Baker Hughes 2014 Annual Report Download - page 36

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Seasonal and weather conditions could adversely affect demand for our services and operations.
Variation from normal weather patterns, such as cooler or warmer summers and winters, can have a significant
impact on demand. Adverse weather conditions, such as hurricanes in the Gulf of Mexico, may interrupt or curtail
our operations, or our customers’ operations, cause supply disruptions and result in a loss of revenue and damage
to our equipment and facilities, which may or may not be insured. Extreme winter conditions in Canada, Russia or
the North Sea may interrupt or curtail our operations, or our customers’ operations, in those areas and result in a
loss of revenue.
Risk Factors Related to Our Business
Our expectations regarding our business are affected by the following risk factors and the timing of any of these
risk factors:
We operate in a highly competitive environment, which may adversely affect our ability to succeed.
We operate in a highly competitive environment for marketing oilfield services and securing equipment and
trained personnel. Our ability to continually provide competitive products and services can impact our ability to
defend, maintain or increase prices for our products and services, maintain market share, and negotiate acceptable
contract terms with our customers. In order to be competitive, we must provide new technologies, reliable products
and services that perform as expected and that create value for our customers, and successfully recruit, train and
retain competent personnel. Our investments in new technologies and property, plant and equipment may not
provide competitive returns. Our ability to defend, maintain or increase prices for our products and services is in
part dependent on the industry’s capacity relative to customer demand, and on our ability to differentiate the value
delivered by our products and services from our competitors’ products and services.
Managing development of competitive technology and new product introductions on a forecasted schedule and
at forecasted costs can impact our financial results. Development of competing technology that accelerates the
obsolescence of any of our products or services can have a detrimental impact on our financial results.
We may be disadvantaged competitively and financially by a significant movement of exploration and
production operations to areas of the world in which we are not currently active.
The high cost or unavailability of infrastructure, materials, equipment, supplies and personnel, particularly in periods
of rapid growth, could adversely affect our ability to execute our operations on a timely basis.
Our manufacturing operations are dependent on having sufficient raw materials, component parts and
manufacturing capacity available to meet our manufacturing plans at a reasonable cost while minimizing
inventories. Our ability to effectively manage our manufacturing operations and meet these goals can have an
impact on our business, including our ability to meet our manufacturing plans and revenue goals, control costs, and
avoid shortages of raw materials and component parts. Raw materials and components of particular concern
include steel alloys (including chromium and nickel), titanium, barite, beryllium, copper, lead, tungsten carbide,
synthetic and natural diamonds, gels, sand and other proppants, printed circuit boards and other electronic
components and hydrocarbon-based chemical feed stocks. Our ability to repair or replace equipment damaged or
lost in the well can also impact our ability to service our customers. A lack of manufacturing capacity could result in
increased backlog, which may limit our ability to respond to orders with short lead times.
People are a key resource to developing, manufacturing and delivering our products and services to our
customers around the world. Our ability to manage the recruiting, training, retention and efficient usage of the
highly skilled workforce required by our plans and to manage the associated costs could impact our business. A
well-trained, motivated workforce has a positive impact on our ability to attract and retain business. Periods of rapid
growth present a challenge to us and our industry to recruit, train and retain our employees, while managing the
impact of wage inflation and potential lack of available qualified labor in the markets where we operate.
Likewise, when there is a downturn in the economy or our markets, we may have to adjust our workforce to
control costs and yet not lose our skilled and diverse workforce. Labor-related actions, including strikes, slowdowns
and facility occupations can also have a negative impact on our business.