Baker Hughes Incorporated announced adjusted net income (a non-GAAP measure) for the fourth quarter 2011 of $534 million, or $1.22 per diluted share. This excludes an after-tax charge of $220 million ($0.50 per diluted share) related to the impairment of certain trade names. This compares to $0.77 per diluted share for the fourth quarter 2010, and to adjusted net income of $1.18 per diluted share for the third quarter 2011.
Adjusted net income for the year 2011 was $1.84 billion or $4.20 per diluted share, compared to $2.06 per diluted share for the year 2010.
Net income attributable to Baker Hughes (a GAAP measure) for the fourth quarter 2011 was $314 million or $0.72 per diluted share, compared to $0.77 per diluted share for the fourth quarter 2010, and $1.61 per diluted share for the third quarter 2011. Net income attributable to Baker Hughes for the year 2011 was $1.74 billion or $3.97 per diluted share, compared to $2.06 per diluted share for the year 2010. Please see Table 1 for a reconciliation of GAAP to non-GAAP Financial Measures.
Revenue for the fourth quarter 2011 was $5.39 billion, up 22 percent compared to $4.42 billion for the fourth quarter 2010 and up 4 percent compared to $5.18 billion for the third quarter 2011. Revenue for the year 2011 was $19.83 billion, up 38 percent compared to $14.41 billion for the year 2010.
Martin Craighead, Baker Hughes President and Chief Executive Officer, said: "We are pleased with our international margins of 16 percent in the fourth quarter (excluding the impairment of certain trade names), with contributions across all regions. Our business continues to improve and we benefited from increased activity, a favorable product mix as well as typical seasonal product sales. For 2012, we expect international growth to continue, particularly in the Latin America, Middle East, and deepwater markets.
"In North America, the fundamentals of the business continue to be robust driven by activity growth in the unconventional basins. The geology and economics in the liquids-rich shale plays will support substantial additional drilling, and we have every reason to be confident about the long-term prospects of this market. Our Drilling and Evaluation and Completion and Production groups showed steady improvement, except for Pressure Pumping.
"The issues in Pressure Pumping were related to the availability, cost and transportation of materials, such as sand and gel. Further, as we increased headcount and added capacity to address the growing market needs, we were not able to sufficiently utilize these resources. We are resolving these issues and expect to see improvement in the second half of the year.
"Finally, I would like to thank Chad Deaton for his contribution to Baker Hughes during the past seven years. Many of the initiatives we've put in place during this time frame have been critical to ensuring our success in the market going forward. Baker Hughes has a talented workforce that is constantly focused on innovating and finding solutions. As CEO I will ensure that our 57,000 employees are relentlessly focused on delivering reliable products and services so Baker Hughes is the service company that best anticipates our customers' needs and exceeds their expectations."
Debt increased by $169 million to $4.07 billion compared to the third quarter 2011. Cash and short-term investments increased by $247 million to $1.05 billion compared to the third quarter 2011. Capital expenditures were $810 million, depreciation and amortization expense was $343 million, and dividend payments were $66 million in the fourth quarter 2011.
For the year, capital expenditures were $2.46 billion, depreciation and amortization expense was $1.32 billion and dividend payments were $261 million.
Adjusted EBITDA (a non-GAAP measure) in the fourth quarter 2011 was $1.18 billion, up $35 million sequentially. For the full year, Adjusted EBITDA was $4.3 billion. A reconciliation of net income attributable to Baker Hughes to Adjusted EBITDA is provided in Table 2. Supplemental financial information for revenue and adjusted operating profit before tax (a non-GAAP measure) is provided in Tables 5a and 5b.
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