01—Abstract
Summary
Summary of the 8-K filed March 25, 2025. Cited figures are marked; the original filing is the authoritative source.
On March 25, 2025, Baker Hughes (BKR) disclosed via Form 8-K (Item 7.01, Regulation FD) that it will change the presentation of its consolidated income statement starting with its Q1 2025 Form 10-Q.
The company will break out research and development costs as a separate line item, eliminate the operating income subtotal, and remove the non-operating (income) loss line. Costs previously in non-operating income (loss) will move into a renamed "Other (income) expense, net" line, and the restructuring caption (formerly "Restructuring, Impairment & Other") will now cover restructuring costs only. The company states these are presentation changes only and do not affect previously reported consolidated or segment results, so reported net income and revenue are unchanged.
The recast figures in Exhibit 99.1 show the effect on the reported lines. Net income attributable to Baker Hughes was $(601) million in FY2022, $1,943 milliona in FY2023, and $2,979 million in FY2024, the same as before the recast. Total revenue was $21,156 million, $25,506 million, and $27,829 million for those years.
Standalone R&D expense was $552 millionb in FY2022, $651 million in FY2023, and $643 million in FY2024. Because the operating income subtotal is removed, investors and analysts who model operating margin or track the old operating income line will need to rebuild that metric from the new line items, and comparisons with prior-period operating income will require the recast data. For investors, the main effect is greater transparency into R&D spending and a cleaner split between restructuring and other items.
The change is voluntary and affects how the income statement is laid out rather than the company's economics. Analysts should update their models to use the new line items, and the 10-Q for Q1 2025 will show the first reported results under the new structure. The filing says it should be read with the 2024 Form 10-K and the 2024 Forms 10-Q.
02—Key points
Key Highlights
- Baker Hughes will separately present research and development costs on its income statement starting with the Q1 2025 Form 10-Q, giving investors direct visibility into R&D spending (FY2024: $643 million).
- The operating income subtotal and the non-operating income (loss) line are being removed from the consolidated statements of income (loss).
- Costs previously in "Other non-operating (income) loss" are being reclassified into a combined "Other (income) expense, net" line (FY2024 recast: $(341) million).
- The "Restructuring, Impairment & Other" caption is renamed "Restructuring," with non-restructuring items moved to Other (income) expense, net (FY2024 restructuring falls from $301 million reported to $260 million recast).
- The company states the changes do not affect previously reported consolidated or segment results; FY2024 net income attributable to Baker Hughes remains $2,979 million and revenue remains $27,829 million.
- Historical recast data (FY2022–FY2024 and quarterly 2022–2024) is provided in unaudited Exhibit 99.1 so analysts can compare periods on the new basis.
- Because operating income is no longer reported as a subtotal, investors will need to rebuild operating margin and similar metrics from the new line items when comparing periods.
03—Questions
Frequently Asked Questions
Does this change affect Baker Hughes' reported earnings or revenue?
No. The company says the presentation changes do not affect previously reported consolidated or segment financial results in any period. Revenue ($27,829 million in FY2024) and net income attributable to Baker Hughes ($2,979 million in FY2024) are unchanged. Only the line-item grouping on the income statement changes.
Why is Baker Hughes making these changes?
The filing describes the changes as voluntary presentation changes but does not explain the rationale in detail. The main effects are that R&D spending becomes a separately reported line and that the non-operating and restructuring captions are simplified, which may make the income statement easier to compare with peers and easier to follow.
How much did Baker Hughes spend on R&D, and how will this disclosure change?
Under the recast, R&D costs were $552 million in FY2022, $651 million in FY2023, and $643 million in FY2024. Previously these costs were embedded in cost of sales and other lines. Separate presentation makes R&D spending directly visible on the face of the income statement.
When will the new presentation take effect, and where can investors find recast historical figures?
The new presentation will appear in the Form 10-Q for the quarter ending March 31, 2025. Retrospectively adjusted, unaudited historical figures for 2022 through 2024, including quarterly data, are in Exhibit 99.1 (the Financial Supplement) to this Form 8-K. The company says the Exhibit is furnished, not filed, and should be read with the 2024 Form 10-K and the 2024 Forms 10-Q.
04—Continue