- Orders of $6.8 billion for the quarter, up 3% sequentially and
up 51% year-over-year.
- Revenue of $4.8 billion for the quarter, down 12% sequentially
and up 1% year-over-year.
- GAAP operating income of $279 million for the quarter, down 51%
sequentially and up 70% year-over-year.
- Adjusted operating income (a non-GAAP measure) of $348 million
for the quarter, down 39% sequentially and up 29%
year-over-year.
- Adjusted EBITDA* (a non-GAAP measure) of $625 million for the
quarter, down 26% sequentially and up 11% year-over-year.
- GAAP earnings per share of $0.08 for the quarter which included
$0.07 per share of adjusting items. Adjusted earnings per share (a
non-GAAP measure) was $0.15.
- Cash flows generated from operating activities were $72 million
for the quarter. Free cash flow (a non-GAAP measure) for the
quarter was $(105) million.
The Company presents its financial results in accordance with
GAAP. However, management believes that using additional non-GAAP
measures will enhance the evaluation of the profitability of the
Company and its ongoing operations. Please see reconciliations in
the section entitled "Reconciliation of GAAP to non-GAAP Financial
Measures." Certain columns and rows in our tables and financial
statements may not sum up due to the use of rounded numbers.
*Adjusted EBITDA (a non-GAAP measure) is defined as operating
income (loss) excluding depreciation & amortization and
operating income adjustments.
Baker Hughes Company (Nasdaq: BKR) ("Baker Hughes" or the
"Company") announced results today for the first quarter of
2022.
Three Months Ended
Variance
March 31,
December 31,
March 31,
Year-over-
(in millions except per share amounts)
2022
2021
2021
Sequential
year
Orders
$
6,837
$
6,656
$
4,541
3%
51%
Revenue
4,835
5,485
4,782
(12)%
1%
Operating income
279
574
164
(51)%
70%
Adjusted operating income (non-GAAP)
348
571
270
(39)%
29%
Adjusted EBITDA (non-GAAP)
625
844
562
(26)%
11%
Net income (loss) attributable to Baker
Hughes
72
294
(452
)
(76)%
F
Adjusted net income (non-GAAP)
attributable to Baker Hughes
145
224
91
(35)%
60%
EPS attributable to Class A
shareholders
0.08
0.32
(0.61
)
(77)%
F
Adjusted EPS (non-GAAP) attributable to
Class A shareholders
0.15
0.25
0.12
(38)%
26%
Cash flow from operating activities
72
773
678
(91)%
(89)%
Free cash flow (non-GAAP)
(105
)
645
498
U
U
"F" is used in most instances when variance is above 100%.
Additionally, "U" is used in most instances when variance is below
(100)%.
“Our first quarter results reflect operating in a very volatile
market environment during the first few months of 2022. On the
positive side, we recorded strong orders from TPS as the LNG order
cycle continues to unfold. However, we did see some challenges in
other parts of the business, which continue to see pressures from
broader global supply chain constraints, as well as some impact
from the recent geopolitical events. I would like to thank our team
for their hard work and commitment to deliver for our customers and
continue to execute our strategy,” said Lorenzo Simonelli, Baker
Hughes chairman and chief executive officer.
“As we look ahead to the rest of 2022, we see a favorable oil
and gas price backdrop but also a dynamic operating environment.
The recent and unfortunate geopolitical events are exacerbating
several trends, including broad-based inflation and supply
pressures for key materials, commodities and labor. Despite some of
the challenges, we are optimistic on the outlook across both of our
core business areas and excited about the new energy investments we
are making for Baker Hughes. We believe that we are well positioned
to benefit from an extended cyclical recovery in upstream oil &
gas and longer-term structural growth trends in LNG, new energy and
industrial asset management.
“Baker Hughes remains committed to helping deliver energy
globally in a safe, clean and reliable manner. We also remain
committed to a net-zero future and leadership in the energy
transition, while we will continue to perform for shareholders,”
concluded Simonelli.
Quarter Highlights
Supporting our Customers
The OFS segment secured multiple well construction contracts
with a leading national oil company in the Middle East. Baker
Hughes will provide the full scope of technologies from its
Integrated Well Services and Solutions (IWSS) offering, including
drill bits, directional drilling and logging, drilling fluids, and
completion products.
OFE secured a contract in Asia to provide subsea wellhead and
subsea production systems as well as related services, including 12
subsea trees, for a deepwater gas field. The project is critical to
support natural gas development in the region.
OFE secured multiple subsea equipment contracts to support the
recently-discovered offshore Baleine field in Ivory Coast. The
contract awards include subsea production systems and offshore
equipment as well as flexible flowline and riser systems and
connectors. The contract will be executed as a fast-track project
using standardized equipment designs to save cost and time, and it
is the first project in the country for OFE’s Subsea Production
Systems (SPS) product line.
TPS secured a major contract from Venture Global LNG for the
first phase of the Plaquemines LNG project in Louisiana. Baker
Hughes will provide an LNG system, including 24 modularized
compression trains, as well as field services to assist in
commissioning the supplied equipment. The contract was awarded
under the companies’ master equipment supply agreement to provide
70 million tons per annum (MTPA) of LNG production capacity, and
builds on a 2021 award for Baker Hughes to provide the power
generation and electrical distribution equipment for the power
island of Plaquemines LNG.
TPS received an order for advanced gas turbine generator
equipment for Air Products’ upcoming net-zero hydrogen energy
complex in Alberta, Canada. The order is part of the companies’
previously announced hydrogen collaboration framework in 2021, and
TPS will supply NovaLT16 turbines which will run on 100%
hydrogen.
The DS segment saw continued interest in its condition
monitoring systems and services in the renewable energy sector. The
Bently Nevada product line secured a multi-year agreement with a
major wind turbine manufacturer, providing remote monitoring &
diagnostic services for 175 wind turbines to help lower repair
costs and minimize downtime. Bently Nevada also secured a contract
with a renewable power customer in Australia for ARMS Reliability’s
consulting services to optimize industrial assets at a major
hydropower generation station.
Executing on Priorities
In April, the Company invested in HIF Global, a world leader in
eFuels development, to help fund expansion of HIF’s decarbonization
business. Baker Hughes’ equity investment is joined by similar
investments from Porsche AG, EIG, AME, and Gemstone Investments,
and it will be used to develop carbon-neutral eFuels projects in
the U.S., Chile and Australia.
Also in April, Baker Hughes acquired Mosaic Materials, a growth
stage technology company. Mosaic is focused on developing a
proprietary direct air capture technology using Metal-Organic
Framework (MOF) materials that can be used to separate carbon
dioxide (CO2) from gas mixtures across a variety of applications.
Baker Hughes will draw from its existing advanced capabilities
including modular design and material science to develop and scale
Mosaic’s innovative technology. This will enhance the Company’s
carbon capture, utilization and storage portfolio, enabling direct
air capture with higher efficiency and lower total cost of
ownership.
TPS announced a strategic partnership with, and invested in, NET
Power to advance the technical and commercial deployment of NET
Power’s low-cost, electrical power system that generates no
atmospheric emissions and inherently capture all CO2. Baker Hughes
will apply its advanced TPS technology to develop supercritical CO2
turboexpanders and other critical pumping and compression
technology for NET Power’s plants, as well as bring its systems
integration and process experience to accelerate commercial
deployment.
TPS continued to gain traction with its NovaLT gas turbine
technology for a broad range of industrial and energy applications.
TPS secured a contract with TERNA in Greece to provide
hydrogen-ready turbomachinery technology for a new compression
station of the Greek Natural Gas Transmission System. The contract
includes three compression trains for a total of three NovaLT12
turbines and three PCL compressors. The technology has been
configured to support the compression station’s capabilities to
transport up to 10% hydrogen and is expected to enter operation in
2024.
OFS signed an agreement to acquire Altus Intervention, a leading
international provider of well intervention services and down-hole
oil & gas technology with 40 years of industry experience. The
acquisition complements Baker Hughes’ existing portfolio of
oilfield technologies and integrated solutions by enhancing the
Company's life-of-well capabilities as operators look to improve
efficiencies from mature fields. The transaction is expected to
close in the second half of 2022.
OFS announced the formation of a new chemicals joint venture
(JV) in Saudi Arabia with Dussur, an affiliate of Aramco and SABIC.
The JV will utilize Baker Hughes' existing Oilfield &
Industrial Chemicals (OIC) product line footprint in the region,
enhancing efficiencies between the Company, suppliers and customers
while lowering operating expenses and increasing locally sourced
materials. Baker Hughes will contribute its existing OIC
infrastructure, personnel, and contracts within Saudi Arabia for
the JV.
OFS announced an investment in California-based geothermal
innovator GreenFire Energy. The companies will collaborate on
bringing the first integrated Advanced Geothermal Systems solution
to the market, as well as partnering on project feasibility
analyses, system installations, and global project
developments.
DS saw increased traction in its industrial asset management
(IAM) solutions. The Bently Nevada product line secured a
multi-year contract with ACELEN in Brazil to implement the ARMS
Reliability OnePM solution to improve management, enhance
performance, and reduce maintenance costs at a major refinery.
Leading with Innovation
Baker Hughes advanced its Industrial Asset Management strategy
by announcing a collaboration with Accenture, C3 AI, and Microsoft
to develop IAM solutions for clients. The collaboration will focus
on creating and deploying Baker Hughes IAM solutions to improve the
safety, efficiency, and emissions profile of industrial machines,
field equipment, and other physical assets. The solutions will be
intended for industries where we play today, including oil and gas,
renewable energy, thermal power generation, metals and mining,
chemicals, and pulp and paper.
TPS was awarded a contract to support ethylene production for
INEOS’ Project One in Belgium, one of the most energy-efficient and
sustainable olefin complexes in Europe. Baker Hughes will supply
three large centrifugal compressor trains, driven by steam turbines
for cracked gas, ethylene refrigerant and propylene refrigerant
compression trains. The contract is one of the largest projects
ever for TPS in the petrochemical segment with an annual nameplate
capacity of 1.45 million tons of ethylene. The Project One plant
aims to have the lowest carbon footprint in the region, also
leveraging hydrogen generated during production to be utilized as
fuel in addition to renewable energy.
Consolidated Results by
Reporting Segment
Consolidated Orders by Reporting
Segment
(in millions)
Three Months Ended
Variance
March 31,
December 31,
March 31,
Year-over-
Consolidated segment orders
2022
2021
2021
Sequential
year
Oilfield Services
$
2,531
$
2,567
$
2,200
(1)%
15%
Oilfield Equipment
739
510
345
45%
F
Turbomachinery & Process Solutions
3,000
2,974
1,447
1%
F
Digital Solutions
567
605
549
(6)%
3%
Total
$
6,837
$
6,656
$
4,541
3%
51%
Orders for the quarter were $6,837 million, up 3% sequentially
and up 51% year-over-year. The sequential increase was a result of
higher order intake in Oilfield Equipment, and Turbomachinery &
Process Solutions, partially offset by a reduction in Digital
Solutions and Oilfield Services. Sequentially, equipment orders
were up 17% and service orders were down 11%.
Year-over-year, the increase in orders was a result of higher
order intake in all segments. Year-over-year equipment orders were
up $2,032 million, over 100% and service orders were up $264
million, or 10%.
The Company's total book-to-bill ratio in the quarter was 1.4;
the equipment book-to-bill ratio in the quarter was 1.9.
Remaining Performance Obligations (RPO) in the first quarter
ended at $25.8 billion, an increase of $2.3 billion from the fourth
quarter of 2021. Equipment RPO was $9.9 billion, up 20%. Services
RPO was $15.9 billion, up 4% sequentially.
Consolidated Revenue by Reporting
Segment
(in millions)
Three Months Ended
Variance
March 31,
December 31,
March 31,
Year-over-
Consolidated segment revenue
2022
2021
2021
Sequential
year
Oilfield Services
$
2,489
$
2,566
$
2,200
(3)%
13%
Oilfield Equipment
528
619
628
(15)%
(16)%
Turbomachinery & Process Solutions
1,345
1,742
1,485
(23)%
(9)%
Digital Solutions
474
558
470
(15)%
1%
Total
$
4,835
$
5,485
$
4,782
(12)%
1%
Revenue for the quarter was $4,835 million, a decrease of 12%,
sequentially. The decrease in revenue was driven primarily by lower
volume in all segments.
Compared to the same quarter last year, revenue was up 1%,
driven primarily by higher volume in Oilfield Services, partially
offset by lower volume in Oilfield Equipment and Turbomachinery
& Process Solutions.
Consolidated Operating Income by
Reporting Segment
(in millions)
Three Months Ended
Variance
March 31,
December 31,
March 31,
Year-over-
Segment operating income
2022
2021
2021
Sequential
year
Oilfield Services
$
221
$
256
$
143
(14)%
54%
Oilfield Equipment
(8
)
23
4
U
U
Turbomachinery & Process Solutions
226
346
207
(35)%
9%
Digital Solutions
15
51
24
(71)%
(38)%
Total segment operating income
453
676
379
(33)%
20%
Corporate
(105
)
(106
)
(109
)
1%
4%
Restructuring, impairment & other
(61
)
11
(80
)
U
24%
Separation related
(9
)
(8
)
(27
)
(15)%
68%
Operating income
279
574
164
(51)%
70%
Adjusted operating income*
348
571
270
(39)%
29%
Depreciation & amortization
277
273
292
1%
(5)%
Adjusted EBITDA*
$
625
$
844
$
562
(26)%
11%
*Non-GAAP measure.
"F" is used in most instances when variance is above 100%.
Additionally, "U" is used in most instances when variance is below
(100)%.
On a GAAP basis, operating income for the first quarter of 2022
was $279 million. Operating income decreased $296 million
sequentially and increased $115 million year-over-year. Total
segment operating income was $453 million for the first quarter of
2022, down 33% sequentially and up 20% year-over-year.
Adjusted operating income (a non-GAAP measure) for the first
quarter of 2022 was $348 million, which excludes adjustments
totaling $70 million before tax. A complete list of the adjusting
items and associated reconciliation from GAAP has been provided in
Table 1a in the section entitled “Reconciliation of GAAP to
non-GAAP Financial Measures.” Adjusted operating income for the
first quarter of 2022 was down 39% sequentially, driven by lower
volume and margin contraction in all segments. Adjusted operating
income was up 29% year-over-year driven by volume and margin
expansion in Oilfield Services and margin expansion in
Turbomachinery & Process Solutions, partially offset by lower
volume in Oilfield Equipment and margin contraction in Digital
Solutions.
Depreciation and amortization for the first quarter of 2022 was
$277 million.
Adjusted EBITDA (a non-GAAP measure) for the first quarter of
2022 was $625 million, which excludes adjustments totaling $70
million before tax. See Table 1b in the section entitled
“Reconciliation of GAAP to non-GAAP Financial Measures.” Adjusted
EBITDA for the first quarter was down 26% sequentially and up 11%
year-over-year.
Corporate costs were $105 million in the first quarter of 2022,
down 1% sequentially and down 4% year-over-year.
Other Financial Items
Income tax expense in the first quarter of 2022 was $107
million.
Other non-operating loss in the first quarter of 2022 was $28
million. Included in other non-operating loss are gains from the
change in fair value of our investment in ADNOC Drilling, and
losses from the change in fair value of our investment in C3
AI.
GAAP diluted earnings per share was $0.08. Adjusted diluted
earnings per share was $0.15. Excluded from adjusted diluted
earnings per share were all items listed in Table 1a as well as the
"other adjustments (non-operating)" found in Table 1c in the
section entitled "Reconciliation of GAAP to non-GAAP Financial
Measures."
Cash flow from operating activities was $72 million for the
first quarter of 2022. Free cash flow (a non-GAAP measure) for the
quarter was $(105) million. A reconciliation from GAAP has been
provided in Table 1d in the section entitled "Reconciliation of
GAAP to non-GAAP Financial Measures."
Capital expenditures, net of proceeds from disposal of assets,
were $177 million for the first quarter of 2022.
Results by Reporting Segment
The following segment discussions and variance explanations are
intended to reflect management's view of the relevant comparisons
of financial results on a sequential or year-over-year basis,
depending on the business dynamics of the reporting segments.
Oilfield Services
(in millions)
Three Months Ended
Variance
March 31,
December 31,
March 31,
Year-over-
Oilfield Services
2022
2021
2021
Sequential
year
Revenue
$
2,489
$
2,566
$
2,200
(3)%
13%
Operating income
$
221
$
256
$
143
(14)%
54%
Operating income margin
8.9
%
10.0
%
6.5
%
(1.1)pts
2.3pts
Depreciation & amortization
$
201
$
193
$
201
4%
—%
EBITDA*
$
422
$
449
$
344
(6)%
23%
EBITDA margin*
16.9
%
17.5
%
15.6
%
(0.6)pts
1.3pts
Oilfield Services (OFS) revenue of $2,489 million for the first
quarter decreased by $77 million, or 3%, sequentially.
North America revenue was $786 million, up 6% sequentially.
International revenue was $1,703 million, a decrease of 7%
sequentially, driven by lower revenues in Europe, Russia Caspian,
Latin America, and the Middle East, partially offset by higher
revenues in Sub Saharan Africa.
Segment operating income before tax for the quarter was $221
million. Operating income for the first quarter was down $36
million, or 14% sequentially, primarily driven by lower volume, and
less favorable mix.
Oilfield Equipment
(in millions)
Three Months Ended
Variance
March 31,
December 31,
March 31,
Year-over-
Oilfield Equipment
2022
2021
2021
Sequential
year
Orders
$
739
$
510
$
345
45%
F
Revenue
$
528
$
619
$
628
(15)%
(16)%
Operating income (loss)
$
(8
)
$
23
$
4
U
U
Operating income margin
(1.5
)%
3.8
%
0.7
%
(5.3)pts
(2.2)pts
Depreciation & amortization
$
21
$
22
$
32
(8)%
(37)%
EBITDA*
$
13
$
46
$
37
(73)%
(66)%
EBITDA margin*
2.4
%
7.4
%
5.8
%
(5)pts
(3.5)pts
Oilfield Equipment (OFE) orders of $739 million were up $394
million, over 100% year-over-year, driven by higher order intake in
Subsea Production Systems, Flexibles, and Services, partially
offset by the removal of Subsea Drilling Services from consolidated
OFE operations. Equipment orders were up $403 million, or over
200%, and services orders were down $9 million, or 6%
year-over-year.
*Non-GAAP measure.
OFE revenue of $528 million for the quarter decreased $100
million, or 16%, year-over-year. The decrease was driven by lower
volume in Subsea Production Systems and Surface Pressure Control
Projects, and from the removal of Subsea Drilling Services from
consolidated OFE operations. These decreases were partially offset
by higher volume in Flexibles and Services.
Segment operating loss before tax for the quarter was $8
million, a decline of $12 million year-over-year, primarily driven
by lower volume.
Turbomachinery & Process
Solutions
(in millions)
Three Months Ended
Variance
March 31,
December 31,
March 31,
Year-over-
Turbomachinery & Process
Solutions
2022
2021
2021
Sequential
year
Orders
$
3,000
$
2,974
$
1,447
1%
F
Revenue
$
1,345
$
1,742
$
1,485
(23)%
(9)%
Operating income
$
226
$
346
$
207
(35)%
9%
Operating income margin
16.8
%
19.9
%
13.9
%
(3.1)pts
2.8pts
Depreciation & amortization
$
29
$
30
$
30
(3)%
(4)%
EBITDA*
$
255
$
375
$
237
(32)%
7%
EBITDA margin*
18.9
%
21.6
%
16.0
%
(2.6)pts
3pts
Turbomachinery & Process Solutions (TPS) orders of $3,000
million were up $1,553 million, over 100% year-over-year. Equipment
orders were up $1,486 million, over 200% and service orders were up
$67 million, or 8%.
TPS revenue of $1,345 million for the quarter decreased $140
million, or 9%, year-over-year. The decrease was driven by lower
equipment and projects revenue, partially offset by higher
services, pumps and valves volume. Equipment revenue in the quarter
represented 39% of TPS revenue, and service revenue represented 61%
of TPS revenue.
Segment operating income before tax for the quarter was $226
million, up $19 million, or 9%, year-over-year. The increase was
driven primarily by favorable mix as a result of higher services
revenue and cost productivity.
*Non-GAAP measure.
Digital Solutions
(in millions)
Three Months Ended
Variance
March 31,
December 31,
March 31,
Year-over-
Digital Solutions
2022
2021
2021
Sequential
year
Orders
$
567
$
605
$
549
(6)%
3%
Revenue
$
474
$
558
$
470
(15)%
1%
Operating income
$
15
$
51
$
24
(71)%
(38)%
Operating income margin
3.2
%
9.2
%
5.2
%
(6)pts
(2)pts
Depreciation & amortization
$
22
$
22
$
21
(3)%
1%
EBITDA*
$
37
$
73
$
46
(50)%
(20)%
EBITDA margin*
7.7
%
13.1
%
9.7
%
(5.4)pts
(2)pts
Digital Solutions (DS) orders of $567 million were up $18
million, or 3%, year-over-year, driven by higher order intake in
the Waygate Technologies and Bently Nevada businesses, partially
offset by lower order intake in the Nexus Controls, Process and
Pipeline Services, and Precision Sensors and Instrumentation
businesses.
DS revenue of $474 million for the quarter increased $4 million,
or 1%, year-over-year, primarily driven by higher volume in the
Precision Sensors and Instrumentation and Waygate Technologies
businesses, partially offset by lower volume in the Process and
Pipelines Services, Nexus Controls, and Bently Nevada
businesses.
Segment operating income before tax for the quarter was $15
million, down $9 million, or 38%, year-over-year. The decrease
year-over-year was primarily driven by lower cost productivity and
inflationary pressure.
*Non-GAAP measure.
Reconciliation of GAAP
to non-GAAP Financial Measures
Management provides non-GAAP financial measures because it
believes such measures are widely accepted financial indicators
used by investors and analysts to analyze and compare companies on
the basis of operating performance and liquidity, and that these
measures may be used by investors to make informed investment
decisions.
Table 1a. Reconciliation of GAAP and
Adjusted Operating Income
Three Months Ended
March 31,
December 31,
March 31,
(in millions)
2022
2021
2021
Operating income (GAAP)
$
279
$
574
$
164
Separation related
9
8
27
Restructuring, impairment & other
61
(11
)
80
Total operating income adjustments
70
(3
)
106
Adjusted operating income (non-GAAP)
$
348
$
571
$
270
Table 1a reconciles operating income, which is the directly
comparable financial result determined in accordance with Generally
Accepted Accounting Principles (GAAP), to adjusted operating income
(a non-GAAP financial measure). Adjusted operating income excludes
the impact of certain identified items.
Table 1b. Reconciliation of Net Income
(Loss) Attributable to Baker Hughes to EBITDA and Adjusted
EBITDA
Three Months Ended
March 31,
December 31,
March 31,
(in millions)
2022
2021
2021
Net income (loss) attributable to Baker
Hughes (GAAP)
$
72
$
294
$
(452
)
Net income (loss) attributable to
noncontrolling interests
8
42
(153
)
Provision for income taxes
107
352
69
Interest expense, net
64
95
74
Other non-operating (income) loss, net
28
(208
)
626
Operating income
279
574
164
Depreciation & amortization
277
273
292
EBITDA (non-GAAP)
555
847
456
Total operating income adjustments (1)
70
(3
)
106
Adjusted EBITDA (non-GAAP)
$
625
$
844
$
562
(1)
See Table 1a for the identified adjustments to operating
income.
Table 1b reconciles net income (loss) attributable to Baker
Hughes, which is the directly comparable financial result
determined in accordance with GAAP, to EBITDA (a non-GAAP financial
measure). Adjusted EBITDA (a non-GAAP financial measure) excludes
the impact of certain identified items.
Table 1c. Reconciliation of Net Income
(Loss) Attributable to Baker Hughes to Adjusted Net Income
Attributable to Baker Hughes
Three Months Ended
March 31,
December 31,
March 31,
(in millions, except per share
amounts)
2022
2021
2021
Net income (loss) attributable to Baker
Hughes (GAAP)
$
72
$
294
$
(452
)
Total operating income adjustments (1)
70
(3
)
106
Other adjustments (non-operating) (2)
19
(77
)
663
Tax on total adjustments
(12
)
1
(33
)
Total adjustments, net of income tax
77
(79
)
736
Less: adjustments attributable to
noncontrolling interests
3
(9
)
193
Adjustments attributable to Baker
Hughes
74
(70
)
543
Adjusted net income attributable to Baker
Hughes (non-GAAP)
$
145
$
224
$
91
Denominator:
Weighted-average shares of Class A common
stock outstanding diluted
948
906
746
Adjusted earnings per Class A share -
diluted (non-GAAP)
$
0.15
$
0.25
$
0.12
(1)
See Table 1a for the identified adjustments to operating
income.
(2)
1Q'22 and 4Q'21 include a gain from the change in fair value of
our investment in ADNOC Drilling, partially offset by a loss from
the change in fair value of our investment in C3 AI. 1Q'21
primarily due to the loss on our investment in C3 AI, partially
offset by the reversal of accruals due to the settlement of certain
legal matters.
Table 1c reconciles net income (loss) attributable to Baker
Hughes, which is the directly comparable financial result
determined in accordance with GAAP, to adjusted net income
attributable to Baker Hughes (a non-GAAP financial measure).
Adjusted net income attributable to Baker Hughes excludes the
impact of certain identified items.
Table 1d. Reconciliation of Cash Flow
From Operating Activities to Free Cash Flow
Three Months Ended
March 31,
December 31,
March 31,
(in millions)
2022
2021
2021
Cash flow from operating activities
(GAAP)
$
72
$
773
$
678
Add: cash used in capital expenditures,
net of proceeds from disposal of assets
(177
)
(129
)
(180
)
Free cash flow (non-GAAP)
$
(105
)
$
645
$
498
Table 1d reconciles net cash flows from operating activities,
which is the directly comparable financial result determined in
accordance with GAAP, to free cash flow (a non-GAAP financial
measure). Free cash flow is defined as net cash flows from
operating activities less expenditures for capital assets plus
proceeds from disposal of assets.
Financial Tables (GAAP)
Condensed Consolidated
Statements of Income (Loss)
(Unaudited)
Three Months Ended March
31,
(In millions, except per share
amounts)
2022
2021
Revenue
$
4,835
$
4,782
Costs and expenses:
Cost of revenue
3,865
3,924
Selling, general and administrative
621
587
Restructuring, impairment and other
61
80
Separation related
9
27
Total costs and expenses
4,556
4,618
Operating income
279
164
Other non-operating loss, net
(28
)
(626
)
Interest expense, net
(64
)
(74
)
Income (loss) before income taxes
187
(536
)
Provision for income taxes
(107
)
(69
)
Net income (loss)
80
(605
)
Less: Net income (loss) attributable to
noncontrolling interests
8
(153
)
Net income (loss) attributable to Baker
Hughes Company
$
72
$
(452
)
Per share amounts:
Basic and diluted income (loss) per Class
A common stock
$
0.08
$
(0.61
)
Weighted average shares:
Class A basic
938
740
Class A diluted
948
740
Cash dividend per Class A common stock
$
0.18
$
0.18
Condensed Consolidated
Statements of Financial Position
(Unaudited)
March 31,
December 31,
(In millions)
2022
2021
ASSETS
Current Assets:
Cash and cash equivalents
$
3,191
$
3,853
Current receivables, net
5,738
5,651
Inventories, net
4,151
3,979
All other current assets
1,627
1,582
Total current assets
14,707
15,065
Property, plant and equipment, less
accumulated depreciation
4,804
4,877
Goodwill
5,989
5,959
Other intangible assets, net
4,118
4,131
Contract and other deferred assets
1,671
1,598
All other assets
3,705
3,678
Total assets
$
34,994
$
35,308
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable
$
3,755
$
3,745
Current portion of long-term debt
35
40
Progress collections and deferred
income
3,481
3,232
All other current liabilities
1,871
2,111
Total current liabilities
9,142
9,128
Long-term debt
6,650
6,687
Liabilities for pensions and other
employee benefits
1,063
1,110
All other liabilities
1,692
1,637
Equity
16,447
16,746
Total liabilities and equity
$
34,994
$
35,308
Outstanding Baker Hughes Company
shares:
Class A common stock
985
909
Class B common stock
41
117
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Three Months Ended March
31,
(In millions)
2022
2021
Cash flows from operating activities:
Net income (loss)
$
80
$
(605
)
Adjustments to reconcile net income (loss)
to net cash flows from operating activities:
Depreciation and amortization
277
292
(Gain) loss on equity securities
(11
)
788
Working capital
(93
)
405
Other operating items, net
(181
)
(202
)
Net cash flows from operating
activities
72
678
Cash flows from investing activities:
Expenditures for capital assets, net of
proceeds from disposal of assets
(177
)
(180
)
Other investing items, net
(89
)
6
Net cash flows used in investing
activities
(266
)
(174
)
Cash flows from financing activities:
Net repayments of debt and other
borrowings
(11
)
(36
)
Dividends paid
(172
)
(131
)
Distributions to GE
(13
)
(56
)
Repurchase of Class A common stock
(236
)
—
Other financing items, net
(37
)
(32
)
Net cash flows used in financing
activities
(469
)
(255
)
Effect of currency exchange rate changes
on cash and cash equivalents
1
1
Increase (decrease) in cash and cash
equivalents
(662
)
250
Cash and cash equivalents, beginning of
period
3,853
4,132
Cash and cash equivalents, end of
period
$
3,191
$
4,382
Supplemental cash flows disclosures:
Income taxes paid, net of refunds
$
130
$
39
Interest paid
$
48
$
51
Supplemental Financial Information Supplemental financial
information can be found on the Company’s website at:
investors.bakerhughes.com in the Financial Information section
under Quarterly Results.
Conference Call and Webcast The Company has scheduled an
investor conference call to discuss management’s outlook and the
results reported in today’s earnings announcement. The call will
begin at 8:30 a.m. Eastern time, 7:30 a.m. Central time on
Wednesday, April 20, 2022, the content of which is not part of this
earnings release. The conference call will be broadcast live via a
webcast and can be accessed by visiting the Events and
Presentations page on the Company’s website at:
investors.bakerhughes.com. An archived version of the webcast will
be available on the website for one month following the
webcast.
Forward-Looking Statements This news release (and oral
statements made regarding the subjects of this release) may contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, (each a
“forward-looking statement”). The words “anticipate,” “believe,”
“ensure,” “expect,” “if,” “intend,” “estimate,” “project,”
“foresee,” “forecasts,” “predict,” “outlook,” “aim,” “will,”
“could,” “should,” “potential,” “would,” “may,” “probable,”
“likely,” and similar expressions, and the negative thereof, are
intended to identify forward-looking statements. There are many
risks and uncertainties that could cause actual results to differ
materially from our forward-looking statements. These
forward-looking statements are also affected by the risk factors
described in the Company’s annual report on Form 10-K for the
annual period ended December 31, 2021 and those set forth from time
to time in other filings with the Securities and Exchange
Commission (“SEC”). The documents are available through the
Company’s website at: www.investors.bakerhughes.com or through the
SEC’s Electronic Data Gathering and Analysis Retrieval (“EDGAR”)
system at: www.sec.gov. We undertake no obligation to publicly
update or revise any forward-looking statement.
Our expectations regarding our business outlook and business
plans; the business plans of our customers; oil and natural gas
market conditions; cost and availability of resources; economic,
legal and regulatory conditions, and other matters are only our
forecasts regarding these matters.
These forward-looking statements, including forecasts, may be
substantially different from actual results, which are affected by
many risks, along with the following risk factors and the timing of
any of these risk factors:
COVID-19 - The continued spread of the COVID-19 virus and
related uncertainties.
Economic and political conditions - the impact of worldwide
economic conditions; the effect that declines in credit
availability may have on worldwide economic growth and demand for
hydrocarbons; foreign currency exchange fluctuations and changes in
the capital markets in locations where we operate; and the impact
of government disruptions and sanctions.
Orders and RPO - our ability to execute on orders and RPO in
accordance with agreed specifications, terms and conditions and
convert those orders and RPO to revenue and cash.
Oil and gas market conditions - the level of petroleum industry
exploration, development and production expenditures; the price of,
volatility in pricing of, and the demand for crude oil and natural
gas; drilling activity; drilling permits for and regulation of the
shelf and the deepwater drilling; excess productive capacity; crude
and product inventories; liquefied natural gas supply and demand;
seasonal and other adverse weather conditions that affect the
demand for energy; severe weather conditions, such as tornadoes and
hurricanes, that affect exploration and production activities;
Organization of Petroleum Exporting Countries (“OPEC”) policy and
the adherence by OPEC nations to their OPEC production quotas.
Terrorism and geopolitical risks - war, military action,
terrorist activities or extended periods of international conflict,
particularly involving any petroleum-producing or consuming
regions, including Russia and Ukraine; labor disruptions, civil
unrest or security conditions where we operate; potentially
burdensome taxation, expropriation of assets by governmental
action; cybersecurity risks and cyber incidents or attacks;
epidemic outbreaks.
About Baker Hughes:
Baker Hughes (Nasdaq: BKR) is an energy technology company that
provides solutions for energy and industrial customers worldwide.
Built on a century of experience and conducting business in over
120 countries, our innovative technologies and services are taking
energy forward - making it safer, cleaner and more efficient for
people and the planet. Visit us at bakerhughes.com
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version on businesswire.com: https://www.businesswire.com/news/home/20220420005172/en/
Investor Relations
Jud Bailey +1 281-809-9088
investor.relations@bakerhughes.com
Media Relations
Thomas Millas +1 713-879-2862 thomas.millas@bakerhughes.com
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