Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 16, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | BAKER HUGHES INC | |
Entity Central Index Key | 808362 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 434,675,580 |
Consolidated_Condensed_Stateme
Consolidated Condensed Statements of Income (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue: | ||
Sales | $1,528 | $1,857 |
Services | 3,066 | 3,874 |
Total revenue | 4,594 | 5,731 |
Costs and expenses: | ||
Cost of sales | 1,345 | 1,501 |
Cost of services | 2,997 | 3,219 |
Research and engineering | 138 | 143 |
Marketing, general and administrative | 315 | 316 |
Restructuring charges | 573 | 0 |
Total costs and expenses | 5,368 | 5,179 |
Operating (loss) income | -774 | 552 |
Interest expense, net | -54 | -57 |
(Loss) income before income taxes | -828 | 495 |
Income taxes | 235 | -159 |
Net (loss) income | -593 | 336 |
Net loss (income) attributable to noncontrolling interests | 4 | -8 |
Net (loss) income attributable to Baker Hughes | ($589) | $328 |
Basic (loss) earnings per share attributable to Baker Hughes | ($1.35) | $0.75 |
Diluted (loss) earnings per share attributable to Baker Hughes | ($1.35) | $0.74 |
Cash dividends per share | $0.17 | $0.15 |
Consolidated_Condensed_Stateme1
Consolidated Condensed Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | ($593) | $336 |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustments during the period | -171 | -26 |
Pension and other postretirement benefits, net of tax | 7 | -4 |
Other comprehensive loss | -164 | -30 |
Comprehensive (loss) income | -757 | 306 |
Comprehensive loss (income) attributable to noncontrolling interests | 4 | -8 |
Comprehensive (loss) income attributable to Baker Hughes | ($753) | $298 |
Consolidated_Condensed_Balance
Consolidated Condensed Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $1,606 | $1,740 |
Accounts receivable - less allowance for doubtful accounts (2015 - $325; 2014 - $224) | 4,455 | 5,418 |
Inventories, net | 3,843 | 4,074 |
Deferred income taxes | 431 | 418 |
Other current assets | 370 | 395 |
Total current assets | 10,705 | 12,045 |
Property, plant and equipment - less accumulated depreciation (2015 - $8,431; 2014 - $8,215) | 8,559 | 9,063 |
Goodwill | 6,072 | 6,081 |
Intangible assets, net | 783 | 812 |
Other assets | 807 | 826 |
Total assets | 26,926 | 28,827 |
Current liabilities: | ||
Accounts payable | 2,149 | 2,807 |
Short-term debt and current portion of long-term debt | 149 | 220 |
Accrued employee compensation | 753 | 782 |
Income taxes payable | 92 | 265 |
Other accrued liabilities | 590 | 563 |
Total current liabilities | 3,733 | 4,637 |
Long-term debt | 3,906 | 3,913 |
Deferred income taxes and other tax liabilities | 584 | 740 |
Liabilities for pensions and other postretirement benefits | 623 | 629 |
Other liabilities | 167 | 178 |
Commitments and contingencies | ||
Equity: | ||
Common stock | 435 | 434 |
Capital in excess of par value | 7,083 | 7,062 |
Retained earnings | 11,214 | 11,878 |
Accumulated other comprehensive loss | -913 | -749 |
Treasury stock | -7 | 0 |
Baker Hughes stockholders’ equity | 17,812 | 18,625 |
Noncontrolling interests | 101 | 105 |
Total equity | 17,913 | 18,730 |
Total liabilities and equity | $26,926 | $28,827 |
Consolidated_Condensed_Balance1
Consolidated Condensed Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $325 | $224 |
Accumulated depreciation | $8,431 | $8,215 |
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 | Treasury Stock [Member] | Non-controlling Interests |
In Millions, unless otherwise specified | |||||||
Balance at Dec. 31, 2013 | $17,912 | $438 | $7,341 | $10,438 | ($504) | $199 | |
Comprehensive loss: | |||||||
Net (loss) income | 336 | 328 | 8 | ||||
Other comprehensive 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 | -66 | -66 | |||||
Net activity related to noncontrolling interests | -3 | -3 | |||||
Balance at Mar. 31, 2014 | 18,001 | 436 | 7,195 | 10,700 | -534 | 204 | |
Balance at Dec. 31, 2014 | 18,730 | 434 | 7,062 | 11,878 | -749 | 0 | 105 |
Comprehensive loss: | |||||||
Net (loss) income | -593 | -589 | -4 | ||||
Other comprehensive loss | -164 | -164 | |||||
Activity related to stock plans | -8 | 1 | -2 | -7 | |||
Stock-based compensation | 33 | 33 | |||||
Cash dividends | -75 | -75 | |||||
Net activity related to noncontrolling interests | -10 | -10 | |||||
Balance at Mar. 31, 2015 | $17,913 | $435 | $7,083 | $11,214 | ($913) | ($7) | $101 |
Consolidated_Condensed_Stateme3
Consolidated Condensed Statements of Changes in Equity (Parenthetical) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends per share | $0.17 | $0.15 |
Consolidated_Condensed_Stateme4
Consolidated Condensed Statements of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net (loss) income | ($593) | $336 |
Adjustments to reconcile net (loss) income to net cash flows from operating activities: | ||
Depreciation and amortization | 460 | 437 |
Impairment of assets | 240 | 0 |
Provision for doubtful accounts | 105 | 24 |
Other noncash items | -180 | -57 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 809 | -161 |
Inventories | 177 | -116 |
Accounts payable | -627 | -85 |
Other operating items, net | -135 | -75 |
Net cash flows provided by operating activities | 256 | 303 |
Cash flows from investing activities: | ||
Expenditures for capital assets | -315 | -439 |
Proceeds from disposal of assets | 81 | 100 |
Other investing items, net | -3 | -25 |
Net cash flows used in investing activities | -237 | -364 |
Cash flows from financing activities: | ||
Net (repayments) proceeds of commercial paper borrowings and other debt with original maturity of three months or less | -34 | 125 |
Repayments of short-term debt with original maturity greater than three months | -37 | -70 |
Proceeds from short-term debt with original maturity greater than three months | 17 | 59 |
Repurchase of common stock | 0 | -200 |
Dividends paid | -75 | -66 |
Other financing items, net | -17 | 14 |
Net cash flows used in financing activities | -146 | -138 |
Effect of foreign exchange rate changes on cash and cash equivalents | -7 | 0 |
Decrease in cash and cash equivalents | -134 | -199 |
Cash and cash equivalents, beginning of period | 1,740 | 1,399 |
Cash and cash equivalents, end of period | 1,606 | 1,200 |
Supplemental cash flows disclosures: | ||
Income taxes paid, net of refunds | 124 | 57 |
Interest paid | 72 | 73 |
Supplemental disclosure of noncash investing activities: | ||
Capital expenditures included in accounts payable | $139 | $93 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies - (Notes) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 1. 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 (“GAAP”) 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, 2014. 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. | |
New Accounting Standards Updates | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers. The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The pronouncement is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. In April 2015, the FASB tentatively decided to defer for one year the effective date of the new revenue standard (ASU 2014-09) for public and non public entities reporting under U.S. GAAP. The FASB also tentatively decided to permit entities to early adopt the standard. We have not completed an evaluation of the impact the pronouncement will have on our consolidated financial statements and related disclosures. |
Halliburton_Merger_Agreement_N
Halliburton Merger Agreement (Notes) | 3 Months Ended |
Mar. 31, 2015 | |
Business Combinations [Abstract] | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | NOTE 2. HALLIBURTON MERGER AGREEMENT |
On November 16, 2014, Baker Hughes, Halliburton Company (“Halliburton”) and a wholly owned subsidiary of Halliburton (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), under which Halliburton will acquire all of the outstanding shares of Baker Hughes through a merger of Baker Hughes with and into Merger Sub (the "Merger"). Subject to certain specified exceptions, at the effective time of the Merger, each share of Baker Hughes common stock will be converted into the right to receive (i) 1.12 shares of Halliburton common stock and (ii) $19.00 in cash. | |
On March 27, 2015, Halliburton's stockholders approved the proposal to issue shares of Halliburton common stock as contemplated by the Merger Agreement. In addition, Baker Hughes’ stockholders adopted the Merger Agreement and thereby approved the proposed combination of the two companies. The obligation of the parties to consummate the Merger is still subject to additional customary closing conditions, including: (i) applicable regulatory approvals, including the termination or expiration of the applicable waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (ii) the absence of legal restraints and prohibitions; and (iii) other customary closing conditions. Halliburton is required to take all actions necessary to obtain regulatory approvals (including agreeing to divestitures) unless the assets, businesses or product lines subject to such actions would account for more than $7.5 billion of 2013 revenue. | |
Baker Hughes and Halliburton each made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants by each of Baker Hughes and Halliburton to, subject to certain exceptions, conduct its business in the ordinary course. In particular, among other restrictions and subject to certain exceptions, Baker Hughes agreed to generally refrain from acquiring new businesses, incurring new indebtedness, repurchasing shares, issuing new common stock or equity awards (other than equity awards granted to employees, officers and directors materially consistent with historical long-term incentive awards granted), or entering into new material contracts or commitments outside the normal course of business, without the consent of Halliburton, during the period between the execution of the Merger Agreement and the consummation of the Merger. With respect to equity awards granted after the Merger Agreement to officers and employees, such awards will not vest solely as a result of the Merger but will be converted to an equivalent Halliburton equity award. However, they will vest entirely if an officer or employee is terminated within one year following the closing of the Merger with Halliburton. Baker Hughes and Halliburton are each permitted to pay regular quarterly cash dividends during such period. In addition, under the terms of the Merger Agreement, Halliburton and Baker Hughes have agreed to coordinate the declaration and payment of dividends in respect of each party's common stock including record dates and payment dates relating thereto, which we expect to be in the third month of each quarter. Under the Merger Agreement, we have agreed not to increase the quarterly dividend while the Merger is pending. | |
In the event the Merger Agreement is terminated by (i) either party as a result of the failure of the Merger to occur on or before the end date (as it may be extended) due to the failure to achieve certain specified antitrust-related approvals when all other closing conditions (other than receipt of antitrust and other specified regulatory approvals and conditions that by their nature cannot be satisfied until the closing but subject to such conditions being capable of being satisfied if the closing date were the date of termination) have been satisfied, (ii) either party as a result of any antitrust-related final, non-appealable order or injunction prohibiting the closing, or (iii) Baker Hughes as a result of Halliburton’s material breach of its obligations to obtain regulatory approval such that the antitrust-related condition to closing is incapable of being satisfied, then, in each case, Halliburton would be required to pay Baker Hughes a termination fee of $3.5 billion. | |
Baker Hughes and Halliburton expect the Merger to be completed late in the second half of 2015. However, Baker Hughes cannot predict with certainty when, or if, the Merger will be completed because completion of the Merger is subject to conditions beyond the control of Baker Hughes. Baker Hughes incurred costs of $28 million related to the Merger, which was recorded in marketing, general and administrative ("MG&A") expenses during the first quarter of 2015. |
Restructuring_Costs_Notes
Restructuring Costs - (Notes) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Restructuring and Related Activities [Abstract] | ||||
Restructuring and Related Activities Disclosure [Text Block] | NOTE 3. RESTRUCTURING AND OTHER CHARGES | |||
Beginning in the second half of 2014 and continuing into 2015, the oil and gas market experienced a significant over supply leading to a substantial and rapid decline in oil prices and subsequently to significantly lower activity in the first quarter of 2015. The decline in activity has occurred throughout the world but most notably in North America where the average rig count for the first quarter of 2015 was down 26% compared to the first quarter of 2014. | ||||
As a result of these changes in market conditions and the significant decrease in activity and customer spending, we have experienced a decline in demand for our products and services. Accordingly, to adjust to the lower level of activity, we assessed our overall operations and have developed a plan and initiated actions to restructure and adjust our operations and cost structure to reflect current and expected near-term activity levels. We currently expect that most actions related to this restructuring plan will be completed by the end of the third quarter of 2015. Depending on future market conditions and activity levels, further actions may be necessary to adjust our operations which may result in additional charges in 2015. | ||||
During the quarter ended March 31, 2015, we recorded restructuring charges of $573 million consisting of workforce reduction costs, contract termination costs and asset impairments. Details of these charges and our restructuring activities are summarized below: | ||||
Three Months Ended | ||||
Restructuring Charges | 31-Mar-15 | |||
Workforce reductions | $ | 247 | ||
Contract terminations | 86 | |||
Impairment of buildings and improvements | 77 | |||
Impairment of machinery and equipment | 163 | |||
Total restructuring charges | $ | 573 | ||
Workforce reduction costs: During the first quarter of 2015, we initiated a workforce reduction which includes the elimination of approximately 10,500 positions worldwide, of which approximately 65% are in North America. As a result of this action, we recorded a charge for severance expense totaling $247 million, net of a related benefit plan curtailment gain of $9 million. The amount accrued for any unpaid severance is based on our written severance policy for ongoing benefit arrangements or the country mandated scheme and the positions being eliminated. The accrued severance does not include any portion of the employees' salaries through their severance dates. As of March 31, 2015, we have eliminated approximately 7,400 positions, and we expect to eliminate the remaining 3,100 positions by the end of June 2015. Total cash paid during the first quarter of 2015 for severance was $87 million. Based upon current anticipated termination dates, and completion of the termination process, which includes the completion of various administrative procedures and fulfillment of all revocation periods as required by policy or law, we expect that of the accrued severance remaining of $169 million at March 31, 2015, approximately $135 million to $150 million will be paid during the second quarter of 2015 and the remainder will be paid during the third quarter of 2015. | ||||
Contract termination costs: During the first quarter of 2015, we incurred costs of $86 million for various contracts being terminated, primarily in North America, as part of the restructuring plan. This includes the accrual for costs to settle leases on closed facilities and certain equipment based on their respective lease agreements, and other estimated exit costs from the approved plan, and is net of expected sublease income. The accrual does not include costs before actual abandonment of the facilities or ceasing of the operations. We also incurred costs to terminate a take-or-pay supply contract related to the purchase of materials used in our pressure pumping operations in North America, including the write-off of $14 million of prepayments made in 2014. There were no cash payments made during the first quarter of 2015 related to these contract terminations. Based upon our current estimates, we expect that substantially all of the accrued contract termination costs of $72 million will be paid in the second quarter of 2015. | ||||
Impairment of buildings and improvements: As part of our restructuring plan, we are consolidating facilities and shutting down certain operations and as a result are closing and abandoning or selling certain facilities, both owned and leased. As a result, we recognized $77 million of impairment charges related to 72 facilities primarily in North America and Latin America. For the leased facilities we have vacated, this charge includes the impairment of the leasehold improvements made to those facilities. For the facilities we own, we are writing down the carrying value of those facilities to its current fair value, less anticipated costs to sell. We estimated the fair value using proceeds expected to be received based on market data, broker information and other sources. | ||||
Impairment of machinery and equipment: As part of our restructuring plan, we are exiting or substantially downsizing our presence in select markets primarily in our pressure pumping product line in certain geographies within North America and Latin America. As a result, we recognized $163 million of impairment losses to adjust the carrying value of certain machinery and equipment to its fair value, net of costs to dispose. We are currently in the process of disposing of this machinery and equipment through sale or scrap. | ||||
Other Charges | ||||
In addition to the matters described above, we also recorded charges of $171 million, of which $29 million is reported in cost of sales and $142 million is reported in cost of services, to write-down the carrying value of certain inventory. The write-down, primarily in North America, includes lower of cost or market adjustments due to the significant decline in activity and related prices for our products coupled with declines in replacement costs. In addition, the adjustments include provisions for excess inventory levels based on estimates of current and future market demand. The product lines impacted are primarily pressure pumping and drilling and completion fluids. Included in the charge is approximately $10 million for the cost of disposing of the excess inventory. |
Venezuelan_Currency_Devaluatio
Venezuelan Currency Devaluation - (Notes) | 3 Months Ended |
Mar. 31, 2015 | |
Foreign Currency [Abstract] | |
Venezuelan Currency Devaluation | NOTE 4. VENEZUELA CURRENCY DEVALUATION |
In February of 2015, the Venezuelan government further modified the currency exchange system by the creation of a new exchange mechanism, SIMADI, which allows for the trading of the Venezuelan Bolivars Fuertes ("BsF") at a floating rate. As of March 31, 2015, the SIMADI traded at approximately 192 BsF per U.S. Dollar ("USD"). The SIMADI will operate alongside the SICAD exchange rate mechanism, which was also modified during the quarter by combining SICAD 1 and SICAD 2, and the official exchange rate mechanism, which trades at 6.3 BsF per USD. | |
During 2014, we adopted the SICAD 2 exchange rate of approximately 50 BsF per USD for purposes of remeasuring BsF denominated assets, liabilities, revenue and expenses; however, under the new modified exchange system the only mechanism currently available to us is SIMADI. Therefore, on March 31, 2015, we adopted the SIMADI exchange rate and recorded a loss on the devaluation in the currency of approximately $5 million resulting from the write down of our BsF denominated assets and liabilities. This loss was recorded in MG&A expenses in the first quarter of 2015. We believe any further devaluation of Venezuela's currency would not have a material impact on our financial position, results of operations or cash flows. |
Segment_Information_Notes
Segment Information - (Notes) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Segment Reporting | NOTE 5. 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 (loss) before tax, which is defined as income (loss) before income taxes and before the following: net interest expense, corporate expenses and certain gains and losses, including restructuring charges, not allocated to the operating segments. | ||||||||||||||||
Summarized financial information is shown in the following table: | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, 2015 | March 31, 2014 | |||||||||||||||
Segments | Revenue | Profit (Loss) Before Taxes | Revenue | Profit (Loss) Before Taxes | ||||||||||||
North America | $ | 2,006 | $ | (209 | ) | $ | 2,776 | $ | 258 | |||||||
Latin America | 493 | 33 | 530 | 55 | ||||||||||||
Europe/Africa/Russia Caspian | 895 | (20 | ) | 1,044 | 147 | |||||||||||
Middle East/Asia Pacific | 916 | 62 | 1,060 | 130 | ||||||||||||
Industrial Services | 284 | 10 | 321 | 27 | ||||||||||||
Total Operations | 4,594 | (124 | ) | 5,731 | 617 | |||||||||||
Corporate and other | — | (77 | ) | — | (65 | ) | ||||||||||
Interest expense, net | — | (54 | ) | — | (57 | ) | ||||||||||
Restructuring charges | — | (573 | ) | — | — | |||||||||||
Total | $ | 4,594 | $ | (828 | ) | $ | 5,731 | $ | 495 | |||||||
Income_Taxes_Notes
Income Taxes - (Notes) | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 6. INCOME TAXES |
Total income tax benefit was $235 million for the three months ended March 31, 2015. Our effective tax rate on the loss before income taxes for the three months ended March 31, 2015 was 28.4%. Our effective tax rate is lower than the U.S. statutory income tax rate of 35% primarily due to the $744 million of restructuring charges and inventory write-downs with only partial or no tax-benefit in certain jurisdictions. The total tax benefit associated with the restructuring charges and inventory write-downs was $207 million. |
Earnings_Per_Share_Notes
Earnings Per Share - (Notes) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Earnings Per Share [Abstract] | ||||||
Earnings Per Share | NOTE 7. EARNINGS PER SHARE | |||||
A reconciliation of the number of shares used for the basic and diluted (loss) earnings per share (“EPS”) computations is as follows: | ||||||
Three Months Ended March 31, | ||||||
2015 | 2014 | |||||
Weighted average common shares outstanding for basic EPS | 437 | 439 | ||||
Adjustment for effect of dilutive securities - stock plans | — | 2 | ||||
Weighted average common shares outstanding for diluted EPS | 437 | 441 | ||||
Future potentially anti-dilutive shares excluded from diluted EPS | 5 | — | ||||
Future potentially dilutive shares excluded from diluted EPS | — | 3 | ||||
Inventories_Notes
Inventories - (Notes) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory, Net [Abstract] | ||||||||
Inventories | NOTE 8. INVENTORIES | |||||||
Inventories, net of reserves of $342 million at March 31, 2015 and $319 million at December 31, 2014, are comprised of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Finished goods | $ | 3,452 | $ | 3,644 | ||||
Work in process | 210 | 227 | ||||||
Raw materials | 181 | 203 | ||||||
Total inventories | $ | 3,843 | $ | 4,074 | ||||
Intangible_Assets_Notes
Intangible Assets - (Notes) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||||||||||||||||||||||
Intangible Assets | NOTE 9. INTANGIBLE ASSETS | |||||||||||||||||||||||
Intangible assets are comprised of the following: | ||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
Gross | Less: | Net | Gross | Less: | Net | |||||||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||||||||||
Technology | $ | 867 | $ | 407 | $ | 460 | $ | 870 | $ | 393 | $ | 477 | ||||||||||||
Customer relationships | 487 | 201 | 286 | 488 | 191 | 297 | ||||||||||||||||||
Trade names | 120 | 93 | 27 | 120 | 92 | 28 | ||||||||||||||||||
Other (1) | 23 | 13 | 10 | 23 | 13 | 10 | ||||||||||||||||||
Total intangible assets | $ | 1,497 | $ | 714 | $ | 783 | $ | 1,501 | $ | 689 | $ | 812 | ||||||||||||
(1) | Includes indefinite-lived intangibles of $7 million at March 31, 2015 and $7 million at December 31, 2014 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 the net loss for the three months ended March 31, 2015 was $26 million, as compared to $26 million reported in 2014 for the same period. | ||||||||||||||||||||||||
Amortization expense of these intangibles over the remainder of 2015 and for each of the subsequent five fiscal years is expected to be as follows: | ||||||||||||||||||||||||
Year | Estimated Amortization Expense | |||||||||||||||||||||||
Remainder of 2015 | $ | 77 | ||||||||||||||||||||||
2016 | 101 | |||||||||||||||||||||||
2017 | 98 | |||||||||||||||||||||||
2018 | 91 | |||||||||||||||||||||||
2019 | 88 | |||||||||||||||||||||||
2020 | 78 | |||||||||||||||||||||||
Financial_Instruments_Notes
Financial Instruments - (Notes) | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | NOTE 10. 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, 2015 and December 31, 2014 approximates their carrying value as reflected in our unaudited consolidated condensed balance sheets. | |
The estimated fair value of total debt at March 31, 2015 and December 31, 2014 was $4,673 million and $4,663 million, respectively, which differs from the carrying amounts of $4,055 million and $4,133 million, respectively, included in our unaudited consolidated condensed balance sheets. The fair value was determined using quoted period-end market prices. |
Employee_Benefit_Plans_Notes
Employee Benefit Plans - (Notes) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||||||||||||||||
Employee Benefits Plans | NOTE 11. 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, when they retire, have met certain age and service requirements. | ||||||||||||||||||||||||
The components of net periodic cost (benefit) are as follows for the three months ended March 31: | ||||||||||||||||||||||||
U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Service cost | $ | 18 | $ | 17 | $ | 4 | $ | 3 | $ | 1 | $ | 1 | ||||||||||||
Interest cost | 7 | 7 | 8 | 9 | 1 | 2 | ||||||||||||||||||
Expected return on plan assets | (13 | ) | (11 | ) | (12 | ) | (10 | ) | — | — | ||||||||||||||
Amortization of prior service credit | — | — | — | — | (3 | ) | (1 | ) | ||||||||||||||||
Amortization of net actuarial loss | 2 | 2 | 1 | 1 | 1 | 1 | ||||||||||||||||||
Curtailment gain | — | — | — | — | (9 | ) | — | |||||||||||||||||
Other | — | — | — | — | — | (4 | ) | |||||||||||||||||
Net periodic cost (benefit) | $ | 14 | $ | 15 | $ | 1 | $ | 3 | $ | (9 | ) | $ | (1 | ) | ||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies - (Notes) | 3 Months Ended | |
Mar. 31, 2015 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | NOTE 12. 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. | ||
The following lawsuits have been filed in Delaware in connection with our pending merger with Halliburton: | ||
• | On November 24, 2014, Gary Molenda, a purported shareholder of the Company, filed a class action lawsuit in the Court of Chancery of the State of Delaware ("Delaware Chancery Court") against Baker Hughes, the Company’s Board of Directors, Halliburton, and Red Tiger LLC, a wholly owned subsidiary of Halliburton (“Red Tiger” and together with all defendants, “Defendants”) styled Gary R. Molenda v. Baker Hughes, Inc., et al., Case No. 10390-CB. | |
• | On November 26, 2014, a second purported shareholder of the Company, Booth Family Trust, filed a substantially similar class action lawsuit in Delaware Chancery Court. | |
• | On December 1, 2014, New Jersey Building Laborers Annuity Fund and James Rice, two additional purported shareholders of the Company, filed substantially similar class action lawsuits in Delaware Chancery Court. | |
• | On December 10, 2014, a fifth purported shareholder of the Company, Iron Workers Mid-South Pension Fund, filed another substantially similar class action lawsuit in the Delaware Chancery Court. | |
• | On December 24, 2014, a sixth purported shareholder of the Company, Annette Shipp, filed another substantially similar class action lawsuit in the Delaware Chancery Court. | |
All of the lawsuits make substantially similar claims. The plaintiffs generally allege that the members of the Company’s Board of Directors breached their fiduciary duties to our shareholders in connection with the merger negotiations by entering into the merger agreement and by approving the merger, and that the Company, Halliburton, and Red Tiger aided and abetted the purported breaches of fiduciary duties. More specifically, the lawsuits allege that the merger agreement provides inadequate consideration to our shareholders, that the process resulting in the merger agreement was flawed, that the Company’s directors engaged in self-dealing, and that certain provisions of the merger agreement improperly favor Halliburton and Red Tiger, precluding or impeding third parties from submitting potentially superior proposals, among other things. The lawsuit filed by Annettee Shipp also alleges that our Board of Directors failed to disclose material information concerning the proposed merger in the preliminary registration statement on Form S-4. On January 7, 2015, James Rice amended his complaint, adding similar allegations regarding the disclosures in the preliminary registration statement on Form S-4. The lawsuits seek unspecified damages, injunctive relief enjoining the merger, and rescission of the merger agreement, among other relief. On January 23, 2015, the Delaware lawsuits were consolidated under the caption In re Baker Hughes Inc. Stockholders Litigation, Consolidated C.A. No. 10390-CB (the "Consolidated Case"). Pursuant to the Court’s consolidation order, plaintiffs filed a consolidated complaint on February 4, 2015, which alleges substantially similar claims and seeks substantially similar relief to that raised in the six individual complaints, except that while Baker Hughes is named as a defendant, no claims are asserted against the Company. | ||
On March 18, 2015, the parties reached an agreement in principle to settle the Consolidated Case in exchange for the Company making certain additional disclosures. Those disclosures were contained in a Form 8-K filed with the SEC on March 18, 2015. The settlement remains subject to certain conditions, including consummation of the merger, final documentation, and court approval. | ||
On November 26, 2014, a seventh class action challenging the merger was filed by a purported Company shareholder in the United States District Court for the Southern District of Texas (Houston Division). The lawsuit, styled Marc Rovner v. Baker Hughes Inc., et al., Cause No. 4:14-cv-03416 ("the Rovner lawsuit"), asserts claims against the Company, most of our current Board of Directors, Halliburton, and Red Tiger. The lawsuit asserts substantially similar claims and seeks substantially similar relief as that sought in the Delaware lawsuits. On March 20, 2015, counsel for Mr. Rovner filed a notice of voluntary dismissal, and on March 23, 2015, the Court entered an order dismissing the Rovner lawsuit without prejudice. | ||
On October 9, 2014, our subsidiary filed a Request for Arbitration against a customer before the London Court of International Arbitration, pursuing claims for the non-payment of invoices for goods and services provided in amount provisionally quantified to exceed $67.9 million. In our Request for Arbitration, we also noted that invoices in an amount exceeding $57 million had been issued to the customer, and would be added to the claim in the event that they became overdue. The due date for payment of all of these invoices has now passed. On November 6, 2014, the customer filed its Response and Counterclaim, denying liability and counterclaiming damages for breach of contract of approximately $182 million. We deny any liability to the customer and intend to pursue our claims against the customer and defend the claims made under the counterclaim. No timetable for the conduct of the arbitration has yet been established. | ||
During 2014, we investigated customer notifications related to a possible equipment failure in a natural gas storage system in the Europe/Africa/Russia Caspian region, which includes certain of our products. We are currently investigating the cause of the possible failure and, if necessary, possible repair and replacement options for our products. Similar products were utilized in other natural gas storage systems for this and other customers. At this time, we are not able to predict whether our products will need to be repaired or replaced and are not able to reasonably estimate the impact, if any, such repairs or replacements or other damages would have on our financial position, results of operations or cash flows. | ||
We are a defendant in various labor claims including the following matters. On April 28, 2014, a collective action lawsuit alleging that we failed to pay a class of workers overtime in compliance with the Fair Labor Standards Act ("FLSA") was filed titled Michael Ciamillo, individually, etc., et al. vs. Baker Hughes Incorporated in the U.S. District Court for the District of Alaska (“Ciamillo”). During the fourth quarter of 2014, the parties agreed to settle the Ciamillo lawsuit, including certain state law claims, for $5 million, subject to final court approval. On December 10, 2013, a class and collective action lawsuit alleging that we failed to pay a nationwide class of workers overtime in compliance with the FLSA 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 ("Lea"). During the second quarter of 2014, the parties agreed to settle the Lea lawsuit, subject to final court approval, and we recorded a charge of $62 million, which includes the Lea settlement amount and associated costs and an amount for settlement of another wage and hour lawsuit. | ||
On May 30, 2013, we received a Civil Investigative Demand ("CID") from the U.S. 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 U.S. 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 $1.2 billion at March 31, 2015. 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, 2015 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||
Accumulated Other Comprehensive Loss | NOTE 13. 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, 2014 | $ | (246 | ) | $ | (503 | ) | $ | (749 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 13 | (171 | ) | (158 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | (10 | ) | — | (10 | ) | |||||||||||
Deferred taxes | 4 | — | 4 | |||||||||||||
Balance at March 31, 2015 | $ | (239 | ) | $ | (674 | ) | $ | (913 | ) | |||||||
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 | ) | |||||||
The amounts reclassified from accumulated other comprehensive loss during the three months ended March 31, 2015 and 2014 represent the amortization of prior service credit, net actuarial loss, curtailment gain and other which are included in the computation of net periodic cost (benefit) (see Note 11. Employee Benefit Plans for additional details). Net periodic cost (benefit) 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, 2015 | |
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 (“GAAP”) 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, 2014. 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. | |
New Accounting Standards Updates | New Accounting Standards Updates |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers. The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity's nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The pronouncement is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. In April 2015, the FASB tentatively decided to defer for one year the effective date of the new revenue standard (ASU 2014-09) for public and non public entities reporting under U.S. GAAP. The FASB also tentatively decided to permit entities to early adopt the standard. We have not completed an evaluation of the impact the pronouncement will have on our consolidated financial statements and related disclosures. |
Restructuring_Costs_Tables
Restructuring Costs - (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Restructuring and Related Activities [Abstract] | ||||
Restructuring and Related Costs [Table Text Block] | During the quarter ended March 31, 2015, we recorded restructuring charges of $573 million consisting of workforce reduction costs, contract termination costs and asset impairments. Details of these charges and our restructuring activities are summarized below: | |||
Three Months Ended | ||||
Restructuring Charges | 31-Mar-15 | |||
Workforce reductions | $ | 247 | ||
Contract terminations | 86 | |||
Impairment of buildings and improvements | 77 | |||
Impairment of machinery and equipment | 163 | |||
Total restructuring charges | $ | 573 | ||
Segment_Information_Tables
Segment Information - (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
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, 2015 | March 31, 2014 | |||||||||||||||
Segments | Revenue | Profit (Loss) Before Taxes | Revenue | Profit (Loss) Before Taxes | ||||||||||||
North America | $ | 2,006 | $ | (209 | ) | $ | 2,776 | $ | 258 | |||||||
Latin America | 493 | 33 | 530 | 55 | ||||||||||||
Europe/Africa/Russia Caspian | 895 | (20 | ) | 1,044 | 147 | |||||||||||
Middle East/Asia Pacific | 916 | 62 | 1,060 | 130 | ||||||||||||
Industrial Services | 284 | 10 | 321 | 27 | ||||||||||||
Total Operations | 4,594 | (124 | ) | 5,731 | 617 | |||||||||||
Corporate and other | — | (77 | ) | — | (65 | ) | ||||||||||
Interest expense, net | — | (54 | ) | — | (57 | ) | ||||||||||
Restructuring charges | — | (573 | ) | — | — | |||||||||||
Total | $ | 4,594 | $ | (828 | ) | $ | 5,731 | $ | 495 | |||||||
Earnings_Per_Share_Tables
Earnings Per Share - (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Earnings Per Share [Abstract] | ||||||
Reconciliation of Weighted Average Number of Shares | A reconciliation of the number of shares used for the basic and diluted (loss) earnings per share (“EPS”) computations is as follows: | |||||
Three Months Ended March 31, | ||||||
2015 | 2014 | |||||
Weighted average common shares outstanding for basic EPS | 437 | 439 | ||||
Adjustment for effect of dilutive securities - stock plans | — | 2 | ||||
Weighted average common shares outstanding for diluted EPS | 437 | 441 | ||||
Future potentially anti-dilutive shares excluded from diluted EPS | 5 | — | ||||
Future potentially dilutive shares excluded from diluted EPS | — | 3 | ||||
Inventories_Tables
Inventories - (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory, Net [Abstract] | ||||||||
Inventories, net of reserves | Inventories, net of reserves of $342 million at March 31, 2015 and $319 million at December 31, 2014, are comprised of the following: | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Finished goods | $ | 3,452 | $ | 3,644 | ||||
Work in process | 210 | 227 | ||||||
Raw materials | 181 | 203 | ||||||
Total inventories | $ | 3,843 | $ | 4,074 | ||||
Intangible_Assets_Tables
Intangible Assets - (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | Intangible assets are comprised of the following: | |||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||
Gross | Less: | Net | Gross | Less: | Net | |||||||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||||||||||
Technology | $ | 867 | $ | 407 | $ | 460 | $ | 870 | $ | 393 | $ | 477 | ||||||||||||
Customer relationships | 487 | 201 | 286 | 488 | 191 | 297 | ||||||||||||||||||
Trade names | 120 | 93 | 27 | 120 | 92 | 28 | ||||||||||||||||||
Other (1) | 23 | 13 | 10 | 23 | 13 | 10 | ||||||||||||||||||
Total intangible assets | $ | 1,497 | $ | 714 | $ | 783 | $ | 1,501 | $ | 689 | $ | 812 | ||||||||||||
(1) | Includes indefinite-lived intangibles of $7 million at March 31, 2015 and $7 million at December 31, 2014 related to in-process research and development projects. | |||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization expense of these intangibles over the remainder of 2015 and for each of the subsequent five fiscal years is expected to be as follows: | |||||||||||||||||||||||
Year | Estimated Amortization Expense | |||||||||||||||||||||||
Remainder of 2015 | $ | 77 | ||||||||||||||||||||||
2016 | 101 | |||||||||||||||||||||||
2017 | 98 | |||||||||||||||||||||||
2018 | 91 | |||||||||||||||||||||||
2019 | 88 | |||||||||||||||||||||||
2020 | 78 | |||||||||||||||||||||||
Employee_Benefit_Plans_Tables
Employee Benefit Plans - (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||||||||||||||||
Schedule of Net Benefit Costs | The components of net periodic cost (benefit) are as follows for the three months ended March 31: | |||||||||||||||||||||||
U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Service cost | $ | 18 | $ | 17 | $ | 4 | $ | 3 | $ | 1 | $ | 1 | ||||||||||||
Interest cost | 7 | 7 | 8 | 9 | 1 | 2 | ||||||||||||||||||
Expected return on plan assets | (13 | ) | (11 | ) | (12 | ) | (10 | ) | — | — | ||||||||||||||
Amortization of prior service credit | — | — | — | — | (3 | ) | (1 | ) | ||||||||||||||||
Amortization of net actuarial loss | 2 | 2 | 1 | 1 | 1 | 1 | ||||||||||||||||||
Curtailment gain | — | — | — | — | (9 | ) | — | |||||||||||||||||
Other | — | — | — | — | — | (4 | ) | |||||||||||||||||
Net periodic cost (benefit) | $ | 14 | $ | 15 | $ | 1 | $ | 3 | $ | (9 | ) | $ | (1 | ) | ||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss - (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
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 | ||||||||||||||
Balance at December 31, 2014 | $ | (246 | ) | $ | (503 | ) | $ | (749 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 13 | (171 | ) | (158 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | (10 | ) | — | (10 | ) | |||||||||||
Deferred taxes | 4 | — | 4 | |||||||||||||
Balance at March 31, 2015 | $ | (239 | ) | $ | (674 | ) | $ | (913 | ) | |||||||
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 | ) |
Halliburton_Merger_Agreement_D
Halliburton Merger Agreement (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Business Combinations [Abstract] | |
Baker Hughes to Halliburton share exchange ratio | 1.12 |
Cash consideration per share from Halliburton | $19 |
Revenue divestiture threshold | 7,500,000,000 |
Halliburton merger termination fee maximum | $3,500,000,000 |
Payments for Merger Related Costs | $28,000,000 |
Restructuring_Costs_Details
Restructuring Costs - (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Employee | |
Restructuring and Related Activities [Abstract] | |
Rig Count Reduction %-North America | 26.00% |
Severance Costs | $247 |
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements and Curtailments | 9 |
Total Positions Eliminated | 7,400 |
Remaining Positions to be Eliminated | 3,100 |
Payments for Restructuring | 87 |
Restructuring Reserve, Period Increase (Decrease) | 169 |
Payments for Restructuring-Expected Q2 Minimum | 135 |
Payments for Restructuring-Expected Q2 Maximum | 150 |
Loss on Contract Termination | 86 |
Prepayments Write-Off | 14 |
Payments for Contract Terminations-Expected Q2 | 72 |
Asset Impairment Charges-Buildings & Improvements | 77 |
Number of Facilities Impaired | 72 |
Asset Impairment Charges-Machinery & Equipment | 163 |
Restructuring Costs | 573 |
Total Expected Positions to be Eliminated | 10,500 |
Total Positions to be Eliminated-North America Percent | 65.00% |
Inventory Write-down | 171 |
Inventory Write Down-Cost of Sales | 29 |
Inventory Write Down-Cost of Services | 142 |
Inventory Disposal Cost | $10 |
Venezuelan_Currency_Devaluatio1
Venezuelan Currency Devaluation - (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Foreign Currency [Abstract] | |
SIMADI Exchange Rate | 192 |
New Currency Exchange Rate | 6.3 |
SICAD 2 Exchange Rate | 50 |
Foreign Currency Transaction Loss, before Tax | $5 |
Segment_Information_Details
Segment Information - (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Summarized financial information [Abstract] | ||
Revenue | $4,594 | $5,731 |
Profit (Loss) Before Taxes | -828 | 495 |
Restructuring charges | 573 | 0 |
North America | ||
Summarized financial information [Abstract] | ||
Revenue | 2,006 | 2,776 |
Profit (Loss) Before Taxes | -209 | 258 |
Latin America | ||
Summarized financial information [Abstract] | ||
Revenue | 493 | 530 |
Profit (Loss) Before Taxes | 33 | 55 |
Europe/Africa/Russia Caspian | ||
Summarized financial information [Abstract] | ||
Revenue | 895 | 1,044 |
Profit (Loss) Before Taxes | -20 | 147 |
Middle East/Asia Pacific | ||
Summarized financial information [Abstract] | ||
Revenue | 916 | 1,060 |
Profit (Loss) Before Taxes | 62 | 130 |
Industrial Services | ||
Summarized financial information [Abstract] | ||
Revenue | 284 | 321 |
Profit (Loss) Before Taxes | 10 | 27 |
Total Operations | ||
Summarized financial information [Abstract] | ||
Revenue | 4,594 | 5,731 |
Profit (Loss) Before Taxes | -124 | 617 |
Corporate and other | ||
Summarized financial information [Abstract] | ||
Revenue | 0 | 0 |
Profit (Loss) Before Taxes | -77 | -65 |
Interest expense, net | ||
Summarized financial information [Abstract] | ||
Revenue | 0 | 0 |
Profit (Loss) Before Taxes | -54 | -57 |
Restructuring Charges [Member] | ||
Summarized financial information [Abstract] | ||
Revenue | 0 | 0 |
Profit (Loss) Before Taxes | ($573) | $0 |
Income_Taxes_Details
Income Taxes - (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Rate | ||
Income Tax Disclosure [Abstract] | ||
Income taxes | ($235) | $159 |
Effective Income Tax Rate Reconciliation, Percent | 28.40% | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |
Restructuring Costs and Asset Impairment Charges | 744 | |
Income tax benefit, Amount related to Restructuring | $207 |
Earnings_Per_Share_Details
Earnings Per Share - (Details) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Weighted average common shares outstanding for basic EPS | 437 | 439 |
Adjustment for effect of dilutive securities - stock plans | 0 | 2 |
Weighted average common shares outstanding for diluted EPS | 437 | 441 |
Future potentially anti-dilutive shares excluded from diluted EPS | 5 | 0 |
Future potentially dilutive shares excluded from diluted EPS | 0 | 3 |
Inventories_Details
Inventories - (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Inventory, Net [Abstract] | ||
Inventory Valuation Reserves | $342 | $319 |
Finished goods | 3,452 | 3,644 |
Work in process | 210 | 227 |
Raw materials | 181 | 203 |
Total inventories | $3,843 | $4,074 |
Intangible_Assets_Schedule_of_
Intangible Assets - Schedule of Intangible Assets by Type (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | ||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||||
Document Period End Date | 31-Mar-15 | |||
Finite-Lived Intangible Assets, Gross | $1,497 | $1,501 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 714 | 689 | ||
Finite-Lived Intangible Assets, Net | 783 | 812 | ||
Technology-Based Intangible Assets | ||||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 867 | 870 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 407 | 393 | ||
Finite-Lived Intangible Assets, Net | 460 | 477 | ||
Customer Relationships | ||||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 487 | 488 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | 201 | 191 | ||
Finite-Lived Intangible Assets, Net | 286 | 297 | ||
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 | 93 | 92 | ||
Finite-Lived Intangible Assets, Net | 27 | 28 | ||
Other Intangible Assets | ||||
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 23 | [1] | 23 | [1] |
Finite-Lived Intangible Assets, Accumulated Amortization | 13 | 13 | ||
Finite-Lived Intangible Assets, Net | 10 | [1] | 10 | [1] |
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) | $7 | [1] | $7 | [1] |
[1] | Includes indefinite-lived intangibles of $7 million at March 31, 2015 and $7 million at December 31, 2014 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, 2015 |
In Millions, unless otherwise specified | |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
Reminder of 2014 | $77 |
2015 | 101 |
2016 | 98 |
2017 | 91 |
2018 | 88 |
2019 | $78 |
Intangible_Assets_Textual_Info
Intangible Assets - Textual Information (Details) (USD $) | 3 Months Ended | ||||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | ||
Finite-Lived Intangible Assets [Line Items] | |||||
Document Fiscal Year Focus | 2015 | ||||
Document Period End Date | 31-Mar-15 | ||||
Amortization expense for intangible assets included in net income | $26 | $26 | |||
Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 3 years 0 months 0 days | ||||
Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 30 years 0 months 0 days | ||||
In Process Research and Development [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $7 | [1] | $7 | [1] | |
[1] | Includes indefinite-lived intangibles of $7 million at March 31, 2015 and $7 million at December 31, 2014 related to in-process research and development projects. |
Financial_Instruments_Details
Financial Instruments - (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Fair Value Disclosures [Abstract] | ||
Debt, fair value | $4,673 | $4,663 |
Debt, Long-term and Short-term, Combined Amount | $4,055 | $4,133 |
Employee_Benefit_Plans_Details
Employee Benefit Plans - (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Components of net periodic benefit cost [Abstract] | ||
Curtailment gain | ($9) | |
U.S. Pension Benefits | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | 18 | 17 |
Interest cost | 7 | 7 |
Expected return on plan assets | -13 | -11 |
Amortization of prior service credit | 0 | 0 |
Amortization of net actuarial loss | 2 | 2 |
Other | 0 | 0 |
Net periodic cost | 14 | 15 |
Non-U.S. Pension Benefits | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | 4 | 3 |
Interest cost | 8 | 9 |
Expected return on plan assets | -12 | -10 |
Amortization of prior service credit | 0 | 0 |
Amortization of net actuarial loss | 1 | 1 |
Other | 0 | 0 |
Net periodic cost | 1 | 3 |
Other Postretirement Benefits | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | 1 | 1 |
Interest cost | 1 | 2 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service credit | -3 | -1 |
Amortization of net actuarial loss | 1 | 1 |
Curtailment gain | -9 | 0 |
Other | 0 | -4 |
Net periodic cost | ($9) | ($1) |
Commitments_and_Contingencies_1
Commitments and Contingencies - (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Claims amount for terminated contract | $67,900,000 | $67,900,000 | |
Additional claim amount for terminated contract | 57,000,000 | 57,000,000 | |
Breach of contract counter suit amount | 182,000,000 | 182,000,000 | |
Litigation settlements | 5,000,000 | ||
Litigation Settlement, Amount | 62,000,000 | ||
Off-balance sheet arrangements related to letters of credit and other bank issued guarantees, total | $1,200,000,000 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss - (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accumulated Other Comprehensive Loss [Line Items] | ||
Beginning Balance | ($749) | ($504) |
Other comprehensive income (loss) before reclassifications | -158 | -30 |
Amounts reclassified from accumulated other comprehensive loss | -10 | -1 |
Deferred taxes | 4 | 1 |
Ending Balance | -913 | -534 |
Pensions and Other Postretirement Benefits | ||
Accumulated Other Comprehensive Loss [Line Items] | ||
Beginning Balance | -246 | -217 |
Other comprehensive income (loss) before reclassifications | 13 | -4 |
Amounts reclassified from accumulated other comprehensive loss | -10 | -1 |
Deferred taxes | 4 | 1 |
Ending Balance | -239 | -221 |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Loss [Line Items] | ||
Beginning Balance | -503 | -287 |
Other comprehensive income (loss) before reclassifications | -171 | -26 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Deferred taxes | 0 | 0 |
Ending Balance | ($674) | ($313) |