Baker Hughes 2013 Annual Report Download - page 68

2013 Annual Report 38
committed credit facility. However, a downgrade in our credit ratings could increase the cost of borrowings under
the facility and could also limit or preclude our ability to issue commercial paper. Should this occur, we would seek
alternative sources of funding, including borrowing under the facility.
We believe our current credit ratings would allow us to obtain interim financing over and above our existing
credit facility for any currently unforeseen significant needs or growth opportunities. We also believe that such
interim financings could be funded with subsequent issuances of long-term debt or equity, if necessary.
Cash Requirements
In 2014, we believe cash on hand, cash flows from operating activities and the available credit facility will
provide us with sufficient capital resources and liquidity to manage our working capital needs, meet contractual
obligations, fund capital expenditures, and support the development of our short-term and long-term operating
strategies. If necessary, we may issue commercial paper or other short-term debt to fund cash needs in the U.S. in
excess of the cash generated in the U.S.
In 2014, we expect our capital expenditures to be approximately $2.0 billion, excluding any amount related to
acquisitions. The expenditures are expected to be used primarily for normal, recurring items necessary to support
our business and operations. A significant portion of our capital expenditures can be adjusted and managed by us
to match market demand and activity levels. In 2014, we also expect to make interest payments of between $235
million and $255 million, based on debt levels as of December 31, 2013. We anticipate making income tax
payments of between $1.0 billion and $1.1 billion in 2014.
We may repurchase our common stock depending on market conditions, applicable legal requirements, our
liquidity and other considerations. We anticipate paying dividends of between $263 million and $273 million in
2014; however, the Board of Directors can change the dividend policy at any time.
For all defined benefit, defined contribution and other postretirement plans, we expect to contribute between
$385 million and $422 million to these plans in 2014. See Note 10 of the Notes to Consolidated Financial
Statements in Item 8 herein for further discussion of our employee benefit plans.
Contractual Obligations
In the table below, we set forth our contractual cash obligations as of December 31, 2013. Certain amounts
included in this table are based on our estimates and assumptions about these obligations, including their duration,
anticipated actions by third parties and other factors. The contractual cash obligations we will actually pay in future
periods may vary from those reflected in the table because the estimates and assumptions are subjective.
Payments Due by Period
(In millions) Total Less Than
1 Year
2-3
Years
4-5
Years
More Than
5 Years
Total debt and capital lease
obligations (1) $4,410 $ 499 $ 39 $ 1,024 $ 2,848
Estimated interest payments (2) 3,273 232 455 438 2,148
Operating leases (3) 1,049 405 408 114 122
Purchase obligations (4) 1,672 483 678 343 168
Income tax liabilities for
uncertain tax positions (5) 282 119 108 18 37
Other long-term liabilities 194 54 69 11 60
To t a l (6) $ 10,880 $ 1,792 $ 1,757 $ 1,948 $ 5,383
(1) Amounts represent the expected cash payments for the principal amounts related to our debt, including
outstanding commercial paper of $254 million, and capital lease obligations. Amounts for debt do not
include any unamortized discounts or deferred issuance costs. Expected cash payments for interest are
excluded from these amounts.