85EXHIBIT 2.33 Unusual charges note: Baker Hughes Inc., years ended
September 30 (in millions).
1997
During the fourth quarter of 1997, the Company recognized a $52.1 million unusual charge
consisting of the following (millions of dollars):
Baker Petrolite:
Severance for 140 employees $ 2.2
Relocation of people and equipment 3.4
Environmental 5.0
Abandoned leases 1.5
Integration costs 2.8
Inventory write-down 11.3
Write-down of other assets 9.3
Drilex:
Write-down of property and other assets 4.1
Banking and legal fees 3.0
Discontinued product lines:
Severance for 50 employees 1.5
Write-down of inventory, property and other assets 8.0
Total $52.1
In connection with the acquisitions of Petrolite and Drilex, the Company recorded un-
usual charges of $35.5 million and $7.1 million, respectively, to combine the acquired opera-
tions with those of the Company. The charges include the cost of closing redundant facilities,
eliminating or relocating personnel and equipment and rationalizing inventories that require
disposal at amounts less than their cost. A $9.5 million charge was recorded as a result of the
decision to discontinue a low margin, oilfield product line in Latin America and to sell the
Tracor Europa subsidiary, a computer peripherals operation, which resulted in a write-down
of the investment to net realizable value. Cash provisions of the unusual charge totaled $19.4
million. The Company spent $5.5 million in 1997 and expects to spend substantially all of the
remaining $13.9 million in 1998.
1996
During the third quarter of 1996, the Company recognized a $39.6 million unusual charge
consisting of the following (millions of dollars):
Patent write-off $ 8.5
Impairment of joint venture 5.0
Restructurings:
Severance for 360 employees 7.1
Relocation of people and equipment 2.3
Abandoned leases 2.8
Inventory write-down 1.5
Write-down of assets 10.4
Other 2.0
Total $39.6
The Company has certain oilfield operations patents that no longer protect commer-
cially significant technology resulting in the write-off of $8.5 million. A $5.0 million impair-
ment of a Latin America joint venture was recorded due to changing market conditions in the
region in which it operates. The Company recorded a $24.1 million restructuring charge in-
cluding the downsizing of Baker Hughes INTEQ’s Singapore and Paris operations, a reorga-
nization of EIMCO Process Equipment’s Italian operations and the consolidation of certain
Baker Oil Tools manufacturing operations. Cash provisions of the charge totaled $14.3 mil-
lion. The Company spent $4.2 million in 1996, $6.3 million in 1997 and expects to spend the
remaining $3.8 million in 1998.
SOURCE: Baker Hughes Inc., annual report, September 1997, 45.