Baker Hughes 2009 Annual Report Download - page 138

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64 Baker Hughes Incorporated
Our total accrual for environmental remediation is $18 mil-
lion and $17 million, which includes accruals of $6 million and
$6 million for the various Superfund sites, at December 31, 2009
and 2008, respectively. The determination of the required
accruals for remediation costs is subject to uncertainty, includ-
ing the evolving nature of environmental regulations and the
difficulty in estimating the extent and type of remediation
activity that will be utilized. We believe that the likelihood of
material losses in excess of the amounts accrued is remote.
Other
In connection with the settlement of litigation with
ReedHycalog, in June 2008, the Company paid ReedHycalog
$70 million in royalties for prior use of certain patented tech-
nologies, and ReedHycalog paid the Company $8 million in
royalties for the license of certain Company patented technol-
ogies. The net pre-tax charge of $62 million for the settlement
of this litigation is reflected in the 2008 consolidated statement
of operations.
In the normal course of business with customers, vendors
and others, we have entered into off-balance sheet arrange-
ments, such as letters of credit and other bank issued guaran-
tees, which totaled approximately $692 million at December 31,
2009. We also had commitments outstanding for purchase
obligations related to capital expenditures and inventory under
purchase orders and contracts of approximately $221 million at
December 31, 2009. It is not practicable to estimate the fair
value of these financial instruments. None of the off-balance
sheet arrangements either has, or is likely to have, a material
effect on our consolidated financial statements.
NOTE 16. ACCUMULATED OTHER COMPREHENSIVE LOSS
The following is a reconciliation of Accumulated Other Comprehensive Loss:
Pensions and Foreign Accumulated
Other Currency Other
Postretirement Translation Comprehensive
Benefits Adjustments Loss
Balance at December 31, 2007 $ (56) $ 12 $ (44)
Translation adjustments – (354) (354)
Amortization of prior service cost 1 – 1
Amortization of actuarial net loss 2 – 2
Actuarial net losses arising in the year (222) – (222)
Adjustment to reflect change in measurement date 1 – 1
Effect of exchange rate 26 – 26
Deferred taxes 67 – 67
Balance at December 31, 2008 (181) (342) (523)
Translation adjustments – 122 122
Amortization of prior service cost 1 – 1
Amortization of actuarial net loss 16 – 16
Actuarial net losses arising in the year (22) – (22)
Effect of exchange rate (10) – (10)
Deferred taxes 2 – 2
Balance at December 31, 2009 $ (194) $ (220) $ (414)