LINEA INCO 3Q 2024 Results October 23, 2024 e Baker Hughes Copyright 2024 Baker Hughes Company. All rights reserved. The information contained in this document is company confidential and proprietary property of Baker Hughes and its affiliates. It is used only for the benefit of Baker Hughes and may not be distributed, transmitted, reproduced, altered, or used for any purpose without the express written consent of Baker Hughes. This presentation (and oral statements made regarding the subjects of this prese ...

Exhibit 99.1 Baker Hughes Baker Hughes Company Announces Third-Quarter 2024 Results Third-quarter highlights • Orders of $6.7 billion, including $2.9 billion of IET orders. • RPO of $33.4 billion, including record IET RPO of $30.2 billion. • Revenue of $6.9 billion, up 4% year-over-year. • Attributable net income of $766 million. • GAAP diluted EPS of $0.77 and adjusted diluted EPS* of $0.67. • Adjusted EBITDA* of $1,208 million, up 23% year-over-year. • Cash flows from operating activities of $1,010 millio ...

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 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 ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for the first quarter ended March 31, 2024, show a 12% year-over-year increase in total revenue to $6.4 billion, while net income attributable to the company decreased to $455 million from $576 million, primarily due to a significant reduction in other non-operating income from equity securities, and cash flow from operations substantially increased to $784 million Q1 2024 vs Q1 2023 Key Financials (in millions, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Total Revenue** | $6,418 | $5,716 | | **Operating Income** | $653 | $438 | | **Net Income Attributable to Baker Hughes** | $455 | $576 | | **Diluted EPS** | $0.45 | $0.57 | | **Cash Flow from Operating Activities** | $784 | $461 | - The decrease in net income was primarily driven by a significant drop in 'Other non-operating income, net' to **$29 million** in Q1 2024 from **$386 million** in Q1 2023, largely due to a smaller gain from the change in fair value of certain equity investments compared to the prior year[8](index=8&type=chunk)[62](index=62&type=chunk) Financial Position Summary (in millions) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | $37,141 | $36,945 | | **Total Liabilities** | $21,591 | $21,426 | | **Total Equity** | $15,550 | $15,519 | [Note 13: Revenue Analysis](index=18&type=section&id=NOTE%2013.%20REVENUE%20RELATED%20TO%20CONTRACTS%20WITH%20CUSTOMERS) Revenue by Segment and Product Line (in millions) | Segment / Product Line | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Oilfield Services & Equipment (OFSE)** | **$3,783** | **$3,577** | | - Well Construction | $1,061 | $1,061 | | - Completions, Intervention & Measurements | $1,006 | $909 | | - Production Solutions | $945 | $938 | | - Subsea & Surface Pressure Systems | $771 | $670 | | **Industrial & Energy Technology (IET)** | **$2,634** | **$2,138** | | - Gas Technology Equipment | $1,210 | $831 | | - Gas Technology Services | $614 | $591 | | - Industrial Products & Solutions | $992 | $685 | | - Climate Technology Solutions | $83 | $31 | | **Total Revenue** | **$6,418** | **$5,716** | - As of March 31, 2024, the company had Remaining Performance Obligations (RPO) of **$32.7 billion**, with the majority expected to be recognized as revenue over the next 5 years[151](index=151&type=chunk) [Note 14: Segment Performance](index=19&type=section&id=NOTE%2014.%20SEGMENT%20INFORMATION) Segment Revenue and Operating Income (in millions) | Segment | Q1 2024 Revenue | Q1 2023 Revenue | Q1 2024 Operating Income | Q1 2023 Operating Income | | :--- | :--- | :--- | :--- | :--- | | Oilfield Services & Equipment (OFSE) | $3,783 | $3,577 | $422 | $371 | | Industrial & Energy Technology (IET) | $2,634 | $2,138 | $330 | $241 | | **Total Segment** | **$6,418** | **$5,716** | **$752** | **$612** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported strong momentum in Q1 2024, with a 12% revenue increase driven by higher volumes in both the IET and OFSE segments, and the outlook remains positive, supported by a multiyear upstream spending cycle led by international and offshore markets, and a strong LNG project pipeline, while the company continues its transformation and cost-out initiatives and maintains a flexible capital allocation policy, evidenced by an increased dividend and share repurchases - The company generated revenue of **$6,418 million** in Q1 2024, a **12%** increase from Q1 2023, primarily driven by higher volume in IET from Gas Technology Equipment project execution and better activity in OFSE[45](index=45&type=chunk) - Management believes in a durable, multiyear upstream spending cycle that is less sensitive to commodity price swings and led by international and offshore markets[41](index=41&type=chunk) - The company remains optimistic about the global natural gas outlook, with a strong LNG project pipeline driven by energy demand growth and decarbonization efforts[43](index=43&type=chunk) - In Q1 2024, the company returned **$368 million** to shareholders through dividends and share repurchases, and increased its quarterly dividend to **$0.21 per share**[17](index=17&type=chunk) [Business Environment & Outlook](index=24&type=section&id=BUSINESS%20ENVIRONMENT) The business environment in Q1 2024 was characterized by relatively stable oil prices and a decrease in natural gas prices compared to the prior year, with the worldwide rig count declining by 5%, driven by a 15% drop in North America, while international rig counts grew by 5%, and the company expects North American activity to see a modest recovery in the second half of 2024, with solid growth in international spending throughout the year Average Oil & Natural Gas Prices | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Brent Oil Price ($/Bbl) | $82.92 | $81.07 | | WTI Oil Price ($/Bbl) | $77.50 | $75.93 | | Natural Gas Price ($/mmBtu) | $2.15 | $2.64 | Average Rig Count | Region | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | North America | 831 | 982 | (15)% | | International | 965 | 915 | 5% | | **Worldwide** | **1,796** | **1,897** | **(5)%** | - Outlook for 2024 includes a flattening of North American activity into Q2 before a modest recovery in the second half, and solid growth in international spending compared to 2023[19](index=19&type=chunk) [Results of Operations](index=26&type=section&id=RESULTS%20OF%20OPERATIONS) Total revenue for Q1 2024 increased by $702 million (12%) year-over-year, with the IET segment contributing $496 million and the OFSE segment $206 million to this growth, and total segment operating income rose by $139 million, driven by higher volume, price, and cost-out initiatives in both segments, which were partially offset by unfavorable business mix and inflationary pressures - OFSE revenue increased **6%** to **$3,783 million**, driven by a **$208 million** increase in international revenue, particularly in Europe/CIS/Sub-Saharan Africa and Middle East/Asia[215](index=215&type=chunk) - OFSE operating income grew to **$422 million** from **$371 million**, primarily due to higher volume, price, and cost-out initiatives[5](index=5&type=chunk) - IET revenue surged **23%** to **$2,634 million**, mainly from higher volume in Gas Technology Equipment[198](index=198&type=chunk) - IET operating income increased to **$330 million** from **$241 million**, driven by higher volume, price, and cost-out initiatives, partially offset by unfavorable mix and higher R&D spending[224](index=224&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintained a solid liquidity position with $2.7 billion in cash and cash equivalents as of March 31, 2024, with net cash from operating activities significantly increasing to $784 million, and key uses of cash included $333 million in capital expenditures, $210 million in dividends, and $158 million in share repurchases, while the company has a $3 billion undrawn revolving credit facility and expects the impact of the Pillar Two global minimum tax to be immaterial in 2024 Cash Flow Summary (in millions) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Operating | $784 | $461 | | Investing | ($269) | ($229) | | Financing | ($427) | ($250) | - The company increased its quarterly dividend to **$0.21 per share** and repurchased **5.4 million shares** for **$158 million** during Q1 2024[245](index=245&type=chunk)[264](index=264&type=chunk) - As of March 31, 2024, the company had no borrowings under its **$3 billion** committed unsecured revolving credit facility and no outstanding commercial paper[239](index=239&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&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, and for detailed disclosures, the report refers to the company's 2023 Annual Report - The company's exposure to market risk has not changed materially since the end of the previous fiscal year[282](index=282&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2024, with no material changes to internal controls over financial reporting during the quarter - Management concluded that as of the end of the period, the company's disclosure controls and procedures were effective at a reasonable assurance level[283](index=283&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[270](index=270&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to legal proceedings in the ordinary course of business, and a putative securities class action lawsuit related to C3.ai, Inc., which had named the company as a defendant, was amended to reassert claims after a prior dismissal, with the company currently unable to predict the outcome of these proceedings - In a securities class action related to C3.ai, Inc., claims against the company were dismissed on February 22, 2024, but plaintiffs filed an amended complaint on April 4, 2024, reasserting claims, and the outcome is currently unpredictable[55](index=55&type=chunk) - Management does not expect the ultimate outcome of currently pending legal proceedings to have a material adverse effect on the company's financial position, results, or cash flows[9](index=9&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023 - The company's risk factors have not materially changed from those discussed in the 2023 Annual Report[271](index=271&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2024, the company repurchased 5.4 million shares of its Class A common stock for a total of $158 million under its publicly announced repurchase program, and as of March 31, 2024, approximately $2.1 billion remained authorized for future repurchases Q1 2024 Share Repurchases | Metric | Value | | :--- | :--- | | Total Shares Repurchased | 5.4 million | | Average Price Paid per Share | $29.32 | | Total Cost | $158 million | - As of March 31, 2024, the company had approximately **$2.1 billion** remaining under its share repurchase authorization[159](index=159&type=chunk)[285](index=285&type=chunk)

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $943 million, a 21% year-over-year increase, exceeding the midpoint of guidance due to stronger performance in IET [60] - GAAP diluted earnings per share were $0.45, with adjusted earnings per share increasing by 50% compared to the same quarter last year [60] - Free cash flow was robust at $502 million, with a target for full-year free cash flow conversion of 45% to 50% [63] Business Line Data and Key Metrics Changes - IET orders totaled over $2.9 billion, with non-LNG Gas Tech Equipment orders more than tripling year-over-year, highlighting the diversity of the customer base [71][72] - OFSE revenue was $3.8 billion, up 6% year-over-year, with EBITDA in the segment increasing by 11% year-over-year [70] - IET revenue for the quarter was $2.6 billion, a 23% increase from the prior year, driven by a 46% increase in Gas Tech Equipment revenues [73] Market Data and Key Metrics Changes - The company expects E&P spending to increase by high single digits this year, with a decline in North American gas basins partially offset by modest improvement in oil activity [25][26] - Global LNG demand is projected to grow by mid-single digits annually through the end of the decade, supported by a strong demand outlook [32][34] - The company anticipates continued upstream spending growth, particularly in offshore markets in Latin America and West Africa [27] Company Strategy and Development Direction - The company is focused on achieving 20% EBITDA margins for both OFSE and IET segments by 2025 and 2026, respectively, through operational improvements and cost efficiencies [75][92] - A three-pronged approach of transforming the core, investing for growth, and positioning for new energy frontiers is being employed to enhance profitability [77] - The company is well-positioned to capitalize on the transition towards gas and increasing investments in new energy and chemicals [44][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the orders range for 2024, with a strong pipeline of activity and growing customer confidence in gas infrastructure [3][4] - The company remains optimistic about achieving new energy orders between $800 million and $1 billion, reflecting a tripling of new energy orders since 2021 [39] - Management noted that the macroeconomic environment, including oil price dynamics and geopolitical risks, will influence the company's performance but does not alter the strategic outlook [23][24] Other Important Information - The company increased its quarterly dividend by $0.01 to $0.21, representing an 11% year-over-year increase, and repurchased $158 million of shares [22][64] - The balance sheet remains strong, with cash of $2.7 billion and a net debt to trailing 12-month adjusted EBITDA ratio of 0.8x [63] Q&A Session Summary Question: Can you discuss the annual order guidance for IET? - Management remains confident in the 2024 orders range, having booked over $2.9 billion in orders, including significant awards from Aramco and Black & Veatch [2][15] Question: What are the drivers for achieving 20% OFSE margins next year? - Management highlighted productivity, cost management, and price volume as key drivers, with a cost-out program in place to enhance efficiency [5][6][7] Question: How does the company view the competitive landscape in production optimization? - Management emphasized the company's strong capabilities in production optimization and the importance of mature asset management, which represents a significant opportunity [102][108] Question: What impact does the Saudi MSC reduction have on Baker Hughes? - Management sees the MSC reduction as an opportunity for growth in gas production and infrastructure, benefiting the IET business [112][114] Question: Can you elaborate on the non-LNG Gas Tech Equipment orders? - Management noted that non-LNG orders have tripled year-over-year, driven by strong demand across various end markets, including upstream and midstream sectors [123][125]

[Q1 2024 Performance Overview](index=1&type=section&id=Q1%202024%20Performance%20Overview) Baker Hughes reported strong Q1 2024 financial results, marked by revenue and earnings growth, strategic contract wins, and shareholder returns [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Baker Hughes achieved strong Q1 2024 financial performance with 12% revenue growth, 21% adjusted EBITDA growth, and a 50% increase in adjusted diluted EPS Q1 2024 Key Financial Metrics | Metric | Q1 2024 | YoY Change | | :--- | :--- | :--- | | Revenue | $6.4B | +12% | | Net Income | $455M | -21% | | Adjusted Net Income* | $429M | +48% | | Adjusted EBITDA* | $943M | +21% | | GAAP Diluted EPS | $0.45 | -20% | | Adjusted Diluted EPS* | $0.43 | +50% | | Cash Flow from Operations | $784M | +70% | | Free Cash Flow* | $502M | >100% | - Total orders for the quarter were **$6.5 billion**, a decrease of **14%** year-over-year, primarily driven by the timing of large orders in the prior year[3](index=3&type=chunk)[10](index=10&type=chunk) - The company returned **$368 million** to shareholders, which included **$158 million** in share repurchases and a quarterly dividend increase to **$0.21** per share, an **11%** year-over-year increase[5](index=5&type=chunk)[7](index=7&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Lorenzo Simonelli affirmed a strong Q1 2024, positioning the company for full-year guidance, driven by positive order momentum and commitment to shareholder returns - The company is on track to achieve its full-year guidance based on the solid Q1 results[6](index=6&type=chunk) - Strong orders in the Industrial & Energy Technology (IET) segment, totaling **$2.9 billion**, were a key highlight, including significant awards from Aramco and Black & Veatch for LNG projects[7](index=7&type=chunk) - The company remains on track to return **60% - 80%** of free cash flow to shareholders[7](index=7&type=chunk) [Business & Operational Highlights](index=3&type=section&id=Business%20%26%20Operational%20Highlights) The company secured significant multi-year contracts across OFSE and IET segments, including major awards for gas technology equipment and climate technology solutions - **OFSE Segment Wins:** - Secured two multi-year awards from Petrobras for integrated well construction and artificial lift services in Brazil - Saw strong demand for its Lucida advanced rotary steerable service with three contracts in North American land[13](index=13&type=chunk)[14](index=14&type=chunk) - **IET Segment Wins:** - Awarded a major contract by Worley/Aramco to supply 17 compressor trains for Saudi Arabia's Master Gas System 3 project - Secured an order from Black & Veatch to supply electric-driven liquefaction technology for the Cedar LNG project in Canada - Won three orders to support natural gas field development in Abu Dhabi[14](index=14&type=chunk)[15](index=15&type=chunk)[17](index=17&type=chunk) - **Climate Technology Solutions (CTS) Momentum:** - Received an award from Snam for hydrogen-ready NovaLT12™ turbines for a new gas compressor station in Italy - Booked a contract to supply zero-emissions integrated compressor technology to TotalEnergies in Argentina[18](index=18&type=chunk) [Consolidated Financial Results](index=4&type=section&id=Consolidated%20Financial%20Results) The company's consolidated financial results for Q1 2024 show strong year-over-year growth in revenue and operating income, alongside healthy cash flow generation [Overall Performance Analysis](index=4&type=section&id=Overall%20Performance%20Analysis) Consolidated revenue grew **12%** year-over-year to **$6.4 billion**, with adjusted operating income increasing **29%** due to volume, pricing, and cost-out initiatives Consolidated Revenue & Operating Income (in millions) | Metric | Q1 2024 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Total Revenue | $6,418 | +12% | -6% | | Total Segment Operating Income | $752 | +23% | -17% | | Adjusted Operating Income* | $660 | +29% | -19% | | Adjusted EBITDA* | $943 | +21% | -14% | - The year-over-year increase in adjusted operating income and EBITDA was driven by volume and pricing in both segments and structural cost-out initiatives[26](index=26&type=chunk) - The sequential decrease in adjusted operating income and EBITDA was driven by lower volume and negative mix in both IET and OFSE[26](index=26&type=chunk) - The company's total book-to-bill ratio in the quarter was **1.0**, while the IET segment's book-to-bill was **1.1**[22](index=22&type=chunk) [Other Financial Items](index=5&type=section&id=Other%20Financial%20Items) The company generated **$784 million** in operating cash flow and **$502 million** in free cash flow, with Remaining Performance Obligations at **$32.7 billion** Q1 2024 Cash Flow & Capex (in millions) | Metric | Q1 2024 | | :--- | :--- | | Cash Flow from Operating Activities | $784 | | Capital Expenditures, net | $282 | | Free Cash Flow* | $502 | Remaining Performance Obligations (RPO) (in billions) | RPO Category | Q1 2024 | QoQ Change | | :--- | :--- | :--- | | Total RPO | $32.7 | -$0.8 | | OFSE RPO | $3.4 | -5% | | IET RPO | $29.3 | -2% | [Segment Performance](index=6&type=section&id=Segment%20Performance) Both OFSE and IET segments demonstrated strong year-over-year performance, with OFSE driven by international markets and IET by gas technology equipment [Oilfield Services & Equipment (OFSE)](index=6&type=section&id=Oilfield%20Services%20%26%20Equipment%20%28OFSE%29) The OFSE segment reported **$3.8 billion** in revenue, up **6%** year-over-year driven by international markets, despite sequential declines in revenue and operating income OFSE Q1 2024 Performance (in millions) | Metric | Q1 2024 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Orders | $3,624 | -12% | -6% | | Revenue | $3,783 | +6% | -4% | | Operating Income | $422 | +14% | -14% | | EBITDA* | $644 | +11% | -9% | - Year-over-year revenue growth was driven by international markets (**+8%**), while North America revenue was flat. The Europe/CIS/Sub-Saharan Africa region saw the strongest growth at **29%** YoY[34](index=34&type=chunk)[36](index=36&type=chunk) - The sequential decrease in operating income and EBITDA was primarily driven by lower volume and negative mix[37](index=37&type=chunk) [Industrial & Energy Technology (IET)](index=7&type=section&id=Industrial%20%26%20Energy%20Technology%20%28IET%29) The IET segment achieved strong year-over-year growth with revenue up **23%** to **$2.6 billion** and operating income up **37%**, primarily driven by Gas Technology Equipment IET Q1 2024 Performance (in millions) | Metric | Q1 2024 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Orders | $2,918 | -17% | -4% | | Revenue | $2,634 | +23% | -8% | | Operating Income | $330 | +37% | -20% | | EBITDA* | $386 | +30% | -17% | - The year-over-year increase in revenue was primarily driven by Gas Technology Equipment, which grew **46%** to **$1.21 billion**[43](index=43&type=chunk)[47](index=47&type=chunk) - The year-over-year increase in operating income and EBITDA was driven by higher volume, pricing, and cost-out initiatives, partially offset by unfavorable mix from higher equipment growth, inflation, and increased R&D spending[48](index=48&type=chunk) - Orders decreased **17%** year-over-year, mainly due to the timing of Gas Technology Equipment orders, which were down **28%** compared to a strong prior-year period[46](index=46&type=chunk) [Financial Statements & Reconciliations](index=9&type=section&id=Financial%20Statements%20%26%20Reconciliations) This section provides detailed reconciliations of GAAP to non-GAAP financial measures and presents the unaudited condensed consolidated GAAP financial statements [Reconciliation of GAAP to Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section details the reconciliation of GAAP financial results to non-GAAP measures, including adjusted operating income, EBITDA, and free cash flow - Table 1a reconciles GAAP Operating Income (**$653 million**) to Adjusted Operating Income (**$660 million**) by excluding items like restructuring and impairment charges[52](index=52&type=chunk) - Table 1b reconciles Net Income Attributable to Baker Hughes (**$455 million**) to EBITDA (**$936 million**) and Adjusted EBITDA (**$943 million**)[53](index=53&type=chunk)[54](index=54&type=chunk) - Table 1d reconciles Net Cash Flows from Operating Activities (**$784 million**) to Free Cash Flow (**$502 million**) by subtracting capital expenditures[59](index=59&type=chunk) [GAAP Financial Statements](index=11&type=section&id=GAAP%20Financial%20Statements) The report presents unaudited condensed consolidated GAAP financial statements, including Statements of Income, Financial Position, and Cash Flows for Q1 2024 - The Condensed Consolidated Statements of Income show key metrics like Revenue, Operating Income, and Net Income[64](index=64&type=chunk) - The Condensed Consolidated Statements of Financial Position detail the company's assets, liabilities, and equity as of March 31, 2024, compared to December 31, 2023[66](index=66&type=chunk) - The Condensed Consolidated Statements of Cash Flows outline the cash generated or used in operating, investing, and financing activities during the quarter[68](index=68&type=chunk) [Supplemental Information](index=14&type=section&id=Supplemental%20Information) This section outlines forward-looking statements and key risk factors that could materially impact the company's future financial results and operations [Forward-Looking Statements & Risk Factors](index=14&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) The report includes forward-looking statements subject to risks such as execution challenges, market volatility, economic instability, and geopolitical conflicts - The document includes forward-looking statements concerning future circumstances and results, which are subject to significant risks and uncertainties[72](index=72&type=chunk) - Identified risk factors include: - **Execution Risk:** Ability to convert orders and RPO to revenue - **Market Conditions:** Volatility in oil and gas prices and demand - **Economic/Political Conditions:** Impact of worldwide inflation, credit availability, and sanctions - **Geopolitical Risks:** Conflicts in regions like Russia/Ukraine and the Middle East[73](index=73&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk)[75](index=75&type=chunk)

Other Non-Operating Income (Loss), Net In 2023, we incurred net interest expense of $216 million, which includes interest income of $84 million. Net interest expense decreased $36 million compared to 2022, primarily driven by higher interest income. In 2021, as part of the Organization for Economic Co-operation and Development's ("OECD") Inclusive Framework, 140 member countries agreed to the implementation of the Pillar Two Global Minimum Tax ("Pillar Two") of 15%. The OECD continues to release additional ...

9 | --- | --- | --- | |------------------------|---------------------------------------------------------|---------------------------------------------------| | Strong revenue growth | Continued margin improvement … 16% Adj. EBITDA margin | Free cash flow generation ahead of expectations | | Orders $6.9B 14% YoY | Adj. EBITDA $1,091M 15% YoY | Free cash flow $633M 4% YoY | | Revenue $6.8B 16% YoY | Adj. operating income $816M 18% YoY | Adjusted EPS $0.51 34% YoY | FINANCIALS Strong balance sheet and solid c ...