Baker Hughes Company Announces First Quarter 2021 Results
- Orders of
$4.5 billion for the quarter, down 12% sequentially and down 18% year-over-year. - Revenue of
$4.8 billion for the quarter, down 13% sequentially and down 12% year-over-year. - GAAP operating income of
$164 million for the quarter, down 10% sequentially and favorable year-over-year. - Adjusted operating income (a non-GAAP measure) of
$270 million for the quarter was down 42% sequentially and up 13% year-over-year. - Adjusted EBITDA* (a non-GAAP measure) of
$562 million for the quarter was down 27% sequentially and down 5% year-over-year. - GAAP loss per share of
$(0.61) for the quarter which included$0.73 per share of adjusting items. Adjusted earnings per share (a non-GAAP measure) was$0.12 . - Cash flows generated from operating activities were
$678 million for the quarter. Free cash flow (a non-GAAP measure) for the quarter was$498 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." See Exhibit 99.2 for additional reconciliations of certain GAAP to non-GAAP financial measures as a Financial Supplement to this earnings release. 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- |
||||||
|
Orders |
$ |
4,541 |
|
$ |
5,188 |
|
$ |
5,532 |
|
|
(12)% |
(18)% |
|
Revenue |
4,782 |
|
5,495 |
|
5,425 |
|
|
(13)% |
(12)% |
|||
|
Operating income (loss) |
164 |
|
182 |
|
(16,059) |
|
|
(10)% |
F |
|||
|
Adjusted operating income (non-GAAP) |
270 |
|
462 |
|
240 |
|
|
(42)% |
13% |
|||
|
Adjusted EBITDA (non-GAAP) |
562 |
|
770 |
|
594 |
|
|
(27)% |
(5)% |
|||
|
Net income (loss) attributable to Baker Hughes |
(452) |
|
653 |
|
(10,227) |
|
|
U |
96% |
|||
|
Adjusted net income (loss) (non-GAAP) attributable to Baker Hughes |
91 |
|
(50) |
|
70 |
|
|
F |
30% |
|||
|
EPS attributable to Class A shareholders |
(0.61) |
|
0.91 |
|
(15.66) |
|
|
U |
96% |
|||
|
Adjusted EPS (non-GAAP) attributable to Class A shareholders |
0.12 |
|
(0.07) |
|
0.11 |
|
|
F |
14% |
|||
|
Cash flow from operating activities |
678 |
|
378 |
|
478 |
|
|
79% |
42% |
|||
|
Free cash flow (non-GAAP) |
498 |
|
250 |
|
152 |
|
|
99% |
F |
|||
"F" is used in most instances when variance is above 100%. Additionally, "U" is used in most instances when variance is below (100)%.
“We are pleased with our first quarter results as we generated strong free cash flow, continued to drive forward our cost-out efforts, and took further meaningful steps in the execution of our strategy. During the quarter, TPS delivered solid orders and operating income while OFS continued to execute cost-out programs to help drive another strong quarter of margin performance. We also advanced our position in the energy transition, investing in strategic areas for growth and entering important partnerships to advance new energy frontiers including hydrogen and carbon capture, utilization and storage. I want to thank our employees for their continued hard work and commitment to safety,” said
“As we look ahead to the rest of 2021, we remain cautiously optimistic that the global economy and oil demand will recover from the impact of the global pandemic. We expect spending and activity levels to gain momentum through the year as the macro environment improves, likely setting up the industry for stronger growth in 2022.
“We remain focused on executing our strategy, and are well positioned to benefit from an economic recovery while leading the energy transition and the journey to net-zero. We will continue to take energy forward by supporting our customers, staying disciplined on our strategic priorities, and delivering for our shareholders,” concluded Simonelli.
Quarter Highlights
Supporting our Customers
The OFS segment executed a major software deployment for Saudi Aramco, deploying its WellLink™ service to deliver real-time data visualization and analysis across all Saudi Aramco drilling activities. The five-year contract was awarded in 2020 and includes a detailed planning phase to transition from the incumbent provider to Baker Hughes. Using WellLink, Saudi Aramco personnel can collaborate and make decisions using a single view of data, paving the way for the use of artificial intelligence to enhance operations. Despite significant pandemic-related challenges, the deployment was completed 50% faster than planned and used local resources extensively.
Baker Hughes continued to invest in localization for
The TPS segment continued to maintain its leadership in FPSO and LNG with several offshore topside contracts in
The DS segment continued to expand across industrial end markets, including marine, aerospace, electronics, and pulp and paper. The
DS secured major contracts to advance customers’ energy transition goals, helping to reduce methane and carbon emissions as well as improve efficiencies. The Panametrics product line secured several orders for the Flare.IQ advanced flare gas monitoring and optimization system, with contracts for oil and gas operators in
Executing on Priorities
Baker Hughes made progress in strategically positioning the company for new frontiers, announcing new collaborations to advance industrial decarbonization and low- to zero-carbon solutions:
- Signed a cooperation agreement with PAO NOVATEK to decarbonize natural gas and LNG production by developing and implementing innovative compression and power generation technologies for NOVATEK’s LNG projects. The agreement will begin with a pilot program to introduce hydrogen blends into the main process for natural gas liquefaction to reduce carbon dioxide emissions from LNG export terminals including NOVATEK’s
Yamal LNG complex. - Signed a memorandum of understanding (MOU) with Horisont Energi AS for the Polaris offshore carbon storage facility in
Norway to explore the development and integration of technologies to minimize the footprint, cost and delivery time for carbon capture, transport and storage. The Polaris facility is part of the “Barents Blue” project, the first global and full-scale carbon neutral “blue” ammonia production plant. The project is expected to have a total carbon storage capacity of 100+ million tons, equivalent to twice Norway’s annual greenhouse gas emissions. - Acquired from
SRI International an exclusive license for the use of Mixed Salt Process technology for carbon capture applications including fossil-fueled power plants, gas turbines, industrial applications, and the cement industry. The agreement further expands and complements Baker Hughes’ CCUS technology portfolio offering as it strategically positions to be able to offer customers a variety of solutions based on project size, design requirements and plant location.
The OFS and OFE segments continued to transform core operations and improve productivity and profitability, developing new business models and exiting product lines and geographies that did not meet strong return requirements. OFS completed the sale of pressure pumping assets in Argentina’s Neuquén Basin to Tenaris, including a hydraulic fracturing fleet, coiled tubing unit and related equipment. OFE announced a joint venture company (JV) with Akastor ASA to combine Baker Hughes’ Subsea Drilling Systems business with Akastor’s subsidiary,
OFS continued to see growth in the Chemicals product line with a five-year production chemicals contract from a major operator in
OFE expanded its non-metallic materials portfolio and won multiple contracts in its Flexible Pipe Systems (FPS) product lines. A new onshore composite flexible pipe was launched in January, addressing the corrosion and cost of ownership challenges with conventional steel pipes for the energy and industrial sectors. The lightweight reinforced thermoplastic pipe (RTP) is manufactured at a state-of-the-art
DS expanded its industrial asset performance management (APM) portfolio by acquiring ARMS Reliability, a leading global provider of reliability solutions deploying reliability engineering, data capture, integration, visualization, and analytics to improve the reliability and availability of physical assets. The acquisition closed on
Leading with Innovation
Baker Hughes continued to develop technologies to advance the energy transition, improve efficiencies, reduce emissions and accelerate the digital transformation of industrial segments.
BakerHughesC3.ai (BHC3) released its latest application, BHC3 Production Schedule Optimization (PSO). PSO improves supply chain and delivery performance for highly engineered products while minimizing manufacturing costs. The application generates industrial customer demand predictions and optimal production schedules using a holistic view of buyer activity, supply chain materials, and manufacturing and distribution options. PSO is the third BHC3 AI-based application released since the alliance was formed in 2019 and allows for further customer penetration in the downstream oil and gas segment.
OFS continued to innovate to reduce emissions and environmental footprint for customers. The Artificial Lift and Completions product lines secured a contract to supply equipment and services for the first wireline-retrievable electric submersible pumping (ESP) system in
OFS is also utilizing novel plug and abandonment (P&A) technologies to decommission wells in
Consolidated Results by Reporting Segment
|
Consolidated Orders by Reporting Segment |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Consolidated segment orders |
|
|
|
|
Sequential |
Year-over- |
||||||||
|
Oilfield Services |
$ |
2,200 |
|
$ |
2,266 |
|
$ |
3,147 |
|
|
(3) |
% |
(30) |
% |
|
Oilfield Equipment |
345 |
|
561 |
|
492 |
|
|
(39) |
% |
(30) |
% |
|||
|
Turbomachinery & Process Solutions |
1,447 |
|
1,832 |
|
1,394 |
|
|
(21) |
% |
4 |
% |
|||
|
Digital Solutions |
549 |
|
528 |
|
500 |
|
|
4 |
% |
10 |
% |
|||
|
Total |
$ |
4,541 |
|
$ |
5,188 |
|
$ |
5,532 |
|
|
(12) |
% |
(18) |
% |
Orders for the quarter were
Year-over-year, the decline in orders was a result of lower order intake in Oilfield Services and Oilfield Equipment, partially offset by growth in Digital Solutions and Turbomachinery & Process Solutions. Year-over-year equipment orders were down 18% and service orders were down 18%.
The Company's total book-to-bill ratio in the quarter was 0.9; the equipment book-to-bill ratio in the quarter was 0.8.
Remaining Performance Obligations (RPO) in the first quarter ended at
|
Consolidated Revenue by Reporting Segment |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Consolidated segment revenue |
|
|
|
|
Sequential |
Year-over- |
||||||||
|
Oilfield Services |
$ |
2,200 |
|
$ |
2,282 |
|
$ |
3,139 |
|
|
(4) |
% |
(30) |
% |
|
Oilfield Equipment |
628 |
|
712 |
|
712 |
|
|
(12) |
% |
(12) |
% |
|||
|
Turbomachinery & Process Solutions |
1,485 |
|
1,946 |
|
1,085 |
|
|
(24) |
% |
37 |
% |
|||
|
Digital Solutions |
470 |
|
556 |
|
489 |
|
|
(15) |
% |
(4) |
% |
|||
|
Total |
$ |
4,782 |
|
$ |
5,495 |
|
$ |
5,425 |
|
|
(13) |
% |
(12) |
% |
Revenue for the quarter was
Compared to the same quarter last year, revenue was down 12%, driven by lower volume across the Oilfield Services, Oilfield Equipment, and Digital Solutions segments, partially offset by Turbomachinery & Process Solutions.
|
Consolidated Operating Income by Reporting Segment |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Segment operating income |
|
|
|
|
Sequential |
Year-over- |
||||||||
|
Oilfield Services |
$ |
143 |
|
$ |
142 |
|
$ |
206 |
|
|
1 |
% |
(31) |
% |
|
Oilfield Equipment |
4 |
|
23 |
|
(8) |
|
|
(82) |
% |
F |
|
|||
|
Turbomachinery & Process Solutions |
207 |
|
332 |
|
134 |
|
|
(38) |
% |
55 |
% |
|||
|
Digital Solutions |
24 |
|
76 |
|
29 |
|
|
(68) |
% |
(17) |
% |
|||
|
Total segment operating income |
379 |
|
573 |
|
361 |
|
|
(34) |
% |
5 |
% |
|||
|
Corporate |
(109) |
|
(111) |
|
(122) |
|
|
2 |
% |
11 |
% |
|||
|
|
— |
|
— |
|
(14,773) |
|
|
— |
% |
F |
|
|||
|
Inventory impairment |
— |
|
(27) |
|
(160) |
|
|
F |
|
F |
|
|||
|
Restructuring, impairment & other |
(80) |
|
(229) |
|
(1,325) |
|
|
65 |
% |
94 |
% |
|||
|
Separation related |
(27) |
|
(24) |
|
(41) |
|
|
(12) |
% |
33 |
% |
|||
|
Operating income (loss) |
164 |
|
182 |
|
(16,059) |
|
|
(10) |
% |
F |
|
|||
|
Adjusted operating income* |
270 |
|
462 |
|
$ |
240 |
|
|
(42) |
% |
13 |
% |
||
|
Depreciation & amortization |
292 |
|
307 |
|
355 |
|
|
(5) |
% |
(18) |
% |
|||
|
Adjusted EBITDA* |
$ |
562 |
|
$ |
770 |
|
$ |
594 |
|
|
(27) |
% |
(5) |
% |
*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 income for the first quarter of 2021 was
Adjusted operating income (a non-GAAP measure) for the first quarter of 2021 was
Depreciation and amortization for the first quarter of 2021 was
Adjusted EBITDA (a non-GAAP measure) for the first quarter of 2021 was
Corporate costs were
Other Financial Items
Income tax expense in the first quarter of 2021 was
Other non-operating loss in the first quarter of 2021 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-over- |
||||||||
|
Revenue |
$ |
2,200 |
|
$ |
2,282 |
|
$ |
3,139 |
|
|
(4) |
% |
(30) |
% |
|
Operating income |
$ |
143 |
|
$ |
142 |
|
$ |
206 |
|
|
1 |
% |
(31) |
% |
|
Operating income margin |
6.5 |
% |
6.2 |
% |
6.6 |
% |
|
0.3 |
pts |
(0.1) |
pts |
|||
|
Depreciation & amortization |
$ |
201 |
|
$ |
211 |
|
$ |
249 |
|
|
(5) |
% |
(20) |
% |
|
EBITDA* |
$ |
344 |
|
$ |
353 |
|
$ |
456 |
|
|
(3) |
% |
(25) |
% |
|
EBITDA margin* |
15.6 |
% |
15.5 |
% |
14.5 |
% |
|
0.2 |
pts |
1.1 |
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-over- |
||||||||
|
Orders |
$ |
345 |
|
$ |
561 |
|
$ |
492 |
|
|
(39) |
% |
(30) |
% |
|
Revenue |
$ |
628 |
|
$ |
712 |
|
$ |
712 |
|
|
(12) |
% |
(12) |
% |
|
Operating income (loss) |
$ |
4 |
|
$ |
23 |
|
$ |
(8) |
|
|
(82) |
% |
F |
|
|
Operating income margin |
0.7 |
% |
3.2 |
% |
(1.1) |
% |
|
(2.6) |
pts |
1.8 |
pts |
|||
|
Depreciation & amortization |
$ |
32 |
|
$ |
33 |
|
$ |
44 |
|
|
(2) |
% |
(27) |
% |
|
EBITDA* |
$ |
37 |
|
$ |
56 |
|
$ |
36 |
|
|
(35) |
% |
1 |
% |
|
EBITDA margin* |
5.8 |
% |
7.9 |
% |
5.1 |
% |
|
(2.0) |
pts |
0.7 |
pts |
|||
Oilfield Equipment (OFE) orders were down
*Non-GAAP measure.
OFE revenue of
Segment operating income before tax for the quarter was
|
Turbomachinery & Process Solutions |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Turbomachinery & Process Solutions |
|
|
|
|
Sequential |
Year-over- |
||||||||
|
Orders |
$ |
1,447 |
|
$ |
1,832 |
|
$ |
1,394 |
|
|
(21) |
% |
4 |
% |
|
Revenue |
$ |
1,485 |
|
$ |
1,946 |
|
$ |
1,085 |
|
|
(24) |
% |
37 |
% |
|
Operating income |
$ |
207 |
|
$ |
332 |
|
$ |
134 |
|
|
(38) |
% |
55 |
% |
|
Operating income margin |
13.9 |
% |
17.1 |
% |
12.3 |
% |
|
(3.1) |
pts |
1.6 |
pts |
|||
|
Depreciation & amortization |
$ |
30 |
|
$ |
31 |
|
$ |
28 |
|
|
(1) |
% |
10 |
% |
|
EBITDA* |
$ |
237 |
|
$ |
362 |
|
$ |
161 |
|
|
(35) |
% |
47 |
% |
|
EBITDA margin* |
16.0 |
% |
18.6 |
% |
14.9 |
% |
|
(2.7) |
pts |
1.1 |
pts |
|||
Turbomachinery & Process Solutions (TPS) orders were up 4% year-over-year. Equipment orders were up 28% and service orders were down 9%.
TPS revenue of
Segment operating income before tax for the quarter was
|
Digital Solutions |
||||||||||||||
|
(in millions) |
Three Months Ended |
|
Variance |
|||||||||||
|
Digital Solutions |
|
|
|
|
Sequential |
Year-over- |
||||||||
|
Orders |
$ |
549 |
|
$ |
528 |
|
$ |
500 |
|
|
4 |
% |
10 |
% |
|
Revenue |
$ |
470 |
|
$ |
556 |
|
$ |
489 |
|
|
(15) |
% |
(4) |
% |
|
Operating income |
$ |
24 |
|
$ |
76 |
|
$ |
29 |
|
|
(68) |
% |
(17) |
% |
|
Operating income margin |
5.2 |
% |
13.8 |
% |
6.0 |
% |
|
(8.6) |
pts |
(0.8) |
pts |
|||
|
Depreciation & amortization |
$ |
21 |
|
$ |
25 |
|
$ |
25 |
|
|
(14) |
% |
(16) |
% |
|
EBITDA* |
$ |
46 |
|
$ |
101 |
|
$ |
55 |
|
|
(55) |
% |
(16) |
% |
|
EBITDA margin* |
9.7 |
% |
18.2 |
% |
11.2 |
% |
|
(8.5) |
pts |
(1.5) |
pts |
|||
*Non-GAAP measure.
Digital Solutions (DS) orders were up 10% year-over-year, driven by higher order intake in the Waygate Technologies, Process & Pipeline Services, and Panametrics businesses.
DS revenue of
Segment operating income before tax for the quarter was
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) |
$ |
164 |
|
$ |
182 |
|
$ |
(16,059) |
|
|
Separation related |
27 |
|
24 |
|
41 |
|
|||
|
|
— |
|
— |
|
14,773 |
|
|||
|
Restructuring, impairment & other |
80 |
|
229 |
|
1,325 |
|
|||
|
Inventory impairment |
— |
|
27 |
|
160 |
|
|||
|
Total operating income adjustments |
106 |
|
281 |
|
16,299 |
|
|||
|
Adjusted operating income (non-GAAP) |
$ |
270 |
|
$ |
462 |
|
$ |
240 |
|
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 Operating Income (Loss) to EBITDA and Adjusted EBITDA |
|||||||||
|
|
Three Months Ended |
||||||||
|
(in millions) |
|
|
|
||||||
|
Operating income (loss) (GAAP) |
$ |
164 |
|
$ |
182 |
|
$ |
(16,059) |
|
|
Depreciation & amortization |
292 |
|
307 |
|
355 |
|
|||
|
EBITDA (non-GAAP) |
456 |
|
489 |
|
(15,705) |
|
|||
|
Total operating income adjustments (1) |
106 |
|
281 |
|
16,299 |
|
|||
|
Adjusted EBITDA (non-GAAP) |
$ |
562 |
|
$ |
770 |
|
$ |
594 |
|
|
(1) |
See Table 1a for the identified adjustments to operating income. |
Table 1b reconciles operating income (loss), 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 (Loss) Attributable to Baker Hughes |
|||||||||
|
|
Three Months Ended |
||||||||
|
(in millions, except per share amounts) |
|
|
|
||||||
|
Net income (loss) attributable to Baker Hughes (GAAP) |
$ |
(452) |
|
$ |
653 |
|
$ |
(10,227) |
|
|
Total operating income adjustments (1) |
106 |
|
281 |
|
16,299 |
|
|||
|
Other adjustments (non-operating) (2) |
663 |
|
(1,412) |
|
— |
|
|||
|
Tax on total adjustments (3) |
(33) |
|
114 |
|
(84) |
|
|||
|
Total adjustments, net of income tax |
736 |
|
(1,017) |
|
16,215 |
|
|||
|
Less: adjustments attributable to noncontrolling interests |
193 |
|
(314) |
|
5,918 |
|
|||
|
Adjustments attributable to Baker Hughes |
543 |
|
(703) |
|
10,297 |
|
|||
|
Adjusted net income (loss) attributable to Baker Hughes (non-GAAP) |
$ |
91 |
|
$ |
(50) |
|
$ |
70 |
|
|
|
|
|
|
||||||
|
Denominator: |
|
|
|
||||||
|
Weighted-average shares of Class A common stock outstanding diluted |
746 |
|
713 |
|
654 |
|
|||
|
Adjusted earnings (loss) per Class A share— diluted (non-GAAP) |
$ |
0.12 |
|
$ |
(0.07) |
|
$ |
0.11 |
|
|
(1) |
See Table 1a for the identified adjustments to operating income. |
|
|
(2) |
1Q'21 primarily related to the unrealized loss on our investment in C3.ai, partially offset by the reversal of current accruals due to the settlement of certain legal matters. 4Q'20 primarily related to the unrealized gain on our investment in C3.ai. |
|
| (3) |
4Q'20 includes tax expense related to a business disposition. |
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) |
$ |
678 |
|
$ |
378 |
|
$ |
478 |
|
|
Add: cash used in capital expenditures, net of proceeds from disposal of assets |
(180) |
|
(127) |
|
(325) |
|
|||
|
Free cash flow (non-GAAP) |
$ |
498 |
|
$ |
250 |
|
$ |
152 |
|
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 |
|||||
|
(In millions, except per share amounts) |
2021 |
2020 |
||||
|
Revenue |
$ |
4,782 |
|
$ |
5,425 |
|
|
Costs and expenses: |
|
|
||||
|
Cost of revenue |
3,924 |
|
4,670 |
|
||
|
Selling, general and administrative |
587 |
|
675 |
|
||
|
|
— |
|
14,773 |
|
||
|
Restructuring, impairment and other |
80 |
|
1,325 |
|
||
|
Separation related |
27 |
|
41 |
|
||
|
Total costs and expenses |
4,618 |
|
21,484 |
|
||
|
Operating income (loss) |
164 |
|
(16,059) |
|
||
|
Other non-operating income (loss), net |
(626) |
|
25 |
|
||
|
Interest expense, net |
(74) |
|
(59) |
|
||
|
Loss before income taxes |
(536) |
|
(16,093) |
|
||
|
Provision for income taxes |
(69) |
|
(5) |
|
||
|
Net loss |
(605) |
|
(16,098) |
|
||
|
Less: Net loss attributable to noncontrolling interests |
(153) |
|
(5,871) |
|
||
|
Net loss attributable to |
$ |
(452) |
|
$ |
(10,227) |
|
|
|
|
|
||||
|
Per share amounts: |
|
|||||
|
Basic and diluted loss per Class A common stock |
$ |
(0.61) |
|
$ |
(15.66) |
|
|
|
|
|
||||
|
Weighted average shares: |
|
|
||||
|
Class A basic & diluted |
740 |
|
653 |
|
||
|
|
|
|
||||
|
Cash dividend per Class A common stock |
$ |
0.18 |
|
$ |
0.18 |
|
|
Condensed Consolidated Statements of Financial Position |
||||||
|
(Unaudited) |
||||||
|
(In millions) |
|
|
||||
|
ASSETS |
||||||
|
Current Assets: |
|
|
||||
|
Cash and cash equivalents |
$ |
4,382 |
|
$ |
4,132 |
|
|
Current receivables, net |
5,263 |
|
5,622 |
|
||
|
Inventories, net |
4,181 |
|
4,421 |
|
||
|
All other current assets |
1,960 |
|
2,280 |
|
||
|
Total current assets |
15,786 |
|
16,455 |
|
||
|
Property, plant and equipment, less accumulated depreciation |
5,163 |
|
5,358 |
|
||
|
|
5,969 |
|
5,977 |
|
||
|
Other intangible assets, net |
4,228 |
|
4,397 |
|
||
|
Contract and other deferred assets |
1,899 |
|
2,001 |
|
||
|
All other assets |
3,791 |
|
3,819 |
|
||
|
Total assets |
$ |
36,836 |
|
$ |
38,007 |
|
|
LIABILITIES AND EQUITY |
||||||
|
Current Liabilities: |
|
|
||||
|
Accounts payable |
$ |
3,468 |
|
$ |
3,532 |
|
|
Short-term debt and current portion of long-term debt |
887 |
|
889 |
|
||
|
Progress collections and deferred income |
3,397 |
|
3,454 |
|
||
|
All other current liabilities |
2,206 |
|
2,352 |
|
||
|
Total current liabilities |
9,958 |
|
10,227 |
|
||
|
Long-term debt |
6,733 |
|
6,744 |
|
||
|
Liabilities for pensions and other employee benefits |
1,197 |
|
1,217 |
|
||
|
All other liabilities |
1,524 |
|
1,577 |
|
||
|
Equity |
17,424 |
|
18,242 |
|
||
|
Total liabilities and equity |
$ |
36,836 |
|
$ |
38,007 |
|
|
|
|
|
||||
|
Outstanding |
|
|
||||
|
Class A common stock |
773 |
|
724 |
|
||
|
Class B common stock |
268 |
|
311 |
|
||
|
Condensed Consolidated Statements of Cash Flows |
||||||
|
(Unaudited) |
||||||
|
|
Three Months Ended |
|||||
|
(In millions) |
2021 |
2020 |
||||
|
Cash flows from operating activities: |
|
|
||||
|
Net loss |
$ |
(605) |
|
$ |
(16,098) |
|
|
Adjustments to reconcile net loss to net cash flows from operating activities: |
|
|
||||
|
Depreciation and amortization |
292 |
|
355 |
|
||
|
|
— |
|
14,773 |
|
||
|
Other asset impairments |
— |
|
1,103 |
|
||
|
Unrealized loss on equity security |
788 |
|
— |
|
||
|
Working capital |
405 |
|
183 |
|
||
|
Other operating items, net |
(202) |
|
162 |
|
||
|
Net cash flows from operating activities |
678 |
|
478 |
|
||
|
Cash flows from investing activities: |
|
|
||||
|
Expenditures for capital assets, net of proceeds from disposal of assets |
(180) |
|
(325) |
|
||
|
Other investing items, net |
6 |
|
7 |
|
||
|
Net cash flows used in investing activities |
(174) |
|
(318) |
|
||
|
Cash flows from financing activities: |
|
|
||||
|
Net repayments of debt and other borrowings |
(36) |
|
(115) |
|
||
|
Dividends paid |
(131) |
|
(118) |
|
||
|
Distributions to |
(56) |
|
(68) |
|
||
|
Other financing items, net |
(32) |
|
(26) |
|
||
|
Net cash flows used in financing activities |
(255) |
|
(327) |
|
||
|
Effect of currency exchange rate changes on cash and cash equivalents |
1 |
|
(72) |
|
||
|
Increase (decrease) in cash and cash equivalents |
250 |
|
(239) |
|
||
|
Cash and cash equivalents, beginning of period |
4,132 |
|
3,249 |
|
||
|
Cash and cash equivalents, end of period |
$ |
4,382 |
|
$ |
3,010 |
|
|
Supplemental cash flows disclosures: |
|
|
||||
|
Income taxes paid, net of refunds |
$ |
39 |
|
$ |
118 |
|
|
Interest paid |
$ |
51 |
|
$ |
49 |
|
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/20210421005282/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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