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Baker Hughes Incorporated
Notes to Consolidated Financial Statements
68
NOTE 8. EARNINGS PER SHARE
A reconciliation of the number of shares used for the basic and diluted loss or earnings per share (“EPS”)
computations is as follows for the years ended December 31:
2015 2014 2013
Weighted average common shares outstanding for basic EPS 438 437 443
Effect of dilutive securities - stock plans — 2 1
Adjusted weighted average common shares outstanding for diluted EPS 438 439 444
Anti-dilutive shares excluded from diluted EPS (1) 2 — —
Future potentially dilutive shares excluded from diluted EPS (2) 324
(1) The calculation of diluted net loss per share for 2015, excludes shares potentially issuable under stock-
based incentive compensation plans and the employee stock purchase plan, as their effect, if included,
would have been anti-dilutive.
(2) Options where the exercise price exceeds the average market price are excluded from the calculation of
diluted net loss or earnings per share because their effect would be anti-dilutive.
NOTE 9. INVENTORIES
Inventories, net of reserves of $278 million and $319 million in 2015 and 2014, respectively, are comprised of
the following at December 31:
2015 2014
Finished goods $ 2,649 $ 3,644
Work in process 132 227
Raw materials 136 203
Total inventories $ 2,917 $ 4,074
During 2015, we recorded a charge of $194 million to adjust the carrying value of certain inventory. See Note 3.
"Impairment and Restructuring Charges" for further discussion.
NOTE 10. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are comprised of the following at December 31:
Useful Life 2015 2014
Land $ 263 $ 286
Buildings and improvements 5 - 30 years 2,624 2,718
Machinery, equipment and other 1 - 20 years 11,184 14,274
Subtotal 14,071 17,278
Less: Accumulated depreciation 7,378 8,215
Total property, plant and equipment $ 6,693 $ 9,063
Depreciation expense relating to property, plant and equipment was $1,637 million, $1,706 million and $1,579
million in 2015, 2014 and 2013, respectively. During 2015, we recorded impairment charges relating to property,
plant and equipment totaling $1.32 billion. See Note 3. "Impairment and Restructuring Charges" for further
discussion.