Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 17, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'BAKER HUGHES INC | ' |
Entity Central Index Key | '0000808362 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 435,977,068 |
Consolidated_Condensed_Stateme
Consolidated Condensed Statements of Income (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue: | ' | ' |
Sales | $1,857 | $1,749 |
Services | 3,874 | 3,481 |
Total revenue | 5,731 | 5,230 |
Costs and expenses: | ' | ' |
Cost of sales | 1,501 | 1,384 |
Cost of services | 3,219 | 2,942 |
Research and engineering | 143 | 127 |
Marketing, general and administrative | 316 | 322 |
Total costs and expenses | 5,179 | 4,775 |
Operating income | 552 | 455 |
Interest expense, net | -57 | -55 |
Income before income taxes | 495 | 400 |
Income taxes | -159 | -132 |
Net income | 336 | 268 |
Net income attributable to noncontrolling interests | -8 | -1 |
Net income attributable to Baker Hughes | $328 | $267 |
Basic earnings per share attributable to Baker Hughes | $0.75 | $0.60 |
Diluted earnings per share attributable to Baker Hughes | $0.74 | $0.60 |
Cash dividends per share | $0.15 | $0.15 |
Consolidated_Condensed_Stateme1
Consolidated Condensed Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net income | $336 | $268 |
Other comprehensive income (loss): | ' | ' |
Foreign currency translation adjustments during the period | -26 | -80 |
Pension and other postretirement benefits, net of tax | -4 | 10 |
Other comprehensive loss | -30 | -70 |
Comprehensive income | 306 | 198 |
Comprehensive income attributable to noncontrolling interests | -8 | -1 |
Comprehensive income attributable to Baker Hughes | $298 | $197 |
Consolidated_Condensed_Balance
Consolidated Condensed Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $1,200 | $1,399 |
Accounts receivable - less allowance for doubtful accounts (2014 - $244; 2013 - $238) | 5,267 | 5,138 |
Inventories, net | 3,995 | 3,884 |
Deferred income taxes | 364 | 380 |
Other current assets | 440 | 494 |
Total current assets | 11,266 | 11,295 |
Property, plant and equipment - less accumulated depreciation (2014 - $7,503; 2013 - $7,219) | 9,055 | 9,076 |
Goodwill | 5,997 | 5,966 |
Intangible assets, net | 862 | 883 |
Other assets | 716 | 714 |
Total assets | 27,896 | 27,934 |
Current liabilities: | ' | ' |
Accounts payable | 2,486 | 2,574 |
Short-term debt and current portion of long-term debt | 625 | 499 |
Accrued employee compensation | 662 | 778 |
Income taxes payable | 300 | 213 |
Other accrued liabilities | 453 | 514 |
Total current liabilities | 4,526 | 4,578 |
Long-term debt | 3,878 | 3,882 |
Deferred income taxes and other tax liabilities | 728 | 821 |
Liabilities for pensions and other postretirement benefits | 582 | 583 |
Other liabilities | 181 | 158 |
Commitments and contingencies | ' | ' |
Equity: | ' | ' |
Common stock | 436 | 438 |
Capital in excess of par value | 7,195 | 7,341 |
Retained earnings | 10,700 | 10,438 |
Accumulated other comprehensive loss | -534 | -504 |
Baker Hughes stockholders’ equity | 17,797 | 17,713 |
Noncontrolling interests | 204 | 199 |
Total equity | 18,001 | 17,912 |
Total liabilities and equity | $27,896 | $27,934 |
Consolidated_Condensed_Balance1
Consolidated Condensed Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Allowance for doubtful accounts | $244 | $238 |
Accumulated depreciation | $7,503 | $7,219 |
Consolidated_Condensed_Stateme2
Consolidated Condensed Statements of Changes in Equity (USD $) | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests |
In Millions, unless otherwise specified | ||||||
Balance at Dec. 31, 2012 | $17,268 | $441 | $7,495 | $9,609 | ($476) | $199 |
Comprehensive income: | ' | ' | ' | ' | ' | ' |
Net income | 268 | ' | ' | 267 | ' | 1 |
Other comprehensive income (loss) | -70 | ' | ' | ' | -70 | ' |
Activity related to stock plans | -12 | 1 | -13 | ' | ' | ' |
Stock-based compensation | 36 | ' | 36 | ' | ' | ' |
Cash dividends ($0.15 per share) | -66 | ' | ' | -66 | ' | ' |
Net activity related to noncontrolling interests | -6 | ' | ' | ' | ' | -6 |
Balance at Mar. 31, 2013 | 17,418 | 442 | 7,518 | 9,810 | -546 | 194 |
Balance at Dec. 31, 2013 | 17,912 | 438 | 7,341 | 10,438 | -504 | 199 |
Comprehensive income: | ' | ' | ' | ' | ' | ' |
Net income | 336 | ' | ' | 328 | ' | 8 |
Other comprehensive income (loss) | -30 | ' | ' | ' | -30 | ' |
Activity related to stock plans | 20 | 1 | 19 | ' | ' | ' |
Repurchase and retirement of common stock | -200 | -3 | -197 | ' | ' | ' |
Stock-based compensation | 32 | ' | 32 | ' | ' | ' |
Cash dividends ($0.15 per share) | -66 | ' | ' | -66 | ' | ' |
Net activity related to noncontrolling interests | -3 | ' | ' | ' | ' | -3 |
Balance at Mar. 31, 2014 | $18,001 | $436 | $7,195 | $10,700 | ($534) | $204 |
Consolidated_Condensed_Stateme3
Consolidated Condensed Statements of Changes in Equity (Parenthetical) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Statement of Stockholders' Equity [Abstract] | ' | ' |
Cash dividends per share | $0.15 | $0.15 |
Consolidated_Condensed_Stateme4
Consolidated Condensed Statements of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $336 | $268 |
Adjustments to reconcile net income to net cash flows from operating activities: | ' | ' |
Depreciation and amortization | 437 | 415 |
Other noncash items | -33 | -3 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -161 | -378 |
Inventories | -116 | -124 |
Accounts payable | -85 | 312 |
Other operating items, net | -75 | -104 |
Net cash flows provided by operating activities | 303 | 386 |
Cash flows from investing activities: | ' | ' |
Expenditures for capital assets | -439 | -490 |
Proceeds from disposal of assets | 100 | 94 |
Other investing items, net | -25 | 0 |
Net cash flows used in investing activities | -364 | -396 |
Cash flows from financing activities: | ' | ' |
Net proceeds of commercial paper borrowings and other debt with three months or less original maturity | 125 | 200 |
Net repayments of short-term debt with greater than three months original maturity | -11 | -24 |
Repurchase of common stock | -200 | 0 |
Dividends paid | -66 | -66 |
Other financing items, net | 14 | -10 |
Net cash flows (used in) provided by financing activities | -138 | 100 |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | -4 |
(Decrease) increase in cash and cash equivalents | -199 | 86 |
Cash and cash equivalents, beginning of period | 1,399 | 1,015 |
Cash and cash equivalents, end of period | 1,200 | 1,101 |
Supplemental cash flows disclosures: | ' | ' |
Income taxes paid, net of refunds | 57 | 133 |
Interest paid | 73 | 71 |
Supplemental disclosure of noncash investing activities: | ' | ' |
Capital expenditures included in accounts payable | $93 | $80 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies - (Notes) | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations | |
Baker Hughes Incorporated (“Baker Hughes,” “Company,” “we,” “our,” or “us,”) is a leading supplier of oilfield services, products, technology and systems used for drilling, formation evaluation, completion and production, pressure pumping, and reservoir development in the worldwide oil and natural gas industry. We also provide products and services for other businesses, including downstream chemicals, and process and pipeline services. | |
Basis of Presentation | |
Our unaudited consolidated condensed financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. These unaudited consolidated condensed financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 Annual Report”). We believe the unaudited consolidated condensed financial statements included herein reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. In the Notes to Unaudited Consolidated Condensed Financial Statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. |
Venezuelan_Currency_Devaluatio
Venezuelan Currency Devaluation - (Notes) | 3 Months Ended |
Mar. 31, 2013 | |
Foreign Currency [Abstract] | ' |
Venezuelan Currency Devaluation | ' |
VENEZUELAN CURRENCY DEVALUATION | |
In January 2014, the Venezuelan government modified the currency exchange system whereby the official exchange rate of 6.3 Bolivares Fuertes (“BsF”) to the U.S. Dollar applies to certain economic sectors related to purchases of “essential goods and services” while other sectors of the economy apply an exchange rate determined by an auction process conducted by Venezuela's Complimentary System of Foreign Currency Administration (“SICAD 1”). Participation in the SICAD 1 mechanism is controlled by the Venezuelan government and is limited to certain companies that operate in designated industry sectors. In late March 2014, a third currency exchange mechanism was established (“SICAD 2”), which is expected to allow other economic sectors and companies to participate in the auction process. | |
While the functional currency of our operations in Venezuela is the U.S. Dollar, a portion of the transactions and balances are denominated in BsF. For financial reporting purposes, we remeasure the local currency balances into U.S. Dollars at the official exchange rate of 6.3 BsF to the U.S. Dollar. We are assessing the applicability and impact, if any, on our business of the change in the currency exchange mechanisms and exchange rates. We do not believe the changes will have a material impact on our financial position, results of operations or cash flows. If we applied a higher exchange rate, we would incur a loss in 2014. For example, if we were to apply an exchange rate of 10.7 BsF per U.S. Dollar, the closing rate of the last SICAD 1 auction in March 2014, to our local currency denominated balances at March 31, 2014, it would result in a loss of approximately $7 million. | |
In February 2013, Venezuela's currency was devalued from the prior exchange rate of 4.3 BsF per U.S. Dollar to 6.3 BsF per U.S. Dollar, which applies to our local currency denominated balances. The impact of this devaluation was a loss of $23 million that was recorded in marketing, general and administrative expense in the first quarter of 2013. |
Earnings_Per_Share_Notes
Earnings Per Share - (Notes) | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Earnings Per Share [Abstract] | ' | |||||
Earnings Per Share | ' | |||||
EARNINGS PER SHARE | ||||||
A reconciliation of the number of shares used for the basic and diluted earnings per share (“EPS”) computations is as follows: | ||||||
Three Months Ended March 31, | ||||||
2014 | 2013 | |||||
Weighted average common shares outstanding for basic EPS | 439 | 443 | ||||
Effect of dilutive securities - stock plans | 2 | 1 | ||||
Adjusted weighted average common shares outstanding for diluted EPS | 441 | 444 | ||||
Future potentially dilutive shares excluded from diluted EPS: | ||||||
Options with an exercise price greater than the average market price for the period | 3 | 8 | ||||
Inventories_Notes
Inventories - (Notes) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
INVENTORIES | ||||||||
Inventories, net of reserves, are comprised of the following: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 3,541 | $ | 3,438 | ||||
Work in process | 234 | 215 | ||||||
Raw materials | 220 | 231 | ||||||
Total inventories | $ | 3,995 | $ | 3,884 | ||||
Intangible_Assets_Notes
Intangible Assets - (Notes) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||
Intangible Assets Disclosure | ' | |||||||||||||||||||||||
INTANGIBLE ASSETS | ||||||||||||||||||||||||
Intangible assets are comprised of the following: | ||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Gross | Less: | Net | Gross | Less: | Net | |||||||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||||||||||
Technology | $ | 817 | $ | 350 | $ | 467 | $ | 814 | $ | 337 | $ | 477 | ||||||||||||
Customer relationships | 496 | 167 | 329 | 494 | 157 | 337 | ||||||||||||||||||
Trade names | 120 | 85 | 35 | 120 | 82 | 38 | ||||||||||||||||||
Other (1) | 43 | 12 | 31 | 43 | 12 | 31 | ||||||||||||||||||
Total intangible assets | $ | 1,476 | $ | 614 | $ | 862 | $ | 1,471 | $ | 588 | $ | 883 | ||||||||||||
(1) | Includes indefinite-lived intangibles of $27 million at March 31, 2014 and December 31, 2013 related to in-process research and development projects. | |||||||||||||||||||||||
Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 3 to 30 years. Amortization expense included in net income for the three months ended March 31, 2014 was $26 million, as compared to $30 million reported in 2013 for the same period. | ||||||||||||||||||||||||
Amortization expense of these intangibles over the remainder of 2014 and for each of the subsequent five fiscal years is expected to be as follows: | ||||||||||||||||||||||||
Year | Estimated Amortization Expense | |||||||||||||||||||||||
Remainder of 2014 | $ | 78 | ||||||||||||||||||||||
2015 | 97 | |||||||||||||||||||||||
2016 | 95 | |||||||||||||||||||||||
2017 | 91 | |||||||||||||||||||||||
2018 | 86 | |||||||||||||||||||||||
2019 | 83 | |||||||||||||||||||||||
Financial_Instruments_Notes
Financial Instruments - (Notes) | 3 Months Ended |
Mar. 31, 2014 | |
Fair Value Disclosures [Abstract] | ' |
Financial Instruments | ' |
FINANCIAL INSTRUMENTS | |
Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable, debt and foreign currency forward contracts. Except as described below, the estimated fair value of such financial instruments at March 31, 2014 and December 31, 2013 approximates their carrying value as reflected in our unaudited consolidated condensed balance sheets. | |
The estimated fair value of total debt at March 31, 2014 and December 31, 2013 was $5,097 million and $4,857 million, respectively, which differs from the carrying amounts of $4,503 million and $4,381 million, respectively, included in our unaudited consolidated condensed balance sheets. The fair value was determined using quoted period-end market prices. |
Segment_Information_Notes
Segment Information - (Notes) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Segment Information | ' | |||||||||||||||
SEGMENT INFORMATION | ||||||||||||||||
We are a supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas business, referred to as oilfield operations, which are managed through operating segments that are aligned with our geographic regions. We also provide services and products to the downstream chemicals, and process and pipeline industries, referred to as Industrial Services. | ||||||||||||||||
The performance of our operating segments is evaluated based on profit before tax, which is defined as income before income taxes and before the following: net interest expense, corporate expenses and certain gains and losses not allocated to the operating segments. | ||||||||||||||||
Summarized financial information is shown in the following table: | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||||||
Segments | Revenue | Profit (Loss) Before Taxes | Revenue | Profit (Loss) Before Taxes | ||||||||||||
North America | $ | 2,776 | $ | 258 | $ | 2,603 | $ | 235 | ||||||||
Latin America | 530 | 55 | 590 | 49 | ||||||||||||
Europe/Africa/Russia Caspian | 996 | 142 | 854 | 93 | ||||||||||||
Middle East/Asia Pacific | 1,108 | 135 | 894 | 116 | ||||||||||||
Industrial Services | 321 | 27 | 289 | 24 | ||||||||||||
Total Operations | 5,731 | 617 | 5,230 | 517 | ||||||||||||
Corporate and other | — | (65 | ) | — | (62 | ) | ||||||||||
Interest expense, net | — | (57 | ) | — | (55 | ) | ||||||||||
Total | $ | 5,731 | $ | 495 | $ | 5,230 | $ | 400 | ||||||||
Employee_Benefit_Plans_Notes
Employee Benefit Plans - (Notes) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Pension and Other Postretirement Benefits Disclosure [Abstract] | ' | |||||||||||||||||||||||
Pension and Other Postretirement Benefits Disclosure [Text Block] | ' | |||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | ||||||||||||||||||||||||
We have both funded and unfunded noncontributory defined benefit pension plans ("Pension Benefits") covering certain employees primarily in the U.S., the United Kingdom, Germany and Canada. We also provide certain postretirement health care benefits (“Other Postretirement Benefits”), through an unfunded plan, to a closed group of U.S. employees who retire and have met certain age and service requirements. | ||||||||||||||||||||||||
The components of net periodic cost are as follows for the three months ended March 31: | ||||||||||||||||||||||||
U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Service cost | $ | 17 | $ | 16 | $ | 3 | $ | 4 | $ | 1 | $ | 2 | ||||||||||||
Interest cost | 7 | 6 | 9 | 8 | 2 | 1 | ||||||||||||||||||
Expected return on plan assets | (11 | ) | (10 | ) | (10 | ) | (10 | ) | — | — | ||||||||||||||
Amortization of prior service credit | — | — | — | — | (1 | ) | (2 | ) | ||||||||||||||||
Amortization of net actuarial loss | 2 | 3 | 1 | 2 | 1 | 1 | ||||||||||||||||||
Other | — | — | — | — | (4 | ) | — | |||||||||||||||||
Net periodic cost | $ | 15 | $ | 15 | $ | 3 | $ | 4 | $ | (1 | ) | $ | 2 | |||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies - (Notes) | 3 Months Ended |
Mar. 31, 2014 | |
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 any currently pending lawsuits or claims against us 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. | |
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. | |
On October 21, 2013, a collective action lawsuit alleging that we failed to pay an as-yet-undetermined class of workers overtime in compliance with the Fair Labor Standards Act was filed titled Zamora et al. v. Baker Hughes Incorporated in the U.S. District Court for the Southern District of Texas, Corpus Christi Division. On October 10, 2013, a class and collective action lawsuit alleging that we failed to pay a nationwide class of workers overtime in compliance with the Fair Labor Standards Act and certain state laws was filed titled Lea et al. v. Baker Hughes, Inc. in the U.S. District Court for the Southern District of Texas, Galveston Division. We are evaluating the background facts and at this time are not able to predict the outcome of these lawsuits or the amount of any loss that may arise from them. | |
On May 30, 2013, we received a Civil Investigative Demand ("CID") from the United States Department of Justice ("DOJ") pursuant to the Antitrust Civil Process Act. The CID seeks documents and information from us for the period from May 29, 2011 through the date of the CID in connection with a DOJ investigation related to pressure pumping services in the United States. We are working with the DOJ to provide the requested documents and information. We are not able to predict what action, if any, might be taken in the future by the DOJ or other governmental authorities as a result of the investigation. | |
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 $1.5 billion at March 31, 2014. 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. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss - (Notes) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | |||||||||||||||
Accumulated Other Comprehensive Loss | ' | |||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ||||||||||||||||
The following tables present the changes in accumulated other comprehensive loss, net of tax: | ||||||||||||||||
Pensions and Other Postretirement Benefits | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||||||
Balance at December 31, 2013 | $ | (217 | ) | $ | (287 | ) | $ | (504 | ) | |||||||
Other comprehensive loss before reclassifications | (4 | ) | (26 | ) | (30 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | (1 | ) | — | (1 | ) | |||||||||||
Deferred taxes | 1 | — | 1 | |||||||||||||
Balance at March 31, 2014 | $ | (221 | ) | $ | (313 | ) | $ | (534 | ) | |||||||
Pensions and Other Postretirement Benefits | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||||||
Balance at December 31, 2012 | $ | (250 | ) | $ | (226 | ) | $ | (476 | ) | |||||||
Other comprehensive loss before reclassifications | — | (80 | ) | (80 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | 16 | — | 16 | |||||||||||||
Deferred taxes | (6 | ) | — | (6 | ) | |||||||||||
Balance at March 31, 2013 | $ | (240 | ) | $ | (306 | ) | $ | (546 | ) | |||||||
The amounts reclassified from accumulated other comprehensive loss during the three months ended March 31, 2014 and 2013 represent the amortization of net actuarial loss, prior service credit, and other which are included in the computation of net periodic pension cost (see Note 8. Employee Benefit Plans for additional details). Net periodic pension cost is recorded in cost of sales and services, research and engineering, and marketing, general and administrative expenses. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies - (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Nature of Operations | ' |
Nature of Operations | |
Baker Hughes Incorporated (“Baker Hughes,” “Company,” “we,” “our,” or “us,”) is a leading supplier of oilfield services, products, technology and systems used for drilling, formation evaluation, completion and production, pressure pumping, and reservoir development in the worldwide oil and natural gas industry. We also provide products and services for other businesses, including downstream chemicals, and process and pipeline services. | |
Basis of Presentation | ' |
Basis of Presentation | |
Our unaudited consolidated condensed financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. These unaudited consolidated condensed financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 Annual Report”). We believe the unaudited consolidated condensed financial statements included herein reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. In the Notes to Unaudited Consolidated Condensed Financial Statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. |
Earnings_Per_Share_Tables
Earnings Per Share - (Tables) | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Earnings Per Share (Table) [Abstract] | ' | |||||
Schedule of Weighted Average Number of Shares [Table Text Block] | ' | |||||
A reconciliation of the number of shares used for the basic and diluted earnings per share (“EPS”) computations is as follows: | ||||||
Three Months Ended March 31, | ||||||
2014 | 2013 | |||||
Weighted average common shares outstanding for basic EPS | 439 | 443 | ||||
Effect of dilutive securities - stock plans | 2 | 1 | ||||
Adjusted weighted average common shares outstanding for diluted EPS | 441 | 444 | ||||
Future potentially dilutive shares excluded from diluted EPS: | ||||||
Options with an exercise price greater than the average market price for the period | 3 | 8 | ||||
Inventories_Tables
Inventories - (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories, net of reserves | ' | |||||||
Inventories, net of reserves, are comprised of the following: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 3,541 | $ | 3,438 | ||||
Work in process | 234 | 215 | ||||||
Raw materials | 220 | 231 | ||||||
Total inventories | $ | 3,995 | $ | 3,884 | ||||
Intangible_Assets_Tables
Intangible Assets - (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | ' | |||||||||||||||||||||||
Intangible assets are comprised of the following: | ||||||||||||||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Gross | Less: | Net | Gross | Less: | Net | |||||||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||||||||||
Technology | $ | 817 | $ | 350 | $ | 467 | $ | 814 | $ | 337 | $ | 477 | ||||||||||||
Customer relationships | 496 | 167 | 329 | 494 | 157 | 337 | ||||||||||||||||||
Trade names | 120 | 85 | 35 | 120 | 82 | 38 | ||||||||||||||||||
Other (1) | 43 | 12 | 31 | 43 | 12 | 31 | ||||||||||||||||||
Total intangible assets | $ | 1,476 | $ | 614 | $ | 862 | $ | 1,471 | $ | 588 | $ | 883 | ||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | |||||||||||||||||||||||
Amortization expense of these intangibles over the remainder of 2014 and for each of the subsequent five fiscal years is expected to be as follows: | ||||||||||||||||||||||||
Year | Estimated Amortization Expense | |||||||||||||||||||||||
Remainder of 2014 | $ | 78 | ||||||||||||||||||||||
2015 | 97 | |||||||||||||||||||||||
2016 | 95 | |||||||||||||||||||||||
2017 | 91 | |||||||||||||||||||||||
2018 | 86 | |||||||||||||||||||||||
2019 | 83 | |||||||||||||||||||||||
Segment_Information_Tables
Segment Information - (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
Segment Reporting Information [Line Items] | ' | |||||||||||||||
Summarized financial information | ' | |||||||||||||||
Summarized financial information is shown in the following table: | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, 2014 | March 31, 2013 | |||||||||||||||
Segments | Revenue | Profit (Loss) Before Taxes | Revenue | Profit (Loss) Before Taxes | ||||||||||||
North America | $ | 2,776 | $ | 258 | $ | 2,603 | $ | 235 | ||||||||
Latin America | 530 | 55 | 590 | 49 | ||||||||||||
Europe/Africa/Russia Caspian | 996 | 142 | 854 | 93 | ||||||||||||
Middle East/Asia Pacific | 1,108 | 135 | 894 | 116 | ||||||||||||
Industrial Services | 321 | 27 | 289 | 24 | ||||||||||||
Total Operations | 5,731 | 617 | 5,230 | 517 | ||||||||||||
Corporate and other | — | (65 | ) | — | (62 | ) | ||||||||||
Interest expense, net | — | (57 | ) | — | (55 | ) | ||||||||||
Total | $ | 5,731 | $ | 495 | $ | 5,230 | $ | 400 | ||||||||
Employee_Benefit_Plans_Tables
Employee Benefit Plans - (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ' | |||||||||||||||||||||||
Schedule of Net Benefit Costs [Table Text Block] | ' | |||||||||||||||||||||||
The components of net periodic cost are as follows for the three months ended March 31: | ||||||||||||||||||||||||
U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Service cost | $ | 17 | $ | 16 | $ | 3 | $ | 4 | $ | 1 | $ | 2 | ||||||||||||
Interest cost | 7 | 6 | 9 | 8 | 2 | 1 | ||||||||||||||||||
Expected return on plan assets | (11 | ) | (10 | ) | (10 | ) | (10 | ) | — | — | ||||||||||||||
Amortization of prior service credit | — | — | — | — | (1 | ) | (2 | ) | ||||||||||||||||
Amortization of net actuarial loss | 2 | 3 | 1 | 2 | 1 | 1 | ||||||||||||||||||
Other | — | — | — | — | (4 | ) | — | |||||||||||||||||
Net periodic cost | $ | 15 | $ | 15 | $ | 3 | $ | 4 | $ | (1 | ) | $ | 2 | |||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss - (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2014 | Mar. 31, 2013 | |||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | ' | ||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | ' | ' | ||||||||||||||||||||||||||||||
The following tables present the changes in accumulated other comprehensive loss, net of tax: | ||||||||||||||||||||||||||||||||
Pensions and Other Postretirement Benefits | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||||||
Pensions and Other Postretirement Benefits | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | Balance at December 31, 2012 | $ | (250 | ) | $ | (226 | ) | $ | (476 | ) | ||||||||||||||||||||
Balance at December 31, 2013 | $ | (217 | ) | $ | (287 | ) | $ | (504 | ) | Other comprehensive loss before reclassifications | — | (80 | ) | (80 | ) | |||||||||||||||||
Other comprehensive loss before reclassifications | (4 | ) | (26 | ) | (30 | ) | ||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | (1 | ) | — | (1 | ) | Amounts reclassified from accumulated other comprehensive loss | 16 | — | 16 | |||||||||||||||||||||||
Deferred taxes | 1 | — | 1 | Deferred taxes | (6 | ) | — | (6 | ) | |||||||||||||||||||||||
Balance at March 31, 2014 | $ | (221 | ) | $ | (313 | ) | $ | (534 | ) | Balance at March 31, 2013 | $ | (240 | ) | $ | (306 | ) | $ | (546 | ) |
Venezuelan_Currency_Devaluatio1
Venezuelan Currency Devaluation - (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Venezuelan bolÃvar fuerte | ' | ' |
New Currency Exchange Rate | ' | 6.3 |
SICAD 1 Exchange Rate | 10.7 | ' |
Potential Foreign Currency Transaction Loss, before Tax | $7 | ' |
Foreign Currency Transaction Loss, before Tax | ' | $23 |
Venezuelan bolÃvar fuerte | ' | ' |
Prior Exchange Rate | ' | 4.3 |
Earnings_Per_Share_Details
Earnings Per Share - (Details) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Earnings Per Share [Abstract] | ' | ' |
Weighted average common shares outstanding for basic EPS | 439 | 443 |
Effect of dilutive securities - stock plans | 2 | 1 |
Adjusted weighted average common shares outstanding for diluted EPS | 441 | 444 |
Future potentially dilutive shares excluded from diluted EPS: | ' | ' |
Options with an exercise price greater than the average market price for the period | 3 | 8 |
Inventories_Details
Inventories - (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventories, net of reserves [Abstract] | ' | ' |
Finished goods | $3,541 | $3,438 |
Work in process | 234 | 215 |
Raw materials | 220 | 231 |
Total inventories | $3,995 | $3,884 |
Intangible_Assets_Schedule_of_
Intangible Assets - Schedule of Intangible Assets by Type (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | |
In Millions, unless otherwise specified | |||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ' | ' | |
Finite-Lived Intangible Assets, Gross | $1,476 | $1,471 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 614 | 588 | |
Finite-Lived Intangible Assets, Net | 862 | 883 | |
Technology-Based Intangible Assets | ' | ' | |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ' | ' | |
Finite-Lived Intangible Assets, Gross | 817 | 814 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 350 | 337 | |
Finite-Lived Intangible Assets, Net | 467 | 477 | |
Customer Relationships | ' | ' | |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ' | ' | |
Finite-Lived Intangible Assets, Gross | 496 | 494 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 167 | 157 | |
Finite-Lived Intangible Assets, Net | 329 | 337 | |
Trade Names | ' | ' | |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ' | ' | |
Finite-Lived Intangible Assets, Gross | 120 | 120 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 85 | 82 | |
Finite-Lived Intangible Assets, Net | 35 | 38 | |
Other Intangible Assets | ' | ' | |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ' | ' | |
Finite-Lived Intangible Assets, Gross | 43 | 43 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 12 | 12 | |
Finite-Lived Intangible Assets, Net | 31 | 31 | |
In Process Research and Development | ' | ' | |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ' | ' | |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $27 | [1] | $27 |
[1] | Includes indefinite-lived intangibles of $27 million at March 31, 2014 and December 31, 2013 related to in-process research and development projects. |
Intangible_Assets_Schedule_of_1
Intangible Assets - Schedule of Future Estimated Amortization Expense (Details) (USD $) | Mar. 31, 2014 |
In Millions, unless otherwise specified | |
Schedule of Finite-Lived Future Estimated Amortization Expense [Line Items] | ' |
Reminder of 2014 | $78 |
2015 | 97 |
2016 | 95 |
2017 | 91 |
2018 | 86 |
2019 | $83 |
Intangible_Assets_Textual_Info
Intangible Assets - Textual Information (Details) (USD $) | 3 Months Ended | ||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Minimum | Maximum | In Process Research and Development | In Process Research and Development | ||||
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | ' | ' | ' | ' | $27 | [1] | $27 |
Finite-Lived Intangible Asset, Useful Life | ' | ' | '3 years | '30 years | ' | ' | |
Amortization expense for intangible assets included in net income | $26 | $30 | ' | ' | ' | ' | |
[1] | Includes indefinite-lived intangibles of $27 million at March 31, 2014 and December 31, 2013 related to in-process research and development projects. |
Financial_Instruments_Details
Financial Instruments - (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Financial Instruments (Textual) [Abstract] | ' | ' |
Debt, fair value | $5,097 | $4,857 |
Debt, carrying amount | $4,503 | $4,381 |
Segment_Information_Details
Segment Information - (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Summarized financial information [Abstract] | ' | ' |
Revenue | $5,731 | $5,230 |
Profit (Loss) Before Taxes | 495 | 400 |
North America | ' | ' |
Summarized financial information [Abstract] | ' | ' |
Revenue | 2,776 | 2,603 |
Profit (Loss) Before Taxes | 258 | 235 |
Latin America | ' | ' |
Summarized financial information [Abstract] | ' | ' |
Revenue | 530 | 590 |
Profit (Loss) Before Taxes | 55 | 49 |
Europe/Africa/Russia Caspian | ' | ' |
Summarized financial information [Abstract] | ' | ' |
Revenue | 996 | 854 |
Profit (Loss) Before Taxes | 142 | 93 |
Middle East/Asia Pacific | ' | ' |
Summarized financial information [Abstract] | ' | ' |
Revenue | 1,108 | 894 |
Profit (Loss) Before Taxes | 135 | 116 |
Industrial Services | ' | ' |
Summarized financial information [Abstract] | ' | ' |
Revenue | 321 | 289 |
Profit (Loss) Before Taxes | 27 | 24 |
Total Operations | ' | ' |
Summarized financial information [Abstract] | ' | ' |
Revenue | 5,731 | 5,230 |
Profit (Loss) Before Taxes | 617 | 517 |
Corporate and other | ' | ' |
Summarized financial information [Abstract] | ' | ' |
Revenue | 0 | 0 |
Profit (Loss) Before Taxes | -65 | -62 |
Interest expense, net | ' | ' |
Summarized financial information [Abstract] | ' | ' |
Revenue | 0 | 0 |
Profit (Loss) Before Taxes | -57 | -55 |
Total | ' | ' |
Summarized financial information [Abstract] | ' | ' |
Revenue | 5,731 | 5,230 |
Profit (Loss) Before Taxes | $495 | $400 |
Employee_Benefit_Plans_Details
Employee Benefit Plans - (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
U.S. Pension Benefits | ' | ' |
Components of net periodic benefit cost [Abstract] | ' | ' |
Service cost | $17 | $16 |
Interest cost | 7 | 6 |
Expected return on plan assets | -11 | -10 |
Amortization of prior service credit | 0 | 0 |
Amortization of net actuarial loss | 2 | 3 |
Other | 0 | 0 |
Net periodic cost | 15 | 15 |
Non-U.S. Pension Benefits | ' | ' |
Components of net periodic benefit cost [Abstract] | ' | ' |
Service cost | 3 | 4 |
Interest cost | 9 | 8 |
Expected return on plan assets | -10 | -10 |
Amortization of prior service credit | 0 | 0 |
Amortization of net actuarial loss | 1 | 2 |
Other | 0 | 0 |
Net periodic cost | 3 | 4 |
Other Postretirement Benefits | ' | ' |
Components of net periodic benefit cost [Abstract] | ' | ' |
Service cost | 1 | 2 |
Interest cost | 2 | 1 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service credit | -1 | -2 |
Amortization of net actuarial loss | 1 | 1 |
Other | -4 | 0 |
Net periodic cost | ($1) | $2 |
Commitments_and_Contingencies_1
Commitments and Contingencies - (Details) (USD $) | Mar. 31, 2014 |
In Billions, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Off-balance sheet arrangements related to letters of credit and other bank issued guarantees, total | $1.50 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss - (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Accumulated Other Comprehensive Loss [Line Items] | ' | ' |
Beginning Balance | ($504) | ($476) |
Other comprehensive loss before reclassifications | -30 | -80 |
Amounts reclassified from accumulated other comprehensive loss | -1 | 16 |
Deferred taxes | 1 | -6 |
Ending Balance | -534 | -546 |
Pensions and Other Postretirement Benefits | ' | ' |
Accumulated Other Comprehensive Loss [Line Items] | ' | ' |
Beginning Balance | -217 | -250 |
Other comprehensive loss before reclassifications | -4 | 0 |
Amounts reclassified from accumulated other comprehensive loss | -1 | 16 |
Deferred taxes | 1 | -6 |
Ending Balance | -221 | -240 |
Foreign Currency Translation Adjustments | ' | ' |
Accumulated Other Comprehensive Loss [Line Items] | ' | ' |
Beginning Balance | -287 | -226 |
Other comprehensive loss before reclassifications | -26 | -80 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Deferred taxes | 0 | 0 |
Ending Balance | ($313) | ($306) |