þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Delaware | 76-0207995 |
(State or other jurisdiction | (I.R.S. Employer Identification No.) |
of incorporation or organization) | |
17021 Aldine Westfield, Houston, Texas - 77073-5101 | |
(Address of principal executive offices) | |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | Emerging growth company o |
Page No. | ||
Three Months Ended March 31, | ||||||
(In millions, except per unit amounts) | 2019 | 2018 | ||||
Revenue: | ||||||
Sales of goods | $ | $ | ||||
Sales of services | ||||||
Total revenue | ||||||
Costs and expenses: | ||||||
Cost of goods sold | ||||||
Cost of services sold | ||||||
Selling, general and administrative expenses | ||||||
Restructuring, impairment and other | ||||||
Separation and merger related costs | ||||||
Total costs and expenses | ||||||
Operating income (loss) | ( | ) | ||||
Other non operating income, net | ||||||
Interest expense, net | ( | ) | ( | ) | ||
Income (loss) before income taxes and equity in loss of affiliate | ( | ) | ||||
Equity in loss of affiliate | ( | ) | ||||
Provision for income taxes | ( | ) | ( | ) | ||
Net income (loss) | ( | ) | ||||
Less: Net income attributable to noncontrolling interests | ||||||
Net income (loss) attributable to Baker Hughes, a GE company, LLC | $ | $ | ( | ) | ||
Cash distribution per common unit | $ | $ | ||||
Three Months Ended March 31, | ||||||
(In millions) | 2019 | 2018 | ||||
Net income (loss) | $ | $ | ( | ) | ||
Less: Net income attributable to noncontrolling interests | ||||||
Net income (loss) attributable to Baker Hughes, a GE company, LLC | ( | ) | ||||
Other comprehensive income: | ||||||
Investment securities | ||||||
Foreign currency translation adjustments | ||||||
Cash flow hedges | ||||||
Benefit plans | ( | ) | ||||
Other comprehensive income | ||||||
Less: Other comprehensive income attributable to noncontrolling interests | ||||||
Other comprehensive income attributable to Baker Hughes, a GE company, LLC | ||||||
Comprehensive income | ||||||
Less: Comprehensive income attributable to noncontrolling interests | ||||||
Comprehensive income attributable to Baker Hughes, a GE company, LLC | $ | $ | ||||
(In millions) | March 31, 2019 | December 31, 2018 | ||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents (1) | $ | $ | ||||
Current receivables, net | ||||||
Inventories, net | ||||||
All other current assets | ||||||
Total current assets | ||||||
Property, plant and equipment (net of accumulated depreciation of $3,854 and $3,625) | ||||||
Goodwill | ||||||
Other intangible assets, net | ||||||
Contract and other deferred assets | ||||||
All other assets | ||||||
Deferred income taxes | ||||||
Total assets (1) | $ | $ | ||||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | $ | ||||
Short-term debt and current portion of long-term debt (1) | ||||||
Progress collections and deferred income | ||||||
All other current liabilities | ||||||
Total current liabilities | ||||||
Long-term debt | ||||||
Deferred income taxes | ||||||
Liabilities for pensions and other postretirement benefits | ||||||
All other liabilities | ||||||
Members' equity: | ||||||
Members' capital (common units 1,036 and 1,035 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively) | ||||||
Retained loss | ( | ) | ( | ) | ||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||
Baker Hughes, a GE company, LLC members' equity | ||||||
Noncontrolling interests | ||||||
Total equity | ||||||
Total liabilities and equity | $ | $ | ||||
(1) |
(In millions, except per unit amounts) | Common Unitholders | Retained Loss | Accumulated Other Comprehensive Loss | Non-controlling Interests | Total Equity | ||||||||||
Balance at December 31, 2018 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||
Comprehensive income: | |||||||||||||||
Net income | |||||||||||||||
Other comprehensive income | |||||||||||||||
Regular cash distribution to members ($0.18 per unit) | ( | ) | ( | ) | |||||||||||
BHGE stock-based compensation cost | |||||||||||||||
Other | ( | ) | ( | ) | ( | ) | |||||||||
Balance at March 31, 2019 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||
(In millions, except per unit amounts) | Common Unitholders | Retained Loss | Accumulated Other Comprehensive Loss | Non-controlling Interests | Total Equity | ||||||||||
Balance at December 31, 2017 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||
Effect of adoption of ASU 2016-16 on taxes | |||||||||||||||
Comprehensive income (loss): | |||||||||||||||
Net loss | ( | ) | ( | ) | |||||||||||
Other comprehensive income | |||||||||||||||
Regular cash distribution to members ($0.18 per unit) | ( | ) | ( | ) | |||||||||||
Repurchase and cancellation of common units | ( | ) | ( | ) | |||||||||||
BHGE stock-based compensation cost | |||||||||||||||
Other | ( | ) | |||||||||||||
Balance at March 31, 2018 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||
Three Months Ended March 31, | ||||||
(In millions) | 2019 | 2018 | ||||
Cash flows from operating activities: | ||||||
Net income (loss) | $ | $ | ( | ) | ||
Adjustments to reconcile net income (loss) to net cash flows from (used in) operating activities: | ||||||
Depreciation and amortization | ||||||
Provision for deferred income taxes | ( | ) | ( | ) | ||
Changes in operating assets and liabilities: | ||||||
Current receivables | ( | ) | ||||
Inventories | ( | ) | ( | ) | ||
Accounts payable | ( | ) | ||||
Progress collections and deferred income | ( | ) | ||||
Contract and other deferred assets | ||||||
Other operating items, net | ( | ) | ||||
Net cash flows from (used in) operating activities | ( | ) | ||||
Cash flows from investing activities: | ||||||
Expenditures for capital assets | ( | ) | ( | ) | ||
Proceeds from disposal of assets | ||||||
Other investing items, net | ( | ) | ( | ) | ||
Net cash flows used in investing activities | ( | ) | ( | ) | ||
Cash flows from financing activities: | ||||||
Net repayments of short-term debt and other borrowings | ( | ) | ( | ) | ||
Repayment of long-term debt | ( | ) | ( | ) | ||
Distributions to members | ( | ) | ( | ) | ||
Repurchase of common units | ( | ) | ||||
Other financing items, net | ( | ) | ||||
Net cash flows used in financing activities | ( | ) | ( | ) | ||
Effect of currency exchange rate changes on cash and cash equivalents | ( | ) | ||||
Decrease in cash and cash equivalents | ( | ) | ( | ) | ||
Cash and cash equivalents, beginning of period | ||||||
Cash and cash equivalents, end of period | $ | $ | ||||
Supplemental cash flows disclosures: | ||||||
Income taxes paid | $ | $ | ||||
Interest paid | $ | $ | ||||
Three Months Ended March 31, | ||||||
Total Revenue | 2019 | 2018 | ||||
U.S. | $ | $ | ||||
Non-U.S. | ||||||
Total | $ | $ | ||||
March 31, 2019 | December 31, 2018 | |||||
Customer receivables | $ | $ | ||||
Related parties | ||||||
Other | ||||||
Total current receivables | ||||||
Less: Allowance for doubtful accounts | ( | ) | ( | ) | ||
Total current receivables, net | $ | $ | ||||
March 31, 2019 | December 31, 2018 | |||||
Finished goods | $ | $ | ||||
Work in process and raw material | ||||||
Total inventories, net | $ | $ | ||||
Oilfield Services | Oilfield Equipment | Turbo-machinery & Process Solutions | Digital Solutions | Total | |||||||||||
Balance at December 31, 2017, gross | $ | $ | $ | $ | $ | ||||||||||
Accumulated impairment at December 31, 2017 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Balance at December 31, 2017 | |||||||||||||||
Purchase accounting adjustments (1) | ( | ) | |||||||||||||
Currency exchange and others | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Balance at December 31, 2018 | |||||||||||||||
Currency exchange and others | |||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | $ | ||||||||||
(1) |
March 31, 2019 | December 31, 2018 | |||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||
Customer relationships | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||
Technology | ( | ) | ( | ) | ||||||||||||||
Trade names and trademarks | ( | ) | ( | ) | ||||||||||||||
Capitalized software | ( | ) | ( | ) | ||||||||||||||
Other | ( | ) | ( | ) | ||||||||||||||
Finite-lived intangible assets | ( | ) | ( | ) | ||||||||||||||
Indefinite-lived intangible assets (1) | — | — | ||||||||||||||||
Total intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||
(1) |
Year | Estimated Amortization Expense | ||
Remainder of 2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
March 31, 2019 | December 31, 2018 | |||||
Long-term product service agreements | $ | $ | ||||
Long-term equipment contracts (1) | ||||||
Contract assets (total revenue in excess of billings) (2) | ||||||
Deferred inventory costs (3) | ||||||
Non-recurring engineering costs | ||||||
Contract and other deferred assets | $ | $ | ||||
(1) | Reflects revenue earned in excess of billings on our long-term contracts to construct technically complex equipment and certain other service agreements. |
(2) | Contract assets (total revenue in excess of billings) were $ |
(3) |
March 31, 2019 | December 31, 2018 | |||||
Progress collections | $ | $ | ||||
Deferred income | ||||||
Progress collections and deferred income (contract liabilities) (1) | $ | $ | ||||
(1) |
Operating Lease Expense | Three Months Ended March 31, 2019 | ||
Long-term fixed lease | $ | ||
Long-term variable lease | |||
Short-term lease | |||
Total operating lease expense | $ | ||
Year | Operating leases | ||
Remainder of 2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
Thereafter | |||
Total lease payments | |||
Less: imputed interest | |||
Total | $ | ||
Amounts recognized in the condensed consolidated statement of financial position as of March 31, 2019: | |||
Operating leases | |||
All other current liabilities | $ | ||
All other liabilities | |||
Total | $ | ||
March 31, 2019 | December 31, 2018 | |||||
Short-term borrowings | ||||||
Short-term borrowings from GE | $ | $ | ||||
Other borrowings | ||||||
Total short-term borrowings | ||||||
Long-term borrowings | ||||||
3.2% Senior Notes due August 2021 | ||||||
2.773% Senior Notes due December 2022 | ||||||
8.55% Debentures due June 2024 | ||||||
3.337% Senior Notes due December 2027 | ||||||
6.875% Notes due January 2029 | ||||||
5.125% Senior Notes due September 2040 | ||||||
4.08% Senior Notes due December 2047 | ||||||
Other long-term borrowings | ||||||
Total long-term borrowings | ||||||
Total borrowings | $ | $ | ||||
2019 | 2018 | |||||
Service cost | $ | $ | ||||
Interest cost | ||||||
Expected return on plan assets | ( | ) | ( | ) | ||
Amortization of net actuarial loss | ||||||
Net periodic cost (benefit) | $ | $ | ( | ) | ||
Common Units Held by BHGE | Common Units Held by GE | |||
Balance at December 31, 2018 | ||||
Issue of units to BHGE under equity incentive plan | ||||
Balance at March 31, 2019 | ||||
Investment Securities | Foreign Currency Translation Adjustments | Cash Flow Hedges | Benefit Plans | Accumulated Other Comprehensive Loss | |||||||||||
Balance at December 31, 2018 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Other comprehensive income (loss) before reclassifications | ( | ) | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||||||
Deferred taxes | ( | ) | |||||||||||||
Other comprehensive income | |||||||||||||||
Less: Other comprehensive income attributable to noncontrolling interests | |||||||||||||||
Balance at March 31, 2019 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||
Investment Securities | Foreign Currency Translation Adjustments | Cash Flow Hedges | Benefit Plans | Accumulated Other Comprehensive Loss | |||||||||||
Balance at December 31, 2017 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||
Other comprehensive income (loss) before reclassifications | ( | ) | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||||||
Deferred taxes | ( | ) | ( | ) | |||||||||||
Other comprehensive income (loss) | ( | ) | |||||||||||||
Less: Other comprehensive income (loss) attributable to noncontrolling interests | |||||||||||||||
Balance at March 31, 2018 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||
March 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Net Balance | Level 1 | Level 2 | Level 3 | Net Balance | ||||||||||||||||||
Assets | |||||||||||||||||||||||||
Derivatives | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Investment securities | |||||||||||||||||||||||||
Total assets | |||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Derivatives | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Total liabilities | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||
2019 | 2018 | |||||
Balance at January 1 | $ | $ | ||||
Purchases | ||||||
Proceeds at maturity | ( | ) | ( | ) | ||
Unrealized gains recognized in AOCI | ||||||
Balance at March 31 | $ | $ | ||||
March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||
Investment securities | ||||||||||||||||||||||||
Non-U.S. debt securities (1) | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Equity securities (2) | — | — | — | — | ||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
(1) | All of our investment securities are classified as available for sale instruments. Non-U.S. debt securities mature within |
(2) |
March 31, 2019 | December 31, 2018 | |||||||||||
Assets | (Liabilities) | Assets | (Liabilities) | |||||||||
Derivatives accounted for as hedges | ||||||||||||
Currency exchange contracts | $ | $ | $ | $ | ( | ) | ||||||
Derivatives not accounted for as hedges | ||||||||||||
Currency exchange contracts | ( | ) | ( | ) | ||||||||
Commodity derivatives | ||||||||||||
Other derivatives | ( | ) | ||||||||||
Total derivatives | $ | $ | ( | ) | $ | $ | ( | ) | ||||
Three Months Ended March 31, | ||||||||||||
Gain (Loss) Recognized in AOCI | Gain (Loss) Reclassified from AOCI to Earnings | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Currency exchange contracts | $ | $ | $ | $ | ||||||||
Derivatives not designated as hedging instruments | Condensed consolidated statement of income caption | Three Months Ended March 31, | |||||
2019 | 2018 | ||||||
Currency exchange contracts (1) | Cost of goods sold | $ | $ | ||||
Currency exchange contracts | Selling, general and administrative expenses | ( | ) | ( | ) | ||
Commodity derivatives | Cost of goods sold | ||||||
Other derivatives | Other non operating income, net | ( | ) | ||||
Total (2) | $ | $ | |||||
(1) | Excludes losses on embedded derivatives of $ |
(2) |
Three Months Ended March 31, | ||||||
Segments revenue | 2019 | 2018 | ||||
Oilfield Services | $ | $ | ||||
Oilfield Equipment | ||||||
Turbomachinery & Process Solutions | ||||||
Digital Solutions | ||||||
Total | $ | $ | ||||
Three Months Ended March 31, | ||||||
Segment income (loss) before income taxes | 2019 | 2018 | ||||
Oilfield Services | $ | $ | ||||
Oilfield Equipment | ( | ) | ||||
Turbomachinery & Process Solutions | ||||||
Digital Solutions | ||||||
Total segment | ||||||
Corporate | ( | ) | ( | ) | ||
Inventory impairment (1) | ( | ) | ||||
Restructuring, impairment and other | ( | ) | ( | ) | ||
Separation and merger related costs | ( | ) | ( | ) | ||
Other non operating income, net | ||||||
Interest expense, net | ( | ) | ( | ) | ||
Total | $ | $ | ( | ) | ||
(1) |
2019 | 2018 | |||||
Balance at January 1 | $ | $ | ||||
Provisions | ||||||
Expenditures | ( | ) | ( | ) | ||
Other | ||||||
Balance at March 31 | $ | $ | ||||
Three Months Ended March 31, | ||||||
2019 | 2018 | |||||
Oilfield Services | $ | $ | ||||
Oilfield Equipment | ||||||
Turbomachinery & Process Solutions | ||||||
Digital Solutions | ||||||
Corporate | ||||||
Total | $ | $ | ||||
Three Months Ended March 31, | ||||||
2019 | 2018 | |||||
Property, plant & equipment, net | $ | $ | ||||
Employee-related termination expenses | ||||||
Asset relocation costs | ||||||
Environmental remediation costs | ||||||
Contract termination fees | ||||||
Other incremental costs | ||||||
Total | $ | $ | ||||
• | North America onshore activity: in the first quarter of 2019, we experienced a decline in the rig count, as compared to the first quarter of 2018. We expect that in the short-term, North American onshore activity will remain subdued as commodity prices fluctuate and supply chain constraints abate. Over the long-term, we remain optimistic about the outlook. |
• | International onshore activity: we have seen a moderate increase in rig count activity in the first quarter of 2019 and expect this growth to continue for the remainder of the year, at a moderate rate. We have seen signs of improvement with the increase in commodity prices during the quarter, but due to continued volatility, we remain cautious as to growth expectations. |
• | Offshore projects: we have begun to see increasing customer activity on offshore projects and more final investment decisions being made. Subsea tree awards increased in 2018 and we expect subsea awards to be roughly flat in 2019, though still at levels well below prior 2012 & 2013 peaks. We expect customers to continue to evaluate the timing of final investment decisions, and in light of increased commodity price volatility, there may be some project delays. |
• | Liquefied Natural Gas (LNG) projects: while currently oversupplied, we believe a significant number of final investment decisions are needed to fill the projected supply-demand imbalance in the early to middle part of the next decade. We continue to view the long-term economics of the LNG industry as positive given our outlook for supply and demand. |
• | Refinery, petrochemical and industrial projects: in refining, we believe large, complex refineries should gain advantage in a more competitive, oversupplied landscape in 2019 as the industry globalizes and refiners position to meet local demand and secure export potential. In petrochemicals, we continue to see healthy demand and cost-advantaged supply driving projects forward in 2019. The industrial market continues to grow as outdated infrastructure is replaced, policy changes come into effect and power is decentralized. We continue to see growing demand across these markets in 2019. |
Three Months Ended March 31, | ||||||
2019 | 2018 | |||||
Brent oil price ($/Bbl) (1) | $ | 63.10 | $ | 66.86 | ||
WTI oil price ($/Bbl) (2) | 54.82 | 62.91 | ||||
Natural gas price ($/mmBtu) (3) | 2.92 | 3.08 | ||||
(1) | Energy Information Administration (EIA) Europe Brent Spot Price per Barrel |
(2) | EIA Cushing, OK WTI (West Texas Intermediate) spot price |
(3) | EIA Henry Hub Natural Gas Spot Price per million British Thermal Unit |
Three Months Ended March 31, | ||||||
2019 | 2018 | % Change | ||||
North America | 1,226 | 1,235 | (1 | )% | ||
International | 1,028 | 971 | 6 | % | ||
Worldwide | 2,254 | 2,206 | 2 | % | ||
Three Months Ended March 31, | $ Change | ||||||||
2019 | 2018 | ||||||||
Revenue: | |||||||||
Oilfield Services | $ | 2,986 | $ | 2,678 | $ | 308 | |||
Oilfield Equipment | 735 | 664 | 71 | ||||||
Turbomachinery & Process Solutions | 1,302 | 1,460 | (158 | ) | |||||
Digital Solutions | 592 | 598 | (6 | ) | |||||
Total | $ | 5,615 | $ | 5,399 | $ | 216 | |||
Three Months Ended March 31, | $ Change | ||||||||
2019 | 2018 | ||||||||
Segment operating income (loss): | |||||||||
Oilfield Services | $ | 176 | $ | 141 | $ | 35 | |||
Oilfield Equipment | 12 | (6 | ) | 18 | |||||
Turbomachinery & Process Solutions | 118 | 119 | (1 | ) | |||||
Digital Solutions | 68 | 73 | (5 | ) | |||||
Total segment operating income | 373 | 327 | 47 | ||||||
Corporate | (100 | ) | (98 | ) | (2 | ) | |||
Inventory impairment | — | (61 | ) | 61 | |||||
Restructuring, impairment and other | (62 | ) | (162 | ) | 100 | ||||
Separation and merger related costs | (34 | ) | (46 | ) | 12 | ||||
Operating income (loss) | 176 | (41 | ) | 218 | |||||
Other non operating income, net | 21 | 2 | 19 | ||||||
Interest expense, net | (59 | ) | (46 | ) | (13 | ) | |||
Income (loss) before income taxes and equity in loss of affiliate | 138 | (85 | ) | 223 | |||||
Equity in loss of affiliate | — | (20 | ) | 20 | |||||
Provision for income taxes | (67 | ) | (38 | ) | (29 | ) | |||
Net income (loss) | $ | 71 | $ | (143 | ) | $ | 214 | ||
(In millions) | 2019 | 2018 | ||||
Operating activities | $ | (143 | ) | $ | 290 | |
Investing activities | (256 | ) | (135 | ) | ||
Financing activities | (233 | ) | (1,561 | ) | ||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH* | XBRL Schema Document | |
101.CAL* | XBRL Calculation Linkbase Document | |
101.LAB* | XBRL Label Linkbase Document | |
101.PRE* | XBRL Presentation Linkbase Document | |
101.DEF* | XBRL Definition Linkbase Document | |
Baker Hughes, a GE company, LLC (Registrant) | |||
Date: | April 30, 2019 | By: | /s/ BRIAN WORRELL |
Brian Worrell | |||
Chief Financial Officer | |||
Date: | April 30, 2019 | By: | /s/ KURT CAMILLERI |
Kurt Camilleri | |||
Vice President, Controller and Chief Accounting Officer | |||
Date: | April 30, 2019 | By: | /s/ Lorenzo Simonelli | |
Lorenzo Simonelli | ||||
President and Chief Executive Officer | ||||
Date: | April 30, 2019 | By: | /s/ Brian Worrell | |
Brian Worrell | ||||
Chief Financial Officer | ||||
(i) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(ii) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. |
/s/ Lorenzo Simonelli | ||||
Name: | Lorenzo Simonelli | |||
Title: | President and Chief Executive Officer | |||
Date: | April 30, 2019 | |||
/s/ Brian Worrell | ||||
Name: | Brian Worrell | |||
Title: | Chief Financial Officer | |||
Date: | April 30, 2019 | |||
Mine or Operating Name/MSHA Identification Number | Section 104 S&S Citations | Section 104(b) Orders | Section 104(d) Citations and Orders | Section 110(b)(2) Violations | Section 107(a) Orders | Proposed MSHA Assessments (1) | Mining Related Fatalities | Received Notice of Pattern of Violations Under Section 104(e) (yes/no) | Received Notice of Potential to Have Pattern Under Section 104(e) (yes/no) | Legal Actions Pending as of Last Day of Period | Legal Actions Initiated During Period | Legal Actions Resolved During Period | ||
Morgan City Grinding Plant/1601357 | 0 | 0 | 0 | 0 | 0 | $ | — | 0 | N | N | 0 | 0 | 0 | |
Argenta Mine and Mill/2601152 | 1 | 0 | 0 | 0 | 0 | $ | 196 | 0 | N | N | 0 | 0 | 0 | |
Corpus Christi Grinding Plant/4103112 | 0 | 0 | 0 | 0 | 0 | $ | — | 0 | N | N | 0 | 0 | 0 | |
(1) | Amounts included are the total dollar value of proposed assessments received from MSHA during the three months ended March 31, 2019, regardless of whether the assessment has been challenged or appealed. Citations and orders can be contested and appealed, and as part of that process, are sometimes reduced in severity and amount, and sometimes dismissed. The number of citations, orders, and proposed assessments vary by inspector and also vary depending on the size and type of the operation. |
Document and Entity Information - shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Apr. 23, 2019 |
|
| Document Information [Line Items] | ||
| Entity Registrant Name | BAKER HUGHES a GE Co LLC | |
| Entity Central Index Key | 0000808362 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Filer Category | Non-accelerated Filer | |
| Document Type | 10-Q | |
| Document Period End Date | Mar. 31, 2019 | |
| Document Fiscal Year Focus | 2019 | |
| Document Fiscal Period Focus | Q1 | |
| Amendment Flag | false | |
| Entity Emerging Growth Company | false | |
| Entity Small Business | false | |
| Common Class A | ||
| Document Information [Line Items] | ||
| Entity Common Stock, Shares Outstanding | 0 | |
| Common Class B | ||
| Document Information [Line Items] | ||
| Entity Common Stock, Shares Outstanding | 0 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Statement of Comprehensive Income [Abstract] | ||
| Net income (loss) | $ 71 | $ (143) |
| Less: Net income attributable to noncontrolling interests | 6 | 0 |
| Net income (loss) attributable to Baker Hughes, a GE company, LLC | 65 | (143) |
| Other comprehensive income: | ||
| Investment securities | 2 | 0 |
| Foreign currency translation adjustments | 166 | 312 |
| Cash flow hedges | 4 | |
| Cash flow hedges | 7 | |
| Benefit plans | 0 | (3) |
| Other comprehensive income | 172 | 316 |
| Less: Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
| Other comprehensive income attributable to Baker Hughes, a GE company, LLC | 172 | 316 |
| Comprehensive income | 243 | 173 |
| Less: Comprehensive income attributable to noncontrolling interests | 6 | 0 |
| Comprehensive income attributable to Baker Hughes, a GE company, LLC | $ 237 | $ 173 |
Condensed Consolidated Statements of Financial Position (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Property, plant and equipment, accumulated depreciation | $ 3,854 | $ 3,625 |
| Common units issued (in units) | 1,036 | 1,035 |
| Common units outstanding (in units) | 1,036 | 1,035 |
| Related party amount, due to related party | GE | ||
| Cash held on behalf of GE | $ 861 | $ 896 |
| Cash | 717 | 747 |
| Related party amount, due to related party | GE | Angola bonds | ||
| Investment securities | $ 144 | $ 149 |
Condensed Consolidated Statements of Changes in Members' Equity (Unaudited) - USD ($) $ in Millions |
Total |
Regular distribution |
Common Unitholders |
Common Unitholders
Regular distribution
|
Retained Loss |
Accumulated Other Comprehensive Loss |
Non-controlling Interests |
|---|---|---|---|---|---|---|---|
| Beginning Balance at Dec. 31, 2017 | $ 38,396 | $ 40,678 | $ (541) | $ (1,881) | $ 140 | ||
| Comprehensive income: | |||||||
| Net income (loss) | (143) | (143) | |||||
| Other comprehensive income | 316 | 316 | |||||
| Regular cash distribution to members ($0.18 per unit) | $ (203) | $ (203) | |||||
| Repurchase and cancellation of common units | (500) | (500) | |||||
| BHGE stock-based compensation cost | 30 | 30 | |||||
| Other | 6 | 7 | (1) | ||||
| Ending Balance at Mar. 31, 2018 | 37,969 | 40,012 | (617) | (1,565) | 139 | ||
| Beginning Balance at Dec. 31, 2018 | 34,876 | 37,582 | (354) | (2,462) | 110 | ||
| Comprehensive income: | |||||||
| Net income (loss) | 71 | 65 | 6 | ||||
| Other comprehensive income | 172 | 172 | |||||
| Regular cash distribution to members ($0.18 per unit) | $ (187) | $ (187) | |||||
| BHGE stock-based compensation cost | 40 | 40 | |||||
| Other | (6) | (3) | 1 | (4) | |||
| Ending Balance at Mar. 31, 2019 | $ 34,966 | $ 37,432 | $ (288) | $ (2,290) | $ 112 |
Condensed Consolidated Statements of Changes in Members' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Statement of Stockholders' Equity [Abstract] | ||
| Cash distribution per common unit (in dollars per unit) | $ 0.18 | $ 0.18 |
Condensed Consolidated and Combined Statements of Cash Flows (Unaudited) - USD ($) $ in Millions |
3 Months Ended | ||||
|---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
||||
| Cash flows from operating activities: | |||||
| Net income (loss) | $ 71 | $ (143) | |||
| Adjustments to reconcile net income (loss) to net cash flows from (used in) operating activities: | |||||
| Depreciation and amortization | 350 | 388 | |||
| Provision for deferred income taxes | (18) | (99) | |||
| Changes in operating assets and liabilities: | |||||
| Current receivables | (192) | 125 | |||
| Inventories | (220) | (134) | |||
| Accounts payable | (63) | 114 | |||
| Progress collections and deferred income | 62 | (124) | |||
| Contract and other deferred assets | 61 | 140 | |||
| Other operating items, net | (194) | 23 | |||
| Net cash flows from (used in) operating activities | (143) | 290 | |||
| Cash flows from investing activities: | |||||
| Expenditures for capital assets | (294) | (177) | |||
| Proceeds from disposal of assets | 59 | 108 | |||
| Other investing items, net | (21) | (66) | |||
| Net cash flows used in investing activities | (256) | (135) | |||
| Cash flows from financing activities: | |||||
| Net repayments of short-term debt and other borrowings | (36) | (181) | |||
| Repayment of long-term debt | (12) | (648) | |||
| Distributions to members | (187) | (203) | |||
| Repurchase of common units | 0 | (524) | |||
| Other financing items, net | 2 | (5) | |||
| Net cash flows used in financing activities | (233) | (1,561) | |||
| Effect of currency exchange rate changes on cash and cash equivalents | 22 | (6) | |||
| Decrease in cash and cash equivalents | (610) | (1,412) | |||
| Cash and cash equivalents, beginning of period | 3,677 | [1] | 7,026 | ||
| Cash and cash equivalents, end of period | 3,067 | [1] | 5,614 | ||
| Supplemental cash flows disclosures: | |||||
| Income taxes paid | 76 | 82 | |||
| Interest paid | $ 56 | $ 72 | |||
| |||||
Basis of Presentation and Summary of Significant Accounting Policies |
3 Months Ended |
|---|---|
Mar. 31, 2019 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF THE BUSINESS Baker Hughes, a GE company, LLC, a Delaware limited liability company (the Company, BHGE LLC, we, us, or our), and the successor to Baker Hughes Incorporated, a Delaware corporation (Baker Hughes) is a fullstream oilfield technology provider that has a unique mix of equipment and service capabilities. We conduct business in more than 120 countries and employ approximately 67,000 employees. On July 3, 2017, we completed the combination of the oil and gas business (GE O&G) of General Electric Company (GE) and Baker Hughes (the Transactions). As of March 31, 2019, GE owns approximately 50.3% of our common units and Baker Hughes, a GE company (BHGE) owns approximately 49.7% of our common units. BASIS OF PRESENTATION In connection with the Transactions, we entered into and are governed by an Amended & Restated Limited Liability Company Agreement, dated as of July 3, 2017 (the BHGE LLC Agreement). Under the BHGE LLC Agreement, EHHC Newco, LLC (EHHC), a wholly owned subsidiary of BHGE, is our sole managing member and BHGE is the sole managing member of EHHC. As our managing member, EHHC conducts, directs and exercises full control over all our activities, including our day-to-day business affairs and decision-making, without the approval of any other member. As such, EHHC is responsible for all our operational and administrative decisions and the day-to-day management of our business. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. and such principles, U.S. GAAP) and pursuant to the rules and regulations of the SEC for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated and combined financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows of the Company and its subsidiaries for the periods presented and are not indicative of the results that may be expected for a full year. The Company's financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest). All intercompany accounts and transactions have been eliminated. In the Company's financial statements and notes, certain amounts have been reclassified to conform with the current year presentation. In the notes to unaudited condensed consolidated financial statements, all dollar and unit amounts in tabulations are in millions of dollars and units, respectively, unless otherwise indicated. Certain columns and rows in our financial statements and notes thereto may not add due to the use of rounded numbers. In June 2018, GE announced their intention to pursue an orderly separation from BHGE over time. In the three months ended March 31, 2019, separation and merger related costs primarily include costs incurred in connection with the finalization of the Master Agreement Framework and costs related to the anticipated separation from GE. In the three months ended March 31, 2018, separation and merger related costs includes all costs associated with the Transactions. See "Note 15. Related Party Transactions" for further information on the Master Agreement Framework. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Please refer to "Note 1. Basis of Presentation and Summary of Significant Accounting Policies," to our consolidated financial statements from our Annual Report on Form 10-K for the year ended December 31, 2018 (2018 Annual Report) for the discussion of our significant accounting policies. Please refer to the "New Accounting Standards Adopted" section of this Note for changes to our accounting policies. Cash and Cash Equivalents As of March 31, 2019 and December 31, 2018, we had $1,214 million and $1,208 million, respectively, of cash held in bank accounts that cannot be released, transferred or otherwise converted into a currency that is regularly transacted internationally, due to lack of market liquidity, capital controls or similar monetary or exchange limitations limiting the flow of capital out of the jurisdiction. These funds are available to fund operations and growth in these jurisdictions and we do not currently anticipate a need to transfer these funds to the U.S. Included in these amounts are $432 million and $461 million, as of March 31, 2019 and December 31, 2018, respectively, held on behalf of GE. Cash and cash equivalents includes a total of $717 million and $747 million of cash at March 31, 2019 and December 31, 2018, respectively, held on behalf of GE, and a corresponding liability is reported in short-term borrowings. See "Note 15. Related Party Transactions" for further details. NEW ACCOUNTING STANDARDS ADOPTED Leases On January 1, 2019, we adopted Accounting Standards Update (ASU) No. 2016-02, Leases, and the related amendments (ASC 842). This ASU requires lessees to recognize an operating lease asset and a lease liability on the balance sheet, with the exception of short-term leases. We adopted the standard using the modified retrospective approach under which leases existing at, or entered into after January 1, 2019 were required to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with our historical accounting. The Company has elected the practical expedients upon transition that allow entities not to reassess lease identification, classification and initial direct costs for leases that existed prior to adoption. The most significant impact of the standard is the recognition of right-of-use (ROU) assets and operating lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We implemented internal controls and key system functionality to enable the preparation of financial information on adoption. We determine if an arrangement is a lease at inception. ROU assets are included in "All other assets" and operating lease liabilities are included in "All other current liabilities" and "All other liabilities" on our consolidated statement of financial position. Finance lease assets are included in "Property, plant and equipment," and finance lease liabilities are included in "Short-term debt," and "Long-term debt" on our consolidated statement of financial position. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at the later of the lease commencement date or the effective date of adoption of ASC 842 on January 1, 2019, based on the present value of lease payments over the remaining lease term. Finance lease ROU assets and liabilities are recognized at commencement date. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Short-term leases under one year do not result in a ROU asset, but are recognized in the income statement only on a straight-line basis over the lease term. The Company has made an election to include within our operating lease liability future payments for both lease and non-lease components. See "Note 8. Leases" for additional information. The adoption of this standard resulted in the recording of ROU assets and operating lease liabilities of $844 million as of January 1, 2019 on our consolidated statements of financial position with an immaterial impact on our consolidated statements of equity and no related impact on our consolidated statements of income (loss). Short-term leases have not been recorded on the consolidated statements of financial position. Our accounting for finance leases remained substantially unchanged. Derivatives and Hedging On January 1, 2019, we adopted ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. Since there was no impact from the new guidance to our consolidated financial statements, no transition adjustments were recorded. ASU 2017-12 simplifies the application of hedge accounting and expands the strategies that qualify for hedge accounting. In accordance with the ASU, both the effective and ineffective portion of a cash flow hedge are initially reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings when the forecasted transaction affects earnings. The ASU requires certain changes to the presentation of hedge accounting in the financial statements and some new or modified disclosures. See "Note 13. Financial Instruments" for additional information. NEW ACCOUNTING STANDARDS TO BE ADOPTED In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses. The ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models in current U.S. GAAP, which generally require that a loss be incurred before it is recognized. The new standard will also apply to receivables arising from revenue transactions such as contract assets and accounts receivables and is effective for fiscal years beginning after December 15, 2019. We continue to evaluate the effect of the standard on our consolidated financial statements. All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.
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Revenue Related to Contracts With Customers |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue Related to Contracts with Customers | REVENUE RELATED TO CONTRACTS WITH CUSTOMERS DISAGGREGATED REVENUE We disaggregate our revenue from contracts with customers by primary geographic markets.
REMAINING PERFORMANCE OBLIGATIONS As of March 31, 2019 and 2018, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $20.5 billion and $21.3 billion, respectively. As of March 31, 2019, we expect to recognize revenue of approximately 47%, 62% and 89% of the total remaining performance obligations within 2, 5, and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations.PROGRESS COLLECTIONS AND DEFERRED INCOMEContract liabilities include progress collections, which reflects billings in excess of revenue, and deferred income on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements. Contract liabilities are comprised of the following:
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Current Receivables |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Receivables | CURRENT RECEIVABLES Current receivables are comprised of the following:
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Inventories |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
| Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
| Inventories | INVENTORIES Inventories, net of reserves of $438 million and $430 million as of March 31, 2019 and December 31, 2018, respectively, are comprised of the following:
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Goodwill and Other Intangible Assets |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL The changes in the carrying value of goodwill are detailed below by segment:
We test goodwill for impairment annually in the third quarter using data as of July 1 of that year. Our reporting units are the same as our four reportable segments. We also test goodwill for impairment between annual impairment testing dates whenever events or circumstances occur that, in our judgment, could more likely than not reduce the fair value of one or more reporting units below its carrying amount. In assessing the possibility that a reporting unit’s fair value has been reduced below its carrying amount due to the occurrence of events or circumstances between annual impairment testing dates, we consider all available evidence, including, but not limited to, (i) the results of our impairment testing at the prior annual impairment testing date, in particular the magnitude of the excess of fair value over carrying value observed, (ii) downward revisions to internal forecasts, and the magnitude thereof, if any, (iii) the impact of the separation from GE, if any, and (iv) declines in the market capitalization of BHGE below its book value, and the magnitude and duration of those declines, if any. During the first quarter of 2019, we have not identified any events or circumstances that could more likely than not reduce the fair value of one or more of our reporting units below its carrying amount. As of March 31, 2019, we believe that the goodwill is recoverable, however, there can be no assurances that sustained declines in macroeconomic or business conditions affecting our industry and business will not occur. The impairment testing involves significant management judgment and are based on assumptions about future commodity pricing, supply and demand for our goods and services, and market conditions, which are difficult to forecast in volatile economic environments. If actual results materially differ from the estimated assumptions utilized in our forecasts, we may need to record impairment charges in future periods. OTHER INTANGIBLE ASSETS Intangible assets are comprised of the following:
Intangible assets are generally amortized on a straight-line basis with estimated useful lives ranging from 1 to 30 years. Amortization expense for the three months ended March 31, 2019 and 2018 was $96 million and $139 million, respectively. Estimated amortization expense for the remainder of 2019 and each of the subsequent five fiscal years is expected to be as follows:
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Contract and Other Deferred Assets |
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| Deferred Revenue Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contract and Other Deferred Assets | CONTRACT AND OTHER DEFERRED ASSETS A majority of our long-term product service agreements relate to our Turbomachinery & Process Solutions segment. Contract assets reflect revenue earned in excess of billings on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements and other deferred contract related costs. Contract assets are comprised of the following:
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Progress Collections and Deferred Income |
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| Revenue Recognition and Deferred Revenue [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Progress Collections and Deferred Income | REVENUE RELATED TO CONTRACTS WITH CUSTOMERS DISAGGREGATED REVENUE We disaggregate our revenue from contracts with customers by primary geographic markets.
REMAINING PERFORMANCE OBLIGATIONS As of March 31, 2019 and 2018, the aggregate amount of the transaction price allocated to the unsatisfied (or partially unsatisfied) performance obligations was $20.5 billion and $21.3 billion, respectively. As of March 31, 2019, we expect to recognize revenue of approximately 47%, 62% and 89% of the total remaining performance obligations within 2, 5, and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as we fulfill the related remaining performance obligations.PROGRESS COLLECTIONS AND DEFERRED INCOMEContract liabilities include progress collections, which reflects billings in excess of revenue, and deferred income on our long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements. Contract liabilities are comprised of the following:
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Leases |
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | LEASES Our leasing activities primarily consist of operating leases for administrative offices, manufacturing facilities, research centers, service centers, sales offices and certain equipment.
For the three months ended March 31, 2018, total operating lease expense was $147 million. Cash flows used in operating activities for operating leases approximates our expense for the three months ended March 31, 2019 and 2018. As of March 31, 2019, maturities of our operating lease liabilities are as follows:
ROU assets of $860 million as of March 31, 2019 were included in "All other assets" in our condensed consolidated statements of financial position. The weighted-average remaining lease term as of March 31, 2019 was approximately nine years for our operating leases. The weighted-average discount rate used to determine the operating lease liability as of March 31, 2019 was 4.4%.
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Borrowings |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | BORROWINGS Short-term and long-term borrowings are comprised of the following:
We have a $3 billion committed unsecured revolving credit facility (the 2017 Credit Agreement) with commercial banks maturing in July 2022. The 2017 Credit Agreement contains certain customary representations and warranties, certain affirmative covenants and no negative covenants. Upon the occurrence of certain events of default, our obligations under the 2017 Credit Agreement may be accelerated. Such events of default include payment defaults to lenders under the 2017 Credit Agreement, and other customary defaults. No such events of default have occurred. At March 31, 2019 and December 31, 2018, there were no borrowings under the 2017 Credit Agreement. We have a commercial paper program under which we may issue from time to time up to $3 billion in commercial paper with maturities of no more than 397 days. At March 31, 2019 and December 31, 2018, there were no borrowings outstanding under the commercial paper program. The maximum combined borrowing at any time under both the 2017 Credit Agreement and the commercial paper program is $3 billion. Concurrent with the Transactions associated with the acquisition of Baker Hughes on July 3, 2017, Baker Hughes Co-Obligor, Inc. became a co-obligor, jointly and severally with us, on our registered debt securities. This co-obligor is a 100%-owned finance subsidiary of the Company that was incorporated for the sole purpose of serving as a co-obligor of debt securities and has no assets or operations other than those related to its sole purpose. Baker Hughes Co-Obligor, Inc. is also a co-obligor of the $3,950 million senior notes issued in December 2017 by us in a private placement and subsequently registered in January 2018. Certain Senior Notes contain covenants that restrict our ability to take certain actions, including, but not limited to, the creation of certain liens securing debt, the entry into certain sale-leaseback transactions and engaging in certain merger, consolidation and asset sale transactions in excess of specified limits. The estimated fair value of total borrowings at March 31, 2019 and December 31, 2018 was $6,966 million and $6,629 million, respectively. For a majority of our borrowings the fair value was determined using quoted period-end market prices. Where market prices are not available, we estimate fair values based on valuation methodologies using current market interest rate data adjusted for our non-performance risk. See "Note 15. Related Party Transactions" for additional information on the short-term borrowings from GE.
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| Employee Benefits Plans | EMPLOYEE BENEFIT PLANS In 2018, certain of our U.S. employees were covered under various U.S. GE employee benefit plans, including GE's retirement plans (pension, retiree health and life insurance, and savings benefit plans). Beginning in 2019, such employees ceased to participate in these GE U.S. plans. In addition, certain United Kingdom (UK) employees participate in the GE UK Pension Plan. We are allocated relevant participation costs for these GE employee benefit plans as part of multi-employer plans. As such, we have not recorded any liabilities associated with our participation in these plans. Expenses associated with our participation in these plans was $2 million and $37 million in the three months ended March 31, 2019 and 2018, respectively. In November 2018, the Company entered into an agreement with GE whereby GE will transfer the assets and liabilities of the GE UK Pension Plan related to the oil & gas businesses to BHGE on what is intended to be a fully funded basis. Subsequent to this transfer, BHGE employees shall cease to participate in the GE UK Pension Plan. This transfer is expected to close in 2019. In addition to these GE plans, certain of our employees are also covered by company sponsored employee defined benefit plans. These defined benefit plans include four U.S. plans and six non-U.S. plans, primarily in the UK, Germany, and Canada, all with plan assets or obligations greater than $20 million. We use a December 31 measurement date for these plans. These defined benefit plans generally provide benefits to employees based on formulas recognizing length of service and earnings. The components of net periodic cost (benefit) of plans sponsored by us are as follows for the three months ended March 31:
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Income Taxes |
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| Income Tax Disclosure [Abstract] | |
| Income Taxes | INCOME TAXESFor the quarter ended March 31, 2019, income tax expense was $67 million compared to $38 million for the prior year quarter. The difference between the U.S. statutory tax rate of 21% and the current effective tax rate is primarily related to the geographical mix of earnings and losses, coupled with $21 million related to losses with no tax benefit due to valuation allowances. |
Members' Equity |
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| Members' Equity | MEMBERS' EQUITY COMMON UNITS The BHGE LLC Agreement provides that initially there is one class of common units, which are currently held by BHGE and GE. If BHGE issues a share of Class A common stock, including in connection with an equity incentive or similar plan, we will also issue a corresponding common unit to BHGE or one of its direct subsidiaries. For the three months ended March 31, 2019 we issued $1,541 thousand common units to BHGE in connection with the issuance of Class A common stock by BHGE. The following table presents the changes in the number of common units outstanding (in thousands):
ACCUMULATED OTHER COMPREHENSIVE LOSS (AOCL) The following tables present the changes in accumulated other comprehensive loss, net of tax:
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Instruments | FINANCIAL INSTRUMENTS RECURRING FAIR VALUE MEASUREMENTS Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities.
There were no transfers between Level 1, 2 and 3 during the three months ended March 31, 2019. The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities:
The most significant unobservable input used in the valuation of our Level 3 instruments is the discount rate. Discount rates are determined based on inputs that market participants would use when pricing investments, including credit and liquidity risk. An increase in the discount rate would result in a decrease in the fair value of our investment securities. There are no unrealized gains or losses recognized in the condensed consolidated statement of income (loss) on account of any Level 3 instrument still held at the reporting date. At March 31, 2019 and December 31, 2018, we held $144 million and $149 million, respectively, of these investment securities on behalf of GE.
FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS Our financial instruments include cash, cash equivalents, current receivables, investments, accounts payable, short and long-term debt, and derivative financial instruments. Except for long-term debt, the estimated fair value of these financial instruments at March 31, 2019 and December 31, 2018 approximates their carrying value as reflected in our condensed consolidated financial statements. For further information on the fair value of our debt, see "Note 9. Borrowings." DERIVATIVES AND HEDGING We use derivatives to manage our risks and do not use derivatives for speculation. The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives.
Derivatives are classified in the captions "All other current assets," "All other assets," "All other current liabilities," and "All other liabilities" depending on their respective maturity date. As of March 31, 2019 and December 31, 2018, $50 million and $67 million of derivative assets are recorded in "All other current assets" and $5 million and $7 million are recorded in "All other assets" of the condensed consolidated statements of financial position, respectively. As of March 31, 2019 and December 31, 2018, $44 million and $79 million of derivative liabilities are recorded in "All other current liabilities" and $3 million and $3 million are recorded in "All other liabilities" of the condensed consolidated statements of financial position, respectively. RISK MANAGEMENT STRATEGY We buy, manufacture and sell components and products as well as provide services across global markets. These activities expose us to changes in foreign currency exchange rates and commodity prices, which can adversely affect revenues earned and costs of operating our business. When the currency in which we sell equipment differs from the primary currency (known as its functional currency) and the exchange rate fluctuates, it will affect the revenue we earn on the sale. These sales and purchase transactions also create receivables and payables denominated in foreign currencies, along with other monetary assets and liabilities, which expose us to foreign currency gains and losses based on changes in exchange rates. Changes in the price of a raw material that we use in manufacturing can affect the cost of manufacturing. We use derivatives to mitigate or eliminate these exposures. FORMS OF HEDGING Cash Flow Hedges We use cash flow hedging primarily to reduce or eliminate the effects of foreign exchange rate changes on purchase and sale contracts. Accordingly, the vast majority of our derivative activity in this category consists of currency exchange contracts. We also use commodity derivatives to reduce or eliminate price risk on raw materials purchased for use in manufacturing. Economic Hedges These derivatives are not designated as hedges from an accounting standpoint (and therefore we do not apply hedge accounting to the relationship) but otherwise serve the same economic purpose as other hedging arrangements. Some economic hedges are used when changes in the carrying amount of the hedged item are already recorded in earnings in the same period as the derivative, making hedge accounting unnecessary. For some other types of economic hedges, changes in the fair value of the derivative are recorded in earnings currently but changes in the value of the forecasted foreign currency cash flows are only recognized in earnings when they occur. As a result, even though the derivative is an effective economic hedge, there is a net effect on earnings in each period due to differences in the timing of earnings recognition between the derivative and the hedged item. These derivatives are marked to fair value through earnings each period. NOTIONAL AMOUNT OF DERIVATIVES The notional amount of a derivative is the number of units of the underlying (for example, the notional principal amount of the debt in an interest rate swap). A substantial majority of the outstanding notional amount of $5.4 billion and $6.4 billion at March 31, 2019 and December 31, 2018, respectively, is related to hedges of anticipated sales and purchases in foreign currency, commodity purchases, and contractual terms in contracts that are considered embedded derivatives and for intercompany borrowings in foreign currencies. We generally disclose derivative notional amounts on a gross basis to indicate the total counterparty risk. Where we have gross purchase and sale derivative contracts for a particular currency, we look to execute these contracts with the same counterparty to reduce our exposure. The corresponding net notional amounts were $2.9 billion and $2.8 billion at March 31, 2019 and December 31, 2018, respectively. CASH FLOW HEDGES Changes in the fair value of cash flow hedges are recorded in a separate component of equity (referred to below as Accumulated Other Comprehensive Income, or AOCI) and are recorded in earnings in the period in which the hedged transaction occurs. The table below summarizes this activity by hedging instrument.
We expect to transfer $1 million to earnings as an income in the next 12 months contemporaneously with the earnings effects of the related forecast transactions. At March 31, 2019 and December 31, 2018, the maximum term of derivative instruments that hedge forecast transactions was one year and two years, respectively. ECONOMIC HEDGES The following table summarizes the gains (losses) from derivatives not designated as hedges on the condensed consolidated statements of income (loss) for the three months ended March 31, 2019 and 2018.
COUNTERPARTY CREDIT RISK Fair values of our derivatives can change significantly from period to period based on, among other factors, market movements and changes in our positions. We manage counterparty credit risk (the risk that counterparties will default and not make payments to us according to the terms of our agreements) on an individual counterparty basis.
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| Segment Information | SEGMENT INFORMATION Our operating segments are organized based on the nature of markets and customers. We report our operating results through four operating segments that consists of similar products and services within each segment as described below. OILFIELD SERVICES (OFS) OFS provides products and services for onshore and offshore operations across the lifecycle of a well, ranging from drilling, evaluation, completion, production and intervention. Products and services include diamond and tri-cone drill bits, drilling services, including directional drilling technology, measurement while drilling & logging while drilling, downhole completion tools and systems, wellbore intervention tools and services, wireline services, drilling and completions fluids, oilfield and industrial chemicals, pressure pumping, and artificial lift technologies, including electrical submersible pumps. OILFIELD EQUIPMENT (OFE) OFE provides a broad portfolio of products and services required to facilitate the safe and reliable flow of hydrocarbons from the subsea wellhead to the surface. Products and services include pressure control equipment and services, subsea production systems and services, drilling equipment, and flexible pipeline systems. OFE designs and manufactures onshore and offshore drilling and production systems and equipment for floating production platforms and provides a full range of services related to onshore and offshore drilling activities. TURBOMACHINERY & PROCESS SOLUTIONS (TPS) TPS provides equipment and related services for mechanical-drive, compression and power-generation applications across the oil and gas industry as well as products and services to serve the downstream segments of the industry including refining, petrochemical, distributed gas, flow and process control and other industrial applications. The TPS portfolio includes drivers (aero-derivative gas turbines, heavy-duty gas turbines and synchronous and induction electric motors), compressors (centrifugal and axial, direct drive high speed, integrated, subsea compressors, turbo expanders and reciprocating), turn-key solutions (industrial modules and waste heat recovery), pumps, valves, and compressed natural gas (CNG) and small-scale liquefied natural gas (LNG) solutions used primarily for shale oil and gas field development. DIGITAL SOLUTIONS (DS) DS provides equipment and services for a wide range of industries, including oil & gas, power generation, aerospace, metals, and transportation. The offerings include sensor-based measurement, non-destructive testing and inspection, turbine, generator and plant controls and condition monitoring, as well as pipeline integrity solutions. SEGMENT RESULTS Summarized financial information is shown in the following tables. Consistent accounting policies have been applied by all segments within the Company, for all reporting periods.
The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and equity in loss of affiliate and before the following: net interest expense, net other non operating income (loss), corporate expenses, restructuring, impairment and other charges, inventory impairments, separation and merger related costs and certain gains and losses not allocated to the operating segments.
(1) Charges for inventory impairments are reported in the "Cost of goods sold" caption of the condensed consolidated statements of income (loss).
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2019 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | RELATED PARTY TRANSACTIONS In connection with the Transactions on July 3, 2017, we entered into various agreements with GE and its affiliates that govern our relationship with GE following the Transactions including an Intercompany Services Agreement pursuant to which GE and its affiliates and the Company provide certain services to each other. GE provides certain administrative services, GE proprietary technology and use of certain GE trademarks for an annual service fee of $55 million. GE may also provide us with certain additional administrative services under the Intercompany Services Agreement and the fees for such services are based on actual usage of such services and historical GE intercompany pricing. In addition, we provide GE and its affiliates with confidential access to certain of our proprietary technology and related developments and enhancements thereto related to GE's operations, products or service offerings. Under the terms of the Master Agreement Framework, entered into on November 13, 2018, the annual intercompany services fee of $55 million that we agreed to pay GE as part of the Transactions is reduced by 50% to $27.5 million per year beginning on January 1, 2019. The Intercompany Services Agreement will terminate 90 days following the Trigger Date. See further discussion below. We incurred costs of $7 million and $14 million related to the Intercompany Services Agreement during the three months ended March 31, 2019 and 2018, respectively. We sold $81 million and $100 million of products and services to GE and its affiliates during the three months ended March 31, 2019 and 2018, respectively. Purchases from GE and its affiliates were $451 million and $403 million during the three months ended March 31, 2019 and 2018, respectively. MASTER AGREEMENT FRAMEWORK In June 2018, GE announced their intention to pursue an orderly separation from BHGE over time. On November 13, 2018, we entered into a Master Agreement and a series of related ancillary agreements and binding term sheets (which were later negotiated into definitive agreements) with GE and BHGE (collectively, the Master Agreement Framework) designed to further solidify the commercial and technological collaborations between us and GE and to facilitate our ability to transition from operating as a controlled company. In particular, the Master Agreement Framework contemplates long-term agreements between us, BHGE and GE on technology, fulfillment and other key areas to provide greater clarity to customers, employees and shareholders. Key elements of the Master Agreement Framework include: Secured long-term collaboration on critical rotating equipment Under the terms of the Master Agreement Framework, we have defined the parameters for a long-term collaboration and strategic relationship with GE on certain critical rotating equipment products. We have entered into an aero-derivative joint venture (JV) agreement with GE to form a JV relating to the parties’ respective aero-derivative gas turbine products and services. Effectiveness of the JV is subject to regulatory clearances and other customary closing conditions. In addition, the JV cannot become effective prior to the first business day of the month after the "Trigger Date" which is defined as the later of (i) July 3, 2019 and (ii) the date on which GE and its affiliates cease to own more than 50% of the voting power of BHGE’s outstanding common stock. These jet engine aero-derivative products are mainly used in our LNG, onshore-offshore production, pipeline and industrial segments within our Turbomachinery & Process Solutions segment and by GE in its power generation business. GE and we will contribute certain assets, inventory and service facilities into the JV and both companies will jointly control operations. In addition to the contributions to the JV, we agreed to pay $60 million to GE, in order to equalize each party's interests in the JV at 50%. The JV will have a supply and technology development agreement with GE’s aviation business (GE Aviation), which will revise and extend pricing arrangements as compared to BHGE’s existing supply agreement, and which will become effective at the Trigger Date. Additionally, we have entered into an industrial steam turbine (IST) sale agreement with GE, which, among other things, sets forth the terms and conditions on which BHGE LLC will transfer certain of its assets, liabilities and employees that are related to BHGE LLC’s existing business of developing, designing, engineering, marketing, supplying, installing and servicing certain industrial steam turbine product lines to GE. In addition to the IST business transfer, the agreement provides that we will make a cash payment of $13 million to an affiliate of GE at the closing of the transactions subject to certain working capital adjustments. Subject to the satisfaction of customary closing conditions, the transfer of the IST business is expected to close in the second quarter of 2019. In parallel, we have also entered into an agreement for the long-term supply and related distribution arrangement with GE for heavy-duty gas turbine technology at the current pricing levels, which will become effective at the Trigger Date. Under this agreement BHGE LLC will be appointed as GE's exclusive distributor (with limited exceptions) within the oil and gas industry with respect to the heavy-duty gas turbine units for an initial term of 5 years and associated services (including parts and components) for an initial term of 20 years or the operating service life of the relevant gas turbine, whichever is more. The heavy-duty gas turbine technologies are important components of TPS’ offerings and the long-term agreements provide greater clarity on the commercial approach and customer fulfillment, and will enable us and GE to jointly innovate on leading technology. Preserved access to GE Digital software & technology As part of the Master Agreement Framework, BHGE LLC has agreed with GE Digital to maintain, subject to certain conditions, BHGE LLC's current status as the exclusive reseller of GE Digital offerings in the oil & gas space, and BHGE LLC will continue to source exclusively from GE Digital for certain GE Digital offerings for oil and gas applications. As part of this agreement, BHGE LLC and GE Digital have revised and extended certain pricing arrangements and have established service level obligations. Other key agreements • GE and we agreed to maintain current operations and pricing levels with regards to Control upgrade services we offer through our Digitals Solution segment division for the 4 years commencing on the Trigger Date. • GE will transfer to BHGE certain UK pension liabilities related to the oil and gas businesses of BHGE and certain specified former oil and gas businesses of GE on what is intended to be a fully funded basis (using agreed upon actuarial assumptions). No liabilities associated with GE’s broad-based U.S. defined benefit pension plan will be transferred to us. The transfer of the UK pension liabilities is expected to be completed in 2019. • The Tax Matters Agreement with GE that was negotiated at the time of the Transactions will be clarified but otherwise will remain substantially in place and both companies retain the ability to monetize certain tax benefits. • Under the terms of the Master Agreement Framework, the annual intercompany services fee of $55 million that we agreed to pay GE as part of the Transactions is reduced by 50% to $27.5 million per year beginning on January 1, 2019. The Intercompany Services Agreement will terminate 90 days following the Trigger Date (except with respect to certain tools access). In connection with the Master Agreement Framework, we have agreed to terminate certain aspects of the transfer restrictions previously applicable to GE under the Stockholders Agreement, dated as of July 3, 2017, by and between us and GE, as amended from time to time (the Stockholders Agreement). The transfer restrictions prohibited GE from transferring any shares of our common stock prior to July 3, 2019 (except to its affiliates) without the approval of the Conflicts Committee of our board of directors. Other provisions of the Stockholders Agreement, including continuing restrictions on certain private transfers of shares of our common stock by GE, and approval requirements for related party transactions, remain in effect. In addition, the Stockholders Agreement was amended and restated to provide that, following the Trigger Date and until GE and its affiliates own less than 20% of the voting power of our outstanding common stock, GE shall be entitled to designate one person for nomination to our board of directors. OTHER RELATED PARTY In connection with the Transactions, on July 3, 2017, we executed a promissory note with GE that represents certain cash that we are holding on GE's behalf due to the restricted nature of the cash. The restriction arises as the majority of the cash cannot be released, transferred or otherwise converted into a non-restricted market currency due to the lack of market liquidity, capital controls or similar monetary or exchange limitations by a Government entity of the jurisdiction in which such cash is situated. There is no maturity date on the promissory note, but we remain obligated to repay GE, therefore, this obligation is reflected as short-term borrowings. As of March 31, 2019, of the $861 million due to GE, $717 million was held in the form of cash and $144 million was held in the form of investment securities. As of December 31, 2018, of the $896 million due to GE, $747 million was held in the form of cash and $149 million was held in the form of investment securities. A corresponding liability is reported in short-term borrowings in the condensed consolidated statements of financial position. Additionally, the Company has $510 million and $538 million of accounts payable at March 31, 2019 and December 31, 2018, respectively, for goods and services provided by GE in the ordinary course of business. The Company has $635 million and $653 million of current receivables at March 31, 2019 and December 31, 2018, respectively, for goods and services provided to GE in the ordinary course of business. Additionally, the company has $83 million and $93 million of current receivable at March 31, 2019 and December 31, 2018, respectively from BHGE. We also provide guarantees to GE Capital on behalf of some customers who have entered into financing arrangements with GE Capital. TRADE PAYABLES ACCELERATED PAYMENT PROGRAM Our North American operations participate in accounts payable programs with GE Capital. Invoices are settled with vendors per our payment terms to obtain cash discounts. GE Capital provides funding for invoices eligible for a cash discount. Our liability associated with the funded participation in the accounts payable programs, which is presented as accounts payable within the condensed consolidated statements of financial position, was $456 million and $471 million as of March 31, 2019 and December 31, 2018, respectively. On January 16, 2019, GE announced the sale of GE Capital’s accounts payable program platform to a third-party and their intent to start transitioning their existing program to an accounts payable program with that party. As a GE affiliate, we are covered under the agreement.
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Commitments and Contingencies |
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| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES LITIGATION We are subject to a number of lawsuits and claims arising out of the conduct of our business. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. We record a liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, including accruals for self-insured losses which are calculated based on historical claim data, specific loss development factors and other information. A range of total possible losses for all litigation matters cannot be reasonably estimated. Based on a consideration of all relevant facts and circumstances, we do not expect the ultimate outcome of currently pending lawsuits or claims against us, other than those discussed below, will have a material adverse effect on our financial position, results of operations or cash flows, however, there can be no assurance as to the ultimate outcome of these matters. With respect to the litigation matters below, if there was an adverse outcome individually or collectively, there could be a material impact on our business, financial condition and results of operations expected for the year. These litigation matters are subject to inherent uncertainties and management's view of these matters may change in the future. Therefore, there can be no assurance as to the ultimate outcome of these matters. During 2014, we received notification from a customer related to a possible equipment failure in a natural gas storage system in Northern Germany, which includes certain of our products. The customer initiated arbitral proceedings against us on June 19, 2015, under the rules of the German Institute of Arbitration e.V. (DIS). On August 3, 2016, the customer amended its claims and alleged damages of €202 million plus interest at an annual rate of prime + 5%. Hearings before the arbitration panel were held January 16, 2017 through January 23, 2017, and March 20, 2017 through March 21, 2017. In addition, on September 21, 2015, TRIUVA Kapitalverwaltungsgesellschaft mbH filed a lawsuit in the United States District Court for the Southern District of Texas, Houston Division against the Company and Baker Hughes Oilfield Operations, Inc. alleging that the plaintiff is the owner of gas storage caverns in Etzel, Germany in which the Company provided certain equipment in connection with the development of the gas storage caverns. The plaintiff further alleges that the Company supplied equipment that was either defectively designed or failed to warn of risks that the equipment posed, and that these alleged defects caused damage to the plaintiff's property. The plaintiff seeks recovery of alleged compensatory and punitive damages of an unspecified amount, in addition to reasonable attorneys' fees, court costs and pre-judgment and post-judgment interest. The allegations in this lawsuit are related to the claims made in the June 19, 2015 German arbitration referenced above. On June 7, 2018, the DIS arbitration panel issued a confidential Arbitration Ruling which addressed all claims asserted by the customer. The estimated financial impact of the Arbitration Ruling has been reflected in the Company's financial statements and did not have a material impact. Further, on March 11, 2019, the customer initiated a second arbitral proceeding against us, under the rules of the German Institute of Arbitration e.V. (DIS). The customer alleged damages of €142 million plus interest at an annual rate of prime + 5% since June 20, 2015. The allegations in this second arbitration proceeding are related to the claims made in the June 19, 2015 German arbitration and Houston Federal Court proceedings referenced above. The Company is vigorously contesting the claims made by TRIUVA in the Houston Federal Court and the claims made by the customer in the 2019 arbitration proceeding. At this time, we are not able to predict the outcome of the claims asserted in the Houston Federal Court or the 2019 arbitration proceeding. On July 31, 2015, Rapid Completions LLC filed a lawsuit in federal court in the Eastern District of Texas against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc., and others claiming infringement of U.S. Patent Nos. 6,907,936; 7,134,505; 7,543,634; 7,861,774; and 8,657,009. On August 6, 2015, Rapid Completions amended its complaint to allege infringement of U.S. Patent No. 9,074,451. On September 17, 2015, Rapid Completions and Packers Plus Energy Services Inc. sued Baker Hughes Canada Company in the Canada Federal Court on the related Canadian patent 2,412,072. On April 1, 2016, Rapid Completions removed U.S. Patent No. 6,907,936 from its claims in the lawsuit. On April 5, 2016, Rapid Completions filed a second lawsuit in federal court in the Eastern District of Texas against Baker Hughes Incorporated, Baker Hughes Oilfield Operations, Inc. and others claiming infringement of U.S. Patent No. 9,303,501. These patents relate primarily to certain specific downhole completions equipment. The plaintiff has requested a permanent injunction against further alleged infringement, damages in an unspecified amount, supplemental and enhanced damages, and additional relief such as attorney's fees and costs. During August and September 2016, the United States Patent and Trademark Office (USPTO) agreed to institute an inter-partes review of U.S. Patent Nos 7,861,774; 7,134,505; 7,543,634; 6,907,936; 8,657,009; and 9,074,451. On August 29, 2017, the USPTO issued its final written decisions in the inter-partes reviews of U.S. Patent Nos. 8,657,009 and 9,074,451 finding that all claims of those patents were unpatentable. On August 31, 2017, the USPTO issued its final written decision in the inter-partes review of U.S. Patent 6,907,936 - the patent dropped from the lawsuit by the plaintiffs - finding that all claims of this patent were patentable. On October 27, 2017, Rapid Completions filed its notices of appeal of the USPTO’s final written decision in the inter-partes review of U.S. Patent Nos. 8,657,009 and 9,074,451. On September 26, 2018, the USPTO issued its final written decision in the inter-partes review of U.S. Patent No. 7,134,505 finding all of the challenged claims unpatentable. On September 27, 2018, the USPTO issued its final written decision in the inter-partes review of U.S. Patent No. 7,543,634 finding all of the challenged claims unpatentable. Trial on the validity of asserted claims from Canada patent 2,412,072, was completed March 9, 2017. On December 7, 2017, the Canadian Court issued its judgment finding the patent claims asserted from Canada patent 2,412,072 against Baker Hughes Canada Company were invalid. On January 5, 2018, Rapid Completions filed its Notice of Appeal of the Canadian Court’s judgment of invalidity. On November 19, 2018, the U.S. Court of Appeals for the Federal Circuit affirmed the USPTO’s unpatentability findings with respect to U.S. Patent Nos. 8,657,009 and 9,074,451. On November 26, 2018, Rapid Completions filed notices of appeal of the USPTO’s final written decisions in the inter partes reviews of U.S. Patent No. 7,134,505, and 7,543,634. On April 24, 2019, the Canadian Court of Appeals ruled against Rapid Completions and dismissed Rapid Completion’s appeal in Canada. The remaining appeals of the USPTO decisions finding Rapid Completion’s U.S. Patent claims unpatentable are still pending and, at this time, we are not able to predict the outcome of these claims. In January 2013, INEOS and Naphtachimie initiated expertise proceedings in Aix-en-Provence, France arising out of a fire at a chemical plant owned by INEOS in Lavera, France, which resulted in a 15-day plant shutdown and destruction of a steam turbine, which was part of a compressor train owned by Naphtachimie. The most recent quantification of the alleged damages is €250 million. Two of the Company's subsidiaries (and 17 other companies) were notified to participate in the proceedings. The proceedings are ongoing, and at this time, there is no indication that the Company's subsidiaries were involved in the incident. Although the outcome of the claims remains uncertain, BHGE's insurer has accepted coverage and is defending the Company in the expertise proceeding. In late November 2017, staff of the Boston office of the SEC notified GE that they are conducting an investigation of GE’s revenue recognition practices and internal controls over financial reporting related to long-term service agreements. The scope of the SEC’s request may include some BHGE contracts, expected to be mainly in our TPS business. We have provided documents to GE and are cooperating with them in their response to the SEC. At this time, we are not able to predict the outcome of this review. On July 31, 2018, International Engineering & Construction S.A. (IEC) initiated arbitration proceedings in New York administered by the International Center for Dispute Resolution (ICDR) against the Company and its subsidiaries arising out of a series of sales and service contracts entered between IEC and the Company’s subsidiaries for the sale and installation of LNG plants and related power generation equipment in Nigeria (Contracts). Prior to the filing of the IEC Arbitration, the Company’s subsidiaries made demands for payment due under the Contracts. On August 15, 2018, the Company’s subsidiaries initiated a separate demand for ICDR arbitration against IEC for claims of additional costs and amounts due under the Contracts. On October 10, 2018, IEC filed a Petition to Compel Arbitration in the United States District Court for the Southern District of New York against the Company seeking to compel non-signatory BHGE entities to participate in the arbitration filed by IEC. The complaint is captioned International Engineering & Construction S.A. et al. v. Baker Hughes, a GE Company LLC, et al. No. 18-cv-09241 (S.D.N.Y 2018). IEC alleges breach of contract and other claims against the Company and its subsidiaries and seeks recovery of alleged compensatory damages, in addition to reasonable attorneys' fees, expenses and arbitration costs. On March 15, 2019, IEC amended its request for arbitration to alleged damages of $591 million of lost profits plus unspecified additional costs based on alleged non-performance of the contracts in dispute. The Company has vigorously contested IEC’s claims and is pursuing BHGE’s claims for compensation under the contracts. At this time, we are not able to predict the outcome of these claims. On March 15, 2019 and March 18, 2019, the City of Riviera Beach Pension Fund and Richard Schippnick, respectively, filed in the Delaware Court of Chancery shareholder derivative lawsuits for and on BHGE's behalf against GE, the current members of the Board of Directors of BHGE and BHGE as a nominal defendant, related to the decision to (i) terminate the contractual prohibition barring GE from selling any of BHGE's shares before July 3, 2019; (ii) repurchase $1.5 billion in BHGE's stock from GE; (iii) permit GE to sell approximately $2.5 billion in BHGE's stock through a secondary offering; and (iv) enter into a series of other agreements and amendments that will govern the ongoing relationship between BHGE and GE (collectively, the “2018 Transactions”). The complaints in both lawsuits allege, among other things, that GE, as BHGE’s controlling stockholder, and the members of BHGE’s Board of Directors breached their fiduciary duties by entering into the 2018 Transactions. The relief sought in the complaints includes a request for a declaration that the defendants breached their fiduciary duties, that GE was unjustly enriched, disgorgement of profits, an award of damages sustained by BHGE, pre- and post-judgment interest, and attorneys’ fees and costs. On March 21, 2019, the Chancery Court entered an order consolidating the Schippnick and City of Riviera Beach complaints under consolidated C.A. No. 2019-0201-AGB, styled in re Baker Hughes, a GE company derivative litigation. At this time, we are not able to predict the outcome of these claims. In March 2019, BHGE received a document request from the United States Department of Justice (the “DOJ”) related to certain of the Company’s operations in Iraq and its dealings with Unaoil Limited and its affiliates. BHGE and the Company are cooperating with the DOJ in connection with this request and any related matters. In addition, BHGE has agreed to toll any statute of limitations in connection with the matters subject to the DOJ’s document request until December 2019. We insure against risks arising from our business to the extent deemed prudent by our management and to the extent insurance is available, but no assurance can be given that the nature and amount of that insurance will be sufficient to fully indemnify us against liabilities arising out of pending or future legal proceedings or other claims. Most of our insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability, general liability and workers compensation. PRODUCT WARRANTIES We provide for estimated product warranty expenses when we sell the related products. Because warranty estimates are forecasts that are based on the best available information, primarily historical claims experience, claims costs may differ from amounts provided. An analysis of changes in the liability for product warranties are as follows:
OTHER In the normal course of business with customers, vendors and others, we have entered into off-balance sheet arrangements, such as surety bonds for performance, letters of credit and other bank issued guarantees, which totaled approximately $3.8 billion at March 31, 2019. It is not practicable to estimate the fair value of these financial instruments. None of the off-balance sheet arrangements either has, or is likely to have, a material effect on our financial position, results of operations or cash flows.
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Restructuring, Impairment and Other |
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| Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring, Impairment and Other | RESTRUCTURING, IMPAIRMENT AND OTHER We recorded restructuring, impairment and other charges of $62 million and $162 million during the three months ended March 31, 2019 and 2018, respectively. Details of these charges are discussed below. RESTRUCTURING AND IMPAIRMENT CHARGES In the current and prior periods, we approved various restructuring plans globally, mainly to consolidate manufacturing and service facilities, rationalize product lines and rooftops, and reduce headcount across various functions. As a result, we recognized a charge of $62 million and $125 million for the three months ended March 31, 2019 and 2018, respectively. These restructuring initiatives will generate charges post March 31, 2019, and the related estimated remaining charges are approximately $74 million. The amount of costs not included in the reported segment results is as follows:
These costs were primarily related to product line terminations, plant closures and related expenses such as property, plant and equipment impairments, contract terminations and costs of assets' and employees' relocation, employee-related termination benefits, and other incremental costs that were a direct result of the restructuring plans.
OTHER CHARGES Other charges included in "Restructuring, impairment and other" of the condensed consolidated statements of income (loss) were $37 million for the three months ended March 31, 2018 relating to accelerated amortization for certain trade names, and technology in our Oilfield Services segment.
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2019 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation | BASIS OF PRESENTATION In connection with the Transactions, we entered into and are governed by an Amended & Restated Limited Liability Company Agreement, dated as of July 3, 2017 (the BHGE LLC Agreement). Under the BHGE LLC Agreement, EHHC Newco, LLC (EHHC), a wholly owned subsidiary of BHGE, is our sole managing member and BHGE is the sole managing member of EHHC. As our managing member, EHHC conducts, directs and exercises full control over all our activities, including our day-to-day business affairs and decision-making, without the approval of any other member. As such, EHHC is responsible for all our operational and administrative decisions and the day-to-day management of our business. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. and such principles, U.S. GAAP) and pursuant to the rules and regulations of the SEC for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated and combined financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows of the Company and its subsidiaries for the periods presented and are not indicative of the results that may be expected for a full year. The Company's financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all of our subsidiaries (entities in which we have a controlling financial interest, most often because we hold a majority voting interest). All intercompany accounts and transactions have been eliminated. In the Company's financial statements and notes, certain amounts have been reclassified to conform with the current year presentation. In the notes to unaudited condensed consolidated financial statements, all dollar and unit amounts in tabulations are in millions of dollars and units, respectively, unless otherwise indicated. Certain columns and rows in our financial statements and notes thereto may not add due to the use of rounded numbers. In June 2018, GE announced their intention to pursue an orderly separation from BHGE over time. In the three months ended March 31, 2019, separation and merger related costs primarily include costs incurred in connection with the finalization of the Master Agreement Framework and costs related to the anticipated separation from GE. In the three months ended March 31, 2018, separation and merger related costs includes all costs associated with the Transactions. See "Note 15. Related Party Transactions" for further information on the Master Agreement Framework. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Please refer to "Note 1. Basis of Presentation and Summary of Significant Accounting Policies," to our consolidated financial statements from our Annual Report on Form 10-K for the year ended December 31, 2018 (2018 Annual Report) for the discussion of our significant accounting policies. Please refer to the "New Accounting Standards Adopted" section of this Note for changes to our accounting policies.
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| Cash And Equivalents | Cash and Cash Equivalents As of March 31, 2019 and December 31, 2018, we had $1,214 million and $1,208 million, respectively, of cash held in bank accounts that cannot be released, transferred or otherwise converted into a currency that is regularly transacted internationally, due to lack of market liquidity, capital controls or similar monetary or exchange limitations limiting the flow of capital out of the jurisdiction. These funds are available to fund operations and growth in these jurisdictions and we do not currently anticipate a need to transfer these funds to the U.S. Included in these amounts are $432 million and $461 million, as of March 31, 2019 and December 31, 2018, respectively, held on behalf of GE. Cash and cash equivalents includes a total of $717 million and $747 million of cash at March 31, 2019 and December 31, 2018, respectively, held on behalf of GE, and a corresponding liability is reported in short-term borrowings. See "Note 15. Related Party Transactions" for further details.
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| New Accounting Standards Adopted and To Be Adopted | NEW ACCOUNTING STANDARDS ADOPTED Leases On January 1, 2019, we adopted Accounting Standards Update (ASU) No. 2016-02, Leases, and the related amendments (ASC 842). This ASU requires lessees to recognize an operating lease asset and a lease liability on the balance sheet, with the exception of short-term leases. We adopted the standard using the modified retrospective approach under which leases existing at, or entered into after January 1, 2019 were required to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with our historical accounting. The Company has elected the practical expedients upon transition that allow entities not to reassess lease identification, classification and initial direct costs for leases that existed prior to adoption. The most significant impact of the standard is the recognition of right-of-use (ROU) assets and operating lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We implemented internal controls and key system functionality to enable the preparation of financial information on adoption. We determine if an arrangement is a lease at inception. ROU assets are included in "All other assets" and operating lease liabilities are included in "All other current liabilities" and "All other liabilities" on our consolidated statement of financial position. Finance lease assets are included in "Property, plant and equipment," and finance lease liabilities are included in "Short-term debt," and "Long-term debt" on our consolidated statement of financial position. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at the later of the lease commencement date or the effective date of adoption of ASC 842 on January 1, 2019, based on the present value of lease payments over the remaining lease term. Finance lease ROU assets and liabilities are recognized at commencement date. As most of our leases do not provide an implicit rate, we use our incremental collateralized borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Short-term leases under one year do not result in a ROU asset, but are recognized in the income statement only on a straight-line basis over the lease term. The Company has made an election to include within our operating lease liability future payments for both lease and non-lease components. See "Note 8. Leases" for additional information. The adoption of this standard resulted in the recording of ROU assets and operating lease liabilities of $844 million as of January 1, 2019 on our consolidated statements of financial position with an immaterial impact on our consolidated statements of equity and no related impact on our consolidated statements of income (loss). Short-term leases have not been recorded on the consolidated statements of financial position. Our accounting for finance leases remained substantially unchanged. Derivatives and Hedging On January 1, 2019, we adopted ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. Since there was no impact from the new guidance to our consolidated financial statements, no transition adjustments were recorded. ASU 2017-12 simplifies the application of hedge accounting and expands the strategies that qualify for hedge accounting. In accordance with the ASU, both the effective and ineffective portion of a cash flow hedge are initially reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings when the forecasted transaction affects earnings. The ASU requires certain changes to the presentation of hedge accounting in the financial statements and some new or modified disclosures. See "Note 13. Financial Instruments" for additional information. NEW ACCOUNTING STANDARDS TO BE ADOPTED In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses. The ASU introduces a new accounting model, the Current Expected Credit Losses model (CECL), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models in current U.S. GAAP, which generally require that a loss be incurred before it is recognized. The new standard will also apply to receivables arising from revenue transactions such as contract assets and accounts receivables and is effective for fiscal years beginning after December 15, 2019. We continue to evaluate the effect of the standard on our consolidated financial statements. All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.
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Revenue Related to Contracts With Customers (Tables) |
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| Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Disaggregated revenue from contracts with customers by primary geographical markets | We disaggregate our revenue from contracts with customers by primary geographic markets.
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Current Receivables (Tables) |
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| Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current receivables | Current receivables are comprised of the following:
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Inventories (Tables) |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
| Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
| Inventories, net of reserves | Inventories, net of reserves of $438 million and $430 million as of March 31, 2019 and December 31, 2018, respectively, are comprised of the following:
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Goodwill and Other Intangible Assets (Tables) |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of goodwill | The changes in the carrying value of goodwill are detailed below by segment:
(1) Includes the final determination of fair value of the assets and liabilities and the related goodwill associated with the acquisition of Baker Hughes that was concluded in the second quarter of 2018. Of the total goodwill of $13,669 million resulting from the acquisition of Baker Hughes, $12,604 million is allocated to our Oilfield Services segment and the remainder to our other segments based on the expected benefit from the synergies of the acquisition.
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| Schedule of finite-lived intangible assets | Intangible assets are comprised of the following:
(1) Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name.
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| Schedule of indefinite-lived intangible assets | Intangible assets are comprised of the following:
(1) Indefinite-lived intangible assets are principally comprised of the Baker Hughes trade name.
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| Schedule of finite-lived intangible assets, future amortization expense | Estimated amortization expense for the remainder of 2019 and each of the subsequent five fiscal years is expected to be as follows:
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Contract and Other Deferred Assets (Tables) |
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| Deferred Revenue Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contract assets | Contract assets are comprised of the following:
(3) Deferred inventory costs were $360 million as of January 1, 2018, which represents cost deferral for shipped goods and other costs where the criteria for revenue recognition has not yet been met. Contract liabilities are comprised of the following:
(1) Progress collections and deferred income (contract liabilities) were $1,775 million at January 1, 2018.
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Progress Collections and Deferred Income (Tables) |
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| Contract liabilities | Contract assets are comprised of the following:
(3) Deferred inventory costs were $360 million as of January 1, 2018, which represents cost deferral for shipped goods and other costs where the criteria for revenue recognition has not yet been met. Contract liabilities are comprised of the following:
(1) Progress collections and deferred income (contract liabilities) were $1,775 million at January 1, 2018.
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Leases (Tables) |
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of operating lease expense | Our leasing activities primarily consist of operating leases for administrative offices, manufacturing facilities, research centers, service centers, sales offices and certain equipment.
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| Maturities of lease liabilities, operating leases | As of March 31, 2019, maturities of our operating lease liabilities are as follows:
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| Schedule of liabilities | As of March 31, 2019, maturities of our operating lease liabilities are as follows:
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Borrowings (Tables) |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-term and long-term borrowings | Short-term and long-term borrowings are comprised of the following:
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Employee Benefit Plans (Tables) |
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| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of net periodic cost (benefit) | The components of net periodic cost (benefit) of plans sponsored by us are as follows for the three months ended March 31:
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Members' Equity (Tables) |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of changes in number of shares outstanding | The following table presents the changes in the number of common units outstanding (in thousands):
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| Schedule of accumulated other comprehensive loss | The following tables present the changes in accumulated other comprehensive loss, net of tax:
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Financial Instruments (Tables) |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets and liabilities measured at fair value on a recurring basis | Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities.
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| Reconciliation of recurring Level 3 fair value measurements | The following table provides a reconciliation of recurring Level 3 fair value measurements for investment securities:
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| Schedule of investment securities classified as available for sale |
(2) Gains (losses) recorded to earnings related to these securities were $10 million and $(13) million for the three months ended March 31, 2019 and 2018, respectively.
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| Schedule of derivatives | The table below summarizes the fair value of all derivatives, including hedging instruments and embedded derivatives.
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| Schedule of hedging instrument, currency exchange contract | The table below summarizes this activity by hedging instrument.
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| Schedule of gains (losses) from derivatives not designated as hedges | The following table summarizes the gains (losses) from derivatives not designated as hedges on the condensed consolidated statements of income (loss) for the three months ended March 31, 2019 and 2018.
(2) The effect on earnings of derivatives not designated as hedges is substantially offset by change in fair value of the economically hedged items in the current and future periods.
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Segment Information (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summarized financial information | Summarized financial information is shown in the following tables. Consistent accounting policies have been applied by all segments within the Company, for all reporting periods.
The performance of our operating segments is evaluated based on segment operating income (loss), which is defined as income (loss) before income taxes and equity in loss of affiliate and before the following: net interest expense, net other non operating income (loss), corporate expenses, restructuring, impairment and other charges, inventory impairments, separation and merger related costs and certain gains and losses not allocated to the operating segments.
(1) Charges for inventory impairments are reported in the "Cost of goods sold" caption of the condensed consolidated statements of income (loss).
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Product Warranties | An analysis of changes in the liability for product warranties are as follows:
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Restructuring, Impairment and Other (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment and Restructuring Charges | The amount of costs not included in the reported segment results is as follows:
These costs were primarily related to product line terminations, plant closures and related expenses such as property, plant and equipment impairments, contract terminations and costs of assets' and employees' relocation, employee-related termination benefits, and other incremental costs that were a direct result of the restructuring plans.
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Basis of Presentation and Summary of Significant Accounting Policies (Details) employee in Thousands, $ in Millions |
Mar. 31, 2019
USD ($)
employee
country
|
Jan. 01, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|---|---|---|---|
| Business Acquisition [Line Items] | |||
| Countries in which our business is conducted | country | 120 | ||
| Number of our employees | employee | 67 | ||
| Restricted cash and cash equivalents held in bank accounts | $ 1,214 | $ 1,208 | |
| Right of use asset | 860 | ||
| Operating lease liability | 869 | ||
| ASU 2016-02 | |||
| Business Acquisition [Line Items] | |||
| Right of use asset | $ 844 | ||
| Operating lease liability | $ 844 | ||
| Related party amount, due to related party | GE | |||
| Business Acquisition [Line Items] | |||
| Cash held on behalf of GE | 861 | 896 | |
| Cash | 717 | 747 | |
| Related party amount, due to related party | GE | Geographic distribution, foreign | |||
| Business Acquisition [Line Items] | |||
| Cash held on behalf of GE | $ 432 | $ 461 | |
| GE Transaction Agreement | General Electric Company | |||
| Business Acquisition [Line Items] | |||
| Approximate interest to be acquired | 50.30% | ||
| GE Transaction Agreement | Baker Hughes Incorporated | |||
| Business Acquisition [Line Items] | |||
| Approximate interest to be acquired | 49.70% |
Revenue Related to Contracts With Customers - Disaggregated revenue (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Disaggregation of Revenue [Line Items] | ||
| Revenues | $ 5,615 | $ 5,399 |
| Performance obligations expected to be satisfied | 20,500 | 21,300 |
| U.S. | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenues | 1,505 | 1,483 |
| Non-U.S. | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenues | $ 4,110 | $ 3,916 |
Revenue Related to Contracts With Customers (Details) |
Mar. 31, 2019 |
|---|---|
| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
| Disaggregation of Revenue [Line Items] | |
| Performance obligations expected to be satisfied, percentage | 47.00% |
| Performance obligations expected to be satisfied, expected timing | 2 years |
| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
| Disaggregation of Revenue [Line Items] | |
| Performance obligations expected to be satisfied, percentage | 62.00% |
| Performance obligations expected to be satisfied, expected timing | 5 years |
| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
| Disaggregation of Revenue [Line Items] | |
| Performance obligations expected to be satisfied, percentage | 89.00% |
| Performance obligations expected to be satisfied, expected timing | 15 years |
Current Receivables (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Total current receivables | $ 6,737 | $ 6,389 |
| Less: Allowance for doubtful accounts | (335) | (327) |
| Total current receivables, net | 6,402 | 6,062 |
| Customer receivables | ||
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Total current receivables | 5,305 | 4,974 |
| Related parties | ||
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Total current receivables | 718 | 746 |
| Other | ||
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Total current receivables | $ 714 | $ 669 |
Inventories (Details) - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2019 |
Dec. 31, 2018 |
|
| Inventory, Net [Abstract] | |||
| Inventory valuation reserves | $ 438 | $ 430 | |
| Finished goods | 2,782 | 2,575 | |
| Work in process and raw material | 2,089 | 2,045 | |
| Total inventories, net | $ 4,871 | $ 4,620 | |
| Inventory impairment | $ 61 |
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
| Goodwill [Line Items] | |||
| Balance at December 31, 2017, gross | $ 23,408 | ||
| Goodwill impairment | (3,754) | ||
| Goodwill [Roll Forward] | |||
| Goodwill, net, beginning balance | $ 20,423 | $ 19,654 | |
| Goodwill, purchase accounting adjustments | 959 | ||
| Goodwill, currency exchange and others | 45 | (190) | |
| Goodwill, net, ending balance | 20,468 | 20,423 | |
| GE Transaction Agreement | |||
| Goodwill [Roll Forward] | |||
| Goodwill, acquired during period | 13,669 | ||
| Oilfield Services | |||
| Goodwill [Line Items] | |||
| Balance at December 31, 2017, gross | 15,565 | ||
| Goodwill impairment | (2,633) | ||
| Goodwill [Roll Forward] | |||
| Goodwill, net, beginning balance | 12,749 | 12,932 | |
| Goodwill, purchase accounting adjustments | (157) | ||
| Goodwill, currency exchange and others | 0 | (26) | |
| Goodwill, net, ending balance | 12,749 | 12,749 | |
| Oilfield Services | GE Transaction Agreement | |||
| Goodwill [Roll Forward] | |||
| Goodwill, acquired during period | 12,604 | ||
| Oilfield Equipment | |||
| Goodwill [Line Items] | |||
| Balance at December 31, 2017, gross | 3,901 | ||
| Goodwill impairment | (867) | ||
| Goodwill [Roll Forward] | |||
| Goodwill, net, beginning balance | 3,310 | 3,034 | |
| Goodwill, purchase accounting adjustments | 293 | ||
| Goodwill, currency exchange and others | 22 | (17) | |
| Goodwill, net, ending balance | 3,332 | 3,310 | |
| Turbomachinery & Process Solutions | |||
| Goodwill [Line Items] | |||
| Balance at December 31, 2017, gross | 1,906 | ||
| Goodwill impairment | 0 | ||
| Goodwill [Roll Forward] | |||
| Goodwill, net, beginning balance | 2,186 | 1,906 | |
| Goodwill, purchase accounting adjustments | 394 | ||
| Goodwill, currency exchange and others | 6 | (114) | |
| Goodwill, net, ending balance | 2,192 | 2,186 | |
| Digital Solutions | |||
| Goodwill [Line Items] | |||
| Balance at December 31, 2017, gross | 2,036 | ||
| Goodwill impairment | $ (254) | ||
| Goodwill [Roll Forward] | |||
| Goodwill, net, beginning balance | 2,178 | 1,782 | |
| Goodwill, purchase accounting adjustments | 429 | ||
| Goodwill, currency exchange and others | 17 | (33) | |
| Goodwill, net, ending balance | $ 2,195 | $ 2,178 |
Goodwill and Other Intangible Assets - Narrative (Details) $ in Millions |
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2019
USD ($)
segment
|
Mar. 31, 2018
USD ($)
|
|
| Finite-Lived Intangible Assets [Line Items] | ||
| Number of reportable segments | segment | 4 | |
| Amortization expense for intangible assets included in net income | $ | $ 96 | $ 139 |
| Minimum | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Estimated useful lives | 1 year | |
| Maximum | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Estimated useful lives | 30 years | |
Goodwill and Other Intangible Assets - Schedule of Intangible Assets by Type (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Finite-Lived Intangible Assets, Net [Abstract] | ||
| Finite-lived intangible assets, gross | $ 6,065 | $ 6,022 |
| Finite-lived intangible assets, accumulated amortization | (2,644) | (2,525) |
| Finite-lived intangible assets, net | 3,421 | 3,497 |
| Indefinite-lived intangible assets | 2,242 | 2,222 |
| Intangible assets, gross | 8,307 | 8,244 |
| Other intangible assets, net | 5,663 | 5,719 |
| Customer relationships | ||
| Finite-Lived Intangible Assets, Net [Abstract] | ||
| Finite-lived intangible assets, gross | 3,101 | 3,085 |
| Finite-lived intangible assets, accumulated amortization | (983) | (944) |
| Finite-lived intangible assets, net | 2,118 | 2,141 |
| Technology | ||
| Finite-Lived Intangible Assets, Net [Abstract] | ||
| Finite-lived intangible assets, gross | 1,091 | 1,107 |
| Finite-lived intangible assets, accumulated amortization | (557) | (526) |
| Finite-lived intangible assets, net | 534 | 581 |
| Trade names and trademarks | ||
| Finite-Lived Intangible Assets, Net [Abstract] | ||
| Finite-lived intangible assets, gross | 703 | 698 |
| Finite-lived intangible assets, accumulated amortization | (237) | (229) |
| Finite-lived intangible assets, net | 466 | 469 |
| Capitalized software | ||
| Finite-Lived Intangible Assets, Net [Abstract] | ||
| Finite-lived intangible assets, gross | 1,169 | 1,118 |
| Finite-lived intangible assets, accumulated amortization | (866) | (824) |
| Finite-lived intangible assets, net | 303 | 294 |
| Other | ||
| Finite-Lived Intangible Assets, Net [Abstract] | ||
| Finite-lived intangible assets, gross | 1 | 14 |
| Finite-lived intangible assets, accumulated amortization | (1) | (2) |
| Finite-lived intangible assets, net | $ 0 | $ 12 |
Goodwill and Other Intangible Assets - Schedule of Future Estimated Amortization Expense (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
|---|---|
| Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
| Remainder of 2019 | $ 261 |
| 2020 | 329 |
| 2021 | 280 |
| 2022 | 237 |
| 2023 | 225 |
| 2024 | $ 218 |
Contract and Other Deferred Assets (Details) - USD ($) $ in Millions |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
Jan. 01, 2018 |
|
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
| Contract assets (revenue in excess of billings) | $ 1,616 | $ 1,694 | $ 1,684 | |
| Deferred inventory costs | 144 | 179 | $ 360 | |
| Non-recurring engineering costs | 48 | 21 | ||
| Contract and other deferred assets | 1,808 | 1,894 | ||
| Revenue recognized from performance obligations satisfied in previous periods | 7 | $ 10 | ||
| Long-term product service agreements | ||||
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
| Contract assets (revenue in excess of billings) | 576 | 609 | ||
| Long-term equipment contracts | ||||
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
| Contract assets (revenue in excess of billings) | $ 1,040 | $ 1,085 | ||
Progress Collections and Deferred Income (Details) - USD ($) $ in Millions |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
Jan. 01, 2018 |
|
| Disaggregation of Revenue [Line Items] | ||||
| Progress collections and deferred income (contract liabilities) | $ 1,923 | $ 1,765 | $ 1,775 | |
| Revenue recognized, included in contract liability | 553 | $ 602 | ||
| Progress collections | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Progress collections and deferred income (contract liabilities) | 1,790 | 1,600 | ||
| Deferred income | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Progress collections and deferred income (contract liabilities) | $ 133 | $ 165 | ||
Leases - Operating lease expense (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Operating Lease Expense | ||
| Long-term fixed lease | $ 48 | |
| Long-term variable lease | 11 | |
| Short-term lease | 123 | |
| Total operating lease expense | $ 182 | $ 147 |
Leases - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Leases [Abstract] | ||
| Operating lease expense | $ 182 | $ 147 |
| Operating lease assets | $ 860 | |
| Operating lease, weighted-average remaining lease term | 9 years | |
| Operating lease, weighted-average discount rate | 4.40% | |
Leases - Lease liabilities (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
|---|---|
| Operating Lease Liabilities, Payments Due [Abstract] | |
| Remainder of 2019 | $ 165 |
| 2020 | 194 |
| 2021 | 140 |
| 2022 | 113 |
| 2023 | 80 |
| Thereafter | 386 |
| Total lease payments | 1,078 |
| Less: imputed interest | 209 |
| Total | 869 |
| Lease liabilities [Abstract] | |
| All other current liabilities | 194 |
| All other liabilities | 675 |
| Total | $ 869 |
Borrowings - Short-term and long-term borrowings (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
||
|---|---|---|---|---|
| Short-term borrowings | ||||
| Total short-term borrowings | [1] | $ 906 | $ 942 | |
| Long-term borrowings | ||||
| Other long-term borrowings | 97 | 107 | ||
| Total long-term borrowings | 6,270 | 6,285 | ||
| Total borrowings | $ 7,176 | 7,227 | ||
| 3.2% Senior Notes due August 2021 | ||||
| Debt Instrument [Line Items] | ||||
| Stated interest rate | 3.20% | |||
| 2.773% Senior Notes due December 2022 | ||||
| Debt Instrument [Line Items] | ||||
| Stated interest rate | 2.773% | |||
| 8.55% Debentures due June 2024 | ||||
| Debt Instrument [Line Items] | ||||
| Stated interest rate | 8.55% | |||
| 3.337% Senior Notes due December 2027 | ||||
| Debt Instrument [Line Items] | ||||
| Stated interest rate | 3.337% | |||
| 6.875% Notes due January 2029 | ||||
| Debt Instrument [Line Items] | ||||
| Stated interest rate | 6.875% | |||
| 5.125% Senior Notes due September 2040 | ||||
| Debt Instrument [Line Items] | ||||
| Stated interest rate | 5.125% | |||
| 4.08% Senior Notes due December 2047 | ||||
| Debt Instrument [Line Items] | ||||
| Stated interest rate | 4.08% | |||
| Senior Notes | 3.2% Senior Notes due August 2021 | ||||
| Long-term borrowings | ||||
| Long-term borrowings | $ 522 | 523 | ||
| Senior Notes | 2.773% Senior Notes due December 2022 | ||||
| Long-term borrowings | ||||
| Long-term borrowings | 1,245 | 1,245 | ||
| Senior Notes | 3.337% Senior Notes due December 2027 | ||||
| Long-term borrowings | ||||
| Long-term borrowings | 1,343 | 1,343 | ||
| Senior Notes | 6.875% Notes due January 2029 | ||||
| Long-term borrowings | ||||
| Long-term borrowings | 292 | 294 | ||
| Senior Notes | 5.125% Senior Notes due September 2040 | ||||
| Long-term borrowings | ||||
| Long-term borrowings | 1,305 | 1,306 | ||
| Senior Notes | 4.08% Senior Notes due December 2047 | ||||
| Long-term borrowings | ||||
| Long-term borrowings | 1,336 | 1,336 | ||
| Debentures | 8.55% Debentures due June 2024 | ||||
| Long-term borrowings | ||||
| Long-term borrowings | 130 | 131 | ||
| Short-term borrowings from GE | ||||
| Short-term borrowings | ||||
| Short-term borrowings | 861 | 896 | ||
| Other borrowings | ||||
| Short-term borrowings | ||||
| Short-term borrowings | $ 45 | $ 46 | ||
| ||||
Borrowings - Additional Information (Details) - USD ($) |
12 Months Ended | ||||
|---|---|---|---|---|---|
Nov. 03, 2017 |
Dec. 31, 2018 |
Mar. 31, 2019 |
Dec. 11, 2017 |
Jul. 03, 2017 |
|
| Line of Credit Facility [Line Items] | |||||
| Estimated fair value of debt | $ 6,629,000,000 | $ 6,966,000,000 | |||
| BHGE LLC | 2017 Credit Agreement | Revolving credit facility | |||||
| Line of Credit Facility [Line Items] | |||||
| Line of credit facility, maximum borrowing capacity | $ 3,000,000,000 | ||||
| Long-term borrowings | 0 | 0 | |||
| BHGE LLC | 2017 Credit Agreement | Revolving credit facility | Commercial paper | |||||
| Line of Credit Facility [Line Items] | |||||
| Short-term borrowings | $ 0 | $ 0 | |||
| BHGE LLC | Baker Hughes Co-Obligor, Inc. | |||||
| Line of Credit Facility [Line Items] | |||||
| Ownership percentage | 100.00% | ||||
| BHGE LLC | Senior Notes | Baker Hughes Co-Obligor, Inc. | |||||
| Line of Credit Facility [Line Items] | |||||
| Debt instrument, face | $ 3,950,000,000 | ||||
| Commercial paper | BHGE LLC | 2017 Credit Agreement | |||||
| Line of Credit Facility [Line Items] | |||||
| Debt instrument, term | 397 days |
Employee Benefit Plans (Details) - Pension Benefits |
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2019
USD ($)
plan
|
Mar. 31, 2018
USD ($)
|
|
| Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
| Multiemployer plan, contributions by employer | $ | $ 2,000,000 | $ 37,000,000 |
| Pension assets or obligations, threshold, per plan | $ | $ 20,000,000 | |
| U.S. | ||
| Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
| Number of plans | plan | 4 | |
| Non-U.S. Pension Benefits | ||
| Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
| Number of plans | plan | 6 | |
Employee Benefit Plans - Net period cost (Details) - Pension Benefits - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Components of net periodic benefit cost [Abstract] | ||
| Service cost | $ 4 | $ 5 |
| Interest cost | 19 | 18 |
| Expected return on plan assets | (25) | (30) |
| Amortization of net actuarial loss | 4 | 2 |
| Net periodic cost (benefit) | $ 2 | $ (5) |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Income Tax Disclosure [Abstract] | ||
| Income tax expense (benefit) | $ 67 | $ 38 |
| U.S. income tax rate | 21.00% | |
| Loss with no tax benefit, valuation allowance | $ 21 | |
Members' Equity - Narrative (Details) shares in Thousands |
3 Months Ended |
|---|---|
|
Mar. 31, 2019
shares
| |
| Common Unitholders | Baker Hughes, a GE Company (BHGE) | |
| Class of Stock [Line Items] | |
| Approximate interest to be acquired (in units) | 1,541 |
Members' Equity - Changes in Number of Shares Outstanding (Details) shares in Thousands |
3 Months Ended |
|---|---|
|
Mar. 31, 2019
shares
| |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
| Balance at beginning of year (in units) | 1,035,000 |
| Balance at end of year (in units) | 1,036,000 |
| Common Unitholders | Baker Hughes, a GE Company (BHGE) | |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
| Balance at beginning of year (in units) | 513,399 |
| Issue of units to BHGE under equity incentive plan (in units) | 1,541 |
| Balance at end of year (in units) | 514,940 |
| Common Unitholders | General Electric Company | |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
| Balance at beginning of year (in units) | 521,543 |
| Issue of units to BHGE under equity incentive plan (in units) | 0 |
| Balance at end of year (in units) | 521,543 |
Members' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Beginning Balance | $ 34,876 | $ 38,396 |
| Other comprehensive income | 172 | 316 |
| Less: Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
| Ending Balance | 34,966 | 37,969 |
| Investment Securities, Parent | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Beginning Balance | 0 | 1 |
| Ending Balance | 2 | 1 |
| Investment Securities | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Other comprehensive income (loss) before reclassifications | 2 | 0 |
| Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
| Deferred taxes | 0 | 0 |
| Other comprehensive income | 2 | 0 |
| Investment Securities, Noncontrolling Interest | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Less: Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
| Foreign Currency Translation Adjustment, Parent | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Beginning Balance | (2,326) | (1,824) |
| Ending Balance | (2,160) | (1,512) |
| Foreign Currency Translation Adjustments | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Other comprehensive income (loss) before reclassifications | 166 | 312 |
| Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
| Deferred taxes | 0 | 0 |
| Other comprehensive income | 166 | 312 |
| Foreign Currency Translation Adjustment, Noncontrolling Interest | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Less: Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
| Cash Flow Hedges, Parent | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Beginning Balance | (3) | 2 |
| Ending Balance | 1 | 9 |
| Cash Flow Hedges | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Other comprehensive income (loss) before reclassifications | 5 | 8 |
| Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 |
| Deferred taxes | (1) | (1) |
| Other comprehensive income | 4 | 7 |
| Cash Flow Hedges, Noncontrolling Interest | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Less: Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
| Benefit Plans, Parent | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Beginning Balance | (133) | (60) |
| Ending Balance | (133) | (63) |
| Benefit Plans | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Other comprehensive income (loss) before reclassifications | (2) | (3) |
| Amounts reclassified from accumulated other comprehensive income (loss) | 1 | 0 |
| Deferred taxes | 1 | 0 |
| Other comprehensive income | 0 | (3) |
| Benefit Plans, Noncontrolling Interest | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Less: Other comprehensive income attributable to noncontrolling interests | 0 | 0 |
| Accumulated Other Comprehensive Loss | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Beginning Balance | (2,462) | (1,881) |
| Other comprehensive income | 172 | 316 |
| Ending Balance | (2,290) | (1,565) |
| Accumulated Other Comprehensive Loss | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Other comprehensive income (loss) before reclassifications | 171 | 317 |
| Amounts reclassified from accumulated other comprehensive income (loss) | 1 | 0 |
| Deferred taxes | 0 | (1) |
| Other comprehensive income | 172 | 316 |
| Accumulated Other Comprehensive Income (Loss), Noncontrolling Interest | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Less: Other comprehensive income attributable to noncontrolling interests | $ 0 | $ 0 |
Financial Instruments - Recurring fair value measurements (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Investment securities | $ 339 | $ 327 |
| Total assets | 55 | 74 |
| Total liabilities | (47) | (82) |
| Fair value, measurements, recurring | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Derivative assets | 55 | 74 |
| Investment securities | 339 | 327 |
| Total assets | 394 | 401 |
| Derivative liability | (47) | (82) |
| Total liabilities | (47) | (82) |
| Fair value, measurements, recurring | Level 1 | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Derivative assets | 0 | 0 |
| Investment securities | 49 | 39 |
| Total assets | 49 | 39 |
| Derivative liability | 0 | 0 |
| Total liabilities | 0 | 0 |
| Fair value, measurements, recurring | Level 2 | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Derivative assets | 55 | 74 |
| Investment securities | 0 | 0 |
| Total assets | 55 | 74 |
| Derivative liability | (47) | (82) |
| Total liabilities | (47) | (82) |
| Fair value, measurements, recurring | Level 3 | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Derivative assets | 0 | 0 |
| Investment securities | 290 | 288 |
| Total assets | 290 | 288 |
| Derivative liability | 0 | 0 |
| Total liabilities | $ 0 | $ 0 |
Financial Instruments - Reconciliation of recurring Level 3 fair value measurements (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
| Beginning balance | $ 288 | $ 304 |
| Purchases | 6 | 34 |
| Proceeds at maturity | (6) | (12) |
| Unrealized gains recognized in AOCI | 2 | 0 |
| Ending balance | $ 290 | $ 326 |
Financial Instruments - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
| Derivative Instruments, Gain (Loss) [Line Items] | ||
| Derivative, notional amount | $ 5,400 | $ 6,400 |
| Derivative, notional amount, net | 2,900 | $ 2,800 |
| Derivative, transfer to earnings | $ 1 | |
| Cash flow hedging | ||
| Derivative Instruments, Gain (Loss) [Line Items] | ||
| Derivative, term | 1 year | 2 years |
Financial Instruments - Investment securities (Details) - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
| Debt Securities, Available-for-sale [Line Items] | |||
| Investment securities, gross unrealized gains | $ 2 | $ 0 | |
| Investment securities, gross unrealized losses | 0 | 0 | |
| Equity securities, amortized cost | 49 | 39 | |
| Equity securities, estimated fair value | 49 | 39 | |
| Total, amortized cost | 337 | 327 | |
| Total, estimated fair value | 339 | 327 | |
| Net unrealized gain (loss) | 10 | $ (13) | |
| Non-U.S. debt securities | |||
| Debt Securities, Available-for-sale [Line Items] | |||
| Investment securities, amortized cost | 288 | 288 | |
| Investment securities, gross unrealized gains | 2 | 0 | |
| Investment securities, gross unrealized losses | 0 | 0 | |
| Investment securities | $ 290 | $ 288 | |
| Derivative, term | 4 years | ||
Financial Instruments - Derivatives and hedging (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Derivatives, Fair Value [Line Items] | ||
| Assets, fair value | $ 55 | $ 74 |
| Liabilities, fair value | (47) | (82) |
| Currency exchange contracts | Designated as hedging instrument | ||
| Derivatives, Fair Value [Line Items] | ||
| Assets, fair value | 1 | 0 |
| Liabilities, fair value | 0 | (7) |
| Currency exchange contracts | Not designated as hedging instrument | ||
| Derivatives, Fair Value [Line Items] | ||
| Assets, fair value | 52 | 74 |
| Liabilities, fair value | (46) | (75) |
| Commodity derivatives | Not designated as hedging instrument | ||
| Derivatives, Fair Value [Line Items] | ||
| Assets, fair value | 2 | 0 |
| Liabilities, fair value | 0 | 0 |
| Other derivatives | Not designated as hedging instrument | ||
| Derivatives, Fair Value [Line Items] | ||
| Assets, fair value | 0 | 0 |
| Liabilities, fair value | $ (1) | $ 0 |
Financial Instruments - Derivatives (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| All other current assets | ||
| Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
| Derivative assets | $ 50 | $ 67 |
| All other assets | ||
| Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
| Derivative assets | 5 | 7 |
| All other current liabilities | ||
| Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
| Derivative liability | 44 | 79 |
| All other liabilities | ||
| Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
| Derivative liability | $ 3 | $ 3 |
Financial Instruments - Cash flow hedges (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Derivative Instruments, Gain (Loss) [Line Items] | ||
| Gain (Loss) Recognized in AOCI | $ 4 | |
| Gain (Loss) Recognized in AOCI | $ 7 | |
| Cash flow hedging | Currency exchange contracts | ||
| Derivative Instruments, Gain (Loss) [Line Items] | ||
| Gain (Loss) Recognized in AOCI | 5 | |
| Gain (Loss) Recognized in AOCI | 8 | |
| Gain (Loss) Reclassified from AOCI to Earnings | $ 0 | |
| Gain (Loss) Reclassified from AOCI to Earnings | $ 0 | |
Financial Instruments - Economic hedges (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
| Embedded derivatives, loss | $ 2 | $ 39 |
| Not designated as hedging instrument, economic hedge | ||
| Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
| Total | 3 | 17 |
| Not designated as hedging instrument, economic hedge | Currency exchange contracts | Cost of goods sold | ||
| Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
| Gains (losses) from derivatives | 3 | 41 |
| Not designated as hedging instrument, economic hedge | Currency exchange contracts | Selling, general and administrative expenses | ||
| Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
| Gains (losses) from derivatives | (1) | (24) |
| Not designated as hedging instrument, economic hedge | Commodity derivatives | Cost of goods sold | ||
| Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
| Gains (losses) from derivatives | 2 | 0 |
| Not designated as hedging instrument, economic hedge | Other derivatives | Other non operating income, net | ||
| Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
| Gains (losses) from derivatives | $ (1) | $ 0 |
Segment Information (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2019
segment
| |
| Segment Reporting [Abstract] | |
| Number of operating segments | 4 |
Segment Information - Operating profit (loss) by segment (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Summarized financial information [Abstract] | ||
| Revenues | $ 5,615 | $ 5,399 |
| Income (loss) before income taxes and equity in loss of affiliate | 138 | (85) |
| Inventory impairment | (61) | |
| Separation and merger related costs | (34) | (46) |
| Other non operating income, net | 21 | 2 |
| Interest expense, net | (59) | (46) |
| Operating segments | ||
| Summarized financial information [Abstract] | ||
| Income (loss) before income taxes and equity in loss of affiliate | 373 | 327 |
| Corporate | ||
| Summarized financial information [Abstract] | ||
| Income (loss) before income taxes and equity in loss of affiliate | (100) | (98) |
| Segment reconciling items | ||
| Summarized financial information [Abstract] | ||
| Inventory impairment | 0 | (61) |
| Restructuring, impairment and other | (62) | (162) |
| Separation and merger related costs | (34) | (46) |
| Other non operating income, net | 21 | 2 |
| Interest expense, net | (59) | (46) |
| Oilfield Services | ||
| Summarized financial information [Abstract] | ||
| Revenues | 2,986 | 2,678 |
| Oilfield Services | Operating segments | ||
| Summarized financial information [Abstract] | ||
| Income (loss) before income taxes and equity in loss of affiliate | 176 | 141 |
| Oilfield Equipment | ||
| Summarized financial information [Abstract] | ||
| Revenues | 735 | 664 |
| Oilfield Equipment | Operating segments | ||
| Summarized financial information [Abstract] | ||
| Income (loss) before income taxes and equity in loss of affiliate | 12 | (6) |
| Turbomachinery & Process Solutions | ||
| Summarized financial information [Abstract] | ||
| Revenues | 1,302 | 1,460 |
| Turbomachinery & Process Solutions | Operating segments | ||
| Summarized financial information [Abstract] | ||
| Income (loss) before income taxes and equity in loss of affiliate | 118 | 119 |
| Digital Solutions | ||
| Summarized financial information [Abstract] | ||
| Revenues | 592 | 598 |
| Digital Solutions | Operating segments | ||
| Summarized financial information [Abstract] | ||
| Income (loss) before income taxes and equity in loss of affiliate | $ 68 | $ 73 |
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |||||
|---|---|---|---|---|---|---|
Jan. 01, 2019 |
Jul. 03, 2017 |
Mar. 31, 2019 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
| Related Party Transaction [Line Items] | ||||||
| Current receivables | $ 6,737.0 | $ 6,389.0 | ||||
| GE Capital accounts payable program | ||||||
| Related Party Transaction [Line Items] | ||||||
| Accounts payable, related party | 456.0 | 471.0 | ||||
| Accounts Payable, GE and its affiliates | ||||||
| Related Party Transaction [Line Items] | ||||||
| Accounts payable, related party | $ 510.0 | 538.0 | ||||
| GE | GE’s corporate overhead | ||||||
| Related Party Transaction [Line Items] | ||||||
| Selling, general and administrative expenses, agreement | $ 27.5 | $ 55.0 | ||||
| Selling, general and administrative expenses, agreement, increase (decrease) | (50.00%) | |||||
| GE | Intercompany Services Agreement | ||||||
| Related Party Transaction [Line Items] | ||||||
| Related party transaction, term | 90 days | |||||
| Related party transaction | $ 7.0 | $ 14.0 | ||||
| GE | Sales of products and services, GE and its affiliates | ||||||
| Related Party Transaction [Line Items] | ||||||
| Revenue from related parties | 81.0 | 100.0 | ||||
| GE | Purchases, GE and its affiliates | ||||||
| Related Party Transaction [Line Items] | ||||||
| Related party purchases | 451.0 | $ 403.0 | ||||
| GE | Related party amount, due to related party | ||||||
| Related Party Transaction [Line Items] | ||||||
| Cash held on behalf of GE | 861.0 | 896.0 | ||||
| Cash | $ 717.0 | 747.0 | ||||
| GE | Long-term supply arrangement, heavy-duty gas turbine units | BHGE LLC | ||||||
| Related Party Transaction [Line Items] | ||||||
| Related party transaction, term | 5 years | |||||
| GE | Long-term supply arrangement, associated services | BHGE LLC | ||||||
| Related Party Transaction [Line Items] | ||||||
| Related party transaction, term | 20 years | |||||
| GE | Operations and pricing levels, control upgrade services | ||||||
| Related Party Transaction [Line Items] | ||||||
| Related party transaction, term | 4 years | |||||
| Corporate Joint Venture [Member] | Joint venture, GE aero-derivative gas turbine products and services | ||||||
| Related Party Transaction [Line Items] | ||||||
| Related party transaction | $ 60.0 | |||||
| Related Party Transaction, Joint Venture Ownership Percentage | 50.00% | |||||
| Forecast | GE | Industrial Steam Turbine (IST) sale agreement with GE | BHGE LLC | ||||||
| Related Party Transaction [Line Items] | ||||||
| Due to Affiliate | $ 13.0 | |||||
| Angola bonds | GE | Related party amount, due to related party | ||||||
| Related Party Transaction [Line Items] | ||||||
| Investment securities | $ 144.0 | 149.0 | ||||
| Related parties | ||||||
| Related Party Transaction [Line Items] | ||||||
| Accounts payable, related party | 635.0 | 653.0 | ||||
| Current receivables | 718.0 | 746.0 | ||||
| Related parties | Baker Hughes, a GE Company (BHGE) | ||||||
| Related Party Transaction [Line Items] | ||||||
| Accounts payable, related party | $ 83.0 | $ 93.0 | ||||
Commitments and Contingencies - Narrative (Details) € in Millions, $ in Millions |
3 Months Ended | |||||
|---|---|---|---|---|---|---|
|
Mar. 18, 2019
USD ($)
|
Mar. 11, 2019
EUR (€)
|
Jul. 31, 2018
USD ($)
|
Aug. 03, 2016
EUR (€)
|
Mar. 31, 2019
EUR (€)
|
Mar. 31, 2019
USD ($)
|
|
| Loss Contingencies [Line Items] | ||||||
| Off-balance sheet arrangements | $ 3,800 | |||||
| Equipment failure | Pending litigation | Natural Gas Storage System in Northern Germany | ||||||
| Loss Contingencies [Line Items] | ||||||
| Value of alleged damages sought | € | € 142 | € 202 | ||||
| Marginal rate on annual prime rate (percent) | 5.00% | 5.00% | ||||
| Breach of contract | Pending litigation | International Engineering & Construction S.A. (IEC) | ||||||
| Loss Contingencies [Line Items] | ||||||
| Value of alleged damages sought | $ 591 | |||||
| Damage from fire | Pending litigation | INOES and Naphtachimie | ||||||
| Loss Contingencies [Line Items] | ||||||
| Value of alleged damages sought | € | € 250 | |||||
| Breach of fiduciary duties | Pending litigation | 2018 Transactions | ||||||
| Loss Contingencies [Line Items] | ||||||
| Repurchase of stock from GE | $ 1,500 | |||||
| GE sale of stock | $ 2,500 |
Commitments and Contingencies - Schedule of Product Warranties (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Movement in Standard Product Warranty Accrual [Roll Forward] | ||
| Beginning balance | $ 236 | $ 164 |
| Provisions | 3 | 10 |
| Expenditures | (5) | (7) |
| Other | 2 | 2 |
| Ending balance | $ 236 | $ 169 |
Restructuring, Impairment and Other - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Restructuring and Related Activities [Abstract] | ||
| Restructuring, impairment and other | $ 62 | $ 162 |
| Restructuring charges | 62 | 125 |
| Estimated remaining charges | $ 74 | |
| Restructuring, impairment and other charges | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Other asset impairment charges and foreign currency translation gain (loss), realized | $ 37 | |
Restructuring, Impairment and Other - Schedule of Restructuring Charges (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | $ 62 | $ 125 |
| Property, plant & equipment, net | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | 9 | 19 |
| Employee-related termination expenses | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | 44 | 83 |
| Asset relocation costs | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | 2 | 5 |
| Environmental remediation costs | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | 0 | 3 |
| Contract termination fees | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | 7 | 7 |
| Other incremental costs | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | 0 | 8 |
| Corporate | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | 5 | 17 |
| Oilfield Services | Operating segments | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | 17 | 59 |
| Oilfield Equipment | Operating segments | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | 18 | 12 |
| Turbomachinery & Process Solutions | Operating segments | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | 19 | 28 |
| Digital Solutions | Operating segments | ||
| Restructuring Cost and Reserve [Line Items] | ||
| Total restructuring charges | $ 3 | $ 9 |
| Label | Element | Value |
|---|---|---|
| Accounting Standards Update 2016-16 [Member] | ||
| Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 67,000,000 |
| Accounting Standards Update 2016-16 [Member] | Retained Earnings [Member] | ||
| Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 67,000,000 |
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