Pursuant to Rule 425 under the Securities Act of 1933

And deemed filed pursuant to Rule 14a-12

Under the Securities Exchange Act of 1934

Subject Company: Baker Hughes Incorporated

Commission File No.: 001-09397

Date: December 9, 2016

 

THOMSON REUTERS STREETEVENTS EDITED TRANSCRIPT BHI - Baker Hughes Inc Investor Meeting   EVENT DATE/TIME: DECEMBER 08, 2016 / 02:00PM GMT

Caution Concerning Forward-Looking Statements:

This document contains “forward-looking statements” – that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see http://www.ge.com/investor-relations/disclaimer-caution-concerning-forward-looking-statements as well as our annual reports on Form 10-K and quarterly reports on Form 10-Q. We do not undertake to update our forward-looking statements. This document also includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.

Non-GAAP Financial MEASURES:

In this document, we sometimes use information derived from consolidated financial data but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). Certain of these data are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures are posted to the investor relations section of our website at www.ge.com. We use non-GAAP financial measures including the following.

 

 

General Electric Capital Corporation (GECC) has been merged into GE and our financial services business is now operated by GE Capital Global Holdings LLC (GECGH). In this document, we refer to GECC and GECGH as “GE Capital”. We refer to the industrial businesses of the Company including GE Capital on an equity basis as “GE”. “GE (ex-GE Capital)” and /or “Industrial” refer to GE excluding GE Capital. Our financial services segment previously referred to as GE Capital is now referred to as Capital.

GE’s Investor Relations website at www.ge.com/investor and our corporate blog at www.gereports.com, as well as GE’s Facebook page and Twitter accounts, contain a significant amount of information about GE, including financial and other information for investors. GE encourages investors to visit these websites from time to time, as information is updated and new information is posted.

 

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DECEMBER 08, 2016 / 02:00PM GMT, BHI - Baker Hughes Inc Investor Meeting

 

C O R P O R A T E    P A R T I C I P A N T S

Lorenzo Simonelli General Electric Company - President and CEO, GE Oil & Gas

Martin Craighead Baker Hughes Incorporated - Chairman and CEO

Maria Claudia Borras General Electric Company - Chief Commercial Officer, GE Oil & Gas

Derek Mathieson Baker Hughes Incorporated - Chief Commercial Officer

Rod Christie General Electric Company - President & CEO, Turbomachinery Solutions, GE Oil & Gas

Mathias Heilmann General Electric Company - Chief Digital Officer, President & CEO, Digital Solutions, GE Oil & Gas

Kishore Sundararajan General Electric Company - Chief Technology Officer, GE Oil & Gas

Art Soucy Baker Hughes Incorporated - President, Products and Technology

Jody Markopoulos General Electric Company - COO, GE Oil & Gas

 

C O N F E R E N C E   C A L L   P A R T I C I P A N T S

Colin Davis Bernstein - Analyst

Waqar Sayed Goldman Sachs - Analyst

Cliff Ransom Ransom Associates Inc. - Analyst

Andy Kaplowitz Citigroup - Analyst

Kurt Hallead RBC Capital Markets - Analyst

P R E S E N T A T I O N

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Lorenzo Simonelli - General Electric Company - President and CEO, GE Oil & Gas

Good morning, everybody. Welcome to New York and also welcome to the webcast and welcome to the new Baker Hughes, a GE company. And today, we’ve got a packed agenda, so we are going to get going in this nice, modern room, which really is, I think, a good occasion to showcase what the new Baker Hughes, a GE company is going to look like.

As you look at the agenda, we’ve got a number of the leadership team from both Baker Hughes and GE that will be coming up here to really showcase how we’re moving forward, how we are continuing to develop the ideas around the new Company, and also become the product servicing leader within the industry.

So we will get into it straight away. And really, I thought it would be apt to just describe why we like this deal so much. And we truly think this is a transformative deal for the industry. It provides a fullstream technology provider for the customers.

As I’ve been going out and Martin has, we have been speaking to customers. And we are able to go from extraction all the way below the mud line all the way to the refinery and provide capabilities across the industry.

We are combining the strengths: great brands, great technology, great services portfolios. And it’s 2X the scale when you look at the coverage that we are going to be able to have and also the capability that we provide our customers.

 

 

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DECEMBER 08, 2016 / 02:00PM GMT, BHI - Baker Hughes Inc Investor Meeting

 

A blended leadership team bringing the both from the two Companies, and GE’s digital capability. And we’re going to get into that as we go through the presentation, but really understanding how data analytics provides the next productivity and the next sphere for this industry. And significant synergies that we’ve walked you through before, but we will give you more details on actually how we achieve those.

A little bit of background on the transaction. We shared this with you before. But again, this is the bringing together of two great companies: GE Oil & Gas and Baker Hughes. The new Company: 62.5% owned by GE, 37.5% owned by the Baker Hughes shareholders. And the Baker Hughes shareholders benefit from a $7.4 billion cash dividend during the transaction.

It’s going to be a joint leadership team, again bringing the capabilities of oilfield services with what GE has from a process standpoint, equipment, and services. It’s going to have a nine-member Board, with Jeff Immelt as the Chairman and Martin Craighead as the Vice-Chairman of the Board and myself heading up the new Baker Hughes. We are very excited about the opportunity and we think there’s great financial returns for the investors as we go forward.

So what have we been doing since the announcement of October 31? There has been broad understanding of the industrial logic and a huge amount of appreciation and acceptance of the benefit that this transaction can provide customers and shareholders.

We have been giving more information around GE Oil & Gas, providing more updates. And this is really the continuing theme of today’s update as well, being able to provide you more insights on how we go forward together as one.

We’ve hosted a specific oil and gas event and we have also started to showcase some of the digital capabilities at Minds + Machines in San Francisco, where we announced also the collaboration with BP and some of the new capabilities that we are providing them to drive productivity.

The integration, which we will update you on, is firmly underway with a team already set up. And the regulatory process is being conducted and started and proceeding accordingly, as we anticipated.

So what are we creating here? The new Baker Hughes is a fullstream capability. We are a unique company in the industry that will be able to go from the drilling evaluation stage to the completion production, as you look at the LNG pipeline solutions, and all the way through refinery.

And the foundation of this, with digital capabilities, sensors, meters, utilizing data analytics. You hear about the fourth industrial revolution, the aspect of using data to drive a reduction in waste, increase the productivity. That’s what we’re going to be able to do.

And if you think about the terms that we have been using -- full stream, molecule to megawatt -- what we’ve got within this portfolio is the capability to truly help our customers. And that’s what we’ll go through.

And that’s what we are looking to do. We are looking to create the productivity leader in the oil and gas industry. You’ve seen the benefits of the portfolio. And as we go through this presentation, you will actually hear how we are going through the commercial innovation.

What are the new types of offerings that we can provide our customers -- the digital transformation, the way in which we utilize data analytics. And then also technology. There is a strong foundation within both Companies around a history of technology.

And we can utilize the GE Store really to provide greater capacity to the Baker Hughes tools to differentiate in the industry. And operations. So you will get a full coverage of this. And we are really driving better outcomes for our customers.

If you look at return on investment: cost per barrel, faster cycle times. We know that that’s what the industry needs. And that’s what we’re focused on. And again, very encouraging news from the industry and also from the customers as we have been going out and telling our story.

So with that, it’s my pleasure to bring up to the stage the current Chairman and CEO of Baker Hughes, Martin Craighead, to give his perspective on the industry and also how we see this transaction from a Baker Hughes perspective.

So Martin, over to you.

 

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DECEMBER 08, 2016 / 02:00PM GMT, BHI - Baker Hughes Inc Investor Meeting

 

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Martin Craighead  - Baker Hughes Incorporated - Chairman and CEO

Thanks, Lorenzo. All right. Good morning, everybody, and thanks for joining us here this morning. I’d like to address a couple of areas that I hope will provide some context for why this combination makes so much sense. And how it will create value amid the vast changes that we expect our industry to witness or endure over the coming years.

As part of this overview, I will offer some thoughts on how the market is evolving, how this will influence customer behavior, and what those customers are telling us that they need from their services and equipment providers.

In the ensuing presentations, you are going to hear specific examples of how the new Baker Hughes will meet those needs by helping customers overcome the challenges that they continue to face. And this is a very important point, because this merger is rooted in what we anticipate customer behavior to evolve.

So while the prospects for a market recovery has certainly improved, and indeed we are seeing the elements of that as we speak, we are still going to be subject to intense short-term volatility. If anything, commodity prices are oversensitive today to any new information on supply-demand, spend, CapEx budgets, rig count, activity changes -- you name it. And we are seeing it. Again, last week is a great example.

These more sudden spikes and drops in commodity prices are a function of the changing landscape of oil and gas production that we have observed as a result of the rise of the North American shale producer. And I would put forward that, in aggregate, this group behaves like the world’s largest marginal producer -- not swing producer, marginal producer. And the speed in which this producer can add or remove barrels is meaningful to the market, and, as we’ve seen again over the last several weeks, can bring immense volatility.

With this backdrop, it’s even more critical than ever for operators to find ways to navigate the sudden peaks and valleys of commodity price movement, achieving more stability for themselves, greater resiliency for themselves, and greater predictability for yourselves.

I think it’s fair to say that in spite of the fact that we’ve seen some successful examples over the years with regards to production volumes, efficiency gains, the industry as a whole has not been successful in achieving one of the most fundamental metrics for long-term value that you know better than I is return on invested capital.

For example, during the growth cycle of 2009 to 2014, integrated companies and NOCs marginally, during the growth cycle, exceeded their return on cost of capital by around 2 to 3 points, while our North American independent operators during that same period actually underperformed by 4 to 5 points. This subpar performance during the industry’s, again, growth cycle, paired with the expectation for continued uncertainty that I mentioned previously, customers and accordingly their investors rightly are concluding that unless they find a way to operate fundamentally differently, they are going to continue to deliver subpar returns.

So let me turn to what’s behind these metrics. And it starts with broad-based, frankly, inefficiencies that exist across the whole oil and gas ecosystem. Here’s an example. There’s 1.5 trillion barrels of proven reserves under the ground in the world today, yet recovery rates for oil and gas on average can be as low as 10% or less in the target-rich environments like the deepwater and the shale plays.

And some would say, well, the recovery rates can reach 50% in some basins around the world, and that is true. But the vast bottom line is that a substantial volume of proven resource is being left behind pipe.

So while reserves have clearly become more difficult to access and the complexity of how the resources are developed has continued to increase and the inefficiencies from the myriad of contractors involved will continue to fall short of acceptable returns unless something is done fundamentally different.

Now, look, I’m the first to acknowledge and brag at times about how this industry has made tremendous progress over the last 10 years because, frankly, the role of technology and the role of Baker Hughes and companies like GE Oil & Gas are at the forefront of making that happen. But even with these improvements, the current industry results, be it resource recovery, uptime performance, or delivering projects on schedule, would be considered unacceptable in most other industries.

So moving that efficiency curve by just a handful of points is worth not billions, but trillions of dollars to our industry and billions of dollars to the people who can figure that out. This demonstrates that there is a clear need for an equipment and services provider and digital partner who can help our customers close these efficiency gaps and turn them into productivity gains.

In fact, I believe the industry is moving beyond simple cost discussions to tackle sustainable structural improvements by focusing on the broader topic of productivity. And you are going to hear more about this today.

 

 

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DECEMBER 08, 2016 / 02:00PM GMT, BHI - Baker Hughes Inc Investor Meeting

Turning now to what we are hearing today from our customers, I’d like to share this with you. A couple of points. Number one: customers are fundamentally looking for a step change -- not incremental, step change -- in productivity that can change the economics of how they develop their assets.

Now, whether this is delivered in the form of a lower cost for manufactured products or from improvements in drilling efficiencies to automation, for example, or by developing more intelligent tools and leveraging data mining, they don’t really care. Customers are looking for intelligence on how to structurally improve their project economics.

And there’s another subtle point. With the scarcity of capital that’s being allocated to exploration, asset performance management has taken on a heightened importance for our customers. We are seeing goals today within our executive leadership, within our customer community, around production efficiency improvements and even ultimate recovery percentage improvements as E&P customers strive to do more with the assets that they already have. The bottom line for a technology company like Baker Hughes is that the unit cost for oil and gas production has to improve.

The second point I’ll share with you from our customers: they are looking for ways to differentiate themselves in a world that’s increasingly hard to differentiate in as geological risk has been removed from the equation as a result of these unconventionals. And as such, they are looking for a better experience with their service provider.

And this isn’t a soft, touchy customer experience I’m talking about. This is taking the form of customers experimenting with new well construction and production models, reaching out to explore new digital capabilities, actually going outside the industry for ideas that might be applied to their business. And finally, thinking through novel commercial arrangements.

In short, there’s an opportunity for growth through a new wave of innovation in this cycle and a growing demand to couple this with dramatic overhaul in how we think about customer experience.

With these trends as a backdrop, the evolving direction of Baker Hughes is put in perspective. In the last six months, we have restructured the Company, taking out significant costs. We have moved towards a more asset-light model to improve return on capital for ourselves, as confirmed with our recent announcement on pressure pumping. We have redoubled efforts on new products and innovation, and we have created growth opportunities by broadening our sales channels.

All of this has positioned us extremely well for the next chapter in our story and the impact we want to have for our customers and our shareholders. And that next chapter is Baker Hughes, a GE Company.

Now, one of the many reasons I’m so confident in the value creation potential of this combination is that I had a rare and unique opportunity, if you will, to look under the hood of GE Oil & Gas over the last several months. And I was blown away with the complementary benefits from the technology as well as from the GE Store. I see an opportunity to create a company that, frankly, has never existed in this industry.

The question is: Do you want to be a part of that? And again, it’s a result of the unparalleled technology, portfolio, and its product, its geographic, and its revenue stream diversity that’s going to make Baker Hughes far better than anyone to be better positioned for this industry’s cyclicality as well as bringing to bear better and more sustainable returns on capital.

Today, as we promised, we are going to give you a first look at some of the possibilities that a fullstream portfolio service provider can achieve and what we can do to become the productivity leader in this industry. The power of broad digital capability and what access means to an extraordinary technology portfolio that the broader GE can provide.

So with that, again, I want to thank you very much for being here. Thank you for your attention. And I’d like to invite Maria, Derek, and Rod to the stage.

 

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Maria Claudia Borras - General Electric Company - Chief Commercial Officer, GE Oil & Gas

Thank you, Martin. Good morning. I am Maria Claudia Borras and I am the Chief Commercial Officer for GE Oil & Gas. I joined GE 2 years ago, and before, I worked

21 years for Baker Hughes.

So in this section Derek, Rod, and I will cover how we will realize the revenue synergies. We have identified different parts to drive value for the new Baker Hughes and for our customers. We are now on the position to reach a greater number of countries, which it means it will be closer to the customers. We will be able to leverage relationships and current market positions using the complete range of products, services, and technical expertise from each company.

 

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DECEMBER 08, 2016 / 02:00PM GMT, BHI - Baker Hughes Inc Investor Meeting

We will be the only company that can address customer challenges at the asset level. We believe that we could create a new approach combining the strength of Baker Hughes in technology and the strength of GE that brings in the supply chain and in the digital platform to deliver to the market more intelligent products and operational solutions that are more modular and flexible to reduce complexity for our customers.

As we go through our journey and the fact that we will have access to a bigger and intelligent installed base, we will be able to offer different commercial models with different value propositions, contractual models with performance, and aligned to our customer goals. Additionally, we will be able to provide outcome-based solutions beyond what is available today in the industry. And we will have the optionality to marry our capabilities in risk management, capital and operational, surface and subsurface technologies, and potentially move from CapEx to OpEx expense.

The new Baker Hughes will count with a unique advantage to leverage the GE scale of the geographical footprint and the ability to participate in the joint oil and gas. And moving to the power generation, electrical grid, and transportation would make as part of the conversation at a country level.

One of these examples is in West Africa, initiated by GE. We were able to bring our combined offering in power and subsea and able to deliver an integrated solution from gas to power. Now, with the new Baker Hughes, we will be able to deliver end-to-end solutions to help our customers to manage risk and to accelerate the time to market to monetize the stranded gas globally.

Additionally, we see $50 billion of projects in the next 5 years in petro economies, where national oil companies have bias to integration. And this is now a substantial opportunity that we have access to.

As we are seeing, North American unconventionals are the short-cycle supplier and have responded accordingly. This is evident in the growth in rig account activity that have seen increase in 23 of the last 27 weeks, with horizontal rigs now accounting for 81% of the total activity in the US.

Improvements in well placement and well completion techniques have driven increase in well productivity. Complexity of wells will continue to rise as we see longer laterals and more power to completion.

Flow of capital is projected to follow with North America’s spend, growing approximately 80% from now to 2018, with Permian growth outpacing orders. Further improvements are needed for the increase in supply to be materialized.

There is clearly a lot of attention from operators in this space. So now let’s explore how the new Baker Hughes can deliver value in this segment. Delivering value in unconventionals is all about improving the economics of the play by driving down the costs per barrel for our customers. Through this downturn, the cost per barrel reductions come from service cost reductions and high grading of assets. These are cyclical improvement in costs.

Our focus is drive sustainable structural costs per barrel reduction. We believe that this is what the customers want and what the industry needs, no matter what the oil price is. Historically, the unconventionals in North America has evolved through empirical trial and error models, creating a huge amount of unused data.

A new end-user analytic approach will help us to develop a more scientific way to use the data, where lesson learned could be applied faster and implementation of new technologies and capabilities could flatten the learning curve and reduce cyclical rates and costs.

Now I will pass it to Derek.

 

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Derek Mathieson - Baker Hughes Incorporated - Chief Commercial Officer

So good morning. My name is Derek Mathieson; I’m the Chief Commercial Officer for Baker Hughes and also the integration planning leader on the Baker Hughes side for Baker Hughes, a GE company.

So let’s now take a look at the opportunity in deepwater and what the application of our fullstream portfolio could really mean. On the right-hand side of the slide are the areas where our Companies are active today. So we’re giving you a look under the hood.

In well construction, Baker Hughes is currently working on a new rotary steerable platform that will make a step change in both reliability and productivity for our customers. This platform is part of a broader 1-2-1 strategy for drilling services which Art Soucy will talk about later in the presentation and how this strategy could be accelerated by the GE Store.

 

 

DECEMBER 08, 2016 / 02:00PM GMT, BHI - Baker Hughes Inc Investor Meeting

 

In subsea and subsea drilling equipment, GE have been working on a couple of transformative programs. The first, as you know, is in the area of BOPs, which has been the source of much of the NPTs in deepwater drilling over the last five or six years.

Their recent launch of a new outcome-based services model, following a major technology upgrade in this business, is redefining performance expectation in this area, seeking to eliminate this major source of NPT.

The second is in a broader program to improve the overall cost of designing and manufacturing subsea production systems. The use of new digital modeling tools in 3-, 4-, and even 5D is significantly improving the interaction with customer design teams and the overall efficiency of delivering and commissioning these systems.

In production and LNG, which Rod will talk about in a minute, GE has driven a major shift to long-term service contracts, facilitated by the development of complementary digital technology. This is one of the earliest examples of the digital twin concept in the oilfield, where real-time performance data, combined with a comprehensive digital model, can relate to innovative commercial contracts with our customers that are improving productivity significantly.

Lastly, access to capital financing provides more flexibility in commercial model development, easing the cost of capital effect for our customers in their project economics.

Now, if we look at the left-hand side of the chart, these capabilities added together represent an influence over 55% of the combined CapEx and OpEx lifecycles spend in deepwater projects. Now, this is the numerator of lifting costs or the dollar in the dollar per BOE equation.

To put this in perspective, this is 2.5 times more than the coverage of the current Baker Hughes portfolio. So what does this mean? What could application of these productivity enhancing projects actually mean for the outcomes of our customers in deepwater?

The graph here shows a representation of all major unsanctioned deepwater projects from earlier this year, with project economics adjusted to reflect the current oilfield services environment. The x-axis illustrates the peak production potential of the projects, and the y-axis represents the project breakeven lifting costs, or dollar per BOE, and the bubble size represents the commercial or 2P recoverable reserves.

So if you filter the marginal NPV-positive projects at today’s oil price, and I’ve taken the range between $35 and $45 breakeven lifting costs, so these are projects that are marginal today. This adds up to 11 billion barrels of oil equivalent of reserves, with a peak production potential of almost 2 million barrels per day.

Now, a 10% improvement in lifting costs or an additional $5 per barrel added to the project economics would significantly improve these marginal projects and increase the probability of project sanction. Accelerating, in our estimations, up to 200 billion of addressable market in deepwater from projects that are known today.

To put this challenge in perspective, a 10% improvement in project lifting costs for Baker Hughes today standalone would translate into a requirement for a 50% improvement in productivity during the well construction phase alone. That same 10% improvement in project lifting costs at our new fullstream company translates into an 80% productivity target over the project lifecycle to achieve the same economic results, something that we think is easily achievable.

In summary, we are confident that meaningful structural improvements in productivity can be achieved for our customers in deepwater, revitalizing activity in this sector, even in a lower-for-longer oil price environment.

With that, I will hand over to Rod, who will provide some more insight into the evolution and implementation of outcome-based services models. Rod?

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Rod Christie - General Electric Company - President & CEO, Turbomachinery Solutions, GE Oil & Gas

Thank you, Derek. So I’m Rod Christie; I run the turbomachinery business for GE Oil & Gas. First, I just would reemphasize a little bit around what does the joint capabilities of Baker Hughes and GE coming together really mean.

You have seen many people in the space huddle together either in alliances or mergers to try and gain more insight across the value stream. When we talk about fullstream and we think of the value chain, we look not just at what we’ve talked about already with the ability to work between the different parts of the production cycle and project development cycle, but also the capability to look at demand creation through our Power business and get insight as to what’s going on.

When you look at the product and services capability of the combined Companies, it is unparalleled in this space. So from very early on in the reservoir development activities -- drilling, logging, through into thinking about production flow assurance activities -- these are integrated systems.

 

 

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Additional Information and Where to Find It

 

In connection with the proposed transaction between GE and Baker Hughes, Bear Newco, Inc. (“Newco”) will prepare and file with the SEC a registration statement on Form S-4 that will include a combined proxy statement/prospectus of Newco and Baker Hughes (the “Combined Proxy Statement/Prospectus”). Baker Hughes and Newco will prepare and file the Combined Proxy Statement/Prospectus with the SEC, and Baker Hughes will mail the Combined Proxy Statement/Prospectus to its stockholders and file other documents regarding the proposed transaction with the SEC. This communication is not a substitute for any proxy statement, registration statement, proxy statement/prospectus or other documents Baker Hughes and/or Newco may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE COMBINED PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, ANY AMENDMENTS OR SUPPLEMENTS TO THE COMBINED PROXY STATEMENT/PROSPECTUS, AND OTHER DOCUMENTS FILED BY BAKER HUGHES OR Newco WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION, BECAUSE THESE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain free copies of the Combined Proxy Statement/Prospectus and other documents filed with the SEC by Baker Hughes and/or Newco through the website maintained by the SEC at www.sec.gov. Investors and security holders will also be able to obtain free copies of the documents filed by Newco and/or Baker Hughes with the SEC on Baker Hughes’ website at http://www.bakerhughes.com or by contacting Baker Hughes Investor Relations at alondra.oteyza@bakerhughes.com or by calling +1-713-439-8822.

 

No Offer or Solicitation

 

This communication is for informational purposes only and not intended to and does not constitute an offer to subscribe for, buy or sell, the solicitation of an offer to subscribe for, buy or sell or an invitation to subscribe for, buy or sell any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

 

 

Participants in the Solicitation

 

GE, Baker Hughes, Newco, their respective directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of proxies in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, will be set forth in the Combined Proxy Statement/Prospectus and other relevant materials when it is filed with the SEC. Information regarding the directors and executive officers of GE is contained in GE’s proxy statement for its 2016 annual meeting of stockholders, filed with the SEC on March 16, 2016, its Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the SEC on February 26, 2016, its Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2016, which was filed with the SEC on November 9, 2016 and certain of its Current Reports filed on Form 8-K. Information regarding the directors and executive officers of Baker Hughes is contained in Baker Hughes’ proxy statement for its 2016 annual meeting of stockholders, filed with the SEC on April 11, 2016, its Annual Report on Form 10-K/A for the year ended December 31, 2015, which was filed with the SEC on February 19, 2016, its Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 which was filed with the SEC on October 25, 2016 and certain of its Current Reports filed on Form 8-K. These documents can be obtained free of charge from the sources indicated above.

 

 

 

 

Caution Concerning Forward-Looking Statements

 

This communication contains “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements regarding the proposed transaction between GE and Baker Hughes.  All statements, other than historical facts, including statements regarding the expected timing and structure of the proposed transaction; the ability of the parties to complete the proposed transaction considering the various closing conditions; the expected benefits of the proposed transaction such as improved operations, enhanced revenues and cash flow, synergies, growth potential, market profile, customers’ business plans and financial strength; the competitive ability and position of the combined company following completion of the proposed transaction, including the projected impact on GE’s earnings per share; oil and natural gas market conditions; costs and availability of resources; legal, economic and regulatory conditions; and any assumptions underlying any of the foregoing, are forward-looking statements.  Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions.  Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions.  Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements.  The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved.  Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) that one or more closing conditions to the transaction, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the proposed transaction, may require conditions, limitations or restrictions in connection with such approvals or that the required approval by the stockholders of Baker Hughes may not be obtained; (2) the risk that the proposed transaction may not be completed in the time frame expected by GE or Baker Hughes, or at all; (3) unexpected costs, charges or expenses resulting from the proposed transaction; (4) uncertainty of the expected financial performance of the combined company following completion of the proposed transaction; (5) failure to realize the anticipated benefits of the proposed transaction, including as a result of delay in completing the proposed transaction or integrating the businesses of GE, Baker Hughes and Newco; (6) the ability of the combined company to implement its business strategy; (7) difficulties and delays in achieving revenue and cost synergies of the combined company; (8) inability to retain and hire key personnel; (9) the occurrence of any event that could give rise to termination of the proposed transaction; (10) the risk that stockholder litigation in connection with the proposed transaction or other settlements or investigations may affect the timing or occurrence of the contemplated merger or result in significant costs of defense, indemnification and liability; (11) evolving legal, regulatory and tax regimes; (12) changes in general economic and/or industry specific conditions, including oil price changes; (13) actions by third parties, including government agencies; and (14) other risk factors as detailed from time to time in GE’s and Baker Hughes’ reports filed with the SEC, including GE’s and Baker Hughes’ annual report on Form 10-K, periodic quarterly reports on Form 10-Q, periodic current reports on Form 8-K and other documents filed with the SEC.  The foregoing list of important factors is not exclusive.

 

Any forward-looking statements speak only as of the date of this communication.  Neither GE nor Baker Hughes undertakes any obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise, except as required by law.  Readers are cautioned not to place undue reliance on any of these forward-looking statements.

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