Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2017 | |
Entity Registrant Name | Baker Hughes a GE Co LLC | |
Entity Central Index Key | 808,362 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 0 | |
Entity Public Float | $ 0 |
Consolidated and Combined State
Consolidated and Combined Statements of Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | |||
Sales of goods | $ 10,898 | $ 9,488 | $ 12,353 |
Sales of services | 6,361 | 3,781 | 4,335 |
Total revenue | 17,259 | 13,269 | 16,688 |
Costs and expenses: | |||
Cost of goods sold | 9,402 | 7,816 | 9,271 |
Cost of services sold | 4,644 | 2,307 | 2,922 |
Selling, general and administrative expenses | 2,535 | 1,938 | 2,115 |
Restructuring, impairment and other | 412 | 516 | 411 |
Goodwill impairment | 0 | 0 | 2,080 |
Merger and related costs | 373 | 33 | 27 |
Total costs and expenses | 17,366 | 12,610 | 16,826 |
Operating income (loss) | (107) | 659 | (138) |
Other non operating income, net | 78 | 27 | 100 |
Interest expense, net | (131) | (102) | (120) |
Income (loss) before income taxes and equity in loss of affiliate | (160) | 584 | (158) |
Equity in loss of affiliate | (11) | 0 | 0 |
Provision for income taxes | (172) | (250) | (473) |
Net income (loss) | (343) | 334 | (631) |
Less: Net income (loss) attributable to noncontrolling interests | (7) | 69 | 25 |
Net income (loss) attributable to Baker Hughes, a GE company, LLC | $ (350) | $ 403 | $ (606) |
Cash dividend | |||
Costs and expenses: | |||
Cash dividends per unit (in dollars per unit) | $ 0.35 | ||
Cash dividend | Class A | |||
Costs and expenses: | |||
Cash dividends per unit (in dollars per unit) | $ 0.35 |
Consolidated and Combined Stat3
Consolidated and Combined Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (343) | $ 334 | $ (631) |
Less: Net loss attributable to noncontrolling interests | 7 | (69) | (25) |
Net income (loss) attributable to Baker Hughes, a GE company, LLC | (350) | 403 | (606) |
Other comprehensive (loss) income: | |||
Investment securities | 4 | 0 | 0 |
Foreign currency translation adjustments | (3) | (422) | (617) |
Cash flow hedges | 12 | (8) | (2) |
Benefit plans | 55 | 54 | 40 |
Other comprehensive income (loss) | 68 | (376) | (579) |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 3 | (14) | (11) |
Other comprehensive income (loss) attributable Baker Hughes, a GE company, LLC | 65 | (362) | (568) |
Comprehensive loss | (275) | (42) | (1,210) |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 10 | (83) | (36) |
Comprehensive income (loss) attributable to Baker Hughes, a GE company, LLC | $ (285) | $ 41 | $ (1,174) |
Consolidated and Combined Stat4
Consolidated and Combined Statements of Financial Position - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Current Assets: | |||
Cash and equivalents (1) | $ 7,019 | [1] | $ 981 |
Current receivables, net | 6,127 | 2,563 | |
Inventories, net | 4,590 | 3,224 | |
All other current assets | 872 | 633 | |
Total current assets | 18,608 | 7,401 | |
Property, plant and equipment, less accumulated depreciation | 6,959 | 2,325 | |
Goodwill | 19,654 | 6,680 | |
Other intangible assets, net | 6,358 | 2,449 | |
Contract assets | 2,745 | 1,967 | |
All other assets | 2,080 | 573 | |
Deferred income taxes | 482 | 326 | |
Total assets | 56,886 | 21,721 | |
Current Liabilities: | |||
Accounts payable | 3,377 | 1,898 | |
Short-term debt and current portion of long-term debt (1) | 2,037 | [1] | 239 |
Progress collections | 1,381 | 1,596 | |
All other current liabilities | 2,110 | 1,201 | |
Total current liabilities | 8,905 | 4,934 | |
Long-term debt | 6,312 | 38 | |
Deferred income taxes | 367 | 880 | |
Liabilities for pensions and other employee benefits | 1,172 | 519 | |
All other liabilities | 972 | 495 | |
Members' equity: | |||
Members' capital (common units 1,129 & Nil, issued and outstanding as of December 31, 2017 and 2016, respectively) | 41,351 | 0 | |
Parent's net investment | 0 | 16,582 | |
Retained loss | (459) | 0 | |
Accumulated other comprehensive loss | (1,874) | (1,894) | |
Baker Hughes, a GE company, LLC members' equity | 39,018 | 14,688 | |
Noncontrolling interests | 140 | 167 | |
Total equity | 39,158 | 14,855 | |
Total liabilities and equity | $ 56,886 | $ 21,721 | |
[1] | Total assets include $1,124 million of assets held on behalf of GE, of which $997 million is cash and equivalents and $127 million is investment securities at December 31, 2017 and a corresponding amount of liability is reported in short-term borrowings. See "Note 14. Related Party Transactions" for further details. |
Consolidated and Combined Stat5
Consolidated and Combined Statements of Financial Position (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Common units issued (in units) | 1,129 | 0 |
Common unit, outstanding (in units) | 1,129 | 0 |
Related party amount, due to related party | GE | ||
Cash held on behalf of GE | $ 1,124 | |
Cash | 997 | |
Cash and cash equivalents | $ 127 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) shares in Millions, $ in Millions | Total | Common Units | Parent's Net Investment | Retained Loss | Accumulated Other Comprehensive Loss | Non-controlling Interests |
Common unit, outstanding, beginning balance at Dec. 31, 2014 | 0 | |||||
Members equity, beginning balance at Dec. 31, 2014 | $ 16,386 | $ 0 | $ 17,169 | $ 0 | $ (964) | $ 181 |
Comprehensive income: | ||||||
Net income (loss) | (631) | (606) | (25) | |||
Other comprehensive loss | (579) | (568) | (11) | |||
Changes in Parent's net investment | (643) | (643) | ||||
Net activity related to noncontrolling interests | 12 | 12 | ||||
Common unit, outstanding, ending balance at Dec. 31, 2015 | 0 | |||||
Members equity, ending balance at Dec. 31, 2015 | 14,545 | $ 0 | 15,920 | 0 | (1,532) | 157 |
Comprehensive income: | ||||||
Net income (loss) | 334 | 403 | (69) | |||
Other comprehensive loss | (376) | (362) | (14) | |||
Changes in Parent's net investment | 259 | 259 | ||||
Net activity related to noncontrolling interests | $ 93 | 93 | ||||
Common unit, outstanding, ending balance at Dec. 31, 2016 | 0 | 0 | ||||
Members equity, ending balance at Dec. 31, 2016 | $ 14,855 | $ 0 | 16,582 | 0 | (1,894) | 167 |
Comprehensive income: | ||||||
Net income (loss) | (343) | |||||
Other comprehensive loss | $ 68 | |||||
Common unit, outstanding, ending balance at Dec. 31, 2017 | 1,129 | 1,129 | ||||
Members equity, ending balance at Dec. 31, 2017 | $ 39,158 | $ 41,351 | $ 0 | $ (459) | $ (1,874) | $ 140 |
Consolidated Statements of Cha7
Consolidated Statements of Changes in Equity (Parenthetical) | 6 Months Ended |
Dec. 31, 2017$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Cash dividends per unit (in dollars per unit) | $ 0.35 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Statement of Cash Flows [Abstract] | ||||
Net income (loss) | $ (343) | $ 334 | $ (631) | |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||||
Depreciation and amortization | 1,103 | 550 | 530 | |
Goodwill impairment | 0 | 0 | 2,080 | |
Provision for deferred income taxes | (203) | 39 | (96) | |
Changes in operating assets and liabilities: | ||||
Current receivables | (1,296) | 278 | 469 | |
Inventories | 392 | 345 | 442 | |
Accounts payable | 283 | (256) | (450) | |
Progress collections | (232) | (714) | (867) | |
Deferred charges | (570) | (292) | (87) | |
Other operating items, net | 67 | (22) | (113) | |
Net cash flows from (used in) operating activities | (799) | 262 | 1,277 | |
Cash flows from investing activities: | ||||
Expenditures for capital assets | (665) | (424) | (607) | |
Proceeds from disposal of assets | 172 | 20 | 30 | |
Proceeds from business dispositions | 20 | 0 | 181 | |
Net cash paid for acquisitions | (3,365) | (1) | (86) | |
Other investing items, net | (292) | (67) | 16 | |
Net cash flows used in investing activities | (4,130) | (472) | (466) | |
Cash flows from financing activities: | ||||
Net borrowings (repayments) of short-term borrowings | (663) | (156) | 177 | |
Proceeds from the issuance of long-term debt | 3,928 | 0 | 0 | |
Repayments of long-term debt | (177) | 0 | 0 | |
Net transfer from Parent | 1,498 | 191 | (708) | |
Contribution received from GE | 7,400 | 0 | 0 | |
Distributions to members | (406) | 0 | 0 | |
Repurchase of common units | (477) | 0 | 0 | |
Other financing items, net | (188) | (137) | 16 | |
Net cash flows from (used in) financing activities | 10,915 | (102) | (515) | |
Effect of currency exchange rate changes on cash and equivalents | 52 | (139) | (254) | |
Increase (decrease) in cash and equivalents | 6,038 | (451) | 42 | |
Cash and equivalents, beginning of period | 981 | 1,432 | 1,390 | |
Cash and equivalents, end of period | 7,019 | [1] | 981 | 1,432 |
Supplemental cash flows disclosures: | ||||
Income taxes paid, net of refunds | 230 | 317 | 264 | |
Interest paid | $ 109 | $ 55 | $ 52 | |
[1] | Total assets include $1,124 million of assets held on behalf of GE, of which $997 million is cash and equivalents and $127 million is investment securities at December 31, 2017 and a corresponding amount of liability is reported in short-term borrowings. See "Note 14. Related Party Transactions" for further details. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF THE BUSINESS Baker Hughes, a GE company, LLC, a Delaware limited liability company (the Company, BHGE LLC, we, us, or our ) and the successor to Baker Hughes Incorporated, a Delaware corporation (Baker Hughes) is a fullstream oilfield technology provider that has a unique mix of equipment and service capabilities. We conduct business in more than 120 countries and employ over 64,000 employees. BASIS OF PRESENTATION On July 3, 2017, we closed our previously announced business combination (the Transactions) to combine the oil and gas business (GE O&G) of General Electric Company (GE) and Baker Hughes (refer to "Note 2. Business Acquisition" for further details on the Transactions). In connection with the Transactions, we entered into and are governed by an Amended & Restated Limited Liability Company Agreement, dated as of July 3, 2017 (the BHGE LLC Agreement). Under the BHGE LLC Agreement, EHHC Newco, LLC (EHHC), a wholly owned subsidiary of Baker Hughes, a GE company (BHGE), is our sole managing member and BHGE is the sole managing member of EHHC. As our managing member, EHHC conducts, directs and exercises full control over all our activities, including our day-to-day business affairs and decision-making, without the approval of any other member. As such, EHHC is responsible for all our operational and administrative decisions and the day-to-day management of our business. GE owns approximately 62.5% of our common units and BHGE owns approximately 37.5% of our common units indirectly through two wholly owned subsidiaries. The current year results, and balances, may not be comparable to prior years as they include the results of Baker Hughes from July 3, 2017. The Transactions were treated as a "reverse acquisition" for accounting purposes and, as such, the historical financial statements of the accounting acquirer, GE O&G, are the historical financial statements of the Company. The accompanying consolidated and combined financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. and such principles, U.S. GAAP) and pursuant to the rules and regulations of the SEC for annual financial information. All intercompany accounts and transactions have been eliminated. The Company's financial statements have been prepared on a consolidated basis, effective July 3, 2017. Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest). All subsequent periods will also be presented on a consolidated basis. For all periods prior to July 3, 2017, the Company's financial statements were prepared on a combined basis. The combined financial statements combine certain accounts of GE and its subsidiaries that were historically managed as part of its oil & gas business and contributed to BHGE LLC as part of the Transactions. Additionally, it also includes certain assets, liabilities and results of operations of other businesses of GE that were also contributed to BHGE LLC as part of the Transactions on a fully retrospective basis (in accordance with the guidance applicable to transactions between entities under common control) based on their carrying values, as reflected in the accounting records of GE. The consolidated and combined statements of income reflect intercompany expense allocations made to us by GE for certain corporate functions and for shared services provided by GE. Where possible, these allocations were made on a specific identification basis, and in other cases, these expenses were allocated by GE based on relative percentages of net operating costs or some other basis depending on the nature of the allocated cost. See "Note 16. Related Party Transactions" for further information on expenses allocated by GE. The historical financial results in the consolidated and combined financial statements presented may not be indicative of the results that would have been achieved had GE O&G operated as a separate, stand-alone entity during those periods. The GE O&G numbers in the consolidated and combined statements of income (loss) have been reclassed to conform to the current presentation. We believe that the current presentation is a more appropriate presentation of the combined businesses. Merger and related costs includes all costs associated with the Transactions described in Note 2. Refer to "Note 2. Business Acquisition" for further details. In the notes to the consolidated and combined financial statements, all dollar and members' units in tabulations are in millions of dollars and members' units, respectively, unless otherwise indicated. Certain columns and rows may not add due to the use of rounded numbers. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of any contingent assets or liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information that we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty, and accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. While we believe that the estimates and assumptions used in the preparation of the consolidated and combined financial statements are appropriate, actual results could differ from those estimates. Estimates are used for, but are not limited to, determining the following: allowance for doubtful accounts and inventory valuation reserves; recoverability of long-lived assets, including revenue recognition on long term contracts, valuation of goodwill; useful lives used in depreciation and amortization; income taxes and related valuation allowances; accruals for contingencies; actuarial assumptions to determine costs and liabilities related to employee benefit plans; stock-based compensation expense; valuation of derivatives and the fair value of assets acquired and liabilities assumed in acquisitions; and expense allocations for certain corporate functions and shared services provided by GE. Foreign Currency Assets and liabilities of non-U.S. operations with a functional currency other than the U.S. dollar have been translated into U.S. dollars at the quarterly exchange rates, and revenue, expenses, and cash flows have been translated at average rates for the respective periods. Any resulting translation gains and losses are included in other comprehensive income (loss). Gains and losses from foreign currency transactions, such as those resulting from the settlement of receivables or payables in the non-functional currency and those resulting from remeasurements of monetary items, are included in the consolidated and combined statement of income (loss). Cost and Equity Method Investment Investments in privately held companies in which we do not have the ability to exercise significant influence, most often because we hold a voting interest of 0% to 20% are accounted for using the cost method. Associated companies are entities in which we do not have a controlling financial interest, but over which we have significant influence, most often because we hold a voting interest of 20% to 50% . Associated companies are accounted for as equity method investments. Results of associated companies are presented on a one-line basis in the caption "Equity in loss of affiliate" in our consolidated and combined statements of income (loss). Investments in, and advances to, associated companies are presented on a one-line basis in the caption "All other assets" in our consolidated and combined statement of financial position. Sales of Goods and Services We record all sales of goods and services only when a firm sales agreement is in place, delivery has occurred or services have been rendered and collectability of the fixed or determinable sales price is reasonably assured. Except for goods sold under long-term construction type contracts and service agreements, we recognize sales of goods under the provisions of SEC Staff Accounting Bulletin (SAB) 104, Revenue Recognition . In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have reliably demonstrated that all specified acceptance criteria have been met or when formal acceptance occurs, respectively. We do not provide for anticipated losses before we record sales. We recognize revenue on larger construction and equipment contracts using long-term construction accounting. We estimate total long-term contract revenue net of price concessions as well as total contract costs. For larger construction and equipment contracts, we recognize sales based on our progress toward contract completion measured by actual costs incurred in relation to our estimate of total expected costs. We routinely update our estimates of future costs for agreements in process and report any cumulative effects of such adjustments in current operations. We provide for any loss that we expect to incur on these agreements when that loss is probable. We sell product services under long-term product maintenance agreements, where costs of performing services are incurred on an other than straight-line basis. We recognize related sales based on the extent of our progress toward completion measured by actual costs incurred in relation to our estimate of total expected costs. We routinely update our estimates of future costs for agreements in process and report any cumulative effects of such adjustments in current operations. For our long-term product maintenance agreements, we regularly assess customer credit risk inherent in the carrying amounts of receivables and contract costs and estimated earnings, including the risk that contractual penalties may not be sufficient to offset our accumulated costs in the event of customer termination. We gain insight into expected future utilization and cost trends, as well as credit risk, through our knowledge of the installed base of equipment and the close interaction with our customers that comes with supplying critical services and parts over extended periods. Revisions, after applying the cumulative catch up basis of accounting, may affect a product services agreement's total estimated profitability resulting in an adjustment of earnings. We provide for probable losses when they become evident. Arrangements for the sale of goods and services sometimes include multiple components. Our arrangements with multiple components usually involve an upfront deliverable of equipment and future service deliverables such as installation, commissioning, training or the future delivery of ancillary products. In most cases, the relative values of the undelivered components are not significant to the overall arrangement and are typically delivered within three to six months after the core product has been delivered. In such agreements, selling price is determined for each component and any difference between the total of the separate selling prices and total contract consideration (i.e., discount) is allocated pro rata across each of the components in the arrangement. The value assigned to each component is objectively determined and obtained primarily from sources such as the separate selling price for that or a similar item or from competitor prices for similar items. If such evidence is not available, we use our best estimate of selling price, which is established consistent with the pricing strategy of the business and considers product configuration, geography, customer type, and other market specific factors. Research and Development Research and development costs are expensed as incurred and relate to the research and development of new products and services. These costs amounted to $501 million , $352 million and $408 million for the years ended December 31, 2017 , 2016 and 2015, respectively. Research and development expenses were reported in cost of goods sold and cost of services sold. Cash and Equivalents Short-term investments with original maturities of three months or less are included in cash equivalents unless designated as available-for-sale and classified as investment securities. As of December 31, 2017 and December 31, 2016, $1,190 million and $752 million , respectively, of cash and equivalents were considered restricted as they were held in bank accounts and cannot be released, transferred or otherwise converted into a currency that is regularly transacted internationally, due to lack of market liquidity, capital controls or similar monetary or exchange limitations limiting the flow of capital out of the jurisdiction. Cash and equivalents includes $997 million of cash at December 31, 2017 held on behalf of GE, of which $764 million is restricted, and a corresponding liability is reported in short-term borrowings. See "Note 16. Related Party Transactions" for further details. Allowance for Doubtful Accounts We establish an allowance for doubtful accounts based on various factors including the payment history and financial condition of our debtors and the economic environment. Provisions for doubtful accounts are recorded based on the aging status of the debtor accounts or when it becomes evident that the debtor will not make the required payments at either contractual due dates or in the future. Concentration of Credit Risk We grant credit to our customers who primarily operate in the oil and natural gas industry. Although this concentration affects our overall exposure to credit risk, our current receivables are spread over a diverse group of customers across many countries, which mitigates this risk. We perform periodic credit evaluations of our customers' financial conditions, including monitoring our customers' payment history and current credit worthiness to manage this risk. We do not generally require collateral in support of our current receivables, but we may require payment in advance or security in the form of a letter of credit or a bank guarantee. Inventories All inventories are stated at the lower of cost or net realizable values and they are measured on a first-in, first-out (FIFO) basis or average cost basis. As necessary, we record provisions and maintain reserves for excess, slow moving and obsolete inventory. To determine these reserve amounts, we regularly review inventory quantities on hand and compare them to estimates of future product demand, market conditions, production requirements and technological developments. Property, Plant and Equipment (PP&E) Property, plant and equipment is initially stated at cost and is depreciated over its estimated economic life. Subsequently, property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. We manufacture a substantial portion of our tools and equipment and the cost of these items, which includes direct and indirect manufacturing costs, is capitalized and carried in inventory until it is completed. Other Intangible Assets We amortize the cost of other intangible assets over their estimated useful lives unless such lives are deemed indefinite. The cost of intangible assets is generally amortized on a straight-line basis over the asset's estimated economic life. Amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. In these circumstances, they are tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Intangible assets with indefinite lives are tested annually for impairment and written down to fair value as required. Refer to the Impairment of Goodwill and Other Long-Lived Assets accounting policy. Impairment of Goodwill and Other Long-lived Assets We perform an annual impairment test of goodwill on a qualitative or quantitative basis for each of our reporting units as of July 1, or more frequently when circumstances indicate an impairment may exist at the reporting unit level. When performing the annual impairment test we have the option of first performing a qualitative assessment to determine the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If such a conclusion is reached, we would then be required to perform a quantitative impairment assessment of goodwill. However, if the assessment leads to a determination that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then no further assessments are required. A quantitative assessment for the determination of impairment is made by comparing the carrying amount of each reporting unit with its fair value, which is generally calculated using a combination of market, comparable transaction and discounted cash flow approaches. See "Note 6. Goodwill and Other Intangible Assets" for further information on valuation methodology and impairment of goodwill. We review PP&E, intangible assets and certain other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable and at least annually for indefinite-lived intangible assets. When testing for impairment, we group our long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (or asset group). The determination of recoverability is made based upon the estimated undiscounted future net cash flows. The amount of impairment loss, if any, is determined by comparing the fair value, as determined by a discounted cash flow analysis, with the carrying value of the related assets. Financial Instruments Our financial instruments include cash and equivalents, current receivables, investments, accounts payables, short and long-term debt, and derivative financial instruments. We monitor our exposure to various business risks including commodity prices and foreign currency exchange rates and we regularly use derivative financial instruments to manage these risks. At the inception of a new derivative, we designate the derivative as a hedge or we determine the derivative to be undesignated as a hedging instrument. We document the relationships between the hedging instruments and the hedged items, as well as our risk management objectives and strategy for undertaking various hedge transactions. We assess whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged item at both the inception of the hedge and on an ongoing basis. We have a program that utilizes foreign currency forward contracts to reduce the risks associated with the effects of certain foreign currency exposures. Under this program, our strategy is to have gains or losses on the foreign currency forward contracts mitigate the foreign currency transaction and translation gains or losses to the extent practical. These foreign currency exposures typically arise from changes in the value of assets (for example, current receivables) and liabilities (for example, current payables) which are denominated in currencies other than the functional currency of the respective entity. We record all derivatives as of the end of our reporting period in our consolidated and combined statement of financial position at fair value. For the forward contracts held as undesignated hedging instruments, we record the changes in fair value of the forward contracts in our consolidated and combined statements of income along with the change in the fair value, related to foreign exchange movements, of the hedged item. Changes in the fair value of forward contracts designated as cash flow hedging instruments are recognized in other comprehensive income until the hedged item is recognized in earnings. If derivatives designated as a cash flow hedge are determined to be ineffective, the ineffective portion of that derivative's change in fair value is recognized in earnings. Fair Value Measurements For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: • Level 1 - Quoted prices for identical instruments in active markets. • Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 - Significant inputs to the valuation model are unobservable. We maintain policies and procedures to value instruments using the best and most relevant data available. In addition, we perform reviews to assess the reasonableness of the valuations. With regard to Level 3 valuations (including instruments valued by third parties), we perform a variety of procedures to assess the reasonableness of the valuations. Such reviews include an evaluation of instruments whose fair value change exceeds predefined thresholds (and/or does not change) and consider the current interest rate, currency and credit environment, as well as other published data, such as rating agency market reports and current appraisals. Recurring Fair Value Measurements Derivatives When we have Level 1 derivatives, which are traded either on exchanges or liquid over-the-counter markets, we use closing prices for valuation. The majority of our derivatives are valued using internal models and are included in Level 2. These internal models maximize the use of market observable inputs including interest rate curves and both forward and spot prices for currencies and commodities. Derivative assets and liabilities included in Level 2 primarily represent foreign currency and commodity forward contracts for the Company. Investments in Debt and Equity Securities When available, we use quoted market prices to determine the fair value of investment securities, and they are included in Level 1. Level 1 securities primarily include publicly traded equity securities. For investment securities for which market prices are observable for identical or similar investment securities but not readily accessible for each of those investments individually (that is, it is difficult to obtain pricing information for each individual investment security at the measurement date), we use pricing models that are consistent with what other market participants would use. The inputs and assumptions to the models are derived from market observable sources including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and other market-related data. Thus, certain securities may not be priced using quoted prices, but rather determined from market observable information. These investments are included in Level 2. When we use valuations that are based on significant unobservable inputs we classify the investment securities in Level 3. Non-Recurring Fair Value Measurements Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances. These assets can include long-lived assets that have been reduced to fair value when they are held for sale, cost and equity method investments and long-lived assets that are written down to fair value when they are impaired and the remeasurement of retained investments in formerly consolidated subsidiaries upon a change in control that results in a deconsolidation of a subsidiary, if we sell a controlling interest and retain a noncontrolling stake in the entity. Assets that are written down to fair value when impaired and retained investments are not subsequently adjusted to fair value unless further impairment occurs. Cost and Equity Method Investments Cost and equity method investments are valued using market observable data such as quoted prices when available. When market observable data is unavailable, investments are valued using a discounted cash flow model, comparative market multiples or a combination of both approaches as appropriate and other third-party pricing sources. Long-lived Assets Fair values of long-lived assets, including real estate, are primarily derived internally and are based on observed sales transactions for similar assets. In other instances, for example, collateral types for which we do not have comparable observed sales transaction data, collateral values are developed internally and corroborated by external appraisal information. Adjustments to third-party valuations may be performed in circumstances where market comparables are not specific to the attributes of the specific collateral or appraisal information may not be reflective of current market conditions due to the passage of time and the occurrence of market events since receipt of the information. Income Taxes We are treated as a partnership for U.S. federal income tax purposes. As such, except for certain U.S. corporations owned by the Company, we are not subject to U.S. federal income tax under current U.S. tax laws. Our members will each be required to take into account for U.S. federal income tax purposes their distributive share of our items of income, gain, loss and deduction, which generally will include the U.S. operations of both Baker Hughes and GE O&G. BHGE and GE will each be taxed on their distributive share of income and gain, whether or not a corresponding amount of cash or other property is distributed to them. For assets held indirectly by us through subsidiaries, including both foreign and U.S., the taxes attributable to those subsidiaries will be reflected in our consolidated and combined financial statements. We account for taxes under the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial statement and tax return bases of assets and liabilities as well as from net operating losses and tax credit carryforwards, based on enacted tax rates expected to be in effect when taxes actually are paid or recovered and other provisions of the tax law. The effect of a change in tax laws or rates on deferred tax assets and liabilities is recognized in income in the period in which such change is enacted. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not, and a valuation allowance is established for any portion of a deferred tax asset that management believes may not be realized. Due to the enactment of U.S. tax reform, repatriations of foreign earnings will generally be free of U.S. federal tax but may incur other taxes, such as withholding or state taxes. Indefinite reinvestment is determined by management’s judgment about and intentions concerning the future operations of the Company. Most of these earnings have been reinvested in active non-U.S. business operations. At December 31, 2017, we have not changed our indefinite reinvestment decision as a result of U.S. tax reform but will reassess this during the course of 2018, accordingly, we have not provided income tax on such earnings. It is not practicable to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely. Significant judgment is required in determining our tax expense and in evaluating our tax positions, including evaluating uncertainties. We operate in more than 120 countries and our tax filings are subject to audit by the tax authorities in the jurisdictions where we conduct business. These audits may result in assessments of additional taxes that are resolved with the tax authorities or through the courts. We have provided for the amounts that we believe will ultimately result from these proceedings. We recognize uncertain tax positions that are “more likely than not” to be sustained if the relevant tax authority were to audit the position with full knowledge of all the relevant facts and other information. For those tax positions that meet this threshold, we measure the amount of tax benefit based on the largest amount of tax benefit that has a greater than 50% chance of being realized in a final settlement with the relevant authority. We classify interest and penalties associated with uncertain tax positions as income tax expense. The effects of tax adjustments and settlements from taxing authorities are presented in the combined financial statements in the period they are recorded. Additionally, as part of U.S. tax reform, the U.S. has enacted a tax on "base eroding" payments from the U.S. and a minimum tax on foreign earnings (global intangible low-taxed income). Because aspects of the new minimum tax and the effect on our operations is uncertain and because aspects of the accounting rules associated with this provision have not been resolved, we have not made a provisional accrual for the deferred tax aspects of this provision and consequently have not made an accounting policy election on the deferred tax treatment of this tax. Environmental Liabilities We are involved in numerous remediation actions to clean up hazardous waste as required by federal and state laws. Liabilities for remediation costs exclude possible insurance recoveries and, when dates and amounts of such costs are not known, are not discounted. When there appears to be a range of possible costs with equal likelihood, liabilities are based on the low end of such range. It is reasonably possible that our environmental remediation exposure will exceed amounts accrued. However, due to uncertainties about the status of laws, regulations, technology and information related to individual sites, such amounts are not reasonably estimable. The determination of the required accruals for remediation costs is subject to uncertainty, including the evolving nature of environmental regulations and the difficulty in estimating the extent and type of remediation activity that is necessary. NEW ACCOUNTING STANDARDS TO BE ADOPTED ASU No. 2014-09, Revenue from Contracts with Customers Background In May 2014, the Financial Accounting Standards Board (FASB) issued a new comprehensive set of revenue recognition principles, Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, that supersedes most existing U.S. GAAP revenue recognition guidance (including ASC 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts). The new standard will become effective for annual reporting periods beginning after December 15, 2017. We adopted the standard on January 1, 2018 and will apply it retrospectively to all periods presented and will elect the practical expedient for contract modifications. Since the issuance of the new standard by the FASB, we have engaged in a collaborative process with our industry peers and worked with standard setters on important interpretive matters with the objective of ensuring consistency in the application of the standard. Change in Timing and Presentation, No Impact to Cash or Economics The new standard requires companies to identify contractual performance obligations and determine whether revenue |
Business Acquisition
Business Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Acquisition | BUSINESS ACQUISITION On July 3, 2017, we closed the Transactions to combine GE O&G and Baker Hughes, creating a world leading, fullstream oilfield technology provider that has a unique mix of equipment and service capabilities. The Transactions were executed using a partnership structure, pursuant to which GE O&G and Baker Hughes each contributed their operating assets to the Company. As a partnership, we will not be subject to U.S. federal income tax under current U.S. tax laws. Our foreign subsidiaries, however, are expected to incur current and deferred foreign income taxes. GE holds an approximate 62.5% controlling interest in us and former Baker Hughes shareholders hold an approximate 37.5% interest through the ownership of 100% of Class A common stock of BHGE. GE holds its voting interest through Class B common stock in BHGE and its economic interest through a corresponding number of common units of BHGE LLC. Former Baker Hughes shareholders immediately after the completion of the Transactions also received a special dividend of $17.50 per share paid by BHGE to holders of record of the Company's Class A common stock. GE contributed $7.4 billion to us to fund substantially all of the special dividend. Prior to the Transactions, shares of Baker Hughes common stock were registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act) and listed on the New York Stock Exchange and the SIX Swiss Exchange. Shares of Baker Hughes common stock were suspended from trading on the New York Stock Exchange and the SIX Swiss Exchange prior to the open of trading on July 5, 2017. The New York Stock Exchange filed a Form 25 on Baker Hughes' behalf to provide notice to the SEC regarding the withdrawal of shares of Baker Hughes common stock from listing and to terminate the registration of such shares under Section 12(b) of the Exchange Act. As a result of the Transactions, on July 3, 2017, the Company issued 428 million common units to BHGE and 717 million common units to GE. Based on the relative voting rights of former Baker Hughes shareholders and GE immediately following completion of the Transactions, and after taking into consideration all relevant facts, GE O&G is considered to be the "acquirer" for accounting purposes. As a result, the Transactions are reported as a business combination using the acquisition method of accounting with GE O&G treated as the "acquirer" and Baker Hughes treated as the "acquired" company. The tables below present the fair value of the consideration exchanged and the preliminary estimates of the fair value of assets acquired and liabilities assumed and the associated fair value of the noncontrolling interest related to the acquired net assets of Baker Hughes. The final determination of fair value for certain assets and liabilities will be completed as soon as the information necessary to complete the analysis is obtained. These amounts, which may differ materially from these preliminary estimates, will continue to be refined and will be finalized as soon as possible, but no later than one year from the acquisition date. The primary areas of the preliminary estimates that are not yet finalized relate to inventory, property, plant and equipment, identifiable intangible assets, equity-method investments, deferred income taxes, uncertain tax positions and contingencies. Purchase consideration (In millions, except share and per share amounts) July 3, 2017 Baker Hughes shares outstanding 426,097,407 Restricted stock units vested upon closing 1,611,566 Total Baker Hughes shares outstanding for purchase consideration 427,708,973 Baker Hughes share price on July 3, 2017 per share $ 57.68 Purchase consideration $ 24,670 Rollover of outstanding options into options to purchase Class A shares of BHGE (fair value) $ 114 Precombination service of restricted stock units (fair value) $ 14 Total purchase consideration $ 24,798 Preliminary identifiable assets acquired and liabilities assumed Estimated fair value at July 3, 2017 Assets Cash and equivalents $ 4,133 Current receivables 2,383 Inventories (1) 1,695 Property, plant and equipment 4,868 Intangible assets (2) 4,123 All other assets 1,544 Liabilities Accounts payable $ (1,106 ) Borrowings (3,370 ) Deferred income taxes (3) (43 ) Liabilities for pension and other postretirement benefits (655 ) All other liabilities (1,476 ) Total identifiable net assets $ 12,096 Noncontrolling interest associated with net assets acquired (76 ) Goodwill (4) 12,778 Total purchase consideration $ 24,798 (1) Includes $87 million of adjustments to write-up the acquired inventory to its estimated fair value. Cost of goods sold in 2017 reflects this increased valuation as this inventory was used or sold in the period from July 3, 2017 to December 31, 2017. (2) Intangible assets, as provided in the table below, are recorded at estimated fair value, as determined by management based on available information which includes a preliminary valuation. The estimated useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. We consider the Baker Hughes trade name to be an indefinite life intangible asset, which will not be amortized and will be subject to an annual impairment test. Estimated Fair Value Estimated Weighted Trademarks - Baker Hughes $ 2,100 Indefinite life Customer-related 1,260 15 Patents and technology 550 10 Trademarks - Other 70 10 Capitalized software 90 3-7 In-process research and development 45 Indefinite life Favorable lease contracts 8 10 Total $ 4,123 (3) Includes approximately $160 million of net deferred tax liabilities related to the estimated fair value of intangible assets included in the preliminary purchase consideration and approximately $117 million of other net deferred tax assets, including non-U.S. loss carryforwards net of valuation allowances and offsetting liabilities for unrecognized benefits. (4) Goodwill represents the excess of the total purchase consideration over fair value of the net assets recognized and represents the future economic benefits that we believe will result from combining the operations of GE O&G and Baker Hughes, including expected future synergies and operating efficiencies. Goodwill resulting from the Transactions has been preliminarily allocated to the Oilfield Services segment, of which $67 million is deductible for tax purposes. During the fourth quarter of 2017, the Company made measurement period adjustments to reflect facts and circumstances in existence as of the acquisition date. These adjustments resulted in a decrease in goodwill of approximately $366 million mostly due to the step-up to fair value of property, plant and equipment of $682 million partially offset by a reduction in intangible assets of $367 million . As a result of the increase in property, plant and equipment and the reduction of intangible assets during the fourth quarter of 2017, we recorded a net increase to depreciation and amortization expense of $63 million , which adjusts the depreciation and amortization expense to the amount that would have been recorded in previous int erim reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. In addition, we reclassified certain balances to conform to our current presentation. The acquisition of Baker Hughes contributed revenue of approximately $5,184 million and pretax segment operating income of approximately $256 million for the period from July 3, 2017 through December 31, 2017. INCOME TAXES We are treated as a partnership for U.S. federal income tax purposes. As such, we will not be subject to U.S. federal income tax under current U.S. tax laws. Our members will each be required to take into account for U.S. federal income tax purposes their distributive share of our items of income, gain, loss and deduction, which generally will include the U.S. operations of both Baker Hughes and GE O&G. BHGE and GE will each be taxed on their distributive share of income and gain, whether or not a corresponding amount of cash or other property is distributed to them. For assets held indirectly by us through subsidiaries, the taxes attributable to those subsidiaries will be reflected in our consolidated and combined financial statements. MERGER AND RELATED COSTS During 2017, 2016 and 2015, acquisition costs of $373 million , $33 million and $27 million , respectively, were expensed as incurred and were reported as merger and related costs. Costs in 2017 include severance and other separation payments made to certain executive officers of Baker Hughes related to change-in-control with double trigger provisions in their existing employment agreements, professional fees of advisors, and integration and synergy costs related to the combination of Baker Hughes and GE O&G. The double-trigger provisions resulted in payments to executives of Baker Hughes following two events: a change-in-control and termination or reduction in the responsibilities of the executives. We terminated the employment of certain executives following the business combination. UNAUDITED ACTUAL AND PRO FORMA INFORMATION The following unaudited pro forma information has been presented as if the Transactions occurred on January 1, 2016. This information has been prepared by combining the historical results of GE O&G and historical results of Baker Hughes. The unaudited pro forma combined financial data for all periods presented were adjusted to give effect to pro forma events that 1) are directly attributable to the aforementioned Transactions, 2) factually supportable, and 3) expected to have a continuing impact on the consolidated results of operations. The adjustments are based on information available to the Company at this time. Accordingly, the adjustments are subject to change and the impact of such changes may be material. The unaudited pro forma results do not include any incremental cost savings that may result from the integration. The unaudited combined pro forma information is for informational purposes only and is not necessarily indicative of what the combined company's results actually would have been had the acquisition been completed as of the beginning of the periods as indicated. In addition, the unaudited pro forma information does not purport to project the future results of the combined company. Significant adjustments to the pro forma information below include recognition of non-recurring direct incremental acquisition costs in 2016 and exclusion of those costs from all other years presented; amortization associated with an estimate of the acquired intangible assets; depreciation associated with an estimate of the fair value step-up of property, plant and equipment; and reduction of interest expense for fair value adjustments to debt. A non-recurring contractually obligated termination fee of $3,500 million ( $3,301 million net of related costs incurred) received by Baker Hughes due to an inability to obtain antitrust related approvals from a prior merger agreement is recognized in 2016. 2017 2016 Revenue $ 21,921 $ 23,102 Net loss (436 ) (2,734 ) Net loss attributable to the Company (442 ) (2,667 ) |
Current Receivables
Current Receivables | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Current Receivables | CURRENT RECEIVABLES Current receivables are comprised of the following at December 31: 2017 2016 Customer receivables $ 4,699 $ 1,699 Related parties 914 392 Other 844 658 Total current receivables 6,457 2,749 Less: Allowance for doubtful accounts (330 ) (186 ) Total current receivables, net $ 6,127 $ 2,563 Customer receivables are recorded at the invoiced amount. The "Other" category primarily consists of advance payments to suppliers, indirect taxes and other tax receivables. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory, Net [Abstract] | |
Inventories | INVENTORIES Inventories, net of reserves of $360 million and $260 million in 2017 and 2016 , respectively, are comprised of the following at December 31: 2017 2016 Finished goods $ 2,597 $ 1,585 Work in process and raw materials 1,993 1,639 Total inventories, net $ 4,590 $ 3,224 During 2017 and 2016 we recorded $157 million and $138 million of inventory impairments as a result of certain restructuring activities initiated by the Company. Charges for inventory impairments are reported in the "Cost of goods sold" caption of the consolidated and combined statements of income (loss). |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are comprised of the following at December 31: Useful Life 2017 2016 Land and improvements (1) 8 - 20 years (1) $ 413 $ 130 Buildings, structures and related equipment 5 - 40 years 3,168 1,344 Machinery, equipment and other 2 - 20 years 6,195 2,916 Total cost 9,776 4,390 Less: Accumulated depreciation 2,817 2,065 Property, plant and equipment, less accumulated depreciation $ 6,959 $ 2,325 (1) Useful life excludes land. Depreciation expense relating to property, plant and equipment was $716 million , $311 million and $351 million in 2017 , 2016 and 2015 , respectively. See "Note 16. Restructuring, impairment and other" for additional information on property, plant and equipment impairments. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS GOODWILL The changes in the carrying value of goodwill are detailed below by segment: Oilfield Services Oilfield Equipment Turbo-machinery & Process Solutions Digital Solutions Total Balance at December 31, 2015, gross $ 2,885 $ 3,840 $ 1,853 $ 2,043 $ 10,621 Accumulated impairment at December 31, 2015 (2,633 ) (867 ) — (254 ) (3,754 ) Balance at December 31, 2015 252 2,973 1,853 1,789 6,867 Acquisitions and purchase accounting adjustments 19 (1 ) 18 Currency exchange and others (106 ) (7 ) (38 ) (54 ) (205 ) Balance at December 31, 2016 146 2,985 1,814 1,735 6,680 Acquisition (1) 12,778 — — — 12,778 Currency exchange and others 8 49 92 47 196 Balance at December 31, 2017 $ 12,932 $ 3,034 $ 1,906 $ 1,782 $ 19,654 (1) Includes goodwill associated with the acquisition of Baker Hughes. This amount and its allocations to segments are preliminary. Subsequent to the close of the acquisition of Baker Hughes, we realigned our reporting units to Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS) and Digital Solutions (DS) (refer to "Note 13. Segment Information") and reallocated the goodwill that existed as of June 30, 2017 to the new reportable segments for all historical periods presented. The majority of Baker Hughes business was combined with the GE O&G Surface business to create the new Oilfield Services reporting segment. Our reporting units are the same as our four reportable segments. We test goodwill for impairment annually in the third quarter of each year using data as of July 1 of that year, which would include consideration of any segment realignment. The impairment test consists of two steps: in step one, the carrying value of the reporting unit is compared with its fair value; in step two, which is applied only when the carrying value is more than its fair value, the amount of goodwill impairment, if any, is derived by deducting the fair value of the reporting unit's assets and liabilities from the fair value of its equity, and comparing that amount with the carrying amount of goodwill. We determined fair values for each of the reporting units using a combination of the market approach and the income approach. We assessed the valuation methodologies based upon the relevance and available data and have weighted the results appropriately. Valuations using the market approach were derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses was based on the markets in which the reporting units operate giving consideration to risk profiles, size, geography, and diversity of products and services. A market approach is limited to reporting units for which there are publicly traded companies that have the characteristics similar to our businesses. Under the income approach, fair value was determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We used our internal forecasts to estimate future cash flows and included an estimate of long-term future growth rates based on our most recent views of the long-term outlook for each business. Actual results may differ from those assumed in our forecasts. We derived our discount rates using a capital asset pricing model and analyzing published rates for industries relevant to our reporting units to estimate the cost of equity financing. We used discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. Discount rates used in our reporting unit valuations ranged from 10% to 11% . Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods. In performing the annual impairment test for goodwill in the third quarter of 2015 using data as of July 1 of that year, we determined that a step two test was required for a reporting unit within our OFS operating segment. As a consequence of the continued pressure on oil prices, the revised expected cash flows for this reporting unit resulted in a goodwill impairment charge of $2,080 million . The impairment charge has been included as part of “Impairment of goodwill” in the consolidated and combined statement of income (loss). We performed our annual impairment test of goodwill as of July 1, 2017 and July 1, 2016 for all of our reporting units. Based on the results of our step one testing, the fair values of each of the reporting units exceeded their carrying values; therefore, the second step of the impairment test was not required to be performed for any of our reporting units and no goodwill impairment was recognized. In addition to our annual impairment testing, we also test goodwill for impairment between annual impairment testing dates whenever events or circumstances occur that, in our judgment, could more likely than not reduce the fair value of one or more reporting units below its carrying amount. In assessing the possibility that a reporting unit’s fair value has been reduced below its carrying amount due to the occurrence of events or circumstances between annual impairment testing dates, we consider all available evidence, including (but not limited to) (i) the results of our impairment testing at the prior annual impairment testing date (in particular, the magnitude of the excess of fair value over carrying value observed), (ii) downward revisions to internal forecasts (and the magnitude thereof), if any, and (iii) declines in our market capitalization below our book value (and the magnitude and duration of those declines), if any. Between July 1, 2017 and December 31, 2017, we have not identified any events or circumstances that could more likely than not reduce the fair value of one or more of our reporting units below its carrying amount. However, there can be no assurances that further sustained declines in macroeconomic or business conditions affecting our industry and businesses (i) will not occur and, (ii) were they to occur, that those further sustained declines will not result in additional impairments in future periods. As of December 31, 2017 , we believe that the goodwill is recoverable for all the reporting units, however, there can be no assurances that the goodwill will not be impaired in future periods. OTHER INTANGIBLE ASSETS Intangible assets are comprised of the following at December 31: 2017 2016 Gross Accumulated Net Gross Accumulated Net Technology $ 1,177 $ (440 ) $ 737 $ 596 $ (371 ) $ 225 Customer relationships 3,202 (819 ) 2,383 1,920 (660 ) 1,260 Capitalized software 1,130 (697 ) 433 896 (535 ) 361 Trade names and trademarks 757 (159 ) 598 681 (130 ) 551 Other 10 — 10 1 (1 ) — Finite-lived intangible assets 6,276 (2,115 ) 4,161 4,094 (1,697 ) 2,397 Indefinite-lived intangible assets (1) 2,197 — 2,197 52 — 52 Total intangible assets $ 8,473 $ (2,115 ) $ 6,358 $ 4,146 $ (1,697 ) $ 2,449 (1) Indefinite-lived intangible assets principally comprise trade names and trademarks acquired in business combinations. Finite-lived intangible assets increased by $1,764 million for the year ended December 31, 2017 , primarily as a result of the acquired Baker Hughes intangible assets offset by amortization during the periods (refer to "Note 2. Business Acquisition"). Indefinite-lived intangible assets increased during the year ended December 31, 2017 as a result of the acquisition of the Baker Hughes trade name which was preliminarily valued at $2,100 million using the relief-from-royalty method. Indefinite-lived intangible assets as of December 31, 2016 comprise trademarks acquired in previous years (Vetco and Bently Nevada trademarks for $42 million and $10 million , respectively). Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from one to 30 years. Amortization expense for the years ended December 31, 2017 , 2016 and 2015 was $387 million , $239 million and $179 million , respectively. We incurred additional amortization expense of $75 million during the year ended December 31, 2017 due to the acquisition of Baker Hughes. Estimated amortization expense for each of the subsequent five fiscal years is expected to be as follows: Year Estimated Amortization Expense 2018 $ 432 2019 398 2020 372 2021 326 2022 293 |
Contract Assets
Contract Assets | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Contract Assets | CONTRACT ASSETS A majority of our long-term product service agreements relate to our Turbomachinery & Process Solutions segment. Contract assets are comprised of the following at December 31: 2017 2016 Long-term product service agreements (1) $ 1,410 $ 1,046 Long-term equipment contract revenue (2) 997 703 Total revenue in excess of billings 2,407 1,749 Deferred inventory costs (3) 338 218 Contract assets $ 2,745 $ 1,967 (1) Reflects revenue earned in excess of billings on our long-term product service agreements. (2) Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment. (3) Represents cost deferral for shipped goods and other costs for which the criteria for revenue recognition has not yet been met. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS Short-term and long-term borrowings are comprised of the following at December 31: 2017 2016 Amount Weighted average rate (1) Amount Weighted average rate (1) Short-term borrowings Short-term bank borrowings $ 171 12.6 % $ 79 9.1 % Current portion of long-term borrowings 639 2.1 % 34 1.3 % Short-term borrowings from GE 1,124 121 Other short-term borrowings 103 7.6 % 5 1.3 % Total short-term borrowings 2,037 239 Long-term borrowings 3.2% Senior Notes due August 2021 (2) 526 2.5 % — — 2.773% Senior Notes due December 2022 1,244 2.9 % — — 8.55% Debentures due June 2024 (2) 135 3.9 % — — 3.337% Senior Notes due December 2027 1,342 3.4 % — — 6.875% Notes due January 2029 (2) 308 3.9 % — — 5.125% Notes due September 2040 (2) 1,311 4.1 % — — 4.080% Senior Notes due December 2047 1,337 4.1 % — — Capital leases 87 7.0 % 1 4.5 % Other long-term borrowings 22 1.9 % 37 1.2 % Total long-term borrowings 6,312 38 Total borrowings $ 8,349 $ 277 (1) Weighted average effective interest rate is based on carrying value including step-up adjustment recorded upon the acquisition of Baker Hughes. (2) Represents long-term fixed rate debt obligations assumed in connection with the acquisition of Baker Hughes, net of amounts repurchased subsequent to the closing of the Transactions. On July 3, 2017, in connection with the Transactions, we entered into a new five -year $3 billion committed unsecured revolving credit facility (the 2017 Credit Agreement) with commercial banks maturing in July 2022. The 2017 Credit Agreement contains certain customary representations and warranties, certain affirmative covenants and no negative covenants. Upon the occurrence of certain events of default, our obligations under the 2017 Credit Agreement may be accelerated. Such events of default include payment defaults to lenders under the 2017 Credit Agreement, and other customary defaults. No such events of default have occurred. During the year ended December 31, 2017 , there were no borrowings under the 2017 Credit Agreement. On November 3, 2017 we entered into a commercial paper program under which we may issue from time to time up to $3 billion in commercial paper with maturities of no more than 397 days. At December 31, 2017 we had no borrowings outstanding under the commercial paper program. The maximum combined borrowing at any time under both the 2017 Credit Agreement and the commercial paper program is $3 billion . On December 11, 2017, we completed a private placement offering $3,950 million aggregate principal amount of Senior Notes, consisting of $1,250 million aggregate principal amount of 2.773% Senior Notes due 2022, $1,350 million aggregate principal amount of 3.337% Senior Notes due 2027 and $1,350 million aggregate principal amount of 4.080% Senior Notes due 2047. These Senior Notes are presented net of issuance costs of $26 million in our consolidated and combined statement of financial position. We will pay interest on each series of Exchange Notes on June 15 and December 15 of each year, beginning on June 15, 2018. The Notes are senior unsecured obligations and rank equal in right of payment to all of our existing and future senior indebtedness; senior in right of payment to any future subordinated indebtedness; and effectively junior to our future secured indebtedness, if any, and to all existing and future indebtedness of its subsidiaries. We may redeem, at its option, all or part of the Notes at any time, at the applicable make-whole redemption prices plus accrued and unpaid interest to the date of redemption. The Senior Notes contain covenants that restrict our ability to take certain actions, including, but not limited to, the creation of certain liens securing debt, the entry into certain sale-leaseback transactions and engaging in certain merger, consolidation and asset sale transactions in excess of specified limits . We used a portion of the net proceeds from the private placement of the Senior Notes to fund the purchase of $82 million of 7.5% senior notes due 2018, $25 million of 6.0% senior notes due 2018, $6 million of 8.55% debentures due 2024 and $62 million of 6.875% notes due 2029 that were validly tendered in connection with the cash tender offers commenced by BHGE LLC on December 4, 2017. Under the cash tender offer BHGE LLC purchased a further $3 million of 6.875% notes due 2029 in January 2018. BHGE LLC also redeemed in January 2018 all remaining aggregate principal amount of the 2018 Senior Notes of $615 million that were not tendered for purchase in accordance with the relevant indentures. The above transactions resulted in total repurchase of our Senior Notes of $793 million . We intend to use the remaining net proceeds from the offering of the Senior Notes for general corporate purposes, which may include purchases of our common units from BHGE and GE in connection with the share repurchase authorization announced by BHGE on November 6, 2017. On January 2, 2018, we commenced an offering to exchange $3,950 million of all the outstanding, unregistered senior notes that were issued in a private offering on December 11, 2017, for identical, registered 2.773% Senior Notes due 2022, 3.337% Senior Notes due 2027 and 4.080% Senior Notes due 2047. The exchange offer was completed on January 31, 2018. Concurrent with the Transactions associated with the acquisition of Baker Hughes on July 3, 2017, Baker Hughes Co-Obligor, Inc. became a co-obligor, jointly and severally with us, on our registered debt securities. This co-obligor is our 100% -owned finance subsidiary that was incorporated for the sole purpose of serving as a co-obligor of debt securities and has no assets or operations other than those related to its sole purpose. Baker Hughes Co-Obligor, Inc. is also a co-obligor of the $3,950 million senior notes issued on December 11, 2017 by us in a private placement. In connection with our acquisition of Baker Hughes we assumed all the outstanding borrowings including all notes, senior notes, and debentures of Baker Hughes. A step-up adjustment of $364 million was recorded upon the acquisition of Baker Hughes to present these borrowings at fair value. The estimated fair value of total borrowings at December 31, 2017 and December 31, 2016 was $8,466 million and $303 million , respectively. For a majority of our borrowings the fair value was determined using quoted period-end market prices. Where market prices are not available, we estimate fair values based on valuation methodologies using current market interest rate data adjusted for our non-performance risk. Maturities of debt for each of the five years in the period ended December 31, 2022, and in the aggregate thereafter, are listed in the table below: 2018 2019 2020 2021 2022 Thereafter Total debt $ 2,037 $ 43 $ 13 $ 540 $ 1,255 $ 4,461 See "Note 14. Related Party Transactions" for additional information on the short-term borrowings from GE, and see "Note 12. Financial Instruments" for additional information about borrowings and associated swaps. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS GE MULTI-EMPLOYER PLANS Certain of our U.S. employees are covered under various U.S. GE employee benefit plans, including GE's retirement plans (pension, retiree health and life insurance, and savings benefit plans). In addition, certain United Kingdom (UK) employees participate in the GE UK Pension Plan. We are allocated relevant participation costs for these GE employee benefit plans as part of multi-employer plans. As such, we have not recorded any liabilities associated with our participation in these plans. Expenses associated with our participation in these plans was $132 million , $140 million and $148 million in the years ended December 31, 2017, 2016 and 2015, respectively. During 2016, two UK pension plans sponsored by us, the 1987 Vetco Gray Hughes Pension Plan and the UK Dresser Pension Scheme, were merged into the GE UK Pension Plan. We agreed to pay deficit contributions for the next 10 years. The estimated present value of these payments is approximately $15 million and is recorded in the consolidated and combined Statement of Financial Position in “All other liabilities.” Subsequent to that merger, plan participants in these respective plans participate in the GE UK Pension Plan. DEFINED BENEFIT PLANS In addition to these GE plans, certain of our employees are also covered by company sponsored pension plans. Our pension plans in 2017 included seven U.S. plans and six non-U.S. pension plans, primarily in the UK, Germany, and Canada, all with pension assets or obligations greater than $20 million . We use a December 31 measurement date for these plans. These defined benefit plans generally provide benefits to employees based on formulas recognizing length of service and earnings. 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. Funded Status The funded status position represents the difference between the benefit obligation and the plan assets. The projected benefit obligation (PBO) for pension benefits represents the actuarial present value of benefits attributed to employee services and compensation and includes an assumption about future compensation levels. The accumulated benefit obligation (ABO) is the actuarial present value of pension benefits attributed to employee service to date and present compensation levels. The ABO differs from the PBO in that the ABO does not include any assumptions about future compensation levels. Below is the reconciliation of the beginning and ending balances of benefit obligations, fair value of plan assets and the funded status of our plans. Pension Benefits Other Postretirement Benefits 2017 2016 2017 2016 Change in benefit obligation: Benefit obligation at beginning of year $ 820 $ 1,290 $ 117 $ 136 Service cost 37 18 2 2 Interest cost 51 34 6 5 Plan amendment — — (23 ) (5 ) Actuarial loss (gain) 41 39 — (14 ) Benefits paid (65 ) (39 ) (13 ) (6 ) Curtailments (45 ) — 5 (1 ) Settlements (10 ) — — — Business acquisition (1) 1,546 — 93 — Other (2) (2 ) (460 ) — — Foreign currency translation adjustments 45 (62 ) — — Benefit obligation at end of year 2,418 820 187 117 Change in plan assets: Fair value of plan assets at beginning of year 567 915 — — Actual return on plan assets 152 43 — — Employer contributions 50 50 13 6 Benefits paid (65 ) (39 ) (13 ) (6 ) Settlements (10 ) — — — Business acquisition (1) 1,342 — — — Other (2) (2 ) (358 ) — — Foreign currency translation adjustments 25 (44 ) — — Fair value of plan assets at end of year 2,059 567 — — Funded status - underfunded at end of year $ (359 ) $ (253 ) $ (187 ) $ (117 ) Accumulated benefit obligation $ 2,373 $ 803 $ 187 $ 117 (1) Relates to the acquisition of Baker Hughes on July 3, 2017. (2) Two UK pension plans merged into the GE UK pension plan in 2016. The amounts recognized in the consolidated and combined statements of financial position consist of the following at December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2017 2016 Noncurrent assets $ 46 $ — $ — $ — Current liabilities (10 ) (4 ) (24 ) (6 ) Noncurrent liabilities (395 ) (249 ) (163 ) (111 ) Net amount recognized $ (359 ) $ (253 ) $ (187 ) $ (117 ) Information for the plans with ABOs in excess of plan assets is as follows at December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2017 2016 Projected benefit obligation $ 1,692 $ 820 n/a n/a Accumulated benefit obligation $ 1,647 $ 803 $ 187 $ 117 Fair value of plan assets $ 1,286 $ 567 n/a n/a Net Periodic Cost The components of net periodic cost are as follows for the years ended December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2015 2017 2016 2015 Service cost $ 37 $ 18 $ 24 $ 2 $ 2 $ 3 Interest cost 51 34 49 6 5 6 Expected return on plan assets (81 ) (46 ) (65 ) — — — Amortization of prior service credit — — — (3 ) (2 ) (1 ) Amortization of net actuarial loss (gain) 12 14 21 (2 ) — 1 Curtailment / settlement loss (gain) (45 ) (2) (26 ) (1) 4 2 (2 ) (11 ) Net periodic cost $ (26 ) $ (6 ) $ 33 $ 5 $ 3 $ (2 ) (1) Primarily associated with two UK plans merging into the GE UK Pension Plan. (2) As a result of the acquisition of Baker Hughes, we obtained a non-contributory pension plan (the Baker Hughes Incorporated Pension Plan or BHIPP). During the fourth quarter of 2017, the Compensation Committee of the Board of Directors approved amendments to the BHIPP to close the plan to new participants and freeze accruals of future service-related benefits effective as of December 31, 2017. As a result of these actions, the Company recorded a curtailment gain of $45 million . The curtailment was recorded by the Company during the fourth quarter of 2017 and included in “Other non-operating income (loss), net” in our consolidated and combined statement of income (loss). Assumptions Used in Benefit Calculations Accounting requirements necessitate the use of assumptions to reflect the uncertainties and the length of time over which the pension obligations will be paid. The actual amount of future benefit payments will depend upon when participants retire, the amount of their benefit at retirement and how long they live. To reflect the obligation in today’s dollars, we discount the future payments using a rate that matches the time frame over which the payments will be made. We also need to assume a long-term rate of return that will be earned on investments used to fund these payments. Weighted average assumptions used to determine benefit obligations for these plans are as follows for the years ended December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2017 2016 Discount rate 2.99 % 3.41 % 3.32 % 4.00 % Rate of compensation increase 3.82 % 4.09 % n/a n/a Weighted average assumptions used to determine net periodic cost for these plans are as follows for the years ended December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2015 2017 2016 2015 Discount rate 3.24 % 3.83 % 3.69 % 3.72 % 4.25 % 4.00 % Expected long-term return on plan assets 6.26 % 6.86 % 6.91 % n/a n/a n/a We determine the discount rate using a bond matching model, whereby the weighted average yields on high-quality fixed-income securities have maturities consistent with the timing of benefit payments. Lower discount rates increase the size of the benefit obligations and pension expense in the following year; higher discount rates reduce the size of the benefit obligation and subsequent-year pension expense. The expected return on plan assets is the estimated long-term rate of return that will be earned on the investments used to fund the pension obligations. To determine this rate, we consider the current and target composition of plan investments, our historical returns earned, and our expectations about the future. The compensation assumption is used to estimate the annual rate at which pay of plan participants will grow. If the rate of growth assumed increases, the size of the pension obligations will increase, as will the amount recorded in equity attributable to parent and amortized to income in subsequent periods. Assumed health care cost trend rates can have a significant effect on the amounts reported for Other Postretirement Benefits. As of December 31, 2017 , the health care cost trend rate was 6.81% , declining gradually each successive year until it reaches 4.81% . A one percentage point change in assumed health care cost trend rates would have had the following effects on 2017 : One Percentage Point Increase One Percentage Point Decrease Effect on total of service and interest cost components (in thousands) $ 854 $ (685 ) Effect on postretirement welfare benefit obligation (in thousands) $ 15,460 $ (12,817 ) Accumulated Other Comprehensive Loss The amount recorded before-tax in accumulated other comprehensive loss related to employee benefit plans consists of the following at December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2017 2016 Net actuarial loss (gain) $ 117 $ 14 $ (16 ) $ (14 ) Net prior service credit — — (25 ) (3 ) Total $ 117 $ 14 $ (41 ) $ (17 ) The estimated net actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss and included in net periodic benefit cost in 2018 is $9 million . The estimated net actuarial gain and prior service credit for the other postretirement benefits that will be amortized from accumulated other comprehensive loss and included in net periodic benefit cost in 2018 is $2 million and $5 million , respectively. Plan Assets We have investment committees that meet regularly to review the portfolio returns and to determine asset-mix targets based on asset/liability studies. Third-party investment consultants assist such committees in developing asset allocation strategies to determine our expected rates of return and expected risk for various investment portfolios. The investment committees considered these strategies in the formal establishment of the current asset-mix targets based on the projected risk and return levels for all major asset classes. The table below presents the fair value of the pension assets by asset category at December 31 : 2017 2016 Equity securities U.S. equity securities (1) $ 207 $ 122 Global equity securities (1) 551 149 Debt securities Fixed income and cash investment funds 658 49 U.S. corporate 70 53 Other debt securities 55 99 Private equities 107 45 Real estate 44 32 Other investments (2) 367 18 Total plan assets $ 2,059 $ 567 (1) Include direct investments and investment funds. (2) Substantially all represented hedge fund and asset allocation fund investments. Plan assets valued using Net Asset Value (NAV) as a practical expedient amounted to $1,684 million and $228 million as of December 31, 2017 and 2016 , respectively. The percentages of plan assets valued using NAV by investment fund type for equity securities, fixed income and cash, and alternative investments were 30% , 28% , and 24% as of December 31, 2017 , respectively, and 20% , 7% , and 13% as of December 31, 2016 , respectively. Those investments that were measured at fair value using NAV as practical expedient were excluded from the fair value hierarchy. The practical expedient was not applied for investments with a fair value of $86 million and $25 million in 2017 and 2016, respectively, and those investments were classified within Level 3. The remaining investments were considered Level 1 and 2. Funding Policy The funding policy for our Pension Benefits is to contribute amounts sufficient to meet minimum funding requirements as set forth in employee benefit and tax laws plus such additional amounts as we may determine to be appropriate. In 2017, we contributed approximately $50 million . We expect to contribute approximately $44 million to our pension plans in 2018. We fund our Other Postretirement Benefits on a pay-as-you-go basis. In 2017, we contributed $13 million to these plans. In 2018, we expect to contribute approximately $24 million to fund such benefits. The following table presents the expected benefit payments over the next 10 years. The U.S. and non-U.S. pension benefit payments are made by the respective pension trust funds. Year Pension Benefits Other Postretirement Benefits 2018 $ 105 $ 24 2019 109 22 2020 107 17 2021 111 12 2022 112 10 2023-2027 593 47 Other As part of the Baker Hughes acquisition, we obtained two non-qualified defined contribution plans that are invested through trusts. The assets and corresponding liabilities were $278 million at December 31, 2017 and are included in our consolidated and combined statement of financial position. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES We are treated as a partnership for U.S. federal income tax purposes. As such, except for certain U.S. corporations owned by the Company, we are not subject to U.S. federal income tax under current U.S. tax laws. Our members will each be required to take into account for U.S. federal income tax purposes their distributive share of our items of income, gain, loss and deduction, which generally will include the U.S. operations of both Baker Hughes and GE O&G. BHGE and GE will each be taxed on their distributive share of income and gain, whether or not a corresponding amount of cash or other property is distributed to them. For assets held indirectly by us through subsidiaries, including both foreign and U.S., the taxes attributable to those subsidiaries will be reflected in our consolidated and combined financial statements. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (U.S. tax reform) that lowers the statutory tax rate on U.S. earnings, taxes historic foreign earnings previously deferred from U.S. taxation at a reduced rate of tax (transition tax), establishes a territorial tax system and enacts new taxes associated with global operations. The transition tax associated with our non-U.S. operations will be borne by our members. The impact of U.S. tax reform has been recorded on a provisional basis as the legislation provides for additional guidance to be issued by the U.S. Department of the Treasury on several provisions including the computation of the transition tax. Guidance in 2018 could impact the information required for and the calculation of the transition tax charge and could affect decisions that affect the tax on various U.S. and foreign items which would further impact the final amounts included in the transition tax charge and impact the revaluation of deferred taxes. In addition, analysis performed and conclusions reached as part of the tax return filing process and additional guidance on accounting for tax reform could affect the provisional amount. As part of purchase accounting for the Baker Hughes acquisition, we have made preliminary estimates of the fair value of assets acquired and liabilities assumed. Accordingly, changes to these estimates resulting from the finalization of the fair values may also require us to adjust the provisional impact of U.S. tax reform. Additionally, as part of U.S. tax reform, the U.S. has enacted a tax on "base eroding" payments from the U.S. and a minimum tax on foreign earnings (global intangible low-taxed income) that would be borne by our members. Because aspects of the new law and the effect on our operations is uncertain and because aspects of the accounting rules associated with this provision have not been resolved, our members have not made a provisional accrual for the deferred tax aspects of this provision and consequently have not made an accounting policy election on the deferred tax treatment of this tax. As a result of enactment of U.S. tax reform, we have recorded a net tax benefit of $32 million in 2017 to reflect our provisional estimate of the revaluation of deferred taxes related to our U.S. subsidiaries that file separate returns. The provision or benefit for income taxes is comprised of the following for the years ended December 31: 2017 2016 2015 Current: U.S. $ (33 ) $ (114 ) $ 158 Foreign 408 325 411 Total current 375 211 569 Deferred: U.S. (156 ) 13 (21 ) Foreign (47 ) 26 (75 ) Total deferred (203 ) 39 (96 ) Provision for income taxes $ 172 $ 250 $ 473 The geographic sources of Income (loss) before income taxes, inclusive of equity in loss of affiliate are as follows for the years ended December 31: 2017 2016 2015 U.S. $ (1,153 ) $ (440 ) $ (2,006 ) Foreign 982 1,024 1,848 Income (loss) before income taxes, inclusive of equity in loss of affiliate $ (171 ) $ 584 $ (158 ) The benefit or provision for income taxes differs from the amount computed by applying the U.S. statutory income tax rate to the loss or income before income taxes for the reasons set forth below for the years ended December 31: 2017 2016 2015 Income (loss) before income taxes, inclusive of equity in loss of affiliate $ (171 ) $ 584 $ (158 ) Taxes at the U.S. federal statutory income tax rate (60 ) 205 (55 ) Effect of foreign operations (50 ) (5 ) (137 ) Tax impact of partnership structure 267 — — Tax impact of dispositions — 1 (26 ) Nondeductible goodwill — — 713 Change in valuation allowances 69 28 9 Tax Cuts and Jobs Act enactment (32 ) — — Other - net (22 ) 21 (31 ) Provision for income taxes $ 172 $ 250 $ 473 Actual income tax rate (100.6 )% 42.8 % (299.4 )% Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss and tax credit carryforwards. The tax effects of our temporary differences and carryforwards are as follows at December 31: 2017 2016 Deferred tax assets: Receivables $ 98 $ — Inventory 41 71 Property 143 — Employee benefits 64 154 Other accrued expenses 91 121 Operating loss carryforwards 1,376 142 Tax credit carryforwards 147 5 Other 230 — Total deferred income tax asset 2,190 493 Valuation allowances (1,822 ) (87 ) Total deferred income tax asset after valuation allowance 368 406 Deferred tax liabilities: Goodwill and other intangibles (202 ) (845 ) Property — (62 ) Undistributed earnings of foreign subsidiaries — (46 ) Other (51 ) (9 ) Total deferred income tax liability (253 ) (962 ) Net deferred tax asset (liability) $ 115 $ (556 ) At December 31, 2017 , we had approximately $129 million of foreign tax credits which may be carried forward indefinitely under applicable foreign law, and $18 million of other credits, the majority of which will expire after tax year 2027 under U.S. tax law. The increase in tax credit carryforwards of approximately $142 million is primarily related to the business acquisition referred to in Note 2. Additionally, we had $1,376 million of net operating loss carryforwards, of which approximately $319 million will expire within five years, $293 million will expire between six and 20 years, and the remainder can be carried forward indefinitely. We record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the future and in the appropriate taxing jurisdictions. At December 31, 2017 , $1,822 million of valuation allowances are recorded against various deferred tax assets, including foreign net operating losses (NOL) of $1,125 million , U.S. federal and foreign tax credit carryforwards of $129 million , other U.S. NOL's and tax credit carryforwards of $44 million , and certain other U.S. and foreign deferred tax assets of $524 million . The increase of $1,736 million in valuation allowances are primarily related to the business acquisition. There are $192 million of deferred tax assets related to foreign net operating loss carryforwards without a valuation allowance as we expect that the deferred tax assets will be realized within the carryforward period. Substantially all of our undistributed earnings of our foreign subsidiaries are indefinitely reinvested. Due to the enactment of U.S. tax reform, repatriations of foreign earnings will generally be free of U.S. federal tax but may incur other taxes such as withholding or state taxes. Indefinite reinvestment is determined by management’s intentions concerning the future operations of the Company. Most of these earnings have been reinvested in active non-U.S. business operations. However, as a result of U.S. tax reform, substantially all of our prior unrepatriated foreign earnings were subject to U.S. tax and accordingly we expect to have the ability to repatriate those earnings without incremental U.S. federal tax cost. We expect that any foreign withholding taxes on such a repatriation would generate a U.S. foreign tax credit. We will update our analysis of investment of foreign earnings in 2018 as we consider the impact of U.S. tax reform. As of December 31, 2017, the cumulative amount of indefinitely reinvested foreign earnings is approximately $8.0 billion . Computation of the potential deferred tax liability associated with these undistributed earnings and any other basis differences is not practicable. At December 31, 2017, we had $395 million of tax liabilities for total gross unrecognized tax benefits related to uncertain tax positions. In addition to these uncertain tax positions, we had $95 million and $53 million related to interest and penalties, respectively, for total liabilities of $543 million for uncertain positions. If we were to prevail on all uncertain positions, the net effect would result in an income tax benefit of approximately $522 million . The remaining $21 million is offset by deferred tax assets that represent tax benefits that would be received in different taxing jurisdictions in the event that we did not prevail on all uncertain tax positions. We have not provided for any unrecognized tax benefits related to U.S. tax reform in our provisional estimate. The analysis performed and conclusions reached as part of the tax return filing process and additional guidance on accounting for U.S. tax reform could affect the provisional estimate. The following table presents the changes in our gross unrecognized tax benefits included in the consolidated and combined statements of financial position. Asset / (Liability) 2017 2016 Balance at January 1 $ (94 ) $ (100 ) Balance acquired from Baker Hughes (326 ) — Additions for tax positions of the current year (13 ) (4 ) Additions for tax positions of prior years (19 ) — Reductions for tax positions of prior years 32 5 Settlements with tax authorities 14 — Lapse of statute of limitations 11 5 Balance at December 31 $ (395 ) $ (94 ) It is expected that the amount of unrecognized tax benefits will change in the next twelve months due to expiring statutes, audit activity, tax payments, and competent authority proceedings related to transfer pricing or final decisions in matters that are the subject of litigation in various taxing jurisdictions in which we operate. At December 31, 2017, we had approximately $105 million of tax liabilities, net of $2 million of tax assets, related to uncertain tax positions, each of which are individually insignificant, and each of which are reasonably possible of being settled within the next twelve months. At December 31, 2017, approximately $288 million of tax liabilities for total gross unrecognized tax benefits were included in the noncurrent portion of our income tax liabilities, for which the settlement period cannot be determined, however, it is not expected to be within the next twelve months. We conduct business in more than 120 countries and are subject to income taxes in most taxing jurisdictions in which we operate. We believe there are no jurisdictions in which the outcome of unresolved issues or claims is likely to be material to our results of operations, financial position or cash flows. We further believe that we have made adequate provision for all income tax uncertainties. |
Members' Equity
Members' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Members' Equity | MEMEBERS' EQUITY COMMON UNITS The BHGE LLC Agreement provides that initially there is one class of common units, which are currently held by BHGE, indirectly through EHHC and CFC Holdings, LLC (CFC Holdings), and by GE and certain indirectly wholly-owned subsidiaries of GE. If BHGE issues a share of Class A common stock, including in connection with an equity incentive or similar plan, BHGE LLC will also issue a corresponding common unit to BHGE or one of its direct subsidiaries. For the year ended December 31, 2017, we issued 546 thousand common units to BHGE in connection with the issuance of Class A common stock by BHGE. As of December 31, 2017, GE owns approximately 62.5% of our common units and BHGE owns approximately 37.5% of the common units. The following table presents the changes in number of common units outstanding (in thousands): Common Units Held by BHGE Common Units Held by GE Balance at December 31, 2016 — — Issue of units on business combination at July 3, 2017 427,709 717,111 Issue of units to BHGE under equity incentive plan 546 — Repurchase of common units (1) (6,047 ) (10,126 ) Balance at December 31, 2017 422,208 706,985 (1) On November 6, 2017, BHGE announced that its board of directors authorized us to repurchase up to $3 billion of our common units from BHGE and GE. During the three months ended December 31, 2017, we repurchased 16,173,202 units for total consideration of $501 million . ACCUMULATED OTHER COMPREHENSIVE LOSS (AOCL) The following table presents the changes in accumulated other comprehensive loss, net of tax: Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss Balance at December 31, 2015 $ — $ (1,384 ) $ (2 ) $ (146 ) $ (1,532 ) Other comprehensive loss before reclassifications — (423 ) (38 ) (12 ) (473 ) Amounts reclassified from accumulated other comprehensive loss — 1 37 88 126 Deferred taxes — (7 ) (22 ) (29 ) Other comprehensive income (loss) — (422 ) (8 ) 54 (376 ) Less: Other comprehensive income (loss) attributable to noncontrolling interests — (5 ) — (9 ) (14 ) Balance at December 31, 2016 — (1,801 ) (10 ) (83 ) (1,894 ) Other comprehensive income before reclassifications 41 7 8 45 101 Amounts reclassified from accumulated other comprehensive loss (39 ) — 7 1 (31 ) Deferred taxes 2 (10 ) (3 ) 9 (2 ) Other comprehensive income (loss) 4 (3 ) 12 55 68 Less: Other comprehensive income attributable to noncontrolling interests 1 — — 2 3 Less: Other adjustments — — — 13 13 Less: Activity related to noncontrolling interest — 15 — 17 $ 32 Balance at December 31, 2017 $ 3 $ (1,819 ) $ 2 $ (60 ) $ (1,874 ) The amounts reclassified from accumulated other comprehensive loss during the years ended December 31, 2017 and 2016 represent (i) realized gains (losses) on investment securities recorded in other non operating income (loss) (ii) gains (losses) reclassified on cash flow hedges when the hedged transaction occurs and (iii) the amortization of net actuarial loss and prior service credit, and curtailments which are included in the computation of net periodic pension cost (see "Note 9. Employee Benefit Plans" for additional details). Net periodic pension cost is recorded across the various cost and expense line items within the consolidated and combined statement of income (loss). |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | FINANCIAL INSTRUMENTS RECURRING FAIR VALUE MEASUREMENTS Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities. 2017 2016 Level 1 Level 2 Level 3 Net Balance Level 1 Level 2 Level 3 Net Balance Assets Derivatives $ — $ 150 $ — $ 150 $ — $ 318 $ — $ 318 Investment securities 81 8 304 393 — — — — Total assets 81 158 304 543 — 318 — 318 Liabilities Derivatives — (95 ) — (95 ) — (375 ) — (375 ) Total liabilities $ — $ (95 ) $ — $ (95 ) $ — $ (375 ) $ — $ (375 ) There were no transfers between Level 1, 2 and 3 during 2017 . The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities: Balance at December 31, 2016 $ — Additions as a result of business combination 179 Purchases 186 Proceeds at maturity (62 ) Unrealized gains recognized in accumulated other comprehensive income (loss) 1 Balance at December 31, 2017 $ 304 The most significant unobservable input used in the valuation of our Level 3 instruments is the discount rate. Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value of our investment securities. There are no unrealized gains or losses recognized in the consolidated and combined statement of income (loss) on account of any Level 3 instrument still held at the reporting date. We hold $127 million of these investment securities on behalf of GE. 2017 2016 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Investment securities Non-U.S. debt securities $ 310 $ 2 $ — $ 312 $ — $ — $ — $ — Equity securities 81 — — 81 1 — — 1 Total $ 391 $ 2 $ — $ 393 $ 1 $ — $ — $ 1 All of our investment securities are classified as available for sale instruments. Non-U.S. debt securities mature in three years. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS Our financial instruments include cash and equivalents, current receivables, investments, accounts payable, short and long-term debt, and derivative financial instruments. Except for long-term debt, the estimated fair value of these financial instruments at December 31, 2017 and December 31, 2016 approximates their carrying value as reflected in our consolidated and combined financial statements. For further information on the fair value of our debt, see "Note 8. Borrowings." DERIVATIVES AND HEDGING We use derivatives to manage our risks and do not use derivatives for speculation. The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives. 2017 2016 Assets (Liabilities) Assets (Liabilities) Derivatives accounted for as hedges Currency exchange contracts $ 6 $ — $ 2 $ (9 ) Derivatives not accounted for as hedges Currency exchange contracts 144 (95 ) 316 (366 ) Total derivatives $ 150 $ (95 ) $ 318 $ (375 ) Derivatives are classified in the captions "All other current assets," "All other assets," "All other current liabilities," and "All other liabilities" depending on their respective maturity date. RISK MANAGEMENT STRATEGY We buy, manufacture and sell components and products as well as provide services across global markets. These activities expose us to changes in foreign currency exchange rates and commodity prices, which can adversely affect revenue earned and costs of operating our business. When the currency in which we sell equipment differs from the primary currency (known as its functional currency) and the exchange rate fluctuates, it will affect the revenue we earn on the sale. These sales and purchase transactions also create receivables and payables denominated in foreign currencies, along with other monetary assets and liabilities, which expose us to foreign currency gains and losses based on changes in exchange rates. Changes in the price of a raw material that we use in manufacturing can affect the cost of manufacturing. We use derivatives to mitigate or eliminate these exposures. FORMS OF HEDGING Cash flow hedges We use cash flow hedging primarily to reduce or eliminate the effects of foreign exchange rate changes on purchase and sale contracts. Accordingly, the vast majority of our derivative activity in this category consists of currency exchange contracts. We also use commodity derivatives to reduce or eliminate price risk on raw materials purchased for use in manufacturing. Under hedge accounting, the derivative carrying amount is measured at fair value each period and any resulting gain or loss is recorded in a separate component of equity. Differences between the derivative and the hedged item may cause changes in their fair values to not offset completely, which is referred to as ineffectiveness. When the hedged transaction occurs, these amounts are released from equity, in order that the transaction will be reflected in earnings at the rate locked in by the derivative. The effect of the hedge is reported in the same financial statement line item as the earnings effects of the hedged transaction. The following table explains the effect of changes in market rates on the fair value of derivatives we use most commonly in cash flow hedging arrangements. Currency forwards/swaps U.S. dollar strengthens U.S. dollar weakens Pay U.S. dollars/receive foreign currency Fair value decreases Fair value increases Economic Hedges These derivatives are not designated as hedges from an accounting standpoint (and therefore we do not apply hedge accounting to the relationship) but otherwise serve the same economic purpose as other hedging arrangements. Some economic hedges are used when changes in the carrying amount of the hedged item are already recorded in earnings in the same period as the derivative, making hedge accounting unnecessary. For some other types of economic hedges, changes in the fair value of the derivative are recorded in earnings currently but changes in the value of the forecasted foreign currency cash flows are only recognized in earnings when they occur. As a result, even though the derivative is an effective economic hedge, there is a net effect on earnings in each period due to differences in the timing of earnings recognition between the derivative and the hedged item. These derivatives are marked to fair value through earnings each period. The effects are reported in "Selling, general and administrative expenses" in the consolidated and combined statement of income (loss). In general, the income (loss) effects of the hedged item are recorded in the same consolidated and combined financial statement line as the derivative. The income (loss) effect of economic hedges, after considering offsets related to income (loss) effects of hedged assets and liabilities, is substantially offset by changes in the fair value of forecasted transactions that have not yet affected income (loss). The table below explains the effects of market rate changes on the fair value of derivatives we use most commonly as economic hedges. Currency forwards/swaps U.S. dollar strengthens U.S. dollar weakens Pay U.S. dollars/receive foreign currency Fair value decreases Fair value increases Receive U.S. dollars/pay foreign currency Fair value increases Fair value decreases Commodity derivatives Price increases Price decreases Receive commodity/ pay fixed price Fair value increases Fair value decreases NOTIONAL AMOUNT OF DERIVATIVES The notional amount of a derivative is the number of units of the underlying (for example, the notional principal amount of the debt in an interest rate swap). A substantial majority of the outstanding notional amount of $10.2 billion and $7.1 billion at December 31, 2017 and December 31, 2016 , respectively, is related to hedges of anticipated sales and purchases in foreign currency, commodity purchases, and contractual terms in contracts that are considered embedded derivatives and for intercompany borrowings in foreign currencies. We generally disclose derivative notional amounts on a gross basis to indicate the total counterparty risk. Where we have gross purchase and sale derivative contracts for a particular currency, we look to execute these contracts with the same counterparty to reduce our exposure. The corresponding net notional amounts were $3.3 billion at December 31, 2017 and $0.6 billion at December 31, 2016 . The table below provides additional information about how derivatives are reflected in our consolidated and combined financial statements. Carrying amount related to derivatives 2017 2016 Derivative assets $ 150 $ 318 Derivative liabilities (95 ) (375 ) Net derivatives $ 55 $ (57 ) EFFECTS OF DERIVATIVES ON EARNINGS All derivatives are marked to fair value on our consolidated and combined statement of financial position, whether they are designated in a hedging relationship for accounting purposes or are used as economic hedges. As discussed in the previous sections, each type of hedge affects the financial statements differently. In some economic hedges, both the hedged item and the hedging derivative offset in earnings in the same period. In other economic hedges, the hedged item and the hedging derivative offset in earnings in different periods. In cash flow, the effective portion of the hedging derivative is offset in separate components of equity and ineffectiveness is recognized in earnings. The table below summarizes these offsets and the net effect on pre-tax earnings. 2017 2016 Cash flow hedges Economic hedges Cash flow hedges Economic hedges Effect on hedging instrument $ 8 $ 121 $ 38 $ (272 ) Effect on underlying (8 ) (152 ) (38 ) 102 Effect on earnings (1) — (31 ) — (170 ) (1) For cash flow hedges, the effect on earnings, if any, is primarily related to ineffectiveness. For economic hedges on forecasted transactions, effect on earnings is substantially offset by future earnings on economically hedged items. Changes in the fair value of cash flow hedges are recorded in a separate component of equity (referred to below as Accumulated Other Comprehensive Income, or AOCI) and are recorded in earnings in the period in which the hedged transaction occurs. The table below summarizes this activity by hedging instrument. Gain (loss) recognized in AOCI Gain (loss) reclassified from AOCI to earnings 2017 2016 2017 2016 Currency exchange contracts $ 8 $ (38 ) $ (7 ) $ (37 ) We expect to transfer an insignificant amount to earnings as an expense in the next 12 months contemporaneously with the earnings effects of the related forecast transactions. At December 31, 2017 and 2016 , the maximum term of derivative instruments that hedge forecast transactions was three -years and two -years, respectively. See "Note 11. Members' Equity" for additional information about reclassification out of accumulated other comprehensive income. For cash flow hedges, the amount of ineffectiveness in the hedging relationship and amount of the changes in fair value of the derivatives that are not included in the measurement of ineffectiveness were insignificant for each reporting period. COUNTERPARTY CREDIT RISK Fair values of our derivatives can change significantly from period to period based on, among other factors, market movements and changes in our positions. We manage counterparty credit risk (the risk that counterparties will default and not make payments to us according to the terms of our agreements) on an individual counterparty basis. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Our operating segments are organized based on the nature of markets and customers. Following the Transactions, we revised our segment structure and began to manage and report our operating results through four operating segments as defined below. We have reflected this revised structure for all historical periods presented. OILFIELD SERVICES Oilfield Services provides products and services for onshore and offshore operations across the lifecycle of a well, ranging from drilling, evaluation, completion, production and intervention. Products and services include diamond and tri-cone drill bits, drilling services, including directional drilling technology, measurement while drilling & logging while drilling, downhole completion tools and systems, wellbore intervention tools and services, wireline services, drilling and completions fluids, oilfield and industrial chemicals, pressure pumping, and artificial lift technologies, including electrical submersible pumps. OILFIELD EQUIPMENT Oilfield Equipment provides a broad portfolio of products and services required to facilitate the safe and reliable flow of hydrocarbons from the subsea wellhead to the surface. Products and services include pressure control equipment and services, subsea production systems and services, drilling equipment, and flexible pipeline systems. Oilfield Equipment designs and manufactures onshore and offshore drilling and production systems and equipment for floating production platforms and provides a full range of services related to onshore and offshore drilling activities. TURBOMACHINERY & PROCESS SOLUTIONS Turbomachinery & Process Solutions provides equipment and related services for mechanical-drive, compression and power-generation applications across the oil and gas industry as well as products and services to serve the downstream segments of the industry including refining, petrochemical, distributed gas, flow and process control and other industrial applications. The Turbomachinery & Process Solutions portfolio includes drivers (aero-derivative gas turbines, heavy-duty gas turbines and synchronous and induction electric motors), compressors (centrifugal and axial, direct drive high speed, integrated, subsea compressors, turbo expanders and reciprocating), turn-key solutions (industrial modules and waste heat recovery), pumps, valves, and compressed natural gas (CNG) and small-scale liquefied natural gas (LNG) solutions used primarily for shale oil and gas field development. DIGITAL SOLUTIONS Digital Solutions provides equipment and services for a wide range of industries, including oil & gas, power generation, aerospace, metals, and transportation. The offerings include sensor-based measurement, non-destructive testing and inspection, turbine, generator and plant controls and condition monitoring, as well as pipeline integrity solutions. SEGMENT RESULTS Summarized financial information is shown in the following tables. Consistent accounting policies have been applied by all segments within the Company, for all reporting periods. The current year results, and balances, may not be comparable to prior years as the current year includes the results of Baker Hughes from July 3, 2017. Segment revenue 2017 2016 2015 Oilfield Services $ 5,851 $ 799 $ 1,411 Oilfield Equipment 2,637 3,547 5,060 Turbomachinery & Process Solutions 6,463 6,837 7,985 Digital Solutions 2,309 2,086 2,232 Total $ 17,259 $ 13,269 $ 16,688 The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and equity in loss of affiliate and before the following: net interest expense, net other non operating income (loss), corporate expenses, restructuring, impairment and other charges, inventory impairments, merger and related costs, goodwill impairments and certain gains and losses not allocated to the operating segments. Segment income (loss) before income taxes 2017 2016 2015 Oilfield Services $ 71 $ (204 ) $ (79 ) Oilfield Equipment 38 320 677 Turbomachinery & Process Solutions 853 1,255 1,684 Digital Solutions 333 355 409 Total segment 1,295 1,726 2,691 Corporate (373 ) (380 ) (260 ) Inventory impairment and related charges (1) (244 ) (138 ) (51 ) Restructuring, impairment and other (412 ) (516 ) (411 ) Goodwill impairment — — (2,080 ) Merger and related costs (373 ) (33 ) (27 ) Other non operating income (loss), net 78 27 100 Interest expense, net (131 ) (102 ) (120 ) Total $ (160 ) $ 584 $ (158 ) (1) Inventory impairments and related charges are reported in the "Cost of goods sold" caption of the consolidated and combined statements of income (loss). 2017 includes $87 million of adjustments to write-up the acquired inventory to its estimated fair value on acquisition of Baker Hughes as this inventory was used or sold in the six months ended December 31, 2017. The following table presents total assets by segment at December 31: Segments assets 2017 2016 Oilfield Services (1) $ 32,488 $ 4,046 Oilfield Equipment 7,682 8,744 Turbomachinery & Process Solutions 9,712 8,565 Digital Solutions 3,831 3,113 Total segment 53,713 24,468 Corporate and eliminations (2) 3,173 (2,747 ) Total $ 56,886 $ 21,721 (1) Goodwill acquired as a result of the Baker Hughes acquisition has been preliminarily allocated to Oilfield Services. See "Note 6. Goodwill and Other Intangible Assets" for further details. (2) Corporate and eliminations in total segment assets includes adjustments of intercompany investments and receivables that are reflected within the total assets of the four reportable segments. The following table presents depreciation and amortization by segment for the years ended December 31: Segment depreciation and amortization 2017 2016 2015 Oilfield Services $ 613 $ 132 $ 164 Oilfield Equipment 187 154 178 Turbomachinery & Process Solutions 174 186 138 Digital Solutions 119 78 50 Total Segment 1,093 550 530 Corporate 10 — — Total $ 1,103 $ 550 $ 530 The following tables present consolidated revenue based on the location to where the product is shipped or the services are performed for the years ended December 31, and net property, plant and equipment by its geographic location at December 31. Revenue 2017 2016 2015 U.S. $ 4,350 $ 3,164 $ 4,334 Non-U.S. 12,909 10,105 12,354 Total $ 17,259 $ 13,269 $ 16,688 Property, plant and equipment - net 2017 2016 2015 U.S. $ 4,054 $ 833 $ 954 Non-U.S. 2,905 1,492 1,600 Total $ 6,959 $ 2,325 $ 2,554 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Our most significant related party transactions are transactions that we have entered into with our members and their affiliates. GE and its affiliates have provided and continue to provide a variety of services to us. We also enter into certain transactions with BHGE as provided in the BHGE LLC Agreement. In connection with the Transactions on July 3, 2017 , we entered into various agreements with GE and its affiliates that govern our relationship with GE following the Transactions including an Intercompany Services Agreement pursuant to which GE and its affiliates and the Company will provide certain services to each other. GE will provide certain administrative services, GE proprietary technology and use of certain GE trademarks in consideration for a payment of $55 million per year. GE may also provide us with certain additional administrative services under the Intercompany Services Agreement, not included as consideration for the $55 million per year payment, and the fees for such services are based on actual usage of such services and historical GE intercompany pricing. In addition, we will provide GE and its affiliates with confidential access to certain of our proprietary technology and related developments and enhancements thereto related to GE's operations, products or service offerings. We recognized a cost of $28 million for the year ended December 31, 2017 for services provided by GE and its affiliates subsequent to the close of the Transactions. Prior to the Transactions, GE and its affiliates provided a variety of services and funding to us. The cost of these services was either (a) recognized through our allocated portion of GE's corporate overhead; or (b) billed directly to us. Costs of $103 million , $210 million and $180 million for the year ended December 31, 2017 , 2016 and 2015 , respectively, were recorded in our consolidated and combined statement of income (loss) in respect of services provided by GE and its affiliates prior to the close of the Transactions. We sold $639 million , $374 million and $329 million of products and services to various GE and its affiliates during the year ended December 31, 2017 , 2016 and 2015 , respectively. Purchases from GE and its affiliates were $1,512 million , $978 million and $1,225 million during the year ended December 31, 2017 , 2016 and 2015 , respectively. EMPLOYEE BENEFITS Certain of our employees are covered under various GE sponsored employee benefit plans, including GE's retirement plans (pension, retiree health and life insurance, and savings benefit plans) and active health and life insurance benefit plans. Further details are provided in "Note 9. Employee Benefit Plans." RELATED PARTY BALANCES In connection with the Transactions, as of July 3, 2017 , we were required to repay any cash in excess of $100 million , net of any third-party debt in GE O&G, to GE. Due to the restricted nature of the majority of this excess cash, we continue to hold this cash on behalf of GE until such cash is unrestricted and available for repayment to GE. The restriction arises as the majority of the cash cannot be released, transferred or otherwise converted into a non-restricted market currency due to the lack of market liquidity, capital controls or similar monetary or exchange limitations by a Government entity of the jurisdiction in which such cash is situated. Accordingly, on July 3, 2017 , we executed a promissory note with GE. There is no maturity date on the promissory note, but we remain obligated to repay GE such excess cash together with any income or loss we may incur on it, therefore, this obligation is reflected as short-term borrowings. As of December 31, 2017 , of the amount due to GE of $1,124 million , $997 million was held in the form of cash and $127 million was held in the form of investment securities. A corresponding liability is reported in short-term borrowings in the consolidated and combined statements of financial position. RECEIVABLES MONETIZATION We monetized a portion of our current receivables through programs established for GE and various GE subsidiaries. During the three months ended December 31, 2017 , we ceased to participate in the GE receivables monetization program. Under the receivable monetization program, we factored U.S. and non-U.S. receivables to GE Capital on a recourse and nonrecourse basis pursuant to various factoring and services agreements, purchased directly by Working Capital Solutions (WCS), an operating unit of GE Capital or sold to external investors through WCS agent arranger or buy/sell structures. Under the factoring programs, GE Capital performed a risk analysis and allocated a nonrecourse credit limit for each customer. If the portfolio exceeded this credit limit, then the receivable was factored with recourse. The evaluation of whether recourse transactions qualify for accounting derecognition is based, in part, upon the legal jurisdiction of the sales, as such, the majority of recourse transactions outside the U.S. qualify for sale treatment. The Company has $116 million and $198 million at December 31, 2017 and December 31, 2016 , respectively, of accounts payable to GE that relate to cash collected on current receivables under this monetization program. In addition, prior to the Transactions, we participated in the GE Accounts Receivable (GEAR) program, in which we transferred our receivables into a securitization structure administered by GE Capital through the GE Receivables and Sale Contribution Agreement. The outstanding balances of receivables that were transferred to GE under WCS administered programs and are accounted for as sales were $225 million and $2,168 million as of December 31, 2017 and 2016 , respectively. Under the programs, we retain the responsibility for servicing the receivables and remitting collections to the owner and the lenders for a fee equal to the prevailing market rate for such services. We have outsourced our servicing responsibilities to GE Capital for a market-based fee and accordingly, no servicing asset or liability has been recorded on the consolidated and combined statements of financial position as of December 31, 2017 and December 31, 2016. Under the programs, we incurred interest expense and finance charges of $59 million , $91 million and $93 million for the years ended December 31, 2017 , 2016 and 2015 , respectively, which is reflected in the consolidated and combined statements of income (loss). TRADE PAYABLES ACCELERATED PAYMENT PROGRAM Our North American operations participate in accounts payable programs with GE Capital. Invoices are settled with vendors per our payment terms to obtain cash discounts. GE Capital provides funding for invoices eligible for a cash discount. Our liability associated with the funded participation in the accounts payable programs, which is presented as accounts payable within the consolidated and combined statements of financial position, was $293 million and $104 million as of December 31, 2017 and December 31, 2016 , respectively. PARENT'S NET INVESTMENT At December 31, 2016 , the remainder of GE's total investment, in excess of our debt from GE, is reflected as equity under the caption "Parent's net investment" in our consolidated and combined statements of financial position. At December 31, 2017 , GE's equity ownership is reflected in noncontrolling interest in our consolidated and combined statements of financial position. OTHER The Company has $575 million and $228 million of accounts payable at December 31, 2017 and 2016 , respectively, for services provided by GE in the ordinary course of business. The Company has $801 million and $392 million of current receivables at December 31, 2017 and 2016 , respectively, for services provided to GE in the ordinary course of business. Additionally, the Company has $113 million of current receivables at December 31, 2017 from BHGE. Prior to the Transactions, GE provided guarantees, letters of credit, and other support arrangements on our behalf. We provide guarantees to GE Capital on behalf of some customers who have entered into financing arrangements with GE Capital. Prior to the Transactions, a certain number of our employees were granted GE stock options and RSUs under GE's 2007 Long-Term Incentive Plan. Our consolidated and combined financial statements include compensation expense related to these awards for the portion of an employee's vesting period that accrued during employment with us. INCOME TAXES At closing, BHGE, GE and BHGE LLC entered into a Tax Matters Agreement. The Tax Matters Agreement governs the administration and allocation between the parties of tax liabilities and benefits arising prior to, as a result of, and subsequent to the Transactions, including certain restructuring transactions in connection therewith, and the respective rights, responsibilities and obligations of GE and BHGE, with respect to various other tax matters. GE will be responsible for certain taxes related to the formation of the transaction undertaken by GE and Baker Hughes and their respective subsidiaries. GE has assumed approximately $33 million of tax obligations of Baker Hughes related to the formation of the transaction. Following the closing of the Transactions, BHGE or BHGE LLC (or their respective subsidiaries) may be included in group tax returns with GE. To the extent included in such group tax returns, (i) GE will be required to pay BHGE or BHGE LLC to the extent such separate tax returns include net operating losses that are used to reduce taxes payable by GE with respect to the applicable group tax return, and (ii) BHGE or BHGE LLC will be required to make tax sharing payments to GE in an amount intended to approximate the amount that such entity would have paid if it had not been included in such group tax returns and had filed separate tax returns. The Tax Matters Agreement also provides for the sharing of certain tax benefits (i) arising from the Transactions, including restructuring transactions, and (ii) resulting from allocations of tax items by BHGE LLC. GE is entitled to 100% of these tax benefits to the extent that GE has borne certain taxes related to the formation of the transaction which are currently estimated to be $33 million . Thereafter, these tax benefits will be shared by GE and BHGE in accordance with their economic ownership of BHGE LLC, which will initially be approximately 62.5% and approximately 37.5% , respectively. The sharing of tax benefits generally is expected to result in cash payments by BHGE LLC to its members. Any such cash payments may be subject to adjustment based on certain subsequent events, including tax audits or other determinations as to the availability of the tax benefits with respect to which such cash payments were previously made. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES LEASES At December 31, 2017 , we had long-term non-cancelable operating leases covering certain facilities and equipment. The minimum annual rental commitments, net of amounts due under subleases, for each of the five years in the period ending December 31, 2021 are $156 million , $119 million , $95 million , $76 million and $54 million , respectively, and $188 million in the aggregate thereafter. Rent expense was $360 million , $200 million and $206 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. We did not enter into any significant capital leases during the three years ended December 31, 2017 . LITIGATION We are subject to a number of lawsuits and claims arising out of the conduct of our business. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. We record a liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, including accruals for self-insured losses which are calculated based on historical claim data, specific loss development factors and other information. A range of total possible losses for all litigation matters cannot be reasonably estimated. Based on a consideration of all relevant facts and circumstances, we do not expect the ultimate outcome of currently pending lawsuits or claims against us, other than those discussed below, will have a material adverse effect on our financial position, results of operations or cash flows, however, there can be no assurance as to the ultimate outcome of these matters. With respect to the litigation matters below, if there was an adverse outcome individually or collectively, there could be a material impact on our business, financial condition and results of operations expected for the year. These litigation matters are subject to inherent uncertainties and management's view of these matters may change in the future. Therefore, there can be no assurance as to the ultimate outcome of these matters. During 2014, we received notification from a customer related to a possible equipment failure in a natural gas storage system in Northern Germany, which includes certain of our products. 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. The customer initiated arbitral proceedings against us on June 19, 2015, under the rules of the German Institute of Arbitration e.V. (DIS). On August 3, 2016, the customer amended its claims and now alleges damages of approximately $224 million plus interest at an annual rate of prime + 5% . Hearings before the arbitration panel were held January 16, 2017 through January 23, 2017, and March 20, 2017 through March 21, 2017. In addition, on September 21, 2015, TRIUVA Kapitalverwaltungsgesellschaft mbH filed a lawsuit in the United States District Court for the Southern District of Texas, Houston Division against the Company and Baker Hughes Oilfield Operations, Inc. alleging that the plaintiff is the owner of gas storage caverns in Etzel, Germany in which the Company provided certain equipment in connection with the development of the gas storage caverns. The plaintiff further alleges that the Company supplied equipment that was either defectively designed or failed to warn of risks that the equipment posed, and that these alleged defects caused damage to the plaintiff's property. The plaintiff seeks recovery of alleged compensatory and punitive damages of an unspecified amount, in addition to reasonable attorneys' fees, court costs and pre-judgment and post-judgment interest. The allegations in this lawsuit are related to the claims made in the June 19, 2015 German arbitration referenced above. At this time, we are not able to predict the outcome of these claims. On April 30, 2015, 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 North Dakota law was filed titled Williams et al. v. Baker Hughes Oilfield Operations, Inc. in the U.S. District Court for the District of North Dakota. On February 8, 2016, the Court conditionally certified certain subclasses of employees for collective action treatment. The parties entered into a settlement agreement which was approved by the Court on December 7, 2017. The amount of the settlement will not have a material impact on the financial results reported by the Company. On July 31, 2015, Rapid Completions LLC filed a lawsuit in federal court in the Eastern District of Texas against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc., and others claiming infringement of U.S. Patent Nos. 6,907,936; 7,134,505; 7,543,634; 7,861,774; and 8,657,009. On August 6, 2015, Rapid Completions amended its complaint to allege infringement of U.S. Patent No. 9,074,451. On September 17, 2015, Rapid Completions and Packers Plus Energy Services Inc. sued Baker Hughes Canada Company in the Canada Federal Court on the related Canadian patent 2,412,072. On April 1, 2016, Rapid Completions removed U.S. Patent No. 6,907,936 from its claims in the lawsuit. On April 5, 2016, Rapid Completions filed a second lawsuit in federal court in the Eastern District of Texas against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc. and others claiming infringement of U.S. Patent No. 9,303,501. These patents relate primarily to certain specific downhole completions equipment. The plaintiff has requested a permanent injunction against further alleged infringement, damages in an unspecified amount, supplemental and enhanced damages, and additional relief such as attorney's fees and costs. During August and September 2016, the United States Patent and Trademark Office (USPTO) agreed to institute an inter-partes review of U.S. Patent Nos 7,861,774; 7,134,505; 7,534,634; 6,907,936; 8,657,009; and 9,074,451. On August 29, 2017, the USPTO issued its final written decisions in the inter-partes reviews of U.S. Patent Nos. 8,657,009 and 9,074,451 finding that all claims of those patents were unpatentable. On August 31, 2017, the USPTO issued its final written decision in the inter-partes review of U.S. Patent 6,907,936 - the patent dropped from the lawsuit by the plaintiffs - finding that all claims of this patent were patentable. On October 27, 2017, Rapid Completions filed its notices of appeal of the USPTO’s final written decision in the inter-partes review of U.S. Patent Nos. 8,657,009 and 9,074,451. Trial on the validity of asserted claims from Canada patent 2,412,072, was completed March 9, 2017. On December 7, 2017, the Canadian Court issued its judgment finding the patent claims asserted from Canada patent 2,412,072 against Baker Hughes Canada Company were invalid. On January 5, 2018, Rapid Completions filed its Notice of Appeal of the Canadian Court’s judgment of invalidity. At this time, we are not able to predict the outcome of these claims. On May 10, 2017, a putative class action complaint was filed on behalf of purported Baker Hughes stockholders in the U.S. District Court for the Southern District of Texas challenging the Transaction Agreement and Plan of Merger combining Baker Hughes with GE O&G. The complaint is captioned Booth Family Trust v. Baker Hughes Inc., et al ., Civil Action No. 4:17-cv-01457 (S.D. Tex. 2017). The complaint asserted, among other things, claims under Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act) against Baker Hughes and the members of its board of directors and challenged the adequacy of the disclosures made in the combined proxy statement/prospectus dated as of May 9, 2017. In addition to certain unspecified damages and reimbursement of costs, the plaintiff sought to enjoin the consummation of the Transactions. On June 21, 2017, the parties reached an agreement in principle to settle the Booth Family Trust litigation in exchange for the Company making certain additional disclosures. Those disclosures were contained in an 8-K filed with the SEC on June 22, 2017. On September 14, 2017, the parties filed a Stipulation of Dismissal with the Court dismissing all remaining claims of the Booth Family Trust with prejudice. The parties agreed to an award of attorney’s fees in an amount that will not have a material impact on the financial results reported by the Company . Following consummation of the Transactions, two purported holders of shares of Baker Hughes common stock, representing a total of 1,875,000 shares of common stock of Baker Hughes, filed petitions in the Court of Chancery of the State of Delaware seeking appraisal for their shares pursuant to Section 262 of the Delaware General Corporation Law. The action is captioned as follows: GKC Strategic Value Master Fund, LP F/K/A GKC Appraisal Rights Master Fund, LP and Walleye Trading LLC v. Baker Hughes Incorporated , Case No. 2017-0769. At this time, we are not able to predict the outcome of this action. On February 17, 2017, GE Infrastructure Sensing, Inc. (now known as GE Infrastructure Sensing, LLC) (GEIS), a subsidiary of the Company, was served with a lawsuit filed in the Eastern District of New York by a company named Saniteq LLC claiming compensatory damages totalling $500 million plus punitive damages of an unspecified amount. The complaint is captioned Saniteq LLC v. GE Infrastructure Sensing, Inc ., No. 17-cv-771 (E.D.N.Y 2017). The complaint generally alleges that GEIS breached a contract being negotiated between the parties and misappropriated unspecified trade secrets. At this time, we are not able to predict the outcome of these claims. In January 2013, INEOS and Naphtachimie initiated expertise proceedings in Aix-en-Provence, France arising out of a fire at a chemical plant owned by INEOS in Lavera, France, which resulted in a 15-day plant shutdown and destruction of a steam turbine, which was part of a compressor train owned by Naphtachimie. INEOS and Naphtachimie claim approximately €195 million in losses as a result of the incident. Two of the Company's subsidiaries (and 17 other companies) were notified to participate in the proceedings. The proceedings are ongoing, and at this time, there is no indication that the Company's subsidiaries were involved in the incident. At this time, we are not able to predict the outcome of these claims. In late November 2017, staff of the Boston office of the SEC notified GE that they are conducting an investigation of GE’s revenue recognition practices and internal controls over financial reporting related to long-term service agreements. The scope of the SEC’s request may include some BHGE contracts, mainly in our TPS business. We have provided documents to GE and are cooperating with them in their response to the SEC. The Company is reporting the following matter in compliance with SEC requirements to disclose environmental proceedings where the government is a party and that potentially involve monetary sanctions of $100,000 or greater. In January 2018, Kern County California issued an administrative enforcement order with a proposed penalty of $130,000 for alleged violations of process safety management regulations at a manufacturing facility in Taft, California that is indirectly owned by the Company. We insure against risks arising from our business to the extent deemed prudent by our management and to the extent insurance is available, but no assurance can be given that the nature and amount of that insurance will be sufficient to fully indemnify us against liabilities arising out of pending or future legal proceedings or other claims. Most of our insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability, general liability and workers compensation. ENVIRONMENTAL MATTERS Estimated remediation costs are accrued using currently available facts, existing environmental permits, technology and enacted laws and regulations. Our cost estimates are developed based on internal evaluations and are not discounted. Accruals are recorded when it is probable that we will be obligated to pay for environmental site evaluation, remediation or related activities, and such costs can be reasonably estimated. As additional information becomes available, accruals are adjusted to reflect current cost estimates. Ongoing environmental compliance costs, such as obtaining environmental permits, installation of pollution control equipment and waste disposal are expensed as incurred. Where we have been identified as a potentially responsible party in a U.S. federal or state Comprehensive Environmental Response, Compensation and Liability Act (“Superfund”) site, we accrue our share of the estimated remediation costs of the site. This share is based on the ratio of the estimated volume of waste we contributed to the site to the total volume of waste disposed at the site. OTHER In the normal course of business with customers, vendors and others, we have entered into off-balance sheet arrangements, such as surety bonds for performance, letters of credit and other bank issued guarantees, which totaled approximately $3.4 billion at December 31, 2017 . It is not practicable to estimate the fair value of these financial instruments. None of the off-balance sheet arrangements either has, or is likely to have, a material effect on our financial position, results of operations or cash flows. We also had commitments outstanding for purchase obligations for each of the five years in the period ending December 31, 2022 of $ 962 million , $ 45 million , $ 42 million , $ 36 million and $ 23 million , respectively, and $ 13 million in the aggregate thereafter. |
Restructuring, Impairment and O
Restructuring, Impairment and Other | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring, Impairment and Other | IMPAIRMENT AND OTHER We recorded restructuring, impairment and other charges of $412 million , $516 million , and $411 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. Details of these charges are discussed below. RESTRUCTURING AND IMPAIRMENT CHARGES In the current and prior periods, we approved various restructuring plans globally, mainly to consolidate manufacturing and service facilities, rationalize product lines and rooftops, and reduce headcount across various functions. As a result, we recognized a charge of $385 million , $293 million and $314 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. These restructuring initiatives will generate charges post 2017, and the related estimated remaining charges are approximately $150 million . These charges are included as part of " Restructuring, impairment and other " in the consolidated and combined statements of income (loss). The amount of costs not included in the reported segment results is as follows: 2017 2016 2015 Oilfield Services $ 187 $ 122 $ 183 Oilfield Equipment 114 52 32 Turbomachinery & Process Solutions 21 58 54 Digital Solutions 34 34 26 Corporate 29 27 19 Total $ 385 $ 293 $ 314 These costs were primarily related to product line terminations, plant closures and related expenses such as property, plant and equipment impairments, contract terminations and costs of assets' and employees' relocation, employee-related termination benefits, and other incremental costs that were a direct result of the restructuring plans. 2017 2016 2015 Property, plant & equipment, net $ 131 $ 93 $ 137 Employee-related termination expenses 186 111 103 Asset relocation costs 10 17 14 EHS remediation costs 9 20 17 Contract termination fees 26 37 26 Other incremental costs 23 15 17 Total $ 385 $ 293 $ 314 OTHER CHARGES Other charges included in "Restructuring, impairment and other" caption of the consolidated and combined statements of income (loss) was $27 million , $223 million and $97 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Other charges include currency devaluation charges of $12 million , $138 million and $63 million for the years ended December 31, 2017 , 2016 and 2015 , respectively, largely driven by significant currency devaluations in Angola and Nigeria. These markets have minimal currency derivative liquidity which limits our ability to offset these exposures. |
Supplementary Information
Supplementary Information | 12 Months Ended |
Dec. 31, 2017 | |
Guarantees and Product Warranties [Abstract] | |
Supplementary Information | SUPPLEMENTARY INFORMATION All Other Current Liabilities All other current liabilities as of December 31, 2017 and 2016 include approximately $881 million and $318 million , respectively, of employee related liabilities. Product Warranties We provide for estimated product warranty expenses when we sell the related products. Because warranty estimates are forecasts that are based on the best available information, primarily historical claims experience, claims costs may differ from amounts provided. An analysis of changes in the liability for product warranties are as follows: Balance at December 31, 2016, and 2015, respectively $ 74 $ 100 Provisions 37 29 Expenditures (44 ) (49 ) Other (1) 97 (6 ) Balance at December 31, 2017, and 2016, respectively $ 164 $ 74 (1) Includes an increase of $93 million in the year ended December 31, 2017 as a result of the Baker Hughes acquisition. |
Quarterly Data (Unaudited)
Quarterly Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Quarterly Data (Unaudited) | QUARTERLY DATA (UNAUDITED) (In millions, except per unit amounts) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year 2017 Revenue $ 3,111 $ 3,010 $ 5,375 $ 5,763 $ 17,259 Gross profit (1) 775 542 1,020 875 3,213 Restructuring, impairment and other (2) 42 59 191 119 412 Merger and related costs 66 85 159 63 373 Net income (loss) attributable to BHGE LLC 125 (16 ) (277 ) (182 ) (350 ) Cash distribution per common unit 0.17 0.18 0.35 2016 Revenue $ 3,407 $ 3,322 $ 3,024 $ 3,516 $ 13,269 Gross profit (1) 798 785 730 833 3,146 Restructuring, impairment and other (2) 147 228 77 64 516 Merger and related costs 5 3 2 23 33 Net income attributable to BHGE LLC 141 18 96 148 403 (1) Represents revenue less cost of sales and cost of services. (2) Restructuring, impairment and other costs associated with asset impairments, workforce reductions, facility closures and contract terminations recorded during 2017 and 2016. See "Note 16. Restructuring, Impairment and Other" for further discussion. |
Basis of Presentation and Sum27
Basis of Presentation and Summary of Significant Accounting Policies - (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION On July 3, 2017, we closed our previously announced business combination (the Transactions) to combine the oil and gas business (GE O&G) of General Electric Company (GE) and Baker Hughes (refer to "Note 2. Business Acquisition" for further details on the Transactions). In connection with the Transactions, we entered into and are governed by an Amended & Restated Limited Liability Company Agreement, dated as of July 3, 2017 (the BHGE LLC Agreement). Under the BHGE LLC Agreement, EHHC Newco, LLC (EHHC), a wholly owned subsidiary of Baker Hughes, a GE company (BHGE), is our sole managing member and BHGE is the sole managing member of EHHC. As our managing member, EHHC conducts, directs and exercises full control over all our activities, including our day-to-day business affairs and decision-making, without the approval of any other member. As such, EHHC is responsible for all our operational and administrative decisions and the day-to-day management of our business. GE owns approximately 62.5% of our common units and BHGE owns approximately 37.5% of our common units indirectly through two wholly owned subsidiaries. The current year results, and balances, may not be comparable to prior years as they include the results of Baker Hughes from July 3, 2017. The Transactions were treated as a "reverse acquisition" for accounting purposes and, as such, the historical financial statements of the accounting acquirer, GE O&G, are the historical financial statements of the Company. The accompanying consolidated and combined financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. and such principles, U.S. GAAP) and pursuant to the rules and regulations of the SEC for annual financial information. All intercompany accounts and transactions have been eliminated. The Company's financial statements have been prepared on a consolidated basis, effective July 3, 2017. Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest). All subsequent periods will also be presented on a consolidated basis. For all periods prior to July 3, 2017, the Company's financial statements were prepared on a combined basis. The combined financial statements combine certain accounts of GE and its subsidiaries that were historically managed as part of its oil & gas business and contributed to BHGE LLC as part of the Transactions. Additionally, it also includes certain assets, liabilities and results of operations of other businesses of GE that were also contributed to BHGE LLC as part of the Transactions on a fully retrospective basis (in accordance with the guidance applicable to transactions between entities under common control) based on their carrying values, as reflected in the accounting records of GE. The consolidated and combined statements of income reflect intercompany expense allocations made to us by GE for certain corporate functions and for shared services provided by GE. Where possible, these allocations were made on a specific identification basis, and in other cases, these expenses were allocated by GE based on relative percentages of net operating costs or some other basis depending on the nature of the allocated cost. See "Note 16. Related Party Transactions" for further information on expenses allocated by GE. The historical financial results in the consolidated and combined financial statements presented may not be indicative of the results that would have been achieved had GE O&G operated as a separate, stand-alone entity during those periods. The GE O&G numbers in the consolidated and combined statements of income (loss) have been reclassed to conform to the current presentation. We believe that the current presentation is a more appropriate presentation of the combined businesses. Merger and related costs includes all costs associated with the Transactions described in Note 2. Refer to "Note 2. Business Acquisition" for further details. In the notes to the consolidated and combined financial statements, all dollar and members' units in tabulations are in millions of dollars and members' units, respectively, unless otherwise indicated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of any contingent assets or liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information that we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty, and accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. While we believe that the estimates and assumptions used in the preparation of the consolidated and combined financial statements are appropriate, actual results could differ from those estimates. Estimates are used for, but are not limited to, determining the following: allowance for doubtful accounts and inventory valuation reserves; recoverability of long-lived assets, including revenue recognition on long term contracts, valuation of goodwill; useful lives used in depreciation and amortization; income taxes and related valuation allowances; accruals for contingencies; actuarial assumptions to determine costs and liabilities related to employee benefit plans; stock-based compensation expense; valuation of derivatives and the fair value of assets acquired and liabilities assumed in acquisitions; and expense allocations for certain corporate functions and shared services provided by GE. |
Foreign Currency | Foreign Currency Assets and liabilities of non-U.S. operations with a functional currency other than the U.S. dollar have been translated into U.S. dollars at the quarterly exchange rates, and revenue, expenses, and cash flows have been translated at average rates for the respective periods. Any resulting translation gains and losses are included in other comprehensive income (loss). Gains and losses from foreign currency transactions, such as those resulting from the settlement of receivables or payables in the non-functional currency and those resulting from remeasurements of monetary items, are included in the consolidated and combined statement of income (loss). |
Cost Method Investments | Investments in privately held companies in which we do not have the ability to exercise significant influence, most often because we hold a voting interest of 0% to 20% are accounted for using the cost method. |
Equity Method Investments | Associated companies are entities in which we do not have a controlling financial interest, but over which we have significant influence, most often because we hold a voting interest of 20% to 50% . Associated companies are accounted for as equity method investments. Results of associated companies are presented on a one-line basis in the caption "Equity in loss of affiliate" in our consolidated and combined statements of income (loss). Investments in, and advances to, associated companies are presented on a one-line basis in the caption "All other assets" in our consolidated and combined statement of financial position. |
Sales of Goods and Services | Sales of Goods and Services We record all sales of goods and services only when a firm sales agreement is in place, delivery has occurred or services have been rendered and collectability of the fixed or determinable sales price is reasonably assured. Except for goods sold under long-term construction type contracts and service agreements, we recognize sales of goods under the provisions of SEC Staff Accounting Bulletin (SAB) 104, Revenue Recognition . In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have reliably demonstrated that all specified acceptance criteria have been met or when formal acceptance occurs, respectively. We do not provide for anticipated losses before we record sales. We recognize revenue on larger construction and equipment contracts using long-term construction accounting. We estimate total long-term contract revenue net of price concessions as well as total contract costs. For larger construction and equipment contracts, we recognize sales based on our progress toward contract completion measured by actual costs incurred in relation to our estimate of total expected costs. We routinely update our estimates of future costs for agreements in process and report any cumulative effects of such adjustments in current operations. We provide for any loss that we expect to incur on these agreements when that loss is probable. We sell product services under long-term product maintenance agreements, where costs of performing services are incurred on an other than straight-line basis. We recognize related sales based on the extent of our progress toward completion measured by actual costs incurred in relation to our estimate of total expected costs. We routinely update our estimates of future costs for agreements in process and report any cumulative effects of such adjustments in current operations. For our long-term product maintenance agreements, we regularly assess customer credit risk inherent in the carrying amounts of receivables and contract costs and estimated earnings, including the risk that contractual penalties may not be sufficient to offset our accumulated costs in the event of customer termination. We gain insight into expected future utilization and cost trends, as well as credit risk, through our knowledge of the installed base of equipment and the close interaction with our customers that comes with supplying critical services and parts over extended periods. Revisions, after applying the cumulative catch up basis of accounting, may affect a product services agreement's total estimated profitability resulting in an adjustment of earnings. We provide for probable losses when they become evident. Arrangements for the sale of goods and services sometimes include multiple components. Our arrangements with multiple components usually involve an upfront deliverable of equipment and future service deliverables such as installation, commissioning, training or the future delivery of ancillary products. In most cases, the relative values of the undelivered components are not significant to the overall arrangement and are typically delivered within three to six months after the core product has been delivered. In such agreements, selling price is determined for each component and any difference between the total of the separate selling prices and total contract consideration (i.e., discount) is allocated pro rata across each of the components in the arrangement. The value assigned to each component is objectively determined and obtained primarily from sources such as the separate selling price for that or a similar item or from competitor prices for similar items. If such evidence is not available, we use our best estimate of selling price, which is established consistent with the pricing strategy of the business and considers product configuration, geography, customer type, and other market specific factors. |
Sales of Goods and Services | Sales of Goods and Services We record all sales of goods and services only when a firm sales agreement is in place, delivery has occurred or services have been rendered and collectability of the fixed or determinable sales price is reasonably assured. Except for goods sold under long-term construction type contracts and service agreements, we recognize sales of goods under the provisions of SEC Staff Accounting Bulletin (SAB) 104, Revenue Recognition . In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have reliably demonstrated that all specified acceptance criteria have been met or when formal acceptance occurs, respectively. We do not provide for anticipated losses before we record sales. We recognize revenue on larger construction and equipment contracts using long-term construction accounting. We estimate total long-term contract revenue net of price concessions as well as total contract costs. For larger construction and equipment contracts, we recognize sales based on our progress toward contract completion measured by actual costs incurred in relation to our estimate of total expected costs. We routinely update our estimates of future costs for agreements in process and report any cumulative effects of such adjustments in current operations. We provide for any loss that we expect to incur on these agreements when that loss is probable. We sell product services under long-term product maintenance agreements, where costs of performing services are incurred on an other than straight-line basis. We recognize related sales based on the extent of our progress toward completion measured by actual costs incurred in relation to our estimate of total expected costs. We routinely update our estimates of future costs for agreements in process and report any cumulative effects of such adjustments in current operations. For our long-term product maintenance agreements, we regularly assess customer credit risk inherent in the carrying amounts of receivables and contract costs and estimated earnings, including the risk that contractual penalties may not be sufficient to offset our accumulated costs in the event of customer termination. We gain insight into expected future utilization and cost trends, as well as credit risk, through our knowledge of the installed base of equipment and the close interaction with our customers that comes with supplying critical services and parts over extended periods. Revisions, after applying the cumulative catch up basis of accounting, may affect a product services agreement's total estimated profitability resulting in an adjustment of earnings. We provide for probable losses when they become evident. Arrangements for the sale of goods and services sometimes include multiple components. Our arrangements with multiple components usually involve an upfront deliverable of equipment and future service deliverables such as installation, commissioning, training or the future delivery of ancillary products. In most cases, the relative values of the undelivered components are not significant to the overall arrangement and are typically delivered within three to six months after the core product has been delivered. In such agreements, selling price is determined for each component and any difference between the total of the separate selling prices and total contract consideration (i.e., discount) is allocated pro rata across each of the components in the arrangement. The value assigned to each component is objectively determined and obtained primarily from sources such as the separate selling price for that or a similar item or from competitor prices for similar items. If such evidence is not available, we use our best estimate of selling price, which is established consistent with the pricing strategy of the business and considers product configuration, geography, customer type, and other market specific factors. |
Research and Development | Research and Development Research and development costs are expensed as incurred and relate to the research and development of new products and services. These costs amounted to $501 million , $352 million and $408 million for the years ended December 31, 2017 , 2016 and 2015, respectively. Research and development expenses were reported in cost of goods sold and cost of services sold. |
Cash and Equivalents | Cash and Equivalents Short-term investments with original maturities of three months or less are included in cash equivalents unless designated as available-for-sale and classified as investment securities. As of December 31, 2017 and December 31, 2016, $1,190 million and $752 million , respectively, of cash and equivalents were considered restricted as they were held in bank accounts and cannot be released, transferred or otherwise converted into a currency that is regularly transacted internationally, due to lack of market liquidity, capital controls or similar monetary or exchange limitations limiting the flow of capital out of the jurisdiction. Cash and equivalents includes $997 million of cash at December 31, 2017 held on behalf of GE, of which $764 million is restricted, and a corresponding liability is reported in short-term borrowings. See "Note 16. Related Party Transactions" for further details. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts We establish an allowance for doubtful accounts based on various factors including the payment history and financial condition of our debtors and the economic environment. Provisions for doubtful accounts are recorded based on the aging status of the debtor accounts or when it becomes evident that the debtor will not make the required payments at either contractual due dates or in the future. |
Concentration of Credit Risk | Concentration of Credit Risk We grant credit to our customers who primarily operate in the oil and natural gas industry. Although this concentration affects our overall exposure to credit risk, our current receivables are spread over a diverse group of customers across many countries, which mitigates this risk. We perform periodic credit evaluations of our customers' financial conditions, including monitoring our customers' payment history and current credit worthiness to manage this risk. We do not generally require collateral in support of our current receivables, but we may require payment in advance or security in the form of a letter of credit or a bank guarantee. |
Inventories | Inventories All inventories are stated at the lower of cost or net realizable values and they are measured on a first-in, first-out (FIFO) basis or average cost basis. As necessary, we record provisions and maintain reserves for excess, slow moving and obsolete inventory. To determine these reserve amounts, we regularly review inventory quantities on hand and compare them to estimates of future product demand, market conditions, production requirements and technological developments. |
Property, Plant And Equipment (PP&E) | Property, Plant and Equipment (PP&E) Property, plant and equipment is initially stated at cost and is depreciated over its estimated economic life. Subsequently, property, plant and equipment is measured at cost less accumulated depreciation and impairment losses. We manufacture a substantial portion of our tools and equipment and the cost of these items, which includes direct and indirect manufacturing costs, is capitalized and carried in inventory until it is completed. |
Other Intangible Assets | Other Intangible Assets We amortize the cost of other intangible assets over their estimated useful lives unless such lives are deemed indefinite. The cost of intangible assets is generally amortized on a straight-line basis over the asset's estimated economic life. Amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. In these circumstances, they are tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Intangible assets with indefinite lives are tested annually for impairment and written down to fair value as required. Refer to the Impairment of Goodwill and Other Long-Lived Assets accounting policy. |
Impairment of Goodwill and Other Long-lived Assets | Impairment of Goodwill and Other Long-lived Assets We perform an annual impairment test of goodwill on a qualitative or quantitative basis for each of our reporting units as of July 1, or more frequently when circumstances indicate an impairment may exist at the reporting unit level. When performing the annual impairment test we have the option of first performing a qualitative assessment to determine the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If such a conclusion is reached, we would then be required to perform a quantitative impairment assessment of goodwill. However, if the assessment leads to a determination that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then no further assessments are required. A quantitative assessment for the determination of impairment is made by comparing the carrying amount of each reporting unit with its fair value, which is generally calculated using a combination of market, comparable transaction and discounted cash flow approaches. See "Note 6. Goodwill and Other Intangible Assets" for further information on valuation methodology and impairment of goodwill. |
Impairment of Long-Lived Assets | We review PP&E, intangible assets and certain other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable and at least annually for indefinite-lived intangible assets. When testing for impairment, we group our long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (or asset group). The determination of recoverability is made based upon the estimated undiscounted future net cash flows. The amount of impairment loss, if any, is determined by comparing the fair value, as determined by a discounted cash flow analysis, with the carrying value of the related assets. |
Financial Instruments | Financial Instruments Our financial instruments include cash and equivalents, current receivables, investments, accounts payables, short and long-term debt, and derivative financial instruments. We monitor our exposure to various business risks including commodity prices and foreign currency exchange rates and we regularly use derivative financial instruments to manage these risks. At the inception of a new derivative, we designate the derivative as a hedge or we determine the derivative to be undesignated as a hedging instrument. We document the relationships between the hedging instruments and the hedged items, as well as our risk management objectives and strategy for undertaking various hedge transactions. We assess whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged item at both the inception of the hedge and on an ongoing basis. We have a program that utilizes foreign currency forward contracts to reduce the risks associated with the effects of certain foreign currency exposures. Under this program, our strategy is to have gains or losses on the foreign currency forward contracts mitigate the foreign currency transaction and translation gains or losses to the extent practical. These foreign currency exposures typically arise from changes in the value of assets (for example, current receivables) and liabilities (for example, current payables) which are denominated in currencies other than the functional currency of the respective entity. We record all derivatives as of the end of our reporting period in our consolidated and combined statement of financial position at fair value. For the forward contracts held as undesignated hedging instruments, we record the changes in fair value of the forward contracts in our consolidated and combined statements of income along with the change in the fair value, related to foreign exchange movements, of the hedged item. Changes in the fair value of forward contracts designated as cash flow hedging instruments are recognized in other comprehensive income until the hedged item is recognized in earnings. If derivatives designated as a cash flow hedge are determined to be ineffective, the ineffective portion of that derivative's change in fair value is recognized in earnings. |
Fair Value Measurements | Fair Value Measurements For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: • Level 1 - Quoted prices for identical instruments in active markets. • Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 - Significant inputs to the valuation model are unobservable. We maintain policies and procedures to value instruments using the best and most relevant data available. In addition, we perform reviews to assess the reasonableness of the valuations. With regard to Level 3 valuations (including instruments valued by third parties), we perform a variety of procedures to assess the reasonableness of the valuations. Such reviews include an evaluation of instruments whose fair value change exceeds predefined thresholds (and/or does not change) and consider the current interest rate, currency and credit environment, as well as other published data, such as rating agency market reports and current appraisals. Recurring Fair Value Measurements Derivatives When we have Level 1 derivatives, which are traded either on exchanges or liquid over-the-counter markets, we use closing prices for valuation. The majority of our derivatives are valued using internal models and are included in Level 2. These internal models maximize the use of market observable inputs including interest rate curves and both forward and spot prices for currencies and commodities. Derivative assets and liabilities included in Level 2 primarily represent foreign currency and commodity forward contracts for the Company. Investments in Debt and Equity Securities When available, we use quoted market prices to determine the fair value of investment securities, and they are included in Level 1. Level 1 securities primarily include publicly traded equity securities. For investment securities for which market prices are observable for identical or similar investment securities but not readily accessible for each of those investments individually (that is, it is difficult to obtain pricing information for each individual investment security at the measurement date), we use pricing models that are consistent with what other market participants would use. The inputs and assumptions to the models are derived from market observable sources including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and other market-related data. Thus, certain securities may not be priced using quoted prices, but rather determined from market observable information. These investments are included in Level 2. When we use valuations that are based on significant unobservable inputs we classify the investment securities in Level 3. Non-Recurring Fair Value Measurements Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances. These assets can include long-lived assets that have been reduced to fair value when they are held for sale, cost and equity method investments and long-lived assets that are written down to fair value when they are impaired and the remeasurement of retained investments in formerly consolidated subsidiaries upon a change in control that results in a deconsolidation of a subsidiary, if we sell a controlling interest and retain a noncontrolling stake in the entity. Assets that are written down to fair value when impaired and retained investments are not subsequently adjusted to fair value unless further impairment occurs. Cost and Equity Method Investments Cost and equity method investments are valued using market observable data such as quoted prices when available. When market observable data is unavailable, investments are valued using a discounted cash flow model, comparative market multiples or a combination of both approaches as appropriate and other third-party pricing sources. Long-lived Assets Fair values of long-lived assets, including real estate, are primarily derived internally and are based on observed sales transactions for similar assets. In other instances, for example, collateral types for which we do not have comparable observed sales transaction data, collateral values are developed internally and corroborated by external appraisal information. Adjustments to third-party valuations may be performed in circumstances where market comparables are not specific to the attributes of the specific collateral or appraisal information may not be reflective of current market conditions due to the passage of time and the occurrence of market events since receipt of the information. |
Income Taxes | Income Taxes We are treated as a partnership for U.S. federal income tax purposes. As such, except for certain U.S. corporations owned by the Company, we are not subject to U.S. federal income tax under current U.S. tax laws. Our members will each be required to take into account for U.S. federal income tax purposes their distributive share of our items of income, gain, loss and deduction, which generally will include the U.S. operations of both Baker Hughes and GE O&G. BHGE and GE will each be taxed on their distributive share of income and gain, whether or not a corresponding amount of cash or other property is distributed to them. For assets held indirectly by us through subsidiaries, including both foreign and U.S., the taxes attributable to those subsidiaries will be reflected in our consolidated and combined financial statements. We account for taxes under the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial statement and tax return bases of assets and liabilities as well as from net operating losses and tax credit carryforwards, based on enacted tax rates expected to be in effect when taxes actually are paid or recovered and other provisions of the tax law. The effect of a change in tax laws or rates on deferred tax assets and liabilities is recognized in income in the period in which such change is enacted. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not, and a valuation allowance is established for any portion of a deferred tax asset that management believes may not be realized. Due to the enactment of U.S. tax reform, repatriations of foreign earnings will generally be free of U.S. federal tax but may incur other taxes, such as withholding or state taxes. Indefinite reinvestment is determined by management’s judgment about and intentions concerning the future operations of the Company. Most of these earnings have been reinvested in active non-U.S. business operations. At December 31, 2017, we have not changed our indefinite reinvestment decision as a result of U.S. tax reform but will reassess this during the course of 2018, accordingly, we have not provided income tax on such earnings. It is not practicable to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely. Significant judgment is required in determining our tax expense and in evaluating our tax positions, including evaluating uncertainties. We operate in more than 120 countries and our tax filings are subject to audit by the tax authorities in the jurisdictions where we conduct business. These audits may result in assessments of additional taxes that are resolved with the tax authorities or through the courts. We have provided for the amounts that we believe will ultimately result from these proceedings. We recognize uncertain tax positions that are “more likely than not” to be sustained if the relevant tax authority were to audit the position with full knowledge of all the relevant facts and other information. For those tax positions that meet this threshold, we measure the amount of tax benefit based on the largest amount of tax benefit that has a greater than 50% chance of being realized in a final settlement with the relevant authority. We classify interest and penalties associated with uncertain tax positions as income tax expense. The effects of tax adjustments and settlements from taxing authorities are presented in the combined financial statements in the period they are recorded. Additionally, as part of U.S. tax reform, the U.S. has enacted a tax on "base eroding" payments from the U.S. and a minimum tax on foreign earnings (global intangible low-taxed income). Because aspects of the new minimum tax and the effect on our operations is uncertain and because aspects of the accounting rules associated with this provision have not been resolved, we have not made a provisional accrual for the deferred tax aspects of this provision and consequently have not made an accounting policy election on the deferred tax treatment of this tax. |
Environmental Liabilities | Environmental Liabilities We are involved in numerous remediation actions to clean up hazardous waste as required by federal and state laws. Liabilities for remediation costs exclude possible insurance recoveries and, when dates and amounts of such costs are not known, are not discounted. When there appears to be a range of possible costs with equal likelihood, liabilities are based on the low end of such range. It is reasonably possible that our environmental remediation exposure will exceed amounts accrued. However, due to uncertainties about the status of laws, regulations, technology and information related to individual sites, such amounts are not reasonably estimable. The determination of the required accruals for remediation costs is subject to uncertainty, including the evolving nature of environmental regulations and the difficulty in estimating the extent and type of remediation activity that is necessary. |
NEW ACCOUNTING STANDARDS TO BE ADOPTED | NEW ACCOUNTING STANDARDS TO BE ADOPTED ASU No. 2014-09, Revenue from Contracts with Customers Background In May 2014, the Financial Accounting Standards Board (FASB) issued a new comprehensive set of revenue recognition principles, Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, that supersedes most existing U.S. GAAP revenue recognition guidance (including ASC 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts). The new standard will become effective for annual reporting periods beginning after December 15, 2017. We adopted the standard on January 1, 2018 and will apply it retrospectively to all periods presented and will elect the practical expedient for contract modifications. Since the issuance of the new standard by the FASB, we have engaged in a collaborative process with our industry peers and worked with standard setters on important interpretive matters with the objective of ensuring consistency in the application of the standard. Change in Timing and Presentation, No Impact to Cash or Economics The new standard requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time based on when control of goods and services transfer to a customer. As a result, we expect changes in the presentation of our financial statements, including: (1) timing of revenue recognition, and (2) changes in classification between revenue and costs. The new standard will have no cash impact and, as such, does not affect the economics of our underlying customer contracts. The effect of applying the new guidance to our existing book of contracts will result in lower reported earnings in 2018 (and comparative periods previously reported) and in the early years after adoption. However, we expect to experience an increase in reported earnings, on that existing book of contracts, as they mature. Current Estimate of Financial Statement Effect We adopted the new standard on January 1, 2018. When we report our 2018 results, the comparative results for 2017 and 2016 will be updated to reflect the application of the requirements of the new standard to these periods. Based on our assessment and best estimates to date, we expect an after-tax reduction to our January 1, 2016 retained earnings balance of approximately $0.4 billion , with an estimated after-tax reduction of $0.1 billion and $0.1 billion on our 2016 and 2017 earnings, respectively. These adjustments primarily relate to the timing of revenue recognition on our long-term product service agreements. Beyond those effects, we expect application of the new guidance will result in increases and decreases in revenue within our segments, which will largely offset and will be immaterial at a total Company level. Following adoption in 2018, our books and records will only reflect the results as required under the new standard limiting our ability to estimate the effect of the standard on our earnings. Given the inherent difficulty in this ongoing estimation of the effect of the standard on any future periods, we do not plan to continue to assess the effect on 2018. As discussed above, we anticipate a dilutive effect of the new standard in the year of adoption consistent with the effect to the restated 2016 and 2017 results and the effect will be less dilutive for years after initial adoption. However, this expectation is based on many variables, including underlying business performance, which are subject to change, making the effect of the standard on future periods difficult to estimate. Importantly, application of the new guidance has no effect on the cash we expect to receive nor the economics of these contracts. ASU No. 2016-02, Leases In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. While we continue to evaluate the effect of the standard on our ongoing financial reporting, we anticipate that the adoption of the ASU may materially affect our consolidated and combined financial statements. ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory . The ASU eliminates the deferral of tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes will be recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The new standard is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The effect of the adoption of the standard will depend on the nature and amount of future transactions but is currently expected as an increase to retained earnings of approximately $0.3 billion . Future earnings will be reduced in total by this amount. The effect of the change on future transactions will depend on the nature and amount of future transactions as it will affect the timing of recognition of both tax expenses and tax benefits, with no change in the associated cash flows. ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changes the income statement presentation of net periodic benefit cost by requiring separation between the service cost component and all other components. The service cost component is required to be presented as an operating expense with other similar compensation costs arising for services rendered by the pertinent employees during the period. The non-operating components must be presented outside of income from operations. This pronouncement is effective for annual reporting periods beginning after December 15, 2017, and the presentation disclosure should be applied using a retrospective approach. Early adoption is permitted. We adopted this standard on January 1, 2018. The effect of the adoption of this standard will not have a material impact on our consolidated and combined financial statement. All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Purchase price consideration | The tables below present the fair value of the consideration exchanged and the preliminary estimates of the fair value of assets acquired and liabilities assumed and the associated fair value of the noncontrolling interest related to the acquired net assets of Baker Hughes. The final determination of fair value for certain assets and liabilities will be completed as soon as the information necessary to complete the analysis is obtained. These amounts, which may differ materially from these preliminary estimates, will continue to be refined and will be finalized as soon as possible, but no later than one year from the acquisition date. The primary areas of the preliminary estimates that are not yet finalized relate to inventory, property, plant and equipment, identifiable intangible assets, equity-method investments, deferred income taxes, uncertain tax positions and contingencies. Purchase consideration (In millions, except share and per share amounts) July 3, 2017 Baker Hughes shares outstanding 426,097,407 Restricted stock units vested upon closing 1,611,566 Total Baker Hughes shares outstanding for purchase consideration 427,708,973 Baker Hughes share price on July 3, 2017 per share $ 57.68 Purchase consideration $ 24,670 Rollover of outstanding options into options to purchase Class A shares of BHGE (fair value) $ 114 Precombination service of restricted stock units (fair value) $ 14 Total purchase consideration $ 24,798 |
Preliminary identifiable assets acquired and liabilities assumed | Preliminary identifiable assets acquired and liabilities assumed Estimated fair value at July 3, 2017 Assets Cash and equivalents $ 4,133 Current receivables 2,383 Inventories (1) 1,695 Property, plant and equipment 4,868 Intangible assets (2) 4,123 All other assets 1,544 Liabilities Accounts payable $ (1,106 ) Borrowings (3,370 ) Deferred income taxes (3) (43 ) Liabilities for pension and other postretirement benefits (655 ) All other liabilities (1,476 ) Total identifiable net assets $ 12,096 Noncontrolling interest associated with net assets acquired (76 ) Goodwill (4) 12,778 Total purchase consideration $ 24,798 (1) Includes $87 million of adjustments to write-up the acquired inventory to its estimated fair value. Cost of goods sold in 2017 reflects this increased valuation as this inventory was used or sold in the period from July 3, 2017 to December 31, 2017. (2) Intangible assets, as provided in the table below, are recorded at estimated fair value, as determined by management based on available information which includes a preliminary valuation. The estimated useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. We consider the Baker Hughes trade name to be an indefinite life intangible asset, which will not be amortized and will be subject to an annual impairment test. Estimated Fair Value Estimated Weighted Trademarks - Baker Hughes $ 2,100 Indefinite life Customer-related 1,260 15 Patents and technology 550 10 Trademarks - Other 70 10 Capitalized software 90 3-7 In-process research and development 45 Indefinite life Favorable lease contracts 8 10 Total $ 4,123 (3) Includes approximately $160 million of net deferred tax liabilities related to the estimated fair value of intangible assets included in the preliminary purchase consideration and approximately $117 million of other net deferred tax assets, including non-U.S. loss carryforwards net of valuation allowances and offsetting liabilities for unrecognized benefits. (4) Goodwill represents the excess of the total purchase consideration over fair value of the net assets recognized and represents the future economic benefits that we believe will result from combining the operations of GE O&G and Baker Hughes, including expected future synergies and operating efficiencies. Goodwill resulting from the Transactions has been preliminarily allocated to the Oilfield Services segment, of which $67 million is deductible for tax purposes. |
Pro forma information | 2017 2016 Revenue $ 21,921 $ 23,102 Net loss (436 ) (2,734 ) Net loss attributable to the Company (442 ) (2,667 ) |
Current Receivables (Tables)
Current Receivables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Current receivables | Current receivables are comprised of the following at December 31: 2017 2016 Customer receivables $ 4,699 $ 1,699 Related parties 914 392 Other 844 658 Total current receivables 6,457 2,749 Less: Allowance for doubtful accounts (330 ) (186 ) Total current receivables, net $ 6,127 $ 2,563 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory, Net [Abstract] | |
Inventories, net of reserves | Inventories, net of reserves of $360 million and $260 million in 2017 and 2016 , respectively, are comprised of the following at December 31: 2017 2016 Finished goods $ 2,597 $ 1,585 Work in process and raw materials 1,993 1,639 Total inventories, net $ 4,590 $ 3,224 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Property, plant and equipment are comprised of the following at December 31: Useful Life 2017 2016 Land and improvements (1) 8 - 20 years (1) $ 413 $ 130 Buildings, structures and related equipment 5 - 40 years 3,168 1,344 Machinery, equipment and other 2 - 20 years 6,195 2,916 Total cost 9,776 4,390 Less: Accumulated depreciation 2,817 2,065 Property, plant and equipment, less accumulated depreciation $ 6,959 $ 2,325 (1) Useful life excludes land. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The changes in the carrying value of goodwill are detailed below by segment: Oilfield Services Oilfield Equipment Turbo-machinery & Process Solutions Digital Solutions Total Balance at December 31, 2015, gross $ 2,885 $ 3,840 $ 1,853 $ 2,043 $ 10,621 Accumulated impairment at December 31, 2015 (2,633 ) (867 ) — (254 ) (3,754 ) Balance at December 31, 2015 252 2,973 1,853 1,789 6,867 Acquisitions and purchase accounting adjustments 19 (1 ) 18 Currency exchange and others (106 ) (7 ) (38 ) (54 ) (205 ) Balance at December 31, 2016 146 2,985 1,814 1,735 6,680 Acquisition (1) 12,778 — — — 12,778 Currency exchange and others 8 49 92 47 196 Balance at December 31, 2017 $ 12,932 $ 3,034 $ 1,906 $ 1,782 $ 19,654 (1) Includes goodwill associated with the acquisition of Baker Hughes. This amount and its allocations to segments are preliminary. |
Schedule of intangible assets | Intangible assets are comprised of the following at December 31: 2017 2016 Gross Accumulated Net Gross Accumulated Net Technology $ 1,177 $ (440 ) $ 737 $ 596 $ (371 ) $ 225 Customer relationships 3,202 (819 ) 2,383 1,920 (660 ) 1,260 Capitalized software 1,130 (697 ) 433 896 (535 ) 361 Trade names and trademarks 757 (159 ) 598 681 (130 ) 551 Other 10 — 10 1 (1 ) — Finite-lived intangible assets 6,276 (2,115 ) 4,161 4,094 (1,697 ) 2,397 Indefinite-lived intangible assets (1) 2,197 — 2,197 52 — 52 Total intangible assets $ 8,473 $ (2,115 ) $ 6,358 $ 4,146 $ (1,697 ) $ 2,449 (1) Indefinite-lived intangible assets principally comprise trade names and trademarks acquired in business combinations. |
Schedule of intangible assets | Intangible assets are comprised of the following at December 31: 2017 2016 Gross Accumulated Net Gross Accumulated Net Technology $ 1,177 $ (440 ) $ 737 $ 596 $ (371 ) $ 225 Customer relationships 3,202 (819 ) 2,383 1,920 (660 ) 1,260 Capitalized software 1,130 (697 ) 433 896 (535 ) 361 Trade names and trademarks 757 (159 ) 598 681 (130 ) 551 Other 10 — 10 1 (1 ) — Finite-lived intangible assets 6,276 (2,115 ) 4,161 4,094 (1,697 ) 2,397 Indefinite-lived intangible assets (1) 2,197 — 2,197 52 — 52 Total intangible assets $ 8,473 $ (2,115 ) $ 6,358 $ 4,146 $ (1,697 ) $ 2,449 (1) Indefinite-lived intangible assets principally comprise trade names and trademarks acquired in business combinations. |
Schedule of estimated amortization expense | Estimated amortization expense for each of the subsequent five fiscal years is expected to be as follows: Year Estimated Amortization Expense 2018 $ 432 2019 398 2020 372 2021 326 2022 293 |
Contract Assets (Tables)
Contract Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
Contract assets | Contract assets are comprised of the following at December 31: 2017 2016 Long-term product service agreements (1) $ 1,410 $ 1,046 Long-term equipment contract revenue (2) 997 703 Total revenue in excess of billings 2,407 1,749 Deferred inventory costs (3) 338 218 Contract assets $ 2,745 $ 1,967 (1) Reflects revenue earned in excess of billings on our long-term product service agreements. (2) Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment. (3) Represents cost deferral for shipped goods and other costs for which the criteria for revenue recognition has not yet been met. |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Short-term and long-term borrowings | Short-term and long-term borrowings are comprised of the following at December 31: 2017 2016 Amount Weighted average rate (1) Amount Weighted average rate (1) Short-term borrowings Short-term bank borrowings $ 171 12.6 % $ 79 9.1 % Current portion of long-term borrowings 639 2.1 % 34 1.3 % Short-term borrowings from GE 1,124 121 Other short-term borrowings 103 7.6 % 5 1.3 % Total short-term borrowings 2,037 239 Long-term borrowings 3.2% Senior Notes due August 2021 (2) 526 2.5 % — — 2.773% Senior Notes due December 2022 1,244 2.9 % — — 8.55% Debentures due June 2024 (2) 135 3.9 % — — 3.337% Senior Notes due December 2027 1,342 3.4 % — — 6.875% Notes due January 2029 (2) 308 3.9 % — — 5.125% Notes due September 2040 (2) 1,311 4.1 % — — 4.080% Senior Notes due December 2047 1,337 4.1 % — — Capital leases 87 7.0 % 1 4.5 % Other long-term borrowings 22 1.9 % 37 1.2 % Total long-term borrowings 6,312 38 Total borrowings $ 8,349 $ 277 (1) Weighted average effective interest rate is based on carrying value including step-up adjustment recorded upon the acquisition of Baker Hughes. (2) Represents long-term fixed rate debt obligations assumed in connection with the acquisition of Baker Hughes, net of amounts repurchased subsequent to the closing of the Transactions. |
Schedule of maturities of debt | Maturities of debt for each of the five years in the period ended December 31, 2022, and in the aggregate thereafter, are listed in the table below: 2018 2019 2020 2021 2022 Thereafter Total debt $ 2,037 $ 43 $ 13 $ 540 $ 1,255 $ 4,461 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Defined benefit plan funded status of plan | Below is the reconciliation of the beginning and ending balances of benefit obligations, fair value of plan assets and the funded status of our plans. Pension Benefits Other Postretirement Benefits 2017 2016 2017 2016 Change in benefit obligation: Benefit obligation at beginning of year $ 820 $ 1,290 $ 117 $ 136 Service cost 37 18 2 2 Interest cost 51 34 6 5 Plan amendment — — (23 ) (5 ) Actuarial loss (gain) 41 39 — (14 ) Benefits paid (65 ) (39 ) (13 ) (6 ) Curtailments (45 ) — 5 (1 ) Settlements (10 ) — — — Business acquisition (1) 1,546 — 93 — Other (2) (2 ) (460 ) — — Foreign currency translation adjustments 45 (62 ) — — Benefit obligation at end of year 2,418 820 187 117 Change in plan assets: Fair value of plan assets at beginning of year 567 915 — — Actual return on plan assets 152 43 — — Employer contributions 50 50 13 6 Benefits paid (65 ) (39 ) (13 ) (6 ) Settlements (10 ) — — — Business acquisition (1) 1,342 — — — Other (2) (2 ) (358 ) — — Foreign currency translation adjustments 25 (44 ) — — Fair value of plan assets at end of year 2,059 567 — — Funded status - underfunded at end of year $ (359 ) $ (253 ) $ (187 ) $ (117 ) Accumulated benefit obligation $ 2,373 $ 803 $ 187 $ 117 (1) Relates to the acquisition of Baker Hughes on July 3, 2017. (2) Two UK pension plans merged into the GE UK pension plan in 2016. |
Amounts recognized in the consolidated balance sheets | The amounts recognized in the consolidated and combined statements of financial position consist of the following at December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2017 2016 Noncurrent assets $ 46 $ — $ — $ — Current liabilities (10 ) (4 ) (24 ) (6 ) Noncurrent liabilities (395 ) (249 ) (163 ) (111 ) Net amount recognized $ (359 ) $ (253 ) $ (187 ) $ (117 ) |
Accumulated benefit obligations in excess of plan assets | Information for the plans with ABOs in excess of plan assets is as follows at December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2017 2016 Projected benefit obligation $ 1,692 $ 820 n/a n/a Accumulated benefit obligation $ 1,647 $ 803 $ 187 $ 117 Fair value of plan assets $ 1,286 $ 567 n/a n/a |
Schedule of net period costs | The components of net periodic cost are as follows for the years ended December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2015 2017 2016 2015 Service cost $ 37 $ 18 $ 24 $ 2 $ 2 $ 3 Interest cost 51 34 49 6 5 6 Expected return on plan assets (81 ) (46 ) (65 ) — — — Amortization of prior service credit — — — (3 ) (2 ) (1 ) Amortization of net actuarial loss (gain) 12 14 21 (2 ) — 1 Curtailment / settlement loss (gain) (45 ) (2) (26 ) (1) 4 2 (2 ) (11 ) Net periodic cost $ (26 ) $ (6 ) $ 33 $ 5 $ 3 $ (2 ) (1) Primarily associated with two UK plans merging into the GE UK Pension Plan. (2) As a result of the acquisition of Baker Hughes, we obtained a non-contributory pension plan (the Baker Hughes Incorporated Pension Plan or BHIPP). During the fourth quarter of 2017, the Compensation Committee of the Board of Directors approved amendments to the BHIPP to close the plan to new participants and freeze accruals of future service-related benefits effective as of December 31, 2017. As a result of these actions, the Company recorded a curtailment gain of $45 million . The curtailment was recorded by the Company during the fourth quarter of 2017 and included in “Other non-operating income (loss), net” in our consolidated and combined statement of income (loss). |
Weighted average assumptions used to determine benefit obligations | Weighted average assumptions used to determine benefit obligations for these plans are as follows for the years ended December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2017 2016 Discount rate 2.99 % 3.41 % 3.32 % 4.00 % Rate of compensation increase 3.82 % 4.09 % n/a n/a |
Weighted average assumptions used to determine net periodic cost | Weighted average assumptions used to determine net periodic cost for these plans are as follows for the years ended December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2015 2017 2016 2015 Discount rate 3.24 % 3.83 % 3.69 % 3.72 % 4.25 % 4.00 % Expected long-term return on plan assets 6.26 % 6.86 % 6.91 % n/a n/a n/a |
Effect of one-percentage point change in assumed health care cost trend rates | A one percentage point change in assumed health care cost trend rates would have had the following effects on 2017 : One Percentage Point Increase One Percentage Point Decrease Effect on total of service and interest cost components (in thousands) $ 854 $ (685 ) Effect on postretirement welfare benefit obligation (in thousands) $ 15,460 $ (12,817 ) |
Accumulated other comprehensive loss | The amount recorded before-tax in accumulated other comprehensive loss related to employee benefit plans consists of the following at December 31: Pension Benefits Other Postretirement Benefits 2017 2016 2017 2016 Net actuarial loss (gain) $ 117 $ 14 $ (16 ) $ (14 ) Net prior service credit — — (25 ) (3 ) Total $ 117 $ 14 $ (41 ) $ (17 ) |
Fair values of the assets in U.S. Plan | The table below presents the fair value of the pension assets by asset category at December 31 : 2017 2016 Equity securities U.S. equity securities (1) $ 207 $ 122 Global equity securities (1) 551 149 Debt securities Fixed income and cash investment funds 658 49 U.S. corporate 70 53 Other debt securities 55 99 Private equities 107 45 Real estate 44 32 Other investments (2) 367 18 Total plan assets $ 2,059 $ 567 (1) Include direct investments and investment funds. (2) Substantially all represented hedge fund and asset allocation fund investments. |
Expected future benefit payments | Year Pension Benefits Other Postretirement Benefits 2018 $ 105 $ 24 2019 109 22 2020 107 17 2021 111 12 2022 112 10 2023-2027 593 47 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Provision or benefit for income taxes | The provision or benefit for income taxes is comprised of the following for the years ended December 31: 2017 2016 2015 Current: U.S. $ (33 ) $ (114 ) $ 158 Foreign 408 325 411 Total current 375 211 569 Deferred: U.S. (156 ) 13 (21 ) Foreign (47 ) 26 (75 ) Total deferred (203 ) 39 (96 ) Provision for income taxes $ 172 $ 250 $ 473 |
Geographic sources of income before income taxes | The geographic sources of Income (loss) before income taxes, inclusive of equity in loss of affiliate are as follows for the years ended December 31: 2017 2016 2015 U.S. $ (1,153 ) $ (440 ) $ (2,006 ) Foreign 982 1,024 1,848 Income (loss) before income taxes, inclusive of equity in loss of affiliate $ (171 ) $ 584 $ (158 ) |
Difference between provision and U.S. statutory tax rate | The benefit or provision for income taxes differs from the amount computed by applying the U.S. statutory income tax rate to the loss or income before income taxes for the reasons set forth below for the years ended December 31: 2017 2016 2015 Income (loss) before income taxes, inclusive of equity in loss of affiliate $ (171 ) $ 584 $ (158 ) Taxes at the U.S. federal statutory income tax rate (60 ) 205 (55 ) Effect of foreign operations (50 ) (5 ) (137 ) Tax impact of partnership structure 267 — — Tax impact of dispositions — 1 (26 ) Nondeductible goodwill — — 713 Change in valuation allowances 69 28 9 Tax Cuts and Jobs Act enactment (32 ) — — Other - net (22 ) 21 (31 ) Provision for income taxes $ 172 $ 250 $ 473 Actual income tax rate (100.6 )% 42.8 % (299.4 )% |
Deferred tax assets and liabilities | The tax effects of our temporary differences and carryforwards are as follows at December 31: 2017 2016 Deferred tax assets: Receivables $ 98 $ — Inventory 41 71 Property 143 — Employee benefits 64 154 Other accrued expenses 91 121 Operating loss carryforwards 1,376 142 Tax credit carryforwards 147 5 Other 230 — Total deferred income tax asset 2,190 493 Valuation allowances (1,822 ) (87 ) Total deferred income tax asset after valuation allowance 368 406 Deferred tax liabilities: Goodwill and other intangibles (202 ) (845 ) Property — (62 ) Undistributed earnings of foreign subsidiaries — (46 ) Other (51 ) (9 ) Total deferred income tax liability (253 ) (962 ) Net deferred tax asset (liability) $ 115 $ (556 ) |
Rollforward of unrecognized tax benefits and associated interest and penalties | The following table presents the changes in our gross unrecognized tax benefits included in the consolidated and combined statements of financial position. Asset / (Liability) 2017 2016 Balance at January 1 $ (94 ) $ (100 ) Balance acquired from Baker Hughes (326 ) — Additions for tax positions of the current year (13 ) (4 ) Additions for tax positions of prior years (19 ) — Reductions for tax positions of prior years 32 5 Settlements with tax authorities 14 — Lapse of statute of limitations 11 5 Balance at December 31 $ (395 ) $ (94 ) |
Members' Equity (Tables)
Members' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of common units | The following table presents the changes in number of common units outstanding (in thousands): Common Units Held by BHGE Common Units Held by GE Balance at December 31, 2016 — — Issue of units on business combination at July 3, 2017 427,709 717,111 Issue of units to BHGE under equity incentive plan 546 — Repurchase of common units (1) (6,047 ) (10,126 ) Balance at December 31, 2017 422,208 706,985 (1) On November 6, 2017, BHGE announced that its board of directors authorized us to repurchase up to $3 billion of our common units from BHGE and GE. During the three months ended December 31, 2017, we repurchased 16,173,202 units for total consideration of $501 million . |
Schedule of accumulated other comprehensive loss | The following table presents the changes in accumulated other comprehensive loss, net of tax: Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss Balance at December 31, 2015 $ — $ (1,384 ) $ (2 ) $ (146 ) $ (1,532 ) Other comprehensive loss before reclassifications — (423 ) (38 ) (12 ) (473 ) Amounts reclassified from accumulated other comprehensive loss — 1 37 88 126 Deferred taxes — (7 ) (22 ) (29 ) Other comprehensive income (loss) — (422 ) (8 ) 54 (376 ) Less: Other comprehensive income (loss) attributable to noncontrolling interests — (5 ) — (9 ) (14 ) Balance at December 31, 2016 — (1,801 ) (10 ) (83 ) (1,894 ) Other comprehensive income before reclassifications 41 7 8 45 101 Amounts reclassified from accumulated other comprehensive loss (39 ) — 7 1 (31 ) Deferred taxes 2 (10 ) (3 ) 9 (2 ) Other comprehensive income (loss) 4 (3 ) 12 55 68 Less: Other comprehensive income attributable to noncontrolling interests 1 — — 2 3 Less: Other adjustments — — — 13 13 Less: Activity related to noncontrolling interest — 15 — 17 $ 32 Balance at December 31, 2017 $ 3 $ (1,819 ) $ 2 $ (60 ) $ (1,874 ) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Assets and liabilities measured at fair value on a recurring basis | Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities. 2017 2016 Level 1 Level 2 Level 3 Net Balance Level 1 Level 2 Level 3 Net Balance Assets Derivatives $ — $ 150 $ — $ 150 $ — $ 318 $ — $ 318 Investment securities 81 8 304 393 — — — — Total assets 81 158 304 543 — 318 — 318 Liabilities Derivatives — (95 ) — (95 ) — (375 ) — (375 ) Total liabilities $ — $ (95 ) $ — $ (95 ) $ — $ (375 ) $ — $ (375 ) |
Changes in the fair value of assets | The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities: Balance at December 31, 2016 $ — Additions as a result of business combination 179 Purchases 186 Proceeds at maturity (62 ) Unrealized gains recognized in accumulated other comprehensive income (loss) 1 Balance at December 31, 2017 $ 304 |
Schedule of investment securities classified as available for sale | 2017 2016 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Investment securities Non-U.S. debt securities $ 310 $ 2 $ — $ 312 $ — $ — $ — $ — Equity securities 81 — — 81 1 — — 1 Total $ 391 $ 2 $ — $ 393 $ 1 $ — $ — $ 1 |
Schedule of derivatives | The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives. 2017 2016 Assets (Liabilities) Assets (Liabilities) Derivatives accounted for as hedges Currency exchange contracts $ 6 $ — $ 2 $ (9 ) Derivatives not accounted for as hedges Currency exchange contracts 144 (95 ) 316 (366 ) Total derivatives $ 150 $ (95 ) $ 318 $ (375 ) |
Carrying amount related to derivatives | The table below provides additional information about how derivatives are reflected in our consolidated and combined financial statements. Carrying amount related to derivatives 2017 2016 Derivative assets $ 150 $ 318 Derivative liabilities (95 ) (375 ) Net derivatives $ 55 $ (57 ) |
Carrying amount related to derivatives | The table below provides additional information about how derivatives are reflected in our consolidated and combined financial statements. Carrying amount related to derivatives 2017 2016 Derivative assets $ 150 $ 318 Derivative liabilities (95 ) (375 ) Net derivatives $ 55 $ (57 ) |
Effect of derivatives on earnings | The table below summarizes these offsets and the net effect on pre-tax earnings. 2017 2016 Cash flow hedges Economic hedges Cash flow hedges Economic hedges Effect on hedging instrument $ 8 $ 121 $ 38 $ (272 ) Effect on underlying (8 ) (152 ) (38 ) 102 Effect on earnings (1) — (31 ) — (170 ) (1) For cash flow hedges, the effect on earnings, if any, is primarily related to ineffectiveness. For economic hedges on forecasted transactions, effect on earnings is substantially offset by future earnings on economically hedged items. |
Schedule of hedging instrument, currency exchange contract | The table below summarizes this activity by hedging instrument. Gain (loss) recognized in AOCI Gain (loss) reclassified from AOCI to earnings 2017 2016 2017 2016 Currency exchange contracts $ 8 $ (38 ) $ (7 ) $ (37 ) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summarized financial information | Segment revenue 2017 2016 2015 Oilfield Services $ 5,851 $ 799 $ 1,411 Oilfield Equipment 2,637 3,547 5,060 Turbomachinery & Process Solutions 6,463 6,837 7,985 Digital Solutions 2,309 2,086 2,232 Total $ 17,259 $ 13,269 $ 16,688 The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and equity in loss of affiliate and before the following: net interest expense, net other non operating income (loss), corporate expenses, restructuring, impairment and other charges, inventory impairments, merger and related costs, goodwill impairments and certain gains and losses not allocated to the operating segments. Segment income (loss) before income taxes 2017 2016 2015 Oilfield Services $ 71 $ (204 ) $ (79 ) Oilfield Equipment 38 320 677 Turbomachinery & Process Solutions 853 1,255 1,684 Digital Solutions 333 355 409 Total segment 1,295 1,726 2,691 Corporate (373 ) (380 ) (260 ) Inventory impairment and related charges (1) (244 ) (138 ) (51 ) Restructuring, impairment and other (412 ) (516 ) (411 ) Goodwill impairment — — (2,080 ) Merger and related costs (373 ) (33 ) (27 ) Other non operating income (loss), net 78 27 100 Interest expense, net (131 ) (102 ) (120 ) Total $ (160 ) $ 584 $ (158 ) (1) Inventory impairments and related charges are reported in the "Cost of goods sold" caption of the consolidated and combined statements of income (loss). 2017 includes $87 million of adjustments to write-up the acquired inventory to its estimated fair value on acquisition of Baker Hughes as this inventory was used or sold in the six months ended December 31, 2017. |
Total assets by segment | The following table presents total assets by segment at December 31: Segments assets 2017 2016 Oilfield Services (1) $ 32,488 $ 4,046 Oilfield Equipment 7,682 8,744 Turbomachinery & Process Solutions 9,712 8,565 Digital Solutions 3,831 3,113 Total segment 53,713 24,468 Corporate and eliminations (2) 3,173 (2,747 ) Total $ 56,886 $ 21,721 (1) Goodwill acquired as a result of the Baker Hughes acquisition has been preliminarily allocated to Oilfield Services. See "Note 6. Goodwill and Other Intangible Assets" for further details. (2) Corporate and eliminations in total segment assets includes adjustments of intercompany investments and receivables that are reflected within the total assets of the four reportable segments. |
Segment depreciation and amortization | The following table presents depreciation and amortization by segment for the years ended December 31: Segment depreciation and amortization 2017 2016 2015 Oilfield Services $ 613 $ 132 $ 164 Oilfield Equipment 187 154 178 Turbomachinery & Process Solutions 174 186 138 Digital Solutions 119 78 50 Total Segment 1,093 550 530 Corporate 10 — — Total $ 1,103 $ 550 $ 530 |
Revenue based on location | The following tables present consolidated revenue based on the location to where the product is shipped or the services are performed for the years ended December 31, and net property, plant and equipment by its geographic location at December 31. Revenue 2017 2016 2015 U.S. $ 4,350 $ 3,164 $ 4,334 Non-U.S. 12,909 10,105 12,354 Total $ 17,259 $ 13,269 $ 16,688 Property, plant and equipment - net 2017 2016 2015 U.S. $ 4,054 $ 833 $ 954 Non-U.S. 2,905 1,492 1,600 Total $ 6,959 $ 2,325 $ 2,554 |
Restructuring, Impairment and40
Restructuring, Impairment and Other - (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Impairment and restructuring charges | The amount of costs not included in the reported segment results is as follows: 2017 2016 2015 Oilfield Services $ 187 $ 122 $ 183 Oilfield Equipment 114 52 32 Turbomachinery & Process Solutions 21 58 54 Digital Solutions 34 34 26 Corporate 29 27 19 Total $ 385 $ 293 $ 314 These costs were primarily related to product line terminations, plant closures and related expenses such as property, plant and equipment impairments, contract terminations and costs of assets' and employees' relocation, employee-related termination benefits, and other incremental costs that were a direct result of the restructuring plans. 2017 2016 2015 Property, plant & equipment, net $ 131 $ 93 $ 137 Employee-related termination expenses 186 111 103 Asset relocation costs 10 17 14 EHS remediation costs 9 20 17 Contract termination fees 26 37 26 Other incremental costs 23 15 17 Total $ 385 $ 293 $ 314 |
Supplementary Information (Tabl
Supplementary Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Guarantees and Product Warranties [Abstract] | |
Changes in liability for product warranties | An analysis of changes in the liability for product warranties are as follows: Balance at December 31, 2016, and 2015, respectively $ 74 $ 100 Provisions 37 29 Expenditures (44 ) (49 ) Other (1) 97 (6 ) Balance at December 31, 2017, and 2016, respectively $ 164 $ 74 (1) Includes an increase of $93 million in the year ended December 31, 2017 as a result of the Baker Hughes acquisition. |
Quarterly Data (Unaudited) (Tab
Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Quarterly Data (Unaudited) | (In millions, except per unit amounts) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year 2017 Revenue $ 3,111 $ 3,010 $ 5,375 $ 5,763 $ 17,259 Gross profit (1) 775 542 1,020 875 3,213 Restructuring, impairment and other (2) 42 59 191 119 412 Merger and related costs 66 85 159 63 373 Net income (loss) attributable to BHGE LLC 125 (16 ) (277 ) (182 ) (350 ) Cash distribution per common unit 0.17 0.18 0.35 2016 Revenue $ 3,407 $ 3,322 $ 3,024 $ 3,516 $ 13,269 Gross profit (1) 798 785 730 833 3,146 Restructuring, impairment and other (2) 147 228 77 64 516 Merger and related costs 5 3 2 23 33 Net income attributable to BHGE LLC 141 18 96 148 403 (1) Represents revenue less cost of sales and cost of services. (2) Restructuring, impairment and other costs associated with asset impairments, workforce reductions, facility closures and contract terminations recorded during 2017 and 2016. See "Note 16. Restructuring, Impairment and Other" for further discussion. |
Basis of Presentation and Sum43
Basis of Presentation and Summary of Significant Accounting Policies - (Details) $ in Millions | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($)Employeecountry | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jul. 03, 2017 |
Accounting Policies [Abstract] | |||||
Number of countries in which entity operates (more than) | country | 120 | ||||
Number of our employees | Employee | 64,000 | ||||
Business Acquisition [Line Items] | |||||
Research and development expenses | $ 501 | $ 352 | $ 408 | ||
Restricted cash and cash equivalents held in bank accounts | $ 1,190 | 752 | |||
GE Transaction Agreement | General Electric Company | |||||
Business Acquisition [Line Items] | |||||
Approximate interest to be acquired | 62.50% | 62.50% | |||
GE Transaction Agreement | Baker Hughes Incorporated | |||||
Business Acquisition [Line Items] | |||||
Approximate interest to be acquired | 37.50% | ||||
General Electric Company | |||||
Business Acquisition [Line Items] | |||||
Restricted cash and cash equivalents held in bank accounts | $ 764 | ||||
Related party amount, due to related party | GE | |||||
Business Acquisition [Line Items] | |||||
Cash | 997 | ||||
Accounting Standards Update 2016-16 | Pro Forma | |||||
Business Acquisition [Line Items] | |||||
Cumulative effect on retained earnings, before tax | $ 300 | ||||
Retained earnings | Accounting Standards Update 2014-09 | |||||
Business Acquisition [Line Items] | |||||
Cumulative effect on retained earnings, before tax | $ (100) | $ (100) | $ (400) |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Jul. 03, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Jul. 02, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||||||||||||
Cash dividends per unit (in dollars per unit) | $ 0.35 | |||||||||||||
Contribution received from GE | $ 7,400 | $ 0 | $ 0 | |||||||||||
Net income (loss) | $ (456) | $ 113 | (343) | 334 | (631) | |||||||||
Transaction related costs | $ 63 | $ 159 | $ 85 | $ 66 | $ 23 | $ 2 | $ 3 | $ 5 | 373 | 33 | $ 27 | |||
Termination fee, gross | 3,500 | |||||||||||||
Termination fee, net | 3,301 | |||||||||||||
General Electric Company | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Contribution received from GE | $ 7,400 | |||||||||||||
GE Transaction Agreement | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition remeasurement, goodwill | (366) | |||||||||||||
Acquisition remeasurement, PPE | 682 | |||||||||||||
Acquisition remeasurement, intangible assets | (367) | |||||||||||||
Acquisition remeasurement, depreciation and amortization expense | $ 63 | |||||||||||||
Revenues | 5,184 | |||||||||||||
Net income (loss) | $ 256 | $ (442) | $ (2,667) | |||||||||||
GE Transaction Agreement | Class A | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Approximate interest to be acquired | 100.00% | 100.00% | 100.00% | |||||||||||
GE Transaction Agreement | General Electric Company | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Approximate interest to be acquired | 62.50% | 62.50% | 62.50% | 62.50% | ||||||||||
GE Transaction Agreement | General Electric Company | Class B | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Approximate interest to be acquired | 62.50% | 62.50% | 62.50% | |||||||||||
GE Transaction Agreement | Baker Hughes Incorporated | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Approximate interest to be acquired | 37.50% | |||||||||||||
GE Transaction Agreement | Baker Hughes Incorporated | Class A | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Approximate interest to be acquired | 37.50% | 37.50% | 37.50% | |||||||||||
Special dividend | Class A | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash dividends per unit (in dollars per unit) | $ 17.50 | |||||||||||||
Baker Hughes, a GE Company (BHGE) | Common Stock | GE Transaction Agreement | Class A | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Issuance of common stock on business combination (in units) | 428 | |||||||||||||
General Electric Company | Common Stock | GE Transaction Agreement | General Electric Company | Class B | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Issuance of common stock on business combination (in units) | 717 |
Business Acquisition - Purchase
Business Acquisition - Purchase Price (Details) - GE Transaction Agreement $ / shares in Units, $ in Millions | Jul. 03, 2017USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Baker Hughes shares outstanding (in shares) | shares | 426,097,407 |
Restricted stock units vested at closing (in shares) | shares | 1,611,566 |
Baker Hughes share price on July 3, 2017 per share (in dollars per share) | $ / shares | $ 57.68 |
Total purchase consideration | $ 24,798 |
Options | |
Business Acquisition [Line Items] | |
Purchase consideration | 114 |
Restricted Stock Units (RSUs) | |
Business Acquisition [Line Items] | |
Purchase consideration | $ 14 |
Common Stock | |
Business Acquisition [Line Items] | |
Total Baker Hughes shares for purchase price consideration (in shares) | shares | 427,708,973 |
Purchase consideration | $ 24,670 |
Business Acquisition - Prelimin
Business Acquisition - Preliminary identifiable assets acquired and liabilities assumed (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Dec. 31, 2017 | Jul. 03, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Liabilities | ||||
Goodwill | $ 19,654 | $ 6,680 | $ 6,867 | |
Operating loss carryforwards | 1,376 | $ 142 | ||
GE Transaction Agreement | ||||
Assets | ||||
Cash and equivalents | $ 4,133 | |||
Current receivables | 2,383 | |||
Inventories (1) | 1,695 | |||
Property, plant and equipment | 4,868 | |||
Intangible assets (2) | 4,123 | |||
All other assets | 1,544 | |||
Liabilities | ||||
Accounts payable | (1,106) | |||
Borrowings | (3,370) | |||
Deferred income taxes (3) | (43) | |||
Liabilities for pension and other postretirement benefits | (655) | |||
All other liabilities | (1,476) | |||
Total identifiable net assets | 12,096 | |||
Noncontrolling interest associated with net assets acquired | (76) | |||
Goodwill | 12,778 | |||
Total purchase consideration | 24,798 | |||
Inventory adjustment, write-up | $ 87 | |||
Deferred tax assets | 160 | |||
Operating loss carryforwards | 117 | |||
Tax deductible goodwill | $ 67 |
Business Acquisition - Estimate
Business Acquisition - Estimated fair value and average life (Details) - USD ($) $ in Millions | Jul. 03, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Other intangible assets, net | $ 6,358 | $ 2,449 | |
GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Other intangible assets, net | $ 4,123 | ||
GE Transaction Agreement | Customer-related | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 1,260 | ||
Estimated Weighted Average Life (Years) | 15 years | ||
GE Transaction Agreement | Patents and technology | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 550 | ||
Estimated Weighted Average Life (Years) | 10 years | ||
GE Transaction Agreement | Trademarks - Other | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 70 | ||
Estimated Weighted Average Life (Years) | 10 years | ||
GE Transaction Agreement | Capitalized software | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 90 | ||
GE Transaction Agreement | Favorable lease contracts | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 8 | ||
Estimated Weighted Average Life (Years) | 10 years | ||
GE Transaction Agreement | Trademarks - Baker Hughes | |||
Business Acquisition [Line Items] | |||
Indefinite-lived Intangible Assets Acquired | $ 2,100 | ||
GE Transaction Agreement | In-process research and development | |||
Business Acquisition [Line Items] | |||
Indefinite-lived Intangible Assets Acquired | $ 45 | ||
Minimum | |||
Business Acquisition [Line Items] | |||
Estimated Weighted Average Life (Years) | 1 year | ||
Minimum | GE Transaction Agreement | Capitalized software | |||
Business Acquisition [Line Items] | |||
Estimated Weighted Average Life (Years) | 3 years | ||
Maximum | |||
Business Acquisition [Line Items] | |||
Estimated Weighted Average Life (Years) | 30 years | ||
Maximum | GE Transaction Agreement | Capitalized software | |||
Business Acquisition [Line Items] | |||
Estimated Weighted Average Life (Years) | 7 years |
Business Acquisition - Pro form
Business Acquisition - Pro forma (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Jul. 02, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||||
Net income (loss) | $ (456) | $ 113 | $ (343) | $ 334 | $ (631) |
GE Transaction Agreement | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, pro forma revenue | 21,921 | 23,102 | |||
Business acquisition, pro forma net income | (436) | (2,734) | |||
Net income (loss) | $ 256 | $ (442) | $ (2,667) |
Current Receivables (Details)
Current Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | $ 6,457 | $ 2,749 |
Less: Allowance for doubtful accounts | (330) | (186) |
Total current receivables, net | 6,127 | 2,563 |
Customer receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | 4,699 | 1,699 |
Related parties | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | 914 | |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | $ 844 | $ 658 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Inventory, Net [Abstract] | ||
Inventory valuation reserves | $ 360 | $ 260 |
Finished goods | 2,597 | 1,585 |
Work in process and raw materials | 1,993 | 1,639 |
Total inventories, net | 4,590 | 3,224 |
Inventory Impairment | $ 157 | $ 138 |
Property, Plant and Equipment51
Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 9,776 | $ 4,390 | |
Less: Accumulated depreciation | (2,817) | (2,065) | |
Property, plant and equipment, less accumulated depreciation | 6,959 | 2,325 | $ 2,554 |
Depreciation on property, plant and equipment | 720 | 310 | $ 350 |
Land and improvements (1) | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 413 | 130 | |
Buildings, structures and related equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 3,168 | 1,344 | |
Machinery, equipment and other | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 6,195 | $ 2,916 | |
Minimum | Land and improvements (1) | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 8 years | ||
Minimum | Buildings, structures and related equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Minimum | Machinery, equipment and other | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Maximum | Land and improvements (1) | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 20 years | ||
Maximum | Buildings, structures and related equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 40 years | ||
Maximum | Machinery, equipment and other | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 20 years |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | |||
Balance at December 31, 2015, gross | $ 10,621 | ||
Accumulated impairment at December 31, 2015 | (3,754) | ||
Goodwill [Roll Forward] | |||
Goodwill, net, beginning balance | $ 6,680 | $ 6,867 | |
Acquisitions and purchase accounting adjustments | 18 | ||
Currency exchange and others | 196 | (205) | |
Goodwill, acquired | 12,778 | ||
Goodwill, net, ending balance | 19,654 | 6,680 | |
Operating segments | Oilfield Services | |||
Goodwill [Line Items] | |||
Balance at December 31, 2015, gross | 2,885 | ||
Accumulated impairment at December 31, 2015 | (2,633) | ||
Goodwill [Roll Forward] | |||
Goodwill, net, beginning balance | 146 | 252 | |
Acquisitions and purchase accounting adjustments | |||
Currency exchange and others | 8 | (106) | |
Goodwill, acquired | 12,778 | ||
Goodwill, net, ending balance | 12,932 | 146 | |
Operating segments | Oilfield Equipment | |||
Goodwill [Line Items] | |||
Balance at December 31, 2015, gross | 3,840 | ||
Accumulated impairment at December 31, 2015 | (867) | ||
Goodwill [Roll Forward] | |||
Goodwill, net, beginning balance | 2,985 | 2,973 | |
Acquisitions and purchase accounting adjustments | 19 | ||
Currency exchange and others | 49 | (7) | |
Goodwill, acquired | 0 | ||
Goodwill, net, ending balance | 3,034 | 2,985 | |
Operating segments | Turbo-machinery & Process Solutions | |||
Goodwill [Line Items] | |||
Balance at December 31, 2015, gross | 1,853 | ||
Accumulated impairment at December 31, 2015 | 0 | ||
Goodwill [Roll Forward] | |||
Goodwill, net, beginning balance | 1,814 | 1,853 | |
Acquisitions and purchase accounting adjustments | (1) | ||
Currency exchange and others | 92 | (38) | |
Goodwill, acquired | 0 | ||
Goodwill, net, ending balance | 1,906 | 1,814 | |
Operating segments | Digital Solutions | |||
Goodwill [Line Items] | |||
Balance at December 31, 2015, gross | 2,043 | ||
Accumulated impairment at December 31, 2015 | $ (254) | ||
Goodwill [Roll Forward] | |||
Goodwill, net, beginning balance | 1,735 | 1,789 | |
Acquisitions and purchase accounting adjustments | |||
Currency exchange and others | 47 | (54) | |
Goodwill, acquired | 0 | ||
Goodwill, net, ending balance | $ 1,782 | $ 1,735 |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets - Schedule of Intangible Assets by Type (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 6,276 | $ 4,094 |
Finite-lived intangible assets, accumulated amortization | (2,115) | (1,697) |
Finite-lived intangible assets, net | 4,161 | 2,397 |
Indefinite-lived intangible assets | 2,197 | 52 |
Intangible assets, gross | 8,473 | 4,146 |
Other intangible assets, net | 6,358 | 2,449 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1,177 | 596 |
Finite-lived intangible assets, accumulated amortization | (440) | (371) |
Finite-lived intangible assets, net | 737 | 225 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 3,202 | 1,920 |
Finite-lived intangible assets, accumulated amortization | (819) | (660) |
Finite-lived intangible assets, net | 2,383 | 1,260 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1,130 | 896 |
Finite-lived intangible assets, accumulated amortization | (697) | (535) |
Finite-lived intangible assets, net | 433 | 361 |
Trade names and trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 757 | 681 |
Finite-lived intangible assets, accumulated amortization | (159) | (130) |
Finite-lived intangible assets, net | 598 | 551 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 10 | 1 |
Finite-lived intangible assets, accumulated amortization | 0 | (1) |
Finite-lived intangible assets, net | $ 10 | $ 0 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets - Schedule of Future Estimated Amortization Expense (Details) $ in Millions | Dec. 31, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,018 | $ 432 |
2,019 | 398 |
2,020 | 372 |
2,021 | 326 |
2,022 | $ 293 |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||
Number of reporting segments | segment | 4 | ||
Goodwill impairment | $ 0 | $ 0 | $ 2,080 |
Finite-lived intangible assets, period increase (decrease) | 1,764 | ||
Indefinite-lived intangible assets | 2,197 | 52 | |
Amortization expense for intangible assets included in net income | $ 387 | 239 | $ 179 |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated weighted average life (years) | 1 year | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated weighted average life (years) | 30 years | ||
GE Transaction Agreement | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense for intangible assets included in net income | $ 75 | ||
GE Transaction Agreement | Trademark | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $ 2,100 | ||
Vetco | Trademark | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | 42 | ||
Bently Nevada | Trademark | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $ 10 | ||
Income approach valuation technique | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Discount rates | 10.00% | ||
Income approach valuation technique | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Discount rates | 11.00% |
Contract Assets (Details)
Contract Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total revenue in excess of billings | $ 2,407 | $ 1,749 |
Deferred inventory costs (3) | 338 | 218 |
Contract assets | 2,745 | 1,967 |
Long-term product service agreements (1) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total revenue in excess of billings | 1,410 | 1,046 |
Long-term equipment contract revenue (2) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total revenue in excess of billings | $ 997 | $ 703 |
Borrowings - Short-term and lon
Borrowings - Short-term and long-term borrowings (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Capital leases, weighted average discount rate | 7.00% | 4.50% | |
Short-term borrowings | |||
Current portion of long-term borrowings | $ 639 | $ 34 | |
Total short-term borrowings | 2,037 | [1] | 239 |
Long-term borrowings | |||
Capital leases | 87 | 1 | |
Other long-term borrowings | 22 | 37 | |
Total long-term borrowings | 6,312 | 38 | |
Total debt | $ 8,349 | $ 277 | |
3.2% Senior Notes due August 2021 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 3.20% | ||
2.773% Senior Notes due December 2022 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 2.773% | ||
8.55% Debentures due June 2024 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 8.55% | ||
3.337% Senior Notes due December 2027 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 3.337% | ||
6.875% Notes due January 2029 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.875% | ||
5.125% Notes due September 2040 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.125% | ||
4.080% Senior Notes due December 2047 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 4.08% | ||
Other long-term borrowings | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 1.90% | 1.20% | |
Senior Notes | 3.2% Senior Notes due August 2021 | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 2.50% | ||
Long-term borrowings | |||
Long-term borrowings | $ 526 | $ 0 | |
Senior Notes | 2.773% Senior Notes due December 2022 | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 2.90% | ||
Long-term borrowings | |||
Long-term borrowings | $ 1,244 | 0 | |
Senior Notes | 3.337% Senior Notes due December 2027 | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 3.40% | ||
Long-term borrowings | |||
Long-term borrowings | $ 1,342 | 0 | |
Senior Notes | 6.875% Notes due January 2029 | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 3.90% | ||
Long-term borrowings | |||
Long-term borrowings | $ 308 | 0 | |
Senior Notes | 5.125% Notes due September 2040 | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 4.10% | ||
Long-term borrowings | |||
Long-term borrowings | $ 1,311 | 0 | |
Senior Notes | 4.080% Senior Notes due December 2047 | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 4.10% | ||
Long-term borrowings | |||
Long-term borrowings | $ 1,337 | 0 | |
Debentures | 8.55% Debentures due June 2024 | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 3.90% | ||
Long-term borrowings | |||
Long-term borrowings | $ 135 | $ 0 | |
Short-term bank borrowings | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 12.60% | 9.10% | |
Short-term borrowings | |||
Short-term borrowings | $ 171 | $ 79 | |
Current portion of long-term borrowings | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 2.10% | 1.30% | |
Short-term borrowings from GE | |||
Short-term borrowings | |||
Short-term borrowings | $ 1,124 | $ 121 | |
Other short-term borrowings | |||
Debt Instrument [Line Items] | |||
Weighted average rate | 7.60% | 1.30% | |
Short-term borrowings | |||
Short-term borrowings | $ 103 | $ 5 | |
[1] | Total assets include $1,124 million of assets held on behalf of GE, of which $997 million is cash and equivalents and $127 million is investment securities at December 31, 2017 and a corresponding amount of liability is reported in short-term borrowings. See "Note 14. Related Party Transactions" for further details. |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | Nov. 03, 2017 | Jul. 03, 2017 | Jan. 31, 2018 | Dec. 31, 2017 | Dec. 11, 2017 | Dec. 31, 2016 |
Line of Credit Facility [Line Items] | ||||||
Estimated fair value of debt | $ 8,466,000,000 | $ 303,000,000 | ||||
2017 Credit Agreement | Revolving credit facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, term | 5 years | |||||
Line of credit facility, maximum borrowing capacity | $ 3,000,000,000 | |||||
2.773% Senior Notes due December 2022 | ||||||
Line of Credit Facility [Line Items] | ||||||
Stated interest rate | 2.773% | |||||
3.337% Senior Notes due December 2027 | ||||||
Line of Credit Facility [Line Items] | ||||||
Stated interest rate | 3.337% | |||||
4.080% Senior Notes due December 2047 | ||||||
Line of Credit Facility [Line Items] | ||||||
Stated interest rate | 4.08% | |||||
8.55% Debentures due June 2024 | ||||||
Line of Credit Facility [Line Items] | ||||||
Stated interest rate | 8.55% | |||||
6.875% Notes due January 2029 | ||||||
Line of Credit Facility [Line Items] | ||||||
Stated interest rate | 6.875% | |||||
GE Transaction Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Business acquisition, step-up adjustment | $ 364,000,000 | |||||
BHGE LLC | 2017 Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Commercial paper, available for issuance | $ 3,000,000,000 | |||||
BHGE LLC | Commercial Paper | 2017 Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, term | 397 days | |||||
BHGE LLC | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt issuance costs | $ 26,000,000 | |||||
BHGE LLC | Senior Notes | 2.773% Senior Notes due December 2022 | ||||||
Line of Credit Facility [Line Items] | ||||||
Stated interest rate | 2.773% | |||||
BHGE LLC | Senior Notes | 3.337% Senior Notes due December 2027 | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, principal | $ 1,350,000,000 | |||||
Stated interest rate | 3.337% | |||||
BHGE LLC | Senior Notes | 4.080% Senior Notes due December 2047 | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, principal | $ 1,350,000,000 | |||||
Stated interest rate | 4.08% | |||||
Baker Hughes Co-Obligor, Inc. | BHGE LLC | ||||||
Line of Credit Facility [Line Items] | ||||||
Ownership percentage | 100.00% | |||||
Private Placement [Member] | BHGE LLC | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, principal | $ 3,950,000,000 | |||||
Debt instrument, repurchase amount | $ 793,000,000 | |||||
Private Placement [Member] | BHGE LLC | Senior Notes | 2.773% Senior Notes due December 2022 | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, principal | 1,250,000,000 | |||||
Private Placement [Member] | BHGE LLC | Senior Notes | 6.875% Senior Notes Due 2018 | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, principal | $ 82,000,000 | |||||
Stated interest rate | 7.50% | |||||
Private Placement [Member] | BHGE LLC | Senior Notes | 6.0% Senior Notes Due 2018 | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, principal | $ 25,000,000 | |||||
Stated interest rate | 6.00% | |||||
Private Placement [Member] | BHGE LLC | Senior Notes | 8.55% Debentures due June 2024 | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, principal | $ 6,000,000 | |||||
Stated interest rate | 8.55% | |||||
Private Placement [Member] | BHGE LLC | Senior Notes | 6.875% Notes due January 2029 | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, principal | $ 62,000,000 | |||||
Stated interest rate | 6.875% | |||||
Private Placement [Member] | Subsequent event | BHGE LLC | Senior Notes | Senior Notes Due 2018 | ||||||
Line of Credit Facility [Line Items] | ||||||
Payments for purchase of debts | $ 615,000,000 | |||||
Private Placement [Member] | Subsequent event | BHGE LLC | Senior Notes | 6.875% Notes due January 2029 | ||||||
Line of Credit Facility [Line Items] | ||||||
Stated interest rate | 6.875% | |||||
Payments for purchase of debts | $ 3,000,000 | |||||
Private Placement [Member] | Baker Hughes Co-Obligor, Inc. | BHGE LLC | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, principal | $ 3,950,000,000 |
Borrowings - Maturities of Debt
Borrowings - Maturities of Debt Schedule (Details) $ in Millions | Dec. 31, 2017USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2,018 | $ 2,037 |
2,019 | 43 |
2,020 | 13 |
2,021 | 540 |
2,022 | 1,255 |
Thereafter | $ 4,461 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)plan | Dec. 31, 2016USD ($)plan | Dec. 31, 2015USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Deficit contributions, present value | $ 15 | ||
Defined contribution plan, assets and corresponding liabilities | 278 | ||
Pension plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Multiemployer plan, contributions by employer | 132 | $ 140 | $ 148 |
Pension assets or obligation, threshold, per plan | 20 | ||
Curtailments | (45) | 0 | |
Future amortization of gain (loss) | 9 | ||
Fair values of the plan assets | 2,059 | 567 | 915 |
Employer contributions | 50 | 50 | |
Estimated future employer contributions in next fiscal year | 44 | ||
Pension plan | Fixed income and cash investment funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets | 658 | 49 | |
Other Postretirement Benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Curtailments | 5 | (1) | |
Future amortization of gain (loss) | 2 | ||
Future amortization of prior service cost (credit) | $ 5 | ||
Health care cost trend rate assumed next fiscal year | 6.81% | ||
Health care cost trend rate | 4.81% | ||
Fair values of the plan assets | $ 0 | 0 | $ 0 |
Employer contributions | 13 | 6 | |
Estimated future employer contributions in next fiscal year | 24 | ||
Fair value measured at NAV | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets | $ 1,684 | $ 228 | |
Fair value measured at NAV | Equity securities | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Percent of plan assets valued using NAV | 30.00% | 20.00% | |
Fair value measured at NAV | Fixed income and cash investment funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Percent of plan assets valued using NAV | 28.00% | 7.00% | |
Fair value measured at NAV | Alternative investments | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Percent of plan assets valued using NAV | 24.00% | 13.00% | |
Level 3 | Pension plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets | $ 86 | $ 25 | |
UNITED KINGDOM | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Number of retirement plans | plan | 2 | ||
U.S. | Pension plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Number of retirement plans | plan | 7 | ||
Foreign Plan [Member] | Pension plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Number of retirement plans | plan | 6 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Benefit Obligation and Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Benefits | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | $ 820 | $ 1,290 | |
Service cost | 37 | 18 | $ 24 |
Interest cost | 51 | 34 | 49 |
Plan amendment | 0 | 0 | |
Actuarial loss (gain) | 41 | 39 | |
Benefits paid | (65) | (39) | |
Curtailments | (45) | 0 | |
Settlements | (10) | 0 | |
Business acquisition (1) | 1,546 | 0 | |
Other (2) | (2) | (460) | |
Foreign currency translation adjustments | 45 | (62) | |
Benefit obligation at end of year | 2,418 | 820 | 1,290 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 567 | 915 | |
Actual return on plan assets | 152 | 43 | |
Employer contributions | 50 | 50 | |
Benefits paid | (65) | (39) | |
Settlements | (10) | 0 | |
Business acquisition (1) | 1,342 | 0 | |
Other (2) | (2) | (358) | |
Foreign currency translation adjustments | 25 | (44) | |
Fair value of plan assets at end of year | 2,059 | 567 | 915 |
Funded status - underfunded at end of year | (359) | (253) | |
Accumulated benefit obligation | 2,373 | 803 | |
Other Postretirement Benefits | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 117 | 136 | |
Service cost | 2 | 2 | 3 |
Interest cost | 6 | 5 | 6 |
Plan amendment | (23) | (5) | |
Actuarial loss (gain) | 0 | (14) | |
Benefits paid | (13) | (6) | |
Curtailments | 5 | (1) | |
Settlements | 0 | 0 | |
Business acquisition (1) | 93 | 0 | |
Other (2) | 0 | 0 | |
Foreign currency translation adjustments | 0 | 0 | |
Benefit obligation at end of year | 187 | 117 | 136 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 13 | 6 | |
Benefits paid | (13) | (6) | |
Settlements | 0 | 0 | |
Business acquisition (1) | 0 | 0 | |
Other (2) | 0 | 0 | |
Foreign currency translation adjustments | 0 | 0 | |
Fair value of plan assets at end of year | 0 | 0 | $ 0 |
Funded status - underfunded at end of year | (187) | (117) | |
Accumulated benefit obligation | $ 187 | $ 117 |
Employee Benefit Plans - Sche62
Employee Benefit Plans - Schedule of Amounts Recognized in the Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure | ||
Noncurrent liabilities | $ (1,172) | $ (519) |
Pension Benefits | ||
Defined Benefit Plan Disclosure | ||
Noncurrent assets | 46 | 0 |
Current liabilities | (10) | (4) |
Noncurrent liabilities | (395) | (249) |
Net amount recognized | (359) | (253) |
Other Postretirement Benefits | ||
Defined Benefit Plan Disclosure | ||
Noncurrent assets | 0 | 0 |
Current liabilities | (24) | (6) |
Noncurrent liabilities | (163) | (111) |
Net amount recognized | $ (187) | $ (117) |
Employee Benefit Plans - Sche63
Employee Benefit Plans - Schedule of Information for Plans with ABOs in Excess of Plan Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Pension Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Projected benefit obligation | $ 1,692 | $ 820 |
Accumulated benefit obligation | 1,647 | 803 |
Fair value of plan assets | 1,286 | 567 |
Other Postretirement Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Accumulated benefit obligation | $ 187 | $ 117 |
Employee Benefit Plans - Sche64
Employee Benefit Plans - Schedule of Components of Net Periodic Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 37 | $ 18 | $ 24 |
Interest cost | 51 | 34 | 49 |
Expected return on plan assets | (81) | (46) | (65) |
Amortization of prior service credit | 0 | 0 | 0 |
Amortization of net actuarial loss (gain) | 12 | 14 | 21 |
Curtailment / settlement loss (gain) | (45) | (26) | 4 |
Net periodic cost | (26) | (6) | 33 |
Curtailments | (45) | 0 | |
Other Postretirement Benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 2 | 2 | 3 |
Interest cost | 6 | 5 | 6 |
Expected return on plan assets | 0 | 0 | 0 |
Amortization of prior service credit | (3) | (2) | (1) |
Amortization of net actuarial loss (gain) | (2) | 0 | 1 |
Curtailment / settlement loss (gain) | 2 | (2) | (11) |
Net periodic cost | 5 | 3 | $ (2) |
Curtailments | $ 5 | $ (1) |
Employee Benefit Plans - Sche65
Employee Benefit Plans - Schedule of Assumptions Used for Benefit Obligation (Details) | Dec. 31, 2017 | Dec. 31, 2016 |
Pension Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Discount rate | 2.99% | 3.41% |
Rate of compensation increase | 3.82% | 4.09% |
Other Postretirement Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Discount rate | 3.32% | 4.00% |
Employee Benefit Plans - Sche66
Employee Benefit Plans - Schedule of Assumptions Used for Net Periodic Cost (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 3.24% | 3.83% | 3.69% |
Expected long-term return on plan assets | 6.26% | 6.86% | 6.91% |
Other Postretirement Benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 3.72% | 4.25% | 4.00% |
Employee Benefit Plans - Sche67
Employee Benefit Plans - Schedule of Impact of Change in Health Care Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Retirement Benefits [Abstract] | |
Effect of one percentage point increase on service and interest cost components | $ 854 |
Effect of one percentage point decrease on service and interest cost components | (685) |
Effect of one percentage point increase on postretirement welfare benefit obligation | 15,460 |
Effect of one percentage point decrease on postretirement welfare benefit obligation | $ (12,817) |
Employee Benefit Plans - Sche68
Employee Benefit Plans - Schedule of Reconciliation to Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Pension Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Net actuarial loss (gain) | $ 117 | $ 14 |
Net prior service credit | 0 | 0 |
Total | 117 | 14 |
Other Postretirement Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Net actuarial loss (gain) | (16) | (14) |
Net prior service credit | (25) | (3) |
Total | $ (41) | $ (17) |
Employee Benefit Plans - Sche69
Employee Benefit Plans - Schedule Fair Value of the Pension Assets (Details) - Pension Benefits - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets by asset category and by levels of fair value | $ 2,059 | $ 567 | $ 915 |
U.S. equity securities (1) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets by asset category and by levels of fair value | 207 | 122 | |
Global equity securities (1) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets by asset category and by levels of fair value | 551 | 149 | |
Fixed income and cash investment funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets by asset category and by levels of fair value | 658 | 49 | |
U.S. corporate | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets by asset category and by levels of fair value | 70 | 53 | |
Other debt securities | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets by asset category and by levels of fair value | 55 | 99 | |
Private equities | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets by asset category and by levels of fair value | 107 | 45 | |
Real estate | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets by asset category and by levels of fair value | 44 | 32 | |
Other investments (2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Fair values of the plan assets by asset category and by levels of fair value | $ 367 | $ 18 |
Employee Benefit Plans - Sche70
Employee Benefit Plans - Schedule of Future Expected Benefit Payments (Details) $ in Millions | Dec. 31, 2016USD ($) |
Pension Benefits | |
Defined Benefit Plan Disclosure | |
2,018 | $ 105 |
2,019 | 109 |
2,020 | 107 |
2,021 | 111 |
2,022 | 112 |
2023-2027 | 593 |
Other Postretirement Benefits | |
Defined Benefit Plan Disclosure | |
2,018 | 24 |
2,019 | 22 |
2,020 | 17 |
2,021 | 12 |
2,022 | 10 |
2023-2027 | $ 47 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)country | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Total Gross Unrecognized Tax Benefits | |||
Tax Cuts And Jobs Act Of 2017, incomplete accounting, change in tax rate, deferred tax asset, provisional income tax expense | $ 32 | ||
Increase (decrease) in tax credit carryforward | 142 | ||
Operating loss carryforwards | 1,376 | $ 142 | |
Valuation allowances | 1,822 | 87 | |
Valuation allowance, deferred tax asset, increase (decrease) | 1,736 | ||
Deferred tax assets, operating loss carryforwards, foreign | 192 | ||
Deferred tax liability not provided for temporary difference | 8,000 | ||
Tax liabilities for unrecognized tax benefits | 395 | $ 94 | $ 100 |
Interest accrued on income taxes for unrecognized tax benefits | 95 | ||
Penalties accrued on income taxes for unrecognized tax benefits | 53 | ||
Uncertain tax positions | 543 | ||
Unrecognized tax benefits that would impact effective tax rate | 522 | ||
Deferred tax asset that we did not prevail on all uncertain tax position | 21 | ||
Uncertain tax positions, liabilities | 105 | ||
Uncertain tax positions, assets | 2 | ||
Unrecognized tax benefits included in noncurrent portion of income tax liabilities | $ 288 | ||
Number of countries in which entity operates (more than) | country | 120 | ||
Indefinite foreign tax | |||
Total Gross Unrecognized Tax Benefits | |||
Deferred tax assets, tax credit carryforwards, foreign | $ 129 | ||
Other Tax | |||
Total Gross Unrecognized Tax Benefits | |||
Deferred tax assets, tax credit carryforwards | 18 | ||
Five year carryforward | |||
Total Gross Unrecognized Tax Benefits | |||
Operating loss carryforwards | $ 319 | ||
Expiration of operation loss carryforwards over the next 5 years | 5 years | ||
Six to twenty year carryforward | |||
Total Gross Unrecognized Tax Benefits | |||
Operating loss carryforwards | $ 293 | ||
Foreign Net Operating Loss | |||
Total Gross Unrecognized Tax Benefits | |||
Valuation allowances | 1,125 | ||
US And Foreign Tax Credit Carryforward | |||
Total Gross Unrecognized Tax Benefits | |||
Valuation allowances | 129 | ||
Other United States Net Operating Loss Tax Credit Carryforward | |||
Total Gross Unrecognized Tax Benefits | |||
Valuation allowances | 44 | ||
Other US And Foreign Deferred Tax Assets | |||
Total Gross Unrecognized Tax Benefits | |||
Valuation allowances | $ 524 | ||
Minimum | Six to twenty year carryforward | |||
Total Gross Unrecognized Tax Benefits | |||
Expiration of operation loss carryforwards over the next six to 20 years | 6 | ||
Maximum | Six to twenty year carryforward | |||
Total Gross Unrecognized Tax Benefits | |||
Expiration of operation loss carryforwards over the next six to 20 years | 20 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Provision (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
U.S. | $ (33) | $ (114) | $ 158 |
Foreign | 408 | 325 | 411 |
Total current | 375 | 211 | 569 |
Deferred: | |||
U.S. | (156) | 13 | (21) |
Foreign | (47) | 26 | (75) |
Total deferred | (203) | 39 | (96) |
Provision for income taxes | $ 172 | $ 250 | $ 473 |
Income Taxes - Schedule of Geog
Income Taxes - Schedule of Geographic Sources of Income before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (1,153) | $ (440) | $ (2,006) |
Foreign | 982 | 1,024 | 1,848 |
Income (loss) before income taxes, inclusive of equity in loss of affiliate | $ (171) | $ 584 | $ (158) |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Difference between Provision and U.S. Statutory Income Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income (loss) before income taxes, inclusive of equity in loss of affiliate | $ (171) | $ 584 | $ (158) |
Taxes at the U.S. federal statutory income tax rate | (60) | 205 | (55) |
Effect of foreign operations | (50) | (5) | (137) |
Tax impact of partnership structure | 267 | 0 | 0 |
Tax impact of dispositions | 0 | 1 | (26) |
Nondeductible goodwill | 0 | 0 | 713 |
Change in valuation allowances | 69 | 28 | 9 |
Tax Cuts and Jobs Act enactment | (32) | 0 | 0 |
Other - net | (22) | 21 | (31) |
Provision for income taxes | $ 172 | $ 250 | $ 473 |
Actual income tax rate | (100.60%) | 42.80% | (299.40%) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Receivables | $ 98 | $ 0 |
Inventory | 41 | 71 |
Property | 143 | 0 |
Employee benefits | 64 | 154 |
Other accrued expenses | 91 | 121 |
Operating loss carryforwards | 1,376 | 142 |
Tax credit carryforwards | 147 | 5 |
Other | 230 | 0 |
Total deferred income tax asset | 2,190 | 493 |
Valuation allowances | (1,822) | (87) |
Total deferred income tax asset after valuation allowance | 368 | 406 |
Deferred tax liabilities: | ||
Goodwill and other intangibles | (202) | (845) |
Property | 0 | (62) |
Undistributed earnings of foreign subsidiaries | 0 | (46) |
Other | (51) | (9) |
Total deferred income tax liability | (253) | (962) |
Net deferred tax asset (liability) | $ 115 | |
Net deferred tax asset (liability) | $ 556 |
Income Taxes - Schedule of Gros
Income Taxes - Schedule of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits at beginning of period | $ (94) | $ (100) |
Balance acquired from Baker Hughes | (326) | 0 |
Additions for tax positions of the current year | (13) | (4) |
Additions for tax positions of prior years | (19) | 0 |
Reductions for tax positions of prior years | 32 | 5 |
Settlements with tax authorities | 14 | 0 |
Lapse of statute of limitations | 11 | 5 |
Unrecognized tax benefits at end of period | $ (395) | $ (94) |
Members' Equity (Details)
Members' Equity (Details) - shares shares in Thousands | Dec. 31, 2017 | Jul. 03, 2017 | Dec. 31, 2016 |
Class of Stock [Line Items] | |||
Common units issued (in units) | 1,129,000 | 0 | |
GE Transaction Agreement | General Electric Company | |||
Class of Stock [Line Items] | |||
Approximate interest to be acquired | 62.50% | 62.50% | |
GE Transaction Agreement | Baker Hughes Incorporated | |||
Class of Stock [Line Items] | |||
Approximate interest to be acquired | 37.50% | ||
Baker Hughes, a GE Company (BHGE) | |||
Class of Stock [Line Items] | |||
Common units issued (in units) | 546 |
Members' Equity - Common Units
Members' Equity - Common Units (Details) - USD ($) | Jul. 03, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Nov. 06, 2017 |
Class of Stock [Line Items] | |||||
Common unit, outstanding, beginning balance | 0 | ||||
Common unit, outstanding, ending balance | 1,129,000,000 | 1,129,000,000 | 1,129,000,000 | ||
Common Units | |||||
Class of Stock [Line Items] | |||||
Common unit, outstanding, beginning balance | 0 | ||||
Repurchase of common units (in units) | (16,000,000) | ||||
Common unit, outstanding, ending balance | 1,129,000,000 | 1,129,000,000 | 1,129,000,000 | ||
Repurchase program, authorized amount | $ 3,000,000,000 | ||||
Repurchase program, units acquired (in units) | 16,173,202 | ||||
Repurchase program, units acquired, value | $ 501,000,000 | ||||
Common Units | Baker Hughes, a GE Company (BHGE) | |||||
Class of Stock [Line Items] | |||||
Common unit, outstanding, beginning balance | 0 | ||||
Issue of units to BHGE under equity incentive plan | 546,000 | ||||
Repurchase of common units (in units) | (6,047,000) | ||||
Common unit, outstanding, ending balance | 422,208,000 | 422,208,000 | 422,208,000 | ||
Common Units | General Electric Company | |||||
Class of Stock [Line Items] | |||||
Common unit, outstanding, beginning balance | 0 | ||||
Issue of units to BHGE under equity incentive plan | 0 | ||||
Repurchase of common units (in units) | (10,126,000) | ||||
Common unit, outstanding, ending balance | 706,985,000 | 706,985,000 | 706,985,000 | ||
Common Units | GE Transaction Agreement | Baker Hughes, a GE Company (BHGE) | |||||
Class of Stock [Line Items] | |||||
Issuance of common stock on business combination (in units) | 427,709,000 | ||||
Common Units | GE Transaction Agreement | General Electric Company | |||||
Class of Stock [Line Items] | |||||
Issuance of common stock on business combination (in units) | 717,111,000 |
Members' Equity - Accumulated O
Members' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Jul. 02, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | $ 14,855 | $ 14,855 | |||
Other comprehensive loss | $ 126 | (58) | 68 | $ (376) | $ (579) |
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 3 | (14) | (11) | ||
Less: Activity related to noncontrolling interest | (208) | ||||
Ending balance | 39,158 | 39,158 | 14,855 | ||
Investment Securities, Parent | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | 0 | 0 | 0 | ||
Ending balance | 3 | 3 | 0 | 0 | |
Investment Securities | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Other comprehensive loss before reclassifications | 41 | 0 | |||
Amounts reclassified from accumulated other comprehensive loss | (39) | 0 | |||
Deferred taxes | 2 | 0 | |||
Other comprehensive loss | 4 | 0 | |||
Investment Securities, Noncontrolling Interest | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 1 | 0 | |||
Less: Other adjustments | 0 | ||||
Less: Activity related to noncontrolling interest | 0 | ||||
Foreign Currency Translation Adjustment, Parent | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (1,801) | (1,801) | (1,384) | ||
Ending balance | (1,819) | (1,819) | (1,801) | (1,384) | |
Foreign Currency Translation Adjustments | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Other comprehensive loss before reclassifications | 7 | (423) | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | 1 | |||
Deferred taxes | (10) | ||||
Other comprehensive loss | (3) | (422) | |||
Foreign Currency Translation Adjustment, Noncontrolling Interest | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 0 | (5) | |||
Less: Other adjustments | 0 | ||||
Less: Activity related to noncontrolling interest | 15 | ||||
Cash Flow Hedges, Parent | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (10) | (10) | (2) | ||
Ending balance | 2 | 2 | (10) | (2) | |
Cash Flow Hedges | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Other comprehensive loss before reclassifications | 8 | (38) | |||
Amounts reclassified from accumulated other comprehensive loss | 7 | 37 | |||
Deferred taxes | (3) | (7) | |||
Other comprehensive loss | 12 | (8) | |||
Cash Flow Hedges, Noncontrolling Interest | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 0 | 0 | |||
Less: Other adjustments | 0 | ||||
Less: Activity related to noncontrolling interest | 0 | ||||
Benefit Plans, Parent | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (83) | (83) | (146) | ||
Ending balance | (60) | (60) | (83) | (146) | |
Benefit Plans | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Other comprehensive loss before reclassifications | 45 | (12) | |||
Amounts reclassified from accumulated other comprehensive loss | 1 | 88 | |||
Deferred taxes | 9 | (22) | |||
Other comprehensive loss | 55 | 54 | |||
Benefit Plans, Noncontrolling Interest | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 2 | (9) | |||
Less: Other adjustments | 13 | ||||
Less: Activity related to noncontrolling interest | 17 | ||||
Accumulated Other Comprehensive Loss | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning balance | (1,894) | (1,894) | (1,532) | ||
Other comprehensive loss | 127 | $ (62) | (362) | (568) | |
Less: Activity related to noncontrolling interest | (32) | ||||
Ending balance | $ (1,874) | (1,874) | (1,894) | $ (1,532) | |
Accumulated Other Comprehensive Loss | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Other comprehensive loss before reclassifications | 101 | (473) | |||
Amounts reclassified from accumulated other comprehensive loss | (31) | 126 | |||
Deferred taxes | (2) | (29) | |||
Other comprehensive loss | 68 | (376) | |||
Accumulated Other Comprehensive Income (Loss), Noncontrolling Interest | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | 3 | $ (14) | |||
Less: Other adjustments | 13 | ||||
Less: Activity related to noncontrolling interest | $ 32 |
Financial Instruments - Recurri
Financial Instruments - Recurring fair value measurements (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 150 | $ 318 |
Assets, fair value | 150 | 318 |
Derivative liabilities | (95) | (375) |
Liabilities, fair value | (95) | (375) |
Fair value, measurements, recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 150 | 318 |
Investment securities | 393 | 0 |
Assets, fair value | 543 | 318 |
Derivative liabilities | (95) | (375) |
Liabilities, fair value | (95) | (375) |
Fair value, measurements, recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Investment securities | 81 | 0 |
Assets, fair value | 81 | 0 |
Derivative liabilities | 0 | 0 |
Liabilities, fair value | 0 | 0 |
Fair value, measurements, recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 150 | 318 |
Investment securities | 8 | 0 |
Assets, fair value | 158 | 318 |
Derivative liabilities | (95) | (375) |
Liabilities, fair value | (95) | (375) |
Fair value, measurements, recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Investment securities | 304 | 0 |
Assets, fair value | 304 | 0 |
Derivative liabilities | 0 | 0 |
Liabilities, fair value | $ 0 | $ 0 |
Financial Instruments - Reconci
Financial Instruments - Reconciliation of recurring Level 3 fair value measurements (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Beginning balance | $ 0 |
Additions as a result of business combination | 179 |
Purchases | 186 |
Proceeds at maturity | (62) |
Unrealized gains recognized in accumulated other comprehensive income (loss) | 1 |
Ending balance | $ 304 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, notional amount | $ 10,200 | $ 7,100 |
Derivative, notional amount, net | $ 3,300 | $ 600 |
Cash flow hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, term | 3 years | 2 years |
GE | Related party amount, due to related party | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Investment securities | $ 127 |
Financial Instruments - Investm
Financial Instruments - Investment Securities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, amortized cost | $ 391 | $ 1 |
Available-for-sale, gross unrealized gains | 2 | 0 |
Available-for-sale, gross unrealized losses | 0 | 0 |
Available-for-sale, estimated fair value | 393 | 1 |
Non-U.S. debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, amortized cost | 310 | 0 |
Available-for-sale, gross unrealized gains | 2 | 0 |
Available-for-sale, gross unrealized losses | 0 | 0 |
Available-for-sale, estimated fair value | 312 | 0 |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, amortized cost | 81 | 1 |
Available-for-sale, gross unrealized gains | 0 | 0 |
Available-for-sale, gross unrealized losses | 0 | 0 |
Available-for-sale, estimated fair value | $ 81 | $ 1 |
Financial Instruments - Derivat
Financial Instruments - Derivatives and hedging (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Assets, fair value | $ 150 | $ 318 |
Liabilities, fair value | (95) | (375) |
Currency exchange contracts | Derivatives accounted for as hedges | ||
Derivatives, Fair Value [Line Items] | ||
Assets, fair value | 6 | 2 |
Liabilities, fair value | 0 | (9) |
Currency exchange contracts | Derivatives not accounted for as hedges | ||
Derivatives, Fair Value [Line Items] | ||
Assets, fair value | 144 | 316 |
Liabilities, fair value | $ (95) | $ (366) |
Financial Instruments - Deriv85
Financial Instruments - Derivatives (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative assets | $ 150 | $ 318 |
Derivative liabilities | (95) | (375) |
Net derivatives | $ 55 | $ (57) |
Financial Instruments - Hedges
Financial Instruments - Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivatives accounted for as hedges | Cash flow hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Effect on hedging instrument | $ 8 | $ 38 |
Effect on underlying | (8) | (38) |
Effect on earnings (1) | 0 | 0 |
Not designated as hedging instrument, economic hedge | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Effect on hedging instrument | 121 | (272) |
Effect on underlying | (152) | 102 |
Effect on earnings (1) | $ (31) | $ (170) |
Financial Instruments - Cash fl
Financial Instruments - Cash flow hedges (Details) - Cash flow hedges - Currency exchange contracts - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in AOCI | $ 8 | $ (38) |
Gain (loss) reclassified from AOCI to earnings | $ (7) | $ (37) |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 4 |
Segment Information - Operating
Segment Information - Operating profit (loss) by segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summarized financial information [Abstract] | ||||||||||||
Revenue | $ 5,763 | $ 5,375 | $ 3,010 | $ 3,111 | $ 3,516 | $ 3,024 | $ 3,322 | $ 3,407 | $ 17,259 | $ 13,269 | $ 16,688 | |
Income (loss) before income taxes and equity in loss of affiliate | (160) | 584 | (158) | |||||||||
Inventory impairment and related charges (1) | (157) | (138) | ||||||||||
Goodwill impairment | 0 | 0 | 2,080 | |||||||||
Merger and related costs | $ (63) | $ (159) | $ (85) | $ (66) | $ (23) | $ (2) | $ (3) | $ (5) | (373) | (33) | (27) | |
Other non operating income, net | 78 | 27 | 100 | |||||||||
Interest expense, net | (131) | (102) | (120) | |||||||||
Operating segments | ||||||||||||
Summarized financial information [Abstract] | ||||||||||||
Revenue | 17,259 | 13,269 | 16,688 | |||||||||
Income (loss) before income taxes and equity in loss of affiliate | 1,295 | 1,726 | 2,691 | |||||||||
Corporate | ||||||||||||
Summarized financial information [Abstract] | ||||||||||||
Income (loss) before income taxes and equity in loss of affiliate | (373) | (380) | (260) | |||||||||
Segment reconciling items | ||||||||||||
Summarized financial information [Abstract] | ||||||||||||
Inventory impairment and related charges (1) | (244) | (138) | (51) | |||||||||
Restructuring, impairment and other | (412) | (516) | (411) | |||||||||
Goodwill impairment | 0 | 0 | (2,080) | |||||||||
Merger and related costs | (373) | (33) | (27) | |||||||||
Other non operating income, net | 78 | 27 | 100 | |||||||||
Interest expense, net | (131) | (102) | (120) | |||||||||
Oilfield Services | Operating segments | ||||||||||||
Summarized financial information [Abstract] | ||||||||||||
Revenue | 5,851 | 799 | 1,411 | |||||||||
Income (loss) before income taxes and equity in loss of affiliate | 71 | (204) | (79) | |||||||||
Oilfield Equipment | Operating segments | ||||||||||||
Summarized financial information [Abstract] | ||||||||||||
Revenue | 2,637 | 3,547 | 5,060 | |||||||||
Income (loss) before income taxes and equity in loss of affiliate | 38 | 320 | 677 | |||||||||
Turbo-machinery & Process Solutions | Operating segments | ||||||||||||
Summarized financial information [Abstract] | ||||||||||||
Revenue | 6,463 | 6,837 | 7,985 | |||||||||
Income (loss) before income taxes and equity in loss of affiliate | 853 | 1,255 | 1,684 | |||||||||
Digital Solutions | Operating segments | ||||||||||||
Summarized financial information [Abstract] | ||||||||||||
Revenue | 2,309 | 2,086 | 2,232 | |||||||||
Income (loss) before income taxes and equity in loss of affiliate | $ 333 | $ 355 | $ 409 | |||||||||
GE Transaction Agreement | ||||||||||||
Summarized financial information [Abstract] | ||||||||||||
Inventory adjustment, write-up | $ 87 |
Segment Information - Assets by
Segment Information - Assets by segment (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 56,886 | $ 21,721 |
Number of operating segments | segment | 4 | |
Operating segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 53,713 | 24,468 |
Operating segments | Oilfield Services | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 32,488 | 4,046 |
Operating segments | Oilfield Equipment | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 7,682 | 8,744 |
Operating segments | Turbo-machinery & Process Solutions | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 9,712 | 8,565 |
Operating segments | Digital Solutions | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 3,831 | 3,113 |
Corporate and eliminations (2) | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 3,173 | $ (2,747) |
Segment Information - Schedule
Segment Information - Schedule of Summarized Financial Information for CAPEX and DD&A (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information | |||
Depreciation and amortization | $ 1,103 | $ 550 | $ 530 |
Operating segments | |||
Segment Reporting Information | |||
Depreciation and amortization | 1,093 | 550 | 530 |
Operating segments | Oilfield Services | |||
Segment Reporting Information | |||
Depreciation and amortization | 613 | 132 | 164 |
Operating segments | Oilfield Equipment | |||
Segment Reporting Information | |||
Depreciation and amortization | 187 | 154 | 178 |
Operating segments | Turbo-machinery & Process Solutions | |||
Segment Reporting Information | |||
Depreciation and amortization | 174 | 186 | 138 |
Operating segments | Digital Solutions | |||
Segment Reporting Information | |||
Depreciation and amortization | 119 | 78 | 50 |
Corporate | |||
Segment Reporting Information | |||
Depreciation and amortization | $ 10 | $ 0 | $ 0 |
Segment Information - Schedul92
Segment Information - Schedule of Revenue and Net PP&E by Geographic Location (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue from geographic segments | |||||||||||
Revenue | $ 5,763 | $ 5,375 | $ 3,010 | $ 3,111 | $ 3,516 | $ 3,024 | $ 3,322 | $ 3,407 | $ 17,259 | $ 13,269 | $ 16,688 |
Property, plant and equipment, less accumulated depreciation | 6,959 | 2,325 | 6,959 | 2,325 | 2,554 | ||||||
U.S. | |||||||||||
Revenue from geographic segments | |||||||||||
Revenue | 4,350 | 3,164 | 4,334 | ||||||||
Property, plant and equipment, less accumulated depreciation | 4,054 | 833 | 4,054 | 833 | 954 | ||||||
Non-U.S. | |||||||||||
Revenue from geographic segments | |||||||||||
Revenue | 12,909 | 10,105 | 12,354 | ||||||||
Property, plant and equipment, less accumulated depreciation | $ 2,905 | $ 1,492 | $ 2,905 | $ 1,492 | $ 1,600 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions | Jul. 03, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||||
Total current receivables, gross | $ 6,457 | $ 2,749 | ||
Current receivables, related party | 113 | |||
Income tax obligation | $ 172 | 250 | $ 473 | |
GE Transaction Agreement | General Electric Company | ||||
Related Party Transaction [Line Items] | ||||
Percentage of tax benefits | 100.00% | |||
Approximate interest to be acquired | 62.50% | 62.50% | ||
GE Transaction Agreement | Baker Hughes Incorporated | ||||
Related Party Transaction [Line Items] | ||||
Approximate interest to be acquired | 37.50% | |||
Sales of products and services, GE and its affiliates | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | $ 639 | 374 | 329 | |
Purchases, GE and its affiliates | ||||
Related Party Transaction [Line Items] | ||||
Related party purchases | 1,512 | 978 | 1,225 | |
Amounts Factored Through Monetization Program | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable, related party | 116 | 198 | ||
WCS and GEAR | ||||
Related Party Transaction [Line Items] | ||||
Due from related parties | 225 | 2,168 | ||
Interest expense and finance charges | 59 | 91 | 93 | |
GE Capital accounts payable program | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable, related party | 293 | 104 | ||
Accounts Payable, GE and its affiliates | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable, related party | 575 | 228 | ||
GE | ||||
Related Party Transaction [Line Items] | ||||
Cash repayment, threshold | $ 100 | |||
GE | GE’s corporate overhead | ||||
Related Party Transaction [Line Items] | ||||
Selling, general and administrative expenses, agreement | $ 55 | |||
GE | Services, GE and its affiliates | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction | 28 | |||
GE | Intercompany service agreement | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction | 103 | 210 | $ 180 | |
GE | Related party amount, due to related party | ||||
Related Party Transaction [Line Items] | ||||
Cash held on behalf of GE | 1,124 | |||
Cash | 997 | |||
Cash and cash equivalents | $ 127 | |||
Class B | GE Transaction Agreement | General Electric Company | ||||
Related Party Transaction [Line Items] | ||||
Approximate interest to be acquired | 62.50% | |||
Class A | GE Transaction Agreement | ||||
Related Party Transaction [Line Items] | ||||
Approximate interest to be acquired | 100.00% | |||
Class A | GE Transaction Agreement | Baker Hughes Incorporated | ||||
Related Party Transaction [Line Items] | ||||
Approximate interest to be acquired | 37.50% | |||
U.S. and Foreign Authorities | General Electric Company | ||||
Related Party Transaction [Line Items] | ||||
Income tax obligation | $ 33 | |||
Related parties | ||||
Related Party Transaction [Line Items] | ||||
Total current receivables, gross | 914 | |||
Related parties | GE accounts receivable | ||||
Related Party Transaction [Line Items] | ||||
Total current receivables, gross | $ 801 | $ 392 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies - Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Minimum annual rental commitments, net of amounts due under subleases | |||
Net amount due in year one | $ 156 | ||
Net amount due in year two | 119 | ||
Net amount due in year three | 95 | ||
Net amount due in year four | 76 | ||
Net amount due in year five | 54 | ||
Net amount due thereafter | 188 | ||
Rent expense | $ 360 | $ 200 | $ 206 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands, € in Millions | Jan. 01, 2018USD ($) | Feb. 17, 2017USD ($) | Aug. 03, 2016USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($)shares |
Loss Contingencies [Line Items] | |||||
Total, off-balance sheet liability | $ 3,400,000 | ||||
Purchase obligation, within next twelve months | 962,000 | ||||
Purchase obligation, year two | 45,000 | ||||
Purchase obligation, year three | 42,000 | ||||
Purchase obligation, year four | 36,000 | ||||
Purchase obligation, year five | 23,000 | ||||
Purchase obligation, thereafter | $ 13,000 | ||||
Equipment failure | Pending litigation | Natural Gas Storage System in Northern Germany | |||||
Loss Contingencies [Line Items] | |||||
Damages sought | $ 224,000 | ||||
Marginal rate on annual prime rate (percent) | 5.00% | ||||
Breach of contract | Pending litigation | Saniteq LLC v. GE Infrastructure Sensing, Inc. | |||||
Loss Contingencies [Line Items] | |||||
Damages sought | $ 500,000 | ||||
Damage from fire | Pending litigation | INOES and Naphtachimie | |||||
Loss Contingencies [Line Items] | |||||
Damages sought | € | € 195 | ||||
GE Transaction Agreement | Pending litigation | |||||
Loss Contingencies [Line Items] | |||||
Common stock, shares outstanding, appraisal rights (in shares) | shares | 1,875,000 | ||||
Subsequent event | |||||
Loss Contingencies [Line Items] | |||||
Environmental proposed penalty | $ 130 |
Restructuring, Impairment and96
Restructuring, Impairment and Other - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |||||||||||
Restructuring, impairment and other | $ 119 | $ 191 | $ 59 | $ 42 | $ 64 | $ 77 | $ 228 | $ 147 | $ 412 | $ 516 | $ 411 |
Restructuring charges | 385 | 293 | 314 | ||||||||
Estimated remaining charges | $ 150 | 150 | |||||||||
Restructuring, impairment and other charges | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Other asset impairment charges and foreign currency translation gain (loss), realized | 27 | 223 | 97 | ||||||||
Currency gain (loss) | $ (12) | $ (138) | $ (63) |
Restructuring, Impairment and97
Restructuring, Impairment and Other - Schedule of Restructuring Charges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | $ 385 | $ 293 | $ 314 |
Property, plant & equipment, net | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | 131 | 93 | 137 |
Employee-related termination expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | 186 | 111 | 103 |
Asset relocation costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | 10 | 17 | 14 |
EHS remediation costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | 9 | 20 | 17 |
Contract termination fees | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | 26 | 37 | 26 |
Other incremental costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | 23 | 15 | 17 |
Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | 29 | 27 | 19 |
Oilfield Services | Operating segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | 187 | 122 | 183 |
Oilfield Equipment | Operating segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | 114 | 52 | 32 |
Turbo-machinery & Process Solutions | Operating segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | 21 | 58 | 54 |
Digital Solutions | Operating segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | $ 34 | $ 34 | $ 26 |
Supplementary Information (Deta
Supplementary Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||
Other current liabilities, employee related | $ 881 | $ 318 |
Product warranties, beginning balance | 74 | 100 |
Provisions | 37 | 29 |
Expenditures | (44) | (49) |
Other (1) | 97 | (6) |
Product warranties, ending balance | 164 | $ 74 |
GE Transaction Agreement | ||
Restructuring Cost and Reserve [Line Items] | ||
Other (1) | $ 93 |
Quarterly Data (Unaudited) (Det
Quarterly Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | $ 5,763 | $ 5,375 | $ 3,010 | $ 3,111 | $ 3,516 | $ 3,024 | $ 3,322 | $ 3,407 | $ 17,259 | $ 13,269 | $ 16,688 | |
Gross profit | 875 | 1,020 | 542 | 775 | 833 | 730 | 785 | 798 | 3,213 | 3,146 | ||
Restructuring, impairment and other | 119 | 191 | 59 | 42 | 64 | 77 | 228 | 147 | 412 | 516 | 411 | |
Merger and related costs | 63 | 159 | 85 | 66 | 23 | 2 | 3 | 5 | 373 | 33 | 27 | |
Net income (loss) attributable to Baker Hughes, a GE company, LLC | $ (182) | $ (277) | $ (16) | $ 125 | $ 148 | $ 96 | $ 18 | $ 141 | $ (350) | $ 403 | $ (606) | |
Cash dividends per unit (in dollars per unit) | $ 0.35 | |||||||||||
Cash dividend | ||||||||||||
Cash dividends per unit (in dollars per unit) | $ 0.18 | $ 0.17 | $ 0.35 |
Uncategorized Items - bhi-20171
Label | Element | Value |
Noncontrolling Interest, Increase from Subsidiary Equity Issuance | us-gaap_NoncontrollingInterestIncreaseFromSubsidiaryEquityIssuance | $ 4,000,000 |
Contribution from Parent | bhi_ContributionfromParent | 7,400,000,000 |
Parent Net Investment, Changes, Increase (Decrease) | bhi_ParentNetInvestmentChangesIncreaseDecrease | 873,000,000 |
Partners' Capital Account, Treasury Units, Purchased | us-gaap_PartnersCapitalAccountTreasuryUnitsPurchases | 501,000,000 |
Stockholders' Equity, Other | us-gaap_StockholdersEquityOther | (37,000,000) |
Member Units [Member] | ||
Noncontrolling Interest, Period Increase (Decrease) | us-gaap_MinorityInterestPeriodIncreaseDecrease | (56,000,000) |
Partners' Capital Account, Treasury Units, Purchased | us-gaap_PartnersCapitalAccountTreasuryUnitsPurchases | 501,000,000 |
Stockholders' Equity, Other | us-gaap_StockholdersEquityOther | (37,000,000) |
Noncontrolling Interest [Member] | ||
Noncontrolling Interest, Increase from Subsidiary Equity Issuance | us-gaap_NoncontrollingInterestIncreaseFromSubsidiaryEquityIssuance | 4,000,000 |
Noncontrolling Interest, Period Increase (Decrease) | us-gaap_MinorityInterestPeriodIncreaseDecrease | (117,000,000) |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 4,000,000 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 3,000,000 |
Other Comprehensive Income (Loss), Net of Tax | us-gaap_OtherComprehensiveIncomeLossNetOfTax | 4,000,000 |
Other Comprehensive Income (Loss), Net of Tax | us-gaap_OtherComprehensiveIncomeLossNetOfTax | (1,000,000) |
Retained Earnings [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | (459,000,000) |
Parent [Member] | ||
Contribution from Parent | bhi_ContributionfromParent | 7,400,000,000 |
Parent Net Investment, Changes, Increase (Decrease) | bhi_ParentNetInvestmentChangesIncreaseDecrease | 886,000,000 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 109,000,000 |
AOCI Attributable to Parent [Member] | ||
Parent Net Investment, Changes, Increase (Decrease) | bhi_ParentNetInvestmentChangesIncreaseDecrease | (13,000,000) |
Cash Dividend [Member] | ||
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | 406,000,000 |
Cash Dividend [Member] | Member Units [Member] | ||
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | 406,000,000 |
Special Dividend [Member] | ||
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | 7,498,000,000 |
Special Dividend [Member] | Member Units [Member] | ||
Dividends, Common Stock, Cash | us-gaap_DividendsCommonStockCash | 7,498,000,000 |
Baker Hughes, a GE Company (BHGE) [Member] | ||
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | $ 24,874,000,000 |
Baker Hughes, a GE Company (BHGE) [Member] | Member Units [Member] | ||
Stock Issued During Period, Shares, Acquisitions | us-gaap_StockIssuedDuringPeriodSharesAcquisitions | 428,000,000 |
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | $ 24,798,000,000 |
Baker Hughes, a GE Company (BHGE) [Member] | Noncontrolling Interest [Member] | ||
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | 76,000,000 |
General Electric Company [Member] | ||
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | $ 0 |
General Electric Company [Member] | Member Units [Member] | ||
Stock Issued During Period, Shares, Acquisitions | us-gaap_StockIssuedDuringPeriodSharesAcquisitions | 717,000,000 |
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | $ 24,977,000,000 |
General Electric Company [Member] | Parent [Member] | ||
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | $ (24,977,000,000) |