Business Context and Reporting Period
This Form 8-K, dated April 5, 2018, is filed by Baker Hughes, a GE Company (BHGE). The filing serves as a Regulation FD disclosure to release supplemental financial information regarding the combined business results of GE Oil & Gas and Baker Hughes Incorporated. The data covers the four quarters of 2017, the full year 2017, and the full year 2016, presented on a pro forma basis as if the merger had occurred on the first day of all periods presented.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it references an attached Exhibit 99.1 which contains the detailed supplemental presentation. The filing notes that the adoption of new accounting standards had no cash impact and did not affect the economics of underlying customer contracts.
Material Changes and Accounting Updates
- Accounting Standard Adoption: On January 1, 2018, the Company adopted FASB ASU No. 2014-09 (Revenue from Contracts with Customers) and FASB ASU No. 2017-07 (Improving the Presentation of Net Periodic Pension Cost).
- Impact of ASU 2017-07: The adoption had an immaterial impact on operating income and adjusted operating income, with no impact on orders or revenues.
- Impact of ASU 2014-09: The cumulative effect is recognized in equity as of January 1, 2016. The standard has no cash impact.
- Pro Forma Presentation: Financial results for 2016 and 2017 are presented on a combined business basis to reflect the merger of GE Oil & Gas and Baker Hughes Incorporated.
Guidance, Outlook, and Risks
The filing contains standard forward-looking statement disclaimers, noting that actual results may differ materially due to risks and uncertainties. These risks are detailed in the Company's Form 10-K for the year ended December 31, 2017, and other SEC filings. The Company explicitly states it undertakes no obligation to publicly update or revise any forward-looking statements. The supplemental information includes non-GAAP financial measures which should be considered in addition to, not as a substitute for, GAAP measures.
Investor Verification Checklist
- Review Exhibit 99.1 for the specific numerical values of revenue, operating income, and cash flows for 2016 and 2017 on a combined basis.
- Verify the reconciliation between the non-GAAP measures presented in the supplemental disclosure and the GAAP financial statements.
- Consult the Form 10-K for the year ended December 31, 2017, for a comprehensive list of risk factors affecting forward-looking statements.
- Confirm the specific adjustments made to prior periods to reflect the pro forma merger of GE Oil & Gas and Baker Hughes Incorporated.