2.2.0.7 false Acquisitions 0202 - Disclosure - Acquisitions true false false false 1 USD false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Pure Standard http://www.xbrl.org/2003/instance pure xbrli 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 Acquisitions [Abstract] 0 bhi_AcquisitionsAbstract bhi false na duration Acquisitions. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string Acquisitions. false 3 ACQUISITIONS 1 us-gaap_BusinessCombinationDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div align="left" style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 2. ACQUISITIONS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>ACQUISITION OF BJ SERVICES</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On April 28, 2010, we acquired 100% of the outstanding common stock of BJ Services Company (including its successor “BJ Services”) in a cash and stock transaction valued at $6,897 million. BJ Services is a leading provider of pressure pumping and other oilfield services and was acquired to expand the product offerings of the Company. For the year ended September 30, 2009, BJ Services’ revenues were $4,122 million. They employed approximately 14,000 people and operated in over 50 countries. Revenues and net income of BJ Services from the acquisition date included in our consolidated condensed statement of operations for the three months ended September 30, 2010 were $1,403 million and $134 million, respectively, and for the nine months ended September 30, 2010 were $2,202 million and $164 million, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Pursuant to a final agreement with the Antitrust Division of the U.S. Department of Justice (“DOJ”) in connection with the governmental approval of the acquisition, we were required to divest two leased stimulation vessels (the <i>HR Hughes </i>and <i>Blue Ray</i>) and certain other assets used to perform sand control services in the U.S. Gulf of Mexico. Additionally, pursuant to a Hold Separate Stipulation and Order, the operation of our U.S. business and the U.S. business of BJ Services were required to be operated separately until these assets were divested. On August 30, 2010, we completed the sale of such assets for approximately $55 million in cash. Upon the completion of the sale, the Hold Separate Stipulation and Order terminated and we commenced to fully integrate BJ Services into Baker Hughes globally. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Consideration</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Under the terms of the acquisition agreement, BJ Services stockholders received $2.69 per share in cash and 0.40035 Baker Hughes shares of common stock for each BJ Services share of common stock they owned. In total, we paid $793 million in cash and issued 118 million shares valued at $6,048 million (based upon the closing price of our common stock on the acquisition date of $51.24). We also assumed all outstanding stock options held by BJ Services employees and directors. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The BJ Services stock options outstanding at closing were converted into Baker Hughes options at the conversion ratio. The estimated fair value associated with the Baker Hughes options issued in exchange for the BJ Services options was $58 million based on a Black-Scholes valuation model. All BJ Services stock options became fully vested and exercisable in accordance with pre-existing change-in-control provisions. Accordingly, $56 million of the estimated fair value was recorded as part of the consideration transferred, with the remaining $2 million recorded as an expense as of the date of the acquisition when all options vested and no further service was required. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Total consideration transferred in acquiring BJ Services is summarized as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash consideration paid: 295 million shares at $2.69 </div></td> <td> </td> <td align="right">$</td> <td align="right">793</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Equity consideration paid: 118 million shares valued $51.24 </div></td> <td> </td> <td> </td> <td align="right">6,048</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Fair value of BJ Services options assumed </div></td> <td> </td> <td> </td> <td align="right">56</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Fair value of consideration transferred </div></td> <td> </td> <td align="right">$</td> <td align="right">6,897</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Recording of Assets Acquired and Liabilities Assumed</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The transaction has been accounted for using the acquisition method of accounting which requires that, among other things, assets acquired and liabilities assumed be recorded at their fair values as of the acquisition date. The excess of the consideration transferred over those fair values is recorded as goodwill. We have not finalized the determination of the fair values of the assets acquired and liabilities assumed and therefore, the fair values set forth below are subject to adjustment once the valuations are completed. We will finalize these items as we obtain the information necessary to complete the analysis, and we expect to be substantially complete with this analysis during the fourth quarter of 2010. Under U.S. GAAP, companies have one year after an acquisition to finalize the acquisition accounting. The following table summarizes the provisional amounts recognized for assets acquired and liabilities assumed as of the acquisition date. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Estimated Fair Value</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Cash and cash equivalents </div></td> <td> </td> <td align="right">$</td> <td align="right">113</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Accounts receivable </div></td> <td> </td> <td> </td> <td align="right">954</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Inventories </div></td> <td> </td> <td> </td> <td align="right">425</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other current assets </div></td> <td> </td> <td> </td> <td align="right">123</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Property, plant and equipment </div></td> <td> </td> <td> </td> <td align="right">2,754</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Intangible assets </div></td> <td> </td> <td> </td> <td align="right">1,333</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Goodwill </div></td> <td> </td> <td> </td> <td align="right">4,192</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other long-term assets </div></td> <td> </td> <td> </td> <td align="right">36</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Liabilities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Liabilities for change in control and transaction fees </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(212</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Current liabilities </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(649</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Deferred income taxes and other tax liabilities </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1,419</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Debt </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(531</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Pension and other postretirement liabilities </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(146</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other long-term liabilities </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(76</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net Assets Acquired </div></td> <td> </td> <td align="right">$</td> <td align="right">6,897</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Property, plant and equipment (“PP&E”)</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     A step-up adjustment of $415 million was recorded to present the PP&E acquired at its estimated fair value. The preliminary weighted average useful life used to calculate depreciation of the step-up related to PPE is approximately six years. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Intangible assets</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We identified other intangible assets associated with pressure pumping and other services, including trade names, technology, in-process research and development (“IPR&D”), and customer relationships. We consider the BJ Services trade name to be an indefinite life intangible asset, which will not be amortized and will be subject to an annual impairment test. We have not finalized the determination of the estimated useful lives and methods to be used in calculating the amortization expense related to these intangible assets. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table summarizes the fair value estimates recorded for the identifiable intangible assets and their estimated useful lives: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Estimated Fair Value</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Estimated Useful Life</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Customer relationships </div></td> <td> </td> <td align="right">$</td> <td align="right">313</td> <td> </td> <td> </td> <td colspan="3" align="center">2-17 years</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Technology </div></td> <td> </td> <td> </td> <td align="right">449</td> <td> </td> <td> </td> <td colspan="3" align="center">5-15 years</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">BJ Services trade name </div></td> <td> </td> <td> </td> <td align="right">383</td> <td> </td> <td> </td> <td colspan="3" align="center">Indefinite</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other trade names </div></td> <td> </td> <td> </td> <td align="right">41</td> <td> </td> <td> </td> <td colspan="3" align="center">5-12 years</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">IPR&D </div></td> <td> </td> <td> </td> <td align="right">147</td> <td> </td> <td> </td> <td colspan="3" align="center">6-14 years</td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total Identifiable Intangible Assets </div></td> <td> </td> <td align="right">$</td> <td align="right">1,333</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Deferred taxes</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We provided deferred taxes and other tax liabilities as part of the acquisition accounting related to the estimated fair market value adjustments for acquired intangible assets and PP&E, as well as for uncertain tax positions taken in prior year tax returns. An adjustment of $1,227 million was recorded to present the deferred taxes and other tax liabilities at fair value. Included in the adjustment is deferred taxes of $650 million for the outside basis difference associated with shares in certain BJ Services foreign subsidiaries for which no taxes have been previously provided. We expect to reverse the outside basis difference primarily through repatriating earnings from those subsidiaries in lieu of permanently reinvesting them as well as through the reorganization of those subsidiaries. We are still assessing certain factors that impact the outside basis difference related to the BJ Services foreign subsidiaries, other deferred taxes and uncertain tax positions. The deferred tax liabilities and other tax liabilities will be revised after the assessment is finalized, which we expect to be substantially complete during the fourth quarter of 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Debt</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Our acquisition subsidiary assumed all of the obligations of BJ Services in respect of $250 million principal amount of 5.75% senior notes due June 2011 and $250 million principal amount of 6.00% senior notes due June 2018. A step-up adjustment of $34 million was recorded to present these notes at their estimated fair value. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Liabilities for pensions and other postretirement benefits</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We assumed several defined benefit pension plans covering certain employees primarily in the U.K., Norway and Canada. Additionally, we assumed a non-qualified supplemental executive retirement plan (“SERP”), as well as postretirement benefit plans that provide certain health care and life insurance benefits for retired employees, primarily in the United States, who meet specified age and service requirements. A step-up adjustment of $25 million was recorded to present these liabilities at their estimated fair value. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following is a summary of the funded position of the assumed BJ Services plans as of the acquisition date, as well as associated weighted-average assumptions used to determine benefit obligations: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other Postretirement</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Pension Benefit Plans</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Benefit Plans</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Projected benefit obligation </div></td> <td> </td> <td align="right">$</td> <td align="right">280</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">26</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Fair value of plan assets </div></td> <td> </td> <td> </td> <td align="right">160</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Net Unfunded Status </div></td> <td> </td> <td align="right">$</td> <td align="right">120</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">26</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Amounts recognized in the Consolidated Condensed Balance Sheet: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Liabilities for pensions and other postretirement benefits </div></td> <td> </td> <td align="right">$</td> <td align="right">120</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">26</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Weighted average assumption used to determine benefit obligations at the acquisition date and net periodic benefit cost from the acquisition date through December 31, 2010: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other Postretirement</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Pension Benefit Plans</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Benefit Plans</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Discount rate </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">5.24</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">6.18</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Rate of compensation increase </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">4.30</td> <td nowrap="nowrap">%</td> <td> </td> <td> </td> <td align="right">n/a</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Goodwill</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Goodwill of $4,192 million was recognized for this acquisition and is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. It specifically includes the expected synergies and other benefits that we believe will result from combining the operations of BJ Services with the operations of Baker Hughes and any intangible assets that do not qualify for separate recognition such as the assembled workforce. During the third quarter of 2010, we allocated the goodwill to our reporting units based on the provisional amounts recognized for the fair value of the assets acquired and liabilities assumed (See Note 9 — Goodwill and Intangible Assets). Goodwill in the amount of $43 million is deductible for tax purposes as a result of previous taxable acquisitions made by BJ Services. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Acquisition-Related Costs</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Acquisition-related costs are being expensed as incurred. They include expenses directly related to acquiring BJ Services and integration expenses incurred in combining the companies. These costs are classified as acquisition-related costs on our consolidated condensed statement of operations. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Pro Forma Impact of the Acquisition</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following unaudited supplemental pro forma results present consolidated information as if the acquisition had been completed as of January 1, 2010 and January 1, 2009. The pro forma results include: (i) the amortization associated with an estimate of the acquired intangible assets, (ii) interest expense associated with debt used to fund a portion of the acquisition and reduced interest income associated with cash used to fund a portion of the acquisition, (iii) the impact of certain fair value adjustments such as additional depreciation expense for adjustments to property, plant and equipment and reduction to interest expense for adjustments to debt, and (iv) costs directly related to acquiring BJ Services. The pro forma results do not include any potential synergies, cost savings or other expected benefits of the acquisition. Accordingly, the pro forma results should not be considered indicative of the results that would have occurred if the acquisition and related borrowings had been consummated as of January 1, 2009, or January 1, 2010 nor are they indicative of future results. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Three Months Ended</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Nine Months Ended</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2009</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2009</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Pro Forma</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Pro Forma</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Pro Forma</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Revenues </div></td> <td> </td> <td align="right">$</td> <td align="right">4,078</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3,110</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">11,480</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">9,941</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net income </div></td> <td> </td> <td align="right">$</td> <td align="right">255</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">31</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">493</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">290</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Basic net income per share </div></td> <td> </td> <td align="right">$</td> <td align="right">0.59</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">0.07</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1.14</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">0.68</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Diluted net income per share </div></td> <td> </td> <td align="right">$</td> <td align="right">0.59</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">0.07</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1.14</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">0.68</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>OTHER ACQUISITIONS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During the nine months ended September 30, 2010, we completed several other acquisitions having an aggregate purchase price of approximately $172 million, net of cash acquired of $5 million. As a result of these acquisitions, we recorded $96 million of goodwill, which is subject to final acquisition accounting adjustments. Pro forma results of operations for these acquisitions have not been presented because the effect of these acquisitions was not material to our consolidated condensed financial statements. </div> </div>  <!-- Begin Block Tagged Note false false false us-types:textBlockItemType textblock Description of a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. This element may be used as a single block of text to encapsulate the entire disclosure (including data and tables) regarding business combinations, including leverage buyout transactions (as applicable). Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141 -Paragraph 51, 52 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 88-16 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph 67-73 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph F4 -Subparagraph e -Appendix F false 1 2 false UnKnown UnKnown UnKnown false true