Baker Hughes Company Announces Second Quarter 2022 Results
- Orders of
$5.9 billion for the quarter, down 14% sequentially and up 15% year-over-year.
- Revenue of
$5.0 billion for the quarter, up 4% sequentially and down 2% year-over-year.
- GAAP operating loss of
$25 million for the quarter, down$304 million sequentially and down$219 million year-over-year.
- Adjusted operating income (a non-GAAP measure) of
$376 million for the quarter, up 8% sequentially and up 13% year-over-year.
- Adjusted EBITDA* (a non-GAAP measure) of
$651 million for the quarter, up 4% sequentially and up 6% year-over-year.
- GAAP loss per share of
$(0.84) for the quarter which included$0.95 per share of adjusting items. Adjusted earnings per share (a non-GAAP measure) was$0.11 .
- Cash flows generated from operating activities were
$321 million for the quarter. Free cash flow (a non-GAAP measure) for the quarter was$147 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 reconciliations in the section entitled "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.
*Adjusted EBITDA (a non-GAAP measure) is defined as operating income (loss) excluding depreciation & amortization and operating income adjustments.
|
|
Three Months Ended |
|
Variance |
||||||||||||||
|
(in millions except per share amounts) |
|
|
|
|
Sequential |
|
Year-over-year |
||||||||||
|
Orders |
$ |
5,860 |
|
$ |
6,837 |
|
$ |
5,093 |
|
|
(14)% |
|
15% |
||||
|
Revenue |
|
5,047 |
|
|
4,835 |
|
|
5,142 |
|
|
4% |
|
(2)% |
||||
|
Operating income (loss) |
|
(25 |
) |
|
279 |
|
|
194 |
|
|
U |
|
U |
||||
|
Adjusted operating income (non-GAAP) |
|
376 |
|
|
348 |
|
|
333 |
|
|
8% |
|
13% |
||||
|
Adjusted EBITDA (non-GAAP) |
|
651 |
|
|
625 |
|
|
611 |
|
|
4% |
|
6% |
||||
|
Net income (loss) attributable to Baker Hughes |
|
(839 |
) |
|
72 |
|
|
(68 |
) |
|
U |
|
U |
||||
|
Adjusted net income (non-GAAP) attributable to Baker Hughes |
|
114 |
|
|
145 |
|
|
83 |
|
|
(21)% |
|
37% |
||||
|
EPS attributable to Class A shareholders |
|
(0.84 |
) |
|
0.08 |
|
|
(0.08 |
) |
|
U |
|
U |
||||
|
Adjusted EPS (non-GAAP) attributable to Class A shareholders |
|
0.11 |
|
|
0.15 |
|
|
0.10 |
|
|
(26)% |
|
11% |
||||
|
Cash flow from operating activities |
|
321 |
|
|
72 |
|
|
506 |
|
|
F |
|
(37)% |
||||
|
Free cash flow (non-GAAP) |
|
147 |
|
|
(105 |
) |
|
385 |
|
|
F |
|
(62)% |
||||
"F" is used in most instances when variance is above 100%. Additionally, "U" is used in most instances when variance is below (100)%.
“Our second quarter results were mixed as each product company navigated a different set of challenges ranging from component shortages and supply chain inflation to the suspension of our Russian operations. While OFS and TPS are managing the current situation fairly well, OFE and DS have both had more difficulty. I would like to thank our team for their continued efforts and commitment to deliver for our customers and execute on our strategy through these volatile times,” said
“As we look to the second half of 2022 and into 2023, the oil markets face an unusual set of circumstances and challenges. On one hand, the demand outlook for the next 12 to 18 months is deteriorating, as inflation erodes consumer purchasing power and central banks aggressively raise interest rates to combat inflation. On the other hand, due to years of underinvestment globally and the potential need to replace Russian barrels, broader supply constraints can realistically keep commodity prices at elevated levels even in a scenario of moderate demand destruction. As a result, we believe the outlook for oil prices remains volatile, but still supportive of strong activity levels as higher spending is required to re-order the global energy map and likely offsets demand destruction in most recessionary scenarios.”
“Baker Hughes is preparing for all of these scenarios and will continue to execute on our long-term strategy. If commodity prices remain resilient as we expect, our portfolio is well positioned to benefit from a strong LNG cycle and a multi-year upstream spending cycle. We will also continue to invest in our energy transition and industrial initiatives, while also returning 60 to 80% of free cash flow to shareholders,” concluded Simonelli.
Quarter Highlights
Supporting our Customers
The OFS segment saw continued customer interest in its electrical submersible pumps (ESPs) and artificial lift solutions. OFS secured an exclusive three year contract to provide ESPs for an operator in the
OFS also secured a four-year contract to provide artificial lift solutions for the Missan Field in
The TPS segment continued to have another strong quarter of LNG leadership. TPS secured a major contract from Bechtel to provide seven mid-scale LNG trains to support the Stage 3 expansion project of Cheniere’s Corpus Christi Liquefaction facility (CCL). Each train is comprised of two electric motor-driven compressors producing approximately 1.5 MTPA of LNG, totaling approximately 10.5 MTPA of production capacity. This award builds on the strong relationship between Baker Hughes and Cheniere since 2012, as we currently provide all liquefaction equipment for Cheniere’s
Also in LNG, TPS continued to support New Fortress Energy’s (NFE) “Fast LNG” facilities project with a contract for two main refrigerant turbocompressor strings in offshore. Each turbocompressor will feature one LM6000PF+ gas turbine. NFE will deploy Baker Hughes’ technology in various offshore projects across the globe, helping to secure overall LNG supply for NFE’s customer base.
TPS was awarded a contract from Samsung Engineering (SECL) to supply 14 electric motor driven compressors (EMCC) to support gas processing for Saudi Aramco’s Jafurah unconventional gas field project, the largest non-associated gas field in the
TPS was awarded a contract by a subsidiary of Tellurian Inc., to provide electric-powered Integrated Compressor Line (ICL) technology and turbomachinery equipment for a natural gas transmission project in southwest
The OFE segment continued to gain momentum internationally with its offshore flexible pipe technology, securing several large contracts with multiple customers across the
The DS segment continued to gain traction in the aerospace sector for industrial asset inspection solutions. Waygate Technologies secured several multi-year contracts with aircraft manufacturers in
Executing on Priorities and Leading with Innovation
OFS continued to maintain its strategic market leadership in
Baker Hughes continued to support its customers as they work towards their net-zero ambitions. TPS secured an important upgrade contract with Société pour la Construction du Gazoduc Transtunisien (SCOGAT), part of the
TPS continued to support the growth of the hydrogen economy. TPS secured a contract with Air Products to supply advanced compression technology for production of green ammonia for the
DS gained traction with its emissions management portfolio of technologies. Following a memorandum of understanding signed in February with the
DS saw continued interest for its condition monitoring systems and services in the industrial sector.
Consolidated Results by Reporting Segment
Consolidated Orders by Reporting Segment
|
(in millions) |
Three Months Ended |
|
|
Variance |
|||||||||||||||
|
Consolidated segment orders |
|
|
|
|
|
|
|
Sequential |
|
Year-over-year |
|||||||||
|
Oilfield Services |
$ |
2,669 |
$ |
2,531 |
$ |
2,359 |
5 |
% |
13 |
% |
|||||||||
|
Oilfield Equipment |
|
723 |
|
|
739 |
|
|
681 |
|
(2 |
)% |
6 |
% |
||||||
|
Turbomachinery & Process Solutions |
|
1,858 |
|
|
3,000 |
|
|
1,513 |
|
(38 |
)% |
23 |
% |
||||||
|
Digital Solutions |
|
609 |
|
|
567 |
|
|
540 |
|
7 |
% |
13 |
% |
||||||
|
Total |
$ |
5,860 |
|
$ |
6,837 |
|
$ |
5,093 |
|
(14 |
)% |
15 |
% |
||||||
Orders for the quarter were
Year-over-year, the increase in orders was a result of higher order intake in all segments. Year-over-year equipment orders were up 17% and service orders were up 14%.
The Company's total book-to-bill ratio in the quarter was 1.2; the equipment book-to-bill ratio in the quarter was 1.2.
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-over-year |
|||||||||||||
|
Oilfield Services |
$ |
2,689 |
$ |
2,489 |
$ |
2,358 |
|
8 |
% |
14 |
% |
||||||||
|
Oilfield Equipment |
|
541 |
|
|
528 |
|
|
637 |
|
|
2 |
% |
(15 |
)% |
|||||
|
Turbomachinery & Process Solutions |
|
1,293 |
|
|
1,345 |
|
|
1,628 |
|
|
(4 |
)% |
(21 |
)% |
|||||
|
Digital Solutions |
|
524 |
|
|
474 |
|
|
520 |
|
|
11 |
% |
1 |
% |
|||||
|
Total |
$ |
5,047 |
|
$ |
4,835 |
|
$ |
5,142 |
|
|
4 |
% |
(2 |
)% |
|||||
Revenue for the quarter was
Compared to the same quarter last year, revenue was down 2%, driven by lower volume in Turbomachinery & Process Solutions and Oilfield Equipment, partially offset by higher volume in Oilfield Services and Digital Solutions.
Consolidated Operating Income by Reporting Segment
|
(in millions) |
Three Months Ended |
Variance |
|||||||||||||||||
|
Segment operating income |
|
|
|
Sequential |
Year-over-year |
||||||||||||||
|
Oilfield Services |
$ |
261 |
|
$ |
221 |
|
$ |
171 |
|
18 |
% |
52 |
% |
||||||
|
Oilfield Equipment |
|
(12 |
) |
|
(8 |
) |
|
28 |
|
(55 |
)% |
U |
|||||||
|
Turbomachinery & Process Solutions |
|
218 |
|
|
226 |
|
|
220 |
|
(4 |
)% |
(1 |
)% |
||||||
|
Digital Solutions |
|
18 |
|
|
15 |
|
|
25 |
|
21 |
% |
(28 |
)% |
||||||
|
Total segment operating income |
|
485 |
|
|
453 |
|
|
444 |
|
7 |
% |
9 |
% |
||||||
|
Corporate |
|
(108 |
) |
|
(105 |
) |
|
(111 |
) |
(3 |
)% |
2 |
% |
||||||
|
Inventory impairment |
|
(31 |
) |
|
— |
|
|
— |
|
U |
U |
||||||||
|
Restructuring, impairment & other |
|
(362 |
) |
|
(61 |
) |
|
(125 |
) |
U |
U |
||||||||
|
Separation related |
|
(9 |
) |
|
(9 |
) |
|
(15 |
) |
— |
% |
40 |
% |
||||||
|
Operating income (loss) |
|
(25 |
) |
|
279 |
|
|
194 |
|
U |
U |
||||||||
|
Adjusted operating income* |
|
376 |
|
|
348 |
|
|
333 |
|
8 |
% |
13 |
% |
||||||
|
Depreciation & amortization |
|
275 |
|
|
277 |
|
|
278 |
|
(1 |
)% |
(1 |
)% |
||||||
|
Adjusted EBITDA* |
$ |
651 |
|
$ |
625 |
|
$ |
611 |
|
4 |
% |
6 |
% |
||||||
*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 2022 was
Depreciation and amortization for the second quarter of 2022 was
Adjusted EBITDA (a non-GAAP measure) for the second quarter of 2022 was
Corporate costs were
Other Financial Items
Income tax expense in the second quarter of 2022 was
Other non-operating loss in the second quarter of 2022 was
GAAP diluted earnings 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-over-year |
|||||||||||||
|
Revenue |
$ |
2,689 |
|
$ |
2,489 |
|
$ |
2,358 |
|
|
8 |
% |
14 |
% |
|||||
|
Operating income |
$ |
261 |
|
$ |
221 |
|
$ |
171 |
|
|
18 |
% |
52 |
% |
|||||
|
Operating income margin |
|
9.7 |
% |
|
8.9 |
% |
|
7.3 |
% |
|
0.8pts |
2.4pts |
|||||||
|
Depreciation & amortization |
$ |
201 |
|
$ |
201 |
|
$ |
195 |
|
|
— |
% |
3 |
% |
|||||
|
EBITDA* |
$ |
462 |
|
$ |
422 |
|
$ |
366 |
|
|
9 |
% |
26 |
% |
|||||
|
EBITDA margin* |
|
17.2 |
% |
|
16.9 |
% |
|
15.5 |
% |
|
0.2pts |
1.6pts |
|||||||
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-over-year |
|||||||||||||
|
Orders |
$ |
723 |
|
$ |
739 |
|
$ |
681 |
|
|
(2 |
) % |
6 |
% |
|||||
|
Revenue |
$ |
541 |
|
$ |
528 |
|
$ |
637 |
|
|
2 |
% |
(15 |
)% |
|||||
|
Operating income (loss) |
$ |
(12 |
) |
$ |
(8 |
) |
$ |
28 |
|
|
(55 |
)% |
U |
||||||
|
Operating income margin |
|
(2.3 |
)% |
|
(1.5 |
)% |
|
4.3 |
% |
|
(0.8)pts |
(6.6)pts |
|||||||
|
Depreciation & amortization |
$ |
20 |
|
$ |
21 |
|
$ |
26 |
|
|
(2 |
)% |
(22 |
)% |
|||||
|
EBITDA* |
$ |
8 |
|
$ |
13 |
|
$ |
53 |
|
|
(38 |
)% |
(85 |
)% |
|||||
|
EBITDA margin* |
|
1.4 |
% |
|
2.4 |
% |
|
8.4 |
% |
|
(0.9)pts |
(6.9)pts |
|||||||
Oilfield Equipment (OFE) orders of
*Non-GAAP measure.
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-over-year |
||||||||||||||
|
Orders |
$ |
1,858 |
|
$ |
3,000 |
|
$ |
1,513 |
|
(38 |
)% |
23 |
% |
||||||
|
Revenue |
$ |
1,293 |
|
$ |
1,345 |
|
$ |
1,628 |
|
(4 |
)% |
(21 |
)% |
||||||
|
Operating income |
$ |
218 |
|
$ |
226 |
|
$ |
220 |
|
(4 |
)% |
(1 |
)% |
||||||
|
Operating income margin |
|
16.8 |
% |
|
16.8 |
% |
|
13.5 |
% |
0.1pts |
3.3pts |
||||||||
|
Depreciation & amortization |
$ |
29 |
|
$ |
29 |
|
$ |
30 |
|
2 |
% |
(3 |
)% |
||||||
|
EBITDA* |
$ |
247 |
|
$ |
255 |
|
$ |
250 |
|
(3 |
)% |
(1 |
)% |
||||||
|
EBITDA margin* |
|
19.1 |
% |
|
18.9 |
% |
|
15.4 |
% |
0.2pts |
3.8pts |
||||||||
Turbomachinery & Process Solutions (TPS) orders of
TPS revenue of
Segment operating income before tax for the quarter was
*Non-GAAP measure.
Digital Solutions
|
(in millions) |
Three Months Ended |
Variance |
|||||||||||||||||
|
Digital Solutions |
|
|
|
Sequential |
Year-over-year |
||||||||||||||
|
Orders |
$ |
609 |
|
$ |
567 |
|
$ |
540 |
|
7 |
% |
13 |
% |
||||||
|
Revenue |
$ |
524 |
|
$ |
474 |
|
$ |
520 |
|
11 |
% |
1 |
% |
||||||
|
Operating income |
$ |
18 |
|
$ |
15 |
|
$ |
25 |
|
21 |
% |
(28 |
)% |
||||||
|
Operating income margin |
|
3.4 |
% |
|
3.2 |
% |
|
4.8 |
% |
0.3pts |
(1.4)pts |
||||||||
|
Depreciation & amortization |
$ |
20 |
|
$ |
22 |
|
$ |
22 |
|
(9 |
)% |
(11 |
)% |
||||||
|
EBITDA* |
$ |
38 |
|
$ |
37 |
|
$ |
47 |
|
3 |
% |
(20 |
)% |
||||||
|
EBITDA margin* |
|
7.2 |
% |
|
7.7 |
% |
|
9.1 |
% |
(0.5)pts |
(1.9)pts |
||||||||
Digital Solutions (DS) orders of
DS revenue of
Segment operating income before tax for the quarter was
*Non-GAAP measure.
Reconciliation of GAAP to non-GAAP Financial Measures
Management provides non-GAAP financial measures 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.
Table 1a. Reconciliation of GAAP and Adjusted Operating Income/(Loss)
|
|
Three Months Ended |
|||||||||||
|
(in millions) |
|
|
|
|||||||||
|
Operating income (loss) (GAAP) |
$ |
(25 |
) |
$ |
279 |
$ |
194 |
|||||
|
Separation related |
|
9 |
|
|
9 |
|
|
15 |
|
|||
|
Restructuring, impairment & other |
|
362 |
|
|
61 |
|
|
125 |
|
|||
|
Inventory impairment |
|
31 |
|
|
— |
|
|
— |
|
|||
|
Total operating income adjustments |
|
402 |
|
|
70 |
|
|
139 |
|
|||
|
Adjusted operating income (non-GAAP) |
$ |
376 |
|
$ |
348 |
|
$ |
333 |
|
|||
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 Net Income (Loss) Attributable to Baker Hughes to EBITDA and Adjusted EBITDA
|
|
Three Months Ended |
|||||||||||
|
(in millions) |
|
|
|
|||||||||
|
Net income (loss) attributable to Baker Hughes (GAAP) |
$ |
(839 |
) |
$ |
72 |
$ |
(68 |
) |
||||
|
Net income (loss) attributable to noncontrolling interests |
|
2 |
|
|
8 |
|
|
(9 |
) |
|||
|
Provision for income taxes |
|
182 |
|
|
107 |
|
|
143 |
|
|||
|
Interest expense, net |
|
60 |
|
|
64 |
|
|
65 |
|
|||
|
Other non-operating loss, net |
|
570 |
|
|
28 |
|
|
63 |
|
|||
|
Operating income (loss) |
|
(25 |
) |
|
279 |
|
|
194 |
|
|||
|
|
|
|
|
|||||||||
|
Depreciation & amortization |
|
275 |
|
|
277 |
|
|
278 |
|
|||
|
EBITDA (non-GAAP) |
|
250 |
|
|
555 |
|
|
472 |
|
|||
|
Total operating income adjustments (1) |
|
402 |
|
|
70 |
|
|
139 |
|
|||
|
Adjusted EBITDA (non-GAAP) |
$ |
651 |
|
$ |
625 |
|
$ |
611 |
|
|||
|
(1) |
See Table 1a for the identified adjustments to operating income. |
Table 1b reconciles net income (loss) attributable to Baker Hughes, which is the directly comparable financial result determined in accordance with GAAP, to EBITDA (a non-GAAP financial measure). Adjusted EBITDA (a non-GAAP financial measure) excludes the impact of certain identified items.
Table 1c. Reconciliation of Net Income (Loss) Attributable to Baker Hughes to Adjusted Net Income Attributable to Baker Hughes
|
|
Three Months Ended |
|||||||||||
|
(in millions, except per share amounts) |
|
|
|
|||||||||
|
Net income (loss) attributable to Baker Hughes (GAAP) |
$ |
(839 |
) |
$ |
72 |
|
$ |
(68 |
) |
|||
|
Total operating income adjustments (1) |
|
402 |
|
|
70 |
|
|
139 |
|
|||
|
Other adjustments (non-operating) (2) |
|
580 |
|
|
19 |
|
|
71 |
|
|||
|
Tax on total adjustments |
|
(22 |
) |
|
(12 |
) |
|
(19 |
) |
|||
|
Total adjustments, net of income tax |
|
959 |
|
|
77 |
|
|
191 |
|
|||
|
Less: adjustments attributable to noncontrolling interests |
|
7 |
|
|
3 |
|
|
40 |
|
|||
|
Adjustments attributable to Baker Hughes |
|
953 |
|
|
74 |
|
|
151 |
|
|||
|
Adjusted net income attributable to Baker Hughes (non-GAAP) |
$ |
114 |
|
$ |
145 |
|
$ |
83 |
|
|||
|
|
|
|
|
|||||||||
|
|
|
|
|
|||||||||
|
Denominator: |
|
|
|
|||||||||
|
Weighted-average shares of Class A common stock outstanding diluted |
|
1,010 |
|
|
948 |
|
|
811 |
|
|||
|
Adjusted earnings per Class A share - diluted (non-GAAP) |
$ |
0.11 |
|
$ |
0.15 |
|
$ |
0.10 |
|
|||
|
(1) |
See Table 1a for the identified adjustments to operating income. |
|
(2) |
2Q'22 includes losses related to the OFS business in |
Table 1c 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 1d. Reconciliation of Cash Flow From Operating Activities to Free Cash Flow
|
|
Three Months Ended |
|||||||||||
|
(in millions) |
|
|
|
|||||||||
|
Cash flow from operating activities (GAAP) |
$ |
321 |
|
$ |
72 |
|
$ |
506 |
|
|||
|
Add: cash used in capital expenditures, net of proceeds from disposal of assets |
|
(174 |
) |
|
(177 |
) |
|
(121 |
) |
|||
|
Free cash flow (non-GAAP) |
$ |
147 |
|
$ |
(105 |
) |
$ |
385 |
|
|||
Table 1d 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.
Financial Tables (GAAP)
Condensed Consolidated Statements of Income (Loss)
(Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
(In millions, except per share amounts) |
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
|
Revenue |
$ |
5,047 |
|
$ |
5,142 |
|
$ |
9,882 |
|
$ |
9,924 |
|
||||
|
Costs and expenses: |
|
|
|
|
||||||||||||
|
Cost of revenue |
|
4,077 |
|
|
4,166 |
|
|
7,943 |
|
|
8,090 |
|
||||
|
Selling, general and administrative |
|
624 |
|
|
642 |
|
|
1,245 |
|
|
1,229 |
|
||||
|
Restructuring, impairment and other |
|
362 |
|
|
125 |
|
|
423 |
|
|
205 |
|
||||
|
Separation related |
|
9 |
|
|
15 |
|
|
18 |
|
|
42 |
|
||||
|
Total costs and expenses |
|
5,072 |
|
|
4,948 |
|
|
9,629 |
|
|
9,566 |
|
||||
|
Operating income (loss) |
|
(25 |
) |
|
194 |
|
|
253 |
|
|
358 |
|
||||
|
Other non-operating loss, net |
|
(570 |
) |
|
(63 |
) |
|
(597 |
) |
|
(689 |
) |
||||
|
Interest expense, net |
|
(60 |
) |
|
(65 |
) |
|
(124 |
) |
|
(138 |
) |
||||
|
Income (loss) before income taxes |
|
(655 |
) |
|
66 |
|
|
(468 |
) |
|
(469 |
) |
||||
|
Provision for income taxes |
|
(182 |
) |
|
(143 |
) |
|
(289 |
) |
|
(213 |
) |
||||
|
Net loss |
|
(837 |
) |
|
(77 |
) |
|
(757 |
) |
|
(682 |
) |
||||
|
Less: Net income (loss) attributable to noncontrolling interests |
|
2 |
|
|
(9 |
) |
|
10 |
|
|
(162 |
) |
||||
|
Net loss attributable to |
$ |
(839 |
) |
$ |
(68 |
) |
$ |
(767 |
) |
$ |
(520 |
) |
||||
|
|
|
|
|
|
||||||||||||
|
Per share amounts: |
|
|
|
|||||||||||||
|
Basic and diluted loss per Class A common stock |
$ |
(0.84 |
) |
$ |
(0.08 |
) |
$ |
(0.79 |
) |
$ |
(0.67 |
) |
||||
|
|
|
|
|
|
||||||||||||
|
Weighted average shares: |
|
|
|
|
||||||||||||
|
Class A basic & diluted |
|
1,001 |
|
|
806 |
|
|
970 |
|
|
773 |
|
||||
|
|
|
|
|
|
||||||||||||
|
Cash dividend per Class A common stock |
$ |
0.18 |
|
$ |
0.18 |
|
$ |
0.36 |
|
$ |
0.36 |
|
||||
|
|
|
|
|
|
||||||||||||
Condensed Consolidated Statements of Financial Position
(Unaudited)
|
(In millions) |
|
|
||||||
|
ASSETS |
||||||||
|
Current Assets: |
|
|
||||||
|
Cash and cash equivalents |
$ |
2,928 |
$ |
3,853 |
||||
|
Current receivables, net |
|
5,572 |
|
|
5,651 |
|
||
|
Inventories, net |
|
4,052 |
|
|
3,979 |
|
||
|
All other current assets |
|
1,647 |
|
|
1,582 |
|
||
|
Total current assets |
|
14,199 |
|
|
15,065 |
|
||
|
Property, plant and equipment, less accumulated depreciation |
|
4,531 |
|
|
4,877 |
|
||
|
|
|
5,741 |
|
|
5,959 |
|
||
|
Other intangible assets, net |
|
4,049 |
|
|
4,131 |
|
||
|
Contract and other deferred assets |
|
1,547 |
|
|
1,598 |
|
||
|
All other assets |
|
3,686 |
|
|
3,678 |
|
||
|
Total assets |
$ |
33,753 |
|
$ |
35,308 |
|
||
|
LIABILITIES AND EQUITY |
||||||||
|
Current Liabilities: |
|
|
||||||
|
Accounts payable |
$ |
3,764 |
|
$ |
3,745 |
|
||
|
Current portion of long-term debt |
|
34 |
|
|
40 |
|
||
|
Progress collections and deferred income |
|
3,289 |
|
|
3,232 |
|
||
|
All other current liabilities |
|
2,288 |
|
|
2,111 |
|
||
|
Total current liabilities |
|
9,375 |
|
|
9,128 |
|
||
|
Long-term debt |
|
6,625 |
|
|
6,687 |
|
||
|
Liabilities for pensions and other employee benefits |
|
996 |
|
|
1,110 |
|
||
|
All other liabilities |
|
1,671 |
|
|
1,637 |
|
||
|
Equity |
|
15,086 |
|
|
16,746 |
|
||
|
Total liabilities and equity |
$ |
33,753 |
|
$ |
35,308 |
|
||
|
|
|
|
||||||
|
Outstanding |
|
|
||||||
|
Class A common stock |
|
1,012 |
|
|
909 |
|
||
|
Class B common stock |
|
7 |
|
|
117 |
|
||
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||
|
(In millions) |
2022 |
|
2022 |
|
2021 |
|||||||
|
Cash flows from operating activities: |
|
|
|
|||||||||
|
Net loss |
$ |
(837 |
) |
$ |
(757 |
) |
$ |
(682 |
) |
|||
|
Adjustments to reconcile net loss to net cash flows from operating activities: |
|
|
|
|||||||||
|
Depreciation and amortization |
|
275 |
|
|
551 |
|
|
570 |
|
|||
|
Loss on assets held for sale |
|
426 |
|
|
426 |
|
|
— |
|
|||
|
Loss on equity securities |
|
123 |
|
|
112 |
|
|
815 |
|
|||
|
Other asset impairments |
|
72 |
|
|
72 |
|
|
22 |
|
|||
|
Working capital |
|
12 |
|
|
(81 |
) |
|
571 |
|
|||
|
Other operating items, net |
|
250 |
|
|
70 |
|
|
(112 |
) |
|||
|
Net cash flows from operating activities |
|
321 |
|
|
393 |
|
|
1,184 |
|
|||
|
Cash flows from investing activities: |
|
|
|
|||||||||
|
Expenditures for capital assets, net of proceeds from disposal of assets |
|
(174 |
) |
|
(351 |
) |
|
(301 |
) |
|||
|
Other investing items, net |
|
10 |
|
|
(79 |
) |
|
171 |
|
|||
|
Net cash flows used in investing activities |
|
(164 |
) |
|
(430 |
) |
|
(130 |
) |
|||
|
Cash flows from financing activities: |
|
|
|
|||||||||
|
Net repayments of debt and other borrowings |
|
(4 |
) |
|
(15 |
) |
|
(45 |
) |
|||
|
Repayment of commercial paper |
|
— |
|
|
— |
|
|
(832 |
) |
|||
|
Dividends paid |
|
(182 |
) |
|
(354 |
) |
|
(280 |
) |
|||
|
Distributions to |
|
(1 |
) |
|
(15 |
) |
|
(95 |
) |
|||
|
Repurchase of Class A common stock |
|
(226 |
) |
|
(462 |
) |
|
— |
|
|||
|
Other financing items, net |
|
14 |
|
|
(22 |
) |
|
(33 |
) |
|||
|
Net cash flows used in financing activities |
|
(399 |
) |
|
(868 |
) |
|
(1,285 |
) |
|||
|
Effect of currency exchange rate changes on cash and cash equivalents |
|
(21 |
) |
|
(20 |
) |
|
12 |
|
|||
|
Decrease in cash and cash equivalents |
|
(263 |
) |
|
(925 |
) |
|
(219 |
) |
|||
|
Cash and cash equivalents, beginning of period |
|
3,191 |
|
|
3,853 |
|
|
4,132 |
|
|||
|
Cash and cash equivalents, end of period |
$ |
2,928 |
|
$ |
2,928 |
|
$ |
3,913 |
|
|||
|
Supplemental cash flows disclosures: |
|
|
|
|||||||||
|
Income taxes paid, net of refunds |
$ |
152 |
|
$ |
282 |
|
$ |
48 |
|
|||
|
Interest paid |
$ |
92 |
|
$ |
140 |
|
$ |
157 |
|
|||
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:
COVID-19 - The continued spread of the COVID-19 virus and related uncertainties.
Economic and political conditions - the impact of worldwide economic conditions and rising inflation; 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, including
About Baker Hughes:
Baker Hughes (Nasdaq: BKR) is an energy technology company that provides solutions for energy and industrial customers worldwide. Built on a century of experience and conducting business in over 120 countries, our innovative technologies and services are taking energy forward - making it safer, cleaner and more efficient for people and the planet. Visit us at bakerhughes.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20220720005109/en/
Investor Relations
+1 281-809-9088
investor.relations@bakerhughes.com
Media Relations
+1 713-879-2862
thomas.millas@bakerhughes.com
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