Investor Contact:
Philipp Mueller, +1 281 809 9088, investor.relations@bhge.com
Media Contact:
Stephanie Cathcart, +1 202 549 6462, stephanie.cathcart@bhge.com
Melanie Kania, +1 713 439 8303, melanie.kania@bhge.com
Reconciliation of GAAP and Combined Business Basis measures used in Earnings Release
On July 3, 2017, we closed our previously announced transaction to combine the Oil & Gas business of General Electric Company ("GE Oil & Gas") and Baker Hughes Incorporated ("Baker Hughes"). The Company presents its financial results in accordance with U.S. GAAP which includes the results of Baker Hughes and GE Oil & Gas from the merger closing date of July 3, 2017. However, management believes that using additional non-GAAP measures on a combined business basis will enhance the evaluation of the profitability of the Company and its ongoing operations. Combined business results combine the results of GE Oil & Gas with Baker Hughes as if the acquisition date had occurred on the first day of all periods presented. The acquisition of Baker Hughes impacts only the Oilfield Services and Digital Solutions segments. Accordingly, no reconciliation is presented for our other segments, Oilfield Equipment and Turbomachinery & Process Solutions. All combined business results presented in this News Release are unaudited. Such combined business results are not prepared in accordance with Article 11 of Regulation S-X. The following tables reconcile BHGE GAAP financial information with combined business basis financial information (non-GAAP) used in the Earnings Release of BHGE for the quarter ended September 30, 2017.
|
| | | | | | | | | | | |
| Three months ended September 30, 2016 |
| (in millions) | GE O&G |
| | Add: Baker Hughes* |
| | Combined Business Basis |
|
| Consolidated results | | | | | |
| Orders | $ | 2,480 |
| | $ | 2,351 |
| | $ | 4,831 |
|
| Revenue | 3,024 |
| | 2,351 |
| | 5,375 |
|
| Operating income/(loss) (GAAP) | 176 |
| | (332 | ) | | (156 | ) |
| Operating income/(loss) (adjusted) | 279 |
| | (4 | ) | | 275 |
|
| Corporate operating loss | (75 | ) | | (38 | ) | | (113 | ) |
| Impairment of goodwill | — |
| | (17 | ) | | (17 | ) |
| Inventory impairment | (24 | ) | | — |
| | (24 | ) |
| Restructuring, impairment & other | (77 | ) | | (311 | ) | | (388 | ) |
| Merger and related costs | (2 | ) | | — |
| | (2 | ) |
| Oilfield Services | | | | | |
| Orders | $ | 214 |
| | $ | 2,234 |
| | $ | 2,448 |
|
| Revenue | 192 |
| | 2,234 |
| | 2,426 |
|
| Operating income/(loss) | (66 | ) | | 26 |
| | (40 | ) |
| | | | | | |
| Digital Solutions | | | | | |
| Orders | $ | 524 |
| | $ | 117 |
| | $ | 641 |
|
| Revenue | 523 |
| | 117 |
| | 640 |
|
| Operating income/(loss) | 101 |
| | 8 |
| | 109 |
|
|
| | | | | | | | | | | |
| Three months ended June 30, 2017 |
| (in millions) | GE O&G |
| | Add: Baker Hughes* |
| | Combined Business Basis |
|
| Consolidated results | | | | | |
| Orders | $ | 3,188 |
| | $ | 2,402 |
| | $ | 5,590 |
|
| Revenue | 3,010 |
| | 2,402 |
| | 5,412 |
|
| Operating income/(loss) (GAAP) | (68 | ) | | (79 | ) | | (147 | ) |
| Operating income/(loss) (adjusted) | 80 |
| | 37 |
| | 117 |
|
| Corporate operating loss | (71 | ) | | (38 | ) | | (109 | ) |
| Inventory impairment | (4 | ) | | — |
| | (4 | ) |
| Restructuring, impairment & other | (59 | ) | | (67 | ) | | (126 | ) |
| Merger and related costs | (85 | ) | | (49 | ) | | (134 | ) |
| Oilfield Services | | | | | |
| Orders | $ | 228 |
| | $ | 2,302 |
| | $ | 2,530 |
|
| Revenue | 226 |
| | 2,302 |
| | 2,528 |
|
| Operating income/(loss) | (65 | ) | | 92 |
| | 27 |
|
| | | | | | |
| Digital Solutions | | | | | |
| Orders | $ | 574 |
| | $ | 100 |
| | $ | 674 |
|
| Revenue | 507 |
| | 100 |
| | 607 |
|
| Operating income/(loss) | 67 |
| | (17 | ) | | 50 |
|
*Certain reclassifications and adjustments were performed to conform Baker Hughes results to the current BHGE presentation. These consist of the following:
| |
| • | Adjusted orders and revenue to exclude royalty income by $(2) million in both 2016 and 2017. |
| |
| • | Adjusted operating income, both GAAP and adjusted, to exclude other income and royalties originally of $9 million and $2 million in 2016, respectively, and $21 million and $2 million in 2017, respectively. |
| |
| • | Reclassified $34 million of inventory market adjustment credits from operating income to restructuring, impairment & other in 2016. |
| |
| • | Reclassified $41 million of litigation charges in 2016 and $67 million in 2017 from operating income to restructuring, impairment & other. |
