BHGE’s net debt
In 2017, net debt for Baker Hughes, a GE company (BHGE) was $1.4 billion, rising 176% from its net debt of -$1.6 billion in 2016. While Baker Hughes was nearly debt-free before the merger with GE Oil & Gas, its long-term debt is now ~$6.3 billion and its short-term debt is $2.0 billion. As of December 31, 2017, BHGE had cash and marketable securities of $7.0 billion, and ~$3.2 billion of BHGE’s cash and equivalents were held by foreign subsidiaries. Despite having higher cash and equivalents, BHGE’s net debt turned positive in 2017 due to its total debt rising.
BHGE’s shareholder equity
Between 2016 and 2017, Baker Hughes’s shareholder equity rose 210% due to a $7.4 billion cash contribution received from GE and $24.8 billion in Class A common stock being issued following its acquisition by GE.
BHGE’s net debt-to-equity ratio
BHGE’s positive net debt led to its net debt-to-equity ratio turning positive in 2017, switching from -0.12x to 0.03x. BHGE’s net debt-to-equity ratio has been negative in only one of the past five years. BHGE accounts for 5.6% of the iShares US Oil Equipment & Services ETF (IEZ), which tracks an index composed of US equities in the oil equipment and service sector. In the past year, IEZ has fallen 24%, whereas BHGE has fallen 32%.
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