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|Baker Hughes outlines path for the future|
|- To reduce costs by simplifying its organization and rationalizing its operational footprint|
- Commercial strategy focused on its core strengths in product innovation, while building broader channels for its technology and products
- Announces plans to buy back $1.5 billion of shares and $1 billion of debt with $3.5 billion merger breakup fee
- Chairman and CEO Martin Craighead and Chief Financial Officer Kimberly Ross to provide more details on Tuesday, May 3 at 7 a.m. Central Time (8 a.m. Eastern Time)
The steps are intended to strengthen the company's competitive position, financial performance and shareholder returns during the ongoing industry challenges of today and for the additional opportunities that will be available when the market recovers.
"Innovation is what we do best and what our customers need the most. It is an enviable capability that is part of our culture and continues to differentiate us in the market.
Actions outlined by the company include:
Improving operational efficiency and effectiveness
The initial phase of the cost reduction efforts is expected to result in
Evolving the company's go-to-market strategy
As it seeks to further capitalize on its leadership position as a product innovator, the company is evolving its go-to-market strategy to align with a changing marketplace and maximize its return on invested capital. The company will be rationalizing where it provides its current full-service model and will build a broader range of global sales channels for select countries, including tailored operating models. These new channels will allow
In an effort to improve its return on invested capital the company has decided to retain a selective footprint in its U.S. onshore pressure pumping business, while preserving the flexibility to expand for the right opportunities. This approach will allow the company to achieve cash-positive operations in a capital-intensive segment that is expected to remain challenging due to overcapacity, commoditized pricing and low barriers to entry.
Optimizing the company's capital structure
The company also is taking actions to optimize its capital structure to achieve the right balance between returning capital to shareholders, maintaining strong investment grade ratings and having the necessary cash to fund cost efficiency initiatives, while preserving its financial flexibility.
As part of these plans, the company intends to buy back shares totaling
"The company will approach these actions thoughtfully, decisively and swiftly to position the company for success and to maximize shareholder value," Craighead said. "As we implement these changes, we remain focused on running the business efficiently while capitalizing on our strengths as a product innovator to create new growth opportunities. We are extremely appreciative of our customers and their loyalty to
This news release (and oral statements made regarding the subjects of this release, including on the conference call announced herein) 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/A for the year ended December 31, 2015, Quarterly Report on Form 10-Q for the quarter ended
Our expectations regarding our business outlook and business plans; share and debt repurchases; 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.
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