Baker Hughes Announces Fourth Quarter and Annual Results
Adjusted net income for the year 2011 was
Net income attributable to
Revenue for the fourth quarter 2011 was
"In
"The issues in Pressure Pumping were related to the availability, cost and transportation of materials, such as sand and gel. Further, as we increased headcount and added capacity to address the growing market needs, we were not able to sufficiently utilize these resources. We are resolving these issues and expect to see improvement in the second half of the year.
"Finally, I would like to thank
Debt increased by $169 million to $4.07 billion compared to the third quarter 2011. Cash and short-term investments increased by $247 million to $1.05 billion compared to the third quarter 2011. Capital expenditures were
For the year, capital expenditures were
Adjusted EBITDA (a non-GAAP measure) in the fourth quarter 2011 was
Consolidated Condensed Statements of Operations (Unaudited) |
|||||
|
Three Months Ended |
||||
|
December 31, |
|
September 30, |
||
(In millions, except per share amounts) |
2011 |
|
2010 |
|
2011 |
Revenue |
$ 5,387 |
|
$ 4,423 |
|
$ 5,178 |
|
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
|
Cost of revenue |
4,118 |
|
3,421 |
|
3,931 |
Research and engineering |
125 |
|
105 |
|
117 |
Marketing, general and administrative |
303 |
|
279 |
|
313 |
Impairment of trade names |
315 |
|
- |
|
- |
Acquisition-related costs |
- |
|
56 |
|
- |
Total costs and expenses |
4,861 |
|
3,861 |
|
4,361 |
|
|
|
|
|
|
Operating income |
526 |
|
562 |
|
817 |
Gain on investments |
- |
|
6 |
|
- |
Interest expense, net |
(57) |
|
(48) |
|
(58) |
Loss on early extinguishment of debt |
- |
|
- |
|
(40) |
Income before income taxes |
469 |
|
520 |
|
719 |
Income taxes |
(151) |
|
(178) |
|
(13) |
Net income |
318 |
|
342 |
|
706 |
Net income attributable to noncontrolling interests |
(4) |
|
(7) |
|
- |
Net income attributable to Baker Hughes |
$ 314 |
|
$ 335 |
|
$ 706 |
|
|
|
|
|
|
Basic earnings per share attributable to Baker Hughes |
$ 0.72 |
|
$ 0.78 |
|
$ 1.62 |
|
|
|
|
|
|
Diluted earnings per share attributable to Baker Hughes |
$ 0.72 |
|
$ 0.77 |
|
$ 1.61 |
|
|
|
|
|
|
Weighted average shares outstanding, basic |
438 |
|
432 |
|
437 |
Weighted average shares outstanding, diluted |
439 |
|
434 |
|
439 |
|
|
|
|
|
|
Depreciation and amortization expense |
$ 343 |
|
$ 326 |
|
$ 332 |
|
|
|
|
|
|
Capital expenditures |
$ 810 |
|
$ 486 |
|
$ 628 |
Financial Information Consolidated Condensed Statements of Operations (Unaudited) |
||||
|
|
Twelve Months Ended December 31, |
||
(In millions, except per share amounts) |
|
2011 |
|
2010 |
Revenue |
|
$ 19,831 |
|
$ 14,414 |
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
Cost of revenue |
|
15,264 |
|
11,184 |
Research and engineering |
|
462 |
|
429 |
Marketing, general and administrative |
|
1,190 |
|
1,250 |
Impairment of trade names |
|
315 |
|
- |
Acquisition-related costs |
|
- |
|
134 |
Total costs and expenses |
|
17,231 |
|
12,997 |
|
|
|
|
|
Operating income |
|
2,600 |
|
1,417 |
Gain on investments |
|
- |
|
6 |
Interest expense, net |
|
(221) |
|
(141) |
Loss on early extinguishment of debt |
|
(40) |
|
- |
Income before income taxes |
|
2,339 |
|
1,282 |
Income taxes |
|
(596) |
|
(463) |
Net Income |
|
1,743 |
|
819 |
Net income attributable to noncontrolling interests |
|
(4) |
|
(7) |
Net income attributable to Baker Hughes |
|
$ 1,739 |
|
$ 812 |
|
|
|
|
|
Basic earnings per share attributable to Baker Hughes |
|
$ 3.99 |
|
$ 2.06 |
|
|
|
|
|
Diluted earnings per share attributable to Baker Hughes |
|
$ 3.97 |
|
$ 2.06 |
|
|
|
|
|
Weighted average shares outstanding, basic |
|
436 |
|
394 |
Weighted average shares outstanding, diluted |
|
438 |
|
395 |
|
|
|
|
|
Depreciation and amortization expense |
|
$ 1,321 |
|
$ 1,069 |
|
|
|
|
|
Capital expenditures |
|
$ 2,461 |
|
$ 1,491 |
Consolidated Condensed Balance Sheets (Unaudited) |
|||
|
December 31, |
||
(In millions) |
2011 |
|
2010 |
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ 1,050 |
|
$ 1,456 |
Short-term investments |
- |
|
250 |
Accounts receivable, net |
4,878 |
|
3,942 |
Inventories, net |
3,222 |
|
2,594 |
Other current assets |
522 |
|
465 |
Total current assets |
9,672 |
|
8,707 |
|
|
|
|
Property, plant and equipment, net |
7,415 |
|
6,310 |
Goodwill |
5,956 |
|
5,869 |
Intangible assets, net |
1,143 |
|
1,569 |
Other assets |
644 |
|
531 |
Total assets |
$ 24,830 |
|
$ 22,986 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Accounts payable |
$ 1,810 |
|
$ 1,496 |
Short-term borrowings and current portion of |
224 |
|
331 |
Accrued employee compensation |
704 |
|
589 |
Other accrued liabilities |
697 |
|
723 |
Total current liabilities |
3,435 |
|
3,139 |
|
|
|
|
Long-term debt |
3,845 |
|
3,554 |
Deferred income taxes and other tax liabilities |
860 |
|
1,360 |
Long-term liabilities |
726 |
|
647 |
|
|
|
|
Equity |
15,964 |
|
14,286 |
Total liabilities and equity |
$ 24,830 |
|
$ 22,986 |
Consolidated Condensed Statements of Cash Flows (Unaudited) |
||||
|
|
Twelve Months Ended |
||
|
|
December 31, |
||
(In millions) |
|
2011 |
|
2010 |
Cash flows from operating activities: |
|
|
|
|
Net income |
|
$ 1,743 |
|
$ 819 |
Adjustments to reconcile net income to net cash flows from operating activities: |
|
|
|
|
Depreciation and amortization |
|
1,321 |
|
1,069 |
Other, primarily working capital |
|
(1,546) |
|
(1,032) |
Net cash flows from operating activities |
|
1,518 |
|
856 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Expenditures for capital assets |
|
(2,461) |
|
(1,491) |
Proceeds (purchase) from maturities of short-term investments |
|
250 |
|
(250) |
Acquisition of businesses, net of cash acquired |
|
(5) |
|
(888) |
Other |
|
325 |
|
253 |
Net cash flows from investing activities |
|
(1,891) |
|
(2,376) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Net proceeds of debt |
|
57 |
|
1,531 |
Dividends |
|
(261) |
|
(241) |
Other |
|
163 |
|
76 |
Net cash flows from financing activities |
|
(41) |
|
1,366 |
|
|
|
|
|
Effect of foreign exchange rate changes on cash |
|
8 |
|
15 |
Decrease in cash and cash equivalents |
|
(406) |
|
(139) |
Cash and cash equivalents, beginning of period |
|
1,456 |
|
1,595 |
Cash and cash equivalents, end of period |
|
$ 1,050 |
|
$ 1,456 |
Table 1: Reconciliation of GAAP and Non-GAAP Financial Measures(1)
The following tables reconcile net income attributable to
Three months ended December 31, 2011 |
|||||
(Unaudited) (In millions, except per share amounts) |
|
|
|
Net Income |
Diluted Earnings Per Share |
Net income attributable to Baker Hughes (GAAP) |
|
|
|
$ 314 |
$ 0.72 |
Identified Item: |
|
|
|
|
|
Impairment of trade names(2) |
|
|
|
220 |
0.50 |
Adjusted net income (non-GAAP) |
|
|
|
$ 534 |
$ 1.22 |
Three months ended September 30, 2011 |
|||||
(Unaudited) (In millions, except per share amounts) |
|
|
|
Net Income |
Diluted Earnings Per Share |
Net income attributable to Baker Hughes (GAAP) |
|
|
|
$ 706 |
$ 1.61 |
Identified Item: |
|
|
|
|
|
Tax benefit associated with reorganization(3) |
|
|
|
(214) |
(0.49) |
Loss on early extinguishment of debt(4) |
|
|
|
26 |
0.06 |
Adjusted net income (non-GAAP) |
|
|
|
$ 518 |
$ 1.18 |
Twelve months ended December 31, 2011 |
|||||
(Unaudited) (In millions, except per share amounts) |
|
|
|
Net Income |
Diluted Earnings Per Share |
Net income attributable to Baker Hughes (GAAP) |
|
|
|
$ 1,739 |
$ 3.97 |
Identified Item: |
|
|
|
|
|
Expenses related to Libya(5) |
|
|
|
70 |
0.16 |
Tax benefit associated with reorganization(3) |
|
|
|
(214) |
(0.49) |
Loss on early extinguishment of debt(4) |
|
|
|
26 |
0.06 |
Impairment of trade names(2) |
|
|
|
220 |
0.50 |
Adjusted net income (non-GAAP) |
|
|
|
$ 1,841 |
$ 4.20 |
(1) Adjusted net income is a non-GAAP measure comprised of net income attributable to
(2) Charge of
(3) Noncash tax benefit of
(4) Loss of
(5) Expenses of
Table 2: Calculation of EBIT, EBITDA and Adjusted EBITDA (non-GAAP measures)(1)
(In millions) |
Three Months Ended |
||
December 31, 2011 |
December 31, 2010 |
September 30, 2011 |
|
Net income attributable to Baker Hughes |
$ 314 |
$ 335 |
$ 706 |
Net income attributable to NCI(2) |
4 |
7 |
- |
Income taxes |
151 |
178 |
13 |
Income before income taxes |
469 |
520 |
719 |
Interest expense, net |
57 |
48 |
58 |
Earnings before interest and taxes (EBIT) |
526 |
568 |
777 |
Depreciation and amortization expense |
343 |
326 |
332 |
Earnings before interest, taxes, depreciation and amortization (EBITDA) |
869 |
894 |
1,109 |
Adjustments to EBITDA: |
|
|
|
Acquisition-related costs(3) |
- |
56 |
- |
Impairment of trade names(4) |
315 |
- |
- |
Gain on investments |
- |
(6) |
- |
Loss on early extinguishment of debt(5) |
- |
- |
40 |
Adjusted EBITDA |
$ 1,184 |
$ 944 |
$ 1,149 |
(In millions) |
Twelve Months Ended |
|
December 31, 2011 |
December 31, 2010(6) |
|
Net income attributable to Baker Hughes |
$ 1,739 |
$ 812 |
Net income attributable to NCI(2) |
4 |
7 |
Income taxes |
596 |
463 |
Income before income taxes |
2,339 |
1,282 |
Interest expense, net |
221 |
141 |
Earnings before interest and taxes (EBIT) |
2,560 |
1,423 |
Depreciation and amortization expense |
1,321 |
1,069 |
Earnings before interest, taxes, depreciation and amortization (EBITDA) |
3,881 |
2,492 |
Adjustments to EBITDA: |
|
|
Acquisition-related costs(3) |
- |
134 |
Impairment of trade names(4) |
315 |
- |
Expenses related to Libya(7) |
70 |
- |
Gain on investments |
- |
(6) |
Loss on early extinguishment of debt(5) |
40 |
- |
Adjusted EBITDA |
$ 4,306 |
$ 2,620 |
(1) EBIT, EBITDA and Adjusted EBITDA (as defined in the calculations above) are non-GAAP measurements. Management is providing these measures because it believes that such measurements are widely accepted financial indicators used by investors and analysts to analyze and compare companies on the basis of operating performance.
(2) Noncontrolling interests.
(3) Costs related to the acquisition of BJ Services.
(4) Charge of
(5) Loss of
(6) Includes results of BJ Services starting from April 28, 2010.
(7) Expenses of
Table 3a: Segment Revenue, Profit Before Tax, and Profit Before Tax Margin(1)
|
Three Months Ended |
||
|
December 31, |
September 30, |
|
(In millions) |
2011 |
2010 |
2011 |
Segment Revenue |
|
|
|
North America |
$ 2,821 |
$ 2,210 |
$ 2,716 |
Latin America |
600 |
482 |
568 |
Europe/Africa/Russia Caspian |
898 |
793 |
850 |
Middle East/Asia Pacific |
752 |
657 |
708 |
Industrial Services and Other |
316 |
281 |
336 |
Total Operations |
$ 5,387 |
$ 4,423 |
$ 5,178 |
Profit Before Tax(2) |
|
|
|
North America |
$ 422 |
$ 478 |
$ 607 |
Latin America |
22 |
43 |
71 |
Europe/Africa/Russia Caspian |
99 |
64 |
105 |
Middle East/Asia Pacific |
70 |
68 |
84 |
Industrial Services and Other |
(23) |
28 |
28 |
Total Operations |
590 |
681 |
895 |
Corporate and Other Profit Before Tax |
|
|
|
Acquisition-related costs |
- |
(56) |
- |
Interest expense, net |
(57) |
(48) |
(58) |
Gain on investments |
- |
6 |
- |
Loss on early extinguishment of debt |
- |
- |
(40) |
Corporate and other |
(64) |
(63) |
(78) |
Corporate, net interest and other |
(121) |
(161) |
(176) |
Profit Before Tax |
$ 469 |
$ 520 |
$ 719 |
Profit Before Tax Margin(1) |
|
|
|
North America |
15% |
22% |
22% |
Latin America |
4% |
9% |
13% |
Europe/Africa/Russia Caspian |
11% |
8% |
12% |
Middle East/Asia Pacific |
9% |
10% |
12% |
Industrial Services and Other |
(7%) |
10% |
8% |
Total Operations |
11% |
15% |
17% |
(1) Profit before tax margin is a non-GAAP measure defined as profit before tax ("income before income taxes") divided by revenue. Management uses the profit before tax margin because it believes it is a widely accepted financial indicator used by investors and analysts to analyze and compare companies on the basis of operating performance.
(2) Includes a charge of
Table 3b: Segment Revenue, Profit Before Tax, and Profit Before Tax Margin,(1)
|
Twelve Months Ended December 31, |
|
(In millions) |
2011 |
2010(4) |
Segment Revenue |
|
|
North America |
$ 10,257 |
$ 6,621 |
Latin America |
2,183 |
1,569 |
Europe/Africa/Russia Caspian |
3,325 |
3,006 |
Middle East/Asia Pacific |
2,820 |
2,247 |
Industrial Services and Other |
1,246 |
971 |
Total Operations |
$ 19,831 |
$ 14,414 |
Profit Before Tax(2) |
|
|
North America |
$ 1,929 |
$ 1,163 |
Latin America |
227 |
74 |
Europe/Africa/Russia Caspian(3) |
342 |
260 |
Middle East/Asia Pacific |
321 |
177 |
Industrial Services and Other |
53 |
99 |
Total Operations |
2,872 |
1,773 |
Corporate and Other Profit Before Tax |
|
|
Acquisition-related costs |
- |
(134) |
Gain on investments |
- |
6 |
Interest expense, net |
(221) |
(141) |
Loss on early extinguishment of debt |
(40) |
- |
Corporate and other |
(272) |
(222) |
Corporate, net interest and other |
(533) |
(491) |
Profit Before Tax |
$ 2,339 |
$ 1,282 |
Profit Before Tax Margin(1) |
|
|
North America |
19% |
18% |
Latin America |
10% |
5% |
Europe/Africa/Russia Caspian |
10% |
9% |
Middle East/Asia Pacific |
11% |
8% |
Industrial Services and Other |
4% |
10% |
Total Operations |
14% |
12% |
(1) Profit before tax margin is a non-GAAP measure defined as profit before tax ("income before income taxes") divided by revenue. Management uses the profit before tax margin because it believes it is a widely accepted financial indicator used by investors and analysts to analyze and compare companies on the basis of operating performance.
(2) Includes a charge of
(3) Includes expenses of
(4) Includes results of BJ Services starting from April 28, 2010
Table 4: Charges for Impairment of Trade Names and Expenses Related to
|
Three Months Ended |
Twelve Months Ended |
(In millions) |
December 31, 2011 |
December 31, 2011 |
Operating Profit Before Tax |
|
|
North America |
$ 105 |
$ 105 |
Latin America |
64 |
64 |
Europe/Africa/Russia Caspian |
48 |
118 |
Middle East/Asia Pacific |
47 |
47 |
Industrial Services and Other |
51 |
51 |
Total Operations |
$ 315 |
$ 385 |
(1) Charges associated with the impairment of certain trade names were
Table 5a: Supplemental Financial Information Excluding Certain Identified Items
The following table contains non-GAAP measures of operating profit before tax and operating profit before tax margin excluding charges for the impairment of certain trade names and expenses related to
|
Three Months Ended |
||
|
December 31, |
September 30, |
|
(In millions) |
2011 |
2010 |
2011 |
Segment Revenue |
|
|
|
North America |
$ 2,821 |
$ 2,210 |
$ 2,716 |
Latin America |
600 |
482 |
568 |
Europe/Africa/Russia Caspian |
898 |
793 |
850 |
Middle East/Asia Pacific |
752 |
657 |
708 |
Industrial Services and Other |
316 |
281 |
336 |
Total Operations |
$ 5,387 |
$ 4,423 |
$ 5,178 |
|
|
|
|
Operating Profit Before Tax(1) |
|
|
|
North America |
$ 527 |
$ 478 |
$ 607 |
Latin America |
86 |
43 |
71 |
Europe/Africa/Russia Caspian |
147 |
64 |
105 |
Middle East/Asia Pacific |
117 |
68 |
84 |
Industrial Services and Other |
28 |
28 |
28 |
Total Operations |
$ 905 |
$ 681 |
$ 895 |
|
|
|
|
Operating Profit Before Tax Margin(1) |
|
|
|
North America |
19% |
22% |
22% |
Latin America |
14% |
9% |
13% |
Europe/Africa/Russia Caspian |
16% |
8% |
12% |
Middle East/Asia Pacific |
16% |
10% |
12% |
Industrial Services and Other |
9% |
10% |
8% |
Total Operations |
17% |
15% |
17% |
(1) Operating profit before tax is a non-GAAP measure defined as profit before tax ("income before income taxes") less certain identified costs. Operating profit before tax margin is a non-GAAP measure defined as operating profit before tax divided by revenue. Management uses each of these measures because it believes they are widely accepted financial indicator used by investors and analysts to analyze and compare companies on the basis of operating performance and that these measurements may be used by investors to make informed investment decisions.
Table 5b: Supplemental Financial Information Excluding Certain Identified Items (Pro Forma Combined Basis)(1)
The following table contains non-GAAP measures of operating profit before tax and operating profit before tax margin excluding charges for the impairment of certain trade names and expenses related to
|
Twelve Months Ended December 31, |
|||
(In millions) |
2011 |
2010(1) |
||
Segment Revenue |
|
|
||
North America |
$ 10,257 |
$ 7,585 |
||
Latin America |
2,183 |
1,736 |
||
Europe/Africa/Russia Caspian |
3,325 |
3,132 |
||
Middle East/Asia Pacific |
2,820 |
2,396 |
||
Industrial Services and Other |
1,246 |
1,054 |
||
Total Operations |
$ 19,831 |
$ 15,903 |
||
|
|
|
||
Operating Profit Before Tax(2) |
|
|
||
North America |
$ 2,034 |
$ 1,217 |
||
Latin America |
291 |
66 |
||
Europe/Africa/Russia Caspian |
460 |
264 |
||
Middle East/Asia Pacific |
368 |
191 |
||
Industrial Services and Other |
104 |
102 |
||
Total Operations |
$ 3,257 |
$ 1,840 |
||
|
|
|
||
Operating Profit Before Tax Margin(2) |
|
|
||
North America |
20% |
16% |
||
Latin America |
13% |
4% |
||
Europe/Africa/Russia Caspian |
14% |
8% |
||
Middle East/Asia Pacific |
13% |
8% |
||
Industrial Services and Other |
8% |
10% |
||
Total Operations |
16% |
12% |
||
|
|
|
|
|
(1) The pro forma supplemental financial information for 2010 includes the financial results for BJ Services as if the acquisition occurred as of
(2) Operating profit before tax is a non-GAAP measure defined as profit before tax ("income before income taxes") less certain identified costs. Operating profit before tax margin is a non-GAAP measure defined as operating profit before tax divided by revenue. Management uses each of these measures because it believes they are widely accepted financial indicator used by investors and analysts to analyze and compare companies on the basis of operating performance and that these measurements may be used by investors to make informed investment decisions.
Operational Highlights
In the Gulf of
In
In the US,
Throughout
In
Our Reservoir Development Services group is active throughout the
In
In
In
In
Supplemental Financial Information
Supplemental financial information for the first quarter 2008 through the fourth quarter 2011 can be found on our website at www.bakerhughes.com/investor in the Financial Information section.
Conference Call
The company has scheduled a conference call to discuss the results reported in today's earnings announcement. The call will begin at 8:30 a.m. Eastern time, 7:30 a.m. Central time, on Tuesday January 24, 2012, the content of which is not part of this earnings release. A slide presentation providing summary financial and statistical information that will be discussed on the conference call will also be posted to the company's website and available for real-time viewing. To access the call, please call the conference call operator at 800-374-2469, or 706-634-7270 for international calls, 20 minutes prior to the scheduled start time and ask for the "Baker Hughes Conference Call." A replay of the call will be available through
Forward-Looking Statements
This news release (and oral statements made regarding the subjects of this release, including on the conference call announced herein) 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," "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/A for the year ended December 31, 2010 and those set forth from time to time in other filings with the
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 including the following risk factors and the timing of any of these risk factors:
Economic conditions – the impact of worldwide economic conditions and sovereign debt crises in
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; the timing for new drilling permits both on the shelf and in the deepwater; and changes in the regulation of drilling in the US Gulf of
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; expropriation of assets by governmental action; cybersecurity risks and cyber incidents or attacks.
Price, market share, contract terms, and customer payments – our ability to obtain market prices for our products and services; the effect of the level and sources of our profitability on our tax rate; the ability of our competitors to capture market share; our ability to retain or increase our market share; changes in our strategic direction; the effect of industry capacity relative to demand for the markets in which we participate; our ability to negotiate acceptable terms and conditions with our customers, especially national oil companies, to successfully execute these contracts, and receive payment in accordance with the terms of our contracts with our customers; our ability to manage warranty claims and improve performance and quality; our ability to effectively manage our commercial agents.
Costs and availability of resources – our ability to manage the costs and availability of sufficient raw materials and components (especially steel alloys, chromium, copper, carbide, lead, nickel, titanium, beryllium, barite, synthetic and natural diamonds, sand, gel, chemicals, and electronic components); our ability to manage energy-related costs; our ability to manage compliance-related costs; our ability to recruit, train and retain the skilled and diverse workforce necessary to meet our business needs and manage the associated costs; the effect of manufacturing and subcontracting performance and capacity; the availability of essential electronic components used in our products; the effect of competition, particularly our ability to introduce new technology on a forecasted schedule and at forecasted costs; potential impairment of long-lived assets; the accuracy of our estimates regarding our capital spending requirements; unanticipated changes in the levels of our capital expenditures; the need to replace any unanticipated losses in capital assets; labor-related actions, including strikes, slowdowns and facility occupations; our ability to maintain information security.
Litigation and changes in laws or regulatory conditions – the potential for unexpected litigation or proceedings and our ability to obtain adequate insurance on commercially reasonable terms; the legislative, regulatory and business environment in the US and other countries in which we operate; outcome of government and legal proceedings as well as costs arising from compliance and ongoing or additional investigations in any of the countries where the company does business; new laws, regulations and policies that could have a significant impact on the future operations and conduct of all businesses; laws, regulations or restrictions on hydraulic fracturing; any restrictions on new or ongoing offshore drilling or permit and operational delays or program reductions as a result of the new regulations in the Gulf of
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