Baker Hughes(US:BKR)2025-02-04 12:05Financial Performance - In 2024, the company generated revenues of $27.8 billion, a 9% increase from $25.5 billion in 2023, primarily driven by a $2.1 billion increase in IET revenue[200]. - Operating income rose to $3.1 billion in 2024, up $0.8 billion or 33% from $2.3 billion in 2023, due to higher volume and cost optimization efforts[200][226]. - Revenues for the year ended December 31, 2024, were $27,829 million, with net income of $2,645 million[284]. - The Oilfield Services & Equipment (OFSE) segment revenue increased by $268 million, or 2%, to $15,628 million in 2024, driven by Subsea & Surface Pressure Systems (SSPS) growth[232]. - The Industrial & Energy Technology (IET) segment revenue increased by $2,055 million, or 20%, to $12,201 million in 2024, primarily due to growth in Gas Technology Equipment[235]. Shareholder Returns - The company returned a total of $1.3 billion to shareholders in 2024 through dividends and share repurchases, with a quarterly dividend increase to $0.21 per share[202]. - Dividends paid to Class A stockholders increased to $836 million in 2024 from $786 million in 2023[269]. - The company repurchased 15.2 million shares of Class A common stock for $484 million in 2024, compared to 16.3 million shares for $538 million in 2023[270]. Orders and Backlog - Total orders decreased to $28.24 billion in 2024 from $30.52 billion in 2023, with a notable decline in Oilfield Services & Equipment orders[222]. - The remaining performance obligations (RPO) totaled $33.1 billion as of December 31, 2024, with $30.1 billion attributed to IET[223]. Cash Flow and Capital Expenditures - Operating cash flows for 2024 were $3,332 million, an increase of 8.8% from $3,062 million in 2023 and a significant increase from $1,888 million in 2022[258]. - Cash flows used in investing activities were $1,016 million in 2024, compared to $817 million in 2023 and $1,564 million in 2022[263]. - Capital expenditures for 2024 amounted to $1,278 million, up from $1,224 million in 2023 and $989 million in 2022[264]. Debt and Liquidity - The company maintained cash and cash equivalents of $3.4 billion as of December 31, 2024, up from $2.6 billion in 2023[250]. - The company has a $3 billion committed unsecured revolving credit facility maturing in November 2028, with no borrowings under the agreement as of December 31, 2024[252]. - The company repaid long-term debt of $143 million in 2024, following a repayment of $651 million in 2023[269]. - The company’s long-term debt as of December 31, 2024, totaled $5.706 billion, with a weighted average interest rate of 4.18%[309]. Tax and Impairment - In 2024, the company recorded income taxes of $257 million, a decrease from $685 million in 2023, primarily due to a $664 million reversal of a valuation allowance[229]. - The effective tax rate is influenced by the repatriation of foreign earnings, with $455 million of gross unrecognized tax benefits reported as of December 31, 2024[299]. - The company performs annual impairment tests of goodwill, with significant estimates and assumptions involved in determining fair value[293]. Market Conditions and Outlook - The global LNG project pipeline remains strong, supporting the shift towards natural gas and LNG development[199]. - The average Brent oil price in 2024 was $80.52 per barrel, while WTI oil prices averaged $76.63 per barrel, reflecting a decrease from previous years[211]. - The company expects a muted outlook for global upstream spending in 2025 due to oil price volatility and a well-supplied oil market[198]. Segment Performance - The OFSE segment operating income rose to $1,988 million in 2024, up from $1,746 million in 2023, reflecting higher prices and cost-out initiatives[233]. - The IET segment operating income improved to $1,830 million in 2024, compared to $1,310 million in 2023, driven by higher volume and cost-out initiatives[236]. - The OFSE segment's operating margin improved to 12.7% in 2024, up from 11.4% in 2023, indicating enhanced operational efficiency[231]. - The IET segment's operating margin increased to 15.0% in 2024, compared to 12.9% in 2023, reflecting better cost management[235]. Risk Management - The company is subject to interest rate risk on its debt and investment portfolio, with interest rate swaps converting $500 million of fixed-rate debt into floating rate instruments[307]. - As of December 31, 2024, a 1% appreciation or depreciation in the U.S. dollar would impact pre-tax earnings by less than $15 million[313]. - The company had outstanding foreign currency forward contracts with notional amounts of $3.0 billion and $3.6 billion to hedge exposure to currency fluctuations at December 31, 2024 and 2023, respectively[312].