Oilfield Services & Equipment (OFSE)

- Well Construction

- Completions, Intervention & Measurements

- Production Solutions

- Subsea & Surface Pressure Systems

Industrial & Energy Technology (IET)

- Gas Technology Equipment

- Gas Technology Services

- Total Gas Technology

- Industrial Products

- Industrial Solutions

- Climate Technology Solutions

Oilfield Services (OFS)

Oilfield Equipment (OFE)

Turbomachinery & Process Solutions (TPS)

Digital Solutions (DS)

Total Revenue

ae017c1ff4494e7fc085baf0b39a3ffaacde8d9c70cbea07743c4caf431d31a0

Baker Hughes’ **higher operating income in Q3 2024** was driven by several key factors. The company achieved improved margins in both its **Oilfield Services & Equipment and Industrial & Energy Technology segments** due to higher pricing, **cost optimization initiatives**, and enhanced operational efficiencies.  **[0001701605-24-000131_bkr-20240930.htm:29]** **[0001701605-24-000129_earningsreleaseex991093020.htm:0]**  Additionally, the **Industrial & Energy Technology segment** experienced a **37% increase in operating income** driven by higher volumes, pricing improvements, and productivity gains.  **[0001701605-24-000129_earningsreleaseex991093020.htm:5]** **[0001701605-24-000131_bkr-20240930.htm:30]**  Moreover, **structural cost-out initiatives** and an increase in consolidated revenue further contributed to this significant improvement, even while facing offsetting pressures from inflation and an unfavorable business mix.  **[0001701605-24-000131_bkr-20240930.htm:29]** **[0001701605-24-000129_earningsreleaseex991093020.htm:2]** 

What drove the higher operating income in Q3 2024?

The surge in Q4 2024 net income was driven by multiple factors. Baker Hughes benefited from a **$398 million tax benefit** due to the release of a valuation allowance as the company moved into a cumulative three-year profit position in the U.S..  **[0001701605-25-000014_earningsreleaseex991123120.htm:6]**  Additionally, the company recorded **$196 million** in net mark-to-market gains on equity investments along with **$181 million** in other non-operating income, which further boosted their results.  **[0001701605-25-000014_earningsreleaseex991123120.htm:6]**  Strong operational performance also played a role, with revenue increasing to **$7,364 million** (up 8% year-over-year) and adjusted EBITDA growing by 20% to **$1,310 million**, reflecting improved efficiency and margin expansion.  **[0001701605-25-000014_earningsreleaseex991123120.htm:1]** **[BKR_3413972_9]**  Although **$281 million in restructuring charges** partially offset these gains, the combined effects of these factors led to the significant net income surge.  **[BKR_3413972_9]** 

What factors contributed to the surge in net income in Q4 2024?

In Q4 2024, the provision for income taxes was markedly different due to two key factors. First, there was a **release of a valuation allowance** that resulted in an income tax benefit of **$398 million**, driven by Baker Hughes moving into a cumulative three-year profit position with an increased pattern of profitability and anticipated tax credit utilization.  **[0001701605-25-000014_earningsreleaseex991123120.htm:6]** **[0001701605-25-000035_bkr-20241231.htm:62]**  Second, a **reversal of a $664 million valuation allowance** on deferred tax assets significantly reduced the tax expense for the quarter.  **[0001701605-25-000014_earningsreleaseex991123120.htm:6]** **[0001701605-25-000035_bkr-20241231.htm:62]** 

Why was the provision for income taxes markedly different in Q4 2024?

The spike in Q4 2024 was driven by the company's efforts to streamline its Oilfield Services & Equipment operating model. This restructuring involved reducing the facility footprint and incurred significant employee termination expenses along with impairments of property, plant, and equipment. Additionally, it included **inventory impairments of $73 million** in the cost of goods sold, all contributing to the overall increase in charges.  **[0001701605-25-000014_earningsreleaseex991123120.htm:5]** **[0001701605-25-000035_bkr-20241231.htm:120]** 

What drove the spike in restructuring, impairment and other charges in Q4 2024?

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The reduction in cash and cash equivalents during Q2 2024 was primarily due to a combination of factors. **Operating activities** contributed a positive net cash flow of **$348 million**, but this was overshadowed by negative inflows from other areas. **Investing activities** resulted in a net cash outflow of **$261 million** largely driven by **$292 million** in capital asset expenditures, partly offset by **$50 million** from asset disposals. Furthermore, **financing activities** led to a significant outflow of **$502 million** due to **dividends paid ($209 million)**, the **repurchase of Class A common stock ($166 million)**, and the **repayment of long-term debt ($117 million)**. Additionally, adverse **currency exchange rate changes** reduced the cash balance by **$18 million**.  **[0001701605-24-000109_earningsreleaseex991063020.htm:1]** **[0001701605-24-000109_earningsreleaseex991063020.htm:12]** 

Why did cash and cash equivalents drop in Q2 2024?

The jump in **cash and cash equivalents** in Q4 2024 was mainly driven by several factors. **Strong cash flows from operating activities** contributed **$1,189 million**, which was a key driver. In addition, the generation of **free cash flow of $894 million** helped bolster the cash increase. **Modest capital expenditures**, net of proceeds from asset disposals, at **$295 million** also played a role, while a **negative currency exchange impact of $37 million** was noted. These elements collectively contributed to an overall increase of **$700 million** in cash and cash equivalents for the quarter.  **[0001701605-25-000014_earningsreleaseex991123120.htm:13]** **[0001701605-25-000014_earningsreleaseex991123120.htm:6]** 

What factors contributed to the jump in cash and cash equivalents in Q4 2024?

The significant drop in the short-term and current portion of long-term debt in Q2 2024 was primarily due to the **repayment of the 8.55% Debentures due June 2024**. This repayment removed debentures with a carrying value of **$109 million** from the balance sheet, which contributed to the decrease from **$148 million** in Q4 2023 to **$34 million** in Q2 2024.  **[0001701605-24-000111_bkr-20240630.htm:8]** **[0001701605-24-000067_bkr-20240331.htm:7]** 

Why did the short-term debt figure drop drastically in Q2 2024?

The sharp increase in deferred income tax assets in Q4 2024 was primarily due to the **release of a valuation allowance** on certain U.S. deferred tax assets. This action resulted in a **tax benefit of $664 million** and had a **20% impact on the effective tax rate for 2024**. The company determined that it is now **more likely than not** that these deferred tax assets are recoverable, based on factors such as its **growing pattern of profitability**, **recent taxable income levels**, and **projected future taxable earnings**.  **[0001701605-25-000035_bkr-20241231.htm:105]** **[0001701605-25-000035_bkr-20241231.htm:104]** **[0001701605-25-000014_earningsreleaseex991123120.htm:11]** 

What led to the sharp increase in deferred income tax assets in Q4 2024?

457df53a2633b32c6fba0dc60799e5ce5b82d8c5dc21f37bc34919865a7e5cd2

Baker Hughes’ operating cash flow was lower in Q2 2024, reaching **$348 million** compared to **$858 million** in Q2 2023. This decline was primarily due to increased **working capital usage** (with higher inventory and contract assets), **restructuring payments** for employee severance amounting to **$130 million**, and a reduced benefit from **non-cash adjustments**—notably, the gain on equity securities was only **$19 million** in Q2 2024 versus **$540 million** in Q2 2023.  **[0001701605-24-000111_bkr-20240630.htm:31]** **[0001701605-24-000109_earningsreleaseex991063020.htm:12]** 

Why was Operating Cash Flow so low in Q2 2024?

The available documents focus on capital expenditures and the significant increase in expenditures for capital assets in Q2 2024. They do not provide any information regarding a sharp drop in free cash flow in Q2 2024, so a definitive answer on this specific question cannot be provided based on the available documentation.  **[0001701605-23-000063_bkr-20230630.htm:4]** **[0001701605-24-000111_bkr-20240630.htm:4]** **[0001701605-24-000109_earningsreleaseex991063020.htm:12]** **[0001701605-24-000109_earningsreleaseex991063020.htm:10]** 

Why did Free Cash Flow drop sharply in Q2 2024?

a91ff9b1fc6a8abbb504527dccbd3aba2b80bbe8535001732cd17a449a8211ef

Cash and cash equivalents (USD, millions)

Current receivables, net (USD, millions)

Inventories, net (USD, millions)

All other current assets (USD, millions)

Total current assets (USD, millions)

Property, plant and equipment, less accumulated depreciation (USD, millions)

Goodwill (USD, millions)

Other intangible assets, net (USD, millions)

Contract and other deferred assets (USD, millions)

All other assets (USD, millions)

Total assets (USD, millions)

Accounts payable (USD, millions)

Short-term and current portion of long-term debt (USD, millions)

Progress collections and deferred income (USD, millions)

All other current liabilities (USD, millions)

Total current liabilities (USD, millions)

Long-term debt (USD, millions)

Liabilities for pensions and other postretirement benefits (USD, millions)

All other liabilities (USD, millions)

Total equity (USD, millions)

Total liabilities and equity (USD, millions)

bd321e25bf2332ea111951e94178256cae81052ec5338cbab111f7c1c8442b65

Net income (loss) [USD, millions]

Depreciation and amortization [USD, millions]

(Benefit) provision for deferred income taxes [USD, millions]

(Gain) loss on equity securities [USD, millions]

Stock-based compensation cost [USD, millions]

Net cash flows provided by operating activities [USD, millions]

Expenditures for capital assets [USD, millions]

Proceeds from disposal of assets [USD, millions]

Other investing items, net [USD, millions]

Net cash flows used in investing activities [USD, millions]

Dividends paid [USD, millions]

Repurchase of Class A common stock [USD, millions]

Other financing items, net [USD, millions]

Net cash flows used in financing activities [USD, millions]

Effect of currency exchange rate changes on cash and cash equivalents [USD, millions]

Increase (decrease) in cash and cash equivalents [USD, millions]

Income taxes paid, net of refunds [USD, millions]

Interest paid [USD, millions]

Cash and cash equivalents, beginning of period [USD, millions]

Cash and cash equivalents, end of period [USD, millions]

b0b674e72f98a700a49166d999ee35ab0e138bc875963fe362b16d87afa1ba13

Total Revenue (USD, millions)

Selling, General and Administrative Expenses (USD, millions)

Other Non-Operating Income (Loss), Net (USD, millions)

Interest Expense, Net (USD, millions)

Income Before Income Taxes (USD, millions)

Provision for Income Taxes (USD, millions)

Net Income (Loss) (USD, millions)

Net Income (Loss) Attributable to Baker Hughes Company (USD, millions)

Basic Income (Loss) per Class A Common Share (USD)

Diluted Income (Loss) per Class A Common Share (USD)

Cash Dividend per Class A Common Share (USD)

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978773b98f4b3412ad3d45ea07b2ded7bf1f1c0fef1980c33355c19adbbf3783

Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

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6490da3ee4d02712a2fe09dfcf3b1d2e02a3b6d8aa096f192e3c28efba889698

Baker Hughes Rig Count in North America (Rigs)

Baker Hughes Rig Count in International (Rigs)

Baker Hughes Rig Count Worldwide (Rigs)

Remaining Performance Obligations (USD billions)

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a15a21bb2e0efcdc17bb07a645194c66c62ec42b66d20fcfb0238c8871a68239

Oilfield Services & Equipment

- North America

- Latin America

- Europe/CIS/Sub-Saharan Africa

- Middle East/Asia

- International Total

- Total OFSE Revenue

U.S. Revenue

Non-U.S. Revenue

6d3207d55e986bd89615570e9356402e92aa3252e7b632712d74749803c91870

Baker Hughes (BKR)

Financials