Baker Hughes Company Announces Second Quarter 2020 Results
- Orders of
$4.9 billion for the quarter, down 12% sequentially and down 25% year-over-year - Revenue of
$4.7 billion for the quarter, down 13% sequentially and down 21% year-over-year - GAAP operating loss of
$52 million for the quarter was favorable sequentially and unfavorable year-over-year. - Adjusted operating income (a non-GAAP measure) of
$104 million for the quarter, down 56% sequentially and down 71% year-over-year - GAAP loss per share of
$(0.31) for the quarter which included$0.26 per share of adjusting items. Adjusted loss per share (a non-GAAP measure) was$(0.05) . - Cash flows generated from operating activities were
$230 million for the quarter. Free cash flow (a non-GAAP measure) for the quarter was$63 million .
The Company presents its financial results in accordance with GAAP. However, management believes that using additional non-GAAP measures will enhance the evaluation of the profitability of the Company and its ongoing operations. Please see Tables 1a, 1b and 1c in the section entitled "Charges & Credits" for a reconciliation of GAAP to non-GAAP financial measures. Certain columns and rows in our tables and financial statements may not sum up due to the use of rounded numbers.
|
|
Three Months Ended |
|
Variance |
||||||||||
|
(in millions except per share amounts) |
|
|
|
|
Sequential |
Year- |
|||||||
|
Orders |
$ |
4,888 |
|
$ |
5,532 |
|
$ |
6,554 |
|
|
(12)% |
(25)% |
|
|
Revenue |
4,736 |
|
5,425 |
|
5,994 |
|
|
(13)% |
(21)% |
||||
|
Operating income (loss) |
(52) |
|
(16,059) |
|
271 |
|
|
F |
U |
||||
|
Adjusted operating income (non-GAAP) |
104 |
|
240 |
|
361 |
|
|
(56)% |
(71)% |
||||
|
Net loss attributable to Baker Hughes |
(201) |
|
(10,210) |
|
(9) |
|
|
98% |
U |
||||
|
Adjusted net income (loss) (non-GAAP) attributable to Baker Hughes |
(31) |
|
70 |
|
104 |
|
|
U |
U |
||||
|
EPS attributable to Class A shareholders |
(0.31) |
|
(15.64) |
|
(0.02) |
|
|
98% |
U |
||||
|
Adjusted EPS (non-GAAP) attributable to Class A shareholders |
(0.05) |
|
0.11 |
|
0.20 |
|
|
U |
U |
||||
|
Cash flow from operating activities |
230 |
|
478 |
|
593 |
|
|
(52)% |
(61)% |
||||
|
Free cash flow (non-GAAP) |
63 |
|
152 |
|
355 |
|
|
(59)% |
(82)% |
||||
|
"F" is used in most instances when variance is above 100%. Additionally, "U" is used in most instances when variance is below (100)%. |
“The second quarter of 2020 was challenging in several areas as our company navigated through the ongoing impacts of the COVID-19 pandemic and the sharp decline in activity levels due to lower oil and gas prices. Despite these headwinds, I was pleased with how our team executed with strong margin performance in TPS and DS, cost execution in OFS, solid order bookings in OFE and TPS, and another quarter of free cash flow generation,” said
“Although the majority of lockdowns have been easing globally and economic activity likely troughed during the second quarter, visibility on the economic outlook remains extremely limited. More specifically, the risk of a second wave of virus cases, the reinstitution of select lockdowns, and the risk of lingering high unemployment creates an uncertain economic environment that likely persists through the rest of 2020. Given these factors, we are preparing for potential future volatility, while also focusing on structurally reducing our cost base and implementing a number of strategic initiatives across all of our product companies.
“Overall, we are executing on the framework we laid out on our first quarter earnings call. We are on track to hit our goals of structurally right-sizing our business and achieving the
“We remain committed to our strategy, maintaining our focus on higher-margin and differentiated portfolio offerings, and providing our customers with leading technologies to support the energy transition,” concluded Simonelli.
Quarter Highlights
Despite continued market challenges, the Company continued to execute on its priorities in the quarter.
Supporting our Customers
In the second quarter, the OFS segment delivered 72% of its global drilling services jobs remotely, compared to 60% in the first quarter. Remote wireline jobs increased by 13% compared to the first quarter despite lower activity levels. The OFS team achieved new execution milestones, remotely drilling two miles in a 24-hour period – an industry first – and separately drilling 11,253 feet in a 24-hour period with North American customers. OFS’ remote capabilities continue to improve efficiencies and lower costs for customers, with significant projects in the
The OFE segment expanded its remote inspection capabilities in the second quarter, supporting customers facing business continuity issues due to COVID-19 restrictions. OFE’s engageSubsea remote operations offering, a pillar of Subsea Connect, was optimized successfully and deployed across multiple contracts, including equipment installation, factory acceptance testing, and project approvals. In one example, the team installed multiple wellheads on two different rigs, supporting the customer remotely without incurring any downtime.
The TPS segment continued to achieve important execution milestones for LNG projects, performing more than 50 remote witness tests and inspections for customers in the second quarter. In June, TPS announced the completion of the First Engine to Test (FETT) for the LM9000 aeroderivative gas turbine for NOVATEK’s Arctic LNG 2 project. The FETT completion paves the way for the supply of the LM9000 for NOVATEK’s new LNG projects and confirms the LM9000 as the world’s most efficient and powerful aeroderivative gas turbine in its class, with simple-cycle efficiency in excess of 44% and power output 15% higher compared to industry peers. This efficiency is key to driving lower carbon intensity and, combined with lower NOx emissions (15 ppm in dry condition, 40% lower than competing technology), is a more environmentally sensitive solution.
TPS also won a contract to supply nine NovaLT16 gas turbines for a utility power generation project in the
The DS segment maintained critical customer support in key international markets such as
Executing on Priorities
OFS continued to focus on its differentiated portfolio to help customers lower costs and increase efficiencies, securing multi-year contracts for drilling services, completions, and artificial lift. The OFS Chemicals product line won multiple large orders in
TPS continued to execute against its strategic priorities, including growth in services and upgrades. In the second quarter, TPS secured a key upgrades contract for an onshore project in
In DS, the
Leading with Innovation
Baker Hughes continued to drive advancements in leading technologies and being at the forefront of the energy transition. As customers look for more productive and efficient operations, the BakerHughesC3.ai joint venture alliance secured a contract with a Canadian oil company to deploy BHC3™ Production Optimization, an AI-based application that helps operators better visualize and optimize oil and gas production. The contract marks the first customer commitment for Production Optimization since the technology was announced at Baker Hughes’ Annual Meeting in the first quarter.
The Company remains committed to reducing its carbon footprint as well as those of its customers. In the second quarter, TPS successfully completed a testing campaign to replace conventional refrigerant gases for compressor testing at its largest global rotating machinery testing facility in Massa,
OFS significantly expanded the capabilities of its i-Trak automation service. Eight out of nine Equinor rigs in
|
Consolidated Results by Reporting Segment |
||||||||||||||
|
Consolidated Orders by Reporting Segment |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Consolidated segment orders |
|
|
|
|
Sequential |
Year- |
||||||||
|
Oilfield Services |
$ |
2,411 |
|
$ |
3,147 |
|
$ |
3,266 |
|
|
(23 |
)% |
(26 |
)% |
|
Oilfield Equipment |
699 |
|
492 |
|
617 |
|
|
42 |
% |
13 |
% |
|||
|
Turbomachinery & Process Solutions |
1,313 |
|
1,394 |
|
1,983 |
|
|
(6 |
)% |
(34 |
)% |
|||
|
Digital Solutions |
465 |
|
500 |
|
688 |
|
|
(7 |
)% |
(32 |
)% |
|||
|
Total |
$ |
4,888 |
|
$ |
5,532 |
|
$ |
6,554 |
|
|
(12 |
)% |
(25 |
)% |
Orders for the quarter were
Year-over-year, the decline in orders was driven by Turbomachinery & Process Solutions, Digital Solutions, and Oilfield Services, partially offset by year-over-year growth in Oilfield Equipment. Year-over-year equipment orders were down 22% and service orders were down 28%.
The Company's total book-to-bill ratio in the quarter was 1.0; the equipment book-to-bill ratio in the quarter was 1.1.
Remaining Performance Obligations (RPO) in the second quarter ended at
|
Consolidated Revenue by Reporting Segment |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Consolidated segment revenue |
|
|
|
|
Sequential |
Year- |
||||||||
|
Oilfield Services |
$ |
2,411 |
|
$ |
3,139 |
|
$ |
3,263 |
|
|
(23 |
)% |
(26 |
)% |
|
Oilfield Equipment |
696 |
|
712 |
|
693 |
|
|
(2 |
)% |
— |
% |
|||
|
Turbomachinery & Process Solutions |
1,161 |
|
1,085 |
|
1,405 |
|
|
7 |
% |
(17 |
)% |
|||
|
Digital Solutions |
468 |
|
489 |
|
632 |
|
|
(4 |
)% |
(26 |
)% |
|||
|
Total |
$ |
4,736 |
|
$ |
5,425 |
|
$ |
5,994 |
|
|
(13 |
)% |
(21 |
)% |
Revenue for the quarter was
Compared to the same quarter last year, revenue was down 21%, driven by lower volume across the Oilfield Services, Digital Solutions, and Turbomachinery & Process Solutions segments.
|
Consolidated Operating Income by Reporting Segment |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Segment operating income |
|
|
|
|
Sequential |
Year- |
||||||||
|
Oilfield Services |
$ |
46 |
|
$ |
206 |
|
$ |
233 |
|
|
(78 |
)% |
(80 |
)% |
|
Oilfield Equipment |
(14 |
) |
(8 |
) |
14 |
|
|
(76 |
)% |
U |
||||
|
Turbomachinery & Process Solutions |
149 |
|
134 |
|
135 |
|
|
11 |
% |
10 |
% |
|||
|
Digital Solutions |
41 |
|
29 |
|
84 |
|
|
41 |
% |
(51 |
)% |
|||
|
Total segment operating income |
221 |
|
361 |
|
466 |
|
|
(39 |
)% |
(52 |
)% |
|||
|
Corporate |
(117 |
) |
(122 |
) |
(105 |
) |
|
4 |
% |
(12 |
)% |
|||
|
|
— |
|
(14,773 |
) |
— |
|
|
F |
— |
% |
||||
|
Inventory impairment |
(16 |
) |
(160 |
) |
— |
|
|
90 |
% |
U |
||||
|
Restructuring, impairment & other charges |
(103 |
) |
(1,325 |
) |
(50 |
) |
|
92 |
% |
U |
||||
|
Separation related |
(37 |
) |
(41 |
) |
(40 |
) |
|
10 |
% |
9 |
% |
|||
|
Operating income (loss) |
(52 |
) |
(16,059 |
) |
271 |
|
|
F |
U |
|||||
|
Adjusted operating income* |
$ |
104 |
|
$ |
240 |
|
$ |
361 |
|
|
(56 |
)% |
(71 |
)% |
|
*Non-GAAP measure. |
|
"F" is used in most instances when variance is above 100%. Additionally, "U" is used in most instances when variance is below (100)%. |
On a GAAP basis, operating loss for the second quarter of 2020 was
Adjusted operating income (a non-GAAP measure) for the second quarter of 2020 was
Depreciation and amortization for the second quarter of 2020 was
Corporate costs were
Other Financial Items
Income tax benefit in the second quarter of 2020 was
Other non-operating loss in the second quarter of 2020 was
GAAP diluted loss per share was
Cash flow from operating activities was
Capital expenditures, net of proceeds from disposal of assets, were
Results by Reporting Segment
The following segment discussions and variance explanations are intended to reflect management's view of the relevant comparisons of financial results on a sequential or year-over-year basis, depending on the business dynamics of the reporting segments.
|
Oilfield Services |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Oilfield Services |
|
|
|
|
Sequential |
Year- |
||||||||
|
Revenue |
$ |
2,411 |
|
$ |
3,139 |
|
$ |
3,263 |
|
|
(23 |
)% |
(26 |
)% |
|
Operating income |
$ |
46 |
|
$ |
206 |
|
$ |
233 |
|
|
(78 |
)% |
(80 |
)% |
|
Operating income margin |
1.9 |
% |
6.6 |
% |
7.1 |
% |
|
(4.7 |
)pts |
(5.2 |
)pts | |||
Oilfield Services (OFS) revenue of
Segment operating income before tax for the quarter was
|
Oilfield Equipment |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Oilfield Equipment |
|
|
|
|
Sequential |
Year- |
||||||||
|
Orders |
$ |
699 |
|
$ |
492 |
|
$ |
617 |
|
|
42 |
% |
13 |
% |
|
Revenue |
$ |
696 |
|
$ |
712 |
|
$ |
693 |
|
|
(2 |
)% |
— |
% |
|
Operating income (loss) |
$ |
(14 |
) |
$ |
(8 |
) |
$ |
14 |
|
|
(76 |
)% |
U |
|
|
Operating income margin |
(2.1 |
)% |
(1.1 |
)% |
2.0 |
% |
|
(0.9 |
)pts |
(4.1 |
)pts |
|||
Oilfield Equipment (OFE) orders were up
OFE revenue of
Segment operating loss before tax for the quarter was
|
Turbomachinery & Process Solutions |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Turbomachinery & Process Solutions |
|
|
|
|
Sequential |
Year- |
||||||||
|
Orders |
$ |
1,313 |
|
$ |
1,394 |
|
$ |
1,983 |
|
|
(6 |
)% |
(34 |
)% |
|
Revenue |
$ |
1,161 |
|
$ |
1,085 |
|
$ |
1,405 |
|
|
7 |
% |
(17 |
)% |
|
Operating income |
$ |
149 |
|
$ |
134 |
|
$ |
135 |
|
|
11 |
% |
10 |
% |
|
Operating income margin |
12.8 |
% |
12.3 |
% |
9.6 |
% |
|
0.5 |
pts |
3.2 |
pts | |||
Turbomachinery & Process Solutions (TPS) orders were down 34% year-over-year. Equipment orders were down 48% and service orders were down 19%.
TPS revenue of
Segment operating income before tax for the quarter was
|
Digital Solutions |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Digital Solutions |
|
|
|
|
Sequential |
Year- |
||||||||
|
Orders |
$ |
465 |
|
$ |
500 |
|
$ |
688 |
|
|
(7 |
)% |
(32 |
)% |
|
Revenue |
$ |
468 |
|
$ |
489 |
|
$ |
632 |
|
|
(4 |
)% |
(26 |
)% |
|
Operating income |
$ |
41 |
|
$ |
29 |
|
$ |
84 |
|
|
41 |
% |
(51 |
)% |
|
Operating income margin |
8.8 |
% |
6.0 |
% |
13.2 |
% |
|
2.8 |
pts |
(4.4 |
)pts |
|||
Digital Solutions (DS) orders were down 32% year-over-year, driven primarily by lower order intake across all businesses.
DS revenue of
Segment operating income before tax for the quarter was
Charges & Credits
|
Table 1a. Reconciliation of GAAP and Adjusted Operating Income/(Loss) |
||||||||
|
|
Three Months Ended |
|||||||
|
(in millions) |
|
|
|
|||||
|
Operating income (loss) (GAAP) |
$ |
(52 |
) |
$ |
(16,059 |
) |
$ |
271 |
|
Separation related |
37 |
|
41 |
|
40 |
|||
|
|
— |
|
14,773 |
|
— |
|||
|
Restructuring, impairment & other |
103 |
|
1,325 |
|
50 |
|||
|
Inventory impairment |
16 |
|
160 |
|
— |
|||
|
Total operating income adjustments |
156 |
|
16,299 |
|
90 |
|||
|
Adjusted operating income (non-GAAP) |
$ |
104 |
|
$ |
240 |
|
$ |
361 |
|
Table 1a reconciles operating income (loss), which is the directly comparable financial result determined in accordance with Generally Accepted Accounting Principles (GAAP), to adjusted operating income (a non-GAAP financial measure). Adjusted operating income excludes the impact of certain identified items. |
|
Table 1b. Reconciliation of GAAP and Non-GAAP Net Income |
|||||||||
|
|
Three Months Ended |
||||||||
|
(in millions, except per share amounts) |
|
|
|
||||||
|
Net income (loss) attributable to Baker Hughes (GAAP) |
$ |
(201 |
) |
$ |
(10,210 |
) |
$ |
(9 |
) |
|
Total operating income adjustments (identified items) |
156 |
|
16,299 |
|
90 |
|
|||
|
Other adjustments (non-operating) (1) |
167 |
|
— |
|
145 |
|
|||
|
Tax on total adjustments |
(11 |
) |
(84 |
) |
(7 |
) |
|||
|
Total adjustments, net of income tax |
312 |
|
16,215 |
|
227 |
|
|||
|
Less: adjustments attributable to noncontrolling interests |
142 |
|
5,935 |
|
114 |
|
|||
|
Adjustments attributable to Baker Hughes |
170 |
|
10,280 |
|
113 |
|
|||
|
Adjusted net income attributable to Baker Hughes (non-GAAP) |
$ |
(31 |
) |
$ |
70 |
|
$ |
104 |
|
|
|
|
|
|
||||||
|
|
|
|
|
||||||
|
Denominator: |
|
|
|
||||||
|
Weighted-average shares of Class A common stock outstanding diluted |
655 |
|
654 |
|
515 |
|
|||
|
Adjusted earnings per Class A share— diluted (non-GAAP) |
$ |
(0.05 |
) |
$ |
0.11 |
|
$ |
0.20 |
|
|
(1) |
2Q'20: Primarily driven by loss on sale of business partially offset by a tax benefit related to the CARES Act |
|
Table 1b reconciles net income (loss) attributable to Baker Hughes, which is the directly comparable financial result determined in accordance with GAAP, to adjusted net income attributable to Baker Hughes (a non-GAAP financial measure). Adjusted net income attributable to Baker Hughes excludes the impact of certain identified items. |
|
Table 1c. Reconciliation of Cash Flow From Operating Activities to Free Cash Flow |
|||||||||
|
|
Three Months Ended |
||||||||
|
(in millions) |
|
|
|
||||||
|
Cash flow from operating activities (GAAP) |
$ |
230 |
|
$ |
478 |
|
$ |
593 |
|
|
Add: cash used in capital expenditures, net of proceeds from disposal of assets |
(167 |
) |
(325 |
) |
(238 |
) |
|||
|
Free cash flow (non-GAAP) |
$ |
63 |
|
$ |
152 |
|
$ |
355 |
|
|
Table 1c reconciles net cash flows from operating activities, which is the directly comparable financial result determined in accordance with GAAP, to free cash flow (a non-GAAP financial measure). Free cash flow is defined as net cash flows from operating activities less expenditures for capital assets plus proceeds from disposal of assets. |
|
|
|
Management provides non-GAAP financial measures in Tables 1a, 1b, and 1c because it believes such measures are widely accepted financial indicators used by investors and analysts to analyze and compare companies on the basis of operating performance and liquidity, and that these measures may be used by investors to make informed investment decisions. |
|
Financial Tables (GAAP) |
|||||||||||||||||||
|
Condensed Consolidated Statements of Income (Loss) |
|||||||||||||||||||
|
(Unaudited) |
|||||||||||||||||||
|
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||
|
(In millions, except per share amounts) |
2020 |
2019 |
2020 |
2019 |
|||||||||||||||
|
Revenue |
$ |
|
4,736 |
|
|
$ |
|
5,994 |
|
|
$ |
|
10,160 |
|
|
$ |
|
11,608 |
|
|
Costs and expenses: |
|
|
|
|
|||||||||||||||
|
Cost of revenue |
|
4,058 |
|
|
|
4,932 |
|
|
|
8,727 |
|
|
|
9,571 |
|
||||
|
Selling, general and administrative |
|
590 |
|
|
|
701 |
|
|
|
1,265 |
|
|
|
1,404 |
|
||||
|
|
— |
— |
14,773 |
— |
|||||||||||||||
|
Restructuring, impairment and other |
|
103 |
|
|
|
50 |
|
|
|
1,429 |
|
|
|
112 |
|
||||
|
Separation related |
|
37 |
|
|
|
40 |
|
|
|
77 |
|
|
|
74 |
|
||||
|
Total costs and expenses |
|
4,788 |
|
|
|
5,723 |
|
|
|
26,271 |
|
|
|
11,161 |
|
||||
|
Operating income (loss) |
|
(52 |
) |
|
|
271 |
|
|
|
(16,111 |
) |
|
|
447 |
|
||||
|
Other non-operating loss, net |
|
(255 |
) |
|
|
(131 |
) |
|
|
(230 |
) |
|
|
(110 |
) |
||||
|
Interest expense, net |
|
(69 |
) |
|
|
(56 |
) |
|
|
(128 |
) |
|
|
(115 |
) |
||||
|
Income (loss) before income taxes |
|
(376 |
) |
|
|
84 |
|
|
|
(16,469 |
) |
|
|
222 |
|
||||
|
Benefit (provision) for income taxes |
|
21 |
|
|
|
(95 |
) |
|
|
16 |
|
|
|
(162 |
) |
||||
|
Net income (loss) |
|
(355 |
) |
|
|
(11 |
) |
|
|
(16,453 |
) |
|
|
60 |
|
||||
|
Less: Net income (loss) attributable to noncontrolling interests |
|
(154 |
) |
|
|
(2 |
) |
|
|
(6,042 |
) |
|
|
37 |
|
||||
|
Net income (loss) attributable to |
$ |
|
(201 |
) |
|
$ |
|
(9 |
) |
|
$ |
|
(10,411 |
) |
|
$ |
|
23 |
|
|
|
|
|
|
|
|||||||||||||||
|
Per share amounts: |
|
|
|
||||||||||||||||
|
Basic and diluted income (loss) per Class A common share |
$ |
|
(0.31 |
) |
|
$ |
|
(0.02 |
) |
|
$ |
|
(15.92 |
) |
|
$ |
|
0.04 |
|
|
|
|
|
|
|
|||||||||||||||
|
Weighted average shares: |
|
|
|
|
|||||||||||||||
|
Class A basic |
|
655 |
|
|
|
515 |
|
|
|
654 |
|
|
|
515 |
|
||||
|
Class A diluted |
|
655 |
|
|
|
515 |
|
|
|
654 |
|
|
|
516 |
|
||||
|
|
|
|
|
|
|||||||||||||||
|
Cash dividend per Class A common share |
$ |
|
0.18 |
|
|
$ |
|
0.18 |
|
|
$ |
|
0.36 |
|
|
$ |
|
0.36 |
|
|
|
|
|
|
|
|||||||||||||||
|
Condensed Consolidated Statements of Financial Position |
||||||
|
(Unaudited) |
||||||
|
(In millions) |
|
|
||||
|
ASSETS |
||||||
|
Current Assets: |
|
|
||||
|
Cash and cash equivalents (1) |
$ |
4,132 |
|
$ |
3,249 |
|
|
Current receivables, net |
5,636 |
|
6,416 |
|
||
|
Inventories, net |
4,616 |
|
4,608 |
|
||
|
All other current assets |
1,118 |
|
949 |
|
||
|
Total current assets |
15,502 |
|
15,222 |
|
||
|
Property, plant and equipment, less accumulated depreciation |
5,710 |
|
6,240 |
|
||
|
|
5,868 |
|
20,690 |
|
||
|
Other intangible assets, net |
4,416 |
|
5,381 |
|
||
|
Contract and other deferred assets |
1,875 |
|
1,881 |
|
||
|
All other assets |
4,152 |
|
3,955 |
|
||
|
Total assets (1) |
$ |
37,523 |
|
$ |
53,369 |
|
|
LIABILITIES AND EQUITY |
||||||
|
Current Liabilities: |
|
|
||||
|
Accounts payable |
$ |
3,628 |
|
$ |
4,268 |
|
|
Short-term debt and current portion of long-term debt (1) |
934 |
|
321 |
|
||
|
Progress collections and deferred income |
3,507 |
|
2,870 |
|
||
|
All other current liabilities |
2,498 |
|
2,555 |
|
||
|
Total current liabilities |
10,567 |
|
10,014 |
|
||
|
Long-term debt |
6,766 |
|
6,301 |
|
||
|
Liabilities for pensions and other employee benefits |
1,059 |
|
1,079 |
|
||
|
All other liabilities |
1,566 |
|
1,476 |
|
||
|
Equity |
17,565 |
|
34,499 |
|
||
|
Total liabilities and equity |
$ |
37,523 |
|
$ |
53,369 |
|
|
(1) |
Total assets include |
|
Condensed Consolidated Statements of Cash Flows |
|||||||||
|
(Unaudited) |
|||||||||
|
|
Three Months |
Six Months Ended |
|||||||
|
(In millions) |
2020 |
2020 |
2019 |
||||||
|
Cash flows from operating activities: |
|
|
|
||||||
|
Net income (loss) |
$ |
(355 |
) |
$ |
(16,453 |
) |
$ |
60 |
|
|
Adjustments to reconcile net income (loss) to net cash flows from operating activities: |
|
|
|
||||||
|
Depreciation and amortization |
340 |
|
694 |
|
709 |
|
|||
|
|
— |
|
14,773 |
|
— |
|
|||
|
Other asset impairments |
24 |
|
1,127 |
|
— |
|
|||
|
Loss on sale of business |
228 |
|
228 |
|
— |
|
|||
|
Working capital |
205 |
|
388 |
|
(91 |
) |
|||
|
Other operating items, net |
(212 |
) |
(49 |
) |
(269 |
) |
|||
|
Net cash flows from operating activities |
230 |
|
708 |
|
409 |
|
|||
|
Cash flows from investing activities: |
|
|
|
||||||
|
Expenditures for capital assets, net of proceeds from disposal of assets |
(167 |
) |
(493 |
) |
(473 |
) |
|||
|
Other investing items, net |
48 |
|
56 |
|
(90 |
) |
|||
|
Net cash flows used in investing activities |
(119 |
) |
(437 |
) |
(563 |
) |
|||
|
Cash flows from financing activities: |
|
|
|
||||||
|
Net repayments of debt and other borrowings |
(34 |
) |
(149 |
) |
(66 |
) |
|||
|
Proceeds from issuance of commercial paper |
737 |
|
737 |
|
— |
|
|||
|
Proceeds from issuance of long-term debt |
500 |
|
500 |
|
— |
|
|||
|
Dividends paid |
(118 |
) |
(236 |
) |
(185 |
) |
|||
|
Distributions to |
(68 |
|
(136 |
) |
(188 |
) |
|||
|
Other financing items, net |
5 |
|
(21 |
) |
12 |
|
|||
|
Net cash flows from (used in) financing activities |
1,022 |
|
695 |
|
(427 |
) |
|||
|
Effect of currency exchange rate changes on cash and cash equivalents |
(11 |
) |
(83 |
) |
(4 |
) |
|||
|
Increase (decrease) in cash and cash equivalents |
1,122 |
|
883 |
|
(585 |
) |
|||
|
Cash and cash equivalents, beginning of period |
3,010 |
|
3,249 |
|
3,723 |
|
|||
|
Cash and cash equivalents, end of period |
$ |
4,132 |
|
$ |
4,132 |
|
$ |
3,138 |
|
Supplemental Financial Information
Supplemental financial information can be found on the Company’s website at: investors.bakerhughes.com in the Financial Information section under Quarterly Results.
Conference Call and Webcast
The Company has scheduled an investor conference call to discuss management’s outlook and the results reported in today’s earnings announcement. The call will begin at
Forward-Looking Statements
This news release (and oral statements made regarding the subjects of this release) may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (each a “forward-looking statement”). The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “project,” “foresee,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “potential,” “would,” “may,” “probable,” “likely,” and similar expressions, and the negative thereof, are intended to identify forward-looking statements. There are many risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. These forward-looking statements are also affected by the risk factors described in the Company’s annual report on Form 10-K for the annual period ended
Our expectations regarding our business outlook and business plans; the business plans of our customers; oil and natural gas market conditions; cost and availability of resources; economic, legal and regulatory conditions, and other matters are only our forecasts regarding these matters.
These forward-looking statements, including forecasts, may be substantially different from actual results, which are affected by many risks, along with the following risk factors and the timing of any of these risk factors:
Restructuring - Our restructuring plans may not be successful and achieve the expected result; continued deterioration of market conditions, whether due to the continued spread of COVID-19 or other events could result in further restructuring costs and impairments.
COVID-19 - The continued spread of the COVID-19 virus and the continuation of the measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns, and the related uncertainties.
GE Separation - The failure to successfully eliminate dependencies on
Economic and political conditions - the impact of worldwide economic conditions; the effect that declines in credit availability may have on worldwide economic growth and demand for hydrocarbons; foreign currency exchange fluctuations and changes in the capital markets in locations where we operate; and the impact of government disruptions and sanctions.
Orders and RPO - our ability to execute on orders and RPO in accordance with agreed specifications, terms and conditions and convert those orders and RPO to revenue and cash.
Oil and gas market conditions - the level of petroleum industry exploration, development and production expenditures; the price of, volatility in pricing of, and the demand for crude oil and natural gas; drilling activity; drilling permits for and regulation of the shelf and the deepwater drilling; excess productive capacity; crude and product inventories; liquefied natural gas supply and demand; seasonal and other adverse weather conditions that affect the demand for energy; severe weather conditions, such as tornadoes and hurricanes, that affect exploration and production activities;
Terrorism and geopolitical risks - war, military action, terrorist activities or extended periods of international conflict, particularly involving any petroleum-producing or -consuming regions; labor disruptions, civil unrest or security conditions where we operate; potentially burdensome taxation, expropriation of assets by governmental action; cybersecurity risks and cyber incidents or attacks; epidemic outbreaks.
About Baker Hughes:
View source version on businesswire.com: https://www.businesswire.com/news/home/20200722005077/en/
Investor Relations
+1 281-809-9088
investor.relations@bakerhughes.com
Media Relations
+1 910-515-7873
Thomas.millas@bakerhughes.com
Source: