(Photo: Ken Cedeno) A leading energy industry report has revealed a steadily climbing number of oil and gas rigs in the U.S., offering a harbinger of improved near-term oil and gas production stateside. A breakdown of published data indicated that oil rigs rose by five to 482 last week, while the number of gas rigs fell by two to 101, pointing to a net rise of three rigs. It also marked the second consecutive weekly rise taking the country's monthly rise to its highest level since November 2022. However, aw ...

Part I - Financial Information This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents unaudited condensed consolidated financial statements, including income, comprehensive income, financial position, equity, and cash flows, with detailed notes [Condensed Consolidated Statements of Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) This statement details the company's net income, earnings per share, total revenue, and operating income for the reported periods **Net Income and EPS (Q2 2024 vs Q2 2023):** | Metric | Q2 2024 | Q2 2023 | | :------------------------------------ | :------ | :------ | | Net income attributable to Baker Hughes Company | $579M | $410M | | Basic income per Class A common stock | $0.58 | $0.41 | | Diluted income per Class A common stock | $0.58 | $0.40 | **Net Income and EPS (6M 2024 vs 6M 2023):** | Metric | 6M 2024 | 6M 2023 | | :------------------------------------ | :------ | :------ | | Net income attributable to Baker Hughes Company | $1,034M | $985M | | Basic income per Class A common stock | $1.04 | $0.98 | | Diluted income per Class A common stock | $1.03 | $0.97 | **Total Revenue and Operating Income (Q2 2024 vs Q2 2023):** | Metric | Q2 2024 | Q2 2023 | | :---------------- | :------ | :------ | | Total Revenue | $7,139M | $6,315M | | Operating Income | $833M | $514M | **Total Revenue and Operating Income (6M 2024 vs 6M 2023):** | Metric | 6M 2024 | 6M 2023 | | :---------------- | :------ | :------ | | Total Revenue | $13,557M | $12,030M | | Operating Income | $1,486M | $952M | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents comprehensive income, including foreign currency translation adjustments, for the three and six months ended June 30 **Comprehensive Income Attributable to Baker Hughes Company:** | Period | 2024 | 2023 | | :------------------------------------ | :------ | :------ | | Three Months Ended June 30, | $453M | $641M | | Six Months Ended June 30, | $849M | $1,162M | **Foreign Currency Translation Adjustments:** | Period | 2024 | 2023 | | :------------------------------------ | :-------- | :------ | | Three Months Ended June 30, | $(128)M | $231M | | Six Months Ended June 30, | $(192)M | $169M | [Condensed Consolidated Statements of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Position) This statement provides a snapshot of the company's assets, liabilities, and equity at specific reporting dates **Key Financial Position Data:** | Metric | June 30, 2024 | December 31, 2023 | | :-------------------------- | :------------ | :---------------- | | Total Assets | $36,656M | $36,945M | | Cash and cash equivalents | $2,284M | $2,646M | | Total Current Liabilities | $12,586M | $12,991M | | Total Equity | $15,721M | $15,519M | [Condensed Consolidated Statements of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) This statement details changes in total equity, including dividends and share repurchases, for the reported periods **Total Equity:** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $15,721M | | December 31, 2023 | $15,519M | **Dividends and Share Repurchases (Six Months Ended June 30):** | Metric | 2024 | 2023 | | :------------------------------------ | :-------- | :------- | | Dividends on Class A common stock | $(419)M | $(384)M | | Repurchase and cancellation of Class A common stock | $(324)M | $(99)M | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement outlines cash flows from operating, investing, and financing activities for the reported periods **Cash Flows (Six Months Ended June 30):** | Activity | 2024 | 2023 | | :-------------------------- | :-------- | :-------- | | Operating activities | $1,132M | $1,320M | | Investing activities | $(530)M | $(414)M | | Financing activities | $(929)M | $(550)M | | Expenditures for capital assets | $(625)M | $(587)M | | Repurchase of Class A common stock | $(324)M | $(99)M | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%201.%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes the basis of financial statement presentation and summarizes significant accounting policies, including new standards - The financial statements consolidate all subsidiaries and eliminate intercompany accounts, prepared in accordance with U.S. GAAP and SEC rules for interim financial information[279](index=279&type=chunk) - The company is evaluating the impact of new accounting standards ASU 2023-09 (Income Taxes) and ASU 2023-07 (Segment Reporting), effective for periods beginning after December 15, 2024 and 2023 respectively[13](index=13&type=chunk)[14](index=14&type=chunk) **Supply Chain Finance Program Liabilities:** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $448M | | December 31, 2023 | $332M | [NOTE 2. CURRENT RECEIVABLES](index=10&type=section&id=NOTE%202.%20CURRENT%20RECEIVABLES) This note provides details on the company's current receivables, including customer receivables, at specific reporting dates **Current Receivables, Net:** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $7,051M | | December 31, 2023 | $7,075M | **Customer Receivables:** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $6,042M | | December 31, 2023 | $6,033M | [NOTE 3. INVENTORIES](index=10&type=section&id=NOTE%203.%20INVENTORIES) This note details total inventories, net, and inventory impairment charges for the reported periods **Total Inventories, Net:** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $5,126M | | December 31, 2023 | $5,094M | **Inventory Impairments (Three Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2023 | $15M | **Inventory Impairments (Six Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2023 | $33M | [NOTE 4. OTHER INTANGIBLE ASSETS](index=11&type=section&id=NOTE%204.%20OTHER%20INTANGIBLE%20ASSETS) This note provides information on total intangible assets, net, and associated amortization expense for the reported periods **Total Intangible Assets, Net:** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $4,019M | | December 31, 2023 | $4,093M | **Amortization Expense (Three Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $66M | | 2023 | $63M | **Amortization Expense (Six Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $133M | | 2023 | $126M | [NOTE 5. CONTRACT AND OTHER DEFERRED ASSETS](index=12&type=section&id=NOTE%205.%20CONTRACT%20AND%20OTHER%20DEFERRED%20ASSETS) This note details the company's contract and other deferred assets at specific reporting dates **Contract and Other Deferred Assets:** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $1,868M | | December 31, 2023 | $1,756M | [NOTE 6. PROGRESS COLLECTIONS AND DEFERRED INCOME](index=12&type=section&id=NOTE%206.%20PROGRESS%20COLLECTIONS%20AND%20DEFERRED%20INCOME) This note outlines progress collections and deferred income (contract liabilities) and revenue recognized from them **Progress Collections and Deferred Income (Contract Liabilities):** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $5,506M | | December 31, 2023 | $5,542M | **Revenue Recognized from Contract Liabilities (Beginning of Period):** | Period | 2024 | 2023 | | :------------------------------------ | :-------- | :------- | | Three Months Ended June 30, | $1,392M | $507M | | Six Months Ended June 30, | $2,868M | $1,468M | [NOTE 7. LEASES](index=12&type=section&id=NOTE%207.%20LEASES) This note provides information on total operating lease expense and the weighted-average remaining lease term **Total Operating Lease Expense (Three Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $223M | | 2023 | $210M | **Total Operating Lease Expense (Six Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $461M | | 2023 | $422M | - The weighted-average remaining lease term for operating leases was approximately **seven years** as of June 30, 2024[349](index=349&type=chunk) [NOTE 8. DEBT](index=13&type=section&id=NOTE%208.%20DEBT) This note details total debt, short-term and current portions, and compliance with debt covenants **Total Debt:** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $5,895M | | December 31, 2023 | $6,020M | **Short-term and Current Portion of Long-term Debt:** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $34M | | December 31, 2023 | $148M | - The company has a **$3.0 billion** committed unsecured revolving credit facility maturing in November 2028, with **no borrowings outstanding** as of June 30, 2024[172](index=172&type=chunk)[350](index=350&type=chunk) - The company was in compliance with all debt covenants as of June 30, 2024[199](index=199&type=chunk)[318](index=318&type=chunk) [NOTE 9. INCOME TAXES](index=14&type=section&id=NOTE%209.%20INCOME%20TAXES) This note presents the provision for income taxes and discusses factors affecting the effective tax rate **Provision for Income Taxes (Three Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $243M | | 2023 | $200M | **Provision for Income Taxes (Six Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $421M | | 2023 | $379M | - The difference between the U.S. statutory tax rate of **21%** and the effective tax rate is primarily related to income in jurisdictions with higher tax rates and losses with no tax benefit, partially offset by income subject to U.S. tax at an effective rate less than **21%** due to valuation allowances[25](index=25&type=chunk)[319](index=319&type=chunk) - The estimated impact of the Pillar Two Global Minimum Tax is **immaterial** to the Company for 2024[162](index=162&type=chunk) [NOTE 10. EQUITY](index=14&type=section&id=NOTE%2010.%20EQUITY) This note provides details on Class A common stock outstanding, repurchases, and cash dividends **Class A Common Stock Outstanding (in thousands):** | Date | Shares | | :---------------- | :------- | | June 30, 2024 | 992,941 | | January 1, 2024 | 997,709 | **Repurchase and Cancellation of Class A Common Stock (in thousands):** | Period | 2024 | 2023 | | :------------------------------------ | :------- | :------- | | Six Months Ended June 30, | 10,539 | 3,596 | **Cash Dividend Per Class A Common Stock:** | Period | 2024 | 2023 | | :------------------------------------ | :----- | :----- | | Three Months Ended June 30, | $0.21 | $0.19 | | Six Months Ended June 30, | $0.42 | $0.38 | [NOTE 11. EARNINGS PER SHARE](index=15&type=section&id=NOTE%2011.%20EARNINGS%20PER%20SHARE) This note presents basic and diluted net income per share attributable to common stockholders **Net Income Per Share Attributable to Common Stockholders (Three Months Ended June 30):** | Metric | 2024 | 2023 | | :---------------- | :----- | :----- | | Class A basic | $0.58 | $0.41 | | Class A diluted | $0.58 | $0.40 | **Net Income Per Share Attributable to Common Stockholders (Six Months Ended June 30):** | Metric | 2024 | 2023 | | :---------------- | :----- | :----- | | Class A basic | $1.04 | $0.98 | | Class A diluted | $1.03 | $0.97 | [NOTE 12. FINANCIAL INSTRUMENTS](index=16&type=section&id=NOTE%2012.%20FINANCIAL%20INSTRUMENTS) This note details investment securities, equity securities, derivatives, and related fair values and gains **Investment Securities (Estimated Fair Value):** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $1,046M | | December 31, 2023 | $1,042M | **Equity Securities with Readily Determinable Fair Values:** | Date | Amount | | :---------------- | :------- | | June 30, 2024 | $1,039M | | December 31, 2023 | $975M | **Gains Recorded to Earnings from Equity Securities (Three Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $19M | | 2023 | $29M | **Gains Recorded to Earnings from Equity Securities (Six Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $71M | | 2023 | $421M | **Total Derivatives (Fair Value):** | Date | Assets | Liabilities | | :---------------- | :------- | :---------- | | June 30, 2024 | $15M | $(64)M | | December 31, 2023 | $34M | $(76)M | - The notional amount of derivatives outstanding was **$4.3 billion** at June 30, 2024, primarily related to hedges of anticipated sales and purchases in foreign currency, commodity purchases, and changes in interest rates[363](index=363&type=chunk) [NOTE 13. REVENUE RELATED TO CONTRACTS WITH CUSTOMERS](index=19&type=section&id=NOTE%2013.%20REVENUE%20RELATED%20TO%20CONTRACTS%20WITH%20CUSTOMERS) This note provides total revenue and segment revenue, along with information on remaining performance obligations **Total Revenue (Three Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $7,139M | | 2023 | $6,315M | **Total Revenue (Six Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $13,557M | | 2023 | $12,030M | **Segment Revenue (Three Months Ended June 30, 2024):** | Segment | Amount | | :-------------------------- | :------- | | Oilfield Services & Equipment | $4,011M | | Industrial & Energy Technology | $3,128M | - The aggregate amount of the transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations was **$33.5 billion** as of June 30, 2024. Approximately **63%**, **75%**, and **91%** of this is expected to be recognized within 2, 5, and 15 years, respectively[40](index=40&type=chunk)[149](index=149&type=chunk) [NOTE 14. SEGMENT INFORMATION](index=20&type=section&id=NOTE%2014.%20SEGMENT%20INFORMATION) This note details the company's operating segments, Oilfield Services & Equipment and Industrial & Energy Technology, and their performance - The company operates through two segments: **Oilfield Services & Equipment (OFSE)** and **Industrial & Energy Technology (IET)**[41](index=41&type=chunk) **Segment Operating Income (Three Months Ended June 30):** | Segment | 2024 | 2023 | | :-------------------------- | :------- | :------- | | Oilfield Services & Equipment | $493M | $417M | | Industrial & Energy Technology | $442M | $311M | **Segment Operating Income (Six Months Ended June 30):** | Segment | 2024 | 2023 | | :-------------------------- | :------- | :------- | | Oilfield Services & Equipment | $915M | $789M | | Industrial & Energy Technology | $772M | $552M | [NOTE 15. RELATED PARTY TRANSACTIONS](index=21&type=section&id=NOTE%2015.%20RELATED%20PARTY%20TRANSACTIONS) This note describes transactions with related parties, including purchases from the Aero JV, where the company holds a 50% interest - The company has a **50% ownership interest** in an aeroderivative joint venture (Aero JV) with GE Vernova Inc[46](index=46&type=chunk) **Purchases from Aero JV (Three Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $173M | | 2023 | $131M | **Purchases from Aero JV (Six Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $276M | | 2023 | $245M | [NOTE 16. COMMITMENTS AND CONTINGENCIES](index=21&type=section&id=NOTE%2016.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines legal proceedings, including a securities class action, and off-balance sheet arrangements - The company is involved in legal proceedings, including an arbitration with International Engineering & Construction S.A. (IEC) and a securities class action related to C3.ai, Inc. Claims against the company in the C3.ai action were reasserted in April 2024[47](index=47&type=chunk)[48](index=48&type=chunk)[79](index=79&type=chunk) - Management does not expect the ultimate outcome of currently pending legal proceedings to have a **material adverse effect** on results of operations, financial position, or cash flows[78](index=78&type=chunk) - Total off-balance sheet arrangements were approximately **$5.3 billion** at June 30, 2024, and are not expected to have a **material effect** on financial position, results of operations, or cash flows[95](index=95&type=chunk) [NOTE 17. RESTRUCTURING, IMPAIRMENT AND OTHER](index=23&type=section&id=NOTE%2017.%20RESTRUCTURING%2C%20IMPAIRMENT%20AND%20OTHER) This note details restructuring, impairment, and other charges, primarily related to employee termination and exit activities **Restructuring, Impairment and Other Charges (Three Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $14M | | 2023 | $102M | **Restructuring, Impairment and Other Charges (Six Months Ended June 30):** | Year | Amount | | :--- | :------- | | 2024 | $21M | | 2023 | $158M | - Charges in 2023 primarily related to employee termination expenses for segment reorganization and corporate restructuring, and exit activities at specific locations[82](index=82&type=chunk)[158](index=158&type=chunk) [NOTE 18. BUSINESS ACQUISITIONS AND DISPOSITIONS](index=24&type=section&id=NOTE%2018.%20BUSINESS%20ACQUISITIONS%20AND%20DISPOSITIONS) This note summarizes business acquisitions and dispositions, noting no activity in 2024 but significant events in 2023 - No business acquisitions or dispositions occurred during the six months ended June 30, 2024[245](index=245&type=chunk) - During the first six months of 2023, the company acquired Altus Intervention for **$282 million cash** and sold its Nexus Controls business for **$293 million cash**[178](index=178&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=25&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides a detailed discussion of the company's financial performance, market conditions, and liquidity, highlighting strong Q2 2024 momentum [EXECUTIVE SUMMARY](index=25&type=section&id=EXECUTIVE%20SUMMARY) This summary highlights strong Q2 2024 momentum, revenue growth, margin expansion, and balanced outlook for energy markets - The company experienced **strong momentum** in Q2 2024, with meaningful improvements in financial results, including revenue growth and operating margin expansion[87](index=87&type=chunk) - Outlook remains **balanced for oil and gas**, with optimism for LNG and gas infrastructure, and continued momentum in new energy solutions[88](index=88&type=chunk)[111](index=111&type=chunk) - Transformation efforts continue, focusing on efficiency improvements and cost-optimization initiatives in the OFSE segment[90](index=90&type=chunk) - The company returned **$375 million** to shareholders in Q2 2024 through dividends and share repurchases, balancing cash returns with investments in growth opportunities[102](index=102&type=chunk) [BUSINESS ENVIRONMENT](index=26&type=section&id=BUSINESS%20ENVIRONMENT) This section analyzes trends in oil and natural gas prices and Baker Hughes rig counts across various regions **Oil and Natural Gas Prices (Three Months Ended June 30):** | Metric | 2024 | 2023 | | :-------------------------- | :----- | :----- | | Brent oil price ($/Bbl) | $84.68 | $77.99 | | WTI oil price ($/Bbl) | $81.81 | $73.54 | | Natural gas price ($/mmBtu) | $2.07 | $2.16 | **Oil and Natural Gas Prices (Six Months Ended June 30):** | Metric | 2024 | 2023 | | :-------------------------- | :----- | :----- | | Brent oil price ($/Bbl) | $83.79 | $79.58 | | WTI oil price ($/Bbl) | $79.69 | $74.73 | | Natural gas price ($/mmBtu) | $2.11 | $2.40 | **Baker Hughes Rig Count (Three Months Ended June 30):** | Region | 2024 | 2023 | % Change | | :-------------------------- | :--- | :--- | :------- | | North America | 738 | 836 | (12)% | | International | 963 | 960 | — % | | Worldwide | 1,701 | 1,796 | (5)% | **Baker Hughes Rig Count (Six Months Ended June 30):** | Region | 2024 | 2023 | % Change | | :-------------------------- | :--- | :--- | :------- | | North America | 785 | 909 | (14)% | | International | 964 | 938 | 3 % | | Worldwide | 1,749 | 1,847 | (5)% | [RESULTS OF OPERATIONS](index=28&type=section&id=RESULTS%20OF%20OPERATIONS) This section details the company's financial performance, including orders, revenue, and operating income by segment [Orders and Remaining Performance Obligations](index=29&type=section&id=Orders%20and%20Remaining%20Performance%20Obligations) This section reports total orders and remaining performance obligations, broken down by operating segment - Total orders for the three months ended June 30, 2024, were **$7.5 billion**, consistent with the prior year[253](index=253&type=chunk) **Orders (Six Months Ended June 30):** | Segment | 2024 | 2023 | | :-------------------------- | :-------- | :-------- | | Total Orders | $14.1 billion | $15.1 billion | | OFSE Orders | $7.7 billion | $8.3 billion | | IET Orders | $6.4 billion | $6.8 billion | - Remaining Performance Obligations (RPO) totaled **$33.5 billion** as of June 30, 2024, with **$3.3 billion** for OFSE and **$30.2 billion** for IET[149](index=149&type=chunk) [Revenue and Operating Income](index=30&type=section&id=Revenue%20and%20Operating%20Income) This section analyzes total revenue and operating income, including segment-specific performance and corporate expenses **Total Revenue (Q2 2024 vs Q2 2023):** | Metric | Q2 2024 | Q2 2023 | Change | % Change | | :---------------- | :------ | :------ | :----- | :------- | | Total Revenue | $7,139M | $6,315M | $825M | 13% | | Operating Income | $833M | $514M | $319M | 62% | **Total Revenue (6M 2024 vs 6M 2023):** | Metric | 6M 2024 | 6M 2023 | Change | % Change | | :---------------- | :------ | :------ | :----- | :------- | | Total Revenue | $13,557M | $12,030M | $1,527M | 13% | | Operating Income | $1,486M | $952M | $534M | 56% | **OFSE Segment Performance (Q2 2024 vs Q2 2023):** | Metric | Q2 2024 | Q2 2023 | Change | % Change | | :---------------- | :------ | :------ | :----- | :------- | | Revenue | $4,011M | $3,877M | $134M | 3% | | Operating Income | $493M | $417M | $76M | 18% | **OFSE Segment Performance (6M 2024 vs 6M 2023):** | Metric | 6M 2024 | 6M 2023 | Change | % Change | | :---------------- | :------ | :------ | :----- | :------- | | Revenue | $7,794M | $7,454M | $340M | 5% | | Operating Income | $915M | $789M | $126M | 16% | **IET Segment Performance (Q2 2024 vs Q2 2023):** | Metric | Q2 2024 | Q2 2023 | Change | % Change | | :---------------- | :------ | :------ | :----- | :------- | | Revenue | $3,128M | $2,438M | $691M | 28% | | Operating Income | $442M | $311M | $131M | 42% | **IET Segment Performance (6M 2024 vs 6M 2023):** | Metric | 6M 2024 | 6M 2023 | Change | % Change | | :---------------- | :------ | :------ | :----- | :------- | | Revenue | $5,763M | $4,576M | $1,187M | 26% | | Operating Income | $772M | $552M | $220M | 40% | **Corporate Expenses:** | Period | 2024 | 2023 | Change | | :------------------------------------ | :----- | :----- | :----- | | Three Months Ended June 30, | $88M | $97M | $(9)M | | Six Months Ended June 30, | $180M | $197M | $(17)M | **Other Non-Operating Income, Net:** | Period | 2024 | 2023 | Change | | :------------------------------------ | :----- | :----- | :----- | | Three Months Ended June 30, | $38M | $158M | $(120)M | | Six Months Ended June 30, | $67M | $544M | $(477)M | **Net Interest Expense:** | Period | 2024 | 2023 | Change | | :------------------------------------ | :----- | :----- | :----- | | Three Months Ended June 30, | $47M | $58M | $(11)M | | Six Months Ended June 30, | $88M | $122M | $(34)M | [LIQUIDITY AND CAPITAL RESOURCES](index=34&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's financial strength, cash flows, capital expenditures, and cash balance distribution - The company maintains **solid financial strength and liquidity**, with **$2.3 billion** in cash and cash equivalents as of June 30, 2024[142](index=142&type=chunk) **Net Cash Flows (Six Months Ended June 30):** | Activity | 2024 | 2023 | | :-------------------------- | :-------- | :-------- | | Operating activities | $1,132M | $1,320M | | Investing activities | $(530)M | $(414)M | | Financing activities | $(929)M | $(550)M | - Capital expenditures in 2024 are expected to be **up to 5% of annual revenue**, primarily for normal, recurring items[206](index=206&type=chunk) - Anticipated income tax payments for 2024 are in the range of **$900 million to $950 million**[183](index=183&type=chunk) - **75%** of the total cash balance is held outside the U.S. as of June 30, 2024, which may be subject to currency controls[208](index=208&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=37&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's exposure to market risk has not materially changed since December 31, 2023, with further details in the 2023 Annual Report - The company's exposure to market risk has **not materially changed** since December 31, 2023[188](index=188&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=37&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The company's disclosure controls were effective as of June 30, 2024, with no material changes in internal controls over financial reporting - The company's disclosure controls and procedures were **effective** at a reasonable assurance level as of June 30, 2024[189](index=189&type=chunk) - There has been **no material change** in internal controls over financial reporting during the quarter ended June 30, 2024[226](index=226&type=chunk) Part II - Other Information This section provides additional information on legal proceedings, risk factors, equity sales, and other disclosures [ITEM 1. LEGAL PROCEEDINGS](index=38&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is subject to legal proceedings, including a reasserted securities class action, but management expects no material adverse effect - Claims against the company were reasserted in April 2024 in a putative securities class action related to C3.ai, Inc[48](index=48&type=chunk) - Management does not expect the ultimate outcome of currently pending legal proceedings to have a **material adverse effect** on the company's results of operations, financial position, or cash flows[78](index=78&type=chunk) [ITEM 1A. RISK FACTORS](index=38&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company continues to be subject to the risk factors previously discussed in its 2023 Annual Report - The company and its operations continue to be subject to the risk factors previously discussed in the 'Risk Factors' sections of the 2023 Annual Report[227](index=227&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=38&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company repurchased 5.1 million shares for $166 million in Q2 2024, with approximately $1.9 billion remaining authorized **Class A Common Stock Repurchases (Three Months Ended June 30, 2024):** | Metric | Amount | | :------------------------------------ | :------- | | Total Number of Shares Purchased | 5,180,385 | | Average Price Paid Per Share | $32.20 | | Total Number of Shares Purchased as Part of a Publicly Announced Program | 5,139,574 | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | $1,893,645,541 | - The Board of Directors authorized a **$4 billion** repurchase program for Class A common stock, with approximately **$1.9 billion** remaining as of June 30, 2024[26](index=26&type=chunk)[217](index=217&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=38&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported during the period - No defaults upon senior securities were reported[229](index=229&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=38&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Information concerning mine safety violations or other regulatory matters is included in Exhibit 95 of this Quarterly Report - Information concerning mine safety violations or other regulatory matters is included in Exhibit 95 to this Quarterly Report[219](index=219&type=chunk) [ITEM 5. OTHER INFORMATION](index=39&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Certain officers and directors adopted or terminated Rule 10b5-1 trading arrangements for the sale of Class A common stock during the three months ended June 30, 2024 - During the three months ended June 30, 2024, certain officers and directors, including Nancy Buese, adopted or terminated Rule 10b5-1 trading arrangements for the sale of Class A common stock[220](index=220&type=chunk)[230](index=230&type=chunk) [ITEM 6. EXHIBITS](index=39&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed as part of the report, including articles of incorporation, director deferral plans, certifications, mine safety disclosure, and XBRL documents - Exhibits include the Fourth Amended and Restated Articles of Incorporation, Non-Employee Director Deferral Plan, certifications from the President/CEO and EVP/CFO, Mine Safety Disclosure, and various XBRL documents[220](index=220&type=chunk) [SIGNATURES](index=40&type=section&id=SIGNATURES) The report was duly signed on behalf of Baker Hughes Company by its EVP/CFO and SVP/Controller on July 26, 2024 - The report was signed by Nancy Buese, Executive Vice President and Chief Financial Officer, and Rebecca Charlton, Senior Vice President, Controller and Chief Accounting Officer, on July 26, 2024[222](index=222&type=chunk)

Financial Data and Key Metrics Changes - The company reported a 46% year-over-year growth in earnings per share (EPS) and a 25% increase in EBITDA, with EBITDA margins rising almost 150 basis points year-over-year to 15.8% [48][49][63] - Free cash flow for the quarter was $106 million, bringing the first half total to $608 million, with expectations for stronger free cash flow in the second half of the year [119][65] Business Line Data and Key Metrics Changes - The Integrated Energy Technology (IET) segment achieved $3.1 billion in revenue, up 28% year-over-year, driven by a 59% increase in Gas Tech Equipment revenues [147] - IET orders totaled $3.5 billion during the quarter, with non-LNG Gas Tech Equipment accounting for 97% of the total [67][43] - The Oilfield Services and Equipment (OFSE) segment reported EBITDA of $716 million, up 13% year-over-year, with a margin rate of 17.8%, increasing 144 basis points year-over-year [103][106] Market Data and Key Metrics Changes - The company anticipates high single-digit growth in international markets compared to last year, with strong performance in the Middle East and a seasonal recovery in the North Sea [36][70] - Year-to-date offtake contracting for LNG is 42% higher than the same period last year, indicating a record-breaking year for contracting offtake volumes [52] Company Strategy and Development Direction - The company is focusing on enhancing operational consistency and driving sustainable margin improvements, with a target of achieving 20% EBITDA margins in OFSE by 2025 and in IET by 2026 [107][108] - There is a strong emphasis on gas infrastructure and new energy markets, with expectations for significant growth in these areas due to rising global natural gas demand [55][83] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of natural gas in meeting growing power demand and the potential for LNG demand to increase by mid-single digits annually through the end of the decade [83][92] - The company remains optimistic about international growth, particularly in the Middle East, and anticipates a rebound in North America in the second half of 2025 [20][144] Other Important Information - The company returned $743 million to shareholders in the first half of the year, including $209 million in dividends and $166 million in share repurchases [66][99] - The record backlog in IET, ending the quarter at $30.2 billion, reflects a 10% year-over-year increase and positions the company for strong revenue visibility [68][97] Q&A Session All Questions and Answers Question: What are the key drivers for cash flow expectations? - Management noted that free cash flow is typically back-end loaded, influenced by timing of collections from key customers and down payments [3][7] Question: Can you discuss the growth in non-LNG orders? - Management confirmed strong orders across IET, particularly in gas infrastructure, and anticipates continued robust orders into 2025 [10][12] Question: What are the expectations for international growth? - Management expressed confidence in international growth, particularly in the Middle East, and noted that North America is expected to rebound in the second half of 2025 [20][144]

Baker Hughes Company (BKR) reported second-quarter 2024 adjusted earnings of 57 cents per share, which beat the Zacks Consensus Estimate of 49 cents. The bottom line also improved from the year-ago quarter's level of 39 cents. The strong quarterly results were primarily driven by significant contracts in its Oilfield Services & Equipment segment, including major contracts with Petrobras and the State Oil Company of Azerbaijan Republic. Additionally, the Industrial & Energy Technology segment's leadership in ...

Core Insights - Baker Hughes reported quarterly earnings of $0.57 per share, exceeding the Zacks Consensus Estimate of $0.49 per share, and showing an increase from $0.39 per share a year ago [3] - The company generated revenues of $7.14 billion for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 4.77%, and up from $6.32 billion in the same quarter last year [7] - Baker Hughes has outperformed consensus EPS estimates four times over the last four quarters [1] Company Performance - Baker Hughes shares have increased approximately 2.1% since the beginning of the year, while the S&P 500 has gained 13.8% [4] - The current Zacks Rank for Baker Hughes is 3 (Hold), indicating expected performance in line with the market in the near future [5] - The company has topped consensus revenue estimates three times over the last four quarters [7] Industry Context - The Oil and Gas - Field Services industry, to which Baker Hughes belongs, is currently ranked in the bottom 14% of over 250 Zacks industries [9] - Drilling Tools International Corp. is expected to report revenues of $42.72 million, reflecting a 12.7% increase from the previous year [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.55, with projected revenues of $7.04 billion, and for the current fiscal year, the estimate is $2.09 on revenues of $27.58 billion [15] - The sustainability of Baker Hughes' stock price movement will largely depend on management's commentary during the earnings call [10]

Baker Hughes Company Announces Second-Quarter 2024 Results • RPO of $33.5 billion, including record IET RPO of $30.2 billion. • GAAP diluted EPS of $0.58 and adjusted diluted EPS* of $0.57. HOUSTON & LONDON (July 25, 2024) – Baker Hughes Company (Nasdaq: BKR) ("Baker Hughes" or the "Company") announced results today for the second quarter of 2024. "We continued the positive trend of returning meaningful cash to shareholders. In the quarter, we paid dividends of $209 million and repurchased $166 million of s ...

Second-quarter highlights Orders of $7.5 billion, including $3.5 billion of IET orders. RPO of $33.5 billion, including record IET RPO of $30.2 billion. Revenue of $7.1 billion, up 13% year-over-year. Net income attributable to the Company of $579 million. GAAP diluted EPS of $0.58 and adjusted diluted EPS* of $0.57. Adjusted EBITDA* of $1,130 million, up 25% year-over-year. Cash flows from operating activities of $348 million and free cash flow* of $106 million. Returns to shareholders of $375 million, inc ...

Core Viewpoint - Baker Hughes announced a quarterly cash dividend of $0.21 per share, reflecting a 5% increase compared to the same quarter last year [1][3]. Company Overview - Baker Hughes (NASDAQ: BKR) is an energy technology company providing solutions to energy and industrial customers globally, with operations in over 120 countries [2]. Dividend Details - The declared quarterly cash dividend of $0.21 per share is payable on August 16, 2024, to shareholders of record on August 6, 2024 [3]. - The dividend reflects a 5% increase, or $0.01, compared to the same quarter last year [1][3]. - The company expects to fund its quarterly cash dividend from cash generated from operations [4].

HOUSTON and LONDON, July 25, 2024 (GLOBE NEWSWIRE) -- Baker Hughes (NASDAQ: BKR) announced today that the Baker Hughes Board of Directors declared a quarterly cash dividend of $0.21 per share of Class A common stock payable on Aug. 16, 2024, to holders of record on Aug. 6, 2024. In line with our stated goal to responsibly grow the dividend over time, the dividend reflects a 5% increase, or $0.01, compared to the same quarter last year. Baker Hughes expects to fund its quarterly cash dividend from cash gener ...

Baker Hughes Company (BKR) is set to report second-quarter 2024 results on Jul 25, after the closing bell. The company beat on earnings in each of the trailing four quarters, delivering an average surprise of 11.4%. This is depicted in the graph below: The Zacks Consensus Estimate for second-quarter earnings per share of 49 cents has witnessed one upward revision and one downward revision in the past seven days. The consensus estimate implies an increase of 25.6% from the year-ago reported number. Factors t ...