Baker Hughes 2004 Annual Report Download - page 101

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In฀February฀2004,฀we฀completed฀the฀sale฀of฀our฀minority฀
interest฀in฀Petreco฀International,฀a฀venture฀we฀entered฀into฀in฀
2001,฀for฀$35.8฀million,฀of฀which฀$7.4฀million฀is฀held฀in฀
escrow฀pending฀the฀outcome฀of฀potential฀indemnification฀obli-
gations฀pursuant฀to฀the฀sales฀agreement.฀A฀portion฀of฀the฀
escrow฀will฀be฀released฀in฀May฀2005,฀with฀the฀remainder฀
released฀in฀February฀2006.฀We฀recognized฀a฀gain฀on฀the฀sale฀
of฀$1.3฀million,฀net฀of฀tax฀of฀$1.5฀million.
During฀2003,฀we฀invested฀$30.1฀million฀for฀a฀50%฀interest฀
in฀the฀QuantX฀Wellbore฀Instrumentation฀venture฀(“QuantX”)฀
with฀Expro฀International฀(“Expro”).฀The฀venture฀is฀engaged฀in฀
the฀permanent฀in-well฀monitoring฀market฀and฀was฀formed฀by฀
combining฀Expro’s฀permanent฀monitoring฀business฀with฀one฀of฀
our฀product฀lines.฀We฀account฀for฀our฀ownership฀in฀QuantX฀
using฀the฀equity฀method฀of฀accounting.
Summarized฀unaudited฀combined฀financial฀information฀for฀
the฀affiliates,฀in฀which฀we฀account฀for฀our฀interests฀using฀the฀
equity฀method฀of฀accounting,฀is฀as฀follows฀as฀of฀December฀31:
฀ 2004฀ 2003
Combined฀operating฀results:฀
฀ Revenues฀ $฀ 1,313.8฀ $฀ 1,349.3฀
฀ Operating฀income฀(loss)฀ ฀ 131.9฀ ฀ (457.9)฀
฀ Net฀income฀(loss)฀ ฀ 124.9฀ ฀ (478.1)฀
฀
Combined฀financial฀position:฀
฀ Current฀assets฀ $฀ 755.2฀ $฀ 695.9฀
฀ Noncurrent฀assets฀ ฀ 1,162.8฀ ฀ 1,345.2
฀ Total฀assets฀ $฀ 1,918.0฀ $฀ 2,041.1
฀
฀ Current฀liabilities฀ $฀ 423.6฀ $฀ 556.6฀
฀ Noncurrent฀liabilities฀ ฀ 101.2฀ ฀ 179.5฀
฀ Stockholders’฀equity฀ ฀ 1,393.2฀ ฀ 1,305.0
฀ Total฀liabilities฀and฀
฀ ฀ stockholders’฀equity฀ $฀ 1,918.0฀ $฀ 2,041.1
At฀December฀31,฀2004฀and฀2003,฀net฀accounts฀(payable)฀
receivable฀from฀unconsolidated฀affiliates฀totaled฀$(1.1)฀million฀
and฀$0.7฀million,฀respectively.฀As฀of฀December฀31,฀2004฀and฀
2003,฀the฀excess฀of฀our฀investment฀over฀our฀equity฀in฀affiliates฀
was฀$268.9฀million฀and฀$298.2฀million,฀respectively.
Note฀9.฀Property
Property฀is฀comprised฀of฀the฀following฀at฀December฀31:
฀ Depreciation฀
฀ Period฀ 2004฀ 2003
Land฀ ฀ $฀ 40.8฀ $฀ 39.7฀
Buildings฀and฀
฀ improvements฀ 5฀–฀40฀years฀ ฀ 618.1฀ ฀ 604.4฀
Machinery฀and฀
฀ equipment฀ 2฀–฀15฀years฀ ฀ 1,960.6฀ ฀ 1,915.0฀
Rental฀tools฀and฀
฀ equipment฀ 1฀–฀10฀years฀ ฀ 1,097.5฀ ฀ 1,051.0
Total฀property฀ ฀ ฀ 3,717.0฀ ฀ 3,610.1฀
Accumulated฀depreciation฀ ฀ (2,382.9)฀ ฀ (2,215.0)
Property฀–฀net฀ ฀ $฀ 1,334.1฀ $฀ 1,395.1
2004฀Form฀10-K฀฀฀฀฀51