Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 18, 2018 | |
Document Information [Line Items] | ||
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-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Shares Outstanding | 0 |
Condensed Consolidated and Comb
Condensed Consolidated and Combined Statements of Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Sales of goods | $ 3,160 | $ 2,239 |
Sales of services | 2,239 | 825 |
Total revenue | 5,399 | 3,064 |
Costs and expenses: | ||
Cost of goods sold | 2,800 | 1,846 |
Cost of services sold | 1,758 | 532 |
Selling, general and administrative expenses | 674 | 492 |
Restructuring, impairment and other | 162 | 42 |
Merger and related costs | 46 | 66 |
Total costs and expenses | 5,440 | 2,978 |
Operating income (loss) | (41) | 86 |
Other non operating income, net | 2 | 8 |
Interest expense, net | (46) | (20) |
Income (loss) before income taxes and equity in loss of affiliate | (85) | 74 |
Equity in loss of affiliate | (20) | 0 |
Provision for income taxes | (38) | (8) |
Net income (loss) | (143) | 66 |
Less: Net loss attributable to noncontrolling interests | 0 | (2) |
Net income (loss) attributable to Baker Hughes, a GE company, LLC | $ (143) | $ 68 |
Common Class A | Cash Dividend | ||
Earnings Per Share, Basic and Diluted [Abstract] | ||
Cash dividends per share (in dollars per share) | $ 0.18 |
Condensed Consolidated and Com3
Condensed Consolidated and Combined Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (143) | $ 66 |
Less: Net loss attributable to noncontrolling interests | 0 | (2) |
Net income (loss) attributable to Baker Hughes, a GE company, LLC | (143) | 68 |
Other comprehensive income (loss): | ||
Investment securities | 0 | 26 |
Foreign currency translation adjustments | 312 | 46 |
Cash flow hedges | 7 | 4 |
Benefit plans | (3) | (1) |
Other comprehensive income | 316 | 75 |
Less: Other comprehensive income attributable to noncontrolling interests | 0 | 2 |
Other comprehensive income attributable to Baker Hughes, a GE company, LLC | 316 | 73 |
Comprehensive income | 173 | 141 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to Baker Hughes, a GE company, LLC | $ 173 | $ 141 |
Condensed Consolidated and Com4
Condensed Consolidated and Combined Statements of Financial Position (Unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | |
Current assets: | |||
Cash, cash equivalents and restricted cash (1) | [1] | $ 5,614 | $ 7,026 |
Current receivables, net | 5,987 | 6,128 | |
Inventories, net | 4,696 | 4,507 | |
All other current assets | 862 | 872 | |
Total current assets | 17,159 | 18,533 | |
Property, plant and equipment (net of accumulated depreciation of $3,049 and $2,817) | 6,593 | 6,959 | |
Goodwill | 20,159 | 19,654 | |
Other intangible assets, net | 6,203 | 6,358 | |
Contract and other deferred assets | 1,931 | 2,044 | |
All other assets | 1,718 | 2,073 | |
Deferred income taxes | 1,287 | 715 | |
Total assets (1) | 55,050 | 56,336 | |
Current liabilities: | |||
Accounts payable | 3,429 | 3,377 | |
Short-term debt and current portion of long-term debt (1) | [1] | 1,176 | 2,037 |
Progress collections and deferred income | 1,676 | 1,775 | |
All other current liabilities | 2,035 | 2,046 | |
Total current liabilities | 8,316 | 9,235 | |
Long-term debt | 6,296 | 6,312 | |
Deferred income taxes | 388 | 332 | |
Liabilities for pensions and other postretirement benefits | 1,172 | 1,172 | |
All other liabilities | 909 | 889 | |
Members' equity: | |||
Members' capital (common units 1,113 & 1,129, issued and outstanding as of March 31, 2018 and December 31, 2017, respectively) | 40,012 | 40,678 | |
Retained loss | (617) | (541) | |
Accumulated other comprehensive loss | (1,565) | (1,881) | |
Baker Hughes, a GE company, LLC members' equity | 37,830 | 38,256 | |
Noncontrolling interests | 139 | 140 | |
Total equity | 37,969 | 38,396 | |
Total liabilities and equity | $ 55,050 | $ 56,336 | |
[1] | Total assets include $992 million and $1,124 million of assets held on behalf of GE, of which $836 million and $997 million is cash and cash equivalents and $156 million and $127 million is investment securities at March 31, 2018 and December 31, 2017, respectively, and a corresponding amount of liability is reported in short-term borrowings. See "Note 15. Related Party Transactions" for further details. |
Condensed Consolidated and Com5
Condensed Consolidated and Combined Statements of Financial Position (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Property, plant and equipment, accumulated depreciation | $ 3,049 | $ 2,817 |
Common unit, issued (in units) | 1,113,000 | 1,129,000 |
Common units outstanding (in units) | 1,113,000 | 1,129,000 |
Cash and cash equivalents | $ 5,614 | $ 7,026 |
Related party amount, due to related party | GE | ||
Cash held on behalf of GE | 992 | 1,124 |
Cash and cash equivalents | 836 | 997 |
Investment securities | $ 156 | $ 127 |
Condensed Consolidated and Com6
Condensed Consolidated and Combined Statements of Changes in Equity (Unaudited) - USD ($) $ in Millions | Total | Common Unitholders | Parent's Net Investment | Retained Loss | Accumulated Other Comprehensive Loss | Non-controlling Interests | Cash Dividend | Cash DividendCommon Unitholders | |
Beginning balance at Dec. 31, 2016 | $ 14,280 | $ 0 | $ 16,001 | $ 0 | $ (1,888) | $ 167 | |||
Stockholders' Equity | |||||||||
Net income (loss) | 66 | 68 | (2) | ||||||
Other comprehensive income (loss) | 75 | 73 | 2 | ||||||
Changes in Parent's net investment | 221 | 221 | |||||||
Other | 10 | 10 | |||||||
Ending balance at Mar. 31, 2017 | 14,652 | 0 | 16,290 | 0 | (1,815) | 177 | |||
Beginning balance at Dec. 31, 2017 | 38,396 | 40,678 | 0 | (541) | (1,881) | 140 | |||
Stockholders' Equity | |||||||||
Effect of adoption of ASU 2016-16 on taxes (1) | [1] | 67 | 67 | ||||||
Net income (loss) | (143) | (143) | |||||||
Other comprehensive income (loss) | 316 | 316 | |||||||
Cash distribution to members ($0.18 per unit) | $ (203) | $ (203) | |||||||
Repurchase of common units | (500) | (500) | |||||||
Other | 36 | 37 | (1) | ||||||
Ending balance at Mar. 31, 2018 | $ 37,969 | $ 40,012 | $ 0 | $ (617) | $ (1,565) | $ 139 | |||
[1] | See "Note 1. Basis of Presentation and Summary of Significant Accounting Policies" for further details. |
Condensed Consolidated and Com7
Condensed Consolidated and Combined Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (143) | $ 66 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||
Depreciation and amortization | 388 | 132 |
Provision for deferred income taxes | (99) | (115) |
Changes in operating assets and liabilities: | ||
Current receivables | 125 | (18) |
Inventories | (134) | 24 |
Accounts payable | 114 | (16) |
Progress collections and deferred income | (124) | (130) |
Contract and other deferred assets | 140 | (222) |
Other operating items, net | 23 | (67) |
Net cash flows from (used in) operating activities | 290 | (346) |
Cash flows from investing activities: | ||
Expenditures for capital assets | (177) | (76) |
Proceeds from disposal of assets | 108 | 8 |
All other investing activities | (66) | 1 |
Net cash flows used in investing activities | (135) | (67) |
Cash flows from financing activities: | ||
Net borrowings (repayments) of short-term debt and other borrowings | (181) | 227 |
Repayment of long-term debt | (648) | 0 |
Net transfer from Parent | 0 | 228 |
Distributions to members | (203) | 0 |
Repurchase of common units | (524) | 0 |
Other financing items, net | (5) | 2 |
Net cash flows from (used in) financing activities | (1,561) | 457 |
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | (6) | 2 |
Increase (decrease) in cash, cash equivalents and restricted cash | (1,412) | 46 |
Cash, cash equivalents and restricted cash, beginning of period | 7,026 | 981 |
Cash, cash equivalents and restricted cash, end of period | 5,614 | 1,027 |
Supplemental cash flows disclosures: | ||
Income taxes paid | 82 | 48 |
Interest paid | $ 72 | $ 8 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 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 world-leading, fullstream oilfield technology provider that has a unique mix of equipment and service capabilities. We conduct business in more than 120 countries and employ approximately 64,000 employees. On July 3, 2017 , we completed the combination of the oil and gas business (GE O&G) of General Electric Company (GE) and Baker Hughes (the Transactions). GE owns approximately 62.5% of our common units and Baker Hughes, a GE company (BHGE) owns approximately 37.5% of our common units indirectly through two wholly owned subsidiaries. BASIS OF PRESENTATION 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 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. 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 unaudited condensed consolidated and combined financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. and such principles, U.S. GAAP) and pursuant to the rules and regulations of the SEC for interim financial information. All intercompany accounts and transactions have been eliminated. In the opinion of management, the condensed consolidated and combined financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows of the Company and its subsidiaries for the periods presented and are not indicative of the results that may be expected for a full year. The Company's financial statements have been prepared on a consolidated basis, effective July 3, 2017 , following consummation of the Transactions. Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest). All subsequent periods will also be presented on a consolidated basis. For all periods prior to July 3, 2017 , the Company's financial statements were prepared on a combined basis. The combined financial statements combine certain accounts of GE and its subsidiaries that were historically managed as part of its Oil & Gas business and contributed to BHGE LLC as part of the Transactions (refer to "Note 3. Business Acquisition" for further details on the Transactions). Additionally, it also includes certain assets, liabilities and results of operations of other businesses of GE that were also contributed to BHGE LLC as part of the Transactions on a fully retrospective basis (in accordance with the guidance applicable to transactions between entities under common control) based on their carrying values, as reflected in the accounting records of GE. The condensed consolidated and combined statements of income reflect intercompany expense allocations made to us by GE for certain corporate functions and for shared services provided by GE. See "Note 15. Related Party Transactions" for further information on expenses allocated by GE. The historical financial results in the condensed consolidated and combined financial statements presented may not be indicative of the results that would have been achieved had GE O&G operated as a separate, stand-alone entity during those periods. The GE O&G numbers in the condensed 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. Refer to "Note 3. Business Acquisition" for further details. In the notes to unaudited condensed consolidated and combined financial statements, all dollar and unit amounts in tabulations are in millions of dollars and units, respectively, unless otherwise indicated. Certain columns and rows may not add due to the use of rounded numbers. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Please refer to "Note 1. Basis of Presentation and Summary of Significant Accounting Policies," to our condensed consolidated and combined financial statements from our Annual Report on Form 10-K for the year ended December 31, 2017 (2017 Annual Report) for the discussion of our significant accounting policies. Please refer to 'New Accounting Standards Adopted' section of this Note for changes to our accounting policies. Cash, Cash Equivalents and Restricted Cash As of March 31, 2018 , and December 31, 2017 , we had $1,124 million , and $1,190 million , respectively, of cash held in bank accounts that cannot be released, transferred or otherwise converted into a currency that is regularly transacted internationally, due to lack of market liquidity, capital controls or similar monetary or exchange limitations limiting the flow of capital out of the jurisdiction. These funds are available to fund operations and growth in these jurisdictions and we do not currently anticipate a need to transfer these funds to the U.S. Included in these amounts is $655 million and $764 million , as of March 31, 2018 and December 31, 2017 , respectively, held on behalf of GE. Cash, cash equivalents and restricted cash includes a total of $836 million and $997 million of cash at March 31, 2018 and December 31, 2017 , respectively, held on behalf of GE, and a corresponding liability is reported in short-term borrowings. See "Note 15. Related Party Transactions" for further details. As a result of adopting Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-18 Statement of Cash Flows: Restricted Cash , we reclassified our restricted cash of $7 million from ‘all other assets’ to cash, cash equivalents and restricted cash as of December 31, 2017 . At March 31, 2018 we continue to hold $7 million of cash that is restricted in nature as it legally cannot be used unless certain conditions are satisfied by us. NEW ACCOUNTING STANDARDS ADOPTED On January 1, 2018, we adopted the FASB ASU No. 2014-09, Revenue from Contracts with Customers, and the related amendments (ASC 606). We elected to adopt the new standard using the full retrospective method, where the standard was applied to each prior reporting period presented and the cumulative effect of applying the standard was recognized at January 1, 2016. This standard requires us to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time based on when control of goods and services transfer to a customer. As a result, we changed the presentation of our financial statements, including: (1) timing of revenue recognition, and (2) changes in classification between revenue and costs. The standard has no cash impact and, as such, does not affect the economics of our underlying customer contracts. Our policy on recognizing revenue is as follows: Revenue from Sale of Equipment Performance Obligations Satisfied Over Time We recognize revenue on agreements for sales of goods manufactured to unique customer specifications, including long-term construction projects, on an over-time basis utilizing cost inputs as the measurement criteria in assessing the progress toward completion. Our estimate of costs to be incurred to fulfill our promise to a customer is based on our history of manufacturing or constructing similar assets for customers and is updated routinely to reflect changes in quantity or pricing of the inputs. We begin to recognize revenue on these contracts when the contract specific inventory becomes customized for a customer, which is reflective of our initial transfer of control of the incurred costs. We provide for potential losses on any of these agreements when it is probable that we will incur the loss. Our billing terms for these over-time contracts vary, but are generally based on achieving specified milestones. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We recognize revenue for non-customized equipment at the point in time that the customer obtains control of the good, which is no earlier than when the customer has physical possession of the product. Equipment for which we recognize revenue at a point in time include goods we manufacture on a standardized basis for sale to the market. We use proof of delivery for certain large equipment with more complex logistics associated with the shipment, whereas the delivery of other equipment is determined based on historical data of transit times between regions. On occasion we sell products with a right of return. We use our accumulated experience to estimate and provide for such returns when we record the sale. In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have concluded that the customer has control of the goods and that acceptance is likely to occur. Our billing terms for these point in time equipment contracts vary, but are generally based on shipment of the goods to the customer. Revenue from Sale of Services Performance Obligations Satisfied Over Time We sell product services under long-term product maintenance or extended warranty agreements in our Turbomachinery & Process Solutions and Oilfield Equipment segments. These agreements require us to maintain the customers' assets over the service agreement contract terms, which generally range from 10 to 20 years. In general, these are contractual arrangements to provide services, repairs, and maintenance of a covered unit (drilling rigs, gas or steam turbine or a combined cycle). These services are performed at various times during the life of the contract, thus the costs of performing services are incurred on other than a straight-line basis. We recognize related sales based on the extent of our progress toward completion measured by actual costs incurred in relation to total expected costs. We provide for any loss that we expect to incur on any of these agreements when that loss is probable. BHGE utilizes historical customer data, prior product performance data, statistical analysis, third-party data, and internal management estimates to calculate contract-specific margins. In certain contracts, the total transaction price is variable based on customer utilization, which is excluded from the contract margin until the period that the customer has utilized to appropriately reflect the revenue activity in the period earned. Our billing terms for these contracts are generally based on achieving certain milestones or upon the occurrence of a major maintenance event within the contract. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We sell certain tangible products, largely spare equipment, through our services business. We recognize revenues for this equipment at the point in time that the customer obtains control of the good, which is at the point in time we deliver the spare part to the customer. Our billing terms for these point in time service contracts vary, but are generally based on shipment of the goods to the customer. Impact of Adoption As a result of the adoption of the standard, the timing of revenue recognition on our long-term product service agreements is affected. Although we continue to recognize revenue over time on these contracts, there are changes to how contract modifications, termination clauses and purchase options are accounted for by us. In particular, under the previous standard, the cumulative impact from a contract modification on revenue already recorded is recognized in the period in which the modification is agreed. Under the new standard, the impact from certain types of modifications is recognized over the remaining life of the contract. The change in historical periods to our statements of income (loss) related to the adoption of the standard is summarized below: Three Months Ended Year Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2017 December 31, 2016 Revenue: Sales of goods $ 86 $ 13 $ 37 $ 27 $ 163 $ (26 ) Sales of services (50 ) (86 ) (33 ) (74 ) (243 ) (161 ) Total revenue 36 (73 ) 4 (47 ) (80 ) (187 ) Operating loss (14 ) (64 ) (6 ) (91 ) (175 ) (226 ) Net income (loss) and net income (loss) attributable to BHGE, LLC 1 (84 ) (10 ) (57 ) (150 ) (149 ) The increase (decrease) to our statement of financial position related to the adoption of the standard is summarized below: December 31, 2017 ASSETS Current receivables, net $ 1 Inventories, net (83 ) Contract and other deferred assets (701 ) Deferred income taxes 233 LIABILITIES AND EQUITY Progress collections and deferred income $ 394 All other current liabilities (64 ) Deferred income taxes (34 ) All other liabilities (83 ) Total equity (763 ) The cumulative impact to our retained earnings (included in our net parent investment) as of January 1, 2016 was a reduction of $432 million . On January 1, 2018, we adopted the FASB ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory . The ASU eliminated the deferral of tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes are recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The effect of the adoption of the standard was an increase to retained earnings of $67 million as of January 1, 2018 with no other impact to our financial statements. Future earnings will be reduced in total by this amount. The effect of the change on future transactions will depend on the nature and amount of future transactions as it will affect the timing of recognition of both tax expenses and tax benefits, with no change in the associated cash flows. On January 1, 2018, we adopted the FASB ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changed the income statement presentation of net periodic benefit cost by requiring separation between the service cost component and all other components. The service cost component is presented as an operating expense with other similar compensation costs arising for services rendered by the pertinent employees during the period. The non operating components are presented outside of income from operations. The change in historical periods to our statements of income (loss) related to the adoption of ASU No. 2017-07 is summarized below: Three Months Ended Year Ended March 31, 2018 March 31, 2017 December 31, 2017 December 31, 2016 Operating income (loss) $ (5 ) $ 2 $ (1 ) $ 24 Non operating income (loss) 5 (2 ) 1 (24 ) NEW ACCOUNTING STANDARDS TO BE ADOPTED In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) : Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The ASU provides that the stranded tax effects from the Tax Cuts and Jobs Act on the balance of other comprehensive earnings may be reclassified to retained earnings. The ASU is effective for periods beginning after December 15, 2018, with an election to adopt early. We are evaluating the effect of the standard on our financial statements. 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 condensed consolidated and combined financial statements. 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. |
Revenues Related to Contracts W
Revenues Related to Contracts With Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Related to Contracts With Customers | REVENUE RELATED TO CONTRACTS WITH CUSTOMERS DISAGGREGATED REVENUE We disaggregate our revenue from contracts with customers by primary geographic markets. Three Months Ended March 31, Total Revenue 2018 2017 U.S. $ 1,483 $ 721 Non-U.S. 3,916 2,343 Total $ 5,399 $ 3,064 REMAINING PERFORMANCE OBLIGATION As of March 31, 2018 , the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $21.3 billion . We expect to recognize revenue of approximately 45% , 60% and 90% of the total remaining performance obligations within 2 , 5 , and 15 years, respectively and the remaining thereafter. As part of our adoption of ASC 606, we elected to not disclose the amount of transaction price allocated to remaining performance obligation for the periods prior to adoption. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Mar. 31, 2018 | |
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 are not subject to U.S. federal income tax under current U.S. tax laws. Our foreign subsidiaries, however, have incurred current and deferred foreign income taxes. As of March 31, 2018 , 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 our common units. 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 fair value of the consideration exchanged was $24,798 million . The tables below present 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 noncontrolling interest associated with net assets acquired. Preliminary identifiable assets acquired and liabilities assumed Estimated fair value at July 3, 2017 Assets Cash and equivalents $ 4,133 Current receivables 2,342 Inventories 1,706 Property, plant and equipment 4,571 Intangible assets (1) 4,078 All other assets 1,596 Liabilities Accounts payable (1,209 ) Borrowings (3,370 ) Deferred income taxes (2) (52 ) Liabilities for pension and other postretirement benefits (654 ) All other liabilities (1,421 ) Total identifiable net assets $ 11,720 Noncontrolling interest associated with net assets acquired (76 ) Goodwill (3) 13,154 Total purchase consideration $ 24,798 (1) 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 Trade name - Baker Hughes $ 2,100 Indefinite life Customer relationships 1,320 15 Patents and technology 465 10 In-process research and development 70 Indefinite life Capitalized software 62 3-7 Trade names - other 40 10 Favorable lease contracts & others 21 10 Total $ 4,078 (2) Includes approximately $162 million of net deferred tax liabilities related to the estimated fair value of intangible assets included in the preliminary purchase consideration and approximately $110 million of other net deferred tax assets, including non-U.S. loss carryforwards net of valuation allowances and offsetting liabilities for unrecognized benefits. (3) Goodwill represents the excess of the total purchase consideration over fair value of the net assets recognized and represents the future economic benefits that we believe will result from combining the operations of GE O&G and Baker Hughes, including expected future synergies and operating efficiencies. Goodwill resulting from the Transactions has been preliminarily allocated to the Oilfield Services segment, of which $67 million is deductible for tax purposes. During the first quarter of 2018, the Company made measurement period adjustments to reflect facts and circumstances in existence as of the acquisition date. These adjustments resulted in an increase in goodwill of approximately $376 million primarily due to a reduction in the step-up to fair value of property, plant and equipment of $288 million and a reduction in intangible assets of $45 million from prior quarter. As a result of the reduction in property, plant and equipment and intangible assets during the first quarter of 2018 , we recorded an adjustment to depreciation and amortization expense of $27 million that would have been recorded in previous interim reporting periods if the adjustment to the provisional amounts had been recognized at the acquisition date. In addition, we reclassified certain balances to conform to our current presentation. INCOME TAXES BHGE LLC is treated as a partnership for U.S. federal income tax purposes. As such, we are not subject to U.S. federal income tax under current U.S. tax laws. Our members are each required to take into account for U.S. federal income tax purposes their distributive share of the items of income, gain, loss and deduction, which generally includes our U.S. operations. BHGE and GE are each taxed on their distributive share of income and gain, whether or not a corresponding amount of cash or other property is distributed to them. For assets held indirectly by us through subsidiaries, the taxes attributable to those subsidiaries will be reflected in our condensed consolidated and combined financial statements. MERGER AND RELATED COSTS During the three months ended March 31, 2018 and 2017 , acquisition costs of $46 million and $66 million , respectively, were expensed as incurred and were reported as merger and related costs. Such costs include professional fees of advisors and integration and synergy costs related to the combination of Baker Hughes and GE O&G. UNAUDITED PRO FORMA INFORMATION The following unaudited pro forma information has been presented as if the Transactions occurred on January 1, 2016. This information has been prepared by combining the historical results of GE O&G and historical results of Baker Hughes. The unaudited pro forma combined financial data for all periods presented were adjusted to give effect to pro forma events that 1) are directly attributable to the Transactions, 2) factually supportable, and 3) expected to have a continuing impact on the consolidated results of operations. The adjustments are based on information available to the Company at this time. Accordingly, the adjustments are subject to change and the impact of such changes may be material. The unaudited pro forma results do not include any incremental cost savings that may result from the integration. The unaudited combined pro forma information is for informational purposes only and is not necessarily indicative of what the combined company's results actually would have been had the acquisition been completed as of the beginning of the periods as indicated. In addition, the unaudited pro forma information does not purport to project the future results of the combined company. Significant adjustments to the pro forma information below include recognition of non-recurring direct incremental acquisition costs in 2016 and exclusion of those costs from all other periods presented; amortization associated with an estimate of the acquired intangible assets; 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. Three Months Ended March 31, 2017 Revenue $ 5,324 Net loss (17 ) Net loss attributable to the Company (14 ) |
Current Receivables
Current Receivables | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Current Receivables | CURRENT RECEIVABLES Current receivables are comprised of the following: March 31, 2018 December 31, 2017 Customer receivables $ 4,732 $ 4,700 Related parties 813 914 Other 788 844 Total current receivables 6,333 6,458 Less: Allowance for doubtful accounts (346 ) (330 ) Total current receivables, net $ 5,987 $ 6,128 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 | 3 Months Ended |
Mar. 31, 2018 | |
Inventory, Net [Abstract] | |
Inventories | INVENTORIES Inventories, net of reserves of $372 million and $360 million as of March 31, 2018 and December 31, 2017 , respectively, are comprised of the following: March 31, 2018 December 31, 2017 Finished goods $ 2,527 $ 2,577 Work in process and raw material 2,169 1,930 Total inventories, net $ 4,696 $ 4,507 During the three months ended March 31, 2018 and 2017 , we recorded $61 million and $15 million , respectively, 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 condensed consolidated and combined statements of income (loss). |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL The changes in the carrying value of goodwill are detailed below by segment: Oilfield Services Oilfield Equipment Turbo-machinery & Process Solutions Digital Solutions Total Balance at December 31, 2016, gross $ 2,779 $ 3,852 $ 1,814 $ 1,989 $ 10,434 Accumulated impairment at December 31, 2016 (2,633 ) (867 ) — (254 ) (3,754 ) Balance at December 31, 2016 146 2,985 1,814 1,735 6,680 Acquisition (1) 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 Purchase accounting adjustments (1) 376 — — — 376 Currency exchange and others 28 33 41 27 129 Balance at March 31, 2018 $ 13,336 $ 3,067 $ 1,947 $ 1,809 $ 20,159 (1) Includes goodwill associated with the acquisition of Baker Hughes. This amount and its allocations to segments are preliminary. In addition to our annual impairment testing on July 1 each year, 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. During the first quarter of 2018, 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 March 31, 2018 , 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: March 31, 2018 December 31, 2017 Gross Accumulated Net Gross Accumulated Net Technology $ 1,118 $ (479 ) $ 639 $ 1,177 $ (440 ) $ 737 Customer relationships 3,279 (877 ) 2,402 3,202 (819 ) 2,383 Capitalized software 1,138 (753 ) 385 1,130 (697 ) 433 Trade names and trademarks 726 (192 ) 534 757 (159 ) 598 Other 14 (1 ) 14 10 — 10 Finite-lived intangible assets 6,275 (2,302 ) 3,974 6,276 (2,115 ) 4,161 Indefinite-lived intangible assets (1) 2,229 — 2,229 2,197 — 2,197 Total intangible assets $ 8,504 $ (2,302 ) $ 6,203 $ 8,473 $ (2,115 ) $ 6,358 (1) Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name. Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 1 to 30 years. Amortization expense for the three months ended March 31, 2018 and 2017 was $139 million and $63 million , respectively. During the three months ended March 31, 2018, we incurred additional amortization expense of $35 million due to the acquisition of Baker Hughes. In addition, we incurred $37 million of accelerated amortization during the first quarter of 2018 related to trade names and technology that we will cease to use by the end of the second quarter of 2018 as a result of the combination of Baker Hughes and GE O&G. This decision is expected to generate an additional charge of $34 million in the second quarter of 2018. Estimated amortization expense for the remainder of 2018 and each of the subsequent five fiscal years is expected to be as follows: Year Estimated Amortization Expense Remainder of 2018 $ 338 2019 375 2020 348 2021 300 2022 266 2023 247 |
Contract and Other Deferred Ass
Contract and Other Deferred Assets | 3 Months Ended |
Mar. 31, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
Contract and Other Deferred Assets | CONTRACT AND OTHER DEFERRED ASSETS A majority of our long-term product service agreements relate to our Turbomachinery & Process Solutions segment. Contract assets reflect revenue earned in excess of billings on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements and other deferred contract related costs. Contract assets are comprised of the following: March 31, 2018 December 31, 2017 Long-term product service agreements $ 615 $ 589 Long-term equipment contract revenue (1) 1,108 1,095 Contract assets (total revenue in excess of billings) (2) 1,723 1,684 Deferred inventory costs (3) 208 360 Contract and other deferred assets $ 1,931 $ 2,044 (1) Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment. (2) Contract assets (total revenue in excess of billings) were $1,233 million as of January 1, 2017. (3) Deferred inventory costs were $276 million as of January 1, 2017, which represents cost deferral for shipped goods and other costs where the criteria for revenue recognition has not yet been met. Revenue recognized in the three months ended March 31, 2018 and 2017 from performance obligations satisfied (or partially satisfied) in previous periods related to our long-term service agreements was approximately $10 million and approximately $30 million , respectively. This includes revenue recognized from revisions to cost or billing estimates that may affect a contract’s total estimated profitability resulting in an adjustment of earnings. |
Progress Collections and Deferr
Progress Collections and Deferred Income | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Progress Collections and Deferred Income | PROGRESS COLLECTIONS AND DEFERRED INCOME Contract liabilities include progress collections, which reflects billings in excess of revenue, and deferred income on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements. Contract liabilities are comprised of the following: March 31, 2018 December 31, 2017 Progress collections $ 1,474 $ 1,456 Deferred income 202 319 Progress collections and deferred income (contract liabilities) (1) $ 1,676 $ 1,775 (1) Progress collections and deferred income (contract liabilities) was $2,038 million at January 1, 2017. Revenue recognized for the three months ended March 31, 2018 and 2017 that was included in the contract liabilities at the beginning of the period was $602 million and $529 million , respectively. |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS Short-term and long-term borrowings are comprised of the following: March 31, 2018 December 31, 2017 Short-term borrowings Short-term bank borrowings $ 124 $ 171 Current portion of long-term borrowings — 639 Short-term borrowings from GE 992 1,124 Other borrowings 60 103 Total short-term borrowings $ 1,176 $ 2,037 Long-term borrowings 3.2% Senior Notes due August 2021 $ 525 $ 526 2.773% Senior Notes due December 2022 1,245 1,244 8.55% Debentures due June 2024 134 135 3.337% Senior Notes due December 2027 1,343 1,342 6.875% Notes due January 2029 303 308 5.125% Notes due September 2040 1,310 1,311 4.08% Senior Notes due December 2047 1,337 1,337 Capital leases 79 87 Other long-term borrowings 20 22 Total long-term borrowings 6,296 6,312 Total borrowings $ 7,472 $ 8,349 We have a five -year $3 billion committed unsecured revolving credit facility (the 2017 Credit Agreement) with commercial banks maturing in July 2022. The 2017 Credit Agreement contains certain customary representations and warranties, certain affirmative covenants and no negative covenants. Upon the occurrence of certain events of default, our obligations under the 2017 Credit Agreement may be accelerated. Such events of default include payment defaults to lenders under the 2017 Credit Agreement, and other customary defaults. No such events of default have occurred. During the three months ended March 31, 2018 , there were no borrowings under the 2017 Credit Agreement. We have a commercial paper program under which it may issue from time to time up to $3 billion in commercial paper with maturities of no more than 397 days. At March 31, 2018 , we had no borrowings outstanding under the commercial paper program. The maximum combined borrowing at any time under both the 2017 Credit Agreement and the commercial paper program is $3 billion . In January 2018, we purchased all of the remaining outstanding 2018 Senior Notes of $615 million for a total consideration of $637 million . The carrying value of the 2018 Senior Notes was $639 million , which includes $24 million of fair value step-up from the Baker Hughes acquisition. As a result of the repurchase, we recorded a gain of $2 million . Also in January 2018, we commenced an offering to exchange $3,950 million of all the outstanding, unregistered senior notes that were issued in a private offering in December 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 at the end of January 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 a 100% -owned finance subsidiary of us that was incorporated for the sole purpose of serving as a co-obligor of debt securities and has no assets or operations other than those related to its sole purpose. Baker Hughes Co-Obligor, Inc. is also a co-obligor of the $3,950 million senior notes issued in December 2017 by us in a private placement and subsequently registered in January 2018. The estimated fair value of total borrowings at March 31, 2018 and December 31, 2017 was $7,320 million and $8,466 million , respectively. For a majority of our borrowings the fair value was determined using quoted period-end market prices. Where market prices are not available, we estimate fair values based on valuation methodologies using current market interest rate data adjusted for our non-performance risk. See "Note 15. Related Party Transactions" for additional information on the short-term borrowings from GE. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefits Plans | EMPLOYEE BENEFIT PLANS Certain of our U.S. employees are covered under various U.S. GE employee benefit plans, including GE's retirement plans (pension, retiree health and life insurance, and savings benefit plans). In addition, certain United Kingdom (UK) employees participate in the GE UK Pension Plan. We are allocated relevant participation costs for these GE employee benefit plans as part of multi-employer plans. As such, we have not recorded any liabilities associated with our participation in these plans. Expenses associated with our participation in these plans was $37 million and $26 million in the three months ended March 31, 2018 and 2017 , respectively. In addition to these GE plans, certain of our employees are also covered by company sponsored employee defined benefit plans. These defined benefit plans include seven U.S. plans and six non-U.S. plans, primarily in the UK, Germany, and Canada, all with plan assets or obligations greater than $20 million . We use a December 31 measurement date for these plans. These defined benefit plans generally provide benefits to employees based on formulas recognizing length of service and earnings. The components of net periodic cost (benefit) of plans sponsored by us are as follows for the three months ended March 31 : Pension Benefits 2018 2017 Service cost $ 5 $ 3 Interest cost 18 7 Expected return on plan assets (30 ) (10 ) Amortization of prior service credit — — Amortization of net actuarial (gain) loss 2 3 Net periodic cost (benefit) $ (5 ) $ 3 The service cost component of the net periodic cost (benefit) is included in operating income (loss) and all other components are included in non operating income (loss) in our condensed consolidated and combined statements of income (loss). |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
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 are each 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 includes the U.S. operations of both Baker Hughes and GE O&G. BHGE and GE are each taxed on their distributive share of income and gain, whether or not a corresponding amount of cash or other property is distributed to them. For assets held indirectly by us through subsidiaries, including both foreign and U.S., the taxes attributable to those subsidiaries are reflected in our condensed 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 was recorded on a provisional basis as the legislation provides for additional guidance to be issued by the U.S. Department of the Treasury on several provisions including the computation of the transition tax which could impact the calculation of the transition tax charge and the revaluation of deferred taxes. In addition, analysis performed and conclusions reached as part of the tax return filing process and additional guidance on accounting for tax reform could affect the provisional amount. 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. For the quarter ended March 31, 2018, income tax expense was $38 million compared to tax expense of $8 million in the first quarter of 2017. The difference between the U.S. statutory tax rate of 21% and the current effective rate is primarily due to higher tax expense of approximately $58 million related to losses with no tax benefit. Since we are a partnership for U.S. federal tax purposes, any tax benefits associated with U.S. losses are recognized by our members and not reflected in our tax expense. The prior year quarter reflects 100% of the taxes associated with U.S. and non-U.S. earnings of the GE O&G business. |
Members' Equity
Members' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Members' Equity | MEMBERS' 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, we will also issue a corresponding common unit to BHGE or one of its direct subsidiaries. For the three months ended March 31, 2017, we issued 382 thousand common units to BHGE in connection with the issuance of Class A common stock by BHGE. As of March 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, 2017 422,208 706,985 Issue of units to BHGE under equity incentive plan 382 — Repurchase of common units (1) (6,290 ) (10,524 ) Balance at March 31, 2018 416,300 696,460 (1) On November 2, 2017, BHGE's board of directors authorized us to repurchase up to $3 billion of our common units from BHGE and GE. During the three months ended March 31, 2018 , we repurchased 16,814,293 units for a total consideration of $500 million . At March 31, 2018, we had authorization remaining to repurchase up to approximately $2 billion of common units from BHGE and GE. ACCUMULATED OTHER COMPREHENSIVE LOSS (AOCL) The following tables present the changes in accumulated other comprehensive loss, net of tax: Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss Balance at December 31, 2017 $ 1 $ (1,824 ) $ 2 $ (60 ) $ (1,881 ) Other comprehensive income (loss) before reclassifications — 312 8 (3 ) 317 Amounts reclassified from accumulated other comprehensive income (loss) — — — — — Deferred taxes — — (1 ) — (1 ) Other comprehensive income (loss) — 312 7 (3 ) 316 Less: Other comprehensive income (loss) attributable to noncontrolling interests — — — — — Balance at March 31, 2018 $ 1 $ (1,512 ) $ 9 $ (63 ) $ (1,565 ) Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss Balance at December 31, 2016 $ — $ (1,795 ) $ (10 ) $ (83 ) $ (1,888 ) Other comprehensive income (loss) before reclassifications 39 49 (2 ) (2 ) 84 Amounts reclassified from accumulated other comprehensive income (loss) 1 — 7 (2 ) 6 Deferred taxes (14 ) (3 ) (1 ) 3 (15 ) Other comprehensive income (loss) 26 46 4 (1 ) 75 Less: Other comprehensive income attributable to noncontrolling interests — — — 2 2 Balance at March 31, 2017 $ 26 $ (1,749 ) $ (6 ) $ (86 ) $ (1,815 ) The amounts reclassified from accumulated other comprehensive loss during the three months ended March 31, 2018 and 2017 represent realized gains on investment securities, foreign exchange contracts on our cash flow hedges (see "Note 13. Financial Instruments" for additional details) and amortization of net actuarial gain (loss) and prior service credit, which are included in the computation of net periodic pension cost (see "Note 10. Employee Benefit Plans" for additional details). These reclassifications are recorded across the various cost and expense line items within the condensed consolidated and combined statements of income (loss). |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | FINANCIAL INSTRUMENTS RECURRING FAIR VALUE MEASUREMENTS Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities. March 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Net Balance Level 1 Level 2 Level 3 Net Balance Assets Derivatives $ — $ 205 $ — $ 205 $ — $ 150 $ — $ 150 Investment securities 75 — 326 401 81 8 304 393 Total assets 75 205 326 606 81 158 304 543 Liabilities Derivatives — (129 ) — (129 ) — (95 ) — (95 ) Total liabilities $ — $ (129 ) $ — $ (129 ) $ — $ (95 ) $ — $ (95 ) There were no transfers between Level 1, 2 and 3 during the three months ended March 31, 2018 . The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities: Balance at December 31, 2017 $ 304 Purchases 34 Proceeds at maturity (12 ) Balance at March 31, 2018 $ 326 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. At March 31, 2018 , we held $156 million of these investment securities on behalf of GE. March 31, 2018 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Investment securities Non-U.S. debt securities $ 325 $ 1 $ — $ 326 $ 310 $ 2 $ — $ 312 Equity securities 75 — — 75 81 — — 81 Total $ 400 $ 1 $ — $ 401 $ 391 $ 2 $ — $ 393 All of our non-U.S. debt securities are classified as available for sale instruments and mature within three years. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS Our financial instruments include cash, cash equivalents and restricted cash, current receivables, investments, accounts payable, short and long-term debt, and derivative financial instruments. Except for long-term debt, the estimated fair value of these financial instruments at March 31, 2018 and December 31, 2017 approximates their carrying value as reflected in our condensed consolidated and combined financial statements. For further information on the fair value of our debt, see "Note 9. 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. March 31, 2018 December 31, 2017 Assets (Liabilities) Assets (Liabilities) Derivatives accounted for as hedges Currency exchange contracts $ 10 $ — $ 6 $ — Derivatives not accounted for as hedges Currency exchange contracts 195 (129 ) 144 (95 ) Total derivatives $ 205 $ (129 ) $ 150 $ (95 ) Derivatives are classified in the captions "All other current assets," "All other assets," "All other current liabilities," and "All other liabilities" depending on their respective maturity date. RISK MANAGEMENT STRATEGY We buy, manufacture and sell components and products as well as provide services across global markets. These activities expose us to changes in foreign currency exchange rates and commodity prices, which can adversely affect revenues earned and costs of operating our business. When the currency in which we sell equipment differs from the primary currency (known as its functional currency) and the exchange rate fluctuates, it will affect the revenue we earn on the sale. These sales and purchase transactions also create receivables and payables denominated in foreign currencies, along with other monetary assets and liabilities, which expose us to foreign currency gains and losses based on changes in exchange rates. Changes in the price of a raw material that we use in manufacturing can affect the cost of manufacturing. We use derivatives to mitigate or eliminate these exposures. FORMS OF HEDGING Cash Flow Hedges We use cash flow hedging primarily to reduce or eliminate the effects of foreign exchange rate changes on purchase and sale contracts. Accordingly, the vast majority of our derivative activity in this category consists of currency exchange contracts. We also use commodity derivatives to reduce or eliminate price risk on raw materials purchased for use in manufacturing. Economic Hedges These derivatives are not designated as hedges from an accounting standpoint (and therefore we do not apply hedge accounting to the relationship) but otherwise serve the same economic purpose as other hedging arrangements. Some economic hedges are used when changes in the carrying amount of the hedged item are already recorded in earnings in the same period as the derivative, making hedge accounting unnecessary. For some other types of economic hedges, changes in the fair value of the derivative are recorded in earnings currently but changes in the value of the forecasted foreign currency cash flows are only recognized in earnings when they occur. As a result, even though the derivative is an effective economic hedge, there is a net effect on earnings in each period due to differences in the timing of earnings recognition between the derivative and the hedged item. These derivatives are marked to fair value through earnings each period. NOTIONAL AMOUNT OF DERIVATIVES The notional amount of a derivative is the number of units of the underlying (for example, the notional principal amount of the debt in an interest rate swap). A substantial majority of the outstanding notional amount of $11.3 billion and $10.2 billion at March 31, 2018 and December 31, 2017 , respectively, is related to hedges of anticipated sales and purchases in foreign currency, commodity purchases, and contractual terms in contracts that are considered embedded derivatives and for intercompany borrowings in foreign currencies. We generally disclose derivative notional amounts on a gross basis to indicate the total counterparty risk. Where we have gross purchase and sale derivative contracts for a particular currency, we look to execute these contracts with the same counterparty to reduce our exposure. The corresponding net notional amounts were $3.0 billion and $3.3 billion at March 31, 2018 and December 31, 2017 , respectively. The table below provides additional information about how derivatives are reflected in our condensed consolidated and combined financial statements. Carrying amount related to derivatives March 31, 2018 December 31, 2017 Derivative assets $ 205 $ 150 Derivative liabilities (129 ) (95 ) Net derivatives $ 76 $ 55 EFFECTS OF DERIVATIVES ON EARNINGS All derivatives are marked to fair value on our condensed consolidated and combined statement of financial position, whether they are designated in a hedging relationship for accounting purposes or are used as economic hedges. As discussed in the previous sections, each type of hedge affects the financial statements differently. In some economic hedges, both the hedged item and the hedging derivative offset in earnings in the same period. In other economic hedges, the hedged item and the hedging derivative offset in earnings in different periods. In cash flow, the effective portion of the hedging derivative is offset in separate components of equity and ineffectiveness is recognized in earnings. The table below summarizes these offsets and the net effect on pre-tax earnings. Three Months Ended March 31, 2018 2017 Cash Flow Hedges Economic Hedges Cash Flow Hedges Economic Hedges Effect on hedging instrument $ (8 ) $ 17 $ 2 $ (8 ) Effect on underlying 8 (15 ) (2 ) 9 Effect on earnings (1) — 2 — 1 (1) For cash flow hedges, the effect on earnings, if any, is primarily related to ineffectiveness. For economic hedges on forecasted transactions, the effect on earnings is substantially offset by future earnings on economically hedged items. Changes in the fair value of cash flow hedges are recorded in a separate component of equity (referred to below as Accumulated Other Comprehensive Income, or AOCI) and are recorded in earnings in the period in which the hedged transaction occurs. The table below summarizes this activity by hedging instrument. Three Months Ended March 31, 2018 2017 2018 2017 Gain (loss) recognized in AOCI Gain (loss) reclassified from AOCI to earnings Currency exchange contracts $ 8 $ (2 ) $ — $ (7 ) We expect to transfer $7 million to earnings as an expense in the next 12 months contemporaneously with the earnings effects of the related forecast transactions. At March 31, 2018 and December 31, 2017 , the maximum term of derivative instruments that hedge forecast transactions was two -years and three -years, respectively. See "Note 12. 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 | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Our operating segments are organized based on the nature of markets and customers. We report our operating results through four operating segments as described below. 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 period results may not be comparable to prior periods as the current period includes the results of Baker Hughes. Three Months Ended March 31, Segments revenue 2018 2017 Oilfield Services $ 2,678 $ 212 Oilfield Equipment 664 716 Turbomachinery & Process Solutions 1,460 1,644 Digital Solutions 598 491 Total $ 5,399 $ 3,064 The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and equity in loss of affiliate and before the following: net interest expense, net other non operating income (loss), corporate expenses, restructuring, impairment and other charges, inventory impairments, merger and related costs and certain gains and losses not allocated to the operating segments. Three Months Ended March 31, Segment income (loss) before income taxes 2018 2017 Oilfield Services $ 141 $ (57 ) Oilfield Equipment (6 ) 50 Turbomachinery & Process Solutions 119 252 Digital Solutions 73 84 Total segment 327 329 Corporate (98 ) (120 ) Inventory impairment (1) (61 ) (15 ) Restructuring, impairment and other (162 ) (42 ) Merger and related costs (46 ) (66 ) Other non operating income, net 2 8 Interest expense, net (46 ) (20 ) Total $ (85 ) $ 74 (1) Charges for inventory impairments are reported in the "Cost of goods sold" caption of the condensed consolidated and combined statements of income (loss). |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Following the Transactions, GE and its affiliates have provided and continue to provide a variety of services to us. In connection with the Transactions on July 3, 2017 , we entered into various agreements with GE and its affiliates that govern our relationship with GE following the Transactions including an Intercompany Services Agreement pursuant to which GE and its affiliates and the Company provide certain services to each other. GE provides certain administrative services, GE proprietary technology and use of certain GE trademarks in consideration for a payment of $55 million per year. Costs of $14 million related to the Intercompany Services Agreement were incurred during the three months ended March 31, 2018 . GE may also provide us with certain additional administrative services under the Intercompany Services Agreement, not included as consideration for the $55 million per year payment, and the fees for such services are based on actual usage of such services and historical GE intercompany pricing. In addition, we provide GE and its affiliates with confidential access to certain of our proprietary technology and related developments and enhancements thereto related to GE's operations, products or service offerings. Prior to the Transactions, GE and its affiliates provided a variety of services and funding to us. The cost of these services was either (a) recognized through our allocated portion of GE's corporate overhead; or (b) billed directly to us. Costs of $38 million for the three months ended March 31, 2017 were recorded in our condensed consolidated and combined statement of income (loss) in respect of services provided by GE and its affiliates prior to the close of the Transactions. We sold $100 million and $149 million of products and services to GE and its affiliates during the three months ended March 31, 2018 and 2017 , respectively. Purchases from GE and its affiliates were $403 million and $346 million during the three months ended March 31, 2018 and 2017 , respectively. EMPLOYEE BENEFITS Certain of our employees are covered under various GE sponsored employee benefit plans, including GE's retirement plans (pension, retiree health and life insurance, and savings benefit plans) and active health and life insurance benefit plans. Further details are provided in "Note 10. Employee Benefit Plans." RELATED PARTY BALANCES In connection with the Transactions, we were required to repay any cash in excess of $100 million , net of any third-party debt in GE O&G, to GE. We continue to hold this cash on behalf of GE as such cash cannot be released, transferred or otherwise converted into a non-restricted market currency due to the lack of market liquidity, capital controls or similar monetary or exchange limitations by a Government entity of the jurisdiction in which such cash is situated. Accordingly, on July 3, 2017, we executed a promissory note with GE. There is no maturity date on the promissory note, but we remain obligated to repay GE such excess cash together with any income or loss we may incur on it, therefore, this obligation is reflected as short-term borrowings. As of March 31, 2018 , of the amount due to GE of $992 million , $836 million was held in the form of cash and $156 million was held in the form of investment securities. A corresponding liability is reported in short-term borrowings in the condensed consolidated and combined statements of financial position. Additionally, the Company has $556 million and $575 million of accounts payable at March 31, 2018 and December 31, 2017 , respectively, for services provided by GE in the ordinary course of business. The Company has $122 million of current receivables at March 31, 2018 from BHGE. TRADE PAYABLES ACCELERATED PAYMENT PROGRAM Our North American operations participate in accounts payable programs with GE Capital. Invoices are settled with vendors per our payment terms to obtain cash discounts. GE Capital provides funding for the period from the date at which an invoice is eligible for a cash discount through the final termination date for invoice settlement. Our liability associated with the funded participation in the accounts payable programs, which is presented as accounts payable within the condensed consolidated and combined statements of financial position, was $346 million and $293 million as of March 31, 2018 and December 31, 2017 , respectively. PARENT'S NET INVESTMENT At March 31, 2017 , 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 condensed consolidated and combined statements of changes in equity. At March 31, 2018 , GE's equity ownership is reflected in noncontrolling interest in our condensed consolidated and combined statements of equity and financial position. OTHER Prior to the Transactions, GE provided guarantees, letters of credit, and other support arrangements on our behalf. We provide guarantees to GE Capital on behalf of some customers who have entered into financing arrangements with GE Capital. INCOME TAXES At closing, BHGE, GE and BHGE LLC entered into a Tax Matters Agreement. The Tax Matters Agreement governs the administration and allocation between the parties of tax liabilities and benefits arising prior to, as a result of, and subsequent to the Transactions, including certain restructuring transactions in connection therewith, and the respective rights, responsibilities and obligations of GE and BHGE, with respect to various other tax matters. GE is responsible for certain taxes related to the formation of the transaction undertaken by GE and Baker Hughes and their respective subsidiaries. GE has assumed approximately $33 million of tax obligations of Baker Hughes related to the formation of the transaction. Following the closing of the Transactions, BHGE or BHGE LLC (or their respective subsidiaries) may be included in group tax returns with GE. To the extent included in such group tax returns, (i) BHGE or BHGE LLC is required to make tax sharing payments to GE in an amount intended to approximate the amount that such entity would have paid if it had not been included in such group tax returns and had filed separate tax returns, and (ii) GE is required to pay BHGE or BHGE LLC to the extent such separate tax returns include net operating losses that are used to reduce taxes payable by GE with respect to the applicable group tax return. The Tax Matters Agreement also provides for the sharing of certain tax benefits (i) arising from the Transactions, including restructuring transactions, and (ii) resulting from allocations of tax items by BHGE LLC. GE is entitled to 100% of these tax benefits to the extent that GE has borne certain taxes related to the formation of the transaction. Thereafter, these tax benefits will be shared by GE and BHGE in accordance with their economic ownership of BHGE LLC, which will initially be approximately 62.5% and approximately 37.5% , respectively. The sharing of tax benefits generally is expected to result in cash payments by BHGE LLC to its members. Any such cash payments may be subject to adjustment based on certain subsequent events, including tax audits or other determinations as to the availability of the tax benefits with respect to which such cash payments were previously made. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES LITIGATION We are subject to a number of lawsuits and claims arising out of the conduct of our business. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. We record a liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, including accruals for self-insured losses which are calculated based on historical claim data, specific loss development factors and other information. A range of total possible losses for all litigation matters cannot be reasonably estimated. Based on a consideration of all relevant facts and circumstances, we do not expect the ultimate outcome of currently pending lawsuits or claims against us, other than those discussed below, will have a material adverse effect on our financial position, results of operations or cash flows, however, there can be no assurance as to the ultimate outcome of these matters. With respect to the litigation matters below, if there was an adverse outcome individually or collectively, there could be a material impact on our business, financial condition and results of operations expected for the year. These litigation matters are subject to inherent uncertainties and management's view of these matters may change in the future. Therefore, there can be no assurance as to the ultimate outcome of these matters. During 2014, we received notification from a customer related to a possible equipment failure in a natural gas storage system in Northern Germany, which includes certain of our products. 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 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. 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 totaling $500 million plus punitive damages of an unspecified amount. The complaint is captioned Saniteq LLC v. GE Infrastructure Sensing, Inc ., No. 17-cv-771 (E.D.N.Y 2017). The complaint generally alleges that GEIS breached a contract being negotiated between the parties and misappropriated unspecified trade secrets. At this time, we are not able to predict the outcome of these claims. In January 2013, INEOS and Naphtachimie initiated expertise proceedings in Aix-en-Provence, France arising out of a fire at a chemical plant owned by INEOS in Lavera, France, which resulted in a 15-day plant shutdown and destruction of a steam turbine, which was part of a compressor train owned by Naphtachimie. The most recent quantification of the alleged damages is €250 million . Two of the Company's subsidiaries (and 17 other companies) were notified to participate in the proceedings. The proceedings are ongoing, and at this time, there is no indication that the Company's subsidiaries were involved in the incident. Although the outcome of the claims remains uncertain, BHGE's insurer has accepted coverage and is defending the Company in the expertise proceeding. In late November 2017, staff of the Boston office of the SEC notified GE that they are conducting an investigation of GE’s revenue recognition practices and internal controls over financial reporting related to long-term service agreements. The scope of the SEC’s request may include some BHGE contracts, expected to be mainly in our TPS business. We have provided documents to GE and are cooperating with them in their response to the SEC. At this time, we are not able to predict the outcome of this review. The Company is reporting the following matter in compliance with SEC requirements to disclose environmental proceedings where the government is a party potentially involving monetary sanctions of $100,000 or greater. As previously reported, in January 2018, Kern County California issued an administrative 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 Baker Hughes, a GE company. The matter was resolved in March 2018 with a final penalty amount of $80,000 . We insure against risks arising from our business to the extent deemed prudent by our management and to the extent insurance is available, but no assurance can be given that the nature and amount of that insurance will be sufficient to fully indemnify us against liabilities arising out of pending or future legal proceedings or other claims. Most of our insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability, general liability and workers compensation. PRODUCT WARRANTIES We provide for estimated product warranty expenses when we sell the related products. Because warranty estimates are forecasts that are based on the best available information, primarily historical claims experience, claims costs may differ from amounts provided. An analysis of changes in the liability for product warranties are as follows: Balance at December 31, 2017, and 2016, respectively $ 164 $ 74 Provisions 10 6 Expenditures (7 ) (12 ) Other 2 — Balance at March 31, 2018, and 2017, respectively $ 169 $ 68 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 $3.7 billion at March 31, 2018 . It is not practicable to estimate the fair value of these financial instruments. None of the off-balance sheet arrangements either has, or is likely to have, a material effect on our financial position, results of operations or cash flows. |
Restructuring, Impairment and O
Restructuring, Impairment and Other | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring, Impairment and Other | RESTRUCTURING, IMPAIRMENT AND OTHER We recorded restructuring, impairment and other charges of $162 million and $42 million during the three months ended March 31, 2018 and 2017 , 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 $125 million and $35 million for the three months ended March 31, 2018 and 2017 , respectively. These restructuring initiatives will generate charges post March 31, 2018 , and the related estimated remaining charges are approximately $173 million . The amount of costs not included in the reported segment results is as follows: Three Months Ended March 31, 2018 2017 Oilfield Services $ 59 $ 12 Oilfield Equipment 12 1 Turbomachinery & Process Solutions 28 10 Digital Solutions 9 10 Corporate 17 2 Total $ 125 $ 35 These costs were primarily related to product line terminations, plant closures and related expenses such as property, plant and equipment impairments, contract terminations and costs of assets' and employees' relocation, employee-related termination benefits, and other incremental costs that were a direct result of the restructuring plans. Three Months Ended March 31, 2018 2017 Property, plant & equipment, net $ 19 $ 10 Employee-related termination expenses 83 15 Asset relocation costs 5 3 Environmental remediation costs 3 3 Contract termination fees 7 1 Other incremental costs 8 3 Total $ 125 $ 35 OTHER CHARGES Other charges included in "Restructuring, impairment and other" of the condensed consolidated and combined statements of income (loss) were $37 million and $7 million in the three months ended March 31, 2018 and 2017 , respectively. During the three months ended March 31, 2018 , other charges comprised of accelerated amortization related to trade names and technology that we will cease to use by the end of the second quarter of 2018 as a result of the combination of Baker Hughes and GE O&G. This decision is expected to generate an additional charge of $34 million in the second quarter of 2018. During the three months ended March 31, 2017 , other charges include currency devaluation charges of $6 million largely driven by significant currency devaluations in Angola and Nigeria. |
Basis of Presentation and Sum25
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION 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 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. 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 unaudited condensed consolidated and combined financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. and such principles, U.S. GAAP) and pursuant to the rules and regulations of the SEC for interim financial information. All intercompany accounts and transactions have been eliminated. In the opinion of management, the condensed consolidated and combined financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows of the Company and its subsidiaries for the periods presented and are not indicative of the results that may be expected for a full year. The Company's financial statements have been prepared on a consolidated basis, effective July 3, 2017 , following consummation of the Transactions. Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest). All subsequent periods will also be presented on a consolidated basis. For all periods prior to July 3, 2017 , the Company's financial statements were prepared on a combined basis. The combined financial statements combine certain accounts of GE and its subsidiaries that were historically managed as part of its Oil & Gas business and contributed to BHGE LLC as part of the Transactions (refer to "Note 3. Business Acquisition" for further details on the Transactions). Additionally, it also includes certain assets, liabilities and results of operations of other businesses of GE that were also contributed to BHGE LLC as part of the Transactions on a fully retrospective basis (in accordance with the guidance applicable to transactions between entities under common control) based on their carrying values, as reflected in the accounting records of GE. The condensed consolidated and combined statements of income reflect intercompany expense allocations made to us by GE for certain corporate functions and for shared services provided by GE. See "Note 15. Related Party Transactions" for further information on expenses allocated by GE. The historical financial results in the condensed consolidated and combined financial statements presented may not be indicative of the results that would have been achieved had GE O&G operated as a separate, stand-alone entity during those periods. The GE O&G numbers in the condensed 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. Refer to "Note 3. Business Acquisition" for further details. In the notes to unaudited condensed consolidated and combined financial statements, all dollar and unit amounts in tabulations are in millions of dollars and units, respectively, unless otherwise indicated. Certain columns and rows may not add due to the use of rounded numbers. |
Cash And Equivalents | Cash, Cash Equivalents and Restricted Cash As of March 31, 2018 , and December 31, 2017 , we had $1,124 million , and $1,190 million , respectively, of cash held in bank accounts that cannot be released, transferred or otherwise converted into a currency that is regularly transacted internationally, due to lack of market liquidity, capital controls or similar monetary or exchange limitations limiting the flow of capital out of the jurisdiction. These funds are available to fund operations and growth in these jurisdictions and we do not currently anticipate a need to transfer these funds to the U.S. Included in these amounts is $655 million and $764 million , as of March 31, 2018 and December 31, 2017 , respectively, held on behalf of GE. Cash, cash equivalents and restricted cash includes a total of $836 million and $997 million of cash at March 31, 2018 and December 31, 2017 , respectively, held on behalf of GE, and a corresponding liability is reported in short-term borrowings. See "Note 15. Related Party Transactions" for further details. As a result of adopting Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-18 Statement of Cash Flows: Restricted Cash , we reclassified our restricted cash of $7 million from ‘all other assets’ to cash, cash equivalents and restricted cash as of December 31, 2017 . At March 31, 2018 we continue to hold $7 million of cash that is restricted in nature as it legally cannot be used unless certain conditions are satisfied by us. |
Revenue | Revenue from Sale of Equipment Performance Obligations Satisfied Over Time We recognize revenue on agreements for sales of goods manufactured to unique customer specifications, including long-term construction projects, on an over-time basis utilizing cost inputs as the measurement criteria in assessing the progress toward completion. Our estimate of costs to be incurred to fulfill our promise to a customer is based on our history of manufacturing or constructing similar assets for customers and is updated routinely to reflect changes in quantity or pricing of the inputs. We begin to recognize revenue on these contracts when the contract specific inventory becomes customized for a customer, which is reflective of our initial transfer of control of the incurred costs. We provide for potential losses on any of these agreements when it is probable that we will incur the loss. Our billing terms for these over-time contracts vary, but are generally based on achieving specified milestones. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We recognize revenue for non-customized equipment at the point in time that the customer obtains control of the good, which is no earlier than when the customer has physical possession of the product. Equipment for which we recognize revenue at a point in time include goods we manufacture on a standardized basis for sale to the market. We use proof of delivery for certain large equipment with more complex logistics associated with the shipment, whereas the delivery of other equipment is determined based on historical data of transit times between regions. On occasion we sell products with a right of return. We use our accumulated experience to estimate and provide for such returns when we record the sale. In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have concluded that the customer has control of the goods and that acceptance is likely to occur. Our billing terms for these point in time equipment contracts vary, but are generally based on shipment of the goods to the customer. Revenue from Sale of Services Performance Obligations Satisfied Over Time We sell product services under long-term product maintenance or extended warranty agreements in our Turbomachinery & Process Solutions and Oilfield Equipment segments. These agreements require us to maintain the customers' assets over the service agreement contract terms, which generally range from 10 to 20 years. In general, these are contractual arrangements to provide services, repairs, and maintenance of a covered unit (drilling rigs, gas or steam turbine or a combined cycle). These services are performed at various times during the life of the contract, thus the costs of performing services are incurred on other than a straight-line basis. We recognize related sales based on the extent of our progress toward completion measured by actual costs incurred in relation to total expected costs. We provide for any loss that we expect to incur on any of these agreements when that loss is probable. BHGE utilizes historical customer data, prior product performance data, statistical analysis, third-party data, and internal management estimates to calculate contract-specific margins. In certain contracts, the total transaction price is variable based on customer utilization, which is excluded from the contract margin until the period that the customer has utilized to appropriately reflect the revenue activity in the period earned. Our billing terms for these contracts are generally based on achieving certain milestones or upon the occurrence of a major maintenance event within the contract. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We sell certain tangible products, largely spare equipment, through our services business. We recognize revenues for this equipment at the point in time that the customer obtains control of the good, which is at the point in time we deliver the spare part to the customer. Our billing terms for these point in time service contracts vary, but are generally based on shipment of the goods to the customer. Impact of Adoption As a result of the adoption of the standard, the timing of revenue recognition on our long-term product service agreements is affected. Although we continue to recognize revenue over time on these contracts, there are changes to how contract modifications, termination clauses and purchase options are accounted for by us. In particular, under the previous standard, the cumulative impact from a contract modification on revenue already recorded is recognized in the period in which the modification is agreed. Under the new standard, the impact from certain types of modifications is recognized over the remaining life of the contract. The change in historical periods to our statements of income (loss) related to the adoption of the standard is summarized below: Three Months Ended Year Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2017 December 31, 2016 Revenue: Sales of goods $ 86 $ 13 $ 37 $ 27 $ 163 $ (26 ) Sales of services (50 ) (86 ) (33 ) (74 ) (243 ) (161 ) Total revenue 36 (73 ) 4 (47 ) (80 ) (187 ) Operating loss (14 ) (64 ) (6 ) (91 ) (175 ) (226 ) Net income (loss) and net income (loss) attributable to BHGE, LLC 1 (84 ) (10 ) (57 ) (150 ) (149 ) The increase (decrease) to our statement of financial position related to the adoption of the standard is summarized below: December 31, 2017 ASSETS Current receivables, net $ 1 Inventories, net (83 ) Contract and other deferred assets (701 ) Deferred income taxes 233 LIABILITIES AND EQUITY Progress collections and deferred income $ 394 All other current liabilities (64 ) Deferred income taxes (34 ) All other liabilities (83 ) Total equity (763 ) The cumulative impact to our retained earnings (included in our net parent investment) as of January 1, 2016 was a reduction of $432 million . On January 1, 2018, we adopted the FASB ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory . The ASU eliminated the deferral of tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes are recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The effect of the adoption of the standard was an increase to retained earnings of $67 million as of January 1, 2018 with no other impact to our financial statements. Future earnings will be reduced in total by this amount. The effect of the change on future transactions will depend on the nature and amount of future transactions as it will affect the timing of recognition of both tax expenses and tax benefits, with no change in the associated cash flows. On January 1, 2018, we adopted the FASB ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changed the income statement presentation of net periodic benefit cost by requiring separation between the service cost component and all other components. The service cost component is presented as an operating expense with other similar compensation costs arising for services rendered by the pertinent employees during the period. The non operating components are presented outside of income from operations. The change in historical periods to our statements of income (loss) related to the adoption of ASU No. 2017-07 is summarized below: Three Months Ended Year Ended March 31, 2018 March 31, 2017 December 31, 2017 December 31, 2016 Operating income (loss) $ (5 ) $ 2 $ (1 ) $ 24 Non operating income (loss) 5 (2 ) 1 (24 ) |
New Accounting Standards Adopted and To Be Adopted | NEW ACCOUNTING STANDARDS ADOPTED On January 1, 2018, we adopted the FASB ASU No. 2014-09, Revenue from Contracts with Customers, and the related amendments (ASC 606). We elected to adopt the new standard using the full retrospective method, where the standard was applied to each prior reporting period presented and the cumulative effect of applying the standard was recognized at January 1, 2016. This standard requires us to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time based on when control of goods and services transfer to a customer. As a result, we changed the presentation of our financial statements, including: (1) timing of revenue recognition, and (2) changes in classification between revenue and costs. The standard has no cash impact and, as such, does not affect the economics of our underlying customer contracts. Our policy on recognizing revenue is as follows: Revenue from Sale of Equipment Performance Obligations Satisfied Over Time We recognize revenue on agreements for sales of goods manufactured to unique customer specifications, including long-term construction projects, on an over-time basis utilizing cost inputs as the measurement criteria in assessing the progress toward completion. Our estimate of costs to be incurred to fulfill our promise to a customer is based on our history of manufacturing or constructing similar assets for customers and is updated routinely to reflect changes in quantity or pricing of the inputs. We begin to recognize revenue on these contracts when the contract specific inventory becomes customized for a customer, which is reflective of our initial transfer of control of the incurred costs. We provide for potential losses on any of these agreements when it is probable that we will incur the loss. Our billing terms for these over-time contracts vary, but are generally based on achieving specified milestones. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We recognize revenue for non-customized equipment at the point in time that the customer obtains control of the good, which is no earlier than when the customer has physical possession of the product. Equipment for which we recognize revenue at a point in time include goods we manufacture on a standardized basis for sale to the market. We use proof of delivery for certain large equipment with more complex logistics associated with the shipment, whereas the delivery of other equipment is determined based on historical data of transit times between regions. On occasion we sell products with a right of return. We use our accumulated experience to estimate and provide for such returns when we record the sale. In situations where arrangements include customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have concluded that the customer has control of the goods and that acceptance is likely to occur. Our billing terms for these point in time equipment contracts vary, but are generally based on shipment of the goods to the customer. Revenue from Sale of Services Performance Obligations Satisfied Over Time We sell product services under long-term product maintenance or extended warranty agreements in our Turbomachinery & Process Solutions and Oilfield Equipment segments. These agreements require us to maintain the customers' assets over the service agreement contract terms, which generally range from 10 to 20 years. In general, these are contractual arrangements to provide services, repairs, and maintenance of a covered unit (drilling rigs, gas or steam turbine or a combined cycle). These services are performed at various times during the life of the contract, thus the costs of performing services are incurred on other than a straight-line basis. We recognize related sales based on the extent of our progress toward completion measured by actual costs incurred in relation to total expected costs. We provide for any loss that we expect to incur on any of these agreements when that loss is probable. BHGE utilizes historical customer data, prior product performance data, statistical analysis, third-party data, and internal management estimates to calculate contract-specific margins. In certain contracts, the total transaction price is variable based on customer utilization, which is excluded from the contract margin until the period that the customer has utilized to appropriately reflect the revenue activity in the period earned. Our billing terms for these contracts are generally based on achieving certain milestones or upon the occurrence of a major maintenance event within the contract. The differences between the timing of our revenue recognized (based on costs incurred) and customer billings (based on contractual terms) results in changes to our contract asset or contract liability positions. Performance Obligations Satisfied at a Point In Time We sell certain tangible products, largely spare equipment, through our services business. We recognize revenues for this equipment at the point in time that the customer obtains control of the good, which is at the point in time we deliver the spare part to the customer. Our billing terms for these point in time service contracts vary, but are generally based on shipment of the goods to the customer. Impact of Adoption As a result of the adoption of the standard, the timing of revenue recognition on our long-term product service agreements is affected. Although we continue to recognize revenue over time on these contracts, there are changes to how contract modifications, termination clauses and purchase options are accounted for by us. In particular, under the previous standard, the cumulative impact from a contract modification on revenue already recorded is recognized in the period in which the modification is agreed. Under the new standard, the impact from certain types of modifications is recognized over the remaining life of the contract. The change in historical periods to our statements of income (loss) related to the adoption of the standard is summarized below: Three Months Ended Year Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2017 December 31, 2016 Revenue: Sales of goods $ 86 $ 13 $ 37 $ 27 $ 163 $ (26 ) Sales of services (50 ) (86 ) (33 ) (74 ) (243 ) (161 ) Total revenue 36 (73 ) 4 (47 ) (80 ) (187 ) Operating loss (14 ) (64 ) (6 ) (91 ) (175 ) (226 ) Net income (loss) and net income (loss) attributable to BHGE, LLC 1 (84 ) (10 ) (57 ) (150 ) (149 ) The increase (decrease) to our statement of financial position related to the adoption of the standard is summarized below: December 31, 2017 ASSETS Current receivables, net $ 1 Inventories, net (83 ) Contract and other deferred assets (701 ) Deferred income taxes 233 LIABILITIES AND EQUITY Progress collections and deferred income $ 394 All other current liabilities (64 ) Deferred income taxes (34 ) All other liabilities (83 ) Total equity (763 ) The cumulative impact to our retained earnings (included in our net parent investment) as of January 1, 2016 was a reduction of $432 million . On January 1, 2018, we adopted the FASB ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory . The ASU eliminated the deferral of tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes are recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The effect of the adoption of the standard was an increase to retained earnings of $67 million as of January 1, 2018 with no other impact to our financial statements. Future earnings will be reduced in total by this amount. The effect of the change on future transactions will depend on the nature and amount of future transactions as it will affect the timing of recognition of both tax expenses and tax benefits, with no change in the associated cash flows. On January 1, 2018, we adopted the FASB ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which changed the income statement presentation of net periodic benefit cost by requiring separation between the service cost component and all other components. The service cost component is presented as an operating expense with other similar compensation costs arising for services rendered by the pertinent employees during the period. The non operating components are presented outside of income from operations. The change in historical periods to our statements of income (loss) related to the adoption of ASU No. 2017-07 is summarized below: Three Months Ended Year Ended March 31, 2018 March 31, 2017 December 31, 2017 December 31, 2016 Operating income (loss) $ (5 ) $ 2 $ (1 ) $ 24 Non operating income (loss) 5 (2 ) 1 (24 ) NEW ACCOUNTING STANDARDS TO BE ADOPTED In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) : Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The ASU provides that the stranded tax effects from the Tax Cuts and Jobs Act on the balance of other comprehensive earnings may be reclassified to retained earnings. The ASU is effective for periods beginning after December 15, 2018, with an election to adopt early. We are evaluating the effect of the standard on our financial statements. 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 condensed consolidated and combined financial statements. All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations. |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of new accounting pronouncements | The change in historical periods to our statements of income (loss) related to the adoption of ASU No. 2017-07 is summarized below: Three Months Ended Year Ended March 31, 2018 March 31, 2017 December 31, 2017 December 31, 2016 Operating income (loss) $ (5 ) $ 2 $ (1 ) $ 24 Non operating income (loss) 5 (2 ) 1 (24 ) The change in historical periods to our statements of income (loss) related to the adoption of the standard is summarized below: Three Months Ended Year Ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2017 December 31, 2016 Revenue: Sales of goods $ 86 $ 13 $ 37 $ 27 $ 163 $ (26 ) Sales of services (50 ) (86 ) (33 ) (74 ) (243 ) (161 ) Total revenue 36 (73 ) 4 (47 ) (80 ) (187 ) Operating loss (14 ) (64 ) (6 ) (91 ) (175 ) (226 ) Net income (loss) and net income (loss) attributable to BHGE, LLC 1 (84 ) (10 ) (57 ) (150 ) (149 ) The increase (decrease) to our statement of financial position related to the adoption of the standard is summarized below: December 31, 2017 ASSETS Current receivables, net $ 1 Inventories, net (83 ) Contract and other deferred assets (701 ) Deferred income taxes 233 LIABILITIES AND EQUITY Progress collections and deferred income $ 394 All other current liabilities (64 ) Deferred income taxes (34 ) All other liabilities (83 ) Total equity (763 ) |
Revenues Related to Contracts27
Revenues Related to Contracts With Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregated revenue from contracts with customers by primary geographical markets | We disaggregate our revenue from contracts with customers by primary geographic markets. Three Months Ended March 31, Total Revenue 2018 2017 U.S. $ 1,483 $ 721 Non-U.S. 3,916 2,343 Total $ 5,399 $ 3,064 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
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 2,342 Inventories 1,706 Property, plant and equipment 4,571 Intangible assets (1) 4,078 All other assets 1,596 Liabilities Accounts payable (1,209 ) Borrowings (3,370 ) Deferred income taxes (2) (52 ) Liabilities for pension and other postretirement benefits (654 ) All other liabilities (1,421 ) Total identifiable net assets $ 11,720 Noncontrolling interest associated with net assets acquired (76 ) Goodwill (3) 13,154 Total purchase consideration $ 24,798 (1) 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 Trade name - Baker Hughes $ 2,100 Indefinite life Customer relationships 1,320 15 Patents and technology 465 10 In-process research and development 70 Indefinite life Capitalized software 62 3-7 Trade names - other 40 10 Favorable lease contracts & others 21 10 Total $ 4,078 (2) Includes approximately $162 million of net deferred tax liabilities related to the estimated fair value of intangible assets included in the preliminary purchase consideration and approximately $110 million of other net deferred tax assets, including non-U.S. loss carryforwards net of valuation allowances and offsetting liabilities for unrecognized benefits. (3) Goodwill represents the excess of the total purchase consideration over fair value of the net assets recognized and represents the future economic benefits that we believe will result from combining the operations of GE O&G and Baker Hughes, including expected future synergies and operating efficiencies. Goodwill resulting from the Transactions has been preliminarily allocated to the Oilfield Services segment, of which $67 million is deductible for tax purposes. |
Pro forma information | Significant adjustments to the pro forma information below include recognition of non-recurring direct incremental acquisition costs in 2016 and exclusion of those costs from all other periods presented; amortization associated with an estimate of the acquired intangible assets; 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. Three Months Ended March 31, 2017 Revenue $ 5,324 Net loss (17 ) Net loss attributable to the Company (14 ) |
Current Receivables (Tables)
Current Receivables (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Current receivables | Current receivables are comprised of the following: March 31, 2018 December 31, 2017 Customer receivables $ 4,732 $ 4,700 Related parties 813 914 Other 788 844 Total current receivables 6,333 6,458 Less: Allowance for doubtful accounts (346 ) (330 ) Total current receivables, net $ 5,987 $ 6,128 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory, Net [Abstract] | |
Inventories, net of reserves | Inventories, net of reserves of $372 million and $360 million as of March 31, 2018 and December 31, 2017 , respectively, are comprised of the following: March 31, 2018 December 31, 2017 Finished goods $ 2,527 $ 2,577 Work in process and raw material 2,169 1,930 Total inventories, net $ 4,696 $ 4,507 |
Goodwill and Other Intangible31
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The changes in the carrying value of goodwill are detailed below by segment: Oilfield Services Oilfield Equipment Turbo-machinery & Process Solutions Digital Solutions Total Balance at December 31, 2016, gross $ 2,779 $ 3,852 $ 1,814 $ 1,989 $ 10,434 Accumulated impairment at December 31, 2016 (2,633 ) (867 ) — (254 ) (3,754 ) Balance at December 31, 2016 146 2,985 1,814 1,735 6,680 Acquisition (1) 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 Purchase accounting adjustments (1) 376 — — — 376 Currency exchange and others 28 33 41 27 129 Balance at March 31, 2018 $ 13,336 $ 3,067 $ 1,947 $ 1,809 $ 20,159 (1) Includes goodwill associated with the acquisition of Baker Hughes. This amount and its allocations to segments are preliminary. |
Schedule of finite-lived intangible assets | Intangible assets are comprised of the following: March 31, 2018 December 31, 2017 Gross Accumulated Net Gross Accumulated Net Technology $ 1,118 $ (479 ) $ 639 $ 1,177 $ (440 ) $ 737 Customer relationships 3,279 (877 ) 2,402 3,202 (819 ) 2,383 Capitalized software 1,138 (753 ) 385 1,130 (697 ) 433 Trade names and trademarks 726 (192 ) 534 757 (159 ) 598 Other 14 (1 ) 14 10 — 10 Finite-lived intangible assets 6,275 (2,302 ) 3,974 6,276 (2,115 ) 4,161 Indefinite-lived intangible assets (1) 2,229 — 2,229 2,197 — 2,197 Total intangible assets $ 8,504 $ (2,302 ) $ 6,203 $ 8,473 $ (2,115 ) $ 6,358 (1) Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name. |
Schedule of indefinite-lived intangible assets | Intangible assets are comprised of the following: March 31, 2018 December 31, 2017 Gross Accumulated Net Gross Accumulated Net Technology $ 1,118 $ (479 ) $ 639 $ 1,177 $ (440 ) $ 737 Customer relationships 3,279 (877 ) 2,402 3,202 (819 ) 2,383 Capitalized software 1,138 (753 ) 385 1,130 (697 ) 433 Trade names and trademarks 726 (192 ) 534 757 (159 ) 598 Other 14 (1 ) 14 10 — 10 Finite-lived intangible assets 6,275 (2,302 ) 3,974 6,276 (2,115 ) 4,161 Indefinite-lived intangible assets (1) 2,229 — 2,229 2,197 — 2,197 Total intangible assets $ 8,504 $ (2,302 ) $ 6,203 $ 8,473 $ (2,115 ) $ 6,358 (1) Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name. |
Scheudle of finite-lived intangible assets, future amortization expense | Estimated amortization expense for the remainder of 2018 and each of the subsequent five fiscal years is expected to be as follows: Year Estimated Amortization Expense Remainder of 2018 $ 338 2019 375 2020 348 2021 300 2022 266 2023 247 |
Contract and Other Deferred A32
Contract and Other Deferred Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
Contract assets | NOTE 7. CONTRACT AND OTHER DEFERRED ASSETS A majority of our long-term product service agreements relate to our Turbomachinery & Process Solutions segment. Contract assets reflect revenue earned in excess of billings on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements and other deferred contract related costs. Contract assets are compri |
Progress Collections and Defe33
Progress Collections and Deferred Income (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Contract liabilities | Contract liabilities are comprised of the following: March 31, 2018 December 31, 2017 Progress collections $ 1,474 $ 1,456 Deferred income 202 319 Progress collections and deferred income (contract liabilities) (1) $ 1,676 $ 1,775 (1) Progress collections and deferred income (contract liabilities) was $2,038 million at January 1, 2017. |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Short-term and long-term borrowings | Short-term and long-term borrowings are comprised of the following: March 31, 2018 December 31, 2017 Short-term borrowings Short-term bank borrowings $ 124 $ 171 Current portion of long-term borrowings — 639 Short-term borrowings from GE 992 1,124 Other borrowings 60 103 Total short-term borrowings $ 1,176 $ 2,037 Long-term borrowings 3.2% Senior Notes due August 2021 $ 525 $ 526 2.773% Senior Notes due December 2022 1,245 1,244 8.55% Debentures due June 2024 134 135 3.337% Senior Notes due December 2027 1,343 1,342 6.875% Notes due January 2029 303 308 5.125% Notes due September 2040 1,310 1,311 4.08% Senior Notes due December 2047 1,337 1,337 Capital leases 79 87 Other long-term borrowings 20 22 Total long-term borrowings 6,296 6,312 Total borrowings $ 7,472 $ 8,349 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic costs | The components of net periodic cost (benefit) of plans sponsored by us are as follows for the three months ended March 31 : Pension Benefits 2018 2017 Service cost $ 5 $ 3 Interest cost 18 7 Expected return on plan assets (30 ) (10 ) Amortization of prior service credit — — Amortization of net actuarial (gain) loss 2 3 Net periodic cost (benefit) $ (5 ) $ 3 |
Members' Equity (Tables)
Members' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of changes in common units outstanding | 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, 2017 422,208 706,985 Issue of units to BHGE under equity incentive plan 382 — Repurchase of common units (1) (6,290 ) (10,524 ) Balance at March 31, 2018 416,300 696,460 (1) On November 2, 2017, BHGE's board of directors authorized us to repurchase up to $3 billion of our common units from BHGE and GE. During the three months ended March 31, 2018 , we repurchased 16,814,293 units for a total consideration of $500 million . At March 31, 2018, we had authorization remaining to repurchase up to approximately $2 billion of common units from BHGE and GE. |
Schedule of accumulated other comprehensive loss | The following tables present the changes in accumulated other comprehensive loss, net of tax: Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss Balance at December 31, 2017 $ 1 $ (1,824 ) $ 2 $ (60 ) $ (1,881 ) Other comprehensive income (loss) before reclassifications — 312 8 (3 ) 317 Amounts reclassified from accumulated other comprehensive income (loss) — — — — — Deferred taxes — — (1 ) — (1 ) Other comprehensive income (loss) — 312 7 (3 ) 316 Less: Other comprehensive income (loss) attributable to noncontrolling interests — — — — — Balance at March 31, 2018 $ 1 $ (1,512 ) $ 9 $ (63 ) $ (1,565 ) Investment Securities Foreign Currency Translation Adjustments Cash Flow Hedges Benefit Plans Accumulated Other Comprehensive Loss Balance at December 31, 2016 $ — $ (1,795 ) $ (10 ) $ (83 ) $ (1,888 ) Other comprehensive income (loss) before reclassifications 39 49 (2 ) (2 ) 84 Amounts reclassified from accumulated other comprehensive income (loss) 1 — 7 (2 ) 6 Deferred taxes (14 ) (3 ) (1 ) 3 (15 ) Other comprehensive income (loss) 26 46 4 (1 ) 75 Less: Other comprehensive income attributable to noncontrolling interests — — — 2 2 Balance at March 31, 2017 $ 26 $ (1,749 ) $ (6 ) $ (86 ) $ (1,815 ) |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Assets and liabilities measured at fair value on a recurring basis | Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities. March 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Net Balance Level 1 Level 2 Level 3 Net Balance Assets Derivatives $ — $ 205 $ — $ 205 $ — $ 150 $ — $ 150 Investment securities 75 — 326 401 81 8 304 393 Total assets 75 205 326 606 81 158 304 543 Liabilities Derivatives — (129 ) — (129 ) — (95 ) — (95 ) Total liabilities $ — $ (129 ) $ — $ (129 ) $ — $ (95 ) $ — $ (95 ) |
Reconciliation of recurring Level 3 fair value measurements | The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities: Balance at December 31, 2017 $ 304 Purchases 34 Proceeds at maturity (12 ) Balance at March 31, 2018 $ 326 |
Schedule of investment securities classified as available for sale | March 31, 2018 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Investment securities Non-U.S. debt securities $ 325 $ 1 $ — $ 326 $ 310 $ 2 $ — $ 312 Equity securities 75 — — 75 81 — — 81 Total $ 400 $ 1 $ — $ 401 $ 391 $ 2 $ — $ 393 |
Schedule of derivatives | The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives. March 31, 2018 December 31, 2017 Assets (Liabilities) Assets (Liabilities) Derivatives accounted for as hedges Currency exchange contracts $ 10 $ — $ 6 $ — Derivatives not accounted for as hedges Currency exchange contracts 195 (129 ) 144 (95 ) Total derivatives $ 205 $ (129 ) $ 150 $ (95 ) |
Carrying amount related to derivatives | The table below provides additional information about how derivatives are reflected in our condensed consolidated and combined financial statements. Carrying amount related to derivatives March 31, 2018 December 31, 2017 Derivative assets $ 205 $ 150 Derivative liabilities (129 ) (95 ) Net derivatives $ 76 $ 55 |
Carrying amount related to derivatives | The table below provides additional information about how derivatives are reflected in our condensed consolidated and combined financial statements. Carrying amount related to derivatives March 31, 2018 December 31, 2017 Derivative assets $ 205 $ 150 Derivative liabilities (129 ) (95 ) Net derivatives $ 76 $ 55 |
Effect of derivatives on earnings | The table below summarizes these offsets and the net effect on pre-tax earnings. Three Months Ended March 31, 2018 2017 Cash Flow Hedges Economic Hedges Cash Flow Hedges Economic Hedges Effect on hedging instrument $ (8 ) $ 17 $ 2 $ (8 ) Effect on underlying 8 (15 ) (2 ) 9 Effect on earnings (1) — 2 — 1 |
Schedule of hedging instrument, currency exchange contract | The table below summarizes this activity by hedging instrument. Three Months Ended March 31, 2018 2017 2018 2017 Gain (loss) recognized in AOCI Gain (loss) reclassified from AOCI to earnings Currency exchange contracts $ 8 $ (2 ) $ — $ (7 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Summarized financial information | Summarized financial information is shown in the following tables. Consistent accounting policies have been applied by all segments within the Company, for all reporting periods. The current period results may not be comparable to prior periods as the current period includes the results of Baker Hughes. Three Months Ended March 31, Segments revenue 2018 2017 Oilfield Services $ 2,678 $ 212 Oilfield Equipment 664 716 Turbomachinery & Process Solutions 1,460 1,644 Digital Solutions 598 491 Total $ 5,399 $ 3,064 The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and equity in loss of affiliate and before the following: net interest expense, net other non operating income (loss), corporate expenses, restructuring, impairment and other charges, inventory impairments, merger and related costs and certain gains and losses not allocated to the operating segments. Three Months Ended March 31, Segment income (loss) before income taxes 2018 2017 Oilfield Services $ 141 $ (57 ) Oilfield Equipment (6 ) 50 Turbomachinery & Process Solutions 119 252 Digital Solutions 73 84 Total segment 327 329 Corporate (98 ) (120 ) Inventory impairment (1) (61 ) (15 ) Restructuring, impairment and other (162 ) (42 ) Merger and related costs (46 ) (66 ) Other non operating income, net 2 8 Interest expense, net (46 ) (20 ) Total $ (85 ) $ 74 (1) Charges for inventory impairments are reported in the "Cost of goods sold" caption of the condensed consolidated and combined statements of income (loss). |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranties | An analysis of changes in the liability for product warranties are as follows: Balance at December 31, 2017, and 2016, respectively $ 164 $ 74 Provisions 10 6 Expenditures (7 ) (12 ) Other 2 — Balance at March 31, 2018, and 2017, respectively $ 169 $ 68 |
Restructuring, Impairment and40
Restructuring, Impairment and Other (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Impairment and Restructuring Charges | The amount of costs not included in the reported segment results is as follows: Three Months Ended March 31, 2018 2017 Oilfield Services $ 59 $ 12 Oilfield Equipment 12 1 Turbomachinery & Process Solutions 28 10 Digital Solutions 9 10 Corporate 17 2 Total $ 125 $ 35 These costs were primarily related to product line terminations, plant closures and related expenses such as property, plant and equipment impairments, contract terminations and costs of assets' and employees' relocation, employee-related termination benefits, and other incremental costs that were a direct result of the restructuring plans. Three Months Ended March 31, 2018 2017 Property, plant & equipment, net $ 19 $ 10 Employee-related termination expenses 83 15 Asset relocation costs 5 3 Environmental remediation costs 3 3 Contract termination fees 7 1 Other incremental costs 8 3 Total $ 125 $ 35 |
Basis of Presentation and Sum41
Basis of Presentation and Summary of Significant Accounting Policies (Details) Employee in Thousands, $ in Millions | Jan. 01, 2016USD ($) | Mar. 31, 2018USD ($)Employeecountry | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Accounting Policies [Abstract] | ||||||
Countries in which our business is conducted | country | 120 | |||||
Number of our employees | Employee | 64 | |||||
Business Acquisition [Line Items] | ||||||
Cumulative effect on retained earnings, net of tax | $ (432) | |||||
Restricted cash and cash equivalents held in bank accounts | $ 1,124 | $ 1,190 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Effect of adoption of ASU 2016-16 on taxes | [1] | 67 | ||||
Retained loss | (617) | (541) | ||||
Cash and cash equivalents | 5,614 | 7,026 | $ 1,027 | $ 981 | ||
GE Transaction Agreement | Baker Hughes Incorporated | ||||||
Business Acquisition [Line Items] | ||||||
Approximate interest to be acquired | 37.50% | |||||
GE | Related party amount, due to related party | ||||||
Business Acquisition [Line Items] | ||||||
Cash held on behalf of GE | 992 | 1,124 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cash and cash equivalents | 836 | 997 | ||||
Geographic distribution, foreign | GE | Related party amount, due to related party | ||||||
Business Acquisition [Line Items] | ||||||
Cash held on behalf of GE | $ 655 | 764 | ||||
Restricted Cash | $ 7 | |||||
Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Performance obligations expected to be satisfied, expected timing | 10 years | |||||
Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Performance obligations expected to be satisfied, expected timing | 20 years | |||||
Retained Loss | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Effect of adoption of ASU 2016-16 on taxes | [1] | $ 67 | ||||
[1] | See "Note 1. Basis of Presentation and Summary of Significant Accounting Policies" for further details. |
Basis of Presentation and Sum42
Basis of Presentation and Summary of Significant Accounting Policies - Revenue recognition standard, statements of income (loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Sales of goods | $ 3,160 | $ 2,239 | |||||
Sales of services | 2,239 | 825 | |||||
Revenue | 5,399 | 3,064 | |||||
Operating income (loss) | (41) | 86 | |||||
Net income (loss) attributable to Baker Hughes, a GE company, LLC | $ (143) | 68 | |||||
ASU 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Sales of goods | $ 86 | $ 13 | $ 37 | 27 | $ 163 | $ (26) | |
Sales of services | (50) | (86) | (33) | (74) | (243) | (161) | |
Revenue | 36 | (73) | 4 | (47) | (80) | (187) | |
Operating income (loss) | (14) | (64) | (6) | (91) | (175) | (226) | |
Net income (loss) attributable to Baker Hughes, a GE company, LLC | $ 1 | $ (84) | $ (10) | $ (57) | $ (150) | $ (149) |
Basis of Presentation and Sum43
Basis of Presentation and Summary of Significant Accounting Policies - Revenue recognition standard, statements of financial position (Details) - USD ($) $ in Millions | Jan. 01, 2016 | Mar. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Cumulative effect on retained earnings, net of tax | $ (432) | |||
Current receivables, net | $ 5,987 | $ 6,128 | ||
Inventories, net | 4,696 | 4,507 | ||
Contract and other deferred assets | 1,931 | 2,044 | ||
Deferred income taxes | 1,287 | 715 | ||
Progress collections and deferred income | 1,676 | 1,775 | $ 2,038 | |
All other current liabilities | 2,035 | 2,046 | ||
Deferred income taxes | 388 | 332 | ||
All other liabilities | 909 | 889 | ||
Total equity | $ 37,969 | 38,396 | ||
ASU 2014-09 | Difference between revenue guidance in effect before and after Topic 606 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Current receivables, net | 1 | |||
Inventories, net | (83) | |||
Contract and other deferred assets | (701) | |||
Deferred income taxes | 233 | |||
Progress collections and deferred income | 394 | |||
All other current liabilities | (64) | |||
Deferred income taxes | (34) | |||
All other liabilities | (83) | |||
Total equity | $ (763) |
Basis of Presentation and Sum44
Basis of Presentation and Summary of Significant Accounting Policies - New accounting policy (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income (loss) | $ (41) | $ 86 | ||
Other non operating income, net | 2 | 8 | ||
ASU 2017-07 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating income (loss) | (5) | 2 | $ (1) | $ 24 |
Other non operating income, net | $ 5 | $ (2) | $ 1 | $ (24) |
Revenues Related to Contracts45
Revenues Related to Contracts With Customers - Disaggregated revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 5,399 | $ 3,064 |
Performance obligations expected to be satisfied | 21,300 | |
U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,483 | 721 |
Non-U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 3,916 | $ 2,343 |
Revenues Related to Contracts46
Revenues Related to Contracts With Customers (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Disaggregation of Revenue [Line Items] | |
Performance obligations expected to be satisfied, percentage | 45.00% |
Performance obligations expected to be satisfied, expected timing | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Disaggregation of Revenue [Line Items] | |
Performance obligations expected to be satisfied, percentage | 60.00% |
Performance obligations expected to be satisfied, expected timing | 5 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Disaggregation of Revenue [Line Items] | |
Performance obligations expected to be satisfied, percentage | 90.00% |
Performance obligations expected to be satisfied, expected timing | 15 years |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) $ in Millions | Jul. 03, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Acquisition remeasurement, depreciation and amortization expense | $ 27 | |||
Transaction related costs | 46 | $ 66 | ||
GE Transaction Agreement | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | $ 24,798 | |||
Acquisition remeasurement, goodwill | 376 | |||
Acquisition remeasurement, PPE | 288 | |||
Acquisition remeasurement, intangible assets | $ (45) | |||
GE Transaction Agreement | Common Class A | ||||
Business Acquisition [Line Items] | ||||
Approximate interest to be acquired | 100.00% | |||
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% | |||
GE Transaction Agreement | Baker Hughes Incorporated | Common Class A | ||||
Business Acquisition [Line Items] | ||||
Approximate interest to be acquired | 37.50% | 37.50% |
Business Acquisition - Prelimin
Business Acquisition - Preliminary identifiable assets acquired and liabilities assumed (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Jul. 03, 2017 | Dec. 31, 2016 |
Liabilities | ||||
Goodwill (3) | $ 20,159 | $ 19,654 | $ 6,680 | |
GE Transaction Agreement | ||||
Assets | ||||
Cash and equivalents | $ 4,133 | |||
Current receivables | 2,342 | |||
Inventories | 1,706 | |||
Property, plant and equipment | 4,571 | |||
Intangible assets (1) | 4,078 | |||
All other assets | 1,596 | |||
Liabilities | ||||
Accounts payable | (1,209) | |||
Borrowings | (3,370) | |||
Deferred income taxes (2) | (52) | |||
Liabilities for pension and other postretirement benefits | (654) | |||
All other liabilities | (1,421) | |||
Total identifiable net assets | 11,720 | |||
Noncontrolling interest associated with net assets acquired | (76) | |||
Goodwill (3) | 13,154 | |||
Total purchase consideration | 24,798 | |||
Deferred tax assets | 162 | |||
Deferred tax asset, loss carryforward | 110 | |||
Tax deductible goodwill | $ 67 |
Business Acquisition - Estimate
Business Acquisition - Estimated fair value and average life (Details) - USD ($) $ in Millions | Jul. 03, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Other intangible assets, net | $ 6,203 | $ 6,358 | |
GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Other intangible assets, net | $ 4,078 | ||
Customer relationships | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 1,320 | ||
Estimated useful lives | 15 years | ||
Patents and technology | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 465 | ||
Estimated useful lives | 10 years | ||
Capitalized software | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 62 | ||
Trade names - other | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 40 | ||
Estimated useful lives | 10 years | ||
Favorable lease contracts & others | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Finite-lived Intangible Assets Acquired | $ 21 | ||
Estimated useful lives | 10 years | ||
Trade names and trademarks | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Indefinite-lived Intangible Assets Acquired | $ 2,100 | ||
In-process research and development | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Indefinite-lived Intangible Assets Acquired | $ 70 | ||
Minimum | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 1 year | ||
Minimum | Capitalized software | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 3 years | ||
Maximum | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 30 years | ||
Maximum | Capitalized software | GE Transaction Agreement | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 7 years |
Business Acquisition - Pro form
Business Acquisition - Pro forma (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Business Acquisition [Line Items] | ||
Net loss attributable to the Company | $ (143) | $ 66 |
GE Transaction Agreement | ||
Business Acquisition [Line Items] | ||
Business acquisition, pro forma revenue | 5,324 | |
Business acquisition, pro forma net income | (17) | |
Net loss attributable to the Company | $ (14) |
Current Receivables (Details)
Current Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | $ 6,333 | $ 6,458 |
Less: Allowance for doubtful accounts | (346) | (330) |
Total current receivables, net | 5,987 | 6,128 |
Customer receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | 4,732 | 4,700 |
Related parties | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | 813 | 914 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current receivables, gross | $ 788 | $ 844 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Inventory, Net [Abstract] | |||
Inventory valuation reserves | $ 372 | $ 360 | |
Finished goods | 2,527 | 2,577 | |
Work in process and raw material | 2,169 | 1,930 | |
Total inventories, net | 4,696 | $ 4,507 | |
Inventory impairment | $ 61 | $ 15 |
Goodwill and Other Intangible53
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||
Balance at December 31, 2016, gross | $ 10,434 | ||
Goodwill impairment | (3,754) | ||
Goodwill [Roll Forward] | |||
Goodwill, net, beginning balance | $ 19,654 | $ 6,680 | |
Goodwill, acquisition | 12,778 | ||
Goodwill, currency exchange and others | 129 | 196 | |
Goodwill, purchase accounting adjustments | 376 | ||
Goodwill, net, ending balance | 20,159 | 19,654 | |
Operating segments | Oilfield Services | |||
Goodwill [Line Items] | |||
Balance at December 31, 2016, gross | 2,779 | ||
Goodwill impairment | (2,633) | ||
Goodwill [Roll Forward] | |||
Goodwill, net, beginning balance | 12,932 | 146 | |
Goodwill, acquisition | 12,778 | ||
Goodwill, currency exchange and others | 28 | 8 | |
Goodwill, purchase accounting adjustments | 376 | ||
Goodwill, net, ending balance | 13,336 | 12,932 | |
Operating segments | Oilfield Equipment | |||
Goodwill [Line Items] | |||
Balance at December 31, 2016, gross | 3,852 | ||
Goodwill impairment | (867) | ||
Goodwill [Roll Forward] | |||
Goodwill, net, beginning balance | 3,034 | 2,985 | |
Goodwill, acquisition | 0 | ||
Goodwill, currency exchange and others | 33 | 49 | |
Goodwill, purchase accounting adjustments | 0 | ||
Goodwill, net, ending balance | 3,067 | 3,034 | |
Operating segments | Turbomachinery & Process Solutions | |||
Goodwill [Line Items] | |||
Balance at December 31, 2016, gross | 1,814 | ||
Goodwill impairment | 0 | ||
Goodwill [Roll Forward] | |||
Goodwill, net, beginning balance | 1,906 | 1,814 | |
Goodwill, acquisition | 0 | ||
Goodwill, currency exchange and others | 41 | 92 | |
Goodwill, purchase accounting adjustments | 0 | ||
Goodwill, net, ending balance | 1,947 | 1,906 | |
Operating segments | Digital Solutions | |||
Goodwill [Line Items] | |||
Balance at December 31, 2016, gross | 1,989 | ||
Goodwill impairment | $ (254) | ||
Goodwill [Roll Forward] | |||
Goodwill, net, beginning balance | 1,782 | 1,735 | |
Goodwill, acquisition | 0 | ||
Goodwill, currency exchange and others | 27 | 47 | |
Goodwill, purchase accounting adjustments | 0 | ||
Goodwill, net, ending balance | $ 1,809 | $ 1,782 |
Goodwill and Other Intangible54
Goodwill and Other Intangible Assets - Schedule of Intangible Assets by Type (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 6,275 | $ 6,276 |
Finite-lived intangible assets, accumulated amortization | (2,302) | (2,115) |
Finite-lived intangible assets, net | 3,974 | 4,161 |
Indefinite-lived intangible assets | 2,229 | 2,197 |
Intangible assets, gross | 8,504 | 8,473 |
Other intangible assets, net | 6,203 | 6,358 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1,118 | 1,177 |
Finite-lived intangible assets, accumulated amortization | (479) | (440) |
Finite-lived intangible assets, net | 639 | 737 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 3,279 | 3,202 |
Finite-lived intangible assets, accumulated amortization | (877) | (819) |
Finite-lived intangible assets, net | 2,402 | 2,383 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1,138 | 1,130 |
Finite-lived intangible assets, accumulated amortization | (753) | (697) |
Finite-lived intangible assets, net | 385 | 433 |
Trade names and trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 726 | 757 |
Finite-lived intangible assets, accumulated amortization | (192) | (159) |
Finite-lived intangible assets, net | 534 | 598 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 14 | 10 |
Finite-lived intangible assets, accumulated amortization | (1) | 0 |
Finite-lived intangible assets, net | $ 14 | $ 10 |
Goodwill and Other Intangible55
Goodwill and Other Intangible Assets - Schedule of Future Estimated Amortization Expense (Details) $ in Millions | Mar. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2018 | $ 338 |
2,019 | 375 |
2,020 | 348 |
2,021 | 300 |
2,022 | 266 |
2,023 | $ 247 |
Goodwill and Other Intangible56
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense for intangible assets included in net income | $ 139 | $ 63 | |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 1 year | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 30 years | ||
Trade names and trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense for intangible assets included in net income | $ 37 | ||
GE Transaction Agreement | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense for intangible assets included in net income | $ 35 | ||
Expected | Trade names and trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense for intangible assets included in net income | $ 34 |
Contract and Other Deferred A57
Contract and Other Deferred Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jan. 01, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenue in excess of billings | $ 1,723 | $ 1,684 | $ 1,233 | |
Deferred inventory costs (3) | 208 | 360 | $ 276 | |
Contract and other deferred assets | 1,931 | 2,044 | ||
Contract with customer, performance obligations satisfied in previous periods | 10 | $ 30 | ||
Long-term product service agreements | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenue in excess of billings | 615 | 589 | ||
Long-term equipment contract revenue (1) | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenue in excess of billings | $ 1,108 | $ 1,095 |
Progress Collections and Defe58
Progress Collections and Deferred Income (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jan. 01, 2017 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||||
Progress collections | $ 1,474 | $ 1,456 | ||
Deferred income | 202 | 319 | ||
Progress collections and deferred income (contract liabilities) (1) | 1,676 | $ 1,775 | $ 2,038 | |
Revenue recognized, included in contract liability | $ 602 | $ 529 |
Borrowings - Short-term and lon
Borrowings - Short-term and long-term borrowings (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | |
Short-term borrowings | |||
Current portion of long-term borrowings | $ 0 | $ 639 | |
Total short-term borrowings | [1] | 1,176 | 2,037 |
Long-term borrowings | |||
Capital leases | 79 | 87 | |
Other Long-term Debt | 20 | 22 | |
Total long-term borrowings | 6,296 | 6,312 | |
Total borrowings | $ 7,472 | 8,349 | |
3.2% Senior Notes due August 2021 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 3.20% | ||
8.55% Debentures due June 2024 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 8.55% | ||
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% | ||
Senior Notes | 3.2% Senior Notes due August 2021 | |||
Long-term borrowings | |||
Long-term borrowings | $ 525 | 526 | |
Senior Notes | 2.773% Senior Notes due December 2022 | |||
Long-term borrowings | |||
Long-term borrowings | 1,245 | 1,244 | |
Senior Notes | 3.337% Senior Notes due December 2027 | |||
Long-term borrowings | |||
Long-term borrowings | 1,343 | 1,342 | |
Senior Notes | 6.875% Notes due January 2029 | |||
Long-term borrowings | |||
Long-term borrowings | 303 | 308 | |
Senior Notes | 5.125% Notes due September 2040 | |||
Long-term borrowings | |||
Long-term borrowings | 1,310 | 1,311 | |
Senior Notes | 4.08% Senior Notes due December 2047 | |||
Long-term borrowings | |||
Long-term borrowings | 1,337 | 1,337 | |
Debentures | 8.55% Debentures due June 2024 | |||
Long-term borrowings | |||
Long-term borrowings | 134 | 135 | |
Short-term bank borrowings | |||
Short-term borrowings | |||
Short-term borrowings | 124 | 171 | |
Short-term borrowings from GE | |||
Short-term borrowings | |||
Short-term borrowings | 992 | 1,124 | |
Other borrowings | |||
Short-term borrowings | |||
Short-term borrowings | $ 60 | $ 103 | |
[1] | Total assets include $992 million and $1,124 million of assets held on behalf of GE, of which $836 million and $997 million is cash and cash equivalents and $156 million and $127 million is investment securities at March 31, 2018 and December 31, 2017, respectively, and a corresponding amount of liability is reported in short-term borrowings. See "Note 15. Related Party Transactions" for further details. |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) - USD ($) | Jul. 03, 2017 | Jan. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Dec. 11, 2017 |
Line of Credit Facility [Line Items] | |||||
Estimated fair value of debt | $ 8,466,000,000 | $ 7,320,000,000 | |||
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 | ||||
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] | |||||
Stated interest rate | 3.337% | ||||
BHGE LLC | Senior Notes | 4.08% Senior Notes due December 2047 | |||||
Line of Credit Facility [Line Items] | |||||
Stated interest rate | 4.08% | ||||
BHGE LLC | Private placement | Senior Notes | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face | $ 3,950,000,000 | ||||
BHGE LLC | Private placement | Senior Notes | Senior Notes Due 2018 | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, principal | $ 615,000,000 | ||||
Payments for repurchase of debts | 637,000,000 | ||||
Debt instrument, face | 639,000,000 | ||||
Gain (loss) on repurchase of debt | 2,000,000 | ||||
BHGE LLC | Private placement | Senior Notes | GE Transaction Agreement | Senior Notes Due 2018 | |||||
Line of Credit Facility [Line Items] | |||||
Business acquisition, step-up adjustment | $ 24,000,000 | ||||
Baker Hughes Co-Obligor, Inc. | BHGE LLC | |||||
Line of Credit Facility [Line Items] | |||||
Ownership percentage | 100.00% |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - Pension Benefits | 3 Months Ended | |
Mar. 31, 2018USD ($)plan | Mar. 31, 2017USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Multiemployer plan, contributions by employer | $ | $ 37,000,000 | $ 26,000,000 |
Pension assets or obligations, threshold, per plan | $ | $ 20,000,000 | |
U.S. | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Number of plans | plan | 7 | |
Non-U.S. Pension Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Number of plans | plan | 6 |
Employee Benefit Plans - Net pe
Employee Benefit Plans - Net period cost (Details) - Pension Benefits - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Components of net periodic benefit cost [Abstract] | ||
Service cost | $ 5 | $ 3 |
Interest cost | 18 | 7 |
Expected return on plan assets | (30) | (10) |
Amortization of prior service credit | 0 | 0 |
Amortization of net actuarial (gain) loss | 2 | 3 |
Net periodic cost (benefit) | $ (5) | $ 3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 38 | $ 8 |
U.S. income tax rate | 21.00% | |
Losses with no tax benefit | $ 58 | |
General Electric Oil & Gas | U.S. and Foreign Authorities | ||
Investments, Owned, Federal Income Tax Note [Line Items] | ||
Business combination, earnings attributable to tax, before tax, percent | 100.00% |
Members' Equity (Details)
Members' Equity (Details) - shares shares in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Class of Stock [Line Items] | |||
Common unit, issued (in units) | 1,113,000 | 1,129,000 | 382 |
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% |
Members' Equity - Changes in Nu
Members' Equity - Changes in Number of Shares Outstanding (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Nov. 02, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Common units repurchase, authorized amount | $ 2,000 | $ 3,000 |
Common units repurchase, units repurchased (in units) | (16,814,293) | |
Common units repurchase, amount repurchased | $ 500 | |
Baker Hughes, a GE Company (BHGE | Common Units | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance (in shares) | 422,208,000 | |
Repurchase of common units (1) | (6,290,000) | |
Ending Balance (in shares) | 416,300,000 | |
Baker Hughes, a GE Company (BHGE | Restricted Stock Units (RSUs) | Common Units | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Issue of units to BHGE under equity incentive plan | 382,000 | |
General Electric Company | Common Units | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance (in shares) | 706,985,000 | |
Repurchase of common units (1) | (10,524,000) | |
Ending Balance (in shares) | 696,460,000 | |
General Electric Company | Restricted Stock Units (RSUs) | Common Units | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Issue of units to BHGE under equity incentive plan | 0 |
Members' Equity - Accumulated O
Members' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | $ 38,396 | |
Other comprehensive income (loss) | 316 | $ 75 |
Less: Other comprehensive income attributable to noncontrolling interests | 0 | (2) |
Ending Balance | 37,969 | |
Investment Securities, Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | 1 | 0 |
Ending Balance | 1 | 26 |
Investment Securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss) before reclassifications | 0 | 39 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 1 |
Deferred taxes | 0 | (14) |
Other comprehensive income (loss) | 0 | 26 |
Investment Securities, Noncontrolling Interest | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Less: Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
Foreign Currency Translation Adjustment, Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | (1,824) | (1,795) |
Ending Balance | (1,512) | (1,749) |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss) before reclassifications | 312 | 49 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
Deferred taxes | 0 | (3) |
Other comprehensive income (loss) | 312 | 46 |
Foreign Currency Translation Adjustment, Noncontrolling Interest | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Less: Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
Cash Flow Hedges, Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | 2 | (10) |
Ending Balance | 9 | (6) |
Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss) before reclassifications | 8 | (2) |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 7 |
Deferred taxes | (1) | (1) |
Other comprehensive income (loss) | 7 | 4 |
Cash Flow Hedges, Noncontrolling Interest | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Less: Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
Benefit Plans, Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | (60) | (83) |
Ending Balance | (63) | (86) |
Benefit Plans | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss) before reclassifications | (3) | (2) |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | (2) |
Deferred taxes | 0 | 3 |
Other comprehensive income (loss) | (3) | (1) |
Benefit Plans, Noncontrolling Interest | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Less: Other comprehensive income attributable to noncontrolling interests | 0 | 2 |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balance | (1,881) | (1,888) |
Other comprehensive income (loss) | 316 | 73 |
Ending Balance | (1,565) | (1,815) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss) before reclassifications | 317 | 84 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 6 |
Deferred taxes | (1) | (15) |
Other comprehensive income (loss) | 316 | 75 |
Accumulated Other Comprehensive Income (Loss), Noncontrolling Interest | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Less: Other comprehensive income attributable to noncontrolling interests | $ 0 | $ 2 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, notional amount | $ 11,300 | $ 10,200 |
Derivative, notional amount, net | 3,000 | $ 3,300 |
Derivative, transfer to earnings | $ 7 | |
Cash flow hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, term | 2 years | 3 years |
Related party amount, due to related party | GE | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Investment securities | $ 156 | $ 127 |
Non-U.S. debt securities | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, term | 3 years |
Financial Instruments - Recurri
Financial Instruments - Recurring fair value measurements (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 205 | $ 150 |
Assets, fair value | 205 | 150 |
Derivative liability | (129) | (95) |
Liabilities, fair value | (129) | (95) |
Fair value, measurements, recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 205 | 150 |
Investment securities | 401 | 393 |
Assets, fair value | 606 | 543 |
Derivative liability | (129) | (95) |
Liabilities, fair value | (129) | (95) |
Fair value, measurements, recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Investment securities | 75 | 81 |
Assets, fair value | 75 | 81 |
Derivative liability | 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 | 205 | 150 |
Investment securities | 0 | 8 |
Assets, fair value | 205 | 158 |
Derivative liability | (129) | (95) |
Liabilities, fair value | (129) | (95) |
Fair value, measurements, recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Investment securities | 326 | 304 |
Assets, fair value | 326 | 304 |
Derivative liability | 0 | 0 |
Liabilities, fair value | $ 0 | $ 0 |
Financial Instruments - Reconci
Financial Instruments - Reconciliation of recurring Level 3 fair value measurements (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Beginning balance | $ 304 |
Purchases | 34 |
Proceeds at maturity | (12) |
Ending balance | $ 326 |
Financial Instruments - Investm
Financial Instruments - Investment Securities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, amortized cost | $ 400 | $ 391 |
Available-for-sale, gross unrealized gains | 1 | 2 |
Available-for-sale, gross unrealized losses | 0 | 0 |
Available-for-sale, estimated fair value | 401 | 393 |
Non-U.S. debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, amortized cost | 325 | 310 |
Available-for-sale, gross unrealized gains | 1 | 2 |
Available-for-sale, gross unrealized losses | 0 | 0 |
Available-for-sale, estimated fair value | 326 | 312 |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale, amortized cost | 75 | 81 |
Available-for-sale, gross unrealized gains | 0 | 0 |
Available-for-sale, gross unrealized losses | 0 | 0 |
Available-for-sale, estimated fair value | $ 75 | $ 81 |
Financial Instruments - Derivat
Financial Instruments - Derivatives and hedging (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Assets, fair value | $ 205 | $ 150 |
Liabilities, fair value | (129) | (95) |
Currency exchange contracts | Designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Assets, fair value | 10 | 6 |
Liabilities, fair value | 0 | 0 |
Currency exchange contracts | Not designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Assets, fair value | 195 | 144 |
Liabilities, fair value | $ (129) | $ (95) |
Financial Instruments - Deriv72
Financial Instruments - Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative assets | $ 205 | $ 150 |
Derivative liability | (129) | (95) |
Derivative Assets (Liabilities), at Fair Value, Net | $ 76 | $ 55 |
Financial Instruments - Hedges
Financial Instruments - Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Designated as hedging instrument | Cash flow hedging | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Effect on hedging instrument | $ (8) | $ 2 |
Effect on underlying | 8 | (2) |
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 | 17 | (8) |
Effect on underlying | (15) | 9 |
Effect on earnings (1) | $ 2 | $ 1 |
Financial Instruments - Cash fl
Financial Instruments - Cash flow hedges (Details) - Cash flow hedging - Currency exchange contracts - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in AOCI | $ 8 | $ (2) |
Gain (loss) reclassified from AOCI to earnings | $ 0 | $ (7) |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 4 |
Segment Information - Operating
Segment Information - Operating profit (loss) by segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summarized financial information [Abstract] | ||
Revenue | $ 5,399 | $ 3,064 |
Income (loss) before income taxes and equity in loss of affiliate | (85) | 74 |
Inventory impairment (1) | (61) | (15) |
Merger and related costs | (46) | (66) |
Other non operating income, net | 2 | 8 |
Interest expense, net | (46) | (20) |
Operating segments | ||
Summarized financial information [Abstract] | ||
Revenue | 5,399 | 3,064 |
Income (loss) before income taxes and equity in loss of affiliate | 327 | 329 |
Corporate | ||
Summarized financial information [Abstract] | ||
Income (loss) before income taxes and equity in loss of affiliate | (98) | (120) |
Segment Reconciling Items | ||
Summarized financial information [Abstract] | ||
Inventory impairment (1) | (61) | (15) |
Restructuring, impairment and other | (162) | (42) |
Merger and related costs | (46) | (66) |
Other non operating income, net | 2 | 8 |
Interest expense, net | (46) | (20) |
Oilfield Services | Operating segments | ||
Summarized financial information [Abstract] | ||
Revenue | 2,678 | 212 |
Income (loss) before income taxes and equity in loss of affiliate | 141 | (57) |
Oilfield Equipment | Operating segments | ||
Summarized financial information [Abstract] | ||
Revenue | 664 | 716 |
Income (loss) before income taxes and equity in loss of affiliate | (6) | 50 |
Turbomachinery & Process Solutions | Operating segments | ||
Summarized financial information [Abstract] | ||
Revenue | 1,460 | 1,644 |
Income (loss) before income taxes and equity in loss of affiliate | 119 | 252 |
Digital Solutions | Operating segments | ||
Summarized financial information [Abstract] | ||
Revenue | 598 | 491 |
Income (loss) before income taxes and equity in loss of affiliate | $ 73 | $ 84 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Cash and cash equivalents | $ 5,614 | $ 1,027 | $ 7,026 | $ 981 | |
Income tax obligation | 38 | $ 8 | |||
GE Transaction Agreement | |||||
Related Party Transaction [Line Items] | |||||
Cash repayment, threshold | $ 100 | ||||
GE Transaction Agreement | General Electric Company | |||||
Related Party Transaction [Line Items] | |||||
Percentage of tax benefits | 100.00% | ||||
Approximate interest to be acquired | 62.50% | 62.50% | |||
GE Transaction Agreement | Baker Hughes Incorporated | |||||
Related Party Transaction [Line Items] | |||||
Approximate interest to be acquired | 37.50% | ||||
GE Capital accounts payable program | |||||
Related Party Transaction [Line Items] | |||||
Accounts payable, related party | $ 346 | $ 293 | |||
Accounts Payable, GE and its affiliates | |||||
Related Party Transaction [Line Items] | |||||
Accounts payable, related party | 556 | 575 | |||
GE | GE’s corporate overhead | |||||
Related Party Transaction [Line Items] | |||||
Selling, general and administrative expenses, agreement | $ 55 | ||||
GE | Intercompany Services Agreement | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction | 14 | $ 38 | |||
GE | Sales of products and services, GE and its affiliates | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 100 | 149 | |||
GE | Purchases, GE and its affiliates | |||||
Related Party Transaction [Line Items] | |||||
Related party purchases | 403 | $ 346 | |||
GE | Related party amount, due to related party | |||||
Related Party Transaction [Line Items] | |||||
Cash held on behalf of GE | 992 | 1,124 | |||
Cash and cash equivalents | 836 | 997 | |||
Investment securities | $ 156 | $ 127 | |||
Common Class B | GE Transaction Agreement | General Electric Company | |||||
Related Party Transaction [Line Items] | |||||
Approximate interest to be acquired | 62.50% | ||||
Common Class A | GE Transaction Agreement | |||||
Related Party Transaction [Line Items] | |||||
Approximate interest to be acquired | 100.00% | ||||
Common Class A | GE Transaction Agreement | Baker Hughes Incorporated | |||||
Related Party Transaction [Line Items] | |||||
Approximate interest to be acquired | 37.50% | 37.50% | |||
U.S. and Foreign Authorities | General Electric Company | |||||
Related Party Transaction [Line Items] | |||||
Income tax obligation | $ 33 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands, € in Millions | Feb. 17, 2017USD ($) | Aug. 03, 2016USD ($) | Jan. 31, 2018USD ($) | Mar. 31, 2018USD ($)shares | Mar. 31, 2018EUR (€) |
Loss Contingencies [Line Items] | |||||
Off-balance sheet arrangements | $ 3,700,000 | ||||
Equipment failure | Pending litigation | Natural Gas Storage System in Northern Germany | |||||
Loss Contingencies [Line Items] | |||||
Marginal rate on annual prime rate (percent) | 5.00% | ||||
Value of alleged damages sought | $ 224,000 | ||||
Breach of contract | Pending litigation | Saniteq LLC v. GE Infrastructure Sensing, Inc. | |||||
Loss Contingencies [Line Items] | |||||
Value of alleged damages sought | $ 500,000 | ||||
Damage from fire | Pending litigation | INOES and Naphtachimie [Member] | |||||
Loss Contingencies [Line Items] | |||||
Value of alleged damages sought | € | € 250 | ||||
GE Transaction Agreement | Pending litigation | |||||
Loss Contingencies [Line Items] | |||||
Common stock, shares outstanding, appraisal rights (in shares) | shares | 1,875,000 | ||||
Environmental proceedings | Taft, California | |||||
Loss Contingencies [Line Items] | |||||
Environmental proposed penalty | $ 130 | ||||
Environmental penalty | $ 80 |
Commitments and Contingencies79
Commitments and Contingencies - Schedule of Product Warranties (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 164 | $ 74 |
Provisions | 10 | 6 |
Expenditures | (7) | (12) |
Other | 2 | 0 |
Ending balance | $ 169 | $ 68 |
Restructuring, Impairment and80
Restructuring, Impairment and Other - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | ||
Restructuring, impairment and other | $ 162 | $ 42 |
Restructuring charges | 125 | 35 |
Estimated remaining charges | 173 | |
Restructuring, impairment and other charges | ||
Restructuring Cost and Reserve [Line Items] | ||
Other asset impairment charges and foreign currency translation gain (loss), realized | $ 37 | 7 |
Currency gain (loss) | $ (6) |
Restructuring, Impairment and81
Restructuring, Impairment and Other - Schedule of Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | $ 125 | $ 35 |
Property, plant & equipment, net | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | 19 | 10 |
Employee-related termination expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | 83 | 15 |
Asset relocation costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | 5 | 3 |
Environmental remediation costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | 3 | 3 |
Contract termination fees | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | 7 | 1 |
Other incremental costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | 8 | 3 |
Corporate | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | 17 | 2 |
Oilfield Services | Operating segments | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | 59 | 12 |
Oilfield Equipment | Operating segments | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | 12 | 1 |
Turbomachinery & Process Solutions | Operating segments | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | 28 | 10 |
Digital Solutions | Operating segments | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring charges | $ 9 | $ 10 |