Baker Hughes 2015 Annual Report Download - page 24

15
turnkey basis generally subjects the Company to additional risks, such as costs associated with unexpected delays
or difficulties in drilling or completion operations and risks associated with subcontracting arrangements.
Currency fluctuations or devaluations may impact our operating results.
Fluctuations or devaluations in foreign currencies relative to the U.S. Dollar can impact our revenue and our
costs of doing business. Most of our products and services are sold through contracts denominated in U.S. Dollars
or local currency indexed to U.S. Dollars; however, some of our revenue, local expenses and manufacturing costs
are incurred in local currencies and therefore changes in the exchange rates between the U.S. Dollar and foreign
currencies can increase or decrease our revenue and expenses reported in U.S. Dollars and may impact our results
of operations.
Changes in economic and/or market conditions may impact our ability to borrow and/or cost of borrowing.
The condition of the capital markets and equity markets in general can affect the price of our common stock and
our ability to obtain financing, if necessary. If the Company’s credit rating is downgraded, this could increase
borrowing costs under our credit facility and commercial paper program, as well as the cost of renewing or
obtaining, or make it more difficult to renew or obtain or issue new debt financing.
The Company has a significant concentration of its business in North America.
For the year ended December 31, 2015, over one-third of our revenue was attributable to North America
compared to approximately one-half of our revenue attributable to North America for the year ended December 31,
2014. In North America, a decrease in demand for energy or in oil and natural gas exploration and production, or
an increase in competition could result in a significant adverse effect on our operating results.
Our restructuring activities may not achieve the results we expect and could increase, which could materially and
adversely affect our results of operations and financial condition.
During 2015, we implemented a number of restructuring activities to reduce expenses, which included a
reduction in our workforce, the termination of various contracts, the closing or abandoning of certain facilities, and
the downsizing of our presence in select markets. There can be no assurance that our restructuring activities will
produce the cost savings we anticipate in the expected timeframe or that the cumulative restructuring activities and
charge will not have to increase in order to achieve our cost savings targets. Any delay or failure to achieve the
expected cost savings and any increase in our anticipated cumulative restructuring activities and charge would
likely cause our future earnings to be lower than anticipated.
Risk Factors Related to the Pending Merger with Halliburton
Our expectations regarding our business may be impacted by the following risk factors related to the pending
Merger with Halliburton:
The pendency of our Merger with Halliburton could adversely affect our business.
In connection with our pending Merger with Halliburton, some of our suppliers and customers may delay or
defer sales and purchasing decisions, which could negatively impact revenues, earnings and cash flows regardless
of whether the Merger is completed. We have agreed in the Merger Agreement to refrain from taking certain actions
with respect to our business and financial affairs during the pendency of the Merger, which restrictions could be in
place for an extended period of time if completion of the Merger is delayed and could adversely impact our financial
condition, results of operations or cash flows. The process of seeking to accomplish the Merger could also divert
the focus of our management from pursuing other opportunities that could be beneficial to us.
We may be unable to attract and retain key employees during the pendency of our Merger with Halliburton.
In connection with our pending Merger with Halliburton, current and prospective employees of Baker Hughes
may experience uncertainty about their future roles with the combined company following the Merger, which may
materially adversely affect our ability to attract and retain key personnel during the pendency of the Merger. Key