Baker Hughes 2014 Annual Report Download - page 63

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Investing Activities
Our principal recurring investing activity is the funding of capital expenditures to ensure that we have the
appropriate levels and types of machinery and equipment in place to generate revenue from operations.
Expenditures for capital assets totaled $1.79 billion, $2.09 billion and $2.91 billion for 2014, 2013 and 2012,
respectively. While the majority of these expenditures were for machinery and equipment, it also includes
expenditures for new facilities, expansions of existing facilities and other infrastructure projects.
Proceeds from the disposal of assets were $437 million, $455 million and $389 million for 2014, 2013 and 2012,
respectively. These disposals related to equipment that was lost-in-hole and property, machinery, and equipment no
longer used in operations that was sold throughout the year.
We routinely evaluate potential acquisitions of businesses that may enhance our current operations or expand
our operations into new markets or product lines. We may also from time to time sell business operations that are
not considered part of our core business. In 2014, we paid $314 million for acquisitions, net of cash acquired of $7
million. During 2013 and 2012, we did not have any significant business acquisitions or dispositions.
Under the merger agreement with Halliburton, as described in Note 2. "Halliburton Merger Agreement" of the
Notes to Consolidated Financial Statements in Item 8 herein, we have restrictions on our ability to acquire or
dispose of any businesses while the merger is pending.
Financing Activities
We had net repayments of commercial paper and other short-term debt of $248 million and $571 million in 2014
and 2013, respectively, and net borrowing of commercial paper and other short-term debt of $847 million in 2012.
Total debt outstanding at December 31, 2014 was $4.13 billion, a decrease of $248 million compared to
December 31, 2013. The total debt-to-capital (defined as total debt plus equity) ratio was 0.18 at December 31,
2014 and 0.20 at December 31, 2013. We received proceeds of $216 million, $101 million and $81 million in 2014,
2013 and 2012, respectively, from the issuance of common stock through the exercise of stock options and the
employee stock purchase plan.
Our Board of Directors has authorized a program to repurchase our common stock from time to time. During
2013, our Board of Directors increased the authorization to purchase our common stock under our share
repurchase program by $800 million. During 2014, we repurchased 9.1 million shares of our common stock at an
average price of $65.75 per share, for a total of $600 million. We had authorization remaining to repurchase
approximately $1.05 billion in common stock at the end of 2014. During 2013, we repurchased 6.3 million shares of
our common stock at an average prices of $55.59 per share, for a total of $350 million. During 2012, we did not
repurchase any shares of common stock.
We paid dividends of $279 million, $267 million and $263 million in 2014, 2013 and 2012, respectively.
Under the merger agreement with Halliburton, as described in Note 2. "Halliburton Merger Agreement" of the
Notes to Consolidated Financial Statements in Item 8 herein, we have generally agreed not to repurchase any
shares of common stock or increase the quarterly dividend while the merger is pending.
Available Credit Facility
We have a committed revolving credit facility (“credit facility”) with commercial banks and a related commercial
paper program under which the maximum combined borrowing at any time under both the credit facility and the
commercial paper program is $2.5 billion. The credit facility matures in September 2016 and contains certain
covenants which, among other things, restrict certain merger transactions or the sale of all or substantially all of our
assets or a significant subsidiary and limit the amount of subsidiary indebtedness. Upon the occurrence of certain
events of default, our obligations under the credit facility may be accelerated. Such events of default include
payment defaults to lenders under the credit facility, covenant defaults and other customary defaults. We were in
compliance with all of the credit facility’s covenants, and there were no direct borrowings under the credit facility
during 2014. Under the commercial paper program, we may issue from time to time up to $2.5 billion in commercial