Baker Hughes Incorporated announced net income attributable to Baker Hughes for the fourth quarter 2010 of $335 million or $0.77 per diluted share compared to $84 million or $0.27 per diluted share for the fourth quarter 2009 and $255 million or $0.59 per diluted share for the third quarter 2010. Net income attributable to Baker Hughes for the year 2010 was $812 million or $2.06 per diluted share, compared to $421 million or $1.36 per diluted share for the year 2009.
Income attributable to Baker Hughes for the fourth quarter 2010, excluding acquisition-related costs and a gain on investment, was $366 million or $0.84 per diluted share.
Revenue for the fourth quarter 2010 was $4.42 billion, up 82% compared to $2.43 billion for the fourth quarter 2009 and up 8% compared to $4.08 billion for the third quarter 2010. Revenue for the year 2010 was $14.41 billion, up 49% compared to $9.66 billion for the year 2009.
Results for the year 2010 include results of BJ Services starting from May 2010 unless otherwise stated.
Chad C. Deaton, Baker Hughes chairman and chief executive officer, said, “In North America, margins increased almost 500 basis points sequentially reflecting the ongoing strength of customer spending in unconventional oil and gas plays and price realization. Given high oil prices and relatively low gas prices, customers are increasing drilling in crude oil and liquids rich natural gas plays where service intensity continues to increase. The trend toward longer horizontal wells with more frac stages is benefitting our directional drilling systems, completions and pressure pumping sales.
“We continue to make good progress with the integration of BJ Services and Baker Hughes. We are increasing the pull through of Baker Hughes products into pressure pumping projects and have also been able to leverage our leadership in drilling and completions technology to pull through pressure pumping.
“Given the ongoing delays in permitting new work offshore in the Gulf of Mexico, particularly in the deepwater, many operators have increased workover activity in order to offset production declines from existing fields. In the fourth quarter 2010, we benefitted from increased share of the incremental workover and completion activity as well as increased interest in drilling deep high pressure high temperature wells on the shelf. However, we remain concerned about the pace of permit approval, for both deepwater and shelf drilling, which continues to weigh on the outlook for the Gulf of Mexico.
“International operating profit margins improved 375 basis points sequentially in the quarter as a result of reduced support costs, improving productivity and seasonally strong product sales. Margins improved sequentially in all regions except Africa where margins were unchanged. International pricing appears to have bottomed in some markets and in some product lines. We are continuing to execute our plans to increase international profit margins.
“Looking ahead, we expect the economic recovery to continue resulting in increased oil demand and support for higher oil prices and a sustained multi-year expansion of international spending. However, at the current pace, we do not expect meaningful price leverage in our international markets until late 2011.
Debt increased by $39 million to $3.88 billion and cash and short-term investments decreased by $150 million to $1.71 billion compared to the third quarter 2010. Capital expenditures were $486 million, depreciation and amortization expense was $326 million and dividend payments were $66 million in the fourth quarter 2010. Capital expenditures were $1.49 billion, depreciation and amortization expense was $1.07 billion and dividend payments were $241 million in the year 2010.
Earnings before interest, taxes, depreciation and amortization or “EBITDA” per diluted share for fourth quarter 2010 was $2.18, up $1.07 or 96% compared to $1.11 for the fourth quarter 2009 and up $0.54 or 33% compared to $1.64 for the third quarter 2010. EBITDA for the year 2010 was $6.63 per diluted share up $1.93 or 41% from $4.70 for the year 2009. EBITDA is a non-GAAP measure and is calculated in Table 1 (Calculation of EBIT and EBITDA (non-GAAP measures)).
In addition to reported results, we are also providing “Supplemental Financial Information” in Table 3 for revenue and operating profit before tax (a non-GAAP measure). This information presents pro forma combined revenue and operating profit before tax for Baker Hughes and BJ Services for all periods referenced and reflects the current estimated depreciation and amortization expense associated with the acquisition of BJ Services.