Baker Hughes Announces Restructuring Plan, Non-cash Goodwill Impairment Charge

(RTTNews) - Baker Hughes (BKR) has approved a plan that will result in restructuring, impairment, and other charges of approximately $1.8 billion, of which approximately $1.5 billion will be recorded in the first quarter of 2020. The company said the restructuring charges are designed to right-size its operations for anticipated activity levels and market conditions.

Also, Baker Hughes conducted an interim quantitative impairment test as of March 31, 2020. Based upon the results of the test, it decided that the carrying value of the Oilfield Services and Oilfield Equipment reporting units exceeded their estimated fair value, resulting in a goodwill impairment charge. The company expects to record a non-cash goodwill impairment charge of approximately $15 billion in the first quarter of 2020. Baker Hughes noted that this impairment charge will not impact the company's cash flow.