- -------------------------------------------------------------------------------
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
--- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
--- OF THE SECURITIES EXCHANGE ACT OF 1934
-----------------------------
Commission file number 1-9397
-----------------------------
BAKER HUGHES INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 76-0207995
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3900 Essex Lane, Houston, Texas 77027
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (713) 439-8600
-----------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at February 3, 1996
----- -------------------------------
Common Stock, $1.00 par value per share 142,554,000 shares
- -------------------------------------------------------------------------------
<PAGE>
BAKER HUGHES INCORPORATED
INDEX
Page
No.
----
Part I - Financial Information:
Consolidated Condensed Statements of Operations - Three Months
ended December 31, 1995 and 1994.................................. 2
Consolidated Condensed Statements of Financial Position
- December 31, 1995 and September 30, 1995........................ 3
Consolidated Condensed Statements of Cash Flows - Three months
ended December 31, 1995 and 1994.................................. 5
Notes to Consolidated Condensed Financial Statements.................. 6
Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................. 7
Part II - Other Information............................................... 14
-1-
<PAGE>
PART I. FINANCIAL INFORMATION
BAKER HUGHES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended
December 31,
1995 1994
REVENUES: --------- ---------
Sales............................................... $ 464,955 $ 411,907
Services and rentals................................ 229,742 195,010
--------- ---------
Total revenues.................................. 694,697 606,917
COSTS AND EXPENSES: --------- ---------
Cost of sales....................................... 267,336 241,816
Cost of services and rentals........................ 118,299 95,059
Research and engineering............................ 21,408 20,087
Marketing and field service......................... 161,239 144,949
General and administrative.......................... 48,218 44,316
Amortization of goodwill and other intangibles...... 7,393 7,877
--------- ---------
Total costs and expenses........................ 623,893 554,104
--------- ---------
Operating income........................................ 70,804 52,813
Interest expense........................................ (15,427) (11,479)
Interest income......................................... 482 807
--------- ---------
Income before income taxes.............................. 55,859 42,141
Income taxes............................................ (23,461) (17,910)
--------- ---------
Income before cumulative effect of accounting change.... 32,398 24,231
Cumulative effect of accounting change -
Postemployment benefits (net of $7,861 income
tax benefit).................................... (14,598)
--------- ---------
Net income.............................................. $ 32,398 $ 9,633
========= =========
Per share of Common Stock:
Income before cumulative effect of accounting
change.......................................... $ .23 $ .15
Cumulative effect of accounting change.............. (.10)
--------- ---------
Net income.......................................... $ .23 $ .05
========= =========
Cash dividends per share of common stock................ $ .115 $ .115
========= =========
See accompanying notes to consolidated condensed financial statements.
-2-
<PAGE>
BAKER HUGHES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
(In thousands)
ASSETS
December 31, September 30,
1995 1995
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents....................... $ 8,026 $ 6,817
---------- ----------
Receivables - net............................... 755,285 709,588
---------- ----------
Inventories:
Finished goods.............................. 624,028 595,417
Work in process............................. 65,597 61,622
Raw materials............................... 66,328 70,743
---------- ----------
Total inventories....................... 755,953 727,782
---------- ----------
Deferred income taxes........................... 90,136 92,550
---------- ----------
Other current assets............................ 41,026 28,078
---------- ----------
Total current assets.................... 1,650,426 1,564,815
---------- ----------
PROPERTY - NET...................................... 567,999 575,059
---------- ----------
OTHER ASSETS:
Investments..................................... 90,464 92,474
Property held for disposal...................... 61,287 58,544
Other assets.................................... 88,420 103,321
Excess costs arising from acquisitions - net.... 764,461 772,378
---------- ----------
Total other assets...................... 1,004,632 1,026,717
---------- ----------
Total............................... $ 3,223,057 $ 3,166,591
========== ==========
See accompanying notes to consolidated condensed financial statements.
-3-
<PAGE>
BAKER HUGHES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, September 30,
1995 1995
---------- ----------
CURRENT LIABILITIES:
Accounts payable............................... $ 277,998 $ 304,689
Short-term borrowings and current portion of
long-term debt............................. 1,848 2,898
Accrued employee compensation and benefits..... 116,300 133,135
Income taxes................................... 39,396 28,445
Taxes other than income........................ 26,971 25,176
Accrued insurance.............................. 23,260 27,475
Accrued interest............................... 17,169 11,978
Other accrued liabilities...................... 41,178 46,335
---------- ----------
Total current liabilities.............. 544,120 580,131
---------- ----------
LONG-TERM DEBT..................................... 877,954 798,352
---------- ----------
DEFERRED INCOME TAXES.............................. 120,177 118,350
---------- ----------
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS........ 97,525 97,187
---------- ----------
OTHER LONG-TERM LIABILITIES........................ 58,221 58,965
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock................................... 142,426 142,237
Capital in excess of par value................. 1,345,115 1,342,317
Retained earnings.............................. 156,145 140,106
Cumulative foreign currency translation
adjustment................................. (115,049) (107,689)
Unrealized loss on securities available for
sale....................................... (3,577) (3,365)
---------- ----------
Total stockholders' equity............. 1,525,060 1,513,606
---------- ----------
Total.............................. $ 3,223,057 $ 3,166,591
========== ==========
See accompanying notes to consolidated condensed financial statements.
-4-
<PAGE>
BAKER HUGHES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
December 31,
1995 1994
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................................... $ 32,398 $ 9,633
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation and amortization of:
Property................................... 29,362 28,697
Other assets and debt discount............. 10,063 10,469
Loss(gain) on disposal of assets............... (6,632) 2,439
Foreign currency translation loss - net........ 2,909
Cumulative effect of accounting changes........ 14,598
Change in receivables.......................... (46,711) (33,953)
Change in inventories.......................... (29,693) 3,331
Change in accounts payable..................... (22,188) (12,055)
Changes in other assets and liabilities........ (19,848) (33,257)
-------- --------
Net cash flows from operating activities........... (50,340) (10,098)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions............................. (34,676) (25,681)
Proceeds from disposal of assets............... 23,856 5,408
-------- --------
Net cash flows from investing activities........... (10,820) (20,273)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) borrowings from commercial
paper and revolving credit facilities...... 76,941 (1,150)
Proceeds from exercised debenture purchase
warrants................................... 78,000
Proceeds from exercise of stock options
and stock purchase grants.................. 2,321 996
Dividends...................................... (16,359) (19,215)
-------- --------
Net cash flows from financing activities........... 62,903 58,631
-------- --------
Effect of exchange rate changes on cash............ (534) (484)
-------- --------
Increase in cash and cash equivalents.............. 1,209 27,776
Cash and cash equivalents, beginning of period..... 6,817 69,179
-------- --------
Cash and cash equivalents, end of period........... $ 8,026 $ 96,955
======== ========
Income taxes paid.................................. $ 7,120 $ 16,283
Interest paid...................................... $ 7,445 $ 5,293
See accompanying notes to consolidated condensed financial statements.
-5-
<PAGE>
BAKER HUGHES INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1. General
In the opinion of the Company, the unaudited consolidated condensed
financial statements include all adjustments consisting of normal recurring
accruals necessary for a fair presentation of the Company's consolidated
financial position as of December 31, 1995 and its consolidated results of
operations and cash flows for each of the three month periods ended December
31, 1995 and 1994. Although the Company believes that the disclosures in these
financial statements are adequate to make the information presented not
misleading, certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission (See the Company's Annual
Report on Form 10-K for the year ended September 30, 1995 for the most recent
annual financial statements prepared in accordance with generally accepted
accounting principles). The results of operations for the three months ended
December 31, 1995 are not necessarily indicative of the results to be expected
for the full year.
Note 2. Income Per Common Share
Net income per common share is based on the weighted average number of
shares outstanding during the respective periods (three months ended December
31, 1995 and 1994, 142,281,000 and 140,977,000, respectively) and excludes the
negligible dilutive effect of shares issuable in connection with employee stock
plans. Net income per common share for the three months ended December 31,
1994 has been adjusted for dividends on preferred stock of $3.0 million.
-6-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
BUSINESS ENVIRONMENT
Baker Hughes has eight divisions that provide products and services to two
industry segments worldwide: Oilfield and Process Equipment. Oilfield
Operations generate approximately 88% of the Company's consolidated revenues.
Oilfield Operations consist of five divisions that provide products,
services and solutions used in the drilling, completion, production and
maintenance of oil and gas wells. The business environment for Oilfield
Operations and its corresponding operating results are significantly affected
by worldwide expenditures of the petroleum industry. Important factors
establishing the levels of these expenditures include, but are not limited to,
world economic conditions, crude oil and natural gas supply and demand
balances, the legislative environment in the United States and other major
countries, war, insurrection, weather, OPEC policy and other developments in
the Middle East and other major petroleum producing regions.
Process Equipment Operations consist of three divisions that serve a broad
range of process industries. They are recognized throughout the world as
leaders in filtration, sedimentation, centrifugation and flotation processes
for the separation of solids from liquids, and liquids from liquids. The
business environment for Process Equipment Operations, which also includes
Tracor Europa, a computer peripherals division, is significantly affected by
worldwide economic conditions in the specific markets that they serve.
OPERATING ENVIRONMENT FOR OILFIELD OPERATIONS
Historically, crude oil and natural gas prices and the number of rotary
rigs operating have been prevalent factors in determining the level of
worldwide exploration and production expenditures. However, the operating
environment for the oilfield service industry has been changing over the past
several years. While prices and rig count are still relevant as an indicator
of expenditure activity, a number of new trends are beginning to emerge that
could alter the oilfield service market place. One key trend is the concept of
integrated solutions, which is to involve the oilfield service company in the
planning, engineering and integrating of several products and services.
Another trend is the application of new technologies aimed at reducing the
finding costs for oil and gas.
Crude oil and natural gas prices and the Baker Hughes rotary rig count are
summarized in the tables below as quarterly averages, followed by the Company's
outlook. While reading the Company's outlook set forth below, caution is
advised that the factors described above in "Business Environment" could
negatively impact the Company's expectations for oil and gas prices and
drilling activity.
Oil and Gas Prices
Quarter Ending December 31, 1995 1994
----------------------------------------------------------------------
WTI ($/Bbl) 18.16 17.64
U.S. Spot Natural Gas ($/mcf) 1.91 1.49
-7-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
Barring any significant change in OPEC policy, the Company expects crude
oil to trade between $17 and $19/Bbl in 1996 while remaining susceptible to
short-term price fluctuations as the growth in worldwide demand is met by
increased production by non-OPEC producing countries. U.S. natural gas prices
are expected to strengthen in 1996 with demand for natural gas expected to grow
2% to 3% per year. The Company believes that higher natural gas prices and a
tightening market would stimulate exploration and development drilling of
natural gas.
Rotary Rig Count
Quarter Ending December 31, 1995 1994
----------------------------------------------------------------------
U.S. - Land 659 719
U.S. - Offshore 106 104
Canada 227 291
----- -----
North American 992 1,114
----- -----
Latin America 271 253
North Sea 51 39
Other Europe 64 65
Africa 63 65
Middle East 129 116
Asia Pacific 170 190
----- -----
International 748 728
----- -----
Worldwide 1,740 1,842
----- -----
U.S. Workover 1,286 1,373
----------------------------------------------------------------------
North America
The Company anticipates a modest decline in North American drilling
activity. In the U.S., the Company is expecting a decrease in gas-directed
drilling to be partially offset by a modest increase in oil-directed drilling
resulting in a slight increase in offshore activity and relatively flat land
activity. Canadian activity is expected to fall short of prior year levels.
International
The Company is cautiously optimistic that most areas internationally will
post an increasing rig count in 1996. The Company is forecasting increases in
Latin America, the North Sea and West Africa while activity in the Middle East
and Asia Pacific is forecasted to be flat.
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
RESULTS OF OPERATIONS
Revenues
Quarter Ending
December 31, $ %
(In millions) 1995 1994 Change Change
---------------------------------------------------------------------------
Oilfield Operations $ 612.2 $ 537.8 $ 74.4 13.8%
Process Equipment Operations 82.5 69.1 13.4 19.4%
------- ------- ------- -------
Total Consolidated Revenues $ 694.7 $ 606.9 $ 87.8 14.5%
======= ======= ======= =======
In the first quarter of 1996, Oilfield Operations experienced revenue
growth despite a 5.5% decline in the worldwide rotary rig count and a 6.3%
decline in the U.S. workover rig count. Sales revenue was up 12.9% and service
and rentals revenue was up 17.8%. Changes in the mix of the worldwide rig
count had a significant impact on the revenue of the Company. Certain areas of
the world, including offshore U.S., North Sea and West Africa, historically
provide more revenue per rig because of the more difficult and complex drilling
conditions. Conditions such as deep water, high pressure and sensitive
environment require the premium products and services offered by the Company.
Additionally, technological advances in the design and application of the
Company's products and services allow oil and gas operators to reach and
extract greater quantities of hydrocarbons from a single drilling rig or
wellbore. For example, from a single offshore drilling rig, multiple wells can
be drilled, completed and produced and, as such, the revenue generating
capability of a single drilling rig increases. The Company enjoys ancillary
benefits in situations like these because of the wide breadth of products and
services offered by the Company. The Oilfield Operations' 1996 first quarter
results were favorably impacted by these two important trends.
Oilfield Operations was well positioned to take advantage of growth
opportunities in a number of key geographic markets. In Latin America, revenue
increased 35% in the first quarter. The revenue improvement was driven by an
increase in drilling activity in Venezuela and Argentina. Oilfield Operations
saw revenue increases in the Gulf of Mexico as horizontal drilling remained
strong. Revenue in Europe was up 31% due in large part to growing integrated
solutions business resulting in the larger percentage increase in service and
rentals revenue. The successful introduction of new technology also made a
significant contribution to the first quarter results. The new Gold Series bit
line manufactured by Hughes Christensen division drove strong diamond bit
sales. Baker Hughes INTEQ introduced the new Ultra Series downhole motors
exceeding expectations in performance and market acceptance. Strong
performance in these areas was partially offset by the continuing difficulties
for the Company's customers in the former Soviet Union ("FSU") in obtaining
project financing. Revenues in the FSU were $19.2 million in the first quarter
of 1995 compared to $3.3 million in the first quarter of 1996.
-9-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
Process Equipment Operations continue to benefit from the significant
growth in the minerals processing industry, specifically copper, and the pulp
and paper industry.
Operating Income
Quarter Ending
December 31, $ %
(In millions) 1995 1994 Change Change
---------------------------------------------------------------------------
Oilfield Operations $ 74.7 $ 56.3 $ 18.4 32.7%
Process Equipment Operations 5.8 3.7 2.1 56.7%
Consolidated operating income for the first quarter of 1996 increased 34.1%
from the same quarter a year ago. The increase results primarily from improved
revenues and the impact of the Company's ongoing quality programs where,
through various actions, increases in efficiency and productivity produce cost
savings.
Cost and Expenses
Operating expenses have typically fluctuated within a narrow band as a
percentage of consolidated revenues as the Company manages expenses both in
absolute terms and as a function of revenues.
The total of cost of sales, cost of services and rentals, research and
engineering and marketing and field service expenses as a percentage of total
revenue decreased from 82.7% in 1995 to 81.8% in 1996 reflecting the continuing
realization of cost reductions as explained above. Individually, cost of
sales, cost of services and rentals, research and engineering expense and
marketing and field service expense increased for the quarter in line with the
revenue increase.
General and administrative expense, which is less sensitive to changes in
revenue, increased $3.9 million. The increase is due primarily to the foreign
exchange losses incurred of $5.0 million as a result of the Venezuelan bolivar
devaluation which occurred in December 1995. Amortization of goodwill and
intangibles has remained relatively flat as no significant acquisitions or
dispositions were made.
-10-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
Interest Expense
Interest expense increased $3.9 million. The increase is attributable to
the increased debt levels resulting from the repurchase of convertible
preferred stock in June 1995 and higher levels of working capital.
Net Income Per Share of Common Stock
In June 1995, the Company repurchased all outstanding shares of its
convertible preferred stock. Net income is adjusted for dividends on preferred
stock of $3.0 million for the quarter ended December 31, 1994.
CAPITAL RESOURCES AND LIQUIDITY
Financing Activities
Net cash inflows from financing activities were $62.9 million in the first
quarter of 1996 compared to $58.6 million in the first quarter of 1995.
Total debt outstanding at December 31, 1995 was $879.8 million, compared to
$801.3 million at September 30, 1995. The debt to equity ratio was .577 at
December 31, 1995, compared to .529 at September 30, 1995. The Company
increased total debt to fund an increase in working capital and other investing
needs.
In June 1995, the Company repurchased all outstanding shares of its
convertible preferred stock for $167.0 million. Existing cash on hand and
borrowings from commercial paper and revolving credit facilities funded the
repurchase. Cash dividends decreased in 1996 due to the repurchase.
At December 31, 1995, the Company had $617.7 million of credit facilities
with commercial banks, of which $391.7 million is committed. These facilities
are subject to normal banking terms and conditions and do not materially
restrict the Company's activities.
Investing Activities
Net cash outflows from investing activities were $10.8 million in the first
quarter of 1996 compared to $20.3 million in the first quarter of 1995.
Proceeds from the disposal of assets generated $23.9 million in the first
quarter of 1996 compared to $5.4 million in the first quarter of 1995.
Property additions increased in the first quarter of 1996 to $34.7 million
compared to $25.7 million in the first quarter of 1995. The increase is in
line with the Company's objective of replacing capital to increase productivity
and ensure that the necessary capacity is available to meet increased market
demand.
Likewise, the ratio of capital expenditures to depreciation has increased
from 89.5% to 118.1%. The majority of the capital expenditures have been in
-11-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
Oilfield Operations where the largest single item is the expenditure for rental
tools and equipment to supplement the rental fleet. Funds provided from
operations and outstanding lines of credit are expected to be more than
adequate to meet future capital expenditure requirements. The Company expects
1996 capital expenditures to be between $170.0 million and $190.0 million.
Operating Activities
Net cash outflows from operating activities were $50.3 million and $10.1
million in 1996 and 1995, respectively.
The increase of $40.2 million in 1996 was due primarily to the build up of
working capital in Oilfield Operations to support increased activity, in
particular the increase in Latin America and Europe, and the reduction in
liabilities resulting from cash payments for employee benefits, the 1994
restructuring accruals and the settlement of several insurance claims. These
uses of cash were offset by an increase in net income adjusted for noncash
items.
OTHER MATTERS
In May 1995, President Clinton signed an Executive Order prohibiting
virtually all transactions between the U.S. and Iran, and in September 1995,
the U.S. Department of Treasury issued implementing regulations. The Order and
regulations generally do not reach to the activities of non-U.S. subsidiaries.
At December 31, 1995, the Company, through its non-U.S. subsidiaries, had
receivables from the National Iranian Oil Company ("NIOC") in an amount of
approximately one percent of stockholders' equity. These receivables are
currently being paid pursuant to an agreement with the NIOC. It is not
possible to predict with any accuracy how the current state of U.S.-Iran
relations will impact the Company's ability to collect these receivables.
Sales to Iran in the year ended September 30, 1995 and the quarter ended
December 31, 1995 were not significant.
ACCOUNTING STANDARDS
Impairment of Long-Lived Assets
In March 1995, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," which is effective for the Company on
October 1, 1996. The statement sets forth guidance as to when to recognize an
impairment of long-lived assets, including goodwill, and how to measure such an
impairment. The methodology set forth in SFAS No. 121 is not significantly
different from the Company's current policy and, therefore, the Company does
not expect the adoption of SFAS No. 121, as it relates to impairment, to have a
significant impact on the consolidated financial statements. SFAS No. 121 also
addresses the accounting for long-lived assets to be disposed of. The Company
has not yet determined the impact of this aspect of SFAS No. 121 on the
consolidated financial statements.
-12-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
Stock Based Compensation
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," which is effective for the Company on October 1, 1996. SFAS No.
123 permits, but does not require, a fair value based method of accounting for
employee stock option plans which results in compensation expense being
recognized in the results of operations when stock options are granted. The
Company plans to continue the use of its current intrinsic value based method
of accounting for such plans where no compensation expense is recognized.
However, as required by SFAS No. 123, the Company will provide pro forma
disclosure of net income and earnings per share in the notes to the
consolidated financial statements as if the fair value based method of
accounting had been applied.
-13-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on January 24, 1996,
to elect four Class II members of the Board of Directors, to consider a
proposal to implement and/or increase activity on the MacBride Principles with
respect to the Company's operations in Northern Ireland and to consider a
proposal to redeem the stockholder rights issued pursuant to the Stockholder
Rights Agreement.
The four Class II directors who were so elected are: Lester M. Alberthal,
Jr., Joe B. Foster, Richard D. Kinder and Donald C. Trauscht. The directors
whose term of office continued after the Annual Meeting are: Victor G.
Beghini, Jack S. Blanton, Harry M. Conger, Eunice M. Filter, John F. Maher,
Dana G. Mead, and James D. Woods. James F. McCall was elected as an addition
to the Board of Directors by the Class III directors, following the approval of
an increase in the number of directors by the Board of Directors. Max L.
Lukens was elected by the remaining Class III directors to fill the vacancy
created by the retirement of Gordon M. Anderson due to the term limitation
contained in the Company's Bylaws. The number of affirmative votes and the
number of votes withheld for the four Class II directors so elected were:
Number of
Affirmative
Votes Abstentions
----------- -----------
Lester M. Alberthal, Jr. 116,973,339 652,026
Joe B. Foster 116,968,699 656,666
Richard D. Kinder 116,924,598 700,767
Donald C. Trauscht 116,965,535 659,830
The number of affirmative votes, the number of negative votes, the number
of abstentions and the number of broker non-votes with respect to the
stockholder proposals regarding Northern Ireland and redemption of stockholder
rights were as follows:
Number of Number of
Affirmative Negative Broker
Votes Votes Abstentions Non-Votes
----------- ---------- ----------- ----------
Proposal regarding
Northern Ireland 17,664,643 75,046,802 11,047,398 13,866,522
Proposal regarding
stockholder rights 70,472,787 25,516,383 7,769,673 13,866,522
-14-
<PAGE>
PART II. OTHER INFORMATION CONTINUED
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K:
None.
-15-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BAKER HUGHES INCORPORATED
(Registrant)
Date: February 9, 1996 By /s/LAWRENCE O'DONNELL, III
------------------------------------
Vice President, General Counsel
and Corporate Secretary
Date: February 9, 1996 By /s/JAMES E. BRAUN
------------------------------------
Controller
-16-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Consolidated Statements of Operations and Consolidated Statements of Financial
Position and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 8,026
<SECURITIES> 0
<RECEIVABLES> 755,285
<ALLOWANCES> 23,112
<INVENTORY> 755,953
<CURRENT-ASSETS> 1,650,426
<PP&E> 567,999
<DEPRECIATION> 955,026
<TOTAL-ASSETS> 3,223,057
<CURRENT-LIABILITIES> 544,120
<BONDS> 879,802
0
0
<COMMON> 142,426
<OTHER-SE> 1,382,634
<TOTAL-LIABILITY-AND-EQUITY> 3,223,057
<SALES> 464,955
<TOTAL-REVENUES> 694,697
<CGS> 267,336
<TOTAL-COSTS> 568,282
<OTHER-EXPENSES> 55,611
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,427
<INCOME-PRETAX> 55,859
<INCOME-TAX> 23,461
<INCOME-CONTINUING> 32,398
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,398
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
