fair value of assets and liabilities was concluded in the second quarter of 2018. Identifiable assets acquired and liabilities assumed Fair value at July 3, 2017 Assets Cash and equivalents $ 4,133 Current receivables 2,342 Inventories 1,712 Property, plant and equipment 4,514 Intangible assets (1) 4,005 All other assets 1,335 Liabilities Accounts payable (1,213 ) Borrowings (3,370 ) Deferred income taxes (2) (258 ) Liabilities for pension and other postretirement benefits (654 ) All other liabilities (1,676 ) Total identifiable net assets $ 10,870 Noncontrolling interest associated with net assets acquired (35 ) Goodwill (3) 13,963 Total purchase consideration $ 24,798 (1) Intangible assets, as provided in the table below, are recorded at fair value, as determined by management based on available information. The estimated useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. We consider the Baker Hughes trade name to be an indefinite life intangible asset, which will not be amortized and will be subject to an annual impairment test. Fair Value Estimated Weighted Trade name - Baker Hughes $ 2,100 Indefinite life Customer relationships 1,240 15 Patents and technology 465 10 In-process research and development 70 Indefinite life Capitalized software 64 2 Trade names - other 45 10 Favorable lease contracts & others 21 10 Total $ 4,005 (2) Includes approximately $500 million of net deferred tax liabilities related to the fair value of intangible assets included in the purchase consideration and approximately $242 million of other net deferred tax assets, including non-U.S. loss carryforwards net of valuation allowances partially offset by liabilities for unrecognized benefits. (3) Goodwill represents the excess of the total purchase consideration over fair value of the net assets recognized and represents the future economic benefits that we believe will result from combining the operations of GE O&G and Baker Hughes, including expected future synergies and operating efficiencies. Goodwill resulting from the Transactions has been primarily allocated to the Oilfield Services segment, of which $67 million is deductible for tax purposes. See "Note 7. Goodwill and Other Intangible Assets" for allocation of goodwill to all the segments. During the six months ended June 30, 2018, the Company made measurement period adjustments to reflect facts and circumstances in existence as of the acquisition date. These adjustments resulted in an increase in goodwill from December 31, 2017 of $911 million primarily due to a reduction in the fair value of property, plant and equipment of $362 million , equity method investments of $228 million , intangible assets of $123 million and an increase in other liabilities of $314 million primarily related to uncertain tax positions, warranty, and other sundry liabilities. As a result of the decrease in property, plant and equipment and intangible assets during the six months ended June 30, 2018, we recorded a cumulative decrease to depreciation and amortization expense of $33 million . We reclassified certain balances to conform to our current presentation. INCOME TAXES BHGE LLC is treated as a partnership for U.S. federal income tax purposes. As such, BHGE LLC is not itself subject to U.S. federal income tax under current U.S. tax laws. BHGE LLC's foreign subsidiaries, however, have incurred current and deferred foreign income taxes. The members of BHGE LLC are each required to take into account for U.S. federal income tax purposes their distributive share of the items of income, gain, loss and deduction of BHGE LLC, which generally includes our U.S. operations. BHGE and GE are each taxed on their distributive share of income and gain, whether or not a corresponding amount of cash or other property is distributed to them. For assets held indirectly by BHGE LLC through subsidiaries, the taxes attributable to those subsidiaries will be reflected in our condensed consolidated and combined financial statements. MERGER AND RELATED COSTS Acquisition costs of $17 million and $159 million , during the three months ended September 30, 2018 and 2017 , respectively, and $113 million and $310 million during the nine months ended September 30, 2018 and 2017 , respectively, were expensed as incurred and were reported as merger and related costs. Such costs include professional fees of advisors and integration and synergy costs related to the combination of Baker Hughes and GE O&G. UNAUDITED PRO FORMA INFORMATION The following unaudited pro forma information has been presented as if the Transactions occurred on January 1, 2016. This information has been prepared by combining the historical results of GE O&G and historical results of Baker Hughes. The unaudited pro forma combined financial data for all periods presented were adjusted to give effect to pro forma events that 1) are directly attributable to the Transactions, 2) factually supportable, and 3) expected to have a continuing impact on the consolidated results of operations. The adjustments are based on information available to the Company at this time. Accordingly, the adjustments are subject to change and the impact of such changes may be material. The unaudited pro forma results do not include any incremental cost savings that may result from the integration. The unaudited combined pro forma information is for informational purposes only and is not necessarily indicative of what the combined company's results actually would have been had the acquisition been completed as of the beginning of the periods as indicated. In addition, the unaudited pro forma information does not purport to project the future results of the combined company. Significant adjustments to the pro forma information below include recognition of non-recurring direct incremental acquisition costs in 2016 and exclusion of those costs from all other periods presented; amortization associated with an estimate of the acquired intangible assets and reduction of interest expense for fair value adjustments to debt. Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Revenue $ 5,301 $ 16,042 Net loss (198 ) (401 ) Net loss attributable to the Company (75 ) (109 ) Basic loss per Class A common stock (0.17 ) (0.26 ) Diluted loss per Class A common stock (1) (0.17 ) (0.26 ) (1) The calculation of diluted loss per Class A common stock excludes shares potentially issuable under stock-based incentive compensation plans and the exchange of Class B common stock with Class A common stock under the Exchange Agreement, as their effect, if included, would be anti-dilutive. |
Business Held For Sale
Business Held For Sale | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Business Held For Sale | BUSINESS HELD FOR SALE On July 18, 2018, we announced the agreement to sell our Natural Gas Solutions (NGS) business for a sales price of $375 million . NGS is part of our Turbomachinery & Process Solutions (TPS) segment and provides commercial and industrial products such as gas meters, chemical injection pumps, pipeline repair products and electric actuators. As of September 30, 2018 , the disposal group met the criteria to be classified as held for sale and was reported at its carrying amount which is lower than its fair value less costs to sell. The transactions closed during the first week of October 2018. The gain on sale will be recorded in the fourth quarter of 2018 after allocation of relevant foreign currency translation adjustments and goodwill related to this business. The following table presents information related to the assets and liabilities of the NGS business that was classified as held for sale and reported in 'all other current assets' and 'all other current liabilities' in our condensed consolidated and combined statement of financial position as of September 30, 2018 : Assets and liabilities of business held for sale Carrying value at September 30, 2018 Assets Current receivables $ 26 Inventories 27 Property, plant and equipment 29 Intangible assets 42 All other assets 1 Total assets held for sale $ 125 Liabilities Accounts payable $ 12 All other liabilities 10 Total liabilities held for sale $ 21 Total net assets held for sale $ 104 |
Current Receivables
Current Receivables | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Current Receivables | CURRENT RECEIVABLES Current receivables are comprised of the following: September 30, 2018 December 31, 2017 Customer receivables $ 4,789 $ 4,700 Related parties 675 801 Other 674 844 Total current receivables 6,138 6,345 Less: Allowance for doubtful accounts (329 ) (330 ) Total current receivables, net $ 5,809 $ 6,015 Customer receivables are recorded at the invoiced amount. Related parties primarily consists of amounts owed to us by GE. The "Other" category primarily consists of advance payments to suppliers, indirect taxes and other tax receivables. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory, Net [Abstract] | |
Inventories | INVENTORIES Inventories, net of reserves of $455 million and $360 million as of September 30, 2018 and December 31, 2017 , respectively, are comprised of the following: September 30, 2018 December 31, 2017 Finished goods $ 2,626 $ 2,577 Work in process and raw material 2,055 1,930 Total inventories, net $ 4,681 $ 4,507 We recorded inventory impairments of $12 million in each of the three months ended September 30, 2018 and 2017 , and $88 million and $31 million during the nine months ended September 30, 2018 and 2017 , respectively, as a result of certain restructuring activities initiated by the Company. Charges for inventory impairments are reported in the "Cost of goods sold" caption of the condensed consolidated and combined statements of income (loss). |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
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: Oilfield Services Oilfield Equipment Turbo-machinery & Process Solutions Digital Solutions Total Balance at December 31, 2016, gross $ 2,779 $ 3,852 $ 1,814 $ 1,989 $ 10,434 Accumulated impairment at December 31, 2016 (2,633 ) (867 ) — (254 ) (3,754 ) Balance at December 31, 2016 146 2,985 1,814 1,735 6,680 Acquisition (1) 13,052 — — — 13,052 Currency exchange and others 7 49 92 47 195 Balance at December 31, 2017 13,205 3,034 1,906 1,782 19,927 Purchase accounting adjustments (1) (154 ) 242 394 429 911 Currency exchange and others 3 (16 ) (24 ) (11 ) (48 ) Balance at September 30, 2018 $ 13,054 $ 3,260 $ 2,276 $ 2,200 $ 20,790 (1) Includes goodwill associated with the acquisition of Baker Hughes. The final determination of fair value of the assets and liabilities and the related goodwill associated with the acquisition of Baker Hughes was concluded in the second quarter of 2018. Of the total goodwill of $ 13,963 million resulting from the acquisition of Baker Hughes, $ 12,898 million is allocated to our Oilfield Services segment and the remainder to our other segments based on the expected benefit from the synergies of the acquisition. We test goodwill for impairment annually in the third quarter of each year using data as of July 1 of that year, which would include consideration of any segment realignment. The impairment test consists of two steps: in step one, the carrying value of the reporting unit is compared with its fair value; in step two, which is applied only when the carrying value is more than its fair value, the amount of goodwill impairment, if any, is derived by deducting the fair value of the reporting unit's assets and liabilities from the fair value of its equity, and comparing that amount with the carrying amount of goodwill. We determined fair values for each of the reporting units using a combination of the market approach and the income approach. We assessed the valuation methodologies based upon the relevance and available data and have weighted the results appropriately. 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. A market approach is limited to reporting units for which there are publicly traded companies that have the characteristics similar to our businesses. Under the income approach, fair value was determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We used our internal forecasts to estimate future cash flows and included an estimate of long-term future growth rates based on our most recent views of the long-term outlook for each business. 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 uncertainty inherent in the respective businesses and in our internally developed forecasts. Discount rates used in our reporting unit valuations ranged from 10% to 11.5% . Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods. We performed our annual impairment test of goodwill as of July 1, 2018 for all four of our reporting units. The step one impairment test was performed considering macroeconomic and industry conditions, overall financial performance of the reporting unit and long-term forecasts, among other factors, all of which require considerable judgment. Based on the results of our step one testing, the fair values of each of the four reporting units exceeded their carrying values; therefore, the second step of the impairment test was not required to be performed for any of our reporting units and no goodwill impairment was recognized. As of September 30, 2018 , we believe that the goodwill is recoverable for all four reporting units, however, there can be no assurances that the goodwill will not be impaired in future periods. OTHER INTANGIBLE ASSETS Intangible assets are comprised of the following: September 30, 2018 December 31, 2017 Gross Accumulated Net Gross Accumulated Net Technology $ 1,115 $ (517 ) $ 598 $ 1,177 $ (440 ) $ 737 Customer relationships 3,120 (922 ) 2,198 3,202 (819 ) 2,383 Capitalized software 1,123 (800 ) 323 1,130 (697 ) 433 Trade names and trademarks 702 (225 ) 477 757 (159 ) 598 Other 14 (1 ) 13 10 — 10 Finite-lived intangible assets 6,074 (2,465 ) 3,609 6,276 (2,115 ) 4,161 Indefinite-lived intangible assets (1) 2,222 — 2,222 2,197 — 2,197 Total intangible assets $ 8,296 $ (2,465 ) $ 5,831 $ 8,473 $ (2,115 ) $ 6,358 (1) Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name. 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 September 30, 2018 and 2017 was $112 million and $152 million , respectively, and $352 million and $301 million , for the nine months ended September 30, 2018 and 2017 , respectively. In addition, we incurred $11 million and $80 million of accelerated amortization during the three and nine months ended September 30, 2018 , respectively, primarily related to trade names and technology that we ceased to use during the nine months of 2018 as a result of the combination of Baker Hughes and GE O&G. Estimated amortization expense for the remainder of 2018 and each of the subsequent five fiscal years is expected to be as follows: Year Estimated Amortization Expense Remainder of 2018 $ 89 2019 354 2020 316 2021 272 2022 233 2023 215 |
Contract and Other Deferred Ass
Contract and Other Deferred Assets | 9 Months Ended |
Sep. 30, 2018 | |
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: September 30, 2018 December 31, 2017 Long-term product service agreements $ 608 $ 589 Long-term equipment contract revenue (1) 1,127 1,095 Contract assets (total revenue in excess of billings) (2) 1,735 1,684 Deferred inventory costs (3) 251 360 Non-recurring engineering costs 15 — Contract and other deferred assets $ 2,001 $ 2,044 (1) Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment. (2) Contract assets (total revenue in excess of billings) were $1,233 million as of January 1, 2017. (3) Deferred inventory costs were $276 million as of January 1, 2017, which represents cost deferral for shipped goods and other costs where the criteria for revenue recognition has not yet been met. Revenue recognized during the three months ended September 30, 2018 and 2017 from performance obligations satisfied (or partially satisfied) in previous periods related to our long-term service agreements was $3 million and $10 million , respectively, and $25 million and $50 million during the nine months ended September 30, 2018 and 2017 , 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. |
Progress Collections and Deferr
Progress Collections and Deferred Income | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
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. Three Months Ended September 30, Nine Months Ended September 30, Total Revenue 2018 2017 2018 2017 U.S. $ 1,675 $ 1,415 $ 4,718 $ 2,837 Non-U.S. 3,990 3,886 11,894 8,543 Total $ 5,665 $ 5,301 $ 16,612 $ 11,380 REMAINING PERFORMANCE OBLIGATIONS As of September 30, 2018 , the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $20.8 billion . We expect to recognize revenue of approximately 45% , 62% and 89% 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 INCOME Contract 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: September 30, 2018 December 31, 2017 Progress collections $ 1,433 $ 1,456 Deferred income 154 319 Progress collections and deferred income (contract liabilities) (1) $ 1,587 $ 1,775 (1) Progress collections and deferred income (contract liabilities) were $2,038 million at January 1, 2017. Revenue recognized during the three months ended September 30, 2018 and 2017 that was included in the contract liabilities at the beginning of the period was $281 million and $254 million , respectively, and $1,287 million and $1,289 million , during the nine months ended September 30, 2018 and 2017 , respectively. |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS Short-term and long-term borrowings are comprised of the following: September 30, 2018 December 31, 2017 Short-term borrowings Short-term bank borrowings $ 20 $ 171 Current portion of long-term borrowings — 639 Short-term borrowings from GE 936 1,124 Other borrowings 44 103 Total short-term borrowings $ 1,000 $ 2,037 Long-term borrowings 3.2% Senior Notes due August 2021 $ 524 $ 526 2.773% Senior Notes due December 2022 1,245 1,244 8.55% Debentures due June 2024 132 135 3.337% Senior Notes due December 2027 1,342 1,342 6.875% Notes due January 2029 295 308 5.125% Notes due September 2040 1,307 1,311 4.08% Senior Notes due December 2047 1,336 1,337 Capital leases 107 87 Other long-term borrowings 5 22 Total long-term borrowings 6,293 6,312 Total borrowings $ 7,293 $ 8,349 BHGE LLC has a five -year $3 billion committed unsecured revolving credit facility (the 2017 Credit Agreement) with commercial banks maturing in July 2022. The 2017 Credit Agreement contains certain customary representations and warranties, certain affirmative covenants and no negative covenants. Upon the occurrence of certain events of default, our obligations under the 2017 Credit Agreement may be accelerated. Such events of default include payment defaults to lenders under the 2017 Credit Agreement, and other customary defaults. No such events of default have occurred. During the nine months ended September 30, 2018 , there were no borrowings under the 2017 Credit Agreement. BHGE LLC has a commercial paper program under which it may issue from time to time up to $3 billion in commercial paper with maturities of no more than 397 days. At September 30, 2018 , we had no borrowings outstanding under the commercial paper program. The maximum combined borrowing at any time under both the 2017 Credit Agreement and the commercial paper program is $3 billion . Concurrent with the Transactions associated with the acquisition of Baker Hughes on July 3, 2017, Baker Hughes Co-Obligor, Inc. became a co-obligor, jointly and severally with BHGE LLC, on our registered debt securities. This co-obligor is a 100% -owned finance subsidiary of BHGE LLC that was incorporated for the sole purpose of serving as a co-obligor of debt securities and has no assets or operations other than those related to its sole purpose. Baker Hughes Co-Obligor, Inc. is also a co-obligor of the $3,950 million senior notes issued in December 2017 by BHGE LLC in a private placement and subsequently registered in January 2018. The estimated fair value of total borrowings at September 30, 2018 and December 31, 2017 was $6,983 million and $8,466 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 17. Related Party Transactions" for additional information on the short-term borrowings from GE. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefits Plans | EMPLOYEE BENEFIT PLANS Certain of our U.S. employees are covered under various U.S. GE employee benefit plans, including GE's retirement plans (pension, retiree health and life insurance, and savings benefit plans). In addition, certain United Kingdom (UK) employees participate in the GE UK Pension Plan. We are allocated relevant participation costs for these GE employee benefit plans as part of multi-employer plans. As such, we have not recorded any liabilities associated with our participation in these plans. Expenses associated with our participation in these plans was $46 million and $35 million in the three months ended September 30, 2018 and 2017 , respectively, and $126 million and $106 million in the nine months ended September 30, 2018 and 2017 , respectively. In addition to these GE plans, certain of our employees are also covered by company sponsored employee defined benefit plans. These defined benefit plans include seven U.S. plans and six 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. These defined benefit plans generally provide benefits to employees based on formulas recognizing length of service and earnings. The components of net periodic cost (benefit) of plans sponsored by us are as follows for the three and nine months ended September 30, 2018 and 2017 : Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Service cost $ 5 $ 16 $ 15 $ 24 Interest cost 18 18 54 32 Expected return on plan assets (30 ) (31 ) (90 ) (51 ) Amortization of net actuarial loss 2 4 6 9 Net periodic cost (benefit) $ (5 ) $ 7 $ (15 ) $ 14 The service cost component of the net periodic cost (benefit) is included in operating income (loss) and all other components are included in non operating income (loss) in our condensed consolidated and combined statements of income (loss). |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (U.S. tax reform). In 2017, the impact of U.S. tax reform was recorded on a provisional basis as the legislation provides for additional guidance to be issued by the U.S. Department of the Treasury on several provisions including the computation of the transition tax which could impact the calculation of the transition tax charge and the revaluation of deferred taxes. In addition, analysis performed and conclusions reached as part of the tax return filing process and additional guidance on accounting for tax reform could affect the provisional amount. Additionally, as part of U.S. tax reform, the U.S. has enacted a tax on "base eroding" payments from the U.S. (i.e. Base Erosion Anti-Abuse Tax (“BEAT”)) and a minimum tax on foreign earnings (global intangible low-taxed income). Due to the fact certain aspects of the new law and the effect on our operations are uncertain and the accounting rules associated with this provision have not been resolved, we did not make a provisional accrual for the deferred tax aspects of this provision and have not yet made an accounting policy election on the deferred tax treatment of this tax. For the quarter ended September 30, 2018 , income tax expense was $110 million compared to a tax expense of $114 million for the prior year quarter. The difference between the U.S. statutory tax rate of 21% and the current effective tax rate is primarily due to $82 million related to losses with no tax benefit due to valuation allowances. For the nine months ended September 30, 2018 , income tax expense was $86 million compared to a tax expense of $112 million for the nine months ended September 30, 2017 . The difference between the U.S. statutory tax rate of 21% and the current effective tax rate is primarily due to $168 million related to losses with no tax benefit due to valuation allowances and $22 million of withholding taxes in certain jurisdictions, partially offset by the net tax benefit of $124 million related to U.S. tax reform. The first six months of the prior year period reflects 100% of the taxes associated with U.S. and non-U.S. earnings of the GE O&G business. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2018 | |
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 Class A common stock and Class B common stock shares outstanding as of September 30, 2018 is 412 million and 688 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 BHGE 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 BHGE LLC to receive distributions on an equal amount of the quarterly dividend paid by the Company. During the quarter, the Company declared and paid a regular dividend of $0.18 per share to holders of record of the Company's Class A common stock. The following table presents the changes in the number of shares outstanding (in thousands): Class A Common Stock Class B Common Stock Balance at December 31, 2017 422,208 706,985 Issue of shares upon vesting of restricted stock units (1) 818 — Issue of shares on exercises of stock options (1) 636 — Stock repurchase program (2) (3) (11,501 ) (19,241 ) Balance at September 30, 2018 412,161 687,743 (1) Share amounts reflected above are net of shares withheld to satisfy the employee's tax withholding obligation. (2) On November 2, 2017, our board of directors authorized BHGE LLC to repurchase up to $3 billion of its common units from the Company and GE. The proceeds of this repurchase are to be used by BHGE to repurchase Class A common stock of the Company on the open market, which if fully implemented would result in the repurchase of approximately $1.1 billion of Class A common stock. The Class B common stock of the Company, paired with common units, will be repurchased by the Company at par value. The $3 billion repurchase authorization is the aggregate authorization for repurchases of Class A common stock and Class B common stock together with its paired common unit. At September 30, 2018 , BHGE LLC had authorization remaining to repurchase up to approximately $1.5 billion of its common units from BHGE and GE. (3) During the nine months ended September 30, 2018 , we repurchased and canceled 11,500,992 shares of Class A common stock for a total of $374 million and 19,241,160 shares of Class B common stock from GE together with the paired common units of BHGE LLC for $626 million . We did not repurchase any shares of common stock during the three months ended September 30, 2018 . ACCUMULATED OTHER COMPREHENSIVE LOSS (AOCL) The following tables present the changes in accumulated other comprehensive loss, net of tax: Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss Balance at December 31, 2017 $ 1 $ (682 ) $ 1 $ (23 ) $ (703 ) Other comprehensive income (loss) before reclassifications (2 ) (312 ) (1 ) 5 (310 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — — — Deferred taxes (1 ) — — (2 ) (3 ) Other comprehensive income (loss) (3 ) (312 ) (1 ) 3 (313 ) Less: Other comprehensive income (loss) attributable to noncontrolling interests (2 ) (195 ) — 2 (195 ) Balance at September 30, 2018 $ — $ (799 ) $ — $ (22 ) $ (821 ) Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss Balance at December 31, 2016 $ — $ (1,795 ) $ (10 ) $ (83 ) $ (1,888 ) Other comprehensive income (loss) before reclassifications 40 202 12 (11 ) 243 Amounts reclassified from accumulated other comprehensive income (loss) (39 ) — 9 (1 ) (31 ) Deferred taxes 1 (10 ) (4 ) 6 (7 ) Other comprehensive income (loss) 2 192 17 (6 ) 205 Less: Other comprehensive income attributable to noncontrolling interests 2 166 5 (1 ) 172 Less: Other adjustments — — — 13 13 Less: Reallocation of AOCL based on ownership of GE and previous Baker Hughes shareholders — (1,170 ) (1 ) (63 ) (1,234 ) Balance at September 30, 2017 $ — $ (599 ) $ 3 $ (38 ) $ (634 ) The amounts reclassified from accumulated other comprehensive loss during the nine months ended September 30, 2018 and 2017 represent realized gains on investment securities, foreign exchange contracts on our cash flow hedges (see "Note 15. Financial Instruments" for additional details) and amortization of net actuarial gain (loss) and prior service credit, which are included in the computation of net periodic pension cost (see "Note 11. Employee Benefit Plans" for additional details). These reclassifications are recorded across the various cost and expense line items within the condensed consolidated and combined 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 September 30, 2018 , GE owned approximately 62.5% of BHGE LLC and this represents the majority of the noncontrolling interest balance reported within equity. September 30, 2018 December 31, 2017 GE's interest in BHGE LLC $ 22,718 $ 23,993 Other noncontrolling interests 105 140 Total noncontrolling interests $ 22,823 $ 24,133 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
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: Three Months Ended September 30, Nine Months Ended September 30, (In millions, except per share amounts) 2018 2017 2018 2017 Net income (loss) $ 38 $ (357 ) $ (19 ) $ (311 ) Less: Net income attributable to GE O&G pre-merger — — — 42 Less: Net income (loss) attributable to noncontrolling interests 25 (223 ) (83 ) (219 ) Net income (loss) attributable to BHGE $ 13 $ (134 ) $ 64 $ (134 ) Weighted average shares outstanding: Class A basic 412 428 416 428 Class A diluted 414 428 417 428 Net income (loss) per share attributable to common stockholders: Class A basic $ 0.03 $ (0.31 ) $ 0.15 $ (0.31 ) Class A diluted $ 0.03 $ (0.31 ) $ 0.15 $ (0.31 ) As of July 3, 2017 , GE, BHGE and BHGE LLC entered into an Exchange Agreement under which GE is entitled to exchange its holding in Class B common stock and units of BHGE LLC 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 BHGE, 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 nine months ended September 30, 2018 , 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. There were approximately four million options that were excluded from our diluted EPS calculation because their effect is antidilutive. These options were outstanding but excluded from the calculation because the exercise price exceeded the average market price of the Class A common shares. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
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. September 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Net Balance Level 1 Level 2 Level 3 Net Balance Assets Derivatives $ — $ 72 $ — $ 72 $ — $ 150 $ — $ 150 Investment securities 63 — 296 359 81 8 304 393 Total assets 63 72 296 431 81 158 304 543 Liabilities Derivatives — (77 ) — (77 ) — (95 ) — (95 ) Total liabilities $ — $ (77 ) $ — $ (77 ) $ — $ (95 ) $ — $ (95 ) There were no transfers between Level 1, 2 and 3 during the nine months ended September 30, 2018 . The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities: Balance at December 31, 2017 $ 304 Purchases 47 Proceeds at maturity (55 ) Balance at September 30, 2018 $ 296 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 and combined statement of income (loss) on account of any Level 3 instrument still held at the reporting date. At September 30, 2018 and December 31, 2017, we held $156 million and $127 million , respectively, of these investment securities on behalf of GE. September 30, 2018 December 31, 2017 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 (a) $ 296 $ — $ — $ 296 $ 310 $ 2 $ — $ 312 Equity securities (b) 63 — — 63 81 — — 81 Total $ 359 $ — $ — $ 359 $ 391 $ 2 $ — $ 393 (a) All of our non-U.S. debt securities are classified as available for sale instruments and mature within three years. (b) These securities have readily determinable fair values and subsequent to the adoption of ASU 2016-01 on January 1, 2018, changes in fair value are recorded to earnings. Gross unrealized gains (losses) recorded to earnings related to these securities were $(9) million and $41 million for the nine months ended September 30, 2018 and 2017, respectively. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS Our financial instruments include cash, cash equivalents and restricted cash, current receivables, 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 September 30, 2018 and December 31, 2017 approximates their carrying value as reflected in our condensed consolidated and combined financial statements. For further information on the fair value of our debt, see "Note 10. 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. September 30, 2018 December 31, 2017 Assets (Liabilities) Assets (Liabilities) Derivatives accounted for as hedges Currency exchange contracts $ — $ (2 ) $ 6 $ — Derivatives not accounted for as hedges Currency exchange contracts 72 (73 ) 144 (95 ) Commodity derivatives — (2 ) — — Total derivatives $ 72 $ (77 ) $ 150 $ (95 ) 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. RISK MANAGEMENT STRATEGY We buy, manufacture and sell components and products as well as provide services across global markets. These activities expose us to changes in foreign currency exchange rates and commodity prices, which can adversely affect revenues earned and costs of operating our business. When the currency in which we sell equipment differs from the primary currency (known as its functional currency) and the exchange rate fluctuates, it will affect the revenue we earn on the sale. These sales and purchase transactions also create receivables and payables denominated in foreign currencies, along with other monetary assets and liabilities, which expose us to foreign currency gains and losses based on changes in exchange rates. Changes in the price of a raw material that we use in manufacturing can affect the cost of manufacturing. We use derivatives to mitigate or eliminate these exposures. 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. 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. Some economic hedges are used when changes in the carrying amount of the hedged item are already recorded in earnings in the same period as the derivative, making hedge accounting unnecessary. For some other types of economic hedges, changes in the fair value of the derivative are recorded in earnings currently but changes in the value of the forecasted foreign currency cash flows are only recognized in earnings when they occur. As a result, even though the derivative is an effective economic hedge, there is a net effect on earnings in each period due to differences in the timing of earnings recognition between the derivative and the hedged item. These derivatives are marked to fair value through earnings each period. 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 $7.2 billion and $10.2 billion at September 30, 2018 and December 31, 2017 , 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 corresponding net notional amounts were $2.8 billion and $3.3 billion at September 30, 2018 and December 31, 2017 , respectively. The table below provides additional information about how derivatives are reflected in our condensed consolidated and combined financial statements. Carrying amount related to derivatives September 30, 2018 December 31, 2017 Derivative assets $ 72 $ 150 Derivative liabilities (77 ) (95 ) Net derivatives $ (5 ) $ 55 EFFECTS OF DERIVATIVES ON EARNINGS All derivatives are marked to fair value on our condensed consolidated and combined statement of financial position, whether they are designated in a hedging relationship for accounting purposes or are used as economic hedges. As discussed in the previous sections, each type of hedge affects the financial statements differently. In some economic hedges, both the hedged item and the hedging derivative offset in earnings in the same period. In other economic hedges, the hedged item and the hedging derivative offset in earnings in different periods. In cash flow, the effective portion of the hedging derivative is offset in separate components of equity and ineffectiveness is recognized in earnings. The table below summarizes these offsets and the net effect on pre-tax earnings. Three Months Ended September 30, Nine Months Ended September 30, Cash Flow Hedges Economic Hedges Cash Flow Hedges Economic Hedges 2018 2017 2018 2017 2018 2017 2018 2017 Effect on hedging instrument $ (2 ) $ 9 $ (13 ) $ 144 $ (1 ) $ 12 $ (6 ) $ 145 Effect on underlying 2 (9 ) 1 (174 ) 1 (12 ) (24 ) (174 ) Effect on earnings (1) $ — $ — $ (12 ) $ (30 ) $ — $ — $ (30 ) $ (29 ) (1) For cash flow hedges, the effect on earnings, if any, is primarily related to ineffectiveness. For economic hedges on forecasted transactions, the effect on earnings is substantially offset by future earnings on economically hedged items. 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 this activity by hedging instrument. Three Months Ended September 30, Nine Months Ended September 30, Gain (Loss) Recognized in AOCI Gain (Loss) Reclassified from AOCI to Earnings Gain (Loss) Recognized in AOCI Gain (Loss) Reclassified from AOCI to Earnings 2018 2017 2018 2017 2018 2017 2018 2017 Currency exchange contracts $ (2 ) $ 9 $ — $ — $ (1 ) $ 12 $ — $ (9 ) We expect to transfer $1 million to earnings as an expense in the next 12 months contemporaneously with the earnings effects of the related forecast transactions. At September 30, 2018 and December 31, 2017 , the maximum term of derivative instruments that hedge forecast transactions was two -years and three -years, respectively. See "Note 13. Equity" for additional information about reclassification out of accumulated other comprehensive income. For cash flow hedges, the amount of ineffectiveness in the hedging relationship and amount of the changes in fair value of the derivatives that are not included in the measurement of ineffectiveness were insignificant for each reporting period. 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. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Our operating segments are organized based on the nature of markets and customers. We report our operating results through four operating segments that consists of similar products and services within each segment as described below. OILFIELD SERVICES (OFS) OFS 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) OFE 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. OFE 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) TPS 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 TPS 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) DS provides equipment and services for a wide range of industries, including oil & gas, power generation, aerospace, metals, and transportation. The offerings include sensor-based measurement, non-destructive testing and inspection, turbine, generator and plant controls and condition monitoring, as well as pipeline integrity solutions. SEGMENT RESULTS 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 results of operations for the nine months ended September 30, 2018 may not be comparable to the results of operations for the nine months ended September 30, 2017 as it excludes the results of Baker Hughes prior to the date of the business combination. Three Months Ended September 30, Nine Months Ended September 30, Segments revenue 2018 2017 2018 2017 Oilfield Services $ 2,993 $ 2,661 $ 8,554 $ 3,101 Oilfield Equipment 631 613 1,912 2,011 Turbomachinery & Process Solutions 1,389 1,414 4,233 4,644 Digital Solutions 653 614 1,913 1,624 Total $ 5,665 $ 5,301 $ 16,612 $ 11,380 The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and equity in loss of affiliate and before the following: net interest expense, net other non operating income (loss), corporate expenses, restructuring, impairment and other charges, inventory impairments, merger and related costs and certain gains and losses not allocated to the operating segments. Three Months Ended September 30, Nine Months Ended September 30, Segment income (loss) before income taxes 2018 2017 2018 2017 Oilfield Services $ 231 $ 88 $ 561 $ (35 ) Oilfield Equipment 6 (41 ) (12 ) 26 Turbomachinery & Process Solutions 132 134 364 508 Digital Solutions 106 77 275 240 Total segment 475 258 1,189 739 Corporate (98 ) (89 ) (294 ) (279 ) Inventory impairment (1) (12 ) (12 ) (88 ) (31 ) Restructuring, impairment and other (66 ) (191 ) (374 ) (292 ) Merger and related costs (17 ) (159 ) (113 ) (310 ) Other non operating income, net 6 4 51 62 Interest expense, net (55 ) (41 ) (164 ) (75 ) Total $ 233 $ (230 ) $ 206 $ (186 ) (1) Charges for inventory impairments are reported in the "Cost of goods sold" caption of the condensed consolidated and combined statements of income (loss). |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Following the Transactions, GE and its affiliates have provided and continue to provide a variety of services to us. In connection with the Transactions on July 3, 2017 , we entered into various agreements with GE and its affiliates that govern our relationship with GE following the Transactions including an Intercompany Services Agreement pursuant to which GE and its affiliates and the Company provide certain services to each other. GE provides certain administrative services, GE proprietary technology and use of certain GE trademarks in consideration for a payment of $55 million per year. Costs of $14 million and $42 million , respectively, related to the Intercompany Services Agreement were incurred during the three and nine months ended September 30, 2018 . GE may also provide us with certain additional administrative services under the Intercompany Services Agreement, not included as consideration for the $55 million per year payment, and the fees for such services are based on actual usage of such services and historical GE intercompany pricing. In addition, we provide GE and its affiliates with confidential access to certain of our proprietary technology and related developments and enhancements thereto related to GE's operations, products or service offerings. Prior to the Transactions, GE and its affiliates provided a variety of services and funding to us. The cost of these services was either (a) recognized through our allocated portion of GE's corporate overhead; or (b) billed directly to us. Costs of $76 million for the nine months ended September 30, 2017 were recorded in our condensed consolidated and combined statement of income (loss) in respect of services provided by GE and its affiliates prior to the close of the Transactions. We sold $74 million and $133 million of products and services to GE and its affiliates during the three months ended September 30, 2018 and 2017 , respectively, and $258 million and $507 million , during the nine months ended September 30, 2018 and 2017 , respectively. Purchases from GE and its affiliates were $347 million and $345 million during the three months ended September 30, 2018 and 2017 , respectively, and $1,273 million and $1,026 million during the nine months ended September 30, 2018 and 2017 , respectively. EMPLOYEE BENEFITS Certain of our employees are covered under various GE sponsored employee benefit plans, including GE's retirement plans (pension, retiree health and life insurance, and savings benefit plans) and active health and life insurance benefit plans. Further details are provided in "Note 11. Employee Benefit Plans." RELATED PARTY BALANCES In connection with the Transactions, we were required to repay any cash in excess of $100 million , net of any third-party debt in GE O&G, to GE. We continue to hold this cash on behalf of GE as such 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. Accordingly, on July 3, 2017, we executed a promissory note with GE. There is no maturity date on the promissory note, but we remain obligated to repay GE such excess cash together with any income or loss we may incur on it, therefore, this obligation is reflected as short-term borrowings. As of September 30, 2018 , of the amount due to GE of $936 million , $780 million was held in the form of cash and $156 million was held in the form of investment securities. A corresponding liability is reported in short-term borrowings in the condensed consolidated and combined statements of financial position. Additionally, the Company has $508 million and $575 million of accounts payable at September 30, 2018 and December 31, 2017 , respectively, for services provided by GE in the ordinary course of business. TRADE PAYABLES ACCELERATED PAYMENT PROGRAM Our North American operations participate in accounts payable programs with GE Capital. Invoices are settled with vendors per our payment terms to obtain cash discounts. GE Capital provides funding for the period from the date at which an invoice is eligible for a cash discount through the final termination date for invoice settlement. Our liability associated with the funded participation in the accounts payable programs, which is presented as accounts payable within the condensed consolidated and combined statements of financial position, was $467 million and $293 million as of September 30, 2018 and December 31, 2017 , respectively. OTHER Prior to the Transactions, GE provided guarantees, letters of credit, and other support arrangements on our behalf. We provide guarantees to GE Capital on behalf of some customers who have entered into financing arrangements with GE Capital. INCOME TAXES At closing, BHGE, GE and BHGE LLC entered into a Tax Matters Agreement. The Tax Matters Agreement governs the administration and allocation between the parties of tax liabilities and benefits arising prior to, as a result of, and subsequent to the Transactions, including certain restructuring transactions in connection therewith, and the respective rights, responsibilities and obligations of GE and BHGE, with respect to various other tax matters. GE is responsible for certain taxes related to the formation of the transaction undertaken by GE and Baker Hughes and their respective subsidiaries. GE has assumed approximately $33 million of tax obligations of Baker Hughes related to the formation of the transaction. Following the closing of the Transactions, BHGE or BHGE LLC (or their respective subsidiaries) may be included in group tax returns with GE. To the extent included in such group tax returns, (i) BHGE or BHGE LLC is required to make tax sharing payments to GE in an amount intended to approximate the amount that such entity would have paid if it had not been included in such group tax returns and had filed separate tax returns, and (ii) GE is required to pay BHGE or BHGE LLC to the extent such separate tax returns include net operating losses that are used to reduce taxes payable by GE with respect to the applicable group tax return. The Tax Matters Agreement also provides for the sharing of certain tax benefits (i) arising from the Transactions, including restructuring transactions, and (ii) resulting from allocations of tax items by BHGE LLC. GE is entitled to 100% of these tax benefits to the extent that GE has borne certain taxes related to the formation of the transaction. Thereafter, these tax benefits will be shared by GE and BHGE in accordance with their economic ownership of BHGE LLC, which will initially be approximately 62.5% and approximately 37.5% , respectively. The sharing of tax benefits generally is expected to result in cash payments by BHGE LLC to its members. Any such cash payments may be subject to adjustment based on certain subsequent events, including tax audits or other determinations as to the availability of the tax benefits with respect to which such cash payments were previously made. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
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 arbitral 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. The Company is vigorously contesting the claims made by TRIUVA in the Houston Federal Court. At this time, we are not able to predict the outcome of the claims asserted in the Houston Federal Court. 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 September 17, 2015, Rapid Completions and Packers Plus Energy Services Inc. sued Baker Hughes Canada Company in the Canada Federal Court on the related Canadian patent 2,412,072. 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. Trial on the validity of asserted claims from Canada patent 2,412,072, was completed March 9, 2017. On December 7, 2017, the Canadian Court issued its judgment finding the patent claims asserted from Canada patent 2,412,072 against Baker Hughes Canada Company were invalid. On January 5, 2018, Rapid Completions filed its Notice of Appeal of the Canadian Court’s judgment of invalidity. At this time, we are not able to predict the outcome of these claims. Following consummation of the Transactions, two purported holders of shares of Baker Hughes common stock, representing a total of 1,875,000 shares of common stock of Baker Hughes, filed petitions in the Court of Chancery of the State of Delaware seeking appraisal for their shares pursuant to Section 262 of the Delaware General Corporation Law. The action is captioned as follows: GKC Strategic Value Master Fund, LP F/K/A GKC Appraisal Rights Master Fund, LP and Walleye Trading LLC v. Baker Hughes Incorporated , Case No. 2017-0769. On July 12, 2018, the parties entered a Confidential Settlement Agreement and Release of all claims asserted by the two shareholders. The Settlement Agreement does not have a material impact on the Company's financial statements. On February 17, 2017, GE Infrastructure Sensing, Inc. (now known as GE Infrastructure Sensing, LLC) (GEIS), a subsidiary of the Company, was served with a lawsuit filed in the Eastern District of New York by a company named Saniteq LLC claiming compensatory damages totaling $500 million plus punitive damages of an unspecified amount. The complaint is captioned Saniteq LLC v. GE Infrastructure Sensing, Inc ., No. 17-cv-771 (E.D.N.Y 2017). The complaint generally alleges that GEIS breached a contract being negotiated between the parties and misappropriated unspecified trade secrets. On September 13, 2018, the District Court entered an Order granting GEIS’ Motion for Summary Judgment dismissing Saniteq LLC’s claims in their entirety as a matter of law. Saniteq LLC filed a notice of appeal from the District Court’s Judgment. At this time, we are not able to predict the outcome of these claims. 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, BHGE's insurer has accepted coverage and is defending the Company in the expertise proceeding. In late November 2017, staff of the Boston office of the SEC notified GE that they are conducting an investigation of GE’s revenue recognition practices and internal controls over financial reporting related to long-term service agreements. The scope of the SEC’s request may include some BHGE contracts, expected to be mainly in our TPS business. We have provided documents to GE and are cooperating with them in their response to the SEC. At this time, we are not able to predict the outcome of this review. 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 BHGE 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). 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. IEC alleges that its total damages may exceed $500 million . The Company intends to vigorously contest the claims made by IEC in the arbitration and litigation proceedings. At this time, we are not able to predict the outcome of these claims. 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: Balance at December 31, 2017, and 2016, respectively $ 164 $ 74 Provisions 26 27 Expenditures (83 ) (33 ) Other (1) 128 97 Balance at September 30, 2018, and 2017, respectively $ 235 $ 165 (1) Primarily related to the acquisition of Baker Hughes. 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, which totaled approximately $3.5 billion at September 30, 2018 . 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. |
Restructuring, Impairment and O
Restructuring, Impairment and Other | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring, Impairment and Other | RESTRUCTURING, IMPAIRMENT AND OTHER We recorded restructuring, impairment and other charges of $66 million and $191 million during the three months ended September 30, 2018 and 2017 , respectively, and $374 million and $292 million during the nine months ended September 30, 2018 and 2017 . Details of these charges are discussed below. RESTRUCTURING AND IMPAIRMENT CHARGES In the current and prior periods, we approved various restructuring plans globally, mainly to consolidate manufacturing and service facilities, rationalize product lines and rooftops, and reduce headcount across various functions. As a result, we recognized a charge of $49 million and $191 million for the three months ended September 30, 2018 and 2017 , respectively, and $242 million and $264 million for the nine months ended September 30, 2018 and 2017 , respectively. These restructuring initiatives will generate charges post September 30, 2018 , and the related estimated remaining charges are approximately $107 million . The amount of costs not included in the reported segment results is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Oilfield Services $ 20 $ 118 $ 119 $ 141 Oilfield Equipment 8 31 26 41 Turbomachinery & Process Solutions 17 16 56 38 Digital Solutions 2 13 18 27 Corporate 2 13 23 17 Total $ 49 $ 191 $ 242 $ 264 These costs were primarily related to product line terminations, plant closures and related expenses such as property, plant and equipment impairments, contract terminations and costs of assets' and employees' relocation, employee-related termination benefits, and other incremental costs that were a direct result of the restructuring plans. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Property, plant & equipment, net $ 18 $ 68 $ 55 $ 80 Employee-related termination expenses 15 87 114 126 Asset relocation costs 7 2 20 7 Environmental remediation costs — 1 3 8 Contract termination fees 5 16 33 21 Other incremental costs 4 17 17 22 Total $ 49 $ 191 $ 242 $ 264 OTHER CHARGES Other charges included in "Restructuring, impairment and other" of the condensed consolidated and combined statements of income (loss) were $17 million and nil in the three months ended September 30, 2018 and 2017 , respectively, and $132 million and $28 million in the nine months ended September 30, 2018 and 2017 , respectively. Other charges primarily include accelerated amortization of $11 million and $80 million for the three and nine months ended September 30, 2018 , respectively, related to trade names and technology in our Oilfield Services segment. During the nine months ended September 30, 2018 , other charges also includes $25 million related to litigation matters recorded at Corporate and costs of $12 million to exit certain operations that impacted our TPS and OFS segments. During the nine months ended September 30, 2017 , other charges include currency devaluation charges of $12 million largely driven by significant currency devaluations in Angola and Nigeria. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On July 18, 2018, the Company announced the agreement to sell its Natural Gas Solution (NGS) business for a sales price of $375 million . NGS is part of our TPS segment and provides commercial and industrial products such as gas meters, chemical injection pumps, pipeline repair products and electric actuators. The transactions closed during the first week of October 2018. On October 8, 2018, the Company and Abu Dhabi National Oil Company (ADNOC) signed a strategic partnership agreement. As part of the agreement, the Company will acquire a five percent stake in ADNOC Drilling for a cash consideration of $500 million . This acquisition is expected to close in the fourth quarter of 2018 subject to customary closing conditions and appropriate regulatory approvals. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION BHGE, through two wholly owned subsidiaries, holds a minority economic interest in BHGE LLC, however, we conduct and exercise full control over all activities of BHGE LLC, without the approval of any other member. Accordingly, we consolidate the financial results of BHGE LLC and report a noncontrolling interest in our condensed consolidated and combined financial statements for the economic interest in BHGE LLC not held by us. We consider BHGE LLC to be a consolidated variable interest entity (VIE). We are a holding company and have no material assets other than our ownership interest in BHGE LLC and certain intercompany and tax related balances. BHGE 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. The results of operations for the nine months ended September 30, 2018 may not be comparable to the results of operations for the nine months ended September 30, 2017 as it excludes the results of Baker Hughes prior to the date of the business combination. The accompanying unaudited condensed consolidated and combined 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. All intercompany accounts and transactions have been eliminated. In the opinion of management, the condensed consolidated and combined financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows of the Company and its 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, effective July 3, 2017 , following consummation of the Transactions. 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 subsequent periods will also be presented on a consolidated basis. For all periods prior to July 3, 2017 , the Company's financial statements were prepared on a combined basis. The combined financial statements combine certain accounts of GE and its subsidiaries that were historically managed as part of its Oil & Gas business and contributed to BHGE LLC as part of the Transactions (refer to "Note 3. Business Acquisition" for further details on the Transactions). Additionally, it also includes certain assets, liabilities and results of operations of other businesses of GE that were also contributed to BHGE LLC as part of the Transactions on a fully retrospective basis (in accordance with the guidance applicable to transactions between entities under common control) based on their carrying values, as reflected in the accounting records of GE. The condensed consolidated and combined statements of income (loss) reflect intercompany expense allocations made to us by GE for certain corporate functions and for shared services provided by GE. See "Note 17. Related Party Transactions" for further information on expenses allocated by GE. The historical financial results in the condensed consolidated and combined financial statements presented may not be indicative of the results that would have been achieved had GE O&G operated as a separate, stand-alone entity during those periods. In the notes to unaudited condensed consolidated and combined 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. |
Cash And Equivalents | Cash, Cash Equivalents and Restricted Cash As of September 30, 2018 , and December 31, 2017 , we had $1,119 million and $1,190 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 is $593 million and $764 million , as of September 30, 2018 and December 31, 2017 , respectively, held on behalf of GE. Cash, cash equivalents and restricted cash includes a total of $780 million and $997 million of cash at September 30, 2018 and December 31, 2017 , respectively, held on behalf of GE, and a corresponding liability is reported in short-term borrowings. See "Note 17. Related Party Transactions" for further details. As a result of adopting Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-18, Statement of Cash Flows: Restricted Cash , we reclassified our restricted cash of $7 million from ‘all other assets’ to cash, cash equivalents and restricted cash as of December 31, 2017. At September 30, 2018 , such cash is no longer considered restricted in nature. |
Revenue | Revenue from Sale of Equipment Performance Obligations Satisfied Over Time We recognize revenue on agreements for sales of goods manufactured to unique customer specifications, including long-term construction projects, on an over-time basis utilizing cost inputs as the measurement criteria in assessing the progress toward completion. Our estimate of costs to be incurred to fulfill our promise to a customer is based on our history of manufacturing or constructing similar assets for customers and is updated routinely to reflect changes in quantity or pricing of the inputs. We begin to recognize revenue on these contracts when the contract specific inventory becomes customized for a customer, which is reflective of our initial transfer of control of the incurred costs. We provide for potential losses on any of these agreements when it is probable that we will incur the loss. Our billing terms for these over-time contracts vary, but are generally based on achieving specified milestones. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We recognize revenue for non-customized equipment at the point in time that the customer obtains control of the good, which is no earlier than when the customer has physical possession of the product. Equipment for which we recognize revenue at a point in time include goods we manufacture on a standardized basis for sale to the market. We use proof of delivery for certain large equipment with more complex logistics associated with the shipment, whereas the delivery of other equipment is determined based on historical data of transit times between regions. On occasion we sell products with a right of return. We use our accumulated experience to estimate and provide for such returns when we record the sale. In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have concluded that the customer has control of the goods and that acceptance is likely to occur. Our billing terms for these point in time equipment contracts vary, but are generally based on shipment of the goods to the customer. Revenue from Sale of Services Performance Obligations Satisfied Over Time Revenue on Oilfield Services is recognized on an overtime basis as performed. We also sell product services under long-term product maintenance or extended warranty agreements in our Turbomachinery & Process Solutions and Oilfield Equipment segments. These agreements require us to maintain the customers' assets over the service agreement contract terms, which generally range from 10 to 20 years. In general, these are contractual arrangements to provide services, repairs, and maintenance of a covered unit (gas turbines for mechanical drive or power generation, primarily on LNG applications, drilling rigs). These services are performed at various times during the life of the contract, thus the costs of performing services are incurred on other than a straight-line basis. We recognize related sales based on the extent of our progress toward completion measured by actual costs incurred in relation to total expected costs. We provide for any loss that we expect to incur on any of these agreements when that loss is probable. BHGE utilizes historical customer data, prior product performance data, statistical analysis, third-party data, and internal management estimates to calculate contract-specific margins. In certain contracts, the total transaction price is variable based on customer utilization, which is excluded from the contract margin until the period that the customer has utilized to appropriately reflect the revenue activity in the period earned. Our billing terms for these contracts are generally based on the occurrence of a major maintenance event within the contract or asset utilization (i.e. usage per hour). The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We sell certain tangible products, largely spare equipment, through our services business. We recognize revenues for this equipment at the point in time that the customer obtains control of the good, which is at the point in time we deliver the spare part to the customer. Our billing terms for these point in time service contracts vary, but are generally based on shipment of the goods to the customer. Impact of Adoption As a result of the adoption of the standard, the timing of revenue recognition on our long-term product service agreements is affected. Although we continue to recognize revenue over time on these contracts, there are changes to how contract modifications, termination clauses and purchase options are accounted for by us. In particular, under the previous standard, the cumulative impact from a contract modification on revenue already recorded is recognized in the period in which the modification is agreed. Under the new standard, the impact from certain types of modifications is recognized over the remaining life of the contract. |
New Accounting Standards Adopted and To Be Adopted | NEW ACCOUNTING STANDARDS ADOPTED On January 1, 2018, we adopted the FASB ASU No. 2014-09, Revenue from Contracts with Customers, and the related amendments (ASC 606). We elected to adopt the new standard using the full retrospective method, where the standard was applied to each prior reporting period presented and the cumulative effect of applying the standard was recognized at January 1, 2016. In addition, we elected the practical expedient for contract modifications, which essentially means that the terms of the contract that existed at the beginning of the earliest period presented can be assumed to have been in place since the inception of the contract (i.e., not practical to separately evaluate the effects of all prior contract modifications). This standard requires us to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time based on when control of goods and services transfer to a customer. As a result of adoption of the standard, we changed the presentation of our financial statements, including: (1) timing of revenue recognition, and (2) changes in classification between revenue and costs. The standard has no cash impact and, as such, does not affect the economics of our underlying customer contracts. Our policy on recognizing revenue is as follows: Revenue from Sale of Equipment Performance Obligations Satisfied Over Time We recognize revenue on agreements for sales of goods manufactured to unique customer specifications, including long-term construction projects, on an over-time basis utilizing cost inputs as the measurement criteria in assessing the progress toward completion. Our estimate of costs to be incurred to fulfill our promise to a customer is based on our history of manufacturing or constructing similar assets for customers and is updated routinely to reflect changes in quantity or pricing of the inputs. We begin to recognize revenue on these contracts when the contract specific inventory becomes customized for a customer, which is reflective of our initial transfer of control of the incurred costs. We provide for potential losses on any of these agreements when it is probable that we will incur the loss. Our billing terms for these over-time contracts vary, but are generally based on achieving specified milestones. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We recognize revenue for non-customized equipment at the point in time that the customer obtains control of the good, which is no earlier than when the customer has physical possession of the product. Equipment for which we recognize revenue at a point in time include goods we manufacture on a standardized basis for sale to the market. We use proof of delivery for certain large equipment with more complex logistics associated with the shipment, whereas the delivery of other equipment is determined based on historical data of transit times between regions. On occasion we sell products with a right of return. We use our accumulated experience to estimate and provide for such returns when we record the sale. In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have concluded that the customer has control of the goods and that acceptance is likely to occur. Our billing terms for these point in time equipment contracts vary, but are generally based on shipment of the goods to the customer. Revenue from Sale of Services Performance Obligations Satisfied Over Time Revenue on Oilfield Services is recognized on an overtime basis as performed. We also sell product services under long-term product maintenance or extended warranty agreements in our Turbomachinery & Process Solutions and Oilfield Equipment segments. These agreements require us to maintain the customers' assets over the service agreement contract terms, which generally range from 10 to 20 years. In general, these are contractual arrangements to provide services, repairs, and maintenance of a covered unit (gas turbines for mechanical drive or power generation, primarily on LNG applications, drilling rigs). These services are performed at various times during the life of the contract, thus the costs of performing services are incurred on other than a straight-line basis. We recognize related sales based on the extent of our progress toward completion measured by actual costs incurred in relation to total expected costs. We provide for any loss that we expect to incur on any of these agreements when that loss is probable. BHGE utilizes historical customer data, prior product performance data, statistical analysis, third-party data, and internal management estimates to calculate contract-specific margins. In certain contracts, the total transaction price is variable based on customer utilization, which is excluded from the contract margin until the period that the customer has utilized to appropriately reflect the revenue activity in the period earned. Our billing terms for these contracts are generally based on the occurrence of a major maintenance event within the contract or asset utilization (i.e. usage per hour). The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We sell certain tangible products, largely spare equipment, through our services business. We recognize revenues for this equipment at the point in time that the customer obtains control of the good, which is at the point in time we deliver the spare part to the customer. Our billing terms for these point in time service contracts vary, but are generally based on shipment of the goods to the customer. Impact of Adoption As a result of the adoption of the standard, the timing of revenue recognition on our long-term product service agreements is affected. Although we continue to recognize revenue over time on these contracts, there are changes to how contract modifications, termination clauses and purchase options are accounted for by us. In particular, under the previous standard, the cumulative impact from a contract modification on revenue already recorded is recognized in the period in which the modification is agreed. Under the new standard, the impact from certain types of modifications is recognized over the remaining life of the contract. The change in historical periods to our statements of income (loss) related to the adoption of the standard is summarized below (in millions, except per share amounts): Three Months Ended Year Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2017 December 31, 2016 Revenue: Sales of goods $ 86 $ 13 $ 37 $ 27 $ 163 $ (26 ) Sales of services (50 ) (86 ) (33 ) (74 ) (243 ) (161 ) Total revenue 36 (73 ) 4 (47 ) (80 ) (187 ) Operating loss (14 ) (64 ) (6 ) (91 ) (175 ) (226 ) Net income (loss) 1 (84 ) (10 ) (57 ) (150 ) (149 ) Net income (loss) attributable to BHGE 1 (31 ) — — (30 ) — Per share amounts: Basic and diluted loss per Class A common stock — (0.07 ) (0.07 ) The increase (decrease) to our statement of financial position related to the adoption of the standard is summarized below: December 31, 2017 ASSETS Current receivables, net $ 1 Inventories, net (83 ) Contract and other deferred assets (701 ) Deferred income taxes 233 LIABILITIES AND EQUITY Progress collections and deferred income $ 394 All other current liabilities (64 ) Deferred income taxes (34 ) All other liabilities (83 ) Baker Hughes, a GE company equity (432 ) Noncontrolling interests (331 ) The cumulative impact to our retained earnings (included in our net parent investment) as of January 1, 2016 was a reduction of $432 million . On January 1, 2018, we adopted the FASB ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory . The ASU eliminated the deferral of tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes are recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The effect of the adoption of the standard was an increase to retained earnings of $25 million and an increase to noncontrolling interest of $42 million as of January 1, 2018 with no other impact to our financial statements. Future earnings will be reduced in total by this amount. The effect of the change on future transactions will depend on the nature and amount of future transactions as it will affect the timing of recognition of both tax expenses and tax benefits, with no change in the associated cash flows. On January 1, 2018, we adopted the FASB ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changed the income statement presentation of net periodic benefit cost by requiring separation between the service cost component and all other components. The service cost component is presented as an operating expense with other similar compensation costs arising for services rendered by the pertinent employees during the period. The non operating components are presented outside of income from operations. The change in historical periods to our statements of income (loss) related to the adoption of ASU No. 2017-07 is summarized below: Three Months Ended Year Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2017 December 31, 2016 Operating income (loss) $ (5 ) $ (7 ) $ 9 $ 2 $ (1 ) $ 24 Non operating income (loss) 5 7 (9 ) (2 ) 1 (24 ) NEW ACCOUNTING STANDARDS TO BE ADOPTED In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) : Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The ASU provides that the stranded tax effects from the Tax Cuts and Jobs Act on the balance of other comprehensive earnings may be reclassified to retained earnings. The ASU is effective for periods beginning after December 15, 2018, with an election to adopt early. The ASU is not expected to have a material effect to our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases . The ASU establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. In July 2018, the FASB issued an ASU that added an alternative transition method, which allows companies to apply the provisions of the new leasing standard on January 1, 2019 through recognition of a cumulative-effect adjustment to retained earnings as of January 1, 2019 (i.e. without retrospectively adjusting comparative periods). We intend to apply this alternative transition method. We are currently in the process of accumulating and evaluating all the necessary information required to properly account for our lease portfolio under the new standard. Additionally, we are implementing an enterprise-wide lease management system to support the ongoing accounting requirements. While we continue to evaluate the effect of the standard on our ongoing financial reporting, we anticipate that the adoption of the ASU is expected to result in the recognition of right of use asset and related liability in the range of approximately $600 million and $750 million with an estimated immaterial effect to our retained earnings and cash flows. 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. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of new accounting pronouncements | The change in historical periods to our statements of income (loss) related to the adoption of the standard is summarized below (in millions, except per share amounts): Three Months Ended Year Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2017 December 31, 2016 Revenue: Sales of goods $ 86 $ 13 $ 37 $ 27 $ 163 $ (26 ) Sales of services (50 ) (86 ) (33 ) (74 ) (243 ) (161 ) Total revenue 36 (73 ) 4 (47 ) (80 ) (187 ) Operating loss (14 ) (64 ) (6 ) (91 ) (175 ) (226 ) Net income (loss) 1 (84 ) (10 ) (57 ) (150 ) (149 ) Net income (loss) attributable to BHGE 1 (31 ) — — (30 ) — Per share amounts: Basic and diluted loss per Class A common stock — (0.07 ) (0.07 ) The increase (decrease) to our statement of financial position related to the adoption of the standard is summarized below: December 31, 2017 ASSETS Current receivables, net $ 1 Inventories, net (83 ) Contract and other deferred assets (701 ) Deferred income taxes 233 LIABILITIES AND EQUITY Progress collections and deferred income $ 394 All other current liabilities (64 ) Deferred income taxes (34 ) All other liabilities (83 ) Baker Hughes, a GE company equity (432 ) Noncontrolling interests (331 ) The change in historical periods to our statements of income (loss) related to the adoption of ASU No. 2017-07 is summarized below: Three Months Ended Year Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2017 December 31, 2016 Operating income (loss) $ (5 ) $ (7 ) $ 9 $ 2 $ (1 ) $ 24 Non operating income (loss) 5 7 (9 ) (2 ) 1 (24 ) |
Revenue Related to Contracts _2
Revenue Related to Contracts With Customers (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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. Three Months Ended September 30, Nine Months Ended September 30, Total Revenue 2018 2017 2018 2017 U.S. $ 1,675 $ 1,415 $ 4,718 $ 2,837 Non-U.S. 3,990 3,886 11,894 8,543 Total $ 5,665 $ 5,301 $ 16,612 $ 11,380 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Preliminary identifiable assets acquired and liabilities assumed | The tables below present the fair value of assets acquired and liabilities assumed and the associated fair value of the noncontrolling interest related to the acquired net assets of Baker Hughes. The final determination of the fair value of assets and liabilities was concluded in the second quarter of 2018. Identifiable assets acquired and liabilities assumed Fair value at July 3, 2017 Assets Cash and equivalents $ 4,133 Current receivables 2,342 Inventories 1,712 Property, plant and equipment 4,514 Intangible assets (1) 4,005 All other assets 1,335 Liabilities Accounts payable (1,213 ) Borrowings (3,370 ) Deferred income taxes (2) (258 ) Liabilities for pension and other postretirement benefits (654 ) All other liabilities (1,676 ) Total identifiable net assets $ 10,870 Noncontrolling interest associated with net assets acquired (35 ) Goodwill (3) 13,963 Total purchase consideration $ 24,798 (1) Intangible assets, as provided in the table below, are recorded at fair value, as determined by management based on available information. The estimated useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. We consider the Baker Hughes trade name to be an indefinite life intangible asset, which will not be amortized and will be subject to an annual impairment test. Fair Value Estimated Weighted Trade name - Baker Hughes $ 2,100 Indefinite life Customer relationships 1,240 15 Patents and technology 465 10 In-process research and development 70 Indefinite life Capitalized software 64 2 Trade names - other 45 10 Favorable lease contracts & others 21 10 Total $ 4,005 (2) Includes approximately $500 million of net deferred tax liabilities related to the fair value of intangible assets included in the purchase consideration and approximately $242 million of other net deferred tax assets, including non-U.S. loss carryforwards net of valuation allowances partially offset by liabilities for unrecognized benefits. (3) Goodwill represents the excess of the total purchase consideration over fair value of the net assets recognized and represents the future economic benefits that we believe will result from combining the operations of GE O&G and Baker Hughes, including expected future synergies and operating efficiencies. Goodwill resulting from the Transactions has been primarily allocated to the Oilfield Services segment, of which $67 million is deductible for tax purposes. See "Note 7. Goodwill and Other Intangible Assets" for allocation of goodwill to all the segments. |
Pro forma information | Significant adjustments to the pro forma information below include recognition of non-recurring direct incremental acquisition costs in 2016 and exclusion of those costs from all other periods presented; amortization associated with an estimate of the acquired intangible assets and reduction of interest expense for fair value adjustments to debt. Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Revenue $ 5,301 $ 16,042 Net loss (198 ) (401 ) Net loss attributable to the Company (75 ) (109 ) Basic loss per Class A common stock (0.17 ) (0.26 ) Diluted loss per Class A common stock (1) (0.17 ) (0.26 ) (1) The calculation of diluted loss per Class A common stock excludes shares potentially issuable under stock-based incentive compensation plans and the exchange of Class B common stock with Class A common stock under the Exchange Agreement, as their effect, if included, would be anti-dilutive. |
Business Held For Sale (Tables)
Business Held For Sale (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table presents information related to the assets and liabilities of the NGS business that was classified as held for sale and reported in 'all other current assets' and 'all other current liabilities' in our condensed consolidated and combined statement of financial position as of September 30, 2018 : Assets and liabilities of business held for sale Carrying value at September 30, 2018 Assets Current receivables $ 26 Inventories 27 Property, plant and equipment 29 Intangible assets 42 All other assets 1 Total assets held for sale $ 125 Liabilities Accounts payable $ 12 All other liabilities 10 Total liabilities held for sale $ 21 Total net assets held for sale $ 104 |
Current Receivables (Tables)
Current Receivables (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Current receivables | Current receivables are comprised of the following: September 30, 2018 December 31, 2017 Customer receivables $ 4,789 $ 4,700 Related parties 675 801 Other 674 844 Total current receivables 6,138 6,345 Less: Allowance for doubtful accounts (329 ) (330 ) Total current receivables, net $ 5,809 $ 6,015 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory, Net [Abstract] | |
Inventories, net of reserves | Inventories, net of reserves of $455 million and $360 million as of September 30, 2018 and December 31, 2017 , respectively, are comprised of the following: September 30, 2018 December 31, 2017 Finished goods $ 2,626 $ 2,577 Work in process and raw material 2,055 1,930 Total inventories, net $ 4,681 $ 4,507 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The changes in the carrying value of goodwill are detailed below by segment: Oilfield Services Oilfield Equipment Turbo-machinery & Process Solutions Digital Solutions Total Balance at December 31, 2016, gross $ 2,779 $ 3,852 $ 1,814 $ 1,989 $ 10,434 Accumulated impairment at December 31, 2016 (2,633 ) (867 ) — (254 ) (3,754 ) Balance at December 31, 2016 146 2,985 1,814 1,735 6,680 Acquisition (1) 13,052 — — — 13,052 Currency exchange and others 7 49 92 47 195 Balance at December 31, 2017 13,205 3,034 1,906 1,782 19,927 Purchase accounting adjustments (1) (154 ) 242 394 429 911 Currency exchange and others 3 (16 ) (24 ) (11 ) (48 ) Balance at September 30, 2018 $ 13,054 $ 3,260 $ 2,276 $ 2,200 $ 20,790 (1) Includes goodwill associated with the acquisition of Baker Hughes. The final determination of fair value of the assets and liabilities and the related goodwill associated with the acquisition of Baker Hughes was concluded in the second quarter of 2018. Of the total goodwill of $ 13,963 million resulting from the acquisition of Baker Hughes, $ 12,898 million is allocated to our Oilfield Services segment and the remainder to our other segments based on the expected benefit from the synergies of the acquisition. |
Schedule of finite-lived intangible assets | Intangible assets are comprised of the following: September 30, 2018 December 31, 2017 Gross Accumulated Net Gross Accumulated Net Technology $ 1,115 $ (517 ) $ 598 $ 1,177 $ (440 ) $ 737 Customer relationships 3,120 (922 ) 2,198 3,202 (819 ) 2,383 Capitalized software 1,123 (800 ) 323 1,130 (697 ) 433 Trade names and trademarks 702 (225 ) 477 757 (159 ) 598 Other 14 (1 ) 13 10 — 10 Finite-lived intangible assets 6,074 (2,465 ) 3,609 6,276 (2,115 ) 4,161 Indefinite-lived intangible assets (1) 2,222 — 2,222 2,197 — 2,197 Total intangible assets $ 8,296 $ (2,465 ) $ 5,831 $ 8,473 $ (2,115 ) $ 6,358 (1) Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name. |
Schedule of indefinite-lived intangible assets | Intangible assets are comprised of the following: September 30, 2018 December 31, 2017 Gross Accumulated Net Gross Accumulated Net Technology $ 1,115 $ (517 ) $ 598 $ 1,177 $ (440 ) $ 737 Customer relationships 3,120 (922 ) 2,198 3,202 (819 ) 2,383 Capitalized software 1,123 (800 ) 323 1,130 (697 ) 433 Trade names and trademarks 702 (225 ) 477 757 (159 ) 598 Other 14 (1 ) 13 10 — 10 Finite-lived intangible assets 6,074 (2,465 ) 3,609 6,276 (2,115 ) 4,161 Indefinite-lived intangible assets (1) 2,222 — 2,222 2,197 — 2,197 Total intangible assets $ 8,296 $ (2,465 ) $ 5,831 $ 8,473 $ (2,115 ) $ 6,358 (1) Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name. |
Schedule of finite-lived intangible assets, future amortization expense | Estimated amortization expense for the remainder of 2018 and each of the subsequent five fiscal years is expected to be as follows: Year Estimated Amortization Expense Remainder of 2018 $ 89 2019 354 2020 316 2021 272 2022 233 2023 215 |
Contract and Other Deferred A_2
Contract and Other Deferred Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
Contract assets | Contract assets are comprised of the following: September 30, 2018 December 31, 2017 Long-term product service agreements $ 608 $ 589 Long-term equipment contract revenue (1) 1,127 1,095 Contract assets (total revenue in excess of billings) (2) 1,735 1,684 Deferred inventory costs (3) 251 360 Non-recurring engineering costs 15 — Contract and other deferred assets $ 2,001 $ 2,044 (1) Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment. (2) Contract assets (total revenue in excess of billings) were $1,233 million as of January 1, 2017. (3) Deferred inventory costs were $276 million as of January 1, 2017, which represents cost deferral for shipped goods and other costs where the criteria for revenue recognition has not yet been met. Contract liabilities are comprised of the following: September 30, 2018 December 31, 2017 Progress collections $ 1,433 $ 1,456 Deferred income 154 319 Progress collections and deferred income (contract liabilities) (1) $ 1,587 $ 1,775 (1) Progress collections and deferred income (contract liabilities) were $2,038 million at January 1, 2017. |
Progress Collections and Defe_2
Progress Collections and Deferred Income (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Contract liabilities | Contract assets are comprised of the following: September 30, 2018 December 31, 2017 Long-term product service agreements $ 608 $ 589 Long-term equipment contract revenue (1) 1,127 1,095 Contract assets (total revenue in excess of billings) (2) 1,735 1,684 Deferred inventory costs (3) 251 360 Non-recurring engineering costs 15 — Contract and other deferred assets $ 2,001 $ 2,044 (1) Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment. (2) Contract assets (total revenue in excess of billings) were $1,233 million as of January 1, 2017. (3) Deferred inventory costs were $276 million as of January 1, 2017, which represents cost deferral for shipped goods and other costs where the criteria for revenue recognition has not yet been met. Contract liabilities are comprised of the following: September 30, 2018 December 31, 2017 Progress collections $ 1,433 $ 1,456 Deferred income 154 319 Progress collections and deferred income (contract liabilities) (1) $ 1,587 $ 1,775 (1) Progress collections and deferred income (contract liabilities) were $2,038 million at January 1, 2017. |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Short-term and long-term borrowings | Short-term and long-term borrowings are comprised of the following: September 30, 2018 December 31, 2017 Short-term borrowings Short-term bank borrowings $ 20 $ 171 Current portion of long-term borrowings — 639 Short-term borrowings from GE 936 1,124 Other borrowings 44 103 Total short-term borrowings $ 1,000 $ 2,037 Long-term borrowings 3.2% Senior Notes due August 2021 $ 524 $ 526 2.773% Senior Notes due December 2022 1,245 1,244 8.55% Debentures due June 2024 132 135 3.337% Senior Notes due December 2027 1,342 1,342 6.875% Notes due January 2029 295 308 5.125% Notes due September 2040 1,307 1,311 4.08% Senior Notes due December 2047 1,336 1,337 Capital leases 107 87 Other long-term borrowings 5 22 Total long-term borrowings 6,293 6,312 Total borrowings $ 7,293 $ 8,349 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic cost (benefit) | The components of net periodic cost (benefit) of plans sponsored by us are as follows for the three and nine months ended September 30, 2018 and 2017 : Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Service cost $ 5 $ 16 $ 15 $ 24 Interest cost 18 18 54 32 Expected return on plan assets (30 ) (31 ) (90 ) (51 ) Amortization of net actuarial loss 2 4 6 9 Net periodic cost (benefit) $ (5 ) $ 7 $ (15 ) $ 14 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of changes in number of shares outstanding | The following table presents the changes in the number of shares outstanding (in thousands): Class A Common Stock Class B Common Stock Balance at December 31, 2017 422,208 706,985 Issue of shares upon vesting of restricted stock units (1) 818 — Issue of shares on exercises of stock options (1) 636 — Stock repurchase program (2) (3) (11,501 ) (19,241 ) Balance at September 30, 2018 412,161 687,743 (1) Share amounts reflected above are net of shares withheld to satisfy the employee's tax withholding obligation. (2) On November 2, 2017, our board of directors authorized BHGE LLC to repurchase up to $3 billion of its common units from the Company and GE. The proceeds of this repurchase are to be used by BHGE to repurchase Class A common stock of the Company on the open market, which if fully implemented would result in the repurchase of approximately $1.1 billion of Class A common stock. The Class B common stock of the Company, paired with common units, will be repurchased by the Company at par value. The $3 billion repurchase authorization is the aggregate authorization for repurchases of Class A common stock and Class B common stock together with its paired common unit. At September 30, 2018 , BHGE LLC had authorization remaining to repurchase up to approximately $1.5 billion of its common units from BHGE and GE. (3) During the nine months ended September 30, 2018 , we repurchased and canceled 11,500,992 shares of Class A common stock for a total of $374 million and 19,241,160 shares of Class B common stock from GE together with the paired common units of BHGE LLC for $626 million . We did not repurchase any shares of common stock during the three months ended September 30, 2018 . |
Schedule of accumulated other comprehensive loss | The following tables present the changes in accumulated other comprehensive loss, net of tax: Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss Balance at December 31, 2017 $ 1 $ (682 ) $ 1 $ (23 ) $ (703 ) Other comprehensive income (loss) before reclassifications (2 ) (312 ) (1 ) 5 (310 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — — — Deferred taxes (1 ) — — (2 ) (3 ) Other comprehensive income (loss) (3 ) (312 ) (1 ) 3 (313 ) Less: Other comprehensive income (loss) attributable to noncontrolling interests (2 ) (195 ) — 2 (195 ) Balance at September 30, 2018 $ — $ (799 ) $ — $ (22 ) $ (821 ) Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss Balance at December 31, 2016 $ — $ (1,795 ) $ (10 ) $ (83 ) $ (1,888 ) Other comprehensive income (loss) before reclassifications 40 202 12 (11 ) 243 Amounts reclassified from accumulated other comprehensive income (loss) (39 ) — 9 (1 ) (31 ) Deferred taxes 1 (10 ) (4 ) 6 (7 ) Other comprehensive income (loss) 2 192 17 (6 ) 205 Less: Other comprehensive income attributable to noncontrolling interests 2 166 5 (1 ) 172 Less: Other adjustments — — — 13 13 Less: Reallocation of AOCL based on ownership of GE and previous Baker Hughes shareholders — (1,170 ) (1 ) (63 ) (1,234 ) Balance at September 30, 2017 $ — $ (599 ) $ 3 $ (38 ) $ (634 ) |
Schedule of noncontrolling interest | As of September 30, 2018 , GE owned approximately 62.5% of BHGE LLC and this represents the majority of the noncontrolling interest balance reported within equity. September 30, 2018 December 31, 2017 GE's interest in BHGE LLC $ 22,718 $ 23,993 Other noncontrolling interests 105 140 Total noncontrolling interests $ 22,823 $ 24,133 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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: Three Months Ended September 30, Nine Months Ended September 30, (In millions, except per share amounts) 2018 2017 2018 2017 Net income (loss) $ 38 $ (357 ) $ (19 ) $ (311 ) Less: Net income attributable to GE O&G pre-merger — — — 42 Less: Net income (loss) attributable to noncontrolling interests 25 (223 ) (83 ) (219 ) Net income (loss) attributable to BHGE $ 13 $ (134 ) $ 64 $ (134 ) Weighted average shares outstanding: Class A basic 412 428 416 428 Class A diluted 414 428 417 428 Net income (loss) per share attributable to common stockholders: Class A basic $ 0.03 $ (0.31 ) $ 0.15 $ (0.31 ) Class A diluted $ 0.03 $ (0.31 ) $ 0.15 $ (0.31 ) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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. September 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Net Balance Level 1 Level 2 Level 3 Net Balance Assets Derivatives $ — $ 72 $ — $ 72 $ — $ 150 $ — $ 150 Investment securities 63 — 296 359 81 8 304 393 Total assets 63 72 296 431 81 158 304 543 Liabilities Derivatives — (77 ) — (77 ) — (95 ) — (95 ) Total liabilities $ — $ (77 ) $ — $ (77 ) $ — $ (95 ) $ — $ (95 ) |
Reconciliation of recurring Level 3 fair value measurements | The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities: Balance at December 31, 2017 $ 304 Purchases 47 Proceeds at maturity (55 ) Balance at September 30, 2018 $ 296 |
Schedule of investment securities classified as available for sale | September 30, 2018 December 31, 2017 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 (a) $ 296 $ — $ — $ 296 $ 310 $ 2 $ — $ 312 Equity securities (b) 63 — — 63 81 — — 81 Total $ 359 $ — $ — $ 359 $ 391 $ 2 $ — $ 393 (a) All of our non-U.S. debt securities are classified as available for sale instruments and mature within three years. (b) These securities have readily determinable fair values and subsequent to the adoption of ASU 2016-01 on January 1, 2018, changes in fair value are recorded to earnings. Gross unrealized gains (losses) recorded to earnings related to these securities were $(9) million and $41 million for the nine months ended September 30, 2018 and 2017, respectively. |
Schedule of derivatives | The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives. September 30, 2018 December 31, 2017 Assets (Liabilities) Assets (Liabilities) Derivatives accounted for as hedges Currency exchange contracts $ — $ (2 ) $ 6 $ — Derivatives not accounted for as hedges Currency exchange contracts 72 (73 ) 144 (95 ) Commodity derivatives — (2 ) — — Total derivatives $ 72 $ (77 ) $ 150 $ (95 ) |
Carrying amount related to derivatives | The table below provides additional information about how derivatives are reflected in our condensed consolidated and combined financial statements. Carrying amount related to derivatives September 30, 2018 December 31, 2017 Derivative assets $ 72 $ 150 Derivative liabilities (77 ) (95 ) Net derivatives $ (5 ) $ 55 |
Carrying amount related to derivatives | The table below provides additional information about how derivatives are reflected in our condensed consolidated and combined financial statements. Carrying amount related to derivatives September 30, 2018 December 31, 2017 Derivative assets $ 72 $ 150 Derivative liabilities (77 ) (95 ) Net derivatives $ (5 ) $ 55 |
Effect of derivatives on earnings | The table below summarizes these offsets and the net effect on pre-tax earnings. Three Months Ended September 30, Nine Months Ended September 30, Cash Flow Hedges Economic Hedges Cash Flow Hedges Economic Hedges 2018 2017 2018 2017 2018 2017 2018 2017 Effect on hedging instrument $ (2 ) $ 9 $ (13 ) $ 144 $ (1 ) $ 12 $ (6 ) $ 145 Effect on underlying 2 (9 ) 1 (174 ) 1 (12 ) (24 ) (174 ) Effect on earnings (1) $ — $ — $ (12 ) $ (30 ) $ — $ — $ (30 ) $ (29 ) (1) For cash flow hedges, the effect on earnings, if any, is primarily related to ineffectiveness. For economic hedges on forecasted transactions, the effect on earnings is substantially offset by future earnings on economically hedged items. |
Schedule of hedging instrument, currency exchange contract | The table below summarizes this activity by hedging instrument. Three Months Ended September 30, Nine Months Ended September 30, Gain (Loss) Recognized in AOCI Gain (Loss) Reclassified from AOCI to Earnings Gain (Loss) Recognized in AOCI Gain (Loss) Reclassified from AOCI to Earnings 2018 2017 2018 2017 2018 2017 2018 2017 Currency exchange contracts $ (2 ) $ 9 $ — $ — $ (1 ) $ 12 $ — $ (9 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 results of operations for the nine months ended September 30, 2018 may not be comparable to the results of operations for the nine months ended September 30, 2017 as it excludes the results of Baker Hughes prior to the date of the business combination. Three Months Ended September 30, Nine Months Ended September 30, Segments revenue 2018 2017 2018 2017 Oilfield Services $ 2,993 $ 2,661 $ 8,554 $ 3,101 Oilfield Equipment 631 613 1,912 2,011 Turbomachinery & Process Solutions 1,389 1,414 4,233 4,644 Digital Solutions 653 614 1,913 1,624 Total $ 5,665 $ 5,301 $ 16,612 $ 11,380 The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and equity in loss of affiliate and before the following: net interest expense, net other non operating income (loss), corporate expenses, restructuring, impairment and other charges, inventory impairments, merger and related costs and certain gains and losses not allocated to the operating segments. Three Months Ended September 30, Nine Months Ended September 30, Segment income (loss) before income taxes 2018 2017 2018 2017 Oilfield Services $ 231 $ 88 $ 561 $ (35 ) Oilfield Equipment 6 (41 ) (12 ) 26 Turbomachinery & Process Solutions 132 134 364 508 Digital Solutions 106 77 275 240 Total segment 475 258 1,189 739 Corporate (98 ) (89 ) (294 ) (279 ) Inventory impairment (1) (12 ) (12 ) (88 ) (31 ) Restructuring, impairment and other (66 ) (191 ) (374 ) (292 ) Merger and related costs (17 ) (159 ) (113 ) (310 ) Other non operating income, net 6 4 51 62 Interest expense, net (55 ) (41 ) (164 ) (75 ) Total $ 233 $ (230 ) $ 206 $ (186 ) (1) Charges for inventory impairments are reported in the "Cost of goods sold" caption of the condensed consolidated and combined statements of income (loss). |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranties | An analysis of changes in the liability for product warranties are as follows: Balance at December 31, 2017, and 2016, respectively $ 164 $ 74 Provisions 26 27 Expenditures (83 ) (33 ) Other (1) 128 97 Balance at September 30, 2018, and 2017, respectively $ 235 $ 165 (1) Primarily related to the acquisition of Baker Hughes. |
Restructuring, Impairment and_2
Restructuring, Impairment and Other (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Impairment and Restructuring Charges | The amount of costs not included in the reported segment results is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Oilfield Services $ 20 $ 118 $ 119 $ 141 Oilfield Equipment 8 31 26 41 Turbomachinery & Process Solutions 17 16 56 38 Digital Solutions 2 13 18 27 Corporate 2 13 23 17 Total $ 49 $ 191 $ 242 $ 264 These costs were primarily related to product line terminations, plant closures and related expenses such as property, plant and equipment impairments, contract terminations and costs of assets' and employees' relocation, employee-related termination benefits, and other incremental costs that were a direct result of the restructuring plans. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Property, plant & equipment, net $ 18 $ 68 $ 55 $ 80 Employee-related termination expenses 15 87 114 126 Asset relocation costs 7 2 20 7 Environmental remediation costs — 1 3 8 Contract termination fees 5 16 33 21 Other incremental costs 4 17 17 22 Total $ 49 $ 191 $ 242 $ 264 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) Employee in Thousands, $ in Millions | 9 Months Ended | |||
Sep. 30, 2018USD ($)Employeecountry | Dec. 31, 2017USD ($) | Jul. 03, 2017 | ||
Business Acquisition [Line Items] | ||||
Countries in which our business is conducted | country | 120 | |||
Number of our employees | Employee | 65 | |||
Restricted cash and cash equivalents held in bank accounts | $ 1,119 | $ 1,190 | ||
Effect of adoption of ASU 2016-16 on taxes (1) | [1] | $ 67 | ||
GE Transaction Agreement | General Electric Company | ||||
Business Acquisition [Line Items] | ||||
Approximate interest to be acquired | 62.50% | 62.50% | ||
GE Transaction Agreement | Baker Hughes Incorporated | ||||
Business Acquisition [Line Items] | ||||
Approximate interest to be acquired | 37.50% | |||
Related party amount, due to related party | GE | ||||
Business Acquisition [Line Items] | ||||
Cash held on behalf of GE | $ 936 | 1,124 | ||
Cash and cash equivalents | 780 | 997 | ||
Related party amount, due to related party | GE | Geographic distribution, foreign | ||||
Business Acquisition [Line Items] | ||||
Cash held on behalf of GE | 593 | 764 | ||
Restricted cash | $ 7 | |||
Retained Loss | ||||
Business Acquisition [Line Items] | ||||
Effect of adoption of ASU 2016-16 on taxes (1) | [1] | 25 | ||
Non-controlling Interests | ||||
Business Acquisition [Line Items] | ||||
Effect of adoption of ASU 2016-16 on taxes (1) | [1] | $ 42 | ||
Minimum | ||||
Business Acquisition [Line Items] | ||||
Performance obligations expected to be satisfied, expected timing | 10 | |||
Maximum | ||||
Business Acquisition [Line Items] | ||||
Performance obligations expected to be satisfied, expected timing | 20 | |||
[1] | See "Note 1. Basis of Presentation and Summary of Significant Accounting Policies" for further details. |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Revenue recognition standard, statements of income (loss) (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 01, 2016 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Revenues | $ 5,665 | $ 5,301 | $ 16,612 | $ 11,380 | ||||||||
Operating income (loss) | 282 | (193) | 319 | (173) | ||||||||
Net income (loss) | 38 | $ (357) | (357) | $ 46 | (19) | (311) | ||||||
Net income (loss) attributable to Baker Hughes, a GE company | $ 13 | $ (134) | $ 64 | $ (134) | ||||||||
Earnings per share, basic (in dollars per share) | $ 0.03 | $ (0.31) | $ 0.15 | $ (0.31) | ||||||||
Earnings per share, diluted (in dollars per share) | $ 0.03 | $ (0.31) | $ 0.15 | $ (0.31) | ||||||||
Cumulative effect on retained earnings | $ (432) | |||||||||||
ASU 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Revenues | $ 36 | $ (73) | $ 4 | $ (47) | $ (80) | $ (187) | ||||||
Operating income (loss) | (14) | (64) | (6) | (91) | (175) | (226) | ||||||
Net income (loss) | 1 | (84) | (10) | (57) | (150) | (149) | ||||||
Net income (loss) attributable to Baker Hughes, a GE company | $ 1 | $ (31) | 0 | 0 | $ (30) | 0 | ||||||
Earnings per share, basic (in dollars per share) | $ 0 | $ (0.07) | $ (0.07) | |||||||||
Earnings per share, diluted (in dollars per share) | $ 0 | $ (0.07) | $ (0.07) | |||||||||
Sales of goods | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Revenues | $ 3,142 | $ 3,110 | $ 9,421 | $ 7,619 | ||||||||
Sales of goods | ASU 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Revenues | $ 86 | 13 | 37 | 27 | $ 163 | (26) | ||||||
Sales of services | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Revenues | $ 2,523 | 2,191 | $ 7,191 | $ 3,761 | ||||||||
Sales of services | ASU 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Revenues | $ (50) | $ (86) | $ (33) | $ (74) | $ (243) | $ (161) |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Revenue recognition standard, statements of financial position (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 |
ASSETS | |||
Current receivables, net | $ 5,809 | $ 6,015 | |
Inventories, net | 4,681 | 4,507 | |
Contract and other deferred assets | 2,001 | 2,044 | |
Deferred income taxes | 1,212 | 715 | |
LIABILITIES AND EQUITY | |||
Progress collections and deferred income | 1,587 | 1,775 | $ 2,038 |
All other current liabilities | 2,184 | 2,038 | |
All other liabilities | 1,024 | 889 | |
Baker Hughes, a GE company equity | 13,740 | 14,277 | |
Noncontrolling interests | $ 22,823 | 24,133 | |
ASU 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | |||
ASSETS | |||
Current receivables, net | 1 | ||
Inventories, net | (83) | ||
Contract and other deferred assets | (701) | ||
Deferred income taxes | 233 | ||
LIABILITIES AND EQUITY | |||
Progress collections and deferred income | 394 | ||
All other current liabilities | (64) | ||
Deferred income taxes | (34) | ||
All other liabilities | (83) | ||
Baker Hughes, a GE company equity | (432) | ||
Noncontrolling interests | $ (331) |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - New accounting policy (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Operating income (loss) | $ 282 | $ (193) | $ 319 | $ (173) | |||||
Non operating income (loss) | 6 | 4 | 51 | $ 62 | |||||
ASU 2017-07 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Operating income (loss) | $ (5) | (7) | $ 9 | $ 2 | $ (1) | $ 24 | |||
Non operating income (loss) | $ 5 | $ 7 | $ (9) | $ (2) | $ 1 | $ (24) | |||
ASU 2016-02 | Pro Forma | Minimum | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Right of use asset | 600 | 600 | |||||||
ASU 2016-02 | Pro Forma | Maximum | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Right of use asset | $ 750 | $ 750 |
Revenue Related to Contracts _3
Revenue Related to Contracts With Customers - Disaggregated revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 5,665 | $ 5,301 | $ 16,612 | $ 11,380 |
Performance obligations expected to be satisfied | 20,800 | 20,800 | ||
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,675 | 1,415 | 4,718 | 2,837 |
Non-U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 3,990 | $ 3,886 | $ 11,894 | $ 8,543 |
Revenue Related to Contracts _4
Revenue Related to Contracts With Customers (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Disaggregation of Revenue [Line Items] | |
Performance obligations expected to be satisfied, percentage | 45.00% |
Performance obligations expected to be satisfied, expected timing | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Disaggregation of Revenue [Line Items] | |
Performance obligations expected to be satisfied, percentage | 62.00% |
Performance obligations expected to be satisfied, expected timing | 5 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Disaggregation of Revenue [Line Items] | |
Performance obligations expected to be satisfied, percentage | 89.00% |
Performance obligations expected to be satisfied, expected timing | 15 years |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) $ in Millions | Jul. 03, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Business Acquisition [Line Items] | ||||||
Transaction related costs | $ 17 | $ 159 | $ 113 | $ 310 | ||
GE Transaction Agreement | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 24,798 | |||||
Acquisition remeasurement, goodwill | $ 911 | |||||
Deferred tax asset, loss carryforward | $ 242 | |||||
Acquisition remeasurement, property, plant and equipment | (362) | |||||
Acquisition remeasurement, equity method investment | (228) | |||||
Acquisition remeasurement, intangible assets | (123) | |||||
Acquisition remeasurement, other liabilities | 314 | |||||
Acquisition remeasurement, depreciation and amortization expense | $ (33) |
Business Acquisition - Identifi
Business Acquisition - Identifiable assets acquired and liabilities assumed (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Jul. 03, 2017 | Dec. 31, 2016 |
Liabilities | ||||
Goodwill | $ 20,790 | $ 19,927 | $ 6,680 | |
GE Transaction Agreement | ||||
Assets | ||||
Cash and equivalents | $ 4,133 | |||
Current receivables | 2,342 | |||
Inventories | 1,712 | |||
Property, plant and equipment | 4,514 | |||
Intangible assets | 4,005 | |||
All other assets | 1,335 | |||
Liabilities | ||||
Accounts payable | (1,213) | |||
Borrowings | (3,370) | |||
Deferred income taxes | (258) | |||
Liabilities for pension and other postretirement benefits | (654) | |||
All other liabilities | (1,676) | |||
Total identifiable net assets | 10,870 | |||
Noncontrolling interest associated with net assets acquired | (35) | |||
Goodwill | 13,963 | |||
Total purchase consideration | 24,798 | |||
Deferred tax assets | 500 | |||
Deferred tax asset, loss carryforward | 242 | |||
Tax deductible goodwill | $ 67 |
Business Acquisition - Estimate
Business Acquisition - Estimated fair value and average life (Details) - USD ($) $ in Millions | Jul. 03, 2017 | Sep. 30, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Other intangible assets, net | $ 5,831 | $ 6,358 | |
Minimum | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 1 year | ||
Maximum | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 30 years | ||
GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Other intangible assets, net | $ 4,005 | ||
Customer relationships | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 1,240 | ||
Estimated useful lives | 15 years | ||
Patents and technology | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 465 | ||
Estimated useful lives | 10 years | ||
Capitalized software | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 64 | ||
Estimated useful lives | 2 years | ||
Trade names - other | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 45 | ||
Estimated useful lives | 10 years | ||
Favorable lease contracts & others | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 21 | ||
Estimated useful lives | 10 years | ||
Trade names and trademarks | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Indefinite-lived Intangible Assets Acquired | $ 2,100 | ||
In-process research and development | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Indefinite-lived Intangible Assets Acquired | $ 70 |
Business Acquisition - Pro form
Business Acquisition - Pro forma (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | ||||||
Net loss attributable to the Company | $ 38 | $ (357) | $ (357) | $ 46 | $ (19) | $ (311) |
GE Transaction Agreement | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | 5,301 | 16,042 | ||||
Net loss | (198) | (401) | ||||
Net loss attributable to the Company | $ (75) | $ (109) | ||||
Business acquisition, pro forma loss per Class A common stock - basic (in dollars per share) | $ (0.17) | $ (0.26) | ||||
Business acquisition, pro forma loss per Class A common stock - diluted (in dollars per share) | $ (0.17) | $ (0.26) |
Business Held For Sale (Details
Business Held For Sale (Details) - Natural Gas Solutions (NGS) - Disposal group, held-for-sale - USD ($) $ in Millions | Sep. 30, 2018 | Jul. 18, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Sales price | $ 375 | |
Assets | ||
Current receivables | $ 26 | |
Inventories | 27 | |
Property, plant and equipment | 29 | |
Intangible assets | 42 | |
All other assets | 1 | |
Total assets held for sale | 125 | |
Liabilities | ||
Accounts payable | 12 | |
All other liabilities | 10 | |
Total liabilities held for sale | 21 | |
Total net assets held for sale | $ 104 |
Current Receivables (Details)
Current Receivables (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | $ 6,138 | $ 6,345 |
Less: Allowance for doubtful accounts | (329) | (330) |
Total current receivables, net | 5,809 | 6,015 |
Customer receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | 4,789 | 4,700 |
Related parties | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | 675 | 801 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | $ 674 | $ 844 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Inventory, Net [Abstract] | |||||
Inventory valuation reserves | $ 455 | $ 455 | $ 360 | ||
Finished goods | 2,626 | 2,626 | 2,577 | ||
Work in process and raw material | 2,055 | 2,055 | 1,930 | ||
Total inventories, net | 4,681 | 4,681 | $ 4,507 | ||
Inventory impairment | $ 12 | $ 12 | $ 88 | $ 31 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | ||||
Balance at December 31, 2016, gross | $ 10,434 | |||
Goodwill impairment | (3,754) | |||
Goodwill [Roll Forward] | ||||
Goodwill, net, beginning balance | $ 19,927 | $ 19,927 | $ 6,680 | |
Goodwill, acquisition | 13,052 | |||
Goodwill, currency exchange and others | (48) | 195 | ||
Goodwill, net, ending balance | 20,790 | 19,927 | ||
Operating segments | Oilfield Services | ||||
Goodwill [Line Items] | ||||
Balance at December 31, 2016, gross | 2,779 | |||
Goodwill impairment | (2,633) | |||
Goodwill [Roll Forward] | ||||
Goodwill, net, beginning balance | 13,205 | 13,205 | 146 | |
Goodwill, acquisition | 13,052 | |||
Goodwill, currency exchange and others | 3 | 7 | ||
Goodwill, purchase accounting adjustments | (154) | |||
Goodwill, net, ending balance | 13,054 | 13,205 | ||
Operating segments | Oilfield Equipment | ||||
Goodwill [Line Items] | ||||
Balance at December 31, 2016, gross | 3,852 | |||
Goodwill impairment | (867) | |||
Goodwill [Roll Forward] | ||||
Goodwill, net, beginning balance | 3,034 | 3,034 | 2,985 | |
Goodwill, acquisition | 0 | |||
Goodwill, currency exchange and others | (16) | 49 | ||
Goodwill, purchase accounting adjustments | 242 | |||
Goodwill, net, ending balance | 3,260 | 3,034 | ||
Operating segments | Turbomachinery & Process Solutions | ||||
Goodwill [Line Items] | ||||
Balance at December 31, 2016, gross | 1,814 | |||
Goodwill impairment | 0 | |||
Goodwill [Roll Forward] | ||||
Goodwill, net, beginning balance | 1,906 | 1,906 | 1,814 | |
Goodwill, acquisition | 0 | |||
Goodwill, currency exchange and others | (24) | 92 | ||
Goodwill, purchase accounting adjustments | 394 | |||
Goodwill, net, ending balance | 2,276 | 1,906 | ||
Operating segments | Digital Solutions | ||||
Goodwill [Line Items] | ||||
Balance at December 31, 2016, gross | 1,989 | |||
Goodwill impairment | $ (254) | |||
Goodwill [Roll Forward] | ||||
Goodwill, net, beginning balance | 1,782 | 1,782 | 1,735 | |
Goodwill, acquisition | 0 | |||
Goodwill, currency exchange and others | (11) | 47 | ||
Goodwill, purchase accounting adjustments | 429 | |||
Goodwill, net, ending balance | 2,200 | $ 1,782 | ||
GE Transaction Agreement | ||||
Goodwill [Roll Forward] | ||||
Goodwill, purchase accounting adjustments | $ 911 | |||
GE Transaction Agreement | Operating segments | ||||
Goodwill [Roll Forward] | ||||
Goodwill, acquisition | 13,963 | |||
GE Transaction Agreement | Operating segments | Oilfield Services | ||||
Goodwill [Roll Forward] | ||||
Goodwill, acquisition | $ 12,898 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Intangible Assets by Type (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Adjustments [Abstract] | ||
Finite-lived intangible assets, gross | $ 6,074 | $ 6,276 |
Finite-lived intangible assets, accumulated amortization | (2,465) | (2,115) |
Finite-lived intangible assets, net | 3,609 | 4,161 |
Indefinite-lived intangible assets | 2,222 | 2,197 |
Intangible assets, gross | 8,296 | 8,473 |
Other intangible assets, net | 5,831 | 6,358 |
Technology | ||
Inventory Adjustments [Abstract] | ||
Finite-lived intangible assets, gross | 1,115 | 1,177 |
Finite-lived intangible assets, accumulated amortization | (517) | (440) |
Finite-lived intangible assets, net | 598 | 737 |
Customer relationships | ||
Inventory Adjustments [Abstract] | ||
Finite-lived intangible assets, gross | 3,120 | 3,202 |
Finite-lived intangible assets, accumulated amortization | (922) | (819) |
Finite-lived intangible assets, net | 2,198 | 2,383 |
Capitalized software | ||
Inventory Adjustments [Abstract] | ||
Finite-lived intangible assets, gross | 1,123 | 1,130 |
Finite-lived intangible assets, accumulated amortization | (800) | (697) |
Finite-lived intangible assets, net | 323 | 433 |
Trade names and trademarks | ||
Inventory Adjustments [Abstract] | ||
Finite-lived intangible assets, gross | 702 | 757 |
Finite-lived intangible assets, accumulated amortization | (225) | (159) |
Finite-lived intangible assets, net | 477 | 598 |
Other | ||
Inventory Adjustments [Abstract] | ||
Finite-lived intangible assets, gross | 14 | 10 |
Finite-lived intangible assets, accumulated amortization | (1) | 0 |
Finite-lived intangible assets, net | $ 13 | $ 10 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of Future Estimated Amortization Expense (Details) $ in Millions | Sep. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2018 | $ 89 |
2,019 | 354 |
2,020 | 316 |
2,021 | 272 |
2,022 | 233 |
2,023 | $ 215 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||||
Number of reporting units | segment | 4 | |||
Amortization expense for intangible assets included in net income | $ 112 | $ 152 | $ 352 | $ 301 |
Trade names and trademarks | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense for intangible assets included in net income | $ 11 | $ 80 | ||
Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives | 1 year | |||
Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives | 30 years | |||
Income Approach Valuation Technique | Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill Impairment, Valuation Discount Rate | 10.00% | |||
Income Approach Valuation Technique | Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill Impairment, Valuation Discount Rate | 11.50% |
Contract and Other Deferred A_3
Contract and Other Deferred Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jan. 01, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Contract assets (revenue in excess of billings) | $ 1,735 | $ 1,735 | $ 1,684 | $ 1,233 | ||
Deferred inventory costs | 251 | 251 | 360 | $ 276 | ||
Non-recurring engineering costs | 15 | 15 | 0 | |||
Contract and other deferred assets | 2,001 | 2,001 | 2,044 | |||
Revenue recognized from performance obligations satisfied in previous periods | 3 | $ 10 | 25 | $ 50 | ||
Long-term product service agreements | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Contract assets (revenue in excess of billings) | 608 | 608 | 589 | |||
Long-term equipment contract revenue | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Contract assets (revenue in excess of billings) | $ 1,127 | $ 1,127 | $ 1,095 |
Progress Collections and Defe_3
Progress Collections and Deferred Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jan. 01, 2017 | |
Disaggregation of Revenue [Line Items] | ||||||
Progress collections and deferred income (contract liabilities) | $ 1,587 | $ 1,587 | $ 1,775 | $ 2,038 | ||
Revenue recognized, included in contract liability | 281 | $ 254 | 1,287 | $ 1,289 | ||
Progress collections | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Progress collections and deferred income (contract liabilities) | 1,433 | 1,433 | 1,456 | |||
Deferred income | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Progress collections and deferred income (contract liabilities) | $ 154 | $ 154 | $ 319 |
Borrowings - Short-term and lon
Borrowings - Short-term and long-term borrowings (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | |
Short-term borrowings | |||
Current portion of long-term borrowings | $ 0 | $ 639 | |
Total short-term borrowings | [1] | 1,000 | 2,037 |
Long-term borrowings | |||
Capital leases | 107 | 87 | |
Other long-term borrowings | 5 | 22 | |
Total long-term borrowings | 6,293 | 6,312 | |
Total borrowings | $ 7,293 | 8,349 | |
3.2% Senior Notes due August 2021 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 3.20% | ||
2.773% Senior Notes due December 2022 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 2.773% | ||
8.55% Debentures due June 2024 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 8.55% | ||
3.337% Senior Notes due December 2027 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 3.337% | ||
6.875% Notes due January 2029 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.875% | ||
5.125% Notes due September 2040 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.125% | ||
4.08% Senior Notes due December 2047 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 4.08% | ||
Senior Notes | 3.2% Senior Notes due August 2021 | |||
Long-term borrowings | |||
Long-term borrowings | $ 524 | 526 | |
Senior Notes | 2.773% Senior Notes due December 2022 | |||
Long-term borrowings | |||
Long-term borrowings | 1,245 | 1,244 | |
Senior Notes | 3.337% Senior Notes due December 2027 | |||
Long-term borrowings | |||
Long-term borrowings | 1,342 | 1,342 | |
Senior Notes | 6.875% Notes due January 2029 | |||
Long-term borrowings | |||
Long-term borrowings | 295 | 308 | |
Senior Notes | 5.125% Notes due September 2040 | |||
Long-term borrowings | |||
Long-term borrowings | 1,307 | 1,311 | |
Senior Notes | 4.08% Senior Notes due December 2047 | |||
Long-term borrowings | |||
Long-term borrowings | 1,336 | 1,337 | |
Debentures | 8.55% Debentures due June 2024 | |||
Long-term borrowings | |||
Long-term borrowings | 132 | 135 | |
Short-term bank borrowings | |||
Short-term borrowings | |||
Short-term borrowings | 20 | 171 | |
Short-term borrowings from GE | |||
Short-term borrowings | |||
Short-term borrowings | 936 | 1,124 | |
Other borrowings | |||
Short-term borrowings | |||
Short-term borrowings | $ 44 | $ 103 | |
[1] | Total assets include $936 million and $1,124 million of assets held on behalf of GE, of which $780 million and $997 million is cash and cash equivalents and $156 million and $127 million is investment securities at September 30, 2018 and December 31, 2017, respectively, and a corresponding amount of liability is reported in short-term borrowings. See "Note 17. Related Party Transactions" for further details. |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) - USD ($) | Jul. 03, 2017 | Dec. 31, 2017 | Sep. 30, 2018 | Dec. 11, 2017 |
Line of Credit Facility [Line Items] | ||||
Estimated fair value of debt | $ 8,466,000,000 | $ 6,983,000,000 | ||
2017 Credit Agreement | Revolving credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, term | 5 years | |||
Line of credit facility, maximum borrowing capacity | $ 3,000,000,000 | |||
Baker Hughes Co-Obligor, Inc. | BHGE LLC | ||||
Line of Credit Facility [Line Items] | ||||
Ownership percentage | 100.00% | |||
Senior Notes | Private Placement | BHGE LLC | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, face | $ 3,950,000,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - Pension Benefits | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)plan | Sep. 30, 2017USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Multiemployer plan, contributions by employer | $ | $ 46,000,000 | $ 35,000,000 | $ 126,000,000 | $ 106,000,000 |
Pension assets or obligations, threshold, per plan | $ | $ 20,000,000 | $ 20,000,000 | ||
U.S. | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Number of plans | plan | 7 | |||
Non-U.S. Pension Benefits | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Number of plans | plan | 6 |
Employee Benefit Plans - Net pe
Employee Benefit Plans - Net period cost (Details) - Pension Benefits - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Components of net periodic benefit cost [Abstract] | ||||
Service cost | $ 5 | $ 16 | $ 15 | $ 24 |
Interest cost | 18 | 18 | 54 | 32 |
Expected return on plan assets | (30) | (31) | (90) | (51) |
Amortization of net actuarial loss | 2 | 4 | 6 | 9 |
Net periodic cost (benefit) | $ (5) | $ 7 | $ (15) | $ 14 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit) | $ 110 | $ 114 | $ 86 | $ 112 | |
U.S. income tax rate | 21.00% | ||||
Tax Cuts and Jobs Act of 2017, Income tax expense (benefit) | $ (168) | ||||
Loss with no tax benefit, valuation allowance | $ 82 | 124 | |||
Loss with no tax benefit, jurisdiction | $ 22 | ||||
General Electric Oil & Gas | U.S. and Foreign Authorities | |||||
Investments, Owned, Federal Income Tax Note [Line Items] | |||||
Business combination, earnings attributable to tax, before tax, percent | 100.00% |
Equity (Details)
Equity (Details) - $ / shares | Jul. 02, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jul. 03, 2017 |
Class of Stock [Line Items] | |||||||
Preferred stock authorized (in shares) | 50,000,000 | 50,000,000 | |||||
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||
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) | 412,000,000 | 412,000,000 | |||||
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) | 688,000,000 | 688,000,000 | |||||
GE Transaction Agreement | General Electric Company | |||||||
Class of Stock [Line Items] | |||||||
Approximate interest to be acquired | 62.50% | 62.50% | 62.50% | ||||
GE Transaction Agreement | General Electric Company | Common Class B | |||||||
Class of Stock [Line Items] | |||||||
Approximate interest to be acquired | 62.50% | ||||||
Cash Dividend | Common Class A | |||||||
Class of Stock [Line Items] | |||||||
Cash dividends per share (in dollars per share) | $ 0.17 | $ 0.18 | $ 0.17 | $ 0.54 | $ 0.17 |
Equity - Changes in Number of S
Equity - Changes in Number of Shares Outstanding (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Stock repurchase program, authorized amount | $ 3,000 | |
Common Stock | Common Class A | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance (in shares) | 422,208,000 | |
Treasury shares canceled | (11,500,992) | |
Ending Balance (in shares) | 412,161,000 | |
Stock repurchase program, acquired value | $ 1,100 | |
Stock repurchase program, acquired value | $ 374 | |
Common Stock | Common Class B | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance (in shares) | 706,985,000 | |
Treasury shares canceled | (19,241,000) | |
Ending Balance (in shares) | 687,743,000 | |
Stock repurchase program, shares repurchased | (19,241,160) | |
Stock repurchase program, acquired value | $ 626 | |
Restricted Stock Units (RSUs) | Common Stock | Common Class A | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Issue of shares upon vesting of restricted stock units | 818,000 | |
Restricted Stock Units (RSUs) | Common Stock | Common Class B | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Issue of shares upon vesting of restricted stock units | 0 | |
Options | Common Stock | Common Class A | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Issue of shares on exercises of stock options | 636,000 | |
Options | Common Stock | Common Class B | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Issue of shares on exercises of stock options | 0 | |
BHGE LLC | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Stock repurchase program, authorized amount | $ 1,500 |
Equity - Accumulated Other Comp
Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | Jul. 02, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | $ 16,203 | $ 36,817 | $ 16,203 | $ 14,280 | $ 38,410 | $ 14,280 | |
Other comprehensive income (loss) | (90) | $ 271 | 271 | (66) | (313) | 205 | |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 56 | (169) | 195 | (172) | |||
Less: Reallocation of AOCL based on ownership of GE and previous Baker Hughes shareholders | 0 | ||||||
Ending Balance | 36,563 | 39,333 | 39,333 | 16,203 | 36,563 | 39,333 | |
Investment Securities, Parent | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | 0 | 1 | 0 | ||||
Ending Balance | 0 | 0 | 0 | 0 | 0 | ||
Investment Securities | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Other comprehensive income (loss) before reclassifications | (2) | 40 | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | (39) | |||||
Deferred taxes | (1) | 1 | |||||
Other comprehensive income (loss) | (3) | 2 | |||||
Investment Securities, Noncontrolling Interest | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | (2) | 2 | |||||
Less: Other adjustments | 0 | ||||||
Less: Reallocation of AOCL based on ownership of GE and previous Baker Hughes shareholders | 0 | ||||||
Foreign Currency Translation Adjustment, Parent | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | (1,795) | (682) | (1,795) | ||||
Ending Balance | (799) | (599) | (599) | (799) | (599) | ||
Foreign Currency Translation Adjustments | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Other comprehensive income (loss) before reclassifications | (312) | 202 | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | |||||
Deferred taxes | 0 | (10) | |||||
Other comprehensive income (loss) | (312) | 192 | |||||
Foreign Currency Translation Adjustment, Noncontrolling Interest | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | (195) | 166 | |||||
Less: Other adjustments | 0 | ||||||
Less: Reallocation of AOCL based on ownership of GE and previous Baker Hughes shareholders | (1,170) | ||||||
Cash Flow Hedges, Parent | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | (10) | 1 | (10) | ||||
Ending Balance | 0 | 3 | 3 | 0 | 3 | ||
Cash Flow Hedges | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Other comprehensive income (loss) before reclassifications | (1) | 12 | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 9 | |||||
Deferred taxes | 0 | (4) | |||||
Other comprehensive income (loss) | (1) | 17 | |||||
Cash Flow Hedges, Noncontrolling Interest | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 0 | 5 | |||||
Less: Other adjustments | 0 | ||||||
Less: Reallocation of AOCL based on ownership of GE and previous Baker Hughes shareholders | (1) | ||||||
Benefit Plans, Parent | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | (83) | (23) | (83) | ||||
Ending Balance | (22) | (38) | (38) | (22) | (38) | ||
Benefit Plans | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Other comprehensive income (loss) before reclassifications | 5 | (11) | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | (1) | |||||
Deferred taxes | (2) | 6 | |||||
Other comprehensive income (loss) | 3 | (6) | |||||
Benefit Plans, Noncontrolling Interest | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 2 | (1) | |||||
Less: Other adjustments | 13 | ||||||
Less: Reallocation of AOCL based on ownership of GE and previous Baker Hughes shareholders | (63) | ||||||
Accumulated Other Comprehensive Loss | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | (1,957) | (787) | (1,957) | (1,888) | (703) | (1,888) | |
Other comprehensive income (loss) | (34) | 102 | (69) | (118) | |||
Less: Reallocation of AOCL based on ownership of GE and previous Baker Hughes shareholders | $ 1,234 | ||||||
Ending Balance | $ (821) | $ (634) | $ (634) | $ (1,957) | (821) | (634) | |
Accumulated Other Comprehensive Loss | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Other comprehensive income (loss) before reclassifications | (310) | 243 | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | (31) | |||||
Deferred taxes | (3) | (7) | |||||
Other comprehensive income (loss) | (313) | 205 | |||||
Accumulated Other Comprehensive Income (Loss), Noncontrolling Interest | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | $ (195) | 172 | |||||
Less: Other adjustments | 13 | ||||||
Less: Reallocation of AOCL based on ownership of GE and previous Baker Hughes shareholders | $ (1,234) |
Equity - Non-controlling intere
Equity - Non-controlling interest (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Noncontrolling Interest [Line Items] | ||
Noncontrolling interests | $ 22,823 | $ 24,133 |
Other noncontrolling interests | 105 | 140 |
General Electric Company | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interests | $ 22,718 | $ 23,993 |
Earnings Per Share - Basic and
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 | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share | ||||||
Net income (loss) | $ 38 | $ (357) | $ (357) | $ 46 | $ (19) | $ (311) |
Less: Net income attributable to GE O&G pre-merger | 0 | 0 | 0 | 42 | ||
Less: Net income (loss) attributable to noncontrolling interests | 25 | (223) | (83) | (219) | ||
Net income (loss) attributable to Baker Hughes, a GE company | $ 13 | $ (134) | $ 64 | $ (134) | ||
Net income (loss) per share attributable to common stockholders: | ||||||
Earnings per share, basic (in dollars per share) | $ 0.03 | $ (0.31) | $ 0.15 | $ (0.31) | ||
Earnings per share, diluted (in dollars per share) | $ 0.03 | $ (0.31) | $ 0.15 | $ (0.31) | ||
Common Class A | ||||||
Weighted average shares outstanding: | ||||||
Weighted average common shares outstanding, basic (in shares) | 412 | 428 | 416 | 428 | ||
Weighted average common shares outstanding, diluted (in shares) | 414 | 428 | 417 | 428 | ||
Net income (loss) per share attributable to common stockholders: | ||||||
Earnings per share, basic (in dollars per share) | $ 0.03 | $ (0.31) | $ 0.15 | $ (0.31) | ||
Earnings per share, diluted (in dollars per share) | $ 0.03 | $ (0.31) | $ 0.15 | $ (0.31) |
Earnings Per Share - Additional
Earnings Per Share - Additional details (Details) shares in Millions | 9 Months Ended |
Sep. 30, 2018shares | |
Common Class A | Employee stock option | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from diluted EPS calculation (in options) | 4 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, notional amount | $ 7,200 | $ 10,200 | |
Derivative, notional amount, net | 2,800 | $ 3,300 | |
Derivative, transfer to earnings | $ 1 | ||
Cash flow hedging | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, term | 2 years | 3 years | |
Related party amount, due to related party | GE | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Investment securities | $ 156 | $ 127 | |
Non-U.S. debt securities | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, term | 3 years | ||
Equity securities | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gross unrealized gain (losses) recorded in earnings | $ (9) | $ 41 |
Financial Instruments - Recurri
Financial Instruments - Recurring fair value measurements (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 72 | $ 150 |
Total assets | 72 | 150 |
Derivative liability | (77) | (95) |
Total liabilities | (77) | (95) |
Fair value, measurements, recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 72 | 150 |
Investment securities | 359 | 393 |
Total assets | 431 | 543 |
Derivative liability | (77) | (95) |
Total liabilities | (77) | (95) |
Fair value, measurements, recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Investment securities | 63 | 81 |
Total assets | 63 | 81 |
Derivative liability | 0 | 0 |
Total liabilities | 0 | 0 |
Fair value, measurements, recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 72 | 150 |
Investment securities | 0 | 8 |
Total assets | 72 | 158 |
Derivative liability | (77) | (95) |
Total liabilities | (77) | (95) |
Fair value, measurements, recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Investment securities | 296 | 304 |
Total assets | 296 | 304 |
Derivative liability | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
Financial Instruments - Reconci
Financial Instruments - Reconciliation of recurring Level 3 fair value measurements (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Beginning balance | $ 304 |
Purchases | 47 |
Proceeds at maturity | (55) |
Ending balance | $ 296 |
Financial Instruments - Investm
Financial Instruments - Investment Securities (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, amortized cost | $ 359 | $ 391 |
Available-for-sale, gross unrealized gains | 0 | 2 |
Available-for-sale, gross unrealized losses | 0 | 0 |
Available-for-sale, estimated fair value | 359 | 393 |
Non-U.S. debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, amortized cost | 296 | 310 |
Available-for-sale, gross unrealized gains | 0 | 2 |
Available-for-sale, gross unrealized losses | 0 | 0 |
Available-for-sale, estimated fair value | 296 | 312 |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, amortized cost | 63 | 81 |
Available-for-sale, gross unrealized gains | 0 | 0 |
Available-for-sale, gross unrealized losses | 0 | 0 |
Available-for-sale, estimated fair value | $ 63 | $ 81 |
Financial Instruments - Derivat
Financial Instruments - Derivatives and hedging (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Assets, fair value | $ 72 | $ 150 |
Liabilities, fair value | (77) | (95) |
Currency exchange contracts | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Assets, fair value | 0 | 6 |
Liabilities, fair value | (2) | 0 |
Currency exchange contracts | Not designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Assets, fair value | 72 | 144 |
Liabilities, fair value | (73) | (95) |
Commodity derivatives | Not designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Assets, fair value | 0 | 0 |
Liabilities, fair value | $ (2) | $ 0 |
Financial Instruments - Deriv_2
Financial Instruments - Derivatives (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative assets | $ 72 | $ 150 |
Derivative liability | (77) | (95) |
Net derivatives | $ (5) | $ 55 |
Financial Instruments - Hedges
Financial Instruments - Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Designated as hedging instrument | Cash flow hedging | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Effect on hedging instrument | $ (2) | $ 9 | $ (1) | $ 12 |
Effect on underlying | 2 | (9) | 1 | (12) |
Effect on earnings | 0 | 0 | 0 | 0 |
Not designated as hedging instrument, economic hedge | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Effect on hedging instrument | (13) | 144 | (6) | 145 |
Effect on underlying | 1 | (174) | (24) | (174) |
Effect on earnings | $ (12) | $ (30) | $ (30) | $ (29) |
Financial Instruments - Cash fl
Financial Instruments - Cash flow hedges (Details) - Cash flow hedging - Currency exchange contracts - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Recognized in AOCI | $ (2) | $ 9 | $ (1) | $ 12 |
Gain (Loss) Reclassified from AOCI to Earnings | $ 0 | $ 0 | $ 0 | $ (9) |
Segment Information (Details)
Segment Information (Details) | 9 Months Ended |
Sep. 30, 2018segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 4 |
Segment Information - Operating
Segment Information - Operating profit (loss) by segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Summarized financial information [Abstract] | ||||
Revenues | $ 5,665 | $ 5,301 | $ 16,612 | $ 11,380 |
Income (loss) before income taxes and equity in loss of affiliate | 233 | (230) | 206 | (186) |
Inventory impairment | (12) | (12) | (88) | (31) |
Merger and related costs | (17) | (159) | (113) | (310) |
Other non operating income, net | 6 | 4 | 51 | 62 |
Interest expense, net | (55) | (41) | (164) | (75) |
Operating segments | ||||
Summarized financial information [Abstract] | ||||
Revenues | 5,665 | 5,301 | 16,612 | 11,380 |
Income (loss) before income taxes and equity in loss of affiliate | 475 | 258 | 1,189 | 739 |
Corporate | ||||
Summarized financial information [Abstract] | ||||
Income (loss) before income taxes and equity in loss of affiliate | (98) | (89) | (294) | (279) |
Segment reconciling items | ||||
Summarized financial information [Abstract] | ||||
Inventory impairment | (12) | (12) | (88) | (31) |
Restructuring, impairment and other | (66) | (191) | (374) | (292) |
Merger and related costs | (17) | (159) | (113) | (310) |
Other non operating income, net | 6 | 4 | 51 | 62 |
Interest expense, net | (55) | (41) | (164) | (75) |
Oilfield Services | Operating segments | ||||
Summarized financial information [Abstract] | ||||
Revenues | 2,993 | 2,661 | 8,554 | 3,101 |
Income (loss) before income taxes and equity in loss of affiliate | 231 | 88 | 561 | (35) |
Oilfield Equipment | Operating segments | ||||
Summarized financial information [Abstract] | ||||
Revenues | 631 | 613 | 1,912 | 2,011 |
Income (loss) before income taxes and equity in loss of affiliate | 6 | (41) | (12) | 26 |
Turbomachinery & Process Solutions | Operating segments | ||||
Summarized financial information [Abstract] | ||||
Revenues | 1,389 | 1,414 | 4,233 | 4,644 |
Income (loss) before income taxes and equity in loss of affiliate | 132 | 134 | 364 | 508 |
Digital Solutions | Operating segments | ||||
Summarized financial information [Abstract] | ||||
Revenues | 653 | 614 | 1,913 | 1,624 |
Income (loss) before income taxes and equity in loss of affiliate | $ 106 | $ 77 | $ 275 | $ 240 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Jul. 03, 2017 | |
Related Party Transaction [Line Items] | |||||||
Income tax obligation | $ 110 | $ 114 | $ 86 | $ 112 | |||
GE Transaction Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Cash repayment, threshold | $ 100 | ||||||
GE Transaction Agreement | General Electric Company | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of tax benefits | 100.00% | ||||||
Approximate interest to be acquired | 62.50% | 62.50% | 62.50% | ||||
GE Transaction Agreement | Baker Hughes Incorporated | |||||||
Related Party Transaction [Line Items] | |||||||
Approximate interest to be acquired | 37.50% | ||||||
GE Capital accounts payable program | |||||||
Related Party Transaction [Line Items] | |||||||
Accounts payable, related party | $ 467 | $ 467 | $ 293 | ||||
Accounts Payable, GE and its affiliates | |||||||
Related Party Transaction [Line Items] | |||||||
Accounts payable, related party | 508 | 508 | 575 | ||||
GE | GE’s corporate overhead | |||||||
Related Party Transaction [Line Items] | |||||||
Selling, general and administrative expenses, agreement | $ 55 | ||||||
GE | Intercompany Services Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transaction | 14 | 42 | |||||
GE | Sales of products and services, GE and its affiliates | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transaction | 76 | ||||||
Revenue from related parties | 74 | 133 | 258 | 507 | |||
GE | Purchases, GE and its affiliates | |||||||
Related Party Transaction [Line Items] | |||||||
Related party purchases | 347 | $ 345 | 1,273 | $ 1,026 | |||
GE | Related party amount, due to related party | |||||||
Related Party Transaction [Line Items] | |||||||
Cash held on behalf of GE | 936 | 936 | 1,124 | ||||
Cash and cash equivalents | 780 | 780 | 997 | ||||
Investment securities | $ 156 | 156 | $ 127 | ||||
Common Class B | GE Transaction Agreement | General Electric Company | |||||||
Related Party Transaction [Line Items] | |||||||
Approximate interest to be acquired | 62.50% | ||||||
Common Class A | GE Transaction Agreement | Baker Hughes Incorporated | |||||||
Related Party Transaction [Line Items] | |||||||
Approximate interest to be acquired | 37.50% | ||||||
U.S. and Foreign Authorities | General Electric Company | |||||||
Related Party Transaction [Line Items] | |||||||
Income tax obligation | $ 33 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) € in Millions, $ in Millions | Jul. 31, 2018USD ($) | Feb. 17, 2017USD ($) | Aug. 03, 2016EUR (€) | Sep. 30, 2018EUR (€) | Sep. 30, 2018USD ($)shares |
Loss Contingencies [Line Items] | |||||
Off-balance sheet arrangements | $ 3,500 | ||||
Equipment failure | Pending litigation | Natural Gas Storage System in Northern Germany | |||||
Loss Contingencies [Line Items] | |||||
Value of alleged damages sought | € | € 202 | ||||
Marginal rate on annual prime rate (percent) | 5.00% | ||||
Breach of contract | Pending litigation | Saniteq LLC v. GE Infrastructure Sensing, Inc. | |||||
Loss Contingencies [Line Items] | |||||
Value of alleged damages sought | $ 500 | ||||
Breach of contract | Pending litigation | International Engineering & Construction S.A. (IEC) | |||||
Loss Contingencies [Line Items] | |||||
Value of alleged damages sought | $ 500 | ||||
Damage from fire | Pending litigation | INOES and Naphtachimie | |||||
Loss Contingencies [Line Items] | |||||
Value of alleged damages sought | € | € 250 | ||||
GE Transaction Agreement | Pending litigation | |||||
Loss Contingencies [Line Items] | |||||
Common stock, shares outstanding, appraisal rights (in shares) | shares | 1,875,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Product Warranties (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 164 | $ 74 |
Provisions | 26 | 27 |
Expenditures | (83) | (33) |
Other | 128 | 97 |
Ending balance | $ 235 | $ 165 |
Restructuring, Impairment and_3
Restructuring, Impairment and Other - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | ||||
Restructuring, impairment and other | $ 66 | $ 191 | $ 374 | $ 292 |
Restructuring charges | 49 | 191 | 242 | 264 |
Estimated remaining charges | 107 | 107 | ||
Restructuring Cost and Reserve [Line Items] | ||||
Accelerated amortization | 112 | 152 | 352 | 301 |
Restructuring, impairment and other charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Other asset impairment charges and foreign currency translation gain (loss), realized | 17 | 0 | 132 | 28 |
Currency gain (loss) | (12) | |||
Corporate | ||||
Restructuring and Related Activities [Abstract] | ||||
Restructuring charges | 2 | $ 13 | 23 | $ 17 |
Corporate | Restructuring, impairment and other charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Litigation costs | 25 | |||
Turbomachinery and Process Solutions and Oilfield Services | Operating segments | Restructuring, impairment and other charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business exit costs | 12 | |||
Trade names and trademarks | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Accelerated amortization | $ 11 | $ 80 |
Restructuring, Impairment and_4
Restructuring, Impairment and Other - Schedule of Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | $ 49 | $ 191 | $ 242 | $ 264 |
Property, plant & equipment, net | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 18 | 68 | 55 | 80 |
Employee-related termination expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 15 | 87 | 114 | 126 |
Asset relocation costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 7 | 2 | 20 | 7 |
Environmental remediation costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 0 | 1 | 3 | 8 |
Contract termination fees | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 5 | 16 | 33 | 21 |
Other incremental costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 4 | 17 | 17 | 22 |
Corporate | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 2 | 13 | 23 | 17 |
Oilfield Services | Operating segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 20 | 118 | 119 | 141 |
Oilfield Equipment | Operating segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 8 | 31 | 26 | 41 |
Turbomachinery & Process Solutions | Operating segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | 17 | 16 | 56 | 38 |
Digital Solutions | Operating segments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | $ 2 | $ 13 | $ 18 | $ 27 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Oct. 08, 2018 | Jul. 18, 2018 |
Abu Dhabi National Oil Company (ADNOC) | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Interest to be acquired | 5.00% | |
Consideration transferred | $ 500 | |
Disposal group, held-for-sale | Natural Gas Solutions (NGS) | ||
Subsequent Event [Line Items] | ||
Sales price | $ 375 |
Uncategorized Items - bhge-2018
Label | Element | Value |
Noncontrolling Interest, Increase from Sale of Parent Equity Interest | us-gaap_NoncontrollingInterestIncreaseFromSaleOfParentEquityInterest | $ 0 |
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | 24,874,000,000 |
Noncontrolling Interest, Period Increase (Decrease) | us-gaap_MinorityInterestPeriodIncreaseDecrease | (208,000,000) |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 23,000,000 |
Contribution from Parent | bhge_ContributionfromParent | 7,400,000,000 |
Parent Net Investment, Changes, Increase (Decrease) | bhge_ParentNetInvestmentChangesIncreaseDecrease | (1,177,000,000) |
Noncontrolling Interest [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | (223,000,000) |
Noncontrolling Interest, Increase from Sale of Parent Equity Interest | us-gaap_NoncontrollingInterestIncreaseFromSaleOfParentEquityInterest | 24,218,000,000 |
Other Comprehensive Income (Loss), Net of Tax | us-gaap_OtherComprehensiveIncomeLossNetOfTax | 169,000,000 |
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | 76,000,000 |
Noncontrolling Interest, Period Increase (Decrease) | us-gaap_MinorityInterestPeriodIncreaseDecrease | (116,000,000) |
Noncontrolling Interest, Increase from Business Combination | us-gaap_NoncontrollingInterestIncreaseFromBusinessCombination | 616,000,000 |
Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | 24,798,000,000 |
Noncontrolling Interest, Period Increase (Decrease) | us-gaap_MinorityInterestPeriodIncreaseDecrease | (92,000,000) |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 23,000,000 |
Noncontrolling Interest, Increase from Business Combination | us-gaap_NoncontrollingInterestIncreaseFromBusinessCombination | (1,850,000,000) |
Parent [Member] | ||
Noncontrolling Interest, Increase from Sale of Parent Equity Interest | us-gaap_NoncontrollingInterestIncreaseFromSaleOfParentEquityInterest | (24,218,000,000) |
Contribution from Parent | bhge_ContributionfromParent | 7,400,000,000 |
Parent Net Investment, Changes, Increase (Decrease) | bhge_ParentNetInvestmentChangesIncreaseDecrease | (1,164,000,000) |
AOCI Attributable to Parent [Member] | ||
Noncontrolling Interest, Period Increase (Decrease) | us-gaap_MinorityInterestPeriodIncreaseDecrease | 0 |
Parent Net Investment, Changes, Increase (Decrease) | bhge_ParentNetInvestmentChangesIncreaseDecrease | (13,000,000) |
Retained Earnings [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | (134,000,000) |
Cash Dividend [Member] | ||
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | 198,000,000 |
Cash Dividend [Member] | Noncontrolling Interest [Member] | ||
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | 122,000,000 |
Cash Dividend [Member] | Additional Paid-in Capital [Member] | ||
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | 76,000,000 |
Special Dividend [Member] | ||
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | 7,498,000,000 |
Special Dividend [Member] | Additional Paid-in Capital [Member] | ||
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | $ 7,498,000,000 |