Baker Hughes 2007 Annual Report Download - page 137
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54 Baker Hughes Incorporated
We operate in over 90 countries and are subject to income
taxes in most taxing jurisdictions in which we operate. The
following table summarizes the earliest tax years that remain
subject to examination by the major taxing jurisdictions in
which we operate. These jurisdictions are those we project
to have the highest tax liability for 2007.
Earliest Open Earliest Open
Jurisdiction Tax Period Jurisdiction Tax Period
Argentina 2002 Norway 1999
Canada 1998 Russia 2005
Germany 2003 Saudi Arabia 1995
Italy 1999 United Kingdom 2003
Netherlands 1998 United States 2002
NOTE 7. EARNINGS PER SHARE
A reconciliation of the number of shares used for the basic
and diluted EPS computations is as follows for the years ended
December 31:
2007 2006 2005
Weighted average
common shares outstanding
for basic EPS 318.0 330.6 339.4
Effect of dilutive securities –
stock plans 2.1 2.0 2.1
Adjusted weighted average
common shares outstanding
for diluted EPS 320.1 332.6 341.5
Future potentially dilutive shares
excluded from diluted EPS:
Options with an exercise price
greater than the average
market price for the period 0.6 0.7 0.7
NOTE 8. INVENTORIES
Inventories are comprised of the following at December 31:
2007 2006
Finished goods $ 1,414.0 $ 1,239.5
Work in process 177.5 188.0
Raw materials 122.9 101.3
Total $ 1,714.4 $ 1,528.8
NOTE 9. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are comprised of the follow-
ing at December 31:
Depreciation
Period 2007 2006
Land $ 62.0 $ 46.1
Buildings and
improvements 2–40 years 774.7 661.0
Machinery and
equipment 2–20 years 2,745.0 2,387.6
Rental tools and
equipment 1–10 years 1,739.3 1,419.2
Subtotal 5,321.0 4,513.9
Accumulated
depreciation (2,976.4) (2,713.4)
Total $ 2,344.6 $ 1,800.5
NOTE 10. GOODWILL AND INTANGIBLE ASSETS
The changes in the carrying amount of goodwill are detailed
below by segment:
Drilling Completion
and and
Evaluation Production Total
Balance as of
December 31, 2005 $ 904.1 $ 411.7 $ 1,315.8
Goodwill from
acquisitions during
the period 5.3 30.4 35.7
Adjustments for final
purchase price
allocations of
previous acquisitions – (5.0) (5.0)
Translation adjustments
and other (0.2) 0.7 0.5
Balance as of
December 31, 2006 909.2 437.8 1,347.0
Adjustments for final
purchase price
allocations of
previous acquisitions 2.0 1.5 3.5
Translation adjustments
and other 2.8 0.9 3.7
Balance as of
December 31, 2007 $ 914.0 $ 440.2 $ 1,354.2