BAKER HUGHES a GE (BHI) 10-Q 10 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010	Jun. 30, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	BAKER HUGHES INC
Entity Central Index Key	0000808362
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$11,257,160,000
Entity Common Stock, Shares Outstanding		429,045,990

Consolidated Condensed Statemen

Consolidated Condensed Statements of Operations (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Revenues:
Sales	$1,253	$1,311
Services and rentals	1,286	1,357
Total revenues	2,539	2,668
Costs and expenses:
Cost of sales	943	1,027
Cost of services and rentals	969	933
Research and engineering	94	109
Marketing, general and administrative	305	281
Acquisition-related costs	10
Total costs and expenses	2,321	2,350
Operating income	218	318
Interest expense	(25)	(35)
Interest income	1	1
Income before income taxes	194	284
Income taxes	(65)	(89)
Net income	$129	$195
Basic earnings per share	0.41	0.63
Diluted earnings per share	0.41	0.63
Cash dividends per share	0.15	0.15

Consolidated Condensed Balance

Consolidated Condensed Balance Sheets (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Current Assets:
Cash and cash equivalents	$1,614	$1,595
Accounts receivable - less allowance for doubtful accounts (2010 - $143; 2009 - $157)	2,464	2,331
Inventories, net	1,952	1,836
Deferred income taxes	268	268
Other current assets	223	195
Total current assets	6,521	6,225
Property, plant and equipment, net	3,051	3,161
Goodwill	1,419	1,418
Intangible assets, net	185	195
Other assets	454	440
Total assets	11,630	11,439
Current Liabilities:
Accounts payable	858	821
Short-term borrowings	232	15
Accrued employee compensation	420	448
Income taxes payable	37	95
Other accrued liabilities	245	234
Total current liabilities	1,792	1,613
Long-term debt	1,788	1,785
Deferred income taxes and other tax liabilities	261	309
Liabilities for pensions and other postretirement benefits	369	379
Other liabilities	73	69
Commitments and contingencies
Stockholders' Equity:
Common stock	312	312
Capital in excess of par value	890	874
Retained earnings	6,594	6,512
Accumulated other comprehensive loss	(449)	(414)
Total stockholders' equity	7,347	7,284
Total liabilities and stockholders' equity	$11,630	$11,439

1_Consolidated Condensed Balanc

Consolidated Condensed Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
Current Assets:
Allowance for doubtful accounts	$143	$157

2_Consolidated Condensed Statem

Consolidated Condensed Statements of Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash flows from operating activities:
Net income	$129	$195
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	189	173
Stock-based compensation costs	19	23
Provision (benefit) for deferred income taxes	(40)	10
Gain on disposal of assets	(29)	(21)
Net provision for doubtful accounts	(2)	29
Changes in operating assets and liabilities:
Accounts receivable	(154)	229
Inventories	(47)	(96)
Accounts payable	56	(145)
Accrued employee compensation and other accrued liabilities	(22)	(171)
Income taxes payable	(53)	(161)
Other	(41)	(31)
Net cash flows from operating activities	5	34
Cash flows from investing activities:
Expenditures for capital assets	(190)	(281)
Proceeds from disposal of assets	45	47
Net cash flows from investing activities	(145)	(234)
Cash flows from financing activities:
Net borrowings of commercial paper and other short-term debt	218	4
Repayment of long-term debt		(525)
Proceeds from issuance of common stock	2
Dividends	(47)	(46)
Excess tax benefits from stock-based compensation costs	1
Net cash flows from financing activities	174	(567)
Effect of foreign exchange rate changes on cash	(15)	(9)
Increase/(decrease) in cash and cash equivalents	19	(776)
Cash and cash equivalents, beginning of period	1,595	1,955
Cash and cash equivalents, end of period	1,614	1,179
Supplemental cash flows disclosures:
Income taxes paid (net of refunds)	158	249
Interest paid	20	33
Supplemental disclosure of noncash investing activities:
Capital expenditures included in accounts payable	$15	$21

General

General
	3 Months Ended Mar. 31, 2010
General [Abstract]
GENERAL	NOTE 1. GENERAL Nature of Operations Baker Hughes Incorporated (Company, we, our or us) is engaged in the oilfield services industry. We are a major supplier of wellbore-related products and technology services and systems and provide products and services for drilling, formation evaluation, completion and production, and reservoir technology and consulting to the worldwide oil and natural gas industry. Basis of Presentation Our unaudited consolidated condensed financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) have been condensed or omitted. We believe that the presentations and disclosures herein are adequate to make the information not misleading. The unaudited consolidated condensed financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim periods. These unaudited consolidated condensed financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December31, 2009 (2009 Annual Report). The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. In the notes to the unaudited consolidated condensed financial statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. New Accounting Standards In October2009, the Financial Accounting Standards Board (FASB) issued an update to Accounting Standards Codification (ASC) 605, Revenue Recognition Multiple Deliverable Revenue Arrangements. This Accounting Standards Update (ASU) addresses accounting for multiple-deliverable arrangements to enable vendors to account for deliverables separately. The provision establishes a selling price hierarchy for determining the selling price of a deliverable. This update requires expanded disclosures for multiple deliverable revenue arrangements. The ASU will be effective for revenue arrangements entered into or materially modified in fiscal years beginning on or after June15, 2010. We have not determined the impact, if any, on our consolidated condensed financial statements. In January2010, the FASB issued an update to ASC 820, Fair Value Measurements and Disclosures- Improving Disclosures about Fair Value Measurements. This update provides a greater level of enhanced information and disclosures about valuation techniques and inputs to fair value measurements. The new disclosures are effective for interim and annual reporting periods beginning after December15, 2009. We adopted the new disclosure requirements in the first quarter of 2010 as reflected in Note 8. Fair Value of Certain Financial Assets and Liabilities. Disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in

Subsequent Event - Merger With

Subsequent Event - Merger With BJ Services Company
	3 Months Ended Mar. 31, 2010
Subsequent Event - Merger With BJ Services Company [Abstract]
Subsequent Event - Merger With BJ Services Company	NOTE 2. SUBSEQUENT EVENTMERGER WITH BJ SERVICES COMPANY On April28, 2010 (the Closing Date), we completed a cash and stock merger with BJ Services Company (BJ Services) whereby we acquired 100% of the outstanding common stock of BJ Services, a leading provider of pressure pumping and oilfield services. The merger consideration totaled $6.9 billion based on the closing price of our stock on April28, 2010. Under the terms of the merger agreement, each share of BJ Services common stock was converted into 0.40035 shares of our common stock and $2.69 in cash. In total, we paid out $0.8billion in cash, issued 118.0million shares, valued at $6.1billion based upon the closing price of our common stock on the Closing Date, and assumed outstanding stock options held by BJ Services employees and directors. We also guaranteed $500million of long-term debt of BJ Services. The merger will be accounted for using the acquisition method of accounting. Under the acquisition method of accounting, we are required to allocate the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values at the Closing Date. The excess of the purchase price over those fair values is recorded as goodwill. We are in the process of valuing the assets acquired and liabilities assumed. Assuming the merger with BJ Services occurred on January1, 2010 and January1, 2009, pro forma revenues of the Company for the three months ended March31, 2010 and 2009 would have been approximately $3.6billion and $3.7billion, respectively. Other disclosures required by ASC 805, Business Combinations, will be provided once the initial accounting for the merger is complete. Pursuant to a final agreement with the Antitrust Division of the Department Of Justice (DOJ) in connection with the governmental approval of the merger between us and BJ Services, we are required to divest two chartered stimulation vessels (the HR Hughes and Blue Ray) and certain other assets used to perform sand control services in the U.S. Gulf of Mexico. Pursuant to a Hold Separate Stipulation and Order, the operation of our U.S. business and the U.S. business of BJ Services will be required to be operated separately until these assets are divested. We do not expect the divestiture to be material to the business or financial performance of the combined company following the merger. Unless otherwise noted, all disclosures in the notes to unaudited consolidated condensed financial statements exclude any information related to and any potential impact that may result from the merger.

Stock-Based Compensation

Stock-Based Compensation
	3 Months Ended Mar. 31, 2010
Stock-Based Compensation [Abstract]
STOCK-BASED COMPENSATION	NOTE 3. STOCK-BASED COMPENSATION We grant various forms of equity based awards to directors, officers and other key employees. These equity based awards consist primarily of stock options, restricted stock awards and restricted stock units. The fair value of each stock option granted is estimated on the date of grant using a Black-Scholes option pricing model. The fair value of restricted stock awards and units is based on the market price of our common stock on the date of grant. We also have an Employee Stock Purchase Plan (ESPP) available for eligible employees to purchase shares of our common stock. Effective January1, 2010, the ESPP provides for shares to be purchased: (i)on June30th of each year at a 15% discount of the fair market value of our common stock on January 1st or June30th, whichever is lower, and (ii)on December31st of each year at a 15% discount of fair market value of our common stock on July 1st or December31st, whichever is lower. Also effective January1, 2010, an employee may not contribute more than $5,000 in either of the six-month measurement periods described above or $10,000 annually. The following summarizes stock-based compensation expense recognized in our consolidated condensed statements of operations: Three Months Ended March 31, 2010 2009 Stock Options $ 7 $ 7 Restricted Stock Awards and Units 10 10 ESPP 2 6 Total $ 19 $ 23

Earnings Per Share

Earnings Per Share
	3 Months Ended Mar. 31, 2010
Earnings Per Share [Abstract]
EARNINGS PER SHARE	NOTE 4. EARNINGS PER SHARE A reconciliation of the number of shares used for the basic and diluted earnings per share (EPS) calculation is as follows: Three Months Ended March 31, 2010 2009 Weighted average common shares outstanding for basic EPS 313 310 Effect of dilutive securities stock plans Adjusted weighted average common shares outstanding for diluted EPS 313 310 Future potentially dilutive shares excluded from diluted EPS: Options with an exercise price greater than average market price for the period 2 3

Inventories

Inventories
	3 Months Ended Mar. 31, 2010
Inventories [Abstract]
INVENTORIES	NOTE 5. INVENTORIES Inventories, net of reserves, are comprised of the following: March 31, December 31, 2010 2009 Finished goods $ 1,670 $ 1,570 Work in process 139 126 Raw materials 143 140 Total $ 1,952 $ 1,836

Property, Plant and Equipment

Property, Plant and Equipment
	3 Months Ended Mar. 31, 2010
Property, Plant and Equipment [Abstract]
PROPERTY, PLANT AND EQUIPMENT	NOTE 6. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are comprised of the following: March 31, December 31, 2010 2009 Land $ 81 $ 81 Buildings and improvements 1,170 1,136 Machinery and equipment 3,402 3,384 Rental tools and equipment 2,174 2,228 Subtotal 6,827 6,829 Accumulated depreciation (3,776 ) (3,668 ) Total $ 3,051 $ 3,161

Goodwill and Intangible Assets

Goodwill and Intangible Assets
	3 Months Ended Mar. 31, 2010
Goodwill and Intangible Assets [Abstract]
GOODWILL AND INTANGIBLE ASSETS	NOTE 7. GOODWILL AND INTANGIBLE ASSETS The changes in the carrying amount of goodwill are detailed below by segment: Drilling Completion and and Evaluation Production Total Balance as of December31, 2009 $ 979 $ 439 $ 1,418 Purchase price and other adjustments 1 1 Balance as of March31, 2010 $ 980 $ 439 $ 1,419 Intangible assets are comprised of the following: March 31, 2010 December 31, 2009 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Net Amount Amortization Net Technology-based $ 277 $ (147 ) $ 130 $ 277 $ (140 ) $ 137 Contract-based 13 (10 ) 3 13 (9 ) 4 Marketing-related 36 (14 ) 22 36 (13 ) 23 Customer-based 41 (11 ) 30 41 (10 ) 31 Other 1 (1 ) Total $ 367 $ (182 ) $ 185 $ 368 $ (173 ) $ 195 Intangible assets are amortized either on a straight-line basis with estimated useful lives ranging from 1 to 20years, or on a basis that reflects the pattern in which the economic benefits of the intangible assets are expected to be realized, which range from 15 to 30years. Amortization expense for intangible assets included in net income for the three months ended March31, 2010 was $9million and is estimated to be $25million for the year 2010. Estimated amortization expense for each of the subsequent five fiscal years is expected to be as follows: 2011 $19million; 2012 $18million; 2013 $18million; 2014 $16million; and 2015 $16million.

Fair Value of Certain Financial

Fair Value of Certain Financial Assets and Liabilities
	3 Months Ended Mar. 31, 2010
Fair Value of Certain Financial Assets and Liabilities [Abstract]
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES	NOTE 8. FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES Financial assets and liabilities measured at fair value are based on a hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below: Level 1 inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs). Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or vary substantially). Level 3 inputs are unobservable inputs that reflect the entitys own assumptions in pricing the asset or liability (used when little or no market data is available). In the first quarter of 2010, we adopted an update to ASC 820, which requires a greater level of enhanced information and disclosures. The new disclosures require us to provide fair values for each class of certain financial assets and liabilities. A class is defined as a subset of certain financial assets and liabilities within the line item in the balance sheet. Non-qualified Defined Contribution Plan Assets and Liabilities We have a non-qualified defined contribution plan that provides basically the same benefits as our Thrift Plan for certain non-U.S. employees who are not eligible to participate in the Thrift Plan. In addition, we provide a non-qualified supplemental retirement plan for certain officers and employees whose benefits under the Thrift Plan and/or U.S. defined benefit pension plan are limited by federal tax law. We hold the assets of these plans under a grantor trust and have recorded the assets along with the related deferred compensation liability at fair value. The assets and liabilities were valued using Level 1 inputs at the reporting date and were based on quoted market prices from various major stock exchanges. The fair value of the qualified defined contribution plan assets and liabilities as of March31, 2010 and December31, 2009 are classified based on the valuation hierarchy in the tables below: Fair Value Measurement at March 31, 2010 Description Total Level 1 Level 2 Level 3 Assets: Non-qualified defined contribution plan assets: Equity Mutual Funds $ 86 $ 86 $ $ Cash Funds 33 33 Bond Mutual Funds 22 22 Balanced Funds 4 4 Equity securities 3 3 Total $ 148 $ 148 $ $ Liabilities: Non-qualified defined contribution plan liabilities $ 148 $ 148 $ $ Fair Value Measurement at December 31, 2009 Description Total Level 1 Level 2 Level 3 Assets: Non-qualified defined contribution plan assets: Equity Mutual Funds $ 82 $ 82

Financial Instruments

Financial Instruments
	3 Months Ended Mar. 31, 2010
Financial Instruments [Abstract]
FINANCIAL INSTRUMENTS	NOTE 9. FINANCIAL INSTRUMENTS Fair Value of Financial Instruments Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable, debt, foreign currency forward contracts and interest rate swaps. Except as described below, the estimated fair value of such financial instruments at March31, 2010 as reflected in our consolidated condensed balance sheet approximates their carrying value due to the short maturities of these instruments. Debt The estimated fair value of total debt at March31, 2010 and December31, 2009, was $2.37 billion and $2.13billion, which differs from the carrying amount of $2.02billion and $1.80 billion, respectively, included in our consolidated condensed balance sheet. The fair value of our debt has been estimated based on quoted market prices for the respective period. Foreign Currency Forward Contracts We conduct our business in over 90 countries around the world, and we are exposed to market risks resulting from fluctuations in foreign currency exchange rates. A number of our significant foreign subsidiaries have designated the local currency as their functional currency. We transact in various foreign currencies and seek to balance our foreign currency exposures by matching our revenue and costs in non-functional currencies where possible. Where imbalances in the non-functional currencies remain we have established a program that primarily utilizes foreign currency forward contracts to reduce the risks associated with the effects of certain foreign currency exposures. Under this program, our strategy is to have gains or losses on the foreign currency forward contracts mitigate the foreign currency transaction gains or losses to the extent practical. These foreign currency exposures typically arise from changes in the value of assets and liabilities which are denominated in currencies other than the functional currency. Our foreign currency forward contracts generally settle within 90 to 120days. We do not use these forward contracts for trading or speculative purposes. We designate these forward contracts as fair value hedging instruments pursuant to ASC 815. Accordingly, we record the fair value of these contracts as of the end of our reporting period to our consolidated condensed balance sheet with changes in fair value recorded in our consolidated condensed statement of operations along with the change in fair value of the hedged item. At March31, 2010, we had outstanding foreign currency forward contracts with notional amounts aggregating $175million to hedge exposure to currency fluctuations in various foreign currencies. These contracts expire on various dates prior to the end of the third quarter of 2010. These contracts are designated and qualify as fair value hedging instruments. The fair value was determined using a model with Level 2 inputs including quoted market prices for contracts with similar terms and maturity dates. Interest Rate Swaps We are subject to interest rate risk on our debt and investment of cash and cash equivalents arising in the normal course of our business, as we do not engage in speculative trading strategies. We mainta

Indebtedness

Indebtedness
	3 Months Ended Mar. 31, 2010
Indebtedness [Abstract]
INDEBTEDNESS	NOTE 10. INDEBTEDNESS On March19, 2010, we entered into a credit agreement (the 2010 Credit Agreement). The 2010 Credit Agreement is a three-year committed $1.2billion revolving credit facility that expires on March19, 2013; $800million of the revolving credit facility was available immediately and the remaining $400million of such facility became available after consummation of the merger with BJ Services, which occurred on April28, 2010. Also on March19, 2010, we terminated our 364-day credit agreement in the amount of $500million, dated as of March30, 2009 and expiring March29, 2010. At March31, 2010, we had $1.3billion of committed revolving credit facilities with commercial banks, consisting of the 2010 Credit Agreement ($800million) and a $500million facility expiring on July7, 2012. Both facilities contain certain covenants which, among other things, require the maintenance of a funded indebtedness to total capitalization ratio (a defined formula per each agreement), restrict certain merger transactions or the sale of all or substantially all of our assets or a significant subsidiary and limit the amount of subsidiary indebtedness. Upon the occurrence of certain events of default, our obligations under the facilities may be accelerated. Such events of default include payment defaults to lenders under the facilities, covenant defaults and other customary defaults. At March31, 2010, we were in compliance with all of the covenants of both committed credit facilities. There were no direct borrowings under the committed credit facilities during the quarter ended March31, 2010. We also have a commercial paper program under which we may issue up to $1.0billion in commercial paper with maturity of no more than 270days. To the extent we have commercial paper outstanding, our ability to borrow under the facilities is reduced. At quarter end, we had $215million of commercial paper outstanding.

Segment and Related Information

Segment and Related Information
	3 Months Ended Mar. 31, 2010
Segment and Related Information [Abstract]
SEGMENT AND RELATED INFORMATION	NOTE 11. SEGMENT AND RELATED INFORMATION We are a major supplier of wellbore-related products and technology services and systems and provide products and services for drilling, formation evaluation, completion and production, and reservoir technology and consulting to the worldwide oil and natural gas industry. In 2009, we reorganized the Company by geography and product lines; however, at this time we continue to review product line financial information as well as geographic information in deciding how to allocate resources and in assessing performance. Accordingly, we report results for our product lines under two segments: the Drilling and Evaluation segment and the Completion and Production segment. We have aggregated the product lines within each segment because they have similar economic characteristics and because the long-term financial performance of these product lines is affected by similar economic conditions. They also operate in the same markets, which includes all of the major oil and natural gas producing regions of the world. The Drilling and Evaluation segment consists of the following product lines: drilling fluids, drill bits, directional drilling, drilling evaluation services, wireline formation evaluation, wireline completion and production services and reservoir technology and consulting. The Drilling and Evaluation segment provides products and services used to drill and evaluate oil and natural gas wells as well as consulting services used in the analysis of oil and gas reservoirs. The Completion and Production segment consists of the following product lines: wellbore construction and completion, specialty chemicals, artificial lift systems, permanent monitoring systems, chemical injection systems, integrated operations and project management. The Completion and Production segment provides equipment and services used from the completion phase through the productive life of oil and natural gas wells. The performance of our segments is evaluated based on segment profit (loss), which is defined as income before income taxes, interest expense, interest income, and certain gains and losses not allocated to the segments. Summarized financial information is shown in the following table. Drilling Completion Corporate and and Total and Evaluation Production Oilfield Other Total Revenues Three months ended March31, 2010 $ 1,235 $ 1,304 $ 2,539 $ $ 2,539 Three months ended March31, 2009 1,304 1,364 2,668 2,668 Segment profit (loss) Three months ended March31, 2010 $ 99 $ 178 $ 277 $ (83 ) $ 194 Three months ended March31, 2009 150 230 380 (96 ) 284 Total assets As of March31, 2010 $ 5,498 $ 4,551 $ 10,049 $ 1,581 $ 11,630 As of December31, 2009 5,419 4,451 9,870 1,569 11,439 The follow

Employee Benefit Plans

Employee Benefit Plans
	3 Months Ended Mar. 31, 2010
Employee Benefit Plans [Abstract]
EMPLOYEE BENEFIT PLANS	NOTE 12. EMPLOYEE BENEFIT PLANS We have both funded and unfunded noncontributory defined benefit pension plans (Pension Benefits) covering employees primarily in the U.S., the U.K., Germany and several countries in the Middle East region. We also provide certain postretirement health care benefits (other postretirement benefits), through an unfunded plan, to substantially all U.S. employees who retire and have met certain age and service requirements. The components of net periodic benefit cost are as follows for the three months ended March31: Other Postretirement U.S. Pension Benefits Non-U.S. Pension Benefits Benefits 2010 2009 2010 2009 2010 2009 Service cost $ 8 $ 7 $ 1 $ 1 $ 2 $ 2 Interest cost 6 5 5 4 3 3 Expected return on plan assets (7 ) (6 ) (4 ) (4 ) Amortization of prior service cost 1 Amortization of net loss 3 3 1 Net periodic benefit cost $ 10 $ 9 $ 3 $ 1 $ 6 $ 5

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Commitments and Contingencies [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 13. COMMITMENTS AND CONTINGENCIES Litigation We are involved in litigation or proceedings that have arisen in our ordinary business activities as well as in relation to the merger with BJ Services. We insure against these risks 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 and future legal proceedings. Many of these insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability, general liability and workers compensation. The accruals for losses are calculated by estimating losses for claims using historical claim data, specific loss development factors and other information as necessary. BJ Services Merger Related Stockholder Lawsuits Delaware Cases On September1, 2009, three purported stockholder class action lawsuits styled Laborers Local 235 Benefit Fund v. Stewart, et al., The Booth Family Trust v. Huff, et al., and Dugdale v. Huff, et al., were filed in the Court of Chancery of the State of Delaware (the Delaware Chancery Court) on behalf of the public stockholders of BJ Services, with respect to the Merger Agreement, dated as of August30, 2009, among Baker Hughes, its wholly owned subsidiary, BSA Acquisition LLC (now named BJ Services Company LLC), a Delaware limited liability company (Merger Sub), and BJ Services, providing for BJ Services to merge with and into Merger Sub (the Merger), with Merger Sub continuing as the surviving entity after the Merger. Each action names BJ Services, the then members of the BJ Services Board of Directors (the BJ Services Board) and the Company as defendants (collectively the Defendants). In these Delaware actions, and the follow-on actions discussed below, the plaintiffs allege, among other things, that the members of the BJ Services Board breached their fiduciary duties by failing to properly value BJ Services, failing to take steps to maximize the value of BJ Services to its public stockholders, and avoiding a competitive bidding process. The actions each allege that the Company aided and abetted the purported breaches by the BJ Services Board. The plaintiffs in each lawsuit seek, among other things, injunctive relief with respect to the Merger. Six additional purported class action lawsuits were filed in the Delaware Chancery Court on behalf of the public stockholders of BJ Services against the Company, BJ Services and the BJ Services Board, including: Myers, v. BJ Services, et al., which was filed on September4, 2009, Garden City Employees Retirement System v. BJ Services, et al., which was filed on September8, 2009, Saratoga Advantage Trust-Energy Basic Materials Portfolio v. Huff, et al., which was filed on September8, 2009, Stationary Engineers Local 39 Pension Trust Fund v. Stewart, et al., which was fil

Comprehensive Income

Comprehensive Income (Loss)
	3 Months Ended Mar. 31, 2010
Comprehensive Income (Loss) [Abstract]
COMPREHENSIVE INCOME (LOSS)	NOTE 14. COMPREHENSIVE INCOME (LOSS) Comprehensive income (loss)includes all changes in equity during a period except those resulting from investments by and distributions to owners. The components of our comprehensive income (loss), net of related tax, are as follows: Three Months Ended March 31, 2010 2009 Net income $ 129 $ 195 Other comprehensive income (loss): Foreign currency translation adjustments during the period (44 ) (16 ) Pension and other postretirement benefits 9 2 Total comprehensive income $ 94 $ 181 Total accumulated other comprehensive loss consisted of the following: March 31, December 31, 2010 2009 Foreign currency translation adjustments $ (264 ) $ (220 ) Pension and other postretirement benefits (185 ) (194 ) Total accumulated other comprehensive loss $ (449 ) $ (414 )