Baker Hughes Company Announces Fourth Quarter and Total Year 2020 Results

Source Press Release
Company Baker Hughes Company 
Tags LNG & Gas Storage/Processing, Financial & Operating Data
Date January 21, 2021
  • Orders of $5.2 billion for the quarter, up 2% sequentially and down 25% year-over-year.
  • Revenue of $5.5 billion for the quarter, up 9% sequentially and down 13% year-over-year.
  • GAAP operating income of $182 million for the quarter, up $231 million sequentially and down 45% year-over-year.
  • Adjusted operating income (a non-GAAP measure) of $462 million for the quarter, up 98% sequentially and down 15% year-over-year.
  • GAAP diluted earnings per share of $0.91 for the quarter which included $(0.98) per share of adjusting items. Adjusted diluted earnings per share (a non-GAAP measure) were $(0.07).
  • Cash flows generated from operating activities were $378 million for the quarter. Free cash flow (a non-GAAP measure) for the quarter was $250 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. 

Baker Hughes Company (NYSE: BKR) ("Baker Hughes" or the "Company") announced results today for the fourth quarter and total year 2020.

  Three Months Ended    Variance 
(in millions except per share amounts)  December 31,
2020 
September 30,
2020 
December 31,
2019 
  Sequential  Year-over-
year 
Orders  5,188    5,106    6,944      2%  (25)% 
Revenue  5,495    5,049    6,347      9%  (13)% 
Operating income (loss)  182    (49)    331      (45)% 
Adjusted operating income (non-GAAP)  462    234    546      98%  (15)% 
Net income (loss) attributable to Baker Hughes  653    (170)    48     
Adjusted net income (non-GAAP) attributable to Baker Hughes  (50)    27    179     
Diluted EPS attributable to Class A shareholders  0.91    (0.25)    0.07     
Adjusted diluted EPS (non-GAAP) attributable to Class A shareholders  (0.07)    0.04    0.27     
Cash flow from operating activities  378    219    1,357      73%  (72)% 
Free cash flow (non-GAAP)  250    52    1,053      " (76)% 

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 fourth quarter and full year results while navigating the impacts of the global pandemic and industry downturn. Despite an incredibly challenging year for the industry in 2020, we generated over $500 million in free cash flow, booked $6.4 billion in TPS orders, and executed on our substantial cost-out and restructuring program. We also took several important steps to accelerate our strategy and invest in energy transition technologies, helping to position the company for the future. I cannot thank our employees enough for their hard work and dedication to achieve our goals and move the company forward,” said Lorenzo Simonelli, Baker Hughes chairman and chief executive officer.

“As we look ahead to 2021, we are cautiously optimistic that the global economy and oil demand will begin to recover from the impact of the global pandemic. We believe this macro environment likely translates into a tepid investment environment for oil and gas during the first half of 2021. However, 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.

“Baker Hughes is well placed to navigate the current market environment and positioned to lead the energy transition. We remain focused on executing for customers, being disciplined on cost, and delivering for our shareholders,” concluded Simonelli.

Quarter Highlights

Supporting our Customers

The OFS segment was awarded several large contracts for drilling and completions in the fourth quarter. Equinor awarded Baker Hughes a significant portion of the drilling and well completions contracts for Phase 1 of the Bacalhau field in offshore Brazil. OFS will provide an integrated well services package for Equinor across multiple product lines, including drilling services, drill bits, drilling and completion fluids, cementing, stimulation, fishing services, and completion equipment.

OFS also secured artificial lift contracts in multiple regions, continuing to demonstrate OFS’ differentiated portfolio in electrical submersible pumping systems (ESPs) and digital monitoring solutions. Commercial agreements for artificial lift equipment and services included a seven-year contract with a customer in the Middle East, a six-year contract with a customer in Italy, and a four-year contract with a customer in the Russia Caspian region.

The OFE segment secured a major equipment order with Eni for the Agogo offshore oilfield in Angola. Consistent with Baker Hughes' Subsea Connect strategy, the order includes multiple subsea trees, wellheads, manifolds, flexible jumpers, distribution units, and controls systems for subsea and the topside.

The TPS segment was awarded a major contract by South Gas Company (SGC) in Iraq for the design, manufacturing, delivery, construction and commissioning of an integrated facility for the processing and production of natural gas. The facility is expected to have a capacity of 200 million standard cubic feet of natural gas per day and utilize previously flared natural gas from the Nassiriya and Gharraf oil fields, reducing emissions by an estimated 6+ million tons of CO2 annually. Baker Hughes will act as an overall solution provider for SGC, overseeing construction and startup of the facility as well as supplying compression equipment, digital monitoring systems and multiple services.

TPS was also awarded several LNG contracts in the fourth quarter, booking an order with longtime partner Qatar Petroleum for power generation equipment for the North Field East LNG project following the third quarter order for the main refrigerant compressors.

The Digital Solutions segment secured a major contract with Petrobras as a follow up to a third quarter award for a three-year frame agreement. The fourth quarter contract will provide a suite of digital solutions and services to optimize productivity, reduce operational and safety risks, and lower carbon emissions across Petrobras sites in Brazil. Petrobras will accelerate its digital transformation, adopting the latest Bently Nevada condition monitoring and protection platform as well as remote monitoring and diagnostics capability. The contract also includes Nexus Controls systems and cybersecurity solutions, flare monitoring and calibration technologies, and Flare.IQ advanced flare gas monitoring and optimization system.

Executing on Priorities

The OFS Chemicals product line secured multiple upstream and downstream chemicals contracts, including a multi-year contract to provide hydrocarbon and water treatment services at one of the largest U.S. refineries. In Asia, Chemicals secured multiple contracts in Thailand, China, Australia, and Malaysia, providing additional regional volume as OFS plans to open its first chemicals manufacturing facility in the region in 2022.

TPS secured several upgrade orders for the supply of high efficiency compression equipment to help extend the field life of projects in the North Sea, Sub-Saharan Africa and in North West Kazakhstan for the Karachaganak Expansion Project-1A operated by Karachaganak Petroleum Operating B.V. Baker Hughes high pressure-reinjection compressors will be used within the 5th Injection Compressor facility, thus helping to extend the duration of the liquid production plateau.

TPS continued executing on LNG projects in the quarter, with multiple equipment modules shipped from Italy to the U.S. for the Calcasieu Pass LNG project with Venture Global LNG. TPS also completed all three LM9000 string tests for power generation and mechanical drive for the Arctic LNG 2 project led by NOVATEK PAO and shipped compression equipment as well as electrical generator and gas turbine packages for the first of three gravity-based structures.

DS secured several North American contracts to enhance operations, improve productivity and drive digital transformation across the energy sector. The Bently Nevada product line secured a contract with a major hydroelectric operator in the U.S. to provide its Orbit 60 system, System 1 software and a five-year services agreement for industrial asset management across multiple dams. Bently Nevada will also provide its System 1 software to American Electric Power (AEP) for several plants in its generation fleet, allowing AEP to monitor live data from and diagnose issues as needed.

DS also continued to expand in industrial end markets. The Waygate Technologies (WT) business secured a significant order with a global leading Asian automaker for its latest Phoenix Speedscan HD system, providing automated inline computed tomography to inspect aluminum cylinder heads for automotive engines. In the aerospace market, WT developed an ‘intelligent borescope’ solution with Rolls-Royce, significantly reducing the time to inspect a jet engine and offering integration between the borescope, app, and turning tool that has not been available to the segment before. The Druck product line also secured multiple military aerospace contracts in Europe, Asia, and North America for aircraft sensors and instrumentation.

Leading with Innovation

Baker Hughes continued to develop technologies to advance the energy transition, improve efficiencies, and reduce emissions for customers. The Company acquired Compact Carbon Capture (3C), a pioneering technology development company specializing in carbon capture solutions. The acquisition underpins Baker Hughes’ strategic commitment to lead in the energy transition and provide differentiated decarbonization solutions for carbon-intensive industries.

Baker Hughes also announced a joint service offering with Wurth Industry North America (WINA) to expand additive manufacturing solutions for Wurth’s 80,000+ global customers. Together, WINA and Baker Hughes will provide advanced design, digital inventory, and customized 3D printing services in a range of industrial applications. Through 3D printing at scale, customers are capable of supply chain logistics-related emissions by moving production closer to the point of consumption.

OFE launched engageSubsea remote, an extension of its engageSubsea platform. EngageSubsea provides a single platform for equipment inspection, operational management and technical support, driving operational excellence and increasing capital productivity for offshore oil and gas operations. The latest remote capabilities further allow operators to cut costs, reduce downtime, improve efficiency, and minimize safety and travel risks. EngageSubsea remote is already a proven technology with live deployments with customers in the Norwegian Continental Shelf and at Baker Hughes services facilities.

DS launched the world’s fastest pressure controller from Druck, known as PACE CM3, as well as Druck’s next generation of pressure sensors, the ADROIT6000. Druck’s technological leadership in pressure sensor solutions continues to deliver exceptional performance and class-leading reliability and stability for customers across multiple industrial markets.

The BakerHughesC3.ai joint venture alliance (BHC3) continued to see interest in AI-based software. In the fourth quarter, a Malaysian-based company adopted BCH3’s technology to detect failure and improve maintenance decisions on gas compressors and control valves. In addition, a Latin American customer adopted BHC3 Reliability to further improve the early warning systems and scheduled maintenance of ESPs.

Consolidated Results by Reporting Segment

Consolidated Orders by Reporting Segment     
(in millions)  Three Months Ended    Variance 
Consolidated segment orders  December 31,
2020 
September 30,
2020 
December 31,
2019 
  Sequential  Year-over-
year 
Oilfield Services  2,266    2,296    3,284      (1)  (31) 
Oilfield Equipment  561    432    1,104      30  (49) 
Turbomachinery & Process Solutions  1,832    1,885    1,910      (3)  (4) 
Digital Solutions  528    493    645      (18) 
Total  5,188    5,106    6,944      (25) 

Orders for the quarter were $5,188 million, up 2% sequentially and down 25% year-over-year. The sequential increase was a result of higher order intake in Oilfield Equipment, and Digital Solutions, partially offset by lower orders in Oilfield Services, and Turbomachinery & Process Solutions. Equipment orders were down 10% sequentially and service orders were up 13%.

Year-over-year, the decline in orders was a result of lower order intake across all segments. Year-over-year equipment orders were down 30% and service orders were down 21%.

The Company's total book-to-bill ratio in the quarter was 0.9; the equipment book-to-bill ratio in the quarter was 0.9.

Remaining Performance Obligations (RPO) in the fourth quarter ended at $23.4 billion, an increase of $0.4 billion from the third quarter of 2020. Equipment RPO was $8.0 billion, down 3% sequentially. Services RPO was $15.4 billion, up 5% sequentially.

Consolidated Revenue by Reporting Segment     
(in millions)  Three Months Ended    Variance 
Consolidated segment revenue  December 31,
2020 
September 30,
2020 
December 31,
2019 
  Sequential  Year-over-
year 
Oilfield Services  2,282    2,308    3,292      (1)  (31) 
Oilfield Equipment  712    726    765      (2)  (7) 
Turbomachinery & Process Solutions  1,946    1,513    1,632      29  19 
Digital Solutions  556    503    659      10  (16) 
Total  5,495    5,049    6,347      (13) 

Revenue for the quarter was $5,495 million, an increase of 9%, sequentially. The increase was driven by Turbomachinery & Process Solutions and Digital Solutions, partially offset by Oilfield Services and Oilfield Equipment.

Compared to the same quarter last year, revenue was down 13%, 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  December 31,
2020 
September 30,
2020 
December 31,
2019 
  Sequential  Year-over-
year 
Oilfield Services  142    93    235      53  (40) 
Oilfield Equipment  23    19    16      22  47 
Turbomachinery & Process Solutions  332    191    305      74 
Digital Solutions  76    46    109      66  (30) 
Total segment operating income  573    349    665      64  (14) 
Corporate  (111)    (115)    (118)     
Inventory impairment  (27)    (42)    —      34 
Restructuring, impairment & other  (229)    (209)    (159)      (10)  (44) 
Separation related  (24)    (32)    (57)      24  57 
Operating income (loss)  182    (49)    331      (45) 
Adjusted operating income*  462    234    546      98  (15) 

*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 fourth quarter of 2020 was $182 million. Operating income increased $230 million sequentially and decreased $149 million year-over-year. Total segment operating income was $573 million for the fourth quarter of 2020, up 64% sequentially and down 14% year-over-year.

Adjusted operating income (a non-GAAP measure) for the fourth quarter of 2020 was $462 million, which excludes adjustments totaling $281 million before tax, mainly related to restructuring and separation related charges. A complete list of the adjusting items and associated reconciliation from GAAP has been provided in Table 1a in the section entitled “Charges and Credits.” Adjusted operating income for the fourth quarter was up 98% sequentially, driven by margin expansion across all segments. Adjusted operating income was down 15% year-over-year driven by lower margins in the Oilfield Services, and Digital Solutions segments, partially offset by higher margins in Turbomachinery & Process Solutions, and Oilfield Equipment.

Depreciation and amortization for the fourth quarter of 2020 was $307 million.

Corporate costs were $111 million in the fourth quarter of 2020, down 3% sequentially and down 6% year-over-year.

Other Financial Items

Income tax expense in the fourth quarter of 2020 was $568 million.

GAAP diluted earnings per share was $0.91. Adjusted diluted loss per share was $(0.07). Excluded from adjusted diluted earnings per share were all items listed in Table 1a in the section entitled "Charges and Credits" as well as the "other adjustments (non-operating)" found in Table 1b.

Cash flows generated from operating activities were $378 million for the fourth quarter of 2020. Free cash flow (a non-GAAP measure) for the quarter was $250 million. A reconciliation from GAAP has been provided in Table 1c in the section entitled "Charges and Credits."

Capital expenditures, net of proceeds from disposal of assets, were $127 million for the fourth quarter of 2020.

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  December 31,
2020 
September 30,
2020 
December 31,
2019 
  Sequential  Year-over-
year 
Revenue  2,282    2,308    3,292      (1)%  (31)% 
Operating income  142    93    235      53%  (40)% 
Operating income margin  6.2  4.0  7.1    2.2pts  -0.9pts 

Oilfield Services (OFS) revenue of $2,282 million for the fourth quarter decreased by $26 million, or 1%, sequentially.

North America revenue was $621 million, up 11% sequentially. International revenue was $1,661 million, a decrease of 5% sequentially, driven by Asia Pacific, the Middle East, and Europe. From a product line perspective, the sequential decline of (1)% in OFS was driven primarily by Wireline and Completions, partially offset by Artificial Lift.

Segment operating income before tax for the quarter was $142 million. Operating income for the fourth quarter of 2020 was up $49 million, or 53%, sequentially, primarily driven by cost productivity.

Oilfield Equipment       
(in millions)  Three Months Ended    Variance 
Oilfield Equipment  December 31,
2020 
September 30,
2020 
December 31,
2019 
  Sequential  Year-over-
year 
Orders  561    432    1,104      30%  (49)% 
Revenue  712    726    765      (2)%  (7)% 
Operating income  23    19    16      22%  47% 
Operating income margin  3.2  2.6  2.1    0.6pts  1.2pts 

Oilfield Equipment (OFE) orders were down $544 million, or 49%, year-over-year, driven primarily by lower equipment order intake across all business segments. Equipment orders were down 54% year-over-year and services orders were down 33% year-over-year.

OFE revenue of $712 million for the quarter decreased $53 million, or 7%, year-over-year. The decrease was driven by lower volume in the Services business, and from the sale of the Surface Pressure Control flow business in the quarter. These decreases were partially offset by higher volume in the Subsea Production Systems, and Flexible Pipe businesses.

Segment operating income before tax for the quarter was $23 million, up $7 million year-over-year. The increase was driven primarily by cost productivity.

Turbomachinery & Process Solutions       
(in millions)  Three Months Ended    Variance 
Turbomachinery & Process Solutions  December 31,
2020 
September 30,
2020 
December 31,
2019 
  Sequential  Year-over-
year 
Orders  1,832    1,885    1,910      (3)%  (4)% 
Revenue  1,946    1,513    1,632      29%  19% 
Operating income  332    191    305      74%  9% 
Operating income margin  17.1  12.6  18.7    4.5pts  -1.6pts 

Turbomachinery & Process Solutions (TPS) orders were down 4% year-over-year. Equipment orders were down 10% year-over-year and service orders were up 2% year-over-year.

TPS revenue of $1,946 million for the quarter increased $314 million, or 19%, year-over-year. The increase was driven by higher equipment and projects revenue, partially offset by lower services volume. Equipment revenue in the quarter represented 54% of total segment revenue, and Service revenue represented 46% of total segment revenue.

Segment operating income before tax for the quarter was $332 million, up $27 million, or 9%, year-over-year. The increase was driven primarily by volume and productivity, partially offset by a higher mix of equipment revenue.

Digital Solutions       
(in millions)  Three Months Ended    Variance 
Digital Solutions  December 31,
2020 
September 30,
2020 
December 31,
2019 
  Sequential  Year-over-
year 
Orders  528    493    645      7%  (18)% 
Revenue  556    503    659      10%  (16)% 
Operating income  76    46    109      66%  (30)% 
Operating income margin  13.8  9.2  16.6    4.6pts  -2.8pts 

Digital Solutions (DS) orders were down 18% year-over-year, driven primarily by lower order intake in the Waygate Technologies, Bently Nevada and Process & Pipeline Services businesses, partially offset by higher volume in Reuter Stokes.

DS revenue of $556 million for the quarter decreased 16% year-over-year, driven by lower volume across all product lines.

Segment operating income before tax for the quarter was $76 million, down 30% year-over-year. The decrease year-over-year was primarily driven by lower volume.

2020 Total Year Results

  Twelve Months Ended   
Orders  December 31, 2020  December 31, 2019  Variance
Year-over-year 
Oilfield Services  10,119    12,902    (22)% 
Oilfield Equipment  2,184    3,517    (38)% 
Turbomachinery and Process Solutions  6,424    7,947    (19)% 
Digital Solutions  1,986    2,607    (24)% 
Total Orders  20,714    26,973    (23)% 
       
Revenue       
Oilfield Services  10,140    12,889    (21)% 
Oilfield Equipment  2,844    2,921    (3)% 
Turbomachinery and Process Solutions  5,705    5,536    3% 
Digital Solutions  2,015    2,492    (19)% 
Total Revenue  20,705    23,838    (13)% 
       
Segment operating income       
Oilfield Services  487    917    (47)% 
Oilfield Equipment  19    55    (65)% 
Turbomachinery and Process Solutions  805    719    12% 
Digital Solutions  193    343    (44)% 
Total segment operating income  1,504    2,035    (26)% 
Corporate  (464)    (433)    (7)% 
Inventory impairment  (246)    —   
Goodwill impairment  (14,773)    —   
Restructuring, impairment & other  (1,866)    (342)   
Separation related  (134)    (184)    27% 
Operating income  (15,978)    1,074   
Adjusted operating income(a)  1,040    1,602    (35)% 

(a) Adjusted operating income, a non-GAAP measure, excludes inventory impairment, goodwill impairment, restructuring, impairment & other charges, and separation related costs from GAAP operating income.

Charges & Credits

Table 1a. Reconciliation of GAAP and Adjusted Operating Income/(Loss) 
  Three Months Ended 
(in millions)  December 31,
2020 
September 30,
2020 
December 31,
2019 
Operating income (loss) (GAAP)  182    (49)    331   
Separation related  24    32    57   
Restructuring, impairment & other  229    209    159   
Inventory impairment  27    42    —   
Total operating income adjustments  281    283    216   
Adjusted operating income (non-GAAP)  462    234    546   

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 (loss) (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)  December 31,
2020 
September 30,
2020 
December 31,
2019 
Net income (loss) attributable to Baker Hughes (GAAP)  653    (170)    48   
Total operating income adjustments (identified items)  281    283    216   
Other adjustments (non-operating) (1)  (1,412)    90    —   
Tax effect on total adjustments and other tax items (2)  114    (54)    (9)   
Total adjustments, net of income tax  (1,017)    319    207   
Less: adjustments attributable to noncontrolling interests  (314)    122    76   
Adjustments attributable to Baker Hughes  (703)    197    131   
Adjusted net income (loss) attributable to Baker Hughes (non-GAAP)  (50)    27    179   
       
       
Denominator:       
Weighted-average shares of Class A common stock outstanding diluted  713    678    653   
Adjusted diluted earnings (loss) per Class A share (non-GAAP)  (0.07)    0.04    0.27   

(1)    4Q'20 primarily related to the unrealized gain on our investment in C3.ai. 3Q'20 primarily related to the loss on the write-down of assets held for sale and a tax benefit related to the CARES Act. 
(2)    4Q'20 includes tax expense related to a business disposition. 

Table 1b reconciles net income 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    Twelve Months Ended 
  December 31,  September 30,  December 31,    December 31, 
(in millions)  2020  2020  2019    2020  2019 
Cash flow from operating activities (GAAP)  378    219    1,357      1,304    2,126   
Add: cash used in capital expenditures, net of proceeds from disposal of assets  (127)    (167)    (304)      (787)    (976)   
Free cash flow (non-GAAP)  250    52    1,053      518    1,150   

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 
(In millions, except per share amounts)  December 31,
2020 
September 30,
2020 
December 31,
2019 
Revenue  5,495    5,049    6,347   
Costs and expenses:       
Cost of revenue  4,486    4,292    5,052   
Selling, general and administrative  574    565    748   
Restructuring, impairment and other  229    209    159   
Separation related  24    32    57   
Total costs and expenses  5,313    5,098    6,016   
Operating income (loss)  182    (49)    331   
Other non-operating income (loss), net  1,407    (149)    39   
Interest expense, net  (69)    (66)    (63)   
Income (loss) before income taxes  1,520    (264)    307   
Provision for income taxes  (568)    (6)    (212)   
Net income (loss)  952    (270)    95   
Less: Net income (loss) attributable to noncontrolling interests  299    (100)    47   
Net income (loss) attributable to Baker Hughes Company  653    (170)    48   
       
Per share amounts:     
Basic income (loss) per Class A common share  0.92    (0.25)    0.07   
Diluted income (loss) per Class A common share  0.91    (0.25)    0.07   
       
Weighted average shares:       
Class A basic  713    676    650   
Class A diluted  717    676    653   
       
Cash dividend per Class A common share  0.18    0.18    0.18   
       

Condensed Consolidated Statements of Income (Loss) (Unaudited) 
  Year Ended December 31, 
(In millions, except per share amounts)  2020  2019  2018 
Revenue  20,705    23,838    22,877   
Costs and expenses:       
Cost of revenue  17,506    19,406    18,891   
Selling, general and administrative  2,404    2,832    2,699   
Goodwill impairment  14,773    —    —   
Restructuring, impairment and other  1,866    342    433   
Separation and merger related  134    184    153   
Total costs and expenses  36,683    22,764    22,176   
Operating income (loss)  (15,978)    1,074    701   
Other non-operating income (loss), net  1,040    (84)    202   
Interest expense, net  (264)    (237)    (223)   
Income (loss) before income taxes and equity in loss of affiliate  (15,202)    753    680   
Equity in loss of affiliate  —    —    (139)   
Provision for income taxes  (559)    (482)    (258)   
Net income (loss)  (15,761)    271    283   
Less: Net income (loss) attributable to noncontrolling interests  (5,821)    143    88   
Net income (loss) attributable to Baker Hughes Company  (9,940)    128    195   
       
Per share amounts:       
Basic income (loss) per Class A common share  (14.73)    0.23    0.46   
Diluted income (loss) per Class A common share  (14.73)    0.23    0.45   
       
Weighted average shares:       
Class A basic  675    555    427   
Class A diluted  675    557    429   
       
Cash dividend per Class A common share  0.72    0.72    0.72   

Condensed Consolidated Statements of Financial Position (Unaudited) 
  December 31, 
(In millions)  2020  2019 
ASSETS 
Current Assets:     
Cash and cash equivalents (1)  4,132    3,249   
Current receivables, net  5,622    6,416   
Inventories, net  4,421    4,608   
All other current assets  2,280    949   
Total current assets  16,455    15,222   
Property, plant and equipment, less accumulated depreciation  5,358    6,240   
Goodwill  5,977    20,690   
Other intangible assets, net  4,397    5,381   
Contract and other deferred assets  2,001    1,881   
All other assets  3,842    3,955   
Total assets (1)  38,030    53,369   
LIABILITIES AND EQUITY 
Current Liabilities:     
Accounts payable  3,532    4,268   
Short-term debt and current portion of long-term debt (1)  889    321   
Progress collections and deferred income  3,454    2,870   
All other current liabilities  2,352    2,555   
Total current liabilities  10,227    10,014   
Long-term debt  6,744    6,301   
Liabilities for pensions and other employee benefits  1,217    1,079   
All other liabilities  1,600    1,476   
Equity  18,242    34,499   
Total liabilities and equity  38,030    53,369   

(1)    Total assets include $45 million and $273 million of assets held on behalf of GE, of which $44 million and $162 million is cash and cash equivalents and $1 million and $111 million is investment securities at December 31, 2020 and December 31, 2019, respectively, and a corresponding amount of liability is reported in short-term borrowings. 

Condensed Consolidated Statements of Cash Flows (Unaudited) 
  Three Months
Ended
December 31, 
Twelve Months Ended
December 31, 
(In millions)  2020  2020  2019 
Cash flows from operating activities:       
Net income  951    (15,761)    271   
Adjustments to reconcile net income to net cash flows from operating activities:       
Depreciation and amortization  307    1,317    1,418   
Goodwill impairment  —    14,773    —   
Other asset impairments  199    1,436    107   
Loss on business dispositions    353    138   
Unrealized gain on equity security  (1,417)    (1,417)    —   
Benefit for deferred income taxes  425    160    51   
Working capital  (39)    216    553   
Other operating items, net  (56)    227    (412)   
Net cash flows from operating activities  378    1,304    2,126   
Cash flows from investing activities:       
Expenditures for capital assets, net of proceeds from disposal of assets  (127)    (787)    (976)   
Other investing items, net  60    169    (69)   
Net cash flows used in investing activities  (67)    (618)    (1,045)   
Cash flows from financing activities:       
Net repayment of debt and other borrowings  (76)    (246)    (1,112)   
Proceeds from issuance of commercial paper  —    737    —   
Proceeds from issuance of long-term debt  —    500    525   
Dividends paid  (129)    (488)    (395)   
Distributions to GE  (57)    (256)    (350)   
Repurchase of common units from GE by BHH LLC  —    —    (250)   
Other financing items, net  (7)    (22)    48   
Net cash flows from (used in) financing activities  (269)    225    (1,534)   
Effect of currency exchange rate changes on cash and cash equivalents  30    (28)    (21)   
Increase (decrease) in cash and cash equivalents  71    883    (474)   
Cash and cash equivalents, beginning of period  4,061    3,249    3,723   
Cash and cash equivalents, end of period  4,132    4,132    3,249   

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 9:00 a.m. Eastern time, 8:00 a.m. Central time on Thursday, January 21, 2021, the content of which is not part of this earnings release. The conference call will be broadcast live via a webcast and can be accessed by visiting the Events and Presentations page on the Company’s website at: investors.bakerhughes.com. An archived version of the webcast will be available on the website for one month following the webcast.

Source: EvaluateEnergy® ©2021 EvaluateEnergy Ltd