10-QPeriod: Q2 FY2017

Baker Hughes Co Quarterly Report for Q2 Ended Jun 30, 2017

Filed July 28, 2017For Securities:BKR

Summary

This 10-Q filing for Baker Hughes, a GE Company, covers the period ending June 30, 2017. It is important to note that the financial statements presented are for a "shell company" and do not reflect the operational results of the combined Baker Hughes and GE Oil & Gas (GE O&G) businesses. The significant event for investors during this period was the impending completion of the merger between Baker Hughes and GE O&G, which was finalized on July 3, 2017, shortly after the reporting period's end. The filing primarily details the formation of the new entity, Baker Hughes, a GE Company (BHGE), and the subsequent transactions that combined Baker Hughes' operations with GE O&G. Investors should focus on the "Subsequent Events" section (Note 6) for details on the merger's closing, the new ownership structure (GE holding approximately 62.5% and former Baker Hughes shareholders holding 37.5%), and the Special Dividend of $17.50 per share paid to former Baker Hughes shareholders. The report also mentions a settlement in principle for a class-action lawsuit challenging the merger, which was resolved with additional disclosures.

Financial Highlights

32 data points
Beta

Revenue

$3.01B

17.9% Gross Margin

Net Income

$0.00

EPS (Diluted)

$0.00

Total Assets

$0.00

Cash & Equivalents

$0.00

Free Cash Flow

-$43.00M

Financial Statements
Beta
Revenue$3.01B
Cost of Revenue$1.94B
Gross Profit$539.00M
R&D Expenses$0
SG&A Expenses$461.00M
Operating Expenses$3.08B
Operating Income-$66.00M
Net Income$0
Shares Outstanding (Basic)100

Key Highlights

  • 1The financial statements for the period ending June 30, 2017, represent a "shell company" and do not include the operating results of the combined Baker Hughes and GE O&G businesses.
  • 2The merger between Baker Hughes and GE O&G was completed on July 3, 2017, subsequent to the reporting period.
  • 3The combined entity, Baker Hughes, a GE Company (BHGE), is now structured with GE holding approximately 62.5% and former Baker Hughes shareholders holding approximately 37.5%.
  • 4Former Baker Hughes shareholders received a special one-time cash dividend of $17.50 per share upon completion of the transaction.
  • 5GE contributed $7.4 billion in cash to fund substantially all of the Special Dividend.
  • 6A class-action lawsuit filed by Baker Hughes stockholders challenging the merger agreement was settled in principle, with the company making additional disclosures.
  • 7The accounting for the business combination is preliminary and will be further detailed in future filings, with GE O&G treated as the acquirer for accounting purposes.

Frequently Asked Questions

The financial statements presented in this 10-Q for the period ending June 30, 2017, reflect only the activities of a 'shell company' (Baker Hughes, a GE Company, and its subsidiary) prior to the completion of the merger with GE Oil & Gas. Therefore, these statements do not show any operational revenues, expenses, or net income from the actual combined businesses.

The merger, referred to as 'the Transactions,' was officially closed on July 3, 2017, which is shortly after the end of the reporting period covered by this 10-Q (June 30, 2017).

Following the completion of the transactions on July 3, 2017, General Electric (GE) holds an approximate 62.5% controlling interest in the combined entity. Former Baker Hughes shareholders hold approximately 37.5% of the economic interest through their ownership of Class A Common Stock in the new company.

Yes, former Baker Hughes shareholders were entitled to receive a special one-time cash dividend of $17.50 per share, paid by the company to holders of record of its Class A Common Stock immediately after the completion of the transactions. GE contributed $7.4 billion to fund substantially all of this dividend.